Sitting of 19 January 1987

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

ROYAL ASSENT
Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Gairloch Harbour Order Confirmation Act 1987

2. Shetland Islands Council (Ham Voe, Foula) Order Confirmation Act 1987

PRIVATE BUSINESS
  ADVOCATES' WIDOWS' AND ORPHANS' FUND ORDER CONFIRMATION
  Mr. Secretary Rifkind presented a Bill to confirm a Provisional Order under section 8 of the Private Legislation Procedure (Scotland) Act 1936, relating to the Advocates' Widows' and Orphans' Fund: And the same was read the First time; and ordered to be read a Second time on Tuesday 27 January and to be printed. [Bill 45]
Oral Answers to Questions
  WALES

    Opencast Mining
    Mr. Colemanasked the Secretary of State for Wales what recent discussions he has had with the chairman of British Coal about opencast mining in south Wales.
    Mr. Livseyasked the Secretary of State for Wales what recent discussions he has had with the chairman of British Coal about opencast mining in the Ystradgynlais area in Powys; and if he will make a statement.
    The Secretary of State for Wales (Mr. Nicholas Edwards): I have not recently met the chairman of British Coal to discuss opencast mining.
    Mr. Coleman: It was recently reported that the Secretary of State had overruled his inspector concerning a planning application for opencast mining in his own constituency. Will the Secretary of State state precisely his reasons for that? Will he issue a circular containing them, so that local authorities dealing with planning applications for opencast mining may have them for their guidance when deciding upon future applications, whether by British Coal or by private persons?
    Mr. Edwards: The reasons were set out in the decision letter. Basically, we had to weigh up the importance of
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    opencast mining to the economy and to the Welsh coal industry—it makes a significant contribution—and the effect of this scheme, especially on the environment, tourism and the local economy. Each case must be decided on its merits.
    Mr. Livsey: Will the Secretary of State say whether he is opposed to opencast mining alongside village communities? In my constituency at Upper and Lower Cwmtwrch there are proposals for opencast mining at the Brynhenllys site. Will he reject those proposals?
    Mr. Edwards: British Coal has appealed against the refusal of Powys county council to grant planning permission at the site named by the hon. Gentleman. I cannot comment on the merits of the proposal because it is clearly one that I shall have to consider as Secretary of State. The hon. Gentleman knows that I cannot discuss the merits of an individual application.
    Mr. Rowlands: Is the Secretary of State aware of the strength of feeling about schemes that could continue for years, disfigure the environment and cause considerable nuisance and difficulty for many residents in the borough of Merthyr Tydfil? Will he at least consider that these decisions and proposals can have a long-term effect in terms of attracting industry to and commercial development in the borough? I hope that the right hon. Gentleman takes those aspects into account.
    Mr. Edwards: All those matters and their effect on local communities must be considered, but we must also recognise that there is a need for the range of special and high-quality coals which the industry produces. They provide employment opportunities and contribute to the financial profitability of British Coal. All those matters must be considered on an individual-case basis.
    Mr. Rogers: Will the Secretary of State not heed the question put to him by my hon. Friend the Member for Neath (Mr. Coleman) and apply to applications in the valley communities the same criteria as he is applying to the application in his constituency? Does he not think that it is a shame that he made that decision?
    Mr. Edwards: It is not a shame that I made that decision. I happen to think that it was right. This is the only one of the cases currently under consideration that has come before me at present. I shall give exactly the same detailed consideration to all these cases.
    Mr. Roy Hughes: Does the Secretary of State realise that Labour Members appreciate that there are economic arguments for and against opencast mining and, likewise, important environmental considerations? We are trying to elicit Welsh Office policy. Is it that opencast mining is permissible in any part of Wales other than Pembroke?
    Mr. Edwards: The hon. Gentleman started by very fairly weighing up the balance of the issues that must be considered in each case. Only one of the decisions has come before me in the recent past. A number of other cases are being considered by the Department or are likely to come before it in the near future, and we shall consider each on its merits.

    "A Good Old Age"
    Mr. D. E. Thomasasked the Secretary of State for Wales what progress his Department has made in coordinating services for the elderly following his consultation document "A Good Old Age" published in September 1985; and if he will make a statement.
    Mr. Geraint Howellsasked the Secretary of State for Wales if he is satisfied with the present arrangements for looking after the elderly in Wales; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Wales (Mr. Mark Robinson): My right hon. Friend announced last Thursday that he has issued a circular inviting local authorities, health authorities and others to submit bids for a grant programme over an eight-year period which will encourage new developments in the care of elderly people in Wales on the lines described in "A Good Old Age".
    Mr. Thomas: Will the hon. Gentleman spell out the effective level of co-operation between local and health authorities in Wales during the present cold spell? How many avoidable deaths occurred during this period because of a lack of effective community care?
    Mr. Robinson: We have been monitoring the position closely during the cold weather and have no reason to believe that the emergency arrangements of health and local authorities are not working well. We have made additional funds available for voluntary organisations to deal with the short-term crisis for homeless people, and made £25,000 available to Shelter Wales.
    Mr. Geraint Howells: Does the hon. Gentleman have other proposals to help the elderly if the weather becomes colder? Does he have any plans to increase the £5 weekly grant to £7 or £10 to help the elderly in the present situation?
    Mr. Robinson: That is a matter not for me but for my right hon. Friend the Secretary of State for Social Services.
    Mr. Gwilym Jones: Does my hon. Friend agree that there has already been a significant contribution to "A Good Old Age" by the Government's quadrupling of spending on heating, including the severe weather payments scheme? Is this record not far superior to that of the Lib-Lab Government?
    Mr. Robinson: I entirely agree with my hon. Friend. In response to "A Good Old Age" we intend to make £1 million available in the current financial year, £2 million in 1988–89 and £4 million in 1989–90, and to extend the scheme for a further eight years. My hon. Friend may recall that my right hon. Friend the Secretary of State initially announced in the Welsh Grand Committee a funding programme for three years of £5 million. Our programme over the first three years now amounts to £7 million.
    Mr. Ron Davies: Does the Minister accept that a prerequisite of a reasonable level of service for the elderly is adequate heating? Does he also accept that last week clearly demonstrated that the Government's legislative provision was inadequate? If it had been adequate, there would have been no need for the Government to override their own procedures. What criteria will have to be fulfilled in terms of temperature and weather conditions generally to enable the existing legislative criteria to be set aside?
    Mr. Robinson: I am again asked questions that are the responsibility of my right hon. Friend the Secretary of State for Social Services. A supplementary pensioner over 65 is receiving £8 a week for heating costs, amounting to £400 a year. For a pensioner over 85 the amount rises to £11 a week, or nearly £600 a year per householder. In addition, there is a £5 heating supplement. Taken together, this package is far more comprehensive than anything Labour had when in office.
    Sir Raymond Gower: Will my hon. Friend take a special look at the circumstances of those, particularly retirement pensioners, who, in addition to their retirement pension, enjoy some small industrial pension or tiny secondary income which deprives them not only of supplementary benefit but of everything that goes with it—for example, rebates and heating allowances?
    Mr. Robinson: I take note of what my hon. Friend has said. However, that again is a matter for my right hon. Friend the Secretary of State for Social Services. I am sure that he. too, will take note of my hon. Friend's point.
    Dr. Roger Thomas: During his busy week, will the Minister find time to read an Adjournment debate speech in which the hon. Member for Leicester, East (Mr. Bruinvels) catalogued the defects that are already showing up in legislation that was passed two years ago with regard to the registration of homes for the elderly? Does the Minister agree with his hon. Friend's conclusion that that legislation is now producing cruelty for the elderly and is fleecing them of their money?
    Mr. Robinson: The hon. Gentleman raises matters that are not my responsibility. However, in the matter of residential homes for the elderly, there is a system of regulation which is controlled by the social services departments which register and inspect all private and voluntary homes under the Registered Homes Act 1984.
    Mr. Best: The House will welcome my hon. Friend's statement that funding will be made available over the eight-year period. Has he any schemes to assist organisations to help elderly people to keep their houses in good repair?
    Mr. Robinson: I thank my hon. Friend for his comments about that important initiative. On the matter of schemes to help improve the houses of the elderly that are in disrepair, we are putting up to £200,000 into home improvement agency services through organisations such as Care and Repair Ltd. in each of the next three years to help elderly people improve their homes so that they may live in comfort.
    Mr. Barry Jones: Low income is the chief factor in the pensioners' fight against the cold, and the 40p award aroused contempt throughout Wales. Does the Minister understand that one way of improving services for the elderly is to ensure that there is less violence and intimidation on our housing estates? Why does the Minister not begin a much wider campaign for better safety locks and improved estate lighting? Does he agree that having more policemen on the beat would eliminate muggings of elderly people?
    Mr. Robinson: The hon. Gentleman is treading on rather soft ground, because it was a Labour Government who failed to pay the Christmas bonus to pensioners in two of the last five years that they were in office. As the

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    hon. Gentleman is aware, we have already launched our priority estates programme in Wales. It is having considerable success and has recently been expanded.

    Secondary Schools (Expenditure)
    Mr. Knoxasked the Secretary of State for Wales how much was spent per pupil in secondary schools in Wales in the most recent year for which figures are available; and what was the comparable figure for 1978–79, at constant figures.
    The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): In 1985–86 the amount spent per pupil in secondary schools in Wales was £1,158. The equivalent figure for 1978–79 was £1,002.
    Mr. Knox: Does not my hon. Friend's answer make nonsense of Opposition claims of cuts in education expenditure?
    Mr. Roberts: My hon. Friend is absolutely right. In real terms expenditure on education remains broadly constant, while pupil numbers have decreased. Local authority revenue spending on education in Wales, excluding school meals and milk, was slightly higher in 1985–86 than in 1979–80, despite a significant decline in pupil numbers.
    Dr. Marek: Is the Minister aware that expenditure on education increased in 1979–80 as a result of decisions taken by the last Labour Administration, and that in the years between 1980–81 and 1984–85 it went down from £694·3 million to £689·3 million at 1984–85 prices? Those figures relate to local authority net expenditure. If the figure has now increased again, does the Minister agree that that is the result of a last-ditch cynical manoeuvre to try to rescue his extremist and do-not-care party from being annihilated in Wales in the next general election?
    Mr. Roberts: I do not have the figures that the hon. Gentleman quoted. However, I do have figures for spending on primary and secondary pupils in cash and in cost terms from 1976–77 to 1985–86. To put it briefly, those figures are on the up all the way.
    Mr. Raffan: Will my hon. Friend agree to press upon Clwyd county council in particular that it would have far more to spend per secondary school pupil if only it could muster the political will to tackle the county's massive number of surplus places? If those surplus places remain untackled, they will amount to 23,000 by 1989.
    Mr. Roberts: My hon. Friend is absolutely right. There is a problem with surplus places in Wales, including Clwyd. We must take hard decisions to eliminate them.
    Mr. Barry Jones: The Minister is complacent and self-congratulatory. May I remind him of the chilling and rather disturbing reports by Her Majesty's Inspectorate in Wales over the past five years? The reports show shabby, dilapidated and damp schools. The schools depend upon parent-teacher associations to raise vital money, the equipment is defective and the texbooks dog-eared. Surely the Minister has reason to believe that the inspectorate is pointing to the real situation in Wales. Why has he boosted funds to public schools by over 1,000 per cent., when our state sector goes short?
    Mr. Roberts: We are making substantial capital resources available to local authorities in Wales. Since the introduction of the new capital control system in 1981–82,
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    capital allocations have increased substantially. By next year that increase will be 56 per cent. We can make the capital available to local authorities, but we cannot force them to spend it on schools.

    Mid Glamorgan Area Health Authority
    Mr. Johnasked the Secretary of State for Wales what additional revenue income he proposes to allocate to Mid Glamorgan area health authority in the forthcoming year.
    Mr. Mark Robinson: In 1987–88 Mid Glamorgan district health authority will have a revenue allocation of nearly £125 million, an increase of just under 6 per cent. over the previous year. In addition, it will be able to retain all the revenue income that the authority itself generates.
    Mr. John: The Minister will know that at Rhiwfelin hospital yesterday there was a celebration for the 100th birthday of one of the patients. Will he accept that no one who attended that celebration could fail to be impressed by the dedication of the staff to the patients and the homely atmosphere that has been created? Does the Minister agree that some of the elderly cannot be accommodated within the ideas of catering for old age within the community and that there needs to be a continuation of hospital places to accommodate such people? Does he think that the Welsh Office should have another look at the revenue implications in order I o keep hospitals such as Rhiwfelin open so that people may be accommodated with dignity in their great old age?
    Mr. Robinson: I should like to associate myself with the hon. Gentleman's comments about the dedicated work of the staff at Rhiwfelin hospital. I understand that the authority is currently engaged in a consultation exercise as to the future of the hospital. Should local agreement not be reached on the matter, it will be referred to my right hon. Friend the Secretary of State for decision. Some of the points made by the hon. Member for Pontypridd (Mr. John) are precisely the issues my right hon. Friend will take into account when reaching his decision.
    Mrs. Clwyd: Is the Minister satisfied that sufficient resources are being devoted to the care of the mentally ill and the mentally handicapped, given the highly critical report by the Hospital Advisory Service, which said last week that mental illness care in one particular Welsh county was in danger of collapse? Given the history of scandals in Wales concerning care of the mentally ill and mentally handicapped, will the Minister give us assurances that sufficient resources are being given to the area health authorities for such care?
    Mr. Robinson: The report to which the hon. Lady refers goes into issues that are way beyond the details of Welsh Office funding. It concerns the role of the local health authority and social services department. However, the cash limit for 1987–88 for the All-Wales Mental Handicap Initiative, subject to parliamentary approval, is likely to be in the region of £10 million to develop new services under the mental handicap strategy.
    Mr. Roy Hughes: Is it not apparent to the Minister that, with the marked decline in Health Service facilities and with mass unemployment, a poor environment and all the social factors stemming from those issues, Mid Glamorgan requires not another hospital closure but more adequate funding of its Health Service facilities?
    Mr. Robinson: I do not understand how the hon. Gentleman can describe a 33 per cent. growth in recurrent revenue resources to district health authorities between 1978–79 and the present time as a cut in available resources. I also cannot understand how he can describe as a decline a hospital building programme that amounts to almost £490 million at today's prices since 1979. To my way of thinking that is a considerable increase in the hospital and care services available in the Principality.

    Working Population (Intermediate Areas)
    Mr. Gareth Wardellasked the Secretary of State for Wales what is his current estimate of the percentage of the working population of Wales residing in intermediate areas; and what was the corresponding figure for 1979.
    Mr. Nicholas Edwards: Fifty-one per cent. of the economically active population of Wales live in intermediate areas. The corresponding figure for early 1979 was approximately 13 per cent.
    Mr. Wardell: While I accept from the Secretary of State's figures that there has been an expansion in the population of Wales living in intermediate areas, does he agree that at the same time he has drastically reduced from 90 to 38 per cent. the proportion of the working population who live in assisted areas receiving regional development grants? Is he really proud of the fact that from April this year a moratorium of two months will be imposed on the payment of regional development grants? The Government are once again increasing the divide between north and south, with Wales firmly in the north.
    Mr. Edwards: On the moratorium, we have been faced with a considerable bulge in the number of applications. There was an overlap on the two schemes and there has been a four-month moratorium under the old scheme and there will be a two-month moratorium under the new scheme. In each of the years 1984, 1985, and 1986 the estimated number of new jobs created following acceptance of regional selective assistance and regional development grants in Wales was well over 12,000. In 1986 the figure was more than 16,000. That compares with the 1979 figure of under 10,000. It is clear that the Government's regional policy is creating more new jobs than were created by that followed by the previous Labour Government.
    Sir Anthony Meyer: Does my right hon. Friend accept that the insistence of the Treasury on thinking of things solely in 12-month periods is positively unhelpful to his tremendous efforts to create a consistent, long-term development policy for the Principality?
    Mr. Edwards: We have had a very considerable bulge in applications. We have been dealing with record figures for jobs created by our regional policy. During 1986 no fewer than 135 offers of assistance totalling more than £37·5 million were expected, promising to create more than 5,400 new jobs and to safeguard 4,000 existing jobs in Wales. These figures show that within the flexibility that we have—and we have a three-year PESC period—we are able to pursue a very effective regional policy, not least in the area of Wales represented by my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer).
    Mr. Wigley: Is the Secretary of State aware that the whole of my constituency is an intermediate area and that
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    the Pwllheli employment exchange shows for this month an unemployment rate of 22·2 per cent. compared with an average of 19·1 per cent. for the full development areas throughout Great Britain? Is it not high time that the Secretary of State either looked again at the designation of intermediate areas or came forward with a much more effective regional policy?
    Mr. Edwards: Any regional policy must have a degree of consistency. We have had a major review and we should not change the boundaries of areas every few months or every year or so. The hon. Gentleman must recognise that the scope for giving selective assistance in the intermediate areas is considerable. When significant projects have been brought forward, it has nearly always been possible to put together a financial package to enable us to secure them. As the hon. Gentleman knows, his constituency is faced with problems of location and infrastructure. Possibly the greatest single contribution that we are making in the hon. Gentleman's part of Wales is the rapid progress towards completing the A55 dualling.
    Sir Raymond Gower: Can my right hon. Friend assure the House that the package which the Welsh Office, the Welsh Development Agency and Winvest are able to offer industrialists who are considering moving into Wales has proved adequate since the boundaries for grants were last altered?
    Mr. Edwards: The fact that we have attracted about 20 per cent. of all inward investment into the United Kingdom, when we have about 7 per cent. of the population, shows that Wales is getting a very fair share. One threat that is hanging over that inward investment is the Labour party's promise to reintroduce exchange controls. I cannot think of a more devastating blow to job and investment prospects for Wales, as it would immediately halt inward investment and have a devastating impact on decisions made by overseas companies which have major plants here and are planning expansion.
    Mr. Anderson: When the Secretary of State talks about fair shares for Wales and the effectiveness of regional policy, would he care to read today's Financial Times supplement on regional policy, which speaks of the collapse of such a policy under this Government and says, among other things, that the increase in unemployment in Wales while the right hon. Gentleman has been in office is double that in Northern Ireland? Is that the legacy that the right hon. Gentleman will proudly leave Wales?
    Mr. Edwards: Unemployment in Wales has fallen in eight of the past nine months. The number of people unemployed in December was about 10,500 down on the peak of March last year and we have an all-time record allocation of Government factories at only just under 2·5 million sq ft. That shows the complete nonsense of describing our policies as a failure.

    Labour Statistics
    Mr. BarryJones asked the Secretary of State for Wales what were the unemployment totals and percentages for (a) Wales and (b) Clwyd at the latest date for which such figures are available and for May 1979; and if he will give the percentage increase.
    Mr. Nicholas Edwards: On 11 December 1986 the total numbers of unemployed claimants in Wales and Clwyd

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    were 173,546 and 23,729 respectively. The number of unemployed claimants in Wales, seasonally adjusted, was 165,900, or 13·4 per cent. of the working population. In May 1979 it was 73,100, an increase over the period of 127 per cent.
    Mr. Jones: Those are deeply disturbing figures, especially when seen against the background of the recently revealed loss of some 113,000 manufacturing jobs since 1979. One calculation is that, at the current rate of decrease, it will take until 1994 simply to reduce the figure to 100,000. Has the right hon. Gentleman realised the serious consequences that there would be for north-east Wales if the predatory and greedy BTR takeover bid for Pilkington was successful? I remind the right hon. Gentleman that my constituents at Queensferry have signed a petition against the takeover. Will he urge his Cabinet colleagues to reconsider the weak decision taken by the Secretary of State for Trade and Industry not to refer the hid to the Monopolies and Mergers Commission? Does the right hon. Gentleman agree that the public interest demands an about-turn, especially as junior Ministers do not support their Secretary of State? To us in Wales it appears that the City is increasingly corrupt. We want action on Pilkington.
    Mr. Edwards: On the ground of competition policy, bearing in mind the consistent application of that policy, and with the recommendation of the Director General of Fair Trading in front of him, my right hon. Friend the Secretary of State for Trade and Industry made the absolutely correct decision. I am equally sure that investors in the company will want to take very careful account of Pilkington's impressive record in research and development and on maintaining regional operations in terms of headquarters and research and development. I am sure that they will also want to consider the company's successful record. I hope that investors will bear all those factors carefully in mind when they decide the long-term future of the company.
    Mr. Terlezki: I think that we ought to welcome the reduction in unemployment in Wales, although it is marginal. My right hon. Friend travels far and wide to introduce industries to Wales and we have an excellent labour force, but if the Opposition continue with their scaremongering, industries from all over the world which intend to come to Wales, and which we need, will not come.
    Mr. Speaker: What is the question?
    Mr. Edwards: There is no doubt that hon. Members on both sides of the House should welcome the steady fall in unemployment that has taken place over the past nine months in Wales, and which as continued to be evident in the figures for the most recent available month. I repeat that the policies that are being advanced by the Opposition represent a serious threat. The hon. Member for Alyn and Deeside (Mr. Jones) has introduced his own policy or, apparently, a whole range of competing development agencies in almost every hamlet of the Principality. That policy was promptly ridiculed and dismissed by almost all his colleagues, including a former Secretary of State for Wales.
    Mr. Foot: As the right hon. Gentleman is so proud of his regional policy, will he tell us precisely how much the
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    Treasury has saved on that policy since 1979? All those millions could have been better spent in the worst-hit areas of Wales.
    Mr. Edwards: As I have already pointed out to the right hon. Gentleman, the policies that we are pursuing have produced a rising number of new jobs, created as a result of that assistance. There has been a record amount of factory allocations and, as the right hon. Gentleman is aware, we have allocated substantial new resources to the valleys initiative and the proposed garden festival that will be held in his constituency.
    Sir Anthony Meyer: Is my right hon. Friend aware that there will be a general welcome for the clear lead that he gave just now in his answer about the Government's belief that the independence of Pilkington is vital, not only for the retention of existing jobs, but for the provision of future jobs in north Wales?
    Mr. Edwards: There are two quite separate matters involved. There is the question of competition policy, and whether to send the matter to the Monopolies and Mergers Commission. Indeed, my right hon. Friend the Secretary of State for Trade and Industry, when making his announcement, pointed out that would not necessarily have led to any different decision.
    The other question concerned the merits of the bid that now has to be considered by the investors. I believe that Pilkington has an outstanding record based on research and development and that the long-term record and the company's prospects should be high in the minds of those who have to take the decision.
    Mr. Geraint Howells: I am sure that the Secretary of State is aware that the unemployment percentage in the Cardigan area is one of the highest in Wales and stands at 26 per cent., as it has done for the past 10 years. I wonder what plans the Secretary of State has in mind to try to resolve this problem.
    Mr. Edwards: I very much welcome the active initiatives that are being taken particularly in the Teifi valley by the enterprise agencies. I believe that the activities of those organisations will make an increasingly valuable contribution in some of the more difficult rural areas where it is not easy, as the hon. Gentleman well knows, to create new jobs. Indeed, the hon. Gentleman pointed out that this sutuation of high unemployment has continued in the area for a long time, including during the period of the Lib/Lab alliance.

    Housing Associations
    Mr. Gwilym Jonesasked the Secretary of State for Wales what level of support he is giving to housing association activities in Wales.
    Mr. Mark Robinson: My right hon. Friend has increased support for the housing association movement in Wales by 22 per cent. in 1987–88 to £54·7 million. With receipts, this will allow a gross Housing Corporation programme of nearly £59 million and is ample evidence of our continuing commitment to the housing association movement in Wales.
    Mr. Jones: May I remind my hon. Friend of the recent announced partnership between a housing association, Cardiff city council and free enterprise sector capital to build over 600 new homes in St. Mellons? Many of those

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    homes will be let to people on the council housing waiting list. Does he agree that this scheme offers a much more imaginative way forward, which I hope will be followed by other schemes in Wales?
    Mr. Robinson: I entirely agree with the sentiments that my hon. Friend has expressed. Of the amounts that I have mentioned this afternoon, the Housing Corporation has set aside £10 million for such schemes in Wales. I am pleased to announce that projects similar to the St. Mellons scheme, but on a smaller scale, have been approved at Abergavenny, Chepstow and Camarthen. A number of others are under further consideration.
    Mr. D. E. Thomas: Although I welcome the increased funding for housing associations, can the Minister tell us how his figure of allocation agrees with the bids put in by housing associations in Wales or by how much it falls short? What is the declared capacity of the associations to build units as compared with the allocations made?
    Mr. Robinson: That is not a matter for me; it is a matter for the Housing Corporation. The reaction that I have had from housing associations in Wales shows that they are extremely pleased with the increase in resources that they have been given. Over the last two years those resources have been given a boost of 40 per cent.
    Mr. Anderson: Will the Minister ensure that all local authorities in Wales are encouraged to follow the model of the St. Mellons scheme, which is wlecome? Will he say, as a matter of policy, whether he wants housing associations to build, not for specialist groups and not just for sale, but for the general list for rent?
    Mr. Robinson: These schemes require the co-operation of local authorities. In the case of the St. Mellons scheme Cardiff city council is making land available and I hope that other authorities will be similarly involved. I hope that housing associations in Wales will undertake mixed and balanced programmes along the lines that the hon. Gentleman has described.

  DUCHY OF LANCASTER

    County Palatine
    Mr. Wigleyasked the Chancellor of the Duchy of Lancaster if he is yet in a position to announce the date of his visit to the county palatine early in the new year, referred to in his answer of 17 November, Official Report, column 302; and if he will make a statement.
    The Chancellor of the Duchy of Lancaster (Mr. Norman Tebbit): I hope to visit the county palatine next on 10 March in place of 31 March date to which I referred when I last answered questions.
    Mr. Wigley: When the right hon. Gentleman goes to the county palatine, will he tell the residents whether he regards it as a success of his Government's policy that 94 per cent. of the job losses since this Government came into office have taken place in the north and west of these islands, including the north of England, Wales and Scotland, and whether his answer to the unemployment problem is still that people should get on their bikes?
    Mr. Tebbit: Given the time that the hon. Gentleman had to rehearse his supplementary question, he has not done terribly well on it. Unemployment is now falling in
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    the United Kingdom. Jobs are being created at a very high rate in the north and west, just as they are in the south. However, it is not surprising that during a period of worldwide decline in such heavy industries as shipbuilding and steel the major job losses in Britain should have been concentrated where those industries are situated. The Government's regional and other policies are doing everything possible to regenerate jobs in those areas. The actions of some Labour local authorities are not conducive to helping in that process.
    Mr. Sumberg: Does my right hon. Friend recall that on his last visit to the county palatine, and in particular to Bury, he performed the topping-out ceremony of a new unit at Fairfield hospital? That unit had waited for years to be constructed under a Labour Government. Does he agree that it has taken a Tory Government to build the hospitals, whereas the Opposition merely talk about them?
    Mr. Tebbit: My hon. Friend is right. Many of the hospitals currently being built by this Government, and the many which have already been completed, were taken out of the Labour Government's programme during the IMF crisis 10 years ago. We should not be surprised at that, because I am reminded that it is just 19 years ago today that the Labour Government announced slashing expenditure reductions which involved postponing the raising of the school-leaving age, led to the introduction of prescription charges, the slashing of the housing programme by 165,000 houses a year and the slashing of defence expenditure. Of course, that is quite normal for Labour Governments, and the Chancellor of the Exchequer at the time was the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), who has now been given the job as economic spokesman for the SDP.
    Mr. Winnick: When the right hon. Gentleman visits the county palatine, will he explain to the people there why he was quite willing to come here in his chauffeur-driven car on Friday to vote down a private Member's Bill that would have assisted some pensioners? Since there has been a great deal written about what he did or did not say about Tories with a conscience, does his conduct on Friday demonstrate that he has much of a conscience?
    Mr. Tebbit: Well——
    Mr. Winnick: Well…
    Mr. Tebbit: I felt that I should vote against a measure that would cause an extra burden of taxation to fall upon young widows in order to give free television licences to my noble Friends the Lord Hailsham and the Lord Whitelaw.
    Mr. Silvesterasked the Chancellor of the Duchy of Lancaster if he is yet in a position to give the date of his proposed visit to the county palatine early in the new year, mentioned in his answer of 17 November, Official Report, column 302; and if he will make a statement.
    Mr. Tebbit: I refer my hon. Friend to the answer that I gave some moments ago.
    Mr. Silvester: By the time my right hon. Friend gets to the Duchy, will he make an estimate of the number of people whose jobs will be affected if we were to follow non-nuclear defence and energy policies?
    Mr. Tebbit: It would be difficult to make a full estimate of the number of people. British Nuclear Fuels Limited at

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    Sellafield, Springfields and Risley employs 16,000 people, the United Kingdom Atomic Energy Authority, principally at Risley, employs 3,900, the National Nuclear Corporation at Booths Hall and Risley employs 2,300 people, and the CEGB at Heysham 1 and 2 nuclear stations employs 1,250 people. There are, therefore, some 23,000 employees directly in the north-west. BNFL alone estimates that its programme supports a further 50,000 jobs, mostly in the north-west. On top of that, we could add all the Vickers jobs on the new Trident nuclear submarine programme. All in all, an impressive number of jobs would be thrown away by a Labour Government if we ever had that misfortune visited upon us.

  PUBLIC ACCOUNTS COMMISSION

    National Audit Office
    Mr. Dalyellasked the right hon. Member for Taunton, answering on behalf of the Public Accounts Commission, what criteria the Commission uses in appointing the Accounting Officer for the National Audit Office.
    The Chairman of the Public Accounts Commission (Sir Edward du Cann): In appointing the serving Comptroller and Auditor General to be Accounting Officer for the National Audit Office Vote with effect from 1 January 1984 the commission followed the long-standing practice of appointing the officer in the best position to discharge overall responsibility for policy and for the resources allocated to the office. The C and AG, is of course, by statute, head of the National Audit Office.
    I am sure that the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) will concur with me when I say—I am glad to have the opportunity to make the point—that I believe that the House of Commons and the nation are well served by the Comptroller and Auditor General and his colleagues in accordance with the long-standing tradition of competence of that office.
    Mr. Dalyell: May I ask the right hon. Gentleman a question of which I gave him notice last month? Can he say whether, in appointing the Accounting Officer, his ability to take a grip on the financial control of the security services is taken into account? Is not this matter given added importance by the controversy over electronic surveillance data that has blown up in the past three days? It is one of a number of controversies that make it important that the Public Accounts Committee, on behalf of the House, should have oversight of the security forces and what they do.
    Sir Edward du Cann: The duties of the Comptroller and Auditor General in regard to the security services are covered by long-standing arrangements that were endorsed by the Public Accounts Committee. Expenditure on the secret service is accounted for by the Cabinet Office. The Comptroller and Auditor General does not examine the records relating to this expenditure, but, instead, receives personal certificates from the responsible Ministers of the Crown to the effect that the payments were properly made from the secret Vote in the public interest. He then certifies the Appropriation Account to this effect. If there is other expenditure on intelligence and security services that might be borne in other Votes, they will then be subject to full audit by the Comptroller and Auditor General.
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    I made inquiries about the hon. Gentleman's second point about the communications project, because I thought it would be of interest to the House. I am told that the matter is still at a preliminary stage and that nothing like the sums that were referred to have been incurred. The House will be aware that the National Audit Office has full access to the Ministry of Defence records. The House will also be aware that arrangements exist under which the Chairman of the Public Accounts Committee is kept informed of such cases in which there are large expenditures.
    Mr. Skinner: As the Accounting Officer may well come from the area known as the City, will the right hon. Gentleman take into account the fact that the field is scattered with individuals who would be suspect as accounting officers? Will the right hon. Gentleman steer clear of Guinness, Morgan Grenfell and all the other merchant banks that have been involved in swindling the public during the past few weeks?
    Sir Edward du Cann: I am sure that it would be the wish of the House that I should make it absolutely clear that not only those of us who are concerned with the affairs of the Commission but the House in general have total confidence in the integrity of the Comptroller and Auditor General and his staff.
    Mr. Williams: Will the right hon. Gentleman clarify one point? He said a few moments ago that nothing like the sums referred to in the press had been incurred. By that does he mean that they have not been incurred so far, or is he saying that they will not be incurred as the total cost of the project?
    Sir Edward du Cann: I am told that the project is at an experimental stage. That is why no large expenditures, or no expenditures on the scale of those mentioned in the newspapers, have yet been incurred.

  DUCHY OF LANCASTER

    Office Manpower
    Mr. Winnickasked the Chancellor of the Duchy of lancaster how many Civil Service staff are employed in his Office; and in what capacity.
    The Chancellor of the Duchy of Lancaster (Mr. Norman Tebbit): Four: a private secretary, an assistant private secretary, a personal secretary and an administrative officer.
    Mr. Winnick: Bearing in mind that virtually the whole of the right hon. Gentleman's time is spent at Tory Central Office, one wonders why he needs such a staff. Will he explain to the House why quite a number of his Cabinet colleagues have apparently let it be known that he made the alleged remark, namely, that nobody with a conscience votes Conservative? Why should so many of his Cabinet colleagues wish to do him harm?
    Mr. Tebbit: First, although I spend a considerable amount of my time on the affairs of the Conservative party, which is the reason why I am not paid as a Minister out of public funds, I also have a considerable workload of Cabinet work and other work which is the concern of my four members of staff at the Cabinet Office.
    Secondly, on the libel, which the hon. Gentleman repeated, I have no means of knowing whether Mr. Young

    595
    had an informant or whether he invented the alleged quotation himself. However, what I know is that it is a total fabrication and the only doubt is whether it was made up by Mr. Young or by some anonymous, unknown liar.

  HOUSE OF COMMONS

    Telephone Calls
    Mr. Dalyellasked the Lord Privy Seal how many telephone calls from the Palace of Westminster have been logged in the past six months.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): As I made clear in earlier replies to the hon. Member for Great Grimsby (Mr. Mitchell) on 5 December, at column 802, and on 10 December, at column 203, and to the hon. Member for Leyton (Mr. Cohen) on 19 December, at column 721, the call logging equipment is capable of storing only the date and time of each call made within the United Kingdom from extensions of the Palace of Westminster exchange; it does not cover direct lines or international calls. This information is stored for no more than two months. Figures for the number of calls logged in the past six months are, therefore, not available.
    Mr. Dalyell: Is the Lord Privy Seal saying unequivocally that there is therefore no logging whatsoever of any calls that may have taken place between the office of my right hon. Friend the Leader of the Opposition and the office of Mr. Malcolm Turnbull in Australia?
    Mr. Biffen: Certainly, If the hon. Gentleman studies tomorrow my answer, he will see that direct lines or international calls are specifically excluded.
    Mr. Hickmet: Can my right hon. Friend confirm that the embarrassment of the Leader of the Opposition in conducting conversations with a lawyer representing a defendant in a case where the Crown is the plaintiff and where issues of national security are concerned will not be saved by making spurious allegations about his telephone being bugged? The answer is that for cheap political gain and cheap political purposes the Leader of the Opposition is prepared to stoop to whatever tactics are available.
    Mr. Biffen: I do not think that I can helpfully add to the reply that I have just given.
    Mr. Williams: The Leader of the House said that direct calls and international calls are not logged. Have I misunderstood the House of Commons system? Is it not a fact that if somebody wants to make an international call he has to go via the House of Commons operator? Therefore the call must be logged.
    Mr. Biffen: I do suggest that the hon. Gentleman should study the answers that I have given. I have said specifically that international calls are not logged. The hon. Gentleman could check that with the Accommodation and Administration Sub-Committee, which was responsible for the equipment being installed.

    Sales Kiosk
    Mr. Greenwayasked the Lord Privy Seal what were the takings in (a) the month and (b) the year up to 24 December 1986 at the House of Commons sales kiosk; and if he will make a statement.
    Mr. Charles Irving: I have been asked to reply.
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    The takings of the Refreshment Department's souvenir kiosk in the four-week period and the 12-month period to 24 December 1986 were £182,122 and £504,404 respectively. These figures include VAT and are a record for the Department.
    Mr. Greenway: I congratulate my hon. Friend and all concerned with the remarkably hard work behind those figures. May I ask, first, to what use is any profit included in those figures put, and, secondly, will there by any price reductions? Is he aware of the recent, welcome innovation of selling House of Commons humbugs? Is he further aware that these are sold in a three quarter pound tin at £2·50, whereas in the shop down the road the same weight can be bought for under 80p? Why are House of Commons humbugs so expensive?
    Mr. Irving: I am grateful to my hon. Friend for his kind remarks about the Department. All the staff who have achieved this marvellous result in difficult working conditions in a kiosk which is 6ft by 23ft deserve our thanks. The staff of the whole Department deserve our thanks.
    My hon. Friend asks what we do with the money. I can assure him that it is dealt with in an entirely respectable way, unlike things that sometimes happen outside. The money will be reinvested to improve facilities for members of staff and Members of this House, who will have seen a few improvements since 1979. We have a responsibility to see that the budget balances and that we do not call upon the taxpayer for further resources.
    My hon. Friend refers to humbugs. If he talks to me afterwards, I can talk to him in greater detail. However, I must advise him that there are two sorts of humbugs—cheap ones that can be bought outside the House, and exclusive, delicious, succulent ones that can be bought in this House. For the quality that we offer, we consider that the price is most reasonable.

    Office Accommodation
    Mr. Dormandasked the Lord Privy Seal if he will make a statement on the latest progress being made in providing additional office accommodation for hon. Members.
    Mr. Biffen: Work has now begun on the redevelopment of the area between Parliament Street and Cannon Row, and this scheme is still on schedule for completion in 1990. In addition, as hon. Members will have noticed, the writing rooms above the Division Lobbies were converted into Members' offices during the last summer recess.
    Mr. Dormand: Is the Lord Privy Seal confirming that the first phase is likely to be completed by its target date? Secondly, what progress is being made on the second phase? How many additional offices have been made available to hon. Members within the Palace of Westminster during the past 12 months?
    Mr. Biffen: On the third point, I cannot be absolutely certain that I have noticed how many offices have been made available, but that will be covered by the reference to the Members' offices that were converted from the rooms above the Division Lobbies. As to the first question, I can confirm that what is popularly known as phase 1 is on schedule for completion in 1990, but at the moment I have nothing further to report on phase 2 beyond what was last said.
    Mr. Stokes: Is there any correlation between the size of a Member's office and his contribution here?
    Mr. Biffen: Absolutely none. Were there to be such a correlation it would be an invidious task for those operating through the usual channels to have to allocate the offices.
    Mr. Soley: Will the right hon. Gentleman also accept that all Ministers would have to abandon their offices if he were to follow the guidance of the hon. Member for Halesowen and Stourbridge (Mr. Stokes)?
    Is the right hon. Gentleman aware of the increasing concern among a growing number of hon. Members on both sides of the House about the inadequacy of offices for Members, personal assistants and secretaries, which has been partly brought about by the changing nature of the job? Should not the aim be to enable Members of Parliament to have proper secretarial facilities close to the office in which they work, not about half a mile away, as happens in some cases, so that we can do our job more efficiently?
    Mr. Biffen: The hon. Gentleman would argue himself into some difficulties if he asserted that Members had to have accommodation close by their secretaries. Many Members want the repossession of the Palace of Westminster by Members, which would mean that research assistants and the rest would be housed elsewhere. That kind of dilemma will make this a highly topical and contentious issue long after we are drenched with accommodation.

    Northern Ireland Business
    Sir John Biggs-Davisonasked the Lord Privy Seal if he has any proposals to reform the conduct of Northern Ireland business; and if he will make a statement.
    Mr. Biffen: At present none, Sir.
    Sir John Biggs-Davison: While the Northern Ireland Office is addicted to the separate statute book, does my right hon. Friend think that it is in keeping with our system of parliamentary government that Northern Ireland legislation should be done, and should have been done for so many years, in the form of unamendable Orders in Council, only briefly debated?
    Mr. Biffen: My hon. Friend makes the point fairly and he will recall that last February an invitation was issued by my right hon. Friend the Prime Minister to the leaders of the Unionist parties to discuss whether alterations should take place in our system of handling Northern Ireland legislation, and there the matter rests.
    Mr. Dalyell: On a point of order, Mr. Speaker.
    Mr. Ray Powell: On a point of order Mr. Speaker.
    Mr. Speaker: I shall deal only with points of order arising out of questions. I shall take the point of order of the hon. Member for Ogmore (Mr. Powell) first.
    Mr. Powell: I know that you will appreciate, Mr. Speaker, that this is a point of order directed to you and and I am sure that you will give the matter serious consideration. Today, Welsh Questions started at 2.35 pm and ended at 3.10 pm and seven questions out of 24 were reached. I appeal to you, Mr. Speaker, to give further consideration, along with the House of Commons
    598
    (Services) Select Committee, to ensuring that Welsh Questions have the full allocation of time from 2.35 pm until 3.30 pm so that matters affecting all constituents in Wales can be aired once every third week in the Chamber. I ask you, Mr. Speaker, kindly to review the matter so that that can be accomplished.
    Mr. Speaker: The timing of Questions is not a matter for me——
    Mr. Peter Bruinvels: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I am dealing with a point of order. The timing of Questions is a matter to be taken up through the usual channels. In fact, we dealt with nine questions. Questions 19 and 24 were taken with other questions. I do try during Welsh Questions, as the hon. Member for Ogmore (Mr. Powell) will see if he looks at the Order Paper, to call every Member who has a question on the Order Paper. The hon. Gentleman was not rising at a moment when I could have called him.
    Mr. Williams: On a point of order arising out of questions, Mr. Speaker. You will recollect that during questions the Chancellor of the Duchy of Lancaster said that the statement that no one with a conscience would vote Conservative was—in his term—a libel. Clearly, we do not wish to raise anything in the House that is sub judice, and it has put my colleagues and me in a slightly difficult position. Since it is clearly, in his opinion, a libel, it might be helpful if he said whether a writ has been issued so that we know whether we can discuss the matter.
    Mr. Speaker: Order. That is not a matter for me.
    Mr. Peter Bruinvels: On a point of order, Mr. Speaker. I apologise for being rather over-keen when you were giving a ruling on the first point of order.
    Extremely long answers were given to questions 30 and 32 on the National Audit Office and humbugs. I had questions to the Church Commissioners and to my right hon. Friend the Leader of the House. Could such lengthy answers be recorded rather than read out in full so that hon. Members would not be precluded from asking questions which they have come to the House specifically to ask?
    Mr. Speaker: It is the luck of the draw. The hon. Gentleman will know that the arrangements as set out on the Order Paper is that questions to the Chancellor of the Duchy of Lancaster take precedence over those to the hon. Member answering for the Church Commissioners on this one day.
    Mr. Peter Bruinvels: What about the length of answers?
    Mr. Speaker: I am not responsible for the length of answers.
    Mr. Skinner: On a point of order, Mr. Speaker. My right hon. Friend the Member for Swansea, West (Mr. Williams) raised an important matter about whether the libel matter is sub judice.
    Mr. Speaker: Order. This is not a matter for me.
    Mr. Skinner: It is.
    Mr. Speaker: Well please try to make it so!
    Mr. Skinner: When a matter is sub judice, it is then for Mr. Speaker to tell hon. Members before questions, "Do not get involved in that particular matter because it is sub

    599
    judice." Here we have a statement by a member of the Tory Cabinet, telling us that the allegation is libellous. We want to know from this silent right hon. Gentleman, who is usually so voluable, whether he has issued a writ in respect of this case. Hugo Young writes his column tomorrow, and some of us might even read it, so we want to know. You should know as well, Mr. Speaker, so that you can rule hon. Members out of order, if necessary.
    Mr. Speaker: Order.
    Mr. Hickmet rose——
    Mr. Speaker: Order. It does not help to have more points of order. We shall all know in due course.
    Mr. Hickmet: Further to that point of order, Mr. Speaker. It has been characteristic of the manner in which the Opposition have conducted their opposition in this Parliament that they have used personal innuendo in the Chamber, which is protected by privilege, to make defamatory statements about Conservative Members. For the shadow Leader of the House to condone such behaviour is unparliamentary. Perhaps——
    Mr. Speaker: Order. This is a clear case of a continuation of Question Time. The House must find other ways to raise this matter.
    Mr. Dalyell: On a point of order, Mr. Speaker. It will be within your recollection that, at the end of last year, you
    600
    wrote a long and serious letter about telephone tapping. You will have heard the exchanges today at Question Time. I do not doubt the good faith of the answer given by the Leader of the House, but there are problems here, because international calls appear to be being logged—I do not know whether that is the right term. They are made a note of and registered. There may have been a misunderstanding. Could either you or the Leader of the House consider the issues involved in this, or could the Leader of the House make it clear what his answer involves in relation to international calls of which a note is made? Part of the difficulty in all this is the terminology involved. For instance, my hon. Friend the Member for Blaydon (Mr. McWilliam), who is a telephone engineer, says that telephone tapping is the wrong term and one should talk about electronic interference. The niceties of language do not cover the important substance of the issue. It may be that the Leader of the House would like to clear up the position in relation to international calls when he has the opportunity to do so.
    Mr. Speaker: The Leader of the House will have listened to that.
    Mr. Biffen: I am anxious to help the House. I answered the question that was tabled. I am happy to discuss the matter further with the hon. Gentleman.

Local Government (London)
3.38 pm
Mr. Tony Marlow: 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 breakdown of local government in parts of the capital".
You will have read in yesterday's Sunday Telegraph, Mr. Speaker, that local government is breaking down in Brent, Camden, Hackney, Haringey, Islington, Lambeth, Lewisham and Southwark. In these areas, which above all have one thing in common—they are all Socialist-controlled—costs of providing services are more than twice as great as in similar areas elsewhere, while services are worse, lamentably worse.
The appalling standards of ILEA, where only half those leaving school have O-level equivalent, combine with the Socialist ethos in these boroughs in such a way that, in the richest city in the kingdom, overflowing with work opportunities, one third of men aged between 20 and 24 contrive to claim to be unemployed. That is rose petal Socialism in action. The wrapping may have changed, but the rotten can of writhing snakes is still inside.
The matter is urgent, because of creative accounting. Vast debts are daily being built up which, if met by the local authorities, will lead to further chaos and anarchy. If met elsewhere, there will be a totally unjustified burden on the general taxpayer in order to right the problem. Already, a massive £700 million is owed through deferred purchase schemes. We read today that Haringey may be considering pawning the mayoral regalia along with the office furniture.
It is one thing for the Leader of the Opposition to indulge his fifth form macho fantasies in Ealing; it is another for the long-suffering citizens of London to be socially mugged by his party—the creative force behind urban deprivation. The Labour party does not care. There is urgent need for action from a Government who do. We should debate that now.
Mr. Speaker: The hon. Member has asked leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the breakdown of local government in parts of the capital".
I have listened with care to the hon. Member. I regret that I do not consider the matter that he has raised to be appropriate for discussion under Standing Order No. 20, and I cannot, therefore, submit his application to the House.

Local Government Finance Bill
3.42 pm
Dr. John Cunningham: On a point of order, Mr. Speaker. I seek your guidance on the conduct of the main business before the House today. As all hon. Members are aware, conventions are laid down regarding notice and our procedures following the publication and Second Reading of Bills which are to be considered by the House. In that connection last Thursday I received from the Secretary of State for the Environment a letter which asked me to agree, on behalf of the Opposition, to a method of procedure for consideration of the Bill. I received that letter on Thursday at about 1 pm. It made no mention of the fact that later that day the Government intended to table 38 amendments, two major revisions of clauses and a new schedule, which itself extends to more than 2,000 words.
That information was not printed on the Order Paper until the following day and was not available in the House until after 1 pm on Friday afternoon. That means that no one in local government affected by the legislation had any opportunity over the weekend to consider the legal or financial implications of the changes to the Bill Even worse, the Government have presented us, at a very late stage, with notes on clauses which refer to the Bill as it stands and not to it as it is affected by the Government's amendments.
Such are the depths of confusion and chaos that it is a fair guess that even now scribes are busily working away in the Department of the Environment to amend the amendments. In December, the Secretary of State for the Environment claimed that he was the only person who properly understood what the law was in these matters. Even if that is true, he is signally unable to communicate it to anyone else, even, apparently the officials in his own Department.
The reality is that it would be to the disadvantage of everyone concerned, and certainly to this House and to local government, if we were to consider these matters today—matters, I emphasise, which have major legal and financial significance for the whole of local government and for the totality of rate support grant to be paid for the coming financial year.
I understand that, under the Standing Orders, and specifically Standing Order No. 34, it is possible for you, Mr. Speaker, to accept a motion to adjourn so that we do not consider this business today, thus enabling the Opposition and, for all I know, many Conservative Back Benchers, and certainly those in local government., to consider the major implications of what is proposed before they are considered by the Committee. I seek your guidance and advice in the interests of our protection, Sir.
Mr. Speaker: The proper place to debate this issue is after the Orders of the Day have been read and the House has gone into Committee. I understand that the Chairman of Ways and Means has selected amendments up to clause 9 for consideration today. The hon. Member will have seen from the Amendment Paper that a procedural motion on the order in which the Bill should be considered has been tabled. The debate on that motion is the proper time to raise this matter.
Mr. Andrew F. Bennett: Further to the point of order, Mr. Speaker. With the greatest

603
respect, I put it to you that your duty is to protect the Members of the House and people generally in respect of legislation. You have just suggested that we have a remedy that we can use when the House goes into Committee, but, as I understand it, we may put our points not to you but to the Chairman of Ways and Means, or whoever is in the Chair. It seems to me that we are facing a difficult matter in that the Government are legislating to put right that which the courts found the Secretary of State to have done. Therefore, we have every reason to want to be able to consult local authorities about the legal implications of this legislation.
I found it impossible to get hold of the schedules and to consult either the Stockport or the Tameside local authority to ascertain the legislation's implications. I should have thought that, if we are to have good legislation, it was essential that you protect the rights of Members and people outside the House to consult about the legislation, so that we can make speeches that are relevant to it and can try to persuade the Government to amend it according to the advice from outside. I understand that it will be impossible for us to do that.
I should have thought that, at this stage, Mr. Speaker, you could accept an Adjournment motion so that we can develop our arguments and the Government can justify their great haste in pushing through the legislation without allowing any of us the right to consult local authorities in the areas from which we come.
Mr. Tony Banks rose——
Mr. Allen McKay rose——
Mr. Nigel Spearing rose——
Mr. Speaker: Order. Points of order take up time. I think that I can deal with this matter. As the House will know, I have no authority to determine the business of the House. I do not control the order of business. That is a matter for the Leader of the House and the usual channels. Under Standing Order No. 9 it is not possible for me to accept a dilatory motion from the hon. Member at this stage before the orders of the day have been entered upon.
Mr. Spearing: Further to the point of order, Mr. Speaker. You kindly mentioned in your reply to my hon. Friend the Member for Copeland (Dr. Cunningham) that the Chairman of the Committee could deal with this matter because a procedural motion was likely to be moved before we proceeded with the Bill. Even if that procedural motion were moved, the strict limits of the debate would be of the order of proceedings and not whether it was right to proceed with considering the Bill.
Will you confirm that the point that concerns my hon. Friends could be raised with the Chairman of the Committee at the commencement of the Committee proceedings and that, under Standing Order No. 34, it would be open to the Chairman, if he saw fit—if he did not think that it was an abuse of the rules of the House—to accept a motion to adjourn the Committee and beg to ask leave to sit again if that Question were not put forthwith? I understand that that procedure might be followed. Will you confirm that as it might be helpful in Committee?
Mr. Speaker: I can confirm that the Committee is the proper place to raise these matters. When Members get
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into Committee they will have an opportunity to suggest alternatives to the Secretary of State's procedural motion. It will be up to the Chairman of Ways and Means to consider the matter.
Mr. Peter Shore: Further to that point of order, Mr. Speaker. We understand what you are saying about standing order No. 34 and whether it may be more appropriate for the motion to be moved after you have left the Chair. However, I submit to you, Mr. Speaker, that it is very much for you to give your view about the general conduct of the business today. I should like to re-emphasise the point made by my hon. Friend the Member for Copeland (Dr. Cunningham) that we are very much governed by procedure in the handling of Bills and that a major departure from the conventions is of great disservice to the House. That is what has happened on this occasion.
If complicated new amendments are tabled and made available only on Friday afternoon at 1 o'clock, it rules out all possibility of Opposition Members tabling amendments. Today we are dealing with a provisional selection of amendments that ends with clause 9. I submit that the matters raised in the complicated schedule alone deal with a large number of clauses long before clause 9 is reached. Therefore, the possibilities of amendment and debate of those serious matters are pre-empted if we proceed today.
I ask you, Mr. Speaker, at least to give your view to the House as to the way in which the matter has been handled and whether, in your view, it is a matter with which we should proceed at this stage?
Mr. Speaker: I thank the right hon. Gentleman. Of course, he knows that the role of Mr. Speaker is to ensure that the matters raised are in order. It is not his role to express views on how matters have been handled so long as they are in order.
Mr. Tony Banks rose——
Mr. Speaker: Order. I have already advised the House that I have no authority to do this, and that I do not select the amendments for discussion in Committee. The House should proceed to the Committee stage, where that matter can properly be debated on the Secretary of State's motion.
Mr. Banks: Further to that point of order, Mr. Speaker.
Mr. Speaker: I will accept the point of order.
Mr. Banks: I am sorry to have caused you so much anger, Mr. Speaker, by attempting to rise on a point of order. I should like you to accept my apologies immediately for having so concerned you.
However, the matter goes somewhat wider because it is a matter of order. The fact is that you have constantly told us—we have accepted it—that you are here to protect our rights as Back Benchers. The London borough of Newham is grievously damaged by the Bill. It could be argued that the Government are abusing the House by the way in which they are proceeding with the Bill. We are asking only for an opportunity to act as diligent Back Benchers, in order to protect the interests of those whom we represent. The point that I put to you, Mr. Speaker, is that we have not had a proper opportunity to do so.
Therefore, this is a matter of order, Mr. Speaker, and one upon which you can rule, because it touches upon our ability as hon. Members to protect and advance the interests of our constituents.
Mr. Speaker: There is no question of anger. I said what I did to the hon. Gentleman because he sought to interrupt me. The hon. Gentleman would not wish me to interrupt him.
I advise the hon. Gentleman and the House that I have no authority to do what is suggested. I do not select the amendments for a Committee stage; that is a matter for the Chairman of Ways and Means, and for the Committee, when we get there. Therefore, there is no point in raising the matter with me at this stage.
Mr. Eric Heffer: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I am on my feet.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft Weights and Measures (Carriage of Solid Fuel by Rail) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Durant.]

EUROPEAN COMMUNITY DOCUMENTS
Ordered,
That European Community Document No. 4133/86 on the legal protection of original topographies of semiconductor products be referred to a Standing Committee on European Community Documents.—[Mr. Durant.]

Orders of the Day

  Local Government Finance Bill
  Considered in Committee
  [MR. HAROLD WALKER in the Chair]
  3.50 pm
  Dr. John Cunningham: On a point of order, Mr. Walker. I raised a point of order with Mr. Speaker and he suggested that it was more properly a matter for you. I understand that it would be in order for me to seek leave to move that you report progress and ask leave to sit again. I ask you to accept such a motion because the Government have consciously and deliberately breached the normal convention of our procedures by bringing a large number of amendments of a technical nature, some of considerable length—I have mentioned a new schedule of over 2,000 words—before the House at such a time as to make it impossible for hon. Members to seek any legal or financial advice about them. It was impossible because it was done over a weekend.
  The nature of the amendments seems to make a significant difference to almost 25 per cent. of the Bill so that we are really being asked to consider a Bill that is different from that which received a Second Reading on Monday 12 January. It is a measure of the incompetence of the Department of the Environment that its view of what is required to clarify the law seems to change from day to day. The Secretary of State tabled the amendments on Thursday, as I emphasised, having given no indication on Second Reading that he had any intention of doing so and having given no such indication in a letter to me dated 14 January 1987 seeking agreement about the handling of the Local Government Finance Bill in Committee.
  I put it to you, Mr. Walker, not only that it is unfair, a breach of our conventions and unacceptable procedure, but that it is unacceptable to the Committee that we should discuss today these matters that are so vital not only to Opposition Members but to the whole of local government, which is affected by the Bill. Such is the apparent panic in the Department that the Secretary of State has provided us, apparently generously, with notes on clauses to the Bill. However, the notes refer to the Bill without any of his amendments. Therefore, we do not know whether the notes are of any real value. They may be positively misleading. Further, the amendments that were tabled seek to amend two clauses which are subsequently deleted by further Government amendments. That is another measure of the haste and confusion with which the Government seek to change the law, apparently to clarify it.
  Although the new schedule may be debated much later in our proceedings—I accept that—it directly and materially affects clause 1, which is the first clause we are asked to consider. I draw your attention, Mr. Walker, to page 143 of the Amendment Paper.
  Therefore, I submit that there is a very strong case why you should accept my motion to terminate our proceedings, to report progress and to leave to sit again at an appropriate time by agreement through the usual channels. That will have given us and the local authorities the opportunity properly to consider the amendments and their implications.
  The Chairman of Ways and Means (Mr. Harold Walker): The hon. Gentleman has asked that I accept the motion to report progress and ask leave to sit again. I have listened carefully to the exchanges that preceded the House going into Committee. In the light of what was said then and what has just been said, I believe that it would be wise of me to exercise my discretion, and it is my discretion to accept the motion. I assume that the hon. Gentleman's speech has been in support of the motion. Perhaps he might now move it formally.
  Dr. Cunningham: I am grateful for your use of your discretion, Mr. Walker. I beg to move, That the Chairman do report progress and ask leave to sit again.
  4 pm
  The Secretary of State for the Environment (Mr. Nicholas Ridley): I am happy to respond to the motion which you have accepted, Mr. Walker. However, I cannot advise the Committee to accept it. Perhaps I can allay some of the fears expressed by the hon. Member for Copeland (Dr. Cunningham).
  The hon. Gentleman will know that when I discussed the procedure motion with him—which he subsequently said was agreeable to him—I told him that a number of Government amendments would be tabled. Indeed, many of the Opposition amendments were tabled at the same time as the Government amendments. I see no reason why the Committee should not proceed to consider both the Opposition and Government amendments in their turn.
  Dr. Cunningham rose——
  Mr. Ridley: The hon. Gentleman will be relieved to know that the new schedule—which I agree is long and complex—simply replaces clauses 10 and 11 with some amendment thereto. He will realise that that is the last item to be taken in the manner in which the procedure motion is set out. Therefore, it is unlikely, in view of the number of amendments that must be covered before we reach Clause 9, that that schedule will be reached today. Indeed, if the hon. Gentleman considers——
  Dr. Cunningham: Will the Secretary of State give way?
  Mr. Ridley: I want to finish my sentence. If the hon. Gentleman considers the selection list, he will discover that there are only three groups of Government amendments before the Committee today. Indeed, there are only four Government amendments on the first page. When we come to debate these amemdments—and it might help the hon. Gentleman if he considers the arguments—he may discover that they are minor and technical amendments simply intended to clarify and improve the drafting of the Bill.
  The hon. Gentleman has complained hitherto that the Government were slow to produce this legislation. I can assure him that the rush to introduce this legislation has meant further revisions suggested by leading and parliamentary counsel to clarify the purpose and meaning of the Bill.
  Dr. Cunningham: I want the Secretary of State to consider carefully what he said. Will he confirm that at no time, in writing or in any other form, did he give notice to me or any of my hon. Friends that it was the Government's intention to table so many amendments? Will he also confirm that at no time did he give me any notice—verbally or in any other form—that one of the
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  amendments would cover a full page of the Amendment Paper, as does Government Amendment No. 175 on page 138 or that a second amendment—a new schedule—as I have already emphasised, would run to two and a half pages of the Amendment Paper?
  Does the Secretary of State accept that there was no notification of any such amendment? There could have been no agreement—although I accept that I gave my agreement orally in response to the Secretary of State's letter—if we had been told of the Secretary of State's intentions. Will the Secretary of State confirm the accuracy of my remarks? It is very important for future relations that he should do that.
  The other general issue on this point is that it is a simple statement of truth that we have had no opportunity to consider the amendments. This is not a fabricated argument. No one in the House could possibly have absorbed the implications of the amendments in the time available to us. Therefore, we should not proceed at this point. I hope that the Secretary of State will at least confirm what I have said about the exchanges.
  Mr. Ridley: I was glad to hear the hon. Gentleman confirm that I warned him that a number of Government amendments would be tabled.
  Dr. Cunningham: Twister.
  Mr. Ridley: I did not go into details about the number of amendments or their length. He has acknowledged my point that the amendments in no way change the substance of the Bill in any major fashion.
  Mr. Allan Roberts: How do we know?
  Mr. Ridley: I have been explaining that to the hon. Member for Copeland. That point will be revealed when we debate the amendments. If the hon. Gentleman does not believe me, I hope that he will let the Committee proceed to consider the amendments and in due course what I have just said will be found to be the case.
  It is not right that this urgent Bill, which is necessary if rate support grant is to be paid to local authorities, should be delayed. It is perfectly within the rules of Committee procedure, as the amendments were tabled on time, and I must stress that many of the Opposition amendments were tabled at the same time. I have not stinted to do the work necessary to consider the Opposition amendments and so to be able to respond perfectly properly to those amendments.
  Mr. Tony Banks: Will the Secretary of State give way?
  Mr. Ridley: I do not see why what is sauce for the goose should not he sauce for the gander in this case. I invite the Committe to proceed with the Bill.
  Mr. Tony Banks: I was hoping to catch the Secretary of State's eye before he finished his remarks, because I wanted to ask him whether his mind was made up in relation to his opposition to the motion. However uncomfortable we may find the fact, the Opposition accept that the Government will get their business through. That is the function of government. Indeed, the Government have the majority to add an eighth day to the week if they see fit to do so. Considering some of the Government's recent policies, I would not be at all surprised if that was a later motion.
  Before we consider the Bill, the Secretary of State must accept that we want to consider the clauses and the

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  amendments to the clauses very carefully. This is not a time wasting effort by the Opposition. The Secretary of State may laugh at that, but I hope that he will accept my word on this occasion if on no other when I say that I want to ask him to give us a genuine opportunity to investigate and consider and consult our constituents, and especially the borough councils affected, about the full implications of the amendments that we have not had the opportunity to consider until now.
  When the Secretary of State defended the position—which I agree that he inherited—that the procedures followed by local authorities and by his Department did not conform with the law, he said that it was in part the Opposition's fault for not spotting the deliberate mistake built into the legislation. Obviously we said that that was nonsense. It was not our fault. The Government govern and the Opposition oppose. However, there is something in the Secretary of State's point. If we had had more of an opportunity to consider the full implications of previous legislation, we might not have allowed the Government to make the mistake that they eventually made in the legislation that appeared on the statute book.
  I put it to the Secretary of State, using his own argument, that this must be the opportunity for us to consult the borough councils—I am obviously concerned about Newham—to consider in some detail what the Government's amendments mean. We should then have an opportunity to parade our arguments and voice our feelings. I know that, in the end, we shall be voted down by the Government's majority, as they must get their business, but at least we could do justice to the arguments. I do not believe that the Secretary of State is giving us ample opportunity to do that.
  Everybody accepts that local government finance is getting into such a morass that not one hon. Member can honestly say that he or she understands the current system, how it operates and how it would truly be changed by the Bill. I have been in local government for 16 years and I have a great deal of feeling for it, but I would not suggest that I understand everything in the Bill. Although we are here to oppose, we are in a way party to legislation which the House passes, and it is up to us to try to spot the defects. I should not like to be party to yet another piece of legislation that makes it that much more difficult to understand how local government finance works.
  The Secretary of State should talk to the Leader of the House. That does not require a great deal of physical effort on his part, as his right hon. Friend is sitting right next to him. How can we have any confidence that, when the Bill is enacted, it will not be faulty in some way and therefore lead to even more confusion in local government? I ask the Secretary of State with whatever persuasive powers I have—I know that I have very few with him, and I would not want it to be any different—to think carefully and accept the motion in the interests of good order, the House, local government and good legislation, although we disagree, root and branch, with the Bill.
  Mr. Ian Gow: Exceptionally, you, Mr. Walker, have exercised a discretion that is conferred on you to accept the motion moved by the hon. Member for Copeland (Dr. Cunningham) that you should report progress and ask leave to sit again.
  One might think that the progress which the Committee would be able to report would be scant, but the Committee is not more likely to accept the motion as a result of the
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  speech made by the hon. Member for Newham, North-West (Mr. Banks), who is not a particularly creditable example of the wisdom of those people who have been engaged in local government.
  The hon. Member for Copeland (Dr. Cunningham), who is normally scrupulously fair, has acknowledged that he tabled amendments on the same day as my right hon. Friend the Secretary of State tabled amendments. The hon. Gentleman is saying that the well-known and respected procedures of the House, which allow amendments to be tabled on a Thursday if they are to be considered by the Committee the following Monday, should be set aside in respect of this Bill and this Committee stage.
  One week ago today, the House gave the Bill a Second Reading with a substantial majority. When my right hon. Friend the Secretary of State commended the Bill to the House, he did so on the basis that it would put the law into the condition which everybody, including the hon. Member for Copeland, believe it to be in.
  Ms. Clare Short: That is not true.
  4.15 pm
  Mr. Gow: Oh yes. It was my right hon. Friend and his advisers who discovered that the previous legislation did not have the effect that Parliament intended it to have.
  Mr. Nigel Spearing: Will the hon. Gentleman give way?
  Ms. Clare Short rose——
  Mr. Gow: I wish to develop my argument. I shall give way a little later.
  The Bill's purpose was fully explained to the House and the House agreed and gave it a Second Reading. My right hon. Friend the Secretary of State is now being criticised because he has tabled amendments which you, Mr. Walker, have studied more closely than any other right hon. or hon. Member—with the sole exception of my right hon. Friend which you decided were in order and which you selected.
  Of course it is open to the Opposition to move that you report progress and ask leave to sit again, Mr. Walker, but Conservative Members are entitled to say that everything which my right hon. Friend has done, including the tabling of amendments last Thursday, is wholly in order.
  Mr. Tony Banks: We are not saying that it is out of order.
  Mr. Gow: As the Opposition claimed on Second Reading that they would subject the whole Bill and, therefore, no doubt, possible amendments to it, to the most rigorous scrutiny one might have expected that the hon. Member for Copeland, who is a doctor, would have examined the amendments even before my right hon. Friend tabled them.
  On Second Reading, the Opposition Front Bench said that it would subject the Bill to the utmost scrutiny. That being so, it might have subjected potential amendments to the most rigorous scrutiny. We have a most bizarre spectacle. The Opposition said that they would study the Bill closely, but they are unable to give due consideration to amendments which my right hon. Friend tabled on Thursday—the same day on which the hon. Member for Copeland tabled his amendments. We have not heard my

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  right hon. Friend whinge to the House because he has not had time to study the Opposition's amendments, which also were tabled last Thursday. On the contrary, my right hon. Friend, dragging himself away from the——
  Dr. Cunningham: Will the hon. Gentleman give way?
  Mr. Gow: Or course I shall give way to the hon. Gentleman, whom I would otherwise call my hon. Friend.
  Dr. Cunningham: I am grateful to the hon. Gentleman for giving way and apologise for having had to leave the Chamber briefly, with the result that I missed his earlier remarks.
  Why should it matter when the Opposition tabled their amendments? It is not us who are seeking agreement on a timetable for how we proceed, but the Government. Does the hon. Gentleman think that the Secretary of State should have been, dare I say, candid or honest about his intentions when he wrote to me rather than behave as he did?
  Mr. Gow: It may just be that I have known my right hon. Friend a little longer even than the hon. Gentleman. Throughout the time that I have known my right hon. Friend, I have found him to be totally candid and honest at all times and in all circumstances. Therefore, I reject——
  Mr. Frank Dobson: That is not what the courts said.
  Mr. Gow: The hon. Gentleman must not rebuke my right hon. Friend because, on occasions, the courts have disagreed with him. That does not reflect upon my right hon. Friend's honesty and candour. If the Labour party seeks to rebuke my right hon. Friend on the grounds that he has been lacking in candour, it should recall that it was my right hon. Friend who came to the House to say that previous legislation did not have the effects hoped for by the whole House, including the Labour party.
  Mr. Spearing: I am grateful to the hon. Member for Eastbourne (Mr. Gow). Earlier I attempted to interrupt when the hon. Gentleman said that the Bill would put back the law to what everybody thought it was. Perhaps the hon. Gentleman was not present a week ago today when my hon. Friend the Member for Copeland (Dr. Cunningham) said that, if that was all that the Bill would do, there would not be any great controversy. We believe—this has been admitted by his right hon. Friend the Secretary of State—that the Bill does a great deal more that is prejudicial to local government and the effect of any amendment is likely to be deleterious to local government. It requires the degree of scrutiny and consultation for which we are now asking.
  Mr. Gow: I readily concede that the hon. Gentleman is right—the Bill introduced by my right hon. Friend has a twin purpose. It is, first, to restore the law to that which the House and the other place intended when the legislation was passed in 1980. Its second purpose, which will be immensely welcomed by those, like myself, who live in the Soviet republic of Lambeth, is to give certain further protection to innocent ratepayers—[Interruption.] During the week I happen to live in Lambeth and as a ratepayer I am entitled, along with the great majority of other ratepayers in Lambeth, to say that we welcome the
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  other proposals in my right hon. Friend's Bill that will give further protection to ratepayers. Many ratepayers in Lambeth are absolutely scandalised by some of the expenditure incurred by that council.
  Mr. Stuart Holland: Will the hon. Gentleman specify what excesses he is talking about? Is he aware that last week the boroughs of Lambeth and Camden and other Labour-held boroughs did a great deal to make provision for the elderly and others——
  The Chairman: Order. I think it would be unwise for the Committee to start talking about such matters. They are not the subject of the Question before the Committee.
  Mr. Gow: I would be very happy, if I catch your eye during the later Committee stages, to give a list of the quite outrageous expenditure incurred by Lambeth borough council——
  Mr. Dennis Skinner: Tell us about Eastbourne.
  Mr. Gow: We are not talking about Eastbourne——
  The Chairman: Order. I hope that the hon. Member for Eastbourne (Mr. Gow) will have equal regard to the remark that I addressed to the hon. Member for Vauxhall (Mr. Holland). We shall see what is permissible when we come to the later stages of the Bill, but for now I hope that we shall stick to the Question before the Committee.
  Mr. Gow: I submit myself entirely to your ruling, Mr. Walker and I shall refer to the expenditure of Lambeth on a later occasion.
  It has been agreed, even by the Opposition Front Bench, that it was, in every respect, wholly in order for my right hon. Friend to table the amendments that he did on Thursday. Over the weekend, the Opposition have had time—the time scale has been followed on many occasions—to consider those amendments. On the same day, Thursday, the Opposition tabled a number of amendments to the Bill. It is perfectly proper that the Committee should now embark on a due consideration of those parts of the Bill that are down for discussion today.
  I hope that the Committee will reject the motion moved, most unwisely, by the hon. Member for Copeland (Dr. Cunningham). The Bill ought to be on the statute book at the earliest possible moment. We ought to embark on the Committee stage today as envisaged. I hope that the Committee will reject the advice of the Labour party.
  Mr. Michael Meadowcroft: I support the motion moved by the hon. Member for Copeland (Dr. Cunningham). The Opposition House consists of a number of Opposition parties. It may be that there are some critics on the Conservative Benches. I hope that there are, because many Conservative local authorities will find themselves in severe difficulties if this legislation goes through.
  The exigencies of the electoral system dictate that there should be one spokesman from the alliance in this debate. That does not mean that the matters before us are any the less important. There are a number of Ministers present with their parliamentary private secretaries—the Box can hardly contain all the officials here to support the Ministers. There are also a number of spokesmen present for the official Opposition.
  The Government have tabled a whole series of amendments of the utmost complexity and it has been

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  exceptionally difficult to find enough advice in time to debate them effectively today. It is not just a question whether we have been able to consider those amendments over the weekend. In common with other right hon. and hon. Members I received a letter today from the Association of County Councils that stated:
  "The Government has also tabled a large number of amendments. It has been impossible in the short time available to analyse these in detail."
  Yet here we are this afternoon expected to debate matters before us not because of any culpability on the part of the Opposition parties but because the Government got the legislation wrong. I should have thought that the Government, in the light of their experience, would have been rather more humble in coming before the House with all these complicated amendments. The list of selected amendments is one and a half pages long—and it goes up to only clause 9. There are 34 pages of amendments—some 200 amendments and new clauses. That is hardly conducive to the kind of detailed discussion and debate that Opposition parties and the House have a legitimate right to expect on such matters.
  The hon. Member for Eastbourne (Mr. Gow) is right in the sense that we are seeking to put back the law to what we thought it was, but that is only part of it. It is generally accepted that if this Bill was limited to that purpose we would have readily accepted it and allowed it to to go through without any difficulty. However, the Secretary of State has once again used the threat that if this legislation does not go through there will be problems for local authorities with regard to the rate support grant.
  This Bill contains many provisions that seek to introduce a great deal of uncertainty for local authorities—they will not be able to rely on their budgeting for next year because of what may have happened over the last five years—and it is somewhat rich and ironic for the right hon. Gentleman to say that it is uncertain what will happen to RSG if this Bill is delayed.
  If the Secretary of State's sole concern is to find a way of bringing the RSG settlement before this House, he should have discussions with the usual channels. Those channels would be quite happy to have an interim settlement decided upon and that would make the local authorities happier in their belief that something constructive was being done about their problems.
  It is not just Opposition Members who have brought these matters forward in previous discussions. I am sorry that the hon. Member for Acton (Sir. G. Young) is not in the Chamber. On Second Reading, as a former Minister in the Department of the Environment, the hon. Gentleman admitted that he did not understand the complexities of the RSG. He said that the more he tried to do so, the less grasp of the subject he retained.
  If a Minister can say that, it is certainly not on for the Government to put before the House a whole series of highly complex new amendments, new clauses and schedules to the Bill and to expect us to debate them in a comprehensive and intelligent way.
  Therefore, I hope that it will be possible to have the opportunity to consider the amendments in more detail and to secure the professional advice that we admit that we need to debate such matters thoroughly. I wish to consult those local authorities that my party has the honour to control, including the local authority of the hon. Member for Eastbourne (Mr. Gow). I wish to discover their views.
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  I hope that it will be possible to have such an opportunity. I hope that we shall not have bitterness developing over something which is crucial to many people in this country and which affects the finance and constitutional position of local government. Many of us on the Opposition side had the honour of serving for many years in local government and do not wish to see further legislation which will require more Bills and amendments and raise more legal problems. I beg the Committee to give us more time to consider the matter.
  4.30 pm
  Mr. William O'Brien: I appeal to the Committee to support the motion because of the serious implications that the amendments will have for local government. We should have an opportunity to consider the amendments and especially the new schedule. I should like to consult the authorities that I represent, Wakefield and Leeds, because both are involved and will be affected by the proposed legislation.
  Amendment No. 175 on page 138 of the Amendment Paper mentions information. It changes the old concept of the 1980 Act about information. It is important that we get this matter right in the first instance. If local government is required to supply information to the Secretary of State on the basis of which the Secretary of State would give judgment and perhaps act upon, it is right and fair that the local authorities should have an opportunity to consider the implications of this amendment.
  Hon. Members have not had an opportunity to consult the local authorities that we represent and in which we are involved, and the local authority associations have not had an opportunity to give advice or to put their views on these amendments and the new schedule. It is important that, before we introduce any new legislation about information to be provided by local authorities to the Department of the Environment or, in particular, to the Secretary of State, the local authorities and their organisations should have an opportunity to consider in more detail and in depth the amendments and their legal implications.
  The new schedule mentioned by my hon. Friend the Member for Copeland is causing great worry to local authorities. It specifically refers to the rate support grant and its special provisions. It also mentions consultation. If we are to have legislation affecting local authorities and the provision of rate support grant, it is only fair and just that those local authorities should have an opportunity to consult hon. Members about the implications of the new schedule.
  Against this backcloth of the history of the Government's attack on local government, the motion is correct and should be supported. I hope that the Secretary of State, Conservative Members and the Government will see the importance of the consultation that should take place about the acquiring of information from local authorities. I hope that the Secretary of State and the Government will accept that there is a need for further examination of the new schedule, because of its implications for local authorities, and especially for the local authorities in west Yorkshire that I mentioned.
  I ask the Committee to support the motion. We should allow the business to be so conducted that we can discuss the new schedule in detail and can return after consultations with our local authorities and with the local

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  authority associations. If we had such consultations, we could obtain all the information that we require in order properly to discuss the schedule and the amendments.
  Mr. Andrew F. Bennett: I support the motion. It is clear that we have to protect the procedures of the House and the Committee. I fully appreciate that the Secretary of State is keen to turn everything to do with rates into a farce and to try to convince the country that rates are in such a muddle and a mess that it will be possible for the Government to abolish them without much opposition. That is one of his political aims and he has managed to continue to show so many problems about rates that that would go some way towards supporting his argument.
  Any competent Secretary of State could produce a formula for sorting out the rate support grant which would demonstrate that the rating system works. His purpose in trying to discredit the rate system is political. The trouble with his Bill is that not only is it trying to discredit the whole rating process, it is in danger of discrediting the House. At this stage we ought to be very worried about the procedures of the House.
  The hon. Member for Eastbourne (Mr. Gow) suggested that we were following precedent. Many of my hon. Friends have a lot of sympathy for the hon. Member. He is one of the few former members of the Government to resign on a matter of principle. I have sympathy for that, but we wonder where his future lies. One or two of us who have listened to his speeches recently think that perhaps he is trying to creep back.
  Mr. Dobson: Whether he was going backwards or forwards, he was creeping.
  Mr. Bennett: The alternative, of course, is that perhaps the hon. Gentleman sees his way to becoming part of the Chairman's Panel or developing in some way like that. Following his explanation of procedures, we should be wary of seeing him make progress in that direction.
  The hon. Gentleman claimed that we were following normal procedure. Let us be clear. It is extremely rare for a rates Bill to be taken in all its stages on the Floor of the House. Almost always, such Bills go into Committee upstairs and there are very good reasons for that. The normal advantage for a Bill going through Committee is that it tends to take rather longer and the opportunities for detailed scrutiny are considerable. In addition, there is a considerable time between each of the stages. Therein lies the problem that has been introduced by this legislation.
  Not so long ago the Bill was given a Second Reading. People outside did not have much opportunity to read the original Bill. On Thursday and Friday the amendments started to appear in large numbers on the Order Paper. If this Bill were going to Committee upstairs, the odds are that the first sitting would be tomorrow. Perhaps the Committee would get through the first group of amendments, and, if there was goodwill and a desire to make reasonable progress, it could possibly get through the second group. Therefore, people outside would have until about Thursday to consider most of the Bill.
  People could probably expect the Committee to sit for up to four or five weeks if it was relatively non-controversial. At the end of the Committee's proceedings there would be an opportunity to consider how much
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  progress had been made and to prepare amendments for Report stage. That means that people outside would have considerable time in which to analyse the legislation, look carefully at the problems and bring forward their amendments. That is not what the Government intend. They are insisting that we debate the legislation today and that the amendments should be considered now.
  Let us suppose that some valid points are raised. When must we table amendments for Report? The Government have not yet made it clear when they intend to take the legislation to Report. The implication is that the Government intend to take Report stage at some time on Wednesday. If the public want to consider the amendments made to the Bill and come forward with suggestions for Report stage they will have to produce them by tomorrow. It is totally out of keeping with the normal procedures of the House, which are to provide a reasonable period for scrutiny so that hon. Members can be well briefed and the public can adequately and accurately discuss the legislation.
  The legislation is being rushed through. The House has a bad reputation for rushing through legislation. It is no good for hon. Members to claim that they are giving scrutiny to legislation if it is rushed through in this way. We shall simply run into interpretation problems in the courts or problems with the statutory instruments that arise from legislation. It is our fault if we allow legislation to be rushed through. That is why we should give careful consideration to the motion and consider whether we should say to the Government that we want adequate time in which to scrutinise the legislation, not only for the sake of our constituents and local authorities but for the reputation of the House, which should be concerned to pass good legislation.
  I challenge the Secretary of State to tell us how quickly he thinks that Government Departments can get advice on the detailed legal meaning of clauses. Last week, the Select Committee on Statutory Instruments examined the problems that we encountered with the social security legislation. It took nearly nine months for that legislation to go through the House. It had full scrutiny. One group of amendments was accepted at a fairly late stage in the other place, and the Government are in the process of turning it into a statutory instrument. Quite clearly, they have run into difficulties with that statutory instrument. When the Scrutiny Committee asked for a memorandum, the Government asked for a fortnight in which to get legal advice. If the Government need a fortnight in which to get legal advice on a statutory instrument arising out of legislation, surely, with a complicated Bill such as this, Opposition Members should have a reasonable amount of time in which to take advice. Not only Opposition Members but local authority associations and individual local councils need to take advice to determine whether some hidden implications may cause difficulties for them.
  4.45 pm
  At the moment, all we have is the Secretary of State's statement that there is nothing unacceptable in the amendments. Of course, his record is not good. The courts have ruled against him four times. It appears that, on those occasions, he got the advice wrong. He did not quite understand the legislation. Of course, he knew about the problems with this legislation, so he told us, several months before he confided in the House and told us that

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  we needed legislation. Part of the blame for the rush is his. It is his fault for not bringing forward the legislation and not telling the House about it earlier.
  There are unprecedented powers in the legislation. On this occasion, the Secretary of State says that we are legislating not only to allow judges to interpret the legislation but to stop judges interpreting the legislation. The Secretary of State may be able to tell us that there are many precedents for this, but I have been told by one or two of my hon. Friends that we must refer back several centuries to find an occasion on which a Minister introduced legislation to disfranchise judges. A few people would say that we do not want judges interfering in interpreting legislation. I should have thought that the Conservative party could see only too clearly the dangers of legislating judges out of their role in interpreting the law. It seems to be extremely dangerous.
  That is a totally new element in the legislation as far as rates are concerned. It is one of the reasons why we should give this legislation much more adequate scrutiny than will be possible if the Government insist on rushing it through, taking only a fortnight from the time of the Second Reading to the point at which the Government hope that it will leave the House and head for the other place.
  The Government have a majority and, more or less, can steamroll anything through the House of Commons. I suggest that the Government should think carefully about steamrolling tactics. They have encouraged people in the other place to realise that there are constitutional problems and to spend much more time examining legislation. If the Government do not take notice of the dilatory motion today, Members of the other place will be tempted to take a long time to scrutinise the legislation. They have a duty not only to scrutinise those parts of the Bill that re-establish the status quo—as everyone believed it was—but to look at those parts that introduce new principles such as opting judges out of interpreting legislation.
  The other place should seriously consider amending the legislation so that it merely re-establish the status quo, and take out these new powers and insist that they are properly and fully scrutinised within the normal procedures of the House. That involves about eight or nine months, from Second Reading to a proper Committee stage, to a Report stage and to the remaining proceedings.
  I strongly urge the Committee to support this procedural motion and to allow the proper consultation necessary to pass good legislation.
  Mr. Terry Davis: I support this motion for two reasons, but, first, I press the Secretary of State on one specific point. The Secretary of State, during his response to the remarks of my hon. Friend the Member for Copeland (Dr. Cunningham), told the Committee that on Thursday he informed my hon. Friend that it was the Government's intention to table a number of amendments to the Bill. If the Secretary of State says that he gave that information to my hon. Friend, I am sure that my right hon. and hon. Friends and I will accept his assurance. I suspect that the Secretary of State chooses his words with care. When he told the House that he said to my hon. Friend that it was his intention to table a number of amendments, I asked him to tell us whether those were the words he used to my hon. Friend. Indeed, did the Secretary of State say that he would table a number of amendments or did he give the impression to my hon.
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  Friend that it would be only a few amendments? There is a difference between, on the one hand, tabling three, four or five amendments and, on the other hand, tabling 38 amendments and new clauses last Thursday evening. The Secretary of State owes the Committee a full explanation. He should be more candid with us.
  I refer to the reasons for supporting the motion moved by my hon. Friend the Member for Copeland. Copies of these amendments and new clauses were not available until Friday afternoon. I agree with the hon. Member for Eastbourne (Mr. Gow) that it is in order for amendments to be tabled on a Thursday evening, to appear on the Order Paper on Friday morning and to he debated on Monday. There is no disagreement on that point. The hon. Member for Eastbourne is absolutely correct, hut there was a difference in the procedure last Friday.
  For whatever reason, the amendments were not available on Friday morning. On several occasions, I went to the Vote Office for the latest issue of amendments to the Bill. I take a particular interest in the Bill because it affects the city of Birmingham, and I represent part of the city of Birmingham. I took part in the Second Reading debate. I was interested to discover what amendments were to be tabled. Indeed, I tabled an amendment on Thursday evening, and I wanted to check that it was printed accurately. The Notice Paper was not available on Friday morning. I went to the Vote Office several times and asked for it. My hon. Friends told me that the Notice Paper became available about one o'clock or slightly thereafter, approximately the time at which the House was about to divide on the private Member's Bill.
  It was not possible for Opposition Members to consult their advisers, particularly the officers employed by the local authorities, in their constituencies on Friday. It was only this morning that we saw the large number of amendments that had been tabled by the Government. It is an argument not about whether it is in order but about whether it is appropriate and right for the Committee to debate amendments of such scale and significance on a Monday when they were not available at a reasonable time on the previous Friday. I ask the hon. Member for Eastbourne, whose approach is usually fair, to reconsider his earlier remarks. He asked whether this was in order. There is no argument about that. Of course it is in order. But is it right to proceed in this way? That is why my hon. Friend the Member for Copeland did not raise it as a point of order. Instead he has moved a procedural motion that we should now report progress so that these amendments can be considered by both sides of the Committee and given the scrutiny that they deserve.
  I support my hon. Friend's motion because the scrutiny of this Bill is especially important as it has been brought before the Committee by this Secretary of State. On 16 December 1986 he complained that the Opposition should have picked up the loopholes in legislation. He said that they should have scrutinised the Local Government, Planning and Land Act 1980 more carefully. It does not lie in the mouth of this Secretary of State, therefore, to rush legislation through the House of Commons and subsequently to complain if there are further loopholes. On 16 December 1986 the Secretary of State said:
  "The hon. Gentleman had some fun with his adjectives, but let me ask him what scrutiny he gave to the 1980—"
  and then he was interrupted. He continued:
  "It takes me to do not only my job but the Opposition's job in pointing out what Parliament failed to stop in 1980."

  619
  Will a future Secretary of State come to the House in six or seven years' time and complain that this Bill was not adequately scrutinised in 1987? Supported as usual in his vocal, articulate and vociferous manner by the hon. Member for Eastbourne, the Secretary of State complained that the Opposition had not picked up the deficiencies in the previous legislation. He said:
  "Every hon. Member is in breach of the law in this regard for not having drawn attention to the deficiencies in the system."—[Official Report, 16 December 1986; Vol. 107, c. 1053–1057.]
  We do not intend to be told in six or seven years' time that we have not drawn attention to the deficiencies in this new system. The amendments and clauses have been tabled by the Government at a very late stage. I ask the hon. Member for Eastbourne to withdraw his remarks. Usually he is very fair. Why is he seeking to obfuscate the issue in this way?
  I make no secret of my views about the Bill. It is a shabby Bill, but it is not necessary for the Government to behave in such a shabby way.
  Mr. Jack Straw: The Secretary of State seeks to oppose the motion. Most hon. Members believe that he must do a great deal more explaining before he is able to convince the Committee of the appropriateness of proceeding with the debate this afternoon. I hope that we shall have a proper reply from him before there is a vote on the motion.
  Mr. Ridley indicated dissent.
  Mr. Straw: The Secretary of State has no intention of replying to the debate, Mr. Walker. Are we to anticipate a reply from the Minister of State, or is this another example of the way in which this Government behave—that they never seek to reply to debates? Is there to be a reply by the Leader of the House? It is most unusual for there to be a procedural motion but no ministerial reply. The Secretary of State told us that the amendments that were put down on Friday involve no substantial change to the Bill and that therefore we could debate this matter.
  Mr. Spearing: On a point of order, Mr. Walker. My hon. Friend the Member for Blackburn (Mr. Straw) asked a rhetorical question concerning a ministerial reply to the motion. Can you help me? In Committee it is usual for there to be a reply from a Minister or for there to be a specific intimation by the Minister that he does not intend to reply. Is it possible to discover that now? Unless we do so now, my hon. Friend may be talking to thin air. Are we to have a reply from the Minister?
  The Chairman: As the hon. Gentleman well knows, that is not a matter for me. However, my impression is that from a sedentary position the Secretary of State suggested that he had no intention of responding to the debate.
  Mr. Straw: The Committee will note—[HON. MEMBERS: "Shameful."] Yes, it is shameful. The Committee will draw the conclusion that the Secretary of State accepts that the case lies with us. Since this is the Committee stage, I know that you will confirm, Mr. Walker, that the Secretary of State does not need the leave of the Committee to speak again. It is a gross abuse of the accepted conventions of the Committee for there to be a debate, albeit one that the Secretary of State did not wish to have, and for him to refuse to reply to it. If the Secretary
  620
  of State were to turn round and look at the faces of his hon. Friends, he would see that he is picking up no brownie points by treating the Committee in this arrogant way.
  In support of the arrogant way in which he has behaved, the Secretary of State said that the amendments involve no substantial change to the Bill. There are four reasons why we should not accept the Secretary of State's word. First, as my hon. Friend the Member for Copeland (Dr. Cunningham) made clear, the Opposition were given no notice of the nature of these amendments. I am glad that the Secretary of State admitted that during the discussions through the usual channels no details of the amendments were given and that the clear impression was given that there would be a few technical amendments of the kind that have always been accepted on any Bill.
  The second reason for not accepting the Secretary of State's word that there is nothing in these amendments is that he told us today that long and complex amendments to existing clauses were tabled only last Friday and that two clauses have been replaced. Given the notice that the Opposition have had so far, it is impossible for the Committee properly to decide in what respect those clauses have been amended and to divine their complexity. Even if the Opposition could accept the good faith of Ministers, we know to our cost that undertakings given by Ministers about the nature of legal provisions are of no value after a Bill has become law. Some of us dealt with the Local Government Bill. We should not be in this position if ministerial undertakings as to the meaning of legislation had turned out to be correct. Some of us remember that only 18 months ago Ministers gave undertakings about the way in which the Local Government Bill would impact on the information practices of local authorities, but its impact has been wholly different and restrictive.
  The third reason why we cannot accept the Secretary of State's word is that we have been here before and discovered that his word cannot be relied upon. On 16 December the Secretary of State told the House:
  "The Bill is designed to make no changes in policy, but as far as possible to apply existing policy within a tight timetable."
  In answer to an intervention from the previous Secretary of State for the Environment, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), he said:
  "We are merely validating the past and putting right for the future the position that the whole House thought obtained."—[Official Report, 16 December 1986; Vol. 107, c. 1051–54.]
  We were told that that was all that the Bill would contain. However, we find that the Bill contains major policy changes. The hon. Member for Eastbourne was at least right about that, but what he said was wholly different from what the Secretary of State told us: that authorities are retrospectively penalised because £38 million is to be taken away from 12 authorities, including Birmingham and Cambridge; that the appeal procedure in the Rates Act 1984, which was laid down in this House by Conservative Members only three years ago, is to be abandoned for this year; and, above all, that by this Bill the Secretary of State seeks to put himself wholly above the law.
  I do not know whether Conservative Members have read clause 4(6) or clause 6(4). I ask them to reflect on the

  621
  words used. The Secretary of State gives himself the power to provide that decisions which he makes under clause 6(4) shall have effect
  "notwithstanding any decision of a court (whether before or after the passing of this Act) purporting to have a contrary effect."
  Conservative Members are learned in the law. Can they think of any Act in peacetime in which a Secretary of State has sought to give himself immunity from the law in this way?
  5 pm
  Mr. Richard Hickmet: The hon. Gentleman poses a question on interpretation of the Act and the validity of particular sections. What Conservative Members feel about the Opposition's tactics in relation to the motion is this. Of the 20 authorities that have been ratecapped or are to be ratecapped, 19 are controlled by the Labour party, and one by the alliance parties, affecting about 5·5 million people. The people who are resident in those local authority areas look to the House and the Bill for protection. The Opposition are endeavouring to divert criticism of those local authorities for the spending, social and housing policies that they have pursued. That is the motive of the debate this afternoon.
  Mr. Straw: By his silence on the point the hon. Gentleman has confirmed that there is no precedent in peacetime for a Secretary of State placing himself above the law in this way. If the hon. Gentleman were on the Opposition Benches, he and his hon. Friends would be rightly ferocious in their attack upon any Labour Minister seeking to set himself above the law. If the hon. Gentleman applies himself to the clause, he will see that it is not just a matter of the Secretary of State validating past acts—that is provided for by clause 4(1), and that we accept within the framework of the Bill. Having validated past acts, the Secretary of State then seeks to place himself wholly above the law, immune from any possibility of court action.
  In our judgment, there is no precedent in peacetime for such a procedure since the Bill of Rights in 1688. The purpose of that constitutional settlement was to place Ministers under the control and supervision of the High Court of Parliament. This Bill sets an extremely dangerous precedent, involving a fundamental change of policy, which was not hinted at when the Secretary of State came before the House on 16 December.
  The fourth reason why we cannot accept the Secretary of State's explanation is that it is patent that he, even if he had good faith, has no grip on or grasp of local government finance or the Bill. In answer to my hon. Friend the Member for Bootle (Mr. Roberts), the Secretary of State said:
  "The hon. Gentleman is totally wrong. I am the only person who is quite certain what the law is."—[Official Report, 16 December 1986; Vol. 107, c. 1055.]
  For the Secretary of State the law is a moving target.
  We have been in a situation where the Secretary of State presented a Bill, apparently to clarify and state the law as he says everybody knew that it once was. He then sought to table amendments to clauses 10 and 11. Now he wants to delete them. Today, to assist the House, we have been provided with notes on clauses 10 and 11, which are now to be deleted. I am grateful to the Secretary of State for providing us with notes on clauses that will not exist, but he has failed to provide us with notes on schedules that will replace those clauses that will no longer exist.
  622
  The Secretary of State is not directly responsible for the initial chaos into which local government finance has been plunged by successive Conservative Secretaries of State, but he has made the situation worse.
  The hon. Member for Eastbourne said that standard procedures had been followed. That is not correct, because this is a technical Bill. Every other technical local government finance Bill, as with the technical parts of every finance Bill, is debated upstairs. It is ludicrous for a Committee of the whole House to debate the minutiae of local government finance. Were the Bill debated upstairs, Ministers would give notice of their intention to amend a Bill in this way, and many more than two days would have been allowed.
  The amendments are substantial. The definition of expenditure is changed by amendment No. 6; the way in which principles of accounting are applied to local authorities is changed by amendment No. 153; information requirements for local authorities are changed by one amendment to the schedule. There is a whole new schedule that changes the rate support grant procedures and abrogates the requirements on the Secretary of State to consult local authorities. It disregards other matters. There is a half page on the ways in which the teachers' pay settlement is to be dealt with. The Secretary of State says there is nothing new in this, but there are new matters and we need more than half a working day to take advice upon them.
  In answer to my hon. Friend the Member for Copeland, the Secretary of State admitted that he has known about this farrago since last September. He now comes to the House and says that the matter is urgent. If he had had any sensibility to the views of the House, and any wish to have this matter dealt with urgently and expeditiously, he would have come to us when he got the Attorney-General's advice in October and told us that there was a problem, that he wanted to put it right, but did not want to change the law in any substantive way and asked us to agree a procedure for dealing with this. As my hon. Friend the Member for Copeland has made clear, we would have agreed to look at the draft and the Bill could have gone through on the nod without any of this.
  Instead, the Secretary of State has sued the excuse of legal defects to ambush the House into accepting new and wholly unacceptable changes to local government finance. At the latest stage he has tried to ambush us again. It is unacceptable; this ambush cannot and must not work. I support the motion.
  Several Hon. Members rose——
  The Chairman: The Committee has had a fair run at this and the issue is very clear. I should have thought that the Committee was in a position to reach a conclusion. If hon. Members persist, I have no option but to call them, but I hope that they will bear in mind what I have said.
  Mr. Spearing: The powerful points made by my hon. Friend the Member for Blackburn (Mr. Shaw) have emphasised the behaviour of the Secretary of State, who I hope will not depart because I have personal criticisms to make of him. It is quite clear that in every respect his behaviour over the Bill has shown his contempt of parliamentary procedures.
  I thought that all hon. Members believed in parliamentary democracy; that it was almost a sine qua non of becoming a Member of this place. How the right

  623
  hon. Gentleman can go to the electors of Cirencester and Tewkesbury at the next election and ask to be returned as their Member of Parliament when he has so treated all Members of Parliament—there were criticisms from others on Second Reading—defies all logic.
  The reason for the motion, Mr. Walker, which you have allowed to be put, illustrates the abuse of the place by the Secretary of State. A dilatory motion is a safety valve. The Chair will not allow a dilatory motion to be moved unless there has been an irregularity. That is in the Standing Orders—you will correct me if I am wrong, Mr. Walker—but there has been a hiccup. There is an overwhelming case for interrupting the normal business of the House to allow debate on the Adjournment so that dissatisfaction can be aired. The fact that you, Mr. Walker, have permitted the debate is a sign that in your judgment, and indeed on any objective test, there has been a parliamentary irregularity.
  Conservative Members have no need to smile. Before the Bill was published, two or three deputations from the London borough of Newham had discussions in good faith with the Secretary of State. The Bill destroys all those discussions and everything that went on in a proper manner. It is because of that sort of distrust that the motion has been moved tonight.
  I asked six questions during a speech made almost a week ago to the hour. I asked five factual questions and one of opinion to be answered that night by the Under-Secretary of State for Scotland, and, if he could not do so then, to be answered by the end of last week. No letter was received. This morning, I telephoned the Secretary of State's Private Office and half an hour ago I received a letter from the Minister for Local Government. Does the hon. Gentleman—I ask him because he still may have a chance to sum up—think that that is correct parliamentary procedure since five of my questions related to matters of fact, no opinion? They related to the London borough of Newham, which stands to lose £33 million as a result of the Bill and £6 million, pro rata, from the education budget for next year.
  I want to talk to my town hall officials about the new amendments. I want to ask them about the estimates in the Minister's letter. Because of the timing and the way in which the Government have behaved, I have not had the opportunity to do so. That is why you, Mr. Walker, are justified in letting us debate the matter.
  The Government's behaviour in respect of local government is a matter for debate on the Floor of the House. We think that it is pretty bad. But the Government's provable behaviour in respect of this legislation is completely unparliamentary and smacks of totalitarian attitudes. It is unworthy of any person who calls himself a democrat.
  Mr. Bill Michie: I, too, shall be brief as I agree with all the points made by my hon. Friends in support of the motion. The reasons have been put fairly clearly.
  I want to talk about consultation. Some of my hon. Friends have said that the Secretary of State has treated hon. Members and parliamentary procedure with contempt. I am worried about that, but I am even more worried by the cynical disregard for the democratic process and for local authority officers and councilors
  624
  who have come to see the Secretary of State or his Ministers in the past few months. Some delegations have been completely ignored. No difference seems to have been made by all the facts that have been laid before the Secretary of State and his Ministers. The Minister listened keenly to the delegation from Sheffield while the Bill was being printed across the road. So much for the democratic process, which is being exploited with cynical disregard.
  5.15 pm
  I do not believe that the Secretary of State understands the Bill's implications. If he does understand them, he obviously dislikes local government so much that he is prepared to push it through despite the damage that it is likely to do. The Government should respect the crucial work of local government. I still maintain that local government is the bedrock of democracy in Britain. I still maintain that it actively expresses, yearly, the views of Britain's electorate. I still maintain that it protects local people, and, in particular, poor people, from the abuses of Government, even though the Government seem to accuse local government of abuses. I still maintain that without the safety valve of local government there would be even more disillusionment about parliamentary democracy.
  Therefore, more time is needed for consultation, not just so that we can learn, but so that the Secretary of State can learn the damage that is likely to be done to local government if the Bill goes through unscathed. We need that extra time and I hope that we shall win the vote tonight in order to obtain that extra time for the sake of democracy and local government generally.
  Mr. Dobson: Whatever functions I or any other hon. Member may attempt to carry out in the House, our primary function is to attempt to represent and protect the interests of the people who elected us. This debate is not some shallow procedural wrangle. It is about the capacity of hon. Members, at least on the Labour Benches, to go about their proper business of trying to discover what impact the Bill's proposals and its amendments are likely to have on the lives of the people whom we were elected to represent. In the short time that has been available to us it has been impossible for any of us to find out what the Bill's impact is likely to be.
  If I think of my constituency, with the shivering streets in which the people whom I represent are living, I do not know what the impact of these measures will be. I suspect that they will mean reductions in meals on wheels for old and handicapped people. I suspect that there will be less money for luncheon clubs for old and handicapped people. I suspect that less money will be available for trying to cope with the thousands of homeless people in my constituency. But I do not know, because I have not had time to look at the proposals in detail and to consult the people who can advise me. As an inner London Member, I to some extent have to represent, or try to represent, in the House, the interest of the children, young people and adults who depend on the Inner London education authority for their education. That authority worked hard and quickly to brief me on what the Bill's proposals may do to its ability to provide an education for my children, my neighbours' children and my constituents' children, but it has not yet been able to provide a briefing on the impact of the Government's amendments and new schedule.
  It is impossible for me properly to discharge my primary duty as a Member of Parliament to scrutinise the

  625
  legislation and to try to measure its impact on the people whom I try, inadequately, to represent. There are people who say that the shouting at Prime Minister's Question Time, or various yah-booing activities in this place, bring the House into disrepute. That is trivial in comparison with the way that this sort of cavalier treatment of the House brings it into disrepute. We were sent here to represent our constituents. One of our duties is to scrutinise legislation and the Government's proposition today, and their opposition to the motion, is guaranteed to bring the House into disrepute. We shall be a disreputable body if we let this go through.
  I say to the few Conservative Members who have bothered to listen to any of the debate that when, after the next general election, it is their turn to sit on the Opposition Benches, they should not moan to us if they think that we are pushing things through too quickly. If Conservative Members vote today to treat us in this way—[Interruption.] The hon. Member for Hornsey and Wood Green (Sir H. Rossi) says that this has been done before. Although he is a lawyer, he apparently does not realise that there has never been an occasion when the House has been asked to pass a Bill which, in advance, exempted a Secretary of State from scrutiny in the High Court. That has not been done before and we do not want it done now. Conservative Members should remember that they may live and learn.
  Mr. Laurie Pavitt: The two main thrusts of the argument have been adequately and eloquently covered by my hon. Friends. As we all know, scrutiny for us means consultation with people more expert than we on legal matters. That has been impossible on these amendments. The Committee will know that for the past 12 months I have sought, to the best of my ability, to do my duty by the London borough of Brent, part of which I have the honour to represent. That borough is profoundly affected, not only by the Bill, but by the latest lot of amendments. For the first time in 28 years, I am unable to have the expert advice that I need on amendments.
  Like my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis), I tried to get copies of the amendments on Friday, but could not get them until this morning. As always, I have been in close contact with the London borough of Brent and in particular on this matter with the director of finance. I sent him a copy of Hansard containing the debate on the Second Reading and a copy of the Bill and received in reply a three-page letter, which I studied on Friday. However, the amendments have made half of his points out of date. I cannot adequately do the job I was sent to do because I cannot have the information that I need. We have talked about a north-south divide, but the divide is between the different parts of government—between the Government on one side and local government on the other. This debate represents that division at its most acute.
  The right hon. Member for Cambridgshire, South-East (Mr. Pym) was sacked from the Government for making a true and parliamentary statement—that a large Government majority is unhealthy for parliamentary democracy. We know that we cannot halt these proceedings because the Government will whip the vote. As a result, we shall not have adequate time to take advice on the amendments. The Government should realise that, urgent and important though this matter may be, the delay
  626
  would be for 48 hours only. The motion would give us sufficient time to consult our local authorities and return to the debate on Wednesday.
  The Government's programme is a travesty of parliamentary procedure. This is a new low in the way in which an arrogant Government are seeking to bulldoze their measures through Parliament, irrespective of the rights of constituents and affected bodies. We should be able to debate these matters in the time-honoured way, with time for full consultation. If we followed that way, we would have a much better Bill.
  Mr. Michael Hancock: I apologise to the Secretary of State for missing his speech, but I was talking to the treasurer of Hampshire county council, of which I am a member, to get some points from him. He was explaining that, as a result of the short time scale, he is finding it difficult to make comments to all hon. Members representing Hampshire, as is the normal procedure.
  There is an irony in the debate. On page 2 are some important words about which the Minister must have thought carefully when he formulated the Bill. They are "proper practices be observed". Hon. Members have eloquently explained what they consider to be the proper practices when it comes to giving us the opportunity to discuss properly and fully the implications of the legislation before us. The Government's amendments were tabled just before the weekend, giving little time for them to be examined in depth and for the associations and local authorities that will be affected to make a proper response. There is little time for hon. Members on both sides of the Committee to be properly briefed on the implications not only of the Bill but of the amendments which, as has been said, will have a fundamental effect on what will happen. That is a dereliction of responsibility by the Secretary of State.
  There must be some semblance of fair play in this place. If it cannot be seen to operate fairly, giving all hon. Members equal opportunity to have full and detailed knowledge of what the amendments mean and what their implications will be, that is a sad reflection on the state of democracy in our country. All hon. Members who have spoken from the Opposition Benches have put across that message loud and clear. I hope that, even now, the Secretary of State will tell us what he feels on this important point.
  Question put:—

  Division No. 56]

  [5.25 pm

  AYES

  Abse, Leo

  Buchan, Norman

  Alton, David

  Caborn, Richard

  Anderson, Donald

  Callaghan, Rt Hon J.

  Archer, Rt Hon Peter

  Callaghan, Jim (Heyw'd & M)

  Ashton, Joe

  Campbell, Ian

  Atkinson, N. (Tottenham)

  Canavan, Dennis

  Banks, Tony (Newham NW)

  Carter-Jones, Lewis

  Barron, Kevin

  Cartwright, John

  Beckett, Mrs Margaret

  Clark, Dr David (S Shields)

  Bell, Stuart

  Clarke, Thomas

  Bann, Rt Hon Tony

  Clelland, David Gordon

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

  Clwyd, Mrs Ann

  Bermingham, Gerald

  Cocks, Rt Hon M. (Bristol S)

  Bidwell, Sydney

  Coleman, Donald

  Blair, Anthony

  Conlan, Bernard

  Bray, Dr Jeremy

  Cook, Frank (Stockton North)

  Brown, Gordon (D'f'mline E)

  Cook, Robin F. (Livingston)

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

  Corbett, Robin

  Bruce, Malcolm

  Cox, Thomas (Tooting)

  627

  Crowther, Stan

  Madden, Max

  Cunliffe, Lawrence

  Marek, Dr John

  Cunningham, Dr John

  Marshall, David (Shettleston)

  Dalyell, Tam

  Martin, Michael

  Davies, Ronald (Caerphilly)

  Mason, Rt Hon Roy

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

  Maxton, John

  Deakins, Eric

  Meacher, Michael

  Dobson, Frank

  Meadowcroft, Michael

  Dormand, Jack

  Michie, William

  Douglas, Dick

  Mikardo, Ian

  Dubs, Alfred

  Mitchell, Austin (G't Grimsby)

  Dunwoody, Hon Mrs G.

  Morris, Rt Hon J. (Aberavon)

  Eadie, Alex

  O'Brien, William

  Eastham, Ken

  O'Neill, Martin

  Evans, John (St. Helens N)

  Orme, Rt Hon Stanley

  Fatchett, Derek

  Park, George

  Field, Frank (Birkenhead)

  Patchett, Terry

  Fields, T. (L'pool Broad Gn)

  Pavitt, Laurie

  Fisher, Mark

  Pendry, Tom

  Flannery, Martin

  Powell, Raymond (Ogmore)

  Foot, Rt Hon Michael

  Prescott, John

  Foster, Derek

  Radice, Giles

  Fraser, J. (Norwood)

  Randall, Stuart

  Freud, Clement

  Raynsford, Nick

  George, Bruce

  Redmond, Martin

  Gilbert, Rt Hon Dr John

  Rees, Rt Hon M. (Leeds S)

  Godman, Dr Norman

  Richardson, Ms Jo

  Golding, Mrs Llin

  Roberts, Allan (Bootle)

  Gould, Bryan

  Roberts, Ernest (Hackney N)

  Hancock, Michael

  Rogers, Allan

  Hardy, Peter

  Rooker, J. W.

  Harrison, Rt Hon Walter

  Ross, Ernest (Dundee W)

  Hart, Rt Hon Dame Judith

  Ross, Stephen (Isle of Wight)

  Hattersley, Rt Hon Roy

  Rowlands, Ted

  Haynes, Frank

  Sedgemore, Brian

  Heffer, Eric S.

  Sheerman, Barry

  Hogg, N. (C'nauld & Kilsyth)

  Sheldon, Rt Hon R.

  Holland, Stuart (Vauxhall)

  Shore, Rt Hon Peter

  Home Robertson, John

  Short, Ms Clare (Ladywood)

  Howell, Rt Hon D. (S'heath)

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

  Howells, Geraint

  Silkin, Rt Hon J.

  Hoyle, Douglas

  Skinner, Dennis

  Hughes, Robert (Aberdeen N)

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

  Hughes, Roy (Newport East)

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

  Hughes, Sean (Knowsley S)

  Snape, Peter

  Hughes, Simon (Southwark)

  Soley, Clive

  Janner, Hon Greville

  Spearing, Nigel

  Jenkins, Rt Hon Roy (Hillh'd)

  Steel, Rt Hon David

  John, Brynmor

  Straw, Jack

  Johnston, Sir Russell

  Thomas, Dafydd (Merioneth)

  Jones, Barry (Alyn & Deeside)

  Thomas, Dr R. (Carmarthen)

  Kaufman, Rt Hon Gerald

  Thompson, J. (Wansbeck)

  Kennedy, Charles

  Thorne, Stan (Preston)

  Lambie, David

  Wainwright, R.

  Lamond, James

  Wallace, James

  Leadbitter, Ted

  Wardell, Gareth (Gower)

  Leighton, Ronald

  Welsh, Michael

  Lewis, Terence (Worsley)

  White, James

  Litherland, Robert

  Wigley, Dafydd

  Livsey, Richard

  Williams, Rt Hon A.

  Lloyd, Tony (Stretford)

  Wilson, Gordon

  Lofthouse, Geoffrey

  Winnick, David

  Loyden, Edward

  Woodall, Alec

  McCartney, Hugh

  Wrigglesworth, Ian

  McDonald, Dr Oonagh

  Young, David (Bolton SE)

  McKay, Allen (Penistone)

  McNamara, Kevin

  Tellers for the Ayes:

  McTaggart, Robert

  Mr. James Hamilton and

  McWilliam, John

  Mr. Don Dixon.

  NOES

  Aitken, Jonathan

  Bowden, Gerald (Dulwich)

  Alexander, Richard

  Boyson, Dr Rhodes

  Ancram, Michael

  Brandon-Bravo, Martin

  Atkins, Rt Hon Sir H.

  Brown, M. (Brigg & Cl'thpes)

  Best, Keith

  Browne, John

  Biffen, Rt Hon John

  Bruinvels, Peter

  Biggs-Davison, Sir John

  Carlisle, Kenneth (Lincoln)

  Body, Sir Richard

  Chope, Christopher

  Bottomley, Peter

  Clark, Sir W. (Croydon S)

  628

  Clarke, Rt Hon K. (Rushcliffe)

  Knight, Dame Jill (Edgbaston)

  Cope, John

  Knowles, Michael

  Corrie, John

  Knox, David

  Dickens, Geoffrey

  Latham, Michael

  Dorrell, Stephen

  Lawler, Geoffrey

  Douglas-Hamilton, Lord J.

  Lawrence, Ivan

  Dykes, Hugh

  Lee, John (Pendle)

  Eyre, Sir Reginald

  Lennox-Boyd, Hon Mark

  Fallon, Michael

  Lester, Jim

  Farr, Sir John

  Lewis, Sir Kenneth (Stamf'd)

  Favell, Anthony

  Lightbown, David

  Fenner, Dame Peggy

  Lilley, Peter

  Finsberg, Sir Geoffrey

  Lloyd, Sir Ian (Havant)

  Fletcher, Sir Alexander

  Lloyd, Peter (Fareham)

  Fookes, Miss Janet

  Lord, Michael

  Forth, Eric

  Luce, Rt Hon Richard

  Fox, Sir Marcus

  McCrindle, Robert

  Franks, Cecil

  Macfarlane, Neil

  Fraser, Peter (Angus East)

  Maclean, David John

  Freeman, Roger

  McLoughlin, Patrick

  Fry, Peter

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

  Gale, Roger

  McQuarrie, Albert

  Galley, Roy

  Madel, David

  Gardiner, George (Reigate)

  Malins, Humfrey

  Garel-Jones, Tristan

  Malone, Gerald

  Glyn, Dr Alan

  Maples, John

  Goodhart, Sir Philip

  Marlow, Antony

  Goodlad, Alastair

  Marshall, Michael (Arundel)

  Gow, Ian

  Mather, Sir Carol

  Gower, Sir Raymond

  Maude, Hon Francis

  Grant, Sir Anthony

  Maxwell-Hyslop, Robin

  Greenway, Harry

  Mayhew, Sir Patrick

  Griffiths, Peter (Portsm'th N)

  Mellor, David

  Grist, Ian

  Merchant, Piers

  Ground, Patrick

  Meyer, Sir Anthony

  Grylls, Michael

  Mills, Iain (Meriden)

  Hamilton, Hon A. (Epsom)

  Mills, Sir Peter (West Devon)

  Hamilton, Neil (Tatton)

  Moate, Roger

  Hampson, Dr Keith

  Monro, Sir Hector

  Hanley, Jeremy

  Montgomery, Sir Fergus

  Hannam, John

  Morris, M. (N'hampton S)

  Hargreaves, Kenneth

  Morrison, Hon P. (Chester)

  Harris, David

  Moynihan, Hon C.

  Haselhurst, Alan

  Mudd, David

  Havers, Rt Hon Sir Michael

  Nelson, Anthony

  Hawkins, C. (High Peak)

  Neubert, Michael

  Hawkins, Sir Paul (N'folk SW)

  Nicholls, Patrick

  Hawksley, Warren

  Norris, Steven

  Hayes, J.

  Onslow, Cranley

  Hayhoe, Rt Hon Sir Barney

  Oppenheim, Phillip

  Hayward, Robert

  Ottaway, Richard

  Heathcoat-Amory, David

  Page, Sir John (Harrow W)

  Henderson, Barry

  Page, Richard (Herts SW)

  Heseltine, Rt Hon Michael

  Patten, J. (Oxf W & Abgdn)

  Hickmet, Richard

  Pattie, Rt Hon Geoffrey

  Hicks, Robert

  Porter, Barry

  Higgins, Rt Hon Terence L.

  Powell, William (Corby)

  Hind, Kenneth

  Price, Sir David

  Hirst, Michael

  Proctor, K. Harvey

  Holland, Sir Philip (Gedling)

  Raffan, Keith

  Holt, Richard

  Raison, Rt Hon Timothy

  Hordern, Sir Peter

  Rathbone, Tim

  Howard, Michael

  Rhodes James, Robert

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

  Rhys Williams, Sir Brandon

  Howarth, Gerald (Cannock)

  Ridley, Rt Hon Nicholas

  Howell, Ralph (Norfolk, N)

  Ridsdale, Sir Julian

  Hubbard-Miles, Peter

  Rippon, Rt Hon Geoffrey

  Hunt, David (Wirral W)

  Roberts, Wyn (Conwy)

  Hunt, John (Ravensbourne)

  Robinson, Mark (N'port W)

  Hunter, Andrew

  Roe, Mrs Marion

  Irving, Charles

  Rossi, Sir Hugh

  Jackson, Robert

  Rost, Peter

  Jessel, Toby

  Rowe, Andrew

  Johnson Smith, Sir Geoffrey

  Ryder, Richard

  Jones, Gwilym (Cardiff N)

  Sackville, Hon Thomas

  Jones, Robert (Herts W)

  Sainsbury, Hon Timothy

  Joseph, Rt Hon Sir Keith

  Sayeed, Jonathan

  Kershaw, Sir Anthony

  Shaw, Giles (Pudsey)

  Key, Robert

  Shaw, Sir Michael (Scarb')

  King, Roger (B'ham N'field)

  Shelton, William (Streatham)

  629

  Shepherd, Richard (Aldridge)

  Thorne, Neil (Ilford S)

  Shersby, Michael

  Thurnham, Peter

  Silvester, Fred

  Townend, John (Bridlington)

  Skeet, Sir Trevor

  Townsend, Cyril D. (B'heath)

  Smith, Sir Dudley (Warwick)

  Tracey, Richard

  Smith, Tim (Beaconsfield)

  Twinn, Dr Ian

  Soames, Hon Nicholas

  van Straubenzee, Sir W.

  Speed, Keith

  Vaughan, Sir Gerard

  Spencer, Derek

  Waddington, Rt Hon David

  Spicer, Jim (Dorset W)

  Wakeham, Rt Hon John

  Spicer, Michael (S Worcs)

  Waldegrave, Hon William

  Squire, Robin

  Walker, Bill (T'side N)

  Stanley, Rt Hon John

  Waller, Gary

  Steen, Anthony

  Ward, John

  Stern, Michael

  Wardle, C. (Bexhill)

  Stevens, Lewis (Nuneaton)

  Watts, John

  Stewart, Allan (Eastwood)

  Wells, Bowen (Hertford)

  Stewart, Andrew (Sherwood)

  Wells, Sir John (Maidstone)

  Stokes, John

  Wheeler, John

  Stradling Thomas, Sir John

  Whitney, Raymond

  Sumberg, David

  Wilkinson, John

  Tapsell, Sir Peter

  Wolfson, Mark

  Taylor, John (Solihull)

  Yeo, Tim

  Taylor, Teddy (S'end E)

  Young, Sir George (Acton)

  Temple-Morris, Peter

  Younger, Rt Hon George

  Terlezki, Stefan

  Thomas, Rt Hon Peter

  Tellers for the Noes:

  Thompson, Donald (Calder V)

  Mr. Tony Durant and

  Thompson, Patrick (N'ich N)

  Mr. Michael Portillo.

  Question accordingly negatived.
  Motion made, and Question put,
  That the Bill be considered in the following order: Clause 1, Schedule 1, Clauses 2 to 7, Schedule 2, Clauses 8 to 12, Schedules 3 and 4, Clauses 13 to 17, new Clauses, and new Schedules—[Mr. Ridley.]
  The Committee divided: Ayes 233, Noes 175.
  Question accordingly agreed to.

Clause 1

  RATE FUND REVENUE ACCOUNTS
  Dr. Cunningham: I beg to move amendment No. 2A, in page 1, line 16, at end insert—
  (1A) 'Subsection 1 of this section shall come into effect after the making of an Order by the Secretary of State, and no such Order shall come into effect until any hearings in progress at the date of introduction of this Act (whether expedited or otherwise) have been completed in the courts in respect of applications for judicial review brought against the Secretary of State regarding the Rate Support Grant settlement for 1986–87 or previous financial years.'.
  The Second Deputy Chairman of Ways and Means (Sir Paul Dean): With this it will be convenient to take the following amendments: No. 2B, in page 1, line 16, at end insert—
  '(1A) Subsection 1 of this section shall come into effect after the making of an Order by the Secretary of State. and no such Order shall come into effect until after the laying before Parliament by the Secretary of State of a report setting out the dates, and any other details which he may consider relevant, of the legal advice received by him prior to the introduction of this Act with respect to the legal interpretation of "relevant" and "total" expenditure for Rate Support Grant purposes.'.
  No. 81, in clause 4, page 5, line 5, leave out subsection (6).
  No. 83, in page 5, line 6, leave out 'whether'.
  No. 84, in page 5, line 6, leave out 'or after'.
  No. 85, in page 5, line 7, at end add
  'save those decisions of a court in respect of litigation before the courts on 12th January.'.
  No. 100, in clause 6, line 1, leave out subsection (4).
  No. 102, in page 6, line 2, leave out 'whether'.
  No. 103, in page 6, line 2, leave out 'or after'.
  No. 104, in page 6, line 3, at end add
  'save those decisions of a court in respect of litigation before the courts on 12th January 1987'.
  Dr. Cunningham: This large group of amendments deals with the provisions in the Bill that seek to give the Secretary of State various legal immunities, that seek also to prevent legal challenges being pursued against the Secretary of State, as they have been in the past, and with matters associated with those general points.
  The first group of amendments would delay the implementation of the Bill, pending the making of orders in the House of Commons. However, the Government's policies on local government finance and on the law governing it are now in such a complete shambles after almost eight years of legislative and administrative change, and are so confused and inexplicable—even from the Treasury Bench—that we should not rush ahead with the further powers contained in the Bill, as we are, but build some safeguards into the legislation so that

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  Parliament can have a subsequent opportunity to scrutinise, discuss and debate those matters before confirming any actions by the Secretary of State.
  From the outset, my hon. Friends and I have emphasised that the Bill is not simply confined to sorting out the mess that I have briefly described. It gives substantial additional powers to the Secretary of State to intervene in local authority accounting, introduces rate limitation in 1987–88 by formula, and excludes the courts from reviewing the Secretary of State's decisions.
  There is such confusion over the current position that it is wrong for the Government to use the Bill to impose even more arbitrary decisions. We cannot take those matters lightly. I re-emphasise that, however technical, difficult and complex the Bill is, no part of our scrutiny of it will include talking for the sake of talking, or filibustering. We recognise that there are many amendments before the House—we have tabled many of them—and if we are satisfied with the explanations given by the Secretary of State or Ministers, we shall pass on quickly to the other matters before the House. That is a general statement of our position, and that has always been my position when dealing with legislation. We are not interested in talking and delaying the Committee just for the sake of it. Nor are we interested in putting tomorrow's debate in jeopardy because Opposition Members have deliberately chosen a debate on the failure of the Government's economic policies. I should like to make that absolutely clear at the outset.
  Amendment No. 2A raises an issue that is especially important to the boroughs of Greenwich and Islington. Greenwich had challenged various aspects of the 1986–87 rates support grant settlement in the courts and was part way through those proceedings when the Bill had its Second Reading. The borough of Islington had also mounted a legal challenge against the Secretary of State's actions, but was at an earlier stage in its proceedings.
  Apparently, the Government feared, or believed, that those legal challenges would be successful and that they would cause not only serious embarrassment to the Government, but serious difficulties for the Government's policy of rate limitation in the current financial year, let alone difficulties in the future.
  The effect of the Bill, validating retrospectively all previous decisions under the Rates Act 1984 and rate support grant decisions by the Secretary of State and attempting to exclude those decisions from judicial scrutiny, is to terminate the legal proceedings that have been initiated by the London boroughs that I have mentioned. That is unacceptable.
  In effect, Parliament is being asked to validate previous unlawful acts without knowing in what ways the Secretary of State may have acted unlawfully. His statement on 16 December 1986 admitted to one way in which we know that he has been acting outside the law in the definition of total and relevant expenditure. Opposition Members have continually emphasised that if it was simply that a correction would make the de jure situation accord with the de facto situation, I do not suppose that today's proceedings would have lasted even this long. We could all have agreed and gone on to debate the other urgent matters before us. However, as we have emphasised, that is not the ease.
  The court cases to which I have referred sought to review other aspects of the Secretary of State's use of his discretion. The Bill excludes those matters from scrutiny,
  634
  also. The Government should allow the implementation of that blanket exclusion from the courts to await the decisions of the cases that are currently in progress, if Parliament is not to be accused, as my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) and other hon. Members have suggested, of taking a big leap in the dark, which is what the Secretary of' State is asking us to do.
  Similarly, amendment No. 2B would delay the implementation of the Bill until the Secretary of State had laid a report setting out the dates of, and other background information relating to, the legal advice that he has received on the lawfulness, or otherwise, of block grant arrangements.
  On Second Reading, on 12 January, the Secretary of State conceded that he first became aware of the problem in September. However, in December last year he suggested that he had first become aware of the problem in October. We have asked him to be specific about that but, so far, he has failed to do so. I should like to ask him now, since he has had the time to check his file, which is what he said that he did not have the time to do during the debate on Second Reading, exactly when he was told of that situation. What was the date? We are even entitled to ask the time of day when he was first advised of the problem. However, the Committee is certainly entitled to know the date on which the Secretary of State was first advised of the matter. That is important for several reasons.
  The Secretary of State has repeatedly said that the matter should be clarified urgently, and my hon. Friends and I agree with him on that. However, it cannot be so urgent because he delayed for almost four months, certainly for three months, before coming to the House to advise hon. Members of the problem. Having told us about the problem, he still did not advise us about his intended solutions.
  Therefore, we are now perfectly entitled to ask for a specific, clear and unequivocal answer, because the Secretary of State can no longer hide behind the excuse that the Bill has been treated in that way because of its urgency. The Secretary of State has had more than sufficient time to deal with the matter far more effectively, efficiently and candidly than he has to date. Other questions follow from that. Should the legal doubts raised have been sufficient to affect the issue of the first rate support grant consultation document on 3 October? I said the first consultation document, but I think that I probably mean the second. The first had come much earlier and the third, as we know, came in December. Why was there no reference to the problem at the date of issue of that consultation document and in subsequent consultation documents? Why did the Secretary of State proceed with the rate support grant settlement if he knew that he was not going to be able to legislate without a series of major changes to the law? On what specific date did the Attorney-General give his advice to the Secretary of State? Was that before or after his announcement of 3 December?
  It seems that the Government did not move with undue haste or show any alacrity in seeking to find a solution to the problem. On the contrary, they are open to the charge that they have been very dilatory, at least in the early stages. They are now using a delay of their own making to argue that the Bill is urgent. How can the Bill be described as urgent if it has taken so long to bring it before the House and when it is still apparently taking a great deal

  635
  of effort and energy to get the provisions right and to clarify the law? What the Secretary of State continues to present as a technical measure goes much further in terms of ministerial power. None of this would have been necessary and the normal, re-determined, processes in the Rates Act 1984 could have proceeded after, at most, a short delay if the Government had introduced a simple technical measure when they first became aware of the problem. We need a substantive answer to that question.
  Amendments Nos. 82, 83, 84 and 85 relate to clause 4 of the Bill. They are pertinent to the exclusion of the courts from rate support grant cases. The amendments relate specifically to clause 4(6) which seeks to override any court decision and prevent it from having any effect where it is contrary to the Bill's intentions in respect of rate support grant settlements up to and including 1986–87. In previous exchanges the Secretary of State has indicated to me and the House that he thinks that we are misinterpreting those aspects of the Bill. He will have the opportunity to try to convince us of that this evening and perhaps in subsequent debates on these matters.
  6 pm
  Having discussed the issue since Second Reading, we are clearly and firmly advised from within local government that its interpretation of the proposals is as we suggested it was on Second Reading. However, the Bill does not provide for the circumstances in which a challenge is undertaken but the court's decision does not have a contrary effect to that intended by the Bill. Presumably, the decision will have effect in such cases. As my hon. Friend the Member for Blackburn (Mr. Straw) pointed out on Second Reading, it would still appear to be open to authorities to seek judicial review of decisions which are outside the exclusions in the Bill in order to shed light on legal interpretations in areas where demands are excluded.
  Amendment No. 82 should remove the relevant words from the subsection and insert wording to restore the existing right of any council or ratepayer to seek judicial review of ministerial action. It appears to us that not only are councils' rights affected by the provisions of the Bill, but the rights of ratepayers as well. If that is so, it flies in the face of what Ministers have erroneously claimed again and again for their legislation, which is that it is aimed at being beneficial to individual ratepayers. That argument can certainly no longer be used with any credence in terms of the changes in rate support grant over the past seven years and we would argue that it cannot be used in respect of the provisions in the Bill because ratepayers would no longer have the right that they have had for a considerable time.
  My understanding of amendments Nos. 83 and 84 is that they would have the more limited effect of removing the exclusion in respect of decisions taken after the passing of the Act. Perhaps we shall hear more about that from the hon. Member for Leeds, West (Mr. Meadowcroft).
  Amendment No. 85 is more specific, although it would have a different effect. Decisions on cases before the courts by the date of Second Reading, 12 January 1987, would stand whether contrary to the Bill or not. That would mean that the case initiated by the London borough of Greenwich in particular would have the opportunity of obtaining a meaningful decision in the courts. It seems
  636
  wrong to us for legislation to be rushed through after a case has started with the purpose being, at least in part, to negate the possible outcome of a case before a decision has even been reached. We have put that to the Secretary of State before. We have suggested that all this has happened because of such legal challenges. He has said that that is not the case. However, the implications of the provisions of the Bill are exactly that. They would obviate a decision being reached in the courts. We believe that that is being done to prevent further embarrassment to the Secretary of State because he has abused his existing powers.
  I can well understand the right hon. Gentleman not wanting an accumulation of such events. After all, there have been one or two spectacular cases in the courts dealing with his abuse of powers and his misjudgment as to what the law says. He and the Government have been considerably embarrassed as a result. I can understand him not wanting too many more of those on the record. However, I cannot think of many Ministers in many Governments who have sought to introduce legislation to block cases that were halfway through their proceedings in the courts. It is an ingenious proposition. I give the Secretary of State high marks for—what would be the expression?—his nerve or entrepreneurial skills in blocking the decision of the courts.
  Mr. Tony Banks: Can my hon. Friend think of any decision by a Minister in recent years that would have been described, as one of the Secretary of State's decisions was described by the courts, as
  "unlawful, irrational and procedurally improper"?
  Can my hon. Friend think of any other occasion when a Minister has been so castigated by a judge in a court?
  Dr. Cunningham: I can remember many occasions when Ministers in this Government have acted irrationally. They have not always been castigated by a judge for doing so. However, we have just seen a combination of irrationality and irascibility on the part of the right hon. Gentleman in trying to bounce Government amendments through the Committee in this way. That has led to a debate which need not have taken place if the Secretary of State had acted more soberly in the first place.
  My hon. Friend the Member for Newham, North-West (Mr. Banks) was referring to the judges' comments about the Secretary of State's actions in respect of the Greater London council and London Regional Transport. The Secretary of State had sought to misappropriate, or take unlawfully, £50 million from the Greater London council. At any rate, I believe that that was the figure.
  Mr. Tony Banks: Absolutely.
  Dr. Cunningham: I thought that my memory was accurate on that point. The Secretary of State is now presenting provisions that, in effect, mean that he will not wait for a judge to determine against him; he will legislate to prevent the case reaching the point when a judgment would be forthcoming.
  The provisions relating to excluding the courts have serious constitutional implications. It is acknowledged that statute law has precedence over the decisions of judges and that matters to clarify law, or innovation by statute, are almost always preferable as instruments of policy to the common law. It is equally important, however, that a mechanism should exist for interpreting legislation in cases of disputes. Historically, the courts have always been able to do that in such matters.

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  Clause 4(1) makes it clear that the scope of the Secretary of State's actions, which are to be respectively validated, are very wide. It states:
  "Anything done by the Secretary of State".
  The Secretary of State is giving himself an enormous and a wide-ranging administrative discretion in respect of rate support grant allocations and the formula from which the allocations are derived. We know why he wants to do that. Indeed, he has already done that, in effect, in the past three months in his series of three, unprecedented consultation documents. He has made proposals, withdrawn them, made new proposals and withdrawn them.
  Mr. Ridley: I want to make a small point which may not be relevant to the Bill. We must get away from this mistaken view of three attempts, which the hon. Gentleman has spoken of, in typical and inaccurate fashion. It is normal practice to issue a global RSG proposal and later to issue a detailed breakdown containing the details affecting each different authority. The only change that was made was that I issued two of the latter detailed statements. However, all previous settlements have contained the global and detailed statements.
  Dr. Cunningham: I accept the Secretary of State's explanation. He has said that he issued a statement and two consultation documents. However, that action was without precedent as far as we can tell. He has already used a very loose interpretation of the position to redistribute money from authorities, such as Birmingham, to satisfy his hon. Friends in the southern, Tory-controlled shire counties.
  Mr. Denis Howell: Why are they not here?
  Dr. Cunningham: They are not here because they are satisfied that the Secretary of State is a pushover and they have got what they wanted. In this legislation, the Secretary of State is trying to prevent other authorities, which may be dissatisfied, from mounting a legal challenge against him. Many authorities are already dissatisfied and my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) represents one such authority, the city of Birmingham.
  6.15 pm
  We cannot accept that there are any proper grounds for seeking such a blanket exclusion of judicial review unless the Department and the Secretary of State are concerned at other aspects of the validity of past settlements. The only possible argument that the Government can mount is that they wish to preserve certainty over past and current settlements after the upheaval of discovering the illegality of their past allocations. We do not believe that that argument stands even the most cursory examination. The effect of the Government's promises will be to override cases in preparation or before the courts, for example, with respect to Islington and Greenwich.
  That will preclude any other possible challenges, even for the current year which has not yet finished. The provision does not preserve a just position against opportunist challenges. It enforces what we and many local government authorities view as an unjust position in the face of challenges, which, as I have emphasised, have not yet been determined. In other words, the Secretary of
  638
  State is taking one view of the law from his position and an entirely different view of the due processes of law in respect of the position of those who disagree with him.
  Amendment No. 100 relates to clause 6. Clauses 4 and 6 are similar. The Secretary of State should be asked to cite the precedent for a provision to negate a judgment of the court made after the Royal Assent to a Bill and the various other aspects of the provisions. My understanding is that a judgment either has or has not a contrary effect to the Secretary of State's suggestion. The subsection seems to operate on the basis that the Government are uncertain about how the courts will interpret the provisions of the clauses. The clauses therefore reflect a lack of confidence in the legal advice and legal position and, consequently, the detailed drafting of the Bill that the Secretary of State has presented. If that is true, it is no wonder that there are already a whole clutch of new amendments, and, as I said earlier, we confidently anticipate even more amendments from the Department of the Environment.
  Through amendment No. 100 we are trying to delete subsection (4) from clause 6, which seeks to deny access to the courts in the same way as subsection (6) of clause 4. We are trying to delete it because if the Bill was carried in its present form it would prevent access to the courts by any local authority aggrieved at being designated by the Secretary of State as being rate-capped or aggrieved at the precise decisions made on rate limitation. That prohibition of litigation with respect to rate-limited authorities applies to financial years 1985–86, 1986–87 and 1987–88. The same general arguments apply with regard to subsection (4) as those that I have used in respect of other amendments relating to the powers of the courts and the legal rights of local authorities which may wish to seek redress in the courts.
  Amendment No. 104 is linked in terms of its purposes to amendment No. 100. It is a less satisfactory option but it nevertheless allows access to the courts if litigation was begun by local authorities and was still before the courts on the date of Second Reading of the Bill—12 January. That is the position with regard to Greenwich and Islington.
  I want to consider the Greenwich case in more detail before I finish and my view of the case is shared by the legal advisers of Greenwich council. The Bill sought to quash the 1986–87 rate limitation order as it related to Greenwich. That part of the challenge has succeeded. The Secretary of State consented to judgment in favour of Greenwich and a consent order was made by the High Court on 17 December. That is why we think that there has always been some connection between the activities and the decisions—and even the timing—of the Secretary of State and what was going on in the courts with respect to the Greenwich challenge to his actions.
  The challenge also tried to prohibit the Secretary of State from redetermining multipliers which were determined for the London boroughs in the rate support grant report for England in 1986–87, as proposed by the Department of the Environment consultation paper LGF(G)8650. This part of the challenge is yet to be heard. It would have come before the courts later this month. The proposals have now been embodied in the 1986–87 first supplementary report, which the Secretary of State announced to the House on 13 January. He anticipated the outcome of those proceedings and seems to have accepted that he would have lost there too.

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  All this is very complicated, but it boils down to the fact that, faced with one substantial legal challenge to his present actions, the Secretary of State decided that he would empower himself to set aside court decisions because he believed that he would lose. He has consistently said that he is not seeking retrospective powers and that we have misinterpreted the arguments about this part of the Bill. We still do not accept that. The Secretary of State may tell us that it is other arguments that we have advanced which are the misinterpretations. With Greenwich and, we suspect, with Islington and, for all I know, others, the Secretary of State was in danger of having the courts overturn what he had done, and he is now legislating to prevent any local authority from having an opportunity to challenge what he is proposing.
  I should like to emphasise what my hon. Friend the Member for Blackburn and others have said about these being unprecedented powers. I look forward to hearing what the Secretary of State has to say. Several of my right hon. and hon. Friends want to ask questions about general issues and about the authorities that they represent.
  Mr. Ridley: It may be for the convenience of the Committee if I speak fairly briefly now to state the case as I see it in regard to matters which the hon. Member for Copeland (Dr. Cunningham) has raised. That does not exclude me from replying to arguments that are made later in the debate.
  The hon. Member for Copeland has not quite understood the legal provisions in relation to court cases and I shall try to put the record straight on what the Bill does. The hon. Gentleman is in a bit of a muddle today. Having agreed the procedure motion, he voted against it. It is not quite clear to me how he would like it changed. There seems to be a great deal of steam and emotion about the Bill, which is not based, as far as I can see, on the facts of what it would do. Perhaps, therefore, it would be helpful if I set out what it would do.
  I should like to put one irrelevant point aside first. It is amendment No. 2B, which proposes that the Bill should not come into effect until an order has been made and I have published practically the whole history of my dealings with this matter and said when I had received legal advice. I should like to make it absolutely clear what happened.
  I first heard that there was a problem towards the end of September—as I said to the House earlier. The problem was discussed, and we sought legal advice as it was not clear whether the problem was real. I eventually decided to refer the matter to my right hon. and learned Friend the Attorney-General. His advice was finally received in late October—as I have previously told the House. That was the first moment when the Government decided that it was necessary to tackle the problem. Before we received that advice, we were not clear whether we had to tackle the problem.
  Dr. Cunningham: Bearing in mind the seriousness of the problem—it affected rate support grant for all local authorities—why did the right hon. Gentleman allow the Attorney-General to take such an apparently leisurely view of his second opinion? Why did it take so many weeks for the Attorney-General to confirm that there was a problem? If it was as urgent as the right hon. Gentleman
  640
  says, why did he or his officials not telephone the Attorney-General every day saying that they must have an answer or rate support grant would be jeopardised?
  Mr. Ridley: The hon. Gentleman is getting rather silly. He must ask my right hon. and learned Friend that question. I received proper legal advice from my right hon. and learned Friend and immediately set in train the complex planning and negotiations with my colleagues which were necessary to have the Bill brought to the stage at which it could be published just before Christmas, and about six weeks after we received legal advice. I should have thought that, in view of the complexity of the Bill, about which Opposition Members have been free with their criticism, it was a remarkable effort to get a Bill of this difficulty drafted in such a short time. I have no desire to apologise for that, let alone to accede to the hon. Gentleman's suggestion that I should publish my daily timetables.
  Mr. Meadowcroft: Does the Secretary of State agree that the procedures would have been speeded up if the Bill had been confined to rectifying the problem and if there had been no other clauses?
  Mr. Ridley: That is where the Committee has not quite understood the Bill. That is what the Bill does. I concede immediately that the Bill goes further in regard to rate limitations. As I said on Second Reading and have said in statements, it was not possible to use Rates Act procedures to bring rate and precept limitations into effect for the coming financial year in time. I plead guilty, if guilt is involved, in that the Bill goes further than pure validation in regard to rate limitation.
  As for the power of the courts, I hope to show the hon. Member for Copeland that nothing is done other than to validate the past in relation to matters of rate support grant.
  Ms. Clare Short: The Secretary of State will know that his officials have written to Birmingham city council saying that they are calling into question the 1984–85 settlement. Surely that is retrospective and not just validating the past and therefore goes further than the explanation that he has just given.
  6.30 pm
  Mr. Ridley: We could have a debate on the Birmingham situation without trying to bring it into this amendment. When we decide upon the best amendment under which we can discuss the problems of Birmingham, I shall look forward to listening to the hon. Lady.
  The Bill seeks to validate all past decisions and to protect them from legal challenge but not to validate any future decisions. It is perfectly possible——
  Mr. Chris Smith rose——
  Mr. Ridley: The hon. Gentleman need not get excited. I have to go through several statements before I reach the justification for that remark.
  If anything Birmingham or I may do in the future is subject to a legal challenge, such a challenge can take place. It is not a question of going back, as argued by the hon. Member for Birmingham, Ladywood (Ms. Short). First of all, it is necessary to validate all past decisions relating to RSG. Secondly, there will be some interference with court cases relating to rate limitation and precept

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  limitation, for the very good reason that those limitations are decided in the Bill and that normal procedures are set aside. One could not have a situation where a court found on some rate limitation issues before Royal Assent to the Bill. Such a court decision could be immediately overruled by the Bill because statute law overrides any decision of the courts. That is why the situation is different.
  I now wish to discuss amendment No. 2A, to which the hon. Member for Copeland has referred. The hon. Gentleman suggests that any cases to do with rate support grant that were before the courts before the introduction of the Bill should be allowed to run their full course. The hon. Gentleman should consider the practicalities. It is possible that in the one or two cases that fall into this category—that is about all there are—a case could be decided, go to appeal and finally to the House of Lords. Before such a case could be finally cleared up, one way or another, it could well take until the end of this year.
  The hon. Member for Copeland is aware that it is necessary to get the Bill enacted as soon as possible, and certainly before the start of the new financial year. The whole operation of the Bill would be held up if a court case took as long as I have described. That is not a criticism of the judiciary—it must do its work properly—but if such delays occurred it is possible that that would lead to procrastination in the Bill coming into effect and local authorities would not know where they were and could not have grants paid to them.
  Dr. Cunningham: I am very anxious to understand exactly what the Secretary of State is saying and its implications. The right hon. Gentleman has said that our interpretation is wrong—that the Bill, if passed, would retrospectively validate action he has taken and make such action immune from legal challenge. I would be happy if the right hon. Gentleman could clarify that, because it is very important. Is he saying that the provisions of the Bill mean that local authorities could challenge past decisions, but not on the grounds on which they may challenge them at the moment?
  Mr. Ridley: It would be better if the hon. Gentleman would allow me to develop my argument. I am simply dealing with amendment No. 2A that requests that the Bill does not come into effect until all current cases which were before the courts before the Bill was introduced are cleared up. My argument is that that would lead to such a long delay that it would be intolerable.
  Allow me to deal with the two cases raised by the hon. Member for Copeland. The first case, the Greenwich case, has two legs to it. First of all, it challenges what I intend to do in the first supplementary report for 1986–87. That is what the hon. Gentleman said. The Bill is not concerned—as suggested by some hon. Members—with validating future decisions taken in accordance with the provisions of the Bill and related legislation. Local authorities will be quite free to challenge those decisions. Any court decisions on those legal proceedings brought by Greenwich, but yet to be heard, will not be affected by the Bill. The Greenwich case concerns a decision that has not been taken and that is the first supplementary report for 1986–87. Once the Bill is enacted, it will be perfectly possible for that particular legal argument to be resumed. It will not be affected by the passage of the Bill.
  The other leg of the Greenwich case is in a different category.
  Mr. Tony Banks rose——
  Mr. Ridley: If I may just finish this sentence, I shall gladly give way.
  The other leg of the argument concerns the rate limit for 1986–87. I conceded that part of the case because of the total expenditure problem. I could not have defended my case in court because I discovered that the definition of total expenditure was not as we all thought it was. There was no point in fighting a case when the law was suspect. That was not the grounds on which Greenwich fought its case—it was totally incidental to it.
  On the other hand, the case could not be fought without the law being clarified as to what was meant by total expenditure. Thus, the limit will be validated by clause 6 in this case, and the amendment will not affect it.
  Mr. Banks: I am grateful to the right hon. Gentleman for giving way because I want to understand exactly what he is saying. I hope he will bear with me if I repeat once again what he said. Is he telling the House, as I understood that he was, that the challenge made by Greenwich to prohibit him from redetermining multipliers, determined for London boroughs in the rate support grant report 1986–87—I understand that that challenge is due to be heard on 29 and 30 January—can still go ahead? If the court decides that, in redetermining the multipliers, the Secretary of State has acted unlawfully or whatever, he must abide by the decision of the court with regard to that part of Greenwich's challenge. Would that still be allowed even under this legislation?
  Mr. Ridley: Subject to not knowing the dates of the court proceedings, the hon. Gentleman is correct. All the Bill does is validate the definition of total expenditure. The case that Greenwich is bringing cannot be fought and will not make any sense unless that is an accepted legal definition of total expenditure. Once there is such a definition, any extraneous matters can be considered by the court.
  It is not possible to fight a case, assuming that the old definition of total expenditure was in existence, and win that case on the basis that the definition of total and relevant expenditure, on which we were all working, was invalid. The Bill substitutes a new definition of total expenditure so that there is no going back over the old argument.
  Mr. Straw: The Opposition are genuinely trying to follow the Secretary of State's argument.
  On the face of it, the powers that the Secretary of State is taking under clauses 4(6) and 6(4) are extraordinary. I can understand why the Secretary of State is seeking to validate past acts under clause 4(1). I do not understand why, having taken the power to validate past acts, which is consistent with what the rest of the Bill is seeking to do, the right hon. Gentleman still thinks it is necessary, having got the deemed validation of past acts, to say that, notwithstanding the decision of any court, whether before or after the passing of the Act, purporting to have a contrary effect, his decision will stand.
  From reading the Bill, one concludes that any decisions made by the right hon. Gentleman under the powers of the Rates Act 1984, right up to the date when this Bill goes to Royal Assent—that includes future acts of his—are deemed validated by this Bill and are then made judge-proof. It is the judge-proof part to which we take exception.
  Ms. Clare Short rose——
  Mr. Ridley: I would be grateful if the hon. Gentleman and the hon. Lady would allow me to get to this point. I want to move to it but hon. Members keep asking in advance about the logical exposition of my speech. As the hon. Member for Blackburn (Mr. Straw) says, clause 4(1) and clause 6(1), (2), (3) set out the definitions of total expenditure and rate capping, and clause 4(6) validates that for the past in relation to rate support grant and total expenditure, and clause 6(4) validates all past rate support grant decisions. As I understand the hon. Gentleman, he is saying that he accepts that in the context of being necessary to what the Bill is seeking to do.
  I shall now turn to the phrase which has excited the Opposition so much, the phrase
  "before or after the passing of this Act."
  The situation is simple, and the solution is easy. Obviously, a decision taken by a court before the passing of this Act would be overridden by the validation. Therefore, there is no point in a court coming to such a decision. We might as well say in the legislation that that is what will happen. If a court considers a case which is concluded before the passing of this Act but does not give judgment until after the passing of this Act, then of course the court would give its decision after the passing of the Act. That is why the phrase is there. It catches the case, if one should occur, of a court concluding its business before the passing of the Bill but not giving its decision until after the passing of the Bill.
  After the Bill is passed it has no effect at all upon judicial review or on any other action which might be brought against me. After the Act is passed, the definition of total expenditure and relevant expenditure contained in the Bill becomes the law. That definition takes over from the holding provisions about which the hon. Gentleman is complaining, that court decisions are invalid until the Bill is passed. I hope that that clears up this little bit of trouble.
  Mr. Straw: It is important for us to be clear. It is true that in respect of decisions which the Secretary of State makes after the passing of the Bill, these two subsections have no specific effect. We are complaining about the fact that decisions that he may make up until the passing of the Bill will not be subject to judicial review because of these two subsections. That is wrong, and the Secretary of State has not so far explained why he thinks that is right.
  Mr. Ridley: It depends on the subject of the litigation. If it has to do with total expenditure or involves the definition of total expenditure, the Act will prevail over any decision of the court. The hon. Gentleman must realise that any authority could go to court and claim that the definition of total and relevant expenditure is not the one that we have all been working on but was the one in the original 1980 Act. On that basis, authorities would win every case and in order to discourage them from doing that, it must be right—[Interruption.] If hon. Gentlemen do not understand, it would be wiser for them not to giggle. It must be right to say that none of those decisions can be upheld because they are validated by the Bill.
  If a matter has nothing to do with the definition of total expenditure or with the rate support grant calculation based on it, it is judiciable but it might be better for the court to await the passage of the Bill so that it knows the
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  definition of total expenditure. If the court prefers not to do that, it is perfectly possible for the case to proceed, but it will do so in the light of the fact that any decision which contravenes the definition of total expenditure in this Bill will later be proved invalid. However, if the matter is totally extraneous to total expenditure and is about something totally different like multipliers, which are not affected, it will be possible for the court to continue to determine the issue, just as it is possible for a court to decide that I was not wearing a seat belt when I should have been.
  6.45 pm
  Mr. Chris Smith: I follow the Secretary of State's argument on the definitions of total expenditure and the impact of the Bill. However, a point also arises from clause 6 about the designation of authorities for rate limitation and the setting of limits under the rate limitation proposals. The Secretary of State is commending to us a Bill which clearly says that any designation and any determination and notification of total expenditure under the Act for the financial year beginning in 1987—which is not yet upon us—cannot be challenged in the courts. Those are decisions which the Secretary of State has said he is likely to take, but he has not yet taken them and presumably he will not make them in final form until after the Royal Assent has been given to the Bill. Surely that is prospective and not retrospective legislation.
  Mr. Ridley: That is the counterpart of what I said earlier, that it is necessary to put the rate and precept limitation proposals on the face of the Bill. I think they are in schedule 2 and the hon. Gentleman will have seen the complicated formula. As I have said, that is necessary because it will not be possible to complete the procedures after Royal Assent to the Bill and before authorities need to know what the rate limit is to be. I admit that this is a departure from straight validation, but it was the only course open to the Government and we have adopted the procedure of specifying the rate limits. They can be debated and amended in the House if hon. Members do not think that we have got it right.
  The statute law which the Bill will become when it receives Royal Assent overrides any decision of the judiciary. If we did not include this provision and if there was a rate limit court case this month which the Government lost, it would still be overridden by the Bill when it received Royal Assent because the Bill specifies the rate limits. In a sense clause 6(4) is helpful to the court because it is perfectly obvious in common logic that it must be right to include that clause. I hope that that helps hon. Members to understand why these powers are here.
  I concede that the powers about rate limitation are slightly different from pure validation, but I hope that the Opposition will concede that the parts of the Bill relating to rate support grant and total expenditure are no more than pure validation of the past and a necessary legal protection to stop the lacuna in the law being exploited in cases brought before the Bill becomes law. None of the Opposition amendments is necessary—indeed, some of them weaken the provisions that I have described—and I invite the Committee to reject them.
  Mr. Meadowcroft: I have listened carefully to the Secretary of State, and I shall try to return in detail to some of the points about validation and retrospection

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  because they are the nub of this group of amendments. I should like to concentrate on amendments Nos. 83, 84, 102 and 103 because they are about retrospection. It is rather odd that the Secretary of State keeps on talking about the need for parliamentary haste. For so long there has been Government delay. It is quite apparent from the explanations that the Secretary of State has endeavoured to give us that the matter is so complex that there is no way in which, if we are to get this right this time, the matter should be pushed on without adequate clarification.
  I appreciate the Government's dilemma in this matter. I appreciate that they are endeavouring to safeguard their position in the law, both before and after the passage of the Bill. The problem in trying to accept that dilemma and in endeavouring to assist the Government in coping with it is whether the terms of the Bill are drawn so widely that even in those matters in which they are endeavouring only to validate their past actions they take the provisions well beyond what would simply be validation. If the Bill is drawn too widely simply to be validation in these clauses, a misreading would simply mean that future legal safeguards would not be required. In other words, if the Secretary of State says that we who believe that the words "future clearance" and "future immunity" are required and are misreading the clause, then I suspect that we need to he persuaded further that a possible legal challenge to the Government's position could not be taken afterwards, rather than simply by the court's decision being announced afterwards.
  I cannot conceive of a court commencing an action, when the Bill goes on to the statute book, before its decision is announced, not being able to take account of the fact that the law was changed before the decision is announced. Presumably the law will become different at that point.
  Mr. Ridley: At the time a court hears the evidence and considers the issue, the law will be as it is now. The law comes to its own conclusion on the basis of the current law, and if between then and Royal Assent there is a change in the law, the whole matter is nonsense. The hon. Gentleman might well say that this is unlikely to happen, but good draftmanship and carefully prepared Bills guard against that unlikely event. That is why it has taken a little time to put the Bill together.
  Mr. Meadowcroft: The temptation to accept the Secretary of State's interpretation and the desire to rely on good draftmanship is hardly borne out by the past. It is because we have not had good draftmanship that we are here today, wasting parliamentary time which could be better spent on a host of issues that will affect the future and deal with many of the crises that we face in far better ways than simply trying to get past legislation right for the sake of the Government's own face saving.
  The issue of how widely drawn the Bill should be to avoid legal challenge is complicated. Even if the law had the effect that is intended, presumably the law would still be open to legal challenge. The problem is whether the Bill as drafted now will permit the continuation of legal challenges that were possible in the past as opposed to cutting out those as well. That is a matter of opinion. I accept that the Secretary of State has tried to convince us that they will still be allowed, but looking at the Bill as drafted I am unconvinced that it would not catch actions which would have been legitimate if they had been able to
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  be brought under the law as it was thought to be, as opposed to what it turned out to be. Therefore, there is a real difficulty in accepting that interpretation.
  I accept also that the Secretary of State is trying to do a belt-and-braces job. The Committee would abdicate its responsibility to protect not only the rights of individuals but the rights of councils if it allowed a too open-ended future power. It is tempting to accept the Secretary of State's interpretation, but he is saying that, in the context of legislation in this complex field of rate support grant, definitions of central financing of local government and so on, we want an enabling power for the future to catch challenges that we believe would not have been possible had the law been as we thought it was. I heard the right hon. Member for Birmingham, Small Heath (Mr. Howell) say that it would be a useful precedent if ever there were a Government of a Left-wing colour.
  Mr. Allan Roberts: Is the hon. Gentleman aware that the Secretary of State for the Environment made the same case as Derek Hatton and the Clay Cross councillors made for retrospective legislation to indemnify them for actions which were illegal at the time they took them and which were resisted by the Labour party because of the nature of that legislation, for which the Government are now setting a precedent?
  Mr. Meadowcroft: I agree only partly with the hon. Gentleman's remarks. The difference in the case that he puts is that there is no sense in which the challenge that was made by, for instance, the Clay Cross councillors was even thought to be legal at the time. The Clay Cross councillors were well aware of what they were doing and relied on possible future indemnity, even in relation to the fact that their action was illegal. That is very different from the fact that the Secretary of State believes that what he did was legal, and turned out not to be.
  Mr. Roberts: Many councillors who were surcharged under the Government's legislation for not setting a rate on time believed that they were not breaking the law at the time they set that rate.
  Mr. Meadowcroft: I accept that. Later in the debate we shall refer to some aspects of accounting procedures that are much more akin to what the hon. Gentleman said. Efforts to stop local authorities doing what they rightly believed to be legal, whether it was prudent or otherwise, is a different matter, but it was legal. Perhaps the hon. Gentleman's charge would be more appropriate at that point. The analogy is much nearer to the kind of enabling Act that the right hon. Member for Chesterfield (Mr. Benn) proposed, as was proposed by other Labour politicians in times past, to give powers in future for indemnity from the law. Indeed, it is a useful but dangerous precedent.
  The danger is that if there is no consensus, not on the political values but on the procedures for democracy, we shall open up the same powers to be used or abused by parties of different colours. That danger is inherent in this process. The amendments have been tabled in the names of my hon. Friends and myself because, if the Bill's intention is a narrow definition of the ground of challenge—I do not believe that there is a need for blanket future protection—and if the Bill allows a wider interpretation, clauses 4(6) and 6(4) must not remain unamended. That is the nub of the argument. It demonstrates how

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  vulnerable the Government believe they are that they have to take such powers to themselves for future as well as past validation. It shows also how polarised central-local government relationships now are. The Government are trying to pre-empt future legal challenge which they believe will come about simply because they have so offended and embittered that relationship.
  Mr. Ridley: I thought I had explained to the hon. Gentleman that the only circumstances in which a decision in the future will be upset by the Bill when it becomes an Act is when judgment is delivered after Royal Assent. If a case is heard after Royal Assent, it will be able to subject to judicial review any decision that I have made, together with any action or disputed point in law. The law will be changed by the Bill. In no sense does the Bill prejudice the courts in taking any future action of any sort in this field or in any other.
  Mr. Meadowcroft: I hope that the Secretary of State is right about that point. The difficulty that Opposition Members face is that the Secretary of State has said to us time and again that this measure covers certain things and now we find that it does not. If that is what the right hon. Gentleman means, he has not expressed it or drafted it well. It does not clearly say that. Those who are examining the legislation, with the limited time available, and trying to get some advice as to what it means, believe that it covers something which is not simply retrospective in this sense.
  If the Secretary of State is endeavouring only to put that point and he is giving an undertaking to the House that things which would not have been caught before but were open to legal challenge will still be available to challenge by the council, then I accept his genuine wish for that to be the case. The measure is not well drafted. The amendments should carefully be considered. It is right that these matters should be discussed. At least the Secretary of State has given us a clear undertaking about his intentions. Nevertheless, far too many powers are being given away. That is why these amendments have been tabled.
  7 pm
  Mr. Chris Smith: I listened carefully to the Secretary of State's speech, and I wish to address my remarks to the authority that I represent, Islington, that is contesting this matter in the courts. However, before doing so I wish to make a few general points.
  I begin by picking up from where the hon. Member for Leeds, West (Mr. Meadowcroft) has just left off. Even if we accept the Secretary of State's intention to validate the decisions of previous Secretaries of State relating to total expenditure, two questions immediately arise. First, is the Secretary of State's interpretation of the limited nature of the restrictions on the future action of the courts right? I fear that this Secretary of State does not have a very good track record. Therefore, we are entitled to ask whether the Secretary of State's interpretation of what the Bill says about the future actions of the courts is right. Secondly, even if the Secretary of State is right and all that the Bill does is validate actions that have been taken illegally by previous Secretaries of State, the Committee should not regard that matter lightly. Retrospectively it puts Secretaries of State above the law.
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  Furthermore, when I referred to clause 6 and the effect of rate limitation and rate capping under the Rates Act 1984, the Secretary of State admitted that the Bill gives him carte blanche to make decisions on rate limitation and designation under the Rates Act for the financial year 1987–88. The complicated formulae set out in schedule 2 to the Bill—which would be laughable if their implications were not so serious for the services that are provided for the millions of people in this country—relate to classes of authorities, not to individual local authorities.
  As a Member of Parliament who represents an area that has been designated for rate capping by this Government—a point to which I shall return, because I believe that it has been wrongly designated—there is no way under the Bill for me to question in detail the reasoning, thinking, logic and preparation that led the Secretary of State to declare that he would rate-cap my authority. I am unable to raise questions on that issue under the Bill. I can raise questions on a collectivity of authorities, because that is what the Bill deals with, but I cannot do so in relation to one authority alone.
  The Bill gives the Secretary of State a decision-making power that cannot be challenged in the courts to designate my local authority for the financial year 1987–88. That is not just a retrospective setting of the Secretary of State above the law; it is a prospective setting of the Secretary of State above the law, because it relates to next year's financial expenditure by my local authority on services that deeply affect thousands of my constituents. The Secretary of State says that he will designate and determine the rate-capping limit for my local authority, and it will be impossible for the designation or for the rate-capping limit to be challenged by the authority in the courts.
  If in the dense morass of words to which the Secretary of State treated us earlier today he meant to say that he did not mean that at all but that the London borough of Islington would be able to challenge his intended rate-capping limit in the courts, I should be partially satisfied. I say "partially" because there are other matters with which I wish to deal later. If the Secretary of State intends to speak again before we reach a decision on the amendment, I should be grateful if he would tell us what the position will be of an individual local authority that is rate capped under clause 6 and schedule 2 if it seeks to challenge his determination of its rate-capped limit.
  The Secretary of State rightly said that statute law overrides any court decision. The traditional, constitutional principle is that Parliament makes the laws and that the courts interpret them. It is accepted that the interpretation process is secondary to the making of statute law. However, we are dealing not so much with the passing of statute law as with the administrative decisions of Secretaries of State that are enabled by statute law. Increasingly, this Government has passed enabling legislation that lays down general powers for a Secretary of State which allow him to go ahead and make administrative decisions with, at most, a debate on an order at 11 o'clock at night. By that process, statute law is modified and court decisions become ever more important to the interpretation of the law.
  The Secretary of State claims that we are dealing with the priority of statute law over the interpretation of statute law in the courts, but he is not telling the whole story. In

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  many cases we are dealing with the administrative interpretation of statute law as opposed to the legal interpretation of statute law.
  Amendments Nos. 2A and 100 relate specifically to court actions that are now in progress relating to rate limitation designation under the Rates Act 1984. One of those actions has been brought by the London borough of Islington. On 17 July 1986 the Secretary of State designated 20 local authorities, including the London borough of Islington, under section 2(1) of the Rates Act. As he was required to do by legislation, the Secretary of State stated at that time the principles upon which those councils had been chosen for rate capping. Islington was designated because, amongst other things, it appeared to the Secretary of State, from
  "best information available to him"
  at 17 July 1986, that Islington's total expenditure for 1986–87 was likely to exceed its grant-related expenditure figure for that year by at least 12·5 per cent.
  The Secretary of State, and previous Secretaries of State, have played around with the percentage increase over grant-related expenditure figures. In previous years, the figure had been 20 per cent., which was the figure that the former Secretary of State, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), gave in the middle of the night in Committee on the Rates Bill.
  That figure of 20 per cent. was modified by this Secretary of State in his announcement of July 1986 to 12·5 per cent. That was the benchmark. Local authorities that were 12·5 per cent. over the grant-related expenditure were profligate, overspending and acting to the detriment of their ratepayers, according to the Secretary of State.
  The London borough of Islington was caught by that provision on the basis of the information available to the Secretary of State at that time. It would appear, from the way that he made that decision, that the figure of 12·5 per cent. was specifically chosen to catch the London borough of Islington, because its expenditure above grant-related expenditure figure was 12·52 per cent—a difference of 0·02 per cent. or £15,000. In terms of the millions of pounds that form the London borough of Islington's budget, that was a marginal figure. One has to ask whether the figure of 12·5 per cent. was selected specifically to ensure that Islington was included. I suspect that the answer to that question is yes.
  On the basis of the figures that the Secretary of State had at that time, Islington was marginally above the rate-cap limit that he had set of 12·5 per cent. The next most marginal of the other rate-capped authorities on the list was Brighton, which was 13·31 per cent. over grant-related expenditure.
  Soon after being designated, and soon after the announcement of July 1986, Islington informed the Secretary of State that, owing to an over-estimate of at least £100,000 of the precepts and levies elements of the rates on its own properties, its expenditure for 1986–87 would be reduced to only 12·42 per cent. above the grant-related expenditure. That was not changed by any definition of proposed expenditure or actual expenditure; it was a purely technical matter in so far as it related to the precepts and levies elements of the rates on council properties.
  The information that the Secretary of State had available when he made that decision was inadequate and incorrect. The expenditure that he should have been looking at for the London borough of Islington was not
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  12·52 per cent. over the grant-related expenditure, but 12·42 per cent. over the grant-related expenditure. Therefore, the expenditure was below the 12·5 per cent. figure that the Secretary of State had decided upon as the principle for designation.
  7.15 pm
  As a result of the discovery of that mistake on the part of the Secretary of State, Islington asked the Secretary of State to withdraw the designation but he refused to do so. Even though he had set the principle at 12·5 per cent., and Islington clearly and specifically demonstrated to him subsequently that it fell below that threshold criterion, the Secretary of State decided that Islington should remain rate-capped.
  On that specific point, Islington then asked for judicial review of the Secretary of State's decision. It took that decision on counsel's advice, believing that it had an extremely good case to seek an order of certiorari, quashing the decision to designate, and an order of mandamus requiring him to consider, in accordance with the law, Islington's request that he withdraw or not proceed with the designation. The hearing is due to start on 21 January 1987.
  However, subsequent to that, the Secretary of State has discovered that, for completely different reasons, many of the decisions on which he and many previous Secretaries of State have been basing their decisions in relation to rate support grants—definitions of total expenditure and rate limitations—have been ultra vires in the past.
  The Secretary of State has brought the Bill before the House seeking to validate both previous decisions and intended future decisions. In so doing, he has effectively conceded that the judicial review which the London borough of Islington has sought against his original decision is now not needed, because his designation of last July was rendered illegal and nugatory. What he has therefore done, through the Treasury solicitor—there is considerable correspondence between the Treasury solicitor acting for the Secretary of State and the borough solicitor of the London borough of Islington acting for the borough—is to concede that the Secretary of State's July decision was wrong, and therefore there is no contest to be made in the court.
  By so conceding, the Secretary of State has conceded the more general principles that form part of the content of the Bill. He has not conceded the specific point about the expenditure over grant-related expenditure which formed the nub of the London borough of Islington's case in relation to its designation under the rate-capping.
  The Local Government Finance Bill seeks, in effect, to prevent the courts from quashing designations that have been challenged on any grounds, whether or not they are to do with an error in relation to rate support grant or total expenditure. What is effectively happening in this legislation is that the Secretary of State is saying that he will take powers under this Bill to render all existing court actions invalid, whether or not they are specifically related to the point of the Bill.
  The challenge that has been mounted by the London borough of Islington does not have to do principally with the point of the Bill. It relates to the amount that the Secretary of State is calculating with regard to the London borough of Islington's expenditure over and above the grant-related expenditure assessment.

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  I should like the Secretary of State not only to answer the first question that I put to him about the general position of rate-capped authorities in seeking to challenge the 1987–88 rate determination, but also to answer the specific question whether he accepts, having had the figures from the London borough of Islington, that the figure of 12·42 per cent. above GRE is the figure that relates to Islington's expenditure rather than the figure of 12·52 per cent., which he had in front of him when he made his original decision to determine a figure for Islington in July 1986.
  If the right hon. Gentleman accepts that, and if his intention is still to catch only those authorities on 12·5 per cent. and above, will he now agree to seek a means of excluding the London borough of Islington from rate determination and a rate-cap limit, because it clearly does not fall above the threshold that he had originally intended and set in July last year?
  If the right hon. Gentleman does not give that assurance, will he accept that, by bringing the Bill before the House, he is effectively including a borough for rate-capping which, under his original intention of last July, he would have had to exclude because it would not have fallen on the wrong side of his own threshold?
  If the right hon. Gentleman accepts that point, is not the effect of the Bill to ensure that he brings the London borough of Islington into rate-capping whereas otherwise it would have fallen outside rate-capping? The Secretary of State will know that the borough had an extremely good chance of ensuring that his original inclusion of the borough was quashed by the court because he was acting on incorrect information.
  If that is the case, the Secretary of State's plea at the Dispatch Box that all he is doing is validating previous decisions and, of course, that he has no intention of setting himself above the law sounds, I am afraid, rather hollow. By bringing the Bill before the House, he will, if it is passed, have included my borough for rate-capping when previously, by action of the court, the borough would have been able to avoid the rate-cap limit. If that is the case, I am afraid that services to thousands of my constituents will be put at risk.
  I should be grateful for answers to those specific questions when the Secretary of State replies. I fear that my borough and my constituents will be badly hit by the Bill. They at least had a chance of representation through the courts and an escape from rate-capping before the Bill was laid before us.
  Ms. Clare Short: I, like most Labour Members, listened with great care to the Secretary of State's explanation of the extraordinary powers that we are debating. I referred previously, in an intervention, to Birmingham. The Secretary of State said that he was happy to debate the situation there. Amendment No. 87, which we shall come to later, relates specifically to Birmingham, but I want to examine what the Secretary of State said about the powers that are taken under the Bill in relation to Birmingham. I cannot understand how what the right hon. Gentleman is threatening to do to Birmingham can be legalised by the Bill or how the explanation that he gave us today can be correct.
  The Secretary of State made it clear repeatedly that the Bill does nothing more than validate the past and put right
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  for the future the position that the House and local government thought obtained in the past. The treasurer of Birmingham denies that, and suggests that the definitions given by the Secretary of State in the Bill are contrary to what everyone in local government has believed and practised.
  In Birmingham, the Secretary of State intends retrospectively to invalidate some fund contributions legally made by Birmingham as far back as 1983–84—decisions that were certified by the Audit Commission. Birmingham's auditors, Price Waterhouse, wrote to the Department in May 1986 in relation to the 1984–85 accounts and said:
  "We have considered this issue in some detail and have concluded that the contribution is a lawful charge."
  On 16 December 1986 a Mr. A. C. B. Ramsay from the Secretary of State's Department wrote to Birmingham's chief executive saying that it was likely, because of the new Bill, that actions taken in the past would be called into question. It does not say that it is certain, but that the new Bill may have implications for Birmingham as from its outturn return for 1984–85. The letter says:
  "The outturn information for 1984–85 submitted on your authority's RSIB Form covered by an auditor's certificate dated 2 October 1985 and reissued on 16 May 1986, shows unallocated net contributions from the rate fund revenue account to special funds of £15,417,652 and a closing deficit on that account of £7,450,980."
  The letter goes on to say:
  "It may be that these contributions or some part of them fall within the category of contributions which the Secretary of State proposes to specify"—
  that is an action in the future—
  "should not be included in 'relevant' and therefore 'total expenditure'."
  The net effect on Birmingham of that possible proposition—it seems that it is not decided, yet we have been told that the legislation is all about putting right what everybody knew was the case in the past—is to cost the people of Birmingham £8 million. We have done rather badly out of the Secretary of State because we recently also lost some £30 million because of other decisions that he has made. That amount is a considerable sum. For the average family it is about £12 a year.
  I am asking the Secretary of State specifically, please, to explain how he can suggest that the clauses and the powers simply validate the past. How can they possibly give him power to make a decision in the case of Birmingham that has not yet been made about how much of a notional sum that was spent in 1983–84 might be taken away from the citizens of Birmingham? Can he give us any possible explanation that ties in with the explanation that he gave previously suggesting that no future decision of the Secretary of State would be covered by the vast powers that he is taking to make decisions that cannot be challenged in the courts?
  Mr. Tony Banks: I want to talk specifically about amendment No. 2A and make sure as far as I can—I am afraid that I cannot be at all certain—that at the end I shall understand exactly what the Bill means.
  The amendment has particular relevance to Islington, for which my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) has just spoken, and Greenwich. If our good and late colleague, Guy Barnett, were here, I am sure that he would want to raise in great detail the Bill's impact on his borough of Greenwich, which he served so well. He would certainly do it a lot

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  better than ever I could. I am sure that for one brief moment tonight the Committee will be united in saying that we wish that Guy Barnett were here, participating, as he normally would have done, in a Bill of this sort.
  I want to deal with the question of the Greenwich challenge because it seems to be the borough that is most caught by the Bill, although I shall show later how badly Newham will be affected by the Bill. Cases that are already in the courts, Greenwich and Islington, are directly affected.
  As I understand it, the Greenwich challenge sought to quash the 1986–87 rating order on it. In this part of the challenge, the Secretary of State has now consented to judgment in favour of Greenwich, and the order was made by the High Court on 17 December. That is affected by the Bill, because clause 6 will re-ratecap Greenwich for 1986–87 and reverse the High Court decision. Perhaps the Secretary of State can confirm this. He is shaking his head. Does he mean that that is not the situation? I am not making cheap debating points. I am merely asking him for information. Even if we disagree, we should at least understand what is going on, so that we can make progress. I understood that the Secretary of State had consented to judgment in favour of Greenwich in the High Court on 17 December, but is now seeking to reverse that High Court decision by the Bill. The Secretary of State is not saying anything, so I shall push on.
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  I am assuming that the Secretary of State knows what is going on. If he does not, we are in an even worse mess than the most pessimistic of us thought that we were in to start with That is how byzantine and obscurantist the legislation is becoming. Before I completely lose patience with the Bill, I point out that it demonstrates like no other just how unwise and ludicrous it is for the Committee to try to get itself involved in the detailed minutiae of local government finance. This is absurd. Ten years ago, I was the chairman of a finance committee, and I understood local government finance. We did not get ourselves into the mess which local government now unfortunately gets itself because the Government keep changing the rules and moving the goalposts. However, there is no way that I can pretend that I understand, in the detail that I feel that I should if I am asked to make a decision, the Bill or the position of local government finance.
  When I asked the Secretary of State about the second leg of the Greenwich approach in the courts—the redetermining of the multipliers—he said that that part of the Greenwich challenge could still go ahead in the courts. I assume that when he said that he was not saying that it could go ahead in the courts if it has enough money to pay for the lawyers. I assume that there will be some valid reason for proceeding with the court case of Greenwich's challenge to the redetermination of multipliers.
  Mr. Ridley: I can help the hon. Gentleman on this. If and when I make a first supplementary report for 1986–87—which I cannot do before the passing of the Bill—I shall be making a new decision in that supplementary report, which will be challengeable in the courts. If Greenwich wishes to challenge that, it can, but it is not possible to do that on the basis of the definition in the Bill until the Bill has reached the statute book.
  Mr. Banks: As I understand it from my information, Greenwich is pursuing redetermination of the multipliers
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  in the courts at a hearing on 29 and 30 January. It would be helpful to everyone if the Secretary of State would further advise the Committee as to whether it is even remotely possible that, if the courts were to find in favour of Greenwich, he would be prepared to accept that judgment. I am sure that he does not want the resources of the ratepayers of Greenwich to be wasted by what would, in effect, become an idle and useless challenge in the courts because, under this legislation, the Secretary of State will be able to set aside any decision made by the High Court on the redetermination of multipliers.
  Mr. Chris Smith: I have been following my hon. Friend's argument carefully. I am particularly concerned about multipliers. In the complex formula included in schedule 2, in relation to a category of boroughs that includes Greenwich, there is a specific point about the multiplier on page 13. It says that "M", which is part of the crucial formula,
  "is the figure shown as the multiplier in relation to the authority in the relevant Report."
  We have no knowledge for certain of what the relevant report will say about the multiplier for Greenwich. However, clause 6 says:
  "any designation of an authority…and…any determination…for an authority's total expenditure…shall…be deemed to have been in compliance"
  and that shall not be challengeable.
  How can it be that the Secretary of State can determine a multiplier for Greenwich through the formula in schedule 2 and apply it in the relevant report to which it refers to determine a ratecap limit, and then not be challengeable? That question must be asked.
  Mr. Banks: That question must be asked, but not of me. The Secretary of State must answer it. I do not understand how this will operate. If Greenwich is successful in its challenge in the courts over the redetermination of multipliers, that will affect the 1986–87 rate support grant settlement. As I understand it, that will then be caught up within the Act, as it will become, so any decision made by the courts in respect of the multipliers for Greenwich will not be to the benefit of Greenwich because it will be set aside by this legislation.
  However, earlier, the Secretary of State clearly implied that Greenwich could go to the courts and proceed with its challenge to the multipliers. I would be prepared to give way if the Secretary of State could throw a little more light on this part of the Bill.
  The redetermination of multipliers is a highly complicated subject. Greenwich came to the challenge in the courts for the following reason. In simple terms, the previous Secretary of State received a complaint from Bromley that it did not get an adequate allowance in rate support grant terms for taking over additional highways on the abolition of the GLC. I am advised that the Secretary of State agreed, and proposed to give Bromley more grant. He decided to find this money by penalising other local authorities, and inner London boroughs in particular. Greenwich is the largest potential loser with an envisaged loss of £3·822 million grant in the 1986–87 entitlement.
  Greenwich objected that the Secretary of State had no powers to do this, and this he now acknowledges. However, although we know that the Secretary of State is the only person who is absolutely certain what the law is,

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  Greenwich still maintains that he has no powers to redetermine multipliers and penalise Greenwich as proposed.
  The stated intention of the 1986–87 RSG report was to avoid losses or gains to ratepayers as a result of the GLC abolition. There was much talk about that during the passage of the Local Government Act 1985. The Government sought to ensure that there were no losses or gains to ratepayers as a result of abolition by determining multipliers to adjust the rate support grant entitlement of successor authorities.
  As a preliminary, it was necessary to make an expenditure assumption to reflect the transfer of functions from the GLC to successor authorities. In other words, the Secretary of State had to divide the GLC budget roughly between all the successor bodies. This division of the GLC budget was notified to Greenwich and other successor bodies by a Department of the Environment letter of 20 December 1985 which purported to give the final allocations—I emphasise "final"—of the GLC budget. Multipliers were determined in the RSG report using that allocation.
  The allocation for Greenwich was £22·779 million. But Greenwich has to spend £24 million on ex-GLC services and estimates that expenditure of not less than £26 million is required. It does not have the resources to spend at that level. The Secretary of State now proposes to change his final allocation for Greenwich and to reduce it to about £20·513 million. Greenwich is complaining that it is extraordinarily difficult to get accurate information from the Secretary of State and the Department. The original allocation, which Greenwich maintains is inadequate, will be further reduced.
  As the original allocation was inadequate, there were losses for Greenwich ratepayers as a result of GLC abolition, contrary to the stated intention of various Secretaries of State. It is those losses that the Secretary of State now proposes to increase. The effect of his proposals is to withdraw £3·822 million of Greenwich's 1986–87 block grant entitlement, leaving a net figure of £49·286 million. Greenwich ratepayers will have to find a further £3·822 million. This is in addition to the losses which they have already suffered as a result of GLC abolition.
  Grant is, in effect, being taken away from Greenwich and other inner London boroughs and given to Bromley, Barnet, Sutton and other outer London boroughs. We understand that process and we appreciate the politics involved. Those boroughs are either Tory boroughs or boroughs in which the Conservative Government believe that they stand a chance of gaining control. Richmond is one of the obvious examples. The Government believe that they can fiddle the rate support grant settlement in such a way as to benefit themselves politically. That is fair enough. Let us all be open about it. That is part of the pork barrel. The pork barrel is attractive, if one's snout is in it, but is not much fun if one sees someone else snuffling up all one's resources. That is why Greenwich and Newham are complaining. But the wheel will turn and our snouts will be in the pork barrel before long.
  Greenwich is complaining bitterly about its treatment and will challenge the redetermination of the multipliers by the Secretary of State in court on 29 January. If the courts decide that the Secretary of State has acted unreasonably or unlawfully in the redetermination of
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  multipliers for the 1986–87 rate support grant settlement, will Greenwich be able to benefit from that judgment? If so, Greenwich can proceed happily with this case because, as in the first part of its case, the borough feels that it is on strong ground.
  Mr. Michie: Once again, we are trying to defend the local government system which has suffered seriously for many years. Fear about the Secretary of State's powers worries us all, whatever our political persuasion. As our amendments show, we are trying to take away the tremendous powers of the Secretary of State. He will be not only above local authorities, but above the law. That is against what I believe to be natural justice.
  Places such as Sheffield could be wronged. I believe that they will be. It may be put in a position in which it cannot carry out its statutory obligations. That will certainly be the case with the south Yorkshire fire service.
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  If those circumstances arise and the Secretary of State is given so much power, they will act against the natural justice of people who are trying not only to defend services but to carry out the duties vested in them by central Government.
  The Secretary of State wishes to ignore the statistics that have been given by local government on its needs and obligations. He wishes to ignore the massive unemployment in Sheffield, the fact that it has the highest number of old-age pensioners, and the fact that it cannot carry out its statutory duties. Are we to understand that, whatever judgment is made by the Secretary of State, there will not be the right of appeal to the courts? That is what I understand to be the position.
  The Sheffield city council told the Secretary of State that his expenditure limit implies "unachieveable economies". It predicted "disastrous cuts" in services. It asked him to raise its spending capacity from £258,915,000 to £295,832,000. In its case for appeal the council made many points, most of which have been ignored.
  What should the council do in those circumstances? Does it just say, "OK. We shall just sit down and let things happen". No, of course not. Local authorities are just as responsible for carrying out their duties as any other organisation, especially this House of Commons.
  Sheffield's GRE for 1986–87 is £33·2 per head below the metropolitan district per capita average leading to a GRE reduced by £17·9 million and a loss of grant of £31·4 million on budgeted spending in 1986–87. Was that taken into account? No, it was not.
  Does not the Secretary of State believe that we can appeal against such judgments, which are made on an irrational basis? Does it mean that, despite the fact that the European Parliament, in a recent study, found that of the 102 largest urban areas in Europe the Sheffield-Rotherham conurbation ranked as one of the lowest in terms of social and economic health, it is not recognised by the Secretary of State? Does that mean that local authorities should not have the right to appeal somewhere, to try to put their case before a court in another area, to determine that they can carry out their duties? Is that what the Bill is all about? Is that what the Secretary of State wants? If a local authority has the highest youth unemployment, does that mean that it does not have the right to appeal and argue a case? Such powers are dangerous not only for the Secretary of State, because

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  sooner or later he will drop another danger and when he gets a problem will have to change his policy yet again, but for democracy generally.
  Therefore, I hope that the Secretary of State will not take the powers proposed in the Bill because he does not need them unless, as someone once suggested to me, the Conservative Government cannot abide the freedom of local authorities because it frustrates their ultimate policy. That is to pay the rich and to take from the poor. Unfortunately for the Government, many local authorities are prepared to take from the rich and defend the poor. More and more power is taken away and there is much more centralism and dictatorship. I hope that the amendment is successful.
  Mr. Spearing: These amendments seek to ameliorate the draconian powers that the Secretary of State is taking for himself in the Bill. I cannot see any reason why these relatively mild ameliorations should not be accepted. I do not think that the Secretary of State has understood the powers that he is taking in clause 1.
  Some years ago, I was involved in the hearings of a railway closure tribunal. The chairman of the tribunal gave a ruling on what an Act of Parliament meant. He said, "The Minister of Transport says that that part of the Act does not mean what counsel says it means". Someone said, "That is nonsense. The Secretary of State cannot interpret the Act. Only the court can do that." As I understand it—the Secretary of State will correct me if I am wrong—that is not true in relation to this legislation. I thought that that constitutional principle applied to the liberties of the individual—in this case, a ratepayer in respect of certainty of local government, its efficiency and effectiveness. The Minister for Local Government knows from his experience that, unless one plans ahead in local government, there will not be the consistency and efficiency of operation which we all want. The liberty of the subject and of the bodies corporate is under threat. That interpretation has not been breached—my hon. Friend the Member for Copeland (Dr. Cunningham) mentioned 1668, an important year—except, conceivably, in time of war, and I doubt whether even then it has been breached. But that happens in the Bill.
  Mr. Ridley: I do not know whether the hon. Gentleman was here when I spoke to the amendment, but, even if he was, he does not seem to have heard me. I think that, if he had listened, he would agree that he has the wrong brief.
  Mr. Spearing: I shall certainly read what the Secretary of State said. But I am not speaking from a brief. I am speaking from the heart and from common sense about what concerns the majority of people in recipient areas.
  The Secretary of State is trying to operate a system which was initiated under the Local Government, Planning and Land Act 1980. The hon. Member for Eastbourne (Mr. Gow) is wrong. In Committee, we made it clear that this system would not work. The multipliers, which have been mentioned by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), were introduced. We said that the combination of the operations introduced by that legislation would be impractical.
  Year by year, Act by Act, the Secretary of State has tried not only to make the legislation work but to operate it politically. My hon. Friend the Member for Newham,
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  North-West (Mr. Banks) has made that clear. We can understand that approach up to a point. But in trying to operate those two desiderata, one clearly comes up against court judgments. The local authorities, in trying to get out of the lobster pot into which the Secretary of State put them, clearly used their constitutional rights to go to the courts. Over a period, there is greater and greater court activity over a wider interface of statutes. The more statutes there are, the wider the interface and the greater the potential for appeal to the courts. That is what has happened. There have been court cases because of that.
  Now there is only one way out, and the Secretary of State has taken it. The right hon. Gentleman says that this is not just a rate-capping measure; it is a court-capping measure. He says, "I am going to stop the nonsense of the continuous appeals and proliferation of legislation. I shall determine what the law is in future." That is the purpose of clause 1. In these amendments we are saying that we do not like that, but it should not apply at least in respect of those cases which are already in train. I should have thought that anyone with any common sense would say, "Even if we agree, as the Minister for Local Government clearly does, with the general principle of court capping, it should not be done retrospectively in those cases already in train."
  Of course, there is a consquential problem. Let us suppose that the court cases in train decide in favour of the local authorities and not in favour of the Secretary of State—which would not surprise any of us in view of the history of these matters. The Secretary of State is then left with an anomaly. The law is interpreted by the courts, and that may be contrary to the contents of the Bill. One borough—perhaps Greenwich or Islington—may have an apparent undue advantage in terms of the law. The Secretary of State says, "We cannot have that because the new laws which I am imposing on local authorities are meant to be uniform." He is left with only one alternative—he must make not only prospective determinations of the law, which is bad enough, but determinations in respect of cases that are in train. We say that at least there should be some amelioration by including these amendments in the Bill to protect the rights of the subjects involved in cases already in train in the courts.
  Mr. O'Brien: I wish to speak to this group of amendments because of my experience in local government and the problems of those serving local government—officers and members—who are trying to provide services for the people in their communities. The laws that govern local authorities handicap and hinder their work. If the Bill is passed in its present form, there will be further problems for those who serve local government. We must ensure that legislation is so framed that it gives local authorities and those who serve them the best possible chance to make sure that the service which they provide is in the best interests of their communities.
  I refer especially to amendment No. 2A. The Government are trying to take from local authorities the opportunity to obtain justice. The Secretary of State wants to make decisions which would not be permitted by a court.
  Mr. Ridley: I do not think that the hon. Gentleman can have heard my speech on the amendment when I made it clear that that is not the case. Did he hear what I said?
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  Mr. O' Brien: We all heard what the Secretary of State said. If what he said was true, why does he not accept the amendment which would clearly show that his intention is not what we believe it to be? If the Secretary of State is saying that we are wrong, I put it to him that the amendment would clear away all elements of doubt. Therefore, I ask him to accept amendment No. 2A.
  It is a fact that the Government's policy of controlling local government finance is now a complete shambles and a complete mess. As a result of the Government's proposals for controlling rate contributions through the rate support grant, the fire and civil defence authority in west Yorkshire is experiencing great problems in trying to provide adequate services and protection in the coming year. The Secretary of State is fully aware of the problems facing that authority and also of the tremendous shortfall in the resources that are needed for the coming year if the local authority is to provide adequate services.
  If the legislation is allowed to continue in its present form, and if this group of amendments is not accepted, the problems that face the authorities in west Yorkshire—especially the police authority—will intensify and the services that are provided to the local communities will be reduced.
  If this group of amendments is accepted, the problems that face my colleagues who serve those various authorities, including the police authority, will be eased. It would also give them a ray of hope and lighten the problems that they have reported to the Secretary of State.
  If the Bill is enacted, the services that they are expected to provide will no longer be available. The Bill comes from a Government who talk about reducing crime and providing better services and protection to local communities, but those things are not happening in west Yorkshire because of the Secretary of State's attempts to rate-cap and control the finances of local authorities.
  As I have said, the Government's control of local authority finance is a complete mess, but the Bill is not confined to sorting out that mess. It gives substantial additional powers to the Secretary of State to intervene in local authority accounting, to introduce rate capping for 1987–88 by formula, and to exclude the courts from reviewing those decisions.
  Transport authorities in west Yorkshire are being affected and elderly and infirm people who rely on public transport will also be affected by the proposals that are at present under consideration. The Bill will worsen the conditions under which the transport authorities in west Yorkshire have to provide public transport. If this group of amendments is not accepted, my colleagues who try to provide those services in west Yorkshire will encounter greater difficulties in ensuring that a continuous service is provided to the communities in the five metropolitan districts of west Yorkshire.
  A recent announcement referred to the amount of money that would be available for highway and road purposes in my area, and especially in the metropolitan district of Wakefield. Rate capping and cuts in resources will mean that local authorities will be unable to provide the necessary protection and services to the community. That is why we believe that the powers that the Secretary of State is taking further control the services that local government wishes to provide. On more than one occasion local electors have demonstrated through the ballot box
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  that they require those services that the Labour groups on local authorities have included in their manifestos, I refer especially to Leeds and Wakefield. However, the Secretary of State wishes to take unto himself powers to intervene in local authority accounting, and to introduce rate capping for the current year.
  There is such confusion about the current position that it is wrong for the Government to use the Bill to impose even more arbitrary solutions. The Secretary of State should think carefully about the issues raised in the Bill and about the points raised by my hon. Friends on this group of amendments because those comments are relevant to the services that local authorities wish to provide.
  In the area that I represent, and especially in Wakefield, we wish to help the 16 per cent. of the population who are unemployed. In this legislation, the Secretary of State is causing further problems to those authorities that are trying to provide jobs and job opportunities for the unemployed, and especially for the young unemployed who have never had a job, by trying to take substantial additional powers to intervene in local authority accounting.
  Amendment No. 2B states that the Secretary of State should report,
  "setting out the dates, and any other details which he may consider relevant, of the legal advice that was received by him prior to the introduction of this Act with respect to the legal interpretation of 'relevant' and 'total' expenditure for Rate Support Grant purposes."
  As a Member of Parliament representing an area of high unemployment, with public transport problems and facing the danger of a lack of proper protection and of police forces being unable to carry out their full responsibilities and duties to communities, I believe that Members of Parliament should have an opportunity to make representations on behalf of the people that we represent and our local authorities. We should be able to give a full and concise report of how those authorities will be affected by the "relevant" and "total" expenditure for rate support grant purposes.
  If the House does not accept the amendments that we propose, the facilities available to local authorities will be worsened. The relationship between the communities and the local authorities which serve them will deteriorate because the necessary services will not be provided. Therefore, this group of amendments should be given serious consideration. The Secretary of State should take on board all the points that have been made by those hon. Members with local authorities that are experiencing difficulties. Every week, hon. Members meet their constituents and hear their complaints about lack of services. The lack of services is due to the attitude of the Secretary of State. He will not provide the resources necessary to enable local authorities to carry out the services. I ask the Secretary of State to consider seriously the group of amendments and to support the amendments that have been proposed by my colleagues.
  Mr. Andrew F. Bennett: I apologise to the Committee for not having heard the Secretary of State. I wish to pursue the question of the relationship between the Bill, the amendments, and the work of the Select Committee and the Joint Committee on Statutory Instruments. I have looked with some care at the sections dealing with the question of the Secretary of State taking additional powers. I can understand that he is trying to stop judges

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  making decisions that he might not like. Since he has got the law wrong on several occasions, I can appreciate that he may want to eliminate judges. However, will he explain whether he also intends to eliminate the scrutiny of the House? Most of the rate support grant legislation is implemented by orders. The first line of clause 6 says:
  "For the purposes of any order made before the passing of this Act".
  As I understand it, the orders are normally scrutinised by the Joint Committee or the Select Committee, depending on whether they are affirmative money orders or whether they are simply enabling——
  Mr. Chris Smith: Is it not the case that that applies not only to orders made before the enactment of the Bill, and that it may well include orders made after the enactment of the Bill under clause 6(3) which relates to the designation of an authority for rate capping for the financial year 1987–88? The Secretary of State will have to make orders to implement the formula contained in schedule 2 as part of that exercise of rate designation, and those orders will, by their very nature, have to be after the passing of the Act because they will have to enshrine the formula that is before us for the first time as part of the Bill.
  Mr. Bennett: As I have said, the problem is that implementation of the legislation has to be done by orders and the orders are scrutinised by the Select Committee or the Joint Committee. Our terms of reference as a Committee are very narrow. We are supposed to see whether the legislation is legal. We are entitled to see whether it needs elucidation. We do not usually take that too far, especially in this sort of area since it is difficult to find an order on rates that is easy to understand. The Committee also has various other powers.
  Having looked at the order, especially on the basis of advice from Speaker's Counsel and others, we are then entitled to make a report to the House and, if it is the Joint Committee, to the House of Lords. It is the normal procedure that if we draw the House's attention to something that is ultra vires, the Government withdraw it and bring in a new order, usually with an an apology. We have very little power to force the Government to do that but it would be foolish for the Government to continue with an order that has been pointed out to be ultra vires because they know that it could be subject to a challenge in the courts fairly quickly and that the courts would cause far more trouble for the Minister than we as a Committee. Therefore, the back-up for the Select Committee and the Joint Committee is the fact that, although we can produce reports, anyone who is aggrieved can challenge the order in the courts.
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  As I understand the Bill, especially clause 4(6) and clause 6(4), the Government are taking away the powers of judges to overturn decisions. If the Government had made it clear by saying that anything that was deemed to be illegal was in fact legal, which is in effect what they are trying to do, it would have bound the Select Committee and the Joint Committee. However, the Government are not saying that anything that is ultra vires shall be intra vires. They say that that will apply only if they are challenged in the courts. Therefore, the Government are taking away from us the back-up power of the courts.
  The Secretary of State may say that that does not apply because the Government will be able to quote this Bill and
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  be able to make all the orders as a result of this legislation. I accept that the citations for statutory instruments that will be prepared in the future will include previous legislation plus this legislation. However, I am not sure how one would put this legislation into the citations if the statutory instruments are made before the Bill is enacted. That presents problems with the orders that have been laid this year insofar as they will be made legal by the legislation. It will be the duty of the Select Committee or the Joint Committee to report on the orders if they are ultra vires.
  I should like an explanation from the Secretary of State as to how this Bill makes the statutory instruments legal as opposed to taking away the power of the courts to rule that they are illegal. The problem of the statutory instruments is another illustration of the way in which the Government now seem to want to go beyond any legal framework that we have been used to in the House and to be able to say, "This is the money we are giving out and we do not want to face any challenge." If that is the procedure that the Government want, why shroud it in complications?
  The Secretary of State should say honestly, "This is the way I am going to dish out the money. It has nothing to do with any principles of need or resources within a community. It is purely my arbitrary decision as Secretary of State. These are the authorities I like and these are the authorities I dislike." Why put so much mumbo-jumbo and confusion into the system when that is basically what the Secretary of State is doing? Why does he not come clean and make it clear that he is handing out the money to the authorities he likes, that he is not giving it to the authorities he dislikes, that it is purely arbitrary and that there is no rhyme or reason to it? Perhaps then he will go a little further and say that part of the reason for the legislation, as I suggested previously, is that he is doing his best to discredit the system of rates in Britain. He wants to demonstrate that it is complicated and absurd, so that he will build up more pressure for the abolition of rates.
  I am not a great enthusiast for the rates, but I suggest that, until the Secretary of State finds an alternative way of raising local finance, he is setting out to undermine local democracy. As long as he cannot come up with a better alternative that retains the democratic right of local people to raise money and to receive an allocation of national resources to meet the needs of their locality, he is continuing to undermine local democracy. The more he undermines local democracy, the more he is paving the way for the undermining of national democracy.
  The Government seem to be claiming that they cannot trust local politicians and that appears to be the basis of the Secretary of State's allocation of resources. He seems to disapprove of some local authorities. He does not trust some local politicians and he is critical of them. As long as the Secretary of State continues to undermine local politicians in that way, he is claiming that the electorate cannot be trusted. The logic of that is that, if one cannot trust the electorate to elect local councillors, why should the electorate be trusted to elect anyone else?
  The Secretary of State is undermining democracy. He will have a great deal to account for in future in the way in which he has damaged the whole concept of local democracy. When the Secretary of State replies, I hope that he will make it clear that he believes in local democracy and the rights of people to elect people with whom he disagrees. I hope that he will state that he

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  believes that some people must put up with decisions that they do not like and that, on occasion, local authorities will want to spend money in ways that do not meet with his approval; yet they have every right to do that, because they have been elected.
  As the Secretary of State is seeking to make the legislation bypass the courts, can he tell us whether he is trying to make it bypass the Standing Orders of the House that ensure the proper scrutiny of statutory instruments? If he is removing the back-up power of the courts, what power does he intend the Joint Committee on Statutory Instruments to have to draw attention to the fact that some of his regulations will be ultra vires? I hope that the Minister can satisfy me at least on my second point, if not on my first.
  Mr. Allen McKay: I want to reinforce the argument by introducing a voice from south Yorkshire. I will come later to such items as the fire service and transport in south Yorkshire.
  Like my hon. Friend the Member for Denton and Reddish (Mr. Bennett), I want to refer to the erosion of democracy that has taken place in the House over the past five or six years. A main theme of our debates recently has been the erosion of democracy—the centralisation of power through the removal of power from local government to central Government. The Bill is a further step in that direction.
  The Secretary of State believes that he is above the law. Indeed, if he is not already above the law, he seeks to make himself so. Under the provisions in the Bill, those local authorities which believe that they have been wronged will no longer have the opportunity to take the Secretary of State to court.
  Mr. Ridley indicated dissent.
  Mr. McKay: The Secretary of State is shaking his head. However, the fact remains that we could not have conceived of this situation 12 months ago. However, it has happened because the Secretary of State and his predecessors decided for, some reason or other, that central Government know best. They decided not to trust the local electorate who choose the people to look after their area. Central Government are now determining what should happen in the areas.
  I have no argument with a Government of any political persuasion deciding that they have a certain amount of money to give to local government. That is a decision for central Government. However, I would probably argue about the sum that they allocated, but that is a different matter. Not only have the Government decided that they will not allocate the money to local government; they have decided that local government will not be able to raise the money to make up for what it has lost.
  The Government have gone a step further. If local government decides to challenge the Secretary of State in court, the Secretary of State has refused to allow local government that right. The Bill will make unlawful what was a lawful procedure before it was introduced. It is only a short step for the Secretary of State to carry on from that position and make a similar provision in future. The Government have taken away local government redress against central Government diktat.
  I have always believed, and will always believe, that the law of this country is divorced and separate from any
  664
  entity. It must be so to act impartially. I may not agree with some of the conclusions reached by the law, but I agree that the law should have the ability and the right to act impartially. However, the Bill contains provisions which will niggle at the edges of that right and the Committee should consider what is happening.
  Any Secretary of State may adopt the kind of powers included in the Bill. However, I am concerned about the principle and why the Secretary of State has chosen to use the power. He has chosen to adopt these powers simply because he was wrong in the past, was challenged and lost. He has determined that certain decisions will not be taken.
  I want to consider a sample from my local authority in respect of the determination of the figures. The figures are determined wrongly. Under the provisions in the Bill, a local authority will not be able to take the Secretary of State to court over the cuts that he has caused. I will consider the figures in detail later because I want to highlight the way in which the figures have gone wrong. However, we must accept the amendments because, by not accepting them, we accept a dilution of the present free and democratic structure.
  Mr. Tony Banks: I want to consider amendment No. 85.
  Mr. Ridley: The hon. Gentleman has spoken before.
  Mr. Banks: Yes; this is the second time that I have addressed the Committee and I understand that I am in order. The Secretary of State seems to imply that it is surprising for an hon. Member to speak twice. I am not speaking twice because I want to drone on or because I am enamoured by the sound of my own voice. When I spoke previously I referred specifically to the Greenwich case. I do not want to tax the Committee, but I want to make some general points about this part of the Bill and amendment No. 85 will enable me to to that.
  Mr. Allan Roberts: It might make for a better debate if some Conservative Members spoke for the first time or if Tory Members attended this important Committee. Only the hon. Member for Cheltenham (Mr. Irving), with his particular interest and passion for local government and local government democracy, who is not famous for supporting the Government, is in attendance. The only other Conservative Members present are Ministers and their parliamentary private secretaries. That is how lightly the Conservatives treat this important Bill.
  Mr. Banks: I entirely agree with my hon. Friend. However, it is clear from the languid pose adopted by the hon. Member for Cheltenham (Mr. Irving) that he is not evincing much passion in respect of the Bill. However, my hon. Friend the Member for Bootle (Mr. Roberts) has made the point. This Bill is not the most fascinating topic that we could come to grips with. The empty Conservative Benches and the not too full Opposition Benches bear witness to that. We should speak the truth in Committee as we should in the House. The truth is that this is pretty boring stuff—and that includes my speech.
  Mr. Michie: I agree with my hon. Friend's last point. However, does he agree that it is not really fair to criticise Conservative Back-Bench Members for not being present as they do not really agree with the Bill but are frightened to say so?
  Mr. Banks: I wish that that was the case. The truth is that we simply do not have the expertise in the House to deal with the constant interferences in the day-to-day affairs of town halls, nor do we have the interest.
  The Conservative Benches are devoid of human life form. I exclude, of course, those on the Front Bench. It would be too unkind to say that they did not correspond with a known life form. When amendment No. 2A is decided on, hundreds of hon. Members will flood in, but none of them will know what has been discussed. They will not have the foggiest idea.
  The Temporary Chairman (Miss Betty Boothroyd): Order. This is an abuse of the Committee when there are so many amendments under consideration. I understand that the hon. Member wishes to speak to amendment No. 85.
  Mr. Banks: I do, but I was tempted into a far more interesting area of discourse and speculation. If my hon. Friends do not expose me to the one thing which I cannot resist, which is temptation, I shall deal with amendment No. 85 which proposes, in clause 4, page 5, line 7, at end add
  'save those decisions of a court in respect of litigation before the courts on 12th January.'.
  We are asking the Secretary of State to make exceptions of local authorities which have already started litigation in respect of previous decisions made by the Secretary of State. That seems perfectly reasonable.
  Ministers and Conservative Members always say that local authorities should be aware of the sums of money that they spend on behalf of their ratepayers and that they have a fiduciary responsibility and should not waste money. That takes us into political opinion and speculation. No responsible lawyer in a local authority encourages a local authority to proceed in the courts if it is a complete waste of time because there is no chance of success. No legal department was aware that the Secretary of State would introduce the Bill and change the name of the game in respect of previous rate support grant settlements.
  In fairness to the legal advice given by legal officers, and in fairness to ratepayers, who have already committed a great deal of money to briefing counsel and preparing the necessary documents—we know how much that costs—it would seem fair that local authorities should be allowed to proceed. They might get some advantage from the amendments whereas others might not. I do not know whether that takes us into arguments about hybridity, but it seems only equitable that local authorities should be able to proceed with the litigation that they started before 12 January—the date of the Bill's Second Reading.
  8.30 pm
  Mr. Straw: I congratulate my hon. Friend the Member for Newham, North-West (Mr. Banks) on introducing some humour into the debate—a difficult task bearing in mind the subject matter. Amendment No. 2A addresses the proceedings that Greenwich has brought against the Secretary of State. My hon. Friend the Member for Newham, North-West went into some detail about how Greenwich would be adversely affected if the Bill went through unamended. I do not want to repeat everything that he said in his first speech but I should like to put some points on the record.
  First, Greenwich is a relatively low-spending authority. Its expenditure per head—I speak from memory—was
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  £331 in 1985–86, some £150 per head less than Hammersmith and Fulham, which was then Conservative-controlled. It was always a grave injustice to Greenwich that it should have been so rate-capped. As my hon. Friend the Member for Newham, North-West said, Greenwich was rate-capped and suffered some quite gratuitous penalties. The first concerned Bromley, which complained to the Secretary of State about one year ago that it was not getting enough allowance in rate support grant terms for taking over additional highways on abolition of the Greater London council. The then Secretary of State decided to give Bromley the money and take it away from other authorities. Greenwich lost £3,828,000 of grant in 1986–87.
  Secondly, Greenwich received much less for the, GLC services that it took over than the cost of those services. It estimates the cost at £24 million whereas it has received only £20·5 million in grant. There have been other problems, including an allowance of only £138,000 for expenditure in respect of land drainage, whereas it has had to pay out £769,000 over which it has had absolutely no control.
  Greenwich made its rate-cap challenge. The Secretary of State said that Greenwich won the rate-cap challenge on something that was not central to the points that it was taking to court. That is the nature of court action. One sends out about five shots and scores one hit. It is not for the Secretary of State to complain about that as it is entirely legitimate and how the courts work. Greenwich won its action as, we believe, Islington would. The Secretary of State consented to judgment.
  I hope that when we debate schedule 2 and clause 7, the Secretary of State will have the grace to accept that it was wrong to rate-limit Greenwich under the legislation, as everybody else thought it was. If the legislation had stood, the Secretary of State would not have been able to continue to rate-cap Greenwich. He has said that the only purpose of the Bill is to make the law what everybody thought it was, so it must be wrong to continue to rate-cap Greenwich.
  Mr. Ridley: That is an absurd argument. Does the hon. Gentleman not realise that, on that analogy, I could not rate-cap anybody or pay any rate support grant? He is asking whether, just because he is chummy with Greenwich, I make an exception for it.
  Mr. Straw: I am saying that Greenwich took a court action against the Secretary of State on a perfectly sound point and the courts found in favour of Greenwich and that that decision ought to be allowed to stand.
  Mr. Ridley: The courts would have found that there was no basis whatever for the definition of total expenditure, and therefore any case which was brought on the subject of total expenditure would have failed. The hon. Gentleman does not realise that Greenwich did not bring a case on the total expenditure point—it just happened to come up.
  Mr. Straw: Greenwich could not possibly have won the point unless it pleaded it. There is no way in which the court could have made a decision on a point unless it was argued before the judge. Judges do not normally tell plaintiffs that they disagree with the points that they have raised and that there is a better one, and this is what it is. Greenwich was well advised, took a point and won.
  Mr. Chris Smith: I apologise for interrupting my hon. Friend in his flow but is not the precise point as it applies to both Greenwich and Islington the fact that in the one case the Secretary of State was found to be at fault by the court and in the other case would have been found to be at fault because of the problem relating to total expenditure? However, the nub of both cases is different from the point relating to total expenditure. The real issue in relation to Greenwich was multipliers and in relation to Islington it was the 12·5 per cent. figure above GREA. Introducing this legislation, which the Secretary of State claims has to do with total expenditure, the Secretary of State has managed to include both authorities under the legislation and ignore those other points which the authorities legitimately raised.
  Mr. Straw: I think that the implication of my hon. Friend's point is that if Greenwich had had the chance to argue properly the multiplier issue it might have won. Similarly, if Islington had had the chance to argue that its GRE is below the 12·5 per cent. trigger point, it, too, would have won. I agree with my hon. Friend that if the two cases had been allowed to be argued on the central merits that the plaintiffs have raised, those authorities would have won.
  Let us turn to the more serious aspects of this group of amendments as it relates to clauses 4 and 6 of the Bill. Clause 4, in respect of the rate support grant, and clause 6, in respect of the Rates Act 1984, seek to validate decisions which are taken by the Secretary of State before the passing of this Act and to exclude the Secretary of State from any subsequent court action in respect of decisions that he has made. Given that the ostensible and innocent purpose of the Bill is to clear up a legislative mess—a mess of the Government's making going back over seven years—one can understand why the Secretary of State is seeking to validate decisions which had been made on the basis of the law as everybody thought it was but, as it turns out, was not. Even if we do not agree with the detail of the Bill, we can understand why the Secretary of State is seeking to do that.
  However, having validated such decisions, the Secretary of State then seeks to exclude the courts from checking whether the newly validated decisions have been made in accordance with the law. The Secretary of State seeks to make light of the decisions which he can make under clauses 4 and 6 of the Bill. It is important for us to understand the wide nature of the powers which the Secretary of State can exercise under these clauses and in respect of which he is not subject—as he hopes—to any kind of check from the courts.
  Clause 4(2) defines the relevant provisions which are set out in 4(1) as:
  "Anything done by the Secretary of State before the passing of this Act for the purpose of the relevant provisions in relation to any of the initial years or intermediate years shall be deemed to have been done in compliance with those provisions."
  The relevant provisions are part VI of the 1980 Act, section 8 of and schedule 2 to the Local Government Finance Act 1982, sections 2 and 3 of the Education Act 1986 and section 2 of the Rate Support Grants Act 1986. The Secretary of State is aware that part VI of the Local Government, Planning and Land Act 1980 and a further substantial chunk of that Act deal with the whole structure of the present rate support grant. They deal with matters such as clause 53.
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  "Introduction of new system of rate support grants."
  Clause 54
  "The aggregate amount of rate support grants."
  Clause 55
  "The domestic rate relief grant."
  Clause 56
  "The block grant."
  There is a great chunk on the block grant.
  Clause 57
  "Determination of grant-related poundage and grant-related expenditure."
  Clause 58
  "Principles for determination of grant-related poundage."
  Clause 59
  "Adjustments of distribution of block grant."
  Clause 60
  "The Rate Support Grant Report.
  Clause 61
  "Supplementary reports."
  Clause 62
  "Adjustment of block grant total."
  Clause 63
  "Adjustment of block grant in connection with education, etc."
  Clause 64
  "Special provisions for Metropolitan Police District."
  I have read those titles out to illustrate to the Secretary of State and my hon. Friends the breadth of powers concerning which the Secretary of State is having separate provisions written into the Bill to validate all past acts.
  8.45 pm
  The other powers are included in section 8 and schedule to the Local Government Finance Act 1982. Schedule 2 is all to do with the block grant for the receiver of the Metropolitan police. Other powers are contained in sections 2 and 3 of the Education Act 1986 and, to cap it all, section 2 of the Rate Support Grants Act 1986. My hon. Friends will recall that that Act was supposed to be the final solution to the unlawfulness and the lacunae of the 1980 Act. That Act states
  "As respects determinations made under section 59"
  I have just read out that section—
  "of the said Act of 1980 after the passing of this Act the following provisions shall have effect instead of subsection (6)(a) of that section and section 8(3)(a) of the Local Government Finance Act 1982."
  Under clause 6 of the Bill the Secretary of State is seeking to validate any decision which he makes in respect of the Rates Act until the passing of this Bill, which may take place in March or April. The Secretary of State has sought to suggest that as far as clause 4 is concerned the decisions which are being validated are decisions which he has already made but he must accept that as far as the Rate Acts are concerned these decisions could be prospective as well. In clause 6(2) and (3) it states:
  (2) Anything done by the Secretary of State before the passing of this Act for the purposes of Part I of the 1984 Act in relation to the financial year beginning in 1985 or that beginning in 1986 shall be deemed to have been done in compliance with the provisions of that Part.
  (3) For the purposes of section 7 below and Schedule 2 to this Act—

  (a) any designation of an authority under section 2 of the 1984 Act in relation to the financial year beginning in 1987, and

  (b) any determination and notification under section 3(1) and (3) of that Act of a level for an authority's total expenditure in that year,

  shall, if made before the passing of this Act, be deemed to have been made in compliance with the provisions of Part I of the 1984 Act.

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  Clause 4 states that the judge-proof limit relates only to 4(1) but in clause 6 the judge-proof limit relates to all the powers which the Secretary of State has taken. In clause 6(4) it states:
  (4) This section shall have effect notwithstanding any decision of a court (whether before or after the passing of this Act) purporting to have a contrary effect.
  It is extremely dangerous and unnecessary for the Secretary of State to take the powers provided under clause 4(6) but at least I half understand his arguments. But what is his argument for taking the powers under clause 6(4)? It does not relate to past Acts but relates to the designation of individual authorities. Do individual authorities that have been rate-capped have a right to go to the court if they believe the Secretary of State has exercised his power unlawfully? Rate-capping has an adverse effect upon individual authorities and it is possible that the Secretary of State or his legal advisers may have made a wrong decision in respect of designation, the determination of the expenditure limit or total expenditure.
  Mr. Dobson: It is more than likely.
  Mr. Straw: In those circumstances, is it not right that the authority should be able to go to court? What possible administrative mischief is the Secretary of State seeking to avoid by preventing authorities from going to court? What is he scared of, given that he says that in other respects he is ready and willing to let local authorities go to court to challenge his decisions?
  On the general issue of these judge-proof clauses the Secretary of State wants to brush aside the enormity of what he is doing. I cannot examine the inner workings of his mind and it may be that he believes that what he is doing in clauses 4(6) and 6(4) is innocent and trivial. It is neither innocent nor trivial. The only ways in which the rule of law can be protected—and all of us live by the rule of law—is first by an elected Parliament and secondly by having courts to supervise the decisions of the Executive to ensure that the decisions that they make are made fairly and within the law.
  I should like to quote from Wade on administrative law. It talks of a leading case called the anisminic case, and says that that case and it sequels were:
  "The culmination of the judicial insistence, so often emphasised in this work, that administrative agencies and tribunals"—
  that includes Ministers—
  "must at all costs be prevented from being sole judges of the validity of their own acts. If this were allowed, to quote Denning Lord Justice again, 'the rule of law would be at an end."
  It then goes on to quote Lord Wilberforce expressing the same idea in different words. In a case in 1933 Lord Atkin said in objecting to what he described as finality clauses in legislation:
  "Finality is a good thing but justice is better."
  Essentially, that is the view that we hold. I should like to quote again from Lord Denning from his work, "What Next in the Law?" In that work he discusses the discretion of Ministers and says that Ministers may sometimes say:
  "The statute gives me an unfettered discretion. It cannot he challenged in the courts of law. If I should exercise it wrongly, I can be questioned in the House. But the courts cannot restrain me."
  Lord Denning goes on to explain how the courts have indeed taken powers to supervise the work of Ministers even where Ministers have sought to preclude that
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  supervision. He quotes what he said in Laker's case in 1977 which was an action taken against a Labour Minister. It is right that Labour as well as Conservative Ministers should be subject to the courts no matter how uncomfortable the court decisions may be. In that case the court said:
  "These courts have the authority—and I would add the duty—in a proper case, when called upon, to inquire into the exercising of a discretionary power by a minister or his department. If it is found that this power has been exercised improperly or mistakenly so as to infringe unjustly on the legitimate rights and interests of the subject, then these courts must so declare. They stand, as ever, between the executive and the subject, as Lord Atkin said in a famous passage, alert to see that any coercive action is justified in law. To which I would add: be alert to see that a discretionary power is not exceeded or misused."
  The rate support grant legislation contains page after page of discretionary power in the hands of Ministers. Parliament has accepted that that discretion should be given to Ministers. It is a powerful weapon, but as Lord Denning and Wade have said it should be subject to the supervision of the courts.
  The Secretary of State is breaching a major constitutional principle. He is not breaching it for very much because he seems to be saying that this Bill has now got the law straight. If the law is straight, there need not be any legal challenges and he need not not make a judgment. If the law is not straight it is essential that the courts should be able to intervene and protect local authorities, the subject, from unjust and arbitrary discretion by Ministers. That is why we object to these provisions and why we shall force them to a vote.
  Mr. Ridley: I shall be brief because I have spoken already and I do not want to take up the time of the Committee. As I said to the hon. Member for Birmingham, Ladywood (Ms. Short), I should prefer to deal with the Birmingham point separately. There are amendments relating to it and I shall return to that when the time is reached. I see that the hon. Member for Leeds, West (Mr. Meadowcroft) is not in his place. Many speakers in the debate come and go, but not many listened to what I said on the first occasion. Practically the only one who did so was the hon. Member for Blackburn (Mr. Straw).
  Mr. Tony Banks rose——
  Ms. Clare Short rose——
  Mr. Ridley: It is not a matter of whether the hon. Member for Newham, North-West (Mr. Banks) or the hon. Member for Ladywood were here but whether in their speeches they showed the faintest recognition of the points that I have sought to make. The Committee does not have too good a record on that. The hon. Member for Leeds, West and a number of hon. Members missed the point that if one looks at clause 4(1) which must be read in relation to the powers contained in clause 4(6) about judge-proof past actions, one sees that it says:
  "Anything done by the Secretary of State before the passing of this Act".
  It is only in relation to actions taken before this Act was published that anything I do escapes challenge.
  Mr. Tony Banks: Passed, not published.
  Mr. Ridley: The hon. Gentleman is wrong, because since the Act was published I have done nothing nor will I do anything in the sense of this clause. I have taken no

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  actions whatever in relation to the rate support grant settlement since the time that I realised it would be illegal for me to do so.
  Mr. Tony Banks: It is the Bill which has been published, not an Act, and although the Secretary of State has taken no decisions he must get it quite clear that one publishes a Bill, not an Act.
  Mr. Ridley: This does not give me the powers that hon. Members thought it did, that I could affect future things without my decisions being subject to review by the courts. That is not the case because it is only what I have done hitherto which is validated, not what I might do in future.
  9 pm
  Mr. Spearing: This is the needle point which the Secretary of State picked up during my remarks. Has the right hon. Gentleman not taken the point on board? Will he reply to the point raised by my hon. Friend the Member for Blackburn (Mr. Straw) that clause 6(4) is prospective? The wording of that subsection makes it clear:
  "before or after the passing of this Act, purporting to have a contrary effect"
  in respect of the effects of the whole of clause 6 which relates to the complicated provisions in schedule 2. Is that not prospective?
  Mr. Ridley: Hitherto, I have been talking about clause 4. I was about to refer to clause 6, which is a rather different point, as I said on the first occasion. I must make it clear to the House that the Bill proposes that rate limitation and a pre-set limitation should be instituted by the schedule, which specifies both the authorities and the rate limits by reference to clause 6(3). That makes the Government's intention absolutely clear.
  If the House passes the Bill to become an Act, those authorities and those expenditure limits, as amended or not by Parliament, will indeed be the statute law on rate limitation. Therefore, any concept that there can be a challenge to decisions in the courts is a challenge to Parliament because Parliament will have enacted the legislation and these will be the provisions.
  Mr. Straw rose——
  Mr. Chris Smith rose——
  Mr. Ridley: Let me complete my point. Any challenge may or may not take place both as to the designation—the Islington case—and as to any other matter to do with rate capping—the Greenwich case. Whatever happens in those cases, it must be superimposed by the statute power in the Bill to limit the rates or precepts of those authorities, and that must override any court action that takes place beforehand.
  Mr. Chris Smith: With respect, the Secretary of State is talking nonsense. Any subsequent challenge to the designation or rate capping of a specific authority would be a challenge not to Parliament but to the exercise by the Secretary of State of general powers that are given to him by this statute and, in part, included in schedule 2, which does not specify individual authorities, except in a number of specific cases. It does not specify actual figures but it specifies formulae that will be subject to a report or an order to be tabled by the Secretary of State giving his administrative decision.
  Mr. Ridley: The hon. Gentleman is right. The point made by the hon. Member for Denton and Reddish (Mr. Bennett) is valid, too. Orders will be made after the passage of the Bill, which will be subject to the statutory instruments scrutiny procedures and will have the back-up of the courts, but they will be made under the Act—if, by then, it is an Act—and, therefore, the powers in the Act will enable those orders to be legal, and the courts will have to interpret them, if there is a challenge. They will be made under the powers of this legislation and not under the Rates Act 1984.
  Mr. Straw: I refer the Secretary of State to the point that he made a moment ago. He said that the Bill had to be made judge-proof because a challenge to the courts would be a challenge not to Ministers but to Parliament. With great respect, it is a challenge, as it were, to the authority or to the nature of decisions made by Parliament and embodied in statute that forms the basis of every single application for judicial review. If what the Secretary of State said is right, he should argue that there should be no judicial review. Does the Secretary of State not understand that judicial review is about challenging the use of statutes, either by Ministers or by other people who have powers under statute?
  Mr. Ridley: The hon. Gentleman still does not seem to understand. If the Bill becomes an Act, the provisions about rate limitations will have statutory force. Does the hon. Gentleman agree with that? If, in some way, there is to be a challenge to the present proposals on rate limitation, it will be prohibited only if the Bill becomes law. Clause 6 will not come into effect until the Bill becomes law. If, on the other hand, the Bill does not become law, there will be no restriction to the right to challenge. If the Bill becomes law, the rate-capping procedures will be as they are in the Bill, and the limits are there, so there is no conceivable point in a challenge that will be overtuned by the Bill. If the Bill does not become law, the challenge will not be upset. Of those Opposition Members who spoke in Committee——
  Mr. Andrew F. Bennett: Will the Secretary of State give way?
  Mr. Ridley: No, I shall not give way. I have already given way a great deal. A respectable number of Opposition Members did not hear my first speech and can be forgiven for having got it wrong. A less respectable number of Opposition Members heard my first speech but they have persisted in getting it wrong. Furthermore, the hon. Member for Blackburn realised that the Opposition were making a completely bogus point and climbed down.
  Question put, That the amendment be made:—
  The Committee divided: Ayes 177, Noes 232.

  Division No. 58]

  [9.05 pm

  AYES

  Abse, Leo

  Benn, Rt Hon Tony

  Adams, Allen (Paisley N)

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

  Alton, David

  Bermingham, Gerald

  Anderson, Donald

  Bidwell, Sydney

  Archer, Rt Hon Peter

  Blair, Anthony

  Ashley, Rt Hon Jack

  Boyes, Roland

  Ashton, Joe

  Bray, Dr Jeremy

  Atkinson, N. (Tottenham)

  Brown, Gordon (D'f'mline E)

  Bagier, Gordon A. T.

  Brown, Hugh D. (Pro van)

  Banks, Tony (Newham NW)

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

  Barron, Kevin

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

  Beckett, Mrs Margaret

  Bruce, Malcolm

  Bell, Stuart

  Buchan, Norman

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  Caborn, Richard

  McCartney, Hugh

  Callaghan, Jim (Heyw'd & M)

  McDonald, Dr Oonagh

  Campbell, Ian

  McKay, Allen (Penistone)

  Canavan, Dennis

  McNamara, Kevin

  Carter-Jones, Lewis

  McTaggart, Robert

  Cartwright, John

  McWilliam, John

  Clark, Dr David (S Shields)

  Madden, Max

  Clarke, Thomas

  Marek, Dr John

  Clelland, David Gordon

  Marshall, David (Shettleston)

  Clwyd, Mrs Ann

  Martin, Michael

  Cocks, Rt Hon M. (Bristol S)

  Mason, Rt Hon Roy

  Cohen, Harry

  Maxton, John

  Coleman, Donald

  Maynard, Miss Joan

  Conlan, Bernard

  Meacher, Michael

  Cook, Frank (Stockton North)

  Meadowcroft, Michael

  Cox, Thomas (Tooting)

  Michie, William

  Crowther, Stan

  Mikardo, Ian

  Cunliffe, Lawrence

  Mitchell, Austin (G't Grimsby)

  Cunningham, Dr John

  Nellist, David

  Dalyell, Tam

  Oakes, Rt Hon Gordon

  Davies, Ronald (Caerphilly)

  O'Brien, William

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

  O'Neill, Martin

  Deakins, Eric

  Orme, Rt Hon Stanley

  Dewar, Donald

  Park, George

  Dixon, Donald

  Parry, Robert

  Dobson, Frank

  Patchett, Terry

  Dormand, Jack

  Pavitt, Laurie

  Douglas, Dick

  Pendry, Tom

  Dubs, Alfred

  Powell, Raymond (Ogmore)

  Dunwoody, Hon Mrs G.

  Prescott, John

  Eadie, Alex

  Radice, Giles

  Eastham, Ken

  Randall, Stuart

  Evans, John (St. Helens N)

  Raynsford, Nick

  Fatchett, Derek

  Redmond, Martin

  Field, Frank (Birkenhead)

  Rees, Rt Hon M. (Leeds S)

  Fields, T. (L'pool Broad Gn)

  Richardson, Ms Jo

  Fisher, Mark

  Roberts, Allan (Bootle)

  Flannery, Martin

  Robinson, G. (Coventry NW)

  Foot, Rt Hon Michael

  Rogers, Allan

  Forrester, John

  Rooker, J. W.

  Foster, Derek

  Ross, Ernest (Dundee W)

  Fraser, J. (Norwood)

  Rowlands, Ted

  Freeson, Rt Hon Reginald

  Sheerman, Barry

  Freud, Clement

  Sheldon, Rt Hon R.

  Garrett, W. E.

  Shields, Mrs Elizabeth

  George, Bruce

  Shore, Rt Hon Peter

  Gilbert, Rt Hon Dr John

  Short, Ms Clare (Ladywood)

  Golding, Mrs Llin

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

  Gould, Bryan

  Silkin, Rt Hon J.

  Gourlay, Harry

  Skinner, Dennis

  Hamilton, James (M'well N)

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

  Hancock, Michael

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

  Hardy, Peter

  Snape, Peter

  Harrison, Rt Hon Walter

  Soley, Clive

  Hart, Rt Hon Dame Judith

  Spearing, Nigel

  Hattersley, Rt Hon Roy

  Steel, Rt Hon David

  Heffer, Eric S.

  Stewart, Rt Hon D. (W Isles)

  Hogg, N. (C'nauld & Kilsyth)

  Stott, Roger

  Holland, Stuart (Vauxhall)

  Straw, Jack

  Home Robertson, John

  Thomas, Dr R. (Carmarthen)

  Howell, Rt Hon D. (S'heath)

  Thompson, J. (Wansbeck)

  Howells, Geraint

  Thorne, Stan (Preston)

  Hoyle, Douglas

  Torney, Tom

  Hughes, Robert (Aberdeen N)

  Wainwright, R.

  Hughes, Roy (Newport East)

  Wallace, James

  John, Brynmor

  Wardell, Gareth (Gower)

  Jones, Barry (Alyn & Deeside)

  Weetch, Ken

  Kaufman, Rt Hon Gerald

  Welsh, Michael

  Lambie, David

  White, James

  Lamond, James

  Williams, Rt Hon A.

  Leadbitter, Ted

  Wilson, Gordon

  Leighton, Ronald

  Winnick, David

  Lewis, Terence (Worsley)

  Woodall, Alec

  Litherland, Robert

  Young, David (Bolton SE)

  Livsey, Richard

  Lloyd, Tony (Stretford)

  Tellers for the Ayes:

  Lofthouse, Geoffrey

  Mr. Frank Haynes and

  Loyden, Edward

  Mr. Sean Hughes.

  674

  NOES

  Alexander, Richard

  Hunt, David (Wirral W)

  Ancram, Michael

  Hunt, John (Ravensbourne)

  Aspinwall, Jack

  Hunter, Andrew

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

  Irving, Charles

  Best, Keith

  Jackson, Robert

  Biffen, Rt Hon John

  Jessel, Toby

  Body, Sir Richard

  Jones, Gwilym (Cardiff N)

  Bottomley, Peter

  Jones, Robert (Herts W)

  Boyson, Dr Rhodes

  Joseph, Rt Hon Sir Keith

  Brown, M. (Brigg & Cl'thpes)

  Kershaw, Sir Anthony

  Browne, John

  Key, Robert

  Bruinvels, Peter

  King, Roger (B'ham N'field)

  Buchanan-Smith, Rt Hon A.

  Knight, Greg (Derby N)

  Butler, Rt Hon Sir Adam

  Knight, Dame Jill (Edgbaston)

  Chope, Christopher

  Knowles, Michael

  Cockeram, Eric

  Knox, David

  Coombs, Simon

  Lamont, Rt Hon Norman

  Cope, John

  Lang, Ian

  Currie, Mrs Edwina

  Latham, Michael

  Dorrell, Stephen

  Lawler, Geoffrey

  Douglas-Hamilton, Lord J.

  Lawrence, Ivan

  Fallon, Michael

  Lee, John (Pendle)

  Farr, Sir John

  Leigh, Edward (Gainsbor'gh)

  Fenner, Dame Peggy

  Lennox-Boyd, Hon Mark

  Finsberg, Sir Geoffrey

  Lester, Jim

  Fletcher, Sir Alexander

  Lewis, Sir Kenneth (Stamf'd)

  Fookes, Miss Janet

  Lightbown, David

  Forman, Nigel

  Lilley, Peter

  Forsyth, Michael (Stirling)

  Lloyd, Sir Ian (Havant)

  Forth, Eric

  Lloyd, Peter (Fareham)

  Fox, Sir Marcus

  Lord, Michael

  Franks, Cecil

  Lyell, Nicholas

  Fraser, Peter (Angus East)

  McCrindle, Robert

  Freeman, Roger

  Macfarlane, Neil

  Gale, Roger

  MacGregor, Rt Hon John

  Galley, Roy

  Maclean, David John

  Gardiner, George (Reigate)

  McLoughlin, Patrick

  Glyn, Dr Alan

  McNair-Wilson, M. (N'bury)

  Goodlad, Alastair

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

  Gow, Ian

  McQuarrie, Albert

  Gower, Sir Raymond

  Madel, David

  Grant, Sir Anthony

  Major, John

  Greenway, Harry

  Malins, Humfrey

  Griffiths, Sir Eldon

  Malone, Gerald

  Griffiths, Peter (Portsm'th N)

  Maples, John

  Grist, Ian

  Marland, Paul

  Ground, Patrick

  Marlow, Antony

  Grylls, Michael

  Marshall, Michael (Arundel)

  Hamilton, Hon A. (Epsom)

  Mates, Michael

  Hamilton, Neil (Tatton)

  Mather, Sir Carol

  Hampson, Dr Keith

  Maude, Hon Francis

  Hanley, Jeremy

  Maxwell-Hyslop, Robin

  Hannam, John

  Merchant, Piers

  Hargreaves, Kenneth

  Meyer, Sir Anthony

  Harris, David

  Mills, Iain (Meriden)

  Haselhurst, Alan

  Mills, Sir Peter (West Devon)

  Havers, Rt Hon Sir Michael

  Moate, Roger

  Hawkins, C. (High Peak)

  Monro, Sir Hector

  Hawkins, Sir Paul (N'folk SW)

  Montgomery, Sir Fergus

  Hawksley, Warren

  Morris, M. (N'hampton S)

  Hayes, J.

  Morrison, Hon P. (Chester)

  Hayhoe, Rt Hon Sir Barney

  Moynihan, Hon C.

  Hayward, Robert

  Mudd, David

  Heathcoat-Amory, David

  Neale, Gerrard

  Henderson, Barry

  Nelson, Anthony

  Hickmet, Richard

  Nicholls, Patrick

  Hicks, Robert

  Onslow, Cranley

  Higgins, Rt Hon Terence L.

  Oppenheim, Phillip

  Hill, James

  Ottaway, Richard

  Hind, Kenneth

  Page, Sir John (Harrow W)

  Hirst, Michael

  Page, Richard (Herts SW)

  Hogg, Hon Douglas (Gr'th'm)

  Parkinson, Rt Hon Cecil

  Holland, Sir Philip (Gedling)

  Patten, J. (Oxf W & Abgdn)

  Holt, Richard

  Pawsey, James

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

  Pollock, Alexander

  Howarth, Gerald (Cannock)

  Porter, Barry

  Howell, Rt Hon D. (G'ldford)

  Portillo, Michael

  Howell, Ralph (Norfolk, N)

  Powell, William (Corby)

  Hubbard-Miles, Peter

  Powley, John

  675

  Price, Sir David

  Sumberg, David

  Proctor, K. Harvey

  Tapsell, Sir Peter

  Raffan, Keith

  Taylor, John (Solihull)

  Raison, Rt Hon Timothy

  Tebbit, Rt Hon Norman

  Rathbone, Tim

  Temple-Morris, Peter

  Rhodes James, Robert

  Terlezki, Stefan

  Ridley, Rt Hon Nicholas

  Thomas, Rt Hon Peter

  Ridsdale, Sir Julian

  Thompson, Donald (Calder V)

  Rippon, Rt Hon Geoffrey

  Thompson, Patrick (N'ich N)

  Roberts, Wyn (Conwy)

  Thornton, Malcolm

  Robinson, Mark (N'port W)

  Thurnham, Peter

  Roe, Mrs Marion

  Townend, John (Bridlington)

  Rossi, Sir Hugh

  Townsend, Cyril D. (B'heath)

  Rost, Peter

  Trippier, David

  Rowe, Andrew

  Twinn, Dr Ian

  Ryder, Richard

  van Straubenzee, Sir W.

  Sackville, Hon Thomas

  Vaughan, Sir Gerard

  Sainsbury, Hon Timothy

  Waddington, Rt Hon David

  Sayeed, Jonathan

  Waldegrave, Hon William

  Shaw, Giles (Pudsey)

  Walker, Bill (T'side N)

  Shaw, Sir Michael (Scarb')

  Waller, Gary

  Shelton, William (Streatham)

  Wardle, C. (Bexhill)

  Shepherd, Richard (Aldridge)

  Watson, John

  Shersby, Michael

  Watts, John

  Silvester, Fred

  Wells, Sir John (Maidstone)

  Skeet, Sir Trevor

  Wheeler, John

  Smith, Sir Dudley (Warwick)

  Whitfield, John

  Smith, Tim (Beaconsfield)

  Whitney, Raymond

  Speed, Keith

  Wiggin, Jerry

  Spencer, Derek

  Wilkinson, John

  Spicer, Jim (Dorset W)

  Wolfson, Mark

  Spicer, Michael (S Worcs)

  Wood, Timothy

  Squire, Robin

  Woodcock, Michael

  Stevens, Lewis (Nuneaton)

  Yeo, Tim

  Stewart, Allan (Eastwood)

  Young, Sir George (Acton)

  Stewart, Andrew (Sherwood)

  Stewart, Ian (Hertf'dshire N)

  Tellers for the Noes:

  Stokes, John

  Mr. Michael Neubert and

  Stradling Thomas, Sir John

  Mr. Tony Durant.

  Amendment proposed: No. 2B, in page 1, line 16, at end insert—
  '(1A) Subsection 1 of this section shall come into effect after the making of an Order by the Secretary of State, and no such Order shall come into effect until after the laying before Parliament by the Secretary of State of a report setting out the dates, and any other details which he may consider relevant, of the legal advice received by him prior to the introduction of this Act with respect to the legal interpretation of "relevant" and "total" expenditure for Rate Support Grant purposes.'.—[Dr. Cunningham.]
  Question put, That the amendment be made:—
  The Committee divided: Ayes 180, Noes 230.

  Division No. 59]

  [9.18 pm

  AYES

  Abse, Leo

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

  Adams, Allen (Paisley N)

  Bruce, Malcolm

  Alton, David

  Buchan, Norman

  Anderson, Donald

  Caborn, Richard

  Archer, Rt Hon Peter

  Callaghan, Jim (Heyw'd & M)

  Ashley, Rt Hon Jack

  Campbell, Ian

  Ashton, Joe

  Canavan, Dennis

  Atkinson, N. (Tottenham)

  Carter-Jones, Lewis

  Bagier, Gordon A. T.

  Cartwright, John

  Banks, Tony (Newham NW)

  Clark, Dr David (S Shields)

  Barron, Kevin

  Clarke, Thomas

  Beckett, Mrs Margaret

  Clay, Robert

  Bell, Stuart

  Clelland, David Gordon

  Benn, Rt Hon Tony

  Clwyd, Mrs Ann

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

  Cocks, Rt Hon M. (Bristol S)

  Bermingham, Gerald

  Cohen, Harry

  Bidwell, Sydney

  Coleman, Donald

  Blair, Anthony

  Conlan, Bernard

  Boyes, Roland

  Cook, Frank (Stockton North)

  Bray, Dr Jeremy

  Corbyn, Jeremy

  Brown, Gordon (D'f'mline E)

  Cox, Thomas (Tooting)

  Brown, Hugh D. (Provan)

  Crowther, Stan

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

  Cunliffe, Lawrence

  676

  Cunningham, Dr John

  Marshall, David (Shettleston)

  Dalyell, Tam

  Martin, Michael

  Davies, Ronald (Caerphilly)

  Mason, Rt Hon Roy

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

  Maxton, John

  Deakins, Eric

  Maynard, Miss Joan

  Dewar, Donald

  Meacher, Michael

  Dixon, Donald

  Meadowcroft, Michael

  Dobson, Frank

  Michie, William

  Dormand, Jack

  Mikardo, Ian

  Douglas, Dick

  Mitchell, Austin (G't Grimsby)

  Dubs, Alfred

  Nellist, David

  Dunwoody, Hon Mrs G.

  Oakes, Rt Hon Gordon

  Eadie, Alex

  O'Brien, William

  Eastham, Ken

  O'Neill, Martin

  Evans, John (St. Helens N)

  Orme, Rt Hon Stanley

  Fatchett, Derek

  Park, George

  Field, Frank (Birkenhead)

  Parry, Robert

  Fields, T. (L'pool Broad Gn)

  Patchett, Terry

  Fisher, Mark

  Pavitt, Laurie

  Flannery, Martin

  Pendry, Tom

  Foot, Rt Hon Michael

  Powell, Raymond (Ogmore)

  Forrester, John

  Prescott, John

  Foster, Derek

  Radice, Giles

  Fraser, J. (Norwood)

  Randall, Stuart

  Freeson, Rt Hon Reginald

  Raynsford, Nick

  Freud, Clement

  Redmond, Martin

  Garrett, W. E.

  Rees, Rt Hon M. (Leeds S)

  George, Bruce

  Richardson, Ms Jo

  Gilbert, Rt Hon Dr John

  Roberts, Allan (Bootle)

  Golding, Mrs Llin

  Robinson, G. (Coventry NW)

  Gould, Bryan

  Rogers, Allan

  Gourlay, Harry

  Rooker, J. W.

  Hamilton, James (M'well N)

  Ross, Ernest (Dundee W)

  Hancock, Michael

  Rowlands, Ted

  Hardy, Peter

  Sheerman, Barry

  Harrison, Rt Hon Walter

  Sheldon, Rt Hon R.

  Hart, Rt Hon Dame Judith

  Shields, Mrs Elizabeth

  Hattersley, Rt Hon Roy

  Shore, Rt Hon Peter

  Heffer, Eric S.

  Short, Ms Clare (Ladywood)

  Hogg, N. (C'nauld & Kilsyth)

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

  Holland, Stuart (Vauxhall)

  Silkin, Rt Hon J.

  Home Robertson, John

  Skinner, Dennis

  Howell, Rt Hon D. (S'heath)

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

  Howells, Geraint

  Snape, Peter

  Hoyle, Douglas

  Soley, Clive

  Hughes, Robert (Aberdeen N)

  Spearing, Nigel

  Hughes, Roy (Newport East)

  Steel, Rt Hon David

  Hughes, Sean (Knowsley S)

  Stewart, Rt Hon D. (W Isles)

  John, Brynmor

  Stott, Roger

  Jones, Barry (Alyn & Deeside)

  Straw, Jack

  Kaufman, Rt Hon Gerald

  Thomas, Dr R. (Carmarthen)

  Lambie, David

  Thompson, J. (Wansbeck)

  Lamond, James

  Thorne, Stan (Preston)

  Leadbitter, Ted

  Torney, Tom

  Leighton, Ronald

  Wainwright, R.

  Lewis, Terence (Worsley)

  Wallace, James

  Litherland, Robert

  Wardell, Gareth (Gower)

  Livsey, Richard

  Weetch, Ken

  Lloyd, Tony (Stretford)

  Welsh, Michael

  Lofthouse, Geoffrey

  White, James

  Loyden, Edward

  Williams, Rt Hon A.

  McCartney, Hugh

  Wilson, Gordon

  McDonald, Dr Oonagh

  Winnick, David

  McKay, Allen (Penistone)

  Woodall, Alec

  McNamara, Kevin

  Young, David (Bolton SE)

  McTaggart, Robert

  McWilliam, John

  Tellers for the Ayes:

  Madden, Max

  Mr. Frank Haynes and

  Marek, Dr John

  Mr. Chris Smith.

  NOES

  Alexander, Richard

  Browne, John

  Ancram, Michael

  Bruinvels, Peter

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

  Buchanan-Smith, Rt Hon A.

  Best, Keith

  Butler, Rt Hon Sir Adam

  Biffen, Rt Hon John

  Chope, Christopher

  Body, Sir Richard

  Cockeram, Eric

  Bottomley, Peter

  Coombs, Simon

  Boyson, Dr Rhodes

  Cope, John

  Brown, M. (Brigg & Cl'thpes)

  Currie, Mrs Edwina

  677

  Dorrell, Stephen

  Lawrence, Ivan

  Douglas-Hamilton, Lord J.

  Lee, John (Pendle)

  Durant, Tony

  Leigh, Edward (Gainsbor'gh)

  Fallon, Michael

  Lester, Jim

  Farr, Sir John

  Lewis, Sir Kenneth (Stamf'd)

  Fenner, Dame Peggy

  Lilley, Peter

  Finsberg, Sir Geoffrey

  Lloyd, Sir Ian (Havant)

  Fletcher, Sir Alexander

  Lloyd, Peter (Fareham)

  Fookes, Miss Janet

  Lord, Michael

  Forman, Nigel

  Lyell, Nicholas

  Forsyth, Michael (Stirling)

  McCrindle, Robert

  Forth, Eric

  Macfarlane, Neil

  Fox, Sir Marcus

  MacGregor, Rt Hon John

  Franks, Cecil

  Maclean, David John

  Fraser, Peter (Angus East)

  McLoughlin, Patrick

  Freeman, Roger

  McNair-Wilson, M. (N'bury)

  Gale, Roger

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

  Galley, Roy

  McQuarrie, Albert

  Gardiner, George (Reigate)

  Madel, David

  Glyn, Dr Alan

  Major, John

  Goodlad, Alastair

  Malins, Humfrey

  Gow, Ian

  Malone, Gerald

  Gower, Sir Raymond

  Maples, John

  Grant, Sir Anthony

  Marland, Paul

  Greenway, Harry

  Marlow, Antony

  Griffiths, Sir Eldon

  Marshall, Michael (Arundel)

  Griffiths, Peter (Portsm'th N)

  Mates, Michael

  Grist, Ian

  Mather, Sir Carol

  Ground, Patrick

  Maude, Hon Francis

  Grylls, Michael

  Maxwell-Hyslop, Robin

  Hamilton, Hon A. (Epsom)

  Merchant, Piers

  Hamilton, Neil (Tatton)

  Meyer, Sir Anthony

  Hampson, Dr Keith

  Mills, Iain (Meriden)

  Hanley, Jeremy

  Mills, Sir Peter (West Devon)

  Hannam, John

  Moate, Roger

  Hargreaves, Kenneth

  Monro, Sir Hector

  Harris, David

  Montgomery, Sir Fergus

  Haselhurst, Alan

  Morris, M. (N'hampton S)

  Havers, Rt Hon Sir Michael

  Morrison, Hon P. (Chester)

  Hawkins, C. (High Peak)

  Moynihan, Hon C.

  Hawkins, Sir Paul (N'folk SW)

  Mudd, David

  Hawksley, Warren

  Neale, Gerrard

  Hayes, J.

  Nelson, Anthony

  Hayhoe, Rt Hon Sir Barney

  Neubert, Michael

  Hayward, Robert

  Nicholls, Patrick

  Heathcoat-Amory, David

  Onslow, Cranley

  Henderson, Barry

  Oppenheim, Rt Hon Mrs S.

  Hickmet, Richard

  Ottaway, Richard

  Hicks, Robert

  Page, Sir John (Harrow W)

  Higgins, Rt Hon Terence L.

  Page, Richard (Herts SW)

  Hill, James

  Parkinson, Rt Hon Cecil

  Hind, Kenneth

  Pawsey, James

  Hogg, Hon Douglas (Gr'th'm)

  Pollock, Alexander

  Holland, Sir Philip (Gedling)

  Porter, Barry

  Holt, Richard

  Portillo, Michael

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

  Powell, William (Corby)

  Howarth, Gerald (Cannock)

  Powley, John

  Howell, Rt Hon D. (G'ldford)

  Price, Sir David

  Howell, Ralph (Norfolk, N)

  Proctor, K. Harvey

  Hubbard-Miles, Peter

  Raffan, Keith

  Hunt, David (Wirral W)

  Raison, Rt Hon Timothy

  Hunt, John (Ravensbourne)

  Rathbone, Tim

  Hunter, Andrew

  Rhodes James, Robert

  Irving, Charles

  Ridley, Rt Hon Nicholas

  Jackson, Robert

  Ridsdale, Sir Julian

  Jessel, Toby

  Rippon, Rt Hon Geoffrey

  Jones, Gwilym (Cardiff N)

  Roberts, Wyn (Conwy)

  Jones, Robert (Herts W)

  Robinson, Mark (N'port W)

  Joseph, Rt Hon Sir Keith

  Roe, Mrs Marion

  Kershaw, Sir Anthony

  Rossi, Sir Hugh

  Key, Robert

  Rost, Peter

  King, Roger (B'ham N'field)

  Rowe, Andrew

  Knight, Greg (Derby N)

  Ryder, Richard

  Knight, Dame Jill (Edgbaston)

  Sackville, Hon Thomas

  Knowles, Michael

  Sainsbury, Hon Timothy

  Knox, David

  Sayeed, Jonathan

  Lamont, Rt Hon Norman

  Shaw, Giles (Pudsey)

  Lang, Ian

  Shaw, Sir Michael (Scarb')

  Latham, Michael

  Shelton, William (Streatham)

  Lawler, Geoffrey

  Shepherd, Richard (Aldridge)

  678

  Shersby, Michael

  Townend, John (Bridlington)

  Silvester, Fred

  Townsend, Cyril D. (B'heath)

  Skeet, Sir Trevor

  Trippier, David

  Smith, Sir Dudley (Warwick)

  Twinn, Dr Ian

  Smith, Tim (Beaconsfield)

  van Straubenzee, Sir W.

  Speed, Keith

  Vaughan, Sir Gerard

  Spencer, Derek

  Waddington, Rt Hon David

  Spicer, Jim (Dorset W)

  Waldegrave, Hon William

  Spicer, Michael (S Worcs)

  Walker, Bill (T'side N)

  Squire, Robin

  Waller, Gary

  Stanley, Rt Hon John

  Wardle, C. (Bexhill)

  Stevens, Lewis (Nuneaton)

  Watson, John

  Stewart, Allan (Eastwood)

  Watts, John

  Stewart, Andrew (Sherwood)

  Wells, Sir John (Maidstone)

  Stewart, Ian (Hertf'dshire N)

  Wheeler, John

  Stokes, John

  Whitfield, John

  Stradling Thomas, Sir John

  Whitney, Raymond

  Sumberg, David

  Wiggin, Jerry

  Tapsell, Sir Peter

  Wilkinson, John

  Taylor, John (Solihull)

  Wolfson, Mark

  Tebbit, Rt Hon Norman

  Wood, Timothy

  Temple-Morris, Peter

  Woodcock, Michael

  Terlezki, Stefan

  Yeo, Tim

  Thomas, Rt Hon Peter

  Young, Sir George (Acton)

  Thompson, Donald (Calder V)

  Thompson, Patrick (N'ich N)

  Tellers for the Noes:

  Thornton, Malcolm

  Mr. Mark Lennox-Boyd and

  Thurnham, Peter

  Mr. David Lightbown.

  Question accordingly negatived.
  9.30 pm
  Mr. John Fraser: I beg to move amendment No. 5, in page 2, line 3, leave out subsections (3), (4) and (5).
  This is not a mere probing amendment. If we are not satisfied with the Government's explanation for the presence of the subsections, we reserve the right to call a Division on it.
  These are complex matters. Clause 1 is largely to do with the accountancy aspect of block grant and rate support grant. It may be helpful if I say something about what I understand to be the background to this matter. Since 1980, especially since the passage of the Rates Act 1984, the Government have had the notion that the more a council spends above a defined limit on the care, protection and welfare of its citizens, the more it should be penalised in the withdrawal of central Government assistance.
  This has happened in my borough. I am sorry that I cannot give other examples, but there was not time to gather the facts on them. The time available has been extremely limited. On the principle of the more one needs, the less one gets, between 1979 and 1985, Lambeth lost grant totalling £113 million. In my borough—this is repeated in other places, such as Liverpool—in some years the penalty suffered has exceeded the inner city partnership allocation received by it. Despite the fact that the borough has been racked by unemployment, riot, homelessness and poverty, we are penalised for facing our responsibilities. The same is true of many other hard-pressed inner-city boroughs.
  The measure of a council's profligacy in dealing with the problems which it faces—according to the Government, at any rate—is the rate revenue account. The Secretary of State is saying that some councils have invented an artificial income to disguise the true level of their expenditure. The clause will give the Secretary of State the power to regulate the contents of the income and the expenditure sides of the rate revenue account.

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  This is an odd development. If a person on supplementary benefit came into our advice bureaux and exaggerated his income and minimised his expenditure as a supplementary benefit claimant, we would think that he was taking leave of his senses. But such is the Alice-in-Wonderland world of local government finance that ostensible parsimony is rewarded. We are told that local authorities have been disguising their budgets by adding income to show that they are spending less money than they are. The Secretary of State should reward not notional parsimony but real parsimony by taking out what he regards as artificial items of income.
  Subsections (3), (4) and (5), which we propose to leave out of the Bill, have not yet been amended by Government amendments. The Government amendments talk about "defined revenue expenditure" and "defined revenue income". It would be helpful during the debate on this amendment or on the next group of amendments if the Government told us what they mean by those terms.
  Clause 2 gives the Secretary of State the power to specify what is and is not income and expenditure. In other words, he can alter the rules. Indeed, clause 2(4) states that he can define income and expenditure for "any" year. I presume that clause 2(4) means that he can act retrospectively or prospectively in specifying income and expenditure.
  The wording of the Government amendments is curious. They do not use the phrase "specified expenditure" or "specified income", but "defined revenue income" or "defined revenue expenditure". It would be helpful to know why the word "defined" has been chosen. Do we need to consider some other statute or another part of the Bill to discover why the words "defined revenue expenditure" have been used?
  Mr. Alfred Morris: The Secretary of State does not know, but clearly they mean what he says they mean.
  Mr. Fraser: My hon. Friend says that they mean what the Secretary of State says they mean. Clause 2(4) makes it clear that income and expenditure are exactly what the Secretary of State chooses to specify. In choosing to specify their meaning in that way, the Secretary of State is not subject to any sort of parliamentary challenge, and is not obliged to submit any kind of order or regulation to the House, and the matter is therefore removed entirely from the control of this House.
  I should like to ask the Government several questions about the accountancy provisions because, although they refer to "defined revenue expenditure" and "defined revenue income", they leave the Minister to decide exactly what is income and what is expenditure. The Government already have the power to prescribe forms for accounting and block grant purposes in the Local Government, Planning and Land Act 1980.
  Will the Minister tell the House why the Secretary of State is creating new powers to define or specify what is income and expenditure when, for other accounting purposes, those powers already exist in the Local Government, Planning and Land Act?
  Secondly, if the Minister is saying that those provisions apply only to the calculation of block grants, can he demonstrate that safeguards exist in the Bill to limit the
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  power of specifying—contained in clause 2(4)—for block grant purposes only, rather than for widely interfering or defining local government accounting?
  Thirdly, what assurances can the Minister give concerning the Government's intention to use their powers? Will they be used solely for prescription for block grant purposes, and if they are to be used only for prescribing accountancy provisions for block grant purposes, will the Government accept an amendment providing that the powers are to be limited only to those purposes?
  Fourthly, what assurance can the Minister give that the accounting provisions will not be used to pursue a policy of penalising the poor, because clause 2(4) makes it clear that they can be used retrospectively in that way? Clause 1 applies to accountancy provisions for any year, but the definition of expenditure and income given in clause 2(4) can apply to any year.
  The provisions of clause 1 are obnoxious because they vest enormous discretion in the Minister without requiring parliamentary approval. That would not be tolerated in any other area of law. It certainly would not be tolerated in company law. If one wants to know what one has to put in one's income and expenditure accounts for the purposes of company law, one can turn to schedule 4 of the Companies Act 1985, where page after page states what should be contained in a balance sheet and what should be put in the income and expenditure or profit and loss accounts. Those matters are clearly defined and are not open, as far as I can see, to amendment by Ministers. They are well-established practices for commercial purposes and that is quite right because, if a Minister had the power to alter the definition of income and expenditure in Companies Acts, that could have a catastrophic effect on the company's tax position, on the profits on which it must pay tax, and on the view taken of the company by shareholders or creditors.
  In exactly the same way, the alteration of the definition of income and expenditure under the Bill could well have a catastrophic effect on local authority finances, if the result of those definitions robbed local authorities of the block grant and support that they deserve for their citizens. That would not be tolerated under company law, and it would certainly not be tolerated under tax law because such provisions could be used for punitive purposes.
  Let us imagine what would happen if the Treasury took the power to specify proper practices, accounting definitions or definitions of payment in deeds of covenant. Under a deed of convenant, one person promises to pay another person a certain amount of money and, if the recipient does not have any other form of taxable income, the Government subsidises him or her to the tune of 29p in every pound. That is a common arrangement between grandparents and children and especially between parents and adult children in order to provide for them during further education.
  Let us imagine that the Treasury had the sort of power that the Department of the Environment is seeking in the Bill. It might say, "Although the deed of covenant has been concluded, the Government have decided that the cost of meeting the deed of covenant is so high that we are proposing that the Government will reimburse only those deeds of covenant that are made for the benefit of children attending public schools rather than for children attending

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  state schools." If anybody were to suggest such a thing, we would all recoil in horror and we would not be willing to accept it.
  Mr. Dobson: Not this week.
  Mr. Fraser: That is no different in principle from what the Government are proposing in the Bill.
  The proposals, which, on the face of it, are mainly to do with accountancy, leave far too much discretion to Ministers and allow them to decide the way in which local authorities' accounts turn out and the sort of support they get from the Government. I understand that the Secretary of State was once a Treasury Minister. I suppose that being able to deem things as expenditure, income or otherwise may be a habit that he picked up from the Treasury by dealing with, for example, inheritance tax or capital transfer tax.
  There is a story about a senior Treasury draftsman who bought his child a train set for Christmas. When the train set was set up, he found that he had failed to buy a transformer. His child was disappointed at not seeing the trains running. He said, "Don't worry, we do it all the time in the Treasury. These trains are deemed to pass in this direction and the others are deemed to pass in that direction. You should have an enjoyable time."
  We object to the Secretary of State's proposition that he should be able to deem various items of expenditure. We do that for serious reasons. It is to do not with dry accountancy but with the needs and requirements of the poor, dispossessed, unemployed and homeless of the boroughs that many of us represent. That is the reason why we oppose the Bill and have tabled our amendments.
  Mr. Clive Soley: I should like to follow up the comments made by my hon. Friend the Member for Norwood (Mr. Fraser). The provisions will affect my council, as I suspect they will affect councils up and down the country. What does the Minister intend to do with the discretion he is given in this clause about the local authorities which, as a result of the recent chaotic weather conditions, will have greatly increased expenditure? Will the Minister compensate the local authorities for the vast amounts of money they have had to pay out as a result of the flooding of houses, burst pipes and emergency services provided day and night?
  The Minister tells us in other circumstances that the Government are providing a service that local people want. The truth is that they are not. They have put on to local authorities an increasingly chaotic and manic way of calculating rate support grant. The clause perpetuates that method and, as I understand it, and as my hon. Friend the Member for Norwood has suggested, it gives a degree of discretion to the Minister who must now decide whether he will allow certain extra revenue expenditure.
  Let us look at what has happened to some local authorities. I went round my own area yesterday. In one case, 300 houses are available which, largely because of cuts in the housing revenue, have not had satisfactory lagging and have therefore suffered burst pipes with water coming through. There are blocks of flats facing similar problems. The chairman of the housing committee, Councillor Jeff Kenner, has opened certain emergency accommodation. A school was opened and various other emergency measures have been taken. Standpipes were erected when pipes burst and people were taken into emergency accommodation.
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  At the same time, largely because of the crisis facing homeless people generally, the local authority opened up certain areas to accommodate single homeless people in the London borough of Hammersmith and Fulham. I know that such action has been taken by other local authorities. That will not be cost-free. The Government want such action to be taken and they gave an undertaking in the House to examine the possibility of opening up the tube stations in London to homeless people. If the Government take the position that seriously, presumably they expect local authorities to take precisely the kind of action taken by my local authority and others.
  9.45 pm
  Will the Minister give me a commitment that expenditure of this type, whether incurred by the borough of Hammersmith and Fulham or by any other local authority, will not be taken into account in any other cuts that the Government may impose on authorities? In other words, will he give a commitment that the Government will make an exception of the special payments being invoked by local authorities at present to pay for the emergency services?
  Will the Minister come forward with real money to enable local authorities to absorb the shock that has been imposed upon them by the severe weather and the homeless crisis facing London?
  The Minister for Local Government (Dr. Rhodes Boyson): The comments by the hon. Member for Hammersmith (Mr. Soley) have nothing to do with the clause under consideration. If the hon. Gentleman wants to write to me, he can do so. However, if I were to answer his points, other hon. Members would raise similar questions about their local swimming pools, roofs and the rest. This is not on.
  Mr. Soley rose——
  Dr. Boyson: The hon. Gentleman's comments had nothing to do with the amendment. He has had a good try, he will have earned a mention in the local press and he has done his job. Obviously, he has earned five more votes for the next general election.
  Mr. Soley: The Minister has made a stupid outburst. I have heard the Minister say some stupid things before, but the outburst that he has just made takes some beating.
  Local authorities from one end of the country to another are suffering from the problems I have described. I have seen the problems that I have described in my area. However, my area is not unique, unless the Minister believes that the sun does not shine in Hammersmith and Fulham but it does in the rest of the country.
  Dr. Boyson: If the hon. Gentleman wishes to write to me on that point, which has nothing to do with my reply to the clause, he can do so. I am aware of the problems with regard to the weather that exists the length and breadth of the country, in the hon. Gentleman's constituency and in practically every other constituency.
  Amendment No. 5 removes three parts of the clause. As the hon. Member for Norwood (Mr. Fraser) said, the provision relates back to the Local Government, Planning and Land Act 1980. The definitions were brought in in the 1981–82 settlement. The definitions of total and relevant expenditure that were accepted were those suggested by the local authority associations as against the recommendations of the Department. The Ministers accepted

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  the recommendations of the local authority associations and they were included. They stood the test of time until the situation arose in which there were certain court cases and different definitions that put at risk not all of the 1980 Act but simply the definitions of relevant and total expenditure.
  The hon. Gentleman asked what was defined income. In essence, defined income is all revenue income except items credited to such other accounts as the housing revenue account and defined expenditure is all revenue expenditure except items debited to accounts such as the housing revenue account dealing with housing expenditure. Similarly, we could define total and relevant expenditure——
  Mr. John Fraser: If there is a dispute about what is defined expenditure and income, who decides that dispute, the courts or the Minister?
  Mr. Dobson: It is not in his brief.
  Dr. Boyson: If it is not in my brief, I shall reply just the same. I have explained what the Government hold to be the definition of defined expenditure, but if people do not agree with it, it will be challenged. Such words have to be built into the Bill carefully as people have gone over previous legislation with magnifying glasses, and they will do so again.
  Clause 1 does not enable the Secretary of State to control what local authorities spend. There is simply a requirement to keep an account. We have defined how the accounts should be kept working within the definitions that I have mentioned.
  The hon. Member for Norwood said that this is a probing amendment. If it were accepted, it would be a wrecking amendment and the definitions would be destroyed. We are trying to make the definitions as watertight as possible. The amendment would delete that part of clause 1 which shows the nature of the rate fund revenue account. If amended, clause 1 would no longer serve its purpose of setting up the rate fund revenue account, which is the foundation of the definitions of relevant and total expenditure. The amendment would destroy the very basis of what we are doing, which is to incorporate in statute a method of calculating relevant and total capital expenditure which would allow us to maintain the status quo.
  The hon. Member mentioned Lambeth. It spends 33 per cent. above grant-related expenditure. Its rate is 46 per cent. more than its class average. Rent arrears are 39 per cent. of what could be collected in one year, and the Lambeth laundry costs ratepayers £8 a wash as compared with the payment received of £1·50. The hon. Gentleman said that the Bill was Alice in Wonderland. I suggest that such economics is Alice in Wonderland.
  Mr. Fraser: Now will the Minister reply to the debate?
  I asked him who settles the issue if there is a difference of opinion about what is to be defined expenditure for the purpose of income expenditure. We have the word "defined" without any definition.
  The Minister asked me why expenditure in Lambeth is rather higher than in some adjoining and more affluent boroughs. The answer has been provided by an independent urban research centre called CES Ltd. It has
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  described what has happened to the inhabitants of Lambeth during the past few years. I can tell the Minister what has gone wrong—we have had a Tory Government.
  The average standard of living of 96,000 households in Lambeth, as measured by their gross income before tax, decreased by 5 per cent., allowing for inflation, between 1979 and 1984. During the same period, average income in the country as a whole rose by 4 per cent. There is a 9 per cent. difference between average incomes in Lambeth and the rest of the country.
  Unemployment in Lambeth increased from about 5 per cent. in 1979 to 20 per cent. in 1985. There is 25 per cent. male unemployment in the borough. That also has happened since 1979. Lower income households have experienced a decline of 10 per cent. in their income before tax since 1979 and some other groups have experienced a 7 per cent. increase in income. In the category of households of working age that support families, 45 per cent. are represented in the poorest 25 per cent. of the national average. They have experienced a great drop in their incomes. The Minister asked why Lambeth is different. It is because it has been continually impoverished and penalised since we have had a Tory Government. Perhaps the Minister will reply to the real point that I raised in the debate.
  Dr. Boyson: The answer is perfectly straightforward—ultimately it rests with the courts. We have defined what we believe to be the answer in the Bill. The Bill, once it becomes an Act, is dependent for its ultimate analysis on court definitions.
  Mr. Fraser: Does that mean that the Government will not use clause 2(4) to specify what is income and expenditure? Will it be left to the courts, and will the Minister drop clause 2(4)?
  Dr. Boyson: It is certainly obvious to the dispassionate observer that any Government who are putting a Bill together do so on the basis of the intentions that they wish to achieve. The Bill has come together as a whole and includes the two clauses referred to by the hon. Gentleman. They are part and parcel of the Bill and obviously intended in the way the Bill was drafted by the Government and we hope that the Bill becomes an Act.
  Mr. Hancock: We have to ask ourselves whether, before too long, we shall have one local authority after another queueing up to take the Government to court to test the definitions in the Bill. No one would suggest that that was right, and that cannot be the Minister's ambition in his wish to see the Bill pushed through.
  I take the Minister back two years when Portsmouth city council was rate-capped. It was the only Conservative local authority to be rate-capped in that year and it was absolutely bewildered. I remember the heartache and crocodile tears of Portsmouth's Conservative politicians. It could not possibly be that the council had spent too much on creating jobs because it had not. It could not be that it had spent too much on creating better housing because it had not. It could not be that it had provided better services for the elderly because it had not. What the council had done, and it was repeated time and time again, was that it had followed, virtually to the letter, the Government's instructions about the way in which local government financing should be accounted for.
  It was a bewildering situation wherein the local authority was caught in a net cast out by the Government.

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  Despite repeated attempts by hon. Members representing Portsmouth, the leader of the council, and the Conservative Association of Portsmouth to find out why the council had been rate-capped, a satisfactory explanation has never been received.
  The suggestion is that Portsmouth was only caught in that net because the Government had missed Sheffield the first time round. The only way in which they would get Sheffield in the rate-cap net was to extend that net slightly further and in doing so they embraced Portsmouth. Thus the Government killed two birds with one stone and claimed that rate capping was an impartial, unbiased selection of local authorities—Labour-controlled Sheffield and Conservative-controlled Portsmouth. It was to be seen as the Government's bipartisan approach to local government finance.
  Why do we need further controls? The clauses use the words "proper practices". I would be interested if the Minister could explain what proper practice means. What is intended by those words? How will that phrase be defined in Government terms?
  Under existing law auditors are already required to make sure that local councils conduct their accounting in a proper way. Is the Minister saying that that law is inefficient? If so, surely the Government should get their own house in order. Very few hon. Members would disagree that Government accounting leaves a lot to be desired. Creative accountability is not solely in the domain of local government.
  Surely over the past two years we have recognised that the Government are extremely clever in their creative accounting when it comes to trying to hide or shift responsibility. They have tried privatisation and contracting out various types of work, and shifting capital to revenue is a classic example. If they were subjected to the same scrutiny as that which is suggested for local government, the Committee would be surprised at some of the results. I hope that at some other time the Minister will try to use what influence he has to suggest that a similar exercise could be carried out.
  What is wrong with the current system and the accountability and the way in which local government finance is put together and checked? If the Minister thinks that auditors are not doing a proper job now, how will he define——
  It being Ten o'clock, The CHAIRMAN left the Chair to report progress and ask leave to sit again.
  Committee report Progress.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Local Government Finance Bill may be proceeded with, though opposed, until any hour.—[Mr. Ryder.]

  Local Government Finance Bill
  Again considered in Committee.
  Question again proposed, That the amendment be made.
  Sir Kenneth Lewis: On a point of order. I have been watching the progress of the Bill with some interest. The Order Paper carries about 130 amendments. In a normal parliamentary day we deal with 10 such amendments. I have worked out that if we go on at this rate it will take us about 20 normal parliamentary days to deal with this Bill. Will you, Miss Boothroyd, ask
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  the Leader of the House, either tonight or tomorrow, to bring in a timetable motion on this Bill and announce it tomorrow so that we may start it on Wednesday when we are supposed to discuss this Bill again?
  I want to avoid on Wednesday a repetition of tonight's obvious filibuster so that the Committee can make progress. I remind the Committee and you, Miss Boothroyd, that a Select Committee has already said there should be timetabling of all Bills. I may not go as far as that, but the time has come to limit the kind of nonsense we are seeing today on a Bill that is basically non-controversial.
  Mr. Allan Roberts: Further to that point of order. It was made clear at the beginning of the debate by my hon. Friend the Member for Copeland (Dr. Cunningham) that the Opposition have no intention of filibustering or of attempting to talk out tomorrow's business. Tomorrow is an Opposition Supply day.
  The hon. Member for Stamford and Spalding (Sir. K. Lewis) has hardly been in his place during the debate. If he had been, he would know that the issues have been debated quite succinctly without any closure motion having to be moved, and that the progress we are making is the kind of progress that one would normally make in Committee. The hon. Gentleman has merely drawn attention to the fact that the Government who accuse the Opposition of not scrutinishing legislation and who do not notice illegalities in their legislation have not provided enough time to debate this serious and complicated Bill.
  The Temporary Chairman (Miss Betty Boothroyd): I shall respond to the point of order raised by the hon. Member for Stamford and Spalding (Sir. K. Lewis). He will understand that I am not as expert as he is in mathematics. Therefore, I have not calculated how long it may take to get through these amendments. My job is to deal not with the timetabling of the Bill but with the proceedings. I am sure that the hon. Gentleman's points have been noted in the correct place.
  Mr. Hancock: I am sure that the Minister is grateful for the point of order raised by his colleague the hon. Member for Stamford and Spalding (Sir. K. Lewis). Contributions from the Government Benches in support of the Minister's stance have been sadly lacking. A contribution, even in the form of a point of order by a Conservative Member, is to be welcomed by the Minister. The hon. Gentleman can now leave the Chamber with some grace, knowing that the Conservative party has done its bit by the Minister this evening in raising the point of order.
  If the Minister does not think that the auditors are doing a proper job now, how will he define proper practice with regard to the future auditing of local government expenditure? The introduction to the report of the Chartered Institute of Public Finance and Accountancy refers to the background papers of the Local Government Finance Act 1982. It states:
  "The Secretary of State is empowered to make regulations which 'make provision with respect to the keeping, form, preparation and certification of accounts and statements of accounts, and the publication of information relating to accounts and to the publication of statements of account'."
  What more could possibly be needed that is not covered already? What wider definition of the role of local government and its responsibility and accountability with regard to relating its finances to the wider populace, its electorate, the Government or whatever is needed than

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  those words that are already in an Act and to which local government must respond? Does the Minister suggest that those powers are not draconian enough for his benefit, or is there something else about which we still do not know that the Government want to do?
  That matter draws me back to what was said by an hon. Member earlier about the role of the local authority member. Is this a back-door way of finally eroding what is left of public accountability in the role of the local councillor? In the end, will this role be slashed away by various pieces of legislation—this being yet another example of it—in that we shall have appointed commissioners rather than councillors to run local authorities? If we adopt what is contained in the Bill, particularly in these clauses, we shall go down a dangerous path. We now ask the impossible of local authorities. I do not know what the Minister is trying to achieve, but, from my past and present experience in local government, I know the difficult task that we now have in trying to put across to our electorates the reasons for matters such as rate capping.
  It was impossible for the city council in Portsmouth to get an answer about why it was rate capped and what it did wrong. If it was impossible for that council to get an answer, how on earth will it be possible in future for local councillors to know what the Government are thinking in terms of the financial constraints that the Bill will place on them? How on earth do we expect the people who foot the bill, either as taxpayers or ratepayers, to understand what is happening in local government and in finance?
  This is a difficult matter. It is being clouded even more by a complete waste of time and energy directed towards achieving little. At the end of the day, we do not know—the Minister has not told us and the Secretary of State did not tell us when he introduced the Second Reading debate—what the Government hope to achieve. We were told that the thrust of the Bill is to rectify past mistakes. The Bill now appears to be more concerned with turning the screw for the future as opposed to redressing what happened in the past. That is something about which we should all be wary.
  I am sorry that the hon. Member for Stamford and Spalding intervened to defend the Government on the Bill and to criticise the length of time that it might take. It is important that, at the end of the day, we all remember that local government is important. It means a lot to people. Local councillors have an even more almighty task because of the distressing matters that have occurred over the past seven years. Their job is being made increasingly more difficult by the sort of interference that this and other Bills have forced upon them. I hope that the House will reject the Government's local government finance policies. The way to do that would be wholeheartedly to support the amendments.
  Dr. John Marek: I support these excellent amendments. The Bill would be much better if they were passed. A consistent thread has run through this Government's policies for the last six or seven years. It is to make the poor poorer and the rich richer. Unemployment has increased from 1 million to 4 million; houses have not been built, resulting in the worst housing programme since the 1920s; there have been social security
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  cuts; the National Health Service is unable to provide the services that everyone who works in it would like it to provide.
  Local authorities are not completely run by Conservative party members. Therein the Government saw opposition. Therefore, they have introduced various local government Acts. I do not know how many local government Bills they have introduced, but there has been at least one every year and in some years there have been two. They have been introduced because the Government do not like what some local authorities do. With their large majority, therefore, the Government have introduced Bills to try to stop what they do.
  This Bill is the latest example of what the Government are trying to do. They are trying to bring local authorities to heel in such a way that their accounts will be transparent to the Government, who will then be able to say how the accounts should be organised and which sums ought to be put into the various local authority accounts.
  The Government are not introducing this Bill because they have at heart the general welfare of the people. They have introduced the Bill because they want to cut the income tax of those who are already employed. They have already cut income tax from 83p to 60p in the pound. Recently there has been talk of the Government cutting income tax even further. They have also cut unearned income tax. The philosophy is that more should be given to those who are already rich and well-heeled but that those who are not rich and well-heeled should suffer.
  This Government and their supporters are well-heeled. They do not understand what many electors, including those who live in Lambeth, have to undergo. The Minister referred to Lambeth about 20 minutes ago and said that Lambeth's expenditure is 33 per cent. above the grant-related expenditure assessment. My hon. Friend the Member for Norwood (Mr. Fraser) dealt with that point. He told the Minister that the electors of Lambeth have particular problems that the local authority is trying to overcome.
  If the Bill is not amended, it will increase the problems that electors have to face. Administration will be increased; yet again local authorities will have to put their accounts in a different form. Clause 1(1) deals with rate fund revenue accounts. They will have to be kept in a particular way. The Minister will be able to say what should be and what should not be included in them. Clause 2(4) says:
  "The Secretary of State may specify in respect of any year kinds of expenditure or income which are to be regarded as of a revenue nature for the purpose of debiting or crediting items of account to a rate fund revenue account."
  The Government are taking almost complete powers over the presentation of these types of accounts. The only accounts that will not be included in the general rate fund revenue accounts are those that are listed in schedule 1. If the Bill is passed, local authorities will be unable to do other than bow to Ministers' wishes. The Minister likes to blame councils for many of the country's ills, when that is not true. Nobody is perfect, and I would not support every action by every local authority in the land. I disagree with many actions of parsimonious and mean-minded Tory local councils. However, if they are elected as Tory councils I respect their right to do as their electors wish. It is up to the electors to change the complexion of that council when the time comes to vote.
  Mr. Meadowcroft: Will the hon. Member explain why it is that his hon. Friend the Member for Oldham, West (Mr. Meacher) talks about a future Labour Government insisting on local authorities spending according to priorities determined nationally by a Labour Government? What is the difference?
  10.15 pm
  Dr. Marek: I did not hear what my hon. Friend the Member for Oldham, West (Mr. Meacher) said, but no doubt he was talking about minimum standards. Old-age pensioners——
  The Temporary Chairman (Mr. Patrick Cormack): The hon. Gentleman is straying off the point.
  Dr. Marek: I was slightly led astray by a mischievous intervention.
  There is a difference between minimum standards designed to ensure that people do receive services and what I have been talking about.
  The Government make many mistakes. I wonder how many millions of pounds they wasted on Nimrod. Hon. Members might think about Nimrod and AWACS and the many hundreds of millions of pounds that have been spent on that.
  What annoys me most is the way in which the Minister introduced this amendment. He said that this Bill is a result—this is the impression that he wanted to make—of the Government being weak in accepting the local authorities' suggested changes some years ago. The Minister said that it was not the Government who defined relevant expenditure and that the definition was suggested by local authorities. Whatever the Government do, it is never their fault. Where does the buck stop? Does it stop at the local authorities? The Government cannot blame it on the local authorities. The Government could blame it on their advisers sitting in the Box over there. Why do the Government not do that? I understand that there are protocols to stop the Government from doing that, but the Government could have done that, because they are the executive in the country and are responsible for legislation. It is because the Government are responsible for legislation that we have the Bill before us. The Government made a mess of it. Time and time again the Government will not admit that they have made a mistake, it does not matter what is under discussion. I can give examples from different spheres—the cause of the Falklands conflict—but I will not dwell on that because I would be ruled out of order by you, Mr. Cormack. The Government do not say that they are to blame for any of these matters.
  We have a nasty lie being told by the Government to the effect that this was nothing to do with them, it was the local authorities saying that relevant expenditure had to be defined in this way, and because of that the Government have had all this trouble. It has been going on for three, four, five years and the Government have not found that the original definition was legally imperfect. This is an important point.
  We are debating an amendment that seeks to improve the Bill in an important way by deleting clauses 3, 4 and 5. But lo and behold, the next group of amendments are Government amendments Nos. 6, 8 and 12. The Government are already seeking to amend a Bill which was published only a few weeks ago. Is that likely to
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  inspire confidence among the public? The Government can calmly go on for three or four years before saying that what has happened has been illegal but that it is not their fault but that of those nasty local authorities.
  The definition of proper practices has been mentioned. It does not look as though proper practices will appear in the Bill. That is the subject of the next group of amendments. I certainly have no confidence in the Government, given the way in which they are thrusting forth to the left and the right, trying to find some way of keeping local authorities to heel so that they can contain their expenditure so that the Government can continue to give money to the rich, which is what they have been doing for the past seven years. [Interruption.] If the hon. Member for Norwich, South (Mr. Powley) does not agree, he should intervene and I shall be glad to give way.
  The amendment will improve the Bill. I hope that we shall be able to discuss Government amendment No. 76 and those grouped with it. I would, in common with my hon. Friends, like to understand what proper practices are. If those words are not now to appear in the Bill, will there be another amendment and shall we have a different definition? I would be interested to hear why the Government now think that their new definition will be watertight and transparent, and why it will not continually be challenged in the courts. I suspect that that will not happen and that the Government have got things all wrong and that is why I support the amendment.
  Amendment negatived.
  Dr. Boyson: I beg to move amendment No. 6, in page 2, line 3, leave out from 'The' to 'and' in line 6 and insert:
  'items of account debited to the rate fund revenue account of an authority shall include all items of defined revenue expenditure, and the items of account credited to the rate fund revenue account of an authority shall include all items of defined revenue income;'.
  The Temporary Chairman: With this it will be convenient to discuss the following: Government amendments Nos. 8 and 12.
  Amendment No. 29, in page 2, line 36, at end add—
  '() The following items of account shall be debited or credited to a rate fund revenue account, namely, items which are not items of expenditure or income but which in accordance with the proper practices to be observed in compiling accounts are to be debited or credited to the rate fund revenue account.'.
  Amendment No. 188, in clause 13, page 9, line 40, at end add—
  '(f) "expenditure" includes all expenditure which is payable by a local authority to another person, but does not include any financial transfer between funds kept by a local authority.
  (g)"income" includes all income which is payable to a local authority by another person, but does not include any financial transfer between funds kept by a local authority.'.
  Dr. Boyson: These amendments are designed to make it clear that, in addition to revenue expenditure and income, other items of account can be included in the rate fund revenue account when this conforms to proper practice.
  The starting point is that the rate fund revenue account is identified as the account to which all revenue expenditure and income must be debited or credited, except revenue expenditure or income which is properly debited or credited to certain other accounts. The revenue expenditure and income to be excluded is not simply that which is properly debited or credited to any other account

  691
  than the rate fund revenue account, since expenditure and income included in memorandum accounts—such as the account for section 137 expenditure—should also be included in the rate fund revenue account. Hence the main accounts, the expenditure and income of which are to be excluded from the rate fund revenue account, are specified in schedule 1. The power for my right hon. Friend to make specification under clause 1(6)(b) will enable us to cope with any other such accounts, including any such accounts established by local Acts.
  In addition to revenue expenditure and income, other items of account can be included in the rate fund revenue account, such as contributions to special funds or special capital expenditure, where this conforms to proper accountancy practices.
  Clause 2 provides that those practices are any practices drawn from the practices applicable to the traditional non-statutory rate fund revenue accounts in 1986–87, but taking into account variations in practice occurring from time to time. The new rate fund revenue accounts are those knitted into the traditional rate fund revenue accounts which authorities have generally kept in the past.
  Amendments Nos. 6, 8 and 12 will make that clear and I commend them to the Committee. Amendments Nos. 29 and 188 would seem to be directed towards the same end, but they are defective in their purpose. Amendment Nos 29 introduces the concept of proper practices without initially anchoring the concept of the practices applicable to traditional rate fund revenue accounts in 1986–87.
  Amendment No. 188 would require all the authorities to complete their accounts exclusively on the accruals basis, which I understand is not the case at the moment. I agree that this would be desirable, but it is not the intention in the Bill to regulate the way in which local authorities keep their accounts; hon. Members spoke about this in a previous debate. It is not the wish of the Government to tie down the way in which local authorities keep their accounts more than is necessary to keep it within the definitions that we need on both net and total expenditure, and other definitions that have been mentioned tonight.
  Accordingly, I recommend the Committee to reject amendments Nos. 29 and 188 and to accept amendments Nos. 6, 8 and 12.
  Mr. John Fraser: If I were suffering from insomnia and I had to choose between Horlicks and the Minister's speech, I would choose the Minister's speech. It dealt with some of the ground over which we went in the previous debate. I shall not take those matters further. However, I wish to draw attention to our amendment No. 29, which says that, if an item is not traditionally an item of income or expenditure, but, according to the proper practices that are observed in the accountancy profession, is, as a matter of proper practice, debited or credited to the rate revenue account, it should continue so to be debited or credited.
  There is a conflict in the Bill between that which is a proper practice and that which is defined as an income or expenditure. The Minister mentioned a number of local funds, set up perhaps by local legislation or otherwise. There may be certain capital accruals to the income of the local authority. It is certainly the case that the City of London has a number of private funds—in fact, so many that clause 1 has special provisions for it. There may
  692
  be smaller endowment type funds available to local authorities or other forms of money traditionally paid into the rate revenue account. Amendment No. 29 says that, if that is defined as a proper practice, it should continue to be observed, as local authorities should not be penalised thereby.
  Mr. Meadowcroft: I shall raise with the Minister a point raised in the previous debate by my hon. Friend the Member for Portsmouth, South (Mr. Hancock) which is relevant to this debate as well.
  The Government are not content to rely on the provisions of the Local Government Finance Act 1982. Under section 23 of that Act, the Secretary of State is empowered to make provision with respect to
  "the keeping…form, preparation and certification of accounts".
  If the Minister is prepared to accept the good will of the local authority associations and the chartered institute, which, in agreement with the Government, are working on a code of practice for local authority accounting that will have to pass the test of section 22, why is he introducing separate wording? Presumably the Government are trying to catch those who they do not like who are trying to shift around money in an attempt to defeat the Government's purpose of controlling local government expenditure.
  The Second Reading debate has finished, and we are now debating the Bill line by line. The various provisions of the code of practice under consideration seem to me as a lay person with 15 years' experience of local government to cover all the points that the Minister is trying to put through in the Bill. The Committee deserve a response showing why it is thought that the section 23 provision is not satisfactory when local authorities are working to put together an enforceable code of practice.
  Dr. Boyson: I shall reply briefly to the hon. Member for Leeds, West (Mr. Meadowcroft). This Bill is before the House because the definitions which we presumed were the definitions intended under the Local Government, Planning and Land Act 1980 had been found to be defective. That is why we have to be so careful of the wording here. I have already said that there is no intention to define more than necessary how local authorities keep their accounts. Indeed, I shall resist later certain amendments which would constrain local authorities further in the way in which they keep their accounts.
  Amendment agreed to.
  10.30 pm
  Mr. Allan Roberts: I beg to move amendment No. 7, in page, 2 line 6, leave out from 'authority' to end of line 7.
  The Temporary Chairman: With this it will be convenient to discuss the following amendments:
  No. 9, in page 2, line 12, leave out
  'an account mentioned in subsection (6) below'
  and insert
  'another account kept by that authority'.
  No. 10, in page 2, line 14, after 'to', insert 'such'.
  No. 11, in page 2, line 14, leave out 'so mentioned'.
  No. 13, in page 2, line 19, leave out
  'an account mentioned in subsection (b) below',
  and insert
  'another account kept by that authority'.
  No. 14, in page 2, line 21, after 'to', insert 'such'.
  No. 15, in page 2, line 21, leave out 'so mentioned'.
  No. 16, in page 2, line 22, leave out subsection (6).
  No. 30, in page 11, line 2, leave out Schedule 1.

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  No. 31, in clause 2, page 2, line 46, leave out from 'income' to end of line 47.
  No. 32, in clause 2, page 3, line 3, leave out from 'year' to end of line 5.
  No. 149, in clause 9, page 7, line 29, leave out '1(6)'.
  Mr. Roberts: I shall refer to amendments 7 and 9 specifically. On Second Reading my hon. Friend the Member for Copeland (Dr. Cunningham) said:
  "Clause 2 talks of 'proper practices' in connection with local government rate fund revenue account matters, but offers no definition of them. In finance law, auditors are already under a duty to ensure that councils use proper practices in their accounts. The new proposals need detailed explanation and examination of their effects on the rate support grant system."—[Official Report, 12 January 1987; Vol. 108, c. 50.]
  Those amendments would do away with the need for the concept of so-called proper practices in that sense and require the Secretary of State to explain what is meant by proper practices, because he has not yet responded to the request made on Second Reading by my hon. Friend the Member for Copeland.
  If we look behind the amendments, and behind the purpose of the legislation we see why this concept of so-called proper practices is being enshrined in legislation. I served on the Standing Committee that considered the 1980 Bill which became the Local Government, Planning and Land Act 1980. That Act was improperly framed and interpreted, and that has led to all this trouble. At that time, Ministers took decisions for political purposes, which have meant that during the past six or seven years they have been implementing their own legislation illegally. In fact, it was the right hon. Member for Tonbridge and Mailing (Mr. Stanley), the then Minister for Housing, who, for political purposes—because the Government had just introduced an Act encouraging local authorities to make profits on housing revenue accounts out of council tenants-was quite happy to encourage local authorities to put up rents and to make profits and use them to subsidise the ratepayers and reduce the need for central Government grant.
  It was as a result of that political desire, not from any representations by Labour local authorities, that the right hon. Member for Tonbridge and Malling took the decision that any surpluses, in the housing revenue account or others—could be used as expenditure and, unlike the rate fund account, could not be treated for purposes of block grant settlements as money that was to attract penalties or clawback. That was the real position. The right hon. Member—the then Minister for Housing—made housing starts an official secret and then went off to the Ministry of Defence. He was followed by the hon. Member for Eastbourne (Mr. Gow), whom we heard earlier pleading how important the Bill was. He was another guilty Minister in the Department of the Environment who carried out the legislation in an illegal manner. He was a lawyer, yet he blames us for not realising that the legislation was illegal. All the time it was in the Government's interest to work the system in that way. That is what the Bill is all about—to allow local authorities to make profits on certain trading and other accounts, and to use that money oustide the rate fund account and without it being considered for the purposes of block grant and rate support grant penalties.
  The Government found that that practice was illegal and they want to rectify the position and retrospectively
  694
  validate the money that they have given to local authorities outside the block grant. However, they now also want local authorities to follow a different procedure in running their trading and other accounts and adopt a new concept of so-called proper practices.
  These amendments would remove that requirement and restore to local authorities their current discretion about items that count as expenditure and income for block grant purposes. The so-called proper practices concept is another attempt by the Government to enshrine in legislation more central Government control and restrictions over local government resources. The amendments would, quite blatantly, return to local authorities the freedom that they have always enjoyed, even under this Government, to raise revenue through the housing revenue and other accounts and not be penalised for so doing through central Government grant. If the Government would accept our amendments, many of the problems that they and local government face would be removed.
  Amendment No. 9 refers to schedule 1, which lists all the different accounts that are administered by local authorities. However, the Government have also included a provision for the Secretary of State to determine any other sort of account that might not be listed in the schedule. That shows that central Government cannot control local government expenditure and examine all the details of it. Having listed 13 different accounts, separate from the rate fund account, that local authorities can administer and control, the Bill then has a catch-all provision for any other account which the Secretary of State has forgotten and which is not, therefore, listed in the schedule. That shows how inadequate the Bill is.
  Amendment No. 7 would remove the requirement for local authorities to observe the so-called proper practices in compiling accounts. Those practices are not defined in the Bill, although they are effectively linked in clause 2(3) to the procedure of debits and credits laid down by the Bill for the calculation of rate fund revenue. That will be subject to specification by the Secretary of State. Again, that is more power for the Minister and less for democratically elected local government.
  There is a clear danger that accounting practices, hitherto almost exclusively a professional preserve, will be determined by the Secretary of State in a political and arbitrary manner, so that once again those local authorities that the Tory Minister does not like are penalised and others let off scot free. Tammany Hall would be operating from Whitehall rather than from the town hall.
  There is widespread concern about the implications of these changes, not just among people in local government but among accountants and professional auditors in the private sector and public and district auditors who work with local government. Urgent clarification is required. Our amendments should be accepted and freedom given to local government. The law must be put right.
  We must not go along the road of more central control and less local government freedom. Local government must have control of their resources so that it can spend what it raises locally on services for the people without being penalised by central Government through clawback and surcharges.

  Local Government Finance Bill
  Mr. Kenneth Hind: It is ironic that an hon. Member representing Merseyside—the hon. Member for Bootle (Mr. Roberts)—should move a motion on proper accounting practices. I am sure that he is an expert on the financing practices of Liverpool, which seem to fall into line with many of the practices of some of the London boroughs immediately adjacent to the House of Commons. It is clear that proper accounting practices seem to have passed by most of those authorities. There are 5·8 million voters who live under these councils and it is our duty to protect them. That is why this clause and the others that follow it are necessary.
  Mr. Meadowcroft rose——
  Mr. Hind: No doubt, the hon. Member for Bootle had an opportunity to scrutinise the leaked report by the Audit Commission which was published last Sunday in the Sunday Telegraph. The report considers the problems of Brent, Camden, Hackney, Haringey, Islington, Lambeth, Lewisham and Southwark and says that they are all cases for concern. The report states:
  "The symptoms of poor management are clear: housing in poor condition, failure to act on opportunities to reduce waste, difficulty recruiting and keeping staff and generally poor industrial relations.
  The consequences are serious, with expenditure double that in similarly deprived areas even after allowing for the extra costs associated with employing people in London; poor services; a cash gap in prospect next year of £500 million—as much as 40 per cent. of current revenue expenditure in some places—and over £700 million of deferred purchase arrangements which will load on future generations of ratepayers the cost of some of today's management failures."
  Mr. Martin Flannery rose——
  Mr. Meadowcroft rose——
  Mr. Hind: The hon. Member for Bootle seeks to give the Government advice on how local authorities should be run.
  Hon. Members, especially Conservative Members, should bear in mind the report issued on 5 December this year which was headlined in The London Standard and said that London was going broke. It is going broke because Labour authorities throughout Britain are deferring payment on revenue in the hope, according to the leader of Islington council, that a Labour Government will bail them out.
  Mr. Flannery rose——
  Mr. Meadowcroft rose——
  Mr. Hind: I give way to the hon. Member for Leeds, West (Mr. Meadowcroft).
  Mr. Meadowcroft: I would express no particular love or support for the accounting practices of the local authorities mentioned by the hon. Gentleman. Perhaps he will answer the questions that I always want to ask Conservative Members who make this point. If these abuses are so blatant, why are the hon. Gentleman and his Conservative friends in those authorities incapable of persuading the voters to throw out the councillors? Why do these 5 million people still live under the type of political control that the hon. Gentleman regards as so reprehensible? Why do the hon. Gentleman and his
  696
  political colleagues have such an inferiority complex that they believe that it is impossible to get rid of those authorities, except by Government diktat? Is the hon. Gentleman aware that in the Sefton metropolitan district, from which the hon. Member for Bootle (Mr. Roberts) comes, the Conservative party lost control last May? It is a matter not only of dislinking the accounting elsewhere but of the Conservative party not being able to cope locally.
  Mr. Hind: The Liberal party has the same trouble in dislodging the Labour party in those areas as we do.
  Mr. Ron Leighton: Surely, the hon. Gentleman believes in democracy.
  Mr. Hind: Of course, we believe in democracy. As I understand it, the hon. Member for Leeds, West (Mr. Meadowcroft) is saying that he deprecates the practices that are followed by those authorities.
  Mr. Meadowcroft indicated assent.
  Mr. Hind: I am glad that the hon. Gentleman agrees. Is he saying that he has the same difficulty in dislodging Labour councillors? Perhaps the hon. Gentleman would agree that by the use of the debating system in the House we shall at least have the opportunity to expose to a much wider audience the bad practices in those authorities.
  Mr. Flannery rose——
  Mr. Hind: If we sit back, do nothing about it and allow it to go on, it will be swept under the carpet by Opposition Front Bench spokesmen who have no control over the people in Labour-controlled local authorities. It is up to us to expose it. The hon. Member for Blackburn (Mr. Straw), who is in the Chamber, went to Liverpool to try to persuade Liverpool council to modify its policies. He was sent back to Westminster with his tail between his legs. That does not bode well for the future if a Labour Government are ever allowed to take office. Those are the factors we have to bear in mind.
  Mr. Flannery rose——
  10.45 pm
  Mr. Hind: I have nearly finished. The hon. Gentleman can then say his piece.
  In the light of the Auditor General's report and the other reports before us about the practices in the bad Left-wing Labour run authorities, how can anybody give Conservative Members a lecture on proper accounting practice?
  Mr. Allan Roberts: I do not know which of the practices of Liverpool city council to which the hon. Member for Lancashire, West (Mr. Hind) objects. I do not know whether it is the policy of refusing to put up the rates or its policy of selling off assets so that it can get money for capital receipts. However, may I point out to the hon. Gentleman that I do not represent a Liverpool constituency. I represent Bootle, which is in Sefton. I am concerned about proper practices in local government. However, proper practice in terms of these amendments is about how local authorities organise their accounts, especially those without the rate fund revenue account.
  I would be happy to examine the practices of Sefton council when it was Conservative controlled. In the same year as it closed a school for the physically handicapped, it used ratepayers' money to build a statue of Red Rum in Southport.
  Mr. Flannery: In 1985 the controller of the Audit Commission spoke about Sheffield. He said:
  "The city is well managed and other cities can learn from Sheffield which provides outstanding value for money."
  Does my hon. Friend think that Sheffield will get any mercy from the Government, no matter how good it was or how good the Audit Commission thought it was?
  Mr. Roberts: My hon. Friend is quite right. However, Sheffield Labour council is rewarded by the electors in Sheffield who continue to re-elect overwhelmingly a Labour council.
  As I was saying, in the same year as the Sefton Tory council closed learner swimming pools it bought fairy lights for Lord street in Southport with ratepayers' money. In the same year as the school children were sharing text books in the schools the council refused to give discretionary grants to students who obtained places in colleges of further and higher education. Those discretionary grants were provided by every Labour controlled local authority in Merseyside. It was the lowest rated metropolitan district in the country with 30 per cent. unemployment levels. Did the low rates drive the jobs away as we are accused of driving them out of Liverpool and elsewhere.
  Mr. Patrick McLoughlin: Will the hon. Gentleman give way?
  Mr. Roberts: No, I want to get back to the amendments. Let us have some sensible answers from the Minister. Will he tell us what proper accounting means? Why is it needed when district and other auditors cannot see the need and when there are already necessary checks and balances? Why have the Government got themselves into such a mess that they have to introduce this sort of legislation which takes more powers and rights away from local government and goes further by preventing it from using money it has raised through its own efforts. The Government are now taking control of how the rates are raised, what level they are raised to and how they are spent. In the legislation that we are trying to amend, the Government are taking control of the money raised by local authorities on every account that they run, from the housing revenue account to the money collected from the municipal laundries. Does not the Minister think that that is nonsense?
  Mr. Hancock: Yet again we have come full circle to the words "proper practices". I hope that the Minister will now afford the House the pleasure of hearing his interpretation of the meaning of those words. The alliance will support the amendments and I hope that the "Labour" party will force a Division as these points are crucial to the essence of local democracy.
  The hon. Member for Lancashire, West (Mr. Hind) referred to the problems that he envisaged would arise through the leaked report from the Audit Commission. He enthused about the ability of the House to talk a local authority out of existence. That was extreme folly. The only way in which local authorities should continue to be put out of power is through the ballot box. The Government's mistaken circus adventure involving the abolition of the metropolitan counties must never be repeated. The hon. Gentleman's "enthusiasm" for that form of local democracy—if that is the right word—is something that the Committee should oppose. I hope that this Conservative Government will learn that the mistake
  698
  that they made previously by relieving people of a form of local government that they did not like, will ultimately cost more than the Government were hoping to save.
  What is wrong with the present system? Why is it so bad that we have to go through this exercise? Time and again alliance Members have tried to get that message across and glean from the Minister what is wrong with local government finance. I am no supporter of the Labour party, but I know that the Under-Secretary of State for the Environment, the hon. Member for Southampton, Itchen (Mr. Chope), would find it difficult to fault the way in which the Labour-controlled authority in Southampton has acted. The people in Southampton find very little to condemn. As a member of the county council, I have strained very hard to find fault with the Labour party line. Undoubtedly it has pushed its credibility to extremes on occasions, but its main financial thrust and the way in which it has controlled expenditure in Southampton is a lesson for us all.
  I draw the Under-Secretary of State's attention to the position in Hampshire. He may smile, but would he care to come to the Dispatch Box and tell us about that council which, year in year out, followed the Government's rules to the letter but in which there was a 14 per cent rate increase last year and in which there is predicted to be a 12 per cent. rise this year? Despite the best efforts of the Secretary of State to impose a form of local government on a Conservative-controlled local authority, he has failed miserably. The only way in which the people of Hampshire have benefited in the past 18 months is through the advent of a virtually balanced council. At least they have better services for the increased rates. However, for five or six years they suffered rate increases and received very little, if anything, in return.
  The Minister must explain what "proper practices" means and tell us what practices he is so against which so mysteriously and at long last have warranted the Bill. What will the Minister abolish in schedule 1? What will he make it difficult for local authorities to achieve? Will he tell a local authority, which may have an enterprising activity such as a ferry port from which it may derive wide revenue and for which it may have put away money for development, that that reserve fund for future capital expenditure should not exist? Is he claiming that that money should go into the general rate fund and so erode the pressure to rekindle the enthusiasm for jobs in the dock areas or in the inner cities? Will that type of fund no longer be legal? We need to know, because many local authorities gain income from such activities which would no longer be able to go into so many useful things if the Bill were accepted.
  The phrase "proper practices" can be defined in many ways, and I hope that the Minister will give us the benefit of his interpretation.
  Dr. Boyson: I do not think that the two and a half sides of the Committee are as far apart here as some speeches have implied.
  We all enjoyed listening to my hon. Friend the Member for Lancashire, West (Mr. Hind), who drew attention to the importance of the Audit Commission report, which we will all read carefully when it is published.
  Clauses 1 and 2 and schedule 1 set up the rate fund revenue account. The aim is that rate fund revenue accounts should conform to the way in which authorities have generally kept their traditional, but non-statutory,

  699
  rate fund revenue accounts. Our intention is not to change current practice but, as far as possible, to make the traditional methods more common so that they can be checked. The amendments have that intention as well.
  Rate fund revenue accounts might, however, differ from the traditional way in which authorities have kept their main revenue accounts. The amendments would reduce authorities' freedom to keep accounts as they want. I do not believe that that is their intention, and it is not the Government's aim. I ask the Committee to reject the amendment, not because it increases authorities' freedom but because it restricts it. Clauses 1 and 2 and schedule 1 are, as far as possible, based on the best methods used by local authorities.
  Question put, That the amendment be made:—
  The Committee divided: Ayes 167, Noes 219.

  Division No. 60]

  [10.57 pm

  AYES

  Abse, Leo

  Evans, John (St. Helens N)

  Adams, Allen (Paisley N)

  Fatchett, Derek

  Alton, David

  Field, Frank (Birkenhead)

  Anderson, Donald

  Fields, T. (L'pool Broad Gn)

  Archer, Rt Hon Peter

  Fisher, Mark

  Ashley, Rt Hon Jack

  Flannery, Martin

  Atkinson, N. (Tottenham)

  Foot, Rt Hon Michael

  Banks, Tony (Newham NW)

  Forrester, John

  Barron, Kevin

  Foster, Derek

  Beckett, Mrs Margaret

  Fraser, J. (Norwood)

  Bell, Stuart

  Freeson, Rt Hon Reginald

  Benn, Rt Hon Tony

  Freud, Clement

  Bidwell, Sydney

  Garrett, W. E.

  Blair, Anthony

  George, Bruce

  Boyes, Roland

  Gilbert, Rt Hon Dr John

  Bray, Dr Jeremy

  Golding, Mrs Llin

  Brown, Gordon (D'f'mline E)

  Gould, Bryan

  Brown, Hugh D. (Provan)

  Hamilton, James (M'well N)

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

  Hancock, Michael

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

  Hardy, Peter

  Brown, Ron (E'burgh, Leith)

  Harrison, Rt Hon Walter

  Buchan, Norman

  Hart, Rt Hon Dame Judith

  Caborn, Richard

  Heffer, Eric S.

  Callaghan, Jim (Heyw'd & M)

  Hogg, N. (C'nauld & Kilsyth)

  Campbell, Ian

  Holland, Stuart (Vauxhall)

  Campbell-Savours, Dale

  Home Robertson, John

  Canavan, Dennis

  Howells, Geraint

  Carter-Jones, Lewis

  Hoyle, Douglas

  Clark, Dr David (S Shields)

  Hughes, Robert (Aberdeen N)

  Clarke, Thomas

  Hughes, Roy (Newport East)

  Clay, Robert

  Hughes, Sean (Knowsley S)

  Clelland, David Gordon

  John, Brynmor

  Clwyd, Mrs Ann

  Jones, Barry (Alyn & Deeside)

  Cocks, Rt Hon M. (Bristol S)

  Kaufman, Rt Hon Gerald

  Cohen, Harry

  Kirkwood, Archy

  Coleman, Donald

  Lambie, David

  Conlan, Bernard

  Lamond, James

  Cook, Frank (Stockton North)

  Leadbitter, Ted

  Corbyn, Jeremy

  Leighton, Ronald

  Cox, Thomas (Tooting)

  Lewis, Terence (Worsley)

  Crowther, Stan

  Litherland, Robert

  Cunliffe, Lawrence

  Livsey, Richard

  Cunningham, Dr John

  Lloyd, Tony (Stretford)

  Dalyell, Tam

  Lofthouse, Geoffrey

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

  Loyden, Edward

  Deakins, Eric

  McCartney, Hugh

  Dewar, Donald

  McDonald, Dr Oonagh

  Dixon, Donald

  McGuire, Michael

  Dobson, Frank

  McKay, Allen (Penistone)

  Dormand, Jack

  McNamara, Kevin

  Douglas, Dick

  McTaggart, Robert

  Dubs, Alfred

  McWilliam, John

  Dunwoody, Hon Mrs G.

  Madden, Max

  Eadie, Alex

  Marek, Dr John

  Eastham, Ken

  Marshall, David (Shettleston)

  700

  Martin, Michael

  Rowlands, Ted

  Mason, Rt Hon Roy

  Sheerman, Barry

  Maxton, John

  Sheldon, Rt Hon R.

  Maynard, Miss Joan

  Shields, Mrs Elizabeth

  Meacher, Michael

  Shore, Rt Hon Peter

  Meadowcroft, Michael

  Short, Ms Clare (Ladywood)

  Michie, William

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

  Mitchell, Austin (G't Grimsby)

  Silkin, Rt Hon J.

  Morris, Rt Hon J. (Aberavon)

  Skinner, Dennis

  Nellist, David

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

  Oakes, Rt Hon Gordon

  Snape, Peter

  O'Brien, William

  Soley, Clive

  O'Neill, Martin

  Spearing, Nigel

  Park, George

  Steel, Rt Hon David

  Parry, Robert

  Stott, Roger

  Patchett, Terry

  Straw, Jack

  Pavitt, Laurie

  Thompson, J. (Wansbeck)

  Pendry, Tom

  Thorne, Stan (Preston)

  Powell, Raymond (Ogmore)

  Wallace, James

  Radice, Giles

  Wardell, Gareth (Gower)

  Randall, Stuart

  Welsh, Michael

  Raynsford, Nick

  White, James

  Redmond, Martin

  Williams, Rt Hon A.

  Rees, Rt Hon M. (Leeds S)

  Winnick, David

  Richardson, Ms Jo

  Woodall, Alec

  Roberts, Allan (Bootle)

  Young, David (Bolton SE)

  Roberts, Ernest (Hackney N)

  Robinson, G. (Coventry NW)

  Tellers for the Ayes:

  Rogers, Allan

  Mr. Ron Davies and

  Rooker, J. W.

  Mr. Frank Haynes.

  Ross, Ernest (Dundee W)

  NOES

  Ancram, Michael

  Havers, Rt Hon Sir Michael

  Best, Keith

  Hawkins, Sir Paul (N'folk SW)

  Biffen, Rt Hon John

  Hawksley, Warren

  Body, Sir Richard

  Hayes, J.

  Bottomley, Peter

  Hayhoe, Rt Hon Sir Barney

  Boyson, Dr Rhodes

  Heathcoat-Amory, David

  Chope, Christopher

  Henderson, Barry

  Cockeram, Eric

  Heseltine, Rt Hon Michael

  Coombs, Simon

  Hickmet, Richard

  Cope, John

  Hicks, Robert

  Currie, Mrs Edwina

  Higgins, Rt Hon Terence L.

  Dorrell, Stephen

  Hind, Kenneth

  Douglas-Hamilton, Lord J.

  Hirst, Michael

  Fallon, Michael

  Holland, Sir Philip (Gedling)

  Farr, Sir John

  Holt, Richard

  Favell, Anthony

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

  Fenner, Dame Peggy

  Howarth, Gerald (Cannock)

  Finsberg, Sir Geoffrey

  Howell, Rt Hon D. (G'ldford)

  Fletcher, Sir Alexander

  Howell, Ralph (Norfolk, N)

  Fookes, Miss Janet

  Hubbard-Miles, Peter

  Forman, Nigel

  Hunt, David (Wirral W)

  Forsyth, Michael (Stirling)

  Hunt, John (Ravensbourne)

  Forth, Eric

  Irving, Charles

  Fox, Sir Marcus

  Jackson, Robert

  Franks, Cecil

  Jessel, Toby

  Fraser, Peter (Angus East)

  Johnson Smith, Sir Geoffrey

  Freeman, Roger

  Jones, Gwilym (Cardiff N)

  Gale, Roger

  Jones, Robert (Herts W)

  Galley, Roy

  Joseph, Rt Hon Sir Keith

  Gardiner, George (Reigate)

  Kershaw, Sir Anthony

  Glyn, Dr Alan

  Key, Robert

  Goodlad, Alastair

  King, Roger (B'ham N'field)

  Gow, Ian

  Knight, Greg (Derby N)

  Grant, Sir Anthony

  Knight, Dame Jill (Edgbaston)

  Greenway, Harry

  Knowles, Michael

  Griffiths, Sir Eldon

  Knox, David

  Griffiths, Peter (Portsm'th N)

  Lamont, Rt Hon Norman

  Grist, Ian

  Lang, Ian

  Ground, Patrick

  Latham, Michael

  Grylls, Michael

  Lawler, Geoffrey

  Hamilton, Hon A. (Epsom)

  Lawrence, Ivan

  Hamilton, Neil (Tatton)

  Lee, John (Pendle)

  Hanley, Jeremy

  Leigh, Edward (Gainsbor'gh)

  Hannam, John

  Lester, Jim

  Hargreaves, Kenneth

  Lightbown, David

  Harris, David

  Lilley, Peter

  Haselhurst, Alan

  Lloyd, Sir Ian (Havant)

  701

  Lloyd, Peter (Fareham)

  Shaw, Giles (Pudsey)

  Lord, Michael

  Shaw, Sir Michael (Scarb')

  Lyell, Nicholas

  Shelton, William (Streatham)

  McCrindle, Robert

  Shepherd, Richard (Aldridge)

  Macfarlane, Neil

  Shersby, Michael

  MacGregor, Rt Hon John

  Silvester, Fred

  Maclean, David John

  Skeet, Sir Trevor

  McLoughlin, Patrick

  Smith, Sir Dudley (Warwick)

  McNair-Wilson, M. (N'bury)

  Smith, Tim (Beaconsfield)

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

  Soames, Hon Nicholas

  McQuarrie, Albert

  Speed, Keith

  Madel, David

  Spencer, Derek

  Major, John

  Spicer, Jim (Dorset W)

  Malins, Humfrey

  Spicer, Michael (S Worcs)

  Malone, Gerald

  Squire, Robin

  Maples, John

  Steen, Anthony

  Marland, Paul

  Stevens, Lewis (Nuneaton)

  Marlow, Antony

  Stewart, Allan (Eastwood)

  Marshall, Michael (Arundel)

  Stewart, Andrew (Sherwood)

  Mates, Michael

  Stewart, Ian (Hertf'dshire N)

  Mather, Sir Carol

  Stokes, John

  Maude, Hon Francis

  Stradling Thomas, Sir John

  Maxwell-Hyslop, Robin

  Sumberg, David

  Merchant, Piers

  Taylor, John (Solihull)

  Meyer, Sir Anthony

  Taylor, Teddy (S'end E)

  Miller, Hal (B'grove)

  Tebbit, Rt Hon Norman

  Mills, Iain (Meriden)

  Temple-Morris, Peter

  Moate, Roger

  Terlezki, Stefan

  Montgomery, Sir Fergus

  Thomas, Rt Hon Peter

  Morris, M. (N'hampton S)

  Thompson, Donald (Calder V)

  Morrison, Hon P. (Chester)

  Thompson, Patrick (N'ich N)

  Moynihan, Hon C.

  Thorne, Neil (Ilford S)

  Nelson, Anthony

  Thornton, Malcolm

  Neubert, Michael

  Thurnham, Peter

  Nicholls, Patrick

  Townend, John (Bridlington)

  Onslow, Cranley

  Trippier, David

  Oppenheim, Rt Hon Mrs S.

  Trotter, Neville

  Ottaway, Richard

  Twinn, Dr Ian

  Page, Sir John (Harrow W)

  van Straubenzee, Sir W.

  Page, Richard (Herts SW)

  Vaughan, Sir Gerard

  Parkinson, Rt Hon Cecil

  Waddington, Rt Hon David

  Patten, J. (Oxf W & Abgdn)

  Waldegrave, Hon William

  Pawsey, James

  Walker, Bill (T'side N)

  Pollock, Alexander

  Waller, Gary

  Porter, Barry

  Ward, John

  Powell, William (Corby)

  Wardle, C. (Bexhill)

  Powley, John

  Watts, John

  Price, Sir David

  Wells, Bowen (Hertford)

  Proctor, K. Harvey

  Wells, Sir John (Maidstone)

  Raffan, Keith

  Wheeler, John

  Rathbone, Tim

  Whitfield, John

  Rhodes James, Robert

  Whitney, Raymond

  Rhys Williams, Sir Brandon

  Wiggin, Jerry

  Ridley, Rt Hon Nicholas

  Wilkinson, John

  Ridsdale, Sir Julian

  Wolfson, Mark

  Roberts, Wyn (Conwy)

  Wood, Timothy

  Robinson, Mark (N'port W)

  Woodcock, Michael

  Roe, Mrs Marion

  Yeo, Tim

  Rossi, Sir Hugh

  Young, Sir George (Acton)

  Rost, Peter

  Younger, Rt Hon George

  Rowe, Andrew

  Ryder, Richard

  Tellers for the Noes:

  Sackville, Hon Thomas

  Mr. Tony Durant and

  Sainsbury, Hon Timothy

  Mr. Mark Lennox-Boyd.

  Sayeed, Jonathan

  Question accordingly negatived.
  Amendments made: No. 8, in page 2, line 8, leave out 'The' and insert
  'For the purposes of subsection (3) above defined revenue'.
  No. 12, in page 2, line 15, leave out 'The' and insert
  'For the purposes of subsection (3) above defined revenue'.—[Dr. Boyson.]
  Mr. Allan Roberts: I beg to move amendment No. 18, in page 2, line 25, leave out paragraph (b).
  To some extent it relates to the debate on the previous amendments on which the Committee has just voted. The
  702
  amendments that were not accepted—they were defeated in the Lobbies—would have removed the way in which the Government wish local authorities to calculate their proper expenditure. This amendment is even more necessary. It attempts to rectify the legislation. It is not a wrecking amendment, but one that will improve the legislation, and the Government should accept it in that spirit. However, the amendment draws attention to the fact that the Secretary of State is taking even more powers. Clause 1(6)(b) states:
  "any other account specified in respect of the year concerned by the Secretary of State."
  In other words, again referring to schedule 1, the Secretary of State lists in his legislation 13 accounts that local authorities keep, other than the rate fund account. Schedule 1 starts with the housing revenue account and it includes the housing repairs account. It refers to such accounts as
  "a trading undertaking (whether the undertaking is owned by the authority concerned individually or as a member of a joint committee)."
  It takes account of any trading that can take place not only by the local authority alone but as a member of a joint committee. Such matters as local authority-owned airports are covered. Paragraph 4 refers to
  "Any account of any fund established under section 15(1) of the Public Libraries and Museums Act 1964."
  Paragraph 5 refers to anything done in regard to goods and services under the Local Authorities (Goods and Services) Act 1970. Paragraph 6 refers to
  "Any account of any fund known as a superannuation fund and maintained under regulations made under section 7 of the Superannuation Act 1972."
  All that is covered. Paragraph 7 refers to
  "Any account of a loans fund established under paragraph 15 of Schedule 13 to the Local Government Act 1972."
  It covers a range of accounts that local authorities keep. Paragraph 8 deals with
  "Any account of any fund established under paragraph 16 of Schedule 13 to the Local Government Act 1972."
  The paragraph covers many other accounts that local authorities keep. Paragraph 9 refers to lottery funds. Sefton council holds a lottery to raise money. From the proceeds of that lottery, the council is able to fund all types of worthwhile, mainly voluntary joint efforts. That will be controlled and proper accounts will have to be kept. Any money raised from a lottery will count against a local authority's expenditure of it. As with money raised from rates, the Government will count money for penalty or for claw-back. Any pound raised from a lottery fund will mean that the local authority could lose another £1 or £2 in rate support grant. That is iniquitous. Paragraph 10 relates to
  "Any account kept by virtue of section 10(1)(i) of the 1980 Act (direct labour organisations)."
  Any profits made by a direct labour organisation that are spent by a local authority can be clawed hack by way of the grant claw back or penalties. Paragraph 11 relates to
  "Any account kept by virtue of section 55(1) of the Road Traffic Regulation Act 1984 (parking places).
  Any money raised by virtue of a sensible policy to get revenue from parking will be subject to the penalties, the clawbacks and the block grant controls—the detailed controls of central Government interfering even with money raised in a parking account.
  Schedule 1 also includes any account kept by virtue of section 3(4)(a)(i) of the Further Education Act 1985. The schedule is all-embracing. Finally, the schedule includes

  703
  "Any account of any fund known as a metropolitan debt administration fund and operated under any order made under section 66 of the Local Government Act 1985."
  11.15 pm
  I have gone through the list of accounts to demonstrate that the schedule is comprehensive. However, even after keeping proper accounts, money spent by local authorities will be controlled by the Government and treated as rate fund expenditure. They will apply penalties and clawback. Clause 1(6)(b) refers to
  "any other account specified in respect of the year concerned by the Secretary of State."
  If the Department of the Environment gets it wrong again and does not include every account, however small—perhaps the petty cash that teachers use to buy equipment that is not provided by the education authority because the rate support grant has been slashed—the authority could be designated by the Secretary of State. He will be able to ensure in the minutest detail that the revenue of local authorities is controlled by him and central Government. Big brother knows best. No local authority resources will be allowed to escape the net.
  This Government have encouraged profit-making on the housing revenue account. They have raised money through increasing council house rents. Under the 1980 Act the Government introduced a system whereby the Secretary of State designated the contribution to the housing revenue account by means of rent levels. Since 1980, rent increases have been determined by the Secretary of State. If a Labour-controlled council did not increase its council house rents by the amount determined by the Secretary of State or by the Department of the Environment's computer, the Secretary of State deemed that rents had been increased by that amount and reduced accordingly the housing revenue account subsidy. The system was designed to encourage housing revenue account surpluses which could be used to subsidise the rate fund account.
  The housing revenue account surpluses have been used by many authorities. For example, Sefton was under Tory control until May 1986, when they were thrown out. Until then they increased rents to such an extent that they had a housing revenue account surplus of £2 million. In previous years that money was used to subsidise the rate fund. This year, with the Liberals supporting the larger Labour group on Sefton council, it will be used for the benefit of council tenants. It is their money. At last some repairs may be done, now that the Tories are not controlling that council. Money has been taken away from council tenants and used to subsidise the rate fund, but under the Bill it will also be used to calculate block grant. Whereas previously, in conjunction with local authorities after representations from the Tory local authority associations, it was excluded from the calculations, and every pound that was spent from a surplus on the housing revenue account did not attract penalties, it will now attract them. That is the intent and the purpose, all because the Government claim that these trading accounts, these revenue accounts which are not rate fund accounts, have been used by local authorities "to avoid penalties." All the local authorities have been doing is using the money that they have made locally for the purposes that they thought fit to benefit their electors and the citizens who live in their areas.
  704
  The Department of the Environment and the combined brains of Ministers have come up with this catch-all list in schedule 1. It is not unreasonable for us not to give the Secretary of State power to specify anything else in respect of the year concerned. If the Bill becomes an Act and that schedule applies without the provision that we are trying to take out by our amendment, at least local authorities will know where they stand. They will not have an account with moneys coming in from capital receipts or from a residual body that they think, because of the way that the schedule is written, can be used without attracting penalty, and then halfway through the year somebody—perhaps a councillor of an opposition party—telephones the Secretary of State and says "Do you know that they have this account? They have made some money in this way and are spending it for the benefit of the ratepayers or citizens of their area, but we think it should attract grant. Designate it; specify it in this specific year." That is an intolerable situation of the kind that the Government continually put local government into.
  The Department of the Environment says that the purpose of clause 1(6)(b) is to allow the Secretary of State to add any account that may have escaped his attention because it is found in local legislation, but there are byelaws that allow for it. If that is so, this paragraph is drafted too widely, and before Parliament approves such a power the Secretary of State should give examples of what he has in mind. We could put another amendment down, and perhaps the Minister would on Report table an amendment that applies to a specific authority because of a local byelaw which affects them. That might be an improvement, because local authorities could look at the local Acts and would know what accounts were involved. That would be fairer than this, but why it is necessary we do not know.
  We have now reached a parlous situation where there is detailed legislation to take control of the day-to-day running of administration of local authority accounts. When that is necessary, it shows the state that the Government have got into with this legislation, and it proves that it is impossible for the Government, Whitehall or computers run by the Department of the Environment civil servants to know more about a local community, its needs, revenue and affairs than the councillors elected by the local people.
  Mr. Meadowcroft: Does the wording of the clause encompass any new account that the Minister might devise, name or list, which is peculiar to one authority, or does it have to be one that is common to all authorities in a particular category? The clause, as drafted, is ambiguous and could apply to one authority. We may then have the problems outlined by the hon. Member for Bootle (Mr. Roberts), and a local authority may be singled out by the Government because they dislike how the authority runs its accounts, and may try to find one aspect to delineate.
  If that is the case, the Government's problem is twofold. First, if the clause specifies a particular council, that puts the Bill in difficulty with regard to hybridity. It would single out one authority from another. On the other hand, if the Government wished to catch a particular local authority of whose practices they did not approve by trying to set up a particular type of account, it would probably be impossible to find a form which would cover all the different ones.

  705
  The hon. Gentleman talked about the different accounts listed in the schedule. But there are other kinds of accounts which at present, legitimately and openly, local authorities keep. Let me give one example. In 1969 or 1970 the Leeds council took over the theatre. For tax purposes, and because of the way in which it wanted to run the theatre, the council established the Leeds Grand Theatre and Opera Co. Ltd. All the directors are appointed by the council, but nevertheless it is a separate corporate entity and as such it has separate accounting procedures. As far as I can see, that instance is not covered in the schedule. At present, there are no difficulties and because the theatre, like virtually every theatre, makes a loss, although not a huge loss, it is subsidised out of the rates and the rate fund shows that particular subsidy.
  If there were such an entity, in the category of a separate body, but nevertheless in association with the council, the effect of what the Government are trying to do might well he to encourage secrecy. That is the ironic thing. Because a council might be worried about what might happen in the next year or the year after, it might seek to turn away from the open road of publishing all its accounts so that it could put money in its back pocket to put money back into the rate fund account in future years. Once the trust that has existed in local government for so many years is destroyed, the secrecy and problems with which the Government seek to deal are bred.
  Clause 1(6)(b) is particularly dangerous in further damaging that kind of relationship. It sets aside the exercise now going on with the Chartered Institute of Public Finance and Accountancy to try to work out a code of practice for accountants between all the local authority associations in conjunction with the Minister's officials which it would then be incumbent on all local authorities to follow. That is the better road down which to go, and so the amendment is worthy of support.
  Mr. Gordon Oakes: I have not so far burdened the Committee with my views, but I want to take two minutes of the Committee's time. I entirely agree with my hon. Friend the Member for Bootle (Mr. Roberts) and the hon. Member for Leeds, West (Mr. Meadowcroft).
  I have two objections to the clause. One is that it is sloppy. If the Government intend to take all accounts into consideration, why do not they say so? Why have a schedule to the Bill? Why not merely say in the clause that all accounts are subject to the Secretary of State? In effect, that is what clause 1(6)(b) does.
  I speak as vice-president of the Association of County Councils, which is most concerned about this because it does not know which accounts will be affected. The Secretary of State can jump anywhere he likes on a particular account at any time he likes. Accountants and county and local authority treasurers will bear the Bill in mind. They are law-abiding citizens. They will try to operate within its terms. But suddenly the Secretary of State can, under subsection (6)(b), designate an account as one that must come to his attention. The treasurers, councillors and others involved will not be aware of that when they set up an account. The Government are creating confusion.
  If the Government want to do this, they should say "all accounts", and do without schedule 1. Anything that local government does can come within the purview of the Minister, and he should have the guts to say that that is
  706
  so. I disagree with it, but the Government are trying to create a schedule on particular accounts, and then saying that they can jump anywhere else that they like.
  11.30 pm
  The hon. Member for Leeds, West mentioned accounts in his city. In my constituency, another example springs to mind. We are instituting a chemical industry museum. We have a lot of money from the Government, for which we are grateful, and it is going into an industrial archaeological site. My authority would never believe that the account for that project would come under the provisions of the Bill, but the Secretary of State could say that it would, even though it is a charity, because he wants it to. This is a charity well supported by industry. It is the only museum of its type in western Europe, and it is run by the council. Why should this provision apply to such a project?
  If the Government want a catch-all, they should have the guts to say so, and make the Bill apply to all accounts. If they do not mean that, they should not put local government in the position that they do not know what will happen to a particular account, as the Bill does.
  Dr. Boyson: I am glad to respond to the debate, because we can put at rest the minds of those who have spoken. I know that both the right hon. Member for Halton (Mr. Oakes) and the hon. Member for Leeds, West (Mr. Meadowcroft) have much experience in local government.
  Dr. Cunningham: So does my hon. Friend the Member for Bootle (Mr. Roberts).
  Dr. Boyson: I am grateful for that intervention. The hon. member for Bootle (Mr. Roberts) also has great experience.
  The expenditure in the accounts specified will not be taken into account for block grant. The list is there to ensure that is will not be counted as relevant expenditure. It is to the advantage, not to the disadvantage, of local authorities that this schedule exists. I know that hon. Members did not wish to imply that the provisions of the schedule will mean that the profits of, for example, direct labour organisations, will lead to grant clawback. The point of specifying these accounts is to ensure that expenditure and income debited or credited to them is not included in the rate fund revenue account. If this expenditure and income were so excluded, the rate Fund revenue account would differ from that traditionally held by authorities, and would not be maintaining the status quo. We want to retain the status quo and exclude the specified items from the block grant account related expenditure.
  Mr. Allan Roberts: I understand that if the money that is collected in these accounts, whether they are in surplus or not, is spent within the account so that, for example, money within the housing revenue account is spent for housing revenue account purposes, it does not count for block grant penalties. If the money is transferred from the account to be spent on purposes that otherwise rate fund income would be spent on, would it then be counted in terms of block grant calculation?
  Dr. Boyson: If the specified money is in the separate accounts, it is not part of the block grant, but if it is transferred and spent as block grant, another situation arises. If it were not established in this way, it would be to the disadvantage of the local authorities. For the

  707
  advantage of local authorities, and to continue traditional practices, we have framed the clause and the schedule as they are. If we accepted the amendment, it would be to the serious disadvantage of local authorities.
  Mr. Tony Banks: I wanted to wait until I heard the Minister to see whether I could better understand this part of the Bill. Amendment No. 18 seeks to remove subsection (6)(b). Although I appreciate that subsection (6)(a), referring to a schedule, gives a list of accounts, how can this protect local authorities? To give the Secretary of State the ability to specify any account in respect of any year cannot protect a local authority. I do not understand that argument.
  That must mean that if the local authority came up with an account, or if another account was discovered of which the Department of the Environment was unaware, the Secretary of State could be advised by his civil servants to specify that account. How does that protect local authorities? It is simply another catch-all so that, if the Secretary of State or his advisers have missed something—it is a fair bet that they might have done, given the complexity of the legislation—the advisers can come along and say, "By the way, Minister, it appears that we have missed this account which the authority is using for this purpose. We are sure you do not agree with it and we think that you should specify it using the powers that you have in the Act."
  Will the Minister explain how that can be to the benefit of a local authority desperately trying to protect its jobs and services? How will it do anything to add to the understanding of local government finance? How can it bring consistency to the advice that local councillors will be receiving from their officers? Whatever the legislation does, it is not specific in this respect. How will this part of subsection (6)(b) be to the advantage of a local authority?
  Mr. Allan Roberts: I am glad to have the Minister's confirmation that any money from the housing revenue account, upwards or downwards, which is transferred to the rate fund account and is spent on services on which, otherwise, rate income would be spent, would qualify in terms of the block grant calculations and would be included in the calculations for penalties. Will Conservative Members vote for legislation that will discourage Tory local authorities from taking surpluses from housing revenue and other trading accounts and spending that money on services which, if not provided with that money, would either not be provided at all or would be provided through an increase in the rates? That is what the Minister has just said. He is introducing a disincentive for a Labour or Conservative local authority to make a profit on its housing revenue account and use the surplus for purposes for which otherwise the rate fund would have to pay. It seems that I was right. The Government have got themselves in a topsy-turvey world of legislation to try to control the day-to-day, detailed affairs of local government.
  If the amendment is not accepted, my advice to Conservative as well as Labour local authorities is not to make surpluses on their housing revenue accounts. If they do, they should spend the money on their council tenants so that they will not be penalised. If they spend it on subsidising the rate fund, they will be penalised. I would like all councils to do the former, anyway.
  Dr. Boyson: As I explained in the debate on an earlier group of amendments relating to clauses 1 and 2, the power of my right hon. Friend the Secretary of State to make specifications under clause 1(6)(b) will enable us to deal with accounts other than those in schedule 1, expenditure on and income from which should not be included in rate fund revenue accounts. Expenditure in accounts which are specified in the schedule will not be taken into account for block grant because it will not be counted as relevant expenditure.
  I must say how delightful it is to see the hon. Member for Newham, North-West (Mr. Banks) with a copy of the Daily Telegraph. That makes us believe in the forgiveness of sins and the salvation of all men. What a glorious sight is the hon. Gentleman. That is the sort of scene from which a postcard could be made. Whether that postcard should count as relevant expenditure or come under a non-total——
  Mr. Tony Banks: The Minister has commendable eyesight. I am sure that I could not have seen that newspaper had it appeared on the Conservative Benches. I am reading a story on the front page of the Sunday Telegraph, which is nothing more than Tory party propaganda—as one would expect from the Sunday Telegraph and the Daily Telegraph. I hope that we shall have a chance to refer to it later.
  Dr. Boyson: I must not be diverted by the hon. Gentleman with his usual skill. However, one may be redeemed on one day of the week, and what holier day is there than Sunday? If there is redemption on Sunday, it could come on Monday and Tuesday. I shall bring my own Daily Telegraph in future and offer it to the hon. Gentleman, and all hon. Members may watch his progress as he slowly moves towards the Conservative Benches. Such conversions have happened in history, such as on the road to Damascus.
  We have had a good debate on the amendment and I realise the honesty and concern of all hon. Members. I advise the House to reject the amendment because I do not believe that, if it were accepted, it would be to the advantage of local authorities.
  Mr. Allan Roberts: In the light of the clear explanation that the Minister has given, I am happy that advice will go out from the Minister to Conservative and Labour councils not to spend surpluses or money raised from housing revenue and other accounts on the ratepayers, but to spend it for the purpose for which it was raised.
  I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  To report Progress and ask leave to sit again.—[Dr. Boyson.]
  Committee report Progress; to sit again tomorrow.

  PRIVATE BILL PROCEDURE
  Ordered,
  That, in accordance with the Resolution of 16th June, in the last Session of Parliament, a Select Committee of seven Members be appointed to join with a Committee to be appointed by the Lords to examine the process of enacting Private Legislation and to consider whether:

  (a) there are any matters of a kind at present dealt with by Private Bill which could more appropriately be dealt with some other way, taking account of the interests both of Promoters and other affected parties;

  (b) any changes are desirable in Private Bill procedure; and

  709

  (c) any amendments are desirable to the Private Legislation Procedure (Scotland) Act 1936 and the procedure thereunder;

  and to consider whether any amendments are desirable to the Statutory Orders (Special Procedure) Act 1945.
  Ordered,
  That the Committee have power to send for persons, papers and records.
  Ordered,
  That three be the Quorum of the Committee.
  Ordered,
  That Mrs. Ann Clwyd, Mr. Terry Davis, Sir Anthony Grant, Mr. Patrick McNair-Wilson, Mr. Albert McQuarrie, Mr. Roger Moate and Sir John Stradling Thomas be members of the Committee.—[Mr. Neubert.]

  Speech Therapy
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
  Mr. David Alton: May I first thank you, Mr. Deputy Speaker, for this opportunity to raise, on the Adjournment of the House, the provision of speech therapy and the remuneration of speech therapists in the Greater Liverpool area.
  My interest in the provision of services for people with special needs stems from the six years that I spent before coming to this House as a teacher of children with special needs. I also spent eight years as a member of Liverpool education authority—much of that time as a member of the personal services sub-committee. More recently I spent a fascinating afternoon at the Myrtle Street hospital where the Liverpool speech therapy department is based. The Minister, whom I welcome to the Dispatch Box tonight, will recall that the unit is situated in a hospital just a stone's throw from the building which once housed the Liverpool Institute for Girls, the school where she herself was educated.
  During my visit to the speech therapy unit I met Sheila Wilson, Pauline Furness, Susan Rees and Margaret Bishop, four members of the Liverpool speech therapy team. I was immensely impressed by their work, dedication and commitment. I specifically suggested to them that they might write to the Minister and invite her back to Liverpool to see for herself the work that is undertaken there. Perhaps tonight she can give that undertaking. I am also glad to see the hon. Member for Birkenhead (Mr. Field) in his place; he has entered the Chamber on cue. I know that he will be hoping to catch your eye, Mr. Deputy Speaker, later in the debate to reinforce the arguments for improving speech therapy provision in Merseyside. Although he cannot be here tonight, I know that the hon. Member for Crosby (Mr. Thornton) also wishes to he associated with the arguments being put before the House.
  Those arguments might best be summarised in the following way.
  First, there is a national under-provision of speech therapy services. Those arguments are highlighted in the words of early-day motion 361 standing in the name of my hon. Friend the Member for Cambridgeshire, North-East (Mr. Freud) and now signed by over 50 Members from all parts of the House. It states:
  "That this House is gravely concerned about the wholly inadequate level of provision of speech therapists for specifically speech and language impaired children and young people; notes that the resources of the service have failed to keep pace with the increasing demands of an estimated three million of the United Kingdom population; and calls upon Her Majesty's Government to take urgent steps to ameliorate the situation."
  Mr. Michael Meadowcroft: Although this Adjournment debate is specifically about Merseyside, the early-day motion refers to the national position. Is my hon. Friend aware that in Leeds people are being transported across the city, often in delicate circumstances, because of the shortage of speech therapists? Parents are anxious that their children are not transported great distances to receive the special attention that they deserve. Is that also the case in Merseyside?
  Mr. Alton: My hon. Friend makes a good point about the overall provision for speech therapy throughout the

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  country. I am glad to see that my hon. Friend the Member for Cambridgeshire, North-East, who tabled the early-day motion, is now in his place.
  Apart from the debate on under-provision, there is an argument whether speech therapy is a service provided by the Health Service or the education service. The case of the Oxfordshire parent who recently lost her bid to force the local education authority to provide the speech therapy that her son had been shown to need eloquently demonstrates that the Education Act 1981 is a toothless wonder. That Act offers pious statements and ambitious hopes rather than the services that special needs groups require. The special twist in that case was that the severely speech disordered nine-year-old in question was assessed as requiring therapy that could be provided only by the local health authority—but that statement was binding only on the education authority. It is a classic demarcation dispute, and without the powerful statutory rights that parents enjoy in countries such as the United States, it leaves the needy without any clearly defined rights or services.
  Inadequate remuneration might be added to the list as the third argument that Merseyside speech therapists and others throughout the country would wish me to raise with the Minister tonight. Speech therapists are highly skilled and highly motivated, but poorly paid. A graduate entrant can expect to earn £6,096 a year. At the top of the speech therapy tree, a district speech therapist will not earn a great deal more than £13,000. A clinical therapist can work for 30 years, gaining a vast amount of experience, and still expect to earn only a little over £8,000. There is no serious career grade for clinical therapists, nor does the career structure of the profession reflect the degree of responsibility held by staff in their work.
  The recent 6 per cent. pay rise was described in the editorial of Therapy Weekly as "simply an insult". A good illustration of the position of therapists is highlighted in an advertisement in this morning's Guardian for a senior administrative secretary at a salary of between £11,371 and £16,136—more than double that which a graduate entrant to the speech therapy service could expect to earn.
  Perhaps this is not the correct time and place to try to negotiate a pay increase for speech therapists—yet it is one of the chief reasons why morale in the profession is so low. Levels of pay are, of course, an obvious factor in speech therapy provision.
  The wastage rate in the profession, as the Quirk report noted, is inordinately high. That is partly because there is a drain to other professions. As Mary Pletts, the coordinator of the speech sciences degree at the National Hospitals College of Speech Sciences, said in a recent letter to Ken Mack, a veteran campaigner:
  "This year I have heard that one or two of our graduates from a couple of years back have left the profession because of lack of money, career structure etc.—having found that what they have learned on the course has made them highly marketable for other professions…Unless things really improve for us in the profession I fear this small trickle could become a steady stream."
  The shortage of speech therapists and its effect on provision of the service can easily be illustrated by reference to figures from the Mersey health region. I hope that the Minister will seriously ponder these figures. Perhaps tonight she will be able to offer some advice to speech therapists in the Mersey region as to how they can
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  cope with their increasingly burdensome work load. She may even be able to suggest ways in which recruitment can be improved.
  In 1972, the Quirk report recommended that there should be six full-time speech therapists per 100,000 of the population. Speech therapists know that that is a serious under-estimate. The Under-Secretary of State and her predecessor admitted as much last year. Information pooled from throughout the United Kingdom shows that a ratio of 10 speech therapists per 100,000 is much closer to the mark. In 1972, Quirk also estimated that there were 325,000 communication-impaired people in the United Kingdom.
  We know also from the report by Enderby and Philipp in 1976 that the figure is, at a conservative estimate, probably 2·3 million. It is estimated in one early-day motion to be some 3 million. The Enderby and Philipp report broke that down into 1·5 million people with noticeable speech and language difficulties and 800,000 people with severe communication disorders.
  The average number of speech therapists per 100,000 of the population in the United Kingdom stands at 5·7 whole-time equivalents. The best ratios are in Scotland at 7: 100,000, in Northern Ireland at 6·6:100,000, South East Thames at 6·6: 100,000 and North West Thames at 6·4: 100,000. The lowest ratios are in the following regions: Wessex at 4·4: 100,000, Mersey at 4·7:100,000 and Yorkshire at 4·7:100,000. That is one league where Merseyside certainly comes bottom.
  Within the health authorities that comprise the Mersey region, a similar picture emerges. Under-establishment in Liverpool—part of the Mersey region—is 45·6 per cent., in the Wirral—no doubt the hon. Member for Birkenhead will touch on that—60·4 per cent., Crewe 45·7 per cent., Chester 63·6 per cent., Halton 58·6 per cent., Macclesfield 56·4 per cent., St. Helens and Knowsley 34 per cent., Southport and Formby—the North Sefton area—59·3 per cent., South Sefton 60·6 per cent. and Warrington 55·6 per cent.
  The South Sefton health authority has two speech therapist posts filled. Five have been vacant since April, and the position could worsen soon. One of the two speech therapists is to leave at the end of this year. The authority is trying to recruit, but to no avail. The post is not a very attractive prospect. There is a small establishment with poor career prospects. New therapists would have to work in complete isolation with an extremely high work load. New therapists would not have the opportunity to benefit from working with fellow professionals more experienced than themselves, nor would they have the time to keep up the academic side of their work. Surely the Minister can see the depressing effect that working in such circumstances would quickly have.
  Merseyside speech therapists told me during my meeting with them how truly demoralised they feel about the way in which the Government have responded to their plight. They are simply not well-meaning elocutionists, dressed up in white coats. They are part of a highly qualified graduate profession that, sadly, has a status usually accorded a Cinderella.
  I should not like to leave the House with the impression that all the pressure is coming from the therapists. Liverool alone needs another 40 therapists and could use 15 more tomorrow. The failure to provide these posts leaves parents and clients frustrated and angry. I know that they have been writing to the Secretary of State in

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  their hundreds. I shall quote briefly from three letters. I know some of the parents well. Some are constituents and others are people whose children I worked with when I worked with children who have special needs.
  A parent from the Walton area said:
  "I am a parent of a handicapped child who is three and a half years old. Since he's been coming for speech therapy, John has learnt to play and how to talk. He doesn't have temper tantrums now he can talk. We had to wait 5 months for an appointment. This was a long time. We were worried about John. It would have been more helpful if he could have been seen earlier."
  A lady from Tue Brook said:
  "I am the mother of a six year old child. Thanks to the expertise and dedication of our speech therapists my daughter was helped to develop from a sad, non-communicative introverted child to a happy, fluent and extremely chatty member of our family. Without their help this transformation could not have taken place. Their value must be appreciated financially or there will be no prospects for other such afflicted children."
  I should also like to quote from a letter sent to the Secretary of State by someone in Childwall, who said:
  "I waited 5 months for an appointment to see a speech therapist. I have been feeling helpless at not being able to communicate with my own son. After seeing a speech therapist it only took 6 months to have him talking correctly but 5 months were wasted at the beginning."
  It is a brave person who would question the value of adequately providing for a service that can turn a sad, non-communicative, introverted child into a happy and confident youngster.
  There is an urgent need to improve provision, remuneration and definition of clear lines of responsibility. There is a desperate need to boost morale and to produce more than the usual expressions of gratitude to speech therapists for the work that they do. The situation, as I have tried to demonstrate, is especially bad on Merseyside and I hope that tonight's debate will go a little way to convince the Government of the need to take urgent steps to improve matters.
  11.57 pm
  Mr. Frank Field: I am grateful to the hon. Member for Liverpool, Mossley Hill (Mr. Alton) for allowing me to participate in the debate. As it is the first time that I have faced the Minister across the Dispatch Box I should say how pleased I am to see her there. Like the Minister herself, I am one of her fans. I am slightly worried however, because one of the reasons why I am a fan is that I believe that she has the fight to control, as anyone can control, the Civil Service. Therefore, I am slightly alarmed that she has only one minder tonight. I hope that that is not a sign that the Civil Service thinks that it is getting on top of the Minister. The Opposition will judge how effectively she controls her Department by the way in which she responds to tonight's debate, not necessarily in what she says tonight but in the follow-up.
  The case has been eloquently put by the hon. Member for Mossley Hill. He has made the case for the under-establishment of speech therapists. That is clearly linked to their low pay. We have a Government who say that it is wrong to strike, bully patients or rough up the public, and many of us, in normal circumstances, would agree with that. However, there is another part to that argument. If any of us put forward those views, we have a duty placed on us to ensure that those who do have a genuine grievance can have that grievance met in a civilised way. I do not
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  believe that the Government are facing up to that issue. Under-establishment and low pay are particular grievances of speech therapists but there are general conclusions to be drawn from this case as to how we settle unfairnesses in pay in our society.
  I want to bring a message from some of my constituents who have benefited from the speech therapists. I must confess if I had not been lobbied I would not have been as well briefed about their work as I am. They came to my surgery and quietly put forward their case. They asked me to visit their surgery when I was next at the Arrowe Park hospital. I made a special visit. My constituents said that the speech therapists give them a passport back to life. We want to know from the Minister whether that passport will be spread to many more of our constituents and whether it will be spread by mere nice sounding phrases from the Minister or whether she has some effective action up her sleeve that may annoy some people in the official Box and beyond.
  11.59 pm
  The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I first congratulate the hon. Member for Liverpool, Mossley Hill (Mr. Alton) on his sucess in the ballot and on raising this important topic. I also thank the hon. Member for Birkenhead (Mr. Field) for his kind remarks. I have always thought that the best comment made about the hon. Member for Birkenhead was that he is the only real Tory that the Labour party has ever had.
  I had the privilege of learning about speech therapy some years ago when I was involved in the Health Service in Birmingham. I had the opportunity to spend a whole day with speech therapists in that city working in hospitals and the community. I entirely agree with the hon. Member for Mossley Hill. The range of their work is astonishing. They work not only with child stammers and stutters, but with children with a range of psychological and physical disabilities. Their work with adults has grown dramatically in recent years—not only with adults suffering from strokes or head injuries following accidents, but also involving people with laryngectomies. Speech therapists perform miraculous work to enable people without voice boxes to speak again.
  I must stress that health authorities have recognised the important and increasing role of speech therapists in helping patients of all ages and all kinds to overcome speech impairment. The result of that recognition is that speech therapy has expanded very quickly, at a greater average rate than the general average rate of increase in Health Service expenditure. I mean not merely to say that but to prove it.
  Expenditure on the Health Service since 1974 has increased nearly threefold. Expenditure on speech therapy has increased nearly ninefold in that period. In 1974–75 £2·9 million was spent on speech therapy. The 1985–86 figure—already a year out of date—was £24.7 million. As a result, it is possible to understand that the expenditure on speech therapy has grown very quickly. The results are reflected in the number of speech therapists employed in the service. In 1973 there were 1,461 whole-time equivalent speech therapists employed in the Health Service in Great Britain. By 1979, that figure had risen to 1,870. By 1985, there were 2,790. The rate of growth between 1979 and 1985 was 49 per cent. That is a

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  tremendous hike in the number of people employed in the service. In England, the increase between 1979 and 1985 was even greater at 55 per cent.
  Many of the concerns expressed by the hon. Member for Mossley Hill and the hon. Member for Birkenhead have been taken on board by local authorities. I venture to suggest very gently that, whatever difficulties the service may be experiencing now, they must have been much worse when there were fewer speech therapists under the control of a Government of a different political colour.
  The question has been raised as to whether speech therapy is education or health. As I have said, for some years speech therapists have been employed by the Health Service. The Wallace case has tested that to some extent, but I understand that that is up for appeal, so we may receive further information on that point. It is a long time since speech therapists were employed en masse in the education service. Given the increased importance of the adult therapy that they provide, it is appropriate that they should be in the Health Service. The bulk of patients and the greatest need will come from that area.
  One of the problems that is often raised is why they are not treated in the same way as such professions as physiotherapy, occupational therapy and others. The reasons for that are historical. I understand that speech therapists have always felt that they were a separate profession and they were concerned about losing their independence. They have always claimed that they are capable of independent diagnosis and the delivery of treatment. Therefore, they do not have to take referrals from doctors. As a simple matter of fact, the vast majority of referrals come from a doctor or another therapist if the case is referred back to a doctor for medical advice. However, that is the view taken by the speech therapists. As a result, they excluded themselves from the Professions Supplementary to Medicine Act 1960, and therefore speech therapy is not a registered profession under that Act. Until 1982 however, they were included with the other professions in the professional and technical A Whitley council for pay purposes. In 1983, the pay review body for nursing staff, midwives, health visitors and professions allied to medicine was set up. Speech therapists were again invited to take part but again refused to do so. While most speech therapists said that they were not opposed to the principle of a review body, they did not want to be linked with the other professional groups with whom they felt that they had little in common.
  That was the crucial decision. I understand that some speech therapists now regret it, but that is the situation as it stands. Representatives of speech therapists negotiate with the management side of the Scientific and Professional Staffs Council, which is an ad hoc arrangement, until the trade union side can agree on the formation of a new council.
  In 1985, speech therapists made a formal claim for pay parity with other graduate professions, and eventually received the same percentage increase as other staff groups, but the management side agreed to examine jointly with the staff side the arguments which bore on the graduate element of their claim. That claim is, as hon. Members know, still under way.
  There is one point about the comparison with graduate professions elsewhere. Speech therapy had for many years been a graduate entry profession, but not all speech
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  therapists are graduates. For historical reasons, speech therapists work 33 hours a week, whereas pharmacists, for example work 39 hours a week and psychologists' hours are unconditional. These elements have to be taken into account in the discussions.
  Mr. Archy Kirkwood: How many hours a week do Ministers work?
  Mrs. Currie: More than 33.
  Mr. Field: Not all of them do.
  Mrs. Currie: I understand that the figures that hon. Members have quoted for pay are accurate, but it is possible to go up to £15,000 a year and, at my estimation, there are only six people at the moment in the basic scale, which would probably give somebody less than £7,000. It remains true, however, that the largest single group of speech therapists are in the senior II grade which, at the moment, gives a salary with a minimum of £7,368 and a maximum of £8,676. I therefore do not dispute the sort of figures that are being offered.
  As for Merseyside, I have taken the opportunity today to discuss some of these questions with the chairman of the regional health authority, Sir Don Wilson. I am sure that hon. Members will join me in sending our warm congratulations on the award of his much deserved knighthood in the new year honours list.
  I think that hon. Members will agree that it has been the case for many years now that the level of service is a matter for individual health authorities, which must decide how to use their resources in a way which best serves the needs of their populations, That is what decentralisation is all about. Hon. Members are a little unfair in the way in which they use their figures because, whatever may be happening in a snapshot taken at the moment, recently Mersey has been doing rather better. The overall plans in the Mersey regional health authority, some of which have already been carried out, show very substantial improvements. The drift of the argument advanced by the hon. Member for Mossley Hill is accepted in Mersey. It simply cannot be done overnight. A substantial amount is already being done.
  I have here figures of staff in post full-time equivalents between June 1985 and September 1986, which are the most recent figures. As a simple matter of fact, between those two points in time, the total number of speech therapists employed in Mersey went up from 96·3 whole-time equivalents to 101·7 whole-time equivalents. That is an increase of five and half whole-time bodies in 18 months, which is a substantial improvement and is against a planned establishment of 110·5. That gap of rather less than 9 per cent. would match almost any level of vacancies anywhere else in the service. It is certainly not the enormous gap that was being described.
  In the Liverpool health authority, which covers the constituency of the hon. Member for Mossley Hill, the number of speech therapists has risen from 16 to 18 in post, which is a rise of two whole-time equivalents. If we go through the figures for the other health authorities we find that, from June 1985 to September 1986, Chester, Crewe and Halton have stayed roughly the same, Macclesfield's staff in post has doubled, Warrington has increased, St. Helens and Knowsley has stayed roughly the same, Southport and Formby has also nearly doubled and Wirral is up. The only one that has shown a sharp drop is South Sefton.

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  It is worth remembering that the figures for South Sefton should he looked at jointly with Liverpool, as the latter provides speech therapy services for children at Fazackerly and Walton hospitals, which are the administrative responsibility of South Sefton. Two of those districts, Warrington and St. Helens, offer provisions for their populations that are substantially above the national average. Two—Crewe and Macclesfield—are very close to achieving that level of provision. South Sefton alone is well down on the level of provision and that is substantially for the reasons that I have mentioned. Only four out of the 11 districts showed vacancies in September 1986. That is not a bad record.
  The chairman of the regional health authority has pointed out to me that, in March 1984, there were only 77 whole-time equivalent speech therapists in the region and now there are 110 funded and 102 in post. The numbers have risen from 77 to 102 in a matter of two and a half years and that is a remarkable increase. By 1994 the plan is for staff numbers to increase to 150. That is not only a remarkable achievement in terms of what the authority has already done, but shows that it has taken matters in hand.
  Mr. Alton: I am grateful to the Minister for giving way and also for the reply that she is giving. Obviously she is satisfied with the arguments that she is putting forward and, at the risk of accusing her of some complacency, I ask whether she would be prepared to take me up on my earlier invitation to come up and explain the situation to the therapists?
  Mrs. Currie: I am always interested to visit my home town, especially as the hon. Gentleman is my mother's Member of Parliament.
  Mr. Alton: I am sure that she voted for me.
  Mrs. Currie: I shall bear that invitation in mind.
  I asked the chairman of the regional health authority exactly what the authority proposed to do to ensure that it continued recruiting at the same rate as it has done. I should be grateful if hon. Members would recognise what the authority has already done.
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  The authority is considering the introduction of a supply register, effectively a bank of speech therapists, to cover temporary absences, including maternity leave. In this profession, as in any profession that employs a substantially large number of young women, such leave is a problem.
  The regional authority is considering supporting a number of training places at Manchester polytechnic through the sponsorship of degree level students. The districts already co-operate with the polytechnic in providing training placements for the training school's three-year ordinary and four-year honours degree courses in speech therapy.
  Speech therapy is an item on the agenda at the district health authorities chairmen's meeting on 22 January. They meet regularly and I am sure that that item has nothing to do with this Adjournment debate. South, Sefton, which is the authority with particular problems, is in active discussion with the regional health authority about how to overcome those problems. It is not satisfied that it has fully explored the possibilities through advertising and adopting a more flexible approach to posts. I am sure that those approaches will be valuable. I look forward to witnessing further improvements and I hope that the hon. Member for Mossley Hill will call another Adjournment debate in 1994 to congratulate the health authorities on what they have done.
  We consider that speech therapists are most important. Their excellent work is well known and the results are spectacular. Pay is under consideration. The alarm raised about the Mersey regional health authority is a little bit exaggerated. It has done very well so far and if it is to achieve further growth it will need to be imaginative in its recruitment and training. We must all hope that discussions of those matters will come to a successful conclusion.
  The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned accordingly at twelve minutes past Twelve o'clock.

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  Mental Illness
  Prescription Charges and Pharmaceuticals
  Prescription Charges and Pharmaceuticals
  Welsh Photographic Museum
  Welsh Photographic Museum
  Public Expenditure
  Public Expenditure
  National Health Service
  National Health Service
  Strip Searches
  Strip Searches
NORTHERN IRELAND
  Ulster Museum
  Ulster Museum
  Prescription Charges and Pharmaceuticals
  Prescription Charges and Pharmaceuticals
  Prisoners (Police Maltreatment)
  Prisoners (Police Maltreatment)
  Convictions (Statistics)
  Convictions (Statistics)
  Health Services
  Health Services
HOUSE OF COMMONS
  Welsh Grand Committee
  Welsh Grand Committee
SOCIAL SERVICES
  Housing Benefit
  Housing Benefit
  Drug Misuse (Campaign)
  Drug Misuse (Campaign)
  Ambulance Service
  Ambulance Service
  AIDS
  AIDS
  Mental Illness
  Mental Illness
  Prescription Charges and Pharmaceuticals
  Prescription Charges and Pharmaceuticals
  Hospital Beds
  Hospital Beds
  Benefits
  Benefits
  Food (Expenditure)
  Food (Expenditure)
  Children's Homes
  Children's Homes
  Private Medicine
  Private Medicine
  Junior Hospital Doctors
  Junior Hospital Doctors
  NHS (Expenditure)
  NHS (Expenditure)
  Hospital Waiting Lists
  Hospital Waiting Lists
  Brook Hospital
  Brook Hospital
  Severe Weather Payments
  Severe Weather Payments
  Mr. S. R. Edwards (Child Benefit)
  Mr. S. R. Edwards (Child Benefit)
  Drug Addicts
  Drug Addicts
  Diabetics
  Diabetics
  Equal Opportunities
  Equal Opportunities
  Board and Lodging
  Board and Lodging
  Consultants
  Consultants
  Dispensing
  Dispensing
  General Practice Finance Corporation
  General Practice Finance Corporation
  Abortions
  Abortions
  Health Authorities (Expenditure)
  Health Authorities (Expenditure)
  Advisory Committees
  Advisory Committees
  Benefits
  Benefits
DEFENCE
  Greenham Common
  Greenham Common
  Diego Garcia
  Diego Garcia
  Royal Arsenal
  Royal Arsenal
  Military Convoy (Accident)
  Military Convoy (Accident)
  Weapons (Research and Development)
  Weapons (Research and Development)
  Spearfish Weapons System
  Spearfish Weapons System
  Research and Development
  Research and Development
  Underwater Weapons Systems (Sales)
  Underwater Weapons Systems (Sales)
  Torpedo Weapon Systems
  Torpedo Weapon Systems
  Meteorological Office
  Meteorological Office
  Electromagnetic Pulse
  Electromagnetic Pulse
  Polaris Submarines (VLF Link)
  Polaris Submarines (VLF Link)
  Pindar and Hawthorn
  Pindar and Hawthorn
  Ballistic Missile Attack (Warning System)
  Ballistic Missile Attack (Warning System)
  Fylingdales
  Fylingdales
  Soviet Ballistic Missiles
  Soviet Ballistic Missiles
  AWACS
  AWACS
  Type 23 Frigate (Command and Control System)
  Type 23 Frigate (Command and Control System)
  Cyprus
  Cyprus

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chichester.
Lord Astor of Hever—Sat first in Parliament after the death of his father.

Royal Assent
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Gairloch Harbour Order Confirmation Act,

Shetland Islands Council (Ham Voe, Foula) Order Confirmation Act.

Reorganisation of Schools: Policy
2.37 p.m.
Lord Boyd-Carpenter: 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 policy in respect of proposals to convert secondary schools which operate a system of selective entry on merit into comprehensive schools.
Baroness Hooper: My Lords, under the Education Act 1980 the Secretary of State has a statutory duty to consider proposals for the reorganisation of schools on their individual merits. In exercising that duty he has regard, inter alia, to parental preference for retention of grammar schools, and to whether the established quality of the school is likely to be maintained.
Lord Boyd-Carpenter: My Lords, in thanking my noble friend for that encouraging reply, may I ask whether she is aware that the council of the borough of Kingston-upon-Thames, which is under Left-wing control, is proposing to abolish two of the best schools in England—the Tiffin schools? Can she confirm that her Answer means that this is not possible without the consent of her right honourable friend?
Baroness Hooper: Indeed, yes, my Lords. The Secretary of State is currently considering proposals under Section 12 of the Education Act 1980 for the closure of 10 grammar schools. Whether the schools which my noble friend has mentioned are among those 10, I do not know. Certainly if proposals are brought forward by a local education authority the consent of the Secretary of State is required.
Lord Avebury: My Lords, will it not be absurd if the Government prohibits the abolition of selection in a borough like Kingston when they have allowed this to happen in Right-wing boroughs such as Bromley?
Baroness Hooper: My Lords, the closure of any school is approved only when the Secretary of State for Education and Science is satisfied that it is unlikely to be able to sustain its established quality, and that the alternative provision is likely to be better. Decisions must be taken on the individual merits of particular proposals.
Baroness Cox: My Lords, is my noble friend the Minister aware that both research and the figures of the DHSS have shown that overall a selective system of secondary education with secondary modern and grammar schools performs better than a comprehensive system in terms of examination results? Will she therefore agree that it would be very sad to see more good schools closed?
Baroness Hooper: My Lords, evidence indeed shows a slight statistical correlation between selective schools and enhanced examination results, particularly at O-level. This will be taken into account by the Secretary of State in exercising his statutory duty to decide cases individually on their merits.
Baroness Seear: My Lords, when the noble Baroness says that the views of parents will be taken into account, will they be the views of parents who already have children in those schools or the views of parents who do not have children in those schools? Since it is a borough decision, should not the views of all parents be taken into account?
Baroness Hooper: My Lords, once proposals are published, I understand that the Secretary of State receives written objections from parents or from anybody else who wishes to write in. The views of all parents would therefore be taken into account.
Lord Nugent of Guildford: My Lords, is my noble friend aware that, as a past member of the Surrey County Council for some years, I can remember that the standing of the Tiffin schools in Kingston was so high that every parent in Kingston hoped that their boy or girl would get into one or the other of those schools?
Baroness Hooper: My Lords, parental preference is a very strong consideration in this matter, and I am sure that parents will take the opportunity to present their objections in this particular case.

Midwife Services within NHS
2.42 p.m.
Baroness Cox: 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 steps they may consider taking to alleviate the shortage of midwives willing to practise in the National Health Service.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, although there is a shortage

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of midwives in some localities, nationally the total number of qualified midwives employed in the NHS in England continues to increase and at September 1985 there were 18,260 wholetime equivalents; an increase of 14 per cent. since 1981. In recent years, there has been an encouraging increase in the proportion of new midwives who notify their intention to practise immediately following qualifications.
Baroness Cox: My Lords, I thank my noble friend the Minister for that partially encouraging reply. Will she agree that a commencing salary of only £6,700 and a possible maximum basic salary of only £10,800 is inadequate incentive to retain midwives in a profession whose responsibility it is to advise and care for all new parents and to supervise a significant proportion of deliveries of our country's babies?
Baroness Trumpington: My Lords, my noble friend will be aware that the remuneration of staff midwives and of midwifery sisters is determined in the light of the recommendations of the independent review body on the pay of nurses, midwives and health visitors. Each year, economic, financial and other information such as recruitment and retention levels are given to the review body by staff organisations, NHS management and the health departments. It is for the review body to make judgments. As the review body is even now engaged on reviewing the pay of nurses, midwives and health visitors, your Lordships will not expect me to influence its recommendations by expressing an opinion on current pay levels.
Lord Ennals: My Lords, will the noble Baroness have consultations with the Royal College of Midwives, which informs me that as of today it is more than 15 per cent. short on establishment and that the position is getting worse each year? Is she aware that for tutors in midwives' training schemes there is a shortage on establishment of 16·5 per cent., and that, again, the position is getting worse each year? Can she explain why her figures are so totally different from those of the midwives who presumably know better?
Baroness Trumpington: My Lords, I shall confine my reply to the question of midwifery tutors. The reported shortfalls of midwifery tutors in some parts of the country may still be partly due to a requirement introduced in 1981 that midwives must undertake an advanced diploma course in midwifery before being eligible to take the tutor training course. However, the Nursing and Midwifery Staffs Negotiating Council has reached an agreement on a more flexible grading structure for senior tutors and this may make a teaching career more attractive.
Lord Molloy: My Lords, does the noble Baroness agree that it is to be hoped that the review body will take into consideration the fact that midwives have to do extra studying, take extra examinations and pass them to become midwives but that there is no reflection of that endeavour in their pay? Does she agree that that is wrong, and also that the review body could be helped if it were to contact the Royal College of Midwives and the Confederation of Health Service Employees who are the real experts on this question?
Baroness Trumpington: My Lords, there are a number of groups within nursing and midwifery—and I am sure that the noble Lord, Lord Molloy, will agree on this point—which argue that their particular skills or responsibilities deserve extra financial or grading recognition. The jobs of midwives, health visitors, intensive care unit nurses, special care baby unit nurses, theatre staff, and so on, are difficult and demanding, as are all nursing jobs. The right way is not to look at any one group in isolation but to consider them all in the grading review. It will be for the review body to make recommendations on appropriate salary levels.
Baroness Lane-Fox: My Lords, in an attempt to redress what the Royal College of Midwives sees as an alarming shortage of midwives, will the Government agree to enable the setting up of direct entry midwifery training schemes and give that initiative the funds it needs to prime the pump?
Baroness Trumpington: My Lords, the advanced diploma in midwifery can be regarded as a means of enhancing a midwife's career prospects in clinical and managerial as well as tutorial fields. We consider that the responsibility for funding these courses should for the time being remain with health authorities.
Lord Morris: My Lords, may I ask my noble friend whether it is true that the birth rate throughout the country is falling rather than rising and that the need for more midwives will likewise fall rather than rise?
Baroness Trumpington: My Lords, I think that if my noble friend was having a baby, he would need a midwife.
Lord Cledwyn of Penrhos: My Lords, is it not the case that the shortage of midwives is increasing and that the average shortage is at present more than 15 per cent? What is the position in the rural areas of Britain compared with the urban areas? The noble Baroness will be well aware of the enormously important contribution made by the midwife in rural areas, especially where there is a great deal of travelling to do. Can she give an indication of what the comparison is?
Baroness Trumpington: My Lords, as I said in my original Answer, there are reported difficulties in recruiting midwives in some localities but there is no evidence that there is a national problem. The result of a sample survey of English health authorities for the review body for nursing staff, midwives and health visitors showed that at March 1985 only about 3 per cent. of whole-time equivalent funded posts for midwives remained vacant for more than three months, compared with the average of 2.5 per cent. for nursing and midwifery staff.
Lord Cledwyn of Penrhos: My Lords, the noble Baroness has given a great deal of additional information but she has not answered my question. What is the comparison between the rural areas and the urban areas? It is very important that she should make plain to the House that there is no greater shortage in the rural areas.
Baroness Trumpington: My Lords, I cannot specify the rural areas. As I originally said, we realise that there is a shortage in some places but I have not been given the information as to which places.
The Earl of Halsbury: My Lords, will the noble Baroness acquaint the review body with this point? On passing upon my lawful occasions along Notting Hill Gate last week, I saw an advertisement in these terms:
"Wanted—shorthand typists, salary £9,000 a year".
Baroness Trumpington: My Lords, I hope that perhaps the review body will read Hansard.
Lord Rugby: My Lords, is entry to midwifery confined to one sex only? If it is open to both sexes, I wonder whether the terminological word should not be "midperson" rather than midwife?
Baroness Trumpington: My Lords, if my memory serves me right, I think that I have met one male midwife.

Deer Farming
2.49 p.m.
Baroness Elliot of Harwood: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will recognise the contribution of deer farming to the rural economy and whether they will support the industry where possible.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the Government recognises deer farming as a viable and developing part of the agricultural industry of the United Kingdom. Support is provided under the farm capital grant schemes, which cover capital items such as fencing specifically required for deer farming.
Baroness Elliot of Harwood: My Lords, I thank the Minister for that Answer. Can he also say whether or not we are developing a good export trade to Germany and one or two other European countries?
Lord Belstead: My Lords, I do not have the figures for exports, but one attraction of deer farming is the potiential market, and there seems to be a long way to go before deer farmers approach levels at which potential markets will become fully satisfied.
Lord Hunt: My Lords, is the Minister aware that deer farming can do considerable damage to the environment, particularly to vegetation, if it is confined geographically to a fairly small area? Has the Minister by any chance seen the damage done on the island of Ramsey off the coast of Dyfed?
Lord Belstead: My Lords, I confess to the noble Lord that I have not seen that particular part of the British Isles. It is fair to point out that, although any form of census has been started only this year in
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Scotland and we in England and Wales will wait to see how that census goes as regards deer farming, we estimate that there are not more than about 200 deer farms country-wide. Therefore, at the moment we are talking about a comparatively small operation but one which, as my noble friend Lady Elliot said, has considerable potential.
Lord Northfield: My Lords, will the noble Lord confirm that his department is aware of the immense danger of distress being caused to these wild animals by putting them through a slaughtering process intended for domestic animals? The Minister's department has recently written to me about one such slaughtering operation in which ministry vets were present. Will he confirm that the practice of watching this sort of slaughtering, which is intended for domesticated animals, will continue to be very carefully supervised?
Lord Belstead: My Lords, there are two very important recommendations in the Farm Animal Welfare Council's report on deer farming to which the Government will shortly respond. One of them is that there should be specific licensing of slaughterhouses. The other is that there should be a code of practice for slaughtering. As I said, I believe that we should wait until the Government give their response to the recommendations, and that response will be given shortly.
Lord Nugent of Guildford: My Lords, is my noble friend aware that there is a problem with deer in the South of England? Is the grant for fencing available for those who do not want their gardens to be included in the grazing areas for deer?
Lord Belstead: My Lords, I regret that I cannot satisfy my noble friend on that question. I think the answer is no.
Lord John-Mackie: My Lords, will deer come under the restrictions for beef which were announced recently by the EC?
Lord Belstead: No, my Lords, because deer meat is not in surplus.
Lord Henderson of Brompton: My Lords, is there any research into the breeding of deer which leap the least high and taste the best?
Lord Belstead: My Lords, if there is, I am not aware of it. If I find that there is, I shall write to the noble Lord.
Lord Northfield: My Lords, will the noble Lord be kind enough to answer my specific question; namely whatever time we have to wait for the Government's guidelines, will he give an assurance that meanwhile any slaughtering will continue to be subject to supervision to avoid the danger of deep distress being caused to wild animals?
Lord Belstead: My Lords, as I am sure the answer given by the ministry to the noble Lord said, within the limits of manpower we shall do our best to satisfy him on that point.
The Earl of Shrewsbury: My Lords, is my noble friend aware that as agriculture slides deeper into over-production and recession many farmers are looking at deer farming to provide a substantial bolster to their depleting businesses? Does he accept that further support from the Government would be most welcome not only for the development of such enterprises but also for the marketing and development of associated products?
Lord Belstead: My Lords, I am most grateful to my noble friend for that question. As regards his final point, I am glad to say that the Ministry of Agriculture, Fisheries and Food, the organisation Food from Britain and the Highlands and Islands Development Board assisted the British Deer Farmers Association to set up and run its marketing co-operative—the British Deer Producers Society. As regards the future, which was the main thrust of my noble friend's question, the best encouragement that deer farming can have is the fact that, unlike so many other agricultural commodities, it is one which is not in surplus at present.

Public Information: Simplified Language
2.57 p.m.
Baroness Elliot of Harwood: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action is being taken by Government departments to produce public informaton in plain and straight-forward English.
Lord Belstead: My Lords, action is going forward on a number of fronts. Government departments are continuing their review of forms. Led by the Management and Personnel Office, this initiative has resulted in the abolition of over 15,500 forms and the redesign of a further 21,000 forms since work began in 1982.
Both the Civil Service College and departments provide training courses aimed at improving the standard of written communication. Although there is no central control over the way departments issue public information, the Management and Personnel Office issues guidance such as the booklet issued in 1984 called The Word is … plain English and guidelines on the design and control of forms.
Baroness Elliot of Harwood: My Lords, I thank my noble friend the Minister very much for that Answer, which is encouraging. However, does he not agree that there is a long way to go before the ordinary person can understand the way in which Bills are drafted, particularly Bills on the law and other subjects which have come before this House? I hope that the training will improve the way in which civil servants or others draft such Bills.
Lord Belstead: My Lords, as regards the drafting of Bills I ought to make two observations. First, in the view of the Government the drafting by parliamentary
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counsel is exemplary. Secondly, the problem is that in legislation in both Houses we deal with some very complicated affairs.
Lord Cledwyn of Penrhos: My Lords, while we welcome the information that the Government are implementing the recommendations of the Rayner Committee on government forms, will the noble Lord say why the Government are refusing to meet the officers of the Plain English Campaign to discuss legislation? Does not he agree that there is a need to introduce a little plain English into legislation and into the large volume of amendments which the Government have a tendency to introduce at inconvenient moments? Will the Minister say whether or not arrangements can be made for these officials to meet government representatives on this important subject?
Lord Belstead: My Lords, I confess that I was not aware of this particular problem. I must say that I am surprised. The Plain English Campaign had an exhibition in the House of Commons during the first half of last year which was sponsored by my right honourable friend the Minister for the Arts, Mr. Luce. I know that my right honourable friend has said in another place that he feels the campaign is doing a great deal to encourage the use of plain English. Indeed, I know of three government departments or organisations which have won plain English awards from the campaign and feel proud to have done so. I think what I must do is to draw the attention of my right honourable friend, who is responsible for the Management and Personnel Office, to what the noble Lord, Lord Cledwyn, said.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that his enthusiasm for the clarity of expression used by parliamentary counsel is not universally shared?
Lord Belstead: My Lords, of course, there are problems occasionally in Parliament. I can think of some plain English expressions which would not be parliamentary.
Lord Grimond: My Lords, is the noble Lord aware that there will be very wide support for the Question put by my noble kinswoman Lady Elliot of Harwood and, indeed for the comments of the noble Lord, Lord Cledwyn? Does not the noble Lord the Minister remember that the noble and learned Lord, Lord Simon, said not so long ago in this House that he was completely stumped by the drafting of a Bill? If the noble and learned Lord is stumped, how can the public be expected to interpret such Bills? Will the noble Lord press on with making legislation more intelligible?
Lord Belstead: My Lords, I am sure that both the Government and the advice which parliamentary counsel give to the Government will try to achieve that objective.
Lord Simon of Glaisdale: My Lords, does the noble Lord recollect that the Renton Committee reported widespread concern at the lack of simplicity and clarity in the drafting of Bills, and that very little has been done in pursuance of its recommendations?
Lord Belstead: My Lords, I very rarely disagree with the noble and learned Lord, but certainly whenever there is a slight complication in the drafting of legislation in this House someone always refers to the report of my noble friend Lord Renton, and quite rightly so, too.
Lord Peyton of Yeovil: My Lords, may I ask my noble friend whether he is aware that, when he uses the word "exemplary" and applies it to the language contained in parliamentary Bills, he is earning for his own good nature and charity more respect than for this judgment? When he finds the time, I wonder whether he will inform the House about the awards which have been given to certain government departments for their use of plain English? One wonders what canons of judgment were employed and who were the judges. In fact, curiosity becomes quite overwhelming.
Lord Belstead: My Lords, so far as the first part of my noble friend's question is concerned, at the end of the day the legislation which is introduced into either House of Parliament is the responsibility of the Ministers in the departments concerned, and if it is the case, as the noble and learned Lord, Lord Simon, the noble Lord, Lord Grimond, and my noble friend suggest, that legislation is sometimes not as easy to understand as it might be, I must stick to the point that I have made; namely, that I believe that the advice that Ministers receive from parliamentary counsel is excellent and that if there are any faults then they are ours when we sit on a Front Bench in either House.
As regards the plain English awards, let me just say to the House that the Department of Employment won a plain English award last year for a leaflet called Opening More Doors. It was desigend to give useful information to young persons and unemployed people, and it also contained some absolutely excellent advice for disabled people. There is an excellent leaflet called A Visit from VAT Officers, in which the Customs and Excise reassures traders who are being inspected for the first time, and a plain English award was won for that. Thirdly, the Department of Health and Social Security has received—I think it was last year—one out of three awards for plain English for a leaflet called Help With the Cost of Glasses.
Lord Mishcon: My Lords, while congratulating the Minister on the simplicity, conciseness and clarity of his own language at the Dispatch Box, will he encourage his colleagues to urge their own departments to word the replies given at Question Time with equal simplicity, conciseness and in plain and straightforward English?
Lord Belstead: My Lords, we shall try.
Lord Diamond: My Lords, quite apart from the question of parliamentary draftsmen, for whom, after years and years of experience with Finance and other Bills, I have nothing but praise, does the Minister think that there is something to be said for this House accepting the responsibility for maintaining the purity of English? Have the Government in mind any ideas for setting up a committee to consider the possibility of how we should best achieve that aim?
Lord Belstead: My Lords, that is a most interesting suggestion and I shall draw it to the attention of my noble friend the Leader of the House.

Business
3.4 p.m.
Viscount Davidson: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Consumer Protection Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Second Reading of the Gaming (Amendment) Bill will be taken.

Coal Industry Bill
Brought from the Commons; read a first time, and to be printed.

Reverter of Sites Bill [H.L.]
3.5 p.m.
The Lord Chancellor: My Lords, I have it in command from Her Majesty the Queen and from his Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Reverter of Sites Bill, have consented to place their respective prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
In my speech at the Second Reading I explained the purpose of this short and technical Bill. I am very grateful to the noble and learned Lord, Lord Elwyn-Jones, who spoke in support of the Bill at Second Reading, and to all your Lordships. No amendments were put down in Committee, the Order of Commitment was discharged, and I now ask the House to give the Bill a Third Reading. I beg to move.
Moved, That the Bill be now read a third time.—(The Lord Chancellor.)
Lord Elwyn-Jones: My Lords, the Bill was welcomed on all sides of the House on Second Reading, and at Committee stage. As the noble and learned Lord has indicated, it remedies problems arising under various statutes of the 19th century—whether better drafted than contemporary statutes, I know not—allowing individuals to donate land for charitable purposes on the basis that if the land ever ceases to be used for the stated purpose it will revert to the donor or his successors.
We on this side of the House and, indeed, Members on all sides of the Chamber welcome the Bill. I recently received from the Law Society some useful queries about the Bill, and I have also had the advantage of receiving the comments of the Lord Chancellor's Department upon them, which, if I may say so with respect, I find acceptable. In those circumstances, I welcome the Third Reading of the Bill.
Lord Denning: My Lords, I, too, should like to join in the welcome given to the Third Reading of this Bill, because it affects the school that I attended 80 years

715
ago in our little town of Whitchurch. There, under the School Sites Act, the school was built in 1841 and continued as a school until 1973, when a new school was built on the other side of the town. The question then arose as to what would happen to the site of the old school. There was no solution available at the time, because no one knew the owner to whom the site would revert, though the old deeds were obtained and it was seen that there would be a reverter to the owner under the 1841 Act. How was that to be dealt with?
As far back as 1981 the Law Commision produced an excellent report putting forward some solutions, and now comes this Bill, which, if I may say so, is admirable in every way. I have studied it in relation to its application to our little school, and I think we shall have no difficulty in the future. The vicar will become the trustee. He will have a scheme made by the Charity Commissioners, and then I hope that all our problems will be solved. At all events, I thank the Law Commission, the parliamentary draftsman and the Government in particular for enabling this Bill to be brought forward, and for so solving our own little problem.
The Lord Chancellor: My Lords, I am grateful to both noble and learned Lords, and to the parliamentary draftsman for the plain English in which the Bill is couched.
On Question, Bill read a third time, and passed, and sent to the Commons.

Consumer Protection Bill [H.L.]
3.10 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): 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 Lucas of Chilworth.)
Lord Williams of Elvel: My Lords, before the Question is put, perhaps I may draw the attention of your Lordships to the fact that there has been no Motion to instruct the Committee on the order in which the Bill will be considered. In view of the fact that Schedule 1 clearly relates to Clause 6, Schedule 2 to Clause 13 and Schedules 3 and 4 to Clauses 36 and 48, it would have been for the convenience of the Committee if such a Motion had been made. I should be most grateful if the Minister could explain why no such instruction has been put forward by the Government.
Lord Lucas of Chilworth: My Lords, we have prepared ourselves for these debates on the basis that we would proceed through the Bill in the normal way, as it is printed, and accordingly we would not expect to come to amendments on Schedule 1 for some time. Even if Schedule 1 were to be grouped, for example, with Clause 6, parts of the Bill connected with Part I would still come up later; for example, the definition of "supply" in Clause 46 is important to Part I, as is Clause 50(6) which relates to liability for products
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produced before the Act comes into force. By taking schedules with their clauses we would not have achieved the aim of taking all connected matters together.
I should make one further point as it is my responsibility to propose a Motion to your Lordships' House giving instructions to the Committee. We did not feel that that was necessary for the reasons given, and neither was it put to us by any other noble Lord that it might be for the convenience of the House if it were so done. We therefore resorted to the usual practice.
Lord Williams of Elvel: My Lords, I got in touch with the noble Lord's private office on Friday to ask whether such an instruction had been prepared and was coming. It seemed to us that that could be for the convenience of the Opposition. I explained to the noble Lord's private office why it would be so; therefore I am not prepared to accept that criticism.
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [Purpose and construction of Part I]:
The Chairman of Committees (Lord Aberdare): I should point out that if Amendment No. 1 is agreed to I cannot call Amendment No. 2.
Lord Allen of Abbeydale Lord Allen of Abbeydale moved Amendment No. 1:
Page 1, leave out lines 7 and 8.
The noble Lord said: In rising to propose this amendment, I should like to speak also to Amendments Nos. 4 and 13, the first two being, as it were, preliminary to the substantive amendment contained in Amendment No. 13. It will be seen that this group of amendments has attracted some support from all parties.
The main purpose of Part I of the Bill, implementing as it does an EC directive, is to make producers strictly liable for injury arising from a defect in their product without the need to prove negligence. The EC directive allows, but does not require, an exception to be made from that main purpose in respect of agricultural products which have not undergone any initial processing. The Government have decided to adopt that exception. For some reason the Bill does not follow the directive's wording, and in the unlikely event of these amendments not commending themselves to the Committee we should no doubt be discussing the drafting a little later. Far and away the best course is to do away with any special exemption for agricultural products, and that is the purpose of this group of amendments.
The Royal Commission on Civil Liability and Compensation for Personal Injury, the Pearson Commission, of which I had the privilege of being a member (I think that I am the only surviving member of the commission in either House) considered this matter with some care, and with no dissentients came to the firm conclusion that there should be no departure from the doctrine of strict liability when it came to what we ate. Nothing I have so far seen or heard leads me to think that that conclusion was

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wrong. If a person suffers harm because there is something wrong with the food he has bought, why should not those who grew, farmed or caught it be in precisely the same position as suppliers of any product which causes harm to the individual because of some defect in the product? That is the general principle which is enough of itself to justify these amendments. If we are to have a Consumer Protection Bill let us protect all consumers.
In addition, some practical problems arise from the drafting of the Bill. Clause 2(4), the clause to which Amendment No. 13 relates, provides in effect that the exemption for agricultural produce does not apply if it has undergone an industrial process, but the Bill is silent on what constitutes an industrial process.
On Second Reading, one or two Members of this Chamber gave some examples and asked whether they involved an industrial process; but on that occasion, alas, answer came there none. Perhaps I may try again. What about slaughtering and butchering, the use of hormones, antibiotics and other additives in feedingstuffs, and the pasteurisation of milk? Do any of those amount to being an industrial process? Let us take fruit and vegetables. Does the use of pesticides and fertilisers, which can, I fear, occasionally hit the wrong target or be used in the wrong concentration, constitute an industrial process? Is the freezing of chickens and peas for the supermarket an industrial process? If it is not, what is it?
I suspect that there may be less argument about those activities being regarded as initial processes, as the directive has it, but we are at the moment considering what is in the Bill. I hope that the Minister will feel able to go rather further than he went on Second Reading and tell us what are the Government's views on those issues and how confident he feels that the courts will uphold those views, whatever they may be.
Only the other day the Court of Appeal had to form a view in a particular context about the meaning of the word "process" in the Factories Act 1961. If the lawyers are still arguing about the meaning of a word in an Act passed a quarter of a century ago, what a prospect is opened up for argument about the meaning of this provision in the present Bill. It would be much better to have it out.
On Second Reading, only two arguments were advanced for retaining those provisions. The first was put forward by the noble Lord, Lord Stanley of Alderley. He pointed out that there are numerous provisions requiring producers to maintain certain standards. In his disarming way he invited us to have a look at some of them. I have responded to that invitation. I have looked at them, and I am only confirmed in my view that they have very little to do with the provisions that we are now discussing. The various enactments which he cited provided in general that those who offended against them—to take just one example, leaving too much pesticide in a crop—are committing offences. However, the purpose of Part I of this Bill is entirely different. It is to give a civil remedy to persons suffering injury as a result of a defective product without their having to prove negligence. I am afraid that the enactments to which the noble Lord referred are simply not directed to the
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question of compensation for the individual who suffered damage.
The second argument was advanced by the Minister, who said that there were several reasons for the course on which the Government were set. However, the only one he vouchsafed to us was that he knew of no other member state which had indicated that it would include liability for primary agricultural products. It seems slightly odd that when in due course we come to development risks, we shall no doubt be told that we should ignore what is going on in other countries and stick to our own line, whereas in this context we are told that it is vital to keep in step with all the others. If all the other countries are set on going one way, one wonders why the provision for derogation in Article 15 of the directive was ever included. The truth, I suspect, is that not all the countries have made up their minds. We certainly know that food processors in some of the other countries are very unhappy about it. Perhaps, for once, it might not be a bad idea if we set an example.
I am not naive enough to think that the parliamentary draftsman—about whom we have already heard a good deal today—will accept that the amendments are correctly drafted. I am indeed conscious of a technical difficulty. However, I hope that the Minister will not make too much play with possible difficulties of drafting since, if need be, all these details can easily be sorted out at a later stage. The question that I invite the Committee to settle today is quite simple and straightforward. Do we want the remedies provided by the Bill for the consumer to apply to primary agricultural products, or do we not? I suggest that the arguments point clearly to the conclusion that they should apply. I beg to move.
Lord Morton of Shuna: As I hope was made clear on Second Reading, we on this side support the amendment. One of the main reasons given in the consultative document for excluding primary agricultural products was the potential difficulty in tracing the chain of suppliers in order that liability might attach to the original producer. This is not a sufficiently good reason for such an exclusion. Assuming that the retailer or "own brander" could not or would not identify the original producer, the consumer under Clause 2(3) would have few problems since he would bring his action against the retailer or the own brander.
The fact that producers and retailers might have difficulty in apportioning responsibility among themselves is of no concern to the consumer. The very difficulty in tracing the line of producers and suppliers renders it almost impossible for a consumer, as opposed to a party to a contract, to identify the negligent producer—quite apart from finding evidence of the negligence. The department's argument on the difficulty of tracing, far from supporting exclusion of agricultural product, militates against such an exclusion.
The department also argues that primary agricultural products are particularly prone to hidden defects caused by environmental factors. If that were a valid consideration, primary agricultural products would have been excluded from the Sale of Goods Act. But they are there—in the 1979 Sale of Goods Act. Why there should be a liability under the Sale of Goods Act

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but not under the product liability legislation seems entirely illogical. It means that if I buy something from a primary agricultural producer who has not subjected the article to a process, I can sue. But if I and my wife share it, my wife cannot sue for any damage. That seems totally illogical.
The provision of undergoing an industrial process adds to the confusion of this legislation. It will give rise to a terrible amount of litigation. I suppose that as a lawyer I should be in favour of that. But I should have thought that clarity is something we all want in legislation. For example, have peas picked by one of those large machines in a field been subjected to an industrial process? What is meant by "industry"? I would remind the Committee that the Question asked today by the noble Baroness. Lady Elliot, referred to deer farming as an industry—as it certainly is. Agriculture is an industry. Is that what is meant by "industrial processing", or does it mean something different? The animal that has been slaughtered for meat has certainly been subject to a "process". Is the idea that it is only the slaughterer and not the producer of the animal who is to be responsible?
The noble Lord, Lord Allen of Abbeydale, referred to a recent case on a definition of "process". If my recollection is correct, the Court of Appeal said that a process in a factory had to be a repetitive process. It may be that the last has not been heard of that decision. However, earlier decisions on the Factories Act relating to the word "process" merely defined it as "any activity". Assuming agriculture to be an industry and a process to be any activity, it is very difficult to see that the removal of any crop from the ground is not a process and an industrial process.
One of the difficulties is that the words "industrial process" appear only in the preamble which refers to processing of an industrial nature, whereas the directive in Article 2 refers to,
"products of the soil, of stock-farming and of fisheries, excluding products which have undergone initial processing".
"Initial processing" is an equally difficult phrase to be interpreted. If we are to have this exception, it is necessary to consider Clause 1(2)(c) of the Bill which says:
"in the case of a product which has not been manufactured, won or abstracted but essential characteristics of which are attributable to an industrial or other process … (for example, in relation to agricultural produce)".
As I understand that—and no doubt I can very easily be wrong—it means that the essential characteristics of the article subjected to a process has changed the product in some way. But I have looked in vain for any suggestion of this idea in the directive. The noble and learned Lord the Lord Advocate at Second Reading said that the purpose of this part of the Bill was no more and no less than to implement the directive. The essential characteristic in that phrase is certainly different from anything in the directive, and I should be very interested to see how it is justified.
This amendment, which leaves out the primary agricultural produce, has strong support from numerous organisations, many of which will have written to Members of the Committee and there is no point in listing them. However, the whole purpose of the Bill is to protect the consumer. Therefore it seems
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odd to exclude food from the protection. Obviously, in various senses of the word, food is one of the things which the consumer consumes.
3.30 p.m.
Baroness Robson of Kiddington: I rise to support this amendment, and I rise to support it as a farmer. Like all farmers, I am fully aware of the various Acts and regulations in existence to protect the consumer from the dangers of additives in the food chain. I am also fully aware that if I do not obey these regulations I can be subject to criminal proceedings. The farming community is no more and no less criminally inclined than the average person in this nation. Inevitably there will be the occasional farmer who tries to cheat the regulations. When discovered he is subject to criminal proceedings, but the person injured by his act has no redress unless we pass these amendments. That seems to me to be quite wrong.
The noble Lord, Lord Allen of Abbeydale, spoke about the lack of definition in the Bill as to what is meant by "an industrial process". I agree that it has to be defined much more clearly than it has been. I also believe that food has been excluded from the Bill because it is claimed that it is almost impossible to pin-point the culprit in the distribution chain of agricultural produce. In my view that therefore puts the whole responsibility for compensation on the processor of the product, and I believe that that is unfair.
There are regulations, for instance, preventing a farmer from harvesting any tomatoes, salads and fruit immediately after having sprayed them with insecticide. Why should a farmer who disregards these regulations be protected against prosecution for compensation? In that case the culprit could easily be pinpointed. I also claim that that kind of treatment of produce definitely constitutes an industrial process.
In animal husbandry we all know that farmers use various antibiotics to treat their animals. For instance, a farmer who happens to have cows suffering from mastitis will treat the udder with antibiotics. In law he is forced to pour away the milk from that animal for 48 hours because it is not good for human consumption. I am told by the trading standard officer in East Sussex that once a week, or at least once every 10 days, he goes round the farms and tests the milk from each farm. On approximately three of four occasions last year farmers were prosecuted for contravening the regulations. I was also told that on the first, or perhaps the second, occasion when this was discovered the farmer would be warned. It is estimated that over the country there are 50 or 60 prosecutions a year of farmers who have disobeyed the regulations on antibiotic treatment of the udder.
It is right that the farmer will be prosecuted, that he will face criminal prosecution. However, the consumer who happens to have consumed the milk with these antibiotics present in it, and who is therefore likely to have become resistant to antibiotics up to a point, may suffer when treated with antibiotics for some special illness, and that person has no claim against the culprit in the farming community. I believe that that is wrong.

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I should also like to raise the question, which has not yet been raised, of irradiation of certain products to lengthen their fresh appearance. None of us as yet knows what effect this process has on the human food chain. All I know, and I am sure all that other Members of the Committee know, is that the things I have described are industrial processes. Therefore in my view agricultural produce should not be excluded from the present Consumer Protection Bill.
Lord Denning: Perhaps I may say a few words in support of this amendment. We are dealing with defects in products which are defined as follows:
"if the safety … is not such as persons generally are entitled to expect".
Therefore if the product is in any way unsafe for people to consume, to eat or to use, there is a defect.
What is the responsibility of the producer, the person who puts that article out for consumption? Already in the law of contract as regards the sale of goods the person who sells such goods to the customer is himself liable, and strictly liable in contract, because the goods are not reasonably fit for the purpose. There is the strict liability in our law of contract. There is also the law of negligence. If the defect is there and the product is not reasonably safe to use, that is prima facie proof of negligence and there is at once a case. Already the law goes quite far in making the producer liable for the defects.
The Law Commission, under my good and dear friend Lord Pearson—and I am glad to see that my noble friend Lord Allen of Abbeydale is present—after full inquiry considered that there should be strict liability. Is this not right? Does this not apply to agricultural products as well as to any other product? If there is a defect and the product is not reasonably safe to use and a person is harmed by it, then he ought to recover damages. On principle I would say that agricultural produce should not be excluded.
However, I go further and turn to insurance. Surely all farmers and producers already insure against their liabilities, which I have already mentioned, in contract or in negligence. If they are further liable, then strictly I should imagine that the extra premium would be very small indeed, and when passed on to the consumer would be practically nothing. Insurance would be easily obtainable in respect of strict liability, and I should imagine that it would be only a fraction above the existing insurance premium. All those in favour of strict liability as provided should be subject to this exception. As a lawyer I must say that I can see this exception giving rise to no end of legal problems and uncertainties.
The whole question is whether or not the product is produced at a time when it is exempt, when it had not undergone an industrial process. I can see no end of argument about those cases. My noble friend Lord Allen gave a number of illustrations as to whether or not hormone injections and various treatments are an industrial process. The courts would have no end of cases to decide before a solution could be obtained. The present proposal to exempt agricultural products gives rise to far more legal difficulty. The simplest and best solution would be to include this amendment and put agricultural products on the same footing as
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products which have defects and which are not reasonably safe. I support the amendment.
Lord Peyton of Yeovil: I have managed to keep my enthusiasm for modern legislation under fairly strict control, and that applies to the attitude with which I face this Bill. It is so easy to suggest that protection of the consumer must be a good thing, and anything which can possibly be claimed to further the protection of the consumer is passed almost without question.
There is a grave danger that when such legislation is introduced people find it too easy to forget that the person who will ultimately pay for such protection is the consumer. The consumer could pay in two ways. He could pay either in terms of a higher price, or of non-availability of the commodity or product which he wishes to buy. I also note that when such proposals as we are considering now are put forward, there is a tendency to ignore, almost wholly, the provisions of the existing law. I very much hope that when my noble friend replies he will take a few moments of noble Lords' time to comment upon how far the consumer is already protected against the dangers which are envisaged by those who propose this amendment.
I hesitate to differ in any way from the noble and learned Lord, Lord Denning. The noble and learned Lord referred to the existing law, and I wondered whether he was suggesting that the existing law has shown itself or been shown to be unsatisfactory in any particular respect. With great respect, the noble and learned Lord referred rather lightly to the question of insurance. Not only here but particularly in the United States the very strict view which courts have recently taken about producers' liability has not just added to the costs of insurance in a minor way, but has multiplied the costs very considerably. In some cases the costs have simply made insurance unavailable. I am able without much difficulty to keep under very strict control my enthusiasm for measures such as we now have before us, and in particular for the amendment which we are now considering.
In those circumstances, I am further influenced by the the fact that, as I understand it, no other country in the Community is likely to go so far as to propose strict liability for unprocessed agricultural produce. I very much hope that noble Lords will not be swept away by comforting, seductive arguments of the kind which we are likely to hear in favour of any amendment such as this.
3.45 p.m.
Baroness White: I have been most interested to listen to some of the legalistic difficulties which this Bill and the amendment present. I am not a lawyer but I am a housewife. I have tried to translate the provisions of the Bill, and what would happen with the amendment, to my position as someone who goes to mid-Wales whenever possible and buys fruit and vegetables from market stalls, roadside stalls, Women's Institute stalls and small shops in the small market towns of mid-Wales, Machynlleth, Llanidloes, Brecon, or Crickhowell—I could almost sing the names!

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I wonder to what degree we have to go in protecting all consumers from everything. I am entirely in favour of strict regulation and more stringent inspection of the innumerable provisions which we already have. I did not have the pleasure of listening to the noble Lord, Lord Stanley of Alderley, on Second Reading but I have been provided with a list of regulations. We have regulations for egg standards, honey, cream, butter, cheese, bread and flour, meat, milk and dairies, drinking milk, fruit juices and fruit nectars as well as the more broadly based major legislation to which I believe the noble Lord then referred.
As I have said, I buy my fruit and vegetables from roadside stalls and in small shops in market towns. I wash the lettuce. Is there anything really wrong in that? We may reach a stage under privatisation of water when it will be so expensive that washing a lettuce will be a luxury. Until we reach that point, in any well regulated household salad vegetables are washed. That is not entirely a foolish suggestion to make. An example of what might happen has been passed round to some of your Lordships: that if lettuce is not washed some unlucky person might consume a small quantity of slug pellet. That indeed is very undesirable. Of course, the alternative might be to swallow the live slug, which would be disagreeable.
Caveat emptor surely still has some meaning. When one deals with game, which, rather curiously, is included in the Bill, what would be the position concerning lead pellets? If one is prepared to eat some bird or other creature which has been shot—and I am afraid a good deal of game suffers that fate—and one then breaks or even chips a tooth on a pellet, what does one do about that? I should have thought that would give the lawyers plenty to think about.
I cannot help feeling that we are raising difficulties for what I might call the small, informal producer. I am thinking of some of the small shops in Machynlleth. Several people who I used to know when I lived in that area would bring in a net of sprouts, and then another net of sprouts would come from somebody else, and they would all be mixed up in the shop. One can have reductio ad absurdum in this matter.
When it comes to really serious matters, I have a great deal of sympathy with what the noble Baroness, Lady Robson, said about the possible risks of antibiotics in cases of mastitis and so on. But by the time that has happened the milk gets all mixed up, even though the bottling will probably be an industrial process anyway. Is that a situation which a consumer could, no doubt on medical advice, trace back to a particular action, a particular cow, and decide whether it was Daisy or Rose? On the practicalities of the situation, are we not going perhaps unnecessarily far, in view of the fact that we have other regulations which could, and I believe should, be more stringently applied? Attaching strict liability to absolutely everything in life seems to me to going rather far.
Lord Stanley of Alderley: The noble Baroness makes me break cover over slugs. I have often eaten them and I am still alive, although it might affect my appearance.
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To be serious, this amendment, as the noble Lord, Lord Allen, brought out, would mean that primary producers would have strict liability for their produce, much of which is highly perishable. I tried to explain at Second Reading why such an arrangement was (a) impractical, (b) unnecessary, and (c) unfair to British producers, but obviously I have failed so to do. Indeed, the noble Baroness, Lady Nicol, said that I should come armed with details to defend my case—and I quote. She asked for it and other Members of the Committee will have to listen.
The amendment is impractical because, to take up two points made by the Law Commission and the Scottish Law Commission, primary producers are not in the best position to exercise control over the quality of their product. It would be better to try the Almighty. Secondly, primary producers cannot conveniently insure against liability. This was a point made by my noble friend Lord Peyton a moment ago and it is reinforced by the paperwork I have here from the Association of British Insurers, as I think it calls itself. The noble and learned Lord, Lord Denning, said that we could insure. If he can persuade the insurers to do it cheaply, he will be as good a man as I know him to be, and I hope he will take it up with the Americans at the same time.
It is also impractical because, as I said, our products are highly perishable. For instance, in the last few days I suspect many potatoes will have been frosted through no fault of the merchants or shopkeepers. This amendment—and this is the crunch of it—would put the blame on the producer and it would be up to the producer to prove that his product was sound when it went there. Indeed, I call this French law. I should be guilty until I proved myself innocent, and it would be very difficult to do so in this case.
The amendment is impractical because most agricultural produce is delivered in bulk. Under existing contract law—and the noble and learned Lord, Lord Denning, made this point—I accept responsibility for my produce when it arrives, but once it has been bulked up, surely the Committee must see that any liability to be proved aginst me will be an absolute lawyer's paradise—one of the reasons why I have sent my youngest son into the law!
The amendment is totally unnecessary. Farmers are littered with legislation, as I said at Second Reading and as the noble Lord, Lord Allen, was kind enough to point out. There are 22 statutes, if not more, which protect the public. I say one thing about this to the noble Lord, Lord Allen, and indeed the noble Lord, Lord Morton, as far as industrial processes are concerned. First of all, he brought up the question of slaughter, and I come back to contract law. My responsibility is to the slaughterhouse. After that it is up to the processors. I think that answers that question.
What is an industrial process? That will be decided by the European Court. It is not just a question of what an industrial process is as far as agriculture is concerned. The legislation will apply across the board, as I understand it, so it is for the European Court to decide that. The noble Lord, Lord Morton, mentioned the Sale of Goods Act. If I may say so, yes, of course we were included under that Act because in that instance it would be a direct case against me, the

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producer. Under this amendment, however, there will have to be an individual to trace, and I suggest that that is very difficult. As far as redress for criminal action is concerned, I thought that if I committed a criminal act under common law I should be very much to blame.
I am sorry to go on longer than I normally do, but I shall quote just one Act, as I did last time, because it is an important one, the Food and Environment Protection Act. We discussed this at length in 1985. I fully appreciate that many noble Lords here today, including the noble Baroness, took part in that debate, and they will have carefully studied the Act and its provisions. But perhaps the Committee will allow me to give two examples of where it has worked extremely efficiently within the last six months or so.
First—and I am speaking personally here—I and many other sheep producers were stopped this year from selling lamb in order to protect the public because of the Chernobyl disaster. Those restrictions were brought into force instantly; they were accepted and rigidly enforced. I suggest that such action was 100 per cent. more effective than the amendments facing the Committee today. Anyway, why double-legislate? That is what this amendment would do. I have heard many noble Lords, including my noble friend Lord Mottistone who supports this amendment, say that we have too much legislation, and here he is bringing in more and double-legislating.
The other matter covered by the Food and Environment Protection Act is the control of pesticides. Members of the Committee who have received the brief of the Consumers' Association containing a little story about a husband and wife will realise that the association in that instance was incorrect because it failed to appreciate the powers given to the Minister under the Act.
Finally, this amendment would be unfair to the British producer. As has already been said by my noble friend Lord Peyton, we shall be the only EC country not to derogate. The effect will be to create difficulties of movement between member states. It will add to British producer costs and it will give our Continental neighbours an undue competitive advantage. I am proud to be British. Even though I have no particular edge against my French cousins—because I came from there when the Conquerer came over—I wish to be British first and I do not wish them to have an edge over you.
I beg this Committee to appreciate the desperate situation that faces British agriculture and the rural economy today. This amendment will add yet another straw onto our backs, another straw I do not wish to have. If Members of the Committee support this amendment, they will, albeit in an indirect and they may think minor way, be aiding and abetting more rural unemployment, more closing of village schools and more closing of village churches. I hope the Committee will not accept these amendments.
Lord Airedale: If the noble Lord has put his eldest son to the law, he ought to be arguing in favour of this amendment.
4 p.m.
Baroness Elliot of Harwood: I speak also as a farmer. We have had the noble Baroness, Lady Robson, speaking as a farmer in favour of these amendments and I speak as a farmer against them. I agree with everything my noble friend Lord Stanley of Alderley has said. When you are thinking about producing and industry, agriculture is quite different from any other industry such as gas, electricity, mining and so on. We produce an animal. I produce sheep. I sell them in the market, and they are bought by the butcher, who then takes them to the abattoir. They are then turned into mutton. I am only responsible for the fact that I send my sheep to market. The buyer does not need to buy them if he does not want to. If he does buy them—and I would sell them only if they were in good condition—then he is responsible thereafter. I am responsible for the beginning of this agricultural effort, but I am not responsible for what happens afterwards.
You could say the same about vegetables. In fact, you could say the same about almost everything. We are responsible for seeing that what we send to the market or sell to the shops is in excellent condition. After that, if the shop mismanages, or if the butcher mismanages, or if something happens, we are no longer responsible. We cannot be. Therefore, I cannot see how anybody could support this amendment because it does not make any sense at all if you are a producer in the farming world.
I also agree with what the noble Lord, Lord Stanley of Alderley, said: that if we passed this amendment we would then be the only member state in the EC applying strict liability to unprocessed agricultural produce. Our farmers would thereby be placed at a disadvantage in comparison with other European farmers. Surely we do not want that to happen. It is also a fact that there is a tremendous amount of legislation already to protect consumers against defects in food. In addition to the many Acts and regulations related specifically to food, agricultural and horticultural produce, the Sale of Goods Act conditions as to fitness and merchantable quality apply to protect the purchaser.
The produce of the land is not of course manufactured; it is grown or reared. To extend the farmer's liability to strict liability where no processing has taken place would be inappropriate for agricultural produce and game. It would be nothing short of a disaster if this amendment were passed. I strongly oppose it, and I hope that everyone else will join me and support the Government on this matter.
Lord Donaldson of Kingsbridge: I should like to follow the noble Baroness because, like her, I was a farmer—and I educated three children in the most expensive way entirely on what I made out of farming—and subsequently found myself the noble Baroness's successor as chairman of the Consumer Council, which was so improperly abolished by the Tory Government almost as soon as I had left it.
As a farmer I always insured against outside liabilities. If my cattle were to damage somebody on the road, or anything of that sort, I was always covered. I never thought of insuring against my produce being

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accused of hurting somebody because I did not see how that could happen, and I still do not. If a farmer does use dangerous pesticides, then washing them off (as the noble Baroness knows very well) is entirely inadequate in the case of a number of them, and there is a real danger.
On the other hand, if a manufacturer using farm goods does something which makes them in some way dangerous, surely the courts are capable—I am sure the noble and learned Lord, Lord Denning, thinks they are, and I agree with him—of sorting out who is to blame. It cannot be said that if somebody dies or is seriously injured through buying something that I have produced then I am going to sit down and say, "It is nothing to do with me". I am going to try to find out whether there has been anything in my produce which makes me guilty, and if there is then one bears the penalty. If, as I hope, it was somebody else, then they bear the penalty.
I think that what we have heard from the noble Lord opposite about the rural population being damaged is absolute fantasy of the most extreme kind. If you grow things and sell them you expect them to be eaten by people if you are a farmer, and you expect to produce things which are healthy and decent to eat. If you fail for some reason which you do not understand, then you should put it right. I cannot see anything against this amendment at all, and I am astonished that my old colleague Lady Elliot should take the view that she does.
Viscount Bledisloe: I am somewhat surprised that the noble and learned Lord, Lord Denning, who spoke immediately after the noble Baroness, Lady Robson, did not correct what I venture to suggest was a serious legal fallacy in her thesis. As I understood it, her thesis was that a farmer who breaks the regulations—for example, by selling milk which has come from a cow which has just had antibiotics for mastitis—can be prosecuted but is not liable to the individual who consumes that milk and becomes ill. With the greatest respect to the noble Baroness, that is legal rubbish. There is the law of negligence. If a farmer has broken regulations designed for the safety of the public, that is the clearest possible evidence of negligence, and that farmer would go down and have to pay compensation under the law as it now stands.
The only question that the Committee is considering is whether farmers who are not at fault should pay compensation to people who are injured. I venture to suggest that in that respect those who suggest that it can all be done by insurance are wrong. I venture to suggest that the noble Baroness, Lady White, is right in suggesting that the lady who sells a few free-range eggs from the front of her house is hardly likely to be covered at all by insurance. But if she is, I am afraid the noble and learned Lord, Lord Denning, is out of date in suggesting that it is easy and cheap to get: and one of the reasons why it is no longer easy and cheap to get is because the noble and learned Lord, Lord Denning, has imposed so many liabilities on people that insurance is now very expensive.
Not only is it expensive, but what is even more difficult to get is unlimited insurance. It is difficult to get insurance which does not have a very low limit.
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When you impose absolute liability in tort, as opposed to liability in contract, you are opening yourself up to liability to the world, and that is the moment when you need very high insurance which you either cannot get or have to pay a great deal for. I respectfully suggest to the Committee that the insurance argument does not wash.
The Earl of Radnor: I think that towards the end of this long debate it should be noted that those noble Lords and noble Baronesses who have supported this amendment have not once cited a specific case in which something has gone wrong. We have not had our eye drawn to one ill that has to be rectified. The whole argument seems to have been rather hypothetical—what might happen if there is too much antibiotic in the milk, and so on.
To me, that seems to be indicative of the fact that there is no necessity whatsoever to put agriculture into this Bill. If examples were brought forward of an ill which had befallen people, then I might think differently; but this seems to be interesting in law but totally unnecessary so far as any practicality of life is concerned. So far as agricultural produce is concerned, the consumer is perfectly well protected already. If in print he is not perfectly well protected he is in fact because he is not suffering much ill. I think that such extra legislation would be both burdensome and unnecessary.
The only other point I should like to make—and it has been made already by one or two noble Lords—is that the other countries of the EC are not, it seems, going to bring agriculture into their consumer protection area. Since we are trying to harmonise various parts of the Common Market by 1992, it would seem a great pity suddenly to branch off in this particular way. I am against the amendment.
Lord Mottistone: I must start by declaring an interest as the adviser to a trade association which deals with the business of manufacturers of biscuits, cakes, confectionary and chocolate. To take my noble friend's immediate point, if, of course, there are no examples of the present regulations having allowed harm to ordinary people to slip through, as it were, there really is not much worry on the part of farmers in having this in the Bill. Why should they worry if they are well protected at the moment?
There are two or three points I should like to make. I shall try not to be too long. Sadly, I was unable to attend the Second Reading. I wrote to my noble friend the Minister and he came back with a helpful letter. I have answers to that. I shall not bore the Committee with that matter now but I shall try to give him something on paper in the course of this stage of the Bill. That may lead to something at Report stage.
Many Members of the Committee, my noble friend Lord Peyton and the noble Baroness, Lady White, were slightly off beam in the sense that they were comparing product liability with regulations. The regulations we apply to protect the consumer from being maltreated by food are straightforward protection which we have built up over many years and they provide a background in which people can be sued in the ordinary course through the courts. But the regulations do not make people automatically responsible or liable for their product being faulty.

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I agree with my noble friend Lord Stanley in that I do not like more legislation. I do not like this legislation. The noble Lord, Lord Allen of Abbeydale, is very pleased to have Part I of this Bill. He has been pressing for it for a long time. I fought, so far as I was able, not to have the directive. Now we have the directive so we have the legislation. Now we have to consider what has to be done about that legislation in applying it to the British.
It is unfair in the sense that the potential responsibility or liability for the product is loaded on to later stages of what we call the food chain—that is, the food processor, the retailer and the wholesaler—but not on to the people who began it. It has been suggested that some products are not processed, in which case that would not be relevant. But there are all sorts of processing that farmers do, such as cleaning, washing, trimming, sorting, treating with agricultural chemicals, and so on. One might even include specific practices such as pasteurising milk, threshing wheat, milling grain, crushing olives to express oil, filleting fish, packaging apples, packaging beans in modified atmosphere containers—simple farmers do not do that, but the more sophisticated ones do—and packed meat stored at chill temperatures. All those come at the primary stage and they are as much processing as producing a biscuit.
Much has been made of the fact that if we were to pass this amendment we should be the only nation in the Community to take up this derogation. I suggest to the Committee—and I think it was suggested by the noble Lord, Lord Allen of Abbeydale; but it might have been someone else—that this is an area in which it would not be inappropriate for us to set an example.
I know through the various European trade associations that food processors in Belgium, Denmark, Germany and the Netherlands, to mention but four, would all be right behind it. Over many years of dealing with fellow food processors in Europe and sitting on the various committees for most of the past 10 years, it has become obvious to me that they are ridiculously more subservient to their governments, and more especially their officials who support the governments, their civil servants, than happily we are in this country. I do not think that is a joke, but I believe, from having observed for some time, that the influence of Napoleon—who after all introduced all the bureaucracies for all the countries I have mentioned—is still with them and they still have this rather ridiculous special respect for ministers and civil servants which happily we in this Parliament spend most of our time trying to avoid.
I think the Committee might find that if we were to adopt this amendment that would lead to added strength being given to those who produce much the same arguments in the countries in Europe I have mentioned, and in many cases they are the most important because they are those who compete the most with us. I do not suppose the French would do it, but they are absolutely hag-ridden by their civil servants—poor things. That takes that point.
There are one or two other more complicated matters that I do not think it would be appropriate to go into now, though there may be an occasion later. I suggest to the Committee that the most important
730
point about this is that is does not add to the regulations. It creates a new situation for product liability. Product liability needs to be shared equally among all the people who contributed to producing the product. To take away one chunk of this process, one group of people, just because there may be difficulties in identifying their contribution to the product—which may be overcome if special methods to do so are introduced; that is not nearly so difficult as the farmers would like us to think—would be unfair.
In another sense, though, the farmers say that they will suffer miserably and will all go broke; at least that is what my noble friend Lord Stanley was saying. My noble friend Lord Radnor pointed out that that would not happen to farmers because they never make a mistake and do not get caught up in this matter. On the other hand, if in the event some chemically-treated primary product was part of a biscuit which poisoned somebody and they caught some filthy disease and we traced it all back, the biscuit manufacturer would have to take the rub. That is not right if—I do not say it will be the case—it all came from the chemical in the agricultural product in the first place. I am sure that there are all sorts of protections to prevent that happening.
The point of the amendment is to provide for the rare occasions when this point is relevant to our food products. We should not forget that our food products are so well regulated that the number of occasions when there is any poisoning from processed food is few, though sadly there is some poisoning from cooking; but that is another issue. The products we eat, even what people sometimes call junk food, are very wholesome. In some cases it is more wholesome than the stuff dug out of the ground. It is really a matter of making sure that the level of product liability falls right across the board, so that on the rare occasions when the liability genuinely came from the primary product end it should lie there and should be part of the resultant processes that that requires.
Lord Burton: One hears in this day and age of the scandals in the City, over which the Opposition never cease attacking the Government. Now one hears these amendments being supported by the Opposition, though they could produce the biggest scandal of the lot—the diversion of large sums of money from the rural community into the insurance market. This amendment will hit not only farming but also forestry.
On Second Reading, when questioned about where this insurance money was to come from, various speakers said that it would be passed on to the consumer. How is agriculture to pass on this expenditure, and for that matter how is forestry to pass on such expenditure? Both those industries are already in very strict straightjackets. I have mature timber which I cannot sell because one cannot get enough for it. As regards agriculture, the 1985 cropping year was disastrous and many farmers would now be bankrupt if it had not been for the drop in oil prices which not only reduced the price of fuel but also had a very marked effect on fertilisers. The weather was also kind to us last summer. Farmers in the more remote areas, the areas most wanted by the conservationists and where the areas of recreation exist, may well be devastated.

731
The outlook is indeed bleak. With further milk cutbacks, it is estimated that quotas will have taken £40 million out of Scottish agriculture alone. Grain is severely threatened and bound to have retrictions placed upon it. Beef has already suffered cuts of about £50 per animal. Over the last year the market has been undercut by the Irish who with extra benefits secured from the Common Market, have been able to increase their supplies to this country by 40 per cent.
It is now suggested that we should have restrictions placed upon us which none of our EC competitors will have to suffer. I recall helping to make hay in France and being amazed at the simplicity of the machinery. As the French did not have to comply with our safety regulations, their machinery was very much cheaper and provided farmers with a considerable financial benefit.
Further costs and restrictions on agriculture may well be the final straw which breaks the camel's back. This morning I spoke to my bank manager in Inverness and we discussed the situation of farmers generally. He pointed out that many were on the borderline and that quite a large number had only just been saved by last year's comparatively—I stress "comparatively"—good year in farming.
I am absolutely convinced that in moving this amendment, the noble Lord is looking at the consumers' interests through blinkers, and narrow ones at that. He cannot have appreciated the enormous damage that this amendment would cause to the rural areas. Only on Saturday I received a leaflet restricting various pesticides, and quite rightly. However, I was a little concerned because, from an initial reading, it appears that if you store or put down mouse poison you are breaking the law unless you are a professional. But that is a small imposition which most of us, I believe, would be prepared to tolerate.
These sorts of impositions which are not necessary must not be allowed to pass through the Committee. I have yet to hear of one instance where the consumer would have been compensated other than by means of the sort of compensation that can already be secured, even if perhaps by a slightly more devious route. I can think of perhaps one instance. If a pheasant was sold to an hotel one of whose customers then broke a tooth on a pellet, that could be charged back to the person who sold the pheasant. It makes a complete nonesense of the law if we introduce this amendment.
Lord Monk Bretton: I should like to say a word at this stage. Of course I have a vested interest in farming, but I am emboldened to speak because I believe this to be a very important matter. To refer to what my noble friend Lord Mottistone said a moment or two ago, when he said that he felt everybody should be involved in insuring this strict liability risk——
Lord Mottistone: I must interrupt my noble friend. I did not say "in insuring". I said "in sharing".
Lord Monk Bretton: I stand corrected. I do not agree with the thinking of my noble friend on that matter. The Law Commission and the Scottish Law Commission, agreed on the main axiom that it is
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desirable to impose liability on those in the chain of manufacture and distribution who are in the best position to exercise control over the quality and safety of the product. That is, I believe, of very great importance.
The difficulty for the farmer and grower is to exercise control over the quality and safety of the product as it moves along the channels of trade towards the consumer. Most produce, as has already been said, is highly perishable. A great deal more gets bulked, and there are considerable problems, therefore. A good watchword would be: do not apply strict liability upon those not in a position to apply strict control to the product before it reaches the consumer. I believe that to be the real issue.
In a historical context, there was, in the early days of the foundation of the NFU, a case somewhat along these lines when the Central Chamber of the Agriculture and Meat Trades Federation wanted to obtain a warranty from producers on the health of all cattle sold. This was fought off by the farmers (whose organisation was not what it is today) with considerable difficulty. The battle was one of the catalysts in the growth of the NFU, and it took place back in 1908. I should like to quote from a report at the time, which said:
"The dilemma in which farmers and the trade alike were placed arose solely from the fact that a beast having every appearance of being healthy when sold might show evidence of disease when slaughtered.
"These warranties would have saddled the farmers with total responsibility for … any disease detected in the carcass up to 10 days after purchase. During that time the animal might change hands more than once, and anythng might happen to its state of health".
This is the kind of problem that we shall encounter if we depart from what my right honourable friend the Minister has decided in the Bill. For that reason, I believe, we should not support the amendment which is before us.
Lord Walston: I must admit to a past interest in agriculture although I have no interest, in the official sense of the word, at the present time. For all that, the Committee might expect me to be taking the side of farmers in this debate. I have a lot of sympathy with them, although I must say that having heard some of the speeches, that sympathy is not quite so strong as it was. I do not believe that farmers should be treated differently from other producers. The fact that they are shortly to go through a difficult time, and may be going through a difficult time at present, has no bearing whatever on the problem we are now discussing.
It is the question of to what extent farmers should be liable if they sell dangerous products and how far it is possible to trace the product back, after quite a long period of time in certain instances, to one specific farmer. I suffer—although, there are perhaps some benefits—from not being a lawyer. I would guess, however—and lawyers will correct me if I am wrong—that if a motor car manufacturer sells a car which is later found to contain flawed metal which leads to an accident, one does not have to trace it back to the actual provider of that piece of metal, but that, normally, the liability will rest with the manufacturer. Surely common sense dictates that the manufacturer of a motor car is expected by the consumer to take the

733
necessary precautions to ensure that the raw materials which he puts into the motor car are in fact sound and do not contain flaws.
I suggest to the noble Lord, Lord Mottistone, that it is the responsibility of the maker of biscuits to ensure that the wheat put into those biscuits is sound and is not, for instance, contaminated with ergot. Some of your Lordships may recall the famous case of several years ago in a remote district in France where a large part of the population of that community suffered and, in some cases, died from ergot poisoning which was traced to a particular baker who had used flour made from ergotised wheat. I suggest that the responsibility lies with the miller and the baker to make certain that the produce that they buy is healthy produce. They can certainly sue a farmer who sells them wheat which they later discover to be dangerous, through ergot or for any other reason.
To believe that it is possible to trace from the grower of the wheat or possibly even the provider of the seed of the wheat, through the first and second merchant, the miller, the baker and the distributor seems to me to make a nonsense of any form of realistic legislation. For that reason, rather than for the hardship which it might bring to the sad, penurious and nervous farming community, I suggest that the Bill as it stands is preferable to what it would be if this amendment were accepted.
4.30 p.m.
The Earl of Halsbury: Before the noble Lord, Lord Walston, got up I was contemplating making an intervention, not with regard to ergotised wheat, but with reference to a possible mutant strain of rust producing ergot alkaloids, which are abortifacients with all sorts of other properties. Is it right to penalise those who are up against a new phenomenon? I have in mind what the noble Lord, Lord Stanley of Alderley, said about the possibility of foodstuffs being contaminated by radioactive fallout through the Government's inspection machinery not being on its toes and the contaminated mutton, or whatever it might be, getting loose into the market. That might happen not as a result of any negligence or breach of duty by the farmer but rather by a failure of communication by another party.
In the food chain, as in any other sequential manufacturing process, there are always two lots of inspectors. Whoever is producing something inspects it to make sure it is right to sell it, and the person receiving it inspects it to make sure that it is a good starting point for his own process. However, if one is up against an unknown phenomenon or something that has never happened before, it seems to me to be against justice to fix liability on the producer, who is being afflicted by it just as much as the person receiving it. In those terms, I do not think that we ought to allow this amendment to go through.
Lord Mottistone: May I pick up that point? As a result of the Chernobyl affair, the Singapore Government refused to accept any biscuits from Europe. That has done great harm to our trade in that product in that part of the world. The whole weight has been borne by the manufacturer.
734
In the instance mentioned earlier, suggesting that the Government might have been slow off the mark, the whole weight of the problem will not fall upon the farmer whose product is perhaps proven to be over-radiated. It will be shared, because it will fall on the manufacturer as well. However, it seems wrong that is should fall only upon the manufacturer.
The Earl of Halsbury: In the case of an unknown phenomenon it should be borne by the community at large, in the same way that earthquakes and volcanic eruptions are borne. They are not due to any negligence by human beings.
Lord Lucas of Chilworth: We have had a good debate on this important subject of which notice was given to us at Second Reading. However, I think that the fundamental point is to establish what might be called the onus of proof in this case. I am not at all sure that the onus should be upon the Government to justify the exclusion of primary agricultural products; rather I think the onus should be upon those supporting the amendment to justify their inclusion. I do not think that that case has been made before now, either inside or outside this Chamber. I think that the way that the directive is framed and was agreed by the member states tends to support my view. Such products are excluded, and member states may only add them by derogation.
I remind the Committee of the remarks made by my noble and learned friend the Lord Advocate at Second Reading. He said then that our intention had always been to implement the directive as the directive was—no more, no less. The intention was neither to add to it nor to detract from it.
It is no accident that the directive is cast in those terms. The whole genesis of this directive on product liability—indeed, the whole development of the law on product liability—has been a response to the greater mechanisation and industrialisation of the production of goods. Because of this, negligence has become a less relevant test as to whether or not a producer should be liable for defects in his products. Accordingly, we have to move—in our case through the medium of the Community directive and this Bill—towards a system of strict liability.
I am not going to argue that there have not been great changes in the methods used to grow agricultural produce; nor would I argue that food processing is not a largely industrial process. However, it remains the case that the production of agricultural produce has distinctive features that industrial processes do not have. It depends largely on uncontrollable environmental factors such as soil, air, sunlight and indeed water. I was rather surprised that no noble Lord mentioned the fact that we have before us the matter of fisheries as well. Fish are drawn from an element which is no less uncertain than the soil.
It is because of those uncontrollable environmental factors that I believe we have the preamble of the directive. My noble friend Lord Monk Bretton drew our attention to the preamble which says, in effect, that strict liability cannot be applied when production cannot be strictly controlled. An unforeseeable combination of these factors to which I referred would

735
be unfortunate. Products are by no means uniform or stamped with the design of an individual producer. I suggest that their production is altogether very much less under the producer's control.
I make these points only to establish the burden of proof. The directive and the concepts within it were intended for industrial products and it is for proponents of the inclusion of agricultural products to show that it is necessary and appropriate. I do not think that this has been done.
I should like to draw attention to one of the other main purposes of the directive. That purpose is to harmonise, so far as possible, the law in the Community on liability for defective products. We understand that no other member state plans to derogate from the directive and thereby include primary agricultural produce. The noble Lord, Lord Allen of Abbeydale, said that the fact that other member states were not proposing so to do was no good reason why we should not. I have to say that if we do so alone we shall be needlessly erecting an unnecessary barrier to trade. By doing so we shall place United Kingdom farmers at a distinct disadvantage when exporting to other Community countries since they will face potential liabilities in our courts that a consumer in another member state will not be able to pursue against a producer in his own country. We shall also deprive United Kingdom consumers of the produce of some Community exporters if the United Kingdom becomes a less attractive market place.
I touched quite briefly on the ways in which I see the process of producing agricultural products as being different from industrial production. But these features of agricultural production also create real practical impediments to covering agricultural produce in the Bill. The first important feature of primary agricultural products is that they are prone to defects caused by environmental factors beyond the control of the producer. Such defects may be hidden ones, not easily revealed without complicated and expensive testing. It is by no means obvious that it is right to place the burden upon a blameless producer.
Two other important characteristics of agricultural products have considerable effects upon their distribution. My noble friend Lady Elliot of Harwood referred to the chain. First, agricultural products are normally far more prone to deterioration due to overlong or improper storage than industrial products. Secondly, agricultural produce from many sources is often mixed together at different stages in the distribution chain. My noble friend Lord Stanley of Alderley described that at some length.
These two factors have important implications for the working of the system of product liability set out in the directive. Suppose, for example, that a consumer buys a defective apple. The whole point of the directive, if it were applied, would be to make the producer—the grower of the apple—liable for damage caused by defects in that apple. What are the problems? First, the consumer has to find the producer. Unlike an industrial product, it is not normally stamped on the apple. The consumer's only practical course is to go and ask the greengrocer from whom he bought the apple who the producer was.
736
Because of the mixing of bulk supplies in the distribution process it is very unlikely that the greengrocer will be able to tell the consumer—and then, of course, the greengrocer or possibly his supplier becomes liable himself under subsection (3) of Clause 2.
So because of the mixing of bulk supplies, and the provisions in the directive, which we cannot change, for the liability of suppliers, the practical effect of including primary agricultural produce will be to place the liability not on the producer but on others in the distribution chain, often at the retail end. This was the point so well put to the Committee by the noble Lord, Lord Walston.
This is not consistent with the main purpose of the directive, which is to make the producer liable for defects in his product. One can speculate that retailers and others in the distribution chain will want increasingly to be in a position to be able to say who the producers of agricultural products are, but that can be achieved only at the cost of very considerable bureaucracy, record keeping, restrictions and so on. At the end of the day, the result could be a restriction in choice and an increase in costs to the consumer. I do not believe that that is what the consumer really wants. The balance of advantage lies in not distorting the present efficient and economical system of distribution of primary agricultural products.
I turn now to the contribution made at Second Reading by my noble friend Lord Stanley of Alderley. Indeed, my noble friend Lord Peyton of Yeovil added his contribution to much the same argument adduced by the noble Lord, Lord Stanley. My noble friend Lord Stanley said that there is already an important way in which consumers are protected from defective agricultural produce. It is analogous to Part II of the present Bill, and it is to prevent so far as possible, by the criminal law, defects being introduced into products put into circulation in the first place. There is, as all noble Lords are well aware, a comprehensive regime of law in this country to ensure that defective products are not circulated. At the forefront is the Food and Environment Protection Act 1985 and numerous regulations made under it which are there to protect consumers against food which is unfit or unsound. Among other things, regulations made under the Food and Environment Protection Act provide specific controls over additives, contaminants and how food should be handled hygienically. This answers several of the points put forward by a number of the proponents of the amendment this afternoon.
The noble Lord, Lord Allen, and others, mentioned the risk of the misuse of pesticides on crops. Perhaps I should draw their attention to the Control of Pesticides Regulations 1986 (Statutory Instrument 1510) which control the supply to the user and the way that those chemicals may be used. Noble Lords have also mentioned drugs used in the rearing of livestock. But we should note that the European Community has now banned the use of hormones for fattening animals, on which there was so much publicity. There are other directives which lay down the enforcement procedures on the use of hormones generally and other veterinary substances. Furthermore, there is the Medicines Act 1968, which sets out a system of licensing, and all veterinary medicines are controlled under those terms.

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I should be less sanguine in drawing attention to this comprehensive regime if there was any evidence that consumers were seriously at risk from damage by unprocessed primary agricultural produce. But there is no such evidence. The existing regime of regulation works well. It would be unfortunate to add a regime designed for industrial goods in quite different circumstances and which leads to bizarre and unusual effects when applied to a situation for which it was never intended.
Many noble Lords have suggested that the line dividing agricultural products which are covered from those which are not is vague, and that this very vagueness makes the clause unnacceptable. The noble Lord, Lord Allen of Abbeydale, asked me to talk about slaughtering and butchering, pasteurisation, the freezing of peas, the freezing of chickens and so on. We could of course have sought to define industrial processing of industrial products exhaustively. For each type of product—and there are very many—we could have listed the processes that are exempt for the purposes of the directive and those that bring the produce within the scope of Part I. Had we done so we should have had to lay before Parliament a Bill with a further and very lengthy and complex schedule. And it would almost certainly be the case that there would be processes which we had not covered in that schedule, still leaving areas of uncertainty.
Rather than burden the community, and particularly the farming community, with complex legislation of this type—the apparent certainty of which must always, anyway be open to challenge in the European Court—we feel it is better to rely on ordinary words, "industrial processing", and, as the noble Baroness, Lady White, said, just a little common sense. With the application of common sense I do not think it is too difficult to see what is meant.
The test is twofold. First, there must have been processing, and for processing to take place some essential characteristic of the product must have been altered. Simply cutting sprouts from a sprout plant or harvesting potatoes does not constitute a process. Those processes do not change the essential characteristic of the product. Moreover, the process must be an industrial one—that is, it must be carried on on a large and continuing scale and with the intervention of machinery. I have in mind the processes that turn peas into frozen peas or potatoes into frozen chips. But what is important is that we should not completely destroy the value of the exemption for primary agricultural produce by making suspect all those processes which necessarily and traditionally have been carried out on farms—harvesting, washing, and sometimes packaging—and which do not interfere with the inherent nature of the product.
I hope I have shown that the onus is upon those mostly opposite, and my noble friend Lord Mottistone, to show that primary agricultural produce should be covered. I do not believe that they have done so. I believe that in fact I have shown that the production of primary agricultural produce is quite different from the industrial products to which this directive is directed and that its application to primary agricultural products in some cases might produce unusual results. I believe I have shown that given the existing comprehensive body of legislation in this area
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little would be achieved by the extension and yet consumers would lose because of the extra costs it would create. I have argued that we would be needlessly departing from the position taken by other member states in the Community. Finally I have tried to show that the dividing line we have drawn is workable within the main spirit of the directive. I urge the Committee to reject the amendments that we have been discussing.
Lord Allen of Abbeydale: We have been discussing this matter for a long time and I do not propose to inflict a lengthy speech on the Committee. The official handout from the department stated that the arguments were finely balanced, but one would hardly gather that from the Minister's summing up. We all realised when we started on this amendment that taking on the farming community in this place is a formidable undertaking, and that there would be a strong body of opinion that farmers must be treated quite unlike any other producers.
Many of the comments have gone a little astray. There has been a great deal of discussion to the effect that the whole of fanning produce ought to be exempted from the Bill. That is not so. The directive applies to produce which has undergone an initial process or an industrial process—call it what one will—and I am afraid that the explanation just given by the Minister on what is a process for this purpose falls short of removing all doubt. One can see an interesting series of cases, not only in our own courts but in the European Court. I can understand the Minister's reluctance to produce a long list of definitions of processes which might itself not find acceptance in the European Court. Those are not matters entirely within our own control.
I must say that the suggestion from the noble Viscount, Lord Bledisloe, that it is still open to the consumer to have resort to the existing law of negligence is not a great comfort when we are discussing a Bill which removes that particular argument from all other produce. I do not want to go in detail through all the arguments put forward but I just wonder what the noble Baroness, Lady White, would think if in company with her washed lettuce she ate a fish which had been poisoned by mercury.
As regards the points raised by the noble Baroness, Lady Elliot, if she had gone on to read the defences allowed by the Bill she would have realised that she is not in jeopardy. On the argument advanced by the noble Lord, Lord Stanley, that these proposals are unnecessary because of the many regulations prescribing how much pesticide one may use, and so on, I thought that I and others had made it clear that that has very little to do with the provisions we are now discussing. The noble Lord says that we should not go into more legislation, but perhaps I may point out that what we are proposing is to shorten the present Bill; that is, less legislation.
Having said all that, I remain in doubt as to why on earth this power of derogation was ever put in the directive. Everyone is saying that there will be great certainty and that no other member state is going to make use of the power of derogation. I wonder how we know. We have had indications from here and there. We also know, as the noble Lord, Lord Mottistone,

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said in his admirable speech, that there is a great deal of opposition in other member states on the lines I have been advocating and we have not been all that reluctant to criticise the agricultural policy of the Community. I still see no particular reason why we should not go for the course which these amendments suggest.
4.56 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 96; Not-Contents, 127.

DIVISION NO. 1

CONTENTS

Airedale, L.

Jacques, L.

Allen of Abbeydale, L. [Teller. ]

Jeger, B.

Jenkins of Putney, L.

Amherst, E.

John-Mackie, L.

Ardwick, L.

Kearton, L.

Attlee, E.

Kennet, L.

Aylestone, L.

Kilbracken, L.

Banks, L.

Kilmarnock, L.

Beaumont of Whitley, L.

Kirkhill, L.

Bonham-Carter, L.

Lawrence, L.

Bottomley, L.

Listowel, E.

Brockway, L.

Lockwood, B.

Bruce of Donington, L.

Longford, E.

Burton of Coventry, B.

Lovell-Davis, L.

Carmichael of Kelvingrove, L.

McNair, L.

Chitnis, L.

Molloy, L.

Cledwyn of Penrhos, L.

Morton of Shuna, L.

Craigavon, V.

Mottistone, L.

David, B.

Mulley, L.

Dean of Beswick, L.

Nicol, B.

Denington, B.

Northfield, L.

Denning, L.

Oram, L.

Diamond, L.

Perry of Walton, L.

Donaldson of Kingsbridge, L.

Phillips, B.

Dowding, L.

Pitt of Hampstead, L.

Elwyn-Jones, L.

Ponsonby of Shulbrede, L. [Teller]

Ennals, L.

Ewart-Biggs, B.

Porritt, L.

Ezra, L.

Robson of Kiddington, B.

Falkender, B.

Rochester, L.

Falkland, V.

Rugby, L.

Fitt, L.

Seear, B.

Flowers, L.

Seebohm, L.

Gallacher, L.

Serota, B.

Galpern, L.

Shackleton, L.

Gladwyn, L.

Shaughnessy, L.

Graham of Edmonton, L.

Silkin of Dulwich, L.

Grey, E.

Somers, L.

Grimond, L.

Stallard, L.

Hampton, L.

Stedman, B.

Hanworth, V.

Strabolgi, L.

Harris of Greenwich, L.

Tordoff, L.

Hayter, L.

Turner of Camden, B.

Hooson, L.

Underhill, L.

Hughes, L.

Wedderburn of Charlton, L.

Hunt, L.

Whaddon, L.

Hutchinson of Lullington, L.

Wigoder, L.

Hylton-Foster, B.

Williams of Elvel, L.

Irving of Dartford, L.

Wilson of Rievaulx, L.

NOT CONTENTS

Alexander of Tunis, E.

Belstead, L.

Ampthill, L.

Bessborough, E.

Auckland, L.

Bledisloe, V.

Beaverbrook, L.

Blyth, L.

Belhaven and Stenton, L.

Boardman, L.

Bellwin, L.

Boyd-Carpenter, L.

740

Brabazon of Tara, L.

Lucas of Chilworth, L.

Brougham and Vaux, L.

Lyell, L.

Bruce-Gardyne, L.

Macleod of Borve, B.

Burton, L.

Manton, L.

Butterworth, L.

Margadale, L.

Caithness, E.

Marley, L.

Cameron of Lochbroom, L.

Maude of Stratford-upon-Avon, L.

Campbell of Alloway, L.

Carnegy of Lour, B.

Merrivale, L.

Camock, L.

Mersey, V.

Cathcart, E.

Middleton, L.

Cawley, L.

Monk Bretton, L.

Chelwood, L.

Mountgarret, V.

Clitheroe, L.

Nathan, L.

Coleraine, L.

Norfolk, D.

Colville of Culross, V.

Nugent of Guildford, L.

Cornwallis, L.

O'Brien of Lothbury, L.

Cowley, E.

Onslow, E.

Cox, B.

Orkney, E.

Cranbrook, E.

Orr Ewing, L.

Cullen of Ashbourne, L.

Pender, L.

Davidson, V. [Teller.]

Penrhyn, L.

De La Warr, E.

Peyton of Yeovil, L.

Deedes, L.

Plummer of St. Marylebone, L.

Derwent, L.

Digby, L.

Portland, D.

Elliot of Harwood, B.

Radnor, E.

Elliott of Morpeth, L.

Renton, L.

Elphinstone, L.

Rodney, L.

Elton, L.

Saltoun of Abernethy, Ly.

Faithfull, B.

Sanderson of Bowden, L.

Fortescue, E.

Sandford, L.

Fraser of Kilmorack, L.

Selborne, E.

Gainford, L.

Selkirk, E.

Gardner of Parkes, B.

Shannon, E.

Glanusk, L.

Shrewsbury, E.

Gowrie, E.

Simon of Glaisdale, L.

Gray of Contin, L.

Skelmersdale, L.

Gridley, L.

Stanley of Alderley, L.

Grimthorpe, L.

Stodart of Leaston, L.

Hacking, L.

Strange, B.

Haig, E.

Strathcarron, L.

Hailsham of Saint Marylebone, L.

Strathspey, L.

Sudeley, L.

Halsbury, E.

Swansea, L.

Hampden, V.

Terrington, L.

Harris of High Cross, L.

Teviot, L.

Henderson of Brompton, L.

Teynham, L.

Hesketh, L.

Thorneycroft, L.

Hives, L.

Torrington, V.

Hood, V.

Trefgarne, L.

Hooper, B.

Trumpington, B.

Kaberry of Adel, L.

Ullswater, V.

Killearn, L.

Vaux of Harrowden, L.

Kinloss, Ly.

Westbury, L.

Lane-Fox, B.

Whitelaw, V.

Lauderdale, E.

Wilberforce, L.

Layton, L.

Wolfson, L.

Long, V. [Teller.]

Ypres, E.

Resolved in the negative, and amendment disagreed to accordingly.
5.5 p.m.
The Earl of Radnor The Earl of Radnor moved Amendment No. 2:
Page 1, line 7, after ("soil") insert ("of hydroponic culture").
The noble Earl said: Since agriculture will now be left out, it is obviously important to ensure that agricultural produce is defined properly. Although the definition in the Bill rolls off the tongue very nicely indeed, I felt that it did not quite fit the whole position. As your Lordships are probably aware, many vegetables, particularly cucumbers, tomatoes, lettuces and such, are grown by a process known as hydroponics, where the one thing that is not involved is soil.
Therefore I thought that the ugly word "hydroponic" should come into the Bill. A ridiculous situation would be produced if two cucumbers were exposed for sale and one fell outside the scope of the Bill and one inside. That would be almost too ridiculous to contemplate. I feel sure that my noble friend on the Front Bench has an answer to this problem.
Some years ago I rose to my feet and in reply was told that in the context of such and such a Bill (I think it related to fish farming) "water" meant land and "land" meant water, and so perhaps there is an adequate answer. If not, I think it is very important indeed that hydroponic culture should be brought into the Bill. I beg to move.
Lord Morton of Shuna: I think that this amendment shows the difficulty of having agriculture in the Bill but I do not wish to return to that point. I suggest that the answer is that the Bill must fit the directive. Article 2 of the directive states:
"'Primary agricultural products' means the products of the soil"—
and the noble Earl has shown that this does not involve a product of the soil—
"of stock-farming and of fisheries".
Those are all the products that are to be excluded. I think that we should be acting contrary to the directive if we include hydroponic culture. Therefore I oppose this amendment.
The Earl of Radnor: I understand that one is allowed to speak twice on amendments. I thought it possible that "of the soil" could be interpreted as meaning something that could be grown in soil rather than actually grown in soil. That would get round the difficulty mentioned by the noble Lord, Lord Morton of Shuna. It seems to be a matter of definition. However, I think the matter should be clarified.
Lord Donaldson of Kingsbridge: I support the amendment. Whatever the directive says, this suggestion is only common sense and it is never a bad thing to use common sense.
Lord Lucas of Chilworth: I am most grateful to my noble friend for explaining his amendment. I confess that it is not something that I had considered until I saw the amendment on the Marshalled List.
We must first turn to the directive to see exactly what we can do in relation to the produce of hydroponic culture. We have followed very carefully the definition of "agricultural products" in the directive. The question now is, if the matter were to come before the European court, whether produce produced by hydroponic culture would constitute "agricultural produce".
I regret to tell my noble friend and the Committee that I cannot definitively answer that question this afternoon. We believe that, given the purpose of the agricultural exemption from the directive and the way in which the directive is likely to be construed, the balance of the argument is that produce from this culture should be considered agricultural produce for the purpose.
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Having said that, the next question that probably arises is whether we should make that explicit in the Bill. If my noble friend agrees, I should like a little longer to think about the implications of that matter, since among other things by including hydroponic culture we may cast doubt upon the provision of agricultural produce produced by other novel—I say that with great respect to my noble friends—methods. I hope that my noble friend will be satisfied if I say that I should like to give the matter further consideration and return to it at a later stage. Perhaps he will accept my assurance that I will do that and will withdraw his amendment.
The Earl of Radnor: With that assurance I shall withdraw the amendment. I shall leave my noble friend with the thought that I think we have the rights of the matter here. It may be better if the directive were somehow altered rather than our thoughts upon the subject.
Amendment, by leave, withdrawn.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 3:
Page 1, line 16, leave out ("an industrial or other") and insert ("a").
The noble Lord said: Essentially this has nothing to do with agriculture; it is merely a matter of drafting. The words referred to are in the last two lines of page 1:
"in the case of a product which has not been manufactured, won or abstracted but essential characteristics of which are attributable to an industrial or other process having been carried out".
All I suggest is that it would make just as much sense, be easier to understand and would save some difficulty in interpretation if the sentence were merely:
"of which are attributable to the process having been carried out."
It makes the matter simpler. It makes, "an industrial or other", as in my view they are, totally unnecessary words. The amendment is a mere drafting amendment, and I beg to move.
Lord Lucas of Chilworth: I wish the matter were as simple as the noble Lord, Lord Morton, has suggested to the Committee. I should say a little about the purposes of the Clause 1(2)(c). The basic proposition of Part I is that the producer shall be liable for damage caused by defects in his product. It is therefore critical to define who is the producer of a product. That is set out in Clause 1(2).
The main case is of course that where a producer is the manufacturer in the normal sense. That situation is covered by paragraph(a). A second case arises in relation to products which are not manufactured but which, for example, are mined. Paragraph (b) is designed to cover those who mine ore, or obtain natural gas or something of that nature.
There is a third category that we must cover, one which often falls between those two. Many products are treated in ways which fall short of manufacture in the normal sense of the word. I am thinking of the processing of iron ore before it is put into a blast furnace, the refining of petroleum or the processing of food. It seems to be clear that the person who carried out such a process should be treated as its producer for the purposes of the directive. However, he may not be a manufacturer in the normal way in which that word

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is used in this country. Accordingly, and to be sure that the Bill covers those persons who carry out those activities, we have included paragraph (c).
We have referred within the paragraph to "an industrial or other process" to give some indication as to what we are talking about. We are inclined to think that the amendment proposed by the noble Lord, Lord Morton of Shuna, would not change the effect of paragraph (c) as any process is of course included in the phrase:
"an industrial or other process."
However, we think that our formulation is a little clearer and indicates more explicitly the area of activity that we have in mind. In particular, it will prevent the provision being interpreted to cover large-scale industrial operations only. Accordingly, we should like to keep the words as set down in the Bill, and I invite the noble Lord to withdraw his amendment.
Lord Morton of Shuna: That is interesting. I understand what this provision is about. It is about a product the essential characteristics of which have been changed by a process. Nothing the noble Lord has said has made it any clearer why "an industrial or other" makes the meaning clearer. I do not wish to divide the Committee on the adding of three unnecessary words if the Government insist on doing so. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
5.15 p.m.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 5:
Page 2, line 6, after ("otherwise") insert ("and includes a product which has been incorporated into an immovable or real or heritable property.").
The noble Lord said: This is an attempt to include in the definition of "a product" what the directive says it must include. It appears to us that it has been excluded. It is clear that the directive covers bricks, wood, cement and other things, even though they become part of a house. Therefore, to use Scottish Legal terminology, they become heritable. In the Bill, "product" as defined in the first few lines on page 2 of the Bill does not make that clear. The amendment is an attempt to make it clear. It may well be that the wording of my amendment will not suit the parliamentary draftsman. If that is the Government's view and they want to take the amendments away and think about it, I shall be delighted. I beg to move.
Lord Lucas of Chilworth: I accept the reading of the directive by the noble Lord, Lord Morton of Shuna. He is right. I do not think that there is any necessity for me to take away this amendment and consider it because I believe the amendment to be unnecessary. Article 2 of the directive, which is implemented by Clause 1(2), provides:
"Product means all movables, even though incorporated into another movable or into an immovable."
The definition in Clause 1(2) provides:
"'Product' means any goods … and includes a product which is comprised in another product, whether by virtue of being a component part of raw material or otherwise".
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If we look at the definition of "goods" contained in Clause 45(1), we will see that it includes among other things:
"things comprised in land by virtue of being attached to it".
That part of the definition has been drawn from Section 9(4)(a) of the Consumer Safety Act 1978 and it applies for the purposes of all Parts of this Bill. There can be no doubt that the words:
"things comprised in land by virtue of being attached to it"
catch everything that would be caught by the amendment moved by the noble Lord, Lord Morton of Shuna. I see no reason why we should use different words in Part I. That would complicate the Bill and may invite readers of the Bill to worry as to whether any difference in meaning were intended.
There is a further point which is not directly addressed by the amendment but which arises out of it. There is a distinction to be drawn under the directive between the components of a building and the building itself. While there is liability for defects in components, the directive does not seek to impose liability for defects in the building itself: that is, a defect arising from the assembly or construction of the building. The definition in Clause 45(1) does not make that distinction and neither does the noble Lord's amendment.
If, again, we look at Clause 46(3), we see that under that provision references in the Bill to supplying goods do not include references
"to supplying goods comprised in land where the supply is effected by the creation or disposal of an interest in the land".
This needs to be read with Clause 4(1)(b). This gives a defence to any producer that he did not at any time supply the product to another person. The result is to give a defence to the building contractor, for example, in respect of defects in buildings put on the market by him. The reason for providing this defence is that the liability of building contractors is dealt with in some detail by other legislation, notably by the Defective Premises Act 1972.
I admit that I have digressed a little from the original amendment. I am not entirely clear that what is proposed would affect the substance of Clause 46(3) although some minor verbal changes might be required. Perhaps it will assure Members of the Committee if I say this. At first sight this may have looked like a gap in Clause 1, but it is adequately filled by the later provisions which I have mentioned.
I hope that the noble Lord will be able to accept this explanation notwithstanding that he has had to refer quite quickly across the breadth of the Bill. I hope that he will find the explanation acceptable and will be able to withdraw the amendment.
Baroness Phillips: Before the noble Lord responds, may I ask whether the Minister can answer what may seem to him a silly question. He referred to a substance that was won or abstracted. He mentioned gas, I believe. I should like a direct answer. If a gas fire blows up, who is responsible? Is it the person who has mined the gas or he who has manufactured the gas fire?
Lord Lucas of Chilworth: I would think that it would be a manufacturing or an operating defect in the appliance. There is no simple, straight answer to that question, I fear.
Lord Morton of Shuna: I am very much obliged for the tour. I assure the noble Lord, Lord Lucas, that I have read the Bill. I shall study what he says. We were discussing earlier the clarity of legislation. It is remarkable that in order to find out whether a brick put into a house is or is not covered one has to go through Clause 1 to Clause 45, to Clause 46, and back to Clause 4, instead of putting it in fairly simple English in the two lines I have suggested in Amendment No. 5. However, I shall study what the noble Lord has said and, if satisfied with it, I shall not put down another amendment. Otherwise I may do so. I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 6:
Page 2, line 11, at end insert—
("( ) For convenience of reference there is set out in Schedule [Directive of the Council of the European Communities dated 25 July 1985 (No. 85/374/EEC.)] to this Act the English text of the Directive.").
The noble Lord said: This part of the Bill is to give effect to the directive. However, the directive is not printed with the Bill and is not easily available. The directive is specifically referred to in Clauses 1 and 8. It is not easily obtained by the layman. At Second Reading I had the temerity to refer to the directive. I read out a part of it, and was requested by Hansard to give them a copy because they could not find one. If that shows us the ease of getting hold of the directive it shows us the point of having the directive as a schedule to the Bill.
The form of the amendment is taken from the Civil Jurisdiction and Judgements Act 1982, which adopted not a directive but a protocol. One of the points which the directive makes clear, but is nowhere in the Bill, is what the consumer, the injured person, has to prove. Article 4 says specifically in very clear English:
"The injured person shall be required to prove the damage, the defect and the causal relationship between the defect and damage".
There is not one word of that in this part of the Bill. It can no doubt be inferred once one has legal training and has read the whole of Part I and the definitions in Clauses 45 and 46. But it becomes much clearer if the directive is there. I beg to move.
Lord Denning: I should like very warmly to support this amendment. It is time that we all understood what these directives are. When they are issued by the Council of Ministers in Brussels they become part of our law. Not only that, but if we do anything or pass anything that is inconsistent or in conflict with it the directive governs. That was shown very clearly by the case of the Southampton nurse in an action she brought against the health authority. The directive is the governing instrument. But where is it to be found? How many Members of the Committee have seen it? Like the noble Lord, Lord Morton, I had to ask for it in the Library; they had to send down to the basement; they had to get it copied.
How many Members of the Committee have seen this directive? Yet it is the most important document in this case. It is just as important as those conventions which we often add to an Act such as the civil judgments Act which has been mentioned. When an international convention is made part of our law we
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put it into or append it to the Act. This part of the Bill gives effect to this directive. The directive is far clearer than Part I of our Bill. The preliminary recitals tell us exactly what the principles are at which the directive is aimed. There are none in our Bill. There are important principles. Article 4 states;
"The unjured person shall be required to prove the damage, the defect and the casual relationship between defect and damage.
How very important it is to have that definitively stated as it is in the directive. Furthermore, when we consider other parts of the Bill the definitions are far more clearly stated in the directive than in the Bill.
As a matter of principle I say that this directive ought to be before us. It ought to be readily accessible. I do not suppose any Members of the Committee except the noble Lord, Lord Morton, myself and one or two others, have had the directive before them. But we have had all trouble in getting it. It is not published in the legal text books. These directives are very important, affecting all our law. Yet we have to search around and have copies made in the basement, and so on.
To save all that trouble I would heartily support the amendment. Those who have to consider the Bill, and the courts which have to consider the Act when it is passed, ought to have before them the directive on which it is based. For convenience of reference the directive should be set out in the schedule. It ought to be there. We ought not to have to search around all the libraries and so on to obtain it. I support the amendment.
5.30 p.m.
Lord Airedale: Both noble Lords have referred to what the injured person has to prove. Supposing that the injured person dies and is in no position to prove anything, does the burden of proof automatically pass to his personal representative, or is it necessary to have an amendment in the Bill to say "the injured person or, in the event of his death, his personal representative"?
Lord Denning: I should not have thought that that was necessary. In the European Court of Justice we interpret these directives quite liberally, and generally we are not defeated by technicalities.
The Lord Advocate (Lord Cameron of Lochbroom): Perhaps I may make it clear at the outset that this directive is undoubtedly the source for Part I of the Bill. I remind noble Lords that not all parts of the directive are applicable. Articles 19 and 20 state that:
"Member States shall bring into force, not later than three years from the date of notification of this Directive, the laws, regulations and administrative provisions necessary to comply with this Directive".
The directive makes it quite clear that it will be complied with by the normal ways in which a particular member state may seek to set it out in its laws, regulations and administrative provisions. Furthermore, Article 20 provides that:
"Member States shall communicate to the Commission the texts of the main provisions of national law which they subsequently adopt in the field governed by this Directive".
Noble Lords will know far better than I that in relation to international agreements we have been

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accustomed to adopt two approaches. The first is by means of a schedule setting out the international agreement to incorporate that in our general law. Indeed, that has been done and the noble and learned Lord spoke of one of them, and the noble Lord opposite of another. In those cases Parliament was giving the force of law to the instrument concerned.
The other approach which has been adopted, and one which has in a sense been heralded by Articles 19 and 20 of the directive, is that the member state may, as it were, synthesise, by setting out in terms which may be familiar to the national courts, to parties who may be litigants and to others, the force of what is within the directive itself.
That is the way in which we have chosen to go in this Bill. The law on product liability is set out within the confines of the Bill itself. We have taken considerable trouble to set out the law in a way that will be familiar to the courts and parties, and others, and we hope that it will be relatively easy to understand. By following the provisions of this Bill it is our intention that our national courts will arrive at a result which is the same as that to which the European Court would come in interpreting the directive in its way.
Accordingly, the provision in subsection (1) of Clause 1 is to be construed according to the directive. It is there in part (and it is an important part) to remind the court that in any case before it the directive—which is, of course, the source of this part of the Bill—must, if a question arises, be considered if that is thought by the court to be relevant. Of course the court will give effect to the construction which is more in accordance with the provisions of the directive; an alternative, as the noble Lord will know, if it is thought appropriate is to refer the matter to the European Court.
Thus, the legislation is essentially derived from the directive. That is acknowledged in Clause 1 but it is intended that this part of the Bill should stand on its own and there should be no need to refer to the directive direct because what is being done is to synthesise this for the purpose of national law, as Article 19 obviously has in mind.
There is one other matter which leads me to advise the Committee not to accept this amendment. Noble Lords will be aware that all directives of the Community are published in the Official Journal of the European Communities. By virtue of Section 3(2) of the European Communities Act, that publication is admissible evidence of any such directive. It at least suggests that Parliament, in enacting that provision, must have had in mind the need to remove the necessity for republication of the directive in our domestic legislation, more especially, it seems to me with good reason, where we have within a Bill, as we have here, a synthesis of the directive or its pertinent parts. I notice the noble Lord opposite nodding. One would accept, I believe, that there are parts which are not at all relevant and would not be required to be given the force of law.
I note that the noble Lord's amendment is only to the English text of the directive. As noble Lords will know, the directive is drawn up in all the official languages of the Communities, and these are all
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equally authoritative. All that anyone likely to want to look at the directive—this is where there might be suggested to be a difficulty in construing Part I—would get from the schedule is that I might term "the English language version". Nor would he be safe in assuming that the English text is exactly reflected by the others. I am bound to say that I am not aware of any particular differences at this stage, but where issues of interpretation arise, noble Lords will be well aware from Community jurisprudence that even minor differences of phrase can, at the end of the day, turn out to be quite significant.
I hope that I have said enough to persuade the noble Lord opposite that in this respect the previous statutory precedent should be adhered to, and that the directive should not be scheduled to this Bill. In the Bill we have given our own nationals a clear indication of what the directive aims to do in relation to all member states and we have given a clear indicator that, at the end of the day, the directive is there to determine the matter should there be any ambiguity. However, for the reasons I have set out, I cannot suggest that it would assist to include the English version of the directive as a schedule to this Bill.
Lord Denning: I should like to ask one question. If the English court is faced with a difficulty in the interpretation of this Bill when it becomes an Act, is it permissible for the judges of England to refer to that Council directive for elucidation of any difficult points?
Lord Cameron of Lochbroom: I am grateful to the noble and learned Lord. Indeed, that is the purpose of subsection (1) which states:
"This Part shall have effect for the purpose of making such provision as is necessary in order to comply with the product liability Directive and shall be construed accordingly".
Lord Denning: Thank you very much. It means that they will have to get copies from somewhere in order to do so.
Lord Morton of Shuna: I am grateful for the support of the noble and learned Lord, Lord Denning. At times it appears to me that government Ministers and government departments forget that ordinary people exist. Somebody who wants to look up consumer protection will receive a copy of this Bill. Perhaps he will then have a case in the sheriff court at Fort William and want to get the Directive of the Council of the European Communities No. 85/374/EEC. Will that be readily available in any solicitor's office or shop in Fort William? It was not readily available in this House until I put down this amendment and the Public Bill Office arranged for copies of the directive to be placed in the Printed Paper Office. Surely, for convenience, the directive should be available.
I am interested that we should not have simply the English translation of the Common Market legislation. No doubt the noble and learned Lord will tell us why the Civil Jurisdiction and Judgments Acts in which I am sure he is interested, and which his Government passed, included as a schedule the English translation, and the English translation only, of the various protocols. This would seem to be helpful for the convenience of the public, for the convenience of

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anybody appearing before court, and for the court itself. I have no wish to divide the House on this matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (The Earl of Listowel): Before I call the next amendment, I should point out to the Committee that if Amendment No. 7 is agreed to, I cannot call Amendments Nos. 8 or 9.
5.45 p.m.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 7.
Page 2, line 12, leave out subsection (3).
The noble Lord said: I should like along with this amendment, to deal with Amendment No. 12. As I understand the Bill, Clause 1 is a definition clause as to what various things are—agricultural produce, a producer, a product and the product liability directive. We go on to something quite different in Clause 2. That clause deals with who is liable for defect in a product. Subsection (3) of Clause 1 has not the faintest connection with the definition clause. It states:
"For the purpose of this Part a person who supplies any product in which products are comprised … shall not be treated by reason only of his supply of that product as supplying any of the products so comprised".
That subsection belongs in Clause 2 which deals with the supply of products. Clause 2 (1) states:
"where any damage is caused … by a defect in a product every person to whom subsection (2) below applies shall be liable for the damage".
Subsection (2) applies to the producer, a person who puts his name on the product and a person who has imported it.
Subsection (3) reads:
"where any damage is caused wholly or partly by a defect in a product, any person who supplied".
That is the first time we get the provision of supply in any form of logic. Subsection (3) of Clause 1 belongs after that, in the position where I have endeavoured to put it, at line 43. I think the wording is exactly the same.
As framed, Clause 1 (3) is contrary to the directive. The fourth paragraph beginning "Whereas" in the preamble to the directive states:
"Whereas the protection of the consumer requires that all producers involved in the production process should be made liable, in so far as their finished product, component part or any raw material supplied by them was defective".
It is said there that both the producer of the finished product and the producer of the defective raw material or defective component should be liable.
Article 3 of the directive states:
"Producer means the manufacturer of a finished product, the producer of any raw material or the manufacturer of a component part".
Article 7(f) makes the point even clearer. The producer is not liable,
"in the case of a manufacturer of a component, that the defect is attributable to the design of the product in which the component has been fitted or to the instructions given by the manufacturer of the product".
It is clear that the purpose of the directive is to say that if there is a defect in a product which is an amalgam of components, or is made up of various components and
750
raw materials, there is a defective product as a whole. There is a chance of going against that producer and also a chance of going against the producer of the particular defective material or component. My purpose is to try and achieve the aim of the directive which we were assured at Second Reading was the aim of the Government.
Another problem is whether or not, in the case of a product such as a car which has a defective component, namely a brake lining, a tyre or a windscreen wiper, the defective component always means that the total product, the assembled product, is a defective product. The law is far from clear. We should have clarification on the matter because it is going to be very important. I raise again the question of whether or not, if I buy a car and it crashes because of a defective tyre or defective battery, I can recover for the damage to the car. The whole question arises of what the defective product is. I beg to move.
Lord Cameron of Lochbroom: I am grateful to the noble Lord for setting out the reasons for moving the amendment. The noble Lord has obviously touched on matters which I think we will debate in due course and with which I would not wish to deal at the moment.
I should like to remind noble Lords that Clause 2(3) deals with the liability of suppliers of defective products in that any person who supplied the product shall be liable for the damage caused by that product if that supplier fails to identify the person who supplied the product to him, thereby going up the chain of supply to the ultimate producer who, as is intended, should bear the liability for the defect. That is the way in which Clause 2(3) is concerned. It is possible that the provisions in Clause 1(3) have been misunderstood and interpreted in the narrow sense that they apply to the supplier of a product rather than to the producer and that they would be more conveniently situated therefore in Clause 2.
In so far as it goes, this is correct because of the wide definition of product in Clause 1(2). A finished product would usually consist of a large number of separate products or components and those components may even have components within themselves. The intention of the provisions of Clause 2(3) is that the liability of the supplier should only extend to identifying the producer of the finished product and not to all the producers or all the components of that finished product. Accordingly, the provisions of Clause 1(3) make it clear that a supplier of a finished product does not supply a component part by reason only of the fact that the component part forms part of the finished product.
May I put it in a slightly different way? If I take the car, I am supplied with a car. It may be that some part of the car fails, but the product which was supplied and which was defective was the car. Accordingly, the retailer who, through his showroom, has supplied the car is only bound to tell you who actually made the car. He is not bound to tell you who made the defective part which has been, in the manufacturing process, comprised in the car and ultimately forms part of the finished product which is then sold.
However, I have to say that Clause 1(3) also has an effect which goes a little wider than Clause 2 and its

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relation to the supplier of products. For example, there is a defence in Clause 4(1)(d) that the defect did not exist in the product at the relevant time. In the case of a manufacturer or importer of a finished product, that time must obviously be the time when he supplied the finished product to another person, and Clause 4(2)(a) so provides. But if the defect is in the component part, then the relevant time must be the time when the component part itself was supplied. If Clause 1(3) were removed, the effect would be that the relevant time so far as the manufacturer or importer is concerned would be the time when he supplied the product rather than when it was supplied by the component manufacturer. So one would have two different dates for determining whether there was a defect in a component, depending on who was sued. That cannot make any sense at all.
The noble Lord may also have had in mind a concern which has been expressed to us that Part I may not, as it should, impose liability on the manufacturer of a finished product for defects attributable to a component. I do not think there is in fact any doubt about the matter, but I have to say to the Committee that consideration is being given to this point and if necessary an amendment will be brought forward to deal with the matter. But the doubt, if it is one, stems more from the structure of the directive than from Clause 1(3) itself and would not, I believe, be assisted by the noble Lord's amendment.
I appreciate that this is an explanation which is very technical in the sense that one has to go to different parts of the Bill to comprehend it. I suggest to the noble Lord that he may like to consider what I have said in immediate response to his amendment, and more particularly perhaps to see on the other matter whether any amendment which is brought forward later may not make the matter slightly clearer than hitherto. I request the noble Lord to consider the position in the light of what I have said.
Lord Morton of Shuna: I shall certainly follow that invitation. I failed at least to comprehend, from what the noble and learned Lord said, any reason why Clause 1(3) should not become a subsection of Clause 2 without altering the sense at all. I shall study with great care what he has said to see whether or not that is so. Subject to that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 8:
Page 2, line 13, after ("which") insert ("other").
The noble Lord said: I think some Members of the Committee may be in possession of a document entitled Consumer Protection Bill: Groupings referring to amendments. I was handed one as I entered the Chamber this afternoon. The Committee will see that no fewer than 16 amendments, all in my name and many of them drafting but dealing with different clauses and quite different subjects, have been grouped together. I thought that it was rather more than the Committee should be asked to bear to listen to 16 speeches from me rolled into one, followed by 16 replies from the Minister rolled into one. I am glad to
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be able to say that the Government have readily agreed largely to abandon that particular grouping.
I do not think any of my amendments will take very long and I shall be able to group some of them together, as will become apparent as we go along. Indeed, Amendments Nos. 8, 9 and 10 can conveniently be taken together. The only point here is that in each case the clause deals with two separate sets of products, and it occurs to me that by introducing the word "other" into the appropriate place it is made easier for the reader to appreciate that two separate sets of products are being referred to. I beg to move.
Lord Beaverbrook: I am most grateful to the noble Lord, Lord Airedale. The noble Lord's Amendments Nos. 8, 9 and 10 appear similar in that they cause an obvious distinction to be made between the different occurrences of the word "product" in each subsection. One could argue that at line 30 we are referring to the producer of any product in which the product in question is comprised. That surely cannot be the same product. In Clause 1, however, I am not so opposed to the intention of the noble Lord, Lord Airedale, to clarify subsection (3). I ask the noble Lord to withdraw these amendments on the understanding that the Government will consider how that clarity may best be achieved.
Lord Airedale: On that undertaking, I am very pleased to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 not moved.]
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Williams Elvel: Before we leave Clause 1, perhaps I may raise one matter for clarification on the interpretation of the expression "producer"? May I put my question in the form of an example? Suppose ABC company either develops a new product or has a product which already exists. It manufactures that product and it markets it. Suppose, furthermore, that ABC company vests in a subsidiary its patent, its trademark and its manufacturing facility of either the new product or the existing product. Suppose the subsidiary is capitalised at £100 and suppose the rest of the financing for the subsidiary, the manufacturing and all the rest of it are guaranteed by the parent company but are obviously not in the capital base of the subsidiary.
In those circumstances—and this is the simple case; I have not yet got to the foreign cases and licence cases—who is the producer? Is it the subsidiary? In that case, is the liability of the subsidiary limited by the normal limitation of liability of companies, so that the maximum penalty that may be suffered by such a subsidiary—indeed, the parent company—would be restricted to the amount of capital in the subsidiary; namely, £100? Perhaps the noble and learned Lord the Lord Advocate or the noble Lord, Lord Beaverbrook, could clarify that point before we get on to a slightly more complicated issue.
Lord Airedale: I have a rather less technical and difficult matter to raise on the Questions, Whether

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Clause 1 shall stand part? It is this. Perhaps I may briefly refer to the Long Title, which begins:
"An Act to make provision with respect to the liability of persons for damage caused by defective products".
I should have thought that the first question the reader might ask himself is: what is meant by "damage" in this connection? I should have thought that when he sees that Clause 1 contains a list of definitions he would be surprised not to find a definition of "damage" in Clause 1, but it is not there.
It is true that when he comes to Clause 3 he will find an explanation of the meaning of "damage", but the side note to Clause 3 is, "Meaning of 'defect'". He would not be likely to look there for the definition of "damage". When he gets to Clause 5 he is getting much warmer because the side note there is, "Damages", but of course "damages" is not the plural of "damage". Damages are what you hope to get after suffering the damage, so the reader would not expect to find the definition of "damage" in Clause 5, but it is there.
The trouble is that it does not correspond to the meaning of "damage" in Clause 3, because in Clause 5 at the end of subsection (1) we have in brackets the words "(including land)", which do not appear in Clause 3. Incidentally, I see no reason for having brackets round the words "including land". Do they have any significance? If they do not, let us get rid of them. Otherwise people will argue that the brackets must mean something or else they would not be there.
I call this unsatisfactory. Surely what the reader is entitled to is a definition of "damage" among the definitions in Clause 1, and if that definition needs to be qualified for the purpose of any other clause then the qualification should be spelt out in the particular clause.
6 p.m.
Lord Lucas of Chilworth: I shall certainly try to answer the point of the noble Lord, Lord Williams. My interpretation is that it is irrespective of the subsidiary company or its shareholding. The point at issue here is: who in fact assembles the article in question? If one takes a complicated piece of machinery which basically is produced by one person and put together by another, then it is the other person who is responsible irrespective of their standing one with the other. If, however, the assembly is something comparatively minor—two parts of a thousand—then of course it would be the originator.
Lord Williams of Elvel: I am sorry to interrupt the noble Lord, but I do not want to go off at a tangent. The point I put was that the assembly, the manufacture, the patent, the trademark, the licence, all the rest of it—the whole ball of wax—is vested in a subsidiary of a company which has £100 capital. There is a simple process. There is no question of joint assembly or anything like that. The whole operation is vested in a subsidiary.
If that product causes damage, against whom can the person who is damaged have recourse under the product liability provisions of the Bill? It would seem to me to be against the subsidiary. If that is the case, and if the subsidiary is only capitalised at £100 and if,
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say, the damages were assessed at £1 million, then the parent company can simply put its subsidiary into bankruptcy and the doctrine of limited liability does not give the parent company any responsibility at all for the subsequent debts of the bankrupt subsidiary. Am I right or am I wrong?
Lord Lucas of Chilworth: I believe that the noble Lord is right. That is the question the noble Lord asked me. Does the noble Lord want to ask another?
Lord Williams of Elvel: I am grateful to the noble Lord, Does not this render the whole of Part I, the product liability, relatively nugatory, because any company can, and indeed will in practice, put their operations for difficult products into subsidiaries, particularly developing new products? That is a question to which the Government have to respond seriously. If companies can isolate themselves by this financial mechanism, if you like, it renders the Bill ineffective.
Lord Lucas of Chilworth: I do not believe for one moment that that situation is likely to arise, because I think it would be too difficult practically to do that. However, the noble Lord will of course appreciate it when I say that I shall look carefully at what he has said.
In looking at it, as I shall, I hope that the noble Lord opposite will also think of these points. Perhaps the liability that we foresee—or perhaps it is more true to say that we do not foresee; but suppose there was a liability arising under Part I—would be only very occasionally large enough to justify, certainly in commercial terms, the sacrifice of a subsidiary. Even then, I suggest, the question would arise only if the liability implicit in what the noble Lord said has not been adequately insured.
If a group of companies is large enough to be able to sacrifice a subsidiary, surely it is much more likely that it would be able to either bear the financial loss or to have secured adquate insurance in the first place. I do not think that it would want to sacrifice a subsidiary, in the kind of scenario that the noble Lord painted, with the consequences for the reputation of the whole group. We should also remember that there are other statutes which would inhibit it so doing. The noble Lord himself will clearly remember, as I remember, the provisions of the Insolvency Act, which impose duties on the directors. They are not ones that they can easily walk away from purely by taking the course of action that the noble Lord poses that they might take.
Surely there are, and must be, a number of considerations other than avoiding one's proper legal and, as I suppose I may put it, moral responsibilities. There are many considerations of that nature involved in deciding the structure of a group of companies. While I said that I would look at the point the noble Lord made, I find rather surprising the suggestion that potential liability under Part I of the Bill is likely to be a predominant factor.
Lord Williams of Elvel: I am grateful to the noble Lord. What we are now down to is whether a parent company considers its reputation sufficiently important to it not to abandon its subsidiary, or

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whether the directors of that subsidiary happen to be people who are covered under the Insolvency Act. I can invent all sorts of scenarios for the noble Lord, and I am sure any noble Lord can do so. We can put it in a trust company; we can vest it in a trust company in Gibraltar, or in the Cayman Islands; we can do all sorts of things, and people do this.
The point of the Bill, as I understand it, is to make it a strict legal product liability. If we are down to the question of whether a parent company would sacrifice a subsidiary we are down to the question of whether a parent company believes its reputation would be harmed, and that is a quite different issue from the question of making it legally liable.
Lord Lucas of Chilworth: I find it very difficult to believe—because perhaps I am a naive man—that companies will engage in a number of those practices which the noble Lord opposite thinks may happen. I dare say that a number of noble Lords could paint a variety of scenarios, all to the detriment of some producer who wants to escape his moral as well as his legal responsibilites. I do not believe that business is conducted in that way. I believe that the provisions of the Bill are sufficient to persuade him to a proper course of action.
Having said that, I again repeat that I am quite happy to look at the points the noble Lord made. I shall communicate with him as soon as I have taken advice. Does he want to come back on that? I have to respond to the noble Lord, Lord Airedale.
Lord Williams of Elvel: I am grateful to the noble Lord for saying that he will look at this point, because it is important. Either we are trying to impose some kind of a legal liability or we are relying on the reputation of companies to do their bit. May I ask a further question? What about licensing? Let us suppose company A has developed a product and it licenses company B to manufacture that product. Company B accepts the licence. I assume from what has been said that company B has the legal liability under Part I. Am I right, or is there some mechanism whereby the developer of the product, himself the licensor—who is after all responsible for the technology and any defects that may exist in a product—can become liable? Can the noble Lord answer that question?
Lord Lucas of Chilworth: I have a suspicion that whatever way I answer that question there will be a further question as to exactly what I mean. Why does the noble Lord not put his point more succinctly and then I may be able to answer him in full?
Lord Williams of Elvel: That point was, I hope, put as succinctly as I could put it.
Earl De La Warr: With respect, I think the noble Lord has put it succinctly and he is also very practical. We know that much of this Bill is to catch the rascals there are. To say that one can rely on the conscience of a company is no answer, certainly no answer in law. It is not a legalistic question because when the chips are down it is and will be very practical.
Lord Lucas of Chilworth: I am not sure whether my noble friend Lord De La Warr was going back on the earlier point that the noble Lord, Lord Williams, made. My noble friend knows, because he has been in business a long time, that in practice the reputable industrial, commercial and manufacturing companies do not seek to avoid their risks. Having said to the noble Lord, Lord Williams, that I shall look at these points I do not think that I can go further than my noble friend.
The second point the noble Lord addressed was whether the principal or a licensee would be responsible under Part I. It is the licensee who would be responsible. I am not a legal man, but no doubt he would enjoin the principal and so a chain would evolve. But essentially one would go for the licensee. Will the noble Lord, Lord Williams, allow me to move to the noble Lord, Lord Airedale, or does he want to stay with this matter? I am quite happy as it is Committee stage.
Lord Williams of Elvel: I am grateful to the noble Lord for, as he rightly points out, I have a number of other possible scenarios I should like to explore. I do not want to hold up the Committee because these are matters which perhaps we could discuss. I wonder whether any other Members of the Committee have points to raise on the two matters that I raised—the question of the subsidiary and the question of the licence. I shall drop the rest for a moment.
Lord Denning: This is not a point only concerned with product liability. It is concerned with all the liabilities of companies throughout our field of tort. It involves general company law and so many things outside the Bill. I believe it is better not to pursue it at this stage.
6.15 p.m.
Lord Lucas of Chilworth: I am grateful to the noble and learned Lord, Lord Denning, for underlining what I said earlier. I suggested to the noble Lord, Lord Williams, that there were other statutes. I remember, because he and I dealt with the matter not so long ago, the Insolvency Act. There are other Acts of Parliament that the noble and learned Lord mentioned to us—the Companies Act and so on. It is not just a question of a company seeking an out through this Bill. However, we have agreed that we shall consider this and any other scenario that the noble Lord likes to put to me. It might be more useful if he put it to me rather than to the entire Committee.
I thank the noble Lord, Lord Airedale, because he told me that he would put the point he raised. The Committee will appreciate that I have had rather more time to consider my response and perhaps to give it in more clear and exact terms than my response to the earlier point to me. There are four considerations that I believe are relevant to the question asked by the noble Lord, Lord Airedale. First, the directive provides in Article 9 a restriction on the right to recover under the directive in respect of damage to property. We have to reflect on that, but it means introducing some rather lengthy provisions about the matters in Clause 5.

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Secondly, the directive does not deal with a particular problem under our law concerning the time when a cause of action in respect of latent damage to property accrues. We have dealt with that in Clause 5 also. Thirdly, we have followed the general structure of the directive so far as is possible. Those who wish to draw comparisons—they may wish to do so in frankly contentious cases—can readily see the derivation of our provisions.
Fourthly—and this is perhaps the most important point—I do not think we should weigh down Clause 1 with extensive provisions such as we have made in Clause 5 unless it really is necessary for the purpose of understanding the following provisions in Part I. The definitions given in Clause 1 are confined to those which are necessary for that purpose: in particular the definitions of "producer" and "product".
If this had been a particularly lengthy part of the Bill there might have been a case for cross-referencing Clause 5 in Clause 1(1). But it seems to me that anyone affected by the Bill would pick up the reference to damage very readily, either by reading the arrangements or by reading to the end of Part I. I do not think that that is unreasonable.
There are two points on Clause 3. First, the purpose of the reference to damage to property is simply to counter any suggestion that "safety" must be taken to mean only personal safety. I do not think we then need make too much of a meal of what is meant by "damage to property" in this connection. Secondly, again I do not think that in the context of Clause 3 we need to make a distinction between property intended for private use or consumption and property used for business purposes. The nature of the risk seems to us to be the same in both cases.
I suppose it is barely arguable that the definition of "damage" in Clause 5 is attracted to Clause 3(1), but I do not think it matters one way or the other. Frankly, I should be reluctant to add further complications to Part I purely for the purpose of disposing of that point.
Lord Airedale: I still think it is bad luck on the reader who, if he wants to know what "damage" means in Part I, has to dig it out of Clause 3 against the side-note, "Meaning of 'defect'", and out of Clause 5, whose side-note is, "Damages recoverable under Part I". That is pretty hard luck on the reader; but there it is.
Lord Lucas of Chilworth: I had already made up my mind, before the noble Lord, Lord Airedale, said "there it is", and sat down, to say to him that I appreciated what he says about "hard luck". Let me give an undertaking to him that I shall see whether I can remove some element of this hard luck. I do not promise but I offer to do that and, if I am successful, I shall tell him what it is. If I cannot, I shall also tell him.
Clause I agreed to.
Clause 2 [Liability for defective products]:
[Amendment No. 10 not moved. ]
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 11:
Page 2, line 33, after ("damage") insert ("or his representative")
The noble Lord said: This is a very simple amendment, as I had thought were most of the amendments to which I have been speaking. It is difficult to see how the person who suffers the damage can request the supplier to be identified if the person who has suffered the damage is dead or incapable. That is the purpose of putting in the words, "or his representative". It seems to be something that has just been left out. Surely the representative of somebody who is incapable or dead should have the same rights. I beg to move.
Lord Cameron of Lochbroom: I am grateful to the noble Lord. I see a possible difficulty arising in this case. I am not sure that the form of words which he has used is necessarily the happiest way to deal with it, but I should like to reflect further on the matter and, if judged proper, deal with it at Report stage. On that undertaking, perhaps the noble Lord might like to withdraw the amendment.
Lord Morton of Shuna: I am willing to bow to the ability of the draftsman to put in something which is probably of six lines rather than of three words. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 12 and 13 not moved.]
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 14:
Page 2, line 47, leave out ("industrial") and insert ("initial").
The noble Lord said: This again is an attempt to get this part of the Bill to comply with the directive. The directive quite firmly states in Article 2, "initial processing", and of course it is the directive and not the preamble which is preferred if there is any dispute between the two as to what is meant. The preamble uses the words, "industrial processing", but Article 2 of the directive says:
"For the purpose of this Directive 'product' means all movables, with the exception of primary agricultural products and game, even though incorporated into another movable or into an immovable. 'Primary agricultural products' means the products of the soil, of stock-farming and of fisheries, excluding products which have undergone initial processing".
It would be quite easy, as my amendment does, to put into subsection (4)
"at a time when it had not undergone an initial process".
That is what the directive says. I have great difficulty in understanding why "industrial" should be preferred to "initial". I have even more difficulty in considering that they could mean the same, because they could not in ordinary English. I beg to move.
Lord Ezra: I should like to support this amendment. When this aspect was being discussed earlier there was grave concern about the meaning of the term "industrial process", as applied to agricultural products. The directive is clear. We are talking here about an initial process. There may be subsequent processes to which these products can be subjected. Therefore I feel that if the word "initial" is not retained in the legislation we ought to be clear as to why the change has been introduced.
Lord Lucas of Chilworth: I again remind the Committee that when my noble and learned friend the

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Lord Advocate introduced the Bill he said that the purpose was to implement the directive. A number of questions have been raised, particularly where we have departed—and these general points come up a little later as well—from the words of the directive.
There are a number of occasions where we have done so, and for particular reasons. Here we have made the change for two reasons. First and foremost, we think it more nearly expresses in English the true intent of the directive. Secondly, we think it produces greater clarity and ease in understanding the dividing line in what we frankly admit is a difficult area. We touched upon the dividing line earlier in our deliberations this afternoon.
It may be thought that the easiest way to ensure that we have implemented the directive would be to copy out its exact words, but I think the Committee will accept that things are not quite as simple as that. Expressions used in the directive may, despite Clause 1(1), have a different meaning when used in the context of our own legislation. In the present case it is true that Article 2 of the directive speaks of the exclusion for primary agricultural produce being available only for produce that has not undergone initial processing. But if we were to use that phrase it could be taken to have a different sense from the expression "industrial process" in Clause 1(2). On the contrary, the preamble to the directive speaks of how it is appropriate to exclude liability for agricultural products and game, except where they have undergone processing of an industrial nature which could cause a defect in these products.
We have also to recall the origin and fundamental purpose of the directive (that is, to provide for a system of strict liability for manufactured goods) and the reasons that lay behind making the exclusion for primary agricultural products in the first place. It seems to us that when these factors are given due weight it is the industrial nature of the process that is important and not where in the sequence of production the process concerned occurs. We believe that the intentions of the directive can best be translated into English law by making the exclusion work for agricultural produce which has not undergone industrial processing.
This approach has another advantage. It is certainly clearer. The words in the directive contain the implication that, while initial processing may disqualify goods from the exemption, processing which comes after that initial processing is somehow all right. That, I suggest, was never the intention of the directive, but it can be argued on the strict wording of Article 2, and it would not be a wholly fanciful argument within the context of the usual rules of English construction.
We would rather avoid setting such hares running. It seems to us to be clearer, but I admit that is something of a relative statement. I believe it is clearer to say what an industrial process is rather than an initial one. After all, the initial process to which potatoes are subjected is harvesting. Here, as I said in my earlier example, the important process which turns them into frozen chips (so that they are covered by Part I) is the industrial one in what might be called an industrial plant, using
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machinery on a regular, formal, mechanised basis. That is the reason for changing the words. It is an improvement on the wording of Article 2 and I believe that it fully complies with the overall intent of the directive.
6.30 p.m.
Baroness Phillips: Can the Minister put that in simple words? This Act will be so framed that no ordinary customer is ever going to take an action; it is going to be very complicated. As regards frozen chips, surely that is not an industrial process. It is simply freezing. Can that be an industrial process?
Lord Lucas of Chilworth: Would that it were only freezing! If one suggests that to the chip makers of the United Kingdom, they will say it is a good deal more than that. I myself am not involved in food processing but it seems to me that, having accepted some potatoes from the wholesaler or the farmer or whoever I buy them from, there are a number of things which I, as a potato processor, should like to do. I should probably want to grade, which we have discussed earlier and which is not an industrial process. I should perhaps want to wash. We have discussed that and decided that if it happens inside the farm it is not an industrial process. I should want to peel; I should want to cut; I may want to regrade; I then may want to freeze and package. We thus have a number of processes which I should describe and which could quite reasonably be seen and accepted as industrial processes.
Lord Denning: May I suggest to the Committee that the directive itself is of the first importance? Further-more, I suggest that the English translation as given to us should be what we go by. We do not know enough about the other languages and we ought to go by the meaning of the directive in its English sense. It is plain to me that "initial" processing is very different from "industrial" processing. The initial process is the beginning process; the words "industrial process" mean all sorts of industrial operations. That may be a very important provision in the directive in that people will be exempted from strict liability for agricultural products and the like. In other words, this word "initial" in the directive may be of the first importance and I very much doubt whether it is open even to this Government to alter the directive in this way. I myself feel that there is a strong case for saying that the Government have to implement the directive. It can be expanded and explained, if you like, but not altered; and that may save a lot of trouble hereafter, because the word "initial" can go before the European Court of Justice for interpretation. It would be very unfortunate if our courts, in interpreting the word "industrial", came to a different conclusion. I should have thought it was much the safer course to follow the directive and to keep the word "initial".
Lord Lucas of Chilworth: I always listen carefully to the noble and learned Lord, Lord Denning. Normally I like to agree with him. However, in looking at the interpretation of the directive, while it may be quite clear what is meant, that must be translated into a common usage or common understanding in the English language. We have taken Paragraph 3 of the preamble into consideration. The preamble states:

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"Whereas liability without fault should apply only to moveables which have been industrially produced; whereas, as a result, it is appropriate to exclude liability of agricultural products and game, except where they have undergone a processing of an industrial nature which could cause a defect in these products; whereas the liability…"
and so on. It is surely abundantly clear what is meant by the directive. We have attempted, and I believe successfully, in this modest measure to put into common usage that which is commonly understood in describing the industrial process as distinct from the initial process.
Lord Morton of Shuna: I find the explanations of the noble Lord, Lord Lucas, quite extraordinary. In the first place, he says that the words in Article 2,
"have undergone initial processing,"
depend on the translation. Is he saying that in German, French, Italian, Spanish or whatever other languages are now the approved languages of the Community, "industrial" is the same word as "initial"? If so, perhaps he can tell us the foreign languages in which "industrial" equals "initial". I do not think he will find them.
Secondly, the noble Lord has referred to Clause 1(2)(c). That clause has nothing whatever to do with agricultural produce; agricultural produce is only used as an example. It consists of a product which has essential characteristics attributable to a process which is industrial or some other process. That is not necessarily anything to do with agricultural produce.
Thirdly, if the noble Lord looks at the directive, it contains four sentences beginning:
"Having regard to the Treaty,"
or having regard to various other things. It then has "Whereas" 13 times. It then states:
"HAS ADOPTED THIS DIRECTIVE: Article 1…"
and so on. Now what comes after the word "directive" in the official version? It may be possible to go to the preamble to interpret what is meant if there is a doubt as to what an article may mean. But if there is no doubt about what the article means, we cannot go back to the preamble and say: "No, the article did not mean what it said and we must look at the preamble". That is like looking at the clauses of this Bill and saying: "The Bill does not mean what it says and we must look at the Explanatory and Financial Memorandum". Surely we cannot do that. "Initial processing" means initial processing and it does not equal industrial processing. The directive says it and we should stick to it. I regret that I cannot withdraw this amendment.
Lord Stanley of Alderley: Perhaps I may add a word of support for my noble friend on the Front Bench. Earlier this afternoon at Question Time there was an interchange as regards simple language which would enable us all to understand legislation. As a potato producer, it is clear to me that when my process finishes industrial processes start. As my noble friend has said, the potato comes into the store and I sort it out. It is clear to me that that is not an industrial process. However, if we put the word "initial" in, I may have to think again. At the end of the day, I must interpret this legislation; we have been told that earlier
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this afternoon. I hope that my noble friend on the Front Bench will resist this amendment.
Lord Morton of Shuna: With the leave of the Committee, perhaps I may come back on that. If the noble Lord looks at the definition of the word "factory" in the Factories Act, it is defined as being premises in which manual labour is employed on a process which includes sorting. Therefore, if one has a situation in which potatoes are brought into a shed and then cleaned and sorted by manual labour and put in bags (possibly by machine), one may well have the Factories Act applying to that farm shed. I do not withdraw the amendment, and I beg to move.
Lord Lucas of Chilworth: The noble Lord is obviously going to ask the Committee for its decision on the amendment. To be quite honest, I think the noble Lord is being rather pedantic. At the end of the day, whatever word is put in will be determined by the European Court. Our job is to make the interpretation of that into English law as clear as we can. It is an absolute red herring to draw the German, Spanish and Italian language across the path of the Committee. No doubt the Germans, the Spanish and the Italians are having the same difficulties as we are having in writing the directive into their domestic laws. I believe it is quite clear within the context of this Part of the Bill what is an initial process and what is an industrial process. I hope that noble Lords will support me in that belief by rejecting the amendment.
Lord Morton of Shuna: If I may be pedantic and come back again, this is the Parliament of Great Britain. I object to the noble Lord referring totally to English law; Scots law comes into it, too.
6.41 p.m.
On Question, Whether the said amendment (No. 14) shall be agreed to?
Their Lordships divided; Contents, 61; Not-Contents, 104.

DIVISION NO. 2

CONTENTS

Airedale, L.

Hughes, L.

Allen of Abbeydale, L.

Irving of Dartford, L.

Amherst, E.

Jacques, L.

Ardwick, L.

Jenkins of Putney, L.

Aylestone, L.

John-Mackie, L.

Broadbridge, L.

Kennet, L.

Brockway, L.

Kilbracken, L.

Burton of Coventry, B.

Kilmarnock, L.

Carmichael of Kelvingrove, L.

Kirkhill, L.

David, B. [Teller.]

Lloyd of Kilgerran, L.

Denning, L.

Lockwood, B.

Diamond, L.

Lovell-Davis, L.

Elwyn-Jones, L.

McIntosh of Haringey, L.

Ewart-Biggs, B.

McNair, L.

Ezra, L.

Milner of Leeds, L.

Falkender, B.

Morton of Shuna, L.

Gallacher, L.

Nicol, B.

Galpern, L.

Northfield, L.

Gladwyn, L.

Oram, L.

Graham of Edmonton, L.

Perry of Walton, L.

Grey, E.

Phillips, B.

Hampton, L.

Pitt of Hampstead, L.

Hanworth, V.

Ponsonby of Shulbrede, L. [Teller.]

Harris of Greenwich, L.

Howie of Troon, L.

Prys-Davies, L.

763

Robson of Kiddington, B.

Taylor of Blackburn, L.

Rochester, L.

Turner of Camden, B.

Seear, B.

Underhill, L.

Shackleton, L.

Whaddon, L.

Stedman, B.

Williams of Elvel, L.

Strabolgi, L.

Wilson of Rievaulx, L.

NOT CONTENTS

Ampthill, L.

Hives, L.

Auckland, L.

Hooper, B.

Beaverbrook, L.

Hylton-Foster, B.

Belhaven and Stenton, L.

Kaberry of Adel, L.

Belstead, L.

Kinloss, Ly.

Bessborough, E.

Lane-Fox, B.

Birdwood, L.

Lauderdale, E.

Bledisloe, V.

Lawrence, L.

Boston, L.

Lindsey and Abingdon, E.

Boyd-Carpenter, L.

Long, V. [Teller.]

Brabazon of Tara, L.

Lucas of Chilworth, L.

Brougham and Vaux, L.

Lyell, L.

Broxbourne, L.

Macleod of Borve, B.

Bruce-Gardyne, L.

Margadale, L.

Burton, L.

Marley, L.

Butterworth, L.

Marshall of Leeds, L.

Caithness, E.

Merrivale, L.

Cameron of Lochbroom, L.

Mersey, V.

Campbell of Alloway, L.

Monk Bretton, L.

Camegy of Lour, B.

Monson, L.

Camock, L.

Mottistone, L.

Cathcart, E.

Moyola, L.

Clitheroe, L.

Munster, E.

Coleraine, L.

Newall, L.

Colville of Culross, V.

Norfolk, D.

Cowley, E.

Onslow, E.

Cox, B.

Orr-Ewing, L.

Craigavon, V.

Pender, L.

Davidson, V. [Teller.]

Penrhyn, L.

De La Warr, E.

Peyton of Yeovil, L.

Derwent, L.

Portland, D.

Dilhorne, V.

Renton, L.

Eden of Winton, L.

Rodney, L.

Elliot of Harwood, B.

Russell of Liverpool, L.

Elliott of Morpeth, L.

Sanderson of Bowden, L.

Elton, L.

Selborne, E.

Fairfax of Cameron, L.

Shannon, E.

Faithfull, B.

Sherfield, L.

Forte, L.

Shrewsbury, E.

Fortescue, E.

Skelmersdale, L.

Fraser of Kilmorack, L.

Stanley of Alderley, L.

Gardner of Parkes, B.

Strange, B.

Glanusk, L.

Strathclyde, L.

Gowrie, E.

Sudeley, L.

Gray of Contin, L.

Swinfen, L.

Greenway, L.

Torrington, V.

Gridley, L.

Trumpington, B.

Haig, E.

Ullswater, V.

Halsbury, E.

Vaux of Harrowden, L.

Harris of High Cross, L.

Whitelaw, V.

Henderson of Brompton, L.

Windlesham, L.

Hesketh, L.

Wise, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.49 p.m.
Lord Bruce-Gardyne Lord Bruce-Gardyne moved Amendment No. 15:
Page 2, line 49, at end insert—
("( ) This section shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint, and such order shall not be laid before Parliament until the Secretary of State is satisfied that insurance against the liabilities imposed in this section is available to the persons mentioned in subsection (2) above at acceptable commercial rates.").
The noble Lord said: I beg to move the amendment standing on the Marshalled List in my name and that of the noble Lord, Lord Clitheroe. The Committee will appreciate that the purpose of this amendment is to suggest that Clause 2 of the Bill should not be brought
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into effect unless and until the Government have satisfied themselves that insurance at acceptable commercial rates is available to suppliers who fall to incur liability under the terms of the clause.
I was unable to attend the Second Reading and perhaps that is just as well because it would be fair to say that the Bill was given a fairly enthusiastic reception on all sides. It might have been painful to enter a mildly dissenting note. I confess that I have always had a faint suspicion that when one reads a proposal for consumer protection legislation one is well advised to look out for the interests of the consumer. I have always believed that consumerism and consumers are, as King Charles I said of monarch and people, clear, different things. Indeed, I sometimes wonder whether consumerism and the consumer are not totally opposed to each other's interests and concerns.
Usually, when one examines these matters one tends to find that the effect of consumer protection action is to raise the price to the consumer or perhaps, as my noble friend Lord Peyton said on the first group of amendments, to deprive the consumer of supply altogether. I think that there is a real danger of that happening as a result of this Bill.
We have heard much this afternoon, particularly on the first group of amendments, about availability of insurance for this purpose. Therefore, I felt that it was desirable that we should probe the proposition a little more closely. I am particularly aware that on Second Reading my noble friend Lord Clitheroe raised some measured doubts about this matter and I therefore apologise to him for stealing the launching of his fox. I am not sure if that is the correct technical term, not being a hunting man myself, but I hope that the sense of my proposition will be understood. At any rate, I am delighted that my noble friend has joined me in this amendment and I am sure we look forward to his comments from his position of considerable experience.
As I said, we have heard a lot about the availability of insurance cover for this purpose. The first thing that has to be said is that even if insurance cover is available it will be expensive. One of the interesting aspects of those in the consumer protection lobby is that they seem to be the last surviving believers in the concept of a free lunch. They seem to believe that if additional responsibilities and burdens are loaded upon providers of goods and services those additional costs will somehow be absorbed and will vanish. The reality, of course, is that they must and will be passed on to the customer.
In that context I want to draw attention to the comments of the Association of Insurance and Risk Managers in Industry and Commerce which have been highlighted by the CBI. I know that the noble Lord, Lord Williams, made it quite clear that any information coming from that source must be treated on the Benches opposite with deep disapprobation. But I hope that, by now, that momentary passion has passed. I quote what the association said in a letter dated 23rd December to my honourable friend the Minister for Consumer Affairs:
"While manufacturers and suppliers are prepared to accept responsibility for their products they cannot realistically fund these liabilities without insurance protection".

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The association goes on to point out that high risk and high-tech research and development-based industries in this country are already having real difficulties in getting appropriate cover for product liability at any price.
The CBI also quotes the example of one large, unidentified company in the high technology field which has apparently informed the CBI that two years ago it could obtain £100 million of product and public liability cover for all its business except aerospace. This year it hopes to obtain £30 million for three times the premiums and that on terms which are worse in several respects, although I shall not delay the Committee by giving them. That is the situation we now face before the passage of this Bill in which we have, for better or for worse, chosen not to absorb the possible derogation to limit damage in any particular instance to £40 million. Therefore, we could be talking of very large liabilities.
There was some discussion on Second Reading about experience in the United States. Here again, I think it is perhaps relevant to give some of the instances produced by the CBI. One that particularly concerns me, because I have a personal interest in the problems of deaf children, is the fact that consequent upon the cost of product liability insurance—and it is a crippling cost in the United States—only one manufacturer in the United States now manufactures the combined measles-mumps and rubella vaccine. That is an example of how access for the consumer is being constrained.
Of course, various noble Lords said on Second Reading, "Yes, but we do not and, thank God, never will be faced with the way in which the so-called contingent fee system operates in the United States." This is where the lawyers themselves often have a vested interest in promoting exaggerated claims. I was very interested to hear what the noble Lord, Lord Williams, had to say on that point, reported in col. 1008 of Hansard on 8th December. He said, referring to the Government:
"I am somewhat less sanguine than others—and I have to say this—on their ability to prevent the contingent-fee system"—
or what I believe is referred to in the trade as "ambulance chasing"—
"under which entrepreneurial lawyers seek business on the basis of a success fee, from encroaching here."
That is possibly a wise note of reservation. All that one can say with confidence is that what is happening in the United States—and we can see it all the time—is that because of the enormous premiums which are now required to obtain insurance cover against such propositions as product liability, and in some cases the inability to obtain insurance cover at all, costs escalate dramatically to consumers and many products are liable to disappear from the market place completely.
I do not want to go on to the impact which might be expected to occur in this context if we were to remove the development risk derogation. We shall come to that later and I do not want to encroach on those debates. However, I want to suggest to the Committee that we shall be doing the consumer no service at all if, as a result of this legislation, we oblige manufacturers and suppliers of service to undertake huge additional
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premiums to cover possibly unspecifiable risks in the future.
By way of conclusion, may I say that I notice that during the Second Reading debate my noble friend the Minister said, reported at col. 1058 of Hansard, that,
"there will be no excessive rise in the cost of insurance as a direct result of the directive being implemented".
I say to the Committee that if that is indeed the case, and if the Government are confident that it is indeed the case, perhaps they should have no difficulty in accepting my amendment. I beg to move.
7 p.m.
Lord Denning: I am afraid that this amendment goes against the whole trend of our law. In recent years we have extended beyond question the liability for negligence.
In the case of many injured people, in particular those with brain damage, those who have been termed "Sleeping Beauties" and the like, damages can rise to half a million pounds or more. Those cases—and Members of the Committee will have seen them in the papers—attract enormously high damages. There is also professional liability, whereby solicitors and accountants, for instance, insure against their liability for negligence, which may run into millions of pounds. In all such cases, in assessing damages the law has always said that it does not take into account the question of insurance. Indeed, when I was young and practising at the Bar one could not even mention to a jury whether or not the defendant was insured. Of course that is possible now, if need be. On the other hand, the law has said that in assessing damages the fact of insurance is irrelevant and not to be taken into account.
In a way I can see very well the argument on the other side. There is no doubt whatever that in the United States and elsewhere it has meant an increase in premiums and therefore an increase in charges to the consumer. I can see that argument entirely. However, Lord Pearson's committee rejected it and I must say that in conformity with the general principles of the law we ought not to consider this amendment unless it is in the wider context of the assessment of damages for negligence in other cases. I sympathise with the objective but I am afraid that I cannot support amendment.
Lord Airedale: I was pleased to hear the noble and learned Lord, Lord Denning, say that there is an argument on the other side. Indeed there is. This Bill imposes no maximum limit on liability and it is impossible to obtain unlimited insurance. I made that point in my Second Reading speech. I particularly urged the Government, if it were necessary, to commission an underwriting broker to go round Lloyd's to see whether he could find anywhere unlimited liability insurance. It is impossible. No underwriter, whether in Lloyd's or in an insurance company, will subject his principal to unlimited liability. To do so would be bad business.
In some outlandish event such as occurred in the famous Polemis case that is mentioned in the law books, where the burning down of a ship led to the burning down of the dock and the subsequent burning

767
of a number of other ships at that dock, tremendous liability can occur. No underwriter will underwrite unlimited liability when such an event may occur. He would bankrupt his company, or his syndicate, as the case may be, and the injured party would not receive his compensation. Because of that circumstance it remains a fact that at some time some company or producer will be faced with a liability against which he was not able to insure at all. He will be made bankrupt. If it is a small company his employees will be put out of employment, the injured person will not get his compensation and there will be tears all round.
In my speech at Second Reading, which I promise not to repeat at this juncture, I pointed out that the enormous cost of insurance will be met by the consumer from an increase in the price of the goods that he buys, and it does not matter to him whether he pays for it in that way or by a modest increase in his national insurance contribution. If one deals with the matter in that way and says that these damages are to come out of national insurance, one sweeps away all the difficulties about proving who is responsible, whether it is the product or a component that is at fault, and how the manufacturer is to be traced. All those difficulties go out the window if one says that where accidental damage occurs liability comes out of national insurance. I strongly support this amendment despite what has been said by the noble and learned Lord, Lord Denning.
Lord Peyton of Yeovil: I, too, should like to support the amendment. I want to start by saying that I have never lacked admiration for my noble friend Lord Bruce-Gardyne for his daring and courage, but I never knew until this evening that he took those admirable qualities to the length of stealing the launching of someone else's fox, which is a most peculiar thing to do. Obviously, in achieving such a feat he has won for himself a place in history.
Perhaps of more merit is the amendment that he has moved and to which I hope my noble friend will give serious attention. Even if he does not accept it immediately tonight perhaps he will take it away and give it some very sympathetic consideration. I fear in this Bill the assumption that to protect the consumer is a good and praiseworthy action, and so there is a danger that the proposals contained in the Bill will be added to and increased during its passage through this Chamber.
I think we have to ask ourselves two questions. The first is: how does one protect the consumer effectively against a danger which is literally not only unknown but unknowable at the material time? The second is: who will pay and how much? As I pointed out in an earlier debate—I apologise for repeating it—in the end the consumer will be the person who suffers. It is he who has to pay for the end product, and he will do so by paying more or alternatively he will be denied goods or services which he would otherwise have liked to obtain.
I know the respect with which the noble and learned Lord, Lord Denning, is regarded in this assembly, but when he dismisses, albeit with some sympathy, the
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question of insurance costs and the burden that they represent upon producers, industry, and those who wish to apply their skills and assets to badly needed innovation, I must confess to some surprise and some disappointment, because in this particular context sympathy is of very little value, however deep and sincere and from however learned a source it may come. Certainly it does not compare with the kind of burden that the law could so easily and lightly place upon industry without beginning intelligently to count the cost.
In this country we are constantly expressing our disappointment with industrial performance and lamenting the lack of innovation. Hardly have we ceased doing so than we apply our minds to the question of how we can make matters more difficult, more onerous and more risky. I have a great deal of sympathy with my noble friend's amendment.
Lord Clitheroe: I should like to thank my noble friend Lord Bruce-Gardyne for his felicitous introduction. I was not chasing any particular fox; I am interested in the specific issue of insurance. I became worried about it before I spoke on Second Reading, and further research has not eased my anxiety. I wrote to my noble friend the Minister and he kindly replied to me and tried to put my worries to rest. However, the further information I have obtained on this matter confirms a geat deal of what worried me.
A recent survey was carried out by the Chemical Industries Association. Over 50 per cent. of the respondents, all the significant companies producing chemicals in this country, large and small, were experiencing difficulties with their insurance. The problems involved not just the premium but the level of cover being offered, the terms and conditions specified by the insurers, and in particular the policy wordings of the claims-made basis.
I am not an insurance person, but I am slowly becoming one. The claims-made basis is a current trend which will not provide adequate protection for claims which may only become manifest after a considerable latent period; in other words, a tremendous amount of the insurance that is, understandably, being sold on the market will not cover people down the road when some of these potential worries fall upon them.
The Association of British Insurers, which has been kind enough to write to me, for the most part represents primary underwriters. They rely on significant support from major European re-insurers which are the ultimate carriers of much of the risk. Those re-insurers may not support the Association of British Insurers, however helpful or welcoming they may be. The Association of British Insurers is confident that insurance cover will be forthcoming, but under the Bill it carries no responsibility for its members' actions and under the law no free insurance market is required to underwrite any risk that it wishes to avoid. In particular, even though the ABI is more sanguine than I am about the effects of the Bill, it agrees, as was said by one of the members of the Committee, that in the absence of a development risk

769
defence the amount of capacity would be reduced for those industries which have a heavy development risk.
I am speaking as a consumer of the insurance industry's services. If I cannot obtain the product, I cannot pass it on to my customers. The ultimate effect of the absence of capacity for insuring products of perceived high risks such as chemicals may be that the product would be put on the market either without any cover or with inadequate cover. In such cases, the ultimate consumer suffering damage would be the loser.
I do not want to labour the point, but I must repeat that there is a shortage of capacity now. The shortage after the legislation is in place will be greater. The only mitigating factor, which may go some way to avoiding disaster, is the inclusion of the development risk defence. I must commend the Government once again on the fact that that provision is in the Bill.
On Second Reading, I suggested that Part I should be implemented to coincide with the requirement of the directive; that is, at the end of July 1988. When summing up my noble friend the Minister said that the proposals had been around for some 10 years and that there should be no surprises in store for industry. He implied that six months would be adequate. I wish it were so simple. We must get this legislation through, apparently, to be law at the end of July 1988, but it was only in recent months that the insurance world's lack of capacity developed. I believe that it would be the height of folly to implement Part I until we can all be confident that capacity is available, will in the future be available and that the insurance industry can cope with the new dimensions of the problem. I hope that that can be achieved by July 1988. I am sure that it cannot be achieved within six months.
7.15 p.m.
Viscount Bledisloe: The noble and learned Lord, Lord Denning, sought to discourage the Committee from accepting the amendment on the grounds that it was contrary to some principle of English law to have a look at insurance on a matter of this kind. He said that English law had never had regard to insurance in any question of assessment of damages. With the greatest of respect to the noble and learned Lord, for whom I have also the greatest affection, it is not a question of assessment of damages; it is a question of the imposition of a new form of liability.
If one looks through the judgments of the noble and learned Lord himself, one will see that he has been the protagonist of the theory that in deciding in common law whether we impose a liability on someone, it is a question of public policy; and that in deciding a question of public policy, we should look to see who can best bear the risk and whether he can insure. Had I known about this point I am sure that I could have cited passages where the noble and learned Lord had said that. In my profession, it has been well known that if one were fighting a case before the noble and learned Lord and had the insurer behind one, one stood jolly little chance.
I hope that the Government will make it plain where they stand on this insurance point. Are they in the camp of the noble and learned Lord, Lord Denning,
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that all insurance is available readily, cheaply and with unlimited liability, or do they take the view expressed by the noble Lord, Lord Clitheroe, that if that were ever so it is certainly no longer so, and that insurance is now difficult and expensive to obtain and almost certainly limited in the extent of the risk covered? I hope the Government will make abundantly clear which of those views they hold. If they hold the latter, which I would suggest to them is the real position, and they believe that it will be difficult for people to insure, what do they expect the reasonable middle-sized manufacturer to do? Is he to continue trading at the risk of being bankrupted by this type of liability? What else is he expected to do?
The noble Lord, Lord Williams of Elvel, put the point that people would all get out of complying with this provision by doing all their trading through subsidiaries. I confess that I was a little puzzled as to how a subsidiary was to have no assets if it were doing the manufacturing. If anything is likely to induce people to put their business into subsidiaries, it is the risk of unlimited liability imposed upon them in circumstances where they cannot obtain insurance.
I hope that if the Government will not accept the amendment or commend it to the Committee, they will make plain what they say is the position on insurance.
Lord Harris of High Cross: I find it difficult to see how we can approach this issue without rehearsing many of the arguments that will come up under Clause 4. I want to add my support to the noble Lord, Lord Bruce-Gardyne. I am unhappy to find myself in total opposition to my noble and learned friend Lord Denning. It would be attractive if we could follow the noble Lord, Lord Airedale, along the lines of no-fault cover and in a sense collectivise or generalise the risk. My anxiety about that as an economist is that at the same time as we suppress the cost we remove the incentive to minimise the risk and take due care. However, the attraction of that is that by removing any consideration about negligence one would do the lawyers out of a good deal of profitable business, of which I would approve, and also reduce the toll of insurance upon the cost of production.
I was unable to attend the Second Reading, but if one reads that debate, it was a splendid pre-Christmas binge in which speaker after speaker almost competed in offering the benefit of protection for the consumer. It was Santa Clause: this is such a good thing we cannot have too much of it. One speaker used almost those words. The basic logic of economics is that there is nothing so good that one cannot have too much of it because one is involved in costs.
The whole issue in this amendment is whether these costs in some way are convertible into a fixed insurance charge that is manageable to the producer of products, or whether there is unlimited liability which threatens the continuance of the existence of the supplier, perhaps through no fault of his own. There is clearly a difference of opinion on this matter. We had a number of speakers at Second Reading, notably the noble Lord, Lord Graham of Edmonton, who argued that there were grounds for confidence that the risks were coverable by insurance.

771
The noble Lord was talking about Clause 4. He quoted the British Insurance Association. I do not want to be too cynical, but the British Insurance Association may have a good reason to advertise the availablility of cover. It would be good business for them and the increase in premium will be judged to be sufficient to keep them out of trouble although the cover they provide may not be sufficient to keep the manufacturer out of trouble.
I was impressed with the passage that the noble Lord, Lord Bruce-Gardyne, quoted. That was not the insurance industry recommending its products but the association of insurance and risk managers in industry and commerce. It was the customers of insurance. We have here the insurance industry saying, "We shall provide cover. Premiums may go up and costs may rise but we can provide cover". Members of the Committee take comfort from that pledge. However, those who are concerned to pay for cover and to specify the terms on which compensation will be payable are apprehensive.
I have in my hand the example quoted by the noble Lord, Lord Bruce-Gardyne, which indicates that, in some cases by an increase in premium and a reduction in the sum covered, there has been on this reckoning a ten-fold increase in costs: a third of the cover available for three times the premium. As the noble Lord said, that is before this Act comes into force. It seems to me that there is a genuine conflict of view. It is difficult to be dogmatic about it. We are moving into uncharted waters. We cannot be certain what effect this Bill will have on liability and the availability of insurance cover.
This amendment asks that the Bill should not be impeded in this matter. It simply says that the Bill should not come into force until the Secretary of State is satisfied that insurance against liabilities imposed in this section is available to the persons mentioned. If the noble Lords who spoke at Second Reading with confidence about the availability of insurance are correct, then this can come into operation at short order. However, as companies continue to try to buy cover against the heightened provisions of this Bill, if it is discovered that that is not so, then it would be a reason to pause.
Perhaps I may say in anticipation of the noble Lord, Lord Williams of Elvel, that I see no reason to resist the amendment. The delay will not occur unless the Minister discovers, against the expectations of many Members of the Committee, that there is real difficulty in acquiring cover against these new, so far unlimited, degrees of risk. There is therefore a minimum risk to us in passing the amendment if we assume that insurance provision will be available. It is no good accepting promises from the British Insurance Association before risks are brought to them and the cover and premium levels begin to be negotiated. That will take place very soon after this Bill looks like becoming law.
Lord Williams of Elvel: I have no wish to enter deeply into this discussion. I am very sorry that the noble Lord, Lord Bruce-Gardyne, was not here at
772
Second Reading because a lot of his points were properly Second Reading points. I wish to reserve what I have to say about insurance to a later stage in our debate. However, I must agree with Members of the Committee who have spoken, that there is an insurance problem. This is a matter which we shall be debating later.
Nevertheless the amendment moved by the noble Lord, Lord Bruce-Gardyne, is objectionable in a number of respects. First, if the amendment is accepted, the Secretary of State has discretion as to when he may bring this Act into force. There is an appointed day. There is a directive and the national legislation corresponding to the directive has to be in place by a certain day. If the conditions specified in this amendment are not met then the Secretary of State has a problem.
Secondly, it has been said that the insurance against the liabilities imposed in this section is available. As many noble Lords pointed out, this appears to be a moving target. At some point insurers will say that there is availability of cover; at other points insurers will say that there is not. One could have a situation where at one point the appropriate insurance authorities say that here is cover and three weeks later that cover disappears. The Secretary of State is therefore put in rather a difficult position.
Thirdly, on the question of acceptable commercial rates, the Secretary of State would be in a position of having to judge what was an acceptable commercial rate. I believe that this is a burden the Secretary of State would go a long way to avoid. My major points about the insurance problem will come at a later stage. I do not wish to go further at this stage.
Lord Lucas of Chilworth: What an interesting discussion this has been! Using the analogy that the noble Lord, Lord Airedale, used of a burning ship, a dock, and other ships, I hope that my noble friend Lord Bruce-Gardyne has not taken the opportunity this evening by virtue of his amendment (and I quote his article) of putting the Minister on a burning deck.
I fear that I shall not be able to accept his amendment. However, it has been useful not only for the Government but for the insurance industry to hear the various expressions of view. I am not able to accept this amendment, first, because it runs contrary to our obligations under the directive; and, secondly, because I do not believe that the insurance situation is as bad or as serious as my noble friend and others have suggested.
The question of the availability and cost of insurance has been raised frequently. It has been raised during our earlier discussions on the Bill, and certainly at very great length during the consultative period which preceded the introduction of the Bill. There have been some in industry who have told us that insurance will not be available. Indeed, they say that it is not available already to meet some of their needs. On the other hand, consumers and their organisations assure us that insurance is available and will continue to be available.

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The consumer organisations remind us to distinguish in particular between the effects of this Bill and the very genuine problems concerning product liability and product liability insurance in the United States market. My noble friend drew attention to this point. There was some substance in the point made by the noble and learned Lord, Lord Denning, on this matter. I think that the noble Lord would be the first to recognise in the American legal system the extent to which they go to law and the damages that are given under the jury system as distinct from the judge system here. The contingency fees and a whole range of matters that occur in the United States are quite different from the situation which obtains in this country, and all have an effect on insurance.
I turn to the one authoritative statement that we have on the matter from the people who should know, the Association of British Insurers. It says:
"By and large insurance companies are confident that insurance cover for liabilities under the new legislation will be available for current limits of indemnity at premium levels which will have only a marginal effect on the cost of production".
That is in its briefing which was sent to many people, including noble Lords, for the Second Reading of the Bill. It went on to express doubts about the amount of insurance capacity available should the development risks defence not be included. I think that this is the point which was made by the noble Lord, Lord Airedale, when he said that it is impossible to get unlimited liability insurance, and he went on to talk about bankruptcy.
The ABI said that it was confident of cover for liabilities under the new legislation, the new legislation being that legislation which is before the Committee. I say this only as a prelude to later debates we shall have on Amendment No. 39, the noble Baroness's amendment, and Amendment No. 54, the noble Lord's amendment. Like the noble Lord and others, I do not want to go into that debate tonight. It may well be that there is a problem, but it is one which I have no doubt at all in my mind the insurance industry will overcome. I do not find any difficulty in being persuaded that the Bill will create a general crisis of insurance availability, or indeed cost.
The amendment is unnecessary and is not consistent with our Community obligations, as the noble Lord, Lord Williams of Elvel, reminded us, we are obliged by the directive to bring our legislation into force by July 1988. We cannot decide not to do so because there are problems with the availability and the cost of insurance. I should like to remind Members of the Committee that my honourable friend the Minister for Corporate and Consumer Affairs said in July that it was the intention of the Government not to bring this part of the Bill into force for at least six months after Royal Assent. That should give both the buyers and the sellers of insurance time, if I may use the term, to get their act together. We think that this is a reasonable balance between the industry's need to prepare itself and the desire of consumers to see early implementation.
My noble friend Lord Clitheroe raised the question of the trend of insurance policies to be made on a claims-made basis. This is largely a reflection of
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difficulties which the insurance market as a whole has had with existing long-term product liability business, most particularly in the United States. I have described the differences, which I think he accepts. It is a problem, but there is little evidence that the Bill will exacerbate it any more than it would any other current insurance business.
The noble Viscount, Lord Bledisloe, asked me to make clear the Government's position with regard to insurance. He asked me to anticipate what I might very well want to say later during the Committee stage of this Bill. I do not think that it is any secret to the noble Lord, Lord Williams. The Government's position is quite simply that we are not in the insurance broking business and we cannot offer a professional opinion. However, we should listen to what the insurance companies are saying. The noble Lord, Lord Harris, said that in his view this was good business for them. I also ask that industry why it does not want to take on that good business. I fall back upon what it said in its brief to us. There is no reason to suppose that insurance would not be available at premium levels which will have only a marginal effect on the cost.
That is my explanation and therefore I ask my noble friend not to press his amendment. I hope that he will withdraw it.
7.30 p.m.
Lord Bruce-Gardyne: I thank all Members of the Committee from all sides of the House who have taken part in this debate. I think it would be fair to say that, apart from the lone objections of the noble and learned Lord, Lord Denning, and the noble Lord, Lord Williams, all other noble Lords were speaking in support of the proposition which I advanced.
As regards the objection of the noble and learned Lord, like the noble Viscount, Lord Bledisloe, quite honestly I could not follow the connection between the proposition that the law does not take account of the cost of insurance premiums in arranging damages and the purposes of this amendment. I hope that the noble Lord, Lord Airedale, will not take it amiss if, in thanking him for his support for the amendment, like my noble friend Lord Harris of High Cross, I also add some reservations about the notion that we should take it to the national insurance account—in other words, the taxpayer should foot the bill. That is also a fairly horrendous proposition.
In the end the objection as advanced by the noble Lord, Lord Williams, and by my noble friend Lord Lucas is that this amendment would conflict with our obligations under the directive. As my noble friend Lord Clitheroe pointed out, I think that the straight-forward answer is that the directive is not due to come into effect until July, 1988, that being the final chopper date. We still have time and, I submit that we may need it, to see whether it is true that cover will be available at acceptable cost on the scale required.
In conclusion, all I can say is that my noble friend put an idea in my head. He pointed out that my honourable friend the Minister for Corporate and

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Consumer Affairs said that this section would not come into effect for six months after Royal Assent. Perhaps we may put in a provision at a later stage to stretch that to 12 months rather than six. With that thought in the mind of Members of the Committee, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Beaverbrook: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
Lord Ponsonby of Shulbrede: My Lords, before the next item of business it taken, I wonder whether the noble Lord can indicate that we shall not return to a consideration in Committee of the Consumer Protection Bill until 20 to nine.
Lord Beaverbrook: My Lords, we were intending to deal with this after we had taken the Second Reading of the Gaming (Amendment) Bill. I suggest that we should not come back to the Committee stage until half-past eight, if that would be acceptable.

Gaming (Amendment) Bill [H.L.]
7.41 p.m.
Lord Harris of Greenwich: My Lords, I beg to move that this Bill be now read a second time.
This Bill seeks to amend Section 18 of the Gaming Act 1968. That Act governs the operation of commercial casinos in England, Wales and Scotland. The effect of this Bill would be to allow the hours for casino gaming on premises licensed under the Gaming Act 1968 to be extended at the end of the Saturday night/Sunday morning gaming session. The extension proposed is for an extra hour in London and two hours in the rest of England, Wales and Scotland.
This amendment of the law was recommended by the Royal Commission on Gambling, presided over by the noble Lord, Lord Rothschild, which reported in July 1978. Its purpose is threefold: first, to remedy the discrimination which at present exists between London and the rest of the country by applying a uniform closing time. Secondly, to bring the Saturday night/Sunday morning closing hour into line with the other six days of the week. Thirdly, to cater for the increased number of players on what is by far the busiest night of the week.
The general hours permitted for casino gaming on weekdays are the same throughout Britain—namely, from two o'clock in the afternoon until four o'clock the following morning. No change is proposed in those uniform hours, which are provided for by regulation under the Gaming Act 1968. Only the sessions which begin on Saturday afternoons are at present different.
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The start of the session is the same as for the rest of the week—namely, two o'clock in the afternoon. It is at closing time, in the early hours of Sunday morning, that variation and a double standard applies. Closing time in the inner London area is 3 a.m., while in the rest of England, Wales and Scotland it is 2 a.m.
The report of the Royal Commission put its views as follows:
"We find it rather illogical that casinos should have to close one or two hours earlier on Satusday night/Sunday morning (which is, perhaps, the most popular night of the week for gaming) than on other nights, and we therefore recommend that the closing time for casinos should be 4 a.m. on each night of the week and in all parts of the country."
The report goes on to observe that:
"It would still be open, of course, to the local licensing justices to impose (under Schedulee 2, paragraph 24 of the Gaming Act) more restrictive hours on particular premises when this seemed necessary to prevent disturbance or annoyance to the occupiers of other premises in the vicinity."
This Bill does no more than apply the recommendations of the Royal Commission.
There is one point in relation to Scotland which I should mention. There, casinos cannot open on Sunday until the evening at 7.30 p.m. (as against the existing 2 p.m. in England and Wales). The Royal Commission proposed no change in this, nor does the Bill.
The Gaming Board for Great Britain, which is the statutory body responsible for overseeing all gaming, has been consulted about the proposals in this Bill. The Board asked, perfectly reasonably, for evidence of the need in terms of demand. That evidence was provided by way of a census of attendances by members and guests at closing times on the premises of some 60 licensed casinos across the country, over a period of four weeks. The census showed that, in London, at the closing time on the Saturday night/Sunday morning gaming session average attendances were 90 per cent. more than the highest at closing time on any weekday and 175 per cent. more than the least busy weekday. In the Provinces, attendances at closing showed an increase of 32.5 per cent. on Saturday/Sunday over the next busiest weekday and a nearly 120 per cent. increase over the least busy weekday.
The Gaming Board were satisfied that the demand shown supported the case that there is a need for casino gaming to be permitted until 4 a.m. on Sundays and raised no objection to such an extension of hours. They agree with the Royal Commission recommendation which, as I have indicated, this Bill seeks to implement.
There is a further point I should mention. Casinos are not open to the public at large. In law, they are clubs with restricted access confined to members who have, under the terms of the Gaming Act, made a considered decision that they wish, with their bona fide guests, to take part in casino gaming. What this amending Bill seeks to do is not to introduce gaming on Sundays. That already takes place in 120 licensed casinos in this country. The Bill proposes a modest extension of the already permitted hours for reasons of consistency and uniformity, and on the basis of an established demand.

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Finally, I would close by saying that the casino industry is a significant source of foreign currency earnngs from overseas visitors to this country. Last year foreign source earnings by British casinos were something in the region of £150 million. In addition, there is the unquantifiable spin-off from the bulk of their members (who are foreigners in most cases) at hotels, restaurants and theatres.
It seems to me, therefore, that at a time when our manufacturing base has contracted so significantly the statutory framework which applies to an important service industry such as this deserves to be reconsidered, particularly when there is a clear and unequivocal recommendation from a Royal Commission. The Bill is a modest measure, and I hope noble Lords will give it their support. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Harris of Greenwich. )
7.47 p.m.
Lord Harding of Petherton: My Lords, I rise to support the Bill, but first I must declare an interest, in that since 1973 I have been chairman of the British Casino Association, which includes in its members over 90 per cent. of the gaming licence-holders in Great Britain. Therefore, I think that I can fairly speak on behalf of the casino industry as a whole when I say that we hope that this Bill will work its way successfully through Parliament.
There are two points which have already been mentioned by the noble Lord, Lord Harris of Greenwich, which I should like to emphasise. The first point is the question of unstimulated demand. As the noble Lord, Lord Harris, has explained, at the suggestion of the Gaming Board the association conducted a census which has conclusively shown that there was unstimulated demand for the extension of the hours of gaming on Sunday morning. That is the main point of the Bill and it fits in with the recommendations of the Royal Commission on Gambling.
The second point is that the provisions in this Bill are really permissive. It does not mean that all casinos up and down the country will automatically remain open for gaming until 4 a.m. on every Sunday morning. If there are objections by local residents or other bodies because of the risk of disturbance or annoyance, they can be dealt with by the licensing authorities, who have powers in the Act to impose further restrictions and fix the hours of closing on Sunday mornings in the case of particular casinos where there are local objections.
So I submit that this Bill is entirely in keeping with the general purpose and provisions of the Gaming Act. There are contained in the Act itself safeguards for dealing with any cases of risk of disturbance or annoyance to local residents. Therefore, I strongly support the Bill. Finally, it may interest the House to know that the arrangements for regular and informal discussions and consultation on matters of common concern between the Casino Association and the Gaming Board which were instituted when the noble Lord, Lord Allen, was chairman of the Gaming Board, are continuing under his successor as chairman of the Gaming Board. That has resulted in very much better,
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more constructive and more objective relationships between the industry and the Gaming Board. The fact that this Bill was discussed and hammered out between the two bodies is proof of that fact, and I think it is a big step forward as far as the relationships between the industry and the Gaming Board are concerned.
I believe this Bill will be of benefit to the industry. It will be in keeping with the whole purpose and spirit of the Gaming Act and it does not in any way alter the safeguards which are in the Act itself for dealing with cases where there are justifiable local objections on grounds of the risk of disturbance or annoyance. I support the Bill.
7.53 p.m.
Baroness Ewart-Biggs: My Lords, I am very grateful to the noble Lord, Lord Harris, for having presented his amendment to the Gaming Bill with enormous brevity and also with very great clarity. I was also happy to listen to the noble and gallant Lord, Lord Harding, adding his own approval to this intended reform, with all the experience and knowledge of the industry that he commands. I was most grateful to hear him say that this had been thouroughly discussed and thought out by the industry and his association.
I think there is no doubt, as the noble Lord, Lord Harris made very clear, that this change brings a consistency into the law and a uniformity which was not there before. It also responds to a demand which appears from the statistics he gave to have been proved without any shadow of doubt. I should also like to think that it seems very reasonable to allow people who like to go to casinos to stay up late on the one night when they will be able to have a lie-in the next day. So it seems to respond both to the needs of the casino and also to the wishes and comfort of the people who go there.
There could have been only one possible reservation, which would have been that the residents in the vicinity were inconvenienced. But as I understand it from the noble Lord, Lord Harris, the local licensing justices would still be empowered to impose more restrictive hours on the premises in question. So I think one can only agree with the change that the noble Lord, Lord Harris, has put forward.
But I wonder if I may just end by saying that I think there is a reasonable concern that one might have about the dangers of piecemeal reform of this kind to an area of life which is as important, as vulnerable and delicate as is the gaming law. After all, the noble Lord, Lord Harris, introduced a private Bill to make an amendment to the Gaming Act at about this time last year which also implemented recommendations from the Rothschild Report. But, who knows? Perhaps the noble Lord may put forward a further change next year. I think there is a justified case for concern and it is the same concern as I voiced in the recent debate on the Licensing (Restaurant Meals) Bill: it worries me that changes in these very important areas such as licensing and gaming should be treated in this piecemeal way rather than the Government developing a comprehensive policy to counter the adverse consequences of gaming or drinking, having

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worked out what those consequences are and what they should do to deal with them. Having done that, they could fashion their laws accordingly. But, failing that, I should like to support the amendment put forward this evening.
7.57 p.m.
Lord Beaverbrook: My Lords, I should like to thank the noble Lord, Lord Harris of Greenwich, for giving such a clear explanation of the reasoning behind the Bill. I am glad to be able to confirm to your Lordships that the Government regard the Bill as acceptable in terms both of what it seeks to achieve and the way in which the Bill is drafted.
The proposal in the Bill for an extension of opening hours for casinos is a modest one. What is at issue is an additional hour in the early hours of Sunday mornings for casinos in the West End of London and an additional two hours for casinos elsewhere in the country. In looking at this issue we attach importance to the facility for the licensing authority to restrict opening hours for casinos within the statutory times if this is held to be appropriate for particular casinos, to prevent disturbance or annoyance to others in the vicinity. The Bill leaves this power unaffected. That is to say it will be open to licensing justices, if the Bill becomes law, to impose a restriction obliging a particular casino to close earlier than 4 a.m. on Sunday mornings if the evidence points that way.
As the noble Lord, Lord Harris of Greenwich, said, the proposal to standardise the latest possible closing time at 4 a.m. on Sunday mornings has good credentials: this change was recommended by the Royal Commission on Gambling in 1978. We have consulted the Gaming Board for Great Britain, the body expert in the difficulties to which casinos can give rise, which was not in sympathy with this precise proposal when the Royal Commission reported. The board is now content with what is proposed. We understand that there is some evidence from the attendances in casinos in the early hours of Sunday morning that there will be a demand for gaming facilities up until 4 a.m. This suggests that the Bill is consistent with the approach taken by the Gaming Act 1968 and by successive Governments that facilities for commercial gaming in this country should be allowed, to the extent necessary, to meet the level of existing demand. The Bill does not, of course, pave the way for casinos to be open right around the clock, which would not be acceptable. We have consulted the police and those involved in the licensing of casinos, who have no objection to the Bill, subject to stressing the ability, already in the legislation, for earlier closing times to be attached, as a term of the licence, if justified by local conditions.
In conclusion, the Bill provides for a modest change in the statutory hours for casinos which in the Government's view will not weaken the controls provided in the Gaming Act 1968. The measure will be welcomed by the casino industry and its clientele as removing a restriction which is for them irritating and illogical, since the late Saturday night period is one of
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the busiest in the week. I wish the Bill a safe passage in your Lordships' House and in another place.
7.59 p.m.
Lord Harris of Greenwich: My Lords, I am grateful for what the noble Lord, Lord Beaverbrook, has just said and also for what the noble Baroness said a few moments earlier. I think this is a useful, modest Bill and I very much hope it will have the same uninterrupted passage as did the last Bill.
The noble Baroness, who welcomed the Bill in generous terms, of course, made a perfectly reasonable point when she raised the question of piecemeal legislation. Unhappily, our experience in whatever part of the House we may sit is that there is such a degree of pressure on all governments in matters of this sort that if one does not approach them by these means, the only thing one can be absolutely certain about is that the unsatisfactory situation will go on year after year after year. The only way in which that problem can be resolved is if private Members either in another place or in this House bring forward legislation. The fact is that the Royal Commission studied the matter and made this recommendation, as it did the last, and I think it is right for us to proceed. I am grateful for everything that the noble Baroness said, and indeed for what the noble Lord said a few moments ago.
This brings me to the speech of the noble and gallant Lord, Lord Harding. On the last occasion that we debated these matters I was able to express on behalf of the whole House our pleasure at seeing the noble and gallant Lord, and to wish him a very happy 90th birthday. We rejoice at seeing him in his place once again today. I am particularly glad to see him because he has not been well recently, and only his considerable interest in this matter has brought him to the House today.
I think I can give a guarantee to the noble Baroness that we shall not be troubling the noble and gallant Lord, Lord Harding of Petherton, in the next Session of Parliament on this particular matter. Nevertheless, we are grateful to him, with his considerable knowledge of the industry, for having come to the House today and for having given us his views on this proposal.
With that, I would once again thank everybody who has spoken in this brief debate, and very much echo what the noble Lord, Lord Beaverbrook, said in hoping that this Bill will, in fact, get on to the statute book. I beg to move.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
Lord Hesketh: My Lords, I beg to move that the House do now adjourn during pleasure until 8.30.
Moved accordingly, and, on Question, Motion agreed to.
[The sitting was suspended from 8.2 until 8.30 p.m. ]

Consumer Protection Bill [H.L.]
House again in Committee on Clause 2.
The Deputy Chairman of Committees (Earl Cathcart): In calling Amendment No. 16 I should advise the Committee that if it is agreed I cannot call Amendments Nos. 17 or 18.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 16:
Page 2, line 50, leave out subsection (6) and insert—
("(6) The liability under this Part shall not affect any other right, liability or obligation however arising.").
The noble Lord said: This is an attempt to do what the noble Baroness, Lady Elliot, earlier in the day asked that her Majesty's Government should do, which was to produce plain and straightforward English. The only purpose of this amendment is to render Clause 2(6) into something that is not just gobbledegook. As it is, the subsection reads:
"This section shall be without prejudice to any liability arising apart from by virtue of this Part".
That is a piece of English that I suggest could be improved. I have endeavoured to improve it by putting forward the amendment:
"The liability under this Part shall not affect any other right, liability or obligation however arising".
I think that is more understandable to any normal person. I beg to move.
Lord Denning: I suggest that each of them has the same meaning, but it is clearer and better to have the amendment.
Lord Cameron of Lochbroom: A slight blast of trumpets from the noble and learned Lord. A later amendment, Amendment No. 18, is aimed to take out what might be described as the most infelicitous phrase in this subsection. My noble friend Lord Beaverbrook will be replying to that, but the indications are that he will give it a fair wind. If that infelicity were taken out one would find that the subsection would approximate to what I was attempting in an earlier debate to indicate was the purpose of expressing in this part of the Bill what we thought the directive was seeking to achieve. I said then that we wanted to use words which were known and precedented in our statutes. That is exactly what we have done in relation to the general thrust of this subsection, especially the use of the words "without prejudice to".
The noble Lord has used words derived from the directive, but it is directed to member states and does not indicate how they should put the directive into effect so far as their national law is concerned. The formulation we have adopted is one, leaving aside the words, "apart from by virtue or, which is common in United Kingdom statute law. This is a Bill related to the Health and Safety at Work etc. Act 1974. I notice that the use of that phrase "without prejudice" is to be found in Section 47(4) of the 1974 Act.
Because these words are precedented they are well known. I am sure that the noble and learned Lord, Lord Denning, will be able to support me on that. Therefore, they do not give rise to any difficulties that might occur when we depart from words that have
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been commonly used in statute. For that reason I advise the Committee against accepting this amendment for the reason the noble Lord proposed.
I should mention one of the problems that can arise if one departs from a well-precedented legislative recourse. For example, my noble friend in the next amendment is seeking to bring in a change which refers to a particular Act of Parliament. I shall be speaking in response to my noble friend's amendment, but if it were to be accepted provision to save the operation of that Act would have effects on whether it was intended that other Acts should be saved, and so on. When my noble friend moves his amendment I shall argue that that Act is clearly expressed and that it is unnecessary to bring in any reference to it.
Perhaps I should also say—because this amendment touches on the new subsection tabled as Amendment No. 19 in the names of the noble Lords, Lord Williams and Lord Morton—that we are sympathetic to Amendment No. 19 and I shall make that clear if necessary at the appropriate time. I note that it takes the opposite line to this amendment because it ensures that the other laws relating to liability and tort will be affected by Part I.
All I can say is that at this stage I have indicated that if that amendment is moved we shall look at it closely. It has certain difficulties in relation to making sure that when accepting the thrust of it we do not leave out something which should properly be included. While accepting that this is an attempt to cure what the noble Lord sees as an infelicity, and accepting that to do so in the more general terms which he suggests here would be appropriate and that difficulties could arise from that, I suggest that the noble Lord might prefer, since he has indicated the real point of it, to await the response which my noble friend Lord Beaverbrook will give to Amendment No. 18 and for that reason to withdraw the amendment.
Lord Morton of Shuna: I have never claimed, and I suspect I never will, to be an authority on the English language. Therefore, as my only purpose was to make this understandable, if the noble and learned Lord the Lord Advocate thinks this infelicity or the infelicity of the draftsmen in subsection (6) is better cured by the amendment of the noble Lord, Lord Airedale, I beg leave to withdraw this one.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees: In calling Amendment No. 17 I should advise the Committee that if it is agreed I cannot call Amendment No. 18.
Earl De La Warr Earl De La Warr moved Amendment No. 17:
Page 2, line 50, leave out from ("shall") to end of line 51 and insert ("have effect without prejudice to any liabilities arising otherwise than by virtue of this Act and without prejudice to any rights arising under the Civil Liability (Contributions) Act 1978.").
The noble Earl said: This amendment seeks to deal with one special part of manufacture and distribution, namely, pharmaceuticals, and in particular the retail pharmacists. I shall from now on call retail pharmacists chemists because that is in line with what we have been discussing and it is better understood.
A chemist who puts his name only onto a prescription, as is typically done, can for that reason find himself the sole defendant in any case arising from a defect. If the defect can be shown to have resulted from a fault in one of the ingredients obtained by the pharmacist from an identified manufacturer, I believe that there needs to be some provision whereby that manufacturer can be joined in any resulting action and made to pay some or even all of the compensation. But so far as I can see, as the Bill stands and taking into account particularly Clause 2(2)(b), there is no provision for such a recourse to the chemist. If a pharmacist and a manufacturer are sued together and both found liable, it would be for the court to make the apportionment of the damages and I am advised that an equal division would be the most likely result.
It seems to me that chemists, particularly the small ones—those who are not part of a big manufacturing or retailing chain—will be in a weak and potentially dangerous position. I believe they deserve the protection that would come from a right to have the manufacturer joined in any action and the resulting damages fairly split, taking into account, of course, whether or not the chemist could reasonably have been expected to have spotted the defect.
The Civil Liability (Contribution) Act 1978 provides at least one way—I do not pretend it is the only way—of dealing with the situation. Section 1 says that a person liable for damage
"may recover contribution from any other person liable in respect of the same damage".
Clause 2 gives the court complete discretion over the extent of the effective contribution to a point where there could be, if circumstances demanded, a complete indemnity.
I hope the Government will accept this amendment but I suspect they may find some difficulty. If they cannot accept it, I should be extremely grateful if my noble and learned friend would explain how we overcome what appears to me a really serious problem in the Bill as it stands. I beg to move.
Lord Morton of Shuna: I have a great deal of sympathy for the amendment proposed by the noble Earl, and I have a great deal of admiration for his courage in referring to pharmacists as chemists. The Law Reform (Miscellaneous Provisions) (Scotland) Bill in 1985 brought me and also, I think, the noble and learned Lord the Lord Advocate, a tremendous rebuke from the noble Lord, Lord Tordoff, for referring to pharmacists as chemists, and vice versa.
However, although I compliment the noble Earl on his courage, I wonder whether the amendment is really necessary. I agree with the sentiment behind it. It is clearly unreal that a pharmacist who puts his name on a bottle of pills produced by one of the big medicine companies such as Glaxo, Wellcome, or whatever, should incur the liability of the producer. However, I wonder whether, under Clause 2(2)(b), he is really holding himself out to be the producer. It is my experience that the pharmacist's label tells you how many pills to take but it does not say or imply that the pharmacist has produced the pills. Therefore I am not sure that this is the way to cure the difficulty.
Lord Hacking: May I briefly intervene? To move away from pharmacists for a moment, Article 5 of the EC directive specifically states that the joint and several liability provision should apply notwithstanding the right to have recourse to contribution. Thus it is quite plain from the EC directive that there is an intention to allow parties to use contribution proceedings against other parties when those other parties are also responsible for the defect or the wrong. I make that observation to widen the debate and I shall listen with hope to the answer from the noble Minister.
8.45 p.m.
The Earl of Halsbury: I speak as a chemist rather than as a pharmacist. I must remind the Committee that one cannot alter usage of the English language by statute. People will call themselves as they wish. I have not the slightest doubt that the noble Earl, Lord De La Wan, talks of a pharmacist as a chemist because he has done so all his life. So did I until I became a fellow of the Royal Institute of Chemistry and learnt the difference.
I was interested in what my noble friend Lord Hacking said a few moments ago. The issue before us is not what may have been intended by the European directive but what we are going to enact here in response to that directive. It seems to me that we must think out the procedures more carefully than has so far appeared in the course of this debate. For example, when I go to my general medical practitioner and he gives me a prescription I take it to the chemist, who goes to a bottle supplied by one of the big firms in the pharmaceutical industry. My GMP having said "50 so-and-sos", he doles them out and puts a little label on the bottle with his name and address on it and then says "Use as directed".
By this time I have completely forgotten my GMP's directions as to usage. I suppose therefore that about one per day or per night or something like that would not be bad for me until it seems to be so. It is really quite contrary to all principles of natural justice, I think, that the pharmacist should be held, as it were, in breach of duty if, say, the bottle from the pharmaceutical house was wrongly labelled or the contents were of a different strength, or whatever. I must speak up on the side of the noble Earl, Lord De La Warr, in seeking to redress this injustice or potential injustice.
In Sub-Committee B of the Select Committee on European Affairs, I find myself over and over again asking this question of witnesses:
"What are we trying to do by means of legislation? Are we, at one end of the spectrum, postulating an ideal world according to some formula or other in which the inhabitants of that ideal world will never have been consulted and which may not be to their liking, or are we seeking to remedy a current mischief?"
In terms of that rhetorical question which I ask witness after witness, I would ask the Government: what current mischief are we attempting to remedy? Unless you can identify a mischief and its remedy, it seems to me that a great deal of our legislation is otiose and we ought not to indulge in it. For this reason, if the noble Earl chooses to divide the Committee on this issue I shall follow him into the Division Lobby.
Lord Airedale: One practical point occurs to me. If you take a drug which is in fairly common demand in

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the form of pills, and the pharmacist (or chemist, as we call him) draws his supplies from time to time from various manufacturers of that particular drug or pill and if he then retails it in small bottles to his customers and there is a batch which is faulty so that the customer suffers injury, the pharmacist owes it to his customer to be able to identify the particular producer from whom he bought those pills. It is no good if he is going to say, "I get my supplies from different manufacturers and I cannot say for certain which of them sold me these particular pills in this little bottle." If that is the situation, the pharmacist owes it to the injured customer to be responsible for the injury.
Lord Cameron of Lochbroom: I had not anticipated such an interesting and extensive debate on this amendment. I am grateful to my noble friend for putting so clearly the points to be answered. As regards the first point, so far as pharmacists are concerned—and I use the word "pharmacists" advisedly—that is covered by the directive itself. I read from the first paragraph of Article 3:
"'Producer' means … any person who, by putting his name, trade mark or other distinguishing feature on the product presents himself as its producer".
The Committee will notice that that is almost precisely reproduced in Clause 2(2)(b). As regards the pharmacist, he would of course not necessarily be a known brander unless he holds himself out as the producer of a product and puts his name or mark upon it. Provided that he does nothing to hold himself out as the producer, he will not be a known brander. I hope that on that point I can reassure my noble friend.
On the second issue, I think I had foreshadowed that matter in what I said in response to the previous amendment. I do not quarrel with the object of the noble Lord's amendment. However, I assure him that it is unnecessary in view of the terms of the 1978 Act itself. We are dealing here with the question not of whether one person but of whether two persons are to be held liable for damage. That arises in relation to Clause 2(5). There it is stated that their liability shall be joint and several. Of course if one person only is sued, the question arises of whether or not he can sue somebody else who is also responsible. The 1978 Act provides in Section 1(1) as follows:
"any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise)".
The operation of that provision is plainly not affected by the source of the liability. In our case it will be Part I of the Bill.
If the matter were not clear from the ordinary words of the section which I have quoted, any doubt is removed by Section 6(1) of the same Act. I again quote:
"A person is liable in respect of any damage for the purpose of this Act if the person who suffered it … is entitled to recover compensation from him in respect of that damage"—
and these are the important words——
"(whatever the legal basis of his liability, whether tort, breach of contract, breach of trust or otherwise)".
It is perfectly general and I do not think we could have had clearer words than those. I am sure that the draftsman had in mind the need to avoid continual
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cross-references such as my noble friend proposes in this amendment.
If we were to make cross-references, plainly questions would be raised as to why similar references were not made by other enactments establishing liability. I can assure my noble friend that they are not. I have not made reference to equivalent Scots legislation which makes provision for contribution. However, it might be said that if one is included that must mean that the other has been excluded.
As I say, I have no quarrel with the object which my noble friend seeks to achieve. However, I hope that he will be reassured by what I have said on both points. I reassure him that the provision in the 1978 Act is already sufficient to achieve the object of the amendment.
Earl De La Warr: I am extremely grateful to my noble and learned friend. I shall read carefully what he has said in tomorrow's Hansard. So far as I can see, he has given important assurances on both counts. So far as I can tell at this moment, that will go a long way to satisfy the doubts that I have had on advice from certain quarters of the industry. I am grateful to him for that.
Perhaps I should add that the pharmacists know very well that there is one way in which they can cope with this difficulty, if it is a difficulty. They can cope by means of what is known as original package dispensing, whereby one receives a little bottle with 50 pills in it and sees the name of the manufacturer on the bottle and the pharmacists' label next door. That cannot always happen because the doctor may prescribe fewer than 50 pills. However, I believe that pharmacists are moving towards that procedure, and it is perhaps just as well that they hurry in doing so.
Nevertheless, subject to a careful inspection of what my noble and learned friend has said, I am very happy in this case to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 18:
Page 2, line 51, leave out ("apart from") and insert ("otherwise than").
The noble Lord said: I have been glad to hear musical sounds in relation to this amendment from both sides of the Chamber already. I am sure that the noble Lord, Lord Morton, is also pleased, because, although this is only a drafting matter, it was suggested in the peroration of his Second Reading speech. The Bill refers to:
"liability arising apart from by virtue of this Part".
I suggest that:
"otherwise than by virtue of this Part",
is better English. Apart from "by", there are three adverbs in a row, and almost anything must be better than three adverbs in a row.
Lord Beaverbrook: While I accept that this amendment will do little to alter the sense of the subsection, I believe it will improve its clarity. We are concerned that it should be clear and the Government will consider bringing forward at a later stage an amendment to achieve this. With that assurance, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Airedale: I thought I was going to score a goal that time. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9 p.m.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 19:
Page 2, line 51, at end insert——
("( ) For the avoidance of doubt the liability under this Part is a matter relating to tort delict or quasi-delict.").
The noble Lord said: Apart from my peroration (which is a rather exotic word) at Second Reading, I made various other points. The noble Lord, Lord Lucas, undertook in winding up at that stage to answer them. The answer which I received from him this morning dealt with nothing other than this amendment. His words were:
"While we have our doubts that quite such a sweeping amendment is desirable".
I have great difficulty in seeing that this is a sweeping amendment. I am not sure whether that is a football metaphor. However, the purpose of the amendment is clear and it is necessary. I am surprised that it did not occur to the Government earlier.
The Bill and the directive put on the producer or the importer a liability. The "producer" means a producer anywhere in the Common Market; the "importer" means an importer anywhere in the Common Market. The person who suffers damage from our point of view is somebody in Britain. The whole purpose of what I said at Second Reading was to find out whether it would be possible for that person to sue in Britain or whether he would have to go to Greece, Portugal, Denmark, Germany, France or wherever. The words I have chosen come from the protocol which is part of the Civil Jurisdiction and Judgements Act 1982. I fail to see how it could have been made less sweeping, but perhaps it could have been. If so, I would be perfectly willing to leave it to the Government to realign the amendment in terms acceptable to them. It is of the utmost importance that people who are injured because of product liability should be able to sue in Britain rather than have to go abroad. I beg to move.
Lord Cameron of Lochbroom: With respect to the noble Lord opposite, I do not know that we are talking about jurisdiction in quite the same way as he was suggesting. Nevertheless, I accept that the noble Lord has made a point regarding the general principle that lies behind the proposed amendment. However, if we were to make the express provision in the Bill which he seeks, we must obviously try to work out the practical consequences. In particular, we would have to be sure that we were not inadvertently extending or overturning legislative policies enacted on the assumption that they were dealing with torts, delicts or quasi-delicts which are based on fault. I understand that a search has revealed that there are well over 100 references to tort alone on the statute book. No doubt, there will also be a considerable number of references to delict. I assure the Committee that we shall be considering these as speedily as we can. I expect that we will be able to complete the exercise before Report stage and that we shall be able to bring proposals before your Lordships at that time.
I am sure that on reflection the noble Lord opposite will understand the complexity of the matter, notwith-
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standing the apparent simplicity of the amendment, and that he will allow us to complete our homework before it is considered further. With that undertaking, I hope that the noble Lord will withdraw the amendment.
Lord Morton of Shuna: I have no wish to delay the Committee. I have difficulty in seeing how a liability under this part of the Bill has anything to do with any other Act. To say that it is a matter relating to tort, delict or quasi-delict makes it, I should have thought, perfectly clear. But if the noble and learned Lord wants to do his homework for a week or two, who am I to stop him? I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Williams of Elvel: I wish always to understand the legislation that is before the Committee, and there is one point to which I should like the noble and learned Lord to respond. I refer to the chain of responsibility of suppliers of the product as defined in Clause 2. I should be grateful for confirmation that what I am about to say is a correct interpretation of that clause.
As I understand it, and I shall be reading from Clause 2(3),
"any person who supplied the product"—
and I shall leave out some of the words in brackets—
"or to any other person)",
is liable unless or if he fails to identify the person who supplied the product to him. I interpret this as meaning that if there is a person within the Community who supplied the product to somebody who suffered damage as a result of a defect in that product, that supplier, if he then names the person who supplied the product to him, is, as it were, off the hook.
The person who supplied the product to him, on the other hand, is presumably the "any other person" in the bracket. What obligation is there on the person who supplied the product to the supplier to name a third party supplier who may have supplied the product to the second party supplier? I imagine that there is a continuum here. You can go behind the second supplier, to the third supplier, to the fourth supplier until you come to a crossing of the frontier or until you come to a manufacturer, but I should be most grateful if the noble and learned Lord will confirm that my interpretation is correct.
Lord Cameron of Lochbroom: The noble Lord is correct because he has already read out the relevant passages. He started off with "any person"—and I emphasise the word "any"—
"who supplied the product … shall be liable for the damage if— (a) the person who suffered the damage requests the supplier to identify one or more of the persons (whether still in existence or not)".
They are to be the persons in subsection (2). Once they are identified, all is well. If they are not identified, the supplier remains responsible. I hope that that has answered the question.
Lord Williams of Elvel: I am grateful to the noble and learned Lord. He has partially answered the

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question. I want to be absolutely certain that the second supplier who is identified in the first place by the supplier is under an obligation, if requested, to identify his own supplier.
Let me take a sequence of events. There is a wholesaler. He sells to a retailer. The retailer sells to the noble and learned Lord. The noble and learned Lord has suffered damage because of defects in the product. He goes to the retailer and asks, "Who supplied the product?" The retailer says it was wholesaler "X"—perhaps the noble Lord, Lord Lucas of Chilworth. Lord Lucas is then asked, "Who supplied the product to you?" Are we to take it that the noble Lord, Lord Lucas of Chilworth, or the wholesaler—I do not wish to personalise it—is under the same obligation and, therefore, you continue the chain of obligation back to the original manufacturer or the crossing of the frontier, whichever is appropriate?
Lord Cameron of Lochbroom: I am sorry if I did not make the matter clear. The noble Lord is correct. As I should have gone on to say, the words in brackets make quite clear the chain along which you proceed. If we take it that the person who supplied the product to the person who suffered damage responds by saying: "I received it from somebody else who was the supplier", and if that supplier is then asked, he is under the same duty to respond back along the chain until eventually the question elicits the response which meets what is required under subsection (2), or it gets no response at all; in which case the buck stops at that point, so to speak. I hope that is sufficient for the noble Lord.
Lord Williams of Elvel: I am grateful to the noble and learned Lord. My understanding of the clause is confirmed.
My second question is this. In those circumstances, and given that these chains can be extremely complex and difficult, what in the noble and learned Lord's view is "a reasonable period"?
Lord Cameron of Lochbroom: That, as is always said, is a matter for the court.
Clause 2 agreed to.
Clause 3 [Meaning of "defect"]:
Lord Airedale Lord Airedale moved Amendment No. 20:
Page 3, line 4, leave out ("in the context of") and insert ("from").
The noble Lord said: Clause 3(1) states that,
"'safety' shall include safety in the context of risks of damage to property".
The phrase "in the context of" seems to me to be woolly. Surely what the clause is saying is,
"safety from risks of damage".
Why does not the clause come out in the open and say so? I beg to move.
Lord Williams of Elvel: It may be for the convenience of the Committee—and I hope the noble Lord, Lord Airedale, will accept it—if I speak to Amendments Nos. 21, 22, 23, 24 and 25 as a group. I have no comment upon the drafting points that the noble Lord has mentioned. However, I should like to
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have the view of the noble Lord, Lord Airedale, and that of the Government, on what is the meaning of "its get-up" and whether that is an expression that should properly be included in statute.
I also have a certain sympathy with the noble Lord's Amendment No. 25 which I do not think is a drafting amendment. It is more than that. The phrase,
"doing or refraining from doing"
is something which the Government might wish to take into account when considering these amendments.
Lord Beaverbrook: If it is for the convenience of the Committee I will speak to Amendments Nos. 20 and 21. In this subsection we are ensuring that the kind of safety which people may expect of a product will depend upon whether it may cause damage to property as well as upon whether it may cause personal injury. This is because "safe" might be taken to refer to risks of personal injury and is, for example, used in that sense in the Consumer Safety Act 1978. We are not helped by the English language in expressing this idea; but with respect to the noble Lord, we are helped even less by his amendment, which I think would have the effect of ensuring that the defective product itself was safe from any risk of being damaged, killed or injured. For that reason I ask the noble Lord to consider withdrawing his amendment.
Lord Airedale: I should have said that I was hoping we would take Amendments Nos. 20 and 21 together. I beg leave to withdraw Amendment No. 20 and I will not be moving Amendment No. 21.
Amendment, by leave, withdrawn.
[Amendment No. 21 not moved.]
Lord Airedale Lord Airedale moved Amendment No. 22:
Page 3, line 8, leave out ("in relation to") and insert ("of").
The noble Lord said: At page 3, line 8, the clause refers to,
"what persons generally are entitled to expect in relation to a product".
The phrase "in relation to" is another woolly phrase. What it is saying is what they are entitled to expect "of a product". Why does not the Bill say so? I beg to move.
Lord Beaverbrook: I must say to the noble Lord that I resist this amendment because of the way in which it narrows the sense in which we should have regard to the level of safety of a product. We should be concerned with the character of the safety in relation to the product in its widest sense. Thus we should consider the product in its environment and not in isolation. For that reason we have chosen particularly to use the words "in relation to".
Lord Airedale: I beg leave to withdraw this amendment. I should also have said that I shall not be moving Amendment No. 33.
Amendment, by leave, withdrawn.
9.15 p.m.
Lord Airedale Lord Airedale moved Amendment No. 23:
Page 3, line 11, leave out ("marketed") and insert ("supplied").
The noble Lord said: Why do we turn nouns into verbs when we have a perfectly good verb already? Why do we have to talk about "marketed" when surely "supplied" would do perfectly well? I beg to move.
Lord Beaverbrook: We have used the word "marketed" in giving effect to Article 6.1(a): the presentation of the product. The report on the Strasbourg Convention from which was drawn the expression "presentation of the product" makes perfectly clear that the marketing of the product is included. I hope the Committee will agree that the word "marketed", though including supply, must go wider and include the manner of the promotion, advertising, training in use and even delivery to the user. At the beginning of this subsection we have made clear that all these circumstances shall be taken into account. The use of the word "supplied" clearly does not do so, and therefore I urge that this amendment be resisted.
Lord Williams of Elvel: Is the noble Lord aware that a product may be marketed but, by failure of supply, not supplied?
Lord Beaverbrook: I said that marketing could include those matters; they do not have to be included. For instance, many products may be supplied but not ever advertised.
Lord Airedale: I think I was probably wrong about this matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 24:
Page 3, line 11, leave out ("its get-up").
The noble Lord said: The noble Lord, Lord Williams, was perfectly right. This is a purely probing amendment. What does "its get-up" mean? I do not understand what it means. I beg to move.
Lord Beaverbrook: The word "get-up" is apparently well understood, particularly in the context of the Trade Marks Act 1938. For instance, it would cover styling, packaging, leaflets that may be included, instructions and indeed everything that is included with a product. I believe that the courts are familiar with this word and that it is in use.
Lord Denning: I should like to confirm that remark. In cases which concern patents, copyright, trade marks and so forth, it is everyday practice to use the word "get-up". The word is well known among lawyers, anyway.
Lord Airedale: My only course is to withdraw this amendment.
Amendment, by leave, withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 25:
Page 3, line 13, after ("doing") insert ("or refraining from doing").
The noble Lord said: The noble Lord, Lord Williams, also referred to this amendment whereby in line 13, in relation to safety, the Bill refers to the "doing" of anything and I move to insert "or refraining from doing". I should have said that I am speaking also to Amendment No. 31, which is on the same point.
I always thought that in relation to promoting safety the dont's were just as important as the dos. For
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instance, one may have an electric razor which carries a notice stating, "This machine works on 12 volts. Don't plug it into the mains". I should have thought that message was just as important as one stating what positively should be done. I am seeking to accentuate the negative in the interests of safety. I beg to move.
Lord Beaverbrook: For the convenience of the Committee, while speaking to Amendment No. 25 I should like also to address my remarks to Amendment No. 31. In both those amendments we are concerned with the doing of anything with a product or in relation to the product. One could argue that by using the word "doing" one includes the sense of not doing anything with or in relation to a product. However, I believe that the noble Lord's amendments go some way toward clarifying this point. Clarity must be important in this clause where the meaning of "defect", the central concept in Part I of the Bill, is being described. It is important that the instructions or warnings for a product are understood to relate to the doing or not doing of something with the product.
For that reason I should like to consider the point further, and I ask the noble Lord to withdraw the amendment so that it can be considered and perhaps brought forward at a later stage.
Lord Airedale: I keep getting into the penalty area but I never score a goal. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 26:
Page 3, line 14, leave out ("reasonably be expected") and insert ("be reasonably foreseen").
The noble Lord said: The amendment seeks to leave out the words "reasonably be expected" and to insert the words "be reasonably foreseen". The courts are fully familiar and have spent a great deal of time dealing with what is reasonably foreseeable. "Reasonable expectation" is a new idea for them. I can see great difficulty arising while they puzzle over why Parliament passed a Bill which used the word "expected" instead of "foreseen". I doubt whether the Government have in mind any difference, and in that case it would seem appropriate to use the words which the courts are accustomed to interpret so that everyone knows what they are liable to mean.
There is another factor. Products may be dealt with by children, and children do not necessarily behave as they may be reasonably expected to behave with a product or without a product. In this context we are talking about with a product. On the other hand, cases such as Hughes v. The Lord Advocate show that an unexpected act could be reasonably foreseen. As this is a case where we are concerned with the safety of the product and of the consumer, it would be appropriate that the provision should be in that wider sense. I beg to move.
Lord Denning: I object to the amendment for two reasons. First, there is no difference in the meaning. Secondly, the words of the directive about which we have been talking so much speak about,
"the use to which it could reasonably be expected that the product would be put".
Why not follow the words of the directive rather than use different words? I suggest that we leave in the

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words "reasonably be expected" because they correspond exactly with the words of the directive.
Lord Lucas of Chilworth: I thought originally that the amendment moved by the noble Lord was designed to bring the wording in Clause 3 into line with that used in other enactments. "Reasonably be expected" is found elsewhere. There is a simple reason for the use of these words. They reflect the words used in Article 6.1(b) of the directive where a defective product is covered by the words, "could reasonably be expected".
The amendment moved by the noble Lord, Lord Morton of Shuna, would make little if any practical difference. I take a little comfort from what the noble and learned Lord, Lord Denning, said in that regard. Both he and I doubt whether in this context "foresee" covers any factors which "expect" does not, and vice versa.
As we have been saying all along, the intention of Part I is to implement the product liability directive. We must strike a balance between ensuring that we give maximum effect to its provisions in our law and yet do not implement it in a way that was not intended. We have therefore adhered to the language used in the directive, except where there was a good case for making a change. It does not seem to me that any such case has been made out for a change from "expected" to "foreseen".
I accept what the noble Lord said about children. Had I the other word down in the Bill I should have expected him to raise with me the same argument because the same difficulty arises. I often look back at the conduct of my children and wonder whether I could have foreseen it, should have expected it or whether it was natural.
I said before that "expected" is a word used quite frequently in our legislation. It is used in Section 14A (10) of the Limitation Act 1980, as amended by the Latent Damage Act 1986. There is a corresponding provision in Clause 5(7) of this Bill. With that explanation I hope that the noble Lord, Lord Morton, will be able to withdraw his amendment.
Earl De La Warr: May I make one point that only a layman would see, and it may not apply to the courts. In the second line of Clause 3(2) there is a reference to,
"what persons generally are entitled to expect in relation to a product".
It seems to me that that has a different meaning from that which appears to be in paragraph (b). That refers to "what might reasonably be expected to be done". I do not know whether I am making too nice a point, but to me in ordinary English the meaning is different.
Lord Williams of Elvel: I am sorry to intervene in the amendment of my noble friend. However, there is an important point which has been made by the noble Earl, Lord De La Wan. The words in the directive state that "a person is entitled to expect". They are in the opening lines of subsection (2). Then subsection (2)(b) continues with the words "what might reasonably be expected". That seems to refer to the rest of Article 6.1 of the directive:
"the presentation of the product; the use to which it could reasonably be expected that the product would be put",
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and so on. It seems to me that the word "foreseen" is slightly different in meaning from the word "expected". One can foresee something but may not necessarily expect it, or one can expect something and can presumably foresee it. The word "foresee" is wider. That is the point of my noble friend.
Lord Lucas of Chilworth: I am quite sure that the noble Lord, Lord Williams, is right in what he perceives to be his noble friend's view. I would say to the noble Lord, and to my noble friend Lord De La Warr, that when he reads Clause 3(2) at line 8 he should read the whole piece:
"above what persons generally are entitled to expect in relation to a product all the circumstances shall be taken into account, including…"
We then go to the other piece which seems to have worried my noble friend. Line 14 says:
"what might reasonably be expected to be done with or in relation to the product".
There are two matters here. I believe the way that we have expressed it demonstrates the marginal but quite significant differences that we wish to indicate.
Lord Morton of Shuna: It is always interesting to see that the difference between "expect" and "foresee" causes the Government great concern, whereas they have said that the word "industrial" equals the word "initial".
Lord Lucas of Chilworth: No.
Lord Morton of Shuna: I shall not go back to the fact that "initial" is the word in the directive. In subsection (2)(b) the words are "reasonably be expected". By whom? Whose is to be the reasonable expectation? Subsection (2) states:
"In determining for the purposes of subsection (1) above what persons generally are entitled to expect … all the circumstances shall be taken into account, including what might reasonably be expected".
Is this by persons generally or by the producer? If it is a person or persons generally, I would suggest that means what can reasonably be foreseen. If it is by the producer, it is what can be expected. Who is to carry out the expectation? I shall be interested to hear whether the noble Lord has an answer to that at the moment.
9.30 p.m.
Lord Lucas of Chilworth: I have no doubt that the noble Lord is interested to see whether I can find an answer. He is always interested in such things, particularly, if I may say so, at this time of night.
I rest quite firmly and simply on what is contained in Article 6. This was the point which the noble and learned Lord, Lord Denning, addressed in answer to the first question of the noble Lord, Lord Morton.
"A product is defective when it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including:

(a) he presentation of the product;

(b) the use to which it could reasonably be expected that the product would be put".

I think that that would mean the person who has acquired the product. Frankly, I do not see any great difficulty in foreseeing how a product might perform and expecting it to perform in such a manner. I do not see any great difference in this area.
I see the noble Lord being, I think, a little mischievous in shaking his head in a querying manner.

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If the manufacturer or the producer of the product says that it will raise the temperature of your room by 5 degrees in two and a half minutes flat, given that the curtains are drawn and it is 10 degrees outside, or whatever it may be, I would expect the product to perform in that way. If he does not say that, I do not think that I can expect it to do something of that nature or foresee that it might. I do not believe therefore that in that relationship there is any great difference.
Lord Morton of Shuna: I do not wish to prolong the matter at this time of night. On the understanding that I may return to it, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 27:
Page 3, line 15, after ("product;") insert
("( ) fair wear and tear").
The noble Lord said: The expression fair wear and tear is well recognised and understood. I should have thought that it was a matter worthy of being taken into consideration when discussing the meaning and implications of defect. The sort of example I have in mind is as follows. If one takes two identical motor cars and one is driven for five years by a commercial traveller or a jockey and the other is chauffeur driven to church once a week for five years, one cannot expect those two cars to be in the same condition at the end of the five years. To me that indicates that one of the factors needed to be taken into consideration when considering defects is fair wear and tear. I beg to move.
Lord Beaverbrook: Subsection (2)(c) reflects the wording in Article 6.1(c):
"the time when the product was [supplied]".
The amendment of the noble Lord, if inserted at the beginning of this subsection, would appear to introduce a rule of evidence. I am not convinced that such a rule is either necessary or desirable or that it should be confined to the particular matter addressed in Clause 3(2)(c). In any event, I doubt whether matters of evidence should be addressed in this Bill unless there is a very good reason. Therefore I must resist this amendment.
Lord Airedale: I think that we are slightly at cross-purposes. The amendment does not say, "at the beginning of (c)". In my copy of the Marshalled List it reads:
"line 15, after ("product;") insert".
It is then shown to be a separate paragraph which would become (c), and then (c) would become (d). Therefore there should be no complication about it being part of paragraph (c) because it is not intended to be. Perhaps the Minister will look at this again.
Lord Beaverbrook: I am afraid the numbering has gone wrong on my file: I must apologise to the Committee. Having now sorted out this matter I think there is no need to insert the words "fair wear and tear".
As I have said before, Article 6 of the directive, which is reflected in Clause 3 of this Bill, makes it clear that all the circumstances shall be taken into acount. Fair wear and tear would be one of those
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circumstances. In particular, subsections 2(b) and (c) adequately cover this point. To insert the words "fair wear and tear" would put an undue emphasis on that aspect of the product which is not reflected in the directive.
There are two other points to consider here. Is the noble Lord, Lord Airedale, suggesting that the product be examined to see if it was subjected to fair wear and tear, or (and I believe that this is the correct interpretation) that when supplied the product would have been suitable and able to withstand fair wear and tear? Either way this puts an undue emphasis on these particular circumstances. Therefore, I would resist this amendment.
Lord Airedale: I agree that this is a matter of emphasis. Does one not emphasise a particular matter? I am glad that the Government have considered this matter and I accept the answer I have been given. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 28:
Page 3, line 16, at beginning insert ("if reasonably ascertainable").
The noble Lord said: At this point the Bill says that regard must be had to:
"the time when the product was supplied by its producer to another."
I seek to insert at the beginning of that: "if reasonably ascertainable".
To give an example, let us suppose that a lady goes back to a shop and says, "This hairdryer that you sold me blew up in my face." Is that person reasonably to be expected to discover the time when the product was supplied by its producer? There may well be documents showing that consignments of 144 hairdryers at a time were supplied by company A to company B. It must be very unlikely that the particular hairdryer that blew up in the lady's face can be traced back to a particular consignment which appears on a document in the manufacturer's or the wholesaler's possession.
Therefore, I seek to say that the Bill should recognise this fact and should insist upon the time when the product was supplied being taken into consideration only if it is reasonably ascertainable. I beg to move.
Lord Beaverbrook: I am now able to go back to the answer that I erroneously gave to the noble Lord earlier.
Subsection 2(c) reflects the wording in Article 6.1(c) about the time the product was supplied. The amendment proposed by the noble Lord, Lord Airedale, if inserted at the beginning of this subsection would appear to introduce a rule of evidence. I am not convinced that such a rule would be either necessary or desirable, or that it should be confined to the particular matter addressed in Clause 3(2)(c). In any event, I doubt if matters of evidence should be addressed in this Bill unless there is very good reason. Therefore I must resist this amendment.
Lord Airedale: That was a very learned reply about the rules of evidence. I cannot pretend to follow it. I shall be interested to read about it in Hansard tomorrow. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 29:
Page 3, line 18, leave out ("require") and insert ("permit").
The noble Lord said: The clause states:
"Nothing in this section shall require a defect to be inferred",
from particular circumstances. I should not have thought that that was the message of the clause at all. I should have thought the message was that nothing in this section shall permit a defect to be inferred from those circumstances. I beg to move.
Lord Beaverbrook: This part of subsection (2) replicates Article 6.2 of the directive. It rebuts any implication arising from Clause 3(2) that a court must infer a defect in the product from the fact that a similar product supplied at a later date was safer. I agree that Article 6.2 is couched in terms which absolutely prevent such an inference from being made. However, it seems to me highly improbable that a court would ever do so. To make sense a provision for that purpose would need to go into a separate subsection. I doubt whether that would be justifiable. Therefore again I am afraid I must resist the noble Lord's amendment.
Lord Airedale: I am in no position to argue about what complies with the directive, and so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Ampthill): Before calling Amendment No. 30, I remind the Committee that if this amendment is agreed to I cannot call Amendments Nos. 31, 32 and 33.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 30:
Page 3, line 21, leave out subsections (3) and (4).
The noble Lord said: It is an unfortunate time of night perhaps to be discussing a very important section. Clause 3(2) appears to, and has been stated by noble Lords opposite to be intended to, comply with Article 6. I have no quarrel with that attempt, but it relates to the purposes for which the product has been marketed—its get up, the use of any mark in relation to the product and any intstructions for, or warnings with respect to, the doing of anything with or in relation to the product. Putting it shortly, I should have thought that that covered the packaging of the product, the warnings that you get on it, statements that you are to get the plug wired properly and things like that. I fully agree with these provisions.
The difficulty about it is that you have instructions and warnings in subsection (2)(a) and then you go to subsection (3):
"where the cause or a contributory cause of any damage is a person's reliance on a false or misleading statement or on any promise or advice, that damage shall not by virtue of the statement, promise or advice having been incorporated in a product be treated for the purposes of this Part as caused wholly or, as the case may be, partly by a defect in the product".
Suppose somebody puts a label on a product saying, "This must be used with a 5-amp fuse". Is that a statement or a promise, or is it an instruction or a warning? Which is it? Subsections (2) and (3) appear to
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be entirely contradictory in the way they sit in the Bill. Subsection (4) makes life even more difficult to understand:
"In subsection (3) above any reference to a statement or promise or to advice—

(a) shall include a reference to instructions which are already part of the product in subsection (2);

(b) in relation to a product which is or contains a device that makes or is used for the making of any measurement, calculation or reading, shall not include a reference to any measurement, calculation or reading made by or by means of that device".

I do not fully understand what that means. But to a relatively simple-minded person like myself, if somebody were to produce a ruler that said "inches" and in fact it measured centimetres or millimetres, it would appear that the person who used it and acted on it had no recourse under subsection (2)(b), because it would be:
"used for the making of any measurement, calculation or reading",
and it had on the face of it something that was wrong. It is certainly a defective product if you have something which says that an inch is a centimetre.
I just do not understand what the relationship of subsections (2), (3) and (4) of Clause 3 is supposed to be. We have a premonition that the Government may be concerned that somebody like a printer, or a publisher who publishes a book that contains an inaccurate formula, should not be liable under the product liability legislation.
As far as I can see there is no basis in the directive for that idea, and yet in introducing the Bill on Second Reading the noble and learned Lord the Lord Advocate said that he was doing no more and no less than what the directive requires. Subsection (2) is what the directive requires. Where subsections (3) and (4) come from or go to, and what effect they have, totally baffles me.
Presentation of the product referred to in Article 6 of the directive must surely include instructions packaged with the product. But that seems to be excluded by subsections (3) and (4). It just becomes more and more difficult to understand what is meant by it. I have no doubt that there is some good intention somewhere in subsections (3) and (4), but I do not think it has reached the surface. Therefore, my amendment is to leave them out and to let the Government come back with something which explains, at least in some form of comprehensible language, what they are getting at. I beg to move.
9.45 p.m.
Lord Allen of Abbeydale: A long time ago, much earlier today, we had some questions about the merits of the parliamentary draftsmen, for whom I have the greatest admiration. However, as an innocent, Clause 3 really defeats me. I am pleased to hear that I am in good legal company in being puzzled by it.
Suppose, for the sake of argument, that I buy a pressure cooker which is safe up to 500 degrees but that unfortunately the instructions with the pressure cooker say that it is safe up to 700 degrees. I heat it up, and when it gets up to 600 degrees it explodes. When I have recovered I struggle to my library and I take out this Bill to see whether I am all right under this clause.

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I start, "Yes; under subsection (1) I am clearly in". The test is to have something about the safety which "persons generally are entitled to expect", and the instructions accompanying the device are part of the criteria. That is splendid.
But then I go on and read subsection (3). There I am told, "Oh, no; not a bit of it. That is quite wrong. You are not entitled to any compensation for damage because of misleading statements accompanying the device." I ask, "Does an accompanying statement mean the instructions?" I read on. Subsection (4) says, "Yes, that is right; it means the instructions", and I think, "Well, I am sunk". But then, being of a persevering nature, I continue to the end and I find:
"nothing in that subsection shall prevent any statement, promise or advice from being taken into account in determining for the purposes of subsection (1) above what persons generally are entitled to expect".
So we go back: we are in again. What on earth does it mean?
Lord Denning: I, too, support this amendment. First, there is nothing in the directive about it at all. It is introduced entirely afresh. Next, it is entirely unintelligible. It is contradictory in itself. I tried the clause on with two or three Law Lords today. They expressed the view, if I may say so as hearsay, that it is quite incomprehensible; and not only that, but completely contradictory between the first part of subsection (3) and the last part of subsection (4), to which my noble friend Lord Allen drew attention. If this clause means anything, if it has anything to do with a defective product, please let it be made clear. At present it is hopeless and ought to be taken back and something fresh put in.
Lord Lucas of Chilworth: What a sterling request has come from the noble and learned Lord! I should say one or two things before I tell the Committee what I propose to do. There are difficulties here, I must confess. If noble Lords who have spoken are in some doubt, they are in pretty good company because they are not the only people who have failed to understand this. We have spent quite a lot of time with Parliamentary Counsel trying to make it easier. I assure the Committee that the clause has improved enormously since the earlier drafts.
The purpose of Part I is to provide a regime for product liability; that we all recognise. That is to say, its purpose is to provide that regime of liability for damage caused by goods which are unsafe in the light of what people might be expected to do with them. What people might do may be affected by such matters as the warnings or the instructions that accompany the goods.
I think the Committee will be aware that there is a different but very important area of liability known as liability for negligent misstatement which governs in particular the giving of professional advice. I am sure the noble Lord, Lord Morton of Shuna, is well aware of this. He will then be aware that it is of comparatively recent origin and the courts have been somewhat cautious in limiting its application to those cases where
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a defendant can properly be said to have owed a duty of care to a person who relies on the advice to his detriment.
The noble Lord, Lord Morton, gave a couple of examples, but I shall give one example. Let us suppose I were to suggest that my architect gives me some advice about an alteration to my house. He may give it to me face to face, or on the telephone. Equally, and perhaps more probably, he may send it to me in a letter. Technically that letter is a product, since the envelope it has come in and the paper it is written on are goods. If the gum that has been used to fasten down the envelope contains a dangerous poison then the envelope would be defective. Any damage done as a result of that envelope, poisonous or otherwise, would create liability on its manufacturer under Part I of the Bill.
Anyone would be surprised to find that the advice itself fell within Part I and the architect became strictly liable, as its manufacturer, for damage to my property which I may suffer by making a faulty alteration according to what he had written in the letter; in other words his specification. There would surely be a particular oddity in relation to an architect's advice because buildings themselves are not treated as products within the meaning of the directive.
Surely it is reasonably clear that the directive does not address this kind of liability at all. So the oddity I have mentioned cannot arise. It is clear that the position is the same whether advice is given by an individual letter, as in the example I have given, or in a book, a periodical or a newspaper addressed to the public at large. Perhaps in the absence of subsections and (4) the courts would reach much the same conclusion. Certainly we would hope that they would. But the fact that the noble Lord has put down an amendment on the point seems to suggest that he has doubts about the validity of these provisions and therefore the issue is one which should be resolved.
Although the general purpose of subsections (3) and (4) is easy enough to see, we had to draft the provisions with care so as not to imply that statements which are made in connection with a given product can be disregarded in determining whether the product concerned is safe. If we did that, we should be taking away by subsections (3) and (4) what we have previously expressly referred to in Clause 3(2), so in effect the last limb of subsection (4) avoids that result.
The noble Lord, Lord Morton of Shuna, raised the question of a ruler, a measuring instrument. This ruler gives a reading: by subsection (4)(b) a reading is not in fact within subsection (3), and if the reading gives rise to injury then Part I will apply.
The example of a pressure cooker given by the noble Lord, Lord Allen of Abbeydale, is really quite good. Certainly the instructions are saved by the last part of subsection (4). Perhaps I may draw the noble Lord's attention to that last part, starting at line 35:
"and nothing in that subsection shall prevent any statement, promise or advice from being taken into account in determining for the purposes of subsection (1) above what persons generally are entitled to expect in relation to any product to which the statement, promise or advice relates."
I think that perhaps we are making some heavy weather of the point. I believe that noble Lords will accept the need to draft the provisions with some care,

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given the increasing role which instructions and warnings play in connection with goods which are put into the marketplace. I hope that with the explanation I have given the noble Lord opposite will agree that the subsections perform an important role and that he will see his way to withdraw his amendment.
I said in my opening remarks that there was some confusion between us, but I hope I have now removed that confusion. The noble Lord shakes his head. I ask him to look tomorrow at what I have said, in the fond hope that it may remove the confusion. Meanwhile, I promise to look to see whether I can find a clearer way, with the parliamentary draftsmen, in which to express what I am quite sure the noble Lord, Lord Allen, the noble and learned Lord, Lord Denning, and the noble Lord, Lord Morton, want to see in this Bill.
Baroness Seear: It is all very well for the noble Lord to say what he has said, but the fact is that what he has said tonight is not going to be available to the people who will have to read the Act in the future. He has explained it to us, and quite intelligent people in this Committee cannot understand what is down here, without the gloss that the Minister has put on it. The public who have to deal with the Act will not have the benefit of the gloss, and that gloss needs to be translated into English which is intelligible to the people who have to use the Act.
Lord Denning: I should like to say that the explanation was excellent. I now understand what the noble Lord was driving at, and it is all very desirable. But surely we ought to make this clear. Perhaps I may suggest that there could be a note or an illustration, as is sometimes done. If an illustration were given of what we are driving at, that might be better. We must make things clearer than they are at the moment.
Lord Allen of Abbeydale: I do not know whether I count as one of the intelligent people referred to by the noble Baroness, Lady Seear, but, if I do, I still do not understand the gloss.
Lord Morton of Shuna: I regret that I am with the noble Lord, Lord Allen of Abbeydale. I find my confusion even more confused. The noble Lord, Lord Lucas, started off with an architect's advice. Whatever else an architect's advice or a lawyer's advice may be, it is not goods within the terms of this Bill as we are discussing them. Therefore the product liability does not apply to an architect's or a lawyer's advice; and I find that singularly unhelpful. Apparently it was the danger of the gum on the envelope and that seems to me to have nothing whatever to do with instructions.
The situation is really confused utterly when we have the noble and learned Lord the Lord Advocate asserting at Second Reading—and that assertion has been repeated at least three times tonight—that Part I is to give effect to the directive and nothing more. Then suddenly we have, in subsections (3) and (4), what must in fact be more because, according to the Government, subsections (1) and (2) fulfil the directive; and subsections (3) and (4), so far as they can
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be understood, contradict it. I think that the best answer would be for the Government to accept my amendment and come back with new subsections (3) and (4) if they wish. However, as that would no doubt cause too much loss of face I ask leave to withdraw the amendment and I hope that the Government will come back later with better drafting.
Lord Lucas of Chilworth: It is not reasonable for me to accept that from the noble Lord, Lord Morton. I have said that I am quite prepared to see whether I can obtain, with my officials and parliamentary draftsmen, greater clarity. For the noble Lord opposite to accuse me of refusing to do something for loss of face is quite unworthy of him. I have made the offer in good faith and I see no reason, in the light of that offer, to accept an amendment which removes from the Bill that which we see as essential. If my explanation of what we have in the Bill was insufficient, that is my fault; I have not made that explanation suitably or adequately and I accept that. However, to make the accusation that it would be for the Government to lose face in accepting the amendment is, I think, just a little too mischievous for even me to accept tonight.
Lord Morton of Shuna: I am sorry. I thought the idea of the Bill was that it could be understood, especially after the discussion we had during Question Time. However, I have moved for leave to withdraw the amendment, and I thought that might satisfy the noble Lord.
Amendment, by leave, withdrawn.
[Amendment No. 31 not moved.]
Lord Airedale Lord Airedale moved Amendment No. 32:
Page 3, line 30, leave out ("an individual") and insert ("a person").
The noble Lord said: The word "individual" has a fruit-pie connotation. Acts of Parliament usually talk about persons, so when this clause is gone through again with a fine-tooth comb perhaps we can have a person in place of an individual. I beg to move.
Lord Kilbracken: I support the noble Lord in moving this important amendment. "Person" is a word that the parliamentary draftsman always chooses to use as a convenient disyllable covering people of both sexes, although it is not a word that I myself frequently use in speaking English. If parliamentary draftsmen develop a kind of code which we are expected to understand, and if they finally hit upon a word like "person", I should be much happier if they kept to it. Therefore, I support the noble Lord, Lord Airedale, in this amendment.
Lord Beaverbrook: We have used the word "individual" quite deliberately. What we are talking about in this subsection is personal reliance on any statement or promise or advice. We are not concerned with corporate reliance, and to use the word "person" would, as I am sure noble Lords will agree, have the effect of including both the individual and the corporate identity. Perhaps in the light of this explanation the noble Lord, Lord Airedale, will consider withdrawing his amendment.
Lord Airedale: I shall think about that reply, but in the meantime I shall withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 33 not moved.]
Clause 3 agreed to.
Clause 4[Defences]:
Lord Airedale Lord Airedale moved Amendment No. 34:
Page 3, line 41, leave out ("person proceeded against") and insert ("defendant").
The noble Lord said: Perhaps with this amendment we can discuss Amendments Nos. 36 and 38. I do not know whether the expression "person proceeded against" is in deference to Scottish noble Lords, but in England at any rate the person proceeded against is usually referred to as "the defendant", and it is a shorter phrase. I beg to move.
Lord Kilbracken: I should like to support the noble Lord, Lord Airedale. In fact I would go further. I do not understand why the words "person proceeded against" have to be included at all in line 41. The clause reads:
"In any civil proceedings by virtue of this Part against any person".
So of course the person in question is the person proceeded against. The clause has just stated that. It is quite unnecessary to add it in parenthesis and in inverted commas. The best solution is to leave that out altogether and then substitute "the defendant" in each of the further references. The clause is far longer than it should be and the words I have mentioned are unnecessary.
Lord Beaverbrook: For the convenience of the Committee, I shall address my remarks to Amendments Nos. 34, 36 and 38. While I accept that the words "the defendant" are commonly used in England to describe the person proceeded against, the noble Lord must remember that this Part of the Bill applies to Scotland as well as to England and Wales. In Scotland the usual word is "defender". I hope then that the noble Lord will be satisfied that the phrase we have used reflects the interests of those on both sides of the Border and that he will feel able to withdraw his amendment.
Lord Airedale: My surmise was correct, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 35:
Page 3, line 44 after ("enactment") insert ("or British Standard")
The noble Lord said: Clause 4 provides a defence if the defect,
"is attributable to compliance with any requirement imposed by or under any enactment".
I hope we can extend that to include, for instance, a British Standard. Where a manufacturer is told, "You ought to make your product in this way and you will earn our blessing, the blessing of the British Standards Authority if you do", and he obeys that and
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manufactures his product in that way, and not in some other way which he might privately think would be rather better, I should have thought that it ought to be a defence for him if he were proceeded against under this Part of the Bill.
The British Standard is not intended by me to be exhaustive. I have no doubt that there are other officially recognised bodies like the British Standards Authority which give their blessing to products. There is what used to be called the Dunlop Committee which gave its blessing to new drugs, and so on. I hope that the Government will initiate research and seek out all the officially recognised bodies to which this consideration applies, so that in all the cases where the manufacturer is told that he ought to make his product in such a way, it ought to be a good defence to proceedings under this Part. I beg to move.
Lord Lucas of Chilworth: The noble Lord, Lord Airedale, puts his arguments in very persuasive terms, but I fear that I shall have to resist his blandishments. The purpose of the subsection we are discussing is to allow the producer of a defective product a defence if the defect in the product was solely due to compliance by the producer with either a United Kingdom enactment or with a Community obligation. This is a very strict defence and is intended to cover the situation, which I believe would be against the law of possibility, where the producer of a product has made a defective product because of the inevitable result of compliance with a national or Community law. It does not mean that compliance with a safety regulation would be a complete defence.
The noble Lord's amendment would have the effect of providing an automatic defence to a producer if he had complied with a British standard. That is certainly not what was intended by the directive, and for that reason alone—I admit, somewhat narrowly—I ask the noble Lord to withdraw his amendment. However, it might help the Committee if I explain that there is nothing in the Bill to prevent courts taking account of compliance with standards, whether British or otherwise, in deciding whether or not goods are defective. In fact, I would be very surprised if they did not. However, the directive does not permit us to make specific references to British or any other standards in the defences listed in Clause 4. Indeed, the variation in standards published in the different member states meant that the authors of the directive did not even feel sufficiently confident to make a reference in Article 6—that is, Clause 3 of our Bill.
The important thing for British industry to remember is that if they do manufacture their products to British standards they stand a better chance of making products which are not defective and which would not give rise to liability under this part of the Bill. It would be fair for me also to point out that most British standards contain specifications about the performance of products to which they apply and do not directly deal with their safety. There may well be a number of inventors or innovators who decide that to meet a British standard performance specification there can be an alternative or a different way; so that defence would probably fall. Compliance with those standards could not provide a defence under Part I.

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Even in the case of safety standards there is some variation. When we come to discuss the general safety requirements in Part II of the Bill the Committee will see that we have specifically included a defence to criminal proceedings under Clause 10 for suppliers of consumer goods if those goods are shown to comply with approved safety standards. It is our intention here that a comprehensive range of British and other standards should be approved for this purpose, but only if and when we are satisfied that they provide adequate guarantees. Even then, there is nothing in the directive which would enable us to make compliance with an approved standard a defence to civil liability under Part I.
I mentioned the varying standards throughout the Community. Progress on harmonisation of standards is, sadly, slower than we expected. Therefore, it would be very difficult for us to add a particular British standard, thereby excluding the opportunities of finding harmony with other European institutions. I hope that that explanation will help the noble Lord in realising why we have this measure in the Bill, and will persuade him to withdraw his amendment.
Lord Hacking: Before we pass from this amendment, may I raise one point which I believe is of some importance and which is closely related to it? I think the words "or supportive legislation", should be added after the word "enactment", because a defence surely must be available not only for a statutory enactment but for any supportive legislation that is introduced subsequent to a statutory enactment. The words, "or subordinate legislation", are used in other parts of the Bill. The Minister may not have the opportunity or be able to answer this question now, but I wonder whether that point can be considered. It seems to me that it is an important matter when considering this subsection.
Baroness Seear: I speak as a former president of the British Standards Institution. I hope that in making the statement that he has just made about British standards the noble Lord, Lord Lucas, did not intend to give the impression that in setting British standards the BSI was not careful about standards of safety. Tomorrow, if he reads what he has said, he will see that there is some implication, which I think will be very damaging to the BSI, that safety is not a prime consideration when standards are being set. I hope that he will make it quite clear that that was not in his mind.
Lord Lucas of Chilworth: The noble Baroness raises a very important point. I do not think that I said what she thinks I said, but I do not wish to argue the point. I should like to make it quite clear that what I meant was that British standards are more often concerned with performance criteria than safety. That is not to say that the British Standards Institution does not have regard to safety—of course it does—but some of the standards are related to performance only and not to construction, safety and so on. That is the point that I was trying to make. I have no doubt that we shall return to that matter, as I suggested we may do, when we come to discuss the general safety requirements.
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So far as concerns the point raised by the noble Lord, Lord Hacking, perhaps we can together look carefully at the term "by or under" in line 44. Subsection (a) states:
"that the defect is attributable to compliance with any requirement imposed by or under any enactment or with any Community obligation".
That covers the point made by the noble Lord with regard to subordinate legislation.
Lord Hacking: I am much obliged.
Lord Airedale: I have received a good explanation. However, when our representatives were discussing these matters with their friends in Europe one wonders how much effort was made to put forward the importance of having regard to our excellent official British standards and to make the point that compliance with them was about as good as one could get in this connection.
I dare say that there were many matters that had to be discussed and I do not know how much emphasis was put upon that point, but it is a pity that the directive is not drafted in a way which enables British standards compliance to be a defence in this part of the Bill. I can understand the explanation. I have done my best. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 36 not moved.]
Lord Airedale Lord Airedale moved Amendment No. 37:
Page 3, line 46, leave out ("at any time")
The noble Lord said: At line 46, the clause states that it is a defence:
"that the person proceeded against did not at any time supply the product to another".
He either supplied the product to another or he did not supply the product to another and I cannot believe that the words "at any time" add anything at all. I move to leave out the words "at any time". I beg to move.
Lord Kilbracken: I should like to support the noble Lord, Lord Airedale, in his amendment. It is a fact of parliamentary life that Ministers will go to almost any length at any time to support the parliamentary draftsman and to try to persuade us that every word that comes from that sacred pen is perfect and unassailable. I had many examples of that when I put down amendments to the Family Law Reform Bill last Thursday. I may be completely mistaken. It may be that the Minister is about to tell us that he accepts the amendment, and yet I have the most curious feeling that that will not be the case.
Those three words add absolutely nothing of any conceivable significance to the Bill. If they were left out, the Bill would be the same. The only purpose they serve is that they make the Bill three words longer. That may be a virtue that cannot be dismissed. I hope that the amendment will be accepted.
Lord Lucas of Chilworth: I think that I am right in saying that this is the last amendment that we shall discuss at any length this evening. To put the Committee out of any painful thoughts it may have, I

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shall say that I propose to urge the Committee to reject the amendment for these reasons: I accept that it may be believed that the three words "at any time" are superfluous or redundant but there are genuine reasons for using them.
The paragraph gives effect to the defence in Article 7(a) of the directive, which applies where the producer can show that he did not put the product into circulation. We have used the expression "supply" rather than "put into circulation" as it is more precise and enables one to reach the legal position under Part I more easily. However, it has a slight drawback in the present case because it may carry the implication that it is the particular supply to the injured person, or a supply leading to the injury, which is referred to, whereas that is not the intention. Any supply of the product at any time by the defendant will mean that he cannot rely on the defence.
I admit that the point is a narrow one, but since so much may turn on this defence we must be clear that it cannot be abused. I hope therefore that with that rather brief but succinct explanation the noble Lord will feel able to withdraw the amendment.
Lord Airedale: I do not know the difference between "brief" and "succinct". I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 38 not moved.]
Lord Beaverbrook: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
British Railways (London) Bill [H.L.]
Corn Exchange Bill [H.L.]
Hampshire (Lyndhurst Bypass) Bill [H.L.]
Keble College Oxford Bill [H.L.]
Liverpool Exchange Bill [H.L.]
London Regional Transport (Penalty Fees) Bill [H.L.]
National Provident Institution Bill [H.L.]
Newcastle upon Tyne Town Moor Bill [H.L.]
Selwyn College Cambridge Bill [H.L.]
Swanage Yacht Haven Bill [H.L.]
University College London Bill [H.L.]
Presented and read a first time.

City of London (Various Powers) Bill
Brought from the Commons, read a first time, and referred to the Examiners.
House adjourned at twenty-four minutes past ten o'clock.