Localism Bill

Baroness Hanham Excerpts

Monday 20th June 2011 Lords Chamber

[Lord Beecham]

I sincerely apologise to the noble Lord. I sometimes felt closer to him than to the former noble Lord who does have an “s” at the end of his name. He and other noble Lords referred to the implications of incorporating this amendment into legislation. There are difficulties in that respect. To refer for one moment to my previous argument about the integration of government, that will not be made any easier by the abolition of government offices, which were a very useful mechanism for two-way information flow between central and local government.

I return to the form of the amendment in a constructive spirit and ever willing to help cement relations on the government Benches between the two partners to this coalition. Bearing in mind, of course, that one of the great localists was Joseph Chamberlain—who started life as a municipal socialist and Liberal and became a Liberal Unionist and very much part of a significant coalition which did great damage to the Liberal Party—it is surely possible to bring the two views together. Without necessarily incorporating the terms of this amendment into the Bill, it would be possible to follow the alternative method implied by the noble Lord, Lord Jenkins—Lord Jenkin—which was for the Minister to make a statement.

If the Minister were to make a statement saying that these are acceptable propositions about localism and, taken together, broadly constitute a reasonable definition of localism, surely that would suffice to meet the test of legality referred to by the noble Lords, Lord Jenkin and Lord Elystan-Morgan. It would reinforce the import of these propositions as criteria against which, if necessary, the legislation and Acts under it might be interpreted—if necessary, in the last resort—by the courts.

I hope and anticipate that the noble Lord will not press his amendment to the vote, but it would be helpful if the Minister at least indicated support for the principles about which there has been very little difference in today’s debate.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, I thank everybody—it practically is everybody—in this Committee for starting this Bill off so thoughtfully, as the speeches have been today. Mind you, they have been mostly Second Reading speeches rather than a straightforward debate on an amendment. None the less, it has been an interesting and informative time.

It will perhaps not surprise the Committee that I am not going to accept the amendment, nor do I think that it is appropriate from this position to assert that I am happy with the principles underlying this amendment. If I am not careful, if I say that I support it, we could be landed with a series of judicial reviews, the Minister having said that the principles were all absolutely fine—I am not going to do that. I accept that somewhere and in some of them there is the spirit of localism and that is really what we are looking at. There really is no way that one can start a Bill with a purpose such as this because it will never measure out exactly what the purpose of the legislation is, and it rather puts one into a straitjacket for the rest of the debate.

Having said that, perhaps I may move on to the debate. It was suggested that localism is ideological, but it is not—it is extremely practical. For a long time we—certainly those who are in local government, and I declare an interest as I have been in local government—have inveighed against the centre and said that we should have much more powers in local government and be given much more responsibility. That is what the Bill does. Its purpose is to pass down as much as possible to local areas, not only to local government but also to neighbourhoods and communities.

That does not bypass local government. By getting neighbourhoods and communities involved, there is a better and more democratic discussion. Views are better understood and put forward. As for the comments of the noble Baroness, Lady Farrington, on neighbourhoods making decisions, the decisions she mentioned would have been made in conjunction with the local development plan or the strategic plan and could not have been made by a neighbourhood on its own. That is tantamount to understanding that local councils will not be bypassed by what is going on.

Local democracy, by definition, is the involvement of as many people as possible. Too often there is complete disinterest in local areas about what local government is doing because no one believes that the functions belong to local government rather than central government. I do not believe that that will be the case by the time we have finished considering the Bill.

There has been support across the House for the measures in the amendment. My noble friend Lord Lucas said that the Bill represents small steps to localism, and I agree that we are on the way to achieving that. The noble Lord, Lord Shipley, referred to the grave danger of confirming localism by atomisation, although the point may have been raised originally by the noble Lord, Lord Beecham, who described it as involving “little platoons”. But do we really believe that neighbourhoods and communities are little platoons? Do we not believe that they are what make up local areas and communities, and should we be ignoring what they say? The Bill gives the electorate ample opportunity to take part in democracy and make sure that its voice is heard.

I turn to the specific questions. I was asked whether a council tax referendum could be used to increase rather than reduce this tax. The purpose of the council tax referendum is to replace the very unwelcome capping regime which I think we all agree was to the detriment of local decision-making. The council tax referendum would ensure that if the council wishes to put up council tax more than is recommended, it will have to be at the behest of the local community. The noble Lord, Lord Ouseley, mentioned reinforcing local democracy, which again I think I have covered. As we go through, we will see how this reinforces local democracy.

I think that my noble friend Lady Hamwee—although I am not too sure where my noble friends are at the moment and where they are not—also covered the point about representative democracy. My noble friend Lord Dixon-Smith came back to the fundamental debate, which is that by producing such principles there is a risk of destroying what the Bill is trying to do, and I agree with him. The Bill does not discuss local government finance. Indeed, noble Lords know that a review is going on at the moment, so it is not appropriate in this Bill.

I have covered most aspects of what has been raised in the debate. I would only say that I think that the principle of localism is well established. The issue was debated at length during the Bill’s passage through the other place. I do not know that anyone has picked up too much of what that debate was about. It pushes out as far as possible into communities and neighbourhoods, and into the hands of individuals and community groups, but in doing so it does not undermine local democratic principles. Localism means handing power down directly to councils, freeing local government from central and regional control. At other times, it means creating new rights for local communities to become more involved in local affairs, which is what I have been describing as what neighbourhoods and communities can do. In rolling back central direction, it will also be necessary to ensure that local authorities are accountable for all the decisions they take. We considered the Bill’s principles in our Second Reading debate two weeks ago, and I hope that we can now make progress on our scrutiny of the substantive provisions.

Finally, perhaps I may address the question of the amendment raising a couple of risks. I touched on the risk of judicial review proceedings, and I want to underline that by saying that it is our view that judicial proceedings could be brought on the grounds that a decision made under the Bill had been made without regard to the principles. I think that that would be a very retrograde and unfortunate step. An example of that might be if a Secretary of State exercised a power to make secondary legislation in a non-localist way. There is a risk that it could also be used as a guide to the legal meaning of a provision in the Bill, so if in the future there was doubt as to what a provision meant, a court would be able to take account of the purpose of the Bill as set out in this proposed clause. The risks are therefore quite high. I thank my noble friend for introducing the proposed new clause but I regret to tell him that I will not be accepting it.

I wonder if I could raise another point at this stage. At Second Reading I indicated that we would listen to noble Lords’ concerns about shadow mayors and mayors as chief executives. We are keen to build on the common ground and consensus that the Bill has enjoyed. I should therefore like to say at this stage that when we reach the debate on mayoral provisions, the Government will be pleased to support amendments that have the effect of deleting from the Bill mayoral management arrangements; that is, mayors as chief executives and the concept of shadow mayors. In more detail, this means that we will delete mayoral management arrangements and we will be supporting Amendment 57 in the names of my noble friends Lord Jenkin of Roding, Lord Tope, Lady Scott of Needham Market and the noble Lord, Lord Beecham. We will also be supporting Amendments 62A, 66A, 84E, 87A to 87D, 108A and 187 in the names of my noble friends Lord True and Lord Howard of Rising, which complete the changes needed to delete mayoral management arrangements. I should add that deleting these provisions from the Bill will not prevent councils deciding to do away with the non-statutory post of chief executive should they choose to do so. Indeed, the newly elected mayor of Leicester has announced that he is proposing to do just that.

In order to delete shadow mayors from the Bill, we will also support Amendments 69A to 69C, 73A, 74A, 75A, 77A, 77B, 79A, 81A and 84A to 84D, again in the names of my noble friends Lord True and Lord Howard of Rising. It is the Government’s view that these amendments best achieve the removal of these provisions while retaining provisions needed for an effective process for creating city mayors.

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[Lord Beecham]

My Lords, I do not think that it is necessary for me to answer that. We are talking about a general power of competence; the less fettered it is, the better. It may be that individual actions have not been challenged, although at times of international disasters, when suggestions have been made that local authorities should contribute financially towards appeals that have gone out, that has been felt to be outside their powers. I am not suggesting that that would be a common practice but, if it is seen as a priority by a particular local authority, it should be open to that authority to do so.

[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.

[Lord Greaves]

My Lords, I am not sure that I understood that last exchange; I shall read Hansard carefully so that perhaps I will understand it. I am grateful to the Minister for her response and to the noble Lord, Lord Beecham, for assisting her. These were probing amendments—nothing more—and I shall read carefully what has been said. On that basis, I ask leave to withdraw Amendment 2.

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[Lord McKenzie of Luton]

My Lords, we should congratulate the noble Lord, Lord Greaves, on giving us an early opportunity, during the course of the Bill, to debate this very important issue. We agree that it is important to enshrine, at an appropriate point in the Bill, a definition of sustainable development and the principles that he has outlined in the amendment. We agree with the definition and with the principles that he has set out. I anticipated that we would have this debate a little later when we got to Part 5 of the Bill, but important points have been made about this not being just about narrow planning; there is a broader dimension to it.

I agree with what the noble Lord said in moving the amendment. There are concerns about sustainable development being sidelined by the Government. He referenced the Budget pronouncements. Clause 124 could be a change in the balance of the assessment of sustainable development, and we have a lack of clarity over the NPPF; indeed, the advisory group’s draft has moved us some way away from what the previous Government had accepted and which I thought was generally accepted as sustainable development.

With some hesitation, I disagree with the noble Lord, Lord Lawson, that sustainable development is a meaningless concept. The fact that we may have had 1,000 years of growth generally in the economy and growing prosperity is fine, but are there not judgments to be made along the way about what that has done to the environment? Certainly in latter years, has not that growth often been achieved by recognising that you have to balance the impact, for example on the environment? I do not believe that it is a meaningless concept.

I agree with the point made by the noble Lord, Lord True, about the framing of the amendment, and I shall come on to that in a moment. There is a real risk that you create a lawyers' paradise. One of the assessments of well-being powers, and why they were not better used, was that lawyers, who were very cautious, got involved and that that precluded the use of the power more extensively than was anticipated at the time. I therefore very much agree with the right reverend Prelate the Bishop of Exeter in his approach to sustainable development, and with the noble Lord, Lord Taylor of Goss Moor. I disagree with the noble Lord, Lord Lawson.

When thinking about the Opposition’s response to this amendment, I considered how it sits with the local authority’s duty to prepare community strategies. That is set down in the Local Government Act 2000. There has hitherto been a requirement to prepare community strategies for improving economic, social and environmental well-being and contributing to the achievement of sustainable development in the UK. I asked the DCLG whether that obligation still exists. It does, but perhaps the Minister will confirm the Government’s intention to repeal the duty to prepare a sustainable community strategy. Instead, the Government have set down light-touch, best-value statutory guidance, on which they are consulting. The consultation document is extremely interesting, and shows about four pages of rubric on one page of a draft definition of “best value statutory guidance”. Only one sentence potentially touches on sustainability. It states:

“Under the duty of best value, therefore, authorities should consider overall value, including environmental and social value, when reviewing service provision”—

in place of the existing obligation to have sustainable community strategies.

The noble Lord, Lord Greaves, said that he wanted something that ran throughout the Bill, but I do not believe his drafting achieves that. Specifically, it states:

“A local authority shall exercise the power conferred by section 1”,

which is the general power. Again, analysis of the well-being power showed that it was not used in preference to statutory powers that local authorities may have. If we saw that replicated with the general power, in a sense what the noble Lord is seeking to achieve here would not capture that.

I understand that this is a probing amendment, and we support its thrust. We certainly want to see those definitions in the Bill and are happy to work with the noble Lord to achieve some refinement to the approach set down in his amendment.

[Baroness Hanham]

My Lords, I understand that this is a probing amendment and I thank all noble Lords who have taken part in this short debate. The Government are not unsympathetic to the attempt to describe “sustainable development”. In fact, they have already done so on two occasions. They support the Brundtland definition, and their statement on maintaining sustainable development, published in February this year, includes a commitment to embed these principles across government policy. Therefore, it is not only in this Bill that the sustainable development is likely to come about.

We accept that there is a strong relationship between the Government’s approach and the ambitions of this Bill. However, whether we can spell it out in a way that is acceptable on four fronts is probably more difficult. It would put it on to a statutory framework that is a lawyers’ paradise. The expectation and understanding is that local people will be best placed to understand what is right for sustainable development locally, and noble Lords may have become aware of the definitions that have appeared in the consultation on presumption in favour of sustainable development that has just been published.

On the planning system, we believe that there is a presumption in favour of sustainable development at the heart of the new planning system. We will look to local planning authorities to prepare local plans on the basis of objectively assessed development needs and with sufficient flexibility to respond to rapid shifts of economic change. They should approve without delay development proposals that accord with statutory plans—noble Lords opposite mentioned that—and should grant permission where the plan is absent, silent or indeterminate, or where relevant policies are out of date.

That issue is one of planning. Noble Lords also referred to the generality. February’s Statement made clear the Government's view that there are three pillars—the economy, society and the environment—which are interconnected. We recognise that long-term economic growth relies on protecting and enhancing the environmental resources that underpin it, and on paying regard to social needs. Those are the principles of sustainable development that we need to take forward.

I will resist, at least for the moment, having a definition such as that put forward by the noble Lords, Lord Greaves and Lord Tope. If there was ever going to be a definition, we would need to be very clear and sure that it would be legally unchallengeable, because definitions never define the whole process and all the opportunities; sometimes they are restricting rather than helpful. Some of my noble friends behind me may be slightly sad about this. I say to them that in general the Government have some sympathy with sustainable development. As I have indicated, they have already made commitments on the subject. However, I regret to say to the noble Lord, Lord Greaves, that his proposed new clause would not be helpful at this stage.

[Lord Taylor of Goss Moor]

My Lords, I will speak briefly. I welcome two aspects of what the Minister said. The first is her reiteration of the Government’s support for the principles of sustainable development, which is important. The second is the fact—I have listened carefully and will read Hansard later—that she did not rule out setting out these principles in the Bill. We will have to see whether we can convince the Government to do it. Their open-mindedness at this point is very welcome.

I say to those who think that a thousand years of economic development prove that we do not need sustainable development that in that time some civilisations collapsed as a result of the overuse of their resources; I refer to central America, the desertification of the north African coast and, in my own area of Cornwall, the disappearance of the herring trade. Today we see more profound impacts on the environment, such as the destruction of the rainforests, and we should not sit content in this country and assume, just because until now we have survived quite well when others have not, that we have greater wisdom than civilisations that collapsed before us.

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[Lord Wigley]

My Lords, Amendment 18 stands in my name and is grouped with Amendment 5. Before getting into my own comments, I warm to the latter comments by the noble Lord, Lord Greaves, in proposing Amendment 5, about the very complex model of devolution that we now have for Wales. Scotland has a fairly clear-cut model for which something is devolved or not devolved. In Wales, there are bits of Acts here, there and everywhere that are a nightmare for those who need to interpret them. It is something that the Government might like to look at at some stage in the interests of everyone and of getting some symmetry in the relationships that we have within these islands.

At Second Reading, I said that I would ask questions in Committee on the applicability of Clauses 1 to 8 to Wales. Your Lordships will be aware that local government in Wales is wholly devolved. That was established by the Local Government (Wales) Act 1994, when we were still under the Welsh Office. With the establishment of the National Assembly in 1999, responsibility moved from the Secretary of State to the Assembly. Following the referendum this March, full legislative competence came to the Assembly over these matters. I realise that that was after the Localism Bill had started its passage in another place, and I understand that some adjustments have been made to take that on board.

Amendment 18 is therefore very much a probing amendment. The Explanatory Notes with which we are provided state that Clauses 1 to 8 are relevant to England only. I realise that the notes do not have status in law, but they are none the less important for us in debate and therefore one takes notice of them. Yet Clause 5(8) refers to the effects of these clauses upon Wales. Clause 5(2) provides that:

“the Secretary of State may by order amend, repeal, revoke or disapply”,

statutory provisions if he thinks this may prevent local authorities exercising their general powers of competence in England. If these powers apply to England and Wales, quite serious questions arise about the implications for local government in Wales, and that runs through other parts of this Bill. As Clause 5(8) refers to,

“an order … that has effect in relation to Wales”—

those are the words in the Bill—clearly this is a possibility. Will the Minister give us some indication of the circumstances in which this could apply to Wales—some examples, perhaps, or some issues—and how often it is anticipated that these powers might impact on Wales?

Clause 5(8) also states that the Secretary of State must consult Welsh Ministers before using such powers in a way that impacts on Wales, so I shall press a little more on the meaning of consulting. If consulting allows the UK Minister to agree or disagree with his Welsh counterparts, if he agrees and carries on regardless, does that not undermine the devolution of local government issues to Wales as provided in legislation and as was assumed in the referendum that we have just had? I suggest that if there was provision for requiring a legislative competence Motion to be passed in the Assembly on each such order brought forward by the UK Minister indicating the Assembly’s consent to that, it would at the very least safeguard the devolved powers from being eroded by being overridden from Westminster. Otherwise, what measures do the Government intend to put in place to deal with any such disagreement? This is meant to be a helpful amendment to ensure that the power over local government in Wales is not clawed back to Westminster, and that clarity will be provided for those who have to live with its consequences.

I will briefly address Amendment 5, which was moved by the noble Lord, Lord Greaves, and is also in the name of the noble Lord, Lord Roberts of Llandudno. As things stand, by virtue of Schedule 1, as I interpret it, local government in Wales will continue to retain the power for the promotion of well-being, as laid out in the Local Government Act 2000, even though local authorities in England will be subject to changes under this Bill. Amendment 5 appears to have the effect that changes to local government in England will also apply to local authorities in Wales, but under paragraph 12 of Schedule 7 to the Government of Wales Act 2006 this cannot be done without a legislative competence Motion in the Assembly. The referendum in March confirmed the Assembly’s legislative competence in these matters. Is it the intention, therefore, of the noble Lords, Lord Greaves and Lord Roberts, to re-reserve these powers to Westminster? I would be glad to have the Minister’s comments on this, and indeed on both amendments.

[Baroness Hanham]

My Lords, I hope I will be able to reassure the noble Lord, Lord Wigley. I am so sorry—

[Lord Beecham]

My Lords, a few years ago I had the pleasure and privilege of chairing a review into local public services in Wales. I visited Caernarfon and, after a meeting with the leader of the council and officers of that borough, I sauntered through the streets of Caernarfon. It was an unnerving experience because everyone was, perfectly naturally in that part of Wales, speaking Welsh and I could not understand a word of it. I am bound to say that I have rather the same sensation having heard the noble Lords, Lord Greaves and Lord Wigley, this afternoon. I do not pretend to understand all that they have asked.

I confine myself to one question to the Minister, but perhaps also to your Lordships who have moved and spoken to these amendments: has the Welsh Local Government Association been asked to give a view on these matters? That would have been sensible. I confess to not having done so myself, so I am not in a position to criticise others who may not have. However, it would seem important, at least by the time we get to Report, to have inquired whether the Bill is acceptable to the Welsh Local Government Association or whether it would prefer the amendments moved.

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[Baroness Hanham]

I apologise to the noble Lord opposite for trying to cut him out on the way.

As I was saying before the noble Lord rightly interrupted me, I hope that we will be able to reassure the noble Lord, Lord Wigley. The Government have been asked to amend the Local Government Act 2000 to enable Welsh Ministers to make orders under this particular power rather than them having to ask English Ministers to do so as at present. We are considering that and I hope that I will be able to give the noble Lord a final response on that later.

It might be helpful if I quickly went through how this Bill applies to Wales. I also confirm that we have been in regular contact with the Welsh Assembly Government about the application of the provisions of the Localism Bill to Wales. The devolution extent of provisions in the Bill is set out in the Explanatory Notes, and where provisions do not apply to Wales this reflects the wishes of the Welsh Ministers about whom we have talked.

The following provisions apply to Wales: providing fire and rescue authorities with additional powers— that was by amendment on Commons Report; predetermination; pay accountability; abolishing the duty to promote democracy; repealing the petitions duty; business rate supplement ballots; the discretionary power for local authorities to grant business rate discounts; assets of community value; the community infrastructure levy; major infrastructure projects—the abolition of the IPC; housing reform, particularly homelessness; repairing obligations in leases of seven years or more; the abolition of HIPs; and the abolition of the standards board provisions applied to police authorities in Wales.

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[Lord Wigley]

I am very grateful to the noble Baroness. If this is just an in-case provision—in case a change in future required this to be exercised—and given the emphasis that she has rightly put on having agreement from Assembly Ministers, what would the circumstances be if, having consulted, there was a disagreement?

[Baroness Hanham]

I will have to take advice about that because I was not expecting that question. I will write to the noble Lord and not hazard a guess because we might end up offending each other. If I may, I will make sure that he gets an answer to that specific question.

With that explanation, I hope the noble Lord, Lord Wigley, will feel able to withdraw his amendment. I think the noble Lord, Lord Greaves, was very much heading to get the sort of answers that I have now given, so I hope he will feel able to withdraw his amendment on the basis that I have given sufficient information.

[Lord Greaves]

My Lords, I am grateful to the Minister for that. I will read it carefully, and I will take advice from people in our group who are more Welsh than I am and see whether they agree with it too. On first hearing, it does sound a fairly straightforward explanation of where we stand in the Bill, which was the purpose of putting down the amendment.

The noble Lord, Lord Wigley, asked me whether I wanted to re-reserve powers. I do not, in any circumstances —this was merely a useful peg to pin a couple of questions on, which have been answered fairly satisfactorily.

The only question that comes to mind listening to the Minister, which she may not be able to answer, is how widely the Welsh Ministers consulted local authorities in Wales on whether they wanted the general power of competence. She may not have that information, but it is an open question that someone might have the answer to.

The noble Lord, Lord Wigley, suggested that the devolution settlement in Scotland was simple. It may be more straightforward than in Wales, but one of the last big Bills in which I was involved was the Marine and Coastal Access Bill in the previous Parliament. The whole relationship with Scotland was an absolute nightmare. It was all down to the details of the way in which the devolution settlement for Scotland affected a whole series of matters in that Bill. However, Scotland is not much affected by this Bill, and perhaps we should be grateful for that.

The Minister’s first remarks on the way in which the Government are thinking about releasing some of the controls on Wales were welcome. If that comes about, I think we would be very much in favour of it. On that basis, I beg leave to withdraw the amendment.

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[Lord Tope]

My Lords, I shall speak also to Amendments 7, 8 and 9. In common with the rest of local government, for many years we have pressed to have a general power of competence. I should make clear at the start that we are wholeheartedly in support of this, although I increasingly wonder exactly how much extra difference it will make. I nevertheless welcome it without reservation.

I have no intention of pressing these probing amendments to the vote but want to give the Government an opportunity to place on record a little more clearly the limitations being imposed on that general power; certainly I am not clear on them. Amendments 6 and 9 probe the nature of overlap and the boundaries imposed on the general power by pre-commencement and post-commencement limitations and, in particular, the intentions of the Government in relation to post-commencement limitations. Amendment 8 probes why local authorities should not be able to change their governance arrangements at least to a degree under the general power. These are questions to which we would really like some answers. If Parliament graciously is granting the general power, the fewer limitations the better. We wonder, as we will in later stages of the Bill, why it is necessary to say what local authorities may or may not do once they have that general power. With that, I look forward to hearing the clarification and expansion from the Minister, and I beg to move.

[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.

[Lord Tope]

I am grateful to the Minister for her reply, which I will read with great interest tomorrow. I am still a little puzzled about the restrictions on the governance, to which we will come at a later stage. If I understood the Minister correctly, she said that the Government felt that it was right to have some restrictions on what local authorities could do in their governance arrangements. I wish that I had the quote with me but I recall that, in the August edition of Total Politics, the Secretary of State said that he did not care what system of governance local councils have. He even said that they could have a choral system and sing sea shanties for all he cared, provided only that the system of government was efficient, transparent and accountable—three criteria to which every one of us would agree. Therefore, I am still a little puzzled as to why the Government feel that it is necessary to restrict a general power of competence in this area. Nevertheless, we will no doubt get to this in the later stages of this Bill. In the mean time, I beg leave to withdraw Amendment 6.

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[Baroness Hanham]

My Lords, the answer to that will have to come in a note, I am afraid, because I am not clear about the relationship between the two. I will make sure that my noble friend has a reply to her questions so that she may return to the point on Report if she so wishes.

With regard to the provision of leisure services, which was the specific area raised by the noble Lord, Lord Tope, those services are subject to separate powers to charge, so they are unaffected by the general power by virtue of Clause 3(2)(c). In other words, these services once again come under previous legislation and therefore cannot be subject to this legislation. I think that this is going to be the answer that we will give to a number of these issues, where the general power of competence is restricted by previous legislation which is not being amended or annulled. I hope that that answers the question.

[Lord Tope]

My Lords, I am grateful to the Minister for her answer, but I am bound to say that I am not any wiser than before. I have used leisure services as an example since it happens to be one for which I am responsible, but perhaps it was the wrong example, which is one of the troubles with using examples. Frankly, I am no clearer about the meaning of this provision and what restrictions it would bring about.

I can see from my raised position that the noble Lord, Lord Beecham, wishes to speak.

[Lord Tope]

Indeed, I am happy to offer the Minister the example of a meals on wheels service, which has just come to mind as possibly a more appropriate example. I would be grateful if she could elucidate a little more because I see that I am not the only noble Lord in the Committee who has failed wholly to understand it. If it is not possible for her to do so today, I am sure that she will write to us, but if she is able to be a little clearer about what is covered rather than what is not covered by this provision, I would be grateful.

[Baroness Hanham]

My Lords, I will try to be a little more helpful. Part of the answer is that the Government believe that a local authority service should not make a surplus year on year. I think that that was one of the points raised earlier. By providing a power to charge for discretionary services, the Government’s aim is to encourage authorities to provide the sort of services that they would otherwise decide not to provide or improve at all because they cannot justify or afford providing them for free or improving them. I do not think that that actually answers the question, so I am going to write to the noble Lord before the next stage.

[Lord Greaves]

Before my noble friend responds, the crucial question that comes to mind is this: if the provision as it is in the Bill is passed, does it change the existing situation?

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[Baroness Hanham]

The existing situation is that current legislation limits what can be done, and this continues to limit it. Under the general power, if it is not restricted by current legislation, then it is permissive.

[Lord Tope]

I am grateful to the Minister for her offer to write, which it is hoped will clarify the situation. I might suggest that if we are all struggling a bit with what is in the Bill, perhaps the drafting is not as clear as it should be, and that is something on which we shall all have to reflect. In the mean time, I beg leave to withdraw the amendment.

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[Baroness Hanham]

My Lords, Clause 4(1) provides that an authority may,

“do things for a commercial purpose”;

that is, to trade under the general power, while subsection (2) provides that if an authority is doing something for a commercial purpose, it must be carried out “through a company”. If an authority wishes to trade, under subsection (1) it can do so, but if it wants to do something else for a commercial purpose, it must be carried out through a company. It is not trading, rather it is presumably providing a service of some sort, and that must be done through a company.

[Baroness Farrington of Ribbleton]

I, too, am slightly confused. I remember sitting in the Minister’s seat when we were discussing the Greater London Authority Bill—I can see smiles of remembrance in turning to the Box. When asked a direct question by the noble Baroness, Lady Hamwee, I remember seeing one person in the Box nod and another shake their head. I should like a little more clarity than that. Examples of trading would be interesting. If a parks department was selling surplus plants, would that be trading? It is that sort of thing that I would like to know in a written response from the Minister. I hope that she will accept, given my earlier example, that it is not a criticism of her reply.

[Baroness Hanham]

My Lords, I think that it would help everybody if I replied in writing.

Clause 4 agreed.

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[Baroness Hanham]

To be a little bit pedantic, I am perfectly happy to answer those questions, but I think we are on the seventh group of amendments, with Amendments 12 to 17 to Clause 5, and Amendments 22 and 23. The noble Lord has just referred to Amendments 20 and 21, which I think come in the next group. It may be more convenient if they could be considered there.

[Lord Greaves]

I apologise. I shall explain it all again, because there is a mess-up in the groupings and it is best to discuss the questions under the amendments tabled by the noble Lord, Lord Beecham, rather than under mine that come later. I keep referring to mine because my notes obviously refer to them.

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[Baroness Hanham]

My Lords, in reply to that last question, the powers to amend legislation are relative to the use of the general power. Under Clause 1 the Secretary of State will be empowered to sweep away any legislation that is standing in the way of the power of competence—that is what that clause is about. The answer to my noble friend Lord Dixon-Smith is that I do not think that that would be possible. The provision does not get rid of any legislation at all; it is only any legislation that stands in the way of the general power of competence.

I hear the concerns that have been raised regarding this clause and I hope that I will be able to reassure noble Lords on some of it. I say at the outset that the power is normally subject to the affirmative procedure, as set out in Clause 209. There are limited exceptions to that, but we are taking on board and considering the recommendations of the Delegated Powers Committee as we have on other matters. We will come on to that in due course, but noble Lords may feel reassured that the general view that the Delegated Powers Committee is not overridden will probably be maintained.

Unlike Clause 1, where the Secretary of State can take away legislation, Clause 5(3) and (4) provide reserve powers to allow the Secretary of State to restrict what a local authority may do under the general power or to set conditions around it. We believe that these powers are a necessary safeguard, given the breadth of the new power, to ensure, for example, that risks to both local government finances and the Exchequer are properly managed.

The powers will be of the most limited use. The Government have no plans to use the powers in subsections (3) and (4) and expect them to be used extremely rarely, if at all. However, they might be used to deal with, for instance, any risks that might arise from authorities’ use of the new general power to engage in novel financial transactions. They are therefore a tug back if local authorities seem to be going well beyond their brief under the general powers.

On Amendment 14, the general power of competence is designed to give local authorities real freedom to innovate and act in the interests of their communities, although not to be too innovative in financial terms, as I have just said. However, there is continuing misunderstanding about the scope of Clause 5(1). This provides the Secretary of State with powers to remove or change statutory provisions that prevent or restrict use of the general power—that is, restrictions or limitations that bite on the general power by virtue of Clause 2, the clause where the Delegated Powers Committee considers that there should be an affirmative order. The whole clause is about removing barriers to the legal capacity of authorities to act, so that they may act innovatively and in the best interests of the community. It is not aimed at removing duties, nor is it a general purpose tool to remove any legislation that places burdens on local authorities.

Until now, there has been no comprehensive list of the legal duties placed on councils. To remedy this, the Government agreed with the Local Government Association that we should compile such a list—the noble Lord, Lord Beecham, referred to this—so that everyone is clear what legal obligations local councils have and to check whether the duties are relevant.

The review is ongoing. Once it is completed, it will be decided whether any changes are necessary to the statutory duties, but neither the review nor the barrier-buster power that is in Clause 5(1) is aimed at removing statutory duties protecting vital front-line services, so there is no link between these processes.

The Clause 5(2) power can be used only to remove English authorities’ powers that are obsolete because they are overlapped by the new power. Its purpose is to tidy up the statute book and simplify the law, but there will be no practical effect on the scope of local authority powers or duties.

Amendments 15, 16, and 17 are unnecessary; they attempt to gold-plate the consultation arrangements already in this clause. The existing wording in the clause does exactly what it says it does—it will ensure that anyone who needs to be consulted will be consulted—so no further elaboration is needed. The consultation must be carried out properly and in accordance with general public law principles. This means that the Secretary of State must act reasonably in deciding whom to consult and must act in accordance with equality duties, which were also mentioned, and he can be challenged if he does not.

We believe that the more specific a list becomes, the more likely it will inadvertently exclude people who need to be included. We have seen this many times in legislation. I well remember trying to get more and more people put on to the face of a Bill, but that is not always helpful. We believe that it is better that these matters are left to be judged in the particular circumstances, as quite often the consultation list will change, depending on what is being proposed. We believe that the consultation requirements are comprehensive and we do not think that these amendments are necessary.

On Amendment 22, the power is a power to remove statutory restrictions. If the same thing can be achieved in a different way, it is hard to see how they can be statutory restrictions in the first place. I am sure that, if an order is unnecessary, that will be brought to attention of the Secretary of State during consultation.

Amendment 23 raises a concern about the Human Rights Act. We want to make it very clear that an order under Clause 5(1) cannot be used to repeal the Human Rights Act. It is unlikely that the power is wide enough, as it is a power to remove restrictions and limitations that prevent a local authority from acting as a natural person and a natural person could not get rid of the Human Rights Act. It is not a general purpose tool to remove any obligation placed on local authorities. Furthermore, the third condition requires that the provision made by the order does not remove any necessary protection, which means protection afforded by measures such as the Human Rights Act. The fourth condition requires that the provision made by the order will not prevent any person from continuing to exercise any right or freedom that he might reasonably expect to continue to exercise. Any right conferred or protected by the European Convention on Human Rights is a right that a person must reasonably expect to keep. Finally, and most significantly, the fifth condition is that the provision made by the order is not constitutionally significant. I think that we can agree that repealing the Human Rights Act would be constitutionally significant. The DPRRC has signified that it is content with the safeguards on this power. In addition, we have provided for a stringent parliamentary procedure. Therefore, we do not think that anything further is necessary.

The noble Lord, Lord Newton, and others have raised concerns about the conditions on the use of the power. It may be useful at this stage to say that Clause 6, which limits the power under Clause 5(1), was introduced in the other place as a result of the concerns expressed. We believe that a list would need constant updating. If something was inadvertently left off the list, that would not mean that it could be amended. We believe that Parliament, when considering orders made under these powers, will be able to judge whether the use of the power is appropriate.

I hope that I have covered all the amendments, although I think that one or two got muddled into the next group—certainly, Amendment 22 appears in my notes twice. I hope that I have responded to noble Lords’ questions satisfactorily and that they will not press their amendments.

[Lord Jenkin of Roding]

Before my noble friend sits down, will she confirm that she has repeated the explanation that was given in the memorandum to the Joint Committee on Statutory Instruments about the difference between subsections (1) and (2), which the Joint Committee expressly and firmly said that it did not accept? Is she now firmly saying that she will nevertheless insist on the difference—an affirmative resolution for an order under subsection (1) but a negative resolution for an order under subsection (2)? If so, I would find that difficult to accept.

[Baroness Hanham]

My Lords, I hope that I said in my remarks that I understood what the recommendation was and that we would look at it further. It is almost inconceivable that a recommendation from that committee would be ignored.

[Lord Greaves]

My Lords, I shall comment briefly on the consultation amendments in my name, Amendments 16 and 17. The noble Baroness said that they would gold-plate the legislation. As I understand it, they would simply put this legislation on the same basis as the Legislative and Regulatory Reform Act and the Public Bodies Bill, which was in this House only recently. I am tempted to ask why those pieces of legislation were gold-plated. I hope that this might be looked at again.

The noble Baroness also said that adding a requirement for consultation with representatives of people who are likely to be affected could restrict the amount of consultation that took place, but as it would be an additional requirement—the requirements in the Bill would not be changed at all—and would include the words,

“such other persons that the Secretary of State considers appropriate”,

it is difficult to see how it would restrict anything. It would simply extend the amount of thought that the Secretary of State would have to give to exactly who is being consulted and provide a bit of guidance to him. The two arguments that the Minister has put forward seem a bit weak. When Hansard comes out tomorrow, I will read exactly what was said, but I think that it would be no skin off anybody’s back to accept the amendments.

Finally, I asked why the words “if any” had been added to the similar provisions in other legislation that this is based on. Perhaps the Minister will write to me and explain the significance of that.