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Lord Sainsbury of Turville: My Lords, there is a series of issues which relate to the Higgs report. Many of them depend on the various bodies that are concerned with practice in this area. I cannot give a specific date on when they will be implemented.

Baroness Miller of Hendon: My Lords, given that the Minister has indicated that the Government have already given the power to shareholders to have a say on remuneration, particularly by voting at meetings, will he go a step further and state the Government's view on the huge remuneration in nationalised industries where, after all, the Government are the shareholder? Would he answer that with reference to the former directors of Railtrack?

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Lord Sainsbury of Turville: My Lords, there is always a clear issue of difficulty here, which is that if one is going to have public services which require considerable management skills, in order to obtain people to run those corporations one is required to pay them at least a salary in some proportion to the pay of other people. It is not a sensible strategy to have second rate managers because they are not paid enough.

Lord Faulkner of Worcester: My Lords, does my noble friend agree with the comments of the Deputy Prime Minister, addressing the Local Government Association on 4th July, when he drew attention to the large increase in the salaries earned by chief executives of certain local authorities? He pointed out that they were now earning more than the Prime Minister. Does the Minister agree with Mr Prescott's view that this is having a deleterious effect on wage bills in local government generally and that it is time that proper criteria were established?

Lord Sainsbury of Turville: My Lords, I can only say that I have always felt that the Prime Minister was underpaid.

Lord Tebbit: My Lords, will the noble Lord take time to circulate to all the chairmen of remuneration committees of public companies his reply concerning the need to pay market salaries to achieve an appropriate quality of management? That would save them having to write it out themselves before the AGM.

Lord Sainsbury of Turville: My Lords, I am not certain that I understand the noble Lord's question. It is always difficult to know in exactly what direction its underhand nature is. Clearly, there is a problem, alluded to by my noble friend, of a constant chasing of every company that says it has to be in the top quartile. The combination of that and remuneration experts who are constantly talking up salaries provoke a difficult situation which will be resolved only when shareholders stand up and say that this nonsense has to stop.

Lord Dubs: My Lords, is my noble friend really convinced that there is a direct relationship between the quality of management and the salary that is paid? Surely it is not as direct as that? If it were, what about this House, which is unpaid?

Lord Sainsbury of Turville: My Lords, as an unpaid Minister, I am not certain that I can make any comment. I do not believe that there is a direct correlation. There is a correlation where, if one pays significantly less than the market, one will probably get second-rate managers.

Hunting Bill

Brought from the Commons; read a first time, and ordered to be printed.

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Local Government Bill

3.28 p.m.

Consideration of amendments on Report resumed.

Lord Hanningfield moved Amendment No. 15:

    After Clause 114, insert the following new clause—

"PARISH COUNCILS (MODEL CODE OF CONDUCT) ORDER 2001 (1) The Parish Councils (Model Code of Conduct) Order 2001 (S.I. 2001/3576) shall cease to have effect.

    (2) This section shall come into effect on the day on which this Act is passed."

The noble Lord said: My Lords, Parish Councils are the first tier of government. They do enormous good work for their communities, often for little recognition or reward. They do that because they are made up of public minded citizens with a real sense of community, who wish to make a positive impact on their localities. The parish councils' code of conduct requires all parish councillors to register interests, including their property, their employment and their business interests. It also requires them to register the interests of their spouses and relatives—and possibly friends. Minor infringements of the code can end up with the National Standards Board of England. The code places parish councils under a duty to make written allegations about the conduct of other councillors.

No-one disputes the need for probity in public life, but there are times when regulations such as these go too far; they are too heavy-handed and wholly disproportionate to that which is being regulated. When that happens it damages the institutions that we all wish to see supported. The situation with parish councils is potentially serious. In May 2002 the University of Aberystwyth published an Economic and Social Research Council report on community governance in England and Wales. That report found that nearly 40 per cent of parish councils did not have enough councillors to fill their seats and that the situation had been in decline for more than a decade. The report concluded:

    "It has been suggested to us that one factor behind the lack of candidates is that being a parish councillor is seen as an onerous task with little reward. The introduction of the new code of conduct may prove a further disincentive".

For the most part, parish councillors are giving up their time for free to deal with very local issues. They do so because they are committed to the community ethic. We need to encourage more people to take that view. The introduction of this code by the Government has had the opposite effect: it has made a difficult situation worse. It threatens to undermine one of our oldest institutions of government in this country. I hope the Minister will consider the amendment. I beg to move.

3.30 p.m.

Baroness Maddock: My Lords, we do not support the amendment. It was very interesting that in moving it the noble Lord, Lord Hanningfield, said that parish councils deal with very local issues. They do. Many

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have very local interests as well. It is absolutely right that people in the locality should know what those interests are when decisions are being made on their behalf in the area. It does not matter at what level one represents and holds public office; it is absolutely right that one should be transparent about every interest one has. If people are not prepared to serve their local community on that basis, so be it, but I think it is absolutely right that they should declare every interest that is not typical.

The Earl of Erroll: My Lords, if this is the issue I think it is, people have been bending my ear about it. They have said that it is a ridiculous situation in which people who are experts on a particular subject in an area—say on property or whatever—are not allowed to take part in debates on it. As a result one gets people debating the issue who do not know anything about it, and people who do know about it have to withdraw. The thing is all going slightly over the top. If one just had to declare an interest, it would work.

Apparently, if I am right—and it may be that people are misinterpreting the regulations—at the moment, one gets the experts having to withdraw, whereas in the House of Lords we declare our interests and you are then accepted as an expert and people listen to you.

Baroness Hanham: My Lords, I want to reinforce what my noble friend Lord Hanningfield said. I do not think that it will have escaped the notice of Ministers that there has been great concern among parish councillors. That concern is not related to declaring an interest or being open; it is partly to do with the fact that councillors are responsible to the National Standards Board of England. Every other authority is responsible to its own national standards boards in the first instance and then to the National Standards Board of England ultimately if there is a major complaint. That is not so with parish councils. Their overseeing and over-supervising—I suppose I can put it in that way—body is the National Standards Board of England.

Amendment No. 15 would get rid of that model code. We probably accept that in its place there would need to be another body, but there would need to be some discussion about it because the issue has not only caused offence but has also caused people not to stand for parish councils.

This model code was not meant to have that effect. In our view it needs reviewing at the very least. The best way of reviewing it is to remove it for the time being and to go back and reconsider it in the light of what parish councils do, who they are, what they give to their community, what levels of budgets by and large most of them are dealing with and what powers by and large they are operating under. I support very much the amendment put forward. I hope that the Minister will be more sympathetic about its withdrawal on the basis that it might be reconsidered in another way.

Lord Bridges: My Lords, I live in a parish where the model code of conduct has produced a disproportionate effect. I am not a parish councillor

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myself. Nor is my wife. But we made a point of getting hold of and studying this document. I came to the conclusion that there is something of a storm in a teacup about this matter, or, as they say in Italy, "a tempest in a wine glass". It is largely a question of insensitive drafting. When some serving councillors looked carefully at the words, they felt they could not possibly continue.

If the order is written in a rather more sensitive and less bureaucratic way, I think the problem can be overcome. Clearly, there should be a declaration of interest. I do not think the prose in this model conduct has had quite the right effect. A further effort could produce better results.

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