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Mr. Patten : One or two of my hon. Friends are making remarks about what the hon. Gentleman's constituents might do which lack gallantry even if they are pointed and relevant. The figures that I mentioned earlier involve, as I said, increasing total standard spending from £32.8 billion to £39 billion, and an increase of 7.1 per cent. in the total standard spending figure over local authorities' planned spending for this year. Those are helpful figures.
Mr. Richard Tracey (Surbiton) : I believe that the review will be seen as a thoughtful response by the Government to the concerns of many people, and I imagine that my constituents will be pleased, particularly those with low rateable values and those such as vicars and teachers who have to live in second homes while they buy properties for their retirement. Does my right hon. Friend agree that, as
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time goes on, any party that comes up with the idea of returning to some sort of domestic rating system will be seen as going back to the dark ages?Mr. Patten : My hon. Friend is entirely right. He will know as well as I do some of the things which Opposition Members have said about the inequities of the domestic rating system, and he, like me, will have come to the conclusion that it is inconceivable that, after saying some of those things, they could even consider going back to domestic rates.
Mr. Max Madden (Bradford, West) : I am refusing to pay the poll tax because eight out of 10 of my constituents lose under the poll tax compared with the rates. Nothing that the right hon. Gentleman has said today will lessen their anger at the unfairness and injustice of the poll tax. Will he give an assurance that the people of Bradford, who last May exercised their local democratic rights by turfing out the Tories from control of Bradford city council, will not be penalised by any Government actions between now and the next general election?
Mr. Patten : I certainly will not penalise anybody, but the way in which I react to local authorities will depend what they do. Once again I must say that it is astonishing that the hon. Gentleman should take the view that his constituents should face larger bills so that he can have a free ride.
Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak) : Will my right hon. Friend accept, from someone who does not love the community charge, that I think that he has done extraordinarily well to get £3 billion extra out of the Treasury? Is it not somewhat alarming and disturbing to hear £3 billion called "a piffling sum"? If £3 billion is a piffling sum, God knows what the socialists would spend. Surely the whole idea of local government is that it should be local and that it should be government, so that the people know that, when they vote for a local government they are voting for one kind of authority or another. Instead of charge capping, which puts the albatross of overspending firmly around the Government's neck, why not put it firmly where it should belong--around the local authorities' necks, and penalise them a pound for every pound spent over the SSA?
Mr. Patten : We have both been in the House for the same period, and my hon. Friend will recall that we have in the past had clawback systems which approximated to the proposal he makes but they are not uniformly popular--for example, with my hon. Friends. My hon. Friend is right to say that the amount of money that we are proposing as an increase to aggregate external finance is substantial. For the Opposition to witter on about it not being £3 billion is equivalent to their saying that money raised through corporation tax and spent on public services is somehow not a contribution from the public Exchequer.
Mr. Bob Cryer (Bradford, South) : The Secretary of State has been wittering on about local authorities increasing their expenditure, but is not it true that that expenditure has been on important services such as home helps, provision for the mentally handicapped, education,
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housing and other obligations placed on them by the Government ; and that local authorities have also had to cope with the inflation created by the Government's economic policies? Does the right hon. Gentleman recall that, when this malevolent and wicked tax was produced by the Government, it was said that it would be simple? Who will pay for the massive administration that his proposals today will entail? Will it be borne entirely by the Government? Does he realise that, as a result of his threat today to poll-cap every local authority, he has shifted from the liberal wing to the jackboot tendency in his party?Mr. Patten : I leave knowledge of jackboots to the hon. Gentleman. It is entirely possible to provide good-quality services for the amounts that I have mentioned. It is also entirely possible for local authorities to provide a good standard of service with increased spending of 30 per cent. over three years. Plainly the shadow Chancellor of the Exchequer the right hon. and learned Member for Monklands, East (Mr. Smith) has his work cut out to convert the Labour party to fiscal probity.
Mr. Ian Gow (Eastbourne) : Is not the additional allocation of £3 billion to local authorities next year more than they could reasonably have hoped for? Is my right hon. Friend aware that there is still an enormous gulf between the best and the worst local authorities in terms of price and quality of service? What steps will he take to bring greater efficiency, greater economy and greater effectiveness to local government?
Mr. Patten : The answer to my hon. Friend's first two questions is a strong affirmative. The answer to his third question is that we all look to the Audit Commission to continue to press for greater efficiency in local government. For example, the commission has identified £650 million- worth of possible savings that have still not been made. It has also pointed to about £150 million-worth of savings that could be made through energy efficiency, and no doubt all hon. Members would agree about that. There is plenty that could be done to achieve the objective to which my hon. Friend properly and eloquently referred.
Mr. David Blunkett (Sheffield, Brightside) : I congratulate the Secretary of State on an undoubted sleight of hand, in which he was aided and abetted by the headline writers in some of our broadcast media, in pretending that an allocation of £3 billion is in some way a gift of Government through the grant system. Grant has increased by only £2 billion, two thirds of what has been talked about. The remainder comes from the national business rate.
The Secretary of State's announcement is a fraud. Will he confirm that the year-on-year increase in spending to which he has referred from last year, is well accounted for by the removal of creative accountancy measures, including the use of capital receipts? Authorities cannot be blamed for high poll tax charges, nor can they be blamed for spending cuts that are being considered by the Cabinet in its public spending review.
The amount of £2 billion is peanuts. What happened to the £5 billion that we heard about only a few weeks ago, and what happened to the Government's promise that they would look at those who had no income, people such as mothers looking after small children at home? What
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happened to the 43 suggestions put to him by his Back Benchers and what has become of the promised fundamental review of the poll tax?Mr. Patten : I wondered whether the hon. Gentleman would continue with his list of rhetorical questions and ask what happened to those Labour Back Benchers who are not here, and what happened to the Labour party alternative. [Interruption.] I shall deal with the hon. Gentleman's question, about which his hon. Friend the Member for Dagenham shouts from time to time. The hon. Gentleman knows too much about local authority finance to believe what he said.
Aggregate external finance to local authorities this year is £23.1 billion. Next year it will be £26.05 billion. That difference of £2.95 billion is made up of revenue support grant, specific grants and contributions from the non-domestic rate pool. For the hon. Gentleman to say that one should take no account of contributions from the business rate pool is like saying, as I mentioned earlier, that corporation tax should not be included in Government revenues because it comes from business. The hon. Gentleman's argument is ridiculous. He is trying to find some specious intellectual justification for spending the whole afternoon being churlish. Several Hon. Members rose --
Mr. Speaker : Order. I am sorry that it has not been possible to call all those hon. Members who have been rising. I shall give them some precedence and further opportunities, possibly in the Adjournment motion next week.
Dr. Keith Hampson (Leeds, North-West) : On a point of order, Mr. Speaker. The whole House knows the problems that you face, but may I point out that some Conservative Members with northern seats who will benefit from this package suffer from high-spending local councils?
Mr. Speaker : It is terribly difficult to call all hon. Members who wish to participate. As I have said, there will be other opportunities.
Mr. Dave Nellist (Coventry, South-East) : Further to that point of order, Mr. Speaker. Perhaps you will consider that on a day on which the Government put down a business motion requiring us to stay here all night, and as there is no pressure for business to finish by 10 o'clock, it should have been possible to call all hon. Members who were rising.
Dame Elaine Kellett-Bowman (Lancaster) rose --
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Mr. Speaker : No. I have to have regard to the legitimate interests of hon. Members who wish to participate in later debates. It is desirable for some hon. Members who wish to get in early at Question Time, but that means that other hon. Members have to wait until late in the night.
Dame Elaine Kellett-Bowman : On a point of order, Mr. Speaker. We heard the Labour voice of Lancashire but we did not hear the Conservative voice. We should like to thank the Secretary of State for what he has done.
Mr. Speaker : Perhaps the Conservative voice will be heard next week.
Mr. Barry Field (Isle of Wight) : On a point of order, Mr. Speaker. Can you explain how the only hon. Member who represents an entire county can express his view on this important package?
Mr. Speaker : What about trying next week? The hon. Gentleman has not been deprived in any way. He was called at Question Time today. Mr. Cecil Franks (Barrow and Furness) rose--
Mr. Speaker : Yes, I suppose I shall have to hear hon. Members' complaints.
Mr. Franks : Further to the point of order by my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman), Mr. Speaker. We all appreciate your problems and accept your rulings. Will you bear in mind that you called the hon. Member for Workington (Mr. Campbell-Savours), which is a Labour voice for Cumbria, but did not call any Conservative voice for Cumbria?
Mr. Speaker : I shall do that next week.
STATUTORY INSTRUMENTS, &c.
Mr. Speaker : With permission, I shall put together the two motions on statutory instruments.
Ordered,
That the draft Crown Agents (Additional Powers) Order 1990 be referred to a Standing Committee on Statutory Instruments, &c. That the draft European Commission and Court of Human Rights (Immunities and Privileges) (Amendment) Order 1990 be referred to a Standing Committee on Statutory Instruments, &c.-- [Mr. Sackville.]
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Orders of the Day
Government Trading Bill
Lords amendments considered.
Clause 1
New provisions in connection with government trading funds
Lords amendment : No. 1, in page 2, line 23, at end insert "(5A) An order establishing a trading fund for operations carried on by a person appointed in pursuance of any enactment may provide-- (
(a) for the fund to be under the control and management of that person instead of the responsible Minister and, accordingly, (
(b) for this Act to have effect as if--
(i) the reference to the responsible Minister in section 3(1) of this Act and the first reference to him in section 4(1), and (
(ii) such other references in this Act to the responsible Minister as may be specified in the order, where they are references to him in the exercise of his function of controlling or managing the fund, were references to that person."
5.37 pm
Dr. John Marek (Wrexham) : I beg to move, as an amendment to the Lords amendment, amendment (a), after first the', insert continuing operations of the'.
Mr. Speaker : With this it will be convenient to consider amendment (b) to the Lords amendment, after managing', insert the continuing operation of'.
Dr. Marek : Amendment (a) is a probing amendment. Consideration of the amendments should not detain the House for long because in principle the Opposition have no problem with any of them. We are pleased with amendment No. 2 and amendments Nos. 3, 4 and 5 are technical or consolidation measures. Perhaps the Economic Secretary will confirm what I have said. I sympathise with the Economic Secretary who has been landed with the Bill at short notice because of the departure of the former Financial Secretary to the Treasury. We shall proceed gently in seeking some assurances.
My noble Friend Lord Bruce of Donington raised three points in Committee in the other place. One point that he made when Lords amendment No. 1 was being considered in the other place was whether a corporate body could be a person. Could the Bill be construed in such a way that a corporate body could be appointed by statute to run a trading fund or an agency? The Earl of Caithness said :
"On the first point raised by the noble Lord, I do not believe that there is a need to cover corporate bodies because the Bill refers to a person appointed pursuant to any enactment."--[ Official Report, House of Lords, 12 June 1990 ; Vol. 520, c. 229.]
I am sure that the Government have considered that point in detail and I should like clarification of it. It would cause some consternation among the Opposition if the Bill were to allow a corporate body to run a trading fund. It is important that the original intention of the Bill is made clear --that trading funds should be run by the responsible Minister. It was later discovered that some people were
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appointed by statute to run trading accounts. We accept that it would be wrong for such people to be required to hand over the management of those trading funds to the responsible Minister. We are not opposed to Lords amendment No. 1, but we are concerned about how wide it may be interpreted. Wherever possible, we want responsibility to lie with the responsible Minister, who is accountable to Parliament. If my supposition is right, it could be open to future Governments, of either party, to move trading funds so that they could be run by corporate bodies. That would introduce all sorts of problems. It raises the fear of privatisation without primary legislation, although I think that Lords amendment No. 2 reassures us on that matter.My noble Friend sought reassurance that Lords amendment No. 1 was principally concerned with the day-to-day management of the funds. He also sought reassurance that, ultimately, responsibility lay with the responsible Minister, not with some civil servant or person appointed by statute. The Earl of Caithness gave my noble Friend that assurance, but it would be nice to hear it from the Economic Secretary. Amendments (a) and (b) are linked. There is some confusion about the Lords amendment. I hope that its intention--that a person appointed by statute can run any fund-- means that he or she runs it on a continuing basis, from day to day. If a fund had to be wound up, I hope that the responsible Minister would intervene. The Lords amendment--its drafting may be defective--provides
"for the fund to be under the control and management of that person instead of the responsible Minister".
By inserting the words, "continuing operation", the sentence would read,
"for the continuing operation of the fund to be under the control and management of that person instead of the responsible Minister." That may be otiose, but it makes it clear that the day-to-day management of the fund is under the control of that person, and if it were to be wound up or if there was anything that was not part of the continuing day-to-day operation of the fund, the responsible Minister would have to take responsibility.
I look forward to hearing what the Minister has to say, first, about the points made in another place and, secondly, about the reasons for the Lords amendment.
The Economic Secretary to the Treasury (Mr. Richard Ryder) : I am grateful to the hon. Member for Wrexham (Dr. Marek) for his kind remarks. I appreciate the work done on this legislation by Lord Bruce of Donington. I shall deal first with the amendment and then with the specific points that the hon. Gentleman raised.
A fund will usually be under the control and management of the responsible Minister, who will also be carrying on the funded operations. Lords amendment No. 1 is concerned with funds for operations carried on by a person appointed in pursuance of any enactment. An order establishing such a fund may provide that its control and management be with that person. One example of that would be the Chief Land Registrar, who is appointed under the Registration Act 1925 to carry on
"the whole business of land registration under the Act." In such cases, once a fund is established the operations will continue to be carried on by the office holder, pursuant to the relevant legislation, just as they were previously. The Lords amendment relates only to the control and
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management of the funds in such cases. It sensibly provides that it may be placed with that office holder by the order establishing the fund.I understand that the hon. Gentleman's amendments stem from a concern about the winding up of a fund that is under the control and management of a statutory office holder. As with any fund, new section 4A would apply. The responsibility for making appropriate orders under section 4A will remain that of the responsible Minister. Lords amendment No. 2 puts beyond any doubt the fact that the winding-up powers are not concerned with funded operations ceasing because they are being privatised.
I shall take the hon. Gentleman's specific points in turn. His first point related to a statutory office holder. As a matter of construction, the reference to a person appointed pursuant to statute does not extend to bodies corporate. That was not the Government's intention, and they had nothing like that in mind. That question was raised in another place, but, as far as I am aware, no one has yet identified a corporate candidate that has inadvertently been caught by that provision. It should also be remembered that funds can be established only in relation to the operations of a Department of Government.
I cannot rule out privatisation of trading funds, and would not wish to do so. However, if that were to happen, it would require further primary legislation, such as happened with the Crown Suppliers. I hope that that reassures the hon. Gentleman. The Bill does not provide the means to bypass the need for further legislation, and the amendment places that beyond doubt.
Mr. James Hill (Southampton, Test) : My hon. Friend may recall--and it goes back a number of years--that a trading fund was set up for the Ordnance Survey headquarters in Southampton. I am sure that he has used that as a model of what can be achieved. It has succeeded in competing in the private market, even though it is a trading fund. It is moving forward with great prosperity and is creating a vast amount of employment in the area.
Mr. Ryder : I am grateful to my hon. Friend for that helpful observation. As he knows, the orginal legislation was passed by the House in 1973. The purpose of this Bill is to update that legislation in the light of developments that have been put in place by my right hon. Friend the Minister for the Arts, who is also responsible for the civil service. Perhaps I can add a rider to that by informing the House that the Ordnance Survey is not regarded as a trading fund. Amendment to the Lords amendment negatived.
Mr. Deputy Speaker (Mr. Harold Walker) : The Question is, That this House-- [Interruption.] We have just been debating the amendment to the Lords amendment.
Dr. Marek : On a point of order, Mr. Deputy Speaker. There was some confusion when Mr. Speaker called the first amendment. He asked me to move amendment (a) to Lords amendment No. 1. If that was the case, what you have just said, Mr. Deputy Speaker, is perfectly correct. I certainly was not going to shout, "Aye" when you put the Question on amendment (a). I do not know whether that helps you, Mr. Deputy Speaker.
Mr. Deputy Speaker : I do not need any help. I assumed that the hon. Gentleman, having been called to do so by Mr. Speaker, had moved his amendment to the Lords
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amendment. I put the Question that amendment (a) to Lords amendment No. 1 be made and there was no response other than "No", so I declared that the Noes had it. Therefore, the amendment to the Lords amendment was negatived.Lords amendment No. 1 agreed to.
Lords amendment : No. 2, in page 6, line 8, after "or" insert "while continuing to be operations of a department of the government"
Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.-- [Mr. Ryder.]
Dr. Marek : First, I should like to thank my hon. Friend Lord Bruce of Donington for moving the amendment in another place and securing its acceptance there. My hon. Friend in the other place took a great interest in the Bill, did a lot of work on it, and I am sure spent a considerable time examining it and making sure that there were no further pitfalls or loopholes in it. It has been 17 years, since the Trading Funds Act 1973, before the Government have had to introduce more legislation because of what they considered to be a lacuna in that 1973 Act. There is nothing wrong with taking careful measure of any Bill to see whether it is watertight. I am certainly most grateful to my hon. Friend Lord Bruce of Donington.
I should like to pursue the point that I raised about privatisation. I very much approve of the Economic Secretary's reply to amendment (a) to Lords amendment No. 1. He said that the privatisation of trading funds cannot occur without primary legislation.
The Paymaster General, the Earl of Caithness, did not reply fully to my hon. Friend Lord Bruce of Donington when he moved the amendment. He said that he was advised that there was no question of any possible privatisation without future primary legislation, but unfortunately he did not say it categorically. He said simply that he was grateful to Lord Bruce for tabling the amendment and recommended that the House should accept it. He said :
"It proves the diligent work which the noble Lord has carried out on this Bill. It is something that we have come to expect from him and he had not let us down. He had given careful and detailed study to this measure."-- [ Official Report, House of Lords ; 18 June 1990, Vol. 520, c. 604.]
He then moved on to another point with which I shall deal in a moment.
The Economic Secretary has already satisfied me in his reply to amendment (a) to Lords amendment No. 1. However, it is an important point, and I hope that the House will forgive me if I mention it again. Privatisation of parts of the civil service that have trading funds will not be possible without primary legislation and the House being given the opportunity to discuss the matter. I am very pleased about that.
The Earl of Caithness then talked about how annual reports and accounts would be presented. I have a letter
Mr. Deputy Speaker : Order. The amendment merely seeks to insert the words
"while continuing to be operations of a department of the government."
It is difficult to relate what the hon. Gentleman is saying to the Lords amendment.
Dr. Marek : I hope that you will bear with me for about 30 seconds, Mr. Deputy Speaker. I have the Hansard of the
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debate on Report in another place, considering what is now Lords amendment No. 2. The Paymaster General spoke about annual reports and accounts. If you bear with me for a moment, Mr. Deputy Speaker, I shall be as quick as I can.I have a letter from the Earl of Caithness to Lord Bruce of Donington, in which he makes it absolutely clear that copies of reports and accounts in the continuing work of the Government trading funds have to be laid before both Houses. Towards the end of the letter the Paymaster General states :
"If exceptionally the annual report is published separately, then the Treasury would use its powers of direction under section 4(6A) to ensure that the annual report is available to Parliament, either by laying it before both Houses or by placing copies in the Libraries of both Houses."
If those reports were made separately, it would be very useful for them to be laid on the Table of the House as they would automatically come to the notice of hon. Members. If they were simply placed in the Library, the onus would be on hon. Members to seek the information required. I hope that the Economic Secretary will assure me that the reports and accounts will be placed on the Table of the House. I have made only two quick points : the first concerns privatisation, and the second is about reports and accounts being placed on the Table of the House. I should be interested to hear the Economic Secretary's reply.
Mr. Ryder : I am happy to elaborate on the Government's commitment on privatisation as it is relevant to the Bill. There are differences of opinion between the two sides of the House, but the "next steps" agency's document made the position clear. The Prime Minister said : "Next steps is primarily about those operations which are to remain within Government Where there is a firm intention of privatisation when an agency is being set up, this should be made clear."-- [Official Report, 24 October 1988 ; Vol. 139, c.14. ]
Thus, in the rare cases when we anticipate privatisation, that will be made clear when the agency is set up. Of course, not all agencies will become trading funds, but for those that do, the position is now equally clear. Although we cannot rule out privatisation of funding operations, that would require primary legislation to deal with the winding up of funds as, for example, happened with the Crown Suppliers.
Lords amendment No. 2--an Opposition amendment that was accepted by the Government--put that beyond doubt by making it clear that the winding-up provisions are not concerned with finding operations ceasing because they are being privatised.
As for the hon. Gentleman's other point, I am happy to say to him that it would be for the convenience of hon. Members if the reports and accounts of trading funds were given the widest possible circulation in the House, compatible with the existing arrangements. The hon. Gentleman knows that we have already committed ourselves to putting those documents in the Libraries of both Houses. We shall certainly do everything we can to ensure that, compatible with the existing arrangements, they are given the widest possible circulation, outside the two Libraries, within the Palace of Westminster.
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6 pmDr. Marek : Would it be possible for them to appear on the pink slips in the Vote Office? That would make a big difference. If they appear on the pink slips, they come to the attention of every hon. Member as a matter of course.
Mr. Ryder : I have no objection to them appearing on the pink slips, provided that that arrangement is compatible with what happens in other related spheres. I shall certainly look into the matter with a view to trying to achieve that aim on the hon. Gentleman's behalf.
Dr. Marek : I am grateful to the Economic Secretary for his reply. I can ask no more than that he should look into the matter and try to achieve that aim.
Question put and agreed to.
Clause 2
Assets and liabilities of funds
Lords amendment : No. 3, in page 8, line 28, after "require" insert--
"(6B) Where any enactment (other than this Act) requires, in whatever terms, a report to be prepared for any period as to the funded operations and sent to any person, or laid before Parliament, or both or so sent or laid by any time or times, an order may provide for that requirement to be treated as satisfied by preparing the report for the financial year and sending it to that person, or laying it before Parliament, or both, as the case may be, so sending or laying it by the time or times specified in the order."
Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.-- [Mr. Ryder.]
Dr. Marek : There was a debate in the other place about whether the amendment should have been tabled. As far as both I and their Lordships were able to discover, it was tabled simply to take account of practices in the Patent Office.
I wonder whether an amendment could have been tabled simply for the Patent Office. I do not disagree with the Lords amendment, but a little information about it would be helpful. Is it just the Patent Office that is covered, or does the amendment cover other bodies?
Mr. Ryder : The amendment is intended to deal with a problem which, so far as we know, is confined solely to the Patent Office. However, the amendment would cover any other similar problem. The Patent Office is required by the legislation to produce an annual report on a calendar-year basis. The intention underlying sections 4(6) and 4(6)(a) of the 1973 Act, as amended by the Bill, is that trading funds should be able to produce and publish combined annual reports and accounts. Since the Patent Office works on an April to March financial year, which it would be likely to retain if it were to become a trading fund, if it is to meet that requirement, the Patent Office will either have to change its financial year to the calendar year or publish two separate annual reports. The amendment solves the problem by making it possible for a report that is produced for a trading fund's financial year to be treated as satisfying any other statutory reporting requirements.
Question put and agreed to.
Lords amendment : No. 4, in page 9, line 11, at end insert "(5) That Act, as amended by section 1 of this Act and this section, is set out in Schedule (Government Trading Funds Act 1973, as amended) to this Act."
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