LOCAL GOVERNMENT, PLANNING AND LAND (No. 2) BILL

The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Lord ROSS of MARNOCK

This is a Bill which applies to Scotland as well as to England and Wales. I should apologise for my sporadic interventions but I can explain my difficulties. I look first at the Explanatory Memorandum to find those Parts of the Bill which apply to Scotland and I search in vain. Paragraph 20 of the Explanatory Memorandum says: All the provisions of the Bill are applied to England and Wales". 723 That is not true. Clause 39 does not apply to England and Wales at all. Then it goes on: Parts III, IV, XI, XIII, XVI and XVII apply in their entirety to Scotland". And then: Parts I, V, IX, XIV, XV and XVIII apply in Scotland only in part". It will be noticed that Clause 60, which is in Part VII of the Bill, is not there at all. So, by implication, Part VII (Clauses 60 and 61) does not apply to Scotland. But then you read Clause 60 and discover in it a reference to Scotland. When we come to Clause 61, which is the only other part of Part VII, there is no mention of Scotland and at the end it does not say whether or not it applies to Scotland to guide unfortunate Scottish Members. In fact, the whole of it does apply to Scotland but it took me a long time to discover that, having been misled in my simple confidence in the draftsmen and in the Crown Office particularly to ensure that Scottish lawyers and Scottish Members of Parliament and Scottish Lords who are interested would know what is what. It is really not good enough.

When we come to the grant in respect of rate rebates to the disabled, I should like to ask how much the Government presently pay in respect of this? This provision is increasing it to 90 per cent. except for the discretionary increase of £1.50 which local government in Scotland can give. I do not recollect any regulations going through the House by the Secretary of State in respect of this although he has regulation powers at the present time. May I be told how much the Government presently pay, how are the local authorities reimbursed, and how are they going to be reimbursed? Is it a specific grant for Scotland—I am not going to tread into foreign fields in respect of this—or is it part of the block grant? We are fairly familiar in Scotland with the block grant through the rate support grant, and the calculation is entirely different from England's; and I do not want to spur on the Scottish office into producing another mongrel Bill such as the one we have. May I have information about that?

Lord MORRIS

My understanding is that this is a United Kingdom law and any 724 general public law must apply to the whole of the United Kingdom unless specifically excluded.

Lord RENTON

May I intervene before my noble and learned friend rises? I find this is a very obscure clause in any event, quite apart from what has been said by the noble Lord, Lord Ross of Marnock. We have no explanation of it in the Explanatory Memorandum—and paragraph 8 is the relevant paragraph of that memorandum. I think that if, on an important matter of this kind affecting the help given by the local authorities to disabled people, we are enacting anything at all, then it should be set out in a way which can be understood in Parliament and outside it without cross-reference difficulties being involved. If it cannot be set out in the clause itself, I feel that the Explanatory Memorandum should give some kind of help whereas none is given in this connection.

Baroness DAVID

May I make a comment on the clause? I agree with the noble Lord, Lord Renton, that there are certain obscurities about it, but whether it is a gesture to the disabled or to the local authorities one welcomes it. But I cannot resist saying that if this is meant to give some help to the disabled, then nevertheless, the other cuts in local government expenditure are making things worse for the disabled. The district councils with housing cuts cannot give money for improvement grants to houses in the way they did, nor money for adaptations to make houses easier for the disabled to live in with such aids as ramps. There will be less money for new builds when special houses could be built, and the power to lend to disabled owner-occupiers is reduced when they might want to do something to improve their houses. Where the counties are concerned, the cash limits on the counties, particularly on social services committees, mean that what they can do for the disabled is very much less, too. They may be getting something here but they will lose it elsewhere.

The LORD ADVOCATE (Lord Mackay of Clashfern)

I am obliged to my noble friend Lord Morris for making the point that where one has a United Kingdom statute and no express provision is made excluding Scotland, then it applies to 725 Scotland. That is the position as far as this clause is concerned. It is true that the explanatory memorandum has been somewhat left behind in the process of amendments and so on which has taken place, and I very much regret that. But certainly the clause itself applies to Scotland.

The intention of this clause, both for Scotland and for England and Wales, is to do something to help the local authorities in connection with the disabled, namely, to provide a duty on the Secretary of State to pay out to the local authorities 90 per cent. of the grant which the local authorities in turn have made under the Rating (Disabled Persons) Act 1978. That is the purpose of this provision. I think that some reference to the 1978 Act is really necessary because it is a provision requiring the Secretary of State to make good to the local authority 90 per cent. of the grant that they make under that Act. Therefore I must say, with all respect to my noble and learned friend, that I think it is reasonably plain what is intended here.

If I may answer the noble Lord, Lord Ross of Marnock, my understanding is that this power is a new power and that no duty of this kind was in existence previously. So this is a new duty to assist the local authorities by giving a specific grant to relieve them of 90 per cent. of their expenditure under the 1978 Act.

Lord ROSS of MARNOCK

The Lord Advocate says it is a new power, but 1978 was two years ago. Does he mean to say that this was placed on the statute book and that no use was made of it by local authorities?

Lord MACKAY of CLASHFERN

I am very sorry if I have not explained the situation. The 1978 Act gave the local authority power to make grants to the disabled. That expenditure therefore fell on the local authorities, and what I have sought to try to explain is that this provision places a duty on the Secretary of State to relieve the local authority of that expenditure to the extent of 90 per cent. That is a new provision; it puts a new obligation on the Secretary of State to make that relieving provision. I hope I have made it clear this time.

Lord ROSS of MARNOCK

It is quite clear, but that expenditure by local authorities last year would be relevant expenditure in respect of rate support grant. So the Government should have some information as to how much money was spent by local authorities in this case. If we do not know that figure then we do not know the likely cost to the Government of this generosity. It may well be that these disabled people got their rent rebates under the normal rent rebate scheme, which is related to income. Before we give plaudits to the Government for generosity we must know exactly how much it is going to be. Somebody must have made some calculation as to what it is going to be for England and Wales and how much for Scotland.

Lord DAVIES of LEEK

This is relevant to the notes which the Minister kindly provided, which say that increases in rebates made at the discretion of the authority will not be grant-aided. Will that not upset the whole applecart?

Lord MACKAY of CLASHFERN

So far as I am concerned, I am not particularly keen to get plaudits at this minute, so if that is the purpose of the information then I do not mind that I have not got it to hand.

Lord ROSS of MARNOCK

We want to know.

Lord MACKAY of CLASHFERN

I want to deal with the point that the noble Lord, Lord Davies, has made. The obligation laid on the Secretary of State by this provision is to relieve the obligatory element, not the discretionary element. If the local authority give an extra discretionary element then that is not covered by this. The provision is intended to relieve the local authorities of 90 per cent. of what I might call obligatory expenditure under the 1978 Act.

Lord RENTON

I am sure we are indebted to my noble friend for his lucid explanation. As he has indicated, a good deal of time would have been saved if the explanatory memorandum had helped us at all. I am grateful to him.

Lord ROSS of MARNOCK

Can the Scottish Office tell us, since this is going to be applied to Scotland, the number of local authorities that have evinced an interest in providing caravan parks for gipsies in Scotland?

The Earl of AVON

Scotland is covered by the grant provision, by dint of Clause 164 (2) of the Bill, that is, Scotland is not excluded from Part VII. I have not got the information for which the noble Lord has asked, but I will let him have it.

The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield)

I can answer the noble Lord. No doubt I should have collaborated with my noble friend before the Committee sat. As the noble Lord is well aware, under Section 5 of the Local Government (Scotland) Act 1966 my right honourable friend the Secretary of State is empowered to reduce rate support grant in certain circumstances. I am sorry; I have got the wrong section.

Lord ROSS of MARNOCK

Nothing much to do with gipsies.

The Earl of MANSFIELD

In the circumstances, I think I will subside because I do not wish to take up the time of the Committee leafing through English and Scottish paper. My noble friend or I will write to the noble Lord, Lord Ross, before the next stage. I apologise to the Committee.

Lord AVEBURY

Can I assist the noble Lord by pointing out that the 1968 Act does not, in fact, apply to Scotland?

Lord ROSS of MARNOCK

It does apply to Scotland.

Lord AVEBURY

No, it does not.

Lord ROSS of MARNOCK

Oh, yes, it does. I took the trouble to look it up.

728 Clause 61 agreed to.

Lord BELLWIN

I entirely agree with that, but I think this might also cover amendments on Clauses 63, 68 and 69, which actually cover Amendments Nos. 142, 146, 147, 149, 156, 165, 166 and 167. I believe they are all covered in the same way.

Lord MISHCON

The noble Lord is certainly inviting a long speech at the very commencement of this matter. If I find that in any remarks of mine I have not covered matters which do arise on the following amendments he mentioned, I know that the Committee, with its usual courtesy, will allow me to come back. I do not want to burden the Committee with too long an address. It may be convenient, now that we have reached this vital stage in the Bill, if I start by using a summary, and I cannot do better than quote from notes on clauses in regard to the epoch-making nature of the provisions now before the Committee. Notes on Clauses, by way of an introductory note, say as follows: These 13 clauses introduce a new system of control over local authorities' capital expenditure. Clause 62 defines the authorities to which the control system will apply and introduces a definition of capital expenditure. Clause 63 makes it the duty of the appropriate Minister to give each authority an annual allocation for capital expenditure and provides for the use of capital receipts and for a degree of flexibility between years. Clause 64 empowers the Minister to direct what proportion of their allocation an authority may divert to any project of national or regional importance. Once having made an allocation to an authority, the Minister is allowed, under 730 Clause 65, to withdraw it in so far as it relates to payments not already made and those which the authority is not already contractually bound to make. Clause 66 defines capital receipts and enables authorities to supplement their allocations be whatever proportion of these receipts may by specified by regulation by the Secretary of State. Clause 67 places on the Minister of Transport or the Secretary of State, as appropriate, the duty of notifying authorities of their allocations before the beginning of the year concerned. Clause 68 permits two or more local authorities to make an agreement. If the Secretary of State considers that an authority has failed or is likely to fail to keep their expenditure within their allocation, he is empowered under Clause 69 to direct the authority not to make any further payment in respect of capital expenditure in excess of their allocation, and not to enter into contracts above a certain size without ministerial consent. Clause 70 provides that payments made in contravention of directions issued under Clause 64 or 69 are ultra vires; but the transactions carried out in contravention of such directions are not invalidated on that account alone. Clause 71 sets out the principles to be followed in valuing different types of capital expenditure transaction. Clause 72 deals with the GLC. That is my own paraphrase. It is not in the Notes on Clauses in that form.

Clause 73 provides that any regulations made under this part of the Bill shall be made by statutory instrument subject to Negative Resolution by either House. Clause 74 deals with the timing and extent of the implementation of this part of the Bill. If I may be permitted a personal note, for over 20 years it was my privilege and indeed my joy to be in local government: first of all in connection with the second largest metropolitan borough of London, where I had the doubtful joy—but it certainly was a privilege—immediately after the war of being the chairman of its finance committee; and thereafter, in the county of London, both in the London County Council and later the Greater London Council, where I had both the joy and the privilege of chairing many committees and of being chairman of the council itself.

I only mention this because local authorities, their members and their officers have had a pride in the service that they have been able to give to the community. It is a pride which is somewhat different from those who belong to national assemblies. However great be the prestige of either House of Parliament, it was always the thought of people in local government that whereas legislators in 731 Parliament enacted statutes and, by Affirmative or Negative Resolutions, dealt with regulations made by Ministers, it was the member of the local authority, assisted by his officers, who carried out the social services throughout the country. They were the people who did the job on the ground. They were not responsible for debates on the legislation which permitted them to do it; they did the vital job.

They encouraged, as a result of that, men of considersble stature and goodwill, both at member and officer level. It was obviously the practice of people in local government, I found, to regard national government as "big brother". That was inevitable. But at least it was the fraternal relationship of "brother" even if national government had a massive size and therefore was entitled to the description of "big".

Under this provision, under this part of the Bill, we go away from the relationship of "brother" and we get to the stage of "daddy" government treating local government as a little child, handing out to it spending money and telling the child that at least it can apportion the spending money so handed out between liquorice allsorts and bars of chocolate as the child may see fit. But the spending money by way of capital expenditure and capital provision, even though the local authority can deal with it and gather it in without imposing any liability upon national government as such, is no longer going to be the province of a local authority.

Local authorities have been accustomed, obviously, not to be profligate and borrow money without the sanction of national Government. But where they could raise it themselves without the necessity for that consent, they were permitted to do it. It was the ratepayers, the citizens of the local authority within the local authority area, who would decide at election time whether the finances of the local authority had been properly managed or not.

This is a very different situation that we face when we now come to this part of the Bill. I gave the very good summary that was contained in the Notes on Clauses—I have no need to repeat that summary again—as to the complete revolution that takes place under this part of the Bill in the 732 whole relationship between government and local authorities—local authorities now being so much minimised in status as a result of the provisions of this Bill.

I come now to the Minister and then to the actual amendments with which we have to deal. It will be my purpose to say that the division that ought to take place here should be on the question of whether Clause 62 shall stand part of the Bill. If Clause 62 falls then the whole policy behind this part of the Bill will fall with it. On the unlikely assumption—as I hope—that I shall not succeed in that endeavour, it will be my duty, obviously, to move amendments in order to try to make this part of the Bill as workable and practicable as possible.

I said I was going to have a word, with the permission of the Committee, about the Minister who will be answering me in due course. In a very short period of time he has earned the respect and indeed the affection of this House, as he did in the field of local government, where he had also great respect and great affection. It is extraordinary of course—if I may put it this way—that "City Councillor Jekyll" has become "Mr. Minister Hyde" because I cannot imagine a sturdier fighter against this part of the Bill had the noble Minister remained at his place of eminence in the local authority world. I cannot imagine him standing it for one moment.

I can almost hear that urbanity of his, which is almost peculiarly rural—if the Committee will forgive the seeming paradox—being disturbed completely if some Minister had dared to impose upon him, as a local authority representative, what these clauses mean. So I come to the submission to the Committee which my noble friends and I make without any apology whatsoever. We look not for any political support at all. We look for the support of those who feel that local authorities cannot be trampled upon in this way. I said the other day, and I do not apologise for it, that if provisions like these are passed by Parliament, then one had better alter the name "local authorities", because I do not know what authority they are left with. As I said, they ought to be called "local agents for the national Government". If that is what the Government want, and that is what the nation wants through its representatives, then that is just what they 733 will get. They will get a poorer type of person as member, and a poorer type of officer, because their discretions will have gone, except as to the priority that they can put upon the money that is meted out to them in this extremely restricted way.

It is now my duty to turn to the amendments, and I shall then leave it to others to continue this debate. I ought to say that it is not a question of this being a voice of mine, or of my noble friends alone. The voice that I am trying so hard, on behalf of local government, to exercise before your Lordships today is the voice of the Association of County Councils, as was expressed, the Association of District Councils, the Association of Metropolitan Authorities, the Metropolitan Boroughs Association and, to a very great extent, too, the voice of the Greater London Council—all the great authority associations within the whole country. Should national Government be pitted in this way against local government throughout the country, or should this House exercise its right, having already passed many provisions of this Bill, to say in regard to this part of the Bill: "Let us cry halt. This is going miles too far"?

On the basis that, unhappily, the Division will fail—and I hope that that is a wrong forecast—it will be my duty to move the various amendments and I can do that, and explain the reasoning for them, extremely quickly. If I may take the Committee to Amendment No. 131, that merely substitutes the words "expenditure on capital account" for the words "prescribed expenditure". The reason for that is that Schedule 9 sets out what the Government feel to be the proper definition of "capital expenditure" which they wish to cover.

For generations, local authorities have known what capital expenditure is and, if it happens to differ between one local authority and another, there is no cause for concern in that. If "revenue expenditure" is called "capital expenditure" by some authorities, or vice versa, the whole expenditure is, under the provisions of this Bill, controlled and curtailed, anyway, and therefore in the ultimate no possible harm is done. But for this schedule to set out these various 734 descriptions of prescribed expenditure is unnecessary. One ought to leave the local authorities, and those who look after the presentation of their accounts, to decide what is expenditure on capital account and what is not.

I ought now to deal with the schedule on the basis that that amendment is not successful, because if it were, and one left out subsection (2) on page 55, at line 11, then Schedule 9 would apply. I can deal very briefly with the other amendments up to No. 137 by saying this. In the schedule, governed by these provisions and therefore being the specific purposes which are deemed to be capital expenditure, are items such as renewal or replacement in the case of land, plant or equipment. Obviously, once you have expended capital on land, plant or equipment, the renewal or replacement of it becomes a revenue item and not property a capital item. That is the reason for this amendment. You cannot have it twice, as it were, and restrict and govern it twice, when you are merely renewing or replacing plant.

That brings me to the close of the observations that I wanted to make on the amendments themselves. But I cannot stress sufficiently that the main burden of my speech this morning is to ask for support from all parts of the Committee for the proposition that this part of the Bill, in dealing with capital expenditure and limiting it, controlling it, and hedging it around as it does, without the slightest discretion for local authorities, except as to the way in which they deal with their expenditure and imposing upon them penalties, ultra vires provisions and goodness knows what, is wrong. That is my view, and the view of so many who have served in local government and enjoyed it, and who want to see their successors—if I may put this pompously, although I hope that it does not sound too pompous—ofthe same stature and order as they believe they are themselves. I ask that the sympathy of this Committee be given to the proposition that here we must stop and here we must say, "This cannot form part of a local government Bill". I beg to move.

Lord EVANS of CLAUGHTON

May I say, first, that I greatly admire the very constructive and very helpful way in which the noble Lord. Lord Mishcon, has put 735 forward this series of amendments to initiate what I hope will be a very important and memorable debate in your Lordships' Committee. It is a further example, as in the case of the block grant discussion that we had yesterday, of the movement by Her Majesty's Government down the road to democratic centralism, so far as local government is concerned. I sometimes blink and think to myself: Is that the Government Bench? Should not such proposals and Bills come forward from a fairly Left-Wing, centralised Labour Government, particularly in the case of the block grants and this part on capital expenditure? There is the feeling that there is a role reversal here, which is very disturbing.

As I am sure will be stated later, and as was stated so clearly by the noble Lord, Lord Sandford, and the noble Viscount, Lord Ridley, in this area, where local authorities previously relied upon loans to fund their capital expenditure, each year, they have kept within very tight limits and have not gone beyond the Government's wishes in the field of capital expenditure. It is not as though this is a justified attempt to control profligate local authorities. In the field of capital expenditure by loan, local authorities have kept well within the Government's spending directives. Therefore it seems to me that this kind of change is unnecessary. The existing arrangements work very well, and so far as I know there has been no complaint from the Government in the annual public expenditure White Papers about local authorities going beyond the capital borrowing requirements of the Government.

The second point that worries me is that by its nature capital expenditure cannot be considered on a year-to-year basis. Capital expenditure and capital planning have to be done over a period of years, yet the proposals enshrined in these clauses require that a local authority's capital expenditure shall be treated on a year-to-year basis with no undertaking of any kind that any capital expenditure permitted this year will be carried forward to a second year. So far as I know from fairly long experience in local government, you have got to plan capital expenditure over a period of years. So there is bound to be uncertainty in capital planning and no guarantee of continuity for local authorities. There- 736 fore, I cannot see how, with the best will in the world, any local authority, particularly the larger ones, can plan and manage its capital programmes.

Another concern of mine is this. I gather that at the Report stage in another place a promise was made that changes would be made. The present proposals extend capital expenditure into interests such as leases in property and goods on annual terms and are counted as capital transactions of an amount equal to the freehold value at the time the interest was acquired. I had understood that the Government were to put down amendments to change that. As any of us who are engaged in local government know, the opportunity to expand in terms of capital by leasing goods or property is an expanding means of enabling local authorities to keep going in periods of extreme financial stringency.

As the noble Lord, Lord Mishcon, has said, I hope that we shall defeat Clause 62, but if that does not happen I should like there to be changes so that capital allocations can be planned over three years in order that local authorities have the right to supplement capital allocation from revenue, which has always been used by local authorities and which is made illegal in this Bill, so as to allow trading undertakings which make profits to use those profits to expand those particular trading organisations. I am thinking of organisations such as airports, but that tends to make one give a hollow laugh if one lives in the Merseyside area where the airport loses £1.5 million a year. However, I gather that generally airports do make profits, and it seems wrong to me that one should not be allowed to use those profits to expand and improve the airport and other trading undertakings of local authorities. I hope that the Government will come up with some change, as they said they would, so as to alter the proposed basis of valuation of leasehold interests.

Finally, I cannot see any need for a change in the law. The present law dealing with borrowing works perfectly well. Local authorities have kept within the limits. It seems to me that the Secretary of State is obsessed with making changes for their own sake. All innovations are not improvements. This one is the very opposite and could be a potential disaster 737 and another reduction in the freedom of local government. Therefore, I hope that your Lordships will ensure that Clause 62 does not stand part of the Bill.

Viscount RIDLEY

I should like to add my own support to what was said by the noble Lord, Lord Mishcon, and the noble Lord, Lord Evans of Claughton, in hoping that this part of the Bill will be left out so that we can all get on with more important things like planning. I say this because I believe, as has been mentioned, that the present system is extremely accurate and very well understood. It has worked for many years, with some faults, of course, but they could be dealt with. The present system is understood and has resulted in very accurate control indeed of the capital expenditure of local authorities over a considerable period. I cannot give an exact figure but in terms of percentage of out-turn to estimates, it is exactly the same. This shows how efficient it is. There may be faults in it, as I have said, which could be dealt with, but I do not believe that the new system will produce anything more accurate or anything like as democratic.

I had hoped that the reforming zeal of this Government might have run into the sand by now, because they have been going at it quite hard during the last 18 months. They should stop here. I think they should be satisfied with what they have done. There are amendments which again should sugar the pill, but may I dwell on what I believe to be the basic fault in the system; namely, the shift of control from borrowing to spending?

The first thing which is likely to prove extremely dangerous to the country and to the economy is that the incentive to realise assets which local authorities may have owned for a long period—surplus land, for instance—and to use them for something more needed in the modern world will be threatened by the clauses in this part of the Bill. If one has a piece of land which one wishes to sell, very often it has been the case that this has been put into the capital fund to be spent on something else. Under the new system this can be done, but for the first time the Secretary of State is taking powers to stop it being done if he so wishes. The Secretary of 738 State may never use those powers and this one certainly would not; but the powers will be there and the incentive is definitely threatened by this part of the Bill.

Secondly, the flexibility that exists—that is, using some of the rates to put into capital, and vice versa—disappears, too. Again, none of this may happen but there is a threat of it. The use of capital receipts and of rates to build up capital funds is threatened.

Finally and briefly, the noble Lord, Lord Evans of Claughton, has already mentioned that planning for the future is made extremely difficult by the short-term nature of the powers inherent in this part of the Bill. There is a certain carry-over and we hope to improve that by the amendments we have put down on this point. But it takes a long time not only to get projects off the ground but also to plan and to build them. It is said that to build a new road takes 39 steps. It takes seven years. If you start a new road and leave it half finished it is not going to be much use to anybody. There must be, therefore, a longer-term commitment, if a project is started, that the capital allocations to finish it shall always be forthcoming. This is threatened by the Bill. Therefore I should like this part of the Bill to be rejected. The present system has been extremely efficient. It has done everything that the Government have wanted it to do—it has controlled total capital very carefully—and it is perfectly adequate for the moment.

Lord SANDFORD

It grieves me to have to get up once again and say that the Government's proposals in this field are opposed by all three associations. The reasons why we are opposed to them have been made very clear by the three speakers who preceded me. All spoke for different sectors of local government.

The fact of the matter is that there is no evidence yet—my noble friend will no doubt bring it forward if there is—that local government has been any more remiss in this field of capital expenditure than in the fields which we discussed yesterday. Nor is there any evidence which has convinced the associations that the new system is inherently better in its working than the old system.

Previous speakers have not mentioned this, but it is fair to say that a few con- 739 cessions have been obtained so far which will make things a little easier; namely, freedom to abrogate the main blocks of expenditure—housing, education, transport, and so on—and to use the total sum for whatever capital purpose the local authority thinks fit. That is a gain. It is also a gain to have some freedom to continue using capital receipts, as at present, on top of allocations. It is also a gain to have the minor items of equipment costing under £5,000 excluded. It is also a gain to have the housing cost yardstick and the Parker Morris minimum housing standards scrapped. Indeed, that is particularly valuable for the district councils that are the main housing authorities. But that does not overcome the fundamental objection to the proposed system of expenditure control relying on expenditure control year by year, as opposed to the flexibility of the borrowing control, and that is because this new system will involve all the local authorities—each of them—in being required to keep within fixed annual allocations, albeit with a 10 per cent, tolerance. As my noble friend has said, we cannot run capital projects on that basis.

Furthermore there is the objection—and I shall not go all over it again because my noble friend has just done so—that Clause 69, which I think is embraced in this debate, gives the Secretary of State far too wide powers of discretion when a local authority overspends. There is really no evidence to show that those wide powers are required on the basis of the performance of local authorities in the past. So, despite the concessions, I must say that the present proposals to control capital expenditure, as well as borrowing, are still inherently unacceptable as an unnecessary restriction on local authorities' powers. It really is very bad for the whole system of local government that we are being asked to swallow this.

Lord PARRY

I had intended to speak to a later clause, but as there is a general debate and as regional airports have been specifically mentioned, I now intend to ask your Lordships' Committee to hear the submissions that I should like to make. It is necessary to cite the Addison Rules. The Committee will know that I am 740 chairman of the Wales Tourist Board and a member of the British Tourist Authority. Neither of those bodies is a party to the remarks that I am about to make, although they might not necessarily disagree with them. Naturally, I have informed the office of the Secretary of State for Wales of the submissions that I am about to make. I have also given the noble Lord, Lord Bellwin, notice of the problem that I wish to raise with your Lordships' Committee.

The matter arises out of the general context of regional airports and I wish specifically to speak about the problem as it affects the Cardiff—Wales Airport. There is no provision in the Bill for a specific allocation to airports operated under a consortium arrangement. Each local authority individually will receive its block allocation and a proportion of that, under the heading "other services", may be allocated by the authority to airport capital expenditure. In that way capital expenditure on the airport will have to compete with other services for the limited capital allocation.

Bearing in mind the arrangements for financing between the constituent authorities, it will be necessary for each of the constituent county councils—in this case they are Mid, South and West Glamorgan — to agree to a specific allocation for the capital programme of the Airport Joint Committee. That could give rise to difficulties in terms of priority of allocation within the individual local authorities concerned. Furthermore, it is considered unreasonable that the capital allocation for the airport, which as a regional airport serves a considerably wider area, should not be calculated independently of that for the three constituent county councils, whose allocation will be based on criteria unrelated to the airport needs.

The case has been made by JACOLA—that is, the Joint Airports Committee of Local Authorities—that airports, as trading organisations, should be considered outside the block allocation. Because an airport is a commercial operation, there is a case for excluding investment in airport infrastructure from public sector expenditure control, because that investment is made with profitability in mind. That argument has not proved acceptable to the Government and it appears that airports, with certain exceptions referred to below, will receive no special treatment under the 741 Bill. JACOLA has argued too that, as a trading organisation, an airport should be able to use surpluses on its trading account to finance capital expenditure without counting against the overall allocation. That is of no immediate significance to the Cardiff—Wales Airport, as we are not yet in a profit situation.

The Airport Joint Committee does not support the view that local authority airports as a whole should be excluded from control, but it does consider that capital expenditure on regional airports designated in the Government's White Paper on Airports Policy should receive special consideration and should be exempt from capital expenditure controls under the Bill. Should total exemption from control not prove acceptable, then the Airport Joint Committee will urge that regional airports should receive wider specific exemption by regulations made by the Secretary of State under Schedule 9 to the Bill.

The Bill already makes provision for the Secretary of State to direct that a specific part of the aggregate approval shall be spent only on a specified project of national or regional importance, and I guide the Committee to Clause 64. The Government have indicated their intention to allocate a proportion of the overall expenditure allocation for airport projects of this nature. That earmarked allocation will be available for, as it says: significant capital expenditure on the expansion or improvement, in line with national airports policy, of operational facilities at airports fulfilling a national or regional role. That fits very much into the Government's own expressed intention of wishing to off-load from the major airports to regional airports some of the traffic passing through. At (b) it says: exceptional capital expenditure required by national regulatory authorities to meet national or international standards of health, safety or security. It is my contention that that definition embraces only major capital expenditure needed to sustain the primary function of the airport, such as new terminal facilities, runways, navigational equipment, et cetera. It is not intended to cover expenditure on such items as noise insulation measures, car parks and staff facilities. Such capital expenditure is outside the definition and will be dis- 742 tributed to local authorities in the normal way as part of the "other services" block allocation.

The Cardiff-Wales Airport is the designated regional airport for South Wales and the South West of England and, as such, major capital expenditure, in accordance with the above definition, would qualify for a specific allocation. Routine capital expenditure, however, would still have to be met from the "other services" allocation to the individual local authorities. Representations are being made to the Welsh Office to secure that, if possible, all prescribed capital expenditure on the airport will be subject to a specific allocation to the Airport Joint Committee.

I appreciate that the Minister may not this morning be in a position to give a detailed reply to the detailed point that I have chosen to make, but I shall be perfectly happy if he is prepared to let me have an answer to that. He will probably wish to consult with his colleagues, the Secretary of State for Wales and the Secretary of State for Scotland. I am grateful to the Committee for allowing me to insert that matter at this point.

Lord BELLWIN

I should like to deal with the last matter because, in a way, it is a specialist one. My information so far as the airports are concerned is that the Department of Trade, following representations which have been made, is intending to arrive at the appropriate method of ensuring that adequate resources are available for all essential capital investments at major local authority airports. In fact, that expenditure would then he covered under the category of "special projects of national importance".

For myself, I have tremendous sympathy with the point which the noble Lord, Lord Parry makes. Indeed, I have had some correspondence and discussions with the noble Lord, Lord Hill of Luton, who is also deeply interested in this matter. As it stands at present, I think that it is still to some extent on the table as regards exactly what is to be done. But, frankly, what I have seen I find very encouraging as one, who himself, was one-time chairman of such an airport. I had to be concerned with its affairs and its finances and its running—and indeed its opportunities, which I think in many 743 ways are exciting. When the noble Lord, Lord Evans, speaks of Liverpool losing money, although I am open to correction I should have thought that arguably it is the only one that does because all the others do extremely well. I do not know how Liverpool manages to do it. He must tell us some time.

Coming to the rest of this important debate on this very important financial aspect of the Bill, I should like to say first that I much appreciate—as I always do—the kind remarks which the noble Lord, Lord Mishcon, made about me. I will try to deal with some of the individual amendments, although I know, of course, that the purpose of this debate is to expedite discussion—and I hope it will. Nevertheless, as we come to some of the specific points later on I will answer the details such as the ultra vires point, the trading profits point and so on, in some detail. At present I think I had better speak to this amendment and to the general principles to answer what has been said so far.

As the noble Lord, Lord Mishcon, said, this amendment is one of ten which would have the effect of substantially weakening the control over local authority capital expenditure which is an essential part of the proposals in Part VIII of the Bill. It strikes at the heart of the new proposals to such an extent that I fear there must still be some serious misunderstanding about the need for the new proposals, their effect and the very real benefits which they offer to local government. Having listened particularly to my noble friends Lord Ridley and Lord Sandford, I make that statement with more feeling than I might have done before. Therefore I hope the Committee will understand if I reply to the amendment against that wider background. I think it would be inappropriate to deal with this amendment in a narrow fashion.

One of the primary responsibilities of Government is to secure a proper balance in the use of resources between the public and private sectors. This is particularly important where capital investment is concerned but there is currently no statutory power for the Government to control the capital investment of local authorities. There is only a control on borrowing and that control has proved 744 ineffective in recent years because authorities have shown themselves able and willing to finance capital expenditure from internal resources over and above the levels provided for in the Government's public expenditure plans. Local authorities have also provided capital assets, including municipal offices and buildings, by such means as leaseback arrangements, under which the cost has been hidden as revenue expenditure instead of capital.

I entirely agree with the noble Lord, Lord Evans, and others who have intimated that local authorities have had a generally good record in keeping down their capital expenditure, but it is only fair to say that a considerable part, indeed if not all of this, is probably due to the constrictive effect of the existing detailed borrowing and project controls. Even so, I recognise that total capital spending has fallen substantially in recent years and that the total capital spending of local authorities has not been very far from the provision in the Government's spending plans. But within that performance it is significant that local authorities have tended to underspend on some services, particularly on housing, and to overspend very substantially on those areas in what is called the locally determined sector where they have been free to supplement their borrowing approvals by contributions from the rates. The locally determined sector borrowing allocation was reduced each year by the previous administration in an attempt to allow for the use of revenue finance, but each year local government used enough extra money from the rates to push total LDS spending well above the Government's plans.

That situation was less serious at a time when there was over-generous housing provision—over-generous in the sense that it was more than local authorities needed or wished to use. We now have more realistic provision for housing and there is no longer any "fat" within the housing provision to offset overspending in other areas. Hence the need for the new system. However, it would be wrong to regard these proposals as simply an extension of Government control, and I am sure I do not surprise the noble Lord, Lord Evans, when I say that by no means do I accept his reference to our moving down the road to what he called 745 "democratic centralism". This is a package of changes which seeks to reflect more accurately the respective concern of central and local government than does the present system and it offers authorities—and I say this deliberately—an unprecedented freedom from detailed control by central Government.

Let me explain. This is so important to understand because any assessment of what we are seeking to do must be measured against the present position and what some noble Lords have said they wish to see retained. At the present time approval for capital expenditure is given in a confusing variety of ways. It can be by block borrowing approvals, as in the personal social services or the locally determined sector; by a combination of block expenditure ceiling and specific borrowing appeals as in housing; by approval of building starts, as in education, or by a combination of grant and borrowing approvals, as in transport and some minor services. Local authorities have often and long complained about this unco-ordinated hotch-potch of control procedures. They have also always complained about the amount of detailed control to which their capital expenditure is subject—even down to having the very design, size and costs of individual projects crawled over in minutest detail by vast armies of people in Whitehall.

That is the position as it is at the moment. It is costly, it causes delays and it is frustrating in the extreme; and I wonder, when noble Lords tell me about the present system, whether they really know, by working within it as I have had to do, just how frustrating that can be. For every single thing you want to do you have to go to Whitehall and there are masses of forms to be filled in. Noble Lords would be astonished if they could see how many, and that is what local government has to do today. It is frustrating, it is wasteful, it costs money and staff, and although local government thinks it has freedom in fact it has no freedom because if it is not approved for key sector approval then it may not borrow. The local government officers have to come to London and, as I said at Second Reading, it is British Rail which would most fear for this because local authority officers will not be using their services as often in the future.

Lord MISHCON

I wonder whether the Minister would kindly give way for one moment. Is he really telling the Committee that all the local authority associations of this country do not know their business?

Lord BELLWIN

I am not saying that at all. What I am saying, as one who has spent so much of his life working in local government and having tried to get through capital projects as we went along, is that I know the frustration that exists, and I suspect that much of the great pressure on members who are opposed to this comes because in fact they have not had to do the day-to-day nitty-gritty work, whereas for those who have to do it it is part of their day-to-day routine.

Our new proposals will change all that. Ministers will have a duty to make allocations of prescribed expenditure for each authority. This will be far from the rigid control which some people have made it out to be, and most important to note carefully is that an authority will be able to increase its allocation in not one but a number of ways: by a 10 per cent. carry-over between years; by use of capital receipts from the year in question or any previous year. I should like to say to my noble friend Lord Ridley that I did not take his point because in fact there is a complete freedom to continue to use capital receipts that are in a capital fund or that there may be in the future in any capital fund. I am glad to advise him on this, and I make no bones about it that when I was in Leeds I made extensive use of capital receipts. It is right that local authorities should be able to use their resources to the best advantage, because what better can there be than to look at capital resources and to say "I could do better. If I had the money from disposing of one thing I could apply it another". Therefore the use of capital receipts is an incentive for an authority. It must be a good thing for an authority to use its resources and this Bill will in no way restrict that. On the contrary it gives that as an additional allocation on top of what may be allocated for authorities to use.

As to that, the only restriction on capital receipts will be on certain housing receipts on the sales of council houses and repayments of mortgages. Only 50 per cent.

747 of those will be able to increase allocations, because obviously the scale of receipts there is likely to be very considerable. In addition, allocations can also be switched from other authorities anywhere in the country. What a new breakthrough that is. You can go to any authority in the country who may have an allocation more than it wishes to use and, by agreement, you can have that allocation. This is a flexibility that, to my mind, is of enormous importance.

Allocations will also carry with them an automatic borrowing approval. Once you have the allocation you do not have to come to Whitehall again to get borrowing approval. The total allocation with all these additions can then be used for any purpose. Local authorities will be free to decide their own priorities, not merely between projects but even between services. For the first time ever it will be the local council, not Whitehall, which will decide in any year whether the need is for schools rather than roads, or old peoples' homes rather than council houses. Project control will be a thing of the past except for projects of national or regional importance. I must say that this is an enormous breakthrough for local authorities. It is a degree of freedom which, when I was in local government, I never dreamed Whitehall would concede. It is only when you have to work within it that you can appreciate the extent of it. The noble Lord, Lord Mishcon, said that I was a Jekyll and Hyde. He said it in such a nice way that no one could possibly take offence. But I would repeat what I said on the financial proposals yesterday. If I did not believe that this was not only good but a real advance for local government, I could never put it in the way I do. It is what I always wanted, and I believe in the end it will be an enormous boon to local government.

To try to come to a conclusion I say that in return for all this all we are seeking is a ceiling on the aggregate of local authority capital expenditure. If I may come quickly to the details of this particular amendment, which refers to prescribed expenditure, it is simply expenditure which is subject to control. The term, "prescribed expenditure", is new in this context, but the expenditure to which it refers will be familiar to local authorities because it covers all types 748 of expenditure which authorities include as capital in the statistical returns they make to my department. I finish by saying that it is essential that the expenditure which is to be controlled should be related to assets on which payments are to be made, not to the method of finance. I will not try to deal with the other points in detail. I hope I have emphatically said why I feel this is not just something desirable; I think it is a great breakthrough for local government, and I hope the Committee will support it.

Lord SANDFORD

The Minister speaks very convincingly from a long experience in local government, but may I ask him this. Bearing in mind the fact that these proposals have been with us for a long time now and the Bill has been before Parliament from the beginning of the year, how is it that, if these proposals do have the merits the noble Lord claims, he and his colleagues have so far totally failed to convince the associations of these merits? Surely there must be something that accounts for that. That is the first point. The second point is this: Given that fact, and it is an undoubted fact, would it not be wiser, if he thinks there are such merits and virtues in these proposals, to spend a bit longer to convince local government that they do in fact exist?

Lord BELLWIN

If I may just answer that point, the very fact that my noble friend Lord Ridley was uncertain about the intentions with regard to capital receipts is very significant. I said yesterday on the other financial proposals, and I say it now, that there continues to be considerable misunderstanding as to exactly what we propose. The very fact that capital receipts can be used to the extent that they can is so important, and yet when I am asked why so many people in local government still seem to be unhappy when I am so enthusiastic, I must come back and use that as the basic answer; that there continues to be considerable misunderstanding. I venture to say that if the discussions that go on were more objective and more willing to look in detail at exactly what the proposals are, I think we might have less misunderstanding.

Viscount RIDLEY

I must accept what my noble friend says about capital 749 receipts. I apologise if I got it wrong. The Bill, when it originally came to this House, did include that; there is some concession for which we are grateful. A few more bones would help, too.

Lord NORTHFIELD

I have listened with interest to what the noble Lord, Lord Bellwin, has said, and said as far as I am concerned reasonably convincingly. But I wonder whether he appreciates that the trouble arises not only from a failure to get across the principle of what the Government are doing here but a failure to communicate the content of what they propose. In other words, the difficulty the Committee is in, and many local authority members are in, is that they read Clause 63(1), which seems to give the Minister total power to designate any figure about capital expenditure and to impose it on the local authorities. Then we come to all these amendments, all the worries of local councils all over the country; my amendments, for example, dealing with the need for local authorities to be able to spend on industrial development. The Government have given no clue as to whether in using Clause 63(1) they will be taking account of these sorts of things in arriving at the total to be imposed on the local authorities. I wonder if the noble Lord realises that many of us who understand the principle, and have sympathy with what he is saying, nevertheless end up in difficulty, because he has never spelled out how these powers are to be used on sensitive matters which local authorities and others think they will be denied from using under the powers of Clause 63(1).

Lord BELLWIN

As far as I know, Clause 63 refers to the total overall amount that will be allocated, but I say again that within those sums the authority gets its first time ever opportunity to decide where its priorities are. I hope the noble Lord, Lord Mishcon, will not mind my saying that that should not be belittled; it is an enormous thing. We always wanted to spend it as we felt best; we felt that we knew better than Whitehall where our priorities were. We wanted to be able to do this very thing.

To take Lord Northfield's point, I do not know if the failure to put the detail over is the fault of central Government, local government or anybody. I take 750 what he says as a fair point; I must accept it if he says it. I cannot say other than that, if that is so, it is to be regretted.

What I have said is the fact and that is why I believe this is not the ogre it has set out to be, but quite the contrary. I have spoken to many people, and when I said this the last time I was told "name some"; I can name any number of people who take my point entirely about this—many, many who doin local government.

Baroness FAITHFULL

I speak as a former chief officer of a local authority. I apologise to the Minister because I still do not understand the question of flexibility as between one authority and another. Do I understand that, if reference has to be made for capital expenditure to the Department of the Environment, money can be transferred from one authority to another authority because one is spending too much and another too little? I just do not understand this point.

Lord BELLWIN

It is allocations, or parts of allocations, which can be transferred to any authority in the country at all. That is so exciting, frankly, if you think about it, in the opportunity it provides, that I can well understand that my noble friend, as an officer, finds it hard to grasp in the first instance.

Baroness FAITHFULL

If I may rise again, I should find it exciting if I were the recipient, but whether I would find it quite so exciting if I was the one who had to give, I am not quite sure. However, I am most grateful to the Minister for explaining it to me.

Lord DIGBY

I wonder whether the Minister could give us some idea as to how this allocation will be made. Will it be on a basis that the country can afford £X divided among all the authorities? Or will the Government go in detail into whether such an authority needs, for instance, so many schools, so many social projects, and so on? There appears to be a 10 per cent. tolerance and I am not clear whether this is to allow some flexibility for local authorities, or whether it is to allow for the fact that spending and budgets are not likely to be the same. It is worrying to local authorities 751 from quite a different point of view, which has been advanced by most people. If an allocation is granted, I believe that the maximum will also tend to be the minimum and there will be great pressure for that to be spent, although it may not be absolutely essential.

Lord BELLWIN

Very simply, the allocations will be built up in this way. Just as now, individual services and functions will make their bids. For example, an authority may say that it wants to do so much in education, so much for housing, so much for social services, the environment, and so on. The blocks will be built up exactly as they are now into an aggregate total within what it is felt each service would like to see spent. That will then be made into one total aggregate. It will come as an allocation of that aggregate, but the difference is that it will now be up to the authority—although it will be specified as to how it is built up: so much for education, social services, et cetera—to disregard that if it wishes. It will be entirely up to the authority so to do. That is how it will be done. That is not very different from the present system. The difference can be seen when one starts to decide how one applies the allocation of monies.

Perhaps I could say what is, as far as I am concerned, pretty much a last word on it, unless we do get into the detail. We must remember that this is a package deal. It is a considerable reduction in detailed control in return for a clearer method, if you like, of overall control. That is what we are setting out to do.

Lord MISHCON

If I sound it correctly, I think that possibly the Committee has reached the stage when it may want to say whether or not it thinks that the Government should think again before it flies in the face of all the local authority associations of this country and local government throughout the country. I repeat that there should be an opportunity to think again and talk again, which is the only thing I ask of the Committee and of those who have spoken from all sides of the Committee in favour of what I tried to put before. In those circumstances, if it meets with the convenience of the Committee, I propose to withdraw my Amendment No. 131 and not move my Amendment No. 132, to give the Committee an opportunity to divide immediately on the main matter, which is, of course, to leave out the clause.

Lord BELLWIN

I understand the reason behind the amendment but I do not believe that it would be of any real help to local authorities. It would, for a start, introduce uncertainty about the extent of the controls. The word "improvements" itself is not capable of any very precise definition—although we intend to help authorities by indicating that we would not regard as an improvement anything that is required merely to keep a structure in use for its existing purpose. But having decided broadly what is an improvement an authority would then have to decide what constituted a "major" improvement. There could be no guarantee of consistency between authorities and, in consequence, no guarantee of consistency in the coverage of the control or the reporting of expenditure or improvement works. This would not be acceptable.

Nor would the amendment allow authorities in general to increase their capital expenditure. Expenditure which is excluded from control will still have to be contained within the national provision for capital expenditure by local authorities. Consequently the aggregate amounts available for allocation to authorities will have to take account of the estimated amount of uncontrolled expenditure. This could require reductions in the amounts available for allocation, and so reduce authorities' freedom to decide their own priorities since each of them would have to take their pro rata share of the reduction, no matter how little, or how much, they spent on the items excluded from control.

Lord MISHCON

Having heard the Minister expatiate on this problem I do not intend to carry it any further at this stage. I ask the Committee for leave to withdraw the amendment.

Lord BELLWIN

This amendment would remove from control under this part of the Bill expenditure on the renewal or replacement of any capital asset and also on the installation of movable and immovable plant, machinery and apparatus. The present national accounting practice is to count expenditure on all those items as capital expenditure. If the Government were to accept these amendments, a substantial loophole would be created in the control over the totality of local authorities' capital expenditure as it is conventionally understood.

It is true that when a local authority has to scrap a vehicle, for example, and replace it with a new one, the net effect on the authority's stock of capital assets is nil. However, and leaving aside the question whether the replacement is in fact necessary, the local authority's expenditure on the replacement has to be financed, directly or indirectly, out of ratepayers' pockets. This still has the effect of diverting capital resources from the private to the public sector. The exclusion of such expenditure from control under the new system is, therefore, considered to be unacceptable.

I know that the noble Lord understands exactly the points I am making, and I hope he might feel they have the relevance I suggest they have.

Lord MISHCON

I certainly understand the clear words of the Minister. I said before that the relationship of big brother and little brother in the case of national government and local government has now been altered to that of 757 father and child. I now feel that it is almost that of stepfather and stepchild when it gets to the stage of national government saying to local authorities, "Of course you might be naughty and you might cheat, and might in fact replace and renew in order to try to evade the capital control." When we get to this stage I am reminded of the speeches that were made earlier. I ask for the Committee's leave to withdraw the amendment.

Lord BELLWIN

Paragraph 1(e) of Schedule 9 refers in general terms to "grants and advances of a capital nature". This would obviously exempt any grants or advances that may be made for purposes in the nature of current expenditure, for exemple, wages and salaries, costs of operation, maintenance and repair. Beyond that, it will be for individual authorities to decide for themselves whether a grant or loan is of a capital nature. In making their decisions, their main criterion will 758 be whether, if they (rather than the recipient of the grant or loan) were the spending agents, they would regard the expenditure as being of a capital nature.

In the absence of any precise, agreed definition of "capital", it is neither necessary nor desirable to be more restrictive than this. In any case, in attempting a greater degree of precision, the amendment might exclude from control grants or advances which are for general capital purposes—and are therefore of a capital nature—but which are not demonstrably for a specific capital purpose. I suppose I must resist the amendment, although I confess personally that I should like to talk it through elsewhere. Thus, while I cannot accept it and cannot make any commitment about it, I should like to discuss it further elsewhere.

Lord MISHCON

I am grateful for what the Minister said and, in the circumstances, beg leave to withdraw the amendment.

Viscount RIDLEY

Does the noble Lord envisage the larger sum being used to buy a Rolls-Royce instead?

Lord BELLWIN

There is alreday an exclusion for de minimis expenditure in paragraph 2 of Schedule 9 to the Bill. This was introduced in response to the criticism that under the original proposals—those were the ones which confused my noble friend Lord Ridley on the original proposals about capital receipts—local authorities would have had to account for individual purchases of even the most trivial sort (typewriters, ashtrays and so on) against their annual allocations for capital expenditure. In terms of administrative and accounting costs, it would make little difference whether the limit was £5,000 or £50,000; but the higher figure would make the control system much less effective, since a much bigger proportion of local authorities capital expenditure would be exempted.

It may not have been appreciated that expenditure which is excluded from control will still have to be contained within the national provision for capital expenditure by local authorities. Consequently, the aggregate amounts available for allocation to authorities will have to take account of the estimated amount of uncontrolled expenditure. This could require reductions in the amounts available for allocation, and so reduce authorities' freedom 760 to decide their own priorities since each of them would have to take their pro rata share of the reduction no matter how little or how much they spent on the items excluded from control. With a threshold of £5,000 per item this should not be a problem, but exclusion of items under £50,000 could have a serious effect on allocations.

The Secretary of State already has power under Schedule 9 to alter the de minimis limit if he sees fit. Price movements in public sector capital expenditure could be reflected in any such alterations. I do not know what confidence that gives to the noble Lord, Lord Mishcon, or to anyone else for that matter, but it is there and I would hope it would always be used sensibly whoever was using it.

Lord MISHCON

It is quite correct that the confidence which the Minister thought might not be transmitted from his Bench to mine in fact has not been so transmitted because in his remarks he did not mention any sort of figure. I was wondering, if he thought £50,000 was too much in regard to the vehicle and plant allowance with which we are dealing now, whether he had in mind any other figure than the £5,000 I mentioned.

Lord BELLWIN

No. The £5,000 figure is the one that is there and is the one to which I am obliged to stick. I fear I cannot go beyond that.

Lord MISHCON

I am sorry to rise again, but do so only to pursue the point for one moment. I mentioned that the figure of £5,000 was an indication that had been given in, I think, a document; I do not think that it is actually in the Bill. Therefore, I was hoping that instead of it just being left in vacuo, the Minister could state that the minimum prescribed sum would be £5,000. At least it would be some indication as to where we stand.

Lord BELLWIN

I am sorry that I gave a wrong impression there; the noble Lord is quite right. No, I cannot give a figure at the moment. I knew of the £5,000 figure. I just assumed that it was there, but it is not. What would be helpful would be for me to say that when the decision is taken regarding the final figure I think we should want to see