Local Authorities (Conduct of Referendums) (England) Regulations 2012

Baroness Hanham Excerpts

Monday 6th February 2012 Lords Chamber

Moved By

[Baroness Hanham]

That the draft regulations laid before the House on 5 December 2011 be approved.

Relevant documents: 36th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 January.

Amendment to the Motion

Moved by

--- Later in debate ---

[Lord Tope]

My Lords, I entirely accept that. I am quite sure that in her distinguished career, the noble Baroness as a county councillor—indeed, chairman of the education committee—must on many occasions have had to make such unpopular arguments. I understand that and I am sure that the noble Baroness does as well.

I do not want to take too long or carry on being quite so provocative. However, we come now to the question of why we should have the referenda. First, it was stated in the Conservative Party manifesto, which was at the time of no great excitement to me, but it was then agreed in the coalition agreement—my party has agreed to the commitment that there will be referendums in the originally 12 and now 11 cities. That is an election commitment. It is a governmental commitment. We can all argue what the public do or do not expect. They may not expect political parties to carry out their commitments, but they ought to be able to expect political parties to carry out their commitments. Rightly or wrongly there was a commitment to hold these referendums. It is right that the Government should now be doing that, whatever we may individually hope will be the result of those referendums.

We had the question again about legislation. The Localism Act did not expressly state that these referendums would take place, but it certainly gave the power for them to take place. It was very well known, not least because the coalition agreement referred to it, that this was going to happen. The fact that people are only now in February preparing for a referendum that will probably take place on 3 May is hardly surprising, given all the commitments and all the legislation, including the passing of the Localism Act.

Therefore, I think that the Government are right to be holding these referendums in accordance with the commitments given. Those of us who hope for a no vote should have a lot more confidence in our ability to convince voters. Above all, we ought to trust the people to decide on this. It will decide the issue one way or the other for the foreseeable future. We can then get on with debating an issue that I think is far more important, which is the powers that our local government has—whoever is running it and whatever governance system they choose to have—to get on and revitalise not only our cities but the whole of the rest of local government in this country.

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

My Lords, the passion at the end was very good. It has been a low-key debate apart from that. I think the noble Baroness, Lady Farrington—if I may hesitantly say so—has quite a short memory, particularly in relation to putting legislation in place before it has been passed. I stood where the noble Lord, Lord Beecham, is on more times than I care to recall, telling the then Government that they were introducing and had almost put into effect legislation before it had been passed. Therefore, I do not accept that challenge to what we are doing here, but I do think the noble Baroness must not forget that that was a situation with practically all the legislation that the previous Government put in place. We must not forget that.

The grant to each local authority is done against a formula—as indeed the previous Government did. We have argued for years over which way the formula was going, one way or the other. People have short memories. We must just all try to remember where we came from.

The noble Lord, Lord Tope, drew attention to the fact that the coalition Government’s programme made it clear that we are committed to creating directly elected mayors. That commitment was carried out in the Localism Act and was a commitment to having a referendum in 12 cities. Those cities are now 11 because Leicester took the decision to move to a mayor under the original provisions in the Local Government Act 2000. The Government believe that there is good evidence that a powerful, dynamic and directly elected mayor can provide strong, visible leadership, increase accountability for local decisions, deliver local economic growth—that is really important—and bring greater prosperity to their city. However, we believe that it is up to the electorates in these cities to decide in a referendum whether they believe that the mayoral model is one that they would wish to embrace. Through directing that referendums take place, we are ensuring that the people have the opportunity to address the question for themselves.

The noble Lord, Lord Grocott, said that the question that was going to be asked was skewed. I remind him that it is set by the independent Electoral Commission and not by the Government.

[Lord Grocott]

My Lords, I did not express myself very well. I said it was skewed in the sense that it was being asked only in those areas that currently do not have a directly elected mayor. It would be a far fairer test if referendums were also being held in areas that already have them and may want to get rid of them, as Stoke did.

[Baroness Hanham]

I hear what the noble Lord says, but that was not a provision in the Localism Act. It provided for referendums in the 12 cities and not for referendums elsewhere or on other mayors that have already been elected under the 2000 Act, which was implemented by his Government.

The heart of the case advanced by the noble Lord, Lord Beecham, is the question of compulsion and the cost of the referendums. We are not requiring any particular outcome for these referendums; we are clear that the decisions about local government are for local people and nothing that we are doing departs from that principle. We are ensuring that people in our larger cities have the opportunity to address the question as to whether they want a mayor for their city. We have made it clear that central government will bear the cost of the referendums, estimated to be about £2.25 million, in line with the long-established new burdens doctrine. On the examples given by the noble Baroness, Lady Farrington, of what her local authority would think about and what people think about, this will come from central Government—

[Baroness Farrington of Ribbleton]

It may surprise the Minister that people whom I have represented over many years do not distinguish where the money comes from but where it goes to.

The Minister reiterated that this provision was in the manifesto agreement of the coalition, when it came together. So it was in the manifestos of both parties and in the coalition agreement that there would be no top-down major reorganisation of the health service. I find it difficult to accept why certain things in the coalition agreement are sacrosanct while others are being trodden on daily to the disgust of the medical profession.

[Baroness Hanham]

I thank the noble Baroness for her comments. The Government believe that there is good evidence that—

[Lord Bilston]

Would the Minister allow me to ask a question about costs? We are all well aware of the problems that the majority of people in this country are facing at this moment. How do the Government reconcile the spending of £2.5 million on these referendums, £85 million on the AV referendum and £25 million on the referendum for police commissioners? How can we square this vast amount of expenditure when there is so much poverty and we are taking legislation through this House which will make people more impoverished? We are voting on measures which are unnecessary, certainly in the minds of the public. As we have heard, they are not interested in these kinds of changes. They want local government as they have always understood it: councillors working together for their communities, most often across parties, to bring about the improvements that people look for. I suggest that this is a complete waste of time and money.

[Baroness Hanham]

My Lords, when we have had the referendums we will know whether or not people want to have a mayor, or whether they want changes to their local governance system. This is in 12 cities, that is all: the 12 largest cities. It is not in the rest of the country, which, as the noble Lord, Lord Beecham, said, can already have those referendums if they can get enough people to sign the bits of paper under the Act passed by the previous Government.

The value of large cities effectively led by powerful mayors is demonstrated by international and domestic experience. I am not going to quote Barcelona. There is, not least, the Mayor of London: the capital has benefitted from having a strong voice and leadership. As a result it has been possible to start devolving powers from the centre to the mayor, who is then able to work in conjunction with local government and see major infrastructure projects, such as Crossrail, implemented. It is exactly because of these and similar benefits which we believe that mayors will bring to other large cities that, in our view, those large cities should all have the opportunity to be governed by elected mayors. Evidence shows that, on average, local authority mayors are known to 57 per cent of local people—over twice the percentage for a council leader. I will not tempt the noble Lord, Lord Beecham, to tell me what percentage of people recognised him on the streets of Newcastle. I am confident that it might be a smidgen under 57 per cent, but I am not going to make a bet on it.

Noble Lords on both this and a previous occasion have argued against these orders, and against what they see as being compulsion, citing the current provisions under the Local Government Act 2000, which include the petition trigger and the ability for a council to resolve to change its governance arrangements, as being sufficient. This is consistent with the approach taken by the previous Government, who legislated to hold a referendum in 1998 on an elected mayor for London, which has also already been referred to by my noble friend Lord Tope.

However, I would like remind noble Lords that, under the Local Government Act 2000, which was enacted by the previous Government, there were two further triggers for a referendum. Section 35 of the 2000 Act provides that the Secretary of State may make provision enabling him or her, in circumstances set out in the regulations, to direct a local authority to hold a governance referendum. Section 36 of that Act provides that:

“The Secretary of State may by order make provision requiring every local authority, or every local authority falling within any description of authority specified in the order, to hold a referendum”,

on whether those authorities should operate a specific form of governance, which could include the mayoral form of governance. We are not on a unique path here. In fact, the previous Government used the power under Section 35 of the Act to compel the London Borough of Southwark, which I think the noble Lord mentioned, to hold a referendum on its governance model in January 2002. Indeed, this compulsion was in the form of a direction and was not even subject to parliamentary scrutiny, as this legislation is. The provisions in the Localism Act 2011 are therefore not new or confined to this Government, who are concentrating, as I have said, on just 12 cities—but that is now 11, following Leicester’s decision to adopt the mayoral form of government.

It has also been argued that there is no appetite for a mayor or, indeed, for a referendum but I would like to be clear that a case for a referendum under these circumstances is not about whether there is a clamour for one. It is about the governance of our big cities and their contribution to the country as a whole, and about how a mayor can help their city to perform even more strongly economically, socially and environmentally. That is why we believe, at the very least, that the people of the city should have the opportunity to address—and seriously address—the question of whether to have a mayor. The choice is theirs.

In the next few months, discussions and arguments will take place about the strengths and weaknesses of a mayoral model—I am saying “mayoral” because I am not sure that it is “mayoreal”, as I do not think there is an “e” in it. It is exactly this type of debate and discussion that points to the validity of an exercise in giving local people the opportunity to address the question of whether to move to that. Let us be clear; we see mayors as being better able to deliver growth and prosperity to our larger cities, something which I know that we all want.

During Grand Committee, and indeed today, noble Lords asked about the cost of a mayor against other governance structures, and about internal administrative costs and savings or allowances. As we made clear in the impact assessment, which I am sure noble Lords have all studied, and as I said in Committee, any costs or savings will depend on how much reorganisation a city council decides to undertake to accommodate the mayor. In order to do so, it may of course reallocate resources internally in a variety of ways. However, based on the 11 authorities which have adopted an elected mayor since 2000, there does not appear to be any substantial difference in the corporate and democratic core costs of having a mayor compared with a leader. Perhaps that underlines my reply to the noble Lord, Lord Grocott, last time. In the light of the current financial position, I am sure that any elected mayor would want to keep their costs and allowances down to ensure that they remain within budget.

I think it is correct that the version of the question which the noble Lord, Lord Grocott, was kind enough to tell the department that he would ask is not entirely the question that he asked in the Chamber. I am going to reply as on the first, if I may. He had asked what the costs were in the administration of the Greater London Council in its last year, if that is correct, and what the costs are now that we have a mayor and Assembly. The noble Lord is nodding his head, so I assume that is right. I can tell him that the GLC and GLA are not directly comparable in terms of function, particularly since information on the GLC is now historic. The combined component budget for the GLA—that is, the mayor and Assembly—for 2011-12 is £155.1 million. That is net of any specific grants of council tax and is the closest publicly available figure to an administrative budget that we can find. The noble Lord may wish to note that the current Mayor of London has in fact frozen council tax during his last four years in office, helped in part by this Government’s two-year council tax freeze. By contrast, under the previous Mayor of London the Greater London Authority's council tax levy almost trebled.

Finally, my honourable friend the Minister for Cities in the other place, Greg Clark, recently announced the Government's intention that the first election of a mayor will take place on 15 November of this year, fulfilling the Government's commitment that mayoral elections would take place shortly after any referendum which resulted in a yes vote. I am sure that there will be vigorous debate between 3 May and then if there are to be any elections.

We are clear as to why we believe that elected mayors would enhance the leadership of the 11 major cities, delivering greater growth and prosperity. We cannot compel an outcome but we can give local people the option of a change of governance. I am grateful to my noble friend Lord Shipley for his comments, and, indeed, to my noble friend Lord Tope. I hear what he says. It will be interesting to see the outcome.

In response to the amendment of the noble Lord, Lord Beecham, I simply add that these orders will give the people of the cities involved an opportunity through a referendum to consider and decide on their future governance without the cost falling on the cities themselves. I commend the orders to the House.

[Lord Beecham]

My Lords, I am grateful to noble Lords for what has been a lively debate. I am particularly grateful to my noble friends. To reassure my noble friend Lord Grocott, I think that three local authorities are seeking to undo the mischief of the mayoral system, as he and I and perhaps some of those would see it, although it remains to be seen what will happen in the referendums which will no doubt take place in those authorities.

I entirely share the view of the noble Lord, Lord Tope, about the original referendum in London. I opposed the proposition at the time, as, indeed, did Ken Livingstone, who was not at all keen on the idea until he was a candidate and was elected. However, such things happen in politics.

The Minister referred to the cost of the referendums and made the point again that that is being paid for by the Government. However, the cost of any subsequent elections will not be borne by the Government. They will be roughly the same figure and will fall on the relevant local authorities in November if the referendums lead to an affirmative vote. She also referred to Southwark, where a referendum was apparently imposed in 2002. That achieved the amazing turnout of 11 per cent and rejected the concept of having a mayor, which my noble friend Lord Grocott mentioned. That is surely evidence that there is no appetite for these elections, about which I spoke in moving the regret Motion.

However, the Minister did not respond to my question about what is to happen after this round of referendums. There are some 300 other councils. Is it the Government’s intention to roll this out across the country? What about the flagship Tory councils, such as Westminster and Wandsworth, which she apparently believes are less good performers than those with mayors? Those are Tory councils with substantial populations and responsibilities. Apparently, there is no proposal at the moment for referendums in those places. We have to learn eventually—

[Baroness Hanham]

With respect, I have answered that question. I drew noble Lords’ attention to the fact that the Localism Act allows for referendums to be held only in the 12 cities. There was no question of there being referendums elsewhere. However, as the noble Lord knows, they can be held, if that is what is required, under the Local Government Act 2000.

[Lord Beecham]

I am not sure that that is right. However, in any event, irrespective of whether or not the Government have the power to require referendums—I think that they do, but I may be wrong—what the noble Baroness has said constitutes a pretty substantial disparagement of the record of her political colleagues in significant authorities not unadjacent to where we are debating these matters, among others. I find it rather strange that apparently only mayoral authorities are capable of delivering regeneration and economic prosperity. The case that has been advanced is that you need a mayor to make that progress. Frankly, I do not accept that. However, in general there is a continuing lack of evidence in support of the mayoral system. I say with all due respect to the noble Baroness that affirmation is not evidence.

I turn to the noble Lord, Lord Shipley. He gives as a reason for supporting elected mayors that there are to be police commissioners. In November people will have the opportunity of buying one and getting one free because there will be two votes on the same day. But, of course, it will not be free; it will presumably be double the cost. If there is a mayoral referendum, that will cost roughly £250,000 and there will be separate costs for the police commissioner elections, which would also clock up to the same figure in individual authorities. If they are buying two, they will have to pay for two. They do not get one free.

Why the existence of a police commissioner should make it all the more desirable to have an elected mayor, I do not understand. But then few people understand why we should have police commissioners in the first place, including quite a lot of Members on the government Benches in this House and in the other place. Certainly it is not understood by the Prime Minister’s favourite police officer, Mr Bratton, whom he wanted to appoint as Metropolitan Police Commissioner, who could not understand why the American system should be imported into this country.

The noble Lord also welcomed the powers to be given to elected mayors but without explaining why only elected mayors should get them. In fact, it is not only elected mayors who are likely to get them because discussions are going on with other authorities. There is an interesting development around Greater Manchester with the Association of Greater Manchester Authorities, which is not predicated on the existence of a mayor either from Manchester or the area as a whole.

I must tease the noble Lord somewhat. It is only a few months since he and I were jointly discussing how we might campaign together against the idea of an elected mayor. This gives rise to the Paul Daniels question. Your Lordships will remember the magician and television personality Paul Daniels and his attractive young wife. She was asked: “What is it about balding millionaire Paul Daniels that persuaded you to marry him?”. I gently put to the noble Lord, “What is it Lord Shipley, recently appointed government adviser on cities, that has led you to change your mind about elected mayors?”.