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Orders Of The Day

Volume 892: debated on Wednesday 14 May 1975

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Housing Finance (Special Provisions) Bill

As amended (in the Standing Committee), considered.

New Clause 1

Repayment And Disqualification

' —(1) in any case to which section 1 of this Act applies the District Auditor shall at the same time as he makes the certificate referred to in subsection (2) thereof make a further certificate stating the sum or sums which and the person or persons whom he would have surcharged under each of subparagraphs ( b) ( c) and ( d) of section 228(1) of the Local Government Act 1933 but for this Act.

(2) Within 28 days of making the certificate required under subsection (1) above the District Auditor shall apply to the Court for such order or orders as the Court may think fit to make as hereinafter provided in respect of the said certificate and against any person or persons named in it.

(3) On an application under subsection (2) above the Court may confirm, vary or quash the said certificate and if it confirms or varies it may:—

  • (a) order that any person named in the said certificate as confirmed or varied shall pay to the Council which incurred the expenditude or suffered the loss or deficiency in question, or to its successor Council, such part as the Court things fit but not exceeding £1,000 of the sums for the expenditure or loss or deficiency of which such person was responsible as certified therein; and
  • (b) whether or not it makes an order for the payment of any part of such expenditure or loss or deficiency if the total thereof exceeds £2,000 and any person responsible for authorising or incurring it is or was at the time of his so doing a member of a local authority, may order him to be disqualified for being a member or elected to a local authority for a specified period not exceeding five years.
  • (4) The Court shall not make an order under subsection (3) ( a) or ( b) above if the Court is satisfied that the person authorising or incurring the expenditure, loss or deficiency in question acted reasonably or in the belief that his action was authorised by law, and in any other case shall have regard to all the circumstances, including that person's means and ability to pay.

    (5) Any person liable to be affected by any order made in proceedings under any of the foregoing provisions of this section shall be entitled to appear and be heard in such proceedings.

    (6) The Courts having jurisdiction for the purposes of this section shall be the High Court except that, if no sum specified in the certificate given under subsection (1) above exceeds the amount over which county courts have jurisdiction in actions founded on contract, the county court shall have concurrent jurisdiction with the High Court.

    (7) Any expenses incurred by a District Auditor in complying with the foregoing provisions of this section shall so far as not recovered from any other source be recoverable from the local authority from the audit of whose accounts such expenses arose or from the council which is the successor to that local authority.'—[ Mr. Raison.]

    Brought up, and read the First time.

    4.25 p.m.

    With this, it will be convenient to discuss the following amendments:

    No. 14, in Clause 2, page 3, line 13, after first 'of', insert ( a)'.

    No. 15, in line 15, at end insert:

    'and
    (b) any sum or sums which the court may order to be paid to that council.'

    I should explain straight away that Amendments Nos. 14 and 15 follow from new Clause 1. The new clause is to be taken in conjunction with the present Clause 1 and will, in effect, become Clause 2 of the Bill if it is accepted by the House.

    The House will realise that our opposition to this shameful Bill is deepseated. As the debate continues this afternoon I am sure that it will become apparent that our position has been strengthened rather than weakened during our period in Committee.

    We accept the notion of the rent loss certificate introduced in Clause 1 and the procedure by which a district auditor, dealing with the failure to implement the Housing Finance Act 1972, shall not apply the normal surcharge procedure—which also entails disqualification where the surcharge is £500 or more—but instead shall issue a certificate setting out whom he would have surcharged and by how much.

    We accept this procedure for two reasons. The first is that, as we have repeatedly said, we have no desire to be vindictive and believe that justice should be tempered with mercy. We want our approach to this to be eminently reasonable, as it was in Committee. The effect of the certificate is that it identifies the people concerned but makes it possible not to apply the full rigour of the law which was operating at the time when these acts took place.

    Secondly, we accept the rent loss certificate procedure because it can be a means of ensuring that the business of making up for lost rents falls on the relevant community—in other words, that it falls on the people who benefited from the failure to implement the Act or, at least, elected the councillors who defied it.

    We believe that that again is a right ingredient in the Bill. So far, so good. Clause 1 in itself is not in all ways unacceptable to us. Where we part company from the Government is in the way that Clause 1 precludes the possibility of any financial burden or electoral disqualification—except in the case of the original Clay Cross surcharge, which we come to under Clause 4—falling on councillors who deliberately defied the law when they refused to implement the Housing Finance Act. Make no mistake about it: it was deliberate defiance.

    The position was made absolutely clear during the passage of the Housing Finance Act. Moreover, as I recall, on the Second Reading of the Bill my hon. Friend the Member for Southend, West (Mr. Channon) made it clear when 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; cc. 4256–7.]
    The law was absolutely clear, and I do not believe that any councillor caused it to be broken except deliberately, though our new clause strengthens the safeguard against a penalty being imposed on anyone who acted
    "… reasonably or in the belief that his action was authorised by law."
    In other words, we seek in our new clause to make it completely impossible for anybody to bear a penalty or burden unless he has clearly and knowingly breached the law. We do not want anyone to suffer penalties unfairly. But we insist that to give this immunity from the consequences of actions in defiance of the law can only be an encouragement to similar breaches of the law in the future. We can all list examples of how this might occur.

    This is our fundamental objection to Clause 1. It is a matter of profound principle, and one where we disagree with the Government's approach.

    4.30 p.m.

    There is a further reason why we believe that the Secretary of State, the Attorney-General and their colleagues are wrong. The Government are taking this step before the full facts are known. This is one of the several crucial differences between the affairs that we are discussing at the moment and the Poplar example which has featured so much in our discussions. It is entirely wrong in principle to bring forward this measure before the facts are known. It is also foolish in practice. Moreover, it is a breach of the undertaking given by the Prime Minister on 4th April, when he said:
    "Only when we see the full extent and magnitude of the problem will it be possible for to to make our recommendations to the House and this we shall do."—[Official Report, 4th April 1974; Vol. 871, c. 1445.]
    We still cannot see the full extent and magnitude of the problem. In many ways we know very little more than we knew when we started on this issue a year and a half ago. We have discovered certain facts in Committee, but they are extremely limited. We still do not know, for example, the names of the authorities where surcharges may apply. As it happens, the district audits are proceeding very slowly and in nearly all cases have been suspended. I can understand that the district auditors may take the view that it makes sense to suspend audits while awaiting the results of the legislation, but it adds to the difficulties. We do not know what it is about which we are legislating. That cannot be a good basis for legislation. We know little more than that the sum involved may be £1·5 million spread over 400 councillors.

    We know that in cases where the audit has been completed, apart from the special audit at Clay Cross, there has been no surcharge or disqualification imposed. We also know now—this was the one valuable fact to come out in Committee—how relatively small are the sums to be recovered in all but one or two of the possible instances. But, essentially, we are in the same position as we were in April 1974.

    We cannot believe that it is right to decide whether all these councillors should be let off while we are in ignorance of the facts. We think it especially wrong, if not tragic, that the Secretary of State and the Attorney-General should promote such a procedure when the rule of law and the sovereignty of parliamentary government are under challenge on many sides. What would they say, for example, if some local authority in the future decided not to impose the rent increases which possibly will be required, perhaps by legislation, next year or even this year? It is on the cards that we may have legislation. We are in danger of having this deeply offensive community land legislation on the statute book. If it goes on the statute book, it must be implemented. No one must defy it. But people will be profoundly opposed to it and will have before them the example of what has happened to those who defied the Housing Finance Act 1972. The Government are setting a most dangerous precedent.

    What do we propose to set up in substitution for the Government's procedure? Our clause sets up a scheme devised by my hon. and learned Friend the Member for Southport (Mr. Percival), to whom I pay tribute and express my thanks, which could achieve a moderate answer to this admittedly very difficult question. In Committee we tried to persuade the Government that in its essentials it offered a real opportunity to take the heat out of this difficult matter, and came up with an answer which managed to combine moderation and common sense with a final upholding of the principle of the rule of law which we believe to be so important. I hope that the House will think carefully about what we are proposing again in this debate and will ensure that it is supported.

    In saying that, I am encouraged by two statements that we have had from Ministers during the passage of the Bill so far. On Second Reading the Secretary of State said:
    "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."—[Official Report, 24th March 1975; Vol. 889, c. 50.]
    When I heard those words I was extremely grateful, because they appeared to indicate that the right hon. Gentleman was prepared to listen to what we had to say, and it was my hope that he would accept amendments which we put forward that were clearly more reasonable than the Bill's proposals. I acknowledge that we are to have some concessions from the Government today. However, I emphasise that they are useful but minor. We believe that it is not too late for the Government to accept the more fundamental amendment set out in our clause.

    In Committee the Under-Secretary said:
    "I confess that we are not entirely satisfied with the Bill as it stands."—[Official Report. Standing Committee D, 17th April 1975; c. 194.]
    He had our full support in saying that. But, again, cannot he see that in the approach put forward in this clause and in our other amendments we are not attempting to wreck the Government's proposals? Cannot he see that they are a genuine and serious attempt to improve them? The hon. Gentleman said that he was not entirely satisfied with the Bill. Here is a chance to improve it in a way which might begin to make it, although not wholly acceptable to the country as a whole, much more acceptable than it is at the moment. The Government must know that they have introduced a measure which has caused profound distress among very many people of whom a large number would normally be sympathetic to their party. Many people feel that this is perhaps the worst of all the actions taken by this present Government.

    When the Under-Secretary made the statement to which I have just referred, we were debating the method of collecting money which had not been collected. But I do not think that the hon. Gentleman confined his remark to this point. Therefore, I hope that we shall have from the Government some recognition that they still have not got it right. Let them prove the good intentions that they have expressed by accepting this clause which is based on the scheme put forward in Committee and which was never undermined by the Government. All that the hon. Gentleman said in defence of the Bill was that Government supporters believed that the Bill had got it about right. He did not set out to give a detailed defence of his approach to this matter, as opposed to the approach of the Opposition.

    The essence of our proposed scheme is that the possibility of financial penalty in place of surcharge and of disqualification should remain. But we have several important modifications to that. First, the full rigour which was required under the 1933 Local Government Act need not be exacted. The kind of modifications introduced in the 1972 Local Government Act should be applied in this Bill.

    Secondly, the guilt, if I may call it that, of an offending councillor would have to be clear beyond all doubt. I do not say that the Bill gives any reason to suppose that innocent people might be brought to book. But we have deliberately emphasised this point. We do not want anyone to suffer who has not committed an offence or defied the law.

    Thirdly—and this is very important—the decision whether penalties should be imposed should lie with the court, and that, in effect, will mean the High Court. This point was advocated during Second Reading in the eloquent speech by the hon. Member for Liverpool, Toxteth (Mr. Crawshaw), who said something which is bound to command a great deal of support; namely, that by putting this decision into the hands of a court, rather than into the hands of the Secretary of State or even of Parliament, it is possible to take this highly contentious matter to some degree out of the political arena. I submit that there is very good reason for doing so.

    It is also true that the courts are highly experienced in making the kind of assessments or judgments that would be required under our new clause, because that in effect is what they are doing the whole time. Given that we have landed ourselves in this very contentious political dilemma, in our view it would have been better to take the question of what penalties should be borne out of the hands of the politicians, who are inevitably caught up in this difficult wrangle, and put it into the hands of the dispassionate courts.

    Would the hon. Gentleman apply this principle only to cases where local authorities incurred wrongful expenditure or where they did not collect money that they should have collected, or would he apply it to cases where other public authorities did the same thing? Would he like the courts to take the effective decisions in both cases?

    That is an extremely general question. I am not clear what sort of example the hon. Gentleman has in mind. My approach throughout has been to look at the matter in a specific way, because we need a commonsense answer. We shall betray ourselves if we talk in terms of wide generalisations. I hope that the hon: Gentleman will forgive me if I do not give him a clear-cut answer on this point, because I do not think it is necessary to do so.

    Fourthly, I believe that our scheme overcomes the weakness of the Government's approach, because it would come into action only when the facts were known. Although the legislation would be completed before the facts were known, before the rent loss certificate had been issued and so on, nevertheless the actual decision about the type of penalty—whether there would be surcharge or disqualification—would be taken only when the facts had been brought to light through the procedure of the district audit. Because we have complained again and again that it is wrong to legislate with lack of knowledge of all the facts, it must be accepted as a powerful argument that it is much better to know what one is doing.

    Therefore, the essence of this approach is that once the rent loss certificate has been issued the district auditor would apply to the court. The court may, first, order that any person named could be liable to up to £1,000 towards meeting the deficiency, and, secondly, if the total loss in any particular area is over £2,000, it may impose disqualification of up to five years on those responsible.

    The differences between this approach and what would have prevailed if the Bill had not been brought forward are, first, that there is a maximum fixed to the amount of the liability. Moreover, the extent to which people would have to meet that maximum—in other words, the amount they would have to pay—would be determined in the light of the circumstances.

    Secondly, the raising of £500 to £2,000, as the point where disqualification may be incurred is quite simply a reflection of the change in the value of money over the passing of the years. However, coupled with this is the stipulation that one does not have to go the whole hog. If one disqualifies, one does not have to disqualify for the full five years. It is possible for the court to specify that in the circumstances it should be one year, two years, or three years, or whatever is the appropriate amount for the disqualification.

    I emphasize that under subsection (4) there would be no order if a councillor acted
    "reasonably or in the belief that his action was authorised by law."
    Subsection (4) also says that the court should have regard to
    "all the circumstances, including that person's means or ability to pay."
    Therefore, if the objection is made that the burden falls equally on the rich and the poor, the court has the opportunity—as it has in the not exactly parallel case of the ordinary fine—to make a decision about what is appropriate. Those who might argue that the people concerned were often very poor must recognise that there is this important qualification in our approach.

    4.45 p.m.

    Those liable to be affected by an order would have the right to appear and be heard in the proceedings. In other words, this scheme makes it possible to deal with those who defy the law in a way that is appropriate to the degree of their defiance, rather than under the perhaps too blunt instrument of the 1933 Act which allowed only a five-year period for disqualification and full surcharge. However, it sticks to the vital principle that a person must not be able to break the law with impunity, even if he has encouragement from the Labour Party in doing so.

    I can hardly believe that the hon. Gentleman is suggesting that the Conservative Party encouraged people to break the law created by the Housing Finance Act.

    How does the hon. Gentleman reconcile what he has just said with the fact that a number of councillors of one council were surcharged by the district auditor, asked to meet the Minister's civil servants in London and then let off the whole of the surcharge on the understanding that they would go home and be good boys?

    I do not know what the hon. Gentleman is talking about, but we shall have a chance to develop that point in the debate which is now taking place.

    During the course of the Committee proceedings the Under-Secretary argued and put forward the objection that the scheme that we were introducing would entail proceedings that would be long-drawn-out. Obviously, court procedure will take a little time; nobody would dispute that. We do not accept that there is any particular need for long-drawn-out proceedings, because the rent loss certificate would set out the essential facts.

    The Government's approach to this whole question is far more long-drawn-out when they propose to make it possible to spread the recovery period over no less than five years, with even the possibility of an extension. That five years would be five years of bitter resentment by those who derive no benefit from the refusal to implement the Housing Finance Act 1972. I should have thought that at least the hon. Member for Derbyshire, North-East (Mr. Swain) would know how bitter the resentment will be among people who are liable to have to pay the penalty for something they never did.

    The hon. Gentleman does not appear to have done his homework. Is he aware that in the year immediately prior to the refusal to implement the provisions the Clay Cross Council was the only council in England, Ireland and Scotland—the whole of Great Britain—which reduced its rates by 3p to the benefit of everyone living in the district?

    The hon. Gentleman should be careful about what he says in defence of the Clay Cross Council, but we shall have ample chance to discuss that matter when we reach Clause 4.

    If there is trouble in the court proceedings and if they take time--as I accept they may well do--that is the inevitable consequence of defying the law. We cannot get away from the fact that if people defy the law there are bound to be—or there should be--court proceedings, and they cannot necessarily be skimped.

    This scheme gives every opportunity to be reasonable, to be merciful and to ensure that bitterness is avoided. It substitutes a somewhat different notion from that of the surcharge as we know it, but it does so in the most fair and commonsense way that is possible. It also--and this is vital—upholds the view that it is utterly wrong for a Government to be able to come to the aid of their own political supporters in the way that is proposed in the Government Bill. That is the shame of the Government's approach. The Opposition's approach confirms that the law is there to be obeyed and that those who expect to defy it and to be let off must think again. Facile talk about wiping the slates clean is not enough. As the House knows, this is a very grave matter. I commend cur new clause to the House.

    It will probably be for the convenience of the House if I now give the Government's view of the new clause. The hon. Member for Aylesbury (Mr. Raison) has moved its Second Reading with fairness and moderation. If one can judge by his speech, the whole atmosphere is very different from the atmosphere on Second Reading of the Bill.

    I should like to be able to say that, having given full consideration to the new clause, the Government can accept it, but I cannot so advise the House. However, I acknowledge that it is a carefully constructed attempt, as one would expect from the hon. and learned Member for Southport (Mr. Percival), to mitigate the rigours of the law for the benefit of those who would otherwise have been surcharged and might have been disqualified for failure to implement the Housing Finance Act.

    To those persons, whether in the House or outside, whose consciences do not permit them to accept any retrospective concession in favour of those who fail to obey the law, the clause is the Opposition's answer. We must be absolutely clear about it. The existing applicable law, the 1933 Act, gives those who are surcharged the right to apply for a declaration that they acted reasonably or in the belief that their actions were authorised by law. It gives power to the Minister to relieve them of surcharge, wholly or in part, assuming the figure is right, and the declaration relieves them from disqualification.

    It follows naturally that, in putting forward the new clause, the Opposition must be saying that that is not sufficient in the circumstances of this case. They must be saying that, in the special circumstances of this matter, it is right not to be content with those provisions but to go much further by way of retrospective relief. We on this side of the House very much welcome that view. We think that it is right. Whatever may have been said on Second Reading, whatever extravagant language may have been employed here or outside, that is the official Opposition view, and we welcome it.

    Indeed, the clause implicitly accepts several of the assumptions underlying the Bill. The first is the need for legislation to deal with the aftermath of the Housing Finance Act. It is a pity that some of the Second Reading speeches used such language as "the most serious threat to our constitution", and did not spell out what we have always said, and what I said in trying to wind up the Second Reading debate, that if the Opposition had been in Government they, too, would have taken legislative action.

    Secondly, the clause accepts that there is no immutable principle which governs the period or even the facts of disqualification. This is quite new. The clause makes it purely discretionary. It retrospectively quadruples the minimum amount of deficiency which would otherwise, under the applicable law prior to the 1972 Act, have resulted in disqualification. We welcome that new principle.

    Thirdly, it accepts that that part of a deficiency which is not ordered to fall on councillors will be paid, as the Bill provides, by tenants or ratepayers.

    Therefore, the difference between our approach and that of the Opposition has become much clearer and much narrower than during those stirring and noisy hours during Second Reading. We say "Let us wipe the slate clean". The hon. Gentleman anticipated that phrase, which, incidentally, is not mine. It is that of Mr. Neville Chamberlain. We say "Let us have no ragged edges". The Opposition say "We do not ask for a pound of flesh but only for a few ounces".

    To get those few ounces, the Opposition provide that every case which would have been surchargeable must go through the courts. That is a new principle, which we cannot accept. We cannot see how it could possibly help the situation with which the Bill is intended to deal to have case after case paraded through the courts, irrespective even of the wish of those concerned.

    Our broad principle is, as it always has been, to let those who benefited pay. Certainly, to that principle we give the latitude, which the hon. Gentleman accepted today, the latitude given to local authorities to make their own decision as to whether these sums should fall on the rates. We know that that is a political decision which they will have to make. They will have to make it in full knowledge of the possible political consequences.

    The principle of the clause is to punish first and then recover from the beneficiaries or the ratepayers.

    The principle that we are advocating is "Find out". It is a large part of our objection to the Bill that it proceeds in absence of the facts. The first thing we are aiming to do is to find out the facts.

    That may be, but there is also the situation of punishing first and then recovering from the beneficiaries or the ratepayers, because until one knows the extent to which the surcharged councillors, or councillors subject to the equivalent of surcharge under the clause, will pay, one does not know to what extent one must recover. We believe that the result is the worst of both worlds. In particular, it fails to wipe the slate clean.

    5.0 p.m.

    We believe that the precedent for wiping the slate clean is clear and persuasive. Despite the many hours we spent on it in Committee, I make no apology for returning to it today. The background to the Audit (Local Authorities) Act 1927 was in many ways similar to the background to this Bill. Of course it was not identical. We would not expect the circumstances to be identical. Precedents are not—or, at least, very rarely—founded on identical circumstances. That Act, like this Bill, involved a substantial number of councillors—about 100 in all. Strong feelings were aroused about the events which led to the passing of that Act and which were similar to those leading to this Bill. The law was defied. Although for a time the law may have been in doubt, it became certain, and thereafter it was defied. Whatever may have been the original intention of those who put forward the Bill—Mr. Neville Chamberlain, the Minister of Health, and others—as it went through Parliament it was amended again and again to enable those councilors to be relieved of penalty who, even whilst the Bill was going through Parliament, continued deliberately to defy the law.

    That Bill and its amendments gave greater relief than does this Bill. It remitted, and enabled the Minister to remit, surcharges which had already been made—in that case for excessive payments. Here we are dealing mostly with deficiencies, but the principle is the same. Indeed the hon. and learned Member for Southport said:
    "I do not know whether there is much difference, but if one is worse than the other, unlawful expenditure is a bit worse than simply failing to do something."—[Official Report, Standing Committee D, 29th April 1975; c. 308.]
    He may well have been right. At any rate, in doing so, the Act relieved 97 councillors from the virtual certainty of prison, which, at that time, followed automatically from failure to pay a surcharge.

    The Attorney-General is employing a clever lawyer's argument. Could he not find an earlier precedent than that of Mr. Chamberlain? Is not there an earlier precedent than that of Mr. Chamberlain to advance to support his case?

    I am making the case which I have to make and which I believe is right, on the basis of a precedent which, in my view, as the House will hear, is perfectly strong and valid. It is not necessary to go back any further, although there may well be precedents nearer our time. Let me deal with one at a time.

    By a series of manoeuvres designed to wipe the slate clean even of the consequences of defiance carried on almost up to the Royal Assent, the Bill relieved councillors of the new penalty of disqualification written into the Bill itself which, in the original form of the Bill, they would have suffered if they had continued, as indeed they did, to defy the law. That original intention was removed by amendment. That amendment removed the penalty of disqualification from many.

    The Bill was introduced in May 1927. Over two years earlier, in April 1925, the House of Lords held that the overpayments were unlawful. Honourable Members have reminded the House of the times in which we live today. The year 1927 was not a shining example of peace within the United Kingdom. The Minister wished to remit all the overpayments, but in February 1927 the court unexpectedly said that he could not do so in the case of those surcharges which had already been the subject of action in the courts. Therefore there were two classes of overpayment—those which the Minister could remit under the existing law, because they had not been the subject of court proceedings, and those which because they had been the subject of those proceedings, he could not remit. In that difficult situation and dilemma the Minister decided to legislate to solve the problem.

    I accept the point made in Committee that the Bill introduced a new penalty of disqualification, but in solving the problem as a matter of urgency it was the circumstance of continuing defiance of the law which called upon the Minister to bring in that legislation—indeed within a few weeks of the decision in the Dore case. That was the main purpose of that Act. I adhere to the view which I expressed before. A general change in the law was made. The main purpose was to deal with a situation comparable to that with which we are dealing in the Bill today.

    In its original form the new penalty of disqualification would have applied in every case except where audit had begun and surcharge resulted before 1st April 1927, that is to say, shortly before the introduction of the Bill, which was in May 1927, when it was generally known that the Bill would be introduced. The whole basis upon which that was justified was that the measure was known about because there had been publicity. On Second Reading it was pointed out to the Minister that councils were still paying out illegally. To that he replied:
    "I think that where warning has been given, and everybody knows now that there is to be a change, it would be unreasonable to say that people who went on disobeying that warning should escape."
    In general that was an impeccable sentiment. In case there was any doubt about his meaning he added that
    "the date of the final decision of the House of Lords is known, and that is really the date from which everybody knew what the law was."—[Official Report, 15th June 1927; Vol. 207, c. 1034.]
    that is to say, April 1925.

    With that statement I entirely agree. Mr. Chamberlain said that everybody knew the law from April 1925. I agree. Any over-payments made after that date could only have been in plain defiance of the law. Mr. Chamberlain said that it would be unreasonable to allow to escape disqualification—though it was a new penalty—anyone who defied the law after the decision of the House of Lords.

    About two weeks later the Bill was in Committee. In Committee, a proviso was inserted into the disqualification clause. The purpose of that proviso was to do the very thing which the Minister, only a week or two earlier on Second Reading, had said was unreasonable because it exempted from disqualification any councillor who had been or would be surcharged in respect of any expenditure or loss incurred before 31st October 1927—some months ahead.

    As a result of that, the test for exemption from disqualification was no longer audit before the Bill was introduced, but overpayments in deliberate defiance of the law so long as they were made no later than three months after the amendment, nearly six months after the introduction of the Bill, and two and a half years after the date when, as the Minister clearly said, everybody knew what the law was and that it would be unreasonable to allow those who went on disobeying it to escape disqualification. Plainly, he regarded the greater evil as leaving ragged edges, or a slate which had not been wiped clean.

    I am sure that the right hon. and learned Gentleman does not wish to mislead the House. He said that the proviso to which he was referring was introduced in Committee. If he looks again, he will find that it was not. The proviso was in the original Bill, but the date in the original proviso was 1st April 1927. The Committee proceedings were on an amendment at that date to substitute 31st October, that date being designed to give the Poplar Council the opportunity to give proper notice to terminate its contract with the trade union. Is that not a very different state of affairs from what the right hon. and learned Gentleman has just presented to the House?

    I do not know what the hon. and learned Gentleman is quarrelling with in relation to what said.

    The date in the proviso, originally 1st April 1927, for the reason which I gave—that people already knew that this legislation was coming forward—was altered to 31st October of that year because, and only because, by doing so certain councillors would be protected from disqualification, notwithstanding their deliberate defiance of the law. If the hon. and learned Gentleman can show that is wrong, he will have his opportunity to do so, but I am satisfied that it is right and that there cannot be any doubt about it.

    The retreat had begun. It was a retreat, be it noted, specifically related to disqualification of those who had deliberately defied the law.

    Let us now turn to the surcharges and we shall see how the retreat progressed. On Second Reading the Minister had said that, until the House of Lords decision, councillors may have been uncertain of the law. He continued by saying that
    "it was on that ground that I considered in this case it was proper for me to remit that surcharge, although, of course, the law having once been decided by the House of Lords, it would not have been proper for me to remit a surcharge if the council had gone on paying those wages, after it did actually know the law."—[Official Report, 15th June 1927; Vol. 207, c. 1029.]
    5.15 p.m.

    In our Committee discussions the hon. and learned Member for Southport did his best to escape from the precedent of the 1927 Act. Indeed, he argued that the law was not clear until the judgment in the Dore case in February 1927, which was the immediate reason for bringing in the Bill. Even if that were so, it would not help his argument, because the Minister in fact remitted overpayments which had been deliberately made up to 31st October 1927, which was eight months after the Dore case. But that is not right. The hon. and learned Gentleman was clutching at straws when he put forward that argument, because we have what the Minister said in the debates. It was he who said that the law was clear, and he had no doubt about it, from April 1925, the date of the decision in the House of Lords. In the clearest possible terms he said that it would not be proper to remit a surcharge if the council went on overpaying after the House of Lords had made the law clear.

    The Minister found himself squeezed into the position that he could not achieve his objective of wiping the slate clean unless he was prepared to remit surcharges in respect of unlawful expenditure incurred long after the House of Lords decision. He did it in three ways—first, by exercising his power to remit under the old law, whenever he could; secondly, by the direct operation of the 1927 Act, whenever that applied—and he did his best to make it apply to every case that supervened upon the introduction of the Bill—and, thirdly, by an ingenious mixture of the two. He did it directly by legislation through Section 2(6), which automatically cut off enforcement proceedings for surcharges in mid-stream and by amendment of Clause 4 so as to leave intact his powers under the old law where illegal expenditure was incurred before 31st October 1927. That was a late amendment to the Bill.

    The Minister, having given himself the power to do that, notwithstanding that the expenditure was in the class which he had said could not be justified because the law was known, then used those powers up to as late as August 1928 to remit surcharges on Poplar councillors of over £17,000 for the year ended 31st March 1927 and over £8,500 for the year ended 31st March 1928; that is, expediture incurred up to 31st October 1927. Those accounting periods were respectively one to two years and two to three years after the House of Lords had made the law clear and the Minister, in his original words, had said that he could not justify remitting the surcharge.

    I am not criticising the Minister of the day. He took a commonsense path. He fulfilled his objective of wiping the slate clean. Of course, he might have taken some such course as is proposed in the new clause, but he did not. In order to wipe the slate clean he found himself constantly amending the Bill and relieving councillors of surcharges, exempting them from disqualification, and, indeed, saving from imprisonment, at any rate, 97 councillors and others, many of whom, as I have said, continued to defy the law after it was made clear.

    The Bill was backed, and I assume that his actions were approved, by the distinguished Attorney-General of the day, the future first Viscount Hailsham. At any rate, Sir Douglas Hogg, as he then was, saw no reason to resign.

    On Third Reading the Minister delivered himself of the most impeccable sentiments, which have been more than once quoted in our debates, to show that he did not intend to condone defiance of the law. It may not have been his intention, but his actions in those circumstances spoke louder than his words, for condone it he did.

    I maintain that, faced with a problem as difficult as that of my right hon. Friend, and in many ways similar to that problem, the then Minister found a similar commonsense solution. In circumstances like those and these the better course is not the course that the Opposition propose, which will result in court case after court case, but rather to cut off and wipe the slate clean.

    Has it ever occurred to the right hon. and learned Gentleman as he recites these precedents that if one bases one's argument wholly on precedent, as he is doing, one will be in no position at all to resist people who break the law in future? They will simply spout again the precedents which the right hon. and learned Gentleman has spouted to the House and the Committee. There will be absolutely nothing to fall back on. Therefore, if the argument is based entirely on precedent, as it apparently is in the right hon. and learned Gentleman's eyes, he is undermining the law not merely on this occasion but for future occasions.

    I am grateful to the hon. Gentleman. I shall be coming to that very point in a minute or two.

    I was referring to the Opposition's argument that the purpose of Mr. Chamberlain's Bill can be distinguished because it set up a new system, that of disqualification and so on. Of course it did that, I agree, but I ask the Opposition what real difference that makes. Mr. Chamberlain's Bill plainly removed, and enabled him to remove, the penalties for defiance of the law, and he did not hesitate to do so.

    What does it matter that in doing so he introduced this new system? If the present Bill made some general change in the law regarding audit—improvement, it may be—in addition to what it now does, would hon. Members opposite abandon their opposition to it? Of course not. No doubt we could have done that. I do not believe that it would have been an open or frank thing to do, because we know the purpose of this Bill. Mr. Chamberlain undoubtedly had the purpose in his Bill of deflating a situation in which about 100 councillors, many of them very popular councillors, were deliberately defying the law, and he added to the Bill to do so a provision for disqualification.

    We have argued over other precedents. I believe them to be valid, but I do not believe that the House would be helped if I spent much time pursuing them in detail now. The 1927 Act, in my view, is the clearest precedent that one could have.

    Turning to the point which the hon. Member for Aylesbury properly made, a point which I do not shirk, I do not suggest that the existence of a precedent means that it must be followed; nor, indeed, looking at it from the other side, that the absence of a precedent has the opposite effect. If one took that view there would never be any precedents. I do not suggest that a precedent is a substitute for one's own judgment, but it is an indication of how Parliament has looked at a comparable situation in the past, and, therefore, it is something that we are entitled to take into account and to derive benefit from when trying to solve a similar problem.

    I do not suggest that there are no ways other than ours of solving the problem. This is a real problem, as the hon. Member for Aylesbury has fairly, frankly and frequently agreed, today and in Committee. It exists, however distasteful that may be. I believe that our solution is as fair as it can be. It will not be improved by departing from Mr. Chamberlain's principle, that once one starts wiping the slate clean one had better finish the job. That is the basic reason why I cannot accept the new clause, well-intended though I agree it is. If it is pressed to a Division, I invite the House to reject it.

    Like the murderer in "Macbeth", I expect, the word "Amen" has stuck in the Attorney-General's throat. Notwithstanding the sweet reasonableness and the gentle tone of his reply, he will not hide from us or from the country the fact that the Bill is a thoroughly sickening measure. I have no doubt that the Attorney-General suffers from embarrassment about it, just as I am sure that many Labour Members will come to regret the day that they ever supported this measure. I believe that many will, even today, be thoroughly ashamed of the course which they may be taking.

    It is a sickening measure simply because it treats the rule of law with utter and complete contempt. It is not just that people who deliberately defied the law hoped that they might be able to avoid the consequences of their wrongdoing: they were encouraged so to think. They were complimented by a leading member of the Labour Party at a meeting of the National Executive—a man who is now a senior Minister.

    I am obliged for the help. This is not a Second Reading debate. Perhaps the hon. Member for Burton (Mr. Lawrence) will address himself to the new clause.

    I was addressing myself to the clause, Mr. Deputy Speaker, and prefacing my remarks with the reason why I felt so strongly that it should be accepted.

    It is precisely because this measure is a contempt for the rule of law and because the new clause which my hon. and learned Friend the Member for Southport (Mr. Percival) has devised with great skill and ingenuity upholds the rule of law, and, as my hon. Friend the Member for Aylesbury (Mr. Raison) said, tempers justice with mercy, that the clause should be accepted.

    The new clause upholds the rule of law in two respects. First, it places emphasis upon the courts of law and gives them a function in the fair ordering of the unsatisfactory state of affairs which has resulted particularly in being merciful to councils which have not wilfully continued to defy the law. Also, it underlines the principle, which is important at this time in our history, that councillors everywhere must be subject to the rule of law. It was never as important as it now is because, as we read in the papers and as we have seen from what has happened in recent months, there is unfortunately in some councils a slide from respect for the rule of law. There has been an abuse by councillors in some parts of the country of the powers vested in them under the law. Councillors have to exercise far greater power, particularly in planning matters, than they have ever exercised in the course of the development of those councils.

    Does the hon. Member want the same sanctions to apply to Ministers?

    5.30 p.m.

    The sanction of the rule of law must apply to everybody. I am merely underlining the fact that councillors must now be made aware of the fact that Parliament, of all places, will not tolerate any abuse of the rule of law. That is particularly important since the rule of law is beginning to slip throughout the country, and it is, therefore, all the more important that we dig in our heels and safeguard and enforce the rules. That is why the clause is so important.

    I listened with care to what the Attorney-General said and with the respect that a junior member of the Bar always accords to the leader of the profession. However, I found his objections to the clause pitiful. He has gone back again on the plea of Labour Members that the slate must be wiped clean. For years I have been defending villians in the courts of this part of the world—

    They would have loved to have the slate wiped clean. Everyone who offends against the law and then sees the consequences of the law visited upon him wants the slate wiped clean, particularly if the wiping of the slate means that he does not have to suffer the consequences of his lawlessness. We are prepared to see the slate wiped clean for those who did not deliberately and wilfully continue to transgress. But that is not what Labour Members want. The rule of law means that those who wilfully offend against the law with the full knowledge of the consequences will not have the slate wiped clean and that the consequences must follow.

    The second argument to which I take exception and which the Attorney-General has advanced in criticising the clause concerns precedent. I will not even begin to touch on the arguments which occupied hours in Committee and which were based on precedent. The Attorney-General has been shown to be particularly weak in his reliance upon precedents. Just now he said that he was not completely relying upon precedent and that in the end he relied upon his own judgment. In Committee, however, he relied for hours upon precedent, and upon feeble precedent at that.

    I will not go through the argument, but we do not accept that what Mr. Chamberlain did in 1927 is a precedent for what the Attorney-General is seeking to do now. Two wrongs cannot, do not and will not make a right. If Mr. Chamberlain's action in 1927 was the same as the action which is contemplated by the Bill it was equally a contempt for the rule of law and it was equally wrong. The Attorney-General has said nothing to persuade me that our new clause is wrong, and, therefore, I support it.

    If this new Clause were being proposed as an amendment to the normal legal provisions which govern the surcharging of councillors I for one would greatly welcome it as an improvement on the existing law. The Opposition, and particularly the hon. and learned Member for Southport (Mr. Percival), have done the House a service in devising this flexible and more responsive procedure which should supplant the more rigid provisions in the 1933 Act and the 1972 replacement of it. The question is whether it is apt for dealing with the consequences of the Housing Finance Act.

    I say categorically that I deplore the action of the Clay Cross councillors and the other councillors throughout the country in choosing to disobey the law as it was clearly laid down. It is at present overwhelmingly necessary in a country where the democratic machinery is working to adhere to the law and for the consequences of not doing so always to be more severe than the consequences of doing so, however much one may deplore that law. My borough council faced the problem and, although it had great misgivings, it decided, I am glad to say, to adhere to the law.

    It is utterly to be deplored when any politician pretends to hold out the hope of absolution for transgressions of the law in the future. No hon. Member is entitled to say that his Government or the House of Commons will be prepared to pass legislation which will confer that absolution for acts done or to be done. However, the question is whether the particular circumstances of the Housing Finance Act and its consequences are quite as simple as to fit into the principles I have just enunciated.

    It sticks in my craw to hear the excitable speeches from the Opposition, to which we have not been treated today but which we heard on Second Reading, which suggested that it is a fundamental principle of this country, always applied, that when a public official—using that word generally to include Ministers—trangresses the law and by so doing places a burden on public funds, he is always made to answer for it out of his own pocket. That is not the case, and it ought to stick in the craw of the hon. Member for Aylesbury (Mr. Raison) to claim that it does.

    If I remember correctly, the hon. Member had some peripheral connections with Northern Ireland affairs in the last Conservative Government. He might recognise the parallel which I propose to draw. I do not propose to go in detail into the matter of interrogation in Northern Ireland in the period between 1971 and 1973 because that would be out of order. However, I intend to refer to it for its relevance to what is before us here. Here we are considering the sanctions which we, the national authority, should apply against representatives in local authorities who defy the law and impose a burden on public funds.

    It is, therefore, relevant to consider how the House deals with its own. What do we do in respect of a member of the executive at national level who transgresses the law or who is in charge when the law is transgressed and condones, positively or by his admission, activities which result in public expenditure? I refer, of course, to the fact, which perhaps many hon. Members have not picked up, that no less than £90,500 has so far been spent by way of compensation to people in Northern Ireland who were victims of what was euphemistically called "interrogation in depth"—that is, torture.

    I will not go into the argument whether it is torture because I have the authority of the former Lord Chief Justice of England for condemning the actions as illegal, which is all that matters for this purpose. [Interruption.] Hon. Members may put their own interpretation upon that. I refer hon. Members to page 14 of the report, where Lord Parker asserts:
    "The procedures were and are illegal.
    More relevant to this clause, he says on page 13:
    "If any document or Minister had purported to authorise them, it would have been invalid because the procedures were and are illegal by the domestic law and may have also been illegal by international law."
    We have had the case before us recently, to which surely in considering these matters in the Bill we must pay attention, of whether we have required the Minister who was responsible on that occasion to foot the bill for his transgressions.

    The hon. Member for Rutland and Stamford (Mr. Lewis) says that the Minister did not know about it. Alas, it is a worse offence to be the man in charge who does not make the inquiries and does not wish to know but commits acts of torture. That is as far as I want to go into the matter of substance. It is a clear parallel. If we are not prepared to make Ministers at national level answer for the charges which their illegalities have placed upon public funds we might just hesitate for a moment before we conclude that making people pay for the financial consequences of their illegalities is a fundamental principle which ought to apply through all our proceedings.

    When I read time and again the serials in the vendetta of Mr. Levin against the Attorney-General I wish he would turn his loquacious intellect to the subject matter that I have mentioned and call for Lord Carrington to pay out of his rather more ample pockets the £100,000 which his illegality has forced on public funds.

    I have found it difficult to establish whether in law in this country Ministers are personally responsible, and can be personally sued for, the illegalities which they commit in the performance of their official functions. I am clear of only one thing as a result of my researches, and that is that the point is obscure. It looks to me as if it is possible for Ministers to be sued in this way.

    That brings me to my next point which is more clearly relevant. The question is whether the responsibility for incurring this expenditure attaches exclusively to the councillors in question or is a shared responsibility. The answer is surely that it is a shared responsibility. The councillors were guilty of the initial breach of the law. But the extent of the financial consequences of that breach was the doing of the then Minister for Housing and Construction the right hon. Member for Brighton Pavilion (Mr. Amery). He was given by the Housing Finance Act the power to appoint a housing commissioner. He was given that quite clearly for a purpose.

    Order. I have been trying to follow the relevance to this clause of what the hon. Gentleman is saying. I know that he will quickly come to the point.

    5.45 p.m.

    When we are considering whether the relatively rigorous content of the new clause should apply rather than the relatively less rigorous content of the Bill as it is, it is surely relevant to consider the extent of the blame which attaches to the councillors in question and whether that blame attached only to them or was shared by other authorities, in this case another authority clearly under the control of the House. It is on that point that I want to dwell for a few seconds.

    Is it not a fact that the councillors concerned were continuously warned by officials of the council but took no notice? If that is the case, as reported in the Press, how can a higher authority be held to be responsible?

    If the hon. Gentleman will pay me some attention I will try to explain. The Housing Finance Act conferred upon the Minister a power, not an obligation, to appoint a housing commissioner. It did not do that for fun. It did it for a clear, implied purpose, which was that if there was a local authority that was defying the Act Parliament wanted to ensure that by some substitute method that defiance could be curtailed and corrected. The question arises in the most extreme form when we ask whether the Minister could have been brought to book legally for not using the power which was conferred upon him by the statute.

    Order. We are straying very wide from the new clause. There will be plenty of opportunity for wider issues, as will be seen from the Order Paper. We must deal with the merits of the new clause and Amendments Nos. 14 and 15.

    I would be approaching this matter in a very curious way if I did not think that it was relevant, in deciding to what extent we should apply these sanctions, to ask whether the responsibility was shared with a Minister. These sanctions—

    Order. The hon. Gentleman just cannot do that. It is quite clear that this new clause, which the hon. Gentleman and the House will have read, does not deal with the Minister or his authority. I must ask the hon. Gentleman to confine himself to the new clause.

    With the greatest respect, Mr. Deputy Speaker, I would ask you to consider this proposition. We are frequently talking about matters in debate when we have to envisage issues which are not referred to in words in the provision before us. We decide whether to make a provision as to such-and-such an effect and naturally—we would be failing in our duty if we did not—we bring in such considerations as are relevant in deciding whether that provision should be enacted. I suggest that it is relevant to the degree of rigour of the sanctions to ask whether the responsibility was exclusively confined to the councillors or was a shared responsibility between the councillors and the Minister. I can assure you, if it assists, that I have no intention of uttering more than a few sentences on this point. Indeed, I would probably have concluded by now had I been allowed to continue. I suggest that it is relevant to a consideration of these provisions—

    I have been enjoined by the Chair to be brief, and I never defy the Chair. I would be grateful if I could be allowed to develop my remaining few sentences in peace.

    I suggest that it is arguable, on the basis of one case, which was Padfield v. the Minister of Agriculture in 1968, that the Minister could even have been required to exercise his functions under the statute to minimise the loss to public funds that would otherwise occur even though the statute gave him a power and did not impose upon him a requirement to exercise that power. I also suggest that if anyone had referred this case to the Parliamentary Commissioner—so far as I know, no one has done so—it is conceivable that the Parliamentary Commissioner would have ruled that there was maladministration in the Minister's not exercising his powers. That is conceivable, because if he had done so the loss to public funds and the burden upon rents, rates or taxation would certainly have been less than it is now.

    Is it not a fact that it was clearly the case at the time that there was an alternative power and that the Minister, in exercising his judgments as to which power to use, also had to consider which power would be more effective in all the circumstances of the case?

    It is obvious that the Minister's decision was not effective in minimising the cost. If the Minister had intervened in the manner permitted to him, and almost enjoined upon him, by the Act, the non-collected revenue would have been enormously less than the deficiency which resulted. Those two points persuade me that it was a shared responsibility.

    First, it is arguable that the Minister could have been legally compelled to intervene if somebody had taken a case on the basis that I have described. Secondly, the Parliamentary Commissioner could well have ruled that it was maladministration on his part not to exercise his powers. If that is the case—

    The point that the hon. Gentleman is making is utterly fallacious. It is the very point that was taken to the Court of Appeal by the Clay Cross councillors in one of the stages of their developing opposition. It is the very point that was dealt with by the court when it held that the Minister's action in this regard was perfectly lawful.

    I have told the supposedly learned hon. Gentleman before that I am always moved to wonderment by the errors committed on these matters by those who have acquired a legal education. As I understand it, all that was at issue in the legal proceedings was whether the surcharge was correct and whether it should be enforced. I do not think that the court had any right to inquire whether the Minister could or should have exercised his functions. That is a separate question to which the House will address itself when deciding how complete the responsibility of the councillors is in this matter.

    I persuade myself rather reluctantly on the grounds that I have brought forward that the responsibility is a shared responsibility. Therefore, the situation is as messy as we all know it to be. In those circumstances, but not in any normal circumstances, it is right on this occasion to use this unusual legislative device to wipe the slate clean.

    I am obliged to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) for the few observations that he made on the new clause, which were wholly favourable to it. I hope that he will forgive me if I do not take up all the other matters that he raised, their connection with this matter being rather slender. I hope also that neither the hon. Gentleman nor the House will allow themselves to be distracted from the issue raised by the new clause by the very many other interesting subjects. I am not trying to belittle them; they are interesting matters. On some of them I think that the hon. Gentleman was wrong. My hon. Friend the Member for Burton (Mr. Lawrence) referred to one such matter. Of course there are matters of substance to be followed up in another context.

    I hope that the House will want to come to a decision fairly quickly on the new clause. I appreciate what the hon. Gentleman said about the new clause. I hope that he and others will appreciate that what he said about it is a good argument for voting for it when the opportunity arises.

    Anxious as I am to say something about the further speech of the Attorney-General and although it is a great temptation to follow him along many of the paths that he trod, I shall resist the temptation to be anything like as long as the right hon. and learned Gentleman. However, if he thinks that we feel any less strongly about this measure or any less strongly about his part in it, he is wrong. We feel equally strongly about both as we ever have done.

    The Attorney-General was seeking in his opening observations to suggest that there is not much difference between us now that we have tabled the new clause, That is either disingenuous or downright misleading. There is still the world of difference between us, and I cannot believe that the Attorney-General does not see it.

    As it stands, the Bill relieves indiscriminately and from all penalty, be it financial or disqualification, an unknown quantity of unknown persons, all of whom will have so defied the law that the already generous provisions for relieving them will not suffice. That is why it is necessary to have this legislation. It relieves those concerned of all penalty and it deprives the public of all protection from a repetition of similar conduct.

    I suggest to the Attorney-General and to the House that there is the world of difference between a Bill which does that and a Bill which would do what this Bill would do if the new clause were added to it. The new clause preserves penalties both financial and by way of disqualification, but accepts that in the circumstances of the situation relating to events following upon defiance of the Act there may be call to deal with the particular situation in a particular way. We are absolutely and fundamentally at odds with the Government because we say that it is totally wrong to do what Clause 1 does. Clause 1 does a hundred times as much as Clause 4 by relieving all the councillors who, despite the generous terms of the present law, would still be liable to be penalised. It relieves them of all those penalties and does not substitute any other kind of penalty.

    How did the Attorney-General seek to persuade the House that it should not accept the new clause? I suggest that he did so by putting forward a series of totally specious arguments about the clause. There would be no difficulty in operating the clause if it were introduced. As my hon. Friend the Member for Aylesbury (Mr. Raison) has said, it would dispose of the whole matter a good deal quicker than what is proposed by the Government. The Attorney-General has spoken about an endless series of cases going to the courts. So far as we know, there are a total of about 400 councillors and about 12 councils, so there are possibly 12 cases to be dealt with by the courts. That is not a high price to be paid for finding the right solution.

    I suggest to the Attorney-General that the arguments he has advanced directed to the clause are totally unconvincing. The clause would provide a simple way of dealing with the matter, a way which would remove all the political angle. One of the troubles with the way in which the Government are proceeding is that they will lay themselves open to the suggestion—and many feel that it is much more than a suggestion—that this is a political party safeguarding its political friends. The simple way to avoid that is to take it out of the political arena and put it into an arena in which the persons concerned are well versed and well experienced in dealing with situations like this. Why not do ourselves the favour of taking out some of the political heat? It is nonsense to say that this is a complex, prolonged and difficult procedure.

    6 p.m.

    I am sure that the hon. and learned Gentleman appreciates that if the new clause were adopted the result would be that for many months and possibly years actions would go from court to court and to the House of Lords. It is ridiculous to talk about its being a simple measure.

    I do not accept that. I am told that the number of councils is 18 rather than 12, but we do not know whether those 18 would have been surcharged or would be the subject of a rent loss certificate. In some cases it is still to be decided whether they are to be saved by the Newcastle amendment or by other considerations, but at the outset there are 18 to 20 cases. I do not accept that the procedure need take anything like as long as the hon. and learned Gentleman suggests, and I reject that argument.

    In addition to taking this matter out of the political arena, the procedure we are putting forward has the further positive advantage of enabling those who are being dealt with to make representations to the court. That is a most important consideration. The Attorney-General's principal reason for rejecting the cause seems to be his reliance on the precedents to justify what is being done. I am astonished that he persists in that view and puts forward so many bad arguments in support of it. He even said that in many ways the background was similar. It could not have been more different.

    If the right hon. and learned Gentleman will look at the cases as I have done, he will find that it was accepted by the district auditor and by the courts at all stages that the Poplar councillors genuinely believed that what they were doing was permitted by law.

    The hon. and learned Gentleman should not from a sedentary position say "rubbish".

    No. The hon. and learned Gentleman cannot get up until I have finished. The facts to which I refer come from the cases.

    I should not have said "Rubbish", I should have said "Entirely misconceived". In Committee I gave the hon. and learned Gentleman chapter and verse showing that he was completely wrong in what he said.

    The hon. and learned Gentleman knows what I think of the so-called chapter and verse he gave me. It is not nearly as good as the chapter and verse I have quoted. I can only invite hon. Members to look for themselves.

    I should like to know precisely how the hon. and learned Gentleman puts this point. It is right that the matter out of which the 1927 Bill originally grew was the audit of 1920–1921, which subsequently was the subject of the House of Lords decision and then the Dore decision. Does not the hon. and learned Gentleman agree that I am right in saying that by amendment of the Bill as it went through Parliament the Government of the day enabled themselves to remit surcharges for the periods 1925–1926, 1926–1927 and 1927–1928, which was long after that time and long after the House of Lords decision?

    No, I do not accept that, and I shall give my references. If interventions are to be of this length, I shall have to decline to give way, put forward my propositions, sit down and invite the House to vote.

    The Attorney-General talked of defiance. How many right hon. and hon. Members have compared the different kinds of law breaking? In the Poplar case the argument was whether the councillors were breaking the law when they paid wages which were higher than the norm—and not all that much higher. They were relying on an Act which said that they could pay such wages as they thought fit. The question was how wide that discretion went. It was a difficult question of law. At all stages it was accepted that the people concerned did what they did in the belief that they were entitled to do so.

    This case is totally different. In this case, councillors refused to carry out the mandatory requirements of Parliament, refused to collect stipulated increases and refused to give benefits to the least-well-off members of the population. The second case is properly called defiance and the first is not.

    The Attorney-General said that the Bill was amended time and again to bring about further remissions. It was not. The proviso of which he spoke has nothing to do with the remission of penalties. It relates to disqualification. In the first instance, the Bill provided that nobody should be liable to disqualification in respect of something done before April 1927. That date was changed to 31st October because the passage of the Bill took longer than was expected and everyone agreed that it would be wrong to make a person liable to be disqualified in respect of an act done when he had no reason to suppose that it might attract that penalty.

    Section 2 (6), to which the Attorney-General referred, is limited specifically to the cases which had already been brought before the court. In relation to those cases there was a particular difficulty. Everyone, including the Minister, had thought until 14th February 1927 that even if the court declined to act in those cases the Minister could remit. It was decided that that belief shared by everyone was wrong. Therefore, the persons who had taken the course of referring the proceedings to the court in that belief found that they were denied one of the remedies which everyone thought they had, and something had to be done about it.

    Section 4 merely refers to the date upon which the remaining provisions of the Act came into force. According to the report with which the Attorney-General's officials have kindly supplied me, 31st October was introduced into Section 4 as well as Section 1 because the Labour Members of the Opposition said that the Act ought not to come into effect so early because there were still matters to be sorted out. The date of 31st October 1927 was chosen because Miss Lawrence informed the House that the Poplar council was having a meeting that night with a view to terminating the agreement it had with the trade union and getting the wages on to the right level. She said that to throw the agreement aside would cause resentment and that it would take three months to terminate it. The Conservative Minister said "So be it", and the time was extended until 31st October.

    The hon. and learned Gentleman can wag his head as much as he likes, but it is here in black and white. I invite him not to get so excited but to read it.

    The hon. and learned Member for Southport (Mr. Percival) has read the Act. Surely he cannot possibly deny the fact that the amendments which were made to Clause 4 on Report were amendments which saved the old law and thereby enabled the Minister to remit surcharges for 1926, and 1927—well after the House of Lords cases—of £17,000 in the case of Poplar for the first year and half of that sum for the second year because it covered only a half-year period. That was the intention, and that was, in fact, done.

    The Attorney-General is right to the extent that the effect of the amendment was exactly as I have described. The new provision did not come into effect in relation to any act done before that date. That meant that any surcharges, other than those which had been taken to court already and which are dealt with in Section 2(6), would remain to be dealt with under the law as it then stood. I would remind the Attorney-General that under the law as it then stood the only power of remission was contained in Section 4 of the Public Audit Act 1848. Under Section 4 of that Act the Minister could remit only if, in the circumstances, it was fair and equitable to do so. That was subject to review by the courts, as was made clear in the judgment in the case of Dore.

    What the Bill is doing here is quite different. We are taking all of this right out of the law and right out of the courts' supervision and relieving everybody, regardless of what they did.

    I want to make one other point on the question of precedents. The Attorney-General has said that the 1927 Act was the clearest precedent we could possibly have. I ask him to reconsider that in the light of what I am about to say. He said in Committee,
    "The purpose of the 1927 Act was to remit those surcharges which the Minster could not lawfully remit, as a result of the Dore case, by executive act, because there had been an appeal to the court in relation to such surcharges."—[Official Report, Standing Committee D, 15th April, 1975; c. 95.]
    It is so misleading. That was not the purpose of the Act at all. The purpose was to introduce a new penalty and a new safeguard for the public—namely, disqualification.

    When the Minister, in introducing the 1927 Act, referred to the question of surcharges which had already been referred to the court, he did so only towards the end of his speech, when, after having explained the purposes of the Bill, he said,
    "It only remains to consider what is to happen in the cases of surcharge which either are before the Courts or have been decided actually by a Court—the cases of Poplar, Bethnal Green and Woolwich I have already mentioned."—[Official Report, 15th June 1927; Vol. 207, c. 1033.]
    It is so misleading to say that the purpose of the Act was to remit these surcharges.

    I shall close with these further quotations which will show the House, in the words of the Minister in charge at the time, what the purpose of that Act was and the extent, if any, to which it was a precedent. Mr. Neville Chamberlain concluded his Second Reading speech in these words:
    "It must be clear that no member of a local authority who is doing his duty within the powers given to local authorities by Parliament has anything to fear from the operation of this Bill. The only people at whom this Bill is aimed are those people, if there be any such, who wish to go further than the law allows them, and who wish to set up a counter authority to Parliament."—[Official Report, 15th June 1927; Vol. 207, c. 1034.]

    6.15 p.m.

    No. Towards the end of his Third Reading speech, the Minister said this:

    "The fact is that, in practice, there will not arise any serious doubts in the future as to what is or is not likely to bring such a surcharge as would disqualify a member of a local authority from service for five years. I think no man who takes reasonable care, who understands his business and responsibilities, need be the least afraid of any dire consequences resulting from this Bill. No one who can show that his action was reasonable, or that, in his belief, it was justified, will be disqualified, and if he can show that he ought fairly to be excused, apart from the disqualification the surcharge itself will be remitted. On the other hand, those who cannot show either that their action was reasonable or that they thought they were acting in a justifiable manner, that is to say, those who must admit"
    —as all the councillors here must admit—"
    "that they were deliberately and intentionally acting in defiance of the law, cannot be fairly excused from the surcharge, and ought to be taken out of the local administration of this country."—[Official Report, 13th December 1927; Vol. 211, c. 2124–25.]
    The purpose of the 1927 Act was the exact opposite of the purpose of this Bill, which is to relieve these persons of the very consequences which the 1927 Act was intended to visit upon them, particularly in circumstances such as those which obtain here.

    No I shall not. It is deplorable that the Attorney-General should persist in relying upon such argument that the one Act is a precedent for the other. I invite the House to vote infavour of this new Clause.

    I shall detain the House for only one minute because I do not think that the hon. and learned Member for Southport (Mr. Percival) ought to try to get away with remarks such as he has made. Nobody said that the purpose of the 1927 Act was to remit surcharges. He has repeatedly said that as if we had put that argument forward. We did not say that. What we said was that the effect of that Act, by extending by amendment to the end of October—

    No, I shall not give way. The hon. and learned Gentleman would not give way to me. Why should I not return the compliment?

    I want to make it quite clear that the effect of the 1927 Act was that by an amendment made later there was a remission of surcharges to the end of October. That meant a remission of surcharges

    Division No.203.]

    AYES

    [6.18 p.m.

    Adley, RobertFraser, Rt. Hon. H. (Stafford & St)Lawson, Nigel
    Aitken, JonathanFreud, ClementLester, Jim (Beeston)
    Amery, Rt. Hon. JulianGalbraith, Hon. T. G. D.Lewis, Kenneth (Rutland)
    Arnold, TomGardner, Edward (S Fylde)Lloyd Ian
    Atkins, Rt. Hon. H. (Spelthorne)Gilmour, Rt. Hon. Ian (Chesham)Loveridge, John
    Awdry, DanielGilmour, Sir John (East Fife)McAdden, Sir Stephen
    Banks, RobertGlyn, Dr. AlanMcCrindle, Robert
    Beith, A. J.Godber, Rt. Hon. JosephMacfarlane, Neil
    Bennett, Sir Frederic (Torbay)Goodhart, PhilipMacGregor, John
    Benyon, W.Goodhew VictorMcNair-Wilson, M. (Newbury)
    Berry, Hon. AnthonyGoodlad AlastairMcNair-Wilson, P. (New Forest)
    Biffen, JohnGorst JohnMadel, David
    Biggs-Davison, JohnGow, Ian (Eastbourne)Marshall, Michael (Arundel)
    Body, RichardGower, Sir Raymond (Barry)Marten, Neil
    Boscawen, Hon. RobertGrant, Anthony (Harrow C.)Mather, Carol
    Bowden, A. (Brighton, Kemptown)Gray, HamishMaude, Angus
    Boyson, Dr. Rhodes (Brent)Griffiths, EldonMaxwell-Hyslop, Robin
    Braine, Sir BernardGrimond, Rt. Hon. J.Mayhew, Patrick
    Brittan, LeonGrist, IanMiller, Hal (Bromsgrove)
    Brotherton, MichaelGrylls, MichaelMiscampbell, Norman
    Bryan, Sir PaulHall, Sir JohnMoate, Roger
    Buck, AntonyHall-Davis, A. G. F.Molyneaux, James
    Budgen, NickHamilton, Michael (Salisbury)Monro, Hector
    Bulmar, EsmondHampson, Dr. KeithMontgomery, Fergus (Ludlow)
    Burden, F. A.Hannan, JohnMore, Jasper
    Butler, Adam (Bosworth)Harrison, Col. Sir Harwood (Eye)Morgan, Geraint
    Carlisle, MarkHarvie Anderson, Rt. Hon. MissMorgan-Giles, Rear-Admiral
    Carr, Rt. Hon. RobertHastings, StephenMorris, Michael (Northampton S.)
    Chalker, Mrs. LyndaHavers, Sir MichaelMorrison, Charles (Devizes)
    Churchill, W. S.Hayhoe, BarneyMorrison, Hon. Peter (Chester)
    Clark, Alan (Plymouth, Sutton)Heseltine, MichaelMudd, David
    Clark, William (Croydon S.)Hicks, RobertNeave, Airey
    Clarke, Kenneth (Rushcliffe)Higgins, Terence L.Nelson, Anthony
    Clegg, WalterHordern, PeterNeubert, Michael
    Cockcroft, JohnHowe, Rt. Hon. Sir GeoffreyNewton, Tony
    Cooke, Robert (Bristol W.)Howell, David (Guildford)Nott, John
    Cope, JohnHowells, Geraint (Cardigan)Onslow, Cranley
    Cordle, John H.Hunt, JohnOppenheim, Mrs. Sally
    Cormack, PatrickHurd, DouglasPage, Rt. Hon. R. Graham (Crosby)
    Costain, A. P.Hutchison, Michael ClarkPardoe, John
    Critchley, JulianIrvine, Bryant Godman (Rye)Parkinson, Cecil
    Crouch, DavidIrving, Charles (Cheltenham)Pattie, Geoffrey
    Crowder, F. P.James, DavidPenhaligon, David
    Davies, Rt. Hon. J. (Knutsford)Jenkin, Rt. Hon. P. (Wanst'd & W'df'd)Percival, Ian
    Dodsworth, GeoffreyJessel, TobyPeyton, Rt. Hon. John
    Douglas-Hamilton, Lord JamesJohnson Smith, G. (E Grinstead)Prior, Rt. Hon. James
    du Cann, Rt. Hon. EdwardJones, Arthur (Daventry)Raison, Timothy
    Durant, TonyJopling, MichaelRathbone, Tim
    Eden, Rt. Hon. Sir JohnJoseph, Rt. Hon. Sir KeithRees, Peter (Dover & Deal)
    Edwards, Nicholas (Pembroke)Kaberry, Sir DonaldRees-Davies, W. R.
    Elliott, Sir WilliamKellett-Bowman, Mrs. ElaineRenton, Rt. Hon. Sir D. (Hunts)
    Emery, PeterKershaw, AnthonyRidley, Hon. Nicholas
    Eyre, ReginaldKilfedder, JamesRidsdale, Julian
    Fairbairn, NicholasKing, Evelyn (South Dorset)Rifkind, Malcolm
    Fairgrieve, RussellKing, Tom (Bridgwater)Rodgers, Sir John (Sevenoaks)
    Fell, AnthonyKitson, Sir TimothyRoss, Stephen (Isle of Wight)
    Finsberg, GeoffreyKnight, Mrs. JillRossi, Hugh (Hornsey)
    Fisher, Sir NigelKnox, DavidRoyle, Sir Anthony
    Fletcher, Alex (Edinburgh N.)Lane, DavidSainsbury, Tim
    Fookes, Miss JanetLangford-Holt, Sir JohnSt. John-Stevas, Norman
    Fowler, Norman (Sutton C'f'd)Latham, Michael (Melton)Scott, Nicholas
    Fox, MarcusLawrence, IvanShaw, Giles (Pudsey)

    where the councillors had deliberately defied the law. It is a perfectly clear precedent. The hon. and learned Gentleman can try as much as he likes to twist the words here and there, but he cannot get away from the fact that that was a real precedent on the part of a Tory Government.

    Question put, That the clause be read a second time.

    The House divided: Ayes 232, Noes 243.

    Shelton, William (Streatham)Stewart, Ian (Hitchin)Wainwright, Richard (Colne V.)
    Shepherd, ColinStokes, JohnWakeham, John
    Shersby, MichaelStradling Thomas, J.Walker, Rt. Hon. P. (Worcester)
    Silvester, FredTapsell, PeterWall, Patrick
    Sims, RogerTaylor, R. (Croydon NW)Wallters, Dennis
    Sinclair, Sir GeorgeTaylor, Teddy (Cathcart)Warren, Kenneth
    Skeet, T. H. H.Tebbit, NormanWeatherill, Bernard
    Smith, Cyril (Rochdale)Temple-Morris, PeterWells, John
    Speed, KeithThatcher, Rt. Hon. MargaretWhitelaw, Rt. Hon. William
    Spence, JohnThomas, Rt. Hon. P. (Hendon S.)Wiggin, Jerry
    Spicer, Jim (W Dorset)Thorpe, Rt. Hon. Jeremy (N Devon)Winterton, Nicholas
    Spicer, Michael (S Worcester)Townsend, Cyril D.Young, Sir G. (Ealing, Action)
    Sproat, IainTrotter, Neville
    Stainton, KeithTugendhat, Christopher

    TELLERS FOR THE AYES:

    Stanbrook, Ivorvan Straubenzee, W. R.
    Stanley, JohnVaughan, Dr. GerardMr. Richard Luce and
    Steen, Anthony (Wavertree)Viggers, PeterMr. Spencer Le Marchant.

    NOES

    Archer, PeterEnnals, DavidMcElhone, Frank
    Armstrong, ErnestEvans, Gwynfor (Carmarthen)MacFarquhar, Roderick
    Ashley, JackEvans, Ioan (Aberdare)Mackenzie, Gregor
    Ashton, JoeEvans, John (Newton)Maclennan, Robert
    Atkins, Ronald (Preston N.)Ewing, Harry (Stirling)McMillan, Tom (Glasgow C.)
    Atkinson, NormanFaulds, AndrewMcNamara, Kevin
    Bagier, Gordon A. T.Fitt, Gerard (Belfast W.)Madden, Max
    Barnett, Guy (Greenwich)Flannery, MartinMahon, Simon
    Barnett, Rt. Hon. Joel (Heywood)Fletcher, Raymond (Ilkeston)Mallalieu, J. P. W.
    Bates, AlfFletcher, Ted (Darlington)Marks, Kenneth
    Bean, R. E.Foot, Rt. Hon. MichaelMarquand, David
    Bennett, Andrew (Stockport N.)Ford, BenMarshall, Dr. Edmund (Goole)
    Bishop, E. S.Forrester, JohnMarshall, Jim (Leicester S.)
    Blenkinsop, ArthurFowler, Gerald (The Wrekin)Mason, Rt. Hon. Roy
    Boardman, H.Fraser, John (Lambeth, N'w'd)Maynard, Miss Joan
    Booth, AlbertFreeson, ReginaldMeacher, Michael
    Bottomley, Rt. Hon. ArthurGarrett, John (Norwich S.)Mellish, Rt. Hon. Robert
    Bray, Dr. JeremyGarrett, W. E. (Wallsend)Mendelson, John
    Brown, Hugh D. (Provan)George, BruceMikardo, Ian
    Brown, Ronald (Hackney S.)Ginsburg, DavidMillan, Bruce
    Buchanan, RichardGolding, JohnMiller, Mrs. Millie (Ilford N.)
    Butler, Mrs. Joyce (Wood Green)Gould, BryanMitchell, R. C. (Solon, Itchen)
    Callaghan, Rt. Hon. J. (Cardiff SE)Gourley, HarryMolloy, William
    Callaghan, Jim (Middleton & P)Graham, TedMoonman, Eric
    Canavan, DennisGrant, John (Islington C.)Morris, Alfred (Wythenshawe)
    Cant, R. B.Grocott, BruceMorris, Charles R. (Openshaw)
    Carter, RayHamilton, James (Bothwell)Morris, Rt. Hon. J. (Aberavon)
    Carter-Jones, LewisHamilton, W. W. (Central Fife)Moyle, Roland
    Cartwright, JohnHarrison, Walter (Wakefield)Murray, Rt. Hon. Ronald King
    Castle, Rt. Hon. BarbaraHart, Rt. Hon. JudithNoble, Mike
    Cocks, Michael (Bristol S.)Hattersley, Rt. Hon. RoyOakes, Gordon
    Coleman, DonaldHatton, FrankO'Halloran, Michael
    Concannon, J. D.Healey, Rt. Hon. DenisO'Malley, Rt. Hon. Brian
    Conlan, BernardHeffer, Eric S.Orbach, Maurice
    Cook, Robin F. (Edin C.)Hooley, FrankOvenden, John
    Corbett, RobinHoram, JohnOwen, Dr. David
    Cox, Thomas (Tooting)Howell, Denis (B'ham, Sm H.)Palmer, Arthur
    Craigen, J. M. (Maryhill)Hughes, Rt. Hon. C. (Anglesey)Park, George
    Crosland, Rt. Hon. AnthonyHughes, Mark (Durham)Parry, Robert
    Cryer, BobHughes, Robert (Aberdeen N.)Peart, Rt. Hon. Fred
    Cunningham, G. (Islington S.)Hughes, Roy (Newport)Pendry, Tom
    Cunningham, Dr. J. (Whiteh)Hunter, AdamPhipps, Dr. Colin
    Davidson, ArthurJackson, Colin (Brighouse)Prentice, Rt. Hon. Reg
    Davies, Bryan (Enfield N.)Janner, GrevillePrescott, John
    Davies, Denzil (Llanelli)Jay, Rt. Hon. DouglasPrice, C. (Lewisham W.)
    Davis, Clinton (Hackney C.)Jenkins, Hugh (Putney)Radice, Giles
    Deakins, EricJohn, BrynmorRees, Rt. Hon. Merlyn (Leeds S.)
    Dean, Joseph (Leeds West)Jones, Alec (Rhondda)Richardson, Miss Jo
    de Freitas, Rt. Hon. Sir GeoffreyJones, Barry (East Flint)Roberts, Albert (Normanton)
    Delargy, HughKaufman, GeraldRobertson, John (Paisley)
    Dell, Rt. Hon. EdmundKerr, RussellRoderick, Caerwyn
    Doig, PeterKilroy-Silk, RobertRodgers, George (Chortey)
    Dormand, J. D.Lamborn, HarryRodgers, William (Stockton)
    Douglas-Mann, BruceLamond, JamesRooker, J. W.
    Duffy, A. E. P.Lawson, NigelRoper, John
    Dunn, James A.Leadbitter, TedRose, Paul B.
    Dunnett, JackLee, JohnRoss, Rt. Hon. W. (Kilmarnock)
    Dunwoody, Mrs. GwynethLestor, Miss Joan (Eton & Slough)Ryman, John
    Eadie, AlexLever, Rt. Hon. HaroldSandelson, Neville
    Edelman, MauriceLomas, KennethSedgemore, Brian
    Edge, GeoffLyon, Alexander (York)Selby, Harry
    Edwards, Robert (Wolv SE)Lyons, Edward (Bradford W)Shaw, Arnold (Ilford South)
    Ellis, John (Brigg & Scun)Mabon, Dr. J. DicksonSheldon, Robert (Ashton-u-Lyne)
    English, MichaelMcCartney, HughShore, Rt. Hon. Peter

    Short, Mrs. Renée (Wolv NE)Thomas, Jeffrey (Abertillery)Wellbeloved, James
    Silkin, Rt. Hon. John (Deptford)Thomas, Mike (Newcastle E.)White, James (Pollak)
    Silkin, Rt. Hon. S. C. (Dulwich)Thomas, Ron (Bristol NW)Whitehead, Phillip
    Sillars, JamesThorne, Stan (Preston South)Whitlock, William
    Silverman, JuliusTierney, SydneyWilley, Rt. Hon. Frederick
    Skinner, DennisTinn, JamesWilliams, Alan (Swansea W.)
    Small, WilliamTomlinson, JohnWilliams, Alan Lee (Hornch'ch)
    Smith, John (N Lanarkshire)Tomney, FrankWilliams, W. T. (Warrington)
    Snape, PeterTorney, TomWilson, Alexander (Hamilton)
    Spearing, NigelUrwin, T. W.Wilson, William (Coventry SE)
    Stallard, A. W.Varley, Rt. Hon. Eric G.Wise, Mrs. Audrey
    Stewart, Rt. Hon. M. (Fulham)Wainwright, Edwin (Dearne V.)Woof, Robert
    Stoddart, DavidWalker, Harold (Doncaster)Wrigglesworth, Ian
    Stott, RogerWalker, Terry (Kingswood)Young, David (Bolton E.)
    Strang, GavinWard, Michael
    Strauss, Rt. Hon. G. R.Watkins, David

    TELLERS FOR THE NOES:

    Summerskill, Hon. Dr. ShirleyWatkinson, JohnMiss Margaret Jackson and
    Swain, ThomasWeetch, KenMr. Joseph Harper.
    Taylor, Mrs. Ann (Bolton W.)Weitzman, David

    Question accordingly negatived.

    Clause 1

    Surcharges Arising Out Of Housing Finance Act 1972

    6.30 p.m.

    I beg to move Amendment No. 1, in page 2, line 4, leave out from 'applied' to end of line 6 and insert:

    'the district auditor shall certify the sum which and the persons whom he surcharged in respect of it'.

    With this Amendment we may discuss the following Amendments:

    No. 2, in page 2, line 4, leave and from 'certificate' to end of line 6 and insert:
    'shall be issued by the district auditors certifying the amount of such loss of rent and the persons whom he has surcharged in respect of the said loss'.
    No. 4, in page 2, line 8, leave out from 'or' to second subsection in line 9.

    We may also discuss Government Amendment No. 3.

    We introduce these Amendments in response to an Opposition amendment on similar lines suggested in Committee, which I undertook to consider. We are grateful for having had our attention drawn to possible obscurities in these subsections as originally drafted. We are satisfied that these amendments entirely clarify the points made in Committee.

    The only point of difference between the effect of these amendments and those put down by the Opposition in Committee is that we have not thought it necessary to impose a time limit on the issue of a rent loss certificate by the district auditor. Both the district auditor and the council will be eager to close the accounts, and we are quite satisfied that they will move speedily without the need for a set limit.

    The Government are being remarkably obstinate in relation to most important parts of this Bill. I am very glad to see that they have accepted the sense of doing this, and I appreciate the Minister's generosity in drawing attention to the fact. We are happy to see it and shall not press our own amendment. That comment applies also to Government Amendment No. 3.

    Amendment agreed to.

    Amendment made: No. 3, in page 2, line 8, leave out from '(2)' to '(3)' in line 9 and insert 'or'.—[ Mr. Kaufman.]

    Clause 2

    Recovery Of Certified Amounts

    I beg to move Amendment No. 5, in page 2, line 29, leave out subsection (1) and insert:

    '(1) A council who on the 1st April 1974 held any dwellings to which a rent loss certificate relates shall recover the sum certified therein or the appropriate part of it as hereinafter defined by 1st April 1977'.

    With this Amendment, it may be convenient to take the following Amendments:

    No. 7, in page 2, line 36, leave out subsection (2).

    No. 8, in line 39, leave out subsection (3) and insert:
    '() A council shall perform their duty under this section by a general increase of the rents of those of their housing revenue account dwellings in the part or parts of their area to which the certificate relates; and a council may make any such increase notwithstanding section 111 of the Housing Act 1957 (charges for local authority's houses)'.
    No. 9, in line 40 leave out 'either'.

    No. 10, in line 42, leave out from 'relates' to 'and' in line 44.

    No. 11, in page 3, line 1, leave out, subsection (4) and insert:
    '() On the application of a council to whom this section applies the Secretary of State may by statutory instrument make an order substituting for the date "1st April 1977" in subsection (1) above such other date not being later than the 1st April 1978 as he may in the order specify; and any such order shall be subject to affirmative resolution of both Houses of Parliament'.
    No. 17, in Clause 3, page 3, leave out lines 17 to 28 and insert:
    'may elect to charge the sum which it would otherwise fall to them to recover under section 2 above either wholly or partially to their general rate fund but any sum so charged shall be chargeable and charged by them separately on the area of any former council to whose account the rent loss certificate relates and only on such area'.
    No. 18, in line 19, leave out from 'and' to 'shall' in line 21 and insert:
    'any sum charged to their general rate fund by virtue of this paragraph'.
    No. 19, in line 22, after 'chargeable', insert 'and charged by them'.

    These amendments have been grouped together because they are all concerned with the process of recovering money that was not collected as a consequence of the failure to implement the Housing Finance Act. They cover three very important but to some extent separate points.

    Amendments Nos. 5, 7 and 11 are concerned with the rate or time-scale of recovery of the money that was not collected. Amendment No. 8 is concerned with the possibility that council tenants who were not in the area which benefited from non-implementation might still have to pay. Amendment No. 17 is concerned with the parallel possibility that ratepayers who were not in the area that benefited might also have to pay.

    I make my remarks on this group of amendments in three stages, and I begin with Amendments Nos. 5, 7 and 11. Instead of allowing recovery to take place over a period of five years, Amendment No. 5 states that the uncollected money shall be recovered by 1st April 1977. Backing this up, Amendment No. 7 deletes the five-year recovery period. The later amendment, No. 11, gives the possibility of an additional year's grace.

    We welcome the Government's view that the money that was not collected in the form of rent as a result of the defiance of the Act should come from the relevant community. We welcome the principle set forth by the Secretary of State as being that which underlies the Government's approach. It is right that the taxpayer should bear none of the burden for the failure to implement the Act. So far as we can judge, the Bill at least sticks to that undertaking. But the very important effect of our amendment would be to give councillors from the time of the Act becoming law until the 1st April 1977 to recover the money. Depending on the date at which this Bill might receive the Royal Assent—and we hope that it will not—this could allow a period of well over a year and a half for the moneys to be recovered.

    Anybody not knowing the facts which emerged in Committee would regard this period of about a year and a half for recovery to take place as very reasonable. After all, it is a greater period than the period of operation of the Housing Finance Act, and therefore of the possible period of default. One cannot have added to one's rent or rates more money than was not collected during the period when the law was being defined. Therefore, I suggest that the five-year recovery period which the Bill allows, even at a superficial glance, is quite excessive.

    I emphasise again, as in the last debate, that the corollary of a five-year period of recovery will be a prolonged period of grievance. The sense of grievance that is felt and will be felt by those who are having to pay because of the dereliction of duty of the councillors will last for the whole of that five-year period and will make nonsense of the Government's claim that this Bill is a way to wipe the slate clean.

    It is also quite unnecessarily favourable to have this period, in that if a council chose to spread out the collection of money over five years it would be collecting far less in real terms than if it were to collect the money in the near future The value of money is falling the whole time and the pound collected in five years' time will, alas, be worth very much less than a pound collected today. It is a straight economic incentive to local authorities to delay the collection of money. The longer they delay it, the less money in real terms they will have to collect. I see no suggestion in the Bill of any interest charge being made on the money to be collected, the collection of which could be delayed.

    What really persuaded my right hon. Friends and myself that a five-year period of recovery was totally and utterly unnecessary—indeed, even ridiculous—was the table produced to the Committee so helpfully by the Under-Secretary.

    This table—I say this for the benefit of those who were not in the Committee—set out the estimates, derived from the information available within the Department of the Environment, of potential increases if recovery were spread out over the defaulting areas only over a five-year period—for example, taking the North Derbyshire case, confined only to the old Clay Cross area, rather than being spread out over the whole of the North-East Derbyshire District Council. The table gave both the average weekly rent increase and the annual average rate poundage increase for the 18 authorities, which we understand are being audited at the moment in connection with this Bill.

    What was so striking about the table was that the sums it showed were so extraordinarily small. They did not begin to justify the need for a five-year period for repayment. The authorities were not named in the table, for reasons which we understand, but I hope that hon. Members interested in this argument will seize the opportunity to look at the facts set out therein. I will quote one or two of them. In the column devoted to average weekly rent increases—the amount of rent that would have to be collected if recovery were made over the defaulting area only over the five-year period—we see average weekly rent increases of 5p, 3p, 4p, 9p, 2p, and so on. In other words, the sums, if spread over a five-year period, are on a very small scale indeed.

    Exactly the same applies to the average rate poundage increase, where the sums are 0·25p, 0·15p, 0·05p, and so on. There arc one or two exceptions. One is quite a bit larger. But, on the whole, the amount to be collected is pitifully small in relation to a five-year period of recovery.

    What would happen if the whole rent loss were to be recovered in one year? In terms of rate poundages, in one authority it would yield only 0·25p in the pound, in six authorities it would yield only 0·5p, and in only two authorities would the increase spread over five years mean more than 1p in the pound on the rates.

    For the purposes of this debate, it is easier to see the scale of the problem in the estimated rent increases. One authority would need to impose only a 5p a week increase for repayment in one year. What possible argument can there be for allowing this to be spread over five years? All except four authorities could recover the payment by a 25p a week increase spread over one year only. Of the four which are larger sums, one would need a 30p a week increase for a year, one a 35p increase, and one a 45p increase for one year. There is only one substantial one, which the Under-Secretary gave us to understand was Clay Cross, where the figure is 27p a week over five years, which is equal to a 135p a week increase over one year.

    Our scheme would not allow only a year but would make possible about one and a half years. So all the figures that I have given for a one-year period would need to be reduced by a third.

    These figures demolish utterly the case for spreading the recovery payment over up to five years. To do so is deeply offensive to the law abiding, especially those in the areas where the money has to be raised. But, although there is no need for this long period for recovery and although the date which we propose of April 1977 seems adequate by any standards, nevertheless in Amendment No. 11 we make possible a further extension of one year. We say, in other words, that in certain circumstances the period for recovery could be stretched to April 1978 where a council applied to the Secretary of State for such an extension and could justify its case. Our amendment suggests that the Secretary of State would then be able to make a statutory instrument extending this up to the date of 1st April 1978.

    In the most substantial case, which we take to be Clay Cross this would mean a rate of recovery of about 60p-odd a week. By any standards that is not an inordinate burden to fall on the community which benefited most from non-collection.

    6.45 p.m.

    I believe that it is right that this extension should be subject to parliamentary control. We are talking about an act of defiance of the laws of Parliament. Therefore, we propose that Amendment No. 11 should require the affirmative procedure of this House to make sure that the House agreed to the proposals of the Secretary of State.

    Once again the arguments on all this are rooted in common sense. There is nothing dogmatic or extreme in our approach. It is a common sense approach to the problem.

    I turn to Amendment No. 8 which deals with the burden which it would be possible to impose on council tenants. The effect of it is that where a council opts to recover money through council rent increases, it may do so only by raising rents in the areas to which the certificate relates. Our amendment would not permit councils to raise the rents of council tenants who did not form part of what the Secretary of State described on 6th November 1974 as the communities which "benefited from late implementation".

    It is clear that those communities which benefited from late implementation can mean only the areas of the old local authorities where defiance of the law took place. In the case of Clay Cross and possibly others where this problem has arisen, the old authorities have been merged subsequently in the new enlarged authorities created under the Local Government Act 1972.

    Is not it a complete travesty of words or sense to say that a community which benefited could be the new enlarged local authority rather than the old small local authority where defiance of the law took place? It is a complete travesty to make it possible that all the council tenants of the new authority of North-East Derbyshire should have to bear the burden of repaying the money which was not collected by the councillors of the old Clay Cross areas, a fact which benefited only those who live in those areas.

    I find it astonishing that a Labour Government, of all Governments, should even contemplate the possibility that council tenants outside the areas which benefited from defiance of the law should have to bear this burden. I cannot understand how Government supporters, who constantly talk of their interest and concern for council tenants, could agree to the Government's proposition. As I said in Committee, when I recall the wrath and indignation—whether simulated or real, I do not know—which we heard from Labour Members about the possibility under the Housing Finance Act that council tenants might have to support other council tenants in other areas or other council tenants in their own areas out of their rents, I cannot conceive how today they can support the proposal that council tenants who derived no benefit from non-implementation should now bear the burden on behalf of their fellow men.

    It is tragic, incidentally, that at this stage we should have so few Government supporters present. This matter must touch them closely. I have no doubt that there is concern among them. I hope that it will be expressed when we press this amendment to a Division.

    Let me ask the hon. Member for Derbyshire, North-East (Mr. Swain) why council tenants in the rest of North-East Derbyshire should be liable to pay for the keeping down of rent increases in the Clay Cross area. How can this be justified? They had no part in the electing of the rebel councillors.

    Is the hon. Gentleman aware that, when this Bill becomes law, it will be the responsibility of the local authority to decide, yea or nay?

    I accept that it will be the responsibility of the local authority to decide, yea or nay, but I can see no reason why this possibility should be open to it. I can see no justification in logic, honour or anything else for this provision to be in the Bill. I hope that the hon. Gentleman will recognise that and vote with us at least on this clause—[Interruption.] I suggest that the hon. Gentleman should listen to his councillors—

    I thought not. The hon. Gentleman will not give way because he knows that he is telling a lie.

    On a point of order, Mr. Speaker. If a man tells a lie, what are we to say to him—"Thank you very much"? I say that the hon. Gentleman is telling a diabolical lie.

    The hon. Member for Derbyshire, North-East (Mr. Swain), who has been in the House a long time, must help me. He knows that that is a word that I am not allowed to permit. He may say that what the hon. Member for Aylesbury (Mr. Raison) said was inaccurate or was not in accordance with the facts, but I cannot permit the word "lie".

    On a point of order, Mr. Speaker. A hell of a lot of words in this House are used that should not be used. Apparently Opposition Front Bench speakers have a certain licence to use them. I suggest that when it is pointed out that an hon. Member is telling an untruth, out of all respect to the hon. Member who reminds him of this and who does know the truth, he should give way to him so that the other hon. Member can tell him, or else he must incur the wrath of the hon. Member whom he is criticising.

    I hoped that we could settle this point without too much heat. I regret personal exchanges like this. Sometimes they are provoked, but I hope that the hon. Gentleman will withdraw the word "lie".

    I withdraw the word "lie", Mr. Speaker, and apologise to all the liars in this country for bringing them down to the low level of the hon. Gentleman.

    The hon. Gentleman's blandishments to me to give way are not the most seductive that I have ever heard.

    I will not give way to the hon. Gentleman. He can speak in the debate and put his point of view. I ask him and all Labour Members who may have more conscience and more sense than he has, why should it be possible that the ratepayer—

    On a point of order, Mr. Speaker. The hon. Gentleman is now directly insulting me. No doubt there are other Labour Members who have more sense than I have, but no doubt there are a hell of a lot of Labour Members who have more sense than the hon. Gentleman.

    Order. Fortunately it is not for me to adjudicate on the amount of sense which hon. Members on either side of the House have. I suggest to the hon. Member for Aylesbury (Mr. Raison) that he should not be deliberately provocative. There is a bit of give and take in this House—[Interruption.] Order. The hon. Member is not helping me with his interventions from a sedentary position. I am doing my best to conduct this debate in an orderly way. I would hope that Members on either side would not be unduly provocative. Let us get on.

    Why should the Bill make it possible for the ratepayers of North-East Derbyshire, as represented by their councillors, to be in a position to place the burden on innocent council tenants? I do not suppose that they will, but why should the possibility even exist? The Government have never advanced any good reason.

    I have some sympathy for the tenants of Clay Cross and the comparable areas. I believe that they were very badly served by their councillors, but at least those who lived in the Clay Cross area derived some benefit. At least their rents were held down. However, the other council tenants outside these areas, in the new authorities, can only suffer if this option is implemented.

    In Committee the Under-Secretary responded in the feeblest possible way to our arguments upon this point. He talked of the possibility of tabling amendments on Report. He talked of the wish of the Government to extend, if possible, the range of options for repayment. We were not very interested in extending the range of options, because we did not think that was necessary. However, I am disappointed that the Under-Secretary has not seen fit to produce at least some recognition of the force of our argument. Perhaps I should qualify that by saying that it is still on the cards that he may accept our amendments. I hope that he will at least accept Amendment No. 8. We shall listen with great interest to what he has to say.

    His hon. Friend the Member for Birmingham, Erdington (Mr. Silverman), who alas does not appear to be present, seemed to me to do more than the Under-Secretary to try to defend the Government on this clause. In effect, he said that we can leave all this to the good sense of councils. That may be so. It may well be that they will behave in a very sensible way. However, I cannot see why such a blatantly unfair option as the Bill allows should be permitted.

    I remind the Under-Secretary that the hon. Member for Birmingham, Erdington said that he agreed that the clause was weak. I hope that all hon. Members will have the guts to join us at least in supporting Amendment No. 8, because they must know that both morally and in practical terms it is right.

    I am glad that the Secretary of State has just arrived. I wish that he had heard a little more of this argument, because I believe it is one of the most important arguments that we are putting forward. I hope that the Under-Secretary will tell his right hon. Friend what we have been saying.

    Finally, I turn to Amendment No. 17 which is the parallel amendment dealing with the position of the ratepayers in those areas outside the areas to which the rent loss certificates would apply. The effect that we seek here is the possibility that the burden of repaying sums which were not collected could fall only on the ratepayers of the area to which rent loss certificates attach and not on those parts of a new authority to which the certificates does not relate.

    Again, the obvious example has to be North-East Derbyshire and Clay Cross. That is the only area where we can talk in anything remotely resembling concrete terms, but it may well be that the same situation would apply in other parts of the country.

    Much the same arguments apply to this amendment as applied to the last one. As it happens, I feel particularly strongly about injustice to council tenants, about which I spoke under the last amendment, but there is no doubt that the injustice to ratepayers, which we are trying to remove by this amendment, would be just as great. There is no doubt that the ratepayers in North-East Derbyshire feel very strongly about this.

    I am put in something of a dilemma by my desire to keep the peace and to live up to what you, Mr. Speaker, have just asked me to do. However, I cannot but refer at least to the point of view which was expressed very forcibly on 10th May—only last week—by the new North-East Derbyshire District Council which asked their Member of Parliament, apparentiy in vain, to call upon the Government not to proceed with the Housing Finance (Special Provisions) Bill.

    I should like to make a correction. It was not a request from the council but a statement by the leader of the Tory Party in the council, followed by the lady who was retiring as chairman. No decision was made. No resolution was moved or seconded. No recommendation was made by the council and not one of the councillors—and I was in the room—told me of it. The first I heard about this was when I read the article by A. J. Travers on the front page of the Sunday Telegraph this week. Now will the hon. Gentleman believe me when I say that I was not reprimanded? If I am to take instructions from a dud lawyer from Dronfield, the leader of the Tories on that council, I shall go out of this House tomorrow as a dishonest man.

    I shall concede to the hon. Gentleman one thing—and that is that I believe that no Member of Parliament should be bound to take instructions from a local authority. That is part of our constitution. However, there was far from one Press report covering this matter. I have read a number today conveying the strong feelings of the North-East Derbyshire District Council and stating categorically—if I am wrong I shall accept correction—that the Labour Group leader was the person who called upon the hon. Gentleman to behave in this way, and as I say—

    We had plenty of other evidence before the Committee and before the House about the deep distaste felt in North-East Derbyshire for the action which the Government are putting forward.

    I believe that what the Government are putting forward is both profoundly mistaken and completely unnecessary. There is no need to have the possibility written into the Bill that the money should be collected from the tenants or the ratepayers outside the areas to which the rent loss certificate applies. There is no need for this and there is no advantage in it. If this provision is enacted it can only produce bitterness. When the Government say again and again that they are trying to end bitterness, how can they be so foolish as to persist with the ingredients in the Bill which, if they are implemented, are the surest guarantee I know that they will prolong bitterness.

    7.0 p.m.

    I wish to speak to Amendments Nos. 9, 10, 18 and 19, in my name, which have much the same effect as Amendment No. 5, moved by the hon. Member for Aylesbury (Mr. Raison).

    My amendments put the responsibility for meeting the costs involved firmly on the backs of those who benefit by the actions of the councils concerned. It is right that that should be so. I support everything that the hon. Gentleman has said.

    I was disappointed to hear that the Press reports from North-East Derbyshire were not correct. I accept what the hon. Member for Derbyshire, North-East (Mr. Swain) said. I had been heartened by the fact that it appeared that the council there was concerned to make it clear that it felt that the deficit, such as it is, should fall on those in its area—in Clay Cross in particular—who have benefited through rates or rents. If that is not correct, the amendments are much more important, because we should make it clear in the House exactly what we feel should happen which is that the payment of the deficit should fall on those who benefited.

    I am surprised that the Press reports are not correct, because we have had many representations from people resident in the area and other areas. There happens to be a Liberal Party in Clay Cross—

    In that case, the gentleman who has been in touch with me must be telling me an untruth. I have had representations from a Clay Cross Liberal Party, and I am delighted that there is such a party. My hon. Friend the Member for Rochdale (Mr. Smith) spoke there during the last election—[Interruption.]It is progress. [Interruption.] I suggest that the sedentary remarks should cease. The letters I have received from residents in the area—

    I shall pass the letters to the hon. Gentleman after the debate, and he can read them.

    These residents say that they would be outraged if they had to pay for back rents and rates for which they have no responsibility. Therefore, I recommend support for the amendments. I also support the view that the payments could and should be clawed back within 18 months to two and a half years.

    Is the hon. Gentleman aware that the biggest contribution to rate increases by any authority this year was caused by the Act reorganising local government, an Act passed by the Tory Government in 1972?

    I am well aware of that, because I represent a constituency which has suffered very much from the reorganisation—a reorganisation for which we never asked. We now have three councils when we should have one. But that is not the point now.

    The figures supplied to us in Committee made it clear that there would not be a great burden on the ratepayers if the money were repaid in 18 months to three years. Therefore, I support the suggestion that it should be repaid over 18 months or two and a half years. The figures quoted are not unreasonable. I ask the House to support the Opposition amendments and those in my name.

    Perhaps I may reply to the amendments in the order in which the hon. Member for Aylesbury (Mr. Raison) moved them. The amendments moved by the hon. Member for Isle of Wight (Mr. Ross) were closely linked—

    Order. Only one amendment has been moved Amendment No 5. The others are being discussed with it. Whether I shall allow them to be moved afterwards is a matter for me.

    I apologise, Mr. Speaker. I shall discuss the other amendments in the order in which they were discussed previously.

    Amendments Nos. 5, 7 and 11 would greatly shorten the time available to councils to recover the amount of a rent loss certificate. As the hon. Member for Aylesbury made clear, they would require a council to recover the necessary amount, normally before 1st April 1977, although the Secretary of State would have power to extend the period to 1st April 1978, subject to affirmative resolution of both Houses of Parliament.

    I fully appreciate that in most cases the necessary increases in rates or rents for the recovery of the certified rent loss will be very small. The hon. Gentleman referred to the table supplied in Committee by my hon. Friend the Under-Secretary of State for the Environment, which makes that clear. The hon. Gentleman was right to draw that conclusion from it, but under the Bill the authorities concerned have absolute discretion to recover as soon as they wish. They do not have to recover over the five-year period, but can recover in a much shorter period. The Government's discussions with the local authority associations left the clear impression that most of the authorities likely to be affected want the whole thing put behind them as speedily as possible.

    I shall come to that.

    Our conclusion is as follows. First there is no need to impose a rigid timetable on the local authorities. Secondly, the amendments would go against the principle that this Government have always followed of allowing a discretion to responsible councils.

    It would be impracticable to operate the time limits provided in the amendments. Nobody can foresee all the circumstances of a particular case. There might well be appeals stretching well into 1976. The court procedure preferred by the Opposition would be likely greatly to lengthen the period. The Opposition amendments ignore the wishes and practicalities of local government in exactly the same way—and I do not wish to be contentious—as the Opposition ignored them in the Housing Finance Act. There is no obligation on councils to extend the period to five years. They are responsible bodies, and they will, no doubt, note what the hon. Gentleman said. They have to face their electorates. The vast majority of them will no doubt, try to collect the money within as short a period as possible.

    Amendment No. 11 seeks to remove the discretion of the Secretary of State to extend the recovery period on application by a council. We see no justification for circumscribing this power. It is nonsensical to think that a Secretary of State—certainly the present Secretary of State—might abuse his discretion. It would be in no one's interests to do so. It makes sense to provide a useful fallback discretion of the kind provided in the Bill in case in any particular area the burden of recovery should prove to be heavier than it is desirable to impose on the tenants in these difficult times.

    In those circumstances, whilst I appreciate the sincerity of the hon. Gentleman's case, I must ask the House to resist the amendments.

    Amendment No. 8 is designed to restrict the recovery through rent increases of the amount in a rent loss certificate to the area to which the certificate relates. The choice now provided in the subsection which the amendment seeks to delete would apply where local government reorganisation had incorporated a former defaulting council as part of a larger successor council's area. The obvious case is that of the Clay Cross Urban District.

    I appreciate the strength of the argument put forward by the Opposition here and in Committee in support of this amendment. They are fully entitled to their views. It is a respectable point. However, those arguments illustrate once again the area of difference between the two sides of the House. We believe that local authorities should be allowed to decide for themselves how they carry out the duties and functions placed upon them. We do not regard them as either agents or tools of the Government. The approach that this Government have given to local authorities is to regard them as bodies responsible to their own electorate and, therefore, best able to take the right decisions for their areas.

    I am interested to hear of that independence of local authorities. Will the hon. Gentleman pass this on to the Secretary of State for Education and Science, who is trying to blackmail those counties which will not fit in with his plans to go comprehensive?

    If I entered into argument on that matter I should be quickly ruled out of order.

    Perhaps I should point out why we have returned to local authorities the responsibility for fixing rents for their dwellings instead of giving that responsibility, as previously to non-accountable bodies. The hon. Gentleman said that he was glad that there was provision in the Bill making it clear that any losses dealt with by the Bill should be made good by the local community. We propose, therefore, following on from that, that the recovery should be the duty of the local authority responsible for the area to which the rent loss certificate relates. That being so, we consider it better to leave the decision as to the actual area from which the certified sums shall be recovered by increased rents to the council concerned.

    Our proposals allow the council complete freedom to restrict the area of recovery to that of the former council concerned, if it wishes. If not, recovery can be spread over the whole of the area. The local councillors have to face an election in the area from which they are recovering rents. I refer to the area of the previous council and to the area where there was no rent loss certificate. Doubtless, being sensible bodies, they will bear that strictly in mind.

    Will the hon. Gentleman say how the areas to which the rent loss certificate does not apply can possibly be described as the communities which benefited from late implementation? That was the criterion put forward by the Secretary of State. How can it apply to those people where the rent loss certificate does not apply?

    That will be a matter for the local authorities. Clearly, the local authorities will seek to recover the sums, in most cases, from the local community most intimately affected.

    The hon. Member for the Isle of Wight will not expect me to deal with his amendments in detail since they cover the same ground as those moved by the hon. Member for Aylesbury.

    The third group of amendments deals with the recovery of the amount in a rent loss certificate to the area to which a certificate relates, where any part of that amount is to be charged to the general rate fund. I do not think that I need deal with those amendments in detail. The same points arise. Once again, it is left to the discretion of the local authorities. They are sensible people. They must face the electorate. The Bill does not force them to collect from an area other than the area which originally was most intimately affected. No doubt they will bear in mind everything said by the hon. Gentleman. We feel that the council should have complete freedom to recover sums from the area for which it is responsible. We do not see any necessity to restrict that freedom.

    In all the circumstances, whilst I fully appreciate the sincerity and the feeling which inspired these amendments, I must ask the House to resist them.

    7.15 p.m.

    We have listened with great interest to what was said by the Parliamentary Secretary. We well understand why he gave fumbling, slightly inept replies on this group of amendments. We well understand his embarrassment at having to read that kind of brief.

    In explaining the Government's approach to this problem, the hon. Gentleman said that the Government took the view that local authorities should have complete freedom of action and should not in any way be influenced or interfered with by the Government. However, that does not match up to the remarks of the Secretary of State last week, when he said in Manchester that the party was over and that the Government would have to insist that local authorities adjust their rents. In addition, in his Budget speech the Chancellor said that a committee of representatives from local authorities and the Government should be set up to discuss the question of local authority expenditure, which is another way of saying that the Government are not happy to leave this matter to the local authorities nor to leave control of local authority programmes entirely in local authority hands. Incidentally, the Secretary of State said that the party was over at one of the most expensive end-of-party parties ever mounted.

    The Parliamentary Secretary pretended that as the Government were concerned not to interfere with local authorities he was not prepared to accept our amendment. I think that was a poor argument which he put over in an uncharacteristically poor way.

    With this group of amendments the Opposition made the mistake of taking the Attorney-General at his face value and believing what he said. In his speech today he said that the feeling behind the legislation was that those who had benefited should now pay. He also spoke about wanting to wipe the slate clean as quickly as possible. In this group of amendments we say that a five-year collection period is far too long. The Attorney-General seems to agree with that as he wants to wipe the slate clean quickly. We say that five years is not quickly. It is too long a period. The period should be shortened. We say that April 1977 is long enough.

    In Committee the Under-Secretary said that at the time the legislation was drafted his Department had no idea of the sums involved. He referred to the famous list of 18 councils concerned and said that in 14 of the cases the whole arrears could be cleared off by a one-off 2p rate. The Under-Secretary, in his characteristically frank way, said that he had not seen those figures before. He was surprised by them. We say that when the Government drafted the legislation and chose the five-year period they were not aware, by their own admission, of the small sums involved. Now that the Government know what the sums are, the period of five years is obviously far too long. We agree that the slate should be wiped clean, but let us not take five years to do it when the sums involved are obviously small.

    The second group of amendments embodies what the Attorney-General said about letting those who have benefited now pay. If the Government believe that, they should accept the restriction that is proposed. The Government seem to think that most of the councils involved will do what we want to make them do. We suggest that the councils should not be left with that option. We should embody in the legislation the spirit enunciated by the Attorney-General, that those who have had the benefit should pay.

    On this occasion I prefer the instinct of the Attorney-General. We want to see the slate wiped clean, and wiped clean quickly, and we want the people who had the benefit to pay. Acceptance of this group of amendments would deliver what the Attorney-General said he wanted. Frankly, I think that the Under-Secretary gave a most unsatisfactory answer to the debate.

    Once again a thoroughly embarrassed and ashamed Minister came to the Dispatch Box and, in a flat, dull tone, tried to obscure the essential evil of the Bill and this clause in particular. The clause, unamended, is absurd and patently unjust. It shows what follows from the despicable lack of principle which is shown in the Bill.

    Hon. Gentlemen opposite speak of justice as though they have the sole right to claim justice on behalf of the Labour Party throughout this land. What justice is it to people who have not benefited in any shape or form from the advantages of not paying their rents to fork out the excesses which have been made as a result of the Bill? There is not the beginning of a gesture of justice to people who came from areas outside that covered by Clay Cross.

    What justice is there in extending the period of payment to five years? Hon. Gentlemen opposite say that it is a matter of discretion for the local authorities, but they must be allowing that period of time for those local authorities which wish to punish people who do not subscribe to the Labour creed, because we all know that irresponsible councils—Clay Cross is one—will happily indulge in a five-year extension rather than pay the money over a shorter period.

    The evil that follows should be clear to everybody. If a council is in default to the extent of £120,000 as of last year, after five years that money, at 12 per cent. to 15 per cent. rates of interest, will be considerably reduced in value because of the borrowing that it will have to make over the five years to make up that value. With interest at about 15 per cent. the additional money which will have to be borrowed by any council to make up a deficit of £120,000 five years earlier will amount to £75,000. That means that that council will have lost the equivalent of just under £200,000. That is one of the evils that follows having an extended period of five years for repayment.

    But there is more. We all know that we are not inflating now at 1 per cent. or 2 per cent. a year. We are inflating at 20 per cent. a year That means that after five years at 20 per cent.—and Heaven help us if it continues, but it might be higher than 20 per cent. in the next year or so—the value of that £120,000 will be nearer £240,000. Therefore, we are talking about a change in the value of money over five years nearer to £300,000 or £400,000 than the £120,000 which is the default at a given date.

    I should like to give the hon. Gentleman au example of a Conservative-controlled council, now absorbed by North-East Derbyshire, which, 12 months before the take-over, had a balance of £100,000. The council spent that £100,000 on a prestige civic centre which, within six months, fell down and is now costing the ratepayers of North-East Derbyshire £40,000 to repair, plus the interest on the borrowed money.

    No doubt the hon. Gentleman is intending to signify dis- approval of the misuse of money in that way. I do not know to which council he is referring, but I do not wish to go into the merits of that argument, even if I knew them. The hon. Gentleman is expressing disapproval. How much more disapproval ought he to be expressing about this clause? Even the dimwitted—of course, I do not suggest that he is in any sense dimwitted—realise that £120,003 value in 1974—

    There is talk about injustice. But who will make up the difference? The ratepayers, if not the taxpayers, will be asked to make up that difference. We are assured that the taxpayers will not be asked to make up that difference, so it must be the ratepayers of the area covered by Clay Cross. [Interuption.] I appreciate that the hon. Member for Derbyshire, North-East (Mr. Swain) does not like the line of argument that I am pursuing. That is why he continues to heckle and try to interrupt, but he ought, perhaps, to pay attention. He is intensely disturbed at the injustice of the example which he gave. Therefore, he ought to be intensely disturbed at the injustice of the example that I am giving. In the end the ratepayers will have to pay the difference between £120,000 and £400,000, will they not?

    It is not just a question of the ratepayers paying. It may be that the local authority was planning to set aside some money for a health clinic or some of the social needs of that very part of the country that the hon. Member for Derbyshire, North-East represents and claims is underprivileged. If that kind of money has to be spent on this kind of procedure, the authority will have that much less to spend on social needs. So the injustice will be visited not only upon the hon. Gentleman's constituents, but on the constituents of all hon. Members who represent areas where this ridiculous measure is enforced.

    It is unjust that this measure should be extended beyond the bounds of those who have benefited from the failure to pay the increased rents, and it is unjust to people who will otherwise be expected in the course of five years to pay out more money or to suffer losses as a result of it. That is why we have put down amendments which would have the effect of shortening the period in a way which, as my hon. Friend the Member for Aylesbury (Mr. Raison) pointed out, would cause nobody any harm, except possibly the Clay Cross councillors who are the prime beneficiaries of this measure and to whom it is totally, utterly and completely directed.

    7.30 p.m.

    My hon. Friends have demonstrated that the Government's case is hopeless, as devoid of merit as it is of logic. Let me remind the Minister of some of the points they have made in the hope that even yet the Government may see the light of day.

    The period allowed, we say, is too long. It is five years, starting at the earliest on 1st April 1976 and in some cases not until 1st April 1977. It is said that, without a measure like this, there will be burning resentment in the breasts of many who feel that they are being hard done by. But the very passing of the Bill will cause resentment to many others who will have to pay up for faults which were not theirs.—[Interruption.] Does it never occur to the hon. Member for Derbyshire, North-East (Mr. Swain), who keeps grunting away, or to the Minister, that that is inevitable? The Bill will cause bitter resentment to rent and ratepayers who will have to pay more because someone for whom they did not vote defied the law.

    If I was treated with contempt by the Tories in North-East Derbyshire and I did not disturb them, I would not consider that I was doing my job on behalf of the people who elected me—a majority of 10,500.

    That may be so. I have no doubt that the hon. Gentleman will do his duty as he sees fit. But I hope that he will concede that there may be two sides to the argument. I accept that the Bill will put some bitterness to rest, but he would do well to accept that it will also cause bitter resentment and great unfairness. If the hon. Gentleman cannot see that, he is not prepared to look at the other side of the penny. What is the point of spreading the resulting unfairness and resentment over five, six or seven years? The Minister's speech showed that there is none.

    I accept what the Minister said, that the aim can be achieved more quickly under the Bill. I do not know whether he also meant to say that it can be done more quickly as a matter of fact, but that is obvious too. Now that we have a list of the amounts in question, it is apparent that if anyone spreads the collection over five years the amounts collected on the rent or rates each year will be peanuts. It is clear that it will be no hardship to anyone to collect in the period specified in the amendment. This is certainly so in the light of the provision in another amendment that the Secretary of State can extend the period for another year, to 1st April 1978, in special circumstances.

    Anyone prepared to face facts must admit that three years from now must be sufficient time to collect these amounts, which would still be very small if spread over two years. The Minister says that it can be done more quickly, both because the law allows—if he did not concede that it can be done more quickly because of the amounts involved, I think he should—and because the Government want to do so. Let us accept all that. Why then give this long extra period?

    The Minister says that our proposal is against the principle of allowing discretion to responsible councils. In fact, what we propose would involve neither insult, detriment nor difficulty to any responsible council. But the Government's lengthy period would allow too much latitude to irresponsible councils. That follows from their own argument and shows how threadbare it is.

    I observed no answer from the Minister to our proposal that rent increases should be limited to the area where the deficit arose, except that local authorities should be allowed to exercise powers in their own way. Will he not recognise even at this late stage that his own colleagues, including the Attorney-General, have said that that is not enough, that those who benefited must bear the burden? Having enunciated that principle so often, they should give effect to it. Clause 2 as it stands allows councils to ensure that the burden falls on people who did not benefit and provides that it may fall on many more people.

    These arguments will not do. The paucity of the Minister's reply is further convincing evidence of the merits of the case made by my hon. Friends, all of

    Division No. 204]

    AYES

    [7.38 p.m.

    Adley, RobertGorst, JohnMiller, Hal (Bromsgrove)
    Aitken, JonathanGow, Ian (Eastbourne)Miscampbell, Norman
    Alison, MichaelGower, Sir Raymond (Barry)Moate, Roger
    Amery, Rt. Hon. JulianGrant, Anthony (Harrow C.)Monro, Hector
    Arnold, TomGray, HamishMontgomery, Fergus
    Atkins, Rt. Hon. H. (Spelthorne)Griffiths, EldonMore, Jasper (Ludlow)
    Awdry, DanielGrimond, Rt. Hon. J.Morgan, Geraint
    Banks, RobertGrist, IanMorgan-Giles, Rear-Admiral
    Beith, A. J.Grylls, MichaelMorris, Michael (Northampton S.)
    Bell, RonaldHall, Sir JohnMorrison, Charles (Devizes)
    Bennett, Sir Frederic (Torbay)Hall-Davis, A. G. F.Morrison, Hon. Peter (Chester)
    Berry, Hon. AnthonyHamilton, Michael (Salisbury)Mudd, David
    Biffen, JohnHampson, Dr. KeithNeave, Airey
    Biggs-Davison, JohnHannam, JohnNelson, Anthony
    Body, RichardHarrison, Col. Sir Harwood (Eye)Neubert, Michael
    Boscawen, Hon. RobertHastings, StephenNewton, Tony
    Bowden, A. (Brighton, Kemptown)Havers, Sir MichaelNott, John
    Boyson, Dr. Rhodes (Brent)Hayhoe, BarneyOppenheim, Mrs. Sally
    Braine, Sir BernardHeseltine, MichaelPage, Rt. Hon. R. Graham (Crosby)
    Brittan, LeonHicks, RobertPardoe, John
    Brotherton, MichaelHiggins, Terence L.Parkinson, Cecil
    Bryan, Sir PaulHolland, PhilipPattie, Geoffrey
    Buck, AntonyHowe, Rt. Hon. Sir GeoffreyPenhaligon, David
    Budgen, NickHowell, David (Guildford)Percival, Ian
    Bulmer, EsmondHowells, Geraint (Cardigan)Peyton, RI Hon. John
    Burden, F. A.Hunt, JohnPink, R. Bonner
    Carlisle, MarkHurd, DouglasPrior, Rt. Hon. James
    Carr, Rt. Hon. RobertHutchison, Michael ClarkRaison, Timothy
    Chalker, Mrs. LyndaIrvine, Bryant Godman (Rye)Rathbone, Tim
    Channon, PaulIrving, Charles (Cheltenham)Rees, Peter (Dover & Deal)
    Churchill, W. S.James, DavidRees-Davies, W. R.
    Clark, Alan (Plymouth, Sutton)Jenkin, Rt. Hon. P. (Wanst'd & W'df'd)Renton, Rt. Hon. Sir D. (Hunts)
    Clarke, Kenneth (Rushcliffe)Jessel TobyRidley, Hon. Nicholas
    Clegg, WalterJohnson Smith, G. (E Grinstead)Ridsdale Julian
    Cockcroft, JohnJones, Arthur (Daventry)Rifkind, Malcolm
    Cooke, Robert (Bristol W.)Jopling, MichaelRoberts, Wyn (Conway)
    Cope, JohnJoseph, Rt. Hon. Sir KeithRoss, Stephen (Isle of Wight)
    Cordle, John H.Kaberry, Sir DonaldRossi, Hugh (Hornsey)
    Cormack, PatrickKellett-Bowman, Mrs. ElaineRoyle, Sir Anthony
    Costain, A. P.Kershaw, AnthonySainsbury, Tim
    Critchley, JulianKilfedder, JamesSt. John-Stevas, Norman
    Crouch, DavidKing, Evelyn (South Dorset)Scott, Nicholas
    Crowder, F. P.King, Tom (Bridgwater)Shaw, Giles (Pudsey)
    Dodsworth, GeoffreyKitson, Sir TimothyShelton, William (Streatham)
    Douglas-Hamilton, Lord JamesKnight, Mrs. JillShepherd, Colin
    du Cann, Rt. Hon. EdwardKnox, DavidShersby, Michael
    Durant, TonyLane, DavidSilvester, Fred
    Eden, Rt. Hon. Sir JohnLangford-Holt, Sir JohnSims, Roger
    Edwards, Nicholas (Pembroke)Latham, Michael (Melton)Sinclair, Sir George
    Elliott, Sir WilliamLawrence, IvanSkeet, T. H. H.
    Emery, PeterLawson, NigelSmith, Cyril (Rochdale)
    Eyre, ReginaldLe Merchant, SpencerSpeed, Keith
    Fairbairn, NicholasLester, Jim (Beeston)Spence, John
    Fairgrieve, RussellLewis, Kenneth (Rutland)Spicer, Michael (S Worcester)
    Fell, AnthonyLloyd, IanSproat, Iain
    Finsberg, GeolfreyLoveridge, JohnStanbrook, Ivor
    Fletcher, Alex (Edinburgh N.)Luce, RichardStanley, John
    Fookes, Miss JanetMcAdden, Sir StephenSteen, Anthony (Wavertree)
    Fox, MarcusMcCrindle, RobertStewart, Ian (Hitchin)
    Fraser, Rt. Hon. H. (Stafford & St)Macfarlane, NeilStokes, John
    Freud, ClementMacGregor, JohnTapsell, Peter
    Fry, PeterMacmillan, Rt. Hon. M. (Farnham)Taylor, R. (Croydon NW)
    Galbraith, Hon. T. G. D.McNair-Wilson, M. (Newbury)Taylor, Teddy (Cathcart)
    Gardner, Edward (S Fylde)McNair-Wilson, P. (New Forest)Tebbit, Norman
    Gilmour, Rt. Hon. Ian (Chesham)Madel, DavidTemple-Morris, Peter
    Gilmour, Sir John (East Fife)Marshall, Michael (Arundel)Thatcher, Rt. Hon. Margaret
    Glyn, Dr. AlanMates, MichaelThomas, Rt. Hon. P. (Hendon S.)
    Godber, Rt. Hon. JosephMather, CarolTownsend, Cyril D.
    Goodhart, PhilipMaude, AngusTrotter, Neville
    Goodhew, VictorMaxwell-Hyslop, RobinTugendhat, Christopher
    Goodlad, AlastairMayhew, Patrickvan Straubenzee, W. R.

    whom I now invite to vote for the Amendment.

    Question put, That the amendment be made:—

    The House divided: Ayes 226, Noes 237.

    Vaughan, Dr. GerardWalters, DennisYoung, Sir G. (Ealing, Acton)
    Viggers, PeterWeatherill, Bernard
    Wainwright, Richard (Colne V.)Wells, John

    TELLERS FOR THE AYES:

    Wakeham, JohnWhitelaw, Rt. Hon. WilliamMr. Adam Butler and
    Walker, Rt. Hon. P. (Worcester)Wiggin, JerryMr. W. Benson.
    Wall, PatrickWinterton, Nicholas

    NOES

    Armstrong, ErnestFraser, John (Lambeth, N'w'd)Moyle, Roland
    Ashley, JackGarrett, John (Norwich S.)Murray, Rt. Hon. Ronald King
    Atkins, Ronald (Preston N.)Garrett, W. E. (Wallsend)Noble, Mike
    Bagier, Gordon A. T.George, BruceOakes, Gordon
    Barnett, Guy (Greenwich)Ginsburg, DavidO'Halloran, Michael
    Barnett, Rt. Hon. Joel (Heywood)Golding, JohnO'Malley, Rt. Hon. Brian
    Bates, AllGould, BryanOrbach, Maurice
    Bean, R. E.Gourlay, HarryOvenden, John
    Bennett, Andrew (Stockport N.)Graham, TedOwen, Dr. David
    Blenkinsop, ArthurGrant, John (Islington C.)Palmer, Arthur
    Boardman, H.Grocott, BrucePark, George
    Booth, AlbertHamilton, W. W. (Central Fife)Parker, John
    Bottomley, Rt. Hon. ArthurHardy, PeterParry, Robert
    Bray, Dr. JeremyHarper, JosephPeart, Rt. Hon. Fred
    Brown, Hugh D. (Provan)Harrison, Walter (Wakefield)Pendry, Tom
    Brown, Robert C. (Newcastle W.)Hart, Rt. Hon. JudithPhipps, Dr. Colin
    Buchanan, RichardHattersley, Rt. Hon. RoyPrentice, Rt. Hon. Reg
    Butler, Mrs. Joyce (Wood Green)Hatton, FrankPrescott, John
    Callaghan, Rt. Hon. J. (Cardiff SE)Healey, Rt. Hon. DenisPrice, C. (Lewisham W.)
    Callaghan, Jim (Middleton & P.)Heffer, Eric S.Price, William (Rugby)
    Campbell, IanHooley, FrankRadice, Giles
    Canavan, DennisHoram, JohnRees, Rt. Hon. Merlyn (Leeds S.)
    Cant, R. B.Howell, Denis (B ham, Sm H.)Richardson, Miss Jo
    Carter, RayHughes, Rt. Hon. C. (Anglesey)Roberts, Albert (Normanton)
    Carter-Jones, LewisHughes, Mark (Durham)Roberts, Gwilym (Cannock)
    Cartwright, JohnHughes, Robert (Aberdeen N.)Robertson, John (Paisley)
    Castle, Rt. Hon. BarbaraHughes, Roy (Newport)Roderick, Caerwyn
    Clemitson, IvorHunter, AdamRodgers, George (Chorley)
    Cocks, Michael (Bristol S.)Jackson, Colin (Brighouse)Rodgers, William (Stockton)
    Coleman, DonaldJackson, Miss Margaret (Lincoln)Rooker, J. W.
    Concannon, J. D.Janner, GrevilleRoper, John
    Conlan, BernardJeger, Mrs. LenaRose, Paul B.
    Cook, Robin F. (Edin C.)Jenkins, Hugh (Putney)Ross, Rt. Hon. W. (Kilmarnock)
    Corbett, RobinJohn, BrynmorSandelson, Neville
    Cox, Thomas (Tooting)Jones, Alec (Rhondda)Sedgemore, Brian
    Craigen, J. M. (Maryhill)Jones, Barry (East Flint)Selby, Harry
    Crosland, Rt. Hon. AnthonyKaufman, GeraldShaw, Arnold (Ilford South)
    Cryer, BobKerr, RussellSheldon, Robert (Ashton-u-Lyne)
    Cunningham, G. (Islington S.)Kilroy-Silk, RobertShore, Rt. Hon. Peter
    Cunningham, Dr. J. (Whiteh)Lambie, DavidSilkin, Rt. Hon. John (Deptford)
    Davidson, ArthurLamborn, HarrySilkin, Rt. Hon. S. C. (Dulwich)
    Davies, Bryan (Enfield N.)Lamond, JamesSillars, James
    Davies, Denzil (Llanelli)Lead bitter, TedSkinner, Dennis
    Davis, Clinton (Hackney C.)Lee, JohnSmall, William
    Deakins, EricLever, Rt. Hon. HaroldSmith, John (N Lanarkshire)
    Dean, Joseph (Leeds West)Lomas, KennethSnape, Peter
    de Freitas, Rt. Hon. Sir GeoffreyLyon, Alexander (York)Spearing, Nigel
    Delargy, HughLyons, Edward (Bradford W.)Stallard, A. W.
    Dell, Rt. Hon. EdmundMabon, Dr. J. DicksonStewart, Rt. Hon. M. (Fulham)
    Doig, PeterMcElhone, FrankStott, Roger
    Dormand, J. D.MacFarquhar, RoderickStrang, Gavin
    Douglas-Mann, BruceMackenzie, GregorStrauss, Pt Hon. G. R.
    Duffy, A. E. P.Maclennan, RobertSummerskill, Hon. Dr. Shirley
    Dunn, James A.McMillan, Tom (Glasgow C.)Swain, Thomas
    Dunnett, JackMcNamara, KevinTaylor, Mrs. Ann (Bolton W.)
    Dunwoody, Mrs. GwynethMadden, MaxThomas, Jeffrey (Abertillery)
    Eadie, AlexMahon, SimonThomas, Mike (Newcastle E.)
    Edelman, MauriceMailalieu, J. P. W.Thomas, Ron (Bristol NW)
    Edge, GeoffMarks, KennethThorne, Stan (Preston South)
    Edwards, Robert (Wolv SE)Marquand, DavidTierney, Sydney
    Ellis, John (Brigg & Scun)Marshall, Dr. Edmund (Goole)Tinn, James
    English, MichaelMarshall, Jim (Leicester S.)Tomlinson, John
    Ennals, DavidMason, Rt. Hon. RoyTomney, Frank
    Evans, Ioan (Aberdare)Maynard, Miss JoanUrwin, T. W.
    Evans, John (Newton)Meacher, MichaelWainwright, Edwin (Dearne V.)
    Ewing, Harry (Stirling)Mellish, Rt. Hon. RobertWalker, Harold (Doncaster)
    Faulds, AndrewMendelson, JohnWalker, Terry (Kingswood)
    Fitt, Gerard (Belfast W.)Millan, BruceWard, Michael
    Flannery, MartinMiller, Mrs. Millie (Ilford N.)Watkins, David
    Fletcher, Raymond (Ilkeston)Mitchell, R. C. (Soton, Itchen)Watkinson, John
    Fletcher, Ted (Darlington)Molloy, WilliamWeetch, Ken
    Foot, Rt. Hon. MichaelMoonman, EricWeitzman, David
    Ford, BenMorris, Alfred (Wythenshawe)Wellbeloved, James
    Forrester, JohnMorris, Charles R. (Openshaw)White, Frank R. (Bury)
    Fowler, Gerald (The Wrekin)Morris, Rt. Hon. J. (Aberavon)White, James (Pollok)

    Whitehead, PhillipWilson, William (Coventry SE)Young, David (Bolton E.)
    Whitlock, WilliamWise, Mrs. Audrey
    Willey, Rt. Hon. FrederickWoodall, Alec

    TELLERS FOR THE NOES:

    Williams, Alan (Swansea W.)Woof, RobertMr. James Hamilton and
    Williams, Alan Lee (Hornch'ch)Wrigglesworth, IanMr. David Stoddart
    Wilson, Alexander (Hamilton)

    Question accordingly negatived.

    Amendment made: No. 6, in page 2, line 32, after 'or', insert:

    '. where more than one council held such dwellings on that date,'.—[Mr. Kaufman.]

    Amendment proposed: No. 8, in page 2, line 39, leave out subsection (3) and insert:

    '() A council shall perform their duty under this section by a general increase of the

    Division No. 205.]

    AYES

    [7.52 p.m.

    Adley, RobertFookes, Miss JanetKnight, Ms Jill
    Aitken, JonathanFox, MarcusKnox, David
    Alison, MichaelFraser, Rt. Hon. H. (Stafford & St)Lane, David
    Amery, Rt. Hon. JulianFreud, ClementLangford-Holt, Sir John
    Arnold, TomFry, PeterLatham, Michael (Melton)
    Atkins, Rt. Hon. H. (Spelthorne)Galbraith, Hon. T. G. D.Lawrence, Ivan
    Awdry, DanielGardner, Edward (S Fylde)Lawson, Nigel
    Banks, RobertGilmour, Rt. Hon. Ian (Chesham)Lester, Jim (Beeston)
    Beith, A. J.Gilmour, Sir John (East Fife)Lewis, Kenneth (Rutland)
    Bell, RonaldGlyn, Dr. AlanLloyd, Ian
    Bennett, Sir Frederic (Torbay)Godber, Rt. Hon. JosephLoveridge, John
    Benyon, W.Goodhart, PhilipLuce, Richard
    Berry, Hon. AnthonyGoodhew, VictorMcAdden, Sir Stephen
    Biffen, JohnGoodlad, AlastairMcCrindle, Robert
    Biggs-Davison, JohnGorst, JohnMacfarlane, Neil
    Body, RichardGow, Ian (Eastbourne)MacGregor, John
    Boscawen, Hon. RobertGower, Sir Raymond (Barry)Macmillan, Rt. Hon. M. (Farnham)
    Bowden, A. (Brighton, Kemptown)Grant, Anthony (Harrow C.)McNair-Wilson, M. (Newbury)
    Boyson, Dr. Rhodes (Brent)Gray, HamishMcNair-Wilson, P. (New Forest)
    Braine, Sir BernardGriffiths, EldonMadel, David
    Brittan, LeonGrimond, Rt. Hon. J.Marshall, Michael (Arundel)
    Brotherton, MichaelGrist, IanMates, Michael
    Bryan, Sir PaulGrylls, MichaelMather, Carol
    Buck, AntonyHall, Sir JohnMaude, Angus
    Budgen, NickHall-Davis, A. G. F.Maxwell-Hyslop, Robin
    Bulmer, EsmondHamilton, Michael (Salisbury)Mayhew, Patrick
    Burden, F. A.Hampson, Dr. KeithMiller, Hal (Bromsgrove)
    Carlisle, MarkHannam, JohnMiscampbell, Norman
    Carr, Rt. Hon. RobertHarrison, Col. Sir Harwood (Eye)Moate, Roger
    Chalker, Mrs. LyndaHastings, StephenMonro, Hector
    Channon, PaulHavers, Sir MichaelMontgomery, Fergus
    Churchill, W. S.Hayhoe, BarneyMore, Jasper (Ludlow)
    Clark, Alan (Plymouth, Sutton)Heseltine, MichaelMorgan, Geraint
    Clarke, Kenneth (Rushcliffe)Hicks, RobertMorgan-Giles, Rear-Admiral
    Clegg, WalterHiggins, Terence L.Morris, Michael (Northampton S.)
    Cockcroft, JohnHolland, PhilipMorrison, Charles (Devizes)
    Cooke, Robert (Bristol W.)Howe, Rt. Hon. Sir GeoffreyMorrison, Hon. Peter (Chester)
    Cope, JohnHowell, David (Guildford)Mudd, David
    Cordle, John H.Howells, Geraint (Cardigan)Neave, Airey
    Cormack, PatrickHunt, JohnNelson, Anthony
    Costain, A. P.Hurd, DouglasNeubert, Michael
    Critchley, JulianHutchison, Michael ClarkNewton, Tony
    Crouch, DavidIrvine, Bryant Godman (Rye)Nott, John
    Crowder, F. P.Irving, Charles (Cheltenham)Oppenheim, Mrs. Sally
    Dodsworth, GeoffreyJames, DavidPage, Rt. Hon. R. Graham (Crosby)
    Douglas-Hamilton, Lord JamesJenkin, Rt. Hon. P. (Wanst'd & W'df'd)Pardoe, John
    du Cann. Rt. Hon. EdwardJessel, TobyParkinson, Cecil
    Durant, TonyJohnson Smith, G. (E Grinstead)Pattie, Geoffrey
    Eden, Rt. Hon. Sir JohnJones, Arthur (Daventry)Penhaligon, David
    Edwards, Nicholas (Pembroke)Jopling, MichaelPercival, Ian
    Elliott, Sir WilliamJoseph, Rt. Hon. Sir KeithPeyton, Rt. Hon. John
    Emery, PeterKaberry, Sir DonaldPink, R. Bonner
    Eyre, ReginaldKellett-Bowman, Mrs. ElainePrior, Rt. Hon. James
    Fairbairn, NicholasKershaw, AnthonyRaison, Timothy
    Fairgrieve, RussellKilfedder, JamesRathbone, Tim
    Fell, AnthonyKing, Evelyn (South Dorset)Rees, Peter (Dover & Deal)
    Finsberg, GeoffreyKing, Tom (Bridgwater)Rees-Davies, W. R.
    Fletcher, Alex (Edinburgh N.)Kitson, Sir TimothyRenton, Rt. Hon. Sir D. (Hunts)

    rents of those of their housing revenue account dwellings in the part or parts of their area to which the certificate relates; and a council may make any such increase notwithstanding section 111 of the Housing Act 1957 (charges for local authority's houses)'.—[ Mr. Percival.]

    Question put. That the amendment be made:—

    The House divided: Ayes 227, Noes 237.

    Ridley, Hon. NicholasSmith, Cyril (Rochdale)Tugendhat, Christopher
    Ridsdale, JulianSpeed, Keithvan Straubenzee, W. R.
    Rifkind, MalcolmSpence, JohnVaughan, Dr. Gerard
    Roberts, Wyn (Conway)Spicer, Michael (S Worcester)Viggers, Peter
    Ross, Stephen (Isle of Wight)Sproat, IainWainwright, Richard (Colne V.)
    Ross, William (Londonderry)Stanbrook, IvorWakeham, John
    Rossi, Hugh (Hornsey)Stanley, JohnWalker, Rt. Hon. P. (Worcester)
    Royle, Sir AnthonySteen, Anthony (Wavertree)Wall, Patrick
    Sainsbury, TimStewart, Ian (Hitchin)Walters, Dennis
    St. John-Stevas, NormanStokes, JohnWeatherill, Bernard
    Scott, NicholasTapsell, PeterWells, John
    Shaw, Giles (Pudsey)Taylor, R. (Croydon NW)Whitelaw, Rt. Hon. William
    Shelton, William (Streatham)Taylor, Teddy (Cathcart)Wiggin, Jerry
    Shepherd, ColinTebbit, NormanWinterton, Nicholas
    Shersby, MichaelTemple-Morris, PeterYoung, Sir G. (Ealing, Acton)
    Silvester, FredThatcher, Rt. Hon. Margaret
    Sims, RogerThomas, Rt. Hon. P. (Hendon S.)

    TELLERS FOR THE AYES:

    Sinclair, Sir GeorgeTownsend, Cyril D.Mr. Adam Butler and
    Skeet, T. H. H.Trotter, NevilleMr. Spencer Le Marchant.

    NOES

    Armstrong, ErnestEvans, Ioan (Aberdare)McElhone, Frank
    Ashley, JackEvans, John (Newton)MacFarquhar, Roderick
    Atkins, Ronald (Preston N.)Ewing, Harry (Stirling)Mackenzie, Gregor
    Bagier, Gordon A. T.Faulds, AndrewMaclennan, Robert
    Barnett, Guy (Greenwich)Fitt, Gerard (Belfast W.)McMillan Tom (Glasgow C.)
    Barnett, Rt. Hon. Joel (Heywood)Flannery, MartinMcNamara, Kevin
    Bates, AlfFletcher, Raymond (Ilkeston)Madden, Max
    Bean, R. E.Fletcher, Ted (Darlington)Mahon, Simon
    Bennett, Andrew (Stockport N.)Foot, Rt. Hon. MichaelMallalieu, J. P. W.
    Blenkinsop, ArthurFord, BenMarks, Kenneth
    Boardman, H.Forrester, JohnMarquand, David
    Booth, AlbertFowler, Gerald (The Wrekin)Marshall, Dr. Edmund (Goole)
    Bottomley, Rt. Hon. ArthurFraser, John (Lambeth, N'w'd)Marshall, Jim (Leicester S.)
    Bray, Dr. JeremyGarrett, John (Norwich S.)Mason, Rt. Hon. Roy
    Brown, Hugh D. (Provan)Garrett, W. E. (Wallsend)Maynard, Miss Joan
    Brown, Robert C. (Newcastle W.)George, BruceMeacher, Michael
    Buchanan, RichardGinsburg, DavidMellish, Rt. Hon. Robert
    Butler, Mrs. Joyce (Wood Green)Golding, JohnMendelson, John
    Callaghan, Rt. Hon. J. (Cardiff SE)Gould, BryanMillan, Bruce
    Callaghan, Jim (Middleton & P.)Gourlay, HarryMiller, Mrs. Millie (Ilford N.)
    Campbell, IanGraham, TedMitchell, R. C. (Solon, Itchen)
    Canavan, DennisGrant, John (Islington C.)Molloy, William
    Cant, R. B.Grocott, BruceMorris, Alfred (Wythenshawe)
    Carter, RayHamilton, James (Bothwell)Morris, Charles R. (Openshaw)
    Carter-Jones, LewisHamilton, W. W. (Central Fife)Morris, Rt. Hon. J. (Aberavon)
    Cartwright, JohnHardy, PeterMoyle, Roland
    Castle, Rt. Hon. BarbaraHarper, JosephMurray, Rt. Hon. Ronald King
    Clemitson, IvorHarrison, Walter (Wakefield)Noble, Mike
    Cocks, Michael (Bristol S.)Hart, Rt. Hon. JudithOakes, Gordon
    Coleman, DonaldHattersley, Rt. Hon. RoyO'Halloran, Michael
    Concannon, J. D.Hatton, FrankO'Malley, Rt. Hon. Brian
    Conlan, BernardHealey, Rt. Hon. DenisOrbach, Maurice
    Cook, Robin F. (Edin C.)Heffer, Eric S.Ovenden, John
    Corbett, RobinHooley, FrankOwen, Dr. David
    Cox, Thomas (Tooting)Horam, JohnPalmer, Arthur
    Craigen, J. M. (Maryhill)Howell, Denis (B'ham, Sm H.)Park, George
    Crosland, Rt. Hon. AnthonyHughes, Rt. Hon. C. (Anglesey)Parker, John
    Cryer, BobHughes, Mark (Durham)Parry, Robert
    Cunningham, Dr. J. (Whiteh)Hughes, Robert (Aberdeen N.)Peart, Rt. Hon. Fred
    Davidson, ArthurHughes, Roy (Newport)Pendry, Tom
    Davies, Bryan (Enfield N.)Hunter, AdamPhipps, Dr. Colin
    Davies, Denzil (Llaneill)Jackson, Colin (Brighouse)Prentice, Rt. Hon. Reg
    Davis, Clinton (Hackney C.)Janner, GrevillePrescott, John
    Deakins, EricJeger, Mrs. LenaPrice, C. (Lewisham W.)
    Dean, Joseph (Leeds West)Jenkins, Hugh (Putney)Price, William (Rugby)
    de Freitas, Rt. Hon. Sir GeoffreyJohn, BrynmorRadice, Giles
    Delargy, HughJones, Alec (Rhondda)Rees, Rt. Hon. Merlyn (Leeds S.)
    Dell, Rt. Hon. EdmundJones, Barry (East Flint)Richardson, Miss Jo
    Doig, PeterKaufman, GeraldRoberts, Albert (Normanton)
    Dormand, J. D.Kerr, RussellRoberts, Gwllym (Cannock)
    Douglas-Mann, BruceKilroy-Silk, RobertRobertson, John (Paisley)
    Duffy, A. E. P.Lambie, DavidRoderick, Caerwyn
    Dunnett, JackLamborn, HarryRodgers, George (Chorley)
    Dunwoody, Mrs. GwynethLamond, JamesRodgers, William (Stockton)
    Eadie, AlexLeadbitter, TedRooker, J. W.
    Edelman, MauriceLee, JohnRoper, John
    Edge, GeoffLever, Rt. Hon. HaroldRose, Paul B.
    Edwards, Robert (Wolv SE)Litterick, TomRoss, Rt. Hon. W. (Kilmarnock)
    Ellis, John (Brigg & Scun)Lomas, KennethSandelson, Neville
    English, MichaelLyon, Alexander (York)Sedgemore, Brian
    Ennals, DavidLyons, Edward (Bradford W.)Selby, Harry
    Evans, Gwynfor (Carmarthen)Mabon, Dr. J. DicksonShaw, Arnold (Ilford South)

    Sheldon, Robert (Ashton-u-Lyne)Thomas, Jeffrey (Abertillery)White, Frank R. (Bury)
    Shore, Rt. Hon. PeterThomas, Mike (Newcastle E.)White, James (Pollok)
    Silkin, Rt. Hon. John (Deptford)Thomas, Ron (Bristol NW)Whitehead, Phillip
    Silkin, Rt. Hon. S. C. (Dulwich)Thorne, Stan (Preston South)Whitlock, William
    Sillars, JamesTierney, SydneyWilley, Rt. Hon. Frederick
    Skinner, DennisTinn, JamesWilliams, Alan (Swansea W.)
    Small, WilliamTomlinson, JohnWilliams, Alan Lee (Hornch'ch)
    Smith, John (N Lanarkshire)Tomney, FrankWilson, Alexander (Hamilton)
    Snape, PeterUrwin, T. W.Wilson, William (Coventry SE)
    Spearing, NigelWainwright, Edwin (Dearne V.)Wise, Mrs. Audrey
    Stallard, A. W.Walker, Harold (Doncaster)Woodall, Alec
    Stewart, Rt. Hon. M. (Sulham)Walker, Terry (Kingswood)Woof, Robert
    Stoddart, DavidWard, MichaelWrigglesworth, Ian
    Stott, RogerWatkins, DavidYoung, David (Bolton E.)
    Strang, GavinWatkinson, John
    Strauss, Rt. Hon. S. R.Weetch, Ken

    TELLERS FOR THE NOES:

    Summerskill, Hon. Dr. ShirleyWeitzman, DavidMiss Margaret Jackson and
    Swain, ThomasWellbeloved, JamesMr. James A. Dunn.
    Taylor, Mrs. Ann (Bolton W.)

    Question accordingly negatived.

    8.0 p.m.

    I beg to move Amendment No. 12, in page 3, line 6, leave out subsection (5) and insert:

    '() On the application of a council to whom this section applies the Secretary of State, if satisfied that they have recovered all except a negligible part of the sum which it falls to them to recover, may by statutory instrument make an order authorising them not to recover that part; and any such order shall be subject to annulment by resolution of either House of Parliament'.

    With this we may discuss Government Amendment No. 13.

    The purpose of the amendment is to add some safeguard to the power of the Minister to let people off amounts that should be recovered but have not been recovered. The way in which we thought we might best provide the necessary safeguard was by agreeing that it could be provided by order. In Committee we said that it should be provided by order subject to the affirmative procedure. We had in mind that if it were done the House would know what was happening and there would be no queries that might be taken to court whether the Minister had exceeded his powers. We thought that that would be the best way of satisfying all interests. We agreed, however, that it might be a rather weighty procedure for a small matter and, therefore, in the amendment we have changed from the affirmative to the negative procedure.

    By Amendment No. 13 the Government have come some way to meet us. I am far from saying that we are satisfied that the amendment goes far enough, but I am glad to be able to say that I think it goes some way towards meeting the sort of considerations that we had in mind. As there are other stages at which matters like this can be dealt with—of course we would hope that the Minister might even now consider whether he might go a little further than Amendment No. 13—and because we have before us matters of much greater interest and importance to which I am sure the House wishes to proceed, I do not propose to move Amendment No. 12. I say in advance that if Amendment No. 13 is moved formally we shall accept it.

    I thought that the hon. and learned Member was moving Amendment No. 12.

    I was moving it, but whilst I am on my feet I beg to ask leave to withdraw it.

    I beg to move Amendment No. 13, in page 3, line 9, at end insert:

    "(5A) If the Secretary of State gives a council an authorisation under subsection (5) above, it shall be his duty, as soon as may be after the end of the year in which he gave it, to lay before each House of Parliament a statement of the amount which the council have recovered and of the amount which he has authorised them not to recover".
    I congratulate the hon. and learned Member for Southport (Mr. Percival) on the neat manoeuvre which he has just conducted. I am grateful to him for accepting the amendment. We are seeking to move in the direction which he requested in Committee. I cannot assure him that we shall move still further.

    Amendment agreed to.

    Clause 4

    Termination Of Disqualifications For Failure To Implement Housing Finance Act 1972

    I beg to move Amendment No. 20, in page 3, line 32, leave out Clause 4.

    Clause 4 raises a separate and, in a way, a more serious matter than the other clauses contained in the Bill. It is confined to the Clay Cross situation. It proposes to remove the disqualification which has been imposed on the Clay Cross councillors. The surcharge is not affected.

    The House will remember that an appeal was made by the Clay Cross councillors to the High Court asking for reversal of the judgment made by the district auditor. The High Court found no mitigating circumstances and condemned the Clay Cross councillors in strong terms. Let me say straight away that I very much regret that party colleagues of mine should have been involved in this affair and should have behaved in a way which they no doubt thought was in the interests of their constituents but which in my view, and in the view of many of my colleagues, is contrary to the interests of good parliamentary conduct.

    Is it not contrary to good parliamentary conduct if 65 Members go through the Lobby in favour of the Common Market against a three-line Whip imposed by their own party?

    I do not think that it is wrong for Members to vote according to their conscience, whether it is a three-line or six-line Whip. I suggest that my hon. Friend's intervention was not relevant. However, what my hon. Friend and I care very much about is the smooth working of our democratic parliamentary system. Any group of people, councillors or anyone else, which defies the law passed by a democratically elected Parliament is weakening our democratic system. I very much regret that it was party colleagues of mine who were responsible for this at Clay Cross.

    In defending Clause 4, which removes the penalty of disqualification, a number of arguments were used by Front Bench collegues including my right hon. Friend the Secretary of State and my right hon. and learned Friend the Attorney-General. It was suggested that several precedents conformed or were relevant to the present case. There has been so much legal argument about the extent to which those precedents are relevant that I do not propose to go into the matter at all.

    I accept the fact that similar cases, such as Merthyr Tydfil and Poplar, have some relevance. In the Merthyr Tydfil case, the councillors had their disqualification removed. In the Poplar case, disqualification did not come into the matter as it was concerned with a surcharge. I shall not go into those cases as I am not legally qualified to do so. All I say is that I agree that there are precedents which can be cited, but I do not think that they are relevant in this case.

    We have to consider the situation as it is today and, in particular, whether in the 1970s councillors who do not like a recently passed Act of Parliament are entitled to ignore it and to refuse to operate it. We have to consider whether it is desirable that they should thumb their noses at Parliament, ignore its provisions and the laws it passes and get away with it without any penalty.

    It has been suggested by some of my hon. Friends that there is here a case for mitigation, that we should regard the action of these councillors with some sympathy and therefore remove the penalties imposed upon them. I repeat that I am not talking about the removal of the surcharge but merely of the disqualificaton of these councillors to sit for the next five years as councillors—or three-and-a-half years, as one-and a-half years has passed since the disqualification occurred.

    My hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) made several speeches on this subject in Committee. He argued that the councillors themselves received no financial benefit and therefore should not be blamed too severely. That is true, but if they had received some financial benefit they would of course be in the dock. They received what they no doubt enjoyed at the time, glory and hero worship not only in their constituencies but in many parts of the country. Even at the Labour Party conference they were adulated, and many people spoke of their courageous action in defying the laws of Parliament and refusing to operate them. But true, they did not get any financial benefit.

    To appreciate their motive and to take a properly balanced view, it is important to read what was stated in Tribune of 23rd May 1974 by Councillor David Skinner, when he set out the principle on which the councillors operated. He said
    "To those who accuse us of breaking the law we reply we are keeping the only law accepted by this movement, the principles which stand for the interests of the working class".
    Some people may consider that that is a worthy principle but what he is saying clearly is that the only law which he accepts is that which he considers to be in the interests of the working class, even if Parliament has taken an opposite view and has voted in a different way. That principle, to him, is a complete justification for defying the laws of Parliament on any ocacsion. That is a situation which cannot be tolerated by Parliament.

    My right hon. Friend is using the sort of argument which was used about the trade unions. If the people had obeyed the laws of Parliament which made trade unions illegal, trade unionism would not have been born. The argument about obeying the law, especially in regard to trade unions, was faced by the working class many years ago.

    I am well aware of that. My hon. Friend is going back to the early part of the last century, but this situation is not similar. Here an Act of Parliament was passed which laid down certain action to be taken by district councils. The Act laid down that if councils did not take that action certain penalties would flow. In such circumstances, for any councillor to say, "My view is superior to that of Parliament and I will operate what I think is in the interests of the workers and not what Parliament says is in the interests of the workers", means that parliamentary democracy is at an end. If that attitude were adopted on a large scale, we could not pass law—

    What is my right hon. Friend's view on the right hon. Member for Brighton, Pavilion (Mr. Amery), who was Minister at the time? He was given power under the Act to send in a housing commissioner it councillors refused to carry out the terms of the Act, and was so requested. What is my right hon. Friend's attitude towards a Minister who deliberately refused to implement that section of the Act?

    8.15 p.m.

    That point was raised earlier in the debate. The Minister was not compelled to send in a housing commissioner; he had a choice. Rightly or wrongly, he refused to do so for reasons we know. He was convinced that if a housing commissioner were appointed in this area such was the atmosphere of revolt that it would have been quite impossible for a commissioner to operate. My hon. Friend asked my view on a Minister who did not send in a housing commissioner. My answer is that the Minister was not forced to do so by the law. He acted within his discretion, he said "No", and there is no objection that one can take to that.

    The simple case I put is that for any group of people—councillors or anyone else—to consider that they are above Parliament, to take action of which Parliament has disapproved, to say that their understanding of the interests of the workers is higher than that of Parliament and they will do what they think is right, is a bad thing which should be condemned by the House. If that attitude were allowed to continue, our parliamentary democracy would come to an end. I consider that our system of parliamentary democracy is of supreme importance and should be safeguarded at all costs.

    It is suggested by my hon. and learned Friend the Member for Hackney, North and Stoke Newington that a plea of mitigation should be considered in respect of these councillors. He put forward that argument so effectively and movingly in the Second Reading debate that I made up my mind that should I ever be in trouble in the courts and want counsel to plead mitigation on my behalf I would ask him to do so.

    Every one of us supports mitigation and compassion in all appropriate cases, but surely my hon. and learned Friend would have great difficulty in making a plea of mitigation in a court on behalf of someone who had admittedly committed an offence unless that person was to some extent repentant of the offence, had some plausible reason for committing it and promised not to do the same thing again. In those circumstances, a plea of mitigation might be effective, but that has not happened here.

    Although we cannot go into this in detail, we learn from the report of the district auditor who has looked into the affairs of Clay Cross that there has since been a complete disregard of the standards established for municipal administration, and there has been no promise—

    These people have made no promise not to do the same again. I understand their attitude, although I do not sympathise with it and it is a dangerous one. They think that they are justified in breaking the law whenever it is in the interests of their constituents that they should do so.

    My right hon. Friend must remember that the opinion of the district auditor on further surcharges is under appeal. He is therefore not entitled to say now that these offences have been committed.

    I do not intend to pursue that matter, but the district auditor's report is quoted in the newspapers and is not a secret. I admit that it is subject to appeal and that on appeal the charges may be turned down. The attitude of these councillors, both before and after the Housing Finance Act went through Parliament, is one of complete independence from parliamentary action. Therefore, I do not think a plea of mitigation can be accepted since these people did not give any indication—I put it no higher than that—that they would obey the principles of good government or the laws of Parliament after this affair was over.

    The penalties which these councillors are suffering and which will be removed under the Bill are not terribly serious for people who have done the various things which it has now been agreed they have done, namely, to defy the laws of Parliament on important matters. There is no question of any financial penalty being imposed on them. There might be a feeling of sympathy if we said, "Look, this penalty will damage them, their families and their children". But that does not arise in the slightest. No feelings of compassion can be aroused on those grounds.

    The only penalty we are talking about is that these people should not be allowed to serve as councillors for another five years. Now it is three years, because one-and-a-half years have passed. Is that such a serious penalty? Cannot it be said that, for the protection of the public and ratepayers generally, it is desirable that people who have grossly defied Acts of Parliament in the administration of their council affairs should, when a report such as this one is made by the district auditor and upheld by the High Court, suffer the penalty?

    I will always listen to a serious interruption by my hon. Friend, but I really do not know what my right hon. Friend the Member for Walsall, North (Mr. Stonehouse) has got to do with the issue.

    I do not think that my hon. Friend advances his case at all by mentioning the right hon. Member in any way in support of his case or against my argument.

    Therefore, the sole burden on the Clay Cross councillors is an inability to stand as councillors or to act as councillors for three-and-a-half years. This clause seeks to remove that burden. In other words, it says to them "Although you have defied Parliament and disobeyed the laws, no penalty shall be imposed upon you at all." Parliament, if it wants to preserve its authority, should not say that, but it is what Clause 4 proposes. It is for that reason that Clause 4 should be omitted.

    The case has been repeatedly put by the Attorney-General and by other Ministers that they want to wipe the slate clean. That is an evocative and attractive proposal, but I do not quite know what they mean by it. I should have thought that the best thing to do was to leave matters as they are. Nullifying the decisions of the High Court, if that is what they mean, would not wipe the slate clean at all.

    It is a mucky situation. The Government have left the surcharge, and all they are proposing to do is to remit the remaining few years of the disqualification. That is not a clean situation at all. It is not particularly attractive, nor should such a situation appeal to the House. Obviously, it would be much better to leave matters as they are, so that the decision of the High Court is not interfered with by Parliament.

    At a time when the democratic basis of our society is under some threat, it is right that we should uphold the authority of Parliament, whenever, wherever and by whomsoever that authority is challenged. In no circumstances should we condone the deliberate defiance of Parliament. Because this clause does so, I move, with the support of some of my hon. Friends, that it be omitted from the Bill.

    Clause 4 is, of course, the most contentious part of the Bill—a ll Clause 4s prove contentious. It has been attacked not only by the Opposition but also by some of my right hon. and hon. Friends for whom I have the greatest respect. The arguments they have put forward are extremely serious.

    With a great deal of what my right hon. Friend the Member for Vauxhall (Mr. Strauss) said I am in entire agreement. For example, I am in agreement with him, and not with my hon. Friend the Member for Kingston-upon-Hull, East (Mr. Prescott), about the oft-quoted precedents of trade unions breaking the law in order to establish their simple democratic rights. The basic difference between that situation and the situation we have now is that then there was not adult suffrage and now there is adult suffrage. Therefore, I agree with my right hon. Friend on that matter.

    One does not necessarily have to rely on precedents so far back, though the principle remains the same; but I recognise part of the argument being put forward. Perhaps my right hon. Friend could look also to the new trade union legislation that was brought in by the Opposition when they were in power. It was clearly being defied in a number of areas and caused a great deal of consternation. We repealed that because we considered that it failed in its purpose. It failed to solve many of the problems, and we did not condemn any of the actions against that legislation.

    I am not aware that any of the actions against that are on all fours or parallel with the kind of situation we are discussing now. I do not believe them to be so. I had better return to the matters we are discussing now, which are controversial in themselves, without going very much wider.

    Contrary to what my right hon. Friend the Member for Vauxhall said, I do not believe that there could be a clean situation here whatever we decided to do. Having thought this matter over most carefully, at the end of the day it remains the view of the Government that the House should reject the amendment before it. I should like to say, briefly, why.

    The broad argument in favour of the amendment is that Clause 4 represents a dangerous threat to the rule of law. When the Bill was first introduced the argument was put even more strongly. It was said then that the Bill was not only a breach of the rule of law but was a breach without precedent. We have argued the matter of precedents up hill and down dale in Committee, and in particular we have argued about the Chamberlain precedent of 1927 and the Merthyr school milk precedent. I do not intend to rehearse those arguments once more.

    I found, as I think my hon. Friends generally did, the case presented by my hon. and learned Friend the Attorney-General in our debate on Clause 1 overwhelmingly convincing, and I am sorry that my right hon. Friend dismissed this precedent and, indeed, walked out half way through the Attorney-General's speech. I hoped that he would listen to the end of that speech.

    However, precedent or no precedent, the charge that we are endangering the rule of law stands and must be answered. As the point has been raised so often I must clear up this fact, that there has never been any question of our arguing for defiance of the law. Far from it. As I said on Second Reading, and as many of my hon. Friends know, I fought a long and at times unpopular battle within my own party against those who supported a policy of non-implementation.

    My right hon. Friend the Leader of the House has been criticised for what he said on this matter when in Opposition. In fact, he made the position of the Labour Party Executive quite clear on this subject. He told the Labour Party Conference in 1973:
    "The NEC cannot possibly advise Labour councillors to act unlawfully. We cannot."
    So the Labour Front Bench came out against unlawful defiance of the Housing Finance Act. On the whole, we succeeded, but in a few cases we did not.

    That leaves us with a mess to sort out. This, as I said on Second Reading, is one of those difficult questions of clemency, of partial amnesty and of indemnity which have troubled many different Governments in many different circumstances.

    This Bill, and Clause 4 in particular, cannot be seen as undermining the rule of law. It is recognition of an unfortunate reality. The reality is a situation which has arisen, and the reality is, as the Opposition admit, that we must get out of it. Clause 4 is part of our solution.

    Let me remind the House of what Clause 4 does not do. It does not retrospectively annul the £7,000 surcharge levied on the Clay Cross councillors and upheld by the courts. There is to be no indemnification against this surcharge. Nor will this surcharge, or any other surcharge under the Housing Finance Act, be met from public funds. In some quarters—not those quarters which my right hon. Friend the Member for Vauxhall inhabits—this decision has been very sharply criticised. The Labour Party Conference in 1973 demanded 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."
    8.30 p.m.

    As my right hon. Friend knows, I have declined to implement that resolution. I have refused to remove the financial penalties imposed on these councillors. I have been very bitterly attacked as a result, by one of them in a letter to Labour Weekly in which he described my action as "a complete and utter sellout" of Labour Party Conference decisions. That may be his view. I remain quite unrepentant about my view.

    Nor is our decision to end the disqualification retrospective. By the time the Bill becomes law the councillors will already have been disqualified for a considerable period. I am not trying to lift that disqualification with retrospective effect. It stands and it will stand on the record.

    What Clause 4 does is to shorten the period of disqualification by bringing it to an end when the Bill is passed. We have done this because we feel that it helps to make the Bill more consistent and fair.

    Will the right hon. Gentleman explain how the retrospective removal of a disqualification would assist the gentlemen concerned? Does it mean that retrospectively they could have stood for the new successor council?

    My argument related to and was in the context of a resolution passed at the Labour Party Conference in 1973 which used the term "retrospective removal of disqualification". I acknowledge that the Clay Cross councillors were not only misguided but persistently misguided. But this is the crux of the argument, and I hope that my right hon. Friend the Member for Vauxhall will listen with care. We considered it wrong for them to stay disqualified for failing to implement the Housing Finance Act when other councillors were to be released under this Bill from the threat of similar disqualifications.

    Our views are that, without Clause 4, the Bill would be inconsistent and unfair. That is the crux of the argument for Clause 4. It is not related to the point about the Housing Commissioner to which my right hon. Friend referred, though that is relevant and I shall have a word to say about it later. It is not an act of mitigation of the kind he was discussing. The crux of the matter is that we should have been inconsistent and unfair had we lifted the threat of disqualification from all the other councillors while allowing the Clay Cross councillors to stay disqualified for failing to implement the Act.

    Without Clause 4 the Bill would not go the whole way to wipe the slate clean. It was this wish to clean up the whole mess left by the Housing Finance Act which led to the Prime Minister's commitment in a statement to the House on 4th April 1974 to remove the civic disqualification incurred by the former councillors at Clay Cross.

    An interesting point to emerge from the Opposition's alternative approach, as embodied in new Clause 1, is that on the principle of shortening the period of disqualification arising from a surcharge there is no difference between the two sides of the House. A disqualification is not for life. It comes to an end, and those involved can then become councillors again. New Clause 1 provided for the courts to impose a shorter period of disqualification. Speaking to a similar amendment moved in Committee, the hon. Member for Aylesbury (Mr. Raison) said that:
    "we want to make it possible for the courts to say that a councillor should be disqualified, but that disqualification need not necessarily go to the full term of five years."—[Official Report, Standing Committee D, 8th April 1974, c. 20.]
    The Government are proposing that the decision to shorten the period of disqualification in the case of Clay Cross councillors should be taken here in Parliament and not in the courts. The Opposition will dislike the idea of shortening the period in the case of Clay Cross, but I understand that there is little difference of principle between the Government and Opposition over whether the five-year period should be rigidly adhered to, or whether there should be provision for shortening it in certain cases. It is a matter of judgment—indeed of disagreement—whether it is right to shorten it for the Clay Cross councillors.

    We see it not as as act of mitigation, or as a matter of whether the Housing Commissioner should have gone in earlier. We see it in terms of making the Bill consistent and fair, taking the Bill as a whole, as between all councillors—the 400 or so who declined to implement the provisions of the 1972 Act.

    I want next to refer to the fresh surcharges, totalling roughly £52,000, on the former councillors of Clay Cross.

    Here I must refer to a point which has been made in some recent Press comment. If, as has been reported—and I do not know the truth—the councillors concerned have appealed against these latest surcharges, which have nothing to do with the Housing Finance Act, the matter will be in the hands of the courts. Whatever happens, I have no intention of bringing before this House legislation to relieve them in respect of those surcharges. I hope that that dispels any doubt about the matter that may exist.

    I emphasise again, if it needs emphasis, that these surcharges, amounting to £52,000, concern items of expenditure which have nothing whatsoever to do with the Housing Finance Act or with this Bill. I must also make it quite clear that these surcharges are made by the district auditor and that a right of appeal lies not to me but solely to the courts under the Local Government Act 1933. Provision is made in Section 229 of that Act for appeal to the courts, and in section 230 for application to the court for relief. Any such appeals for applications must be made within six weeks of the date of the surcharge.

    Will my right hon. Friend also quote the section of that Act which says that if the surcharge is less than £500 per person—and it is in respect of 10 of the individuals—there is a right of appeal to the Minister, but that if it is more than £500 they must appeal to the Divisional Court?

    I am afraid that I cannot quote the section because I do not have it before me. I believe what my hon. Friend says to be correct, but, to make assurance doubly sure, I will ask whichever of my hon. Friends winds up the debate to quote the provision that my hon. Friend has in mind.

    It has been reported that the Clay Cross councillors will appeal. I do not know whether this is so. There have been two contradictory reports in the past two days. Whatever they do, the proper course for Government Ministers is to refrain from any comment which might in any way be held to be prejudicial to anyone's interests or to the fair and impartial consideration of any further proceedings on the surcharges.

    We must consider Clause 4 in terms of today's situation and as part of a Bill to deal with matters arising solely from the Housing Finance Act, but, if the situation were reached where Clause 4 would have no practical effect, of course we would consider the matter again.

    Will the right hon. Gentleman confirm that, if the Clay Cross councillors were to appeal to the High Court only to have their appeals turned down, or if they refrained from appealing, and the surcharges stood, they would be disqualified for a further period of five years?

    That follows absolutely and completely. If either event occurred, we would reconsider the whole matter of Clause 4 in what would then be a completely different situation.

    Finally, we must keep a sense of proportion about Clause 4. Clay Cross and this clause have become the focus of criticism in this whole matter of default under the Housing Finance Act and have received the lion's share of the publicity. I accept that the ex-councillors of Clay Cross deliberately and wrongly defied the law. There is no argument about that, but there are members of almost 20 other authorities who will probably also be found by the district auditors to have acted in such a way that in the normal course they would be surcharged and, under the Bill, would be subject to rent loss certificates. I must maintain parity of treatment between those many councillors and the Clay Cross councillors who have been surcharged already—

    The main difference between Clay Cross and the other councils is that at Clay Cross a surcharge was imposed for part of the loss of rent because the Tory Government chose to impose an extraordinary audit after a short period of time.

    Here, I refer to the point about the Housing Commissioner. I remind the House of what I said on Second Reading. When the Housing Commissioner was finally sent into Clay Cross The Times, which has thundered fairly heavily against what we propose in this Bill, said in an editorial:
    "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."
    That passage appeared in The Times. Unfortunately, that is precisely what the Conservative Government did.

    I 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.

    Clause 4 is needed to maintain consistency of treatment between the 400 or so councillors who declined to implement the 1972 Act. If in the future the situation changes, I shall, as I have said, reconsider the need for it, but for the moment I must ask the House to reject the amendment.

    The opening speech in the debate was one which I am sure all hon. Members will have felt was as courageous as it was convincing. It was very fitting that it should have come from the right hon. Gentleman who is the Father of the House, because it was a speech in defence of the principles for which the House should stand, if it stands for anything, the defence of parliamentary democracy.

    It will not go unnoticed that the collection of hon. Gentlemen—and I call them that because it is customary—who occupy the Front Bench below the Gangway seem to have no regard whatsoever for those principles.

    It is equally regrettable—no, it is not equally regrettable, because nothing could be quite so regrettable as the conduct of the hon. Gentlemen on the Front Bench below the Gangway—it is regrettable that the Secretary of State is even now—having heard those views expressed so clearly and so forcibly by the Father of the House—not prepare to accept them.

    The debate is not over. Perhaps even yet there will be some shift of opinion on the part of the Government.

    I shall make one or two observations which I hope may reinforce the argument presented by the right hon. Gentleman the Member for Vauxhall (Mr. Strauss). Let me make it clear to the Secretary of State that he is quite right when he says that we persist in the contention that the passage of the Bill would engender—I mean endanger—the rule of law.

    I am most grateful to the hon. and learned Gentleman. He is reading his speech in rather a slipshod manner, but I am grateful for the opportunity to intervene. How is it that he and his hon. Friends can talk about parliamentary democracy and its preservation when they are prepared to sell out to the Commissioners in Brussels? Does he not accept that there will be a shift of power away from Parliament to Brussels if we stay in the Common Market? Is not the corollary that we should vote "No" in the referendum in order to preserve the parliamentary democracy he claims he wants to defend?

    If the hon. Gentleman really believes that I am reading he had better look at my notes. As to the second part of his intervention, in a way I am glad I gave way because, although what he has said is totally irrelevant, it indicates to the House the views of the hon. Gentlemen on the Front Bench below the Gangway.

    The Secretary of State said that the Bill he was dealing with was one of those difficult questions of clemency that have troubled many Governments. He went on to quote the Audit (Local Authorities) Act 1927. That Act was not an act of clemency. It was described by the Labour Party, which was than in Opposition, as an Act designed to suppress local government. That measure introduced far greater penalties than ever before, and it was described by the right hon. Gentleman's predecessor, the then Opposition spokesman, as an Act designed to suppress local government.

    8.45 p.m.

    The right hon. Gentleman suggested that he and his Cabinet colleagues were declining to implement Labour Party conference resolution No. 191. But all financial penalties, as well as disqualification, have been removed from the 400 councillors who, the Government say, are still in danger. That resolution has been fully implemented in regard to them. The effect of Clause 1 is that nobody who has not yet been surcharged, but who would otherwise be surcharged, will be surcharged in respect of any of the losses resulting from failure to implement the Housing Finance Act. The Government say that that clause is necessary because up to 400 councillors stand in danger of having that happen to them, not for anything they might do in the future but for something they have done, the consequences of which they cannot escape except by the passage of the Bill.

    Therefore, what is being done is to implement the substance of the resolution in regard to all those people. The Bill relieves them of the otherwise inevitable consequence of suffering financial penalties and being disqualified, but it does it in advance rather than waiting until it has happened. It is a specious argument in those circumstances to say that the Secretary of State is refusing to implement the resolution. The only way in which he is refusing to implement it is by refusing to relieve the Clay Cross councillors of the present surcharge of £6,900, or thereabouts.

    It is said that that surcharge will be paid by means of a levy raised within the party. We are still waiting to hear that it has been raised, that steps are being taken towards raising it, or even that somebody feels so strongly about the plight of those concerned that he is volunteering to raise the money. That is the only penalty of all the penalties which would otherwise be suffered which is not being relieved by the Bill.

    It is plain that the effect of Clause 4 is small compared with the effect of Clause 1. The curious thing is that, having first let the impression be spread that Clause 4 was the important one, because that was the one that removed disqualification, the Government having got past Clause 1, which does far more than Clause 4 would do. They now say that because Clause 1 is in the Bill they must have Clause 4, because not to have it would be unfair to those few covered by Clause 4.

    There is some argument in that if it would mean that the 11 were the only ones left out. That may support the case of the hon. Member for Bolsover (Mr. Skinner), but it does not support the Government's case. The Government cannot now say that because they have taken so big a step as to relieve of all liability up to 400 councillors, many of whom are far more important to the Labour Party than those of Clay Cross, they must also relieve those affected by Clause 4.

    There is a dilemma, a dilemma entirely of the Government's own making. It is not one that the House should allow to lead it into letting the clause remain in the Bill.

    The Secretary of State referred to the precedents. I shall resist the temptation to refer to them again. One of the differences between Clause 4 and Clause 1 is that we know what was done by the people to whom Clause 4 relates. We do not even know yet how many people are affected by Clause 1, let alone who they are or precisely what they did. We do know what was done by those affected by Clause 4. Therefore, we can see in relation to them how far the views expressed by the Attorney-General in the opinion he gave in 1972 are applicable to the circumstances as we know them in respect of the Clay Cross councillors.

    I have always accepted that the question the right hon. and learned Gentleman was asked which led to his giving that opinion were not precisely the questions which now arise. But I have always said that the answers should be the same because there is no difference in principle, and I should like to demonstrate what I mean. The right hon. Gentleman said:
    "I know of no example of legislation by one Parliament to recompense persons or organisations for financial penalties incurred in consequence of refusing to obey the requirements of legislation passed by a preceding Parliament.
    Therefore, he contemplated that persons would refuse to obey the requirements of legislation. He was contemplating legislation which said "You must do so and so" and people replying "We know that you say that we must do this, but we shall not do it." Those words are directly applicable to the case of Clay Cross, because in September 1972 the people involved passed a resolution stating that they would not do what the Act required of them.

    The hon. and learned Gentleman may be surprised to learn that the Clay Cross councillors passed a resolu- tion early in 1972 indicating to the then Secretary of State for the Environment that they would not implement the Act. They said that they would not collect the extra £1 which was due to be paid under the Bill when it became law. They also declared at their council meeting—this was well publicised—that the Government should send in their housing commissioner to collect the rent. What is more important, they made it abundantly clear that they would not obstruct him. The only reason why the obstruction took place 12 months later was that they were dragged through the courts by the then Tory Government.

    The hon. Gentleman has put forward these totally spurious arguments so often. They have been dealt with time and time again. There was no obligation on the Minister. The Minister, in these circumstances, had four alternatives. That was decided by the Court of Appeal, which said that the Minister was under no obligation as to which to choose. That is a different matter.

    In the first part of his intervention the hon. Gentleman supported what I said—that the Clay Cross councillors refused to obey the requirements of the legislation passed by Parliament. The only difference is that the Attorney-General said that there was no example of a Parliament recompensing persons or organisations for financial penalties incurred through doing that. What is the difference in principle between recompensing people for penalties which they have incurred or relieving them of penalties which they will incur if the existing processes of law are completed? I suggest that there is no difference in principle. What the Attorney-General said was as relevant to Clause 4 as to the question to which he previously addressed his mind. He went on to say:
    "An Act of Indemnity passed for this purpose would, in my opinion, contravene all constitutional practice and would set a dangerous precedent."
    Every word of that is applicable to Clause 4. He went on to say:
    "Moreover, the expression of an intention by a political party to pass such legislation in the event of such a party being returned to power could only be construed as incitement to those concerned to refuse to obey the law; such an expression of intention would, therefore, also set a dangerous precedent."
    Every word of that is equally applicable to what was done by the Clay Cross councillors with the encouragement given to them by their seniors in the party who should have known better and are now driven to rescue them from the consequences.

    This is important. The hon. and learned Gentleman says "And the others".

    But the others, even though they are not having so extreme and thorough a solution applied to them as we propose, under new Clause 1 will not have visited upon them the full penalties of the present legislation. The hon. and learned Gentleman must constantly concede that the others are being helped and relieved by new Clause 1 which he proposed.

    The terminology used by the Secretary of State presupposes that new Clause 1 had been carried. If it had been carried, there would be some force in what he said. But new Clause 1 has been rejected by the Government. The result is that all the other councillors who defied the law—about 400 of them—will be totally relieved under Clause 1. That is why I agreed with the hon. Member for Bolsover when he referred to the others.

    The next observation made by the Attorney-General in the opinion which I was quoting before being interrupted continued:
    "It is my opinion that 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."
    It is because we can see no difference in principle between what is happening now and what the Attorney-General was saying then that we are surprised to find a Law Officer of the Crown supporting such a Bill.

    Another point made by the Attorney-General was that if we took steps to relieve the people who had defied the law of the consequences of what they had done, we would create all sorts of anomalies, because other people would have to bear the burden. That is a further consideration that arises here and a further reason given in the opinion for the views he expressed which are equally applicable in present circumstances. I suggest that if any hon. Member doubts the applicability of the views expressed by the Attorney-General in that opinion, he ought to have another look at it.

    The Attorney-General was right in what he said in 1972. He has never tried to say that he said anything different in 1972 from what he did say then. His error is in refusing to accept that the principles are equally applicable to the circumstances today as they were to the precise questions put to him then.

    Lastly, I want to deal with the remaining point made by the Secretary of State, which was that, in effect, there is a similarity between what we were suggesting in new Clause 1 and what the Government are doing. We were suggesting that the court might have power to reduce the period of disqualification, whereas in the Bill the Government are taking the decision to shorten the period.—What bunkum. There is no comparison between that and the powers and the rights which would have been given under new Clause 1. The question whether the period of disqualification should be shortened should be decided by a wholly independent party with full knowledge of the facts and after hearing representations on behalf of those concerned from all points of view. It is a totally different matter.

    The falsity of what the Secretary of State is suggesting may be finally demonstrated in this way. Supposing that there were any sense in our saying that we should consider reducing the period. We should first look at the facts. Under the Labour Government in 1969–70, the councillors affected by this clause were already being warned by a Labour Minister, the hon. Member for Barnet, East (Mr. Freeson) that they had better he careful.

    9.0 p.m.

    Talking of the councillors' actions which led to the surcharge, Lord Denning said:
    "It lay ill in the mouth of the councillors to say that the minister had acted unlawfully. Each of them"—
    that is, the councillors—
    "had deliberately broken the solemn promise which he had given when accepting office. Each had flagrantly defied the law. Each was determined still to continue to defy it. … The men were not fit to be councillors. The sooner they were disqualified the better."
    He also said:
    "The time had come when they must be told quite firmly that the law had to be obeyed. Their disobedience could not be tolerated. They were disqualified. They must stand down."
    Those are the facts on which the House should be acting.

    I must remind the hon. and learned Gentleman and the House that that was an opinion, not a legal fact, that Lord Denning used in his summing up of that case. May I also remind him that in the subsequent election at Clay Cross the new council was elected by 72 per cent. of the electorate on the same mandate as the previous council? That was the answer to Denning.

    If hon. Members think that that is the answer to a view expressed by a person of the eminence of the Master of the Rolls in a wholly independent tribunal, they are entitled to their view, but I should not expect it to be one which would enjoy much credence in the House.

    That is not all. We now have another report from the auditor, in which we are told that there are further losses of £100,000 which resulted from the refusal of the Clay Cross councillors to implement the Act. This is in addition to all the other sums for which they have now been surcharged, amounting to £52,000, in addition to the £25,000 interest on capital borrowed to finance revenue, and in addition to another sum which escapes me for the moment.

    All this led the district auditor to say in the last paragraph of his final report, having given details of losses, unlawful payments and so on totalling £192,813:
    "These figures provide a measure of the extent to which the interests of the ratepayers were disregarded by the members of the UDC in their deliberate defiance of the laws which it was their duty to administer—"

    On a point of order, Mr. Deputy Speaker. Some time ago your predecessor in the Chair ruled out of order discussion of the subject which the hon. and learned Member is now discussing.

    I was not aware that this matter had been raised with my predecessor in the Chair, but so far I do not think there is anything strictly out of order.

    Further to that point of order, Mr. Deputy Speaker. There is an appeal lodged and the case is sub judice according to the rules. Perhaps you would care to check up.

    I remind the hon. Member that the sub judice rule does not apply when legislation is being discussed.

    I am obliged for your assistance, Mr. Deputy Speaker. I shall read that passage again since I was stopped in the middle of it. It said:

    "These figures provide a measure of the extent to which the interests of the ratepayers"—
    and let us never forget that councillors are trustees for all their ratepayers, not just a few of them—
    "were disregarded by the members of the UDC in their deliberate defiance of the laws which it was their duty to administer. Looking at the picture of their activities in 1972–73 and 1973–74 it is evident that their defiance of the Housing Finance Act 1972 was only the first step in the path of lawlessness along which lay their subsequent decisions and action."
    These are the people whom the Secretary of State believes should have their period of disqualification shortened. The quotations I have read are from the only independent material that is available to the House. No wonder it is said that if we pass the Bill it must inevitably result in monstrous harm by proclaiming that those who spit upon the law may do so with impunity provided they do so in a sectional political interest. That is the sort of thing we are asked to support in Clause 4.

    The whole House should be grateful to the Father of the House for so clearly putting the arguments for not having this clause, and should support him in the Lobby in his endeavour to see that the House upholds the principles of which it has been proud for so long. I assure him that my right hon. and hon. Friends will support him to the full and with glad hearts.

    I am sure that the Opposition will support my right hon. Friend the Member for Vauxhall (Mr. Strauss). They are only too glad to get hold of any stick with which to beat the Government. I have great regard for my right hon. Friend. He has presented his case, but I do not agree with him. The hon. and learned Member for Southport (Mr. Percival) seems to think—he said it several times—that because this is an opinion of the Father of the House we should pay special regard to it. My right hon. Friend is the Father of the House and I have regard for him, but I am a little older than he is and perhaps the hon. and learned Gentleman will pay some attention, therefore, to what I am about to say.

    I noticed that the hon. and learned Member talked about the opinions of the Government benches below the Gangway. He knows perfectly well what my view is. I do not know whether he puts me with them on this matter. I have, naturally in my profession, a very great regard for the law and I agree that one should not sanction any breach of the law. I deplore any action which is a breach of the law. Parliament is supreme in making the laws, and whether the laws are good or bad they should not be broken. If we want to attack or change them we must do so by constitutional means.

    The hon. and learned Gentleman said
    "Let us look at the facts as they are."
    I invite him to do just that. What happened? An iniquitous Act, which we were all highly indignant about and on which we expressed our indignation at the time—the Housing Finance Act—was passed. It attacked the system by which local councils fixed rents. Local councils were extremely annoyed and indignant about it, just as we were.

    What did the local councillors at Clay Cross do? They expressed their indignation. They said "We will not implement the Act. We will not carry out the provisions of the Act." That was clearly a breach of the law. But they also said, and my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) on this much despised front bench below the Gangway got up and told the hon. and learned Gentleman that they made that quite clear to the Minis- ter. They said that they wanted him to send in a housing commissioner to deal with the position.

    We know that the Minister had the power to send in a commissioner and we know that he did not need to send one in if he did not wish to. What an action on the part of the Conservative Government! They were told explicitly by the council that it would not implement the Act and that it wanted a housing commissioner sent in. Why did the Tory Govmiment not do that?—instead of leaving the Clay Cross Councillors to break the law. Was that not a disgraceful act on the part of the Tory Government?

    I do not think that the councillors at Clay Cross acted within the law. They were clearly in breach of the law. But, to adopt once again the words used by the hon. and learned Gentleman, let us look at the facts. They did not do what they did for their cwn benefit. They were representatives of the citizens. They took the view that they ought to refuse to implement the Act. They were wrong although they genuinely thought that it was in the interests of their constituents. We all agree that they were wrong and that they committed a breach of the law.

    My right hon. Friend the Member for Vauxhall said that when I had previously made a speech on this subject I had given no plausible reason for the mitigation of the penalty. Let us see whether there is not some plausible reason. I am sure that if my right hon. Friend is satisfied that there is such a reason he will support the Government. I have said that the councillors asked the Government to send in a commissioner. They made it clear that they would not obey the law. They acted sincerely, believing that they were acting in the interests of their constituents. They did not act in any way for their own benefit. Is that not a plausible reason to be considered in mitigation?

    The hon. and learned Member for Southport is a member of the Bar. He has taken part in criminal cases and has defended someone who has committed a dreadful crime. He has got up and put every point he could in mitigation. The judge has taken these points into account in imposing sentence. What has happened here? The Clay Cross councillors have suffered the penalty of the surcharge. They are not being relieved of that. They suffer the penalty of disqualification until the date when under the Act by reason of Clause 4 they will be relieved of it. They are being punished by surcharge and disqualification. It is only right that we should consider that and their motives in mitigation of their case.

    The Opposition are a jolly sight worse—I nearly said "a damned sight worse" but I had better not—than the Tory Government of 1927. In that year, until the end of October 1927 the Poplar Council defied the law. In their mercy the then Tory Government said "We shall relieve you of any surcharge until the end of October 1931". Although the hon. and learned Member for Southport has put forward all sorts of arguments about that, that fact is crystal clear. There one has mercy exercised by a Tory Government. That is a quality which seems to be denied by the Opposition tonight.

    9.15 p.m.

    Will the hon. and learned Gentleman bear in mind that from start to finish of the discussions that took place on the 1927 Bill there was, so far as I can see, no suggestion from anyone that it was a merciful Bill. On the contrary, the hon. and learned Gentleman's predecessors in the Labour Party said that it was a monstrous Bill, a Bill to suppress local Government.

    Of course they said it was a monstrous Bill. However, it was a Conservative Government who mitigated to an extent the position of the Poplar councillors. That is crystal clear, and that cannot be denied. I note that the Opposition are not ready to extend any mercy tonight. I say that if it were only for that reason and that reason alone—namely the question of mitigation—the clause would be right.

    The hon. and learned Gentleman has tried to attack the other point that was made most strongly by my right hon. Friend the Secretary of State. The hon. and learned Gentleman has said that under Clause 1 the 400 other councillors have been relieved. Therefore, he asks "What does Clause 4 do apart from relieve the Clay Cross councillors?" My right hon. Friend has spelt out the position. He has said that we should have consistency, and that as we have relieved the other councillors we should also relieve the Clay Cross councillors.

    The hon. and learned Gentleman has also sought to criticise my right hon. and learned Friend the Attorney-General. He tried to show that the question which my right hon. and learned Friend answered was equally applicable to the position today. I remind the hon. and learned Gentleman of the question. My right hon. and learned Friend said:
    "You asked for my considered opinion on the possibilities and difficulties of a future Labour Government initiating legislation to recompense trade unions, councillors or both who suffer financial loss in consequence of the operation of the Industrial Relations Act or the Housing Finance Act."
    The vital words were "who suffer financial loss". My right hon. and learned Friend answered quite correctly. It is absurd for the hon. and learned Gentleman to try to compare that with the position of disqualification under Clause 4. His analogy does not stand up if it is considered carefully.

    The hon. and learned Gentleman has said that I said the question was the same. I did not say that. I said that I recognised that the question was not the same but that the answers should be the same for the same reasons.

    I appreciate that the hon. and learned Gentleman said that, but he is quite wrong. I have said so before and I repeat it now. If he will take the trouble tomorrow, in the calmness of his chambers or in the quiet of the Library, to read through what he said tonight, he will see how utterly wrong he is. This matter was discussed in Committee at great length. I made my views clear in Committee and I have made them clear tonight. I repeat that the Opposition are not only making heavy weather of this but are trying to take every opportunity of attacking the Labour Government. I reject what they have said, and I hope that the clause will remain in the Bill.

    I do not intend to keep the House for more than a couple of minutes. I merely wish to add my congratulations, as a very new Member, to the Father of the House for the courage which he has shown. I am sorry that some of the signatories to the amendment were not present when he made his speech.

    I am not a man of legal training, but I am sure that the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) knows very well that this matter concerns not only the Housing Finance Act 1972 but earlier events. It would be an insult to fellow councillors and to the electorate if the clause were allowed to remain. As I said in Committee, a councillor is supposed to be a member of an honourable calling. I think we should uphold that tradition in this Chamber.