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Lord Whitty: My Lords, I was not entirely clear as to the purpose of this amendment until the noble Lord made his opening remarks. However, I believe I am now clearer in that respect. I should point out that this is a tried and tested formulation and one that is well understood by the courts. As drafted, subsection (6) would leave no room for doubt as to its effect.

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The noble Lord is right in a very direct sense. We have set out examples in subsection (4) of the wide-ranging activities that authorities might want to undertake when using the well-being power but, as the wording of subsection (6) makes clear, this is not an exhaustive list. It also means that no other implication could be drawn. Apart from limiting the list of things set out in subsection (4), it might indicate the broad areas of activity rather than being taken as a total limit. Therefore, we feel that the word "affects" is more appropriate than "limits". With that explanation, I hope that the noble Lord will not pursue this amendment.

Lord Dixon-Smith: My Lords, this is a fine semantic argument. It seems to me that we could debate the matter for a long time and generally make no progress. We would, therefore, waste a great deal of the time of the House, which is not my intention. I am grateful to the Minister for his explanation, which I shall study. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dixon Smith moved Amendment No. 5:

    Page 2, line 25, at end insert--

    ("(7) Nothing in this Part shall empower a local authority to engage in trade other than that which is provided for in the Local Authority (Goods & Services) Act 1970.").

The noble Lord said: My Lords, this is a probing amendment. It has been tabled to enable us to explore again with the Minister what limits there are to this fairly general power--although it is not completely general--under Clause 2(1). I have a certain case in mind which prompted me to table this amendment. One could well envisage a situation where some shire district authority would take the view that certain circumstances in a particular village meant that it was worth subsidising the village shop and post office in order to keep it going--for example, where the post office was likely to be closed and, in any event, the local shop was uneconomic. Indeed, this is a prevalent situation across large areas of the country. Such a decision might well be judged to be an appropriate use of this power, and I would have no difficulty with it.

However, there just might be circumstances where an authority could decide that it was appropriate for it to run the shop and that it should itself indulge, if you like, in trading in the goods provided by the village shop. In my view, that would be an improper extension of the power and something that we should seek to avoid. Indeed, that would be trading in goods in competition with all the other retail organisations involved in that particular trade. I do not believe that any sensible local authority would actually want to handle matters in that way, but the possibility might arise.

As I said, I thought it right to table this amendment to enable us to explore exactly what limits the Government have in mind in this sort of area. We need to be quite clear where we stand. I have no difficulty at all with the idea of subsidising a village shop--in other words, you virtually invite a shopkeeper to submit a tender to the local authority for the running of the

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shop if it requires a degree of subsidy to keep it going. That sort of proposition would be in line with the sort of support that is given to rural transport in many areas. That is straightforward enough. However, the extension beyond that point would concern me. That is why I have tabled the amendment. I beg to move.

4 p.m.

Baroness Miller of Chilthorne Domer: My Lords, I speak to Amendment No. 10, which is grouped with Amendment No. 5, which we are discussing. We on these Benches disagree with the somewhat inflexible line taken by the noble Lord, Lord Dixon-Smith. Amendment No. 10 seeks to enable a local authority to engage in certain activities--which would be covered by proper record keeping--when it considers that is appropriate.

It may well be appropriate to engage in certain activities in certain instances. I take up the example of the village shop. That matter is particularly topical at the moment. A shop and post office may be faced with closure because no one wishes to continue to run it. In such circumstances it may be appropriate for a local authority to play a prime part in keeping it going, perhaps for a short time until someone else is found, or perhaps for a much longer time, if necessary, if the establishment in question serves a wide rural area. Amendment No. 10 seeks to introduce much greater flexibility for local authorities in this area. Local authorities are trying to get away from the regime under CCT which did not permit them to do anything in this regard. That regime involved them in red tape and bureaucracy and they were not even permitted to trade for the benefit of a local community.

Clearly a line needs to be drawn between a local authority threatening other local traders and engaging in activities which seek to benefit the wider community. Under the powers in this Bill and under the community planning power, a local authority will no doubt take account of the views of its local community. I believe that Amendment No. 10 is far more likely to result in local authorities being able to engage in certain activities that are seen to benefit local communities rather than being restricted by red tape as they have been in the past.

Baroness Farrington of Ribbleton: My Lords, I am afraid that we must oppose Amendments Nos. 5 and 10. There is a good deal of unnecessary confusion, both inside and outside the House, about the effect of the well-being provisions on the ability of local authorities to engage in trading activities. Therefore it may be helpful to set the record straight.

At present, authorities' ability to trade in goods and services is controlled by the Local Authorities (Goods and Services) Act 1970. This permits authorities to charge for goods and services only where these are provided by the authority to a "public body" as defined by that Act. The goods and services Act is a permissive piece of legislation. It does not therefore contain any prohibition, restriction or limitation that would bite on the new well-being power by virtue of Clause 3(1). In other words, once Clause 2 comes into

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force, local authorities will be able to provide goods and services to anyone. It will no longer matter whether they are a "public body" as defined by the 1970 Act, or not.

But, while they will be able to provide goods and services to anyone, they will not be able to charge for them. Clause 3(2) specifically prevents authorities from using the well-being power to raise money. Therefore they will only be able to charge for goods and services using the power in Section 1(3) in the 1970 goods and services Act and this limits charging to circumstances where authorities are trading with "public bodies". In other words, nothing in the current Bill will change the current ability of local authorities to engage in trading. Amendment No. 5, is, therefore, totally unnecessary.

Amendment No. 10 would, on the other hand, dramatically change the position by ensuring that, where they exercised their well-being powers, authorities could provide goods and services to anyone--not just public bodies--and could charge for the goods and services so provided. I appreciate that the noble Baroness will be disappointed--and the noble Lord, Lord Dixon-Smith, presumably pleased--to hear that this is not an amendment that the Government can accept. It is altogether too sweeping. However, the noble Baroness may be somewhat reassured to know that the Government are looking for some sensible relaxation of the circumstances in which authorities can charge for goods and services.

The Government are currently exploring these issues with business, voluntary organisations, local government and the trade unions. As we said during the passage of what is now the Local Government Act 1999, the powers in that Act enabling us to relax any legislative provisions preventing authorities from securing best value give us an opportunity to review the legal framework covering the provision of goods and services by local authorities. We are currently looking at the circumstances in which authorities might engage in such activities; the limits that should apply; and the safeguards that ought to exist in order to protect the taxpayer and--as the noble Baroness, Lady Miller of Chilthorne Domer, recognised--ensure fair competition. We intend to issue a consultation paper on these issues in the spring. I feel sure that the points raised in this brief debate by the noble Lord and the noble Baroness will contribute to that consultation. With that reassurance, I hope that the noble Lord, Lord Dixon-Smith, will be prepared to withdraw his amendment and that the noble Baroness will be persuaded not to move hers when we reach it.

Lord Dixon-Smith: My Lords, I am grateful for the noble Baroness's response, which gives me comfort. I look forward with interest to seeing the forthcoming consultation paper. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Lord Strabolgi): My Lords, I should inform the House that if Amendment No. 6 is agreed to, I cannot call Amendment No. 7.

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Clause 3 [Limits on power to promote well-being]:

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