HL Deb 26 April 1984 vol 451 cc208-50

Committee stage resumed.

Clause 2 [Designation of authorities]:

Baroness Stedman moved Amendment No. 11: Page 2, line 23, after ("report") insert ("or reports").

The noble Baroness said: I beg to move Amendment No. 11 and also to speak to Amendments Nos. 15 and 33 at the same time. Amendment No. 15: Page 2, line 26, leave out ("or, as the case may be, each of the authorities"). Amendment No. 33: Page 3, line 12, leave out ("or authorities").

The first stage of the rate limitation process that we are discussing requires the designation in year one of authorities whose rates could be capped in year two, and we hope that this group of amendments will ensure that there will be a separate report to Parliament on such designation for each of the authorities that are being designated.

Fears have already been expressed in the course of this Committee stage that proper consideration of the rate-capped authorities will not be possible if they are all put together in one order. Really the process of rate limitation is a constitutional one, and if Parliament chooses to enact this Bill then it will be a case of Parliament putting its sovereignty over the elected bodies. In that case Parliament must ensure that it is parliamentary sovereignty which is replacing the local electorate. The danger with so much of rate limitation in practice is that the local electoral wishes will be supplanted by the Executive and not by parliamentary sovereignty.

It is an inevitable consequence of rate capping that Parliament cannot give due consideration to the decisions required once it has decided to exercise the power over the local councils. Therefore, Parliament should pause and think whether it really does want to replace local electoral power with the will of the Executive. That is what this group of amendments is all about; it is to explore what is happening.

It would be a reflection of the gravity of the rate limitation process if each authority being designated under the selective scheme had the right for its case to be properly considered by Parliament, but the present provisions of Clause 2 do not permit that proper consideration. The Government can wrap up as many authorities as they wish in a designation order and Parliament will not be given the opportunity to consider the affairs of the individual authorities, such as the reasons for the apparent overspending, and why it is that GREs do not reflect that authority's spending needs, and so on.

They do not have a chance to discuss the part that the Government grant reductions might have played (in leading to what appears to be an excessive rate increase) in the local labour market, unemployment, and the different services they have had to apply. We believe that if the principles of this group of amendments were accepted then a further development would be to give Parliament the opportunity to accept, or reject, the designation of the individual authorities. We believe that that power should rest with Parliament and that the authorities should be satisfied that they are going to have a fair deal. I beg to move.

Lord Bellwin

At present Clause 2 requires the reports laid before the other place to set out the authorities designated by the report and a statement of the principles in accordance with which the designa-tions have been made. The principles used must be common, at least, to all authorities in the same class and we have said that we would expect the principles usually to be the same for all authorities. In those circumstances it is difficult to see what could be put into separate reports which could not be as easily put into one report.

Clause 2 as drafted requires the Secretary of State to set out formally the principles he has used in exercising his statutory discretion. He should, of course, be accountable for the decisions he takes. The informa-tion given in the report will provide the basis on which he can be questioned. There are in the other place procedures which allow the Secretary of State to be held accountable for his decisions, by Parliamentary Question, by an investigation of the relevant Select Committee or by the other procedures open to Members of that place.

Separate reports would not assist in that process. They would give the false impression that what was at issue was the merit of designating each of the particu-lar authorities rather than the principles on which designation is based. The requirement in Clause 2 for selections to be made on principles applying to all authorities in the same class is a safeguard for local authorities. It is intended to prevent a Secretary of State from selecting authorities on arbitrary or inappropriate criteria.

There is no difficulty with the rate support grant settlement annual debate of the circumstances and the case of each individual authority being taken out and debated at whatever length is needed. Certainly from all that I have read in the Hansards of the other place there have been no inhibitions on the part of the representatives of those areas from making their cases for their local areas powerfully where they feel they have cause for concern. I think that the same would apply here.

However, the real reason why we would not want to accept the amendments is the one I have given; namely, that it is the principles that we should be dealing with in Clause 2. As long as there has to be—and I accept the noble Baroness's point on this—opportunity for authorities to make represent-ations, and as long as one is satisfied about that, then I think there is no cause for concern. I feel that as we have it now the safeguards are in place for that. I would be concerned if it were not so, but I believe that that is the position at the present.

Lord Graham of Edmonton

My noble friend Lady Birk will speak more fully on a certain point, but may I ask the Minister to help us? What concerns Members on this side of the Committee is the time that Parliament would give. The Minister points out that there is a comparable procedure with, for instance, the rate support grant orders. These encompass everything, and all boroughs, all affected authorities, are able to make representations, and negotiations take place and not merely on whether the vote shall not take place at 10 o'clock.

The order-making procedures which will flow from this legislation will encompass an, as yet, undefined number of authorities who are deeply affected. The Minister will be aware that every authority that is affected will want to explore the order very fully and deploy their arguments. Can the Minister now, or later in this debate, tell us that he would envisage that as much time as is reasonable will be given for each of the authorities to deploy their case?

I can think of at least an hour being needed for a case to be deployed on the effects or consequences of the legislation on each separate authority, whether it be 12, 14, or 15. Is the Minister saying that it would be possible, without anyone taking advantage, for timescales of that kind to be envisaged for the case to be made?

Lord Bellwin

I hear what the noble Baroness says. It is a proper point. My answer is that there has to be opportunity for authorities' view to be made known. Whether that particular route is the best or the only one, I do not know. Let us assume a situation where an authority is designated. Its first move, I would have thought, is to consider whether or not it wishes to make a derogation, whether it wishes to have its figures redetermined. I think that later we have some amendments down which touch on that, where we will debate the pluses and the minuses of that. On the assumption that the authority does want so to do, then it will have the chance when this is debated in Parliament. First, it will have the opportunity as an individual authority to come to the Secretary of State and make its views known at first hand, its thoughts and its reasons. That it will have in depth, however long it takes in each case.

Additionally, in Parliament, the proposal here is that it should be done singly as opposed to the composite way. I will think about what the noble Lord has said but I have not heard, read or thought of any reason to doubt that there will be proper opportunity for it to be said in another place what are the concerns and anxieties of that individual authority. I do not think that it will present the problem that noble Lords may fear.

Baroness Birk

I think that in this whole Bill we are dealing with territory which is comparatively new in many respects and also highly dangerous. At least, that is what many of us feel. I think that the Minister acknowledged that there will be a lot of concern on behalf of the authorities themselves. I feel that the main point about this is that the Executive will take over the functions of Parliament. We all know that this is not a practicality. No Secretary of State can sit down and read every word in every report about every individual authority. This has to be done by departmental officials, who no doubt do their best but are very busy and often with very heavily-loaded jobs. We are supporting this series of amendments because we want every check and balance that we can have when dealing with this. The Minister should keep in mind that this is very difficult territory. Whatever one's party political views are, it is still something which affects the whole of our democracy and the concern between central and local government. I am not concerned at this moment whether it is a Labour authority, a Conservative authority or a Liberal authority. I do not think that this is the point at issue. The point is that the authority should have the opportunity of explaining what it is doing. This is why packaging it up in one report seems to me to be highly dangerous.

Lord Bellwin

I can only say this. Would I share the concern of the noble Baroness if, as I said a moment ago, I felt that there would not be opportunity for an authority to make its views known and even to go beyond that, if it so desires, and make detailed representations. The noble Baroness knows very well how it all works. It is true that often it is the officials who prepare the analyses and so on, but the responsbility for reading, studying and acting upon them is very much that of Ministers. Then the opportunity is given in another plce for that to be questioned and discussed. I understand the concern. It is a very proper one. I just do not think there will be the problem that noble Lords fear.

Viscount Ridley

I put my name to this amendment. It is more important than it looks at first sight. As was mentioned very often at Second Reading, it is a question of Parliament making the decisions as to which authority is going to get caught and not, with great respect, leaving it to the civil servants or to the Minister. This is a method whereby each authority in danger of being capped has an opportunity to have its case debated in Parliament. I think it is very important. I do not think that it is the same thing as a rate support grant debate, to which my noble friend referred. That is taken late at night and deals with the level of grants which the Government propose. That is entirely within the Government's discretion. This is much more serious and, as the noble Baroness, Lady Birk, has very wisely said, is totally unknown territory.

I hope that the Government will look very carefully at this very modest amendment. Parliament, it may be said, has enough to do without debating 20 authorities in detail each year. It is up to Parliament itself whether it decides to do it. It does not have to debate them. It is the opportunity which we are seeking. I ask the Committee to realise how much, I think, all the local authority associations feel that this is an amendment of crucial importance.

Lord Graham of Edmonton

I want to press the Minister. I fully understand that the Minister believes that, given the opportunity—and shall we say there are 15 authorities designated—they would first of all quite properly, as he would hope, come and argue their case. There would be not as much time in the world, but we are talking in terms of meetings which might take hours of explanation and refutation and so on. But at the end of the day we are envisaging the possibility that each authority will not only feel that they have been aggrieved by the very nature of the action but that they have demonstrated to their ratepayers and others outside that they have done as much as they can publicly. There are matters that take place at No. 2 Marsham Street—and we respect confidence and also the ability to talk off the cuff. But if I had anything to do with any authority, I would be one of those who expect their MPs, regardless of party, to use the opportunity. There will be alliances, not political alliances but geographical alliances, which we want to argue.

What we are worried about is this. It is possible that the report could take an hour and a half, or it could be a shorter period, to discuss. If we are talking about a day of parliamentary time, that is almost open-ended. The Minister envisages that it is possible for each authority to be dealt with properly within a timescale. The affected authorities will need adequate time to vent their feelings—and they are not going to get very much; for they have had the earlier process of meeting the Minister and they know the score. I can see some possibility of reflection. That is why we are asking for separate reports so that each of them has the dignity of having its case argued separately.

I take the Minister's point. They are all, as it were, in a class of their own. They have all been designated for the same crime—their unwillingness to comply with the Minister and the law. To that extent they are all the same. But each of them, of a certainty, will have a separate case to argue. Without getting down to the nitty gritty of words on a piece of paper, is the Minister telling us that he believes that it is the desire of Parliament to provide the opportunity for each of the affected authorities to be given adequate time to argue its case? He envisages the procedures of the other place allowing adequate time for each of those individual cases to be argued fairly.

Lord Bellwin

I think the point to bear in mind here is that the principles involved are principles which are common to all the authorities. We are slightly missing that. That takes out a lot of the time. I envisage that there will be enough time for each authority to have its representatives in another place speak and say what is to be said. I do not mean this being done in the form of a two-hour debate. I do not see it like that. On the other hand, the noble Lord, Lord Graham, is far more knowledgeable than I am about the proceedings in another place. He will know some of the inhibitions of parliamentary time. I pay all the more attention to what he says about it.

When we saw the amendment, we discussed it, as always. I believe in starting from the base point of the common principles that will be involved and the fact that the authorities certainly will not be denied the opportunity really to go in depth into the nuts and bolts of it. I think that the amount of time that Parliament could make available should be more than sufficient for each authority to have its case referred to. The argument on time can only be as to the depth of such a debate in another place. It is a matter of the view that one has to take. Then I fall back upon my point about the common principles and the fact that details will have been gone into, anyway. For that reason I feel that there is no need for the concern that has been expressed.

8.20 p.m.

Baroness Stedman

The Minister referred to the fact that this question would all be adjudged by common principles, but those principles are not written into the Bill. We do not know what those principles will be, and indeed various Ministers have said that they will vary according to the situation at the time that a decision is taken. Will Parliament have a chance, will another place have a chance, to discuss those principles before they are put into operation? Otherwise, it will mean that the authorities will come cap in hand to the Secretary of State in Marsham Street, not knowing what are the principles, and not having any chance to argue about them with anyone else, except when the order is considered on the Floor of the House.

Lord Bellwin

When the selections are made, clearly the basis of the criteria will have to be spelt out. Of course it will be; it must be. Then an authority will know exactly on what basis it falls into those categories. 1 suspect that the majority of authorities have a good idea now, but we do not genuinely know until the final analysis of the 1984–85 figures is available. I notice that later we are due to debate the matter of the criteria and the extent to which they should be spelt out; we shall be coming to that shortly. There is no doubt; there can be no question but that when designations are made an authority will have to know why it comes within those categories, and then it will have an opportunity to question it.

Baroness Stedman

Will Parliament know what are those principles being applied to the authorities?

Lord Bellwin

Of course, this is something on which there will be no secret; it is something which everyone will have to know. That is the basis on which the selections will be made.

Baroness Fisher of Rednal

Will the noble Lord the Minister tell us how we will get to know?

Lord Bellwin

When the decisions are made about the authorities which will come within the designation list—some people call it the hit list—it will be spelt out why the authorities are so designated. There will then be plenty of opportunity for discussion, and we shall come to this in more detail in later amendments.

Lord Walston

I do not quite understand what the noble Lord is saying. It seems to me that he is saying that Parliament will be informed of these criteria in exactly the same way that everybody else will be. It will be a fact that they will be graciously told about. However, from what he said, there does not appear to be any opportunity for Parliament to discuss the criteria either in general or as they apply to particular areas which Members of Parliament represent or in which they have special interest. Am I right in saying that it will be simply an edict which comes down from the Government and which will be announced to Parliament, or will there be an opportunity for Parliament to discuss the criteria before a decision is taken?

Lord Bellwin

The procedure will be straight-forward, and the proposals for the basis of selection and the powers regarding the basis are contained in the Bill. That is the point. The noble Lord says that an edict will be sent down. Any time that a statute gives powers to the Secretary of State and he makes an adjudication, judgment, or whatever, one can call it an edict or whatever one wishes, but that is what it will be. If the noble Lord refers to Clause 2(1) and (6), he will see that under those subsections Parliament will know of the situation, but the extent to which it is subject to debate will I am sure be for Parliament to decide.

Lord Graham of Edmonton

We must continue to have this debate. In another response the Minister said that the principles were not yet fully clarified or codified in the Minister's mind. But the objective was quite clear. The objective is to curb the high spenders. The principles upon which that will be done have to evolve. The Minister is telling the House that what Parliament is being asked to do is to agree to an objective. The method by which the objective will be carried into effect—that is, the basis—is yet to be determined in the ministry. When it is, Parliament will not have a chance of approving it, but will be told at the same time that the hit list authorities are told that this is the reason they fall within it.

That of course is a way of proceeding, and a Minister can justify it on the grounds that many other pieces of legislation have followed in the same way. But I beg the Minister to realise that for the authorities affected this certainly could be a matter of political life and death, and it could have other connotations, too.

I take the Minister's point that what we are doing is discussing the reason for principles being spelt out in later amendments. On the other hand, the problem with all debates is that sometimes one is told later that we should have raised the matter earlier. The Committee wants to be flexible and the Minister is playing his part in that. What worries us is that if there is every intention that all designated authority representatives will have the chance fully to justify and defend their cases, what is wrong with doing that neatly by accepting the amendment, so that each has a separate report which then takes its share of an enlarged debate?

I mentioned a period of an hour. If it were Islington or Camden, I am quite certain that each of the Members of Parliament would want fully to deploy their arguments. Whether an hour is right or wrong, the Minister thinks that a good period of time will be given, and in terms of 12 authorities that could mean a 12-hour debate. The Minister says it could be a 12-hour debate on one report, with each of the 12 reports debated within it. We are saying, "Why not make it simple?" We are not talking about acceptance or rejection, because we know the reality of parliamentary arithmetic. If they are put to a vote, they will all be treated the same way, but it is a question of the dignity of giving each authority affected the opportunity to say, "This is our little bit of parliamentary time". But the noble Viscount, Lord Ridley, made the point that whether or not the time is given, will be up to Parliament. We are not insisting. We are saying simply that the legislation should provide for the opportunity for Parliament to allow the time and even lay down the timescale. I think the Minister could win some friends outside the Chamber as well as inside if he would accept the principle of the amendment.

Lord Bellwin

I am always willing to win some new friends; we need all the friends we can get. There is some misunderstanding here. Clause 2(1) requires a report to be laid before the House. Clause 2(6) requires that report to set out the selection principles. When that is set out the formal debating procedure that follows is, I presume, part of the normal business of another place. I am sure the usual methods will be used to query the reports. That surely is when the opportunity arises for debate of both the principles and, at the same time, the individual circumstances of the authority.

I am sorry I cannot help the Committee more than that. We are talking about a procedural matter. I understand the original point, and I take the point the noble Lord makes when he talks about the impact upon the authority concerned, though I am sure he would take it from me that it will not be a great surprise to many of the authorities concerned because the game has been talked about for long enough and they know the general area of these matters. I accept that the opportunity must always be there for discussion by Parliament and by the authorities concerned in all appropriate places where representations can be made.

Lord Sandford

If my noble friend is right—and I am sure that he must be—in indicating to the Committee how these reports will be received and dealt with in each House under Clause 2(6), then there is surely no difficulty in his accepting one or other of Amendments Nos. 28 and 29. If he will say to the Committee now that he is minded to accept one or the other —preferably No. 29—I think we shall find it easier to proceed. Amendment No. 29 only puts in statutory form what he has just indicated.

Lord Bellwin

I cannot at this stage indicate a likelihood to accept those at all. We should want to debate them in depth as we come to them.

Lord Tordoff

To pick up the point that the noble Lord, Lord Sandford, made, as the Bill stands at the moment it is only in one House of Parliament and not in both Houses unless and until those later amendments are accepted by this House. The clause refers, as the Bill stands at the moment, to the House of Commons only. This House would have no say at all.

Lord Sandford

No, but my noble friend was indicating in reply to the noble Lord, Lord Graham, that these reports would be open to discussion in each House of Parliament and that is what we expected him to say. We were glad to hear it from him. If that is so, then there is no difficulty—

Lord Bellwin

I did not say that at all. This is yet another amendment which we are due to debate as we go along. I assure your Lordships that very little has been missed. Everything is down for discussion but it has been decided—and I do not question it—that they should be individually discussed as amendments on their own. That is why we have a slight difficulty in separating one from the other. But I have no objection at all to the debates running over into each other.

Lord Stallard

I wonder whether the noble Lord would clear up a point for me. I am becoming a little confused about the way in which the discussion is going on. I understood—maybe wrongly—that the initial report would be presented to the House. Following that, there would be discussions between the Secretary of State, the local authorities, and so on, and the reports would flow from those discussions. They would be the subject for debate. I am under the impression that the initial report will not be the subject of any debate at all in either House. That is not debatable. What will be debatable is the result of the discussions. Somebody will say that there is no point in having a debate until after the discussions have taken place.

So there will be no discussion or debate on the initial report; but there will be a debate at the end of this long process of discussion during which it is possible for pressure to be exerted on local authorities to do deals because of worse things that might happen if they do not agree to this or that. It is those reports, as I understand it—and there is nothing laid down—that might be debated and we are not clear what form the debate will take; whether on a negative order or an affirmative one. I wonder whether that could be clarified. There will be no point in having a debate on the initial report; but debates might take place after discussions with the local authorities.

Lord Bellwin

As I understand it, when the report is laid before another place it will set out the principles which have been specified and the criteria on which selection will be taking place at that time. When it is so laid, there will then be an opportunity for debate. When that takes place, authorities will know whether they come within it. I do not know what the wording of the report will be, but I presume it will set out that by applying those principles certain authorities will be part of it. Whether or not the report is subject to any formal debating procedure in the Commons—which is really the point of the question of the noble Lord, Lord Stallard—is something that one needs to go into more closely. I am not in a position at this moment to give as much detail as I might like. But I certainly undertake between now and the next stage to go into that closely, to notify all your Lordships who are concerned on the point, and if necessary we can talk about it again.

Lord Underhill

May I intervene on this matter? Whereas there is provision in certain parts of the Bill for procedure to be followed—either by the affirmative procedure or by annulment—the Notes on Clauses, which are what I go by, state quite clearly: The report is to be laid before the House of Commons". It is not stated that this shall be accepted by the House of Commons. There is nothing at all. One would have thought, if that was the intention, that it should not only be put in the Notes on Clauses but be written into the Bill.

Lord Bellwin

I say again that I ought to get more information for your Lordships about the details of the form in which a debate will take place. At this stage of the proceedings, there is ample time for me to do that and I undertake so to do.

Lord Sandford

That is a most helpful suggestion from my noble friend, because the Notes on Clauses are quite specific, as the noble Lord, Lord Underhill, said. If my noble friend is now prepared to consider what provision should be made to ensure that there is a proper debate in each House of Parliament when this report is laid, that is a considerable advance and I think we should be grateful to him for that.

Lord Bellwin

I thank my noble friend for his kind words, but I would not wish to mislead him or the Committee in any way at all. What I am saying is that I feel obliged to give greater clarification on this matter than I am able to give at the present time and that I gladly undertake to do. But I cannot promise that I shall be moved in any way at all beyond what the Bill says at the present time. Nevertheless, this will be open to be brought back again when I have clarified in more detail the formalities, the procedures, and so on, which I feel I ought to do.

Baroness Fisher of Rednal

I have the Notes on Clauses with me and I was trying to follow what my noble friend Lord Underhill said, in support of what my noble friend Lord Stallard said. They state quite clearly: The names of designated authorities, and the principles on which the designation has been made, are to be set out in a report to be laid before the House of Commons. That is what my noble friend Lord Stallard said. The Notes continue: On laying the report a notice stating that the authority has been designated is to be served on each authority which has been designated. Separate reports and Orders may be made in relation to England and Wales. So at that stage Parliament will not be discussing anything at all. Laying the report is different from what we know in parliamentary language as having a long debate upon it. But on laying the report the Secretary of State is to serve notice on an authority which has been designated. So it is only on laying the report; but, as my noble friend said, what matters is when it comes back. When a penalty has been imposed upon a local authority and it is to be executed, the local Members of Parliament can stand up and try to defend it from the death sentence. That is what it amounts to and that is not what we are accepting.

Lord Bellwin

Whether the noble Baroness is or is not accepting, the fact is that I am trying to clarify something which has been called for and I have undertaken so to do. But that will in no way affect what the Bill set out to do. I say again that most of the authorities—certainly not all—have a jolly good idea, and have long had a jolly good idea, as to whether or not they are likely to fall within the criteria. So it will be no great surprise to them when the time comes.

Lord Broxbourne

Surely the question as to whether a report laid in the other place is debated is a matter within the jurisdiction and decision of that other place. It is not a matter which we should be debating here at all.

Baroness Stedman

I still have some fears about taking away local powers at local level and usurping them by sovereignty. I would have fewer fears if it were parliamentary sovereignty and not the sovereignty of the executive. But I think that the Minister has tried to be helpful tonight and the best thing we can do is try to be co-operative as well. Perhaps we can have some talks between now and the next stage, and at this time I shall withdraw the amendment in the hope that we can get the agreement of everyone before the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8.40 p.m.

Lord Evans of Claughton moved Amendment No. 12: Page 2, leave out lines 24 and 25 and insert ("before and approved by a resolution of each House of Parliament in the preceding financial year and on such report, having been approved as aforesaid the Secretary of State shall serve").

The noble Lord said: I must confess that I am slightly bemused by what precisely people mean by various statements. Your Lordships will be relieved to hear that at this stage I do not intend to do very much more than formally move this amendment, with which are associated Amendments Nos. 13, 28 and 29, which were referred to in the previous debate. I had intended to make a number of points, but having heard what the Minister had to say about this matter, may I say that on this occasion my concern is not to move a wrecking amendment. Despite what the noble Lord, Lord Broxbourne, said at Second Reading, it is a great constitutional issue if one elected authority overturns the will of another elected authority.

Many people believe that if the decisions of elected authorities can be overborne by the decisions of Parliament this should be possible only after very careful examination of those issues by both Houses of Parliament. The proposal clearly is that this should be done only by the House of Commons. Because of the record of your Lordships' House over the past few years, I should have thought that a very important safeguard would be that any such proposals should be approved and carried only after consideration by the House of Lords because of the quasi-constitutional nature of the matter and the fact that your Lordships have the opportunity to give more consideration to matters of this kind than is possible in the hurly-burly of another place. I believe that Parliament must be very careful about scrutinising every stage of what is a totally novel change in the relationship between two elected levels of government.

In that context and having heard what the noble Lord the Minister said in the last debate, in moving this amendment I wonder aloud what proposals the Government have in mind and why they seem to be reluctant to have them considered by both Houses of Parliament. I suspect that the Minister will say that normally decisions about rate support grant and matters of that nature are made by resolution of the House of Commons alone. However, this is a more substantial and a more constitutionally important matter. Therefore I believe that both Houses of Parliament should have a say about a decision of this nature. I beg to move.

Lord Graham of Edmonton

I rise to support the case which has been made by the noble Lord, Lord Evans of Claughton. This debate runs on from our earlier debate. The Minister sought to give reassurances on two themes: first, that adequate time would be provided, in whatever form, in another place for the case to be made; and, secondly, that the case would be capable of being made in this place. To be fair to the Minister, he resisted having words put into his mouth. He did not use precisely those words, but he must know that that is what we are after.

We have made a good case for what we are after. We are conscious of the fact that it is no good screaming after the decision has been made. Once the principles have been evolved, published, argued about and ratified, the Minister is entitled to say that the Government have a mandate and that they intend to go ahead; there is not much point therefore in coming to two Houses when one House will do, particularly when the other place has a majority of 150 over all other parties. When these matters come to be voted on it is clear that they will be voted on along party lines.

The argument relating to this amendment concerns the dignity and sovereignty of the House of Lords as part of our parliamentary procedure. When matters are argued in this place it is fair to say that few fresh arguments are produced. Most of the arguments have been debated in the other place. We rely on the other place for the substance of the arguments and we are the recipients of information and briefs which were sent a few weeks earlier to the other place. But that is not the point. Unless we want to be looked upon as a rubber stamp, we ought to assert ourselves.

I was surprised when the Minister said that he was unaware that people are worried about adequate time being made available in another place for each of the authorities which will be affected to have their case made for them. These are not procrastinating or delaying tactics. If Liverpool or Merseyside are affected, all those who are affected, regardless or party, will say to their Member of Parliament that they want him to make sure that their point of view is heard in the House of Lords—and certainly in another place.

Therefore I hope that the Minister, having moderately successfuly avoided a vote on the earlier string of amendments, will make a much stronger case as to why we ought not to press one of these amendments to a division. The integrity of the Minister is beyond question. The fact that he wins a vote will not prevent him from continuing to worry about the issues. There are later stages at which we can return to this matter. But these issues are important. How much importance is attached to them will be shown if we are prepared to press the amendments to a vote. I shall join others in pressing this matter to a vote unless the Minister can be a little more forthcoming. I appreciate that he is not 100 per cent. sure of the procedure; but if he cannot give us an assurance that the House of Lords will be able to look at these matters and debate them effectively we shall want to press them to a division.

Lord Boyd-Carpenter

Before my noble friend gives what will no doubt be his usual effective reply, I should like to make one observation to your Lordships. I found it very refreshing and cheering to hear from that Dispatch Box the representative of a party which a year ago went to the people on a programme which involved the abolition of this House now urging that this House should extend its powers in this not unimportant matter. It is curious—there need be no cynical reflections—that noble Lords opposite, when it appears to suit their tactics on a particular measure, are quite prepared to throw overboard the whole apparently considered policy of their party and suggest, because it now suits them, that your Lordships' House should take steps to increase its powers. People outside might perhaps suspect a touch of cynicism. I, of course, am too simple a soul to do that.

Baroness Birk

The noble Lord is a very simple soul! He can say that again! While there are two Houses of Parliament, and while there is a House of Lords, then it must play its part in the working of our parliamentary duties and as part of our constitution. That is the situation now; that is what we are dealing with; and that is what we should concentrate on.

Lord Boyd-Carpenter

The noble Baroness cannot get away with that. To advocate at one time the abolition of your Lordships' House and then to come forward shortly afterwards and advocate that it takes steps to increase its powers is utterly inconsistent. The noble Baroness knows that as well as I do.

Baroness Birk

If the noble Lord will accept this as entirely confidential between himself and myself, I would say that I do not think the party is 100 per cent. in favour of the abolition of the House of Lords, any more than his party is 100 per cent. in favour of a great many proposals they had in their manifesto.

Lord Boyd-Carpenter

I shall always respect the noble Baroness's confidences; indeed I shall always be flattered to receive them. But I would hope that a certain amount of publicity might be given to this rather odd way of announcing a major reversal in the policy of Her Majesty's Opposition.

Lord Briggs

Could it be claimed that this particular amendment in fact represents any increase in the power of the House of Lords? I would have thought that it does not. This particular amendment raises constitutional questions about the power of Parliament as a whole. The Bill is really designed in various ways to change what has been the accepted relationship between local government and the powers of Parliament. If that is the basis of the Bill, it is perfectly legitimate that both Houses of Parliament should be concerned in any new procedures which follow after what is a fundamental change in the relationship between local government and national government.

Lord Boyd-Carpenter

I do not think the noble Lord has understood the amendment. The proposal of the amendment is that a power which the Bill proposes should be vested solely in the House of Commons should also be vested in this place. If the noble Lord cannot see that that will have the effect of increasing the powers of this place, then it is very difficult to explain anything to him.

Viscount Massereene and Ferrard

Surely this is not a Money Bill, and surely it would not be for the Speaker in another place to classify it as a Money Bill? Therefore, I cannot understand why my noble friend Lord Boyd-Carpenter thinks that this amendment will increase the powers of the House of Lords. It is surely within the power of the House of Lords, and perfectly correct constitutionally, for the House of Lords to take a decision on this amendment.

Lord Bellwin

First, on the point concerning the constitution, it was the noble Lord, Lord Evans, in introducing this amendment, who referred to that aspect. Before I make any further comment, I hope noble Lords opposite agree that in addition to Amendment No. 12 we are speaking to Amendments Nos. 13, 28 and 29—I was assured they were part of the grouping. As to the constitutional point, the noble Lord spoke of one elected authority overturning the decisions of another elected authority. Are we to have the whole of the Second Reading debate again? That is probably what we should need for me to answer that point, because I simply do not consider it to be a constitutional point at all.

The noble Lord, Lord Briggs, referred to the change in the central and local relationship. I say again now, as I said at Second Reading, that the change in that relationship would come about if the general scheme in Part II of the Bill was to be brought into effect. The Bill specifies that, then, there would be proper debate in both Houses. I think that probably covers the noble Lord's point. Whether or not there is a change in the relationship caused by Part I is a matter of one's point of view, and I believe that the noble Lord would know my stance on that. Certainly I do not consider that Part I of the Bill is in any way constitutional—nor Part II, though I do accept that there would be a change in relationship if the general scheme was ever to come about. But that is another matter.

We are discussing four amendments which seek to extend the degree of parliamentary involvement in the process of designating authorities for rate limitation. The amendments seek to bring the designations before both Houses of Parliament and to make the report subject to approval there. The third element in the amendments is to require that the designation report should be approved before the commencement of the financial year preceding the one in which the designa-tion is to take effect. I have to say that I cannot advise your Lordships to support any of the elements of the amendments.

Why do I say that? First, I do not believe that it would be right to bring a report of this sort before both Houses. The supervision of local taxation powers is a matter which the other place has long claimed within its own privileges. We accept that the orders which would be necessary under Clause 9 to introduce the general rate limitation scheme should, as I just said to the noble Lord, Lord Briggs, appropriately be brought before both Houses since they affect the relationship between central and local government, if ever that was to be put into effect. But I believe that the detailed supervision of the Secretary of State's determinations under this Bill is appropriate for the other place alone.

Secondly, there is the question of whether a report to the other place should be subject to approval. In debating this issue in the other place on Report, my right honourable friend undertook to consider whether there might not be some way of providing an opportunity for the principles underlying the designa-tions to be debated. We have now reconsidered all the issues but have concluded that it would not be right to propose an amendment to the Bill. The Bill already provides for the affirmative approval of the other place to the ultimate determinations of the Secretary of State in relation to the rate or precept maxima set under Clause 4. We believe that is right, but it does not seem to us essential to provide for similar details at the intervening stages of the process which will take place under Clause 2 and Clause 3, which deal with designa-tion and the setting of expenditure levels respectively.

This does not mean, of course—and here we are touching on the point debated in the last amendment —that we believe the Secretary of State should be immune from parliamentary scrutiny of his actions under the legislation. But parliamentary supervision is not exercised solely through the requirement to have all Executive decisions endorsed by way of subordi-nate legislation. Indeed, the normal means of supervision of the Executive is not through that route but through the other well tried and traditional procedures of Parliament. I am referring to the parliamentary Question, to the adjournment debate, to the facility which the Opposition have to bring matters before the other place, and, more recently, to the detailed scrutiny possible through the mechanism of the Select Committees. These are not negligible devices.

The presentation of the report will ensure that the Secretary of State must place in the public domain the principles upon which he has acted. There are ways to ensure that, if it is the will of the other place, these matters can be debated. If there were a danger that this could not otherwise be arranged when there was a general desire that it should be, no doubt the Government, through the usual channels, would consider sympathetically a request for assistance.

So I do not think it is right to write into the Bill a specific procedure. I would certainly not be able to support the proposition for a further affirmative order procedure, which would require a debate every year whether or not there was a desire for one in the other place. I have to tell the Committee that there would be real practical difficulties in providing for any parliamentary approvals procedure in the course of this year when, depending upon the timing of Royal Assent, it may be that there will be insufficient time to provide for a procedure in the summer before Parliament goes into recess.

Finally, I turn to the question of the timing of the designation report. Our intention is that the designation report should be made annually, as soon as possible after local authority budgets are received at the start of the financial year. It would not be possible to make a designation report before the start of the financial year during which the rate limitation procedures are to operate because we will not have the necessary information to do so.

The effect of the proposed amendment, therefore, would be to delay by one year the first rate limits, since a report made during the 1984–85 financial year would allow the Secretary of State to treat selected authorities as designated during the 1985–86 financial year leading to limits on the rates in respect of 1986–87. The problem of high spending in the areas about which we are most concerned is too acute to allow such a delay. The ratepayers in those areas are already clamouring for our protection. They would not, I think, be impressed by the arguments we have heard today in support of such a delay. For this and perhaps the equally important reasons I have given—the decision on what to do about the amendment will be up to noble Lords who are supporting it—I cannot accept the amendment.

9.2 p.m.

Lord Evans of Claughton

I am very disappointed with what the Minister said. He appears to have gone back on what he said on the previous debate. As far as I can ascertain the position, it is true that the amendment does have the effect of delaying matters a year. Designation will be in year one and implementation in year three instead of designation in the year one and implementation in the year two. I should have thought, as one who has had long experience in local government and with the buffeting it has received from various governments over the years, that if the expenditure of local authorities is to be controlled and reduced in some areas in the draconian way proposed it should be done efficiently, with the minimum of damage to services and after very full and detailed consideration by local authorities and by Parliament and of the way in which the priorities of the local authority which is being "capped", as it were, will have to be re-ordered.

It is a very dangerous situation as things stand at present in that teachers employed from September to August will, if the legislation goes through in this way, have to be—I do not mince words—sacked in the middle of a financial year. Surely if they have to be sacked—and no one wants anyone to be sacked—it should be at the end of an academic year. Surely the whole of local government needs to have time to redeploy its activities in an ordered way. I should have thought that the point the Minister made in defence of the present scheme is totally contrary to the whole benefit of local government, the whole way of running local government and the whole interests of people affected by local government services in many ways. If local authorities know that they have a year to adjust to cuts and limitations they might be more willing to accept the very painful medicine that the Government are at present imposing on them.

I am very comforted by the support I received from the noble Lord, Lord Graham of Edmonton, I was even more comforted to note that he did not mention the borough of Enfield at all on this occasion. I was going to say that if he ever mentions it again I would never vote again for anything he proposed, thereby extending the gulf between the respective Benches. I am very comforted by his support. I feel very strongly that the position outlined by the Minister in his reply is unsatisfactory. I am also comforted very much by the support of the noble Lord, Lord Briggs. I read his social history on going to bed every evening and I get a very good night's sleep. I am very comforted by having the great authority of his support and his realisation, as I think many Members on the Cross Benches and academics realise that this is a fundamental change in the relationship between one level of elected authority and another. However stupid, short-sighted, extravagant and irresponsible local electors may be to elect an extreme Left-wing or high spending authority, that is a decision the electors have made. However much we say, "Well, it is because of the macro-economic needs or the general objection by commercial, industrial and domestic ratepayers", the fact is that this vote has taken place in what we regard on these Benches as an imperfect democratic system—although noble Lords on other Benches seem to think it is the greatest thing ever invented.

Therefore, the Government are saying that one group of people, democratically elected, are to be overborne by Parliament. I do not dispute that Parliament is entitled to do that, but if Parliament is to do that then it should be done under the most close and deep safeguards. It is on this that your Lordships have a particular constitutional right. I am glad that the noble Lord, Lord Boyd-Carpenter, did not have the temerity to attack these Benches. We did emasculate the House of Lords many years ago, when the noble Lord was no doubt a young man, but we still believe that the House of Lords in its present form, or a reformed version has a very important constitutional role and many other amending functions.

We are now considering an amendment of deep importance to anyone who cares about governement, particularly local government. Therefore, I intend to test the view of the noble Lord the Chief Whip that this House often does have an overall Tory majority. Therefore, I intend to divide the House.

Lord Bellwin

Before the noble Lord sits down I should like to make one observation. The noble Lord, Lord Evans, persists in bringing in Second Reading points about the underlying theology of the whole Bill. If he persists in doing so I cannot let go by some of his observations about the overriding of local autonomy, the validity of the local mandate and the breakdown of the constitutional points. He must not be allowed to get away with that.

Lord Evans of Claughton

It is true.

Lord Bellwin

It is not true. I did not interrupt the noble Lord and I hope he will not interrupt me from a sedentary position. I shall give way if the noble Lord wishes to interrupt from a standing position.

The point is there has been a breakdown of the conventions by a small minority of authorities, conventions which for years and years have lasted and which were respected, regardless of political parties, regardless of the party in power at Westminster. The noble Lord, Lord Evans, knows that as well as anybody in this Committee.

It is only the breakdown of those conventions that has led to the present situation and I know many, many people in local government who are as resentful of that minority of authorities on all sides because of the steps they have taken which have led to all this taking place. A government cannot disregard what is happening, it cannot refuse to protect the people who are so adversely affected, it cannot allow its economic strategy to be put at risk by these people.

When we now come to decide the procedures and the supervising and the scrutiny of the various procedures, which is what this debate is about, then we have indeed to be very careful how we do it. That is why I went to some pains to spell out in greater detail than perhaps I did on the earlier amendments exactly what the situation is as we see it today. If the noble Lord feels that that is not a satisfactory conclusion then it is up to him to decide what to do. But I really must say that if in all the debates we are having on these various amendments we keep returning to this point, then we shall have more Second Reading points to make. Maybe that is not a bad thing.

Lord Sandford

I wonder if I might intervene briefly before the noble Lord, Lord Evans, does what I think he is going to do and presses this to a Division. We are debating four amendments, Nos. 12, 13, 28 and 29, and I think it might be for the convenience of the Committee if we did not have to go over the ground again when we get to Amendments 28 and 29. My noble friend a moment ago was speaking, I thought, in a helpful and constructive way in response to the debate we were having on Amendment No. 11.

Baroness Birk

I am sorry to interrupt, but I would like some guidance. I thought that we had got to the point where the noble Lord, Lord Evans of Claughton, had said that he was going to divide the House on this amendment. How much longer the debate now taking place will go on after that I do not know, but I would have thought, with great respect, that it is out of order now. He has indicated his wish and the question should have been put there.

Lord Denham

I think it is quite in order to make points before the noble Lord, Lord Evans, sits down. This is of course the Committee stage and there is very much more freedom on the Committee stage than on others. Perhaps my noble friend could be very short. I do not think I am being partisan in supporting him because I rather suspect he may be speaking against the Government on this particular issue.

Lord Sandford

I shall try to be helpful to the Committee and save time, which I am sure the Chief Whip will approve of. We are debating four amendments in one block, as the Minister reminded me. We have not, strictly, spoken; I have not spoken at all on one of the amendments which is in my name. The only point I wanted to make is that I am sure that, when he reads Hansard tomorrow, my noble friend will see that what he has been reading from his prepared brief in answer to the points raised by Amendments 12, 13, 28 and 29 is not consistent with what he was telling us just before that when we were dealing with Amendment 11.

Each group of amendments deals with the way in which this report is to be handled in each House of Parliament. On the former occasion he was assuring us that he supposed that as each report was laid before each House of Parliament there would be an opportunity for debate. He had given us an assurance that he would consider what more could be done to make sure that those debates were satisfactorily provided for. On those grounds, I was urging the Committee to accept that as something which he had expressed to us in good faith, and which he would of course do. That is not consistent with what he has just been saying.

Lord Bellwin

On the point of inconsistency, what I said on the previous amendment was that I would undertake, as I still intend to do, to give clarification. That was the term I used and I use it again: I shall give clarification as to the procedures as I understand them. It would then be open to your Lordships to decide what you would wish to do about it at a later stage if that was not satisfactory. What I have done in the last debate is perhaps to spell out in more detail some of that but I see no reason why I should not elaborate on it still in communicating with your Lordships later on. That I undertake still to do.

Lord Evans of Claughton

This must be the longest period for which I have been standing when I have been sitting in my career. The noble Lord should not mention theology to a Welshman; we enjoy it very much. I say with great sincerity that I do not challenge what he says about high spending authorities. For many years I was a member of a very low spending Labour authority and the convention worked. I am not disputing that. I am saying that if we are taking this draconian step because of this attitude, then we must do it with very great care and parliamentary supervision at every level. That is the reason that I seek to divide the Committee.

9.13 p.m.

On Question, Whether the said amendment (No. 12) shall be agreed to?

Their Lordships divided: Contents, 64; Not-Contents, 73.

Airedale, L. Carmichael of Kelvingrove, L.
Attlee, E. Chandos, V.
Banks, L. Cledwyn of Penrhos, L.
Beaumont of Whitley, L. Collison, L.
Birk, B. David, B.
Bottomley, L. Dean of Beswick, L.
Briggs, L. Denington, B.
Brooks of Tremorfa, L. Elwyn-Jones, L.
Ennals, L. Nicol, B.
Evans of Claughton, L. Ogmore, L.
Ewart-Biggs, B. Phillips, B.
Faithfull, B. Pitt of Hampstead, L.
Fisher of Rednal, B. Ponsonby of Shulbrede, L.
Gladwyn, L. Ridley, V.
Graham of Edmonton, L. Rochester, L.
[Teller.] Ross of Marnock, L.
Grey, E. Sandford, L.
Hampton, L. Seear B.
Hanworth, V. Serota, B.
Harris of Greenwich, L. Simon, V.
Hatch of Lusby, L. Stallard, L.
Houghton of Sowerby, L. Stedman, B.
Hunt, L. Stoddart of Swindon, L.
Irving of Dartford, L. Stone, L.
John-Mackie, L. Taylor of Blackburn, L.
Llewelyn-Davies of Hastoe, B. Tordoff, L. [Teller.]
Lovell-Davis, L. Underhill, L.
McCluskey, L. Walston, L.
McIntosh of Haringey, L. Wedderbum of Charlton, L.
Massereene and Ferrard, V. Whaddon, L.
Mayhew, L. White, B.
Meston, L. Winchilsea and
Molloy, L. Nottingham, E.
Avon, E. Kinloss, Ly.
Bauer, L. Lindsey and Abingdon, E.
Bellwin, L. Long, V.
Beloff, L. Loudoun, C.
Belstead, L. McAlpine of
Boardman, L. West Green, L.
Boyd-Carpenter, L. Mackay of Clashfern, L.
Brabazon of Tara, L. Macleod of Borve, B.
Brougham and Vaux, L. Margadale, L.
Broxbourne, L. Marley, L.
Bruce-Gardyne, L. Marshall of Leeds, L.
Caithness, E. Middleton, L.
Campbell of Croy, L. Monk Bretton, L.
Cathcart, E. Morris, L.
Cockfield, L. Mottistone, L.
Coleraine, L. Murton of Lindisfarne, L.
Cork and Orrery, E. Napier and Ettrick, L.
Crathorne, L. Onslow, E.
Davidson, V. Orr-Ewing, L.
De La Warr, E. Polwarth, L.
Denham, L. [Teller.] Redesdale, L.
Digby, L. Renton, L.
Drumalbyn, L. Saltoun, Ly.
Elliot of Harwood, B. Seebohm, L.
Elton, L. Skelmersdale, L.
Enniskillen, E. Stodart of Leaston, L.
Ferrier, L. Swinton, E. [Teller.]
Gardner of Parkes, B. Tranmire, L.
Glenarthur, L. Trefgarne, L.
Gowrie, E. Trenchard, V.
Grantchester, L. Trumpington, B.
Gray of Contin, L. Vaux of Harrowden, L.
Gridley, L. Ward of Witley, V.
Hood, V. Westbury, L.
Hornsby-Smith, B. Whitelaw, V.
Hylton-Foster, B. Wise, L.
Kemsley, V. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 13, 14 and 15, not moved.]

9.20 p.m.

Lord Evans of Claughton moved Amendment No. 16: Page 2, line 28, at end insert ("and such notice shall provide each of the Authorities with details of the basis upon which they have been designated.").

The noble Lord said: We put this amendment down because we take the view, as I think we have done consistently throughout the course of the discussions about rate capping, that authorities who are confronted with the decision that the rates they can levy are going to be reduced, and therefore the services they can offer are going to be affected, should have, so far as possible, objective criteria. As things stand at present, it is purely subjectively a decision of the Secretary of State. This is a simple amendment requiring that when authorities receive the notice for their designation, they should be given clear and precise details about why they have been so designated.

I do not say the noble Lord the Minister has been evasive—I would not say that for one second; I would say a lot of other things about him. But he has been reluctant to indicate during the course of the debate with the noble Baroness, Lady Gaitskell, the basis of designating authorities. I think that, however irresponsibly an authority has behaved and however obviously it has gone over the top financially, because of the novel position with which they are confronted they should be served with details, presumably in writing, of the basis upon which the designation has been made, and not just the subjective decision of the Minister. I beg to move.

Lord Graham of Edmonton

I rise to support this amendment. I think the Minister has taken fairly seriously the importance of the principles that are going to be the base upon which the designation rests, but at the end of the day what people want are the details. What we are arguing here is that any authority which finds that it is rate-capped wants not merely to be told in the abstract, which is what principles are, but in practice. We then come down to the very vexed question that clearly what they will be accused of is overspending.

I heard a noble Lord earlier say that they were spending in excess of what was appropriate in the present circumstances. That begs the question because what one noble Lord or what one councillor or what one Minister thinks is appropriate will be different from what another one thinks. Your Lordships can rest assured that the people at the sharp end, who are faced with the problems of the shortages, the pressures, the tensions and the anxieties will take a different view from that which we might take in this place experienced as we are, as to what is going to be determined.

The amendment asks not merely that the authority should be told that it is rate capped, that it is designated and that the principles that have brought it to this position are A, B and C, but also that it should be given the details. When the details are revealed, the Committee can rest assured that arguments will prevail. They are all subjective judgments. The councillors, who will broadly understand the Government's policies, will be able to say that even though they know that by spending money they will risk rate capping, they nevertheless believe that they will have to do it. They will want the opportunity to argue. They may be defiant. They may be objectionable. They may not be very nice people to know at that time. Nevertheless, they will want to be given as much detail as possible.

Although the principles are clear, there is need for detail. The Minister referred to the application of GREA when he pointed out earlier that the totals for some individuals in some parts of London exceeded those of others. I believe that the noble Lord mentioned Camden, where £100 per person was allowed as the GREA total. That might look fine except to the Camden people, who could argue that what was appropriate was £120 more than somewhere else. I am not saying that they are right, but they will want to be involved in an argument. For that argument to be meaningful and not frustrated, they need to have the detail.

I hope, therefore, that the Minister will say that he is prepared to tell his colleagues that it would be helpful—and it would certainly cut the ground from under our feet if he was prepared to say it—that not only the principles but also the details that help to make up the reason for the application of the principles will be provided.

Lord Bellwin

This is really a debate that has already taken place today. I hope that the amendment can be met by a firm undertaking to the Committee from the Government. We will certainly want authorities to know on what basis they have been designated. I assure the Committee that when we notify authorities that they have been designated we will include a copy of the report made by the Secretary of State and laid before the House of Commons. Subsection (6) requires that the report contains a statement of the principles on which designations are made.

The noble Lord, Lord Graham, said that these are subjective judgments. But the principles are not subjective at all. There can be nothing arbitrary in these decisions. The noble Lord said that authorities will want the opportunity to argue. Absolutely so; that is exactly what they will have. There will be every opportunity if they so desire. I say again that no authority at the moment is under any illusion about what is happening. I have mentioned one authority. I could mention many more. If we wanted to start right now debating this whole matter of the need to spend, which is a key point, although I suspect that we shall come to it soon, we can do it now. However, I happen to believe that we should keep our overall debate in some sort of procedural order. I do not believe that noble Lords will object to that approach. I prefer, therefore, to hold back.

Of course, an authority must and will have the opportunity to come along and to debate, to argue and to apply for derogations and to apply for a redetermination. If it makes its case, it will get it. We have stated all the time that we are not in the business of being unreasonable and of expecting authorities to move from a position such as I mentioned in Camden, with 86 per cent., down to nothing in one year. It could not be done in one year. If we want to talk about opportunities that are available, we have to talk about many more matters than have been discussed hitherto. Authorities will know that if they come along they have to be prepared to discuss all aspects of what they are doing as well as all aspects on which they are spending.

I cannot say much more. I do not believe that we need build into the legislation what is requested in the amendment. It would be unnecessary padding. The important point is that the Secretary of State should be required to state the basis for designation. This is met by the provisions in subsection (6). The amendment seeks something on which I am happy to give a firm undertaking on the practice that we shall adopt. With that, I hope that the amendment might be withdrawn.

Lord Evans of Claughton

After what the Minister has said, I am very willing to withdraw the amendment, with your Lordships' consent.

Amendment, by leave, withdrawn.

9.30 p.m.

The Chairman of Committees (Lord Aberdare)

I have to point out that if Amendment No. 17 is agreed to I cannot call Amendments Nos. 19 nor 20.

Baroness Fisher of Rednal moved Amendment No. 17:

Page 2, line 31, leave out from ("unless") to ("its") in line 32.

The noble Baroness said: In moving this amendment we are trying to make quite sure that the Secretary of State takes an objective, and not a subjective, decision. The words we propose to delete from the clause are: unless it appears to him from the best information available".

We are concerned about how he will use that informa-tion, whether he will take due regard of it, or, if he is not given sufficient information, whether he will seek it to make quite sure that his decision is objective. If the local authority is not asked for the information, will he prompt it so that his decision becomes objective? We feel that as printed the clause is very loosely drafted and the weight that can be given to it is necessarily a matter of judgment.

This is all about the selection of the authorities. The selection is to be controlled by reference to a figure which reflects a judgment of the Secretary of State. We feel that is not clear. The uncertainty arises whether or not we accept that the Secretary of State is going to be objective. We have heard from the noble Lord that the people who will be included in this group already know they will be designated. Without any criteria, without any discussion, the Minister has said they know quite well now that they are included in that grouping. Therefore the Secretary of State has already made a subjective ruling without going into the criteria at all. The Minister stated quite clearly this afternoon that those who will be designated already know about it. The Minister laughs, but I shall check up in Hansard; I feel sure he said that.

We feel that nothing would be lost by leaving this amendment. It is important for the Government to understand that local authorities might feel they are not getting a fair deal from the Government and might decide to take action in the courts. Obviously if a judicial challenge is made, the court will have to interpret the words: it appears to him from the best information available". The court will therefore be deciding in a judicial capacity whether or not the Secretary of State acted on the best possible information.

The Minister has told us about the formula that goes to draw up the GREA. We are also aware that it is built upon 65 different items and a variety of statistical techniques. The noble Lord said how simple it all was. But with all due respect to him, to be quite truthful, I find it mind-bending in its complexity. It is described as an objective measure of spending need. The weight given to the statistics involves, as I have said, subjective judgments by the Secretary of State. We on these Benches fear that that is a dangerous power to be given to the Secretary of State because there is no guarantee that it will not be used in an arbitrary way.

The problem of local government finance is not about 20 authorities which each have a view of their area's need that is different from that taken by Whitehall; it is much more important than that. The whole issue of local government should be taken much more seriously than trying to penalise just 20 local authorities. I beg to move.

Lord Bellwin

I do not need any reminding about the seriousness of the financial matters pertaining to local authorities. I certainly did not say how simple is the block grant procedure or the GRE basis of assessment. I said that the multiple regression analysis formula, which preceded this, was so obscure as to be virtually totally incomprehensible to most people in the business; whereas GREs are at least something which can be laid out and their basis can be questioned in a way which was never possible previously. All the practitioners in local government who come to see me—and there are very many—all concede that that is so. However, that is not the point that we are discussing.

These amendments probe the provision in Clause 2(2) that the Secretary of State should not make designations unless, it appears to him from the best information available that certain conditions are satisfied.

It may be helpful to your Lordships if I explain why the clause is drafted as it is. We expect to make selections primarily on the latest information about a local authority's level of expenditure. There is a practical problem. The final statements about the actual spending of all authorities do not become available for at least a year after the end of the financial year. The noble Baroness, Lady Fisher, knows that that is so. The actual outturn compared with the probable, is always something that one waits to find out each year.

We now have a complete set of returns in respect of 1981–82 and an incomplete set of the returns for 1982–83. In a fast changing world, that is quite elderly information to be using to make selections for rate limitation in 1984–85. It could be quite misleading as to the current position of individual authorities. We prefer to make use of the latest information about authorities' intentions. That is usually the information in their budget items to the department.

But the budget is only a statement of intention. We cannot know from the budget whether any authority will actually exceed its GRE for the year or £10 million. We certainly could not prove that outturn expenditure would be at any particular level. The Secretary of State thus has to decide whether it "appears to him" that the expenditure is "likely" to attain a particular level. That is the significance of those terms. Taken out of context they can have other implications and meanings. But taken in context that is why those words are used here.

The next point is that the Secretary of State must have regard to the best information available. As I explained, that will normally be its budget return to the department, but it need not necessarily be so. I should not want an authority to be able to frustrate the purpose of the Bill by simply refusing to submit a budget or by sending a clearly false return. In the absence of information or in the event of serious doubt about the validity of information, the Secretary of State should need to be able to have regard to other sources of information such as the public committee papers of the council. This expression is of course well precedented. Section 66 of the Local Government, Planning and Land Act 1980 bases the calculation of block grant on "the best information available" to the Secretary of State.

So there is nothing sinister in this at all. We are making a practical and sensible point. The noble Baroness herself with her long experience in a major authority—and I make that point purposely—knows that this is the way in practice in which it works. When I was in my other incarnation we often wondered what the actual outcome at the end of the day would be. We were always anxious to know, and it was many months until we did; but until we did we were working on best estimates. That is why we are taking the line that we are taking in this Bill.

Baroness Fisher of Rednal

I thank the noble Lord for that reply and I accept what he says about the Government and their best estimates. But their best estimates were wildly out when they brought forward the housing benefits scheme. They were wildly out—many millions of pounds out. It is that which causes us great concern.

When local authorities were asked to take on the burden of the housing benefits scheme, Parliament was told that it would cost only £20 million in administration. Local authorities have already asked for more than that amount from the Treasury. When estimates go wildly wrong it reflects upon the local authority. Housing benefits' estimates have been many millions of pounds out. I shall not go into all the figures that I have regarding the estimates on housing benefits, but all local authorities have had the greatest difficulty with housing benefits. The administration costs, which the Government said would be practically negligible, have placed quite a burden upon the local authorities which are putting those benefits into operation—that is, the very large local authorities where 50 per cent. of the people who are living in council properties are receiving housing benefits. It is on those grounds that we are concerned. I accept what the Minister has said. I have listened to what he has said and at this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Fisher of Rednal had given notice of her intention to move Amendment No. 18: Page 2, line 31, after ("unless") insert ("its rate levy or precept exceeds by more than 10 per cent. the rate levy or precept for the preceding financial year and").

The noble Baroness said: This amendment is to remove the criterion: excessive having regard to general economic conditions".

We believe that the word "excessive" needs to be defined, and furthermore that the present concept of: excessive having regard to general economic conditions". is a controversial theory.

Lord Broxbourne

The noble Baroness is speaking to the wrong amendment.

Baroness Fisher of Rednal

I am in a quandary because noble Lords have said that I am speaking to the wrong amendment. Does the noble Lord the Minister think that I am speaking to the wrong amendment?

Lord Bellwin

If it would help the noble Baroness, in an attempt to be helpful only I would gladly reply to the debate which she would have initiated.

Noble Lords

"Not moved"!

Baroness Fisher of Rednal

I shall not move the amendment.

[Amendment No. 18 not moved.]

[Amendment No. 19 not moved.]

Lord Evans of Claughton moved Amendment No. 20: Page 2, line 31, leave out ("the best information available to him") and insert ("a comprehensive assessment of the expenditure history of the authority made in the light of the need to provide services by reference to economic and social conditions in the area")

The noble Lord said: This may conceivably be the amendment about which we nearly had a discussion a couple of seconds ago! This amendment covers the same areas as the other amendments which we have been discussing. In order to be consistent with what I have said to your Lordships' Committee, I believe that the nature of the problems and the expenditure that is needed to deal with the deprived in the inner city areas are very different criteria from those that perhaps affect more rural districts and areas which are better provided for financially and generally in terms of services.

We know that the welfare services, education, and a vast number of other matters are less well provided for in some parts of our inner city areas. I am sure that the Minister will argue that the use of the words "the best information available to him" will cover this, but we feel that there should be a more precise basis for guidance. That is why we suggest that it should be based on: a comprehensive assessment of the expenditure history of the authority made in the light of the need to provide services by reference to economic and social conditions in the area".

If one can show a pattern where a local authority, of whatever political complexion, has had to confront over many years a serious level of social deprivation, then the Minister must be compelled to show that he has considered those special needs and special problems in coming to his decision. The words "the best information available to him" are too broadly based, and do not tie down sufficiently the Secretary of State in those areas of the kind that I have been trying briefly to describe. The purpose of the amendment is that if an area is to be rate capped the authority should be satisfied that all the problems of that authority have been taken into consideration in reaching the decision about designating it as an area to be capped. I beg to move.

9.47 p.m.

Lord Bellwin

I find this amendment rather partial in what it wants the Secretary of State to have to regard. There is no suggestion that he might also look at spending on different services relative to those of comparable authorities. Why, for example, on the 1983–84 figures does Sheffield spend £10.30 per head on refuse collection when Doncaster can do it for £8.50 and Birmingham for £7 per head? These are important questions and they arise through this amendment.

If the noble Lord is saying that one has to measure and assess need—I remember that I said earlier that I should want to come to this point—it raises a whole host of questions. In assessing need the first thing one has to do is to look and see what it actually cost the authority compared to what it cost other authorities of like kind. For example, I said earlier that Camden spends £396 per head on its services, while Wandsworth spends £202 per head.

One could spend a long time listing such comparisons, and to have proper explanations we should have to delve into the budgets and question detailed spending in depth. We should have to question how reasonable it is to include, for example, need. I give some instances now. How much need is there for some of these authorities, as they do, to employ political advisers, and to each committee chairman research assistants, and some of the other people they bring in? These are the high spending authorities with the highest deprivation as proved by their GREs, and yet they spend money in ways like this.

In the Second Reading debate I referred to Hackney. Why do they have to take on nearly a thousand more people in the last 21 months? What do they all do? I mentioned the 40 extra people in the personnel department. If we are saying that the Secretary of State should have to have regard to all that they need and their deprivation, I do not quarrel with that at all. All I say is that an authority so coming forward and making its representation must expect to answer that kind of question. I know that the noble Lord, Lord Evans, would not seek to justify some of the things that I have just mentioned, and many more that I could if the hour was not as late as it is.

The thrust of the amendments is that in deciding whether an authority's expenditure is excessive we should take account of their spending needs. I am saying that there is absolutely no question of that. At a time when an application for derogation or redetermination is called for, that is in order and that is what will be done. As I say, I have a great deal of material on this subject because I happen to feel that this is one of the great keys to this whole philosophical argument. Unless pressed, I will not go into it now in view of the hour. But, if pressed, I would want to spend a lot of time on listing a lot of things and I wonder how many people in this Committee and in your Lordships' House would be very happy to defend spending against the kind of deprivation that they can show in some of the authorities concerned.

Lord Underhill

I wish to support the amendment put forward by the noble Lord, Lord Evans, despite what the Minister has said. The Minister said in dealing with the previous amendment that there will be every opportunity for the local authority concerned to argue. But all that we are going to have is the best information available to the Minister. Nothing of what the Minister has said in his recent remarks is laid down. It is what he believes the Minister will give on the best information available to him; whereas the amendment which Lord Evans proposed definitely puts forward some actual points which the Minister must take into consideration.

When one looks at these, one sees that it is not what the local authority is going to tell him; it is what the Secretary of State will have as a comprehensive assessment of the expenditure history. The Secretary of State will compile that information. Surely, it must be considered in the light of the needs of that area. As we have debated on other matters, that is what people vote for at the local election—what are the needs of our area? What do we want done? Are we doing it in the best possible way? That is the sort of information on which the criteria should be assessed. The whole point of this information is whether or not the authority satisfies the criteria. It is not taking away from the Secretary of State the power he wants; it is laying down quite clearly the points which he must take into consideration and should be included in his information.

Lord Broxbourne

With respect, I must say that the position as put by noble Lords opposite and by the noble Lord, Lord Evans of Claughton, is wrong. He has fallen into the trap which all drafters of statutes and statutory instruments seek to avoid; that is to say, to specify too precisely. There is, as he will know, a legal maxim of construction: expressio unius est exclusio alterius. I see his nod of assent which confirms me in my view of his omniscience on this and other subjects. By expressing a particular criterion, as he does in this amendment, he thereby excludes all those important economic and financial con-siderations to which my noble friend the Minister has rightly averted. The clause as drafted is perfectly clear. It is general but it is none the worse for that. It enables all relevant matters to be taken into consideration. I hope that that being so, the noble Lord will accept the position and not press this amendment.

Lord Graham of Edmonton

I think we are arguing about whether the Minister should be satisfied or whether the Minister should be satisfied. The wording in the Bill is: The Secretary of State shall not in a report laid under subsection (1) in any financial year designate an authority unless it appears to him from the best information available to him …". In other words, the Minister has to satisfy himself that the action he wants to take is in accordance with the best information available to him—which may not be the best information. He then decides to designate. The amendment says, "Prove it!" That is what the amendment says. I do not think I am talking to the wrong amendment: this amendment is the one that we are talking to. Whatever the Latin tag was I say, "Touché".

The Minister read out, quite fairly, great disparities between authorities. Although he said the hour was late, as far as we are concerned the night is young. If the Minister feels that he could help the debate by giving us information that we may not be privy to (that is always possible) as to some of the extravagances and excesses which he and his colleagues feel merit this kind of treatment, by all means let him read that into the record. It may be that the most powerful case he can make is to point out to one authority that the reason it is being designated is the position of a comparable authority. One is on dangerous ground in comparing what appears to be like with like based upon geography, social mix, industrial mix or whatever it might be, but that could help to prove to the authority that is being rate capped that it is being fairly treated.

We are saying that the Minister ought to have to prove it. The Minister is well seized of the crucial importance of these actions to the various councils. The Minister has already decided in a number of areas whether the ratepayers, who apparently are under stress, will have the opportunity of passing their opinion. They are determined during the current Session to stop this other opportunity of voting. All right, the point was made by the noble Lord, Lord Evans of Claughton, in an earlier debate. Whether one believes in the political complexion of the council or not that is the will of the people. We might have an argument now whether the people were right or wrong on 9th June last year, but they took a decision. Whether we like it or not, that is the mandate.

We are asking the Government to take a little more time and care. They are determined to tackle what they consider to be a major problem. We are saying that, even if it means more work and even if at the end of the day the authority says, "You have not proved it to our satisfaction", on the face of the Bill the words should be written that the Minister has to go through the process of proving it. If the Minister has the ammunition that he tells us that he has, he should make the case at least to his satisfaction if not to that of the authorities.

Baroness Gardner of Parkes

I am puzzled by the comments of the noble Lord, Lord Graham of Edmonton. For example, he said that the Minister might not have the best information available to him on which to make a decision. Surely it is up to the authority to see that the Minister does have the best information available. I find it incredible that there should be the suggestion that information would be kept from him if it was in the authority's interests to prove its case. I cannot go along with the amendment at all.

We must be very careful not to be led into the trap about the economic and social conditions because in the inner cities, which I know well and have worked in all these years, the social deprivations have fed upon themselves. As time has gone by, there has been a great polarisation between the deprived and the very rich. All the middle class people have moved out because they cannot afford to pay the rates. In the city of Westminster we have a very small number of middle class people remaining, people who have owned their homes for a long time and perhaps can afford to remain there. But there is a great proliferation of people at the lower end of the scale, the socially deprived, whose lot is not improved because the rates keep going up and up and the general fund cannot give the help needed.

We are finding a great influx of foreigners, extremely wealthy people, who are able to pay the rates no matter how high they are, and it is not in the interests of the community to perpetuate the present rating system. It is affecting the middle class people by forcing them out because they are the ones having to pay the rates. On those two points I could not support the amendment.

10 p.m.

Lord Evans of Claughton

I was aware that I was unduly restricting the basis of assessment, as the noble Lord, Lord Broxbourne, rightly pointed out. So far as the Latin quotation is concerned, I shall paraphrase something by Sergeant Sullivan, "We talk of nothing else important". But the fact of the matter is that the only way I could see of trying to extract from the Government an assurance that a comprehensive assessment of the expenditure, the history, the economic problems and the social needs was taken into account, was to move an amendment of this nature. If I get an assurance of that kind from the Minister, I shall be reasonably, though not completely, happy with the outcome.

I agree with the noble Lord the Minister, as he suspected, that I have no time at all for authorities, of whatever nature, which do not find the cheapest and the most efficient service. It is quite extraordinary, as the Minister said, how some authorities, which are continually complaining about the Government's interference, are so reluctant to use the services provided by local government itself to find cheaper and better means. We had a few examples of this in the Second Reading debate.

Of course, it does not always work. I criticised the noble Lord, Lord Graham, for mentioning his local authority at Enfield. I shall mention mine, Wirral Borough Council, which never gives me any briefing at all on anything, and which, no doubt in accordance with the best principles of private enterprise, has given out the refuse collection and the street cleaning to private firms. The result is that we have not had our bins cleared for four weeks and the streets have not been swept for the same length of time.

A noble Lord


Lord Evans of Claughton

It is rubbish. But we believe that in order to get such contracts some of the private enterprise firms tender at such a low price that they cannot really meet their obligations. There is such a keen level of tendering, and there is that danger which local authorities have to watch.

To deal very briefly with another point which the Minister made—and I tried to move my amendment briefly, because of the lateness of the hour—I must say that I find reprehensible the use of ratepayers' money to appoint political advisers to council leaders, but it will happen in all political parties. Many of us thought in the past few years that it was politically reprehensible that Her Majesty's Ministers from time to time appointed political advisers from outside the Civil Service, but over the last 10 years that practice seems to have become accepted. The point is that if council chairmen are to have political advisers, it should be done openly and the ratepayers should be made aware that they are being appointed purely and simply to give political advice.

But what disturbs me continuously, as has been said a number of times, is that, in spite of the very best evidence of the hopeless way in which some authorities are conducting their affairs, the electorate still vote for them. I am sure the Minister will say that it is not because they support what they are doing, but because they are making a comment on the national scene.

It will hardly come as a surprise to your Lordships to hear that we think there is something to be said for an experiment in proportional representation. Many noble Lords on the Minister's side take the same view—that local authorities might be more responsive to the needs of their electors if electors voted by a different electoral system. I shall not go further into that this evening, because at this time we do not want a long debate on what I regard as a very important subject.

But at this stage, and on the assumption, as well as in the hope and the belief that the noble Lord the Minister has been listening to what I and other noble Lords have said, and provided that the special needs of inner urban and deprived areas will be taken into account in coming to a determination on the best information available, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman of Committees

I have to point out that if Amendment No. 21 is agreed to, I cannot call Amendment No. 22.

Baroness Fisher of Rednal moved Amendment No. 21:

Page 2, line 33, leave out ("or £10 million, whichever is the greater")

The noble Baroness said: The purpose of this amendment is to delete the £10 million expenditure limit below which authorities will not be liable for selective rate limitation. According to the logic of the Government, I believe that this amendment improves the Bill. The rates White Paper states that the selective rate limitation policy has two main thrusts: first, to constrain the total of local spending; and, secondly, to protect ratepayers in particular areas. One would have thought that ratepayers in all areas need to be protected; it is strange that the Government want to protect certain ratepayers. However, each of these objectives is highly contentious. Nevertheless, the £10 million exemption that is contained in the Bill jeopardises both of those objectives which the Government have published in their White Paper.

First, in terms of total public expenditure there is no difference between 10 exempt authorities overspending by £1 million and one authority overspending by £10 million. There is no logic in it. I do not accept that only large local authorities indulge in what can be described as "loony" actions. It is possible that "loony" actions are committed by smaller local authorities. However, their local press coverage does not hit the headlines as does the press coverage of the large local authorities. Their press coverage is much greater than that to be found in a local weekly "rag".

Furthermore, as has been said on many occasions during our debate today, the level of rate-borne expenditure is a function of population, of the needs of the area and of the services which the authority provides—in other words, what the electors have decided they want their elected representatives to put into operation. If, however, we look closely at the £10 million exemption, we see that it affects only non-metropolitan district councils. Some 275 of the 333 district councils would be exempt under the £10 million exemption. One could argue that that is a party political ploy. I do not criticise the power that these local authorities have over their rate-borne expenditure account. It includes refuse collection, environmental health, recreation, markets and cemeteries; but they do not face the big expenditure which has to be borne by the major local authorities. Their expenditure on education, the personal social services, the police, the fire authority or highways is not great.

The major authorities obviously get into greater difficulties as greater burdens are placed upon them because of the Government asking them to take over various functions. Because of the siege in St. James's Square, a heavy cost will be involved for the police authority, and it will have to be paid for by somebody. Whether or not the Government will take that responsibility away from the metropolitan authorities will have to be considered. However, the police authorities, the fire authorities, and so on, are the responsibility of the large local authorities which are being penalised for the sake of those—again this is a political judgment—who are involved in the Government's policy. It seems a peculiar sense of priorities in the provision of public services that we shall be able to spend unlimited amounts on refuse collection but we tightly constrain the amount of money that can be spent on education. With rate capping, one is concerned at the way in which education will suffer tremendously as the biggest spender in large local authorities.

We ask the question: why £10 million? Why was it not £15 million, or £20 million? Is this just a crude attempt by the Government to neutralise political opposition from the large number of small councils, which are in the main Conservative controlled? Or is it that the Governments' bureaucracy does not want to interfere in the large number of authorities affected if they lessened the amount? This is an important amendment, and I beg to move.

Viscount Ridley

As Amendment No. 22, which is in my name, is similar to Amendment No. 21, it might be helpful if I speak to my amendment now, and I promise to be very brief. Amendment No. 22: Page 2, line 34, leave out ("£10 million") and insert ("£1 million") I really put down Amendment No. 22 to annoy the Asociation of District Councils (and my noble friend Lord Sandford), which association is largely escaping the effects of this Bill. As the noble Baroness said, 275 out of 330 district councils will be thinking that they are totally ignored by the whole Bill and can spend as much money as they like, up to £10 million. That itself could create a serious problem. Quite a number of district councils will say, "We can go to £10 million. Even though we had aimed to spend only £9 million, if we can go to £10 million without anything awful happening why don't we have a go?" This point should be looked at, because it may cost quite a lot of money which we may not have saved by other means.

This is a probing amendment. I want to ask the Government what made them think that a figure of £10 million was so magic. Was it just a round number that looked nice on paper, or was there a logical reason why the figure of £10 million was chosen and not some other figure that might have been more effective in catching all local authorities?

Lord Bellwin

If I may respond first to my noble friend Lord Ridley's latter point, Amendment No. 22 would remove the benefit of this restriction from all authorities spending more than £1 million. Effectively this is the same thing, because from the latest budget information for 1984–85 there are no authorities which will spend less than £ 1 million.

Viscount Ridley

Parish councils?

Lord Bellwin

Well, authorities. If, as the noble Baroness, Lady Fisher, said, the £10 million cut-off was employed to secure the support of the ADC, it has been singularly unsuccessful! The opposition from that quarter has been as vociferous as that from any other area, and we have not finished with it yet, I suspect. That puts this matter in perspective.

We made it clear in the White Paper that we intended to provide an exemption from rate limitation for authorities with a relatively low level of expenditure. The expenditure of such authorities can have only a small effect on the total of local government spending. It is far more important that our relatively limited resources should be devoted to controlling the spending of big, high spending authorities which have a major effect on overall expenditure patterns.

There is no particular magic in the figure of £10 million that we have settled on since the publication of the White Paper, except that it broadly achieves our aim. As has been said, of the 296 non-metropolitan districts in England, whose spending as a whole accounts for only about 7 per cent. of total local government expenditure, the £10 million figure would at present remove 276 from consideration on the basis of preliminary 1984–85 budgets. The expenditure of these authorities will of course continue to be subject to the general discipline of the block grant system. Meanwhile, we shall be left free to concentrate on the worst offenders—worst in the sense of the effect on the ratepayers and in the significance of their effect upon other general spending patterns. I do not think I can add any more to that. We clearly cannot accept the amendment, and I hope that the noble Baroness will not feel that she wishes to pursue it.

Baroness Fisher of Rednal

I listened carefully to the noble Lord. He said that there is no magic figure, but one must feel that there is a party political decision being made. The Government, in setting targets for local authorities for 1983–84, set two basic sets of targets but they also devised a third, intended to catch only the GLC. This they did because their original target, the 20 per cent. above, caught Corby and Milton Keynes. Therefore, they set another target, or another figure, the £10 million, to exclude those two, and so set a particular target for the GLC. What we are saying is that that £10 million was a target fixed explicitly by the Government to protect what are quite clearly their friends. Whether or not the Minister likes it, that is the opinion. As the noble Viscount, Lord Ridley, said when he moved his amendment, he was doing it only to get a dig at the district councils, which up to now had got off scot free. There is no magic figure; it is a figure which suits the Government's party politics. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 22 and 23 not moved.]

10.18 p.m.

Baroness Nicol moved Amendment No. 24: Page 2, line 35, leave out paragraph (b) and insert— (" (b) to be grossly excessive having regard to demographic, economic and social conditions in the United Kingdom in general and to demographic, economic and social conditions in the area of that local authority in particular".)

The noble Baroness said: I rise with a feeling almost of despair. We went over this ground on Amendment No. 20 and there seems to be a tangible barrier across the Floor which prevents each from apparently understanding what the other is saying. However, we shall have one more go. The wording of this amendment is slightly different from that of Amendment No. 20 in that it has more specific requirements, so I shall proceed as if Amendment No. 20 had not happened.

This amendment alters the test by which an authority is measured to gain exemption from selection. It requires the Secretary of State to consider not only national demographic, economic and social conditions, but also those particular conditions in the authority in question. As we have already heard, fluctuations of conditions in authorities must affect their needs: fluctuations in the mix of age range, which has happened in some of the older "new towns", where they have had serious age imbalances due to the fact that they filled up with younger people who then all became old. The difficulties of the local authorities are very real. Unusual surges in population, such as we enjoy in Cambridgeshire, which has the largest population growth of any county in the country; changes in local employment opportunities; and large ethnic populations, or an unbalanced social mix, all have effects which need to be considered when deciding the reasonableness of an authority's spending.

We understand that the Secretary of State requires the right to examine an authority's spending to see whether it is reasonable according to his lights. What we are trying to say, in many different ways, is that before he embarks upon that exercise he must recognise that there are certain basic needs, all of which can be quantified and can even be evaluated, which will vary from authority to authority and which must be part of the formula that he takes into account before he decides whether or not their spending has been reasonable. He can then go on to evaluate how much they pay for emptying their dustbins and all the other services they provide.

He must, however, take account of local conditions. It would be quite unjust for him to take decisions without weighing these local factors as well as the prevailing national conditions. Amendment No. 24 identifies the basic factors which we feel should be included, and requires him to take account of them. It would also give some form or substance to "the best information available to him", referred to in line 31.

I will now speak to Amendment No. 25. Amendment No. 25: Page 2, line 35, leave out paragraph (b) and insert— (" (b) to exceed its grant related expenditure for that year plus 25 per cent. and its expenditure guidance for that year plus 10 per cent.") This is slightly different ground which I do not think we have covered before. The purpose of Amendment No. 25 is again to write in criteria for selective rate limitation, but on a slightly different line. The amendment is to leave out paragraph (b) and insert (b) to exceed its grant related expenditure for that year plus 25 per cent. and its expenditure guidance for that year plus 10 per cent.

GREs are based on doubtful statistics. They make broad assumptions about equal demand for services and are admitted by the Government to be not perfect, which is why the block grant outside targets and penalties is not reduced until GRE plus 10 per cent. A wide margin is clearly necessary and this needs to be spelled out in the Bill.

In the second half, the targets plus 10 per cent., the Secretary of State already has wide discretion in the setting of targets or ceilings; the rules for their construction change year by year. Targets are not reliable enough for them to be taken as a measure of overspending, and this part of the amendment provides for a margin of error. I beg to move.

Lord Bellwin

The noble Baroness in this argument misses the whole point: that the basis for selection will be on criteria that take into account the GREs. The GREs already themselves are specifically designed to take into account local need. For example, the borough of Hackney has a GRE for personal social services of £121 and some pence per head. That compares with a national average of £44 and some pence per head, almost three times the national average. That is the whole object, the whole purpose of having GREs, grant-related expenditure assessment, that is what it is about, in determining the grant. Therefore when deciding on what the spending is, we are not looking here at authorities that spend 2 or 3 per cent., and I assure you that a number have come to see me and have expressed concern because of the advertising and campaigns about rate capping. There are those spending 2 and 3 per cent. over the GREs and often below their targets.

We are talking here of an authority, as I mentioned before, spending 86 per cent. over the GRE, over the already assessed need, allowing for their local circumstances. Additionally, we are talking about Amendment No. 25 which seeks to restrict spending to more than 25 per cent. above GRE and more than 10 per cent. above the expenditure target.

On the basis of 1984–85 budgets, there are only nine authorities which meet these very lax criteria and are spending more than £10 million. Very few authorities have been willing to put their ratepayers to that kind of distress, trying to meet bills associated with such excessive spending. Indeed, it is significant that of the nine—and this is the other point—only five are in a state of block grant and are therefore open to the pressures of the grant system. There is no question of accepting this specific amendment. However, having said that, I recognise that the amendment seeks to draw me to say where the line will be. As I have indicated, I am not yet in a position to say this. I have said that our intention is to select no more than 12 to 20 or so authorities; but until we have seen their budgets for 1984–85, we cannot decide on the precise criteria.

I have spoken at some length on this a number of times today. I think it was right that I should do so, because I recognise the concern. But in this whole matter we are not talking of authorities who are very similar to other authorities. We are talking of a handful of authorities—12, or 20 or so, out of 430 odd. That is all. They are far above any reasonable basis, no matter what criterion one applies. They are far ahead of anything that any reasonable authority can possibly justify.

If you look at what they spend their money on, there is the explanation. If you look at the fact that they refuse to provide services at a level comparable with the others, you see that part of the answer is there. These are political policy decisions. It is up to them to take them if they wish. We can talk about the nexus between voting and paying and all that, if we want to do so. The fact is that there are reasons why these authorities are in this position. They are not delicately balanced reasons. These authorities are streets and streets ahead of everybody else. Something has to be done. That is the whole purpose behind the Bill, and that is why we cannot accept these amendments.

Baroness Nicol

It is obvious that we have reached deadlock on this point. I can only once more reflect that if the Minister knows so well which authorities are involved, if he is so sure of these authorities, and if they are such streets and streets ahead of everybody else and in a class of their own, it seems a little odd that we have to have this general legislation to deal with them. I simply do not see why they could not have been dealt with either individually or in separate legislation, instead of having to take general powers to deal with them. However, for the present I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 25 not moved.]

Lord Sandford moved Amendment No. 26: Page 2, line 37, leave out subsection (3) and insert— ("(3) The Secretary of State shall, before the commencement of each financial year by an order made by statutory instrument increase the amount specified in subsection (2)(a) above by not less than the increase in the Retail Price Index for the previous calendar year.")

The noble Lord said: The Committee will have noticed that the ADC remained unmoved and unprovoked by the gibes from the AMA, the taunts from the ACC, or even the compliments from my noble friend on the Front Bench. Now I take pleasure in introducing Amendment No. 26, which I judge to be the easiest on the whole Marshalled List for my noble friend to accept.

It is an amendment which does not question the good sense and wisdom of establishing a figure of £10 million. It does not say anything about any possibility that that might be arbitrary as between one group of authorities and another, or unfair as between the county councils and the district councils. It raises no questions of that kind at all. It thinks that the clause as drafted is almost perfect. But it is anxious to ensure that it remains perfect. It does so by ensuring, or suggesting, that the Government's judgment should be kept up to date from year to year by application of the retail price index. With great hope, I beg to move.

Lord Bellwin

I am sorry that I have to disappoint my noble friend. At least I am being consistent. Your Lordships will have to concede that. I accept that from time to time it may very well be necessary to increase the value of the cut-off in the light of changing circumstances. We have said this. But I cannot accept this specific proposal for two reasons. First, I cannot accept that the RPI is the appropriate index by which to revalue figures. It is no more than an index of the movement in costs experienced by an average family. That seems quite inappropriate to local authorities which experience different rates of increase in their costs. They are at present broadly in line with the increase in the RPI, but that is not always so.

The second reason that I cannot accept the amendment is that it specifies a precise procedure for operating the £10 million figure. It does not require a mathematician to realise that the procedure specified in the amendment would very soon lead us to specify a cut-off level by order to a number of decimal places. That would not fit in with the concept of a cut-off level, broadly expressed, at which the expenditure of an authority can be said to make a significant contribution to the global expenditure of local government.

Without going on at length, I ask my noble friend to accept that we cannot accept this amendment. In fact we have been criticised within the past few minutes for being unduly lenient towards the position of the members of his association. Now, like Oliver, my noble friend comes with a request for a little more. I do not think that it is appropriate in all the circumstances. I hope he will let it go at that.

Lord Sandford

I am enormously encouraged by that reply. The principle has been fully accepted. I beg leave to withdraw the amendment, to seek a more appropriate and acceptable formula for giving effect to it.

Amendment, by leave, withdrawn.

Lord Underhill moved Amendment No. 27: Page 2, line 43, after ("State") insert ("in consultation with, and after taking into account any representations received from such association of local authorities as appear to him to be concerned and any local authority with whom consultation appears to him to be desirable")

The noble Lord said: There has been considerable discussion on other amendments of the question of the principles for the designation of a local authority. I would remind your Lordships that subsection 4 of this clause makes it absolutely clear that the designation shall—I quote: be exercised in accordance with principles determined by the Secretary of State". There are no criteria laid down, no principles laid down, though we do see that in the Notes on Clauses it is stated that the criteria mentioned in Paragraph 3.6 of the White Paper are the kind of thing that might be used. But that is not making law; that is merely Notes on Clauses referring to something in the White Paper.

What the amendment is seeking to do is to assist the Secretary of State. He ought to be very grateful for that because too much responsibility is being placed upon him. He will determine the principles. What we are asking in this amendment is that those bodies which can be of assistance and have got the information and the know-how should assist the Secretary of State. We are asking that he should take account of any representations which are made by the Association of Local Authorities and also any other local authority which he considers to be desirable. This seems to be the most innocuous amendment, one which the Minister ought to be able to accept, and I hope that he will do so.

Lord Bellwin

In that the noble Lord is anxious to help the Secretary of State, may I point out why I am equally anxious to help the local authority associations and my concern for their position in this matter. Amendment 27 requires the Secretary of State to consult with the associations about which of their members should be selected for rate limitation. I would have thought that that was an invidious position into which to put the associations. I am clear that those issues about which authorities should be selected should be matters for the Secretary for State and he should be answerable for those decisions and not be able to shelter behind the statutory involvement of the associations in his decisions. I shall fairly point out that in relation to the general scheme under Part II, where we would be dealing with the whole of local government, we do provide for consultation with the associations, both on the introduction of a scheme and on the setting of expenditure levels.

By rejecting this amendment we do not, of course, restrict the ability of any association or any authority to make representations to the Secretary of State about the way in which selections are made and the principles for setting expenditure levels are determined. But I do not think it advisable to bind him to consultation in this way, and I hope that the noble Lord will not want to press the amendment.

Lord Underhill

I am certain that the Minister has misinterpreted what I have said. We are not asking that the local authority associations should consider a particular authority to be designated. What the amendment is seeking is that the principles, the principles which the Secretary of State is given complete responsibility to determine, shall be done in consultation with the local authority associations and other authorities that he may consider desirable.

I would mention that it is written into the Bill later on that commercial and industrial concerns shall be consulted before certain local authorities fix the rate. If that can be written into the Bill, then surely the three important local authority associations ought to be given the same opportunity for consultation on principles. But what I will do, because of the late hour, is to read very carefully what the Minister has said and possibly come back at Report stage because there is a vital principle here. But in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 28 and 29 not moved.] 10.35 p.m.

Lord Graham of Edmonton moved Amendment No. 30: Page 2, line 43, leave out from ("and") to ("those") in line 1 on page 3.

The noble Lord said: With this amendment, I should like to speak also to Amendments Nos. 31 and 32. Amendment No. 31: Page 3, line 2, leave out from ("authorities") to end of line. Amendment No. 32: Page 3, line 3, leave out subsection (5).

These amendments make the principles used to designate authorities apply to all authorities and prevent the use of different principles for different classes of authorities. The Minister is well aware that the principle of designating classes of authorities is well established in previous legislation. We are concerned here that the principles to designate authorities should apply to all of them and there should not be the differentiation that clearly can happen at present under the Bill.

The Bill does not at the moment state what will be the rules for applying the principles. We have had some interesting debates this evening. I am tempted to use the word "arbitrary" because the Minister has, I believe, stubbornly refused to assist the Committee in understanding the nature of the principles that might be applied. The noble Lord has certainly resisted the opportunity that we provided for reading into the face of the Bill not merely the principles but also some of the details. We are much concerned that the nature of the Bill at present is far from satisfactory.

We are dealing with a great range of different authorities. The Minister is right in that when he finally gets round to the designation game there will be a common pattern clearly identified as overspenders, but there will also be some common elements. We are concerned here about the fear that will be engendered among a number of authorities on the edge of possibly being caught. The Bill as drafted breaches a fundamental principle of common law and natural justice. That is equal treatment before the law. The power to designate can be operated on one set of principles for, say, metropolitan counties or inner London boroughs and on entirely different principles for shire counties. If we are wrong and there will not be different sets of principles for different sets of authorities, the Minister can perhaps tell us. However, if the Minister is going to create different sets of principles for different sets of authorities, we say that this is managing and bending the situation to suit the whim of the Minister at any particular time. That is the basis upon which I move the amendment.

Lord Bellwin

The issue here is whether the principles underlying designation should be common to all authorities or whether it should be possible, as I believe, to apply different principles to authorities in different classes. Ideally, we should prefer to use the same principles for all authorities and we shall do so as far as possible; but that does not recognise the differences which affect the different classes of authority. They perform a different mix of functions. Their costs may, in some circumstances, be affected to different extents by changes in pay and prices because of different ratios of manpower to running costs and different pay settlements. It could conceivably be necessary to vary the principles between classes in order to arrive at similar treatment overall of the different classes.

In other words, to meet technical differences between the different classes we might need to use different principles. Different principles would ensure the same, equal treatment. I believe that this is the only circumstance in which we could use different principles without facing challenge in the courts.

There are precedents for providing for principles to apply separately to separate classes of authority. The multipliers set for block grant are a good example. A change in the discount of rateable value allowed for the block grant of London authorities would affect rate poundages so that comparison of rate increases over a period of years could be distorted. It would be our intention to operate, so far as possible, on generally applicable criteria, but we could not agree that the Secretary of State should be restricted in that way. I hope the noble Lord will accept from me that that is the intention. It is in terms of the practical application in dealing with this matter.

Lord McCluskey

I wonder whether the Minister would tell me what he means by "principles". I have listened to the debates on different amendments. I noticed in particular that the Minister declined to accept Amendment No. 16, which used the word "details". Now, in describing principles, he talks about pay, he talks about prices. A few minutes ago he was talking about the appointment of political advisers. I am afraid that as a lawyer—ultimately it is the courts which will determine what these words in the statute mean—I do not understand the word "principles" as it comes from the mouth of this Minister, or as it is in this Bill.

May I ask him, for the enlightenment of the Committee—so that we may consider where we stand when we come to vote on the Question that the Clause Stand Part—whether he will explain the difference between a detail and a principle, and why the concept of rates of pay and the concept of prices can be described as principles and not as details? In short, can he tell us what is meant by "principles" in this clause?

Lord Bellwin

I was trying to move ahead, but perhaps I will give a little more detail. Between 1982–83 and 1984–85, for example, we have seen relatively large increases in the planned expenditure on police—16.1 per cent.—as a result of our commitment to improve law and order services, and a slightly larger increase in the provision for personal social services in response to our ageing population.

On the other hand, provision for education has increased much more slowly in order to recognise the savings from falling school rolls and it is possible to see that in some circumstances the balance of service provision could be so weighted towards some classes of authority that it would be appropriate to take account of that in looking at expenditure performance. If not, some authorities could be selected because of these factors, and not because their spending within their area of responsibility was inherently more excessive than that of other types of authority with different services to provide. What we are seeking to say—I stressed it before—is that ideally we should prefer that the same principles should be used for all authorities. I stressed that we shall do that as far as possible; that is the intention.

Lord McCluskey

I am sorry for intervening, but I am afraid I have expressed myself extremely badly. What I was endeavouring to discover from the Minister is what he means by the concept of principle, as distinct from the concept of detail. The kind of gobbledegook that he is pouring out at this late hour of the night is not helping me to understand that concept. I should like to know what he means by a principle. Can he tell us?

Lord Bellwin

I am sorry that the noble and learned Lord feels it necessary to talk about gobbledegook. If he does not follow the points that I am making, he should—as he is doing—ask me to clarify them, and I shall try to do so. I find difficulty in understanding some of the questions that the noble and learned Lord puts to me. He himself suggested that might be the case. We are seeking here to ensure that authorities know the principles or the basis on which they have been designated. That is what we are talking about—the basis on which they have been designated; the criteria, if one likes, that will apply.

We said earlier that the criteria will relate to the totality of spending, not the detail on what they spend but how much they spend and how it relates to GREAs, targets or combinations of both. This has yet to be resolved and decided. That is what we mean when we talk about general principles. When we talk about details it brings in the point noble Lords opposite were making earlier when they said we will then consider the needs and all the other factors that are involved in a local authority's spending. That is really what we are trying to say here. When I talk of principles it is that kind of principle to which I am referring.

Lord Graham of Edmonton

I am prepared to withdraw the amendment; but the Minister, who always does his best to help the Committee, has quite clearly indicated the ease with which it is possible, if not to be confused at least to be faced with a number of interpretations of what is meant by a phrase. In describing "principles" he used the phrase "general criteria", and then he referred to "the basis", and so on. Clearly the legislation will lend itself to a number of cross periods as between councils and the Government, perhaps not on matters of substance but on matters of interpretation. In withdrawing the amendment let me say that we certainly intend to come back to this matter at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 31, 32, 33 and 34 not moved.]

Clause 2 agreed to.

Lord Denham

I think we have reached a satisfactory stage of the Bill at which to give up for the evening. I am most grateful for the progress that we have made. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at thirteen minutes before eleven o'clock.