Sitting of 4 February 1987

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

PRIVATE BUSINESS
PORT OF FOSDYKE BILL [Lords]
As amended, considered; to he read the Third time.

Oral Answers to Questions
  ENVIRONMENT

    Land Registers
    Mr. Hunterasked the Secretary of State for the Environment how much land is currently on the land registers held by his Department; and how much has been removed since they were established.
    The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): The amount of land on the registers has now fallen below 100,000 acres for the first time to 99,968 acres; 46,000 acres have been removed since the registers were established in mid-1981. My right hon. Friend will continue to use his statutory powers to force sales; and we shall be asking Parliament to streamline the procedures for directing owners to sell. We think that it is better to build, where possible, on brown land that has previously been built on than to build on green land.
    Mr. Hunter: I warmly welcome what my hon. Friend has just said. What further measures does he propose to take to ensure that the intolerate pressures for development in counties such as Hampshire and Northamptonshire are relieved? What further measures does he intend to take to convince Left-wing local authorities that housing needs are more important than ideology?
    Mr. Patten: Alas, there are some loopholes in the Act. We need to do more and my right hon. Friend's forthcoming local government measure will introduce new ways to make recalcitrant councils, whatever their political colour, "unbelt" land so that it can be built upon.
    Mr. Weetch: Does the Minister recall that some years ago the Northfield report recommended setting up a national register of land? Does he think that there are any advantages in that? Does he agree that a national register for the ownership of land would give some sort of reliable statistical basis for a land policy? What does the Minister think of that proposition?
    Mr. Patten: I do not remember the Northfield report. However, I do have some views on a land register. We have in the Department a perfectly adequate register of unused land in the ownership of local councils, statutory
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    undertakers, and nationalised industries. It contains over 99,000 acres of land. That is there for a start and more land could undoubtedly be registered. We need to bring that land back into use as soon as possible.
    Mr. Steen: We should congratulate my hon. Friend on releasing 46,000 acres of public land. However, the problem of public vacant land involves not only getting rid of the land on the register, but stopping more land coming on to it. That is the problem that my hon. Friend must face. It will mean that we never see the end of public vacant land. Will my hon. Friend also consider the 1,000 acres that are under the ownership of the Department of the Environment, because that issue needs to be dealt with?
    Mr. Patten: Unfortunately, there are no productivity bonuses in my job, so I must make do with my hon. Friend's welcome words of praise, and I thank him for them. I saw my hon. Friend's interesting letter in The Times on this subject earlier this week. He is quite right in saying that we must do all that we possibly can to stop the flow of new land coming on to the register. Although more than 10,000 acres came off the register in 1986, about 7,000 acres went on to it. We should try to prevent that, although it is part and parcel of the identification of vacant land. We have a duty to move Government land holdings that are not in use, and a policy to move it all by 1 April 1988, if possible.

    Water Authorities
    Mrs. Goldingasked the Secretary of State for the Environment if he will be meeting the Council for the Protection of Rural England to discuss the proposed privatisation of water authorities.
    The Secretary of State for the Environment (Mr. Nicholas Ridley): Ministers are in regular contact with the CPRE over a wide range of issues, and we stand ready to meet the council to discuss matters of mutual interest.
    Mrs. Golding: Is the Secretary of State aware that some of the strongest traditional supporters of the Conservative party are completely opposed to the privatisation of the water authorities? Will he meet the CPRE and other groups in the countryside so that they can tell him of their anxiety and give him good reasons why water should not be privatised?
    Mr. Ridley: The hon. Lady comes from a county where large numbers of people are extremely well served by a private water company, so I do not see why she is so up in arms about this. However, I am always prepared to meet anybody to discuss this important measure. I hope that people will discuss the measure when it is laid before the House, not this Session, and see the proposed details. because much of the opposition is based on misapprehension.
    Mr. Andrew MacKay: Given that my right hon. Friend wants to communicate with the CPRE, at present he may find difficulty in doing so by telephone. If so, can he have a word with the husband of the hon. Member for Newcastle-under-Lyme (Mrs. Golding) to see whether the position can be improved?
    Mr. Ridley: A little pillow talk in that respect would be welcomed by all those who want to communicate with many other people.
    Mr. Allan Roberts: When the Minister meets the CPRE, will he discuss the fact that the water authorities are some of the biggest polluters of the rivers that they are responsible for cleaning, and that that is a consequence of the lack of public investment in our sewerage system? Will he point out that if private investors take over the water authorities they will not be interested in cleaning pollution? No one in his right mind would buy the Mersey, for example, to make money from an open sewer full of mercury and sewage.
    Mr. Ridley: That is a bit strong, considering that we have replaced the cuts in investment which were made under the Labour Government, whom the hon. Gentleman supported. We have now returned to a high level of investment in water. Indeed, it is perhaps at its highest level in the Merseyside area, which has a huge programme for cleaning the Mersey basin. We strongly support that and have made money available for it. The hon. Gentleman was a little ungenerous about realising what has happened since we got rid of the Labour Government.
    Mr. Hill: Does my right hon. Friend agree that local government reorganisation in the early 1970s, which included the water boards, was a disaster and that many of the water authorities were private companies before then? Is it not pure justice that we should now privatise them again?
    Mr. Ridley: I must be careful in responding to my hon. Friend, because I cannot remember which disaster fell before or after I resigned from the Government of the time. Consumers will be served better and it will be greatly in the national interest to remove the constrictions of Government from the water industry so that it can get on with the job of serving consumers.
    Dr. Cunningham: In expressing our complete opposition to privatisation of the water industry, may I ask the Secretary of State to explain why he refuses to respond to the CPRE and to my hon. Friend the Member for Houghton and Washington (Mr. Boyes) on why the European Economic Community has advised his Department that it could not recognise privatised water undertakings as competent authorities under EEC legislation because they would be responsible for pollution control and the supply of water? Will the Secretary of State answer that question? Why are the Government hesitating?
    Mr. Ridley: There are three mistakes in that question. The hon. Gentleman mispronounced his hon. Friend's constituency; the EEC is now called the European Community, not the European Economic Community; and it has not advised my Department as he suggests. The CPRE has obtained a legal opinion as to what a competent authority is. I suggest that that is premature, because until the hon. Gentleman sees the proposals drafted in the Bill it is impossible to interpret whether that legal opinion is right or wrong. Let us make the proposals before we submit them to counsel.

    Reema Dwellings
    Mr. Meadowcroftasked the Secretary of State for the Environment what action he is taking to rectify defects in Reema dwellings.
    Mr. John Patten: My Department is carrying out research into the possible problems of large panel system buildings, including all the various Reema types. If the findings show that we need to give advice about appraising or repairing the buildings, we shall do so as a matter of urgency.
    Mr. Meadowcroft: Will the Minister accept that this is not strictly a political difference between us, but a huge financial problem that is not capable of being dealt with within the confines of the Housing Defects Act 1984? There are 24 blocks in Leeds each requiring at least £1·5 million spent on repairs. Will he accept that treatment of them, similar financially to that of Airey buildings, which has been successful, would be the best way to do it and that it should be taken separately from the Housing Defects Act?
    Mr. Patten: I congratulate the hon. Gentleman on his appointment as the alliance housing spokesman. I look forward to speaking to him often about matters and trying to draw out a few nuances of policy.
    The large panel Reema buildings are not designated under the Housing Defects Act. While the hon. Gentleman charmingly and smilingly says that there is no political difference between us, I remind him of the cruel and vicious words he said about me in the Yorkshire Evening Post last week.
    Mr. Key: I thank my hon. Friend for the survey that he is undertaking into Reema buildings. May I urge him to look at the whole problem of rural housing in areas such as Salisbury district council, which, incidentally, is not under any party political control? It is facing the impossible position where a number of Reema buildings need attention, but it has no money with which to do that, even though it has been given the discretion to repair them and formulate its own policy by the Government.
    Mr. Patten: Work is going on into Reema buildings and their problems by the Building Research Establishment and that work is not yet finished. We have allocated at least an extra £14 million to be bid for by local authorities for extra help if they find themselves unable to meet their statutory undertakings under the Housing Defects Act 1984.
    Mr. Fatchett: Given that I have not said any unpleasant things about the Minister in the Yorkshire Evening Post—[HON. MEMBERS: "Shame."]—perhaps I should take this opportunity tb do so. May I put to the Minister the real problems that exist in Leeds, given that we have 20 or more Reema blocks that each need £1·5 million to be spent on repairs and renovation? Unless we have action from the Government, the tenants living in those blocks will face serious problems. It is no good the Minister saying that the housing investment programme allocation takes account of the problems of defective buildings, because the reality in Leeds is that, in real terms, under this Government, the housing investment programme allocation has been cut by two thirds. When is the Minister going to do something on behalf of the people of Leeds and those who live in those blocks?
    Mr. Patten: I have visited the hon. Gentleman's constituency, as he knows. There are certainly problems associated with the blocks, but the hon. Gentleman and the hon. Member for Leeds, West (Mr. Meadowcroft), who speaks for the alliance, referred to sums of money that

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    need to be spent per block. We have had no report from Leeds city council, and I have no idea what the figures are based on.
    Mr. Peter Bruinvels: I appreciate that Reema buildings have not yet been designated. However, will my hon. Friend look at the whole operation of the Housing Defects Act 1984, in particular at the Smith houses, because Leicester city council—
    Mr. Speaker: Order. The question is about Reema housing.

    Homeless People
    Miss Maynardasked the Secretary of State for the Environment what is his latest estimate of the number of homeless people in England.
    Mr. Ridley: About 100,000 households were accepted as homeless by local authorities in the year ending September 1986, all of whom have, or course, found accommodation.
    Miss Maynard: Does the Secretary of State agree that the figure is so high because the total building programme every week since the Tory Government came to power in 1979 is 2,000 fewer homes than the weekly record under the previous Labour Government?
    Mr. Ridley: I think that the hon. Lady has got it wrong. This is the number of people who have been accepted as homeless by local authorities and have either been found new tenancies in council houses or in hostels or bed-andbreakfast accommodation. They are not the people without homes, just the people who are classified as homeless.
    Mr. Squire: Will my right hon. Friend accept that many homeless people find homes ultimately through what are termed houses in multiple occupation? There is a Bill covering that due for discussion shortly, around which strange rumours circulate. Does he agree that if the Bill should not proceed further there is still a responsibility on the Government to improve the conditions of so many of the properties?
    Mr. Ridley: I agree that there is a need to provide more accommodation in certain parts of the country for such people. That is why we have given extra resources to the Housing Corporation so that it can attract private money to run up as many hostels as quickly as possible to house these people— high quality hostels and temporary accommodation of all kinds. That will be a major contribution to helping alleviate the problem.
    Mr. Hancock: Can the Secretary of State tell us what help he will give to an authority such as mine which has faced an increase of 49 per cent. in the past financial year in the number of homeless people? Will he reconsider his plans to designate the 80 authorities for special help from the Housing Corporation and include Portsmouth within those 80-odd districts?
    Mr. Ridley: I do not have the details of Portsmouth's problems. However, we have already made our allocations for housing for this year. I hope that Portsmouth will allocate the vast proportion of its resources either to improving run-down accommodation or to providing homes for the kind of people whom we have been discussing.
    Mr. Heddle: Does my right hon. Friend agree that the Labour-controlled local authorities which leave their local housing stock empty for three, six, nine, 12 or even 18 months would do better to use it to house the homeless? Does he further agree that the eight inner London local authorities highlighted in the Audit Commission report last week have taken twice as long to relet vacant houses as any other authority and thus wasted ratepayers' and taxpayers' money by housing people in inadequate homeless accommodation?
    Mr. Ridley: My hon. Friend is correct. On 1 April last year, 113,000 council houses were empty and a quarter of those had been empty for more than a year. As my hon. Friend has said, the problems are greatest, for example, in the famous eight London boroughs, where the inefficiency and ineptitude are greatest causing the deepest suffering to those who are without homes. When we hear on top of that that the eight Labour controlled councils in London are spending about £20 million a year on nonsense and political propaganda of one sort or another, we realise that that money could be used to house the homeless rather than being wasted on gesturing and zealotry, which is the curse of the modern Labour party.
    Mr. Speaker: Mr. Fraser.
    Mr. James Lamond: Windbag.
    Mr. John Fraser: Will the Secretary of State acknowledge that the disgraceful figure of 100,000 homeless a year is a record for the number of people who find themselves without a home? Will he accept that we regard it as a callous misjudgment to believe that people are properly housed when they are living in hostels or bed-and-breakfast accommodation, which the Secretary of State's Department acknowledges costs massively more than the cost of building a new home? That is a crazy form of economics and the Secretary of State's words will be greeted with dismay and people will be aghast at his comments.
    Does the Secretary of State not recognise that if a Government reduced the number of homes being built for rent by almost 100,000 a year, the consequence will be the disgraceful figures that the right hon. Gentleman has announced to the House this afternoon?
    Mr. Ridley: I will not enter into the controversy as to whether the hon. Member for Norwood (Mr. Fraser) is a windbag. However, there are 113,000 empty council properties, many of which have been empty for a long time. The solution to the problem is to improve those properties so that people can be housed in them. It is not simply a matter of throwing more good money after bad where councils are not prepared to take the necessary steps to make housing available to the homeless. That position shocks me. Yes, the figure of 100,000 homeless is very high. However, the hon. Member for Norwood must not confuse that with the number of people who have nowhere to live. He knows perfectly well that that figure is the number of people who have been rehoused in one form or another. I will not have that mistake deliberately made by the Labour party.

    Estate Action
    Mr. Gerald Howarthasked the Secretary of State for the Environment what information is available to council tenants and local authorities concerning the work of estate action, the urban housing renewal unit.
    Mr. John Patten: We have put out massive amounts of information—films, booklets, and reports. No authority has any excuse for not knowing what help is on offer. If any council, or any tenant, wants to know more, let me know and my Department will be in touch immediately.
    Mr. Howarth: In commending my hon. Friend for the operation of the scheme, may I remind him that, thanks to a £307,000 grant, the Rawnsley estate in my constituency has benefited to the extent of 72 properties? Will he look favourably on phase 2, which I understand is to be examined next week by my hon. Friend's officials to complete the properties? Will he tell the House whether the transfer of these properties into private ownership is to be encouraged under the scheme?
    Mr. Patten: I am glad that my hon. Friend is pleased about the way in which estate action has been able to help in the Cannock chase area. Nationally, this year we shall have helped, through estate action, more than 100,000 people, in 53,000 homes, to live in better conditions. I shall look with interest at the advice I receive from my officials—as always dispassionate advice—about my hon. Friend's constituency and its problems.
    Mr. Madden: The activities of estate action are welcome. However, does the Minister accept that people in Bradford who are in desperate housing need wonder why the Government have refused the city council permission to borrow more to build homes and to use capital receipts for building purposes. They are bewildered as to why the Government have cut housing improvement grants to enable improvement and renovation to take place. Will the Minister give information about Government policy, which is stopping the city of Bradford from tackling its housing crisis?
    Mr. Patten: I thank the hon. Gentleman for his welcome for the work that estate action is doing. That is a good sign of all-party consensus. I know that it is shared by bodies such as the Association of Metropolitan Authorities. Bradford's problems are not necessarily cured by releasing large sums of money. We need to ensure that the money is spent well, and that is precisely what estate action is doing.

    National Parks
    Mr. Knoxasked the Secretary of State for the Environment whether he is satisfied with the current administration of the national parks.
    Mr. Waldegrave: Yes, Sir, but there is always room for improvement.
    Mr. Knox: Is it fair that people in the Peak district national park should have planning decisions taken by those who are not their direct representatives? Would my hon. Friend's constituents in Bristol, West feel kindly if their planning decisions were taken by people who were not direct representatives?
    Mr. Waldegrave: I am not sure that the analogy entirely works, because many councillors who take planning
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    decisions about my constituency do not come from Bristol, West. However, there is a real problem behind what my hon. Friend says. There are not enough local residents among the county and local authority appointees on the national parks boards. I have tried to rectify that by making sure that seven out of the 11 that my right hon. Friend the Secretary of State appoints are local residents, but I endorse my hon. Friend's point.
    Mr. Campbell-Savours: Will the Minister pay tribute to the Lake District planning board for the excellent way in which it manages the affairs of the Lake District national park? Does he accept that the excellent work being done by the European Year of the Environment committee in promoting national parks and other areas of environmental interest and concern will greatly benefit our people?
    Mr. Waldegrave: I am happy to endorse the hon. Gentleman's tribute to that park, and to all the parks. We have increased the supplementary grants to the national parks by 13 per cent. this year in recognition of the valuable work that they are doing. It is vital that their publicity campaign, to which the hon. Gentleman referred, shows our people what there is to find in the parks.
    Mr. McLoughlin: Is my hon. Friend aware that of the 184 people who make up the members of the seven national park boards in England and Wales, only 42 live in the areas of the parks? Is he also aware that on the Peak district planning board, of the eight people appointed by the county council only one lives in the area of the Peak park? What other planning authorities are there where people are not directly elected or do not have to meet certain residential qualifications?
    Mr. Waldegrave: There is a problem which, in the Peak district, in particular, is bound up with political divisions, because supporters of the Labour party tend to live in cities rather than in the countryside. I urge those councils, Labour-controlled though they be, to take care to represent the interests of those who live in the area as well as the interests of those who visit from outside.
    Mr. Livsey: Will the Minister take the point that the farming community is inadequately represented on national park committees, and in some cases there is only one farmer on the committees?
    Mr. Waldegrave: I am not sure that the hon. Gentleman would find overwhelming support for that view other than, perhaps, in the farming community. We need to maintain the balance between national, recreational and farming interests. We try to do that and I think it has been recognised that we have not done it too badly in recent years.
    Mr. Soames: Will my hon. Friend consider carefully what steps he could take to advise the administration of the national parks on how to deal with the serious litter problem? Is he aware that many of the people who go into the national parks despoil the countryside by scattering litter all over the place? Will he greatly increase the penalties for that offence?
    Mr. Waldegrave: Proposals for increasing the penalties are before the House. Perhaps I could return to the first question about the Peak parks. I have seen the work of the well organised ranger service. The rangers collect tons of litter at the end of each week in the summer. This is a most

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    appalling phenomenon. The penalties for causing litter are quite high, but the difficulty lies in getting the local courts to impose worthwhile fines.

    Land Use (Rural Areas)
    Mr. Kirkwoodasked the Secretary of State for the Environment whether he will now publish a White Paper on his proposals for land use in rural areas.
    Mr. Ridley: Our policy is, and continues to be, to protect green belt land and land of environmental importance. There is no question of allowing uncontrolled development in the countryside.
    Mr. Kirkwood: Will the Secretary of State acknowledge that people in agriculture and people interested in rural use share a widespread anxiety about a vacuum in the Government's policy? Will he confirm the existence of an interdepartmental committee on alternative land use and rural employment, and will he give us an undertaking that the endeavours of that committee will eventually be published?
    Mr. Ridley: The Government will make such policy statements as they wish in their own good time. Wherever there is a policy vacuum it is likely that the Liberal party will try to fill it at the same time as the SDP, with the disastrous result of a collision in the middle.
    Mr. Chapman: May I remind my right hon. Friend that established green belt land represents less than 20 per cent. of England's countryside? Is that not all the more reason for asserting that the Government will protect those green belts, and for reminding any political party which thinks that the green belts should be breached that such belts command widespread support? In the words three years ago of the Select Committee on the Environment, the green belts should be regarded as sacrosanct.
    Mr. Ridley: I entirely agree with my hon. Friend that we must preserve the green belt. We have no intention whatever of departing from past policies about that. We do not, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) advocates from the Opposition Front Bench, believe that we should have green lungs with development running up to them on the green belt. We entirely reject that policy.
    Mr. Rooker: Why does the Minister tell lies?
    Hon. Members: Order.
    Mr. Speaker: I think I also heard unparliamentary expression. Perhaps it could be withdrawn.
    Mr. Rooker: I withdraw the unparliamentary expression, Mr. Speaker.
    Mr. Home Robertson: Does the Minister accept that tinkering with planning controls is no substitute for a proper strategy for rural economic development? Will he now answer the question put to him by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood)? Is there a Cabinet Committee studying alternative land use and rural employment? If there is, what is it doing?
    Mr. Ridley: As the two hon. Gentlemen are from Scottish constituencies, it is difficult to know whether these questions should properly be addressed to the Secretary of State for Scotland. If the Government wish to make proposals, as I am sure they will from time to
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    time, on how best to promote and preserve the rural economy, they will do so in their own good time. I make it clear that we have no proposals for re-rating agricultural land, which is apparently the policy of the SDP.
    Mr. Maxwell-Hyslop: Will my right hon. Friend pay special attention in rural planning to places where schools are full and there is no capital available to build new ones? That should cause an infrastructure interdiction in just the same way as sewerage capacity or water supply.
    Mr. Ridley: Capital allocations for education are matters for my right hon. Friend the Secretary of State for Education and Science. These matters should form part of the structure plan or, in due course, I hope, the district plan that the district will produce. Of course, planning considerations are relevant.
    Dr. David Clark: I begin my question by making the point that my hon. Friend—[Interruption.]
    Mr. Speaker: Order. The hon. Gentleman should ask a question.
    Dr. Clark: I listened carefully to the—[Interruption.]
    Mr. Speaker: Order. We are making slow progress. We have reached only question No. 7. Question please.
    Dr. Clark: I listened carefully to what the Secretary of State said. Will he give the House a categorical assurance that the report in The Observer that the Government intend to weaken the green belt around our major industrial conurbations is untrue?
    Mr. Ridley: Yes, Sir.

    Building Industry (Black Economy)
    Mr. Lathamasked the Secretary of State for the Environment whether he will instruct his working party on the effects of the black economy on the building industry to complete its inquiry and publish its report by Whitsun; and if he will make a statement.
    Mr. John Patten: This working party will not be confined to the effects of the black economy. It will be looking at a range of issues such as the role of guarantee and warranty schemes in smaller scale building works. There are no instant solutions to these complex issues and many organisations, such as the building societies, have asked how to be involved. It will just not be possible to come up with soundly based proposals by Whitsun.
    Mr. Latham: Is my hon. Friend aware that it is now one and three quarter years since his predecessor produced a Green Paper promising just these discussions with the industry on all the fiddles, rip-offs and other disasters that go on in the home improvement industry? Will he please give his Department a good boot up the backside and tell it to produce some specific proposals now?
    Mr. Patten: There are no bad civil servants, only bad Ministers. If any kicks up the backside must be administered, they must be administered to Ministers. My hon. Friend has already administered such a kick to me in his excellent comment in an excellent periodical, Building, last week. Apart from that, all the letters and representations that we have received welcome the working party. They total 22. I understand what my hon. Friend said from his great depth of experience of this issue.

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    Perhaps we should try to speed up our proceedings. I shall examine the matter again to see whether we can do so, but we shall not be able to do it by Whitsun.
    Mr. Carter-Jones: If the working party reports and if, as is most likely, it recommends that there should be better trade training and better safety practices, will the Minister undertake to implement such recommendations speedily?
    Mr. Patten: Yes, indeed. Only three weeks ago my hon. Friend the Under-Secretary of State for Employment and I met representatives of the building and construction industry and the trade unions to discuss just these problems. Afterwards, the meeting was described by one distinguished trade union leader, Mr. Albert Williams, as surprisingly constructive.
    Mr. Favell: Does my hon. Friend agree with Lord Scarman that the black economy is a good thing, or does he agree with the vast majority of the country that dishonesty should be discouraged?
    Mr. Patten: I certainly think that dishonesty should be discouraged.
    Mr. Rooker: We also welcome the working party and add to the strictures placed upon it by his hon. Friend the Member for Rutland and Melton (Mr. Latham).
    Will the Minister take on board this important point? An unregulated industry leading to a black economy has horrendous consequences for health and safety in the industry. The Minister and the working party must take on board the consequences of the deaths of workers on building sites and, in particular, on demolition sites. That cannot be divorced from the ramifications of the black economy in this industry.
    Mr. Patten: I discussed these points this morning with the National Economic Development Council. The hon. Member raised some serious points. Trade union voices will be heard on the working party and they will have a chance to make representations about these issues.

    Local Government Officers (Vacancies)
    Mr. Sumbergasked the Secretary of State for the Environment whether the Government have any plans to seek to ensure that vacancies for officers in local government are not advertised in party political publications; and if he will make a statement.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): We are discussing with the local authority associations the code of recommended practice designed to prevent this.
    Mr. Sumberg: Is my hon. Friend aware that the Labour-controlled authority in Bury recently advertised for a director of social services in Labour Weekly? Is there not a clear implication that only Socialists need apply? [Interruption.] Will my hon. Friend take firm legislative action to stop this abuse?
    Mr. Chope: I am very surprised that Opposition Members seem to approve of such a practice. Advertisements for local government officers in party political publications are inconsistent with the long tradition of politically impartial local government. To answer my hon. Friend's question, whether there was motivation to find a Labour party member to fill the post,
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    or merely to make a ratepayer contribution to the advertising budget of Labour Weekly, it is an outrageous abuse of local authority power.
    Mr. Tony Banks: Is the Minister aware that the London borough of Newham will not be advertising for vacancies either in Labour Weekly or in the Daily Telegraph, which is a Tory party newspaper, or in any other newspaper, because all vacancies have been frozen on account of the Government's attack on the London borough of Newham? Is the Minister aware that today 10,000 people marched through the borough protesting at the cuts that the Government are imposing upon us? If the Government will not listen to the arguments from Newham Members of Parliament in this House, they will have to listen to the people of Newham on the streets.
    Mr. Chope: It is very good news for the ratepayers of Newham that at last the council is responding to the need to live within its budget. I regard it as totally irresponsible of the council workers to withdraw their services. I always thought that the hon. Member was arguing about the need to provide local authority services. To withdraw them in these circumstances shows just where his true loyalties lie.
    Sir Kenneth Lewis: Is my hon. Friend aware that, arising out of many of these advertisements, far too many councillors, mostly Labour councillors, employed by one council, become councillors on another council?
    Mr. Chope: Yes. There is widespread concern about the practice of what I think is called twin-tracking. The Widdicombe report had much to say about it. We are considering what we need to do in legislative form.
    Mr. Winnick: Is the Minister aware that when I saw the question on the Order Paper I wondered why a Conservative Member of Parliament should be attacking Conservative newspapers, since most of the Tory newspapers carry a large number of advertisements and those papers are very faithful to the Tory party? Will the Minister give us an assurance that, despite what his hon. Friend the Member for Bury, South (Mr. Sumberg) said, the offices of Labour Weekly will not be searched and invaded by the special branch?
    Mr. Chope: Labour Weekly is a matter for the people who run that newspaper. They are trying to fund the newspaper out of ratepayers' money. I do not want hon. Members to think that the abuse that has been described by my hon. Friend the Member for Bury, South (Mr. Sumberg) is limited to Labour party publications. In the January issue of Marxism Today Haringey council is advertising for a member for its direct works department.

    Business Rate
    Mr. Colvinasked the Secretary of State for the Environment what responses he has received concerning his proposals for a uniform business rate.
    Mr. Chope: My right hon. Friend placed a summary of responses to the Green Paper in the Library on 15 December.
    Mr. Colvin: Even if we may accept the principle of a uniform business rate, does my hon. Friend realise that it could cause glaring injustices in certain localities? Is he aware that the village of Fawley in my constituency, living as it is under the shadow of the oil refinery, has for many

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    years been the Cinderella of local government inputs, although paying a very great amount in rates? Is he further aware that it is the local parish council that has taken the initiative in providing services for my constituents in that area? What guarantees can he give that the parish council will not he deprived of the £90,000 of rate income that it receives out of a total rate precept of £123,000 if a uniform business rate is introduced? Otherwise, it will impose an unfair burden on domestic ratepayers in the area.
    Mr. Chope: I hope that my hon. Friend supports the Green Paper proposals, because domestic ratepayers in Hampshire, including those in Fawley, will benefit significantly from them. However, it is right for my hon. Friend to remind the House of the enormous contribution made by Esso to Hampshire rates. That is particularly apposite at a time when both the Labour party and the alliance parties on the council are vying with each other to propose a far higher rate increase in Hampshire than is necessary.
    Mr. Alton: Can the Minister give the House an assurance that before any business rate changes are made that there will be a general rating revaluation? Is he aware that in Liverpool no revaluation has occurred since 1972? We now have the third highest business rate of any of the 36 metropolitan districts, and stores such as the city centre Marks and Spencer are paying the same rate as Marks and Spencer in Marble Arch in London. Does the hon. Gentleman agree that there is a good case for rate relief to he given to businesses in cities such as Liverpool?
    Mr. Chope: A revaluation is scheduled for 1990. One of the great merits of the national non-domestic rate is that it will help businesses in the north. For example, in Liverpool it will benefit businesses to the extent of reducing their burden by some 31 per cent. on present projections. which shows the advantages of the proposals.
    Mr. Hind: Following what my hon. Friend has just said, will he keep to the principles that he has put forward by introducing a uniform business rate, and bear in mind that it will bring much-needed relief in the northern inner cities, where they are over-rated by Left-wing Labour councils, which are not responsible in their approach to rates and are driving jobs and enterprise from those cities?
    Mr. Chope: My hon. Friend has put his finger on the main benefit of the proposals. Businesses in the north will gain over £500 million a year from the national non-domestic rate alone.
    Dr. Cunningham: How can these proposals—which, in effect, give the Government control over 80 per cent. of local government income—be consistent with increasing responsibility and accountability at local level? How can the Minister say that they will be beneficial to the north when Manchester would lose about £29 million of income a year, Sheffield £25 million a year and Newcastle upon Tyne £25 million a year and London would suffer a redistribution of income of almost £1 billion as a result of these proposals? How will that help to alleviate inner city problems?
    Mr. Chope: I do not accept the figures that the hon. Gentleman has quoted. Non-domestic rates conceal the true cost of local services to domestic ratepayers. On average, at present, for every £10 that is raised in rates £6 is paid by non-domestic ratepayers.

    Residential Development
    Mr. Butterfillasked the Secretary of State for the Environment whether he has any plans to review the powers of local planning authorities to control the type of home erected on land designated for residential development purposes; and if he will make a statement.
    Mr. Ridley: No, Sir. Local planning authorities already have wide powers to determine planning applications submitted to them.
    Mr. Butterfill: Is my right hon. Friend aware that there is a problem in Dorset, in that whenever we re-zone land for housing it is covered with a sea of bungalows that are marketed nationwide to the elderly, which aggravates the imbalance of our population and does not provide for the needs of local people? The chief planning officer in Dorset says that he does not have sufficient powers to create a reasonable balance of population in the area. Is there a need to reconsider whether a circular should be issued to such authorities to enable them to exert the necessary powers to create a balanced population?
    Mr. Ridley: I do not want to discriminate against the elderly, as I shall be elderly myself in due course. My hon. Friend should not be against the elderly being able to find suitable places in which to live where they want to live. I think my hon. Friend will agree that we do not want councils to engage in social engineering to decide who shall live where; people should decide where they wish to live for themselves. The planning legislation is solely about the merits of certain land uses, not about who should take up those uses. That has always been so and always should be so.
    Mr. Nicholas Baker: Does my right hon. Friend agree that, although it is quite correct that local authorities should not engage in social engineering, people should be advised to think carefully before retiring in a place away from their friends, family and former workplace?
    Mr. Ridley: I must again say that I hesitate to give that advice. I can only tell my hon. Friend that when I retire I want to get as far away from this place as possible.

    Housing Investment Programme
    Mr. Pikeasked the Secretary of State for the Environment what representations he has received since the 1987–88 housing investment programme allocations were announced.
    Mr. John Patten: I have received a number of representations.
    Mr. Pike: The Minister recently said that he was not able to visit Burnley or receive a delegation from the city to consider its acute problems. Like many other local authorities, Burnley faces a rapidly deteriorating housing situation in the private and public housing sectors because of the level of capital and HIP allocations. When will the Government take action to deal with these problems and to stop this downward spiral in housing standards?
    Mr. Patten: I pay as many visits as I can to cities and towns such as Burnley. I hope that one day I shall be able to go to Burnley. Indeed, I was in Manchester last Thursday paying such a visit. Burnley has begun to do one thing which is very important—co-operate with the private sector in getting private investment in its council

    995
    housing stock, notably on the Bleak house estate. I am surprised that Burnley council has not approached my Department's estate action unit for help with its housing problems.
    Mr. Forth: Will my hon. Friend confirm that, when a significant number of properties in a town are found to have major defects which will be expensive to repair, his Department will give due consideration to helping the local authority or private individuals concerned, especially if the properties were built under the auspices of a new town corporation which no longer exists?
    Mr. Patten: I am aware from my recent visit to Redditch in my hon. Friend's constituency of the problems that affect his constituency, especially some houses with, I believe, timber truss roofs which seem to be causing some problems. My regional office is in communication with the council on this problem.
    Mr. Rooker: Does the Minister appreciate that probably some 2 million homes were built using the same design as the houses in Redditch which are seriously under pressure? Is the hon. Gentleman satisfied that the overall housing investment programme, even including all the private money that he can get into it, is sufficient to stop the housing stock from deteriorating, let alone improve it, in view of the rate of deterioration? In other words, is it enough to stand still?
    Mr. Patten: We are doing much more than standing still. We are improving the housing situation. I owe the hon. Gentleman a long and detailed letter in response to his long and detailed letter of about 10 days ago on these points. I shall endeavour to send that letter to him as soon as possible.

    Political Advertising (Local Authorities)
    Mr. Heddleasked the Secretary of State for the Environment what further plans the Government have to control large amounts of money spent by local authorities on political advertising.
    Mr. Chope: Later this Session we shall introduce legislation to reinforce the 1986 Act and will publish the code for which the Act provides.
    Mr. Heddle: I welcome my hon. Friend's announcement. Is it not a disgrace, and will my hon. Friend confirm, that all eight of the inner London authorities highlighted by the Audit Commission as verging on bankruptcy engaged in political propaganda and advertising at the ratepayers' expense? Will my hon. Friend have time during his busy day to look at the January edition of "Sanity" and observe that local authorities from the north of Scotland to London are wasting £2,500 or more of ratepayers' money simply issuing messages of peace and goodwill? Would it not be better if they were advertising prudence and common sense to the ratepayers?
    Mr. Chope: My attention has been drawn to some of the advertisements in the January edition of "Sanity". I suspect that most of the advertisements inserted by the local authorities are already illegal and that there is no need to impose further legislation. I hope that those authorities will be referred to the relevant auditors.
    Mr. Haynes: Why did the Minister not slap down his hon. Friend the Member for Mid-Staffordshire (Mr.
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    Heddle) for tabling such an outrageous question? Is the Minister aware that Conservative local authorities also advertise in political magazines and newspapers? What about the Tory press? Why does the Minister not be fair on this issue?
    Mr. Chope: I am not aware of any Conservative-controlled authorities—
    Mr. Haynes: What about Wandsworth?
    Mr. Chope:—including Wandsworth, which advertise in party political publications. If the hon. Gentleman knows of any, I should be delighted to write to those authorities in just the same strong terms as I would to a Labour-controlled authority.
    Mr. Dickens: Does my hon. Friend accept that it is rather ironic that the very Left-wing councils which complain and bleat about Government cuts—which of course do not exist or are caused by their own overspending—spend hundreds of thousands of pounds each year on political propaganda? It must be stopped, and it will be stopped.
    Mr. Chope: I agree completely with my hon. Friend, except that he understates the problem. It is not hundreds of thousands of pounds, but millions of pounds that are being wasted.

    Housing (Voluntary Sector)
    Mr. Beithasked the Secretary of State for the Environment whether he has any plans to encourage housing developments by the voluntary sector outside designated stress areas.
    Mr. John Patten: Under the increased programme my right hon. Friend announced on 9 December, some £123 million worth of new development is available for allocation outside the stress areas—an 83 per cent. increase over 1986–87. Whether inside or outside stress areas, housing associations can benefit from the new private finance schemes by which £30 million of grant will generate £100 million of new housing investment.
    Mr. Beith: Is the Minister aware that the Housing Corporation, in its policy statement for the north-east, indicated that there would be virtually no money available for voluntary housing schemes outside the stress areas, such as rural Northumberland and the small towns of Northumberland? Will he try to induce some change in attitude so that there may be some limited voluntary housing development, which is so useful in dealing with problems in those areas?
    Mr. Patten: I entirely agree with the hon. Gentleman about the problems facing rural areas such as those in his constituency. More money has been made available by my right hon. Friend the Secretary of State to the Housing Corporation for 1987–88. I suggest that the hon. Gentleman has a word with the Housing Corporation. I also hope that he will have a word with his hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) about that most unparliamentary jersey he is wearing.
    Mr. Jessel: Within the voluntary sector, is my hon. Friend aware of the excellent work that has been done over 20 years by the Richmond upon Thames Churches Housing Trust, and is that not an encouragement and an example to the rest of the country?
    Mr. Patten: The housing trust's record is exemplary, like almost all activities in my hon. Friend's constituency.

    Rate Support Grant
    Mr. Terry Davisasked the Secretary of State for the Environment how many representations were received in his Department by 19 December 1986 in response to his consultation paper on rate support grant published on 3 December 1986.
    Mr. Chope: We have received representations from four of the local authority associations and comments from 73 local authorities in response to the consultation paper on rate support grant published on 3 December 1986. In addition, my hon. Friend the Minister for Local Government and I have seen deputations from a number of authorities and hon. Members.
    Mr. Davis: What changes in the proposals have been made as a result?
    Mr. Chope: As a result of the representations that were made on the earlier consultation paper significant changes were made, but as a result of the substantial support for the revised proposals no changes were made.
    Mr. Phillip Oppenheim: Has my hon. Friend noted that the Government's failure to propose raising the rate support grant for Derbyshire this year by more than four times the rate of inflation has prompted the Left-wing leader of the county council to describe this action as "shades of a Hitler regime"? Is this not a despicable comment and an insult to the many Conservatives who fought against the Hitler regime in the last war?
    Mr. Chope: It is an outrageous comment, particularly when Derbyshire is to get an extra £18·4 million in grant next year, and perhaps it is more than many of my hon. Friends would wish. It is right to say that the sort of outrageous comments that Mr. Bookbinder made will ensure that he never gets elected to the House.

    Bed and breakfast Accommodation
    Mr. Wainwrightasked the Secretary of State for the Environment what plans he has to seek to reduce, during the United Nations International Year of Shelter for the Homeless, the number of people living in bed and breakfast accommodation.
    Mr. John Patten: Local authorities have been asked to concentrate their available resources on homeless people
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    and others in special need; it is for them to decide how to accommodate people whom they have accepted as homeless. Recent Government measures to help reduce reliance on bed and breakfast accommodation were set out in answer to a question by the hon. Member for Liverpool, West Derby (Mr. Wareing) on 16 January. Further steps are continually being considered by us and, I am sure, by the authorities most concerned.
    Mr. Wainwright: Does the Minister not realise that even allowing for the Government's recent changes to the bed and breakfast system, the amount spent on it is exorbitant and would more than cover the cost of building many dwellings for the homeless? Will he explain why he prevents local authorities from spending a higher proportion of council house sale receipts on providing homes for those who are incurring such exorbitant costs?
    Mr. Patten: Local authorities will always need temporary accommodation to house people while they consider whether to accept them as homeless. It is something that will always be with us under any form of council control. I think that the hon. Gentleman should do more to welcome the substantial increase in provision for the homeless that has been made available by my right hon. Friend the Secretary of State's allocation of more money to the Housing Corporation so that further accommodation can be built for the homeless.
    Mr. Nicholas Winterton: Will my hon. Friend give a more sympathetic response to the hon. Member for Colne Valley (Mr. Wainwright) and allow a greater percentage of the capital receipts that are received by local authorities to be spent on the building of specialist accommodation, especially for single persons and the elderly, which I believe would go far towards resolving the problems of homelessness? I refer especially to the problems of Macclesfield borough council, which wishes—having abided by everything that successive Governments have asked it to do—to spend money that it has in the hank on the sort of housing that is required in the area for which it is responsible.
    Mr. Patten: I know how strongly my hon. Friend feels on this issue and I respect his views, as I respect what Macclesfield council has done through its housing policy over the years. We are currently approaching the problem of providing temporary accommodation for the homeless through the extra moneys that have been given to the Housing Corporation, a programme that I hope will continue in future.

Police Complaints Authority (Report)
3.32 pm
Mr. Stuart Holland: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the need for immediate publication by the Government of the report of the Independent Police Complaints Authority into the role of Inspector Douglas Lovelock in the shooting of Mrs. Cherry Groce."
The matter is specific inasmuch as it concerns both individuals and the issue of police procedures in the use of firearms. It is both important and urgent in terms admitted by the Home Secretary in his letter of 11 November 1985 to Mr. Astel Parkinson of the Lambeth police consultative group, in which he said of the incident involving Mrs Groce:
"If no charges were to be brought (by the authority) … then there would be no such bar to early publication … In that situation, if it were to arise, full and early account from the Authority of the circumstances involved would be all the more necessary in the public interest".
This admission by the Home Secretary of the importance of a full and early account from the authority conflicts with his written answer to me published in Hansard yesterday that
"the Police Complaints Authority has received from the commissioner a memorandum under section 90 of the Police and Criminal Evidence Act 1984 containing proposals in respect of disciplinary action arising from this incident."
He added:
"Memoranda under section 90 of the 1984 Act are not published."—[Official Report, 2 February 1987; Vol. 109, c. 477.]
However, unless the proceedings of the disciplinary inquiry are published, it will not be clear whether or in what way the Metropolitan police investigated, first, the claim that Inspector Lovelock had worked some 13 hours the previous day on hazardous work including the use of firearms; secondly, whether later that day and on the evening before the raid on Mrs. Groce's home he had been drinking at the same strip club as the nine officers of the Hertfordshire force against whom disciplinary charges are being brought; thirdly, whether he admitted, or stressed either at the time or later during the disciplinary inquiry, that he had been drinking in that club, and that he did not wish to take part in the armed search of Mrs. Groce's home for that reason; fourthly, how it could be, in such circumstances, that a request from a leading officer not to be assigned to the search raid early the following morning could have been refused by more senior officers; fifthly, whether those other officers insisted that he take part in
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the raid while being aware that he had been drinking and that this was in contravention of a Metropolitan police regulation that no officer should drink alcohol within 24 hours of handling a firearm?
Mr. Speaker: One minute more.
Mr. Holland: It is widely known that the charges of unlawful and malicious wounding of Mrs. Groce brought against Inspector Lovelock have been dismissed in court. It is clear that Inspector Lovelock could not have borne malice against Mrs. Groce, any more than I bear any malice against him as an individual involved in an incident with so tragic an outcome.
However, this is the third occasion, after the Waldorf and Shorthouse cases, where the police have failed to pursue disciplinary charges against officers involved in the shooting of innocent civilians. Both in terms of the Home Secretary's commitment to publish
"a full and early account from the (Police Complaints) Authority … in the public interest"
and in terms of the principle that justice not only should be done but be seen to be done, the Home Secretary should both publish such an account and make a statement to the House—
Mr. Speaker: Order. The hon. Gentleman has had his three minutes.
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 need for immediate application by the Government of the report of the independent Police Complaints Authority on the role of Inspector Douglas Lovelock in the shooting of Mrs. Cherry Groce."
I have listened with care to what the hon. Gentleman has said, but I regret that I do not consider the matter that he has raised as being appropriate for discussion under Standing Order No. 20 and, therefore, I cannot submit his application to the House.
Later—
Mr. Patrick Cormack: On a point of order, Mr. Speaker. Is it not a fact that when an hon. Member seeks leave to move the Adjournment of the House under Standing Order No. 20 he is supposed to give brief and succinct reasons why the debate should be granted and not make the speech that should be made if you, Mr. Speaker, were to grant the request?
Mr. Speaker: That is correct. Such applications are now limited to three minutes, and that is what the hon. Member for Vauxhall (Mr. Holland) had.

Palace of Westminster (Films)
3.36 pm
Mr. David Steel: On a point of order, Mr. Speaker. You will have just heard at Question Time Ministers complaining about the abuse of ratepayers' money for party political propaganda. May I draw your attention to the fact that this morning a film called "Keeping the Peace" that has been produced by the Ministry of Defence was shown—
Mr. Robert Atkins: Is this a point of order?
Mr. Steel: It is a point of order for Mr. Speaker.
The film purports to be objective about the defence policies of this country, but it is suggested that it contains party political material. As it is difficult to judge whether the cost of £181,000 should be borne by the taxpayer through the Ministry of Defence or sent to Conservative Central Office, will you rule, Mr. Speaker, that this is one film that should be shown within the precincts of the Palace at the earliest opportunity?
Mr. Speaker: I hope that I shall never be put in the position again of having to rule about films shown within the precincts of the Palace of Westminster.
Mr. Tony Marlow: On a point of order, Mr. Speaker. I apologise for not giving you notice of this point of order.
In your great wisdom, Mr. Speaker, you gave a ruling that, until the House had decided on the issue, the film concerning Zircon should not be shown on the premises of the House of Commons. We are aware that the Leader of the Opposition has stated that he believes that this is a very important matter of national security. However, we read on the tapes today that an Opposition Front Bench spokesman, the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), intends to spread this wretched film all round Scotland to a wide audience.
Page 154 of "Erskine May" refers to
"Other indignities offered to either House."
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It refers to
"Other acts besides words spoken or writings published reflecting upon either House or its proceedings which, though they do not tend directly to obstruct or impede either House in the performance of its functions, yet have a tendency to produce this result indirectly by bringing such House into odium, contempt or ridicule"
I am concerned that the Leader of the Opposition does not have either the guts or the ability to control his Front Bench. As the House is likely to be—
Mr. Speaker: Order. Will the hon. Gentleman come to the point of order for me? He has drawn my attention to the relevant part in "Erskine May". At the moment, the film may not be shown within the precincts of the Palace of Westminster, and that is a matter for me. However, if it is shown in Scotland or anywhere else, it is not a matter for me; it is a matter for the Attorney-General.
Mr. Marlow: As you know, Mr. Speaker, the ruling is contained under the heading "Breaches of privilege and contempts". This is a further indignity. This House has decided, and you decided, that the film must not be shown here, and the Leader of the Opposition said that the film should not be shown here, yet an hon. Member—an Opposition Front Bench spokesman—is taking the trouble to spread this film around Scotland.
I submit that that brings this House into ridicule. If the film cannot be shown here, how can it be shown in Scotland? When you have made a ruling, Mr. Speaker, how can it be right for any hon. Member, especially a Front Bench spokesman, to take such action? We seek—
Mr. Speaker: Order. I think that I can help the hon. Gentleman. As I understand it, this film was shown in Wales and it was not subject to any injunction at that time. If that is so in Wales, I imagine that it may be so in Scotland.

Palace of Westminster (Films)

  STATUTORY INSTRUMENTS, &c
  Ordered,
  That the draft Nightwear (Safety) (Amendment) Regulations 1987 be referred to a Standing Committee on Statutory Instruments,&c.—[Mr. Ryder.]

Fixed Parliaments
3.41 pm
Mr. Tony Banks: I beg to move,
That leave be given to bring in a Bill to make provision for a fixed five-year term for the duration of Parliament.
I shall not delay the House—I do not want to stand between it and its weekly local government Bill.
Under my Bill, there would be a set date for a general election. Other than at the end of five years, a dissolution would be granted only if the Government of the day lost a formal vote of confidence.
Although present Parliaments can run for a five-year term, it is unusual for that to happen. Since the war, only the Government of 1959 has run the full term. Indeed, the average life of a Government since 1945 has been three years and five months.
My Bill would require the Government, given an adequate working majority by the electorate, to serve out the full term. The Governments of 1945—[Interruption.] I suggest that my hon. Friends cool themselves long enough to listen to my presentation. The Governments of 1945, 1951, 1955, 1959, 1966, 1970, 1979 and 1983 all had or have such working majorities, thus making an election before the end of five years technically unnecessary. Yet only the Government of 1959 served their time. We do not yet know whether the present Government, with their fairly massive majority, will do likewise.
In the case of a hung Parliament, or where a Government majority did not survive subsequent by-elections, a defeat on a formal confidence vote would precipitate a general election. Thus, my Bill would not automatically lock a Government into coalition against their wishes. A Government in such a particularly tenuous position could, if they rejected coalition, attempt to govern, and it would then be for Parliament to decide whether to give them support. A defeat on a formal confidence motion would, as I have already said, necessitate an election.
I do not disguise the fact that my Bill would take away the single, most important power enjoyed by a Prime Minister—the power, exercised alone, to determine the date of a general election. Such power is more obviously used to try to wrong-foot the Opposition, but it can he, and indeed it has been, used to threaten disaffected elements within the governing party of the day. I believe that in a democracy such personal power is overweening and undesirable.
It has become almost commonplace for Governments to manipulate the economy in an attempt to create the most favourable circumstances before making a dash for the polls. In party political terms, that is perfectly understandable, and even grudgingly admired if it works. However, such emphasis on short-term electoral fortunes contributes to cynicism among the electorate and creates instability within the economy.
With a fixed Parliament, there would be an end to the debilitating and unsettling media speculation about the date of the election. Such speculation weakens every Government, even those with substantial majorities, and by doing so eventually forces a Prime Minister's hand as the options visibly run out.
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In recent months, both the Prime Minister and the Chancellor of the Exchequer have made pleas for more long-term planning within the economy. Yet the uncertainty over the election date makes long-term economic planning exceedingly difficult both domestically and internationally. Fixed Parliaments are normal practice in many other countries, including some of the most economically successful. In Japan, Norway, Switzerland and the United States of America elections cannot be called before their determined time. In West Germany, Belgium and Sweden, Parliaments can be dissolved early but only on a vote of no confidence. As I have already said, my Bill proposes a similar procedure for our own Parliament.
Even with fixed Parliaments, a Government would still seek to coincide economic success with the date of a general election. However, it would be done openly and the electorate would be equally aware if a Government stage-managed a defeat in a confidence vote.
If the House gives me leave to introduce it, the Bill will bring greater political stability, make economic planning less fraught, and restore to Parliament some of the power that has been taken away over the years by the Executive.
Mr. Geoffrey Dickens rose—
Mr. Speaker: Does the hon. Member seek to oppose the Bill?
Mr. Dickens: I wish to oppose the Bill for one or two reasons, but I shall not unduly detain the House, Mr. Speaker.
Passage of the Bill would mean that the cries from Opposition parties of "Resign" to a Prime Minister or "Go to the country" to a Government would no longer be heard in this Chamber. Lobby correspondents and political journalists in the Press Gallery would be deprived of the pleasure of speculating when the election might be called. Therefore, I feel very sad that you should seek to deny so many people that pleasure—
Mr. Speaker: Order. It has nothing to do with me!
Mr. Dickens: I am very sad that the hon. Member for Newham, North-West (Mr. Tony Banks) should seek to deprive those people of that great joy and pleasure. As I do not wish unduly to detain the House, I shall not seek to force a vote.
Mr. Speaker: The hon. Member should sustain his opposition at least to the point of calling "No" when I collect the voices.
Mr. Andrew Faulds: On a point of order, Mr. Speaker—
Mr. Speaker: Order. I am on my feet and putting the Question.
Question agreed to.
Mr. Speaker: Who will prepare and bring in the Bill?
Mr. Banks: Not many takers for this one, Mr. Speaker, but what we lack in quantity we make up for in quality.
Bill ordered to be brought in by Mr. Tony Banks and Mr. Austin Mitchell.

Fixed Parliaments
  FIXED PARLIAMENTS
  Mr. Tony Banks accordingly presented a Bill to make provision for a fixed five-year term for the duration of Parliament: And the same was read the First time; and ordered to he read a Second time upon Friday 24 April and to be printed. [Bill 64.]
Orders of the Day

  Rate Support Grants Bill
  Order for Second Reading read.
  3.48 pm
  The Minister for Local Government (Dr. Rhodes Boyson): I beg to move, That the Bill be now read a Second time.
  The House has had to consider more than the usual share of local government finance in recent months—[Interruption.] I am glad that I have the unanimous approval of the House, at least at the beginning of my speech. I am not sure whether the amount of that legislation is a matter on which I should express my sympathy to the House, or vice versa. As hon. Members are aware, this legislation has arisen, for the most part, because of legal problems or deficiencies in the existing legislation and in the way in which it was thought to operate.
  I am pleased to tell the House that the Bill is not of that category. It is a positive measure—[Interruption.]—designed to improve the operation of the current rate support grant system, at least until such time as we are able to bring in a new and more satisfactory system of local government finance. My right hon. Friend has already announced his firm intention to introduce legislation no later than the first Session of the next Parliament.
  This is a Bill to abolish the procedure known as grant recycling. I shall summarise for hon. Members how the procedure works at present, and the disadvantages of this system, before explaining how the Bill seeks to replace it.
  The block grant system may, if Plato will forgive me, he likened to his definition of democracy:
  "A charming form of government, full of variety and disorder, dispensing a sort of equality to equals and unequals alike."
  That may also be a definition of grant recycling under the present arrangements my right hon. Friend announces, in the context of the rate support grant settlement, the aggregate amount of Exchequer grant available to local authorities for the year in question. From that he deducts the amounts estimated to be required for specific and supplementary grants, and after a further deduction for domestic rate relief grant the balance is the amount of money which he calculates will be available for distribution to local authorities as block grant. He also announces the principles on which that grant is to be distributed and estimates the amount of grant which each authority can expect to receive on the assumption of a certain level of expenditure. Some assumption about expenditure needs to be made at this stage, in order to be able to set the grant-related poundage schedules which govern the distribution of the grant total, and to provide examples of authorities' likely entitlements.
  Authorities, however, in this fallen world, do not always spend at the levels we have assumed. Some authorities will turn out to have spent less, and will in most cases then be entitled to more block grant than anticipated. Other authorities will choose to spend more than has been estimated, in the full knowledge that their grant entitlement will decrease accordingly.
  Under the present system, if the sum total of actual grant entitlements is calculated to be more or less than the

  1007
  sum originally made available, the poundage schedule governing grant distribution is reset for all authorities in a supplementary report so that the aggregate of authorities' grants is equal to the original amount. So, when authorities spend more and lose grant entitlement the resulting underclaim is eventually redistributed among all authorities on a common poundage basis. Similarly, if some local authorities underspend and thus receive extra grants, all authorities lose some grant so that the total grant from the Government remains exactly the same. Hence the term recycling. This process continues periodically for some time after the grant year in question as new and better information about authorities' actual expenditure becomes available.
  The procedure has several disadvantages, which have become increasingly apparent to the Government and clear to many local authorities. The first and most important of these is that authorities have no certainty about their likely grant entitlements at the crucial stage when they are setting their budgets and their rates for the forthcoming year.
  Mr. Allan Roberts: Will the Minister give an assurance to local government that the Secretary of State's guarantee at the beginning of the 1986–87 financial year that £2·41 million would be given to Sefton through the recycling process be honoured? There may be a little more money. Surely those assurances enable local authorities to plan, knowing that they were guaranteed a certain sum. If that practice were continued, the Minister would not need to pinch money from local authorities.
  Dr. Boyson: The hon. Gentleman will appreciate that I do not have the details about Sefton with me. Last year a commitment was made that at least £400 million—
  The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): It was £450 million.
  Dr. Boyson: It was £400 million at the beginning and shortly thereafter a further commitment was made. I am grateful for the help of my hon. Friend. The sum was increased up to £500 million and a press release was circulated.
  Grant recycled in 1986–87 is likely to be £611 million, so, to answer the hon. Gentleman's question immediately, I cannot see that there would be any threat to the sum guaranteed to Sefton, depending on its expenditure. However, I shall certainly write to the hon. Gentleman about this. The amount from Government depends on the level of expenditure of a local authority. If a local authority has increased its expenditure greatly, obviously that will have an effect on the grant as the original grant will be reconsidered. Sefton, like every other local authority, will have its share of grant recycling.
  Mr. John Heddle (Mid-Staffordshire): I should like to follow the point niade by the hon. Member for Bootle (Mr. Roberts). Will my hon. Friend confirm that if the House gives the Bill a Second Reading and it passes through all stages in Committee and the other place, it will have no effect on the rate support grant settlement for 1987–88 and that the rate support grant settlement for the coming financial year is well in advance of that for previous years—some 5·5 per cent.—for those local authorities that are not rate-capped, that is, well above the rate of inflation?
  Dr. Boyson: I can give my hon. Friend the assurance that he seeks. The Bill deals simply with the question of recycling, not with the original distribution, which has already gone out. The end of recycling means that each local authority will have the grant that has been given to it, provided that it spends at the level of the settlement spending assumption. I can give that straightforward assurance.
  Mr. Robin Squire: Does my hon. Friend agree that in general terms the position is similar to that in which, if the Ministry of Defence spent in line with its estimates for any year, it should expect some extra money at the end of the year? At present that is what is happening in local government and that is what the Minister is rightly trying to stop.
  Dr. Boyson: I agree with my hon. Friend's definition. Without bringing in other Departments, I realise that that was a splendid illustration of what is happening and what the Bill is about.
  To continue with what I was saying, the process continues periodically for some time after the grant year in question as new and better information about authorities' actual expenditure becomes available. As I have already said, that procedure has several disadvantages. The first and most important is that when local authorities set their budget they have no certainty as to whether they will have more money coming to them as the year goes on. Obviously, the right time to make firm decisions is at the beginning of the year when the distribution of their money between the various local departments should be made. Relatively large amounts of additional grant can subsequently appear or be lost purely as a result of an authority's spending elsewhere.
  Dr. John Cunningham: I am listening carefully to what the Minister is saying. He should tell the House what has happened to the promises made by the right hon. Member for Mole Valley (Mr. Baker), who is now the Secretary of State for Education and Science. He told the House, particularly Conservative Members, that grant recycling would be used to help bring additional resources to low-spending shire authorities. What has happened to that promise? What has happened to the promise of the present Secretary of State for the Environment, who said that he was bringing an extra £800 million or £900 million in rate support grant for the coming financial year, because the Bill will reduce that amount by at least half? That is the intention of the Bill.
  Dr. Boyson: The settlement that my right hon. Friend brought out in the summer is 9 per cent. higher than the previous year in Government grant; over £1 billion. No authority needs to lose one penny of that if it spends at settlement level. Settlement spending assumption is 1·5 per cent. higher than inflation. If the £400 million of this year was lost, it would mean that authorities throughout the country were spending at 8·5 per cent. above the previous year. If they lost £600 million this year they would be spending 11 per cent. higher, that is three times the rate of inflation. The hon. Member for Copeland (Dr. Cunningham) is a reasonable individual and he must be as shocked as I am to realise the level of expenditure that would be required to lose grant to that extent.
  The hon. Member for Copeland's intervention gives me the opportunity to put on record the fact that if local

  1009
  authorities spent only 0·5 per cent. higher than inflation, at the rate of 4·25 per cent., which is 1 per cent. less than the settlement presumed, they would gain an extra £132 million from the Treasury. The opportunity is present. It is not a game of football in which the intention is to score goals, or a procedure in which the way to get more money from the Treasury is to spend less. However, more money can be obtained by spending 0·5 per cent. over inflation.
  I read what the hon. Member for Copeland said last year when this matter was debated. It is surprising, sometimes, how people change sides as time passes. We have all experienced that. On 20 January 1986 the hon. Member for Copeland said:
  "the local government finance system is now much more difficult to understand and predict than before".
  I will not disagree with that. Indeed, we are trying to simplify matters and assist understanding throughout the House by introducing this measure. The hon. Member for Copeland went on:
  "The figures issued by the Government on the entitlements of indvidual authorities are misleading, because they ignore the 'close-ending' factor—".
  Which is grant re-cycle—
  "The Secretary of State cleverly made seductive promises … about what their authorities might get. Does he suppose that responsible councils and treasurers can fix budgets and levy rates and precepts on what they might get out of close-ending? Of course not. He knows that that is a preposterous suggestion. He knows that no responsible local authority would dream of budgeting on that basis."—[Official Report, 20 January 1986; Vol. 90, c. 57.]
  I rest the whole of the Bill on the comments that the hon. Member for Copeland made then. Indeed, his comments were very responsible.
  I would like to continue—
  Mr. Michael Meadowcroft: Good.
  Dr. Boyson: I believe that it is a good thing to continue and I am glad that I have the support at least of the Liberal Benches. Indeed, perhaps the whole alliance may be joined in the desire for me to continue. There may be continuity there, if nowhere else.
  As I have already said, these amounts cannot he anticipated and are quite outside an authority's control. Berkshire county council, for example, will this year receive about £39·3 million of block grant on our latest estimates. Of that, some £11·3 million will come from recycled grants—£10·3 million of which the council did not anticipate when it set its budget and rate for the current year.
  Many local authorities have complained about the effects of that recycling, even though they stood to gain extra grant this year. Extra grants have been available to Nottinghamshire, Cheshire and many other authorities and these were not expected when the councils set their budgets. I can quote the example of one county council, Dorset, which sent us a long and detailed paper in June last year on the advantages of a new approach which would enable local authorities to calculate their grant with greater certainty and would produce a more direct relationship between an authority's spending decisions and its grant. The approach advocated was exactly along the lines which the Bill seeks to introduce. We have received similar letters from other authorities from which I could quote if there was time.
  On the other hand, in 1985–86 for example, initial grant claims exceeded the amount available by £123 million. Therefore, £123 million had to be clawed back from all
  1010
  authorities' entitlements. Clearly that creates quite unacceptable uncertainty for local authorities. A further disadvantage of the present system, of particular concern to the Government, is the fact that any grant recycled when there is an underclaim, is distributed both to high and low spending authorities. Authorities which choose to penalise themselves by spending up, and which lose grant as a consequence, can paradoxically receive back large amounts of windfall grant, regaining on the swings what they quite justifiably lost on the roundabouts.
  All that sounds like something from "Alice in Wonderland". Indeed, it brings to mind a piece of nonsense verse by Lewis Carroll which might have been written to describe grant recycling:
  "I gave her one, they gave him two
  You gave us three or more;
  They all returned from him to you,
  Though they were mine before."
  Basically, that is what recycling is about.
  That, then, is how the system works and why it needs to be changed. My right hon. Friend the Secretary of State announced his proposals to abolish grant re-cycling in July last year. Measures to implement them were foreshadowed in Her Majesty's Gracious Speech at the beginning of this Session and the intention to legislate was confirmed in the House on 13 January when my right hon. Friend announced his firm intentions for next year's rate support. grant settlement.
  The Bill is, I am sure hon. Members will agree, admirably short, comprising just three clauses.
  Mr. Allan Roberts: If the Minister is concerned that the present re-cycling system takes money from his so-called overspenders, does not give it to underspenders but distributes the money to all local authorities whether they over or under spend, why does he not introduce a new system which does what he wants—takes from the so-called overspenders and gives it to the underspenders instead of taking it from everyone and giving it to the Treasury?
  Dr. Boyson: It is not taken from everyone; it is just taken from those authorities which overspend when compared with the assumption. Consideration was given by the Government to the suggestion made by the hon. Member for Bootle (Mr. Roberts). The disadvantage of his suggestion is that an authority may be spending a lot of money yet an assessment is made on its support grant allocation and that authority may receive money back. Another authority, which is not spending much at all, may not be rewarded because it is assessed against its record in recent years. The difference between authorities' expenditure is considered in recent years. Thus there will be rewards for authorities which do not deserve them under that method.
  Mr. Tim Rathbone: Unfortunately, there is another side to that coin. There are authorities that have been particularly frugal in their expenditure over many years, and which, when there was rate-capping and recycling, were able to recoup some of the grants that they would have received and the support for their low levels of expenditure. That redistribution has been removed and my authority in east Sussex, which has been praised by my hon. Friend's Department year by year, and which has been promised action year after year to correct its balance of expenditure, has this year—not uniquely but as one

  1011
  of very few authorities—had its available cash reduced. There will be no extra funds available later in the year. That problem exists, but the Bill does not tackle it.
  Dr. Boyson: There are two points in my hon. Friend's intervention. My hon. Friend's points relate to the method of distribution. The basic problem is not recycling or no recycling for some authorities. Rather, the basic problem lies in the way in which the rate support grant is distributed. Because of our suspicion of the way in which the system works at the moment and the disadvantage of the domestic rating and business rating systems, we have suggested that, in the first Session of the next Parliament, we will introduce legislation to change the system.
  I accept that within the system there have been advantages to such authorities as Sussex, part of which my hon. Friend the Member for Lewes (Mr. Rathbone) has the honour to represent. Last summer my right hon. Friend the Secretary of State gained an excellent settlement of an extra £1 billion of real money—an increase of 9 per cent—for distribution. More money was put in. However, my hon. Friend's objection relates to the method of distribution. The extra money was only a stop-gap help. There must be a change in the system to help the shires. That will be far more satisfactory in the long run.
  The Bill, as hon. Members will agree and as I have already said, is honourably short as it comprises just three clauses. Clause 1 contains the meat of the Bill. It enables the Secretary of State to end the practice of grant recycling by requiring him not to be concerned to distribute the amount of block grant estimated to be available in any previous report. Instead, he may vary the amount of grant payable in any subsequent report. It also enables the Secretary of State to leave out of account new information about authorities' actual or likely total expenditure if he needs, for whatever reason, to determine new principles for grant-related poundages in the supplementary report.
  In addition, clause 1 ensures that the Secretary of State can make such assumptions as he considers appropriate about authorities' total expenditure when he sets the poundage schedule in a rate support grant report.
  Mr. Michael Hancock: Will the Minister give an interpretation of some of the words in the Bill? Last week, when we were discussing the previous Local Government Bill, he said that the interpretation of words was important. What is his interpretation of clause 1(b)(ii)? That can be misinterpreted easily, and I should like, this afternoon, for its meaning to be read in to the record, so that everybody is clear that the Minister knows exactly what it means, and we can then go into Committee bearing in mind what he has said.
  Dr. Boyson: I look forward to dealing with this important clause in Committee in great detail. Clause 1(b)(ii) is the centre of the Bill. Previously, every time there was a supplementary report, the Secretary of State had to bring all local authorities into line so that the sum going in grant had to be the same as what was previously determined. In this case, there is no such determination. The same £12 billion is going in grant this year. If the authorities overspend, that amount in full will not go out. On the other hand, if authorities underspend, a greater amount will go from the Treasury. Without this, the
  1012
  Secretary of State would have to bring all local authorities into balance in total expenditure, so that every time one local authority over or underspent, it would affect every other local authority.
  Mr. Hancock: Does that mean that every local authority will be treated the same and the availability for grant will be the same for all local authorities? The clause could be interpreted to read that that was not the case.
  Dr. Boyson: I hope that I am informing the hon. Gentleman correctly. The rate support grant statement, made by my right hon. Friend the Secretary of State, set out the sum of grant to each authority and presumed a 5·25 per cent. expenditure increase. The difference of grant to each authority will depend on whether it has spent over, below or at the presumed level. I am grateful to the hon. Gentleman for drawing my attention to this, because this is the kernel of the Bill.
  Clause 2 contains a rather technical provision which, though incidental to the abolition of grant recycling, is necessary to ensure the smooth operation of the modified scheme by removing a possible doubt in the existing legislation. This is in the use of the words "the appropriate class" which appear several times in the 1980 Act in describing different types of authority, but which our legal advice suggests may be susceptible to different interpretations in different parts of the Act. Our intention in this clause is to ensure consistency of interpretation, and to clarify that the Secretary of State's ability to consider different types of authority separately when setting the mechanisms for rate support grant reports applies in the same way throughout.
  The third and final clause of the Bill, which is the most simple, provides that the Bill shall apply to England and Wales only.
  Having seen reports in one newspaper today, I should like to put at rest suspicions about what clauses 1 and 2 are about. We can all agree on clause 3. We are not seeking to validate any actions that were taken on the distribution of grant in London following the abolition of the GLC. Nothing in the Bill does that. The Bill has no bearing on the Greenwich case, which concerns the so-called Bromley error. The definition of classes of authority has no bearing on this. The Bill removes doubt about the precise meaning of part 6 of the Local Government, Planning and Land Act 1980, as amended by the Rate Support Grant Act 1986. We use this to set grant-related expenditure and grant-related schedules on spending and GRE. We need this to be correct to ensure that we can distribute extra block grant to educational authorities, and not all local authorities, following the Government agreed teachers' pay settlement. The Bill does not seek validatory action by my right hon. Friend the Secretary of State.
  In practice, the Bill ensures that the grant-related poundage schedule determined in the rate support grant report to distribute the amount of block grant then available will not be redetermined to take account of the spending decisions of individual authorities. In consequence, any grant not claimed because authorities overall spend more than the settlement will not be paid out. If, overall, authorities claim more grant by spending less, additional grant will be provided subsequently by the Exchequer.
  That the abolition of grant recycling will bring greater certainty and stability to authorities' block grants is, I

  1013
  believe generally acknowledged. Many local authority members and officials who have written or come to see my colleagues and I in the course of our consultations on next year's rate support grant have recognised this. The Association of County Councils, the Welsh Counties Committee and the Association of District Councils have welcomes the principle of our proposals, although naturally they and many of the individual authorities who have commented qualify this by wishing that more grant could be made available or that the settlement spending assumption were higher. However, I remind the House that the rate suport grant settlement which my right hon. Friend has announced for 1987–88 is an extremely generous one. It represents an increase of more than £1 billion—or over 9 per cent.—in the total amount of Exchequer grant available to local authorities in England next year—a substantial real terms increase.
  Labour Members will probably seek to suggest, as they have done in the past, that the abolition of grant recycling will automatically wipe out part of this increase. That has already been said. This is not true. There is nothing automatic about it. If authorities can restrain their spending increase next year to the settlement assumption—which in England is 5·25 per cent.—in current terms, rate-limited authorities excepted, which is well above the expected level of inflation of 3·75 per cent., they will be able to claim in full the extra block grant made available. I hope they do so.
  However, if some authorities choose to increase spending beyond this assumed level, they will lose grant, as is the case now. The difference under the provisions in this Bill is that they can no longer hope to regain some of this grant through recycling. This is a positive benefit of this Bill.
  The Bill will put an end to grant recycling and the uncertainties and illogicalities that go with it. In future, local authorities will have much greater certainty as to their grant entitlements. They will know their entitlement for a given level of spending at the time of the settlement, and will be able to calculate what their grant would be for any other level of spending in the knowledge that other authorities' decisions will no longer he able subsequently to change the whole picture. Unlooked-for sums of grant will no longer wash into authorities' accounts long after their rates for the year have been set. Neither will the Government take away grant in order to pay for some sudden increase in another authority's entitlement. An authority's grant will, from now on, if the Bill becomes law, depend on its own spending decision alone, which can only help to improve its accountability to the ratepayer.
  The Bill will encourage sensible, responsible and properly planned budgeting by local authorities. I commend it to the House.
  4.18 pm
  Mr. John Fraser: On 16 January 1985, a former Secretary of State for the Environment, who was not then, and is not now, a Secretary of State for the Environment, described the debates on local government finance as
  "occasions when the disgruntled speak to the disenchanted in front of the disbelieving."
  He went on to describe the rate support system as:
  "understood only by the initiated … byzantine in its complexity … fully comprehended only by those who have a taste for scholastic theology".—[Official Report, 16 January 1985; Vol. 71, c. 413.]
  1014
  Two weeks ago, during the debate on the Local Government Finance Bill the hon. Member for Ealing, Acton (Sir G. Young), who is also no longer a local government Minister, said that the more the local government finance system was explained to him the less he understood it. This week the Local Government Finance Bill is in another place. It is intended to give retrospective cover to a series of illegal acts committed by a series of four former Secretaries of State for the Environment. That Bill will also remove the legal challenge in the courts to the past exercise of powers by the Secretary of State.
  The Bill before us today adds another chapter to the byzantine saga. Like last week's Bill, this Bill has retrospective effect under clause 2. The Minister said that it was not retrospective, but of course it is because it seeks retrospectively to validate past acts. I shall go into that in more detail later. Clause 2 is certainly retrospective. This Bill, together with last week's, removes the challenge in the courts to past rate support grant decisions and introduces new and wide discretions. It is a further part of the tangled mess of the Government's creation.
  This Bill like last week's and like the ones we had last year and two years before that, are all developments of the rate support grant system introduced in 1980 by the right hon. Member for Henley (Mr. Heseltine) who, like the others I have mentioned, is no longer a Minister. The right hon. Gentleman gave a broad description of the system in 1980. After listening to the Government's assurances, it is as well to go back and look at how the present system, which is being slightly amended, was described then.
  The then Secretary of State, the right hon Member for Henley, announcing the new block grant system, said:
  "The new system in no way sets limits to what an authority spends".
  That is no longer true, is it? He said:
  "nor does it fix the level of an authority's rates."
  That is no longer true, is it? He went on:
  "Those decisions remain with the authority."
  That is no longer true. He went on to say:
  "No cash is actually removed from an authority,"—[Official Report, 5 February 1980; Vol. 978 c. 251–2.]
  That is no longer true either, is it? We must look back to the assurances that were given when the sytem was introduced and listen also to the assurances given about last week's Bill and about this week's Bill. We must remind ourselves that this is the 42nd legislative skirmish between the Government and local councils since 1979.
  This Bill is only three clauses long and is therefore admirably short, but it is another milestone along the road of muddle and misanthropy, incompetence and illegality, and sometimes plain malevolence, in the administration of the rate support grant system. 'We have had change after change, penalty after penalty and retrospection after retrospection. It is like the films produced by Sylvester Stallone, the "Rocky" series. Every film has a sequel, although even Sylvester Stallone never got anywhere near the number of sequels being produced by the Government.
  To paraphrase and depart only slightly from the wording of the Bill, it will enable the Secretary of State to do as he thinks fit. That is the context in which the Bill is presented, and so far that is a charitable view of the legislation. The financial memorandum could hardly be more obscure. I cannot remember looking at the memorandum on a previous Bill and finding out from something which is supposed to be informative that the Bill may cause more or less money to be spent. That is the

  1015
  least informative piece of information that I have ever seen in a financial memorandum. It is so obscure that it is quite clear that more money could be spent. However, given the Government's record, that is unlikely.
  We are talking not about a theoretical world in which local authorities spend only 0·5 per cent. above the rate of inflation, but about the real world in which on the best estimates there will be a loss to local councils, and that means a loss to ratepayers. On one low estimate the loss will be £2 billion to £3 billion. On a higher estimate it will mean a loss to ratepayers and councils of £1,000 million. Those are not exaggerated figures because, as the Minister said, the amount of grant recycled in the current year was £611 million. The Bill has huge financial consequences for local authorities and diminishes the increase in support for local authorities that was promised only last year.
  I listened carefully to the Minister because I thought he might invalidate many of the things that I was proposing to say. He said that the recycling system is complicated and creates uncertainty. We knew he would say that because it is in the explanatory memorandum. But he might have said that there is another way of distributing this money with a greater degree of certainty under a different but fair and equitable system for local authorities. Almost everything he said pointed the way to large amounts of this money going back to the Treasury.
  The Minister gave his own description of how the present recycling system works. I shall try to give my version of that because local government finance is not as byzantine as some people make out. At present, the rate support grant goes from the taxpayers via the Treasury to local councils. As the Minister said, it is calculated as a fixed global sum which is shared among local councils according to Government assessments, not councils' assessments, of their needs. To some extent it takes into account previous spending records. To say the least, it is a somewhat odd system, because if a local elected council assesses the needs of its electorate as being much greater than the Government's assessment, it is rate-capped, or its grant is withdrawn or, at worst, it suffers both.
  If a council disagrees with the Government over the assessment it will be hammered and receive less money. That is a somewhat odd system, but it gets odder. If a council agrees with the Government's assessment of its needs as set out in the grant-related expenditure assessment and tries substantially to move up to the Government's assessment of its needs, it still gets punished—certainly it will not be rewarded.
  There is a third aspect of this odd and curious system. If a council disagrees with the Government's assessment of its needs and thinks that the Government have assessed that need as too great, and if the council spends below the Government's assessment of need, it gets some reward. That is the rate support grant system introduced in 1980. Since that system was introduced, the global sum has been allocated to local authorities collectively. Money has been withheld from councils that overspend according to the Government's estimates and, as the Minister explained, that pool of money is redistributed. As well as doing other things, clause 1 enables that money to be seized back by the Treasury instead of being shared by the beneficiaries for whom it was intended.
  At present, the system is akin to a tote or a pool in which, even if the odds or the shares are changed, the total
  1016
  distribution will still go to those who are entitled to share in the pool. At least the system has that certainty. The new system that clause 1 introduces allows the Department of the Environment to fiddle the odds. I quote the word "fiddle" from a speech on the rate support grant by the hon. Member for Tiverton (Mr. Maxwell-Hyslop) about a year ago. Under the new system, the Department of the Environment can fiddle the odds and can change the shares rather like the promoter of a lottery or a bookie who puts his hand into the pool and takes some of the punters' money. As I said, the amounts involved are enormous.
  If London authorities generally overspend in the forthcoming year by 3 per cent., leakage from the pool will be £112 million in 1987–88. That leakage will be three times greater than the total amount of urban aid given to London local authorities in the forthcoming year as partnership aid, programme aid and other urban assistance. If shire counties overspend—that is the DOE definition of overspend—by an average of 3 per cent. the loss from the pool to the shire counties will be £193 million, and that will wipe out in aggregate all the cash gains that the Minister claims for the current rate support grant settlement. All the cosy consultations between the Secretary of State and Back-Bench Tory MPs will come to nothing.
  The same objection is made by the Association of County Councils. They say that, of course, they should like to see clarity and certainty. It says:
  "It was made clear, however, that such support—"
  that is, for this new system—
  "was only on the basis that an adequate spending assumption which properly reflects local authorities' spending was used in any RSG Settlement."
  This is the crucial part of clause 1. It goes on to say:
  "This would ensure that the full grant pool would be distributed and avoid the unexpected results for 1987–88 whereby it is estimated that some £400m of grant will be returned to the Treasury."
  It goes on to state:
  "Since the Association does not regard the assumed spending underlying the 1987–88 Settlement as adequate, nor have any assurances been received for the future, then the total abolition of block grant recycling must be opposed at this time."
  The potential losses, even on a 3 per cent. overspend basis, could wipe out all the gains that the authorities are likely to receive.
  The figure of 3 per cent., which is a modest one, is not a far-fetched forecast. In the 30 January edition of the Local Government Chronicle, I saw the recommended or approved precepts for a number of English counties. They are not loony Left councils—I do not think that there are any loony Left councils—but Left councils that care. Whatever the argument, the councils that I shall mention are not loony Left—some of them are not even Left or centre.
  North Yorkshire plans to increase its spending next year by 10·9 per cent. That is well above my 3 per cent. figure. Oxfordshire—the Minister for Housing, Urban Affairs and Construction, who represents a constituency in Oxfordshire, has departed from the Chamber after his bashing at Question Time—is budgeting for an increase of 15·8 per cent. Somerset is budgeting for an increase of 7·8 per cent. Surrey—no militants are in command in Surrey—is budgeting for a 7·44 per cent. increase in its precept, and Wiltshire is budgeting for an increase of 9·9

  1017
  per cent. A series of Conservative or middle-of-the-road authorities plan to bring about the grant loss that I put forward.
  On Government assumptions, if all local authorities overspend by more than 3 per cent., the loss will be over £400 million. To put that sum in context, that is £70 million greater than the Government expend on arts, libraries and museums. It is close to the total amount that the Department of Environment provides for housing subsidies for local authorities with great housing needs. It is a large loss indeed. I shall translate the recycling loss for individual authorities and give the House some figures. Taking this year's figures as representative, Essex would lose £19 million. Hampshire—I am sure that this is of interest to the Under-Secretary of State for the Environment, the hon. Member for Southampton, Itchen (Mr. Chope)—would lose £17 million, and Birmingham would lose £15 million.
  I also have figures for some London boroughs. Bearing in mind the Government's interest in law and order, the Metropolitan police will lose £11 million with this system. Hard-pressed boroughs such as Hackney would lose £0·8 million, Islington would lose £1·1 million, and Lambeth— my borough—Southwark and Wandsworth would lose £1·3 million. It is interesting to look at the hard-pressed borough that the Minister represents. On these assumptions, as a result of what he is doing, the borough, of which his constituency forms one third, would lose £3 million. Newham would lose £2 million. I am talking not about inconsequential sums but in some cases about substantial losses, to shires that have been promised a little more as a result of the recycling and, in other cases, money that will go to hard-pressed boroughs that, whatever the circumstances, can do with a little extra assistance.
  Mr. Laurie Pavitt: My hon. Friend mentioned my borough, Brent, whose representation I share with the Minister. In spite of the Conservative's efforts to keep down rates at all costs, we were left with large bills. The loss of the £3 million will be disastrous because of the legacy that we received from the previous Conservative administration.
  Mr. Fraser: I am grateful for my hon. Friend's intervention.
  I used the word "overspend" because we are talking about Government assumptions. The word assumptions is important. Clause 1 allows the Secretary of State to make virtually whatever assumptions he may with very little chance of court challenge. We are talking about assumptions such as that the homeless do not need to be housed. This afternoon we heard the assumption by the Secretary of State that it is sufficient for the homeless to be put into hostels and bed and breakfast accommodation. I know of children who have begun to eat insects as a result of their stay in bed and breakfast accommodation. Those are the assumptions about which we talk—assumptions that the cold do not need to be warm, that the jobless do not need to be provided with jobs, or that adult illiterates do not need evening classes where they may be assisted and taught to read. The Government are taking power to make even more assumptions with less likelihood of challenge.
  The Minister said that the Bill has the advantage that it removes uncertainty. First, borough and county treasurers are a lot more cunning, canny and clever than they are given credit for. It may be a byzantine system but
  1018
  they do not find it too difficult to operate and to forecast within it. It does not worry the finance officers or the local officer's authorities that, as a result of the recycling system, they, like the London borough of Brent, may receive an extra £3 million that was not covenanted for. Brent and any other hard-pressed borough do not mind that type of uncertainty.
  If the Minister were running the premium bonds system, he could remove the uncertainty by abolishing the prizes. That is the sort of system that he brings forward. A few boroughs worry about the bonuses that they get from the recycling system. The argument about certainty will not wash with any authorities. According to experience, the Department and the Treasury will be tempted to deflate local authority expenditure again. That is why all sides of the House ought to have misgivings about the Bill.
  Clause 1(3) is highly objectionable. It enables the Secretary of State to discriminate against a single authority. The subsection provides for different assumptions to be made about different authorities. According to the Association of County Councils, that gives the Department the power to victimise an individual local authority. That power does not exist now. I, too, believe that clause 1(3) is obnoxious and I hope that it will be deleted.
  Clause 1(3) also gives the power for the first time to create new descriptions of authorities within existing classes without parliamentary approval. Under clause 1(3) it is perfectly possible to distinguish between inner London and outer London boroughs. That power is expressly preserved by a later provision. Theoretically, it would enable the Secretary of State to discriminate between the north and the south, inner and outer districts of urban areas, hung and unhung local authorities and Conservative and Labour authorities. There is no limit to the discrimination that could be exercised under clause 1(3) and it is highly objectionable.
  Clause 2 is retrospective and validates discrimination between inner and outer London boroughs. Retrospectively, it may validate favouring Bromley at the expense of a borough like Hackney. Because of clause 4(6) of the Local Government Finance Bill, which is in another place, that cannot be legally challenged. I disagree with the Minister's interpretation of the interaction between these two pieces of legislation. I hope that the other place will ensure that the judge-proofing provisions in the Local Government Finance Bill will spill over into this Bill and that it will look again at the removal of the challenge in the courts to past decisions in relation to London local authority expenditure.
  This is a tiny Bill, but small errors can be costly. The amount of money involved is as much as £1 billion The Bill lets the bookie welsh on the punters' funds and then renders him immune from prosecution in the courts. It is a breach of promise to low-spending authorities and a grave disappointment to those that spend more highly, according to their assessment of need. The Bill deeply disturbs local authorities and their associations, of every colour. It results in the massive loss of rate support grant to the Treasury and is a kind of financial three card trick, similar to the trickery of the figures in the housing investment programme. We hope that the House will agree that the Bill ought not to be given a Second Reading.
  4.43 pm
  Mr. John Heddle (Mid-Staffordshire): I begin by declaring an interest that I have not declared before in the House. I failed O-level maths not once, not twice, but three times. I am quite sure that I join many of my hon. Friends, many Opposition Members and most of my constituents when I say that I do not understand the algebraic formula or the mathematical ramifications of local government finance. Although I may be light on technical ability, I hope that I am not so light on common sense.
  In principle, I welcome the Bill. It seeks to streamline an almost incomprehensible system, for the time being, until the party that sits on this side of the Chamber is returned to office at the next general election to enable it thoroughly to overhaul and restructure, on a fairer and a more common-sense basis, the whole system of local government finance.
  This Second Reading debate also affords the House an opportunity to dwell on the reservations that some of the local authority associations have expressed. The hon. Member for Norwood (Mr. Fraser) referred to the reservations of the Association of County Councils. I agree with him about some of those reservations, and I shall dwell on them in a little more detail in a moment.
  The debate also provides us with an opportunity to put under the parliamentary microscope the attitudes, behaviour and antics of certain local authorities—the so-called high spenders and profligate authorities—that this Bill, if it becomes an Act, in the not-too-distant future will stop. It is those authorities—
  Mr. Eric S. Heffer: Which ones?
  Mr. Heddle: I refer to those authorities that are controlled by the hon. Gentleman's party, particularly those in inner London.
  Mr. Heffer: What about Liverpool?—
  Mr. Heddle: Liverpool is quite another matter.
  Mr. Heffer: Exactly. I thank the hon. Gentleman.
  Mr. Heddle: It managed to escape the microscope of the Audit Commission, but it has not escaped the attention of the media, or of industry or commerce. The reason why there is so much unemployment in the hon. Gentleman's constituency and the city of Liverpool is largely the antics of Liverpool city council, high rates and the profligate and wasteful spending of taxpayers' and ratepayers' money.
  Mr. Allan Roberts: Will the hon. Gentleman give way?
  Mr. Heddle: That authority is denying industry and commerce the opportunity to create wealth and therefore to provide jobs for the constituents of the hon. Member for Liverpool, Walton (Mr. Heffer) and also for the constituents of the hon. Member for Bootle (Mr. Roberts), to whom I now give way.
  Mr. Roberts: I am pleased about that, because the hon. Gentleman is under the illusion that I represent a Liverpool constituency. I do not. I represent a Sefton constituency, one of the lowest rated metropolitan districts in the country. It has been Tory-controlled since 1974 when it was established, and it has a 30 per cent. unemployment rate, which is as high as the unemployment rate in the constituency of my hon. Friend the Member for Walton. Is the unemployment rate in my constituency the result of the antics of the Sefton Tory council and of its leader Ron Watson?
  Mr. Heffer rose—
  Mr. Heddle: I shall be happy to give way to the hon. Member for Walton.
  Mr. Heffer: The hon. Gentleman is talking rubbish. In the last three years we have built 3,000 houses in Liverpool and we have taken workers off the dole. The members of my union, the Union of Construction, Allied Trades and Technicians and the Transport and General Workers Union have built those houses. We are building sports centres. We have also built a park in the centre of Liverpool, where there was never a park before. We have not indulged in what may be criticised in other parts of the country as profligate spending. We have been doing a good job for the people of Liverpool. However, the Government withheld the support that Liverpool required to carry out its programme. The responsibility for what has happened in Liverpool has to be laid at the Government's door. The local authority has carried out the programme upon which it was elected. That is not profligacy.
  Mr. Heddle: For the 3,000 new houses that the hon. Gentleman reminded us his union has helped to build, probably 4,000 or 5,000 houses owned by Liverpool city council are lying empty and derelict and attracting vandals and they have been empty for four, five, six, or 12 months or more.
  Mr. Heifer: Those are multi-storey dwellings that ought to have been pulled down years ago.
  Mr. Heddle: If he were allowed by you, Mr. Deputy Speaker, to continue, the hon. Member for Walton, who makes that intervention from a sedentary position, would remind the House that many multi-storey flats in Liverpool and around that once great city have now, in a partnership between the private and the public sectors, been made habitable and suitable for his constituents and others to occupy.
  I shall not dwell further on the problems of Liverpool, but subsequently I shall refer to the problems of the eight inner London authorities that are highlighted in the Audit Commission's recent report. I welcome the Bill because, as my hon. Friend the Minister for Local Government said, it will end uncertainty and instability. It will stop grants from being recycled indiscriminately to the high-spending authorities.
  The hon. Member for Norwood suggested to my hon. Friend the Minister that if he were in charge of the premium bond system he would cancel the prizes. The difference between the premium bond system and the rate support grant system is that the premium bond holder—whoever he or she is—stands an equal chance of winning. Under the rate support grant system, high spenders and irresponsible councils enjoy the prizes. Under the Bill the prudent local authorities—controlled by both major parties in the past, but now controlled more by the Conservative party—are more likely to get the prizes.
  Mr. John Fraser: I understand that there is a genuine difference of opinion between hon. Members as to where the money available for recycling should be recycled. But surely we can have an agreement between Conservative Back Benchers and the Opposition that whatever is

  1021
  available for recycling should go to the local authorities not to the Treasury. If an appropriate amendment to that effect is tabled, will the hon. Gentleman support it?
  Mr. Heddle: I am sorry to disappoint the hon. Gentleman. I agree with the theory that he has just put forward, but I do not agree with the practice. More and more of Liverpool taxpayers' and ratepayers' money has been spent on trying to revitalise Liverpool through derelict land grants and urban development grants, as well as a raft of initiatives introduced by the Government since they were elected in 1979, but, unfortunately, it has not cured the problem. The reason is that the local authorities in Liverpool and on Merseyside have not invested the taxpayers' and ratepayers' money in the most cost-effective and job-creative manner.
  My concern about the system of local government finance is not the amount of money that is in the pool, although I agree with the hon. Member for Norwood that the more money there is in the pool the more likely it is to be invested wisely. Enabling the Treasury to recycle the money through the rate support grant system will not necessarily produce a more cost-effective system. The reason for that has already been given by my hon. Friend the Minister in answer to interventions. The rate support grant settlement for 1987–88 is £1 billion more than last year, a 9 per cent, increase on previous years. For all the local authorities that are not rate-capped that will mean a 5·5 per cent., increase in grants which is some 2·5 per cent, above the prevailing rate of inflation. To answer the hon. Member for Norwood, more money is coming from the Treasury, which is due to the Government's overall management of the economy.
  I shall turn to the points made by the Association of County Councils. The hon. Member for Norwood referred to the ACC's general objection to the Bill. The hon. Gentleman quoted page 2 of a letter that he received from the ACC today:
  "Since the Association does not regard the issue of spending underlying the 1987–88 settlement as adequate, nor have any assurances been received for the future, then the total abolition of block grant recycling must be opposed this time."
  Clearly, there is a difference of opinion between the Government and the ACC as to the adequacy of the money available within the system. As my hon. Friend the Minister said, there is £1 billion more available in the system this year than in previous years.
  The letter from the ACC highlights the association's three other reservations, which no doubt are shared by the other local authority associations. These matters, however, can be dealt with in Committee. The letter says:
  "The Bill as framed would not give a future Secretary of State for the Environment any discretion to re-introduce the operation of flowback without other further primary legislation."
  In the association's view that is unnecessarily restrictive. The letter continues:
  "The Bill makes no provision for the Secretary of State to be required to consult the local authority associations who represent them on various aspects of the proposals."
  In the opinion of the ACC, that omission should be rectified, but that is not a particularly significant point. The association's final point is about the powers granted to the Secretary of State to make different assumptions for the different authorities in clause 1(3).
  The ACC says:
  "This is a change from previous practice whereby any assumption would only be applicable to classes of authority,
  1022
  thereby preventing the victimisation of individual authorities. The Association of County Councils is concerned at the potential for the proposed change to be used for a wider purpose than is presently intended, which is to deal with the issue of rate-cap authorities. It is suggested that a more precise definition could be found rather than the rather wide wording presently proposed".
  I suspect that my hon. Friend the Minister will agree— between the House giving the Bill a Second reading and a Standing Committee being convened—that that matter can be accommodated in Committee within the framework of the Bill.
  The purpose of the Bill is to deny those high-spending and irresponsible authorities which seek, for their own narrow party political advantage—dare I say mongrel dogma—to fly in the face of central Government and try every trick in the creative accountants' book to cause distress to the ratepayers by pursuing narrow party political ends. At this point I believe that my right hon. Friend's proposals are correct. Let us look at the eight inner London authorities that captured the attention of the Audit Commission. Brent is £2·6 million overspent—
  Mr. John Fraser: It would be helpful if the hon. Gentleman would tell us where we can obtain a copy of the report, because I have been unable to obtain one so far.
  Mr. Heddle: No doubt the hon. Gentleman has his own sources—the national press, radio and television. I recall sharing a microphone with the hon. Member for Blackburn (Mr. Straw)— one of the hon. Gentleman's Front-Bench colleagues—on the BBC World Service last Thursday, and he was certainly adequately briefed. The arguments that he put forward to the world at large were not convincing, but he convinced me that he had considerable knowledge of what the Audit Commission's recommendations were.
  Mr. Heffer: I tried on a green form to obtain a copy of the recommendations before the debate so that I would know exactly what was being said, but I did not obtain a copy. That is disgraceful. A document is being quoted, but when we as Members of Parliament tried to obtain a copy we were unsuccessful. In the old days—I do not know whether the Government have had anything to do with this—these documents were made available. Now one has to put a green form in to obtain one, but I still could not get one in time for today's debate. That is a disgrace.
  Mr. Heddle: I shall leave the hon. Member for Liverpool, Walton to discuss the matter with the hon. Member for Blackburn, who clearly has had the opportunity of putting in either a green card, a yellow card or possibly a gold card and has certainly obtained a copy of the Audit Commission's recommendations.
  If recycling were to occur and the Bill were not to be passed by the House, Brent would receive £2·6 million more; Hackney £750,000 more; Haringey £1·6 million more; Islington ?1 million more; Lambeth £1·2 million more; Lewisham ?750,000 more and Southwark £1·12 million more. Let us look at those authorities through the eyes of the Audit Commission. I shall quote what the Audit Commission says about those high-spending authorities that would benefit from recycling. It refers to housing as a "catalogue of despair" and states:
  "voids, staffing and other costs are 70 per cent, higher than might reasonably be expected, and arrears nearly three times good practice levels".
  The Commission states:

  1023
  "none of the authorities appears to be spending per dwelling as much on maintenance as Tower Hamlets, Wandsworth and Westminster"—
  authorities with similar inner-city housing problems. The Audit Commission says that in the eight boroughs
  "the cost of refuse collection was at least 20 per cent, more than it need have been, given local policies and conditions outside the authorities' control".
  The Audit Commission's view on these high-spending authorities was that inefficiency and mismanagement were rife and that these local authorities were trying to fly in the face of the prudence practised by the Government. If the Bill does nothing else but deny those local authorities the opportunity to have the money which should go back to the better benefit of the wider public—the ratepayer and the taxpayer—it should receive the wide support of the House.
  Mr. Michael Hancock: We can all rehearse the arguments about high-spending authorities, but will the hon. Gentleman explain the particular problems with Hampshire, East Sussex, West Sussex, Dorset, Kent and Surrey, which will all suffer? What have they done wrong? They are interested to know what they have done wrong and why they should be punished by the Bill. Will the hon. Gentleman explain how his local authority will benefit from the Bill?
  Mr. Heddle: No doubt the hon. Gentleman will have the opportunity to catch your eye later, Mr. Deputy Speaker, to speak specifically about Hampshire. I served my local government apprenticeship on Kent council and am proud to have done so. The council certainly has not lobbied me. I suspect that none of my hon. Friends who represent Kent constituencies and who are not in the Chamber have a particular gripe about the Bill. There seem to be no problems with Staffordshire, which is controlled by the Labour party. Apart from a rather wild faction in Stoke-on-Trent, which is becoming wilder by the minute, Staffordshire county council manages its affairs not unreasonably because basically it has a good dialogue with my hon. Friends and me, who represent the eight constituencies in the southern and middle part of the area.
  Mr. Pavitt: Will the hon. Gentleman give way?
  Mr. Heddle: The hon. Gentleman has intervened once already. With respect, I should like to conclude to enable other hon. Members to catch your eye, Mr. Deputy Speaker.
  I am particularly attracted to the comments of my right hon. Friend the Secretary of State, who, in July, said:
  "authorities will be able to plan their budgets and rates with much greater assurance. Their grant entitlement will depend solely on their own expenditure decisions. It also means a tougher regime for high spenders. They will continue to lose grant if they overspend, but will not then gain on the roundabouts, by getting recycled grant, part of what they lost on the swings."—[Official Report, 22 July 1986; Vol. 102, c. 182.]
  5.3 pm
  Mr. Alfred Morris: I was glad to see the Secretary of State for the Environment on the Treasury Bench, even as a casual visitor to our debate. He cuts a more than slightly ludicrous figure in trying to masquerade as a friend of good local government. The plain truth is that many of the very best people in local
  1024
  government insist that they are now being forced to choose, not only which of their discretionary powers to use, but even which of their legal duties to fulfil.
  That is now spectacularly true, in an increasing number of localities, of the legal duties imposed by section 2 of the Chronically Sick and Disabled Persons Act 1970, which is about making life better, or at least bearable, for Britain's 5·5 million disabled people. It is an Act, as the House knows, which I piloted to the statute book and, not unnaturally, I take a very close interest in its implementation. By common consent, the Act is not now being applied as the House intended and some of the worst offenders are those in local government on whom the Secretary of State lavishes most praise.
  The right hon. Gentleman is clearly highly pleased at the £500 million that he will be taking from local authorities by ending grant recycling. No doubt he believes that he will be hurting those fantasy monsters which people his nightmares and stalk the pages of much of the press. These so-called ogres of the Left appear very different to the people whom they serve. My purpose in intervening in the debate is to make the Secretary of State listen to those who will really be hurt by his policies. They are not the council leaders, about whom the right hon. Gentleman is so obsessed. They are people with severe disabilities seeking to establish themselves in homes of their own, not least people with mental illness discharged after many years in hospital who find they have nowhere to live.
  I am not sure whether the Secretary of State reads The Guardian, but I hope that at least he read the letters published on 2 February in reply to the complacent article by the Minister for Housing, Urban Affairs and Construction. If not, he should now urgently read the letter from three doctors at King's College hospital, in which they describe how a homeless, mentally ill man of 32 recently developed severe frostbite and had to have both his legs amputated. It is people like that man, among others, for whom I want to speak briefly in this debate.
  The Department of Health and Social Security has been weak enough over the past seven years in fighting for people with disabilities, but it at least knows what is needed. It knows that local authorities are the only bodies that can nationally provide the care that such people need, but at times DHSS Ministers might just as well be sitting on the Back Benches for all the influence they seem to have, either with the Secretary of State or with the Treasury.
  In recent weeks DHSS Ministers have been congratulating themselves on an extra £27 million which they claim to be providing for community care in 1987–88. But what use is £27 million if the Secretary of State then takes back £500 million? How can local authorities possibly provide community care for physically disabled people, for people with mental handicaps or for those suffering from mental illness in these circumstances? How can they, especially in those parts of London that will particularly suffer at the right hon. Gentleman's hands, care for the additional hundreds of people dying of AIDS who want to spend the remainder of their lives in their own homes?
  The hon. Member for Mid-Staffordshire (Mr. Heddle) referred to the Audit Commission. Let me remind the House that on page 34 of its report "Making a Reality of Community Care" the Audit Commission states:

  1025
  "Virtually till authorities that provide social services lose grant if they increase spending in real terms."
  It continues:
  "Hence, the system used to control expenditure can penalise local ratepayers in authorities implementing Government policy and saving money for the NHS into the bargain. Thus in one authority visited that had pioneered community care for mentally handicapped people in accordance with the Government's guidelines, heavy grant losses were being incurred because the authority was exceeding its GRE in part as a result of this policy."
  How does the right hon. Gentleman respond to that penetrating challenge to a policy which is as crackpot as it is self-defeating and inhumane?
  I remind the right hon. Gentleman that last summer, with overwhelming support from both sides of this Chamber, the House passed the Disabled Persons (Services, Consultation and Representation) Act 1986. The new Act placed special emphasis on the problems and needs of severely disabled people leaving institutions. It reached the statute book with the warm blessing of the Government, and the hon. Member for Braintree (Mr. Newton), then the Minister with responsibility for the Disabled, made a clear statement of his intentions on its implementation.
  What has happened? Sections 5 and 6 of the Act were due to be brought into force in October. These are absolutely key sections and the delay may have already affected the futures of disabled young people leaving school or further education well into the 1990s. Yet the discussions between Government Departments and local authorities are still utterly bogged down. That is a deeply serious matter and, in the view of the organisations of and for disabled people, a wholly scandalous failure to give effect to the will of this House.
  I know that the DHSS is not to blame. The blame lies with the right hon. Gentleman and the Treasury. Local authorities, quite rightly, are not prepared to start implementing the 1986 Act if they know that, if they spend the modest amounts required, they will be clobbered by the right hon. Gentleman. The amounts needed to implement sections 5 and 6 of the Act are a tiny proportion of the £500 million which the right hon. Gentleman is seeking to take from local authorities by ending grant recycling. Indeed, estimates for the implementation of the 1986 Act as a whole amount to only one fifth of that figure.
  Ministers must be made to reflect on the fact that their policy of clobbering the long-term sick and disabled is a minority policy even within their own party. I urge all those many right hon. and hon. Members on the Government Benches who gave their full support to the Disabled Persons (Services, Consultation and Representation) Act 1986 last year to join me in indicating to the Secretary of State for the Environment their determination that the Government must keep to the schedule for its implementation outlined by the present Minister for Health.
  If the 1970 Act, supplemented and strengthened as it is by the 1986 Act, is to be applied in the way intended by the House, we need an urgent change in the Government's whole approach to local government finance. They have very badly let down not only social services authorities but disabled people and their families. In place of the gobbledegook with which Environment Ministers now weary the House week by week, I call for a clear and
  1026
  explicit statement that the Government will provide the resources needed for the full and humane implementation of the two Acts.
  5.12 pm
  Mr. Robert Banks: The right hon. Member for Manchester, Wythenshawe (Mr. Morris) has spoken on a subject which is very close to his heart with all the authority that he commands in the House on this subject. I hope he will forgive me if I do not follow him specifically on the important points that he has raised this evening.
  I was interested to hear the speech of the hon. Member for Norwood (Mr. Fraser) and his reference to his bewilderment over the terminology of the Bill. I share that bewilderment. Unlike my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle), I did manage to get an O-level in maths, but when it comes to working out the intricacies of the rate support grant I do not think that I am any better off than he is.
  I was interested when I picked up the Bill to try to determine what it was about, and I must say that I found it extremely difficult. Nevertheless, I turned to the explanatory and financial memorandum—
  Mr. Heffer: I have heard the argument used that it is byzantine theology, but it is much worse than that, because byzantine theology is very clear: first, they did not accept the Pope and, secondly, they believed that Mary the Mother of God ought to be worshipped as well as Christ himself. This is much worse than that.
  Mr. Banks: I take the point to heart. I was only going to say that looking at the intricacies of the Bill and the rate support grant is rather like taking the back off a computer and looking at its internal workings— which is rather different from the analogy drawn by the hon. Member for Liverpool, Walton (Mr. Heffer).
  Turning to the explanatory and financial memorandum, my eye fell on these words:
  "the Secretary of State determines fresh principles".
  I thought it was rather interesting that the word "fresh" was used, and I could not help but wonder what had happened to the stale principles.
  According to the memorandum, clause 2 clarifies the words "the appropriate class', but on turning to clause 2 I found myself in a greater fog than ever before. However, the good part about the Bill is that it has a long title, which gives it wide scope, and I want to raise certain points in the debate, as well as refer to amendments which I hope to table at a later date.
  There is nothing more difficult than the formulae used for calculating the rate support grant. The stage must have been reached where we shall have to look seriously at the whole system and consider wiping the slate clean and starting again. It has become so incredibly complicated that I cannot but believe that it must require an enormous army of staff to make the interpretations that are necessary to arrive at the grant.
  Having been through all this machinery to arrive at an amount for my own constituency borough council, Harrogate, the result is a round figure of £2·5 million. If it had come up with a figure of £2,491,000·50 I might have believed that there was something in the calculations and precision in taking account of all the various elements in that calculation. It amazes me that one ends up with a round figure.

  1027
  I welcome the benefit that we in Harrogate have derived from the recycling mechanism and the additional grant due to the late change to the grant limitation arrangements. This has been a great help to us. I am sure that removing the safety netting or the capping multipliers would seriously affect the grant arrangement as it affects Harrogate borough council. Without the multiplier, the council's block grant in 1987–88 would be just over £0·75 million, and that would be £1·9 million short of the grant that has been allocated. It is therefore essential, from the point of view of the ratepayers in my constituency, to maintain the present level of protection. I seek the Minister's assurance tonight that there are no plans to make alterations to the safety netting and the capping multiplier system.
  Turning now to one or two elements in the calculations used for the rate support grant, I take by way of example density. The density factor is one of the many factors which have to be taken into account. In Harrogate the ward-weighted density is 13·7 persons per hectare, compared with a simple across-the-board density of 1·1 persons per hectare over the whole area. This compares with York—which of course is a relatively dense area—with a ward-weighted density of 37·5 compared with 34·8 persons per hectare on the simple across-the-board density calculation. Any change from the ward to the simple calculation would be of enormous harm to Harrogate borough council and I seek the assurance of my hon. Friend the Minister that there are no plans to make any changes of that sort.
  Apart from Harrogate, Knaresborough and Ripon, the areas in the surrounding district are essentially rural, and this is a factor in the sparsity element that must also be taken into account. The North Yorkshire county council is most grateful to my hon. Friend the Minister for the help that he has given to determine a sparsity factor that will take account of the education needs of the county. He deserves full recognition for that.
  There are areas which specialise in bringing in visitors such as holidaymakers, conference visitors and tourists. This practice is growing enormously, and rightly so. There are many jobs to be created from the development of tourist projects and this development is more important in Yorkshire and the north of England generally than in other parts of the United Kingdom.
  The figures that are used in the rate support grant take account of day visitors. The correct terminology, which I find curious, is "daytime net inflow", which is the number of people who come to an area during the day. There is reference also to "visitor nights", which means the number of visitors who stay overnight. These designations involve separate calculations and there is scope to rationalise the measurement that is based on the long-distance travel survey that was carried out as long ago as the 1970s.
  The crux of the problem for Harrogate and other towns, such as Brighton, Bournemouth, Bristol and Scarborough, which are noted conference towns, lies in taking into account the importance and drawing effect that they have in bringing in visitors from other parts of the country.
  Work on the construction of the Harrogate conference centre commenced in the 1970s during the period of hyper inflation. Delays, construction problems and other factors that are still the subject of a study and report contributed
  1028
  to a colossal escalation in cost from an initial £7 million to £8 million base to an outfall of £31 million. As the House will understand, the cost of the centre bears heavily on the backs of the ratepayers in the district. It should be recognised, however, that the centre has established a northern venue of exceptional quality and attraction that caters for conferences of national and international importance. A large and important international medical conference is to be held there and my town will be hosting the Liberal party conference in September. I hope that the tills will be ringing throughout Harrogate while that conference sits.
  The problem for Harrogate has been how to alleviate the burden of debt charges on a considerable construction cost. We are grateful to the Government for enabling the borough to extend the borrowing period. That was achieved some years ago. The methodology of calculating grant-related expenditure does not reflect the revenue expenditure for servicing the loan or operating the centre. It is certain, however, that the conference centre is a magnet for Yorkshire and the north, and the benefits to those in the transport business and in other businesses far and wide are without question. The centre has already seen bookings increase by 4 per cent, for 1987, which will increase the occupancy rate to 69 per cent. The rate for the exhibition halls is running at 90 per cent. The council will be issuing tender documents shortly, following the move to put out the catering section to private operation.
  It has been set out in the rate support grant consultation paper that airports' debt charges are to be used in the coming financial year in the grant-related expenditure calculation, to the benefit of about 30 local authorities. My right hon. Friend the Secretary of State has accepted the recommendation that I have just outlined, and others include the substitution of air frost for grass frost in the assessment of grant-related expenditure for highway winter maintenance. That is a good illustration of how detailed and complex the formula has become for arranging for a block grant to be given to a local authority.
  I ask my right hon. Friend the Secretary of State to include the debt charges on conference centres in the category into which airport debt charges come. That would benefit Harrogate, Brighton, Bristol and other towns that are faced with the problem of bringing in people from far and wide and contributing to a large extent to the prosperity of an area that is larger than that of the town itself. I ask my right hon. and hon. Friends to give consideration to my request. I shall be seeking in Committee to table an amendment on this issue so that the Committee will have an opportunity to debate the matter fully.
  Nothing is more important than using the RSG to give support to authorities, especially those in Yorkshire and the north of England generally, which through environmental schemes and other projects, are making their areas attractive to visitors and giving support to tourism projects which are sponsored by private enterprise or developed in partnership with it. I would far rather see the mechanism used to give support to towns in the north of England, especially those that have high unemployment, than give grants to try to cajole businesses to come to certain areas. If individual areas are made more attractive, they will attract visitors and become more attractive to those who decide about the placing of industries. Greater

  1029
  attractiveness will encourage those from outside to live and settle in the areas that I am talking about and that will be accompanied by the creation of new business enterprise.
  I ask my right hon. and hon. Friends again specifically to consider introducing into the formula the debt charges that are carried by authorities which have provided the service of a conference centre. I hope that my right hon. Friend will look favourably upon my request.
  5.29 pm
  Mr. Michael Hancock: First, I must declare an interest. I am a member of Hampshire county council and Portsmouth city council and I shall be involved in the implementation of the Bill once it is enacted.
  If I were a cynical person, I would suggest that the Secretary of State's absence from the Chamber is because he has started already to formulate the amendments and new clauses that he will be introducing in Committee. If previous experience is to be taken into account, we might end up with a Bill that is considerably longer than the measure that is before us. It may not resemble the one that we are discussing now. Perhaps the right hon. Gentleman's absence is explained by his attempts already to refine the amendments that will be put before us when we consider the Bill in Committee.
  It is clear that we are witnessing yet another attack on local authorities and their ability to cope with their problems. The Government have introduced legislation that will supposedly improve local democracy, but I suggest that it will do the opposite. Once again, the legislation will seriously undermine the ability of local authorities to respond properly to the needs of their communities.
  I accept that the recycling system produces uncertainties for local authorities. Indeed, when the statement about this legislation was made last year, my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) said that we were prepared to support it but that we had strong reservations about the way in which it would be implemented. Now that we have the Bill before us our worst fears have been realised. We have grave reservations about the way in which the Bill will operate. I suggest that the only sensible course of action for hon. Members who care about local authorities is to resist the easy temptation to vote for the Second Reading. I know that we shall vote against it.
  Mr. Squire: What, all of you?
  Mr. Hancock: My hon. Friends will rush back from where their endeavours have taken them and we shall all vote in the same Lobby.
  The proposed change is something akin to what the hon. Member for Norwood (Mr. Fraser) suggested, when he compared it to taking the prize away from a premium bond holder. I would go further: it is like taking the right of appeal from a condemned man. It certainly removes any uncertainty, but it will not encourage local authorities to believe that they will benefit. Conservative Members have not been able to justify what will happen to many local authorities that will lose out. Many Conservative Members know from experience that their local authorities will suffer. They will not have the expenditure necessary to serve their areas.
  The Government are now deliberately endeavouring to embark on a process of underestimating the expenditure
  1030
  assumptions of local authorities. In that way the Treasury can get the money back from the local authorities. The Government are making the task of the local authorities harder. The Government are deliberately underestimating what it takes to run an authority and the only body that will benefit will be the Treasury.
  Even if one gives the Government the benefit of every possible doubt, it is suggested that the Exchequer will be some £400 million better off as a result of the legislation. Local authorities will find it more difficult to decide their priorities. The irony is that most local authorities will lose grant and, as a result, the Government will have more money available for tax cuts. It is suggested that the £400 million will be used to bail out the Government's promise of tax reductions. Once again, cynical hon. Members would suggest that there is a degree of logic behind that argument.
  The Government have made it clear that not only the high spenders will be affected—most local authorities have benefited from the flowback in the current financial year. Figures produced by the Department suggest that over 500 local authorities have benefited. Therefore, those 500 local authorities, as well as the high spenders, will also suffer. Hampshire is a big spender and will suffer considerably. However, over the past seven years, it followed to the letter Government instructions concerning changes to local government finance. Other local authorities such as West Sussex, Dorset, Kent and Surrey will also be losers under the proposed changes. I do not care that the hon. Members who represent those authorities are not here today, but I am damn sure that the people who live in their constituencies will be concerned that they are not here to defend their ability to use the services of their local authorities.
  Mr. Squire: I believe that the hon. Gentleman is rather overdoing it. Let me give him a simple analogy. If we follow through the hon. Gentleman's principle, will his party give all Government Departments—whether they have spent above budget, below budget or on budget—extra sums of money each February simply because it is February and it is a nice thing to do?
  Mr. Hancock: The hon. Gentleman is making a rather silly point. We would make sure that local government expenditure took care of the specific needs of the areas. That expenditure would not be conceived in Marsham street or some other Government Department. It would take into account the proper needs of the community.
  The right hon. Member for Manchester, Wythenshawe (Mr. Morris) has already discussed the problems facing the disabled. The Government must be embarrassed that many local authorities cannot fulfil their commitments to the disabled in their areas. That cannot be something of which Ministers are proud. I am sure that Conservative Members must be squirming in their seats at the embarrassment to which they and their colleagues in local government have been exposed.
  The Association of Metropolitan Authorities has doubts about the necessity for the Bill. It believes that the Bill is necessary to abolish the present system but it focuses attention on the new powers that the Secretary of State is trying to slip in on the Bill's coat tails. The AMA recognises the need for change, but it also recognises the true problem contained in the Bill—the extra powers given to the Secretary of State and their potential effect on local authorities.

  1031
  The Trojan horse in the Bill is clause 1(3). It allows the Secretary of State not only to victimise one or more local authority if he does not happen to like its political colour but, alternatively, it allows him to favour individual local authorities if he chooses. We should be concerned about that. The Secretary of State can not only screw down the high spenders but, if it suited him for political purposes, encourage some local authority by giving it more assistance. That takes away any fairness—if that is the right word—in the operation of the system. It affects the way in which the Secretary of State responds to the needs of local government as a whole.
  Undoubtedly, that is something that will worry hon. Members and will occupy many hours in Committee. If it is the Government's intention to create a new class of authority—specifically identified as education authorities or rate-capped authorities—that intention should be clearly stated. That should be spelt out and, at the very least, the House should have the opportunity to scrutinise any new expenditure assumption made in subsection (3).
  The Minister represents a constituency in the same county as myself, and the county treasurer of Hampshire has described the Bill as being
  "a very severe and unfair mechanism for restraining individual local authority spending."
  I do not suggest that Mr. Scotford is anything but a first-class officer who respects the rule of law and the rights of government. However, the fact that he described the effects in such a manner must surely strike a chord in the democratic heart that beats somewhere on the Government Benches. It is not right that a county treasurer should have such an opinion of a Bill of this nature.
  I hope that when the Minister replies he will recognise that the proposals in the Bill will mean that the county will lose not £17 million as originally quoted but close on £20 million. Absorbing that sort of loss will mean enormous difficulties. As I said recently—and I had an absurd reply from the Secretary of State—the whole of the planning and transportation department of Hampshire county council would cease to operate. If we tried to share the burden, libraries would be closed, firemen would be ill equipped and there would be fewer poliemen and police cars to patrol the streets to try to curtail the enormous growth in crime that Hampshire has suffered during the past few years. It would mean fewer home helps and a reduction of the ability of the social services to provide adequate and proper care. Hampshire has the second ' highest number of children in care of any local authority, and the legislation will diminish Hampshire's ability to cope with the problems.
  We must carefully study the Bill because it is not good enough. We hope that the Minister will recognise that, sooner or later, the crumbling edifice that has been created during the past seven years—the farcical way in which local government finance is administered—will come tumbling down around us. I am sure that local authorities will welcome the day when they have total control over their income and over their ability to spend it. However, the only way in which that can be achieved is by introducing a system of local income tax, although I do not mean a system similar to that proposed for Scotland, where the poll tax will further diminish the money-raising powers of local authorities.
  1032
  The rating system is obviously incapable of providing genuine local democracy. We must free local government from centralisation. We must try to give it the impetus it needs to move properly with the times. This Bill will do none of that. In fact, it will make matters worse.
  If we are not to paint a very sad picture of the future of our cities, we must heed the report in The Guardian on 30 January entitled
  "Ridley rules out rescuing eight Labour councils from £300 million spending gulf."
  The final paragraph of the article reports one chief executive of the authorities affected as saying:
  "To argue that without improvements to local government inner London is only a few years behind Harlem and the Bronx is, to be kind, imaginative."
  If the Government proceed along their present route—and last week's and today's legislation will undoubtedly lead them along that route—inner London will be on a par not only with Harlem and the Bronx but with many other areas in Britain, and not only those confined to the inner cities. Rural areas will suffer real deprivation because all counties and all councils will suffer. No one in his right mind should welcome this Bill.
  5.43 pm
  Mr. Robin Squire: With the exception of one or two comments on inner cities, I could not find very much in the speech of the hon. Member for Portsmouth, South (Mr. Hancock) with which I could readily agree.
  I welcome the legislation, which I regard as a natural consequence of the present system. I apologise to the hon. Member for Norwood (Mr. Fraser) for not having been in the Chamber to hear his speech, but I can assure him that I shall read it.
  My right hon. and hon. Friends on the Treasury Bench will be aware that I have had the odd disagreement with the Government about the present system. Since I came to the House seven years ago, I have consistently said that we should move towards a system that dramatically reduces the amounts that are dictated from the centre and gives local authorities a more dynamic and widespread source of funding. However, I am aware that the House would not wish me to go into great detail about that today.
  In the context of the present system, the central proposal in this legislation makes a great deal of sense. After all, primarily we are talking about certainty and good housekeeping. I remember that only a few years ago, when the Local Government Act 1982 was passing through the House, the Government attempted to include a provision that would allow them to change the rules during the year. The provision was known as the mid-term holdback, and it would have allowed the Government to go to local authorities half, two thirds or three quarters of the way through the year and take back some of the money that they had said they would give.
  That provision was opposed by a number of Conservative Members and by the Opposition, and, for a variety of reasons, it did not happen. Certainly, the principle that guided my opposition to that provision was the same principle as we face today, except that it is the other way around. We are now considering a system—I have endeavoured to get this point across without much success, especially with the hon. Member for Portsmouth, South—under which local authorities, whether they are good or bad, high spenders, medium spenders or low spenders, have fixed their budgets at the beginning of the

  1033
  financial year. They assess their likely income and likely expenditure, taking into account the level of Government support. Then, guess what happens. As if by magic the seventh cavalry comes to the rescue of many authorities and provides more funding. It does not matter whether they "deserve" it—I put the word in inverted commas because there are sensitive souls in the House—it is simply a consequence of the system.
  I do not think that, stripped of party-political labels, hon. Members honestly think that that is an intelligent way to budget. It certainly does not impose proper disciplines on local authorities. I am a great defender of local government, and I do not think that even my worst enemies would deny that. I have great faith in the ability of local councils to run their affairs effectively. Given a fixed budget at the beginning of the year, I believe that they can deliver an outturn roughly on the level of budget fixed. It does not in any way encourage a sensible budget-making process to have the present adjustments.
  The Association of County Councils—a body to which I listen carefully—spoke, understandably in this context, of the money being lost to the local authorities' pool. I understand what the association means, but to agree with that interpretation would imply that local authorities were acting in concert and that the direct consequence of each of their separate decisions should therefore be retained within local authorities. It is my experience and, I suggest, that of every hon. Member, that local authorities manifestly do not act in concert. Even if we ignored different authorities under different party control and simply considered those under similar party control, we could produce an intersting list of councils that did everything except act in concert. It is, at best, a theory to view the issue as one of some local authority pool being lost.
  Linked with good housekeeping is testing the efficiency of local authorities. I believe that many, if not most, local authorities are more efficient than several branches of Government. I have said that before and I shall say it again. As the recent Audit Commission report makes clear—the hon. Member for Liverpool, Walton (Mr. Heffer) referred to this earlier—the level of inefficiency in some authorities is quite appalling. My hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) went into this matter in some detail, and I do not propose to follow him line by line. I simply wish to highlight two or three brief points arising from the report because it goes to the heart of the whole question of efficiency.
  The report demonstrated that the eight London Labour authorities that it named have twice as many staff in post per thousand population as the most deprived metropolitan districts outside London. The implication is that inner London in particular knows deprivation and the cost that that undoubtedly brings. However, there are many areas of high deprivation, but administratively speaking, those areas are spending at twice the level. That is frightening. Secondly, it was discovered that there was a gap of 100 per cent, between expenditure per head in inner London and the most deprived authorities outside the capital.
  It is not a question of Socialism. I am the first to go to battle for or against specific policies. I am sure that many Opposition Members would be the first to recognise in their heart of hearts that we are talking about inefficiency and that inefficiency is doing a disservice to the Labour party rather than to the Conservative party.
  1034
  There are further implications which worry me still more. Many authorities find it difficult to recruit senior staff-those who earn over £25,000 a year. That is a substantial sum. The figures in the Audit Commission report show that, despite the problems of unemployment and all the other difficulties about which we regularly read, those authorities find it enormously difficult to attract qualified senior staff. One consequence may be that some senior and responsible staff appointed may have less ability than we would wish, and, of course, they are prey to the suspicion that they are appointed as much on party political considerations as on ability.
  That is always a fear, but it is more of a fear when candidates have to be chosen from among one or two dozen rather than from 100 or 200. I am talking about incompetence rather than about any high-flown Socialist, or even Conservative, theory.
  This is a short, but I believe important, Bill. I should be grateful if my hon. Friend the Minister would answer the query raised by the Association of Metropolitan Authorities about the possible interpretation of clause 1(1)(b). The AMA charmingly stresses that the theory could be either malign or benign and, for reasons that will come as no surprise to any hon. Member in the Chamber, the AMA is more naturally concerned about a malign interpretation.
  The AMA says that the clause
  "allows for differential close-ending of grant entitlements. In other words the Secretary of State may make assumptions on different bases about the spending of individual authorities and therefore potentially drastically alter the block grant entitlements of local authorities, for instance penalising those who do not spend in line with his expenditure assumptions."
  It is possible that the AMA is chasing a false hare. Indeed, the words I have quoted were sufficiently surrounded by "ifs" and "ands". However, I hope that my hon. Friend will deal with that matter in his reply.
  I do not foresee any major problems with the Bill. Some people say that the Bill will lead to a loss of grant, but I assume that the real argument is that more grant should be given to local authorities under the initial settlement. That is a perfectly valid view. I might find myself manning a similar barricade in many other instances. But the time to make that view known is when the initial allocations are made. The present system, which is a somewhat accidental top up, has little to commend it and it owes nothing to any sort of discipline. When the system is changed by the Bill I am sure that it will be more efficient and effective.
  5.55 pm
  Mr. Allan Roberts: I am most disappointed with the speech of the hon. Member for Hornchurch (Mr. Squire), especially as, claiming to be a supporter of local government, he has been my co-conspirator in a number of private Bills to open up local government in terms of access and freedom of information. We want to make everything open and free, except for private meetings to discuss the Bills which we are introducing.
  For one who claims to oppose dictation by central Government to local government, the hon. Gentleman made a very strange speech. Indeed, it was a very strange speech for a supporter of local government, damning with faint praise, assenting with civil leer, and—seemingly—without sneering, teaching the rest to sneer. The hon. Gentleman is obviously a supporter of Tory local government rather than local government as a matter of principle.

  1035
  The Bill continues a long line of pieces of legislation that the Government have introduced to take more power to the centre and to take away freedom and rights from local democracy. This is the 42nd or 43rd piece of local government legislation, or legislation directly affecting local government, in England, Wales and Scotland since 1979. It is the 16th Bill dealing with local government finance. The Bill is
  "designed to remove this uncertainty by making further provision for calculating the block grant payable."
  The Rate Support Grant Bill 1986, now in the other place, is
  "An Act to validate certain block grant determinations already approved by the House of Commons; and to clarify and amend the law relating to rate support grants."
  The Local Government Act 1986 is
  "An Act to require rating authorities to set a rate on or before 1st April; to prohibit political publicity and otherwise restrain local authority publicity."
  The Local Government Act 1985 is
  "An Act to abolish the Greater London Council and the metropolitan county councils; to transfer their functions to the local authorities in their areas and, in some cases, to other bodies."
  The Local Government (Interim Provisions) Act 1984 is
  "An Act to make provision for the composition of the Greater London Council and the metropolitan county councils pending a decision by Parliament on their continued existence."
  The Rates Act 1984 is
  "An Act to enable the Secretary of State to limit the rates made and precepts issued by local authorities."
  The Local Government (Miscellaneous Provisions) Act 1982 is
  "An Act to make amendments for England and Wales of provisions of that part of the law relating to local authorities or highways which is commonly amended by local Acts."
  The Local Government Finance Act 1982 is
  "An Act to abolish supplementary rates and supplementary precepts; to require rates and precepts to be made or issued for complete financial years".
  I have quoted from the long titles of only a few of the Acts introduced by this Government. It all started with the Local Government, Planning and Land Act 1980, which had the audacity to call itself—and this is how it still reads—
  "An Act to relax controls over local and certain other authorities".
  Since that Act we have had a plethora of legislation designed to interfere with the freedom of local government, destroy local democracy and concentrate power not here in Westminster, but in Whitehall, in the Department of the Environment. Under that legislation—and this Bill is no exception—Ministers may take powers unto themselves to penalise one authority and help another at their discretion and by means of their own determinations. If precedent is anything to go by, the decisions have been political, taken by Ministers, to penalise Labour authorities and, supposedly, to help Conservative authorities. Recently, however, even the promises made to Conservative authorities have begun to be broken.
  Conservative Members may be surprised to learn that the Bill is not an attack on the so-called loony Left or the Liverpools of this world. It penalises the so-called "underspenders"; it penalises the whole of local government. It will take at least £500 million away from local government.
  1036
  Conservative Members are concerned that when grant is withdrawn from local authorities that the Government say have overspent, the money is generally redistributed so that every local authority benefits, including those so-called overspenders. So why do we not have before us a Bill to fulfil the promises of previous Tory Secretaries of State to redistribute the grant that is clawed back to the underspenders-to the so-called prudent authorities?
  Ron Watson, the then leader of Sefton council, which was Conservative-controlled until last May—it is now hung or, as the Liberals would say, "balanced"—justified his council's support for the rate-capping legislation and for the plethora of legislation increasing central Government's control over local authorities on the ground that under such legislation authorities such as Manchester, which spent a lot of money, would lose grant, while authorities such as his, which wielded the axe with enthusiasm and did everything that the Government asked it to do to cut services and keep the rates down, would benefit in terms of rate support grant.
  After many years of Tory control, Sefton is now to lose a significant sum under last year's budget, determined by the Tories, and this year's budget, which will be determined by a hung council. If we assume a 3 per cent, expenditure over the Government's target, Sefton will lose £1·121 million in the next financial year. If it spends 5 per cent, over the Government's target, it will lose £1·869 million. Like the whole of Merseyside, Sefton will suffer, too, from the clawback of grant from the Merseyside police, fire and transport services, which are to lose £4·103 million, £725,000 and £4·391 million respectively. That money will not be redistributed to anyone and it is in addition to the £6 million that has already been taken away from the Merseyside police force in the rate support grant settlement to be given to the shire counties. We are talking about an area with a massive crime wave, which needs all the money that it can get for policing facilities.
  That shows the nature and scale of the impositions that the Bill, by ending recycling, will make on hard-hit areas with high unemployment. It will affect not only Labour Liverpool but what was until recently Tory Sefton-one of the lowest rated metropolitan districts in the country, and an authority of what I would describe as the loony Right. Such authorities close schools for the handicapped and learner swimming pools, while at the same time they spend money on fairy lights for Lord street in Southport and provide grants for statues of Red Rum. Those were the loony Right-wing priorities of Sefton, which cut social services, education and other services.
  Sefton's reward for making the people in the area suffer and for keeping the rates down is not to be extra grant but an end to grant recycling and the loss of even more grant. In 1980–81 Sefton received £50·237 million in rate support grant; in 1981–82, £47 million; in 1982–83, £45 million; in 1983–84, £45 million; in 1984–85, £43 million; and in 1985–86, £44 million. It is with those massive cuts that this Government have rewarded Conservative-controlled local authorities for cutting services and keeping down the rates. It seems that Sefton's final rate support grant figure for 1986–87 will be only £45·78 million. The budget, introduced by the outgoing Tory administration, meant a massive rate increase of 19 per cent., as well as cuts in service.
  I am pleased to say that the change in grant recycling arrangements will not hit the proposals of the Labour group on Sefton council, which are to be put forward for

  1037
  consideration at the next budget meeting. For the first time ever, we have a growth budget—the kind of budget of which any sane, sensible, responsible local authority could be proud. Now that we have got rid of overall Tory control in Sefton, things are looking up. The Labour group proposes an extra £3 million revenue which will allow for the creation of 125 genuine jobs for teachers, home helps, nursery nurses and others in various departments.
  The proposed Labour budget earmarks £1·7 million for improvements in education, such as an increased pupil-teacher ratio, repairs and maintenance to the borough's schools, which are neglected and dilapidated, £100,000 for the new GCSE examination and £50,000 for additional discretionary awards. It is scandalous that young students with places in colleges of higher education—students from Liverpool and Manchester or one of the other areas with criticised so-called Left-wing councils—got the grant, but students from Tory-controlled Sefton did not get one and therefore could not go to an institution of higher education.
  We are proposing to put that right by providing an extra £50,000 for discretionary awards, a further £20,000 for postgraduate awards, £30,000 for school swimming programmes and £100,000 for the borough's youth service, which is essential in an area of high youth unemployment. The social services will get £750,000, including £40,000 for aids and adaptations for the disabled.
  Sefton was the kind of local authority that my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) mentioned. It did not break the rate-capping legislation but it broke the statutory legislation—the Chronically Sick and Disabled Persons Act—by having illegal waiting lists and not providing the necessary services and facilities for the disabled.
  We shall also allocate £115,000 to works for the elderly and the mentally infirm. If that is what is meant by the Loony Left, I plead guilty. If the budget proposals and improvements in services in my area and in Southport and Crosby are the kind of thing that Conservative Members want to condemn, I am happy for them to do so and to put their views to the electorate, because all these so-called Left-wing Labour councils have been returned to power over the past few years.
  I congratulate Councillor Benton, leader of Sefton's Labour group, on his marvellous statement that Labour's budget, if adopted, would bring good news to the borough's council tenants.
  "We don't propose any rent increase for tenants for this year",
  he said, but an increase in repairs and maintenance as a result of the profits which the Tories have made on the housing revenue account, which will not be given back to the tenants in the form of no rent increase and improved repairs and maintenance. He continued:
  "It is the first time for a number of years that we have been in a position to show any growth within Sefton services and we welcome this. We can't in one year restore all the damage done by cuts since 1979, but this will indicate our gradual progression in the present political climate".
  That is a major achievement, given that the Government are still cutting grant and are taking away up to £3 million that Sefton would have received next year if recycling had remained and this Bill had not been introduced.
  This is a tawdry little Bill. It will pinch at least £400 million from local government. The money is not being taken from Left-wing councils or from overspending councils—I use the Government's term, although I do
  1038
  not believe that they are overspending. Those councils are trying desperately to meet the needs of their areas and to provide the services that are demanded by a higher percentage of one-parent families, greater poverty, more children on free school meals, deprivation and unemployment.
  The Government are taking money not only from those who are fighting to provide services but from the whole of local government, including those so-called underspenders that successive Conservative Secretaries of State for the Environment have promised to help. The Government are stealing the money by the back door and giving it to the Treasury so that the Treasury can use it, with other money that it is stealing, for tax cuts in the Budget in preparation for a probable early general election. That is what the Bill is about. It is a scandalous little Bill and it should be rejected.
  6.9 pm
  Mr. Bill Michie (Sheffield, Heeley): I follow my right hon. and hon. Friends in condemning the Bill. It is another blow against local authority democracy. Clause 1 gives the Secretary of State broad discretion on several issues. For example, he may determine the principles for calculating grant-related poundages for the rate support grant report, and any supplementary report, on any basis. He may also make assumptions on any basis about the total expenditure of local authorities. He does not need to match claims for grants from local authorities with the originally determined total of block grant available. He may make wholly different assumptions about the position of individual local authorities.
  I recall the Minister's opening remarks when he said that if local authorities spend less they will get more Government money. That might sound reasonable, although it does not make sense for local authorities that are not unreasonable in their spending, but fulfil their obligations, not only to the electorate, but in the provision of services. It is totally unrealistic to say that if an authority spends less money now it will be rewarded later.
  I accept that there must be more clarity and certainty, but I do not believe that the Bill will fulfil that obligation either. We should consider the needs of different areas in the country, and the obligations that they place on the appropriate authorities.
  It has been said that the Bill is a microscope to consider whether local authorities are efficient, or overspend and are irresponsible. I do not mind a microscope being placed on local authorities, but I should prefer it to cover not just the financial situation but the services and needs of those areas. That is not being done.
  The provision of accommodation for the elderly and for social care services is being ignored. The ever-growing pressure of educational needs, especially in inner city areas, and the problems of inner-city deprivation and massive unemployment in areas such as Sheffield are also being ignored. There is also the problem of trying to keep up the morale of people who feel that they are under constant and increasing attack from a Government who do not understand their needs or the pressures on them.
  On Monday, I was privileged to be present when Sheffield city council opened a new job project to create as many job opportunities and training facilities as possible within the limitations that have been imposed. It is a good scheme that looks to the future, and looks after the young by giving them something to hope for. However,

  1039
  because of the massive financial restrictions that have been placed upon the council by the Government, the project will not be as successful as it could be.
  Mr. Martin Flannery: My hon. Friend has referred to our city of Sheffield and to the cuts that we have sustained. There have been attacks on the south Yorkshire transport system, and there is massive unemployment. At 4 o'clock this afternoon, I learned that 600 redundancies had just been declared in the large Stockbridge steel works in my constituency. We have to contend with that sort of thing from the Government, in addition to their policy of cuts, cuts and more cuts in every direction.
  Mr. Michie: I understand what my hon. Friend has said. He has given another example of the tragedy that we are facing. However, there is no way in which the city council can respond because of the continuing restrictions. The problems do not go away, but are with us all the time. The fact that the council cannot react to them because of the lack of finance does not mean that the problem suddenly disappears. It means that, through no fault of their own, ordinary people cannot get the help that would normally be provided by the city council, if all things were fair and equal.
  Sheffield is a rate-capped authority, but the fact that it has no recycling money will also affect the Sheffield area in the long term. Last week, a headline in my local paper read, "Residents weep as home closes." The article tells the story of a home that would have been all right had some work been done on it, but it was discovered that the electrics were all wrong. The city council's finances are now so restrained that there is absolutely no way that it can improve such homes to the necessary standards. The old people can be removed from the home that they obviously love and fitted in elsewhere, but the net effect is that other people who need that sort of accommodation will have to stay at home and perhaps be looked after by loved ones. Others may be totally neglected, unless much better financial provision is made.
  The services that Sheffield has provided over many years are still needed, but the buildings and services have to change. The longer those buildings are used, the more they cost and the more they will have to be changed to be brought up to modern standards. That work cannot now be done because of the restraints placed on the council. We cannot update the services that have been carried out for between 20 and 50 years.
  The Government appear to have taken a microscope to local government but have ignored, or have chosen to ignore-perhaps they do not really understand-those problems.
  The Government cannot tell the world to stand still while local authority expenditure is restrained. Although we have had meetings with the Ministers and, I believe, proved our case, the reaction has always been the same.
  Some activities that have been carried out by Sheffield city council have been done at the request of central Government, but I do not believe that the council will be able to fulfil them in the future. The Government discuss the efficiency of city councils and local authorities, but we have spelt out to them many times the fact that even the district auditor has commended the city council on its effectiveness and on the value for money that it has been
  1040
  able to achieve in the services that it provides. The attacks have not been made just to save the ratepayers or taxpayers money. There has been a political attack on local authorities. It is an attack on the services that have been provided by caring authorities, and an attack on the services that our citizens require and demand. The Government seem to have taken a tremendous dislike to the caring image that is presented by many local authorities.
  I wish to refer to the problem of providing services and especially accommodation for the elderly. This is a catch 22 situation. We all agree with the regulations that place certain standards of care on local authorities. How can a local authority respond to the regulations that have been placed upon it by central Government if the financial restraints are becoming more severe with each year that passes? How can a local authority look after the people that it has to remove from institutions because of a lack of maintenance money or general revenue? What will happen to those who are still waiting to receive those services? Are they to die alone? If there is a tragedy, the blaze of publicity will throw the blame not on central Government, but on the local council, social worker, housing visitor or the health visitor. Neither the problem nor the responsibility lies fully with those people.
  We need to try to educate the Government to look at local authorities in a more positive and rational manner. The answers to the problems will not be found by Government officers, but lie within the local communities.
  I have already outlined the consequences of this legislation and repeat that life and limb will be put at risk. I know that the Minister met delegations yesterday from the Fire Brigades Union, which tried to spell out exactly what the consequences would be if further restrictions were placed on local government finances. I met that delegation also. Last time I spoke on this subject, I talked about the worry that south Yorkshire would not be able to carry out its statutory responsibilities. I was rather surprised to discover that schools and hospitals are not covered by the so-called statutory responsibility of cover for fire prevention. There is a high risk of the fire service being unable to cover schools and hospitals, again because of a lack of resources. The chief fire officer of south Yorkshire has made it clear that the fire service already operates below the minimum standards required. That makes the probable further restrictions even more worrying. Last year, on 1,500 occasions the fire appliances that were called out to major fires were undermanned. This year the restrictions will make the situation even worse.
  I cannot think why we have a financial formula which only takes into account finances in order to put money back into the Treasury pots. Many people are at risk from a lack of care and because the fire services are undermanned, firemen are likely to put themselves in greater danger. Normally local government can respond, and people throughout the country have enjoyed the benefits of that, but now no services of any consequence can be provided.
  6.20 pm
  Mr. Eric S. Heffer: The Bill must be opposed and the Labour party will oppose it. It reminds me of the Tory philosophy that I first discovered when I was a councillor in Liverpool many years ago. I was a member of the children's committee and we discussed the

  1041
  possibility of providing three or four bicycles for children in a home. We agreed to do so and then a Tory lady councillor said, "I hope they will be secondhand bicycles." I shall never forget that. I also remember discussing whether we should install central heating in the dormitories of children's homes. One lady, who no doubt lived in a nice house with central heating in every room, including the bedrooms, said, "You don't really need central heating in dormitories. It is better for children not to have it. They grow up strong." That summed up Tory philosophy. The Bill and everything that the Government have done with rate support grants over the years sums up that same Tory philosophy.
  Since 1979 the Government have cut £17 billion in rate support grant to local government. Imagine everything that could have been done with that for children, the old, those who need homes to live in and those who are dispossessed. The Bill adds to that problem.
  My hon. Friend the Member for Bootle (Mr. Roberts) has described what has happened on Merseyside and I shall describe what could happen in Liverpool. The settlement amounts to £128·316 million, and before anybody gets enthusiastic about it, they should understand the problems facing Liverpool. We have high levels of unemployment. Despite what Labour authorities have achieved over the past three years, people live in slum properties which should have been pulled down many years ago. We have a drugs problem and terrible pressures, yet what do we find? If the budget exceeds the Department of the Environment's assumption by 3 per cent., local government will lose £7·252 million; if it exceeds the assumption by 5 per cent., it will lose more than £12 million. In other words, the local authority dare not go beyond the Government's limit. Talk about centralised control. The Government talk about freedom, yet they tell local authorities, "Do this or you will suffer worse than you have suffered in the past." That is unacceptable.
  I should like to suggest what the Labour party should do when we return to office. First, we should not hesitate to abolish rate capping and the penalty system. Secondly, we should abolish surcharges on local councils for carrying out policies which they have said they will follow. We should certainly abolish the disqualification of councillors. Councillors have already been disqualified in Lambeth and some may be disqualified in Liverpool, if the case goes against them. I hope that it does not and that the House of Lords will have enough sense not to agree to their disqualification. However, if they do not, we shall abolish surcharges and the disqualification of decent, ordinary, working people who carry out their policies.
  Thirdly, we should restore central Government grant to its level prior to 1979. Some will say that I am asking for too much, but I do not think so. Even if we restore it to the 1979 level, because of the higher costs involved we are not restoring it to the level at which it should be, but only to the level at which it would have been if we had not had the Government's policies. The distribution of rate support grant must certainly be reformed, based on a genuine assessment of local authority needs.
  Fourthly, we must introduce special measures through the grant system to assist financially local authorities which have been forced to use creative accountancy measures. Did any of them want to use those measures? Of course not. They were forced into it because they had no choice. That has led to further problems for local authorities.
  1042
  Fifthly, we should abolish the controls on capital spending to allow local councils the freedom to determine and plan their local capital programmes. Sixthly, we should provide cheap loans to local councils which seek to expand their local capital programmes in order to tackle homelessness and urban deprivation, and to generate employment. Hon. Members who have not read the Church of England's document "Faith in the City'" should study it. I refer particularly to Tory Members who often talk about being Christians and members of the Church of England. That document goes beyond what we in the Labour party are advocating.
  Seventhly, local authority powers should be extended so that authorities can interven in the local community and economy, particularly in relation to raising the 2p limit on section 137 moneys. Eighthly, we should repeal the Government's privatisation legislation and replace it with both a statutory requirement on minimum pay and conditions for local authority employees and equal opportunities policies.
  Finally, we should restore the Greater London council. It is an absolute scandal that it has been abolished. It is wrong for our capital city not to have a local authority covering the whole area. It is an absolute nonsense and it should be restored.
  We must bring the police service under democratic control. We must do that on the basis of what we have seen recently. That does not mean political control, as Conservative Members are always saying. It means control by people who are elected and who, if the electorate do not like them, can be turned out. Democratic control is vital.
  We must consider the concept of more regional Government in certain areas to deal with the problems.
  I hope that I have summed up what I think should be done. Unfortunately, we will not win the vote tonight. The trouble in the House now is that we always win the argument hands down but we lose the vote. In the next election we will not only win the argument but win the vote as well.
  6.31 pm
  Mr. Roland Boyes: I should like to explain why the Newham Members have been unable to be present during the debate. They have been talking to a large number of people who are lobbying because of the effects of local government finance measures on their borough. It should be on the record that Newham is being rate-capped for the first time without any appeal.
  The Bill is a squalid one. It is one of a series of squalid Bills introduced in recent weeks which have included retrospective legislation and which have been designed to rob local authorities of power.
  I shall put the Bill into context. On 20 January 1986 the Secretary of State for the Environment, now the Secretary of State for Education and Science, said:
  "Under the old system of targets and penalties, the grant lost by the high spenders was surrendered to the Treasury … Under the new system, the grant that will be lost by the high spenders will form a pool which will be recycled to local authorities."—[Official Report, 20 January 1986; Vol. 90, c. 48.]
  The then Secretary of State made much political capital of his decision to introduce grant recycling. Just over one year later we are debating a Bill to bring an end to grant

  1043
  recycling. That is not surprising in the context of the way in which the Government have treated local authorities, particularly in respect of finance.
  The Government have created a system of local government finance that is so complex, with so many irregularities and illegalities, that the only people benefiting and laughing all the way to the bank are the lawyers. The system is so unsound that it makes one wonder about the lawyers in the Department of the Environment. However, I suspect that their advice has probably been ignored for political expediency. We know with certainty that neither the people who administer the system in the atmosphere of uncertainty nor the people whom they serve benefit. The system, shrouded in illegalities, can be tinkered with no longer. A system which is understood by all, and which gives certainty, must be introduced urgently. The Government have forfeited their opportunity to carry out that task. In fact, if the present Government were measured on their treatment of local government alone they would be relieved of office forthwith, and so they should be.
  My hon. Friend the Member for Norwood (Mr. Fraser) and my other hon. Friends who have spoken have explained in a simple and understandable way how the amount of cash in recycling is arrived at. I shall not waste the time of the House by reiterating what has already been said. On 5 March 1986 the then Secretary of State for the Environment stated in a written answer:
  "On the evidence now available to me about local authority budgets in 1986–87, I am satisfied that there will be a grant underclaim of at least £500 million."[Official Report, 5 March 1986; Vol. 93, c. 190.]
  He continued by declaring his willingness to guarantee that amount.
  The Association of County Councils gave a guarded welcome to the scheme. In a press release issued on 5 March it said:
  "The Government's guarantee … will bring a welcome degree of certainty to shire counties and counties … will nevertheless be glad that this money will benefit ratepayers."
  However, the chairman of the association, Mr. John Lovill, pointed out that the £500 million was still a recycling of a total grant that is less in cash terms than in the current financial year.
  By 7 May 1986 the Secretary of State had informed the public, through a Department of the Environment press release, that his guarantee to recycle £500 million would not be called upon. His officials had discovered a grant underclaim of £628 million that was available for distribution to local authorities. I am sure that the fact that that announcement was made to the newspapers less than 24 hours before polling began for the by-elections in Derbyshire, West and Ryedale was purely coincidental. The Department said that it was a routine announcement. Those who believe that must live in a dream world.
  The Association of County Councils pointed out in its own press release on 13 May 1986 that the announcement did not represent new money for local authorities. The association's cool attitude led it to say that there was uncertainty about the future of the recycling because the amount would change, as authorities' spending inevitably varied from their budgets. Local authorities do not like uncertainty. However, they must prefer uncertainty about the amount they will get to the certainty of getting nothing. That was to come.
  1044
  In his first rate support grant settlement consultation paper, 1987–88, the Secretary of State confirmed that grant recycling was to be abolished. He demonstrated his ability to write excellent Orwellian double-speak. In paragraph 5 he proposed to introduce
  "a further change which will provide individual authorities with greater certainty as to their grant entitlement."
  In paragraph 6 of the same document he argued that local authorities which overspent were entitled to less grant, which was then redistributed. He continued by saying that one local authority did not know by how much another was going to overspend, so no one knew how much was going to be recycled. The announcement of the amount to be recycled was made late and it was difficult to take into account when setting the rates precept. The Secretary of State, therefore, introduced certainty. Recycling was finally to be ended altogether.
  The Secretary of State demonstrated that he was able, not only to write double-speak, but to talk it. On 22 July 1986, during his rate support grant statement for 1987–88, he said that he intended to abolish grant recycling. He said:
  "As a result, authorities will be able to plan their budgets and rates with much greater assurance."
  That is an excellent example of Orwellian's new language. My hon. Friend the Member for Copeland (Dr. Cunningham) questioned the Secretary of State on his statement. He said:
  "Is not the Secretary of State also, in his plan to end recycling of grant, effectively saying to local authorities, 'Here is additional money in the settlement, which will be taken away later, almost certainly in at least an equal amount, by the termination of recycling of grant'? Does not that simply mean a massive windfall for the Treasury, which will be used for other purposes than local authority expenditure?"—[Official Report, 22 July 1986; Vol. 102, c.182–83.]
  The Secretary of State said that my hon. Friend was wrong about recycling. My hon. Friend was not wrong; he was absolutely correct. Everything said by the Minister today has justified every word said by my hon. Friend. Clearly, it was the Secretary of State who did not understand his own brief.
  The treasurer of Somerset county council has estimated that the size of the grant that will be lost in 1987–88 will be over £400 million. This compares with £592 million that would have been lost to English authorities if there had been no grant recycling in 1986–87. It is like management offering its work force a rise of between £8 and £12 during wage negotiations and the next day offering nothing because that removes uncertainty and allows the work force to redistribute its wages with, to use the Secretary of State's phrase, "much greater certainty."
  The treasurer of Durham county council, Mr. Kingsley Smith, wrote to me on 13 January 1987. He is a highly respected and experienced chief officer. He wrote:
  "The only advantage will be that the present uncertainty about grant entitlement will be removed. However the cost of removing this uncertainty is prohibitive and I cannot imagine that there is a local authority treasurer in the country who would regard it as a reasonable price to pay."
  Because of Mr. Smith's knowledge of the trade, I am certain that he reflects the anxieties of treasurers the length and breadth of England and Wales.
  The Government are taxing local authority spending. They are robbing the authorities of cash which the authorities expect and to which they are entitled. That important aspect has been underlined by the county treasurer of Durham. He writes:

  1045
  "The point that needs to be emphasised is that the effect of this Bill will be that local authorities collectively will not receive the amount of grant that Parliament believes it is approving for local authorities in the annual rate support grant statement."
  Local authorities are being denied cash which Parliament approves for them which they desperately need to deliver the services to the increasing number of people in their areas who need those services.
  I want to consider what that means for a specific local authority. David Wishart, the treasurer of the borough of Sunderland, wrote to me about the Bill. He explained that Sunderland spends above its GREA and as a consequence of spending 11 per cent. above GREA it suffered a grant loss of £2·598 million in 1986£87. Based on the returns of estimated expenditure for 1986–87 from local authorities, Sunderland's share of the £628 million available for grant recycling would be £2·735 million, that is to say, £137,000 more than the grant lost. If a similar calculation is made for 1987–88 based on an estimated expenditure of 4·1 per cent. higher than the 1986–87 figure, and the borough spent 11·8 per cent. above GREA, it would lose £1·89 million. If grant recycling was ended, that £1·89 million and the total grant lost by the other local authorities would be retained by the Treasury. Of course, the Government's assumption that spending will increase by only 4·1 per cent is open to a big question. A treasurer told me that the assumption that expenditure would increase by only a little over 4 per cent. was "clearly ridiculous."
  Mr. David Wishart ends his letter by stating:
  "In summarising I would wish to express concern at the Secretary of State's decision to abolish grant recycling, because of the possible effects on Sunderland and similar authorities."
  I do not have time this evening to debate all the problems of Sunderland. Suffice it to emphasise that Sunderland has a large unemployment problem and the town has the highest unemployment rate in Great Britain. The Government aim to take away almost £2 million from that authority.
  Mr. David Clelland: Does my hon. Friend agree that the city of Newscastle, in the metropolitan borough of Gateshead, stands to lose about £10 million as a result of these measures? These authorities share an inner area partnership. As a result of the Government's financial regime the authorities now have to reduce expenditure by more than twice as much as they will receive in inner area partnership grant. Does that not make nonsense of the Government's crocodile tears over the problems of the inner cities?
  Mr. Boyes: My hon. Friend has made a telling and important point. Indeed, Newcastle could lose between £5 million and £9 million worth of grants, and his local authority—of which he was such a distinguished leader—may lose between £500,000 and £1·6 million. That money is badly needed in the areas that we represent.
  The borough of Sunderland is greatly concerned about clause 1 (1)(b)(i), because it appears to be too wide in its literal sense. It suggests that the Secretary of State can ignore any information or data that become available. That appears to conflict with the requirement of section 65 of the Local Government, Planning and Land Act 1980, as amended by the Rate Support Grants Act 1986, which states that the information required from authorities in order to enable the Secretary of State to produce the rate support grant report must be received
  "in such form and by such date as he may specify".
  1046
  I also want clarification about clause 1 (1)(b)(ii), which could have far-reaching implications. It would appear to give the Secretary of State the power to fix the aggregate amount of block grant available without having any regard to the amount so specified in the RSG settlement.
  Clause 2 retrospectively corrects an illegality. The clause has been introduced to prevent adversely affected councils from seeking redress in the courts. The clause will turn out to be a legal minefield. It adds to a local government system created by the Government which is a shambles. The House has spent a considerable amount of time recently debating Bills concerned with retrospective legislaton which have had to be introduced because local authorities took the Government to court for acting illegally and won their cases. Each time we discussed the Bill, a Minister suggested that everything would now be all right.
  At the end of the debate on the rates Support Grants Bill the Minister said:
  "We are about to pass a Bill which will clarify the law and make it what it was thought to be in a number of important technical respects in relation to rate support grant settlements."—[Official Report, 21 July 1986; Vol. 102, c. 150–;51.]
  That was the Bill to end all Bills, but very soon we were considering other Bills, and this is the third Bill in quick succession on these matters.
  The Secretary of State said in reply to a question from my hon. Friend the Member for Bootle (Mr. Roberts):
  "I am the only person who is quite certain what the law is."—[Official Report, 16 December 1986; Vol. 107, c. 1055.]
  If the right hon. Gentleman is certain about the law, I do not understand why he wants to bring in three Bills— and no one can guess how many more might be introduced—to bring some sanity into the system.
  If the Secretary of State understood the law so well, why did the Government have to introduce the Rate Support Grants Act 1986, the Local Government Finance Bill and this Rate Support Grants Bill? Every time that the Government have tried to introduce certainty, they have discovered greater uncertainty. How many more Bills will they introduce before they realise that there are so many problems with the present system that the only honourable thing to do is for the Government to pack their bags, be gone, and let the Opposition create a simple, easily understood and manageable local government system.
  6.47 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): We have had a full and, by and large, constructive debate this afternoon on what is a simple but important new measure designed to improve the operation of the present rate support grant system. Hon. Members have made interesting and largely relevant contributions. I have listened carefully to the views expressed and will do my best to respond to some of the key points that have been raised.
  My hon. Friend the Minister for Local Government has eloquently explained already the need for the Bill and how it achieves its stated objectives, and I do not intend to repeat what he has already made clear. He has also explained the benefits which the Bill will confer on local authorities in terms of great stability and certainty, which explains why many authorities have welcomed the principles and purpose which lie behind it.
  Some Opposition Members have raised the spectre of all sorts of misdeeds which they believe my right hon. Friend the Secretary of State may be trying to perpetrate

  1047
  under cover of this apparently straightforward measure. I must tell Opposition Members that they are wrong. I am unable to say whether they are wrong through lack of understanding or lack of trust—or perhaps both.
  The Bill is intended to abolish the practice of grant recycling, a procedure which has proved a hindrance to good management and sensible budgeting in local government. Local authorities which adopt sensible spending policies have nothing to fear from the provisions of the Bill. It is significant that most of the contributions from Opposition Members came from hon. Members representing high-spending authorities which wish to spend even more. The Bill has implications for such authorities. It will provide a tougher regime for those who choose to push up spending, and that I regard as a further positive advantage offered by the Bill. Hitherto, recycled grant has found its way back indiscriminately to high and low spenders alike. The very high-spending authorities whose spending decisions have reduced their grant entitlement, and have therefore contributed to an aggregate underclaim of grant, find themselves beneficiaries of recycling. Such a situation is unacceptable, and the Bill will bring it to an end.
  I stress that the Bill will still allow local authorities to spend at levels of their own choice. However, it ensures that the consequences of their spending decisions, in terms of their entitlement to grant, are clear-cut and flow directly from, and only from, those decisions. The spending levels of other authorities have no bearing on an authority's grant entitlement. Overspending elsewhere will not affect that entitlement. This is important in promoting certainty as to grant entitlement at a very early stage, when budgets are being set and rate levels discussed, and in achieving a greater level of local accountability. Ratepayers will be able to see with the utmost clarity just what the effects of profligate spending are.
  Mr. Heffer: What does "profligate spending" mean? Does it mean building homes and sports centres for the unemployed youth, or putting telephones into old people's homes?
  Mr. Chope: If the hon. Gentleman had been present earlier today—
  Mr. Heffer: I have been here all the time.
  Mr. Chope: If the hon. Gentleman had been present this morning when I was addressing a seminar organised by the Local Government Chronicle, he would have been able to have the benefit of a detailed analysis of exactly how much money is being wasted unnecessarily in local government, and how much can be saved. We intend to make six particular services the subject of compulsory competitive tender. Even if only 10 per cent. savings are made on those services—that is a modest estimate having regard to the savings made by those authorities which have already gone in for competitive tendering— that will save £250 million. I do not expect to convince the hon. Gentleman about this, because I read in the newspapers that he regards the present Liverpool city council as the best that there has ever been in Liverpool. If that is his view, that shows how wide is the chasm between us and how difficult it will be to reach an understanding on these matters.
  We have been asked when the Bill's provisions will apply. There will be no grant recycling in 1987–88, but for
  1048
  the remainder of the financial year 1986–87 grant will continue to be recycled. The guarantees given by my right hon. Friend the previous Secretary of State that £500 million would be available in the first supplementary report for 1986–87 will be implemented when that report is made. That will be as soon as the Local Government Finance Bill has received Royal Assent. Some £618 million will be recycled by that report. However, that is only the first supplementary report in 1986–87, and subsequent supplementary reports will be produced in due course. I cannot comment about those.
  The hon. Member for Norwood (Mr. Fraser) suggested that, on what he called a low estimate of the Bill's proposals, it would cause two thirds of a billion pounds to be lost. A higher estimate was that £1 billion would be lost. There is an amazing contrast between that and what the hon. Member for Copeland (Dr. Cunningham) has said. He suggested that the cost would be about £400 million. There is a lack of consistency here.
  I am able to tell the House that both hon. Members are wrong. Their assumption is that local authorities will carry on massively overspending, and if that assumption is proved correct those authorities will forfeit grant. However, if local authorities do not go on massively overspending, the grant is theirs. They will not lose any grant if they increase spending overall in line with the settlement assumption, which, at 1·5 per cent. above inflation for non-rate-limited authorities, is realistic. Authorities will then be able to claim the full amount of grant available for them next year.
  My hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) raised a number of interesting points, in particular his concern about consultation. No special consultation provision is necessary, because of the wide provisions available in part VI of the 1980 Act, which requires consultation on the contents of the rate support grant reports.
  A number of comments have been made about clause 2 and the delineation of classes of authority. This delineation is used to enable different determination of GRE, grant-related poundage, multipliers and so on to be made for different types of authorities. This is necessary because of the different functions undertaken by different types of authorities. For example, county councils, metropolitan districts, outer London boroughs, ILEA and the Isles of Scilly are education authorities, while the shire districts, the inner London boroughs and the Common Council of the City of London are not. Our lawyers advise us that there is doubt about whether the definition of classes of authority is consistent throughout part VI, and that is why clause 2 seeks to put all those references on the same footing—that is, using the definitions in sections 53(5) of the 1980 Act, as modified by section 59(11) and schedule 1 to the Rates Support Grants Act 1986. I hope that that will allay some of the fears that have been expressed by Labour Members.
  I had hoped that we would hear a bit more about the Labour party's proposals. As far as one can detect from what it has published so far, its proposals envisage the reintroduction of grant recycling and putting no local authority on a negative marginal rate of grant. This would mean that no authority would lose grant if it increased spending, and most would gain grant. That is not the end of what the Labour party says. It says that total grant would be cash-limited, and that means that additional grant would have to come from other authorities. We

  1049
  would thus return to a situation where authorities which exercised good housekeeping would have to pay for the excesses of the high spenders. Labour would not be introducing grant recycling— it would be giving authorities more grant than they expected, but it would be introducing grant clawback, giving authorities less grant than they expected. This has severe implications for all local authorities living within their means and trying to budget sensibly.
  The right hon. Member for Manchester, Wythenshawe (Mr. Morris) raised a number of detailed points about the disabled. I am as concerned as he is about the disabled. He did not refer to the principal issue that is one of the priorities for local government. His local authority of Manchester increased its number of employees on a full-time equivalent basis by 2,291 between June 1985 and June 1986. How many of those extra employees have been taken on to help the disabled?
  Mr. Alfred Morris: With their very important responsibilities for local government finance, what consultations have Environment Ministers had with DHSS Ministers and the Treasury about the implications of the Disabled Persons (Services, Consultation and Representation) Act 1986? That is a very important question.
  Mr. Chope: I shall write to the right hon. Gentleman in answer to that detailed point. Much of his speech was addressed to the implications of the Bill. He suggested that it would take money away from local authorities which would otherwise wish to spend it on the disabled. It is worth pointing out that in Wandsworth, between 1978 and 1985, despite prudent spending by that authority, there was a 27 per cent. increase in home helps and a 38 per cent. increase in the council's stock of sheltered accommodation. That shows that prudent spending is compatible with care for those in greatest need. I do not have time to deal with all the other detailed points raised in the course of the debate. This is an important Bill and deserves the support of the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 343, Noes 196.

  Division No. 80]

  [7 pm

  AYES

  Adley, Robert

  Body, Sir Richard

  Aitken, Jonathan

  Bonsor, Sir Nicholas

  Alexander, Richard

  Bottomley, Peter

  Alison, Rt Hon Michael

  Bottomley, Mrs Virginia

  Ancram, Michael

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

  Arnold, Tom

  Bowden, Gerald (Dulwich)

  Aspinwall, Jack

  Boyson, Dr Rhodes

  Atkins, Rt Hon Sir H.

  Braine, Rt Hon Sir Bernard

  Atkins, Robert (South Ribble)

  Brandon-Bravo, Martin

  Atkinson, David (B'm'th E)

  Bright, Graham

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

  Brinton, Tim

  Baker, Nicholas (Dorset N)

  Brooke, Hon Peter

  Baldry, Tony

  Brown, M. (Brigg & Cl'thpes)

  Banks, Robert (Harrogate)

  Browne, John

  Batiste, Spencer

  Bruinvels, Peter

  Beaumont-Dark, Anthony

  Bryan, Sir Paul

  Bellingham, Henry

  Budgen, Nick

  Bendall, Vivian

  Bulmer, Esmond

  Benyon, William

  Burt, Alistair

  Best, Keith

  Butler, Rt Hon Sir Adam

  Bevan, David Gilroy

  Butterfill, John

  Biffen, Rt Hon John

  Carlisle, Kenneth (Lincoln)

  Biggs-Davison, Sir John

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

  Blackburn, John

  Carttiss, Michael

  Blaker, Rt Hon Sir Peter

  Cash, William

  1050

  Chalker, Mrs Lynda

  Heathcoat-Amory, David

  Channon, Rt Hon Paul

  Heddle, John

  Chapman, Sydney

  Henderson, Barry

  Chope, Christopher

  Heseltine, Rt Hon Michael

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

  Hickmet, Richard

  Clark, Dr Michael (Rochford)

  Hicks, Robert

  Clark, Sir W. (Croydon S)

  Higgins, Rt Hon Terence L.

  Clegg, Sir Walter

  Hill, James

  Cockeram, Eric

  Hind, Kenneth

  Colvin, Michael

  Hirst, Michael

  Coombs, Simon

  Hogg, Hon Douglas (Gr'th'm)

  Cope, John

  Holland, Sir Philip (Gedling)

  Corrie, John

  Holt, Richard

  Couchman, James

  Hordem, Sir Peter

  Cranborne, Viscount

  Howard, Michael

  Critchley, Julian

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

  Crouch, David

  Howarth, Gerald (Cannock)

  Currie, Mrs Edwina

  Howe, Rt Hon Sir Geoffrey

  Dickens, Geoffrey

  Howell, Rt Hon D. (G'ldford)

  Dorrell, Stephen

  Hubbard-Miles, Peter

  Douglas-Hamilton, Lord J.

  Hunt, John (Ravensbourne)

  du Cann, Rt Hon Sir Edward

  Hunter, Andrew

  Dunn, Robert

  Hurd, Rt Hon Douglas

  Dykes, Hugh

  Irving, Charles

  Edwards, Rt Hon N. (P'broke)

  Jackson, Robert

  Eggar, Tim

  Jenkin, Rt Hon Patrick

  Emery, Sir Peter

  Jessel, Toby

  Evennett, David

  Johnson Smith, Sir Geoffrey

  Eyre, Sir Reginald

  Jones, Gwilym (Cardiff N)

  Fairbairn, Nicholas

  Jones, Robert (Herts W)

  Farr, Sir John

  Key, Robert

  Favell, Anthony

  King, Roger (B'ham N'tield)

  Fenner, Dame Peggy

  King, Rt Hon Tom

  Finsberg, Sir Geoffrey

  Knight, Greg (Derby N)

  Fletcher, Sir Alexander

  Knight, Dame Jill (Edgbaston)

  Fookes, Miss Janet

  Knowles, Michael

  Forman, Nigel

  Knox, David

  Forsyth, Michael (Stirling)

  Lamont, Rt Hon Norman

  Forth, Eric

  Lang, Ian

  Fowler, Rt Hon Norman

  Latham, Michael

  Fox, Sir Marcus

  Lawler, Geoffrey

  Franks, Cecil

  Lawrence, Ivan

  Fraser, Peter (Angus East)

  Lawson, Rt Hon Nigel

  Freeman, Roger

  Lee, John (Pendle)

  Fry, Peter

  Leigh, Edward (Gainsbor'gh)

  Gale, Roger

  Lennox-Boyd, Hon Mark

  Galley, Roy

  Lightbown, David

  Gardiner, George (Reigate)

  Lilley, Peter

  Gardner, Sir Edward (Fylde)

  Lloyd, Sir Ian (Havant)

  Garel-Jones, Tristan

  Lloyd, Peter (Fareham)

  Glyn, Dr Alan

  Lord, Michael

  Goodhart, Sir Philip

  Luce, Rt Hon Richard

  Goodlad, Alastalr

  Lyell, Nicholas

  Gorst, John

  Macfarlane, Neil

  Gow, Ian

  MacGregor, Rt Hon John

  Gower, Sir Raymond

  MacKay, Andrew (Berkshire)

  Grant, Sir Anthony

  MacKay, John (Argyll & Bute)

  Greenway, Harry

  Maclean, David John

  Gregory, Conal

  McLoughlin, Patrick

  Griffiths, Sir Eldon

  McNair-Wilson, M. (N'bury)

  Griffiths, Peter (Portsm'th N)

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

  Grist, Ian

  McQuarrie, Albert

  Ground, Patrick

  Madel, David

  Grylls, Michael

  Major, John

  Gummer, Rt Hon John S

  Malone, Gerald

  Hamilton, Hon A. (Epsom)

  Maples, John

  Hamilton, Neil (Tatton)

  Marland, Paul

  Hampson, Dr Keith

  Marshall, Michael (Arundel)

  Hannam, John

  Mather, Sir Carol

  Hargreaves, Kenneth

  Maude, Hon Francis

  Harris, David

  Mawhinney, Dr Brian

  Harvey, Robert

  Maxwell-Hyslop, Robin

  Haselhurst, Alan

  Mayhew, Sir Patrick

  Havers, Rt Hon Sir Michael

  Mellor, David

  Hawkins, C. (High Peak)

  Merchant, Piers

  Hawkins, Sir Paul (N'folk SW)

  Meyer, Sir Anthony

  Hawksley, Warren

  Miller, Hal (B'grove)

  Hayes, J.

  Mills, Iain (Meriden)

  Hayhoe, Rt Hon Sir Barney

  Mills, Sir Peter (West Devon)

  Hayward, Robert

  Miscampbell, Norman

  1051

  Mitchell, David (Hants NW)

  Smith, Tim (Beaconsfield)

  Moate, Roger

  Soames, Hon Nicholas

  Monro, Sir Hector

  Speller, Tony

  Montgomery, Sir Fergus

  Spencer, Derek

  Moore, Rt Hon John

  Spicer, Jim (Dorset W)

  Morris, M. (N'hampton S)

  Spicer, Michael (S Worcs)

  Morrison, Hon C. (Devizes)

  Squire, Robin

  Morrison, Hon P. (Chester)

  Stanbrook, Ivor

  Moynihan, Hon C.

  Stanley, Rt Hon John

  Mudd, David

  Stern, Michael

  Murphy, Christopher

  Stevens, Lewis (Nuneaton)

  Neale, Gerrard

  Stewart, Allan (Eastwood)

  Nelson, Anthony

  Stewart, Andrew (Sherwood)

  Neubert, Michael

  Stewart, Ian (Hertf'dshire N)

  Newton, Tony

  Stokes, John

  Nicholls, Patrick

  Stradling Thomas, Sir John

  Normanton, Tom

  Sumberg, David

  Norris, Steven

  Tapsell, Sir Peter

  Onslow, Cranley

  Taylor, John (Solihull)

  Oppenheim, Phillip

  Taylor, Teddy (S'end E)

  Oppenheim, Rt Hon Mrs S.

  Tebbit, Rt Hon Norman

  Osborn, Sir John

  Temple-Morris, Peter

  Ottaway, Richard

  Terlezki, Stefan

  Page, Sir John (Harrow W)

  Thatcher, Rt Hon Mrs M.

  Page, Richard (Herts SW)

  Thomas, Rt Hon Peter

  Parkinson, Rt Hon Cecil

  Thompson, Donald (Calder V)

  Patten, J. (Oxf W & Abgdn)

  Thompson, Patrick (N'ich N)

  Pawsey, James

  Thorne, Neil (Word S)

  Peacock, Mrs Elizabeth

  Thornton, Malcolm

  Percival, Rt Hon Sir Ian

  Thurnham, Peter

  Pollock, Alexander

  Townend, John (Bridlington)

  Porter, Barry

  Townsend, Cyril D. (B'heath)

  Portillo, Michael

  Tracey, Richard

  Powell, William (Corby)

  Trippier, David

  Powley, John

  Trotter, Neville

  Price, Sir David

  Twinn, Dr Ian

  Prior, Rt Hon James

  van Straubenzee, Sir W.

  Proctor, K. Harvey

  Vaughan, Sir Gerard

  Rafian, Keith

  Waddington, Rt Hon David

  Rathbone, Tim

  Wakeham, Rt Hon John

  Rees, Rt Hon Peter (Dover)

  Walden, George

  Renton, Tim

  Walker, Bill (T'side N)

  Rhodes James, Robert

  Wall, Sir Patrick

  Rhys Williams, Sir Brandon

  Waller, Gary

  Ridley, Rt Hon Nicholas

  Walters, Dennis

  Ridsdale, Sir Julian

  Ward, John

  Rifkind, Rt Hon Malcolm

  Wardle, C. (Bexhill)

  Rippon, Rt Hon Geoffrey

  Warren, Kenneth

  Roberts, Wyn (Conwy)

  Watson, John

  Robinson, Mark (N'port W)

  Watts, John

  Roe, Mrs Marion

  Wells, Sir John (Maidstone)

  Rossi, Sir Hugh

  Wheeler, John

  Rost, Peter

  Whitfield, John

  Rowe, Andrew

  Whitney, Raymond

  Rumbold, Mrs Angela

  Wiggin, Jerry

  Ryder, Richard

  Wilkinson, John

  Sackville, Hon Thomas

  Winterton, Mrs Ann

  Sainsbury, Hon Timothy

  Winterton, Nicholas

  Sayeed, Jonathan

  Wolfson, Mark

  Scott, Nicholas

  Wood, Timothy

  Shaw, Giles (Pudsey)

  Woodcock, Michael

  Shaw, Sir Michael (Scarb')

  Yeo, Tim

  Shelton, William (Streatham)

  Young, Sir George (Acton)

  Shepherd, Colin (Hereford)

  Younger, Rt Hon George

  Shepherd, Richard (Aldridge)

  Shersby, Michael

  Tellers for the Ayes:

  Silvester, Fred

  Mr. Robert Boscawen and

  Sims, Roger

  Mr. Tony Durant.

  Skeet, Sir Trevor

  NOES

  Abse, Leo

  Banks, Tony (Newham NW)

  Adams, Allen (Paisley N)

  Barron, Kevin

  Alton, David

  Beckett, Mrs Margaret

  Anderson, Donald

  Beith, A. J.

  Archer, Rt Hon Peter

  Bell, Stuart

  Ashley, Rt Hon Jack

  Benn, Rt Hon Tony

  Ashton, Joe

  Bidwell, Sydney

  Atkinson, N. (Tottenham)

  Blair, Anthony

  Bagier, Gordon A. T.

  Boothroyd, Miss Betty

  1052

  Boyes, Roland

  Hughes, Roy (Newport East)

  Bray, Dr Jeremy

  Hughes, Sean (Knowsley S)

  Brown, Gordon (D'f'mline E)

  Janner, Hon Greville

  Brown, Hugh D. (Provan)

  Jenkins, Rt Hon Roy (Hillh'd)

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

  John, Brynmor

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

  Jones, Barry (Alyn & Deeside)

  Brown, Ron (E'burgh, Leith)

  Kaufman, Rt Hon Gerald

  Bruce, Malcolm

  Kirkwood, Archy

  Buchan, Norman

  Lambie, David

  Caborn, Richard

  Lamond, James

  Callaghan, Jim (Heyw'd & M)

  Leadbitter, Ted

  Campbell, Ian

  Leighton, Ronald

  Campbell-Savours, Dale

  Litherland, Robert

  Canavan, Dennis

  Livsey, Richard

  Carlile, Alexander (Montg'y)

  Lloyd, Tony (Stretford)

  Carter-Jones, Lewis

  Lofthouse, Geoffrey

  Clark, Dr David (S Shields)

  Loyden, Edward

  Clarke, Thomas

  McCartney, Hugh

  Clay, Robert

  McDonald, Dr Oonagh

  Clelland, David Gordon

  McGuire, Michael

  Clwyd, Mrs Ann

  MacKenzie, Rt Hon Gregor

  Cocks, Rt Hon M. (Bristol S)

  Maclennan, Robert

  Cohen, Harry

  McTaggart, Robert

  Coleman, Donald

  McWilliam, John

  Conlan, Bernard

  Madden, Max

  Cook, Frank (Stockton North)

  Marek, Dr John

  Cook, Robin F. (Livingston)

  Marshall, David (Shettleston)

  Corbett, Robin

  Martin, Michael

  Cox, Thomas (Tooting)

  Mason, Rt Hon Roy

  Craigen, J. M.

  Maxton, John

  Crowther, Stan

  Maynard, Miss Joan

  Cunliffe, Lawrence

  Meacher, Michael

  Cunningham, Dr John

  Meadowcroft, Michael

  Dalyell, Tam

  Michie, William

  Davies, Rt Hon Denzil (L'lli)

  Mikardo, Ian

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

  Millan, Rt Hon Bruce

  Deakins, Eric

  Mitchell, Austin (G't Grimsby)

  Dixon, Donald

  Morris, Rt Hon A. (W'shawe)

  Dobson, Frank

  Morris, Rt Hon J. (Aberavon)

  Dormand, Jack

  Nellist, David

  Douglas, Dick

  Oakes, Rt Hon Gordon

  Dubs, Alfred

  O'Neill, Martin

  Duffy, A. E. P.

  Orme, Rt Hon Stanley

  Dunwoody, Hon Mrs G.

  Owen, Rt Hon Dr David

  Eadie, Alex

  Park, George

  Eastham, Ken

  Parry, Robert

  Evans, John (St. Helens N)

  Patchett, Terry

  Fatchett, Derek

  Pavitt, Laurie

  Faulds, Andrew

  Pendry, Tom

  Field, Frank (Birkenhead)

  Pike, Peter

  Fields, T. (L'pool Broad Gn)

  Powell, Raymond (Ogmore)

  Fisher, Mark

  Prescott, John

  Flannery, Martin

  Radice, Giles

  Foot, Rt Hon Michael

  Randall, Stuart

  Forrester, John

  Raynsford, Nick

  Foster, Derek

  Redmond, Martin

  Fraser, J. (Norwood)

  Rees, Rt Hon M. (Leeds S)

  Freeson, Rt Hon Reginald

  Richardson, Ms Jo

  Garrett, W. E.

  Roberts, Allan (Bootle)

  Gilbert, Rt Hon Dr John

  Roberts, Ernest (Hackney N)

  Godman, Dr Norman

  Robertson, George

  Golding, Mrs Llin

  Robinson, G. (Coventry NW)

  Gourlay, Harry

  Rogers, Allan

  Hamilton, James (M'well N)

  Rooker, J. W.

  Hamilton, W. W. (Fife Central)

  Ross, Ernest (Dundee W)

  Hancock, Michael

  Ross, Stephen (Isle of Wight)

  Hardy, Peter

  Rowlands, Ted

  Harrison, Rt Hon Walter

  Sedgemore, Brian

  Hart, Rt Hon Dame Judith

  Sheerman, Barry

  Haynes, Frank

  Sheldon, Rt Hon R.

  Healey, Rt Hon Denis

  Shore, Rt Hon Peter

  Heffer, Eric S.

  Short, Ms Clare (Ladywood)

  Hogg, N. (C'nauld & Kilsyth)

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

  Holland, Stuart (Vauxhall)

  Silkin, Rt Hon J.

  Home Robertson, John

  Skinner, Dennis

  Howarth, George (Knowsley, N)

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

  Howell, Rt Hon D. (S'heath)

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

  Howells, Geraint

  Soley, Clive

  Hoyle, Douglas

  Spearing, Nigel

  Hughes, Robert (Aberdeen N)

  Steel, Rt Hon David

  1053

  Stott, Roger

  Weetch, Ken

  Strang, Gavin

  Welsh, Michael

  Thomas, Dr R. (Carmarthen)

  White, James

  Thompson, J. (Wansbeck)

  Wigley, Dafydd

  Thorne, Stan (Preston)

  Williams, Rt Hon A.

  Tinn, James

  Winnick, David

  Torney, Tom

  Wrigglesworth, Ian

  Wainwright, R.

  Wallace, James

  Tellers for the Noes:

  Wardell, Gareth (Gower)

  Mr. Ron Davies and

  Wareing, Robert

  and Mr. Allen McKay.

  Question accordingly agreed to.
  Bill read a Second time and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

  Rate Support Grants Bill

    RATE SUPPORT GRANTS BILL [MONEY]
    Queen's Recommendations having been signified—
    Resolved,
    That, for the purposes of any Act resulting from the Rate Support Grants Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the provisions of that Act in the sums payable out of money so provided under any other enactment.— [Mr. Maude.]

  Security (Search Warrants)
  7.10 pm
  Dr. David Owen: On a point of order, Mr. Deputy Speaker. I am grateful to the Leader of the House for staying in his place. There is a rumour going around that the Solicitor-General for Scotland is about to issue a statement clarifying what took place in the House yesterday and what was said in another place today. It will be within the memory of the House that the Secretary of State for Scotland, in answer to an intervention that I made, said:
  "as with any Law Officer, in these circumstances the Lord Advocate does not have a dual role—he has a single role as a Law Officer. Secondly, the width of any warrant sought is a matter not for the police or for the Lord Advocate but for the courts."
  The Solicitor-General for Scotland, when discussing the responsibilities of the Lord Advocate to secure the search warrant, said:
  "He is there to ensure that, first, the warrant is sufficient to meet its purposes and, secondly, to ensure that it does not go beyond what is required."—[Official Report, 3 February 1987; Vol. 109, c. 852–57.]
  There is a clear incompatibility between those statements. There has been a further statement in answer to a question from Lord Wilson of Langside, himself a former Lord Advocate, in another place. Frankly, it appears that there now is considerable confusion.
  The substantial point is that clarification of the confusion should not be made in three different statements by Scottish Office Ministers. Surely the clarification should be made in the House. As the term "Law Officer" has been used in this matter, it impacts upon the responsibilities of the Attorney-General. With respect, Mr. Deputy Speaker, it would be of great convenience if the Leader of the House will at least assure hon. Members that, on a matter for the House of Commons, no clarification will be made outside the House of Commons and that that should be done at the earliest possible moment.
  Mr. Deputy Speaker (Sir Paul Dean): The right hon. Gentleman has made his point. I am sure that it will be noted. I am sure also that he realises that it is not a matter for the Chair.
  Mr. Bruce Millan: Further to the point of order, Mr. Speaker. It was I who, from the Opposition Benches, first raised the issue during the debate yesterday and asked the Secretary of State to make a clarification there and then. Have you, Mr. Deputy Speaker, had any sign from the Leader of the House or from the Secretary of State for Scotland that we will have a clarification? It is unsatisfactory that this matter, which was crucial to yesterday's debate, was not satisfactorily answered by Ministers. In effect, there was a refusal to answer. The answer was perfectly clear by implication. There was a statement today by the Lord Advocate, in another place, although the Solicitor-General for Scotland was here yesterday, together with the Attorney-General, not to mention the Secretary of State for Scotland who wound up the debate. The matter could have been clarified here yesterday during the debate. Surely, in those circumstances, we are entitled to some response from the Leader of the House at least.
  The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I am not aware that there is an inconsistency, but I shall certainly look at the point that has been raised.

  Parliamentary and Health Service Commissioners Bill
  Order for Second Reading read.
  7.17 pm
  The Minister of State, Privy Council Office (Mr. Richard Luce): I beg to move, That the Bill be now read a Second Time.
  I am sure that hon. Members will recognise this Bill as a valuable measure and I hope that it will receive support from all hon. Members. Its main aim is to implement the Government's undertaking, given in 1985, to introduce legislation to extend the powers of the Parliamentary Commissioner for Administration to enable him to investigate the activities of non-departmental public bodies, commonly known as quangos, as well as those of Government Departments. It is now almost exactly 20 years since the office of the Parliamentary Commissioner— the first United Kingdom Ombudsman— was established to look into complaints of maladministration against Government Departments. It is perhaps surprising now to recall the doubts expressed at the time about the wisdom of this action and, in particular, whether the Parliamentary Commissioner's activities might not undermine the role of hon. Members in pursuing complaints. The experience of the last 20 years has shown the great value of his role. I am sure that most hon. Members will agree that his investigations have actually strengthened the ability of hon. Members to protect the individual against administrative abuse. I take this chance to commend the Ombudsman, Mr. Anthony Barrowclough, and his staff for the painstaking job that they do.
  Hon. Members will recall that the Select Committee on the Parliamentary Commissioner for Administration recommended this extension of jurisdiction in its report on non-departmental public bodies in the 1983–84 Session. This was an area that the Select Committee had explored some years previously but had delayed making final recommendations until the Government's review on the nature and number of these quangos had been concluded. In its report the Select Committee made clear its view that it would not be appropriate for all quangos to be included and gave considerable thought to the precise bodies to be covered. We must all be grateful for the valuable work of the Committee in mapping out guidelines in this new field under the chairmanship of my hon. and learned Friend the Member for Colchester, North (Sir A. Buck).
  In their response, published in July 1985, the Government pointed out that the Select Committee had put forward no evidence of significant maladministration by any of the bodies recommended for inclusion in the PCA's jurisdiction. Nevertheless, the Government accepted that there was a case in principle for extending the PCA's jurisdiction in this way, subject to some further observations on the criteria for defining the bodies which it was appropriate to bring within jurisdiction. We undertook to introduce legislation in due course to implement the proposals—hence this Bill.
  The meat of the Bill, dealing with the extension of PCA jurisdiction to quangos, is in clause 1 and the schedule attached to it. Hon. Members will need to note that all provisions of the Parliamentary Commissioner Act 1967

  1057
  apply unchanged to the new bodies, with the exception of the amendment which specifies the bodies that the PCA may investigate.
  The existing non-departmental public bodies which it is proposed to bring within jurisdiction are listed in the schedule. The clause provides that further bodies may be added to the schedule in future. It also lays down for parliamentary approval the criteria that such bodies will have to satisfy in order to be listed. These reflect essentially the concept that the bodies should be subject to some degree of ultimate ministerial accountability to Parliament, in that they are dependent for their financing and continuing existence on Government policy.
  While this extension of the PCA's jurisdiction is the main purpose of the Bill, we have taken the opportunity to bring forward one or two other useful amendments to existing legislation. First, clauses 2 and 4 propose some changes that are designed to ensure the smooth running of the PCA's or the Health Service Commissioner's office, should it be left unexpectedly without a commissioner. Clause 2 provides for the removal of a commissioner who, possibly through accident or illness, is incapable of carrying out his duties but is so severely incapacitated as to be unable to offer his resignation. The present Acts provide no remedy in such an event, except removal after addresses by both Houses of Parliament—an insensitive and inappropriate procedure.
  Clause 4 provides for the appointment of an acting commissioner, should the offices of the PCA or any of the .Health Service Commissioners become vacant. The appointment of a new commissioner necessarily takes some time, and while the position remains vacant some important functions, including the presentation to Parliament of reports on completed cases, cannot be carried out. I must stress particularly that both these clauses are precautionary measures to meet an unlikely situation, but should either unwelcome event occur the continuing work of the PCA and the Health Service Commissioner offices would be hampered without them.
  In addition, clause 3 introduces a provision to allow Health Service Commissioner reports to be passed to Members of Parliament who have been involved in a complaint. The Health Service Commissioner has felt unable to pass his reports to hon. Members under legislation establishing the offices of Health Commissioners, even where an hon. Member has been instrumental in assisting a constituent, on the grounds that the reports would not be privileged in such circumstances. He has recommended, and the Select Committee has endorsed his view, that this position should be remedied. The Bill provides a convenient opportunity.
  Clauses 5 and 6 bring in some changes to the time limits and procedures for complaints to the Health Service Commissioners. The main effect is to extend from three to 12 months the period within which a health authority in England or Wales may itself refer a complaint to the Health Service Commissioner. The Health Service Commissioner considers, and the Select Committee has agreed, that this period is too short and that the longer period, which is already specified in the parallel Scottish legislation, is more appropriate.
  In addition to its major provisions, the Bill therefore provides the opportunity to introduce a number of additional modest but useful changes to improve the
  1058
  effectiveness of existing legislation. In all, I think that this is a useful Bill and I hope that it will command general support. I commend it to the House.
  7.25 pm
  Mr. Frank Dobson: There is little likelihood of there being much dispute about whether the Bill ought to be given a Second Reading. Most hon. Members regard it as a relatively meritorious Bill. It is worth reminding those hon. Members who are present that the first British ombudsman— the Parliamentary Commissioner—was created by the Labour party. We welcome any improvement on the scope of that office and on the scope and functioning of the Health Service Commissioner's office. However, we do not think that the Bill goes far enough.
  Opposition Members, who believe that a substantial number of services should be provided by public bodies, feel under a greater obligation to make provision for the proper redress of grievances than do Conservative Members, who would prefer to do without public bodies altogether and to privatise everything. Therefore, it is important that those who believe in public services should provide for the redress of grievances.
  I intend to concentrate on the functions of the Health Service Commissioner rather than on his functions as Parlimentary Commissioner. My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) will be concentrating on his activities as Parliamentary Commissioner.
  After the Parliamentary Commissioner's report to the Select Committee, it was agreed that his jurisdiction should be extended. However, there are a few curious omissions from the list of bodies that were originally recommended for inclusion. Why the Medical Research Council is to be covered by the Parliamentary Commissioner but the Economic and Social Research Council is not is beyond my grasp. I hope that the Minister will be able to explain that to us. It is also strange that the Scottish Special Housing Association should have been recommended for inclusion but was then excluded by the Government. I shall say no more about these oddities. I am sure that my hon. Friend the Member for Newcastle upon Tyne, East will refer to some more.
  A few of the general points that I wish to make spring from long-held personal feelings. I am dubious about the fact that the Parliamentary Commissioner's office is staffed by seconded civil servants. The arrangement in local commissioners' offices, under which people have to apply for a job, obtain it and then go on to the payroll, is superior.
  Mr. Nicholas Soames: The hon. Gentleman says that he thinks it odd that the Parliamentary Commissioner's office is staffed by civil servants. I am sure that he does not mean to imply that they do not do a thoroughly good job.
  Mr. Dobson: No; they do a throughly good but rather slow job. As they are seconded from the Civil Service, they are open to the criticism that during their investigations they may be influenced by the thought that eventually they may have to return to the poachers, having abandoned their gamekeeping role. We shall need to consider that point.
  It is also a fault that the PCA's office employs no lawyers of its own. I am no advocate of the widespread

  1059
  employment of lawyers, despite the fact that I represent Lincoln's Inn and Gray's Inn, which are in my constituency. The Parliamentary Commissioner's office relies on Treasury solicitors for legal advice, which leads to the possibility of Treasury solicitors advising the poacher and the gamekeeper, because Treasury solicitors could be advising the Department complained against and the PCA's office investigating the complaint. There is some dubiety about that arrangement.
  Mr. Alex Carlile: Does not the hon. Gentleman think that he is being a little grudging to the present Parliamentary Commissioner and his predecessor, who were distinguished lawyers? Does he accept that the independently minded Parliamentary Commissioner would not look for one moment at partisan advice from the Treasury Solicitor?
  Mr. Dobson: I believe that the hon. Gentleman is a lawyer. Presumably, by his intervention, he is saying that all parliamentary commissioners should be lawyers because they alone will introduce an independent legal element into the office. That seems to be a bit of an absurdity. I do not think that it meets my point.
  We cannot expect the Parliamentary Commissioner himself—who has other functions—to mull over detailed legal points which may arise when cases are first submitted for consideration, whether or not they are appropriate for an investigation. That should not be his normal function.
  It was a retrograde step—this is to do with the Select Committee, not the Parliamentary Commissioner— to abandon the practice of publishing all the commissioners' reports. The reports should be available and on record. The investigation of complaints is partly carried out to provide proper satisfaction and redress for people who have individual grievances. But, in addition, in many organisations— certainly in well-run commercial organisations— the logging and subsequent analysis of complaints is used to identify patterns of things going wrong in terms of where problems are located, which departments are slipping up and whether a particular procedure appears to be leading to problems. The non-publication of the reports inhibits the proper practice within departments of looking at all the reports to see whether patterns can be discerned so that steps can be taken to prevent problems from arising.
  Sir Antony Buck: The hon. Gentleman has raised an interesting point. Does he agree, however, that any report can be published? The report goes to the Member of Parliament, who, with the agreement of his constituent, can publish it. A summary of the departments involved is included in the various reports made by the Parliamentary Commissioner for Administration. One can keep tabs on the number of complaints made against any particular Department, which enables the Committee, of which I have the privilege to be Chairman, to keep tabs on the situation and see what the most sensitive matters are.
  Mr. Dobson: I accept the latter point made by the distinguished Chairman of the Select Committee that summaries are available, but it would be better if the whole reports were available. No one will have the opportunity
  1060
  to analyse and discern any patterns or recurrent behaviour, just because individual Members of Parliament may publish the reports that they receive.
  If there is anything secretive about the PCA's office, the Health Service Commissioner's office is much worse. Sometimes we have to assume that the office must be doing good by stealth. Although I welcome the proposal in the Bill that in future the Health Service Commissioner should disclose reports to Members of Parliament when they have been involved in the submission of a complaint against the Health Service, I think that the practice in the local ombudsman's office— in line with the Local Government Act 1974— would be well applied to the Health Service.
  When the local ombudsman issues a report about something that has happened in a local authority, the authority is obliged to make that report available to the public and advertise in local newspapers that it is available to the public. That obligation should be placed on the health authorities, because it is possible now for a report to be made on a health authority, and for no one other than a limited number of members of the authority, or even officers of the authority, to know that a complant has been received, examined and reported on. It would be to everyone's advantage if those reports were to be published.
  There are wider criticisms of the complaints machinery within the National Health Service that are not the responsibility of the Select Committee or the Health Service Commissioner. Anybody faced with a complaint about aspects of their health treatment practically needs legal advice to know where to register their complaint.
  The family practitioner committees are not subject to the jurisdiction of the Health Service Commissioner. The service committees of the family practitioner committees are a more confusing group of bodies than the family practitioner committees. People may complain to the General Medical Council, to the district health authority or to the Health Service Commissioner, but, if it is a complaint about clinical matters, the commissioner cannot entertain that complaint—there is the further possibility of taking legal action against a health authority.
  Despite the fact that I represent the inhabitants of Gray's Inn and Lincoln's Inn, the last thing that I want to develop in the Health Service is more litigation, which would be expensive and harmful and stifle the spread of medical knowledge. If people think that their honest thoughts may be pursued by someone in the courts, they are less likely to tell their professional colleagues, either by learned papers or in a conference, the reiason that X and Y went wrong during a fatal or damaging operation.
  All Health Service staff, especially the, doctors, should support the wide scope of the Health Service Commissioner in relation to their activities. Family practitioner committees provide 90 per cent of the service provided by the National Health Service to people in Britain. The Health Service Commissioner might be described as Mr. Ten Per Cent., because he can investigate only about 10 per cent. of the complaints of the activities of the National Health Service. That is fundamentally unsound, it would be sound to extend his jurisdiction over family practitioner committees.
  The Labour party believes that the Health Service Commissioner's scope should be extended to cover clinical matters; not to challenge clinical judgment— although that is increasingly happening in the courts at great

  1061
  expense—but so that no one can hide behind the claim that some maladministration within his part of the Health Service was the exercise of clinical judgment.
  The Health Service Commissioner before last explained that his office would be capable of carrying out investigations involving clinical aspects of health care, that that would be subject to safeguards and that it would be necessary from time to time to call on expert advice. He said, properly, that he could explain what could be done and that it was up to the likes of us— Members of Parliament— to decide what should be done. Labour Members think that the Health Service Commissioner's activities should be extended to include matters of clinical judgment.
  The Labour party believes that the Health Service Commissioner should be able to initiate investigations in some circumstances when no specific complaint has been received and when a matter is brought to the commissioner's attention which suggests to him that it is of significant public importance and that there is a likelihood of maladministration and injustice having occurred but no formal complaint has been received. That would be a useful, sensible development. The various propositions which I have put forward in favour of extending the Health Service Commissioner's jurisdiction in various ways—many of which have been counselled by people who gave evidence to the Select Committee and few of which, if any, have been rejected by the Committee—would be in the interests not just of patients but of professional staff, I believe, if only because of my general fear of the gradual development of harmful litigation in the Health Service.
  I turn to John Milton's statement about complaints:
  "when complaints are freely heard, deeply considered, and speedily reformed, then is the utmost bound of civil liberty attained".
  That is true. We need systems that are open and make complaining easy. We need to make people feel that they can draw attention to shortcomings. We need to make people confident that, when they think that something has gone wrong, it will be properly considered. We need to make people confident that, if injustice has been done to them, it will be remedied in so far as that is possible. I believe, even if I have been a little critical, that the offices of the various ombudsmen attempt to discharge that task. Any shortcomings in any of the offices spring not from those who work there but from our failure to give them the necessary powers to do the more extended tasks which would be an asset to us all.
  7.42 pm
  Sir Antony Buck: I am glad to follow the hon. Member for Holborn and St. Pancras (Mr. Dobson). I shall take up two points that he raised before I make my contribution on the generality of the measure.
  First, the hon. Gentleman talked of the possibility of clinical judgment being brought within the purview of the Health Service Commissioner. The Select Committee on the Parliamentary Commissioner for Administration, of which I have the honour to be Chairman, carefully considered that aspect. I have some sympathy with the hon. Gentleman's comments. The Select Committee recommended some years ago that the HSC should not be debarred if there was an element of clinical judgment.
  I am bound to say that from time to time the medical profession rather overstates its case. One case which came
  1062
  before the HSC and under our scrutiny involved an old lady of nearly 100 who was moved from hospital A to hospital B. My hon. Friend the Member for Eastbourne (Mr. Gow) was a distinguished member of that Select Committee and will remember the case well. Certain medical dramatis personae had the nerve to suggest that it was a matter of clinical judgment whether a person of nearly 100 should be moved from hospital A to hospital B at dead of night, when in fact a bed was available in hospital A and the lady need never have been moved. She died soon after. With the help of my hon. Friend the Member for Eastbourne, the Select Committee gave the medical authorities a fairly tough time.
  I have a certain sympathy, therefore, with the suggestion that the Parliamentary Commissioner should not automatically be debarred if there is an element of clinical judgment. When a case involves pure clinical judgment, it is probably a matter for the British Medical Association or the medical authorities. Because of the Select Committee's recommendations, the complaints system in the Health Service was altered. Internal investigations of one authority are now carried out by another authority. We shall have to wait a little to see whether the present system works properly. The Select Committee will wish to return to this subject a little later.
  Secondly, the hon. Member for Holborn and St. Pancras said that the Parliamentary Commissioner should be able to investigate of his own accord, and I have a certain sympathy with that view. I submit that there is a way to get over the difficulty. I have said to successive ombudsmen that if, during an investigation, a matter causes them difficulty and they are worried about it, they could well have a word with me as Chairman of the Select Committee or with one of the distinguished Opposition Members who serve on it and we may instigate an investigation.
  I suggest that the Bill's proposals are an appropriate amendment to the ombudsman system. This system was created by the Parliamentary Commissioner Act 1967 and is something of a success story. The Bill reveals the way in which we are prepared to take institutions that have their roots in other countries and adopt and utilise them within our constitution so that our constituents are better served.
  I served on the Standing Committee on the legislation that set up the ombudsmen system. At that time the objection was aired that the creation of the ombudsmen system might detract from the position of Members of Parliament. More than one of the foreign witnesses who gave evidence at our Select Committee's later investigation pointed out that every Member of Parliament is, according to some international definition, an ombudsman because Members of Parliament take up cases. The Committee, in preparing its report after the system had been in existence for 10 years, found that about 10,000 constituency cases a year were taken up by Members of Parliament with various Government Departments. Perhaps my right hon. Friend the Minister will give us the updated figures. Every Member of Parliament is, by some international definition, an ombudsman, and long may that continue.
  The creation of the ombudsman system has put a further bolt in the armoury of Members of Parliament to look after our constituents. A typical case for a Member of Parliament at our surgeries and advice bureaux involves pensions. Mr. X, a constituent, thinks that he is not getting as much as Mr. Y down the road, so he goes to the local

  1063
  pensions office. He sees a clerk, who may have had a tough morning and who tries to explain as well as he is able, but does not get over to Mr. X, the significance of the difference between the pensions. The constituent goes away dissatisfied. The constituent then comes to see a Member of Parliament and as far as I am concerned I may well not know the answer off the cuff because, like Randolph Churchill, every time I see a decimal point I think of "those damned dots." I am therefore unlikely to be able to solve the problem, but I will take it up with the local office, and in the vast majority of cases it will then be resolved to my satisfaction and that of the constituent. If I can understand it, the constituent will certainly be able to do so.
  Once in a while, however, one takes up a case with the local office and finds that things have not gone properly and it seems that there is something of a cover-up mechanism. Before the creation of the ombudsman one would have taken it up with the Minister, but now it can be referred to the ombudsman and he can, and does, do that which we cannot do and cannot even force Ministers to do. He can go through the books with a fine-toothed comb and report to the Member of Parliament, and thus the matter is resolved to the satisfaction of the Member of Parliament and of the constituent.
  Mr. J. F. Pawsey rose—
  Sir Antony Buck: I am glad to give way to my hon. Friend, who does such excellent service on our Select Committee.
  Mr. Pawsey: On the point about Members of Parliament acting as ombudsmen, does my hon. and learned Friend agree that any move towards proportional representation would much reduce the link between the individual Member of Parliament and his constituents? Does he therefore agree that any move in that direction would be entirely reprehensible?
  Sir Antony Buck: That rather widens the scope of the discussion, but I have always thought that one of the principal arguments against proportional representation is the abolition, which almost inevitably takes place, of the individual, personalised constituency Member of Parliament, whereby an elector knows who his Member of Parliament is and can go and see him, so I think that that is a valid point. However, as we must deal with these things even-handedly, it is interesting to note that if one did away with the constituency Member of Parliament one would probably have to extend the ombudsman system vastly. A country which has got absolutely perfect PR on paper is Israel, and when one talked to Mr. Nebenzahl, who used to be the doyen of ombudsmen, one found that ombudsman rule had almost been substituted for Member of Parliament rule. Devoted as I am to the ombudsman system, I think that it is the job of the elected representatives, not to rule, but certainly to supervise government and be responsible for it.
  I am obliged to my hon. Friend for his intervention, although it has taken me farther away from the terms of the Bill than I had intended.
  One of the recommendations that we made as a Select Committee which has not been accepted is that there should be a regular annual debate in the House on the
  1064
  work of the Parliamentary Commissioner. Because of my having been lucky in the draw for private Members' notices of motion we have from time to time been able to subject the ombudsman system to parliamentary scrutiny, but I urge the Government to look again at that recommendation, which is on the periphery of the matters which are before us now.
  If the ombudsman system is, as I have said, a success story, it is because of the way in which it has been framed and also—this gives me an opportunity to pay a tribute to them— because of the skill and total integrity and efficiency of successive ombudsmen. The first ombudsman, Sir Edmund Compton, was an interesting appointment. He did a superb job, for which one must commend him, because he laid down the guidelines at the creation of the office. That was an admirable appointment, because his last job as a civil servant had been that of Comptroller and Auditor General, so he had ended his life as a civil servant. He is full of life still, I am glad to say, and is especially concerned with musical matters. He is a man of great distinction, and he laid down the ground rules for the ombudsman and laid a firm foundation. He ended his Civil Service career as a quasi-civil servant, and the importance of that will be seen by the House in a moment.
  Then came Sir Alan Marre, Sir Idwal Pugh, Sir Cecil Clothier and Mr. Barrowclough. It is interesting that Cecil Clothier, who now does such an important job with the Police Complaints Authority, was the first ombudsman not to have been a civil servant. The Government over-reacted at an earlier stage to the recommendation of the Select Committee that the ombudsman should not always be a former civil servant, on the basis that justice must not only be done, but must be seen to be done. While it is true that former civil servants are probably more harsh on those who fall below the high standards they set than an outsider would be, nevertheless it does not seem appropriate for the ombudsman always to be a former civil servant. The Government agreed and said that the next ombudsman would not be a civil servant, and this was an over-reaction, because if there had been someone like Sir Edmund Compton it might have been appropriate for him to be appointed. But since then we have had those who have not been civil servants and have given very distinguished service as parliamentary commissioners—Sir Idwal Pugh, followed by Sir Cecil Clothier and now Mr. Anthony Barrowclough, who upholds well the high traditions of the office.
  I wish to commend the provisions of the Bill because they result, as far as I am able to see, directly from the Committee's fourth report and the Government's response to it. I commend my right hon. Friend the Minister of State for having taken note of those recommendations, given effect to them in good measure and, indeed, put some additional bodies within the purview of the parliamentary commissioner. As far as I am able to ascertain with the help of the distinguished Clerk, with whom I went through it with some care, there are now included the Charities Commission, the Commission for the New Towns, the new town development corporations and the urban development corporations. It seems to me that it is good that they should be included, but some non-departmental public bodies which the Select Committee suggested be included have not been so included. Why some of our recommendations have not been accepted could appropriately be dealt with from the Front Bench.

  1065
  I am particularly glad that one matter is cleared up by the Bill, namely, that of the ability of the commissioner to send the reports of the Health Service Commissioner to Members of Parliament who have been involved in the cases brought before him. It is quite clear that in dealing with Government Departments there is the parliamentary filter, because the reports have to come through a Member of Parliament. So it is clear beyond peradventure that the Member of Parliament sees the reports.
  With regard to the Health Service Commissioner, the conduit is different. It was not clear whether the Health Service Commissioner would have been entitled to absolute privilege had he sent the reports to Members of Parliament. I thought it might have been appropriate for the Health Service Commissioner to take the risk because he would undoubtedly have been entitled to qualified privilege and it would have been difficult for any litigant to prove malice, which would have been necessary to displace unqualified privilege. But this lacuna is now filled and, in accordance with the recommendations of the Committee, this has now been included within the ambit of the Parliamentary Commissioner for Administration. I hope very much that this will go through without difficulty, and I am pretty confident that it will.
  I hope that the Minister, in winding up, will give his prognostication as to what additional staff may be necessary for the commissioner and whether it will be recommended that, again, some of the staff should not always be former civil servants. There have been occasions on which there have been secondments not from the Civil Service to the Parliamentary Commissioner and the Health Service Commissioner and it may well be appropriate for that to be extended. There is no doubt that those who are seconded from the Civil Service to serve in the ombudsman's office are especially keen to ensure that the highest standards are maintained by their fellows. There is none more jealous of the efficiency of the Civil Service than a civil servant. None the less, it may be appropriate that there should be a greater number seconded from outside the Civil Service on the basis that justice must not only be done, but be seen to be done.
  I commend this important measure to the House and I congratulate the Government on bringing it forward. I am glad that they have responded to the Select Committee's requests and that in some instances they have gone slightly further than its recommendations.
  8 pm
  Mr. Alex Carlile: In an interesting diversion a few minutes ago the hon. Member for Rugby and Kenilworth (Mr. Pawsey) offered us the opportunity to extend the debate beyond the immediate scope of the Bill. The House will be relieved to hear that I do not propose to take advantage of that offered extension; save to say that if we examine the effectiveness of ombudsmen in countries where there is the single transferable vote system of proportional representation, it is clear that they are functioning well. Having said that, I shall address myself to the body of the Bill.
  I have the privilege of being the most recent recruit to the Select Committee on the Parliamentary Commissioner for Administration, of which the hon. and learned Member for Colchester (Sir A. Buck) is a distinguished chairman. I have the advantage of the fresh interest of being a member of the Committee; and the great advantage of being refreshed, and surprisingly so, by
  1066
  realising how effective the Parliamentary Commissioner for Administration and the Health Service Commissioner is, as is the Select Committee. As one health authority chairman discovered fairly recently, anyone who falls foul of the criticism of the Commissioner and decides not to accept his recommendations or views does so at his peril. He is dealt with toughly and even roughly by the Select Committee, and rightly so. The fact that the Select Committee is so robust adds power to the undoubted effectiveness and efficacy of the commissioner.
  I do not agree with the comments of the hon. Member for Holborn and St. Pancras (Mr. Dobson), whom perhaps I should call the hon Member for Gray's Inn, my own inn, and Lincoln's Inn, that the secondment of civil servants is worthy of criticism. My experience in legal practice is that the gamekeepers who become poachers are the most effective poachers, and vice versa. I have found over the years that former superintendents of police who decide in their retirement to become solicitors' clerks are the most assiduous of instructing solicitors on behalf of the defence. Indeed, they often turn up many possible lines of defence that others would not have imagined possible. The use of seconded civil servants, but not exclusively, as staff for the commissioner is an advantage.
  Mr. Dobson: Will the hon. and learned Gentleman accept that his simile is not quite accurate? Ex-chief superintendents do not intend usually to return to the police force.
  Mr. Carlile: I do not believe that there is a jot of evidence to suggest that any of the seconded civil servants are anything other than entirely objective in what they do. I reject any criticism on that score. Having taken the trouble to read the Select Committee's reports and the commissioners' reports for some years before I became a member of the Select Committee, I know that there is no evidence to justify the hon. Gentleman's criticism.
  I welcome the Bill because it extends the scope of the commissioner, and I congratulate the Government on introducing it. I would be happier if the commissioner were able to institute inquiries and investigations of his own accord, and it is interesting to note that the previous commissioner, Sir Cecil Clothier—Sir Cecil is now the chairman of the Police Complaints Authority, and its first chairman— has the power in his new capacity to institute investigations without anyone asking him to do so. There is no evidence so far that that power has put him, the police or the public at any disadvantage. It is a longstop power that should be made available to someone of great distinction who is exercising an important role, such as that of the commissioner.
  There are some oddities in the schedule and I draw them to the Minister's attention in the hope that at some stage it can be reconsidered. There are certain illogicalities: An example which affects my constituency is that whereas the Development Board for Rural Wales is included among the organisations about which complaints can be made to the commissioner, the Welsh Development Agency is not. It may have escaped the attention of the draftsman of the Bill that in my area the development board carries out almost all the functions of the WDA. In a sense, my constituents will be at an advantage compared with those who live in areas that are not under the aegis of the development board and who merely come under that of the WDA. It seems that there is no logic in that distinction.

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  I am disappointed that the Civil Aviation Authority is not included in the schedule. There are many occasions when members of the public have reason to complain to Members about matters which fall within the authority's jurisdiction. I have in mind especially problems caused by aircraft noise and the timetabling of flights into civil airports. In my constituency of Montgomery there is not an international airport as yet, though I am reliably informed that a small airport is shortly to be built in Caersws. That being so, I may be faced with such complaints in due course. I know that many hon. Members receive complaints about matters which concern the CAA and it is disappointing that they cannot be brought to the commissioner's attention.
  It is a matter of great disappointment to me that the Monopolies and Mergers Commission will not be open to the commissioner's scrutiny. The Select Committee recommended that the commission should be subject to it. In its response to the Select Committee the Government considered that the commissioner's
  " jurisdiction … should be extended to certain executive non-departmental public bodies".
  These would satisfy two criteria. One of the two inclusive criteria was that the body concerned should have
  "executive or administrative functions which directly affect individual citizens or groups of citizens (including companies) and which would be within the PCA's jurisdiction if carried out by a government department".
  The second criterion is that there should be
  "some degree of ultimate Ministerial accountability to Parliament".
  In recent weeks and months great controversy has been raging in the House about matters concerning the Monopolies and Mergers Commission. It is of course fair to point out that controversy concerned ministerial decisions rather than the activities of the Commission. However, one can envisage many different circumstances in which the conclusions of that Commission and, more important, the way in which those conclusions are reached may be questioned. There are few remedies available. It is extremely difficult to obtain a judicial review of the way in which the Commission has reached its conclusions. I hope that early consideration will take place as to whether the Parliamentary Commissioners may scrutinise the Monopolies and Mergers Commission.
  I do not want to sound grudging in relation to this Bill, which is highly commendable. I am glad to be a member of the Select Committee that will have a wider range of interesting subjects to consider and face a greater challenge in terms of dealing with recalcitrant persons from a broader public body.
  8.10 pm
  Mr. Ian Gow: Twenty years ago, when you, Mr. Deputy Speaker, were in the House and I was not, the Parliamentary Commissioner Bill received Royal Assent. I must confess that if I had been in the House at that time I would have voted against the Bill. However, 10 years ago I had the good fortune to serve as a member of a Select Committee under the chairmanship of my hon. and learned Friend the Member for Colchester, North (Sir A. Buck). It was during that time, as a member of that Committee, that I began to understand the worth and value of the Parliamentary Commissioner Act 1967.
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  I entirely agreed with my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) when he stressed the importance of the relationship between a constituent and his Member of Parliament. Of most notable importance is the fact that the constituent may say, "That is my Member of Parliament; that is the person who will champion me." I do not want to be led astray, but I wanted to say to my hon. Friend that I entirely agreed with his recommendation.
  However diligent a Member of Parliament may be in championing the interests of a constituent, the ombudsman— whether the Parliamentary or Health Service ombudsman—is able to bring added resources to bear when championing the case of a constituent who has suffered injustice as a result of maladministration. Therefore, I am very pleased that the Government have decided to extend the scope of the Parliamentary and Health Service Commissioner.
  I congratulate my right hon. Friend on the way in which he introduced the Bill. I hope that it will have a speedy passage because I believe that it will give additional protection and safeguards to constituents who have suffered injustice as a result of maladministration. I also pay tribute to the work done by my hon. and learned Friend the Member for Colchester, North and his Committee.
  The hon. and learned Member for Montgomery (Mr. Carlile)— whose serried ranks are beside him— mentioned that there were some omissions from the schedule. Before I suggest one or two deletions, I would ask my right hon. Friend to consider a further omission which should be remedied. Will he consider adding to the list the Boundary Commission?
  Some hon. Members, including Members of the Labour party. believe that their constituents have suffered an injustice at the hands of the boundary commissioners. Though the boundary commissioners are distinguished, in many cases they are driven by an passion for drawing lines on a map and are ignorant about the true nature of the communities that the constituencies are designed to serve. A passion for equality and for lines on a map has disfigured and discredited much of the work of the boundary commissioners.
  Mr. Dobson: I appreciate the concept about injustice. Would such injustice be remedied by a change in boundaries or the dismissal of the Member of Parliament who had been elected on the basis of those boundaries?
  Mr. Gow: I believe that when the boundary commissioners make recommendations the Parliamentary Commissioner for Administration should conduct an inquiry—mercifully a speedy one—to discover whether the recommendations of the Boundary Commission are reasonable.
  Mr. Soames rose—
  Mr. Gow: I will gladly give way to my hon. Friend the Member for Crawley—not Horsham and Crawley but Crawley alone.
  Mr. Soames: My hon. Friend will remember the long-running saga of Bewbush when, last year, the Boundary Commission changed my division of Crawley. There was a good deal of local discussion on whether the change rendered by the Boundary Commission was fair to me. The change was fair for the people who came into my

  1069
  division but was unfair to me because of the nature of the people who live in the Bewbush ward—they are more likely to be associates of the Labour party. My hon. Friend should speculate on whether it would have been possible for me to make a complaint through the commissioner in respect of the boundary changes? In fact, that avenue was effectively blocked off. If I were a deer forest owner, I could complain to the Red Deer Commission.
  Mr. Gow: My hon. Friend is correct. The Red Deer Commission is included in the Bill. It would be possible for my hon. Friend, as a citizen, to complain to the Parliamentary Commissioner if he thought that he had suffered an injustice as a result of the maladministration of the Red Deer Commission. Any citizen, including a Member of Parliament, can complain through his Member of Parliament—he could complain to himself—to the Parliamentary Commissioner of Administration if he has suffered an injustice. A Member of Parliament is not excluded from making an application to the Parliamentary Commissioner, through his own Member of Parliament, if he believes he has suffered an injustice.
  I believe that if the people of this country have suffered injustices as a result of the decision of the boundary commissioners because they have to make long journeys to see their Member of Parliament, that is because of the passion for equality and parity that seems to be one of the characteristics of the boundary commissioners. This is one suggestion for a extra body in the public sector that could be included in the Bill. I hope that my right hon. and learned Friend will address himself to that.
  In the Chamber is my hon. Friend the Member for Gedling (Sir P. Holland). He is a good illustration of what the Boundary Commission has done. His constituency had a distinguished name— Carlton— but it has been changed to a gelding—
  Mr. Allan Rogers: Gedling.
  Mr. Gow: I deliberately substituted the "1" for the "d". That illustrates why the Boundary Commission should be brought within the scope of the Bill.
  Has my right hon. Friend included too many bodies in the Bill? You. Mr. Deputy Speaker, are better than I am at mathematics. I tried to add up the number of bodies in schedule 2 and I am sure that the hon. and learned Member for Montgomery will correct me if I am wrong—and I counted 105. My hon. Friend the Member for Gedling has been most assiduous in attacking quangos and I am sure that he shares my hope that before the Bill completes its passage in another place the Government, inspired by my hon. Friend, will have disposed of some of the bodies.
  I want to leave one thought in my right hon. Friend's mind—
  Sir Philip Holland: While I applaud my hon. Friend's plea for the abolition of more quangos, I nevertheless strongly approve of tighter control being exercised.
  Mr. Gow: My hon. Friend and I are in total accord.
  I want to leave one thought in my right hon. Friend's mind. What heroic purpose is served by the Co-operative Development Agency? My right hon. Friend may say that it is a sterling body applauded by the Opposition. Is the Crafts Council essential to the progress of mankind? Does the Crofters Commission render signal service to the
  1070
  human story—[HON. MEMBERS: "No."] I have received my answer from Opposition Members. What useful purpose is served by the Central Bureau for Educational Visits and Exchanges? Could we not privatise that body? Opposition Members are nodding in agreement. Do the folk come from Venezuela, Ecuador or San Salvador—Latin American countries well known to my hon. Friend the Member for Watford (Mr. Garel-Jones)? Does the British Film Institute have to be in the public sector? I argue in favour of privatisation, a cause dear to the heart of my hon. Friend—not the Member for gelding, but for Gedling.
  What useful purpose is served by the Economic and Social Research Council? I put that question especially to my hon. and learned Friend the Member for Colchester, North who is Chairman of the Select Committee. Does that body have to be in the public sector? My hon. Friend the Minister with responsibility for sport is not in his place, but page 9 of the Bill lists the Sports Council, the Scottish Sports Council and the Sports Council for Wales. What happens to the poor people in Northern Ireland? Why do they not have a sports council?
  I commend my right hon. Friend the Minister to make a diligent study of those bodies. It is not that I want them to be excluded from the range of inquiry by the Parliamentary Commissioner for Administration, but I wonder whether some of them might be privatised and some of them abolished before the Bill reaches the statute book.
  I repeat my warm welcome for the Bill, I repeat my conversion to the cause of the Parliamentary Commissioner, I repeat my tribute to my hon. and learned Friend the Member for Colchester, North, and I hope that the Bill, subject to the changes that I have suggested, will soon reach the statute book.
  8.24 pm
  Mr. Frank Haynes: I shall be brief because of the time factor and the number of hon. Members who wish to speak. It is a great pleasure to serve on the Select Committee. It is a worthwhile Committee, which I believe to be the best Select Committee because of its membership and its work in overseeing the whole of the administration of Departments.
  I wish to associate myself with the remarks about previous commissioners. I was lucky enough to be apponted to the Select Committee when I first came to the House, when Sir Cecil Clothier was doing a marvellous job on behalf of the people whom we represent. When Sir Cecil left, I welcomed the appointment of Mr. Barrowclough, who also did a first-class job.
  We must not overlook the service to the Committee of its Clerks. We must cover the whole spectrum because we had good Clerks in the past and we have a first-class Clerk now. The Clerk does a really good job and gets stuck into the work so that hon. Members have the information that they require.
  I listened carefully to the hon. Member for Eastbourne (Mr. Gow) when he recommended that the Minister should look at the long list of bodies with a view to excluding some of them. However, the hon. Gentleman also suggested that the Boundary Commission should be included. I know that Conservative Members want to include other bodies. I discovered that from the hon. member for Rugby— I think it is Rugby— after the Select Committee meeting yesterday—
  Mr. Pawsey rose—
  Mr. Haynes: I am not encouraging the hon. Gentleman to intervene.
  Mr. Pawsey: I do not really need any encouragement. My constituency is Rugby and Kenilworth— a point that I had intended to make to my hon. Friend the Member for Eastbourne (Mr. Gow). If I am fortunate enough to catch your eye, Mr. Deputy Speaker, I shall elaborate on that later.
  Mr. Haynes: I am obliged to the hon. Gentleman for that information. I am worried about the extension of the activities of the Parliamentary and Health Service Commissioners. That has worried me ever since I became a member of the Select Committee because although it is easy to pile work on to a Department, if the manpower to deal with it is not available the whole process will slow down. Indeed, that has been a complaint in the past.
  I am keeping my remarks brief because the Bill will now go into Committee. I am sure that I am the first to be able to say that I will serve on that Committee. That is almost a certainty. I look foward to the Committee's debate on the Bill.
  The present and previous Parliamentary Commissioners have not been afraid to speak their minds, and neither have hon. Members been afraid to do so. When it is necessary, it must be done—whether or not that upsets people. Even if it involves high-ranking professionals, it does not make any difference. I remember when the Select Committee summoned the chairman of the Board of Inland Revenue to appear before it. He had a rough ride. He did not like coming before the Committee, and he will not like doing so again. However, the job had to be done, and the Parliamentary Commissioner and hon. Members made sure that it was done.
  I look forward to the Committee stage and am sure that we shall have a first-class debate. I hope that when the Bill reaches the statute book it will be satisfactory, not only to hon. Members, but to the people whom we represent.
  I agree that we should discuss the Department and reports on it more often in the House. That would give us the opportunity to speak about the people who serve us as Members. It is right and proper that the House should know about the first-class service that we received in that Committee.
  8.30 pm
  Mr. Warren Hawksley: I do not intend to delay the House, but I should like to welcome the Bill and especially the extension to the list of the bodies that the parliamentary ombudsman can investigate. I begin by admitting a slight reservation about the effectiveness of commissioners or ombudsmen, whether local, parliamentary or health ombudsmen. The famous man on the Clapham omnibus may expect to find that he has a case of maladministration against a public body, but often when the commissioners investigate it they do not necessarily seem to follow the logical conclusion, as it would appear to that average person. In some cases, where partial success is achieved by the Commissioners the public body involved does not necessarily respond with quite the enthusiasm that our constituents would wish.
  Before and since the Government's White Paper, Cmnd. 9563, which was published in July 1985, I have argued strongly for the inclusion of the new town
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  corporations and especially for the one in my constituency of Telford, in the list of public bodies that the ombudsman can investigate. I was slightly worried by the reply to a written question that I put down on 4 December 1985, column 268. The Under-Secretary of State for the Environment said that legislation would be introduced, in due course, to bring the new town corporations under the control of the parliamentary ombudsman. Therefore, I congratulate the Government and my right hon. Friend for bringing forward this legislation and for making sure that the phrase "in due course", which put fear in my mind, means the next parliamentary Session.
  There is a strong need for new towns to have an appeal body to which constituents can go if they consider that there has been maladministration by the corporation. I hope that schedule 2, which talks about a
  "Commission for the New Towns,"
  means the commission for each individual new town. I believe that it does. I gathered from previous answers that Ministers have given me that that was their intention.
  In a constituency such as mine, if maladministration is committed by the Wrekin district council, the constituent has the right of appeal to the local government ombudsman. However, if the Telford development corporation, commits that maladministration, my constituents have no such rights. I hope that I shall receive assurances that they will have that right once the Bill is on the statute book.
  I am not especially critical of the Telford development corporation. I do not believe that it is any worse, or any better, than the district council. However, it is important that we should clarify the rights that constituents have when they take appeals further than the corporation itself.
  I should like to ask the Minister two questions, to which I know that my constituents would like to know the answers. First, if the Bill receives a speedy passage through both Houses—we all hope that it will—when does the Minister expect that it will be effective? Will it cover any maladministration that could be going on now but about which my constituents may not he aware, but which could become apparent to them later, although the date of the maladministration could be before the passing of the Bill?
  My second question concerns page 10 of the Bill and the issues raised in the notes. Note 7 states:
  "In the case of the Commission for the New Towns, a development corporation for a new town, or the Development Board for Rural Wales, no investigation shall be conducted under this Act in respect of any action in connection with functions in relation to housing."
  Why has housing been excluded? It would have been desirable to include it despite the fact that one appreciates that new town housing will go to other bodies in due course. That may not happen for one or two years, but if that is the reason, I should hope that consideration could be given to the inclusion of housing as one of the areas that the ombudsman might consider. I should like to reiterate my full support for the Bill and my belief that it is a move in the right direction. I hope, and believe, that it will receive not only all-party support but a speedy progress through both Houses.
  8.36 pm
  Mr. Michael McNair-Wilson: I did not have the opportunity to serve on the Select Committee, and to that extent I am at a disadvantage compared to other hon. Members who are in the Chamber.

  1073
  Perhaps my right hon. Friend the Minister will forgive me if I begin by asking him why the Health Service Commissioners for Scotland, England and Wales are referred to in the Bill, but no reference is made to Northern Ireland? Is that because, under the heading "Northern Ireland Office" which appears in a schedule, the Northern Ireland Health Service is subsumed into that title, or will a separate body cover Northern Ireland? If so, will the changes in the Bill be incorporated into that Bill and will it soon be brought before the House so that Northern Ireland can be put on the same terms as the rest of the United Kingdom?
  I should like to concentrate my remarks purely on the Health Service Commissioner. I do so although I am aware that the Health Service Commissioner and the Parliamentary Commissioner for Administration are, in fact, one and the same person.
  Secondly, clause 2 enables the Crown to part with the services of the Parliamentary Commissioner and the Health Service Commissioner for medical reasons, presumably on the grounds of physical or mental incapacity. How will that action be taken? Who will decide whether the Parliamentary Commissioner is no longer mentally or physically able to do his job? In other words, who appoints him and withdraws from him his right to do that job? What appeals procedure will exist for him? It would be a rather curious situation if the ombudsman required an ombudsman of his own to protect his rights. As I can find nothing in the Bill to cover that point, I should like to know whether he could appeal if he disagreed with the judgment about his physical or mental condition. The clause refers to the monarch making that decision. However, I cannot help feeling that it is unlikely that Her Majesty would make that decision, and I should be pleased to know whose responsibility that will be.
  I welcome the contents of clause 3. It seems absolutely right that a Member of Parliament who has taken a complaint on behalf of a constituent to the Health Service Commissioner should be informed of the commissioner's findings, as is the case with the Parliamentary Commissioner. That seems a long overdue reform.
  The question on this clause to which I should like to direct my remarks relates to the role of the Health Service Commissioner. What exactly is he doing, what can he do, and is he fulfilling an especially useful role? To that extent I want to follow the remarks of the hon. Member for Holborn and St. Pancras (Mr. Dobson), with whose comments I am broadly in agreement.
  In the Health Service Commissioner's annual report about his activities there are certain figures that are surprising, if not worrying, bearing in mind that in 1984–85 there were no fewer than 9,000 written complaints relating to the Health Service. Assuming that in 1985–86 there were the same number of complaints, of those 9,000 written complaints only 926, or 10 per cent., were directed to the Health Service Commissioner. Of those 926 complaints, 454 were rejected, 273 were referred back or closed and the Health Service Commissioner issued reports on only 137. That is a minute number of complaints for such a powerful body to have investigated, dare one say it, at a high cost to taxpayers. Of those 137 reports, 50 per cent. related to grievances about nursing.
  We talk about maladministration being the touchstone on which we decide whether or not the ombudsman has a role, but I wonder whether grievances about nursing can fairly be described as maladministration. Moreover—I
  1074
  must ask the House to forgive me if I refer to myself—as a result of the Hospital Complaints Procedure Act 1985, my private Member's Bill, I wonder whether those complaints will go to the ombudsman.
  I introduced the Bill because no discernible stress was laid on complaints procedures such as may have existed in hospitals where I was a patient for over eight months. But now, as a result of that Act, every hospital has a statutory duty to produce a complaints procedure and to make it known by leaflet to every patient. In those terms it seems that the 50 per cent. of cases relating to grievances about nursing which the ombudsman considered are not in future likely to go his way. As my hon. Friend the Member for Derbyshire, South (Mrs. Currie) said when she was in charge of Lords' amendments to my Bill:
  "Over time, as the health authorities obey the instructions set out in clause 1 and introduce a complaints procedure and tell people about it, the ombudsman may be unable to take up cases because the Secretary of State and the health authorities have pre-empted him."—[Official Report, 5 July 1985; Vol. 82, c. 641.]
  In other words the ombudsman may soon find that he does not have a genuine role as a Health Service Commissioner. If that is the case—I hope that the Government will consider this matter with care—is it not reasonable to suggest that perhaps a new role should be found for the Health Service Commissioner which might make his work more valuable than it appears it will be in the future?
  From those figures it appears that the ombudsman has been involved in only 10 per cent. of the complaints that arose in the Health Service in a particular year, and that of those complaints or issued reports he looked at only 1 per cent. Therefore, the idea that he stands as some bastion for the patients or those who suffer from maladministration in the Health Service is far-fetched, to say the least. Yet there is a genuine need for a complaints procedure over and above the Hospital Complaints Procedure Act. At present that job is being done by Action for Victims of Medical Accidents, which looks at thousands of complaints that are brought to its notice by ordinary people who have found themselves unable to get an explanation from their local hospital or regional health authority about the circumstances in which either they or members of their family have found themselves disadvantaged in hospital.
  It does not seem reasonable that a private body should consider such a large number of complaints when the Health Service Commissioner looks at such a tiny number. There is a mismatch somewhere. Either the work of the Health Service Commissioner is not properly understood, or his remit is drawn so narrowly that he cannot effectively provide a service which makes the NHS more sensitive to the problems of patients.
  Why are hospitals and regional health authorities so unwilling to come forward with evidence? It is because they fear that by doing so they may make themselves liable to prosecution. Therefore, as a patient put it effectively to me, they create a wall of silence around the incident that is being investigated. When a patient leaves hospital, he will find the greatest difficulty in breaking through that wall to discover the reality, although the reality may in itself be trivial and one which most of us would have said could be explained without difficulty. Every hon. Member present will have had constituents coming with problems, asking for an explanation and sometimes an apology, but

  1075
  finding the hospital or authority refusing to go beyond much more than an acknowledgement, for fear of giving grounds for liability.
  I must stress the point because as medicine becomes defensive medicine, as it is in the United States of America, we shall see a greater unwillingness by the medical profession to come forward openly and say what happened, for fear of litigation. There is a role for the Health Service Commissioner. I may be told that I am talking about clinical judgment, but I am not. Action for Victims of Medical Accidents states that 60 per cent. of the cases with which it deals are not seeking financial compensation. They are seeking an explanation and occasionally an apology but not money. If it can fulfil that role, where litigation and the desire for financial compensation are not involved, why on earth cannot the Health Service Commissioner follow that course and take up that burden? The organisation is a privately funded body which lacks funds, but it does a most worthwhile job. The Health Service Commissioner earns a large salary and is replete with a full staff, yet at present he is handling what can only be described as a piffling number of complaints. I strongly urge my right hon. Friend the Minister to consider in particular the role of the Health Service Commissioner, with a view to making his task more effective and worthwhile.
  I cannot end without saying that in the end we must move away from the concept of litigation for negligence in hospital cases. We should consider a no-faults compensation scheme. But I know that that is a different argument and outside the remit of the Bill.
  In giving the Bill a welcome, I do not believe that we have recognised adequately that the Health Service Commissioner's job may become decreasingly important unless we give it some new definition which could make it a much more valuable instrument than it is at present.
  8.50 pm
  Mr. J. F. Pawsey: I say to my hon. Friend the hon. Member for Newbury (Mr. McNair-Wilson) that I have listened, as have other Members of the Select Committee, to what he has had to say. I am sure that members of the Select Committee will consider the points that he raised.
  To my hon. Friend the Member for Eastbourne (Mr. Gow) I say that the boundary commissioners do not always get it wrong. In Warwickshire they certainly got it right when they discovered an affinity which was not too obvious at the time to everyone living in the county and they decided to conjoin Rugby with Kenilworth. The gentrification that has taken place since then has been entirely to my advantage.
  The hon. Member for Ashfield (Mr. Haynes) is a distinguished and robust member of the Select Committee, and I believe that he was entirely right to draw attention to the manpower implications of the Bill. I hope to deal with that. He believes that he will serve on the Standing Committee. I certainly hope that he will, and I look forward to joining him.
  I welcome the Bill. I congratulate the Government and my right hon. Friend the Minister on its introduction. I believe that it is particularly helpful and that it will do
  1076
  much to strengthen and improve the powers of the Parliamentary Commissioner. It is an indication of his worth that this measure has now been introduced.
  It might be helpful to look briefly at the office of Parliamentary Commissioner for Administration. It was first set up in 1967 on the Scandinavian model to investigate maladministration in government. That was closely followed by the Health Service Commission, which was established in 1973 to investigate maladministration in the National Health Service. I thought that the hon. Member for Holborn and St. Pancras (Mr. Dobson) was being a trifle defeatist and not his usual cheerful self when he referred to the slowness with which the Health Service Commissioner sometimes dealt with cases. I have to say to him—he need not take my word for it, but that of his hon. Friend the Member for Ashfield who is sitting beside him—that the Health Service Commissioner's job is not easy. It is his job thoroughly to investigate complaints, and that takes time. That is probably why the cases are not always dealt with as expeditiously as he would like. It is also fair to say—again this can be confirmed by the hon. Member for Ashfield—that a substantial amount of the work of the Select Committee is represented by the work load of the commissioner who deals with the NHS.
  In 1974 there was the creation of the third part of the Trinity, the Commissioner for Local Administration. I believe that the Bill is a further step towards providing citizens with much greater rights of redress against Government agencies. It is worth drawing the House's attention to the fact that there must be very few Select Committees which have had a report accepted almost in its entirety, as has happened in this case. That underlines, perhaps as nothing else can, the fact that the Parliamentary Commissioner discharges a most worthy function. As my hon. and learned Friend the Member for Colchester, North (Sir A. Buck), the Chairman of the Select Committee, said, it is a success story. He was right to use that phrase. Those of us who serve on the Select Committee believe that it is doing a most worthwhile job.
  The report and the Bill argue that the non-departmental public bodies— quangos— should be brought within the jurisdiction of the Parliamentary Commissioner. I entirely agree. I believe that there is a powerful case for giving Parliament, through the commissioner and the Select Committee, the option of receiving and redressing complaints about the activity of powerful bodies, which range from the Advisory, Conciliation and Arbitration Service to Oftel and from the Medical Research Council to the tourist boards.
  Many of the bodies listed in schedule 1 spend literally millions of pounds of taxpayers' money and their activities impinge on the lives of most, if not all, members of the public. Therefore, it is right that they should be subject to a complaints procedure. I believe, as other hon. Members clearly do, that no organisation can be all right, all the time. Therefore, complaints must be made from time to time. Where such a case exists, it will be examined in detail by the Parliamentary Commissioner.
  As my hon. and learned Friend the Member for Colchester, North said, nothing in the Bill prevents a Member of Parliament, if he so wishes, from actively pursuing a constituent's case directly with the body concerned. The Parliamentary Commissioner is an alternative route that can be followed and it does much to allow constituent's cases to be examined. It is important

  1077
  —this was touched on by the hon. Member for Ashfield— that the Parliamentary Commissioner has additional staff that will reflect the additional work load generated by the Bill. I am convinced that the House does not wish to see the office of the Parliamentary Commissioner brought into disrepute by inadequate staffing levels or by the long delays caused by too few people investigating too many cases. That was mentioned by the hon. Member for Holborn and St. Pancras.
  The fourth report of the Select Committee is interesting. On page VII, paragraph 9 it states:
  "while there may be procedures for appeal against formal decisions, these are not necessarily an adequate substitute for the investigation of administrative actions … Further, 'public bodies which exercise functions neither on behalf of the Crown nor on behalf of local authorities have been deliberately set up at arm's length from either.'"
  In an arm's-length operation, the public need specific protection and I believe that the PCA provides that.
  Paragraph 10 of the report states:
  "There should be no possibility of shelter behind technical 'non-departmental' status."
  It is because the quangos— non-departmental public bodies as they are referred to on the face of the Bill— are not directly answerable to Parliament, that I believe the PCA is necessary.
  Paragraph 14 of the report excludes nationalised industries. I have some reservations about that exclusion. I am certainly not satisfied that the consumer bodies set up to safeguard the interests of the public have the necessary sharp teeth to enable them to discharge their work in an entirely reasonable way. One has only to look at the difficulties that exist in trying to persuade British Rail to give details of the punctuality of trains to make a case in point. I am delighted that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) who has just taken his seat on the Opposition Front Bench, evidently agrees with me on that.
  I now come to the point made by the hon. Member for Ashfield. It seems that there is a case for the British Broadcasting Corporation to be included in the scope of the Bill. Clause 1(6) does not automatically exclude the corporation. I would very much appreciate the thoughts of my right hon. Friend the Minister when he winds up, for I would have thought that it would be helpful if the BBC was brought within the terms of the Bill.
  As I said at the outset, I welcome the Bill, but would like to see some additional measures, particularly as they apply to local authorities. Members of the Select Committee will know that from time to time local authorities have been before the Committee, and I found it unhelpful that in certain cases those local authorities had totally disregarded the findings of the commissioner. Even when the commissioner made further representations to those local authorities, such representations were still, and deliberately, ignored. I believe that the commissioner dealing with local authorities should possess more teeth than at present. I make that point to my right hon. Friend the Minister so that he may take it on board, if not for this Bill then for a future Bill. When local authorities ignore the ombudsman, they bring the office of the ombudsman into disrepute. That disrepute must spill over on to this House, because we are responsible for setting up the ombudsman. If we fail to ensure that he has adequate powers to ensure that his findings are met, we are not discharging our responsibilities properly.
  1078
  The ombudsman is a success within the closely defined limits which surround him. That point was made by my hon. Friend the Member for Newbury. I have considerable sympathy with the case that my hon. Friend argued and I hope that my right hon. Friend the Minister will consider that. We have hedged the ombudsman too closely, and perhaps we should be seeking to extend his general responsibilities. So often we find that matters are raised which one would have thought should be examined, yet the ombudsman states they are outside his specific terms of reference.
  Many cases are referred to the ombudsman, but not all are accepted. that is a classic variation of the theme "many are called, but few are chosen." That results in considerable dissatisfaction. The House could usefully consider two suggestions. First, the area in which the commissioner operates should be better and more effectively publicised. Secondly, greater publicity should be given to his existence, particularly in light of his new responsibilities. That point was referred to earlier.
  The Parliamentary Commissioner undertakes a most useful function. However, too often it is found that people are unaware of his existence or, if they are aware of his existence, they do not understand the specific area in which he operates. Therefore, it is important that a greater effort is made to publicise the office of the Commissioner. The public should be aware that there is a watchdog and that that watchdog is now operating on a slightly longer chain.
  I welcome clause 3, as other hon. Members have done tonight. It will allow copies of reports to be seen by the initiating Members. It is an entirely logical step for an hon. Member to see the end of the chapter that he has brought forward.
  I commend the Bill and hope that it will speedily be enacted and put on to the statute book to provide more protection for our constituents.
  9.1 pm
  Mr. Nicholas Brown: We all have our illusions shattered at some time and, having learnt during the course of the debate that the hon. Member for Crawley (Mr. Soames) does not own a deer forest, life seems somehow diminished.
  My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) quoted Milton. Milton also wrote that it is
  "better to reign in hell, than serve in heav'n."
  In responding to the debate for the Opposition, I want to say at once that the Bill's main purpose, as the Minister perfectly properly explained, is to extend the jurisdiction of the Parliamentary Commissioner for Administration to non-departmental public bodies or quangos. I am sure that that is worthwhile, but no doubt in Committee we will want to consider in more detail which bodies are to be included and which are not. Indeed, the Committee may want to debate what constitutes a non-departmental public body. In the Bill, the Government have adopted a criterion different from that of the Select Committee, as a number of hon. Members quite properly observed today.
  As I understand the Government's view, and the Minister may wish to respond to this point in his summation, they do not wish to extend the jurisdiction of the Parliamentary Commissioner for Administration to non-departmental public bodies which operate in a commercial or contractual manner. Why should bodies

  1079
  which operate in that way not be scrutinised by the ombudsman? The distinction is hard to maintain in practice and has no moral foundation in any possible theory. Is the Government's objection that there could not possibly be any wrongdoing in the commercial area, or is it that the tests of standards of behaviour which the ombudsman applies are somehow unsuited to the commercial world?
  There may be a fear in some quarters that if the principle was allowed for the public sector's commercial activities, sooner or later something similar will be applied to the private sector. Certainly, the retiring Parliamentary Commissioner, Sir Cecil Clothier to whom tribute has been paid in the debate, saw no reason why bodies that operate in a commercial or contractual manner should not be included in the ombudsman's area of responsibility. He said as much in his final annual report.
  I believe that the Government's distinctions are also difficult in practice. The hon. Member for Ashfield (Mr. Haynes) and the hon. and learned Member for Montgomery (Mr. Carlile) referred to that. The Government have departed from the Select Committee's recommendations by excluding the British Museum from the ombudsman's area of responsibility. However, they have included the British Library as an extra. They have excluded the Scottish and Welsh Development Agencies, but have specifically and additionally included the Co-operative Development Agency.
  What process of decision making lies behind the change to exempt the Monopolies and Mergers Commission, whose inclusion was recommended by the Select Committee, but has led to the inclusion of the Commission for Racial Equality and the Equal Opportunities Commission, whose inclusion was not suggested by the Select Committee? Does this not have more to do with political prejudice than any judgment of the issues of public administration?
  The hon. and learned Member for Colchester, North (Sir A. Buck) referred to the worrying issue of resources, and I support him in what he said. There is no point in an ombudsman if his office is so overworked that delays become another focus of public discontent to add to the grievance that took a complainant to the ombudsman's door in the first place. Although the resourcing of a parliamentary commissioner does not require further legislation, this is an important matter to which Mr. Barrowclough drew attention in his report for 1985–86. Parliament must be committed to resourcing the extra duties it places on the ombudsman. There is no point in doing anything less.
  Clause 2, which deals with medical incapacity of the commissioner, is not the subject of any controversy. However, on the Health Service Commissioner, the Bill is significant more for what it leaves out than for what it includes. Clause 5, which changes the time period for health authorities to raise matters with the ombudsman from three months to 12 months is not objectionable in itself but it is not a sweeping reform either. Nor is clause 3, which will enable Members of Parliament to get copies of reports on cases that they take up without the risk of the ombudsman being sued for defamation. I thought that the ombudsman might have taken a chance on that, as the hon. and learned Member for Colchester, North properly pointed out.
  1080
  The hon. and learned Gentleman also referred to clinical complaints. It is interesting that Sir Cecil Clothier had something to say about this in his final report, in which he reflected on his own experience and that of the office on its 10th anniversary. One of the topics he covered was clinical complaints. He declined to answer the question whether he should take such complaints, arguing that this was a matter of political discussion and discussion with the professionals. However, he discussed whether he could do so and concluded that it was practicable, although expert assessors would he needed. That is important, and we could return to it in Committee.
  The family practitioner committee complaints have been properly touched on. The Health Service Commissioner discussed these matters in his annual report of 1983–84, in paragraph 10. Referring to the statutory regulations governing the formal family practitioner complaints procedure, he said:
  "Those regulations are complicated and the ordinary citizen frequently finds them hard to understand."
  The report goes on to say that the time limit, the formality of the procedure, its complexity and its adversarial structure all combine to make the complainant feel disadvantaged. The commissioner tells us that complainants look to him for redress, but in vain, because the actions of contractors to the family practitioner committees are outside his power.
  As with complaints about clinical judgment, there can surely be little doubt, certainly among ourselves, that there is a public desire for an easily understood, non-adversarial mechanism for dealing with the issues. I accept that there is controversy as to what the mechanism should be, but there can be no doubt about that public desire. The Health Service Commissioner could provide such a mechanism, and I am sorry that the Government have not seen fit to include this in the Bill.
  Both the Select Committee and the Health Service Commissioner have urged that personnel and contractual matters be included in the scope of the commissioner's responsibilities. This would not require legislation as it could be done by Order in Council, but the Government seem to have no intention of doing anything of the sort, although I accept that they would not have to do that in the Bill. Nor does the commissioner look like getting the power to investigate matters concerning the Health Service on his own initiative when there has been no complaint. Although the Select Committee did not back him on that point, I can see the strength of it and perhaps we will be able to explore it further in Committee. The contents of the Bill are not so onerous or so wrong as to cause us to press the matter to a vote.
  9.10 pm
  Mr. Luce: I have enjoyed listening to the debate, not least because it seems that in all parts of the House there is strong support for the purposes of the Bill. I was glad to hear the speeches by the hon. Members for Holborn and St. Pancras (Mr. Dobson), for Newcastle upon Tyne, East (Mr. Brown) and for Ashfield (Mr. Haynes) and by the hon. and learned Member for Montgomery (Mr. Carlile). They all gave broad support to the Bill and raised a variety of points which can probably be more easily explored in Committee.
  We also heard from my hon. and learned Friend the Member for Colchester, North (Sir A. Buck) who played

  1081
  such a prominent part in chairing the Select Committee. He and the other members of the Select Committee do an excellent job.
  My hon. Friend the Member for Eastbourne (Mr. Gow) made a characteristically colourful speech in which he asked me to justify the fact that the Red Deer Commission is incorporated. I shall find that slightly easier to answer in Committee after I have had a little more time to think about it. I noticed a great tremor of excitement and tension when my hon. Friend spoke about the Boundary Commission and asked why it was not incorporated. I know his feelings and to some extent I share them because of the shape of my constituency. The Boundary Commission is an advisory body and, in the context of the Bill, we are talking only about bodies with executive and administrative functions.
  The striking feature of the debate is the great belief in the value of the ombudsman. We have had 20 years' experience of an ombudsman and, although the hon. Member for Holborn and St. Pancras expressed doubts about the staffing, there was a unanimous view that Mr. Barrowclough and his staff do an excellent job. I shall deal in a moment with the questions posed about resources.
  The most useful way in which I can respond to those hon. Members who asked why certain bodies were included while others were excluded is to remind the House of the broad criteria for selecting quango-type bodies for incorporation in the schedule to the Bill. As I said in my opening speech, such bodies would have to meet certain criteria. They should be subject to some degree of ultimate ministerial accountability to Parliament because they are dependent for finance and continuing existence on Government policy.
  Clause I of the Bill sets out in detail how we interpret those criteria as a broad basis upon which to try to make a judgment. In addition, we must take into account the cardinal fact that they apply only to bodies with executive or administrative functions which directly affect individual citizens or groups of citizens. The complaints must also be based on evidence of sustained injustice as a consequence of maladministration. On the basis of those broad criteria, I have to make a judgment about which quango-type bodies should be included. Hon. Members would not wish me to detain the House by answering the questions posed about specific bodies, but we can make some judgments in that context.
  Consider, for example, the Civil Aviation Authority, about which some of my hon. Friends raised questions. In carrying out most, if not all, of its functions, the CAA acts as a tribunal, subject to oversight by the Council on Tribunals. The Government fully endorse the Select Committee's view that tribunals should not be brought within the scrutiny of the PCA. I respect the fact that these matters can be examined in more detail in Committee, but I wish only to give some idea of the matter.
  A question was raised about the Monopolies and Mergers Commission, which is principally an advisory body with no executive function. Again, it does not come within the criteria that I have set out.
  My hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) referred to the BBC. I accept that there are grey areas, but, largely, the BBC does not qualify within the broad category of executive and administrative functions, with the exception of misrepresentation and invasion of privacy. There is already an effective supervisory body, the Broadcasting
  1082
  Complaints Commission. Again, this matter can be probed in more detail in Committee. I select those bodies simply to illustrate the broad criteria that the Government have determined for the selection of this range of bodies.
  There has been much discussion about quangos. I am pleased that my hon. Friend the Member for Gedling (Sir P. Holland) is present. He played a most effective and prominent role—I do not know whether it is fair to say this or whether I shall come under some criticism for saying it— in hunting quangos. I have overall responsibility for the Government's policy on quangos. There has been a net reduction of just over 500 in the number of quangos in the past seven years. Much of the credit for that goes to my hon. Friend. The purpose of the debate is not to determine exactly how many quangos there should or should not be but to take into account what quangos there are and to consider whether they should qualify for inclusion in the Bill.
  Some of my hon. Friends asked about the resources available to the ombudsman to undertake his task. It is clear that the ombudsman must have resources to meet his new responsibilities. There is no shadow of doubt about that fact. At this stage, it is difficult for the ombudsman to be sure about what increasing work load he will have, but he is making a careful assessment. There has been a review of the ombudsman's staffing needs. Careful account will be taken of the implications of the Bill when it is passed. I assure my hon. Friends that this matter is being taken fully into account.
  My hon. Friend the Member for Newbury (Mr. McNair-Wilson) made an impressive speech, principally on the subject of the Health Service Commissioner and about whether his powers and tasks are sufficiently wide ranging. His speech was based, in a moving fashion, on his own experience—let alone that of his constituents—of the Health Service. It is my job to take into account what he said, although I hope that he will bear with me in accepting that the main purpose of the Bill is to seek to extend the jurisdiction of the PCA to include quangos. Therefore, some of the other points that my hon. Friend raised about the Health Service Commissioner should be considered seriously for the longer term.
  I am grateful to my hon. Friends the Members for The Wrekin (Mr. Hawksley) and for Rugby and Kenilworth for their contributions to the debate. As I am unable to answer their questions in detail at this stage, 1 shall try to answer them by letter or in Committee.
  My hon. Friend the Member for Newbury asked who had the power to appoint the ombudsman. My right hon. Friend the Prime Minister advises on the appointment of the ombudsman. He also asked why Northern Ireland has not featured in the debate. Northern Ireland had its own PCA, established under the Parliamentary Commissioner Act (Northern Ireland) 1969, who investigates complaints of maladministration by Northern Ireland Government Departments or authorities.
  The Bill will become effective about two months after it has completed all its stages and, in answer to my hon. Friend the Member for The Wrekin, it will be able to deal with complaints that are being made now by members of the public. I am delighted that it has received such a warm welcome. I look forward to examining the Bill in more detail in Committee. I warmly commend it to the House.
  Question put and agreed to.

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  Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

  Parliamentary and Health Service Commissioners Bill

    PARLIAMENTARY AND HEALTH SERVICE COMMISSIONERS BILL
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act resulting from the Parliamentary and Health Service Commissioners Bill, it is expedient to authorize—

    (a) the payment out of the Consolidated Fund of any salary, pension or other benefit payable by virtue of the provisions of that Act to an acting Parliamentary Commissioner for Administration or an acting Health Service Commissioner for England, Wales or Scotland; and

    (b) the payment out of money provided by Parliament of any increase attributable to the provisions of that Act in the sums payable out of such money under any other Act.—[Mr. Neubert.]

  Rent (Relief from Phasing)
  9.21 pm
  The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): I beg to move,
  That the draft Rent (Relief from Phasing) Order 1987, which was laid before this House on 13th January, be approved.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): I understand that it will be convenient to discuss at the same time the second motion on the Order Paper:
  That the draft Protected Shorthold Tenancies (Rent Registration) Order 1987, which was laid before this house on 13th January, be approved.
  Mr. Patten: I am most grateful because, Mr. Deputy Speaker, at 3 o'clock this morning I was talking about the beauties of Basildon's shopping centre. With questions this afternoon, I feel that I have already spoken enough for one day. I should not like to have to go through two separate debates on these orders. Therefore, I am grateful to the hon. Members for Birmingham, Perry Barr (Mr. Rooker) and for Leeds, West (Mr. Meadowcroft) for having agreed to this course. [Interruption.] And, indeed, I am grateful to every other hon. Member, including my hon. Friend the Member for South Ribble (Mr. Atkins).
  The draft orders before us represent minor but essential and long overdue changes to Rent Act legislation. They will restore some of the incentives for private landlords to let properties which have been left empty because of the restrictions of the Rent Acts. They will particularly encourage landlords to make accommodation available in London where housing need is at its greatest. This will benefit many people—job movers, single people and the homeless for whom private renting is sometimes the logical and, indeed, the only choice.
  I shall deal first with the Rent (Relief from Phasing) Order which abolishes the phasing of rent increases for regulated tenancies. The hon. Member for Perry Barr does not need to be reminded that it was the Labour party's Rent Act of 1965 that introduced the current fair rent machinery. That Act makes no provision for the phasing of rent increases. Under the 1965 Act landlords were allowed to charge the full fair rent immediately.
  The phasing of increases in regulated rents has been with us since the days of counter-inflation measures. In particular, the Conservative Government in 1973 froze rent increases. That was subsequently converted into statutory phasing, in the Housing Rents and Subsidies Act 1975. Phasing was introduced at a time of high inflation to protect tenants from paying large increases all at once. I understand why it was thought necessary at the time to do that. The 1975 Act provided for an increase in the fair rent to be payable in three equal instalments.
  In 1980, the present Government altered the phasing provisions and the effective period of registrations. We reduced from three years to two the period before a fair rent could be reviewed, and made a similar change to the phasing period. The effect of this is that only half of any increase in rent can be charged immediately, the full rent becoming, due one year later.
  Under phasing, I do not think that it is unfair to say that the landlord never gets a fair rent. He or she does not get the fair rent assessed in 1985 until 1986, when it has already fallen behind. When, in 1987, a new fair rent is

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  fixed, appropriate for 1987 circumstances under legislation, he or she does not get that rent until 1988. Unfair rent would be a better description, certainly less fair than it was in 1965 when the Labour Government introduced the Rent Act legislation which introduced fair rents.
  For many years private landlords and housing supply in Britain have lost out because rent increases have fallen behind the rate of inflation. Since 1970— these are important facts—private rents have lost a fifth of their value against the retail price index, and two fifths against average earnings or against local authority rents, which are not phased.
  Mr. Nick Raynsford: Will the Minister give way?
  Mr. Patten: I do not think that I will.
  Mr. Raynsford: Why not?
  Mr. Patten: Because I do not choose to.
  Inevitably, there has been a catching up process, and this is still continuing, but the annual rate of increase has fallen from 12·5 per cent. in 1983 to 8·5 per cent. in 1986.
  Mr. Raynsford rose—
  Mr. Patten: If the hon. Member for Fulham was here at 3 am talking about Basildon he would be slightly tetchy. If the hon. Gentleman is fortunate enough to catch your eye, Mr. Deputy Speaker, he can make his own speech in his own way.
  Inflation is now firmly under control and is at its lowest for many years. The abolition of phasing will make a marginal difference to rents payable, but it will help landlords to obtain a better yield from rentals, and in turn help them to carry out often much-needed repairs to their properties. We suffer from a disrepair problem in Britain. Ending phasing will not affect the ability of tenants to claim housing benefit on any higher rents, which is very important.
  The second order with which we are concerned is the Protected Shorthold Tenancies (Rent Registration) Order which deals with shorthold tenancies in Greater London.
  Shorthold tenancies were introduced by the Government in the Housing Act 1980 as an initiative to encourage private landlords to let property. That has been useful outside London; it has been a lamentable failure in Greater London. The key element of shorthold is that it is a fixed-term tenancy of between one and five years, at the end of which the landlord may, if he wishes, take possession of his property. That allows a landlord to enter into short-term lettings with the knowledge that he is guaranteed possession at the end of the period. If the tenant refuses to go at the end of the fixed term, the landlord has an absolute right to repossess his property. The tenant enters into the agreement quite freely, knowing that it is for a fixed term, and that the landlord has the right to reclaim the house or flat at the end of the tenancy provided he serves notice as the rules of the tenancy require.
  In devising shorthold, my right hon. Friend the then Secretary of State for the Environment, built in safeguards to protect the interests of tenants. The most important of these involves serving the correct notice to the tenant. Before a shorthold is granted, notice must be served to the tenant in a form prescribed by Parliament telling the tenant exactly what his rights are clearly and precisely, so that there can be no misapprehensions. There are also
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  strict rules, which I strongly support, that the landlord must follow in bringing a shorthold to an end. If they are not followed, a fully protected tenancy is created.
  Initially, it was a precondition of a shorthold tenancy that a fair rent had to be registered for that tenancy. This condition does not apply, and never has applied, for any other private letting. It was a unique precondition. The statutory provisions governing shorthold gave the Secretary of State power to review the position and modify the conditions, and he did so in 1981. It was clear that the requirement for uneconomic fair rents to be registered was enough to deter many landlords from using shortholds, so this requirement was waived for shorthold tenancies outside Greater London.
  There has been modest growth in the number of shorthold tenancies. They have encouraged job mobility and have been a valuable addition to the housing armoury. People elsewhere in the Western world would think that we are wasting our time debating whether shorthold tenancies are good or bad.
  Mr. Raynsford: How many shorthold tenancies are there?
  Mr. Patten: There are a limited number. If I have the opportunity later, I shall give the exact number. In many other countries in western Europe people would not waste their breath talking about whether shorthold tenancies are desirable. It is simply a form of contract which is entered into all the time. It is a great help to housing in other countries.
  The order lifts compulsory rent registration for shorthold tenancies in London to bring them into line with shorthold tenancies elsewhere. The order does not affect the position of existing shorthold tenants in London. Their existing fair rents will continue to have effect. I emphasise that it is still open to either the landlord or the tenants, or both, of a shorthold tenancy outside London to apply for a fair rent to be registered. It is important for the House to realise that that opportunity still exists.
  The reasons for our proposals are simple. There is growing evidence that, although shorthold is used successfully by many landlords outside London, it is not used much inside the capital. The order is designed to encourage its use in the capital, where there is a substantial housing need.
  Since 1980, the Opposition have been hostile towards shorthold. I have heard of the pledges given by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and his hon. Friends to repeal this form of tenure should they form a Government at some future date. They are concerned that the shorthold tenant has insufficient security of tenure. But the tenant does have security for the duration of his or her agreement and he or she can extend the letting with the landlord's approval. Such tenants have, and will still have under our proposals, the right to have a fair rent registered for the property. That right is not removed.
  There are great merits in the shorthold system and I hope that they will lead to an increase in this useful form of tenure in the capital. It has brought a bit of much-needed rented accommodation on to the market, by giving a fair deal to tenants and a degree of confidence to landlords.
  Mr. David Winnick: How much?
  Mr. Patten: It is difficult to estimate how many shortholds there are in the country, but I shall endeavour, if I am given leave to speak again, to give the exact number. I am afraid that I do not have the figures in front of me, so I cannot answer the question.
  Landlords have been able to bring into use properties which fear of the Rent Act had forced them to keep empty because they were concerned that they could never recover possession. The order will build on this success and bring benefits to both landlords and tenants. We want this process to continue.
  I hope that I have made clear in my brief remarks the purpose of and justification for these two orders. They will help those in housing need. I commend the orders to the House.
  9.35 pm
  Mr. Jeff Rooker: The Minister, who has admitted that he is somewhat tired, has attempted to make a quarter reasonable case for what might look like two quite innocuous orders, on the grounds of low inflation and bringing more properties into rent, but the Opposition do not take the matter so lightly. Indeed, if it were not for the Opposition these two orders would have disappeared upstairs to a Committee to be dealt with one morning, scrutinised under our procedures, but not dealt with on the Floor of the House of Commons. I think that we were right to insist on this debate on the Floor of the House.
  We did that for a reason. We want to send a signal to the Government and, indeed, to private landlords. It is a simple signal. It is that, however innocuous these orders may appear to be, we are not prepared to accept the decontrol of rents and we object to this thin end of the wedge approach. We want the Rent Acts strengthened, not weakened, which is the effect of these orders. I know that Ministers might argue that it is only at the margin, but it is the thin end of the wedge, and we want to send this signal to those outside this House who may or may not make their decisions based on the fact that there will at some time in the future be another Government.
  People outside do believe that we have not taken on the role of a one-party state. In this area of activity, housing policy and the private rented market, people outside know that their investment decisions depend on consensus. I tell them now that there is no consensus on rent decontrol, and if they have not taken that message on board before tonight, it has to be reaffirmed here and now.
  Mr. Winnick: I am most grateful to my hon. Friend for giving way, particularly in view of the arrogance of the Minister in refusing to give way at all. Is my hon. Friend aware that on a number of occasions the Minister has referred to rent controls as Socialist controls, and does that not indicate only too clearly that, in the unlikely event of this Government being re-elected, security of tenure for new tenancies will be removed?
  Mr. Rooker: My hon. Friend is perfectly right, but I hope that we can keep the debate more good natured and good tempered even than Question Time was today.
  We know from the constant requests from Conservative Members to their Ministers that the majority of them want the lid to be taken off rents. This is constantly brought out at Question Time and in the occasional debates that we have on the matter. Ministers
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  have now started to respond to that request, and it is clear that however much Ministers may prevaricate, they too want the lid taken off rents. They have made certain commitments about what might happen with new tenancies if they were to form another Government, but my hon. Friends know the score. The ultimate purpose will be to take the lid off all rents if they form another Administration. On what the Government decontrol, we shall reimpose controls which are suitable to the particular occasion.
  Mr. Michael Latham: Does the hon. Gentleman realise that in section 12 of the Rent Act 1965, which was piloted through the House by Richard Crossman—this section as it now is having been introduced by him on Report—there is power, by ministerial order, to take any houses out of the regulated sector? That was introduced by Richard Crossman himself.
  Mr. Rooker: One of the reasons why we object so much to this piecemeal approach is that we object to the detail here but we also object to the principle of the thin end of the wedge. There probably would not be any argument between us if the Government had a housing policy. If the Government were setting out to see that housing need was met, whether to rent or to buy, in the public sector and the private sector, and that there were sufficient houses for people to rent where they wanted to live, there would not be the artificial shortage of homes to rent—indeed, the artificial shortage in some parts of the country of homes to buy—thus forcing up prices of both homes to buy and homes to rent. No one is advocating—I am sure that the hon. Gentleman is not advocating—that that particular power in the Act be used in present circumstances, given the nature of the housing crisis.
  The Opposition see no long-term future for traditional private renting for commercial profit as a form of housing tenure. For the avoidance of doubt, I reaffirm our support for shared ownership and assured tenancies, which I declared on 19 February at columns 377–78. I reaffirm also that being another person's landlord for a crude commercial profit is an unacceptable way of earning a living.
  Mr. John Butterfill: Why?
  Mr. Rooker: I understand through the usual channels that we shall have much more time available to us next week to develop our case than we have now. I shall be happy next week to take on board the hon. Gentleman's question.
  As I have said, it is our belief that to be another person's landlord for a crude commercial profit is an unacceptable way of earning a living. I exclude from that statement the institutional part of the voluntary sector. We want to see private tenants opting for the voluntary sector that is represented by housing associations and co-operatives, or local authorities. We believe that tenants of private absentee landlords should have the right to buy their homes.
  Mr. Butterfill: On that point—
  Mr. Rooker: When the hon. Gentleman last intervened in one of my speeches on the issue of private tenants—this was at column 377 on 19 February 1986—he uttered a four-letter word. I hope that he will not do that again.
  Mr. Butterfill: The hon. Gentleman may have to apologise to me about that, because he may remember that Hansard was corrected. I used the word "scrapped", not the four-letter word that appeared in Hansard. I remember thinking at the time that it was understandable that Hansard should have made the error.
  I should like to know whether, in the private sector, the hon. Gentleman would include the provision of accommodation by building societies, insurance companies and pension funds. Is he opposed to their providing private sector rented accommodation, or does he regard them as more acceptable landlords?
  Mr. Rooker: The organisations to which the hon. Gentleman has referred may fund rented accommodation, but they do not necessarily provide it themselves. Most of them will act through housing associations that are registered with the Housing Corporation, or set up registered associations and use the assured tenancy scheme, which means that the landlord must be approved by the House. Shorthold landlords have not been brought before the House for approval, and it would be a different kettle of fish if the Government were to do so.
  Without saying yes to the hon. Member for Bournemouth, West (Mr. Butterfill), I want to exclude the organisations to which he has referred. In some respects they are institutional, and they may use means other than the crude private landlordism—the old fashioned style—that we came to "love" so much. Many thousands of tenants came to love and hate it so much as they were winkled out of their homes in London years ago. As I said last year, that is still happening. My hon. Friend the Member for Fulham (Mr. Raynsford) knows that as well as anyone in the House.
  In the first half of 1986, regulated rents increased by between 8 and 9 per cent. That information was based on one set of figures that was used to produce the answer to a question on 19 November 1986, at column 248. According to the collective view of 10 different organisations, rents increased by no less than 17 per cent. Either way, the increase is above the average wage increase. That is especially so when we consider that the concentration of tenants in the private sector comes mainly within low-income groups, who are not receiving anything like average wage increases. The Minister's argument about there being a low inflation rate does not justify an increased frequency of rent increases.
  A sample carried out in 1983–84 showed that a quarter of private tenants had incomes of less than £2,600 a year. The Minister may say that such tenants can get help through housing benefit, but at the same time one of his colleagues is spending most of his time excluding people from housing benefit and reducing their eligibility to claim such benefit. The Minister's actions tonight will mean that rents will go up higher and faster, and at the same time the DHSS is reducing the number of those who are eligible for housing benefit. Approximately 1·9 million households in the private sector are eligible for housing benefit, but how many of those people will be eligible next year? The Minister should know those figures before he comes to the House with these orders, the consequences of which will be significant for thousands of families.
  If we take a random borough—the London borough of Greenwich—[HON. MEMBERS: "Random?"]—I have no vested interest in Greenwich. I do not live there, I do not represent it and it is better to quote a different example
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  from that of my city of Birmingham. In Greenwich, some 9,000 families in the private rented sector are in receipt of housing benefit. Many of those families may lose their eligibility to housing benefit once the Government's proposed changes take effect. They will lose that benefit at the same time as rents go up faster and higher as a result of tonight's orders. The Minister should consider the effects on those families before he brings orders such as this to the House.
  Some of the families will be driven from their homes and as usual, the local authority will be forced to pick up the tab. The Minister has said that landlords get a low return, and I admit that that return is low at 1 or 2 per cent. net, but some of the worst housing in this country, in terms of quality and condition, can be found in the private rented sector. In many large cities and in my constituency, some of the worst housing is owned by private landlords. Nothing in these orders will improve the quality of those private rented homes. Perhaps that is the Governments intention. We might look at these orders in a different light if the consequent higher rents resulted in repairs being carried out to those homes. However, I suspect that landlords will continue in much the same way and will not carry out repairs to the homes of their tenants.
  I believe that the second order on shortholds provides a positive incentive to raise rents so as to force tenants out and thus enable landlords to sell the property. That is the name of the game. The rent increases that landlords would consider equal or adequate in comparison to owner-occupied values may be as high as 200 or 300 per cent. in some areas.
  I accept that tenants may register their rent, but the Minister must be aware of surveys that show that some 50 per cent. of tenants are unaware of the type of tenancy agreement that they have. Being unaware is one thing: being aware and scared stiff is something else. Some tenants are scared of the harassment that they still recieve from landlords in the late 1980s.
  Shorthold tenure, especially in London—the Minister must be aware of this because it was mentioned in debates in 1980 when the tenancy was introduced—was supported by his hon. Friends only as long as fair rents were compulsory. After tonight there will no longer be compulsory fair rents in London.
  The Minister cannot, in all justice, use the argument of non-registration outside London. He must be aware that things in London with regard to both housing and other aspects of life are different from life in the rest of the country. If the Minister does not know that now, he never will. It is not that London wants to be different; it is simply that London is different, whether in health, transport or any aspect of housing policy. Therefore, there are umpteen different reasons why London deserves to be treated separately.
  The Minister might argue that shorthold has worked outside London, but he must be aware that outside London registered rents are much close to market rents. Nobody can claim that to be the case in London, where market rents are ridiculous and often four or five time higher than registered rents. For landlords of shorthold tenancies, the incentive will be to ensure that their tenants do not ask for a fair rent to be registered. That incentive is not as great outside London, and perhaps that is why the position is so different. It would help elucidate the argument if the Minister gave the figures for shorthold both in Greater London and outside it.

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  I repeat tonight what we have already put on record, namely, that we are committed to abolishing shorthold. There may be a csae—I put it no stronger than that—for retrospectively considering some shorthold tenancies. One or two of my hon. Friends may raise this matter tonight because of their direct constituency experience. It might apply especially where there has been a mushrooming of private landlords using shorthold tenancies outside London, especially in former National Coal Board property. We give notice to the owners of that property that when we are in government we will not hesitate, should the circumstances so warrant, to bring forward retrospective legislation—[Interruption.] Oh, yes, the owners of those properties must take that on board. It is not open season on those properties to exploit the tenants in the way that is happening in some parts of the country.
  We may have to consider retrospective legislation. It is strong action, and no Government want to take it. I do not think that this Conservative Government, who have brought in retrospective legislation, wanted to do so. However, they have not shied away from doing it where necessary, and nor did the previous Labour Government. Where there is a case to be made and warnings have been given from the Front Bench, the Government of the day are fully entitled to say that such action is warranted. Therefore, I warn those who are operating shorthold in that manner of the consequences.
  We are not interested in taking the lid off rents in the private sector, and therefore we shall oppose both orders in the Lobby tonight.
  9.53 pm
  Sir Geoffrey Finsberg: "I'll huff and I'll puff and I'll blow your house down"—that is the value that the public should place on the last few sentences uttered by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who has made open threats. Similar open threats were made during the passage of the Housing Act 1980, but they had little or no effect. I trust that they will have the same effect on this occasion.
  I wish to confine my remarks to two issues, the first being phasing. I am distressed because during the past few days there has been an enormous stirring up with a compaign of falsehoods perpetrated by a number of local authorities and organisations. That is one reason why the debate is on the Floor of the House—although there is but a baker's dozen on the Opposition Benches. There might have been as many had the matter been dealt with in Committee. The debate has attracted no one to the Press Gallery and only a baker's dozen on the Opposition Benches—
  Mr. Raynsford: Where are the Tories?
  Sir Geoffrey Finsberg: As the hon. Gentleman knows, when Governments introduce such measures they are not expected to have vast hordes of Members in the House. The Opposition called for the debate, but they are notable by their absence.
  Mr. Winnick: Will the hon. Gentleman bear in mind that only two weeks ago a move by one of his hon. Friends to deregulate the privately rented sector was defeated? Apart from the fact that the payroll vote abstained for
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  obvious political reasons, surely that shows the interest of Labour Members in defeating that attempt to deregulate the private sector in a Tory-dominated House of Commons.
  Sir Geoffrey Finsberg: The hon. Gentleman never learns. He is mixing up ten-minute Bills, which he knows are of little importance, with something that is actually going to happen. Private Members' Bills are, quite rightly, different from ten-minute Bills. As someone who got a ten-minute Bill through the House many years ago, I know what luck was involved and that it does not have any real political significance.
  Having illustrated the genuine interest of Opposition Members—they are not here—I am disturbed to hear the hon. Member for Perry Barr say that there is no consensus on the building of properties. He must realise that one result of that would be a continued reduction in the number of rented properties available. If, as the hon. Member says, most landlords are getting a net return of between 1 and 2 per cent., they will feel that, if one of their properties became vacant, they would be better served by selling that property. That would remove the property from the rented sector, and I do not believe that that is the right thing to do.
  If we are now to have the two-year phasing period, when the rent officer is working out the fair rent he will not have to take into account the fact that, as my hon. Friend the Minister rightly says, the full fair rent will not come into effect until halfway through that period. Therefore, the effect will not be greater increases, which is what the hon. Gentleman implied. I do not believe that that will happen.
  The policy of the Labour party has contributed to the unfortunate shortfall in private rented property in London. Can my hon. friend the Minister tell me why the phasing requirements, in relation to registered rents for housing association tenancies, are not altered? I am not suggesting that they should be altered, but I am asking why there is that differentiation. That was put to me by a deputation which visited me yesterday, and which wanted to know—they were not friends of mine—why only the private tenants would have the phasing requirement removed. They wondered why co-ops and the like would not have it removed. I should be grateful if my hon. Friend would answer that.
  Those of us who have lived in London all our lives, as has the hon. Member for Norwood (Mr. Fraser), will remember that among the best private landlords were companies such as Legal and General, the Prudential, the old London County Freehold and Leasehold Properties, which built hordes of low-rented properties throughout London before the war. The only reason why they went out of business was the continued restriction on rents, which meant that they could not repair the properties properly out of the income that they received. That is why those good landlords went out of business.
  I genuinely did not follow the argument of the hon. Member for Perry Barr. Does he mean that if that sort of company wishes to go back into the market it should not do so because it would be getting profits from what the hon. Gentleman would call people's homes? I should be grateful if he would elucidate that point.
  Mr. Rooker: What I said before the intervention was probably clearer than what I said after it. Institutional

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  bodies will probably use a different system from the previous one. They will invest in assured tenancies or in rented housing through legitimate housing associations. Generally speaking, it could be argued that that is not done for crude commercial profit, as the Freshwaters and the Rachmans of this world did in the past.
  Sir Geoffrey Finsberg: As the hon. Gentleman will know from my speeches in this House, I held no brief for Freshwaters or one or two others which I could and may name when we debate the Bill, following the Nugee report in this House. I am grateful to the hon. Gentleman for that because the point is important and that may be a source of supply.
  I am the only survivor here tonight of the ministerial team who put shorthold tenancies on the statute book. My hon. Friend the Minister is absolutely right to remove the compulsory element from London. I do not agree with the hon. Member for Perry Barr that masses of people in shorthold tenancies do not know their rights. The information given to them is in such a detailed form that they would find it impossible not to know what their rights were. Perhaps my hon. Friend will tell me whether the forms that must be provided when these orders become law will state that, although there is no compulsion for registration, it is open to the landlord or tenant to apply, if they wish. That would seem to be logical.
  I am worried that shorthold tenancies have not got off the ground as we hoped they would. We believed that shorthold tenancies would provide extra rented property which could make its contribution under controlled terms towards housing people who might have wanted to work and live in London and who required a property for only one or two years. Under shorthold, landlords were prepared to accept that because they knew that at the end of the term there would be no problem of the tenant wishing to remain for ever and, indeed, the tenant's successors.
  I acknowledge that shorthold has not been the success that we hoped. Again, that is because of the attitude of the Opposition, who made it clear that they were wholly against the concept. However, despite that, some people have entered into shorthold tenancies. When it is clear to the public that there is not the slightest possibility of a Labour Government for at least the next decade shorthold will begin to take off properly, especially in view of my hon. Friend's action to remove the compulsory element of registration in London.
  I welcome these two orders. They will do absolutely no harm to those who require accommodation in the private sector. Indeed, they will help to preserve or restore some element of balance between the two sides in housing, and it is important that we remember continually that balance is part of our society.
  10.3 pm
  Mr. Michael Meadowcroft: I agree with the hon. Member for Hampstead and Highgate (Sir G. Finsberg) that this is a question of balance. It is necessary to emphasise that there is a problem with rented accommodation which must be tackled. It will do no good to enforce a particular ideology for its own sake, considering the problems that people face day by day. Therefore, it is important to consider whether the Government's attempt to shift the balance from its present position will be beneficial to those in greatest need. That must be the test of the orders.
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  There has always been a problem with rented accommodation and it could always be affected by controlling legislation. The difficulty is that unless all housing markets are controlled, both the buying and rented markets, it is difficult to control one without upsetting the whole picture. Yet it has never been possible to decontrol the whole area, because we do not have a variety or a sufficiency of housing for those who want it to be able to pick what is suitable for them. The consequence is that we are left picking bits and pieces of it to control but always finding that unsatisfactory. I do not believe that it is possible to find a perfect way through that jungle. It will always be a question of compromise at any given time.
  I accept, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said, that there is a psychological prejudice against landlordism. It is a prejudice that I instinctively share, but it is not something on which one can base legislation, not least because we really need every rented accommodation unit that we can get, whatever its ownership. Therefore, perhaps in some idealistic future we may be able to act upon that prejudice, but it is not something that will influence how we decide on the orders today.
  The reality is that landlordism is no more nor no less justified than any other way of making a profit out of an essential commodity of life. One has to look at it to see how to provide the best out of a difficult situation. I find the private ownership of land far more instinctively objectionable than landlordism because one cannot create more land as one can create more houses. Nevertheless, one has to determine one's views and policies according to how to provide the most accommodation units for those in need.
  In my constituency if one was to look at the old terraced houses, which are popular and beloved of many people, those in the worst condition are owned by the local authority. That is the sad fact. In some cases, but not all, it is because the local authority wishes an area to have a blight on it so that it becomes a candidate for clearance and compulsory purchase. I totally reject that. People are no more fond of a public landlord than a private landlord in those circumstances.
  When we have a problem of law trying in this regard, it is a problem of law to regulate the bad landlord, which has a detrimental effect on the good landlord. That is a real difficulty. Many of the good landlords, often those who have no more than half a dozen houses at most and who have treated their tenants fairly, resent the implication of the way in which legislation affects all landlords. Therefore, one has to look at whether the orders are beneficial in those circumstances.
  I have had to conduct campaigns, like so many other hon. Members, against landlords who would seek to find a way round particular legislation by pretending that they are offering bed and breakfast accommodation and throwing a rasher of bacon through the door in the morning. It sometimes takes two years to enforce the law against those landlords. One uses all the resources of the press to try to combat that, but the good landlords feel themselves to be under pressure because one is talking about private landlords as a whole.
  Another problem, which has been referred to already, is the geographic problem that there is not the same pressure in other parts of the country as there is in London and the south-east. The problems of trying to find

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  accommodation in London are horrendous. In other cities, includng my own, the problem is not one of quantity but quality. There is a quantity of housing, but much of it is unlettable because people will not take it in any circumstances. That is a different problem and it will not be helped by the orders. They will not create better quality housing in other areas even if they attempt to affect the quantity in London and the south-east.
  In proposing that the orders be approved, the Minister has to show that the situation in London is better than it was when the previous regulations were introduced. He has not shown that. He cannot come to us and say, "The evidence is that a variation in this way will improve the housing situation in the capital." Even on new properties, the rent differential between London and other parts of the country is 2:1. Given that, I do not see how one can argue that it is the right moment to start easing the regulations regarding shorthold tenancies or of phasing as it affects London.
  There is the question of how one draws a balance between competing interests. It is interesting to draw an analogy between what happened at Question Time regarding planning regulations and the type of houses being built as residential accommodation. We heard that the free marketeers on the Conservative Benches wanted regulations to allow different kinds of houses to be built than those currently being forced through under planning regulations. They recognise quite rightly in their constituencies such as Bournemouth or Eastbourne, that the kind of houses that were needed were not those that were being built. If people in the housing market are providing houses for profit rather than housing for need, there must be even more pressure on rented accommodation. The orders tonight will not improve that position.
  If the housing position is improved, there is an argument for shifting the balance more towards the landlord. However, I do not believe that the housing position has improved. I believe that it is worse. Why should the balance be tipped towards the landlord when the housing position is worse than it was?
  The Minister made a great point about inflation being lower. Therefore, the argument for phasing becomes less sustainable. The problem from the Minister's point of view is that inflation in rented prices does not necessarily conform to general inflation. The suggestion is that in 1986 the inflation rate for private rented accommodation was about 17 per cent., not the Government's 4·5 per cent. figure. There again, the argument for phasing to be abolished is hardly a help when a tenant finds that his private rent does not subscribe to the general theories about inflation.
  I believe that it is wrong to introduce this greater benefit to landlords at the moment. It is all very well for Conservative Members to refer to the right to rent. We should also consider the ability to rent. That question is apparent to many people who are struggling to rent at the moment. It is also strange that the Minister had to admit in his publications that shorthold has not been properly
  1096
  monitored. He said that there are problems in knowing how many shorthold tenancies exist. if they have not been monitored and we do not know the conditions and problems that such tenancies create, it is unfair of the Minister to come to the House today and claim that creating more of these tenancies will help by reducing the powers of control on such tenancies. I believe that that is an argument against approving these orders.
  A special area of concern exists among elderly people who are living at the margin where they do not receive housing benefit. They are fearful that, because their income is phased, it does not conform to the rules of rented accommodation and they will suffer greater hardship by the abolition of phasing than many other people. The danger of removing the controls on shorthold may well increase the number of shortfold tenancies, but not in the way that the Minister would like. People may see a loophole to increase incomes from such tenancies. Therefore, as and when they can, they will create shorthold tenancies out of long tenancies to shift the market and the prices in their favour. By increasing scarcity in that way, we will not improve the position for people who have to rent.
  The Minister emphasised—and indeed overemphasised—that the regulations will not affect existing tenancies. We are not over much concerned about existing tenancies. We are concerned about how the position will change in future. I do not believe that the orders will improve the position. The people in these tenancies are often most vulnerable. I am fearful that we will establish an itinerant population moving from shorthold to shorthold who are afraid to claim and enforce their rights. They are not confident enough to enforce their rights.
  Mr. Butterfill: Does not the hon. Gentleman realise that it would still be open to a tenant to register a fair rent? It is only the obligation to do that which is removed.
  Mr. Meadowcroft: The hon. Gentleman is correct. However, I fear that the conditions in his constituency are different from those in mine. Although we may explain people's rights to them, they only see the roof over their head which they may lose if they make life difficult for their landlord. They are not normally people who would take that risk.
  It is all very well to claim that there are laws against harassment. Of course there are, but it is not easy for a weak tenant to enforce those laws against a powerful person. The regulations will not improve the situation.
  The important recent case of Street v. Montford, of which those concerned about housing will be well aware, showed that landlords cannot so easily get away with licences. The court has now held that these create tenancies. In future, London landlords may be wary of inadvertently creating a tenancy and may prefer to go down the shorthold route, particularly if rents do not have to be registered. Such a case shows that this is the wrong time to be shifting the balance towards the landlord. The orders should be opposed because the case for them has not been made.
  10.15 pm
  Mr. John Butterfill: On an evening when the headline in The London Evening Standard reads:
  "Threat to home buyers: Labour plan tax relief cut on one million mortgages",
  it is appropriate that the Government should be promoting legislation that goes some small way to improving and strengthening the private rented sector. I am deeply saddened by what I have heard from the Opposition Benches, because I had hoped that we might be moving somewhat nearer to a consensus on housing in general and on the provision of housing in the private sector in particular. I can see that that is not the case both by what has been said by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and by the signs that I am receiving from the hon. Member for Fulham (Mr. Raynsford), but that does not particularly surprise me, given his record.
  It is profoundly sad that we are debating whether it is appropriate for accommodation to be provided by the private sector, and, if so, how the private sector can assist. I should have thought that Labour Members who complain regularly that there is insufficient investment in housing would look seriously at whether the private sector can assist and at ways in which they can encourage the private sector to take part in the process that we would all like to achieve—housing people well.
  It must he wrong for us to expect the private landlord to subsidise rents. If rents are to be subsidised in the long term, they should be subsidised by the public sector and not the private sector. Elsewhere in the world—for example, in Canada and Germany—it is easy to obtain rented accommodation in the private sector. That includes not just institutional investors such as the pension funds, insurance companies, building societies or similar organisations, but individuals.
  I know that the hon. Member for Perry Barr feels passionately about this, but not all private landlords are the evil, self-seeking people he believes them to be. I can introduce him to private landlords who invest in the provision of private accommodation for others because they regard it as a Christian duty to do so. They would prefer to invest their money in providing accommodation for other people less fortunate than themselves than to invest it in the stock exchange. I can see nothing reprehensible in that—I find it admirable. I can think of groups of families who invest in that way and continue to relet their properties at rents substantially below the market level because they consider that to be their Christian obligation. For the hon. Gentleman to denigrate the whole of the private sector in that way pays little tribute to the dedication of such investors.
  Mr. Winnick: Does the hon. Gentleman accept that the initial phase of British landlordism led to the public sector being responsible for slum clearance and redevelopment? The facts about that are quite well known. The Rent Act 1957 basically did that which the hon. Gentleman is advocating. It discredited landlordism and itself to such an extent that when the hon. Gentleman's party was thrown out of office it could not even bring itself to vote against the incoming Labour Government's legislation and argued instead that that which Richard Crossman was proposing should broadly be accepted.
  Mr. Butterfill: I do not agree with the hon. Gentleman's analysis of the problem. The problems with rent controls and the effect of such controls on the private sector go back much further than the hon. Gentleman suggests. The interference with the market that took place in the past gave rise to the shortages that he describes. Those were compounded by the war and the enormous damage that caused to our housing stock. I accept—I think it Es common ground between us—that there were some appalling landlords and none of us would wish to see the return of such people. If we could reach some agreement with the Opposition by which we could encourage a reinvestment of the private sector on a responsible basis, that would be a great advantage. Surely what we are doing here goes some way towards that.
  Mr. Meadowcroft: Of course there are good landlords and I know of such people in my part of the world. Does the hon. Gentleman accept that in most places there are owners of properties on which there is little or no outstanding debt? The number of altruistic people who have to pay high debt charges on modern property is nowhere near as great as the number of landlords of older properties who do not have that problem. We will face bigger problems with modern properties than we will face with old properties.
  Mr. Butterfill: I accept that that can apply to some extent. I do not advocate the immediate abolition of all rent controls because, like the hon. Member for Perry Barr, I do not wish to give an immediate profit to all the property speculators who have invested in the hope of getting vacant possession or making a huge hike in rents. That would not be appropriate. I should prefer a system under which the rent reflected the price paid by the landlord. I should also like to see a degree of indexation. On that basis we might be able to start to agree. We could do that if we could get over the quite inexplicable prejudices of the Opposition against the private sector as a whole. I passionately would like to see conditions improve. What we are doing tonight goes some way towards achieving that.
  The shorthold system is valuable, but its expansion has been greatly limited by the sort of threats we have had from the Opposition. First, they say that they will abolish the system. Secondly, they say that they may consider retrospective legislation. Who can be surprised that the private sector has not rushed forward to invest when threats of that sort are being issued quite clearly by the Opposition Front Bench?
  There are other problems with the present shorthold legislation and I should like to give an illustration from my constituency. One of my constituents owns three flats. When he became severely disabled and was unable to work, he used his savings to invest in the provision of accommodation for others. He has deep religious convictions and believed that that was a proper way to invest his money. He has let on a shorthold basis his little block of three flats. Sadly, one of the tenants was not very satisfactory. He was disruptive to the other tenants and generally behaved in a way which was upsetting to his neighbours and to the other tenants in the block. At the end of the year, my constituent sought to terminate the tenancy by giving, he thought, the correct notice under the Act. He employed a firm of solicitors to do that for him. Sadly, there was a defect in the way in which the notice was

  1099
  served, and a further tenancy was created. Two years have gone by and my constituent still has not been able to obtain possession from his unsatisfactory tenant.
  We need to look again at the question of notice. If we are to have a system whereby a landlord is able to get possession—it should be a system that is so simple that he should not need detailed legal advice—it is wrong if a landlord, having taken legal advice twice, is unable to get possession, particularly when the tenant is disruptive towards neighbours. That is an entirely different problem. I should like my hon. Friend to look at that matter and consider it further.
  It is anomalous that, with regard to shorthold, one situation should apply in London and another elsewhere, particularly one that is prejudicial to the establishment of further shorthold tenancies.
  Therefore, I welcome the action that my hon. Friend is taking.
  10.25 pm
  Mr. Nick Raynsford: We are considering two shabby and vindictive little orders introduced by a shabby and discredited Government who no longer have any pretence of a housing policy. They preside over the worst escalation in a housing crisis that I, and I believe most hon. Members, have seen. It is perhaps ironic that we should hold this debate tonight when, during Question Time, the Minister gave figures showing that, in the International Year of Shelter for the Homeless, under the Government's housing policy, the number of homeless households has passed 100,000 for the first time. What a disgraceful comment on the appalling failure of the Government to have a responsible housing policy.
  The reason for the escalation of the housing problem is a critical shortage of rented housing, which is the result of two specific trends. One is the deliberate running down of the public sector rented housing programme, which was the deliberate policy of the Government through drastically cutting their support for councils and housing associations. The figures show only too clearly the extent to which those cuts have reduced rental options in the public sector. In England the number of new homes becoming available through council building programmes reduced from 67,000 in 1979 to just 18,000 in the past 12 months. The number of housing association homes also reduced, despite the Government's pledges to support the housing association movement. The number of new build and rehabilitated dwellings provided by housing associations reduced by approximately 50 per cent. during the lifetime of the Government. That record is their responsibility.
  The other reason for the homelessness crisis is the shortage of rented housing in the private sector. There has been a continuing decline during the lifetime of the Government. The Government's policies have failed to stem that decline.
  We are now presented with two orders that, we are told, will help to stimulate private renting. The evidence is against the Government. In 1957, the Conservative Government attempted, by reducing rent controls, to stimulate the private market. The evidence shows exactly how wrong that philosophy can be. The Rent Act 1957 did not usher in an increase in the number of lettings but heralded the period during which there was the sharpest
  1100
  decline in the number of private lettings during the whole of the century as landlords used the opportunity to get rid of their tenants and to sell their properties. On being returned to office in 1979, the present Government introduced in the Housing Act 1980 a measure that they hoped would stimulate private lettings. The then Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), said:
  "I believe that we shall improve the opportunity for rented accommodation."-[Official Report, 15 January 1980; Vol. 976, col. 1457.]
  We heard various other pledges about how the 1980 Act would improve options for rented housing. In practice, that did not happen. Between 1979 and 1986, 500,000 rented houses went off the market. The number of private rented homes declined from about 2 million to 1·5 million. The Government cannot pretend that that is our fault. They were in power during those years. The Government's 1980 Act was supposed to stem that decline and stimulate the market. They should take the responsibility for their failure.
  The 1980 measures failed to stimulate private lettings, as will the two minor measures that we are debating tonight. They will cause further hardship to private tenants who have already suffered very considerably from this Government's actions on a number of fronts: from cuts in housing benefit, from the threat to remove Rent Act protection from new lettings and from the threat to change the rent registration procedures and repossession procedures, as announced in a recent consultation paper issued by the Lord Chancellor's Department. This attack on private tenants throughout the country, but particularly in the London area, will be remembered by them at the next general election.
  The Minister pretended that the rents registered for private tenants have failed to keep pace with inflation. He did so by an extraordinary sleight of hand. He quoted figures that were based on 1970. Why should he have used 1970 as the base? Does he not believe that there was a Labour Government between 1974 and 1979? Is he not prepared to be honest and straightforward with the House and take the logical and sensible base? The 1979 figures are quite simple. They are figures for which this Government are responsible.
  Since 1979 there has been an 87 per cent. increase in the level of mean registered rents for unfurnished tenancies in England and Wales. In the last two years—to put the Minister's comments into context, since he referred to the reduction in inflation—the increase in the registered rent levels has been 18 per cent., far ahead of the level of inflation. What is the possible justification, therefore, for claiming that rent levels have not kept pace with inflation and should be increased? It is a completely dishonest and specious argument that is justified by bogus statistics from a Government who are desperate to try to cover up their own failings.
  Mr. Butterfill: Will the hon. Gentleman give way?
  Mr. Raynsford: Yes, Although the Minister would not give way to me when I was about to rise to correct him on those figures, I shall happily give way to the hon. Gentleman.
  Mr. Butterfill: I am most grateful to the hon. Gentleman. Will he tell us what the increase in the cost of

  1101
  living has been since 1979? Is it not true to say that since 1979 the increase in the cost of renting accommodation has been less than the increase in the cost of living?
  Mr. Raynsford: I was quoting the figures for the period from 1979 to 1985.
  Mr. Butterfill: The hon. Gentleman is being selective again.
  Mr. Raynsford: No. That is the latest period for which figures are available from the Department. I took them straight out of the latest published housing and construction statistics.
  The Minister has been extraordinarily generous in giving us statistics on shorthold tenancies. I am sure that he would like the House, therefore, to have the most upto-date statistics. I am quoting his Department's figures. He may not like them, nor may Conservative Members, but they are their figures.
  The title of the first of these orders is the Rent (Relief from Phasing) Order. It provides relief from phasing for landlords, but it does not provide relief from phasing for tenants. It removes relief from steep rent increases. Many of my constituents are facing very steep rent increases. Rent officers in the London area are fixing rents at figures that are substantially higher than the rate of inflation. There is no justification for the order. It is being moved on a bogus premise and it should be rejected.
  The second order is the Protected Shorthold Tenancies (Rent Registration) Order. Here the Government are ratting on commitments that were given by previous Ministers. I say that advisedly. During the debate on the Housing Bill in 1980 the then Minister for Housing was challenged about what would happen, because a power was available to Ministers to vary the provision for rent registration. The then Minister for Housing said:
  "However, I cannot agree that the shorthold proposals are basically unreasonable or unfair to tenants. Tenants will have to pay no more than a fair rent as provided by other rent legislation … There will be no deregistration to market rents."—[Official Report. 15 January 1980; Vol. 976, c. 1564.]
  Tonight we have a simple case of the Government reneging on Minister's pledges.
  Sir Geoffrey Finsberg: The quotation that the hon. Gentleman has given destroys the snide case that he has been making. The Minister said that there would be no deregulation to market rents. What this order is doing is getting deregulation to fair rents, but it is still permitting the regulation to be applied if the tenants want it. There is a difference between market rents and fair rents, and the hon. Gentleman knows that.
  Mr. Raynsford: The hon. Gentleman knows from his experience of the London housing market that the majority of lettings in London are outside the rent registration procedures. Figures suggest that a small minority of lettings in London are registered. The problem with this safeguard is that it will subject—as has been made clear by Opposition Members—tenants, who are by definition in an insecure position, to pressures from landlords against getting the rent registered. Tenants will be told that if they apply for rent registration they will be out. That is the kind of pressure that is being exerted on tenants in London, and it will intensify as a result of this shabby order.
  We know that the pledges given by the Ministers cannot be trusted. What surprises me is that the orders are before
  1102
  us not for a sound policy reason, not even for a policy reason based upon proper analysis, but on the basis of a vague hope that a few extra shortholds will be conjured into existence in London. What an appalling comment. The Minister has been unable to give us any figures on the number of shorthold tenancies, when he is proposing an order which is designed to increase the number of shorthold tenancies. It is a pretty sad comment that the Government's grasp of the subject is so poor that they do not have an analysis of the current position. Perhaps the Minister is able to give us figures, but a few weeks ago, one of his colleagues, in answer to me, was unable to do so.
  The problem with these orders is that they are meanspirited measures that will penalise a number of private tenants, increase insecurity and anxiety, and fail abjectly in their supposed objective of creating new lettings. I hope that the House will reject these shabby and mean-spirited orders.
  10.37 pm
  Mr. Peter Bruinvels: Speaking after the hon. Member for Fulham (Mr. Raynsford) is quite depressing, because of his jaundiced and snide remarks. These are good measures, and all the hon. Gentleman is seeking to do is deter potential landlords from offering shortholds. This scare and smear tactic is completely unacceptable to people who are desperately seeking accommodation in London and elsewhere and who have a real opportunity under these two measures, which are welcomed by those who want to work in London. The Labour party spends its whole time knocking the Government over the unemployment figures. My hon. Friend the Minister is making a positive contribution and Labour Members baulk at it.
  The shortage of short-term rented accommodation is becoming almost a national crisis. Whether or not the problem is mainly in London, it has certainly affected the employment situation. We all know that shorthold has been possible since 28 November 1980, but because it has been so difficult to remove difficult tenants who do not pay their rent, many landlords have hesitated to put their houses out to rent.
  It is a smear tactic to criticise the landlords. The majority of potential landlords are decent people. Some of them have large properties. As the hon. Member for Leeds, West (Mr. Meadowcroft) said in his excellent speech, there are housing problems. I do not think that I am risking anything by saying that, if the hon. Gentleman ever wishes to join the Conservatives, we would welcome him, especially in considering housing matters.
  We certainly need more private sector rented accommodation. The orders will ensure that more properties become available. I shall continue to express concern at the lateness of repairs on properties sometimes, but, nevertheless, the measures are welcome. Years ago, private sector rented accommodation was a growth industry. Only abuses and the failure to repair property led to things going wrong. Because tenants had security of tenure, many potential landlords were deterred from lettng property.
  The shorthold requirements, giving a fixed term tenancy, whether for one year or five years, will encourage many potential landlords to come forward. It is unfair for the hon. Member for Fulham to rubbish the tenant protections in the orders. It is clear to all Conservative members that any tenant on a shorthold tenancy will be

  1103
  safe for the full period of the tenancy, provided that he does not break the conditions of the tenancy. That is a fair, just and equitable way of dealing with the housing shortage, especially in London.
  The arrangements for shorthold tenancies make it possible, subject to the usual conditions, for the tenancy to be liable for renewal after the shorthold period ends. That is a good provision. Fair rents may still be registered for all shorthold property. I do not believe that the majority of landlords will abuse the system. Of course, I believe in a market economy. Rents obviously must be fair. I should think that the proposed fair rent charges will be agreed on both sides. A landlord will have the right to repossess at the end of the shorthold tenancy, and that must be welcome news. At least a future tenant will know that he can go to London or Leicester for a minimum of five years, provided he honours the conditions of the tenancy. That will mean labour mobility, which must mean good news for employers who want to take on extra staff and for potential landlords who can increase their reserves by letting out part of their property. It is a crying shame that many houses fall into disrepair because no extra funds are coming into the household. As my hon. Friend the Minister made clear, the ability of any tenant to claim housing benefit on higher rents will not be affected by these changes.
  The orders are good news for the tenants who want to move to better jobs. They are good news for the employers. They will ensure that housing becomes available to all. They will ensure that the landlord and the tenant have rights. I hope that houses will be kept in good repair. On that basis, we should support the orders.
  10.43 pm
  Mr. Geoffrey Lofthouse: I was interested to hear the hon. Member for Leicester, East (Mr. Bruinvels) say that the orders are good news for all. There are other places apart from London, and I think that the mining communities will not share his views. The authorities there did not wait for these two shabby orders before starting to implement Rachman tactics with former National Coal Board houses. The hon. Member for Bournemouth, West (Mr. Butterfill) said that he does not support the racketeers cashing in on short-term tenancies. I do not know whether the Minister, or indeed the House, knows what is happening at present. Coal Board estates, homes belonging to miners who have worked in the mining industry all their lives, are being flogged off at auctions, being put out to tender, and going for very low prices. Then, within days, some of the purchasers, who are not known to the tenants, are offering to flog them off to the tenants at prices far in excess of what they purchased them for, knowing full well that the tenants are not in a position to purchase them.
  Mr. Butterfill: Is it not true, though, that the properties are offered first to the tenants before they are sold by public auction? They are only sold when the tenants decline to buy.
  Mr. Lofthouse: It is true of some of the properties, but not all. The fact is that the tenants have not been able to purchase them. Some of them are elderly, retired miners who are unable to get mortgages.
  1104
  Let me describe a classic case of a shorthold tenancy. I have in my possession a letter from a firm of solicitors to a couple residing just outside the borders of my constituency. It is to offer them a shorthold tenancy of a Coal Board house purchased only a few weeks previously and it says:
  "We act on behalf of the owners of the above property, your proposed Landlords, and are informed by their Managing Agents, Messrs,. Michael A. Wrest & Co. of Cockerham Hall Mews, Huddersfield Road, Barnsley, that you have agreed to take a tenancy of the above property for a period of one year subject to Contract."
  Nowhere does it say who the landlord is. It goes on to give the terms of the agreement, as follows:
  "The weekly rent is thirty-five pounds. The commencement date is 30th January 1987."
  Many of these miners have, over the years, enjoyed low rents, in accordance with their agreements with the Coal Board. Apart from that, many of the sitting tenants have had a fair rent fixed for their properties. That is about £21 a week, including rates. This agreement is offering the property to these tenants at £35 a week plus general rate and water rate.
  The letter goes on:
  "The agreement to be used is a 'Protected Shorthold Tenancy'. Under its terms your Landlord is committed to granting you a tenancy of the property for one year. At the end of the year it may be terminated by Landlord and possession of the property can be recovered. You can give one month's notice of termination at any time."
  We have heard from Conservative Members, quite rightly, that there is a right to apply to have a fair rent fixed. In accordance with law that is right, but in practice these people who have a roof over their heads for the short period of 12 months will be frightened to death to go and ask for a fair rent to be fixed because they believe the landlord may then turn them out at the end of the 12 months. That is what will happen.
  The letter continues:
  "Payments you must make."
  This is over and above the £35 a week plus the general rate and water rate. It states:
  "When you sign the Tenancy Agreement you will have to make the following payments: four weeks rent in advance, £140: breakage deposit, £150; legal fees, £63·50. Total amount required, £353·50 .
  In the area that I represent we call that key money, and if someone cannot pay it he does not get the key.
  Mr. Peter Hardy: The sums to which my hon. Friend has referred are substantial, and perhaps more substantial to him than to Conservative Members. Will he estimate the price that the company paid for the houses and the profit that is being made?
  Mr. Lofthouse: I do not have the exact figures, but the houses have been available in the area for £2,500 to £3,000. We are talking about landlords who are moving into these markets and recouping their money within two years. If that can be considered as fair within the context of shortterm tenancy agreements, what cannot? If that is the type of landlord that we are being asked to sustain, who else are we to support'? We have heard about Christian gentlemen who put their money into housing because they want to provide homes for others, and I do not deny that they are to be found, but there are landlords who take a different view.
  There are areas where people are desperate for homes. Some of my constituents who are anxious for a tenancy have, through no fault of their own, never held a job since

  1105
  they left school. They are desperate for a home and they will take almost anything that is available. If someone in that position is able to find £350 and he obtains a tenancy, he may qualify for a rent rebate, but that will mean that the state will be sustaining racketeer landlords who are charging excessive rents.
  Mr. Rooker: If the local authority does not agree that the rent is fair, it is not required to meet all the costs of the rent in housing benefit.
  Mr. Lofthouse: I appreciate that.
  Unfortunately, there are those who take on the agreements that I have described who find that they cannot meet their commitments. When that happens, they are out on the street in two months' time in the lap of the social services department and the local authority.
  So-called landlords—they are racketeers—have gone to auctions and purchased tenancies for knock-down prices in an attempt to cash in on the unfortunates who have no option but to accept their terms. If that is the case for short-term tenancies, I do not want it, and I do not think that many Conservative Members do. Youngsters who are desperate for homes are willing to put their signatures to the agreements that I have described because they have no option but to do so. They want somewhere to live. They want somewhere to take their babies or small children. They want to move away from their in-laws. They are desperate, and they are being forced into accepting the conditions of racketeers. If the orders are paving the way for the actions of these so-called landlords to be made legal, they should be slung out.
  10.55 pm
  Mr. Mike Woodcock: I am not sure how the speech of the hon. Member for Pontefract and Castleford (Mr. Lofthouse) was related to the orders before the House.
  Mr. Lofthouse: I was talking about short-term tenancies.
  Mr. Woodcock: I understand the problems that the hon. Gentleman was discussing, but the orders bear no relation to those problems.
  I welcome the improvements to the working of the Rent Act 1977, although they are fairly minor. If owners of properties have waited two years for a review of rent, why should they wait a further year to collect the rent that has been determined at today's values? Whatever the situation in the housing market there is no justice in that delay. Bringing London's protected shorthold tenancies into line with those in the rest of the country will increase the supply of housing accommodation in the capital.
  Although I offer my hon. Friend the Minister mild congratulations on introducing these minor orders, I must remind him that since the Government have been in power the national stock of private rented accommodation has decreased by 25 per cent. from 2 million units to 1·5 million. At the same time, vast numbers of people desperately need to rent accommodation. They may need temporary accommodation. They may be moving between homes, the victims of broken homes, new households or many others.
  Local authorities and housing associations cannot always meet those needs. There is no reason why they
  1106
  should. The law should bring together people who need accommodation and those who are prepared to invest in housing. All to often it has kept the two groups apart.
  Tonight's orders are sensible, but the Minister needs to go much further to rejuvenate the private rented sector. The Minister should also consider the basis on which rent officers determine fair rents. They may be called fair rents, but there they are not economic rents. If they were economic more people would be moving into the private sector rather than out of it.
  It is in everyone's interests to have more investment in housing. I should like the Minister to introduce an order to allow a rent registration that is determined within a protected shorthold tenancy to die with that tenancy. The present rules prohibit that. An application for the registration of a fair rent cannot be made within two years. That has resulted in vast numbers of properties in London and elsewhere remaining empty until the end of two years. The Minister should consider applying that sensible reform on the cessation of any tenancy or in any circumstance where both landlord and tenant jointly apply for the cancellation of a registered rent. The present rules leave properties standing empty.
  The Minister should also consider ending the provision whereby local authorities can apply for the registration of a fair rent even when both landlord and tenant do not wish that to happen. That provision is being used by some leftwing authorities to help to destroy what is left of the private rented sector.
  The orders are sensible, but they are relatively minimal. I urge my hon. Friend to go further and allow the private rented sector to play as important a part in meeting housing needs as already happens in many countries in western Europe and the United States.
  10.58 pm
  Mr. Jeremy Hanley: I apologise for my absence during the first few minutes of the debate, but I was in Manchester on parliamentary business until 7 o'clock. The fact that I was able to return especially for the debate is thanks to the efficiency of British Rail and my wife's excellent driving.
  Mr. Meadowcroft: Is she a train driver?
  Mr. Hanley: No, but I have no doubt that she would he as good at that as she is at driving a car.
  I speak tonight with a heavy heart. My hon. Friend the Minister is one of the most sensitive Housing Ministers for many years. He has shown great sensitivity in dealing with the problems of the former and existing council estates in Castelnau in my constituency. In fact, his concentration on the particular problems of the Booth PRC estate there has won him many friends.
  However, in exactly the same ward the private tenants—and there are many of them in my constituency— cause me great concern. They have missed out on the vast increase in house prices, which has been particularly exaggerated in my constituency. Many of them have fixed or very low incomes. Indeed, many of them have lost housing benefit.
  The Minister has said on many occasions that we need another 1 million housing units, but on each occasion, and whenever he has mentioned reforms of the Rent Acts, he has said that existing tenants would be protected. I have passed on letters from him to my constituents when they

  1107
  have been whipped up by scares from Labour or Liberal politicians claiming that the Rent Acts will cause great problems to private tenants.
  However, one of the orders we are considering does affect existing tenants. I know that all rights cannot remain enshrined for all time, but in this matter many of my private tenants are gravely affected. Many have written to me, and one of them said:
  "In the last two rent reviews of my flat, the Richmond rent officer has leaned heavily on the side of the landlord, specifically to increase the landlord's return on investment. We have been told that this will continue until these rents equal those on the open, uncontrolled market … Furthermore, the rent officer's latest award to the landlord of our flat was a rent increase totalling 98 per cent. It would have created considerable hardship to have to pay this at once instead of in two phases. For those on fixed incomes—like a great many in the estate where I live—or those whose wages or salaries do not increase anything remotely approaching 98 per cent. over a two-year period, the hardship would be most severe."
  That was one of 25 letters that I have received only this week.
  During our conversations over the past two days, when I drew attention to this grave matter, the Minister said that he had not received anything like that sort of representation from any other part of the country. All that I can say is that the people in my constituency tend to be extremely well informed and well ahead of public opinion trends. I can assure the Minister that, after tonight, many more people will have heard of it.
  Another constituent wrote saying:
  "The complex of flats in which I live—for 18 years—were relatively recently acquired by a company … Following an external face lift and decoration of the common parts my rent, from 28th May 1986, was increased from £1,340 to £2,740—a 103 per cent. increase … Complexes such as ours acquired by large, and often foreign, organisations, make a mockery of such a proposition."
  Another wrote saying:
  "My husband and I are both pensioners and we have been private tenants here for the last 20 years."
  That is not 20 years clocking up discounts to buy their own property; that is not 20 years clocking up the right to buy. They cannot move and take their rights with them. They have lived there for 20 years because they could not afford to live anywhere else. Even if they could have put themselves on to the council housing list, they were probably either too proud or too generous to this country to do so. One is 68 and the other 71, and in addition the wife has to have a part-time job to help pay the rent. They receive a rate rebate of £13 per fortnight, but, as the wife says:
  "The rents went up last year, so I managed to do another five hours a week to compensate, and the council immediately knocked at least a pound off the allowance. You see we are borderline cases— ex-service personnel (as if that meant a thing these days)."
  Yet another constituent wrote:
  "The elimination of the phased increases in Fair Rents over two years may well force many tenants to seek support or alternative accommodation from the Local Authorities, thus increasing the demands on rates and taxes. As a resident in a purpose built block of flats"—[Interruption.]
  This is a very serious matter, and only Liberals would laugh at it. The letter continued:
  "I have to inform you that when the flats … become vacant they are not relet but sold to long leaseholders, thereby
  1108
  giving the Landlord the opportunity to make a quick and exorbitant profit followed by equally exorbitant service charges."
  Another constituent has written and this lady might be of interest to the Government. She writes:
  "Since your Government came into office you have already reduced the period of re-registration of rents from 3 years to two years.
  I would like to point out, and there are many more people in a situation like myself, who have landlords whose only aim is money, money and more money, and who demand high rent increases at each re-registration, that if it were not for the protection of the Rent Officer, we would all be out on the streets without a home…I would also point out to you that where I live, the number of people voting Tory is very high indeed, but I for one will not be voting for you again and I have had others say this to me."
  That constituent is a private secretary to a member of the Cabinet. She is changing her loyalties because she believes that she has been badly treated.
  She continues:
  "I am told that Mr. Patten is proposing this 'in line with inflation which is now down to 3%'…Only last week we are told the Water Rate is going up by 5½%"
  —and, she says, that the Liberal council will increase her rates by 16 per cent.
  Those increases will fall very hard on the private tenants and I suspect that none of them will have faced a rent increase of as little as the present rate of inflation.
  I could quote from many other letters, but time precludes that. However, I shall mention one from an old-age pensioner, whose rent increased from £1,085 in February 1985 to £1,760. Thanks to the two-year phasing it went from £1,085, to £1,462 to £1,760.
  I am afraid that it is no comfort to my constituents that that last bit of generosity to tenants will be taken away tonight. Why change that generosity and hurt many of those who have supported the Government in the past and who have also supported the nation fearlessly? Why do that just to support landlords, many of whom are corporations and many of whom are based abroad?
  As I have said to my hon. Friend the Minister in conversations during the past few days, many people in my constituency are well-informed and they will make sacrifices to help the Government. That is the sort of person who has made sacrifices for us in the past, and if, by voting against this order tonight, I shall be sacrificing my future, I hope that that will be for the many who have, as I have said, sacrificed their past to help all of our futures.
  11.7 pm
  Mr. John Fraser: At Question Time today we had an admission of the record number of those who were rendered homeless last year. The figure was over 100,000. If one considers the area of greatest housing stress, Greater London, one sees from the figures published only a few months ago by the Association of London Authorities that in the 16 stress Labour authorities in London the number of people in bed and breakfast accommodation was forecast to rise from about 6,600 in the first quarter of this year to about 12,000 in two year's time, in the first quarter of 1989. That is another sign of the growing and extraordinary crisis facing those who are less well-off in the capital city and elsewhere too.
  The first question that one has to ask oneself is whether the two orders will make any contribution to solving the extraordinary housing crisis, especially in our urban conurbations. The answer must be that the orders will

  1109
  make no contribution whatever in that direction. In fact, the order that deals with shorthold tenancies will contribute to the growing queue of homelessness in the same way as the statistics that were garnered by my hon. Friend the Member for Fulham (Mr. Raynsford) show the number of owner-occupiers who are now joining the homeless queue. Therefore, these orders will do nothing to address the major renting crisis.
  It is argued that private landlords have a contribution to make towards providing housing, but no evidence has emerged from the debate that that is so. Generally speaking, private landlords fall into two categories. There are the private landlords who are not in the business for gain, of whom there are not many and often they are not competent to look after such a large capital asset as a home for someone else. I do not say that maliciously. The cause of much deterioration in our private housing is partly that rents are not sufficient to meet repair costs, and everybody recognises that.
  The second type of private landlord may have the competence to look after one or two houses, but he has no interest in doing it. He is the commercial private landlord, who is simply in the business to extract as much gain as possible. Both parties have a great deal of experience, going back to the Rent Acts, but nothing that has happened in the past 30 years gives the slightest indication that relaxations or changes in rent control will contribute to additional private sector housing provision.
  The right way to proceed is to encourage local authorities to build and rent—over the past eight years their programmes have been savaged — housing associations to build and rent, and responsible, licensed professional landlords to provide housing under assured tenancy schemes. A contribution to the condition of privately rented accommodation can be made by giving private tenants the right to buy in the same way as public sector tenants have that right.
  The relief from phasing order has no effect on the supply of accommodation. We were given various figures about rent rises recorded by rent officers. The figures provided in parliamentary questions show a rent rise of about 9 per cent. per annum, which is more or less standard across the country. The evidence garnered by private tenants' organisations shows an average rent rise imposed by rent officers of about 17 per cent. The evidence that we have heard in a courageous speech from the hon. Member for Richmond and Barnes (Mr. Hanley) shows rent rises of up to 98 per cent. In my constituency there may be isolated examples of private tenants' rent increases of about 60 per cent. They are not unimportant to the tenants concerned.
  All those rent rises seem to affect the group of people who fall outside the housing benefit safety net. They have probably saved or contributed towards an occupational pension, and they have the most to lose. They lost from the withdrawal of the electricity scheme introduced by the Labour Government and they are shattered to receive a rate rise of up to 70 per cent. They come to my advice bureau and say, "I do not know how I can continue the sort of life that I have led with this sort of rent rise."
  Mr. Hanley: I am most grateful to the hon. Gentleman for allowing me to intervene and for his compliment. However, I am afraid that in one letter which time precluded me from reading out a constituent said that the real fear of removing the phasing of tenancies was caused
  1110
  by the remote possibility of a Labour Government being elected and taking us back to the high levels of inflation that we experienced in the time scale that caused phasing originally. That, coupled with the inflation rates that we experienced during the Lib-Lab pact, is a serious fear for those people.
  Mr. Fraser: The hon. Gentleman has partly lost the admiration that he earned for his courageous speech.
  The order relating to ending the obligation to register a rent for protected shorthold tenancies will create the risk of a larger number of people eventually coming into the homeless queue. There is a gross abuse of Rent Act accommodation by private landlords throughout much of Greater London. Very few shorthold tenances are created, partly because there is the requirement to register the rent, and partly because the provisions about notice are regarded by most landlords as being difficult to comply with.
  The central reason why private landlords do not go in for granting shorthold tenancies is that the attention of the tenant is drawn to the obligation to register the rent. Therefore, they engage in a whole series of other strategies to get high, uncontrolled rents. Sometimes they use the advice of the company let, and sometimes they trade on the ignorance of tenants who believe that furnished tenancies—they provide a minimum of furniture—are not subject to control. In many cases they do not rely upon any loophole in the law. They used to rely upon licences, but that has been brought to an end by the House of Lords case in Street and Montford. However, they have relied on the sheer ignorance of the tenants. Many landlords exploit the shortage of housing to rent in central London and demand very high rents from tenants.
  After a time the tenants find that they are not able to keep up with the high rents. They often do not qualify for housing benefit at the full rate, and eventually they find that they are in debt and cannot keep up the payments. They have then to look to the private sector or the homeless queue for their next tranche of accommodation.
  There is the risk that if tenants are properly advised they will go to the rent officer and get a registered rent. If they take legal advice from a law centre, or a solicitor, or whatever, they can establish a protected tenancy and the landlord is defeated. However, very few people do that. The removal of registration of rents from shorthold tenancies in central London will give those landlords a legal cover that was not previously available. They will have the advantage of the unregistered rent and the advantage of the absence of security of tenure. Therefore, although it will not add to the supply of accommodation, it will add to the supply of people going on to the homeless list. That is why I believe that the last order that I mentioned runs counter to any assistance that could be given to the relief of homelessness and the shortage of housing.
  If the Government were serious about these matters, they would not dip their toes in the pool of decontrol. They would be addressing their minds much more seriously to the central problems of homelessness and the shortage of housing to rent in the capital.
  11.18 pm
  Mr. John Patten: This has been an extremely interesting debate, almost without exception. There have been some thought-provoking contributions. I have been given pause

  1111
  for thought by several things that have been said, and perhaps we will get a chance to air them in a debate in the not too distant future.
  It was clear from the characteristically forceful and thoughtful contribution of the hon. Member for Birmingham, Perry Barr (Mr. Rooker) that he wants the Rent Act strengthened and that he wants to see the end of the private sector in Britain. Britain is currently losing 70,000 private rented tenancies a year. The sector is vanishing and it will be gone by the year 2000. That is what the Labour party and the hon. Member for Perry Barr want to see, but with some important exceptions, which he acknowledged and which I should like to reinforce.
  The hon. Member once more asserted his support and the support of his party for shared ownership and assured tenancies. I welcome that. It is important that those messages continue to be given to the housing association movement and investing institutions that wish to become involved in those forms of tenure. He also gave a fairly unqualified welcome for the thought, under certain conditions, of building societies and pension funds investing in this sort of tenure. That is important. His hon. Friend the Member for Norwood (Mr. Fraser) talked about the need for licensed professional landlords. That is an area of agreement between the Labour party and the Conservative party upon which we can build in the future. I welcome that consensus, although we fundamentally disagree about the private rented sector as a whole.
  The hon. Member for Perry Barr asked about the statistics of rent increases in recent years in the private rented sector. I think that he based his ideas mainly on the interesting brief circulated by Shelter on behalf of 10 local associations representing people in the private rented sector. In particular, the hon. Gentleman quoted a 17 per cent. rent rise in the first half of 1986. That statistic is based upon the kind of calculation that Ministers are normally accused of trying to get away with. That figure actually relates to rent for the previous two years. The rents were really rising at the rate of 8 . 5 per cent. a year. Sometimes the Government are criticised for misusing statistics. I shall have to speak to my friend Sheila Mckechnie the next time I meet her and ensure that in future we have a common understanding about the basis of statistics, such as that quoted by the hon. Member for Perry Barr.
  The most important point is that private rents rose by 340 per cent. between 1970 and 1986. That must be compared to the rise in the retail prices index during the same period of 417 per cent. Local authority rents increased by more during that time, by 581 per cent., and average earnings increased by 579 per cent. That is the true picture over 16 years, and that shows the true scale of the rise in private rents. That rise is set in context when those figures are considered together.
  It is also very important to recognise that the average unfurnished weekly tenancy in England and Wales is let at £19·63and the average for a furnished let is £28. The figures for London are £24·92 and £35·94 respectively. Some of the figures—
  Mr. Lofthouse rose—
  Mr. Patten: I shall consider the points made by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) in a moment. He raised some very important and disturbing points, which I shall try to address shortly.
  The hon. Member for Perry Barr asked how many people in private rented tenancies enjoyed housing benefit. The exact number is 626,000. That is nearly one third of all private sector tenants. The hon. Gentleman and the hon. Member for Fulham (Mr. Raynsford) are correct, in that we do not have up-to-date figures of the number of shortholds. We have the figures relating to 1981, when shorthold records were kept in the fair rent registrations for the country, and there were about 5,000 such tenancies then. We have not kept the figures since then, although the Office of Population Censuses and Surveys in its examination of new lettings for the Department in 1986, showed that shorthold is a widely understood and appreciated form of tenure in the country outside London.
  The hon. Member for Pontefract and Castleford caused me considerable concern. I know that in recent weeks there have been discussions with British Coal about the sale and disposal of ex-Coal Board houses. I understand that under the new approach auction will be a matter only of last resort, and that will be welcomed.
  The hon. Member for Pontefract and Castleford produced some disturbing pieces of evidence in the letter that he read out. I would be extremely grateful if the hon. Gentleman would pass that correspondence to me, in the same way as his hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) has passed me correspondence across the Dispatch Box, so that I can examine that information and reply as soon as possible.
  The contribution on these matters from the Liberal Benches came from the hon. Member for Leeds, West (Mr. Meadowcroft), and I congratulate the hon. Gentleman on his new role as the housing spokesman for the alliance. He made a remarkable contribution, which was widely appreciated on the Conservative Benches, although having made his remarkable contribution he finished by saying that he would vote against the two orders. None the less, the first seven eighths of the hon. Gentleman's speech was splendid stuff and we were about to offer him a job on the basis of his comments.
  The hon. Gentleman shot holes through the Labour Front Bench argument about the immorality of making profits from renting. Any of my hon. Friends who were not in the Chamber when he made his speech should look in tomorrow's Hansard at his argument. What he said is important, because we want respectable and responsible landlordism, as much in the public and in the private sector. Again, there is a wide agreement across the Chamber that that is what we want to see.
  Just as it is important that we welcome the limited concessions from the Labour party about shared tenancies and shared ownership, and the possibility of building society and pension fund investment in the private rented sector, so I welcome what seemed to be implicit in the hon. Gentleman's speech—that it is not alliance policy to be completely against the private sector, and in certain circumstances the alliance would be prepared to look again at this. I am not seeking to get the hon. Gentleman into a corner and make pledges that we can use in the general election. If he is called in the debate on Tuesday, he can make his views known then. However, he has made the important statement that the alliance is not against the private rented sector.

  1113
  Some important messages are going out from the speeches made by the hon. Members for Perry Barr and for Leeds, West to investing institutions, such as the pension funds and the building societies, which are queueing up to invest in rented housing as responsible landlords. We all wish to see that.
  It was marvellous to hear the critical analysis of my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) of the two orders. He was right about the importance of phasing. I was interested to hear his remarks about shortholds, because he was one of the architects of the shorthold idea in the early 1980s. He asked me specifically whether new forms on shortholds will say that it will be open to the tenant or the landlord to get a fair rent registered. The answer to that is a clear and unequivocal yes, and I hope that he will forgive me if I write to him soon about the detailed point raised by his friends about housing associations.
  Sir Geoffrey Finsberg: My non-friends.
  Mr. Patten: I apologise— my hon. Friend's non-friends.
  My hon. Friends the Members for Bournemouth, West (Mr. Butterfill) for Leicester, East (Mr. Bruinvels) and for Ellesmere Port and Neston (Mr. Woodcock) all made substantial contributions. They recognised that if we can find ways of getting some consensus between the parties about some parts of private renting, it will be possible to house the homeless, those seeking jobs in new areas, and young people at the end of housing queues. We need greater investment in housing and more diversity of sources into different forms of tenure. I welcome that.
  My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) made a thoughtful and brave speech in the interests of his constituents. 1 regret that he has decided that he will vote against us. Perhaps in the last two minutes he will reconsider his position. I have sympathy with his views and with the position of the tenants concerned. However, the case in question is not typical, and the rent increases that he quoted at least in part reflect substantial expenditure on the properties to which he referred. The average rent of an unfurnished property in London is £25 a week. Increases above the rate of inflation are often the direct consequence of rent control. Rent rises were held down in the 1970s, with the result that a catching-up period was, alas, inevitable.
  I hope that the House recognises the case for making these orders. They will encourage the provision of more homes for rent in our capital and in Britain as a whole. I think that they will also help to fill some empty homes. That is our main consideration, and I ask the House to support these modest but worthwhile measures.
  Question put:—
  The House divided: Ayes 155, Noes 92.

  Division No. 81]

  [11.30 pm

  AYES

  Baldry, Tony

  Durant, Tony

  Bevan, David Gilroy

  Finsberg, Sir Geoffrey

  Boscawen, Hon Robert

  Forsyth, Michael (Stirling)

  Brandon-Bravo, Martin

  Forth, Eric

  Bruinvels, Peter

  Franks, Cecil

  Bulmer. Esmond

  Fraser, Peter (Angus East)

  Burt, Alistair

  Freeman, Roger

  Butterfill, John

  Galley, Roy

  Cockeram, Eric

  Garel-Jones, Tristan

  Colvin, Michael

  Gow, Ian

  Cope, John

  Gregory, Conal

  1114

  Griffiths, Sir Eldon

  Page, Sir John (Harrow W)

  Griffiths, Peter (Portsm'th N)

  Page, Richard (Herts SW)

  Ground, Patrick

  Patten, J. (Oxf W & Abgdn)

  Gummer, Rt Hon John S

  Pawsey, James

  Hamilton, Hon A. (Epsom)

  Pollock, Alexander

  Hamilton, Neil (Tatton)

  Powell, William (Corby)

  Hannam, John

  Powley, John

  Hargreaves, Kenneth

  Proctor, K. Harvey

  Harris, David

  Raffan, Keith

  Harvey, Robert

  Rathbone, Tim

  Hawkins, Sir Paul (N'folk SW)

  Rhodes James, Robert

  Hayes, J.

  Rhys Williams, Sir Brandon

  Heddle, John

  Ridley, Rt Hon Nicholas

  Hind, Kenneth

  Roberts, Wyn (Conwy)

  Hirst, Michael

  Robinson, Mark (N'port W)

  Hogg, Hon Douglas (Gr'th'm)

  Roe, Mrs Marion

  Holland, Sir Philip (Gedling)

  Rowe, Andrew

  Holt, Richard

  Sackville, Hon Thomas

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

  Sainsbury, Hon Timothy

  Howarth, Gerald (Cannock)

  Sayeed, Jonathan

  Hubbard-Miles, Peter

  Shaw, Sir Michael (Scarb)

  Jackson, Robert

  Shelton, William (Streatham)

  Jenkin, Rt Hon Patrick

  Silvester, Fred

  Johnson Smith, Sir Geoffrey

  :Sims, Roger

  Jones, Gwilym (Cardiff N)

  Skeet, Sir Trevor

  Jones, Robert (Herts W)

  Smith, Tim (Beaconsfield)

  Key, Robert

  Soames, Hon Nicholas

  King, Roger (B'ham N'field)

  Speller, Tony

  Knight, Greg (Derby N)

  Spencer, Derek

  Knight, Dame Jill (Edgbaston)

  Spicer, Jim (Dorset W)

  Knowles, Michael

  Spicer, Michael (S Worcs)

  Lang, Ian

  Stanbrook, Ivor

  Latham, Michael

  Steen, Anthony

  Lawler, Geoffrey

  Stern, Michael

  Lee, John (Pendle)

  Stevens, Lewis (Nuneaton)

  Leigh, Edward (Gainsbor'gh)

  Stewart, Allan (Eastwood)

  Lennox-Boyd, Hon Mark

  Stewart, Andrew (Sherwood)

  Lightbown, David

  Stradling Thomas, Sir John

  Lloyd, Peter (Fareham)

  Taylor, John (Solihull)

  Lord, Michael

  Temple-Morris, Peter

  Luce, Rt Hon Richard

  Terlezki, Stefan

  Lyell, Nicholas

  Thomas, Rt Hon Peter

  MacGregor, Rt Hon John

  Thompson, Donald (Calder V)

  MacKay, John (Argyll & Bute)

  Thompson, Patrick (N'ich N)

  Maclean, David John

  Thurnham, Peter

  McLoughlin, Patrick

  Townend, John (Bridlington)

  McNair-Wilson, M. (N'bury)

  Trotter, Neville

  Major, John

  Twinn, Dr Ian

  Malone, Gerald

  Waddington, Rt Hon David

  Marland, Paul

  Wakeham, Rt Hon John

  Mather, Sir Carol

  Walden, George

  Maude, Hon Francis

  Waller, Gary

  Maxwell-Hyslop, Robin

  Ward, John

  Mayhew, Sir Patrick

  Wardle, C. (Bexhill)

  Merchant, Piers

  Warren, Kenneth

  Meyer, Sir Anthony

  Watts, John

  Miller, Hal (B'grove)

  Wells, Sir John (Maidstone)

  Mills, Iain (Meriden)

  Wheeler, John

  Moate, Roger

  Whitfield, John

  Morris, M. (N'hampton S)

  Wilkinson, John

  Morrison, Hon P. (Chester)

  Winterton, Mrs Ann

  Nelson, Anthony

  Winterton, Nicholas

  Neubert, Michael

  Wood, Timothy

  Newton, Tony

  Woodcock, Michael

  Nicholls, Patrick

  Norris, Steven

  Tellers for the Ayes:

  Onslow, Cranley

  Mr. Richard Ryder and

  Oppenheim, Phillip

  Mr. Michael Portillo.

  Osborn, Sir John

  NOES

  Adams, Allen (Paisley N)

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

  Alton, David

  Caborn, Richard

  Beith, A. J.

  Carlile, Alexander (Montg'y)

  Benn, Rt Hon Tony

  Clark, Dr David (S Shields)

  Bermingham, Gerald

  Clarke, Thomas

  Boyes, Roland

  Clay, Robert

  Bray, Dr Jeremy

  Clwyd, Mrs Ann

  Brown, Gordon (D'f'mline E)

  Cocks, Rt Hon M. (Bristol S)

  Brown, Hugh D. (Proven)

  Cook, Frank (Stockton North)

  1115

  Cook, Robin F. (Livingston)

  McKay, Allen (Penistone)

  Cunliffe, Lawrence

  McWilliam, John

  Cunningham, Dr John

  Madden, Max

  Dalyell, Tam

  Marek, Dr John

  Davies, Ronald (Caerphilly)

  Martin, Michael

  Deakins, Eric

  Maxton, John

  Dixon, Donald

  Meadowcroft, Michael

  Dormand, Jack

  Michie, William

  Dubs, Alfred

  Milian, Rt Hon Bruce

  Duffy, A. E. P.

  Morris, Rt Hon J. (Aberavon)

  Eadie, Alex

  Nellist, David

  Evans, John (St. Helens N)

  O'Neill, Martin

  Fatchett, Derek

  Parry, Robert

  Faulds, Andrew

  Patchett, Terry

  Fields, T. (L'pool Broad Gn)

  Pendry, Tom

  Foster, Derek

  Pike, Peter

  Fraser, J. (Norwood)

  Powell, Raymond (Ogmore)

  Freud, Clement

  Prescott, John

  George, Bruce

  Raynsford, Nick

  Golding, Mrs Llin

  Redmond, Martin

  Hamilton, James (M'well N)

  Robinson, G. (Coventry NW)

  Hanley, Jeremy

  Rogers, Allan

  Hardy, Peter

  Rooker, J. W.

  Hogg, N. (C'nauld & Kilsyth)

  Ross, Ernest (Dundee W)

  Howarth, George (Knowsley, N)

  Rowlands, Ted

  Howells, Geraint

  Shore, Rt Hon Peter

  Hoyle, Douglas

  Skinner, Dennis

  Hughes, Robert (Aberdeen N)

  Soley, Clive

  Hughes, Sean (Knowsley S)

  Spearing, Nigel

  Hughes, Simon (Southwark)

  Steel, Rt Hon David

  Jones, Barry (Alyn & Deeside)

  Strang, Gavin

  Kirkwood, Archy

  Wallace, James

  Lamond, James

  Wardell, Gareth (Gower)

  Leighton, Ronald

  Welsh, Michael

  Livsey, Richard

  Winnick, David

  Lloyd. Tony (Stretford)

  Lofthouse, Geoffrey

  Tellers for the Noes:

  Loyden, Edward

  Mr. Frank Haynes and

  McDonald, Dr Oonagh

  Mr. Chris Smith.

  Question accordingly agreed to.
  Resolved,
  That the draft Rent (Relief from Phasing) Order 1987, which was laid before this House on 13th January, be approved.

  Rent (Relief from Phasing)

    SHORTHOLD TENANCIES (RENT REGISTRATION)
    Resolved,
    That the draft Protected Shorthold Tenancies (Rent Registration) Order 1987, which was laid before this House on 13th January, be approved.—[Mr. John Patten.]

  Seasonal Workers (Definition)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
  11.40 pm
  Mr. Allan Rogers: This issue has been in front of me and the Minister for at least a year. On 17 January 1986 I wrote to the Minister about one of my constituents who had been told that he could not receive benefit when he went to sign on for unemployment benefit because he was deemed to be a seasonal worker. When he came to see me, he told me of the derisory amount of supplementary benefit that had been offered to him because he was not entitled to unemployment benefit. He also told me that unemployed people in the Rhondda were being classified as seasonal workers. I did not understand what he told me then, but in the last year I have become an expert on seasonal workers, if only to rebut the lengthy answers that I have received from various Departments.
  I took up this matter initially with the Department of Employment and asked why my constituent had been classified as a seasonal worker. In his reply the Under- Secretary of State at that time referred to the regulations covering seasonal workers and then tried to explain why somebody who lives in what was probably the most industrialised constituency in Great Britain should be so classified. My constituent had been able to work only for periods during the three previous years, and he was deemed to have established a pattern of work that meant that he was caught by this legislation.
  The National Insurance Advisory Committee, which reported in accordance with section 138 of the Social Security Act 1975, refers to this problem. The committee concluded that in 1952 the regulations were in general working satisfactorily, although it had reservations about some of the case law. It recommended
  "that the definitions should be redrafted to make it clear that the application of the regulations should not be restricted to periods comparable with the annual seasons (spring, summer, autumn and winter) and that, to avoid the pattern being confused by the effects of industrial recessions, the definition of seasonal worker should be limited so that it applied only to employment which was seasonal in consequence of factors inherent in the nature or conditions of the industry concerned."
  The report states that it must be a seasonal industry for people to be called seasonal workers. That is why it is odd that we have people called seasonal workers, although they are working in normal industrial activity. The report states that industrial recession limited the opportunities of employment at times when people were not employed. One of the conditions currently extant for people qualifying for benefit is that they must reasonably pursue employment during the periods when they are not engaged in the so-called seasonal activity.
  I pointed out in my correspondence with the Minister that those conditions would be acceptable if alternative employment was available. In an area such as Rhondda, where there is over 30 per cent. male unemployment, people leave the register— indeed, they have been exhorted to do so—and obtain jobs. However, if they do so they fall into the trap of being deemed seasonal workers if they do that work for three years. That makes nonsense of the Department of Employment "availability for work" questionnaire, which is supposed to be a scientific measurement of the number of people who want to work.

  1117
  My constituents are laid off, so they go to the Department of Employment and fill in the questionnaire to say that they are ready to work, and then they are classified as seasonal workers because they have worked only when there has been a slight upturn in the economy.
  At a time of recession or low industrial and economic activity, any fluctuations in the economy are local and seasonal. One example—which does not apply to my constituency— is the fact that the Central Electricity Generating Board is contracting out maintenance on its power stations. That can be done only on a seasonal basis—when there is not much demand for electricity supply. The CEGB will shut down the power stations for maintenance work. If that happens over a three-year period and that is the only time that people can get jobs, because it is the only time the CEGB shuts down, they are classified as seasonal workers. That is why I was concerned about the issue.
  I sought the debate almost out of frustration. My last letter to the Department was written on 12 November. Last Thursday, I was successful in obtaining this Adjournment debate and, out of the blue, on Tuesday 3 February I received an answer from the Minister apologising for the delay in answering my letter of 12 November. People might say that Adjournment debates are not useful. This debate has been useful, because it prompted a reply from the Minister after a three-month delay. In his letter, the Minister says:
  "You will be interested to learn therefore that we have recently referred the question of the seasonal workers' regulations to the Social Security Advisory Committee."
  I was annoyed, because for a year I was in continual and active correspondence with the Department, and on 20 November— whether it was due to my pressure or other people's pressure, or perhaps I made the Department rethink the issue—the Department referred the matter to the Social Security Advisory Committee without the decency of letting me know that that had been done. If I had not applied for this Adjournment debate and the matter had not been raised tonight, I would not have received this information.
  The deadline for submissions to the SSAC is 12 February. I received the information only this week. I am worried because trade unions, organisations and individuals who might want to submit evidence will not be able to do so. I hope that the Under-Secretary of State will extend the deadline.
  In 1977, the last time the advisory committee sat, it received seven representations—five from employers and organisations connected with the fish and fish-processing industry, one from the TUC and one from one of its affiliated organisations. The problem has increased enormously since 1977. But if the dissemination of information and the demand for representations were the same then as they are now, it is no wonder that the advisory committee does not receive representations.
  This important issue should be thoroughly aired and considered in the present context. Over the past year, I have said continually in my correspondence that the definitions in the social security regulations are valid only in the context in which they operate. Whereas they might well have been valid in the 1930s, 1940s or 1950s, and certainly in the 1970s, they are not valid today because the context of employment has changed. Unemployment is no longer running at 3 per cent. or 4 per cent.; it is much higher.
  1118
  To show how the context changes, I shall refer to the principal classes of claimants in 1935. In 1935, they included people who worked in holiday resorts— waitresses, servants in boarding houses and hotels, drivers and conductors, shop assistants, amusement and entertainment workers, pier, beach and swimming attendants, yacht hands and seamen on pleasure boats. In other localities, they included fishermen, fish workers, ice cream makers and vendors, bookmakers' clerks—I do not know why that last job is seasonal but I suppose that it is because there is a flat season and a season over the sticks—maltsters, brickyard workers, beet sugar workers and professional footballers. I mention the last group in particular to demonstrate how the context has changed. When the regulations were designed, some professional workers were classified as seasonal workers.
  Time has moved on. My time to speak is rapidly running out. I have achieved a small success in getting the Minister to look at the regulations again. I am pleased that he will do so. I hope that he will accept in good spirit my criticism of the delays in replying to my letter and of the fact that I did not receive any notice that the matter would be referred to the Social Security Advisory Committee. I hope that the Minister will extend the deadline for the receipt of representations.
  11.53 pm
  The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Nicholas Lyell): I am grateful to the hon. Member for Rhondda (Mr. Rogers) for raising this topic, which is pertinent, and for explaining his concern about his constituents and about the possible position of other people who face the same problem.
  The hon. Gentleman drew attention to some problems that have attended the operation of the rules about seasonal workers since their inception as long ago as the days, not of recent recessions, but of the recession which preceded the second world war.
  I am aware that the hon. Gentleman has written on a number of occasions about the problem affecting his own constituent, and the particular case to which he has referred has been considered, as he knows, by the appeal authorities on two occasions, the latest being a hearing by the social security commissioner on 26 January 1987, whose decision is still awaited. In view of the independent. role of these statutory authorities, it would not be appropriate for me to comment on the substance of the particular case.
  I appreciate the genuine concern that the hon. Member has shown and I can best reply to the points he has made by explaining the real dilemma that the administration of these rules has presented not only to the present Government but to many Governments in the past.
  Let me first explain briefly who is treated as a seasonal worker in the unemployment benefit system. The regulations say that a seasonal worker is
  "a person whose normal employment is for part or parts only of a year in an occupation or occupations of which the availability or extent varies at approximately the same time or times in successive years; or any other person who normally restricts his employment to the same, or substantially the same, part or parts only of the year."
  A person is treated as a seasonal worker only after three years in such work. I shall return to that point later. I should make it plain that a seasonal worker is not

  1119
  automatically disentitled to benefit during his off season but has to satisfy an additional condition to qualify. Again, I shall return to that later.
  Long before the Beveridge report, it was recognised that without special rules seasonal workers would be in a position to take advantage of an unemployment insurance system by claiming benefit payments for several months each year, year in and year out. This poses two problems. The first is cost, the burden of which would fall on other contributors. The second is a problem of principle. A person should not be able to receive unemployment benefit for days or periods on which he would not normally work, so effectively subsidising his income by means of a non-means-tested benefit.
  It was to solve these problems that restrictions on the payment of unemployment benefit to seasonal workers were introduced as early as 1931 following the first report of the Royal Commission on unemployment insurance. In 1946—and the hon. Gentleman has rightly traced some of the history—a report of the then National Insurance Advisory Committee on benefit entitlement for these workers confirmed the need for additional conditions to be applied to seasonal workers. More recently, in 1977, a second report by the National Insurance Advisory Committee concluded that additional conditions continued to be necessary.
  Unemployment benefit is not a means-tested benefit. it is available to all unemployed persons who satisfy the contribution conditions and are available for employment, unless specific rules exclude them. It is possible for persons receiving this daily benefit to be in employment on some days and unemployed on others. There are therefore a number of rules whose broad purpose is to ensure that this benefit does not become a non-means-tested supplement to normal income, perhaps as a consequence removing the incentive to enter more fully into the employment field. I fully recognise that one of the points that the hon. Gentleman is making is that that particular aspect does not apply in cases such as that of his constituent. Examples of these rules are those which prevent payment of benefit to persons who do not normally work on Saturdays or who customarily work for fewer than six days per week. The rules affecting seasonal workers are designed to achieve this same end but operate over a longer time scale. It would be inconsistent for persons who normally work for part of the week to be denied benefit while it was paid to those who normally work for only part of the year.
  National Insurance contributions are intended to insure workers against the risk of unemployment, but it would amount to insurance against a virtual certainty if benefit were paid automatically to people whose work regularly involved spells of unemployment at or about the same time each year. The payment of unemployment benefit for regular periods each year without restriction to persons who have adopted a seasonal pattern of work would be unfair to the general body of contributors. This is because the payment of unemployment benefit in the normal course is limited to a total of 312 days in any single period. A seasonal worker would never exhaust his entitlement; it would be renewed after each season. It is not surprising therefore that advisory committees over the years— indeed, over the decades— have accepted the necessity for special rules to apply to seasonal workers.
  1120
  I come to the matter of safeguards. The present legislation provides a number of safeguards to ensure as far as possible that persons are not unfairly treated as seasonal workers. The additional condition is not applied until a person has become a seasonal worker as defined in the regulations. By virtue of case law he is not treated as a seasonal worker until he has completed a three-year pattern of seasonal employment. It is of course possible for a person apparently to acquire a seasonal pattern of employment in any one year, but it would be unlikely that the same set of circumstances would operate fortuitously again during the following year. It would be most improbable that a similar pattern of seasonal work had operated for three years when that person was not truly a seasonal worker. It is that position that the hon. Gentleman asks to be reconsidered, and I understand his argument. As a further safeguard, all periods of less than seven consecutive days unemployment are ignored for the purpose of establishing the off season period, and unless the aggregate off season is greater than seven weeks the additional condition does not apply.
  As I have mentioned, all claims to benefit from a person regarded as a seasonal worker are subject to an additional condition. In simple terms, benefit is not payable for any day in the off season unless the claimant has had, or can reasonably expect to obtain, a substantial amount of employment in the off season. That may be highly pertinent. The term "substantial amount of employment" generally means at least a quarter of the off season. A seasonal worker who has the misfortune to become unemployed during his on season is not required to satisfy an additional condition and is free to claim benefit in the usual way.
  Now the pros of seasonal working. There are many circumstances in which the advantages that seasonal employment offers far outweigh any considerations of benefit entitlement for the off season. It can provide work during convenient periods of the year or hours of work that are particularly suited, for example, to individual commitments to families, hobbies and study; and it can sometimes be lucrative work so that the season can provide a good living for the whole year. There are people who choose, and have always chosen, seasonal work for those and all kinds of reasons. I think that there can be no argument that benefit should not be paid for the off season in these circumstances. The additional condition is not a disincentive for these people, but it prevents abuse of the system. In most cases earnings over the season, if supplemented by income-related benefits, exceed an income from benefits alone.
  Now the cons of seasonal working. I recognise, of course, that there is another side to this coin, as has been so clearly explained by the hon. Gentleman. In some places seasonal employment may be the only work that is available locally. People genuinely seeking permanent employment may have little option but to accept seasonal employment for the period that it is available. The hon. Gentleman argues that that is not what would normally be thought of as seasonal employment of the sort that applies in the case which he has raised. I have no doubt that it is a matter that is under consideration in the case that is before the commissioner, and one that will be considered by the advisory committee.
  After a few years these people are regarded as seasonal workers, and they may well experience a sense of injustice when the seasonal worker rules are applied to their claim

  1121
  to benefit. This sense of injustice, although understandable, is rarely related to hardship. I wish to reassure the hon. Gentleman that the seasonal worker rules are applicable only to claims for unemployment benefit. It is, as I know he recognises, open to any person affected by these rules to make a claim for supplementary benefit in the normal way, but he has pointed out that in the case of the constituent on whose behalf he has raised this debate that is not an adequate recompense.
  There arc rules in the supplementary benefit system whereby substantial net earnings in the season—at least two and a half times the benefit requirements of the claimant and his dependents— may reduce and even extinguish this benefit in the off season. There is no rule such as applies to unemployment benefit to prevent payment of benefit altogether.
  The dilemma which has faced successive Governments over the years is how to distinguish between those persons who have every intention of accepting work when the opportunity arises and those who are quite content and indeed choose to work for certain times of the year at their own convenience. The essential difference is in the intention of the individual, but benefit staff cannot be mind readers. It is desirable that there should be objective rules. Our intention is that those rules should work fairly. It has often been said that the acid test of an employment intention is the offer of a job. In areas where jobs are readily available such a test would be easy to apply. However, this approach is unlikely to be seen as satisfactory in a national context. Even in times of generally plentiful employment there are areas where jobs are harder to obtain than others and this always applied particularly in many areas where there is seasonal work. consequently, this test is not one which is easy to apply on a uniform basis and is not perhaps a solution to the problem.
  1122
  Following representations made last year, including those of the hon. Gentleman and others, but especially in the light of debate in Committee on what became the Social Security Act 1986, my right hon. Friend the Secretary of State decided to refer the question of the operation of the additional condition applying to seasonal workers to the Social Security Advisory Committee. In particular, the committee was invited to consider those conditions in the light of labour market changes during the past 10 years. I am sure that the hon. Gentleman welcomes that.
  In November the committee publicly invited comments and representations and said that it would accept these up to 12 February 1987. I appreciate the hon. Gentleman's point about shortage of time and I apologise to him for the fact that his letter was not given an earlier reply and that that reply, although in the pipeline, was immediately stimulated by the Adjournment debate.
  The hon. Gentleman may wish to approach the Committee, but I undertake to send the committee a copy of the report of the debate and I will specifially draw its attention to the desirability of extending the time in which representations can be made. However, that will he a matter for the committee to decide. When the committee's report is received, I will carefully consider any recommendations to improve the working of the rules. Clearly, at this stage I cannot anticipate or make commitments on the outcome of that consideration.
  The case that the hon. Gentleman has raised has brought the matter to the notice of the House and I assure him that it will be considered most carefully.
  Question put and agreed to.
  Adjourned accordingly at six minutes past Twelve o'clock.

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

Lord Wyatt of Weeford
Sir Woodrow Lyle Wyatt, Knight, having been created Baron Wyatt of Weeford, of Weeford in the County of Staffordshire, for life—Was, in his robes, introduced between the Lord Shackleton and the Lord Weinstock.

Severe Weather Payments
2.47 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 what new policies are planned, and when they will be introduced, to replace the current formula which enables old-age pensioners to claim additional payments to meet extra heating costs in extreme cold weather.
Lord Hesketh: My Lords, the exceptionally cold weather payment scheme was amended from 26th January to provide that this extra help will be available to supplementary benefit claimants in the qualifying groups when the average temperature for an area falls to 0 degrees celsius or less over a fixed seven-day period. This replaces the previous temperature threshold of minus 1·5 degrees celsius. This change means that help is now likely to be given more often than under any previous scheme of exceptionally severe cold weather payments.
Lord Molloy: My Lords, I thank the noble Lord for that reply. Is he aware that the recent bitter cold weather created misery and constituted a threat to the aged and the frail, and that the trigger temperature everywhere failed lamentably to do what Parliament probably intended? It was indeed a very dangerous failure. Is the noble Lord also aware that the policy was not only barren of compassion but created difficult problems for administrators?
Finally, is the noble Lord aware that the researchers who have gone into this matter in some detail, including Age Concern, are still of the opinion that the amount of money made available to save lives and to prevent the aged and the frail from suffering gravely is still not enough?
Lord Hesketh: My Lords, the Social Security Advisory Committee comments that the proposals put to it represent a significant improvement on previous schemes. The system has never been intended to give help in most winters; only when it is exceptionally
194
cold. We believe that the new threshold of 0 degrees celsius will help give assurance to vulnerable groups that this extra help will be available during very cold periods.
Baroness Turner of Camden: My Lords, would it not be more sensible to have an entirely different formula to cover the winter months for those most at risk, instead of a formula based on temperatures which everybody concerned with the care of the elderly now believes not to be adequate?
Lord Hesketh: My Lords, I doubt whether any scheme will ever be seen as fully satisfactory. We have devised a system which provides a reasonable solution judged over the years. Severe winters are not themselves alike. We cannot keep trying to devise a system based on one year's experience.
Viscount Mountgarret: My Lords, following on from the question of the noble Baroness, I must press my noble friend on this point. Would it not be far simpler to have an across-the-board heating allowance for old-age pensioners and such people regardless of the winter temperature? Surely, that must be administratively simpler, and it would allow people to know where they stand.
Lord Hesketh: My Lords, I thank the noble Viscount for his question. However, it is thought, particularly by the Social Security Advisory Committee, that the current arrangements are a great improvement on previous arrangements where, for instance, there had to be a comparison of bills which meant that people often did not receive money until long after they had been charged by the electricity or gas board.
Lord Ennals: My Lords, can the Minister say how many people have so far received the statutory £5 allowance? Bearing in mind the two questions just put to him, will he not accept that it would be simpler and fairer to have an allowance that would automatically be available to certain limited categories during the two or three coldest months of winter?
Lord Hesketh: My Lords, I thank the noble Lord for his question. We do not have the figures for the most recent cold spell. We have the majority of the figures for last year, which show some 500,000 claims. We have compared those figures with 1982 when there were just 170,000 payments. We believe that the number will rise because of the simplification of the system.
Lord Banks: My Lords, if the Government are determined to retain the unsatisfactory retrospective triggering system, are they prepared to consider having a seven-day rolling triggering average period instead of a Monday to Sunday period, so that the first seven days averaging below the limit would trigger benefit?
Lord Hesketh: My Lords, there will always be objections to whatever system is chosen. The Social Security Advisory Committee understood the objections. However, it supported the fixed period because of its advantages of simplicity, ease of

195
understanding and straightforward operation. It is a complicated matter and, while I accept that a fixed period means that not every seven-day period will qualify because we are working on average temperatures, a severe spell straddling a part of two weeks could bring the average temperature in both weeks below the qualifying threshold.
Lord Molloy: My Lords, is the noble Lord aware that experts say there is no average temperature? Temperature can vary within a mile or two. If the Government intend to stick to this appalling formula, it is cold comfort for those who happened to survive last winter but who may not survive next winter. Is the noble Lord further aware that the medical profession says that what the Government need to do is to make sure that all old-age pensioners and very frail people have enough warmth to keep them above the hypothermia line? That consideration ought to be the basis of policy rather than the weather forecast.
Lord Hesketh: My Lords, it is most important to remember that we are talking about an exceptional cold weather payment. There is already the basis below that which provides for, and accepts, the protection of the old and those least able to care for themselves in society.
Lord Glenamara: My Lords, can the noble Lord comment on the place where temperature is measured under the present scheme? I understand that the Tyneside temperature is measured at Leeming near Catterick which is 50 miles to the south. In view of the great variations in temperature from north to south, is this not grossly unfair?
Lord Hesketh: My Lords, I am as aware as are other noble Lords in the House that this matter has been a source of contention. However, the Government have gone to considerable effort to improve the situation. In 1984–85, just 17 weather stations were used, compared with 63 weather stations which were used this year. There will always be arguments. However, I do believe that this represents a substantial improvement.
Baroness Macleod of Borve: My Lords, may I ask my noble friend the Minister whether he is completely satisfied that all those who might be entitled to these payments know that they are so entitled? Will he agree that many old people are in their homes, that they do not go out and that they may not hear that they can benefit from the entitlement that the Government are able to give to them?
Lord Hesketh: My Lords, I thank the noble Baroness for her question. It is most important not only that the money is available but that it is actually claimed. Revised instructions have been issued to local offices on publicity when the conditions for payment are met. This includes local press advertisements and wide distribution of a special leaflet, both containing a claim form for help.
Lord Leatherland: My Lords, will the Minister agree that one simple way of dealing with this matter would
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be to give a general increase to all pensioners of 88 years and over?
Lord Hesketh: My Lords, I am most interested in that question. I should like to point out that all pensioners over the age of 85 actually receive a further £200 a year heating allowance.

ACPO: Annual Report
2.55 p.m.
Lord Inglewood: 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 they will request an annual report from the Association of Chief Police Officers (ACPO), and whether they would publish appropriate sections of these reports.
Lord Beaverbrook: My Lords, the Government doubt whether such an arrangement would add significantly to the information already made available by the annual reports of Her Majesty's Chief Inspector of Constabulary, the Commissioner of Police of the Metropolis, and every chief constable for his own force area.
Lord Inglewood: My Lords, there is a difference between the HMI report and the views of the 40-plus chief constables. Is it possible for this matter to be more open than it is at present, with a distinction being made between an operational and a non-operational matter which a chief constable could report? Beyond that, can it be made clear that there is no statutory existence for what we now call the ACPO and that there is no statutory need for that group to make any report such as may exist for chief constables? They do not make any report, and, in any case, to whom might they make such a report? Perhaps it is time this matter was cleared up.
Lord Beaverbrook: My Lords, it must be for the members of the association to decide whether it should produce an annual report and, if so, whether that report should be published. In any case, we do not believe that a report would provide information which is not already available to us. The Association of Chief Police Officers is a non-statutory body.

Regional Expenditure by Government
2.57 p.m.
Lord Jacques: 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 is their estimate of government expenditure for all purposes in each of the regions, and what is the amount per thousand of registered unemployed in each region.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, apart from expenditure which is the responsibility of the

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territorial departments, most public expenditure is planned on a national basis and it is not possible separately to identify expenditure in each of the regions. The percentage of the working population unemployed, by region, is published monthly in the Department of Employment Gazette.
Lord Jacques: My Lords, having regard to our rate of unemployment and the considerable disparity between the regions, is this not information which ought to be available for the guidance of both the Government and Parliament?
Lord Young of Graffham: My Lords, a great deal has been said recently about the division between North and South. One of the popular figures that has been around is that 94 per cent. of job losses have been in the North. In that particular article and debate, the definition of "North" is far wider than would normally be used, because it includes Scotland, Wales, the North, the North-West, the West and the East Midlands, Yorkshire and Humberside; in other words, everything in Great Britain except the South-West, East Anglia and the South-East.
The relative population of those areas is 57 per cent. If we actually look at the rise in unemployment for those regions, it is 64 per cent. That does not suggest great disparity between the North and the South. Looking at the percentage of increase in self-employment by region, we find the greatest percentage increase is in Yorkshire and Humberside.
Lord Bruce of Donington: My Lords, will the noble Lord address himself to the question which my noble friend has just put, which did not deal with the North and the South? My noble friend simply asked whether it would not be possible to produce the required figures in respect of each of the regions. The noble Lord is very ingenious in producing figures out of the hat for all kinds of things. Can he not come down to the factual content that is the subject of the Question and do something about it?
Lord Young of Graffham: No, my Lords. I am extremely sorry if I occasionally upset noble Lords opposite by showing them what the true facts are rather than the fictions in which they believe. I should remind your Lordships' House that we are the United Kingdom and divisions of this sort do not help our future.
Lord Sefton of Garston: My Lords, is it not a fact that the amount of money that is spent on the proposed Channel tunnel is more than the whole of regional aid in one year?
Lord Young of Graffham: My Lords, it is a fact that government are not spending any money on the Channel tunnel; it is spent by the private sector. That is a matter for the private sector and not for government.
Lord Sefton of Garston: My Lords, is the noble Lord aware that I have a letter from the Government, over his name, I believe, saying that £469 million will be spent by the Government arising from the operations of the Channel tunnel? Does he deny that?
Lord Young of Graffham: My Lords, that is entirely another question and not to the point; but what I will confirm is that the amount of money that is spent is less than regional aid, which was the purport of the noble Lord's original question.
Lord Sefton of Garston: Look out, the Leader of the House is coming!
The Lord President of the Council (Viscount Whitelaw):No he is not, my Lords. He will, but he has not yet.
Lord Sefton of Garston: My Lords, I am rather surprised that the noble Lord is not aware of what his department, or another government department, is telling Members of this House.
Lord Jacques: My Lords, I must remind the Minister—
Noble Lords: Question!
Lord Jacques: My Lords, may I remind the Minister that he has not answered my supplementary question? Will he have another look at it and please answer the supplementary question?
Lord Young of Graffham: No, my Lords, because in my original Answer I said that most public expenditure is planned on a national basis and it is not possible separately to identify expenditure in each of the regions. I do not believe that expenditure divided by regions actually helps the progress of the United Kingdom.
Lord Cledwyn of Penrhos: My Lords, is it not the case, however, that it is possible to identify expenditure in Wales and Scotland? Can the noble Lord give those figures?
Lord Young of Graffham: My Lords, that is another question but I am happy to assure all in your Lordships' House that the Principality of Wales and Scotland are not regions of the United Kingdom; they are quite separate. We are talking about regions of England. I am happy to give figures which can show by regions the amount of money which is spent by the Manpower Services Commission. I shall place that information in the Library for those who are concerned. It will show that whereas £59 per head is spent by the Manpower Services Commission in the South-East, in Wales, which is of immediate concern, the figure is £161 per head; in Scotland it is £143 per head; and in the Northern region it is £179 per head. All regions with the exception of London have about double what is spent in the South-East.
Lord Beswick: My Lords, if we have this solid United Kingdom, how is it that the noble Lord is able to bring out those figures for the regions?
Lord Young of Graffham: My Lords, the Question asks what is the Government's estimate of their expenditure for all purposes in each of the regions. I have a very quaint habit; I like to answer the Question.
Lord Glenamara: My Lords, does not my noble friend Lord Sefton have a very important point with regard to whether the resources being devoted to the Channel tunnel are public or private? The fact remains that vast national resources will be devoted to this project which will have a minimal permanent effect on our economy, whereas the older industrial areas are crying out for investment. Is this not a misuse of national resources?
Lord Young of Graffham: My Lords, when I am told by the Treasury that fixed capital investment in the United Kingdom for the past four years each year broke the record and increased further I do not see that, because part of the private sector spends part of its money or intends to spend part of its money on the Channel tunnel, it is a matter of great moment to all in your Lordships' House. Surely the noble Lord is not suggesting that we have compulsory direction of all private sector investment.

BBC, Glasgow: Search Warrant
3.4 p.m.
Lord Wilson of Langside: My Lords, I beg leave to ask the Question of which I gave private notice to the noble Viscount the Leader of the House earlier this morning.
The Question is in the following terms:
To ask Her Majesty's Government why the Scottish Law Officers were both unaware of the terms of the original warrant to search the premises of the BBC in Glasgow, which was subsequently suspended in the High Court.
The Lord Advocate (Lord Cameron of Lochbroom): My Lords, on 29th January of this year Strathclyde Police received a telephone request from the Metropolitan Police for assistance arising out of inquiries in London in connection with an article by Mr. Duncan Campbell in the New Statesman on 23rd January, this year.
The Metropolitan Police requested a search to be made of the BBC premises at Queen Margaret Drive, Glasgow, where it was believed that Mr. Campbell had worked in the course of preparing a series of programmes entitled The Secret Society. A search was also requested of another address which had been occupied by Mr. Campbell while he had worked at the BBC. It was suspected that classified material obtained by Mr. Campbell was retained at these addresses.
On 30th January two officers of the Metropolitan Police arrived in Glasgow and, in company with officers of Strathclyde Police, reported the matter to the procurator fiscal. They requested warrants to search the addresses mentioned above. I was informed of this approach the same morning. It appeared to me that an offence might have been committed in Scotland under Section 2 of the Official Secrets Act 1911. I then authorised the procurator fiscal at Glasgow to make the necessary application to the sheriff for the search warrants requested.
Early in the afternoon the procurator fiscal appeared before the sheriff to seek such warrants under Section
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9 of the 1911 Act on the basis that there were reasonable grounds to believe that material relating to highly classified information connected with the preparation of a series of programmes entitled The Secret Society had been communicated within the BBC's Glasgow premises; that evidence of such communication was retained there; and that such communication was in contravention of Section 2 of the 1911 Act. The sheriff took the oath of a Metropolitan Police officer in relation to this and granted a warrant in terms of Section 9 of the 1911 Act.
On the evening of Saturday 31st January I was informed that the BBC were seeking to suspend the operation of the search warrant on the ground that the warrant allowed material to be seized relative to—I quote—"an offence under the Act" and was not restricted to an offence under Section 2. I then instructed that this application for suspension should not be opposed and that a fresh warrant should be applied for, restricted to seizure of material relating to the said offence under Section 2. Subsequently a warrant in such terms was granted by the sheriff and this was executed without further legal challenge. The original application for a warrant was therefore expressly authorised by me, and, on being informed of the challenge to its width, I agreed the amended terms of the revised application.
Lord Wilson of Langside: My Lords, I should have thanked the noble and learned Lord for his Answer to my Question with greater enthusiasm had he indeed answered it. What I think the House is entitled to know is why the terms of the warrant were not looked at in the Crown Office, having regard to the great importance and the implications of this matter, by one or other of the Law Officers themselves, which would have been in accordance, I should have thought—and the noble and learned Lord the Lord Advocate will correct me if I am wrong—with the normal competent practice in that office.
Lord Cameron of Lochbroom: My Lords, as I have set out already, I had reason to believe, or reason to suspect, from the information originally brought to my notice that an offence had been committed in Scotland, and indeed, as the petition sets out, in Glasgow. The noble and learned Lord knows well that the investigation of a suspected offence in Scotland is undertaken in the first place by the procurator fiscal of the district within which such an offence may have been committed. He acts under my authority and, as the House will know, he is a legally qualified officer—one who is independent of the police, I hasten to add. In this case he had responsibility for the district where it was considered that an offence under Section 2 might have been committed in Scotland.
The noble and learned Lord will be aware that it is perfectly proper in these circumstances for the procurator fiscal, once he has received the information which gives rise to securing a further investigation, to proceed if he thinks that appropriate.
It was thought appropriate in this particular case to obtain search warrants. The search warrants are obtained by reference to a petition placed before an independent officer; namely, the sheriff. He had to be

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satisfied, since in this case warrants were sought in terms of Section 9 of the Official Secrets Act, that the material was sworn to on oath by an officer. That of course was done. It was thereafter for the sheriff to be satisfied on the basis of that oath that it would be proper to grant a warrant, as was done.
I accept of course that in this particular case, as in any other case of an application for a search warrant, the drafting was done by the procurator fiscal, or one of his officials. They are all legally qualified. They are responsible to me. I was satisfied from what I had already heard that, as my officials for whom I take responsibility in this House, they should be authorised to proceed as they did.
Lord Wilson of Langside: My Lords, perhaps I may say that I was not suggesting that there was anything improper in the course which was adopted. I was suggesting—and I suggest again—that the somewhat comic opera situation which had developed, and which brought this warrant before the courts on three occasions, might have been avoided if the warrant had been sent to the Crown Office for examination by the Crown counsel and the law officers themselves before any steps were taken to apply for it—a course which is frequently adopted in circumstances of this importance.
Lord Cameron of Lochbroom: My Lords, I take it that the noble and learned Lord has asked me a question, and I certainly accept it in that frame. I make quite clear to noble Lords that the warrant is of course granted by the sheriff. It is not one which is the doing either of myself or of my official, the procurator fiscal. I put forward, through my local prosecuting official, a petition and adjected to it a crave which invited the sheriff to grant a warrant in certain terms. The sheriff was of course perfectly entitled to restrict it if he felt that the crave went too wide, as the noble and learned Lord will know. I have to say that he did not do so.
I must make clear to the House that, in the body of the petition itself, it was specifically alleged that there had been reasonable grounds to believe that there had been communication of a highly classified material which would, or could, be a contravention of Section 2 of the Official Secrets Act. Therefore, the petition itself contained reference to Section 2. It was for that reason that when I was made aware of the legal challenge I indicated—indeed, instructed—that the suspension of the original warrant should not be challenged and that the further warrant that was to be craved was to make specific reference back to what was stated in the body of the petition. I wish to make clear, too, that there was no change in the body of the petition placed before either of the sheriffs at any stage.
Lord Morton of Shuna: My Lords, does not the noble and learned Lord agree with his learned friend the Solicitor-General for Scotland that it is the duty of the Lord Advocate to ensure that the warrant is sufficient for its purpose? Secondly, should he not ensure that it does not go beyond what is required? Is the noble and learned Lord satisfied that that is the case, bearing in mind what we understand to be the rather restricted terms of the warrant under which the Metropolitan Police acted in London? Was the noble
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and learned Lord aware of the terms of the search warrant granted in London? Was there some reason for a much wider warrant to be sought for the BBC?
3.15 p.m.
Lord Cameron of Lochbroom: My Lords, I was aware in general that warrants have been obtained in England in relation of course to a different statutory basis under, I believe, the Police and Criminal Evidence Act. That of course does not obtain in Scotland. I was satisfied when I was advised of the basis upon which suspension was being sought that in order to make the matter clear beyond doubt it would be appropriate to seek a fresh warrant to allow the original warrant to be suspended and to include in the crave not a reference simply to an offence under the Act but a reference back specifically to the said offence under the Act. That referred specifically to what was in the body of the petition and had been in the initial petition as much as it was in the subsequent petition.
It was as a result of the further application that the sheriff, again having heard a Metropolitan officer on oath in relation to what was stated in the petition, was prepared to grant the warrant as craved. I simply say that obviously I have looked at the terms of the warrant and at what is contained in the petition and I am fully satisfied that the crave for a warrant goes no further than it would be entitled to by the information placed before the sheriff.
In some ways of course I am judging the sheriff and it is not for me to do so. However, the noble Lord opposite has asked my view and I am quite clear that the crave, as amended, was perfectly justified by the terms of the petition that was placed before the sheriff.
Lord Hooson: My Lords, is the noble and learned Lord the Lord Advocate aware that in another place yesterday conflicting views were expressed by the Solicitor-General for Scotland, on the one hand, and the Secretary of State for Scotland, on the other, as to the duties of the Lord Advocate? The Solicitor-General expressed the view that it was the Lord Advocate's duty to decide whether the warrant met its purpose and that it was not too wide, but the Secretary of State seemed to imply that the sole duty of the Lord Advocate is to authorise the issue of a warrant. Is not the view expressed by the Solicitor-General the correct one? Is it not a fact that the Lord Advocate did not see the warrant, that he did not ensure that it met its purpose and that it was not too wide in this particular instance? Is not the view expressed yesterday by the Secretary of State in another place incorrect?
Lord Cameron of Lochbroom: My Lords, I am grateful to the noble Lord for having asked that question. I do not think that there is any disparity between what my right honourable friends said yesterday in another place. I have of course read what they said. However, I make absolutely plain—as I think I have done in answer to these questions—that I was aware of the source of information, that I was aware of the nature of the inquiry and in what direction it was going.
As regards the precise terms of the petition and the crave which preceded the granting of the warrant by the sheriff, I personally did not know that at the time

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because, as I have indicated, that was a matter for the responsible legally-qualified prosecutor in the district in which the offence was alleged to have been committed to deal with. I made it perfectly clear when the question of civil challenge was brought to my attention, as was the challenge in the High Court—I then expressed an opinion that to make the matter absolutely clear, if it was not already (and I accept that the more general words "an offence" appeared in the original warrant)—that a fresh warrant should be granted to make it plain that it referred back to what was stated in the petition; namely, an offence under Section 2.
I take responsibility for my procurators fiscal, but in my view it is proper that when they are investigating allegations of offence they proceed with my authority but do so using their legal knowledge. I was aware in general of the need for an application. I take responsibility for what the procurator fiscal did in drafting the petition and the crave. That is the proper duty of a Lord Advocate, I submit to your Lordships.
Lord Hooson: My Lords, would the Lord Advocate kindly reply to the specific question asked? Was the advice given yesterday in another place by the Solicitor General for Scotland correct?
Lord Cameron of Lochbroom: My Lords, as I understood his answer, it may be that I have misread it—he was not suggesting that the Lord Advocate personally is to draft the terms of the petition and the crave for the purposes of securing a warrant. He is saying, as I understand it, what the general responsibilities of the Lord Advocate are. My Lords, when the matter of challenge was brought to my attention then I was bound to have regard to that and give instructions, as I did, in relation to the preparation of a fresh warrant.
Lord Campbell of Croy: My Lords, is my noble and learned friend aware that I have been one of those in this House who for some years has been advocating the replacement of Section 2 of the Official Secrets Act and spoke in favour of the Government's own Bill in 1979 to replace the Act before it was withdrawn after Second Reading because it ran into difficulties? Does my noble and learned friend agree that until Section 2 is replaced it has to be used to protect the security of this country, and should be?
Lord Cameron of Lochbroom: My Lords, I am very grateful to my noble friend. I would entirely agree that while the Act remains upon the statute book it is proper, if information becomes available to prosecuting authorities that there has been a contravention of it, for that matter to be taken further forward by the appropriate prosecuting authorities. I make no comment upon the question of whether or how it is to be replaced. As I understand, there have been debates in the course of an earlier Parliament when an attempt was made to do that, and that failed.
Lord Paget of Northampton: My Lords, is the noble Lord aware that yesterday—and I think on Monday too—the Government made statements dissociating themselves from the comedy that has taken place in
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Scotland and assuring us that it had nothing at all to do with government and that they were not responsible for it? Now the Minister comes and tells us here that he was in personal command of all that happened. How can these statements be brought together?
Lord Cameron of Lochbroom: My Lords, I do not accept that the Government was in a sense distancing itself in one regard from the matters that were being asked in another place in the last two days. It is perfectly true to say—and I have read what my right honourable and learned friend the Secretary of State said on Monday about this—that he made quite clear in another place what his role was. He also said, as I recollect it, that the application for a warrant had proceeded under my authority. That is my duty as a law officer, as a prosecuting authority responsible for prosecution in Scotland, in which I am totally independent of the Government and of any question of being influenced by the Government. If there had been any question of that, your Lordships may rest assured that I should have known what was my duty in the matter. There was no question of the intervention of government in this matter. The ministerial responsibility is simply mine as Lord Advocate responsible for prosecution of crime in Scotland.
Lord Cledwyn of Penrhos: My Lords, for the purposes of clarification perhaps I may pursue that matter a step further. Can the noble and learned Lord say whether, when he was considering these matters, he was at any time in touch with the Secretary of State for Scotland or any of his Ministers or with the Attorney-General or any English Minister?
Lord Cameron of Lochbroom: My Lords, when I was considering these matters, no.
Lord Morton of Shuna: My Lords, may I ask whether the noble and learned Lord's answer to me means that he was not at the time he authorised the original search warrant aware of the restricted terms of the warrant in London? If he was not aware, is he satisfied that he got full information from the police through his officers?
Lord Cameron of Lochbroom: My Lords, what I was made aware of I have already indicated in response to earlier questions. What I say is that I was aware in general of the fact that there had been warrants granted. The material which was to go forward for the crave of a warrant in Scotland proceeded upon a petition which was based upon information given to the procurator fiscal by police officers, and which was sworn to before the sheriff by a police officer.
I take the view that in those circumstances what was sought was perfectly proper. I refer particularly, of course, to the amended warrant, for the simple reason that I accepted, when the matter was brought to my attention, that to leave the matter general as an offence would not be appropriate; that it ought to be quite clearly stated as being restricted to what was the focus of the inquiries as set out in the petition.
Lord Hutchinson of Lullington: My Lords, would the noble and learned Lord agree that Section 2 is so broad that it behoves him particularly to see that the

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warrant is limited in its scope? The warrant depends on what was in the petition and what was in the petition depends on the information that the Metropolitan Police officer gave. Would the noble and learned Lord give the House the information as to what was in the petition coming from the Metropolitan Police officer, because it does seem extraordinary to many of us that a body such as the British Broadcasting Corporation should be treated in these circumstances as though it was a bank robber and about to disappear with the documents. The broadness of the warrant here is the mischief about which many people complain.
Lord Cameron of Lochbroom: My Lords, what I will do is to make arrangements for the terms of the petition upon which the crave for the warrant proceeded to be placed in the Library of the House. That will set out what was the basis for the crave for the warrant that was placed before the sheriff. I think noble Lords will fully understand that it would be inappropriate for me at this stage to give any further reference, because, of course, the sheriff was guided by what was placed in the petition itself.
On the more general matter, I have to say that in relation to the petition—as I think I have already made clear—the circumstances in which reference was made to Section 2 of the Official Secrets Act 1911 have been made clear. I would hope that perhaps the noble Lord would prefer to wait to see the petition in this matter.
Viscount Whitelaw: My Lords, I did take the responsibility—which I think has been proved to be entirely correct—of giving permission for a Private Notice Question on this subject. I think the House will agree that 25 minutes on that particular Private Notice Question is a proper amount, and may probably feel that it has had a considerable discussion on this matter and that it would now be fair to allow a very important debate to come on.

Channel Tunnel Bill
Brought from the Commons; read a first time, and referred to the Examiners.

Business of the House
Viscount Whitelaw: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord McCarthy set down for 18th February shall be limited to 5 hours and that Standing Order 35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to the debate with the substitution of "5 hours" for "2½ hours" and "25 minutes" for "20 minutes".—(Viscount Whitelaw.)
On Question, Motion agreed to.

Local Authorities: Policies
3.32 p.m.
Baroness Cox Baroness Cox rose to call attention to problems which have arisen in certain local authorities and to the policies pursued by them; and to move for Papers.
The noble Baroness said: My Lords, in opening this debate, I should like to offer a phrase which will serve as its motto or theme. The phrase is res ipsa loquitur. Things do speak for themselves in the subject that we are debating this afternoon. Sadly, there is abundant and telling evidence that in a growing number of local authorities there is cause for great concern. My difficulty lies in summarising the nature and extent of that concern and I am therefore very grateful that so many noble Lords have put down their names to speak, because they can put substance into the outline which is all that my opening speech can attempt to provide.
I begin by identifying the main burden of our concerns. First of all, a number of local authorities have been inefficient and profligate and have caused financial problems which are reaching crisis proportions, as was shown by the report of the Audit Commission that was published last week. Secondly, some authorities are promoting policies that are outside the remit of local government as it has traditionally been understood. Moreover, they are spending vast sums of money on these policies—money which could be spent on improving local services. Thirdly, some of these policies are offensive to local citizens and employees and violate their philosophical and religious convictions. Finally, some authorities are operating in ways that are essentially undemocratic and designed to overthrow Britain's democratic institutions.
Before I move on to the disturbing catalogue of evidence that supports these allegations, I must put those charges into perspective by mentioning two important caveats which should forestall some of the responses from those who find such evidence unpalatable or embarrassing. First and foremost, I cannot emphasise too strongly that the authorities against whom these charges are brought are in a minority. The majority of authorities, whether Conservative, Labour or Alliance, are still run in the best and most honourable traditions of local government; namely, to provide local services in the interests of all citizens and to be publicly accountable for the way in which they conduct their affairs.
Nevertheless, those authorities which give cause for concern represent a substantial minority and they have grown alarmingly rapidly. Names such as Brent, Haringey and Liverpool have become household words, those authorities having achieved notoriety through their outrageous policies. Others are less well known. Not all of them are in the inner cities; some are in leafy suburbs such as Ealing, or in the provinces such as Derbyshire and Bristol. They number around 22. They represent about 6 million people, or 13 per cent. of the population of England, and between a quarter and one-third of all those who live in Labour controlled areas. Moreover, their numbers have increased since the local elections last May and can be expected to grow as moderate Labour councillors are replaced by supporters of the hard line far Left.
This brings me to my second caveat. Those rogue councils are often just dismissed as the loony Left. I cannot stress too much not only the inappropriateness but also the danger of thinking in those terms. The political activists who dominate those authorities are not irrational, erratic or marginal, as the word "loony"

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implies. They are very effective political operators, pursuing strategies which endanger the roots of democracy. They are of the Left but not the moderate, democratic Left which characterises the traditional Labour Party that I used to support, which still commands my respect and I am sure the respect of all parts of your Lordships' House. Rather, they are the hard-line, undemocratic, revolutionary, socialist Left. It is imperative that we recognise, admit and seriously consider the implications of their influence on local government. Unless we do so, we allow a canker to grow in the midst of our body politic and it may endanger not only local government but the future of our entire democracy.
Let me now turn to illustrate the nature of some of our concerns. With regard to inefficiency and profligacy, your Lordships will be aware that the Audit Commission tells a sorry tale of financial mismanagement and irresponsibility. Yet, grim as it is, that report is only an expurgated version of the original. I should like to press my noble friend the Minister to offer some kind of reassurance that the full version will be made available, because it must be in the public interest for the full facts to be made known.
That report argues that in some London authorities financial mismanagement is on so serious a scale that urgent action is needed to avoid calamity. Money per se is not the answer. Inefficiency, excessive waste, creative accounting and other malpractices must be stopped if London is to avoid degenerating into a cycle of decay which, once established, will be immensely difficult to reverse. That report is a sober warning and merits urgent consideration, and I am grateful to those noble Lords who will discuss it further.
Looking beyond that report, one alarming aspect of financial mismanagement is the way in which some local authorities deliberately choose policies that are designed not to provide the best possible services to help local people but rather to create massive debts and political confrontation. This cynical attitude is shown in Labour Briefing, which is the internal bulletin of a significant section of the Labour Party in local government.
It says:
"Labour councils should spend all the money they can lay their hands on now … from now on every battle—over ratecapping, over privatisation—is in deadly earnest".
Of course some of these councils realise that their policies are not very popular with the local people, so they are spending yet more of their ratepayers' money in employing public relations firms to mend their image. Brent Council has awarded a £16,000 contract to a PR company which has already received over £142,000 from the Left-wing Basildon council in order to promote its image. A letter from a firm called Union Communications, which happens to advertise in Marxism Today, claims:
"We have already shown Basildon Council how to put 10% on the Labour vote."
This brings me to my second theme, policies outside the remit of local government. Financial mismanagment is not the only problem. Even more serious is the breach of longstanding conventions of the proper functions of local government.
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Traditionally local government is concerned with local services and does not use the ratepayer's money to try to influence or to interfere in matters of national government. But the Trotskyist Socialist Worker Review states clearly that much of the activity of some councils is,
"at the level of changing ideas rather than providing material improvements for the local people and many of these ideas are to do with national issues of defence and foreign policy."
For example, in an authoritative study called It Costs a Bomb, David Regan, Professor of Local Government at the University of Nottingham, describes how some authortities have spent at least £10 million on activities promoting anti-defence propaganda under the guise of nuclear-free zones. But we are talking not just about £10 million. Some authorities also provide facilities and staff with the sole or primary task of furthering anti-nuclear activities. Sheffield led the way with the appointment of Mr. John Coleman, local CND secretary and Communist Party member, as nuclear-free zone officer.
Nuclear-free zone activities by local authorities are legion. They include publicity and propaganda campaigns with posters, road signs, banners, flags and booklets, the establishment of so-called peace shops and even the use in West Yorkshire of a peace bus which tours the county with propagandist films and literature. In addition, many of these authorities subsidise unilateralist organisations such as CND directly with cash or indirectly with free or subsidised use of council property and help from council staff, as when Sheffield's peace officer organised CND's annual conference in Sheffield.
So in many diverse ways these authorities share one common denominator, the promotion of the view that Britain should unconditionally discard all nuclear weapons and bases. In this, they are undermining national defence policy and Britain's role in NATO. Equally disturbing is the fact that many of these authorities also fail to fulfil their statutory civil defence responsibilities, thus allowing their anti-nuclear policies to take priority over their own citizens' safety.
I return briefly to one or two examples of local authority activity which exceed the traditional role and functions of local government—the adoption of partisan positions in foreign policy, such as giving explicit support to organisations such as the ANC, SWAPO and Sinn Fein. The ANC flag has flown over Brent Town Hall, Ealing has flown the SWAPO flag and last October London Labour Briefing announced that Sinn Fein councillors,
"will be officially received, either by full council meetings or by the Labour Group, in the following Boroughs: Haringey, Lambeth, Hillingdon, Ealing, Southwark, Hackney, Camden, Islington, Brent, Hammersmith."
These examples lead into my third area of concern, which is the pursuit of policies that are offensive to many local citizens and employees. Pride of place, I suppose, must go to those authorities which have hit the headlines with their so-called positive images policies, which actively promote homosexuality and attack the idea that heterosexuality is normal. This causes particular offence when the policy is promoted in schools and playgroups with children as young as three, four or five years.
I must stress that I am not against responsible teaching which reduces victimisation of groups such as homosexuals, but, like the parents of Haringey, I strongly oppose some of the positive images policies and the teaching material recommended for use in schools. For example, the book called The Milkman's on his Way, by David Rees, with its graphic details of sexual intercourse between a 17 year-old boy and his male adult lover, has details that are so explicit that they make one wonder whether the book should be classed as pornographic, apart from any consideration of its appropriateness in the age of AIDS.
I urge your Lordships to look at this book. I shall make excerpts from it available in your Lordships' Library to enable you to do so. Will your Lordships please remember, while you are looking, that the Inner London Education Authority recommends this book for young people—as young as 15—and that it was obtained by a girl aged 15 from the children's section of Haringey library?
Perhaps I may remind your Lordships that when parents in Haringey attended a council meeting to express anxiety about their children being subjected to such influences, they suffered violent verbal and physical abuse. They were spat at and urinated upon. In that meeting those who put views contrary to the council policy had their microphones switched off. When parents argued that in this country they have a right to religious freedoms, a councillor retorted that people have died for their religious faith and perhaps they should die too. Those parents have subsequently received death threats to their own children over the telephone. These examples presage the theme of antidemocratic behaviour, to which I shall return in a moment.
Before doing so, I wish briefly to touch on another problem in local authorities which pursue policies that many find offensive, whether they are positive images or so-called anti-racist policies. Their interpretation and implementation have achieved notoriety in cases such as the treatment meted out to Ray Honeyford in Bradford, Jonathan Savery in Bristol and Maureen McGoldrick in Brent. The cruel irony is that these policies, which sound so laudable, are used to create tension and disharmony. They also infringe the liberties of local people. For example, authorities such as Brent are now committed to requiring all employees, teachers and school governors to attend compulsory heterosexism or racism awareness courses. But not only must they attend; they must also pass if they are to sit on appointments panels, presumably to ensure that all new staff will be ideologically acceptable.
This Orwellian situation poses grave moral problems for citizens who do not agree with these policies. Should they comply or not? If not, they run a real risk of being hounded out of their posts, as we have seen. Alternatively, they may just leave, and it is surely no coincidence that in Brent it was recently reported that there are over 170 teacher vacancies. As a citizen of the "people's republic of Brent", I find little comfort in the prospect of the advent of 177 special advisers on racial equality in schools—known locally as the race spies—for whom the council has applied for Section 11 funding.
I find even less comfort in the knowledge that it is intended that these advisers will work in close collaboration with Professor Chris Mullard of the University of London Institute of Education, who has written:
"the only argument that white society understands is force, violence and power"—
and—
"all the time I was writing Black Britain, I found not solace, comfort or tolerance, but tension, a disturbing desire to break, smash and riot, to bellow: 'Whitey, one day you'll have to pay!".
I should like to ask my noble friend the Minister if he would consider drawing those facts to the attention of his right honourable friend the Home Secretary as, in any consideration of the funding of that outrageous policy, which is extremely unpopular locally, those aspects should be taken into account.
Another cause for concern, and one which has been expressed in your Lordships' House, is the use of local authority money to undermine the police. Of course, legitimate criticism of the police must be taken seriously. The police themselves deserve credit for having done so. But vast amounts of anti-police propaganda, produced and disseminated at public expense, are totally unacceptable. Examples such as the grossly biased anti-police video and posters, Policing London: The Reality, which were produced for schools, youth clubs, community centres and trade union branches, have already been mentioned in your Lordships' House. Unfortunately, they are only a small part of the picture.
The London Strategic Policy Unit has a police monitoring and research group which publishes regular issues of Policing London and leaflets containing anti-police cartoons. One shows a policeman assuring an Asian that he will take his complaint "very, very seriously"; the next cartoon shows the policeman sitting back with a broad grin and the complaint in the waste-paper basket.
Such gratuitous attacks on the police are not limited to London. Residents of Manchester regularly receive glossy and comparably biased magazines produced and distributed at public expense. The effect of that sustained denigration of the police will be to create hatred and violence, of which the tragedy of PC Blakelock's death is one manifestation.
Once respect for the authority of the police is destroyed, our society is one step nearer to the breakdown of the consensus which must underpin democracy and one step nearer to a revolution. To show that I am not in the realm of fantasy, I shall quote from a policy statement last year from Labour Briefing:
"against the racist and anti-union violence of the police, and the threat posed by the armed forces, workers must counterpose demands for the disbanding of those armed bodies of capitalist repression".
Those who support Labour Briefing are not just fringe mavericks. They include Members of Parliament such as Tony Benn, Eric Heffer and Tony Banks, prospective parliamentary candidates such as Russell Profitt and many local councillors.
Before I leave the theme of the use by a local authority of public money for propaganda, I must make brief reference to the Widdicombe report and its recommendations designed to inhibit the excessive use

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of public money for party political propaganda. Taken as a package, they could be helpful and are to be welcomed. But there is also a need for wider proposals to curb partisan political propaganda of the kind that I have been discussing and for mechanisms to allow individual citizens to have an effective right of challenge. That is a point which my noble friend Lord Campbell of Alloway will take up.
My final theme is the undemocratic behaviour of some local authorities whose practices flagrantly violate established conventions. For example, Southwark has packed its committees outrageously with about nine Labour members to one opposition member, although the balance on the council is about two to one. That is a mockery of democracy. Other violations of traditional procedures include the appointment of explicitly political advisers, paid out of public funds; contracting out work on political criteria; and the tactic of keeping election manifestos virtually secret until after the elections. For example, people in Brent and Haringey described how it was virtually impossible to get hold of the Labour Party manifesto before the election. One person obtained a copy three months after the election and then only by dint of numerous telephone calls and three letters. When some councillors in those local authorities argue that their policies are justified by public endorsement of their manifesto, their arguments sound rather hollow.
As I draw to a conclusion, I return to the phrase with which I began: "These things speak for themselves." I regret to say that if time permitted I could give many other telling examples, all with the message that, in a sizeable number of local authorities, the honourable traditions of local government are being broken and local democracy is being violated. That is serious. But far more serious are the intentions of any of those who abuse local government in that way. They are political extremists who hold no brief for democracy, either local or parliamentary. That they are intent on its overthrow is shown by an extract from the Labour Briefing policy statement which states:
"Our commitment is … to go beyond Parliamentary politics, and to mobilise in mass action to challenge, combat and break the repression and violence of the capitalist state machine".
They are prepared to be ruthless in that process. Just how ruthless was shown once gain by Labour Briefing when it gloated over the IRA bombing at the Tory Party conference with the quip:
"What's four dead Tories? A start".
I shall never forget Bernie Grant describing the horrendous violence which killed PC Blackelock as the police getting a "bloody good hiding". We should not forget that after the next general election Bernie Grant and many others in those local authorities are likely to be elected to another place. Prominent among them is Ken Livingstone who was quoted in City Limits last April as saying:
"If I went on telly now and said Kinnock's a scab and Healey should be de-selected, everyone in London Labour Briefing would give me a big kiss. Can you imagine what Lenin or Mao would have done with those sort of self-indulgent creatures? Killed them. And whilst I'm opposed to capital punishment, I can see why."
I sometimes think that I am becoming paranoid. I rather wish that I were. The problems which concern
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me would then be mine alone and I could, in a sense, relax. But just as I welcome that thought, a new and disturbing development occurs: in reality my concerns are confirmed. They are that in our country there are political extremists of the hard-line totalitarian and fascist Left (I should be equally worried if they were of the totalitarian fascist Right) who are engaged in the subversion of our democratic society. They are working in areas where they can be most effective in sowing the seeds of revolution—whether that be ideological as in education, or political as in local government.
Democracy, by its very nature, is precarious. It depends upon good faith. It is always vulnerable to manipulation by unrepresentative minorities of political activists. If as a nation, we do not take steps to curb the kinds of violation of local democracy which this debate will highlight, we shall run the risk of allowing those who are explicitly committed to its destruction to have their way. The stakes they are playing for are high. The evidence is before us. It speaks for itself.
I beg to move for Papers.
4 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Skelmersdale): My Lords, what a damning categorisation that was with which my noble friend Lady Cox opened this important debate. I congratulate her on framing the guidelines for this afternoon so carefully and so clearly. To some people, I suppose it would come as a surprise, but not to anyone who reads the papers or indeed listens to debates and questions either here or in another place.
Another thing that strikes me immediately is the timeliness of this debate. Not only is it less than a week since the Audit Commission published its report on the management of London's authorities but it is also in the week when the Labour Party is debating its policy towards local government at its conference in Leeds. If the Opposition take as much notice of this debate as I can assure my noble friend that the Government intend to, then we may be able to cure some of the ills that have swamped some local authorities and are threatening to engulf more and more.
I must preface my remarks today by acknowledging the great and honourable traditions of local government. I also pay tribute to the devoted—and unpaid—public service rendered to communities up and down the country by the majority of local councillors. The tragedy is that their reputation and the honourable traditions of local government are being tarnished by the activities of a minority of equally dedicated but misdirected people.
Let me briefly remind the House of the sorts of things some councils are doing in the name of local democracy and supposedly in the interests of the people they were elected to serve. In Manchester, the council has set up a police unit, with a reported budget of £195,000, which produces an expensive glossy magazine, Police Watch. What does it do? It just criticises the police in order to put them in an unfavourable light. The same council's nuclear-free

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zone is said to cost £95,000. Taken together, that is over £¾ million a year which could be spent on the homeless.
Since Ealing Borough Council changed political control last May, almost 1,000 new council jobs are said to have been created; for example, a police unit co-ordinator at £18,000 a year and the head of a race equality unit at £20,000 a year. The council has apparently had to rent a new building to accommodate all these new staff. Just think what else the council could have used this money for.
The London borough of Brent has a national reputation. It is now advertising for a range of new posts: race advisers, women's advisers, gay advisers. I can only assume from listening to my noble friend that this did not go down very well locally. The council, you see, has also had to employ a public relations firm to boost its poor image. This is more than a convenient political quip to the people of Brent. They are the ones who have to pay—not only the vast sums involved in employing these specialist advisers but also, it is reported, £1,000 per month to the public relations firm and £10,000 for its publicity.
Haringey, as my noble friend spelt out so clearly, is seeking to promote homosexuality in its schools. The wishes of ordinary, decent parents count for nothing. In some areas, grant-aid is said to be in jeopardy if recipients do not follow the council's policies. We all know how they do it. My noble friend has spelt it out and I have no doubt other noble Lords will bring their knowledge to bear.
In March 1986 the Liverpool district auditor sent a report about the city's finances to every Liverpool city councillor. That report was utterly damning. That seems to be one of my currrent phrases, but it is justified, I am afraid. It described the poor performance, the appalling style, the inefficiency, the ineffectiveness and total disregard for value for money displayed by the city council. It painted a picture of carelessness on the part of councillors about the management of the council's affairs. It made clear that in Liverpool it is the council which comes first, second and third, and the effective delivery of services to citizens comes last of all. I could multiply these examples but it would depress me. I am sure it would depress the House too.
Enter the seventh cavalry, with a flourish of trumpets made up of leaks! I mean of course what the Opposition has in mind to stop these abuses and to regulate the antics of their hard Left colleagues. I have the blueprint here. The Labour Party has circulated a paper outlining its ideas for reforming local government in England and Wales. Believe it or not, its plan is to give these outrageous councils more powers and more money; and to remove the existing controls on their activities.
Let me briefly highlight some of its proposals. Local authorities would be given a general competence to act in areas not expressly proscribed in statute. As a bonus, it is hinted that they might also be given control of wider remits—the health service and the drawing up of elaborate strategies for the regional economy. The London boroughs might get control of the police. Imagine the consequences of putting the leadership of some of these boroughs in charge of the police.
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To encourage some councillors to continue their political crusades, it is proposed to give them salaries commensurate with those of government Ministers. Not only this, but personal liability for their public spending decisions would be removed. They will be free to compete with the private sector in the provision of any services they choose. There will be presumably local authority garden centres, local authority building firms, local authority entertainment centres. In passing, should I put a proposal to my right honourable friend to have a garden centre in Green Park, I can only assume I would get full vocal support from the Opposition. I hope this will not remain party policy after the discussions in Leeds.
Looking at the party's paper, it is difficult to know just what is being proposed in local government finance. I hope the noble Baroness, Lady David, will spell it out for us. But it seems clear that the proposals would give local authorities no incentive at all to restrain their expenditure. With our knowledge of certain local authorities we can imagine the likely spending bonanza that would ensue. If past experience is anything to go by it could mean in some authorities more gay and lesbian clubs, more nuclear-free zones, more anti-police propaganda and fewer services for ordinary men, women and children. One begins to wonder when these authorities will have time to turn their minds to their real task—that of providing services for the people in their localities.
It is also proposed to abolish the mechanism which the Government have used to tackle the worst spending excesses of local authorities: rate limitation. But what about the ordinary ratepayers? If authorities selected for rate limitation next year were allowed to spend as they would like, there would be rate increases of upwards of 50 per cent. and even 100 per cent. That would not be good news for ratepayers. In overall terms, rate bills next year in the 20 selected authorities will be £60 million less than the total bill for this year. That means £60 million more in the pockets of the ratepayers.
But—I seem to hear noble Lords opposite cry—the rate limits you are setting will lead to massive cuts in services. The answer is quite clear: they have not in the past and they need not in the future. What the Opposition does not say is that rate-limited councils are typically the worst offenders when it comes to waste and inefficiency. Look at Brent, for example, where rent arrears run to a staggering 63 per cent. of total rent collectable in a year; or Lambeth where the Lambeth Walk laundry costs ratepayers £8 a wash, but customers pay only £1.50. Lambeth Walk is leading the ratepayers a merry dance.
I could go on with these examples of gross inefficiency, but there is no need to do so. The Audit Commission's latest report has highlighted to a disturbing degree just how wasteful some of the inner London boroughs are. It contrasts the wasteful and incompetent way in which eight Labour-controlled London boroughs run their affairs with the rather better performance of a second group of other London local authorities with similar problems under a variety of political control.
On average, the eight boroughs in the first group spend £7 per week per household more than those in

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the second group. Yet the Audit Commission shows that the services they provide are no better and often worse. Their refuse collection is no better that those of the other councils but it costs them 20 per cent. more per household. It takes seven weeks longer on average to relet houses or flats requiring minor repairs. They spend a staggering £5,700 a year more for every child in residential care. How can they manage to spend so much more?
One way they do it is by following the exhortations in the Labour Party's paper—they employ more staff. They employ a third more staff per resident than the other boroughs and twice as many staff per resident as the most deprived metropolitan authorities outside London. One of these authorities was found to have over 100 committees, sub-committees and working parties of members. It is bureaucracy gone mad. Of course they blame the Government's grant and capital control systems. Yet, as the Audit Commission has shown, other authorities in very similar circumstances can cope well and live within the guidelines. Why cannot they? A number of authorities have sought to get round the government controls on capital and current spending by means of creative accounting. The Audit Commission's report also pointed out that in a number of London authorities expenditure is outstripping income by a long way. Some authorities have been covering the gap by various dubious devices. The Government deplore the use of creative accounting devices which leave ratepayers facing a huge bill in future years, regardless of local election results. It is reckless and imprudent. It mortgages the future so that people do not have to face up to reality now. If one wanted to be emotive about it—and I do not—one could call it buying votes on the never-never. At least the Opposition's document appears to recognise the problem. It says;
"The sensible solution is to recognise that capital expenditure under deferred purchase arrangements has already taken place."
Quite what that means remains to be seen. Perhaps the noble Lord, Lord Underhill, will tell us when he comes to wind up.
I am delighted that the Labour Party are discussing the future of local government; but their proposals seem to me to have one fatal flaw. They do not address the relationship between the people who pay for services, the people who receive them, and the people who vote. The absence of any effective relationship is at the root of many of the problems of local government today.
The Government have been concerned about the growing abuses in local government for a long time. Our concern is mirrored by ratepayers and businesses and we have been getting on with doing something about it. Early in 1985, we set up an independent committee of inquiry to look into a wide range of practices and procedures in local government—the Widdicombe Committee. The committee's report—which was published in June last year—contains a substantial package of proposals designed to safeguard and strengthen the democratic process. The Government have not reached any firm conclusions on these proposals. We believe that it is essential first to consider the views of those most affected—including the people in local government
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who would have to administer the changes. All local authorities and other interested parties were asked for comments by the end of last year. We are now analysing the report and the responses to it before deciding on the best way to strengthen local democracy.
I hope that this debate will produce many views. I can assure the house that my right honourable and honourable friends will scrutinise them with the same care that they are giving to the written responses. But let there be no mistaking that the Government take very seriously the threat posed to local democracy by the antics of some local authorities. This threat is spreading. It is a threat—I agree with my noble friend—which we cannot ignore.
The Government are also firmly committed to preventing profligate behaviour by local authorities. Since its introduction in 1985–86, rate limitation has meant enormous savings to ratepayers—and not only those in rate-limited authorities. Other authorities have exercised greater restraint to avoid being selected for rate limitation. They realise only too well that it is not in their real interests.
The Government have also been undertaking a review of the present capital control system. We have decided against introducing major legislation on this in the current session of Parliament because we believe that the system of local authority capital control is now best considered alongside the proposals in Paying for Local Government for the wider reform of local government finance. There are obvious advantages in introducing changes in the arrangements for current and capital together.
We are committed to implementing far-reaching reforms of the system of local government finance. The proposals set out in our Green Paper are designed to restore local accountability and thereby enhance democratic local government. However, the behaviour of a small number of local authorities has to be stopped without delay. We have already acted to end an abuse relating to advance and deferred purchase schemes. These are borrowing schemes masquerading as expenditure. They transfer expenditure from the year when work is done to an earlier or later year. If indulged in on any scale, deferred purchase stores up massive problems for ratepayers in the future regardless of future election results.
We shall also be introducing legislation to promote more competition in the provision of local authority services. Competition is essential to securing efficiency. This legislation is not part of some anti-local government campaign. It forms part of our determined drive to increase the competitiveness and efficiency of the whole economy. Local government accounts for about a quarter of public expenditure. Its efficiency is crucially important for the health of the economy.
However, competition is no good unless it is fair competition. A growing number of authorities are abusing the contractual process. Some indulge in political posturing; for example, by banning contractors who have worked at nuclear missile sites, or have transported workers across picket lines, or have links with South Africa. Others do all they can to

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make it hard for contractors to compete. They say how much contractors must pay their staff, and they lay down other conditions of employment. As I said when I had the honour, on behalf of the Government, to respond to one of the debates on the Loyal Address, local authorities are not the courts.
These kinds of practice have nothing to do with the contractors' ability to carry out work or supply goods, or with an authority's duty to its ratepayers to obtain value for money. They are merely an attempt by authorities to impose their own social policies on firms who wish to do business with them. Some authorities have also developed all kinds of other anti-competitive practices. They reject lowest tenders without good reason. They offer work in ways designed to make it unattractive to contractors. We shall deal with practices like this in the legislation.
I have not enjoyed making this speech, but the picture that I have painted of what is going on in some authorities—and I stress in some authorities—is a fair and accurate one, and depressing. In some authorities the extremism and the profligacy are very depressing indeed. The whole local fabric is being undermined. Do not think that I am saying this only because the authorities concerned have different politics from mine. The Audit Commission is entirely independent. It makes the point clearly enough, goodness only knows!
Let us hope that the Audit Commission's words, coupled with the continuing discipline of the Government's controls on local authority expenditure, will serve to concentrate minds on efficiency, economy and good management rather than political posturing and opportunism. That would go a long way towards tackling the real problems which undoubtedly exist. Where there are real abuses, the Government are not hesitant to use legislation to stamp them out. However, there is another remedy. Local voters know what is going on in their own areas. If one message is to go out from this House this afternoon, it is that enfranchisement is the best weapon of all. My message—I hope our message—to people up and down the country is: "use your vote."
4.19 p.m.
Baroness David: My Lords, I must at once say how much I agree with what the Minister has said. We want people to use their votes. I must, of course, congratulate the noble Baroness on her fluency which is extreme. The noble Baroness attacked councils as being anti-democratic. However, I must confess that I found her speech anti-democratic, because if these councils are doing things which are so bad and so unpopular then it is up to the electors to use their votes and to find people they prefer. In this I agree with the Minister.
Listening to the noble Baroness on the two subjects of education and local government I always find that she is very extreme indeed. I must not use the word "unbalanced", but there is a marked contrast between her speeches on these subjects and those she makes on nursing and the health service, which seem to be extremely sensible.
I am worried by the tone of the debate so far this afternoon. I do not like it at all. Those noble Lords
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who were present on Monday for the debate on the urban priority areas will appreciate that so far the tone and atmosphere of this debate have been very different.
I should like to remind the House of the appalling problems with which some of these councils have to deal. Anyone who listened to the debate on the urban priority areas on Monday, which was opened by the noble and learned Lord, Lord Scarman, will know that there is a real crisis in our inner cities. The noble and learned Lord said:
"But let us never, at any stage during this afternoon's debate, forget that the shadow of that decline and decay hangs over the nation at large, introducing into what is on the whole a happy and sunny place a very dark and dangerous shadow".—[Official Report, 2.2.87; col. 14.]
At col. 15 the noble and learned Lord went on to say:
"I suggest to your Lordships that we should forbear from a fine slanging match at the expense of either Labour or Conservative governments in their efforts to solve the problem …".
I hope that other speakers this afternoon will pay heed to that because the situation is too serious and too alarming for political capital to be made out of it. "Politicking" (I think that such a word now exists) is not suitable and not right.
If we look at the councils in the Commission's Groups A and B, we find Brent in Group A. In my speech I shall refer almost entirely to the Audit Commission report, on which I thought that this debate would probably be based. The Minister said that Brent was Labour-controlled, but it was not Labour-controlled until May last year. Therefore a great many of the matters which have been complained of were certainly started when the authority was under Conservative control. Brent had the highest turnover of senior officers leaving in the three years to late 1986: 77 per cent. In Group B, which are the "better" authorities, if that is the right word to use we find Greenwich and Newham, which are Labour-controlled. Therefore blanket condemnation of Labour councils will not wash.
I must make it absolutely clear at once that we on this side do not wish to defend inefficiency, waste or incompetence. I am very glad to have heard the Minister say that it is a small minority of councils which come into that category. We support good management, but good management alone will not solve the grave problems faced by these councils. Nor can central government be let off their responsibility for many of the difficulties that local government has had to face over the last seven years. The bad relationship between the two—and that applies not just to those few minority councils—has not helped.
It would be fair to say that the problems and pressures in Group A, the target group, are much more severe than they are in the other two groups. The Government's own measure of relative need—grant-related expenditure—shows the following for the two largest services for inner London authorities: social services is 9 per cent. higher than it is for the other London authorities and 76 per cent. higher than it is for those outside London. The differences are even greater in respect of housing: over 100 per cent. greater than it is in the other London authorities and a massive 645 per cent. greater than it is in those

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authorities out of London. This in itself is not conclusive because GREs themselves are flawed and reflect government policy decisions as well as need. However, the Government could hardly be accused of bias in favour of the target group of authorities.
The target group have greater council house stocks per head of population; their population is more ethnically diverse. The proportion of children in one-parent households is 16 per cent. higher than it is in other London authorities and 58 per cent. higher than it is in the outside London group. Homeless households are 40 per cent. higher in the target group than is the case in other London authorities.
I believe that it is right to take these facts into account and that it is inappropriate simply to compare expenditure levels or unit costs of the three groups and deduce that any differences are entirely the consequences of management structures or the fault of politicians.
Another factor that we must examine is the very high cost of both commercial buildings and housing in London. All public bodies suffer from this. In the London area rent per square foot of office space is on average £14 and it is £6 per square foot in the regions. A consequence of high commercial rents is a general rise in property prices. The very high cost of housing means an upward pressure on wage costs, which are 12 to 18 per cent. higher in Greater London than they are in England as a whole. This means that there is difficulty in attracting good officers to work in London. At the moment London is a net loser of key staff because variations in pay levels between London and the rest of the country do not adequately reflect the higher cost of living in London. Not only housing but high travel costs have to be taken into account. The Economist, in an article last October, concluded:
"Local government pay is practically uniform across the country and local government officers are much higher up the pay ladder outside London and much lower down in London. A job which might be regarded as relatively easy and pleasant, such as running the housing department in the City of York, attracts much the same basic salary as the difficult job of running the housing department for the inner London borough of Haringey".
The Audit Commission Report says:
"local government salaries and conditions make it difficult for inner London authorities to compete with the private sector or less stressful authorities in the provinces. … This is particularly true in the information technology field, where senior council staff in London are paid around one-third below the rate necessary to attract the very best qualified people, as the jobs demand".
Of course these people in the finance field are just the sort of people the councils need for managing their budgets and their financial problems.
Many of the problems faced by local authorities in the capital are also faced by district health authorities. They have the same high-cost problems and they have to deal with very similar social problems. They exhibit the same kind of cost differentials with the rest of the country as the local authorities. If one takes the basic costs of each acute patient treated, the costs in London per 1,000 residents are a minimum of 24 per cent. above the English average. If one examines the cost of domestic services—cleaning and porters—one sees that all but two authorities have costs over 24 per cent. higher than the English average. This information
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comes from the DHSS published performance indicators for district health authorities.
Alternatively, let us look at the costs of the Metropolitan Police, the only force in England and Wales which is directly and solely responsible to the Home Secretary. Police costs in London are substanially higher than those in the rest of England, including the inner city areas. If one compares police costs on a per capita basis—that is a common basis of comparison and one often used by the DoE and the Audit Commission to compare local authorities—the Met. might well be condemned as grossly inefficient, for its costs are almost two and a half times greater than those in the rest of the county.
Lord Elton: My Lords, will the noble Baroness give way? In making her calculations, I hope that she will bear in mind that the Metropolitan Police Force is responsible for the capital and has numerous national responsibilities, including, as we heard during Question Time today, inquiries in other parts of the country. It is not fair to compare its costs with those of other police forces.
Baroness David: My Lords, of course I must accept what the noble Lord says. However, I still think that it is odd that the Metropolitan Police premises are four and a half times as costly as those in other parts of the country and that expenditure on civilian staff is six times as much. I should have thought that that was indicative of overstaffing. One suspects that those would be the conclusions drawn up if the discussion had been about local authorities. If it were argued that the per capita presentation of the figures is misleading due to the sheer size of the Metropolitan police and the special functions it performs, we might take as our measure the cost of clearing up serious crime. Outside London police forces spend on average £1,969 for each crime cleared up. In London the figure is £7,269. In spite of the additional cost, performance there is markedly less good.
If the Audit Commission were producing a report on the police, the next stage might be to calculate the waste of resources implied. If the Met. spent only twice what it spends on the rest of the country for each crime solved, that would save over £400 million. The Commission might then urge the Met. to improve its efficiency to achieve this target and suggest that the savings can be used to increase the number of crimes solved, or to cut police numbers. However, I shall not continue with that matter and hope that the point is made.
I want to speak of the DHSS supplementary benefit offices. They have a very direct bearing on local authority costs, particularly housing costs. This is because of the administration of housing benefit and the problems of rate and rent arrears about which the audit commissioners had something to say.
The Greater London Citizens Advice Bureau, in a survey of DHSS offices in London, said:
"The system for administering supplementary benefit has virtually collapsed."
The collapse of the service of paying SB to over 1.3 million people in London dependent on it, has important consequences for local authorities. It is another indication of the special problems faced in

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London because of the concentration of unemployment and poverty.
I should like to read a few of the findings of that survey because I think they are important. They are as follows:
Almost 75% of DHSS local offices failed frequently or very frequently to assess and pay benefit within the statutory 14 days; …
There were frequent errors in assessment and calculation of benefits in 38% of the offices surveyed; …
88% of DHSS offices do not have sufficiently trained staff …
66% of DHSS offices have a backlog of claims waiting to be processed; …"
It is easy to understand the difficulties that this causes to the social services and the inevitability of build up of rate and rent arrears.
If claimants are very short of money they cannot be blamed for spending the available money on food and warmth (particularly if there are children and old people who have to be cared for) and deferring paying the rent. I hope that by reference to the health service, the police and the DHSS service I have shown that the high costs which are faced by London local authorities are not unique.
At this moment I wish to say something about ILEA. The noble Baroness made some references to it. I asked Mr. William Stubbs, the Chief Education Officer of that authority, to tell me what he thought about what the Audit Commission had said. I received the following letter this morning and I think that it should be quoted:
"The first point to make is that apart from a formal reference to the Authority in paragraph 2 as the Authority which serves the inner city, it is noteworthy that there is no other reference to the Authority in the document. That is no accident. The Audit Commission looked carefully at the Authority and what it was doing and were satisfied that it was seeking to tackle the serious problems facing the inner city. It would be misleading, therefore, if critics of the Authority were to see this document as evidence of mismanagement in the ILEA.
In paragraph 4 (of the Commission report) there is a reference to the qualifications of young people where the document, after drawing attention to the decline in job opportunities in Greater London, goes on to say 'This is particularly serious when around half the 95,000 leaving school in inner London every year have no 'O'-level or equivalent CSE passes.' John Banham, the controller, confirmed with me that the reference to inner London school leavers is an error and it should have been a reference to Greater London, in other words, to the area covered by the ILEA and the other 20 local education authorities. The number of young people currently leaving school in inner London each year is 24,000. Of these 20% leave school without an 'O'-level or a CSE qualification. I understand that the Commission were attempting to draw attention to the number who have no passes at Grade A-C at 'O'-level or CSE grade 1. As you will know, that is a restricted definition of success in examinations but even on this criteria, the percentage of young people obtaining such passes in ILEA establishments has increased over the last three years from 31.5% to 33.9%.
You will know full well of the social problems facing us in inner London and of the initiatives that the authority has taken to meet these needs ranging from special support to schools for children for whom English is a second language, to the establishment of special teams of inspectors whose task it is to bring about an improvement in the achievement of young people in designated schools.
All of this, of course, needs to be seen in the context of our impending budget difficulties where the Government is seeking approval from Parliament for a reduction of some £125 million in the Authority's budget. That is scarcely likely to accelerate our drive to improve the quality of the education service."
That is the end of the letter from Mr. Stubbs but I think it is important to get the matter put straight.
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The Audit Commission report is rightly critical of much that the councils do or do not do. The report suggests that efforts are now being made. Paragraph 41 states:
"But the Commission and its auditors have been convinced that some, at least, of the authorities in Group A now recognise the need for change in the way their affairs are managed."
I saw Mr. Banham last week and he told me that discussions are going on with the authorities concerned and there is willing co-operation and constructive action being taken. He approved of the decentralisation going on in Islington. There are very substantial reductions in rate and rent arrears and in housing voids. The AMA is in the process of setting up an efficiency and best practice unit, which it is hoped will be really useful to its members.
Mr. Banham did not make light of the difficulties that these authorities have to face; namely, the quick turnover of staff, the posts vacant and the problems of attracting officers to London, about which I have already spoken. There is also the quick turnover of members referred to in paragraph 44:
"Excluding Lambeth, in the boroughs in Group A less than 20 per cent. of members has more than four years' experience. There is therefore a dearth of experienced councillors.
I would suggest that annual elections can help to give continuity to the councils. I was delighted that aldermen were abolished in 1974. But I suppose their existence did give continuity and some practical experience to the councils. If councils are replaced totally every three or four years as a result of elections, then there could be a large group of new and quite inexperienced councillors. I think that it a pity.
One cannot help speculating that the antipathy to local government which this Tory Government seem to have, resulting in less and less decision-taking being at the local level, constant changes in the way finance is provided, and a constant rundown of the services that a good councillor wants to see for his area, may well have driven good and experienced councillors from being prepared to stand for election.
Local government has been downgraded. Speaking as a councillor for many years, I am extremely sad about that. The report does not let the Government off the hook. It criticised the present system for distributing block grant to local authorities and controlling capital expenditure in an earlier report. I am not going to quote the whole of the report but parts of paragraphs 55, 56 and 57. Paragraph 55 states:
… "Suffice it to say that, in the Commission's view, the existing systems are wasteful and inefficient—and have given rise to many of the creative accounting devices referred to earlier. Like tax avoidance, creative accounting will always exist so long as there is such a complex system of central planning and control."
In paragraph 56 the report states:
"But London faces some particular problems, associated with the combination of relatively high rateable values, and the withdrawal of grant from authorities spending above GRE—which has the effect of penalising ratepayers for the spending decisions of councils over which they have little (if any) influence … under the present system, deprived London authorities can receive less grant per person than less deprived authorities outside the capital. For example, the residents of Hackney which is arguably the most deprived borough in the country received some £200 per household less in rate support grant last year than Manchester, which has lesser problems and does not face the extra cost of the London labour market. The difference would have meant almost £15 million in extra grant to Hackney in

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1985–86 … Expenditure on housing improvements in London needs to be increased, yet capital allocations for housing to local authorities in Greater London have fallen from £1.5 billion in 1979–80 to under £500 million last year; and London's share has fallen from 35 per cent. to under 30 per cent."
As the local authorities are taking heed of the commission's findings, so I hope will the Government. The report spells out the underlying problems: high welfare dependency and generation intervals of 15 years or less; youth unemployment of 70 per cent. or more; high crime rates, much of it drug-related; uneasy relations between the police and a disaffected and largely unemployed under-class, with no stake in the development of the society in which they live. Unless these problems are solved the future for our cities can only be horrific. It must not be allowed to happen.
It is a huge sociological problem. The Audit Commission sees effective management as the key to preventing it happening. It will help of course, but it will not be enough on its own. There must also be a wider understanding by the Government of what they should do and what their actions in the past have caused to happen. I hope sincerely that the Minister in responding to today's debate will be able to say that the Government too are paying attention to the criticisms levelled at them in the report; and that if the councils are making a real effort to make improvements the Government will help them and will propose some reforms themselves that will end this horrible confrontation that has bedevilled relations between central and local government for some years.
4.42 p.m.
Lord Harris of Greenwich: My Lords, first I should like to welcome the fact that we are having this debate. Our enthusiasm for it is perhaps a little greater than that of the noble Baroness who has just sat down, and for perhaps rather predictable reasons. I did not find the speech of the noble Baroness, Lady Cox, antidemocratic. That is a curious argument. If we are to say that if we attack a local authority it is being antidemocratic, what happens when we are attacking the elected government of the day? It seems a strange argument at first sight, but no doubt the noble Lord, Lord Underhill, will come back to this point when he responds to the debate at the end of our proceedings today.
First of all, the common ground. It was said by the noble Baroness, Lady Cox, and indeed by the noble Lord, Lord Skelmersdale, that there are indeed many worthy councillors—Labour councillors, Conservative councillors, Alliance councillors—and many first-rate local authorities. But what we are talking about today, as the noble Baroness rightly said, is a minority, but undoubtedly a growing minority, of local authorities.
I, like her, do not like this term, the "loony Left". It is a silly phrase. It conjures up in one's mind some of those cartoons from Cummings in the Daily Express where one had those bewhiskered and bearded people, wearing sandals of course, or carpet slippers, and always wearing rather scruffy pullovers. I do not think there is much relationship between that and Mr. Ken Livingstone, Mr. Ted Knight and Mr. Bernie Grant.
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They deserve to be taken seriously. We take them seriously on these Benches, and I suspect that Mr. Kinnock takes them even more seriously.
The objectionable behaviour of the minority of local authorities that we are talking about falls, I think, into three categories: first, their financial irresponsibility—touched on, of course, in the report of the Audit Commission—which is leading a number of them close to bankruptcy; secondly, their contempt for the principles of democracy, and their efforts to suppress minority rights and often majority rights.
The third category is their gross and continuing abuse of power; their determination to appoint officials on the basis of their political beliefs rather than their capacity to do the job; their efforts to spend large sums of public money on political propaganda (efforts which are, I may say, continuing); and their use of public money to support a wide range of Left-wing extremists from so-called police monitoring groups to the front organisations of the Provisional IRA. Incidentally, I find it quite extraordinary that we have elected representatives of the people of London who are prepared to provide a platform for men and women who are acting in the interests of people who murder British soldiers and policemen.
I propose to touch on each of these issues and discuss briefly how I think we should deal with them. First, then, the question of their financial record. As the noble Baroness, Lady David, said, no one should underestimate the real difficulties which would face any local authority in an inner-city area, however moderate that local authority might be. As the Audit Commission said in its report published last week, there are disturbing parallels between some parts of inner London and some parts of the South Bronx in New York and the Southside of Chicago. There is poor housing and education; high unemployment; a very high—disturbingly high—level of crime, a substantial proportion of that drug-related; and an exodus of jobs and the better off to the suburbs. It is exactly the frightening situation that we have seen in the United States and which was touched on in the debate on Monday initiated by the noble and learned Lord, Lord Scarman.
It is a daunting situation. What it requires is a genuine partnership between central and local government. What unhappily we see is remorseless confrontation. We have certainly made clear on these Benches our criticism of the Government—and did so on Monday—so far as their policies towards the inner cities are concerned. But it is only fair to say that no government of any political persuasion would be able to tolerate the behaviour of the hard Left local authorities we are talking about today.
Consider for a moment the record of the eight boroughs mentioned in the Audit Commission's report: Brent, Camden, Hackney, Haringey, Islington, Lambeth, Lewisham and Southwark. Their expenditure, says the Audit Commission (I think most of us found its report to be a persuasive and extremely fair-minded document) is double that of similarly deprived areas after allowing for the extra costs associated with employing people in London. There is a cash gap of £400 million in prospect for next year—as much as 40 per cent. of the revenue

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expenditure in some of those boroughs. And there are over £700 million of deferred purchase arrangements: in effect, a huge burden of short-term debt overhanging these councils.
Unless some form of urgent action is taken the position of these councils is going to become unsustainable. There is a real risk—Mr. Banham referred to this only a few weeks ago—of the collapse of public services affecting some of the most deprived people in our community.
In almost every area of these councils' activities there is waste and mismanagement. Rent arrears, as we know, are spiralling out of control. For the eight boroughs I have named, their rent arrears are now, on an average, 20 per cent. of their annual rent rolls compared with under 7 per cent. for a group of local authorities in equally disadvantaged areas, most of which, if not all, are Labour controlled.
Their re-letting policy is equally dreadful, as the noble Lord, Lord Skelmersdale, said at the beginning of the debate. It takes no less than an average of 20 weeks—20 weeks!—to re-let a council property in these London boroughs. These are boroughs where councillors spend a great deal of their time talking about the problems of homelessness, yet preside over a situation where, as a result of their own incompetence and obsession with matters which have nothing whatever to do with local government, the situation is getting even worse. The management costs per dwelling, because of this deplorable inefficiency, are twice as much in those boroughs in inner London as they are outside.
There are many explanations for this extraordinary contrast between records. Let me give your Lordships' just two. First, the Audit Commission says in paragraph 45 of its report:
"Members often find it difficult to distinguish between their roles as politicians, employers and trade unionists. It has proved extremely difficult to secure changes in the face of trade union opposition, often supported by members, and attempts at any kind of performance review all too often result in demands for extra services, which are countered by claims from the trade unions for additional staff and salary regradings. As a result, auditors' reports are peppered with references to industrial relations difficulties".
In giving just one example from one of the boroughs concerned, the Audit Commission says this:
"The Council has a no redundancy policy for its employees. Such a policy might be expected to lead to harmonious industrial relations but in fact this is far from being the case. Staff operate a policy of no cover for vacancies, sickness and so on. Staff in the public libraries have also imposed minimum staffing numbers. When numbers on duty fall below levels set arbitrarily by the staff side, libraries are closed to the public. During 1984–85 there were numerous days when area offices of the Social Services Department could not open to the public".
That is what is going on in one inner London borough after another, and it is a disgraceful story.
There is another reason, I think, why the situation is as bad as it is, and that is the frivolous attitude of so many of the councillors towards their responsibilities. Let me quote just a few items appearing on the agenda of a full meeting of Lambeth council, one of the councils referred to by the Audit Commission, which was held just before Christmas: a petition against the attendance of male councillors at meetings of the women's rights committee; address by representatives of the National Union of Eritrean Women;
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disbandment of Aberdeen Women's Committee; address by Sinn Fein councillors; and Lesbians and Policing.
I think that gives one a flavour of what it must be like to have the privilege of being a member of the local authority in Lambeth. It is silly, it is pointless, it is damaging; and all it does is to bring local government itself into disrepute.
I turn now, if I may, to a second issue which was identified at the beginning of my speech; that is, the contemptuous disregard for democracy which is shown by many of these councils. Opposition councillors are often denied, as a matter of policy, information which they require in order to carry out their responsibilities as elected members of the council. It is true that sometimes it is possible to challenge the cruder manifestations of this policy in the courts. That was done, as the House may recall, in the Hackney case where the Divisional Court intervened decisively. But of course Opposition councillors have to take a massive risk. They have to finance their own action when they go to the courts, knowing that the full resources of the local authority may be used against them and that if they initiate the action they may have to pay costs, not only in the Divisional Court but in the Court of Appeal and even, should it go so far, in your Lordships' House.
Quite apart from that, when one goes, as I went, to a meeting of the local authority in Lambeth two years ago—it was its rate-fixing meeting—one is deeply depressed by the spectacle. I was for six years the leader of the Labour majority group in Essex. We had our differences of opinion there, but I had never seen anything quite like the Lambeth meeting. A calculated effort was made to deny the opposition the right of free speech, and the mayor, who presided, took no action whatever to defend minority rights. One hears disturbing reports that this is going on in one council chamber after another. It is, I think, an exceptionally sad story.
Lastly, if I may, I will turn to the gross abuse of power by those authorities. First, there is the desire to politicise council appointments. I raised this issue last November in the debate we had on the gracious Speech. I point out that in its last annual report the Audit Commission said this about some of the inner London authorities:
"Relations between members of the authorities and their senior officers are not universally on a sound footing. Senior appointments are not always made on the basis of the ability to do the job."
Indeed, that is certainly true. In many authorities, of course, not the slightest effort is made to disguise their objective, which is to appoint political zealots to key council posts. Let me give your Lordships just two examples of what is happening. In its most recent report—the noble Baroness, Lady David, referred to these figures although her interpretation was perhaps, slightly different from mine—the Audit Commission drew attention to the quite extraordinary turnover of senior officials in London boroughs. Some of the vacancies have arisen because officials have been arbitrarily dismissed solely because there has been a change of political control in the authority itself.
That is quite extraordinary. Ten years ago that would have been regarded as inconceivable. It is as

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though, with a newly elected government in this country, the first thing Ministers did was to dismiss all the Permanent Under-Secretaries and the Deputy Under-Secretaries in Whitehall. In other cases, officials have moved because of the relentless harassment to which they have been subjected.
I would ask your Lordships to consider these quite extraordinary figures for the period to late 1986. During that period 39 per cent. of Haringey's senior officers went; in Southwark, 57 per cent, of their senior officers went; in Camden in was 69 per cent. That is in a period of just three years. And, of course, with that record of officer harrassment many key jobs in the authorities concerned have been left unfilled for months. The Audit Commission says that there are no fewer than 32 jobs in the top three tiers which are vacant in these boroughs and also 15 chief officer posts vacant, where the pay is in the region of £25,000 a year.
There is also a shortage of skilled accountancy and computer staff, so that several of the boroughs concerned have failed to file their full accounts for the last financial year, which they had to do by last September. Last December the Audit Commission said that a number of them had still failed to do that. That is bad enough. What is worse is the manner in which many authorities—far more than the eight to which I have referred—attempt to fill the vacancies that do arise. They ask many applicants for the positions involved to indicate their sympathy for the objectives of the council. That is how it is described. What it means of course is the political views of the dominant party group on that council. Sometimes the approach is even more blatant. Fo the first time in local government history there is now heavy public appointments advertising in the columns of one party newspaper, Labour Weekly.
In one or two special cases—for instance, where an appointment is being made as a special adviser to the leader of the council—I think that is perfectly legitimate. But let me give some examples of what is being done at public expense. Stirling District Council bought advertising space in Labour Weekly to advertise a vacancy for a recreation officer; Sandwell did so for the head of a school music department; Kilmarnock for a parks manager; Manchester for a chief emergency planning officer; my old Labour authority of Harlow for a development officer and a computer officer; and Edinburgh for a principal assistant to their veterinary surgeon. I do not know how many veterinary surgeons are likely to read Labour Weekly—a fairly modest number, I should have thought.
It is just conceivable, I suppose, that one of the objectives is to pump a lot of money into Transport House funds. I think that the House and the Government should ask themselves, whatever party newspaper or political party is involved—that is absolutely irrelevant—whether there is not something wholly objectionable about subsidising political parties by these methods. Quite apart from anything else, it gives an extraordinary advantage in some cases to an applicant who says, "I am writing in response to your advertisement in Labour Weekly." It could not be much clearer than that (could it?) where his political
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sympathies lie. And, of course, as we know, a number of public appointments are unhappily made on just that basis at the moment. As I said, it is deplorable, and my views would be the same whichever political party was involved in this practice.
Quite apart from that, I want to make one or two points which I have raised previously in the House, as some Members may recall, about another form of abuse of power by local authorities. My noble friend Lord Kilmarnock and I warned the House—it was, I think just after the last general election—of what would be involved if the Local Authorities (Expenditure Powers) Bill were to be passed in the form in which it then was. We said that if that small government Bill went through, its unintended effect would be to allow the local authority in Islington to spend £100,000 of public money on a free sheet produced by the Islington News Co-operative who were political supporters of the majority party in Islington. I fear that the Government chose to ignore our warning despite the support we received from the noble Lord, Lord Boyd-Carpenter, and the noble and learned Lord, Lord Rawlinson. When we put forward amendments to the Bill which would have prevented that happening, the Government voted us down by 105 votes to 57. The Labour Opposition in this House, to their credit, abstained, and indeed four Labour Peers joined us in the Lobby.
What was the result? Islington set up a newspaper at public expense which went bankrupt after £100,000 had been spent on it—and that in one of the most deprived boroughs of London. Who were the unlikely allies of the Left wing councillors of Islington who voted against us? They were the noble Viscount, Lord Whitelaw, the noble Lord, Lord Trefgarne, and, surprisingly, the noble Lord. Lord Skelmersdale. I very much hope that when the noble Lord, Lord Skelmersdale, speaks tonight, he will express the deep regrets of his department for the extraordinarily foolish advice given to the House on that occasion. But now it is happening again. I hope that this time I shall engage the attention of the Department of the Environment with more success.
Islington council has now decided to invest £250,000 of its employees' superannuation fund in the formation of a new Left wing Sunday newspaper in London. I should declare an interest. I am a director of a national newspaper myself. Having said that, I wish this new newspaper nothing but good. I am bound to say however that I wonder why £250,000 of superannuation fund money is being put into this project. No superannuation fund manager in the country would dream of pumping money into a new and so far unpublished national newspaper. The risks are too great. It is once again being done explicitly for party political reasons. This is wholly objectionable, and I very much hope that the noble Lord, Lord Skelmersdale, will look into the matter and see what comfort he can give us at the end of the debate.
Finally, after this catalogue of deplorable decisions by a significant number of local authorities, I come to the central question: what are we going to do about it? The Minister has indicated to us that we shall get at some stage a Widdicombe Mark II Bill. I concede at once that this may have some limited value. But there is a danger that the statute book will become

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increasingly cluttered with obscurely drafted controls on local government which also prove to be largely ineffective. There is the additional problem, as we know from our debates on Widdicombe Mark I, that these have the secondary effect of damaging many worthwhile voluntary organisations.
If Parliament wants once and for all to deal with extremism in the council chamber—and I think there is common ground in all parts of the House, including the Benches to my left—it has a stark choice. The first option is to attempt to impose a further morass of detailed controls which will, I predict, be ineffective. How, for instance, does one deal in a statute with Tammany Hall appointments in the town hall? I know of no way in which a statute can be drafted to make that sort of conduct illegal. Alternatively, we can take action to make it impossible, or very nearly impossible, for extremist Left wing minorities or any other form of extremist minority to impose their will in local government.
When Mr. Ted Knight ruled in Lambeth, presiding over one of the nastiest extremist regimes in the history of London local government, he had the support of precisely one out of every three of the people who had voted in Lambeth in the previous local authority elections. More than 60 per cent. voted either for the Conservative Party or for the Alliance. The noble Baroness rightly referred to Brent which we remember for the squalid persectuion of Miss McGoldrick—one of the most odious incidents that many of us remember in the last 12 months or so. At the last local elections—I recall the enthusiasm of the noble Lord, Lord Skelmersdale, in telling us of the need to ensure that everybody goes out and votes—the people of Brent did go out and vote and they voted against the present majority party in Brent. Forty-six per cent. of them voted for the present Labour so-called majority, but that 46 per cent. of the vote was translated into over 65 per cent. of the seats.
On the Inner London Education Authority which is constantly attacked in this House, and often rightly so, the Labour Party obtained 47 per cent. of the votes and they got 77 per cent. of the seats. This has nothing whatever to do with democracy. This is a caricature of representative democracy. But quite apart from that, by putting into office militant authorities who grossly abuse their power, they are bringing closer the day when there will be still further massive movements of power from local communities to government departments in Whitehall.
Therefore, the choice before us is clear. If we do not want that, if we are tired of this country having the most centralised administration in the Western world, and if we want to re-establish responsibility and tolerance in many council chambers, then we have to introduce proportional representation in local government. Without that, the present tyranny of extremist minorities will continue and the reputation of local government will be still further grievously damaged.
5.11 p.m.
The Earl of Halsbury: My Lords, I hope that I may have your Lordships' indulgence if I speak in a somewhat philosophic and reflective vein this evening
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about aspects of government, both central and local, which have been my preoccupation during the 44 years when I have had a ringside seat in your Lordships' House at party politics, without taking part in them as, for the most part, a public servant and the servant of each party in turn at one time or another.
Bertrand Russell, once asked what sort of society he would want to live in, replied:
"One inspired by love and guided by knowledge".
I do not know that I can inspire anyone by love. But I shall try to guide some by knowledge if I can. From Sigmund Freud I learnt the difference between what he called the manifest dream content and the latent dream thoughts of which a generalisation into the field of sociology would lead one to speculate about the difference between what we think or assert we are doing and what we are actually accomplishing.
For example, if one takes a demoralised and purposeless group of youngsters and forms them up into a football club, one ends by increasing their morale and their self-reliance. However, the overt occasion will be the winning of a football match. One does one thing, and one achieves another.
I have found confirmation of this in Malinowski's "Argonauts of the Western Pacific". The exchange of much prized cult objects between partners on different islands is the motive for undertaking ocean voyages whose functional side effects are the promotion of inter-island trade. From the Siuai of the Solomon Islands I learnt that competitive feast giving, in order to humble a social rival who is the guest of honour at that feast with which he can never hope to compete, is the psychological motive for pig-raising and other agricultural activities in a community which had otherwise little sense of purpose.
I want to borrow one other detail from psychological studies. A factor which is common to all the schools is that we all suffer from an inexplicable sense of guilt for something which we do not understand but which produces a sense of anxiety and which culminates in aggression. Aggression and violence are always beneath the surface of our species
Putting all these thoughts together, I have for a long time pondered on what parliamentary government actually achieves as opposed to what we claim to imagine that it achieves. Does it express the will of the people? Have the people a will in any self-consistent or sustained terms? Of course there is a volatile entity called public opinion. However, that shifts and wavers from day to day. Polls on any subjects one cares to mention make that very clear.
I have finally come to the conclusion that the latent function of our parliamentary democracies and local governments is rather different from what we suppose. Consider any government at half term. It was elected from two to two and a half years ago and it hopes to win an election again in two to two and a half years' time. So hoping, it is unlikely to exasperate its subjects to the extent that they would prefer rebellion, civil war and violent commotion to waiting a couple of years and kicking it out in the cold. It has an essentially pacificatory role in a society over-prone to spontaneous outbursts of aggression. We do of course get them. We were debating those as part of our inner city problems on Monday. But they are at worst small

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localised outbreaks, lacking the destruction and volcanic violence of the French and Russian revolutions.
Acceptance of this view saves me from cynicism about party politics. I accept them as part of our social pattern. On the surface, a general election may appear to be no more than a political All Fools Day whose intellectual or ideological content is not to be taken seriously. But in spite of that, it does achieve something valuable; it pacifies.
The continuity of the process of government is the task of the Civil Service, which pursues a steady course no matter how many political U-turns its successive masters may make. Politicians and their officials represent a symbiosis between two quite different kinds of organisms. I have noted that when a government is in office too long, the symbiotics seem to merge rather than to preserve their identity as such. The result is complacency from which much trouble may issue.
In contrasting central and local government, the concept of safe seats for one party or the other, with safe boroughs or municipalities, plays a rather different role. A Member of Parliament in the other place, no matter how safe his seat, must expect to spend about half his career in opposition, divorced from the civil servants who would have partnered him if he had been in government. By contrast, in a safe borough the same party will be in power for year after year. The distinction between councillors and local government officers will get more and more blurred as they move into a complacent partnership. This is the point at which they are ripe for infiltration by the type of maggot that we heard about from the noble Baroness.
To this another factor must be added. A Secretary of State and his Permanent Secretary are both professionals engaged whole time. However funny the caricature in "Yes, Minister" may be, Sir Humphrey Appleby does not in fact get his own way as easily or as often as that amusing series portrays. In local government, councillors are part-time amateurs. I use that word in no derogatory sense. We all admire the sporting amateur who does it for fun more than the professional who does it for money. Thank goodness there are men of public spirit who will spend their leisure in local government rather than in self-amusement. I am not saying that "amateur" is in any sense a derogatory word. However, it does have connotations of being a part-timer. Whole-time officers can make rings round them. Other things being equal, the professional will always win.
In local government, the field is set for large-scale complacency in a way that it is not in central government. One form this can take is neglecting real problems in order to go play-acting at the solution of imaginary ones or those totally outside the scope of local government power.
In local government, the big issues, the ideological issues that divided Government and Opposition at Westminster, are really quite irrelevant. What powers have local governments to alter the direction of foreign policy; to negotiate with the IRA; to impose sanctions on South Africa or to decide on the level of armaments requisite for defence? No powers at all! But what fun
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for them to pretend they have, or to wander off into proclaiming such and such an area a nuclear-free zone; or setting up centres for lesbian and gay rights while leaving the streets unswept and the garbage uncollected; or becoming stooges for the Soviet-inspired CND; et hoc genus omne and all that.
These reflections come from many years of observation. As I told your Lordships at the start, I have been outside party politics all my life, looking inwards towards them and trying to understand what is really happening as opposed to believing people's claims as to what is going on. One conclusion of sociology is that no closed society can paint its own portrait; only an outside observer can do that. One of the early Marxists—I cannot remember whether it was Marx or Engels—said that the task was not to understand society but to change it. I think that anybody who tries to change anything as complicated as society without trying to take the trouble to understand it ought to be locked up. It is in that spirit that I have tried to address your Lordships this afternoon.
5.20 p.m.
Lord Boyd-Carpenter: My Lords. I always enjoy listening to the noble Earl who has just resumed his seat, and I always regret having to follow him because I enjoy his speeches so much that I find it astonishingly difficult to disagree with anything that he has said. However, I am relieved of that difficulty in respect of the noble Baroness, Lady David, on the Front Bench opposite.
She began her speech with a rather strange comment on the splendid opening speech of my noble friend Lady Cox. She congratulated her, in I thought somewhat acidulated terms, on her fluency, but the congratulations apparently stopped there. I shall reciprocate if I may by congratulating the noble Baroness, Lady David, on her loyalty, the loyalty which a lost cause so often evokes. As the noble Baroness has already heard from this debate, her attempted defence of a number of Labour controlled local authorities has not apparently aroused any echo in any other part of your Lordships' House. Indeed, I should like to adopt and to try to follow much of what was so splendidly said by the noble Lord, Lord Harris of Greenwich.
Baroness David: My Lords, may I—
Lord Boyd-Carpenter: My Lords, perhaps I may just finish that reference and then I shall happily give way. I would wish only to make one exception which will not wholly surprise the noble Lord. I refer to his concluding paragraph. On the other hand, I can tell him that I am rather happy about it because I have a longstanding bet with one of my colleagues that noble Lords who speak from those Benches will drag in proportional representation on any subject you like; and the noble Lord's concluding observations have put me one up on that bet. Now I shall give way to the noble Baroness.
Baroness David: My Lords, perhaps I may remind the noble Lord that I said that we on these Benches condemn waste, inefficiency and incompetence.
Lord Boyd-Carpenter: My Lords, I do not imagine that those are very unusual sentiments. It is on the whole unlikely—I put it no higher—that the noble Baroness would have said in terms that those on her Bench were in favour of waste, however much the practical record of their party in government may contradict that. But one does not expect even so frank a person as the noble Baroness actually to come to the Dispatch Box and admit it. But I shall follow up a little what she has just been saying.
She charged my noble friend Lady Cox, and as I understand it by implication my noble friend Lord Skelmersdale, with having expressed anti-democratic sentiments. That is a very odd comment indeed. Surely the essence of democracy is that we are all free and justified in criticising those who have been elected with the very practical view of trying to replace them by somebody else. There is nothing whatever antidemocratic in criticising the conduct, the behaviour and the policies of people who have been elected to power. Indeed, what is anti-democratic is to try to deny that right, as has happened, as the noble Baroness knows, in certain countries that have established dictatorships. Therefore that was a very odd comment.
Another very odd line of argument which the noble Baroness saw fit to adopt was this. She sought to defend the high spending—the high spending in actual terms and the high spending in relation to their population—of the eight London boroughs referred to in the Audit Commission's report on the grounds that they were in London and that London prices and London costs were higher.
Baroness David: My Lords, will the noble Lord give way?
Lord Boyd-Carpenter: My Lords, I am happy to give way as often as the noble Baroness likes.
Baroness David: My Lords, I did not do that. I said that there were greater pressures and greater problems in those eight boroughs than there were in the others. I did not condone the waste and the unnecessary spending.
Lord Boyd-Carpenter: My Lords, I accept that the noble Baroness said that there were reasons for the waste and the unnecessary spending. I quite agree. But what the noble Baroness did not do—and this is the point that I am coming to—was to have in mind what the Audit Commission said on page 4 of its report. The eight boroughs are listed in Group A. They are compared in their expenditure per head of the population and in the number of staff they employ in relation to population, with those in Group B, eight boroughs also in London. Therefore the attempt to defend, which when the noble Baroness looks at Hansard she will see she made, these high levels of spending on the basis that these are London boroughs falls down entirely when they are contrasted, as the Audit Commission contrasted them, with the eight boroughs in Group B which are also in London.
Baroness David: My Lords, I am sorry to keep interrupting the noble Lord but I fear that he did not
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pay quite enough attention to what I said. I said that those eight boroughs in Group A had problems and pressures greater than those in Group B.
Lord Boyd-Carpenter: My Lords, the noble Baroness may have said that but the Audit Commission said the contrary. I think that most of your Lordships will be more inclined to pay attention to the careful studies made by the Audit Commission in its carefully reasoned report than to the mere assertion of the noble Baroness at the Dispatch Box. The Audit Commission goes on its way to point out that the boroughs in Group B have problems similar to those in Group A. But the noble Baroness appears entirely to have ignored that. When she studies her speech in Hansard, and still more her helpful interventions just now, she will realise that she has given the whole case away.
Rather to my surprise, the noble Baroness did not take the normal Labour Party line—not at any great length at any rate—that all that was needed was to pour masses of money into these difficult areas and all would be well. She made some reference—and I welcome another intervention by her if she so wishes—to the need for financial support and additional resources. But she made pointedly less reference to this aspect of the matter than was made from those Benches in the debate we had on Monday, which of course dealt with very closely related matters.
The debate on Monday related to the very real sufferings and hardships of many people who live in these areas of social disadvantage and poverty. This debate deals with the question of how best those difficulties can be dealt with. In the face of local government mismanagement such as we have already heard about this afternoon, it becomes extraordinarily difficult for those areas ever to recover since every discouragement is put in the way, sometimes deliberately, of those who try to restore the prosperity, the vigour and the wellbeing of the areas, which happen to be—and I stress to your Lordships that this is very important—on the whole areas of great hardship and social difficulties.
It obviously does not make sense—and here again I call in aid the Audit Commission—to pour money in when the areas are mismanaged. On this occasion I shall quote paragraph 9 on page 4 of the Audit Commission report:
"Some London authorities have argued that higher spending reflects greater needs, and that these can only be tackled with more resources and that increased government grant and extra borrowing alone were required. However, increased investment only makes sense if it can be managed effectively: one of the lessons of the past is that 'throwing money at the problem' all too often simply means more waste".
That, of course, is the very nub of the problem we are debating.
In that same context, I should like to refer to some observations made on Monday by the most reverend Primate the Archbishop of Canterbury. I have given him notice that I intend to refer to his remarks. In dealing with the problems of people living in these areas, he said that many would be happy to forgo tax cuts or, indeed, face higher taxation in order to help them. It is exactly the pouring of money into such areas that the Audit Commission has pointed out will be futile, at any rate while they are managed in this

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way. It reflects great credit on the hearts of those who take the line that the answer is to forgo tax cuts and, indeed, to increase taxation on those who are earning in order to help in such areas. It reflects rather less credit in respect of their heads.
In this context I cannot help remembering the rough and tough comment of that great man, the late lamented Ernie Bevin, about his colleague George Lansbury. He said:
"The trouble about poor George is that he is always letting his bleeding heart run away with his bloody head".
It is the fact, of course, that simply to go for increased taxation in order to pour money into the areas of difficulty will only accentuate our national financial difficulties. It hardly needs arguing that that is precisely what successive Labour Governments did, and we can all recall the consequences.
It is only by encouraging wealth creation, by stimulating the processes of production, by encouraging enterprise and by getting the wealth created that resources can be created in order to do what we all want to do in those areas. It would be wholly retrograde and wholly counter-productive to follow the lines which, I am sure with great sincerity, the most reverend Primate recommended to the House as recently as last Monday.
So much has now been said about mismanagment by these local authorities that I can spare your Lordships a great deal of the material I had assembled. However, I should like to put this point forward for consideration. If you are an elected authority, responsible for the wellbeing of an area of social distress, unemployment and poverty, surely, your first duty is to encourage enterprise and initiative—private enterprise or public enterprise, whatever sort you like—to set up businesses and installations and to operate in those areas. Surely, you should give every conceivable encouragement to those who can give employment. That is the first duty of any local authority of whatever political colour responsible for such an area.
Not even the noble Baroness, in her loyal speech, was able to suggest that these local authorities were doing anything of the kind. On the contrary, it is clear that people are being greatly discouraged from moving into these areas. That is a tragedy. Again, in Monday's debate, the noble and learned Lord, Lord Scarman, in a very fine speech, suggested that these areas needed partnership—a partnership, as he spelled out, involving private enterprise, central government and local authorities. But what appeal to partnership exists in the kind of behaviour seen from these local authorities? What sane, responsible entrepreneur who has any regard whatever for the interests of his shareholders would consider setting up an enterprise in today's circumstances in Manchester, Liverpool, Brent, or in many of the other places mentioned?
The prospect in those places is of high rates—of rates certain to go higher unless they are rate-capped. They are areas where enormous financial liabilities for the future are being accumulated as a result of borrowing.
Lord Graham of Edmonton: My Lords, will the noble Lord give way?
Lord Boyd-Carpenter: My Lords, I will give way in a moment. I have a little list, as someone once said in an opera, and perhaps the noble Lord's intervention will be even more effective if I complete the list before giving way.
These areas also have local authorities which are unsympathetic to enterprise, difficult over planning applications, unsympathetic to employers and which create an atmosphere—moral as well as economic and social—that does not attract people to live there. Would the noble Lord like to intervene now?
Lord Graham of Edmonton: My Lords, I am grateful to the noble Lord. Not for the first time has he, like noble Lords on the same Benches, told the House that the level of rates charged in a number of authorities is acting as a deterrent against employers seeking to locate their businesses in those areas. Will the noble Lord comment on a study commissioned in 1985 by the Department of the Environment which was undertaken by Cambridge University? This is what the study said:
"That main conclusion of this report is that we are able to find little if any influence of rates on the location of jobs.".
If that is an objective study, as I believe it to be, having been commissioned by the DoE, how does the noble Lord square his prejudices against the facts?
Lord Boyd-Carpenter: My Lords, if the noble Lord were himself responsible for a business in which I was a shareholder, is he telling me that he would look round the country when deciding where to locate his premises and would then deliberately choose to locate the business in an area of high and rising rates? Will the noble Lord tell me that!
Lord Graham of Edmonton: My Lords, I am an owner and controller through being a director of my local Co-operative society. I can tell the noble Lord that when we examined the effect of rates on our business—a study that covered a range of politically coloured authorities—this was found to play very little part in deciding where to locate. I suggest that rates do not form a major, if any, consideration by employers or entrepreneurs in locating their businesses.
Lord Boyd-Carpenter: My Lords, that intervention has not strengthened my enthusiasm for the intelligent management of the Co-operative movement.
Lord Graham of Edmonton: My Lords, that is a snide remark.
Lord Boyd-Carpenter: My Lords, it must be quite obvious—and I have a certain amount of industrial and commercial experience—that if you are free to choose a location for your premises you will first of all consider the level of rates, in respect of which you will have no vote whatever in local elections. Also—I do not know whether the study mentioned by the noble Lord goes as far as this—you will look into the future. If you go to an area which has been borrowing heavily (as these local authorities we are discussing have been doing) and building up large accumulations of money that has to be repaid in coming years, you will know that you are sticking your neck into a rate trap.

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The proof of the pudding, after all, is in the eating. One need only see how new enterprises are flourishing and growing in what someone nicely called the M.4 valley—the area of high employment, prosperity and low rates which spreads westward from London, parallel with the M.4, towards Gloucestershire—whereas, as is universally agreed and bemoaned not least by the noble Lord himself, people are not setting up enterprises in the very areas we are discussing tonight. As I said, I believe that no sane businessman would take lightly the decision to set up his new enterprise in an area which is run in the way that these areas are being run unless, of course, he received a government grant to do so.
Let not the noble Lord delude himself. It is not only the rates, important though they are. It is not only a question of future rates, important though they are. It is not only the possibility of future bankruptcy of the local authorities concerned, which, for some of them, is not far away. It is also the question of the whole atmosphere with which he did not deal—the atmosphere of a local authority hostile to employers, a local authority that takes an adverse view of employers and that creates difficulties by delaying grants of planning permission. It is really no use the noble Lord quoting all the reports that it amuses him to read. You have to see the plain fact; that new enterprises are not alas (and we would all say alas) being set up in these areas. They are being set up in the Milton Keynes, the Swindons, all these areas in the south of England. In almost any other debate it is the noble Lord himself who is always complaining about that and the fact that employers are not setting up enterprises in these other areas. I can never claim to satisfy him—my ambition never vaults so high—but I think I can claim to have established that his intervention, agreeable as it always is, is really quite pointless and, if I may say so, quite ineffective.
Let us take Manchester which, as already mentioned, is spending half a million pounds a year on anti-nuclear propaganda. It has set up a nuclear-free zone unit of five full-time people at a cost of the best part of £100,000 a year. It is spending £269,000 in subsidy on a new Left wing newspaper, News on Sunday—£269,000 of the ratepayers' money. If that does not satisfy the noble Lord, it is building a gay centre for £118,000. Who is going to be encouraged to go to an area that spends ratepayers' money on the encouragement of actions which, though technically legal in private between consenting adults, are still what most people—including, I think, even most occupants of the episcopal Bench—would regard as sin. Others find such actions disagreeable, and in the light of modern developments, dangerous. When local authorities are doing that, can you really say that they are doing their best to attract industry, to attract enterprises, and to attract people to come and provide employment, the well-paid employment, which they and all the people whom they represent so sorely need?
It is the same in many of these areas. There is the disagreeable party political use of public funds; there is the appointment, which has not been mentioned, by the chairman of Ealing council of a personal assistant who happens to be a Labour councillor in an adjoining authority at a salary of £14,000 a year. What good is that man going to do for the inhabitants of Ealing, or indeed for the council of which he is a member?
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There is employment in unnecessary jobs such as the peace officer in Lambeth; the party supporters appointed all over the place; the police committees in areas that have no police responsibility. Police committees are set up simply with a view to harassing the police and to mobilising support among those who are anti-police.
Mention has been made of the disorganisation in these authorities, of the departure of many senior officers. There are, as I understand it, in the eight boroughs about which we are talking, some 15 top level chief officer posts vacant at the moment, either because the former incumbents have been forced to go or because other officers of that standing are understandably unwilling to work with councillors who they know will behave in this way.
If your Lordships want a final example, may I remind you of the advertisement recently issued by the borough of Brent for a chief education officer—a chief education officer, it should be noted—in which it is specifically stated, "Job sharers, lesbians and gay men welcome". That, for the man who is to be responsible for education! Can one be surprised if people are not anxious to move themselves into an area where their children will be submitted to education so organised?
With high deficits—high and growing deficits—inefficient administration breaking down, high rates, politicisation of officials, departure of officials, it really is a very sorry story. It is quite clear that these areas are not going to recover unless changes take place. There are only two possible changes. One is that the electorate will begin to understand—the noble Baroness may think that it is anti-democratic—and may decide to remove the present councillors and replace them with more responsible people of any party. Or, before long, the Government will be bound, in the interests of the people concerned, to appoint commissioners and take charge. It is really intolerable that in this country of ours, this basically prosperous country of ours, numbers of our fellow citizens should be condemned to hardship and humiliation mainly because of the incompetence and corruption of the local authorities in whose areas they live.
These authorities have, however, done one good turn which they may not wholly appreciate. They serve as a warning to us all. The authorities involved in these discussions cover 13 per cent., as the noble Baroness, Lady Cox, has told us, of the population of this country. They will almost certainly return largely Labour members of their own colour. That colour is very, very red. This is confirmed by the adoption of a hard Left candidate by the party opposite for the Greenwich by-election. If, by any chance, the party opposite were to gain power, these people would be a very influential and powerful element in a government very different, your Lordships must face, from the types of government which were presided over by the noble Lord, Lord Wilson of Rievaulx, or Mr. Callaghan. It will be a dangerously Left government. What these local authorities are doing is to give us all a warning of the danger of such a government. The red flags on the town halls are a red warning to us all.
5.48 p.m.
Lord Taylor of Blackburn: My Lords, I have listened with great interest to the speakers who have spoken

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before me during this debate. I am grateful—and I mean this most sincerely—to the noble Baroness, Baroness Cox, for initiating this debate. In looking at the wording of this debate I feel that the title is wrong; it is long as well. I feel that what we have been tending to do is to concentrate on London and perhaps one or two other authorities outside London. This is not a reflection of local government as I know it and as I knew it. It would be right and proper for you, my Lords, to gather some of my background and then you will understand why I am saying the things that I intend to say.
I entered local government in 1954 as a very young man because I felt a lot of things were wrong in local government. A lot of people were participating in local government who I felt were not making the right contribution. They were not lefties; they were not the loony left. In those days they were the loony right, the National Front and their kin. That is the reason why I went in to local government. I went in there because I was brought up in a Christian background and I felt that these people were repugnant to all the things I stood for. I said that on numerous occasions to various groups and was challenged that if I thought in that way I should put my preaching into practice and allow my name to go forward. So I allowed my name to be put forward in the party and was proud to represent it in the contest at which I was fortunate enough to be elected.
When I took my seat on the council I found there a very mixed bag of people. At that time I was very grateful for the aldermanic bench and people who were able to say to me, when I brought forth some of my young man's dreams, "Just sit back and listen for a while. Take it easy and watch what goes on. You will then realise that what you are advocating probably will not happen in your time. You cannot do everything at once. Things will come in due time". I learned a great deal from those people.
I also learned that local government presented an opportunity to serve. Let me make quite clear that it was voluntary service in those days. There was no attendance allowance, no travelling allowance, no telephone or secretarial allowances. We went into local government because we felt that we could give something to the people whom we represented, with whom we worked, with whom we played and in many cases with whom we went to school and grew up. We felt that we were part of that community. That was the prevailing spirit in local government.
I was also taught that local government implied a partnership between the local authority, industry and commerce. There was also a complete partnership as regards education. Although some of your Lordships may find it a little astounding, I became a member of the education committee and shortly thereafter was elected chairman. In my day one could attend a meeting of the education committee as a member of the public and not know which members were Socialist, Tory or Independent. That was the prevailing spirit. Ours was a good and progressive education authority. We took the public with us in our reorganisation plans. We constantly addressed public meetings and listened to what people had to say, subsequently amending plans because of ideas that
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had come forward. That was part of the partnership—a partnership such as the noble and learned Lord, Lord Scarman, was speaking about last Monday, and one to which we want to return.
I was brought up to believe in such a partnership. I was proud to be a member of a local authority that believed in such a partnership. We were representing a town once dedicated to producing industrial textiles, but where the textile industry had died; yet because of that partnership we managed to keep unemployment down to about 3 per cent. If the aldermen of those days knew to what pass we have come today they would be absolutely shocked. We were able to encourage new industry to take the place of the old textile mills because the industrialists had confidence in us and we had confidence in them. We were able to lease land to them at a very nominal rent and so encourage the labour force to remain. That is how the town grew.
There were also regional organisations. There was regional planning and we worked closely together in the region. I had the privilege of serving under the noble Lord, Lord Sefton, when he was Chairman of the North-West Planning Council. Planning and making policy is the function of local government. Once that policy has been determined then the officers of the council should be allowed to carry it out. It must not be done for them. That is the trouble with many of the London boroughs today. I do not wish to enter into those arguments because that is not my forte, but I must make it quite clear that I deplore absolutely some of the things that are happening in the London boroughs; indeed I cringe at them. I am sure that the party of which I am a member in this House would certainly not lend itself to what is going on in some of the London boroughs. We do not wish to be associated in any way at all with their actions. If we are quite honest, we should be very worried about many of the things that are said and done in the name of the Labour Party. We do not want to be members of a party that acts in that way.
Putting the matter in proportion, I am glad that such people are in the minority. There are many people in local government who have views and concepts similar to those I have expressed. Let us give them credit and not keep on knocking them. I am afraid that from time to time debates of this nature in this House do seem to knock local government. But there are many good people in local government who are working under great stress because central government—which should be a strong and influential part of the partnership—seems to be knocking them more than ever. The speech of the Minister at the beginning of the debate criticised local government in this way. I hope that some of his Conservative friends in local government will read his speech. I am sure that they will be shocked at some of his remarks. They worry me a great deal.
Let me turn to some of the measures that we as the legislature are imposing on local government. The 1986 Education Act gave me great pleasure. I was proud in that much of that legislation derived from a report of a committee that I had the honour to chair. I was proud of the new partnership and pleased with the new government in schools. But there were financial implications for local government. When the cost is reckoned in about three years' time it will work

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out at about £10 million a year, but legislation compels local authorities to act. We make very little allowance for that in the rate support grant. In fact there is nothing about it in this year's rate support grant; I am sure that when he comes to reply the Minister will confirm, that. We impose such legislation on local government and then say "You cannot do that sort of thing. You must keep your rates down." I agree that we all want to keep down the rates. It is a very popular measure. At least I thought it was popular.
Let me tell your Lordships a story. Some time ago when I was chairman of a certain finance committee we had to increase the rates by sixpence in the pound, which in those days was a lot of money. My friends on the Conservative Bench—and I can say that because outside the Chamber we were great friends—proposed a decrease of threepence and produced an alternative budget showing how that could be done. What happened! Six weeks later at the elections they lost nine seats and we gained nine seats. We were increasing the rates; they were bringing them down. That is how the public think. There has been much criticism this afternoon about certain Left wing councillors, but after all they have been elected. They have been elected following the Representation of the People Act. That is how they have won their seats.
However, let us not talk further of the past or the present but of the future, because that after all is of most importance. If local government in this country is to move forward, we must encourage the right sort of persons to stand at the elections. We must have the right kind of policies to allow those people to stand for election. What is more, if we find them taking steps that should not be taken, we should be strong enough to tell them that they are pursuing the wrong course, no matter how unpopular we may be.
So first comes the person—or one can reverse the order and get the policy right first. When this has been done, I think that the right sort of councillors will get elected—this is important—people who will devote themselves to looking after the interests of those whom they represent and not get too much involved with international policy that they cannot control. I should love to declare my little patch in my garden a nuclear free zone and put a little ticket outside saying, "If anyone bombs, please don't drop anything on me", and so would my neighbours, but we know that that sort of thing is useless. We need to be sensible, we want to stick to the things that we are good at and we want to do the things that we are good at.
It was a sad day for the country when county boroughs went out of existence. In my opinion county boroughs were the cream of local government. They were able to do a great deal. They knew the feelings of the man in the street because they were close to him. They were able to interpret the wishes of the man in the street and to put those wishes into practice. It was sad when reorganisation came and they no longer had the functions that they had hitherto had when the district councils came in. We cannot go back, but we can look to the future and try to get the right people to serve.
6.1 p.m.
Lord Elton: My Lords, the noble Earl, Lord Halsbury, has spent the whole of his life outside
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politics looking in. I do not have that advantage. I became a committed Conservative at the age of 15, and I have been inside politics ever since 15 years after that. I am therefore aware of what must seem my prejudices. I have started off this afternoon's exercise by trying as best I can to set them aside; and I believe that I have succeeded. But I still find that there is a coincidence between the end of the political spectrum of some of these authorities and the level of extravagance and waste. I do not doubt that my noble friends at least will concur in that.
However, I ask them to set that aside for a moment for two reasons. The first is simply that the audit report has shown that it is possible to have relatively sensible policies and a relatively efficient management in a relatively Left-wing authority. That is clear to me; and I do not doubt that noble Lords on the Opposition Benches would find it equally clear that it is possible to have relatively unacceptable policies and relatively inefficient management in an authority that claims to be Conservative. Therefore it is clearly neither the first nor the only reason for the phenomenon at which we are looking.
The second reason for which I think we should set aside this impression is a philosophical and constitutional one, which I think is rather more important. It is this. What we are looking at, whether we like it or not, is supposed to be a piece of democratic machinery. The principal strength of this country is that it is a democracy. We believe that the expressed will of the people shown in the ballot is the only acceptable authority for the Government of this country, whether it is national or local. The majority of electors, acting as individuals, have an absolute right to choose who shall manage their public affairs. The choice of who governs is in the hands of those who are governed. They are the electorate and at intervals they have a chance to reverse their choice, not only in the long run but in the medium term.
A local electorate therefore gets the policies that it is prepared to vote for. If it has voted for them and if they are not contrary to law, as some decisions appear to be; or morality, as some decisions appear to be; or the essential interests of the nation, as some decisions appear to be; it is not for us to say them nay. The electorate must be presumed to vote for what they see as their interest. If they do not, democracy is nothing; and, since you cannot fool all of the people all of the time, they must be presumed to return by and large authorities who do represent those interests.
The political battle consists only in persuading them what those interests are, and they will eventually see through any sham. In spite of this, those elected representatives in many places seem to be pursuing policies that are not only contrary to what we think of as good sense and the public principles of good administration, but what everybody must see is against common sense and the eventual good interests of the electors themselves.
Lord Mayhew: My Lords, the noble Lord is arguing that the majority of electors get the people and the policies that they vote for: but he must surely know that the majority of electors get the people and the policies that they have not voted for.
Lord Elton: I can best save your Lordships' time by asking the noble Lord to read in Hansard tomorrow the speech of my noble friend Lord Boyd-Carpenter.
My Lords, it results in what anyone can see is a gross extravagance as well, and it is the extravagance—double extravagance—of pursuing too many objectives of little worth compounded with the extravagance of pursuing all objectives by means of huge and unnecessary expense. It is this extravagance that offends the observer because he feels that the elector ought not to commit it. But the elector is not an auditor. That is the job of the Audit Commission, and very well the commission does it. The electorate does not vote for balanced books for their own sake. The elector does not vote for value for money for its own sake—nor does the principle of democracy say that he ought to. The principle of democracy says—and it is this principle that we are here to advance—that the elector must vote for what he sees as his interest. That is exactly what he does, with the results that we have heard exposed and which we will I am sure hear further exposed this afternoon.
The interest of the voter is starkly simple and depressingly selfish, I fear, there may be twinges of conscience, there may be gestures towards the less fortunate; but, by and large, what the voter wants is to get as much as he can and to give as little as possible. The light of altruism is the merest flicker in the polling booth. If one has a system where the majority of those who vote contribute very little or nothing at all to the cost of local services, that majority is going to vote to spend, spend, spend; it is not going to grudge extravagance, and it is not going to grudge spending to please a silly few because it is not their money that is being spent.
We are, as I said, looking at a piece of democratic machinery. It was designed to ascertain with all its imperfections—I forgive the noble Lord, Lord Mayhew, for not repeating them on his second intervention—what the electorate sees as its interests and to implement them by means of good government. But the machine has broken down.
My Lords, whatever you think of the elected authority in, for instance—and it is only "for instance"—Liverpool, it cannot be said to be either good government or as serving its electorate, even if they were communist to a man, when it has destroyed for a decade any prospect of inward investment, which alone can rescue it from unemployment, squalor and decay. Yet in such places votes are repeatedly cast in favour of decay.
The reason for this is quite simple. The majority of those who are entitled to vote for that sort of authority pay nothing for what it does, but they do get something from what it spends. The jobs have gone; directly or indirectly, the municipal handout remains. It makes no sense to vote for employment if you do not believe that it will come—at least until it is too late. It does make sense to vote for any benefit, facility or predilection of your own regardless of the cost of providing it because you do not contribute to that cost. When the majority of the electorate has neither a financial interest nor any children at school, disaster stares the school-child in the face. Nor does it seem to be wrong to spend other people's money in a political campaign
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to keep in office the golden goose that is laying the eggs; hence the abuses which the noble Lord, Lord Harris, so admirably listed.
What has gone wrong with the linkage between the casting of the vote and the cost of the result? When my noble friend Lord Skelmersdale, echoed by the noble Baroness, Lady David, says to the electors "Use your vote" that is what they are using it for, so something else must be wrong. If that discontinuity between cause and effect had a constructive purpose; if it were designed or even had the accidental effect of transferring wealth from the rich to the poor, it would be defensible. There would be those who would argue hotly against it, but they could argue a reasonable case. It was not designed for that purpose, and it often has the opposite effect. An elderly widow pays exactly the same when she is living on her own as does her neighbour with a working family of 10 living in a similar house. That can be neither moral, economic, nor political justice.
The value of those houses is fixed by procedures that are, to many, arcane and baffling and have usually been applied a long time ago. Of those who vote for local councils, 57 per cent. pay no rates. Everything for which they vote comes to them free. Others have their rates rebated, and as a result for every 100 people entitled to vote in local authority elections 34 pay the full rate—340 people in every 1,000 foot the bill with a little help from a further 90 for the whole of the domestic rate expenditure of our local authorities. But not all the people who provide the money have a vote. It is true that 430 people provide a great deal of money but that is only 36 per cent. of rate income; 38 per cent. is paid by the owners of commercial and industry property, and the remaining 26 per cent. by public facilities and local government. There are no votes there. Those individuals who pay have little control over the vote and contribute less than a controlling proportion of the rates.
That is the first distortion. The second distortion is economic. Not only do business premises carry different values—I do not wish to tempt the noble Lord, Lord Graham, to his feet again; I think that I can rest on the arguments put forward by my noble friend on the Privy Counsellors' Bench—in different parts of the country, but local authorities levy different rates upon those businesses. The businesses have no say in electing those who tax them. They have no say in policy. Here we have that well-known enemy of democracy, taxation without representation.
Nor does it stop there. Because the whole of local authority rates income amounts to only about 50 per cent., on average, of what those local authorities spend, the remainder comes from the taxpayer via central government. The method of distribution is hideously complex; very few people understand it altogether and not many understand it in part. It is the inevitable cause of an annual political row of growing and horrific proportions.
It is agreed, I think, that control of the whole of public expenditure is an essential part of the function of central government. It is also agreed that to preserve local democracy, central government should not control, further than they have to, the distribution between different services by local authorities of the money they hand out.

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The result of all that is the farcical situation which we now have: those who pay the domestic rate are heavily outvoted by those who do not; those who pay the business rate have no vote, and central government provide half the money and have no say in the distribution of the spend between one service and another. There is a discontinuity of responsibility which extremist politicians can and do exploit. My noble friend Lady Cox pointed out, in a speech not only of clarity and brilliance but of great historical and constitutional importance, that they use it to subvert democracy.
It is not just that there is no democratic control of expenditure; it is that in most of the ways in which we look at it there is no control at all, except by means such as rate capping which merely inflame the disaster this arrangement makes inevitable anyway.
The urgent matter for your Lordships' consideration is not the fascinating and horrifying catalogue of injustice and mismanagement revealed in the Audit Commission report; it is how to restore democratic accountability to the town and city hall. The recipe for that is spelt out in the Green Paper Paying for Local Government. I shall not repeat the arguments for it; they are on the record of debate on the day of publication, Tuesday, 20th January last year, both in your Lordships' House and in another place, and also on the record of an interesting debate on a Motion by my noble friend Lord Marshall of Leeds on 26th March last year. I shall say only, because I want to spare your Lordships a little time, that it provides for an equitable and predictable business rate; for a central government contribution distributed to restore the imbalance about which we heard so much on Monday, between North and South; and for every elector to have a direct and simple financial interest in the efficient management of sensible local authority programmes, no matter what their political party.
I have set aside my prejudices. I believe that we must find such a solution. It is a consultation paper. There has been thought. There will be refinement. As the noble Baroness said (I try to agree with her when I can), complexity is the enemy of justice and understanding. Let the new system be simple; let it be fair; and above all let it enable the voter see what are the consequences for him of his vote, and let those consequences measure up to the performance of the people whom he elects.
I believe that that is of critical and urgent importance. I should like to urge Her Majesty's Government to pursue that policy with vigour and speed, no matter what their electoral difficulty. There is little time for further reflection. It is becoming very late.
6.17 p.m.
Lord Morton of Shuna: My Lords, I hope that your Lordships will forgive the temerity of a Scot coming into this debate, but the terms of the Motion appear to allow it. I am encouraged by the fact that the noble Lady, Lady Saltoun, is also coming in as a Scot. I am also encouraged because the Audit Commission report refers to the near-term steps and suggests what they should be. What it boils down to is: follow Glasgow. That is said in paragraph 39 over and over again. It is clear, as any of your Lordships who have been in
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Glasgow will see, that the rehabilitation of the east side of Glasgow has been tremendous. Over the past few years Glasgow has revitalised an area of considerable dereliction.
It is interesting to see how it was done and how the Audit Commission recommends that it should be done in London. It was done by pouring in central government money through the Scottish Development Agency. The Audit Commission suggests:
"There need to be powerful local organisations to organise the effort—not least within the public sector—and to drive it forward. In Glasgow, this role was played by the Scottish Development Agency".
That was an agency which this side of the House understood that in 1979 and 1980 the Government wanted to get rid of. The then Secretary of State fought very hard, fortunately successfully, to retain it. But it is by co-operation, not the fighting that seems to go on now between central government and local government, that the way forward exists.
Apart from that, my purpose in speaking is to draw attention to the financial mismanagement which occurs not only on the Left of the political spectrum. In Lothian region, which of course includes Edinburgh, until 8th May last year there was a Conservative minority administration which managed to rule with the assistance of three Alliance councillors. In March 1986, with the assistance of their Alliance allies, they put through a budget, as they had to do, and fixed a rate which was marginally lower by one-fifth of a penny than the rate they had fixed for the previous year. This they did no doubt in order to be able to accuse the Labour opposition of being profligate in its policies for the election which was to happen in May. But they also did it in the knowledge that their budget for the previous year was so far ahead of government requirements that a £25 million clawback was already required.
It is interesting to see how this budget was achieved by the Tory administration. First of all, they brought in all the available balances—£14 million—spending, in the words of the noble Baroness, Lady Cox, all the money they could lay their hands on. It is not perhaps quite the same as selling the family silver, but it is the same sort of approach and it is a practice which it is interesting to see the Audit Commission deplores. It certainly does not make it easy for the following administration.
The second method of holding the rate down was to make a wholly unrealistic budget for wage increases already allowed or to be expected. By this means the Tory administration saved, or at least said they saved, £4 million compared with what any realistic accountant would have told them was a reasonable estimate.
The third method was perhaps an even more surprising example of creative accountancy. Each year the transport undertaking had run into deficit and the council had of course budgeted for the deficit. But not this year. The administration gently omitted to budget for the deficit. Is this an outrageous policy, in the words of the noble Lord, Lord Skelmersdale? It seems at least financially irresponsible.
It was therefore fairly obvious in March 1986 when the budget was announced that the Tory administration did not expect to be the administration after May and have to pick up the bits. That could

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have been told them by the opinion polls. It is even more interesting to see what they did in March and April. Your Lordships may recall the debate over the western relief road for Edinburgh. It was a road vehemently opposed by almost all the conservation societies in Edinburgh. It was opposed by Edinburgh District Council. It was strongly supported by the Tory administration and by the Alliance. Cynics in Edinburgh referred to it not as the western relief road but the "Councillor Gorrie relief road".
Apart from Councillor Gorrie's Liberal interests, West Edinburgh happens to be a Conservative seat in Parliament with a majority which could be described as miniscule, being under 500. So when the Lothian Region (Edinburgh Western Relief Road) Order Confirmation Bill was discussed by this House on 8th and 15th April last year, from this side of the House various of my noble friends spoke in favour of Motions by the noble Earl, Lord Perth, and the noble Lord, Lord Ferrier, neither of whom would perhaps be well-known as Socialists, to put the approval of the Bill back until after the election, because the Labour Party was fighting as the opposition party on a commitment to cancel the western relief road.
That was strongly opposed by the Government. It is interesting to note that the noble Lord, Lord Ferrier, was arguing strongly that it was just a waste of money to approve this road if in three weeks' time it was going to be cancelled. It is interesting also to see that the noble Baroness, Lady Cox, the noble Lord, Lord Skelmersdale, and the noble Lord, Lord Boyd-Carpenter, all voted against the delay of three weeks.
The Bill having been approved, the administration went ahead and signed contracts. On 30th April and 6th May 1986, two days before the election, they signed contracts. There could not have been any financial disadvantage in delaying signing the contracts until 9th May. It would not have made the slightest difference to building a road. The price would not change but if the Tories lost the election there would be compensation to be paid for breach of contract. So it was.
The election resulted in a much worse disaster for the Conservatives in Lothian than even we on this side of the House dared hope for. The contract was then cancelled as soon as possible, but the cost to the ratepayers of the Tory administration signing these contracts was surprising: £3.3 million. On any view that is an outrageous piece of behaviour. When a minority council is within weeks of an election, when it was warned by various noble Lords in Parliament, when it was warned by the opposition in the council, for it to sign these contracts in the knowledge that that must put costs onto the ratepayer if it should lose strikes me, in the words of the noble Lord, Lord Skelmersdale, as an outrageous financial policy. That is exactly what it was.
There were certain cynics who suggested that the reason for this might be that the companies or those who owned the companies were well known for their contributions to the Conservative Party's funds, but perhaps that is going too far. It is surprising that no challenge was made by any auditor to this form of behaviour or to this waste of £3.3 million, especially when the auditor challenged expenditure of £ 113,000
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by Edinburgh District Council in publicising its reasons for its dispute with the Secretary of State on money levied.
It is even more surprising, I suggest, that the Secretary of State should take the leader of that Conservative administration and appoint him to a paid post in Lothian New Town. So if there are to be complaints about jobs for the boys, they do not all sit on the one side of the House.
Lord Orr-Ewing: Has he found one example?
Lord Morton of Shuna: It was a fairly big one. The result of all this, my Lords, was that the new Labour administration had to dig the ratepayers out of the hole. If it did not increase its expenditure over the previous levels of expenditure of the Tory administration, the rates in Lothian would rise by 30 per cent. That is the result of poor administration. Perhaps it is not fair wholly to blame the previous administration for this. Some of it rests with the Secretary of State. He has this year approved an increase in guideline expenditure for the Lothian region of over 11 per cent. As noble Lords will recollect, Lothian region may not have the highest levels of unemployment. However, having lost British Leyland at Bathgate, Golden Wonder Crisps at Broxburn, and various coal mines, it is certainly not well off.
One would expect on an increase in guideline expenditure that the grant level would increase at the same rate. Not a bit of it, my Lords! The Secretary of State increases the grant payable to Lothian region by 1.5 per cent. and somehow the ratepayer has to meet the difference, which I estimate to be 9.5 per cent.
It is very interesting to see the increases in allocation of grant per head of population. Perhaps Lothian is being penalised for having voted Labour. In 1984 Fife had a level of grant per head of £223; now it is £259. Dumfries and Galloway had £228; it is now to be £295. Tayside had £231; now it is to be £261. Lothian had £226 in 1984–85. There has been slight inflation since. It is now to be £227—an increase that is so minuscule that it is hardly noticeable.
The way that central Government claw-back provisions work is even more remarkable. If a local authority in Scotland spends £1,000 more than the guideline it has to pay more than £1,000 back to the Government. Therefore if the Lothian local authority budget this year to bring the police up to establishment, as the Labour administration would like to do, they will have to pay not only the police but also the Government the additional cost of so doing. Again, if they run a programme to assist on the AIDS problem—and your Lordships will recollect that Edinburgh has a very severe AIDS problem—for every £1,000 that they spend on AIDS at the Government's encouragement, they have to pay an extra £1,000-plus to the Government. The same applies to meeting the share of the financial losses on the Commonwealth Games. Nobody could accuse either Lothian Regional Council or Edinburgh District Council of causing the sanctions-related boycott of the games which caused the financial loss.
These are the kinds of activities which have led to Lothian being attacked by the Government for being spendthrift. It plans to spend precisely 2 per cent. More

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than the Tory administration spent last year. Is that spendthrift? It is lower than the rate of inflation. The noble Lord, Lord Elton, suggested—if I followed him correctly—that the difficulties about finance were caused partly by taxation without representation and that they might be improved by community grant. I did not quite follow all his argument. Was the noble Lord suggesting that one should vote in proportion to the contribution one made either to local or central government funds? If so, it would give a surprising result.
Lord Elton: My Lords, indeed it would. It was not what I was proposing. What I was proposing was set out clearly in the Green Paper Paying for Local Government. I have a summary which I shall hand to the noble Lord when I leave the Chamber. However, the principle is that whatever arrangement one has, the marginal cost must be contributed to by the person who votes for the service. The effect of your vote must affect your pocket. If it is necessary to give some people money, which they can keep if it is not spent and contribute if it is, that is another question. But the principle is that your vote must be felt in your pocket.
Lord Morton of Shuna: My Lords, I am very much obliged to the noble Lord. I thought perhaps he was going to argue that a company like Guinness, having now absorbed Distillers, should have a vote in proportion to its contribution to the central Exchequer, which would be surprising. However, the community charge proposals—which have reached a stage further in Scotland than in England—would not be the answer to the ratepayer. In Lothian 60 per cent. of the rates come from commercial and industrial properties—a figure fairly similar to those quoted by the noble Lord, Lord Elton. Under the principle of the Bill being discussed in another place, increases in the rate which is to be set for commercial and industrial properties nationally is to be linked with inflation. That means that 40 per cent. of the rates has to meet all the other variants. If one had a situation where the community charge was in operation, it would mean that the ordinary ratepayer or voter in Edinburgh, far from paying the £230 which the Government say would be the average community charge for Scotland, would have to pay something like double that amount. Do the Government suggest that that method would be appropriate?
Lord Elton: My Lords, I have not fully understood the noble Lord. However, he interrupted his speech in order for me to give an explanation. I am not sure that the noble Lord is looking at the same system as I am which is the one which applies in England. If he is, there are three elements: the central block grant (which will get a new name), and both the business and private contribution. It is not simply a net difference between the two figures.
Lord Morton of Shuna: My Lords, I am dealing with the part covered by rates, not by the central grant. The real difficulty in local authority finance has been caused by the decrease in the proportion of local authority finance which has been coming from central government. In Edinburgh and the Lothians it has decreased from just under 60 per cent. to just over 40
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per cent. That is the reason for the increased costs on the ratepayers. That is the cause of the difficulty.
As I said at the beginning of my speech, it seems to me quite clear—as the Audit Commission has recommended—that the way forward is that which applies in Glasgow. That is a city which has had the good sense to elect no Conservative Member of Parliament. Perhaps this course may be followed later this year or next. The way forward is by following the example given by the Scottish Development Agency.
6.38 p.m.
Lord Chalfont: My Lords, I must begin by offering an apology to the House, which I have already offered to both Front Benches and to the noble Baroness. I shall not be able to stay for the end of the debate. I know that this is not a popular activity in your Lordships' House but on this occasion I was anxious to take part in this important debate. I hope that the House will forgive me, therefore.
I am grateful to the noble Baroness for providing the opportunity for this short debate. In the few minutes at my disposal I wish to take up one of the categories which was of concern to the noble Baroness in her speech. It is a phenomenon which is beginning to poison and corrupt the political life of this country. It is the problem of a violent, undemocratic and racially intolerant minority which is using the power base of local government to dismantle the very foundations of the parliamentary democracy for which we stand in this House and in the other place and which is the precious inheritance of most of our fellow citizens. The noble Baroness said that she feared she might be becoming paranoid. I fear that she is not. Even if she were, the noble Baroness may wish to recall Henry Kissinger's famous remark that even paranoids have real enemies.
I wish to make it clear that I do not intend to try to turn this debate into a party issue of any kind. The people about whom I am talking are as much the enemies of the Labour Party as they are of the rest of us although they tend to use the word "Labour" a very great deal in the furtherance of their political aims. However, in the literature and rhetoric of these same people names such as Kinnock and Hattersley feature very large in the litany of hatred and contempt. Indeed, one of the principal targets of the people about whom I am talking is Dr. John Cunningham, the very man who was heard on the radio this morning explaining in reasonable terms the Labour Party's plans for the reorganisation of local government. He is one who comes in for most of their abuse. I believe that it is important for anyone who cares for the political institutions of this country, as I believe that everyone present in your Lordships' House tonight cares, that we should know exactly who these people are and what they stand for.
The focus of their activity—I might almost call it conspiracy—is an organisation known, from its main policy publication, as Labour Briefing. It is a group which has the support of about one in 10 of the people who were elected as Labour councillors in last year's local government elections. One in 10 is a fairly substantial minority. Its own conception of its power-base is very clear. From the manifesto which was

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contained in the editorial of the pilot issue of Labour Briefing for July and August, 1986, I quote:
"Briefing's base, traditionally, has been in Local Government, and this will remain an absolutely central priority for us. Where we have control or influence over Local Authorities, we will continue as before to use this to defend our local communities, refusing to bow to pressure or threats to make cuts".
There is nothing very sinister in that so far, some people might say, just radical bloody-mindedness.
This group claims to number several Labour Members of Parliament among its supporters. However, its opinion of the labour Party as a whole is summed up in another quotation from the publication to which I have just referred. In that manifesto the following words appear:
"for black people, women, youth, lesbians and gay men up against a Labour movement under the thumb of a right-wing bureaucracy there is an obvious need for a focus … to mobilise the Trade Unions and the Labour Party",
etc. These are the people to whom I want to draw attention in this debate: a small group of people—admittedly small—exploiting local government as their political base, openly contemptuous of those elected to Parliament, even those elected under the banner of the Labour Party.
What are their aims? Immediately following the local government elections last year, Labour Briefing held a closed conference at the Polytechnic of Central London. It is very instructive to study the briefing paper which was prepared for that occasion. If one wants to know or form a view of the aims of any organisation it is a good thing to read their own literature—to read what they say and what they say they want to do. Perhaps the key passage, and the one which encapsulates their aims best, is contained in paragraph 7 of the document. Incidentally, this document is supposed to be secret but it is nice to know that the leaking of secrets does not go all one way! As I say, paragraph 7 of the document contains a key statement already referred to by the noble Baroness. It states:
"Our commitment … is to challenge, combat and break the repression and violence of the capitalist state machine".
Stripped of this turgid jargon, what that means is revolution. Those of us who have studied revolutionary philosophy and tactics over the years will not be surprised when we find a little further down the list another passage also quoted by the noble Baroness, but I think that it is worth quoting again to get its full flavour:
"against the racist and anti-union violence of the police, and the threat posed by the armed forces, workers must counterpose demands for the disbanding of these armed bodies of capitalist repression and their replacement by workers' militias and community self-policing".
There is nothing mealy-mouthed or equivocal about that: get rid of the armed forces, get rid of the police. Where have we heard the phrase "workers' militias" before? To me it has a familiar totalitarian ring about it.
Having got rid of the police and the army, what you may ask, is left to protect the fabric of a stable and civilised society? Well, of course, the judges and the courts of law; but Labour Briefing is going to take care of that too. It says that similar demands must be made for the replacement of the bosses' courts, the judiciary
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and the Civil Service hierarchy with elected accountable figures.
Of course, it is not enough simply to dismantle the apparatus of the state to achieve a successful revolution. That we all know. From any study of Marxist-Leninist tactical doctrine we must first create a "revolutionary situation". How do we do that? The existing values, traditions and loyalties of society must be undermined and transformed. In that context we have another quotation from the manifesto for the Labour Briefing publication:
"the new paper will take up and develop debate on sexual politics and the politics of the family, challenging the tenets of bourgeois morality and working towards coherent and liberating alternatives".
Once again stripping away the turgid jargon, that simply means undermining the values of the family and overturning traditional standards of decency and sexual morality.
The whole process to which these people are committed is summed up in the final paragraph of the manifesto. I think that it is worth quoting in full and that it ought to be engraved not only on the walls of the Conservative Central Office but also on those of Transport House. It says:
"the goal must be to break the Labour Government and the Labour Movement from any alliance with the bankers and the institutions of British capitalism and to create the kind of mass working class organisations and mass action that can smash the system itself and its repressive machinery and replace it with a workers' government committed to a socialist programme".
Your Lordships will have noticed one theme running through this programme so far. It is the theme of class hatred, the familiar tool of Left-wing totalitarian revolution everywhere in the world. However, the aim of this classic blueprint is not simply to pit class against class, but if one reads their literature and listens to their speeches, one finds that they also want to create enmity and hatred among and between as many sections of the community as possible—men against women, homosexuals against heterosexuals, the young against the old—and of course they want to fashion and sharpen the most potent and sinister weapon of all, racial hatred.
One of the commonest words in the lexicon of revolutionaries in this country at the moment is "racist". Like the word "peace" in another context, it has been hijacked by extremists to mean precisely what they want it to mean, no more and no less. Almost everybody of whom they wish to disapprove or destroy—the police, the army, the Government—are racist. Yet I wonder who are the real racists.
The noble Baroness, Lady Cox, briefly introduced to your Lordships' House Professor Chris Mullard, a prominent figure in the anti-racist movement. Profesor Mullard runs a unit which is collaborating in a publicly-funded research project with local authorities in a number of towns across the country. For reasons of time I shall not detail them all. The aim of the project is to transform the whole curriculum of schools in these areas. Should anybody wish to speculate on what form that change will take, let me repeat the passage quoted by the noble Baroness from Professor Mullard. He said:
"The only argument which white society understands if force, violence and power.".

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I hope that your Lordships get the full flavour of that: it is not society as a whole, not capitalist society, but white society. I think that we do not need to look very much further for the roots of racial hatred. But there is a further significance in the activities of people like Professor Mullard. Whenever anyone attempts to sound the alarm bells about the activities of these revolutionaries and subversives who have made their base in local government in this country, the reply of a great number of people, many of them sincere and well meaning, is: "Ah yes, but you are only dealing with a tiny minority, and you are grossly exaggerating their importance and their influence". I heard that remark in one form or another several times in your Lordships' House, even in this debate.
Let us remember one thing of crucial importance. It is principally in the hands of local government, as things stand at the moment, that the quality of our state education system rests. These are the people who are responsible for the education of thousands of our young children, many of whom are from ethnic minorities. This is the intellectual diet upon which they are being raised: a diet of hatred, contempt, envy and racial intolerance. That is the significance and the importance of these people and a measure of the danger which they represent.
In closing, I should like to say this to those who claim that this is just a tiny, unimportant minority, a kind of archipelago of totalitarianism in a great sea of tolerance, decency and respect for the law, I say just one thing to those who advance that view—I mean it in no apocalyptic or daunting sense, but merely to place matters in some kind of context—in 1910 there were fewer than 10,000 politically active Bolsheviks in Russia. A tiny fraction of 1 per cent. of the population. Ten years later that country was in the grip of a totalitarian dictatorship from which it has never emerged and shows no sign of doing so. In my view we should never underestimate the power of ruthless and dedicated minorities.
Lord Elton: My Lords, before the noble Lord sits down, perhaps he can add to the service he has done to the House. He has quoted extensively from a manifesto. I understand from my noble friend Lady Cox, that it is subscribed to at least by Mr. Wedgwood Benn. Is there any means by which we can discover who else subscribes to it? I think we ought to know.
Lord Chalfont: My Lords, with the indulgence of the House, perhaps I can say that there is published in the document a full list of people whom these people claim as their supporters. The noble Baroness quoted some of them this evening. The list is very much longer, and I think the noble Lord would find it extremely interesting.
6.54 p.m.
Lord Campbell of Alloway: My Lords, it is always a privilege to follow the noble Lord, Lord Chalfont, and on this occasion in particular to be able to listen to his prophetic and profound warnings. My noble friend Lady Cox (with that sensitive touch which we all so greatly admire) used a broad brush on a very wide canvas. But the bold deft strokes leave a vivid
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impression of the measure of her own misgivings and her own concern. Having listened to this debate, it is apparent that her misgivings and her concern are the concern of all noble Lords because even certain speeches from the Benches opposite did not challenge the basis of those misgivings of the basis of that concern—as I understand it.
My noble friend Lady Cox has asked me to deal with just one matter of this concern. It is perhaps a dull subject and I hope I shall not make it even duller, but it lies at the very heart of the matter of our debate. The point was touched upon by the noble Lord, Lord Harris of Greenwich, when he said, as I took down his speech, "action to prevent extremist minorities to enforce their will upon local government". I agree with every word that was said by the noble Lord. Perhaps we may pause for a moment because this matter lies at the heart of this debate if one is not going down the road to appoint commissioners which one hopes would be the action of last resort. It may be inevitable but it is an action of last resort. Perhaps for a moment we may consider together the existing regime of enforcement and any remedial measures at present proposed in terms of means of effective enforcement. As pointed out by other noble Lords in terms of practical realities, and before one starts to consider means of enforcement, one has to get down to the guts of the problem; namely, the practical realities. In terms of practical realities, we have, in constitutional terms as pointed out by my noble friend Lord Elton, a revolution. The noble Lord, Lord Chalfont, pointed out that it was a revolutionary situation in which certain local authorities are in a situation where the tentacles of subversion (and it is nothing more nor less than that) have reached out to destabilise not only the classroom but the schoolroom and the council chamber, and also family life. This fact was acknowledged in the most remarkable and moving speech of the noble Earl, Lord Longford, on the Second Reading of Lord Halsbury's Bill. Indeed, on that occasion this point was also acknowledged by other noble Lords.
The reality is also that the pursuit of these policies not only exposes the ratepayers to indignities, to abuse, to violence, and to financial exploitation, but it also erodes parental control and puts the moral welfare of our children to hazards, as was explained in some detail by my noble friend Lady Cox.
In all this the national press is very much to be congratulated on bringing the fears, fury and frustration of ratepayers who have been subjected to massive abuse of rates, to the attention of the public. It is all too apparent—is it not?—that reserve powers vested in central government are wholly unable to cope with this situation? It is all too apparent—is it not?—that there is no effective individual enforcement machinery available at this time as we debate this Motion? The question is: what is to be done about it? How do we deal with these extremist, recalcitrant minorities?
With respect to my noble friend the Minister—and I am sorry that he is not in his place—it is absolutely no use him saying "Use your vote" in a circumstance such as this. It is a total irrelevance, as was pointed out by my noble friend Lord Elton. The reasons given by my noble friend Lord Elton require no repetition. I

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hope that when my noble friend the Minister replies he will dissociate himself from the attitude that this in any way can be cured by voting under the existing system. It is an irrelevance, and a serious irrelevance.
The fact that it was mentioned by the noble Baroness, Lady David, is neither here nor there, because, with the greatest respect to her, I am not so concerned with what she says, I am concerned with what is said from my own Front Bench. I stress the matter that a totally different point of view ought to be taken in this regard.
The proliferation of these pressure groups at local levels has received adverse comment in Widdicombe, Research Papers, volume 4, page 109. It was recommended that adjustments should be made. But what adjustments? How shall they be made? How general? How specific? What measures of enforcement? When? As the noble Lord, Lord Chalfont says, urgently. Of course it is urgent, but when? What? How? Questions such as these demand a quick and satisfactory resolution. I again seek comfort from what was said by my noble friend Lord Elton on the question of urgency. In a specific and limited context, exactly the same questions arose on the Bill of the noble Earl, Lord Halsbury.
We now know—and it is plain for all to see—that the present regime is worse than useless to cope with the situation that we have as we debate today, now. Therefore, where do we go from there? What is on the table? What is proposed? As I understand from the speech of my noble friend Lord Skelmersdale on the Second Reading of Lord Halsbury's Bill, what is proposed is, first, that the Government do not support the measures of enforcement proposed; that is, that an aggrieved ratepayer should have direct access to the civil courts to restrain a breach of a statutory prohibition.
That principle was built into Lord Halsbury's Bill. It was carried by your Lordships' House. It was strongly supported by the noble and learned Lord, Lord Denning, as both apposite and viable. It could afford an effective means of enforcement. Of course you revert to the tradition that this is a non-political situation in which a ratepayer of any political persuasion can take the law into his own hands—albeit with legal aid, which is readily available for such purposes—and enforce the law himself. The Government have set their face against this, as yet. The hope is that at the end of this debate they may reconsider.
However this proposal is of course inconsistent with the two proposals of the Government. It is understood from my noble friend Lord Skelmersdale's speech—and I refer to nothing else; it is in Hansard and available for all your Lordships to see—that there are two proposals, but neither affords any effective means of enforcement whatsoever.
The first is to amend the Act of 1972 to curtail the area of discretion that is available and exercisable by a local authority. This is partly in implementation of Widdicombe. The second proposal is to introduce a code of practice under Section 4(1) of the Act of 1986 to provide a sort of benchmark against which local authority decisions as regards expenditure on publicity, other than political publicity, should be made.
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Why do these afford no effective machinery for enforcement? First, as regards amending the Act of 1972, the facility for a local authority to seek a declaration which arises in that context is tardy, cumbersome, and wholly ineffective. And there really is no effective sanction in seeking to surcharge a councillor or a former councillor who is a man of straw and in some way connected with the type of organisation to which the noble Lord, Lord Chalfont, referred years after the event. The whole thing is a total nonsense. It is wholly unrealistic. It stems from an age when there was another ethos in local government. The whole machinery there requires total reappraisal.
As to the second proposal, the code of practice, thanks to the courtesy of my noble friend the Minister I have been given a copy of it. It is a code of recommended practice for guidance only. I hesitate to say this in front of my noble friend Lord Elton because this is the matter on which I divided the House against him. But it was settled—the reference is at Volume 471, cols. 823–847—when the lack of legal status of the code of practice introduced under Clause 4(1) was established in your Lordships' House on a Division. What is the use of that in terms of legal enforcement? The Government must think again.
How are we going to enforce? What are we going to do? If we are going to resort to a code of practice and have some effective means of enforcement, first of all we have to redraft the code to extend its application beyond mere expenditure on publicity and take in the other abuses. I need not repeat them. Your Lordships have dealt with them, or most of them.
Secondly, we have to introduce primary legislation to do one of two things. There is no other way of dealing with this, and yet no one seems to have suggested it. One either has to afford direct access to the civil courts to the aggrieved ratepayer to restrain breaches—along the lines proposed in Lord Halsburys' Bill and already accepted by your Lordships' House, but rejected by the Government so far—or one has to take a new look at judicial review and enlarge its scope to provide that, where it is apparent to the court that the code of practice has not been taken into account in reaching a decision, the decision of the local authority shall be deemed to have been unreasonable. This is a wholly requisite provision for it is settled law that a local authority shall take into account a mandatory provision in a code of practice. But if it is breached it may not be made the subject matter of appellate proceedings, nor indeed, by the most recent decisions of the Appellate Committee of your Lordships' House, may it be made the subject matter of judicial review.
It is possible that a combination of both these measures could be considered, again using the words of the noble Lord, Lord Harris of Greenwich, as, "action to prevent extremist Ministers enforcing their will on local government". Or, if resort is not had to a code of practice as a means of enforcement (as would appear to be the case with the draft code that has been put before us), then one could amend the Act of 1972 in implementation of Widdicombe. One could curtail the area of discretion exercisable by a local authority so as to enable regulations to be made which can be scheduled to the Act as part of primary legislation or to be introduced as secondary legislation under a statutory instrument.

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This is a simple, straightforward approach by which central government ordains what is and what is not within the province of local government and how such ordinance may be enforced. Such a simple, straightforward approach is surely preferable to achieve the object, on which I think there is common ground in your Lordships' House. It is also preferable to the ultimate sanction of appointing commissioners.
My Lords, too much time has gone: I will conclude.
I was going to say something about parent power that does not exist, but I shall not say it. What it comes to is this, is it not? as a practical reality the concern of my noble friend Lady Cox is that there is no effective enforcement to inhibit the abuse of rates and that none as yet has been proposed. That is the terror. Her concern is entirely well-founded, and if your Lordships' contributions to this debate should lead—and I hope they will—to the establishment of some new regime, some new dimension of legal enforcement, then my noble friend in moving this Motion will have rendered a signal public service.
7.12 p.m.
Lord Orr-Ewing: My Lords, I should like to add my congratulations to the noble Baroness, Lady Cox, for her admirable opening speech. I remember her making a similar and equally impressive opening speech on, I think, the Education Bill. It produced exactly the same reaction from the Front Bench opposite—rather a viperous and personal attack on her, and a plea that she was representative of only a very small section. She is representative of a very large section of the community. She represents an awful lot of sensible mothers, fathers, grandmothers and grandfathers, all of whom have votes. I am glad that she spoke as she did.
I thought it was sad, in view of what the noble Lord, Lord Chalfont, said, that there was no instant sympathy or agreement that these excesses by the hard Left are condemned, I hope, by the Labour Party Front Bench. We have still to wait for that. They nibble at the problem. They sack a councillor in Liverpool and think they have solved the problem. We are waiting for a condemnation of the hard Left, but so far we wait in vain.
I am going to be short in my speech because I had hoped that we might be rather more advanced by this time. I have a commitment, but I shall not forsake the House. I shall come back, as is my duty, for the winding up speeches but I hope that your Lordships will forgive me if I am absent for an hour or so.
In my short speech I should like to cover three main points. I believe that these ideas are mentioned and also supported in Widdicombe, which I have studied again. The first concerns the co-option and voting rights on local government, particularly in the committees where, after all, most of the decisions are made. They may be endorsed by the full council later but it is in the committees that the decisions are made. The second point concerns the rejection of competitive tenders for purely political purposes, even though they are very much cheaper and more effective than the jobs done by local authorities' own direct labour forces.
On co-option, Widdicombe was firm and unbending. He said that legislation should be
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amended, and I think it is appropriate that we should remind ourselves of these things because we are expecting a local government Bill to come before Parliament perhaps towards the end of this month. I have to give notice that if many of us think it is not firm enough or does not deal with these matters, we shall be pressing amendments and I hope that we shall have a great deal of support from the Cross-Benches and the Alliance Benches and from the genuine democrats sitting on the Benches opposite, because they cannot like the things that are going on. It is very bad for their image in the country.
Widdicombe says in Summary 6 of a very large number of recommendations:
"(i) decision taking committees and sub-committees may consist only of councillors; and in particular only councillors may vote on such committees".
Secondly, it says:
"(ii) local authorities may invite advisers to attend meetings of decision taking committees, on such terms as they may determine but without the right to vote".
Thirdly, it says:
"(iii) the names of advisers should be made publicly known, together with the terms of their attendance".
That seems to be eminently sensible and in fact everyone giving evidence to Widdicombe endorsed that, wherever they sit in Parliament. So I hope there will be no objections if that is introduced into the forthcoming Bill. One has to remember at the moment—
Baroness David: My Lords, may I ask the noble Lord what Bill he is referring to?
Lord Orr-Ewing: My Lords, a reference was made to it in the Queen's Speech, which said that a local government Bill was coming forward. Did the noble Baroness not read that?
Baroness David: My Lords, of course I listened to the Queen's Speech but I do not know of any Bill that is coming forward in the very near future to deal with this matter.
Lord Orr-Ewing: My Lords, it said "in this Session". Of course it may not come into this House first. I have made inquiries and I understand that "in this Session" means that it will be coming fairly soon. All major Bills come in during the first few months. I shall be happy to hear that will happen, and perhaps we may hear from the Front Bench in the winding up.
One-third of a committee can be co-opted. It is very surprising, because I know numbers of people, friends and others, who unselfishly serve on local government and they tell me it is really rather shaking, after a local government election, to come to a committee and suddenly find sitting opposite you two or three hard Left characters who have not had the confidence of the electorate—you have defeated them in the votes. There they are sitting, with the right to speak and the right to vote and even the right to form a quorum. So some of their sympathisers absent themselves—no doubt after claiming their expenses—and they sit there and they vote. This is an utter distortion of democracy and I am sure the Government would have great support if that were to be attended to.

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Of course I recognise, as does Widdicombe, that on specialist committees such as education committees it is wise to have teachers and other educationists who can sit in and who can be asked to contribute, but not to vote and not to help form a quorum. The same applies on police committees, where it is often useful to have a magistrate. Of course there are exceptions, but let the rest be dealt with.
I think that is all I want to say on that matter. But one point arises from this. Surely the practice—and again Widdicombe supports some action on this—of an elected councillor being employed or having a sinecure job with a neighbouring council should cease, particularly at the senior staff levels. It is not fair that a highly political character who is chairman of some highly political committee in one council, as an elected councillor, should on a neighbouring council have a full-time job and be highly paid for that job. That is a bad approach, and I hope that matter will be included in the forthcoming Bill.
During the passage of the last local government Bill many of us spoke about these issues and we kept being assured in terms of, "Well, there is not much time to do it in this one; we will have a code of conduct"—as my noble friend has just said, not very effective—"we will try to deal with it when the final Widdicombe report comes forward." I hope that the final Widdicombe report is going to deal with some of these malpractices and some of these dishonesties. I am told that it is not due until the end of February, but we have simply got to tackle it and if members of the Labour Opposition are as genuine as they say they are I am sure we shall have their support.
Secondly, and briefly, I want to draw attention to malpractices with regard to tendering for local authority construction work. This has been going on for some time and I am sorry to say that it is spreading and not decreasing. Most if not all local authority construction work could be carried out by the private sector, yet some councils insist on tying up ratepayers' money in the creation of vast and inefficient direct labour organisations. They then award contracts to these DLOs in the face of lower outside bids in many cases, on the grounds that this is necessary in order to protect the initial investment they have made.
I have two examples. Bristol City recently awarded a £600,000 contract at the Royal Portbury Dock to their DLO, even though private contractors had submitted considerably lower bids. The lowest tenderer was £60,000 under that. The port engineer recommended acceptance of this bid, but he was totally overruled by his political masters. Harlow District Council—and an earlier speaker said that it was his area—awards contracts to its DLO if its tender is within 9.7 per cent. of lower private sector bids. How can you waste ratepayers' money like that? Surely it must be wrong to allow this to continue. They totally disregard the potential saving to ratepayers and taxpayers.
Equally pernicious is the rejection of bids by renowned construction companies often with worldwide export business on purely political grounds, because they have mended a road at a missile site or because they have done a repair or built a mess at
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some other military site. They are ruled out from the tendering and this only occurs in hard Left-dominated councils.
I have drawn attention to the co-option practices. I have drawn attention to the manner in which elected local councillors are given lucrative jobs in neighbouring councils. I have drawn attention to the rigging of tenders, which is just as pernicious as the rigging of ballots, and the Audit Commission's report, which we have been discussing so much, has highlighted innumerable examples of more waste and malpractices. I urge the Government to tackle those matters in the local authority Bill which is shortly to be introduced. They can count, I believe, on the support of genuine democrats wherever they may sit in this House or in another place.
7.22 p.m.
Lord Donoughue: My Lords, I also wish to thank the noble Baroness, Lady Cox, for this debate and to apologise to the House in advance if it happens that I cannot be present at the end. That will depend on the time. I am sorry about that, particularly because it is such an excellent debate and seems so well timed against the background of the Audit Commission's report, so giving us the opportunity to discuss our local government problems in the context of some facts and figures and not simply based on the familiar rhetoric and ideology.
It is, sadly, I must admit, very easy to be negative and critical on the question of local government. I understand the temptation of some noble politicians opposite to exult in the extravagances, failures and occasional lunacies of a small minority of London local authorities controlled by the Labour Party. I understand because I have been a Camden ratepayer for over 20 years, and your Lordships will appreciate that that is a painful and character-forming experience.
From close contact, I have observed inefficiencies and extravagances—some hilarious and some appalling. I think also that all of us who have been politically active in this inner city are aware of the basic problem, the political problem, of the lack of accountability which is set out in the report and which has been mentioned by several noble Lords.
It is true that too often councillors in inner London boroughs are taking expenditure decisions when they secure their political support from people who benefit but do not pay. In that respect, I agree with a number of the comments of the noble Lord, Lord Elton. Too often the councillors cultivate minority activist groups at the expense of the needy community. As we all know, the heart of the political aspect of this problem is a mixture of low political participation and the structural nature of politics in the inner city. To some extent, that is for our political parties to resolve. They have to try to create healthy local politics and to restore democratic participation in local government. We should recognise, however, that it is not easy for this House, nor for any government, to prescribe remedies to a locality, though I sometimes wonder whether proportional representation would not be helpful.

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I also think, following the previous speaker, that some suggestions in the Widdicombe report are very pertinent as are the statements of the noble Lord, Lord Elton. So we have a problem which we, on this side, recognise and indeed suffer from and pay for, politically and financially, as well as in other ways.
Two factors, it seems to me, are clear. They are stressed in the excellent Audit Commission report and are available for action. One is that continuous carping about local government simply will not help. I thought that what my noble friend Lord Taylor said rang very true. It does not help if people go on and on about what is wrong in a small area of local government. I had the noble Lord, Lord Boyd-Carpenter, in mind, and I am sorry to see that he is not in his seat because I sometimes feel that he is in danger—I say it in a friendly way—of bringing the noble art of bias and partisanship into disrepute.
The Audit Commission said:
"The situation will not be improved by yet more public criticism".
Secondly, the commission said that the most constructive progress could be made by strengthening local government management and that,
"The need is for outstanding management of each of these problems".
I think that we can make progress in each of those directions.
Neither management nor money alone, as people constantly say, will solve the problems. But no progress will be made without more of each. So the Audit Commission is in one area saying to the Government, "Actually, put up or shut up." What is required is help to put up some improvements in local government management.
One management solution being floated in some quarters in respect of inner London is to eliminate the elected representatives of the delinquent boroughs and to replace them by commissioners; in other words, to convert inner London into a kind of greater docklands. That is conceivable in an emergency and only on a temporary basis, but I would assert that it is absolutely wrong in principle and that imperfect democratic local government—and, after all, it does contain the machinery for its own self-improvement—is better than efficient but unaccountable bureaucracy. Anyway, I know of no evidence that unaccountable bureaucrats have more imagination and sensitivity to handle the terrible social problems which characterise these communities than do elected members, and probably the reverse. I hope that the Government will not be tempted down that path.
What is urgently needed is improved management capability in these boroughs. The Widdicombe report has within it very relevant proposals and the Audit Commission also sets out several excellent proposals which I think many of us would support. I draw from the Audit Commission the suggestion of streamlining local organisations. There are probably too many councillors in total. It is true, I believe, that councillors should be concerned with broad policy strategy rather than getting involved in all the details, and that allowances should be flat rate and not on a bonus system per committee. The statement that we should strengthen the position of chief officers is absolutely
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true. The specific suggestion to set up a joint working party of the Audit Commissions's staff and the representatives of those inner London local authorities is very practical in that they would then be able to agree both how to survive the immediate financial problem which is very acute and, in the longer term, make progress on their management problems. I think that those proposals should be implemented very quickly.
I note the criticism by the commission of the Government for failing so far to reform the grant distribution system and the system for controlling capital expenditure. We look forward to seeing what is finally done in those areas. However, I think the boroughs need even more immediate help to strenghten their management. I especially have in mind dealing with the very practical problems of vacancies and of inexperience among officers.
Turnover, as we know, is damagingly high. Five of the main boroughs mentioned suffered over 50 per cent. of senior staff leaving within three years of joining. Given the scale of these local authorities, their financial and staff organisations and the services which they are supposed to provide, it is not possible for them to be conducted efficiently in such a situation of high staff turnover and staff inexperience. We must accept that that situation will continue unless something urgent is done. The officers are faced by an excessive burden of committee work and by apparently insoluble social problems. It is not surprising if officers move to more congenial nearby authorities where work is more attractive and satisfying, or if bright young officers go immediately to those authorities.
As regards councillors, certain noble Lords have mentioned the problem of inexperience. I am not sure whether the inexperience of some inner London councillors is a bad thing which needs to be remedied or a consolation on the basis that they might do much more damage if they were more experienced at it. However, I can say that the shortage of experienced officers is a wholly bad thing and that something should be done about it.
I should like humbly to make a small suggestion here. There should be a crash programme whereby local authorities most in need are loaned experienced staff from other local authorities which are more favourably placed and also from central Whitehall departments. The Government might initiate such a programme immediately and, in doing so, use the expertise of other bodies with knowledge of local government—such bodies as CIPFA and the Audit Commission itself.
I do not think that such an emergency programme is enough in itself. We need much more. We need the other reforms proposed by the commission and in Widdicombe. We need more resources in localities where the need is greatest. I should also say that we should never allow the incompetence of a minority of councils to justify depriving those most in need of help.
Certainly, we need a reciprocal and positive approach by those councils to any such action. We need those councils to react positively to any measures to help strengthen their management. I believe that

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there is already some evidence of more realism—not repentance, but realism—among certain of those councils.
Without more experienced officers, being made available immediately, the result will be a financial disaster, especially bearing in mind the enormous debts such boroughs carry. The pain of that disaster will be inflicted, not on the members of the councils, but on the already deprived and under-privileged citizenry of those boroughs.
On a far more general point—the question of tone which was mentioned by my noble friend Lady David—I should like to urge some noble Lords opposite to be less negative in their attitude towards local government. Our system of local government did drift into extravagance in the previous decade. But as a system of government, it has long been a matter of pride and we should continue in general to view it as such. As Tony Crosland rightly said, the party is at last over.
The areas of delinquency are well identified and very few. They should not be exaggerated or even (as one sometimes feels they are) almost nurtured to be exploited as propaganda. There are not many of them. I was delighted to see in the report that Greenwich is not one of those most maligned. The problem is small scale, though very important. It does not justify the alarming drift into centralism which we have recently witnessed and of which we have further promise with the growing nationalisation of education and so forth.
I find it particularly puzzling and ironic, as it would be to any professional historian, to see the onward march of the men from Whitehall led by a Conservative Prime Minister. I think that this growing suppression of the independence of British local government is of constitutional concern, as the noble and learned Lord, Lord Scarman, has said elsewhere. In our constitution we do not have formal checks against the overweening power of central government or a legal system with a tradition of defending local and individual rights again the central state. One reason why they have not been needed historically has been the existence of an independent local government which diffuses the power of the state. Within the broad framework of national law, local governments have implemented their own policies, based upon local electoral will.
I sense now a new tendency—unpleasantly militant—of Whitehall to view local government as subject states of central government and expected to follow the central party line. If they are governed by different parties and policies, they are viewed as pariahs; if they are obstinate in their local independence, it is felt that they should be abolished.
Many noble Lords opposite know from their own experience and their great contributions the value of independent local government. By that I do not mean their right to be profligate at the expense of others. But it is not in our interests to deride and demoralise local government.
I should like to conclude by urging the Government to be more constructive in their general approach to these issues and, in particular, to move urgently to strengthen local authority management in the specific
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ways suggested in the excellent Audit Commission report, by myself and by other noble Lords in this debate.
7.37 p.m.
Lord Beloff: My Lords, with all due thanks to my noble friend Lady Cox, this has been a disappointing debate as a debate, although individual contributions will read well in Hansard. I say that because we have not brought together sufficiently the fact that we are really dealing with two quite separate issues.
The first of those issues was highlighted by my noble friend Lady Cox. If the noble Baroness, Lady David, had followed that up, not by denouncing my noble friend as an extremist without showing that any of the facts which she advanced were in the least questionable, but had rather said, "Let us try together to come to terms with this particular crisis; we on our side of the House will certainly denounce unequivocally the abuses which have been put before us and noble Lords on the other side of the House must be ready to question the Government as to how far it will help local authorities whose own conduct of affairs is beyond reproach", then there would be a possibility of a partnership. I do not think, however, that that possibility was advanced by the way this debate was begun from the other side of the House.
I feel that it may be that the loyalty of the noble Baroness, Lady David, to which my noble friend. Lord Boyd-Carpenter referred, includes the acceptance of the model provided by the leader of her party, Mr. Kinnock. If Mr. Kinnock had been willing at some stage to say, "I and my party have nothing to do with this kind of thing; we are as opposed to it as anyone else", it would have made a difference. I think it was too much to expect from a general who leads his army from behind, the Duke of Plaza-Toro of British politics. It would have been important not perhaps because it would have affected Mr. Bernie Grant or any of these people—they are, as the noble Lord, Lord Chalfont, pointed out, working under a different system or for different objectives—but it would have stopped other local authorities coming under Labour control from feeling that they could with impunity do much the same kind of thing. Although it is true that, in the sense of major abuses, we are dealing with a minority, we are seeing some of the facets of what has been described spreading to other local authorities.
Baroness David: My Lords, perhaps I may intervene for a moment. I think that the noble Lord has not read everything that my right honourable friend Mr. Kinnock has said; and if he reads the end part of my speech this afternoon he will see that I was very anxious to have co-operation between central and local government; that I was dismayed by the way things were going; that I was not happy with some Labour councils; and that I hoped that there might be some substantial changes and that these changes were already happening. I am quite sure that my noble friend Lord Underhill will follow up these points when he replies, but I think that the noble Lord is being a little unfair.
Lord Beloff: My Lords, for someone who has called the noble Baroness, Lady Cox, an extremist, the charge of unfairness is hard to make stick.
Lord Elwyn-Jones: My Lords, will the noble Lord deal with the intervention of my noble friend instead of offering mere abuse?
Lord Beloff: My Lords, I should have thought that the noble and learned Lord would agree that I have been accused of unfairness. I am not convinced that that case can be made out. I shall read the noble Baroness's speech to see whether I have misinterpreted her. I can only say that the most impressive speech from the other side of the House was made by the noble Lord, Lord Taylor; but I believe that the noble and learned Lord was not in the Chamber at the time. The noble Lord began by saying that of course we must react in a hostile fashion against this kind of thing. He began in that way and that is what I hoped the noble Baroness would do. However, as it is late, I think it would be wrong to go into personal arguments of this kind because other important things should be said.
I was about to refer to other local councils. The noble and learned Lord will be particularly interested to note that the first council I am going to discuss is Brighton, which has just passed under Labour control. What has happened? Nothing on the scale of Southwark or Lambeth but £66,000 of public money is being spent to employ a public relations firm to make the council's case against rate-capping. In a city which has no history of bad relations with the police we have a totally unnecessary police committee. We have a women's committee; and looking at Brighton beach, the women of Brighton seem to be in very good shape. I hardly think that they need a committee. The whole litany is beginning even in Brighton, which is not a notably disadvantaged city.
I shall give one other example only because I happen to have a minor personal concern with it. For some time some people have felt that it would be admirable to have a museum of the history of the British Empire and British Commonwealth. It was hoped—and it was right to hope, and noble Lords on all sides of the House have always said that we should hope—that any new cultural enterprise of this kind would not be in London and that it should be used to attract tourists, foreigners and our own people to a provincial city. The obvious provincial city for a museum of the British Empire was Bristol, the city from which John Cabot sailed at the beginning of Britain's overseas enterprise, the city which rose to greatness on commerce with the empire. Having come under Labour control, Bristol, for so far as one can make out purely ideological reasons, has rejected the idea of having this museum and it will no doubt go to some other city. It may in the end have to come to London which I think would be a mistake and a blow.
So the problem is not entirely confined to the authorities which have figured in this debate. That is why I feel it is important that it should be stated over and over again by the leaders of the party which controls these authorities that what they are doing does not correspond with party policy.
The other equally important issue concerns what is going to happen if the councils which we have been discussing go bankrupt. This has been faced by spokesmen for the Labour Party. Dr. Cunningham has
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said that they will not be bailed out, But of course they will be bailed out, if not by a Labour Government then by a Conservative Government. No government will allow important parts of the capital city to be in a position in which they cannot provide the ordinary services for their citizens. After all, New York went through this, as was pointed out in the Audit Commission report, and New York was bailed out. It was bailed out by New York State and by the Federal Government. It was unthinkable that in New York which to many people is the entrance to America, government services would totally collapse.
Therefore it is important that we should give more thought than perhaps we have to the steps that would be taken if this were to happen. One can talk about the appointment of commissioners. Here I would agree with the noble Lord, Lord Donoughue, that it would not be a long-term solution but something would have to be done if the ordinary salaries and wages of important units of local government could not be paid.
Above and beyond all that is the question that was raised in the very impressive speech of the noble Lord, Lord Taylor of Blackburn, and echoed in a way by the noble Lord, Lord Donoughue. We had a system of local government which made possible a partnership between local government, private industry, central government and voluntary organisations. That was the ideal and most people would like to go back to it. How one goes back to it, or how one produces a new version of it—a matter which does not merely affect the so-called delinquent authorities but affects local government as a whole—is a different subject, one which has come in and out of our debate but which would more properly be discussed when, as I hope, the Government not only allow us to debate the Widdicombe Report but also give us at least an inkling of what they propose to do about it.
7.49 p.m.
Lady Saltoun of Abernethy: My Lords, first I must apologise to the noble Baroness, Lady Cox, to whom I am very grateful for having introduced this debate this afternoon, and to the speakers who are to reply. I have to leave here at 8.15 for a dinner engagement and due to the length of time that the debate is taking I shall not therefore be able to remain for the closing speeches. I shall of course read them carefully tomorrow and I hope that your Lordships will forgive me.
Like the noble Baroness, Lady Cox, and, I am sure, most of your Lordships, I am the first to admit that most local authorities carry out their duties in a responsible manner. However, your Lordships will all have heard the list given by the noble Baroness of the activities of the minority which do not—and how deplorable are those activities, be they political, subversive of law and order and the defence of the realm, or educational, and will have noted the cost of them.
I should like to add a few words to what the noble Baroness said about the sex education that those local authorities are forcing on children of a very young age, which, as your Lordships will have heard, is not only divorced from any moral framework but denigrates

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family life and heterosexuality and glorifies homosexuality; poisoning their minds as well as endangering their health and future happiness. The noble Baroness referred to material available in the Library. Included in this material is a copy of The Playbook for Kids About Sex, which is aimed at very young children indeed.
This is not a party political matter. I ask any of your Lordships who have not already looked at that material to do so and to consider whether they would have wished their own children or grandchildren to be subjected to such indoctrination at a very young age. What would be their feelings were their child or grandchild to arrive home with The Playbook for Kids About Sex or The Milkman Calls? I think noble Lords will be appalled.
Some of us are, or have been, fortunate enough to be able to educate our children privately, but we are the lucky few. It therefore behoves us in this House to use what power we have to ensure that the vast majority of parents less fortunate than ourselves do not have to stand impotently by and see their children being corrupted, with no right to withdraw them from these pernicious classes. As the noble Lord, Lord Campbell of Alloway, explained, they have no effective remedy through the courts. The code of practice and the parent power to enforce it on which the Government are relying to remedy this evil are mere paper tigers and quite useless. If the Government realise this and now, quickly, take really effective steps to prevent this monstrous abuse of local authority power, they will earn the gratitude and respect of almost every parent in the country.
Apart from what I have just said, most parents who can afford to, and many who cannot except at great sacrifice to themselves, are educating their children privately because they want them to leave school literate and numerate; and because too many state school-leavers are almost unable to read, write clearly, spell, use the English language correctly, or do simple arithmetic. Some who have the time, ability and determination but cannot afford fee-paying schools, are trying to educate their children themselves at home, at least in the primary stages.
A month or two ago I watched a television programme about some of these parents and the difficulties they had with some local authorities who made things difficult for them, although parents have a perfect right to do that. I hope the Government will investigate this kind of local authority harassment and take steps to prevent it.
7.54 p.m.
Viscount Mersey: My Lords, I too should like to thank my noble friend Lady Cox for introducing this debate. I should like to concentrate on the nuclear-free zones and the serious damage that this does to our civil defence. Following that, I should like to broaden the argument to include the international aspect of these nuclear-free zones.
Underlying everything that I say is a grave usurpation of the power of Her Majesty's Government. No man can serve two masters, yet we
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are asked to serve many: first, our own Government; secondy, the European Community; and, thirdly, the various local authorities who have policies opposed to both national and European government. It is all too easy to laugh at nuclear-free zones, and previous speakers have done so, but I feel that the movement is too serious and widespread for mirth.
It is led by Manchester City Council, as my noble friend Lord Boyd-Carpenter has already said. I have here a poster from that council, which is rather large, stating that it is a nuclear-free zone. Following Manchester's example, we have a considerable number of local authorities—in fact, 173—which have declared themselves nuclear-free zones, as have four Scottish regions and 143 district councils. In fact, 66 per cent. of us now live in nuclear-free zones; 66 per cent. of us now face the problem of trying to serve more than one master. My noble friend Lady Cox has already made that point, as did the noble Lord, Lord Harris of Greenwich.
I should like to take the consequences of that just a little further and show that the end result would be anarchic. Central government's power could be reduced to that of President Gemayel in the Lebanon, whose authority extends little further than his own back yard. Outside the yard roam bands of Druze and Shi'ite Moslems, Phalangist and Marinite Christians, the PLO and the Islamic Jihad. If we do not check our extreme Left local authorities, we steer towards a Lebanese chaos.
I reinforce the speech of the noble Lord, Lord Chalfont, to show how extreme some of these authorities are. West Yorkshire County Council writes:
"We condemn our own government, whether Conservative or Labour".
The council is less worried about the cost of Trident than about the cost of Tornado aircraft. As it points out, the Tornado is the more expensive of the two.
The council condemns Vickers for building the Chieftain tank. I have the document here. It is called West Yorkshire Peace Information, Fact Sheet 1. One section of this document is headed:
"Vickers and the Chieftain Tank".
Under this heading it states that,
"Vickers [workers] build this tank; they too know well what else they could do".
The leaflet continues that they could build,
"a new economy metal press for cheaper and better cars" … small scale brewery plants for better beer … rebuilding Britain's piers".
Your Lordships will note that "piers" is spelt with an "i". I know that it is funny, but this extremist literature is dangerous to all parts of the House. This is, I hope, a bipartisan speech.
West Yorkshire is not, as your Lordships can see, just asking for a nuclear-free zone. It goes further than that. It is asking for an arms-free zone. It will only be satisfied with the abolition of our armed forces. If we dismiss these policies of the loony Left we do so at our peril.
I should like to spell out what has happened in the civil defence field which is led by Manchester, but my illustration is from London. Until 1983, the Government only asked local authorities to make

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plans for civil defence. However, realising that the nuclear-free zones were not making plans the Government imposed specific emergency planning requirements on local authorities. These are the 1983 Civil Defence Regulations. They included, in London's case, the duty to build five emergency control centres. The regulations were laid on the table in December, 1983.
Now, three-and-a-half years on, some local authorities are still not complying with them. The method of non-compliance is ingenious. It is best illustrated by the GLC's original reply. The GLC regarded government regulations as too vague and wrote back in these terms:
"Please state the most likely nature of a nuclear attack and the possible range of attack, specifying yield of weapon, whether ground burst or air burst: if air burst; height of burst. Whether more than one weapon might be used: if so, their respective characteristics. Numbers of weapons to be delivered per raid, number and frequency of raids, accuracy of delivery. Is an attack using an underwater burst in the Thames Estuary envisaged, and what effect might it have with regard to (1) tidal surge toward London and (2) specialised effects of wet fall out?"
As noble Lords must realise, such questions are quite unanswerable by the Home Office and probably unanswerable even by the Kremlin. They mask the general nuclear-free zone attitude that any attack would be nuclear and so devastating that there just is no point in planning for it. It reminds me of the pacifist forecast of 1939 that Germany would drop a quarter of a million bombs on London each and every day and that the whole city would become uninhabitable in six months. Events between 1939 and 1945 proved the pacifists wrong.
Fortunately we are not at war today, but this has allowed the GLC and its successor body, the London Fire and Civil Defence Authority, to embark on the longest filibuster I have ever come across. Not that I have anything against the successor authority. The point is that the GLC, before abolition, set up a group—still in existence—called the Greater London Area War Risk Study, known by its acronym of GLAWARS. On it serve Dr. Anne Ehrlich, Dr. William Gunn, Dr. Stuart Horner, Dr. Peter Sharfman, Dr. Frank von Hippel and an American vice-admiral called John Marshall Lee. They are still engaged in answering an unanswerable question, to wit: "How can we plan the civil defence of London without the Russians first telling us how many bombs they are going to drop, when, where and of what type?"
The GLC letter I quoted from is three-and-a-half years old now. It was written by a Mr. Peterken, but it surely emanated from the highest level—Mr. Livingstone. It is topical that a leading member of Mr. Livingstone's nuclear policy group and his personal civil defence adviser was none other than Mr. Duncan Campbell.
Under the 1983 regulations the Government have reserve powers to take the necessary civil defence measures themselves if the councils fail so to do. They can send in commissioners; they can construct the necessary buildings and send the bill to the local authority concerned on the grounds of culpable negligence. However, government have never used these powers and I must ask my noble friend on the Front Bench, why on earth not.
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I will ask him further to list the local authorities who have not fully complied with the 1983 Civil Defence Regulations. Since I fear that the list will be long, I think it best to put that down as a separate Question for Written Answer after this debate. I should like to ask him now, however, why government have not been tougher with these people and why the Home Office describes this monstrous filibuster by London, Manchester, Sheffield, Leeds, Bradford, Cambridge and Southampton not as a filibuster at all but by a euphenism new to me, called "creative compliance". Creative accounting I have heard of, but not creative compliance.
Moving now to the international scene, one of the odder nuclear-free zones is that proposed around the pop star Madonna. CND recommends that a 50-kilometre nuclear-free circle be created around wherever she sings. My response to that is that we should immediately dispatch her to Murmansk because then the Russians, who are so keen on nuclear-free zones themselves, must suit the action to the word and sail their entire fleet of nuclear submarines 50 kilometres out to sea!
It is, as I have said all along, all too easy to be risible about a very serious subject. How can it be that the great and good British people can so easily condone this militant lunacy? I believe that the answer is not national but international, and that the whole nuclear-free zone movement has been skilfully engineered by Marxists worldwide. They have succeeded in New Zealand. The secretariat of the NFZ movement, which is in Manchester, has so far organised three international conferences: the first in Manchester itself; the second in Cordoba, Spain; and the third last year in Perugia. Delegates from all the 1,700 nuclear-free zones of the world met there. They demanded inter alia the dismantling of all nuclear weapons. I repeat: it is not the business of local government to decide questions of national defence.
There are some interesting examples of town twinning. Noble Lords will be all too familiar with innocuous signs such as, "Petworth, twinned with San Quirico D'Orcia". That is harmless enough, but it is ominous that Hull has twinned with Rotterdam and that both ports have become nuclear-free zones, because it is this sort of twinning that helps to organise the NFZ international network. It is even more ominous that the Leeds local authority has twinned with Donetsk when there is no local authority in Donetsk to twin with. Similarly, Manchester has twinned both with Karlmarxstadt in East Germany and Puerto Cabezas in Nicaragua.
I feel sure that those types of twinning were engineered by the Soviets. They have nothing to lose from nuclear-free zones since they have such a preponderance of conventional forces. Indeed, I have evidence that it was the Soviets who invented the nuclear-free zone way back in 1956. I quote:
"For the Soviet Union the creation of nuclear-free zones in Europe is an important part of the struggle for strengthening peace."
That was written in 1956 and was published by the Novosti Press in 1986. It is a Russian publication.
I would say, following that, that I have until now regarded the "reds under the beds" speeches of the noble Lord, Lord Chalfont, as a little bit alarmist, but

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really not any more. Now I find him a realist, as indeed I find my noble friend Lady Cox. I cannot but construe the whole international nuclear-free zone movement as a carefully orchestrated communist attack on the Western democracies. There are even 13 nuclear-free zones now in the United States, including Chicago.
The Russian booklet I quoted from has a foreword by Mikhail Gorbachev: He writes:
"The creation of nuclear-free zones is a positive phenomenon of international life reflecting the will of ordinary people to promote peace"
As Mandy Rice-Davies once said, "He would say that, wouldn't he?" I remind noble Lords of what Mr. Ernest Bevin said nearly 40 years ago:
"I am convinced that the Soviet Union will not deal with the West on reasonable terms in the foreseeable future."
That includes local authorities.
8.8 p.m.
Lord Bellwin: My Lords, I was rather amused at some of the observations of my noble friend Lord Mersey. As to nuclear-free zones, I thought the subject was best summed up for me by the comments of a fellow Leeds Loiner, when I said to him, "Well, what do you think about nuclear-free zones?" and he said, "Eeh, I've never heard owt so daft in my life." That just about sums it up for me. I have never heard anything so ludicrous. Can you imagine, God forbid, the wave that came over from Chernobyl and as it came towards the nuclear-free zone of Manchester it said, "Left turn, we've got to bypass this bit because they've got a sign that says 'nuclear-free zone'?" What a lot of nonsense, really.
I was rather sorry that the noble Baroness, Lady David, made the remarks she did at the end of her speech about what my noble friend Lady Cox had said. Actually, I thought it was a splendid speech and it so needed saying. If that was extreme—and I hope I heard wrongly when I heard the word "unbalanced"; Hansard will tell us tomorrow—if that was extreme and unbalanced, then the vast majority in your Lordships' House are extreme and unbalanced. Maybe I am uncharitable and I heard wrongly. If I did, I will be the very first to apologise.
Listening to the debate, all I can say is—and I know the noble Lord, Lord Underhill, will nod his head when I say this—poor local government! I listened to the noble Lord, Lord Taylor of Blackburn, and he talked about how it used to be in his time. That was my time too. The reality is that it has all changed completely. I have spoken to fellow members from all sides of the council on which I served for many years as Leader and chairman, and they say, "You are so lucky not to be in it now. Look at the people who are in it now."
Yet there are some very good people in it now. I know them and they are good fellows but they are being swamped—that is the only word I can find for it. If we try to delude ourselves by thinking, "Well, they are only a few", we do such people a great disservice. I know so many of the good people and the noble Lord Lord Underhill, knows that I know many of them and count them as friends—who are still in local government. They are sick at heart about this situation. That goes for those at the very heart of the
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leadership—good people who are concerned only for those who elect them to office and who want only to have local services carried out in the most efficient way possible. That is what local government is about. That is what the noble Lord, Lord Taylor of Blackburn, described. I like to think that it is what my tenure of office was all about. Certainly I tried to make it so.
I should like to comment on one or two of the specific statements that have been made in the last two or three hours about the local government scene. I thought that the dissertation on democracy and voting made by my noble friend Lord Elton was quite splendid. I shall look forward to reading it. What he said needed saying; in all fairness it had to be said.
One myth relates to the idea that central government, having taken so much away from local government in grant, have thereby disadvantaged them. May I remind your Lordships of something? I remember very well how over the years when I was serving in local government the rate support grant percentage fluctuated from 66 per cent. to 56 per cent. and back to 61 per cent. It was a measure of what the government of the day—whatever government—thought should be a contribution from the taxpayer rather than the ratepayer. It was a point of view on what could be afforded at the time. I vividly remember the serious trouble caused by Circular 45/76—your Lordships can see that the number is emblazoned upon my heart—when Denis Healey, under pressure from the IMF, had to say to local government that it must reduce its costs across the board by 3 per cent. in one year. It is dramatic to have to do that in one year when you have already established your budget. Yet that was done by local government.
Certainly there had to be some cut in capital programmes which contributed towards it, a measure which was not all that smart on reflection, but that was the kind of relationship that existed. Local government said, "If governments are there they have to govern. We hate what they are doing like heck but the fact is that they are the government of the day and it is important that they should govern". So local councillors waited for the day that there should be another government in office but, while that government was there they tried their best to work within the parameters that had been set down. By and large that is the spirit that prevailed in local government.
In 1979 that spirit changed. One of the factors influencing that change was the advent of many people of the kind we have been mentioning today. Yet I who have the future of local government at heart say again, "Don't let us belittle local government, because if we do we shall regret it; its absence would harm us very much". Local government matters. Do not belittle it. Let us talk in practical terms of what we can do for it.
During the debate on Monday there was much discussion of services. I am reminded of the words of the noble Viscount, Lord Tonypandy, spoken when he was in another place. He said that these people used the language of democracy to destroy democracy. How telling a phrase. The fact is that they talk about providing services and say, "Look at the poverty, look at the conditions we have and yet you deny us money to remedy them". Some of your Lordships will have heard me ask on Monday—and I say it again

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now—"How can you leave houses empty, not repair them and provide only wretched services because you say you cannot afford to maintain them, when in the same breath you spend not a million or two but tens, even hundreds of millions of pounds on the kinds of projects that we have been hearing about today?" They cannot have spending priority. Is that why these people were elected to office? Surely not.
I know what can be done. The report of the Audit Commission mentions a potential saving of £2 billion—that is, £2,000 million—to be achieved by simply doing things properly and cutting out inefficiency and waste. One must be willing to say that if the private sector can provide a better service it should be allowed to provide a better service. If people are in work, it does not matter whether they work for the private sector rather than the public sector. The fact is that it will be done more effectively and more cheaply. If it could be said that all that extra spending produced a better level of services, one could argue that that was a valid point of view, but, sadly, it has not produced a better level of services. That is the greatest indictment of all. It has not produced a better level of services.
I listened carefully to what I thought was a very good speech made by the noble Lord, Lord Donoughue, whom I have not heard speak before in your Lordships' House, and I should like to hear him speak more often. He asked why more senior staff could not be recruited. My head was almost coming off in frustration as I listened to him. Where has he been this past year or two? Does he not know what happened last week in Lambeth when NALGO advised the council officers not to go to work with the elected members because the officers can no longer stand the incompetence, inefficiency and waste. The union supports the view of the officers. It is a Conservative approach. What business has anybody to talk about the politics of council officers? We come back to the politicisation of officials and advertisements for vacant posts in the press which state that only officers like minded to the party in power need apply. That is another indictment of the worst type.
Years ago I remember saying to officers in Leeds, "You are so marvellous to us when we are in office and so awkward when we are in opposition", to which they replied, "But we are professionals and trained to support the members. We are apolitical". I put a great deal of the blame upon the officers' own associations for failing to speak out loudly and say, "Our members will not be allowed to be subjected to this treatment". This has happened to senior officers in Liverpool. I have seen the chief executive, who was one of the most respected officers in local government—respected by everybody—become a cipher because of what they did to him in Liverpool. Such things are everywhere in that and other authorities. It is dreadful. It is no wonder that there are unfilled vacancies. What officer in his right mind will go there? People run away fast. That is part of the tragedy that is happening.
Not for the first time, but I hope in a good spirit, I want to take issue with something concerning the effect of high rates that was said earlier tonight by the noble Lord, Lord Graham. I mentioned something about this on Monday. I believe that employment,
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jobs, work must be put into areas where the worst problems exist. That is a basic ingredient on which everything else feeds. Housing is important but employment is absolutely critical, as is the physical environment.
The noble Lord always speaks sincerely and I respect what he says. I hope that I, too, always speak with sincerity. However, I must tell him that I have spoken to many estate agents who have been given the job of trying to find new locations for business people, new offices and new factories. Only recently I saw an article in the press which confirmed what they told me. They say, "As soon as we mention that we have premises available and speak of Haringey and some other places, the people run away and will not go near them." Why should they? I do not want to make a big political meal of this subject because I feel too sad about the whole thing to want to do that. But you cannot get away from a few facts comparing Lambeth and Wandsworth, which have about the same populations. Noble Lords will say, "Not again" but, yes, again, because it is relevant.
Lambeth has 4·22 bureaucrats per 1,000 population and Wandsworth 2·28, about half. As to expenditure on renovation of council dwellings, Lambeth spends £202 per dwelling and Wandsworth £768 per dwelling—marvellous, one might say; one would think it would be the other way round. In Lambeth the spending overall since 1979 has increased by 15 per cent. and in Wandsworth it is gone down by 18 per cent. Average household rates in Lambeth are £524 and, in Wandsworth, £294. In some parts the street is divided between the two councils, and one can imagine living on the wrong side of the street. To take empty properties, Lambeth had 2,000 and Wandsworth 280—it is that dramatic. As to council staff, there were 10,500 in Lambeth and 5,000 in Wandsworth.
If your Lordships go round the two places they will see which is better and which looks better. That is because one is run properly and one is run badly. It is run badly by people who are amateurs. They drive out their officers. They have 100 committees and subcommittees. When I was leader in Leeds I had 11 committees and a few sub-committees, certainly no more than a handful, and that authority was treble the size of this one. What are they all doing? They are all turning up at meetings. I leave your Lordships to come to your own conclusions about this. The hour is late and much of what I had intended to say I will not say but will keep for another time. I am sure that there will be another debate.
The great cry of local government was: keep local government local. How much money was spent on such campaigns? As was asked earlier, if they want to keep it local, what are they during with a South African policy, a Polish policy, an Irish policy, a Nicaraguan policy and an anti-nuclear policy?
I know that I share with the noble Lord, Lord Underhill, who is president of the Association of Metropolitan Authorities, of which I was at one time vice president, a great sadness about this. I say to him, to noble Lords on the Opposition Benches and to everyone who is interested in the matter, please let us see what we can do and let the local authority associations speak up themselves. I know that they

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have inhibitions because the Left wing is strongly entrenched, but let them at least try. If in the end they do not succeed, your Lordships know what will happen, and this can come from any government. The Labour Party may say that they will let it all rip and spend with no restraint when they get into government, but your Lordships know that it will only be a matter of time before the IMF will be back in, inflation will be roaring and interest rates will be high—it will be a case of déjà vu; we have seen it all before. Then what will happen to local government? The centre will erode more and more and in the end it will be as it is in certain countries on the Continent—albeit there is a federal system there—where compared to this country local government is nothing. That is what will happen here.
To those who still have a love for what local government is and can be and who can influence it, I say, please let us do this ourselves, there is still time if we like. But, if we turn away and try to belittle what is happening by saying, "It's only a few, it ain't important", what a price we shall pay.
8.25 p.m.
Lord Graham of Edmonton: My Lords, like other Members of the House who have spoken I am grateful to have the opportunity of making a contribution in what is considered by all of us to be a vital sector not only of the economy but of democracy. I am sad that although the first part of the Motion refers to the problems, few remarks have been addressed from the Government Benches about ways to deal with the problems. Criticisms of the solutions to the problems there have been, and many justified, but from my experience I believe that many Members have no idea of the nature of the problems.
I follow the noble Lord, Lord Bellwin, with great respect because he and I come from the same school, not only socially and economically but in regard to our activity in local government. I listened carefully to what he had to say. I also listened carefully to other Members in your Lordships' House who have stood for elections and won them. I do not take too kindly to those who have not stood for and been successful in gaining public office coming here and lecturing me and others about how democracy ought to be run.
The noble Baroness, Lady Cox, began by bemoaning the fact that there were local authorities, probably Labour—especially undemocratic and hard line on the far Left—who were not following what she has traditionally understood to be the remit of local government, and the fact that we were bucking longstanding conventions. I have news for the noble Baroness. In the short period of 25 years since I first stood for office and was successful in becoming the leader of a local authority, the conventions and traditions have changed out of all proportion because the nature of the task facing not only Labour authorities but all of us has changed out of all recognition. If the noble Baroness and her friends really believe that, because of the nature of this Government, 25 years later the conventions and traditions—traditions which I should say for 100 years before 1960 were reasonably well-balanced—could
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not have changed, I venture to suggest that she is not living in the real world.
The noble Baroness and her colleagues believe that they are doing not only their cause but also the policies that they stand for good by exposing the behaviour of some local authorities and giving details in the House. I have more faith in the electorate. They listen carefully and understand what is being said in your Lordships' House, not least because of television.
I have news for the noble Baroness and her friends. The attack on Labour local authorities tonight is a very familiar theme. The illustrations may change and the individuals may change but the general attack on the undemocratic, hard line and far Left was peddled assiduously in the passage of the abolition legislation. The electorate were told in the run-up to the local elections and the elections for ILEA what to expect. They were not deluded. They understood exactly what was said. They also had their own store of experience in the localities. When they were given the opportunity to vote on the GLC—denied by the noble Baroness and her friends in London—there were substantial gains for Labour, particularly in Brent. I will deal with Brent and the change in policy in a moment.
Lord Harris of Greenwich: My Lords, the noble Lord keeps on talking about—
Lord Graham of Edmonton: My Lords, excuse me. I will give way in a moment.
On this issue the noble Baroness and her friends have made a great fetish of the fact that the activity of Labour councils needs to be exposed and that ipso facto the people will determine that they want to turn them out. Despite a campaign similar to the one that we have heard today, in 1984 and 1985 the people of London, in the ILEA election, and people throughout the country listened carefully to what was said in this House and determined accordingly.
Lord Harris of Greenwich: My Lords, the noble Lord has boasted about two authorities—Brent and the ILEA. Is he aware that in both areas the majority of citizens who voted, voted against the Labour Party? The only reason that a Labour majority exists is the electoral system which he and some of his noble friends support.
Lord Graham of Edmonton: My Lords, the majority of citizens who voted, voted against the Alliance and against the Conservative Party. The point that the noble Lord makes, not for the first time tonight, about changes in the electoral system is a fair one. Despite a determination by others to tell the voters what to do, in 1986 we increased our vote in Enfield, Brent and other places. The electorate had its own store of experience.
I am sorry that the noble Lord, Lord Campbell of Alloway, unusually, is not in his place. The noble Lord wanted to congratulate the national press because it had done a great deal for which he and his supporters had cause to be grateful. It had given publicity to all local authority dereliction. I shall give the House an illustration of how the national press, which the noble Lord praised, has acted. A determination was made by

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the Press Council this week on a headline in the Sun newspaper which stated, "Vile book in school". I shall give an extract from the findings in this case which is familiar because it has been peddled by those who hold a view contrary to mine:
"According to the evidence before the Press Council the book was held by ILEA at a teachers centre, not in schools, and was not available to pupils. The authority has said it should only be used with older pupils in particular and exceptional circumstances after their parents had been consulted. Under the main headline, 'Vile book in school' the Sun said it was being made available to junior schools by education officials, and in another headline reported, 'Pupils see pictures of gay lovers'. The paper itself chose to reproduce across four columns a picture captioned 'Perverted … a page from the book showing Jenny in bed with her gay dad and his naked lover', thereby giving the picture and its caption far wider dissemination than otherwise it might have had. Although the story did not say so, there is no doubt that the book was available to London children through other channels than schools and the ILEA. However, the misleading but clear implication of the headlines was that the book was then in use in London junior schools and had been seen by children there. The complaint against the Sun is upheld".
There has been a welter of cristicism of council actions. Those who oppose my views are entitled to make that criticism. Why do they not occasionally draw attention to illustrations such as the one I have given? Why do they remain silent when some of the evidence upon which they have rested their case is shown to be shallow? I could give the House many other illustrations about the way in which all authorities are being deliberately and mercilessly maligned by an unfriendly press.
A great deal has been said about the hard Left. More than one speaker has drawn attention to the Labour candidate in Greenwich. They must believe it is a bonus to say that she is of the hard, far Left. So be it. I do not say that she is or is not. If your Lordships ask the people of Greenwich to pass an opinion on a candidate that you have labelled, do not be surprised if the result is not to your liking. But do not then say that the test was not a true one. Whether she is of the hard Left or the far Left, she is the Labour Party candidate in the London borough of Greenwich.
I have no doubt that other Members of the House who have yet to speak are far better qualified than I am to draw the attention of the House to what they believe to be derelictions by that council. The people of Greenwich will make a determination in the light of all they see and hear.
The noble Baroness drew our attention to race spies. That was another glib, easy, distorted description of what had happened. She knows better than anyone that the Conservative and Alliance-controlled Brent council decided to engage 180 teachers with special responsibilities for race. I repeat that it was the Conservative and Alliance-controlled council which took that decision. It produced a scheme and submitted it to a Conservative Home Office. It was approved. There was no criticism or argument. It was only when Labour won control that it was decided to implement the policy with which everyone in Brent at that time agreed.
Although there may be arguments about how the scheme has developed, it is sharp practice mercilessly to beat a council such as Brent and the many other inner London authorities which have indescribable conditions and problems with which to deal. We have been talking about the problems of inner London and
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other inner city areas but there have been few illustration. I wonder why the noble Baroness, who talked about problems, did not talk about homelessness. That is a big problem in inner London which has 30,000 homeless families. Why did she not talk at length about the housing problem?
Baroness Cox: My Lords, the main point which I made on several occasions was my anxiety that so many resources and so much local authority money were being diverted from those problems in areas where the suffering is greatest towards matters which, I think, worry many of the citizens who live there. They see that as an abuse of the resources. It is because I care about problems such as homelessness and the others which occur in areas of high social deprivation, that I care so passionately about the distortion and diversion of funds in other directions.
Lord Graham of Edmonton: My Lords, let us try to quantify the amount of money involved. Manchester City Council has been used more than once as an illustration of a hard Left council which wastes money on equal opportunities, a race unit and gay and lesbian grants. It is suggested that such money would make a big difference. Those budgets amount to 0·25 per cent. of its budget. In a workforce of 28,000 people, 26 people are involved in equal opportunities. I make no complaint about Members opposite who, given the opportunity, would not pursue certain policies, but I strongly object to the way they have sought to smear not merely the authority which is doing a difficult job but Labour per se.
Baroness Cox: My Lords—
Lord Graham of Edmonton: My Lords, the noble Baroness will have an opportunity to speak when I give way in a moment. Glib phrases are used. We are told that not all Labour-controlled authorities are bad; that it is only a minority; and that there are many good Labour-controlled councils and councillors. But the intention is to smear Labour local authorities.
Baroness Cox: My Lords, the noble Lord will forgive me for intruding once again, but I must put the record straight. I made as my first and most important caveat the fact that we are talking about a minority. I specified the figures and proportions of that minority. I said that we were talking about approximately 22 councils. They represent about 13 per cent. of the population of England and between one-quarter and one-third of those who live in Labour-controlled areas. That is not a loose, cheap jibe; that is accurate quantification. It is a substantial minority.
Lord Graham of Edmonton: My Lords, we have moved from "minority" to "substantial minority". I stand by what I said, the intention of both this debate and the illustrations used to support it has been to smear the good name of Labour in local government. The people of this country will, perhaps not too far in the future, have the opportunity to express an opinion. Unlike the noble Baroness and her noble friends when faced with the unit of local government that they

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disliked because it was not prepared to do everything central government said—that is, the GLC—their solution was to abolish it, get rid of it. Their solution was not to go to the electorate nor to provide the voters of London with an opportunity to say whether they wished to see the GLC abolished, changed or whatever. That was not the solution of the noble Baroness.
Perhaps I may very quickly draw to the attention of the House the reason for the problems which are being faced, in my view. Noble Lords opposite have said that we shall not solve the problem by throwing money at it. This Government will never be accused of throwing money at the problem because since 1979 they have withdrawn money in the face of mounting problems in many local authorities. In Brent, for instance, the total grant which was lost between the level in 1981 and that in 1986 was over £40 million. I wonder what the noble Baroness and her friends were thinking they would like to do in 1984 and 1985. I wonder what this Labour-controlled authority would now like to do. In Haringey, the reduction is £62 million; in Islington, £55 million; in Lewisham, £46 million. That is the enormous size of the task.
There is an increase in the problems, never mind housing. I am sorry that the noble Lord, Lord Bellwin, is not here. He prayed in aid the excellence of Wandsworth and contrasted it with other local authorities. Let us look at what the Wandsworth council is doing; one of the bêtes-noires of noble Lords opposite was the high number of empty properties in Labour-controlled authorities. In Wandsworth today there are 900 empty properties, but 190 families for whom £1 million a year is being paid in bed and breakfast accommodation. I would share the incredulity of anyone: how on earth can that happen? If it is happening in Wandsworth—and there are good reasons for it—one should begin to understand that it is not so easy for other authorities to do what Wandsworth is apparently trying its level best to do. That is the size of the problem.
When one looks at the castigation of councils per se, they are keeping houses empty, 23 per cent. of the councils stock is empty; 4 per cent. of government housing is empty, but it is 6 per cent. in the private sector. There is never a complaint about the properties which could house people and which are owned by people other than councils.
Lord Elton: My Lords, would the noble Lord permit me to ask him to read the debate on Monday, when there was considerable concentration on the subject?
Lord Graham of Edmonton: My Lords, I am grateful to the noble Lord. I did not hear all that debate but some of it and of course there was a concentration. However there is an inability to recognise that, if councils are responsible for 2½ per cent. of their stock being empty, something must be said about other sectors of the housing market.
I realise that time is getting on but I want to make a point about the rates to the noble Lord, Lord Boyd-Carpenter. The point which he wanted to impress on
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the House was that anyone who is faced with high rate levels will look elsewhere for a place to establish his business. He ought to see the queue of people who want to rent property in the London boroughs of Camden and Greenwich and Southwark. The rates there, we are told, are far too high and should be reduced. If indeed one is simply looking at the position from the point of view that employers will not bring their work where rates are high, he needs to be able to reconcile a contradiction.
Lord Boyd-Carpenter: My Lords, will the noble Lord allow me to say that the whole complaint during Monday's debate was that people were not bringing their businesses to those areas where people were suffering but were concentrating them in the areas like the so-called M.4 valley. If the noble Lord will study the matter a little more carefully, he will see that one of the discouragements—and it is only one, because there are many others—if you are starting afresh and have no particular local connections, to bringing your business into those areas is the simple calculation that you are going to pay high rates already and you will certainly have to pay more next year because that local authority has been borrowing and some time it will have to pay the money back.
Lord Graham of Edmonton: My Lords, the noble Lord makes the point that with rates go rents and in general the Labour government or Labour councils are not responsible. Into the equation of the problems in inner London and London itself goes the level of rents. That of course is a manifestation of the capitalist market and not the manipulation of a Labour government or Labour authorities.
I must respond to a point made by the noble Lord, Lord On-Ewing, who drew the attention of the House to the undemocratic practices in local government which he wants to see abolished. I wonder what he would say about the London borough of Enfield, my own borough, where in 1986 the majority was reduced and the true proportion of seats that were won ought to have resulted in a basic committee structure of 10 to 7. That was the proportion, with marginally more than seven entitled. Yet they have insisted on a majority of 11 to 6, plus, of course, the ex officio voting of the mayor and deputy.
Let no one on the other side castigate us on this side either for undemocratic practices or even, as the noble Lord said in one of his throwaway lines, for the rigging of tenders. The noble Lord, who will shortly be back in his place, will read what I have said and will know as much as anybody else about the manner in which non-Labour authorities and private contractors are very experienced at rigging tenders and making sure that the local authority pays heavily for their services.
So far as I am concerned, this debate has served a very good purpose. As noble Lords will realise, I have got a lot off my chest and I think other members of your Lordships' House will have got a lot off theirs. The debate has served a good purpose, but at the end of the day, whether the Opposition like it or not and whether the Government like it or not, the people of this country will decide. The first test will come at

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Greenwich in three weeks' time and I am looking forward to the result with absolute confidence.
8.47 p.m.
Baroness Faithfull: My Lords, I feel that I must offer my credentials in view of the fact that the noble Lord, Lord Graham of Edmonton, asked a rhetorical question: which of us on this side knew anything about local government.
Lord Graham of Edmonton: Which of the noble Baroness's noble friends had been elected to local government.
Baroness Faithfull: My Lords, I have not been elected to local government. I have worked in local government as a junior, as a middle manager and as a chief officer. Therefore I speak to your Lordships' House today with very deep feeling as one who has been an officer in local government. Like many noble Lords, I think we would be the poorer without good local government. I believe profoundly in local government.
I am particularly grateful to the noble Baroness, Lady Cox, for initiating this debate because I wish to speak on one department and then perhaps lead on to general principles afterwards. I am speaking of the role of social services departments and particularly in relation to the recommendations made in the Widdicombe report. The reputation of the social work profession has, I suggest, been dented of late due to some sad and unfortunate cases of child abuse; not only child abuse, but other areas such as the reported poor state of some (perhaps only a few) old people's homes. Nevertheless, I wish in your Lordships' House to pay tribute to the unsung, sensitive and skilled work done by the majority of social workers in the statutory, voluntary and private sectors. I pay tribute to the DHSS for the setting up of a social services department inspectorate and to the local government ombudsman dealing with cases of maladministration.
What is missing is a professional standard-setting body in the area of social work; that is, a social work council. In Chapter 6, paragraph 683 of the Widdicombe report it is written:
"We do not believe that it is practicable or desirable to exclude councillors from management issues. Nevertheless, we draw a distinction between the direction of general management policy and day-to-day management intervention. Councillors while retaining overall local responsibility for the delivery of service should seek to leave the day-to-day management of this service as far as possible to officers."
In Chapter 3, paragraph 54, the Widdicombe report states:
"Our overall objective is to make recommendations for the conduct of the local authority business widely accepted and attuned to political reality and the effective delivery of services".
I underline the words "effective delivery of services". Local government councillors have a right to expect a sound service from social workers—indeed from all their officers—as do the councils of voluntary organisations. The public and others whom social workers serve have a right to an effective service. Furthermore, those colleagues with whom social workers are in partnership have a right to expect effective co-operation.
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The doctors have a General Medical Council. The nurses have the General Nursing Council. Social work is the only one of the health and welfare professions which entail a practitioner-client relationship which is not subject to a code of professional conduct or to statutory regulations of training practice. A social work council would have three roles: the accreditation of social workers in concert with the Council of Training and Education in Social Work; the setting of professional standards; and the exercising of a disciplinary function.
The setting up of such a council is supported by the British Association of Social Workers, the Association of Directors of Social Services, the Social Care Association, the Council for Education and Training in Social Work, and the National Council for Child Care Voluntary Organisations. The setting up of such a council would help to fulfil the recommendations of the Widdicombe report and in the field of the welfare services would work towards an effective social work service on which councillors and the public would rely.
The noble Lord, Lord Bellwin, and the noble Lord, Lord Taylor, have talked about the past. Those of us who have served in local government either as councillors or as officers look back—as we are bound to—on the days of the past. Chief officers, indeed most officers, never let anybody know what their politics were. When I came into your Lordships' House no one had any idea to which political party I was attached. I never let anyone know. It was my business to serve whichever party was in power. However, this depended on two factors: first, that the officers were professional people trained to do their job and knowing what they were doing in the professional field; secondly, that the councillors quite obviously were political—they belonged to a political party—but their star was what was best for the people of the city or the county in which they were councillors.
I hope that my noble friend the Minister will be able to say, when the Widdicombe report recommendations are being considered, that he will discuss with his noble friends the setting up of a social work council.
Finally, with all the procedures and all the structures in the world nothing will improve unless we as people have the right integrity and feelings towards those we serve.
8.55 p.m.
Lord Charteris of Amisfield: My Lords, I believe that the noble Baroness, Lady Cox, is to be congratulated on having initiated this debate. She did it democratically. I believe that she is speaking of the real world.
The noble Baroness and other noble Lords have thrown a spotlight into some dark and murky places. It is very much in the public interest that Her Majesty's Government should have a long, hard look at what has been disclosed. At least to my ears, in no sense did the noble Baroness make a general attack on Labour councils. Again to my ears, I thought that the noble Lord, Lord Graham, was using his great eloquence to defend a matter that was not being attacked.

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My small contribution will be extremely short. It concerns what is being done by certain local authorities in the field of education. As has been said, we are dealing only with a minority but a minority large enough to cause a great deal of concern. The kind of example I have in mind is the establishment by the Borough of Haringey, with a quarter of a million pounds of ratepayers' money, of a lesbian and gay unit, one of whose objects is to establish a curriculum from nursery through to further education which is designed to be anti-sexist and to promote positive images of lesbians and gays. The philosophy which is being pumped into the children is that to be homosexual is as normal as to be heterosexual. It is implied that it is as evil and misguided to be a heterosexual as to be a racist.
This kind of pernicious nonsense is not confined to London boroughs. I should like to bring your Lordships' attention to a sex questionnaire which was used in secondary schools for sex education in the Manchester area. It is one of those questionnaires designed for those who are not particularly literate. It is a matter of ticking boxes rather than trying to put one's thoughts on paper. Some would say that it is rather like the new GCSE examination.
The questions dealt with are homosexuality, and heterosexuality, pregnancy, birth control and so on. It is all pretty unsavoury. However, the questions about homosexuality are specifically designed to make homosexuality appear entirely normal and not—as it is—restricted to about 10 per cent. of the population.
Here is an example. The question is asked:
"How many boys or men have sex with other boys or men?"
There are only three possible answers allowed to those being examined on this question. One is 80 per cent.; the second is 50 per cent.; and the third is 90 per cent. When it comes to asking the same question about girls or women the three possible answers are 90 per cent., 75 per cent., and—getting a little more reasonable—50 per cent.
In all these questions there is nothing at all to connect sex with love and precious little to connect it with procreation. The thrust of such sex education is simply how to enjoy one's sexuality to the full, and the emphasis is on separate individual gratification rather than on an interpersonal act. The only taboos are: do not get pregnant and do not get VD. No doubt, up-to-date editions will also say, "Try not to get AIDS".
It is not only adolescents who receive this treatment. Very young children are also subjected to it. The noble Lady, Lady Saltoun, has already referred your Lordships to The Playbook for Kids about Sex, and I thought that noble Lords would like to see it. It is an ILEA-sponsored book published using public money. Among its other obscenities this book sets out to teach young children the joys of what in my unregenerate youth was called "self-abuse". They are taught how to do it sitting on the loo, riding a rocking horse and, as a final obscenity, with a teddy bear. In my view this revolting book is misnamed. it should be called Masturbation on the Rates.
I do not know for certain what motives impel people to produce this ghastly material but I am certain of two
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things. The first is that the effect of such teaching cannot be anything but wholly bad for the children to whom it is taught. It cannot fail to destroy for them the security of family life, and to destroy security in young children can only leave them seriously disturbed and wide open to any bad influences around them. They will be ripe for the drug pusher and ripe for the agitator. The second certainty is that this material is pushed out by those very councils which are dominated by the extreme Left and of which the avowed intention is to destroy our democratic institutions. It is difficult to avoid the conclusion that the object of the exercise in pushing out this ghastly material is to make children so disorientated that the ground is prepared for that revolution of which the noble Lord, Lord Chalfont, spoke.
In his speech winding up the debate on the Bill of the noble Earl, Lord Halsbury, the noble Lord, Lord Skelmersdale, spoke of strengthening the code of practice in respect of local authority publicity. I understand that the noble Lord also said that the Government's intention was to bring forward legislation to strengthen the legal status of the code.
I conclude by saying that I very much hope that there is legislation, because I think that it is essential and I think that effective legislation is essential. By itself a code of practice would be about as much use to stop this menace as a barbed wire fence with "no admittance" notices would have been in stopping the advance of Rommel and the Afrika Korps in those far off days in the desert war.
9.5 p.m.
Lord Mayhew: My Lords, it is a tribute to the number and variety of misdemeanours of the delinquent councils that after five and a half hours of debate in which a mass of information has been produced about the misbehaviour of these councils, the noble Lord, Lord Charteris, can still come forward with new evidence which commanded the alert attention of the House and which—dare I predict it?—will command the attention of the tabloid newspapers tomorrow.
This debate has thrown up a vast amount of thoroughly disturbing information. However, it has been short on analysing how and why these abuses happen and what the remedy for them is. One significant fact which no one has mentioned is that Brent, Haringey and the rest, and also the Conservative Party and the Labour Party, have one great vital interest in common: not to challenge the existing electoral system. Indeed though they have no communication with each other on these lines, they are a silent alliance in defence of a phoney, outdated, unfair, undemocratic system which is at the basis of this problem which we have been discussing.
I am glad to see that the noble Baroness, Lady David, has returned to her place because I find some of the few remedies suggested in this debate a little puzzling. I understood the noble Lord, Lord Elton, when, addressing the electors of these delinquent boroughs, he said: "Use your vote". However, this same slogan was used by the noble Baroness. I was wondering for whom was she asking the electors of these boroughs to vote.
Baroness David: My Lords, if the noble Lord will give way I believe that the electors in any borough should have the chance to vote their council in or out. Therefore it is up to the electors of the boroughs of which the noble Baroness was complaining to vote out these councils if they are being so iniquitous.
Lord Mayhew: My Lords, I am most grateful for that very clear and interesting answer. I think that the fact that the official spokesman for the Labour Party in the House of Lords is recommending the electors of these boroughs to vote against the Labour Party will be of great interest in particular to the electors of Greenwich.
Baroness David: My Lords, that is not what I said.
Lord Mayhew: My Lords, it is.
Lord Elton: My Lords, I am not certain whether the noble Lord was asking me what I was asking the electors. He understood that it was to vote in accordance with the dictates of their pockets, and that one has to make the system work so that that is the case.
Lord Mayhew: My Lords, I quite understand the attitude of the noble Lord. He wishes the electors to vote Conservative against these councils. But as I understand from the official spokesman of the Opposition the electors of these delinquent boroughs are being urged to vote against the delinquent councils.
Baroness David: I did not say that.
Lord Mayhew: Well, they are being urged to vote for the delinquent councils.
Baroness David: It is up to them to vote.
Lord Mayhew: Lady David's eloquent appeal to the electors is to vote either for or against the delinquent councils. This is the only practical course that I have heard from the Opposition Benches in this debate. It is a fact that there is only one electoral system in the world which could confer so much power on such unrepresentative people. No other election system in the world can do so.
I challenge the noble Lord, Lord Underhill, to outline for us an electoral system which would get more unrepresentative people in power than the first-past-the-post system as practised in this country. It is a scandal. It is at the back of all this. It is not difficult in a traditional Labour area for a small group of extremists to seize control of the management committee, to select themselves as candidates, to fly the Labour flag and to win the necessary 20 to 25 per cent. of the electorate to their cause.
My Lords, what do they say? They say: "Vote as you have always voted. Vote for the party led by Mr. Kinnock and Mr. Hattersley and Mr. Healey." They do not say: "Vote for Trotsky". Their election literature which, as the noble Baroness, Lady Cox, remarked, usually comes after rather than before
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polling day, does not stress the works of Karl Marx. With our electoral system it is perfectly possible for a small group of extremists to do what they have done in Brent and Haringey, and are doing in more and more councils; namely, in Oxford and in Brighton. It is spreading simply because it is in the common interest of the Conservative party, of the Labour party, of Brent and Haringey, of these other places to continue with a bogus electoral system which is wholly undemocratic and allows these people to take power.
I am not saying that to change the electoral system is a total remedy—not at all. But I am saying that if the Government had taken what I believe to be the feeling of your Lordships' House, that we should have proportional representation in local government, if they had taken the feeling the House and actually legislated, it is worth considering what would have happened in these delinquent councils. Undoubtedly, there would have been more Conservative and more Alliance councillors, and fewer Labour councillors. Unless the Labour party won 50 per cent. of the votes, in which case they are entitled to a majority on the council, there would not have been a Labour majority on the council.
In addition, it would have been more representative because there would have been more minorities represented. There would have been more women, more independents, more members of the ethnic communities. That is a certain following of electoral reform as I believe this House wants it. But even that is not the most important change. Much more important would be that the elector would get a choice between different candidates of the same party.
If the Labour party won 50 per cent. of the votes in a ward with six seats, it would win 50 per cent. of the seats; namely, three seats, So, there would be six Labour candidates competing against each other for three Labour seats.
It may be argued that the Labour candidate who offered the greatest privileges to the gay community, who was more active and knowledgeable about creative accounting, who believed most in political appointments, would get more votes than the moderate Labour man representing the views of some noble Lords on the Labour Front Bench. But I do not believe that at all. I think you would find these Labour councils trimming their sails to the wishes of the electors which they have no need to do now, and which of course they do not do. These things are perfectly plain but no one on the Conservative Benches seems willing to discuss it, and no one on the Labour Benches seems willing to discuss it. Brent and Haringey are not going to raise the subject at all. It is a conspiracy of silence between the reactionaries of Left and Right, and of Brent and Haringey.
It is mainly the Conservative party and the Conservative Government who maintain the scandals in Brent and Haringey. God's gift to the militants, that is what the Conservative party are. Listening to them today, they were knowledgeable. They gave us a lot of facts about militants, about Trotskyists, and so on. But it was perfectly plain from all their speeches that they had never had to face up to a battle with militants in a union branch, on a management committee. It is all second-hand, remote stuff.
Baroness Cox: My Lords, if I may intervene for one moment, I have actually sat around committee tables and fought at committees with what I would call the hard-line far Left for nine years. I have written about those experiences, so it is public knowledge that I have had first-hand experience, and I have been physically attacked by them as well.
Lord Campbell of Alloway: My Lords, would the noble Lord give way again?
Lord Mayhew: My Lords, I should like to say that I too for perhaps 30 years of my life inside the Labour movement have been fighting this. This is not something new. The year 1968 was the first time I complained about specifically Trots in the Labour Party. It has been going on a long time. It is when in a union branch, a management committee on a Co-op, that you handle it there that you get to know about the subject, not when you are round a council table with them. I must not take too long, my Lords; I shall give way one more time.
Lord Campbell of Alloway: My Lords, I am grateful to the noble Lord. I only ask him to give way, which I seldom do, because it was suggested that people speaking from these Benches had no experience of subversive activities. I have had years of experience trying to counter communist infiltration of the trades union movement. If I had not had that experience, I would not have made the speech that I did.
Lord Mayhew: My Lords, I certainly withdraw my remarks so far as the noble Lord, Lord Campbell, is concerned. Perhaps I should not go too far now into the question of the motivation of the Conservative Party and the Labour Party in resisting electoral reform, which is the main solution.
I hope when the Minister replies that he does not use the old, hackneyed arguments. I hope he will not use the argument that proportional representation creates coalitions, because of course that does not apply in local government. I hope that he will not use the terms frequently used in the past by Ministers in this House about proportional representation; namely, that the first-post-the-post system is simple, familiar, and traditional.
I hope he will not use those arguments and those adjectives. If he does, I remind him that these, as research in Hansard will show, are exactly the same arguments used by Conservative Peers 160 years ago in defence of the rotten boroughs of that time. It was humbug then, and it is humbug now when it is used on behalf of the rotten boroughs of the 20th century.
There is only one reason why the Conservative Party resisted electoral reform 160 years ago and why it is resisting electoral reform today. The reason is quite plain. Water does not flow uphill, and MPs do not
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support reforms likely to lose them their seats. As evidence of this, I have the honour to be the president of the Alliance Action Group for Electoral Reform, and last year we wrote to a number of noble Lords asking their support for electoral reform.
One noble Lord replied—well known and respected by all of us, and I will preserve his anonymity with my life—as follows:
"Thank you for your letter. As someone who was returned to the House of Commons on a minority vote for 30 years, I am opposed to any form of electoral reform."
There is no humbug about that. We all know on both sides of the House that what the noble Lord says corresponds with an important political reality, and that is why the Conservative Party refuses it. It is not the national interest, not because it does not think it would help towards solving our problems in local government, but because it is not in the interests of the Conservative Party. That is the long and short of it.
Finally, I must say that the electoral system is not the only reason for the problem we have been discussing today. There is another profoundly important reason for it, and that is the creeping political corruption of the Labour Party. That is an important reason. The old Labour Party, in the days when there was first-past-the-post, could be trusted with huge majorities in local government. I recall with respect and affection the Labour Party people who dominated the Woolwich borough council during the more than 20 years that I was one of the Woolwich Members of Parliament. They were representative; they were radical; they were active; they were responsible: in every way a contrast to the rabble of Labour councillors who now dominate the successor organisation, the Greenwich Borough Council. As I say, they were a complete contrast.
No one doubts that the moderates in the Labour Party such as Mr. Kinnock, the noble Lord, Lord Underhill, and others would like to crush what has been called the loony Left. But what do they do about it? There has been a meaningless handful of expulsions. There have been some cosmetic changes in the Labour Party's constitution. There have been some long and windy speeches. And the problem is growing. Not only has it not been solved but it is increasing. I must say with complete sincerity that I believe the moderates in the Labour Party have either got to clean up their party or leave it. That is what they should do. They should not stay there giving an air of respectability to political elements which they know perfectly well are subversive of parliamentary democracy.
In conclusion therefore this debate, as I say, has been filled with colourful stories of the misdemeanours of the delinquent councils, but the main blame for failing to eradicate this evil rests squarely on the Conservative Party and on the Labour Party.
9.21 p.m.
Lord Underhill: My Lords, I am certain that the noble Lord, Lord Mayhew, will excuse me if I do not follow him along the path of proportional representation. We have debated that before and I am prepared to debate it again on the right occasion, but, frankly, not tonight—
Lord Harris of Greenwich: My Lords, I can understand that.
Lord Underhill: Yes, my Lords; and I hope the noble Lord will not draw me into it now because he might regret having done so. The noble Lord, Lord Skelmersdale, said that local government is tarnished by a small minority. Without that qualification, frankly, he would have been in danger, and this debate would have been in danger, of giving serious offence to thousands of Labour councillors up and down this country who are providing what they think is the best service possible for their communities. My noble friend Lady David made clear the points on which we dissociate ourselves, as an Opposition, from certain events.
On a personal note, perhaps I may say that I am now in my 57th year as a member of the Labour Party. During that period I have been proud of the Labour Party's achievements in local government, of its pioneering efforts and of its social achievements. I am still proud, basically, of what we are doing in local government, as the elections this year will prove. That view is shared by my daughter, who happens to be chairman of an important county council social services committee. I am certain she would resent some of the things that have been said tonight.
The noble Lord, Lord Mayhew, talked about the "recent creeping corruption" of the Labour Party. Those are very, very dangerous words—
Lord Mayhew: Political words!
Lord Underhill: The noble Lord referred to the creeping corruption of the Labour Party. I shall deal with the position of the so-called Left of the Labour Party very shortly. What we must be careful about is not to encourage a denigration of local government and the integrity of councillors. The noble Lord, Lord Bellwin, asked us not to belittle local government. That is one thing we are in danger of doing in this debate. The actions of some local authorities I may disagree with. But if one got the whole chapter of their local government work one might get a different picture. We might find that in many of their services they are good and progressive. Indeed, they might be better than other areas. That has been stressed by a number of speakers. At the end of the day, the public will decide by the ballot box what they want. I am sorry that there should be any Member of your Lordships' House who would imply, by his or her speech, the denigration of the use of the ballot box. I hope we shall never get to the situation where we believe that we can solve these problems by putting in commissioners.
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The noble Baroness, Lady Cox, referred to London Labour Briefing. I wonder how many noble Lords gathered from her remarks that it is an official Labour Party publication. It is not. It is a Trotskyist journal. She referred to the Trotskyist Socialist Worker Review. That is, I believe, a journal of the Socialist Workers Party which, again, is a Trotskyist sect.
For 50 years I have had three aims—to make more democratic socialists, to expose what I regard as the shocking philosophy of the Conservative Party, which disagrees with all the things that I believe are fundamental, and to fight Trotskyist groups who have tried to use the Labour Party. Anyone who knows politics knows that the only way Trotskyist groups can function is to batten on the parent Labour Party, and that is what they have been trying to do. It is we who have been fighting them. We do not leave and run away and then have to make up our minds which section of the Alliance we are really supporting. We are still fighting and I believe that we are gradually winning our battle with the Trotskyist elements, which I agree are trying to capture certain elements of the Labour Party.
I dare say there are noble Lords who could talk about what they know of the influences of Right-wing groups on Tory policies. They might say something about the Young Conservatives—I believe that the age there goes up to 35 or even beyond—who are a dangerous body inside the Conservative Party. As an individual, I might echo some of the warnings given in the Metropolitan Police about the insidious Masonic influences on some Tory establishments.
The noble Lord, Lord Skelmersdale, referred to certain outrageous local authorities. I must ask him, because he is the responsible Minister of the Crown, which are the outrageous local authorities. It is his job as a Minister to secure consensus between central and local government and to do what he can to ensure that local government functions correctly.
Is the Lothian region, on which my noble friend Lord Morton of Shuna gave an exposition today, an outrageous local authority? From what my noble friend said, I should have thought so. I have a list here of some 10 shocking acts—I will not say achievements—by the Berkshire County Council which in 1985 was regained by the Conservative Party. Is that an outrageous local authority? Or will the Minister pick and choose as to what he regards as an outrageous local authority? The noble Lord made a statement and I hope he will explain it to us.
I think all noble Lords, whatever their views, must have been impressed by the points made by my noble friend Lord Graham of Edmonton. His exposure of some of the cheap publicity that is given to certain actions by some local authorities was very good. Also, he reminded us once again that in 1979 the rate support grant was 61 per cent. and in 1986–87 it had dropped to 44 per cent. Local authorities throughout the country have lost £17 billion by government action since 1979. We shall shortly be discussing the points raised by the noble Lord, Lord Elton, when we come to the Scottish rates Bill, and your Lordships will soon have before you two other local government Bills

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which seem to indicate gross ministerial mismanagement—and we are talking about mismanagement today. May I ask the noble Lord to confirm that if a council does something for which it has no legislative power, then that is a matter for attention by the district auditor?
The noble Baroness, Lady Cox, referred to death threats. If there are death threats, that is shameful and I believe that the whole House will condemn that. But if there are death threats of which the noble Baroness is aware, they should surely be exposed outside this Chamber and evidence should be provided. That is the course which should be followed.
The noble Lord the Minister referred to Labour's local government policy. He must have a mole somewhere, since this is being discussed at the Labour Party local government conference at Leeds. It is a pity that he will not be there, because he would hear some first-class, responsible people in local government discussing what is best for local government in this country in the best possible way. I myself attend meetings of the Association of Metropolitan Authorities. As the noble Lord, Lord Bellwin, has said, I am its president. I hear the discussions of a very small minority of what one would classify as the Left. The discussions always concern what is best in the interests of the people of this country in terms of local government policy.
I agreed with the noble Lord, Lord Skelmersdale, when he said: "Please use your vote". I hope that no one will denigrate that statement. I should like to echo the views of various noble Lords who have commented on Widdicombe. There will be an opportunity to discuss that report in your Lordships' House.
Both the noble Baroness, Lady Cox, and the noble Lord, Lord Skelmersdale, referred to the latest report of the Audit Commission. It is on that report that I originally wished to concentrate. In paragraph 1, the commission makes clear its concern about the cost and quality of services. It then goes on to state that the commission's paper refers to the nature of problems facing inner London authorities. Paragraph 1 states:
"Unless their magnitude and causes are understood and the serious consequences of neglect more generally appreciated, the Commission will have failed in its duty as an independent watchdog over local government management and finance".
In paragraph 2 the commission says:
"Members and officers in the boroughs in question face a desperately difficult situation",
and it asserts that the inner London and four outer London boroughs include,
"some of the most deprived in England and Wales on almost any indicator of social and economic deprivation".
I am certain that my noble friend Lord Graham will remember the visit that he and I made to Hackney. We spent a whole day there before the Abolition Bill, and I think that we were both appalled by the state of deprivation in the borough of Hackney.
The report sets out some of the appalling problems of unemployment, particularly among the ethnic minorities, and it points out the terrible problems of
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housing, homelessness and other aspects of deprivation. Some of these points were covered by my noble friend Lady David.
In the debate in your Lordships' House on Monday, although I was not present to hear the closing speech of the noble Lord, Lord Skelmersdale, he said that the commission's report,
"draws attention to the wasteful and incompetent way in which eight boroughs in London are conducting their affairs".—[Official Report, 3/2/87; col. 116.]
However, in paragraph 5 of the commission's report it is stated:
"This catalogue of problems is so serious as to be difficult to comprehend by those who have never lived in the rundown inner city area."
That is the opinion of the Audit Commission.
My noble friend dealt with the question of staffing and I shall not deal with that. However, the commission indicates in its report some of the problems that inner London boroughs face as regards the problem of adequate and efficient staffing.
My noble friend also referred to what the commission said in paragraph 11 of its report about the increased costs of the Metropolitan Police compared with other areas. She also referred to the increased costs of London district health authorities as compared, again, with other parts of the country. The question of the Metropolitan Police was referred to by the Audit Commission in paragraph 11. The commission referred to it in order to illustrate that,
"Local authorities are not alone in incurring higher costs in London".
Lord Harris of Greenwich: My Lords,
perhaps I may intervene on this matter. The noble Lord, Lord Elton, dealt with the point earlier. The noble Lord, Lord Underhill, is making a totally false point. Is the noble Lord aware that the Metropolitan Police provide national services? The local authorities we are talking about do not provide national services. The noble Lord is not comparing like with like.
Lord Underhill: My Lords, I am referring to the report of the Audit Commission. If the noble Lord wishes to criticise the commission for making this comment, that is a matter for him.
Lord Elton: My Lords, will the noble Lord say to which paragraph 11 he is referring. I have a paragraph 11 on page 4 which says,
"excluding police, fire and education services".
Lord Underhill: My Lords, provided that the House will give me a few more minutes in which to speak, yes I will. I am referring to paragraph 31 of the report.
Despite some of its criticisms of management, the commission seems to have some understanding of the problems that face inner London and in my view extends some sympathy to the authorities in the inner London boroughs. What does the Minister say? I refer not to the noble Lord, Lord Skelmersdale, but to the Secretary of State. What does he say? I have before me a cutting from the Guardian from soon after the Audit Commission report was published. I quote:
"We are not going to rescue them, so they will have to consider how to get themselves back into a state of solvency.… They got into this mess, they must get themselves out of it".

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That seemed to me to be a helpful attitude! He criticises the authorities but that is the attitude of the Secretary of State who is responsible for the progress of local government.
In paragraph 7 of the report I find this:
"Local authorities often lack the powers and resources to tackle these problems. But it is not for the Commission to propose policies for the solution to the 'Inner City' problems, nor to comment on government policy towards Inner Cities generally or London in particular. But it is clear that faced with such challenges, the management of local services in London cannot afford to be less than outstanding".
Reference has been made by one or two noble Lords to the possibility of bankruptcy. I understand that the Controller of Audit, Mr. John Banham, wrote to Margaret Hodge, who is chairman of the Association of London Authorities, as recently as 15th December. He said:
"At no time did I suggest there was any possibility of local authorities in London or anywhere else becoming technically bankrupt. Indeed I made the point explicitly that borrowing ratios in local government—that is, the proportion of debt in relation to the value of authorities' capital assets—was relatively modest by private sector standards".
Those are the words of the man who is in charge of the Audit Commission.
The Commission reminds us in paragraphs 55 to 57 that it has already publicised its views on the present system for distributing block grant to local authorities and controlling their expenditure. In view of the time I shall not repeat those views. In fact, my noble friend quoted extensively from paragraphs 55, 56 and 57. This section is headed: "Reforming the systems for distribution grant and controlling capital expenditure".
Noble Lords may recall that in the debate on Monday—reported in col. 80 of Hansard—the noble Lord, Lord Sandford, stressed the problem facing Hackney. He mentioned that the Docklands, with a population of 50,000, has been receiving, since the Docklands Development Corporation was formed, some £60 million per annum; whereas Hackney, an inner London council with three times the population, has been supported by only £12 million per annum, and that has been taken away by changes in the rate support grant and penalty. That is not a statement made by this side of the House but by the noble Lord, Lord Sandford, whose knowledge of local government and whose general standing in local government we all respect.
So important did the commission regard its views on the necessity for improvements and changes in the distribution of rate support grant and controlling capital expenditure that it actually made this point again in the very final paragraph of its report, in paragraph 61:
"However, it is nearly three years since the Commission warned that failure to reform the grants distribution system and to strengthen local accountability would lead to an explosion of creative accounting; and it is two years since the Commission pointed out the waste and inefficiency generated by the present systems for controlling capital spending. No action has yet been taken on either front by government. The consequences are apparent to the most casual observer. A less than urgent response to the problems of Inner London could have even more serious results."
That was not stated by the Leader of the Opposition but is the last paragraph of the Audit Commission's report.
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The question might be asked: what is being done about it? I have a document from Southwark giving that council's response to the Audit Commission's report. Southwark states that it is attempting to work closely with the district auditor but the achievements are not reflected in the report of the commission. Acting on the suggestions of the district auditor, Southwark has drawn up detailed action plans for every service and set up officer strategy teams to develop work in identified priority areas. These and other achievements have been recognised by the district auditor in his draft management letter to the Southwark Council dated 24th December, 1986, which explains why the Audit Commission was unable to present a more balanced picture as regards Southwark Council.
I also have a copy of the letter prepared by the chief executive of Lewisham—not the leader of the Lewisham council but by the chief executive of Lewisham—which he has sent to other chief executives of councils identified by the commission. The chief executive questions the position from his professional standpoint. He questions the validity of some of the commission's methodology. He complains that the report does not examine the variation within the groups. Most importantly, it fails to set out where there is a greater variation within groups than between groups.
Time is passing, and I should like to ask whether the noble Baroness, Lady Cox, has seen the reply by the Association of London Authorities which I have here. It is a very constructive reply to the Audit Commission. I should like to know whether the noble Lord the Minister has seen it and what his observations are upon it. The eight London boroughs have accepted a suggestion put forward by the commission to set up a working party with the commission to tackle the problems. The ALA points out its willingness to sit down with the commission in a constructive manner and see what can be done. Those points do not suggest a complete disregard of the commission and a disregard of some of the problems that have to be faced.
We have pressed time and again from these Benches for the need for consensus between central government and local government—something that has fallen down pitifully over the past few years since this Government have been in office. I hope that this working party with the commission will get down to work and that it can tackle the serious problems which have been brought forward by the commission.
9.45 p.m.
Lord Skelmersdale: My Lords, before I forget the noble Lord's last point, I must say that I agree with him wholeheartedly; I hope that the working party will get down to work with the commission, and I hope that local authorities will follow the commission's advice, using the district auditor, or whoever is appropriate, in each particular case. I must congratulate my noble friend Lady Cox for the quality of this debate. I can, however, understand my noble friend Lord Beloff's point; but I see he is not here so I will not continue with that. I do not therefore propose to make a second speech. However, I shall do less than justice to the House if I do not pick up just a few points.

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Both my noble friend Lady Cox and I in our opening speeches paid tribute to the majority of authorities. I rather think from a comment that the noble Lord, Lord Underhill, made that this was the saving grace of both our speeches. I repeat that message now but sadly there are authorities which do not fit this norm. My noble friend's account of a meeting in Haringey was hardly an account of responsible behaviour. It is because of the few, not the many, that we have had this debate today—a point that I thought my noble friend in introducing this debate made perfectly clear.
My noble friend commented—as did many of your Lordships—on the Audit Commission's report. She referred to the point—raised by my noble friend Lord Orr-Ewing at Question Time on Monday—about an earlier draft of the Audit Commission's report. The final version is measured, clear and the more forceful for its careful impartiality. I cannot say whether earlier drafts of the paper were or were not any more forceful than the published indictment of the management of eight London boroughs. The House will be aware from press reports that the Audit Commission discussed drafts of the paper with the authorities concerned, and with their associations.
The noble Lord, Lord Underhill, frequently tells us that he is honoured, and I am sure he is honoured—I would be in his position—to be President of the Association of Metropolitan Authorities. I rather wonder whether the Association of Metropolitan Authorities was in discussion with the Audit Commission before they issued the published version of their report. I suspect that it would be profitable to ask the associations themselves, and indeed the London boroughs, what exactly went on before the report was published. Certainly the Audit Commission—
Lord Graham of Edmonton: My Lords, I speak as President of the Association of Labour Authorities. If in fact the implication is made that somehow or other the integrity of the Audit Commission, who are the sole masters of their own report, has been in any way affected by representations that have been made to it—that is the integrity which means the honesty of the report—then the Minister ought to say so. I find it somewhat astounding that the opportunity which was taken by the ALA, in the light of a whole range of destructive comments that were made before the report was published, took the opportunity and apparently persuaded the Audit Commission to revise some of the words that they were going to include. Is that not sensible in the light of events?
Lord Skelmersdale: My Lords, the noble Lord, Lord Graham, has a favourite trick of putting words into people's mouths that they did not actually say. I was not casting any aspersions whatsoever. The definitive version of the report, as I made quite clear both at Question Time on Monday and just now, is the one that we all have, and that is published.
The noble Baroness, Lady David, attacked my noble friend Lady Cox, as an extremist, and criticised her for speaking as she did. I found my noble friend both concerned and sincere. She believed every word she spoke. She sought to convince us that many local
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authorities have such bad conditions in their boroughs that of course they spend more. But the answer lies in Exhibit 2 on page 3 of the Audit Commission's paper where it is shown that 11 London councils come high in relative housing deprivation, and not merely the eight which were the major subject of the report. That means that three housing authorities are much more efficient.
My noble friend Lady Cox also raised the subject of partisan publicity produced by some councils. As she pointed out, we have implemented the proposals of the Widdicombe report to prohibit party political publicity and we intend later this Session to take steps to reinforce the law in this area. We also intend to put forward a proposed code of practice on local authority publicity to deal with partisan political material. Here, the main problem is that the statutory powers of local authorities give them a wide discretion to spend money on activities that are only tangential to their functions. This discretion enables them to encroach on areas which are primarily the responsibility of national government; for example, foreign and defence policies. They are then able to publicise their activities and put forward with impunity their bizarre views and policies.
We asked the Widdicombe Committee in its main report to consider the discretion that is available to local authorities. As I have said, we are now considering its conclusions and recommendations. We shall certainly take into account the views expressed today by your Lordships in deciding how to take these matters forward.
As I understood her theory, the noble Baroness, Lady David, tried to use the costs of the Metropolitan Police to prove the Government's financial mismanagement. The noble Baroness cited some cost comparisons for the police in the regions and in the Metropolitan Police Force. The Government do not disagree with the figures—indeed, the noble Lord, Lord Underhill, referred to evidence, as it were, in the Audit Commission's report, so of course we do not disagree—but we disagree with their presentation in the earlier response to the Audit Commission's report.
There are good reasons why the costs of the Metropolitan Police are higher. It is widely recognised that civilian staff in London perform tasks which are carried out for provincial forces by local authority staff. Higher catering costs reflect greater operational feeding needs for the Metropolitan Police Force in policing demonstrations, whereas provincial forces make more use of self-catering. Other examples reflect the fact that the Metropolitan Police figures include value added tax. Those of other forces do not, as well as excluding payments received for services such as security at the Palace of Westminster, other responsibilities of diplomatic protection and so on. So I suggest that there is a very wide difference indeed.
I thought that arguments about efficiency and democracy in the speech of the noble Baroness were totally demolished by the noble Lord, Lord Harris. The noble Lord chided me for following the party line in 1982 on his party's amendments to the Local Government (Miscellaneous Provisions) Bill. Like political parties, governments are composed of human beings and human beings have a remarkable facility

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for being either right or wrong. I cannot remember the details but I must have persuaded myself either that the noble Lord was wrong (which I very much doubt) or that his method of attacking the problem was wrong.
Lord Harris of Greenwich: My Lords, this is a serious point. The noble Lord is speaking not only on behalf of the Government but on behalf of the Department of the Environment. It was his department which, through the lips of its Minister, urged the Chamber to reject the amendment. If in fact that amendment had been carried, this abuse of power in Islington would not have occurred. I asked the Minister earlier—and I repeat the question—whether he was prepared on behalf of the Department of the Environment (and not in terms of himself) to offer its apologies to this House.
Lord Skelmersdale: My Lords, I intend to look very carefully into what the noble Lord has said. I am not particularly interested, and I do not expect that he is, in the background of our debates in 1982, or indeed in our voting records, but if he is correct then I shall make an apology.
The noble Lord, Lord Harris, reminded us of the long list of abuses that led to the setting up of Widdicombe Committee—sending out papers too late; ignoring the rights of minority groups; the increasing confusion between the respective roles of councillors and officers. We remain concerned. I note the noble Lord's comments on the value of legislating in this area. The Government are still making up their mind on the responses of the Widdicombe Committee. We regard this debate as a set of such responses.
The noble Lord, Lord Morton of Shuna, raised the question of what one might almost call the creative accounting of Lothian council, but he explained his point very well. As a Scotsman he will be a lot more familiar than I am with the particular examples that he reported. However, I should make it clear that the Government's concern is about the growth of questionable practices in local government wherever they occur. I did not find many examples of Conservative councils or indeed hung councils in that position, but I shall read the debate with interest. I certainly do not intend to make a tally.
Lord Morton of Shuna: My Lords, if the noble Lord the Minister accepts the point that I was endeavouring to make, can he explain why the Government chose to appoint the Tory leader of that Lothian council to a paid post in a new town? It seemed odd.
Lord Graham of Edmonton: Jobs for the boys.
Lord Skelmersdale: My Lords, I am not familiar with the case, as I said, but I will of course look into this matter.
The noble Earl, Lord Halsbury, spoke, as he put it, in a philosophical mood. Not unusually, I found it a brilliant analysis, but he did not make the point that I have made before and have not yet heard argued down—although, since this speech seems to be going the way that it is, it surely will be in about three seconds
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flat—that there is no such animal as local government. What we have are 431 local authorities who operate 100 per cent. under statute law. They are not government.
Several noble Lords spoke of the rights of challenge. Not surprisingly, I think, the first to mention it was my noble friend Lord Campbell of Alloway. While judicial review procedures offer an effective means of challenging a local authority that has exceeded its powers or otherwise acted unreasonably, I recognise the concern expressed by my noble friend that it does not offer a perfect solution. In particular, any member of the public contemplating initiating such action would need to consider carefully the cost involved.
The Widdicombe Committee looked into this matter. One of its recommendations is that there should be a new power of financial assistance to complainants. The Widdicombe report recommends further that any elector or ratepayer should be deemed to have sufficient interest to seek judicial review of an action taken by his authority, and that the district auditor should have new powers to prevent in advance any unlawful expenditure by local authorities.
In passing, perhaps I may say that I know Mr. Widdicombe has been particularly interested in today's debate.
I can tell my noble friends Lord Orr-Ewing and Lord Campbell of Alloway that I am well aware that there are questions as to whether the code of practice that the Government are proposing is an appropriate means of dealing with the misuse of local authority publicity powers. We shall no doubt debate this matter at length when we consider the Bill in which it is contained. Suffice it to say now that local authorities must have an appropriate degree of flexibility and discretion to carry out their functions properly. Legislation must be drafted to ensure that. I take the point of the noble Lord, Lord Charteris.
My noble friend Lord On-Ewing spoke about a local government Bill. At the moment, I can count three local government Bills, two of which have seen the light of day and one of which has not. The Bill about which he talks has not yet seen the light of day. The Government have made no announcement about legislating on Widdicombe apart from making a commitment to reinforce the 1986 Act with regard to codes of practice.
I believe that the noble Lady, Lady Saltoun, has misunderstood the Education Act. Under the new arrangements for the control of sex education, the governors will be able to decide those teaching materials to be used in the classroom and those not to be used. No local education authority will be able to impose its views on the general content and organisation of sex education in schools against parents' wishes.
I agree with my noble friend Lord Mersey that some local authorities' attitudes towards civil defence are curious, to say the least. Some councillors pretend that civil defence is solely military defence. It is not. Civil defence covers lorries carrying chemicals which overturn, floods and any civil emergency. I shall take up with the residuary body the point which he was talking about.

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My noble friend Lady Cox and the noble Lord, Lord Graham of Edmonton, expressed differing views of the appointment by the London Borough of Brent of race advisers in schools. The posts form part of a proposal made to the Home Office to replace a number of posts which had previously received grant aid but which were found not to have specific responsibility for the needs of children of Commonwealth origin. The stated aim of that proposal was to tackle under-achievement among black children. There is ample evidence of such under-achievement. I am sure that I do not need to underline the damaging effects which that has on the children affected and, in the longer term, on the society in which we live.
On that basis, the Home Office gave its approval in principle to the plan. Subsequently there have been suggestions that Brent may intend that those posts should form part of a wider so-called anti-racist initiative. The grant is not available for such initiatives. I shall take up the matter further with my right honourable friend the Home Secretary if on reading the Official Report I find that I need to.
My noble friend Lady Faithfull spoke as a former local authority officer. She produced a refreshing and thoughtful view of what many operators and users of local authority welfare services would like to see. Would that some other noble Lords had seen fit to give such an analytical view.
I was interested to hear my noble friend's proposal for the establishment of a social works council. That proposal clearly merits careful consideration, but as I understand the position the parliamentary subcommittee of the Association of Directors of Social Services, which has prepared a draft document on the subject, has not yet adopted final proposals, and the Government have therefore not yet been asked to take a formal view. In those circumstances, it would be premature to comment.
The noble Lord, Lord Charteris, talked about the Playbook for Kids about Sex. I am advised that the book is published by Sheba Feminist Collective and not by the ILEA. It is intended to be given by parents to their children and not for use in schools. The Department of Education and Science is not aware of the book being used in schools in any area, although there have been reports of its distribution in Haringey. That is one of the issues on which the most recent DES letter to that authority has asked for an urgent explanation.
It was hardly surprising that the noble Lords, Lord Harris and Lord Mayhew, could not resist majoring, as it were, on proportional representation. We have heard about it before and the noble Lords have heard answers from many people before. As has already been said this evening, it is remarkable how often they manage to drag in this subject. This is not a debate about PR. The remedy for the Bernie Grants and Ted Knights of this world does not lie in proportional representation; it requires a system in which those who are entitled to vote are encouraged to do so. When 30 per cent. of the electorate votes and 70 per cent. ignores the issue, we do not get democracy, we get petty tyrany.
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Finally, I am most surprised that the sentiment with which I ended my opening speech has caused so much comment. I mean, of course, "Use your vote". I regard that as the very cornerstone of democracy. My noble friend Lord Elton was, I thought, a bit "méchant", to use a word in French which does not quite translate as "wicked". I understood him to say it would not work, the problem being that the percentage of the electorate who vote in local elections is comparatively low. I understand that my noble friend Lord Campbell of Alloway expressed a similar view rather more forcefully. A reason why voting in local elections is low—
Lord Elton: Would my noble friend permit me to correct him? He may describe me as "méchant" with any translation he likes and I will not object. The point I was making was not that the turnout was low but that the motivation was low and the motivation of those who voted was divergent from their real interest.
Lord Campbell of Alloway: My Lords, I do not think my noble friend the Minister was present but I was trying to point out that it is quite irrelevant to say "Use your vote" under the existing system, and that certain remedial measures—I shall not go into them, my noble friend will read them in Hansard—must be introduced. I am most grateful to my noble friend; he has already gone a very long way to meeting my concerns. All I am saying is that until you revise the regime it is idle and irrelevant just to say, "Use your vote". That is all.
Lord Skelmersdale: My Lords, the 9th of May comes earlier than anything else going on in the local authority world at the moment. That is why I said, "Use your vote".
I would say to my noble friend Lord Elton—I am like British Rail tonight; I am getting there—that a reason why voting in local elections is low is because of the gap between those who pay and those who vote. Yes, I quite agree: that is why the Government are committed to implementing far-ranging reforms of the system of local government finance. Our proposals are designed to restore local accountability and thereby enhance democratic local government.
I was amazed to hear the noble Lord, Lord Graham, say that only elected people understand democracy, but the principle of democracy to which he himself appealed was that it is the electorate which knows best and it gets rid of those it has elected as soon as they forget that.
We shall sweep away domestic rates, which are paid by less than half the adult population and are a thoroughly discredited tax. In their place we shall introduce the community charge, which will be paid by all adults. This will spread the burden of paying for local services more fairly. It will also establish a direct link between paying for local government and voting in local elections. No longer will profligate local authorities be able to push their spending up and up, while relying on the votes of those who do not have to meet the cost.

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As the House will know, a Bill to implement the Green Paper on reforms in Scotland is making good progress in another place. We in England and Wales are very close behind, but unless people use their vote there is still the likelihood of local authorities continuing on in the way all your Lordships have complained about this afternoon. People must be persuaded—I say it again, my Lords—to use their vote.
Viscount Mersey: My Lords, before my noble friend sits down, I asked him if he could answer tonight why the Government have never used their reserve powers under the Civil Defence Regulations 1983 with those local authorities which failed in their duties. He did not answer that point. Therefore, I think the best thing for me to do is to put that down as a Question for Written Answer along with the seond Question which I shall also put down for Written Answer and which I mentioned in my speech. That will ask for a list of all the recalcitrant local authorities.
10.10 p.m.
Baroness Cox: My Lords, this has been a long and immensely informative debate. I should like very warmly to thank all Members of your Lordships' House who have taken part. I should like to thank my noble friend the Minister for his generally encouraging reply. For example, I was particularly pleased to note that he has an open mind on questions of such importance as individual challenge and enforcement. I know that my noble friend Lord Campbell of Alloway would like to share my appreciation on that point.
As the debate has progressed your Lordships have provided an accumulative body of evidence to show just how disturbing the developments are which have been occurring in those authorities which have been the focus of our discussion here today. Of course I understand the views expressed by some noble Lords opposite who have put a different complexion on the debate. The only point to which I take serious personal exception was the accusation by the noble Baroness, Lady David, that I am anti-democratic. It is because I care so passionately for democracy that I spoke with such fervour.
I believe that nobody who has spoken—except perhaps the noble Lord, Lord Graham of Edmonton—has regarded the evidence we have heard as anything less than cause for very serious concern. As I said at the outset, these matters about which we have heard speak for themselves. Much of that evidence at times arouses mirth, but in general it has tended to arouse indignation. But it has been well said that indignation is not a category of political action. I hope that all people, whatever their political affiliation, who care about the future of local government and of our democratic institutions will take this evidence very seriously.
I also hope that all will respond in whatever ways are appropriate—politically and democratically—to protect the honourable traditions of local government and to preserve the democratic institutions which are the sine qua non of a free society. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Business
Baroness Hooper: My Lords, with the leave of the House, I should like to make a short business statement. By agreement through the usual channels the noble Baroness, Lady Seear, has decided to withdraw the Unstarred Question standing in her name on the Order Paper.

Patents (Amendment) Bill [H.L.]
10.14 p.m.
Lord Northfield: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Northfield.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AIREDALE in the Chair].
Lord Northfield: Before my noble friend Lord Stallard begins, perhaps I may suggest that it may be for the convenience of the Committee if we discuss together Amendments Nos. 1, 2, 3, 4, 5 and 7. They all raise the same point. If the noble Viscount, Lord Craigavon, is in agreement, I am sure that that will speed up the proceedings.
Lord Stallard: I am quite happy to accept the suggestion put forward by my noble friend Lord Northfield.
Clause 1 [Restriction of acts authorised by certain licences]:
Lord Stallard Lord Stallard moved Amendment No. 1:
Page 1, line 9, after ("patent") insert ("which has not at the commencement of this paragraph passed the end of the fifteenth year from the date of the patent").
The noble Lord said: I beg to move Amendment No. 1 and I shall speak to Amendments Nos. 3 and 5 at the same time.
I ought to say that I do not claim to be an expert on patents. Nor have I any vested or other interest in this Bill. I have been involved in health matters in the National Health Service for a long time. For many years I was chairman of local authority housing health committees. I was a member of an area health authority. I am a consumer of the National Health Service—perhaps the only person in the debate who is solely a consumer, apart from my noble friend on the Front Bench here.
I therefore take a deep interest in affairs affecting the National Health Service, and so I have read the Second Reading debate. I have gone back over the Second Reading debates in both Houses on what became the 1977 Act. I have also read the literature that most noble Lords received in the course of the earlier discussions. I have since read some recent newspaper articles on the subject and I have tried very hard to find it in my heart to support the motive behind the Bill.
However, I must confess that what I have read disturbs me even more than my first examination of our Second Reading debate. I was then concerned that there had been no reply to the questions put forward by my noble friend on the problems of the National Health Service. I shall return to that later in the Committee. I am seriously concerned about a number of matters. One of these—it is the reason for my tabling the first amendment—concerns the retrospective nature of the legislation. There has always been discussion and fierce argument about retrospection in any legislation. It seems that a number of anomalies will be created if the legislation goes through as it is without my amendments. I wish first, to reduce the damage that might be done to the National Health Service.
Amendment No. 1 changes the date from which the Bill applies so that it affects only patents which, up to the date of commencement, will not be available for licences of right and for which valid applications have not been made. By deleting the reference to "17th December 1986", the amendment removes one of the most undesirable retrospective elements in the Bill, and treats all applications equally. For this reason I hope that the noble Viscount, Lord Craigavon, who made very similar comments during the Second Reading debate, will be able to support the amendment that I am moving tonight.
A further and even more important benefit arising from Amendment No. 1 is that the National Health Service would be paying less for some of its drugs in the late 1980s than would otherwise be the case. I shall say more about that matter when we deal with a later amendment.
Amendments Nos. 3 and 5 are consequential on the first amendment and I do not have too much to say about them. However, Amendment No. 3 seeks to ensure that a reasonable time limit is placed on patentees so that, if they intend to file declarations under the Bill to prevent licences of right becoming available, they must do so within the time specified by the Secretary of State. I believe that this will help to remove uncertainty and will establish a more ordered framework for the whole pharmaceutical society. Amendment No. 5 simply proposes drafting changes which are a consequence of the earlier amendments.
I hope that these modest and constructive amendments, and the spirit in which I have spoken, will persuade the sponsor that he could quite readily accept the amendments and incorporate them into the Bill. I beg to move.
Viscount Craigavon: First, I am particularly glad that the noble Lord, Lord Denham, is present to listen to this debate on the very important issue of retrospection. I have a fairly long speech to make, but, having said that, I do not expect the noble Lord to stay throughout my remarks. I hope that he will be able to read my speech in Hansard as I think that this is a very serious matter.
I should like to speak to my Amendment No. 2, which is very similar to Amendment No. 1. As with the amendment of the noble Lord, Lord Stallard, I seek to provide a clear, simple date—namely, the date
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of commencement—from which this Bill becomes effective. The very complicated transitional provisions can then be abolished. The small but significant difference between my amendment and that of the noble Lord, Lord Stallard, is that once commencement has occurred, no products which come into the licence of right in the following year can be claimed for licensing.
The consequential amendment for me, as for the noble Lord, Lord Stallard, is that the existing complex transitional provisions of the Bill in subsections (4) and (5) are thereby rendered unnecessary. For the same reason the new subsections (4) and (5) being offered in Amendment No. 6 are also unnecessary. We shall be dealing with that amendment in due course, but because I am dismissing it as unnecessary for the purposes of my argument here, I should like to say that I am grateful to the ABPI for apparently labouring long and hard to come up with an amendment to meet a particular problem which I raised at Second Reading concerning possible unfairness between generic companies.
I understand that it has been difficult to find a comprehensive solution to the problem. I hope to show that while I accept the spirit of what is being offered, I am advised that Amendment No. 6 being put forward by the noble Lord, Lord Northfield, is both ambiguous and contradictory as well as being difficult to understand.
I mention this fact now to emphasise that all these difficulties of transitional provisions would evaporate if we adopt the clear and simple date of commencement as it is being offered in Amendments Nos. 1 and 2.
I shall hope to show that the prime reason, and the overriding reason, why we should adopt the date of commencement as the trigger for this Bill is that that is what the established practice of parliament requires of us.
I have taken the highest and best advice on this matter that one can in this House. The more I have thought about it, the more surprised I am that anyone, let alone myself, is having to advocate in this Committee and in this detail one of the basic assumptions of parliamentary life; namely, the laws we pass only take effect when the Sovereign has given the Royal Assent.
Clearly, there are exceptions to this which we all know. But, underlying them are very limited parliamentary considerations which can be properly adduced against the general presumption of the effective starting date of a Bill being after the Royal Assent. To go against that, reasons have to be compelling—not compelling in equity but compelling for proper legal and parliamentary reasons. Later, in order to support this general presumption, I am going to quote a very authoritative passage from a speech made by the noble Lord, Lord Lucas, in April of last year in answer to the noble Lord, Lord Northfield on exactly this issue.
I have said that there are exceptions to the general presumption against retrospection. An example would be budget or tax changes which traditionally can date from the date of announcement. Another example would be legislation to correct a loophole, or where the

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nature of the problem being corrected by the Bill would lead to general mayhem if the problem was stated in a Bill and the solution was not to date from the same time.
The fact that I had been involved in a planning Bill in this House quite recently, where this was the case, was partly responsible for my not mentioning the issue now before us on Second Reading, although I did ask that the cut-off point be related to the passing of this Bill.
I should like to apologise to the Committee for the length of this intervention and I am afraid I still have some way to go. I should explain that what I am proposing in my amendment is very simple and clear-cut. But what I am now going to have to take time to rebut is the use in the Bill (as it now stands) of the effective starting point of 17th December, 1986—that is the day it was published. That fact is contained rather opaquely in the transitional provisions of subsections (4) and (5) in Clause 1.
To come to the point, the effective dating in this Bill amounts to retrospection. I know that the noble Lord, Lord Northfield, wants to resist that appellation. I know that the noble Lord said on Second Reading at col. 466 in Hansard that there is no retrospective legislation involved in this Bill. He resisted the use of that word in this context when I personally mentioned my concern to him about this matter over a week ago. I hope that with his immense parliamentary experience he would not be embarrassed to use the word in the same way as is customary in this building. I shall be quoting the noble Lord, Lord Lucas, in a minute to show how his use of the word corresponds to the normal parliamentary practice that I am going to follow.
On reflection, my thoughts are drawn along the line that the more the noble Lord, Lord Northfield, resists the normal parliamentary use of this word, the more he has to cover up. The stupid thing is that we do not disagree on the date we are talking about. This is only a semantic disagreement, but it will make the debate confusing for anyone following it, and this debate has yet to continue in the House of Commons if the noble Lord, Lord Northfield, continues to use his own private definition of "retrospection".
I am prepared, and this Committee should be prepared, to listen to the arguments put forward by the noble Lord, Lord Northfield. One has already had a colourful and robust preview of those arguments in Hansard in April of last year when the Patents, Designs and Marks Bill was going through its stages in this House. At that time the noble Lord, Lord Northfield, was using that Bill as a vehicle to which to attach similar provisions to those which the present Patents (Amendment) Bill seeks to achieve. It was on that Bill in April that the Minister gave, and reaffirmed, the Government's commitment to the central provision of the Bill before us.
It will be my case in the next few minutes that although the Government, through the Minister, were giving that central commitment, in absolutely no way and at no stage was anything said by the Minister that could support any element of retrospection in the present Bill. In fact the opposite is the case. The Minister went out of his way, as I shall show, to say
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that he could not prejudge the matter of the date when the proposed measure should become effective. One of the major reasons he gave was the need for consultations, and I shall have quite a lot to say about consultations in a minute.
To substantiate what I have said, perhaps I may now turn to the record in the Lords Hansard of 22nd April 1986 of the Report stage in this House of the Patents, Designs and Marks Bill. The noble Lord, Lord Northfield, was trying to tack on to that Bill roughly what is in the present Bill, but what I am focusing on now are the various ways in which he tried to persuade the Government to give immediate effect to those provisions. In other words, even at that time the date at which these present provisions were to come into force was a prime issue for the noble Lord.
He was resisted for good reasons, as will be seen, by the Minister, the noble Lord, Lord Lucas. The noble Lord, Lord Northfield, started with some rough words for the generic producers. He called them, in col. 1125:
"'pirates'—the copiers of drugs; and some call them parasites".
The noble Lord, Lord Lucas, put him right at col. 1136 in saying:
"However, one must accept that there are two sides to be considered. Whatever anybody may think of what, if I may use my term. I call copyists rather than parasites, they have made preparations in good faith, and within the law, to seek licences and to exploit the inventions."
Directly after his mention of "pirates" the noble Lord, Lord Northfield, was asking for time to consult the industry, and telling us how important that was. Unfortunately for the noble Lord the difficulty and paradox for him was that the ABPI has actually quite a lot of "pirates" in its membership, and in fact he was proudly telling us at the Second Reading of this Bill that his organisation represented 90 per cent. of the "pirates" or "copyists"—that is, the generic producers.
That is the central dilemma to what is under discussion; namely that the ABPI is trying to represent two groups with radically conflicting interests. I nearly said that it tried to hold the ring, but in practice the big pharmaceutical companies are virtually dominant within the ABPI, as one might guess from hearing the noble Lord, Lord Northfield, representing their views.
Within the ABPI, I understand, the generic companies can be represented on a committee which meets about every two months and whose members are drawn from what is called the Standard Formulary Medicines Register. The dilemma arises when the noble Lord, Lord Northfield, tells the House or the DTI that he has consulted the ABPI. What, if anything, has got through in this process to these representatives of the generic sector? On matters in this Bill the answer is usually: precious little or nothing. The committee was not consulted about any transitional dates in the Bill; nor, as I understand it, was it formally consulted about the Bill itself.
The Bill itself has been in the background generally for some time and I understand that, individually, generic members take a reasonable and pragmatic view and accept what has happened, at least about the general principle, but not about the activating date of the Bill, about which they were never consulted by the

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ABPI. That is how I came to say on Second Reading that my friend, who is managing director of probably the largest generic company, Evans, supports the general principle of this Bill.
I am not unsympathetic—nor are Evans—to the basic case as put forward on many occasions and in the Official Report of 22nd April 1986 by the noble Lord, Lord Northfield. If I may say so, he puts up a good fighting case on many points. However, what I do resist, as did the noble Lord, Lord Lucas, on 22nd April, is any attempt to "bounce" us—that is, your Lordships—into precipitate action against the better judgment of your Lordships and against your established traditions and practices.
In the debate on 22nd April the noble Lord, Lord Northfield, tried various devices to get what he wanted as soon as possible. The noble Lord, Lord Lucas, rightly resisted him. The noble Lord, Lord Northfield, put down an amendment calling for a statutory instrument to contain transitional provisions made by the Secretary of State. The Minister called that a little disingenuous—a foot in the door approach. He suggested that the powers of the Controller of Patents could be modified.
More importantly, at col. 1134 of Hansard the noble Lord asked whether the Government could help the industry that day, 22nd April. I quote:
"that the Government can announce today that the repeal legislation will cover any patents endorsed for licences of right from today's date."
Why did the noble Lord, Lord Lucas, resist these appeals and this intense pressure? The answer is in col. 1137 of Hansard, in a direct quote from the Minister which I have been trailing in this speech. There he enunciates his views, and presumably those of his department, on retrospection. I quote the Minister's answer in reply to the noble Lord, Lord Northfield:
"He asked me to give a commitment that the legislation will be as from a certain, particular date. That would be wrong in principle. There are of course precedents for legislation to be retrospective to the date of announcement but most of the instances of which my officials have been able to advise me are measures that affected the relationship between the Government on the one hand and the public on the other. I suggest that it is a different matter where the change would alter the balance between two groups of private parties."
If I may pause in the quotation, I should like to underline that last sentence and say now how much more hesitant one should be where the Bill is introduced by one of those private parties. The noble Lord, Lord Lucas, continued:
"Before we did that, we should have to consult. It will be necessary to do that, particularly on the question of the transitional arrangements, because any other announcement would prejudge that issue. We must decide what should be done about existing licences, about existing applications for licences and about patents already endorsed as licences of right. Any announcement that I might make today would, I believe, prejudge the answers. What I can say in that context is that we will set in hand at the earliest possible time within this year those consultative procedures, but they will not be dealt with in a short time, because there are a number of people who wish to give us their views.
Finally, I say to the noble Lord in that context that if I went further it would be unfair to applicants now because any announcement of a patent becoming endorsed in the future would by its very nature leave the endorsement retrospectively removed. That would he unfair to those who have in good faith already applied for a licence and made preparation".
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The noble Lord, Lord Lucas, has emphasised the need for consultation. As I explained earlier, no consultation took place with generic companies about transitional provisions through the ABPI. This was the stage when the generic companies were referred to as pirates and parasites.
So it is quite clear that 22nd April passed with no assurances about dates, and the first the generic companies knew about transitional provisions was when they read them in this Bill. The first time that the generic sub-committee was therefore able to discuss this matter was at a committee meeting in January 1987. In the meantime, they had naturally been spending considerable sums of money on developing products for the future in the reasonable expectation that there would be some warning before new provisions came into force. Had the Minister not emphasised the vital importance of consultations? Your Lordships may be pleased to know that I am now coming to the home straight—
Lord Denham: I hope that the noble Viscount, Lord Craigavon, will realise that he has now been speaking on this amendment for rather longer than he took on his Second Reading speech, which is not basically what we do in your Lordships' House.
Viscount Craigavon: I am extremely sorry. I was ignoring the clock and completely mistimed myself. Perhaps I may finally say that, for parliamentary reasons which I have not been able to go into, I should like to recommend that the Committee stick rigorously to the requirement that the date of commencement stems from the date of Royal Assent.
Lord Beaverbrook: Perhaps it will be for the convenience of the Committee if I speak to Amendments Nos. 1 and 5, and Nos. 2, 4, 7 and 3, at this time, and I shall be fairly brief. With regard to Amendments Nos. 1 and 5, these amendments would allow anyone to obtain a licence of right on any patent which had already entered its sixteenth year at the date of commencement of this Bill. For patents which had not passed the end of the fifteenth year at commencement, licences of right would not be available if a declaration was filed. These amendments therefore have the attraction, not present in the Bill as it stands, that if there is any opportunity for a licence of right on any particular patent it is equally available to all. The amendments would, however, prevent declarations being filed in respect of older patents for which no licence had yet been sought. This may not be entirely fair to the patentees concerned. However, the Government feel that this is a subject to which the House could possibly return on Report.
With respect to Amendments Nos. 2, 4 and 7 of the noble Viscount, Lord Craigavon, it seems fair that patent proprietors should have the opportunity to get their declarations in place before their patents become subject to licences of right. Amendment No. 2 would deny them this opportunity. I think therefore that the Government really could not support that amendment. The consequence of Amendments Nos. 4 and 7 would be to cause the Bill to have an effect on licences of right that are in force today, and again the Government could not support a measure that would involve a deprivation of existing rights.

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The noble Lord, Lord Stallard, and the noble Viscount, Lord Craigavon, mentioned a reference to retrospection in the Bill. Our view is that the Bill is not strictly retrospective, but the Government agree that the date at which the Bill bites is something which must be looked at again. With regard to consultation, the ABPI have been consulted on the exemption of pharmaceutical patents from licences of right in addition to individual independent generic pharmaceutical companies.
With respect to Amendment No. 3, at this stage the Government feel that this is a matter to which we can perhaps return at a later stage. However, we do not have a firm view at this time.
Lord Northfield: I shall also be brief. I shall deal with the point concerning retrospection by saying that it all depends on what one means by the word "retrospection". Normally, it means that one is providing for something that occurred before a Bill even started its passage. In other words, one had no notice of it happening and one goes back into the past to change something, to regularise something; or whatever the case may be. There is in fact no retrospection in this Bill. All that happens is that it states that the starting date is the date of publication of the Bill.
If I may continue from there, the noble Viscount, Lord Craigavon, seemed to contradict himself. He stated that people ought to have made arrangements in good faith and should therefore be given further time. He then went on to say that they knew that this Bill had been in the background for some time. Everyone has known that this Bill was coming and—
Viscount Craigavon: Will the noble Lord—
Lord Northfield: I do not want to give way. I shall not be anything other than absolutely brief. This Bill has been in the background for a long time now. It seemed only fair, since the Government said last April that it was time this matter was repealed, that the right date to start—everyone having had a lot of notice—should be when the Bill was published. Otherwise, all sorts of things would begin to happen between now and the passage of the Bill which would waste a great deal of time and money and start further legal cases.
As regards the views of the noble Lord, Lord Lucas, in April, I accept immediately that he may well have said that he could not see the case for this sort of starting date. We have spent much time since then trying to convince the Government on this point. My hope was that we had succeeded. However, that may not be the case.
I wish to bring this matter to a conclusion in this way. As the noble Lord, Lord Beaverbrook, said on behalf of the Government, there are some matters surrounding the whole problem of the starting date which need to be looked at between now and Report stage. However, some of the amendments proposed by the noble Viscount could not possibly be accepted because they will not have the effect which he hopes they would have.
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Perhaps the best thing to do is to say that I give a full assurance that between now and Report stage, leaving ample opportunity for everyone to come into the picture and to be consulted, there will be wide consultations with the Government. Industry, for example, needs to consult the Government on the whole matter that has been raised. I therefore hope that if I give the clear assurance that there will be time at Report stage to go into these matters thoroughly, noble Lords will withdraw the amendments.
Lord McIntosh of Haringey: As always, when speaking from this Dispatch Box on a Private Member's Bill, I wish to state that there are certain matters on which I speak in a personal capacity, and certain matters which I believe are matters of the policy of my party and on which I shall not speak in a personal capacity.
I regret to say that in the first category falls the issue of retrospection. I have listened with great attention to the noble Viscount, Lord Craigavon. He has certainly convinced me not only that he has a case but also that it is unreasonable and wrong for a Bill of this kind to seek to ensure that it takes effect from publication rather than from Royal Assent. He appears to have convinced the Government that they should take no view on the matter at this stage. To that extent I believe that, whatever he may do about his amendment, he has made out a reasonable case.
The matter that concerns the Opposition is the matter of cost to the National Health Service. It must be obvious—
Lord Northfield: With respect, that is not really on this issue. If that matter is to be raised, it should be done on "clause stand part". It has nothing to do with these amendments.
Lord McIntosh of Haringey: The issue of the starting date of the effect of the Bill is very much an issue of the cost to the National Health Service. We are talking about a finite period of time in any case and if that finite period is—
Lord Northfield: My noble friend is—
10.45 p.m.
Lord McIntosh of Haringey: I shall gladly give way. If my noble friend wants to make comments from a sedentary position, that is his privilege. I shall give way to him if he wishes his comments to be put into the record.
The issue with which we are faced here is the issue of the finite period of time in which the licences of right are to be abolished. If that period of time is to be reduced the effect of the Bill will therefore be reduced. Unless it can be shown firmly and without contradiction that the Bill does not involve additional cost to the National Health Service, then a reduction in the time of effect of the Bill is to the benefit of the National Health Service and is in accordance with the policy of my party.
Therefore I state as clearly as I can that any delay in the introduction of the Bill is in the interests of the National Health Service and in the interests of my

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party. I would vote for any such amendment. It is no use saying that as an assertion, as the Association of the British Pharmaceutical Industry seeks to do. It is necessary to give evidence. It is necessary above all for my noble friend who introduced this Bill to give evidence for his assertion that there is no cost to the National Health Service.
That assertion has been made solely on statements from the Department of Health and Social Security. The department gives no evidence for the assertion and when the assertion is challenged by an independent report from the respected Henley Centre for Forecasting commissioned by an interested party—I make that clear—which gives the opinion, calculates it and gives the reasons for it, that the cost to the National Health Service could be anything from £50 million to £190 million, with a most likely figure of £110 million, then it is the responsibility of the Department of Health and Social Security and of my noble friend to give evidence to refute those figures. No such evidence has been given.
Indeed, in the Financial Times this morning the Association of the British Pharmaceutical Industry simply commented—it may have been quoted wrongly and if this is wrong I shall gladly be corrected on it:
"There is no way these figures can be right. The changes would be cost-neutral or on a worst case would cost the National Health Service between £5 million and £10 million a year".
If the Association of the British Pharmaceutical Industry, which is, in effect, promoting this Bill, admits the possibility that there will be a cost to the National Health Service of between £5 million and £10 million a year, I ask myself what is the difference between its figures and those from the Henley Centre for Forecasting. Even if one accepts the figures of the Association of the British Pharmaceutical Industry, this Bill cannot be acceptable, and any amendment which seeks to reduce the finite period in which it takes effect must be preferable to the Bill as it stands.
On that basis, whatever arrangements my noble friend may wish to make for consultation between now and Report stage, I suggest to my noble friend Lord Stallard that it is proper for him to pursue this matter.
Viscount Craigavon: Before the noble Lord, Lord Stallard. decides what to do with the amendment, I should like to say on Amendment No. 2 that I accept the suggestion of the noble Lord, Lord Northfield, that this could be talked about during the coming weeks. The noble Lord accused me of contradicting myself. I am afraid that he completely missed my point, in that I said that everyone knew about the Bill and knew that the Bill was likely to come forward. What was not reasonably expected was the transitional date and the effective date with which we have ended up.
Lord Northfield: The issue of the cost of the Bill has been one of the difficulties, because my noble friend on the Front Bench would not accept the assurances that were given by me at Second Reading in quite deliberate words in cols. 449 and 450 of the Official Report, and also did not accept the statement made in support
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of me by the noble Lord, Lord Lucas. I find that very strange, but if that is the way he wishes to go about the matter, I shall not complain except to say that those are not my standards. He now produces a report by the Henley Centre which is apparently intended to contradict what I say.
I should like to make several observations about that report. First, it gives no figures for the basis of its calculations. It does not take the starting point and does not take us through the figures. Secondly, it is based on a crude projection of today's situation. He admitted that the report has been spatchcocked together in a week or two. It is based on a projection of the present situation. It does not take into account, as the industry and the Government have had to take into account, the actual drugs that will become subject to licences of right in the next two or three years, to the end of the decade, and make a projection on that basis. It is a crude analysis.
Thirdly, the report refers to figures which nobody else will ever agree. It talks about using the discounts on these generically provided drugs as 30 per cent. to 50 per cent. The normal figures in the industry at present are 5 per cent. to 20 per cent. That ruins the basis for most of the calculations. I could go on in more detail. The main issue is that the Henley Centre itself says at the beginning of this document that it makes no allowance for the operation of the pharmaceutical price regulation scheme. That is the whole point about the situation.
What my noble friend has never realised, although I must have said it six times, is that the pharmaceutical price regulation scheme operates to set a limit on the cost and profits of drugs charged to the National Health Service. This means that if the pharmaceutical companies were to make more profits on these particular drugs they would then have to reduce profits elsewhere in order to remain under the ceiling provided by the pharmaceutical price regulation scheme. That is the simple point and the Henley Centre says quite frankly in its analysis that it has taken no account of that overriding factor.
That is the position and everyone is agreed on what must be the basis for the future. Nobody has any intention of allowing the ceiling that is provided under the pharmaceutical price regulation scheme to be breached. The Government are in a position to enforce that. The scheme is keeping costs and profits on drugs supplied to the National Health Service below the average return to manufacturing industry. That is an extremely important point. There are no excessive profits being made out of drugs sold to the National Health Service. The Government, in promulgating the new pharmaceutical price regulation scheme, have admitted that and have said that over a period of years the large profits should be brought nearer to the average for manufacturing industry. They are at present below it. However, no matter where they are, the fact is that a ceiling is imposed by the pharmaceutical price regulation scheme. As I said, any extra profits that might be made on these particular drugs will have to be balanced elsewhere in order to remain within that ceiling. That is the simple position that my noble friend refuses to recognise.

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I give one other point which perhaps is worth making. My noble friend has produced a document which, quite properly, was produced by the Henley Centre in a very short time. Does he really think that he can set that document against a study by the Department of Health and Social Security and the Department of Trade and Industry which has been going on since 1983? Since 1983 the Government have been pressed by the industry for this repeal. The Government have been studying this repeal for four years. Finally, after three years' study, they said "We think you have made the case and we think, within that, we can say quite happily that there will be an insignificant"—I deliberately use that word—"effect on the cost to the National Health Service." Frankly, in view of the admitted defects in the Henley Centre's report—the absence of allowance for the operation of the price regulation scheme and the other points on which I could have elaborated even further—I hope that nobody will set that report against the three or four year study by the departments of state that are reasonably concerned in this.
Does my noble friend really think that the Department of Health and Social Security, pressed for money at every turn at the moment, is going happily to countenance some figure like £100 million extra being spent on drugs, given the squeeze on its general budget? He must be joking; he really must be joking.
The answer broadly is—and I hope the Minister will say a word to complete what I am saying—that the Henley Centre has enormous limitations. It has never been discussed with the industry. It is not based on projections of what is actually going to happen in terms of particular drugs coming up for licensing in the next four years. It does not claim to be that, and it of course has left out the effects of the price regulation scheme.
In all those circumstances, I hope that we can get on with the Bill on the basis that we are very happy indeed to look at the other problem, which is that there is a problem with the starting date of this Bill, if my noble friend has made his point, and if the Government upon reflection, and having heard these speeches, think that the date should be altered, I am quite prepared to discuss that before Report stage and I hope we shall then reach an amicable agreement about it.
Lord McIntosh of Haringey: I am very pleased that my intervention has encouraged my noble friend to say a little more about the evidence for and against the assertion that there will be no significant increase in cost to the National Health Service. I listened with care to what he said about the report of the Henley Centre for Forecasting. I would be the first to admit not only that it has been commissioned by parties who have a pecuniary interest in the matter, but also that it has been produced in a great deal of hurry. The point that must be made is that it is the only analysis that has been published on this matter.
My noble friend refers to three years of discussions between the departments and the industry. The results of these discussions have not been published. I asked the Association of the British Phamaceutical Industry before the Second Reading debate if they would give me evidence for their assertion that there is no
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significant cost to the National Health Service. I have not heard a single word from them from the time of the Second Reading until now. If these conclusions are as convincing as my noble friend suggests, I would have expected that such arguments would have been presented to me before now because although I did not raise objects at Second Reading, I certainly asked questions. Those questions have not been answered at any stage.
The fundamental point that my noble friend makes is that of the operation of the pharmaceutical price regulation scheme. As I understand it, this scheme is designed to ensure that the profits from the National Health Service to the pharmaceutical industry are maintained at a level, and no more than a level, which will protect the research and development support which the pharmaceutical industry quite properly demands. That is the fundamental interest to the National Health Service certainly. If they have any other interest it is to grind the prices down as far as possible, but they are properly concerned about research and development support for current drugs.
The point about this legislation is that it refers only to drugs which were patented in 1977 and earlier, and therefore has no effect whatsoever on the current research and development effort by the drug industry. It would merely provide a windfall profit for the drug manufacturer. Those are the facts of the matter. The arguments of my noble friend have not shifted my views in any respect.
11 p.m.
Lord Northfield: That is because my noble friend does not want to listen. That is the real answer. If I tell him that the report to which he refers is shot through with basic inconsistencies and is admitted to be a broad brush approach and therefore reaches extraordinary conclusions, he does not take any of that into account. He does not take into account the ceiling that is put on the whole situation by the pharmaceutical price regulation scheme. In other words, he ony listens to what he wants to listen to. That is the difficulty of someone who is quite new to the industry and knows nothing about it, being pitchforked into the middle of this discussion.
I would come to his point about whether this is a windfall profit. It is not. What my noble friend is doing—and he has done it before and I object to it very strongly—is that anything that helps private enterprise is bad. It must be questioned; it must in some way be exposed and be shown to be evil.
This reallocation of profits between the generic producers and the original producers, which is what this Bill is about, in some ways is erected by him into a great bonanza for the original producers. It is nothing of the sort because of the operation of the price regulation scheme. It is a pity that my noble friend does not realise that the purpose of the Bill is to encourage companies to invest in research and development in this country. This is the only country in the advanced world—I do not know about those which are not advanced—in which a 20-year patent life is subject to a four-year licence of right in its last four years. It is the only country in which the industry is being hobbled in this way. We are the only country to do this.

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We are trying to say that it is only fair to return to Parliament's intention of 20 years ago, now that patent life in general has been so grossly eroded by the Government—and is accepted to be so—and it is better to go back to the original intention and admit that it has been wrong to hobble companies in these past four years, because it is a deterrent to future research. Companies that are looking around the world for research can now choose their location very easily. If difficulties are put in their way, such as this sort of legislation, more and more they will think twice about investing in the United Kingdom. I am sorry that my noble friend is so bitterly anti-private enterprise. It makes me very much ashamed of what he had to say.
Lord McIntosh of Haringey: It would be improper to continue a "duellogue" between my noble friend and myself. I shall not do that. I have a very thick skin. However much I may resent some of his remarks and the motives which he imputes to me, I think it would be improper for me to pursue them at this Dispatch Box. In regard to the international comparison that he makes, I say merely that, for example, the United States retains only a 17-year patent life and that in Germany the patent life before 1978 was only 15 years although it has now been increased to 20 years.
Lord Northfield: It has been increased in the United States. My noble friend knows nothing about the matter.
Lord McIntosh of Haringey: My noble friend makes remarks about my awareness of the pharmaceutical industry. He is quite right. Two weeks ago I knew very little about the pharmaceutical industry. Since then I have learnt a great deal, and what I have learnt is not very much to the credit of many of the people concerned.
Lord Northfield: I shall not detain the Committee very much longer. My noble friend's remarks show the depths of his ignorance. The United States has just increased pharmaceutical patent life by a further five years to cope with exactly the problems that lie behind patent life exclusion. Japan and other countries are considering doing exactly the same. My noble friend really ought not to keep talking about something that he knows nothing about.
Lord Beaverbrook: Very briefly, the pharmaceutical price regulation scheme, as mentioned by the noble Lords, Lord McIntosh and Lord Northfield, sets a ceiling on a company's profitability. The Department of Health and Social Security examines critically the individual costs of each company and the department cannot see the abolition of the licence of right provisions producing additional costs to pharmaceutical companies, and thus furthering the need for price increases on other products.
I too have read the report in today's Financial Times and I find it difficult to accept the estimate quoted by the Henley Centre. The advice that I have received from the Department of Health and Social Security is
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that there will be no significant impact on National Health Service costs by the abolition of the licence of right provisions.
Lord Tordoff: Can the noble Lord put a number on "significant" in that situation?
Lord Beaverbrook: I think that it would be wrong for me to do so at this stage because the report was published in the paper only this morning and we have had only a short time in which to look at this matter. But the position is that we feel that it would be broadly cost equivalent. There would be no basic change.
Lord Tordoff: The noble Lord will be aware that the bottom line of the Henley forecast is £50 million. Does he regard that figure as significant or is he saying that the Government's view is below that figure?
Lord Beaverbrook: The Government would regard £50 million as being significant.
Lord McIntosh of Haringey: How do the Government regard the £5 million to £10 million which the Association of the British Pharmaceutical Industry considers as being its worst case? Does the noble Lord consider that to be realistic?
Lord Beaverbrook: I have gone as far as I can. As I have indicated, we have looked at this matter today and I think that the best I can do is to say that we continually review the position. We believe that there would be very little, if any, change in the costs.
Lord Northfield: In reply to the noble Lord. Lord Tordoff, the answer is this. If nothing is done in certain circumstances and certain drugs and consumption patterns emerge and are allowed to occur, one could have a small increase. If one balances that by saying: but the pharmaceutical price regulation scheme insists that this be kept constant because of the agreement that there be a ceiling, that wipes it out and adjustments must be made to counteract it. It is the working of the PPRS that would hold back an increase, if such a thing happened, although the calculations show that the effect is more likely to be neutral anyway.
Lord McIntosh of Haringey: Then why is the Bill being promoted?
Lord Stallard: If I said that this had been a fairly ragged debate, I should be very kind. It has moved a long way from the simple amendment that I moved, to discussing retrospection and the date of implementation of the Bill.
I was very heartened to hear the speech of the noble Viscount, Lord Craigavon, although he was interrupted by the noble Lord the Chief Whip. I thought that he was making a perfectly reasonable case against retrospection and in favour of the fact that the Bill should not commence before the dates that he and I suggested. There is, indeed, not much between us.
I was a little put off by my noble friend Lord Northfield when he seemed to imply that nobody who is not an expert in the pharmaceutical industry has any right to take part in the debate.
Lord Northfield: I was talking about costs, not about this issue.
Lord Stallard: I accept that, because I said that I was not an expert.
My noble friend said at one stage that people are in discussions, and this was a point that both I and the noble Viscount, Lord Craigavon, made. He said that that is fair, people are in discussions and these things are going on. But after all, he said, they ought to have known, because they expected the Bill and, therefore, in his view ought to have been further advanced than they are; there ought to have been a cut-off date and that was the justification for the retrospective element.
I considered the debate on Second Reading. I would dispute that the people who were involved most deeply could reasonably have expected that there was a Bill immediately in the offing. It was very doubtful at one stage. My noble friend Lord Northfield on 12th January 1987 at col. 446 in the debate on Second Reading quoted the noble Lord, Lord Lucas who, on 14th April, pledged to repeal the licences of right provisions. He referred to the Bill that would deal with the intellectual property rights. My noble friend Lord Northfield said:
"That was a Bill we were all expecting this session."
But it did not come in this session. Why would people be expecting the Bill if it was not in the Queen's Speech? There would be no panic to carry on with the negotiations and discussions at that stage if there was no Bill in the Queen's Speech, so it could not really be expected in this session.
My noble friend said that the noble Viscount, Lord Whitelaw, wrote to him on 25th November—that is not very long ago; only a few weeks, if one takes into account the recess—and informed him that,
"the question of a short Bill on licences of right is being considered."
It is still not a definite thing if one is talking about discussions going on. I do not think one could be faulted for not being wholeheartedly in the midst of discussions on the basis of these assumptions which might not be correct. The noble Viscount is quoted as having said:
"'The latest position is that such a Bill can indeed be detached from the Intellectual Property Bill and the Government hope very much that it could go through this session as a Private Member's Bill'"
Those were further complications. The noble Viscount hoped that the Bill would be taken up in the ballot for a Private Member's Bill in the Commons. It was a very haphazard, slap-happy suggestion to say that. Who would say that, on such a basis, people ought to have embarked on further deep discussions in the hope that they might win? People in business do not react like that. They might make some contingency plans, but they would not be expected to go into deep discussions on the basis of a raffle in the House of Commons. The raffle, of course, did not come off, and they did not win the Private Member's Bill ballot.
The Minister then suggested to my noble friend that he might like to take up the matter in this place. He did, and this Bill is the result. It is not fair to say that there was plenty of notice that a Bill was expected. It was doubtful until my noble friend Lord Northfield took up the matter whether there was to be a Bill.
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When he introduced it he expressed regret that it was a Private Member's Bill and not a government Bill. I support that view wholeheartedly. It should have been a government Bill. We should not have been put in this position and neither should the business interests and the people involved.
The date being fixed as it is has worsened the position. It is not fair to say that people have had sufficient notice of this Bill. That is not true. My noble friend said that he considered that retrospection related to before the Bill started its passage. I do not accept that as a definition of retrospection. If any date before Royal Asssent is used, the measure must be retrospective. It does not have to be before the Bill started.
The Bill started on 17th December and it will not be through until some time after Easter. That the starting date goes back to 17th December is good enough for me with regard to retrospection. I do not think that the argument for retrospection was made out. I listened carefully to the Minister, who seemed to accept and then reject the amendment. He was looking for a way to push it to one side. The matter is ragged and unacceptable. I am in a worse state now than when I moved the amendment.
There was a discussion about National Health Service finance. I have only one point on that. My noble friend Lord Northfield said that my noble friend Lord McIntosh should not be quoting the Henley Report because it was rushed and could not be based in anything concrete because the figures were picked out of a hat.
Lord Northfield: I did not say that.
Lord Stallard: My noble friend implied that the figures could not be based on a study similar to one that had taken place in the DHSS.
Lord Northfield: I did not say that.
Lord Stallard: The figures were not to be reckoned on the same basis as those of the detailed study—I accept that there must have been detailed study—in the DHSS. When challenged by the noble Lord, Lord Tordoff, the Minister could not produce a figure for the word "significant". If there have been detailed studies in the DHSS, the Minister should be able to say something more than "significant", or the argument falls. I am completely dissatisfied and almost disorientated by the replies and the cut and thrust that there has been.
Lord Beaverbrook: I do not believe that the Committee would expect me to stand here and agree to considerable extra expenditure by the DHSS. When I say that the expenditure involved would be broadly neutral, the Committee should consider that that is our view and it is what we mean.
Lord Stallard: I accept that that is the Minister's view. "Significant" or "broadly neutral" would mean much more if there were a figure attached. I do not know what "broadly neutral" or "significant" mean in this context. We must have a figure or it becomes doubtful whether the matter has been studied in the detail that it should have been.

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I know how health departments work. There is a mass of statistics and figures. They look at everything upside down four or five times. The proposal goes round and round departments for months and months, so they have figures. At the end of the day they add up all the figures and say, "Equals significant" or "Equals broadly neutral". There should have been a figure. There is no figure and I am still dissatisfied. I am inclined to test the opinion of the Committee on Amendment No. 1.
The Deputy Chairman of Committees (Lord Airedale): The Question is that Amendment No. 1 shall be agreed to. As many of that opinion will say, "Content"? To the contrary, "Not-Content"? I think the Contents have it.
Lord Northfield: Not-Content.
The Deputy Chairman of Committees: I collected the voices and it seemed that the "Contents" have it.
Amendment agreed to accordingly.
[Amendment No. 2 not moved.]
Lord Stallard Lord Stallard moved Amendment No. 3:
Page 1, line 24, at end insert ("and within the prescribed time limits")
The noble Lord said: I beg to move.
11.11 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 2; Not-Contents, 2.

DIVISION NO. 1

CONTENTS

McIntosh of Haringey, L. [Teller.]

Stallard, L. [Teller.]

NOT-CONTENTS

Hacking, L. [Teller.]

Northfield, L. [Teller]

11.22 p.m.
The Deputy Chairman of Committees: As it appears that fewer than 30 Lords have voted, in accordance with Standing Order No. 5 I declare the Question not decided, and the further proceedings on the Bill stand adjourned.
House resumed.
House adjourned at twenty-four minutes past eleven o'clock.

  UNIVERSITY AND POLYTECHNIC STUDENT COSTS
  UNIVERSITY AND POLYTECHNIC STUDENT COSTS
  FOREIGN AND COMMONWEALTH CASH AND RUNNING COST LIMITS
  FOREIGN AND COMMONWEALTH CASH AND RUNNING COST LIMITS
  DANVERS STREET, S.W.3: PLANNING APPLICATION
  DANVERS STREET, S.W.3: PLANNING APPLICATION
  SEVERE WEATHER PAYMENTS: CLAIM FORM WORDING
  SEVERE WEATHER PAYMENTS: CLAIM FORM WORDING