My Lords, I beg to move that an Humble Address be presented to Her Majesty in the terms set out on the Order Paper.

It is indeed for me a privilege and a great honour to move this Motion offering your Lordships' congratulations to Her Majesty the Queen, His Royal Highness the Duke of Edinburgh and their Royal Highnesses the Prince and Princess of Wales on the happy occasion of the birth of a son to Her Royal Highness the Princess of Wales. A year ago this House joined many thousands the length and breadth of the Kingdom in sending a similar message of congratulation to Her Majesty on the occasion of the historic and magnificent Royal Wedding. We expressed then our hopes that the Prince and Princess would enjoy every happiness together. This week our hopes have been answered.

Like the Royal Wedding last year, the occasion we in this House are celebrating today is one for both national and personal rejoicing. It is an occasion for national rejoicing because the nation rejoices in the security of the succession to the Throne and in the knowledge that there will be continuity in our Royal Family, who render such great service to the British people at home and in the Commonwealth. I am sure that the whole House will once again wish me to express the great debt which we all owe to the Royal Family. Their selfless devotion to duty and their example of family life are an inspiration to us all. The Monarchy, within our constitution, finds itself more securely based than ever before upon the affections of the people.

It is also an occasion for personal rejoicing, because we know with what great joy Her Majesty and the Duke of Edinburgh will have heard the news on Monday night. We, too, can share that joy; and just as for many years we have watched and shared the close family life of Her Majesty, so now we can follow the beginnings of a new family. We know that the young Prince will have two devoted and understanding parents, and we know that he will find that fulfilment which can be found only in a happy home.

We have witnessed this week an event of great significance to our nation and to our people, and I know that the whole House will now wish to join me in offering our congratulations to Her Majesty and to the Prince and Princess.

My Lords, I beg to move the Motion for an Humble Address to Her Majesty.

My Lords, on behalf of the Opposition may I warmly endorse the sentiments expressed by the Lord Privy Seal to Her Majesty the Queen, His Royal Highness the Duke of Edinburgh and the Prince and Princess of Wales. It is indeed a happy occasion for us all; and, of course, we think with special affection about the Princess, the new mother, and her son. Their Royal Highnesses have given a great deal of happiness to the nation during the last year, and we wish them and the new Prince long life and lasting happiness in return. We all rejoice in what we know will be an added delight for Her Majesty the Queen, and a joy to the whole nation.

My Lords, we on these Benches and our Alliance colleagues of the SDP wish to associate ourselves with the Motion for an Humble Address which the House will be pleased to send to Her Majesty on this very happy occasion. We are grateful that the child has been safely delivered, and that he appears to be as robust as his father. If in the course of time he develops the good looks of his mother, we can ask no more. We express the hope that he may be blessed with happiness, and that he may be able to enjoy life in a less troubled world than the one so many of us have had to experience in our lifetime. I beg to support the Motion.

My Lords, from these Benches we should like to be warmly associated with the loyal and joyful sentiments already expressed in all parts of the House. His Grace the Archbishop of Canterbury has asked me to associate him personally with these greetings. His Grace said:

"Their Royal Highnesses deserve their happiness, and we rejoice with them, for the birth of the infant Prince is good news for millions around the world who hold the Prince and Princess of Wales in their affection and in their prayers".

If I may say so, my Lords, His Grace the Archbishop of Canterbury is, I think, humbly proud of the fact that, clearly, professionally he is good at taking weddings. He is humbly pleased that all has gone so well and that within a year this lovely little Royal Prince has been born.

If your Lordships would allow me just a touch of local colour, Her Highness the Princess of Wales, as of course your Lordships know, was born within the ancient diocese of Norwich, and just 21 years ago next month was baptised into the Christian faith at Sandringham Parish Church; so we in Norfolk feel a very deep sense of gratitude to God and loyalty to the Queen in rejoicing over the birth of the infant Prince. So much so, in fact, that special prayers were said in hundreds of our churches on Tuesday night and, where possible, the bells were rung (we have problems in some of our belfries). Together we gave thanks to Almighty God and prayed that our Lord, who loves the children, will bless, guide and protect this Royal baby through all the unknown future and one day use him in the service of God and the service of his country and the service of our Commonwealth. I am sure that the whole House will want to join us on these Benches in saying: God bless the Prince of Wales, God bless the Princess of Wales, God bless the infant Prince, and God save the Queen!

My Lords, I am sure that all who sit on the Cross-Benches will want to be associated with the congratulations to Her Majesty the Queen, His Royal Highness the Duke of Edinburgh, and their Royal Highnesses the Prince and Princess of Wales on the birth of their son. We rejoice in their happiness, too, and take particular pride in the new happiness of the most illustrious of the Cross-Bench Peers.

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

My Lords, as your Lordships' recent debates have shown, there are a number of grave defects in the present arrangements for securing a well balanced transport system for London. My right honourable friend is looking forward to the report of the Select Committee on Transport which is examining these issues, and is himself giving consideration to the capacity of the GLC to discharge effectively the transport functions with which they are vested.

My Lords, while thanking my noble friend for what seemed to me to be a rather promising reply, may I ask him and his right honourable friend to reflect on whether the old system —under which the London Transport Board was responsible to the Minister of Transport and therefore was in parallel with the Railways Board with which it has co-operated so closely —did not work much more satisfactorily than the present system, and whether there is not every case for reverting to it?

My Lords, I should be glad to make sure that my right honourable friend is made aware of what my noble friend says.

My Lords, will the noble Lord the Minister agree that London Transport cannot make progress unless there is a substantial subsidy from public funds?

My Lords, I should have thought that the argument might have been about what is a substantial subsidy. The fact is that at the present time it is £250 million. One can feel that that is a lot, that it is a little, or that it is not enough —depending upon where you sit. From where I stand, I think it is a lot.

My Lords, will not the Government keep in mind that it is essential that as many as possible of the local services shall be kept in the hands of elected representatives for local decision, and that that should apply in the case of London Transport as in regard to any other body? To follow up the supplementary question of my noble friend Lord Plant, will the Government keep in mind that, no matter what authority is in charge of London Transport, unless the financial aid is up to the same level as that provided in practically every other capital city in Europe, we shall not have an effective transport service for London?

My Lords, it has always been the fact that local authorities have the right to make local decisions because they are best placed so to do; but it is also always the fact that in making those decisions they have to take into account the interests of all the people whom they represent and, not least, those who put up the money.

My Lords, arising from the supplementary question put by the noble Lord, Lord Underhill, is it not the fact that the transport system of the national capital is used by a very large number of people who are not ratepayers in the capital, and does it not follow that if there is to be a subsidy for the transport system of the national capital it should be subsidised nationally and therefore controlled nationally?

My Lords, once again my noble friend makes a very telling point. I am sure that this is something which my right honourable friend will want to consider along with the report of the Select Committee to which I referred in my original Answer.

My Lords, may I put another supplementary question arising from that of the noble Lord, Lord Boyd-Carpenter? Would not the situation which the noble Lord puts forward be helped if the county councils which are in a position to give grants to London Transport from their transport supplementary grant., did so —which my own county of Essex, with a Conservative majority, does not?

My Lords, may I simply say that if we return to the original Question —namely, whether the Government are contemplating doing something to take this service out of the control of the Greater London Council —the matter has to wait until we have the report to which I have referred in my original Answer.

My Lords, will the Minister use his best endeavours to bring home to the protagonists, whoever are in the right, the very gross inconvenience to 1¾million passengers who use London Transport, who are suffering very much from day to day and who, furthermore, in my opinion, have had enough of it?

My Lords, not for the first time the noble Baroness hits the nail on the head. The fact is that there is widespread support for the idea of a separate transport authority and for London Transport to be moved away from the GLC. I would say categorically that we as a Government are determined that, after the chaos, and, it has to be said, the incompetence of the past few months, Londoners should have a better deal in the way that their transport is organised and run.

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

My Lords, there was no statutory obligation on the Kensington and Chelsea Council to consult my right honourable friend the Secretary of State for the Environment about the demolition of this building; nor was any such advice sought or given.

My Lords, I should like to thank the Minister for answering in that way. Nevertheless, is the Minister aware of the great consternation which has been caused among many residents of Kensington and Chelsea by this astonishing event? Will he not agree that those responsible for making the decision for this nocturnal demolition were behaving more like back-street demolition junk merchants than the elected councillors of Kensington and Chelsea? In order to mitigate the damage done, would the Minister give an assurance that the Government will do everything that they can to ensure that this site will eventually be developed at a scale not greater than existed before and which is also acceptable to the local planning authorities and to the local people?

My Lords, the point really revolves entirely around the word "local". The fact is that the local authority is the planning authority and the law as it is at the present time means that it is their decision and only their decision. If the noble Baroness is suggesting that the Government might interfere in that, she would want to think very carefully because the implications of that are very far-reaching.

My Lords, without contesting what my noble friend said, would he bear in mind that there is an uneasy feeling that there are quite often cases of buildings which are part of our heritage which get destroyed rather easily under the present planning law? Would he therefore ask his right honourable friend to consider whether that law needs strengthening in this regard?

My Lords, I thought, one of your Lordships might ask that very question. I answer it by saying that the issue which has arisen in this case is essentially a matter between two local planning authorities. The Government consider that it would not be very practical or I would think appropriate to impose what would need to be —and this is really the point to my noble friend —very sweeping controls with a lot of implications that would flow from that.

My Lords, is my noble friend the Minister aware that there are disabled residents in Kensington who remember the inaccessibility and inconvenience of a far from beautiful town hall and who are pleased to exchange it for relief of a penny in the rates?

My Lords, I hear what my noble friend says with much interest.

My Lords, may I declare an interest as a resident and ratepayer of Kensington and say that there is a great body of citizens in Kensington who welcome this demolition, the demolition of a building which is derelict, unused and of no particular architectural merit? If this can be substituted by an agreed, planned building and save the ratepayers a penny rate it will be welcomed even more than the demolition.

My Lords, as a fellow ratepayer —albeit only a temporary, part-time resident —of Kensington and Chelsea, once again I am very interested in what my noble friend says. I am sure that there will be many others who will also be interested.

My Lords, may I ask the Minister a question in which I think the Government have a part to play? Does he not agree that the Government should be doing something or looking into doing something to prevent this demolition by stealth which has happened unfortunately many times before? It is always outrageous and even more so when carried out by a local authority from which one expects a greater sense of responsibility and civilised behaviour.

My Lords, I am anxious not to get into the midst of what clearly is a difference of view by different residents of the authority. Whether or not the demolition should have taken place as it did in the way that it did is really not for me to comment upon. I understand the concern that it created and the feelings of those like the noble Baroness who raised the question. Equally, one must be cognisant of the fact that there is another view that has been expressed in your Lordships' House today. The Government can really only watch what happens and see whether this should ever become a matter that is so extensive that they should think about it —but certainly not at the present time.

My Lords, I wonder whether the noble Lord can explain why he has such reluctance to comment about the affairs of the Kensington and Chelsea local authority but he appears to have no such inhibitions when it comes to the London county council?

My Lords, I hardly think that the two situations —the one I dealt with earlier and the one I am dealing with now —can in any way be considered comparable.

My Lords, I wonder whether the noble Lord read the letter from the vicar of Kensington in The Times of 21st June in which he states that no prior notification of the intended demolition was given to adjoining landowners. In the circumstances, I wonder whether the noble Lord could assure your Lordships that the council, in carrying out their high-handed action, had observed the safety regulations concerning the demolition of buildings?

My Lords, I have had the letter drawn to my attention; but whether or not the local authority concerned did or did not observe the regulations is something upon which I cannot comment. Clearly, if there are those who think that they did not, they would take all necessary steps to ensure that appropriate action thereon was taken.

My Lords, is there any hope of this being followed by the demolition of County Hall?

Your Lordships will note from the reaction to that question the great popularity that such a move would bring bout.

My Lords, is it not very obvious, inside this Chamber and outside of it, that the Government bring a very different attitude to the Socialist-controlled GLC than it brings to the vandals of Kensington?

My Lords, that may be obvious to the noble Lord who asked the question; it is not obvious so far as I am concerned.

My Lords, would the noble Lord not agree that it is the height of folly to try to preserve every third- and fourth-rate Victorian building and that most Kensington residents are of the opinion that the old town hall is a fourth-rate Victorian building?

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

My Lords, the number of in-patients treated in National Health Service hospitals in Great Britain increased by 4.9 per cent. between 1978 and 1980. The number of new out-patients rose by 1.7 per cent. and the number of day cases by 19.5 per cent.

My Lords, I thank my noble friend for that information, which is extremely interesting and very revealing.

My Lords, can my noble friend say what was the increase in population over the same period?

My Lords, I do not have that figure immediately in front of me; but I understand that the increases to which I referred ran ahead of the increases in population.

My Lords, may I ask the noble Lord whether he agrees that the actual demand for hospital care of one kind or another is by no means an accurate indicator of the potential demand? Is the noble Lord aware that, when waiting lists for outpatient appointments are long or waiting lists for so-called non-urgent operations are long, general practitioners find temporary means of not adding to them which can produce a misleading picture. In other words, may I ask the noble Lord whether he accepts that however effectively hospital workers perform —and they perform very effectively indeed —the total hospital resources at the moment are inadequate to cope with the total workload?

My Lords, I have no doubt that at a time such as now, when the waiting lists are unhappily lengthening, largely as a result of industrial action, there is a degree of unsatisfied demand, though I am not sure I am in a position precisely to measure that.

Would the noble Lord agree that the figures he has given and the remarks of the noble Lord, Lord Winstanley, show that the workload has increased in hospitals for people who are there for a specific time and for those who have to appear just once a day? This must therefore say conclusively that if the workload has increased the nurses are perfectly justified in seeking the increase of their salaries they are asking for.

My Lords, it is of course the case that the number of nurses has also increased during that time.

My Lords, would my noble friend clarify the position that when a patient is referred by his doctor for the attention of a hospital, he is legally entitled to that service under the health service? Further, can he confirm that those picketing outside have no right to cross-question and intimidate patients as to what their private and personal medical record is?

My Lords, I have to agree with my noble friend that the question of whether or not a patient is an emergency case is a matter for the medical personnel concerned and not for the other members of the health service.

My Lords, may I ask the noble Minister, in view of the trends, what the Government are doing to obviate the inequality of the National Health Service? The Black Report shows quite clearly that there are many parts of the country which are receiving an inadequate service from the National Health Service.

My Lords, it is the case that in the past there has been some anxiety that some areas of the country have not been given an appropriate allocation of resources in regard to health service development. That is why some years ago a body called the Resource Allocations Working Party was devised. It is the recommendations of that working party which are now incorporated into the annual plans for expenditure in various regions.

My Lords, arising from an earlier answer by the Minister, is it not the case that, while the number of patients has increased, the number of nursing staff in the wards has not increased proportionately with the number of patients and that therefore the nursing staff today are required to do much greater service than they did before?

My Lords, as I said, the number of nurses has in fact increased over that period, but the additional number of patients being treated is also accounted for by the fact that they actually stay in the hospital beds for a shorter time.

My Lords, would the noble Lord care to reconsider his first answer to me, which would suggest that, if the Government and various National Health Service administrators are trying to enlist young men and women to enter this noble profession? and they succeed —and that means there is no increase in the workload —they do not stand much chance of keeping pace in their remuneration with the rest of the community?

My Lords, I am not quite sure whether I quite follow the implications of the noble Lord's question, which is a fairly wide one, if I may say so; but he will be well aware of our attitude to the current pay position which I dealt with in some detail yesterday.

My Lords, at a convenient moment after 3.30 this afternoon, my noble friend the Leader of the House will, with the leave of the House, read a Statement that has been made in another place on the visit of my right honourable friend the Prime Minister to the United States.

It may be for the convenience of the House if I announce that dinner will be available this evening at the usual time. Subject to the progress of business, the Committee stage of the Local Government and Planning (Scotland) Bill will be adjourned at approximately 7 p.m. for a short period. During this adjournment, the Sheep Variable Premium (Protection of Payments) (Amendment) Order 1982 will be taken.

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

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

With the leave of the House, I would wish to speak to Clauses 1, 2 and 3 at the same time, because Clauses 2 and 3 are really follow-ups to Clause 1. I understand, of course, that I cannot move the deletion of all three clauses in one go. I have made inquiries and I am in fact assured that Clause 1 must be inserted in the Bill before we go on to Clause 2. However, if I am successful and Clause 1 disappears from the Bill, I am quite certain that the noble Earl, Lord Mansfield, will be delighted to take out Clauses 2 and 3 also, as they would be senseless without Clause 1.

The reason why I did not seek to table amendments to Clause 1, although I studied in considerable detail what had taken place in another place on this, where several days were in fact spent on Clause 1, was that I rather took the line that, as I was in total opposition to the way in which this clause interferes with local government as it stands, I could not in honesty conceive of any amendment to the clause which would make it acceptable to me. I think those are the views of my noble friends also.

May I point out that the relationship between central Government and local government is both a legislative and a financial one? Local government derives its powers, at least in this century, from legislation passed by Government. Government may give powers to a local authority to carry out certain functions. Government may impose duties on local government to carry out certain functions and, in the exercise of those powers, the local authority is obviously involved in expenditure. In many cases, that expenditure is being undertaken as part of Government policy because the local government machinery has in many ways been a much more convenient way of providing certain services to the public than would be possible if that were being done by central Government.

In pursuance of the recognition of that point, it has long been accepted that the Government will either take on total responsibility for the cost of carrying out these services —in some cases it has been 100 per cent.—or, as in the great majority of cases, will finance the work by the block grant. In either event, the position until last year was that the Government were free to decide how much money they spent on local services, and the local authorities were free to decide how much of their ratepayers' money they would spend on these local services.

Last year, because the Government regarded certain local authorities as spending more than they believed to be justifiable in the economic circumstances, they sought certain remedies which, obviously, from the terms of the present Bill have not been regarded by the Government as wholly satisfactory. In fact, from my point of view they were nonsense, as they were supposed to protect ratepayers from the excessive expenditure of their local authority. They did nothing of the kind where the local authority did not bow to the Government's will, because it meant that the Government saved money in those circumstances and the ratepayer still paid the full amount. That, obviously, was not the solution which the Government wanted, so this is another attempt.

What is being done here is that the Secretary of State is being given power, where he determines that the local authority are spending more on services than he thinks is justified, to fix a rate which would meet the level of expenditure which he felt was acceptable. That, I submit, ladies and gentlemen —I have been so long in local government that I was back there temporarily! —is not an acceptable way of dealing with the matter.

I accept that the Government are perfectly entitled, if they regard expenditure as being excessive in any particular way, to say: "We are not subsidising from grant what we regard as unreasonable expenditure." This has done in the past. But the remedy which Government took then was to exclude from the calculation any unacceptable expenditure, so that the local authority were then left in the position, if they felt very strongly that certain work should continue to be done, or that a certain service should continue to be provided, of having to finance it from the resources available to themselves, which was mainly by increasing the rate level.

It is perfectly legitimate that the Government ought not to be compelled to finance something which they think is not their responsibility. But this takes another road altogether. It removes from a local authority, in any particular year, the right to determine what the rate level is to be in its area. I suggest that, if that is done, the Government are for that year turning the local authority into something which is akin to a subservient Government department. The Government are telling local authorities what they may do in certain directions: they may not spend more money on education, they may not spend more money on social work, they may not spend more money on various other activities of local authorities, and in order to determine at the end of the day that it is what the Government want, rather than what the local authority or their electors or ratepayers want, this method is taken by which the Secretary of State may determine what rate may be calculated during that financial year.

I doubt very much whether anybody who has been involved in local government—and there are many of your Lordships who have been in that position, or who arc still in that position —could accept it as reasonable that a Minister should take over this primary function of local government. It is for that reason that I object to this clause remaining as part of the Bill, and I am quite certain that there can be few, if any —at least, on this side —who would disagree with me. I suspect that there are a number on the other side who would agree with me, but whether it becomes possible for them to follow me into the Division Lobby on that point remains to be seen.

I beg to move that the House be resumed.

My Lords, with the leave of the House, I will now repeat a Statement that is being made in another place by my right honourable friend the Prime Minister on her visit to New York and Washington yesterday. The Statement is as follows:

"In New York, I addressed the United Nations Special Session on Disarmament and had discussions with the United Nations Secretary-General and the President of the General Assembly.

"I have placed in the Library a copy of my speech to the Special Session. I emphasised that disarmament, properly defined, is the balanced and verifiable reduction of armaments in a manner which enhances peace and security.

"As regards nuclear weapons, I welcomed President Reagan's radical proposals for substantial cuts in strategic weapons and for eliminating a whole class of intermediate-range systems —the zero option.

"I called for a balanced reduction in conventional weapons; commended the fresh proposals which are being made in the Vienna talks on mutual and balanced force reductions; urged a new impetus for a convention banning the development and possession of chemical weapons; and advocated a special effort to agree on new mandatory confidence and security-building measures in Europe.

" Throughout, I emphasised the need for stringent verification of arms control agreements. And I expressed my conviction that the aim of all these measures must be to defend the values in which we believe and to uphold international law and the United Nations Charter. We have a right and a duty to defend our own people whenever and wherever their liberty is challenged.

" In my discussions with Mr. Perez de Cuellar, we reviewed the prospects for a cease-fire in the Lebanon and discussed how such a cease-fire could be maintained.

" On the Falkland Islands, I gave the Secretary-General an account of the present situation. I emphasised our wish for a permanent cessation of hostilities, though I have to report that so far the Argentine's response has been negative. I also referred to the repatriation of well over 10,000 prisoners but I explained that we could not return them all until we were satisfied that hostilities would not be reopened.

" The Falkland Islanders would be preoccupied for some time to come with the task of reconstruction. Nonetheless, Britain would in due course seek to bring the islands to full self-government.

" Mr. Perez de Cuellar stated that he remained ready to act as a channel of communication between Britain and Argentina, if this would hlep.

" My talks with Mr. Kittani, the President of the General Assembly, were devoted mainly to the Special Session and Middle East matters.

"I was particularly glad to be in New York during the last week of Sir Anthony Parsons' term of service as our representative at the United Nations. His contribution and abilities have been widely and rightly praised.

" Subsequently, at the invitation of President Reagan, I visited Washington where we had valuable and friendly discussions.

" We discussed at some length the tragic situation in the Lebanon. The President described the latest American efforts, through Mr. Habib, to promote a solution.

" We also discussed the current situation in the Falkland Islands. i emphasised our wish to do all we can to promote peace and stability in the South Atlantic. The President repeated his view that our action to repossess the islands had been taken to uphold the vital principle that aggression should not pay.

" We discussed East-West relations. The President explained that his recent decision to extend restrictions on trade with the Soviet Union had been based on the principle that normal relations with that country were not possible so long as there was no progress towards liberalisation in Poland. I endorsed the need for such progress while reiterating the reasons why we thought existing commercial contracts should be exempted from the American restrictions.

" I also conveyed the concern felt in this country, and elsewhere in the European Community, at the decision by the United States Government to impose countervailing duties on steel imports from the Community.

" Finally, I expressed my gratitude for the impressive success of the FBI in defeating attempts by the Provisional IRA illegally to purchase weapons in the United States and export them for use in Northern Ireland."

That, my Lords, concludes the Statement.

My Lords, the House will be very grateful to the noble Baroness the Lord Privy Seal for repeating the Statement. We understand that this is a difficult Statement for her to deal with, since she was not actually in America with the Prime Minister and has had it only at very short notice. Nevertheless, I am afraid that there are some questions I must put to the noble Baroness because the Prime Minister has been discussing matters of the utmost importance, not only to this nation but to the world. I must say that we on these Benches are disappointed with her speech to the Disarmament Conference. The right honourable lady took a very negative line on disarmament itself. Nor do we think that it was well received in international circles. Indeed, the Financial Times today has commented on the tepid applause with which it was greeted, while The Times described delegates as "depressed" by her speech.

Can the noble Baroness say whether any pressure was put on the Prime Minister by President Reagan about the Falkland Islands? In several television appearances, before she saw him, the right honourable lady warned the President of what she did not wish him to say to her. Therefore, we should like to know whether there is any hope of the United States joining in the international defence force for the Falkland Islands. Is it true that the President said the Americans would participate only if there was some real bridge-building being done with Latin America? And was the question of sovereignty raised?

We welcome the Prime Minister's wish for a permanent cessation of hostilities and echo her desire for proper reconstruction of the Falkland Islands. There is one differenece between what the right honourable lady has said about the future of American sanctions against the Argentine and what the Americans have said. I quote from what was said by the Guardian this morning:

" The Prime Minister left the impression that she had been told they would be maintained. Mr. Haig told reporters they were under review, with the clear implication that they might soon be lifted".

Can the noble Baroness clarify the position here? Although it is not mentioned in the Statement, will she also comment on what was said by the captain of HMS "Endurance yesterday, that he had been warning the Government for a fortnight before it happened that an invasion of the Falklands was imminent?

We know that the right honourable lady discussed the question of East-West relations and continuing sanctions against the USSR because of the Polish situation. We on these Benches regret the new stress that President Reagan has laid on sanctions against the Siberian pipeline in spite of the wishes of our European allies within the Community, and we wonder whether the Prime Minister raised this question with the President and how he responded.

My Lords, we, too, would like to thank the noble Baroness, Lady Young, for repeating the Prime Minister's Statement which, while entirely unexceptionable as such, strikes me personally, with respect, as rather bland. I have only one question in regard to the Statement itself. The Prime Minister said that she emphasised her wish for a permanent cessation of hostilities—

" though I have to report that so far the Argentine's response has been negative ".

Has the Prime Minister been doing anything through third parties to encourage a positive reply from the Argentine Government? Cannot even President Reagan himself bring pressure to bear on the Argentine Government to stop hostilities? I see no mention of that in any communication to the press.

In general, I feel that we certainly ought to read this Statement in connection with the rather forthright statements —if I may call them that —of the Prime Minister on television and before the assembled journalists. Her statements on these occasions seemed to many of us on these Benches to have been much too categorical. According to the press:

" Mrs. Thatcher ruled out any voice for Argentine in the future of the Falklands and dismissed any possibility of a United Nations peacekeeping role ".

Surely the Government would agree that it is not Argentine that should be the object of such an exclusion. It was the Argentine Government that made the fearful error of invading the Falkland Islands—the Argentine Government of the day; but Governments change and who knows what Government there may be in Buenos Aires in, say, a few months' time?

Then "aggression" —which we all deplore —has defied definition ever since the establishment of the League of Nations in 1919. I see the former Lord Chancellor nodding! What appears to be aggression to one party may obviously not be aggression to the other. Flagrant aggression condemned by the United Nations, as it was in effect when the Argentine invaded the Falklands, is one thing; but often aggression is subsumed in self-defence. Anyway, simple opposition to "aggression" is not the beginning and end of a successful foreign policy.

My Lords, I am not sure that I can start by saying I am grateful for all the remarks that the noble Lord, Lord Peart, and the noble Lord, Lord Gladwyn, have made on the Statement. I regret that the noble Lord, Lord Peart, did not feel that what my right honourable friend the Prime Minister said at the United Nations went far enough on the question of disarmament. I hope that the Statement has made clear that she took a very realistic look at the whole question of disarmament. As the Statement makes clear, she called for a number of proposals, and commended a number of proposals which are currently being discussed, particularly the reduction in conventional weapons and the fresh proposals that have been made in Vienna on mutual and balanced force reduction, on chemical weapons and so on. What my right honourable friend has made quite clear is that unilateral disarmament, and disarmament by itself, will not simply bring us peace.

On the question of the Falkland Islands the noble Lord, Lord Peart, asked about sanctions. I would like to confirm that the Americans are keeping them under review and maintaining them for the time being. Arms sanctions still continue. On the question of the United Nations and the Falkland Islands, what is important is that we should recognise that we now need a period of rehabilitation for the Falkland Islands after the ending of the hostilities there, and that this must be our first concern before considering any other matters.

The final question that the noble Lord, Lord Peart, asked me on the outcome of these negotiations was about the Siberian pipeline. Of course, we are still discussing the question with the Americans, because we are not entirely happy about the present situation and the difficulties that it is causing for some industries.

The noble Lord, Lord Gladwyn, asked me a number of questions. First, he asked about the Argentine response being negative and what exactly did that mean.

My Lords, I asked the noble Baroness what the Government were going to do about it.

My Lords, I beg the noble Lord's pardon; he asked what we were going to do about it. We have, of course, asked other countries to intervene because we would like to he able to get a cessation of hostilities, and the Argentine to agree to a cessation of hostilities, in the South Atlantic. We have asked other countries about this. We have to face the fact that there is a very unsettled political situation in Argentine at the present time. The noble Lord also asked me again about the United Nation peacekeeping role. I believe the important point at the moment, as I have already indicated, is that we should have this period of rehabilitation in the Falkland Islands before considering any future arrangements.

My Lords, while thanking the noble Baroness, Lady Young, for repeating the Statement, may I ask her just one question? Despite the negative attitude taken up by the Argentine Government —if there is one —would she consider the possibility, before the Summer Recess, of a debate in this House on the future —I repeat, on the future —of the Falkland Islands, which could be helpful to the Government in making up their minds during this period of rehabilitation of the islands? We are absolutely sure that it would be helpful, and would not wish it to be anything other than a "take note" debate, without committing the Government in any way.

My Lords, the whole question of any future debate on the Falkland Isalnds would, of course, be a matter for the usual channels, and I am sure that the suggestion of the noble Lord, Lord Aylestone, has been noted. He will appreciate that we already have an extremely busy programme of work between now and the time when the House rises, but I am sure that this is a matter that will be noted.

There was one question from the noble Lord, Lord Peart, which I realise I did not answer, but which I meant to comment on. It related to the captain of HMS "Endurance". What is important about that is that what may or may not have happened will be taken into account by the proposed inquiry into the Falkland Islands. It would be much more suitable to leave it to that inquiry than to speculate on it now.

My Lords, may I ask the noble Baroness whether or not it would be premature to come to any definite conclusions and decisions, either about the future administration of the Falkland Islands or about the situation of the Government, or any proposed Government in the Argentine? Do we not have to consider the danger which might emerge unless we come to a rational conclusion in which perhaps the United States, the Commonwealth and other South American countries are involved? What might happen would be the taking over, in some form, of the North Atlantic countries in the Antarctic by the Soviet Union. There is the prospect of a fascist Government. That would be dangerous enough, but it might be only temporary. If, however, the Soviet Union took advantage of the situation —of the muddle and confusion which exists and the difficulty of coming to a conclusion, even in your Lordships' House, as the result of a debate which requires much careful inquiry —we should be paving the way for the Soviet threat to become not only a challenge but a fact of life.

My Lords, the noble Lord, Lord Shinwell, has raised a number of speculative questions concerning the future situation in the South Atlantic. I should like to make two points. First, as I have already indicated, we are still in the situation of rehabilitating the Falkland Islands. Secondly, we are very keen to improve our relations with the countries of Latin America. It is not a monolithic bloc. It is encouraging that, in the dispute which we have had with Argentina, none has broken off diplomatic relations with us, and we shall be very keen to keep our good relations with the other countries in Latin America. This is a factor which must be taken account of in any consideration of the future in the South Atlantic.

My Lords, may I ask the noble Baroness whether the Prime Minister suggested to President Reagan that the Americans might stop sending further arms, including cluster bombs, to Israel at this time? If not, will Her Majesty's Government, with our European allies, strongly urge this now on the Americans?

My Lords, I do not have information on the point which the noble Lord has raised, but both we and the Americans are very anxious to do all we can to promote a lasting cease-fire in the Lebanon. We are very concerned about this most serious situation. However, I do not think that there was any discussion of the particular point which the noble Lord raised.

My Lords, the noble Baroness has reported on what her right honourable friend has been discussing in America with regard to the future of the Falkland Islands. On a previous occasion the noble Baroness also mentioned the options which her Government were considering for the Falkland Islands. Could she tell this House whether one of the options being considered by her right honourable friend and the Government is a change in the law to allow those Falkland islanders who wish to do so to emigrate to this country?

My Lords, I am quite sure that in the discussion of the whole future of the Falkland Islands such matters will be among the things which will be considered.

Before the Statement, I think we were discussing the general principle underlying Clauses 1 to 3. 1 do not think I can do more than say that we as a party are in something of a dilemma on the point, because both arguments have something in them. It is certainly true to say that if the ratepayers were the electorate as a whole and there were not the immense anomalies which exist, it would be quite wrong for the Government to try to interfere with the electorate and their elected representatives if they wanted to raise the rates. But the position is so extraordinary today that I believe the Government case has something in it. The people who vote are often not the people who pay the rates, and many of the people who pay the rates certainly have no voice at all in local government. There are a number of anomalies. That is all I wish to say. I shall await with interest the Minister's arguments.

First may I apologise to the noble Earl the Minister for the fact that I was not in my seat at Second Reading. This was because I was informed that it was going to be a short day. Due to an illness in my family, 1 had made arrangements to travel back to Scotland by a specific aircraft. Local government was being discussed by our English colleagues, and at one point they became obsessed with sex and the debate went on and on. Consequently, I had to leave your Lordships' House. I apologise for what might have appeared to be rude. It was not intended so to be.

I am concerned about this particular clause. If the noble Lord, Lord Hughes, has spoken from the point of view of theory, I am a little frightened about it from the point of view of practice. I should declare that for six years I was a regional councillor in Scotland until I had to retire during the second half of 1980 in order to be able to do my ordinary business work. Therefore I have at least six years' experience of the reorganised form of local government and can speak from that experience.

If, very briefly, we go back to the purpose of the Local Government (Scotland) Act 1973, it is true to say that its object was to place more responsibility into the practical hands of the elected representatives of local government, and to take out of the hands of central Government a major part of their influence.

However, as the years have progressed, the fact of the matter (I know it continues today because I keep in very close contact with councillors) is that the onus and the burden of responsibility has been placed upon the regions, as was intended. If one could call the reorganised form of local government the puppet and central Government the puppeteer, the strings have never been cut between central and local government, and the control of central Government over local government never diminished.

We then got to a stage during the last two years when people who stood within the new reorganised structure of local government to be councillors found themselves in a situation where, far from having control over how the rates are spent and over a far wider field than ever was before 1974, they had less. This has caused —it is this point which principally frightens me —those people whom one would like to see standing as candidates in local government elections to think twice, because they do not want to become administrators of central Government policy. They want to take on the responsibility of representing the people who elected them. I feel that this is yet one more move to deny those people who have been elected the ability to carry out the wishes of those people who elected them.

As the noble Lord, Lord Hughes, mentioned we have been all through this particular matter at enormous lengths on previous occasions. I realise that it is the Government's intention to pursue this particular policy, but I hope that the Government, however they pursue it, will understand that it could be very seriously damaging something which has been very precious to us in our constitution; that is, the relationship between central and local government. Such damage is something that we should not allow to occur if at all possible.

I am grateful to the noble Lord, Lord Hughes, for the felicitous way in which he has decided to marshal his arguments on Clauses 1, 2 and 3 and for the brevity with which he spoke to your Lordships' Committee. We come right back to the central point of principle which we debated at considerable length in the Local Government (Miscellaneous Provisions) (Scotland) Act 1981. That is what is the subject of debate here; whether those powers are justified and if they are, whether they reduce, if at all, the function of local authorities and those councillors who are their elected representatives to some kind of mere cipher. I have to disagree with the noble Earl, Lord Minto, that by taking powers as we have to prevent the expenditure of money on a scale which was closely becoming outrageous and in a way which could prejudice the economic recovery of this country, we are in some way negating local democracy and the function of local councillors. I shall return to that point.

When one considers the enormous proportion of every pound spent by local government which comes from the pockets of taxpayer as a whole, one also realises —as the noble Lord, Lord Mackie of Benshie, said —that if a local authority wishes to be extravagant, much of that extravagance will, because of our rating system, hit the pockets of those who have the privilege of paying but have no vote, and their extravagance will be enjoyed by those who vote but do not pay. This is something to which the Government are addressing themselves with as much speed as they can muster —although, as noble Lords will appreciate, it is a very different problem.

One must put the debate in that context, and we all of us have to admit that the Secretary of State does now have the power, which was granted to him by Parliament in the 1981 Act, reduce the rate support grant payable to a local authority whose planned expenditure he considers to be excessive and unreasonable. I would remind the Committee that this is not done upon some arbitrary whim of the Secretary of State; he has to state his reasons, so to speak, and has to give the local authority time to make representations. Then the whole matter is put before the other place for its approval. Under the 1981 Act, any local authority in this position was afforded the opportunity of reducing its expenditure and redetermining its rate and to return the saving to its ratepayers as an alternative to suffering a reduction in rate support grant.

Pausing there, let me just repeat that, where a local authority was put into this position, it could either return the money to the ratepayers or it could suffer a reduction in its rate support grant, as the noble Lord, Lord Hughes, said. It seemed obvious when we took these powers —obvious at least to the Government —that any authority which was afforded this choice would obviously take advantage of the option to reduce its rate and so return the money direct to its ratepapers.

But unfortunately —and inexplicably —one of the local authorities against which the Secretary of State did take selective action last year chose to do this and duly returned the money, but all the others, in effect, allowed the grant reduction to return to the Exchequer. Not surprisingly, the ratepayers in those areas felt somewhat aggrieved, and understandably so. They had to continue paying a large rate burden but at the same time found that their services were reduced.

This is a state of affairs for which the Government had considerable sympathy. It is in an attempt to protect the ratepayers of high spending authorities that the Government have been forced to seek these additional powers. If Clause I and the other two clauses, to which I shall come in a moment, were removed or excised from the Bill, as it is proposed, there would be no safeguard for ratepayers living under authorities whose expenditure is considered to be excessive and unreasonable and against which the Secretary of State moves in the way which I have described. I wonder whether the noble Lord, Lord Hughes, has really considered this. Does he think it is better in these circumstances that the money should be returned to the Treasury rather than to the ratepayers? I suggest that it is not better.

Then we have the claim that this is an intrusion into local democracy. Certainly not as far as Clause 1 is concerned —nor in respect of Clause 2 or 3 for that matter. If one accepts the proposals which are contained in the 1981 Act, the procedures will remain as provided under that Act and any proposed rate reduction subject to the approval of the other place after Report and following representations, as I have described. There will be absolutely no need to use any of these powers if the local authorities themselves are moderate in planning their expenditure. But, alas!, they are necessary because some local authorities persist in budgeting for a high level of spending. This they do despite the Government's proposals for reductions in spending and despite the fact that they should have regard to the interests of their ratepayers.

I repeat that local authorities retain the freedom to fix the level of their rates. It is only if the House of Commons agrees that the authority's expenditure is excessive and unreasonable that the Secretary of State can then use the powers both in the 1981 Act and under this Bill.

As I have said, if one is going to have the 1981 Act, for better of worse —I know noble Lords opposite would probably say worse —I would have thought that Clause 1 of this Bill was a necessary, and might indeed be a welcome, extension of the powers.

If I may speak to Clause 2, it is an essential corollary to the provisions of Clause I. A rate reduction would not result in lower expenditure if the local authority concerned were able to borrow to make up the loss in revenue, nor would there be lasting benefits to the ratepayers who would have to repay the debt in the next financial year. This follows as night follows day. If one is going to have these powers one really must stop the local authority from avoiding the consequences of their actions simply by making use of the loan fund. Under the Local Government (Miscellaneous Provisions) (Scotland) Act 1981, local authorities are already prohibited from borrowing to offset selective grant reductions. Therefore, Clause 2 extends this prohibition to rate reductions in the same way. However, the provisions are not inflexible. The Secretary of State has powers to permit borrowing in certain circumstances, such as might happen if an authority faced unforeseen expenditure at a time when they had reduced their rates. I am quite sure that the Secretary of State will exercise his discretion with care to ensure that borrowing consent is not abused, and at the same time providing sufficient safeguards to protect the interests of the authority involved.

Clause 3 provides for consequential changes in rate support grant legislation following the introduction of cash planning. Here we come on to a very different and rather complex and intricate field. It does not immediately flow from either Clause 1 or Clause 2. Perhaps the Committee will forgive me if I speak now to Clause 3, as the noble Lord, Lord Hughes, indicated that he would want these clauses taken together.

Until the current year, rate support grant settlements were made on the basis of expenditure estimated in volume terms. That is to say that the grant was determined in the November before the relative local authority financial year and prescribed in the main rate support grant order on the basis of expenditure estimated in terms of the prices which were current at the time. It was the practice to pay additional grant, subject to a predetermined cash limit, for net cost and price increases which occurred after November. This was done by a variation order (usually referred to as an increase order) made in the following November or December in the relative local authority year. Increase orders also made adjustments for changes in interest rates which were not subject to cash limits. In addition, if, for reasons arising from the expenditure levels planned by local authorities, the Government wanted to tighten the revenue resources available to local authorities in any year, the amount of grant payable through increase orders could be restricted, so that Government support for any year was held to a level deemed appropriate by the Government. That was done in 1976–77 by the then Government and also in 1980–81 and 1981–82.

From 1982–83 onwards grant settlements are being undertaken on the basis of expenditure estimated in cash terms for the year in question. Under this system the main order will prescribe the maximum amount which the Government propose to make available for the year. This figure takes account of the assumptions which the Government consider reasonable for cost and price increases, and so will not be subject to further increases for cost and price variations in the course of the year. The only reason for an increase would be in the event of a rise in interest rates affecting loan charges. Authorities are effectively being asked to budget within a given cash figure, without any increases for costs and prices beyond the assumptions made by the Government of wage and other increases and which take into account the cash available for public spending. Careful budgeting within this cash figure and a refusal to underwrite inflationary increases is a vital component in the Government's strategy to reduce inflation.

However, in the course of the grant year it might be necessary to vary the amount of grant authorised in the main order either because of a change in interest rates or because of a decision by the Government to reduce the level of grant in order to reinforce the Government's public expenditure strategy. At present the existing statutory provisions, which are contained in Section 4 of the local Government (Scotland) Act 1966, do not enable the Secretary of State to reduce grant. They allow an increase in grant. In the past, effective reduction in grant was achieved in one of three ways: by not providing an increase order; by providing less under an increase order, or, as occured this year, in a main order for a subsequent year, than might otherwise have been expected. However, under cash planning, the full sum of money available for rate support grant for any year is prescribed before the beginning of the financial year. Increase orders of the kind made in previous years will not be necessary. But the Secretary of State must have power to vary grants up or down as may be appropriate in the light of later information.

Clause 3 therefore provides the Secretary of State with powers to vary the amount of rate support grant at any time after it has been determined. This power is, of course, subject to the same requirements as his power to fix grant initially. Therefore, he is still bound in redetermining grant to consult the convention and take into account all of the matters which he must take into account in determining grant initially.

Cash planning is an important part of the Government's overall strategy for containing public expenditure and fighting inflation, in which local authorities have a substantial contribution to make. This clause, which is very different from Clause I and 2, has its part to play in the continuing fight against inflation, and as with the other two clauses it is an essential part of the Bill.

Before my noble friend Lord John-Mackie replies to what the Minister has said generally, he put a question to me in the course of his remarks: did I prefer that the authorities —the sort of authorities we are talking about, and we know perfectly well that Lothian would figure in the noble Earl's thinking —should return the money to the Government or return it to the ratepayers? This is almost in the category of the question, "When did you stop beating your wife "? It implies an acceptance of what the Government did last year, that the Government alone determine whether expenditure is excessive or unreasonable.

One of the surprising things about the elections this year was the remarkably small change which took place in numbers of councillors in the Lothian Region. We now have the situation in the Lothian Region that there is a minority Conservative administration depending for its majority on the support of other parties. I should like to say that my view about the correctness of the Government's attitude is strengthened by the fact that this Conservative administration, in its first steps, after examining the position in which it found itself after the election, said to the Goverment that it was quite impossible to make the reductions in expenditure which the Government had called upon the previous administration to undertake. This at least means that within the Conservative Party there can be two views as to what is excessive and unreasonable expenditure. So there is no question of my having to make up my mind whether the Government should get back money which, at least on one argument, they are not entitled to get.

Your Lordships may wonder why a renegade Scot is standing at this Box, but regrettably because of happenings in Spain we are short of Scottish Peers to deal with this very important Bill. If my noble friend Lord Ross of Marnock were to return today, I feel that his humour might exacerbate the debate considerably and prevent the noble Earl from giving any concessions at all. I hope that I can slightly ameliorate the situation in that respect.

Nearly 40 years ago, I spent two or three years as a member of a committee with the father of the noble Earl, Lord Mansfield. In spite of our different political opinions, I got on very well with him and, as members of that committee, we travelled around Scotland a fair amount and stayed in hotels where we had long discussions during the evening. I remember very distinctly his horror at any Government interference at all with local government. However, to be fair, I must admit that he was against interference by Government in anything. Nevertheless I noted that, if my researches are correct, the noble Earl's father spent nearly 40 years in local government, whereas the noble Earl has spent only about five years. Therefore, I think that it was a pity that he did not follow in his father's footsteps and dislike interference in local government. I think that we must all agree —and the noble Earl, Lord Minto, and my noble friend Lord Hughes made the point very well —that these three clauses constitute considerable interference in local government affairs.

My noble brother opened his remarks on Second Reading by saying that he did not know much about local government, but noble Lords will have noticed that lack of knowledge does not stop my noble brother from speaking about anything! Today he made a point, which he made on Second Reading, about the question of rating. Of course we have all known for a long time —and successive Governments have made promises —that the rating situation is a bad one and requires to be looked at very carefully indeed. However, I do not think that that is an argument in respect of the three clauses that we are discussing today. Anyway, the question of rating has been around for a long time. It was there when this Bill was brought forward and when the last Bill, the Local Government (Scotland) Bill, was brought forward and so it does not alter the case to say that rating should be looked at and amended.

I know many councillors in local government in Scotland as well as in England. The noble Earl has brought forward many arguments, and they are the same arguments all along the line. Many of them are complicated, especially as regards Clause 3, in respect of which he read a very detailed brief, which I hope he understands. Indeed, I am doubtful whether many other noble Lords in the Committee understand it. I noted in the other place that the opening speaker in Committee put forward a very strong case for the fact that very few people could understand the three clauses in question because they were so complicated. However, the point that I want to make concerns the bitterness felt by the councillors whom I know who take the view that they are now only rubber stampers of Government decisions, particularly as regards finance in local government.

When the noble Earl introduced this Bill on Second Reading, he laid great stress on the point that the Bill was really carrying out the recommendations of the committee of the noble Lord, Lord Stodart of Leaston. If one reads what the noble Earl said, one would think that Clauses 1, 2 and 3 were almost an afterthought in the Bill. Let me at this point congratulate the noble Lord, Lord Stodart of Leaston, on the work which he did in this committee and perhaps I may also take the opportunity of reminding him that he was my faithful "pair" in the House of Commons for 16 years. I always remember that, when we were both elected in 1959, we telephoned and congratulated each other. I made the remark that there was something about pairing that we might need to deal with when we got to the House. However, he consulted a long-standing Conservative friend who said, "Good Lord! Have you been offered a pair? 'Phone him up quickly before somebody else gets him ". He has always said that he would never speak about something about which he did not know, but he did not know much about pairing in those days.

What does the clause do? It stops the council from raising any extra money by rates or by borrowing. Quite frankly, so far as I can make out from the noble Earl's remarks, Clause 3 is the penalty for doing either of those two things. It does not say so exactly, but that is almost what it means. If local government is to govern and to be responsible for the people who voted it into office, then it must not have responsibility taken away from it. Indeed, it is a very big responsibility that is being taken away from it now. If the ratepayers object, then the answer lies at the polls. Great stress was laid on Second Reading on the question of the excess in some areas of Scotland. There was a total of £205 million —an excess of just under 8 per cent. But quite frankly —and I do not know whether this was ever taken into consideration —that will not cover inflation, even at the Government's reduced rate. I know that local government can make mistakes, but it is the duty of the ratepayers to chastise it, and not the Government.

I should like to make the point, because it is germane to the argument about the cost involved, that it is becoming clearer every day that a colossal mistake was made by the Government just over two months ago. The undoubted necessity to counter this mistake, apart, of course from the tragic loss of life, will cost the country much more than all the excesses of local government throughout the country, and it will be the duty of the electorate to deal with the Government in the same way as they deal with local government. I cannot see that there is any difference between what central Government do and the responsibilities of local government. The same principles should apply to them both.

I do not wish to say any more. As my noble friend Lord Hughes said when speaking on the three clauses together —and we cannot vote on them together —we are so strongly opposed to them that I beg to support the Motion that Clause 1 shall not stand part of the Bill.

I adhere to my view that Clause 2 should nor stand part of the Bill, notwithstanding what has taken place on the previous Division. I should have been happy if I could have made it one vote for all three clauses, but, unfortunately, if we do not divide on this clause and the next one, it would look as through we had lost enthusiasm for our objection, because there is no way in which a negative procedure can be followed when there is, in fact, no amendment. Regrettably, therefore, we must divide the Committee on this clause and I shall save a short speech thereafter by saying that we shall also divide again on Clause 3.

Perhaps I may respond to the noble Lord. Even the most cursory inspection of the Official Report tomorrow would reveal that the noble Lord, Lord Hughes, was speaking to all three clauses and that, indeed, I was replying to them. I can assure his noble friend, Lord John-Mackie, that, when I respond to Clause 3, like my father, I had done the work and understood my brief..

I do not think that the tribunes further down the corridor or, for that matter, throughout the country will in any way blame the noble Lord and his supporters if they do not waste the time of the Committee by tramping through the Division Lobbies in a way which will be reminiscent of what they do in another place at about 10 o'clock in the evening. But it is a matter for the noble Lord.

Perhaps the remedy is in an examination of the rules: it might be possible in future for Clause 1, 2 and 3 to be deleted from the Bill at the same time.

I object to Clause 3 standing part of the Bill. I noticed a slight improvement in the vote the second time around. Let the good work continue.

moved Amendment No. 1.

After Clause 3, insert the following new clause:

Although this matter was not one with which the committee over which I presided was concerned, we did a section on social work generally: this particular aspect of it was not within our remit. Nevertheless, while I support what my noble friend Lady Elliot said, my impression, and I think hers, is that what the Minister will say in relation to Amendment No. 2 will cover the points envisaged in Amendment No.1.

It is I think convenient that I should follow my noble friend Lady Elliot and speak to my amendment (which is Amendment No. 2) at the same time as I speak to her amendment. This matter was raised during the Committee stage in another place and an amendment was withdrawn following an assurance by my honourable friend the Minister for Home Affairs and the Environment that the matter was under active consideration.

The Government have for some time been aware of the difficulties caused to charities, local authorities and housing associations by the fact that communal accommodation for single people is valued as commercial and not domestic property, regardless of its size. This means that the occupants of this type of property have to pay higher rates than those living in domestic property, although the accommodation is intended to provide them with a permanent home which is not provided by the ordinary housing market. In consequence, a normal tenement flat, for example, run by a charity to provide accommodation for people leaving mental hospitals or children's homes is valued as a hostel, with a consequent increase in rateable value. In addition, accommodation designed for single persons generally, with communal facilities, such as housing association projects, is valued as a hostel on a commercial basis, greatly increasing the rateable value per unit. As a result, a number of projects to provide accommodation for single homeless and for single people generally are in jepoardy.

We have given careful consideration to the best way of overcoming this problem. There is no simple solution; valuation law is extremely complex. In the short time available it has not been possible to consult widely enough to achieve agreement to the substantial changes to be made in primary legislation. Therefore we have decided in effect to enable the Secretary of State to take a general power to enable him to tackle this problem as appropriate by prescribing rating relief and/or methods of ascertaining values. This general power will operate in much the same way as the general power afforded the Secretary of State by Clause 4 of the Bill, which relates to the derating of external plant and machinery.

So my new clause amends Section 4 of the Local Government (Financial Provisions etc.) (Scotland) Act 1962, which provides for the reduction and remission of rates payable by charitable and other organisations. It will enable the Secretary of State to reduce the rating burden on communal accommodation by prescribing methods for their valuation and/or for a measure of rating relief. The Secretary of State will be able to specify by order the categories of lands and heritages, used for communal accommodation and owned by non-profit making organisations, which will be eligible for such relief. It is envisaged that such premises owned by charitable organisations, housing associations, and local authorities would benefit from this measure. The Secretary of State will also be able to prescribe the fraction of rating relief which will be provided. The clause also enables the Secretary of State to prescribe the method by which these types of lands and heritages may be valued for the purposes of the valuation roll. Any order made under this power will also be subject to affirmative resolution by each House of Parliament. The details of the orders which will be made under this power will be the subject of consultations with interested parties, including the convention, the Scottish Valuation Advisory Council, and representatives of housing associations. It is hoped that these discussions will begin some time next month

. So it will be seen that my new clause goes much wider than that proposed by my noble friend and, if I may say so, the Government's proposals have two advantages over my noble friend's amendment. First, the Government's amendment allows for the possible need for a rating solution to the problem, as well as the valuation solution which my noble friend proposes, or a combination of the two methods. This gives us the flexibility that we might need to reach a solution. Secondly, the Government's proposal is that by taking a general power, the Secretary of State will have opportunity for further consultations with interested parties, such as I have already mentioned. Valuation law and practice are extremely complex. It would be hazardous to attempt to define the extent of the necessary change directly in primary legislation by an amendment such as my noble friend proposes, and it would be even more dangerous without allowing for the fullest consultation beforehand; otherwise we could create further anomalies. I hope that in the light of that explanation my noble friend will agree to withdraw her amendment, and in a few moments I shall move my own amendment.

Before the noble Baroness seeks to withdraw the amendment, as I think she is going to do, I should like to say, very briefly, that I listened with interest to what she said and I had sympathy with it, but when I read the other amendment it seemed obvious that it covers the ground which is in the noble Baroness's amendment. All past experience shows that, even when Governments are prepared to accept an amendment, they find it very convenient to prefer to put it in their own language. After all, they have the benefit of skilled draftsmen; Back-Benchers do not. I would have been content to support the amendment of the noble Baroness, Lady Elliot, had it been acceptable to the Government, but in view of the explanation put forward by the noble Earl of the Government amendment, Amendment No. 2, I would agree with him that it would be better to accept that amendment rather than Amendment No. 1.

Those were my sentiments precisely.

We are all agreed, which is very agreeable. I should like to thank the noble Earl very much for meeting the points so ably in a way which, as he rightly says, is better than my amendment. Therefore, I beg leave to withdraw my amendment, and I shall support the noble Earl's amendment.

moved Amendment No. 2:

After Clause 4, insert the following new clause:

moved Amendment No. 2A:

After Clause 5, insert the following new clause:

This amendment reflects similar amendments, as the noble Lord has quite fairly said, which were made in this House to the corresponding English provision in the Local Government (Miscellaneous Provisions) Bill, and it was indeed Section 137 of the Local Government Act. The effect would be to make absolutely clear that Section 83 can be used by local authorities to assist financially persons carrying on industrial and commercial undertakings, and, secondly, to clarify whether expenditure under this provision, which is of course limited to the product of a rate of 2p in the pound, is to be regarded as net or gross.

The need for amendment of Section 83 on the lines suggested by the noble Lord was expressed to my right honourable friend the Secretary of State by Strathclyde Regional Council at a meeting with the Convention last Friday, and we are considering urgently whether, in the light of the amendments made south of the Border, similar amendments should be made to Section 83, and as part of this process we shall want to confirm with the convention that they consider this desirable and appropriate.

I can assure the noble Lord, therefore, that we have the objectives of his amendment under very urgent and, indeed, sympathetic consideration. If the amendment is considered desirable after consultation with the convention, then we shall look to the drafting, and in that respect and on that basis I shall hope to bring forward the appropriate provision on Report. I hope that in the light of that undertaking the noble Lord will see fit to withdraw his amendment now.

I thank the noble Earl for that reply, which is very satisfactory in many ways. I would have thought, looking at the COSLA report —they were almost applied at what was happening in various areas —it would not be necessary to consult them a second time. However, in view of what the noble Earl has said I beg leave to withdraw this amendment.

Having regard to the undertaking which the noble Earl the Minister gave to my noble friend Lord John-Mackie on his amendment, it would be ungracious if we did not welcome the fact that, here, the Government are putting in a new clause to make certain that local authorities in Scotland get any benefits conferred on local authorities in England. It is a good omen for what is going to happen at Report stage in relation to the previous amendment. I support this amendment.

May I ask one point by way of clarification, on Clause 9? The point that confuses me slightly is that Clause 9 refers back to Section 90 of the 1973 Act. It substitutes the words, "An islands or district council ", for the words, "A local authority", with regard to tourism. Referring back to Section 90 of the 1973 Act, perhaps I may quote from it. It says:

I think it would be very valuable if the Minister would clear up this point. A number of councils are worried about the delineation of the powers for industrial promotion between the region and the district, and it would be very helpful if the Minister would clear it up.

Clause 9 concentrates local authority responsibility for all the activities in Section 90 of the 1973 Act on district councils and island councils. Regional councils are specifically enabled under Clause 9 to contribute towards expenses incurred by districts or islands or by area tourist organisations in their undertaking any of the functions under Section 90 so that the provision would enable a regional council to make a financial contribution or, for example, to provide premises free of charge for use by a district or island authority or other body engaged in an activity specified in Section 90, as amended by this Bill.

Clause 9 does not inhibit a regional council from arranging conferences or trade fairs or exhibitions for purposes other than tourism—for example, education — provided that it has, under some other statute, responsibility for that activity. So that, as an illustration, a regional council might seek to mount an educational conference using its powers under Section 26 of the Education (Scotland) Act 1980. If I may come to the point raised by the noble Lord, Lord Mackie of Benshie, regional councils' powers to arrange trade fairs or conferences for purposes of industrial promotion are safeguarded in Clause 6 of the Bill.

I think that somebody asked me recently, but not in the context of this clause, about possible twinning arrangements. Clause 9 in no way impinges on the continued use by local authorities of Section 83 of the 1973 Act to authorise expenditure on twinning arrangements in the accepted sense of an exchange of people and ideas. I hope that that will allay the fears —if that is the phrase —of both noble Lords.

On Clause 15, I suppose that I am in something like the same position as a number of other noble Lords to whom representations have been made about the effects of this clause. I had a letter from the chairman of the Citizens' Theatre in Glasgow and my noble friend Lord Jenkins of Putney received a letter from the Federation of Scottish Theatres Limited on very much the same lines. Their fear is that while the regional council continues to have power to,

" contribute financially towards the provision of recreational, sporting, cultural and social facilities and activities ",

there is a fear on the part of both these bodies, and possibly others, that as the regional council will no longer have an appropriate committee for dealing with this matter, as have a number of them at the present time, the direct incentive at regional level to give support may disappear.

There is also the fact that in another place the Minister said that rate support grant would be adjusted in favour of the district council. What the theatre bodies would have liked would be that the Government would have amended the position to make it clear that any such adjustment of the rate support grant taken from the regions and given to the districts would be specifically for the purpose of the district carrying out what the region had previously done. The Minister said, as any Minister of any Government would have said and as I would have said had I been in his place, that you do not allocate part of the grant for one specific purpose.

The defect, I think, of even a transfer of funds from one to another may be that it would discourage the regional authorities. They may say that they used to do it because they had grant for the purpose; but if the grant has been taken away from them and they no longer had a committee, then it is no longer their business.

We know —and I mentioned the Citizens' Theatre, in particular —that it can be applied to almost every type of theatre that is supported by a local authority. Generally speaking, it is allocated in towns or cities but the support it draws is not confined to these cities and, in a way, if the regions are being given every encouragement to support these bodies they will not survive on the support they perhaps can draw from within the area of the district council. I hope that the noble Lord the Minister may be able to say or to do something which will eliminate these fairly legitimate fears held by these bodies at the present time.

I should like to back up what the noble Lord has said. I, too, have had representations from, particularly, a theatre I am associated with at Pitlochry. I should like to say first of all that they were grateful to the Government for inserting Clause 15 which makes it clear that, although the districts are to be responsible and will have rate support grant, the regions may contribute. In some cases they are afraid —I suppose in the case of the Pitlochry theatre, which is not situated in a large city, they may be more so —that the districts might not be as willing or as broadminded as the regions have been.

If I may interrupt the noble Lord, I said towns or cities. Pitlochry is definitely a town.

Not as much a town as some others —although it is extremely nice. But we are talking about size not quality. I think they have a certain anxiety. I think that, despite the new clause, the Minister could allay their fears by making it clear that he would expect the regions, when they could, to contribute and to encourage the districts to do so.

As the noble Lord has correctly said, Clause 15 describes the role we envisage for regional councils and gives prominence to the powers of regional councils in future to contribute to expenses incurred by others in providing or maintaining leisure and recreational facilities or in providing or promoting leisure activities. The clause as it now stands is not restricted by the Stodart recommendation that regions should be limited to a power to contribute only where the catchment area for a facility was wider than the district involved. Very strong concern was expressed in another place that regions should not be inhibited from contributing to activities in the leisure field in this way and the clause therefore gives regions a freestanding power to contribute by grant towards expenses incurred by districts or by grant or loan towards expenses incurred by other bodies. It is also made clear that the power extends to contributions to the arts.

I appreciate that there are fears about the financial implications of this. Naturally, local authorities are concerned about the implications where they assume responsibility for what have been hitherto concurrent functions. My right honourable friend the Secretary of State made clear in his Statement on the Stodart Report last June that the Government accepted the the spirit of the Stodart recommendation that adequate financial arrangements must accompany any changes in the responsibility of councils, at the same time noting that implementation of the recommendation should not justify any net increase in public expenditure. My officials, with the Convention of Scottish Local Authorities, are gathering information on the financial implications of the changes in responsibilities. When this is available, they will consider and make recommendations to my right honourable friend on the appropriate financial arrangements to be made.

Then the obvious question was asked as to whether rate support grant should be tied into transferred functions. I am not going to say that it is a bit much that Government should seek to fetter the actions of democratically elected councils, because of course the cheers from the noble Lord, Lord Hughes, would be deafening. But I agree with him that it would be totally counter to the present practice which has been followed by many successive Governments, and indeed the local authorities, that rate support grant should not be earmarked for particular services and that the local authorities themselves should have complete discretion in the allocation of the resources available to them.

If I may sum up what I have tried to say, what we do in the Bill is to give the local authorities power. We are taking very seriously the financial implications, and I hope very much —and I am quite confident —that the excellent theatres such as the one with which the noble Lord, Lord Mackie of Benshie, is associated will be able to continue their excellent work, if anything, better than before.

At this stage I am content with what the Minister has said.

moved Amendment No. 4:

Page 16, line 23, leave out from beginning to ("after") in line 36, and insert ("In the Food and Drugs (Scotland) Act 1956").

I should like to support my noble friend in what he said, and I will hope to be brief because, as your Lordships may remember, I made most of the points along these lines at Second Reading in cols. 1315 to 1317. If your Lordships will allow me, I would seek to pick out only one particular aspect of what I said, a lot of which duplicated the remarks made by my noble friend Lord Campbell of Croy. I drew attention to the fact that in paragraph 171 of the excellent report of my noble friend Lord Stodart a quotation was made of a report of the Society of Scottish Directors of Consumer Protection regarding EEC harmonisation legislation. I suggest that is a particularly strong argument because of the fact that at the time there was the average weight legislation very much before the public eye, and since then we have had the labelling directive. There are also other directives regarding harmonisation which apply to processed foods which are on the way; so that argument is a pretty strong one, however you look at it. Since the Second Reading, I have been approached by the Scottish Institute of Environmental Health and they have produced some strong arguments for the status quo; that is, the status quo of the Bill and not the status quo actual —in other words, the retention of the first half of Clause 20. One must of course respect their views, but the interesting point about their letter to me is that with regard to my own speech, to which I have just referred, they seek to allay my fears about the lack of uniformity but they do not refer to the point I have just made about Lord Stodart's paragraph 171. I think it is rather surprising that, if they are seeking to convert me to their viewpoint, they do not tackle what I believe to be the strongest argument as an example of retaining the present balance of power with the region.

I have also been approached by the Scottish Consumer Council, which is new. I have been approached, also, by all the other bodies referred to by my noble friend Lord Campbell of Croy, both before Second Reading and between then and now. They have put to me the points which my noble friend has made so ably, and therefore I shall not seek to repeat them. All I would say, in conclusion, is that I do hope the Government have not finally made up their minds on this point. I personally think that it is a balance, as I said before; and on balance the stronger argument is that the regions should have this responsibility rather than the districts.

I, too, would like to support very strongly what has been said by my noble friend Lord Campbell of Croy. I should like to support everything he says. As your Lordships will know, I was the first of the chairmen of consumer councils and I am still in touch with the organisations. I would endorse every word which the noble Lord, Lord Campbell, has said. There have been no criticisms of the present system from the food industry, the distributive trades or the consumers, and any change can only cause unnecessary disruption, duplication, confusion and extra expenditure. I think those words come from the Consumer Council, and I believe they are correct. I should like to say that I hope very much the Government will pay attention to this view because it is really a very strong case. It is such a pity, when things are going well, not to leave them alone. It is one of the things which Governments find it very tempting not to do. On this occasion I would beg the Government to leave well alone and not to make the change suggested in the Bill.

I am tempted to wait until the Minister speaks because, quite frankly, I have no strong views one way or the other although, despite the mass of support for the amendment, at the moment my inclination is to support the Bill as it stands. I hope I am not unduly biased in that regard because I live in the hope that one day we may get back to single-tier authorities in Scotland. I am quite certain that when we do it will not be nine in number; certainly it will not be as many as 53 but it will be considerably more than nine. So anything which contributes to the possibility of single-tier authorities is grist to my mill.

Like other speakers who have preceded me and have supported the amendment, I also have been the recipient of various views. This is obviously not a political matter. There is no clear dividing line saying that it must go one way or the other. The views that have been quoted by the various organisations definitely have weight, but there is also weight in the views put forward by the Scottish Institute of Environmental Health.

I should like to quote from their letter to me, which I am quite certain is similar to the one to which the noble Lord, Lord Mottistone, has referred. They spend a fair amount of time referring to what was said during the Second Reading debate, and they start off by referring to what was said by my noble friend Lord Ross of Marnock. He had said that the regions had built up an expertise in food labelling and other aspects of food. The institute then go on to say:

" While this is not disputed it must also be acknowledged that environmental health officers have a much greater expertise in all aspects of food, predating in fact the 1956 Act which this Bill now seeks to re-amend. It requires to be borne in mind that prior to 1975 the duties covered by Clause 20 were carried out by environmental health departments and hence are well known to all officers who were in post then. Officers who have been trained and come into the profession since 1975 have been educated either at university or college to a standard which involves theoretical and practical studies covering a whole range of food-related duties."

They go on to say:

" It is accepted that the duties imposed by Sections 1, 2, 6 and 18 are akin to consumer protection"—

and that of course brings the consumer association very much into the picture, but the Institute of Environmental Health would contend that they are much more akin to environmental health as their prime objective is to protect the health of the consumer rather than his or her pocket, which is much more the field of consumer protection.

So they referred to what the noble and learned Lord, Lord Wilson of Langside, and the noble Lord, Lord Drumalbyn, have said. Both noble Lords drew attention to the fact that no views had been expressed by the environmental health profession. They more or less say in the letter that they were perhaps mistaken. They assumed that because this had got into the Bill, and given the Government's notable reluctance even to alter anything which they have put in, they did not need to do anything about it. They had made the point; it was in the Bill, and they therefore assumed it would remain that way. As I say, I do not think it matters an awful lot. The world will not come to an end if it goes one way or the other, but I remain of the view that perhaps the Government have a slight advantage in making the Bill as it is.

I think that the noble Lord, Lord Hughes, is probably right in saying that the world will not come to an end whichever way this matter goes. But, surely, the case made out in favour of the amendment by the noble Lord, Lord Campbell of Croy, the noble Lord, Lord Mottistone, and the noble Baroness was a formidable one. I would not presume to add to or repeat anything they have said. I just recall that the noble Lord, Lord Mottistone, twitted me good-humouredly on Second Reading with not having made up my mind, as indeed I had not done. But I must say, having considered the arguments which he and his colleagues have put forward in supporting this amendment, that I find it an impressive and formidable case.

The only point that I would seek to make is that, if this amendment is not accepted, the onus is on the Government to satisfy your Lordships, because they are the people who are saying that this must he changed. Surely it is the advocates of change of something which has worked without criticism for a long time, who must satisfy your Lordships that this change must be made. Unless they can produce so formidable a case against the arguments presented, then I should have thought that your Lordships would support the amendment.

I should also like to support the amendment. I have a press release here, and no doubt some of your Lordships have it, with a most formidable title: "Retailers, Consumers and Manufacturers Unite". That is so unusual that I should have thought that the Government would tremble at this. But it is quite true that the more enforcement authorities you have, the more difficulty there is in getting some kind of uniformity. We have seen this with the health and safety officers. In one county certain things are permitted and in another county they are not. This causes a great deal of confusion and it would certainly be the case here.

Some retailers may have to go to two authorities to get agreement on certain packaging; and, indeed, we would then have two sets of enforcement officers coming in, which seems not only unnecessarily expensive and bureaucratic but not in keeping with the spirit of the Bill in other ways. So I certainly hope that the Government will yield to this formidable onslaught and see that this time they look again at the clause.

I rise with some trepidation. I most willingly agree with my noble friend Lord Mottistone that this is a question of balance, and delicate balance. Considerable representations of a very formidable nature have obviously been made in recent days. For some reason or another, very few have been sent to me. Perhaps those who have made them considered that it would be a waste of their time to send them to the chairman of the committee. But what has interested me is that I have heard no points so far mentioned by any noble Lord who has spoken that were not in our possession and were not fully considered by us at the time.

The able speeches which have been made by noble Lords recall the very thoughtful discussions that my Committee had on this matter almost exactly two years ago. When one considers the weight of these representations, it interests me that district councils, such as Edinburgh and Glasgow, and many rural ones, which are known to be 100 per cent. in favour of the Bill as it is drafted, have made no representations at all. Perhaps, as the noble Lord, Lord Hughes, remarked, this is confirmation of the lesson that you do not object unless you think you are going to lose something.

May I tell your Lordships some of the points that I have read about in connection with the decision that we came to? Many people have referred to the close and detailed examination made by Lord Wheatley, and to Stodart's superficial glance at the whole thing, with no oral evidence taken. I do not know how closely Lord Wheatley delved into the subject, but he gave no reasons whatever for the decision which he came to. We saw no point —and, indeed, we had no time —in taking oral evidence on top of written submissions which, in our view, were admirably clear and succinct.

In any case, the functions which we are discussing derive not from the Wheatley Report but, as my noble friend Lord Campbell of Croy has said, from the 1973 Act and its Section 158, on which it is interesting to remember that there was very considerable criticism of the division of responsibilities at the time. In the other place, as he then was, the noble Lord, Lord Ross, said that he was totally dissatisfied that this division of functions was necessary; they could all quite easily be done by the districts; and there were some very trenchant criticisms by noble Lords in this House of the division of these responsibilities.

This is basically a food and drug matter, though it is very closely related to consumer protection. Is it feasible for one tier to do all the functions appertaining to food under the provisions of the 1956 Act? Prior to the creation of the two tiers, one authority did do it, and if I am told —and I think that perhaps my noble friend Lord Mottistone made this point —that in the seven years since reorganisation the whole of the food industry has become more complex, and that more complexities are happening every day, I would make the point that if the Western Isles and other island authorities —which are, admittedly, single-tier authorities and which never had a word to say to our Committee —can do it, surely a single-tier authority on the mainland could do it.

Then there is the point about the expertise: have the districts got it? We inquired very closely and were satisfied that they have. As regards uniformity-53 districts against nine regions —I am bound to say that I think this is a sound point and it is one to which we gave a great deal of consideration. But I do not think that one should neglect the fact that there are others matters, many of them to do with public health, on which uniformity is achieved across the area of 53 districts.

Again, the point about the difference between England and Wales is a good one. I would not go so far as the noble Lord, Lord Ross, in Committee in the other place —I wish that he were here for me to be able to quote it at him —who said: let us judge what we think is right for Scotland and not have any reference to what goes on elsewhere. Again, he said that the districts could perform this function perfectly well. I do not go as far as that. But I do not think it is totally irrelevant to point out —I do so with some trepidation, in the presence of a Lord Advocate and a former Lord Advocate —that our information was that the law on public health in Scotland is quite considerably different from that in England and Wales.

Finally, let me again say that I absolutely admit that there is a fine balance, but my committee came to an unanimous conclusion on this. It contained not only three regional councillors but the head of what is, I believe, Scotland's leading supermarket chain, who expressed himself entirely satisfied with the proposal.

It is slightly surprising that in a Bill of this nature, which is a major Bill full of highly important and in some cases complicated and intricate clauses, the most spirited debate we have had, arguably at any rate, concerns this matter of food and drugs. This amendment concerns the reasonably modest proposal in Clause 20 which could hardly be described as making a major change in the law. "Formidable" is the adjective which has been used most frequently, and the one thing that I would say which has been formidable is the amount of time and energy which, quite obviously, outside bodies have used to put forward their views to as many noble Lords as possible. Like all pressure groups, they tend not to overstate their case, if I may use a pregnant negative; and there have been a few misconceptions and possibly exaggerations which have grown up in this matter. Perhaps I may try to dispel them.

As has been said, not least by the Institute of Environmental Health, directors of environmental health who will re-administer these functions have for many years had responsibility for food, hygiene and safety, and for composition, standards and labelling; and the reason for the composition, standards and labelling function going to consumer protection departments by reason of the Local Government (Scotland) Act 1973, would seem to have been to help build up important new departments in the regions, which of course have now become quite firmly established with a wide range of functions involving, for instance, weights and measures, trade description and the Fair Trading Act.

It is fair to say that the Wheatley Report on local government did not seem to have discussed this change, nor did that committee make any recommendation; so that the matter then came under the eye and scrutiny, so far as composition, standards and labelling functions are concerned, of my noble friend Lord Stodart of Leaston and his committee in 1980. As the noble Lord said, his report recommended that the powers go back to the districts, and he gave three grounds: first, because the demarcation line was far from distinct and could cause problems of enforcement; secondly, be- cause there was merit for the public and for efficient administration in having all the 1956 Act food functions under the one authority; and thirdly —and possibly most importantly —the functions were seen as having public health implications and thereby lending themselves to enforcement by district councils with their general environmental health and particularly food responsibilities.

The next thing that happened was that in 1981 the Secretary of State sought comments on my noble friend's report, and in June last he made his decision, including the decision to make the change reflected in this clause. This decision was in the light of views which included oral views from a variety of sources, including the food trade organisations. The decision was not made without considerable thought, and subsequently the clause has been debated in another place, both in Committee and on Report. There have been further meetings, including a ministerial meeting with the CBI, a meeting with the Scottish Consumer Council, the Retail Consortium and Food Manufacturer's Federation; so I would hope to convince the Committee that there has been a great deal of discussion on this issue and that the decision to make the change was made as a result of a great deal of thought and consideration.

The Government came down on the side that they have, and I say at once, echoing the views of several noble Lords, that the arguments are finely balanced; but as time has gone on, each time the arguments have been examined, we have become that much firmer in our view, rather than less firm and more inclined to yield. Let me take some of these arguments. First, it has been suggested that the functions are more akin to consumer protection. I would not agree about that. They are certainly also relevant to consumer protection but the main thrust of the Food and Drugs (Scotland) Act 1956 was health, that food should be safe to eat; and the other food functions on hygiene and unfit food lie with the environmental health department, as these functions once did.

It was then suggested, at any rate in correspondence, that the change would be against the public interest and would confuse the public. That I beg leave to doubt. Over the years the public have associated environmental health departments with food complaints; and those departments are largely, and in rural areas particularly, more accessible to the public. It is worth recalling that in the Standing Committee on this Bill in another place my honourable friend the Member for Bute and North Ayrshire (Mr. Corrie) pointed out that while environmental health departments had representatives in all the main centres in Argyle and Bute, consumer protection departments had them only in Dunoon and, to a lesser extent, in Oban.

We in Government believe, therefore, that we are as good a judge of the public interest as the food organisations or the Consumer Council with their focus on consumer protection interests involving quantities short weight and matters of that kind, and their links with the Consumer Protection Department. We feel that the public should have the best arrangements for ensuring food safety, and under this Bill they will have one door to go to. Lord Mottistone's main point was that the food trade organisations would be prejudiced by the Bill because of their fear over what really amounts to co-ordination. They say that co-ordination will be more difficult with 56 authorities than with 12; but it is easy to exaggerate the problems. There are local authority consultative arrangements in existence, not just Scottish but for Great Britain, with large numbers of authorities involved, and the directors of environmental health will key into these arrangements as they do on other health matters.

There is also a Sottish branch of the Institute of Environmental Health, and there are informal meetings with central Government representatives in the Scottish Environmental Health Group. We in the Scottish Office for our part undertake to be closely involved in monitoring progress. The Scottish branch of the institute has assured Ministers that uniformity of approach would be a priority matter in planning and training. The institute would be prepared to meet directly with any trade organisation which might feel anxiety for the future, and this is by no means a one-sided argument. Those concerned with the safety of food are all for the clause. The Scottish Institute of Environmental Health, as we have heard, has sent a letter which I found —dare I say it? —formidable. The directors of environmental health support what the Government are doing, as does the Royal Sanitary Association of Scotland. District councils have been increasingly making clear their readiness to take on these functions, and in view of the very marked sense of responsibility being shown by the district interests and officials we hope that members might feel enabled to accept that trade interests should not be prejudiced in any way.

I have tried to argue this matter in a non-doctrinaire way. Nevertheless, this is difficult because of the many interests involved in the long debate which has taken place. We have to come back to the fact that the Stodart Committee —which, after all, had a task to do —made a recommendation. It recommended this change. It gave its reasons. The Government consulted and, after consultation, approved what the Stodart Committee had recommended. There is a willingness on the part of both the Government, in the shape of the Secretary of State, and the district councils, to work hard at it and to consult on implementation.

Finally the transfer, in a sense, is back to a department which has traditionally, as it were, taken this on board and has knowledge of what is involved. General Great Britain co-ordinating machinery already exists. So the safeguards are there. I hope noble Lords will be able to accept that they are sufficient. It is for all these reasons that the clause is drafted in the way that it is. I do hope that my noble friend Lord Campbell of Croy, who so ably moved his amendment, will appreciate the care and thought which has gone into this, and will accept that it has not been done without very careful consideration.

I note gratefully the support which has been given to the amendment by the various parts of your Lordships' Committee. I am also extremely grateful to my noble friend Lord Stodart for having given a very clear and concise explanation of the reasons why his committee, undertaking the review, reached the conclusion that they did and made their recommendation.

I believe that one of the principal aims of the Stodart Committee was to avoid the sharing of functions between the two tiers of authority, wherever that was possible. Certainly other proposals which have been put forward by this committee have the effect of allocating those functions which have been shared up to now between the regional councils and the district councils. The Stodart Committee proposals have the effect of allocating functions, wherever possible, to one tier or to another. But on the subject of food standards and labelling, that does not seem to have applied. I know that there is some disagreement about this, but, as I indicated when I moved the amendment, the Bill, if it is not altered, will mean more officials having to make visits to premises where, in the past, one official has been able to carry out a whole number of tests.

I shall give an example. Trading standards officers, who are the officials of regional councils, will continue to visit premises and make test transactions: to test for weights and measures, price and brand substitution. But they will no longer be able at the same time on those premises to test for contamination, composition and labelling of the food products. Separate test transactions will need to be made by the district council officials who at present only have the function of supervising hygiene in those premises, which in general is a quite separate exercise. That is an example of where, even though the Stodart Committee has done its best and has succeeded, on other subjects, in avoiding the allocation of a function to both tiers and has tried to make a separation so that the function goes to one or the other, that has not been possible in the case of food standards and labelling.

This is a matter of delicate balance. Almost all those who have spoken in the debate have agreed upon that. However, since the publication of the Stodart Committee's report it has become clear that after examination of this proposal by the representative bodies of consumers, industry and others concerned, the majority of those representative bodies have reached a definite conclusion. That conclusion, as has been stated in the debate, is in favour of the amendment.

As I say, this is a finely balanced matter. I am grateful to my noble friend Lord Mansfield for having stated the Government's position: that they recognise it is a difficult matter and that is why they decided to draft Clause 20 as it now is. Nevertheless, I believe that the Government should have time to consider the arguments which have been put today by noble Lords who have spoken. In his Second Reading speech my noble friend Lord Mansfield said that the Government were open to argument. I believe that the Government must again examine the matter carefully before the opportunity of taking a decision, which will be the best decision in the end, passes. And it will have passed once this Bill has left your Lordships' House. At this stage, therefore, I beg leave to withdraw the amendment.

moved Amendment No. 5:

Before Clause 47, insert the following new clause:

Once again I must welcome this clause and again, for the second time, the Government are following the example set by the English on 21st May in conferring these powers on local authorities in Scotland. However, I would like to ask one question. The Explanatory and Financial Memorandum still says that this Bill will add little or nothing to a charge on the Exchequer. This clause is bound to result in increased expenditure because, as the noble Earl the Minister has explained, it widens the land which can come into consideration. Before it related only to land owned by the local authority, whereas now it may be any land, no matter who its present owner is. Also, the grant is increased from 75 per cent. to 90 per cent. Unless the Government intend that the whole increase in expenditure on these two accounts is to fall on local authorities, there is bound to be some increase in Exchequer expenditure.

If the Government adhere to the argument that there is not going to be any increase in Government expenditure, then as I stated when we were debating Clause 1, the Government from time to time give powers to, and impose duties on, local authorities which involve them in spending more money. Here is an example of that. The next clause is exactly the same; a new clause which the Minister will be moving in connection with fire escapes. I welcome that as a desirable thing, but, once again, it means that local authorities will be involved in increased expenditure. Will the increased expenditure which may be involved be taken- into account as reckonable expenditure for grant purposes?

The noble Lord, Lord Hughes, has really answered his own question. Although he will appreciate this is a point on which I cannot give a definitive answer at this moment, there are many parts of the Bill where the functions and therefore the financial responsibility of the local authority have changed. Although the Government have made commitments to review the financial arrangements in the light of these changes of function and financial responsibility, the totality of spending will be in no way affected. This is what I consider would be the case in respect of this amendment, and as the noble Lord said, of the next amendment, also. If I am wrong about that —but I do not think I am —I will hastily get in touch with the noble Lord.

I am not quite certain what the noble Earl has said. If the totality of expenditure is not to be altered, that would seem to indicate that the Government are not going to contribute any more money to the local authorities for this purpose and that the local authorities cannot find any more money for this purpose. So anything they do in this direction, if there is to be no increase in expenditure, must be at the expense of some other function currently carried put by the authority. It is hardly right that the Government should undertake these things and then blithely say that there is no more money available to do them. These two provisions in the Bill are very desirable and I commend the Government for having brought them forward, but the Government are going to defeat their own object if, at the end of the day, they are going to say that there will be no more Government money or any local authority money. I would ask the noble Earl to look into this matter. I do not expect another answer tonight, but I accept his offer to write to me in due course after he has further considered the position.

I think that the noble Lord is being rather simplistic, if I may say so. What this clause does is to give local authorities the power to make loans at a higher rate. In due course the loans will have to be repaid. Any expenditure which the local authority undertakes in carrying out this power will be reckonable for rate support purposes. The totality of the matter comes into the fact that local authorities are increasing their expenditure every year, and the Government, under the powers which Parliament has given to them, have to do their best to see that those increases are reasonable in the general economic climate appertaining at any one time. I cannot help the noble Lord very much further. The amendment is at the request of local authorities, and, like so many other features of local government, it will mean that they will have to adjust their priorities accordingly —but that is no reason for not giving them the power.

I do not wish to come back again when the noble Earl moves the next amendment because I have already indicated that I am in favour of it. Although the noble Earl said on this amendment that it is a question of loans which will have to be repaid, I will remind him that in the next amendment, it is a question of grant. So his argument for the next amendment does not stand up.

moved Amendment No. 6:

After Clause 47, insert the following new clause:

As my noble friend Lord Hughes has said, we welcome this clause, which is very necessary; there have been some very nasty fires and loss of life because of lack of proper fire escape equipment. I would like to make a practical point on subsection (2) of this clause, where it says,

" unless they are satisfied that at the time of completion of the works to which the application relates the house will be in reasonable repair…having regard to its age, character and location ".

My daughter lives at the top of a three-storey Victorian house in Hampstead. There was no fire escape equipment at all, and I felt that I should get something for her. So I bought a steel fire-escape ladder, 25 to 30 feet long, for her birthday one year, a good few years ago. I thought I would experiment with it at my own house, which is an old Elizabethan house. You have to put the hook of the ladder over the sill of the window. I tried it in my own bedroom; opened the window and hooked it on, only to find that the sill was completely rotten. If I had stepped on to it I would have fallen. Fortunately, it is only a two-storey house, with a nice soft lawn. However, the word "age" ought to be omitted from the phrase, "having regard to the age, character and location", because these old houses have very crumbly window sills and there is no use putting in a £50 piece of equipment (which mine cost) or a £7,500 one, if the point you are fixing it to is likely to crumble away when somebody starts to climb down. I thought I would make that practical point because it is rather important. Otherwise we support the clause.

I scarcely think that the phrase "internal decorative repair" means crumbly window sills. That is a great deal more than a decorative repair. It is a technical phrase, and I think it merely enjoins the local authority not to worry too much about the paintwork. If I am wrong about that I will communicate with the noble Lord.

I think the noble Earl has misunderstood the point. The relevant words are, "having regard to its age, character and location"; in other words, the "reasonable repair" could be very weak if the age of the house is taken into consideration, certainly disregarding the "internal decorative repair", which has nothing to do with it. I was simply saying that if it is an old house it seems to suggest that one could get off with something not quite so good. These old houses have very crumbly window sills, particularly old Elizabethan houses, single brick and so on; and my contention was that there is no point in fixing something to a building that may crumble, and they are allowed to do that if they are allowed to take into account the age of the house.

I am sure that that is what local authorities will do; they will take into account the various matters which they are told to before approving an application. I do not think there will be different classes of approval according to the age or the condition of the house.

had given notice of his intention to move Amendment No. 7:

Page 32, line 36, at end insert—

(" (3) In section 4 of the Tenants' Rights, Etc. (Scotland) Act 1980 (regarding the conditions of sale), for subsections (7) to (8) there shall he substituted the following subsection—

"(7) In a rural area to which an Order under subsection (6) above applies, there will be no further disposal of the dwelling-house unless—

(a) the tenant (or his successor in title) has offered to reconvey the dwelling-house to the landlord for a price to be determined by the district valuer as being the value of the dwelling-house at the time the offer is made; and

(b) the landlord has refused the offer or has failed to accept it within one month after it was made.").

moved Amendment No. 9:

After Clause 48, insert the following new clause:

Perhaps I could thank the noble Earl for this clause, which I think is very valuable

moved Amendment No. 10:

Page 35, line 13, leave out (" (but not any building) ") and insert (" and fixed equipment as defined in section 93(1) of the Agricultural Holdings (Scotland) Act 1949 excepting farmhouses and farm cottages ").

I think that the problem here is one of definition. The difficulty about the amendment of the noble Viscount is that it would also bring in farm buildings such as barns and so on, which can be insured and which most farmers do insure and certainly should insure. I think that we have to re-define the problem. Where we have houses, factories and commercial premises the owners are able to insure themselves against damage caused by a water burst in exactly the same way as they insure themselves against many other kinds of risks. Farmers, basically speaking, are in a different position because they cannot insure their land and crops against damage from burst water mains. It has been a source of grievance to them for many years that they can neither claim damages from the water authority unless they can prove negligence, nor can they insure against damage caused by water bursts and, therefore, they were in a very invidious position and the Government decided that something should be done about it.

So far as farm buildings arc concerned, the view that we have taken is that farmers can insure buildings with their contents in exactly the same way as any other property owner. It may be expensive, but it can be done. What I am not so sure about is the noble Viscount's fences, posts, drains, walls and so on, which are, in fact, attached to the land. As I have said, I think it is a problem of legal definition. I think that the way in which the clause is drafted is wide enough to include such things. However, I shall take the matter away and go into the law and the definitions and write to the noble Viscount before the next stage.

On behalf of my noble friend, I should like to say —and I think that he was going to say this —that we are very grateful for that assurance. I am glad that the Minister is going to examine the matter. But I must make a point about farm buildings. Surely it is a little hard to pay expensive insurance against a burst which is the fault of the water authority. Surely the water authority —if they are liable for damage done to farmland —should be liable in the unlikely event of their damaging farm buildings? Surely the same should apply.