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Mr. Howell : I am about to make an unexceptionable statement of fact. It is certainly not blackmail.

Ms. Short : Yes, it is.

Mr. Howell : My hon. Friend has not even heard it yet.

Ms. Short : We know what you are going to say.

Mr. Howell : What am I going to say?

Mr. Rooker rose --

Mr. Howell : I am not giving way.

Ms. Short : Will my right hon. Friend give way.

Mr. Howell : No, I am not giving way.

Mr. Rooker : We know what you are going to say.

Mr. Howell : What I am going to say is that if my hon. Friends kill the Bill tonight they will leave the city with no income from the road race.

Mr. Rooker : And a loss of £132,000 a year.

Mr. Howell : I agree with my hon. Friend. That makes his attitude more extraordinary. We shall be left to pay debt charges of £135,000 per year for 20 years or more.

My hon. Friends have asked us all to be honest, so when they get the chance they will presumably stand up and say, "We want to saddle Birmingham with debt charges of £135,000 per year for 20 years, and no income--that is what we want to do with our vote tonight." My hon. Friends, if they are honest, will say, "We want the

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people of Birmingham to be saddled with this great debt." I do not. [ Hon. Members :-- "Nor do we."] I am pointing out what will happen if the Bill is killed. We are all responsible for the consequences of our actions.

Ms. Short rose --

Mr. Howell : I will give way for the last time, because I respect my hon. Friend.

Ms. Short : If we succeed in killing the Bill today, as is our intention, wish and hope on behalf of the citizens of Birmingham, the power to run a two-day road race in Birmingham will remain. The barriers that were bought with the money to which my right hon. Friend refers will continue to be used for the two-day event, so the blackmail that has already been used on us is dishonest. I do not accuse my right hon. Friend of being dishonest, but the two-day event can continue and the barriers can continue to be used. Killing the Bill will not close down the two-day event.

Mr. Howell : I am sorry to say that I disagree with that.

Mr. Rooker : The Bill will not affect it.

Mr. Howell : I am pointing out my interpretation, just as my hon. Friends are entitled to do. My hon. Friends do not want the proposals contained in the Bill.

The promoters say that the proposals in the Bill are essential for the future of the road race. The logical conclusion of that is that my hon. Friends do not want the Bill to be carried forward on the conditions which the promoters tell us are essential.

Ms. Short : They are not telling the truth.

Mr. Howell : I wish that people would not make such interventions. It is not my experience that officers and leading members of Birmingham city council tell lies. They do not. I advise my hon. Friends that, outside the Chamber, they had better not make the kind of comments about officials that they have made inside it tonight. That is rather sad.

The trouble with my hon. Friend the Member for Hodge Hill is that he has been hoist with his own petard. My hon. Friends the Members for Perry Bar and for Hodge Hill insisted on section 3 and the old clause that is now section 14 being placed in the Bill. Once they were in, the city auditors, Queen's counsel consulted by the city and the Audit Commission responsible, said that the accounts had to be made up in that way. They all offered that opinion and the point at issue--

Mr. Terry Davis : Will my right hon. Friend give way?

Mr. Howell : No, I will not give way for the moment because I am developing this point in answer to my hon. Friend's question. Price Waterhouse, the Queen's counsel and the Audit Commission all said that in accordance with the Bill and section 14, which was forced on the Bill by my two hon. Friends who are now objecting--

Mr. Rooker : It was willingly accepted.

Mr. Howell : Under those terms, the city council had to produce these accounts on the basis of creative accounting. It had to account for the amount of income in the Bill that

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could be properly assigned to promotional effects. The city council then had to employ another consultant to assess the benefit of the road race.

Mr. Davis rose--

Mr. Howell : I will give way in a moment.

It went to the firm of Alan Pascoe and his associates, who have considerable experience in sports promotion. They were asked to advise the city on the beneficial effects of sponsorship of the road race for the promotion of Birmingham. That is where the figure of £600,000 comes in. My hon. Friends are continually saying that it is a subsidy, but it is not.

Mr. Davis : Will my right hon. Friend give way?

Mr. Howell : I will give way in due course.

Mr. Davis : My right hon. Friend is misleading the House.

Mr. Howell : I am not misleading the House--I am trying to correct what was said earlier. We are approaching the Division and I have a good deal more to say.

Mr. Davis : Will my right hon. Friend give way on this point? He has said that the council had no choice--that it had to credit the account--but that is not true.

Mr. Howell : All right, I will give way once more.

Mr. Davis : My right hon. Friend has told the House that three bodies told the city council that it had to credit the road race account with an amount for the promotion of tourism. He said that the council had no choice--that it had to do that. Those were his words, as Hansard will show.

I draw my right hon. Friend's attention to the actual words used by leading counsel. My right hon. Friend said that the auditors, the Audit Commission and leading counsel told the council that it had no alternative. On being asked by the council whether it could credit the road race account--not whether it must, but whether it could--leading counsel said :

"A credit may be carried to the motor race account."

He did not say that it had to be carried. The council could credit the account if it wished, and it did wish.

Mr. Howell : I am afraid that I do not agree with my hon. Friend's interpretation. His entire speech was based on the city council's having behaved improperly. He has now quoted a QC's opinion that the council was behaving perfectly properly. We are quibbling only about whether it ought to credit the account or whether it may credit it. My hon. Friend has shot himself in the foot. I accept the wording that he quoted, but what the QC said was, "You may do it," and Price Waterhouse had already said that it should.

What is more important than what was said by Price Waterhouse or the QC is the fact that the Audit Commission said that the accounts had been properly conducted, and signed them. Those accounts have been audited and accepted by the Audit Commission. I advise my hon. Friends not to go around saying that there is anything improper about accounts that have been challenged and checked by auditors, the Audit Commission and Queen's counsel.

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The race, moreover, is making a profit. The costs for the city in 1986 were £1,530,000 and the income £898,000, so in that first year the race made a loss. In the second year, 1987, the costs were £1,561,000 and the income £1,222,000. Last year, 1988, the costs were £1,215,000 and the income £1,215,000. The race has broken even in three years. That should be a cause for general rejoicing, and I am sorry that it is not.

The accumulated profit, as the hon. Member for Birmingham, Northfield (Mr. King) has said, is now £469,000. That is the profit that my hon. Friends wish to destroy, but I do not wish to destroy it. Even if we take into account the £600,000 contribution for promotional purposes, of which my hon. Friends do not approve, the profit on the race this year will be £550,000. We are talking about £50,000 even if we allow their figures, which I dispute. On the clear evidence of the best cost accounting procedures, after three years the race is already beginning to become profitable. The elected city council supports the race and the MORI poll shows that the majority of those living in the area are in favour of it. I believe that the House should give the Bill a Second Reading and I am sorry to have heard such jaundiced objections to it.

9.44 pm

Mr. David Gilroy Bevan (Birmingham, Yardley) : I am proud to disclose that I am an adviser to the BSG group which includes Autolease, which has been described as the largest car dealer in the world. The company is based in my constituency, employs hundreds of Brummies, produces employment and motor cars everywhere and backs the commodities that go into the car race. I am also involved with PPG Industries which is based in the constituency of the hon. Member for Birmingham, Ladywood (Ms. Short), which employs hundreds of people and provides the paint finishes for most of the world's motor car manufacturers offered to bring the lead car from the Indianapolis to the car race in Birmingham, though this offer was not taken up. I am extraordinarily pleased to disclose those interests because I believe that Birmingham needs the business that those fine firms generates, because otherwise there would be no profits on which to pay taxes or for us to debate in the House. There would be no money to allocate. The car race is an expression of what I believe is good for Birmingham. I compliment my hon. Friend the Member for Birmingham, Northfield (Mr. King) and the right hon. Member for Birmingham, Small Heath (Mr. Howell). The right hon. Member for Small Heath made an excellent speech. He has always been a good Brummy and has promoted what is good for the city. I wish that his hon. Friends would take more notice of him.

I was elected to Birmingham city council some 30 years ago and I voted in favour of the car race at least 20 years ago when it first cropped up. At that time, the present leader of the majority Labour party in Birmingham, Councillor Dick Knowles, made an excellent speech in which he said that the car race will be like the Brummy, brash, noisy and boisterous, but nevertheless warm and welcoming. The car race has been welcomed by citizens and businesses in Birmingham and they want it perpetuated.

Prior to the promotion by the city council in 1985, a survey showed that 82 per cent. of respondents voted in favour of holding motor racing in the city and only 18 per

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cent. voted against. In January, a survey on the proposed amendment to the 1985 Act revealed that 76 per cent. of respondents thought that the motor race was good for Birmingham, bringing publicity and employment ; 75 per cent. of respondents thought that the motor race was likely to improve the image of Birmingham in other parts of the country and abroad ; and 58 per cent. of the respondents would not object to extending the race for three days, although 42 per cent. were against. Opposition to a four-day race amounted to 48 per cent. but there was a majority in favour of the extension of 52 per cent. However, those figures take no note whatsoever of firms that are not enfranchised and cannot vote--the firms in the city of Birmingham which employ so many constituents of hon. Members on both sides of the House representing Birmingham constituencies. They are involved primarily with the motor components industry and would have voted in favour of the car race had they had the opportunity to vote. Birmingham is still a substantial home for the car manufacturing business, as is the west midlands generally. Those are some of the facts. The motor race is backed by firms and by the people. In the 1970s and the early 1980s, during the regrettable economic recession which occurred in my city, the traditional industries diminished to a large extent. Without the implementation of service sector industries such as the leisure industry, including the car race and tourism, we would have suffered grievously. Some £500 million is now earned by tourism, including the car race, in the midlands. In the broadcloth of the country, the industry has employed up to 50,000 people each year. It brings about 16 million tourists to this country and we are told that almost 17 million may come here next year.

Ms. Short : The road race is bringing in those people?

Mr. Bevan : No, tourism, of which the road race is an integral part, brings in those numbers. About £15 billion comes in from tourism and helps to pay wages costs generally.

One of the wards in my constituency is near the national exhibition centre, which the right hon. Member for Small Heath has so eloquently described. The unemployment rate there is almost 6 per cent. less than in the wards that are further away. That is a direct result of the national exhibition centre, and together with the convention centre, into which £136 million is being invested, it will make Birmingham a tourist centre of immense interest. The road race is becoming a vital and axiomatic part not only of tourism, but of the success of industery generally and the motor industry specifically. I was asked to say how much hospitality I have received. I do not drink and I do not smoke, but firms in my constituency, and many others, have hospitality tents in which they rightly entertain clients. I have had many a cup of tea and a plate or two of food, and there is no shame in that. The motor race brings kudos to Birmingham, and without the income that tourism earns, wages would not be available with which to pay bills. With those words, which I hope will be noted well, I rest my case for supporting the Bill. 9.53 pm

Mr. Jeff Rooker (Birmingham, Perry Barr) : I am grateful for being called and I am glad that you are back in the Chair, Mr. Speaker, because you have missed an

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interesting half Second Reading debate. I am the fifth hon. Member to speak, not counting the Minister, who was extremely neutral, spoke for about three minutes, did not give the Government's view and did not take interventions. I was rude to him, and for that I apologise.

Mr. Peter Bottomley : I did not declare my interest. I bought a cup of orange juice at Birmingham international station today.

Mr. Rooker : The debate today has not been balanced. There is a case to be made for the Bill and a case against it. There is a case for substantial and serious amendment to the Bill, and until I was called, only my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) had the opportunity to present that case. In the seven minutes remaining, I cannot make the case properly. However, I must make it clear that we want the Bill to be debated as fully as possible. As with the previous Bill, the reason that we tabled our motion is our prime concern about the finances, which are at the root of the difficulties.

We saw a bottomless pit opening up with the finances and that was why the House, with agreement from hon. Members of all parties and on both sides of the argument, sought to regulate the finances in the Birmingham City Council Act 1985. It is because the regulations that this House wrote into the statute have not been followed that, with our humble non-accountant, non-legal opinion--the arithmetic is on our side--we tabled the instruction ; that is partly why we wish to make a detailed case about why the Committee that considers the Bill should amend it in line with our instruction.

Ms. Short : I am grateful to my hon. Friend for giving way because, as he knows, the road race runs through my constituency and it looks as though I will not get an opportunity to speak in the debate. My hon. Friend knows that I agree with him about the financial objection and that I share his criticism.

I should like to put it on the record briefly that the people who live in the area cannot bear the thought of a four-day event with all the attendant noise and inconvenience, and those people are entitled to have their views respected. Even the hon. Member for Birmingham, Yardley (Mr. Bevan), who spoke in favour of the Bill, recognised that his poll showed that a majority in the area is opposed to the race. That is a second and important criticism--[ Hon. Members :-- "He did not."] Yes, he did. He said that only 48 per cent. were in favour.

Mr. Rooker : My hon. Friend makes a valuable point, and I wish that she could deploy her case on behalf of her constituents who are directly affected.

At the outset, I should declare an interest, because I attended the 1987 road race. Unlike my hon. Friends who have signed the instruction, I made it my business to ensure that I was in the city in 1987, so that I could witness the road race at first hand. Although I did not expect the matter to come before the House so soon, if it did, I wanted the experience of having walked the circuit and seen what happens.

I had a personal report from the police afterwards about the conduct around the circuit and around the pubs. I have never had to take any action on the report, because the road race was a peaceful occasion. I paid for the two

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tickets that I was offered, although there was a bit of an altercation when the officials said, "Mr. Rooker, there is no account for us to pay guests' money into." I said, "Well, the city of Birmingham rates fund will do for me." I paid for the tickets, but I did not contribute towards my lunch, and to that I extent I have an interest to declare.

I turn now to the point made by the hon. Member for Yardley, before he addressed the key financial aspects. Of course, my hon. Friends and I are all on the side of our city. Most of us were actually born there and are proud of it. Nobody who visits Birmingham today can deny that there has been a sea change in the past decade. There is a buzz and a hum in many parts of the city. However, at the same time there is also massive poverty, to the extent that the city council is setting up an anti-poverty programme, which is supported right across the city council. That is something that the council has never had to do or thought that it had to do before. It is important to note that point. It is no good saying that things are all black or all white or that they are all good or all bad, because there is no doubt that there has been a sea change.

I agree with most of the examples given by my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), who mentioned the national exhibition centre and the Olympic bid. However, the difference, which he did not seem to grasp, is that all those things give the citizens of Birmingham capital assets, whereas the road race accounts give them a revenue plughole down which hundreds of thousands of pounds of ratepayers' money are being poured at present and down which it is planned to pour even more in the future. It is no good my right hon. Friend denying that, because, as a percentage, more people in his constituency will be losers under the poll tax than in any other Birmingham constituency. When the losses of the road race start to be taken into account for the rate support grant--or the revenue support grant as it will be known under the poll tax legislation--the citizens of Birmingham will be doubly penalised. I want to follow up one brief point about motor racing that was made by the hon. Member for Yardley. Of course there is a massive spin-off from motor racing. Most of the motor racing circuits of the world are dominated by British designers and British drivers. However, I have often wondered, how come the car factories in this country are not making racing motor cars? We cannot sell the motor cars we are making on the scale that we should be able to sell them if it was true that there is a fantastic and direct spin- off which clearly there is not. It is no good saying that, if there is lots of racing, we can make lots of cars, because it does not work like that. Therefore, there is a case to be made for--

Mr. Roger King rose in his place and claimed to move, That the question be now put.

Question put, That the question be now put :--

The House proceeded to a Division--

Ms. Short (seated and covered) : On a point of order, Mr. Speaker. The promoter of this Bill spoke for an hour. This road race take place in my constituency and my constituents have strong views about it. I have been here for every minute of the debate and I have not been given a chance to speak. I do not believe that it is right to allow a closure when a debate has been conducted in such a way.

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The promoter of the Bill took a long time hogging the debate and you, Mr. Speaker, have only allowed one speech against the Bill.

Mr. Speaker : I have to take into account the amount of time spent on this debate. I have to say that the hon. Member for Birmingham, Hodge Hill (Mr. Davis) spoke for 44 minutes. There have been some very long speeches.

Ms. Short : What about my constituents?

Mr. Speaker : I know, but the point is that two and a half hours have been spent on this matter and it is not the end of it. It is for the House to decide whether the Bill should be closured or not. The House having divided : Ayes 153, Noes 30.

Division No. 163] [9.59 pm

AYES

Aitken, Jonathan

Alexander, Richard

Alton, David

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Tom (Hazel Grove)

Atkinson, David

Baker, Rt Hon K. (Mole Valley)

Baker, Nicholas (Dorset N)

Baldry, Tony

Beith, A. J.

Bellingham, Henry

Bennett, Nicholas (Pembroke)

Benyon, W.

Blackburn, Dr John G.

Boswell, Tim

Bottomley, Peter

Bowden, Gerald (Dulwich)

Bowis, John

Brandon-Bravo, Martin

Brazier, Julian

Brown, Michael (Brigg & Cl't's)

Browne, John (Winchester)

Buchanan-Smith, Rt Hon Alick

Budgen, Nicholas

Carlile, Alex (Mont'g)

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Chalker, Rt Hon Mrs Lynda

Chapman, Sydney

Clark, Dr Michael (Rochford)

Conway, Derek

Coombs, Anthony (Wyre F'rest)

Coombs, Simon (Swindon)

Cope, Rt Hon John

Critchley, Julian

Currie, Mrs Edwina

Davies, Q. (Stamf'd & Spald'g)

Davis, David (Boothferry)

Day, Stephen

Dorrell, Stephen

Douglas-Hamilton, Lord James

Durant, Tony

Favell, Tony

Fearn, Ronald

Fenner, Dame Peggy

Forman, Nigel

Forsyth, Michael (Stirling)

Forth, Eric

Fowler, Rt Hon Norman

Fox, Sir Marcus

Fraser, John

Fry, Peter

Garel-Jones, Tristan

Gill, Christopher

Golding, Mrs Llin

Goodhart, Sir Philip

Greenway, Harry (Ealing N)

Gregory, Conal

Hanley, Jeremy

Hargreaves, Ken (Hyndburn)

Harris, David

Heathcoat-Amory, David

Heddle, John

Hicks, Mrs Maureen (Wolv' NE)

Howarth, Alan (Strat'd-on-A)

Howarth, G. (Cannock & B'wd)

Howell, Rt Hon D. (S'heath)

Howells, Geraint

Hunt, David (Wirral W)

Irvine, Michael

Jack, Michael

Janman, Tim

Johnson Smith, Sir Geoffrey

Johnston, Sir Russell

Kellett-Bowman, Dame Elaine

Key, Robert

Kilfedder, James

King, Roger (B'ham N'thfield)

Kirkwood, Archy

Knapman, Roger

Knight, Greg (Derby North)

Knowles, Michael

Knox, David

Lang, Ian

Lawrence, Ivan

Lee, John (Pendle)

Lightbown, David

Lilley, Peter

Lloyd, Sir Ian (Havant)

Lloyd, Peter (Fareham)

Lyell, Sir Nicholas

MacKay, Andrew (E Berkshire)

Maclean, David

McLoughlin, Patrick

Mans, Keith

Martin, David (Portsmouth S)

Maude, Hon Francis

Mayhew, Rt Hon Sir Patrick

Michie, Mrs Ray (Arg'l & Bute)

Miller, Sir Hal

Mills, Iain

Moate, Roger

Moss, Malcolm

Neale, Gerrard

Needham, Richard

Neubert, Michael

Newton, Rt Hon Tony

Nicholls, Patrick

Nicholson, David (Taunton)

Norris, Steve

Onslow, Rt Hon Cranley

Paice, James

Pattie, Rt Hon Sir Geoffrey

Porter, David (Waveney)

Portillo, Michael

Raffan, Keith

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