Clause 12 - Power to invest
Local Government Bill
10:30 am
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
The Minister was suffering from premature something there. [Interruption.] I did not say dementia—I thought that the Under-Secretary was suggesting dementia. I have a simple question for the Minister about definition. Clause 12 states that a local authority may invest
''(a) for any purpose relevant to its functions under any enactment, or
(b) for the purposes of the prudent management of its financial affairs''.
I just want to probe the word ''invest''. I used to think that I knew what it meant, but the Chancellor of the Exchequer has corrupted the word ''invest'', as has the Prime Minister.
Over the last five or six years, I have heard about the Government ''investing'' in nurses' pay, for example. Nurses' pay is a very worthy thing to spend money on, but by anyone's historic definition that was not an investment. An investment was the sinking of money into an asset that would yield a long-term return. In the good old days, that word would never have been used to refer to revenue spending, but the Chancellor and the Prime Minister have used the word differently over the last few years.
I therefore thought it important to ask the Under-Secretary to clarify what the relevant definition of ''invest'' is in clause 12. If it is the definition used by the Chancellor and the Prime Minister, the clause could be seen to be giving local authorities the power to ''invest'' in higher wages for their staff, for example, but I assume that that is not intended.