Deregulation Bill
Baroness Hanham Excerpts(9 years, 2 months ago)
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Lord McKenzie of Luton
My Lords, in moving this amendment, I will also speak to our other amendments in this group. In doing so, I, too, draw attention to my interest in the register. We consider that this is an integrated group of amendments that stand together, should we decide to test the view of the House. I trust that that is agreed.
The issue of short-term lets has generated considerable controversy since it has been proposed that there should be some relaxation of the London provisions, but it has also focused attention on what is now happening in the market and why the status quo cannot be sustained. Currently, the letting of residential accommodation for temporary sleeping accommodation in London for a period of less than 90 consecutive nights constitutes a change of use for which planning permission is required. Notwithstanding that there is the possibility of a fine of up to £20,000 for failure to secure permission, we know that short-term letting is extensively carried on without permission being available.
We have covered in earlier debates the problems that can arise and the issue is helpfully dealt with also by the briefing we have received from London Councils for this debate. It concerns the potential loss of residential accommodation to the lucrative short-let market, increased problems with noise and anti-social behaviour, loss of community identity, increased crime and fire safety risks, and significant challenges on continual enforcement. We know that other cities around the world are experiencing similar problems. There is clearly a market for this activity and business opportunities have been created, particularly via the internet, which are different, as the noble Lord said, from those of the 1970s. According to the Government’s own figures, there are currently thousands of London properties and rooms advertised as used for short-term lets, each potentially in breach of the law. That is an untenable situation.
The amendments that I am speaking to have the support of the noble Baronesses, Lady Hanham and Lady Gardner of Parks, and the noble Lord, Lord Tope, who have each added their names. Indeed, we have worked together across our party divides to come up with a package of measures that, building on the government amendments, would enable home owners who wish to let their homes on a short-term basis to do so unless there is detriment to the amenity of the locality and to do so within a system where there is proper notification to local authorities and where enforcement is enabled. Like the Government, we do not see this as providing new opportunities for large-scale commercial lettings. These amendments, too, are about providing safeguards for the local community.
Our amendments cover five issues. First, there must be provision in regulations for those letting properties on a short-term basis to have an obligation to notify the local authority. Our amendment is not prescriptive as to form and content and it need not be overly bureaucratic. The Minister rather set his face against that in introducing his contribution, but there is no reason why this could not be dealt with very straightforwardly via some web- based approach. It is not prescriptive, but it would give an opportunity for the local authority to gain an understanding of the scale of activity in its area. It would also aid local authorities in their enforcement role, which we know is a challenge at the moment, and of course could potentially be an encouragement to tax compliance.
Secondly, we consider the number of days in the calendar year that accommodation should be available for short-term letting should be 60 rather than 90, as the Minister recognised, with regulations enabling this to be reduced. We consider that to be a more reasonable constraint and protection on local amenity. But even that would allow a four-month back-to-back letting across a year end. The Minister simply asserted that 90 days was more appropriate. I am not sure that that assertion, frankly, carries more weight than one for 60 days.
The concept is that short-term letting should be allowed effectively for someone’s home. It appears that the Government are seeking to define that by liability to council tax. We think that that is inadequate. Would not a liability to council tax arise for somebody letting residential property on a commercial basis, for example, between tenancies? Limiting the relaxation to someone’s principal residence in London would better target the deregulations.
Fourthly, we welcome the provision that the Government are seeking to make for local authorities to disapply the regulation for certain properties or areas, but oppose this right being subject to the consent of the Secretary of State. Local authorities are better placed to make the judgment about the impact of short-term lettings in their boroughs. Surely, that must be the case. We agree that they should not be able to do this in an arbitrary manner and protection of the amenity of a locality is a fair yardstick. However, we believe that a desirable hurdle rather than one that is necessary is considerably fairer. Indeed, the necessary hurdle could give rise to substantial and fair challenges on the local authority.
Finally, there is the issue of enforcement. In their policy document of February this year, the Government stated that:
“To protect amenity and address concerns over nuisance, the Government proposes that the new flexibility should be able to be withdrawn from particular properties after just one successful enforcement action against a statutory nuisance”.
In his contribution, the Minister said that there was provision elsewhere for this to be effective, but I am not sure where it is. The Government were clear in their policy document that that was what they wanted to happen. Our amendment provides that regulation should make such provision but is potentially more flexible than the “one strike and you’re out” approach.
These amendments are designed not to undermine the Government’s position, but to strengthen the safe- guards, and also, in the spirit of localism, to recognise that local authorities and not the Secretary of State are best placed to determine whether the scale of short-term letting is destroying the amenity of their areas. I beg to move.
Baroness Hanham (Con)
My Lords, my name is also on this amendment, and I would like to draw attention to the declarations I have made in the past of being a joint president of London Councils and also a former leader and member of the Royal Borough of Kensington and Chelsea, which will be affected by this legislation.
The noble Lord has set out very clearly the amendments that we think are necessary to make this legislation tenable. London has a particular problem. I drew attention on Report to a phrase in the policy document which said that London needed to be brought into the 21st century over the renting and letting of property. I said then and I say now that I think that London is already and has been in the 21st century for a very long time. There is enormous pressure on property in London. There is probably more renting now in London than anywhere else. There is a hugely transitory population, so that we now have great areas where we know that people are not resident. The properties are not used; they are investment properties. London has a dichotomy. It is an area where people want to live but now cannot, largely because it is getting so expensive. Where there is investment, the people who have invested in property are not from this country but from abroad. Where there is a lot of very new property on land which perhaps could have been used for local people, it is now largely empty.
The temptation to let is enormous. To make sure that there is no abuse of the proposals which the noble Lord has brought forward, we have tabled these amendments. Before saying more about that, I want to mention some other things that I am concerned about. The Government—of whom I have been a great supporter —are all in favour of devolution, of passing powers to different parts of the country and to different parts of England. We have just done it with Greater Manchester. There is more devolution. London has had devolution through its ability to put forward Private Members’ Bills to deal with the issues that affect London. These Private Members’ Bills are not put forward in isolation: they have to be put forward with the agreement of all the London boroughs. That process has been deficient, at the very least, in terms of what has happened here. I saw a representative of London Councils here today in Parliament and, as far as I am aware, London Councils has been solidly against this proposal since it was first brought forward. By definition, that includes the London boroughs.
For some reason, the Government have chosen to try to override what London wants. They may not think that London figures very greatly within this category in relation to the rest of the country. One of the rationales for making the change is to enable London to do what other parts of the country do. But London is different. It has very different pressures, as I have tried to suggest.
In these amendments we are trying, first, to query whether people really do go on holiday for 90 days. I think we would all be jolly lucky if we managed to get that amount of time off. That suggests that if people want to let for 90 days they might not be quite as altruistic as they might appear to be at first sight. Is it not reasonable to suggest that people might like to go on holiday for a lesser number of days?
Secondly, the amendments are trying to ensure that somebody will at least know that the letting is likely to take place. We have not specified what that process should be other than that people should notify their local authority that they want and are likely to let their properties on a holiday-let basis. If that does not happen and something goes wrong or difficulties occur in those properties—I think that my noble friend Lady Gardner will go into this in more detail—no one will know why or how the properties have been let, or to whom they have been let, and the local authority will have no real powers of intervention. I think that that matters. I am all for deregulation but I also think that because of the whole problem of renting in London, a little more grip needs to be kept on this.
Baroness Hanham
Baroness Hanham
My Lords, I do not think that I need to delay the House too long on this, but I want to draw attention again to an issue that involves overriding what London is doing, which is becoming quite a concern. It relates to how waste disposal penalties are going to be put forward. London has been running its own waste penalty system since the London Local Authorities Act 2007; it has its own system set up and runs a very tight way of dealing with this, which is the forerunner of what is being proposed for the nation as a whole.
Lord De Mauley
My Lords, I am trying to get there.
In our view, legislation should not provide for people to be issued with, or threatened with, financial penalties the first time they make a mistake. That is why we want local authorities to give householders a written warning. The requirements on people are not always obvious, particularly when they move to an area where a different collection system applies. It is right that people should find out what they have done wrong and should have the opportunity to rectify mistakes before they are asked to pay a penalty. People in London have as much right to this opportunity as anyone else in England.
Based on what we have heard from local authorities, we do not believe that this will add significant burdens compared with how the current arrangements operate. We know that many authorities already communicate well with their residents and seek to educate them if they are having difficulties with collection requirements, but if we do not amend the London Local Authorities Act, this legislation would still allow someone making a mistake for the first time in London, but not elsewhere in England, to be penalised. We do not believe that that is fair or right.
I am aware that some noble Lords consider that the system we propose is bureaucratic. Indeed, my noble friend described it as byzantine. She used the words “long and protracted” and mentioned our five-page schedule. Let me explain why I do not believe that we are introducing significantly more bureaucracy compared with the current London system.
London Councils produced a 22-page guidance document in December 2013 on the current system operating under the London Local Authorities Act. According to this, London authorities issue householders with a penalty charge notice. I quote from the guidance:
“Depending on each local authority’s policy, a verbal or written warning may be given before escalating”,
to a penalty charge notice. The householder then has 28 days to make representations to the London authority. If representations are made, the authority then has 56 days to make a decision. If it rejects the representations, a notice of rejection must be served. The householder may then appeal to an adjudicator before being required to pay the penalty. All that is under the current system in London.
Under our proposed system, London local authorities will first issue a householder with a written warning. The next time a householder makes a mistake they may issue a notice of intent. The final notice can then be issued after 28 days, taking account of any representations made. The householder may then appeal to an adjudicator before being required to pay the penalty. Is our proposed system really adding bureaucracy, compared with the current system?
As well as reducing the regulatory burden on householders, our proposals seek to ensure that the level of penalties is proportionate. Given the broad agreement that making a mistake related to household waste collection should not be a criminal offence, it would not seem appropriate for the penalty to be higher than for a criminal activity. The penalty under the London system for a breach of the rules about presentation of waste is currently set at £110, yet a shoplifter committing a first offence may be issued with a £90 penalty notice for disorder. Under our proposals, councils in London would be able to set the penalty between £60 and £80.
We believe that this range is proportionate, but understand that some noble Lords consider that it will not act as a deterrent. We should remember that for many people in London, as elsewhere, an £80 financial penalty is certainly significant. For people who consider that £80 is insignificant, I ask whether they really consider £110 such a radically different amount that they will treat it as a significant penalty. We believe that £60 to £80 is the right level and that householders in London have as much right to be treated fairly and proportionately as anyone else in England.
Also, I suggest that it would not be right for a “harm to local amenity” test to apply everywhere in England except London. Under the Environmental Protection Act, we propose that householders should be issued with a fixed penalty only if their behaviour actually causes problems in their local neighbourhood. They could receive a penalty for leaving bin bags on the street for days on end, but not for leaving a bin lid open. If we kept the London system as it is, we would be in the anomalous position where the legislation allows local authorities to issue penalties to householders who make any sort of mistake in this area if they live in London, but not if they live anywhere else in England.
We intend to work with local government to produce advice to help local authorities implement the test with confidence. My officials are of course also happy and available to talk to representatives from London Councils and others about the practicalities of operating this system if that would be useful.
This clause and schedule, as they stand, will introduce a proportionate approach, providing appropriate safeguards for householders throughout England, including London. I therefore ask my noble friend to withdraw her amendment.
Baroness Hanham
My Lords, I think I said on Report that I felt really sorry for the Minister having to respond, because it is clearly not an easy clause or schedule to respond to. There is absolutely no rationale to it whatever. The fact is that whatever the Minister has been told to say, this is a much more protracted procedure than is going to go ahead nationwide. Most local authorities will deal sympathetically with people who make a mistake by putting something out in a way that they should not. As I understand it, it does not require another offence to trigger the next stage. It can be the same offence that has not been acknowledged —so the warning of an offence, then a letter of intent, then perhaps a penalty charge notice, then an appeal, then to a tribunal, because under the England procedures you can continue on down the line. I totally fail to understand why London should be encumbered with this.
I did not make the point in my opening remarks about the level of the penalty. I worry that this is being presented by the Minister as a penalty appropriate to shoplifting. In London the penalty for this offence, as he has rightly said, would be in the region of £130, but then so is a parking ticket. London is a bit more expensive in what it does and a shoplifter would probably go to court anyway rather than have a penalty charge notice. Indeed, if people spit chewing gum on to the pavement, we are still looking at the same sort of penalties.
I think this is a daft bit of legislation and I wish to test the opinion of the House.
Deregulation Bill
Baroness Hanham Excerpts(9 years, 3 months ago)
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Baroness Gardner of Parkes
I will be happy to clarify that. There seems to have been a slight muddle in that the last amendment I had on Clause 33 was meant to be degrouped, but instead only one was degrouped. I am therefore turning this into a slightly longer and wider field because I lost the opportunity to do that on the previous amendment, which was my original intention. I hope that your Lordships will understand that.
Everything is supposed to be perfect until you do it, then you find—well, I advise noble Lords to read it for themselves. It is from Monday 2 February, in the Evening Standard. There is another whole page on the other side about the woman behind the “unhotel revolution” and pseudo hotels—so it is quite a wide issue. It is interesting that the fraud teams are being brought in to look into the whole issue. I had a reply from the treasury officer when I asked him what of these lettings would be tax free. The answer was, “Nothing, except the right to sublet a room in your own house to a lodger for a sum of £4,000 and something—less than £5,000”. That would be the only free opportunity. It is very interesting that the Serious Fraud Office attended a meeting that we had in the House of Commons in January, partly on this issue but on property in general. There is such an opportunity for fraud that it will be very interesting to know who declares what, with no one able to check on anything at all as to who is in these places, with risks of terrorism and fraud or whatever else is going on. People tell me that they find it almost unbearable, the smell of drugs being smoked in the flat above them, because it becomes so intense to have 10 people in one room. Again, are there no restrictions on how many people can fit into one bedroom? I find it hard to believe that you can have 10 people—and this is in three different flats.
I could go on and on, but I do not intend to, because it is late and the House has had a very busy time, with more to follow. I hope that the Minister will be a bit more open about things, as I am very dissatisfied that Questions for a Written Answer have simply not been replied to. I beg to move.
Baroness Hanham (Con)
My Lords, with my noble friend Lord Tope, I have three amendments down on this matter. To start with, I point out to the House that this is a very small clause with a very large impact. It consists of six subsections, four of which require regulations. As my noble friend said, not only have we not seen any sight of these regulations but, apart from the Written Ministerial Statement that appeared on Monday, we have no clue what direction the Government take on this, other than that it is a complete liberalisation of the situation as it stands.
My noble friend Lady Gardner laid out in her usual elegant way some of problems with the legislation before us. We have a slightly different view on the emphasis to be placed on this, but we are all agreed—my noble friend Lord Tope, myself, my noble friend Lady Gardner and the local authorities—that this cannot just be allowed to rip. Local authorities have not paid any attention to people letting out their homes for short times. It has been illegal ever since the Greater London Council (General Powers) Act came in in the 1970s but, by and large, there has been a very sensible attitude taken about this—that if it is your home and you can get money in for a fortnight or so, it will not be a matter that a local authority will bother itself with. However, once it is acknowledged or admitted that the situation has been happening but that it is against the law and always has been, somebody does something about it.
London is different from everywhere else. Although the Written Ministerial Statement says in a rather patronising way that these measures, whatever they are going to be, will draw London into the 21st century, we should all recognise that London has actually been living in the 21st century since the 20th century—or halfway through it. We live with a great deal of problems, not only those which my noble friend described about people who come to live in a property for a short time and cause trouble. Another problem is that a lot of the housing now being built is investment property for rent and, unless there are some controls on who can let out accommodation on a holiday let, all hell will be let loose and there will be rentals all over London taking place in an entirely illegal way.
The laws have up to now been broken and there are now companies, some of which my noble friend mentioned, which, unwittingly or not, have enabled people to do that. But a business is building around all this, and there can no longer be any suggestion that this is just people having a one-off whim to go on holiday for a fortnight in New York or whatever and to earn a bit of money on the way. That is not the reality. The reality is that agencies are already set up to deal with people who want to let their houses short term. Some of them will be very good and some will already have measures in place to let houses in a way that means that they are properly managed, they are cleaned up afterwards, they are looked after and their tenants do not cause problems—and there is some security aspect about who those tenants are. However, let us not delude ourselves that that is what will happen. As the business builds, more and more businesses will be built around it. Unless there is some regulation as to what is and is not allowed, we can say goodbye to quite a lot of accommodation that we are pleased to describe as permanent accommodation at the moment.
My amendments do three things. One says that there must be at the very least a fine-touch registration system with the local authority. It can be done quite easily and uniformly across London, with a website—and I have spoken about the royal borough, to which my noble friend has already referred. It can be done securely on a website. What can be discussed subsequently is whether people have to register before they go away or whether they have to register annually and say that they may be going away and letting their property under those circumstances. It requires some indication as to how many days they will be able to do that for, and the Written Ministerial Statement suggests that it should be 90. I do not know about you, but I am jolly lucky to get 90 days’ holiday a year. It seems to be quite a lot—and I think that most families would find 90 days quite a lot to go away. There will have to be a balance between 30 days, which I think has been promoted, although it is very hard to know as we do not have any regulations before us, and the 90 days being proposed by the Government.
There must be some way in which the local authority knows that the property may be let by the permanent owner, and it must have some idea of how long they will be entitled to do that—and for a very good reason. If the local authority gets complaints about that property, it is very helpful for it to know, for enforcement action to be taken, that it is being let by the owner. There are plenty of examples. My noble friend could give spiels of examples of where a property has been abused and people’s lives have been made a misery by lettings such as this and longer term. That would bring the planning authority back into the situation. At the moment, it has been completely chucked out. The provision in the Greater London Council (General Powers) Act goes and is amended with a few regulations that we do not know about and have not seen.
There is what I hope is an unwitting tendency at the moment to keep downgrading London. A later clause in the Bill on waste amends the London Local Authorities Act and this clause amends the Greater London Council (General Powers) Act. London is always going to be different and will always have different pressures and requirements. If every time local authority legislation goes through some of the measures get thrown out, that is not at all helpful or supportive. I think we would all hope that this clause would go away—at least until we have had an opportunity to sort out what the regulations are going to be, and how much regulation, even if it is light-touch regulation, we can put back in. My amendments try to achieve that. It is essential that the Government take note of the concern on this subject and do not try to pretend that London is some doolally maiden of two centuries ago with no idea of how anything works. They must recognise that London is an exceptional place, with great pressure on it from all sorts of sources, such as development, investment and the general movement of people in and out of the city.
I believe that our amendments are proportionate. I apologise to my noble friend the Minister for the fact that it is me—as well as my noble friend Lady Gardner—who is leading the attack from behind him, but I beg the Government to go back and take note of the concerns of London Councils. I should have declared my position as a co-vice-president of London Councils. It represents every local authority in London and it is absolutely against all these provisions.
Lord Leigh of Hurley (Con)
I thank the noble Lord. I was planning to speak to Amendment 48, so my comments are directed to that group of amendments rather than to the specifics of Amendment 47. I declare my interests both as an investor in residential property and as president—
Baroness Hanham
I hesitate ever to come in on a point of principle but my noble friend Lady Gardner said that she wanted Amendments 47 and 48 to be grouped, and that is what we have done. Have we spoken to Amendment 47 separately? Is there any way in which we can get this settled? I have spoken to the group commencing with Amendment 48, not Amendment 47. I was waiting for the noble Lord, Lord McKenzie, to come in and speak to his amendments. It seems to me that my noble friends Lord Tope and Lord Lytton have also spoken to the group starting with Amendment 48. I am sure that there must be a quick way of getting this sorted so that we are all speaking to the group commencing with Amendment 48.
Lord Ahmad of Wimbledon
My noble friend makes a totally valid point and I apologise—there should have been some closure with regard to Amendment 47. Perhaps I may suggest that I respond specifically to the issues around Amendment 47 and then we can move on. I understand that the amendment, having been called, will need to be withdrawn. Therefore, if my noble friend Lady Gardner is minded to speak to Amendment 48, perhaps she can, first, withdraw Amendment 47, as that will be a useful way of moving on to the more substantive debate.
Lord Ahmad of Wimbledon
My Lords, first, I thank all noble Lords who have taken part in the debate, but make special mention of my noble friend Lady Gardner. I know that she had a fall yesterday and I am glad to see her in her rightful place today. We were concerned that on such an important issue we might not see my noble friend in her place. Much as some of the questions she has posed are challenging, I wish her well in any subsequent recovery. As we have seen again today, she has put forward some very compelling arguments in respect of her position.
I will also say from the outset that I of course understand that noble Lords are keen to ensure that any relaxation of legislation governing short-term letting in London is available only to residents, so that they can make their property available when they are away for a limited duration, not to allow non-residents to use property almost or exclusively for short-term letting. I confirm that this is exactly the aim of the Government’s proposals. We clarified our intentions for the reform of legislation on short-term letting of residential accommodation in London in a policy document that was shared with your Lordships, as my noble friend Lord Tope said, on 6 February. I am sure we can come up with varying definitions of “short” and what have you, but it is late in the day, so I will not dwell on that too long.
Section 25 of the Greater London Council (General Powers) Act 1973 provides that the use of residential premises for temporary sleeping accommodation for less than 90 consecutive nights is change of use, for which planning permission is required. London residents face a possible fine of up to £20,000 for each offence of failing to secure planning permission. There are currently, as I am sure noble Lords appreciate, thousands of London properties advertised on websites for use as short-term accommodation. However, each potentially is in breach of Section 25 as it stands.
In response to our Review of Property Conditions in the Private Rented Sector, the new policy document that I referred to sets out the Government’s approach to modernising the legislation so that residents can allow their homes to be used on a short-term basis without unnecessary bureaucracy. The Government have carefully considered the views put forward in responses, and I thank the noble Lord, Lord McKenzie, for acknowledging the time that I have certainly sought to take to respond to some of the concerns of noble Lords on this issue. In bringing forward our reforms, we will therefore seek to make provision for safeguards to protect London’s housing supply and residential amenity and provide the ability for local exemptions to be made which would exclude specified premises or areas from the changes.
The Government want to enable London residents to participate in the sharing economy and to enjoy the same freedom and flexibility as the rest of the country, without the disproportionate burden of requiring planning permission. This policy is aimed at helping residents, not at providing opportunities for change of use from residential to business premises. In order to address the issues raised and to respond to some of the concerns, the Government intend to restrict short-term letting of residential premises to a maximum of 90 days in the calendar year, so that properties cannot be used for short-term letting on a permanent basis throughout the year.
I also confirm that we intend to include the requirement that properties must be liable for council tax, to exclude business premises. I also assure my noble friend Lord Tope that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility, where there is a strong case to do so. In response to the issue around regulations, I say to noble Lords that the Government intend to consider the matters I have just mentioned in deciding the most appropriate way to bring these measures forward into law.
For completeness, it is appropriate for me briefly to mention Amendment 47, which sought to restrict the ability to let residential property on a short-term basis, without planning permission, to those times that coincide with,
“a major national or international sporting or entertainment event”.
It would be extremely challenging to define such events in a way that would exclude many other sporting or entertainment events that occur in London on a weekly or even daily basis; for example, European or international football matches and major concerts at venues such as Wembley and the O2 arena. I am grateful to my noble friend for withdrawing that amendment.
I will respond to some of the questions that have been raised. My noble friend Lady Gardner raised some concerns about Parliamentary Answers. It has been confirmed to me that I provided Written Answers to her Questions. Perhaps they were not as complete as she expected but I have checked the records; those Answers were provided and referred to the policy document and the fact that this would be made available before Report, which I hope has indeed been done.
My noble friend Lord Tope raised the issue of not consulting, in particular with Westminster Council. I assure my noble friend that my officials have met with London Councils officials and representatives from a number of London boroughs, including Westminster.
My noble friend Lady Gardner raised the issue of tax liability. We expect people to pay tax where they are liable. The “Rent a Room” scheme to encourage people to take in lodgers provides a tax allowance on income received from renting out a room; it is a long-standing provision. My noble friend also talked about subletting in Camden. To confirm, a tenant will need to check with their landlord whether under the terms of their tenancy they can sublet. We do not seek to discriminate between people who own their property and tenants.
Amendments 48 and 49ZA would restrict the ability to let properties on a short-term basis, without planning permission, to no more than 30 days a year, as my noble friend Lady Hanham said. Amendment 48 would also prevent hosts being able to accept bookings from overnight guests at less than seven days’ notice, and would require them to notify the local authority of every single letting. It would allow local authorities to establish a fast-track notification process and introduce an administration fee. Amendment 49C would also require notice of short-term letting, and its intended duration, by the property owner.
We want to deregulate in order to provide the ability to let property on a short-term basis for 90 nights per year. This will provide residents with meaningful and proportionate freedom and flexibility in how they use their property. The Government believe that a limit of 30 nights is unduly restrictive. One of the major advantages of the internet is the ability to make transactions quickly and flexibly, and we want our reforms to facilitate this. A requirement for seven days’ notice would unreasonably limit the ability of hosts to offer accommodation to customers seeking to book at shorter notice.
Baroness Hanham
My Lords, for clarity, my amendment said 30 days. In speaking to it, I did not support the situation about the seven days’ notice, nor did I do anything other than say that we would want a short, light-touch registration, which could be up to as much as a year—very much supporting what the noble Lord said. It is important to get the nuances, which are slightly different, and I tried to make them clear but we were in a muddle about where we were.
Lord Ahmad of Wimbledon
The noble Baroness is always well placed to clear up muddles, as she has done so again. I fully accept that she spoke specifically to the issue of the 30 days.
Amendment 49, which would restrict the deregulation only to those properties which are the principal and permanent residence of the owner, and Amendment 49ZA, which would restrict the deregulation to the principal London residence of their owner, are unnecessary and overbearing. They would unreasonably prevent tenants carrying out short-term letting, which may be permitted within the terms of their lease. It would also prevent people short-term letting who may have another residence outside London, even though the London property would be viewed very much as their home.
Amendments 49A and 49B would remove the ability of the Secretary of State to direct that specified areas should be exempt from the changes. The Government want to be able to grant exemptions but only in exceptional circumstances and where a strong case has been made by the local authority. Otherwise, we want to be clear that our aim is to provide the same rights for all Londoners in all local authority areas.
The amendments would create different regulatory approaches across the capital, potentially resulting in differences between local authority areas. Residents would find that their near neighbours had either greater or lesser freedoms to short-term let their property, without any apparent justification.
Amendment 49C would remove the deregulation measures where a relevant enforcement process had taken place. It would also require the Secretary of State to make regulations for local exemptions where there were strong amenity grounds. I can assure noble Lords that we intend to provide that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility where there is a strong case to do so.
Amendment 50 is also unnecessary in the Government’s view. It is already the case that anyone carrying out illegal short-term letting risks a planning enforcement fine of up to £20,000. It is already possible for local authorities to apply for costs in the event of unreasonable behaviour during an appeal against enforcement action.
I assure noble Lords that the Government’s intention is only to deregulate Section 25 to allow residents occasionally to let out their property on a short-term basis; for example, when they are away on holiday. We are not seeking to create new opportunities for short-term letting on a permanent basis. Our policy document shows how we intend to achieve this in a way which balances the reasonable aspirations of residents to let out their homes temporarily with safeguards to prevent abuse of our reforms.
For these reasons, it is the Government’s belief that Clause 33 should remain part of the Bill. I fully acknowledge that differing views have been expressed by noble Lords, but I think that it is the shared intention of the Government and your Lordships to allow letting of property for residents but not on a commercial basis. I hope that some reassurance has been provided by what I have said and I urge noble Lords not to press their amendments.
Lord McKenzie of Luton
My Lords, in moving Amendment 53, I shall speak also to our other amendments in this group, Amendments 54, 55 and 56. I am grateful for the support of the noble Baroness, Lady Hanham, and from the noble Lord, Lord Tope, on these amendments.
Local authorities as we know are precluded from using their civil parking enforcement powers to raise revenue. It is suggested that enforcement by CCTV is particularly unfair because a motorist might be issued with a ticket as a consequence of a camera. The ticket arrives at their home some time after the event when they have no opportunity to examine the location when the alleged contravention took place. However, the Government’s consultation on local authority parking last year acknowledged the benefit of CCTV in enforcing moving traffic congestion where cars use bus lanes, do not exit box junctions, and so forth.
Our amendments go further, particularly in relation to the use of CCTV around schools. This matter was addressed forcefully in Committee by the noble Lord, Lord Tope, who pointed out the nonsense of allowing CCTV enforcement for 10 metres around a school—the zig-zag lines—but not beyond. Amendments 54 and 55 would include in the Bill exemptions from the ban, some of which the Government have already conceded should be provided. This applies to contraventions for stopping at bus stops and bus lanes, school entrance markings and red routes on the grounds of safety and the needs of bus services.
It is understood the wording of our wider use of CCTV within 100 metres of a school entrance may not always be practical, depending on the configuration of the road and other junctions. For so long as the principle is accepted, however, the wording could be tidied up at Third Reading. The arguments for preventing parking on the zig-zag lines at pedestrian crossings are similar to those made in relation to school entrances. Cars parked on the white zig-zags on either side of pedestrian crossings can obscure motorists’ view of those about to cross, especially children, the visually impaired and wheelchair users. This is particularly dangerous at zebra crossings where there are no traffic lights and motorists slow down only on seeing a pedestrian starting to cross.
Amendments 54 and 55 would extend the exemption to clearways. Currently there are junctions and other parts of clearways where parking is prohibited to protect pedestrian cyclists and motorists themselves. It is unclear why the Government have chosen to exempt red routes but not clearways, given that the same safety considerations are our concern.
Amendment 66 will ensure that the provisions of Clause 39 cannot have an effect until the equalities impact assessment and a regulatory impact assessment have been undertaken. If the Government continue to argue that the former is not necessary, perhaps they would make clear why. As for the RIA, it has apparently asserted that the measures have no impact on business. However, the LGA says that it has heard directly from private companies contracted to enforce parking, which assert that it does have an impact. Do the Government refute that assertion? I beg to move.
Baroness Hanham
My Lords, I have added my support to all the amendments in this group. The anomaly between the treatment of zig-zag lines at school gates and those by pedestrian crossings is ridiculous. Both involve strong safety issues, and the Government should be able to see their way to including pedestrian crossings, at the very least. They also need to review the regulations about the amount of land taken up as a result of a school entrance. That aspect does not make sense; the amount is far too little compared with what is there at present. That is a technical matter that needs rearranging. The rest of the amendments all seem good common sense. I want to get rid of CCTV, but we cannot get rid of it completely if that will cause a safety hazard.
Lord Tope
My Lords, I too have added my name to these amendments, and I am sorry that the hour of the night that we have reached does not encourage us to give them the full debate that they deserve. I too am looking forward to the Minister’s explanation of why it is necessary to have CCTV enforcement on zig-zag lines outside schools, but apparently not on zig-zag lines by pedestrian crossings. I hope that he will say that the Government recognise that that is rather silly and, as they cannot find a sensible answer to the question why they are doing it, that there will be CCTV enforcement on zig-zag lines by pedestrian crossings.
The noble Lord, Lord McKenzie, will recall the debate—if that is the right word—that we had in Grand Committee, when we had only just received the draft regulations. I think that we all, including the Minister who replied on that day, recognised that the problem outside schools is rather more on the roads adjoining the zig-zag lines. I do not understand why the Government seem unwilling to allow CCTV enforcement on yellow lines adjacent to zig-zag lines outside schools, where there really is a problem. I would like to see a Minister go to a school in my former ward and explain to the people there that the rules cannot be enforced by CCTV on the yellow line, but can be on the zig-zag line. I remember my ward fondly, and I am certain of the answer that both the residents and the parents would give that Minister if he were brave enough, or stupid enough, to go and offer that explanation.
Amendment 56, to which the noble Lord, Lord McKenzie, has referred, deals with impact assessments. As he said, the LGA wants clarification of the grounds on which an EIA—equalities impact assessment—is not to be done, because it understands that one is required under equalities legislation. The noble Lord also mentioned regulatory impact assessments. As he said, the Government say that they have not produced one because they do not believe that their proposals would impact business.
However, I have in my hand a letter addressed to Eric Pickles, dated 30 January, from 11 companies that say that,
“these proposals DO directly affect our business and as such the government should conduct a Regulatory Impact Assessment in accordance with its own procedures”.
Some of those 11 companies are recognised as major companies in the parking industry, and they all say that this will have a significant impact on them, and call for a regulatory impact assessment. It is probably no small feat to get 11 companies all to affix their signatures to a letter, and we all look forward to the Government’s reply to the debate.
Deregulation Bill
Baroness Hanham Excerpts(9 years, 6 months ago)
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Lord Tope (LD)
My Lords, I follow my noble friend and, in deference to my other noble friend sitting on the other side of me, I am sure that he did not mean to say that the Royal Borough of Kensington and Chelsea makes a profit from parking because it would, of course, be illegal. I am quite sure that it does not do that. I felt obliged to say that.
Before I speak to the amendment more fully, and with the permission of the Committee, I want to make a small correction to something I said in Grand Committee last Thursday—as I have been requested to do. In col. GC 452 of that Committee’s meeting, I said—or I am reported as saying—that the company, onefinestay, believed that regulation should apply to properties that are the “sole or main residence” of the owner. That is not the company’s policy, and I have agreed to put on record at the first opportunity that the position of onefinestay is that the regulation should apply to all residences, including primary and secondary residences, not simply to one sole or main residence. I have put that on record. I am certain that we will return to this subject at another date and I need say no more about that today.
I return to the thorny issue of parking. For 40 years, until last May, I represented a town centre ward in a London borough. Many, probably most, of the houses and streets in that ward were built before the motor car was invented. Pretty well all the houses there were built at a time when it was inconceivable that the people living in them would be able to afford to own and run a car, let alone two or more, in some cases. One of the consequences is that the basic problem now in what used to be my ward is that there is simply not enough road space to accommodate residents’ own cars, let alone all the other demands on the road space. As a reward for my long service on the council, during my last year there I was given political responsibility for implementing—and, I have to say, changing a little—parking policy. It encouraged me to accept retirement, and I fervently hoped last May that I would never, ever again have to deal with parking issues and parking problems. It follows that I am not entirely grateful to Mr Pickles for ensuring—sounding very much more like Friday night in the pub than anything I would hear on the streets—that I am here talking again about parking policy.
I want to make some fundamental points that I know are not widely perceived. Good parking services in most councils all over the country are there to work on behalf of the local residents and, in most cases, on behalf of motorists, too. I strongly believe that, although I understand only too well why there is a popular impression to the contrary. Having had to deal with the sort of problems that I described, I know from experience that good parking services may not provide the road space necessary to solve the problem but can go a long way to making life more tolerable for residents and manageable for non-residents who need to use those roads and streets.
As has been said—indeed, I began by saying it—local authorities are not allowed by law to make a profit from parking. With deference to my noble friend Lady Hanham, who is sitting next to me, most local authorities are unable to make the sort of income that Westminster or Kensington and Chelsea are able to make. Nor, indeed, do most councils have the sort of problems that those two authorities have to deal with. Most local authorities, including my former authority, do not make a substantial profit—or income; I shall get myself into trouble—out of parking services by the time they have covered all the expenses that are necessary. Such surplus income as may arise is, and has to be, used for transport-related actions. That is important to understand.
We come now to this clause. I think that the noble Lord, Lord McKenzie, made reference to the Government’s consultation on local authority parking policies which took place at the very end of last year and the early part of this year. I think I am right in saying that eight organisations, as distinct from individuals, responded to that. Six of those eight were totally opposed to the Government’s proposals. The two that were not opposed—the motoring organisations—also did not fully support the Government’s proposals, which makes me even more concerned about why the Government—my Government—are still insisting on going ahead with this measure.
As my noble friend Lord Bradshaw has just said, if anything should be the responsibility of a local authority, it should surely be parking services. The local authority, and those elected to represent the local residents, best know the local circumstances and the local conditions, which vary not just from authority to authority but, frankly, from area to area, even from street to street. It is they who are in a position to determine what should and should not be done in implementing parking policy in a local authority area. Given my 40 years’ experience, I wonder why the Government are so foolish as to want to enter this minefield. For that reason, my noble friend Lord Bradshaw put down the proposal that this clause should not stand part of the Bill—that is, to delete the clause altogether. Frankly, I still think that would be the best thing that could happen. If the Government are minded to go ahead with the clause, I certainly accept that the amendments in the name of the noble Lord, Lord McKenzie, would go some way to mitigate it. Therefore, if that is the case, I would largely support those amendments, but I still believe that it is better to leave this matter to local authorities, whose job it is to deal with it.
The noble Lord, Lord McKenzie, also said that yesterday afternoon we received a copy of the draft regulations from the Minister. I am very grateful for that and am pleased that we received it in time for this meeting, although I am sure that the Minister and noble Lords will understand that I certainly have not had time in the intervening 24 hours to have a detailed look at it or even to consult those who know far more about it than I do. I hope that the Minister will tell me that I am wrong on this because I want to be wrong, but, from my first impression, it looks to me as if the draft regulations would allow CCTV enforcement of a school clearway—the zig-zag lines—but not elsewhere. In other words, you can use a camera to enforce penalties with regard to the 10 yards round a school clearway but not a little further down the street. From my experience as a councillor with a number of primary schools located in streets such as I have described, that is simply ludicrous. Cars park all the way down the road. The residents want to have enforcement to stop cars doing that or to deal with car drivers who park inconsiderately and foolishly all the way down the road. However, if these regulations were enforced, and if I am correct—as I say, I hope that I am not—we are going to be in a position of having to tell those residents who want the local authority to enforce them, “I am sorry, we can enforce them for only 10 yards. We can’t enforce them down the rest of the road”. I am no longer a councillor, thank goodness, but I invite the Minister to explain to some of my former constituents why the regulations can be enforced for 10 yards but not for the rest of the road. That is just one point that occurs to me, which I hope the Minister will tell me I am wrong about. However, I fear that I may not be.
This illustrates the danger in the Government interfering with all this. The local authorities best know how to deal with this issue and most of them do so well. Of course, mistakes are made and silly things happen sometimes; they should not, but they do. However, we now have a very good appeals system that works fairly. Nobody has suggested that there is anything significantly wrong with that. Why do we not leave the situation as it is? For all these reasons and many more, my noble friend Lord Bradshaw and I wish to give the Government the opportunity to think again and not to enter what I assure them is a minefield and an area where they simply will not win, and to leave it to the local authorities which best know their own areas to carry on dealing with the things that they have had to deal with for many years.
Baroness Hanham (Con)
My Lords, I have been mentioned a couple of times by my noble friend beside me, and I am very grateful to him for explaining the policies of the Royal Borough of Kensington and Chelsea on the use of parking moneys, and why our roads are so beautifully kept. I remind the Committee at this stage of my co-presidency of London Councils and my former membership of the Royal Borough of Kensington and Chelsea. I apologise to the noble Lord, Lord McKenzie, for the fact that I was rushing down from a Select Committee and was about three minutes late for the start of the debate.
I support what has been said about this being a local authority matter. If anybody who has been involved in local government knows anything about it, there are two things that really irritate residents. The first is planning and the second is parking. How parking is controlled and enforced is totally a matter for local authorities. Noble Lords know as well as I do that Westminster City Council has completely different parking regulations to those in Kensington and Chelsea. They were very difficult to cope with to start with, but everybody has not got used to the fact that you cannot just totally rely on the same things. They have different rules of enforcement, too. Kensington and Chelsea does not employ cameras for parking enforcement, while other councils do. Whose choice is it that that should happen? Why is not that the choice of the borough—how it enforces it? If you do not have cameras, you have to put people on the streets. I came across two today, and one was on a scooter with his little yellow hat on, while one was on his bike with his little yellow hat on. They were running up and down the road. You have to have a bigger army of those to keep up enforcement if you cannot use cameras.
Where is the mischief that has brought about this proposal? Who has been complaining about cameras for parking enforcement? Cameras are used for all sorts of things in our streets, some of them extremely helpful. Some cameras catch criminals and help to protect people who are walking up and down the street. Some provide for the traffic flows. It is very annoying being caught by a camera. I can declare that I was caught by one while sitting at a box junction a little while ago. I did not know that there was a camera there, and I was a bit stuck. I got a traffic fine, and rightly so, because what I was doing was against the law. I was not doing what the law said and hoping that I would get away with it, but I did not. That is because I was breaking the law, and when people go against the law on parking arrangements brought in by local councils, which decide on the parking restrictions, it is up to the local authority to enforce it themselves. That is particularly essential for major cities, where there are really tight areas for parking, as well as in small county towns, which are different to anywhere else.
My former position as a Minister in the DCLG leaves me in no other position than to say that I do not know at all why the department has set off down this road, and it would be a frightfully good thing if it got away from it.
Baroness Eaton (Con)
Unlike the noble Lord, Lord Tope, I am not an ex-councillor. I am not sure that it is a misfortune or fortune still to be an elected member of Bradford Metropolitan District Council. My ward has in it two large upper schools and a very large primary school. Because of the topography and the nature of the communities of Bradford, which noble Lords will know is a very large area, many children, however large or small, are brought by parents in cars. The ensuing chaos is something that you cannot believe. Not only is it chaotic and dangerous; it is also detrimental to economic growth in the area. When cars cause obstacles to vehicles passing through a community, it delays important business traffic and people choose not to open businesses in places where they cannot get quickly to their destination. If councils do not have the opportunity to use everything possible to control unsightly, difficult and inconsiderate parking, we will have even more chaos.
I could not agree more with all my colleagues on the Benches in front of me: it really should be a matter for local authorities to determine how this is dealt with, certainly not somebody who thinks that a zig-zag line outside a school is the only place where there is a problem. We even have situations, because of inconsiderate parking, in which emergency vehicles cannot get through at school times. This is therefore a step too far, which the Government should not be considering.
Baroness Hanham
My Lords, I tried to get my name attached to the clause stand part debate but somehow I failed; I think I have to start earlier than the day before. I support this very strongly. At the moment, the area that runs the decriminalised system for waste collection is of course Greater London, and it does so under the London Local Authorities Act 2007. It has been doing that spectacularly successfully ever since. It has its own rules, guidelines, enforcement and appeals process.
What happens now? Schedule 11 makes it clear that that Act is going to have to be changed to be in accordance with this new and, as my noble friend Lord Tope said, extremely complicated system of enforcement. Why does anyone need to tamper with London when it is already running a system and could continue to run it as it is without any further interventions? Why would we want to ensure that the fine that the local authorities in London are able to charge at the moment should be reduced under the Secretary of State’s say-so? Why should we interfere in any way at all with the appeals system, which is currently run by local councils and is a fairly quick and straightforward process?
To say that I am baffled by these proposals would be to put it mildly. There is probably no difficulty with a decriminalised system, but the intervention and regulations—in a Deregulation Bill—that are going to support this seem to be way over the top for anything that is rational. The Minister talks about people putting out rubbish in the wrong place, in the wrong container, at the wrong time and on the wrong day, and talks about how local authorities can run that system, but it does not require five steps of enforcement. At the moment, London puts out an enforcement notice for a penalty, and that is it. Here we have written warnings, a waiting period, appeals, notices of intent—all this over possibly one refuse bag put out in the wrong place. That really seems to be excessive in the extreme.
Schedule 11 should be abandoned. London should carry on what it is doing. It has set the tone and indeed set the stage; it has done the work, and it knows what it is doing. If the Secretary of State or the Government insist on the rest of the country having this decriminalised way of doing things then London will have to do that, but I do not think that it should do it under the measures that are in the Bill. I ask the Minister why Schedule 11 should be there at all, why London, which is already running its own system, should be involved, and why there is any question at all that it should have to lower the fine that it is currently able to charge, which is having a reasonable effect. The penalty notices are for £60. These days, people do not think that a £60 penalty is very much; they are paying £80 for parking. I strongly support my noble friend on this issue, and I want to ensure that the consideration of London is that London should be left running its own scheme.
Lord Cameron of Dillington (CB)
My Lords, if the Committee will indulge me for a moment, I have kind of wandered in off the street on this particular item of business. If the Government wish to simplify and deregulate in this area, the most important thing is that they have to get local authorities to unify their procedures on waste and renewable waste. If you travel around the country, you see that every single local authority has a different policy on renewable waste. That is so bad for the renewable agenda and for recirculation. Some local authorities tell you to put all your renewables in together, such as glass, plastic and tin, and to put your waste into another bin. Others want you to divide your glass, plastic and tin separately, while others will not take glass at all and you have to go to the bottle bank, which is usually full up. If the Government wish to simplify matters, they should have some form of encouragement for local authorities to unify their policies over the whole question of waste, which at the moment is a disgrace.
Lord Wallace of Saltaire (LD)
My Lords, living in one local authority area during the week and in another at the weekend, I am very conscious that standards differ from one local authority to another.
It is a brave Minister, I know, who stands up to the Local Government Association embattled. The Government’s intention in these measures is to reduce the burden of regulation on householders. Representations were made on behalf of householders and, as the noble Lord, Lord Tope, has mentioned, there was also a press campaign which suggested that the threat of large fines and criminal convictions is disproportionate to what is often in the first instance a case of people making mistakes about which bin to put out when and what to put in each. Again, as the noble Lord has just said, that varies from one local authority to another. My family is lucky in that the two local authorities in whose areas we live are relatively permissive about where you put each particular bit of waste.
The noble Lord’s amendment would reduce the fines available to level 1 on the standard scale instead moving to a civil basis. The Government think that it is disproportionate for an individual to be treated like a criminal when they may make a mistake putting their bins out for collection, and it is not right that they risk a higher fine for making this type of mistake than they would, for example, for deliberate shoplifting.
I am conscious that some of my noble friends are concerned that this clause may increase burdens on local authorities. I reassure them that our proposals do not add significant burdens compared to how the current arrangements operate in practice. As always in questions of regulation and deregulation, there is the question of the balance of burdens. The Government’s view is that we should be concerned to reduce the balance of burdens on householders.
I am also aware that some of my noble friends are worried that this clause might have a negative impact on recycling rates. We are committed to meeting our recycling targets and, as the noble Lord, Lord Tope, has remarked, we have made considerable progress in recent years in that direction. The way to do this is to support people as they do the right thing rather than threaten them with criminal sanctions and fines of up to £1,000.
Currently, under Section 46 of the Environmental Protection Act 1990, householders are subject to criminal sanctions and a fine of up to £1,000 if they do not comply with local authority requirements for presenting their waste for collection. In contrast, a shoplifter may be issued with an £90 penalty notice for disorder for their first offence. The Government’s argument is that it is disproportionate for an individual to be treated like a criminal when they make a mistake putting their bins out for collection, and it is not right that they risk a higher fine for making this type of mistake than for shoplifting.
Nevertheless, we recognise that local authorities need some powers to deal with people who spoil the local area by the way they put out their waste, which is why the clause provides for a civil sanctions regime. Under this system, fixed penalties between £60 and £80 will be available if a person has failed to present their household waste as required, and this failure causes a nuisance or is detrimental to the locality. This is what we refer to in shorthand terms as the “harm to local amenity” test, covering such things as putting waste out in a way that causes obstruction to neighbours, unreasonably impedes access to pavements, attracts foxes, rats or other vermin, or is an eyesore.
We expect local authorities to use effective communications to ensure that householders know what they can recycle; for example, by making it easier to know which plastics go in which bin. On the balance of the evidence presented in response to the consultation exercise, which the noble Lord, Lord Tope, raised, I will have to write to him.
I make it clear that we intend to retain the current criminal system applying to commercial waste. The sanctions available to combat more serious offences like fly-tipping are also unaffected by the provisions in the Bill.
The noble Baroness, Lady Hanham, raised Schedule 11, which amends the London Local Authorities Act 2007 and gives London authorities similar powers to issue penalty charges to householders. We are amending the London Local Authorities Act so that civil sanctions and financial penalties will be imposed only if a householder fails the “harm to local amenity” test, and the level of penalties will be the same as under the Environmental Protection Act. In effect, the same provisions will apply throughout England. There will therefore be a degree of standardisation. I hope that this may persuade the noble Lord to withdraw his amendment.
Baroness Hanham
Can the Minister explain something to me? Subsection (1) of new Section 46B of the Environmental Protection Act says:
“The amount of the monetary penalty that a person may be required to pay to a waste collection authority … is … the amount specified by the waste collection authority”.
That would seem to indicate that the waste collection authority had the right to set a charge. It then goes on to say in subsection (2) that:
“The Secretary of State may by regulations make provision in connection with the powers”—
one of those powers being the setting of the penalty. I seek clarity as to whether there will be a power for a local authority to set its penalty charge. New Section 20B of the London Local Authorities Act, in Schedule 11 to the Bill, is quite specific that:
“It is to be the duty of the borough councils to set the levels of penalty charges payable to them”.
That sounds great. If they must do it, they have got to do it. However, under the subsequent subsection (4) of new Section 20B:
“The Secretary of State may by regulations make provision”,
for that.
Which is it? Will it be left to local authorities to set their own penalties? I understand that there will be a regime. Or will it be regulations set by the Secretary of State? It does matter.
Lord Wallace of Saltaire
I thank the noble Baroness. At this point I may be better off writing to her to explain in detail. My note says that the Secretary of State will make the regulations, but I recognise that there is a degree of ambiguity there. We will make sure that we clarify that.
Deregulation Bill
Baroness Hanham Excerpts(9 years, 7 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Hanham (Con)
My Lords, I apologise to the Committee that I have not had the opportunity so far to take part on the Bill. I do so now as a very new co-president of London Councils and as a freeman of the Royal Borough of Kensington and Chelsea, of which I am a former leader.
I want to intervene on this issue because I am long enough in the tooth, as my noble friend is, to remember the 1973 Act being introduced. It was introduced then because there was an experience of a transient population developing within London along with scarce housing. They were coming in for a short time, going away again and not contributing at all to the settled population. I wish that that situation had changed but in fact it has not. Central London is still the magnet for people coming here for a short time. Why do we worry about that? I think that it is because it destabilises the population and the use of accommodation. It makes it almost impossible for a local authority to know what its property, or the property within the borough, is being used for.
The noble Lord, Lord Mawson, spoke about having proper regulation, but there is proper regulation. What is happening in the Bill takes that proper regulation away. It seems absolutely essential that the local authority should have the oversight of what is going on. An application has to be made to it for practically everything else to do with property, so it should be able to see what is going on and to approve, or not, the short-term use. Perhaps I may go back to the suggestion that this is stopping people letting out their homes for a short time. Nobody is looking at that. What they are looking at is somebody who owns a property and then deliberately turns it into not a buy-for-let but a buy-for-rent for six weeks or so.
In my own area, you often see people coming into quite expensive accommodation. They put their suitcases behind them and go in, and you have no idea who they are. They vanish again a week later and somebody else turns up. That is not at all helpful for stability and it certainly does not help us with the transient nature of the situation. Central London boroughs may suffer from that more than others: Westminster, Kensington and Chelsea, and probably Camden.
Secondly, there has been an enormous amount of new development in London which is not necessarily of any use to local residents. It will be made of less use to local residents if some of those really big glass buildings, even at the rents that are charged, are let out on a short-term basis. The coming and going there will be absolutely uncontrollable.
I do not know what mischief has brought this clause about. I very much hope that my noble friend Lord Ahmad will be able to tell us, because the legislation seems to have been running along quite happily, doing what it is meant to do, for more than 30 years. Why suddenly, at this moment when London is in turmoil, a perpetual fever, of people, including tourists, coming and going—apart from the fact that this is an opportune Bill to put it in—is it important?
My borough, the Royal Borough of Kensington and Chelsea, is very alarmed about this. It has made its position clear. One of the reasons why I support the opposition to the clause, as well as the amendments, is that it will be badly affected. Other boroughs may not be as badly affected, but if this is a matter where each borough will make up its mind about deregulation, that is its choice, its power and its local decision if its local residents support it. I do not think that there is a role here for the Secretary of State in making a decision that affects a local authority area that much.
It is London that is affected by the Bill. London was deliberately affected by the London Government Act because of the situation then. I doubt that any other city has the pressure that London has now—although that may develop. I very much hope that the clause will be reconsidered, because I think it is unnecessary. London has spoken before about this. People who want to let their houses when they go away must be exempted. As it stands, I am very much against the clause.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)
My Lords, first, I thank all noble Lords for their contributions to the debate. Many noble Lords have spoken from their personal experience in London and as representatives of various London councils.
Perhaps at the outset I may say that I am not an adopted Londoner; I am a born and bred Londoner and someone who has represented a London council and sat on the London Councils body itself, so I am aware of some of the key concerns that have been raised about the provisions. However, I cannot claim to have made a coherent contribution to the 1973 Act. I hope that my contributions today will be somewhat more coherent, but that is for others to judge.
The amendments, which would allow local authorities to make their own exemptions for particular properties and areas, would, in the Government’s view, risk removing the certainty and consistency that are behind our proposals for all London residents. Indeed, they would create a patchwork of different regulatory approaches across the capital, potentially resulting in unjustifiable differences between local authority areas. Residents may find that their near neighbours have either greater or lesser freedoms to let their property short term, which in many cases would be difficult for them to understand.
Let me be absolutely clear: we intend to retain the important safeguards of Section 25, which protect London’s housing supply for Londoners who live and work permanently in the capital city. However, through Clause 34, we want to provide certainty for all residents in all London local authority areas that they are able to let their homes on a short-term, temporary basis, such as when they are on holiday, without having to deal with the unnecessary bureaucracy of applying for planning permission.
These amendments also seek to exempt from deregulation properties that are not the main residence of the landlord. I reiterate that, through Clause 34, the Government only want to allow residents to be able to temporarily let their homes. This measure will do nothing to make it easier for those seeking to short-term let property on a permanent or commercial basis. Rather than specifying how the deregulation will work on the face of the Bill, the clause seeks the power to make regulations which will provide the legal framework. These will follow the affirmative procedure and will be subject to debate and the approval of Parliament on important issues, including in precisely what circumstances short-term letting will not require planning permission.
I turn to the detail of Clause 34. The clause updates an outdated 40 year-old law restricting Londoners from being able to temporarily let out their homes or spare rooms. Section 25 of the Greater London Council (General Powers) Act 1973 prohibits the use of a,
“building, or any part of a building”,
for “temporary sleeping accommodation” for fewer than 90 consecutive nights without planning permission for temporary change of use. In London, residents failing to secure planning permission face a fine of up to £20,000 for each offence. The regulations that the Government are bringing forward will clarify for London residents what is permissible.
Baroness Hanham
I clearly heard the Minister say that this provision is intended specifically to allow people to let out their homes. Under those circumstances, I wonder whether the current wording of the legislation, which refers to,
“accommodation of any residential premises”,
describes that particular position.
Lord Ahmad of Wimbledon
As a previous Whip to the noble Baroness, I know that when she asks questions one needs to be quite detailed in one’s response. Let me again assure the noble Baroness that I will write to her specifically on that element. I am sure officials have also made note of her quite specific question. My noble friend Lady Hanham also raised the issue of curtailing the role, or asking why the Secretary of State would retain this role. As I have already said, we will work with local authorities in London on how regulations covering the role of the Secretary of State would work.
I am just looking through the number of specific fines from local authorities. Again, I have touched on some of them. I do not have the detailed breakdown of how many people have been pursued by which authority, but I have requested that from officials and will write to all noble Lords in that respect. I trust that I have covered most if not all of the questions. For anything pending I shall, of course, review the contributions made by all noble Lords, which I welcome, not least because of the experience across the board. I reiterate that the Government recognise that this is an area where there will be considerable interest and we wish to ensure that we get the change right. Therefore, I welcome the contributions that have been made in Committee today.
I reassure noble Lords that the Government will be working closely with all interested parties in London, including the local authorities and the hospitality industry. The Government want to ensure that the measures brought forward meet householders’ aspirations of temporarily letting out their homes or spare rooms, while retaining the key purpose of Section 25 which is keeping London homes for those who live permanently in London. We believe that these reforms benefit those Londoners who wish to supplement their income by making their homes or spare rooms available. It offers an alternative to hotels and guesthouses—as the noble Lord, Lord Mawson, mentioned—and further supports the wider tourist industry. It also helps those temporarily working in the capital or searching for a place to live by expanding the pool of competitively priced accommodation on offer. I beg to move that Clause 34 stands part of the Bill and I urge the noble Lord, Lord McKenzie, to withdraw his amendment.
National Voter Registration Day
Baroness Hanham Excerpts(9 years, 11 months ago)
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Lord Wallace of Saltaire
My Lords, with the approach of the general election next year, it is a bit late for pilot schemes. The Government have given £4 million to local authorities to promote registration among vulnerable groups. I am aware of three local authorities, Dumfries and Galloway, Ceredigion, and Redcar and Cleveland, that have specifically allocated some of this to looking at how to register young voters. In Ceredigion’s case, it has an explicit partnership with Bite the Ballot while doing this. We encourage all those activities. I remind the noble Lord that electoral registration is managed at the local level, which as a former local councillor he will well know.
Baroness Hanham (Con)
What progress has been made on individual electoral registration? It is very important for young people to know about the democratic process, but as part of that they must also know that they have to register in order to vote.
Lord Wallace of Saltaire
My Lords, online electoral registration was introduced four weeks ago. I have the figures only for the first week and we were extremely encouraged by how many people had registered. We hope that we will have the figures for the first month by next week. That is part of why we think that we have moved on from the Northern Ireland experience, in which electoral registration officers took paper forms into schools. We think that young people are much more likely to register online. The experience of 2010 suggests that the registration rate rises rapidly in the few months before a general election. It rose by 700,000 in early 2010. We expect that to happen again.
Electoral Fraud
Baroness Hanham Excerpts(10 years, 3 months ago)
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Baroness Hanham
To ask Her Majesty’s Government what assessment they have made of the recommendations in the final report of the Electoral Commission Electoral fraud in the UK.
Lord Wallace of Saltaire (LD)
My Lords, we are carefully considering the Electoral Commission’s recent report and its three main recommendations and will respond in the coming months. We welcome the commission’s finding that electoral fraud is not widespread and agree that we should continue to consider ways to safeguard electoral integrity. That is why the Government are introducing individual electoral registration from June this year, which will help make registration more secure.
Baroness Hanham (Con)
My Lords, I thank the Minister for that reply. I am sure that many Members of this House will welcome the proposals in the package put forward by the Electoral Commission to be introduced by 2014. However, it proposes to leave the introduction of one area until 2020: individual identification at polling stations. In responding to the report, will the Government consider encouraging the commission to bring that forward, as it is a very important aspect of preventing fraud?
Lord Wallace of Saltaire
My Lords, the Government are considering that although I have to say that Ministers are not yet convinced of its desirability. We all know from the American experience that demanding qualifications and identification at polling stations tends to discourage people from going to vote and we do not wish to discourage people from going to vote. There is less evidence of personation at polling stations than there is of multiple registration—ghost voters being put on the register—or of postal vote fraud, so we are not yet persuaded that the response is proportionate to the problem we face.
Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill
Baroness Hanham Excerpts(10 years, 7 months ago)
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Baroness Hanham (Con)
My Lords, I am very pleased to take part in this Bill, even from one row back, and to have had the opportunity of hearing the excellent maiden speech from my noble friend Lord Horam. As has been said, the experience he brings from the other House will be invaluable, and I know and hope that we will hear from him frequently.
As the Minister said when he introduced the Bill, it has been a prime concern of the Government to ensure that as much of their activities as possible should be open and transparent. This Bill, with its emphasis on openness, is intended to complement the current moves towards transparency where Ministers and Permanent Secretaries must publish on the web details of those they meet on a regular basis. However, they can do that only if they know to whom they are talking and on whose behalf those people are speaking. Therefore, it seems eminently sensible that where this is not immediately obvious there should be ways of ensuring that those companies are known about.
Mention has been made of in-house lobbying and there was a general emphasis on companies like British Gas. This is not relevant because a company like British Gas will come to see a Minister on the basis of being British Gas, unless it is going to go for a big public relations company, in which case it will then have to be registered. So that is not a problem and there has been no intention in this Bill to deal with what someone called management consultants.
So the Government work on the basis that the electorate have the right to know what has been done in its name by whom and for whom. The aim of the measures in this Bill is to do just that. The requirement that those large organisations whose business it is to lobby senior members of the Government and Civil Service on behalf of their clients should have to be registered and declare the names of those on whose behalf they have made, or are making, representations is long overdue. Whether, as has been suggested, this should go further down the pay scale will be discussed during the passage of the Bill.
That those working on their own or others’ behalf to influence candidates or parties at elections should be regulated, and thus transparent, could be seen as providing more openness to such influence, as also ensuring that trade union members’ records are up to date. So the three elements of the Bill are all directed towards the same outcome—that any influence, or attempted influence on the democratic process should be out in the open.
The other side of the coin is that legislation should also be transparent to those who are affected by it, or believe themselves to be so, so that people can understand not only what is intended but that the legislation is being made to work. Often this has to be left to secondary legislation or guidance. However, from all the briefing we have received and from today’s contributions, it is clear that despite amendments made in the other place there is still a perceived if not an actual lack of clarity about whom the provisions in Part 2 will affect and how. There is concern on the part of charities in particular and the voluntary sector about the interpretation and implementation of the regulation of third parties’ activities during the purdah year prior to elections. The Government specifically tried to satisfy concerns in this area by the amendments and reassurances they gave in the other place but it is obvious from the contributions that we have heard today that it is still an issue.
At least because of the fixed-term Parliament it is obvious where the year starts, which is not the case under the current provisions in the Political Parties, Elections and Referendums Act. It may be that one of the things we should address is the length of this purdah. I remember well the passing of the Political Parties, Elections and Referendums Act. There was a great deal of consternation about the fact that there was a year, particularly relating to constituency associations, in which everything had to be declared and there could be virtually no political activity within that year. I think that, as the noble Lord has said, we might need to look at whether this year the whole year is too long or whether that should be curtailed. Nobody has briefed me on this; I suggest it entirely by myself as it appeared just as a thought as we were going along.
I have been briefed, as have other noble Lords, by various bodies and organisations, including the Electoral Commission and also by the National Council for Voluntary Organisations. As a percentage of that is now made up by Volunteering England, I should declare my former presidency of that organisation because I have read its brief very carefully and the noble Baroness, Lady Pitkeathley, and I have shared in the work of that excellent organisation.
NCVO is particularly alarmed at the changes being made to the Political Parties Elections and Referendums Act which it feels make it more or less impossible for charities and other interest groups to campaign, even on non-political issues—I know this is not the point of the Bill and I am sure that the Minister will make that clear—during the election purdah for fear of breaching the proposed provisions in the Bill on their interrelation with political parties or candidates and the reduction in allowable expenditure, the wider regulation of what has to be included in that expenditure and the interpretation of what could be considered electioneering or trying to influence a particular outcome by projecting their policies.
I agree with my noble friend Lord Tyler, who is not in his place, that it is essential that we tease out the relationship between this Bill and the charities law to ensure that they are compliant. Charities and similar organisations have already been excluded from the provisions in Part 1 of having to register as lobbyists, so they are not affected by that aspect of the Bill. I have also noted the long briefing from the Electoral Commission, which in effect supports many of the concerns which have been made by other bodies as well as how it is to operate in its new extended remit. It has indicated in the Appendix A to its brief how it would interpret the likely regulations and provisions but it does consider that some if not all of the concerns being raised are justified.
In principle, I support the aims of the Bill. Greater transparency is something for which we should all aspire but there is more work to be done to ensure that there are as few ambiguities, unintended consequences and unclear provisions as possible because the more of those that remain the more this Bill can be misrepresented. So I hope that we will be able to clear those up as we go along. I am sure that there will be amendments laid to try to deal with these, most of which are essentially practical, as noble Lords have said, but which can be open to misinterpretation. I believe that the Electoral Commission is still having discussions with the Government and I look forward to the report being compiled by the new commission of the noble and right reverend Lord, Lord Harries.
I am sure that many of these issues can be ironed out while the Bill is in this House. I know, too, that even in the short time left between now and further stages, representatives of the organisations which will become non-political third parties would want to put their anxieties directly to Ministers. I know from having dealt with previous legislation that it is amazing how quickly this House can move. So I do not think that it will be at all necessary for the Bill to be delayed and we can work within this timetable.
In conclusion, at least some of the concerns that have been raised seem to be justified and I hope that through further discussions, reassurance from the Ministers or government amendments we will manage to allay some of them. Knowing the Ministers leading the Bill, as I do, I am certain that they will be doing just that. At the end, while all organisations may not be happy, they may at least feel that their issues are understood, that many have been dealt with and that they have been listened to.
Local Audit and Accountability Bill [HL]
Baroness Hanham Excerpts(10 years, 10 months ago)
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Baroness Hanham
“Omit sections 69 and 70 (transitional provision: local government bodies in Wales and Welsh NHS bodies).”
Baroness Hanham
My Lords, Amendment 3 is a further minor consequential amendment to the Public Audit (Wales) Act 2004 following the closure of the Audit Commission.
The Public Audit (Wales) Act 2004 transferred a number of powers from the National Audit Office and the Audit Commission to the Auditor-General for Wales. This Bill already repeals some sections within the Public Audit (Wales) Act 2004 which refer to the Audit Commission. Sections 69 and 70 provide transitional arrangements to enable auditors of Welsh local government and NHS bodies who were appointed by the Audit Commission to continue for the whole of their term, despite the Public Audit (Wales) Act 2004 transferring responsibility for auditor appointment from the Audit Commission to the Auditor-General for Wales.
Section 69 also makes transitional provision to enable the Audit Commission to complete any studies which include a local government body in Wales that were under way at the time of the transfer. The Welsh Government have now confirmed that the transitional period has been completed and that these provisions can be repealed. I beg to move.
Lord Beecham
My Lords, I am sure they will be putting up the flags in the valleys and hills of Wales tonight in celebration of this government amendment, which I am happy to support.
Baroness Hanham
My Lords, I beg to move that the Bill do now pass. It is my pleasure to thank the Members of the Committee who have helped us through the Bill over the past few months. I am extremely grateful to everybody who has taken part and, as always with Bills leaving this House, I think it has been strengthened as a result. It might be worth reflecting that in response to issues raised during the debate, the Government have made 15 individual amendments, not including minor, technical amendments, and we have also made clear our intention to amend the Bill in the other place to enable the non-mandatory central procurement of auditors on behalf of relevant authorities. We are also considering other points in relation to the data-matching powers, so there have been significant interventions and significant help and I thank all noble Lords, on the opposite side and in the coalition, for all they have done to see us through the past few months.
Local Audit and Accountability Bill [HL]
Baroness Hanham Excerpts(10 years, 10 months ago)
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Lord Beecham
My Lords, the sun has already set; none of us wants to be here when it rises in the morning. I concur with the amendment moved by the noble Lord and I trust that the Minister will accept it.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I can be very brief. The Government cannot accept the amendment. The Government are absolutely committed to ensuring that council tax payers should have the final say on excessive increases and that the case for the inclusion of levies in the referendum legislation is compelling. The Government intend that, once made, the change to the legislation should remain on the statute book and that council tax payers should be protected from excessive increases permanently—not just for a few years. Local authorities and levying bodies would not appreciate the prospect of further change to legislation in three years’ time.
It may be helpful to the noble Lord if I also mention a major practical issue raised by the amendment. In 2016, as in all years, local authorities must set their council tax by 11 March. Any authority triggering a referendum must begin preparations almost immediately, so the referendum will be scheduled for the first Thursday in May 2016. The sunset clause would take effect on 30 April 2016, right in the middle of local authorities’ preparations to hold a referendum. Furthermore, if the amendment is accepted, by that time, the provision would have disappeared from the statute book and rendered regulations relating to the conduct of the referendum and its effect in direct conflict with the legislation on which they are based. That is because they would be based on the definition of the relevant basic amount of council tax, including rather than excluding levies. That would be a recipe for confusion and would not be fair on local authorities or council tax payers. So, for reasons of principle and practicality, the Government are unable to support the amendment, and I hope that the noble Lord is willing to withdraw it.
Lord Tope
My Lords, I am very grateful to the Minister. I confess to a little disappointment about that reply, although I wonder whether I should see some encouragement. If the only defect in the amendment is a technical one on timing, perhaps the principle could be accepted. I look forward to that being pursued in another place at another time. In the mean time, I beg leave to withdraw the amendment.
Lord Beecham
My Lords, far be it from me to seek to mediate between the coalition parties on this matter, although of course I cannot resist the temptation to do so.
The noble Lord’s proposition is in many ways sensible. Even under the present law, councils certainly have the right to advertise in ways additional to publication in newspapers if they choose. Eventually, no doubt, that will become pretty much par for the course. The Government could facilitate the process by at least reviewing now rather than at some definite point in the future the list of items that have to be publicised, because frankly it is ridiculous. Planning matters are clearly important. However, when it comes to dog control orders or their revocation, the licensing of buskers, charges for street trading licences, abandoned shopping trolleys and charges for public baths and wash-houses, one wonders whether a formal statutory notice of any kind is desired. It is certainly not required, and certainly not in paid publications.
If the Minister were to indicate that the Government will address this matter—it is not that complicated; after all, there are only eight or nine pages of these things to work through—a sensible accommodation could be achieved that still leaves a statutory requirement for publication in newspapers. That should remain as part of a new framework, given that not everyone can look at the website, and there will at least be the opportunity to read a printed version. I hope that that would alleviate some of the concerns of the Local Government Association and, indeed, of the noble Lords who have already spoken. It would not be acceptable for the Government simply to reject the Motion and do nothing about this ridiculous list of notices that have to be published in a paid-for publication at the present time. A gesture from the Government in that respect, other than the normal gesture that one tends to get metaphorically across the Dispatch Box, would be helpful.
Baroness Hanham
My Lords, I thank noble Lords for those rather contrary views. Only three people have spoken, and their views were all different, so that is a pretty good start and leaves me with a fine path through.
The purpose of a statutory notice, as everybody clearly knows, is to inform the public about decisions that affect their lives, their property and their amenity. That is especially the case for issues where the public have a limited period in which to respond.
The Committee was in broad agreement that notices should be easily available for local people and that they are vital for local transparency and accountability. The noble Lord has highlighted the cost of statutory notices and suggested that local newspapers are one of the least effective ways to convey information to people. We do not agree. Research by GfK for the Newspaper Society found that the reach of local newspapers was much greater than council websites: 67% of the respondents to that survey had read or looked at their local newspaper for at least a couple of minutes within the past seven days, compared with 9% who had viewed their council website. Some 34% of adults questioned had not accessed the internet at all in the last 12 months.
The most recent internet access quarterly update from the Office for National Statistics, published in May, shows that 7.1 million adults in the United Kingdom—14% of the population—have never used the internet. Two-thirds of over-75s, a third of 65 to 74 year-olds and 32% of disabled people, as defined by the Disability Discrimination Act, have never used the internet. There are quite a lot of people, therefore, who do not, would not and could not use the internet for these notices.
The GfK research for the Newspaper Society showed that local papers are spontaneously cited as the way in which most people—that is, 39%—expect to be informed about traffic changes, for example. My noble friend Lord Shipley will be interested to know that the next placed source of information is street signs, at 26%—they come immediately to notice. When prompted, 79% of all adults responding said that they expect to be made aware of traffic changes in their printed local paper, second only to street signs and ahead of any other communication channels.
Undoubtedly, the requirement to publish some notices in newspapers comes from an age when there was no access to other means of communication. Under present conditions it could perhaps be removed, but the requirement to ensure that these notices are available easily remains as valid today as it always has.
As I said in Committee, the last Administration consulted in 2009 on removing the statutory requirements to publish planning notices in newspapers and found that that was not well received, as noble Lords opposite will remember. Some 40% of respondents to that survey were against the proposals, with a further 20% giving only qualified support. I acknowledge, of course, that that was four years ago. Things have moved on a bit. However, the party opposite concluded that some members of the public and community groups relied on the statutory notices in newspapers, and was not convinced that good alternative arrangements could readily be rolled out. A recent debate in the other place on alcohol licensing notices showed the strength of cross-party feeling against repealing the requirement to publish the notices in newspapers.
In Committee, the noble Lord, Lord Beecham, said that statutory advertising should not go altogether—I think he repeated that today—and that it was more a question of which statutory notices should be reformed and which should continue to be advertised in newspapers. That can already be done, because departments can put forward particular statutory notices for consideration under the Red Tape Challenge, and that provides opportunities to review a statutory notice. The amendment gives little consideration to which statutory notices are important to local people or where there is a case for retaining publication in a newspaper, and that of course would have to be looked into.
In the internet age, it is clear that commercial newspapers should expect less state advertising over time, as my honourable friend Brandon Lewis has made clear, as more information is syndicated for free online. We accept that newspapers need to develop new business models rather than relying on revenue from statutory notices. However, the newspaper industry is very clear that competition with local authority newspapers, for example, can be damaging.
It would be unfair to remove statutory notices in the blanket way that is being proposed while independent newspapers still face unfair competition from local authority newspapers. We must stop this first before looking at other issues. We acknowledge that the DCLG Select Committee’s recommendations a couple of years ago for a review of publication requirements of statutory notices cannot be ignored in the long term.
I hope that with those explanations the noble Lord will be happy to withdraw his amendment.
Lord Tope
Before the Minister sits down, I ask her to comment, as she seems to have forgotten to do so, on the reported comments of the Secretary of State that this requirement will be phased out within two years. He was quoted as saying this by I think three or four Conservative councillors separately, while Brandon Lewis, the Minister, has similarly indicated that the Government intend to change the statutory requirement as a quid pro quo for the legislation that we are in the process of passing. Can the Minister not end this uncertainty now and give us some certainty on what the Government’s intentions are and when they are going to be implemented?
Baroness Eaton
My Lords, I apologise for not being here at the beginning of the debate. An issue that concerns me about statutory notices being advertised in newspapers is that in some of our larger cities there are large communities that have no language to read a local newspaper. It can be very helpful when the council passes out information in appropriate languages, and I do not think that any of the debate we have had so far has given any indication of how this is to be communicated to very large sections of larger cities’ communities.
Baroness Hanham
My Lords, I thank my noble friend for her intervention. It is perfectly clear that in most cities, where there are large groups of ethnic minorities, they often have their own publications, and anyway I know that most councils are happy to ensure that information is available.
With regard to the review, as I have said, we accept the Communities and Local Government Select Committee’s recommendation that a review must be undertaken. I have no knowledge of the Local Government Chronicle’s information or where it got it from. I have pointed out that it is possible to have statutory notices considered under the Red Tape Challenge at the present time.
Lord McKenzie of Luton
My Lords, we are sympathetic to the position adopted by the noble Earl, Lord Lytton, As my noble friend Lord Beecham said in Committee, the noble Earl has explained the archaic regime that exists at the moment for parish polls, the small numbers involved in calling a poll, the fact that the poll is not binding and the financial cost being recoverable for the parish. I would have thought an effort to address that would be well worth while. Indeed, the noble Earl’s amendment suggests that there should be an order-making power inserted into the Bill. Obviously, once the amendment itself has been accepted, it is presumably within the scope of the Bill; otherwise it would not be on the Marshalled List.
I do not see why it cannot be done. Maybe the wording needs to be changed. If the Government are reluctant to pick this issue up because they think that there are broader issues involved and it needs to be dealt with in some different way, perhaps we could hear that. However, if there is sympathy for the noble Earl’s proposition, and we are just looking for a parliamentary process to facilitate that, why not an order-making power?
Baroness Hanham
My Lords, we, too, are sympathetic to this amendment, and I am grateful to the noble Earl for having brought it to the attention of the House. We all recognise that parish polls are a way for local people to achieve something they want that is relevant and appropriate to the area over which they have authority. The noble Earl made it clear in Committee that sometimes that area extends to the European Union, which seems rather beyond the competence. We accept that there are concerns about the threshold for polls being called. I am very grateful to the noble Earl for coming to spend a bit of time with us, and we have had an opportunity to talk about it.
The way in which the noble Earl has constructed this amendment just about puts it within the scope of this Bill, but it is not wide enough for all that needs to be done. We believe that the scope can be made wider in the other place. We need to look at that carefully and will come back to it. I hope very much that we will be able to say that we will take that up and see it dealt with in the other place. If we cannot, then we are in the sort of territory that the noble Earl has talked about—a Private Member’s Bill or a hand-out Bill. I assure him that the Government are supportive of what he has said, and I give an undertaking to the House to take this away and look at how we can get it implemented in the best and quickest way. I hope that the noble Earl will be willing to withdraw his amendment.
The Earl of Lytton
My Lords, in the light of that undertaking by the noble Baroness, it would be entirely churlish of me, especially at this time of night, to seek to do anything other than to withdraw this amendment. I do so with my enormous thanks to her and her officials for the input that they have had on this. I have my fingers crossed for a later stage. In the mean time, I beg leave to withdraw this amendment.
Local Audit and Accountability Bill [HL]
Baroness Hanham Excerpts(10 years, 10 months ago)
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Lord Palmer of Childs Hill
My Lords, in Committee, my noble friend said that the Government would commit to amend the legislation to create a framework to support a voluntary national procurement exercise. When she replies, I would appreciate it if she could put some meat on that earlier commitment.
Dealing with the point made by the noble Lord, Lord McKenzie, if one was always looking in terms of cost savings, which seemed to be the main thrust of his speech, we would have almost the demise of all local authorities. It would be a case of, “Let us have it all done nationally and then we would save some money”. We as a Government are committed to localisation. The idea that local authorities should be to a degree able to choose their auditor is part of that localisation. There was a feeling of despair in the noble Lord’s comment about how local authorities would be less hard negotiators than the Audit Commission. I doubt whether that will be the case. Many local authorities would be very hard negotiators on their own behalf in fixing the audit fees, the level of audit taking place and how it will dovetail with the internal audit systems of the local authority. A local authority that has a good local internal audit system can probably negotiate much harder with the external auditors, because of its knowledge of its internal audit system, than the Audit Commission has in the past.
I believe that the amendments are unnecessary, and I would welcome and wait for my noble friend’s comments on how the Government will keep the commitment that she made at an earlier stage of the Bill.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I thank the noble Lord, Lord McKenzie, for introducing the amendments so succinctly and clearly and my noble friend Lord Palmer for reminding me—although I am not sure that I made a total commitment—that I said that we would return to the matter.
Both noble Lords have laid out the situation very clearly. The proposal in the Bill is that local authorities should be able to purchase or contract for their own auditor. They can do that individually, in conjunction with another authority or in a group. That is about as wide as the Bill takes it. The noble Lord and the Local Government Association have made strong recommendations that we should consider further the current situation, which is that the Audit Commission has purchased the contract for all local authorities. We have made it clear that there must be optional arrangements about this. Local authorities must be able to get their local auditors in the way that they wish. However we accept—and did accept—that there was potential for wider procurement, with a procurement body such as the Audit Commission, which did not require local authorities to purchase from it, but could be used by local authorities if they wished. So we accept that there is potential for such arrangements.
I have asked departmental officials to work with the Local Government Association to clarify what arrangements it envisages might need to be made and to get the detail right for any amendments that we would propose elsewhere. The Government intend to make an amendment to the Bill in the Commons, which will allow arrangements for optional centralised procurement to be made in regulations. I am happy to keep noble Lords who are interested in this informed.
Lord McKenzie of Luton
My Lords, I thank the Minister for her reply and the noble Lord, Lord Palmer, for his contribution to this short debate. I say to the noble Lord that I do not advance the proposition that all local authorities will not be hard negotiators. My point was that there could be a differentiation between the smaller authorities and the larger authorities. I am sure that the larger authorities will be well capable of looking after themselves—they prove that on a daily basis.
Localism and audit appointments within a regulatory framework are more complex issues than localism generally in the context of provision of services. Cost savings is one feature, but it seems to me, particularly in the current climate, that it is a very important feature of what we should be helping local authorities to achieve.
The Minister has in a sense reiterated what she said before. I do not honestly believe that that takes us any further forward. We have accepted that there should be a permissive, not a mandatory, regime. If that is where the Government are, I am not sure what is in this that cannot be accepted because it provides a route to set up exactly that sort of regime.
The Minister said that there was an intention to bring forward an amendment in the Commons. With respect, however, in the next breath—as I understood it—she said that that was not certain. I do not know whether the noble Baroness might be able to clarify that point for me before I conclude—it is fairly critical.
Baroness Hanham
My Lords, I want to make it clear that it is the Government’s intention to see that the proposed arrangement is fulfilled, so that there might be wider procurement than there is at present. In order to do that, I am unable to say today that it will follow exactly these provisions because discussions need to take place. The Local Government Association in its briefing, as I am sure the noble Lord will have seen, is happy that that should be the situation. It is content to have those discussions and to see that an appropriate amendment is put forward in the Commons.
As a politician, one should never hedge. What I am told is that there will be an amendment. I should never have put any doubt in the noble Lord’s mind about that. I hope that will help to clarify the situation and prevent the noble Lord feeling that he has to press this amendment, when I suggest that it is completely unnecessary.
Lord McKenzie of Luton
My Lords, again, I thank the Minister for that. Indeed, I was tempted to press this amendment but I take her assurance that an amendment will be brought forward in the Commons that will enable central procurement, but not on a mandatory basis. If that is the proposition we can take from this discussion, that is as far as I can take this amendment today and accordingly I beg leave to withdraw.
Lord Palmer of Childs Hill
My Lords, the purpose of Amendments 2 and 6 is clearly to try to improve the transitional arrangements. It seems to be felt that we need a certain overprotection for transitional arrangements, but when private corporate bodies change their auditors and way of management, some transitional arrangement always has to take place. It works in a natural way, without the Secretary of State being involved in every item.
Amendment 2 inserts three paragraphs. The first deals with,
“the management of existing audit contracts entered into with the Audit Commission”.
One of the main purposes of the Bill is to make the audits of the various local authorities much more the responsibility of the local authority. Its appointment of the auditor and dealings with the auditor, and the auditor’s dealings with the authority, will become a more localised matter. However, because there are a limited number of audit firms, there will be a consistency in the types of audit operated.
The main point that the noble Lord spoke about was,
“the maintenance and updating of Value for Money profiles”.
Value for money in the external audits of local authorities has been a very important and costly factor in terms of the time that the Audit Commission and private firms of auditors have spent on those activities and how much they have charged for them. Two or three years ago, the value-for-money audits carried out by external auditors were more limited. There was no large-scale review of the use of reserves, assets and finance. Under the current arrangements, external auditors do not have to carry out a prescribed list of value-for-money exercises.
Currently, before the Bill, that situation is very much localised. There is a virtue in that localisation. Different firms of auditors will possibly take a different view on what is needed within that particular local authority, and that view will have an effect on the fees charged to that authority and on how much work needs to be done. As the years progress, it will be interesting to see how different local authorities have their value-for-money details published. We hope that all local authorities will publish these, and there may need to be some national gathering of that information for comparison purposes. However, that does not necessarily need to be in the Bill. Although I understand where the noble Lord is coming from on this, I think that it amounts to a little too much control which is not needed.
Baroness Hanham
My Lords, I thank my noble friend Lord Palmer for bringing some rationality into this particular aspect. I support him very much in reminding the House that this is an intention to bring to a local level the management of an extremely important part of local government’s responsibilities, which is to have proper audited accounts, but to do it in a slightly different way from what has been done in the past, without the overall management of the Audit Commission but having to take into account the fact that these have to be properly done, whether they are done on the optional basis that we are talking about—having the wider procurement—or because they have taken account of having these on their own requirements.
Lord Christopher
My Lords, before the noble Baroness sits down, will she kindly explain a point on which I am very unclear? Some time before 2017, someone will have to decide whether the existing contracts are to be extended or not. My view is that they should be extended because they are cost-effective. Who will handle that, and who will deal with the situation that would arise if perhaps a small number of local authorities covered by a particular contract do not wish to renew while the remainder do?
Baroness Hanham
My Lords, the current contracts are due to last until 2017, and there will then be an interim arrangement between 2015 and 2017, as I have described. After 2017, unless for some reason it is decided universally to extend the contracts again en bloc—which is completely outside what we are talking about today, and it is probably unlikely—it is for the local authorities to make their own decisions about the contracts: where they want them to be, and with whom. Following 2017, within that interim period between 2015 and 2017, local authorities will have to decide what they will do and how to manage it.
Lord McKenzie of Luton
Again, I am grateful to the Minister for her response and to the noble Lord, Lord Palmer, for his challenges. I will start with the noble Lord. I sought to focus on the contracts that are in existence, not the subsequent regime, in which local authorities may or may not appoint their own auditors. However, there is a bundle of contracts, to which my noble friend Lord Christopher referred, which are ongoing at the moment but which will need management. That management is more than just a passive affair, so it needs to be put in place.
I thought that the arrangement about extension was that it would ultimately be a decision for the DCLG about its 10 bundles of different contracts—you do not necessarily have to make the same decision in respect of each of them. I say to the noble Lord, Lord Palmer, that I did not say that there should be some standardised approach to value-for-money issues. I sought to ensure that there was security of the value-for-money profiles that the Audit Commission currently produces—data that are available to all authorities and others as well—so that authorities are able to make their own judgments and undertake their own exercises, whatever they may be. After the Minister’s response, this is the area I feel less confident about. We do not know from the reply whether they will be maintained, even broadly, in their current form, or whether they will be available as a valuable tool for local authorities and health bodies in the future.
It was not my intent to get the Secretary of State involved in all things. The purpose of the amendment is to require the Secretary of State to be assured that these matters are in place—not that the Secretary of State is operating them—by the time the Audit Commission closes. Once the Audit Commission goes, that will be a very clear break with the current situation. So far as the role of the FRC and supervisory bodies is concerned, I understand their role in that, but the key issue is on how transparent the result of their work will be. We do not yet have clarity on what will be the consequences of their auditing of audit work and what will happen to that. That was part of what I was inquiring about.
Perhaps the noble Baroness can first deal with that point about transparency of the FRC’s supervisory activities or the supervisory bodies: what is likely to be in the public domain as a consequence of their work? It would be helpful if we could have an answer on that. I should also like some clarity on the value-for-money profiles. Is it intended that the data will still be collected, maintained and available to relevant bodies—whether in precisely the same form as now, or not? Is it intended that these profiles be available in the future, once the Audit Commission has closed? This is an important issue, so could the Minister give some further clarity on it?
Baroness Hanham
My Lords, I may need to write to the noble Lord on the detail of this. However, our understanding is that clarity and transparency will remain as they are at present, so that the Financial Reporting Council will have much the same monitoring role. Anything that it does in relation to councils and local audit will have to be as transparent as is necessary. I would prefer to write to the noble Lord, particularly on this issue, and to make sure that the information is put into the Library of the House.
Lord McKenzie of Luton
I am grateful to the Minister for that but perhaps it is time we stretched our legs. I beg leave to test the opinion of the House.
Lord Palmer of Childs Hill
My Lords, from these Benches we also look forward to the Minister giving that information. Although there is worth in the amendment, I wonder whether it needs to be in the Bill rather than being done by regulation at some stage in the future.
Baroness Hanham
My Lords, as the noble Lord said, I was sympathetic about his amendment in Committee. It would ensure that if the Government were to bring forward what might amount to a hybrid instrument under the powers in Clause 2, the bodies affected would be consulted before regulations were laid. This, indeed, would need to be through regulations. We do not expect that the need to bring forward regulations would be anything less than rare.
As I said in Committee, we recognise that in these cases there would be especially compelling reasons for the Government to consult. In our previous discussion I referred the noble Lord to our forthcoming response to the DPRRC’s report. We have accepted the committee’s point and informed it that we would announce our commitment, which I am doing, and consult affected bodies at Report. We confirmed that this will not entail the need for any amendment to the Bill. I am happy to give that commitment today, and to consult relevant persons on a draft of any statutory instrument containing regulations or an order falling under Clause 40(7) of the Bill. Any such regulation would be subject to the affirmative process, so Parliament would have the opportunity to scrutinise it. In the light of that commitment, I hope that the noble Lord will feel that we have satisfied his requirements.
Lord McKenzie of Luton
I am grateful to the Minister for that commitment which is very clear. I would still prefer to see it in the Bill, but I will not press that point. The answer is clear and I beg leave to withdraw the amendment.
Lord Palmer of Childs Hill
My Lords, I would also welcome the Minister clarifying some issues, particularly if there is, indeed, a problem of a practical nature. At present, most local authorities are audited by a professional firm. A fairly small proportion is audited by the commission. Those audited by professional firms will be audited under the continuing contracts until 2017. The local authority will then have the ability to appoint a new auditor. This is what happens in the commercial world. One has an auditor, the auditor audits for a period—generally for the year, in this case for slightly longer—and then there is a new appointment. This is quite the natural way of things. I am not sure—and I hope that the Minister and the noble Lord, Lord McKenzie, will clarify this—why we need to have this because, in a practical sense of the word, auditors are there for a period, they finish their term of office and then they, or another auditor, are appointed. That is the natural way of things whatever we decide or do not decide in your Lordships’ House.
Baroness Hanham
My Lords, first, I confirm that it is possible to introduce different parts of the Bill at different stages, and the order in the Bill can be switched around. I think the noble Lord asked whether Clause 4(2) could be introduced before Clause 4(1) and the answer is that it could—it is a case of whatever is convenient. The Bill introduces powers to commence different parts of the Bill at different times and to make savings on provisions relating to the Audit Commission Act 1998. Therefore, we would expect to commence this reference in line with the introduction of the local appointment, which I think we were discussing when the noble Lord, Lord Christopher, was here.
If the noble Lord wants to know our wider intention of how to manage the overall transition to the new audit framework, it may be helpful if I say a bit more about that. Our intent remains, as I said, to close the commission in spring 2015. The existing audit contracts will continue to run until 2017, but management of those will transfer to an interim body. We have discussed these over the three previous amendments. As the contracts will run until 2017, authorities will not need to make their own appointments until that stage, but they will have to have made those appointments so that there is a smooth transition between the contracts currently managed by the Audit Commission and whoever manages them subsequently, into the local authority’s own regime. We therefore expect that much of Part 3 of the Bill, which deals with local appointment, will not be commenced until closer to 2016, which then gives them a year to do that. It will be 2016 when procurement of auditors for 2017 is likely to begin.
The current intention is that the new eligibility and regulatory framework and provisions on the conduct of audit will come into effect immediately following the closure of the commission in 2015. It is our intention to make arrangements to enable us to do this under the powers in the Bill, subject to analysis of the transitional arrangements—again as we have discussed, there have to be transitional arrangements—that may arise.
Lord McKenzie of Luton
I missed the Minister’s first point. Would she mind repeating the beginning of that sentence?
Baroness Hanham
It is our intention to make arrangements to enable us to do this under the powers in the Bill. Our current intention is that the new eligibility and regulatory framework and provisions on the conduct of audit will come into effect immediately following the closure of the commission in 2015. The provisions will then relate to whatever interim arrangements for the body are in place. I hope that that is sufficient clarification for the noble Lord to withdraw his amendment.
Lord McKenzie of Luton
I thank the Minister for her reply and the noble Lord, Lord Palmer, for his contribution. I say to the noble Lord, Lord Palmer, that my point was not about auditors and succession of auditors but on quite a narrow drafting point. One of the requirements in Clause 4 is that the audit must be undertaken,
“in accordance with this Act … by an auditor appointed by that authority”.
Obviously, until 2017, the auditors will have been appointed by the Audit Commission, and the question is how the system works under those circumstances. I accept the broad point that matters can be introduced at different stages but I am still a little mystified as to how the new framework is to operate from 2015, so long as Clause 4(1)(b) is there—unless that is simply excluded from what is introduced in 2015. Perhaps I should read the record and we might have a further discussion on this in due course if necessary.
Baroness Hanham
Baroness Hanham
My Lords, in moving Amendment 7, I will also speak to Amendment 8, which between them make small changes to Clause 7. These amendments enable two or more auditors to be appointed to exercise jointly one or more functions and enable a different auditor to be appointed to act separately to undertake one or more functions. The noble Lord, Lord McKenzie, first raised this issue by tabling two amendments in Grand Committee, which would have enabled auditors appointed jointly to issue advisory notices or to seek judicial review either individually or jointly.
I said that we would consider the drafting of Clause 7 to check that it provides the desired level of flexibility for auditors to work jointly and individually. The two amendments that we are bringing forward are a result of those deliberations and give relevant authorities greater flexibility in the way in which they can appoint more than one auditor. Authorities will of course be able to appoint just one auditor. Alternatively, they will be able to appoint more than one: jointly, to exercise one or more functions; separately, to undertake different functions or different parts of the accounts; or some combination of those. We consider that it will very rarely be the case that authorities wish to appoint more than one auditor to act jointly throughout the whole audit. However, where they choose to do so, the auditors must act jointly. The clause already enabled auditors appointed separately to undertake some functions jointly if those functions overlapped, but it did not allow auditors to be appointed with the purpose of undertaking some functions jointly and others separately. I am grateful to the noble Lord for raising this matter. I hope that the amendment will enable a more flexible approach, and I beg to move.
Baroness Hanham
Baroness Hanham
My Lords, my noble friend and the noble Lord, Lord McKenzie, raised several issues, seeking clarification about the auditor panel. I start by reminding noble Lords how the auditor panels will operate, and how we are moving to keep arrangements streamlined and flexible in terms of whom the auditor panel is made up of. First, I want to confirm what I said in Committee, that we do not expect these auditor panels to be large. We expect them to be quite small, probably three or five people at the most. This does not exclude members of the audit committee being members of the panel, as long as they are independent members. If the audit committee has an independent member, that member can be a member of the audit panel. I do not think that there would be anything to exclude them being chair of the panel, if that is required. It would not actually preclude a member of the opposition being chair of that panel. We can see that that is how they will be made up.
Other than that, they can appoint a completely separate auditor panel outside the audit committee regime. There again, they will have to make sure that the members of that panel are majority-independent. Again, that would not preclude any member of the local authority being part of it, even though they might be considered to have some relationship with what is going on because, by definition, they were a member of the council. None the less, we think that there might be some virtue in having a councillor or councillors on the auditor panel to help with the selection.
Amendment 10 goes back to our discussions on wider issues; that is, the assessment of the independence of auditor panel members beyond direct personal links to the audited authority. I hope that I have explained that we need them to be really independent. Some concern was expressed last time, a concern which I do not think the noble Lord raised this time, about significant business relationships. By any definition, a significant relationship with a local authority, particularly on a contractual basis, would preclude somebody being a member of the panel.
We do not want to make much more regulation, but I think that we need to look at giving some guidance about who can and cannot be on an auditor panel. We will do this as the regulations are considered later in the year.
Baroness Eaton
Can the Minister give a bit more information about the process of selection for independence? That would deal with the point made by the noble Lord, Lord Palmer, about political affiliations sometimes not being absolutely clear. Is there likely to be a clearly defined process for how local authorities select independence? Rather than their just saying, “That is an independent person; we’ll have them”, is there going to be due process?
Baroness Hanham
My Lords, local authorities have due process already, as the noble Baroness knows, on how to appoint people, panels, independent committees and standards boards where independent members are required. I would not want to tie this down too firmly, other than to say that they must be pretty clear that nobody on the panel has a connection with any firm that may be applying to do the audit. If they have a political affiliation that should be declared so that, before the auditor panel is set up, it is known if they have a particular affiliation. Apart from, as I have suggested, there perhaps being one councillor on the panel, it is pretty clear that people should have some experience of audit so that they know what an audit looks like and what they might be expected to do.
We do not rule out independent members possibly being a member of a political party but it is essential that that is known so that there is transparency about it. We would hope that not more than one person, who would probably be the person off the council, would be that member.
It will be essential for members of auditor panels to declare any wider interests, commercial as well as political, and any other interests that they might feel had any relevance. Those would need to be taken into account in an appointments process that the committee undertook. If members of the audit committee were making the appointment they would have to make a balanced judgment on the balance of the panel, aligned with what I have already said. If it is an external appointment it will have to go through an external appointments process.
I think that it is clear that there should be, and be seen to be, independence in the auditor panel. I think that it is clear that local authorities have experience of dealing with external appointments. Although I understand the concern that the panels could be “stuffed” with political appointees, I think that there has to be transparency as to who is appointed. If it were found that it was just a political panel, it might be very open to question.
Lord McKenzie of Luton
I thank the Minister for her reply. The noble Lord, Lord Palmer, criticised the drafting of the amendment. I should explain that its purpose was simply to put down a mechanism which could be used to address wider issues of independence. We had in mind, specifically, significant business relationships. The Bill defines independence in terms of personal relationships; it should cover as well, for example, significant business relationships, which was the purpose of the amendment.
I was comforted by the briefing note that was produced following the meeting. It states:
“Through this combination of regulations and statutory guidance the Government intends to address other important aspects of independence for an auditor panel. We intend to work with interested parties and the sector to develop the detail of these, but as an example they might cover … the necessary skills and experience of panel members … specifying that certain persons are not independent where they have … significant commercial relationships with the authority or audit firm … the process through which independent members should be appointed … considerations around political balance, where the panel includes elected members … the conduct of members and, for example, how declarations of interest are managed on an ongoing basis”.
Each of those points, or at least some of them, were touched on by us in Committee. I took comfort from that. In a sense, that was the issue or the focus that my—clearly inappropriately drafted—amendment was seeking to address.
I reiterate where we are on the issue of audit committees or auditor panels. I think that, because there is in some instances a potential conflict between wanting to fulfil the independence requirements and the broader role of the audit committee, the best solution where they cannot be aligned is the sub-committee approach. I am not quite sure who at the meeting raised that, but the briefing note again confirms that the auditor panel could simply be a sub-committee of the audit committee. As long as that auditor panel fulfils the independence requirement, honour and justice are satisfied. That seems to us to be a helpful way forward which still encourages local authorities all to have audit committees and to move to greater independence relating thereto.
Baroness Hanham
Although I do not think that I mentioned sub-committees, I think that I made it clear that where there are audit committees, the membership could be drawn from the independent members of that committee, with possibly a local councillor. The implication is that audit committees are meant to be there and could form the basis of the auditor panel.
Lord McKenzie of Luton
My Lords, I am grateful for that and beg leave to withdraw the amendment.
Baroness Hanham
“( ) omit “, 23A(1)”, and”
Baroness Hanham
My Lords, Amendment 11 is necessary following a recent amendment to the Companies Act 2006 made by regulations. As I am sure noble Lords are instantly aware, paragraph 21 of Schedule 5 to the Bill modifies Section 1253(5) of the Companies Act 2006. That section specifies the conditions for delegating functions, such as the function of recognising supervisory bodies, to an existing body and refers to Schedule 10 to the Companies Act 2006, which is also applied by Schedule 5 to the Bill. On 8 July 2013, the Statutory Auditors and Third Country Auditors Regulations 2013 were laid. One effect of these regulations is to insert a reference to paragraph 23A(1) of Schedule 10 in Section 1253(5) of the 2006 Act. Paragraph 23A of Schedule 10 to the Companies Act is expressly omitted by paragraph 27(2)(f) of Schedule 5 to the Bill. This is because paragraph 23A of Schedule 10 concerns arrangements for independent monitoring of third country audits, which are outside the scope of this Bill.
Therefore, for consistency with the other modifications to Section 1253 in paragraph 21 of Schedule 5 to the Bill, we are providing for the omission of the new cost reference that the Third Country Auditors Regulations 2013 will contain. This is a minor, extremely clear and easily understood technical amendment that responds to an amendment to the Companies Act 2006 and I beg to move.
Baroness Hanham
Baroness Hanham
My Lords, in June, the Delegated Powers and Regulatory Reform Committee published its report on the Local Audit and Accountability Bill. The report made a recommendation regarding the provisions in the Bill to prevent local authority newsletters unfairly competing with local newspapers. We have considered the recommendations in this very useful report carefully, and this group of amendments is the result of those considerations.
The committee said that in certain circumstances it is inappropriate for powers to make the code mandatory to be exercisable by directions rather than by statutory instrument, and subject to no parliamentary procedure. The committee recommended that, where the Secretary of State wishes to exercise his power to issue a direction to all local authorities in England or to a specified description of authorities, the affirmative resolution procedure should apply. While recognising that there can be circumstances where it is appropriate for the Secretary of State to be able to give directions to a class of, or to all, local authorities, we accept the committee’s recommendation that the exercise of this power in relation to classes of, or to all, local authorities, should be by affirmative statutory instrument.
We also agree with the committee’s implicit view that, where the power is exercised in relation to a single authority that the Secretary of State believes is not complying with the code, it would be appropriate for this to be by way of direction. However, we do not agree with or accept the committee’s recommendation that, where the power is exercised in relation to a single authority otherwise than where the Secretary of State believes the authority is not complying with the code, this should be by negative statutory instrument.
Our aim is simple: to be able to take effective action against those authorities that are giving rise to concern about their publicity, particularly relating to the publication of newspapers. Above all, in the case of such authorities, quick and effective action needs to be taken. These amendments ensure that the Secretary of State can continue to take that quick action against individual authorities. In cases where groups of authorities or all local authorities in England are being required to comply with some or all of the publicity code, we agree that this should be by order, subject to the approval of both Houses of Parliament. I beg to move.
Lord Beecham
My Lords, we are now coming to that part of the Bill that reflects several of the obsessions of the Secretary of State, not necessarily of the Minister. It is interesting that the draft Bill committee had, of course, no opportunity to consider these matters because they were not part of the original Bill; they were tacked on to the Bill at a later stage. I suppose we should be grateful that at least the Delegated Powers Committee has had an opportunity to comment on it. In fairness, I am grateful to the Minister and to the Government for accepting at least part of its recommendations, the part that referred to directions given to all local authorities. However, I find it difficult to follow the reasoning for the rejection of the second recommendation about directions to an individual authority.
The committee indicated that a power does not merely afford a specific and targeted enforcement mechanism but could—and would, if the relevant subsection is relied on—have the character of a legislative power. It took the view that it is inappropriate for powers of this kind, to make the code mandatory, to be exercisable by directions rather than by statutory instrument. Hence the two recommendations it made; in fairness, the Government have accepted one of them, although they did not accept the other. That decision was communicated to the committee and is reported in its sixth report, which was printed as recently as 11 July. In fairness, the report was written in June, but it does not indicate exactly when. However, it was considered by the committee only a matter of a few days ago—or at least, its report was published only a few days ago.
Baroness Hanham
My Lords, as the noble Lord knows, on the code of conduct, as regards publicity, and in general, it would be fair to say that the code is probably reasonably well observed among the majority of authorities. There could be occasions—I say “could be” because that is how we need to put it—in which a number of authorities breach all or part of that code, in which case it would be essential that the Secretary of State was able to take action. If it is a large number, there would, presumably, by definition be some really serious element that had come about so that the Secretary of State needed to be aware of it. However, this could do with a further look at in Parliament, and further consultation. We fully accept that that would need parliamentary time.
We already know of local authorities that are breaching the code in terms of a number of publications—what is in the publication and what relates to them at the moment. Since we now know about these it would not be sensible to have to wait and waste a lot of time in delaying taking the direction to stop them, getting them to comply, getting that matter dealt with and moving on.
We have responded in as straightforward a way as we can to the DPPRC’s recommendation, except for on this one area. Indeed, it may be that these individual directions to these individual authorities and would be the most that would be applied. I do not expect there to be many; as always, with these things, there are those who breach and cause trouble for the rest. However, there is no doubt that we would expect or hope to continue with the provisions in the Bill as have been outlined and, for the reasons that I have said, that it makes sense to get individual local authorities to stop what they are doing as quickly as possible. They are probably just breaching individual aspects of the code.
Baroness Hanham
My Lords, I am probably in danger of saying the same thing three times as there is no doubt that these amendments stray into each other. We have heard some pretty wide comments on the code as it stands, which probably go slightly wider than the intention behind the noble Lord’s amendments. None the less, we should be very clear that we are talking about the publicity code. I think that guidance is given to local authorities on seven aspects of the publicity code, their behaviour in relation to it and what it involves. It is a statutory code but compliance is voluntary at the moment. If the Secretary of State had to intervene, it would become mandatory only as regards the aspects on which he gave directions, if that was done across the board. If the Secretary of State gave an individual direction, that would be mandatory only for the relevant local authority. This is not a case of putting the whole code on a mandatory basis but of directing local authorities where they are seriously breaching the current code. We are interested only in those local authorities—and there are some—which are giving rise to concern about their publicity because they are producing far too many weekly or fortnightly publications—the terms of the code are three monthly—or are going beyond the reaches of propaganda or stepping outside what they should be doing and producing publicity which is too political. Those are the areas we are dealing with. As I have said several times, I totally accept that the majority of local authorities comply with the code without thinking about it. It is part of their lives, as it were, and they do not set out to breach it. However, some do and this Bill gives us an opportunity to make sure that they are put under some constraint.
Amendment 25 would require the Secretary of State to be satisfied that a local authority had failed to comply with the code under Section 4. The amendment is not necessary and inappropriate. It would needlessly complicate and risk delaying the exercise of the power of direction, which, as I have explained, needs to be quick. Having the making of a direction formally conditional on this simply opens the door to even more debate, argument and delay. That is not compatible with our aim of rapid, targeted action.
Amendment 28 would remove the power for the Secretary of State to give a direction to an authority whether or not he thinks that authority is complying with the code to which it relates. This would remove the Secretary of State’s power to issue a direction where there was doubt over compliance with the code in the future. It is right, when legislating for a new provision, to ensure that as far as possible the provisions cater for different eventualities so that you do not have to keep coming back to the various aspects but cover them so that they do not need to be followed up.
Amendment 30 would lengthen the period a local authority might continue not to comply with the publicity code. The noble Earl, Lord Lytton, agreed with my noble friend Lord Tope that the 14-day period was too short. Local authorities will know perfectly well when they are breaching the publicity code, so a two-week notice period is perfectly reasonable under those circumstances. The notice must be given in writing. A text message or an e-mail will not do. A formal notification must be given, marking the start of the 14 days’ notice. I am sure that the local authority concerned would have plenty of time to raise its concerns.
I return to the important point made by the noble Lord, Lord Beecham, on the form of the code. The Secretary of State cannot just change the code any old how. Any changes to the code would have to be approved by both Houses of Parliament, and any revision to it can be made only through the negative resolution procedure, so it would have to come before this House. The noble Lord shakes his head but a negative resolution can be turned into a proper debate in this House, as he knows as well as I do. The revision must be laid in draft before each House of Parliament and cannot be laid until after 40 days. This is the norm. If you laid the changes before 40 days, the noble Lord, Lord Beecham, who keeps an eye on these things, would leap on it after day three. If either House votes against the proposed change, it cannot go ahead. I think that is more or less the situation with any such proposal.
Amendment 35 is similar to the amendment on the notification. I think it is intended to require the Secretary of State to write to individual local authorities—I have already indicated that he will—modifying or withdrawing a direction. Any notification between the Secretary of State and a local authority would have to be in writing.
Our amendment, which makes provision that the exercise of the power by the Secretary of State to ensure compliance with the code in relation to all local authorities in England of a specified description, or to all local authorities in England, should be made by an affirmative statutory instrument, removes the need for these amendments. It would be highly unusual for an order-making power to be subject to a requirement for the Secretary of State to bring it to the attention of relevant authorities. To make special provision for the publicity code in this instance would bring confusion to other order-making powers, and is unnecessary.
Amendment 36 would build on Amendment 30 which, as I have said, would lengthen the period a local authority might continue not to comply with the publicity code. For the reasons I have set out and because we wish to move swiftly where there is an abuse of taxpayers’ money, I see no reason to extend the 14-day period.
Finally, Amendment 37 would require that a direction must take into account whether the authority has demonstrated to the external auditor that acting outside the code is in the financial interests of the authority to whom a possible direction may apply. This amendment would, I am afraid, once again delay the process. Local authorities know when they are spending too much money. In some circumstances, local authorities can act outside the code and issue notices, leaflets and newsletters as long as they are straightforward. I think that we will discuss that later.
This is also unnecessary. The provisions already allow local authorities to make representations before a direction is made requiring them to comply with the code. The 14 days does give them an opportunity to comply. Those representations could include a view from the auditor if the local authority wants it, but we would not require it. Taken as a whole, we do not consider the amendments necessary. I do not suppose that the noble Lord will be entirely reassured by what I have said but we have other amendments and we will no doubt consider them even further. I hope that from what I have said so far, the noble Lord will be happy to withdraw his amendment.
Lord Tope
My Lords, I am grateful to the noble Earl, Lord Lytton, for clearly supporting my amendments and putting his name to them. I am not entirely clear whether the noble Lord, Lord Beecham, was supporting them, grudgingly or not, but I am grateful to him for at least recognising my high wire act. I shall endeavour to remain on the wire. I am grateful to the Minister for at least a detailed reply on the amendments. To say that I am disappointed would imply that I had higher expectations in the first place. I am sad to say that I probably did not.
I was surprised at the Minister’s dismissal of the issue of the 14 days to 28 days notice, as 28 days is normal, good practice. It is hard to understand what is to be of such urgency that it can be dealt with under the 14-day notice but is so urgent that it cannot be dealt with in 28 days. I am surprised more than disappointed. The Minister will know that these provisions are causing widespread alarm, much of which I believe to be understandable but misplaced. I hope that in her further replies, which she herself said she will have to make, she will give greater reassurance on a number of the examples that I gave in moving the amendment—whether they are of the more standard publicity-type notices that local authorities issue, such as bank holiday recycling arrangements or notices about public health, or the rather more difficult ones concerning the third runway or HS2. I hope that we can get some reassurance on that.
A great majority of authorities cope within the voluntary code but we know that most local authorities are risk averse. They need to be and should be risk averse. They are advised by lawyers who are by nature risk averse. I fear that the consequences of what we are doing here will be far greater than even the Secretary of State intends. We will continue with this issue. I am quite certain that it will continue throughout the passage of the Bill. I hope that the Government will be willing not to dig in their heels but to look at how they can better and more specifically achieve their objectives than is currently the case. I beg leave to withdraw the amendment.
Baroness Hanham
Baroness Hanham
Baroness Hanham
Baroness Hanham
Baroness Hanham
“4B Power to make order requiring compliance with code
(1) The Secretary of State may by order made by statutory instrument impose a duty on all local authorities in England, or all local authorities in England of a specified description, to comply with a code issued under section 4 that applies to those authorities.
(2) An order under this section may impose a duty to comply with—
(a) one or more specified provisions of a code, or(b) all of the provisions of a specified code.(3) A order under this section may—
(a) specify the steps that an authority to which the duty applies must take to comply with it;(b) specify the time within which such an authority must comply with the duty.(4) The Secretary of State may make an order under this section which applies to an authority whether or not the Secretary of State thinks that the authority is complying with the code to which the order relates.
(5) An order under this section—
(a) may make different provision for different cases or classes of case, including different provision for different descriptions of local authority;(b) may make incidental, supplementary, consequential, transitional or transitory provision or savings.(6) A statutory instrument containing an order under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(7) In this section “specified” means specified in an order under this section.”
Lord Beecham
My Lords, this amendment stems from concerns raised at a meeting of the all-party group inquiry into electoral conduct, to which I referred in Committee. Doubts have been expressed about whether it would be possible for local authorities at any time, but even during elections—perhaps especially then—to correct mis-statements of fact that could give rise to problems in relation to the Equality Act, such as racist or discriminatory statements that might apply to particular groups.
The noble Baroness said that she would look into this and write to me to clarify the position. I am grateful to her for doing that. She confirmed that it is permissible for local authorities to do exactly that, even during an election period, which is probably the most urgent time, provided that it is a factual statement. The purpose of the amendment is simply to allow the Minister to repeat for the record and Hansard the assurance that that is the position. That would be of some comfort to electoral officers and local authorities that might be confronted with this situation. Given some of the things that are being said up and down the country by various groups, it is likely that at some point local authorities will feel constrained to issue material of that kind, perhaps during an election period. It would be good to have that assurance on the record. I am extremely grateful to the noble Baroness and indeed to the Government for acknowledging that perhaps there was a doubt and for clearing it up so comprehensively.
Baroness Hanham
I am happy to confirm what I have written to the noble Lord and I will read it out. The publicity code explicitly provides for a local authority to correct or rebut misinformation, making explicit provision in the sections about objectivity and care during periods of heightened sensitivity. Moreover, it contains provisions about equality and diversity, specifically allowing local authority publicity to seek to influence the attitudes of local people or public behaviour in relation to matters including equality, diversity and community issues.
During an election period, for example, local authorities may publish factual material. A local authority should take care when issuing publicity and should not be issuing publicity that seeks to influence voters. However, this does not prevent an authority from fulfilling its role in seeking positively to influence people in terms of equality and diversity. Hence if there is disinformation in circulation promoting harassment, a local authority may take action to correct it at election time or indeed any other time. The provisions in the Bill do not change the contents of the publicity code that have been agreed by Parliament. Rather they give the Secretary of State the power to ensure that taxpayers’ money is not being wasted by local authorities by disregarding the publicity code. Nothing in the publicity code prevents local authorities addressing issues of discrimination or harassment and tackling them head on. No local authority can claim that the provisions in the Bill to tackle non-compliance with the publicity code prevent them complying with the Equality Act.
In short, this amendment is not necessary and I hope that, with the reassurance that I have given the noble Lord and what I have said in the House today, he will be willing to withdraw the amendment.
Lord Beecham
Indeed, I am, and I repeat my thanks to the Minister for making the position clear. Now it is on the record. I beg leave to withdraw the amendment.
Lord Beecham
My Lords, in the parallel universe occupied by the Secretary of State, Pulitzer prize-style municipal correspondents can no longer haunt the corridors of town halls, rigorously holding local authority leaders and councils to account. They have now been supplanted in his imagination by what he describes as “town hall Pravdas”. To adapt a phrase, it seems that the local authority devil wears Pravda. In so doing, the local civic newspapers disseminate propaganda at public expense.
As I have demonstrated, there is very little evidence to support any of that, still less that the effect has been damaging to the local media. On the contrary, local media have very consciously and over many years withdrawn from reporting local government. I remember in the early 1980s, when I was leader of Newcastle City Council, urging the BBC to appoint a local government correspondent. They had a very good reporter there who has now made a national reputation, Mr Michael Blastland, who covered local government and much else. That was rather unusual for a local television and radio station, but it was not by any means a full-time job and the idea did not seem to catch on.
Furthermore, at a later point, the local papers in Newcastle, the Journal and the Evening Chronicle—which, strange to say, my constituents and those of the noble Lord, Lord Shipley, when he was a councillor and leader of Newcastle City Council, were able to distinguish from the city council newspapers occasionally distributed, contrary to what the Government appear to think happens in the real world—apparently decided that they would reduce the amount of coverage of local affairs. They attended meetings and contacted members of the council, me and others, less frequently.
I raised the point with them and made it nationally as well. The Journal in Newcastle, the morning newspaper, said that it had conducted a survey and its readers were not interested in local affairs. Therefore, it ceased to be to any extent a paper of record, which is what good newspapers ought to be. It did this not because of competition from half a dozen issues of Newcastle City News but because, in its judgment, the readers were not interested. Some of us like to think that the virtue of local media is that they seek to educate and inform the local community. They have abdicated that responsibility; they have done it of their own volition and it is ridiculous to suggest that that has been caused by local authorities.
The conflation of a variety of issues that have been adduced to support the Government’s position on the whole issue of a code of publicity is entirely unconvincing. There is no significant cost to local authorities. There is no evidence, as I have already reported, via the National Union of Journalists, that it has had an impact on the circulation of local papers and the decline of revenue. On the contrary, there are many other explanations, which I will not rehearse again. As for the other main argument, that there is a danger of political abuse by some of these papers advocating a party line or support of the authority in control of the local council, of course that can and should be dealt with without a code, because it would be unlawful as matters stand to conduct propaganda in that way.
We have debated at considerable length the role of the auditors. The auditors have a responsibility in this and other matters. They are entitled to look at whether council expenditure, in the area of publicity, for example, is lawful and appropriate. In addition, there are other sanctions that can be applied, including, in extremis I suppose, judicial review. Therefore, both props of the Government’s case fail. It is not necessary to emulate the man on the wire to deal with these matters. It is simply the case that the Government are overreaching themselves.
I have to comment on the hypocrisy of a Government who allow, possibly promote, their Civil Service spokesman to make statements using the personal pronoun. Therefore, government spokesmen—not Ministers, or even MPs or Peers—in the form, presumably, of press officers or civil servants are all too often quoted as saying, “We are taking action on it”. It might be on welfare benefits or whatever. That is a politicisation of the Civil Service that is a step too far. It happens all too regularly. I do not say that it did not happen under the previous Government. I cannot recall such events, but it may still have happened. Under any Government, it is wrong for that to happen. If that were to happen in local government, there would be a legitimate outcry. It would be quite wrong for a chief executive or an officer of an authority to use the personal pronoun on a political issue, as opposed to saying that it is the council’s policy.
In addition to all the other grievous sins of omission and commission that the Government commit in this area, this is something that they ought to look at on their own account before they descend on local authorities in the way that they propose in the Bill. Again, I remind your Lordships that the draft Bill committee was given no opportunity whatever to discuss matters of this importance. It is not surprising that the Local Government Association is completely united across the political divide about this, hence my amendment opposes that the clause should stand part.
Baroness Hanham
My Lords, the trouble with clause stand part debates is that they tend to come after everything else has been said. The danger is that one says it all over again. As I said, three groups of amendments have all covered more or less the same ground. I must ask the Chamber to forgive me if I cover some things that have already been said. It is clear that the Government do not see the situation in quite the same way as the noble Lord, Lord Beecham, has laid out tonight, nor as the Local Government Association has seen it in wanting all these provisions removed. We do not believe that should happen. We accept, as I said, that the great majority of local authorities will never breach the code. They will always do, and be guided by, the right thing.
I shall not say which local authorities we already know are breaching the code. I have them. I could do it, but I think it is probably not helpful. I hope noble Lords will accept my assurance that at least a dozen are breaching it at the moment. Either they are publishing publications, very frequently, outside the terms, or they are including propaganda or their own political statements. It is there and it is wrong; that is not what was meant to happen. As I say, with legislation the opportunity comes to try to put that right. Once again, it is putting it right for a minority—I totally accept that—but put it right we must. The Secretary of State is not taking very draconian powers. If the Secretary of State would have to put a broad direction out to a whole lot of authorities, we would be very worried about what local authorities were doing. That provision is there in case it is needed, but we are much more concerned at the moment about the individual authorities doing individual transgressions.
There are two elements of this, as I have said right from the outset. The provisions are necessary to make sure that taxpayers’ money is not abused; to see that local authorities produce publicity, not propaganda; and to ensure that local newspapers—which the noble Lord, Lord Beecham, slightly downgrades—hold local government to account. They are often full of what is going on; they are the proper means by which that should be done. The provisions do not change the publicity code itself; the guidance remains the same, allowing local authorities to communicate effectively with their communities. However, the clause provides the Secretary of State with the power to direct one or more authorities, as I have said. The clause also sets out the procedure to be followed, as we discussed—14 days’ notice in writing—and provides for a direction to be modified or withdrawn in writing.
Baroness Hanham
My Lords, Amendments 42 and 43 would remove subsections (15) and (16) from Clause 39. Amendment 45 allows for transitional provisions to be made in respect of previous arrangements or contracts entered into prior to 2013-14. As noble Lords have said, subsections (15) and (16) are not linked and they fulfil different purposes. However, I understand that the noble Lord, Lord Tope, originally tabled these to address a single concern, although he has not spoken tonight. It was made clear in Committee by the noble Lord, Lord Tope, and now the noble Lords, Lord Beecham and Lord Shipley, that Clause 39 and subsection (15) in particular have a retrospective effect, and that the clause would be impractical and councils would have insufficient time to take account of the changes.
With respect to the noble Lord, Lord Shipley, I must restate the Government’s disagreement with this view. Neither the clause nor subsection (15) is retrospective. They do not interfere with the council tax and levies set last year. Those increases have been made and are in authorities’ tax base for future years.
Subsection (15) simply allows the Secretary of State—should he so choose—to set a referendum principle for 2014-15 focusing on authorities where the council tax, including levies, increased by a large amount in 2013-14. The Secretary of State will consider whether he wishes to do this later in the year as part of the usual round of principle-setting. Authorities and levying bodies will have an opportunity to make representations on principles, which will be put to the other place for approval.
Furthermore, authorities will have the opportunity to set an overall increase in council tax and levies in excess of the principles, making the case to the local population in a referendum if that is where they need to go. If noble Lords work it out—as I think the noble Lord, Lord Beecham, has done—they will find that very few authorities are likely to be affected because the combination of the levies and the council tax potentially gives a bigger pot for the percentage increase.
The approach proposed in the clause is entirely consistent with previous and current practice. Perhaps I may go back to the unhappy word of capping. As part of the setting referendum principles, the Secretary of State considers all relevant factors. These always include council tax decisions taken by authorities in previous years. It is worth highlighting that 2012-13 and 2014-15 have been the only two years since the 1980s when levies have not been part of excessiveness considerations. We are simply reverting to the definition of excessiveness used by successive Governments from 1984 to 2010. This approach resulted in some smaller authorities with a history of lower council tax being set more generous referendum principles in 2013-14. No one accused the Government of taking retrospective action when they took this approach.
The possibility of the Secretary of State setting specific principles for those authorities where substantial levy increases resulted in substantially higher bills in 2013-14 should come as no surprise to them. His speech to the New Local Government Network and his Written Statement of 30 January 2013, and letters to all authorities, could have left them in no doubt as to the possibility. Council tax and levies for 2013-14 were set in full knowledge of the Government’s intention for 2014-15—that is, a year later on.
The Government have been clear from day one that council tax payers should be protected from excessive increases, and this clause will extend that protection. It will also increase fairness for local authorities by ensuring that all the money raised through council tax is potentially subject to a referendum if it is in excess of the principles. At present, there are areas where more than 50% of the local council tax bill is made up of levies and is therefore not subject to a referendum.
The legislation is not retrospective. We have been clear about what the situation is since January this year. Existing legislation already gives powers to the Secretary of State to determine different categories of authority, so the measures will not necessarily be across the piece.
Amendment 43 would remove subsection (16) from the clause. It may be helpful for me to explain the purpose of that subsection, which is not, as noble Lords have already admitted, directly linked in purpose with subsection (15). To be able to determine whether an excessive increase has been set in 2014-15, all authorities will need to make a like-for-like comparison between the council tax in 2014-15 and that set in the previous year. The principles will be based on an amount including levies in the next year, so the removal of the provision would not be helpful for many local authorities. It would mean that their previous year’s relevant basic amount of council tax would be at a much lower level than that of the subsequent year, against which it was being compared. Subsection (16) simply means that the 2014-15 figure can be compared with the one for 2013-14, which includes the levies that were set for that year. Without subsection (16), authorities would be effectively required to compare apples with pears, and the whole clause would be unworkable. I am sure that that was not the noble Lord’s intention.
The Government have been entirely open with authorities about their intention to bring levies within the scope of the referendum legislation and to take into consideration the previous increases when setting future referendum principles. A Statement approving the referendum principles for 2013-14 was laid in the other place on 13 February—so between January and February plenty of notice was given. Amendment 43 would undermine the Government’s commitment to protect council tax payers and prevent all authorities and levying bodies being subject to the same kinds of accountability and financial discipline. In view of the comments that I have made, I hope that the noble Lord will not press the amendment.
Amendment 45 replicates one which was proposed in Committee, so I shall expand on the response that I made then. The issue here is city deals and the levies that are envisaged by combined authorities in future years following the agreement between the Government and local authorities, particularly in West Yorkshire. The city deal implementation plan agreed between government and the Leeds City Region included the following summary text:
“Leeds City Region will establish a £1bn West Yorkshire … Transport Fund overseen by the new Combined Authority. The Fund will be financed by a levy that the Combined Authority will place on individual councils”.
In Committee, the noble Lord, Lord Tope, read into the record an e-mail from the director of finance at Bradford Metropolitan District Council. Bradford’s contribution to the city deal is funded by a £1.2 million increase to its levy each year.
We have looked at these figures carefully. These levy amounts would produce a council tax increase in Bradford of 0.7% in 2014-15, falling to 0.5% by 2023-24. We have also established that similar percentage figures apply across authorities in West Yorkshire. There is therefore no need for any transitional or other provisions to be made for contracts already entered into, as the levies envisaged by the authorities in the Leeds city deal area are substantially below the current 2% referendum threshold. I therefore hope that the noble Lord is willing to withdraw his amendment.