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Lords Chamber

Volume 492: debated on Thursday 28 January 1988

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House Of Lords

Thursday, 28th January 1988.

The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Guildford.

British Airways: Ec Fares Policy

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is the present position of the discussions taking place between the European Commission and British Airways concerning Article 86 of the Treaty of Rome; and whether they will indicate their attitude in this matter, as put forward during discussions with European Community Transport Ministers.

The Parliamentary Under-Secretary of State, Department of Transport
(Lord Brabazon of Tara)

My Lords, I understand that discussions between officials of the European Commission and British Airways are continuing. This is a matter between the Commission and the airline, and it would not be helpful for me to comment while discussions are in progress. Neither I nor my right honourable friend have discussed this matter with European Transport Ministers.

My Lords, does the Minister realise that this is a matter of considerable importance both to airlines and passengers alike? Does he additionally realise that it seems not only strange but regrettable that the Government have not even discussed the problem with their European counterparts? Can the Minister enlighten the House on the following point? Is it correct that the Council of Ministers cannot discuss suggestions or proposals on this whole matter until the European Commission itself puts down an item on the agenda of the Council of Ministers?

My Lords, the Commission has distinct and specific powers and responsibilities under the Treaty of Rome, and the competition provisions of the aviation package and its inquiries are still at an early stage. However, if the Commission takes the matter further, we would expect it to take proper account of the views of member states and their competent authorities; for instance, through the advisory committee set up under the package.

My Lords, that is not what I asked the Minister. I asked him a very simple, straightforward question and it seems very difficult to get a simple, straightforward answer. Does he recall that I asked him whether it was not possible for the Council of Ministers to discuss this whole affair until the European Commission itself put down such an item for discussion on the agenda of the Council of Ministers?

My Lords, it is a matter for the Commission and not for the Council at the moment. If the Commission takes the matter further and puts the matter before the Council of Ministers, no doubt it will be discussed. The Council has provided in the competition provisions of the package for the procedures to be followed. I do not think that further action could be expected of the Council at this stage.

My Lords, I think this is insufferable. The Minister will not answer the question I have put to him. Does he recall that on 8th December he gave me a long Written Answer of several paragraphs which I could paraphrase in one word: yes? It was this particular point that I raised. May I ask him for the third time whether it is correct that the Council of Ministers cannot discuss the matter about which I have asked him today until the European Commission itself puts down such an item on the agenda of the Council of Ministers?

My Lords, this is primarily a matter for the Commission in any case, and not one for the Council of Transport Ministers. As to whether the Council of Transport Ministers wishes to discuss this, I would think not at the moment.

My Lords, is not Article 86 one of the few articles in the Treaty of Rome which has supranational effects? Is there not a director-general in the Commission who is responsible for competition policy and responsible to an individual commissioner? If the European Commission decides that any merger attracts its attention and investigates it under Article 86, is it not entitled straight away, without any further reference to the Council of Ministers, to take it to the High Court?

My Lords, that is correct. It is indeed an investigation under Article 86 by the competition commissioner which is at present being looked at. At the moment it is a matter for the Commission.

My Lords, does my noble friend agree that to ask Ministers to strike a position in the course of negotiations could jeopardise the negotiations themselves?

My Lords, it is not a question for Ministers at the moment. It is a question between the Commission and the airline concerned. It is not a matter for Ministers. I cannot answer for the Commission in this House.

My Lords, I am sorry to rise again but does the Minister realise that constant evasion only means that my question is correct and that the. Minister does not wish to say yes? Whether the competition commissioner or the transport commissioner is responsible, is it not essential that before the Council of Ministers can discuss anything it has to be based on an item put down on its agenda by the European Commission?

My Lords, I have tried to explain that this is a matter for the Commission, not for the Council of Ministers.

Agricultural Research: Policy Review

3.12 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is the purpose of their current review of agricultural research, development and advisory work; and what consultations they propose to have with the agricultural industry and those employed in research, development and advisory work.

The Parliamentary Under-Secretary of State, Ministry of Agriculture, Fisheries and Food
(Baroness Trumpington)

My Lords, the review is taking place against the background of the July 1987 White Paper on civil research and development and of the Government's policy that industry should fund more of the work from which it benefits. It is part of the normal process within government of reviewing policy. Its objective is to reassess priorities so as to achieve the most effective use of R&D resources. We are not formally consulting outside government. But we are receiving views from a number of interested parties which are being taken into account.

My Lords, I thank the Minister for her reply. Does she agree that the policy review has some similarities to the review of the National Health Service which was announced this week by the Prime Minister? It is being conducted behind closed doors at breakneck speed and is designed to produce the answer that the Prime Minister and the Treasury want. Will the Minister tell the House what she regards as the Government's own responsibility in agricultural research and development? We hear a great deal about near market research. How near is "near"? Will the noble Baroness also explain how it is intended that farmers as an industry, who are required to fund research and development—which they may be willing to do—are to do that without some form of compulsory levy? As she will know, there is a mechanism for that in virtually every sector in the industry.

My Lords, as I said in my original Answer, this review is an internal scrutiny of policy, as there are many reviews. However, there have been informal discussions with a number of bodies, such as the AFRC, development councils, producer organisations, research associations and trade unions. As regards the definition of "near market", which I think is what the noble Lord, Lord Carter, asked me about, it is not a term of art and there is no formal definition. However, part of the purpose of the review is to seek to identify the areas of R&D which should be classified under that heading.

My Lords, I wonder whether the Minister can tell us what is the situation in Scotland at the present time, because it appears to me that the review has been carried out too late and that Her Majesty's Government applied the cuts in Scotland before the review, which appears to be the wrong way round. Is she aware that half the good people have already left the college service in Scotland; and what steps is she going to take to get them back?

My Lords, as the review is going on, I cannot talk about what will actually come out at the end. However, with regard to various people leaving, I understand that Ministry staff have faced a great deal of change over the past few years, and I pay credit to the high level of dedication and professionalism that they bring to their work. Inevitably, there could be change, but it would be very wrong for me to pre-empt anything that comes out of a review which is in progress at the moment.

My Lords, I hope that this question is close enough to the subject matter. I wonder whether my noble friend can say something about the Agricultural Advisory Council, which has been studying for 38 years how to isolate the virus of scrapie in sheep. Does she feel that perhaps we may have an interim report?

My Lords, that being so, will the Minister tell us whether the review will be wide enough, detailed enough and swift enough to bring some hope to those farmers in west Wales and on the peripheral areas of agriculture, whose livelihood has been threatened by recent changes, including the failure of the milk quota system to give any help to the milk industry of Wales?

My Lords, I very much take the point about the worries of farmers in Wales and indeed in Scotland, but it is too early to say. We will consider all these items in due course.

My Lords, is the noble Baroness aware of the formation of a Select Committee of this House which is embarking on an investigation into agricultural and food research and development? Is she proposing to take cognisance of that? The subcommittee concerned is under the chairmanship of the noble Lord, Lord Butterworth, and we hope that our labours may be of some assistance to the Government, if they are prepared to wait until we have reported.

My Lords, I am aware of the formation of this committee. I should like to point out to your Lordships that the total of MAFF R&D this year is over £200 million, and that is not peanuts.

My Lords, is the noble Baroness aware that because of what has happened in the reviews in the past few years—as she well knows, at her very own doorstep there was the taking over of the PBI, etc.—any review now is looked on as suspect by the staff in all these research stations, in ADAS and elsewhere? It really would be better if they could be given some indication of what is happening as soon as possible, because there is no question that morale is going down again.

My Lords, our aim is to ensure a service which provides what the industry wants. The industry itself will therefore have a major role in determining the future size and shape of ADAS. That said, we have no present plans for cuts in the advisory areas.

My Lords, is the noble Baroness aware that over the years ADAS officers have done invaluable work in helping to resolve conflicts between those who live and work in the countryside, and those who visit the countryside for recreational purposes? Does she agree that it is imperative that that work continues, and will she assure the House that it will do so?

My Lords, it gives me great pleasure to second what the noble Lord has said in his praise of ADAS. I think that I have virtually answered that in my last reply. I accept that industry needs time to adjust, but it is a question of degree. We have always tried to announce future spending plans in time to allow for adjustments to take place. I should especially like to mention ADAS again and thank it publicly for the work it carried out following the gale havoc.

My Lords, I should like to ask a question on the essential matter of funding. Will the Minister say whether agriculture R&D is to be separately funded as at present, or is there any implication that it will depend on industrial funding after 1991? Is the Minister aware that any move in that direction would be frowned upon by the agricultural community?

My Lords, the noble Lord's question to me is relevant to the outcome of the present review. I am sorry to sound as though I am stonewalling, but it would be wrong for me to anticipate what the review will bring forth.

My Lords, will the noble Baroness tell the House whether the review is considering the use of pesticides, especially nitrates, within the industry? Does that come within the purview of the review that she has announced?

My Lords, inevitably, pesticides must be considered as part of R&D, but that is not the prime purpose of the review. After all, in the past year we have agreed safety, efficacy and various other measures concerning pesticides. A code of conduct is coming out soon.

My Lords, from the interest shown in my Question, it is clear that your Lordships' House is extremely interested in the outcome of the review. Will the Minister undertake to publish the review when it is finished?

World Economic Growth

3.22 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is the latest forecast for growth in the world economy taking into account the fall in share prices round the world.

My Lords, my right honourable friend the Chancellor's latest published assessment of world growth prospects was given in the Autumn Statement when he forecast GDP growth in the major seven economies of 2 per cent. in 1988, after allowing for the effect of the stock market falls.

My Lords, I thank my noble friend for that reassuring news. Can he say whether 500 new businesses are still being started each week? Can he also say whether small or medium-sized businesses, to which his department has paid a great deal of attention recently, are contributing to this satisfactory growth?

My Lords, yes. On average over 500 new businesses have opened and closed every week of this decade. That process appears to be continuing. There is no doubt that small and medium-sized business are responsible for a great deal of the growth in employment and the economy of the United Kingdom. I am sure that your Lordships' House appreciates that my right honourable friend the Secretary of State for Employment is responsible in the Government for looking after small firms. My department looks after the interests of all companies.

My Lords, does the Secretary of State accept that, given the still fragile situation following the crash, growth in the world economy, including that of the United Kingdom, could yet be rather lower than has been forecast? In those circumstances, whatever the political case for tax cuts, does he accept, especially as he is Secretary of State for Trade and Industry and given the worry that there is in industry about the balance of payments, inflation and interest rates, that at the present time it would be better to have an increase in public expenditure especially in the field of capital investment?

My Lords, over the past few weeks I have spent some considerable time travelling around the country, and I have spoken to many industrialists, but nowhere, I fear, have I met one who would agree with the noble Lord, Lord Barnett. Indeed, it is quite the contrary..

In the year from the third quarter of 1986 to the third quarter of 1987 growth in the United Kingdom was 5.2 per cent. higher than it was in any one of the Group of Seven. We are not for one moment saying that that trend will continue. Next year the OECD forecasts -that the United Kingdom will have a growth rate of 2.75 per cent.—that is its figure, not mine—and so far nothing appears to have changed since the reduction in share prices on 19th October.

My Lords, can the Minister tell me something that I ought to know? How is growth in world trade calculated? In the estimates of GDPs of various countries, is everything taken into account, including drugs, tobacco and luxury goods, which are of little use to some countries? Is there an index which shows what is happening to the standard of living of the majority of the people in the world, who are extremely poor?

My Lords, luxury goods are part of the GDP calculation. I suppose that tobacco would be also, but drugs are surely an illegal activity and form part of the black economy, which is not normally calculated in any assessment of GDP.

If the noble Lord cares to put down a Question—I suggest it would be better asked in the form of a Written Question—I shall be happy to provide him with details of the complex way in which GDP is calculated.

My Lords, is my noble friend aware that, on the hypothesis that the diagnosis of the noble Lord, Lord Barnett, was accurate, his prescription—to increase public expenditure—is the exact opposite of what the situation would require?

My Lords, I suspect that increased public expenditure would be just as welcome as increased taxation.

My Lords, the Minister has said that there has been a remarkable degree of growth and the economy has been responding over the past two years, but that growth may lessen in the year ahead. Despite the good growth, there has been a serious diminution in the resources that our National Health Service requires. Does that mean that the cuts that were imposed when we had reasonably good growth will be worse if that growth declines, and that the NHS is in danger?

My Lords, the funding of the NHS is another question. I think all in your Lordships' House will be aware that the increase which the health service will receive next year is approximately equal to my entire budget.

My Lords, am I right in thinking that the Secretary of State said that 500 businesses opened and closed every week? Is it 500 of each; if it is 500 in total, how are the openings and closings divided on average?

My Lords, I am happy to assure the noble Lord that I said 500 more businesses opened than closed each week. There is an average net increase of over 500 a week.

My Lords, is it not reassuring that in its latest survey the CBI has shown that, despite the fall in the stockmarket, manufacturing industry is still expecting substantially to increase, to maintain its growth, to increase investment and to increase employment? Would it not be immensely damaging if it were now to be faced by the increase in taxation which apparently the noble Lord, Lord Barnett, is prepared to see?

My Lords, I am extremely grateful to my noble friend. It is significant that the two reports issued by the CBI after 19th October, referring to opinion within manufacturing industry collected after 19th October, should be the two most optimistic reports for the past 10 years.

My Lords, will the Minister tell the House how the balance of payments deficit fits into his forecast?

My Lords, the balance of payments deficit which the Chancellor of the Exchequer has estimated for the year—I say this from memory—will be about £2·5 billion and has long been forecast. It should be taken into account at a time when this country has net overseas investments well in excess of £130 billion.

My Lords, will the noble Lord inform the House whether the Chancellor of the Exchequer's predictions in regard to the world economy, which after all was the subject of the Question, have taken into account the possibility of yet another fall in share prices throughout the world during the year to which his forecast relates? Will the noble Lord agree that the last crisis of 19th October, which the Chancellor of the Exchequer described as a disastrous aberration, was not forecast by the Government and came as a complete shock to them? In view of the world debt situation, and the probability of further large-scale down-writing of debts, is he prepared to assert that there is likely to be stability in monetary conditions throughout the period to which the forecast relates?

My Lords, I cannot possibly say what was in the minds of those who built up the detailed forecasts, not only the one which the Government made but the one made by the OECD. However, I notice with alarm that the noble Lord used the word "crisis". I think that all in your Lordships' House should recognise that today share prices on the London Stock Exchange are 3½ per cent. above those of this time last year. That hardly represents a crisis.

My Lords, has the noble Lord or the Chief Whip noticed that the time has stopped at the figure 13? Apparently we are going on at incredible length, because the time has not moved on.

My Lords, will the noble Lord say whether his answer to my noble friend Lord Barnett indicates that, as Secretary of State for Trade and Industry, he regards the expenditure of public money as money being thrown away rather than it being an investment in British industry?

My Lords, it depends very much on the way in which the money is spent.

Small Businesses: Loans Scheme

3.33 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what assistance has been provided for small businesses by the loan guarantee scheme since it began.

My Lords, since 1981 the scheme has permitted over 18,800 loans aggregating over £600 million to be made to small businesses. These loans have helped the businesses concerned to start up or expand thus creating wealth and employment.

My Lords, in thanking my noble friend the Secretary of State for that very satisfactory reply, may I ask whether he agrees that the very complicated administrative procedures to do with applying for loans under the scheme are inclined to put off small firms, particularly in regard to small loans?

My Lords, I am very grateful. There is a new simplified administration covering loans up to £15,000 for smaller companies. I believe that those who apply for loans up to £15,000 will find that the procedure now is much more suited to their purpose.

My Lords, could I ask the noble Lord how many women have applied for grants for small businesses? Is he aware that last year alone no less than 2,500 women applied to a voluntary organisation, Women in Enterprise? These women apparently either did not know about, or found it difficult to apply to, the established organisations. Does the noble Lord agree that this is a real growth area to which he should pay attention?

My Lords, I shall of course look into the matter and, if I may, write to the noble Baroness with the information. Many of these loans come to the Government through the banks, because often it is the banks which apply for the guarantees. This is a matter which should perhaps be addressed to the bank managers of the country as well as to the Government. However, I shall certainly make inquiries.

My Lords, would the noble Lord say whether the Government are doing anything to persuade certain local councils to desist from policies that make it practically impossible for small businesses to carry on?

My Lords, there is little doubt that the rating policies of some authorities in the land have made it extremely difficult for small firms to carry on. We have endeavoured to use persuasion. Today, we are engaged in other matters.

My Lords, could the Minister translate for us the global figure which he gave into the number of jobs and the cost per job? Could he also indicate whether it is the Government's intention to carry on with the existing scheme?

My Lords, yes. Surveys by the Department of Employment show that the loan guarantee scheme is one of the most effective of all schemes operated by the department. It operates at a net cost per person on the register of jobs created of about £400 per job. That is an extremely favourable figure. A review of the scheme's effectiveness is being carried out by National Economic Research Associates who report during the course of this year. The present scheme runs until 31st March 1989. I have no doubt that we shall wish to look at the report before deciding on its future.

Business

3.35 p.m.

My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Ferrers will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on government policy on changes to the Official Secrets Act. This will be followed by my noble friend Lord Sanderson of Bowden who will, again with the leave of the House, repeat a Statement on school closures in Scotland.

It may be for the convenience of the House if I announce that the Committee stage of the Local Government Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Order of Commitment to the Arms Control and Disarmament (Privileges and Immunities) Bill will be discharged.

Official Secrets Act

3.36 p.m.

My Lords, with the leave of the House I will now repeat in the form of a Statement the Answer to a Private Notice Question on government policy on changes to the Official Secrets Act which is being given in another place by my right honourable friend the Home Secretary. My right honourable friend's reply is as follows:

"I gave the House an account of the Government's intentions in this respect, and of the issues which we are considering, in the debate on the Bill introduced by my honourable friend the Member for Aldridge-Brownhills (Mr. Richard Shepherd) on 15th January. In my interview for the BBC "Analysis" programme to be broadcast tonight—during which I discuss in general terms the balance to be struck between the obligations of civil servants and the public's right to know—I set out again some of the ground which we are covering in our review of these matters. In particular, I give examples of different types of information which might or might not require the protection of the criminal law. The analysis I offer is in accordance with the Franks Report and has been common ground since 1972.

"As the House knows, we hope to publish our proposals in a White Paper in June, and the House will have an opportunity to debate those proposals before the Summer Recess. My interview tonight—a full transcript of which I propose to place in the Library of the House—gives no details of our proposals."

My Lords, that completes the reply which was given by my right honourable friend the Home Secretary.

My Lords, on behalf of the House I thank the noble Earl for repeating the Statement, which is singularly uncommunicative. It would seem that this great public debate has been removed from Parliament to broadcasting, perhaps not for the first time.

May we have at least the assurance that in any legislation they may propose to repeal Section 2 of the Official Secrets Act which, on common ground, has long been regarded as a mess and was so described in the Franks Report, the Government will ensure that a mere certificate by a Minister that national security was involved would not be regarded as sufficient to prove to a jury the guilt of an accused under a new official secrets Act? That is what the Government did—or they made suggestions along those lines—in 1979. May we have an assurance that we shall have something more satisfactory if and when something erupts from the governmental mind?

My Lords, following the comments of the noble and learned Lord, Lord Elwyn-Jones, perhaps I may also thank the noble Earl for having repeated the Statement. May I ask two questions? First, could he discuss with his noble friend the Government Chief Whip the possibility of a debate in government time before the Summer Recess, given that he has indicated that the White Paper will be published in June, a time when this House will inevitably have before it a very substantial amount of government legislation?

Secondly, is he aware that many of us will welcome the apparent statement of the Home Secretary in the broadcast this evening that in the future any civil servant guilty of a breach of confidentiality will be proceeded against under the disciplinary regulations applying to civil servants and that there will be no repetition of the folly of the Ponting prosecution?

My Lords, I am grateful to the two noble Lords for the welcome, even if partial, that was given to the Statement. The noble and learned Lord, Lord Elwyn-Jones, is ingenious, if I may say so, in asking me to give an undertaking as to what will appear in the Government's White Paper. With the greatest of respect, I suggest that it would be best if the noble and learned Lord were to wait until the White Paper arrives, although his remarks will obviously be taken into account.

With regard to the comment of the noble Lord, Lord Harris of Greenwich, whether or not there is a debate is a matter for the usual channels. I have no doubt that the importance of the matter will be given its due weight. He too was fairly ingenious in asking me to give a commitment. I cannot give any such commitment until the Government's White Paper comes forward.

My Lords, clearly one does not wish to impose on the noble Earl at this time, but in considering the White Paper and what ground it covers can those of us who have been involved in public life on the official side and who have played according to the rules—namely, that we have not breached confidentiality at any time—be assured that the Secretary of State has in mind that the legislation will also cover Ministers, so that they might also consider sticking to the Official Secrets Act, both in the letter and in the spirit?

My Lords, I am sure that all these matters are high in my right honourable friend's mind, but I merely remind the noble Lord and indeed the noble Lord, Lord Harris of Greenwich, that what my right honourable friend was saying was no indication of Government policy. He was merely taking part in a public debate on a matter of public interest and indicating the kind of areas which the White Paper might cover.

My Lords, the noble Earl will agree that some of the revelations which have been made from time to time by civil servants and others have been revelations of misdemeanours, sometimes amounting to criminality by the secret services. Have the Government any plans to get to the root of the matter? Have they any plans to bring the secret services under more effective supervision, quite apart from the question whether or not it is proper to prosecute those who reveal such secrets?

My Lords, the noble Lord, Lord Jenkins of Putney, has put down a Motion on the secret services for about a week's time. On the general point, I would merely say that the Government have been discussing and considering these matters since April last year and it is right that we should wait until the conclusions on those deliberations are available which should be in about June this year.

My Lords, various governments have been considering this issue for many years now without producing anything. Can we take it that the Statement made by the noble Earl now indicates specifically that in the next Session the Government intend to bring forward some form of legislation—particularly in view of their attitude to the Private Member's Bill last week—to alter Section 2 of the Official Secrets Act?

My Lords, I am glad that the noble Lord, Lord Hatch of Lusby, gives the Government credit for taking action whereas previous governments have not done so. I can only tell him that he must wait until the White Paper appears. It would be quite wrong for me to prejudge it or to give the noble Lord any assurance as to what will happen. I can tell him that the matter is under acute consideration. My right honourable friend is aware of the problems and hopes to put forward the Government's view on how those problems should be overcome. Having done that, it is of course up to Parliament to decide whether or not those views should be accepted.

My Lords, can the noble Earl give an assurance that in the White Paper there will be some cover of the security services? Will it be of such a kind as to calm the fevered imagination of the noble Lord, Lord Jenkins of Putney? In such a reference to the security services will it he possible for the Government to move out of the era of John Buchan and into that of John Le Carré in the sense that the heads of the services should be able to be made public and be answerable in a limited fashion for what the services are sometimes accused of doing? If that is not done, serving officers and past officers of the security services will be traduced unmercifully by Members of another place without any kind of redress.

My Lords, the noble Lord, Lord Annan, is competing in the stakes of ingenuity with his other noble friends. I hear what he has to say but I have no intention whatever of saying what will be in the White Paper because neither I nor the Government know. They are still considering.

My Lords, will the noble Earl acquaint the noble Lord on this side of the House with the fact that the fevered imagination that he attributes to me exists only in his own mind?

My Lords, not for the first time. I think I am acting as a conduit between the noble Lord, Lord Jenkins of Putney, and some other noble Lord.

Local Government Bill

3.45 p.m.

My Lords I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—( The Earl of Caithness.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 17 [ Local and other public authority contracts: exclusion of non-commercial considerations]:

moved Amendment No. 83A:

Page 15, line 13, at beginning insert ("except as otherwise provided under subsections (5A) to (5E) below").

The noble Lord said: In its present form this clause prohibits local authorities from requiring contractors to pay nationally agreed wage rates, holiday pay, sickness benefit and other benefits. Companies paying low wages have difficulty in recruiting suitably qualified staff. That very often leads to poor quality work. Staff turnover is generally high which may cause delay in the delivery of goods and services to the satisfaction of the local authority concerned.

Poor conditions of work and late delivery of goods and services lead directly to increased costs for local authorities in supervision of work and very often in the rectification of faults.

National agreements on pay and conditions are regulated by employers' federations which require adherence to those agreements by their members and have stood the test of time. Removing the fair wages clause from the contract conditions will disadvantage those companies which pay nationally agreed wages compared with the others and so undermine the work of employers' federations in setting standards for industry.

Local authorities will be commercially disadvantaged in the same way as other contractors paying nationally agreed wage rates. In addition, as clients they will be affected by the deterioration of standards caused by the reduction in control over contractors by employers' federations. We believe that the Bill as it stands could support a further introduction or an increase in the industry of the cowboy contractors who do no good to anybody in terms of service or cost-effectiveness. I beg to move.

Before I respond to the first group of amendments to Clause 17 I should like briefly to remind the Committee of the thinking behind the provisions of Part II of this Bill. We do not believe that the contractual process between public authorities and the contractors they employ should be the place for political posturing. Nor do we believe that local authorities should take upon themselves the role of extra-statutory enforcement agencies on matters which are already the subject of existing statute and which, where appropriate, have their own enforcement agencies to make sure the law is carried out.

I apologise to the Committee for stating now what I suspect I shall repeat several times during our deliberations on Part II. However, I think it is necessary to put on record at the outset that these provisions are not simply what some would call another attack on the freedoms of local government. The great majority of local authorities will be almost entirely unaffected by Part II, for the simple reason that most authorities have never regarded it as proper to use the contractual process in the way which the Bill will prevent. However, a small minority of authorities abuse the process and that minority is growing. That is why the Government have felt it necessary to act.

Turning to the amendments, while I appreciate that Amendment No. 83A refers to subsection (5D) as proposed in Amendment No. 92D, perhaps it will be for the convenience of the Committee that we should leave discussion of Amendment No. 92D until we reach Amendment No. 84, which deals specifically with the point about wages raised by the noble Lord, Lord Dean.

The arguments of the noble Lord, Lord Dean, in support of the group of amendments have certainly not convinced me that authorities should be inquiring into that sort of detail about a potential contractor and his employees. As regards the record of relationships between management and workforce in the course of the previous five years, certain local authorities have failed to demonstrate a responsible attitude in that area in the past. The Committee may well imagine the sort of mischief which an unscrupulous authority might get up to if the amendment were made. We believe that any firm which is unable to deliver the goods because of poor industrial relations will find that reflected in their performance record. That will be one of the things which local authorities should be looking at.

It would be equally unacceptable for a local authority to take into account the proportion of supervisors to others in the workforce. That would clearly be open to abuse. However, it would not be wrong for questions to be asked about the qualifications of the workforce, providing that the questions were not masquerading as questions about composition or training. Again, any contractor whose workforce did not possess the necessary skills would find that reflected in his performance record. I cannot accept that authorities need to go into detail about the taxation status of a contractor's individual employees. That is surely something which is best left to the Inland Revenue.

The kind of detailed and lengthy inquiries of contractors which would be allowed under the amendment would place a considerable burden on companies—particularly small companies—and would stop them from getting anywhere near the tendering process in the first place, let alone being able to take it a stage further. I hope that the Committee will resist the amendments.

The Minister has properly taken the opportunity which the amendment gives him to refer to a number of issues which are wrapped up in it. He has fairly touched upon four or five separate debates which we on this side of the Committee perceive as being worthy of examination in detail.

The Minister has demonstrated that he does not see a problem. He does not see the need or necessity, as do we on this side of the Committee, to ensure that the recipients of ratepayers' money—the contractors—are following fair, acceptable, equal and non-discriminatory policies. The Minister is entitled to take that view. He is entitled to say that the amendment might lead to political posturing, whatever that means. He is entitled to say that it is not the job of local authorities to undertake extra-statutory obligations. He also said that the Committee could well imagine that the powers which we are seeking could lead to unscrupulous activity.

Of course all of those things can happen. They have not happened, but they can happen. We are speaking of sensible, responsible employers—the private sector does not have a monopoly on sensible employers—who are anxious to get value for money, to ensure that local people are employed and to make sure that the people who get a contract are paying fair wages, have proper safety records and are able to demonstrate that they are so in touch with their employees that they have a good strike policy.

The Minister might feel that all of those things have nothing to do with an employer—the council—before it lets a contract. We on this side of the Committee—and certainly the Trades Union Congress and many local authorities—feel differently. As the day goes on, I shall be pleading the case and giving illustrations in hopes that the Minister will see that what we are seeking to do in the raft of amendments which will be coming forward is not only right and proper but also necessary.

The Minister is entitled to say that good employers who are party to national wage agreements will honour those agreements. The history of industrial relations in this country has a very fair record as regards the way in which sense, more often than not, prevails. The Minister says that the burden involved would be onerous if it were placed upon small employers. The record of local councils, recognising the problems of small businesses and small communities, is not one to be put aside. If there were genuine cases in which paperwork and the need to comply were issues, I am sure that local councils would wish to be reasonable.

However, the Minister must understand that, having discussed each of the issues in detail, there is much evidence that I and other Members of the Committee will be able to adduce to show that the rosy picture may be false. There will be other amendments moved from other parts of the Committee which will accept the generality that employers in the private sector in the main seek to be fair, to do good work, to make profits and to run good businesses. We are not concerned with the generality. We are concerned with a proportion—I should not wish to quantify it—who will get away with what they can.

I know that the unemployment figures are lower than they were. However, there are large areas of unemployment and deprivation. There are large areas of discrimination against the disabled, women and ethnic minorities. The instances of those matters will come to the Minister not from any party political sources but from government papers. It is clear that unless a local authority takes upon itself the responsibility of making sure that ratepayers' money—a phrase which has been used more than once from the other side of the Committee—is spent wisely, it may well get what appears to be a good deal—that is to say, the lowest cost—but unless it has power to make some inquiries of an employer before giving out contracts and before it puts all its eggs in one basket, there may be some very serious consequences.

Perhaps I may give one instance concerning wages. Lincolnshire County Council has handed over most of its school and other cleaning to ISS Service Systems, whose savings over the in-house bid were based entirely on paying £1·70 per hour to cleaners instead of the current £2·24. The Government are apparently quite happy to allow those wage levels. We are talking about miserable levels like that. We arc talking principally about women who will be working a normal working week and going home with less than £70 per week, which will be less by the time it is taxed. We are talking about councils, which spend ratepayers' money, satisfying themselves that they are not a party to allowing such companies to get away with murder.

The Minister may think that irksome and the employer may think it an intrusion upon his right to drive the hardest bargain and to get his labour at the lowest possible level. I honestly believe that, in resisting this amendment, the Minister is simply aiding and abetting a deterioration, albeit on the fringes, in industrial relations.

Let me give another illustration. ICC's cleansing policy is to sack all part-time workers who take tea breaks. The Minister may ask, "What has that to do with the employer—the council—giving out the contract?" I think that the council is entitled to know about practices and policies, especiallly as regards wages, the ethnic mix and ensuring that enough disabled people are employed. The employer—that is, the council—is entitled to have such information. Whether it takes it into account and acts upon it is another matter.

The average weekly earnings of ICC workers in print are £15 a week. Looking at wages—and that is only one issue—or at the question of redundancies and job shedding, it is clear that those are issues which affect the most vulnerable sections of our society, whom I categorise as working women, ethnic minorities and the disabled. Statistics will be put forward to demonstrate that these are not just empty phrases. Government figures will show that it is those sections of our community who are most at risk, if no attempt is made by the responsible authority—that is, the council—to ensure that the ratepayers' money (which is being spent by the private contractor for a service to be provided to the community) is spent in the best possible manner.

The point is very often made that privatisation or the result of competitive tendering saves public money. That is a myth. There may very well be a piece of paper which shows that at a particular time the cost to the ratepayer or the consumer is less, but one must consider the totality of that cost, which includes proper health provision, safety at work and holiday and other entitlements—in other words, all that Members of this Committee have no doubt enjoyed for a great length of time in private or public service.

Before we put too many eggs in one basket we ought to be satisfied that the recipients of ratepayers' money are people who are fit and proper persons to receive it.

4 p.m.

The noble Lord, Lord Graham of Edmonton, is asking for local authorities to have a right to investigate all sorts of matters which have nothing to do with the commercial contract, which should be for the benefit of the ratepayers. He is asking that the local authorities should be allowed to investigate whatever they want to investigate, and to set a long list of questions about anything that springs to mind. One only has to look at the pre-tender form of Leicester City Council and the questions that they seek to have answered before a possible contractor is even allowed on to the list. That has led to a situation which has produced very poor results for the ratepayer. What we are seeking with this Bill is to improve services for the taxpayer and the ratepayer. I think that at this stage I ought to call in aid some words of Councillor Margaret Hodge, the leader of the Islington borough council and an unlikely supporter of my argument, I should have thought, as reported in the Local Government Chronicle of 3rd July:

"A clear message has got to go out from us, which is—the reason we are there is not to service the interests of sectional trade unionists, hut to serve the interests of the people for whom we provide services". [Official Report, Commons, 6/7/87; col. 145.]
That is the purpose of the Bill.

Not for one moment would I disagree with the Minister in that last comment and his quotation from Margaret Hodge. That was always my view when I was engaged in local government. Governments are not elected to serve sectional elements; they are elected to serve the community as a whole. They look after the interests of the community, too, not the interests of any particular group, as I have said.

What do we mean by competition? I mean equal competition. There are grave reservations about cowboys in the building industry, which come not from direct works departments but from the bona fide private building sector. In an earlier observation from the Dispatch Box, the Minister referred to the fact that this was not a question for the Department of the Environment but for the Inland Revenue. I have asked questions in this Chamber and quoted figures given to me by the Building Employers' Confederation, the Federation of Building Trade Employers and the Federation of Master Builders, and other bodies in that industry which are heavily involved in the local sector both at the top and lower levels. They complain bitterly. I understand that the Treasury was being defrauded of billions of pounds by the employment of lump labour. The local authorities were not benefiting; rather, it was the people in lump labour.

We ask that people who are competing shall compete in a proper manner and that competition shall be fair. From what the Minister has said, I am not sure by any means that it would prove fair. Local authorities must attempt to obtain high quality work and value for money when awarding a public supply or works contract. They have to assess the technical ability of potential contractors and derive the maximum value from the contract for which they are invited to tender.

At present it is standard practice for local authority departments to ask tenderers for a breakdown of their workforce by grade in order to appraise the size and structure of the firm—for example, by examining their management and supervisory structure, professional and technical support and the number of skilled employees and their particular trades. This information is important for technical appraisal of firms, to predict whether they are likely to be able to deliver high quality goods and services and the size of contract that they will be able to undertake. Nothing would be worse than somebody putting in a bid for a contract, getting it, and not having the resources to carry it out with the speed and efficiency which the local authority requires.

Noble Lords from all sides of the Chamber who have had experience of ordering for local authorities will remember that the selective tender list worked very well. Under that system, when a local authority wanted work done under various contracts, it was able, under both Labour and Conservative governments, to draw up selective lists of three or four reputable contractors in the area and keep them as its tender list. On that basis, whoever submitted the best tender won the contract, and the authority knew immediately that that contractor was capable of carrying out the work for which it was tendering.

In what the Minister has said, there is no guarantee that the local authority could obtain any such undertaking even if it asked for it. It can ask the contractor to give an undertaking, but what they dare not ask is, "Do you have the resources to do the job?" There is no indication that that information would be forthcoming. If there is a proliferation of this type of activity, I can foresee situations in which local authorities will be left in the lurch by somebody who cannot carry out the work.

I do not want to stay too long on this matter but I can cite very quickly two multimillion pound contracts in Manchester in which the contractor went "bump". Both were specialist projects and the local officers had to bring in consultants at great public expense. One was the completion of the new Manchester assize courts. It was a very large project where the electrical work failed because the person who had the contract finally did not have the resources, knowhow and technical expertise to complete the work for which he had tendered. It was no use the Manchester local authority—as the agent in part for the Government and in part for the judiciary—taking the contractor to court because he went "bump". I know that that example is repeated in dozens of cases.

The Minister has not satisfied me at this point in time. I do not know whether he has anything further to add. I should like to hear him say that he is convinced that open tendering—without the customer having the right to consider whether there are the resources to carry out the commitment that it has undertaken—is so way out that he cannot consider it.

Before the Minister responds, he quite fairly dismissed the idea that councils would be asking prospective contractors to complete questions about their employment practices. He quoted what the Leicester authority is doing—and I do not think he thought much of it. Would the Minister care to comment on the views of the Secretary of State for the Environment in another place when the issuing of questionnaires with regard to compliance under Section 71 of the Race Relations Act was discussed? If we are dismissing the necessity for a council to ask questions about the employment policy of a prospective contractor, then indeed we have a conflict.

In another place at Report stage the Secretary of State said that he would prescribe the questions that local authorities would be permitted to ask tendering companies and that there would be no more than five or six in number. There is a principle here. We have not only the principle that it is right for a council to ask questions; we have the Secretary of State saying that he will prescribe the five or six questions which in his view—nobody else's—are appropriate.

I have received a document from the Commission for Racial Equality. It has listed what it considers to be fair questions. The Minister may decide that this point anticipates later amendments, but he has raised the issue. If the Minister tells us—as may be the mood of the Committee—that discussion on the questions that the Secretary of State thinks are proper would be more properly raised by me at a later stage, I shall do that. But the Minister dismissed the idea of a council asking a prospective contractor questions about how he operated his business. Perhaps the Minister can be helpful to us.

I hope that I can he helpful to the Committee. The questions to which the noble Lord, Lord Graham of Edmonton, has referred under the Race Relations Act will be the subject of detailed debate at a later stage. They are the subject of consultation at the moment. He failed to draw the Committee's attention to the fact that in the 1976 Act there is a special section which says that it is the responsibility of the local authority to perform certain functions. We are not talking about that in the amendments before the Committee, but about a request by local authorities to look into matters over which they have no jurisdiction, and which are covered by other matters of primary law.

The noble Lord, Lord Dean of Beswick, was absolutely right to say that it is the duty of the local authority to look into the financial competence of the company to complete a contract. I am sure the Committee would agree that that does not necessarily mean it needs to look into the record of the relationships between management and the workforce in the previous five years. Would that have prevented the contractor to whom he referred in the case of the Manchester assize courts encountering the difficulties that he did?

The local authority needs to make sure, first, that it writes the correct specification; secondly, that it puts out the right tender documents to ensure that the work it wants done is done to the level required; and, thirdly, that the companies who are tendering for that have the financial ability, either through giving a bond or through insurance—that is a matter that we raised at an earlier stage—or have a track record sufficient to satisfy the local authority.

Perhaps I may very briefly give a hypothetical example that I believe could happen if the Bill is passed as it stands. A local authority puts out a contract for a building containing highly sophisticated equipment. It is a contract requiring large capital. Then the city architect or engineer in charge of the contract says, "One of these contractors here carried out a contract similar to this two or three years ago for city B. We in City A, in the interests of the local authority and the ratepayers, ought to make inquiries as to what happened there".

He takes his other officers, and perhaps his chairman of committees, to look at the first contract, and they do not like what they see. They do not think that value has been given for money. Perhaps they do not like some of the practices that have taken place while that contract was being carried out. Is the Minister saying that the second authority has no right to make such inquiries before deciding on letting that contract? That is what he appears to me to be saying. I believe a local authority has a right to do so in the interests of its ratepayers.

The local authority has the right to make sure that those who will submit a tender have the financial ability and the competence to carry out the necessary skilled work in order to make sure that the contract is completed.

I must press that last point. The nub of the argument is whether people ought to be investigated when they have carried out similar work for someone else shortly before. The Minister indicates to me that that is not on. He may not be familiar with present ordering patterns in this country. We are always told, if we wish to sell nuclear or coal-fired stations, that before anyone will buy one they have to come over here to see one of ours working to make sure that we can carry out the specification.

The same goes for a wide range of other public contracts that we have carried out abroad. I recall the Tyne and Wear railway, which people from the Far East were brought to see to assure them that the people here had the knowhow and the resources to deliver a railway—I think it was to Hong Kong—to specification. The Minister is denying that facility to local authorities. On that basis, I have a duty to test the will of the Committee.

4.18 p.m.

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

Their Lordships divided: Contents, 91; Not-Contents, 145.

DIVISION NO. 1

CONTENTS

Airedale, L.Kirkwood, L.
Amherst, E.Leatherland, L.
Ardwick, L.Listowel, E.
Attlee, E.Llewelyn-Davies of Hastoe, B.
Aylestone, L.Lloyd of Kilgerran, L.
Banks, L.Lockwood, B.
Barnett, L.Mackie of Benshie, L.
Basnett, L.McNair, L.
Blackstone, B.Mayhew, L.
Blease, L.Molloy, L.
Bottomley, L.Mountevans, L.
Briginshaw, L.Mulley, L.
Brockway, L.Nicol, B. [Teller.]
Callaghan of Cardiff, L.Northfield, L.
Carmichael of Kelvingrove, L.Ogmore, L.
Carter, L.Oram, L.
Cledwyn of Penrhos, L.Parry, L.
Cocks of Hartcliffe, L.Perry of Walton, L.
Dean of Beswick, L.Peston, L.
Diamond. L.Phillips, B.
Donaldson of Kingsbridge, L.Pitt of Hampstead, L.
Dormand of Easington, L.Ponsonby of Shulbrede, L. [Teller.]
Elwyn-Jones, L.
Ennals, L.Prys-Davies, L.
Ewart-Biggs, B.Rathcreedan, L.
Falkland, V.Rea, L.
Fisher of Rednal, B.Ritchie of Dundee, L.
Gallacher, L.Ross of Marnock, L.
Gladwyn, L.Seear, B.
Graham of Edmonton, L.Shackleton, L.
Grey, E.Stallard, L.
Grimond, L.Stedman, B.
Hampton, L.Stewart of Fulham, L.
Hanworth, V.Stoddart of Swindon, L.
Harris of Greenwich, L.Strabolgi, L.
Hatch of Lusby, L.Taylor of Blackburn, L.
Hayter, L.Tordoff, L.
Houghton of Sowerby, L.Underhill, L.
Hughes, L.Wallace of Coslany, L.
Hylton, L.Wedderburn of Charlton, L.
Jay, L.Wells-Pestell, L.
Jeger, B.White, B.
Jenkins of Hillhead, L.Williams of Elvel, L.
Jenkins of Putney, L.Willis, L.
Kilbracken, L.Winterbottom, L.
Kilmarnock, L.Ypres, E.

NOT-CONTENTS

Abinger, L.Cameron of Lochbroom, L.
Aldington, L.Campbell of Alloway, L.
Allenby of Megiddo, V.Campbell of Croy, L.
Alport, L.Carnarvon, E.
Ampthill, L.Carnegy of Lour, B.
Arran, E.Carnock, L.
Auckland, L.Coleraine, L.
Balfour, E.Cornwallis, L.
Beaverbrook, L.Cottesloe, L.
Belhaven and Stenton, L.Cox, B.
Beloff, L.Crickhowell, L.
Belstead, L.Cullen of Ashbourne, L.
Bessborough, E.Davidson, V. [Teller.]
Birdwood, L.De Freyne, L.
Blatch, B.Denham, L. [Teller.]
Bledisloe, V.Dilhorne, V.
Borthwick, L.Dundee, E.
Boyd-Carpenter, L.Elibank, L.
Brabazon of Tara, L.Ellenborough, L.
Brookeborough, V.Elliot of Harwood, B.
Brougham and Vaux, L.Elton, L.
Broxbourne, L.Erne, E.
Bruce-Gardyne, L.Erroll of Hale, L.
Butterworth, L.Faithfull, B.
Caccia, L.Ferrers, E.
Caithness, E.Ferrier, L.

Foley, L.Nelson, E.
Fortescue, E.Norfolk, D.
Fraser of Kilmorack, L.Norrie, L.
Gainsborough, E.Nugent of Guildford, L.
Gisborough, L.O'Brien of Lothbury, L.
Grantchester, L.Onslow, E.
Greenway, L.Orkney, E.
Gridley, L.Orr-Ewing, L.
Hailsham of Saint Marylebone, L.Pender, L.
Penrhyn, L.
Hankey, L.Peyton of Yeovil, L.
Hardinge of Penshurst, L.Plummer of St Marylebone, L.
Harlech, L.Porritt, L.
Harvington, L.Portland, D.
Havers, L.Rankeillour, L.
Hesketh, L.Reay, L.
Hives, L.Ridley, V.
Home of the Hirsel, L.Rippon of Hexham, L.
Hooper, B.Rodney, L.
Hylton-Foster, B.St. Aldwyn, E.
Ilchester, E.St. Davids, V.
Ironside, L.St. John of Fawsley, L.
Jenkin of Roding, L.Saltoun of Abernethy, Ly.
Jessel, L.Sanderson of Bowden, L.
Johnston of Rockport, L.Sandys, L.
Joseph, L.Seebohm, L.
Kearton, L.Selborne, E.
Kimball, L.Selkirk, E.
Lane-Fox. B.Shaughnessy, L.
Lauderdale, E.Simon of Glaisdale, L.
Lawrence, L.Skelmersdale, L.
Lloyd of Hampstead, L.Stockton, E.
Long, V.Strathspey, L.
Lucas of Chilworth, L.Terrington, L.
Margadale, L.Teviot, L.
Marley, L.Thomas of Gwydir, L.
Merrivale, L.Thorneycroft, L.
Mersey, V.Trafford, L.
Milverton, L.Trumpington, B.
Monckton of Brenchley, V.Vaux of Harrowden, L.
Montagu of Beaulieu, L.Ward of Witley, V.
Mottistone, L.Westbury, L.
Mountgarret, V.Whitelaw, V.
Mowbray and Stourton, L.Wise, L.
Munster, E.Wolfson, L.
Murton of Lindisfarne, L.Wynford, L.
Napier and Ettrick, L.Young of Graffham, L.

Resolved in the negative, and amendment disagreed to accordingly.

My Lords, your Lordships may feel that we have reached a suitable moment at which to take the Statement. If so, I beg to move that the House be now resumed.

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

House resumed.

School Closures In Scotland

4.27 p.m.

My Lords, with the leave of the House I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Scotland. The Statement is as follows:

"With permission, Mr. Speaker, I will make a Statement about school closures in Scotland.

"Regulations were laid yesterday which had the effect that where an education authority proposed to close, change the site, or vary the catchment area of any school where the number of pupils at the school is greater than 80 per cent. of its capacity that proposal shall be referred to the Secretary of State for his consent.

"Since 1885 Scottish Secretaries have had the power to review school closures. Until 1981 any proposal to close any school in Scotland had to come to the Secretary of State for his consent. At that time the House approved a change in the regulations which left two categories of school for which his consent was required for a closure proposal—namely, denominational schools and rural schools where the alternative was more than a certain distance from the school to be closed.

"We all recognise that a number of education authorities are currently faced with substantial overcapacity in their schools. Understandably some authorities are contemplating proposals which will involve the closure of a considerable number of schools. This will allow them to use their resources for education more effectively.

"But that task must be carried out in a balanced and sensitive manner. It is a clear priority of the Government that education should reflect the interests of children and the wishes of their parents. The Education (Scotland) Act already places a duty on both the Secretary of State and education authorities to ensure that pupils are educated in accordance with parental wishes.

"It is therefore reasonable to expect education authorities to take into account parent demand in considering proposals for school closures. Clearly, no one can be surprised when an authority proposes to close half-empty schools. But where a school is full or nearly full and by that fact demonstrates both that it has the clear and strong support of parents and that it gives good value for money to its community, I believe it is only right that there should be scope for further review of a proposal to close such a school."

My Lords, that concludes the Statement.

My Lords, I thank the Minister for repeating the Statement. I am sure he will be aware from his reading of the Scottish press just how important the Statement is to Scotland and particularly to Scottish education. There is a strong feeling right across the press that the Government are changing the rules in the middle of consultation. The direct interference—it can only be described as that—by the Prime Minister in a specific local matter is surely to be deplored.

The Minister spoke of the power that the Government had but which was surrendered in the 1981 Act. Is he aware that as recently as 1985 the then Parliamentary Under-Secretary of State for Scotland, Mr. Alan Stewart—who, ironically, was the person who tabled the Written Question—when questioned about the closure of local schools prior to the 1981 Act, said:
"Education authorities had no option but to seek the Secretary of State's permission to close. The procedure was wasteful of resources, and bureaucratic".
This next sentence is most important:
"It was also wrong in principle, for it had the effect of passing to central Government a local matter that would more properly have been left to local discretion".—[Official Report, Commons, 4/4/85; col. 1364.]
All noble Lords know that behind the new regulation is the case of Paisley Grammar School. The Minister must be aware of the fact that Clyde Regional Council was not considering only one school in the area. There are six non-denominational schools in the Paisley area and some of them had to close. In its wisdom, the council decided that this should be the school to close. It is important to realise that having a capacity of 80 per cent. may be a good measure, but 80 per cent. in an isolated school is different from 80 per cent. in six schools all within a reasonable distance of each other. Hard decisions must be taken if local authorities are to deal with education in a proper economic and effective way, as the Government wish.

This morning the Glasgow Herald summed up the situation in its leader column where it stated:
"Yesterday was a dismal day for what still remains of local democracy".
This action is an appalling interference with local democracy.

My Lords, this is an extraordinary way to run a country. We are grateful to the Minister for repeating the Statement. It is extraordinary that the issue arose because the headmaster of the school referred to—Paisley Grammar School—was told that the regulations that might save his school were to be made before Parliament was told. It is an extraordinary reflection on the failure of the Government to give confidence to local authorities to trust in them and to co-operate. While I am delighted that this old and good school is to be saved, the principle of running the country in this way is extraordinary. I realise that a forceful and youthful Minister is responsible for education in Scotland but that is no reason for the Government to behave in this manner.

I should like to ask the Minister how many other schools the Government consider need to be saved from the local authorities which run them; or is this instance simply a one-off, which would make the situation even more extraordinary? I should like the Government to consider whether it is not a fact that the situation has been caused because of the lack of a decent system of elected local authorities and indeed the House of Commons. One might consider the broader question, when governments must take extraordinary action such as this to produce a regulation to save a school which is threatened by, admittedly, a highly ideological body in Strathclyde Regional Council.

My Lords, I should like to thank both noble Lords for replying to the Statement. Their reaction was perhaps predictable. The noble Lord, Lord Carmichael, asked whether this situation would wreck Strathclyde's attempt to rationalise schools. The answer to that question must be that there is no reason why it should. It may need to rethink the details, but in principle it is right that it should remove surplus capacity where it exists.

The noble Lord also mentioned other schools in the area. If Strathclyde proposed to close Paisley Grammar School it would be able to put that point to my right honourable friend the Secretary of State. If we did not think that there was a good case for Paisley Grammar School we should not have made such regulations. However, I insist that each case will be considered on its merits.

The noble Lord, Lord Carmichael, referred to today's Glasgow Herald. I also read that article, but the noble Lord failed to point out the following statement:
"There was a good case for saving such centres of excellence as Paisley Grammar School".
Turning to what was said by the noble Lord, Lord Mackie of Benshie, noble Lords know very well his views on proportional representation, and I shall not comment on that at this stage. He asked how many schools will be affected. The answer is, more than one. This is not a special measure for one school, and the number of cases that arise will depend on the decisions taken by education authorities.

My Lords, the Minister of State was not in this House in 1981, but, for my sins, I was. For my sins, I opposed the change that the Secretary of State was than making. Until 1981 no school could be closed without the consent of the Secretary of State. With great flurries of freedom from the party opposite, the Secretary of State gave up that power. But he did more than that.

There are two categories of school in Scotland: the general public schools and the denominational schools. The Government deliberately wrote in a privileged position for the denominational schools where the hierarchy had to agree and there was an agreement that the case should go to the Secretary of State. I later tried to achieve equality between the denominational and the ordinary schools, but the party opposite opposed that. Therefore on two or three occasions it has declared that the Secretary of State is excluded and the matter must be left to the local authorities.

Strathclyde Regional Council embarked on an important and essential job. However, it is an unpopular job, because closing any school is unpopular. That is why the Secretary of State for Scotland was glad to be rid of the power that he had. However, we then had an inexperienced Undersecretary, who, in the middle of the negotiations and decisions blundered through the west of Scotland and made speeches and promises that the Government do not have power to implement. In the middle of that the Government come along with these regulations.

The Minister said that they are to apply all over Scotland. Of course they are, but he knows that effectively they will apply to one school in particular in Strathclyde's case. It may be a good thing that that school is saved, but it probably could have been saved without the blundering intervention of a Minister of State who got people's backs up in local authorities.

The Minister did not mention the fact that we have been concerned with closing schools in order to match the falling rolls with the necessary capacity. In the calculation of the 80 per cent. one can consider the maximum number of pupils in attendance at the school in any one year in the period of 10 years preceding the proposals. Therefore, if they can cite a capacity of 80 per cent. nine years ago the Secretary of State can withhold his consent. This is ridiculous.

I do not know whether it is entirely valid, after using the 1981 Act to remove the powers of the Secretary of State, now to reintroduce them in a gerrymandering way. That is what the people of Scotland object to; namely, the arbitrary way in which the Government have come in seemingly to save one school and not given a proper opportunity for the local authority to reconsider. A school with which I was concerned was involved and I was asked for my views. I said, "No, I am not giving my views". The power has been passed—it was Mr. Younger at the time—from the Secretary of State to the local authority, the education authority. Let them consult; I am sure that people will let their views be known. I am sure that in that instance they came to the right conclusion, and in the end, they would have come to the right conclusion about Paisley as well. However, let the Government realise what they are doing. If they can do it for one school, they will be asked to do it for every school.

We should remember that it is not a case of every school but of one school alone. I see in his place the former Secretary of State who insisted on the creation of Strathclyde, which comprises half the population of Scotland, and probably more teachers than there are in the remaining regions. He insisted, against the wishes of this House, on the creation of Strathclyde. That region has a terrible task. I do not know whether the Government have been helping in this and I do not believe it is good for democracy.

My Lords, first, I should like to say how pleased I am to see the noble Lord, Lord Ross, back in this House. Whenever he contributes to a debate, he always gives one food for thought. The noble Lord's remarks are predictable. He questions the whole business of capacity and how that is determined. I think that I have that point. It is for the education authorities to decide in the first instance. The education authorities must have measures of school capacity in any case and, provided that these are reasonable, there should not be any grounds for dispute.

However, when it comes to the overall responsibility for education in Scotland, that must be the task of the government of the day. On this aspect, the Government believe that a clear case has been made out for them to take account of capacity and a full roll, as indeed applies in the case of Paisley Grammar School, as has been mentioned. That is why they have laid this order.

My Lords, am I right in thinking that Strathclyde Regional Council commissioned a fairly long exercise by a review group to look at all its schools because it has a very large number of excess places? The review group has reported, and there has been a considerable internal row within the Labour administration of Strathclyde about which schools should be closed. However, it has been possible for them to agree upon only a few schools at the present time. Among those schools—most of which, as I understand it, are schools with rolls which have fallen or with very out-of-date premises—one particular school, Paisley Grammar School, is booming. It has enormous parental support but it has been recommended to be closed on doctrinaire grounds alone. Therefore, does the Minister not agree that all governments have a duty to have arrangements whereby it is possible to come between doctrinaire politicians and the wishes of parents for a booming school and that that is what this particular measure is about?

My Lords, I am grateful to my noble friend Lady Carnegy of Lour for her comments. First, I insist that, although Paisley Grammar School has been highlighted in this debate, this is not a special measure for one school. Paisley Grammar School is only one example. Any school operating at or near capacity will receive the same treatment. My noble friend Lady Carnegy mentioned the review group in Strathclyde which is looking at this problem. The eduction committee of Strathclyde Regional Council still has to make its decision. The order that we placed yesterday comes into effect immediately and it will have to take that into consideration.

4.45 p.m.

My Lords, why did the Government not do this at the start? We knew 10 years ago that there would be a problem in relation to the closing of schools. In the very Act that passed the power from the Secretary of State to the local authority is the power in which, effectively, they resurrect the power of the Secretary of State to intervene. We object to the strange use of regulations stemming from an Act which reduced the power of the Secretary of State effectively to sneer at local democracy. Is this doctrinaire? There is nothing doctrinaire about dealing with a situation in which the Government have been asking local authorities to get rid of over-capacity. We are not dealing with one school in Paisley. There are six schools. If you change one then you change the attitude of them all, or will the Government financially support the retention of schools that create the over-capacity? Will they do that?

My Lords, I am sure that the noble Lord, Lord Ross, with his experience, will understand that schools which have full rolls are in a very different position to those which are half empty or less. That is a matter which the Government quite rightly have to take into account in considering overall education policy. Certain categories of case have already come forward for the approval of the Secretary of State. The noble Lord, Lord Ross, made that clear under the 1981 Act; namely, where closure would involve long distance travel for pupils. This is only an extension of our selective involvement.

My Lords, the noble Lord, Lord Ross of Marnock, seems to have brought me into this debate. Perhaps I should ask my noble friend if he thinks that the creation of Strathclyde, to which the noble Lord, Lord Ross, referred, has caused the problem with which he is dealing today; if so, that was my decision 15 years ago. It was recommended by the Wheatley Royal Commission which was unanimous that there should be a two-tier system of regional and distict councils. I reduced the size of Strathclyde. It was smaller when it came into existence than had been recommended by the Royal Commission but it is difficult to say that it should not exist at all. The problem is that half the population of Scotland live within about 15 miles of the centre of Glasgow. That is the problem which had to be dealt with in the reorganisation of local government.

My Lords, in the presence of two ex-Secretaries of State for Scotland, it would not be for me to enter into an argument on whether or not Strathclyde is the right size.

My Lords, it is rather important to consider what the noble Baroness, Lady Carnegy, said when she talked about a row in the Labour group. There was no row. It was just a normal problem that one has in any group when one is making selections about closing this or that school. All of us who have been in a representative capacity, particularly in the other place, know that as soon as a school is going to close, the people naturally do not like the change.

It is important to realise that in Strathclyde the surplus is such that a number of schools have been turned over to, and adapted for, housing. There is a particular problem at Paisley. I shall read the Minister of State's words very carefully. I believe he suggested that it all started because of Paisley Grammar School. As I have said, and as my noble friend. Lord Ross of Marnock has said, we are talking about six schools, all within a fairly small area, all well within travelling distance one from the other. The education authorities have more than just the numbers in the school to think of. If there are six schools, they are in different conditions as regards repair, age and facilities. I understand, although I have not had much time to look at the details, that one of the schools in the area could quite easily be called Paisley Grammar School. It is extremely well equipped with sports facilities, gymnasiums and, I believe, a swimming pool which the existing Paisley Grammar School does not have.

It is wrong to say that only an ideological point is involved. It has been suggested that this other school, or one of the other schools, could be called Paisley Grammar and continue the traditions. As I said, the local authority has to consider more than just the capacity of the school. There may be a school with a wonderful tradition which is falling about one's ears and it would be wrong to keep that school open if there was another fine school well within travelling distance.

My Lords, does not the noble Lord agree that the condition of the buildings is the least important aspect? Surely it is the excellence of the school that matters.

My Lords, I thank the noble Lord, Lord Carmichael, for his further contribution. I have to say that it is the duty of education authorities, as it is with cases under present regulations, to come forward with their plans. There is nothing for my right honourable friend the Secretary of State to consider until the educational committee of Strathclyde makes proposals. It will then have to consult parents as required under existing regulations. If the education committee still wishes to go ahead the case will come to my right honourable friend the Secretary of State for Scotland.

We should not pay too much attention to the present case—and I say quite clearly that Paisley Grammar School has raised this point. However, what the noble Lord, Lord Carmichael, says about other conditions will obviously be taken into account by my right honourable friend the Secretary of State for Scotland when he considers that point.

As regards the buildings, the noble Lord, Lord Mackie of Benshie, makes a very interesting and valid point.

Local Government Bill

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.

Arms Control And Disarmament (Privileges And Immunities) Bill

7.5 p.m.

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move on behalf of my noble friend Lord Glenarthur that the order of commitment be discharged.

Moved, That the order of commitment be discharged.—( Lord Trefgarne.)

On Question, Motion agreed to.

My Lords, I beg to move that the House do now adjourn during pleasure until 8.6 p.m.

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

[ The Sitting was suspended from 7.6 to 8.6 p.m.]

Local Government Bill

House again in Committee on Clause 17.

[ Amendment No. 91 not moved.]

moved Amendment No. 92:

Page 15 line 34, leave out paragraph (h).

The noble Earl said: I can only speak on the Building (Scotland) Act 1959, which was the introductory Act to the Building Standards (Scotland) Regulations which lay down the scantlings of any structure to be erected. Because of these very strict regulations in Scotland dealing with damp-proofing, daylighting, ventilation, construction, etc., the average house costs 10 per cent. more to build in Scotland than south of the Border. I should always advise anybody wishing to build a house in Scotland to make certain that the erection of the house complies with these regulations because that is in the house-owner's interest.

If any building contractor or direct labour organisation, for that matter, employs technical, professional services under Section 31 of that Act, I should have thought that would be in the interests of the client. As a final point, every proposed building has to have a building warrant from the local building authority. This is completely separate from any planning requirement. Before 1974 in any town this was obtained from the Dean of Guild Court. I do not think there was an English equivalent. I beg to move.

I am grateful to my noble friend for tabling this amendment. It may just help the Committee if I explain the background to Clause 17(5)(h). This subsection will have no effect on the standards with which builders have to comply under the building Acts and associated building regulations. We must continue to ensure that building work is carried out to an adequate standard, and nothing in this Bill will interfere with that.

I hope that is of some relief to my noble friend, because he mentioned the very real concern that there is to make sure that building standards are maintained. Traditionally local authorities have been charged with the job of inspecting building work to check that it complies. This has been done by building inspectors, whom they employ. In order to provide a degree of choice for builders and to encourage greater efficiency through competition, the Building Act 1984 enabled the Secretary of State to approve other bodies as competent to carry out this inspection work. One body has been approved to date—the National House Building Council.

In response to this, a few authorities have started to insist that contractors carrying out work for them must use their building inspection services. We regard this as an unacceptable abuse of the contractual process, and Clause 17(5)(h) will stop it. My noble friend's speech highlighted the differences in the building control system north and south of the Border. While the NHBC does not offer the same alternative to local authority building control north of the Border, its designation to assess the compliance of standard house designs with the building standards regulations on behalf of the Secretary of State for Scotland under a new class warrant scheme is under active consideration. Although there is no reason to believe that Scottish local authorities would act improperly, it seems both reasonable and prudent, therefore, that this clause should apply to Scotland. I trust that in the light of what I have said my noble friend will feel able to withdraw his amendment.

8.15 p.m.

We are concerned with standards in complying with building regulations. Perhaps as a layman I assessed wrongly what the noble Earl said, but I understood him to say that with the work that goes into it a building in Scotland has a 10 per cent. higher value than its counterpart in England. I do not know whether or not I heard him correctly.

It is obviously better to make a good investment in a house at the beginning than to try to make up the leeway afterwards. I have been involved in housing and the building industry over a great many years. There is a great deal of worry in the industry about slippages in quality control. Some of the professional organisations, which are totally independent of politics, express grave concern about the present push—although this point is not directly related to the amendment, there is a connection—for self-regulation, self-inspection and self-certification. The Institute of Clerks of Works is deeply concerned.

Only a few months ago, the institute issued a brochure expressing the fear that the role of those involved in maintaining standards would be diminished. I introduced the brochure for the institute and it received full support from Her Majesty's Government. It is completely non-political. I made the point that in other spheres of life higher standards of quality control are always being demanded. When I first went into engineering as a boy the fact that the job was done by a skilled engineer was almost sufficient. During the war, because serious risks could have been involved if the job was not done to a sufficient standard, quality control was greatly increased. If we are not careful this Bill could lead in certain respects to a lowering of standards. I am sure that the Minister and the Government would not wish to see that happen.

I have mentioned the Institute of Clerks of Works. I know that the institute will shortly meet Mr. Trippier to discuss the problem. I also know that the Chartered Institute of Building, which is 200 years old, shares the same concern. If we do not take action in this Bill some of us will come back to it as watchdogs to make sure that the client not only in the public sector but generally gets value for money. I can see nothing worse than allowing self-certification in giant contracts. I believe that there is a role for the public building inspector. I am putting a marker down for the people who, historically, have been the safeguard of our standards, organisations such as the Institute of Clerks of Works and the Chartered Institute of Building. It is essential that we listen to them when they put forward their point of view.

I agree with the noble Lord, Lord Dean, that quality control is vital. The clerks of works have an important role to play. I would remind the Committee that the NH BC and local authorities apply exactly the same standards and that therefore there will be no diminution in quality control as a result of this Bill. That is something the Government would not wish to see in any case.

I am grateful for what has been said and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

had given notice of his intention to move Amendment No. 92A:

Page 15, line 36, at end insert—
("(5A) Nothing in subsection (5) above shall prevent a local authority from making reasonable inquiries of a contractor as to the record of relationships between management and workforce in the course of the previous five years.").

The noble Lord said: Although the Committee touched on the principle involved in the amendment earlier in the evening, I think it is as well to highlight what the amendment means to the local authorities. Clause 17(5)(d) suggests that the activities of contractors in trade and industrial disputes are a non-commercial matter. Local authorities feel that the industrial relations record of certain firms is relevant. We feel that this point should be taken into account.

The amendment would allow local authorities to make reasonable inquiries of a contractor about the record of relations between management and workforce in the course of the previous five years. There are organisations which in contracts with local authorities over the years have a poor record of industrial relations. One rarely comes across this with bona fide companies which service the public sector because they always have a high regard for good public relations on the basis of forward planning and ensuring that they have the workforce necessary for carrying out a programme.

I find it difficult to believe that virtue is all on the side of local authorities. The industrial relations between a local authority and its workforce are of course a prime responsibility of the local authority. I am not so sure that I agree that local authorities should use their precious time and resources in taking a detailed interest in the relationship between the management and workforce of either their potential contractors or even their actual contractors. Their responsibility is to ensure that they get the best possible service as prescribed by the local authority in the form of the specification for the contractor to see and that it is delivered to the standards that the local authority has predetermined.

I think that the way a company employs its staff and looks after them is a matter for the company. The private company, just like the local authority, is subject to all the laws of the land on industrial relations. It seems to me that we should not empower a local authority to become even more involved in a private company except in terms of getting the service that it has paid for, prescribed and wants delivered.

Perhaps I should intervene at this point. I understand that this group of amendments was decided and rejected on Amendment No. 83A.

No. With great respect, they were decoupled from Amendment No. 83A. Amendment No. 83A was the subject of the very first general debate of the day, and it is quite clear that these amendments were decoupled from that. They are now listed separately.

May I seek clarification on that? Amendment No. 83A states:

"except as otherwise provided under subsections (5A) to (5E) below".
We voted on that and overwhelmingly that amendment was rejected. It covered precisely the same ground as the amendments that we are discussing now.

If that is the case, why did the Minister's advisers agree to decouple the amendments and list them separately in the groupings? The Minister well knows what happens before a debate starts. His advisers make a suggestion as to which amendments should be grouped together. Those of us who are involved make our suggestions. Because we wanted to deal at length with each of the separate issues we indicated that we wished them to be separated so that we could deal with them separately. That is what we have done.

If there has been a mistake either by the Minister's advisers or by ourselves, it is not a matter of moment. But these issues are very important and we have something to say now which we did not say earlier. I started to broach a certain aspect on Amendment No. 83A and, quite rightly, there were noises to the effect that I should deal with the point later. That is what we are trying to do now.

I am very happy to take advice on this, because that is the right way of dealing with such matters. Of course it was said that we could deal with these points later because they can be raised later. But as I understand it, and I stand to be corrected, the fact that the amendment was then voted on altered the position completely. But I shall he happy to take advice on that.

I understand that what the Minister says is correct. I can only suggest, if I may, that perhaps the points which the noble Lord wishes to raise can be raised on the clause stand part debate.

Perhaps we are being invited to have the longest clause stand part debate in history. Let the Minister be quite clear. If there has been an error, then the way to deal with these matters in detail is to debate them with the general reasons why the clause should not stand part of the Bill.

There has not been an error at all. The noble Lord took his amendment to a Division and it was settled in the Division Lobbies. I cannot stop him discussing anything on clause stand part. But I think we should obey the Rules of the House, and the advice that I have now received is that it is not in order to speak to these amendments because they have been specifically voted on.

It is no good the Minister telling me that no error has been made if I have admitted making an error. When we asked for the amendments to be decoupled it was on the basis that we could deal with them separately later. That was our error. What I am saying to the Minister in the light of that error is that we still have a lot to say on the subject matter of these amendments and, as the Deputy Chairman has kindly pointed out, the opportunity will occur on clause stand part. I am not getting excited.

Then we move on slightly at this juncture. I think that Amendment No. 93 has already been discussed and therefore it is not moved.

[ Amendment No. 92A not moved.]

[ Amenthnents Nos. 92B, to 93 not moved.]

8.30 p.m.

moved Amendment No. 94.

Page 16, line 48, at end insert ("with the exception of bodies, associations or employers' associations of any sort which are designed to promote a particular standard of expertise").

The noble Lord said: The purpose of this amendment is to remove the prohibition placed on authorities by the Bill to ask contractors about their potential or actual membership of trade or employers' associations that are designed to promote standards of expertise in the contractor's trade. The first argument for this amendment is quality of work. Without the opportunity to ask contractors about actual or potential membership of employers' associations authorities will not be able to guarantee that work is undertaken by properly qualified and experienced contractors. As a result authorities will be unable to fulfil their legal duties in this respect.

Many employers' associations operate technical guarantee schemes based on the technical standards of contractors in membership. Membership of such associations is therefore an indicator of quality assurance to an authority. For example, West Lothian District Council, along with the gas and electricity boards, insists that central heating, gas and electricity contractors are approved by the Solid Fuel Advisory Service or the National Inspection Council for Electrical Installation Contractors. If the Bill is passed unamended, the council will no longer he able to guarantee this quality from its contractors.

I want to pause for a moment and remind Members of the Committee that a few years ago a tremendous number of home improvement and repair grants were applied for individually. In the main the properties concerned were older terraced houses and an appalling situation developed in the building industry. Local authorities had then to be brought in and they increased their standard of inspection so that ordinary people who were applying for these grants at the bottom end of the scale were not taken for a ride. But thousands of them had already been taken for a ride—I am talking about grants of between £3,000 and £7,000—by cowboy, do-it-yourself, odd-job men who called themselves builders.

In hundreds of cases all over the country work was left half-finished. Nobody could chase up those people, nobody could find where they went and, as I said, local authority building inspectors were eventually allowed a more robust role. We have to be very careful that we do not get into that situation again because of some of the proposals in this Bill.

There are further items covered by this amendment. For instance, there is public safety. If authorities are unable to secure properly qualified contractors, a clear threat is posed to public safety. A recent study of scaffolding contractors in London conducted by the Health and Safety Executive highlighted a deplorable lack of basic safety practice among many private contractors. Such neglect would spread throughout much of the public sector if the Bill were unamended.

I have first-hand experience of a housing contract in Manchester where some maisonettes were being built and the private builder went broke. We had to call in the building department because of the atrocious standard of scaffolding, which was the absolute minimum to do the job. Every time the men went up the scaffolding there must have been a risk to life and limb.