Localism Bill

Baroness Hamwee Excerpts

Monday 20th June 2011 Lords Chamber

[Lord Taylor of Goss Moor]

My Lords, I support my noble friend’s amendment, because it goes to the heart of the fundamental issue of how our body politic and administrative systems work. The amendment essentially sets out what we want to do in a Bill called the Localism Bill, before we discuss how to do it. That is an important reminder of what we should put in front of those who draft these things, because in this country, unlike many others, when we talk about empowering people, the assumption is that somehow Whitehall has to define every element of it, in particular because it may otherwise be subject to legal challenge. Other countries give a power of competency at a local level and look to those who exercise those powers to defend the manner in which they have done so rather than rely on the crutch of how the national tier has defined what they should do.

By definition, having a Bill of this size that calls itself the Localism Bill illustrates the flaw inherent in our body politic: we do not understand the principle of devolving decision-taking to others or that that decision-taking has to involve devolution of responsibility for the “how”, not just the principle of the “what”. One does not have to have spent much time talking with the Local Government Association or others to realise the many reservations of powers to Ministers that are inherent in the Bill, which is an inch-and-a-half thick. It cannot be right that a Bill that is about empowering local communities has to be defined in that kind of detail, although I suspect that that is not so much a flaw of the Bill but of the system—let us not forget that the Bill amends many other Acts and, if they were all here, I do not think that I could hold the Bill in my hand.

[Baroness Hamwee]

My Lords, I take issue with my noble friend Lord Taylor only to the extent that we should start with not just the “how” but the “why”. It does not matter what you call something, provided you do not then use your term as an excuse for sloppy thinking. That is a danger. It would be easy during our debates on the Bill to say that such-and-such is local or localist, without analysing what that means and what it should mean in each context.

The noble Lord, Lord Jenkin, referred to Pepper v Hart. I must say that it worries me when people who have not been closely involved with our proceedings say, “Parliament clearly must have thought such-and-such”, and one wonders whether Parliament has thought at all about a particular issue.

Representative democracy is so valuable for lots of reasons, but I have written down four: balance, priorities, nuance, and wide objectives. When the noble Baroness, Lady Farrington, spoke about community groups being self-selecting, I thought that she was going to say that they were self-serving—just occasionally, they are and I, too, recognise the examples she gave. The issue of bail hostels precluded my party from taking control of our local authority in 1978. My noble friend Lady Tonge was elected in a by-election shortly afterwards, having failed to be elected at that earlier point. However, the issue was of concern in a community that one should have thought was most sympathetic to the problem that the establishment of the bail hostel was addressing. The centre has a role, but its role is not to protect local people against their own local authority.

The noble Lord, Lord Jenkin, asked what the clause would achieve. It sets criteria against which the detail of the Bill can be tested. Something that is superficially local or localist is not sufficient.

[Lord Elystan-Morgan]

My Lords, I have considerable sympathy with the sentiment behind the proposed new clause. Ever since I was a schoolboy, I have been arguing for devolution in one way or another, and I have not changed. In the past few months, in regard to the boundaries Bill, the police Bill and the Public Bodies Bill, a great deal of the House’s time has been taken up by me arguing devolution points, as I am sure the noble Lord, Lord Taylor of Holbeach, will remember. My sympathies are all with the new clause, but a constitutional issue of immense magnitude is raised by it.

Pepper v Hart, as mentioned by the noble Lord, Lord Jenkin, caused a massive upheaval in the whole concept of interpretation by a court of what was contained in an Act of Parliament. Up until then, the same rule had abided for utterings in an Act of Parliament as for the interpretation of a will. It was the golden rule of interpretation. That was very simple. It was that the strict grammatical meaning of the words should determine the matter unless there was some obvious or latent ambiguity. In other words, it was in any event restricted to solving the problem that arose from an ambiguity. It was not of general content. When Pepper v Hart came along, it did not change that rule; all it did was change the machinery by which one tried to deal with that conflict.

The new clause, whose intentions are admirable, seems to be an attempt to go well beyond that. It is not confined to situations of latent or patent ambiguity but deals with a whole host of general situations. I will be corrected if I am wrong, but it seems to be an attempt to act as if we had a written constitution at the limits of the Bill, and those limits are very wide indeed. But we do not have a written constitution. Therefore, we could have endless argument as to whether there is a patent or latent ambiguity. To speak for a moment of my former occupation, I have no doubt that clever lawyers would seek to persuade courts that there were ambiguities and conflicts where there were none. Here we have a presupposition that one can pretend in legislation that there is a written constitution, as set out in the new clause, when in fact we do not have such.

The new clause is titled “Purpose of this Act”, but the purpose of an Act is set out in its preamble, which is not part of the Act itself. It is very much like the memorandum of a limited company: it sets out the metes and bounds of what can be contained in the legislation. With the best will in the world, the new clause, laudable though it is, would, if carried, create a massive constitutional problem to which there is no real answer.

--- Later in debate ---

[Lord Beecham]

My Lords, I, too, declare an interest as a councillor in Newcastle upon Tyne and as a vice-president of the Local Government Association. A week ago in your Lordships' House, the government Chief Whip lamented the fact that not enough legislation was being debated in Grand Committee. Of course, it would have been quite wrong for this Bill to be assigned to Grand Committee. However, this debate could hardly be better placed than in Grand Committee in the Moses Room. After all, that Room bears a portrait of a majestic, bearded figure bearing tables of stone on which are incised 10 commandments.

This afternoon, the noble Lord, Lord Greaves, comes to us not with 10 commandments but with 10 criteria by which this Bill is to be judged. Try as I might—and I have tried—I cannot find very much to disagree with. It is something like 120 years since Sir William Harcourt, a distinguished Liberal Chancellor of the Exchequer, proclaimed, somewhat optimistically from one point of view, or perhaps pessimistically from another point of view, that, “We are all socialists now”. Nowadays, we are all localist, but that definition of localism is, to put it mildly, somewhat elastic. I think the noble Lord, Lord Greaves, has set out as good a definition as one might reasonably expect. If I had a reservation, it would be that in proposed new subsection (1)(d) in the amendment the reference is to,

“minimum standards for the provision of public services”.

I accept that that would be a partial definition, but I think one needs to look at minimum entitlements in addition to minimum standards. Standards imply provision of a service; entitlements are a somewhat broader concept that would, for example, avoid us reverting to a 19th-century poor law view in which benefits are calculated differentially across the country. Indeed, there is a case for variation, and I have sometimes thought of promoting a society for the preservation of the postcode lottery because it seems to me that localism of any definition implies different choices according to local circumstances. I therefore welcome the thrust of this proposed new clause.

[Baroness Hamwee]

Would the noble Lord agree that a better term might be “postcode democracy”?

[Lord Beecham]

I would not say that it is a better definition, but I would accept it as an additional definition. However, the spirit is shared across the Chamber.

The key to the noble Lord’s amendment is surely the emphasis on representative local democracy. That is what local government is and must be all about. That is what, as we go through this Bill, we shall see is in danger of being significantly undermined, both in the Bill’s provisions and in some of the current policies that are being applied. Representative local democracy is different from government by referendum of the kind that we sometimes see in jurisdictions such as Switzerland or California, but we will debate those matters later.

I think the noble Lord, Lord Shipley, was entirely right to borrow my phrase about the atomisation of local government. There is a real danger in this Bill and in other legislation that is currently being debated in Grand Committee and other places that that will be a feature. He is also right to say that all government departments need to adopt an integrated approach. In that context, it is worth reflecting on what appears to be happening to what is now called community budgeting and was called total place. There is little evidence, it seems to me, certainly based on an Answer that I received from the Minister, that anyone in government, apart from the Department for Communities and Local Government, is taking this very seriously, but it is a serious issue and I certainly wish the Minister well in her efforts to persuade her colleagues to sign up effectively to it. In that context, if we are talking about local government promoted and administered on the lines that the noble Lord’s amendment suggests, we need to look closely at what is happening in that regard.

Having said that, I think there are difficulties in the noble Lord’s amendment as an amendment. The noble Lord, Lord Jenkins, and other noble Lords, including the noble Lord, Lord Elystan-Morgan, have pointed out the—

--- Later in debate ---

[Baroness Hanham]

My Lords, I am tempted to thank the noble Lord on the opposition Benches for answering the question for me. The noble Lord, Lord Beecham, has put his finger absolutely on the button: there are many areas where local government can help overseas. In fact, going back to my own days in local government, I remember well that we gave enormous help to the setting up of local government in a place called Mbale in Uganda. We had exchanges between officers on my council and officers from Mbale. We taught them how to start and set up a rates system and a community charge system. So there is that, as well as the help abroad for people in emergencies. There are all sorts of areas where this power is necessary.

My friend opposite has done well to point out that there are times when this would be valuable, but also that what we are talking about is a general power of competence and, whether or not it was available under the well-being power, it is reiterated under this power to ensure that there is no mistake about it.

Amendment 2 attempts to limit unnecessarily the extent of the general power of competence by restricting the exercise of power to the United Kingdom only. Amendment 3 also attempts to limit unnecessarily the extent of the general power, by requiring that the authority be able to demonstrate that activity has directly benefited the authority, its area or persons resident. If you are benefiting someone or a country abroad with your help, I hope you would also be affecting your residents, who would be glad that you were doing so.

The effect of the amendments is to attempt to turn this into a well-being power. We need to give local authorities confidence in the powers available to them. Rather than grant a power to do specified things, the new power is drafted on the basis that local authorities will be able to do anything that an individual with full capacity can do. That is the general power of competence, and that is the way that it is drafted. We believe that this will give local authorities freedom to act in the interest of their local communities and to generate efficiencies and savings, the benefits of which will be passed on to those communities. I would not be willing to accept the amendment and I hope that the noble Lord will be happy to withdraw it.

[Baroness Hamwee]

My Lords, before my noble friend responds, perhaps I may ask the Minister about Amendment 3. I entirely understand that a local authority should be able to do something that is only indirectly for the benefit of its residents and I understand that the Government might want to make sure that a local authority is not open to a claim that what it is doing is not, even indirectly, for the benefit of its residents. Is that the sort of technical protection that lies behind these words? Surely what a local authority does should be at least indirectly for the benefit of its residents, even if there is disagreement as to whether something is for the benefit of its residents. In the minds of the people who are taking the decisions, that must be the case, must it not? Perhaps this is a technical protection, which I had not understood until the Minister spoke.

[Baroness Hanham]

My Lords, of course we expect councils to act in the best interests of the communities that they serve, but we do not believe that it is for the Government to dictate what that means. Local authorities are, as we know, accountable through the ballot box and the other provisions of this Bill, not to mention our system of administrative law, which requires the statutory powers for any public authority to be exercised reasonably, in good faith and for proper purposes only. I think that that covers the questions that my noble friend Lady Hamwee has asked and sets into context the provisions in the Bill.

--- Later in debate ---

[Baroness Hanham]

My Lords, I thank my noble friend for his question. The general power is drafted on the basis that local authorities will be able to do anything that an individual might do, other than that which is specifically prohibited. In practice, this means that local authorities will be required to act in accordance with statutory limitations or restrictions. This is not surprising as we would not want local authorities to be completely outside the law.

Clause 2(2) sets out that limitations in legislation apply to the general power but draws a distinction between pre- and post-commencement limitations. Restrictions in post-commencement legislation will apply to the general power only where the drafting of the new legislation is clear that this is the policy intention. Amendment 6 would remove the requirement that local authorities exercising the new power act in accordance with any restrictions. Amendment 9 removes the definitions of post- and pre-commencement limitation from the clause.

Some restrictions on the activities of local authorities are obviously needed—for instance, a council should not have free rein to override the rights of others and these should be set out in the clearest terms—to ensure clarity for local authorities and avoid the uncertainty that has led to legal challenges to local authority powers in the past. That is what these subsections seek to achieve. We cannot require pre-existing limitations to expressly refer to the general power but, where these are found unnecessarily to restrict the general power, they can of course be removed following consultation. Amendment 7 would allow local authorities to decide their own governance arrangements and Amendment 8 will allow local authorities to use the general power to further contract out its functions.

We believe that it would be inappropriate that local authorities should be entirely free to change their governance arrangements. The Government set the overall governing structures of local authorities while still providing them with sufficient flexibility to decide on the most appropriate arrangement for their individual circumstances. This ensures democratic accountability and that transparent and workable arrangements are put in place. Arrangements for discharge of functions remain subject to existing legislation. Contracting out of functions will continue to be permitted in specific cases. The noble Lord asked specifically why local government should not be able just to make its own decisions about its governance. The answer is that the Government are right to be able to set the overall governing structures of each local authority.

[Baroness Hamwee]

I am puzzled by the answer about contracting out. Is not what is important that a local authority ensures that a particular service is delivered, rather than how it delivers it?

[Baroness Hanham]

My Lords, contracting out is clearly one of the ways in which a local authority can carry out its services but it will still be subject to the Deregulation and Contracting Out Act 1994. Those provisions are not being repealed, so they will continue to be part of the legislative control that will be maintained on the general power.

--- Later in debate ---

[Lord Beecham]

My Lords, I endorse the amendments and the questions that the noble Lord, Lord Tope, has asked because it is far from clear what the import of these provisions will be, particularly in relation to charging. Do the costs of provision allow for just the basic costs or would they include the cost of replacement, renewal, training and reinvestment? The definition in the Bill seems very narrow. Perhaps the Minister would agree to take it away and look at it. I do not think that there is a lot between us on this. We on this side are not seeking, and nor do I think is the noble Lord, to encourage a position where the provision of a service is translated into a commercial enterprise, but the boundaries are perhaps less obvious than they might first appear. I should have thought it would be possible to reach an accommodation that gives sufficient tolerance to allow a surplus to be reinvested into the service as opposed to something that might be distributed elsewhere.

[Baroness Hamwee]

My Lords, “the costs of provision”, the term used in Clause 3(3), could mean only the direct costs of provision or it might mean the indirect, back office costs and so on. Can the Minister help me on the exact import of the term? My second question concerns how this provision fits with Clause 4, which deals with doing things for a commercial purpose. Is there some sort of provision that falls short of doing things for a commercial purpose but which is outlawed by Clause 3(3)?