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

My Lords, Lieutenant Commander Astiz left this country for Rio de Janeiro on 10th June. Her Majesty's Government decided to repatriate him because no useful purpose would have been served by keeping him further in this country. The United Kingdom had no jurisdiction to try him for any of his alleged offences, which were not committed on British territory. Nor could Astiz have been extradited under the United Kingdom's bilateral agreements with France and Sweden. He was treated fully in accordance with the provisions of the third Geneva Convention.

My Lords, does not the fourth Geneva Convention of 1949 apply equally in this case? Was there not a clear prima facie case against Lieutenant Commander Astiz under Articles 3, 146 and 147 of the 1949 convention? Does not Article 148 of that convention make it mandatory on Her Majesty's Government to bring a person like Lieutenant Commander Astiz to trial in the circumstances in which he came to this country? The question is, why did Her Majesty's Government let him go before all these matters could be tested in the courts?

My Lords, I shall certainly look up the different articles to which the noble Lord, Lord Kennet, has referred, but I am advised that we have no jurisdiction to try Astiz in the United Kingdom for any of the offences which he is alleged to have committed in Argentina. Even if a crime had been committed against a British subject, this would not in itself have provided our courts with jurisdiction.

My Lords, quite apart from the overwhelming fact that there was no jurisdiction—which, if I may say so, does create difficulties—is it not also the case that we respected the right to silence of prisoners of war, as I suppose he might be described? I do not know whether the Minister can help over this, but I understand that he maintained silence and that we honoured our obligations under the Geneva Convention as, if I may say so, this country always endeavours to do.

My Lords, I am grateful to the noble and learned Lord for that question, because I think it helps to clarify the matter. Questions which had been received from the French and the Swedish Governments were put to Astiz on 8th June by a senior officer of the Sussex Constabulary, and a detailed report will be given to the French and Swedish Governments as soon as possible.

My Lords, can the noble Lord say whether those Argentinian prisoners of war who are still on the Falklands are being made, first, to clear minefields and, secondly, to clean up the houses of those islanders which they have looted and vandalised, often in the most disgusting fashion?

My Lords, that is another question.

My Lords, may I ask the noble Lord why this man was returned by air in the luxury of a first-class compartment to the Argentine?

My Lords, the apportionment of the cost involved in repatriation is a matter for discussion between Her Majesty's Government and Argentina through their protecting power, Brazil.

My Lords, will the noble Lord answer my question? Why was he returned first-class?

My Lords, I am afraid that I do not have the answer to that particular question, except that so far as I am aware the most sensible and rapid means of returning Astiz where he ought to go were used.

My Lords, can my noble friend clarify the answer he gave just now when he said that a report was being prepared on the interrogation—if that is the word—of Commander Astiz? Can he say whether the French and the Swedes have been given whatever answers he gave, and have been given the opportunity to put further questions if they arise?

No, my Lords, I cannot add to what I have said to the noble and learned Lord, Lord Elwyn-Jones. We did what we felt we were required to do in acting properly under the Geneva conventions. Astiz is now repatriated.

My Lords, bearing in mind my noble friend's original Answer when he said that:

" no useful purpose would have been served ",

if Commander Astiz had been treated in any other way, would my noble friend agree that to bring an evil man to justice is nothing if not useful?

My Lords, that would be a matter for the courts. For our courts there was no jurisdiction.

My Lords, despiteall the noble Lord has said about the third convention, would he not agree that the fourth convention makes torture committed in the course of an armed conflict—and the so-called dirty war in Argentina was an armed conflict (they used Pucara aircraft in it)—justiciable in any country which happens to be able to lay hands on the accused person Would he not also agree that the fourth convention makes the prosecution of such persons mandatory on all signatories?

My Lords, I think that I have made the position clear. There were only two ways in which to go about this. One was for there to be jurisdiction for the courts, and for our courts there was no jurisdiction. The other way was to question Astiz as a prisoner of war. Under the third Geneva Convention Astiz was treated fully in accordance with the provisions. These require us not to put any pressure on him to obtain information of any kind. All that prisoners of war are required to provide is their name, rank and number. That is what happened. Astiz was then repatriated.

My Lords, is it not also the case that the third convention does not require the Government to return any prisoner of war until the cessation of hostilities, but that Astiz was returned before the cessation of hostilities?

My Lords, the noble Lord is in effect—and I am not unsympathetic to the concern he is showing—starting to say that Astiz should have been treated as a hostage. That would have been quite inconsistent with the provisions of the third Geneva Convention.

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

My Lords, there is no agreement between Her Majesty's Government and the Guatemalan Government about Belize. Although Belize is an independent sovereign country, we accept that Her Majesty's Government may have to play some role in any future negotiations with Guatemala on this issue. We therefore continue to watch the situation carefully and are in close touch with the Government of Belize about it.

My Lords, can the noble Lord describe to the House what then is the status of the Heads of Agreement between the United Kingdom and Guatemala of 11th March 1981 by which both recognised the independent state of Belize and agreed to respect its sovereignty, and which sets up a joint commission of Belize, Guatemala and the United Kingdom in order to see to the keeping of the Heads of Agreement?

My Lords, Her Majesty's Government and the then Guatemalan Government signed Heads of Agreement which included Guatemala's undertaking to recognise Belize's independence on the date which the noble Lord mentioned. Subsequent talks broke down and the Guatemalan Government refused to recognise the independence of Belize in September of last year, and then Guatemala broke consular relations with Britain over this.

My Lords, can the noble Lord the Minister tell the House what steps are being taken to try to get a peaceful solution in this area rather than a situation of competing armament? Particularly can he say what talks are going on with the United States of America? Are they still sending arms to Guatemala and trained personnel, or have they now switched to Belize, which in either case must escalate the tension in what is really a very vulnerable and naturally peaceful area?

My Lords, I agree with the noble Baroness that in the end Belize must have a satisfactory undertaking from Guatemala. As the original Answer which I gave to the noble Lord, Lord Kennet, in essence says, the United Kingdom stands ready to give what help it can. I am advised that the United States does not give aid to Guatemala at the present time.

My Lords, the noble Lord has not answered my question about United States involvement with Belize?

My Lords, I am not aware that the United States is at the moment involved with Belize. The country of Belize receives development assistance on a very considerable scale from the United Kingdom. I am not aware that it is receiving development assistance or assistance of other kinds from the United States at the present time.

My Lords, will the Government undertake not to withdraw the British garrison in Belize until both we and Belize are absolutely certain that Belize is safe?

My Lords, we have undertaken to maintain the garrison in Belize for as long as may be appropriate.

My Lords, does the noble Lord draw a distinction between appropriateness and certainty of safety?

My Lords, the matter of the appropriateness of keeping the garrison in Belize, which is very important, will be kept under review.

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

My Lords, when we were seeking peaceful implementation of Security Council Resolution 502, we were in touch with a number of Governments which might have influence with Argentina, including the South African Government. It would not be right for me to reveal the content of confidential diplomatic exchanges.

My Lords, is it not a fact that South Africa, which has a close alliance with Argentina, did not in fact join in sanctions? Is he aware that Argentinian torturers, including Commander Astiz, were recently in Pretoria introducing new methods of torture into South Africa?

My Lords, so far as the first supplementary question which the noble Lord has asked me, the South African Defence Minister said in the South African Parliament on 24th May:

"South Africa has not provided or sold any missiles or aeroplane parts in any way, as has been reported, before or during the Falklands conflict ".

We have received no private or other assurances from the South African Government going beyond this. So far as the second question which the noble Lord asked is concerned, I have no information on that matter.

My Lords, is it not a fact that the United Kingdom has achieved one of the greatest triumphs on behalf of freedom and justice in the history of the world, and that these relatively minor aftermath matters are of little significance in comparison with that great victory?

My Lords, I am grateful to my noble friend for that supplementary question.

My Lords, may I ask the Minister whether he will link this question with the one I asked him yesterday which he did not answer? Is it not ironic that the British Government should ask the South African Government to apply sanctions to Argentina because of the Argentine's breach of international law, when the same British Government have consistently refused to admit that the application of sanctions to South Africa is appropriate over a similar breach of international law in Namibia?

My Lords, that seems to be a totally different question on which the noble Lord had better put a Question on the Order Paper.

My Lords, in conclusion, if I may revert to the matter of the Falklands, which has been raised, may I ask whether the Minister is aware that many of us draw a total distinction between the incompetence of the Government and the efficiency of our forces and that, during the inquiry, which the Government themselves have agreed is necessary, we shall continue to maintain that distinction?

My Lords, it is a distinction which the noble Lord draws. It is not a distinction which I draw. The end result of the military operation in the South Atlantic has been one reflecting very great credit on this country. Now let us all together continue to try to see if we can overcome the problems of the future.

My Lords, is my noble friend aware that many people hope that the Government and future Governments will bear in mind that it was possibly the extreme ideological objection to certain things in South Africa which caused the end of the Simonstown Agreement, which may have avoided many of the problems and deaths we have had to face in recent weeks?

My Lords, we do not have plans to initiate discussions with a view to reactivating the Simonstown Agreement.

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

My Lords, the Government have no firm information on the effects of the extension of permitted hours in Scotland, nor have they received any representations that the increased hours have had any adverse effects.

My Lords, while thanking the Minister for that rather inconclusive reply, may I ask if he can say whether there is any indication that there has been any large increase in the consumption of alcohol as a result of the change?

My Lords, the Government would not be able to indicate the consumption of alcohol in Scotland, but I am able to say that there has been no significant increase in drunkenness offences or motor vehicle offences caused through drink since the 1976 Act came into force. Lord Campbell of Croy: My Lords, I am sure the House will be interested to hear that confirmation by the Minister, that since the licensing hours in Scotland were relaxed six years ago there has been no increase in drunkenness. Can my noble friend say whether, in view of the way the report of the Clayson Committeee for Scotland was followed in making that change, the Government have any intention of doing anything about the similar report for England and Wales which was put forward by a committee presided over by my noble friend Lord Erroll of Hale?

My Lords, I am afraid I cannot give any indication of the Government's views or wishes as to the consumption of alcohol in England and Wales.

The question of the consumption of alcohol in Wales is a very delicate matter, especially on Sundays, my Lords.

My Lords, before asking my supplementary, I had better declare an interest in that my brother Maitland was a member of the committee which recommended the change. Would the Minister agree that it is much better to have civilised drinking, rather than the backdoor stuff we had before the remission was made?

My Lords, the whole House will be glad to have that endorsement from a fellow Scot.

My Lords, does the reference in the Question to flexible hours mean that barmaids cannot get an evening off occasionally?

I understand that the answer to that is, no, my Lords.

moved Amendment No. 1:

My Lords, I am grateful to the noble Baroness, Lady Birk, for moving the amendment because it gives us a brief opportunity to focus the debate on the Bill at this stage on the important question of Clause 8 and the policy that lies behind it. I suggest to her at the outset that all the passionate speeches to which she referred were not made only on the one side; there were some made on another side giving opposing views.

Your Lordships will not need to be reminded that Clause 8 is about holdback and, more particularly, about the Government's power to protect authorities which individually meet their targets (or otherwise gain exemption) from the effects of any general reduction in the amount of grant available for distribution. Clause 8 does not itself make provision for a general reduction in grant. The power to determine—and, if necessary, redetermine—the overall level of grant is one which the Government have always possessed and which, given the importance of local authority public expenditure in the economy as a whole, it is inconceivable that any Government could alienate. About that, at least, I think there can be no argument. Clause 8, therefore, is about grant distribution; it is designed to give some measure of protection to authorities that cannot reasonably be held responsible for the overspending that may lead to a reduction in the grant aggregate. In essence, it makes it possible for the Government to be more responsive to the circumstances of individual authorities than has been possible in the past.

In view of that, I am surprised that the amendment is restricted to 1981–82 and 1982–83. If there were here important points of principle, I should have thought that they would have been equally applicable to any year in which the powers under Clause 8 were used. I cannot accept the inference, which perhaps we are being invited to draw, that our proposals for 1981–82 and 1982–83 are ill-considered or unresponsive; indeed, quite the contrary. Authorities have had every opportunity to comment on our proposals, and we have listened carefully—and continue to listen carefully—to everything that they say. Although the Bill has not yet been enacted, we have always followed the spirit of the limitations that Clause 8 will impose. All the exemptions proposed for 1981–82, including the important GRE exemption, were introduced following specific representations from local authorities. We have not singled out any individual authorities for special treatment, but have always made our proposals on the basis of general principle; and, before they are implemented, our proposals will require specific parliamentary approval.

Although under Clause 8 there will be no statutory requirement to publish the details of holdback in the main rate support grant reports for 1981–82 and 1982–83, my right honourable friend the Secretary of State warned authorities, before they set their rates for 1981–82, that there might have to be a holdback scheme if they overbudgeted, and he spelled out in detail what that might mean for individual authorities when he called for revised budgets in June 1981. For 1982–83, he published in December 1981, at the same time as the settlement, full details of the holdback scheme that he proposed to implement in England.

So there is no question of inadequate consultation. The Government's proposals for 1981–82 and 1982–83 have been drawn up within the spirit of the restrictions to be embodied in Clause 8, and they have been developed in the light of the representations that have been made. They have been spelled out in sufficient time to allow their effect to be taken into account by authorities when determining their budgets and setting their rates.

That leads me to what is surely the crux of the argument: there has been, and will be, full consultation about the use of Clause 8, and there is no question of our not listening carefully to all the representations that are put to us. My right honourable friend will have to specify in the appropriate supplementary report both the principles in accordance with which any determinations are made, and the considerations leading him to make the determinations. Everything that is done will have to be done in an open and accountable way.

We have heard the argument for an appeals procedure, but there are already, in effect, several appeals procedures, and unless the noble Baroness wishes me to go into detail, I shall not do so.

To sum up, I would say that, as I think the noble Baroness knows, I do not accept the criticism of the proposed use of our powers in respect of 1981–82 and 1982–83 that is implicit in the amendment. Holdback is necessary—and it is as well that it be said, one hopes for the last time during the passage of the Bill—because some authorities have delibertely undermined the relationship between central and local government and have chosen to overspend their targets by an amount that no Government could ignore. Clause 8 is necessary to enable us to protect authorities that cannot individually be held responsible for that overspend, from the grant effects that must surely follow. Subsection (4) of the clause expressly provides for authorities to make representations about the scope of that protection, and for the Government to respond by extending protection still further. At every stage the Government will have to act in a reasonable way and will have to specify the principles and considerations, on which they are acting. To my mind, that is a reasonable and defensible position.

In an earlier debate on a similar subject, the noble Lord, Lord Bruce of Donington, accused me of making heavy weather of the difficulties here. I feel that in this case, by seeking to impose yet another procedure, another round of representations, noble Lords opposite are now the ones who are making heavy weather of it. The noble Baroness said that the proposals in the amendment are modest and reasonable. It may well be that from where she sits, and how she sees the matter, that is so, but from where I sit, they are neither modest nor reasonable, as I think she understands, and I have to resist the amendment.

My Lords, I listened very carefully to what the Minister said. He said several times that he and the Government listen to what is being said; they listen, but the trouble is that they do not hear. This is the whole point. So we go on explaining, bringing evidence to bear on all these matters, in particular the question of retrospection, yet nothing happens. My noble friend Lord Bruce spoke on earlier amendments. They were some of the amendments to which I referred, and they were much more substantial than the present amendment. The Minister said that what we propose would increase the amount of administrative work, but I would point out to him that the amendment is much slighter than previous amendments—that is why I described it as more modest and more reasonable—and therefore it would not create the same demand on administration. How many authorities would appeal? There would not be so many, but at least they would be treated justly. Only those authorities that are affected by the 1981–82 penalties would be involved; not all of them would appeal. We have restricted the amendment in that way in order to make it a rather more attractive proposition. The Minister asked, Why not widen it further? But it does not seem that it would make very much difference.

The Secretary of State can act only within principles applicable to all authorities, and these principles we believe must be published. There is a considerable difference between general principles published in the cold light of a statutory instrument and the real problems that the principles can cause to the services provided for people by a local authority where there is reduction in grant. The amendment tries to ensure that everyone knows the consequences of the principles. I feel this to be such an important matter that even at this stage of the Bill I must ask the House to divide on it.

moved Amendment No. 2:

My Lords, the House will be grateful to the noble Lord for having introduced this amendment in order, as he says, to dot the "i"s and cross the "t"s. I therefore hope that the noble Lord will not take it amiss if I endeavour to assist him even further in this process by raising some questions which may be of a little importance. The provisions of Clause 9 require any information given to the Secretary of State under the provisions of Section 65(1) of the Local Government, Planning and Land Act—that is, information for the purposes of block grants—

" to be certified under arrangements made by the Audit Commission ".

I hope that when the noble Lord replies he can possibly give some indication of the interim arrangements that will apply pending the establishment of the Audit Commission within the full ambit of its powers; and that he will also give some indication as to whether, after the appointment of the Audit Commission, these provisions will apply to all auditors, whether they be officers of the Audit Commission itself or whether they be firms of accountants appointed by the Audit Commission.

As the noble Lord has said, this amendment itself adds some further words to the particular section, because under Section 65 of the Local Government, Planning and Land Act 1980, to which this amendment refers, subsection (1) requires the total expenditure to be incurred "by them during the current year to be the subject of the submission which is made to the Secretary of State. The noble Lord now wants to substitute the words "incurred or to be incurred". I fail to see, if these considerations have always been common practice within the Ministry, why those words could not have been put in originally in Section 65(1) itself.

The noble Lord assures us that it has been the procedure—established practice, as he says—to require the certification by the district auditor of expenditure "incurred" as well as "to be incurred" for the purposes of the submission to the Secretary of State. So it would seem, on the face of it, that up to now, and since the passing of the 1980 Act, the district auditor has been acting slightly outside the ambit of Section 65(1). I do not think there is anything particularly objectionable in that. I am not seeking to make a point in the party sense of the term, except to say that it is a little odd that the district auditors should be carrying out something which they are not strictly required to do by statute, because the statute requires the certification only of expenditure to be incurred rather than of expenditure already incurred.

I do not think that it is of very great consequence. The practical significance of the matter is this. After the appointment of the Audit Commission, and on the assumption that the Audit Commission, which has the sole power of appointment after consultation with the local authorities of particular firms of auditors when these are appointed, these auditors appointed to do the ordinary audit that is required under this Bill as well as the additional work which is required under the Local Government, Planning and Land Act 1980, will in addition have to be in evidence once again when evidence is submitted or submissions made to the Secretary of State under the provisions of Section 65(1).

It seems therefore that the duties of the audit branch, if I may put it loosely in that way, which comprises private firms selected by the Audit Commission as well as by officials of the Commission itself, will have become greatly extended. I do not want to pass any observations at this stage on the likely cost of all these interventions, but the noble Lord may find that what has hitherto been done by the officials of the audit directorate, which are responsible to his department, as a matter of course in the past, as part of their salaried employment, may, if by decision of the Audit Corn-mission, they come under the ambit of ordinary private audit firms, involve then in rather more cost than in the past. I do not know. It would depend upon the volume of work to be done, the degree of verification and documentation and all the rest. I put that point of view.

My Lords, the other point that arises on this amendment is a technical one. Here, I am at the mercy of the noble Lord, as so very frequently or, as more frequently, I am at the mercy of his parliamentary counsel. When I come to this amendment, in addition to the matters which have been discussing so far, it includes the words:

" as if section 8 above were included in the provisions there mentioned ".

This a bit odd because if one goes back—and I invite the noble Lord to go back—to Clause 8 one will find that the earlier paragraphs of Section 8, in effect, amend Section 59 of the Local Government, Planning and Land Act. If one refers to subsections (1), (2) and (3) one will find that there is, by the operation of Clause 8, written into Section 59 certain provisions.

Now we are required to incorporate the whole of the provisions of Section 8 into Section 65 of the Act of 1980. I should have thought that that is a little cumbersome. I do not see how you can have Clause 8 in two places at once, both in Section 59 and in Section 65. I do not know whether the noble Lord is in a position to explain that, but with the logic at my command at the moment—and I must plead subject to correction—this is the way I read it. I wonder how he reads it. Are the detained provisions of Section 8 going to be incorporated into Section 59 and, if so, why has the whole of Section 8 to be written into Section 65? Can the noble Lord elucidate that? It may be that I have got it all wrong. If I have, I should like to be corrected. If I have it right, I should like to know what he proposes to do about it. The point is a drafting point only, but in this House we like to try to perfect it if we can. It may be that my remarks have contributed nothing but, if they have clarified, then possibly they have contributed something.

My Lords, far from the remarks of the noble Lord contributing nothing, I think that with all the technical matter that he has brought up in this section, they have contributed a great deal. If he has uncertainty about it, how much uncertainty would others have with less knowledge than he. I welcome his bringing up these points, and as far as I am able I take the opportunity to respond. I should perhaps have gone into greater detail in introducing the amendment but I was trying to short-circuit the events.

Let me try to answer some of the points. First, I think that I should say that these matters have been discussed in full with the associations, both when the 1980 Act was under consideration and, subsequently, in the grants working group. So far as I know, there has been no important disagreement about that. Similarly, by referring, as we do specifically to the total expenditure figures, it does not cover the current expenditure figures that will be required to hold back for 1981–82, in the form of revised budgets that authorities have submitted. If I get these out of order, I am sure the noble Lord will not mind.

Section 8 is included in the new subsection because some of its provisions are not being written into Section 59. Perhaps that covers that point. The point of the interim arrangements that the noble Lord raised is that the district audit service will be responsible for certification and it is intended that district auditors or additional district auditors will be asked to do this work. This is the present situation and represents no significant change in the procedure. The point on the words "to be incurred" was taken from regulations under the 1974 Act, and Section 65 has nothing to do with the district auditor. As the noble Lord knows, he can audit anything he likes.

I am not sure how far the noble Lord wishes me to go into further detail. Perhaps I may say that the Government considered it sensible to take the opportunity to extend the scope of Clause 56(1) to include the expenditure information required for the purpose of Clause 8. Clause 8 is going to be as much part of the grant calculation as the sections of the 1980 Act referred to in Section 65(1). Therefore, there can be no real argument for excluding it from the scope of the same provisions about information and audit certification.

We are into a complex technical area. I am sure that the noble Lord is not against what the amendment is proposing, but if what I have said in my response has not covered adequately some of the things that he thinks ought to have been covered, he knows I will gladly be in touch with him afterwards.

My Lords, with the leave of the House I should like to ask a further question. The noble Lord said that there has been a degree of overlap between the application of Section 8 to Section 59 and to Section 65. Would it not have been better to have singled out of Section 8 the specific matters that have to be taken into account in Section 65 and to have dealt with Section 65 of Act the in the same way as Section 9 has been dealt with so that it was written into the text of the Act itself? He will find I think on reference to his own parliamentary counsel, that there is likely to be some confusion here. I should like it to be cleared up if possible. At the moment it seems that we have one specific series of amendments to Section 59 and then a global inference that Section 65 is in its totality subject to the new Clause 8. From the drafting standpoint, I would not 11 have thought that was entirely satisfactory.

My Lords, I can only repeat that the point that the noble Lord makes will be considered. Should it be felt that the drafting requires some adjustment, I shall talk with my colleagues. So far as I am concerned at the moment, clearly I would expect to leave it as it is.

My Lords, in moving that the Bill do now pass, I am conscious that we are nearing the end of the parliamentary stages of the Bill which has attracted its fair share of controversy, and indeed, its its fair share of parliamentary discussion. In your Lordships' House alone some 120 amendments were tabled in Committee and a further 55 at Report. All that for a Bill of fewer than 40 clauses' So, my Lords, I hope you will feel that your Lordships' House has very thoroughly done its job as a second Chamber for examining legislation. It certainly felt like a very thorough job from where I was sitting.

From the Government side, we have not, as noble Lords will be aware, felt able to accept quite as many amendments as usual. In a way, I am personally sorry about that, because one likes to be able to respond to the spirit of helpfulness and courtesy which is always shown by your Lordships, even when they disagree with the policy underlying a piece of legislation. The noble Baroness, Lady Birk, will not mind my saying that the helpfulness from her and especially from the noble Lord, Lord Bruce, has been particularly appreciated this time.

However, on this occasion, it seemed to us that— especially on the points of principle—there was not much we really could concede. Of course, this was a No. 2 Bill, so we had a second chance to get the details right. And we must also remember that for Part III the Government had made a considerable number of amendments in another place, in response to Opposition pressure; indeed, this was a fact to which the Labour Party's Front Bench spokesman drew careful attention at Report stage in that other place. So there were indeed some valid reasons, I hope, why we were not able on this occasion to make as many changes as for some other Bills.

Of course, as I have mentioned, the main principles of the Bill have been attacked: that is what oppositions, and parliamentary debate, are for. I certainly congratulate noble Lords opposite—and some noble friends behind me—for the firm but always fair way they presented their case. Indeed, for my own part, I endorsed Parts I and II of this Bill more in sorrow than in anger. Sorrow because, although the sums of money are far from significant to be ignored—and certainly in no way do I apologise for the provisions in these parts of the Bill—I recognise that they are necessary only because a relatively small number of local authorities have acted contrary to the spirit of responsibility which once so characterised the relationship between central and local government, and which I hope will one day again so characterise matters.

I do not want to say a great deal. Part III of the Bill, may I say again, put through our objective of an enhanced role and a greater degree of independence, as we see it, for local government auditors. I would still venture the opinion that with time local government will come to feel that its doubts about the Audit Commission have not been fulfilled.

But, my Lords, I do not want to make party political points. The real purpose of this speech should be—and certainly is—to acknowledge the very hard work that has been put into this Bill by so many Members of your Lordships' House. If I may be specific, I appreciate the role of the noble Baroness, Lady Birk. She is always so formidable and usually not unreasonable. The noble Lord, Lord Bruce of Donington, has had a special expertise in much of this Bill. He has always spoken with so much eloquence. It may be of some minor consolation for him to know that he could claim credit—he may not have realised it at the time—for drawing our attention at Report stage to Section 65(1) of the 1980 Act. He can certainly be said to be indirectly responsible for this Government amendment that we have today agreed. We noted carefully what he said at the time.

Although he is not here, may I also say I appreciated the contributions from the noble Lord, Lord Evans, and the ones which the noble Baroness, Lady Stedman, made. From the Cross-Benches the noble Lord, Lord Hill, spoke with great feeling on behalf of his home county of Bedfordshire. I want to say for the record that it is not possible for me to omit to refer to the contribution made from the Benches behind me, not least by my noble friend Lord Ridley. I hope that I can still call him my noble friend. I shall also mention my noble friend Lady Gardner of Parkes, whose amendments I am pleased to say we were able to accept. Also, finally, I should mention my noble friend Lady Platt of Writtle and of course—always here—my noble friend Lord Mottistone.

My Lords, I am not going to take up any more of your time with a roll call. We are all indebted to those who have spoken in our debates. I venture to submit that the discussions on this Bill have been constructive at all times, regardless of the height of feeling or the importance of the issue—and we have discussed some very important issues. I do not minimise the gap that has often existed between this side and the Opposition. But I hope that for today at least we can agree that the Bill has been given a very thorough examination. The points at issue have been very comprehensively debated. I thank all who have taken part, and in that spirit I beg to move that this Bill do now pass.

My Lords, when this Bill came to this House from another place some two months ago it seemed to me, to my colleagues on the Benches behind me and to colleagues in the Liberal Party and the SDP, that there was an opportunity for this House to prove its worth. The Minister has just said that we have done a thorough job. It may have been a thorough job but certainly the results have been completely sterile.

I should like to thank the Minister, not only for the very felicitous remarks that he has made about my colleagues and myself, but for, as always, his own courtesy, conduct and patience throughout the Bill. I know that he will deny this—I feel he does not really like the Bill very much. 1 do not see how he could like it. I know that he will not agree with me, but that is what I like to feel.

There were serious constitutional issues at stake in this Bill. First, the relative positions of central and local government, the excessive and encroaching powers of the Secretary of State and the setting up of another quango on which my noble friend Lord Bruce had a great deal to say. I am very grateful to him for the knowledge that he brought to bear and the way that he tackled Part III of this Bill.

These are all issues which are of great concern to noble Lords in this Chamber. These issues transcended party political lines. We saw that because this is one of the rare occasions when the local authority associations, whether controlled by the Conservatives—as in the case of the ACC and ADC—or Labour—as with the AMA—have been united in opposition to a great many important features of the Bill.

It is true that during the Bill's passage I have had the pleasure of being joined in the Division Lobby on several occasions by the noble Viscount, Lord Ridley. I also know that he found it difficult—and it pained him considerably—to vote against his own party and his own Government. I am sure the Minister will find that he is still his good friend, but certainly the noble Viscount is not the sort of person to do that lightly. He obviously felt very strongly about it. I remember one occasion on which noble Lords from all parts of the Chamber were united in their opposition and that concerned the composition of the Audit Commission. That was one thing on which we all felt that the Government could have given way, certainly so far as representation by local authorities was concerned.

This Bill then provided the House with a golden opportunity to justify itself as an improver of legislation, which we all like to think that we are and indeed which we very often are—an improver of legislation which is rather hastily despatched to us from another place. But what changes have been made in the Bill in the past two months? It is now considerably longer. We have added seven new clauses to a Bill that had only 32 when it came to us. It now runs to 46 pages as compared to the earlier 34 pages. Even more disturbing, at least for the Government's counter-inflation policy, is the fact that the price of the Bill has increased from £3.80 and now costs £4.20 for today's version. I wonder whether the Government's amendments are worth that extra 40p. I do not know.

This Bill, like Caesar's Gaul, is divided into three parts. Part I has been considerably redrafted by the Government, but it is doubtful, alas!, whether they have necessarily led to improvements. It is true that some of the changes tidy up the existing rating law and of course I welcome that. But hidden among the amendments are what I am afraid I can only call two pieces of political chicanery. First, there is the retrospective provision designed solely to overturn the majority will of one county council—Bedfordshire County Council—on which there has been a great deal of discussion. Secondly, there is a provision which allows incoming Conservative councils to implement their policies by levying in effect a negative supplementary rate. Of course, we know the burden of Part I is designed to prevent Labour councils implementing their policies at once by banning any positive supplementary rates. But our objections to Part I go beyond these party points, as does so much else of our concern with this Bill. I will not of course go into details about this now because we have dealt with them at length in Committee and on Report. However, we remain convinced that those provisions concerning the costs of abortive supplementary precepts are frankly just plain unworkable.

Part II of the Bill came to us consisting of just the notorious Clause 4, and the Government intended to introduce these vital amendments on Report. As we all know, we did have a recommittal so that it could be dealt with at Committee stage. Had it not been for the troubles in the Falkland Islands, it would have been taken on a separate day. But it seems to me that all that has been achieved here by the Government amendments (on which there was no "give" at all) is to heap complication upon complication on to the legal framework for block grant, which seemed already to be almost entirely impenetrable. I would also add that the debasement of the English language is increased by this Bill with its talk of "super differential holdback", "non-differential holdback", "close ending", "claw-back"—unfortunately that is in the jargon already—and other examples of ugly speech.

What concerns us on this side of the House even more —and, I suspect, many noble Lords opposite—is the extent to which this complexity masks powers for the Secretary of State to intervene in a discriminatory manner in the finances of individual local authorities. This, I think, is the core of the objections all round to this Bill. It is adding more and more to the powers of the Secretary of State. It might well be that even the cognoscenti are not fully aware of the implications of this legislation. Alas! I fear that they will be as time goes on. Indeed, judged by the hurried Government amendments—coming as late as today, although the Minister explained how that came about, and we accept that it was evidently partly triggered off by my noble friend—one wonders whether the Government themselves fully know what they are about. We have seen a lot of crossing of legal "t's" and the dotting of legal "i's", and I sometimes think that the department nowadays is unfortunately suffering from occasional fits of severe paranoia. We only hope that will pass and will not reappear in connection with other Bills, but it seems to back up the Secretary of State's own particular brand of paranoia.

One other concern with this part of the Bill, with which we were concerned in the first amendment this morning, is retrospection. We have failed—and we feel very deeply about this—to improve matters on that score one bit. We are landed with something which is quite contrary to the British way of government: that is this in-built retrospection.

Part III of the Bill is concerned with the new Audit Commission and here are some of our gravest reservations. Audit is about encouraging and guaranteeing accountability and this must be a good thing, one thinks, for local authorities. So it is, but not in the manner set up in this Bill. We are told we have a Commission which itself is independent. The Minister has not tired of telling us this. But how independent is it? It is all the time roped in by the Secretary of State as far as appointments, conduct and procedure are concerned. It really will be a Commission which is "packed" by the Secretary of State, although we have been told constantly that the Secretary of State is accountable to Parliament, as of course he is. However, we do not believe that the way this has been done is the right way to do it, and I am sure that my noble friend at the end of this short debate will be making a few comments on this.

Then, in addition to this paradox of independence and accountability, we have two clauses which do a great deal to undermine rather than to encourage the accountability of local authorities. Clause 26 will enable the Audit Commission to be able to name local authorities, and perhaps some of them will be pilloried in reports being made by the Commission. All this tends to undermine local accountability and also local confidence.

This is not to say that any of us believe that local authorities are all perfect and that they all behave in a perfect and altogether efficient manner; but the way this has been done is going to undermine their confidence and make them feel extremely "anti-" and, if I may use the expression, "bloody-minded" about the Government. I would not have thought it would have helped relationships between local and central government. When we attempted—and again it was supported on all sides—to change the word shall "to" may "so that there would be an element of choice and discrimination by the Commission when dealing with matters, this was turned down sharply and abruptly—I mean in procedure and not in words from the Minister—on every occasion.

Clause 27 muddies the local accountability waters even further and brings Parliament into local audit. This worries local government a great deal, and I must be quite honest and say that while I do not share their concern about that altogether, it seems to me that again that has been provided in a very stringent and declamatory manner. Again, we have "shall" instead of "may".

On Second Reading I said that this was a bad Bill in respect of what it sought to do, its retrospection and even its drafting. Unfortunately, the Government have accepted very few Lords amendments which might have remedied this Bill, but instead they have tabled many of their own which compound the Bill's deficiencies. I can think of only one amendment that was accepted wholeheartedly—one that I moved—which now enables consultation to take place by the local authority associations as to the appointment of a deputy chairman of the Audit Commission. What a triumph! What a Bill! I think, then, that we have failed to provide value for money—a phrase which has been much bandied about in our debates on audit—and are charging 40p extra for a bad Bill which, unfortunately, is now much worse.

My Lords—

My Lords, the noble Lord Lord Sandford, may be forgiven for not realising that there is a speaker from these Benches, because, of course, the speaker he expected to see was my noble friend Lord Evans, who, unfortunately, is unable to be here today and very much regrets that this should be so. It is, of course, a very good thing that we were able to get through the Report stage so well the other day, but it is probably a pity that the Third Reading of a major Bill such as this should take place on a Friday. Your Lordships would have missed my noble friend very badly in the debates dealing with amendments if I had had to fill in for him, for I must confess that I find a great deal of this Bill starkly incomprehensible. Nevertheless, when it comes to a Third Reading speech, although I shall not do as well as he would, it is quite easy for any member of this party, or for any member from the Social Democrat Bench, to outline, briefly and quickly, the matters of principle which we not only object to but find extremely horrifying.

We not only find these matters horrifying but, in the last resort, we find them extemely surprising. If your Lordships' sons and daughters, or even grandsons and granddaughters, were asked to write an A-level answer on what the Conservative Party stands for historically and at this moment, in terms of principle, I suspect that fairly high on the list that they made would be freedom and the rule of law. It seems to me that both of these principles, which historically have been attached to the party opposite, have been thrown to the winds, and that in fact the Government have gone into reverse on both.

When I talk about the rule of law, I am, of course, referring to such matters as retrospection. I shall not go into that—we have had an amendment on it today and a vote—except to say that it is most reprehensible. The freedom, which the noble Baroness has just spoken about, that this Bill gives to the Secretary of State to differentiate between different authorities and different cases, is denying freedom to local authorities themselves.

The second matter—the freedom of local government—is even more important. This Bill is one of a number of measures which this Government have taken and which put into reverse any kind of movement towards giving local authorities more power, and giving democracy at the grass roots more respect. It not only ignores the possibility of increasing this movement; it actually goes into reverse. It is a reversal which will not last for very long. I was delighted to see in The Times today that the lawyers' group of the Social Democratic Party have produced an extremely radical document—almost as radical as the Liberal Party's proposals—on recommendations for local government in this country. I was delighted to see that we are both thinking along very much the same lines, and are both totally in opposition to the movement here today.

There is a growing need in our complicated state. The more that decisions move upwards from Westminster to Brussels and outwards to the whole world, the more need there is to give people a say in what affects their lives at the grass roots level. This covers a very wide field indeed and goes much further than the question of local government. For example, I ask your Lordships to take one look at the unemployment problems and the difficulties with which the Government have to wrestle in producing schemes covering the monetary flow and the trade unions at national level, and compare them with the situation at local level, where it is not very difficult to get agreement in a factory between workers and management, where there are good workers and good management.

Only by the imposition of outside forces at national level is the problem always made more difficult, because at village level it is quite easy to see the work that needs to be done to preserve our capital and our resources, and to see the men and women who are out of work and who could be put to doing that work. In all the problems that we face today, we see a greater need for people to make the decisions which affect life around them.

This is a Bill which has put all that into reverse, or which continues the reverse. I do not think that it is a move which will continue. I do not think that it is a move which the country will put up with. There is a growing tendency to say, "No", to this growing over-centralisation which, however clever and wellintentioned—and I give the Secretary of State credit for both of those qualities—goes away from the needs of true democracy, and from a correct, proper and effective way of ruling this country. This is a most deplorable Bill, and I am extremely sorry that we have not managed to change it more in the course of its passage through your Lordships' House.

My Lords, in this parliamentary Session the Government have produced two local government finance Bills to Parliament, and I am sure that Parliament was right to reject the first. It involved far too great and unwarranted an intrusion by central Government into local government. But I have to say that this Bill must be accepted as a regrettable necessity brought upon us, as my noble friend has said, by the irresponsible and defiant behaviour of a small number of local authorities, whose behaviour I hope the party opposite deplores as much as all the rest of us do, but which, alas, they were unable to control. So I think that we have to accept this.

But I should like to express the hope that this is the last occasion on which Parliament will be asked to tinker any more with the system of local government finance that we now have. I hope that on the next occasion when we discuss local government finance it will be along the lines of a fundamental reform, such as was first advocated by the Layfield Committee which went into such matters, and which I think all Members of this House recommended when we discussed the matter last February. The Government now have the result of their consultations on their rather inadequate Green Paper, which did not itself cover the matters sufficiently comprehensively, and I think they now know that there is a widespread desire for a much more fundamental and comprehensive reform.

I hope that when we come to look at this subject again we shall see before us proposals which, among other things, include providing for each tier of local government a source of income which, broadly speaking, meets the whole of their needs, and that by those means we shall get off our backs the need to depend so much on finance from central Government, which leads them to interfere so much in local affairs. 1 hope, also, that we shall see decisively an end of the whole system of precepting, which involves one tier of local authority collecting taxes for another and which is now totally discredited. Therefore, I fear I have to say that this Bill, with all its faults, has to be accepted. I hope that local government can look forward to a happier era before very long.

My Lords, I should like to add my voice to those which have thanked my noble friend for his customary courtesy. As he knows, he turned down the three amendments upon which I was advised by the CBI which tried to make some move in the direction of a fairer distribution of the burden of rates on businesses, which perhaps would have made their rates more commensurate with the services rendered to them. As my noble friend knows, he very kindly gave up time to receive a small delegation from the CBI, and myself, in order to go into one of the amendments and see whether there was a way through. For that we are most grateful.

In conclusion, I should very much like to back up what my noble friend Lord Sandford has just said: that we must have a comprehensive revision of the total system of local government funding which takes into account all the difficulties that different people at different times have advanced to the Government. I hope that there will be not much delay before we hear something positive from the Government. I hope that my noble friend may even be able to give us a pointer in that direction when he replies to this short debate. With that, I personally, with all the misgivings which we have all had, welcome the fact that the Bill is not as bad as it might have been.

My Lords, as we on this side of the House made quite clear from the outset, and we have no reason to change our minds in any way, this Bill is a thoroughly partisan Bill. It ranks with the other two prongs of the present Government's attack on what they consider to be the targets which are worthy of their attention. The other two are the publicly-owned industries and the trade unions.

As I have already said, this Bill is a thoroughly partisan Bill. It has only been possible to ensure its comparatively smooth passage through this House by the very patient and courteous efforts of the noble Lord opposite. If I were a member of the Temperance League and were bent on securing the conversion to total abstinence of the entire Licensed Victuallers' Association, I should not have the slightest hesitation in selecting the noble Lord as my emissary. The noble Lord has always been conciliatory at those points of the Bill which are quite clearly the most controversial and the most harsh. Anyone listening to the noble Lord, as all of us had the privilege of doing, would have found that he exuded mildness and reasonableness all the way through everything that he said. Even through he was provoked on some occasions, possibly by me, he always replied with the greatest courtesy and thoroughness. I have been indebted to him not only for the correspondence which has passed between us but also for the interview which I was able to have with him regarding more complex matters in the Bill of a strictly non-party nature. Therefore, Her Majesty's Government can indeed be grateful for the services of the noble Lord in this place in connection with this Bill

I turn now, however, to the muttons of it. What does the Bill really do? At bottom it ensures that the right honourable Gentleman the Secretary of State, Mr. Heseltine, has an iron grip over the expenditure of local authorities. The noble Lord made much point, in the course of many of the felicitous contributions which he was able to make, of the enormity of the £1.5 billion by which, he said, local government bodies were over-spending. I thought of the noble Lord again this morning when I heard a Government spokesman indicating on the radio the triviality of the £1.5 billion which we had spent on the Falklands Expedition: £1.5 billion in relation to the total defence expenditure was not a matter of very great significance. So there are two standards of value. If we spend vast sums on Trident, missiles and things of that kind—well, these things are written off as not being of any particular significance. Indeed, his right honourable friend the Chancellor of the Exchequer pointed out to us earlier—and he will in due course be reproached with this, because it was slightly incautious—that the total cost of the Falklands' operation would be easily likely to be contained within the Contingency Fund. So we are talking with two different standards of value.

What has happened since this Government have been in Office is that progressively thay have decreased the proportion of Government expenditure coming from central Government funds. This has imposed on local authorities one of two alternatives. Either they can cut the amount of local services they provide or they can increase their local rate to cover them. But even that would not do. Having cut down the contribution of central Government—I am talking in real terms—they seek to inhibit the desirable growth of public services by penalising those who have already suffered a cut in their grant and who are thus inhibited from raising sums locally from the ratepayers.

This process has been referred to not only by noble Lords on this side of the House but by many distinguished noble Lords on the opposite Benches. This represents an intrusion into the authority of local government itself. It constricts, and must constrict, the area of decision where meaningful decisions can be made by local councillors themselves. Increasingly, as time passes, with the iron will of the Secretary of State making itself manifest, fewer and fewer of our ordinary citizens will see fit to take part in the activities of local government. As the noble Viscount, Lord Ridley, pointed out, these will be seen as becoming more and more irrelevant.

This cannot be good for local democracy and for local participation in affairs affecting any particular locality. It is bound to diminish the esteem in which local authorities are held in the eyes of their citizens and it cannot be right. It cannot be right that the powers of central Government to control local affairs should achieve the dimensions which they have now achieved, owing not only to this Bill but to the Local Government Planning and Land Act 1980.

If, in his leisure moments, the noble Lord likes to contemplate the enormity of the detailed technical provisions in the Local Government, Planning and Land Act 1980, in particular those 19 clauses which go into horrific detail of the whole question of the maintenance of direct labour organisations and all that kind of thing, and continues on to these measures that have been made here in the accounting and auditing, and then adds those together with those which remain from the Act of 1972, he will find that there is such a network of financial controls that, sooner or later, officials are going to be tripping over one another in their interpretation. It will leave his right honourable friend Mr. Heseltine at the top of a network of controls which, unless he is very careful, will virtually stifle initiative in local financial administration by local government finance officers and their servants.

I have spoken of the restrictions which have been placed on local government by this Bill. It should not be forgotten that the very restrictions to which I have referred come at a time when the demands on local services, owing to still rapidly increasing unemployment and distress, are becoming more and more contracted. I would like to draw the noble Lord's attention to the recommendations of the Select Committee of this House, composed of all parties of this House, which recently produced its report on unemployment, and to its suggestion, affecting local government, in respect of the part that it might play in helping to alleviate this problem.

The report states at page 154:

" The social services provided by local government which have been curtailed by cuts over recent years can well be expanded also. Possible areas are domiciliary services, home helps, workers involved in the day-to-day care of old people. One objective would be to provide care for old people in their own homes, where they would prefer to remain, and save the expense of transferring them to residential homes."

The report goes on to state in paragraph 14.58:

" Other local government services capable of expansion, whether by direct labour or by employing private firms, are housing, the maintenance of council house estates and public buildings, road and path repair, street cleaning and urban reclamation, the servicing and renovation of public conveniences, and the provision and maintenance of recreational facilities including parks, baths, sports centres and community facilities of various kinds."

The report goes on in that vein.

A Select Committee of this House advocates (in what I predict will be a very widely read report and one that will demonstrate the value of Select Committees of this House in action) as one of its principal recommendations the expansion of local authority services—not their contraction—in order that local authorities and whole communities can themselves contribute to endeavours to solve the unemployment problem. Does the noble Lord opposite really think that this Bill, together with its predecessor, has any such contribution to make? Does he even think that within the provisions of this Bill and the powers of direction given to the Secretary of State it will be possible in any way, even partially, to implement the recommendations of the Select Committee of this House? When the noble Lord reads the report, I believe he will agree not.

If the existing policies of the Government are followed it will mean that local communities, locally elected bodies and their councils will be inhibited from making their creative and constructive contribution towards removing one of the biggest scourages of our time—unemployment. Viewing this Bill within this context, it is a bad Bill and one which ultimately we shall very much regret. The only thing that commends it at all is the manner in which the noble Lord, Lord Bellwin, has submitted it to this House, for which I personally would like to pay my tribute.

My Lords, the Bill we are now passing would have one effect which has worried me all along but which has not received the attention it deserves. Until now local authorities in this country could never become bankrupt. They were expected to balance their books year after year, but if their expenditure exceeded the income anticipated, they had the power to levy a supplementary rate in order to cover that. What this Bill does is to take away that power, then empowers local authorities to borrow money and gives the creditors priority over their assets. I remember when New York became bankrupt that a number of people asked me whether London could ever suffer the same fate. I always said not, but in truth I cannot say that any more.

My Lords, it seems that the sweetness and light with which I introduced the Question that this Bill do now pass has gone; a few moments ago we had the darkness as well and some noble Lords, particularly those opposite, have contributed towards that too. I suppose that I have to respond; I certainly want to respond to one or two observations that have been made, but I will try to do so very briefly. I do not consider this is the occasion on which to cover one or two of the detailed points which have been raised, but if there is anything that does require correspondence your Lordships know that 1 will undertake to deal with them in that way.

One of the unfairest criticisms—although not one that bothers me most, and probably the one that bothers me least—was that the Bill had been made longer. I believe that, upon reflection, the noble Baroness, Lady Birk, will not like what she has said about that. If one does respond to points which have been raised by people—even people outside your Lordships' House, such as associations—by making amendments, it is not quite fair to criticise the fact that, in doing so, we have made the Bill longer.

My Lords, if the noble Lord will allow me to intervene, I do not want him to misunderstand me. Obviously there were points which we accept and I did say so, but most of the additions to this Bill were introduced by the Government, and they have not improved it at all. I am afraid that I must really stand by that.

My Lords, the noble Baroness may believe that it does not improve the Bill, but if we did not think that it improved the Bill we would not have done it. Quite clearly we believe that it improves the Bill. If the Bill is longer it is because matters needed to be spelled out in more detail. One is criticised if one does too much and then again one is criticised if one does not do enough. I have been here long enough to know that trying to respond to requests is a "no-win" situation.

I am sorry that the noble Baroness spoke of political chicanery. She used the expression once before and I am not going to rise to that one. Again I have found in your Lordships' House that one makes more progress by using the most temperate approach one can possibly muster. Sometimes it is not easy, and I accept the noble Baroness using provocation in this situation, and yet I do not believe that is the best way to make progress.

There is clearly a great deal of difference of opinion between us on most of these things. I happen to believe that the Audit Commission, its main function being to enhance value for money by the efforts of a lot of outside people who have expertise and knowledge, will make a very great contribution towards improving local government. The more efficient the commission is, the more it will achieve and the more it will be respected. As long as the commission is as independent as I say it will be and as I sincerely believe it will be —not least because of what its composition will be—then I believe it will achieve just that.

When the noble Baroness says—and she knows that I always quote exactly what she says—that the Bill will make local government unrepentant and bloody-minded about Government, well, one could say that out of the 430 or so authorities the vast majority are anything but that. They often agree, they often do not agree with what the Government say; this has always been the case, but the majority of them go along with it. The new scene we now have is that there are some 50 or 60 who are determined not to. One might wonder what their motives are; they are not always the purest, not always simply because they are wanting to improve the lot of the people who elected them. They are determined to do what they can to frustrate the central Government policy. As my noble friend Lord Sandford very rightly said—and this is why I said, "in sorrow rather than in anger"—there is a necessity for some of the measures that have been introduced. I do thank my noble friend Lord Sandford for his helpful remarks. I entirely take his point about the need for long-term—or it may well now be shorter-term—change in local authority finance structure. I think we shall see that before too long.

I want to say that I was singularly unimpressed by the contribution from the noble Lord, Lord Beaumont, but I do not think he would be too surprised at that; it is not the first time that he has failed to impress me: perhaps that would please him very much. The fact is that I am not even in the slightest concerned about the document which he says is a radical proposal by the Liberals and Social Democrats as to the way in which local government should be going, and the fact that it is in absolute opposition to what we are proposing. I can think of little that would more strongly confirm my belief in the rectitude of what we are proposing than to have it opposed to what the Liberals and Social Democrats propose.

Certainly, when the noble Lord talks about the freedom of local government and about the power to differentiate, all I would pray in aid is this basic point; that is, that it is necessary only because of the actions of people. I am more concerned not about penalising the overspenders, but about protecting those who are in fact conforming to what the Government are trying to do. They are the majority; it is the majority who are trying to do that. It is to protect them that I think is so essential, because anything else to me is totally unacceptable.

I am not going to speak at length, but I particularly left to the end my response to the noble Lord, Lord Bruce. I am deeply appreciative of his very kind remarks about me personally which I do take from him very much in the spirit in which he made them. I am truly sorry that we have not been able to accept more of his very well-intentioned amendments. I only say again—I hope it is a consolation—that we have been more influenced by what he has said than perhaps he appreciates in more ways than one. That does not always manifest itself in the form of an amendment or the acceptance of an amendment. I think he will take that from me, because it is meant in the right spirit.

I, of course, differ absolutely diametrically from him when he talks about the expansion of local authority services helping employment, and so on. I believe exactly the opposite. I believe that it is the expansion of services beyond what we can afford that is in itself a great contribution to inflation. It was Harold Wilson in another place who said that the father and mother of unemployment is inflation. I believe that. If overspending beyond what you can afford leads to inflation, then that leads to unemployment and maintenance of unemployment. Clearly, there is a straight difference between us and so be it.

I am sorry to have finished on a less happy note than the way I started in introducing this debate. It seems to be my fate occasionally to have to suffer that experience. Nevertheless, nothing that has been said in response detracts from the thanks that I expressed initially to all those who have taken part, and my appreciation of their contribution to this Bill.