Skip to main content

Orders Of The Day

Volume 889: debated on Monday 24 March 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Housing Finance (Special Provisions) Bill

Order for Second Reading read.

3.43 p.m.

I beg to move, That the Bill be now read a Second time.

This Bill is the last chapter in the long-drawn-out story of the Housing Finance Act 1972. I shall hope to convince the House that its provisions are both necessary and just. I shall also show that, contrary to much public comment, this is not a unique solution to a unique problem. Conservative Governments have more than once made comparable decisions. Indeed we face here a problem which has troubled governments throughout history from ancient Athens down to President Ford and the Vietnam deserters today: when is clemency justified and when it is not? I believe in this case that it is, and I shall quote a number of precedents.

Since the Bill stems directly from the Tory Housing Finance Act 1972, I must take the House back briefly to the circumstances under which that Act was passed, for the Bill is designed to clear up the mess, which was then created. It may be hard to recall now just how controversial that Act was. I said on Second Reading,
"it is the most reactionary and socially divisive Measure that is likely to he introduced in the lifetime of this Parliament—and that is saying a good deal."—[Official Report, 15 the November 1971; Vol. 826, c. 48]
It was not only the statutory increases in rents. More basically, it was the blow to democratic local government. For the Bill removed the responsibility for fixing rents for their dwellings from elected local authorities a responsibility which they had exercised for 50 years or more under many different Governments—and gave it to non-elected, non-accountable rent scrutiny boards. And this was done at the same time as the Local Government Bill was being introduced, which purported to implement the Conservative Government's White Paper pledge
"to return power to those people who should exercise decisions locally".
As the House knows, we strongly contested the Bill in all its stages. It was clear that there was a real danger of local authorities refusing to implement some of its provisions. I warned the Government during the Committee stage that,
"local authority opinion is outraged by the growing threat to local freedom and local independence".
I went on to add,
"There will certainly be some, and there will possibly be many, local authorities which will refuse to implement the Bill…I am talking about law-abiding, peaceable people who are devoted to the service of local government, and to whom it would never ocur to break the law in any normal circumstances."— [Official Report, Standing Committee E 22nd March 1972; c. 4177–8]
The Government were unfortunately not persuaded. They wholly failed to grasp the intensity of the anger felt by locally elected authorities at their loss of freedom and independence under this Act.

The situation was greatly exacerbated by the way the Act was brought into force. The council rent provisions came into force during August 1972, a fortnight after Royal Assent, at the height of the holiday season, when many councils —indeed like this House—were in recess. They required councils to pass the necessary resolutions at once in order to serve the statutory notice for rent increases to come into effect at the beginning of October. Hon. Members opposite must know that this was hardly the way to implement a new, complex and highly controversial Act.

There was also the uncertainty caused by the so-called "Newcastle" amendment. This allowed authorities to seek from the Secretary of State a lower rate of mandatory rent increase if they could convince him that the mandatory rate would cause rents to rise above the probable fair rent level. After hours of argument in Standing Committee, the Government had this eleventh hour change of heart, and Section 62(4) was added to the Bill.

Authorities were thrown into further confusion. In the interests of their tenants, many of them sought this dispensation. Week after week went by before they got their concessions, and they then had to decide how to average out the rent increases over all their dwellings.

So, confusion and muddle. Anyone with knowledge of local government must understand the deeply felt resentment, both at the contents of the 1972 Act and at the haste with which it had to be implemented.

The outcome was that some authorities decided that they would not make the mandatory rent increases required of them under the Act. I ask the House to accept that this was not an explosion of some extreme Marxist militancy but the strongly felt reaction of mainly moderate but sorely tried men and women.

During this period, as many Conservative Members will recall, I made my position quite clear. I said that the behaviour of the Tory Government was dangerously provocative, and I recognised the dilemma in which Labour councillors were placed. But at the end of the day, and without making myself universally beloved by Left-wing audiences, I had no doubts: the law of the land must be obeyed.

In Standing Committee I said that
"it is no part of my duty as a democrat, a Socialist and still less as an elected Member of my party's parliamentary committee, to condone, let alone encourage, defiance of the law." —[Official Report, Standing Committee E. 22nd March 1972, c. 4178.]
And to Labour's Special Conference on the Bill, in July, I said
"I cannot advocate non-implementation. I am in favour of constructive opposition".

I have only just started. I shall give way later.

How should the Conservative Government have dealt with this situation? Their own Act gave them ample powers. They had the power to send housing commissioners into any local authority which refused to implement the Act. The commissioners would have taken over all the housing powers of the authority and been responsible for collecting the rent increases laid down by the Act. As some Tory Members know, many late-implementing authorities were in fact expecting the Government to send in housing commissioners. Some of them actually, indeed repeatedly, asked the Government to send them in. Many of them thought—I know this from what they said at the time—that they were acting within the law in refusing to implement themselves, so long as they asked the Government to appoint commissioners. They were wrong; but I can understand their confusion.

In the event, about 35 authorities in England and Wales failed to raise their rents as required by the Act. A number have convinced the district auditor that there were reasonable grounds for their delay: a fact which underlines what I said earlier—that authorities were in genuine difficulties over implementing the Act. But in the remaining cases—a score or so—the district auditor may well find that the rent losses were due to misconduct, and that it is therefore his duty to surcharge the councillors involved. These losses could total about £1½ million; and the councillors concerned number about 400. I can only be tentative on these points, since district auditors, as the House knows, do not make up their minds finally until they have fully heard all the parties involved.

What are the options facing us in this situation? One possibility, which I assume is what most of our critics want, would be to do nothing; and to let the law take its course. What would be the result?

The point of a surcharge is to recover money. It is not—let there be no misunderstanding here—a penalty for a crime, because these are not criminal matters; neither is it a fine. But the amount of the lost rent income is absurdly out of scale with the generally modest means of the councillors who would be surcharged. I understand that in some cases the surcharge divided evenly between councillors could amount to well over £10,000 each. Any surcharges, of course, are made "jointly and severally". That means that if some of the councillors cannot pay their share, the rest have to make up the difference.

Here I might say two things in parenthesis. First, it is interesting that in 1973 the then Conservative Secretary of State for Scotland—Mr. Gordon Campbell, now no longer with us—considered, as under Scottish law he must, whether or not certain Glasgow councillors should be surcharged for expenditure on publicity material opposing the Housing (Financial Provisions) (Scotland) Bill. That was the equivalent of the Housing Finance Act in Scotland. He decided, after considering the merits of the case, that although he considered the expenditure to be unlawful there should, nevertheless, be no surcharges. A Conservative Minister then took a sensible decision, so I am hardly setting a completely new precedent this afternoon.

Secondly, the previous Tory Government, as Conservative Members will recall, introduced changes in the law relating to audit under which, in fixing the amount of a surcharge, account may be taken of the means of the person concerned. Indeed, under the Local Government (Scotland) Act 1973, the Secretary of State may himself make such a judgment in precisely the kind of situation in which we now find ourselves. This is not the moment to discuss the many differences between the law in Scotland and the law in England and Wales. But it is clear that the Conservative Party fully accepted in 1973 the futility of heaping enormous surcharge, liabilities on individuals of modest means.

Can my right hon. Friend say whether, if these were not Labour councillors, this legislation would be going through today? If the answer is "No", does not that bear out the criticism that is being levelled at us that this measure has been brought in to protect certain individuals within our party? If the answer is "Yes", does not this give carte blanche to any Member on the Conservative benches, or councillors, to refuse to implement any legislation which we shall put through in this Session?

If my hon. Friend will bear with me for a little while he will see that my entire speech is directed to attempting to answer that argument, which I shall deal with fully and precisely later, namely, the question of precedent and possible incitement in the future.

To return to the situation in England and Wales, what would follow these surcharges if they were to be made? No doubt many of the councillors would appeal to the courts—first to the High Court, then to the Appeal Court, then perhaps to the House of Lords. The process would drag on and on, possibly for years. Week after week the sores opened by the Housing Finance Act would be publicly exposed, the old dissensions remembered and the damaging wrangling repeated. All these councils would be operating with their minds on the sterile disputes of the past when they ought to be concentrating on the challenge of the future, and, above all, on the overriding task of providing a decent home for everyone.

We cannot say for certain what conclusions the courts would reach. But it is likely that many of the surcharges would be upheld. So what then?

Will the right hon. Gentleman explain to the people of Derbyshire why he thinks it is just that those who were not a party to the illegality of Clay Cross should pay a surcharge on their rates? Will he further explain whether he will follow this by introducing legislation which will let off the next group of lawbreakers, those who decide that they will not pay the debts of Clay Cross?

The hon. Gentleman may just possibly conceive it likely that I shall be coming to Clay Cross in some detail later in my speech.

To go back to what I was saying, first, the councillors would become disqualified from civic office. Whole councils would be decimated; and some hundreds of by-elections would be fought in an atmosphere of unremitting bitterness—a bitterness which would endure for years ahead. Secondly, we should see the humiliating spectacle of the district auditor trying to collect the money. It is not simply a question of sending out a bill and waiting for the cheque to come in.

Many of these councillors stand to be made bankrupt, to have their life savings taken away and their earnings attached, and to lose their possessions, even their homes. As I have said, most of them are not militant extremists. They are respectable men and women who acted on principled—though mistaken—notions of right and justice. Many of them have given a lifetime of service to local government, often at considerable personal cost and I cannot believe that Conservative Members would really want to collect the full pound of flesh from these people.

In any case, what would be the result? As I have said, the whole aim of the surcharge procedure is to collect the lost money. Even if we went through the process I have described, with bailiffs, bankruptcies, and so on, we should still not make up the lost rent income, or even a tenth of it. A deficit would remain to be met and, as the law stands, it would fall on the rates and hence largely, via the rate support grant, on the taxpayers. That is precisely what I wish to avoid.

The right hon. Gentleman said that the whole aim of the procedure was to recover the money. However, he has just said that one of the results of proceeding with the letter of the law would be the disqualification of the councillors concerned. Disqualification is not concerned with the recovery of the money. The disqualification is a judgment on the conduct of the councillors as such. Surely there is a difference here with which he should deal. Perhaps the right hon. Gentleman was intending to come to it.

I discussed the effects of the disqualification a minute or two ago when I referred to the effect on the councils concerned with the endless series of by-elections ahead. I said that I thought that that would create an atmosphere of unremitting bitterness which the House would not wish to see occur. The case against letting the law take its course seems to me to be overwhelming.

Another possibility would be to allow the putative surcharges—the amount of rent income lost by late implementation —to become a charge on the central revenue and be met by the national taxpayers. We are wholly opposed to this. It would be quite wrong for the taxpayers to foot this bill, and we are determined that they should not. I shall explain this point in some detail later. It is for these reasons that we have chosen the solution set out in the Bill. I shall be interested to hear the Opposition's alternative.

I have dealt so far with the generality of councils involved in the present situation. I turn now, the hon. Member for Derbyshire, South-East (Mr. Rost) will be glad to hear, to one particular and difficult case—that of Clay Cross.

This case is different in one essential respect. Unlike all the other councils involved, the Clay Cross councillors have already been surcharged to the tune of £7,000—a surcharge arising from the extraordinary audit of their accounts carried out in November 1972—and they have already been disqualified from office.

On Clay Cross we have taken two decisions. First, we do not intend, despite the resolutions at the Labour Party Conference, retrospectively to annul the £7,000 surcharge, nor to use public funds to discharge the financial liabilities incurred by those councillors. The surcharge was a decision upheld by the courts, and we have no intention of retrospectively upsetting such a decision of the courts. So, contrary to some public comment, but fully in line with the advice given by my right hon. and learned Friend the Attorney-General, there is no indemnification for this surcharge and no recompense from public funds. The money to meet the surcharge will not be found by the Government, nor by the ratepayers of North-East Derbyshire. It must be found from private sources or the surcharge will stand.

Secondly, the disqualification. My right hon. Friends the Lord President of the Council in October 1973, the Foreign Secretary in January 1974 and the Prime Minister in this House in April 1974 had already committed a Labour Government to shortening the period of disqualification which the councillors have suffered as a result of the surcharge. This Bill carries out that commitment. [Hon. Members: "Why?" That is what I am about to attempt to explain to the House.

This decision has been widely criticised both as retrospective and as an undue interference with the judiciary. But it is not retrospective. By the time that the Bill is passed, the councillors will already have been disqualified for a considerable period, and no one can retrospectively alter that.

As to the rule of law, if we had tried to reverse the High Court judgment and rescind the surcharge, criticism would surely have been valid, though I shall remind the House in a moment that a past Conservative Government did exactly that in 1927 in very similar circumstances.

The surcharge of £7,000 still stands. But we propose to terminate the disqualification when this Bill becomes law, partly because we consider it wrong for the Clay Cross councillors to remain disqualified for failure to implement the Act when other councillors are released by this Bill from the threat of disqualification, and in order finally to get the bitterness and rancour out of this whole situation.

No. I propose to finish this passage on Clay Cross and then I shall give way to my hon. Friend.

I would remind the critics of this decision that when the Housing Commissioner was finally sent into Clay Cross, The Times, which has thundered so heavily against our proposals, editorialised as follows:
"Once the case"
—that is, Clay Cross—
"had become an isolated one, it would have been better to stop the arrears mounting up, for they could only add to the drama of the affair…The surcharge is a necessary weapon of last resort, but it is unwise for a Government unnecessarily to give anyone the opportunity of making a martyr of himself."
Unfortunately, that is precisely what the Conservative Government did. I would also remind the critics that, if Clay Cross had been in Scotland, these councillors would not have been disqualified, for in Scotland no disqualification attaches to a surcharge, whatever its size.

Does my right hon. Friend, as a relatively fervent admirer of the EEC and European rights, understand that the striking out of the Clay Cross appeal in the High Court by Mr. Justice Megarry, on the one hand, and, on the other hand, the auditor surcharging these people £6,985 is a violation of Article 21 of the Universal Declaration of Human Rights? My right hon. Friend said that this could not have applied in Scotland. Does it not strike him that in this European context it could not apply either?

I am happy to say that my right hon. and learned Friend the Attorney-General has just returned from Strasbourg and he will be better informed on these matters than I can possibly claim to be.

I look on this decision as an act of partial amnesty. I believe that it is now time to close this miserable chapter in the history of our local government and to wipe the slate clean so far as the defaulting authorities are concerned. This, as I have made clear, does not mean wiping out the lost rent income at the taxpayers' expense. Rather it means giving the local authorities a second chance to recover the rent income lost by their default. I believe that any responsible Government, of whatever persuasion, would have come to the same broad conclusion.

There are worries—I profoundly respect them, and here I answer my hon. Friend the Member for Liverpool, Toxteth (Mr. Crawshaw)—about whether we are setting a dangerous precedent which might encourage others to break the law in future. The question is this: is this one of those exceptional cases where to apply the full rigour of the law would be neither just, compassionate nor sensible?

I am not making a party political point here, but I note that historically, contrary to what the Leader of the Opposition said in her outburst last Friday, the Conservative Party has more than once followed this principle. I quote three examples. First, the events—not dissimilar—leading up to the Audit (Local Authorities) Act 1927. Surcharges far beyond the means of the councillors involved had been made by the district auditor at the London boroughs of Poplar, Bethnal Green and Woolwich. This was part of the continuing story of what came to be known as "Poplarism". Faced with the probable imprisonment of 97 councillors and the wholesale annihilation of these three councils because of the bankruptcy of their members, Mr. Neville Chamberlain, then Minister of Health, could as little stand idly by as I can today. The 1927 Act therefore contained what he himself referred to as an "indemnity clause" which he introduced in these words:
"I might have left them"—
these 97 councillors—
"to their fate. I have not taken that view…one might fairly take the opportunity of wiping the slate clean as far as the past is concerned. and giving the benefit of the doubt to those particular cases."—[Official Report, 15th June, 1927; Vol. 207, c. 1033.]
So Mr. Neville Chamberlain removed the surcharge—incidentally, first imposed during a previous Parliament—and the threat of imprisonment, referring specifically to the need to exercise clemency in such a situation.

Secondly, the wartime Government of Sir Winston Churchill, no enemy of the rule of law—

Before my right hon. Friend leaves that important matter, I should like to point out that Mr. Chamberlain said that he removed the surcharge on the Poplar councillors because there was a reasonable element of doubt which could have been in the minds of the councillors because the Court of Appeal had overthrown the district auditor's view and sided with the councillors. As there could be a reasonable doubt among the councillors, he said that he was prepared to remove the surcharge on them.

With great respect, my right hon. Friend is not factually correct. After the case had gone to the Court of Appeal, it went to the House of Lords, a higher court, which sided with the district auditor and decided that the surcharge was correct. Therefore, Mr. Chamberlain changed the law in such a way as to overthrow a decision of the House of Lords.

I propose to complete the precedents and then if the hon. Gentleman wishes me to do so I shall give way.

Secondly, there is the example of the wartime Government of Sir Winston Churchill—by no means an enemy of the rule of law—and the Betteshanger miners in 1941. Again, adherence to the letter of the law would have led to an impossible situation. Four thousand miners were on strike in Kent, and under the National Arbitration Order the strike was illegal. Prosecution of 4,000 men was in practice impossible. The local gaol could accommodate only a few at a time, and it would have taken years to work through the list. So a compromise was reached, the production of coal resumed, and the case was quietly forgotten.

I say nothing of the case, of which no doubt we shall hear from the lawyers on the benches opposite, of the five dockers and their mysterious rescue by the Official Solicitor. When the Leader of the Opposition last Friday described the Clay Cross affair as being
"like something by Conan Doyle or Agatha Christie",
I thought how much more aptly that description would apply to the bizarre actions of the Official Solicitor.

I take as my third example the action in 1971 of the Conservative Secretary of State for Wales, the right hon. and learned Member for Hendon, South (Mr. Thomas), who, using his powers under Section 228 of the Local Government Act 1933, retrospectively sanctioned the illegal expenditure on school milk of Merthyr Tydfil County Borough.

In each of these cases a sense of proportion and fair treatment prevailed. In each of them a way forward had to be found which least damaged the national interest and the rule of law. In each case a way was found.

I said that I would give way. I propose to finish this sentence about the precedents and I will then do so.

In each case a way was found, and in each case I find it impossible to believe that the rule of law was in any way undermined as a consequence.

The right hon. Gentleman will be aware that there was provision by statute for the Minister to take a certain course, and for the course which I took, in respect of school milk. However, there is no such provision by statute in respect of a deficiency found under the Housing Finance Act. Does the right hon. Gentleman agree with regard to the examples which he has given that in 1927, in particular, if one incurred a civil debt one was liable to imprisonment if it was not paid? That is very different from what we are considering today. When the penalty for a councillor for failing to obey the law can be disqualification, why is that penalty to be removed by this Bill?

In 1927 Mr. Neville Chamberlain introduced a Bill to alter the law with the purpose of removing a surcharge which had been correctly imposed on a large number of councillors. That fact cannot be evaded.

Is it not a fact that a court of law at that time was in doubt about whether there was validity in the surcharge, whereas the Court of Appeal has made it perfectly clear that the Clay Cross councillors were deliberately acting contrary to the law with the full knowledge of the effect of what they were doing, and also the Court of Appeal made it clear that they were unfitted to be councillors?

I am sorry to have to correct the right hon. and learned Gentleman again. The case in 1927 went to the House of Lords, which upheld the view that the surcharge was fully in accordance with the law, and, in consequence, Mr. Chamberlain proposed a change in the law. That fact cannot be escaped.

Does the right hon. Gentleman accept that it is not possible to say that there was no doubt merely because the House of Lords overruled the Court of Appeal. The fact that two authoritative tribunals came to differing conclusions shows conclusively how much doubt there was in the case.

It is not for me to make a judgment on the standing and legal status of the House of Lords. However, if it is a question of doubt, there was a great deal of doubt about whether the previous Government could not have avoided the situation by sending in housing commissioners at once.

May I offer my right hon. Friend an addition to his anthology of precedents? Does he recollect that in 1923 the Conservative Home Secretary was guilty of a gross illegality, causing serious injury to many people, rendering him liable to pay very heavy damages and liable to the penalties of the Statute of Praemunire, which, though nobody knows what they are, are generally believed to be very serious, and that he was saved by an indemnity measure introduced by the Conservative Government, who did not turn a hair, as though it were the most natural thing in the world?

I am obliged to my right hon. Friend, who has underlined the serious point that I am making, that questions of clemency, partial amnesty and indemnity are not unique to this Bill but have troubled many successive Governments in many different circumstances.

I turn to the Bill itself. It is based on two principles. First, the lost rent income must be made good. But the burden of making it good must not fall on the national taxpayer. The loss was incurred locally; it must be made good locally.

Secondly, the responsibility for finding the money must be placed fairly and squarely on the local councils in the areas concerned. They are the responsible bodies, and, as I have said, they will be given a second chance. Where local government reorganisation has altered the area covered by a council, the successor council must take on the job of collecting the lost money.

I remind the House that, although the councillors concerned will not have to bear a personal penalty for their misdemeanours, they will—many of them—bear a considerable political penalty. They will still have to raise the money which they have lost, either by charging higher rents or by increasing rates. In doing so, they will no doubt incur considerable local odium. That is inescapable. They must meet the electoral consequences of their original decisions.

Under Clause 1 the district auditors will continue their investigations right up to the point where they reach the decision as to whether the 1933 Act requires them to make a disallowance or surcharge for a matter relating to the Housing Finance Act 1972. This incidentally is very close to what The Tunes called for in a leading article today. At this point, instead of surcharging, the district auditor will issue a certificate in respect of lost rent, stating the amount and the persons he would otherwise have surcharged. This certificate will be subject to the same appeals procedure as a normal surcharge, and will not become effective until such a procedure is complete. As the House will see, we have sought to disturb as little as possible the normal audit and appeals procedures under the 1933 Act. Subsections 3 and 5 of Clause 1 provide transitional provisions for those cases where the district auditor might feel compelled to make a surcharge before the passing of the Bill.

Our aim is to recoup the loss, and Clause 2 outlines the method by which councils are to do this. The defaulting authority or successor authority, as the case may be, will recover the amount certified by the district auditor as lost rent by rent increases, either over the area of the defaulting authority or over the whole area. This recovery is normally to be completed within five financial years. These rent increases in almost all cases need be no more than a few pence a week. But we insist that the whole amount must be recovered, and so only where the Secretary of State is satisfied that only a negligible amount remains is he authorised to write it off.

We wish to give as much choice as possible to the councils concerned. Accordingly, in Clause 3 we widen their choice by giving them the option of charging the certified loss to their general rate fund, again over a period of five years, and again with the choice of making the charge over their whole area or only over the area of the defaulting authority. But, while providing this option, we want to ensure that any decision to charge the loss on the rates is exercised only after proper opportunity for public discussion of its implications.

Clause 4 terminates the disqualification incurred by those councillors who have already been surcharged and disqualified as a result of opposing the Housing Finance Act. I have already dealt with our reasons for including this provision.

The right hon. Gentleman has devoted almost all his speech so far to justifying the non-charging of the potential surcharge. He has devoted very little to justifying the removal of the disqualification. This is what disturbs most people. He has just said that he has already dealt with this matter, but all he said was that other councillors who might be subject to disqualification will not be subject to it if the Bill is passed. It is treating the House inadequately to try to gloss over this point, which is the main one for most people.

; I am sorry, if I have not satisfied the hon. and learned Gentleman on this point, but it is a point which I met head on and made no attempt to gloss over. It was during that section of my speech when I was most consistently —and reasonably; I make no complaint —interrupted.

The remaining clauses are supplementary. They deal mainly with the accounting arrangements. They ensure that no expenses or losses arising from failure to implement the Housing Finance Act will fall on the Exchequer by way of housing subsidy or rate support grant; and similarly that where a council decides to charge rent losses on the rates the relevant amount is excluded from rate support grant. So under no circumstances will the taxpayer contribute anything.

I think that I have not in my political life faced a problem as difficult as this one. I shall be extremely interested to hear what course the Opposition would have pursued in these circumstances. My colleagues and I cannot fall back on the glib certainties of the leader writers; we have had to face the dilemma in practice as to what should be done. I do not present our conclusions to the House in any spirit of dogmatic certainty that we have got them exactly right, still less in a spirit of triumph. Others in the House will advocate different approaches. Some believe we have gone too far; others that we have not gone far enough. They are both entitled to their views, which they hold in good faith. But the House will also accept that we advance our solution in good faith.

We must of course have justice, but justice should always be tempered with mercy. This Bill has to be seen not as an encouragement to law-breaking, but as an act of clemency on the part of Parliament. The rule of law is a vital value of our society; yet, at the same time, we recognise, as Conservative Governments have in the past, that laws ate sometimes imperfect servants of government, and unwise laws can get us into a horrible and unintended mess. In this case we are expressing the view, rightly or wrongly, that one set of social values —clemency, and a willingness to forgive and forget—should have temporary predominance over another social value—the rule of law. We are recognising that in certain situations it is healthier for society to forgive than to risk a Continuance of resentment and conflict.

The Bill is not a concession to pressure.[HON. MEMBERS "Oh] It reflects, as did the decisions which I have quoted of Chamberlain and Churchill and of two recent Conservative Secretaries of State, our belief that in this situation an act of magnanimity will best serve society's interest. These problems have always confronted democratic governments and I do not pretend that the answers are always simple, about when to exercise clemency and when not. In this case, justice and the rule of law permit the solution which I have put before the House. I commend the Bill to the House.

4.26 p.m.

I find it difficult to say whether the Bill represents the most shameful or shameless action of the present Government. I would have been tempted, if I had taken the words of the Secretary of State at their face value, to say that they represent shamelessness, but I think that the House recognises that beneath his attempt to brazen this out there was some shame in the right hon. Gentleman—and so there should be.

The arguments that the Secretary of State has put before the House are to a great extent an insult to this body. He himself must have been embarrassed by the pathetic nature of some of his points. His arguments about Neville Chamberlain and Poplar were fully defeated by his own right hon. Friend, the right hon. Member for Vauxhall (Mr. Strauss). His arguments about Betteshanger were utterly irrelevant, as were his arguments about the five dockers. They had absolutely no bearing on this case. His arguments about the affair of school milk in Wales were completely demolished by my right hon. and learned Friend the Member for Hendon, South (Mr. Thomas).

If the Secretary of State has cause to be ashamed today, the Attorney-General has far greater cause. I do not propose to pursue the question of the Attorney-General, as my right hon. and learned Griend the Member for Wimbledon (Sir M. Havers) will do so later today.

The Bill is an affront to the notions that we have always upheld about the rule of law and parliamentary government. The Secretary of State started his arguments by claiming that the Housing Finance Act and the procedures attached to it deserve in effect to be defied. What he said about that Act is utterly unacceptable. Having sat on the Standing Committee which considered it, I recognice that it was contentious, but the picture of it which has been painted bears no resemblance to the truth. That Act provides no justification for this Bill.

I acknowledge, of course, that, as the right hon. Gentleman has always said, the relationship between Government and governed is of great importance in democracy—we all know that—but to say that the Housing Finance Act breached that relationship is partisan claptrap. The fair rents system that it embodied was a Labour invention. Much of the Act remains on the statute book.

We used to hear thunderous objections to local authorities acting as tax collectors, yet the Government have now brought in the Community Land Bill which provides for exactly the same thing. Both the Secretary of State and the Minister for Housing and Construction have said that they will use the centre Government in the same sort of way as the Housing Finance Act did. In his book "Socialism Now" the Secretary of State said:
"We must formulate comparable default powers to deal with councils which refuse to build."
The Minister for Housing and Construction said in Committee on the Housing Finance Bill:
"We shall not demur next time when we are in power from taking such power as the Conservative Government have taken on rent issues for house building programmes if necessary."—[Official Report, Standing Committee E; 23rd March 1972, c. 4316.]
So the present administration have taken exactly the same kind of powers as were taken in the Housing Finance Act. To say that that Act was a travesty of the relationship between Government and governed is absolute nonsense. Let us hear no more of the argument that the Housing Finance Act remotely justified the sort of resistance to it which took place.

I want to consider the three purposes of the Bill as they are set out in the first paragraph of the Explanatory Memorandum, and explain our view on each of these. The first of these was
"to prevent surcharges under the Local Government Act 1933 arising out of a failure to implement the Housing Finance Act 1972."
I say straight away that we on this side of the House have absolutely no desire to be vindictive about this matter. I want to add firmly that my right hon. Friends who were then in office showed absolutely clearly that they had no desire to harry tenants and local authorities. They showed that they were prepared to be reasonable to a degree. There is absolutely no question about that.

The truth is that this Bill represents a shameless condoning of defiance of the law. One of the difficulties that we have to face in considering the Bill is that to some extent the degree of failure to implement the law is not really clear. The Secretary of State said today, what he did in answer to a Question on 17th March.
"There may be about 20 authorities in England and Wales where these issues arise. The number of members concerned may he around 400 and the shortfall of income a bout £1½ million."—[Official Report 17th March 1975; Vol. 888, c. 297.]
A large part of our case today is that it would have been far better to have waited until we knew the facts before coming to the kind of decision which the Government have taken.

I repeat that we have no desire to be vindictive, but the Secretary of State should have been in a position to come to the House with the full facts and to place them before us before any kind of decision was taken. I fully agree with what the The Timessaid this morning on this matter. In its leader today it said:
"In the first place Parliament should not be asked to decide whether to intercept the financial penalties before it has seen exactly what those penalties come to. It follows that the procedure of audit and surcharge should be allowed to run its full course. And the Bill should provide that at that point the Minister may submit for the approval of Parliament an amendable Order for the remission of all or parts of the surcharges imposed."
I could argue about the last sentence, but I entirely accept the first sentence. It is completely wrong that we should be asked to vote on something before we know what the truth is. If the argument is put forward that the procedure of surcharge involves a lot of apparatus, my reply is that the procedure of rent loss certification also includes a certain amount of apparatus. The Bill says that the auditor has to find out the amount of lost rent and say who has been surcharged.

The hon. Gentleman seems to he laying great stress on the suggestion that we should delay the introduction of this Bill until such time as all the facts are known. Will he agree that on that basis it was very ill-advised of the district auditor, Charles Lacey, to move in to Clay Cross and decide that a surcharge of £6,985 should be imposed on the basis of an arithmetical calculation or an approximate estimate of £1,000 in respect of rent rebate purposes? Surely if the hon. Gentleman thinks that it is a sound argument to wait until all the facts are known, the district auditor should never have gone to Clay Cross until he had a properly calculated amount of money in his mind in respect of rent rebates, which he never had at any time?

The hon. Gentleman's arguments are absurd. The district auditor had no alternative but to examine these accounts. His position is entirely different from that of the Secretary of State.

I am glad that the hon. Lady the Member for Lancaster (Mrs. Kellett-Bowman) has wakened up. She has made a groan at last.

Is the hon. Gentleman aware that the district auditor was sent in on the instructions of the Minister, under Section 237 of the Local Government Act, and was ordered to conduct an extraordinary audit? It was conducted not on a voluntary basis by the district auditor but under specific instructions, as a political exercise, from the Minister.

I am fully aware that the Minister asked the district auditor to go in. We have already heard from the Secretary of State the argument that there was undue delay in some respects. It seemed to me that it was entirely proper for the Minister to send in the district auditor, because there was very good reason for getting the matter cleared up quickly. The only regret is that the foolish councillors of Clay Cross did not behave as they should have done. As the Bill stands, it represents a blanket absolution for the offending councillors, regardless of the extent of their actions.

One thing is absolutely clear, in spite of what the Secretary of State said. There was absolutely no reason for uncertainty as to what the law required. My hon. Friend the Member for Southend, West (Mr. Channon), whose performance as Under-Secretary when the Bill was considered in Committee was brilliant, made that point absolutely clear. In the course of those proceedings he said:
"…the existence of default powers does not give a local authority the right to default on its statutory duties…default on a statutory duty is a breach of the law."—[Official Report, Standing Committee E, 23rd March 1972; c. 4256–7.]
That point was made with absolute clarity by Ministers. It was known full well to every councillor in the land, and there was no reason to argue that this was not known to everybody. To introduce the notion, as the Secretary of State did, that there was a kind of muddle about all this was a travesty. These statements by my hon. Friend were made months before the Act came into effect, and they were well and truly understood.

It is not enough to say that a local authority should hand over to a housing commissioner and be absolved of its responsibility. The Act was clear on that, and so were Ministers. There was a deliberate campaign by some hon. Members opposite to provoke defiance of the law. We know that some local authorities did not operate the law for a brief period, and then accepted the position. But, equally, we know that other local authorities, notably Clay Cross of course, persisted in defiance of the law. It is absolutely outrageous that the Bill should in this way remove any surcharge imposed upon those who deliberately and persistently flouted the law.

Will the hon. Gentleman agree that under Section 62(4) of the Housing Finance Act it is open to a local authority to apply to the Secretary of State for the amount of rent increase to be reduced? Although an application was made to that effect, the Secretary of State either refused to meet the applicants or refused to reply to the application, and the result was that at the time when notice had to go out no reply had been received from the Secretary of State. The result was—hon. Members will find all this set out in a recent edition of the Economist—that when the local authority did not implement the Act, this was because it was in a position of doubt, not having received any reply whatever from the Secretary of State.

The hon. and learned Gentleman is entirely wrong. The law is completely clear on this subject. The effect of removal of the surcharge has two effects—a financial one and disqualification. It has been argued that the financial penalties should be lifted on councillors, first, because they may not be able to pay and the charge will fall on the ratepayers, and, secondly, because the penalties are too harsh. My answer is that we should have the facts before this kind of question is decided. That is the answer to the Secretary of State's question "When is clemency justified?" Are the facts known? Even if the financial burdens were to be rescinded, there is no reason why blanket relief from the possibility of disqualification should be permitted in the way proposed by the Bill.

I come to the second purpose of the Bill:
"to substitute other means of recovering losses due to such failure"
to implement the Act
"without charge upon Exchequer funds••
So far as the Clay Cross example is concerned, there are four possible ways in which this can be done. First, it is possible to increase council rents in Clay Cross. Second, it is possible to increase council rents in the whole new district. Third, the charge can fall on the ratepayers in the old Clay Cross area. Fourth, the charge can fall on the ratepayers in the whole new district.

It seems to me that in equity the only proper thing is that the burden should fall on the old Clay Cross district. We understand that the figure is about £120,000. It is, perhaps, arguable that all the long-suffering ratepayers should bear the burden on the ground that they elected the offending councillors. But what is clearly and overwhelmingly wrong is that the ratepayers or council tenants of North-East Derbyshire as a whole should have to bear this burden.

The Government must know by now that there is extreme anger in North-East Derbyshire at the provisions of the Bill. I have no doubt that my hon. Friends, and, indeed, hon. Members opposite if they are honest, will tell the Secretary of State very forcibly how utterly unacceptable and unfair this provision is. The truth is that to see law-breakers exonerated in this way has aroused disgust and anger, which the Secretary of State must understand.

The Secretary of State himself said in the House on 6th November that the deficit
"will be found from the communities that benefited by late implementation."— [Official Report, 6th November 1974; Vol. 880, c. 1085.]
That, presumably, applies to non-implementation. In no sense did the rest of North-East Derbyshire benefit from the actions of the Clay Cross councillors. I cannot see how that particular possibility under the Bill can square with the Secretary of State's comment on that date.

Clearly, Clauses 2 and 3 are very wrong, but it is Clause 4 which is the great disgrace, the clause which ends the disqualification of those who have been surcharged to an amount exceeding £500. It is on this clause that we who believe in the sovereignty of Parliament and the rule of law must vote to deny a Second Reading to the Bill tonight.

The point was well made by the hon. Member for Liverpool, Toxteth (Mr. Crawshaw) when he intervened this afternoon, and he has made the point previously. In the Liverpool Daily Postof 5th November last, the hon. Gentleman is quoted as saying:
"Those who seek to exempt them from liability by retrospective legislation ought to ask themselves if they have fully understood the implications of such action. The slipping slope towards Communism or Fascism has been reached when the Government starts to interfere with the courts or seeks to bend the law because they wish, to assist some of their friends."
The point has also been made equally effectively it seems, by the Attorney-General, but, as I have said, I shall not comment on that at present.

Quite simply, the Government we proposing the end of the five-year period of disqualification for the Clay Cross councillors after only one and a half years and to lift the possibility of disqualification for other councillors; including, it seems, again those of Clay Cross, whose offences we do not know exactly but might he substantial. This sets a hideous precedent. Like everything else in the Bill, it is wholly unfair to those people who did obey the law. One of the ingredients in the Bill which has made it most offensive to the country as a whole is the fact that the law-abiding should have been kicked in the face in the way that they have by the Secretary of State.

The Secretary of State has from time to time uttered high-minded noises about being a Social Democrat and believing in the rule of law, but when it came to the point he quite simply crumbled. As the Local Government Chroniclesaid, the day the Bill was introduced was
"a black day for all who believe in the rule of law."
It continued:
"Whether that Act was good or had"—
the Housing Finance Act—
"is irrelevant. It is no good Anthony Crosland arguing otherwise. What matters is that it was the law of the land and should have been observed. Any who chose not to do so should expect to face the full consequences. But what has happened? The Clay Cross rebels have not paid a penny of the surcharge imposed upon them. Now they never will. They were disqualified from office. But now that is to be lifted. The men whom the Master of the Rolls described as unfit to hold public office', and whom the District Auditor accused of overspending and mismanagement, are to be welcomed hack into public life."

is the hon. Gentleman aware that it was the law of the land also that the Minister should appoint a housing commissioner after making an order of default against a local authority?

It was only the law of the land that the Minister could appoint a housing commissioner if the local authority went into default. As I have pointed out earlier, that is what happened, and, as I have said, by going into default the councillors broke the law of the land. The commissioner has nothing to do with it.

I do not object to any of the hon. Gentleman's personal remarks, but he has made two errors of fact which should be pointed out. The first was in repeating an error of fact in the Local Government Chronicaleditorial which implies that the Government have removed the £7,000 surcharge, which is not so. The second error was by saying that the Government have overturned a decision of the courts, which is completely incorrect.

The Government are proposing to remove the surcharge which has fallen after the initial £7,000 surcharge was imposed, and this is a very substantial sum of money indeed. All the actions of the Government are in defiance of the court.

The hon. Gentleman cannot get away with this. No decision of the courts has been overturned. There is no—[Interruption.]—decision of the courts about this further money that might or might not be surcharged. The hon. Gentleman has no right to tell lies like that.

On a point of order, Mr. Deputy Speaker. Is it right for the Secretary of State to declare that my hon. Friend told a lie[HON. MEMBERS: "Yes."]—told lies? The Secretary of State's words were that my hon. Friend lied.

Order. I did not hear the right hon. Gentleman the Secretary of State—

Order. However, no doubt if the right hon. Gentleman said it he will say so and then withdraw it.

I did say it, Mr. Deputy Speaker, out of a strong resentment of being accused of overturning a decision of the courts, which we have not done. However, if objection is taken to the word, I withdraw it and substitute any synonym which hon. Members may care for.

Let me quote what the Law Society Gazette had to say

"There is no doubt that this Bill is a dangerous precedent. The rule of law is everywhere under attack, and Parliament, when it condones breaking the law, brings itself into disrepute: And measures such as this can only increase defiance of the law and even make that defiance respectable."
That is the essence of the charge. Not the least sorry feature of all this has been the way in which the Secretary of State has tried to fog the issue. In his statement on 6th November he made great play of the fact that the £7,000 surcharge on the Clay Cross councillors was to stand, but tried to duck the remaining £120,000 until my hon. Friend the Member for Hornsey (Mr. Rossi) brought it up. The Secretary of State also adopted the line that the Attorney-General, in his famous advice, was advising not on the subject of disqualification but on financial penalties and a surcharge. But except for the £7,000 the financial penalties are to be lifted from the councillors. The Opposition will return to that matter.

The question is: why did the Secretary of State crumble so pathetically? The answer, presumably, is that he had not got the guts to stand up to the Labour Party conference, except half-heartedly, over the initial surcharge. In 1973 a resolution was passed overwhelmingly at the Labour Party conference. It said:
"Conference further agrees that upon the election of a Labour Government all penalties, financial or otherwise, should be removed retrospectively from councillors who have courageously refused to implement the Housing Finance Act 1972."
That resolution was commended by the present Leader of the House, in words which condemn him for ever. The Leader of the House said:
"Clay Cross is something rather special. It really is. I think everybody in Britain, in the Labour movement and outside, were full of admiration and sympathy for the stand Mr. David Skinner and his colleagues had taken."
That is a wholly incredible remark. I expect that there are two hon. Members on the Government side of the House who can subscribe to it, but I cannot believe that any other person in the House can accept the notion that Clay Cross is something really rather special. The truth is that the Leader of the House is something really rather special.

Order. If the hon. Member for Aylesbury (Mr. Raison) is not giving way the hon. Member for Bolsover (Mr. Skinner) must resume his seat.

I should be very surprised if the hon. Member for Bolsover (Mr. Skinner) does not seek to catch the eye of the Chair later this afternoon, Mr. Deputy Speaker. I fear that it is on the cards that he will be successful. He will have every chance to put his point of view then.

An article in the Political Quarterlyissue for April to June 1974 shows that there is after all quite a lot that is rather special about Clay Cross and its late councillors. It is an astonishing story which is well worth reading in full. It emerges that the story began well before the Housing Finance Bill and the advent of the Conservative Government of 1970. In December 1968 the district auditor warned the council of its duty to maintain a
"…proper balance between the interests of the ratepayers and those of the tenants …council delegations to London produced little sympathy from Labour Ministers at the Department of Housing and Local Government, and still less from the officials. Casting round for expedients to keep going, the council proposed to use £30,000 from the sale of land to keep rents low by covering the deficit in the housing revenue account. The clerk warned them that this was illegal. In London the Ministry refused to countenance the idea. Instead Ministers"—
this was Labour Ministers—
"warned that action was 'vital and overdue'. The council needed a 'comparatively modest' rent increase. Officials also ventured the suggestion that the building and clearance programmes were moving at too fast a pace'."
It has become quite clear that the way in which these councilors—

Order. We can have only one hon. Gentleman addressing the House at a time.

The way in which these councillors, who were virtually all council tenants themselves, treated their officers was also appalling.

They were. So, too, was the way in which they treated their ratepayers. At present the district auditor is inquiring into other activities of these councillors as well as in relation to the Housing Finance Act.

There are two other matters which I should like the Secretary of State or the Attorney-General to clear up before the debate finishes this evening. First, an article published in the Daily Telegraph on 28th March 1974 stated:
"Some members of the Cabinet appear to have anticipated their ministerial decision yesterday when the party's national executive adopted without dissent a recommendation asking the Government to hold up, if possible, the machinery of the district auditor, and to rescind all surcharges made because of non-collection of increased rents."
I ask the Secretary of State whether this resolution of the National Executive Committee has had any impact. Has it anything to do with what appears to be the remarkably slow progress of the district auditor in examining the 1972–73 accounts? We should like information about those authorities whose 1972–73 audits have not been completed. In other words, we demand assurances that the recommendation of the National Executive Committee of the Labour Party has been disregarded by Ministers.

The answer is perfectly simple. Of course that recommendation has had no effect. I have no power to interfere with the work of the district auditor. In no circumstances would I dream of doing so. The hon. Member must understand that.

I am delighted to hear that the Secretary of State is willing to disregard the National Executive Committee. However, the fact remains that there is a remarkable coincidence between those authorities where the audit has not been completed and those which come under this Act.

The hon. Gentleman is hardly being at his most generous when he makes these allegations, and then, when they are contradicted, will not withdraw them. I have spent the whole of my life ignoring resolutions of the National Executive Committee.

That is the first cause for congratulation that we have had for the Secretary of State this afternoon. There are some details which need to be answered.

I will not withdraw.

Secondly, I should like to know what is happening about the £7,000 surcharge on the Clay Cross councillors. The Secretary of State in a Written Answer last week told the House that it had not been paid. What is happening? When will it be paid? How long will it take? What has happened to the fund that the Labour Party set up to raise the £7,000 so that it should be paid? This surcharge was imposed a considerable time ago and the House is entitled to know when the £7,000 will be paid and how long it will be before the district auditor institutes proceedings to ensure that it is paid. We must he told.

If money has been specifically raised to pay that £7,000, that money can be used for no other purpose whatsoever. The House is entitled to know how much has been raised and what will be done with it.

I hope that we shall receive an answer to that.

The Bill proposes to remove disqualification and the possibility of further surcharge from the Clay Cross councillors whose conduct was condemned by Lord Denning in his judgment, By any standards Lord Denning is one of our most liberal judges.

Lord Denning said:

"Each of them deliberately broke the solemn promise which he gave when he accepted office. Each of them has flagrantly defied the law. Each of them is determined to continue to defy it.…These men were flagrantly defying the law. They were not fit to be councillors. The sooner they were disqualified the better. These councillors are seeking, by one shift or another, to escape the consequences of their own wrongdoing. The time had come when they must be told quite firmly that the law must be obeyed. Their disobedience cannot be tolerated. They are disqualified. They must stand down. Others must be elected in their place—others who will fulfil the duties which these eleven have failed to do."

Order. These constant interruptions from a sedentary position make debate almost impossible. I must ask all hon. Members to bear that in mind.

Those words of the Master of the Rolls sum up our case to full effect. The truth is that the Government are proposing in this disgraceful Bill to remit the disqualification and surcharge imposed or likely to be imposed on men of whom the judge spoke in those terms. That is why we find it totally unacceptable. I ask not only my hon. and right hon. Friends but all Members of the House to whom the word "honour" means anything to join with us in rejecting decisively this evil, contemptible measure.

4.59 p.m.

Should I begin by saying, in the words of the hon. Member for Aylesbury (Mr. Raisosn), "comrade Speaker"?

I speak today as the Member for Derbyshire, North-East and as the proud representative of the Clay Cross First and Second Eleven, and, if the Second Eleven are disqualified, the Third Eleven.

I was sorry to hear the Minister, during what otherwise was a magnificent speech, say that he was in the main, but not completely, ignoring Resolution No. 191. It was accepted, in the best speech the present Leader of the House has ever made, at the Labour Party annual conference last year. Resolution 191 was passed by the constituency parties and by the trade unions and was accepted by the Cabinet. The resolution was to the effect that all penalties, financial and otherwise, should be removed retrospectively from councillors who defied the Housing Finance Act.

The hon. Member for Aylesbury alleged that my right hon. Friend had advocated defiance of the law. The hon. Gentleman said that that was giving a licence to defy the law. The hon. Gentleman also referred to the statement by my hon. Friend the Member for Liverpool, Toxteth (Mr. Crawshaw) that the Bill would give people the right to defy the law. The Shadow Secretary of State for Education and Science said that local authorities should defy the Labour Government as to implementing comprehensive education.

Those who are concerned with the rule of law realise that there is intense feeling about comprehensive education, for example. If the House were to pass a law requiring local authorities to abolish grammar schools and if Conservative-controlled local authorities wished to defy such a law, would not the passing of this Bill provide them with an extraordinarily good precedent?

Not long ago the hon. and learned Gentleman was saying that there was a great upsurge in Liberal thinking in the country. As the Liberals lost a seat at the last election, I do not take the hon. and learned Gentleman's opinion as being valid.

The Housing Finance Act 1972 was a wicked and vicious Act. One of the main points I want to make is that the Standing Committee sat for five and a half months, under a guillotine in the later stages, under the leadership of the right hon. Member for Brighton, Pavilion (Mr. Amery). The Committee sat all night and every night every week for five and a half months.

I had a duty to my constituents to go and listen to many of the discussions. Very sensible questions were put by my right hon. and hon. Friends under the leadership of the present Secretary of State. The answers given by the then Government were foolish and showed the House of Commons that the Tory Government intended to have that Bill come hell or high water.

The hon. Gentleman referred to a duty to his constituents. Will he explain why so many of his constituents are writing to me and even coming to see me in my surgeries complaining about the threat of their rates being surcharged in North-East Derbyshire as a result of this legislation which the hon. Gentleman is supporting? How will he represent his constituents when they refuse to pay this surcharge in North-East Derbyshire because they regard it as unjust?

When the hon. Gentleman first got here many of his constituents came to my surgery and asked me why the hon. Gentleman could become a Member of Parliament after being drummed out of the Stock Exchange.

On a point of order, Mr. Deputy Speaker. I seek your guidance. Unless the hon. Gentleman withdraws that remark immediately, I shall raise it as a matter for the Committee of Privileges.

Order. Hon. Members are required not to make personal attacks upon individual Members. I am sure that the hon. Member for Derbyshire, North-East (Mr. Swain) does not wish to make a personal attack and would wish to withdraw that expression.

I do not see why I should withdraw it. It is the truth. It was printed in a newspaper only a fortnight ago. We can provide you, Mr. Deputy Speaker, with a copy within half an hour, if it is wished. Why should I not repeat something in this place—

Order. If we repeat everything that we see in the papers about each other we shall be in great danger. I know that the hon. Member for Derbyshire, North-East will withdraw that remark at my request.

I will withdraw the remark at your request, Mr. Deputy Speaker. I will tell you something else. I will publish an apology to all the dogs in this country for their being brought to the low extent the hon. Gentleman brings them to in his constituency by dealing with my constituents.

Further to that point of order, Mr. Deputy Speaker. I do not know whether the House can regard that as an apology for a completely personal attack in the House, when because of the privileges of the House I am not allowed to take action against the hon. Gentleman. I seek your protection.

The hon. Member for Derbyshire, North-East has completely withdrawn the statement.

The first gentleman to whom I apologised was in hospital for three months. The point I was making when I was rudely interrupted was that the Standing Committee met for all those months under a guillotine at the end. I sat all one night and half the next night listening to arguments from the Government Front Bench as to why Clauses 95 and 96 should be an integral part of the Bill. It was then stated quite clearly and with as much honesty as any Tory can commend that there were intentions to use those provisions in the event of any councils defying the Bill when enacted. Section 95 of the Act contains a preface leading to the appointment of a housing commissioner. Section 96 allows the Minister to appoint a commissioner after conducting such inquiries as he sees fit.

The Clay Cross Council, on my advice, wrote to the Minister and asked him politely to send in a housing commissioner because it did not intend to implement the Act. That was a declaration from the word "Go", so there could be no misapprehension in the Minister's mind about what the intentions of the Clay Cross Council were.

Within six weeks of 1st October—on 14th November, after the shortest time in history and the least amount of money in history—an extraordinary audit was instructed by the Minister to be carried out by Mr. Charles Lacey, the auditor. We have a transcript of the audit. I should love to be able to read it to the House tonight, but it takes nine and a half hours to read it, providing that the reader does not take any breaths or pause in the meantime.

The transcript of the audit shows that I made a special plea to the auditor, who appeared to have his mind closed, because of ministerial instructions, for the audit to be adjourned temporarily so that he and I could seek advice from the Minister as to why he was instructed to take proceedings under Section 228 of the Local Government Act instead of under the Act that he, the Minister, had taken so much trouble to steer through the House of Commons. The auditor, apparently acting on the Minister's instructions, completely ignored my plea.

As a consequence, the audit took over two days to complete. As my hon. Friend the Member for Bolsover (Mr. Skinner) has stated, the facts were not known to the auditor—[Interruption.] I should be obliged if I could have a couple of hours of quiet, because the only two people I can listen to at one time are the mother-in-law and the wife.

In my opinion, in the opinion of the Clay Cross councillors and in the opinion of the people who were present during the audit and who were completely neutral, the district auditor had been misled into conducting an audit without being aware of the facts and the figures. As a result, hypothetical figures were produced. It was suggested it could not be proved—that so much would be allowed for rent rebates and so much would be allowed for this, that and the other. It was proved in the ultimate that had everything been equal and had everything proceeded according to normality, the ratepayers and rent payers of Clay Cross would have been saved a considerable amount of money. Mr. District Auditor would not admit that, although he knew of the situation because he had been acquainted with the figures as we presented them in evidence. The result was that we spent two days arguing whether the audit was bona fide.

The main point I am making is that the appropriate sections of the 1972 Act were inserted to deter local councillors from refusing to implement. The Min- inter turned to Section 228 of the 1933 Act only because the penalties in it are 1,000 times more vindictive than the penalties in the 1972 Act in terms of instructing an auditor on recovery and penalties.

The only fiscal penalty in the 1972 Act is contained within the section which deals with individuals obstructing an auditor engaged in carrying out his duties. It levies a penalty of £400 against any individual who interferes with the carrying out of the duties of a district auditor.

As time rolled on it became patently obvious to everyone that the audit was politically motivated. We still have a transcript of every word that was said during the two days. It includes every fact that was known and every argument that was put forward.

The hon. Gentleman has made a serious allegation against the district auditor who conducted the Clay Cross audit. I believe that it is the custom of the House that civil servants are not attacked. I know it is the custom of the House that judges are not attacked. Is it right for the hon. Gentleman to say in the House that the district auditor conducted a "politically motivated audit"?

Hon. Members are responsible for the statements that they make. They must carry their own responsibility. I can go no further than that in specifying who shall be criticised and who shall not.

I am prepared to justify my argument because I stated a fact. After we had had a five-and-a-half hour session the district auditor suggested that we should adjourn for lunch.

Yes, a cup of tea. The district auditor was going to the Station Hotel, Chesterfield, for a seven-course meal whilst my hon. Friend the Member for Bolsover (Mr. Skinner) and myself were going for a sandwich. I refused to adjourn but in the end we agreed to have a 10-minute adjournment so that the district auditor could have a drink of water and a smoke. During that interval he let slip to the Press in a moment of indiscretion—this was two and a half hours before the completion of the evidence—that his mind was already made up against the Clay Cross councillors. Does that prove political motivation? Does that prove that the district auditor entered the matter with a closed mind?

No, I shall not give way. The hon. Gentleman has not shown any interest in our proceedings this afternoon He has only just come in. I would imagine that your seat is still warm in the smoking room. I am not giving way.

On a point of order, Mr. Deputy Speaker. The hon. Gentleman has made an allegation and I am not sure whether it was directed at you, Mr. Deputy Speaker, or myself. If it was directed against me, let me make it clear that I have not been keeping any seat warm in the smoking room. I have been here long enough to follow the tenor of the hon. Gentleman's present argument. It is only on that point that I wished to intervene.

The answer is that which my wife gave on dozens of occasions before we were wed—namely, "No."

This afternoon the argument about freedom has been used very forcibly. The Housing Finance Act 1972, for which many lads and lasses are to be penalised, took away from local authorities the freedom to levy their own rents. In a speech that the hon. Member for Chelmsford (Mr. St. John-Stevas) made last week he said that the Labour Government were taking away the freedom of local authorities as regards the selection of education. I suggest that the Housing Finance Act took away one of the freedoms that local councils most treasured. I was a member of a local authority for 22 years and my hon. Friend the Member for Bolsover was a member of an authority for 12 years. Between us we know a thing or two about freedom for local authorities. We were honest.

We were honest. We did not sell pork pies to councillors. If the hon. Member for Rochdale (Mr. Smith) could lift his double-barrelled body and make an interjection whilst standing I should be delighted. The hon. Gentleman is shouting like a Leeds supporter at Luton last Saturday.

I suggest that freedom is all important to any local authority. One of the freedoms that we enjoyed most was the freedom to fix our own rents. We were bound in law to balance our housing accounts year by year. I well remember the famous audit that preceded the one that took place in 1970. At that time my hon. Friend the Member for Bolsover was a member of the Clay Cross Council. We had an extraordinary audit because we were making an 18 per cent. contribution to the housing revenue fund from the general rate fund. We were accused of making the highest contribution in the country. Through diligent research in the Library we discovered that 18 other authorities were making higher contributions and that 14 of them were Conservative controlled. But the district auditor did not proceed against the Tory controlled councils. He picked on Clay Cross.

The argument that I put forward about political motivation started not with the 1972 Housing Finance Act but much earlier. Unfortunately a previous Minister with responsibility for housing in a Labour Government involved himself in it. I led three deputations to that Minister—I am pleased that he is not still with us, not in this place anyway—and we got a blank "No" on every occasion to the sensible suggestions which we made. I have been with five deputations to my right hon. Friend the present Minister, and he has told me that he is an implementer and would bring in this curate's egg of a Bill which would cure all evils.

I do not wish to delay the House further, but I must assure my right hon. Friend that, if I have the opportunity to serve on the Committee, I shall do my best to amend the Bill. We give it a qualified welcome today mainly because, as I say, it is a bit of a curate's egg. There is some good in it, the good being the removal of the disqualifications, but the had is the spread-over of the finances, and Labour Party Resolution No. 191 demanded the removal of all penalties. I suggest, therefore, that the Minister should look at that part of the Bill again. If this Government can spend millions of pounds, just as Tory Governments have spent millions of pounds, on projects which have proved very wasteful, it is my candid opinion that the £1½ million involved here, spread over 400 councillors, should be looked at again. Let the Minister think about it and perhaps wipe off the £l½ million.

The surcharge still stands. That was one of the financial penalties inflicted by the Tory Government or by the district auditor on the Clay Cross Council. The complaint is made that it has not been collected. The Clay Cross Council saw fit to take legal advice and decided that it had good grounds for taking the case to appeal. We finished up before Lord Denning claimed the privilege of the Bench to slander men who were working down the hit every day and women who were working at the factory bench every day, doing an excellent job.

It is noteworthy that in the year when the audit took place we were the only authority in the country to reduce the rates by 3p—and that at a time when every Tory authority, including Dronfield in my constituency, not only increased its rates but increased council house rents by 60p, making a total of 75p increase for council tenants in one year.

I ask the Minister to say that the Government are prepared to look at any sensible amendment which is put down to relieve me. I have to live with this in North-East Derbyshire. We have a split faction in my constituency, and we have a split faction in my local authority. Until we get real satisfaction out of this Bill, there will be local authorities suffering as a result of split factions. I should add that there were not just the Clay Cross eleven surcharged. There were 1,600 council house tenants who stood out for 12 months before they paid a penny arrears. I was talking to a man the other day, a man of 27, and he reckons that by the time he has cleared up his rent arrears under the Housing Finance Act he will be 108. He has agreed to pay them off at 2p per week.

What idiocy the Housing Finance Act was, and how viciously the then Minister behaved. He ought to be hung up from the yardarm for what he did and said in Committee on that Bill, between periodic visits to Committee Room No. 7 where the Tories had a commercial going for John Haig 24 hours a day.

I ask the Minister to look at this matter again. I hope that my hon. Friend the Member for Bolsover, who has done a hell of a lot of research on this matter, will catch the eye of the Chair later so that he may outline the whole thing in more detail than I have given.

5.24 p.m.

It is a pity that the hon. Member for Derbyshire, North-East (Mr. Swain) had such a weak case to put to the House that he had to spend all his time abusing Ministers, judges or district auditors. It is always somebody's else's fault. It is never his own fault or the fault of the Clay Cross Council, which happens to he in his constituency.

Fortunately, no hon. Member need go to great trouble to refute what the hon. Gentleman said about the district auditor, because the judgment of Lord Denning. which was quoted by my hon. Friend the Member for Aylesbury (Mr. Raison), shows how invalid were the Clay Cross councillors' objections to the extraordinary audit and the decision of the Secretary of State of the day to call for an extraordinary audit at that time.

The hon. Member for Derbyshire, North-East says that the Housing Finance Act was a wicked and vicious Act. acknowledge that he and I, and many other hon. Members, hold differing views about the merits of that Act, but on important issues such as this I shall try not to exaggerate, and I wish that he would not exaggerate. There are many things in the Housing Finance Act which even the hon. Gentleman, I suspect, would in his heart of hearts have approved and should have approved.

I shall not weary the House by recounting the merits of the Act, but let me remind hon. Members of two of its features. Until that Act, there were 40 per cent. of local authorities which had no rent rebate scheme whatever. Until that Act came into force, no private tenant, in spite of having his rent set at fair rent levels by the Labour Government, could possibly have got a rent allowance, unless he lived in Birmingham.

Is not the hon. Gentleman aware that, as a result of the implementation of that Act and the rent rebate scheme under it, the people who were paying most rent were paying rebates for the others? The Government were not paying them.

That is a common falsehood put about, as a result, I hope, of misunderstanding, by many Labour Members during the passage of the Bill. In fact, it was not so. The truth was—I suspect that it applied also in Clay Cross—that the failure of the local authority to give rent rebates meant that by the policy which it had been carrying on over many years it was helping its better-off tenants at the expense of its worse-off tenants. There must have been tenants in Clay Cross who would have qualified for rebates had that council had the practice of giving them.

The House will have formed its own view about the merits or demerits of the Housing Finance Act, and I shall not deal with that now. It was a matter of serious disagreement between the two main politicial parties. But there are many Acts passed by Parliament under Governments of both political complexions which are strongly opposed and which encounter great controversy and strong opposition, sincerely meant, from whomever happens to be the Opposition at the time. Even if the right hon. Member for Grimsby (Mr. Crosland) were right in his description of the Housing Finance Act—which I certainly do not accept— there would be no case whatever for the present Bill.

As long as we have in the United Kingdom the sort of democracy which we have had for the past century or so—we are not yet in Soviet Russia or the modern equivalent of Nazi Germany—it cannot be said that British citizens may pick and choose and decide which laws to obey and which not to obey. The moment either side of the House starts advocating that, we are in serious trouble. The hon. and learned Member for Montgomery (Mr. Hooson) pinpointed the issue a few moments ago when he asked what would happen if local authorities said that they would refuse to implement schemes for the compulsory abolition of grammar schools. There will be just as much deep feeling on that issue among many Conservative local authorities as there was among Labour local authorities on the Housing Finance Act.

It would be quite wrong for such local authorities to do anything illegal if the law put that statutory duty upon them. They are perfectly entitled to do what they wish within the law to frustrate the Government's wishes, but they are not entitled to break the law. And that applies to laws passed by Parliament under a Labour Government just as much as it does to laws passed under a Conservative Government.

The Secretary of State gave some explanation earlier this afternoon of the delays, saying that the Act did not come into force until 15th August, the local authorities were under a statutory duty to implement it by 1st October, that some of them could not get a direction in time, that they were therefore in difficulty, could not implement the Act in time, and were in danger of surcharge. I doubt very much that that is right.

For there to be a surcharge in this situation, the district auditor has to find that there has been wilful misconduct or wilful negligence. If there had been a misunderstanding or muddle which was made in good faith, the district auditor would surely not surcharge. I think I have conclusive proof of that fact. Last week the Secretary of State gave me details of the number of audits which have taken place for the year 1972–73. As my hon. Friend the Member for Aylesbury pointed out, there are as yet far too few details available for us to form a full judgment about the facts. Nevertheless, I notice that some audits have been completed, and we have been told by the Secretary of State that there have been no hearings on them, no public objections and no surcharge by the district auditor.

Let me take the five examples at random—Carlisle, Salford, South Shields, Walsall and Bedworth UDC. In each of these cases the local authorities to my knowledge were late in implementing the Housing Finance Act in 1972. Carlisle was as much as 13 weeks late; Walsall was as much as 14 weeks late; Bedworth UDC which, like Clay Cross, no longer exists, was also 14 weeks late. Yet, the district auditor has made no surcharge upon the councillors concerned. He cannot therefore have found that there was wilful misconduct or negligence in those cases.

The House must get it quite straight. The only cases in which there are likely to be surcharges by the district auditor are those where the councillors set out deliberately to flout the law which they knew to be the law and were guilty of misconduct or wilful negligence. There can be no doubt that Clay Cross is not a case of local councillors not understanding the law, not knowing the position and getting into a muddle Most of the people we are talking about deliberately set out to break the law at that time.

Can it be right, whichever party is in power, and whether the councillors concerned are supporters of that party or the party in opposition, that the Government of the day should, on coming into office, retrospectively remove the penalties which attach to the breaking of a law which was passed by the previous Government? That is a most dangerous act for the House to condone.

My hon. Friend the Member for Aylesbury rightly pointed out that no one on the Conservative benches wishes to he vindictive or wishes the councillors to be bankrupted or wishes extreme penalties to be imposed. First, however, we want to know the facts. I believe that as a result of the subsidy structure of the Housing Finance Act there are far fewer authorities on which large sums would have been levied by surcharge than has been made out by the Secretary of State. It will help the House if the Attorney-General will tell us tonight about these cases and whether, rightly or wrongly, under the Housing Finance Act as it was drafted, most of the default would have been made up by the Exchequer at that time.

It is my understanding that under that Act a very large proportion of the defaulting rent income would have been paid from the national Exchequer. I believe therefore that the number of councillors who would have been surcharged for any large sum is very much smaller than the House realises.

The law of surcharge needs to be reformed. No one can say that it is perfect. Of course, I accept that. as the law stands, the concept of surcharge is one of recoupment. It is not meant to be a financial penalty or a punishment on the councillor. It is meant to be a method of recovering revenue lost through the councillors' negligence or misconduct. Some changes in the law have taken place. Maybe we should move from recoupment. That system is unfair to the local authority with a large number of houses. Even if it were in default for only a short time. the surcharge on the councillors would be greater than for the authority with a small number of houses which might have been in default for a very long period.

Perhaps there should be a daily penalty All these matters should be considered. However, the House cannot properly consider them until we know how many councillors are in danger, where they are, what the financial penalties are and whether or not they exceed the £500 limit which leads to their being disqualified.

The course of action the Government have chosen to adopt is unfair on every count. First it will be unfair to rent payers in the areas affected, many of whom will be different from the rent payers who did not pay the increased rents. It will be grossly unfair to the ratepayers if the local authority decides that the ratepayers will have to make good the default. What is even worse is that it is intolerably unfair on those councillors who disliked the Housing Finance Act but nevertheless thought that it was their duty, regardless of their personal beliefs, to implement it because it was the law.

This is a situation that may well occur again in this House. If it does, how are hon. Members to react to their local councillors who might not like the law? If they try to persuade them to implement the law because it is the law, then what answer do they have when the councillors say, "Why do you not give a pledge that when you get back to office you will retrospectively remove the penalties? Why, therefore, should we obey the law?" That is an intolerable situation for the House.

The situation at Clay Cross is quite clear. The councillors defied the law. They were rightly surcharged. The Court of Appeal, in one of the most scathing judgments ever heard, gave its view on the conduct of the Clay Cross councillors. The House knows of their conduct over a number of years long before this situation arose. Whatever the rights and wrongs of surcharge and the level at which it is placed, one thing is crystal clear. Councillors, whether in Clay Cross or elsewhere, who wilfully break the law or are guilty of wilful negligence or misconduct should rightly serve the full term of their disqualification under the law. The Secretary of State has in no way addressed the House on this issue this afternoon. He gave us about one minute of his time in seeking to justify removal of the penalty of disqualification.

What is more appropriate than that a councillor who breaks the law should be disqualified from serving in a position of public responsibility—on a local authority? Surely no one can dispute that that is the correct penalty for someone who knowingly breaks the law. To remove the penalty of disqualification in this situation is a most serious step. It leaves the Government open to the charge which they have not convincingly refuted that they are engaged in paying back their own supporters only because they dare not face the political pressures. Some Ministers, including, I suggest, the Attorney-General, know in their heart of hearts that it is wrong to remove the penalty of disqualification for those who break the law. I believe, as has been said outside the House on many occasions—I need not quote the innumerable articles in the Press, many of the publications not being supporters of my party —that what the Government propose is wrong.

Just at this moment when the country is facing appalling problems of inflation and the equally appalling prospect of mass unemployment, with all the social strains that these problems are beginning already to create, it is highly irresponsible for the Government to condone the breaking of the law. I cannot think of a more irresponsible action on the part of any Government in our peacetime history. It is for the Government of the day at all times, but particularly now, to set an example by ensuring that the law is scrupulously obeyed.

There may be arguments about the level of the penalties imposed. As I have said, the surcharge is strictly meant to be not a penalty but a recoupment. I would join with the Government if they said this evening that they wished to re-examine the whole law of surcharge. Personally, I would go even further, though I do not know that all of my hon. Friends would, and say that when we have seen the full extent of the surcharges that may be levied on certain people, I might be prepared to agree that some of those surcharges would be unreasonable, although, for the reasons I have given, I do not know that they necessarily would be.

But what I cannot agree with and do not believe that the House should agree with is retrospectively removing the surcharges in totality, and particularly the disqualifications on those councillors who have deliberately broken the law and who have been guilty of negligence and misconduct. I do not believe that in comparable circumstances Parliament in the past would ever have been willing to pass a Bill such as this, and I very much hope that tonight the House of Commons will once more reassert its belief in the rule of law and fling out this wretched and disreputable Bill.

5.41 p.m.

The hon. Member for Southend, West (Mr. Chan-non) has, as usual, made a persuasive speech, and there were some points in his case that may be echoed in all parts of the House. But I am not clear what he wants done. He says that the Bill will be unfair to ratepayers and to rent payers, and there is a measure of truth in that. It will be unfair to some rent payers and some ratepayers. But what would the hon. Member himself like to do? If he were a member of the Government, what would he do? Would he leave things as they are? That would mean that 400 councillors would among them have to pay £1½ million, that they would not be able to sit on councils, although many of them have done admirable service for a long time.

Unless something is done, complete chaos will result, and I suppose that in the end the taxpayer would have to bear the burden of the loss in rents that the councils concerned have suffered. I do not think that condemnation of the sort advanced by the hon. Member, without suggesting some alternative action, is worth while.

I believe that the Bill is inevitable and necessary and I shall certainly support it and vote for it this evening, because there is no alternative. I support it wholly, with one important qualification. I ask the House to appreciate that people who are not politically motivated, who do not feel strongly against Labour or against Clay Cross, consider that there is a strong case for the Bill.

I want to quote to the House the cornments of an establishment newspaper that is certainly not sympathetic to Socialism —the Economist. Last week it published a very reasoned and sensible appreciation of the Bill, and I wonder how many hon. Members will disagree with it. It said:
"…it would now be necessary even for a Tory Government to introduce a similar measures.".
Talking about the people who would be surcharged if the Bill were not passed, the article said:
"These men were technically in breach of it"—
that is, the law—
"but their difficulties were caused by the dilatoriness of the Department of the Environment in replying to their applications under Section 62(4) of the Housing Finance Act to raise their tenants' rents by an amount less than that specified in the Act. The then Housing Minister, Mr. Julian Amery, failed to explain the detailed provisions of his Bill either to the Standing Committee of the Commons or to representatives of the local authorities whom he persistently refused to meet."
Speaking of councillors other than the Clay Cross councillors, it said:
"As soon as the legal position became clear"
they carried out the law. That is the view of a highly responsible paper that stands for the constitution on every occasion and condemns any breach of it. It says that the Bill as it stands, with one exception, is fully justified, and I share that view.

What I was trying to say to the House was that I thought that was right. Local authorities that did not implement the Act in time, either because of a misunderstanding or for the reasons outlined in the Economist, would not be be surcharged. I instanced five authorities that to my certain knowledge were considerably late in implementing the Act but that had not been surcharged, which tends to prove my case.

I understand that argument, but if this action is to be taken at all, the only sensible way in which to take it is to say that if some councillors have not been surcharged for acting on political motives and some because they did not get a reply from the Department of the Environment in time, we should be sensible and wipe out the surcharge from all those councillors, and that is what the Bill does. Unless someone puts forward an alternative way to deal with the matter, I do not see what else can be done but support the Bill.

I say that with one qualification to which I hold very firmly. It is that Clause 4 is unnecessary and undesirable and should not be passed. The situation in that respect is obviously entirely different. Nobody can suggest that what the Clay Cross councillors did they did in ignorance. They knew exactly what they were doing and, because they thought it was right and probably in the interests of their constituents, they deliberately made their own judgment on the matter and they defied the law.

My right hon. Friend is correct in as much as the 11 councillors at Clay Cross certainly knew what the law was, what the Housing Finance Act represented, and they watched it closely as it proceeded through Parliament. So closely did they watch it that they ensured that the Government, in the person of the right hon. Member for Worcester (Mr. Walker), then the Secretary of State for the Environment, were duly informed well in advance of the Bill's becoming law what they felt the Minister should do, namely, send in a commissioner in order that he could operate that part of the Act that entailed the extra £1. The councillors gave good reasons for that and told the right hon. Gentleman at that stage in no uncertain fashion that they would not obstruct the commissioner.

Perhaps a commissioner should have been sent in, but the fact is that he was not sent in and there was no justification for the councillors breaking the law or continuing to break the law as they did. They knew what they were doing and they knew what the penalties would be for doing it.

As a result of their action, they became heroes, not only locally but over a large part of the country. They had many sympathisers and were regarded as heroes by many people who should have known better. They were regarded with admiration and sympathy by leading party speakers at our party conference. They knew what they were doing and they knew that they were deliberately making themselves martyrs.

In doing it they were defying not the Conservative Party—that would have been understandable—but Parliament, because they were refusing to implement an Act of Parliament passed by Parliament democratically elected according to law. It is all very well for these people to become self-inflicted martyrs. There is nothing easier for any one than becoming a respected martyr by refusing to implement a bad and unpopular law. But there is nothing more dangerous to social democarcy. Therefore, it is something which we, as social democrats and believers in parliamentary democracy, must condemn.

I do not believe that those people who have deliberately made themselves martyrs have any justification in complaining when later the penalties of martyrdom are imposed upon them, or that they have any right to do so.

We must be clear about this matter, because it is very important. My right hon. Friend has continually stressed that these people regard themselves as martyrs. I inform him, with plenty of factual evidence to back me up, that on no occasion did any of the 11 councillors or the Clay Cross Labour Party make representations to any of my right hon. Friends in Government, or anyone else, to be relieved of these impositions. There is no question of their wanting to get rid of the impositions. Other people have done so, and I have done so, but they have never made any attempt to do that.

I completely accept what my hon. Friend says. I was not aware of that. I assumed that when loud and raucous voices were raised at the party conference and elsewhere, demanding that the penalty should be removed from these people, the councillors were aware of it and probably supported it. If I am wrong, I admit it straight away.

I am objecting to anybody asking for the removal of penalties from people who are self-imposed martyrs. They must bear the penalty. Disqualification for a number of years does not mean bankruptcy for them. It is not as serious as that. It is not as serious as surcharging people for large sums of money which they cannot pay. It is an indication to local councillors, and indeed everyone throughout the country, that if one deliberately breaks the law, knowing what the penalty is, one must bear it.

Moreover, if there were no disqualification, other councillors or other groups of people who hate a law, and think that it is wrong, would defy it in the hope or belief that the penalty imposed upon them as a consequence of defying that law, the penalty which they well know, might be removed by a subsequent sympathetic Government. It is for that reason that disqualification should remain. The district auditor says that people who behave in this way have broken their oath of office and should not sit on a council again for a long period.

As the right hon. Gentleman has rightly stressed the grave constitutional consequences of the proposal to remove disqualification and as that proposal is at the centre of the Bill. surely the right thing to do is to reject the Bill?

I do not believe that it is the centre of the Bill. It is a feature of the Bill. It is a point to which I and many others object strongly, but it is only one clause out of many. The other clauses, which I believe are the essence of the Bill, are those which remove the danger of surcharge on 400 councillors who, through justifiable ignorance, folly or stupidity, have not been surcharged. I believe that that is the main purpose of the Bill.

My right hon. Friend is surely forgetting that disqualification is a penalty. The councillors suffered the penalty to a certain extent. What is wrong with trying to mitigate the penalty to a certain extent? Why is that mitigation thought to be a breach of the rule of law?

Unless there is a strong case, there should be no mitigation for the serious offence of deliberately defying Parliament. The penalty laid down by law is five years during which those concerned may not serve as local councillors. The law implies that they are not fit to serve as local councillors, because they have broken their oath and the law.

If there are good grounds for clemency, I am all for clemency. Did the councillors do this in ignorance? They knew what they were doing. They knew right through to the end. I believe that my hon. and learned Friend will agree that they said and thought that they were doing something grand and that they were great local heroes.

When refusing to implement the law, they said "To hell with the law, to hell with Parliament. We are taking the law into our own hands. Under the circumstances, I do not see why Parliament should show any clemency towards these people. If it did, it would set a serious precedent for the future. As other hon. Members have pointed out, the question of precedent is all-important. Many people might want to follow it and pray it in aid—not necessarily councillors but other groups of people in the community.

It is especially important for Socialists, who want big social changes, to uphold the rule of Parliament and the rule of law. The great reforms they want can be brought about only through Parliament or by force. Any weakening of the parliamentary authority is a weakening of the ability of Socialists to achieve their aims in a democratic and peaceful way. For that reason, I appeal to my hon. Friends that there should be no weakening in our standing up for the law and its implementation.

Lawlessness is becoming a feature of our society to an alarming degree. We see it in many areas, such as universities where people take the law into their own hands. Because they feel that they are doing something they believe in, they consider that it is all right. In these circumstances, it would be especially dangerous for the House to take any action to remove disqualification. The restless mood of anarchy and lawlessness is infectious and may well grow. It is therefore highly desirable that Parliament should stand by the law that it has passed and should say that the penalties, if that be the word, the disqualification laid down by Parliament on councillors who refuse to implement an Act of Parliament, shall stand to the full and that there should be no remission.

It is dangerous for the House to endorse in any way a refusal to implement the law, as it would if it passed Clause 4. It is wrong for Parliament to endorse it or in any way to condone it. I know that many of my colleagues on these benches agree with the views I am expressing. I hope that the Government will reconsider the matter and say that they will think again, that they will withdraw Clause 4. However strong the appeal may be from those who are personally involved, and from their sympathisers and supporters, the Government must not give way to political expediency. We must in no way undermine the authority of Parliament.

5.59 p.m.

I find it difficult to reconcile the exhortations of the right hon. Member for Vauxhall (Mr. Strauss) to his right hon. and hon. Friends to support the rule of law and his statement that he intends to support the Government in the Lobby tonight.

This is a sorry Bill, introduced for a shabby purpose. I cannot help thinking that if a Tory Government were introducing a Bill to exempt Tory councillors who had broken the law a Labour Opposition would be at their throats like a pack of wolves. The plain truth about Clause 4, which aims to remove the disqualification on the councillors concerned, is that they were 11 Labour councillors, and this is a Labour Government.

I could not help feeling sad at the thought of a man of the standing of the Secretary of State for the Environment moving the Second Reading of the Bill. Some of his words must have almost choked him. The group of councillors concerned in Clay Cross, no doubt believing that a bad Bill was going through Parliament, passed a resolution on it long before it received the Royal Assent. That resolution, passed on 10th April, was that:
"under no circumstances would the council members put into operation any of the provisions contained in the Housing Bill."
The Housing Finance Act became law on 27th July. Those councillors had given three or four months' notice that they had no intention of implementing it.

The councillors were used by Labour Members. They were encouraged by some to break the law. It was a symptom of the lawlessness that we increasingly see in this country. It is something that one side can catch from the other. What will the Government's attitude be if the self-employed take the law into their own hands? What will their attitude be if they pass an Act to deal with comprehensive education and many local authorities, whose members feel as deeply as did the councillors in Clay Cross, refuse to implement it?

The Labour Party conference passed a resolution which made a nonsense of democratic Government, and the present Leader of the House endorsed it at the conference. To put it charitably, he must have taken leave of his senses momentarily.

Neither the Attorney-General nor the Secretary of State could possibly contemplate retrospective legislation to remove the surcharge. That was more than they could stand. What they have done is to compromise. They have introduced that part of the conference resolution, the removal of the disqualification, which enables them partly to satisfy the political pressures upon them.

We are here creating a serious precedent. I can appreciate the practical problem when £1½ million of revenue is apparently lost. The Government were right not to make it a charge on the Exchequer. But if it is wrong for the taxpayers generally to pay for the defalcations of the Clay Cross councillors, why is it right for the ratepayers of North-East Derbyshire to be faced with the prospect of paying for them? If they had no voice in deciding the matter, why should they even run the risk of paying for them? How can the right hon. Member for Vauxhall justify that, if he is so keen on the rule of law? He did not refer to that part of the Bill. The local council is to be given the option of raising the revenue by a general charge on the rates in the much enlarged district of North-East Derbyshire. How can anybody justify that in principle?

The other alternative is that the sum owing can be raised by increasing the rents of those in the district affected when the old council was in existence or the rents of those in the new district generally. How can the latter be justified? Why should people who lived outside the Clay Cross district run the risk of having to pay for what the Clay Cross councillors did? The Government have accepted the principle that the general taxpayer should not pay. If that is right, why should other people. who had no influence or means of influence on the decision reached by the Clay Cross councillors, run the risk of having to pay for what has happened? If the Government want to deal with the practical problem of the outstanding amount, and say that there is no point in making the councillors bankrupt, why should they put the onus on anybody but the electors of Clay Cross who elected those councillors? They are the people who should pay.

I agreed with the criticism made by the right hon. Member for Vauxhall of the hon. Member for Southend, West (Mr. Channon), who did not suggest an alternative, although I agreed with much of the hon. Gentleman's admirable speech. If one simply indulges in criticisms, one is left with the prospect of the Exchequer paying, of the general taxpayers paying, and I am totally against that. Those who elected the councillors at Clay Cross should pay for their misbehaviour.

It is all very well for the 11 councillors in Clay Cross to want to appear as martyrs, to have a great deal of publicity, to be willing flames to be fanned by those using them for political purposes. But now we see the consequences. The supporting tenants at Clay Cross should have to pay large increased rents. It would bring home to the people that they cannot have councillors who are prepared to break the law without taking the consequences.

The hon. and learned Gentleman asked what I would do. I do not know whether all my hon. Friends would agree, but I believe that the House should take no decision until we know the exact expenditure on the surcharges and how hardly they will bear on the alleged 400 councillors. Then the House should take a decision whether those surcharges are reasonable and should stand. But under no circumstances should the sentence of disqualification be removed.

I agree with the latter part of the hon. Gentleman's intervention. But we should look at the matter from a practical point of view. A rough estimate will show that the surcharges are obviously much greater than local councillors can bear. A surcharge is not meant to be a fine or anything like that. it is simply a recovery of money. We should be burying our heads in the sand if we ignored the practical problem. The disqualification is a totally different matter. That is a punishment for what the councillors have done, and it should in no way be mitigated.

The hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) interrupted his right hon. Friend the Member for Vauxhall to suggest that in certain circumstances the disqualification could be mitigated. Why should it be? If the Government are introducing a Bill which removes from those councillors the burdens of further surcharges, and effectively removes from them the threat of bankruptcy, why should the Government go further and remove the disqualification?

Hon. Members on both sides of the House. have mentioned social pressures, which are very great in an era of inflation, when there will perhaps be a great deal of unemployment, and when Scotland and parts of Wales may be pressing for independence. We never know how often the Bill will be used as a precedent. I remind the Government that it will be used against them more than against anyone else. It is wrong for the hon. and learned Gentleman to suggest that the sentence, as it were, should be mitigated.

Will any councillor be able to defy Parliament? Is the sovereignty of Parliament to mean nothing? Some Government supporters—among them the hon. Member for Bolsover (Mr. Skinner) —constantly argue the issue of the sovereignty of Parliament in relation to the Common Market.

I do not want to read them all. Spare me that.

Many Government supporters eloquently claim that the sovereignty of Parliament will be affected if the United Kingdom permanently adheres to the Common Market. The shabby exercise today undermines the sovereignty of Parliament, if anything does.

It seems too to me that the hon. and learned Gentleman is guilty of a great deal of synthetic indignation. To speak about Parliament and the authority of Parliament being undermined is, with great respect, utter rubbish. The hon. and learned Gentleman must recognise the principle of mitigation. The penalty of disqualification was exacted in this case. Those people suffered a disqualification for a period. Why is it wrong for a Government to say, "We recognise that there are all sorts of circumstances in this case. Although we recognise the gravity of the Housing Finance Act, we think that in the circumstances these people have served their period of disqualification and we mitigate that part of their penalty regarding this matter."? What is wrong with that? The hon. and learned Gentleman is a lawyer. He knows a good deal about mitigation in legal cases. No doubt when he sat as a recorder he exercised judgment.

The hon. and learned Member is also a lawyer. We must allow others to speak in the debate.

I am grateful to you, Mr. Deputy Speaker, for those words of wisdom.

May I answer the hon. and learned Gentleman? There is no mitigation in this case. These councillors deliberately and wilfully set out to break the law. If we regard their position or beliefs as mitigating what was done, we are undermining the position of thousands of genuine Labour councillors who, though they hated doing so, implemented this Act. We are undermining every principle upon which local government is based. Although they are sovereign within their sphere, that sphere does not include the right to challenge Parliament. If councillors refuse to implement an Act of this kind, they are entitled to do so provided they take the penalty. It is wrong for a Government to say —as this Government have said—that they also disliked the Housing Finance Act and that, though the councilors were wrong, the Government would save them from the consequences of that brazen behaviour.

Although this Bill might not strictly be retrospective legislation, that is what, in effect it amounts to. The Government are exempting the councillors from the consequences of their acts of two years ago. This is a really shabby Bill. There is no way in which the Attorney-General can mitigate the matter. I shall not deal with the personal vendetta against the Attorney-General which the newspapers suggested should be conducted. I am sure that. the Attorney-General has suffered torment over this matter. I have been a Member of Parliament for long enough to have seen honourable and decent men of all parties under party pressure to do something of which they did not entirely approve. But I think that the Attorney-General has gone too far with this Bill. He will find it difficult to recover from his part in it. He should reconsider the measure with the Government.

The House can tolerate the part of the Bill which seeks to remove any further pursuit of the surcharges. It is right that these charges should be recovered from the rents only of those people who elected the defaulting councillors. Apart from that, I do not think that the country will tolerate the removal of the disqualification. If the councillors concerned wished to act in that fashion they must take the consequences. It is wrong for any Government to try to save them from those consequences.

6.16 p.m.

As a lawyer, I have never told people that they must obey the law. I have said to them, "If you do not obey the law, you must take the consequences." Today we are discussing an issue concerning people who deliberately decided to defy the law. There is a slight confusion about what the Secretary of State said. Today he supported his argument about the 400 people by suggesting that there were some amongst them for whom we could feel sympathy, because they had been misled, or because there was confusion or delay. That statement does not tie up with what he said when he suggested i the introduction of this measure last November. He then said that these matters had been taken into consideration when they were assessed. He cannot have it both ways. I should like to know how many of the 400 persons come within the category for whom sympathy should be expressed.

I believe that what happened with regard to this legislation was brought about by the lack of leadership from the Labour Party. Many councillors received encouragement to disobey this Act, which it was suggested contravened the tacit agreement between the political parties in Parliament. I should like to be shown which part of the Act breached any of those tacit agreements.

Perhaps the priorities were wrong. Perhaps a Labour Government would have done it in a different way. To me, an Act which seeks to raise the rents of richer tenants and lower those of poorer tenants does not breach any of the tacit agreements reached between the different parties.

In seeking to recover this money from the ratepayers or tenants of the local authorities the Secretary of State will perpetuate a second injustice on some of those tenants. If the Housing Finance Act 1972 had been implemented, some of those tenants would have paid lower rents. They now pay a higher rent because the Act was not implemented. However, the Government are now asking them to pay an even higher rent, so that the people who did not pay the rents that they should have paid should be let off the hook. How can that be social justice, in any guise? The leadership of my party gave a wrong lead in that direction. I regret having to say this, because I consider the three persons concerned to be of great integrity. I admire them and I should not wish to lose their friendship. However, when people introduce legislation and put their names to it, they must take the consequences of it. Harsh words must be used One of my hon. Friends on the Front Bench said that the Tories did not need any friends when they had me on the Government side.

It is important to me that a political party or any other body to which I belong should do nothing which lowers its image in the public view. Today, what we are seeking to do will discredit our party. It will take a long time to live down.

It has often been suggested that the Secretary of State for the Environment was destined for the highest office. Having regard to some of the things that I have read over the weekend, perhaps that does not do him a favour, because he is likely to lose any possible elevation if I put that forward strongly. He is a man of integrity, and yet today did he sound convincing in the argument that he put forward? I believe that he put the case forward with a very heavy heart.

It is true, as was said only a short time ago, that the purpose of the rule of law is to protect the weak against the strong. Once we do away with the rule of law as we understand it—once we reach the situation in which the Shadow Minister can tell his supporters not to carry out our legislation, democracy as we understand it is finished.

There are people in this country who would like to see the end of democracy as we understand it, but I issue a warning today. If we reach the situation in which the tacit understanding and agreement between the parties which allows a smooth takeover by one Government from the other becomes in doubt, I warn my hon. Friends that it is not likely to be a takeover by this side of the House. My colleagues will still be reading how to take over the campus when the Conservatives are installed. This is an important day for the Labour Party, because we have so much more to gain than anybody else from the rule of law and adherence to the democratic process.

It has been asked what alternatives can he adopted. I have never believed that because a law exists it is necessarily a good law. All I say is that while it is the law it has to be obeyed, or we take the consequences. But that does not stop us from considering whether we require an amendment to these laws. In the same way, I voted for a review of the law of conspiracy, although I am completely opposed to the two Shrewsbury pickets. I believe that it does not do any harm to consider whether we need new legislation for the future. I believe that today we ought to investigate the whole process of surcharging and come forward with other suggestions for the recovery of this money.

I am not altogether with the hon. and learned Member for Montgomery (Mr. Hopson). Although the people at Clay Cross set out on a course of action, over a long period, to disobey the law and this Parliament, a law which imposes a disqualification for a fixed period should be considered by the courts, in the same way as a court considers an application to restore a driving licence before the period of disqualification has ended after inquiries into the conduct of the person concerned. The important thing, as I see it, is that this should be done not by the Government Front Bench but by a court of law.

My right hon. Friend did not answer my question, which required only a "Yes" or a "No" in reply. For those Members who were not here at the time, I repeat my question. If these were Conservative councillors, would we today put this legislation forward to save them? If the answer is "Yes", it opens up a whole field for people to disobey the law in future. If the answer is "No", it bears out what is being said, namely, that this legislation is purely partisan, to protect certain people who follow a particular party in this country—and that is the worst reason of all for putting any legislation before the House.

It has been asked how this money is to be recovered. The sum involved is Eli million. I am sure that my hon. Friend the Member for Bolsover (Mr. Skinner) will agree with this. I have heard him say often enough that 10 million people in the Labour and trade union movements are behind those involved at Clay Cross.

That works out at 30p per head—not 30 pieces of silver, which I think would be more relevant to people who ought to know better and who are putting forward legislation which they know is a denial of all the things in which they have ever believed while practising in the legal profession.

Before I close, I warn my hon. Friends, for whom I have a high regard and who can or could have occupied the highest legal positions in the country. I speak here to some of my hon. Friends who are in the legal profession and who may aspire to sit on the Bench. What will their attitude be if they support this legislation in the Lobby tonight? What respect or regard will they ever earn when they sit on the Bench, supposedly supporting the rule of law? Perhaps I may parody to my hon. Friends four lines from "The Lost Leader":
"Just for a handful of silver he left us, Just for a riband to stick in his coat, Just for the chance to cling on to office Brought in a Bill that stuck in our throat
I believe that this will be a sad day for this House if the Bill goes through. It will be a sadder day for the Labour Party, which has so much to gain by maintaining the rule of law as we understand it today. It will be an even sadder day for my hon. Friends on the Government Bench who have put this Bill before the House. They will cease to deserve the respect which many of us have given them in the past.

6.27 p.m.

I begin by apologising for my absence earlier this afternoon at the beginning of the debate, but I thank you, Mr. Deputy Speaker, for calling me to speak. I was absent attending the memorial service for a very old friend who for many years has occupied judicial office as a Metropolitan magistrate. I have come here straight from the Temple—the home of lawyers—to raise my voice against the Bill.

I pay tribute to the courageous and noble speech of the hon. Member for Liverpool, Toxteth (Mr. Crawshaw). The whole foundation of the life and liberty of the people of this country depends upon the rule of law. If the two main parties—or any one of them—for party reasons, encourage any of their supporters to break the law and then bring in an indemnification measure they cut at the roots not only of the law under which we must all live—that is to say, the freedom and liberties of the people of this country—but of the democratic process itself, because it is vital to the continuance of good, democratic Government that we continue to be subject to the rule of law.

Many hon. Members this afternoon have dealt in detail with the matter of the Bill itself and I shall not go into those details again, but over the last year in my constituency and elsewhere I have heard an ever-increasing volume of sound from those who are desperately put out by the burdens which modern Government are imposing upon them. The ratepayers are organising themselves into groups to defend their interests. Hitherto, they were determined to defend them by legal and not extra-legal or illegal means. But those very people, talking to their Members of Parliament not only in the pubs and clubs of the constituencies but in halls at public meetings, are beginning to threaten illegal action by withholding their rates and taxes.

In letter after letter to the Secretary of State for the Environment I have made this point. I have told the right hon. Gentleman that people have been encouraged so to act and are praying in aid the action of the Government and of the Labour Party when in opposition, in encouraging illegal activities in defiance of the law by the Clay Cross and other councillors throughout the length and breadth of the land for whose benefit the Bill is being brought in.

The hon. and learned Member for Montgomery (Mr. Hooson) said that on the indemnification proposals he was not wholly condemning the Bill, but he wholly condemned those parts which were designed to remit the disqualification. That was described by one hon. and learned Gentleman opposite as mitigation. The hon. and learned Member for Montgomery described it as punishment.

I submit that it is not punishment. The disqualification of councillors who deliberately and advisedly defied the law and announced that they would do so, is not punishment: it is the removal from public service of people who are unfit to be public servants. This is not punishment of the individuals. This is the protection of the people and of the rule of law of this country. It is not and ought not to be regarded as punishment.

In the Court of Appeal, the Master of the Rolls said that these people were unfit to occupy public office, and so they are. This Bill is designed to give persons whom the courts have said are unfit to occupy office the opportunity of being put back in office. If that is done, how will Members of Parliament be able any longer to tell their constituents: "You must observe the law, because the law is for the protection of the liberties of all of us."?

On the public platform in my constituency on numerous occasions in the last 12 months I have told my constituents, "I cannot and will not countenance breaches of the law by the withholding of the payment of rates." How can I continue to say that when the Government are encouraging breaches of the law by introducing this Bill?

We live in dangerous times. Inflation has created envy and feelings which have never existed in our past between groups and individuals, professions and occupations. People are beginning to feel that their own interests ought to prevail over the general interest. How, in that state of society, can we survive as a democracy if we tolerate a Bill of this kind?

The financial indemnities provided by the Bill are to fall upon ratepayers. What shall we say to the ratepayers upon whom that new burden falls if they, in their turn, say to Parliament, "We do not like this. Why should we pay money to help those who brought this burden upon themselves and upon our communities? We shall withhold our rates."? Right hon. and hon. Gentleman opposite will be among the first to say, "You must obey the law." It will lie ill in their mouths to say that if they bring in this legislation.

I refer back to the time when the present Lord President of the Council, at a trade union conference in 1973, deliberately encouraged these breaches of the law. I suggest that it is as much to save the right hon. Gentleman's face as for anything else that this legislation is being brought in.

The hon. and learned Gentleman has more than once said that the then Opposition—now he names my right hon. Friend the Lord President of the Council —encouraged people to break the law. There is not a word of truth in that statement. It is absolutely untrue, and the hon. and learned Gentleman should withdraw it.

I shall listen to the right hon. and learned Gentleman at the end of the debate to discover whether he can defend the resolution moved by the present Lord President of the Council at the conference to which I have referred. For those reasons, I cannot withdraw what I said. But I say with feeling that outside this House I should refer to the right hon. and learned Gentleman as my friend. I have known him for many years and have the highest regard for his integrity and honour. I ask him, from the bottom of my heart. to think again about this legislation.

6.36 p.m.

We have heard a great deal in this debate, as we have indeed from the hon. and learned Member for Solihull (Mr. Grieve), about the supremacy and the importance of keeping respect for the law.

Some hon. Members have asked what the Conservative Party would do in similar circumstances if it objected to a Bill coming before the House. I prefer not to gaze into the crystal ball, but to look at the book to see what the Tories did. For this precedent I go a little further back than my right hon. Friend the Secretary of State for the Environment.

In 1912 the then Liberal administration were introducing the Home Rule Bill for Ireland. What was the attitude of the Conservative Opposition? Their leading Members—I mention two in particular, because they are apposite—Mr. Bonar Law and Mr. F. E. Smith took part in the preparation for armed resistance in the well-known Curragh Camp incident. I will read what Mr. F. E. Smith said in one of those inflammatory speeches. I quote from a book published under the name of his son. This is important in view of Mr. F. E. Smith's career after that. He said:
"The present crisis has called into existence one of those supreme issues of conscience amid which the ordinary landmarks of permissible resistance to technical law are submerged."
I have no doubt that there were more inflammatory statements than that. In substance, these gentlemen were instigating an armed reistance to that legislation, if it became the law and passed through all its stages in this House, which it did.

In the event, what happened? These gentlemen were not prosecuted for either disaffection or treason. The Government withdrew their measure. They capitulated and subsequently introduced an amending Act.

Surely the hon. Gentleman will not try to justify Mr. F. E. Smith's words. A continuing criticism of the Asquith Government has been that they did not put him on trial for treason and did not put down the Curragh mutiny.

I am not trying to justify those words in the least degree. I am pointing to the attitude of the Tory Opposition at that time. In the light of that statement it is complete humbug for the Opposition to adopt this attitude today towards the rule of law. In 1912 the Tory Opposition, because they did not like a particular Bill, were prepared not only to disobey it, but to incite and, indeed, to organise armed revolt against the Government. Therefore, we have no need to look into the crystal ball.

It is interesting to see what happened to those gentlemen. Was it decided that Mr. F. E. Smith and Mr. Bonar Law were unfit for office as councillors or in any other position? On the contrary, Mr. Bonar Law became Prime Minister and Mr. F. E. Smith became Lord Birkenhead and Lord Chancellor, the pinnacle of the legal profession. Talk about poacher turning gamekeeper! No one suggested that a man who had made a statement such as that to which I referred and incited active resistance to an Act was unfit to hold office. In fact, he subsequently held the highest office in the legal administration. Therefore, in view of what those gentlemen did, right hon. and hon. Gentlemen opposite are totally unfitted to make the criticisms which they have made today.

It may be that the sentiment of Mr. F. E. Smith, namely, that
"The present crisis has called into existence one of those supreme issues of conscience amid which the ordinary landmarks of permissible resistance to technical law are submerged",
is the attitude which some of the councillors who have defied the Act have adopted. I do not say that they are right, but it is a comprehensive attitude.

We talk about the supremacy of the law in a democratic society accompanied by a sovereign Parliament and by councillors who also have democratic rights. Some councillors may think; perhaps wrongly, that, having promised the electors what they would do' about implementing the Act, they were entitled, in accordance with democratic principles, to carry out their promise. I do not say that that is right, but it shows the sort of conflict which exists in this case. There are two loyalties, two bases of democracy. One is the rule of law. The other, which is just as important, is the duty of a councillor to his electors.

Reference has been made to the sovereignty of Parliament, which is very important. Surely the sovereignty of Parliament means that Parliament can change its mind about any law and it can change its mind about questions of penalty. That is an essential part of Parliamentary democracy which is embraced in the examples which my right hon. Friend the Secretary of State gave.

I did not mention it, but it was obvious that the things referred to were done by Conservatives to people who could not by any stretch of the imagination be their supporters. Is not the difficulty here that we seem to be legislating for people who are our supporters?

The point is not whether people are our supporters but whether it is right to do what is proposed. Is this an act of political wisdom? I think that it is, and I agree with those who say that any Government would possibly have had to introduce a measure of this sort. Therefore, the Bill is not in conflict with the sovereignty of Parliament. We are the sovereign body and we are entitled to say what will happen about the penalties imposed.

Hon. Members may say that the Bill is wise or unwise. That is a matter of opinion. I believe that it is wise. I do not think that it will destroy respect for the law. If the only hope of the law breaker is that Parliament will subsequently introduce a Bill to indemnify him, this measure will afford him very little comfort. I do not think that an exceptional measure like this, introduced in exceptional circumstances, justifies the suggestion that it will bring about a breakdown of the law.

It is interesting to observe that the Local Government Act 1933 provides for the Minister to adopt measures such as those proposed. The councillors who are surcharged can appeal to the High Court and to the Minister. The Minister can, if he so desires, remit the surcharge and if he does the disqualification goes with it. As I read the Act, there is no limitation on the powers which can be exercised in the Minister's discretion.

My hon. Friend may recall that in the St. Pancras case of about 1960, which concerned the Rent Act 1957, a considerable number of councillors were involved, some of whom did not go to the Minister for relief or dispensation. However, some did and, although they were all together in the business concerned, namely, an attempt to prevent increases in rents of certain properties, the Minister disallowed the applications of a number of them, but six others continued the argument and it went to court. So the Minister has the necessary power.

He has the power, and it has been exercised. It is not limited to the question of expenditure. Any case of surcharge can be dealt with. The Minister has that right under Section 229(2) of the 1933 Act, and he can exercise it. The Minister can, without introducing a Bill. exercise the power to remit the surcharge. Therefore, what complaint can there be against the Bill when the Minister does not exercise the right but asks the House to approve this legislation?

The people involved—there are many of them; the matter is not confined to Clay Cross and others who might have been involved if the district auditor had proceeded—would not normally be regarded as law breakers. They are honest councillors and are conscious of their responsibilities to their electors. They were doing a large amount of work for no remuneration at that time. It is wrong that their services should be lost to the public even if they have committed a breach of the law.

I therefore welcome the Bill. It incorporates a very sensible policy and I hope that it will prevent this running and festering sore from remaining within the community. I trust that the House will support it.

6.50 p.m.

The hon. Member for Birmingham, Erdington (Mr. Silverman) has entered into a spirited attack on the late F. E. Smith, Lord Birkenhead. It so happens that Lord Birkenhead's sister-in-law lives in my constituency—and that is a privilege. However. I shall not consider it my duty to deal with the charges which the hon. Member levied against the late Earl of Birkenhead, although I shall have something to say about them indirectly in a moment.

I did not make an attack on Lord Birkenhead and Mr. Bonar Law; I simply stated what they did. In their own consciences, they may have considered themselves to be acting correctly.

Perhaps the hon. Gentleman will read tomorrow—if he thinks it worth while—what he said. He will, I think, find that it constitutes something which could reasonably be described as an attack on attitudes held in 1912. The hon. Member has to go back a long way to find my party behaving in a way which he regards as reprehensible—perhaps it was—so as to try to destroy the cogent arguments from this side showing how heinous and wrong the Government's action is today. It is a commentary on the weakness of his case that he has to go back so far and to quote, if such it was, perhaps, some small aberration in a very, very great legal career. To cite an example from 1912 against the validity of our criticism shows the paucity of the arguments in favour of the Bill.

Behind his speech, it seemed to me that the hon. Member was saying that it is not always wrong to break the law. I would go along with him to some extent, but the circumstances in which it can be justified must be wholly remarkable. The law in question must be contrary to certain absolute and fundamental rights—contrary to natural justice. If a law of that kind had been passed there might be some justification in the ordinary citizen's not obeying it. But surely no one suggests that the Housing Finance Act was of that character. I should be surprised if any hon. Member suggested that it was so fundamental as to justify anyone in disobeying it.

This issue was analysed effectively in the Observer by Michael Beloff on 12th November 1974, when he said:
"Mr. Crosland has sought shelter beneath the mantle of natural law. The Housing Finance Act. he said in Parliament, 'infringed the tacit agreement as to what is permissible and what is not. By excluding a large group of our citizens from democratic protection, it offended our basic sense of natural justice.'"
That is the right hon. Gentleman's defence of the breach of this law by councillors of Clay Cross in particular.

The Observer went on to demolish any suggestion that the Act could be so regarded:
"It was passed in accordance with its manifesto by a Government"
—which had been elected properly, according to the constitution:
"It was obeyed by a large majority of those to whom it applied. It increased the rents of better-off council tenants and provided rebates for the poorer. No doubt it was a subject for political debate but in what sense did it defy basic precepts of civilised morality?"
I repeat that question to the Secretary of State now. Does he suggest that as a justification for disobeying this law? Only if the case were so fundamental would any citizen be entitled to disobey the law.

Several hon. Members have already pointed out how dangerous a precedent is being set by the mass of legislation which the Government are seeking to put through the House, which comes far nearer being contrary to natural justice and natural law than does any legislation ever passed by a Conservative administration. What of the rent rebels in future? What of those who object to what is being done in education? Such matters are far more fundamental than anything contemplated in the housing legislation of the Conservative Government. I hope that the Secretary of State no longer persists in suggesting that the Housing Finance Act in any way contravened natural justice, or could be disobeyed with justification.

In my 14 or 15 years in the House I have been much concerned with matters relating to law and order and, in more recent times, with defence from external dangers as well as from internal pressures. We have had a sorry week, in terms of the maintenance of law and order and the defence of our realm. Last week unilateral defence cuts were announced which will undermine and weaken our nation's ability to resist internal and external pressures. This week, with this Bill, I think in the view of hon. Members on both sides, we see an assault on the whole legal system and the sanctity of our laws.

I am sorry that the Attorney-General is not here at the moment, but we have the benefit of having before us what I take to be a true copy of an opinion that he gave to the Home Policy Committee of the Labour Party. I am conscious that the matters then being dealt with were the financial matters, but the Attorney-General's arguments—expressed as one would expect, ably and succinctly—apply just as well to Clause 4 of this Bill as to any financial considerations. I see acquiesence being indicated on the Government Front Bench. If so, what justification can there be for the Bill, especially Clause 4?

The opinion, which has been reproduced in the Sunday Telegraph and elsewhere, says:
"Legislation of the type contemplated would amount to an Act of Indemnity. Such Acts, though rare in British constitutional history, are not entirely unknown. They have been used after the ending of a state of martial law to absolve persons obeying the orders of the Executive in a manner which may be of doubtful validity. They have sometimes been employed to absolve Ministers or others from legal liability incurred due to some excusable error of law."
The opinion then deals with the type of category in which there have been acts of indemnity in the past. None is similar to the circumstances of the Clay Cross case.

I know that the Solicitor-General will pass on what I am saying to his right hon. and learned Friend. The Attorney-General must have given a later opinion to that Home Policy Committee, before this legislation was finally framed. I ask that the later opinion of the Attorney-General, who, I am glad to see, is resuming his place—an opinion which must have been prepared by him for the Government before this Bill was finally drafted—be made available to the House, certainly before the Committee stage. It would be extremely helpful if we could have that later opinion, which must have been expressed since the opinion which the right hon. and learned Gentleman gave to the Home Affairs Group of the Labour Party.

I have searched to see whether there is any precedent for this situation. Erskine May states, on page 422, that
"…it a Minister deems it expedient that such opinions"—
that is, opinions of the Attorney-General—
"should be made known for the information of the House he is entitled to cite them…
That is interesting enough, but the situation takes us back to 1865, and one reads in the parliamentary reports such headlines as "Riots in Ireland", a state of affairs with which we are all too familiar. One reads of an exchange in which Lord Palmerston, who was Prime Minister, was involved. The opinion of the then Attorney-General was quoted in debate, and it was held that that was perfectly in order.

I ask the Attorney-General to be kind enough to indicate how the opinion which we have heard can possibly be squared with the legislation which is now before us, especially Clause 4. It seems to me that is an indemnity.

May I ask the hon. and learned Gentleman a question which is relevant to what my hon. Friend the Member for Liverpool, Toxeth (Mr. Crawshaw) has been saying? He is speaking in terms of dangerous precedents and is attacking our Bill on those grounds. Is it not the case—unless I misunderstood the hon. Member for Aylesbury (Mr. Raison)—that Conservatives also take the view that they should not be vindictive, that they would lift a number of these penalties which have been imposed—the difference being only that the hon. Member for Aylesbury wanted to see precisely what the numbers were and exercise discretion at the time? He also said that an act of clemency or indemnity would have been introduced by a Conservative Government at the end of the day.

That matter is quite different, as is indicated by The Times of today, under the perhaps unfortunate headline:

"Mr. Silkin then and Mr. Silkin now".
In the leader which follows that headline there is set out an alternative, and it is, as I understand it. broadly speaking the sort of alternative which my right hon. and hon. Friends have in mind in dealing with this situation. The leader states that
"In the first place Parliament should not be asked to decide whether to intercept the financial penalties before it has seen exactly what those penalties come to. It follows that the procedure of audit and surcharge should he allowed to run its full course."
So it ought.
"And the Bill should provide that at that point the Minister may submit for the approval of Parliament an amendable Order for the remission of all or parts of the surcharge imposed."
That is different in kind. One sees the specific character of what is liable to be imposed on any single councillor. One might be entitled to allow humanity to enter the situation. That is what we did, as I understand it, in relation to Scotland. One might take the view that if a person is repentant and no longer comes into the category referred to by Lord Denning —someone who has persistently and blatantly flouted the law—if he indicates that he realises the error of his ways, if he is liable to pay tens of thousands of pounds the House may well take a humane view and say, "This man recognises the folly of his ways. He has purged his contempt, and we direct that he shall pay only £5,000." I hope I have explained that this is wholly and fundamentally different in character from the case put forward by hon. Members opposite, with which this legislation seeks to deal.

It seems to me that at this time, when the rule of law is under such heavy pressure in our land, it is a grave error of judgment that a Bill of this character should be introduced, when it is universally condemned, so far as one can see. by all the heavy Press, if I may so describe it, and by the legal journals as well. What is one to say to the students of Essex who support a rent strike? Are we setting a good example by giving an indemnity to people who have flagrantly and persistently flouted the law? Is that a good example to those in Essex who are going on rent strike? What about those who contemplate not paying their rates—though one has the greatest sympathy with them?

One may have sympathy with them, but surely they must obey the law and pay up. I have said so in my constituency, as I am sure the hon. Member for Bolsover (Mr. Skinner) has done. I am sure that he has defended the rule of law and order in his constituency and among his family circle, as I have, but this is Parliament acting against the rule of law and order. It is summed up in the Law Society Gazette, in its final commentary on the Bill, as follows:
"There is no doubt that this Bill is a dangerous precedent. The rule of law is everywhere under attack, and Parliament when it condones breaking the law brings itself into disrepute. A measure such as this can only increase defiance of the law and even make that defiance respectable though it ought not to do."
I concur in every word of that.

7.7 p.m.

Having listened to this debate for several hours and having heard the many references to respect for the law, I must say that I find it rather strange. What the people are saying in the ordinary working-class environment in my constituency is that Parliament is doing itself a grave disservice, in view of the report of the Select Committee last week. They find it incredible that a man should have openly boasted, as he has done to the Press and the other media, of engaging in cheque-book journalism, and should treat this House and Parliament generally with complete disrespect.

It seems to be a different world from that with which we are concerned today. I believe that we ought to consider sympathetically why the Clay Cross councillors did what they did, against the existing background. In Clay Cross it was to be expected that this situation would occur, not because anybody had been going round the area night after night cajoling and persuading people to break the law and not pay rent but because the people had been told for many years that local authorities had had freedom to levy their own rents since 1919, or whatever the year was, and they expected their local councillors not to implement rent increases unless it was a bsolutely necessary.

That was the pattern. It had been established. So the people of Clay Cross quite naturally responded readily. Every person was involved, on all the estates. They did not find it incredible that they were taking part in this exercise. The many who belonged to the churches in Clay Cross—the Church of England; lay preachers in the Methodist Church; sides-men in the orthodox Church; even Jehovah's Witnesses, who refuse to take part in elections—all of them did not pay their rent. It never crossed their minds that what they were doing was breaking the law. No one went to the Chancellor of the Exchequer, who was due to receive half of this money anyway, and said, "Look, I think that our councillors are somewhat misguided. I am a Christian, an honest, principled man, and I do not want to take part in this exercise." No one would give in to the Tory Government. They carried on for 80 weeks.

I shall give way, but 1 warn the hon. Gentleman that he had better be careful.

If the hon. Gentleman is maintaining that his rebellion at Clay Cross had the virtually unanimous support of Clay Cross, can he explain why a Labour Party candidate has just lost a county council by-election in North-East Derbyshire by a vast majority of over 500 votes, to an independent Conservative?

The by-election was not lost in Clay Cross. What happened in Clay Cross—I shall refer to it later—was something very much different. The by-election was lost in an adjoining ward for reasons I do not want to go into now[HON. MEMBERS: "Oh!"]—because they have nothing to do with Clay Cross, and Mr. Speaker would very promptly remind me that they are not part of this debate.

Having tried to put this matter in a proper perspective, I want to deal with some of the points that have been made in the debate. Very many points have been raised and I hope that you, Mr. Speaker, will bear with the many remarks I have to make.

First, the question has been raised why my right hon. and learned Friend the Attorney-General made remarks and gave advice to the National Executive Committee or the Shadow Cabinet of the Parliamentary Labour Party way back in 1972, and why Opposition Members tend to get the impression that the advice is somewhat different now. I suppose that I should be the last person to have to stand here and back my right hon. and learned Friend the Attorney-General. I am sure that he can do it very well himself. However, I suggest to Opposition Members that they ought to read the small print, because there was much small print in the Housing Finance Act.

It hon. Members look at the words used by my right hon. and learned Friend, they will find that he has covered every point. He talks only in terms of finance. He talks about recompense. He never mentions any question of disqualification. Although, quite naturally, I want him to carry out the conference Resolutions Nos. 191 and 192 and not to impose the increases upon the ratepayers and rent payers in all the various authorities up and down the country, the fact is that when he answers the debate tonight his problem will not be as difficult as some hon. Members of the Opposition believe. Sixteen times I have read what he said. I wanted to find something else in it. It was not there.

The Bill does not go far enough. There would be only limited amounts of legislation at any time that would go far enough for me, be it on this sort of matter or anything else. I regard my rÔle, therefore, along with some of my hon. Friends, as being to continue to push the frontiers forward. Sometimes we manage that, but on very rare occasions indeed. Mostly we are trying to push them forward, and we fail. We failed on this occasion.

I find it almost incredible to read the lunatic editorials in the posh weeklies and dailies, as I have been doing lately, from which one gets the impression that my right hon. Friends, steeped in orthodoxy as they are, are now actually in the process of setting some alarming precedent which will create violence in the streets and all the other sorts of things that have been mentioned earlier. It is not so. My right hon. Friends have mentioned many precedents before. I do not want to repeat them. I am sure that my right hon. Friends would not expect me to do so—except just to embellish the example of the Lansbury case and to say that it is almost identical in many of its forms. My right hon. Friend referred to the later stages of that and the way in which it had been finally disposed of. But long before that it had a great many similarities to what took place in relation to the Housing Finance Act. The Tory Government of the day and all the various Ministers turned a blind eye not just for a day and not for a month but for several months, to the policies of the council in Poplar which were being carried out at that time. They did not implement one order. They were doing it continually, over and over again.

Just as the Tory Government of 1972–73 turned a blind eye to what was happening on most occasions, so did their predecessors. A Left-wing Minister, I am told—how Left I am not too sure—a Mr. John Wheatley, came to the Front Bench in a minority Labour Government and had to remind Mr. Joynson-Hicks, I believe—it was a posh name—what he had been doing or failing to do during the course of the previous several months when he had been turning a blind eye to the rebellion that had taken place at Poplar.

Let no one get the impression—those hon. Members who have not read the Lansbury case—that the people involved were in any way different from those at Clay Cross, or those in the other authorities who went along part of the way. They marched to prison. They had the band playing. It was very reminiscent of what took place on this occasion. It was a somewhat gay scene. They went to gaol. They made it abundantly clear, just as the people of Clay Cross and others did, that they would not carry out these orders. When they were brought out of gaol six weeks later they did not knuckle under. They said the same things again. They got a solicitor to stand up in court and phrase it in such a way that it could mean all things to all men. But they carried on.

So, as for precedents, I suggest this to my right hon. and hon. Friends who regard the Bill as dangerous and adventurous: forget it. It has been happening all the time. For those in my constituency and most Labour supporters up and down the country, the biggest scandal that this Parliament has presented to them during the past few weeks has been that with respect to the right hon. Member for Walsall, North (Mr. Stonehouse). That they understand. They do not understand the treatment of people of principle and integrity, such as those at Clay Cross, Camden and all over the place, who stood up and were counted, some for a long time and some for a shorter period. They stood up and were counted not on the basis that they wanted to be martyrs but because they had a principle. They had a mandate from the people and the backing of the whole Labour movement. When they travelled along that road they did so in the knowledge that they were carrying the torch not for themselves but for the movement in order to defeat a piece of class legislation. That is what we must understand.

There were many other councillors wanting just as keenly to protect those who had elected them and who decided to take constitutional action, in areas such as Lambeth, and others throughout the country—organising, agitating, holding meetings. As a result of such agitation, important concessions were made to the Act. Their action was successful and not illegal. Therefore it is quite wrong to suggest that what happened in Clay Cross was highly desirable and that what others who were law abiding did was wrong.

I am about to deal with the point of my right hon. Friend the Member for Vauxhall (Mr. Strauss). He will never hear me make any inference about those who carried out the law as it stood. I heard, as I am sure he did, from many of the Labour councillors who carried out the provisions of the Act—they said it with a heavy heart—that they had to carry them out because there seemed no option. Many of them did it, despite the fact that they had voted against it, because there were not sufficient of them to carry the day. In some isolated cases those Labour councillors who voted against it could not carry their councils because there were Tory council members who, together with others, comprised the majority. That was the picture. I do not disparage the attempts of any of them. They were given conflicting advice, so I was not surprised that some took the course my right hon. Friend suggested.

Like me, my right hon. Friend cannot understand why certain amendments were brought before the Committee on the Housing Finance Bill. There were amendments. I cannot say that that is because of the attitude in the area represented by my hon. Friend the Member for Derbyshire, North-East (Mr. Swain). I cannot say that we have now got rid of the Housing Finance Act, that it has been scrapped, as a result of their action. Like all class actions, this can never be measured. I wish to make it plain that my right hon. Friend cannot use the argument that, because certain councillors took a certain course, certain changes were made. I tend to put my money on the other group of horses, but I cannot always be sure.

We have to consider what this fight was about. Some people have tended to forget what the Housing Finance Act represented. It represented Government-sponsored legislation and its aim was to send property prices rocketing.

The hon. Member is very selective in his reference to a mandate. He said that the Act was Government-sponsored legislation. Was it not Government-sponsored legislation that was accurately foreshadowed in the 1970 Conservative Manifesto and in those circumstances was there not a clear national mandate for it?

I am pleased I gave way to the hon. and learned Gentleman. I was told to give way to him, in some other form. I was struggling to get on to another important point. It can be argued—I would not argue it too strenuously—that the 1972 Act, which was Government-sponsored legislation to promote inflation, was a violation of another part of the Tory Government's mandate at that time. In its manifesto the Conservative Party said that it would do its best to have less Government interference in the freedom of local authorities to operate. That was stark and clear. The Conservative Government did the opposite. It could be argued that the Conservatives said that they would have a change in the subsidy system. They did. But they did not tell the local authorities or the people they were asking to vote for them that they would strangle local authorities. That is why, at the outset, many local authorities which had Tory majorities said clearly and forthrightly to Tory right hon. and hon. Members that they could not stomach it. They knew what the consequences would be. I believe there would have been a rebellion of some size amongst local authorities had not the Act been so distasteful that it resulted in many of those Tory councillors losing their seats in the first few months of the Bill going through Committee.

It has been suggested by some hon. Members that the Clay Cross councillors defied the law. However, before those councillors carried out the policy to the bitter end, they made certain that the Secretary of State for the Environment knew precisely what they were doing. They told him in no uncertain terms that he had a duty to collect his own £1 a week. They said that they had a moral obligation to carry out the mandate they had from the people. The net result was that the Conservative Government refused to carry out that part of the Act, which would have resolved the problem.

Some hon. Members have referred to legal documents and esteemed lawyers who have remarked upon this matter. Another article has been published in fie issue of the New Law Journal for 13th February 1975. It is probably one of the most up-to-date references. This is not the authentic voice of the New law Journal, whoever that represents The article is written by a solicitor, barrister or somebody with legal knowledge. It says:
"There is a rule of statutory interpretation which applies in many jurisdictions and for which there is some authority in England: where the legislative body has provided sanctions in an enactment"—
similar to the one of sending in a housing commissioner—
"…it is the presumed intention of the legislature that those sanctions and none other should be used to enforce it unless the enactment expressly states otherwise".
This piece of legislation states that there are three ways of enforcing local authorities to toe the line. One is to send in the housing commissioner, the next is to withdraw subsidies and the third is to ask the district auditor to take an extraordinary audit. Mr. John Parris, the author of the article in the New Law Journal, says that it would be expected in English law that the sanction of sending in the commissioner would be used and not that by which the district auditor, who in some respects does not carry the force of law, was asked to intervene. However, in this case the district auditor was called in. What a farce that was.

It can be argued that it is not a question of the technicalities and that it does not matter what happens at the audit, that what really matters is what Lord Denning said and what people in wigs and gowns say. It matters what Parliament thinks. Parliament is supposed to be a sovereign body—I do not like using that word, but that is what I am often told. Parliament has a right to know the technicalities.

When the district auditor, Charles Lacey, carried out that audit, he got in a mess. He was cross-examined by my hon. Friend the Member for Derbyshire, North-East. I do not want to criticise the district auditor too much, but he could not calculate the appropriate sum. He could calculate how much rent was missing, which was an easy job. All he needed to do was to calculate over six weeks, multiply it by the number of houses inhabited at that time, and arrive at a figure. But he had other important problems with which to deal. Mr. Lacey had an imponderable question to resolve, namely, how much would have been paid out in rent rebates if rent rebate had been paid—and none had been paid.

Would my hon. Friend agree that at the audit it was stated categorically by the treasurer of the local authority that the real rent rebate in the area was 50 per cent. although it was proved beyond doubt that that figure was completely false and nobody knew what it was?

My hon. Friend examined Mr. Lacey closely on this matter. I tell the House—and it has been said outside and has never been challenged —that when the auditor said that he was removing a sum of £1,000 in respect of rent rebates from the total of approximately £7,000, he was challenged by my hon. Friend who said that that figure was extremely low for an area of low wages, and the auditor changed it. The auditor then said "I am referring to the £1,000 that is to be paid by the ratepayers. That is 10 per cent. of the amount."

So a quick calculation—anyone can do it—showed that the district auditor was saying—he has said it and has put it in writing—that what the Clay Cross councillors did was to save the ratepayers and taxpayers combined £2,015 for every six weeks that they failed to comply with the Act. That is in the documents. It has not come out of Labour research. It is not contained in any Marxist document. Throughout the whole of the rebellion the Clay Cross councillors saved £25,000 to £30,000, according to the district auditor, whom we must believe.

I always thought that the district auditor or any auditor was there to examine the books and to see whether expenditure balanced income. They used to tell me that that is how it was done in the National Union of Mineworkers—that every halfpenny had to be calculated. Even at the Bestwood Working Men's Club they had to balance the books. Charles Lacey could not do it. He guessed.

The hon. Member for Aylesbury (Mr. Raison) had the effrontery to accuse my right hon. Friend of introducing the Bill before it had been properly considered and before the amount can be calculated. I say to my right hon. Friend in the nicest possible way that it never can be calculated. The rent rebate element is an imponderable that can never be calculated to the last penny. the last pound, or perhaps even the last £1,000. It cannot be done as it was not enacted in the first place. That is the kind of technicality with which we have to deal. It is part of the nuts and bolts.

I say to my hon. Friends, to aid them in considering whether we can tread through the Lobbies in support of the Bill this evening, that the argument is full of holes. It has always been full of holes. That is apart from the fact that there are countless precedents all along the line.

Let my hon. Friends compare the attitude of the previous Tory administration on this with their attitude towards those who were defying the Companies Act day after day in that they did not send in their registrations, not for one year, nor for two years, but for three years. Let my hon. Friends compare this matter with the statement by the previous Home Secretary—the right hon. Member for Carshalton (Mr. Carr)—who said in a Written Answer. replying to one of my hon. Friends, that he would not enforce the relevant Act. having recounted that there were hundreds of companies defying the law by refusing to register. That was the right hon. Gentleman's kind of class legislation. That mattered to him. That is what it is all about.

The right hon. Gentleman went on television on 13th October, just as the Tory Party Conference was coming to a close and when he was in one hell of a mess about the influx of Asians into this country. I applauded him on that occasion. What did he say on television when he was caught in a trap like a fly in a spider's web? The right hon. Gentleman was surrounded by members of the Monday Club who had been hostile to him right round the programme. He said on television—it is there for everyone to check—" At the end of the day moral obligations are more important than legal obligations. Upon that I will decide the issue." Upon that the right hon. Gentleman did decide the issue.

Let us have none of this nonsense about Parliament's power. If it has the will and the guts, it can carry through measures of this kind. How many local authorities flew in the face of the provisions of the Chronically Sick and Disabled Persons Act which was passed under the previous Labour Government? How many local authorities are still defying that legislation? Countless pieces of legislation have been defied.

So we had the punitive action by the Tory Government. They were not content with trying to get their legislation through. Had they been concerned about getting their legislation complied with in Clay Cross and other authorities, their first action would have been to send in a commissioner, as the Secretary of State for Wales had the good sense, as some would argue, to do. The net result of the action by the Secretary of State for Wales was that the kind of confrontation that arose in many local authorities in England did not arise in the two Welsh local authorities for any length of time. The right hon. and learned Gentleman was more concerned with getting the Act operating in Wales. To some extent it can be argued that he succeeded.

I think that I succeeded. I put the housing commissioner in at Merthyr Tydfil and after a short period Merthyr Tydfil council decided to administer the Act. I put the housing commissioner in at Bedwas and Machen. There the council remained recalcitrant until the end, but the commissioner managed to operate the Act, although there may have been one person who refused to pay his rent. Therefore, it can be said that the Act was operated successfully in Wales.

Does the hon. Gentleman accept that if the housing commissioner is put in it is impossible for him to operate in a hostile atmosphere, if he receives no co-operation from the council or the council officials? Can the hon. Gentleman, who claims to deal with this with complete honesty, say that Clay Cross was prepared to co-operate with a housing commissioner if one had been put in? If the hon. Gentleman can say that, how does he reconcile it with a resolution which was passed by the council on 2nd September 1972 instructing its officials that they were not to help the Government on the question of the housing commissioner?

This is a very important question which I must deal with. It is true, as the right hon. and learned Gentleman intimated, that a housing commissioner was eventually sent in. That was after the other sanctions had been used, after the Clay Cross councillors had been dragged through the courts.

I am answering. I know that the right hon. and learned Gentleman is not very happy about what is happening today and that he must go through the Lobby with his right hon. and hon. Friends, but he should not get too impatient.

The Clay Cross councillors having been dragged through the courts and having suffered the kind of language from Lord Denning that they endured—not that it mattered too much—the then Tory Government—it was not the right hon. and learned Gentleman, but it was somebody in the Tory Cabinet—decided that perhaps the right hon. and learned Gentleman's idea was not too bad, after all. So the Tory Government sent in the housing commissioner. However, at that stage it was almost a direct challenge. The council was more or less saying, "The Government send in the district auditor, hang the £7,000 surcharge round our necks, and do nothing for nine months." That is what happened. The Tory Government allowed matters to go on for nine months and never bothered to collect rents from all the lay preachers and others who were occupiers of council houses. Even the clerk of the council was a council house resident and, although he was an upholder of the law and was very upset about the housing commissioner business, he did not pay his rent during those nine months.

No, I will not give way. The right hon. and learned Gentleman has had his say. I am telling him now in no uncertain fashion. Those concerned wrote to his right hon. Friend the Secretary of State for the Environment, the right hon. Member for Worcester (Mr. Walker), and told him that he should come and collect the money. The Bill was then in Committee. They said that they would not collect the excess money. They told him that they had reason to believe that under certain sections of the Act the right hon. Gentleman would be able to collect his own rent. They said in the nicest possible way—I have a copy of the letter—" Come and do it yourself".

Some people get mistaken about dates. They seem to have the impression that Patrick Skillington came in to collect the rents at the beginning of the affair. I have to remind my right hon. and hon. Friends that that was done at the very end of the saga. That is when they had been dragged through various courts of law in an unsuccessful attempt to obtain justice.

No. I am delivering my coup de grâce. If these people at Clay Cross had been guilty of obstructing the housing commissioner, why is it that the right hon. and learned Gentleman and his friends in the Cabinet did not implement the part of the Act that says that obstructing the housing commissioner involves a fine of £400? They had three months in which to do it. We can only come to the conclusion that the Cabinet, or those pulling the strings, decided that it had better not fine. Perhaps it came to the conclusion—Patrick Skillington was resident only five miles away in Chesterfield—that he was not being obstructed.

Mr. Skillington was not being obstructed by many tenants. There were not many people obstructing him. If there was any question of obstructing the housing commissioner, why is it that the Conservative Government did not implement that part of the Act that would have entailed a £400 fine for each of the councillors involved?

The point that the hon. Gentleman makes is that the Government of the day did not pursue a certain part of the Act and did not put in a housing commissioner initially. Does he think that the Clay Cross councillors would have co-operated with the commissioner? It is quite clear from what he has said that he knows very well that they would not have cooperated. I put in—and this was the difference—housing commissioners in Merthyr Tydfil and Bedwas after I had received an assurance that both of those authorities would co-operate. Indeed they co-operated to the full. That would not have happened in Clay Cross. and the hon. Gentleman knows it.

The right hon. and learned Gentleman is wrong again. When the councillors sent a letter to his right hon. Friend the Secretary of State for the Environment they told him in forthright terms to send in the housing commissioner. They made it public that he would not be obstructed if he came. That was the position in April, May and June through to September, October and November 1972. The right hon. and learned Gentleman will probably be able to find a copy of the letter if he makes inquiries at Marsham Place or if he asks his right hon. Friend the Member for Worcester to supply one. He will see that the letter that was sent to his right hon. Friend made it abundantly clear—in fact, the councillors made this clear at a council meeting—that they would not obstruct.

The matter then went before the courts. I do not want to argue precisely what happened, save to say that there is no doubt that there is a law for one section of the community and a law for the others. That has been said in this place and outside by many people on many occasions. It is clear that when the council. lors went to court there was not much of a chance for them. I do not know whether it is treason to say so in this place, but my view is that when the establishment calls the tune it undoubtedly calls the tune. Perhaps it could be argued that that is happening today in another sense. I do not want to go into that at this stage.

It struck me from the beginning that arms were being twisted in the Treasury chambers to get the case heard at an early stage. It did not have to take its place in the queue. Somebody called the Master of the Rolls, or somebody acting on his behalf, saw to it that it was put at the top of the list in early January 1974. The matter was then dealt with—it was all wrapped up, signed, sealed and delivered. As I said earlier to my right hon. and learned Friend, that is contrary, as good a European as he is, to Article 21 of the Declaration of Human Rights. It is all there and my right hon. and learned Friend knows it.

Perhaps we should now reflect upon what has happened since. If the Act was so good, why is it—I have to ask myself this question over and over again —that the Tory Party did not include it in its October election manifesto? The Labour Party managed to get a minority Government in February. That Government froze the rents. A statement was made that the Government would deal with this detestable Act. If it was so fine and glorious, so wonderful and healthy for the people, including council tenants, why did not the Tory Party make a strong declaration in its October election manifesto, when it was making so much noise about national unity, that the Act was to be one of the totem poles around which the supporters of national unity were to dance? Of course, it did not do so. It knew it was dead. It had been killed. I cannot say precisely in what way it had been killed or to what extent the pressure from all the various quarters involved had contributed to its death, but we all knew that it was dead.

All that we are doing today is cleaning up the entrails, cleaning up the mess that was left behind. My right hon. and learned Friend is correct to be doing what he is doing in the limited fashion that he has adopted. However, he has made such a good case for us this afternoon in quoting all the precedents and embarrassing the Opposition to such a great extent that it seems that he could have gone the way in which some of us inside the Labour movement would have wished—namely, to write the lot off and to remove this sad feature from a chapter of our history.

The Housing Finance Act has gone. Some commendable measures have been carried out in the meantime. The Housing Rents and Subsidies Bill is an improvement. It is not as good as some of us would wish and we shall do our very best to improve it. I still say that we should have gone the whole way and ridded ourselves of the last vestiges of the Tory confrontation policy.

I finish with a few words about the people who have been vilified today as they have been on so many occasions over the past 12 months. That vilification can almost be calculated on a ready-reckoner basis. There was a time when some newspaper said that the councillors were men of principle and integrity. The fact is that they have not changed. They are still the same people. They have never claimed the £10 allowance. They never organised conferences to the seaside. But what has happened as each day has passed and as each succeeding month has elapsed? This is a true story of men acting in accordance with their principles and integrity. That has been clouded by the myth and by the lies that have superseded it. We now read of acts of illegality in the Sun newspaper.

That suggestion comes from the same stable that is now paying out thousands of pounds in Australia to the right hon. Member for Walsall, North on behalf of theNews of the World. We are not hearing the real story of the people who decided to get rid of the slums in an old industrial town. There is hardly a slum left. The slums were cleared in the 1960s when many people were merely talking about removing slums and building houses. When all the talk was taking place we were knocking down the slums and rebuilding. If the same action had been taken nationally we could have built 800,000 council houses a year. We were introducing free television licences for the old age pensioners. What did we do when we read stories of old age pensioners being found lying dead for five days because nobody was visiting them? What was done by these people of integrity and incorruptibility? They set up a comprehensive warden scheme for every old age pensioner in all their tenancies. Everyone of them was covered day and night.

That is the real story. It has not changed, and the people have never changed. They are the same people as set out from the start, with the help of many others in the trade union and Labour movement, to remove this piece of class legislation from the statute book. They did that because the people behind them—and there were a lot of them—were saying "Carry on. You are doing right. Conscience is more important than the rule of law".

That is what those people did, and that is why all of us on this side should be defending them in the House today. I only wish that my right hon. Friend had carried his Bill a little further.

7.50 p.m.

It may seem surprising, but I found myself almost beginning to agree with some of the opening remarks of the hon. Member for Bolsover (Mr. Skinner), though I did not think so much of thecoup de gròce, as he called it, or the four or five perorations which followed it, or of anything in between.

The hon. Gentleman spoke with great passion. Does he not appreciate that there are those who believe with just the same passion in the rule of law and the age-old truth that it is the law alone which protects the weak from the strong? Does he not realise that there are principles just as important as those to which he referred in which others believe just as passionately as he believes in the principles of which he spoke?

The hon. Gentleman failed to come to grips with the real problem, and he demonstrated that so much of what he said was riddled with, and was motivated and distorted beyond measure by, a class hatred for which there is no place in this country today. The degree to which the hon. Gentleman allows those feelings to distort his thinking was evidenced many times over, but I take just one example. He referred to the Housing Finance Act as a piece of legislation designed to bring about rocketing prices. Did he not hear one of his own hon. Friends point out that the main feature of the Act was to ensure that those who could afford to pay a little more should pay it, and those who could not afford to pay so much should pay a little less? How can a mind become so distorted and so twisted as to misinterpret a piece of legislation in that way and describe it in the terms which the hon. Gentleman used?

I suppose that we should not be surprised, because we have learned over the years to recognise those characteristics in many of the hon. Gentleman's speeches. But what is more surprising and more frightening is to find people such as his right hon. Friend the Secretary of State for the Environment apparently not looking the issue straight in the face. The Bill has been described as shabby, shameful and sordid—and it is all of those—but the fundamental reason why we should throw it out lies in the danger to democracy which it presents.

The hon. Member for Liverpool, Toxteth (Mr. Crawshaw), in a courageous and cogent speech, developed that theme. I disagreed with him on one matter only. Referring to his hon. Friends and those whom they represent, he said that they had more to lose, perhaps, than did we on the Opposition side and those whom we represent. It is not a question of who has more to lose. We all have all to lose. We may lose all that we cherish in the tradition of parliamentary democracy if we start on and follow this road.

My hon. and learned Friend the Member for Solihull (Mr. Grieve) developed the same theme with different examples, and the hon. and learned Member for Montgomery (Mr. Hooson) and my hon. Friend the Member for Aylesbury (Mr. Raison) did likewise.

The House ought to realise that there has never been a time when it was more important—there have been other times when it has been as important, but never more important—for those in authority to show that they recognise that our country's laws must be observed and that those who fail to observe them must take the consequences of that failure. In particular, it is of the utmost importance that those in authority recognise that that applies especially to those who are themselves in a position of authority.

That simple proposition, taken with the simple facts of this case, must lead one to an equally simple conclusion—that if ever there was a case in which the principles which I have enunciated should be observed and in which those who break the law or fail to observe it should suffer the full penalty for so doing, it is this case.

Here there was open and deliberate defiance of perfectly clear laws. Of course they were clear. That is why they were defied—because those who defied them did not like their clear effect. Moreover, it was defiance of the law by people who had taken an oath to carry out the law, to perform the duties it imposed upon them. And it was defiance on political grounds and for political purposes. If ever there was a set of circumstances which ought to bring into force the full penalties and consequences provided by the law, this is it.

The hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman), and, I believe, his hon. Friend the Member for Birmingham, Erdington (Mr. Silverman), suggested that the penalties should be mitigated. The hon. Member for Erdington, I believe, said that the public should not be deprived of the services of these men. Heavens above—is it not more realistic to say that the public should be protected for a period of five years from those who openly and defiantly disregard the oath which they have taken and show that they are not fit for public service, until they have had a substantial breathing space to get their ideas sorted out? The Master of the Rolls did no more than state the obvious when he said that these men were unfit for public office and that they should get out straight away and hand over to people who are.

One should always temper justice with mercy, and those who have to decide such matters should always see whether there are mitigating circumstances as a result of which penalties should be lessened. But no such circumstances exist in this case, and it should not be difficult for anyone to recognise that if he is prepared to look the facts in the face.

I am sorry that the Attorney-General is not here at the moment. I say that in no critical sense, because I realise that he has to leave the Chamber from time to time, but I regret his absence because I would rather say in his presence what I now have to say. I echo what has been said by others. I want no part of any vendetta against the Attorney-General, waged from any direction, and I hope that it will be apparent from what I have to say that that is so.

It seems to me that the view which I have expressed was at one time held by the Attorney-General. But what have we now? How did the Secretary of State seek to get away from the view expressed by the Attorney-General, among others, at an earlier date? The right hon. Gentleman referred to a number of previous Acts of indemnity. I hope that others will deal with those in a little more detail, because I have reason to believe that they were not very good precedents and would not take one far in any court if one were to rely upon them. I wish only to draw attention to the fact that the Attorney-General was well aware that there were precedents—there have been several references to his opinion—and it is clear there that he was not influenced by them, and quite rightly in my view, not influenced by them, because they have no bearing on the issues before us.

It has been said that in that advice the Attorney-General was referring only to the financial penalties, and I think that that is right. But I do not think that that is in any way conclusive of the argument, because it is clear that if the right hon. and learned Gentleman had been asked about the disqualification as well his answer must have been the same. Had he been asked, in such circumstances, whether a councillor should be relieved of the disqualification which he suffers as a matter of law, and knew before he started that he would suffer, surely his answer must have been the same. Surely he should answer the same to that question as to the other and for the same reason. Surely it must be "No", because here too it would be "contrary to all constitutional practice", it would "set a dangerous precedent" and it would "encourage others to break the law."

The line of reasoning which led the Attorney-General to the conclusions expressed in his opinion, with which I respectfully agree wholeheartedly, surely leads to the same conclusion and to the same answer, namely, that disqualification should not be removed. The Attorney-General has served the law with honour and distinction. Now he serves also this House not merely the Government of which he is a member, although he has duties to it. Tonight he has the opportunity to perform a very real service to the House and to save the law that he has honoured, the country he has served and democracy wherever it may be practised, from the disgrace it will suffer if the Bill is passed. I beg him, even at this late stage, to take that opportunity.

8.3 p.m.

I wish to deal with Clause 4 and to say something about the consequences of political action. Any man, whether he is a Member of Parliament, a district councillor or a member of a political party, should be ready and willing to accept the consequences of political action. When people take political action, whether it is inside or outside the law, they should be ready and willing to accept the consequences of that action. For that reason, Clause 4, dealing with the termination of disqualification, is entirely unjustified and unreal. If the clause has not been removed in Standing Committee we shall vote for its removal on Report. It is incorrect, undemocratic and anti-social. The consequences of political action should be borne by the individual or the party concerned, and for that reason the people affected by that clause should be ready to bear the consequences of their action.

We do not believe that the general ratepayers should have to suffer the consequences of rent being charged at a level below that required by the law. The burden should be placed where the law at the relevant time intended it to be placed. It has been suggested that there should be a five-year spreadover period during which the rent could be recovered from the ratepayers. This is unjust It would be better if the rent payers who were originally intended to pay the increased rent were to pay a small increase for whatever period was required to recover the lost rent. That would be a fairer approach to recovering the money, and the burden would be borne where the law at the relevant time intended it should be borne.

There is no analogy here with the Northern Ireland rent strike, since the Clay Cross tenants were not in default. The Northern Ireland rent strike has been operating for years and has cost the Housing Executive millions of pounds. It was supposed to have been an ideological stance taken up in response to the introduction of internment and detention without trial. However, a large percentage of those engaged in the rent strike are, I believe, hugging to themselves the fact that they have been relieved of a financial burden. They believe that at some time in the rosy future, when the troubles of Northern Ireland are sewn up and the present rebellious state of affairs has been ended, they will get an amnesty. They expect that all the money that has not been paid in this rebellion against the law and against authority will be written off and they will gain financially.

The other day I heard a man admit that he owned the Housing Executive £458 for rent alone, excluding rates, and so on. He said that he did not know when he would be able to pay. Unforunately, the rent strikers were encouraged by men who should have known better. In the early days of the crisis I witnessed a scene in which a man who later became a member of the Executive, with responsibility for housing and local development was haranguing the crowd, encouraging them to break the law and march on Dungannon in defiance of the law and the authority of the State. In the course of his speech he said something that gives a key to part of the rent strike in Northern Ireland. He said "Take every bloody penny off them." That seems to be the attitude of a number of people who are often called the downtrodden minority in Northern Ireland. The idea is to get everything possible from the State— to rob it to the hilt. That sort of action is considered to be a form of patriotism in some quarters.

There is therefore no analogy between Clay Cross and Northern Ireland. The people in Clay Cross are not personally responsible, and we believe that the general ratepayer should not have to pay the burden that has been created. Since large sums are involved—as yet not fully determined—and since they are not recoverable by surcharge, we believe that the Government are entitled to legisiate for the extinction of the deficit. They are within their rights, and therefore we shall not vote against the Second Reading.

8.9 p.m.

We have heard some fascinating speeches today. I hope that the hon. Member for Mid-Ulster (Mr. Dunlop) will consider it no reflection on his speech if I say that the most fascinating speeches came from the Government side of the House. We had a magisterial speech from my right hon. Friend the Secretary of State for the Environment. We had a triumph of endeavour and sincerity from my hon. Friend the Member for Bolsover (Mr. Skinner)—atour de force. We had a very fine contribution from my hon. Friend the Member for Liverpool, Toxteth (Mr. Crawshaw). His speech was in the ultimate sense unanswerable. The general principles he outlined about the rule of law must in the final analysis be valid. I criticise what he said in one respect, however. I think he pitched his speech far too much in black and white terms.

That may be because he is a lawyer, and we have heard a little too much from the lawyers during this debate and perhaps we should now hear the views of someone who is not a lawyer but who none the less took part in the Standing Committee that considered the Housing Finance Act and the subsequent debates in local councils about whether to implement that Act. I speak as someone passionately interested in whether the rule of law was involved in this issue quite as centrally as some Opposition Members have maintained.

It is not quite as black and white as my hon. Friend the Member for Toxteth put it. As the issue came up in the long summer that preceded the implementation or non-implementation of the Act, it was not to the councillors involved quite such a black and white issue, quite such a stark issue. They did not see it in terms of defying the law or the courts. They saw it as choosing between two alternatives in the Act—between applying the law themselves as ordinary councils, or asking the Government to apply the law by means of a Housing Commissioner.

There were the clear alternatives set out in the Bill, and the councillors—and I remember many discussions—regarded themselves as choosing between two alternative legal forms of applying the rule of law, between whether it was to be done by them as councillors violently opposed to the Act, or by a housing commissioner sent down from Whitehall. That was the context in which the arguments throughout the country went on. With certain exceptions, it was not at any stage regarded by the vast majority as involving any defiance of the rule of law.

Not only that. For the 400 councillors with whom the Bill is mainly, indeed, almost exclusively, concerned, the situation is even more complicated. This is because of the changes relating to the so-called Newcastle amendment. As a result of that, it seemed to me, as a member of the Standing Committee, that the calculations were changing from day to day or at least week to week, and those calculations decided the financial effects for council tenants.

The Newcastle amendment meant that rents could not be put up in October to a point beyond that which the Act defined as a fair rent. Once it became clear, as it had first become clear in Newcastle—where rents had gone up remarkably over the past four or five years under a Conservative-controlled council—that there was need for an amendment, the Government had to act. But they acted very late in the day, at a very late stage in the Standing Committee. They had to put through amendments that changed the calculations in the Bill and enabled almost every council to entreat the Secretary of State to treat it as a special case, and consequently most councils did. My own council at Gateshead put in its claim, as did most others.

All the calculations in about July and August of that year, only six weeks or two months before the Act had to be put into force, had to be made again. I would not put the blame, as theEconomist did, on the dilatoriness of the then Secretary of State, but on the sheer confusion he caused. The resulting delay could be blamed on the Bill.

On those grounds councils felt not that they were involved in a clear defiance of the law but that they were dealing with confusion resulting from the implementation of the Act, and the constant changes in calculation led to this situation. Many councillors and councils found themselves technically and almost accidentally in defiance of the law, but finally many of them deferred to the law and put the Act into operation.

I do not think therefore that the Opposition have sustained their case on the major part of the Bill. Those of my hon. Friends, such as my right hon. Friend the Member for Vauxhall (Mr. Strauss), who have objected to Clause 4 agree with the Government case for the major part of the Bill. I find it strange that the only specific argument that the hon. Member for Aylesbury (Mr. Raison) could introduce on behalf of the Opposition was that produced in the leader pages ofThe Timesthis morning, namely, that we should go through the whole procedure of calculating for each individual case what the surcharge would be.

I find no practical purpose in that. What is the point of calculating as a matter of history whether a particular councillor should be subject under this now dead Act to a surcharge of £10,000 or £5,000? What will be done if we have that information? Is it proposed that there should be means-tested indemnities, so that one person who is surcharged £10,000 will be let off £8,000 while another who is surcharged only £2,000 will have to pay the full amount? If the point of principle is accepted, which is that the whole episode should be closed, surely it must be agreed that the Bill is entirely appropriate. To go further would be pointless, and making the calculation would be a waste of time.

We come to the point where some of my hon. Friends have objected, namely, the position of the Clay Cross councillors who are dealt with by Clause 4. We say frankly that this is a compromise. Even my hon. Friend the Member for Bolsover would agree that it is a compromise. He would say that it leans in one direction and others would say that it leans in another.

First, the Clay Cross councillors have not escaped a penalty under the law. They have incurred and will continue to incur a penalty of £7,000, which is the surcharge that they face, and they have been disqualified. They have already sustained a period of disqualification, which I understand to have been about two years, and, taking into account the fact that one is not automatically re-elected to a council immediately disqualification ceases, it will probably be three or four years more before these individuals will be able to return, if they wish, to the council from which they were disqualified. So it is not true that they have not suffered any penalty as a result of their defiance of the law.

Secondly, looking at the matter from a common sense point of view and not trying strictly to define the legal niceties of the situation, but accepting that one is dealing with 400 councillors who remain to be surcharged, it is a matter of political wisdom to rub out the whole episode at once. I find it interesting that theEconomist, which is not normally a magazine to adopt this rather compromise approach and which tends to deal in black and white and the rule of law and a particularly stark juxtaposition of principle, says in its leader of last week:
"Not what it seems.
The former Clay Cross councillors deserve little sympathy, but the Attorney General and other ministers should not be pilloried for their new attempt to end an unhappy chapter of confrontation."
In conclusion it says:
"the bill is a reasonable, if belated, attempt to close an unhappy chapter in the relations between government and local authorities."
That is a sound and common-sense judgment, if not a legal judgment. I believe that it wraps up an unhappy episode in the history of housing without in the final analysis doing any great harm to the principle about which my hon. Friend the Member for Toxteth spoke, namely, the rule of law. I do not believe that that has been damaged beyond repair in the Bill, while we are achieving a small measure of good. I therefore hope that my hon. Friends will vote for the Bill.

8.21 p.m.

Among hon. Members who defend the Bill are those who put it forward on grounds of high Socialist principle and others who put it forward, as the hon. Member for Gateshead, West (Mr. Horam) has done, as a commonsense solution to a practical problem. lf, when looking at it in that way, I come to a different conclusion from him, it is not because I reject the principle of common sense but because I believe that on this occasion the attempt to reduce the matter to common sense and practicality is something to be contrasted not with a concern for legal nicety but, rather, with a belief in principle. Principles are involved, and we ignore them at our peril.

It is significant that the Secretary of State did not put the matter in the way that the hon. Gentleman did. He did not regard it as being a purely practical problem, about which a few lawyers have unnecessarily got excited because they are so concerned about the legal niceties. He regarded that as a clash between competing principles. He tried to put it in a more reasonable context than one of pure practicality, saying that there was a balance between competing values—the value to society of mercy and the value to society of the observance of the rule of law.

It is right that the Secretary of State sought not to decry either value, but, rather, to strike a balance between the two. To see whether the balance that he has struck should find favour with the House, it is appropriate to ask two questions. First, are the people on whose behalf we are asked legislatively to show mercy proper objects for the receipt of that mercy in so exceptional a form? Secondly, is the infringement of the rule of law really minor—one with plenty of precedents—or is it, in the context of today's society, a serious one that must be considered as something to embark upon only in the most exceptional circumstances?

The Secretary of State and the hon. Member for Gateshead, West have this in common, in seeking to show that the objects of this exercise of legislative mercy are appropriate, they put everything in terms of confusion and muddle, to use the words of the Secretary of State, or, in the words of the hon. Gentleman, to say that the choice is not between black and white, and that everything is a murky shade of grey. The Secretary of State says that the councillors concerned were moderate but sorely tried men.

It is difficult to come to that conclusion. It is apparent that not every councillor who failed to implement the Act comes into the category of those who are obtaining relief today. To quote the Secretary of State's own figures, approximately 35 of the authorities persuaded the district auditor that their breach of the law was inadvertent and not deliberate, but he estimated that about 20 would be likely to be regarded as having been guilty of misconduct. Therefore, the people with whom we are dealing in the Bill are those who are, by definition, guilty of misconduct, because those who can show that they acted inadvertently would be relieved of the consequences which would otherwise fall upon them.

In the Clay Cross case, the Master of the Rolls, Lord Denning, said that the councillors concerned were unfit to hold public office. Those were strong words from a liberal judge, unlikely to be applied to those who merely walked through a mire where it was difficult to see what was lawful and what was not. Therefore, these are not truly worthy objects of mercy, but rather, on the facts, people who deliberately chose to break the law and stay in breach of it.

Then it is said that in considering the balance between mercy and the rule of law one must also have regard to the practical side. We are asked what we would do instead. If 1 may conflate the approaches of my hon. Friend the Member for Southend, West (Mr. Channon) and the hon. and learned Member for Montgomery (Mr. Hooson), I think that there is a practical solution to the undoubted problem.

With regard to the surcharge, there is no reason why the procedure should not be gone through in its entirety. An assessment of what, if anything, should be done to relieve anyone, if the procedure is gone through in its entirety, would not just be—as the hon. Member for Gateshead would suggest—a pointless, academic exercise to solve a defunct problem. It would enable us to see the dimensions of the problem, both financial and —dare one say?—moral. One would see how much money was involved and just how great a degree of culpability there was, because those who were not culpable would not be surcharged. At the end of the day, the sum that emerged might be substantially less than the Secretary of State envisaged. Certainly, my hon. Friend the Member for Southend, West thought that that would be so.

If it emerged that a small number of people really had acted inadvertently, but had none the less been surcharged, it would be possible to consider a form of relief. But it would surely not be a form of relief on the lines of the Bill, which leaves it open to local authorities to place the burden wholly on the general body of ratepayers in a local authority area which may not be coterminous with that where the ill deed occurred, or, still worse, to put the financial burden upon a body of tenants who may be quite different from those who were concerned at the time. If any relief is to be obtained, the right thing to do is to put the burden solely upon the rates in the area concerned. Practically, the problem is not insoluble, and the practical solution is very different from that in the Bill.

Everyone will appreciate that there is no practical problem over disqualification. All that one has to do is to allow it to stand. That may or may not be a good thing, but it certainly does not present a practical problem. So no insuperable practical problem is involved, and the objects of mercy are not worthy ones.

One must look at the other side of the scale and see how grave a breach of the rule of law is proposed today. In support of the argument that it was not very serious, we had from the Secretary of State a golden treasury of irrelevant, inappropriate and misleading precedents. Even for a Secretary of State in the present Government, it will not do to say that the five dockers present a precedent for the Bill. Beyond introducing a vague note of suspicion about the activities of the previous Conservative Government, what on earth has the subject of the five dockers to do with the Bill? The Secretary of State is far too intelligent a man to be taken in by his own deliberately misleading smile. There was no question of introducing retrospective or quasi-retrospective legislation, or legislation of any kind, concerning those dockers. They have nothing to do with this case, and the right hon. Gentleman knows it full well.

As for the other so-called precedents, stretching back into the past, all I would say is that much has been said about the Attorney-General's celebrated opinion in this matter. I have no doubt that the right hon. and learned Gentleman, knowing what feeling in the Labour Party was like, would, if he had found it humanly possible in accordance with his conscience and knowledge as a lawyer, have wished to be able to call on many precedents to support the Bill.

If the Secretary of State is able to produce precedents galore to support this legislation, is it not, at the lowest, somewhat surprising that the Attorney-General, fumbling with this dilemma, could not find it in himself to quote one of those precedents as being relevant to the problem? There may be some precedents from the murky past, but they are not good ones. I am not concerned with the question whether Lord Birkenhead—or F. E. Smith, as he was at the time—misbehaved in 1912. I am concerned whether that is a precedent which should be followed today.

In considering whether we should follow the precedents—if there are any—or establish one now of giving those who knew what the law was subsequent relief from the consequences of their acts, I suggest that we must look at the matter in the context of today. If this were a period of tranquility in which there were no threats to the rule of law and in which this was an exceptional matter, in which passions were aroused for special reasons in different places, it might be merciful and wise to introduce legislation. However, today there are threats of all kinds to the rule of law from the Left and, potentially, perhaps. from the Right.

I propose to tell any of the groups with which I am identified, whether it be the self-employed or the fishermen of Whitby, that they shall have no support from me for any breach in the rule of law, however great my sympathy with their case. However, it is increasingly difficult to maintain that stance if a precedent of this kind is set. That is a stance which we shall need all the more in the future.

The Secretary of State concluded his speech by saying that it was healthier to forgive. It might be healthier to forgive in some societies, and on some occasions, but in the sick society of today we cast aside the prop of the rule of law at our peril.

As hon. Members know, the concluding speeches are due to begin at 9 o'clock. About six hon. Members are still anxious to catch my eye. The occupant of the Chair cannot regulate the debate, since that is a matter entirely for hon. Members. In my opinion, all who are anxious to take part can do so before 9 o'clock if they are reasonable.

8.33 p.m.

My right hon. Friend the Member for Vauxhall (Mr. Strauss), in an admirable speech, put a poser to the Opposition. I want to repeat it. He said that 400 councillors might well be liable to find £1,500,000. What would the Opposition have done about that problem? Many of the cases involved do not resemble that of Clay Cross, because there was no deliberate defiance of the law, although there might have been inadvertence or fault because of a technicality. What would the Opposition have done with regard to those cases? The Opposition would have had to take some step. The Opposition have failed to show any way in which they would have dealt with that problem.

The attitude of the Opposition is one of synthetic indignation. They suggest that the defiance of the rule of law involves a tremendous principle, and that if we dare to pass the Bill we shall create a terrible precedent with dire results for the country. That is astonishing rubbish.

I should like to make three points. What is the position of Clay Cross under the Bill? The financial burden—the surcharge of £7,000—remains. It is not interfered with under the Bill. There is no breach or defiance of the law there.

What has the Bill done about the inability to act as councillors? These people have suffered a certain period of suspension. The Bill is not retrospective in that regard. All it does is to say that these people, having suffered a penalty to the date set out in the Bill, will receive an indemnity against suspension after that date. What is wrong with that? Why all this cry about defiance of the law? Have not Conservative Members heard about mitigating a penalty? Does not one take account of the circumstances? After all, whatever may he said, there can be no doubt that there was tremendous indignation over the passing into law of the Housing Finance Act and that there was sincere opposition to it.

I agree that there must be no defiance of the law, and the Bill will not approve any such defiance. The financial penalty is not removed, but the penalty of suspension is to be removed. Why should not all the circumstances be taken into account and the penalty mitigated by removing the suspension on the right to be a councillor after a certain date? Why on earth should the Opposition think that by doing that one is defying the rule of law and creating a tremendous principle that will continue through the years to the detriment of Parliament? I say again that to take that view is a lot of rubbish.

What is the other provision in the Bill? Councillors other than those at Clay Cross are granted relief. Why is this being done? I put this to the hon. Member for Aylesbury (Mr. Raison) but he did not answer my question. Under Section 62(4) of the Act it was open to any local authority to maze an application to the Secretary of State to reduce the amount of increased rents. Many housing authorities made such an application but received no reply. The Secretary of State even refused to meet a deputation. The result was that when the time came to serve notice of the increase of rents they had not received a reply to their applications. A certain amount of time passed, they realised that as the law stood they were required to serve a notice, and this they did.

If that be correct—and my right hon. Friend the Member for Vauxhall quoted the Economist which set out the facts on this matter—these people have been guilty of inadvertence, or they have committed a technical offence, but certainly there has been no deliberate defiance of the law. What does one do in the circumstances? Why should not they be indemnified? A number of councils did not serve notices in time because of default by the Secretary of State in the then Conservative Government, or by his Department. In a matter of this kind, it is right that the Bill should contain provisions to relieve them of any liability.

I have dealt with the three points in the Bill. What would the Opposition have done in these circumstances? This is a real example of the Opposition seizing hold of a false point and endeavouring to build it up into a great argument about the Government being against the rule of law. It is—as I have said—synthetic indignation. I am surprised at the Opposition. Perhaps I should not be surprised. They may be right to seize upon any weapon that is available to them. However, I say that there is no justification for the attitude that they have adopted. The Bill is perfectly justified.

8.41 p.m.

The hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) asked what the Opposition would do. It is right that we should assess the arrears which are unpaid and the degree of culpability of each defaulting councillor. It would then be proper not to be vindictive but to assess the degree to which each councillor should take the consequences of his or her deliberate breach of duty under the 1972 Act.

The hon. and learned Gentleman asked whether there was not ground for mitigation. In these circumstances, there can be no ground for mitigation by reason merely that the 1972 Act was the subject of much indignation. It is only in the case of an Act which is the subject of much indignation that we are likely to have the risk of councillors seeking to defy it. The greater the indignation, the greater the need to establish that no condonation goes forth from Parliament for breach of the law, because only Acts which arouse indignation will give rise to the risk of the example of councillors who get away with defiance of them being followed by others.

The hon. and learned Gentleman said that some councillors were innocently waiting for the Secretary of State to make up his mind. If that were so, they could never have been surcharged because. under Section 230 of the Local Government Act 1933, there is a way out. If the Minister feels that councillors have acted reasonably, he may relieve them from any surcharge. Presumably the Secretary of State felt that there was no way out on the ground of reasonableness, and that is why he has not felt able to overcome the surcharge imposed on the Clay Cross councillors.

I want briefly to examine the Secretary of State's claim to take credit for the fact that no councillor is relieved from a surcharge which has already been imposed. The right hon. Gentleman concedes that that would be wrong. Indeed, he concedes that because the Attorney-General has told him so in the advice about which we have heard so much. But by pretending to strain at a gnat the right hon. Gentleman hopes to distract attention from the fact that he has already swallowed a camel. The Secretary of State rightly said that a surcharge is not intended to be a penalty but only a means of collecting money.

The disqualification is quite different. Its purpose is to penalise, but only where there is no excuse of the kind that I have already mentioned. The Secretary of State can let the councillor off if he believes that the councillor has acted reasonably. So it is that the law imposes disqualification only where the Minister cannot bring himself in all conscience to say that the councillor has acted reasonably and that he ought to be excused. If that is the case, disqualification is surely just, because then it is as a councillor that the councillor has broken the law—as Lord Denning said, by infidelity to the oath that he took on taking office —and it is in his capacity as a councillor that he ought to be penalised.

Viewed in that light, there is no distinction at all in point of principle between relief from a surcharge already imposed, at which the learned Attorney-General strains, and relief from a disqualification which by law that surcharge attracts.

The Attorney-General, by his office, is the leader of my profession and the impartial legal adviser on points of law to the Government and this House. I hope also that I may say that he is my friend and an opponent of long standing. I grieve greatly for him and for his office because he has strayed to the point at which he and his conduct have attracted the criticism of his hon. Friend the Member for Liverpool, Toxteth (Mr. Crawshaw) and others. I shall listen with the deepest personal anxiety to the grounds on which he feels it proper to defend his continuance in office.

When a councilor is elected to serve, he is elected to serve his people. These councillors have been bad, unfaithful councillors and servants, and yet the Government are saying to them, "Well done." I believe that the results will be disastrous.

8.46 p.m.

My right hon. Friend the Secretary of State put to the Opposition the prime question, "What would you do in the present circumstances?" and the hon. Member for Aylesbury (Mr. Raison), who led for the Opposition, mumbled something about seeking out the facts of the case. Speaker after speaker on this side of the House has put that question to the Opposition, and their own answer has been, "Let the legal process take its course and then we shall decide what to do".

I take it from that that the Opposition at least concede that they, too, could be driven into passing an Act of indemnity. It seemed to me that the hon. Member for Cleveland and Whitby (Mr. Brittan) wished to weigh in the balance the degree of money involved—how much was lost, what was the size of the total—and then the Opposition would decide whether to go ahead with disqualification and the rest of the legal processes—or, if the amount was too great or too many people were involved, they would pass an Act of indemnity.

Hon. Members opposite have conceded in principle that they would have to consider introducing an Act of indemnity in these circumstances. I hope that the hon. and learned Member for Wimbledon (Sir M. Havers), if he can spare time from attacking the Attorney-General, will address himself to this point, which has been made over and over again.

According to Dicey, an Act of indemnity is a retrospective statute which frees persons who have broken the law from responsibility for its breach and thus makes lawful acts which when they were committed were unlawful. The Bill seeks to say to councillors in areas other than Clay Cross that they will be free from the process which could take place in the courts. It frees those councillors in other areas from the risk of a surcharge being placed on them and from the risk of disqualification. It does not remove from the Clay Cross councillors the £7,000 burden placed on them, nor does it in totoremove the disqualification. Hon. Members opposite may disagree with the removal of the disqualification, and 1 can understand their reservations, but there is logic in what is being done. If the risk of being surcharged and disqualified is being removed from councillors in other areas, is it not logical to say that the disqualification of the Clay Cross councillors should now cease?

Is the hon. Gentleman aware that, in their statement of appeal to the Court of Appeal, the counsel on behalf of the councilors—l would remind him that junior counsel was the hon. Member for York (Mr. Lyon) who is presently at the Home Office—did not press their application for relief under Section 230? I would remind him that the grounds for relief are that a councillor acted reasonably or in the belief that his action was authorised by law. If that point was not pressed on their behalf, may we not take it that they regarded their action as unreasonable and not authorised in law?

I am dealing with the problem of the disqualification resting on the councillors in the context of this Bill. I am not concerned with the matters which were before the Court of Appeal.

The rule of law is obviously of prime importance to the survival of this nation, but equally there will periodically be breaches of that rule of law and very difficult decisions have to be taken about how those breaches should be dealt with. In the circumstances, the Government are right to bring in the Bill. Otherwise, the cancer created by the Housing Finance Act would continue to fester. It is now time to bring a conclusion to this matter. In that sense, I entirely agree with the step which has been taken.

8.53 p.m.

I am grateful to have caught your eye, Mr. Deputy Speaker, as the first Member representing Derbyshire to speak from this side. Although the arguments have been forcibly put, there are a few local comments which need to be made. I am aware that my hon. Friend the Member for Burton (Mr. Lawrence) has also been sitting here waiting to speak, and if I am brief I hope that he will be able to add to my comments.

People in Derbyshire are seething mad with anger, particularly in North-East Derbyshire, because their case has not been heard; it has gone by default. Despite considerable numbers of demonstrations and petitions, they feel that their Members of Parliament in North-East Derbyshire have not represented their views. That is one reason why some of the ratepayers of that area have come to my surgeries and written to me. This point should be made by those hon. Members opposite who have expressed much more passion and bogus indignation than they have logic in trying to justify this disgraceful Bill.

The truth is that many people are ashamed and embarrassed to claim to be residents of North-East Derbyshire because of the disrepute into which the area has fallen because of the Clay Cross scandal. If evidence is needed, we had it last week when the local Labour Party lost a seat in North-East Derbyshire on the Derbyshire County Council to an independent Conservative by a substantial majority of over 500 votes, in an area which has been traditionally inclined not to vote either independent or Conservative. This is evidence of how people are feeling there.

I will not give way. The hon. Member took 50 minutes and I am allowed three.

The hon. Member for Bolsover (Mr. Skinner) made an impassioned defence of this legislation, suggesting that it was necessary to disobey the law because the local council was anxious to spend money on useful purposes. I should like to quote an extract from a letter which I received from a resident in that area. He probably wrote to me because he had not had much satisfaction from his own Member of Parliament. He said:
"Clay Cross is perhaps the only small town in England that does not possess an adequate public toilet. The one remaining toilet is in such a derelict and filthy condition that most tramps decline to use it."
That is the sense of priority of the Clay Cross council. There are in Clay Cross 4,000 properties of which only 1,400 are council owned. The rest are privately owned or rented. Therefore, the suggestion that under this legislation the ratepayers of North-East Derbyshire should foot the bill for the non-payment of rent by 1,400 council house rent payers is quite disgraceful and unjust. The House ought to prevent it happening.

The people in North-East Derbyshire are not merely angry because of the proposal to penalise them. I assure the House that they will resist it and that there will be further illegalities by a large proportion of the population, who will refuse to pay this surcharge. The question that one has to ask the Government is this: if that should happen, will the Government introduce further legislation to let off the next group of law breakers? Penalties for the non-payment of rent should be imposed upon those who did not pay the rent, and not on the rest of the law-abiding community. If that cannot be done, the penalties should be paid by the Labour Government and by Labour Members of Parliament who deliberately incited the disobedience.

8.58 p.m.

I have listened with interest to my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) and to the hon. Member for Bolsover (Mr. Skinner). The hon. Member for Bolsover is not the only person who feels passionately or personally about this matter. There are plenty of Members on this side of the House who feel passionately and personally about the need to uphold the rule of law, and there must be plenty of ratepayers in the Clay Cross area who feel passionately about the fact that the Clay Cross Council has for many years penalised the ratepayers for the benefit of the council house tenant.

It is not only just under the Conservative Government's Housing Finance Act that there has been trouble. As the Secretary of State will bear witness, for many years under Labour administration the Clay Cross Council was taken to task for failure to implement a fair-minded assessment of rents and rates so that they were not grossly weighted on the side of the council house tenants, with the result that by 1970 the contribution by the rates to the housing revenue account, although it was 3 per cent. in the country as a whole, was about 18 per cent. in Clay Cross. Therefore, much of the emotion on the other side of the House is falsely charged.

I want to mention one or two points which have arisen in the debate and which seem to me to be important. One in particular concerns the Attorney-General, who, at one stage, rose to his feet and said that it was quite wrong to suggest that the Labour Government had given any sort of encouragement to the Clay Cross councillors. The motion introduced at the Labour Party conference on 3rd October 1973 said that
"…upon the election of a Labour Govern ment, all penalties financial or otherwise should be removed retrospectively from councillors who have courageously refused to implement the Housing Finance Act."

The Leader of the House said:

"We want to go further than that."
He had been discussing the question of assisting councillors in their financial difficulties. He said:
"I am going to recommend Conference to accept Agenda Motion 191 with amendments."
To some degree, this is precisely what is happening. It lies ill in the mouths of Government Members to pretend that it is not. The setting aside of the disqualification is in accordance with that resolution, and the setting aside of any financial provisions which would otherwise have followed had the auditor been able to make the assessment during the course of the year—

—from the introduction of the Act is fulfilled in this piece of legislation. It is precisely that subject which concerned the Attorney-General. In his advice to the Government. the Attorney-General was concerned that

"it could only be construed as incitment to those concerned to refuse to obey the law"
It is for these reasons, and not just because—

I am sorry, I cannot give way. The hon. Gentleman will see that it is 9 o'clock. I have been present all day. I do not think that the hon. Gentleman can say that.

It is not just because of the realities of the matter, which are often portrayed as unfair, and not just because the rule of law is a matter of importance to my right hon. and hon. Friends; it is because the rule of law is important to the continuance of democratic government and the whole of our political system.

If the hon. Member for Bolsover feels passionately that the rule of law ought to be set on one side, I ask him to consider what may happen here. The injustices that we see in some Eastern European countries will prevent the freedom of speech that allows the hon. Gentleman to exclaim so passionately his point of view.

It is not only the Attorney-General who ought to resign; it is the Attorney-General, the Solicitor-General and the Lord Chancellor—

—because if those who are responsible for enforcmg and upholding the rule of law do not do so it will be a very sad day for the future of government in this country.

9.2 p.m.

The speeches we have heard during the debate have been in general fairly predictable. The Secretary of State did his best to find some precedents. In the Temple we call it scraping the barrel. The barrel was fairly thin anyway, and I think that most of the precedents have been dealt with. However, I shall take up some time to deal with the Poplar precedent.

Before doing that, I remind the House that the most offensive feature of the Bill is Clause 4. That has become apparent from the speeches of a number of right hon. and hon. Members on the Government side of the House. The Secretary of State did the House less than justice in the cursory manner in which he dealt with the question of the lifting of the disqualification.

The Poplar precedent is the only one which even starts to be relevant to the Bill before us, and it is worth spending a little time upon that precedent. Poplar Council insisted on paying a minimum wage to its employees of a sum far greater than the average across the country, at a time when wages and prices —perhaps there is a lesson to be learned from this today—were falling. The district auditor disallowed £5,000 of the total wage bill and surcharged the councillors accordingly. The question of that surcharge went to the House of Lords, which upheld the district auditor's decision. But Poplar councillors carried on with this, took no notice of the surcharge and went on paying high wages for year after year until the surcharges amounted in all to about £86,000. Neville Chamberlain, realising that in those days, there being no question of disqualification, there was nothing to do in respect of councillors who were paying no regard to the law, introduced a Bill which at the same time as lifting the surcharges created for the first time the penalty of disqualification in respect of any councillor who was surcharged by a figure of £500 or more. Thus, for the first time we were able —not by giving in to pressure—to clear up an anomaly and to strengthen the necessary control over defiant councillors in the future because those who persisted would then be surcharged and automatically disqualified.

The Secretary of State spoke of disqualification being a judgment on the conduct of councillors. I agree entirely with that. It is a judgment that they, by their conduct, are not fit to carry out the duty. It is a duty not just to look after one section of the ratepayers to the council of which they are members. They are trustees for all the ratepayers.

In reply to an intervention by the hon. Member for Bolsover (Mr. Skinner), the Secretary of State said—and it was perhaps a Freudian slip—that this was an Act of partial amnesty. If "partial" means "not impartial", I entirely agree.

My hon. Friend the hon. Member for Southend, West (Mr. Channon) revealed some extremely important information. He said that he knew of five councils which had been late in implementing the Act and which were not being surcharged. He said that some had been 13 weeks late and some 14 weeks late. The argument that has been put forward time and again today and which was put forward in last week's edition of the Economist—that th., Bill protects those who, by inadvertence or because there was not enough time, would otherwise be unfairly surcharged —has thus been demonstrated to be false.

I hope that when the Attorney-General replies he will answer the question which my hon. Friend asked him, namely, what are the likely sums involved in the other councils where the district auditor has not agreed that there has been no negligence or wilful default. We have always maintained that the Bill has been brought forward prematurely. We would greatly appreciate an answer to this question, especially in respect of councils where the councillors were in default for a short time only. I appreciate the difficulty of councils which have a large housing stock and which have to be in default for a comparatively short time before the £500 would be reached. Other councils with much smaller housing stocks maintained their rebellion through to the bitter end.

I agree with the argument of the right hon. Member for Vauxhall (Mr. Strauss) on Clause 4. He described Clause 4 as unnecessary and undesirable and asked that it should not be passed by the House. He said that the councillors knew exactly what they were doing. They had defied the law and were defying an Act of Parliament, a democratically elected body. He said that they were self-inflicted martyrs. I find it inconsistent that he should then say that he will support the Bill tonight. The right hon. Gentleman asked the Attorney-General a question to which I hope we shall receive an answer. He asked for an assurance tonight that the Government will withdraw Clause 4. We hoped that at least Clause 4 of this squalid little Bill would be seen to be what it really is and would be dropped.

The hon. and learned Member for Montgomery (Mr. Hooson) described the Bill as a "sorry Bill for a shabby purpose". He asked, why should those who have no voice today run the risk of being forced to pay sums because of other people's mistakes? That is well worth remembering.

The speech of the hon. Member for Liverpool, Toxteth (Mr. Crawshaw) was the most remarkable speech I have heard since I have been in the House. However, I have been here only a short time. The hon. Gentleman asked how many of the 400 deserved sympathy. That is a question to which we still await an answer. He complained of a lack of leadership from the Labour Party, saying that many councillors were encouraged by the leadership of the Labour Party to defy the law. The hon. Gentleman spoke, perhaps in teasing fashion, of the so-called tacit agreement to which the Secretary of State referred in that mysterious manner in November of last year.

The hon. Gentleman said that the Bill discredits the Labour Party. He said that the Secretary of State did not sound very convincing. The spokesman for the Liberal Party described the Secretary of State as choking over the speech he had to make. The hon. Member for Toxteth repeated a question which he had asked during the course of the Secretary of State's speech, namely, whether if these were Conservative councillors the Government would be putting this Bill before the House. I greatly hope that that question, which is pertinent and clearly demands an answer, will receive a reply from the Attorney-General.

The hon. Gentleman made a final observation the significance of which the Attorney-General as a lawyer will realise. He asked what will be the attitude of the Labour lawyers in the House when they vote tonight if they have ambitions to sit later on the Bench and thus have to uphold the rule of law.

The hon. Member for Birmingham, Erdington (Mr. Silverman) raised yet another hare. Dealing with the Home Rule Bill of 1912 the hon. Gentleman appeared to argue that, because F. E. Smith on that occasion then returned to Ireland and there were armed riots—I am not able to deal with the matter at greater length—that was a precedent which justified the Bill. It is dangerous to argue as if anything of that kind justifies the House acting in a similar way 60 years later. It is exactly the point that we are making. Any precedent of any kind can be used later, and used not only against those who introduced it but against Parliament in general.

It is necessary in those circumstances to identify what the Bill is about. It is, in reality, a Bill of indemnity designed to relieve of the consequences of their acts all those councillors who deliberately and without any justifiable excuse broke the law, and not only those at Clay Cross but those in the other areas where the district auditor would not be able to find a reasonable reason for it. The Bill will prevent a surcharge from being made against them and thus it would prevent the inevitable consequences of disqualification from operating in each case and, again. not just in the case of Clay Cross councillors.

We must identify what the Bill is about, because we must see what up to now has been meant by a Bill of indemnity. We must see what the precedents are. In the aftermath of a war or other national emergency, or where the safeguards of habeas corpus have been suspended, it was usual—in fact, inevitable—to find an Act of Indemnity which was intended to protect by means of retrospective legislation those who had actedbona fidein the public interest, perhaps in the arrest of someone wrongly believed to be a danger to the safety of the State, or perhaps on another occasion to indemnify a public official who had innocently and unknowingly acted in excess of his powers, just as the House has been known to indemnify one of its Members who unwittingy as a doctor had kept in his partnership some minor appointment which was an office of profit under the Crown. In these cases there has been an essential element, the person indemnified must have acted in good faith: Dicey described this power of Parliament as a supreme instance of parliamentary supremacy. He added:
"Any suspicion on the part of the public that officials had greatly abused their powers might make it difficult to obtain a parliamentary indemnity."
What are we being asked to do today? What justifies this supreme instance of parliamentary sovereignty? We are being asked to free certain councillors from all liability from pending but inevitable surcharges. We are asked to do so not for actions bona fideand honestly done in the pubic interest in a national emergency, not for actions done innocently and in good faith by Ministers or public officials, but in order to change the whole tradition of the constitution. We are asked to do that because some councillors, in breach not only of the law but of their clear duty as councillors to act fairly towards all ratepayers, decided to change the law by defying it regardless of the loss to those they were elected to represent. What they did was clearly a reflection of the increasing turbulence and aggression by minorities which is now sapping the foundation of our society.

Society can operate only by consent. Group interests must accept that they are only one part of a free and ordered society. By all means campaign and fight for change, but that must be done within the framework that makes a parliamentary democracy work and survive. Any act, and particularly collective acts, of deliberate law breaking for political reasons must be resisted. To condone, to encourage and finally to indemnify is the beginning of the end of Parliament and thus of democracy. In an age where contempt for the law and for Parliament has increased out of all recognition, at a time when big battalions flex their muscles against Governments and when unions call strikes to force Home Secretaries to free convicted thugs, in a climate in which the bomb and bullet are preferred to the conference table, it seems astonishing that the Labour Party not only in Opposition encourages these councillors but in Government seeks to indemnify them.

The attitude of a Government to those who deliberately break the law, democratically passed and enacted in full knowledge of the consequences, is of major importance when we consider that Government's attitude to the whole issue of the rule of law. Can they not see that the writing is now on the wall? Do they care so little for the future of this place that they are prepared to put short-term political expediency before responsibility to the House, to the nation and to the future?

Let there be no mistake about this: once this bastard has been conceived and delivered, it will not curl up and die after the Clay Cross champagne party. It will be the uninvited guest at more parties, particularly political party meetings and meetings of power-struck groups which want the publicity and adulation of martyrdom without the pain.

The principle is clear but it obviously needs to be restated—namely, Parliament makes a law and citizens obey it until it is changed. Any other rule means disorder. We must all face that situation even if it means that the Leader of the House, whom I am pleased to see present, must also be brave enough to say so at a party conference. If he is not brave enough to do that he should go.

How do the Government seek to justify the Bill? We are told that as public money will not be used, all is well. We are told that since the Clay Cross surcharge will remain, all is well. We are told that no retrospection is involved. However, all is not well. What about the £100,000 which the district auditor is investigating this very week? That, as night follows day, must involve a further surcharge on the Clay Cross 11 unless the Bill becomes law. Is that not retrospection? We are told that no public money is involved. What about those tenants who were deprived of their rent rebates and had to be helped by supplementary benefits to make up some of the difference? That was taxpayers' money. The district auditor has assessed this charge upon the taxpayer at Clay Cross to be more than £16,000. Who will repay the taxpayer? Who will make up the £100,000? Even if we exclude the interest which has accrued, that sum will inevitably fall upon those who did not have their rates kept down. They will have to pay over the odds whilst those responsible have the further surcharge and disqualification removed. I doubt that the ratepayers of North-East Derbyshire will echo the words of the Leader of the House in that deplorable speech in 1973,
"Clay Cross was certainly rather special"—

Quote the whole of it.

I continue:

"Everybody in the Labour movement and outside was full of admiration and sympathy for the stand Mr. Skinner arid his colleagues had taken."
Where is the sympathy now for those whose rates will be forced up even more by the actions of those who are not themselves prepared to bear the cost of what they deliberately did?

This is undermining the rule of law for selective political reasons. Where does it stop? Why should there be an indemnity only for these councillors? Why not for all supporters of the political party which gains power? Why not for all those who defy a law which they dislike so long as it is passed by their political opponents?

This doctrine seems to be based upon some theory of the Secretary of State's that some Acts are less binding than others. Let us examine that for a moment. The next step could be for Parliament to decide that an act was an offence at the time it was committed but not an offence later on after all. Or —unthinkable as it may be now be but, once one sets the pattern, who knows——Parliament could one day decide that an act which was innocent when committed was in retrospect an offence for which people could be punished.

Is that a precedent which the House would like? Let us recognise the path on which we are starting tonight, and where it may lead us.

The justification for the removal of the disqualification was given by the Seccretary of State on 6th November in these terms:
"The Government do not intend to rescind this surcharge retrospectively, or to use public funds to discharge the financial liabilities incurred by those councillors. Any funds for this purpose must come from private subscriptions, organised by those associated with the decisions taken at the relevant party conferences."
We should like to know whether any such fund has been found, for the Secretary of State went on to say:
"I understand that a fund for this purpose is likely to be set up. In view of this…"—
that is, the setting up of a fund—
"we shall end the disqualification already incurred by any councillors as a direct result of …the Act."—[Official Report, 6th November 1974; Vol. 880, c. 1079.]
What does that mean? Because a private fund has been set up to pay the surcharge properly incurred as a result of the district audit, does that then justify the lifting of the disqualification? Is that the reason which the Secretary of State put forward on 6th November? He hardly gave us any explanation today.

It may well be that there will be enough hon. and right hon. Members on the Government benches who will put their principles and their belief in the rule of law above their personal ambitions and kill this squalid Bill tonight. But it seems that there is one right hon. and learned Gentleman who, in spite of being on record as a strong upholder of the constitutional position, now supports the Bill. The advice which he gave as shadow Law Officer was the only advice which a reputable and responsible lawyer could give.

The Attorney-General holds a unique position of responsibility in our constitition. He is responsible to the House as well as to the Government. This is one of the reasons why the Attorney-General has not since 1928 been a member of the Cabinet. No question of collective responsibility—for what that is worth today anyway—applies in his case. In 1964, Professor Edwards wrote a book entitled "The Law Officers of the Crown", and in it he said:
"The general conclusion favours the Attorney-General accepting the duty of manifesting publicly the independence of his office, a duty splendidly examplified by recent holders of the office."
He went on:
"To me, the ultimate strength of the office of Attorney-General and Solicitor-General in all their various activities rests primarily on a firm adherence to this long fought for principle of constitutional independence."
It is of paramount importance that the independence and detachment necessary to the proper discharge of the Attorney-General's responsibilities are maintained. There must be no blurring of this in decisions that are policy decisions rather than legal advice. In 1973 the then Attorney-General, who later became Lord Chancellor, speaking of the Attorney-General's responsibilities, said:
"If anything is recommended to him which is thought by other persons to be for the good of the country but which he thinks is not for the good of the country, no man ought to be in the office who would hesitate to say My conscience must direct me. Your judgment shall not direct me'."
If the Attorney-General heeded this advice tonight he would resign and vote against the Bill.

What has happened since 1973? The law has not changed and the constitution has not changed, but the advice has changed. Why? The only change is that the Labour Party is now in power and is therefore not courageous enough to go back on the promise it made so unwisely in 1973. It would be interesting to know whether the Leader of the House had this legal opinion when he made that speech at that conference.

Why does the Bill, to quote the Attorney-General, not
"contravene all constitutional practice and set a dangerous precedent".
How has it suddenly become so harmless that the Attorney-General can support it? In 1973 the Bill was such that the Attorney-General then advised,
"No Law Officer of the Crown of any political party would be likely to advise the Government of which he was a member to initiate such legislation."
What has changed? Are we to be told that leaving out the trivial sum of £7,000 whilst excusing surcharges of Eli million makes all the difference? Will the excuse be that these people are not being recompensed? What is the difference? The audit will still go through, but instead of being paid back they just will not be charged.

What will be the Attorney-General's excuse for the disqualification? Does he disagree with Lord Denning that
"Each of them deliberately broke the solemn promise which he gave when he accepted office. Each of them flagrantly defied the law … they were not fit to be councillors … the sooner they are disqualified the better."
Does the Attorney-General disagree with those words of the Master of the Rolls? How can it be argued that the retrospective removal of a penalty which was applied only after the inevitability of disqualification was made totally and absolutely clear does not contravene constitutional practice or set a dangerous precedent.

What about the ratepayers of North-East Derbyshire who will resent being made to pay for others' wrongdoing? What if they refuse to pay to relieve these councillors? What about those professional advisers who are forced by the Finance Act to disclose confidential information about their clients? They may feel as a matter of conscience and professional integrity that this is a breach of—and I quote the Secretary of State—
"the tacit agreement as to what is permissible."
What about the self-employed who feel that the new imposition for national insurance contributions for which they receive no benefit is so unfair that they may refuse to pay it?

If a Conservative Government sought in future to indemnify such people would the Attorney-General support the Bill or oppose it? The Bill is a charter to those who obey only the laws they like. The House tonight is sending out the message —"If you do not like the law defy it". My duty to criticise the Attorney-General tonight gives me no pleasure, but my duty is clear both as an ex-Law Officer and— a lawyer dedicated to the maintenance of the rule of law and of Parliament. I must ask the Attorney-General how he can justify this not only to the House but to his colleagues in the Temple where he is the Leader of the Bar. How can he justify it to the Director of Public Prosecutions and his staff for whom he has ministerial responsibility? How can he justify it to the police who so frequently seek his advice? How can he justify it to the country which is entitled to believe that Law Officers of the Crown are fair and impartial and fiercely proud of their independence?