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Local Government Bill

Volume 492: debated on Thursday 28 January 1988

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4.52 p.m.

House again in Committee on Clause 17.

moved Amendment No. 83B:

Page 15, line 13, at beginning insert ("except in relation to local employment under subsections (5A) to (5E) below").

The noble Lord said: It would be appropriate to take also Amendment No. 93. To set the scene I should like quickly to read exactly what Amendment No. 93 says:

"The authority may in relation to the functions regulated by this section have regard to the employment (in the case of an inner city area or region of high unemployment) of a reasonable percentage of the workforce from among the local unemployed, subject to the obligations regarding the abolition of discrimination according to nationality, the guaranteeing of free movement of goods, persons and services and provisions for economic and social cohesion.
In this section 'inner city area' and 'region of high unemployment' shall have the meanings as set out by the Secretary of State in regulations.
In this section 'obligations regarding the abolition of discrimination according to nationality, the guaranteeing of free movement of goods, persons, and services and provisions for economic and social cohesion' shall have the same meanings as defined by Articles 7, 30, 48, 59 and 130Aa and B of the Treaty of Rome".

This is a further attempt by these Benches to persuade the Government that there are special cases that need to be taken into account when trying to do what they intend in this Bill. The purpose of the amendment is to allow local authorities in inner city areas or in regions of high unemployment to stipulate in contracts for public works or public supplies that a reasonable percentage of the jobs created is taken by unemployed residents of the area.

I do not understand what has happened to Amendment No. 90, which seems to have been skipped.

I am sorry. I thought the noble Lord said Amendment No. 93.

I do understand. The amendment we are debating is the second amendment on the Marshalled List, Amendment No. 83B. With it we are taking Amendment No. 93. I was simply outlining that one is a paving amendment to the genesis of the other.

The background to this and my deep interest in this amendment is that I happen to be president of the Association of London Authorities, which represents many inner-city areas of deprivation and high unemployment. Of course they are not the only such areas—there are great arguments on the North-South divide. There are pockets of deprivation in other parts of the country and there are pockets of affluence in the midst of a great deal of unhappy circumstance. However, I venture to suggest that Greater London has more areas of deprivation, unemployment and distress in need of economic regeneration than many comparable areas of the same geographical size throughout the country.

With this amendment I wish to draw attention to what I believe are not only genuine reservations but perhaps also areas of profit to be looked at by the Minister and his colleagues. I draw attention also to the impact of this amendment on the rules, regulations and stipulations of the EC. Until recently government Ministers have expressed on more than one occasion support for the concept of a means, a mechanism or legislation which in effect would do exactly what these amendments seek to do.

As recently as August of last year a neighbouring Member of Parliament—Marion Roe, the Member for Broxbourne, which is just to the north of where I live in Enfield and Edmonton, and who is the appropriate junior Minister—visited Broadwater Farm. She looked at the work carried out there and said:
"I am glad to know that the work will not only be undertaken by people living on the estate but will also include a training element for the unskilled unemployed".
That was entirely in accord with the expressions of her ministerial colleagues, not least the Secretary of State in another capacity.

I should also like to plead in aid for the concept that I am asking the Committee to accept the words of Kenneth Clarke. As we know, and as far as I am concerned, he is a highly respected Member of Parliament and a busy Minister with enormous responsibilities. He went so far as to say on a television programme:
"I think I am saying more than that. I think the so-called EEC problem is a very narrow legal point. I do not think there is any inhibition in finding other ways of providing local training, local jobs, out of all other activities: the building activities, the opening of new business and the encouragement of new business that the Government is going for".
There have been other similar expressions, not least by the Minister, Mr. Nicholas Ridley. In an article in New Society, Michael Howard, who is the Minister of State, is reported as saying:
"When I announced in October last year that the Government would bring forward this legislation"—
that is, this Local Government Bill—
"I hoped that it would be possible to include a special provision to allow authorities to use the contractual process to promote the employment prospects of inner city residents. Honourable Members will note that Part II of the Bill"—
that is, the part we are dealing with now—
"does not contain such a provision relating to inner city residents. This is because it has subsequently become clear"—
clear to the Minister, but not to me—
"that European Community rules designed to ensure equal conditions of competition for public works and supplies contracts, rules which the Government fully support, do not permit the introduction of that type of measure into the contractual process".
Other Ministers have said the same.

What we need to take head on here is, as I see it, that the Government, the Secretary of State and other Ministers are with us in wanting to generate local employment. On 1st July, Mr. Kenneth Clarke said:
"Mr. Ridley and I are totally committed to the policy of using local labour and getting development to generate more local employment".
If that is the situation, our objectives are not the ends but the means. As people who are obliged and who are bound by EC rules and regulations, what we in fact have to ask the Government—who are anxious to encourage not just employment but the use of local labour—is this: what is it that is inhibiting them?

I have made reference to the various EC regulations, which I will not list. They are formidable. I have in my possession a legal opinion which was obtained by the Association of London Authorities on the impact of EC legislation on local labour clauses. There is a great deal written about it. I do not intend to quote from the document too extensively except for a part of the Opinion. I know that the Minister and his colleagues have a copy of it. I shall simply refer to the passage which is relevant for the purposes of my argument and which I consider to be germane:
"In my view it is quite clear that a contractual clause which requires the contractor to employ the entire labour force involved on a contract from within a particular geographical area (for example Liverpool) would offend the rules against discriminating against contractors from other Member States. On the other hand, a construction contract which required the contractor to employ at least 30 per cent. of the labour force from amongst unemployed persons within Liverpool would not, in my view, offend against the spirit or the letter of the Directives. Quite clearly, such a contractor, whether from Bournemouth or Brussels, may wish to recruit a proportion of the labour force locally or at any rate may have no objection to doing so."
I understand that there may be some observations to the effect that it is very difficult and very dangerous. We know the mood of the Government, which is to interfere as little as possible with those who are the recipients of ratepayers' money—that is, the recipients of contracts. The government view is that they should be left to get on with it.

The Minister should understand that there are others, not least those who serve on councils in inner-city areas and areas of high unemployment, who are not prepared simply to shrug their shoulders but who want to see if they can do something about the problem. Very often the argument will return to the effect that "even if we wanted to employ local labour, it is not of an adequate standard in skill or in other capacities". I can see the merit of that argument. The greatest shortages are not in prospective employees but in the quality of such employees. As an illustration I refer to the London borough of Haringey and the Broadwater Farm Estate. The Council is to be congratulated in this matter because when it was negotiating on the question of the work to be done on the Broadwater Farm Estate it had the legitimate desire to have as much local labour used as possible. The council and the contractor were able to work out a very satisfactory arrangement whereby the contractor was able to train locally unskilled labour to become skilled labour in order to carry out the contract.

I believe that that is a very fine and a very fair illustration of how contractors and large employers—recognising local difficulties and, more importantly, recognising the conscience of the local council—are asking, "How can we help each other?" What we are saying is that there is an obligation upon local authorities to do their best for local people. I give the Government credit for saying what they want to achieve is redevelopment, refurbishment and regeneration of the economy. There are circumstances, when one looks at the mix, where it will contain a high proportion of local people from ethnic minorities; some may also be disabled and in addition there may be women. What we are arguing is, it is legitimate to use any and every opportunity that we can.

The Opinion of Mr. Richard Allfrey from which I have quoted is in the possession of the Government. They are saying that that is insufficient and that they are not prepared to interpret the rules and regulations as Mr. Allfrey has said they can be interpreted. The Minister will know that the governments of other countries such as Holland and Italy are presiding over the operation of their local authorities by stipulating the employment of a reasonable number of local people—not the totality of the employees on the contract but a reasonable number.

I very much hope that the Minister will at least sympathise with the spirit of the amendment. Whether we are going to make more of the argument will depend upon what he is prepared to do about it at the end of the debate. I beg to move.

I very much hope that the Committee will not accept these amendments. Everybody in Committee has enormous sympathy with the plight of people who are unable to get a job in the areas of which the noble Lord, Lord Graham, is speaking. I believe that the whole country, and notably the Government, have been concentrating on trying to design schemes by which unemployed people can return to employment without distorting the local labour market. I believe we all understand that.

It would be a form of distortion of the local labour market to insist that, in tendering for local government contracts—for example, for school meals, local cleansing or street cleaning—it was essential or advantageous for the people tendering to take on unemployed persons. Surely the right way for local councils to reduce unemployment in those areas is to enter wholeheartedly into the job training scheme which is now growing and to enter wholeheartedly—as most of them are—into the youth training scheme. It would be helpful fully to favour the many measures which there are to help business start-ups in local areas, particularly those in relation to small businesses. Those government schemes are for the very purpose of helping the kind of small businesses which would then tender for local government work because they would have been helped to start up, become profitable and so to bid.

It is a complete negation of the whole drift of national policy for at least the past five years to suggest that the local labour market should be distorted in the way that the noble Lord is suggesting. I am sure that all Members of the Committee have very great sympathy with the aims of these amendments but this is quite the wrong way to go about the problem. The noble Lord said that it was not the aims of the Bill he was trying to get at but the means, but this is quite the wrong approach to employ. I believe that we should leave the Bill as it is in this respect and urge local authorities to back the schemes which exist in order to help the firms that the noble Lord has in mind.

I agree with my noble friend. No one would doubt or challenge the intentions of the noble Lord, Lord Graham of Edmonton, but he is making that frequent mistake of trying to translate good intentions into the pages of the statute book. Again and again such attempts end in muddle and confusion.

Perhaps I may refer to the argument that has been lurking around behind the Bill. As my noble friend said when he was dealing with the last amendment, there is the allegation that the Government are conducting a vendetta against local authorities. That is a rubbishy allegation. Those who make it go a long way towards undermining their own case. The point is this. A limited number of local authorities have taken to themselves functions and powers which are nothing to do with their duties. Their basic duties are to look after the interests of their ratepayers and those who live in their areas.

If this amendment were to be accepted by the Committee the consequence would be to make them into law enforcement officers, judges and, even worse, managers of the businesses of those with whom they seek to contract. That would be not only a time-wasting procedure but an utterly vain one, since it is very unlikely that any local authority has the detailed knowledge or the wisdom that would be necessary to oversee the details of the businesses of many hundreds of people who engage in contractual relations with them.

I very much hope that the Committee will have little sympathy with the amendment. The purposes are very respectable indeed but it would result in inefficiency, constant interference and increases in costs. It would be detrimental to the interests even of those whom this amendment sets out to help.

Whether the amendments are accepted or rejected—and I refer in particular to Amendment No. 93—I hope the Minister will be able to give some sympathetic encouragement to the concerns the amendments reflect.

One of the miracles of Sheffield borough over the past year has been the coming together of the council and local business interests in a determined endeavour to restore Sheffield to what it once was. It has been quite extraordinary to see the lion and the lamb sitting down together in such peace and amity.

One of the fruits of that accord has been a readiness by the employers to promise that jobs will be found for all school-leavers. It would be a tragedy if, as a result of this legislation, or a failure to interpret the legislation in a satisfactory way, while Sheffield was rebuilt the rebuilding was watched by the unemployed of our inner city. Whatever happens to the amendment I hope that we can be given some encouragement that that will not happen in the years ahead.

I too think it is a responsibility of this Chamber to be concerned about the unemployed, but I share the view of my noble friends on this side of the Committee that the amendment is not a solution to that concern. Nothing in the Bill as it is presently drafted invalidates the work going on in Sheffield as described by the right reverend Prelate. The co-ordination work done by local authorities with local commerce and industry will continue. If one couples with that all the work on the training front one sees that a great deal is being done to help those who are unemployed and without skills to gain the necessary skills to compete favourably for the vacancies.

It is a statement of the obvious to say that two kinds of people apply for vacancies: those who are already in jobs and those who are unemployed. It is also a statement of the obvious to say that if, by some quota system, the jobs go to the unemployed, some of the people who are employed will be rendered unemployed. The applicants in all these areas of work will be predominantly local; and the jobs will predominantly be taken up by those who are already doing jobs.

I refer to the collection of refuse, the cleaning of schools, old people's homes and other government buildings, catering work and ground maintenance. These jobs are predominantly done now by local people and many of those people in the public sector will keep those jobs because public authorities will win the contracts. If Cambridgeshire, where contracts go to local companies, is anything to go by, almost all the workforce will be taken up by the private companies who win the contracts.

We talked informally with those companies and asked them to give the jobs, on a first-come first-served basis, to those they considered to be appropriate to do the job. We must not do anything to invalidate what I think is the first principle of employing and recruiting staff. One must recruit the most appropriate people to do the work. That does not invalidate the desirability of local authorities doing their bit to see that the training schemes operate and that young people who are unemployed in their areas are made available for work.

I think that the solution suggested in the amendments is wrong. I hope that the way in which competition is sharpened in these areas will result not in artificial jobs but in real jobs both for people in work, who would be put out of work by contracts going from local authorities to private companies, and for the unemployed.

5.15 p.m.

I support the observations of my noble friend Lord Graham and the right reverend Prelate the Bishop of Sheffield. I agree with the noble Baronesses, Lady Carnegy of Lour and Lady Blatch, that training is essential for job regeneration in the inner cities. This is taking place in various schemes—small schemes in the main—for the regeneration of urban areas and the rebuilding of substandard housing. This shows that local labour can be trained.

My knowledge is based primarily on Birmingham. I do not have to explain to the Committee the kind of local labour that will be available in Handsworth. Local labour there has great difficulty even getting on to YTS courses. It is in the Handsworth area that the Minister will see at first hand the value of contract clauses, underpinned by public and private agreement. Part of the agreement is that local labour must be recruited and trained. A well-known building firm, Tarmac Ltd. has decided to come into the scheme. That is not a one-off spiv firm. On the board outside it is stated:
"This scheme is funded by the Handsworth inner city task force".
The task force has direct government sponsorship. The contract is to renovate the whole of one long street of houses that are in very poor condition, but the renovation must take into consideration the training of local labour.

Many people are actually living in the houses being renovated. Not only will this contract compliance make it a better area for those people to live in; it will also generate more money to be spent in an area where there are many local businesses—again satisfying the ethnic minorities living there. So the money spent will be rejuvenating their own businesses, too.

It is very easy for people to be sympathetic towards the unemployed. However, when one lives among them and sees the difficulties that they face, when one finds that they get into all kinds of trouble and come before the magistrates—I speak as a magistrate in Birmingham—one sometimes wonders what we are doing to help. This clause should recognise that there is a definite need for greater help regarding contract labour.

My noble friend referred to the EC directive. I am always interested in EC directives. For four-and-a-half years I was a Member of the European Parliament going from this House. We have all kinds of directives from the EC. The noble Baroness is not here; but how long did it take the Government to put the EC directive about equal pay for women into operation? People had to go to the European Court to make their case. It is the same with the EC directive on carers and the provision of finance for them. People had to go and fight their case because the Government were not putting directives into operation.

Now this directive is being hawked around. It has not been tested in the courts. I feel sure that it will be if the Government take this line, because the true interpretation of the directive—I have a different interpretation to that of my noble friend—is that it should not debar labour coming from any EC country to fulfil a particular contract. There is nothing in this clause that would debar people coming from Spain, Italy or Greece. What it says is that there should be some serious consideration given. As my noble friend said, Holland and other countries are trying to do exactly the same to help their unemployed. The noble Earl the Minister should consider this amendment very seriously.

I should like briefly to support the noble Baroness who has just spoken and to ask the Minister whether he can assure us that he is not doing anything in this legislation to discourage local authorities giving preference in appropriate cases to local labour. He will remember that the Secretary of State for Trade and Industry has published a White Paper of which he is very proud. On page 31 of that White Paper, he refers to the task forces which my noble friend has just mentioned. He tells us that the nature of these task forces in inner cities is to,

"pull together the combined efforts of a number of Government departments and work with the private sector and local government".
There follows a short passage on the appropriate objectives and methods of these task forces, which are representative of central government as well as local government. The White Paper then says on page 31:
"Experience to date has identified six main areas on which attention should be focused".
The second of those areas is,
"employment of local labour to provide more jobs for people in their own communities by tackling barriers to local recruitment".
and so on. Those are the words of the Secretary of State for Trade and Industry.

I am sure that this Government are so organised that the Minister on the Front Bench will not be in conflict with his noble friend. The Secretary of State for Trade and Industry is, after all, a Member of this House. Therefore, I hope he can assure us that he is in conformity with the principle laid down in the words I have just read out.

I was very interested to hear the right reverend Prelate the Bishop of Sheffield tell us that the public sector is now sitting down with the private sector in Sheffield. I remember, in a former incarnation, going along to Sheffield and trying to get exactly that to happen. I was told that it was the first time in 20 years that the local chamber of commerce had gone into the town hall to talk to the elected members. As the right reverend Prelate rightly said, this can only be a move very much in the right direction. I am sure that Sheffield will benefit, as indeed would all other authorities where the same pertains.

As regards the amendment, what is bound to happen in practice is that those who embarked upon this kind of contract would almost certainly employ local labour anyhow. If you think about it, can you imagine a situation where, for the kind of services that are the subject of this Bill, a company which wants to obtain a contract decided to bring in people from outside as against employing local people? The cost would be out of all proportion and would not make sense. In practice, that is what will almost invariably happen.

There is a world of difference between knowing what happens in practice and laying down some directives. That would most certainly lead, as my noble friend Lord Peyton said, to an impossible and intolerable situation. You cannot in practice have all these conditions laid down and then expect the companies concerned to do the job properly in a cost-effective way.

I am sure that it is not the intention of the noble Lord, Lord Graham, to try to insert situations which would lead to the private sector not being able to compete, because that is one of the effects of the long-term projections of what he proposes. In fact, that really would happen; and that is why I most certainly do not feel that it would be helpful to have the amendment in the Bill. Quite the contrary. I know that it is well meant. In practice, however, I have no doubt, as I have already said, that it will be local people who are employed, one way or the other—either those at present in work or those unemployed. But to lay this down as a requirement would be to defeat what the Bill seeks to do.

5.30 p.m.

It is clear from our very useful discussion that we all understand the motives behind the amendment moved by the noble Lord, Lord Graham of Edmonton. I am grateful to him for the detailed and comprehensive background that he gave. The noble Lord ranged widely over what had happened in the past to hopes of including some special provision and referred to remarks made on Second Reading in another place.

It is absolutely right that I should point out to the Committee that the stumbling blocks are the EC public works directives, 71/304 and 305, and the public supplies directive 77/62, which set out the criteria on which the contracting authority shall base the award of such contracts. Those criteria do not include the area of residence of the workforce.

The noble Lord, Lord Graham of Edmonton, referred to the ALA's counsel's opinion which was mentioned in Committee in another place. We have examined that carefully (we were grateful for the opportunity to do so) to see whether it changed our view, but we have concluded that it did not. Indeed, my honourable friend the Minister of State has written a fairly detailed, technical letter to the Members of the Committee that sat in another place. I shall ensure that copies of the letter are available in the Library. I think the noble Lord, Lord Graham of Edmonton, has already seen a copy.

Notwithstanding the legal advice that the noble Lord, Lord Graham of Edmonton, has received, our legal advice is that any conditions in contracts which require local labour to be used would constitute an obstacle to equality of treatment of contractors tendering from other parts of the Community. In his amendment, the noble Lord has attempted to qualify the Opposition's local labour provision by confining it to a reasonable percentage of the workforce from among the local unemployed. The Secretary of State would be required to define in regulations the type of area in which authorities could have regard to local labour issues. The noble Lord further attempts to qualify the provision by making it subject to the basic principles of abolishing discrimination inherent in the Treaty of Rome. But I must repeat that the local labour clauses, by their very nature, would constitute an obstacle lo equality of treatment.

As my right honourable friend the Secretary of State made clear during the Bill's Second Reading in another place, the fact that local labour requirements are unlawful in no way weakens the Government's resolve to ensure that inner-city residents share fully in the benefits flowing from new investment and new initiatives in the inner cities. I am grateful to the noble Lord, Lord Jay, for once again drawing the Government's commitment to the attention of the Committee.

Research has shown that employment growth in inner-city firms, assisted through the urban programme, for example, has been well targeted on inner-city residents. On average, 84 per cent. of new employees lived locally. Admittedly, the jobs did not require especially high skills and the majority needed only on-the-job training; but certain jobs need a particular skill, and to require in a contract that a quota of jobs must be given to local residents, with the rise in costs and the fall in standards which that entails, is impractical, as my noble friend Lord Bellwin has pointed out, as well, perhaps more importantly, as being unlawful.

Clearly, proper training is an essential component of many inner-city projects. We need to ensure that training is well matched to employers' needs and to develop the capacity of small local firms to win contracts. I share the right reverend Prelate's concern about this matter, and was delighted to hear what progress had been made in Sheffield. The right reverend Prelate knows full well the Government's commitment to the inner cities from the number and the coherent nature of the inner-city initiatives. I should like to remind him that within the various initiatives that have been undertaken by the Government, the aim is to raise skill levels so that local people are better equipped to compete for jobs and employers find that it makes sound sense to hire them.

The answer is not to have a blanket requirement that a certain number of jobs must be given to local people, but to ensure that those people are better trained and motivated to grasp the opportunities created by our various initiatives.

Before the noble Earl sits down, can he answer my question? Does what he has just said about local labour conform with the Secretary of State's statement in the White Paper that special attention sould be given by taskforces to the employment of local labour?

I can confirm that the Government's initiatives to which my right honourable friend the Secretary of State refers in the White Paper are designed to help local people, by training them to produce a better workforce and therefore to encourage firms to take them on and tender for the contracts for which we hope they will be able to tender under the Bill's provisions. However, what we cannot do, on our legal advice, is to write it in a binding contract; that is where the difficulty is.

Before the noble Earl sits down, I should like to ask him how the Handsworth inner-city taskforce complies with the reply he has just given to my noble friend? The Handsworth inner-city taskforce is the taskforce which was referred to by my noble friend. It is part local authority and part Government. It has contract compliance, as I said. I cannot follow the answer, with all due respect, that the Minister has just given to my noble friend Lord Jay. Perhaps I have misunderstood the Minister. Are the Government breaking what is called an EC convention with the Handsworth taskforce?

It would be wrong for me to comment on that case, because I have not been able to study it. However, I can assure the noble Baroness that I shall look into it now that she has raised the point. I must repeat to the Committee that our legal advice is that we cannot write a clause such as that proposed in the amendment moved by the noble Lord, Lord Graham of Edmonton, onto the face of the Bill.

I find the situation difficult to follow. The Government say that they wish to revive the inner cities. They also say that they wish to increase employment there. The amendment merely seeks to change the Bill, which now provides that a local authority cannot inquire into the composition of a contractor's workforce.

The amendment makes an exception, where the local authority is in an area with high unemployment, especially in the inner cities, to allow it to say that it would like a reasonable proportion of the workforce to be local. The noble Lord, Lord Bellwin, said that that might happen in any event. The Government keep saying that that requirement is illegal. I find that point difficult to follow for two reasons. The first is the reason that the noble Baroness, Lady Fisher, gave. Secondly, there is the example of the building in Birmingham. The Birmingham Convention Centre was built with 30 per cent. of EC money. There was a condition that 30 per cent. of the workforce should be local.

I cannot believe that the EC would have been a part-employer on something that it regards as illegal. Therefore I have great difficulty, especially now that I have seen and heard two different legal interpretations which suggest that is not illegal, in understanding why there is an insistence that the laying down of that condition is illegal.

It strikes me that what is in the back of the Government's mind is not that consideration, but that—the two noble Baronesses revealed the fact—anything, in their words, that distorts the labour market must be prevented. The illustration which the noble Baroness, Lady Blatch, used, does not hold water. We say that instead of a person coming in from outside to be employed, the unemployed people in the area should be used. When all is said and done, charity begins at home.

If one builds in an area and unemployed people there obtain work—the noble Baroness, Lady Fisher, illustrated this point—fewer people are unemployed; fewer people get into difficulties and there are fewer social problems. There is also more money and therefore one is building up the economy and the social fabric of the area. That is an important consideration. I am not sure that all the examples coming from the other side are non-commercial. I should have thought that the state of a local authority's area, resulting from employment gained through the contracts it has entered into, would be a commercial consideration.

I cannot see how the consequences of the contract are not commercial. Of course they are a commercial consideration for a local authority. Therefore, if the Government say that they want to tackle the inner city problems, they want to increase employment in the inner city areas, I cannot see why they resist this amendment.

Perhaps I may put it in a nutshell. The difficulty which the noble Lord, Lord Pitt, faces is the question of a legal opinion. On the one hand, the noble Lord, Lord Graham of Edmonton, as a client of the ALA, has asked for a legal opinion and that legal opinion says that it is in order. On the other hand, the Government as a client have sought a legal opinion. The legal opinion which they have received is that it is not legal. As a client one may either disregard one's legal opinion or accept it. We accept our legal opinion that the amendment proposed by the noble Lord would be illegal.

I should like to know to what depth we are probing. For example, I also saw a letter from the director of the department in the EC which does not suggest it is illegal. Therefore, I find it quite difficult. If the Government are so adamant about this, will they put the legal opinion which they have received on the table in the Library so that we can see it?

We have had a very good and well informed debate, even though not everyone will have had the benefit that the Minister has had of reading the documents. All the observations have been well meant and the concern is genuine. But if it comes down to a legal opinion, perhaps I may ask the Minister whether he has had the benefit of the advice of the government Law Officers. If we are faced with a legal opinion by someone on one side and a legal opinion by someone else on the other side, we are involved in an interpretation. The Government say they are prohibited from doing what we desire because of a directive. I would hope that part of the panoply of advice which the Government have had is the advice of their Law Officers. Genuinely and without malice, I think that this is an area which needs to be tested somehow or other. I am conscious that I am by no means a legal man, and I think the Minister ought to give us some indication.

Perhaps I may quickly deal with some of the specific points raised. The noble Baroness, Lady Carnegy of Lour, said that what we would be doing is to distort the local labour market. She is quite right; it is the wish of some councils to distort the local labour market so that more of their local unemployed are employed rather than people from some other area.

Those who are in local government will understand that local councils are under severe pressure from local people, local groups, local organisations. They are saying, "We want more of our people involved". I understand the reticence of the Government or of anybody else about doing what is suggested here, but the noble Baroness, Lady Blatch, gave us the Cambridgeshire experiences. We have had the Sheffield experiences, the Birmingham experiences and inner London. With due respect to the noble Baroness, there are big differences in both the quality of the problems and the numbers between places like Cambridgeshire and Southwark, Hackney, Sheffield etc. There are differences of quality. I am not making any disparaging remarks. The people on whose behalf I seek to articulate advise me and I can sec why they are motivated in this way. They have the obligation that they must do something and they believe that this is a way of doing it.

I accept that the Minister has told me that it is not possible. I hear what he is saying but I do not believe that it is not possible. if what we are told is that there are things which he wants to do and which we want to do to make local people work and if there is some blocking mechanism (for instance, the EC says that you shall not take a certain step), then how do you get round it? How do you change it? In the meantime, the unemployed people of Hackney, Southwark and Sheffield are sitting there watching the work which they might have been able to do being done by other people. These are people who genuinely want to do the work. That is one of the dreadful circumstances.

The noble Lord, Lord Bellwin, talks about practice. It is likely that most of the labour employed on a big contract is local labour because that is cheaper than busing somebody in from somewhere else. That is a fact. But what the local people want from us and from the Government, from legislation, is that due concern should be paid to this. Otherwise we shall have the situations illustrated by the right reverend Prelate where the rebuilding of Sheffield was very often watched by the unemployed of Sheffield who could have done the work themselves. I take the point that not all unemployed people can do the work which is required.

Finally, the Minister said that the Government were not prepared to have blanket, laid-down percentages. With great respect, the noble Earl has not read the amendment. We are not talking about blankets, we are talking about a reasonable percentage which might be 5, 10 or 25 per cent. It is a question of negotiation. So "reasonable" is open to interpretation. I very much regret that the Government are not prepared to say anything kinder than they have said and I intend to test the opinion of the Committee.

5.46 p.m.

On Question, Whether the said Amendment (No. 83B) shall be agreed to?

Their Lordships divided: Contents, 61; Not-Contents, 142.

DIVISION NO. 2

CONTENTS

Ardwick, L.Kissin, L.
Aylestone, L.Listowel, E.
Basnett, L.Llewelyn-Davies of Hastoe, B.
Blease, L.Lockwood, B.
Bottomley, L.Longford, E.
Brockway, L.Molloy, L.
Buckmaster, V.Mountevans, L.
Callaghan of Cardiff, L.Mulley, L.
Carmichael of Kelvingrove, L.Nicol, B, [Teller.]
Carter, L.Northfield, L.
Cledwyn of Penrhos, L.Oram, L.
Cocks of Hartcliffe, L.Paget of Northampton, L.
Cudlipp, L.Phillips, B.
Dean of Beswick, L.Pitt of Hampstead, L.
Donoughue, L.Ponsonby of Shulbrede, L. [Teller.]
Dormand of Easington, L.
Elwyn-Jones, L.Prys-Davies, L.
Ennals, L.Ross of Marnock, L.
Ewart-Biggs, B.Shackleton, L.
Fisher of Rednal, B.Sheffield, Bp.
Gallacher, L.Stewart of Fulham, L.
Gifford, L.Stoddart of Swindon, L.
Graham of Edmonton, L.Strabolgi, L.
Hatch of Lusby, L.Underhill, L.
Houghton of Sowerby, L.Wallace of Coslany, L.
Hughes, L.Wells-Pestell, L.
Irving of Dartford, L.White, B.
Jay, L.Williams of Elvel, L.
Jeger, B.Willis, L.
John-Mackie, L.Winterbottom, L.
Kilbracken, L.Ypres, E.

NOT-CONTENTS

Abinger, L.Carnock, L.
Airedale, L.Charteris of Amisfield, L.
Aldington, L.Colwyn, L.
Allenby of Megiddo, V.Cornwallis, L.
Amherst, E.Cottesloe, L.
Ampthill, L.Craigavon, V.
Arran, E.Craigmyle, L.
Attlee, E.Cullen of Ashbourne, L.
Auckland, L.Davidson, V, [Teller.]
Balfour, E.Denham, L, [Teller.]
Beaverbrook, L.Denning, L.
Belhaven and Stenton, L.Diamond, L.
Bellwin, L.Dilhorne, V.
Beloff, L.Dundee, E.
Belstead, L.Ellenborough, L.
Bessborough, E.Elliot of Harwood, B.
Blatch, B.Elton, L.
Blyth, L.Ezra, L.
Boyd-Carpenter, L.Faithfull, B.
Brabazon of Tara, L.Falkland, V.
Brookeborough, V.Ferrers, E.
Brougham and Vaux, L.Ferrier, L.
Broxbourne, L.Foley, L.
Butterworth, L.Fortescue, E.
Caccia, L.Fraser of Kilmorack, L.
Caithness, E.Gainsborough, E.
Cameron of Lochbroom, L.Gisborough, L.
Campbell of Alloway, L.Grantchester, L.
Campbell of Croy, L.Grey, E.
Carnegy of Lour, B.Gridley, L.

Grimond, L.Nugent of Guildford, L.
Hailsham of Saint Marylebone, L.Onslow, E.
Orkney, E.
Hampton, L.Orr-Ewing, L.
Hankey, L.Pender, L.
Hanworth, V.Pennock, L.
Harlech, L.Penrhyn, L.
Harris of Greenwich, L.Peyton of Yeovil, L.
Havers, L.Porritt, L.
Hesketh, L.Prior, L.
Hives, L.Rankeillour, L.
Home of the Hirsel, L.Reay, L.
Hooper, B.Ridley, V.
Hylton-Foster, B.Ritchie of Dundee, L.
Jenkin of Roding, L.Rodney, L.
Johnston of Rockport, L.Romney, E.
Joseph, L.St, Davids, V.
Killearn, L.Saltoun of Abernethy, Ly.
Kimball, L.Sanderson of Bowden, L.
Kirkwood, L.Savile, L.
Lane-Fox, B.Seear, B.
Lloyd of Hampstead, L.Selkirk, E.
Lloyd of Kilgerran, L.Shaughnessy, L.
Long, V.Skelmersdale, L.
Lucas of Chilworth, L.Stockton, E.
Mackay of Clashfern, L.Strathcona and Mount Royal, L.
Mackie of Benshie, L.
Margadale, L.Strathspey, L.
Marley, L.Swinfen, L.
Mayhew, L.Teynham, L.
Merrivale, L.Thomas of Gwydir, L.
Mersey, V.Thorneycroft, L.
Meston, L.Trafford, L.
Monckton of Brenchley, V.Trefgarne, L.
Mottistone, L.Trumpington, B.
Mowbray and Stourton, L.Vaux of Harrowden, L.
Munster, E.Ward of Witley, V.
Murton of Lindisfarne, L.Westbury, L.
Napier and Ettrick, L.Whitelaw, V.
Nelson, E.Wise, L.
Nelson of Stafford, L.Wolfson, L.
Norrie, L.Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.55

[ Amendments Nos. 84 to 89 not moved.]

moved Amendment No. 90:

Page 15, line 26, leave out paragraph (e).

The right reverend Prelate said: This is a simple issue. When I became a bishop I resolved to keep my prejudices in good repair. I have succeeded in doing so. I still will not buy French apples. We buy English Class 1 apples or we go without. I try similarly to avoid eggs from battery hens, but without much success. I try to avoid South African oranges and other South African goods. I am not an economist but I am not actually convinced that what I do or do not buy makes that much difference to the economy of South Africa. However, I believe that it makes a big difference to me.

The old books that we used to use for training people in making confessions used to ask them whether they had shared in another's sin. I care with what I buy. I think that I therefore have the privilege of not sharing in another's sin. I consider that that is important. I believe that that is important not only for individuals but also for local authorities.

In the many speeches that I have listened to on this Bill the thing that I feel is most unsatisfactory is the view of the Government—or their current view, as I cannot really believe that it is their only view—that a local authority is simply about providing local services for local people at the cheapest price. They seem to believe that local authorities are about emptying dustbins and that is it. That flies in the face of contemporary experience and even more of history. We still see in our towns and cities our councillors, the mayor and the corporation—I use an old-fashioned phrase deliberately—as in some ways representing our community. They speak for our town, and to suggest that they should not have a moral view on matters seems to me lamentable, untrue and unjust.

If that were true, who would be prepared to share in such an arid exercise as simply providing local services for local communities at the cheapest rate? Local government surely is more than that. It always has been and, I dare to hope, always will be. I am sorry to use the name of Sheffield again, but I am rather proud of being the Bishop of Sheffield and equally proud of not being a native Yorkshireman; but that is another matter. Sheffield, like many other northern towns, played a part in the slave trade. If I have got my history right, I remember Manchester's determination not to buy cotton from the slave states in the civil war. Those kinds of decisions seem to me praiseworthy of the local authority concerned and to be proper moral decisions for a local authority to take whether or not we agree with particular examples.

The words that I want to see taken out of this Bill deny local authorities that right to make a moral judgment. I do not really mind whether the 162 authorities who at present exercise a boycott—not the tiny handful of which the noble Earl has spoken—are right or wrong. It is their right to do so. That seems to me a moral issue and a proper exercise of a moral conscience by a local authority.

That is a general reason why the matter is important. However, there is a particular reason. In many of our cities there is a significant population which is not white Anglo-Saxon. Their feelings in those matters are particularly and understandably strong. They have a determination and a will that they shall not be forced unwittingly, through council purhasing power, to support South Africa. If we are to take seriously the problems of racism in our cities, it would be outrageous to take steps that seem consciously to make things worse.

Without challenging the whole purpose of the Bill, I beg the noble Earl and the Government to think again about those words and to leave them out of the Bill so that the same moral judgment which has been given to individual citizens may be given to local authorities as well. I beg to move.

Perhaps I may indicate to the Committee, before I put the amendment, that if it is agreed to, Amendment No. 91 cannot be called.

I support the amendment. My name does not appear on the Marshalled List as regards the amendment only because the method that has been chosen to deal with the matter was deemed best as reflecting the wide concern felt in all parts of the Chamber. Perhaps I may mention that the right reverend Prelate the Bishop of Manchester wishes to express his regret at not being present. He is regularly here but urgent business prevents his attendance today.

The existing paragraph (e) is confusing in that it combines two very different issues in relation to a particular company—a possible boycott of the company's products, because of its links with, for example, South Africa, or a boycott of the products of a particular country. Few local authorities have implemented boycott actions against companies simply because of their links with South Africa. However, 162 local authorities of all political persuasions have implemented boycott action against products from South Africa. Therefore the consequences of enacting paragraph (e) as it stands would be extremely serious.

The effect of the amendment would be to allow local authorities to continue to implement purchasing boycotts of South African products. Therefore, the amendment would go some way towards meeting the concerns of local authorities in that it would at least allow them to continue boycott policies of South African products although it would make illegal boycott action against Shell, for example.

Support for the amendment does not necessarily imply support for sanctions or for a British consumer boycott of South African products. The issue is that of the right of local authorities to democratically choose to ban South African products, should their constituents so demand. There will be no freedom of choice for those individuals and organisations who will be forced to purchase South African goods.

I take a diametrically opposed view to that expressed by the Prime Minister when she indicated that sanctions do not matter. I ask the Committee to draw a comparison. A short time ago the Prime Minister visited the African continent and was extremely well received there. It was indicated in the press that the Prime Minister was going to demand the release of Nelson Mandela. My view is that our particular stance in an international sense in not supporting sanctions—the Bill represents a minor form of that—is one of the reasons why Nelson Mandela is still in gaol. I support the amendment.

One understands entirely the generous emotions that move the right reverend Prelate in proposing the amendment. However, with great respect to him, that approach is founded on two fallacies. The first fallacy is that by operating sanctions against South Africa we are in some mysterious way going to improve the condition of the non-white races in South Africa. How one improves their condition by making them unemployed is not a thing that I have ever quite worked out. Why it should be thought that by diminishing the employment-giving capacity and the wealth-producing power of South Africa to perhaps a considerable degree we shall induce changes which otherwise will not take place seems to me a quite extraordinary idea.

Anyone who has been in South Africa and knows in particular the Boer element of the white population there knows that in many ways they are the toughest and most obstinate people in the world. If we try to apply pressures of this sort to them, we are going to drive them rather strongly in the opposite direction.

It is a real illusion to think that by sanctions of that sort the non-white population of South Africa—one accepts that the country has enormous problems—will be helped. I say that with great respect. The effect would almost certainly be the opposite.

However, that is not the point of the amendment. The question of sanctions is a proper one for central government to consider. Personally I happen to agree with the view that the Prime Minister and her administration have taken. I fully accept that other people may urge that another line be taken by the British Government. However, it is certainly a matter for the British Government to decide, aye or no, whether imposing sanctions will do any good. It is nothing whatever to do with local authorities. They are not concerned with international affairs. They have a considerable and important job to do in looking after the welfare of the people in their areas, organising local services properly, helping the good administration and the good trade, if possible, of the local area for which they are responsible.

It is one of the harmful aspects of local government nowadays that many local authorities seem to think that dabbling in international affairs is their business. We get all the fantasies of the declaration of nuclear-free zones. I am bound to say that I have often speculated with some amusement on the picture in the planning rooms of the Kremlin where one would apparently imagine that—

If the noble Lord will listen—not one of the things he is best at; he is much better at talking—he will see that this is highly relevant. If he does not see that it is relevant, then he does not understand the amendment.

To suggest, as the local authorities are doing, that, for example, with the nuclear-free zones to which I was referring, they are doing something which they can or ought to do and which will influence those in the Kremlin one jot or tittle, is wholly off beam. They are wasting their time, energy and the money of the people who have elected them. I suggest to the Committee that it is not the business of a local authority to indulge in discrimination against goods from any particular country, whether on political or other grounds. To do so is to forfeit their very proper independence when they are dealing with local matters.

It must also be remembered that, although a local authority may have a political majority one way or the other, it speaks for all the people in its area. In any local authority area that one cares to name, though there may be a large and vociferous majority—a Labour majority in some—there are also a number of people who think otherwise. In pursuit of its external political objectives the local authority has no right to do anything which could adversely affect those of its constituents who do not share its views. The very fact that noble Lords opposite do not seem to accept that view is the most vivid illustration that I have seen for some time of the reasons why certain local authorities controlled by the hard Left of the Labour Party have done more harm and damage to the interests of the people they represent than has any other single factor.

I hope that the Committee will keep clearly in mind that no matter what view is taken on sanctions, on international affairs, or on South Africa, that has nothing to do with the case for this amendment. It is simply not the business of local authorities and the Bill is absolutely right to make that clear.

I should be grateful for some guidance. I think that I may be speaking to the wrong amendment. My amendment quite deliberately says nothing at all about sanctions. It is about the purchasing power of the local authority to buy what it wants to buy—to buy British if it likes. It is quite untrue that I have been advocating sanctions, as the noble Lord has just said. I might or I might not, but that has not been my concern today. My concern has simply been to say that the local authority has a moral right to buy British or whatever else if it so wishes, and it is misleading to say that the authority is interfering in international affairs.

The right reverend Prelate cannot get away with that. He spelt out very emotionally and very movingly that the question of where a local authority bought from raised moral issues and that he for one took the line that one should not buy, on moral grounds, from particular countries. That was the whole point of his speech.

With great respect, it did not have any other point. The right reverend Prelate cannot now stand up and say, "Of course, this has nothing to do with sanctions". It has everything to do with sanctions, as the right reverend Prelate knows. I think that he would come better out of this debate if he frankly admitted that.

I find myself in agreement with the last words of the noble Lord, Lord Boyd-Carpenter. Of course this is a political amendment. This amendment suggests that local authorities should have a right to impose sanctions on another country, and that is an act which is plainly one of foreign policy. Equally, I should go on to say that local authorities do not have available to them the information which is necessary to make worth while their views on a question of foreign policy. They have no business doing so. Even less do I feel that it is the business of the Church.

I object to this amendment partly, as I have indicated, because of its provenance, which I do not like, and partly because of its substance. Its purpose is to injure South Africa. I do not want to injure South Africa. It is part of a "down with apartheid" chant. I will join in that when I can find an alternative and better form of government, rather than simply trying to abolish a system which declines to impose a single culture on two peoples who have evolved differently, both physically and culturally. I say, "Show me a better".

So far as I know, government has three primary duties. The first is to feed the people. Alone in Africa—or rather negro Africa—South Africa feeds its people. In every one of the other African states the governments are at the moment dealing with the problems of famine, which result—

No. The famines result largely from bad government and were certainly never even considered in colonial days.

No. I have heard the noble Lord's views too often—and mine have been heard too.

The second duty of government is to employ the people. In negro Africa there is not a single country, other than South Africa, where the people are anything like fully employed. South Africa employs not only the whole of its own working population but a high proportion of the working population of its neighbours, so that a breakdown of the South African economy would be a disaster not only for its own black population but also for the black population of its neighbours.

Finally, the third task of government is to protect the people and ensure their safety in the streets and in the home. For two centuries South Africa achieved that. It was a peaceful, safe country. It is less so today because of the intervention of terrorists—mostly from across the border.

Will the noble Lord give way? This is a problem (is it not?) of fighting against the evil of apartheid? Does the noble Lord denounce apartheid or does he not?

I have just been talking about apartheid, which has achieved the three main duties of government in Africa where all other forms of African government have failed.

I support it, certainly. I would rather have the best available government than no government at all, which is what the anarchists are looking for. That is the terrorists' objective. It would mean appalling chaos if the terrorists won in this field.

Does the noble Lord agree that the subject of the debate is the powers of local authorities in this country and not the merits of particular forms of government on either side of the world?

The question in this debate is a very simple one: shall local authorities be authorised to impose sanctions on South Africa?

That concerns what is happening in South Africa. Of course what I am saying is in order. There are lots of other people who are interested in this matter.

So far as concerns safety, South Africa was safe until it hit this terrorist problem. I should also like to remind the right reverend Prelate that that terrorism was to some considerable extent financed by the World Council of Churches, whose contribution to peace in South Africa has not been very good.

That happens not to be true. I do not think that that remark about the World Council of Churches should be repeated.

We can look at the facts in detail. However, I am glad that that activity is repudiated.

The effect of sanctions can only be this. They will either not work, or, if they work, there will be more idle, unemployed black men and more hungry black women and children. That is the sole effect of sanctions. I do not find them a particularly Christian approach. Even if I agreed with them, I would object very much to a foreign policy being introduced by the local authorities, who have a very full job in their own localities and should stick to it. I thought that we had enough with County Hall and Ken Livingstone and the IRA. We do not want that sort of thing in local government.

I repeat this because this intervention by the Church is highly political. I believe that the universal experience of history has been that the worst of all known forms of government has been theocracy. Where one has had theocratic government at war the atrocities committed by theocratic governments have always been even worse than was acceptable at that period in history. I do not feel that in a lay parliament there is any place for priests, but if they come here they should steer clear of trouble. Not since the days of the prophet Samuel and the Amalekites has the Church been less than brutal in the conduct of war. war.

Before the noble Lord finishes his speech, will he correct one error of fact which I have pointed out to him before? It is not the case that South Africa is the only African country which can feed its people. Zimbabwe has been exporting maize for the past five years to its neighbours.

Zimbabwe has had three famines to deal with and has come to us and asked for help.

I should not like it to be thought that in order to oppose this amendment it is necessary to carry admiration for the apartheid regime in South Africa to the extent that the noble Lord, Lord Paget, has done. The trouble is that, abhor that regime as we must, we do not know how to improve the situation there. What is being urged upon us by the so-called anti-apartheid movement is counter-productive and bound to be so because the refusal to buy goods—whether one calls it sanctions or not—is of little moment. The refusal to buy goods, as has been said by other noble Lords, can result only in unemployment, whatever country one applies it to.

We are always quite rightly told by noble Lords opposite that unemployment is a scourge, that unemployment is the source of many of our social troubles, and that unemployment is the source of much crime. In the last amendment we were asked to look at the possibility of remedying that situation in our own inner cities. I cannot see why noble Lords, and the right reverend Prelate, do not extend their concern for unemployment by refraining from trying to create unemployment in South Africa. Why should it be moral to denounce unemployment and to fight it in this country but immoral to try to flight it elsewhere? That seems to me to be the moral argument.

If the right reverend Prelate believes that it is moral to try to create unemployment in a foreign country which is bound to lead to civil disturbances and to bloodshed, his morality will end up by his having blood on his hands. I do not think that that is a guilt this Committee would wish to share.

Like the right reverend Prelate, I urge the Committee to recognise that this is not a debate about sanctions. That is not the central issue of this amendment. We have argued about sanctions many times. There are differing views on different sides, as the noble Lord, Lord Boyd-Carpenter, has pointed out. This is not the time to argue about them. The object of sanctions is not to create unemployment. It is not to damage the South African economy. The object is to reduce the power of the South African regime to oppress the majority of its own people. That is the sole purpose of sanctions.

This amendment goes much wider than the question of sanctions. It relates to the right of people within their local communities to take decisions about those communities. We have heard many times from the Conservative Party its plea for decentralisation, for giving people the power to order their own lives. That is what this amendment is about.

If one takes the argument of the noble Lord, Lord Boyd-Carpenter, to its logical conclusion, when he says that there are people within local authorities who do not approve of the action of the authorities, there are also people in this country who do not approve of the actions of the national government. That is no reason for that national government not to take a decision on a policy, so long as they can command a majority.

Will the noble Lord allow me to intervene? The distinction is this. In the case of a local authority the action taken—probably approved by a majority but disapproved by a minority—is outside the scope of that authority's function. In the case of central government, that is not so.

I do not accept that for one moment. As the right reverend Prelate said, a local authority has a moral obligation as well as a set of physical obligations. Any time a local authority exceeds its own authority it can be rejected, just as a national government can. The local authority represents the will of the majority of the people who have elected it. There are many of those people who feel, like the right reverend Prelate and myself, that it is immoral to continue to buy South African goods. There are many who disagree. That is a matter which must be decided at election time, not by this Chamber and not by this Parliament.

If local authorities are to have any kind of power within their local communities and are to be meaningful in representing the views of their local communities, it is wrong for Parliament to take away the power that has been given them by the majority of their electors. That is the issue that we are debating tonight. It is not a question of sanctions. That issue has entered the debate, but there are many others.

This Government imposed sanctions, not against South Africa but against Poland. This Government are on record as being in favour of sanctions. But, again, this is not the issue. The Government could take that decision because they were a majority government. A local authority can take this decision because it is a majority local authority. When one has banks and commercial institutions, are we to prevent them from withdrawing from South Africa? Many of them have done so.

If they can do so—and they are not elected—then surely it is wrong for Parliament to take away the right of an elected local authority to represent the views of the electors until such time as those electors decide that they will throw that authority out. That is the issue on which we are voting and that is the issue which we should keep right in the forefront of our minds when we decide how to vote.

6.30 p.m.

The effect of the Bill as drafted is simply to take away from local authorities one set of grounds for determining where to award commercial contracts. The effect of either of these amendments is to restore all or part of those grounds. Those grounds include the grounds that the local authority does not like the political regime of the originating country of some goods or services used by the contractor. That is a general statement, not a statement about a view of the political regime in any one country in the world, whether it is South Africa, Poland or Russia. It is a pity that the debate has become polarised about one possible consequence of adopting the amendment.

I seek simply to draw the attention of the Committee to two things: first, since we have chosen to concentrate on that country, South Africa, and to regard the amendment as a means of enabling local authorities to bring pressure on South Africa, we should note that history shows that even when such pressure is applied systematically by countries such as our own and other great economic powers, it does not have the effect intended and the result of the Government's banning of imports from what was then Southern Rhodesia and is now Zimbabwe is a diversification and strengthening of the economy of that country.

The other end of the operation is more attractive. If a system such as apartheid is detested with the force which many of us feel and which I share, it is thoroughly agreeable to be able to say things and, more particularly, to do things which appear to be hostile to it. It makes one feel better, but it does not make the other people feel worse. Therefore I do not think that the argument that has so far been addressed in favour of the amendment is persuasive, except in so far as it would enable us to feel better.

Is this a proper way to make ourselves feel better? I return to the main issue: what is the proper function of a local authority? Is it to provide goods, services and local administration in the interests of the local population or is it to express a supposed collective view about something going on outside this country about which there is never unanimity? It seems to me that the institutions of this country are constructed to enable the national view to be effectively expressed and the national economy to be effectively advanced, protected or deployed against other regimes. Given that that deployment by the whole of the United Kingdom against Zimbabwe, as it now is, was ineffective, it does not seem to me to be likely that the deployment of Bootle or Manchester against South Africa will be any more effective. I do not therefore think we discard anything of any great use in the legitimate and right battle of international opinion against the repugnant regime of apartheid.

The right reverend Prelate has suffered many shrewd blows in this debate, some of them not deserved or justified, and has narrowly escaped responsibility for the Crusades in the process. I hope he will not feel that I am abandoning him in a just cause when I say that I could not on the grounds that 1 have heard support him on the amendment, though I applaud his view of the system of which he has spoken.

I was born in South Africa. I abhor apartheid. I wish to make absolutely clear that I know what it means for I have experienced it. Secondly, I have been a chief officer in a local authority. When I was a chief officer it was my role in that authority to serve the people of the area where I worked. I was first a children's officer and then I became director of social services. I was responsible for the delinquent, the homeless and the difficult children of the city. If it served those children well to have oranges from South Africa, oranges from Spain or oranges from the South of France, I chose the best oranges because I was responsible for giving the best service to the people in my area.

I make it clear again that I abhor apartheid and have cause to do so, but I do not support the amendment because I believe we have strayed right away from the Bill.

The debate is about the powers that the local authority should have. We must debate it in the context of the duties imposed on a local authority. There is one duty which has not been mentioned recently and that is the duty under Section 71 of the Race Relations Act 1976. It is referred to in the next clause of the Bill, Clause 18, in these terms: that local authorities shall have a duty:

"to have regard to [the] need to eliminate unlawful racial discrimination and promote equality of opportunity, and good relations, between persons of different racial groups".
It is in this context that the existing powers of local authorities to take certain limited actions to oppose the apartheid regime of South Africa are exercised. Let us not forget that racism, both in South Africa and in this country, is a live issue exercising the inhabitants of many, many cities in our country. People, black and white, around our cities are crying to local authorities to give a lead in fighting racism.

One of the inevitable implications of that is that people expect their local community leaders to give a lead in opposing the one single remaining racist government, that is to say the Government of South Africa. It is in that context that at present it is lawful for local authorities to take certain actions in their purchasing and contracting functions. Indeed they have a duty. If they think that the improvement of race relations is promoted by taking certain actions against apartheid, it is their duty to take those actions.

They have a duty which can conflict, however. That is a fiduciary duty towards their ratepayers. It is not lawful for local authorities to throw away money in pursuance of something like apartheid. They would be up before the courts at once if they did and they are advised very strictly on that. It is a limited power to take certain action on certain functions. They can take such action in the arts, on sport, in twinning, promoting lectures and conferences, and to a limited extent they can and should be able, if they wish, to promote that function of good relations by their conditions in purchasing contracts, provided that it can be done without betraying that fiduciary duty.

The amendment seeks to maintain that position. If leaders of our local communities are prevented by law from thinking about things, from giving consideration to matters which are burning concerns to large numbers of the electorate, then they are being prevented from exercising a very important democratic function. We are not talking about money being thrown away because that would be illegal, but we are talking about allowing local government to give its lead in a fight which now and over the coming years will concern the world more and more: the fight against the remaining racist regime in South Africa.

I should like to support what has been said by my noble friends Lord Elton and Lady Faithfull. Despite what the noble Lord, Lord Gifford, said, the prime function of local authorities is to provide the highest possible level of service at the most economic cost, and, quite rightly, we are constantly being reminded of that by noble Lords opposite. If we are suggesting—as the noble Lord, Lord Gifford said—that even if we disadvantage the people whom the authorities exist to serve by following a cause, however worthy it may be, that is all right, I say that that is not all right.

Many functions have been lost to local government in recent years precisely because they insist on meddling in national matters which are not their concern. Local government's powers are given by Parliament, which sets down those powers. It is only in the past 10 years that it has moved away from the consensus that previously existed among all parties. As were many noble Lords in the Committee, I was part of that consensus. We knew that we worked within the parameters laid down by national government. Governments must govern and governments set down the powers.

I maintain that it is wrong to say, "We shall not buy this product from this particular company because they are involved with another country, even though that disadvantages our local people". That may not have been the original intention of the movers of this amendment, but it is the effect of it. It is contrary to what local government is about. The more we debate this Bill, and future local government Bills, the more we shall try to take the line that local government is entitled to move away from issues and the more I shall try to point out the purpose of local government. It is to give local people the best level of services at the most economical cost. We should stick to that purpose, because that is what it is about. As we depart from that, nothing is more sure than that one function after another will be eroded and taken away. It happens all the time and it will continue to happen until we return to the basic principle. That is what the Bill is about.

We on these Benches view this clause with alarm and we wholeheartedly support the amendment put forward by the right reverend Prelate. We support the amendment because we consider this to be another attempt to draw away from the ordinary citizens of this country the ability to express their moral concerns, and to take from local government the ability to reflect the moral concerns of ordinary people and take them to the centre.

Other noble Lords have expressed the view, with which we on these Benches agree, that one of the prime functions of local government is to seek the best possible value and to take the best possible commercial measures to achieve that. It is perhaps characteristic of our modern life that, as we become more efficient, progressive and able to master production and become better housekeepers, we lose sight of our moral responsibility to express ourselves as individuals. The best way in which individuals can express themselves is through local government because it is the closest to the way people feel and think.

We consider the issue of South Africa to be irrelevant, although we feel strongly that one of the most heinous crimes in world society today is the apartheid regime. There are other areas which, in other times, may require a moral stance of some kind. The issue does not concern South Africa alone, and I believe that we are taking a short-term view in concentrating on that. Many people in this country, perhaps the majority, would like to express themselves as regards South Africa. In 10 years' time noble Lords on the other side of the Committee may wish to express a moral view more strongly than noble Lords on this side of the Committee. Times may change.

We consider that people have an inalienable right to express their moral feelings through their democractically elected representatives at local government level, rather than assuming that it is the business of central government to take care of ordinary people, as the noble Lord, Lord Boyd-Carpenter, suggested. It may be the duty of central government, but who is best placed to do it? I suggest that it is the local authorities, particularly those which have a large ethnic population within their area. Those people feel strongly and emotionally because they have had closer contact with the kind of oppression and attitudes that one finds today in racist South Africa. The same may apply to other groups of people, in respect of other regimes, in other parts of the country where people have come to live and become part of our country.

We feel strongly that this is a damaging attack on the cohesive moral power of our community. That is important to us on these Benches and, I hope, to other Members of the Committee. I hope that the right reverend Prelate will be supported in this amendment which he put forward so cogently.

6.45 p.m.

I should certainly like to hear what the Minister has to say about the amendment. I believe that few Members of the Committee would disagree with what the noble Lord, Lord Bellwin, said about the purpose of local government. Equally, I believe that no one would disagree with the noble Viscount, Lord Falkland, in his attitude towards local government. It seems to me that the two views are complementary and I do not know why we are arguing about the rights of local government in this matter.

In the Second Reading debate on this Bill I replied for the Opposition and I should like to remind the Committee of what I said. There are certain countries from which I do not wish to buy certain products, particularly where there is sweated labour. As far as I am able, I shall avoid doing so. For that reason I always buy a car which has been made in Birmingham. That is my preference and I do not want anyone to take it away from me. This clause will remove that right.

I should like to look at the matter positively. So far as possible I want to give contracts to firms which can provide the decent conditions, prices and rates: to British firms making British goods. For that reason, I supported the "Buy British" campaign. Viewing the issue from a positive angle, surely a local authority should have the right to say that it will purchase materials or components from firms in this country where they are made under proper working conditions, at proper prices and with proper delivery. Let us bring the issue hack to the positive side and not concentrate solely on the question of South Africa. As a citizen, I want to do my best for the local people and I want my local council to be able to do that. The Committee has heard that 106 councils prefer to do so and if the Committee does not remove these words from the Bill it will be taking away that democratic right from 106 local authorities.

If I correctly sense the mood of the Committee it may be that I should respond at this stage. The noble Lord, Lord Dean, said that he was not a signatory to this amendment. I believe that he is a signatory to the amendment which we are discussing, although he is right in saying that he is not a signatory to the amendment tabled in the name of the right reverend Prelate which is linked with it. Of course he is a signatory to Amendments Nos. 96 and 97, which are linked.

Much has been said about sanctions. May I simply emphasise that this Government condemn apartheid? We believe that sanctions only serve to harden attitudes and that they put at risk the jobs and livelihoods of the very people they are intended to help, a point made so ably by my noble friends Lord Boyd-Carpenter and Lord Elton.

The issue before us is whether public authorities should refuse to have any dealings with contractors or their subsidiary companies solely because of their links with a particular country. The Committee has attempted to justify such discrimination by authorities on the grounds that it is necessary in order to promote good relations between different racial groups in their areas.

Of course, it is true that the primary object of Clause 17(5) (e) is to prevent discrimination against companies with South African links because that is the most common abuse of the contractual process. But the provision is designed to prevent such discrimination in relation to any country or territory to which an authority might suddenly take a dislike.

I commend to the Committee the view of a former Opposition spokesman on local government matters, the member for Blackburn, when dealing with a previous Local Government Bill in the other place. He said that,
"Experience has shown that contract compliance is not an appropriate means of expressing discontent with those who trade with South Africa.".
Apart from disagreeing with the use of the word "appropriate" in that context, I would agree with that view.

When one looks at what the amendment tries to do, I find rather surprising the remarks of the noble Viscount, Lord Falkland, because it is absolutely true, as the right reverend Prelate and the noble Lord, Lord Underhill, said, that is is up to the individual. It is up to the noble Lord, Lord Underhill, whether he buys a car which is British made. It is up to the right reverend Prelate whether or not he wishes to eat French apples. The noble Viscount, Lord Falkland, said that he would be prepared to go as far as agreeing with a local authority putting into a contract discrimination against a contractor who might have had links with France because the authority, like the right reverend Prelate, did not like French apples. That is not something I should have expected to hear from his party and some Members of the Committee may have been quite surprised, too.

Can I ask the noble Earl to confirm that it would be illegal under this measure for a local authority to insist on a "Buy British" policy for any of its contractors?

Since the Minister mentioned me personally, could I say that it is not purely a moral issue whether I buy a Golden Delicious apple or a Cox's orange pippin. However, it may be a moral matter if producers of apples arc chaining their workers together in order to ensure that they pick enough. However, I do not think that the question of the choice of apples is relevant to my remarks.

I do not want to become involved in a technical argument but it may well be that it is a moral matter to the councillors and, therefore, they might try to write that into a contract which would he illegal for an EC contractor. However, the principle of what the noble Viscount said does hold water for the argument I put forward.

Amendment No. 97 seeks to allow authorities to ask questions or include provisions in draft contracts or tenders which are designed to
"promote and protect the reputation of the authority in race relations matters".
We do not wish to see authorities using the contractual process to promote and protect their reputation in race relations or indeed any other matters. We wish authorities to obey the law, to carry out their duty under Section 71 of the Race Relations Act, mentioned by the noble Lord, Lord Gifford, and otherwise to use the contractual process to obtain the best value for money for their ratepayers and taxpayers.

Our position on the activities of those authorities who seek to discriminate in this way against certain companies is quite clear. Authorities should not be using the contractual process to refuse to employ contractors on solely ideological grounds or on grounds unrelated to competitiveness or competence to carry out the work or supply the goods or services required. Such practices distort competition and do not give best value for the taxpayers' and ratepayers' money.

I am afraid that the Minister has again disappointed me. There is more to it than whether or not the services are provided at the cheapest rate. For example, I would not buy South African goods, and the Committee would expect that. But for years neither would I drink German wine nor eat any fruit that came from Spain. If, in a community, there are large numbers of people who do not want these things, a local authority catering for those people should be able to say, "Yes, you can cater for the children of X school or the schools in my area but because a lot of people in my area do not want goods that have come from X, Y or Z place, you must not use them". That is perfecty in order and is not non-commercial because the customers have to be satisfied.

One has this limited argument about what is commercial. The local authorities have a responsibility for the welfare of the community and they have a responsibility to respect the wishes and needs of the people living there. If you say to them that they cannot do that, of course you have a right, because Parliament has that right. What we are saying is that it is unreasonable for Parliament to use that right because of the consequences of using that right. I hope that the Minister will want to think again on this matter.

I am sorry that the noble Lord, Lord Pitt, and I differ again. We say that, thank goodness, in this country we can allow the individual to discriminate as he thinks fit. We say it is wrong for the local authority to write such discrimination into a contract.

Surely, the individual has to use the facilities that are provided by the local authority? He does not have the choice if you are going to prevent the local authority from deciding how it is going to purchase things.

I do not think any useful purpose will be served by saying anything further. I believe that the main point has been missed by many speakers—the right of local government to choose. If we follow the line that has been taken by many on this side of the Committee I fear we are putting a firm end to a long and distinguished chapter of English history and I regret it. However, I still want the amendment to go forward.

I hoped that the Minister would make the point. The right reverend Prelate has every right to speak in this Chamber. It is not a question of being political; he speaks as a Christian and we respect him for it.

6.58 p.m.

On Question, Whether the said Amendment (No. 90) shall be agreed to?

Their Lordships divided: Contents, 59; Not-Contents, 112.

DIVISION NO. 3

CONTENTS

Airedale, L.Callaghan of Cardiff, L.
Amherst, E.Carter, L.
Ardwick, L.Cledwyn of Penrhos, L.
Attlee, E.Cocks of Hartcliffe, L.
Basnett, L.Dean of Beswick, L.
Bottomley, L.Diamond, L.
Briginshaw, L.Donoughue, L.
Brockway, L.Dormand of Easington, L.
Buckmaster, V.Elwyn-Jones, L.

Ennals, L.Milner of Leeds, L.
Ewart-Biggs, B.Molloy, L.
Falkland, V. [Teller.]Mulley, L.
Fisher of Rednal, B.Nicol, B.
Gallacher, L.Northfield, L.
Gifford, L.Ogmore, L.
Graham of Edmonton, L.Phillips, B.
Grimond, L.Pitt of Hampstead, L.
Hampton, L.Ponsonby of Shulbrede, L. [Teller.]
Hatch of Lusby, L.
Hughes, L.Ross of Marnock, L.
Irving of Dartford, L.Seear, B.
Jay, L.Shackleton, L.
Jeger, B.Sheffield, Bp.
John-Mackie, L.Stoddart of Swindon, L.
Kennet, L.Tordoff, L.
Kirkwood, L.Underhill, L.
Llewelyn-Davies of Hastoe, B.White, B.
Lockwood, B.Williams of Elvel, L.
Mayhew, L.Willis, L.
Meston, L.Ypres, E.

NOT-CONTENTS

Abinger, L.Kinnoull, E.
Allenby of Megiddo, V.Kissin, L.
Ampthill, L.Lane-Fox, B.
Arran, E.Lawrence, L.
Auckland, L.Lindsey and Abingdon, E.
Balfour, E.Long, V.
Beaverbrook, L.Lucas of Chilworth, L.
Belhaven and Stenton, L.Mackay of Clashfern, L.
Bellwin, L.Margadale, L.
Beloff, L.Marley, L.
Belstead, L,Merrivale, L.
Blatch, B.Mersey, V.
Boardman, L.Monckton of Brenchley, V.
Boyd-Carpenter, L.Mottistone, L.
Brabazon of Tara, L.Mountevans, L.
Broadbridge, L.Mountgarret, V.
Brougham and Vaux, L.Mowbray and Stourton, L.
Broxbourne, L.Munster, E.
Butterworth, L.Murton of Lindisfarne, L.
Caccia, L.Napier and Ettrick, L.
Caithness, E.Nelson, E.
Cameron of Lochbroom, L.Nelson of Stafford, L.
Campbell of Alloway, L.Nugent of Guildford, L.
Campbell of Croy, L.Onslow, E.
Carnegy of Lour, B.Orkney, E.
Carnock, L.Orr-Ewing, L.
Colville of Culross, V.Oxfuird, V.
Colwyn, L.Paget of Northampton, L.
Cornwallis, L.Penrhyn, L.
Cottesloe, L.Prior, L.
Craigavon, V.Rankeillour, L.
Craigmyle, L.Reay, L.
Crickhowell, L.Ridley, V.
Davidson, V. [Teller.]Rodney, L.
Denham, L. [Teller.]Romney, E.
Dundee, E.Saltoun of Abernethy, Ly.
Eden of Winton, L.Sanderson of Bowden, L.
Elliot of Harwood, B.Savile, L.
Elton, L.Selkirk, E.
Faithfull, B.Stockton, E.
Ferrier, L.Strathclyde, L.
Fortescue, E.Strathcona and Mount Royal, L.
Gainsborough, E.
Gishorough, L.Swinfen, L.
Grantchester, L.Teynham, L.
Gridley, L.Thomas of Gwydir, L.
Hailsham of Saint Marylebone, L.Thorneycroft, L.
Trafford, L.
Harlech, L.Trefgarne, L.
Havers, L.Trumpington, B.
Hesketh, L.Vaux of Harrowden, L.
Hives, L.Ward of Witley, V.
Home of the Hirsel, L.Westbury, L.
Hooper, B.Wilberforce, L.
Hylton-Foster, B.Wise, L.
Jenkin of Roding, L.Wolfson, L.
Johnston of Rockport, L.Wynford, L.

Resolved in the, negative and amendment disagreed to accordingly.

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

House resumed.