asked Her Majesty's Government:

No, my Lords. The Government intend the Greater London Authority election to be held on 4th May, as planned. We therefore laid a slightly modified set of election rules on 23rd February, and plan today to re-lay the election expenses order.

My Lords, I thank the Minister for that Answer. However, is it not clear that these problems would not have arisen if the Government had not tried, in the words of my noble friend Lord McNally, to "fix and fiddle" the London election? Is it not the case that a freepost is what 5 million Londoners want, and should have?

My Lords, as the name of the noble Lord, Lord McNally, has been mentioned, I offer my congratulations to him on being able to recite the second verse of "The Red Flag" on radio yesterday. I mention that because he, too, is familiar with fixing and fudging. If we were trying to fix and fudge the Greater London election, we have not made a very good job of it! Our concern throughout has been that all candidates should have a level playing field and that the process should not be subject to abuse. Therefore, as I explained at some length the other day, we are looking to ensure that candidates can get their message across without opening up the process to abuse and vast expenditure. We are in discussion with the other parties on the way in which that can be achieved. I believe that when we consider the Representation of the People Bill tomorrow, all parties will concur that we have found a way out of the difficulty.

My Lords, would not the Minister like to encourage independence I say that without prejudice—and, therefore, does he agree that the lack of a free mailshot places enormous power in the hands of the party machine, both mine and his? Would not the noble Lord like to encourage independents to stand for election as mayor, both in London and in other cities?

My Lords, I fear that if I were quoted as saying that I wished to encourage independents, it might well be misconstrued at this point! We want anyone who has the requisite number of signatures and who is prepared to run a proper political campaign for the post of mayor to have access to all means of communication with the public. We believe that we shall find a way of doing that which does not lead to the kind of abuse about which I was worried.

asked Her Majesty's Government:

My Lords, the values placed by the stock market on Internet and technology companies reflect investors' expectations of their future earnings.

My Lords, I am sure that everyone will be as impressed as I am by the succinctness, if not the wisdom, of that reply. Is the Minister aware of the enormous demoralisation that has been caused over recent years to key groups of employees such as teachers, those in the medical professions, social workers and the rest by the immense and growing disparity in remuneration between them and the City? Is he further aware, therefore, of the damage that will be done, and is being done, to the willingness of those groups and many others to remain within education, health and social work by the extraordinary casino-like activity in respect of technology stocks? Is there not a scintilla of socialist wisdom remaining from the present Government's long past on which they can draw to exert some control over what is, by any reckoning, something of a Stock Exchange farce?

My Lords, I am glad that in the latter part of his supplementary question the noble Lord got round to the subject matter of his original Question, which enables me to attempt to answer it. Yes, of course there is huge resentment about the disparity in incomes between those who are seen as gamblers and those who devote their lives to public service. That is only natural. I do not know whether it was George Soros himself or someone commenting at the time of George Soros' major coup who described the stock market as alternating between greed and fear. For that reason especially, I do not think it right for the Government to attempt to second-guess the stock market.

My Lords, perhaps I may take this opportunity briefly to congratulate noble Lords opposite on their birthday. Is the Minister aware that the number of private investors buying shares on the Internet in Britain is reportedly doubling every three months? Are the Government satisfied that the message from Christine Farnish, director of consumer relations at the FSA, that

"Consumers investing their money in smaller company shares need to know that the prices of those shares can be very volatile—both up and down. They need to think carefully about the risks involved before deciding what shares they buy and how many",

is being adequately disseminated?

My Lords, on behalf of all my noble, right honourable and honourable friends, I am grateful to the noble Earl for his congratulations. As regards the proceedings at the Memorial Hall, I was never quite sure whether the final decision was for the 27th or the 28th, which is possibly why we have been celebrating both days—and why not? The remarks from the FSA quoted by the noble Earl sounded very sensible to the Government at the time. I am sure it is in everyone's interest that investors, particularly private investors, should be aware of the difficulties and dangers referred to. We are grateful to the noble Earl for disseminating them more widely.

My Lords, I hope that I misunderstood the Minister. He said that in his view Internet entrepreneurs were gamblers. I hope that that is not true. If the gamblers to whom he referred in an earlier supplementary answer are those who invest on the Internet, why should not doctors and the other people to whom the noble Lord, Lord Phillips of Sudbury, referred profit in exactly the same way as any other investor?

My Lords, the noble Lord has doubly misunderstood me. I certainly did not say that Internet entrepreneurs were gamblers. In response to the noble Lord, Lord Phillips, I said that those who worked in the public service resented the difference between them and those whom they regarded as gamblers. I did not myself use the word "gamblers". However, it is true that the Internet and information technology generally make a huge contribution to the success of this country, and it is important to encourage it in every way. Whether that leads to a particular valuation of any stock is a matter for those entrepreneurs and the market, not the Government.

My Lords, can my noble friend assure the House that the Government have already taken into account the grossly artificial values reflected in some very prominent stocks at the present time? In particular, can the Minister tell the House how the Government will deal with the very serious questions that will arise when the bubble inevitably bursts?

My Lords, I am not sure that I fully understand what my noble friend recommends the Government should do. We cannot intervene directly, or even indirectly, in free markets; that is not our role. We do not seek to second guess the markets. I also made clear in response to the noble Earl, Lord Northesk, that we agree with those in the Financial Services Authority in particular who express caution about some of these stocks and advise great caution on the part of investors. It appears likely that a large number of those stocks which are valued very highly without ever having shown a profit will collapse, as my noble friend suggests. However, that is not a recipe for the Government to intervene.

asked Her Majesty's Government:

My Lords, we are committed to fairness in taxation, and the Chancellor of the Exchequer keeps all aspects of the tax system under review.

My Lords, I am grateful to my noble friend for that reply. Is he aware that at present the partner in a gay relationship with a higher earning capacity may be obliged to take out costly life insurance to cover inheritance tax that is payable by the surviving partner? Can my noble friend also tell the House whether gay couples are likely to be granted the same rights as married couples to designate next of kin and make decisions on the medical treatment of an incapacitated partner?

My Lords, I am grateful to my noble friend for being grateful for what I thought was a rather unhelpful Answer. My noble friend is right that the inheritance tax laws in this country discriminate in favour of married couples and against unmarried couples, whether of the same sex or heterosexual. Whether changes should be made to inheritance tax is a very much wider question than the issue of same sex couples. As to the second matter raised by my noble friend, I can be a little more encouraging. The Lord Chancellor's Department believes it should be possible to name next of kin, for example when somebody goes into hospital, on the basis of the person whom the patient wishes to designate rather than a blood relationship. When there is parliamentary time available that will be made possible. In other words, the situation should be comparable with the existing rules on enduring power of attorney where it is possible for an individual to designate somebody else regardless of relationship.

My Lords, is it not right that those who escape moral and legal obligations by not entering into marriage should not be entitled to the privileges which are rightly granted to married couples?

My Lords, I do not accept that those who do not marry escape moral obligations. Taxes are about raising money, not about being for or against particular lifestyles.

My Lords, without asking the Minister to anticipate anything that may be decided by his right honourable friend the Chancellor of the Exchequer, does he agree with his right honourable and noble friends at the Department of Social Security that it is important to encourage private provision for retirement where that is financially appropriate? In the light of that, does the noble Lord agree that, if two law-abiding citizens who live in a single household wish to provide for each other's retirement, it is in the interests of the Treasury and the taxpayer to allow them to do so?

My Lords, the noble Earl has extended perfectly legitimately the scope of the Question from inheritance tax. My answer to him, as to my noble friend who asked about insurance, is that nothing in our laws discriminates against same sex couples as opposed to couples of different sexes.

The Question relates specifically to inheritance tax. The lower threshold for the payment of inheritance tax is an estate of £231,000. A large proportion of couples will not be above that threshold.

My Lords, does the Minister agree that it is an extremely difficult Question? The mind boggles at its implications. For example, why should couples living in a homosexual relationship have preference over two males or two females who live in a platonic relationship? Although they are not living in a homosexual relationship, in order to gain some relief from inheritance tax they might declare that they are homosexuals. If two brothers or a brother and a sister declared that they were living in a sexual relationship in order to gain benefit from the inheritance tax, they would be pleading guilty in advance of a court hearing to committing a criminal act.

My Lords, I very much fear that my noble friend has a dirty mind.

My Lords, I simply cannot accept that implication. I have been accused of having a dirty mind and I take that very seriously indeed. Noble Lords may laugh, but I do not have a dirty mind; in fact, I have a particularly clean mind. I hope, therefore, that my noble friend will withdraw that remark, whether he made it in jest or otherwise.

My Lords, if my noble friend is offended, of course I withdraw my remark. Some people think that a dirty mind is a perpetual feast.

As regards his specific question, no preference is being suggested for homosexual couples. It was not suggested by my noble friend Lady Rendell. My noble friend asked for a wider extension of the rules for inheritance taxes than for married couples as at present. There is no question of preference there.

My Lords, I believe that the point raised by the noble Baroness relates to the marital home or the home in which the two people live. Will the Minister accept that there are two answers. First, any person living with another—whether brother, sister, father, child or whoever—should have the right to nominate one person to continue living in the family home. That would avoid all discrimination. The second would be to adopt the Australian system and abolish inheritance tax.

My Lords, the noble Baroness raises an important question which has been tested in the courts. In the case of Fitzpatrick v. Stirling Housing Association Limited it was found that it should be possible to pass on a tenancy other than to a legal spouse. As a result, the Department of the Environment, Transport and the Regions has issued advice to local authorities and to the housing corporation on behalf of housing associations that they should permit a designated succession of tenancy pending legislation, whenever that can take place.

My Lords, if inheritance tax is to be looked at, could the situation of a son or daughter who has cared for an aged parent be considered? He or she sometimes does not have the benefit of the property being passed on without tax. It is an important point.

My Lords, by her question my noble friend illustrates the difficulty of considering inheritance tax. Inheritance tax is indeed being considered. All taxes are looked at all the time. However, the problem which my noble friend raises is one of the many considerations for the Chancellor and Ministers when they carry out a review.

My Lords, does not the Minister's reply point up a problem for the Government? They want to modernise everything but never think through what it means. The Government say that they want to repeal Section 28. They say that they want to equalise the age of consent. They say that there should be no discrimination against people on the ground of sex. If that is what the Government believe, is not the logic of their position that they should now equalise the tax treatment of gay couples by allowing gay couples to marry?

My Lords, again the noble Lord raises an important question. The issue of civil marriages for gay couples has been raised recently in France with the tax law. Many people in this country have a lot of sympathy with that. It goes a great deal wider than same sex civil marriages. One proceeds as best one can to make the changes that one can make consistent with the views of the people of this country.

My Lords, can the Minister tell the House the value each year of inheritance tax to the Exchequer? Approximately how much are we talking about?

My Lords, I should be able to tell the noble Lord. I am unable to do so. I shall write to him. It is a considerable amount of money, although it applies to a relatively small number of people.

My Lords, will the Minister press his right honourable friend the Chancellor of the Exchequer on this matter? First, I declare a personal interest.

Many noble Lords will have known Lord Montague who died in this Chamber some months ago. Some of your Lordships will be aware that he had a partner, Takashi, of some 35 years' standing. However, perhaps few noble Lords realise that in addition to the grief and pain of losing Michael, Takashi is now being forced to sell the home in which they lived in order to pay inheritance tax. The testing of such cases of long-lasting relationships cries out for the law to be changed.

My Lords, my noble friend does well to remind us of the specific case of our dear friend Lord Montague. Because the benefit inheritance tax affords to the surviving spouses has been so wide, historically the definition has been particularly narrow. My noble friend may well be right in thinking that a change has to take place. However, it may have to take place with respect to the generosity of relief as well as to the extent of the availability. That is the balance which has to be taken into account.

asked Her Majesty's Government:

My Lords, the United Kingdom is working to ensure a successful outcome to the NPT review conference. We want to see discussion concentrate on substantive issues. However, the conference will also have to discuss outstanding procedural issues, such as establishing subsidiary bodies.

My Lords, I thank my noble friend for that Answer. Is it not the case that there is evidence from the Geneva conference that the discussion of procedural issues is used for the purpose of not arriving at any decision of substance and progress towards nuclear disarmament? Is it not necessary for my noble friends in the Government to take some exceptional steps to avoid that; for example, asking the Prime Minister personally to represent this country at the review conference so as to make it clear that we regard movement towards world nuclear disarmament as important? Are there not one or two procedural activities, such as putting one's own Motion on the table, which would avoid the general non-progress which took place in Geneva?

My Lords, my noble friend raised a variety of points in his supplementary question. I have said that we want progress at the conference, but there is no doubt that some procedural issues—and I am sure that my noble friend knows them in greater detail than I—must be resolved. However, it is true that the UK is concerned about the prospects for the review conference. We are looking for the conference to result in a balanced review which takes account of the positive steps which both we and other nuclear weapon states have taken over the past five years and which also sets a realistic agenda for the next five years.

My noble friend raised the question of the Prime Minister going to the conference. The British delegation will be led by my right honourable friend the Minister of State at the Foreign and Commonwealth Office, Mr Peter Hain. That is the normal representation at such review conferences. The one exception was in 1995 when the Secretary of State for Foreign Affairs, the noble Lord, Lord Hurd, attended. That was a special conference and it has been the one exception. Therefore, the UK delegation will be led at the usual level.

My Lords, does not my noble friend agree that the principal question is not whether we make progress at the review conference but whether we can run fast enough to stay in the same place? Is there not a profound mistrust among the non-nuclear powers that the nuclear powers are not taking their obligations under the treaty seriously? How do the Government propose to persuade them that we do not all share the philosophy of the American Senate?

My Lords, perhaps my noble and learned friend Lord Archer of Sandwell will forgive me if I do not take up his last rather provocative sentence. The UK has done more than most to carry out the NPT agenda. We shall make that clear, but the non-nuclear weapon states recognise that. Since the end of the cold war we have reduced the number of our operationally available warheads by 50 per cent. Most recently, we did so in the 1998 Strategic Defence Review when we announced a reduction of one third in the previously planned number of warheads. The UK has maintained its remaining forces at reduced readiness.

I could go on, but I shall make one further point to demonstrate how far the United Kingdom has gone along that road. We have been completely transparent about our military stock of nuclear material, declaring that portion of it which is no longer needed for defence purposes and arranging to place that surplus material under EURATOM safeguards and to make it liable to inspection by the IAEA. We have an excellent record that the non-nuclear weapon states must recognise.

My Lords, we recognise that the Government have done a good deal to reduce the British nuclear deterrent. However, beyond the procedural issues in the conference, does the Minister not accept that the point made by the noble and learned Lord, Lord Archer, about the commitment of many within the United States Senate and Administration to pursuing theatre missile defence is the largest single issue hanging over the future of the nuclear non-proliferation review conference? Can she assure us that the Government are making firm representations to the United States about the dangers which the pursuit of theatre missile defence would mean for the non-proliferation regime?

My Lords, the United Kingdom has made very clear to its allies in the United States what it feels about this issue. We have stated from this Dispatch Box that we shall continue to make our position very clear.

My Lords, to what extent is the Minister concerned that the failure to agree a work programme at last year's summit conference on disarmament risks undermining the credibility of the conference on disarmament as a whole? What action do the Government intend to take at the conference's 2000 session to prevent a repeat of the deadlock, particularly given the words of the outgoing president of the conference, Ambassador Leslie Luck of Australia, that the conference could not credibly remain idle for another year?

My Lords, that is exactly the problem which faces us all as we come up to the review conference in New York. The Government have been active in speaking to both nuclear and non-nuclear weapon states. The chair of the forthcoming conference is Algeria and we shall be in close contact with all parties concerned. It is of vital importance to us and to everyone that the conference is a success. We are doing everything politically and diplomatically to try to ensure that it will be.

My Lords, an article in last month's Spectator suggested that we might share our deterrent with France; indeed, that we might create a Eurobond. Will my noble friend the Minister explode that myth?

My Lords, I am not sure that that is the correct verb to use on this topic! However, I am grateful to my noble friend for asking that question because it gives me an opportunity to say that it is not true. We have warmly welcomed the growing co-operation on defence issues between the UK and France, but the UK nuclear forces remain operationally independent and under the Government's full control at all times. There are no plans to change that.

My Lords, at a convenient moment after 3.30 p.m. my noble friend Lady Amos 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 Mozambique.

moved Amendment No. 1:

Page 1, line 18, at beginning insert ("subject to section (Discrimination in the provision or facilities or services) of this Act and to sections 2A and 2B of the Local Government Act 1986,").

My Lords, the House will be grateful to the noble Lord, Lord Campbell of Alloway, for drawing to our attention all the legal and legislative complexities we face when discussing this issue. It is an interesting coincidence that the amendment tabled by my noble friend almost follows on from the Question tabled today by the noble Lady, Baroness Rendell of Babergh. As an amateur at this game, I admire my noble friend's experience as a parliamentarian and his skill as a lawyer and wordsmith which enabled him to table the amendment at the start of our proceedings today.

The amendment will give the House, if it chooses, the opportunity to continue a debate which it undertook for well over five hours only a fortnight ago. I suspect that the House may decide that that is not the most useful way in which to spend an afternoon. I have no wish to do anything which would restrict the freedom of the House to discuss the matter for as long as it wishes. However, it seemed to me that after our earlier debate and its result there would be discussions between the Government, the bishops and other interested parties to bring this subject to perhaps what some might consider to be a more felicitous conclusion than the one reached. However, perhaps my noble friend Lady Young might think that the conclusion we reached is the appropriate one.

My Lords, I am obliged to my noble friend for giving way. I am not here to listen to or take admonitions from my noble friend on the Front Bench.

My Lords, I apologise to my noble friend if anything I said was "admonitory", if that is not a new word (I hope that I am not inventing new words). However, I apologise if that was the case. It was certainly not intended to be. However, it will be interesting to hear what the Minister might have to say on the progress of such discussions. It seems clear that the matter will return to this House before the Bill is eventually passed. It will clearly have to go from this place to another, and to return here for further discussion. There will, therefore, be a great deal of opportunity for further debate after the discussions between the interested parties have taken place. I believe that that would be a more preferable way in which to deal with the matter. For that reason, we shall not be supporting my noble friend this afternoon.

My Lords, I assume that the Minister may tell us that, as far as concerns Sections 2A and 2B of the 1986 Act, Amendment No. 1 is not necessary because, until what we have come to refer to as "Section 28" is repealed, it remains on the statute book. As with other restrictions, it will apply to the exercise of the powers of local government. Indeed, to take one example, I believe that is why we have Clause 5 in the Bill. That clause gives certain powers to the Secretary of State to repeal, revoke or dis-apply enactments which may obstruct local authorities from exercising their powers. I, too, have no wish to re-run the debate referred to by the noble Lord, Lord Dixon-Smith. As far as we are concerned, it is sad that that is the case. Our views on Section 28 are well known.

Perhaps I may respond to one of the comments made by the noble Lord, Lord Campbell of Alloway. I make clear that we support the powers which are to be given to local authorities under Section 2. As we established in Committee, such powers must be exercised reasonably.

The noble Lord referred to his later amendments. I confess that I do not understand Amendment No. 81. I am sure that that is my failing, not that of the draftsman. The amendment refers, among other things, to the delivery of education and healthcare and allows for them to be discriminatory. It is almost implicit that education must discriminate in the sense that it provides for individuals. I have some difficulties therefore with the clause though of course I accept the good intentions of the noble Lord to try to clarify the position.

I have some difficulties also with Amendment No. 82. As was said, we shall return to this topic under the question of guidelines, though it would perhaps be better debated as part of the educational provision rather than simply local authorities. However, I am unclear as to how, as a matter of practice, governors would apply this provision. Currently, sex education is a matter for the governors. But for individual items to go before a board of governors for approval may prove extremely cumbersome. My experience of schools is that different governors have responsibility for different areas, including the area of the curriculum under which sex education generally falls. So governors will be involved in any event.

I am not clear what may be taken to fall into the category of "sexually explicit" material. It could be interpreted very widely by those who are mischievous. It occurred to me that Romeo and Juliet or A Midsummer Night's Dream—particularly the relationship between Titania and Bottom—could fall within that category. It is a difficult road down which to start.

My Lords, I find myself in some difficulty with these amendments, partly because they are highly technical. I do not feel that they are necessary, particularly Amendment No. 1. In that regard I echo what was said by the noble Lord, Lord Dixon-Smith, and the noble Baroness, Lady Hamwee.

The noble Lord, Lord Campbell of Alloway, was gracious in his comments in relation to myself and the amendment I placed before the House. But let me repeat what I said last week on another Bill; that is, that the discussions with the Department for Education and Employment, and in particular with the Secretary of State, continue. I am sorry that we have not by this stage been able to see amendments which may well be made to the Learning And Skills Bill, which is perhaps—as was hinted at by the noble Baroness, Lady Hamwee—the proper place to continue this discussion.

The Secretary of State has to see a number of interested parties and not just the Churches. I should not like to think of it as a "concordat" between the Churches and the Government; the consultation is much wider than that. The Churches play their part and, fortunately, I have been able to play some part also. I am among those who hope that the noble Lord will withdraw the amendment at this stage in order to allow the discussions to continue and for the Secretary of State properly to consult. I am hopeful that what will come out of those discussions may be helpful both to the House and, more importantly, to parents and others throughout the country who are looking for some kind of assurance.

My Lords, I listened with interest to the noble Lord, Lord Campbell of Alloway. I understand of course what he is driving at. I raise one or two purely technical points in relation to the drafting of the amendment.

In relation to Amendment No. 81, I have the fullest sympathy with any attempt to secure a policy of nondiscrimination. But I was once asked by the noble and right reverend Lord, Lord Habgood, in this Chamber, whether I could indicate a distinction between those grounds on which it was proper to discriminate and those grounds on which it was not. That is a question about which I am still thinking.

The noble Lord, Lord Campbell of Alloway, attempts to address that question in Amendment No. 81. I am not sure that he has it right. He has his non-discrimination provision,

"save in respect of counselling, health care, education and in the prevention of the spread of disease".

But does that adequately cover, for example, the case of disability? A PE teacher may legitimately wish to provide a slightly different regime for somebody with a club foot than for somebody with two able feet. In so doing, will be infringe the provision as presently drafted by the noble Lord, Lord Campbell of Alloway? This is a question which needs addressing and if we are to see more of this amendment, I hope that will be done.

I share the doubts of my noble friend Lady Hamwee in relation to the words "sexually explicit". I can remember some of the diagrams put in front of us in biology lessons when I was young. They were clinical, detached, accurate and about as unarousing as anything I can possibly imagine. But in the strict and literal sense they could perhaps have been described as "sexually explicit". Perhaps the Minister will take the advice of his noble and learned friend the Attorney-General as to whether or not those words have been included in previous legislation and, if so, whether we have any accepted judicial construction of their meaning. If not, we should be a little wary of using them.

My Lords, like the noble Lord, Lord Dixon-Smith, I hoped that we would move into the body of this Bill rather than attempt a rerun of discussions on Section 28. Having said that, I understand what the noble Lord, Lord Campbell of Alloway, is attempting to do, and that he is attempting to do it in as even-handed a way as possible. However, Amendment No. 81 does not do that and Amendment No. 82 runs into the sort of trouble just spelt out by the noble Earl, Lord Russell; namely, that there are serious judicial problems in defining what is and what is not sexually explicit and whether or not it is appropriate to use those terms in what is, after all, sex education.

I agree with the noble Baroness, Lady Hamwee, that Amendment No. 1 is unnecessary. In relation to what is now Clause 82, the principal decision of the House was made clear. The Government did not support that. It may be that another place has a view on that and, as the noble Lord, Lord Dixon-Smith, said, we will no doubt return to that in due course. However, the main anxieties addressed during that debate related to education and, as the right reverend Prelate the Bishop of Blackburn spelt out, constructive discussions are taking place between the Churches and my right honourable friend the Secretary of State. We will need a wider debate on their outcome, which will no doubt take place in the Learning and Skills Bill. I believe that we will achieve a satisfactory way of meeting most of the anxieties raised. It is not sensible, therefore, for the House to reopen that debate at this stage, though we may well have to return to it after the Learning and Skills Bill has been dealt with and the Commons has considered this Bill.

As it stands, the amendment is unnecessary. Clause 82 places a restriction on local authority action. Section 2 is subject to all other restrictions, including those within the Bill, and therefore the addition of the amendment would not create any further restriction on the ability of local authorities to act. The provision of well-being is a broad power for local authorities but it is subject to all other legislative restrictions. What is now Clause 82 is no different from any other in that respect.

Clause 3(1) of this Bill further states that the power under Clause 2(1) does not enable a local authority to do anything which it is unable to do by virtue of any prohibition, restriction or limitation on its powers which is contained in any enactment (whenever passed or made). That is clear. Moreover, the full implication of the adoption of this amendment and the related amendments would mean that the kind of discrimination to which the noble Earl referred—namely, specific provision for the disabled, for pensioners and other subsections of the community, including the gay and lesbian community—may fall foul of such a generalised provision. That is not the kind of restriction that is intended to be placed on local authorities in their pursuit of well-being because they all have varying communities containing different subsections that will require different treatment.

The general intention behind the amendment is unnecessary. Its effect would be to limit local authorities in what has been broadly accepted as a positive step towards the pursuit of well-being of the community and indeed might jeopardise it. I hope that the noble Lord will not pursue the amendment and that we can continue with the debate on local government reform rather than revert to discussions on matters covered by what was Section 28.

My Lords, I am grateful to all noble Lords who have spoken. I hope it has not been felt that the time spent on this discussion has been other than useful. I am asked if I will take the amendment back, and I am fully prepared to do so. I may return to the matter at a later stage when I have read what has been said in the debate. I beg leave to withdraw the amendment.

moved Amendment No. 2.

Page 1, line 20, leave out from beginning to end of line 2 on page 2 and insert—

("(a) the promotion or improvement of economic development and wealth creation in their area,

(b) the promotion of social development in their area, and

(c) the promotion of the Improvement of the environment in their area").

My Lords, the noble Baroness asks for clarification, and, by implication, indicates that she will not press the amendment. The noble Baroness has to some extent reflected the fact that there is a difference, as I explained in Committee. The terms of reference for a new organisation are spelt out in a different way to those that build on existing statutory and customer practice functions. These are already contained in the raft of local authorities' statutory and other functions.

I can give the noble Baroness some comfort in regard to her central concern. Notwithstanding the differences in the way the two powers are drafted, the well-being power given to local authorities under Clause 2 is in no sense narrower than that given to the GLA in Section 30 of the GLA Act. If the amendment is accepted, it could narrow the well-being power and leave local authorities with less scope to act than the GLA. For example, paragraph (c) refers to allowing local authorities to take action only to promote the improvement of the environment. The GLA has a power to do anything that furthers its principal purposes, but this might be construed as meaning that the local authorities could not do it themselves but should promote it among others. I am sure that that is not the intention, but there is a possibility, remote though it may be, of it being construed in that way.

We believe that Clause 2 is drafted in a way that best fits its purpose and gives the widest scope to local authorities to take action to improve the economic, social and environmental conditions of their communities. I hope that the noble Baroness is reasonably happy with my explanation and will not pursue the matter.

My Lords, can the Minister confirm in terms that the provisions set out in the amendment are all within the well-being powers as expressed in Clause 2? I appreciate that it is a technical point, and that that may be difficult.

My Lords, that is right, subject to the qualifications we referred to in our previous debate because, clearly, other statutory limitations may apply.

My Lords, I am grateful to the Minister for putting that on the record. I beg leave to withdraw the amendment.

moved Amendment No. 3.

Page 2, line 23, at end insert—

("() Action by a local authority outside its own boundaries shall only be undertaken with the consent of the authority within whose boundaries the action is to be taken.").

My Lords, I support what my noble Lord has just said. I have not been present at previous stages of the Bill, but I have read the proceedings with great interest. It is the intention of the Government that local authorities of various kinds and at various levels should co-operate, and that is of course right. However, the noble Baroness, who herself has great experience of local government, will know that it is quite possible for one local authority to be somewhat interfering in the responsibilities of another, and that there many devious ways in which mischievous people can act.

If one authority wished to take action within an area for which another authority is responsible, surely it would be right to make it absolutely clear in the legislation that the other authority should be in agreement. It is a simple suggestion. I rather hope that the noble Baroness will accept that the position should be clear in the Bill, especially when one thinks about how this will operate in practice between various local authorities.

My Lords, as my noble friend Lord Whitty said in Committee, we have sympathy with the intentions that lie behind Amendment No. 3. The success of both community planning and action taken under the well-being power depends on local authorities, including different tiers of authority, working together for the common good of their communities.

The noble Baroness, Lady Carnegy of Lour, drew our attention to something that we in England and Wales have never come across; namely, conflicts between local authorities. I am sure that that must be a totally Scottish phenomenon. As the noble Baroness implied in her contribution, we certainly expect authorities to adopt a sensible and responsible attitude to the new freedoms that the Bill will give them. Those freedoms are intended to allow local authorities to work together and take action for the common good of their communities. We shall make this point very strongly in the guidance that will accompany the powers.

The noble Lord, Lord Dixon-Smith, asked whether we are still considering some way of legislating in this area. I can assure him that we are still giving the matter consideration. However, we want to do so without imposing a disproportionate burden on local authorities. We do not want to be overly prescriptive. A requirement to obtain consent would go further, for example, than the current economic development powers, which require only consultation between authorities. Therefore, we need to continue to give this some thought.

If the noble Lord could stretch his patience a little further, I can assure him that we will bring forward proposals very soon. With that assurance, I hope that he will feel able to withdraw his amendment.

My Lords, my patience, like that of many other people, is considerably elastic. With the assurance that thought is still being given to the matter, I am happy to beg leave to withdraw my amendment.

moved Amendment No. 4:

Page 2, line 24, leave out ("affects") and insert ("limits").

My Lords, I was not entirely clear as to the purpose of this amendment until the noble Lord made his opening remarks. However, I believe I am now clearer in that respect. I should point out that this is a tried and tested formulation and one that is well understood by the courts. As drafted, subsection (6) would leave no room for doubt as to its effect.

The noble Lord is right in a very direct sense. We have set out examples in subsection (4) of the wide-ranging activities that authorities might want to undertake when using the well-being power but, as the wording of subsection (6) makes clear, this is not an exhaustive list. It also means that no other implication could be drawn. Apart from limiting the list of things set out in subsection (4), it might indicate the broad areas of activity rather than being taken as a total limit. Therefore, we feel that the word "affects" is more appropriate than "limits". With that explanation, I hope that the noble Lord will not pursue this amendment.

My Lords, this is a fine semantic argument. It seems to me that we could debate the matter for a long time and generally make no progress. We would, therefore, waste a great deal of the time of the House, which is not my intention. I am grateful to the Minister for his explanation, which I shall study. In the meantime, I beg leave to withdraw the amendment.

moved Amendment No. 5:

Page 2, line 25, at end insert—

("(7) Nothing in this Part shall empower a local authority to engage in trade other than that which is provided for in the Local Authority (Goods & Services) Act 1970.").

My Lords, I speak to Amendment No. 10, which is grouped with Amendment No. 5, which we are discussing. We on these Benches disagree with the somewhat inflexible line taken by the noble Lord, Lord Dixon-Smith. Amendment No. 10 seeks to enable a local authority to engage in certain activities—which would be covered by proper record keeping—when it considers that is appropriate.

It may well be appropriate to engage in certain activities in certain instances. I take up the example of the village shop. That matter is particularly topical at the moment. A shop and post office may be faced with closure because no one wishes to continue to run it. In such circumstances it may be appropriate for a local authority to play a prime part in keeping it going, perhaps for a short time until someone else is found, or perhaps for a much longer time, if necessary, if the establishment in question serves a wide rural area. Amendment No. 10 seeks to introduce much greater flexibility for local authorities in this area. Local authorities are trying to get away from the regime under CCT which did not permit them to do anything in this regard. That regime involved them in red tape and bureaucracy and they were not even permitted to trade for the benefit of a local community.

Clearly a line needs to be drawn between a local authority threatening other local traders and engaging in activities which seek to benefit the wider community. Under the powers in this Bill and under the community planning power, a local authority will no doubt take account of the views of its local community. I believe that Amendment No. 10 is far more likely to result in local authorities being able to engage in certain activities that are seen to benefit local communities rather than being restricted by red tape as they have been in the past.

My Lords, I am afraid that we must oppose Amendments Nos. 5 and 10. There is a good deal of unnecessary confusion, both inside and outside the House, about the effect of the well-being provisions on the ability of local authorities to engage in trading activities. Therefore it may be helpful to set the record straight.

At present, authorities' ability to trade in goods and services is controlled by the Local Authorities (Goods and Services) Act 1970. This permits authorities to charge for goods and services only where these are provided by the authority to a "public body" as defined by that Act. The goods and services Act is a permissive piece of legislation. It does not therefore contain any prohibition, restriction or limitation that would bite on the new well-being power by virtue of Clause 3(1). In other words, once Clause 2 comes into force, local authorities will be able to provide goods and services to anyone. It will no longer matter whether they are a "public body" as defined by the 1970 Act, or not.

But, while they will be able to provide goods and services to anyone, they will not be able to charge for them. Clause 3(2) specifically prevents authorities from using the well-being power to raise money. Therefore they will only be able to charge for goods and services using the power in Section 1(3) in the 1970 goods and services Act and this limits charging to circumstances where authorities are trading with "public bodies". In other words, nothing in the current Bill will change the current ability of local authorities to engage in trading. Amendment No. 5, is, therefore, totally unnecessary.

Amendment No. 10 would, on the other hand, dramatically change the position by ensuring that, where they exercised their well-being powers, authorities could provide goods and services to anyone—not just public bodies—and could charge for the goods and services so provided. I appreciate that the noble Baroness will be disappointed—and the noble Lord, Lord Dixon-Smith, presumably pleased—to hear that this is not an amendment that the Government can accept. It is altogether too sweeping. However, the noble Baroness may be somewhat reassured to know that the Government are looking for some sensible relaxation of the circumstances in which authorities can charge for goods and services.

The Government are currently exploring these issues with business, voluntary organisations, local government and the trade unions. As we said during the passage of what is now the Local Government Act 1999, the powers in that Act enabling us to relax any legislative provisions preventing authorities from securing best value give us an opportunity to review the legal framework covering the provision of goods and services by local authorities. We are currently looking at the circumstances in which authorities might engage in such activities; the limits that should apply; and the safeguards that ought to exist in order to protect the taxpayer and—as the noble Baroness, Lady Miller of Chilthorne Domer, recognised—ensure fair competition. We intend to issue a consultation paper on these issues in the spring. I feel sure that the points raised in this brief debate by the noble Lord and the noble Baroness will contribute to that consultation. With that reassurance, I hope that the noble Lord. Lord Dixon-Smith, will be prepared to withdraw his amendment and that the noble Baroness will be persuaded not to move hers when we reach it.

My Lords, I am grateful for the noble Baroness's response, which gives me comfort. I look forward with interest to seeing the forthcoming consultation paper. In the mean time, I beg leave to withdraw the amendment.

My Lords, I should inform the House that if Amendment No. 6 is agreed to, I cannot call Amendment No. 7.

moved Amendment No. 6:

Page 2, line 30, leave out subsection (2) and insert—

("() A local authority, in considering expenditure relating to section 2(1), may only spend money, whether raised by precept, borrowing or otherwise, up to a sum limited in any one year by the amount that would be raised if the level of the Council Tax precept on a Band D house within its area were increased by £2.").

My Lords, we share the view of the noble Lord, Lord Dixon-Smith, about local authorities being allowed to make their own decisions because local taxpayers, wearing their hats as electors, will give their own views in due course. I am not sure that I would use the term "run away with the council tax payers' money", but I take his general point.

However, we cannot support the amendment. The Minister may correct me, but I understand that Clause 2 allows local authorities overarching powers; it is not that they are being provided with one detailed additional power. Whatever the situation—even were this to be one extra detailed power—I think that the £2 limit is unambitious. As the noble Lord said, it is a matter for the electors. I am not enthusiastic about the Bill applying yet another restriction on local authorities as regards their tax raising and spending.

My Lords, my noble friend is to be congratulated on his persistence. He may be erring on the side of optimism in hoping to persuade the Government to do something, but he deserves support and commendation from behind him.

On first sight, this part of the Bill puzzled me. It seemed to me that the Government were being quite lavish in the promises to local government in Clause 2, where it states:

"Every local authority is to have power to do anything which they consider is likely to achieve any one or more of the following objects".

I shall not read out the rest of the clause. That seemed as though the Government were in a very generous state of mind towards local authorities.

But then we get to Clause 3, which states:

"(1) The power under section 2(1) does not enable a local authority to do anything which they are unable to do by virtue of any prohibition".

It continues:

"(2) The power under section 2(1) does not enable a local authority to raise money

(3) The Secretary of State may by order make provision preventing local authorities from doing, by virtue of section 2(1), anything which is specified, or is of a description specified, in the order".

Then Clause 3(4) subjects local authorities to guidance from the Secretary of State after due consultation.

I do not wish to pretend for a moment—it would open the door to the Minister—that the previous administration had an immaculate record so far as concerns local government. It deluged local authorities regularly in a mass of legislation, to a point which must have been exceedingly discouraging to those who felt inclined to enter their ranks. Indeed, if any over-confident candidate for local government had ever consulted me—which would be a foolish thing to do, I admit—I would have advised him or her that whatever they did, do not. The one thing they could rely on was the mistrust of the central government, of whatever party, and of being hedged around by a whole lot of regulations.

The first clause that I quoted is a classic case. I will not quote it again. It states that local authorities can do anything that they like or think appropriate; and then the next clause states that they cannot. It hedges restrictions around them.

I do not believe that people worth their salt will continue to want to go into local government as long as they are hamstrung by central government. At some time or other, another government must take a different line. My noble friend is entirely right to move his amendment.

My Lords, I support the amendment of my noble friend Lord Dixon-Smith. It is an important amendment on a very important issue of principle—that is, how much freedom a local authority can have.

I recall very well that when the present Government were in opposition they were very much against the then policy of the Conservative government on rate capping. I lived in an authority which was rate capped. I remember it very clearly, not only from the debates which took place in your Lordships' House but from personal experience of its effects. The argument against it was that it denied local authorities the freedom to do what elected representatives thought right for their particular community, it was too expensive and people did not want to pay the rates, or the council tax as it would be now.

It may come as a surprise to the Government to know that, within the party, I argued against this policy. I thought that if one wished to have effective local government it should be able to spend and, if necessary, to go bankrupt. That would be a salutary lesson all round if people behaved in what is really a totally irresponsible fashion. That is the consequence; and the consequence should come down firmly on the heads of those responsible. I am not advocating that as a policy in any sense, but it seems that what lies behind the amendment is a similar principle to that debated previously: how much freedom should a local authority have? As my noble friend made quite clear, and in my local government days—a long time ago now there was the freedom to spend the money which could be raised from an increase of a penny rate. That was a long time ago, but it was a measure of freedom which, if they wished to, local authorities could exercise and use for particular areas. It may not have been the right sum of money, but it was at least a sum of money. If I have understood my noble friend correctly, his amendment aims to find a rather similar kind of money to offer a similar kind of freedom.

That should not be at all incompatible with the rest of the Bill. Such a provision would be valued by local authorities. If it is considered that local authorities cannot be trusted to raise the sums of money for things which, at the beginning of the Bill, they are to be allowed to do, the amendment will at least give them a measure of freedom. Even if the Government cannot accept it today, I hope that they will take it away and consider it seriously.

My Lords, I welcome the comments from noble Lords opposite, in particular, from the noble Lord, Lord Dixon-Smith, who presumably speaks with some authority about his party's conversion to Financial freedom for local authorities. I am afraid that my experience of 18 years of the previous government was not quite like that.

Noble Lords may remember that I spoke on Clause 3(2) in Committee. I share some of the concerns expressed by noble Lords on that subsection. However, the comments made by my noble friend Lady Farrington helped to clarify the way in which that clause will work. Amendment No. 6 would be both restrictive in its effect and also unfair in its consequences. It returns to the old product of a penny rate. Obviously, inflation has increased the amount to £2. But that is a restrictive amount because it is not all that much for local authorities to spend and it may not be enough. It is rather unambitious.

The point made by the noble Lord, Lord Dixon-Smith, about band D being the mid-point of the range is in a sense true, since the range moves upwards from band A, but it is not the median point of the council tax range. In my own authority, over 88 per cent of all properties are below band D, with only 4 per cent being above. I am sure that in many other local authorities, that statistic could well be reversed. Therefore, the way in which local authorities could raise money would be in a sense differential. Those authorities with a large proportion of properties in the lower tax bands obviously will not be able to raise as much money as those with a large number of properties above band D. There are ways in which we may continue to explore the limit which appears to be in Clause 3(2), but the amendment is not the way forward.

My Lords, I hope that the Minister will not accuse me of being unable to speak because I am a Scot, for I cannot speak for local government in Scotland these days as it is ruled out by law.

My Lords, I apologise to the noble Baroness if she interpreted what I intended as a light remark put slightly ironically as being in any way an attempt to dissuade her from taking part in the debate. Her contribution is welcome.

My Lords, that reassurance is extremely kind and gives me courage and comfort. The noble Lord, Lord Smith of Leigh, has criticised the amendment. He did so in detail and I understand what he said, but I hope that when the Minister replies, she will tell the House whether, having listened to this argument again, she believes that there is in principle an argument for the Bill to define an area in which the Secretary of State cannot stop a local authority from doing something which it would like to do in the way of raising money. We must pay attention to what noble Lords have said—I believe my noble friend Lord Peyton made the point—about the need to get good people into local government.

It is absolutely desperate that if an entrepreneurial person is asked to promote the well-being of his area and comes upon a way of doing so by raising a little money to spend on something, he knows that the Secretary of State has the power to stop him if he so wishes—admittedly, after consultation. Would it not be possible to create some area of legislation in which the Secretary of State cannot do so in order to give councillors confidence that they may have the interest and satisfaction of doing something to help their areas in such a way?

My Lords, when the Minister replies, will she explain to the House what is to happen to Section 137? I appreciate that it will be required for parishes which will not have the well-being power, but, as I understand it, Section 137 was enacted because there were not at that time general powers for local authorities, so the raising of a penny rate had to be read alongside the additional powers which the local authorities might want to exercise. I have looked at the back of the Bill in the repeals section. Section 137 does not feature, but I realise that I am now confused as to how it lies alongside the new powers.

My Lords, again I apologise to the noble Baroness, Lady Carnegy of Lour. I learnt early on that irony is often misunderstood.

I am in the unusual position of being able to agree in part and in philosophy with the noble Lord, Lord Dixon-Smith, and all noble Lords who have taken part in the debate, because, in using the Clause 2 power, local authorities may spend any amount of money they wish on promoting or improving the economic, social and environmental well-being of their communities. I can tell from the way in which the debate has proceeded and the way in which the noble Lord moved his amendment that he would in fact be placing a limitation on what could be spent by a local authority in any year on improving or promoting the economic, social and environmental well-being of its area. My noble friend Lord Smith made it clear that a national limit would be inhibiting and would bite on or empower different local authorities unevenly.

The Government's position is in direct contradiction to the effect of rather than the intention behind the amendment. In our view, it is for individual local authorities, not central government, to determine how they should use the new well-being powers and for local government, not central government, to determine how much they should spend, based on their understanding of local circumstances and needs. The measures that we put in place in last year's Local Government Act and are putting in place through the Bill will strengthen efficiency and local accountability. It is to local communities that local authorities should answer on how they use their well-being powers and for the expenditure that they incur.

We welcome the conversion of noble Lords on the Opposition Front Bench and the Opposition Benches to the principle of empowering local authorities to make judgments. However, in response to the noble Baroness, Lady Carnegy of Lour, we believe that it is necessary, in the interests of people in particular areas, that where local authorities act irresponsibly, the Secretary of State has the power to ensure that rises in council tax are not at an unacceptable level.

The amendment has the effect of limiting the freedom of local authorities. I apologise if in previous explanations we may not have made that as clear as would have proved helpful, but, in the light of that explanation, I hope that the noble Lord will seek leave to withdraw his amendment. In reply to the specific question from the noble Baroness, Lady Hamwee, Section 137 will be repealed.

My Lords, in response to the Minister's final comment, I assume Section 137 will be repealed using the powers given in Clause 5 of the Bill. I may not be correct.

Perhaps I may revert to the debate. I thank noble Lords on this side of the House who have supported the point that I sought to make. They have done that well. I regarded this amendment as unambitious, just as everyone else has done. However, when out on a fishing trip sometimes the smallest fly used is the most successful. One often sees very large fish landed on what appears to be an impossibly small fly.

My Lords, perhaps it would help the House if I were to say that the repeal of Section 137 is in Clause 7 of the Bill.

My Lords, I am grateful to the Minister, I had missed the point. Perhaps I may revert to my fishing trip. If one hooks a fish in the right part of the mouth, one can have a degree of success beyond that which would be suggested by the tackle used. I must admit that I was seeking to hook the Government on this issue and to persuade them to unbend. Of course I accept that the Bill does not place any limitation on what is spent on this power. I have been trying to avoid repeating arguments that I used in Committee. While there are no limits on an authority's power to spend, Clause 3(2) says quite categorically:

"The power under section 2(1) does not enable a local authority to raise money (whether by precepts. borrowing or otherwise)".

If a local authority has a budget and its budget is committed—I do not know of a local authority that does not have a committed budget—and it is then given an added power under which it is told, "You may do X, Y and Z, but you may not raise money in order to do anything about that power", I am not convinced that one can do anything about it. There are not many things one can do in local government which do not cost money in some shape or form.

I see the Minister is getting anxious about what I am saying. I am open to correction. I accept that within a budget local authorities can of course reallocate resources. Last year we debated the Local Government Bill which introduced the concept of best value. If the concept of best value is working, no under-employed resources are floating around. That may not be the case as local authorities can always take decisions. We are dealing here with a difference of degree. I do not find the Government's response entirely adequate.

The noble Lord, Lord Smith of Leigh, mentioned how unambitious I had been. I explained the reasons for that. I accept also the differential effects of my proposal. I accept that, as I have worded the amendment, it restricts expenditure. The noble Baroness, Lady Hamwee, made that point. That said, I assume that Clause 5 of the Bill, which permits a Minister to make regulations amending or repealing legislation found to be restrictive would also apply to the Bill. I envisage also that it would not be very long before a stream of local authorities were running to the Government to say, "This clause of the Bill is very restrictive. Please relax it". I envisage also that the Government might be susceptible to those pleas.

There is a fundamental problem with this aspect of the Bill. In the light of the Minister's reply, I am minded to test the mood of the House.

My Lords, I wish to place on record explicitly the Government's position because I still do not think it is clear to the House. The effect that any spending might have on a council tax increase is a matter for the local authority. Before authorities increased the council tax we would expect them to look at whether they could raise money more effectively or efficiently—that will not surprise the noble Lord—taking account of what local people were prepared to pay. There is an important general point. We have said that we will look at the ability of councils to charge for the services they provide with the well-being power. That will represent a new form of raising finance. We are considering it. Beyond that we would expect this new power to be implemented within the current finance system. As I made clear, we are not precluding local authorities from being able to spend money and raise their council tax in pursuit of their own local priorities within the reasonable bounds established by other legislation. The noble Lord, Lord Dixon-Smith, appears to interpret this as the Government saying that local authorities may not spend money or raise finance in the normal way within the overall constraints that apply to local authorities at all times. We have a genuine difficulty of understanding over this point.

My Lords, I am grateful to the noble Baroness. We do have a genuine misunderstanding. I am dealing with the Bill. If it said that local authorities could spend on this power within their existing budgets, that would be acceptable. That means that at the present time this is an additional function which has to come out of existing volumes of money because the Bill says:

"The power under section 2(1) does not enable a local authority to raise money (whether by precepts, borrowing or otherwise)".

That includes everything. Therefore I do not think that money is available except as would be provided by the considerable ingenuity of local authorities. That is a fairly fundamental difference. I may be guilty of a misunderstanding. If I am, I have no doubt that I shall get the result that I deserve. But I am inclined to test the opinion of the House on what is a fundamental difference.

My Lords, with the leave of the House, I should like to repeat in the form of a Statement a Private Notice Question on Mozambique answered in another place by my right honourable friend the Secretary of State for International Development. The Statement is as follows:

"Over the last two weeks, the worst floods in over 50 years have hit southern Mozambique. Cyclone Eline also caused substantial damage in the central provinces. Over the weekend, water deposited by Eline in Zimbabwe and South Africa has filtered through to Mozambique causing further massive flooding of the Limpopo and Save rivers.

"The Government of Mozambique estimate that over 500,000 people have been affected, with over 100,000 still awaiting rescue following the recent flood surge over the weekend. Regrettably, further showers and possible flooding from the Cabora Bassa dam are likely to make the situation worse over the next few days.

"The first phase of the relief operation, involving rescue and evacuation of people stranded by flood water is still ongoing. Co-ordination of rescue activities has been problematic. We are doing all we can to make available extra helicopters and boats. As the flood water subsides, the relief operation will move into a second phase. Priorities will be urgent repairs to essential infrastructure, shelter, food delivery and medical services

"DfID deployed two humanitarian specialists to the region during the initial stages of the flooding on 11th February. They conducted rapid assessments and liased with the Mozambiquan authorities and humanitarian organisations to plan the rescue operation needs. We despatched a consignment of over 400 tents from the UK to Maputo for the Red Cross to distribute for emergency shelter to those made homeless. We also supported the United Nations Disaster Assessment and Co-ordination Team, who are assisting the Mozambiquan authorities with the targeting and co-ordination of relief efforts. Given the deteriorating situation over the weekend, we are deploying a humanitarian specialist to assist with assessments and prioritisation of needs. We are also strengthening the World Food Programme with the secondment of two logistics experts to assist with the effective tasking of helicopters.

"DfID has already contributed nearly £2.2 for rescue and immediate relief, including the provision of shelter, water, sanitation and health support. This funding has been channelled through the United Nations Office for the Co-ordination of Humanitarian Affairs, UNICEF, the World Food Programme, the Red Cross, ActionAid, Oxfam, Save the Children Fund and World Vision. These activities are being co-ordinated with the Mozambiquan authorities. We stand ready to provide further assistance".

My Lords, I thank the Minister for repeating, in the form of a Statement, a Private Notice Question answered in another place giving details of the Government's response to the flood crisis in Mozambique.

None of us can fail to be moved by the effect of the worst floods to hit Mozambique in years. What discussions did the Minister's department have with the authorities in the two years prior to the flooding to prepare for a co-ordinated response should a natural disaster occur?

The Minister referred to the swift reaction of the aid agencies and the Government of Mozambique to deal with the crisis. I should like to associate these Benches with the tribute paid to relief agencies such as the Red Cross for the outstanding work that they do in this field. Sadly, according to some aid workers, both the UN and DfID would not allow the Mozambique relief bodies a free hand to cope with yet another disaster to hit them. What assessment has the Minister made of the criticism of her department? Does she think that, wherever possible, UK funding should be supporting local plans drawn up to cope with such disasters and not the imposition of our own plans? Is she satisfied with the co-ordination of the relief effort?

When a hurricane hit Nicaragua and Honduras, there was confusion in the Government's position on debt relief. Here, too, there appeared to be confusion on the ground about the Government's humanitarian relief action plan. Was a plan drawn up for Mozambique, and did the Government stick to it?

Finally, we on these Benches recognise that Mozambique is one of Africa's success stories. Its privatisation programme is one of the most active in Africa: more than 900 state enterprises have been liberalised. However, according to Jubilee 2000, Mozambique is still having to pay 1.4 million dollars a week in debt service. What plans do the Government have in the future to take no more debt repayments in the future from the Mozambiquan Government until the country has got back on its feet again? Will the Government support the idea that Mozambique should be rewarded for sticking for so long to the very severe IMF structural adjustment programmes?

My Lords, five years ago I had the great pleasure of monitoring the first multiparty election in Mozambique in precisely the area north of Maputo which has been devastated by the floods caused by the overflowing of the Limpopo and Save rivers. Your Lordships will understand, therefore, how distressed I feel at seeing the pictures of that same area in the condition that it is in today.

I begin by thanking the Government for the response that they have made, quickly, in assisting the South African authorities and the local voluntary agencies to cope with this terrible disaster. Sadly, the forecast is that more rains and another cyclone are approaching.

Mozambique is a fairly new member of the Commonwealth. The Commonwealth Secretary-General has appealed for neighbouring Commonwealth countries to send immediate assistance. I know that Malawi has responded. Does the Minister have news of any response from other neighbouring countries? Do we have, in our military training areas in Kenya, any suitable equipment—for example, helicopters or inflatable boats—which might be made available directly by the Ministry of Defence?

That leads me to ask the Minister a further question. We had several days' warning of the flood conditions in Mozambique. I wonder whether DfID and the Ministry of Defence have sufficient forward planning co-ordinated to be able to provide effective help in situations such as this, given that the MoD has massive resources compared with the limited resources that DfID inevitably has.

My Lords, I thank the noble Baroness and the noble Lord for their positive comments about the relief effort to date. I thank the noble Baroness in particular for the tribute that she paid to the relief agencies that are working so hard in the area at present.

The noble Baroness asked a number of questions. The first related to whether or not there had been a plan for Mozambique and any assessment by this Government, with the Government of Mozambique, in relation to planning for such an eventuality. I can assure the noble Baroness that we have a very good relationship with the Government of Mozambique. There have been ongoing discussions with the Government of Mozambique over a long period of time regarding ways in which this Government can best support the Mozambiquan Government's efforts in a variety of areas.

In Mozambique, the National Institute for Disaster Management is the central government body for coordinating relief efforts within which relevant government ministries are represented. They have worked in co-operation with the United Nations Disaster and Co-ordination Team in relation to the current crisis.

We consider the Government of Mozambique to have been, up until this time, one of our success stories. We are deeply concerned about the long-term implications of the current crisis. The Government of Mozambique are a reforming government. They have been putting in place strategies to assist the poor in Mozambique and have been putting resources into areas such as education and health. I agree with the noble Baroness that it is important that, where we can, we should support local efforts.

The noble Baroness asked me to respond to specific criticisms that had been made of the department. I can assure the noble Baroness that in our discussions with the Government of Mozambique concerns have been ironed out. In the short term, our assessment team together with a UN team made a number of recommendations which the Government of Mozambique felt unable, given their relatively limited capacity, to put in place immediately. As a result of discussions, a way forward has been agreed.

As to co-ordination on the ground, we are doing everything that we can to ensure that all of the agencies that work in Mozambique do so in a coherent way. But the noble Baroness will understand that Mozambique's infrastructure is poor and the floods have made it much worse. We are doing everything that we can to obtain and pool the available data so that all the agencies work on the same information. However, it is a somewhat difficult task.

I share the distress of the noble Lord, Lord Steel, about what is happening right now in Mozambique. I visited that country very recently. Mozambique had been making very good progress. As to neighbouring Commonwealth countries, I am aware that Malawi and South Africa have to date given assistance. Malawi has provided two helicopters and South Africa has also given assistance with helicopters. I am not aware whether Zimbabwe has responded to the calls for support. We have had an ongoing dialogue with the Ministry of Defence on these matters. That department has advised us that its nearest resources are located 3,000 miles away. I understand that my right honourable friend the Secretary of State for International Development is having discussions with her counterpart my right honourable friend the Secretary of State for Defence on these matters.

My Lords, I have three reasons for taking an interest in this matter. First, the Christian Churches have partners and brothers and sisters in Mozambique with whom they are in close touch, and the first messages to come back are ones of considerable distress. Secondly, I chair the Board of Christian Aid which has worked for a number of years with partners in Mozambique. Thirdly, in that role I visited Mozambique last April. Standing here one has a sense of the deep distress about a dreadful disaster to befall a country which is just beginning to pick itself up after a long civil war. We should not under-estimate the serious implications for the economic, social and cultural infrastructure of that country. I call to mind the faces of the people I met last year whom I fear may themselves have been caught up in this matter.

Projects that we visited run by the people of Mozambique, who have just begun to move from emergency relief to development, have been swept away by the floods in a matter of days. I suspect that some of the British Government's and European funding has been swept away as roads and bridges have disappeared. Suddenly, the community is back to square one. It is essential that we do everything we can to provide relief quickly and efficiently, that we persist in our relationship with Mozambique and ensure that we put things back at least to the beginnings of development. In my role as chairman of Christian Aid, the aid agencies want to work collaboratively with the Government and all the authorities to see what can be done in the immediate but, more importantly, the long term to help the people of Mozambique to recover from an appalling disaster.

My Lords, I agree entirely with the right reverend Prelate. We cannot under-estimate the seriousness of the current situation and its long-term impact on the development of Mozambique. I can assure the right reverend Prelate that we are doing everything that we can to support the Government of Mozambique through this crisis and to work with other donors to ensure that we target resources in the most effective way. We have a growing aid programme with Mozambique to ensure that we contribute to the long-term development of the country once it emerges from the current situation. I can assure the right reverend Prelate that we shall collaborate with the aid agencies. A key part of the role of the Department for International Development is to work in partnership. We are aware that we cannot work in isolation. We seek long-term sustainable development in Mozambique and need to draw in all the stakeholders so that we work towards the same goal.

My Lords, at lunch time the South Africans said that they could not give very much more help because they were themselves threatened by flooding. Obviously, the shortage lies in helicopter pilots. There was a report on the wireless that the helicopter pilots were exhausted and could not fly any more. What can we do about either moving Air Force or Army helicopter pilots to that area or even hiring local civilian helicopters? I am sure that that would be the most immediately helpful action that could be taken.

My Lords, the shortage lies not only in helicopter pilots but in helicopters with appropriate equipment. At the moment 10 helicopters are operating in Mozambique and a further four are expected. However, only three of them have winches. We are doing all that we can, even if we have to make commercial arrangements, to get the right kind of helicopters into Mozambique. As I said in answer to an earlier question, my right honourable friend the Secretary of State for International Development is engaged in ongoing discussions with the Secretary of State for Defence on the best way in which our Armed Forces can assist the effort.

My Lords, I thank my noble friend for repeating the Statement made in another place. Does my noble friend accept that, while what she says is a welcome initial Statement, ultimately this country and the rest of the world will be judged by the enthusiasm with which we mobilise resources not only for humanitarian relief but also for the redevelopment of the development projects that have now been rendered null and void? Does my noble friend agree that, unless we are seen to do that with at least the same enthusiasm with which we muster resources for military purposes, we shall be viewed by many in the world to have failed?

My Lords, I agree with my noble friend that it is important to mobilise resources for the long-term redevelopment of Mozambique. We have a growing development programme in Mozambique, elements of which will go into redevelopment, but it is also important to note that Mozambique received a debt reduction of 1.7 billion dollars in July 1999 under the original HIPC initiative. Therefore, the Government of Mozambique can themselves download resources for long-term redevelopment. The revision of HIPC agreed in September 1999 provides deeper debt relief for qualifying countries, and therefore Mozambique is eligible for another reduction in its external debt. Once the immediate crisis is over, we must do all that we can to ensure that, in addition to the Government of Mozambique and the British Government, other donor countries pull together to ensure that Mozambique has sufficient resources to enable it to move forward in the long term.

My Lords, I welcome the Government's intention to provide an additional half a million pounds towards the immediate situation in Mozambique. I welcome, too, the Minister's remarks about the remission of debt charges. Nevertheless, I am sure that the sight of many victims clinging to wreckage, trees and buildings will be on the minds of everyone in this House.

Has the Minister seen the speculation that the Mozambique Government may not be able to afford to pay for the continued assistance of helicopters from Malawi? Will the noble Baroness ensure that that does not become an issue? Will she do all she can to ensure that more helicopters and boats are made available in Mozambique as a matter of urgency?

Does the Minister agree with the statement of her honourable friend, Mrs Ann Clwyd, on her return from Mozambique that the situation underlines the need for a rapid deployment force which can be put into operation as soon as such a disaster occurs?

My Lords, we are doing all we can to get helicopters and boats into Mozambique. I assure the noble Lord that money is not the problem at this point in time. The real problem is the lack of capacity on the ground in Mozambique to mobilise the resources which are available as efficiently and effectively as possible. The other major concern is that the Zambezi area to the north of the central area—it is not currently flooded—has the potential to be flooded within the next week or so given that another storm has been predicted. We are doing all we can to mobilise resources to ensure that in that event—we all hope that it will not occur—additional helicopters and boats are available. The population in that area is something like 3 million.

We have been working with other international agencies to ensure that there is better co-ordination when such crises occur. The question of a rapid deployment force has been, and continues to be, discussed. If the relevant organisations consider that such a force is the best way forward, I am sure that we shall take the necessary steps.

My Lords, at this stage any comment must start with a cry of sorrow that so much that was hopeful has been swept away so soon and with expression of sympathy for the whole country.

The noble Lord, Lord Alton of Liverpool, may have heard something in the Minister's answer about rescheduling of debt relief which I did not hear. My noble friend on the Front Bench asked whether debt payments of 1.4 million dollars per week were being paid by the Mozambiquan Government. If ever there were a case for suspending payment, this is it. This is a good occasion on which to consider our policy of debt management towards the least fortunate countries in the world.

My other question is entirely separate. What is the estimate of malaria incidents which may follow in the wake of these floods? What steps are being taken to prepare for them? What contribution are we making to those steps?

My Lords, as regards debt relief, perhaps I should repeat the figures I gave earlier. Mozambique received a debt reduction of 1.7 billion dollars in July 1999. A second phase of debt relief is being discussed currently. A decision point is expected in March at meetings of the international financial institutions.

The Department for International Development cancelled all Mozambique's aid debts in 1983. They were worth some £21.8 million. We are doing all we can to put pressure on other countries to do what we have done where there is bilateral debt.

There is difficulty in getting data about what is happening. We have a small office in Maputo from which we receive information all the time. However, it has made clear that the information is patchy given the difficulties of the infrastructure. All the aid agencies are seeking to share data. I am unable to answer the specific question about projections of the incidence of malaria. Health is one of the areas on which we have given, and continue to give, support. If I receive further information, I shall write to the noble Lord.

My Lords, does the Minister agree that the greatest test—my noble friend Lord Tomlinson and others referred to it—will be the renewed commitment to the reconstruction of Mozambique after this terrible disaster? When there is much talk about the restructuring of military forces on a European basis so that they can move more effectively to military situations where there is demand, does my noble friend agree that we need to consider the closest possible collaboration between development ministries and the military so that equipment can be moved as rapidly as necessary in situations such as that in Mozambique?

Does the Minister agree that we should send our warmest congratulations and good will to the heroic pilots from South Africa? They have been doing fantastic work over the past few days.

My Lords, my noble friend will be aware that the United Kingdom has taken a lead in the matter of collaboration between development ministries and the military. The Department for International Development and the Ministry of Defence have been working together in considering areas upon which we can take greater action. However, the issue is not limited to the United Kingdom Government. We have to do all we can to ensure that our broad-based approach is replicated in other countries throughout the world.

I agree with my noble friend. We should thank the pilots from South Africa and Malawi who have worked so heroically to rescue those in peril.

My Lords, I welcome the British Government's efforts in this tragic situation. It is important that the Commonwealth is seen to rally round and help in any way possible. However, can the Minister tell us what the European Union plans to do in particular as regards its overseas development role and the special relationship with ACP countries?

My Lords, the European Community humanitarian office has committed 1 million euros for relief and initial rehabilitation. There will then be ongoing discussions about the European Commission's response in terms of the long-term rehabilitation of Mozambique.

My Lords, does the Minister agree that three winch-equipped helicopters are not enough? The need will be even more acute if the floodwaters rise. Since we lack heavy-lift capacity, cannot the United Nations be asked to suggest that the American air force, which is amply equipped in that direction, provides some resources to assist this crying, urgent need?

My Lords, the USAID has been involved with other donors in supporting the Government of Mozambique in terms of the current humanitarian crisis. I shall pass on my noble friend's suggestions to the appropriate authorities, but I cannot speak for the American Government.

My Lords, I associate myself with all the expressions of sympathy for Mozambique. Clean water has not been mentioned. Am I right in thinking that apart from people who are stranded in small groups, others have reached refuge in large numbers? What efforts are being made to ensure that they are receiving clean water?

My Lords, I assure the noble Baroness that we are doing all we can. However, we are hampered by logistical problems on the ground. Many roads in Mozambique are cut, so we have to use other means of transport. That is where the helicopters without winches can be used. However, it is a matter of ongoing concern because it is linked to the possible health effects on the population of Mozambique should they not have access to clean water, adequate sanitation and so forth.

My Lords, like my noble friend Lord Steel, I was in Mozambique for the first round of elections, and I am equally sad about the situation there. However, we have not mentioned the presence of landmines. How far has the demining process gone in Mozambique and how far will the lack of it make it logistically more difficult to transport materials across country when there are no roads worth using?

My Lords, I am able to answer the noble Lord's question only in part. The Government of Mozambique asked the British Government to be responsible for demining in the northern part of the country and the majority of mines in that area have been removed. The area is not flooded, although there is a threat of flood, and we have a small team operating in-country in the event of further problems. There have been reports about the possibilities of landmines in other parts of the country which are currently flooded, but our information is not clear. Again, I shall be happy to write to the noble Lord once we receive clear information.

My Lords—

My Lords, I am afraid that the time is up. I know that other noble Lords want to ask questions, but the convention provides for 20 minutes.

moved Amendment No. 7:

Page 2, line 31, leave out ("(whether by precepts, borrowing or otherwise)").

My Lords, I am perfectly prepared to accept the—

My Lords, I am sorry to interrupt the noble Lord. As this is the Report stage, I believe that if he is to reply now, that would indicate the end of the debate. If I am right on that point, I should like to say something at this stage.

Briefly, I regret that the noble Baroness, Lady Hamwee, did not find it possible to vote for the last amendment, which on the whole was a mild and modest affair, characteristic of my noble friend. Of course, I understand that the noble Baroness is stricken with a certain affection for the Government and would be reluctant to cross swords with them too often or too openly. For that, I am slightly sorry.

The noble Baroness has now tabled Amendment No. 9, which I regard with considerable misgivings. Why has she tabled this kind of amendment? Is she not proposing to give local authorities power instead of allowing the Secretary of State to make regulations? I cannot remember how many speeches I have made in your Lordships' House and in another place on the subject of Secretaries of State being given further powers. I am certainly not one who is inclined readily to trust the judgment, wisdom and duty of Secretaries of State in administering the law wisely.

I am surprised that these amendments should come from the Liberal Democrat Benches. I believe that the modern tendency to place Secretaries of State in a position where they can bypass Parliament is wrong and unacceptable. I should not be altogether surprised to see such proposals coming from the Labour Benches, but I am surprised to find them coming from the Front Bench of the Liberal Democrat Party. While the previous amendment, tabled by my noble friend, would have helped local authorities, I am doubtful that this one would do so. It simply gives power to Secretaries of State. As I have said many times, I have the gravest possible reservations about Secretaries of State. They are usually much more conscious of the convenience of their colleagues and the interests of their party than they are of helping local government. I have grave reservations about this particular amendment.

My Lords, I am grateful to my noble friend for his approbation of my previous amendment and, indeed, for what he said about this amendment. If nothing else, it spares me the trouble of saying it in duplicate. It would be highly amusing—to me, at the very least—if the noble Baroness, Lady Hamwee, were to divide on Amendment No. 7.I should then be able to support her when she would not support me.

As far as concerns Amendment No. 9, as my noble friend said, it would be more appropriate if local authorities had such a power on the face of the Bill rather than having to rely on yet more regulations. We deal constantly with regulation on regulation on regulation. I believe that that is not the happiest situation. In passing legislation, we should be able to deal with matters more concisely and more effectively.

My Lords, I am prepared to take a slightly more benign view of the remarks of the noble Baroness than did the noble Lord, Lord Peyton, but, regrettably, as she said, only in terms of a contribution towards the consultation on the future of local government finance rather than in direct amendments to the Bill. There is some cross-over with the previous debate and with the debate which we had in Committee. A number of longer-term issues about the nature of local government finance and the controls or otherwise thereof are best addressed in a Bill which primarily is concerned with finance rather than the powers of local authorities.

With regard to Amendment No. 7, I reiterate that the limitation in subsection 3(2) simply confirms the status quo. It is entirely neutral in its effect on the ability of local authorities to charge or otherwise for their services. It would also be neutral whether the words to which the noble Baroness objects—"by precepts, borrowing or otherwise"—are retained or deleted. We feel that on balance it would be more helpful than otherwise if we had some indication of what we mean by "raising money" in this context. The list to which we referred in terms of "precepts, borrowing or otherwise" gives some indication of what we mean by "raising money". I appreciate that the noble Baroness takes a different view, but it is our view that the words are slightly more helpful than unhelpful. There would be a little more confusion were they not to be there.

As far as concerns Amendment No. 9, as we said in Committee, the Government accept that there is a case for allowing local authorities a wider discretion to charge. However, these are complex issues which go beyond that of well-being. A number of difficult considerations exist. In respect of some services, of course, local authorities compete with the private sector, and in others they are in a virtual monopoly position. Therefore, there must be some degree of control and regulation of their charging ability. I would not necessarily regard that as giving a Secretary of State overweening powers. However, these factors must be carefully weighed and a number of different interests consulted.

We are considering this whole issue in the approach to the local government finance review Green Paper, which we hope to publish this summer. As a result of that review, I accept that we may need to concede that some legislation will be needed. If it were possible to include some enabling provision in this Bill which could pave the way for such steps, we should be prepared to consider it. However, we are not convinced that Amendment No. 9, as drafted, is such a provision. Certainly, our initial view is that it is little more than a restatement of Section 150 of the Local Government and Housing Act 1989. Under that Act the Government can already make regulations to allow authorities to charge for services provided under these powers, as under others. Therefore, in this regard it does not add a great deal to the existing law and to the existing powers of the Secretary of State.

There is a problem here and we shall address it in a broader context. However, I hope that for now the noble Baroness can be persuaded not to pursue the amendments.

My Lords, "stricken with affection for the Government"! I had believed that we did not insult one another in this House. Certainly not. No more with affection for the Government than with affection for the Conservative Benches. I am entirely neutral.

I shall not pursue Amendment No. 7 further, other than with this response. However, I remain unconvinced. Since the Minister describes it as being almost a matter of taste, it is quite difficult to argue because I believe that we have gone beyond the bounds of drafting technicalities. To our taste, the list is unhelpful, particularly, as I said in my introductory remarks, as it does not include tax raising. So far as a local community sees it, that is the main way in which a local authority raises money. Of course, we all know that the main way in which it raises money is through central government grant.

So far as concerns Amendment No. 9, I worded the amendment in that way partly because I hoped that it might be more appealing to the Government and also partly because, given the complexity of the matter, I was not confident that my drafting would be adequate to cover all the points. It seemed to me that it offered a more practical approach to provide for the Secretary of State. I have no great liking for order-making powers to be given to Secretaries of State. However, that would be a more practical approach in this particular situation.

Amidst his dismissal of the amendment, the Minister gave a little note of sympathy. Given that it will be a little while before the Green Paper is published and that inevitably legislation is some way off, I wonder whether the Government would be prepared to discuss what might be an appropriate amendment in the Bill to allow the Secretary of State to take steps to make regulations and allow for charging. After all, it will still be in the hands of the Government as to whether or not regulations will be promoted. That means that charging in its proper fashion could be introduced a good deal earlier than if we had to wait for primary legislation.

I repeat that the purpose of the amendment is to support the approach taken by the Government in terms of best value and the exercise of the new powers. We support the new powers and want to see them exercised effectively. Can the Minister give any encouragement as to whether there might be a way forward?

My Lords, without commitment, I should be happy to consider the possibility of the provision being included in the Bill. Perhaps we can engage in discussions before the next stage.

My Lords, I am happy to withdraw the amendment.

moved Amendment No. 8:

My Lords, I thank the Minister. It is rare for one's amendment to be adopted by the Government without any change of wording. I am grateful to the Minister for moving the amendment which we shall, of course, support.

moved Amendment No. 11:

Page 3 line 1, leave out ("is to have power to prepare") and insert ("shall prepare and keep under review").

My Lords, I share the view expressed by the noble Baroness, Lady Miller. It is good to see the LGA being so clearly supportive of the importance of community planning as a central role for local authorities.

Having said that, I have some doubt as to whether a further statutory duty is necessary in this context, as probably three-quarters of it already exists in the legislation on best value whereby local authorities are required as part of their best value processes to produce a community strategy for their areas.

I am not convinced that the argument given by the LGA really bites; namely, that there is need of a duty to encourage partner organisations to treat the statutory process seriously. That will not be a duty which falls on the other bodies. Were this to be passed, it would only be a duty on the local authority which has to persuade others of the importance of working on a strategy by its stance, leadership and the wisdom it brings to those processes. I am sympathetic in part to the amendment. However, I doubt whether it is strictly necessary.

My Lords, I do not believe there is a difference in objective; it is more a case of whether it should be a duty or a power. There is perhaps not so great a difference between ourselves and noble Lords opposite, or, indeed, the LGA on the issue as the amendment suggests. We disagree about the means of delivery. Like my noble friend Lord Filkin, I am not convinced that a duty is necessary or especially conducive to effective community planning.

Local strategic partnerships can bring real benefits. A number of local authorities are already part of local strategic partnerships bringing together the other stakeholders in the area. They are already developing the sort of approach which the Government want to encourage. Those authorities, for example Coventry City Council, who have adopted this approach for some time, have demonstrated the benefits it can bring. They did not need to have a duty in that respect.

The evidence suggests, therefore, that it is not a necessary prerequisite for local authorities to develop effective community planning. Moreover, there are other aspects of changes in the pipeline which will encourage local authorities to go down that road.

Under the new executive arrangements in Part II of the Bill, accountability for lack of progress on delivery will be clear. The well-being of their communities should be the most important issue for local councils. Where there is no delivery, it will be clear where the responsibility lies.

It is also the case, as my noble friend Lord Filkin pointed out, that local authorities are already under a duty in relation to best value. The best value guidance makes clear that the preparation of a community strategy, which can help ensure that services are delivered in an integrated and coherent way, should be the starting point for setting the authority's own strategic objectives. Those in turn will form the basis for reporting progress in best value performance plans.

In the longer term there is a potential to use the powers in Clauses 5 and 6 of the Bill to remove barriers to the use of the well-being power and to rationalise the requirements for statutory plans. An authority that already has an effective community strategy in place will be best placed to identify such problems and to take advantage of the potential freedoms that their removal would provide.

On balance, therefore, we are not convinced that a duty laid on local authorities is necessary for what we want to see in terms of turning community planning into reality. I hope therefore that the noble Baroness will not feel it necessary to press this point.

My Lords, it is strange that a duty will continue to apply to the 40 other plans but there will be no duty to provide something that is overarching. While I accept that the best local authorities do not need to be given a duty, much of the Government's incentive for bringing this Bill and the last Bill forward, and for setting up the Improvement and Development Agency, was to raise the standard of all councils, not to continue to enable the best to perform well. That is why the Bill would have been much stronger if it included a duty.

I feel also that the Minister's response continues to ignore the fact that the best value duty will mainly still apply to local authorities. Of course what they do in partnership will be taken into account, but our amendment would bring in, in a comprehensive way, their work with all the other partners and other local authorities in the area. It would be much more wide-ranging than that which the best value guidance, which is internal to a local authority, will bring forward. I hope that the Government will address the fact that they are imposing a duty to produce lesser plans but no duty to produce a comprehensible, overarching plan. I beg leave to withdraw the amendment.

moved Amendment No. 12:

Page 3, leave out line 2 and insert ("the sustainable development").

My Lords, I reject the accusation made by the noble Baroness, Lady Miller, that the Government have backed off from their commitment to sustainable development because it is central to much of what the Government are proposing in the Bill and more generally in their environmental and spatial planning approach.

As the noble Baroness so eloquently stated, local authorities should be committed to sustainability all the time. The aim of the strategic plans setting out local priorities and the actions needed to address them should be sustainable development, and we agree with that aim.

Under Clause 4 a local authority has power to prepare a strategy setting out how it and its partners will promote the economic, social and environmental wellbeing of their area. The strategy is not about any one of those factors, but it is about bringing them all together. We are not speaking of three strategies that overlap or which might be mutually incompatible. That is why the Bill repeals the reference to developing a separate economic development plan, because we want to approach these matters in a holistic way.

An authority that is developing a strategy under this power will need to set out how it and its partners will tackle those things together for the overall wellbeing of the community. That is the essence of sustainability and why sustainable development is written very firmly, as the noble Baroness has acknowledged, in Clauses 2 and 3. It is an indication that everything we do must have regard to sustainable development. The guidance on community strategies in this part of the Bill also emphasises that point.

However much the Government and others repeat the term "sustainable development", it is not as clearly understood as we would like. Unfortunately, contrary to the impressions of some people, the fact that the Government keep repeating something does not necessarily mean that it immediately achieves political and popular assent. Regrettable though that may be, the economic, social and environmental strategies have to be spelt out in the Bill. Mirroring the wording in Clause 2 also reinforces the point that this new wellbeing power will be an important tool in ensuring that we deliver sustainable growth in local authority areas.

We agree with what the noble Baroness is trying to achieve, namely bringing together the different areas of strategies holistically. The framework in Part I of the Bill emphasises the links between well-being and sustainable development. The noble Baroness referred to local Agenda 21 plans, and we must ensure that all local authorities implement those explicitly.

Since Committee stage, we have held discussions with the UK Round Table on sustainable development on these very issues. We are considering a number of suggestions that they have put to us, and we intend to bring forward proposals as soon as possible. However, deletion of the references to "economic, social and environmental" in this context, and replacing them by a simple reference to "sustainable development" we do not believe advances the prospect of local authorities genuinely putting sustainable development in the centre of their approach to community planning and the rest of the wellbeing power.

I agree with much of what the noble Baroness said, apart from her accusations that the Government have backed off. However, I do not believe that that simple deletion and replacement will achieve what she is seeking. I hope therefore that she will not pursue the matter.

My Lords, I agree with the Minister that people use this term in many ways, and it is mouthed as something that is bound to be good, but people mean different things at different times. Has the precise meaning of the phrase been tested in court yet?

My Lords, to my knowledge it has not. I shall check on that point and write to the noble Baroness if that is not the case.

My Lords, I am pleased to hear that the Government are talking to the Round Table about a way of including what they and we would like to see in the Bill. At the moment there is only a power to produce such a plan, even if the words are interpreted in the way the Minister has interpreted them. It is not a duty.

I hope that it is not simply a question of it being difficult to draft or pressure of time, because I am aware of the reply of the Minister, Hilary Armstrong, to the Round Table on this matter, which was that it is simply not possible in the time available to consider the full extent of authorities' existing functions and the implications of the impacts of such legislation. It sounds as though the Government are now more interested in pursuing the objectives of the Round Table in implementing sustainable development, so I hope that the pressure of time on legislation will not be an impediment. I beg leave to withdraw the amendment.

moved Amendment No.13.

My Lords, I was delighted to see, on my return from a few days' vacation last week, that the amendment had been tabled, since it spared me the bother of returning to this subject, which we debated at Committee stage, following an amendment that I put down in almost identical terms. Up to a point, the Minister gave a good response to that debate. None the less, I am grateful to the noble Baroness, Lady Hamwee, for raising the subject again.

One thought occurs to me in relation to the provision that we are debating. Clause 5 says:

"If the Secretary of State thinks that an enactment (whenever passed or made) prevents or obstructs local authorities from exercising their power under section 2(1) he may by order amend, repeal, revoke or disapply that enactment".

Perhaps the Minister can give me the assurance that that applies to this Bill, as well as to all other Acts. It is quite clear from the drafting of this legislation that aspects of it are particularly designed, shall we say, to squeeze the freedom of action of local authorities in this regard. After a short while, I can imagine that the Secretary of State may face a queue of local authorities—or, indeed, as has been said, a series of pleas may be presented at the central, local partnership meeting—requesting the release of aspects of this Bill. Therefore, I shall be glad to hear that this provision in Clause 5 also applies to the rest of the Bill.

My Lords, quite apart from the merits of the amendment, which seem to me to be considerable, can the Minister tell us why this clause says:

"If the Secretary of State thinks that an enactment … prevents or obstructs local authorities"?

The word "thinks" is very tentative. If the Minister was asked whether he considered that this Act obstructed local authorities and he was not sure, he would say, "I think so". Surely the Secretary of State would not take what is really quite drastic action unless he has considered it. The usual word in legislation for such a provision is "considers". The Minister ought to consider that, whatever he thinks.

My Lords, perhaps I may, first, assure the noble Baroness, Lady Hamwee, that my Secretary of State is very frequently and normally up at three o'clock in the morning. Therefore, he would be prepared to consider any application from local authorities in this regard. However, if we were to institute a totally formal process on what is intended to be a collaborative approach to identifying problems and exerting the ability to repeal or modify those barriers, we would be in a bit of a stand-off situation.

After all, we have gone into some institutionalised collaborative activities, such as health action zones and work on regeneration and on the need to encourage local authorities to identify barriers under these powers. But if we were to have a formal application system whereby a local authority transparently, if you like, put forward a proposal that the Secretary of State had to consider and pass judgment upon, the process would be less flexible and open in practice than under the current provisions. There is nothing in the present draft legislation that would prevent local authorities or their representative bodies putting forward any proposal to the Secretary of State in this area for him or her to regulate under the powers in Clause 5.

We are encouraging proposals. But if we have a formal legislative mechanism, I am not entirely sure that that would add to such encouragement. Indeed, it could lead to a too formalised way of considering these issues. It is possible that a particular application might be considered or thought inappropriate—"consider" is probably right in this context, but I shall have to check with parliamentary draftsmen as regards other contexts—in the way proposed, but there could be some other modification that would meet the local authority's point. It would be quite difficult to deal with that situation through a formal application system.

Therefore, although I have some sympathy, as was the case with the amendments of the noble Lord, Lord Dixon-Smith, with the purpose of the amendment—namely, to make it absolutely clear that local authorities, the LGA or combinations of authorities could take the initiative in this area we feel that a formal application system would not help the process and cannot accept the amendments of the noble Baroness. We shall, of course, give more practical encouragement in the statutory guidance in order to highlight to local authorities the availability of this Clause 5 provision on the use of the well-being power. That could provide the kind of permanent reminder to local authorities that they can put forward proposals to the Secretary of State at any time, including three o'clock in the morning. Given the Government's general openness to such proposals, I hope that both parties opposite will accept our goodwill in this area and not seek to institute a formal application system by pressing this amendment.

In regard to the point made by the noble Baroness, Lady Carnegy of Lour, I should say that she half convinced me when she intervened. I shall check on the wording in this provision to ascertain whether it is appropriate and parallel to other circumstances. I suspect that parliamentary counsel has a good answer of which I am not immediately aware.

My Lords, before the Minister sits down, I should remind him that he did not respond to my specific point regarding whether the provision in Clause 5 will also apply to this Bill.

I am sorry, my Lords. The answer is yes.

My Lords, I am not attacking the goodwill that may apply to relations between local authorities and the Secretary of State, because I would want to encourage that. I shall leave the matter as it is, but I suggest that there are certain situations where goodwill is fine but where a degree of formality, because of the transparency and clarity, should accompany it. That is an important point. There are occasions—the revocation of enactments is likely to be quite a serious one—when the processes that would be put in train to enable all those who are interested in the subject to be properly informed would be quite appropriate.

I used the word "transparency" because, as I said, it has been recognised as being very important in relations between local and central government. In wider constitutional terms, I believe that the Government are making a mistake here if they think that informality is the right way to go forward. Having made that point, I beg leave to withdraw my amendment.

moved Amendment No. 15:

After Clause 5, insert the following new clause—

My Lords, I appreciate that the noble Baroness has changed her amendment as compared with the one that was proposed in Committee. While I do not think that she has completely shot herself in the foot the net result is that she is not proposing in the new clause anything that is not already contained in Clauses 5 and 6, which already enable the Secretary of State to rationalise or remove statutory planning requirements. We all agree that there should be some rationalisation. We hope that the development of the new community strategy and other aspects of the Bill will provide a context in which some amendment of the current statutory requirements in relation to plans might be sensible and deletions and modifications might be proposed by the Government to dovetail with that. However, the Clause 6 powers already provide the remedy for that.

It is also conceivable that in implementing the strategy to promote or improve the well-being of their area, authorities may encounter legislative obstacles, notwithstanding the broad new powers in Clause 2. However, if that is the case, we can use the Clause 5 powers to make changes to the legislative framework. Therefore I am not clear that any area falls between Clauses 5 and 6 where the Secretary of State would not have the appropriate powers, which he may or may not exert, to use the phraseology of the noble Baroness. Were she seeking to make it compulsory for the Secretary of State to exert the powers, the situation might be different. However, he may already exert those powers under Clauses 5 or 6 of the Bill as drafted. Therefore the noble Baroness's proposal does not add anything to his powers as regards the ability to achieve the objective which I think we all share; namely, to rationalise and make compatible the various statutory requirements on the production of plans in this area. I hope that on that understanding the noble Baroness will withdraw the amendment.

My Lords, we sometimes run into difficulties—I certainly do—through the drafting conventions in regard to using the terms "may" and "shall". One says politely that the Secretary of State may do something when sometimes one understands that he will do it and not just think about it. On other occasions we take the words at their normal meaning; that is, that he may do something and, implicitly, may not do it. I am concerned that if the Secretary of State thinks that a repeal or a revocation is a good idea, he should carry that out. However, I recognise that I shall not succeed in taking this matter any further. I leave the House with the thought that I hope that there will be fewer plan making requirements imposed on local authorities a year or so after the enactment of the Bill. We would be doing all of them a favour if we could achieve that. I beg leave to withdraw the amendment.

moved Amendment No. 16:

My Lords, I recognise that there is a concern on the Benches opposite with regard to favouritism. I had hoped that my remarks in Committee had indicated that we are talking about local authorities in a particular situation. That could involve the groups of local authorities to which the noble Baroness has referred, health action zones and so on, where an individual authority or a number of authorities may be involved in a special relationship with the Government.

Having attempted to move an additional Henry VIII power on the previous occasion the noble Baroness now tries to reduce this Henry VIII power substantially by saying that it should be required only for a limited period. The word "temporary" is not defined in the noble Baroness's amendment and I am not aware that there is any legal definition of it. Therefore I believe that there is a problem with her amendment in any case. However, there is also a principle involved here. There cannot be a standard time for piloting new approaches. In some cases it will be several years before we can assess whether or not a measure is still needed. Amendments that we introduced subsequent to the occasion when we previously discussed this issue require that the procedure set out in Clause 8 will guarantee not only extensive consultation but also rigorous parliamentary scrutiny of any order made under this provision. In that context, clearly the Secretary of State could propose a time limitation or it could be suggested that a time limitation should be established. I do not think that committing ourselves to a rather vague "temporary" in the way the amendment is drafted would help matters. Indeed, in many cases there may well be a permanent or, certainly, a very long term distinction between authorities. It would seriously reduce in general the flexibility of the Secretary of State to operate under this clause where, in particular cases, it may be appropriate to deal only with a defined and temporary period in terms of removals or of special provisions.

I hope that the noble Baroness will accept that we do not intend that there should be favouritism and that we intend there should be some degree of flexibility for the benefit of local authorities.

My Lords, I have used the occasion to express our concerns. I accept, of course, the Minister's good faith in the matter. We have it on record. If any future Minister were to apply inappropriate favours, it would be an issue to which we could return. I am content with that. I beg leave to withdraw the amendment.

moved Amendment No. 17:

After Clause 8, insert the following new clause—

My Lords, I agree with the sentiment of the amendment moved by the noble Baroness, Lady Hamwee, in terms of promoting equal opportunities. Indeed, in her argument she could have added that the matter appeared in the GLA Bill. None the less, more recently the Government have made it clear—especially in terms of the Race Relations (Amendment) Bill—that they are considering a positive statutory duty to promote, in this case, racial equality on all public authorities. To include a separate duty on local authorities at the moment, in advance of this legislation, may not be sensible. Indeed, it could lead to a need to amend the legislation again as soon as it reaches the statute book.

Moreover the Government are proposing comprehensive legislation. The amendment has more the air of a general aspiration, which may in turn be differently interpreted by local authorities in a way which would be unhelpful to the shared common objective of equal opportunities. In addition, such comprehensive legislation must pass the tests of being effective, clear and able to be used. It needs to be carefully crafted before it is agreed to by your Lordships' House.

The Government have embarked on consultation in regard to racial equality as well as in regard to the equal opportunities aspects of the Bill. We want to find and spread best practices in this area and to see how such legislation may apply to different kinds of public bodies. We are widening the consultation to include public bodies which may find themselves in varying and differing circumstances. I repeat that the Government are keen to introduce appropriate legislation on equal opportunities in a calm, competent and considered way.

My Lords, I read the amendment with great interest. There is, of course, already legislation on the statute book governing the first three aspects of the amendment—that is, the aspects of race, of gender and of disability. When one comes to consider the other three aspects covered in the amendment, it raises some very difficult questions which require answers.

Let us take, for instance, the issue of age. Are we to understand that non-discrimination on grounds of age means that one would not have a retirement age? It is perfectly arguable—one may well say this when looking around your Lordships' House—that some people of 65 and 70 are in much better shape and much more intellectually vigorous than some people of perhaps 45 or 50. But, in life, when one employs people, the reality is that, on the whole, they work until they are about 65 and then they retire. Should we say that that is discrimination? If one is fit and able, why should not one continue to work? What would happen in issues such as that?

Other people, through no fault of their own, may have done a very stressful and exhausting job and may wish to retire much earlier. Perhaps they will not be allowed to because that might be seen as discrimination. I can see all kinds of practical problems with something which, in theory, sounds splendid but which opens up difficulties.

As to the aspect of sexual orientation, I thought that the Government believed at least they have said that marriage is the basis of society. Certainly it is my own view that marriage has always been the basic tenet of society. It is only since marriage has started to break down and things have gone wrong in the past 25 or 30 years that we have run into an awful lot of the social problems with which we are now confronted. This is not the time to go into all of them. Certainly, marriage would be downgraded by the amendment. One should clearly understand that. Would a housing authority, for example, be able to give priority to married families with children? Or would that be some kind of discrimination against someone else?

As to religion, again it is an enormous subject. Many people—for example Muslims and Jews—think that homosexuality is wrong, full stop. We have here a clash of rights and interests with which it is very difficult to deal. Before one takes up and accepts the amendment, one should consider very seriously a great many complicated and important issues of belief. As I argued during the passage of the Human Rights Bill, when there is a clash of rights between one group of people and another it is difficult to resolve. It will go to the courts, but that takes time. Until some of those great problems have been considered in great detail, it would be unwise to accept an all-embracing amendment which is unclear.

My Lords, the noble Baroness, Lady Hamwee, waxes extremely eloquent on the subject of equality of opportunity. I hope that one day she will set one of her speeches to music, because she is extremely good at it. However, as my noble friend Lady Young said, the subject is absolutely fraught with problems, particularly when it comes to local authorities with their many responsibilities which impinge on the areas mentioned by my noble friend.

I hope that the Government will tell us that they are being extremely cautious and thinking carefully about every aspect of the matter. We do not want them to get into a muddle over local authorities in the way they have got into a muddle over one or two issues which have come to the surface lately, causing anything but harmony in local communities. I am sure that the Government are right if they tell us that they are proceeding slowly and carefully and that they are considering the extent to which they need to go beyond existing legislation as it applies to local authorities.

My Lords, both noble Baronesses who have just spoken highlight exactly the need for our amendment. It is precisely in difficult areas such as housing need that local authorities require most help and guidance from the Government by way of having clearly spelt out on the face of the Bill what they are supposed to do. There should be extremely clear guidance. One should not give people houses because one believes they are morally nicer than the next person. One gives them houses because they and their children are in need of housing. The decision should be made on an objective basis, not according to whether one feels that someone is a better person in society's terms.

I shall keep off the thorny subject of sexual orientation. However, to expect housing officers or the member of the executive responsible for housing under the structure of the new Bill to judge on a subjective basis whether people are deserving of housing would be highly regrettable. Other difficult issues may rear their heads, for instance, those relating to new age travellers. Local authorities which address such issues in the most objective way possible and which bear in mind equality of opportunity fare much better than those which take a hostile, moral tone and effectively pass the problem on to the neighbouring authority to deal with. I support my noble friend's amendment most strongly.

My Lords, we are in a difficult area. I am grateful to my noble friends for mentioning the difficulties. The problem for a local authority is that in many aspects of its work, in order to make sense of a wide problem such as housing, a degree of discrimination is essential. One cannot work without that. The question now arises as to whether such discrimination involves other aspects, be they race, sex, disability, or whatever. Of course, disability might well be argued to enhance the need for proper housing.

My reaction to the amendment is perhaps rather a pragmatic one. If the absence of such a clause were really causing major problems, I would have expected to see far more cases for judicial review of decisions by local authorities. The fact that we do not see them suggests that the community at large probably recognises how extremely difficult and complex these issues are and how local authorities do their best in difficult circumstances to try to rationalise the situation. I must admit that I am not wholly convinced that including such an amendment in the Bill would necessarily be helpful. It might lead to a reverse situation and a whole series of judicial reviews. I have a feeling in my bones that the best course is to leave well alone.

My Lords, I shall be rather cautious about the amendment, but not on the grounds urged on me by the noble Baronesses, Lady Young and Lady Carnegy of Lour. Clearly, strong views are held about morality and the way in which people wish to run their lives and to see their children and families brought up. That is one matter. However, there is an overriding principle when writing the law: equality before the law. Unjustified discrimination before the law should not be practised by local authorities in any of the areas mentioned in the noble Baroness's amendment.

As the noble Lord, Lord Dixon-Smith, said, there is bound to be some discrimination in the approach of local authorities in order to meet broader needs. However, that is not discrimination on the grounds of any of the issues referred to in the noble Baroness's amendment. It is therefore not for that reason that I am being cautious; it is more for the reason outlined by my noble friend Lord Harrison. He indicated that since we inserted a similar clause in the Greater London Authority Bill, we have begun to move a good deal in terms of race relations—which is an extremely important part of local authorities' responsibilities—and we have stated our intention to introduce a wider duty in the Race Relations (Amendment) Bill which, when carried, will inevitably mean that we have to return to this provision and amend it virtually as soon as it reaches the statute book.

Although we recognise that there are existing requirements on local authorities and that the legislative requirements will be changed if and when the Race Relations (Amendment) Bill is carried—and it may be sensible to clarify the responsibility of public authorities at that point—we do not believe it sensible to insert this provision in the Bill at this point until such clarification is achieved, particularly in relation to race equality pooled together in a wider assessment of the equality responsibilities of public bodies. I hope that the noble Baroness will accept our intentions in this area and will not press for this formulation in the Bill at this time.

My Lords, before responding to the Minister's remarks, in response to the noble Lord, Lord Dixon-Smith, it may well be the case that we have not seen applications for judicial review because there is no legislative basis for applications to be made. He said that we should leave well alone. It is because we fear that things are not as well as they should be that we are persisting with the amendment.

I do not for one moment suggest that the situation is easy. I am flattered by the suggestion that my speeches might be set to music, but I do not know that that would take the debate much further forward other than that we would debate the type of music. The wording of the amendment to,

"have regard to the need to promote equality of opportunity … to eliminate unlawful discrimination and … to promote good relations",

does not go as far as some noble Lords have suggested. I take the point that there are difficulties over age. When that was debated in the context of the GLA Bill we made the point that we were not necessarily thinking of old age; there are issues regarding young people as well. Furthermore, with regard to sexual orientation and the example used of housing provision, as my noble friend has indicated, the major consideration is likely to be not if there is a married couple with children as distinct from a same sex couple, but the children. We believe it is important that the regulations followed by housing officers should be clear with regard to the process and should be clear about what is relevant and what is not relevant.

I must ask the Minister whether the noble Lord, Lord Harrison, can give us any further indication as to the timing. As he says, the Race Relations (Amendment) Bill is about racial issues, and we have quite deliberately listed other issues which give rise to discrimination in this amendment.

My Lords, I cannot give the noble Baroness a definitive timetable in relation to the Race Relations (Amendment) Bill. It should be conducted and completed during this parliamentary Session. Wider consideration would not be instant on Royal Assent to the Race Relations (Amendment) Bill, but it would take place thereafter. I shall see whether I can give any greater clarity on timescale to the noble Baroness, but as of now I cannot.

My Lords, that would certainly be helpful because even if we do not take the matter any further in this Chamber, I should be very surprised if my honourable friends in another place, and indeed other honourable Members, did not wish to pursue the issues. To know what the likely timetable will be obviously will assist them considerably. I beg leave to withdraw the amendment.

moved Amendment No. 18:

Before Clause 9, insert the following new clause—

My Lords, we have two amendments in this group. Their effect is similar to that of the amendment moved and the amendments spoken to by the noble Lord, Lord Dixon-Smith. At the previous stage, the Minister was firm in his argument that the Government do not believe in one form of executive arrangement across the board. Despite his protestations about the options that might be available within the three models set out on the face of the Bill, he seemed very much opposed to loosening the constraints in any way at all. I give as an example whether directly elected cabinets should be elected to specific posts or generally.

The noble Lord was concerned that decisions should be clear, transparent and accountable. As a result of the Bill, we will know where the buck stops, but we will be much less clear about how it reached there. The noble Lord also referred to councillors being equal and we have had debates about the role of councillors who are not part of the executive. In these amendments we are not saying that the present committee system is perfect—far from it—but what we are saying is that there should be local choice. It is extraordinarily heavy handed not to allow either the status quo or what has become known as the status quo plus—an improved system but built on the present structures—if that is what, after local consultation, appears to be preferred. That is over-control by the Government.

In addition to Amendment No. 19, we have Amendment No. 56. Clause 32, to which Amendment No. 56 relates, was introduced by the Government as a safeguard to ensure that councils progress to new constitutions at a reasonable pace. At the previous stage the Minister said that the clause does not give powers arbitrarily to require local authorities to hold referendums or to intervene in other circumstances. Amendment No. 19 seeks to put on the face of the Bill that Clause 32 will not be used when a local authority can show that it has carried out proper and full consultation of its local community. In other words, having complied with Clause 33, it should not then be forced in a direction which neither it nor its local community wants to take.

We very much support the thrust of the points made by the noble Lord, Lord Dixon-Smith, and, far more importantly, are being made powerfully and loudly on the Bill by almost every sector of local government and by commentators, academics and so on. I said at the previous stage—I shall say it again because it bears repetition—that we are sad that the Government have taken one or two steps too far in a Bill where we very much support a good deal of what is being proposed. In particular, we support the powers of well-being in Part I. We are sad that we are forced to part company with the Government when we come to Part II of the Bill. We feel that we must go on pressing for the Government to listen to the voices that are making these points so loudly outside the House.

My Lords, I wish to speak in support of Amendment No. 20. I hope that the noble Lord, Lord Dixon-Smith, will agree with me that the amendment should refer to line 10 and not to line 15 as set out on the Marshalled List.

The Bill has many virtues but they are in danger of being undermined by a greater exertion of central control over local authorities. I have no doubt that the Government wish to see local authorities revitalised and made more effective, but I fear that that will not be achieved by strengthening even further the grip which central government have on local decision making. Nothing could illustrate that better than a Bill which says that local government can decide on any structure that it thinks best to meet local needs as long as it is one of the models that the Government have designed.

Whether the authority is serving a population of 20,000 or more than 1 million, whether it is in a rural area or urban area, inner city or suburban, whether it is a county council or a district council, if the Bill remains unamended, the structure adopted by the authority must conform to a model set out by central government. Even worse, that seems to give local government absolutely the wrong message, because it elevates process over outcome, it confuses means with ends and it sets a performance standard which is administrative rather than productive. I believe that the Government deserve great credit for having introduced a programme of best value which combines value for money with quality of services delivered. That process evaluates impact and effectiveness. It is at the heart of economic regeneration and it is the best way of tackling social exclusion. Therefore, I wish to ask the Minister this question. Would it not be better to continue to say to local government, "Make no mistake, your performance will be evaluated, and therefore we will continue to monitor your effectiveness, but we will do that not so much by how you do it but by what you do and what you achieve with the resources allocated to you"?

As has already been indicated, the amendment is a variation of the "may" or "shall" debate which often takes place in your Lordships' House. It has been the pattern of successive governments to exercise a preference for "may" rather than "shall". Indeed, only a few days ago, in a debate on the Children (Leaving Care) Bill, when some of us pressed the Government to use "shall" with regard to a provision which we felt was very important indeed, the noble Lord, Lord Hunt, rehearsed the argument, albeit with great charm, that the Government could never foresee every eventuality and therefore "may" was always to be preferred in the use of language in legislation. We now have the reverse of that. Although, throughout the rest of the clause, "may" is used in almost every provision, in this case the word that is used is "must". That is over-regulation of local government and takes away too much discretion from it about how it should devise a structure for organising its work and its responsibilities for local communities.

In those circumstances, we should not mourn the poor turn-out at local government elections, or express the hope that more able people will come forward to be elected members of local authorities, or ask local government to be more innovative and to show more vigour if at the same time we tie its hands and limit its freedom even to fashion a structure to meet local needs. Furthermore, if the clause remains unamended, it will tie the hands not only of local government but of the Minister. For example, let us suppose that a beacon authority or one with action zones of one kind or another demonstrated that it could do even better with a structure different from that represented in the Bill. If the Bill remains unamended, even in those circumstances the Minister would not be able to approve such a variation. I very much hope that the Minister will see the wisdom of holding to the well-tried use of the language in the Bill and accept the amendment.

My Lords, it is with some sorrow that I take issue with a number of local government colleagues for some years. I refer to the noble Lords, Lord Dixon-Smith and Lord Laming, and the noble Baroness, Lady Hamwee. The amendments proposed are subtle in wording but would be catastrophic in effect. They go to the heart of the Bill and of the reforms that it attempts to introduce. I do not want to repeat remarks made at Second Reading, but we are in danger of speaking as though there were no problem as regards local government's standing with the public and with central government, whether this or previous governments. Local government has a major problem of respect, legitimacy and relevance.

The governance arrangements are part of that problem. They are basically 19th century arrangements. The committee system may have served well enough at that time, but we are now two centuries further on. The problem is that the present arrangement seeks to combine in one body strategic leadership, operational implementation and management, and scrutiny—and fails lamentably. There is ample evidence, from Audit Commission studies and elsewhere, that none of those three functions is fulfilled effectively in one body. Moreover, the arrangement is frequently a sham: decisions are taken elsewhere.

The Bill proposes an executive. That is nothing unusual. It is the arrangement to which virtually every other local government system in the world has moved, having experimented for years, in some cases with committee systems. Moreover, we are not asked to support a single model. Three options are proposed, and the Government have spelt out that area committees can play an important part.

In addition, the system will not be imposed by central government. So long as local authorities consult with the public, they will be able to determine which model is appropriate for their differing circumstances. At present, there is only one model that local authorities can choose; namely, the committee system, which is flawed and which does not function effectively in most cases.

It is seductive to think, as the LGA states, that only a few would go down this route were the provision to be changed to "may". I am sorry, but I do not believe that to be true. The noble Lord, Lord Dixon-Smith, is right to compliment local authorities on the way in which they have responded to the Bill in its shadow form as discussed by the Joint Committee in the summer. It is correct to say that most are now seriously considering the options and how to address the proposals. But, in a considerable number of cases, it is only because the authorities recognise that the legislation will require change. That is certainly what local authorities say to me, both at political and managerial level, when I discuss the matter with them. The survey evidence of the LGA affirms that.

The LGA asked all of its members which of the three options allowed under the Bill they would choose. Over 100 of the 300 that replied answered, "another option"—which in most cases meant the status quo. If the amendment were accepted, the reform that is central to this legislation would not come about. That would be to the damage of both the public and local government. It would mean that we had bumped along in the same 19th century manner which is known to have failed in the past.

My Lords, this is a very important amendment. I support not only what my noble friend Lord Dixon-Smith said in moving it, but also the remarks of the noble Baroness, Lady Hamwee, in speaking to her two amendments in this grouping.

I listened with great care to the points made by the noble Lord, Lord Filkin, in defence of the Bill and the Government's approach. We are all saddened by the low turn-out at local government elections and wish that it were higher. However, I believe that the idea that it will be improved by these arrangements will prove a triumph of hope over experience. When one considers that in response to the referendum regarding a mayor for London barely 30 per cent of the population bothered to vote, it hardly suggests that people cannot wait to have an elected mayor and an elected cabinet or management committee around the mayor. Whatever else may arise from all of this, I do not believe that the proposal in itself will improve the standing of local government.

Furthermore, the noble Lord is being very hard on the current arrangements in local government. Of course there are authorities which have not succeeded and which have been rightly criticised by the Audit Commission, in the press and no doubt by the public at large. But a great many have managed satisfactorily, and have been responsive to their electors and the people whom they serve through the committee structures. If, as the noble Lord says, the Local Government Association asked its members about the options and over 100 said that they preferred the status quo, that should tell us something. What are we in business for if not to try to identify the structures and forms that local people would like? If they would prefer something else, I really cannot see why, in a democratic society, we should not try to provide it for them. To say that they have only three options and that they must vote for one of those could be to say that they will choose the best of a bad selection. But if people want something which suits them better—and the noble Lord, Lord Dixon-Smith, illustrated the various types of local government, the difference between big urban towns and country districts, and the tremendous variety that exists in our country—they should be allowed to have it.

My Lords, my point was not necessarily that the public had decided on the status quo as the preferred option, but that local authorities themselves have an inclination in that respect. The LGA survey indicating that most local authorities have determined which option they prefer signalled that two-thirds had not even consulted the public.