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New Clause A

Volume 897: debated on Monday 4 August 1975

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Repayment And Disqualification

Lords amendment proposed: No. 1, in page 2, line 27, at end insert new Clause A—

"A.—(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 paragraphs (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 expenditure or suffered the loss or deficiency in question, or to its successor council, such part as the court thinks 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) subject to subsection (4) hereof 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 shall order him to be disqualified for being a member or elected to a local authority for a period of five years unless there are special circumstances connected with the relevant transactions to be specified by the court which in the opinion of the court justify the remission of the whole or part of any such disqualification.
  • (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 incur ring 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, before making an order under subsection (3)(a) above, shall have regard to all the circumstances, including that person's means and ability to pay and the degree to which in the opinion of the court he was guilty of wilful default.
    (5) Any person in relation to whom an order may be 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."

    Read a Second time.

    6.51 p.m.

    I beg to move, as an amendment to the proposed Lords amendment, at end of new Clause A add:

    '(8) Any person who has been surcharged in respect of an item of account or a loss or deficiency attributable to a council's failure to implement the Housing Finance Act 1972 may make an application to the court in respect of the said surcharge and the provisions of this section shall apply to the said application and to the powers and duties of the court in respect of it as if it were an application made under this section in respect of a certificate to which it applies'.
    It is my privilege to move this important amendment, which raises questions going to the heart of the problem with which we are all trying to deal. I stress the words "all trying to deal" as we are attempting to find a sensible solution to this question. Its direct effect applies only to the 11 Clay Cross councillors who have already been surcharged once for the sum of £6,985. That is important. I hope to show that this amendment will put those councillors in a better position than any of the alternatives open to them under the Bill.

    The amendment raises an even more important questions of principle first that everyone should be treated in the same way. That is a most important question. Secondly, although we agree that justice should be tempered with mercy none of us should tamper with the rule of law or put it at risk. All people who offend the law, as these people have offended, should be treated alike. No hon. Member would quarrel with that proposition. Indeed, everyone would pay lip service to it so let us see whether that is so with the Bill. That involves a two-stage process—first to discover who is affected by the Bill and secondly whether those who are affected are being treated alike.

    Let me first look at who is not affected by the Bill. No councillor who acted reasonably—for instance, those who applied under the Newcastle amendment and who, whilst waiting for answers, did nothing—has anything to fear from the existing law or has any need for this Bill. No one who believed that his actions were authorised by law has anything to fear from the law or has any need for the Bill. That was demonstrated clearly by my hon. Friend the Member for Southend, West (Mr. Channon) on Second Reading, who mentioned three councils which were late in implementing the Act, but which, as they were acting reasonably, and as they believed that what they were doing was authorised by the law, were not even surcharged.

    What my hon. Friend says is accurate. Two of the councils to which I referred wrote to the Secretary of State to tell him that it was not their intention to implemen the Act. Even in those circumstances the district auditor did not decide to surcharge them.

    I am obliged to my hon. Friend.

    Despite those facts it appears that the Government had to accept that there were people who could neither show that they had acted reasonably nor that they believed they had acted within the authority of the law. On Second Reading, the Secretary of State said:
    "A number have convinced the district auditor that there were reasonable grounds for their delay: a fact which underlines what I said earlier—that authorities were in genuine difficulties over implementing the Act."
    Those are some of the cases to which my hon. Friend referred. He went on:
    "But in the remaining cases—a score or so—the district auditor may well find that the rent losses were due to misconduct, and that it is therefore his duty to surcharge the councillors involved."—[Official Report, 24th March 1975, Vol. 889, c. 38.]
    It is only those councillors who, in the words of the Father of the House, the right hon. Member for Vauxhall (Mr. Strauss), said:
    "To hell with the law, to hell with Parliament."
    Those are the only people who need the protection of this Bill. He rightly went on to say:
    "Under the circumstances, I do not see why Parliament should show any clemency towards these people. If it did, it would set a serious precedent for the future."—[Official Report, 24th March 1975, Vol. 889, c. 83.]
    This is the answer to my first question of who is affected by the Bill and who needs the Bill. It is only the people who said "To hell with the law, to hell with Parliament" and who openly defied the law.

    Now for the second part of the comparison. Are all those people being treated alike? Under Clause 4, the 11 who have been identified are let off three of their five years' disqualification. But they receive no financial relief. The right hon. Member for Vauxhall said that that was wrong and that they should not be let off three of their five years' disqualification. I agree. This is not a matter where Parliament should simply let off those people.

    However, the effect of Clause 1 was much worse until the new clause, which is the subject of the first amendment, was added in the other place. For the effect of Clause 1 was as follows.

    An unspecified number of councillors—being about 400—and unidentified as to the councils involved, were to be relieved of all penalties, financial and otherwise. They were men and women who had taken the oath to carry out their duties according to law and spat in the face of it. They were guilty of misconduct. They could not claim that what they did was reasonable. They could not say that they believed their actions were authorised by law. Even at this late stage the House must realise that what was proposed under Clause 1 was infinitely worse than what was proposed under Clause 4, and that the people affected by the Bill were not being equally treated. These 400 unidentified, and, I suspect, important, people were treated much better than the 11 people from Clay Cross who are being let off three years' disqualification. That seems bad enough, baldly stated like that. But when we realise that Clause 1 implemented Labour Party conference resolution 191 in full, except in the case of the 11 Clay Cross councillors, we also realise how disgraceful was this exercise until the other place improved the Bill by adding the new clause—to which my amendment would add yet a further advantage.

    For a long time the Secretary of State managed to distract attention by playing on the fact that the Clay Cross affair was news. For a long time many people, including Members of Parliament, believed that Clause 4 mattered most, simply because the people to whom it referred were news. Thank goodness all of that has been exploded, first in Committee, secondly by my right hon. and noble Friend Lord Hailsham, leading for the Opposition in another place, and by Lord Wigoder, leading for the Liberals in another place. Now we see two things without a shadow of doubt. First, all those who offended and are affected by the Bill are not being treated in the same way. Secondly, the real evil of the Bill lies in Clause 1 and not in Clause 4.

    7.0 p.m.

    I come now to the next stage of the argument. In the Second Reading debate the Secretary of State at least had the good grace to say that he did not suggest that his Bill was perfect. That is the understatement of the century. He invited us to say how we would deal with the situation. I think that he will be good enough to acknowledge that he did not have long to wait for the answer to that question.

    In Committee in our first amendments we put forward a method which has received at least some commendation from the other side of the House. The Secretary of State and the Attorney-General were good enough to say that they recognised that it was an attempt to put forward a constructive alternative. The hon. Member for Liverpool, Toxteth (Mr. Crawshaw) thought that there was a good deal of sense in it and the hon. Member for Islington, North (Mr. O'Halloran) thought that it would be as good as a permanent improvement in the law relating to surcharges. That method was examined in detail in Committee and pursued on Report in this House. Unhappily, it was rejected out of hand. Now the other place has given us a chance to reconsider the position, thus demonstrating yet again both how fortunate we are to have a revising House and what nonsense the hon. Member for Holborn and St. Pancras, South (Mrs. Jeger) must sometimes talks if the Daily Telegraph report is accurate.

    Having added the new clause to which the amendment is moved, the other place went on to move a new clause which would have extended to the Clay Cross councillors the benefits of the clause that it had just carried. That offer was spurned by the Government and not pursued in the other place. We are pursuing it in this amendment.

    My case on the amendment is immensely powerful and may be summarised thus. It offers the House a chance to do four things which we must do if we place any value the trust reposed in us as elected Members of this House. We must uphold the rule of law, temper justice with mercy, treat all those who offended in precisely the same way and take the whole matter out of party politics. We can achieve all four by passing the amendment and agreeing with the other place in the first amendment which we shall then go on to consider.

    It is a two-part exercise because the new clause has to stay if the amendment is to have an effect. I hope that the House, having decided to make this amendment, will decide to keep that new clause, but that is the subject of the next debate and my hon. and hon. and learned Friends will be dealing with it in detail so I shall confine myself to this amendment.

    But I must refer to some words attributed to the Secretary of State and reported in the Daily Telegraph of last Thursday, and I am sure he will tell me if they are inaccurate. He is reported as having said of the new clause and what the other place had done:
    "'Their object is to wreck the Bill and preferably to wreck the Labour Party as well', Mr. Crosland alleged. 'Those 400 councillors would be dragged one by one through the courts. Many would suffer heavy fines and most would be disqualified. We should be forced into a series of by-elections on grounds of our opponents' choosing, and some of the best Labour-controlled local authorities in the country would be decimated in the process. That is what their Lordships want to see.'"
    The Secretary of State does not deny having said that, but I remind him that we do not even know the names of the councils concerned, let alone the councillors. He and his Government will not tell us the councils, they will not tell us how many are affected and they will not tell us the names of the councillors. How nonsensical can he get? How can the right hon. Gentleman possibly suggest that we are trying to force the Government into a series of by-elections on grounds of our choosing when we do not even know the names of the councils?

    Does not this perhaps lift the corner of the rug a little and give us an insight into what is happening underneath? Is the real fact of this matter that many important Labour councillors would be disqualified if our amendment were accepted, and is that why the Secretary of State is so anxious, first, to put up a smokescreen to distract attention from such an unworthy motive and, secondly, to ensure that these important people do not risk any penalties? It certainly looks like it.

    Looking back on it, one wonders whether that is not what the Attorney-General had in mind when in the Second Reading debate he said:
    "We believe that the Government could not have waited longer, and that we now have enough information to enable and require us to take action to avert"
    these are the important words—
    "great potential damage to local authorities".—[Official Report, 24th March 1975; Vol. 889, c. 157.]
    It looks now as if what the Government had in mind was that some important Labour councillors would cease to be councillors because they could not say that their actions were reasonable or that they believed that their actions were authorised by law; because they would have to admit that they had said "to hell with the law and to hell with Parliament".

    That raises suspicions which give rise to many questions. Are we not perhaps witnessing the most squalid exercise in rescuing political friends that can ever have been seen in this country? Are we not perhaps witnessing the most squalid example of a Labour Cabinet taking instructions from its party conference and, to make it worse, pretending that that is not the case? Would they have done this but for Resolution 191? Except for the Clay Cross councillors what they are doing is exactly what resolution 191 enjoined them to do, except that they are not carrying it out in full in respect of the Clay Cross councillors.

    And the hon. Member for Toxteth will forgive me for borrowing a question he asked: would they have done this if the offending councillors had been Conservatives and not Socialists? Of course they would not. If they had gone as far as we have gone in our new clause, they would have been boasting how generous they had been to those Conservative councillors. Let us have an end to humbug. Let us have some straight talking in this matter.

    I suggest that this amendment ought to appeal both to those who are most closely concerned with the Clay Cross councillors and to the Secretary of State. The amendment should appeal to the Clay Cross councillors and their friends, first, because it is considerably better for them than are any of the other courses of action and, secondly, because it ensures that they are treated on the same footing as everyone else. Whatever the basis, why should not they be treated on the same footing?

    Let me demonstrate these two points by a quick look at the three choices, which are that Clause 4 stays, Clause 4 goes and that this and the Lords amendment stand. If Clause 4 stays, no, if Clause 4 goes, these people are thrown to the wolves. They get no relief at all. That looks as though it will happen unless our amendment is accepted. That would ensure that they were treated like everyone else.

    If Clause 4 stays, each of these people will still be liable for a sum of £5 short of £7,000. I hope that no one imagines that it is as easy as Mr. David Skinner is reported to have suggested today. I do not know whether the report is accurate, but he has been reported as saying that he was not going to pay, that he would give up his job and go on social security, and that people could go hang for their money. I do not suppose he said that, but if he did say it and people imagine that it is as easy as that, they have it wrong. It is a serious matter for anyone to be under liability to pay that amount of money because the law will catch up with him in the end.

    The third choice is to carry our amendment and leave new Clause A in the Bill. What then would be the position of the Clay Cross councillors? First of all, they would have the benefit of this provision like everyone else. Their liability would immediately be limited to £1,000. It need not be that much, because we say that in deciding how much each person should pay, up to a maximum of £1,000, the court should have regard to the means of each person. That is surely a sensible suggestion.

    Is the hon. and learned Gentleman suggesting that the case would be taken jointly or severally, with a maximum of £1,000 altogether? Or would the liability be £1,000 individually? If he means the latter, the Clay Cross councillors would be called upon to pay more than they are being called upon for now.

    It does not mean that. I assure the hon. Gentleman of that if he is bothered about it. The £1,000 would be a maximum, and if the amount at issue was, say, only £500, no one would be ordered to pay more. The court would have regard to the means of the parties, as it should be able to, and could therefore ensure that these gentlemen, who were grievously misled by their own leaders who should have known better, and were egged on to do things which they might not otherwise have done—that might be a good case of mitigation before the court—paid no more than their means allowed. They could speak for themselves, or get someone to do so, and ask for their liability to be limited to a modest sum.

    It is incontrovertible that our proposal would give them a better chance of limiting their liability than either of the other alternatives. Furthermore, the court could let them off some of the disqualification if satisfied, on being asked to do so by them or their counsel, that there were grounds for doing so. I do not think that anyone could quarrel with the proposition that they would as individuals be in a better position, if the amendment were carried and new Clause A remained in the Bill, than they would be either if Clause 4 remained or if Clause 4 went.

    The other thing is that they would then be on the same footing as everyone else. Of course, to gain that benefit hon. Members opposite have to vote for the amendment and new Clause A. But why should not these other people be under the same potential liabilities as the Clay Cross councillors? In one go, we could put everyone on the same footing. I suggest to the hon. Member for Derbyshire, North-East (Mr. Swain) and his hon. Friends, who are very closely connected with this matter, that it would be very much in the interests of those for whom they have fought for so long to join us in taking these steps.

    7.15 p.m.

    I suggest that this proposal ought also to appeal to the Secretary of State because, on Report, as well as before, he made such a point of wanting a Bill that was consistent. On Report, he said:
    "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."
    Later, he said:
    "We see this"—
    Clause 4—
    "not as an 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 have declined to implement the provisions of the 1972 Act."
    He went on:
    "I must maintain parity of treatment between those many councillors and the Clay Cross councillors who have been surcharged already."
    Finally, he said:
    "I ask for parity and equity of treatment between all those who failed to implement the Act, whether the surcharge had been made—as it was in the case of Clay Cross—or whether it had not been made, as was the case in all the other places."—[Official Report, 14th May 1975; Vol. 892, c. 564–593.]
    That is exactly what we offer the right hon. Gentleman by our amendment and new Clause A. It is the only way in which he can have that which he has said he wants. It is the way in which he could have his Bill on a basis which he has said is to him the fundamental basis that he wants to achieve.

    We are not unaware of the political pressures being put upon the right hon. Gentleman. I do not underestimate the personal courage which would be required to rebuff those who are engaged in the squalid, outrageous political manoeuvrings which lie behind all this. But I say to the right hon. Gentleman from my heart, if he has any respect for this House, if he has any respect for parliamentary democracy, and if he has any respect for the rule of law, let him now prove it by recommending his hon. Friends to accept the amendment.

    I do not propose to speak at length because most of the points I would have made have been made by the hon. and learned Member for Southport (Mr. Percival). I was desirous of putting this amendment down myself, but found it had already been tabled by the Opposition, and I did not know whether my name to it would give it added lustre or detract from it, so I left it as it was.

    I have opposed most of this Bill from the inception, primarily because I believe that if we are to mete out justice we have to do it through the recognised courts. We know that the councillors about whom we are concerned were under tremendous pressures from all sorts of organisations. We can understand how some of the councillors acted as they did. I believe that many of them acted in that way because they were misled by people in my party who should have known better and should have set a better example. I believe that, not in so many words but by nods and winks, many people were encouraged to break the law. Therefore, if these provisions go through such matters will be taken into consideration.

    It is ironic that a Bill which has come to be called the "Clay Cross Bill" did something for almost all councillors except the Clay Cross councillors. Those councillors would have had to pay the surcharge and automatically would have been made bankrupt eventually, and indeed would have been disqualified from ever being councillors again.

    I believe my hon. Friend is a lawyer, and if he has studied the Local Government Act 1933 he will know that there are two ways in which an auditor can collect a surcharge. First, he can go to the magistrate's court for a distress warrant against goods and chattels, and, secondly, he can go to the county court for an order of attachment. That piece of legislation appears to make my hon. Friend's argument this evening quite worthless.

    I disagree with my hon. Friend. Ultimately a person can be made bankrupt to enable him to pay what is required. In those circumstances he would be disqualified from sitting on a council. Therefore, the provision gives nothing to the Clay Cross councillors whatever.

    I have always said that we should mitigate the punishment against these people, provided that this can be done through a court of law and not by an arbitrary decision taken by the Government Front Bench. That is the element to which I have objected throughout the Bill. If we are asked to use the poor box to help these people, I would be the first to agree—again provided that these matters are handled through the courts of law rather than by my party sitting here in Government.

    Furthermore, I believe that all those people who have disobeyed the provisions of the Housing Finance Act should be put on the same plane. There are two categories of people concerned. I am surprised that there are so many of my hon. Friends who are prepared to see the Clay Cross councillors take a secondary position compared with other councillors. The Clay Cross councillors are to bear the whole brunt, whereas the others will get away 100 per cent. free. It is just not logical.

    I urge my hon. Friends, particularly those who have fought so hard for the Clay Cross councillors, to consider this matter very carefully. Under the provision as it stands, there will be 100 per cent. exemption for some councillors and the others will have to pay the surcharge.

    My arithmetic may be wrong, but the councillors concerned will find great difficulty in finding the money with which to bear the surcharge. However, under the amendment the maximum would be £1,000.

    If we pass the amendment, the Clay Cross councillors will have the possibility of having their cases heard again by the High Court and they could be put in a position were they would be surcharged not more than £1,000.

    I do not quarrel with my hon. Friend in seeking to make the situation as clear as he can, but the fact is that on a purely arithmetical basis the 11 Clay Cross councillors currently are charged a figure of about £8,000, with accrued interest, compared with the previous surcharge of £7,895. Among 11 councillors that represents less than £1,000 apiece. In seeking to act—I believe misguidedly—in the best interests of those he is trying to help, my hon. Friend is suggesting that £11,000 is less than £8,000. I just cannot believe it.

    As I understand the situation, the figures are much higher than that and each councillor is personally liable for the whole amount. That is the difference.

    Does the hon. Gentleman agree that in the present situation the auditor could choose to proceed against each individual councillor for the whole £7,000, whereas under the clause they would be limited to a maximum of £1,000 at the most?

    That is exactly the point I was seeking to make to my hon. Friend the Member for Bolsover (Mr. Skinner). If my hon. Friends who wish to support the Clay Cross councillors cannot support the amendment, I believe that there must be some other reason for so doing which I cannot possibly understand.

    If my hon. Friend the Member for Bolsover allows me to proceed without interruptions, I am sure that my hon. Friend will have time to make his speech later. I repeat that if my hon. Friends do not support the amendment, they are depriving the Clay Cross councillors of the opportunity of being dealt with in the same way as any other councillor.

    I wonder what answer my hon. Friends will give when they attend this year's Labour Party conference when they are told that the provision mentions Clay Cross councillors only. Nobody knows who are the others affected, but they are the people over whom apparently the fight has taken place. I can only assume that my hon. Friends wish the Clay Cross case to be used as a source of discontent within the party and the country. I can see no other reason.

    It is hardly likely that any of the councillors, in view of their financial position, will be surcharged anything like £1,000. Mitigating circumstances will be put forward and again it is unlikely that they will be disqualified for a period of five years.

    I am confused about the present situation and I would ask my hon. Friend to help us. One councillor who goes before the court may be a careful, modest-living man, who has some small savings for his old age and who might even have £1,000 in the Post Office. On the other hand, another councillor before the court might be a person who has lived it up over the years and he may be able to prove to the court that he is up to his ears in hire purchase, that his wife owns the family house and all the rest of it. How will the court act in those two entirely different cases? Surely the provision will give the court an impossible judgment to arrive at.

    I do not agree that it will put the court in an impossible situation. As I know the courts, they pay high regard to a person's financial situation. If people are out of work and come before the court, it is likely that there will be no surcharge at all. I must emphasise that I am not seeking to exonerate the councillors completely from the law, but I am seeking to ensure that the situation is fair as between the Clay Cross councillors and the other councillors who would get away with it totally. If my hon. Friends have any regard for the Clay Cross councillors, they will support this provision. I must inform them that when it comes to the vote, I shall support both the amendment and the clause.

    7.30 p.m.

    It will only take me two minutes to put my hon. Friend the Member for Liverpool, Toxteth (Mr. Crawshaw) straight. He attended the meeting on Thursday night, and a collective decision was made. My hon. Friend saw fit to criticise the Tribune Group last week, but this week he has issued his own whip and sent round to hon. Members, including myself, who represent Clay Cross, a copy of his letter. If my hon. Friend wants the Clay Cross councillors to be served as the other 400, or conversely the other 400 to be served as the Clay Cross councillors, he should have tabled an amendment to the Lords amendment asking my right hon. Friend to guarantee protection under resolution 191 of the conference. In that way everyone would be granted immunity.

    The Clay Cross councillors are suffering. My hon. Friend the Member for Toxteth has done his arithmetic all wrong, as has the hon. and learned Member for South-port (Mr. Percival). Only a few weeks ago the Conservatives were castigating the Clay Cross councillors but now they are appealing to the Clay Cross councillors in order to get sympathy for their own case. I know that hypocrisy is an unparliamentary word.

    With respect, the hon. Member for Derbyshire, North-East (Mr. Swain) has entirely overlooked the wording of the new clause. [Interruption.] I hope that the hon. Member for Bolsover (Mr. Skinner) will, if he so wishes, make a speech, instead of coming in late when the point has been explained and sitting moaning and wailing like I do not know what.

    The hon. Member for Derbyshire, North-East has overlooked the fact that in the new clause the total amount to be surcharged on the eleven councillors cannot exceed £6,985 because the only amount that any of them can be ordered to pay is a part of the deficiency—they cannot, between them, be ordered to pay more than the total deficiency. That is a fact. If the hon. Gentleman had overlooked that point, I quite understand, and I quite understand if the Member for Bolsover had not understood. Can we now debate this matter on the right facts with the right approach instead of having a very specious argument like the present one?

    That is a hell of a lot more money and I understand that the hon. Member for Toxteth also agrees. The Clay Cross councillors were surcharged after six weeks and the surcharge worked out at £6,985 each—jointly or severally. As a consequence of this amendment, that six weeks' surcharge, which is now the subject of perhaps a bankruptcy order, will carry on automatically until it becomes £1,000 per member, again jointly or severally, under the amendment. There was a deuce of a lot of money outstanding at Clay Cross. [Interruption.] The hon. Gentleman is trying to marry two male prostitutes, and they will not have it. He is trying to convince me and my hon. Friend the Member for Bolsover (Mr. Skinner) that this is quite a reasonable thing to do. [HON. MEMBERS: "Withdraw."]

    I apologise to the male prostitutes. Under this amendment even the Clay Cross councillors would be worse off financially because of the continuation of the amount up to £1,000. [An Hon. Member: "Rubbish."] It is not rubbish. I was the leader at Clay Cross. I take the whole responsibility. The right hon. Gentleman who was the Minister at that time was so crooked in his ministerial post that if he swallowed a nail he would part with a corkscrew on that particular issue. He surcharged and sent in the auditors after six weeks. That is why Clay Cross has been the centre of the issue. However 400 councillors will get the benefit, indeed 411 including Clay Cross.

    I am not satisfied with the amount of benefit Clay Cross is receiving. I am not on speaking terms with my right hon. and hon. Friends on this issue, because my right hon. Friend should have implemented resolution 191 regardless. He should not have come to the House, having had a dream in the night, and then changed it all round to make it look beneficial to 400 but throw 11 on the sacrificial altar. I see that my hon. Friend the Member for Toxteth agrees with me on that point. He will march for charity, but not for Socialism. I shall march for Socialism.

    I appeal to the House to support the Government. The amendment must be rejected tonight.

    I think that the most I can say about the hon. Member for Derbyshire, North-East (Mr. Swain) is that his loyalty to his erstwhile comrades is touching but his grasp of the constitutional and legal implications of the Bill and the amendment is rather slight.

    The House has been round this course before. There is now an extra dimension to our debate. On the first occasion we were concerned with the position of district auditors, the maintenance of at least some standards in local government, the position of ratepayers as a body as opposed to council house tenants, and the retrospective condemnation of flagrant breaches of the law. Finally, and perhaps not least importantly, we were concerned with the constitutional position of the Attorney-General.

    We are now being asked by the Government to override the carefully argued, thoughtfully expressed, views of another place. The Labour Party, having emasculated the second Chamber and flouted practically every constitutional convention, is naturally concerned to railroad through this Bill. However, it has, by its actions, demonstrated a clear need either for a stronger upper House or for some entrenched provisions, such as a new Bill of Rights. These possibly are some of the principles which we should be canvassing tonight in the various debates which I hope we shall have.

    There used to be a strong antipathy in the country to the dispensing power exercised by the Crown. There is equal antipathy to a dispensing power exercised by a highly partisan, if rather ephemeral, parliamentary majority. Those who compose it seem more concerned with one particular class of ratepayers than with the whole body of ratepayers. I had hoped that the other place, which by convention is how I must describe the House of Lords, had perhaps let the Secretary of State off the hook. I pay the right hon. Gentleman the compliment and tribute that I suspect that his heart is not in this work. I am sorry that he feels obliged to return to the House and go over this rather muddy course again. I hope that he will pay great attention to the views expressed by the Opposition. Surely he must agree that it would be better for the matters canvassed in the clause to be determined in the calmer, more dispassionate atmosphere of the courts rather than in the fevered atmosphere of this Chamber in August.

    I cannot say what the outcome in the courts would be, but I remind the House that there was an escape route open to the Clay Cross councillors under the Local Government Act 1933. They could have taken that route and appealed against their disqualification on the basis that they had reasonable grounds for acting in the way that they did. However, surprisingly enough they did not choose to take that course, and they cannot now complain that they did not have proper legal advice, because by a curious coincidence they were represented on that occasion by the hon. Member for York (Mr. Lyon). Therefore, perhaps the hon. Member can tell the House why they are so sceptical of their chances in a court of law under this amendment.

    It could be that the hon. Gentleman will tell us, because he has told us that he accepts full responsibility for what went on.

    I have been down that same road before. I was in No. 8 cell in Winson Green Prison. It was the first time in my life that I got three meals a day.

    I suggest to the hon. Gentleman that in his present position he should be a little more scrupulous about observing the laws in this place introduced and passed—[Interruption.] The hon. Member for Bolsover (Mr. Skinner) can make his point, if he dares, later in the debate. I am concerned with the hon. Member for Derbyshire, North-East. No doubt we are all touched by his reminiscences about his earlier happenings in his career. He say that he takes full responsibility for what happened at Clay Cross. As he says that he takes full responsibility for what happened at Clay Cross, let him pay the surcharge.

    Who is the hon Gentleman suggesting is a crooked lawyer? Would the hon Gentleman care to stand up and say who he suggests is a crooked lawyer?

    I am afraid the hon. and learned Member for Dover and Deal (Mr. Rees) is going to burst a blood vessel in a moment. If the cap fits, he can wear it.

    I am afraid the cap will not fit. That was an unparliamentary expression. The hon. Member for Derbyshire, North-East (Mr. Swain) must withdraw it. It is desirable to keep the temper of the House down, if possible.

    Is it only the hon. and learned Member with the massive head of hair who is going to have your protection, Mr. Deputy Speaker? Am I not to be given any protection against his bit-tongue? These are the only speeches that the hon. and learned Member for Dover and Deal (Mr. Rees) makes for nothing.

    Most certainly I will give the hon. Member for Derbyshire, North-East the protection of the Chair when it is necessary. Can we proceed with the debate in an even temper? [HON. MEMBERS: "Withdraw."] The hon. Gentleman must withdraw his remark.

    It is often said by Mr. Speaker that he is conveniently deaf. I notice that you, when I stand up to speak, are occasionally short-sighted, Mr. Deputy Speaker. Nevertheless, I withdraw the words that I used and I apologise to every crooked lawyer in this country for bringing him down to the level of the people who sit on the opposite side of the House to me.

    I accept the hon. Gentleman's withdrawal but not his apology.

    Our sympathy should perhaps go out to the Secretary of State because of the company he keeps today. Perhaps the saddest aspect of this whole case is the way that the Labour Party treats some of its most distinguished spokesmen.

    I am paying this tribute by design to the Secretary of State and the Attorney-General. We know that they left Oxford and the law school with ideals of pride and with thoughts high, with the intention of providing the Labour Party with a new philosophy and perhaps the laws of England with a new coherence. What has happened to them after a lifetime of devoted service to the Labour Party? They have become creatures—puppets—of the hon. Members for Bolsover and for Derbyshire, North-East and their Tammany associates. They will pass into history as the refuse collectors of Clay Cross. For the sake of their reputation as well as for the country's sake, I hope that we shall uphold the Lords amendment tonight.

    7.45 p.m.

    If I may seek to lower the tone a little, I, as a fairly new Member of the House, should like sincerely to congratulate the hon. Member for Liverpool, Toxteth (Mr. Crawshaw), who made a brave and honourable speech. That should be made clear from this side, certainly from this bench.

    I also wish to pay tribute to the Lords amendment, which is understandable, compassionate and fair. I served on the Standing Committee and listened to innumerable arguments between lawyers for many hours, but at the end of it all I did not understand half of it. I understand these arguments and I understand the argument which took place in the other place between the noble Lords. They have their priorities right. They have it right in Clause 1. Therefore, these Lords amendments should be approved by the House tonight.

    I go one step further. Having read all about Clay Cross and taken an interest in it and listened to the speech made on Second Reading by the hon. Member for Bolsover (Mr. Skinner), I understand some of the idealism of the councillors of Clay Cross. I do not support what they did, but I understand them and their frustrations. I shall be supporting these Lords amendments, but I listened to the speech of the hon. Member when the Bill was first introduced to the House and I have some feeling for his case. I have told him so.

    I understand the way in which in poorer areas of the country councillors have desperately wanted to do something better. One cannot as a councillor ever support what they did. Why should not this be spread right across the board? Why should the Clay Cross councillors be the only ones who are thrown up in this way? If other councillors have gone against the Bill—we understand that there are 400 of them—as the hon. Member for Toxteth said, they should all be in the same boat together. That is why these amendments should be supported.

    Briefly, I should like to deal with the principle behind the objection of the three Opposition speakers who have taken part. They have used as the basis of their argument the claim that every law must be obeyed in all circumstances. I do not think that is a tenable position.

    If a Labour Government introduced a Bill to make it compulsory for comprehensive education to be introduced, do hon. and learned Members opposite argue that every Conservative councillor who refused on principle to accept that should be bankrupted? It is possible that some hon. Members would accept that, but I am not sure that all of them would.

    To take it a little further, let us suppose that a Labour Government, or indeed any Government, did something as extreme as that done by Pharaoh, who introduced the edict of the slaughter of the firstborn. There are some things so unconscionable that some hon. Members opposite would not accept them. Some of them would not have accepted the edicts of Hitler. Because some men refused to accept Hitler's laws, they lost their lives and those of their families in concentration camps.

    It may be objected that neither Pharaoh nor Hitler was the head of a democratic Government, but in this country there have been democratically elected Governments who have done things so abhorrent, so against the principles of ordinary men and women, that ordinary men and women were prepared to be sent away from their families to Australia for refusing to obey the law.

    If in Tolpuddle there had not been men prepared to refuse to accept the law which made trade unions virtually illegal, there would be no trade union movement today. The same kind of stand was made by the women of the suffragette movement and by people serving other great causes. [Interruption] Let me finish this point and I will take any questions. The hon. and learned Gentleman the Member for Southport (Mr. Percival) finished his point and would not take a question from me.

    I am saying that there are democratically elected Governments which have been resisted by men and women on matters of conscience, and they have become greatly honoured for it. I greatly honour the 400 councillors in Clay Cross and in the part of the country from which I come who were prepared to risk losing their homes and possessions because they kept their pledge. They believed that to increase rents unnecessarily was wrong.

    I should like to take the hon. Member back from his more recent flights of fancy to what he said about comprehensive education. I come from Essex and have made it absolutely clear that, although I shall help to fight the Government's proposals, I shall not support anybody in refusing to observe the law—or what may become the law. Am I to understand, from what the hon. Gentleman says, that if Conservative councillors' defy the law, as it may become, on comprehensive education he will be demanding their indemnification? That is what he appears to be saying.

    I am putting the question back to the hon. Gentleman. He must answer the question. If they break the law, are they to be bankrupted? If he says "Yes", I accept that, but I go further. If there is a law introduced which the hon. Gentleman finds absolutely contrary to his conscience and belief, must he in all circumstances obey it? He may reply "Yes, I am prepared to do it and prepared to accept the consequences." Fair enough; but so were the councillors at Clay Cross. It is we who are asking for this, not they, and they are entitled to their point of view.

    The agricultural labourers of Tolpuddle are greatly honoured, but their rights were restored to them. Surely we are not doing anything wrong in wishing to restore to the councillors of Clay Cross their rights.

    My hon. Friend has, in the course of his argument, referred to the Tolpuddle Martyrs. I remind the House that there were also the five dockers who broke the law, and it was the Conservative Government at that time who discovered an unknown Official Solicitor who was able to get them out of their difficulty.

    My hon. Friend's remarks support the point I am making, which is simply that there are certain laws which are so repugnant that men and women of conscience are prepared to break them. If some of us are ready to defend them—as I for one am—we are entitled to do so.

    I should first like to remind the House of the terms of the amendment which is before it. I listened with great interest and care to the speech of the hon. and learned Gentleman the Member for Southport (Mr. Percival). Quite properly, he went into some of the aspects of the clause that we shall be discussing later. I do not quarrel about that, but I should like to keep very specifically to the terms of the amendment.

    It is clear that this amendment has been moved in what I am bound to describe as a misguided and confused attempt to provide consistency. Conservative Members must recognise that their amendment is blatantly retrospective. It provides for the reopening of a case which has already gone through the courts. Indeed, the surcharge which would be reconsidered if the amendment were accepted is already the subject of bankruptcy proceedings. It is not in the least clear what effect the amendment would have on these proceedings.

    There seems to be some difficulty about retrospective legislation because it has gone through the courts, but are we not in Clause 4 seeking to remove a surcharge that has already gone through the courts? I am sorry. I meant the disqualification.

    I should like to put the lay view in this matter because, with great respect, the lawyers get mixed up from time to time. The hon. and learned Gentleman made a specific allegation about my right hon. Friend the Secretary of State being afraid to reveal to the House and the country the names of the councils which are affected. He will know that this is a matter for the district auditor. The district auditor has yet to conduct hearings, and therefore the Government obviously cannot prejudge the issue. I can recognise that there might be a genuine wish for even treatment in allowing the courts to reconsider the disqualification which was simply an automatic consequence of the Clay Cross surcharge. But I say to the House, in all seriousness, that it would be unwise to put the whole matter through the courts again after it has already been the subject of lengthy appeals.

    The amendment is muddled in content and misguided in intent. It attaches to a clause to which we are wholly opposed. Touched as I am by the concern expressed by the Opposition tonight for the Clay Cross councillors after the extravagant abuse they have used on previous occasions, I invite the House to reject the amendment.

    I was feeling sorry for the Under-Secretary of State in having to intervene in this debate. He was not involved in our earlier proceedings, and the House knows him as a decent and honest man, but I really think that the answer he has just given us a very pathetic answer indeed. I believe that he is worthy of something very much better than that.

    The hon. Gentleman produced the argument that the amendment we are discussing is a misguided and confused attempt to provide consistency. He produced absolutely no reasons at all to support that point of view. He complained only that it was blatantly retrospective, when it is obvious that the whole force of Clause 4 is retrospective.

    This debate was opened by my hon. and learned Friend—

    Clause 4 cannot be retrospective, because the people concerned have already served two years of the sentence.

    8.0 p.m.

    It is retrospective in relation to their disqualification. The debate was opened by my hon. and learned Friend the Member for Southport (Mr. Percival) with a speech which I think commanded a great deal of support from all hon. Members who are seriously concerned about this matter. My hon. and learned Friend argued the case very carefully and persuasively. His speech was followed by that of the hon. Member for Liverpool, Toxteth (Mr. Crawshaw), to whom I want to pay my respect, because he set out the issue with great clarity and dignity.

    Then the debate slid a little. I might say to the hon. Member for Derbyshire, North-East (Mr. Swain) that it is clear that, as a result of our amendment, none of these councillors would have to pay more than under the present situation. That is clear and categoric.

    The final contribution from the back benches was the bizarre speech by the hon. Member for Salford, East (Mr. Allaun), the relevance of which was barely perceptible. The hon. Gentleman ignored the fact that the whole essence of what we were trying to do was to provide fairer treatment for the Clay Cross councillors. He might have made some reference to that which is the salient part of the case for this amendment.

    My hon. and learned Friend's case is incontrovertible. I ask the House to support it.

    Question put, That the amendment to the Lords amendment be made:—

    The House divided: Ayes 257, Noes 271.

    [For Division List 319 see col. 187]

    Amendment accordingly negatived.

    I beg to move, That this House doth disagree with the Lords in the said amendment.

    I understand that it is convenient to discuss at the same time the Lords amendments Nos. 5 and 6.

    The amendment is substantially similar to one moved by the Opposition on Report. Our principal objection then, as now, was that the effect of the clause would be to draw out this sorry affair. In each case where the district auditor decided to issue a rent loss certificate it would be referred to the courts, which would consider whether the councillors responsible for any surchargeable loss should be required to make good any part of such loss up to £1,000 each, and whether they should be disqualified from civic office for up to five years.

    The effect would be that month after month, year after year, local government would receive the verdicts on events which are already in most cases more than three years old. The details and arguments about events in each of the 18 or so councils concerned would be dragged through the courts and the Press. Irreparable damage would be done to a service already under great pressure from Press and public, to individuals and their families and to councils and the areas for which they acted.

    8.15 p.m.

    All this would come at a time when local government is urgently in need of the trust and confidence of the public. Involvement and service in public life are more demanding and difficult today than ever before. Local government reorganisation, the effects of inflation and increasing demands by ratepayers on public services have all contributed to the growing criticism and denigration of a service which is vital to our democratic way of life. The House should ponder long and carefully before adding to the difficulties in the way envisaged by the clause.

    Under our proposals in Clause 1 the normal procedure of the district auditor is not altered save at the point of surcharge. This means that he must carry out a very full investigation of each case, and there must be a public hearing at which local electors may object formally to any loss or expenditure incurred by their former council. The district auditor must completely satisfy himself whether any items of account are illegal or whether any losses were caused by negligence or misconduct.

    I have the greatest respect for district auditors. They have considerable experience in determining just this sort of issue. But the Opposition, by the terms of their clause, appear to lack confidence in that experience, for they demand that after the district auditor has carried out his detailed investigation the court should cover exactly the same ground again.

    It is more than likely that on such a difficult issue there would be appeals to higher courts. Only after a lengthy process would the local authorities know how much of the loss of rent would be left for them to recover from the local community. Incidentally, this is a defect in the Bill as it has been returned to us. Under the definition of "effective date" of the rent loss certificate in Clause 1, a local authority might well have to commence recovery of the lost rent before knowing how much was to be recovered as a result of a court's decision under the new clause.

    The new clause conclusively demonstrates the unwillingness of the Opposition to close the book, to show any appreciation of the strong feelings that were raised by the Housing Finance Act. They are, apparently, determined to extract personal penalties at any cost. They fail to recognise the main object of the Bill, which is to put this divisive affair behind us and allow local authorities to recover their losses from the local community.

    The clause would probably impose extra legal costs to be borne by the authorities. It would certainly increase bitterness and cynicism about local government, and would bring benefit to nobody.

    Therefore, I ask the House to reject the amendment.

    My hon. and learned Friend the Member for Southport (Mr. Percival) made clear in the previous debate that, although Clause 4 has had most of the limelight, it is Clause 1 that matters most and is the real outrage. Clause 1 establishes something that we accept—the rent loss certificate. We believe that that is the right approach. What the Lords amendment does, following the Opposition's approach in this House, is to say that, instead of the certificate being the end of the matter for the councillors, there shall be a further certificate stating the sum and the people who would have been surcharged.

    This certificate would be sent to the court, which could order individuals to pay up to £1,000 of the surcharge and, where the total loss exceeds £2,000, be liable to disqualification for up to five years. We stress that the court should have regard to all the circumstances including ability to pay. We have argued this scheme at length, both in Committee and on Report. I do not propose to repeat every word of those arguments.

    The scheme which the Lords have put into the Bill contains certain essential points. First, I believe it to be true that that the scheme has never been seriously attacked on the ground of whether it stands up. The Under-Secretary has just criticised it on technical grounds, but it is a criticism that could easily be corrected if the will were there. No significant technical faults have been found with the scheme. Furthermore, the Government spokesmen acknowledged during the Committee stage and until today that the scheme is a thoroughly constructive one. The Attorney-General said on Report that:
    "It is a carefully constructed attempt…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."—[Official Report, 14th May 1975; Vol. 892, c. 490.]
    That statement was echoed by other Ministers in earlier proceedings. It is a careful attempt to deal with this difficult problem. More than that, it is a scheme that tempers justice with mercy. As hon. Members have said, it could well serve as a prototype for the future legislation which many of us believe we shall have to have in place of the scheme that existed in the 1933 Local Government Act and was substantially varied in the 1972 Act.

    Does the hon. Gentleman not appreciate that if this scheme were adopted we could have long-drawn-out proceedings in the courts, possibly appeals, considerable expense and a great deal of bitterness and cynicism? Surely he will pay attention to that important fact.

    I shall deal with that point in a moment. When one breaks the law one has to face the consequences. The vital point, which has never been met by the Government, is that this amendment upholds the principle that if councillors defy the law they must expect to face the consequences. It is no good quoting, as the Attorney-General did in Committee, dubious precedents. The fact is that if the Government allow the Bill through in the form they want, they will have no answer to future councillors who might choose to defy the law, whether it is over the Community Land Bill, comprehensive education, the mysterious, secret magical, mystery incomes Bill or anything else.

    I repeat, what would the Secretary of State do if, on some future occasion, councillors broke the law and turned to him saying "Why cannot you let us off as you let the Clay Cross councillors off and the other 400 who defied the Housing Finance Act?"? The Secretary of State and the Attorney-General have never answered that question, which is absolutely crucial to the whole debate.

    As my hon. and learned Friend the Member for Southport said during the last debate and as the hon. Member for Liverpool, Toxteth (Mr. Crawshaw) said, the effect of the Lords amendment is to take this matter out of the political arena into that of the courts. This must be right in principle. The courts can consider this matter dispassionately. However, it must be many more times right in this case than in any other when the political jobbery involved in what we are discussing has been so blatant. It is utterly wrong that the Secretary of State should contemplate coming to the aid of Labour councillors in this way.

    I shall not go over again the disgraceful story of the 1973 Labour Party conference, the sayings of the Leader of the House and so on. They are on the record and remain as a deep shame to Labour Members. However, the point about taking this out of politics has been reinforced by the dreadful happenings reported to have taken place at the Parliamentary Labour Party's meeting last week. My hon. and learned Friend has quoted what the Secretary of State said, and the right hon. Gentleman has not denied the truth of the Press reports in the Daily Telegraph. He said that the object of the Lords:
    "is to wreck the Bill and preferably to wreck the Labour Party as well.
    Those 400 councillors would be dragged one by one through the courts. Many would suffer heavy fines and most would be disqualified.
    We should be forced into a series of by-elections on grounds of our opponents' choosing, and some of the best Labour-controlled local authorities in the country would be decimated in the process. That is what their Lordships want to see."
    I do not believe that this consideration has played any part in the opposition to the Bill. I can say with absolute truth and honesty that in all the thinking I have done on the Bill and in all the discussions I have had with my hon. Friends about it, this consideration has never arisen. It is up to the Secretary of State now to confirm or deny those Press reports. We are faced with a piece of nauseous and craven party pleading. The fact is, as the Secretary of State is only too aware, that the Labour Party conference will be held in a few weeks' time and he has the National Executive Committee breathing down his neck, and apparently he has his hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Jeger) advancing a point of view which I should have thought was utterly distasteful to anyone who cared about the sovereignty of Parliament over that of party.

    I say to the Secretary of State that it is not too late to accept the entirely rational approach which is embodied in the Lords amendment. Without this amendment the Government's approach is wrong and it will not—this was the essence of what the Under-Secretary said—bury the matter.

    The Government have to recognise that the procedure of the rent loss certificate will have to be gone through. The recovery of uncollected rent will have to take place from tenants or ratepayers, and under the Government's Bill this can be spread out for over five years. Therefore, the notion that we can wipe the slate clean instantaneously under the Bill is a complete fallacy. The resentment against the Government's proposals would linger on for at least half another decade.

    Above all, if the Government's approach on this clause is accepted, the rule of law will be lastingly scarred. I appeal therefore to the House to support the Lords amendment.

    I share the view of my hon. Friend the Member for Aylesbury (Mr. Raison) that Clause 1 is the most important clause of the Bill. As we have learnt already this evening, the words "Clay Cross" or "Clause 4" give rise to an extremely emotive matter. However, in practical effect Clause 4 is dead because, as I understand the position, the councillors are already disqualified for other reasons and in any event the Bill does not attempt to remove the surcharge from them. Therefore, the practical effect of Clause 4 is nil.

    The practical effect of Clause 1, on the other hand, is immense. We are faced with a matter of great importance and one which incorporates an important principle. The principle is: should or should not people be required to face the consequences of their acts when they choose deliberately to ignore and not to carry out the law of the land? In moving the Second Reading debate of the Bill in another place, the Lord Privy Seal said that:
    "laws must be obeyed…We are most certainly not condoning this misconduct."—[Official Report, House of Lords, 9th June 1975; Vol. 361, c. 14.]
    That is exactly what the Bill and this clause do—they condone the misconduct of those councillors who may be found, on audit, to have refused deliberately to carry out the law of the land.

    We are, through this Bill, saying to those who so refused to obey the law and did so deliberately "Nevertheless you shall be absolved from the consequences." I believe that not only is this an important constitutional point but it is also an extremely dangerous precedent. It is in no way with disrespect to the hon. Member for Accrington (Mr. Davidson), the Parliamentary Secretary to the Law Officers' Department, that I say that I am surprised that neither the Attorney-General nor the Solicitor-General is on the Treasury Bench when a matter of this kind is being debated.

    All of us have a responsibility to abide by and to accept the law. But surely that responsibility is greatest of all on those who stand for elected office. Those who are part of the democratic procedure and obtain their office through the democratic procedure, above all, have the responsibility to carry out and obey that democratic procedure.

    The hon. and learned Gentleman has got on to a very interesting point. He says that those who have been democratically elected should pay cognisance to the law—in fact, more so than the ordinary citizen. Would he also comment on a situation in which a body of people who have been democratically elected by about 62 per cent. of the electorate—slightly more than those who voted in the referendum—proceed to refuse to acknowledge the law, and then, as a result of the subsequent disqualification, not 62 per cent. but 72 per cent. of the total electorate send in another 10 councillors to do precisely the same?

    8.30 p.m.

    People are free to refuse to acknowledge the law but they must accept the consequences. That is all I am saying, and that is all that the clause says. Indeed, it clearly tempers the amount of surcharge that can be imposed on any of them in order to ensure that the damage done to them personally is not so great as to drive them into bankruptcy.

    Would the hon. and learned Gentleman draw an analogy with the situation of the people in Rhodesia who committed high treason and who nevertheless were met, I think wrongly, by the Prime Minister in the "Tiger" talks—clearly on the supposition, which I think still prevails, that those people will never be prosecuted for the high treason which they committed?

    I refuse to be drawn into arguing about Rhodesia, or about whether free democracy applies in other parts of the world. All I am saying is that where we have a free democratic system, people who obtain office by means of the ballot box and who hold their position as a result of the support of the people, as shown democratically, have the greater responsibility to accept the democratic decisions of the institutions of this country. That means that councillors, like Members of Parliament, have a particular responsibility to obey and accept the decisions of this House.

    I concede to the hon. Member for Bolsover (Mr. Skinner) that everybody is free to fight as hard as he can to get the law changed by democratic methods, but so long as it is the law which has been passed democratically people have a duty to carry it out. If they deliberately choose not to do so, they must be prepared to accept the consequences.

    The fact is that the rule of law in this country is one and indivisible. One cannot pick and choose which laws one will obey and which laws one will disobey. Yet that is the attempt of Clause 1. Whatever the Secretary of State may protest, I have no doubt that were the councillors concerned not of the same party political persuasion as the present Government, we would never have seen legislation of this kind on the statute book.

    What is the Secretary of State going to say to those ratepayers who may choose to refuse to pay any additional rate caused by this Bill, based on the precedent that councillors who should have been surcharged and disqualified have deliberately had the consequences of their misconduct removed? It is an extremely dangerous precedent. It is the worst type of political chicanery. The Labour Government are doing it only because they are trying to help their own Labour councillors. I believe that it is a disgrace to this House that we are seeing legislation of this kind, and I hope very much that we shall vote to agree with the Lords in this amendment.

    On Second Reading I made some very harsh criticisms of my hon. Friends on the Front Bench. I do not retract anything that I said then. I would only add that I have more admiration for them now in their staying power in pursuing this Bill. I do not believe any of them have their hearts in this Bill. I believe they are committed by a party conference decision to do something which in their own hearts they know is completely contrary to the rule of law in this country.

    I shall be supporting this clause. On Second Reading I criticised the surcharge method and also the automatic five years' disqualification. This seems to be in order now. The clause provides that courts will consider each case individually, and it is no good saying that because there will be many people coming before the courts we should automatically exonerate them. On that principle, many of the people queueing up for road traffic offences would also have them wiped out.

    If a person says he will not obey the law, and anybody is entitled to please himself which law he wishes to obey, he should stand by what he has done and take the punishment accordingly. I am surprised that in the amendments consideration is being given to people who, in many cases, deliberately decided to go against the law. It amazes me to hear Ministers saying that we in this House rather than the courts are to decide guilt or otherwise and whether people should be surcharged. If all these people were exonerated, I would be happy—provided it was done by the courts and not by this House.

    I wonder what Government Ministers will say when other people start disobeying the law. The question has already been asked by the hon. and learned Member for Runcorn (Mr. Carlisle) a member of the same profession as myself, and there is a Press report that Clay Cross householders had been warned by the Minister not to start a rate rebellion after they had asked him to exempt them from any penalties if they refused to pay extra rates. Once we start on this vicious circle, there is no end to it. Time after time people will assume that, because we have exonerated certain people, anything they do will be put right by their party.

    The new clause is essential because it restores to the courts the job which is theirs to do—to decide whether a person should be surcharged or disqualified. We have tempered that discretion and every opportunity has been provided in Clause 2 for people to get very fair treatment. I do not see that anyone could complain about the provisions of Clause 2.

    I ask the Government to put back this clause where it belongs, where the rule of law decrees it should be—not to Members of this House, but to the legal profession. The Attorney-General and his associates in the legal offices of this country, whose job is to ensure that the rule of law is carried out, are bringing in legislation making a mockery of it. The disgust I feel at the action being taken in this Bill cannot be explained. In time, every Minister will regret it in the same way as the phrases "pound in your pocket" and "at a stroke" are now regretted. Clay Cross may be forgotten this year but it will be remembered in future years.

    I agree with every word of the hon. Member for Liverpool, Toxteth (Mr. Crawshaw). There is, however, a distinction between the phrases he recalled, to the equal embarrassment of both sides of the House, and what we are discussing now. Those phrases were uttered, without, perhaps, great consideration, in the heat of the moment and without the opportunity to reconsider or withdraw them. That is not the case with this Bill. The Government have had month after month to reconsider the argument and the course they have chosen to take in the Bill. There is no excuse for persisting in this unconstitutional and profoundly damaging course.

    I am sorry that the hon. Member for Bolsover (Mr. Skinner) is not present—

    I am glad to see the hon. Gentleman standing up rather than reclining like a superannuated ball boy at a bad tennis tournament, which he has been doing throughout the debate. I ask him to reflect on this. The only reason he is permitted the liberty which is enjoyed by each of us in the House and in the country is that the laws of this country make no distinction as between people and they are enforced and applied by the courts impartially. Once a precedent is set for the indemnification of people who not by accident but deliberately have flouted their duty under the law, the liberty which permits the hon. Gentleman to continue in his course of conduct has gone, and we on this side will not grieve for him but we shall grieve for the rest of our people.

    The Under-Secretary of State, in his embarrassed defence of the Bill and in his opposition to the Lords amendments, said that the amendments would lead to the bringing of local government into disrepute. I could scarcely believe my ears. It is not local government officials but elected members of local authorities who have brought local governments into disrepute. If it is the Government's intention to maintain local government's hitherto deservedly high reputation for integrity, let them turn their attention to the conduct of elected members.

    It was the conduct of elected members which members of another place particularly had in mind in drafting the amendment. This House, too, should be concerned with the conduct of elected members. It is trifling with words and with the people of this country to pretend that local government does not have a duty to implement and enforce Acts. Once we recognise that there is a discretion to pick and choose, we are leading the way to anarchy and the Secretary of State for the Environment, who I hope will reply to this debate, knows that perfectly well. In view of speeches such as that just made by the hon. Member for Toxteth, who have given a lifetime of service to the right hon. Gentleman's party, I wonder how he can persist in this course of action, which is a matter of the deepest shame to every Englishman.

    I agree entirely that the rule of law should be obeyed and that if anyone disobeys the law he should pay the penalty for it. But let us be practical about this matter. A lot of airy-fairy words have been used about breaking the rule of law, and so on. Let us come down to brass tacks.

    On Second Reading I mentioned certain councillors who I knew had written to the then Minister asking him to intervene in certain matters. They received no reply from him and subsequently were in default. Subsection (4) of the proposed new clause provides:
    "The court shall not make an order…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…".
    There are 400 councillors involved. What are they to do? First, they must get a certificate. Then they have to follow the court procedure. Each councillor must satisfy the court that he acted reasonably. Let us suppose that he loses and judgment is given against him. Then he goes to the Court of Appeal, where judgment may be given against him again. Possibly, a point of law will arise, which the Court of Appeal certifies as such, and on the case goes to the House of Lords, where we have another trial.

    8.45 p.m.

    That is not idle speculation. These are practical problems. Plainly, there might be a protracted procedure lasting for years. What is to happen to the councillors? What is to happen to the by-elections which may or may not take place? What will happen to the position of local government then?

    What the Government did in this Bill—let us not talk about breaking the rule of law—was to say, from a practical point of view, that we have these instances and we shall wipe the slate clean. There will be a certificate from the district auditor, and that will be an end of the matter, subject to the recovery of the money in the different ways set out in the Bill.

    What the Lords amendment does is to accept that approach but then to add to it the long procedure in the courts which may well follow. Surely, hon. Members opposite must recognise that, from a practical point of view, something ought to be done. Indeed, a previous Tory Government did much the same in the Poplar case. Were they accused then of a breach of the rule of law? What nonsense it is to say any such thing.

    My response to the Opposition is to say: "You are right in your argument about the rule of law. You are right to say that it ought not to be disobeyed, and you are right in saying that the penalty ought to be paid. But the Government, any Government, have a right to look at things from a practical point of view", as a Tory Government did in 1927, I think it was, in the Poplar case, saying that this is a proper matter on which the slate should be wiped clean. In my judgment, therefore, the Lords amendment ought to be rejected in this case.

    I shall reply briefly because most of the arguments presented on both sides of the House have by now become very familiar, and it is almost impossible to say anything new at this stage in the debate. Strong language has been used by some hon. Members who have not contributed to our debates hitherto—words such as "shameful" have been flying about—and I shall revert to that later. First, however, I wish to say a word to my hon. Friend the Member for Liverpool, Toxteth (Mr. Crawshaw).

    I have for some time patiently endured from my hon. Friend what I regard as grossly unfair attacks upon me and upon the morality of my Front Bench in this matter. Let me remind my hon. Friend, therefore, when he says that we have supported this clause—not the new clause from the other place but the one that we propose for the Bill—because we were slavishly carrying out party conference decisions, that there has been no party conference decision of any kind on this matter. The only party conference decision referred to the Clay Cross councillors, nor to the 400 councillors who are affected by the clause which we are here discussing.

    Let me remind my hon. Friend also, since the hon. and learned Member for Royal Tunbridge Wells (Mr. Mayhew), in supporting him, said that he had followed my career over many years, that neither he nor anyone else can regard me as one of the most slavish followers of Labour Party conference decisions.

    No, I will not. My hon. Friend had his say about me, and I am having my say about him.

    My right hon. Friend mentioned me by name. I am grateful to him for now giving way. If my right hon. Friend is no slavish follower of party conference decisions—I shall not enter that dispute—will he answer the question which he did not answer on Second Reading? Would he be putting forward this legislation if these were Conservative councillors? If he says that he would not, will that not show it to be a piece of party legislation to help some of our own party? If he says that he would, what answer will that give to those other councils in which councillors in the future will refuse to carry out legislation which he passes?

    I shall answer that question in the course of showing that the case put by the Opposition, which, I regret to say, my hon. Friend has supported, is a case based on total hypocrisy in regard to this decision.

    I have a passionate faith and belief in the rule of law. The hon. and learned Member for Southport (Mr. Percival) treated this debate in a frivolous and contemptuous manner. For what it is worth, if we have any time left for serious argument, I make this point. I believe that the bonds holding modern civilisation are of an extremely fragile character. I have long believed that. I believe it increasingly with every year that I live. The importance of the defences—of which the rule of law is one of the most important—against anarchy and the break-up of our society cannot be exaggerated.

    As I explained on Second Reading, in any civilised or democratic society there are occasions when the principle of the rule of law must be balanced against the principle of clemency. This has been a conflict of two social values which have puzzled successive Governments in every continent and in every century since the time of the ancient Greeks.

    The Opposition have tried to maintain that we are making a concession here in not applying the full rigour of the law, and which they bitterly oppose. That is not the case. The Opposition do not propose to apply the full rigour of the law—and neither does the other place. This amendment displays a constructive approach, although I do not agree with it. The amendment says that the Tory Opposition, as well as the Labour Government, concede that the full rigour of the law is not to apply to the 400 councillors whom we are discussing. Therefore, to maintain that the Opposition are defending the rule of law and that the Government are bitterly attacking it is a No. 1 piece of hypocrisy.

    As to the second piece of hypocrisy, my hon. Friend the Member for Toxteth asked what the Government would do if Tory, not Labour, councillors were involved. The attitude adopted is not a new one. This is not the first occasion when either a Conservative Party or Government have taken such an attitude. I do not criticise the Opposition for the past occasions when they have taken that attitude. We have heard this argument before. Whatever the hon. and learned Gentleman may say, we believe that Neville Chamberlain, in the famous Poplar case, went further in trespassing on the principle of the rule of law than we are in this Bill. It is the Government's view—and, I take it, the view of the Opposition—that he was justified in doing so for the same reasons as we are trying to do this—namely, to use Mr. Chamberlain's phrase, not my phrase, in the interests of wiping the slate clean.

    We heard the example in Glasgow of Mr. Gordon Campbell, formerly Secretary of State for Scotland. There was the example, about which we have argued, of the former Conservative Secretary of State for Wales and the school milk row in Merthyr Tydfil. This is not a unique decision of a Labour Government alone. A decision of this kind has been made before by Tory Governments, whether it concerned Labour or Tory councillors.

    Is the Secretary of State admitting that the Government are trespassing against the law? That is what he said.

    No. Any democratic Government must recognise that there are two possible social values which may be in conflict. One is the rule of law. The other is the need for clemency. Previous Conservative Governments faced with this dilemma have on more than one occasion chosen the principle of clemency and not the principle of the rule of law.

    My right hon. Friend led the opposition against the then Tory Bill. He will remember the long struggle over Clause 95, dealing with the Housing Commission. Does he argue that the then Housing Minister refused to recognise that point of law and, after sitting five and a half months to get the measure on the statute book, refused to send in the Housing Commissioner at the first available moment?

    I shall not argue with my hon. Friend about that, as it has nothing to do with the Lords amendment which I am now discussing. We may have an argument when we come to Clause 4. I look forward to that. My hon. Friend, like some of my other hon. Friends, has frequently been personally offensive, and I look forward to returning his abuse in kind.

    No. I am thoroughly enjoying myself at the moment, but only with Labour interrupters. I do not want any Tory ones.

    With this Lords amendment there is not a basic issue of principle on the rule of law; there is a difference between two ways of dealing with the situation. The Opposition, as well as the Government, concede that some modification of the present rigour of the law is necessary. For reasons explained by my hon. Friend the Under-Secretary of State, we believe that our method is superior, and I hope that we shall reject the amendment.

    I cannot resist going back to one or two aspects of the Under-Secretary of State's speech. He told the House that if the amendment were accepted irreparable damage would be done to the local government service, which is under great stress. He said that local government was in need of the trust and confidence of the public and that to carry the amendment would increase the cynicism felt about local government. All those observations were in support of the amendment. The defeat of the amendment is much more likely to lead to cynicism about local government and much more likely to cause a lack of trust and confidence by the public in local government.

    My hon. and learned Friend the Member for Runcorn (Mr. Carlisle) raised an issue which I had not contemplated before. I may be stating it fractionally too high but, on reflection, I think it is probably right that the duty to obey the law is greater for those who stand for elected office. It must also be that the duty to uphold the law is greater for those who hold elected office, particularly in government.

    The hon. Member for Liverpool, Toxteth (Mr. Crawshaw) repeated the question he has asked many times, both in the Second Reading debate and on other occasions. He asked it of his right hon. Friend—perhaps I may still say—and his right hon. Friend told him that he would give the answer in the course of the debate. We wait and we wait, as we did in the Second Reading debate. What is the answer to the question? What will the Secretary of State say when others break the law and ask for the same treatment? The hon. Member for Toxteth put that question again as he did on Second Reading, and again no answer has come from the Secretary of State.

    Will the hon. and learned Gentleman tell the House whether, when the then Mr. Gordon Campbell made the decision he did about the Glasgow councillors, who incurred unlawful expenditure, or when the Secretary of State for Wales made his decision about Merthyr Tydfil, he supported them?

    I shall certainly not be diverted from my speech. The question put to the Secretary of State time after time is perfectly sensible and capable of a clear answer, which we still await.

    My hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew) spoke again of a Government who may pick and choose who is to be relieved, an action which is putting us on the road to anarchy. The hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) yet again raised the question of Poplar. This is not the occasion to deal with that issue. It cannot be dealt with in a debate lasting just under an hour. The hon. and learned Member was a member of the Committee and he will remember the great learning, the tremendous detail and the interest that was displayed in that and other cases by members of the Committee on both sides. A lengthy explanation was given on that occasion by the Attorney-General, and the hon. and learned Member for Hackney, North and Stoke Newington made constant contributions to that debate.

    The Secretary of State speaks of total hypocrisy. I think he was referring to what he believed to be an interruption by my hon. and learned Friend the Member for Southport (Mr. Percival), who did not say a word. The interruption was from someone else, not from him. I have not noticed any levity. My hon. and learned Friend treated the debate with the seriousness and intelligence it deserves.

    9.0 p.m.

    The Secretary of State says that he is a great believer in the rule of law but that the rule of law must be balanced against clemency. But that is exactly what the amendment does. It is not just to provide clemency as such, but clemency with justice, which was wholly lacking in the Government's original scheme.

    This Bill is no more and no less than a Bill of indemnity—the only one in living memory, according to Lord Hailsham when he went through the precedents which he had obtained from the Lord Chancellor. His statement was never challenged. This is the only Bill of indemnity within living memory with the intention and effect of removing the consequences of law-breaking from persons who have deliberately abused their official position by defying the law unreasonably, knowing what they were doing.

    Unlike any other Bill of indemnity, this one does not protect someone—usually a Minister—who has acted in good faith but in fact mistakenly. Our amendment would not create any privileged class of councillors who were responsible for deliberate defiance of the law but it would provide a degree of relief and make available to them what is not available to them now.

    Under the 1933 Act the amount of surcharge and the disqualification would have followed automatically. The amendment also has the advantage that it would remove from the political arena the responsibility for assessing liability. It would put that responsibility where it belongs—in the courts. The courts are the proper tribunals because then no political element would be involved. The courts have been used for similar purposes—there is, for example, the election court where errors made during an election campaign are put right. The courts took over the old election committees and seem to have done the job very well, probably very much better than Select Committees of this House would have done in the old days.

    I want to express one anxiety about what has gone on in the past few days. If newspaper reports are accurate, the Secretary of State went to a meeting of the Parliamentary Labour Party having indicated in advance that he would be bound by its vote. He appears to have used language very different from the language he used in his speech just now. According to the Press reports, there was a close vote in the PLP, about half the party being there. That apparently is why we are invited to reject the Lords amendments.

    We are invited to do so not because of a Government decision but because this is now a Government decision decided in fact by the votes of their back benchers. If that is so, it is not only democracy gone mad but Government gone mad. It may well be that the Government, ordered to do what they have done by the Labour Party conference, and rescued, as they probably thought they had been, by the other place, have now been ordered yet again, not by the party conference but by the PLP, to restore the Bill as it was.

    This matter should be cleared up. The vote, to which I shall allude on Clause 4, at the meeting solely concerned Clause 4. On the other four matters on which we shall no doubt be voting tonight, there was no difference of opinion of any kind.

    I am grateful to the Secretary of State. If I got the matter wrong, I apologise. My reason for feeling anxious is that it appears that the Government, based upon a decision arrived at in the Parliamentary Labour Party, are deciding to reject amendments from the other place. I wonder what will happen if we continue to be governed by the present Government for very much longer.

    It seems to me that what has been decided by the other place, following very full consideration of the matter, is the correct solution. It is right because it upholds the rule of law, because it produced a degree of clemency, and also because it tempers that clemency with justice. Accordingly, I invite the House to maintain the decision in the other place.

    Question put, That this House doth disagree with the Lords in the said amendment:—

    The House divided: Ayes 271, Noes 261.

    [For Division List 320 see col. 191]

    Question accordingly agreed to.