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Lord Hanningfield: I thank the Minister for those comments. Of course, one totally accepts, and is pleased, that computer software and so forth are considered capital expenditure. What concerns us, in particular, is the manner in which this is presented. The Secretary of State might suddenly decide to give advantages to one authority over others because that was the way he felt at the time. For example, the Secretary of State might say that a great deal of capital expenditure could be used for education provision, and choose the authorities which they wanted to do that to.

Because of the recent unpleasant experiences in education funding, at present, one is very suspicious of these types of clauses. I accept that at times it is appropriate that some capital expenditure could be used and should be used for revenue help for an authority. But it should be general for all authorities rather than for a favoured authority of the Minister of the day receiving preferential treatment. That is how it could be read. I accept that it is already in current legislation and that the Secretary of State needs powers

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to be able to help authorities. But the way in which it is presented here, it appears as though it could be given to some authorities and not others. That is our concern.

Lord Rooker: However much Labour might have argued during the long 18 years in Opposition, it is not possible that Ministers operated on whims to look after their own. We know that it cannot be done in that way because my noble friends usually slip in and have something to say. Therefore, the noble Lord, Lord Hanningfield, is being very unfair in talking about Ministers operating on whims in respect of individual authorities. As the noble Lord raised this matter, I must point out that the very freedoms that exist under the legislation we are perpetuating are the freedoms that allow his trust to buy and sell its paintings. It is exactly the same freedom for the local authority. I rest my case.

Baroness Hamwee: I am really sorry that I missed the start of today's proceedings. There was obviously a lot of discussion which took us into interesting realms. Earlier today, I thought that I should declare an interest in not being a leader of an authority, having been a leader of an authority. Therefore, I understand the concept of capitalisation.

What the Minister said has reassured me quite a lot and has helped to put the matter into context. Inevitably, because it is what oppositions are supposed to do, I retain just a sense of unease and a feeling that one must keep on asking for reassurance and asking how differences might be applied. But I thank the Minister for what he said. As regards proper practices, I understand how it relates to Clause 21. It is not always easy to know that a phrase is defined in a particular way because one does not know whether to look back, look forward or look at the interpretation clause at the end.

I am sorry to have taken the time of the Committee, but I have made the point because practitioners need to be able to handle legislation of this complexity.

Lord Rooker: I know that parliamentary counsel listen to what Members say. There is no science in drafting Bills—it is an art. The fact that there is no index, as opposed to a contents page, is always a problem in finding one's way through a Bill, particularly if it refers to further legislation. The definitions are used throughout the Bill; they are not found in one place. Therefore, I think that the noble Baroness has made a wholly legitimate point which should be taken up by those charged with drafting the Bill. I might add that those who draft the Bill are not the Government, of course. Parliamentary counsel is a separate body—of fine upstanding people, by the way. I have been into the inner sanctum as a Minister. I have made good friends there. I have enormous respect for them. But they do not have to stand at the Dispatch Box sometimes defending the way in which a Bill is drafted. We defend the policy. But putting policy into

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legislation and the rules of drafting Bills make it extremely difficult and sometimes cause amendments to be tabled that would not otherwise be needed.

Baroness Hanham: I slightly despair because I think I made the same point during the course of the Regional Assemblies (Preparations) Bill.

Lord Rooker: Yes, I am sure.

Baroness Hanham: I hope that it was recorded in Hansard. Whether it was or was not, I hope that this exchange is recorded in Hansard because, ultimately, something might happen if all the comments are brought together from the different Bills.

Baroness Hamwee: I am grateful for the Minister's remarks. I have enormous respect for parliamentary counsel who clearly work fantastically hard—through the night as we move into the summer. While we are on the subject, there is a similar problem when different counsel draft different parts of the same Bill because the style changes and that makes it even harder to navigate. Perhaps we had better bring apples in for parliamentary counsel on the next day of Committee. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 62 and 63 not moved.]

Clause 16 agreed to.

Clause 17 agreed to.

Clause 18 [Local authority companies etc]:

[Amendment No. 64 not moved.]

Lord Hanningfield moved Amendment No. 65:

    Page 8, line 28, at end insert—

"(5) A local authority may make and issue a guarantee in respect of membership of a company incorporated under the Companies Acts either operating in its area or operating as a local authority association.
(6) Any guarantees issued under subsection (5) above may not exceed a total value at any one time equivalent to one-fifth of the expenditure limit applicable at that time under section 137 (as amended) of the Local Government Act 1972.
(7) The provisions of Part 5 of the Local Government Act 1989 (local authority controlled companies) shall not apply in the case of a company limited by guarantee which is either one with charitable objects or is a local authority association."

The noble Lord said: Amendment No. 65 refers to parish and town councils. The Government have taken a number of steps to improve the position of parish and town councils during the past few years. I hope that they will consider this amendment sympathetically. At the moment, parish and town councils are unable to join fully in the operating partnerships of companies limited by guarantee and, of course, a great number are much bigger than district councils which are allowed that provision within this legislation. In addition, many charities and regeneration partnerships are incorporated in this way. That means that on many occasions the most local tier of government is rendered incapable of contributing to the wellbeing of its community. This amendment would remove that obstacle and would

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enable parish and town councils to participate in these partnerships and to make a real contribution to their local communities.

While I am on the subject of parish councils, I should like to fly a little kite on which I would like the Minister to comment. It has been suggested that the minimum age for standing for election in parish councils should be reduced from 21 to 18. That would provide an opportunity for young people, particularly in rural and smaller communities, to participate and reinvigorate their local areas. I hope that the Minister might comment on that point. This is very much a pro-parish council amendment and I hope that the Government might think fit to support it. I beg to move.

5.45 p.m.

Lord Rooker: As regards the final question asked by the noble Lord, Lord Hanningfield, about the minimum age for standing for parish council elections, I do not know anything about that proposal. But I do know that the minimum age limit of 21, in which minors shall not be elected, is in an Act of Parliament, currently on the statute book, dated 1675. Time for renewal, I think. That is the Act of Parliament that sets the age. One cannot be elected to the House of Commons until the age of 21. That is barmy. The side-title of the clause is "Minors shall not be elected". This is a matter that I researched some years ago—for reasons of which I shall not bore Members of the Committee. I do not know whether there are any proposals but I presume that there would be plans to update current legislation that is more than 300 years old.

Turning to the point of substance, Amendment No. 65 seeks to add a new subsection at the end of Clause 18. That would give authorities power to issue guarantees in respect of companies, subject to certain safeguards. We are not clear about the exact intention, although the noble Lord has now spoken to it. However, we believe that authorities have sufficient powers under existing legislation to work in partnership with companies of the kind mentioned in the amendment. In appropriate circumstances, that could include offering guarantees on their behalf to enable them to raise loans more easily. We do not think that it is practical to specify the limits to such powers on the face of the Bill, as the amendment seeks to do. The prudential system should offer a sufficient safeguard against reckless use of guarantees.

Any authority offering a guarantee to a company will have to assess the risks of that guarantee being called and the likely cost implications for the authority. Obviously, such revenue implications will need to be taken fully into account when the authority calculates its capacity for affordable borrowing under the prudential rules. In the event of a national limit ever being imposed, the regulations enforcing it could make special provision relating to guarantees if it was deemed necessary at the time.

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The regulations setting a national limit could exempt specific kinds of companies, such as those with charitable objectives. There are certain exemptions of that kind under the present system and we would expect them to be carried forward into the new system. We think that that is best done in regulations rather than on the face of the Bill. I hope, with these assurances, that noble Lords will withdraw the amendment and enable us to move quickly on to the next amendment on which I have some really good news.

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