City of Wakefield (Mayoral Referendum) Order 2012

Baroness Hanham Excerpts

Tuesday 17th January 2012 Grand Committee

Moved By

[Baroness Hanham]

That the Grand Committee do report to the House that it has considered the City of Wakefield (Mayoral Referendum) Order 2012.

Relevant documents: 36th Report from the Joint Committee on Statutory Instruments.

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

My Lords, the purpose of all these orders to which I speak is to require the local authority named to hold a referendum on 3 May 2012 on whether it should start to operate a mayor and cabinet executive form of governance; that is, to have a directly elected mayor. As we described in our programme for government, the coalition Government are committed to creating directly elected mayors in the 12 largest English cities, subject to confirmatory referendums. These orders are the next stage in fulfilling that commitment. I shall explain the rationale for this, but first I would like to recall the steps that we have previously taken on elected mayors and the approach that we have followed in seeking to ensure that we can achieve the best way forward for our major cities.

As a first step to delivering our coalition agreement commitment, we included provisions on directly elected mayors in the Localism Bill which we introduced in December 2010. Those provisions included introducing the idea that there would be shadow mayors in the cities before any election and that, where a city adopted an elected mayor, it would be required to introduce mayoral management arrangements. These arrangements were that the city would cease to have a chief executive and the mayor would then be both the political leader and the top executive of the authority.

During the parliamentary passage of the Bill, these provisions attracted considerable debate and concern, particularly in the House of Lords. I remember it well. We listened carefully to the arguments being made about why these elements of a switch to the mayoral model could give rise to difficulties and hence were not appropriate. On careful reflection, we accepted the arguments being made and amended the Bill so that there was no longer any question of there being shadow mayors or statutory mayoral management arrangements. Our approach was to listen carefully to the arguments, address the issues raised with an open mind, and seek to ensure that we took forward our mayoral agenda in a way that commanded the widest degree of support and would best serve the interests of the cities concerned.

It is perhaps worth recording that when the House considered the question of mayors in the Localism Bill on Report there were no Divisions on any of these provisions or amendments. The result is that the Localism Act contains a simple provision that enables the Secretary of State to require in a particular city a referendum to be held on whether or not that city has a mayoral form of governance, and the orders before the House today are the first use of this provision.

I now turn to why we are seeking the House’s approval for these orders. As part of the coalition agreement, the Government committed to creating directly elected mayors in the 12 largest English cities, subject, as I said, to confirmatory referendums. Leicester already has a directly elected mayor, following a resolution of the Labour-led council to move to a mayoral form of governance and the people of Leicester elected their first mayor in May 2011. We are therefore planning referendums in May 2012 in the other 11 cities: Birmingham, Bradford, Bristol, Coventry, Leeds, Liverpool, Manchester, Newcastle-upon-Tyne, Nottingham, Sheffield and Wakefield. Where the referendum vote is in favour of having a mayor, the city will then rapidly hold an election for its first mayor.

The Government think that there is good evidence that where a city has a powerful and directly accountable mayor this can be a major factor for delivering local economic growth and bringing greater prosperity to that city. The value of big cities, effectively led by powerful mayors, is demonstrated by a range of international experience. For example, the Mayor of London has transformed the capital’s governance and achieved a range of successes including the London plan, the congestion charge, Crossrail and Boris bikes. Barcelona was transformed into a leisure and cultural centre through the strong leadership of its powerful executive mayor, Pasqual Maragall, who was elected as head of the list of the winning party. It is now one of the most prosperous cities in Europe with a GDP per capita 44 per cent above the European average.

Of all the governance models, we think that the mayoral model has the greatest potential to provide that strong and accountable leadership needed for our cities to be successful, economically, socially and environmentally. That is not to say that other forms of local government cannot deliver success or indeed that a mayor guarantees success, but we are clear, not least from the evidence of cities around the world, including London, that where a city has mayoral governance the odds of success are greater.

Why do we have the 12 cities? As the Institute for Government and Centre for Cities highlighted in their joint report, our cities are the heartbeat of the UK economy. Despite occupying less than 10 per cent of the UK’s land, they contribute 60 per cent of our economic output. That is why the Government believe that it is important that in each of our major cities, which contribute so much to our economy, the opportunity to have a mayor is seriously addressed by the electorate.

Of course, it may be, as in the case of Leicester, that the city council—the democratic representatives of the city’s communities—simply resolves to move to an elected mayor without a referendum being held. That option is available to all the cities unless their current governance model was agreed in a referendum, and will remain so until we have made a referendum order for that city. But if this option is not taken up, then local people should be given the opportunity to address the issue and decide. That is why we are bringing these orders to be approved by Parliament.

Finally, I remind the Committee that the orders we are considering today are about local choice and allowing local people to have a say on how their city is governed. Although we are clear about the benefits that mayors can bring, we are and remain localist. We believe that decisions about how a locality is governed are best taken locally. This is about letting local people decide. I commend the orders to the Committee.

[Lord Grocott]

My Lords, I cannot resist making just one general point before I get on to the specifics about my fundamental objection to the directly elected mayor system. I see it as an import from a different political culture. In essence, it is a presidential arrangement. All levels of our democracy in our country have embraced the parliamentary system whereby executive heads emerge from the elected body. I think that is infinitely preferable to the presidential system. The Minister’s examples were notably from abroad, with the exception of London, and bringing in this system whereby elected councillors have no direct say on who the city’s leader should be is—I cannot find a less pompous way of putting this—alien to our political culture, and I do not think there is too much wrong with our political culture. In my view, it has inevitably—certainly in the United States and here—led to mayors being elected who simply do not arrive via the tried-and-tested system.

I thought that the evidence put forward for extending this system in this dramatic way was pretty thin. The explanatory document claims that,

“directly elected mayors … enhance their city’s prestige and maximise the potential for local economic growth”.

Let us not go to Barcelona or anywhere else. We have had this system in Britain for a number of years. Where is the evidence that those lucky cities and towns that have directly elected mayors have seen the prestige of their areas enhanced in comparison with those that have not had the benefit of directly elected mayors and have seen economic growth? In short, has London been demonstrably much better governed, to justify all this additional expense, than has, let us say, Newcastle, Manchester or Birmingham? If there is any evidence, I would love to see it, but I am not aware of it.

I move to the specifics of the orders that we are now looking at. One has already been mentioned by my noble friend Lady Farrington. I am afraid this is more of a rhetorical question than one I expect the Minister to be able to answer because it is unanswerable. How on earth can you have an order that states:

“The authority must, on 3rd May 2012, hold a referendum”—

I would add, in brackets, “whether you want to or not”—with the Government’s alleged commitment to localism? Why the compulsion? Why not leave it to the local authority to make up its own mind? I do not know the answer to that one. I do not think it will do to suggest, as the Minister did, that somehow this is an opportunity for local people to decide and that the Government are neutral, at least to the extent that the local people can make their own decisions, because is it just an accident that the only places where local citizens will be able to decide on their governance are places where they do not have an elected mayor at the moment? What about all those local authorities that have an elected mayor? Why not ask them whether, on the basis of the past 10 years, it is a good way of spending public money? I am delighted to be able to report that, as the Committee will know, in the one area where people have been given that choice, namely the splendid city of Stoke-on-Trent with the outstanding Stoke City Football Club, the public were asked, “Do you want to continue with your elected mayoral system?” The answer was a pretty resounding, “No, we don’t, thank you very much”.

--- Later in debate ---

[Lord Beecham]

My Lords, the last time when I spoke for the Opposition in this Room, the noble Lord, Lord Smith, also participated in the debate. A couple of days after that, he was taken very seriously ill. I am delighted that he is back with us and in such excellent form. I am sure that we wish him continued good health.

It is perhaps appropriate that we are discussing these orders in the Moses Room, not because I may be distantly related to the gentleman in question but because he is portrayed as coming down bearing 10 commandments. The Minister of course brings 11 commandments to 11 authorities, and they may receive a similar reception to that which the originals received. I know not—we shall see.

Since the Prime Minister’s arguably somewhat clumsy intervention the other day, referendums have become almost the issue of the day, at least in the minds of the political class. I suspect that the majority of people are rather more concerned with issues such as the faltering economy, unemployment and the fate of the NHS—and, to judge by today’s e-mails, the Welfare Reform Bill and perhaps the legal aid Bill. Many of us have been deluged with e-mails about that; I am bound to say that I have never received a single e-mail suggesting that we need referendums for elected mayors. But 11 authorities will now face compulsory referendums, not because as in Scotland there is a public demand for it but because the Government are determined to pursue this agenda.

It is interesting that the Explanatory Notes affirm that the Government believe that local authorities and the communities that they represent are best placed to reach decisions on how their local authority should operate and be governed. They say that the 2000 Act provides for local people to have a say on the governance model adopted by their local authority via a referendum. But it is one thing for people to have a say and another to require them to vote or at least hold a referendum, as the Government are now doing. Yet 5 per cent of the electorate in any of those 11 cities, or any other local authority, could at any time over the past 10 years have requisitioned a referendum—and, of course, the vast majority have not done so. A number of referendums have been held, 38 in all; 13 of them agreed that they should go ahead with the mayoral system and 25 rejected it. Some of those authorities called a referendum, as they were allowed to do; there was nothing wrong with that. That included Tower Hamlets and Leicester. In other cases there was a petition.

My noble friend Lord Grocott questioned the turnout in referendums; in only one case apart from three referendums held on the same day as the general election did the turnout exceed 40 per cent. Incidentally, one of the authorities with a referendum subsequently decided to abandon the mayoral system. The turnout in the five authorities that voted for an elected mayor ranged as follows: 16 per cent, 18 per cent, 21 per cent, 25 per cent and 27 per cent. That is hardly a ringing endorsement of the concept. Yet the mayoral system was supposed to lead to a great upsurge in local democracy.

I was present when this concept was floated. It was at a meeting—I do not think that it is wrong for me now to reveal it 15 years on—of the joint policy committee of the Labour Party, a somewhat cumbersome, bureaucratic piece of machinery, which consisted of members of the then shadow Cabinet and of the national executive of the Labour Party. I was representing local government and some other unfortunate was representing the Labour MEPs. Tony Blair announced to the apparent consternation of Frank Dobson, who was the environment spokesman of the day, that we were going to have an elected Mayor of London. The only person who asked a question about that, in a somewhat sceptical vein, was me.

The discussion lasted five minutes and that then became Labour Party policy, which you may think is an interesting way to formulate policy, but there it was. The constant theme of those advocating this was that it would strengthen local democracy and lead to greater involvement. That has not been the case, as my noble friend, Lord Grocott, has rightly pointed out, either in terms of the turnout at the referendum or in terms of the turnout in mayoral elections. In London, the first two elections showed a turnout lower than the average local authority election. At the last mayoral contest, gladiatorial as it was and as it no doubt will be again, with all the coverage proffered by the Evening Standard—noble Lords will remember coming out of tube stations and seeing the placards about the latest Ken or Boris pronouncement—the turnout was around 45 per cent, marginally higher than a council election in a major authority: it did not necessarily command huge interest.

Over and above the propriety of requiring the holding of the referendum—and I think that there is a serious flaw in the Government’s approach—there is a question of what is at stake here. We are talking about the conferring on a single individual of very wide-ranging powers combined with very little accountability. It is not as if a majority of the council can overturn a decision of the mayor. On hugely important matters, from the budget, the children’s panel, and the strategic panel of the authority and over a whole range of issues, the mayor will prevail unless two-thirds of the elected members of the council overturn him. This is a little better than the Mussolini formulation for general elections in Italy in 1923, when 25 per cent of the votes were sufficient to give 75 per cent representation in the chamber; we are not quite in that league. Nevertheless, it is a formidable degree of power concentrated in a single pair of hands. The noble Baroness, Lady Hanham, adduced Barcelona as an example of a mayoral authority, which indeed it is, but as she put it—perhaps without quite realising the implications of what she was saying—Maragall, who was the outstanding mayor of Barcelona, was elected as head of his party’s list. In the same way, a Prime Minister—although not as it turns out the present Prime Minister—is elected as the leader of his party: his party obtains a majority, not a single individual running for office. That is quite a distinction, yet by any standards Maragall was an outstandingly successful mayor.

The Labour Party in its wisdom once sent a delegation over to Holland. They have mayors in Holland and it was thought it would be instructive for innocent and naive Labour councillors to see what was done in Holland. They had overlooked that mayors in Holland were not elected at all by anybody. They were Crown appointments at that stage. At least the Government have not gone that far yet, but there is that huge issue of power. Equally, as the noble Lord, Lord Cormack, pointed out, there have been distinguished local government leaders, not least in the great city of Birmingham, to which the noble Lord, Lord Rooker, alluded. They have had not merely Joseph Chamberlain but his brother; he was described by Lloyd George, it will be recalled, as a “good mayor of Birmingham in a bad year”, but he was a distinguished local government figure. Successive leaders of Birmingham of, certainly, two political persuasions have been well respected. We have seen similar figures leading other councils. So while the power exists for either a council or a small percentage of an electorate to call for the holding of a referendum, it seems entirely unnecessary to prescribe that such elections should take place.

Of course, the Bill will give the Government the power to impose this system of referendum on any authority. It would be interesting if the Minister would indicate the Government's thinking on these matters. Is it likely, if a number of these referendums are successful, that they will then seek to roll out the holding of referendums elsewhere?

In relation to cost, it is reassuring that Mr Pickles has been able to find yet more money secreted in the coffers of the Department for Communities and Local Government—in addition to maintaining the weekly waste collections—to fund these referendums, although most of us would prefer to have the money for more productive purposes. In addition, there will be the cost of mayoral elections, which will be at least as much and presumably a little more than the cost of holding a referendum in the first place. I apprehend that those costs will be met by the local council if the electorate choose to go down the mayoral route.

It will be gathered that the Opposition are not entirely sympathetic to the orders that are laid today and we will be moving a Regret Motion when the matter comes before the House. I understand that there will be similar proceedings in the Commons. I am confused by the timetable. I understand that we have the statutory instruments before House of Commons, but so be it. We are looking for these matters to come before the House in February.

No doubt the Government will stick to their guns. I can only hope that people in these 11 authorities, should these referendums go ahead, have the good sense to stick with the tried and tested system of local democracy and not vote to confer huge powers into too few hands.

[Baroness Hanham]

My Lords, I cannot wait to discuss this issue all over again. I thank the noble Lord for giving us due warning that that is precisely what will happen, so we wait with bated breath. I am sure that we will cover at least some of these issues again and noble Lords will have to try to say the same thing twice if possible. But this gives me an opportunity to say that if I cannot answer all the questions now, I will probably have an opportunity to do so at a later stage.

We could stand here and debate the rationale and the virtues of this form of election all night. There is a pretty clear division, although not entirely politically, on what noble Lords think about this. The coalition's view is that these 12 cities should be given the opportunity to decide whether they think this form of government, which is a different way of doing things, is the right way to go. I readily accept that this is not a policy that the electorate will want in these cities, but they must be given an opportunity to decide and to consider the options. Indeed, people will have to put out some publicity to explain the situation and make sure that the electorate understand the issues at stake.

I do not agree with the concept that has been put that the Mayor of London has not made an impact. I suspect that if you asked people in London who the mayor was they would have a pretty good idea and they would have a pretty good idea of what he did. A mayor is constantly in the news and doing things. People either like or do not like them but they certainly know who they are.

[Lord Beecham]

Will the noble Baroness agree that they also knew who Ken Livingstone was in his first incarnation, and who Herbert Morrison was, for example?

[Baroness Hanham]

I will have to take the noble Lord's word for it. People may have known who he was but he has certainly been heard of since. The question is whether he was better known at the time or subsequently.

A lot of questions have been asked. It is not helpful to go over the debate again. We have a debate on the previous orders and we have had a very interesting Second Reading speech from my noble friend Lord Cormack, who was not entirely supportive. We have just a few issues to deal with. As regards turnout on the referendums, as I think I have said before, probably some had about the same turnout as local elections. The noble Lord, Lord Beecham, did not think that was quite right. I do not think anybody would accept that they have been in the general election ballpark figure but there has been a good turnout.

The noble Lord, Lord Grocott, referred to the interminable business of savings and costs. We have gone through the election costs. We anticipate that the costs of reorganisation will absolutely depend on what amount of reorganisation a local authority needs to do. It may not need to do very much at all. The mayor comes in and it might need to provide him with a room. He will probably need a couple of members of staff. His expenses will fall within the general administration of the council. Therefore, I do not anticipate there being a huge extra cost to the council as a result of this. I am sure it will make the decisions which ensure that there is no huge extra cost. I do not think the Government want—

[Lord Grocott]

I intervene only as it may save time when we discuss this later. Presumably, figures are available showing the cost of the mayoral systems that have been introduced. I challenge the Committee to say whether there has ever been a local government or, indeed, any other reorganisation which has not cost more than people said it would. I respectfully suggest to the Minister that the costs are likely to be a bit more than those incurred in providing a room and perhaps a secretary. When the orders come back to the House, could we be given figures showing what the actual costs of reorganisation have been where the mayoral system has been introduced?

[Baroness Hanham]

I am not sure that I can answer that even now. As I have said, the costs will depend on how much reorganisation a city council has to undertake to accommodate the mayor. As I understand it, the evidence we have shows that there has not been a substantial increase in costs where elected mayors have taken up office. I am not going to be able to provide figures down to £5,500,000 and 36 pence. If I can find more helpful information for the noble Lord, I will, but this is about as good as we can get in that it is for the relevant area to work out in its own mind how much reorganisation it needs to do.

The implementation of the system is entirely the same. It will be up to the authority itself to decide how to implement it. However, we expect the mayor to be in position three days after the election. There should be no hiatus. As I say, he should be in position three days after the day on which the result of the first mayoral election is declared and then take office four days after the election, so this happens within a week.

I love the speeches of the noble Lord, Lord Beecham. They are all always very taxing and have a nice aspect. I thank him for his speech. I do not have much to say in response to it but it was nice to hear his words. He has been consistently against us from the start, so there is no change there. I hope that within the space of these two discussions we have more or less covered the ground. I appreciate that we are going to have another go at this later.

Motion agreed.