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part of the world, however, a unitary local authority is needed. My Bill seeks to deal with the problem in terms not of revolution, but of evolution. I should have thought that to be a good Conservative philosophy in which we could all believe.

It is interesting that pressure to create unitary local authorities has come not just from Conservative but from Opposition Members. I read with great interest the reports of the Scottish Labour party, which discussed, I think quite sensibly, the possibility of cutting the number of local authorities in Scotland from 65 to 20 single-tier authorities to which people could relate and which they could understand. My hon. Friend the Member for Pembroke (Mr. Bennett), who is also in his seat today, recently moved a Bill for unitary authorities in Wales. I understand that there is considerable cross-party support in Wales for cutting the number of the 37 existing district councils and merging them with county councils. Interestingly enough, my Bill also refers to Northern Ireland, which currently has 25 squabbling councils with inadequate powers. Perhaps we could overcome some of the problems of sectarian politics in Northern Ireland if we were to create one unitary local authority for the whole Province, based in Belfast, with real powers. I repeat that it is essential in matters of local government reorganisation not to repeat past mistakes such as those in the Redcliffe-Maud report, which said that local authorities had to be of a certain size and had to perform certain functions across the entire county. I should like, for example, the re- creation of county boroughs in great cities such as Bristol, which is full of local pride. Why does it not have its own council? That also applies to the great cities of Hull, Lincoln and Portsmouth. The concept of county boroughs was something to be proud of, and it is no accident that the great period of local government prestige was that of the county borough.

My Bill lays open all those interesting proposals. It is on the basis of creating strong and effective local government that people can understand and in which they can take part that I commend it to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Edward Leigh, Dame Janet Fookes, Mr. Patrick McLoughlin, Mr. Nicholas Bennett, Dr. Ian Twinn, Mr. Michael Brown, Mr. Greg Knight and Mr. John Marshall.

Creation of Unitary Local Authorities

Mr. Edward Leigh accordingly presented a Bill to merge regional, county, borough and district councils to create unitary all purpose local authorities in Great Britain and Northern Ireland : And the same was read the First time ; and ordered to be read a Second time upon Friday 30 June and to be printed [Bill 155.]

STATUTORY INSTRUMENTS, &c.

Mr. Speaker : With the leave of the House, I will put together the two motions relating to statutory instruments.

Ordered,

That the draft Fisheries Act 1981 (Amendment) Regulations 1989 be referred to a Standing Committee on Statutory Instruments, That the draft Cereals Marketing Act (Application to Oil Seeds) Order 1989 be referred to a Standing Committee on Statutory Instruments, &c.-- [Mr. Alan Howarth.]

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EUROPEAN COMMUNITY DOCUMENTS

Ordered,

That European Community Documents Nos. 8896/84 and the Supplementary Explanatory Memorandum submitted by the Department of Trade and Industry on 3rd December 1987, and 4090/86 and the Department's Supplementary Explanatory Memoranda of 6th November 1987 and 3rd December 1987 on trade marks be referred to a Standing Committee on European Community Documents.- - [Mr. Alan Howarth.]

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Column 922

Orders of the Day

Local Government and Housing Bill

As amended (in the Standing Committee), further considered. 4.16 pm

Mr. David Blunkett (Sheffield, Brightside) : May I seek the permission of the House to expedite business by taking together all the amendments relating to the companies clauses?

Mr. Speaker : Would it be for the convenience of the House to take all the amendments relating to clauses 58 to 64 together?

Mr. Martin Redmond (Don Valley) : Object.

Mr. Speaker : If the House does not agree, we shall have to take the amendments separately. Does the hon. Member for Don Valley (Mr. Redmond) mean that?

Mr. Redmond : Object.

Clause 60

Companies subject to local authority influence

Mr. Blunkett : I beg to move amendment No. 293, in page 67, line 23, at end insert--

(3A) For the purposes of determining whether any business relationship exists under subsection (3) above, nothing in that subsection shall apply to any single payment by a local authority for a particular purpose where the authority certifies in making the payment that it does not anticipate any recurrence of the type of expenditure concerned.'.

Mr. Speaker : With this it will be convenient to consider amendment No. 294, in page 67, line 23, at end insert--

(3A) In calculating any aggregate for the purposes of subsections (3)(a) or 3(c) above, the amount of any grant, loan, or other advance shall be disregarded where the payment was made before the coming into force of this section.'

Mr. Blunkett : The amendment deals with the way in which the Bill is formulated in relation to companies. It aims to disentangle what is reasonable and acceptable from what does not make sense to anyone. It further aims to disentangle the position when one-off grants or the allocation of land result in individual companies or trusts being associated with a local authority to such an extent--if more than 20 per cent. of their board members or management committee members are from the local authority or associated with it--that they find themselves designated as influenced companies. If the proportion is more than 50 per cent. they will be regarded as local-authority controlled companies. A one-off grant or a one-off allocation of land should not be treated in that way as it would be reasonable not to infer an association with the local authority in those circumstances.

Labour Members believe that retrospection should not apply to the way in which resources have been allocated to a company, trust or organisation, so that they are not caught by something that has already happened in terms of influenced or controlled company status.

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The Parliamentary Under-Secretary of State for the Environment (Mrs. Virginia Bottomley) : Amendment No. 293 proposes that the business relationship test will not be satisfied in the case of one-off payments where the local authority concerned has certified that it does not expect a recurrence of the same type of expenditure. The difficulty is that the one- off payment can be for any amount. Indeed, it could be for a sum so large that it more or less covered the entire operation of the company. It is hard to see how such a situation could be regarded as other than a very strong business relationship. Under the terms of the amendment, such a situation would not be caught if the local authority had certified that it did not intend or expect to make further similar payments, although there is no requirement not to make such further payments. In short, we find amendment No. 293 unacceptable.

Amendment No. 294 proposes that grants provided before the legislation came into force should be disregarded when calculating the business association test. Although that may seem superficially attractive, the crucial point in establishing whether the business relationship exists is whether the link is sufficient to provide the authority with influence, not when the link was established. If accepted, the amendment would mean that numerous companies which could clearly be influenced would be exempt from the proposals. I can assure the hon. Member for Sheffield, Brightside (Mr. Blunkett), however, that there can be no requirement to attach such conditions to contracts and such matters awarded before the legislation comes into force.

We have studied the proposals carefully and we have no wish to undermine the useful working of companies which make a valuable contribution. There are cases, such as housing associations, for which we have made exemptions. Our proposals are an important way to ensure that the rules of propriety in local government are adhered to, although it is still possible to use companies, where appropriate, to serve an appropriate end.

Mr. Allen McKay (Barnsley, West and Penistone) : Can the hon. Lady confirm the following? In my area, there is an innovation centre which uses European money and local authority money. Some of its directors are also councillors and the chairman of the company is Lord Mason. The centre serves a most useful purpose in acting as a seed-bed workshop, bringing together ideas and promoting jobs and job opportunities. It is doing excellent work.

My second example is a mining museum in the constituency of Wakefield, which would not have been set up but for the consortium of local authorities which provided the incentive and financial arrangements initially. Without local authority backing, that museum would not be there, and without local authority backing it is likely to disappear. Surely that is not right. Can the Minister assure us that those examples will be considered carefully before the proposals are carried out?

Mrs. Virginia Bottomley : I can certainly give that assurance. It is not appropriate to set up a company to undermine the capital rules for local authorities, but we accept, recognise and have encouraged many joint partnerships and a company is often the best way in which to proceed. I will look at the cases to which the hon. Member for Barnsley, West and Penistone (Mr. McKay) has referred.

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Column 924

Question put, That the amendment be made :--

The House divided : Ayes 122, Noes 216.

Division No. 241] [4.22 pm

AYES

Abbott, Ms Diane

Alton, David

Anderson, Donald

Ashton, Joe

Barnes, Mrs Rosie (Greenwich)

Battle, John

Beckett, Margaret

Beith, A. J.

Bell, Stuart

Bennett, A. F. (D'nt'n & R'dish)

Bidwell, Sydney

Blunkett, David

Bradley, Keith

Buckley, George J.

Callaghan, Jim

Campbell, Ron (Blyth Valley)

Campbell-Savours, D. N.

Cartwright, John

Clark, Dr David (S Shields)

Clarke, Tom (Monklands W)

Clay, Bob

Clwyd, Mrs Ann

Coleman, Donald

Cook, Frank (Stockton N)

Cook, Robin (Livingston)

Corbyn, Jeremy

Cox, Tom

Crowther, Stan

Cryer, Bob

Cummings, John

Cunningham, Dr John

Davies, Ron (Caerphilly)

Davis, Terry (B'ham Hodge H'l)

Dixon, Don

Dobson, Frank

Douglas, Dick

Dunwoody, Hon Mrs Gwyneth

Eastham, Ken

Fatchett, Derek

Fearn, Ronald

Field, Frank (Birkenhead)

Fields, Terry (L'pool B G'n)

Fisher, Mark

Flannery, Martin

Flynn, Paul

Foot, Rt Hon Michael

Foster, Derek

Foulkes, George

Garrett, John (Norwich South)

George, Bruce

Gordon, Mildred

Gould, Bryan

Griffiths, Win (Bridgend)

Grocott, Bruce

Hardy, Peter

Hattersley, Rt Hon Roy

Haynes, Frank

Heffer, Eric S.

Hinchliffe, David

Home Robertson, John

Hood, Jimmy

Howarth, George (Knowsley N)

Howell, Rt Hon D. (S'heath)

Howells, Dr. Kim (Pontypridd)

Hughes, John (Coventry NE)

Illsley, Eric

Janner, Greville

Kaufman, Rt Hon Gerald

Kirkwood, Archy

Leighton, Ron

Lestor, Joan (Eccles)

Lewis, Terry

Litherland, Robert

Livingstone, Ken

Lloyd, Tony (Stretford)

Lofthouse, Geoffrey

McAllion, John

McKay, Allen (Barnsley West)

McWilliam, John

Mahon, Mrs Alice

Maxton, John

Meacher, Michael

Meale, Alan

Michael, Alun

Michie, Bill (Sheffield Heeley)

Morris, Rt Hon A. (W'shawe)

Mowlam, Marjorie

Murphy, Paul

O'Brien, William

O'Neill, Martin

Orme, Rt Hon Stanley

Owen, Rt Hon Dr David

Patchett, Terry

Pendry, Tom

Pike, Peter L.

Powell, Ray (Ogmore)

Prescott, John

Primarolo, Dawn

Rees, Rt Hon Merlyn

Richardson, Jo

Robertson, George

Robinson, Geoffrey

Rooker, Jeff

Rowlands, Ted

Sheldon, Rt Hon Robert

Skinner, Dennis

Smith, C. (Isl'ton & F'bury)

Smith, J. P. (Vale of Glam)

Snape, Peter

Soley, Clive

Spearing, Nigel

Taylor, Mrs Ann (Dewsbury)

Taylor, Matthew (Truro)

Wall, Pat

Wallace, James

Walley, Joan

Wardell, Gareth (Gower)

Welsh, Andrew (Angus E)

Williams, Rt Hon Alan

Winnick, David

Wise, Mrs Audrey

Worthington, Tony

Tellers for the Ayes :

Mr. Martin Redmond and

Mr. Harry Barnes.

NOES

Adley, Robert

Alison, Rt Hon Michael

Allason, Rupert

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Atkinson, David

Baker, Nicholas (Dorset N)

Beaumont-Dark, Anthony

Bennett, Nicholas (Pembroke)

Bevan, David Gilroy

Biffen, Rt Hon John

Blackburn, Dr John G.

Blaker, Rt Hon Sir Peter

Body, Sir Richard

Bottomley, Mrs Virginia

Bowden, A (Brighton K'pto'n)

Bowden, Gerald (Dulwich)

Boyson, Rt Hon Dr Sir Rhodes

Braine, Rt Hon Sir Bernard

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