Previous Section Home Page

Ms. Short : Is the hon. Gentleman aware that one Birmingham citizen, who I believe lived in his constituency, has died as a result of the barriers being erected in advance? It was the Birmingham coroner who called for changes to be considered when building barriers on the city's super prix route. Can the hon. Gentleman assure us that the fact that someone has died means that the coroner's remarks have been taken into account and that people's lives will not be put at risk in future?

Mr. King : The hon. Lady has probably given a clear indication why we are making some of our proposals. It has been disruptive to install the barriers in the way that we have because of the time restraints. That has required contractors in vehicles to occupy the highways and lift the ARMCO barrier into position in a way that we do not like. By spreading out the time available, one can have fewer people working for a longer period, which will have a less disruptive influence on traffic that is on the highway at the same time. The hon. Lady has reminded us of the tragedy. How directly attributable that was to working on the super prix circuit--

Ms. Short : The coroner said that it was.

Mr. King : Then I bow to his thinking. I believe that our proposed changes to the Bill will reduce the incidence of any danger to the public. That is one of the driving elements behind the changes.

Ms. Short : Has the hon. Gentleman made up that answer on the spur of the moment, or does he really know that safety has been taken into account? It is a serious matter when a life has been taken and the coroner has said that it was due to the way that the roadworks were being carried out. The gentleman who died was Mr. Taylor, of Staple Lodge road, Northfield, so I presume that he was the hon. Gentleman's constituent.

Will the hon. Gentleman assure me that safety has been taken into account in reorganising the way in which the

Column 258

barriers will be erected? If not, is he just saying that off the top of his head, without knowing whether safety has been properly considered?

Mr. King : The hon. Lady is right to be concerned. I say again that the entire exercise of extending the time in which engineering work will take place is designed to reduce the inconvenience to road users and to local people. Because we are reducing the inconvenience, that must imply that we are intending to do so in as safe and as efficient manner as we can.

One cannot guarantee that somebody will not have an accident because of work that is taking place. In all honesty, no one can say that. However, steps are taken and will be taken to minimise that possibility. I have no doubt that, as a result of what the coroner has said about that accident, the city engineers and those responsible for erecting the circuit will pay particular attention to ensuring that such an accident is not repeated. No one would want anybody to be the innocent victim of what is a strong social event and an entertaining spectacle.

Schedule 2 outlines police costs. The 1985 Act gave the West Midlands police full indemnity for their costs arising in connection with the race. That is unique, because the costs include the policing costs outside the sporting area as well as inside. The costs also include planning and the staffing of police headquarters. Birmingham city council has no influence over the level of policing, as that is an operational decision of the chief constable. As a consequence, extremely high costs have been carried by the city council--they have averaged much more than £100,000. The city council feels that that is unfair, as the figure represents about a quarter of the total police bill to football clubs for all matches played in the west midlands in one season.

One of the problems has been that, because of the stated requirements, some of the costs have been much higher than originally estimated way back in the early 1980s. During the three years of the event, however, the police have reported only a handful of incidents leading them to take action. The city council is currently discussing the matter with the police authority, and it hopes to reach agreement leading to an amendment being put to the Committee, should the Bill receive a Second Reading.

The city council would also like the House to consider the insurance costs. Section 20 of the 1985 Act establishes strict liability for personal injury or damage to property without proof of negligence. That is unusual, as negligence normally has to be proved. The consequence has been an extremely high insurance premium of around £200,000 a year. The council originally wanted to repeal this section of the 1985 Act, because experience of three years racing suggested that it was unjustified. However, it has noted the concern of local residents, businesses and hon. Members and it will put an amendment to the Committee to reinstate strict liability without proof of evidence for residents, spectators, businesses and statutory undertakers. That cover will not include drivers, their teams or associated personnel involved in the super prix, including the media. The latter will need to prove negligence. It is felt that, in any case, those in the latter category are well aware of the risks they take at this sport.

It is important to mention the accounting procedures that the city council has adopted over the years, given their importance to the perception of the super prix as a profitable operation. I am sure that other hon. Members

Column 259

will also want to comment on this. The 1985 Act placed upon the city council the obligation to make a cumulative profit over five years in order to retain its powers to run motor racing. In addition, the Act obliged the city council to adopt commercial accountancy procedures rather than local government accountancy procedures. Section 14 of the 1985 Act refers to that and was inserted following objections to the Bill in 1985.

The city council was advised as to the proper presentation of its motor race accounts by its auditors. Because of the unusual nature of commercial accounts within a local government setting, the city council sought counsel's opinion on the presentation of the accounts. It has been guided by that advice. It was right for the city council to comply with the advice of its auditors.

The financial outcome is as follows. In the report to the general purposes committee of Birmingham city council on 3 October 1984, the city treasurer reported his estimates of costs and revenue for the motor race. The estimated costs ranged from £1.35 million to £1.8 million and the estimated income was £1.35 million. The treasurer concluded :

"From a prudent financial viewpoint it is considered that the first motor racing event on the streets of the city may not generate large profits. It is anticipated that a similar position would result from the second or third events Whilst the promotional benefits of staging road races cannot be quantified it must be accepted that there is immense potential. It is thus suggested that, if a loss were to be made that it would be right to judge such as part of the overall costs of promotion and publicity of the city."

That was before the original Bill came to the House.

In 1986, the costs were £1,530,000 ; in 1987, they were £1,561,000 ; in 1988, the provisional costs--the accounts have not yet been audited--were £1,213,000. Those figures are within the estimates set. The income in 1986 was £898,000 ; in 1987 it was £1,122,000, and in 1988 it was £1,213,000--that figure may vary by £1,000 either way. In other words, the city lost money in years one and two but broke even last year. Those are the figures if one accepts or adopts local government accounting methods. If one considers those figures in the light of commercial accounting methods, as necessitated by the 1985 Act, they reveal that in 1986 the city lost £173,051 ; in 1987 it made a profit of £76,557 and in 1988 it made a profit of £565,494. The cumulative figure for the years to date shows that a profit of about £470,000 has been made. Those are the figures that the auditors have looked at and approved.

It is clear, judged by normal local government accounting conventions and commercial accounting conventions, that the race is profitable and will go forward from strength to strength. Other hon. Members may wish to argue the merits of the accounts or the way in which they have been drawn up, but those figures are subject to audit and the auditors are clear that the city has adopted the correct accountancy procedures and that the figures, as presented in the accounts, stand the test of examination.

My speech has been extended because of the interventions by many hon. Members. I thought it was right and proper to allow them to do so, as that avoids much repetition later on. Those interventions have also helped to clarify the issues and the concerns about which they are rightly worried.

I have pleasure in presenting the Bill to the House. I hope that all hon. Members will realise that the Bill comes from the people of Birmingham-- from the local authority--with support from all sections of the political parties. It

Column 260

illustrates the city's desire and determination to see the motor race prosper and to grab the opportunities that are available to ensure that the city maintains its dynamic drive towards future prosperity and competitiveness in this its 100th year.

8.26 pm

Mr. Terry Davis (Birmingham, Hodge Hill) : The hon. Member for Birmingham, Northfield (Mr. King) took 28 minutes of his speech to reach the Bill. During those first 28 minutes he described the economic benefits of running a motor race through the streets of Birmingham.

The hon. Gentleman does not seem to understand that the disagreement within the Labour party about this matter does not concern whether there are economic benefits, but how those economic benefits should be generated. I found it rather amusing that the hon. Gentleman, a Conservative Member, extolled the merits of public expenditure as a way of generating employment in Birmingham or elsewhere. The disagreement within the Labour party is not about whether there should be expenditure to generate jobs, but what sort of expenditure should generate what sort of jobs. The argument within the Labour party is about priorities. We believe that in deciding to spend money on the motor race--in subsidising a motor race--the city council has forgone the opportunity to spend money on social services, on education, on housing and on all the other activities for which people elect city councillors. Those services generate jobs as well as providing services for those in need.

Ms. Short : My hon. Friend is right that there are differences of view in the Labour party. Is he aware that a meeting of the Selly Oak local area sub-committee voted against the road race and that the Tory representatives voted against? There seem to be differences of opinion in all parties.

Mr. Davis : I was not aware of that and I am grateful to my hon. Friend for drawing that to our attention.

The hon. Member for Northfield briefly addressed the fact that when the 1985 Bill was introduced to the House of Commons by Sir Reginald Eyre, the House was told not only that we would derive all the economic benefits, described by the hon. Gentleman for 28 minutes, but that we would also receive a profit. We were told that the race would make a profit without anything being charged to the ratepayers and that that profit would in turn be used to improve social services, education and housing. It has not made a profit without a charge being made on the rates.

Mr. Denis Howell : It has.

Mr. Davis : If my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) disagrees, he will no doubt have an opportunity to catch your eye, Mr. Speaker, but, if he disagrees, I will certainly want to examine his figures after this debate. There are two reasons for opposing this Bill. The first is the effect of the road race on the people who live near the circuit. There is no doubt in my mind, having talked to representatives of residents in that area, that there is a tremendous noise and disruption as a result of the road race. At the time of the 1985 Bill we were told that people living in the area welcomed the excitement, glamour and pleasure they would derive from watching a road race pass their front windows, and we were told there were surveys

Column 261

which supported that. I did not disagree with that argument, but people living in the area have experienced three road races, and there is now evidence that many of them do not want the road race to continue and that even more of them are very concerned about the possibility of a bigger road race taking place--a formula 1 road race-- for a period of four days.

It is not only the people who live in the area who have strong feelings about the disruption caused by the road race. People living further afield suffer a great deal of inconvenience in commuting to the city centre during the period of the road race during the road works before and after the race. I leave it to my hon. Friend the Member for Birmingham Ladywood (Ms. Short) and other hon. Members whose constituents are adversely affected to describe the effects of the road race in detail.

The problems people have at the moment will clearly be made worse by the proposals in this Bill, and I cannot advise the House to accept the assurances given by the hon. Member for Northfield, who is no doubt acting in good faith ; so was Sir Reginald Eyre when he gave assurances to this House four years ago. Those assurances have not been kept.

For example, the hon. Member for Northfield said that we should extend the period of the works to 20 days, which would enable them to be done at less anti-social times, which will reduce the effect on people living in the area, but there is no guarantee that that will happen ; it is not written into the Bill. The Bill gives the council the opportunity to do the road works over a period of 20 days at unsocial as well as other hours.

Similarly, the hon. Member says that the council would not want to have a road race for four days unless it were formula 1 rather than formula 3. Again, that is not guaranteed in the Bill. Indeed, when I intervened in his speech and asked him to confirm whether it was possible under a clause in this Bill to have a formula 3 or super prix race over a period of four days on any weekend between the beginning of May and the end of September, he said that it was. In the previous Bill, which became an Act, we were assured that the super prix would take place only on one of three weekends ; it would have to be a bank holiday weekend, over Sunday and bank holiday Monday, on one of the two bank holiday weekends in May or the one in August.

However, this Bill gives the council the opportunity to have a race for four days on any weekend between May and August, and there is no guarantee that the council will not take this opportunity and will not operate like the moneylender in "The Merchant of Venice" and demand its pound of flesh because it is entitled to it under the terms of this Bill. I am not prepared to accept the hon. Member's assurances, although I am sure that he gives them in good faith. This Bill would also enable the council to close the streets from 6 am to 8 pm instead of the present shorter period. The Bill would enable it to refuse to idemnify the costs of the police authority. In such a week, after last Saturday's tragedy, I am amazed that anybody can argue in this House about the level of policing which the police force judge to be appropriate for any sporting event or that anyone wants to refuse to pay for that policing. As it

Column 262

stands, the Bill would also enable the council to escape its strict liability obligations, which were included in the previous Act. I cannot accept the hon. Gentleman's assurances, which brings me to the second reason for opposing this Bill--we have had assurances before. We had clear and explicit assurances four years ago. I refer to the financial arrangements for the road race, the assurances given then by the city council to this House, and the assurances given in this House by Sir Reginald Eyre on behalf of the city council ; assurances incorporated, as we were told, into the Bill which became the 1985 Act ; assurances which in my opinion have now been broken. These assurances took two forms. The first was that if the council were allowed to use £1.5 million of its capital allocation to pay for the capital expenditure required for the road race--an allocation from the Government intended to pay for repairs to council houses--the money would be recovered over a period of five years from the income generated by the road race and that the money would be recycled to pay for those repairs. That assurance was not only given in this House but was confirmed in a letter to me from the leader of the city council dated 21 June 1985. When I discussed the wording of the Bill with the representative of the city treasurer's department or the city solicitor's department, Mr. Allport, I was promised that the assurance would be given effect. That was one of the reasons why I dropped my objections to the Bill at the time.

Subsequently, I had correspondence with the city solicitor about this matter and was told that the capital expenditure on essential services would be financed by the road race. That assurance has not been kept. When I raised this point with Councillor John Charlton, the chairman of the general purposes committee, a few months ago, he told me that the promise had been kept and referred me to the city treasurer. I took up that invitation and had a very frank discussion with the city treasurer. I was told by him that he had had to find £1.5 million to honour the assurance given to this House, but he did not find it in the money generated by the road race ; it was money made available to the city council for other reasons.

Mr. Denis Howell indicated dissent.

Mr. Davis : My right hon. Friend the Member for Small Heath shakes his head, but Mr. Bernard Farrar, the city treasurer, explained this to me in careful detail. The £1.5 million came not from the road race but from the Severn-Trent water authority, and that money was used to pay for council house repairs. When I put it to the city treasurer that that was all very well but that it was still open to the city council to increase the money spent on repairing council houses by that £1.5 million as well as £1.5 million re-cycled from the income of the road race, he had to admit that that was correct. We were promised that the money would come from the road race over a period of five years, and that promise has not been kept. I repeat that it is not being kept for the benefit of my right hon. Friend the Member for Small Heath who keeps intervening from a sedentary position.

Mr. Denis Howell : The purpose of this interruption is to point out that the hon. Gentleman said this has to be done over five years. I accept what he says, but the race has been on for only three years.

Column 263

Mr. Davis : It is not the intention of the city council. Mr. Howell : Oh, yes it is.

Mr. Davis : I have here a letter dated 30 January, from Councillor John Charlton, chairman of the general purposes committee, who is claiming that the assurance has been kept, not that it will be kept in the future, and it was he who referred me to the city treasurer. When I spoke to the city treasurer, he explained to me what had happened and that it was not money from the road race and would not be from the road race. So that assurance, in my judgment, has not been kept, and the city treasurer was kind enough to say that he understood my view.

The second assurance which has not been kept is that the road race would not be subsidised by the ratepayers of Birmingham. In other words, we were told that the road race would make a profit, not a loss, so there would not be any question of money being spent on the road race instead of on repairs to houses and schools, on employing more teachers' home helps and occupational therapists, or on adaptation's to the homes of people with disabilities. We were told that none of those things would take second place to the road race and that money would not be spent on the road race rather than on those vital services for the people of Birmingham. We were told that profit would provide money for increased expenditure on all those things.

Mr. Howell : Quite right.

Mr. Davis : My right hon. Friend's memory is correct. That is what we were promised. We were told that the profit would be used to improve services for the people of Birmingham. We were specifically told that if the road race did not make a cumulative profit for the first five years, it would not be held again. The council was so confident that it said that the race would not be held then in spite of all the other benefits described by the hon. Member for Northfield. That assurance has not been kept.

The assurances were given at a very early stage in our discussions on the Bill which became the Birmingham City Council Act 1985. The city council issued a document in January 1985 which stated : "The view from the consultants is that a profit of at least £1 million would be made on the first event, with even larger profits in the future The most pessimistic view is that in the short term, income and expenses will break even. No charge will fall on the rates."

That document was followed by an advertisement which appeared in The House Magazine on 25 January 1985 which stated succinctly under the headline "Birmingham ratepayers won't be paying for it": "The cost to the ratepayers of Birmingham? Absolutely nothing. Indeed it will be to their benefit as more cash will be brought into the authority's kitty."

Mr. Howell : Quite right.

Mr. Davis : I hope that my right hon. Friend will continue to follow my argument.

Another document was issued which stated :

"The race will make money for the city council so the ratepayer will not lose out. We will not be taking decisions on whether to repair leaking roofs or to support the race. The road race will bring more cash into the authority's kitty."

The then chairman of the general purposes committee wrote a letter in which she said :

"the support given to the motor race will not reduce the amount of resources available for other purposes. In fact, in a profit situation, the funds available for these purposes will

Column 264

actually increase and of course it is our hope that besides promoting the city and encouraging tourism, the racing will generate income which we can use on community and social services." That was backed up by another letter from the then city treasurer, Mr. Paul Sabin, who referred first to capital expenditure, and who said :

"It can be regarded as good value for money in the sense that it will generate income from the motor race which will improve the city's revenue position and thereby free resources to be spent on other services. In the long run, housing, education etc. could well benefit significantly from the motor race Since we envisage the motor race at worst breaking even in revenue or year-to-year operating terms, and probably generating significant income, there is no question of revenue resources being diverted from other spending areas There is no conflict of priorities It would not take long for annual benefits to cancel out the initial capital contribution and therefore should perhaps be seen as a major financial factor in this debate."

When the Birmingham City Council Bill was introduced in March 1985, a circular was sent to some hon. Members which stated :

"The race will make money for the city council and will not therefore be a burden on the ratepayers."

Mr. Denis Howell : Quite right.

Mr. Davis : My hon. Friend is still with me. I hope that he will continue to be with me.

The Birmingham City Council Bill had its Second Reading on 1 April 1985. Sir Reginald Eyre said :

"Since the city envisages the motor race at worst breaking even in revenue on year-to-year operating terms, and probably generating significant income, there is no question of revenue resources being diverted from other spending areas ... It is the hope of the city council, based on careful study of all the factors involved, that besides promoting the city and encouraging tourism"--

I emphasise those words, "besides promoting the city and encouraging tourism"--

"the motor racing will generate income and so extra resources for the city."--[ Official Report, 1 April 1985 ; Vol. 76, c. 962-63.] My colleagues and I continued to have some scepticism about those claims and we regarded them as being exaggerated. Nevertheless, the Bill received its Second Reading and went into Committee. In Committee, questions were raised about the financial arrangements for the race. An hon. Member for Manchester is recorded as asking who would be responsible for any financial loss resulting from the ratepayers. A representative of the city council in the presence of the agents Sharpe, Pritchard and Company, the same agents for this Bill, answered :

"It was not thought likely, however : expert analysis projected a £1 million profit on a £1.5 million outlay not including the spin-off from tourism."

Many of my hon. Friends subsequently received a letter from the leader of the city council, who wrote :

"As far as I am concerned, however, to keep running a road race at a loss is not on. We will therefore bring in an amendment in the Lords to provide that the race shall not take place if an operating loss is still made in the fifth year of the event."

That letter was sent by Councillor Dick Knowles on 21 June 1985. On 24 June, Sir Reginald Eyre said in the House :

"In principle, a requirement that the race would not continue--that is, that the powers to operate the race would cease--if the event could not be staged without incurring annual losses, is accepted. The city council would not want to continue running the race if it had to require support from the ratepayers each year The intention is to introduce an

Column 265

amendment in another place to deal fully with the principle of the new clause I am giving an undertaking of equivalent value"-- that is, equivalent value to a new clause or amendment, which had been tabled by my hon. Friend the Member for Ladywood. Sir Reginald Eyre said :

"I am giving an undertaking of equivalent value in that such an amendment will be introduced in another place. I give that undertaking on behalf of the city council."

When pressed by my hon. Friend the Member for Ladywood, he said : "I have given an undertaking without reservation on behalf of Birmingham city coucil."--[ Official Report, 24 June 1985 ; Vol. 81 columns 712-13.]

The intentions of Sir Reginald Eyre and the city council were clear : the race would generate a profit and would not require any subvention from the rate fund.

On 4 July, we resumed the Report stage of the Birmingham City Council Bill. In the meantime, there had been private discussions between myself on behalf of my hon. Friends and Sir Reginald Eyre in the presence of other council representatives. Sir Reginald Eyre was very forthcoming and he accepted the strength of feelings of myself and my hon. Friends. He assured me that it was not the intention to run the race at a loss, that the council would stop it after five years if there was a cumulative loss, and that there would be no subsidy from the rates on any grounds. I accepted in good faith what Sir Reginald Eyre told me and I advised my hon. Friends to drop their objections to the 1985 Bill. My hon. Friends accepted that I was also acting in good faith, and we agreed that we could trust Sir Reginald Eyre's assurances. A new clause was tabled by him to give effect to the assurances that he had given to me and my hon. Friends. New clause 3, which was brought before the House on 14 July 1985, became section 14 of the Act. Subsection 5 says :

"If the statements for the first five financial years in which the council provide motor races show a cumulative deficit, the power to provide motor races shall cease to be exercisable by the council." Sir Reginald Eyre, explaining the purpose of that new clause, said :

"New clause 3 is designed to meet the points that were made in the earlier debates. This provision meets my undertaking that if the revenue accounts for the first five financial years in which the council provides motor races show a cumulative deficit, the power to provide motor races shall cease to be exercisable by the council."--[ Official Report, 4 July 1985 ; Vol. 82, c. 577.]

On that basis, my hon. Friends and I allowed the Bill to become an Act of Parliament, and the city council issued this community bulletin :

"In spite of what has been suggested by the few critics of the race proposals, it will not cost the ratepayers anything.

In fact, financial analysts have projected that, far from costing money, the event will put much-needed profits into the city's kitty, and this means more to spend on the services we all need." Those are not my words ; they are the words of the city council. That is what the council said would happen ; that is what it said was built into the Bill ; that is the assurance that it gave. Unfortunately, the first race was held in 1986, and it made a loss. The second race was held in 1987, and it made a loss. In February 1988, the city council was faced with the problem of having to meet the assurances that it had given to this House, as expressed in section 14 of the Act.

Column 266

Ms. Short : My hon. Friend is telling his story very well. We all lived through this. There has been a great deal of talk about the way in which the accounts were kept. Can my hon. Friend confirm that implementaton of the provisions in the Act about the way in which the accounts should be presented is entirely a matter for the city council? Is it not a fact that the council chose that way of recording the accounts, and did not have it imposed by others?

Mr. Davis : My hon. Friend is absolutely correct. I do not propose to go into detail about my discussions with Sir Reginald Eyre. I took him as representing the city council. After all, he sponsored the Bill in this House. I had known him for several years in his role as a member of the Conservative party. I disagreed with him about many political issues, but I would never have questioned his integrity or his good faith. I believed what he was telling me, indeed, I believe that he believed what he was telling me--that there would not be any cost to the ratepayers of Birmingham if the race were to go ahead and if, at the end of five years, there were to be a cumulative deficit, the race would not be held again.

In February 1988 the city council officers found that they had a problem. They had a loss of nearly £600,000 from the race in 1986, and a loss of about £400,000 in 1987, and they had trouble with the auditors. The auditors came to look at the road race accounts, and found that some items that should have been included in those accounts had not been included. I refer to items such as hospitality for VIPs, which had been charged to other accounts. The council argued that that expenditure had been incurred under provisions of other legislation and that therefore there was no need to show it as a cost against the road race. The auditors said that that was not right and that the council must put the expenditure into the road race account.

The auditors also told the council that it must include depreciation. I have some sympathy for the council on that. It is a detailed point, and the city council made a great issue of it in discussions with my hon. Friends and myself. Actually, the figures show that the amounts included for depreciation are nothing like the total of the losses.

There is some dispute about what happened at the meeting with the auditors. Certainly, it is clear to me that the suggestion came from that meeting that the council should consider putting a sum of money into the road race account for the benefit of promoting tourism in the city. It is not clear who made that suggestion. It was based on the preamble of the Act, which says :

"The city is a major commercial and industrial centre and, with a view to promoting the city and encouraging tourism and attracting business, it is expedient that the council be authorised to provide or arrange for the provision of motor races on certain streets in the city."

I emphasise that those words were in the preamble from the very beginning. At no stage was it suggested that those words justified a credit to the road race account from the rates account. At no time was that suggested, by Sir Reginald Eyre or anybody else, and it was never thought of until the meeting took place nearly two years after the first road race had been held.

Mr. Rooker : My hon. Friend is making a useful and a very important point. It is one that has to be put on the record for the benefit of all hon. Members and for

Column 267

everyone else who may read the report of this debate. The preamble to a private Bill is not the same as the preamble to a public Bill. Most of us do not bother with preambles. Until this issue arose, until I saw what happened last October, I never knew that the preamble was amendable. I never dreamt that anything from section 1 of an Act had the legal force to rub out sections.

This is a valuable point that my hon. Friend is making. The preamble to this Act runs to eight paragraphs of crucial importance. At that time, I had 12 years' experience in this House. I freely admit that, despite that experience, I had never seen anyone attempt to amend a preamble. I had never heard a preamble debated, or seen anyone rest a case on a preamble. Hon. Members concern themselves only with clauses and scheules to Bills-- later, sections and schedules to the Acts.

My hon. Friend is giving all hon. Members a warning. We all make law, though we are not all lawyers. This is a warning about the importance of the preambles to Bills, whether private or public. Generally speaking, this problem arises in the case of private Bills because the preambles to such Bills are much longer, much more full of information, than the preambles to public Bills.

Mr. Davis : I am grateful to my hon. Friend.

Before giving way, I had reached the question of the meeting with the city auditors, Price Waterhouse. It is absolutely clear--there is no question-- that nobody had suggested before 1988 that there should be a credit to the road race account from the rates account on the ground of that preamble. There is some confusion about whose idea it was at that meeting with the city auditors. Councillor John Charlton, chairman of the general purposes committee, has told my hon. Friends and myself that the suggestion came from the auditors themselves. Well, I put that to Price Waterhouse, and they disclaim all credit--or rather odium--for the suggestion. I do not think that we shall ever find out where the idea came from, but what we can be clear about is the motive for it.

Mr. Roger King : Perhaps I can help the hon. Member in trying to establish where this solution came from. It came from Price Waterhouse themselves. I have here a copy of a letter, dated 12 April 1989, to the hon. Gentleman. It says :

"Accordingly, when the first road race accounts were being compiled we took notice of the requirements of the 1985 Act and, in particular, those set out in section 14. My staff quite properly, and as part of normal procedure, questioned whether the accounts were drawn up correctly and if all amounts of expenditure and income had been included In addition, on a point of principle, my staff questioned whether, in accounting terms, the road race account should reflect income for sponsorship from the city."

It seems to me quite clear that the auditors actually pointed this out when they were auditing the first road race accounts.

Mr. Davis : I am very sorry that the hon. Gentleman has chosen to quote the letter to me from Price Waterhouse. He forces me to refer to the correspondence in some detail. On 11 April I wrote to Price Waterhouse in these terms-- [Interruption.] The hon. Gentleman and his hon. Friends may be disappointed that I am going to refer to all this correspondence, but it is he, not I, who has quoted from it. This is the letter that I sent to Price Waterhouse :

"I understand that you were responsible for suggesting that the city council should avoid the intention of section 14 of the 1985 Act by using the preamble as authority for

Next Section

  Home Page