asked Her Majesty's Government:

Whether they are satisfied with the adequacy of information on reading ability provided by the tests at key stage 2.

My Lords, we have confidence in the assessment arrangements to provide reliable results of pupil attainment at all key stages. The reading test at key stage 2 is designed to provide information about children's ability to read for accuracy and knowledge of language as well as reading for meaning. The Government are fully satisfied that the outcomes from the reading tests provide the information needed for the improvement of literacy skills.

My Lords, I am grateful to the Minister for that reply and I have no doubt that she recognises the crucial importance of key stage 2; that is the point at which children move from primary schools, where the teachers know them, to secondary schools where the teachers do not.

First, is it not the case that the present SATs at key stage 2 (which blandly lump together all four of the English skills) provide secondary schools with next to no help in identifying what may be 20 per cent of the new intake who will need special reading lessons in order to engage properly in secondary education?

Secondly, is the Minister aware that, in consequence, secondary schools—not least specialist schools like the John Cabot in Bristol with an intake from literally scores of primary feeder schools—have to use their resources and time to set their own reading tests and assessments in order to identify those who need help?

My Lords, it is not true to say that the SATs scores lump everything together. Children's performances are looked at in terms of a whole range of different aspects of English. Indeed, the reading scores, for example, have improved rather more than the writing scores. But I entirely accept that it is important that, when children transfer from primary to secondary schools, the secondary school teachers are given the maximum amount of information about the performance of those pupils so that they can work with them to improve the areas where they are weakest. It is important to remember also that the SATs are not the only measure of a child's performance; the teacher's assessment is equally important. That is particularly valuable and of significance in planning future learning. Both sets of results have to be reported to parents as well as to the secondary schools.

My Lords, this may be anecdotal evidence, but many noble Lords will not understand the technicalities of the noble Lord, Lord Quirk, and the Minister. What worries us, and what teachers tell me, is that literacy is less than it was in 1900. Do the Government worry about that?

My Lords, it is difficult to come to any firm conclusion as to whether or not literacy is worse now than it was in 1900. I do not know what anecdotal information the noble Lord is basing his statement on. I do not know how many people he knows who learnt to read before 1900, though there are a few of them around.

However, the noble Lord is right in drawing attention to the fact that we all need to be concerned about levels of literacy in our schools. Indeed, with that in mind the Government introduced a national literacy strategy in order to put more emphasis on the teaching of reading, not just in our primary schools, but also in our secondary schools where young people do not perform at the level they should.

My Lords, can the Minister advise me whether, in her opinion, the literacy hour has been a success? If she evaluates it as a success, perhaps she can give us her view as to how that success has been manifested.

My Lords, I am grateful to my noble friend for asking that question. It is early days to judge the literacy strategy but so far it seems to be working. The percentage of pupils achieving the expected level for their age at key stage 2—in other words, at the age of 11—rose by 5 per cent last year up to 70 per cent. But we must not be complacent about that. We have an ambitious target to take that figure of 70 per cent to 80 per cent and will want to raise it even further when we reach 80 per cent.

My Lords, does the Minister agree that, while reading ability is obviously important, so too is understanding what is read and the two do not necessarily go together? Can the Minister tell us what information she has in relation to an increase in standards or otherwise at key stage 2 in comprehension as distinct from simply reading ability?

My Lords, the tests do not simply measure an ability to read; they also measure comprehension. The improvement to which I referred applies to comprehension as well as straight reading skills.

My Lords, does the noble Baroness agree that dyslexia can seriously impede the academic development of a child and therefore interfere also with their personality and behaviour? It is suprisingly difficult to diagnose. Can she assure us that tests for dyslexia or the means of diagnosing it are available at all the key stages?

My Lords, I entirely agree with what the noble Lord said about the importance of early identification of children who are dyslexic. We must ensure that we identify them as soon as possible and give them the extra support and help that they need. This is a difficult area where teachers obviously need as much training as they can possibly get, together with the experience of knowing how to apply that training. I believe that a considerable amount of work is being done in this respect, including in-service training of primary school teachers in particular and the making available of tests that will help to diagnose this impediment.

My Lords, again, this is anecdotal, although I cannot go back to 1900. However, does my noble friend the Minister accept that between the 1950s and the 1970s the proportion of primary school children who entered secondary education as free readers improved dramatically? If there is a weakness in the present situation, is that not due to the fact that there may not be the time or the opportunity in secondary schools to promote reading as much as it should be?

Yes, my Lords; I accept that. However, we must not forget the huge importance of primary education from this point of view. Secondary schools should not have to be teaching reading. They should really be getting on with the business of developing the National Curriculum for key stages 3 and 4. If they have to spend a lot of time on remedial work teaching children to read, it gets in the way of progress in other areas.

My Lords, is my noble friend the Minister aware that the reading section of English key stage 2 has nine parts and that they, in turn, contain a total of 48 areas of study—areas which cover a very wide range of topics? Can my noble friend say what degree of success is being achieved in what appears to be a very demanding range of study? I have to say that I thought I heard perhaps a little over-confidence in my noble friend's first reply. I should like to have further information in that respect.

My Lords, in order to test children adequately it is right to consider a wide range of different skills; otherwise it would be very easy to accuse the QCA and others who are involved in developing these tests of focusing too narrowly and on too-limited a range of items. However, I have to tell my noble friend that I do not believe that I was being in any way over-confident. I recognise that we still have a very long way to go. As far as concerns reading, we have to get well above the 70 per cent of children who reached the expected target in 1999.

My Lords, does the noble Baroness agree that some of the very best of our primary schools, which are achieving very well for their children, find the literacy strategy much too prescriptive and inhibiting in that it does not allow enough professional freedom, whereas those schools that could do with improving welcome it? Instead of having a blanket policy, would it not be better to allow the schools that are achieving very well by their pupils the possibility of varying the literacy strategy?

My Lords, when establishing a strategy of this kind, it is more important to make sure that it is universally being adhered to. I take the point that the noble Baroness is making. We need to make the system sufficiently flexible to enable those schools that are already reaching the target to go beyond it. Indeed, that is what we are working to achieve.

asked Her Majesty's Government:

Whether they intend to review the penalty fares systems currently in use on the railways.

My Lords, Her Majesty's Government have no plans to review the penalty fares system. Train operators' penalty fares schemes are a matter for the Rail Regulator.

My Lords, I thank the Minister for that Answer. However, the noble Lord will be aware that railway penalty fares schemes arouse some anger among passengers who think they are unfair. One reason why they believe them to be unfair is that it is so often quite difficult to buy a ticket in the first place. Can the noble Lord tell us whether the Government feel that they can use the franchising arrangements to ensure that the levying of penalty fares will only be allowed for train companies that provide adequate and convenient ticket purchasing facilities?

My Lords, I know from the reaction in the House today that many noble Lords share the sentiments that lie behind the Question of the noble Baroness, Lady Thomas of Walliswood. However, under the Transport Bill, which is presently going through its Committee stage in another place, responsibility for penalty fares schemes will be transferred from the Office of the Rail Regulator to the strategic rail authority. We feel that the interests of consumers are better placed there. But that is not in any way to undermine the splendid efforts that the Office of the Rail Regulator has made to ensure that there is a high degree of assurance in the present schemes and that inspectors exercise their discretion properly. We would also ask, quite reasonably, that passengers allow sufficient time for purchase of their tickets. Let us be clear: if there are no facilities available for the purchase of a ticket, there is no liability.

My Lords, I introduced a private Bill on this subject some years ago and therefore I have a particular interest in it. Is the Minister aware that at that time there was much discussion as regards the necessity of providing machines which issue permits to travel? When these machines are available they work well. The machines are meant to record the station of embarkation and the date and time of embarkation. Will the regulator insist, or can it be provided for in the Bill at present before Parliament or in regulations, that every station has such a machine? Such a system would certainly distinguish between those who deliberately seek to evade paying their fare and those who simply cannot buy a ticket because the facilities to do so are not available.

My Lords, that is certainly a suggestion that the Rail Regulator and the strategic rail authority might bear in mind. I know that where these machines are in operation they seem to work well. However, we should also be aware that where any penalty is about to be imposed it is possible under the present system for checks to be made to ascertain whether ticket offices were open and facilities for buying a ticket available. When a penalty is imposed, information is issued on how an appeal may be made against that penalty.

My Lords, does my noble friend agree that there is a considerable difference between a penalty fare and a fine imposed by a court for deliberately attempting to evade payment, and that no criminal stigma whatever is attached to the many distinguished public figures who cheerfully pay up when they find that, because of an honest mistake, they do not have a ticket? However, will my noble friend confirm that deliberate fare evasion is stealing by another name and that penalty fares were introduced in the 1980s on what used to be called Network SouthEast because the railways were losing in excess of£50 million a year and people who did not pay their fares were being subsidised by those of us who did?

My Lords, I readily confirm that a penalty fare is a supplementary fare and is not a fine and that fare evasion is a criminal offence. However, the amount of moneys raised—I think of London Transport rather than the railways in this connection— are small in the context of the overall revenues raised by London Underground, for example. However, I take my noble friend's point about the importance of deterrence. That deterrence must, of course, always be mediated by discretion.

My Lords, is the situation not confusing for passengers? On the Gatwick Express and the Heathrow Express one is positively encouraged to buy one's ticket on the train, but on the Stansted train, if one does not have a ticket, one is liable to a penalty fare. How can the average passenger know what he is supposed to do on those trains? How can foreign visitors in particular know what they are supposed to do?

My Lords, I am, of course, grateful to the previous government for the thorough work they undertook when instituting the present system in 1996. I accept that there can be differences, but there is no appropriate system that fits all train services. For example, guards travel on InterCity train services, but the majority of branch line stations are unstaffed. I accept that there is inevitably confusion, particularly for those new to our transport systems. However, I hope that advances in technology, and in smartcard travel and so on, will begin to minimise the kind of inconvenience that is too often experienced.

My Lords, does my noble friend the Minister agree that in a few years' time, if Britain belonged to the single currency, tourists coming pinto the United Kingdom, or British tourists returning, say, from Portugal with escudos jingling in their pockets, would not be embarrassed at barriers trying to buy tickets for trains?

My Lords, the question of the euro is just slightly less sensitive than the question relating to the escudos. Therefore I shall reply by saying, "In all probability, yes".

asked Her Majesty's Government:

Whether they are satisfied with the response of companies in implementing the recommendations of the combined code issued by the Department of Trade and Industry in July 1999 requiring shareholder involvement in the determination of executive directors' remuneration.

My Lords, the Department of Trade and Industry issued a consultative document on directors' remuneration in July last year which set out the Government's proposals for strengthening the current regulatory and best practice frameworks in this area. The consultative document made it clear that the Government are concerned that some quoted companies have failed to comply in full with the spirit of the recommendations made by the Greenbury Group in 1995. The responses to the consultative document have been carefully considered and the Secretary of State expects to announce his conclusions next month.

My Lords, I am grateful to the Minister for his Answer. I am glad to learn that the Secretary of State will make an announcement on this matter. However, only last month the Pensions & Investment Research consultancy showed that about 27 per cent, or 500 companies in this country, were putting directors' remuneration to their shareholders at general meetings. That is a low degree of compliance. I should like further assurance that the Government will take this matter seriously when the Secretary of State makes his announcement next month.

My Lords, the figures that the noble Lord mentioned are an improvement on the PriceWaterhouse conclusions of May 1999 which were reported to the House by my noble friend Lord Sainsbury in October last. However, the noble Lord is quite right to say that the position is not satisfactory. I give him the assurance that this is one of the issues that will be addressed when the Secretary of State makes his announcement.

My Lords, given that executive remuneration has been growing by 10 to 15 per cent year on year for many years now, while the remuneration of other people has grown by only 3 to 5 per cent—in other words, the result of this is growing inequality—and given the resulting scepticism when it is suggested that shareholders should blow the whistle, does not my noble friend the Minister agree that there will be a need for Ministers to revisit the basic parameters of public policy when they undertake the review which the Minister mentioned?

My Lords, I am not sure what my noble friend means by revisiting the basic parameters of public policy. Certainly the statement which the Secretary of State will make next month will cover all of the issues which were addressed in the consultative document last year. In the end it must be for shareholders to determine remuneration, but it is for government to ensure a framework for remuneration which supports the need for directors to be accountable to shareholders. My noble friend refers to the rise in directors' remuneration over the years at a rate higher than inflation and higher than the rise in remuneration of their employees. Clearly an increase in differentials between directors and employees, except in exceptional circumstances, is not in the best interests of a company or its shareholders.

My Lords, before the Government announce their conclusions on the matter of directors' remuneration, will the Minister undertake that the Government will consult with some of his noble friends who have experience of high salaries, share options and golden handshakes? Is he aware that many of them are singularly absent today?

My Lords, it has never been my view that socialists have to be bad at their jobs.

My Lords, does my noble friend agree that the phrase "shareholder involvement" can have a number of different meanings? It may mean the influence of major institutional shareholders, who, I should have thought, have a lot of "clout" already with the board of the company concerned. Alternatively, it may mean the mass of ordinary shareholders who might number tens of thousands or hundreds of thousands and whose views are difficult to ascertain. It may also mean—this may be the meaning of the phrase in the Question of the noble Lord, Lord Smith—shareholders at general meetings who comprise a self-selecting group who may be there for the refreshments.

My Lords, one of the considerations that has been put forward in all seriousness is that if you have a shareholders' vote on directors' remuneration more shareholders will come to meetings and refreshment costs will rise. I do not think that is a very serious consideration. My noble friend is right, there are a number of ways in which accountability of directors to shareholders could be improved. It could be by a shareholders' vote; it could be by new disclosure requirements on remuneration; it could be in the way the listing rules are framed; it could be in the role of independent non-executive directors; or it could be in a strengthening of the combined code. These are all matters that the Secretary of State can address in his Statement.

My Lords, does the Minister agree with the advice of the late J. Peter Grace, who used to tell his most highly paid executives, "I do not have a problem paying you that sort of money; you just have a problem earning it"?

My Lords, that sounds like very good advice. Of course there are exceptional people for whom exceptional earnings are appropriate. But far too often we see exceptional earnings being given to mediocre people.

My Lords, as we have time, perhaps I may come back on this. I thank the Minister for his answer, with which I absolutely agree. Do I therefore take it that if people do a good job they deserve their high salaries and their share options? I am not quite so sure about the golden handshakes.

My Lords, I said to the noble Lord, Lord Marlesford, that there are exceptional people for whom exceptional remuneration—which can include all kinds of considerations other than basic salary—would be appropriate. However, the problem, as I think the noble Lord will recognise, is that in respect of too many people high remuneration is accompanied by mediocre performance.

My Lords, does that apply to Ministers?

My Lords, Ministers are not directors. They are certainly not directors of quoted companies They do not come within the scope of the review.

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

moved Amendment No. 1:

Page 1, line 18, leave out ("they consider").

My noble friend will be interested to hear that there are now 284 government amendments. I am not sure whether that will be the final tally.

I apologise to the Committee for being so out of date. I had obviously underrated hopelessly the Government's incompetence, their disregard of Parliament and their generally sloppy ways of handling legislation. There are some 285 amendments so far to this already bad Bill. It would be exceeding all the bounds of optimism if one were to suppose that even a very small proportion of those amendments would result in any acceptable improvement. I hope that when the Minister replies we will hear him speak on the subject of the number of amendments that are now before us and about whether he expects to table a lot more before the end of the Committee stage.

I am moving Amendment No. 1 on the Marshalled List. The clause that I seek to amend contains the words,

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

Local authorities are being given huge powers here. My amendment seeks to place some onus on them to prove that their actions are necessary and sensible. As the Bill stands, all they have to do is to say, "We think it likely" or "We thought it likely". In other words, they can consider themselves the judges of the worth of their own legislation.

I have always found this kind of proposal very objectionable, from whichever side of the House or from whichever party it may come. I hope that the Government will be minded to accept this very modest, small amendment.

Amendment No. 16, which is grouped with Amendment No. 1, has exactly the same purpose. It seems to me not in any way injurious to the purpose that the Government have in mind or to the sense of the Bill.

This habit of taking more than is necessary in legislation is totally unacceptable. For that reason, at this early point in the Committee stage, I very much hope the Minister will consider that he would not be ill-advised to make a modest concession. It will cost the Government nothing. It will make no difference to the sense of what has been provided for in the Bill. The amendment will introduce a sensible limit to the powers conferred upon local government. Such powers cannot be left entirely to the purely subjective judgment of local authorities. I find that course unpleasant and unacceptable.

I hope that the Minister will not respond by saying that this is the kind of objection he always hears from the Opposition. In the past I made speeches of this kind when I sat on the Government side of the House. If necessary, I shall do so again. My future speeches will be conditioned by the reply that I receive from the Minister today. If he cannot give me the impression that he takes the matter seriously, I shall take the opportunity again and again to raise this and other similar points throughout the Bill. I beg to move.

I rise briefly to draw the attention of noble Lords to the back of the Bill where it says that the legislation was introduced by the noble Lord, Lord Whitty, as the Local Government Bill, "House of Lords". When the noble Lord comes to reply to this interesting debate, I hope that he shall be able to explain how such an astonishing number of amendments have arisen in the department without the aid of any debate in the other place? Normally when one receives an enormous raft of amendments, it is as a result of debates in another place where the Government have had matters drawn to their attention which, sensibly, they then seek to put right. However, in the case of this Bill, who convinced the Government that what they have drafted is wrong or inadequate? Furthermore, why were these amendments not suggested before the Bill was printed and put before your Lordships' House?

I should like to support the amendment of the noble Lord, Lord Peyton, because I, too, feel that the words "they consider" go much too far. If the Bill goes on to the statute book in its present form, it will introduce new and undesirable conflict between local and central government. Using the terminology in Clause 2, it would be possible, for example, for a local authority to overrule and ignore a policy planning guidance on an important matter issued by the Department of the Environment, Transport and the Regions. Surely that would be undesirable? A local authority should have reasonable freedom to operate within the framework set down by central government. As drafted, this clause will lead to chaos.

I support the amendment and all that has been said in support of it by my noble friend Lord Peyton. The phrase "they consider" confers an absolute delegation and subjective dispensation of discretionary power. It is wholly unacceptable, in particular when taken in conjunction with the concept of promotion, upon which I shall speak in a subsequent amendment. I support the amendment and hope that it shall be taken seriously.

Before I turn to Amendment No. 1, I should like to add my voice to the critical comments that have been made on the number of government amendments to the Bill. At the time of the debate on Second Reading we were aware that whole swathes of amendments would be coming from the Minister. I then asked the Minister to ensure that we were given a period of 14 days from when we knew exactly which Bill the Government wished to promote until the start of the Committee stage. That has not proved possible, although I thank the Minister for the efforts made by himself and those in his office so that, at any rate, the Front Benches were made aware of the changes a little over a week ago. However, I stress that only the Front Benches were so informed and even then only with the aid of fax machines.

I acknowledge that, following my request for the revised Bill, the Minister's office has made sterling efforts to produce a version of the Bill incorporating all the proposed changes. However, I am sorry to say that the Minister's office was forced to use old-fashioned physical cut-and-paste methods rather than modern technology. I had already mentioned to a number of interested outside organisations that the Minister had agreed to produce a revised version. Those organisations were pleased because their lives would have been made easier and they had expected to be able to see that version through electronic means. I am sure noble Lords will agree that such outside bodies often provide invaluable assistance with their comments on how proposed legislation may affect their areas. I am sad that in this case the Government were unable to make use of modern technology and I hope that they will ensure that a version will shortly be made available using the appropriate technology.

I should like to make a few comments on the amendment of the noble Lord, Lord Peyton of Yeovil. My noble friend Lord Tope recently discovered that "Wednesbury" is a place as well as a principle. For that reason I assume—and I hope that the Minister can confirm this—that that principle will apply here. In other words, one must read into this provision the term "reasonably". The matters which form the subject of the clause are points of judgment. We on these Benches would always prefer a local authority to be able to be the judge—within reasonable constraints—of what is proper and appropriate and what will achieve the objectives provided for in legislation. Local authorities are not being offered a blank sheet here. However, we would prefer to see local government being able to take a reasonable view of local circumstances without too much imposition from central government.

As in other legislation, many provisions in the Bill provide for the Secretary of State to issue directions and generally refer to what the Secretary of State "considers appropriate". If every decision was made so prescriptive that it had to be passed to a court for consideration, progress would become very difficult.

I rise to support the thrust of the comments of the noble Baroness, Lady Hamwee. I should also like to express my concern that we might be in danger of taking away with one hand what we are seeking to give with the other here. I believe that this clause is particularly important because it recognises the need to give local authorities the general power to promote the well-being of their area rather than having always to seek a legal opinion as to whether they have vires.

A consequence of the very limited scope within which English and Welsh authorities have operated to date has been that, on occasion, they have proceeded with excessive caution and, as a consequence, have incurred excessive legal costs when trying to validate the question of whether they have legal powers. In some cases, such as major property deals, the costs of such validation have been quite astronomical. We should bear in mind that the amendment before us would take us straight back into that quagmire. That is not in the general interest of local authorities. In my opinion, it might be of interest to certain lawyers, but by no means all. For that reason, I believe that the form of words used in the Bill is well tried and tested—it is similar to that already used in Section 137 of the 1989 Act.

The provision marks an important new beginning for the relationship between central and local government. Does the Minister recognise that we should stand firm with the Bill as presently drafted and try to move forward towards a more positive relationship than perhaps has been the case in the past?

I hope that the Committee will grant me a few moments' indulgence to follow the remarks of my noble friend Lord Peyton of Yeovil and those of the noble Baroness, Lady Hamwee. It is an interesting—if somewhat salutary—thought that the Greater London Authority Bill, which comprised 300-odd pages, only attracted around 850 government amendments, and even then only after a great deal of work. On this Bill, the ratio of amendment to page of legislation is considerably worse. I feel sorry for the Minister, although I do not sympathise with him, if one may make that distinction.

The fact is that the Bill, as the noble Lord would like to see it amended, is an extremely useful document. It enables me to make yet another comparison, which is that the Bill will go from 51 pages to 64, an increase of the order of 20 per cent, as a result of the Government's amendments alone. That is not the end of our problems. I am well aware that it is a diversion, but there is also a document, 160 pages of it—The Local Government Bill Consultative Drafts of Proposed Guidance and Regulations on New constitutions for Councils ( Part II and Clauses 66, 67) So not only are we dealing with a major Bill which is to be changed in a dramatic way; much of the detail, the body and the substance of what is going to affect local councils is in another document which is not before us. That is highly regrettable.

We can only deal with the situation we are in. As I said, I feel sorry for the Minister, but I do not sympathise with him. I add my protest to those already made. This is not a proper or an appropriate way to legislate. Still less is it a proper or appropriate way to treat local councils which are democratically elected. I should add here, I suppose in parenthesis, "as we are not", but, of course, the other place will plead democratic superiority as it does over us. However, local councils are democratic. They have a right to their own opinions and they should have a right to organise their own affairs. The Bill seeks to impose a form of organisation on their administration. However, as I said at Second Reading, if my memory is correct, it is outwith the convention on freedom for European local authorities.

That is as may be. As I say, we have to live with it. I make one point in support of the noble Baroness, Lady Hamwee. I suspect that that there are not many local authorities that could not have produced the Bill, as revised, straight off their own computers. Here we are with the Government unable to do that and yet seeking to force change down their throats. I do not think that that is satisfactory.

When one comes to the amendment itself, the difference between what the Government want and what my noble friend Lord Peyton of Yeovil would like might appear to be marginal. But if the amendment were accepted, Clause 2(1) would read:

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

Thought is a wonderful thing. I have all kinds of random thoughts. But the idea that local authorities might act on the basis of random thoughts—I am sure they would not because I believe they are extremely responsible organisations with very good members—which they considered appropriate to this action seems to me wholly inappropriate. If nothing else, it is unnecessary wording. As someone who prefers to see plain English—we have some fairly obscure stuff coming towards us later on—I would prefer to see this little consideration considered inappropriate. I support my noble friend.

Many of us who have served in local government have had cause to regret what has happened to local government over recent years. We have seen a falling off in the capabilities—let us be frank—of members of council and of officers. That is due, I suggest, almost entirely to the fact that powers and discretion have been removed from local authorities until we have reached the stage where, frankly, men and women of ability do not even apply to become members of local authorities.

I was delighted to see the wording that the noble Lord, Lord Peyton, and others have criticised. Otherwise one asks oneself who is to judge whether these things are likely to benefit the area for which the local authority stands. Who is to judge? Is it the Minister? Is it a court of law? Who is to say whether, in the face of a challenge, what has been done by the local authority is right or wrong? The clause says that the local authority will consider what is likely to be for the good of its area. What is wrong with that? It is completely clear that discretion is vested in the local authority. If this House were to say, "We do not trust that discretion", that will be one more removal of power from local government, which I personally would hate to see.

Before the noble Lord the Minister sits down, I rise with hesitation to cross swords with so eminent a lawyer. I suspect that we are discussing how many angels can dance on the head of a pin. I hope that if the noble Lord looks at the effect of the amendment of my noble friend Lord Peyton, he will see that it does nothing to remove the local authority's responsibility or indeed its discretion. It removes only some somewhat lax and unnecessary words.

The noble Lord, Lord Dixon-Smith, has been very kind in promoting me—I hope it has been heard by the Chief Whip. Unfortunately, the Leader of the House is not here; nor is the Prime Minister. If the only argument against the provision is that the words are superfluous, and if I, as a humble lawyer, think that they are not superfluous but mean something, what harm is done by their inclusion?

I am deeply grateful to my noble friend Lord Mishcon for raising the sights of the Committee about the Bill. This is a very important turning point for local government in terms of broadening flexibility, broadening the freedom of choice and putting back responsibility on to local government for looking after the well-being of their communities. I had thought from the interventions of the noble Lord, Lord Dixon-Smith, in earlier debates on local government that he was also of that persuasion and concerned about the need to get local government back to the position where it genuinely leads its communities and takes decisions on behalf of its communities. That is what the power of well-being is really about.

I am not prepared to be abashed today over criticism of the tabling of amendments. The Committee will know that on previous occasions I have been slightly shamefaced in terms of our producing rather late amendments in relation to the GLA Bill when it had passed several days of Committee in another place and several days here. However, on this occasion I must say—it is perhaps presumptuous of me to say so—that I do think the noble Lord, Lord Peyton, is being a little disingenuous. He will know that Bills, and perhaps in particular local government Bills, whichever House they are introduced in, are often subject to detailed amendment before they are finally considered in Committee by that first House. That was the case under various regimes of the party opposite, and it is the case now. I am not saying that it is perfect, but it is hardly unprecedented.

In particular, I justify the procedure in this respect. I explained at Second Reading the necessity of coming forward with detailed amendments, many areas of the Bill having been subjected to a new and very important innovation in the way we approach legislation in this Parliament. The legislation has been looked at in great detail by a Joint Committee of both Houses, chaired by the noble Lord, Lord Bowness. A number of points were raised to which we had to give a response. The proposals have also been subject to a high degree of consultation with local government and other parties. That, in addition to the normal tidying up in which governments of all persuasions have always been involved, has produced a significant number of amendments, some of which are very important.

Although the noble Baroness, Lady Hamwee, is anxious that the House of Lords oversees the Government in their modernising agenda—I regret that we are only as far as fax machines and not as far as a complete new version of the Bill—it is important that the House understands that the changes we intend to make as a result of the amendments, subject to the views of the Committee, will strengthen the outline of the Bill which we provided at first print and which we discussed at Second Reading. Those changes will be informed both by a better assessment of what is necessary and, more importantly, by the opinion of the Joint Committee and by the opinion of local government itself.

Therefore, on this occasion I make no apology for the large number of amendments. When we come to specific amendments, noble Lords will no doubt have particular points to make which I shall take seriously, as always. However, I do not accept the general criticism with regard to the number of amendments.

I am grateful to the Minister for giving way. Will he clarify this point? I understand that we shall not be receiving amendments to the Bill in so far as it relates to Wales until Report stage and possibly Third Reading. That is because the National Assembly for Wales has not yet completed its consideration of the Bill. Will he confirm that?

Yes, I am happy to do so. The general theme of the Bill applies to Wales as it does to England. But where there are order-making powers which rest with the National Assembly for Wales, in parallel with the Secretary of State in relation to England, the precise details of those order-making powers have yet to be agreed with the National Assembly. That is a consequence of devolution. It means some slight delay in my being able to lay those amendments until the situation in Wales has been clarified. The Welsh dimension is the only major area where there would be amendments made by the Government beyond the Committee stage.

While the noble Lord is on the subject of procedure and before we return to the subject of the amendment, perhaps I may leave something on the record which may be considered by the Procedure Committee when it comes to look at how all this works out. First, a procedure which enabled the Government to draft the Bill as they intended to debate it in Committee would be much more useful than one in which discussion took place against the rather misleading matrix of the Bill as it originally stood. Secondly, there would be sense in delaying the later stages if amendments are to be deliberated on by devolved assemblies so that those amendments receive a Committee stage discussion rather than only a Report stage discussion. The only alternative to that is to re-commit parts of the Bill when that becomes necessary. I do not want to delay the Committee, but I do not know of any other opportunity to put forward that idea.

I note the noble Lord's first point. Clearly, we are still on a learning curve in relation to pre-legislative scrutiny and the way in which both Houses of Parliament will engage in much more detailed consideration of Bills before they reach their formal stages. I accept his point in part, although I suspect that the business managers will find it hard to guarantee that we always meet the optimum timing in these respects.

As regards the position on Wales, I suspect that the amendments which arise as a result of our consultation with the Welsh Assembly will not be a huge surprise to noble Lords but they need to go through the process of agreement with our colleagues in Wales. Therefore, I should not have thought that there was a need to re-commit them. However, we are not at that point and noble Lords will no doubt reserve their judgment in that respect. I believe that this is not such a big issue. There is no conflict between ourselves and the Welsh Assembly. But we need to get matters right and ensure that the procedures agreed between central government and the devolved administrations are observed.

Perhaps I may now turn to the substance of the noble Lord's amendment. Clause 2 confers a broad power on local authorities in the promotion and improvement of the well-being of their area. That is a major step in the direction outlined by my noble friend Lord Mishcon in giving back to local authorities the ability to decide the priorities within their communities. The Government very much want local authorities to be able to act in the interests of, and react to the needs and concerns of, their communities, free from threat of intervention by the courts. Clause 2(5) makes clear that this can include action outside the authority's designated area if, in the opinion of the local authority, such action would promote or improve the well-being of its own community.

I say again to the noble Lord, Lord Peyton, that perhaps he is being slightly disingenuous in that this phraseology is quite familiar in local government Acts. If I remember rightly, the noble Lord was a member of the 1970–74 government. This precise phraseology was used in Section 137—a fairly wide-ranging section—of the Local Government Act 1972 which allowed local authorities to use that power if, in their opinion, it was in the interests of their area to do so.

As the Bill is drafted, the lawfulness of any activity would depend on the local authority being able to prove that in its opinion the activity promoted or improved the community's well-being. This is a well tried and trusted formulation in local government. It is not an innovation in that respect.

Of course, the local authority's opinion might differ from the opinion of some of its ratepayers, some of its political opponents, and no doubt other community interests. But at the end of the day, it is the local authority's responsibility to make that judgment.

There is a problem here and I want to ask the noble Lord about it. "In its opinion" always gives the opportunity to go to judicial review on a decision and the court can say that it was not reasonably entertained. If one looks at the wording of the Bill, without my noble friend's amendment, it could well preclude judicial review—I think it probably would unless there were bias or ill will. Is that the intention of the clause?

If I understand the question correctly, no. In response to the noble Baroness, Lady Hamwee, it is clear that the Wednesbury rules apply in this respect, as in all other respects, in terms of the decisions of local authorities. In another words, local authorities are required to act reasonably. It is true that in the last resort judicial review could apply where the authority was regarded as not acting reasonably. The point is this: whose opinion is it that informs the decision? Local authorities must reasonably reach that opinion and reasonably implement that decision. If we were to take out the words as the noble Lord, Lord Peyton, suggests, it would leave the courts, and not the local authorities, directly to decide what activities could be undertaken within that area. Like the noble Lord, Lord Dixon-Smith, I assume that all local authorities do act reasonably and not randomly. I am sure that that is the case, even in Essex. Nevertheless, the reasonableness criterion continues to be applied.

I was asked whether this would allow local authorities to avoid, for example, planning policy guidance or other statutory measures. They could not do so because they are prevented by Clause 3(1) from doing anything which they cannot do because of restrictions or other legislation. Therefore, authorities' duties around planning issues are prescribed in other pieces of legislation and this is not the open door suggested by the noble Lord, Lord Peyton. Nor is it open to local authorities to use the clause to take unreasonable actions or have unreasonable opinions. The provision does, however, give a great deal of additional discretion to local authorities to act in the interest of the communities that they represent. If the two amendments promoted by the noble Lord, Lord Peyton, were carried, that would greatly confuse the exercise of that new power and would open it to detailed litigation. I hope, therefore, that I have said enough to persuade the noble Lord to withdraw the amendment.

I am grateful to the noble Lord for his thoughts on the subject. At least he has paused to think for a moment. It may be that I have misunderstood the whole purpose of pre-legislative scrutiny. I had supposed, perhaps rather simplistically, that the pre-legislative scrutiny would avoid, not precipitate, the need for the torrent of amendments that we find on the Marshalled List before even a word of the Committee stage has been delivered. That is what bothers me.

I am slightly surprised, and more than a little disappointed, to find the noble Lord declaring himself not at all abashed. I remember previous occasions when he had good reason to be abashed and when he said so. He did himself a great deal of credit. There is nothing to be ashamed of in saying that a slight mistake has been made. I was impressed on the previous occasion when that happened, and I am depressed on this one.

I hope that the noble Lord will make the effort to understand the position. I certainly have no petty intention of being hostile to local government. If I may again be slightly autobiographical, I recall, when I was on the Benches opposite, making a speech one more than one occasion about what I believed was the then government's deplorable messing about with local government. So I do not accept that I should be put in the position of someone who is prejudiced against local government and is determined to shackle it at every turn. All I am saying, and it is not too much to ask, is that local government should produce something that is likely to be of benefit. If it does that, that is sufficient. Under the Bill as drafted, all local government has to do is say that it thinks it is likely to be of benefit. That is not quite enough.

The noble Lord spoke rather as though it were the intention of the Government to preclude any possibility of intervention by the courts. I am glad to see the noble Lord shaking his head, but that was the impression that he gave. His remarks could easily be construed as meaning that any interference by the courts is to be resisted and avoided at all cost, whenever possible. If the noble Lord wants to intervene, I am happy to give way.

I hoped that I had made it clear that if the reasonableness of a local authority's action is in question, as the noble Lord, Lord Campbell, mentioned, the question of judicial review comes into account. I do not exclude the courts from every decision. I am saying that if we accepted this wording, it would be open to the courts to intervene on almost every decision of a local authority to clarify whether the opinion of the local authority or that of someone else was better.

I am grateful to the Minister and am slightly reassured by his remarks. I do not want to prolong my remarks, but one noble Lord opposite, who is not now in his place, said that if my amendment were passed, we should be returning to some old quagmire. I did not understand quite what that was about. I thought it rather extreme to say that this modest amendment would put local government back in some imaginary quagmire. That is certainly not my intention and I do not believe that it would be the effect of the amendment. When I find the noble Lord, Lord Mishcon, opposing an amendment of mine, I realise that I am up against very serious skills. I have nothing to offer which can possibly compete with the skills used with such ease by the noble Lord. Nevertheless, despite what the noble Lord has said, I still think that the amendment that I propose is quite a modest one.

I am sorry that the Minister should take such a lofty view in dismissing the amendment and saying that it would be greatly prejudicial to local government. I do not see that. If the noble Lord persists in that view, I shall, with some reluctance, press the amendment. The noble Lord does not respond. I should therefore like to take the opinion of the House.

:I must inform the Committee that if Amendment No.2 is agreed to, I cannot call Amentment Nos. 3to 7.

moved Amendment No. 2:

Page 1, line 19, leave out from ("consider") to end of line 2 on page 2 and insert ("will further any one or more of its principal purposes, namely—

(a) promoting economic development and wealth creation in their area or improving the economic well-being of their area,

(b) promoting social development in their area or improving the social well-being of their area,

(c) promoting the improvement of the environment in their area or improving the environmental well-being of their area.").

I support my noble friend's amendment. The amendment strengthens the message that I believe the Minister would wish local government to receive: that, after years of being undermined, local government has the power to do things for its local community.

The inclusion of the words "principal purposes" is important. Some have argued over past decades, and some cynics still say, that the private sector could deliver all the services that local government deliver without the bureaucracy. Of course, those who so argue may not be interested in the democratic process. But it leaves out an important piece of the jigsaw. It is the way those services fit together which differentiates between how they serve the community.

When I began to speak, I should have declared an interest as a county councillor in Somerset. I should like that interest to be recorded for all the times that I speak on the Bill. I am sorry that the noble Lord, Lord Mishcon, is not in his place now. I wanted to ask him why he had formed such a cynical view of members currently serving in local government. I do not wish to be seen to defend myself, but I meet many members and councillors who are extremely committed and energetic. They have virtually given up any form of meaningful life outside their jobs in order to serve their local communities. I do not believe that the quality of members is on the whole poor. I accept that members can always do with more training. I am glad that through the Improvement and Development Agency the Government are committed to delivering that training. But we should be pleased with the quality of members and young members coming in.

My noble friend mentioned that what we sought to achieve would be better covered by the term "sustainable development". However, to define the principal purposes of local government would be a step in the right direction.

It became clear from her remarks that the main point of the noble Baroness's amendment is that what is good enough for the GLA should be good enough for everywhere else. I suspect that the rest of the country views the issue the other way round.

As the noble Baroness indicated, in the case of the GLA Act we started virtually from scratch. The GLA was a new body with no existing functions, although it took some over from other statutory bodies. While we might have chosen to give that body a raft of specific powers, that would undoubtedly have lengthened the GLA Act. I do not think that that would have been appreciated in this House or by those who subsequently had to interpret the powers of the GLA. Instead, we gave the GLA a broad purpose.

It is not appropriate to apply the wording of the GLA Act to local authorities which already have statutory duties, powers and obligations through hundreds of years of local authority legislation. It is unclear how those would be affected if local authorities were now given principal purposes, as proposed in the amendment. Would the authorities' duties carry equal weight with these purposes? If there are principal purposes, what are the non-principal purposes, and so on?

The noble Baroness suggested that it was not the most elegant piece of drafting. However, the drafting is simple and the intention is clear, but with wide ramifications. I do not think that it is sensible to read across from the GLA Act in order to restate the purposes of local authorities which have existed for many decades.

The wording of the clause has been drafted to work effectively alongside existing local government statutes. For the same reasons, it is not possible successfully to transplant the wording from the GLA Act into this Bill.

The noble Baroness referred to parish councils and town councils. We are not giving powers to parish councils, but we want parish councils to engage in the kind of community strategies to which we refer here. To assist them, they will be able to use their existing powers under Section 137 of the Local Government Act 1972. We did not feel, therefore, that the new power should be reflected in parish and town councils.

If the amendment were accepted, it would simply add to the confusion regarding local authority powers. The practical effect would be unclear and subject to serious problems of definition. We do not think that it would be prudent for us to accept a new definition of principal powers for local authorities. In the light of that explanation, I hope that the noble Baroness will not pursue the amendment.

I had not intended to put the amendment to the vote. I shall consider the Minister's remarks on parish councils. I am concerned that they should have all the powers they might reasonably expect in order to take a full part in the community, and in leading those communities. I shall read in Hansard the precise words used, but I am not sure that the Minister answered my point about the distinction between, for example, economic well-being and economic development and wealth creation. I should like an assurance that the objects—the term used in the clause—are at least as wide as the parallel terminology in the GLA Act and that local government is not constrained by the words in this Bill. I beg leave to withdraw the amendment.

moved Amendment No. 3:

Page 1. line 20, leave out ("promotion or').

I, too, looked in the Oxford English Dictionary and saw that the word "promotion" is a vague term. The concept has no precise meaning for the purpose of legal draftsmanship. The largest edition of the dictionary contains pages on it, but the definition I found was:

"to put forward into notice or attention, to publish, promulgate or advance".

That is rather vague. In the context of the Bill, in particular Clause 2, which contains a massive delegation of power and a serious erosion of the supervisory jurisdiction of the courts under judicial review, it is not satisfactory to retain the term.

In any event, without pre-empting debate on Clause 68 and Amendment No. 365, which is not my intention, there is no doubt that the clause and the use of the word "promotion" must be seen in context with Clause 68 and Schedule 5, which repeal Section 2A of the 1986 Act and Section 28 of the 1988 Act. The concept of promotion was brought into the realms of local government law relatively recently. Its origins are in the Private Member's Bill of the noble Earl, Lord Halsbury, to amend Section 2 of the 1986 Act. It passed through this House, went to another place and was defeated. The concept of promotion was then taken up in local government law by Section 28 of the 1988 Act.

Surely, on an objective standard, it is only sufficient for the due discharge of the proper functions of a local authority on public funds that there should be the improvement of economic and social well-being in its area and that there is no need to import the inevitable ambiguity of "promotion".

I should like briefly to refer to my Amendments Nos. 4 and 5. It is my most earnest hope that the Minister will take me seriously when I say that the amendments appear for no other reason than the desire to help and to abbreviate a Bill which is already overlong.

The Government want to give local authorities the power to do anything which will have economic, social and environmental benefits. I cannot think of a benefit which local government could produce which would not fall in one of those three categories. Therefore, the Bill would have the same effect if all three adjectives were left out and we state that local authorities can do anything they want to do.

I have tabled my amendments in an attempt to shorten the clause. I hope that the Minister will regard them as helpful. That is what is intended. The measures would simplify the Bill, making it briefer and more easily understood.

I must first declare my interest as leader of a local council. I am somewhat disappointed with the noble Lord, Lord Dixon-Smith, because having agreed that the purpose of the clause is to give local authorities the opportunity to act in the interests of their local communities and to tackle problems and issues which may arise in their local areas, he seeks to make what he regards as a simple amendment. It would remove the discretion which local authorities are given in this clause.

The noble Lord has looked in the Oxford English Dictionary and has missed the definition of "promotion" which most people in my area would recognise. In thinking of promotion, they would be worrying about who is changing divisions in rugby or football.

The definitions of the word in this context advance the interests of the local community in the broad areas of economic, social and environmental well-being. Furthermore, in achieving many of the objectives of the clause, local authorities will be working in partnership with many other agencies and organisations. The idea of indirect activity is also encompassed in the word "promotion". That is why it needs to remain in the Bill.

I was somewhat relieved when I heard the noble Lord, Lord Peyton of Yeovil, explain his amendments because I was concerned that in seeking to reduce the number of paragraphs, he was further reducing the amount of power and discretion which local authorities could exercise. In some ways, the consequences of the policies of the party opposite in relation to mining in the early 1980s still remain. Only yesterday in my authority, a local firm which makes mining machinery closed with the loss of 200 jobs. That is the kind of situation in which I, as a leader of a local council, need powers to be able to act and intervene, not only directly, but also in partnership with local business and training organisations to make sure that those 200 people may soon be absorbed back into the labour force. I hope that we may accept the phraseology of the clause as it is laid down.

Like my noble friend Lord Smith, I recall a time when, for me, "promotion" meant solely the way out of the Third Division South! These days, "promotion" has a much wider meaning. It indicates a range of methods whereby a local authority could achieve the objectives set out in the Bill. Therefore, far from resulting in a degree of ambiguity, it is intended to provide a degree of comprehensiveness. If the local authorities' ability to promote economic, social and environmental well-being was removed, it could imply that the authorities could take action directly only if they themselves provided the intervention or the service.

There is generally held to be a difference between the provision of a function and the promotion of a function, because the promotion of a function involves other public and private bodies within the community, as my noble friend Lord Smith indicated. If we were to accept the amendments in the name of the noble Lord, Lord Dixon-Smith, it is clear that the authorities themselves could still take direct action to improve well-being but it is less certain that they could encourage or facilitate others to take such action. Moreover, the amendments might prevent local authorities taking any action which maintained current levels of well-being or which prevented current levels deteriorating, because such action would be promoting, but not improving, the well-being of the local area. Therefore, the terminology in the Bill as it stands is more appropriate.

I turn to the points raised by the noble Lord, Lord Peyton of Yeovil. We considered whether we should simply use the term "well-being" rather than any qualifying words. We believe that the formulation, "economic, social and environmental well-being" invokes the idea better than leaving it open to as wide an interpretation as may be made by referring simply to "well-being", which could theoretically be interpreted in a different way. While in general we welcome any amendments—this may not be borne out by my view on the previous clause—from the noble Lord which reduce the wording of the Bill, on this occasion his amendment could make the Bill's meaning slightly more obscure. That is why here and in other pieces of legislation before the House we have used the terms "economic", "social" and "environmental" in relation to "well-being". That gives a clearer idea of what we are about and what we expect local authorities to do in using those powers.

I therefore hope that noble Lords will not pursue those changes because I believe we are all agreed that they would not achieve their objectives.

Before the noble Lord sits down, I have a query relating to his last point. The example of highways occurred to me; for instance, the creation of footpaths. Is that economic, social or environmental?

Environmental, I believe.

No, I believe it is social.

It is probably all.

I am grateful to the Minister for his explanation, which I shall consider carefully. If I feel the need to return to the matter at a later stage, there are still plenty of opportunities to do so. In the mean time, I beg leave to withdraw the amendment.

moved Amendment No. 8:

Page 2, line 6, leave out ("or present").

The noble Lord, Lord Dixon-Smith, is coming up with some colourful examples of situations with which local authorities might have to deal. My query is quite simple: as I read subsection (2), it gives a power to the local authority to carry out actions. It does not say that a local authority must prefer certain groups of people to those which comprise its residents. It is in the spirit of supporting local government and the autonomy of local authorities that their scope for taking rounded decisions should he in the interests of all those who might properly seek to benefit from them. Simply to allow local authorities to take decisions for the benefit of persons resident but not for other persons who might be in its area would be a regrettable restriction.

I want to give the Committee two or three examples of large groups of people which, certainly in the south-west, would be massively disadvantaged if the noble Lord's amendment were to be accepted. Some examples which spring to mind are seasonal workers who come to work in horticulture or agriculture; students who frequently have to cross county boundaries, for instance, to go to appropriate colleges; or even tourists in the summer season. Such groups number far more than would occasional eco-warriors or terrorists.

My noble friend might have added homeless people and, indeed, people who are sleeping rough on the streets. I am sure that local authorities, among other agencies, would not want to be forced to ignore their interests.

I believe that on this occasion noble Lords on the Liberal Democrat Benches have made my point for me. Clearly, the provision is not a requirement on local authorities to act on behalf of the North African terrorists mentioned by the noble Lord, Lord Dixon-Smith, or Swampy and his friends; rather, it provides an ability to act on behalf of exactly the types of group to which the noble Baronesses, Lady Miller of Chilthorne Domer and Lady Hamwee, have referred. I believe that almost every local authority has some, if not all, of the groups which we have mentioned. Therefore, it is important that they have the power to act on their behalf.

I am grateful to the Minister for his reply because he has helped me, even if he believes that he has done so unwittingly. Of course, I accept all the examples that were given by the noble Baronesses on my right. However, the Minister has said that the provision is not a requirement. That will now be written into the record of the proceedings in this House because it will be reported in Hansard. If this matter becomes an issue in one of those ridiculous cases which I mentioned and of which we have all seen or know of examples, at some point the Minister's words in this House may be important. I am grateful to him for those words. They are helpful and, with that, I beg leave to withdraw the amendment.

If Amendment No. 9 is agreed to, I cannot call Amendments Nos. 10 to 12.

moved Amendment No. 9:

Page 2, line 7, leave out subsection (3).

I have no difficulty with there being written into this part of the Bill references to the importance of the achievement of sustainable development. I believe that that is a fundamental objective towards which local government should be working. However, although I do not favour the removal of the subsection in its entirety, I have some difficulties with the wording and I should be grateful for the guidance of my noble friend.

Could the words,

"have regard to the effect … on the achievement of sustainable development in the United Kingdom",

be deemed to mean that if a local authority were pursuing something which would lead to the opening of a particular group of businesses, it would be necessary for the local authority to demonstrate that that would not affect the sustainable development of similar businesses engaged in similar work anywhere else in the United Kingdom? I am concerned that the phraseology "in the United Kingdom" will somehow create a kind of lawyers' playground. Although I understand that lawyers need playgrounds and that ambiguity in legislation is no doubt helpful, I am worried that this will produce a substantial restraint on local authorities pursuing and using the power in a sensible fashion. I am sure that that is not the intention.

I believe that the intention is try to ensure that, in pursuing the well-being of the people of their area, local authorities do so in a way which does not have a major negative impact on, say, residents of surrounding areas, and that they pursue that well-being in a fashion which can be sustained for future generations. Those are important principles. However, I am not sure that the subsection as drafted will necessarily achieve that. I hope that my noble friend can satisfy me that my fears of how lawyers might interpret this issue are completely wrong.

While I, too, am interested in the Minister's reply to the question of the noble Lord, Lord Harris of Haringey, on the intention of the drafting, we would certainly be sad if this clause were to be removed. Indeed, through our Amendment No. 36, to which I shall speak later, we express a wish to strengthen substantially the sustainable development duty of local authorities.

I had not read anything so sinister into the clause. I believed that it was attempting to make a building block of local authorities in an effort to make sustainable development occur nationally and to recognise that local authorities are the only building blocks that can deliver a national sustainable development strategy. They are, after all, the planning authorities. They will be responsible for how the Transport Bill is implemented. Virtually everything that they touch has an immediate bearing on sustainable development in the most obvious sense. Much of what they do has a longer-term and perhaps less obvious impact on sustainable development. Therefore, I believe that this subsection should remain. Indeed, we look forward to the sustainable development power of local authorities being considerably strengthened.

My name also appears in support of the amendment. I must confess to slightly different motives from those of my noble friend when I added my name, in that, rather like the noble Lord, Lord Harris of Haringey, I wished to probe this aspect of the meaning of "sustainable development" and particularly the relationship as regards local authorities and sustainable development in the United Kingdom.

Regrettably, "sustainable development" is not a precise phrase. If we were to enter a detailed discussion—I hope that we shall not—we should probably find that there are as many meanings to those two words as there are Members in this Chamber tonight. Therefore, we believe that we should once again invite the Minister to help us to clarify precisely what is meant because local authorities rightly are subject to public supervision of their actions.

It is not inconceivable that one of the environmental pressure groups might choose to take a different view of what a local authority does in the context of the meaning of the two words "sustainable development". Having taken that view, they would, I believe, perhaps be entitled to call for a judicial review of the matter if they felt sufficiently strongly about the issue. Therefore, if we are not careful we could involve local authorities in considerable expenditure which really should not be necessary. If we can do anything at this or, indeed, any other stage of the Bill which will avoid that situation, we should do it. It is for that reason that I added my name in support of the amendment. I was not in collusion with my noble friend Lord Peyton. We find ourselves arguing the same point but from different perspectives. However, I believe, and very much hope, that the Minister will be able to help us.

As the noble Baroness, Lady Miller of Chilthorne Domer, pointed out, the decisions and actions of local authorities may well have repercussions well beyond their own boundaries. In particular, they may well have an effect on the infrastructure, climate and economic development beyond their own boundaries.

This clause merely provides that in reaching their decisions under this power, local authorities must have regard to the broader picture in relation to sustainable development. Having had that regard, they must take that reasonably into account. It does not say, as my noble friend Lord Harris perhaps implied, that were a decision of a local authority to come into conflict with the decision of another local authority, that decision would be overriden.

The Government, like those on the Liberal Democrat Benches, consider the objective of sustainable development to be very important. Once a local authority has taken a view as to how its actions would affect sustainable development, it must then act reasonably. Therefore, this provision writes into the decision-making process that local authorities must take into account sustainable development for the United Kingdom as a whole. It has no broader implication. We believe that it is important that that should be written in as part of the way in which local authorities should reasonably exercise the powers.

Before my noble friend sits down, I should be grateful for further clarification. For example, a local authority in London may wish to create a series of units for small technological businesses. That would seem extremely sensible in terms of the economic well-being of its own area. It might appear to be very good in terms of the sustainable development of its own area, but because of the nature of the businesses being attracted, it might have a serious effect on the future well-being and sustainable development of other parts of the United Kingdom.

I am concerned that the local authority might be required to carry out major research into the markets of the firms which it was encouraging to come into those units and that unless it had done so and could demonstrate that it had done so, it would be failing to take into account the implication; of sustainable development for the United Kingdom as a whole.

I am not against what my noble friend says is the objective of the amendment; namely, that we should look at the implications of sustainable development for the UK as a whole. But I am concerned that it might create the expectation of an enormous research effort going into what could be quite small decisions with relatively minor implications. I want to be reassured that in practice local authorities will not find that their use of the power is hamstrung by a requirement to carry out a major exercise in demonstrating whether or not sustainable development in the United Kingdom as a whole, or in different parts of the United Kingdom, is affected by the subsection.

Clearly, the interpretation of the clause is giving rise to concerns which I do not believe should exist. We are certainly not attempting to use the clause to override the ability of local authorities, as part of their own sustainable development, to engage in some degree of competition with other local authorities. That is bound to happen. We are saying that local authorities must have regard to the broad objectives of sustainable development in the country as a whole.

It is clear that further guidance will be needed, and we intend to issue guidance. We shall consult widely with bodies with which my noble friend Lord Harris is extremely familiar in order to reach consensus. But we believe that some reference to the objective should be made on the face of the Bill and I hope that the guidance will clarify the matter.

I thank my noble friend for the undertaking to issue further guidance. However, I hope that he will follow up the point made earlier by the noble Lord, Lord Dixon-Smith, because I have some sympathy for what he said. We all support the principle of sustainable development and wish to see it included as an objective in the Bill. Those of us who have served on local authorities know that such matters may become the subject of legal challenge by individuals or groups who very effectively use the processes of the law to delay and damage developments. It is right that local authorities should consider sustainable development but we do not want decisions to be hamstrung by a small group of objectors who use the processes of the law to cause delay. Perhaps that can be examined in relation to the point made by my noble friend Lord Harris.

We have had a very interesting debate. I have been able to control my own excitement and I now beg leave to withdraw the amendment.

moved Amendment No. 10

Page 2, line 8, leave out ("have regard to") and insert ("determine").

On the last amendment, I expressed concern that we might be creating a lawyers' playground and I thought that the noble Lord, Lord Dixon-Smith, agreed. He now seems intent on making that lawyers' playground potentially worse by requiring that local authorities determine or ascertain the effects of sustainable development on the United Kingdom. I suggest that that makes the clause even more of a potential minefield in terms of litigation. When the noble Lord listens to my noble friend's response, I am sure that he will rapidly wish to withdraw the amendment.

I am not even sure whether we are dealing with the amendment on the Marshalled List or that deftly corrected by the noble Lord, Lord Dixon-Smith, in the course of his remarks.

However, the position is as my noble friend Lord Harris indicated. What is proposed is a much more onerous requirement on local authorities to engage in precisely the degree of detailed research into specific proposals which my noble friend feared would hamstring local authorities. Like him, I thought that the noble Lord, Lord Dixon-Smith, was also concerned about that.

Clearly, we want local authorities to have regard to the broad objective of sustainable development. We do not wish to impose on local authorities a huge research task to ascertain, determine, or whatever, the precise effect on all other local authorities throughout the United Kingdom. That would be too much. I do not suggest that, and I hope that the wording on the face of the Bill does not suggest it.

I believe that the mischief lies in the words, "in the United Kingdom". The more I am told that there is to be guidance on the matter, the more nervous I become. I question—and I hope that the Minister will take this into account—whether each individual local authority will have to ascertain, determine or look at everything that is going on in the United Kingdom before it takes any decisions under this power. By removing the words, "in the United Kingdom", you remove the lawyers' paradise. You make a perfectly reasonable statement that local authorities should pay attention to sustainable development. At present it is almost like asking them to pay attention to sustainable development in Europe. The Government are making it nearly as bad by inserting the words "in the United Kingdom". Rather than adding another 15 pages to the large and voluminous guidance already issued, perhaps we should just omit those four words.

This amendment seems to trespass somewhat on the territory of environmental impact assessments that are already obligatory in certain spheres of local authority activity including planning applications. I am not sure how the amendment will affect the existing situation.

Perhaps it is in order for me to speak again. In part, I take the points made in relation to this matter. If sustainable development is to be looked at only within the area of a local authority, that will constrain the aim of the clause. Clearly, quite a number of decisions will affect at least enabling authorities and perhaps beyond. I do not believe that the amendment is intended to have quite the ramifications suggested by noble Lords. I am happy to consider what has been said in this debate and to look at whether there is a better way of dealing with the matter. I believe that noble Lords understand the objectives behind the clause and I hope that some anxieties have been allayed.

I am again grateful to the Minister for his reply. His words will become part of the record and, therefore, they will have validity and an importance beyond this Chamber. In that sense I am grateful to him. After a useful little debate, surprisingly, I am delighted to withdraw the amendment.

moved Amendment No. 11:

Page 2, line 9, after ("on") insert ("the health of persons in their area and").

I rise to speak in support of Amendment No. 12 standing in my name. The amendment requires local authorities, in exercising the new power relating to well-being, to have regard to the achievement of social inclusion in their areas. That is an important provision because I take the view that the creation of a socially cohesive community in a local authority area is a central part of the work of local government. Local government should be about delivering for all the people of the area represented by a local authority. As many local authorities have diverse areas, including extremes of poverty and wealth—many less deprived areas contain pockets of severe deprivation—it is critically important that a local authority in carrying out its functions, particularly in considering the exercise of these new powers, should try to achieve social cohesion. Local authorities should consider the social inclusion of people in such areas.

Social cohesion requires service delivery and the effective delivery of well-being for everyone in the area. In particular, it should require special efforts to be made to deliver well-being to those who suffer from deprivation. In practice, that is about making sure that the local authority delivers for all the people in that community, whether black or white, rich or poor, young or old. That seems to me to be a fundamental requirement. For that reason I believe that there should be an expectation that local authorities, in considering the exercise of these new powers, should have regard to their effect in relation to achieving social inclusion in their areas.

I take the view that this subsumes the implications of Amendment No. 11 in that a key part of social inclusion is to ensure that the health of all those in the community is taken account of and respected. I have heard the points already made in this debate. It seems that the matters of social inclusion and health go closely together. I hope that the Minister can take those matters on board and consider them at a later stage in the course of this legislation.

I speak to Amendment No. 14 in this group. It is designed to make local authorities, in particular, consider the impact of their decisions on their neighbours. I ask the Minister to consider this amendment seriously. It states:

"In determining whether or how to exercise the power under subsection (1), a local authority must have regard to the effect which the proposed exercise of the power would have on neighbouring authorities".

Of course, this is a simple and basic: matter: do unto others as you would that they do unto you. It is a simple exercise in "neighbourliness".

There is a serious purpose behind the amendment. In some circumstances, development in one area may have a dramatic effect on another. In relation to economic development, a small laboratory may potentially pose a major industrial accident hazard. We all know of such installations because they have to be inspected properly and they operate under strict regulations. In fact, if a local authority has such an installation within its boundaries, it is necessary to have a major accident plan to deal with the consequences of something going wrong. If there is an oil refinery, such as we have in Essex, major evacuation plans are put in place to deal with the consequences of something going wrong.

Such a disaster could occur, for the sake of argument, in a small laboratory working in the bio-medical field, causing a huge disease hazard. Again, if that happens a major plan must be involved. Such plans do not stop at local authority boundaries. In Essex we have a nuclear power station. If that went "bang", Ipswich and the county of Suffolk would also have to evacuate if the prevailing wind was blowing in its normal direction, to say nothing of a great deal of Essex and possibly a considerable proportion of Norfolk.

It may be said that those are extraordinary events. The big issues, which I used for illustrative purposes only, would normally be dealt with by somebody other than just a local authority. But when a local authority gives permission to a developer to develop a small industrial estate consisting of 20 or 30 units, it does not seek to control who goes into that estate. That is when problems can arise. Of course, the authority soon finds out because a laboratory of the type I described would have to be registered with the appropriate authorities.

That is not to say that local authorities should not permit that kind of development. We need that kind of development if the economy is to move forward. But as a matter of prudence, and indeed of neighbourliness—to go back to where we began—it would be wise if the local authority consulted the neighbours it placed in that situation. Amendment No. 14 is tabled with that in mind and I hope the Minister will consider it with slightly more favour than he has been able to dismiss the previous amendments.

It is with trepidation that I intervene among so many experts on local government. My experience is obviously many years out of date and was only that of an ordinary constituency Member of Parliament. But I do so because, at enormous expense, the statute book continues to swell more and more through the insertion of a number of quite unnecessary provisions. The main classes of unnecessary provision are twofold: first, line after line teaching grandmothers how to suck eggs; secondly, page after page of departmental standing orders. That is cumulatively at great expense, and cumulatively far more than the£105 million which so concerned Members of your Lordships' Chamber last Thursday.

At great expense, Amendment No. 11 seems to fall clearly in the first class; that of teaching grandmothers how to suck eggs. Of course, any local authority will have regard to the health of persons in its area. If it does not do so, the members are not suitable to be members of a local authority and are highly unlikely to be re-elected as such. The provision is entirely unnecessary.

Amendment No. 12 is barely more acceptable. Amendment No. 14 is arguable because it asks a local authority not merely to concern itself with its own affairs, but with the repercussions of its actions on neighbouring affairs. However, I feel obliged to venture to warn the Committee that such a provision is bound to encourage massive, expensive litigation. With those observations, I hope the Minister will look charily on these amendments, in the same spirit in which he looked on previous amendments.

I regret that in relation to these amendments I have to exhibit a degree of chariness. They are unnecessary and could lead to confusion.

Reference to having regard to sustainable development and to social well-being subsume very much the matters with which my noble friend Lord Harris and the noble Baroness, Lady Thomas, were concerned. We do not therefore need a further specific amendment in relation to health or social exclusion. Clearly the Government are concerned about social exclusion, health and well-being, but spelling them out in this way is not necessary. There is no direct read-over from the GLA Bill, where we were dealing with a new authority with strategic powers. Here we are talking of the duties, when exerting their power, of all local authorities.

Clearly it is important that local authorities, in exerting their powers, pay some attention to their effect on neighbouring authorities, as I said in the previous debate. That is integral to sustainable development. We shall need to issue some guidance in that area. Whether or not that is teaching grandmothers to suck eggs, some guidance is probably necessary, though not on the face of the Bill. We shall also return to this issue of neighbouring councils under Amendment No. 17.

Therefore, while I understand the spirit behind this group of amendments—to which I am sympathetic—I do not believe they fulfil those objectives. I hope therefore that the amendment will be withdrawn.

I am devastated to be the target of the extremely skilled advocacy of the noble and learned Lord, Lord Simon of Glaisdale. I would have done almost anything to avoid such condemnation. Nevertheless, I am not entirely convinced by the Minister's response. I shall read carefully what he said and consider the context in which the clause appears in the GLA Bill. In the mean time, I beg leave to withdraw the amendment.

moved Amendment No. 13:

Page 2, line 10, at end insert—

("( ) In determining whether or how to exercise the power under subsection (1), a local authority must have regard to the effect which the proposed exercise of the power would have on equal opportunities and on the promotion of harmonious race relations in that local authority's area.").

I rise to speak to Amendment No. 57, which is grouped with the amendments tabled in the name of the noble Lord, Lord Harris of Haringey. In doing so, perhaps I may say that I agree with all that the noble Lord said. This is not the stage at which we argue whose amendment is best. I believe that we are trying to achieve the same objective. Amendment No. 57 encapsulates all that the noble Lord, Lord Harris, is trying to achieve, although it goes a little further in tackling all areas of discrimination.

I know that the wording of Amendment No. 57 will be very familiar to the noble Lord, Lord Harris, to the Minister and, indeed, to all of us who spent many happy hours working on the GLA Bill, as it was at that stage. We debated this issue at every stage of the legislation and made a little progress each time until we reached the Third Reading when the Minister said:

"The outcome of those discussions has been in my view to alter the approach of the Government to the matter and to improve the provisions".—[Official Report. 1/11/99; col. 584.]

So we have built on that experience and we have taken the amendment, almost word for word, from Clauses 33 and 404 of what is now the Greater London Authority Act. Having been so moved during the passage of the GLA legislation, I hope that the Minister will be moved to act rapidly today rather than making us wait three months before we achieve the same objective.

For all the reasons outlined by the noble Lord, Lord Harris, it is important to have a duty imposed on all local authorities similar to one imposed on the GLA. Amendment No. 57 suggests that it should be a duty of all local authorities to have due regard to the principle of equality of opportunity for all people. It requires each local authority to have regard to the need.

"to promote equality of opportunity",

but specifically mentions,

"persons irrespective of their race, sex, disability, age, sexual orientation or religion".

Those are the definitions of discrimination used within the European Union. That is why they appear in the GLA Act and why I believe them to be appropriate for all local authorities. Finally, for the reasons given by the noble Lord, Lord Harris, the amendment would require each local authority to publish a report each year stating what it had done to further those aims.

As we debated this issue so many times and with such eventual success only a few months ago, I am confident in speaking to the amendment now—and as I shall be when moving it at the appropriate time—that the Minister will feel able to accept it. Indeed, he may recognise the wording, as he proposed some of it himself. If that is rushing things a little too much and if the Government do not feel at this stage that they want to accept the amendment, I hope that the Minister, who, I know, takes these issues very seriously, will at least tell us how they propose to tackle the issue during the passage of the Bill. We shall certainly be returning to it if necessary, as I am sure will others.

When the Bill leaves this Chamber it needs to contain a proper, wide-ranging equalities clause. I suggest that this is the clause, borrowing as it does from a duty already imposed on one authority. I trust that the Minister will respond positively to the intentions behind this group of amendments.

Perhaps I may declare my interest at this stage as I am a member of a local authority. In case I happen to intervene on a few more occasions, I ask that that be recorded and noted for the rest of the proceedings on the Bill.

Basically, I wish to comment on the amendments that include reference to annual reports. Local authorities are falling under the weight of having to make reports. Therefore, can I ask that this is not made a specific issue. Perhaps something can be included in the annual reports that already have to be produced. But, please, let us not have another one.

I recognise many of the arguments that the noble Lord, Lord Tope, and my noble friend Lord Harris have advanced. Although I accept that it is important that the power of well-being and the rest of the reform of local authorities encapsulated in the Bill should clearly have regard to equalities and to the effect on race relations within the authority, I am not sure that any of the amendments in this group sets out the appropriate way forward.

I am not sure that we should directly link the question of the promotion of race relations and equality to the physical exercise of the power of well-being, as suggested by Amendments Nos. 13 and 33. Moreover, Amendment No. 57 replicates in part Section 71 of the Race Relations Act 1976. However, it only does so in part and, therefore, there is an ambiguity as to how it applies to local authorities compared with other public authorities. Again, that is a discussion that we had in the GLA context.

As certain Members of the Committee, I expect, are aware, the Government will be publishing a consultation paper within the next few months, which will look at equality issues. That paper will discuss placing a general duty of equality on all public sector organisations. Therefore, it is difficult for me to agree to an amendment to the Bill inserting a form of words relating to equality that might well be generalised as regards all public sector authorities at a later stage.

Nevertheless, I understand the breadth of feeling within this area and take note of the point made by the noble Baroness, Lady Hanham, regarding yet another annual report, along with other concerns. However, I think it would probably be better for me to consider whether there is a more appropriate way of achieving the objectives to which noble Lords have referred. Alternatively, I may indicate at a later stage that it would be better for us to proceed in relation to public sector authorities in general rather than specifically in terms of this Bill. I undertake to comment on the matter at a later stage in the proceedings.

Before the noble Lord, Lord Harris of Haringey, responds to the Minister's comments, I ask the Minister to understand—from the tone of his response I am sure that he does understand this—that many of us within this Chamber and elsewhere hope to see the Government build on the good example that they set in relation to this issue—with all-party consensus—in the Greater London Authority Act. It does not seem to me a complete answer to say that the matter is being considered in regard to all public sector bodies. We now have an example in legislation of how to deal with the issue.

Following their consultation the Government may propose changes to the Greater London Authority Act. They may also propose changes to what will be the Local Government Act 2000. In the context of the new powers that are proposed for local government—which are welcome—it is important to set down provisions with regard to the importance of equality, which are generally accepted, on the understanding that peripheral points arise with regard to the mechanisms that may be established. That is an important statement for the Government to make and it is one that we should like to see on the face of this Bill when it reaches the statute book.

I am grateful to my noble friend for his reply. However, I am not entirely satisfied as yet with what he has said. It is pleasing that the Government accept the importance of the amendments that have been proposed. It would be helpful at a later stage to be given an indication of how the Government feel that it would be appropriate to deal with these matters. I accept the points that have been made by the noble Lord, Lord Tope, and the noble Baroness, Lady Hamwee, as regards the precedent contained in the Greater London Authority Act. That precedent was much discussed in amendments that were tabled in Committee and at every stage of that measure in this Chamber. As a result of that, a provision emerged which distilled the objectives which we were all trying to achieve. Those objectives apply just as much to individual London boroughs as to individual local authority districts and individual county councils. I should have thought that the same principles could be included in an amendment to this Bill which would achieve those objectives.

I was interested to hear the comments of the noble Baroness, Lady Hanham, on annual reports. I accept that a proliferation of annual reports does not necessarily achieve the purpose of informing the local community. However, if local authorities were required to comment on this matter in their other annual reports, or in an appropriate annual report, that would meet the requirement.

I note also what my noble friend has said about a consultation paper that is to be produced that concerns a wider duty with regard to public services in terms of the matter we are discussing. That would clearly be valuable. However, I submit—I hope that my noble friend will consider this—that local government is central to the delivery of so many public services in a local area. The whole philosophy of this Bill concerns community leadership. We shall debate the principle of community planning and other matters at a later stage. If there is to be the expectation that local government will offer community leadership, there should be an expectation—perhaps in advance of the wider consultation—that local government should promote equal opportunities and create harmonious race relations. Whatever form that provision may take, it should be included on the face of the Bill. However, having listened carefully to what my noble friend has said, I shall withdraw the amendment at this stage. I look forward to hearing from the Minister on this point at a later stage in the passage of this Bill. I beg leave to withdraw the amendment.

moved Amendment No. 15:

Page 2, line 19, at end insert—

("( ) For the purposes of subsection (4), a person includes another local authority.").

I have some sympathy with the proposal that local authorities should be able to co-operate with other local authorities. However, I hope that the noble Baroness who has moved the amendment which stands in the names of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Tope, could help me at least, and perhaps also the Committee, as regards the implications of substituting or including in the definition of "person" a local authority in connection with Clause 2(4)(b) and (f). It seems to me that to make a specific provision for one local authority to be able to give financial assistance to another and to,

"provide staff, goods, services or accommodation"

to another local authority is fraught with difficulty. It is a matter that I believe would distort the already imperfect financial regime and national support for local authorities. I cannot support the amendment as it stands at present. I hope that at the end of the debate we can discuss how co-operation can be achieved between local authorities, as I believe that it can—Clause 2(5) goes some way towards underlining that—without the specific reference to financial support of one authority by another.

Amendment No. 39, which stands in my name, is grouped with Amendment No. 15. It deals with what I can describe only as a parallel situation although it is in fact rather a different situation. It would not have mattered if the amendments had not been grouped together. However, I am quite happy to discuss them as grouped amendments.

Amendment No. 39 relates to Clause 4, which deals with strategies for promoting the well-being of local authorities, the subject under discussion. Subsection (2) states:

"In preparing any strategy under this section, a local authority—

(a) may consult or seek the participation of such persons as they consider appropriate".

My amendment seeks to insert the words "or organisations".

The question arises as to whether "persons" are or can be organisations or whether they might be deemed to be singular. I have always taken the view that "persons" were persons, referred to on the whole as individuals, and that "organisations" can cover everything from businesses, to pressure groups, to residents' groups, to tenants' groups, and any other group of which we can think.

The insertion of the words "or organisations" will help the Bill quite considerably. It is for that reason that I have tabled Amendment No. 39.

I understand the intention behind Amendment No. 15 and Amendment No. 39, which is grouped with it. However, I hope that I am in a position to reassure both the noble Baroness and the noble Lord, Lord Dixon-Smith, that the amendments are not necessary to achieve the objectives they have outlined.

The term "person" is a well-established legal shorthand and is defined in the Interpretation Act 1978 to include a body of persons corporate or incorporate. So, of course, local authorities will be able to provide the whole range of assistance envisaged in paragraphs(4)(a) to (e) to other local authorities. The only effect of these amendments would be to cast doubt on the scope of the term "person" throughout the rest of the Bill.

I hope that the noble Baroness is reassured that the clause, as drafted, already meets her objective in this area and that she will therefore withdraw her amendment. I hope also that the noble Lord, Lord Dixon-Smith, will not feel it necessary to move his amendment.

I thank the Minister for her reply. It is very reassuring and I am glad that we now have a clear definition from the Government of the legal meaning of the term "person".

I shall not dwell on the issue at length but I do not believe that the amendment is unnecessary. Although at the best of times local authorities work together unchallenged, perhaps in times of hostile opposition to such co-operation from within their own ranks there might be questions as to whether or not they are giving financial support to each other, or perhaps questions about arrangements whereby staff move between the two authorities. In such cases, it is necessary to have a very clear track of decision-making and accountability to ensure that they are not informal, casual arrangements but that they are properly accounted for by each authority. I beg leave to withdraw the amendment.

moved Amendment No. 17:

Page 2, line 23, at end insert ("and, prior to the exercise of the power outside their own boundaries, they shall consult, and receive agreement from, the authority within whose boundaries the power is to be exercised").

The Bill allows local authorities to pursue actions which would have an effect outside their areas. We obviously would not expect them to do that without consultation and without adopting a sensible and responsible attitude. Local authorities already have powers to act outside their areas—economic development powers, housing powers and, in some cases, education powers—so there are precedents.

We need to make it clear that we expect local authorities to co-operate. On the other hand, we do not want to be over-prescriptive on the face of the Bill. We would not want to be quite as limiting as the noble Lord is tempting us to be. None the less, I am happy to go away and to look at the matter in order to see whether there is a better way in which we can make it absolutely clear that local authorities should act in co-operation. I know that there are anxieties about that and we should like to be as reassuring as we can be. If the noble Lord will accept that reassurance, we can come back to the matter.

I am grateful to the Minister for the words he has used; they are extremely helpful. As I said, it is a probing amendment. I am glad that he acknowledges that there is an issue and I am happy to beg leave to withdraw the amendment.

moved Amendment No. 18:

Page 2, line 24, leave out subsection (6).

I regret to say that on this occasion the noble Lord has not convinced me with his argument. The point of the power of well-being is that it makes a broad range of activities available for local authorities to promote. We have set out some of those activities in Clause 2(4), but that is not intended to be an exhaustive list.

If we were to accept Amendment No. 18, it could potentially cast significant doubt on the scope of the power. We need to make it absolutely clear that Clause 2(4) is simply indicative and not exhaustive. It is included principally to remove some of the doubts that currently exist about some of the activities referred to in Clause 2(4).

There are restrictions on the power in subsections (1) and (2) of Clause 3, but we do not wish to draft the power in such a way that it is unduly restricted. Subsection (6) leaves no doubt that the power is wide. Its deletion would unnecessarily restrict the power and damage the purpose of the Bill. For that reason, I hope that the noble Lord will not pursue this amendment.

I am grateful to the Minister for that reply, which I shall study with care. Should I need to return to the matter, the noble Lord will find out in due course. In the meantime, I beg leave to withdraw the amendment.

moved Amendment No. 19:

Page 2, line 27, after ("any") insert ("specific").

Unfortunately, the Government cannot accept Amendments Nos. 19 and 20. The wording of Clause 3(1) is very clear as to which restrictions in other legislation will limit the scope of the well-being power in Clause 2.

Local authorities may not use the ell-being power to get round any prohibition, restriction or limitation contained in any other enactment; in other words, any prohibition spelt out within another piece of local government statute. These are restrictions that have been expressly laid down by Parliament as necessary checks on authorities' various activities.

These checks may take a variety of forms. For example, some statutes expressly prohibit an authority from undertaking a particular activity. Those prohibitions will apply also to the well-being power. In other cases, local authorities are expressly restricted in the action they may take. For example, conditions may be attached which restrict authorities' freedom of action by requiring them to do things in a certain way. Finally, powers may be limited by the express requirements of other legislation. For example, the requirement to achieve best value under the terms of the Local Government Act 1999.

I suspect that it is these express, rather than specific, prohibitions and restrictions that formed the basis for the noble Baroness tabling Amendment No. 19. This amendment would not add anything to what is already enshrined in the Bill, nor would a reference to express restrictions. Both are unnecessary and would be more likely to confuse the very objective that the Government and the noble Baroness want to achieve.

The use of the words "prohibition", "restriction" and "limitation" is purposely broad. It is supposed to avoid future legal argument about whether a condition—expressly stated in other legislation—is a "restriction" or a "limitation". I hope that answers the question of the noble Baroness. It appears that the noble Baroness is seeking a definition as to why the terms were used in previous legislation. I fear that that could very considerably lengthen my reply, which nobody would wish.

If accepted, Amendment No. 20 might open up the scope for such arguments, and as such we feel unable to accept it. With these explanations, I hope that the noble Baroness can be persuaded to withdraw Amendment No. 19 and not to move Amendment No. 20.

I can tell the Minister that I shall withdraw Amendment No. 19 because her response has not surprised me. However, I reiterate my concern that, given the increasing pace of legislation, Parliament should be clear on how new legislation affects previous enactments.

As regards Amendment No. 20, I remain unclear about the difference between a restriction and a limitation. Here I am expressing not only a lack of understanding on my part, because this point has been raised by local government bodies. I take the Minister's point that a long explanation might prove rather tedious for the Committee, but I believe that it is an important matter. I wonder whether I may ask the noble Baroness to write to me following this stage. It is a matter of considerable concern, and I should not like to let the concern linger if there is a way of dealing with it.

We shall be delighted to write to the noble Baroness.

I thank the Minister for that response. I beg leave to withdraw the amendment.

moved Amendment No. 21:

Page 2, leave out line 29 and insert ("passed or made after the enactment of this Act.").

As we have always indicated, we wish to give local authorities a fairly wide-ranging power in relation to well-being. Nevertheless, we have always indicated that it would not be a power to do absolutely everything and anything. There have to be some safeguards. Those safeguards must include areas which have already been limited by preceding legislation. That is why Clause 3(1) keeps in place those restrictions which have been laid down by Parliament, subject to something else I wish to say in a moment.

Were we to go through all the areas of previous legislation which qualify or restrict the role of local authorities, I suspect that the kind of schedule the noble Baroness is looking for would be somewhat lengthy. Therefore I think we have to rely on this being expressed in general terms. One very obvious provision that her deletion would remove is the restriction on local authorities being able to publish material of a party political nature. Clearly that is not the intention of the power of well-being. Likewise there will be more detailed aspects which exist to restrict local authority activity within existing legislation.

We do recognise the need to remove some of this legislation. That is indeed why we have included the powers in Clauses 5 and 6 for the Secretary of State to do so. We are already engaged in a raft of initiatives to identify suitable candidates for removal from the statute book. We believe that it is only right that any proposals to legislate in this way to remove those restrictions must be scrutinised by Parliament rather than, as the amendment of the noble Baroness would do, simply wipe out all previous legislation and start from day zero.

On reflection I think the noble Baroness, Lady Hamwee, may feel she does not wish to pursue this amendment and will recognise the importance of retaining this cross-reference to existing legislation.

I am sure the Minister will understand that one has to find a device to ask the question, even if one does not have particular faith in one's own drafting. It is not an amendment that I would wish seriously to see incorporated in the final form of the Bill. However, it has enabled me to make the point that this might be an occasion for guidance. No doubt there will be occasions when local authorities will be unclear as to whether or not they are already prohibited by existing legislation from pursuing the power which they were so happy to have received a few lines earlier in the Bill. I am not sure whether I have taken the argument further, but I have only taken four minutes over it. I beg leave to withdraw the amendment.

In calling Amendment No. 22, I should point out that, if the amendment is agreed to, I cannot call Amendments Nos. 23 or 24.

moved Amendment No. 22:

Page 2, line 30, leave out subsection (2).

I must congratulate the noble Baroness, Lady Hamwee, on getting to the Public Bill Office with this amendment before we did. As a result, her name appears, quite properly, to lead on the amendment. Nonetheless, it is an amendment which we too have tabled for precisely similar reasons, although I shall hope to use somewhat different arguments to support the case for removing subsection (2) of Clause 3 from the Bill.

We are back in the position that we were in on the Greater London Authority Bill. That Bill gave the Greater London Authority powers and then the Government immediately prescribed what I described as an "anti-power". Here we are again. The Bill gives local authorities the power to promote well-being—it is not an absolute power of general competence but it goes a long way towards that—and then in the next clause it says, "Well, you have this power but you cannot spend anything on this matter". One might think that that is what the clause means, but that is not what it says. It says that a local authority may not raise money, whether by precept, borrowing or otherwise.

The noble Bareness, Lady Hamwee, referred to one or two benefits which local authorities in rural areas might wish to provide, such as community shops. A local authority might well wish to provide community buses under the power. The ones that I know are run by parish councils, which operate under a different remit. With this power I can see local authorities wishing to undertake a number of such actions. We would wish them to undertake such actions.

It occurred to me that in subsection (2) the Government are somewhat cynically seeking to control what will happen. It is an easy presumption to make that if an authority cannot raise money, whether by precept, borrowing or otherwise, and cannot spend anything, it cannot do very much at all. However, on reflection, I came to the conclusion that that is not so, which gives me even more reason to believe that the clause should not be in the Bill.

A cynic might say that with this power the Government are seeking to control what is spent by local authorities, by trickling money down to them through the revenue support grant. That may be what is in the Government's mind. But the revenue support grant is, largely speaking, a general grant. A local authority has the power to do with a large chunk of the revenue support grant what it chooses to do with it. It could very well choose to spend some of the general part of the revenue support grant on exercising the power under Clause 2. If that caused it to have marginally to raise its precept to deal with its normal line of business, that would be perfectly proper. I see nods of agreement coming from one or two noble Lords who are members of local authorities. One or two of them are already thinking that that is how they will have to operate.

During the proceedings on the Greater London Authority Bill we debated this issue almost to the point of exhaustion. The Government were not inclined to give way then and so I am not hopeful that they will give way now. But I think that they should. They have plenty of other powers by which they can constrain local government expenditure if that is required. In the previous Session we passed a Bill specifically to give them that power. We resisted it then and I think that we should resist it again on this occasion. I cannot see that subsection (2) adds anything useful or constructive to the Bill. The worst aspect of it is that it will treat councils and councillors as if they are babes, as if they are irresponsible and as if they are not to be trusted. Worse than that, it treats their electorates with the same contempt. Councillors are responsible to their electorates for their actions. Their electorates can discriminate; they are discriminating; and they know how to take action if local authorities do not behave responsibly.

The worst aspect of subsection (2) is that it destroys the amour propre of local government and local communities. If one wants people to behave responsibly, one must make them responsible. If one wants to make them responsible, one must take Clause 3(2) out of the Bill and let them make their own judgment. I am happy to support the noble Baroness, Lady Hamwee.

Perhaps I may speak to my amendment, Amendment No. 23, which is in the same group. My amendment expands on what has already been proposed by the noble Baroness, Lady Hamwee, and on some of what has been said by the noble Lord, Lord Dixon-Smith. Where one has a power of well-being, the power to charge must be a sine qua non of that. My amendment would address as well the problems which have occurred since the House of Lords' decision in 1992 in the case of R v. London Borough Richmond-upon-Thames ex parte McCarthy and Stone—I am sure that all noble Lords will be familiar with it—that it was unlawful for a local authority to charge for planning advice. Although there is a power for local authorities to give planning advice, in relation to which they make take a substantial amount of time and have detailed discussion, they may not charge for that time. That example could be relevant to any aspect of what has been included in Clause 2(1) and the powers of competence and well-being.

The decision in that case has resulted in doubts as to whether local authorities can charge for other matters, such as commercial filming in their streets—something which they may want to do—inspection of works by statutory undertakers and supervision of parking bays; for example, the suspension of parking bays for contractors. My amendment would enable councils to collect reasonable payments, as the noble Baroness, Lady Hamwee, suggested, for work done under these clauses.

It is reasonable to give local authorities the opportunity to charge for what they do. Although under statute they are able to charge for some services, they cannot charge for all. I have cited some of those services to the Committee. Although what I have suggested may stretch what is proposed just a trifle, I wonder whether it could be taken into account.

I have some sympathy with what has been said by the noble Baroness, Lady Hamwee, and the noble Lord, Lord Dixon-Smith. The noble Baroness referred to the tight grip on local government. I should remind the Committee that the tight grip is loosening a little, but it is perhaps not quite loose enough yet. It is not the purpose of the Bill to review the arrangements for local government finance. I am confident that my noble friend the Minister and his colleagues in the Department of the Environment, Transport and the Regions are considering that matter and will report at the end of the three-year period.

In seeking what are proper restrictions on the use of the powers of local authorities, we should ensure that we are not too prescriptive. I share the concern of the noble Lord, Lord Dixon-Smith, when he says that local authorities are acting democratically and in public. I am particularly concerned by the words "or otherwise". If the Government seek to restrain the raising of money by precepts or borrowing, I think it is proper to do so. There may be other areas which the Government seek to restrict, but rather than adding the words "or otherwise", they should come clean now and list what those restrictions will be.

In recent years, when the party opposite was in government, local authorities were forced to get used to a certain amount of creativity as regards funding. But there are concerns, particularly given the function of well-being, that additional services that we begin to provide should be charged on a proper basis. We already charge for certain services that we provide, and we need to understand to what extent the restriction will apply. If there is joint activity with another partner, to what extent will partners be able to fund into that? Is that raising money? What about European funding, and so on? The phrase is rather too much of a catch-all. I should welcome the Minister's assurance that there could be greater precision in the limitation.

I support my noble friend Lord Dixon-Smith. In a recent debate, the noble Lord, Lord Harris of Haringey, talked about developing a small industrial site, which could be an important issue in this area of development and promoting the economic well-being of an area. The inclusion of "otherwise" could mean that rents could not even be charged for the building of the properties. The whole area is of great concern.

Earlier today, we debated the extra powers being given to local government. I feel, as most speakers have said, that the provision constrains our powers so much that perhaps the power might not be worth having. I support my noble friend Lord Dixon-Smith in his call for the removal of the subsection.

There is no limit on what local authorities can spend under the well-being power, but the point of the power is to give them discretion. In answer to the noble Baroness, Lady Hamwee, the proposals are neutral; all we are saying is that authorities may not use the power itself to raise money.

The noble Lord, Lord Dixon-Smith, raised the question of whether this was a kind of "anti-power". It certainly is not. Local authorities have plenty of specific powers which allow them to raise money, and there is nothing to stop them using those powers in tandem with the well-being power.

The noble Lord is very effective in putting across the case of someone who was not a gamekeeper and has not become a poacher. All I can say is that he walked, talked, lived, supported and encouraged others to support the gamekeepers during his time. I pay tribute to the fact that the noble Lord challenged his own government on parts of their policy relating to expenditure and local authorities. However, he cannot deny that there is at least a little of the gamekeeper in his history, as I believe the noble Lord, Lord Hanningfield, too, would readily accept.

The limitation in subsection (2) merely stops local authorities using the well-being power to raise money, whether by precepts, borrowing or otherwise. There are good reasons for that, which mean that the Government cannot accept Amendment No. 22 or Amendments Nos. 23, 24 and 25. We do not believe that authorities should be able to use the well-being power to impose new taxes on individuals or business. The power to tax should be subject to the specific approval of Parliament. Arguably, Amendment No. 22 would place that decision in the hands of local authorities.

Nor do we see merit in allowing authorities to use the well-being power in itself as a means of borrowing. There are specific terms and conditions around local government's power to borrow. There are two clear reasons for such controls, as my noble friend Lord Smith generously indicated. First, they ensure that authorities act prudently, so that local communities are not faced with an excessive burden of debt charges in future years; secondly, they help to ensure that the Chancellor's objectives for the national economy are achieved—both the "golden rule" that borrowing should only be for investment, not for day-to-day spending, and the rule that public sector debt should be kept at a prudent and stable level over the years.

However, we are keen to look for alternatives to the present system of controls on local government capital finance, which would continue to meet the same broad prudential and macro-economic objectives but in a simpler and less restrictive way. We are exploring that with the LGA as part of our wider review of local government and it will be included in this summer's Green Paper.

My noble friend Lord Smith, the noble Lord, Lord Hanningfield, and the noble Baroness, Lady Hanham, rightly emphasised the difficult issues and complexities that surround the issue of charging. We accept that the current basis on which authorities can or cannot charge for the services that they provide is confused and unduly restrictive. The problems were clearly highlighted in the recent report of the Audit Commission, The Price is Right: charges for council services.

In response to the noble Lord, Lord Dixon-Smith, and the noble Baroness, Lady Hamwee, the Government are determined to place charging on a more rational footing. To that end we are looking at the issues as part of the wider review of local government finance that is under way. As I said, local government is fully involved in the process. I believe that representatives of the LGA are meeting tomorrow with the department as part of a joint task group examining the issues around local authority charging. In response to my noble friend Lord Smith, we are determined to make rapid progress on this issue and to bring forward proposals in the local government finance review Green Paper this summer.

In response to the noble Baroness, Lady Hamwee, let me make it absolutely clear that the well-being power does not prevent local authorities from charging for services. They simply cannot use the power itself as a means for doing so. Under Section 150 of the Local Government and Housing Act 1989 the Government can make regulations to allow authorities to charge for services that they provide, although that power cannot be used in respect of some specified functions, including education in schools and fire-fighting. Local authorities can continue to use their powers under the Local Authorities (Goods and Services) Act 1970 to charge for services that they provide to other public sector bodies.

I apologise for responding at length. I hope that it has been helpful to set out the way in which the Government intend to tackle as a matter of urgency some of the issues raised in the debate. I hope that, with the assurances that I have given, the noble Baroness will be persuaded to withdraw Amendment No. 22 and that Amendments Nos. 23, 24 and 25 will not be moved.

Before the noble Baroness sits down, perhaps she will accept that we are stepping on thin ice when we get into the business of metaphors. "Poacher turned gamekeeper" is all very well, but I prefer "pots" and "kettles". If I have a touch of the gamekeeper in my history, the noble Baroness has a considerable amount of the poacher in hers. I have tried very hard to see whether I can add a fourth metaphor so as to have real mixture, but I cannot.

I feared for a moment that the noble Lord was going to look at me and in all innocence say, "Set a thief to catch a thief".

I am grateful to the noble Baroness for her response. As vice-chairman of the Local Government Association I am involved in some of the discussions that are taking place. My understanding is that some of these matters will take some years to deal with, and that there will even be legislation before there is any new kind of local government finance Act. Is the noble Baroness saying that it may take that long to sort out the charging policy? If so, the wording in the clause as presently drafted needs to be examined. We want this Local Government Bill to be actionable before very long. Can the noble Baroness give a possible timetable on the local government finance review?

I informed the Committee earlier that the Government hoped to bring forward proposals in the summer.

I cannot think of any suitable metaphors. I am sure that comments can be made about choosing friends but not relations, but I cannot work out what they are. As to charging, I am very familiar with R v. LB Richmond-upon-Thames ex parte McCarthy and Stone. I believe that the charge was only £25 per hour. I always understood the former Department of the Environment, now the DETR, to be very sympathetic to the problems that faced local authorities as a result of the restrictions on charging. Like the noble Lord, Lord Hanningfield, I believe that it would be sad if the opportunity was not taken to correct the position. There appears to be little opposition to the underlying proposal.

The Minister has confirmed that Clause 3(2) does not make any difference either way, and that is the assurance that I seek. However, having listened to the debate, doubt has been cast on it—I am sure the Minister understands that I do not attack her integrityߞby the words in parenthesis. If the position is neutral and Clause 2 does not of itself allow a local authority to raise money or restrict it so doing, why is it necessary to say,

"whether by precepts, borrowing or otherwise"?

Clearly, those words trouble Members of the Committee who have sought to understand the thrust of the provision. I do not ask the noble Baroness to comment further on that matter, but at a later stage I shall seek to table an amendment to remove the words in parenthesis. If the provision is neutral, those words appear to be unnecessary. At this stage, I beg leave to withdraw the amendment.

Is it the Committee's pleasure that the amendment be withdrawn?

Not-Content.