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Commons Chamber

Volume 129: debated on Wednesday 9 March 1988

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House Of Commons

Wednesday 9 March 1988

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business

British Railways (London) Bill Lords

(By Order)

Order for Third Reading read.

To be read the Third time tomorrow.

Oral Answers To Questions

Trade And Industry

Ec (Internal Market)


To ask the Chancellor of the Duchy of Lancaster what representations he has received regarding preparations for the realisation of the Economic Community internal market in 1992.

The Parliamentary Under-Secretary of State for Corporate Affairs
(Mr. Francis Maude)

Since we announced our awareness campaign we have received an encouragingly large number of representations from all sectors of British business. All have warmly welcomed the high priority that the Government are giving to completing the single market in Europe and the steps that we are taking to make British business aware of the challenge.

Has the Minister not read the comments made by the director general of the Confederation of British Industry, Mr. Banham, to the effect that he thinks that the Government are not taking the negotiations on standards seriously and are not spending enough resources or time on the problem? Surely this requires a rather wider answer than the Minister has given today, or was given to me by the Minister of State on 2 March, when I was told that the interests of the CBI were not necessarily those of the British nation. It is in our interest to be able to respond properly to the new training environment in 1992.

With regard to the hon. Gentleman's specific point about standards, we hold the chair of no less than a quarter of all the standards committees in Brussels. It is important that we should take an active role in setting European standards, and we do that. I assure the hon. Gentleman that that is a very high priority for us, and we are doing a great deal more now than we have done in the past.

I am very glad to hear what my hon. Friend said about the importance of our preparing people and making them aware of what is involved between now and 1992 and the steps that we must take to take advantage of that, but does he agree that it is important that the EC should not distract us in any way by such time-wasting foolishness as trying to introduce a common European car number plate?

I note what my right hon. Friend has said. In asserting progress towards 1992, we must decide on priorities, and the kind of thing to which my right hon. Friend has referred is plainly not a high priority.

Will the Minister assure us that the Government will not permit VAT on newspapers and books?

That is plainly not a matter for me to comment on here and now. It is a matter for my right hon. Friend the Chancellor of the Exchequer in due time. The hon. Gentleman is well aware of the remarks made by my right hon. Friend the Prime Minister about our right to impose our own VAT rates on our own products.

Does my hon. Friend accept that it is good news that the awareness campaign is going well? Is he aware of the fantastic efforts being made by all the chambers of commerce and business organisations in other European countries to get their businesses off the ground and their noses in ahead of us? Does he believe that smaller businesses in this country realise the immense opportunities that will be available for them as well?

No, we do not believe that smaller businesses are fully aware of the opportunities, and that is why we are launching a major awareness campaign. That campaign has not actually started yet, but, because the issue is being discussed far more widely than before, awareness is steadily growing. The opportunities available to competitive British businesses for opening up Europe to the free exchange of goods and services are enormous. However, there is a threat for uncompetitive businesses because opportunities for competitive British businesses are also open to competitive businesses elsewhere.

Information (Sale And Access)


To ask the Chancellor of the Duchy of Lancaster if he will introduce legislation to regulate the sale of or access to information held on magnetic tape by the telecommunications industry.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs
(Mr. John Butcher)

I have no plans to do so. The Director General of Telecommunications would consider representations on this issue in the light of his general duty to consider these where they relate to telecommunications services or apparatus.

Does the Minister realise that those magnetic tapes hold far more information than is available on telephone directories and that British Telecom in particular holds a substantial body of information on each and every one of us? My information is that that may be against the guidelines on the data protection principles. Does he realise that unless he acts now we may face a national scandal in two years' time if fanatics or purveyors of junk mail manage to get hold of that information?

The hon. Gentleman's question raises a number of issues, some of which are a matter for the Director General of Oftel. I hope the hon. Gentleman agrees, because he and I have pursued the matter with the Director General, that he can act vigorously and is a fast-moving regulator.

The other aspect of the hon. Gentleman's question relates to data protection. Clear guidelines and requirements are placed on the holders of data to preserve the interests of data subjects. I shall examine very carefully what the hon. Gentleman has said, but in the first instance I feel that I should refer it to the Data Protection Registrar to see that nothing untoward is at risk.

As I understand it, my hon. Friend the Member for Edinburgh, Central (Mr. Darling) has contacted the Director General of Oftel, who, I understand, feels that he has no power in this regard.

This is a serious matter. British Telecom is not merely selling a telephone directory. What is contained on the magnetic tapes could be used for credit reference agencies, debt collecting and tracing agencies and other agencies wishing to examine the socio-economic groupings of certain individuals. There is much more on the tapes than is contained in the telephone directory, and, if it got into the wrong hands, it could cause distress and concern to many people. If, having looked at the matter, the Minister feels that the Director General can do nothing about the problem, will he consider bringing in legislation to protect these people?

The Government discharged a major part of their duties during the passage of the Telecommunications Act 1984. The hon. Gentleman, who was a member of the Standing Committee, will remember the long debates on whether we should have a statutory body, which might be rigid and might constantly require updating through legislation, or a fast-moving freer body with appropriate powers, like the Director General of Oftel.

When matters have arisen that are legitimately for him, he has moved fast. He has not said that he has no remit to intervene. My understanding of his communication to the hon. Member for Edinburgh, Central (Mr. Darling) is that he accepts that two or three live issues have been raised which deserve consideration. However, I shall not second guess today precisely which body may take action to deal with the complaints that the hon. Gentleman has made.

Company Liquidations


To ask the Chancellor of the Duchy of Lancaster how many company liquidations there were in Derbyshire in the years 1983 to date.

Company liquidations are not analysed by county, but Derbyshire is part of the area administered by the Official Receiver's office in Leicester, which processed an estimated 415 compulsory liquidations in the years 1983 to 1987. During this period compulsory company insolvencies fell by 27 per cent. No regional analysis is available of creditors' voluntary liquidations.

Has there not been a substantial net increase in business activity in the area over the past five years? Has not that increase, which is very welcome, also gone hand in hand with a fall in unemployment, and has that not occurred despite the lack of regional assistance in the county of Derbyshire and the fact that many jobs have been lost in the coal industry, not just over the past few years but over the past 20 or 30 years? What conclusions does my hon. Friend draw from those facts?

I suspect that I draw the same conclusion as my hon. Friend—that industry in Derbyshire is very buoyant—and the fall in unemployment to which he refers is mirrored throughout the country. It is worth pointing out that between 1983 and the last year for which figures are available the number of new company registrations in Derbyshire rose by no less than 81 per cent.

Is it not true that, in Derbyshire, company liquidations from 1983 until the year of the election—when some special measures were introduced by the Government for electoral reasons—were at an all-time record, along with company bankruptcies; that half the north Derbyshire coalfield has been closed; and that, if the Government remain in office, there will be not 4 million people unemployed, as was the case a couple of years ago, but top side of 5 million? Derbyshire will suffer, and the hon. Member for Amber Valley (Mr. Oppenheim) will be part and parcel of it.

Telecommunications Supervision


To ask the Chancellor of the Duchy of Lancaster what discussions he has had with the Director General of Oftel on the implications for the system of telecommunications supervision of British Telecom's decision to ban its Talkabout telephone service.

Since British Telecom's decision to suspend Talkabout no further discussions have taken place, although the Director General of Telecommunications has kept my hon. and noble Friend in touch with developments. The matters involved are for the Director General who has demonstrated that he can and does act effectively.

I am grateful to my hon. Friend for that answer. Does he agree that that shows the effect that Oftel can have? The decision temporarily to ban Talkabout is welcome, and one hopes that Talkabout will never be reproduced.

It has demonstrated just that. A growing number of people now recognise the value of Oftel and the conspicuous and important role played by its current director general, who I think now has the respect of most sections of the telecommunications community, including Members of the House.

It is clear that my presence has been noted, Mr. Speaker.

May I be one of the first to add my support to the Director General of Oftel, particularly for his role in banning Talkabout? However, I warn the Minister against complacency. I do that specifically because of the chat lines which exist over the telephone. Such lines are still in operation today under licence from the Department of Trade and Industry. The Director General of Oftel has referred those lines in the same way as he referred British Telecom's Talkabout. I expect the Minister and the DTI to exert all the influence possible in this matter in order to ban those private chat lines as well.

The hon. Gentleman's presence on this whole issue has been significant and I congratulate him on the way in which he has pursued his campaign.

The question is whether the chat line services that are not sponsored by BT should equally be held up to examination. This is an important issue. It is open to the Director General, if he so wishes, to seek modifications to the licences of the public telecommunications operators, including BT, or—this goes some way towards meeting the point of the hon. Member for Worsley (Mr. Lewis)—he can seek changes to the class licences under which many of those services are provided.

When my hon. Friend next meets the Director General of Oftel will he discuss with him Sunday Sport magazine, which portrays itself as Britain's fastest growing family newspaper? It is full of hundreds of advertisements for telephone lines giving pornographic messages, which bring discredit on the telephone service.

Under section 43 of the Telecommunications Act 1984 we have already made it a criminal offence to send messages which are grossly offensive, indecent, obscene or menacing. I assume that under that section and under other aspects of the law my hon. Friend's point could be examined. I take seriously what has been said and I will see that my hon. Friend's message finds the appropriate home.

Rover Group


To ask the Chancellor of the Duchy of Lancaster when he next plans to meet the chief executive of Rover Group to discuss the company's future.

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry
(Mr. Kenneth Clarke)

At the moment I have nothing to add to my statement to the House on 1 March.

Will the Minister tell the House what assurances the Government are seeking on future model developments in the British Aerospace talks? I am referring particularly to the update of the Rover 800 by 1992, the future of the R9, the Montego replacement, and other models. What would the Government do to make such assurances stick? For example, would they deploy their golden share in British Aerospace to safeguard the long-term position of vehicle production in the interests of balance of payments and employment in the industry?

Future model development is a matter for the management of the company. It is a commercial rather than a political decision. British Aerospace has told us that it is interested in continuing the development of the Rover Group, and obviously it is seeking to acquire it as a going concern. If the negotiations result in a merger between the two companies, the new management will have to address itself to the question of model development in order to protect its role in the market in future. We would not use the British Aerospace golden share in any way, because it would not apply to new acquisitions. In the course of the negotiations we are considering what view, if any, we will take about the Rover shares when we sell them.

Will my right hon. and learned Friend, in discussions with the chairman of the Rover Group, ensure that any conditions relating to the deal with British Aerospace for the period prior to any final agreement will not exclude any offer that may be superior in terms of security to the work force or return to the taxpayer and that, in the period after such an agreement, they will not exclude future participation or joint venture by other motor companies?

As I explained to my hon. Friend when I made my statement, we agreed that at present the negotiations between British Aerospace and the Rover Group should proceed on an exclusive basis. We shall have to await the outcome of those negotiations, but, if they were to be successful, and if we were considering a final offer, we would have to consider what other offers have been forthcoming from other interested companies.

Having read about all the buying and selling that is going on between the Rover Group and British Aerospace, I should like to underline to the Minister the fact that the livelihoods and jobs of thousands of workers are involved. Does the Minister accept that there should be full consultation with the trade unions, and will he bear in mind the livelihoods of those thousands of workers, irrespective of who owns the undertaking?

There is no pie in the sky involved. These are all serious negotiations. The hon. Gentleman is right that the negotiations concern important businesses and that the well-being of thousands of people depends on British Aerospace and the Rover Group continuing to be a commercial success. We believe that the Rover Group will be best placed in the private sector. The present negotiations are worth encouraging and we are awaiting the outcome of them. In the end, we shall make our decision about the holding in the Rover Group based on our best judgment of the interests of the taxpayer, the company and the work force.

When my right hon. and learned Friend meets the chief executive of the Rover Group, will he discuss the amount of capital that is needed to update the Land Rover and Range Rover line, the van lines and the various new model developments? Will those costs be reflected in the price that is charged for the Rover Group to whoever may be buying it?

Anybody contemplating purchasing a company of this size must address himself to exactly the kind of issues to which my hon. Friend refers. In deciding on the final price, and when we judge any offer that may be made, we must take an overall view of the value of the company to the taxpayer and the balance sheet that the new company will require. We shall bear in mind all the relevant considerations, including the ones that my hon. Friend has given.

My understanding is that there is a prospect of development on the Bathgate site, and I trust that there will be some new development on that derelict site. It is now a matter for planning law in Scotland; it is not the responsibility of myself or of my hon. Friends at the DTI.

Is it not important that the Government should now stand completely aside until negotiations between the two companies are concluded? Should not both companies be seeking to convince City investment institutions of the merits of their case, without the Government being involved?

At present, the two companies are negotiating. Obviously, as the owner of 99·8 per cent. of the shares, we shall be closely involved. If the negotiations are successful a bid will be forthcoming for our shares, which we shall judge.

There is only one other way in which we are involved. My right hon. and noble Friend the Secretary of State is in Japan, or is about to land there, and no doubt he will repeat what we have been saying about our wish for Honda to continue to be involved in co-operation with the Rover Group, which has been welcomed by Honda and the Rover Group so far.

If the Minister has thought about the Rover Group and its future in any sense other than how quickly he can wash his hands of it, and if he has thought about British Aerospace—the proposed partner in this illogical and silly union—will he say what effect the rising pound, which is now up 14 per cent. in real terms compared with the end of 1986, will have on the business of both those groups? Does he agree with the Prime Minister and The Sun newspaper that the rising pound is good for Britain? Is it good for Britain's manufacturing industry?

I do not know whether the hon. Gentleman's only interest is to try to ensure that the Rover Group remains nationalised for as long as possible, or whether he is contemplating the renationalisation of British Aerospace. Such matters are best determined by making the best judgment of the commercial future of the companies in the private sector, and that benefits the work force as well. The rising pound certainly damages some industries and helps others, but the rising pound is a sign of the strength of the British economy. More stability in exchange rates is desirable, and my right hon. Friend the Chancellor of the Exchequer obviously welcomes the extent to which a strong pound keeps down inflationary pressures in Britain.

Link Programme Collaboration


To ask the Chancellor of the Duchy of Lancaster how much the Government expect to spend on Link collaborations over the next five years.

The Government expect to contribute about £210 million to Link over the next five years, provided industry matches Government funding.

Do not both partners benefit from such arrangements — the researchers, who see their projects come to fruition, and industry, which benefits from the research of universities and colleges? If that is the case, why are some universities and colleges not taking advantage of such opportunities, or not taking advantage of them in such a big way? What does my hon. Friend intend to do to encourage them?

We should like to see far more use of the research base currently inside our higher education institutions. If one compares our experience with that of the United States, one finds that we have an under-utilised national asset. If the Link programme can help to build more bridges between industrial and commercial research-based companies and the higher education sector, we would welcome it. To a certain extent the programmes are demand-led and on their merits. Five have come forward which are worthy of support. If some universities are not tuned into this yet, it is their own fault. The resource is there. It is demand-led and it is up to them to bid for it.

Does this not represent a restriction on the way that already committed money is to be spent? It is in no sense an addition to research and development spending in Britain. Will the Minister acknowledge that a large number of industrial research directors are already warning that the attrition of the science base is threatening the viability of Britain as a base for applied industrial research? Finally, does he agree that the real need is for a proper incentive to industry to increase its support for research and development?

The DTI's role is to encourage partnerships between the public and the private sector and to see that the critical mass of research is enhanced and applied with relevance to the market at large. The hon. Gentleman has been an observer, commentator and practitioner in this area for a long time and I should have thought that he would welcome the fact that our budget for the totality of research, development and innovation effort is now running at about £500 million. That represents a major shift over the past five or six years, and we are beginning to see the benefit of it. Perhaps I may write to the hon. Gentleman about the industrial research directors' point. As he knows, there has been a complex build-up to this in terms of how it will apply. We are now through that and some of the sources of confusion and alleged over-complexity may now have been eliminated.

Does my hon. Friend agree that the investment of private industry in projects such as Link is a vital ingredient to their success? Is it not the case that unless one ensures that, for example, pharmaceutical companies, such as those involved in the eukaryotic project, find that research is encouraged by the repeal of the full licences of right, they may feel that it is not in their interests to proceed with such research?

I admire my hon. Friend's ingenuity in bringing the licence of right issue into this question. As he knows, we shall be addressing this matter at great length in Committee on the Bill that will come before the House after Easter. There is a eukaryotic genetic engineering programme within the five programmes that have been approved, and I hope that the pharmaceutical industry in particular will derive great benefit from that.

Inner Cities


To ask the Chancellor of the Duchy of Lancaster if he will make it his policy to ensure that the inner cities are given priority in departmental decentralisation plans.

Yes, Sir. The Government's policy is that Civil Service work should be located where there is best value for money and best service to the public. However, when such locations are in areas which are the focus of the Government's urban and regional policies, they will be considered particularly seriously.

While it is widely recognised that civil servants will do everything possible to resist moving out of cushy London, will my right hon. and learned Friend assure the House that the decentralisation plans will move forward apace? As he and his right hon. and noble Friend, the Secretary of State for Trade and Industry, are making it clear that the private sector must play a major part in this rejuvenation, surely we must also play our part by moving as much as possible of the Department to inner cities in the regions?

I do not think that the reluctance of civil servants is quite as bad as my hon. Friend says it is. One way or another, about 5,500 jobs have been transferred out of London since the Government came to power in 1979. The DTI recently announced the transfer of most of the Patent Office to Newport and part of the insolvency service to Birmingham. I am carrying out a review to look for further candidates for cost saving, while maintaining the quality of service in my Department.

May we assume from the Minister's reply that Bradford will be carefully considered for the relocation of any Government Departments? Can the Minister say in specific terms what benefits will flow to Bradford from the city action team being located in Leeds?

As I said in my previous answer, whenever we look for alternative locations for Government offices we pay particular attention to places that are the target of the Government's urban and regional policies. I think that great benefits will flow to Bradford from the work of the city action team. Its headquarters are in neighbouring Leeds, but its activities are particularly directed to the urban problems of Leeds and Bradford. It has all the resources and competence to tackle the problems of both.

The Government will be successful with their macro-economic policy of inner-city regeneration, but will my right hon. and learned Friend say something about the neighbourhood regeneration, on which he has been concentrating? Surely the success of the strategy lies in encouraging local people to be involved in the regeneration of their neighbourhoods and streets.

Civil servants have been posted to task force offices in 16 deprived neighbourhoods up and down the country. That approach has been particularly successful, not least because it has enabled those civil servants to get into close contact with local residents, and because it has targeted the Government's national programmes and additional money on projects where they are most needed in those districts.

I am intrigued by the decentralised free breakfasts that the Minister will be offering as part of his inner-city initiative. How many breakfasts will there be, which Ministers will be involved, and how much will the free breakfasts cost the taxpayer? If the right hon. and learned Gentleman is looking around for a menu, in view of the damage that the Government's policies have done to the inner cities, may I suggest thin gruel, hard cheese, and poached bullshit?

Order. That is a very unparliamentary word. Will the hon. Gentleman withdraw it and use another?

Breakfast is my least favourite meal; normally I do not eat it. The only reason why we are having these meetings at breakfast time is that that is the one time when all the leading citizens of a city tend to have their diaries clear, until they receive our invitation. We found that with "Action For Jobs" presentations—one gets a much better attendance if one turns up at breakfast time.

I can tell the hon. Gentleman that the menu is quite immaterial and entirely undistinguished on these occasions. What matters is the serious discussion that takes place, which I hope will lead in this case to follow-up action after the breakfasts bringing together leading industrial citizens of each city to help to steer the private sector contribution towards the Government's and the country's efforts.

Business Regulation


To ask the Chancellor of the Duchy of Lancaster what further plans he has to lift the burden of regulation on business.

Active efforts to reduce the burden of regulation on business continue in all areas of the Government's work. A White Paper on deregulation in the summer will give further details of our strategy and programme of action.

I thank my hon. Friend for his reply and congratulate the Government on their deregulation policies to date. There is a great deal more to be done, and we look forward to the White Paper. However, will my hon. Friend carefully examine the possibility of abolishing the statutory audit for small businesses?

We are certainly looking at that matter. A good deal of concern has been expressed to the effect that the statutory audit has placed an excessive burden on small businesses. I am grateful for my hon. Friend's remarks about the deregulatory programme. It is important. None of it is dramatic in itself, but the cumulative effect of lifting small burdens from business is dramatic.

Will the Minister assure the House that the Government will in no way attempt to diminish standards of health and safety at work? As he knows, each year more days are lost through industrial injury than through strike action. It would be a savage attack on workers if there were any attempt in any businesses to lower the standard of health and safety at work.

Will the hon. Gentleman tell us about the curious situation whereby business organisations claim to want the Government off their backs, but invite retired civil servants on to their boards?

The latter phenomenon demonstrates that public servants have a great deal to offer industry. One of the things that we are trying to develop is a greater flow of personnel to and from the public sector. It would be helpful for business if more people from the private sector were to be seconded into the public sector, and vice versa. The public and private sectors have a great deal to learn from each other.

We continue to attach high priority to health and safety at work. There are advances to be made by simplifying the burden of regulations so that users find it easier to comply with them.

Will my hon. Friend take encouragment from the deregulation programme so far? Does he accept that real obstacles and burdens make it difficult for firms to expand and grow, and that it is important to cut red tape? Will he consider placing before Parliament an annual report on progress made in all Government Departments, so that Parliament can see how far the deregulation programme has gone?

I am grateful for my hon. Friend's remarks. The White Paper that we propose to publish in the summer will effectively amount to that. Since the deregulation initiative started three or so years ago we have published two formal White Papers and a further paper. These papers outlined the progress that has been made right across the board. We shall continue to do that.



To ask the Chancellor of the Duchy of Lancaster if he will make a statement on progress made in discussions of the European Commission's proposals entitled "Shipbuilding—Industrial, Social and Regional Aspects".

Our discussions in the relevant European Council of Ministers on regional measures within the programme known as RENAVAL are well advanced. I have stressed to the Council how important I believe it to be that we should make rapid progress. The Commission's proposals on other aspects of its programme have yet to come to Council. The Commission seeks to assure me that work within the Commission is well in hand.

Although help to enable new businesses to go to shipbuilding areas is to be welcomed, will the Minister assure us that it will in no way be a sop to allow a further rundown in British shipbuilding? May we be assured that the money will not be a substitute for the financial support that the industry needs if it is to survive and play an essential role in Britain's industrial future?

I am anxious to get support from the Community for shipbuilding areas as quickly as possible. Obviously, we need the encouragement of other businesses in such areas. Looking back, no one can doubt the extent of the Government's financial commitment to British Shipbuilders. At the moment, its external financing limit is £180 million, which is about £20,000 for each employee working in the yards. As I told the House when I announced that figure last year, it is a heavy figure, and the outlook for British Shipbuilders is still difficult.

Will the discussions include the inducements offered by many European companies to attract custom and orders away from British shipbuilding and repair yards?

We have agreed on a European sixth directive, which is meant to impose limits on the extent to which any Government within the European Community can give inducements to win orders. It is the British Government's view that the sixth directive should be adhered to, to stop pointless and wasteful competition, with taxpayers in each country pouring money into loss-making orders.

Will the Minister take this opportunity to repudiate the report that appeared in The Guardian a few days ago to the effect that the Government are contemplating removing all help to British shipbuilding? That would mean reneging on the sixth directive. It would also cause utter devastation in shipbuilding areas such as the one that I represent.

Obviously, I have to keep in close touch with the trading position of British Shipbuilders because of the very large sums of money that are involved, as I explained to the hon. Member for Gateshead, East (Ms. Quin). We have taken no new decisions about the future of British Shipbuilders, but the position of the business has to be kept under review while it is in such a difficult state.

Will my right hon. and learned Friend confirm, first, that the worldwide shipbuilding industry is in a state of extreme recesssion? Secondly, while I welcome his answer to an earlier supplementary question, will the Government strive to make certian that all the EEC countries conform to that directive once it has been signed and agreed and that there are no hidden subsidies from our EEC partners?

The shipbuilding industry throughout the world is in a pretty parlous state, with major lay-offs and closures taking place in Japan and in Western Europe. Although there is some prospect of the market improving, there is a general lack of orders to match the present world capacity of shipbuilding. I agree with my hon. Friend that we must stop unfair competition breaking out within Western Europe. We seek to adhere to the sixth directive and the Commission seeks to endorse it. The last complaint received was against ourselves and the French.

Financial Advice Services


To ask the Chancellor of the Duchy of Lancaster what is his policy towards providing advice services for the growing number of people with financial and debt problems; how he intends to finance such services in the future; and if he will make a statement.

A great deal of advice and help on debt problems is already provided free of charge by citizens advice bureaux. The National and Scottish Associations of Citizens Advice Bureaux are funded by my Department to the extent of £8·9 million in the current financial year. They have been encouraged to seek additional funding for money advice services from the finance industry, and two money advice support projects, one in the south-east and one in the north-west, are already under way as a result of private sector funding. I understand that agreement has also been reached on two more major schemes, which will be announced soon. I believe that this will be widely welcomed.

Does the Minister appreciate that there are vast increases in the numbers of people experiencing debt problems, and that there is an increase in the complexity of those debt problems? Does he accept that a large number of Government decisions, particularly the recent social security decisions and the way in which the Government are implementing them are placing increasing pressure on people and increasing the likelihood of their getting further into debt, particularly those on the lowest incomes? Does he accept that the finance that he provides is to associations that give national back-up, and not direct to the services? The Minister should accept responsibility for providing proper funding for advice services in view of the way in which the problem is likely to accelerate under present Government policy.

The funding of local citizens advice bureaux has always been a matter for local authorities. They know about local needs and it is for them to decide how to allocate money within their budgets.

As for debt increasing, of course there are people who get into trouble with debt, but there are far more people whose problems have been alleviated by having access to credit. The fact remains that the principal protection against getting into debt is for people to think carefully before doing so, and to look around carefully for the best terms. There are widely differing ranges of interest rates available, and if people were to look around more carefully the problem of getting into debt would be reduced.

Is the Minister satisfied that the Government are doing enough to control extortionate credit demands?

The courts have the right to re-open a credit bargain if the case is made to them that the terms on which the bargain was made are extortionate. That power lies with the courts, and we are looking to see whether it could be extended to give the courts the right to re-open a bargain on their own motion without a plea being made by the plaintiff. We have yet to see whether that is practicable. I believe that the Government are doing enough. Our system of consumer credit regulation is based on making the maximum information that is sensible available to the potential debtors so that they can work out whether the commitments into which they are entering are within their capabilities. That is the best protection we can provide.

Does the Minister accept the view of the citizens advice bureaux and of every reputable consumer organisation that there is an element in the loans market that behaves in a totally unacceptable way and peddles its loans to those who are desperate or ignorant? Does he also accept that many people are simply unaware of the powers of the courts to set aside high levels of interest demanded by some of these loans sharks? Why will he not take on board the representations of those bodies and introduce tough new legislation to protect the consumers and the public interest?

I have announced today some improvements to the advertisement regulations to make more, clearer and simpler information available to people seeking credit. As for making further advice available, I believe that it is helpful for advice bureaux to seek funding from the finance industry. There is much to be said for the finance industry making that money available, because if more people are helped to pay off their debts, obviously that is in the commercial interests of the industry.

Action For Cities Campaign


To ask the Chancellor of the Duchy of Lancaster what response there has been from the private sector to the Government's action for cities campaign.

The Government have been working very closely with many private companies and private sector and voluntary organisations for many years. There has been an encouraging response from the private sector to the action for cities campaign launched on 7 March. Business organisations, including the CBI, Business in the Community, the Industrial Society and Investors in Industry as well as individual companies and business leaders have reaffirmed their commitment to work with the Government to make inner cities prosperous. With ministerial colleagues I will be taking our proposals further with business leaders in a series of regional meetings, starting on 13 April in Newcastle upon Tyne.

To get the wheels of commerce turning, will my right hon. and learned Friend ensure that firms that are willing to invest in those areas, in the way that he has just described, have access to information about the extent and ownership of derelict land? If it is found that public bodies or Government Departments own any derelict land, will he ensure that it is auctioned off at an early date?

It is certainly true that we still have far too much derelict land in our inner-city areas which, on examination, turns out to be in the ownership of some public body or other. It is for that reason that we started the register of land and, as I announced a few days ago, my right hon. Friend the Secretary of State for the Environment is taking steps to make sure that more public use is made of the information contained in the register and to ensure that the land is shaken out into development.

Does the Minister recognise that it was the private sector and private entrepreneurs in the past that failed, especially in the north-west and in other manufacturing areas? People are not fools, and they will not fall for glossy packaging and the Prime Minister's own brand of clap-trap, because they know full well that that will not provide jobs, homes or the medical needs of the inner-city areas.

The industrial prosperity of Manchester was based on the success of its entrepreneurs, industrial leaders and private sector industry. It is true that Manchester's economy has undergone considerable change and that it has gone through great difficulty in the upheavals of recent years, but, in my opinion, Manchester is now coming back strongly. It must be in the interests of the people of Manchester to attract leaders of industry, investors in new business and private sector activity back into the city. I hope that the hon. Gentleman will not react in the same way as his city council does from time to time, by being positively hostile to private sector investment in that city.

While the Government's initiatives on the inner cities are welcome, will my right hon. and learned Friend bear in mind that certain local authorities obstruct the private sector through their use of planning powers? Will he take to himself powers to ensure that that obstructionism does not succeed?

I agree with my hon. Friend. We are often pressed on the contribution that local government should make. Indeed, it needs to make a contribution, and the best contribution that it could make would be to be business friendly and to seek to attract to the cities the private sector investment that is needed by the residents if they are to have the hope of new jobs. I deplore any obstruction—through the planning process or in any other way—on the part of just a few councils to the idea of fresh private investment corning to their areas.

Is the Minister aware that after the hype of the launch on the inner-city initiatives and all the gloss that went out, two sobering statements were made, by the Confederation of British Industry and by the Association of British Chambers of Commerce? The CBI stated:

"Firms will have to be able to justify their contribution to shareholders."
It was stated of the Association of British Chambers of Commerce, which represents 65,000 companies:
"The association was scathing about the lack of recognition of the chamber's key role in a range of business and social issues."
The Minister is asking local authorities to be business friendly but, quite honestly, when one considers the declaration of UDC status such as took place in Sheffield, when even the chamber of commerce was not invited to the launch, which it had to gatecrash, that type of co-operation does not appear to have been taken on board by the Government.

I do not know what the opposite of hype is, but the Labour party has certainly been guilty of it in recent years with regard to just about every new idea for inner cities that has come forward.

They whinge.

I agree with my hon. Friend that the Opposition whinge about absolutely every measure that anyone proposes and they take the general view that it is all a waste of time.

Our major aim over the summer is to try to attract private companies to take part in inner-city activity. I agree that we have to get the message across to those companies that it is in their commercial interest to do so. It is sensible, commercial practice for a large company that wants, at the same time, to be a responsible corporate citizen, to take part in such activity. That is the American experience, and we and the CBI agree. That is the message that we shall be giving.

I am sorry if we did not acknowledge the valuable work of many chambers of commerce. I have worked extremely closely with chambers of commerce and their members in many parts of the country, and they have been actively involved in our work.

I must remind the hon. Gentleman that the announcement of an urban development corporation for the Don Valley is one of the best bits of news that Sheffield has had in recent years. It will bring that derelict land back into use because the decision-making processes of UDCs have proved, in practice, to be extremely quick and effective. There is, of course, a substantial commitment of Government money behind the UDCs.

Will my right hon. and learned Friend take this opportunity to praise the work of the private sector, especially in Nottingham, and in particular the work of David White and his colleagues on the Nottingham development enterprise hoard? That board has done much to ensure that the private sector responds to the need to renew those areas of Nottingham that require such renewal.

I agree with my hon. Friend. David White chairs the Nottingham development enterprise board. He has got together a group of the leading business men of the city, who are financing their own secretariat, commissioning reports, as well as setting out a policy on how different parts of the city will be revived. They have the active co-operation of the Conservative-controlled city council and the Labour-controlled county council. I am glad to say that the completely negative attitude of the Opposition Front Bench has made no impact in the inner-city area of Nottingham.

Inner Cities


To ask the Chancellor of the Duchy of Lancaster what representations he has received on the future of inner-city policy.

I have the benefit of a great deal of advice, solicited and unsolicited, on inner-city issues, some of which is reflected in the document "Action for Cities", published on 7 March, which has been very well received.

In view of the praise that has been heaped on Glasgow in recent months by the Minister, the Secretary of State for Trade and Industry and the Prime Minister regarding the GEAR project and inner-city improvement, will the Chancellor take the opportunity to pay due credit to my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), who instituted the scheme for GEAR when he was Secretary of State, the Labour-controlled Glasgow district council and the Labour-controlled Strathclyde region? Is not the lesson of Glasgow and the improvements that have been carried out there that the Government should give the resources and the powers to locally elected Labour-controlled authorities to get on with the job?

I agree with most of what the hon. Gentleman has said. I gladly pay tribute to his right hon. Friend and to the local authorities. I trust that he will also pay tribute to the Government, the Scottish Development Agency, my right hon. and noble Friend for his major contribution, and to the private sector. The private sector has been the vehicle by which most of the investment has gone into GEAR. If we can maintain the sort of policy that has, in recent years, flourished in Glasgow we will make progress. I only wish that the hon. Gentleman would have words with some of his hon. Friends in cities such as Manchester and elsewhere who do not appear to have picked up the basic message of co-operation.

Does my right hon. and learned Friend's inner-city initiative include the ability to help finance the start-up costs of business incubators or business technology centres, which will help small businesses to establish themselves?

It certainly does. The Government have a multiplicity of ways in which they can support business start-up premises, managed workshops and technology centres of the type described by my hon. Friend. Various Departments of state have their different agencies and funds and any projects that come forward will be looked at eagerly by all my right hon. and hon. Friends.

How does the Minister expect local authorities to be business friendly in the inner cities, and how does he expect them to finance debt services, when, after the introduction of the poll tax, central Government will control 75 per cent. of what was peviously local authority funding? Is it not time that the Minister became local authority friendly?

But central Government and private business between them have always paid for the majority of local government expenditure. That is true under the present system and it will be true under the new system. Domestic rates and the community charge provide only for the minority of local government expenditure in any event.

As my right hon. and learned Friend is aware, the serious problems affecting our inner cities also affect the centres of many smaller towns. Will he assure the House that the initiatives announced in the Government's "Action for Cities" campaign will apply to those smaller communities?

The urban programme and urban priority areas can cover a wide range of communities. I agree with my hon. Friend that many of the problems affecting inner cities—lack of economic activity, high unemployment and so on—are found in other parts of the country as well. I hope that in England all those in urban priority areas are benefiting from our proposals, and I trust that my hon. Friend will find that my right hon. Friend the Secretary of State for Wales tackles the problems in his constituency vigorously.

The Prime Minister has told us that there is not a single new policy for the inner cities, and the Minister has been unable to tell us whether any substantial new resources will go into the inner cities, at least to compensate for the massive reductions in rate support grant. Why does the right hon. and learned Gentleman expect the same package of measures with virtually the same resources to succeed in the future when it has failed in the past?

The hon. Gentleman is not the first to pick up a phrase used by my right hon. Friend the Prime Minister and use it somewhat incorrectly. As he knows, there were no fewer than 12 new announcements at the conference that we held on Monday. Although all the money came from the existing PESC provision, £250 million or thereabouts was directed to new policies in the inner cities to which it had not been directed before. The hon. Gentleman's wholly false analogy with arguments with local government over rate support grant represents another failed attempt to denigrate a very substantial policy.

Steel Industry


To ask the Chancellor of the Duchy of Lancaster what was (a) the number of employees in and (b) the output of the steel industry (i) when last nationalised and (ii) for the latest year for which figures are available.

The British Steel Corporation employed 251,000 people in 1968. At the end of 1987 it employed 51,500 people. Its liquid steel output in the first full year after nationalisation was 23·6 million tonnes. In 1986–87 its output was 11·3 million tonnes, although it will be higher this year. The reductions in part reflect the privatisation of certain BSC activities in recent years.

I thank my hon. Friend for that reply. Now that quota arrangements in the EEC have failed to bring down output in certain countries that agreed to bring their output down, and now that our productivity in the steel industry is so good, is it not time that we pressed for quotas to be abolished and allowed a privatised steel industry to go in and clean up the market in Europe?

I am grateful to my hon. Friend, who will know that my right hon. and learned Friend the Chancellor of the Duchy of Lancaster has been leading the way in doing just what he asks in Europe, and we shall endeavour to keep up that campaign.

Has the Minister considered the fact that, had the industry not been taken into public ownership—with all the investment that stemmed from it—it is unlikely that we would have a steel industry left today?

Let me make it clear that most of the money that the Government have put in over the years has been to support uneconomic operations and maintain capacity that the market did not need. It is not, I emphasise, a debt; it is an accumulated deficit and it has gone for good.

Would my hon. Friend care to note that the excellent figures that he announced include those for Teesside steelworks, which has shown the best improvement in productivity of all and has become the most competitive steelworks in the country? The improvement would have been even greater if the Cleveland county council rate had not increased by 30p this year to cover the cost of an additional 2,000 employees engaged by Cleveland county council in the past two years, none of whom produces anything.

My hon. Friend makes his point in his usual cogent way. I would point out that productivity has increased from 13·2 man-hours to 6·2 man-hours since 1979–80. That is an indication of the vast improvement in productivity in British Steel in recent years.

Does the Minister agree that those figures represent a profound disturbance in the lives of tens of thousands of steelworkers and that we lack any authoritative survey of the social costs of the changes? Will he agree to consider initiating a scientific, objective study of the effects of those changes? A few people's lives were transformed for the better, but there have been enormous changes, including an increase in mental and physical ill-health and other problems among steelworkers' families. Will the Minister tell us that the social factors will be examined and included in the equation?

The hon. Gentleman makes a fair point about the numbers of people who have left the steel industry as a result of the slimming down of the industry, improvements in productivity and a variety of other factors. I pay tribute to those within the work force, led by the trade unions, who negotiated and understood that productivity agreements and the slimming down that took place were necessary. Health and worries about unemployment are not matters for me.

European Regional Development Fund


To ask the Chancellor of the Duchy of Lancaster what is the value of grants allocated to England from the European regional development fund since its inception.

Is my hon. Friend satisfied that the size and extent of the grants, which are impressive, have been sufficiently well publicised? If not, what does he intend to do?

I am satisfied that publicity arrangements for ERDF grants are satisfactory. As my hon. Friend will know, the grants are announced in batches at various times throughout the year by the Commission through press notices. At the same time, interested Government Departments issue press notices, and where appropriate local notices are issued as well. There is always room for improvement, and I am grateful to my hon. Friend for the opportunity that he has given me to re-emphasise the importance that we attach to the grants.

Local Authorities (Rating And Capital Expenditure)

3.31 pm

With permission, Mr. Speaker, I should like to make a statement about three issues which will require amendments to be introduced to the Local Government Finance Bill. Two relate to recent court decisions affecting rating, and one relates to the control of local authority capital expenditure in England and Wales.

First, it is central to the rating system that the value of a hereditament should reflect the physical condition of the property and the "state of the locality" at any particular time. But the basis for the valuation should be the property market conditions as they were at the date of the last revaluation.

For many years now the view has been that the expression "state of the locality" related to its physical state and its amenities, and that in order to make a case for a change in rateable value appellants had to show that there had been physical changes to the property or its locality.

This view was recently tested in the case of Addis v. Clement, which turned on whether a factory on the borders of the Lower Swansea Valley enterprise zone could rely on the introduction of the EZ to seek a reduction in rateable value. The Court of Appeal upheld the traditional view by holding that the establishment of an EZ was not a change affecting the state of the locality. The House of Lords, however, took the opposite view.

Following that judgment, it appears that ratepayers may obtain changes in rateable value to reflect changes in market conditions since 1973. Many thousands of new proposals may result. In my view, changes in economic circumstances should be taken into account at the general revaluation in 1990.

I therefore propose to bring forward amendments to the Local Government Finance Bill so that, with effect from midnight tonight, proposals to amend current rateable values will be determined according to the law as it was understood to be prior to the decision in the Addis case. This means that changes will be taken into account only in so far as they relate to the physical state of the hereditament and its locality. Changes in economic factors will be taken into account in the 1990 and subsequent revaluations.

Proposals already made will be decided, where relevant, in the light of the law as decided by the House of Lords in the Addis case.

The second issue affects the rating of water hereditaments. Most such hereditaments are currently rated by statutory formula. Others, particularly sewage treatment works, have, however, always been treated as excluded from the formula and rated conventionally. The Court of Appeal has now held, in the case of Severn Trent Water Authority v. Cakebread, that the Water Act 1973 changed the statutory definition of a water hereditament so that those hereditaments previously excluded from the formula are covered by it, even though the formula did not make allowance for that.

This decision would give a continuing windfall benefit to water authorities. We have therefore decided to restore the law to the position previously accepted for many years, also with effect from midnight tonight.

These two decisions will affect the revenue of the local authorities concerned. Rateable values are of course constantly changing as a result of the appeals process and net additions to the rateable stock. Ordinarily, and by agreement with the local authority associations, rateable values, once set for a year, are not changed for rate support grant purposes, for that year or earlier ones. Exceptionally there is provision in section 67 of the Local Government, Planning and Land Act 1980 for authorities to be compensated if they suffer a reduction of more than a prescribed proportion of their rateable value in any year. This proportion is presently set at 2·5 per cent. It is not yet clear whether, as a result of these decisions, any authority will lose rateable value in excess of that level and, therefore, whether the existing arrangements will be triggered. While my right hon. Friend the Secretary of State for Wales and I are prepared to listen to representations on this, we see no need to extend the existing arrangements for compensation. We intend, by making our proposals effective from today, to limit the losses which might otherwise arise.

Thirdly, I have to inform the House that, once again, a minority of local authorities are employing artificial devices to incur capital expenditure and to undertake borrowing over and above the levels permitted to them under the existing capital control system.

Only a minority of authorities are involved, but the sums involved are large. Individual deals can give rise to future expenditure of several hundred million pounds. If all options granted under agreements recently entered into are taken up, several billion pounds of capital expenditure may be incurred. No Government could ignore evasion of their expenditure controls on this scale.

A number of different devices are being used. They fall into two classes. First, there are schemes under which local authorities are acquiring capital assets on terms which are outside the letter of existing capital controls — for instance, by the taking of medium term leases or by barter. Secondly, there are schemes under which local authorities are raising money by lease and leaseback or sale and leaseback of their operational assets. This is borrowing in fact, although it may not be borrowing in law. In effect, money is being borrowed by disposal of capital assets in order to finance deficits on revenue account.

Amendments have been made to the prescribed expenditure regulations for England and Wales. These will take effect from midnight tonight. But the amending regulations will be temporary in the first instance. My right hon. Friend the Secretary of State for Wales and I will consult local government and other interested parties about whether any changes or clarification are required before the amendments are made permanent. We have adopted this procedure to avoid any repetition of the events of 1986–87, when consultation preceded a change in the regulations and when nearly £2 billion worth of deals were rushed through in the interim.

The main changes made by the regulations are that, with some exceptions, acquisition of a leasehold interest in land for a term of more than three years will score as prescribed expenditure. The present limit is 20 years. And, regardless of term, prescribed expenditure will be scored on acquisition of a lease of property in which the authority holds a superior interest or which has during the previous five years been the subject of a development agreement to which the authority was a party. There are also some changes in the provisions about capital receipts where acquisition of the assets concerned did not involve prescribed expenditure.

Some authorities may as a result of the new regulations incur prescribed expenditure as a result of the exercise of options provided for in agreements already entered into. I and my right hon. Friends will consider issuing additional capital allocations where we are satisfied that the agreements were not entered into for the purpose of evading capital expenditure or borrowing controls.

Subject to the approval of Parliament to the necessary provisions, we propose to supplement the changes in the regulations with certain changes in the primary legislation. Those changes are as follows: to clarify that, when a local authority acquires land in terms other than freehold for cash, the amount of prescribed expenditure scored is the value of the interest acquired on the assumption that it was acquired freehold and for cash. That was the intention of the Local Government, Planning and Land Act 1980; to provide that where a local authority acquires property, or where works are carried out on a property which the authority owns, and valuable consideration for the acquisition of the works is given but not in money, then prescribed expenditure will be scored; to clarify that, where a local authority acquires an interest in or right over land and the interest or right does not confer a right of occupation, nil prescribed expenditure is scored only if the interest is neither a freehold nor a leasehold.

In addition, we intend to widen the statutory definition of prescribed expenditure to include the acquisition of share or loan capital in a body corporate and expenditure incurred in the discharge of obligations under a guarantee or indemnity relating to borrowing by a person other than the local authority.

All the legislative changes that I have outlined will be included in the Local Government Finance Bill. They will, however, be made effective from midnight tonight.

Is the Secretary of State aware that the effect of enterprise zones, which he now complains of and which he seeks to change by changing the law from midnight tonight, was always predictable and was forecast by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) speaking for the Labour party in 1980 when the Local Government, Planning and Land Bill became an Act? After eight years, the enterprise zone problems in that regard are now coming home to roost. They have resulted in increased rental values inside the zones, decreased rental values outside the zones and a consequent very large and continuing loss of income to local authorities as a result of rateable values being depressed.

Is the Secretary of State aware—I am sure he is—that the city treasurer in Swansea has calculated that the loss to the city's finances could be in excess of £1 million? Is the Secretary of State also aware that in Salford—another enterprise zone — the local authority has calculated that the Secretary of State's decision is likely to result in very large rate increases or a continuing loss of income to the city's finances?

There are 19 enterprise zones at the moment. In all those areas, local authorities and ratepayers have sustained and continue to sustain very large losses in income and therefore sustain extra penalties as citizens of those communities. In addition, is the Secretary of State aware that enterprise zones continue to attract the transfer of firms and companies across the boundaries, simply relocating companies from one area to another without necessarily or very often creating new jobs?

Why will the Government not recognise that attempts to ring-fence the economic effects of enterprise zones have failed and will continue to fail? Apparently the Government recognise that—at least privately—because in Monday's glossy press release document on policies for the inner cities enterprise zones are relegated to a single sentence in 32 pages. The Government have abandoned their attempts to monitor the impact and effect of enterprise zones.

Will the Secretary of State make clear what redress will be available to local authorities and ratepayers in those areas? Although I welcome his commitment to listen to representations from the local authorities — that is certainly the right thing for him to do—it seems clear that in most cases the provisions in section 67 of the 1980 Act will not be adequate to allow him to compensate them. I ask him to reconsider the provisions to ensure, through legislation if necessary, that the local authorities and their ratepayers can be properly compensated.

The Secretary of State has also decided not to accept the decision of the courts. That means that, unless he makes arrangements for adequate compensation, the people involved will not be able to benefit from the court judgment. That is his intention, but if he does not intend them to benefit from the decision it is surely incumbent on him to arrange for them to be properly compensated in some other way.

The Secretary of State has made an important and complicated series of technical financial announcements about local authority finance. Will he confirm—

Will the Secretary of State confirm that the local authorities to which he refers have been acting within the law? Is it not strange that he has uncomplimentary things to say about them, but nothing to say about the banks in the City which are falling over themselves to facilitate these deals?

Why is it that yet again the Secretary of State has made a statement without mentioning the range of effects that are likely to follow? Will he confirm, for example, that his proposals will affect large and small local authorities right across the country, under Tory as well as Labour control? Will he confirm that the proposals will affect the capital programmes of many of those authorities, including house-building programmes, redevelopment programmes and capital expenditure on leisure centres and other such facilities? Will he also confirm that the statement has implications for budgets that have already been fixed, and rates that may already have been announced for the coming financial year? Will that not cause severe problems in some local authority areas?

I welcome the Secretary of State's proposal that these matters should be the subject of amendments to the Local Government Finance Bill. But what are the Government's intentions with respect to the tabling of those amendments? Will he assure us that they will be tabled in the House of Commons, so that we have the proper time and facilities to debate them in Committee, rather than being pushed into the Bill in the House of Lords at the last moment, as the auditors' powers have in the Local Government Bill which will be before us later today?

May I also have an assurance that the Committee will have additional time to consider these important proposals? Will the Secretary of State guarantee that his amendments are tabled in good time for us to consider all their implications before they are debated in Committee? We are fed up with important decisions on local government finance and powers being bounced through the House without our having adequate time to discuss them.

On a point of order, Mr. Speaker. On documentation, the Secretary of State's bag-wallah has been moving around passing out copies of the statement. Why—

The hon. Member for Copeland (Dr. Cunningham) made some comments about the merits or demerits of enterprise zones, which do not arise on the statement. His comments may or may not be true. The point is whether the state of the locality should be taken into account when considering a revaluation proposal or whether only the physical state of the land or property should be the subject of a revaluation. It is that legal point that has caused me to make this statement. The Court of Appeal thought that the law was as we all thought it was, but the House of Lords has decided otherwise. Therefore, it is necessary to put it right.

I welcome the hon. Gentleman's implied support for putting this right through an amendment to the Bill. It was clear that he was concerned about the local authorities whose revenue would be affected if we did not put it right in the future. That is what we want to do, and we look forward to his support.

In relation to compensation, as I said in my statement, there are precedents for dealing with the matter. I have nothing further to add to that.

The hon. Gentleman asked about the court judgment. Yes, I am accepting the court judgment; that is why it is necessary to legislate. [Laughter.] Those who have benefited in the past will be able to enjoy their lower rateable values; those decisions are not being upset.

The hon. Gentleman asked me about sale and leaseback and lease and leaseback. The transactions we have all read about, including the question of Brent town hall, appear to be legal at present, although they will not be legal from midnight tonight. That is all we are seeking to do.

I join the hon. Member for Copeland in condemning those who have felt it to be a good investment to make major loans to local authorities because they must realise that they are at risk, partly because the Government do not stand behind local authorities and partly because some of the deals are based on options, which it might be more difficult to exercise in future. Of course, the regulations and the new legislation will apply to all councils. However, only a small number have been abusing the system, and I think that they are all under the control of the Labour party.

The amendments will be produced as soon as possible and I am hopeful that they will be available for the Report stage. Since the Committee has not been able to fill the time allotted to it, I can hardly believe that the hon. Gentleman is asking for more time.

Order. I draw the House's attention to the fact that we have a full day ahead of us. I ask for brief, and single, questions on this matter.

Is my right hon. Friend aware that ratepayers in Ealing will warmly welcome the third of his announcements this afternoon. A £100 million deferred purchase loan has recently been taken out by the Labour council, the repayments of which will total £20 million a year but not until after the lifetime of the present council. Can my right hon. Friend confirm that existing negotiations, details of which have been sent to his Department, cannot now proceed without his consent?

I am grateful to my hon. Friend. In the case of Ealing, the deal has been done; therefore, it is legal and stands. However, the deal contains options that are not of a legal nature until they are exercised. It may be more difficult for the council to exercise those options after the statement I have made today.

Does the Secretary of State accept that many local authorities are forced to engage in leaseback and barter deals not because of outrageous overspending but because they simply cannot provide even the minimum level of service demanded by the Government? Moreover, is he aware that many of those councils are in that stale because they are historic low spenders, not because they are overspenders? Will the Secretary of State give the House time to debate these important new principles on the Floor of the House?

I do not quite understand the hon. Gentleman's point of view. In the main, councils that engage in these massive borrowing exercises—which is what they are — are, at the same time, councils that massively overspend; they are borrowing to finance their overspending. I have listened with patience to the hon. Gentleman for many hours already, and no doubt I will have to listen to him again on the subject of these clauses.

Does my right hon. Friend accept that today's announcement will be welcomed not only by the ratepayers of Ealing but by all honest local authorities throughout the country? Does he agree that creative accounting amounts to municipal deception, and will he confirm that appropriate steps are being taken in the Committee on the Housing Bill to ensure that local authorities are not able to transfer their council estates to other side-by-side companies to evade the provisions of that Bill and the rights of tenants?

I am grateful to my hon. Friend. These practices represent massive borrowing of capital moneys to finance revenue expenditure, which will then have to be paid back in later years by councillors who may not have been elected and by ratepayers who may not be ratepayers at present, and that would be to mortgage the future in an unacceptable way.

The first part of the Secretary of State's statement concerned the effect of a legal decision arising from the setting up of an enterprise zone in Swansea. We have now heard that there is to be a mini U D C in Leeds, with many of the results which flow from an enterprise zone. Do I deduce from that that the amendments—when they are revealed to us at a later stage — will affect the result of a mini U D C in Leeds?

No, Sir, because urban development corporations do not have de-rating as part of their attractions. Firms in urban development corporation areas pay full rates, so there can be no conceivable valuation effect in the sense that there has been with the enterprise zones.

My right hon. Friend has already referred, in answer to the hon. Member for Truro (Mr. Taylor), to the coincidence of a number of these authorities also being high-spending authorities. May I tease my right hon. Friend to add a little more? Will he confirm that a high proportion of those authorities have been identified by the Audit Commission as delivering an inefficient and incompetent service? If they were simply to deliver the services that most authorities do, they would not need these arrangements.

My hon. Friend, as always, is absolutely right. Those authorities are not only incompetent in providing current account services but, as the Audit Commission has recently pronounced, extremely inef-ficient at managing their capital assets and have not been able to manage their portfolios of land and buildings in such a way as to produce maximum advantage to the councils.

Is the Secretary of State aware that the budget and rate of Brent council, which he has just rendered illegal, were agreed under the law that he brought before the House and that was agreed by the House, and that they were taken out on legal advice, which pointed out that the budget was lawful? Is he aware that the budget includes cuts of 19 per cent. in services? Those cuts will lead to the loss of teachers' jobs and social service provision being slashed and are at the margin of what is tolerable. They were kept below 20 per cent. only by the leaseback arrangement, which was organised by the lead banker, Guinness Mahon. In condemning that, will he talk to his colleagues who have a financial interest in that firm?

Is the right hon. Gentleman aware that if the budget is ruled illegal it will mean that those cuts will increase from 19 per cent. to 38 per cent.? I remind the Secretary of State that Brent has managed to avoid, by the efforts of Labour and Conservative councillors, all the upheavals and riots in London during the past decade. What does he think the response on the streets will be when those cuts of about 38 per cent. hit to the bone of people's lives, and will he take responsibility for it?

The hon. Gentleman should listen to what is said. I said that the deal that Brent had carried out is legal. I regret that it is legal. I have to admit that it is, but it will not be legal for others to do the same in future. However, there is no question of upsetting that deal or of Brent's budget being illegal as a result of anything that I have said today.

Does my right hon. Friend accept that many of us welcome an end to devices for avoiding financial discipline and will he say now that, if any Japanese banks get into difficulty as a result of municipal default, they will be on their own?

Yes, I look forward to seeing any merchant bank, be it British or Japanese, or from Leeds, taking over the council house toilet fixtures, the town hall or whatever has been mortgaged for the loans. I look forward to seeing them making a physical repossession of those factors if they ever need to secure their security.

The Secretary of State has been quick to rush to the House to condemn Brent council for attempting to preserve its services. Why has he been so tardy in failing to come to the House to condemn Westminster city council for selling off its assets? Why is it that those who seek to preserve life through the provision of nurses, discretionary grants for schools and decent houses and services for all the people are condemned, while those who sell off the dead are applauded?

No, far from being quick to come to the House, I have been tardy. I am afraid that Brent has got away with it.

Is it not true that when the enterprise zones were set up they were, in many cases, eagerly bid for by local authorities, including many Labour local authorities? Is it not also true that they were not forced on local authorities? Indeed, Derbyshire county council refused to have one. Therefore, why do we suddenly have this display of whingeing self-righteousness by Labour Members?

My hon. Friend is quite right. However, the statement is not about enterprise zones; it is about a technical point on rating and valuation law. It is extraordinary to hear the Opposition railing about enterprise zones at this time when they have provided many thousands of jobs in their areas.

Is not the Secretary of State in effect using the budget mechanism effectively to draft a national leasing agreement which will tightly define all local leasing and freehold arrangements? Where is his concern for local conditions and local discretion? Is not this, in detail, another prime example of dictatorship from the centre for local government?

The 1980 Act and the Act that went before it controlling local authority capital expenditure were all attempts to define exactly what functions local authorities had in raising and investing capital. The point is that they have been evaded. Labour Members are keen to condemn those who evade the tax laws, but they seem to have a rather different view on those who get round the laws on capital spending.

Does my right hon. Friend agree that the banks' behaviour in lending money to irresponsible local authorities is a disgrace and that ratepayers and residents will have to live with the consequences for many years to come? Will he have no sympathy whatever with any of those banks if they get their fingers burned?

My hon. Friend is right. I cannot condemn people who do things that are perfectly legal, but I do wonder whether some of the banks have understood the great risks they face and the great difficulties that they would have if it came to repossession.

Since the changes stem from court cases in Wales and England and a House of Lords' decision is involved, will the proposals also apply to Scotland? Given that the Minister is waiting until 1990 to introduce changes in economic factors as part of the procedure, is he aware that Scotland has regularly devalued every five years? Therefore, in fairness, should not the ability to have lower rateable value apply to Scottish businesses right now? Will they lose if his proposals are applied to Scotland?

This statement does not apply to Scotland. Scottish law is quite different and the judgment does not apply to Scotland. In no sense does anything that I have said today have any Scottish implications.

Is my right hon. Friend convinced that he has closed all the leaseback loopholes so improperly and callously misused and exploited by Left-wing councils to the long-term detriment of the ratepayer? If he cannot give that assurance, will he consider tabling enabling legislation in a local government Bill to allow him to deal with future fiddles by Left-wing councils?

The measure that I have announced today will deal with all known abuses of the capital control system, but my hon. Friend will know that, if time permits, we intend to legislate in the autumn for a total reform of the capital control system. It may well be a good idea to take powers in that legislation to stop up some of the abuses, but that is a matter that has not yet been decided upon.

Will the Minister take it from me that the ratepayers of Salford will see his announcement today as an unnecessary penalty upon their local authority and that they will now question whether it was sensible to have co-operated all the way down the line with the Government?

No, Sir. Today's announcement comes to the relief of the ratepayers of Salford and everywhere else who otherwise would have continued to lose rateable income if we had not stopped up the loophole.

Does my right hon. Friend agree that the legislation has been a long time in coming and that the actions of councils, such as Sheffield city council, which placed the city in hock several years ago to the Bank Paribas, should have led to legislation being brought in before this?

I never knew that the hon. Member for Perry Barr (Mr. Rooker) had a bank. I congratulate him. I hope that he will not go on lending to Sheffield.

When will the Secretary of State's campaign of hatred against Labour local authorities end? Is he aware that local authorities have become involved in various financial arrangements in order to try to defend jobs and services in areas that are desperately being deprived of them by the Government? Since he is so quick to condemn those local authorities, why does he not answer the question put to him by my hon. Friend the Member for Brent, South (Mr. Boateng) on the actions of Westminster city council, which sold off the cemetaries for 5p and is now trying to buy them back? Will he be ordering an inquiry into that piece of financial chicanery?

Far from my hating Labour local authorities, when will the hon. Gentleman stop hating ratepayers?

As a councillor in the London borough of Brent from its inception in 1963 until 1974—a borough which, during the whole of that time under both Labour and Conservative administrations, never entered into the sort of chicanery that we are debating today—may I tell my right hon. Friend that the people of Brent will be most grateful, not least my mother and the other elderly people who live there, for his statement today? The only criticism that I have is that it is far too late and should have been made years ago.

With my usual humility, I plead guilty to the charge that my hon. Friend lays against me.

Is it not significant that it is the Secretary of State who, during the course of his tenure in office in the Department of Transport and now in the Department of the Environment, has had to come to the Dispatch Box on at least six occasions because he has become involved with the courts, mainly because of the continual battle which is going on between local democracy and the Government who are taking away powers on every possible occasion? Is it not also ironic that the Government, who give £1 billion in tax relief to the banks that are rescheduling debts with countries that cannot pay them back, are now hammering Labour local authorities because they have taken part in a similar exercise? Surely there are double standards here.

I have news for the hon. Gentleman. The major judgment with which we are dealing today—the Cakebread judgment—arises out of an error made in the Rating (Water Hereditaments) Order 1975, produced by the Labour party, signed by Mr. Anthony Crosland, which would cost all local authorities dear.

Does not my right hon. Friend agree that the effect of the third part of his statement will be to protect people who do not now have the vote or enjoy the accountability of their local authorities? Does he agree that his announcement will have a great impact on people when they come to pay the community charge? That protection will save them from the perils of Socialism, which says that one can spend today and pay back later.

Will my right hon. Friend give the important assurance that the amendments will in no way block the implementation of the Local Government Finance Bill? The sooner it gets to the statute book the better.

My hon. Friend raises a serious point. It is of great concern to me that some authorities are prepared to borrow massively in order to have to repay in later years, when the present councillors may no longer be in office, thus landing their successors and those who will pay the community charge in future with very large bills. I believe that this House owes it to future community charge payers to prevent that sort of thing.

May I welcome my right hon. Friend's clarification of the position following the Addis v. Clement decision, which will be widely welcomed in my local authority, which contains an enterprise zone? But would he agree that the negative comments of the shadow Secretary of State, the hon. Member for Copeland (Dr. Cunningham), irrelevant though they may be, will cause dismay in areas where there are enterprise zones—particularly in my own? The Delyn enterprise zone has played a significant part in reducing unemployment by 42 per cent. in the past four years. Is Labour now against enterprise zones?

I entirely agree with my hon. Friend. It does not matter what the hon. Member for Copeland (Dr. Cunningham) says, because he will never do anything except sit on the Opposition Benches.

May I ask the Secretary of State to reconsider his announcement that these amendments will be presented to the House only on Report? As there are several more weeks of Committee proceedings, why is the Committee being denied the proper time in which to scrutinise his proposals and debate them properly in detail? If the right hon. Gentleman insists on bringing them to the House only on Report, I hope that he will arrange with his right hon. Friend the Leader of the House to provide more time.

What will the right hon. Gentleman say to the council leader from Surrey, who told me a few days ago that what the Secretary of State did on capital controls did not matter, because with bankers like his council's — Rothschild's—it would always be able to find a way to do what it wanted, and to finance deals anyway?

Is not the right hon. Gentleman's concern for the ratepayers in inner-London authorities a little partial? Why does he not show any concern for the ratepayers of Westminster? Why does he not intervene there, as he is so keen to intervene elsewhere? Why is he content to allow asset-stripping of cemeteries at a cost of millions of pounds to the ratepayers? Should he not be inquiring into those events, too?

Since the hon. Gentleman appears to be going to support the new amendments that I have said will be tabled, I cannot think why he wants such a great deal of time in which to debate them—particularly as the Standing Committee has not found it possible to fill the time allotted to it. I can assure the hon. Gentleman that we shall do our utmost to get the drafting done and bring the amendments before the House as soon as possible, but I cannot promise precisely when that work will he completed. Of course, I must discuss matters of time with my right hon. Friend the Leader of the House.

The hon. Gentleman knows full well the limit of my powers in relation to the Westminster matter.

Gaming Machines (Prohibition On Use By Persons Under Sixteen)

4.15 pm

I beg to move, That leave be given to bring in a Bill to prohibit the use of gaming machines in cafés, small shops, amusement arcades, snack bars, fairgrounds and other places by persons under the age of 16 years.

In this way I hope to tighten a loophole in the present law and so protect schoolchildren, at least, from what has become a form of hard gambling. Although the law restricts the availability of jackpot machines to adult licensed premises, schoolchildren have easy access to AWP fruit machines, for they readily find them in fairgrounds, amusement arcades, small shops, cafes, fish-and-chip shops and snack bars, which are established features of their everyday lives.

Schoolchildren are lured to gaming machines by their flashing lights and beckoning noises, but what begins as a game can all too often develop into a tragic addiction which ruins the lives of the young and innocent and puts unbearable strains on their families. Every study which has examined the problem among schoolchildren has shown that young people can get hooked on gaming machines as quickly as they can on drink or drugs, and the effects are no less devastating.

The addiction created by machine gambling has been compared to the compulsion experienced by animals used in reinforced learning experiments in psychology. Young machine gamblers, like the animals, will play with mindless repetition and furious speed in their determination to get it right. Modern technology encourages that, because the nudge and hold features delude the young person into believing that he or she can beat the system.

The addiction produces its own social problems. As children meet regularly in the same places to play machines, they can easily become pick-up targets for the unsavoury and run the risk of gang formation. Many are tempted into lives of crime when they realise that this sort of craving cannot be satisfied from pocket money funds. School-age machine gamblers are children at risk. It is on that risk that recent media campaigns, such as the one launched in Glasgow by the Evening Times, have focused. The media are right to alert public opinion to the need for a moral crusade to change the law before even more young lives are caught in the net of hard gambling.

The urgency of the need to end this form of child exploitation is also stressed in the evidence of the many surveys that have examined the nature and scope of the problem. I refer to the National Council on Gambling's survey of state schools in four London boroughs, to the survey conducted by the Spectrum Children's Trust among 2,500 schoolchildren in the south-west, and to the study of 10,000 schoolchildren that was recently carried out in various parts of the country by the National Housing and Town Planning Council.

The evidence of these and other studies is frightening and demands that we take immediate action to end this growing social menace. Machine gambling is shown to be the major gambling problem in every age group from 11 to 16. Evidence also shows that these young schoolchildren gamble not only in amusement arcades and funfairs but congregate every day in small shops, snack bars, fish-and-chip shops and cafes to spend their lunch money feeding not themselves but the insatiable appetite of the machines.

Schoolchildren who gamble share common problems—poor work, aggressive behaviour, truancy, emotional disturbance and stealing. It is sad to note that all the evidence confirms that those who become addicted to machine gambling were introduced to the machines before they were 13 years old and, in some cases, when they were even younger. The addiction also leads to lying, deceit, shame and mistrust, which are commonly found in the homes of young gamblers. Those problems have become so acute that a support group, Parents of Young Gamblers, has had to be formed.

Addicted children do not suddenly kick the habit when they leave school. Many progress to the betting shops and gambling casinos, while desperation for the money that their addiction consumes drives others to commit serious crimes of violence. The law is lax on this matter, not through any deliberate attempt to exploit but merely because no one foresaw the scale of the potential danger when the machines were first introduced. The problem of school-age gambling is the proverbial one of Topsy—it just grew. If it is not halted quickly, it will produce a gambling epidemic in the not too distant future.

A trade code of practice forbids schoolchildren to gamble on machines, but all the evidence proves that that code is not working. Machine gambling is every bit as common among children wearing school uniform as it is among those who are casually dressed.

The absence of an effective trade code of practice is aggravated by the nature of local planning laws. Although they can take account of factors such as noise and congestion when considering applications, they cannot pay attention to factors of morality. Thus, schoolchildren can become the easy prey of unscrupulous fairground owners, arcade managers or shopkeepers who choose to obey the dictates of their pockets rather than those of their consciences.

Let us not forget the huge profits that can be made from gaming machines. One example of profitability was noted in the recent statement by the chief executive of the Rank Organisation. Referring to bingo profits, he admitted:
"Only 30 per cent. of our profits actually come from bingo. We make most money from the AWP, or 'fruit machines', followed by food and drink."
We can be sure that gaming machines in fairgrounds, arcades and small shops are no less profitable for their owners.

It is easy to see how schoolchildren can be exploited, but it is the duty of the law to protect the young and immature from being led into harmful situations, especially those that can ruin their lives. Therefore, with the lives of schoolchildren in mind, I ask the House to preempt any long-term measures that might result from the current Home Office review. The weight of the evidence before us and the strength of public opinion in support dictate that we cannot afford to wait and see. By waiting, we shall put even more young lives a risk.

Therefore, I ask the House to act to prevent young persons under 16 years gaining access to gaming machines in fairgrounds and amusement arcades, and to remove such offending machines from snack bars, small shops, cafes and fish-and-chip shops, which are the regular haunts of schoolchildren. Again, I stress the urgency with which I ask the House to act. If even one more life is lured into the horrendous net of hard gambling as a result of our failure to give protection, it will be a tragedy, not only for the individual and his family but, now that we have been alerted to the scale and dangers of the problem, for the conscience of the House. I ask the House to support the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Jimmy Dunnachie, Mr. Don Dixon, Mr. Alan Meale, Mr. John Hughes, Dr. John Reid, Mr. David Marshall, Mr. Allen Adams, Mr. Thomas McAvoy, Mr. Michael J. Martin, Mr. Bob McTaggart, Mr. Robert Litherland and Mr. Stanley Orme.

Gaming Machines (Prohibition On Use By Persons Under Sixteen)

Mr. Jimmy Dunnachie accordingly presented a Bill to prohibit the use of gaming machines in cafes, small shops, amusement arcades, snack bars, fairgrounds and other places by persons under the age of 16 years: And the same was read the First time; and ordered to be read a Second time upon Friday 22 April and to be printed. [Bill 116.]

Orders Of The Day

Local Government Bill

Lords amendments considered.

4.22 pm

On a point of order, Mr. Speaker. I raise with you a matter of which you are already aware, the selection in relation to what was clause 28 when it left the House and will now be clause 29 of the Local Government Bill. You have given considerable thought to the amendments that I have tabled. For one last time, I shall briefly put to you the argument for taking one or both of the amendments that I propose.

May we be allowed to debate whether, instead of the word "promote" in clause 29, as it will now be, we should have an alternative word, "commend", as was suggested in another place? The dictionary makes it clear — perhaps I did not make this argument clear before—that, whereas "commend" has only one meaning, "promote" is open to a variety of meanings. The ambiguity of the word "promote" could render the legislation controversial and problematic in a way that "commend" could not. The "Oxford Dictionary" makes it clear that there are different types of meaning of "promote", but "commend" has only a positive, welcoming or recommending sense. That word would seem to restrict the ambit of the clause and, therefore, raise a different issue about its reach.

The other matter relates to the grouped pair of amendments that were tabled by me, amendments (b) and (d) to Lords amendment No. 10. The proposed amendment would delete the word "homosexuality" and replace it by
"sexual activity between persons of the same sex."
That matter, too, was debated in the other place. To paraphrase the argument in the other place, to promote or commend homosexuality is arguably scientifically impossible in the sense that, if homosexuality is a condition or an orientation, it cannot in any way be promoted or commended with any concrete effect. The alternative would be to make it clear—it would accord with the mischief with which the original proposer of the new clause sought to deal in Committee—that what was intended to be dealt with by the legislation was the promotion or commendation of sexual activity between people of the same sex. That clearly falls to be considered within the context of the legislation, and certainly—I do not think that there is any dispute—should not be promoted or commended by local authorities.

But there is a difference. In practice, it would be the difference between a local authority properly allowing a teacher, for example, to respond to a proper question, and the local authority going on with its present duties and responsibilities in commending specific activity and being seen to endorse it.

I am aware that you have given thought to the matter, Mr. Speaker, and I am grateful. But I ask you, particularly in respect of the first point, which I may not have put clearly enough before, to consider one more time whether we could have an opportunity to have what would be the only possible debate on the substance of the legal wording and interpretation of a controversial clause to a controversial Bill.

As the hon. Gentleman knows, we have had discussions about the matter. In the light of what he has said to me, I have looked at the matter again. I am afraid I cannot change my selection.

On a point of order, Mr. Speaker. My point of order arises out of the fact that we are discussing the business at all today. The Lords amendments were available to Members of the House of Commons only some time on Friday of last week. That meant that it was impossible for hon. Members, particularly Opposition Members, since the Government knew what the situation was, to table amendments until the sitting of the House on Monday. Clearly, the Clerks of the House had to judge whether the amendments were in order. Such decisions were, broadly speaking, communicated, at least to me, yesterday — I make no criticism of the Clerks in that respect—by which time, of course, it was impossible to table any further amendments and have them on the Order Paper to be accepted by you for debate. That cannot be a reasonable way for the House to deal with its business.

The problem was raised by my right hon. Friend the Leader of the Opposition with the Leader of the House during the business statement last Thursday. The Leader of the House said:
"The Bill will be available in the Vote Office first thing tomorrow".— [Official Report, 3 March 1988; Vol. 1440, c. 1156.]
I am not sure that it was available first thing, but it was certainly available during Friday. That is simply not good enough to enable all Opposition parties proper time to scrutinise the implications, to table amendments, to discuss them with the Clerks, to seek advice, and to secure debates on issues that we believe to be of importance to us and to our constituents.

Like the hon. Member for Southwark and Bermondsey (Mr. Hughes), I regret that some amendments standing in my name and in the names of my right hon. and hon. Friends have not been selected. Had the business not been concertinaed in such a way, the problems could have been avoided. It cannot be an acceptable or satisfactory way in which to proceed with important legislation affecting not only aspects of local government finance and contract compliance but people's civil rights and other matters of fundamental importance to us all in a democratic society. Although it is probably too late to do anything about today's proceedings, I hope that somehow these problems can be eliminated in future. The position of the House is weak and growing weaker vis-a-vis the executive — whichever party forms the executive. I cannot believe that Members of Parliament or the public want Parliament to grow weaker and weaker, especially with a mounting load of legislation from any Government. I raise this matter with you, Mr. Speaker, because it is important to put it on record and to seek ways of ensuring that these problems do not arise again in future.

4.30 pm

I fully appreciate what the hon. Member has said about time. I think that it is important that the Opposition, and indeed the whole House, has time to table properly drafted amendments. I shall look again carefully at the starred amendments, but at first sight I do not think that I can change my selection.

Further to that point of order, Mr. Speaker. No one is criticising your selection of amendments or the advice that the Clerks have put forward. What is causing great concern to Opposition Members is the deliberate efforts by the Government's business managers to make it difficult for Opposition Members to table amendments that are in order on difficult matters, and the totally slipshod approach by the Department of the Environment and the Office of the Leader of the House. Those are the only possible explanations as to why you, Mr. Speaker, and the Clerk have been put in some difficulty, as have Opposition Members.

We have heard today from the same Secretary of State on a different Bill. He made an announcement about three matters he wanted to introduce into the Local Government Finance Bill, but he cannot even promise that they will be brought forward in time to be considered in the already guillotined Committee. He is proposing, or at best promising, that they will be brought forward to be discussed in the already guillotined report stage of the Bill. That statement follows the problems that we have had with a major announcement of new policies which are to be incorporated into the Education Reform Bill so that we had to change guillotine motions and God knows what else.

The House is being treated with contempt by the Government's business managers, who are not one jot interested in giving the House the opportunity properly to scrutinise the legislation. They want simply to push through slipshod amendments as rapidly as possible. It is simply not good enough. If necessary, will you, Mr. Speaker, call a meeting of the usual channels so that we can avoid what is happening at the moment occurring again and again?

Further to that point of order, Mr. Speaker. As amendments to Lords amendments are by nature the most difficult to draft satisfactorily because of the limited scope of what is before us, is it not the normal practice for the period between Lords amendments coming to the House and being debated by the House after Third Reading in the Lords to be two weekends and a full week in which we can, as the hon. Member for Copeland (Dr. Cunningham) argued, consider any amendments that we wish to table, see whether they are acceptable in drafting terms for consideration by you, Mr. Speaker and table further amendments if they are not? I seek your ruling about whether the timetable was complied with in this case and whether any course is open to us whereby we could proceed with this business for some time, see how far we get and resume it on another day while we deal with the remaining Orders of the Day.

I fully appreciate the importance of time to the Opposition and to the whole House in tabling amendments, particularly to Lords amendments. Although the matters that have been raised have my sympathy, they are not matters for me. Perhaps they should be pursued with the Leader of the House when he is here tomorrow.

Clause 1

Defined Authorities

Lords amendment: No. 1, in page 2, leave out line 13.

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

With this it will be convenient to discuss also Lords amendments Nos. 6, 31 and 33.

The Development Board for Rural Wales is established to operate as a development agency with economic and social functions in rural Wales. The DBRW is akin to the Highlands and Islands Development Board and the Development Commission in England, which are both precluded from the Bill's provisions.

My right hon. Friend the Secretary of State for Wales ensures that the board exposes its activities to competition and uses private contractors wherever it is possible and reasonable.

The opportunity has also been taken in amendments Nos. 31 and 33 to remove the board from the competitive tendering provisions of part III of the Local Government, Planning and Land Act 1980 governing building and maintenance by direct labour organisations. The part III provisions have little practical impact on the board as they apply to bodies with direct labour organisations of about 30 employees. The board has only 12 employees in its organisation.

Will the Minister confirm that the board is seeking these amendments?

That being so, can the Minister provide any enlightenment as to why the provision was included in the Bill in the first place?

Question put and agreed to.

Clause 3

Other Definitions

Lords amendment: No. 2, in page 3, line 38, leave out "a parish or community council".

The Parliamentary Under-Secretary of State for the Environment
(Mr. Christopher Chope)

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

When parish and community councils were added to the list of defined authorities in clause 1, it became necessary to delete the reference to them in clause 3 which implied that they were not defined authorities. This was only noticed after the Bill had left this House.

Question put and agreed to.

Clause 11

Report For Financial Year

Lords amendment: No. 3, in page 10, line 11, leave out "the first relevant date" and insert "30th September".

The Parliamentary Under-Secretary of State for Scotland
(Lord James Douglas-Hamilton)

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

With this it will be convenient to discuss also Lords amendments Nos. 4, 5 and 28 to 30.

These amendments bring the Scottish report dates into line with those applicable to England and Wales.

There was some discussion about this in Committee, and a plea was made by the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) for a consistent approach north and south of the border. Although the amendment was tabled by the hon. Member for Maryhill, the hon. Member for East Lothian (Mr. Home Robertson) also spoke about it. He said:
"The date of 31 December specified in the Bill could give rise to practical problems. The Bill does not say, 'By the last post on 31 December'—if there is a last post … Can the Scottish Office confirm that an official, or at least a Minister will be present in New St. Andrew's House and that the doors will he open to receive the hundreds of annual reports at one minute to midnight on hogmanay?"
I am glad that in response to that my hon. Friend said:
"throughout the year Scottish Office Ministers are available."
We did see the force of the argument of the hon. Member for East Lothian. It is no part of my desire to see the terms of the Bill impinge on the happiness of Scotsmen at hogmanay, hence the amendment.

However, a more weighty argument was made by the hon. Member for Maryhill who said that we should have consistency north and south of the border.

What was a practical proposal by the Accounts Commission has simply been rendered redundant by the introduction into the Bill of a further refinement of the audit process.

As previously drafted, reports by Scottish authorities were to be prepared by 30 November and submitted to the Secretary of State by 31 December. The Bill now requires reports by all authorities, including Scottish authorities, to be prepared by 30 September and sent both to the Secretary of State and to auditors by 31 October. The Commission for Local Authority Accounts in Scotland takes the view that it is no longer necessary to have different dates for preparation and submission of reports for Scotland. This is because the Bill now makes provision for auditors to check the statements of rate of return for those activities covered in the Local Government. Planning and Land Act 1980, as well as those covered by this Bill and to highlight any discrepancies in the report. This will ensure that the reports received in the Department are subject to scrutiny and based on audited figures. I am sure that the House will agree that that provides welcome consistency north and south of the border.

I hope that the House will agree that these are uncontentious points. Indeed, they are in response to the hon. Member for Maryhill who spoke, not only on behalf of herself, but the Opposition when she said:
"The Opposition believe that it is only fair that England, Scotland and Wales should keep to the same dates, whatever they may be." —[Official Report, Standing Committee A, 10 November 1987: c. 620–24.]
It is perhaps slightly ironic that I am responding to the representations of those hon. Members when they are absent today. However, I am sure that in due course the hon. Member for Glasgow, Springburn (Mr. Martin) will bear that news to his colleagues—[Interruption.] Yes, I realise that they are in Scotland at a conference. The amendment does precisely what they asked and I commend it to the House.

In response to the Minister, although Labour Members are not present [Interruption.]—although the hon. Members who raised those points are not present—I am sure that they will appreciate what the Minister has said because it shows that the Government have at least some sense of humour. I am glad to note that Scottish custom, tradition and long usage has been taken into account in producing the changes.

I wish that the Minister would convey to his colleagues the same willingness to make sure that the same rules apply north and south of the border and in Wales in other pieces of legislation. On the Housing Bill, for example, it has been strongly argued—but not yet accepted — that what is happening in Scotland should happen in England and Wales. Perhaps the Minister could use his best offices to secure similar provisions across the border in that Bill as he has now secured in this.

Question put and agreed to.

Lords amendments Nos. 4 to 6 agreed to.

Clause 17

Local And Other Public Authority Contracts: Exclusion Of Non-Commercial Considerations

Lords amendment: No. 7, in page 14, line 17, at beginning insert

"Subject to the provisions of sections 18 and (Questions relevant to code of Practice on Employment of Disabled),".

With this it will be convenient to discuss Lords amendment No. 8.

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

Hon. Members will have noted that, apart from these two amendments, no substantive changes to the provisions of part II of the Bill were made in the other place. Their Lordships accepted the principle behind the provisions, as did this House, that local authorities should not be in the business of setting themselves up as extra-statutory enforcement agencies on matters which are already the subject of existing statute and which have, where appropriate, their own enforcement processes.

The position in relation to the Race Relations Act 1976 is quite different. In it, the local authorities are given a specific statutory role of enforcement, and this is acknowledged in the Bill in clause 18, where the local authorities may ask specific questions of contractors, and take into account the replies that they receive.

However, the statutes directly relating to the employment of the disabled are the Disabled Persons (Employment) Acts of 1944 and 1958 which do not include such a role for local authorities. I shall give reasons why that is correct later. Their Lordships accepted, as did this House, the principle that local authorities should not assume the role of enforcing the provisions of those Acts, a role which rightfully belongs to the employment service of the Department of Employment.

What we are all seeking—their Lordships, this House and certainly the Government — are the best possible opportunities for the disabled to be able to gain employment. I would like to emphasise our total commitment to the principle that disabled people should have every opportunity to obtain useful and gainful employment. Our record on positive measures to help disabled people gain those opportunities is strong.

For example, last month sections 5 and 6 of the Disabled Persons (Services, Consultation and Representation) Act 1986 came into force. Those measures include a requirement to assess the needs of disabled school leavers, taking account of a range of services including education, vocational training and employment. We have also recognised that disabled people on income support should be able to earn more money without it affecting their benefit. and next month that disregarded sum will be increased from £4 to £15 per week.

In 1986–87 nearly 84,000 disabled people were placed in work through MSC general programmes, and over 17,000 disabled people were in sheltered employment. In 1987–88 the MSC will spend some £133 million on programmes specifically for the disabled, of which some £87 million will have been spent on sheltered employment. £22 million on employment rehabilitation;£15 million on resettlement services; and almost £9 million on training at residential training colleges.

4.45 pm

Nevertheless, it is clear that the other place felt strongly that more should be done to help disabled people with employment. There was concern about this in this House too before the Bill left here. The Government accept that they should respond to this clear feeling of both Houses. My right hon. Friend the Secretary of State for Employment is announcing a review within his Department of the policies and programmes that he supports for disabled people in employment. The review will take account of the recently completed study by the National Advisory Council on Employment of Disabled People. It will also take account of the conclusions that the Public Accounts Committee reaches on the National Audit Office's examination of the quota arrangement and other arrangements made for the benefit of people with disabilities.

In the light of this, I hope that the House will be willing to accept that it would be appropriate for the amendments to be reversed.

The Secretary of State may be coming on to this point. and I apologise for intervening if he is, but does he accept that what he has said so far relates only to national Government policy and to employment by central Government, whereas we are obviously concerned about local government employment policies and local government's ability to take on disabled people and employ then adequately?

Yes, I am coming to that, but if I do not satisfy the hon. Gentleman when I do come to it, I shall happily give way to him again.

If the amendments agreed in the other place were to be accepted, it is our belief that they would do nothing to further the interests of disabled people, but would in fact provide a possible means whereby local authorities could discriminate against contractors that they did not like for other reasons. Amendment 7 merely paves the way for the new clause introduced by amendment 8. That new clause empowers authorities to ask questions of potential contractors about the non-commercial matters set out in clause 17(5)(a), in order to ensure that contractors have due regard to the Manpower Services Commission's code of good practice on the employment of disabled people.

When the amendments were debated in the other place, the argument in their defence was that there was no contract compliance requirement in the amendments; no extra-statutory enforcement rights; no compulsion for local authorities; and no interference with the efficiency of the companies concerned. Hon. Members will recognise that that is simply not the case. If the Bill was now to remain unamended as their Lordships have sent it to us, an authority could decide to refuse to do business with a particular company on the ground that, in the authority's view, the company did not have proper regard to this particular non-statutory advisory code. In our view, that is an open invitation to local authorities to exercise covert discrimination against contractors of whom they disapprove possibly for other reasons.

If all a local authority wishes to do—this was the expressed reason for the clause when moved in the other place — is bring the code of good practice to the attention of firms with which it is considering doing business, there is nothing in the Bill which prevents that. Indeed, that part of the new clause in amendment 8, which would allow authorities to refer prospective contractors to relevant agencies, is entirely superfluous. Nothing in the Bill stops authorities referring contractors to the employment service or the Manpower Services Commission — the relevant agencies — if they consider that contractors need advice or guidance on employment of disabled people.

Nor is there anything in the Bill to stop authorities calling together employers in their area to discuss ways in which the various recommendations and suggestions in the code of good practice can best be implemented. That sort of action seems far more relevant to local government, and indeed much more likely to have an effect on the local people whom local authorities exist to serve, than crude contract compliance measures applied to contractors in general. Many contractors will be supplying goods made in factories miles from the authority's area and some even overseas. No system of local enforcement regarding disabled employment is sensible when a national policy is essential, and that is what we have.

The amendments are not about local authorities dealing with employers in their area. They are not even concerned with authorities' own role as an employer of disabled people—in no sense affected by the amendments—or with the way in which the 1944 and 1958 Acts are observed. They are about giving local authorities the power to discriminate against certain firms by imposing their own views on how an advisory code of good practice should be observed, and refusing to do business with them if the authority does not agree with those firms' interpretation of the code. I do not believe that the amendments would result in any more jobs for disabled people. They would give the most intransigent of authorities a new weapon with which to discriminate against contractors in a subjective and non-commercial way.

It is at the heart of part II of the Bill to deny authorities the chance to do such things; and it would be very difficult to defend not extending the practice embodied in the amendments to other matters, such as sexual discrimination, nuclear-free zones, apartheid or anything else. We would have lost the logical distinction upon which the Bill is based.

Can the Secretary of State explain the relevance of the amendments to the local authorities? If the amendments were accepted, they might not produce more employment for the disabled, but they certainly would not produce less. Indeed, they could result in more employment possibilities. The amendments would not have automatic consequences, but they would at least challenge local authorities and their contractors to consider whether they are doing enough. That is the great merit of the amendments and why they got all-party support in the other place.

I believe that the amendments could easily result in fewer jobs. The harassment of firms could result in them being unprepared to tender for a local authority contract. Therefore, the result could be possible employment losses and even job losses for the disabled.

Does my right hon. Friend agree that, although the amendments are well-meaning, they might risk undermining the whole basis of the Bill — to stop political discrimination — and generally weaken Government policies that have resulted in an 80 per cent. increase, in real terms, in spending on the long-term sick and disabled?

My hon. Friend has summarised the case that I put at greater length. We have tried to recognise the concern felt by hon. Members and the Lords that more could be done for the disabled. Indeed, my right hon. Friend the Secretary of State for Employment has introduced a new intitiative to find ways to help the disabled nationally. I believe that such help is better given nationally rather than through patchy and sometimes unhelpful attempts to use contract compliance for that purpose.

I support the Lords amendment. I was amazed by the Secretary of State's defence of the present position. First, he went through a long catalogue citing the so-called generosity of the Government towards disabled people. The disabled people in my constituency do not find the Government very generous.

The right hon. Gentleman has hinted that the Secretary of State for Employment will undertake a national review of disabled people's ability to get jobs. Why has the Secretary of State for Employment not done that before? Why has he waited all this time? I am sure that that question will not be lost on disabled people.

The Secretary of State for the Environment has suggested that the Lords amendment may allow local authorities to threaten contractors. What we are discussing is opening up opportunities for disabled people. If nothing else, the Lords amendment helps to raise the awareness of contractors, which is at the heart of the matter, to their obligations and to the common decency of allowing disabled people greater opportunities in the job market.

The Lords amendment is not strong. It merely allows local authorities to draw contractors' attention to the code of practice on the employment of disabled people, to consider their employment policies in the light of that code and to enable the authority to refer them to the local disablement advisory service. There is nothing earth-shattering about that. There is no provision in the amendment that would allow a local authority to refuse a contract if it considered that the contractor was not complying with the code.

Employment quotas, as set out in the Disabled Persons (Employment) Act 1944, are also excluded from the amendment. In short, the amendment is limited, but it is extremely important. It puts a marker down to ensure that local authorities and contractors who submit tenders should consider closely the needs of disabled people in the community. If we pass the amendment, it would provide an extra encouragement — not a statutory duty — to employers to employ disabled people and reduce discrimination against their employment.

It is unbelievable that the Government are contemplating the removal of the amendment, especially when we are aware that an increasing number of employers are failing to meet the disabled employment quotas, and therefore their legal obligations under the 1944 Act. In 1986, only 27 per cent. of employers carried out their legal obligations. Unemployment among disabled people is double the rate among their peers—for some disabled groups the difference is even greater.

In such circumstances, given the emotional implications for the disabled, their economic dignity and well-being, it is nothing less than a disgrace that the Government should seek to change the law not only to outlaw practices that are presently lawful, but also to seek to throw out an amendment that attempts to encourage employers to meet existing legal obligations and encourages compliance with a voluntary—I stress that word—code of practice. That code of practice was launched in 1984 with the support of the Prime Minister, the CBI, the TUC, the Institute of Personnel Management, Royal Association for Disability and Rehabilitation and the all-party disablement group of which my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) is joint chairman. That code of practice encouraged employers to establish a written policy for the employment of disabled people and the rehabilitation of t