Local Government Finance Bill

Lord Beecham Excerpts

Thursday 5th July 2012 Grand Committee

[Lord Shipley]

That would actually be a quicker way of proceeding.

I agree with the amendment moved by the noble Lord. The Localism Act was about devolving power and decentralising decision-making. This set of amendments makes it clear that there should be full consultation with local government before decisions are made. When decisions are made, that cannot just be about notifying those decisions but should clearly explain through consultation first but secondly explanation of the decision that has been made, particularly in a matter as complex as tariffs and top-ups. Thirdly, there has to be consultation on the detail not just on the general nature of things.

I hope that the Minister will take on board that feeling because the Localism Act has changed the balance of responsibility between central and local government. It would help enormously if it were not just left for the Secretary of State to have a set of powers whereby things can be announced but not actually explained.

[Lord Beecham]

My Lords, I entirely support the amendment moved by my noble friend and supported by my erstwhile colleague on Newcastle City Council and fellow vice-president of the Local Government Association. It clearly makes sense, and, as the noble Lord, Lord Shipley, said, it is clearly in the spirit of the Localism Act.

However, there is another aspect. The Government set much store on the proposals in relation to the business rate as part of an approach to incentivise and increase local investment by business, growing the local economy and all the rest of it. In that context, it would surely be sensible if, in addition to consulting local government perfectly properly on these topics, they also consulted business. That cannot be done at every local level by the Government and councils will no doubt continue to have discussions with their own local businesses. However, as I pointed out on our first Committee day when I quoted the London chambers report, some 53% of businesses believe that councils set the business rates now. So there is a certain amount of education to be done here. But at the national level, I would have thought it important for government to consult, particularly about that proportion of the business rate that is to be held centrally rather than devolved locally, because that clearly would be a matter of concern to the business community.

Without the necessity of moving anything formally, it would be helpful if the Minister could put on the record an intention that in any consultation about the business rate and the various elements, resets and proportions and so on, the Government will consult the business community as well as local government.

[Lord True]

My Lords, I apologise for leaving the Committee early last time. I had a meeting of my council to attend. I must also explain I am not a vice-president of the Local Government Association but I am in receipt of a very kindly letter from it inviting me to become one.

--- Later in debate ---

For the sake of example, let us suppose that it takes between two and a half and three years to get the result of an appeal—for a valuation tribunal to pronounce on the matter. Assuming that it does not go beyond that appeal to a higher tribunal, the recalculation can start and might go back many years, as the noble Lord, Lord True, said. Having done all this tariff business, if I may call it that, how many bits of recalculation will be spread over this timescale, which extends backwards as well as into the future? I fail to understand how this can be made to work. My simple arithmetic—I do not regard myself as terribly numerate—suggests that there are too many variables to call the outcome. It has to be simplified.

[Lord Beecham]

My Lords, we are talking about a safety net, but it seems that both the number of holes in that net and their size are to be estimated. It is quite a difficult position. The formulation of the noble Lord, Lord Jenkin, seems much more rooted in objective fact and would give a degree of certainty. Should the Minister not take this matter back for another look?

[Baroness Hanham]

My Lords, I am happy to do that. The historic figures, which will be used across the country, will be used as the basis of what we have been talking about. We can try to bottom out the detailed calculations between now and Report. It is probably more helpful if I write to Members of the Committee so that they can see what they are. However, the rates system is not new; we have had a system of business rates for ages. At least some of it will not change at all. There have been rates and appeals for all that time. There is not a huge difference in the mechanism but the results may be slightly different. I will write to noble Lords about that as well; it will be a long letter.

--- Later in debate ---

[The Earl of Lytton]

My Lords, that was what I was trying to say in terms of the Jubilee line, so I am sorry if I gave a false impression. These things are vitally important to leverage in that sort of level of finance. My only concerns are the times we live in. If one is dealing with a development appraisal in conventional valuation terms, the process contains a high number of price-sensitive variables, so much so that my professional body, the Royal Institution of Chartered Surveyors, does not really advise using that sort of development appraisal, or residual valuation, approach for producing what it calls a regulated purpose valuation because of the inherent number of price-sensitive variables. I do not want to pour cold water on things—I simply wanted to point out that TIF is a tremendously good idea but we must make sure that the circumstances are ones in which it can robustly survive.

[Lord Beecham]

My Lords, having spent some considerable time searching through the Bill to find where TIF was, I have to congratulate the noble Baroness on discovering it. It is a bit like Higgs boson. The physicist who discovered the Higgs boson will no doubt get the Nobel Prize for Physics. Perhaps we should nominate the noble Baroness for the Nobel Prize for political metaphysics.

[Lord Jenkin of Roding]

One might also congratulate the House of Lords Library on a very splendid section about TIF in its briefing pack for this Bill. It, too, had to say that TIF was not mentioned in the Bill at all. That point is enormously well made.

[Lord Beecham]

I reiterate my congratulations to the noble Baroness—and indeed the House of Lords Library.

The noble Baroness was rightly critical of some of the aspects of the public finance initiative with which she lived for around 20 years. I was with an LGA delegation on one of our rare visits to 10 Downing Street when we met the then Prime Minister, John Major, at the very beginning of this process. Of course, it has been adopted by successive Governments with considerable enthusiasm. But it always struck me that, whereas there was a good case for that kind of scheme where you could see a revenue stream, there was very little case where there was not a revenue stream. Schools and hospitals, for example, could not be allowed to close or fail, so there did not seem to be a chance of risk-classing in those sorts of cases, whereas on a more commercial basis it seemed quite appropriate. This, arguably, is a better version of PFI.

Of course, as the noble Baroness said, TIF derives from America, where they have other forms of municipal financing, such as bond issues. At some point we might want to look again at those as opposed to this particular scheme, which is analogous in some respects but tied more particularly to specific projects. There are certainly distinct advantages to this. I note the point that the noble Baroness, Lady Kramer, made about the relationship with enterprise zones. I hesitate to raise—for the fourth or fifth time—the question of enterprise zones and their relationship to various aspects of this Bill. I hope that I will have a reply to some of my previous questions, but I join the noble Baroness in asking about the relationship of enterprise zones to the TIF programme.

I am intrigued by Amendment 51, which seeks to avoid the trap of any such financing being regarded as part of what we used to call PSBR—now debt—and takes it off balance sheet. It seems such a simple solution that I wonder why it has not been adopted before, perhaps in relation to other matters. I hope that it stands up; it would be good if it did. If it does, I think we would be in a similar position to that of former Labour Ministers in 1931, when the incoming Government went off the gold standard and they said, “They didn’t tell us we could do that”. If this proves to be a viable mechanism, I hope that it will have a wider application, and indeed it might.

The noble Lord, Lord Best, referred to his special field of expertise, housing, and rightly pointed out that the schemes will not be available to support housing but will be available to support infrastructure. There are two aspects to that. First, there is surely another way of promoting housing construction. If the Bank of England is going to pump endless billions into the vaults of our esteemed banks, would it not be better to pump that money directly into housing construction? This would have precisely the same effects on the economy that the noble Baroness has alluded to: the net cost after you take off the savings to the benefits system—increased tax income from corporate tax and the like—would be less than the amount devoted. You would have assets on the balance sheet—this is not money for current expenditure—and that might be a way forward. I suppose that is not really within the province of the Local Government Finance Bill, but it raises the question of TIF and its use for infrastructure.

As I understand it, the Government have been looking for investment in infrastructure from pension funds and the like. I recall a recent report, although I cannot remember whether it was produced by the National Association of Pension Funds or the IFS, which indicated that there was little interest thus far in such funding from those sources, whereas this offers a clearer route to making rather more rapid progress, and I very much hope that it will be pursued.

Nevertheless, there are some potential flaws in the present proposals. In particular, the amount allocated— I think the noble Baroness said £160 million although I thought it was £150 million, but it is in that region—is pitiful, as she rightly said. I do not know whether yesterday’s “city deal” announcement dealt with this £150 million or £160 million—whatever the figure is—which I thought was to be allocated to the authorities involved in that city deal but, if so, however it is divided up, it is a very small amount indeed and will do very little. Even in a single authority, it would not do an enormous amount. Spread across eight authorities, it would do very little. I hope that this is seen as a first instalment and that the process will go on to much larger sums in future, and rapidly, if we are to see a real impact on the present situation in the economy.

TIF 1 also has its problems because, as the noble Lord, Lord Shipley, and the noble Baroness, Lady Donaghy, pointed out, the restrictions seem to be quite perverse. The timescale for repayment is particularly so because, if there are to be resets and so on, nobody is going to be taking on large sums that have to be repaid in a very short time, as the noble Lord, Lord Shipley, rightly said. Indeed, lenders may very well be reluctant to lend over those times. I entirely concur with the view expressed by the noble Lord, Lord Shipley, that it is ridiculous to have an absolute limit and for there to be a cap on expenditure in the first year. On the contrary, I would have thought the more the better to get the thing moving in the early stage.

We certainly approve of the concept and hope it can be made user-friendly, if I can put it that way, to lenders and authorities. These amendments certainly go some way to taking us in that direction. Again, the noble Lord, Lord Jenkin, is quite right. We cannot expect too much of the Minister in replying today, unless she has somehow received a blank cheque from the Treasury, which would be a first. I am sure she will report back the strength of feeling among people with considerable expertise in these matters, whether ministerial or professional, and we might see some improvement.

On Report, it would be helpful to have explicit reference to the scheme in the Bill. It has to be very clear what we are talking about and whether there are to be any changes in the scheme as adumbrated so far. It is clear that this is not going to be a panacea. It will not do everything, but it would be a welcome extra tool for local government, which is perfectly capable of using it effectively, as it has demonstrated for generations. It can and does play a significant part in regeneration, very often in partnership with the private sector. I very much look forward to the day when local authorities can get on with schemes under the aegis of TIF—however it eventually emerges from this Bill—and, perhaps, other measures.

I note that Scotland seems to have jumped the gun. That is interesting because presumably—certainly in the present state of affairs—what happens there would impinge upon the national UK debt. Sitting where the noble Lord, Lord Shipley, and I sit, just over the border, it would be extremely irritating if it were found that Scotland was able to do a great deal and we in the north-east were not. Of course, the same would go for many other parts of the country where there is huge need and demand for investment of this kind, and for the contribution that that could make to the economy.

I certainly commend these amendments, and I hope that the Government in one form or another can look sympathetically at them and address the very legitimate concerns that have been raised in order to make a good policy work effectively, which is what we must all seek.

--- Later in debate ---

[Lord Warner]

It might just help the Committee to say that there are plenty of suggestions around, which the Government are well aware of, that enable you to implement the Dilnot proposals without any increase in public expenditure. What you are required to do, though, is reprioritise, which the Government are unwilling to do, as far as I can see. Starters for 10 would be not just the creative proposal of my noble friend but means-testing generous winter fuel payments, free TV licences and bus passes for people who are higher rate taxpayers. Plenty of proposals have been put forward for using inheritance tax to pay for that. All these proposals could be put into play if the Government were prepared to enter objectively into a discussion with the Labour Front Bench in the other place, with whom they are having so-called cross-party talks, but very little creativity seems to be coming from the government side.

[Lord Beecham]

My Lords, I am not empowered to commit the Labour Party to a particular policy stance on this, although I find some of the arguments and options advanced by my noble friends quite interesting. What I do know is that the Conservative Front Bench walked away from joint-party discussions two and a half years ago, have done nothing so far about Dilnot and, by all the auguries that we are hearing, do not propose to do very much about it. We will see in due course, if and when we get some proposals that may come before the Recess.

In what has been a long—perhaps inordinately long—municipal career, my most rewarding period was when I served as chairman of the social services committee of my council for four years in the 1970s. We managed to transform the provision of social services, at that time including children’s social services, since hived off—in my view, perhaps rather unfortunately —in a way that would now be impossible, given the financial situation. This is therefore a matter that is very close to my heart and, of course, to the hearts of many others.

It is disturbing that, as we have heard from my noble friend Lord Warner and the noble Lord, Lord Best, the financial situation is deteriorating really quite rapidly in the face of substantially rising demand, produced in part by demographic change, and in part by the advance of medicine and care. Younger people with physical and learning disabilities are living longer and elderly people are living longer, and we must be glad of that but, as we have heard, it imposes considerable pressures on services and budgets. We have heard some of the data on that this afternoon.

It is often assumed that we are talking largely about the older population. That is not the case because younger people with learning disabilities are growing fastest in terms of numbers and in terms of the costs that have to be met to care for them. The Local Government Association’s projections are that the percentage of expenditure on younger people will rise substantially—indeed, more than for the elderly. The cost of care for that particular group is expected to rise by 42% by the end of this decade. As the noble Lord, Lord Best, has pointed out, that ultimately could lead to virtually the entirety of local authority budgets being devoted to adult social care of all kinds. In any event, the LGA estimates that if current demand, which is likely to develop, were to be met in full, funding for all other services would drop in cash terms, assuming a level playing field, by 66% or 80% over that period, so we are talking about a very large potential gap. The consequences of some of the savings that have been referred to by my noble friend and the noble Lord, Lord Best, are rather worrying. The financial pressures on providers of residential care are causing considerable difficulties.

Local Government Finance Bill

Lord Beecham Excerpts

Tuesday 3rd July 2012 Grand Committee

[Lord Tope]

My Lords, I suppose that I, too, should begin by declaring an interest. I am simply a councillor in the London Borough of Sutton. I am not a vice-president of anything, or at least not yet—I see that the noble Lord, Lord Beecham, is disappointed with that declaration.

I listened to the noble Lords opposite making the case, with which I am sure many in local government would have some sympathy. I think that all of us, on both sides, would wish to be a little further ahead than has proved possible. However, I suspect that as we will say time and again with this Bill, we are where we are now and we have to consider the question of postponement. My noble friend Lord Jenkin is right to draw a distinction between postponement of the business rate retention proposals and a possible postponement in implementing the localisation of council tax support, to which we will come later. There will be many in local government who have sympathy with what has been said on the other side of the Committee and perhaps more so when we get to council tax support.

As a councillor, I have thought quite hard about this in respect of my own authority and more generally. I do not support postponement. I would rather we were not where we are. Until relatively recently, it was expected that this Bill would be enacted by the end of this month but clearly that will not happen until much later. I hope that, in reply, the Minister will be able to give us a clear and firm commitment that by Report stage, in October, all that is required to be published will have been published, albeit in draft form. I take the point that until the Bill is enacted, it cannot be in an absolutely final form. However, if local authorities know all that they need to know by October at the latest, and I hope a little before that, and if the Minister is able to give a reassurance, I believe that most local authorities will share my view on business rate retention that we are so far down the road and there is so much expectation that this will happen—there has been so much wish that it should happen and we shall come to that later—that postponement now would not be welcome, particularly to me. I hope, with some confidence, that the Minister will resist these amendments.

[Lord Beecham]

My Lords, my noble friend Lord McKenzie alluded to some of the difficulties that surround next year’s council budgets, to which these amendments refer. In particular, he mentioned reserves and the uncertainty about the timetable, as well as general uncertainties that are leading councillors to take a more conservative view about the level of reserves that should be held. I declare an interest as a member of Newcastle City Council and as a vice-president of the Local Government Association, a position that I hope to share with the noble Lord, Lord Tope, as soon as possible. The president is here, so perhaps he can take that message back to the association.

In my council, we have been accustomed to running on a very modest level of reserves. The treasurer is concerned about the degree of uncertainties not only because of legislation and the general financial situation but also because of the growing number of outstanding valuation appeals in the commercial sector. Of course, that goes very much to the heart of what the business rate will deliver. It seems that these appeals are growing in number. The noble Earl, Lord Lytton, mentioned to me recently that they are taking about two years to be settled. I am not suggesting that the programme be held for two years, but it is an indication of the growing levels of uncertainty about what might ultimately be the yield, let alone about how the Government would handle the business rate when it is collected. In addition to that, a new category effectively of precepting authorities will arise in November when a handful of electors up and down the country will choose their police commissioners, who will have responsibility for 11% of the council tax. Clearly, that will relate to the business rate income. That is another element of uncertainty. In my submission, all this suggests that it would be sensible to ensure that the legislation is firmly in place, is absolutely clear and takes into account these other factors.

I suspect that we shall be debating at some length, as the noble Lord, Lord Jenkin, has pointed out, the position arising in relation to council tax benefits or council tax support, as it will be known, and the new systems that will apply. I would have thought that it would make more sense to take those together against the background to which I have referred, a background that the Secretary of State apparently referred to at the LGA conference last week, when he made what he described as a jocular reference to tackling councils’ reserves. By the word “tackling”, I take it that he means requiring that they should be used. Against the kind of uncertainties that we are talking about, such an approach would surely be highly risky and damaging.

I do not know whether the Minister is aware of quite what the Secretary of State said; if she is not, I would not ask her to respond at this point. However, I would be grateful if the situation could be clarified, perhaps by a letter to Members of the Committee—and perhaps wider than that, because it will also send a shiver up many a treasurer’s spine, on top of all the other uncertainties that we have. We will certainly be pressing hard for a deferment of the council tax benefit side, as it seems sensible for the system to change at the same time and not in parts, particularly given the other uncertainties that I have mentioned in relation to the amendments before us.

--- Later in debate ---

[Baroness Hanham]

My Lords, I am grateful to the noble Lord, Lord McKenzie, for introducing this amendment. Within it he raises some other points which we will come to later, particularly regarding the 50% retention issue, which is the subject of later amendments. However, I do not think that this provision is necessary. On a point of principle, the lack of a specific provision for making representations to the Government does not prevent anyone, or any authority, from doing so at any time. Nor do the Government need any particular legislative provision to be able to consider a representation. If an individual authority feels that it is in difficulties, it is perfectly entitled to come to the Secretary of State and say so.

Receiving and considering representations is a fundamental part of the Government’s work and the Government consider and respond to representations from members of the public and from local government every day. Representations constantly take place on local government finance, for example. I therefore do not think that we need this provision. I am not clear that the proposed new clause would bring any additional practical benefit to what will be an already transparent process, and I will explain why.

Under the rates retention scheme, the annual local government finance report will set out the tariff payments that individual authorities in the regime will be required to make to central government and the top-up payments that individual authorities will receive. There will continue to be an annual local government finance settlement and an annual local government finance report. A draft of this report will be shared with local authorities before it is laid before the other place. The report may be implemented only if it is approved by Members of the other place.

The Government intend to fix tariffs and top-ups at the start of the scheme and then link them in future years to the retail prices index. In future, the Government intend to fully reset the scheme only to reflect any reassessment of authorities’ needs, with the exception of the first reset period, at intervals of about 10 years to create the strongest possible incentive effect. I think that the noble Lord supports that view although he is concerned about individual authorities, but I think that I have addressed that point. In years where a reset does not occur—anywhere between one and 10 years—tariffs and top-ups will change only by RPI. At the very least, therefore, it will be clear to all, from the calculation of tariffs and top-ups in the annual local government finance report, whether a reset has taken place. It will be open and clear.

In practice, of course, we would expect to let local government know well in advance when the Government intend to reset the system. We have done this already by signalling the intention to reset the system for the first time following implementation in 2020. That is in seven years’ time. However, it remains the case that in any year, during the course of the debate on the annual local government finance report, Members of the other place would be perfectly entitled to ask the Secretary of State what representations he had received during the course of the year about whether it was appropriate to reset the system and why he had chosen not to act upon them.

Specific provision is not needed here for the Government to be held to account properly about resetting the system. It is an inherent part of the system through the transparent annual local government process. I therefore believe that the amendment is unnecessary and I hope that the noble Lord will withdraw it.

The noble Lord asked what would count as an exceptional circumstance. That is slightly difficult to see until you see it, although such a circumstance could arise if resources became significantly out of line with needs. The noble Lord asked me previously what the safety net will cover. It will cover situations such as a major company collapsing with the consequence that the business rate is wiped out. That goes back to the previous amendment, and I apologise for not picking it up.

I hope that the noble Lord feels able to withdraw his amendment.

[Lord Beecham]

Will the Minister look again at subsection (2) of the amendment to which she implicitly referred? The amendment would require the report in any year to refer to,

“any representations ... received from local authorities on whether it would be appropriate to re-set the system”,

and to the Secretary of State’s decision and the reason for that decision. The Minister rightly says that people could ask a question or a succession of questions about that. This amendment systematises that process so that it is clear and seen as an integral part of the annual financial report. I cannot see the difficulty in the Government accepting that it should be part of the information base to be considered alongside the whole of the rest of the local government finance settlement at the appropriate time. Would it not be more convenient for Ministers to do it that way rather than to have to reply to a succession of questions, perhaps over a different period, not necessarily tied in to the process of approving the report?

[Lord True]

I should declare an interest as the leader of a London borough and as a member of the leaders committee of London Councils. I hope that my noble friend will maintain the position that she has just set out. I was encouraged by what she said about not ruling out exceptional circumstances. I shall not weary the Committee with my rather unusual local authority, which will be a tariff authority, as I referred to it at Second Reading.

It seems to me that we have a very open system. In all the years that I have been following local government I have never noticed the noble Lord, Lord Beecham, being slow in coming forward to make representations either public or private. Indeed, many of us in local government have often been very grateful for those representations.

[Lord Beecham]

Could the noble Lord remind me of any that have been successful?

[Lord True]

I am sure that the noble Lord, Lord Beecham, was extremely successful in secret with that one Government with whom he had a good relationship once upon a time.

I do not wish to detain the Committee. I would simply say that surely the problem with a system like this one is that you will then have emulous enthusiasm, so that if the authority of the noble Lord, Lord Beecham, makes representations and they are going to be published in a report before Parliament, someone will come to me or to my noble friend Lady Eaton and say, “Why has your authority not made representations?”. So we will have lots of local authorities asking directors of finance to put in their representations so that they can be published and ticked off in a report to Parliament. I do not think that we should bureaucratise this too much until it seems, with experience, that the Government are suddenly not prepared to hear representations on the system. Then we can look at it. However, I think that there is a risk of overbureaucratising this and that it could be a make-work rather than provide a solution. I appreciate the intent with which it is offered but I hope that my noble friend will stick to the position she set out.

--- Later in debate ---

[Baroness Hollis of Heigham]

My Lords, I had not intended to come in on this part of the Bill; I was waiting for council tax to come up. However, the points made by the noble Lord, Lord Greaves, have triggered a set of questions for me. Does the department have a “who pays, who gains” outcome as a result of these changes? If so, can the Minister share that with us? I am very unclear.

I am delighted to see that the noble Lord, Lord Jenkin, has been converted from the error of his ways. Let me remind him that before the business rate was nationalised—I think it was the only thing that was nationalised under the Thatcher Government—authorities like my own, which were no longer unitary after the disaster of 1974, none the less received a business rate. This meant that those who lived outside the fringes of the city area and who did not pay the domestic rate, contributed through the business rate to the city’s well-being. This meant that a city could therefore serve as a regional centre while having only the property rate of a rural district council.

More important still, it meant that the leader of the council—myself—or the chair of finance would take great pains with the Chamber of Commerce. Every year, I went with a prospective budget, and it had a very direct influence over how we constructed our budget. As a result, until the nationalisation of the business rate under the noble Lord, Lord Jenkin, and as there was a direct pay-off to our revenues, I was willing to forego rateable value on new property; I was willing to invest in apprenticeship schemes; I was willing to do the environmental works, the roads and so on, to get small enterprises off the ground; and we were willing to help SMEs to develop through local enterprise trusts. We did all that because there was a direct pay-off. I could never understand the huge folly of a Conservative Government, which is above all expected to be business-oriented, cutting that link with the city authorities—admittedly, they largely tended to be Labour authorities at that time—which gave them an incentive to build their business.

After nationalisation of the business rate, the result was—I did the figures—that my local authority was contributing something like £14 million a year in business rate to the Exchequer and receiving back something like £7 million. The adjacent Conservative authorities, which did virtually nothing, were contributing about £2 million and receiving back about £4 million. In other words, they were piggy-backing off the flow of the nationalisation of our business rate to rural areas, because they had never had a concern to develop business in their areas, partly because they had high property values and did not want to be contaminated by it. It also meant that I no longer had any incentive to do something similar. I forgot to declare that I, too, am a vice-president of the Local Government Association.

I applaud this move, even if it does not go as far as I would like. However, I understand the need for an equalisation grant, otherwise Westminster would retain far too large a share and other local authorities would have very little. As a result, it will be really important for us to see what greater equity there will be now in terms of the statistics between who pays in and who gains and what the return is. Some authorities, such as my own, are district councils trying to do a unitary job with district council revenues—thank you very much to the Government for that—and they will be glad to have that money if it allows them to look after their business economy as well as the wider economy, in terms of building tourism and so on for the whole area.

For the sort of authorities that the noble Lord, Lord Greaves, mentioned, which may well need this money but may not receive it, there is a problem, too, of the distribution between those authorities whose money comes from small but highly valued premises—solicitors’ premises and so on—and those that have relied in the past on large physical premises such as factories, which are now closing due to the shift in the British economy. A reason for this request is that we were screwed the last time around and it was a disastrous policy for government, of whatever complexion, as well as for regional economies. I hope that this time around we will get a more equitable and sensible distribution. If the Minister can help us by promising to circulate some of these figures, it would be very valuable indeed.

[Lord Beecham]

My Lords, my noble friend Lady Hollis makes a very good point about the relationship between local government and business. It is interesting that the London Chamber of Commerce and Industry, in its briefing for today’s discussions, makes the point that more than a quarter of a century after the noble Lord, Lord Jenkin, perpetrated his terrible crime, 53% of London businesses apparently think that councils are currently responsible for setting the level of business rates. It says that that reveals a breakdown in communication between councils and businesses. Some of us might think that it simply betrays a complete ignorance of how local government works on the part of those who really should know a little better. However, that does not mean that the situation should not be improved.

I sympathise with the amendment tabled by the noble Lord, Lord Jenkin, because he seems, rightly, to want to rebalance this position. The Government seem to take a rather Augustinian position in respect of localism: “Lord, give them localism—but not yet”, would be one way of putting it. Another way, perhaps more familiar to the Secretary of State in his earlier days as an enthusiastic Marxist, would be to describe it as a form of democratic localism. Democratic centralism was the vogue under the Stalin regime but this is democratic localism, which is to say that all the orders come from on top and are then applied locally. This division certainly seems to portend something of the kind.

In a way, the game is given away by paragraph 9 of the statement of intent on business rates retention. Having previously said that a number of “specific grants”, which I will mention in a moment, will be included in the business rates system, that paragraph goes on to say:

“As a result, the Government is able to set the local share at 50% which delivers our objectives on growth and localism while allowing for future fiscal control to protect the interests of the taxpayer and the wider economy”.

That is a fairly clear statement that the Government are seeking to use this 50% as a controlling mechanism.

--- Later in debate ---

[Lord Beecham]

My Lords, not having had at the forefront, or indeed at the back, of my mind details of Schedule 8 to the Local Government Finance Act 1988—or indeed Schedule 7, if that be the correct schedule—I am obliged to the noble Lord, Lord Best, for having explained what was to me, frankly, an unintelligible amendment, but it is entirely intelligible now. I find myself in the odd position of already having spoken to it, in a sense, because I addressed some of the same issues and used some of the same terms as the noble Lord, Lord Best, when I spoke to an earlier amendment. I share the concern about the temptation to incentivise what the noble Lord described as new rateable floor space rather than enhanced rateable values. To that extent, I support the thrust of his argument.

However, I am less convinced about some of the other aspects. For example, massive taxpayer investment in Crossrail will presumably generate increased rateable values in the authorities in London that it will serve. Many of them are quite deprived authorities, so in one sense that is a good thing. On the other hand, that was not a decision of those authorities; the decision was taken by central government, funded by all taxpayers, including those in equally deprived parts of the country such as the one in which I live. The London chamber, to which I and the noble Lord referred, was right to say that authorities should be rewarded and incentivised for the decisions that they take. It is not necessarily appropriate that they should benefit significantly from an increase in business rate generated by taxpayers in the way that, for example, Crossrail might be argued to have induced. Presumably, it will take some time for that to happen.

I am also slightly concerned about the basis on which the claim is made that effectively we should be looking at a rise in rental values. I am not an expert in the property market but at the moment I anticipate that, although there are some exceptions, there is no great buoyancy in the commercial property sector. Many of us see empty shops, offices and factories. In my city of Newcastle we have seen the closure of one significant employer in a very modern factory in one part of the city, and we are seeing the almost certain closure of engineering works in an enterprise zone, for which the noble Lord, Lord Jenkin, was originally responsible—I give him credit for that. It was formerly Vickers and is now BAE. It will close with the loss of many jobs and the site will come on to the market. To put it mildly, I think that the anticipation that rental values will rise in the foreseeable future is incredible. It does not seem to me to be a firm basis on which to base these calculations.

Therefore, there is something in this argument—particularly the points that the London chamber raised—about trying to connect the reward to the positive actions of an authority. The converse is that an authority should not be penalised for things beyond its control when the rateable value falls, either because of general economic effects or because of an impact on general levels, leading no doubt to appeals against valuations. I have no doubt that the noble Earl, Lord Lytton, would be able to elucidate on the kinds of effects that might develop.

Therefore, the Committee needs to look at how we can tie the incentivisation to the actions of the local authority in the broad sense that the London chamber and the noble Lord and I referred to earlier—with investment in infrastructure and particularly skills and training, as well as, depending on the circumstances, community safety or other features in the local economy—rather than rely on the actions of the national Government or their agencies. The Highways Agency can transform a situation in certain areas, just as Crossrail might have done, and perhaps other bodies would have the same function or effect.

I take it that the amendment is from the Local Government Association, from which we have heard so much this afternoon. Some of us should go back to the LGA to explore this issue in greater depth to see whether we can come up with something more related to the activities of its members. I should be interested to hear the views of the Minister. I do not know whether the noble Earl, Lord Lytton, proposes to speak on this part, but it would be very interesting to hear his comments on these points, which relate very much to his professional expertise.

[The Earl of Lytton]

My Lords, with that invitation I had better rise to my feet. First I should declare an interest that I have not declared previously and probably should have done—that I have a small involvement with a local chamber of commerce, although I do not know that it especially informs this bit of the debate.

The noble Lord, Lord Best, mentioned a very important factor—that the constant incremental renewal and upgrading of our infrastructure and townscapes, as I believe he was chiefly referring to, is directly related to concepts of added value and therefore has wider application. The confidence to invest in such schemes is clearly dependent on certainty of outcomes. I said previously, on Second Reading, that I was concerned at the lack of certainty of outcomes. Like all uncertainty, it adds to risk and is a highly corrosive factor in getting good levels of net present value, to use valuer-speak.

The Bill’s laudable intentions are to a large degree overshadowed by some very difficult times, with the possible exception of central London. That colours everything, including the way in which these schemes can be financed independently and the sort of risks that you can afford to take with taxpayers’ money, if you are not financing them through conventional means. That obviously applies to central government just as it does to billing authorities and local authorities. My concern is about the migration of commercial floor space to other uses; I refer in particular to losses to residential uses. That may be the only certain outcome that delivers a sufficient return on capital invested to justify the financing. We live in the real world where finance is very difficult. Even if you have retained finance because you are a larger company, unless you can make a robust case to your finance director and the other key decision-makers, it is not going to go ahead. Things which are slow and drawn out and which have long timescales all add to the risk, even if there are no other issues.

I know that the coalition has tried to make sure that the planning process is simplified. None the less, as I mentioned on the earlier group of amendments, there are sufficient uncertainties with all the boxes that developers have to tick. Many of these boxes have to be ticked up front and much of the ticking process costs real money up front. That is the problem that the real commercial world faces. I do not see how the classic role of government, which is to intervene in circumstances of market failure, can be shifted from central government, effectively backed by the political backcloth with central government resources and finance. I do not think that you can move that intervention to overcome market failure to a local government scenario. It will not work. The whole thing is too complicated, the finance is too tight, and matters are too uncertain.

The noble Lord, Lord Beecham, referred to Crossrail, and of course there are other large infrastructure schemes across the country on a wider scale. One thinks of HS2, the high-speed rail system. Many of these create blight. Although in the long term they are considered to bring benefit, they create short to medium-term blight of the most acute nature—in other words, people are unable to sell their properties and business premises are unlettable and so on. This, too, has a highly corrosive effect but, as I see it, it is not in the gift of local government to deal with these large-scale issues of blight.

The real question goes back to what the noble Lord, Lord Best, was asking: how do we deal with the necessary incremental improvements to and upgrading of our infrastructure without this driver of a commercial outturn? In a sense, the commercial outturn is there because value and satisfaction are added. More trade may be brought to an area. For instance, if it is a seaside town the number of beds let per annum in lodging houses and hotels may increase. There can be all sorts of things that go with that. However, it is a slow and diffuse process, and that means that the benefit is not sufficiently directly connected to the investment for the authority to claw that back. It is not a bankable benefit in the authority’s hands, and that is where the disconnect arises.

It may be that this whole consideration goes much wider than the context of the Bill. However, we are transferring duties and powers and supposedly finance streams to local government, and I think that it is right to consider this issue in its wider context. At the beginning of this afternoon’s proceedings, I mentioned that it is part of the backcloth in which we operate. I certainly hope that the Minister will be able to give some comfort that the cause and effect—in other words, the risks and costs of investment and the returns that can be gained from it—will be better looked at and better managed, even if they cannot be dealt with through the business rate retention scheme. There need to be other ways in which this issue is dealt with; otherwise, we will see areas going into wholesale decline with a considerable loss in values and, with that, risks to the loan books of the mortgage sources that have lent against those investments, as well as risks to the whole financial structure. We do not need to do that. Once we start going down that road, huge perils lie there. We really need to make this constant investment in order to make sure that that does not happen. We have to move forward; there is no stand-still position.

--- Later in debate ---

[Lord Best]

My Lords, I am grateful to the noble Lords who supported this difficult but fundamentally important amendment. I thank the noble Lord, Lord Palmer, and the noble Earl, Lord Lytton. Perhaps I might respond briefly to the noble Lord, Lord Beecham, by saying that the objections he raises—first, that some places would get a windfall and might not deserve it and, secondly, that some places will see a fall in rental values and therefore of rateable values and income—did not strike me as undermining the case here. Major infrastructure projects require people to buy into them; to accept that Crossrail will come through town, or whatever the big issue is. It helps if there is some financial return to that area for the inconvenience that can elapse, perhaps for several years, when major infrastructure projects come through. However, this amendment is not of course specifically addressing that but addressing the upgrading of a particular part of town by the efforts of the local authority. That is the principal objective.

In relation to the noble Lord’s second point, that some areas may see a fall in values—that factories may close and nothing may happen—this amendment is intended to provide local authorities with a greater incentive to prevent that and to do something about it. If the council makes the area much better for customers to come to and for offices to recruit staff to work there, and if it does some good for the area, that is surely good for the local economy and can revive and regenerate a place. However, if councils have absolutely no incentive to spend that money in times of difficult resource allocation for them, it would seem most unlikely that local authorities would put their backs into trying to drive some business improvement and growth in those places. It strikes me that this amendment still has some heart to it. The technicalities have completely escaped me along the way and I would be very grateful if I could take up the Minister’s offer to explore whether or not her response was helpful.

[Lord Beecham]

Perhaps the Minister would also like to consider that question. I come back to the point that the noble Lord, Lord Best, has just made. I have a fair amount of experience in this area of regeneration. When I was leader of my city council, we had two quite different propositions. The first was, initially, to start developing along the riverside in Newcastle and to take advantage of the then Conservative Government’s enterprise zone. It was developed as a business park and we helped an engineering company, Michell Bearings, to move into a new factory. That factory was modern and all the rest of it but, 20-odd years later, it has closed. There is nothing much we can do to get it reopened. It is in an enterprise zone and has that attraction, for what it is worth. It is close to a bypass, which we would like the Highways Agency to do something about but cannot.

Against that, when we were faced with another aspect of enterprise zones, the development of an out-of-town shopping centre, we worked very closely with local business to promote the existing shopping core in Newcastle, just as other authorities did when faced with similar problems. That is one case where we can and did do something by responding to a downward pressure on business. In the other case of the closure of that factory, and indeed of another which we had always supported in another part of town, there is very little we can do. That, it seems, is the dilemma: we could find by accident or design that a substantial benefit is going to areas which have contributed nothing in the way of policy at all, let alone investment, towards the creation of value which they will get not just in the form of a 50% share of the rates that accrue but as the full amount. That is the point. Subject to the tariffs and all the rest of it, there is to be a retention, is there not, of the growth in business rate and not just the core rate. That could be quite accidental, and the product of other people’s decisions to which the local authority may have made no contribution at all. The consequence in the system as a whole is that it could widen disadvantage between one area and another. That is the point that we need to explore further. I have said enough and I leave it at that.

Employment Tribunals Act 1996 (Tribunal Composition) Order 2012

Lord Beecham Excerpts

Wednesday 28th March 2012 Lords Chamber

[Lord Scott of Foscote]

My Lords, perhaps I might say a word or two about the second Motion moved by the noble Lord, in particular the statement of reasons.

I was astonished to learn from the noble Lord, Lord De Mauley, who took the time to come and explain the position to me, that the statement of reasons was only an adjunct to the introduction of a right to claim for unfair dismissal. It was thought desirable to have a statement of reasons so that the employee subject to the dismissal would know what the reasons were and could have some record on which he could base his opinion as to whether he should bring a claim for unfair dismissal.

I had supposed, maybe naively, that it would be regarded as good management practice for employers to give reasons for dismissal, particularly to young employees, for whom this had perhaps been a first job, and those who had previously been long-term unemployed. With those reasons, they could modify their behaviour if they were lucky enough to obtain alternative employment, or they could go into some other occupation if they thought that there was some insuperable barrier to their success in the job from which they had been dismissed.

The noble Lord explained to me that the introduction of a one-year period before the right to reasons for dismissal arose was tied to the one-year period that was the condition for being able to bring a claim for unfair dismissal. The two ran together. He explained that if the condition for bringing a claim for unfair dismissal was to be raised from one year to two years, so too the right to have reasons for dismissal should be raised from one year to two years.

I find myself in some difficulty in accepting that the right to reasons for dismissal should be tied in that way to a claim for unfair dismissal. I should have supposed that it would be good management practice and, moreover, a matter of common courtesy for an employer to inform an employee why they were being dismissed. The notion is that a young person could be taken on as an employee, perhaps in his or her first job, and after six months—that is the position now but 18 months would be the position if these statutory instruments come into effect—be dismissed without being given any reason whatever for the dismissal. It is astonishing that that could be regarded as acceptable management practice.

Acceptable management practice would be to provide reasons to an employee who was being dismissed, particularly if it were a young person or a person who had been long-term unemployed and was working his or her way back into employment habits. I respectfully disagree with the part of the Motion that attacks the proposition that the time period for getting a statement of reasons for dismissal should be raised to two years. I would want greater justification than has yet been offered for requiring a two-year period before a statement of reasons for dismissal can be obtained. It should, as I repeat—I am afraid that I have repeated it more than once—be regarded as good management practice for an employer to tell an employee being dismissed why he or she is suffering that fate. For those reasons, I support the second amendment.

[Lord Beecham]

My Lords, I support my noble friend’s amendments, if only because the Government’s policy seems to be based on a myth; namely, that in this country our labour market is more regulated than those of our successful competitors. It is a myth comparable with that of the compensation culture, which has been used to justify some of the changes under the Legal Aid, Sentencing and Punishment of Offenders Bill, which limped through the House last night at the end of its Third Reading.

I want to comment briefly on two aspects of the Motions. First, on the composition of tribunals, the Explanatory Memorandum to the statutory instrument records:

“The Government accepted that some unfair dismissal cases can be ‘fact heavy’ and that the input of lay members can be beneficial. But evidence and consultation responses (including from some judges and some lawyers/law firms, and in particular from business) suggested that for those cases which revolve essentially around questions of fact rather than any complex legal point, Employment Judges are competent to deal with an assessment of the evidence against established legal tests and criteria without the need for lay members”.

The inference to be drawn from that note is that there are cases in which there are complex legal points. In those circumstances, how do the Minister and the Government justify taking out of the scope of legal aid and advice, employment law tout court, which is essentially the position except in relation to discrimination cases? It is clear that there are a proportion of cases in which legal points arise; hence, the justification for the change that the Government propose. However, they do not balance that by allowing legal aid and advice to those appearing as complainants in those cases.

Secondly, I wish to touch on the point made by my noble friend Lord Borrie and the noble and learned Lord, Lord Scott, about the statement of reasons. I sympathise very much with the noble and learned Lord and feel that a statement of reasons for dismissal should be given at whatever point an employee is dismissed but for an additional reason, apart from those advanced by him. If you are dismissed and have to seek another job, it would be helpful to be able to demonstrate that your dismissal was not related to any inadequacy or misconduct on your part, if such were the case, but, for example, arose because there was insufficient demand for continued employment in the firm in question or for some reason not related to the person being dismissed.

The Government’s proposals mean that, for the first two years of employment, no one will have the benefit of such clearance to demonstrate to another employer that he is in other respects perfectly fit to be employed, subject to the employer’s own requirements. Particularly in the conditions of the present labour market, that is something to be deplored. For those reasons, in addition, I strongly support the amendments in the name of my noble friend.

Localism Bill

Lord Beecham Excerpts

Monday 17th October 2011 Lords Chamber

[Lord Beecham]

My Lords, I am pleased to see that the noble Lord, Lord Newton, takes the same attitude to temptation as St Augustine did to chastity. There is another line about temptation that we might want to consider:

“The last temptation is the greatest treason:

To do the right deed for the wrong reason”.

It seems that this amendment is in fact the other way round: it is doing the wrong thing for the right reason, potentially.

I noticed the typing error that the noble Lord, Lord Greaves, referred to in subsection (2)(a), but I think there may be another typographical error, or perhaps an error in drafting. Subsection (5) says:

“A community governance review … shall have a presumption that a new parish will be created”—

and I will come back to that point. Subsection (6) goes on to say:

“The provisions of this apply only insofar as they do not prevent action being taken on the request made under this section”.

It is not clear to me what that means. Does it mean the provisions of the previous subsection, or does it mean the provisions of the whole clause? I am at a loss to understand what that implies.

However, I agree very strongly with the noble Lord, Lord Newton, that there is no case for there to be a presumption that a new parish should be created on the simple fact that a request has been made by a neighbourhood forum that might constitute 21 people, of whom a majority of 11 against 10 would therefore trigger not only the whole process but a presumption as to its outcome. It seems a ridiculous proposition given that we are presumably talking about areas of several hundred people, if not thousands of people, possibly, in an area the size of an urban ward or a significant rural community.

The clause also requires the commencement of a review within three months. That might be all right if there was to be one review, but supposing there was a rash of applications from these neighbourhood forums, is a local authority obliged to commence reviews on all of them in that timescale? It does not seem at all realistic. There certainly should be a method of facilitating a legitimate demand—or a widespread demand, let us not prejudge the issue—for the creation of parish councils or town councils. They have a perfectly proper place in our system of local government and that should be facilitated, but this clause really goes much too far in that direction.

Nor is it the case that, once created, all of these bodies are trouble-free. Your Lordships will be aware, from the debate about the standards boards and the need for codes, that most of the complaints that arose under the existing procedure actually came from parish councils. The noble Lord, Lord Shipley, who is not in his place at the moment, will no doubt have told your Lordships of the case in Newcastle where a council inherited three parishes on local government reorganisation, and one inner-city area opted for a parish council. That particular grouping did not seem to perform very effectively, to the extent that Councillor Shipley’s colleagues in his political group decided that they would go in and in effect take it over, which they did—by perfectly legitimate democratic means, I should say. These places are not without their problems, although they can certainly contribute to an enriched local democracy.

However, there is one other issue in which, again, the drafting is perhaps defective—certainly it raises an issue—and that is subsection (2), which says:

“A request may be made to create a new parish council for … the area of the neighbourhood area together with the area of an adjacent parish council”.

Is it not conceivable that there may be more than one existing parish council? Certainly there are contiguous parish councils in my authority; there will be in other authorities, particularly urban authorities, I suspect. You may well find a community between the two wishing to align with both rather than one, and creating an entirely new structure. For a variety of reasons, I suspect I may find myself—unusually—agreeing with the Minister when she replies and, I hope, says that she may want to take this away and look at it, but that she cannot agree the amendment as it stands. Certainly that would be my position.

[The Earl of Lytton]

Before the noble Lord sits down, perhaps I may ask him if he would comment on the fact that although it is true that parish and town councils provide a disproportionate amount of the subject matter for standards committees, it is also true that because there is no other body of a sort which has recourse to a committee dealing with standards, there is no other basis to judge whether that statistic is large or small, or whether it is characteristic of dealing with community affairs. What I am trying to get at is that it is perhaps not a specific criticism of parish councils as a construct.

--- Later in debate ---

[Lord Beecham]

My Lords, I do not know about other noble Lords but, having heard the noble Lord speak to his amendments, I find myself more confused than I was when I read them. Therefore, it is an extremely good idea that these matters should be taken away and discussed further and perhaps enlightenment will dawn on me by the time we get to Third Reading. However, I agree with the noble Baroness and the noble Lord, Lord Best, that if we can avoid a plethora of unnecessary referendums, so much the better. In that light, I would be happy for the Minister to consider the matter further and for it to be perhaps slightly reshaped at Third Reading.

[Baroness Eaton]

My Lords, I declare an interest as a vice-president of the Local Government Association, which has offered its broad support for the neighbourhood planning reforms. Indeed, a lot of the thinking on the reforms has come from the innovative and creative local planning schemes which councils have introduced over many years. I do not know of a single council that does not want a more flexible and consensual planning system—indeed, the most consensual possible—and common sense tells us that this benefits communities. The Government have made great strides forward, shredding down the national planning policy framework and confirming that residents will be firmly at the heart of local developments. However, within these new parameters we need to ensure that the planning system can move as fluidly and quickly as possible. I hope that this amendment, to which I am happy to attach my name, clarifies that in certain cases referendums on planning issues might be locally appropriate, as we have heard. The noble Lord, Lord Best, said that discussions with the Minister have suggested a mechanism whereby, if there is consensus, this process will go straight ahead without a referendum. I think that would be well received.

The Local Government Association has estimated that the cost of holding a local referendum on a planning issue will be in the region of £5,000. This is a very significant figure when you consider the sheer number of referendums that could take place around neighbourhood planning issues. It would not be a case of a one-off cost of £5,000 as many costs would arise for local authorities. When the public sector, particularly local government, is so tightly squeezed, that hardly seems a wise use of public resources and public money. I share the request of the noble Lord, Lord Best, for clarity. We would all be much happier if this process was made much simpler and referendums were rarely used in neighbourhood planning. Certainly, councils across the country would support that. I support the noble Lord, Lord Best.

Localism Bill

Lord Beecham Excerpts

Monday 17th October 2011 Lords Chamber

[Baroness Gardner of Parkes]

My Lords, I should like to clarify that I am not speaking about what I would call a repeat amendment, where someone is coming back for another planning application; I am speaking purely about cases where someone has built premises in contravention of the planning permission they have been granted.

This has happened to me in both London and the country. I supported the application in the country, only to find that an extra metre and a half had been built on a wall, cutting off totally our view of the village green, which was a very pretty part of the place. When I rang the council to ask why nothing had happened about this, they said, “Oh, we gave him retrospective permission for it”. The same happened in London, where I actually phoned the council during the construction and said that it was not being built according to plan. “Oh of course it is”, they said. Eighteen months later the council came back and said, “You’re quite right, it was not. However, we felt that as people had already moved into it, we should give them retrospective permission”.

This is quite unfair to people who have a right of legitimate comment on the original planning application but have no idea when the council is considering a whitewash for something that should not be. That is the purpose of the amendment. I beg to move.

[Lord Beecham]

My Lords, I would have thought that this amendment is unnecessary. If an application for retrospective consent is a fresh application, it would, or should, be notified to those occupiers—not necessarily those who objected before, who might be living anywhere. However, surely it should be treated as an application de novo, and therefore the normal processes would apply. So those affected on a retrospective application would receive notice. I should think, unless the Minister disagrees, that the amendment is otiose.

[Lord Shutt of Greetland]

My Lords, I believe that the noble Lord is right on this. I thank my noble friend Lady Gardner of Parkes for bringing this forward. It is important that we get this absolutely clear. This word retrospective largely means that something happened for which there was no permission. Someone spots it and says, “Look here, you’d better put in a planning application”. That’s the position. In all instances where there is a change, there are requirements in place for local planning authorities to publicise and consult on those applications—that is, the retrospective ones. This is true when a new revised planning application is submitted, and where the holder of a planning permission wishes to delete or vary one or more of the conditions to which their existing planning permission is subject. The Government therefore believe that this amendment is a solution to a problem that does not exist. I hope that my noble friend will feel able to withdraw it.

--- Later in debate ---

[Lord True]

My Lords, I was not able to be present for this discussion in Committee. I would like to associate myself very strongly with the remarks made by both my noble friends because they are good localist arguments. Having campaigned in all integrity on the basis of the promises that were put forward by my party in respect of a community right of appeal, like many colleagues in the Liberal Democrat party I remain in a state of puzzlement as to why this worthy and desirable policy, very sensibly circumscribed in the amendment spoken to by my noble friend, has disappeared. It is something that some of us will want to return to on a future occasion, and I hope sincerely that the leadership of my party and that of my fellow party in the coalition will think again on this matter.

[Lord Beecham]

Heaven forfend that I should trespass on the griefs of the coalition about unfulfilled promises. It is already late enough and one could go on for many hours about unfulfilled promises, but I shall resist the temptation.

We cannot support either of these amendments. There is a balance to be struck between what is purely local and where there are other considerations which might well be of significance in regard to major areas of public policy, including that to which the noble Lord, Lord Reay, refers and about which he is exercised—it is right that he should be, if those are his views. There is a legitimate role for the Secretary of State to determine, at any rate, some appeals beyond those which the amendment would refer.

The amendment in the name of the noble Baroness, Lady Parminter, in addition to the general principle, also creates difficulties. A community right of appeal is an arguable proposition. Whether a community right of appeal could be said to be legitimately exercised by,

“a ward councillor for the area; … any parish council covering or adjoining the area of land to which an application relates; or … any overview and scrutiny committee for the area”,

as proposed in new subsection (2B) that Amendment 232ZB would insert into Section 78 of the 1990 Act, is indeed arguable. I cannot see that those matters are a very persuasive definition of a community right of appeal, even assuming one was in favour of a community right of appeal, which, on balance, I am certainly not—whatever the coalition parties thought they were going to implement.

In these circumstances I offer once again an unusual degree of support to the Minister if he declines to support these amendments.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have spoken. I should like, first, to respond to Amendment 232ZB in the name of the noble Baroness, Lady Parminter, because it helps to set the scene. The amendment intends to give a new right of appeal for local councillors. Before going into detail it would be useful to start by setting out what we are seeking to achieve in the reforms and how communities can shape the area in which they live. The purpose of our planning reforms is to put the local plan at the heart of the system. In fact, the draft national planning policy framework explicitly says so. It is the plan where councils and communities weigh up and integrate different goals and long-term needs so that it sets the framework within which individual planning applications are assessed and decisions taken. We want planning decisions to be taken by local communities, not more appeals undertaken by unelected inspectors in Bristol.

Everything that we are currently undertaking in the Bill—removing unelected regional structures and the top-down targets which constrained local councils, stopping inspectors arbitrarily rewriting plans without a council’s consent and removing unnecessary central government monitoring regimes and interfering in local timetables—gives control, choice and responsibility for local planning back to councils and communities. Other reforms which introduce neighbourhood planning and ensure appropriate consultation with local people before proposals are submitted have also been to that end, so that local people will, in future, have a real say. They will encourage developers to work with the local community to develop proposals all can support, rather than setting them against each other.

Given this, I have considerable sympathy with the noble Baroness’s intentions here. She desires, as I do, to ensure that local communities and the plans agreed between them and their councils should remain at the heart of planning decisions and she is concerned that, in some cases, that does not always happen because of the way the system works. I do not think that her amendment is a solution here. We consider that this would risk adding unnecessary uncertainty and delay at this crucial time of recovery and growth. Applicants will have invested considerable time, money and effort in preparing their proposals and should expect a council’s decision to be a corporate one. However, I recognise that there are issues that we need to address.

First, I understand that local councils have often felt pressure to approve applications which have not been consistent with the plan. One reason is that officers may advise elected members that if they do not approve development, even where it is outside the plan, they may lose at appeal and have to pay costs. Therefore I can reassure the House that we will revise the costs award circular which governs this process so that where a council refuses a development proposal on the grounds that it is contrary to an up-to-date development plan and there is no issue of conflict with national planning policy, there should be no grounds for an award of costs against the council in question.

Secondly, in some cases applications are made and approved which fall outside the development plan. This is an important flexibility in the system. However, we must also be clear that if an application is outside the terms of the plan it should be approved only if locally elected representatives have considered the views of the local community and concluded that such a departure would be acceptable in planning terms. For this reason, we will consult on requiring departure applications to have compulsory pre-application consultation with the local community so that elected members are fully aware of local views before they decide an application. This will mean that local councils will have a clear understanding of local views when they deal with key applications, should have no fear of costs being awarded against them when they have followed the right procedures and will be able to decide cases in the long-term interests of local communities. These changes to the system will strengthen its resilience and ensure that our reforms achieve their objective of putting the local plan and the views of the local community at the heart of the system.

I pay tribute to the noble Baroness, Lady Parminter, for raising these issues so vigorously. By doing so, she has done a service to the House. Given our proposals to strengthen community influence and the involvement in planning as a whole, which I have outlined, I hope she will agree that our measures are strong and effective ways to ensure that community views are heard in the process, especially where a development might depart from an up-to-date plan, and that she will not press her amendment.

Turning to Amendment 232ZA, as the noble Lord, Lord Reay, said in Committee, planning is a matter of getting the balance right. I agree. We are committed to a system of fewer appeals and want development proposals to be determined locally. However, in the few cases where appeals are made, the Secretary of State, as decision-maker, must be entitled to take other material considerations into account, as can councils, on finely balanced matters of judgment—for example, where a local policy is out of date because it does not reflect the changing circumstances of the local area or more recent national policy. In such instances the law allows councils to consider other material considerations in making the right decisions for their communities. They should not be restricted and neither should the Secretary of State’s decision be fettered. Amendment 232ZA would therefore be unduly restrictive in this regard.

However, I understand the intention behind the noble Lord’s amendment. We shall take the measures that I outlined earlier so that councils and communities feel confident, if challenged at appeal, in defending planning decisions made in accordance with an up-to-date plan and where there is no conflict with national policy. I reassure the noble Lord that judicial review proceedings can already be brought if a decision was unlawful or due process was not followed. I hope therefore that he will be willing to withdraw the amendment.

--- Later in debate ---

[Lord Jenkin of Roding]

My Lords, my estimate as to when we would reach the end of Report took me up to midnight, so I reckon that I have 25 minutes in which to speak. Like my noble friend Lord Attlee, I have two speeches. One was a very short speech which said, “I think this is a good idea”. The other one was a rather longer speech which said, “I think that this is a very good idea”. The Explanatory Notes to the Localism Bill estimated at paragraph 491 that the charge to local authorities would amount to £21 million per annum. I have seen an estimate of the net value of all the changes in the Bill as having a range of between £20 billion and £35 billion. There have been changes and many amendments to the Bill. However, local authorities are worried that they will still have to meet expenses substantially in excess of the Government’s estimate of £21 million. The purpose of this measure, which is not, of course, a full post-legislative assessment—I have no doubt that the Government will want to do that anyway—is to place a very firm date on when there should be an estimate of the actual costs that will be incurred by local authorities.

I have here a three-page speech but I will not read it out. However, it seems to me that given that so much of this Bill has affected the way that local authorities are to carry out their duties, it is only fair for the Government to be prepared to have that estimate examined so that there can be a proper assessment of what local authorities have to pay and what will otherwise fall on council tax payers. I will read no more of my speech but I think this is a very just proposal which is supported by the local authorities. I beg to move.

[Lord Beecham]

My Lords, it is fitting that the noble Lord, Lord Jenkin, should effectively conclude Report stage after his many distinguished contributions to the Bill’s proceedings thus far and, indeed, his previous very substantial record in government. I have a couple of questions. I entirely endorse the thrust of the noble Lord’s amendment. I hope that it will be acceptable to the Government. This is more a matter of process. We are not entirely clear how the new system of post-legislative scrutiny will work and what pieces of legislation will be included in it. I hope that this will be one of them. I do not know whether the Minister can indicate whether that is so but in any case it is understood from the impact analysis that the Government intend to draw up the finer details of the review methodology in the months ahead, as they put it. Since the relevant document was written some time ago, that will presumably be done through a soon to be formed Localism Bill review steering group. Has such a group been formed or will it be formed? Who will be involved in it if it has not already been set up? When is it likely to report? How will it work? These are the crucial procedural questions. The noble Lord, Lord Jenkin, rightly refers to the financial aspect and we entirely endorse the view that as this will effectively be a new burden on local government, it will presumably be within the new burdens doctrine. It will be good to have an assurance on the record that any additional costs of that kind will be met by central government.

[Lord Shutt of Greetland]

My Lords, Amendment 249 would mean that the department has to produce a post-legislative impact assessment setting out the additional expenditure incurred by relevant authorities as a direct consequence of this Bill. An established process is already in place for post-legislative scrutiny of Acts. As set out in Cabinet Office guidance, departments are required to submit a memorandum to their departmental select committees three to five years after Royal Assent of an Act. This memorandum sets out a preliminary assessment on how the Act has worked out in practice, relative to objectives and benchmarks identified during the passage of the Bill.

In addition, each of the individual impact assessments for the specific policies in the Bill is accompanied by a post-implementation review plan. The amendment to insert a further requirement to produce a post-legislative impact assessment is therefore unnecessary. Inevitably, putting the provisions of this Bill into practice will mean local authorities taking on some new responsibilities. However, the Government are committed to ensuring that any additional burdens on councils are funded in accordance with the new burdens doctrine. The impact of the Bill has been assessed in the usual way, and the necessary funding will be made available.

I regret that I am not cited on the localism group referred to by the noble Lord, Lord Beecham. Obviously, I shall have to drop him a line on that point. I hope that my noble friend Lord Jenkin will feel able to withdraw his amendment.

Localism Bill

Lord Beecham Excerpts

Wednesday 12th October 2011 Lords Chamber

[Baroness Hanham]

The Bill currently provides for the revocation of the eight existing regional strategies outside London and any remaining county structure plan policies saved as part of the transitional arrangements following the Planning and Compulsory Purchase Act 2004.

Government Amendments 203M, 203N, 203P and 203Q provide the Secretary of State with the power to revoke the existing regional strategies and saved county structure plan policies by a free-standing order-making power. Amendments 203S, 203T, 248ZD, 248ZF, 248ZG, 248ZH, 248ZJ, 248ZK and 249F are consequential amendments. These are largely technical amendments that will provide the Secretary of State and Parliament with an opportunity to consider the environmental assessments of the revocations that we are undertaking before decisions are made on whether to revoke the existing regional strategies and remaining saved structure plan policies.

The Government intend to lay orders in Parliament revoking the existing regional strategies and saved structure plan policies as soon as possible after Royal Assent of the Bill, subject to the outcome of the environmental assessment process. In the mean time, councils should press ahead in preparing up-to-date local plans. These plans will be important in defining strategic priorities and setting the context for neighbourhood plans. Up-to-date local plans also provide councils with the opportunity to control how development and growth are planned in their area and they provide the basis for planning decisions. Until they are revoked by order, local plans must be in general conformity with regional strategies which remain part of the development plan.

Amendment 204E is a technical amendment that closes a loophole to ensure that the local plan meets the statutory requirements and is sound. This is an important amendment, otherwise councils could adopt a local plan without complying with the duty to co-operate. I beg to move.

[Lord Beecham]

My Lords, I was taken with the Minister’s venture into the area of astrology earlier. However, I think she called herself a “Librarian”. I think a librarian is someone who works in a library. I think she meant “Libran”, which is rather different. I hope she will forgive me if I assume the role of a scorpion when we look at this amendment, as Scorpio is my astrological sign.

I am slightly puzzled by the explanatory letter that the noble Baroness circulated a couple of days ago. Perhaps, in her reply, she will be kind enough to elucidate it further because the letter refers to,

“an environmental assessment of the regional strategy”.

I am not sure what that means. Are only the environmental aspects of regional strategies being assessed? Could she explain how the process of assessment is taking place? The letter also says that this is on a “voluntary basis”, which I take to mean that it is a non-statutory exercise and that the Government will be consulting on these documents shortly. I do not know whether those documents are yet available or, if so, where they might be obtained, but I would also be grateful if she could indicate the nature of the consultative process. For example, we now have local enterprise partnerships, so will those partnerships be consulted? I assume local authorities will be, but one could also assume that those partnerships would be involved in all that.

Like other Members of your Lordships' House, I regret the demise of all the regional development agencies, although I accept that in some areas they were not particularly effective or popular. However, I suspect that we may see, just as in health, the quiet restoration of something rather similar—perhaps more at the sub-regional level, but no doubt under another name. I hope that the Minister will be able to confirm that that approach of looking at sub-regions will be part of this assessment and will also take note of some of the other developments in policy over the past few months; for example, the creation of enterprise zones and the operation, such as it has been, of the regional growth fund. These matters are clearly relevant to the planning regime, but it is not clear whether and to what extent they will be part of this assessment.

This group also refers to the position of transitional arrangements. The noble Lord, Lord Best, will no doubt be speaking about that, and I do not want to anticipate what he will say, but I strongly support the terms of his amendment because there is a considerable danger of a gap which would create difficulties in the light of the arrangements that the Bill contains. I hope the Minister will consider sympathetically the amendment that the noble Lord will, no doubt, move shortly. I would be grateful if the Minister could clarify, if not today, then subsequently, the questions I have raised.

[Lord McKenzie of Luton]

My Lords, like my noble friend I was puzzled by this group of amendments, and I hope the Minister can help us on a range of points. This seems a further twist in the saga of regional spatial strategies. The Secretary of State sought to do this by diktat and was ruled out of order, then it was provided for in the Bill before us and now, according to the letter from the Minister to which my noble friend Lord Beecham referred, by a stand-alone order-making power. Along the way, the Government seem to have determined voluntarily that they wish to undertake an environmental assessment of the revocation of the regional strategies and the structure plan policy, so it is the process of revocation which is the subject of that assessment.

Can we hear a little more from the Minister about how this all came about? At what point was the decision taken to undertake an environmental assessment of the proposed actions? Who is conducting the assessment and what are its precise terms of reference? How long is it expected to take? What is the status of local development frameworks in the interim? Can the Minister explain how this fits together with the NPPF and, in particular, the presumption in favour of sustainable development? We know that there are local plans which, together with existing regional spatial strategies are, one might say, complete one day but not the next, unless the transition provisions are put in place. The statement that we want to do away with regional spatial strategies as soon as possible and then the caveat about “subject to the sustainability assessments” smacks a little of predetermination rather than predisposition. Does this hold out the prospect of some regional spatial strategies being revoked and others not? If so, how does this all fit together? Is there not a risk that all this just creates further uncertainties in the planning world? Will the order be subject to the affirmative or negative arrangements? The Minister may say that this is all code for having some fairly loose transitional provisions, but this seems a rather strange set of amendments. Like my noble friend, I would greatly appreciate some further explanations.

--- Later in debate ---

[Baroness Hanham]

In reply to the noble Baroness’s question, the noble Lord, Lord Best, has an amendment on transitional arrangements that we will get to later, so perhaps we can deal with that when we get to it.

I will answer as many questions as I can and then, if the noble Lord will forgive me, I will write on those I have not answered. The public consultation is 12 weeks. Local enterprise partnerships will be able to respond if they wish. They are not required to, but they will be consulted as one of the organisations that will be expected to have an interest. It is an environmental assessment from the regional strategies, exactly as it says it is. Initially, if there is a major objection with one strategy that has to be looked at under the environmental assessment, it will not be able to go forward in a bulk order. At the moment, the expectation is that that order will come forward separately or they might all come forward on the same day. It is the negative process at the moment.

The intention is to revoke the regional strategies and all eight strategies as soon as possible after Royal Assent to stop muddle of any sort occurring. We can do it separately or together. The face of the noble Lord, Lord Beecham, always delights me because it is so revealing. I know when I am saying something he does not agree with. The provisions are simply to make sure that those orders can be revoked. The local development frameworks still have to conform to the regional spatial strategies until they are revoked. Anything in them that is required, even if they are developing them at the moment, will have to be taken into account.

I did not pick up all the questions asked by the noble Lord, Lord Beecham. I will make sure that he gets an answer. He has the puzzled look of one who is going to ask me again.

[Lord Beecham]

I congratulate the Minister on her anticipation. Am I right in thinking therefore that although an environmental assessment is being undertaken, upon which there will be a consultation, the revocations will go ahead anyway?

[Baroness Hanham]

I did not say that. I said that they will be put forward as soon as possible after Royal Assent. The consultation on the environmental assessment is taking place. You cannot do anything without having taken account of the consultation, so the revocations will be only after the consultation has been considered.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, in moving Amendment 204A, I shall speak also to Amendment 204G. These amendments focus on housing and housing assessment.

A consequence to the change in planning, especially the demise of regional spatial strategies, means that local authorities will no longer be able to blame development on regional requirements. It is now down to them. This places particular emphasis on assessment of housing need, including, importantly, the needs of the vulnerable and affordable housing requirements. That is why, at the urging of the National Housing Federation among others, we seek to ensure that there is a clear and comprehensive statutory duty on local authorities to maintain an adequate assessment. The federation states that structurally the focus is on the planning system in the medium term at least being plan-led. Again, this is good, although it places a greater burden on housing associations to forward plan development programmes, since proposals may have to be made through the local plan process, given that local plans will be expected to identify the key proposed housing sites so that the plan can demonstrate that it is sustainable. In the short term, it is likely that there will be more appeals, as house builders try to take advantage of the presumption in favour of sustainable development where plans are out of date and a five-year plus land supply cannot be demonstrated.

The appeal process may raise issues about whether affordable housing policies are up to date, and some developers will argue that present policies fail to reflect the affordable rent regime or the changes in grant availability. They will also argue that viability prevents them providing full levels of affordable housing. Housing associations may need to monitor appeals to ensure that affordable housing levels are not squeezed, potentially offering support to local planning authorities to evidence need for affordable housing in the market area. Housing in its broadest sense—accommodation needs—must be robustly assessed in preparing local plans. With 1.7 million households on social housing waiting lists across the country, it is vital that this is laid down in law.

The reforms to the planning system outlined in the Bill offer a new opportunity for local people to play a more active role in shaping development in their area. However, in order for them to do this, it is vital that they have access to the information that they need. This will enable them to make informed decisions and hold their local authority to account. Hence these amendments will put a duty on local councils to outline in detail in their local plan how they will address housing need. To support this, councils will be expected to provide good-quality data on affordable housing need and demand. There are a number of benefits to this approach, such as transparency; by ensuring that local authorities undertake a robust assessment of housing need, residents will have the information that they require to fully understand local planning decisions. Then there will be comparisons; detailed information will allow residents to compare the performance of their local council to that of neighbouring authorities, which will allow local people to develop a better understanding of how their council is performing. In addition, there is accessibility, with complex data put in an accessible format. Local people without a formal planning background will be able to engage in the planning decisions that affect their local area.

These amendments will also put into law a clear requirement on councils to undertake a strategic assessment of housing and accommodation needs and demand in their local areas. While the national planning policy framework promotes this, we firmly believe that the issue is too important to leave to regulations and guidance alone. With millions of people on social housing waiting lists, many with complex care and support requirements, this duty will ensure that councils have the information that they need to appropriately house people in their communities. The information will be invaluable in determining the amount of accommodation required, including affordable housing.

In Committee, the Government said that they would be requiring an absolutely clear, transparent and robust numerical assessment of housing need. However, it was argued that Section 13 of the Planning and Compulsory Purchase Act 2004 already outlined the necessary duty, when that section does not require local authorities to consider future need and demand in their areas. For the sake of future generations, it is vital that councils are required to make and act on these projections. To avoid local plans concentrating narrowly on immediate housing need to the exclusion of future requirements, it is crucial that that duty is put into law. I beg to move.

[Lord Beecham]

My Lords, I congratulate my noble friend on tabling these amendments, which deal with one of the most crucial social issues that affect the country today. Looking round this Chamber, I almost regret to say that most of your Lordships will recall the famous television programme from the 1960s, “Cathy Come Home”, which really drew attention to the acute state of housing need at that time. We are not quite in that position, but we seem to be approaching it, and the lack of house building currently planned would seem to bring the day nearer when we would be back to the future in those terms. So these are very timely and relevant amendments, not least because there are some indications that already there is a willingness on the part of some local authorities to waive or reduce the proportion of affordable homes within developments. But even if that were not correct, we need a further elucidation of what is meant by affordable homes.

Affordability will vary from place to place, but more than that the issue of tenure needs to be addressed. While it may be perfectly reasonable to prescribe a proportion of homes for owner occupation, the demand for rented accommodation is still high. I can speak from the experience of the ward that I represent in Newcastle, where a significant regeneration scheme is under way, with a very modest element of affordable homes within it and, within that, an even more modest allocation of homes to rent. Yet given the socio-economic profile of the area, I suspect that there will be much greater demand for rented accommodation than there is likely to be in the course of this regeneration.

I am sure my noble friend and the Minister will agree that, whether or not these amendments are passed, attention needs to be given to assessing separately, as it were, the need for rented occupation and owner-occupied accommodation. That rented accommodation need not necessarily be in the form of social housing by local authorities or registered social landlords—it could be private rented accommodation but at rents which are affordable to the local community to meet that local demand. I hope that, as this matter goes forward, whether in the statutory form or otherwise, that further refinement of the concept of affordability can be taken into account and reflected in policy.

Localism Bill

Lord Beecham Excerpts

Monday 10th October 2011 Lords Chamber

Tabled by

[Lord Beecham]

190: Clause 22, page 26, line 13, at end insert—
“( ) The statement may include the approach that the relevant authority has adopted for selecting information on pay policy from a provider, including any potential provider, of goods and services.”

[Lord Beecham]

My Lords, I do not intend to move the amendment but I urge the Government, in considering issues of procurement and the like, to bear in mind the need to ensure that reasonable conditions, in terms of pay and other conditions of service, are applicable not only to those employed within the public sector but to those with whom it contracts, and to seek to encourage the concept of the living wage, which has been adopted in London by successive mayors and which other local authorities are seeking to promote. I do not wish to detain the House further so the amendment is not moved.

Amendment 190 not moved.

--- Later in debate ---

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

My Lords, the three government amendments in this group give the Local Government Ombudsman the power to operate shared services with other public sector ombudsmen and clarifies the organisation’s ability to delegate functions to its staff.

Making provision for our public sector ombudsmen to share back-office functions makes sound, practical sense, providing as it does scope for better, efficient working. Moreover, making provision for public sector ombudsmen to share services, like a single point of contact for complaints from the public about public sector service failures such as social housing, has clear advantages for the public.

The amendment provides assurance that the Commission for Local Administration in England, as a corporate body, has the power to delegate functions to its officers—for instance, the ability for a member of staff to negotiate and let a contract for cleaning the office. This in no way relates to the delegation powers of the commissioners themselves, who have clear powers of delegation that allow officers of the commission to investigate cases.

The other two amendments in this group, first, make provision for the commencement of the provision that I have just described and, secondly, amend the title of the Bill to give the Commission for Local Administration in England its proper title.

[Lord Beecham]

All of us on the opposition Benches are happy to concur with the amendment moved by the Minister.

Amendment 191A agreed.

--- Later in debate ---

[Baroness Gardner of Parkes]

My Lords, I am so pleased that we have actually reached one of my amendments. I flew back from Sydney yesterday specifically to be here for it but I felt sure that another 25 would have popped in ahead of me again. Fortunately, that has not happened.

This amendment comes about because at the moment, councils have no authority to do anything to maintain standards of appearance—and buildings at all—and this can be very bad for other residents adjoining. The home that I sold in 1977 to very rich people, who now have vast resources in this country, was done up at that time and has not been touched since. It is really quite sad to go past and see the gutters falling off and the stucco all in pieces. People in that street told me that they have repeatedly asked if something could be done about it, and the council has said that no, it has no powers to even request this. These people have taken petitions up to the owners of that house, but nothing has happened. When I asked the council, it said that it has powers if something is unsafe and going to fall down, or if it is a listed building—although even if it is a listed building, it cannot ask for it to be maintained; it can only prevent it from actually falling down when it gets to that point. I was surprised that the council says that it has no powers in this respect.

It should not be a case of demanding that people keep a place in immaculate condition. I know of a similar case in Montpelier Square, where local residents get very distressed by this. It is worth thinking about having an enabling power for councils. I hope that it would be needed. I beg to move.

[Lord Beecham]

My Lords, I have some sympathy with the noble Baroness, and welcome her on her return from her homeland. I trust she has not been suffering from jet lag; I will not detain her too long.

I am not sure that the amendment is necessarily the right way to deal with this. My understanding is that in conservation areas there are provisions under the Town and Country Planning Acts for steps to be taken to maintain properties of this kind. It is not without interest that in Edinburgh recently there have apparently been problems with requirements being imposed on local residents by the local authority—who appear to have powers similar to those advanced in this amendment—which have caused some controversy. Apparently large sums of money have had to be laid out on improving or maintaining properties, and some of those who are benefiting from those expenditures have been connected with the decision-making process. That would not be applicable if the amendment were carried, and one would hope that it would not occur. Nevertheless, it is difficult to define exactly what standards would be required.

There is, however, a more general point which applies to this and the other amendments in the name of the noble Baroness, and that is the general by-law-making powers of local government. This is something I took up with the previous Administration, and some modifications were made about that issue. It might be worth the Government looking at the extent to which councils are free to make by-laws as opposed to having to have everything approved by individual departments. Alongside that, perhaps the Government could look at the question of consent regimes generally, which is something again that I have been attempting to pursue for a number of years, including in some recent Written Questions.

The noble Baroness has touched on an issue, perhaps almost inadvertently, that is worth considering: the capacity of local authorities to make particular provisions for their areas without necessarily having to have everything approved by central government. I do not know how the Minister will respond; I suspect that he will acknowledge the good intentions but say that perhaps it is not appropriate for this Bill, and I certainly would not press him to go further than that. However, I ask the Government to take back the issues of by-law-making powers and consent regimes generally, not for the purposes of this Bill, but as part of a localist agenda.

[Lord Shutt of Greetland]

My Lords, I thank the noble Baroness, Lady Gardner of Parkes, for introducing her amendment and welcome her back to Britain. Local authorities already have extensive powers to take action where a property is dangerous or having an adverse impact on the amenity of the neighbourhood. I see no need for additional powers. Under the Housing Act 2004, local authorities can tackle poor conditions across all residential properties. If a property is found to contain serious hazards, the local authority can instruct its owner to undertake any works necessary to ensure that it is safe. Inspections and any subsequent enforcement to address the disrepair can be triggered by complaints to the local authority.

Local authorities have a key role to play in identifying empty properties in their areas, and in developing strategies to bring them back into effective use. We encourage local authorities to work with owners to persuade them of the benefits of bringing their property back into use. However, where it is clear that owners are not prepared to co-operate with efforts to get their property occupied through agreement, local authorities have enforcement powers to deal with them. Further powers available to local authorities to tackle disrepair and poor maintenance include those in the Town and Country Planning Act 1990. Where properties have an adverse impact on the amenity of the area, local authorities can require that they are tidied up, repainted and, where necessary, rebuilt. I hope this will satisfy the noble Baroness and that those who are concerned will have more luck in getting their local authorities to pursue the powers that they have.

I take on board the points made by the noble Lord, Lord Beecham, on the by-law issue. I confirm that the Government will look into that further.

--- Later in debate ---

[Baroness Gardner of Parkes]

My Lords, this amendment came to me because someone who lives near me in central London phoned me and said, “I don’t know what to do. I can’t open the windows on this swelteringly hot day because all the people who are working on the local building site are sitting along the garages below my residence, and the smoke is so intense that I can’t open the window. I am going to die of the heat”. She did not die of the heat; nevertheless, I rang the local council. It was not something I had ever thought about before. I said, “What can you do about it?”. The council said, “We can do nothing. We get these issues all the time, particularly with restaurants and bars. Lots of people now congregate outside them because they can’t smoke inside”. If anyone happens to live within reach of the smoke, it is absolutely deadly for them. It would be helpful if the council could make this a planning issue.

Last month, I read in the paper that Australia proposes to bring in completely smoke-free streets. I did not hear anything about that while I was there; no one mentioned it. It is obviously of more interest to the press here than it is to people there. That is a bit extreme. My amendment is fairly short and simple but I have had the most intolerant e-mails and letters from people, saying that I am a fascist who is trying to ruin their lives and take away their right to a bit of healthy smoking whenever they feel like it. It is obviously a very emotive issue—quite unnecessarily so. I am not suggesting anything wholesale. However, I am suggesting that people should have the right to live in their homes and open their windows without finding themselves so adversely affected. I beg to move.

[Lord Beecham]

My Lords, again, one sympathises with the motivation behind this amendment. Quite apart from the particular case to which the noble Baroness referred, it is not a particularly attractive sight to see people hanging about smoking in the street. However, the only grounds on which orders could be made would relate to the impact of that smoking on health.

Enclosed areas are of course covered by the existing legislation, and, as I understand it, there is power to designate areas other than enclosed areas, if, in the authority’s opinion, there is significant risk that without designation persons in the area would be exposed to significant quantities of smoke—areas where, although they are outdoors, there is a concentration of people or of prevailing structures around the area that might lead to people being exposed to the smoke. If that is indeed the case, as it appears to be under the Health Act 2006, there does not appear to be any need for the amendment. I would encourage local authorities to look at that Act. No doubt the Minister in replying will have more information about that.

[Lord Shutt of Greetland]

My Lords, again I thank the noble Baroness and the noble Lord for their comments. Indeed, I have great sympathy for the amendment as it seems to me that the place immediately after the no-smoke zone ends is the problem territory, whether it is outside a public building, or wherever it may be.

The amendment would give local authorities an explicit power to make by-laws designating areas as smoke-free. The Health Act 2006 makes provision for the prohibition of smoking in enclosed public places and workspaces. It came into force in England on 1 July 2007. Section 4 of the Act provides regulation-making powers for the Secretary of State for Health to make further regulations—for England—designating as smoke-free any place or description of place that is not smoke-free under the Act. This could cover outdoor places. Therefore, if the evidence on the harms of exposure to second-hand smoke becomes more robust, and the Government’s preference for voluntary local action to extend smoke-free places where there is a clear need is shown not to be working, the Government can consider using Section 4 of the Health Act 2006 at a later date. I would say that, at the moment, the Government do not intend to make use of these powers. However, I know that colleagues in the Department of Health welcome the debate on this important issue and will continue to monitor developments and the evidence.

While we are sympathetic to local authorities making by-laws that preserve public health, our preference is to see local authorities promote the benefits of environments free from second-hand smoke on a voluntary basis. Creating smoke-free areas through legislation gives rise to complex issues, which I know that colleagues at the Department of Health would want time to consider carefully, and I do not think this is something we should be dealing with at this late stage of this Bill. As such, I am afraid that I cannot support the amendment and trust that the noble Baroness will be able to withdraw it.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, I shall speak also to Amendment 249A. This proposed new clause originates from a well researched report by Ernst & Young in July 2010, commissioned by the National Casino Industry Forum. It was designed to show the impact of a number of regulatory reforms, which would improve the economics of the gaming industry, benefit the public, and the public purse.

The current situation is totally illogical and, in the long run, unsustainable. There are currently 53 permitted areas where casinos regulated under the Gaming Act 1968 are allowed. The system of permitted areas was introduced principally to reduce the number of casinos to a manageable number. The areas were chosen on a subjective basis. The 1971 regulations included a formula under which any county borough outside Greater London with a population of 125,000 people became a permitted area.

When county boroughs were abolished in 1974, the formula was altered so as to bring in those former county boroughs which had a population of 125,000 or more at any time between 1 December 1970 and 1 October 1973. The list has remained frozen ever since. That is almost 40 years ago. In that time, demographics and economic conditions in these areas have changed enormously and 187 licences have been issued under the Gaming Act 1968. I should emphasise that this number is finite, which means that no more can be granted, but the number can be reduced. Of the 187 licences currently in force, 149 are trading; the balance have either closed down as commercially not viable or have not been opened, many for the same reason. Compare that to the 8,800 betting shops in existence, which are not similarly constrained.

Currently, a casino can relocate only within the permitted area in which it is located; so it cannot locate to another permitted area or to a town that is not in a permitted area. Hence, if the permitted area is overcrowded and the casino is commercially unviable it has no option but to close. Yet some 60 local authorities applied for a 2005 licence and were disappointed. This has led to a number of consequences. There are too many casinos within existing permitted areas; there has been a closing down of casinos with resultant loss of jobs; and the Exchequer is losing money from gaming tax lost as a consequence.

What is the solution? We need to be able to permit a casino to move to anywhere in the UK where the local authority is prepared to have one of the existing casino licences. Local authorities would consider whether they wish to have a licensing policy that states they can have a casino within their area. Many local authorities do, as can be seen from the number who applied to have a 2005 Act casino in their area, but were unsuccessful, as I stated earlier.

A casino operator with a non-operating licence—for example, where it has closed down because there were too many casinos in the current permitted area—could apply to transfer the licence to a local authority that wishes to have a casino. No local authority can be forced to have a casino. Under Section 166 of the Gambling Act 2005, it can resolve on a licensing policy stating that no casino licence will be granted. A local authority which has a no-casino policy currently in place will be excluded, unless it decides to change its licensing policy.

Even if a local authority passes a policy stating that a casino can be located in its area, the public has to be consulted. Before a new casino can open there will still need to be separate planning and premises licence applications where the public and any other interested party will be able to make representations. Only if these two things happen will the casino be able to move to a new location.

What are the consequences? The impact of this amendment, if accepted, will be to create new leisure facilities in a locality, new capital expenditure, new jobs—the NCIF calculates that 2,400 to 3,000 new jobs could be created in consequence—and increased revenue for the Exchequer. The Ernst & Young analysis confirms that up to £12 million in additional gaming duty would be levied if just 20 casinos relocated.

This proposal does not increase problem gambling as there is no increase in the overall permitted number of casino licences. Therefore, this is a genuine win-win solution. By way of explanation, Amendment 249A will extend the benefit of these provisions to Scotland. I beg to move.

[Lord Beecham]

My Lords, it is almost refreshing to move from the constant headlines about the casino economy, which the world has enjoyed for the past few years, to something as substantive and reasonable as the noble Lord has brought to the House today in terms of the limited number of premises to which this amendment would apply. The key to the argument of the noble Lord is that this should be a matter for local decision within the overall context of that limited number. It seems to be entirely consistent with the approach of localism—it should be a matter for local determination—with the benefits that the noble Lord has referred to being realised in a number of places that wish to see that kind of development augmenting their current offer to residents and visitors. I hope that the Government will look sympathetically on the amendment and facilitate its passage.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have spoken on this amendment. I am aware that this amendment would make changes that some elements of the British casino industry have been seeking for some time. I can sympathise with the sentiments behind it, but this is not the right time to discuss the issues that the noble Lord raises. It is not an uncontroversial proposal and it would be wrong to assume that there is unanimous support for it either inside or outside the industry.

Seventeen new licenses were provided for by the Gaming Act 2005 aimed at contributing to economic development and regeneration in carefully selected locations. We do not know what sort of impact this proposal could have on the eight competitions to award the new licenses which are currently under way. All of those have yet to launch their processes. It would not be right to bring forward measures at this stage which could undermine these competitions and adversely affect the benefits that these new casinos could bring to local communities.

Nor should we assume that the casino industry in Britain is united behind this proposal. I understand that the industry is split over the idea. The National Casino Industry Forum supports it, but the Casino Operators Association is thoroughly opposed. That is not to say that the Government reject outright the principle behind the amendment, but there is some way to go before we could consider offering our support and we would need to look at some issues. For example, the amendment as proposed does not require the 40 or 50 currently dormant casino licences to be handed back as a quid pro quo. That might be an important gesture to ensure that any new flexibility did not lead to a substantial increase in the number of casinos.

The relevant Minister, the Minister for Tourism, who is responsible for gambling policy has met with representatives of the industry a number of times and they are fully aware of his views. I am sure that he would be prepared to consider this matter in the future in the terms that I have just outlined. With those reassurances, I hope that the noble Lord is willing to withdraw the amendment.

--- Later in debate ---

[Lord Jenkin of Roding]

My Lords, I have huge sympathy with my noble friend’s amendment. Before he left the Chamber, my noble friend Lord Newton, who is taking part in the Welfare Reform Bill Committee, said that he was sorry not to be able to add his voice because he feels very strongly about this.

For nearly 30 years I lived in rural Essex within reach of my former constituency, and one of the disadvantages of the road we lived in was that it was perennially the subject of littering. There was a corner at the bottom of the hill with a bit of spare ground on the left-hand side and my children very quickly christened it “Mattress Corner”. It had become a place where people could dump their unwanted mattresses, which then had to be cleared up by the local authority. It was not only that. We lived a mile and a half outside the village where there was a fish and chip shop. We discovered that we were almost exactly the distance away that it took people to eat a bag of chips. I found myself as the riparian householder having to go out at fairly regular intervals with a plastic sack and one of those nice machines with which you can pick up things and pop them in the sack, simply to clear up the litter on both sides of the road that had been deposited by passing vehicles. Even if you saw a car with litter being thrown out of the window as it went past, there was nothing you could do. You did not know who the driver was or who had thrown it out. There was no point in taking down the number because nobody would do anything about it. You had to prove who it was. So I have every sympathy with this.

My noble friend Lord Marlesford said that it is not enough just to talk; you have to do. I have previously declared an interest as the joint president of London Councils and I am happy to say that London Councils is engaged at the moment in tackling this problem in London. It does this on behalf of the London boroughs and I think it is now ahead of the game. The London Local Authorities Act 2007 contains a provision to decriminalise the dumping of litter from cars and to impose a liability for penalty charges on the keeper of the vehicle. That is slightly different from the proposal put forward in my noble friend’s amendment but it is clear that we all have the same objectives in mind. A London Local Authorities Bill is currently awaiting its final stages in the other place. It will make a small drafting correction to that provision which will allow it to come into force.

Other steps are necessary. Discussions have taken place and progress is being made with the Ministry of Justice in relation to the making of regulations which will enable London borough councils to enforce their penalty charges under the civil regime in the courts. Officials are also co-operating on the necessary alterations to the Civil Procedure Rules and London borough councils understand that these changes and regulations will be made very shortly. I hope my noble friend on the Front Bench will be able to confirm that the provisions will be implemented very soon and the system can start to work in London. That is doing and not just talking. I believe London will show that this solution is perfectly feasible and can be addressed by local authorities. Other authorities may wish to copy what London Councils is doing and it will not be the first time that has happened. I support my noble friend’s amendment.

[Lord Beecham]

My Lords, I am very taken with the image of the noble Lord, Lord Jenkin, patrolling the highways and byways of rural Essex as a sort of unpaid litter warden. It is a charming thought and I am sure he did a very good job, but he should not have to. That is the message of the amendment tabled by the noble Lord, Lord Marlesford, and I congratulate him on bringing this matter to the attention of the House and hope that the Government will be able to respond. As the noble Lord said, the matter was debated in another place on an amendment moved by the Member for Gateshead, Ian Mearns, with whom I was discussing this on the train from Newcastle this morning. He received what seemed to be a sympathetic response from the Minister, Andrew Stunell, who said:

“We will certainly look carefully at the matters that have been raised”.—[Official Report, Commons, 18/5/11; col. 441.]

Time has passed so I hope that the consideration has taken place. I think it is preferable to have this in national legislation rather than leave it to by-laws. There seems to be no reason why this amendment should not be proceeded with on this Bill or at least a clear indication given that it will have some priority in other legislation. But this is really too good an opportunity to miss and I hope that the Minister in replying, even if he cannot say today that the amendment will be accepted, will indicate that by Third Reading there will be a clear position and the Government will feel able to adopt it.

Of course, as the noble Lord pointed out, this is essentially a matter of enforcement. There is little point in having regulations without the capacity to enforce them. But, as the Essex police have found out in another context, enforcing measures concerning the driving of vehicles is not necessarily straightforward. This would certainly obviate the kind of difficulties that have arisen in another case and one would hope that the Government would see the logic of that and accept the thrust of the noble Lord’s amendment, and see to it one way or another that the objective which most of your Lordships share is carried into being.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have taken part in this debate and pay tribute to the noble Lord, Lord Marlesford, and his tenacity in pursuing this issue. It is always said that this is a House of experts. I had not appreciated the expertise that we had between us about the distance from the fish and chip shop to the home. I am also an expert on this. The home where I was brought up and lived until I was 23 was the exact same distance from the fish and chip shop. It was our garden that caught the recycled newspapers which in those days were used for wrapping up fish and chips, and we had to keep shifting them, so I understand the concern that people have about litter.

This amendment would give local authorities an explicit power to make by-laws about littering from cars. Throwing litter from vehicles on to public land is a littering offence under Section 87 of the Environmental Protection Act 1990. Indeed, some local authorities successfully tackle litter louts, issuing them with fixed penalty notices. I fully acknowledge that taking enforcement action against those who litter from vehicles can often represent a practical problem. However, extending the scope of the littering offence, as was also suggested by the Local Government Group in its amendment rejected in Committee in the Commons, raises issues of fairness and proportionality. A registered keeper may be open to prosecution even though they did not commit the offence and were not present to prevent it. It may not always be a ready solution for the registered keeper to avoid prosecution by identifying who was the actual offender.

However, as has been mentioned by the noble Lord, Lord Jenkin of Roding, powers will shortly become available to London boroughs following enactment of the latest London Local Authorities Bill, currently before Parliament, which will allow them to issue a civil penalty to registered keepers where enforcement officers witness littering from a vehicle. It makes sense to learn the lessons from the application of that approach in London before moving to wider legislation—and legislation is not the only approach. Changing littering behaviour is key. That is why the Government are supporting Keep Britain Tidy in developing the Love Where You Live campaign. That work with businesses, local authorities and civil society partners will make an important contribution to changing behaviour on littering in all its forms. The Defra Secretary of State is calling together later this year representatives of vehicle hirers, motoring associations, manufacturers, service stations, et cetera, with a view to agreeing a voluntary commitment to tackle littering from vehicles.

It is one of the guiding principles of making a by-law that no by-law should reproduce national legislation, which is what this amendment would achieve. That being the case, and although I certainly support the intention behind the amendment, which is that the anti-social practice of littering should be a criminal offence, I cannot support it and trust that the noble Lord will feel able to withdraw it.

--- Later in debate ---

[Baroness Gardner of Parkes]

I am delighted by the policy statement but I have one question that I hope the Minister will be able to answer. In relation to panel membership, I notice that the statement of policy specifies:

“The relevant representative body will put forward nominations in respect of its members”,

of persons with sectoral experience, to the Minister. What opportunities will there be for bodies such as the Greater London Authority which are not part of a representative organisation to make nominations to the Minister in respect of panel membership? I would be grateful if he could answer that question, which probably relates to Amendment 195ZAJ but I find it so difficult when I look at all those amendments to know exactly which one it relates to.

[Lord Beecham]

I join other noble Lords in warmly congratulating the noble Earl on the manner in which this matter has now been put back on track. The noble Lord, Lord Tope, said that most of us would not have wished to have started from here, but where we are ending owes very much to the thoroughness, attention to detail and decisiveness of the noble Earl—qualities in which he emulates his distinguished grandfather. It is some 49 years since I had the pleasure of meeting the noble Earl’s grandfather and he made a significant impression on me, young as I was at that time. The noble Earl is doing so again today, not merely on me but on all Members of your Lordships' House.

[Lord Jenkin of Roding]

My noble friend's grandfather lived in my constituency.

[Lord Beecham]

He was none the worse for that. I do not think that his wife, who used to drive him around, would have been guilty of depositing fish and chip papers anywhere near the noble Lord’s house.

The position that we have reached is one that the Local Government Association has worked very hard with the Minister and colleagues from all sides of the House to achieve. In particular, the outcomes around the designation and the opportunity to correct a situation that perhaps led to a fine—the provision of an effective appeals system—have all been significant. I am encouraged that the statement of policy that has been produced by the Local Government Group is one that I understand the Government are minded to adopt. Perhaps when he replies the noble Earl will indicate how far their consideration of the document has gone and whether there are likely to be any issues of significance that might not accord with the proposals that have been made. I understand that effectively an agreed position has been reached around four main areas: working in partnership; that there should be no surprises; that there should be a fair and proportionate process; and that consideration should be given to the ability to pay.

One of the crucial issues first voiced in the debate to the Committee by the LGA was the lack of an opportunity for local government to be involved in the legislation from which proceedings ultimately might flow in terms of infringement of European law. It is welcome that the Government have now indicated that local government will be identified specifically as a key sector for consultation when the Government enter into negotiations on EU legislation that could ultimately lead to fines coming down to local authorities. That is an extremely important extension of the consultative role that should ensure that the legislation is right in the first place, which would be a distinct improvement on the position hitherto.

The Minister has made it clear that there will be no surprises in future. No local authority will be taken by surprise because of the designation process, which is a reasonable one in which Parliament will be involved. Equally, the process will be broadly based in terms of those involved in deciding a number of matters—for example, whether the UK Government themselves have contributed to the infraction. I take it that that will also apply to any infraction that might have been contributed to by the devolved Administrations where their activities impinged on European legislation. I assume that that is taken care of in the arrangements that the Government have come to with the devolved Administrations.

My final point is crucially important. The panel will determine these matters and the Minister will consider the authority's ability to pay a fine and provide for possible alternatives in the event that the ability to pay is not present. It is conceivable that a small district council might find it impossible to pay a significant fine in respect of some infraction of environmental legislation within its competence. It is extremely welcome that the Government have acknowledged that that is a risk and that they will not be seeking to extort from such an authority a contribution to a financial penalty that would seriously impede the activities of that local authority.

Thanks very largely to the Minister, we have reached a satisfactory position on this. It has been a good example of the way in which local government and the Government can work together and in which Ministers can listen to proceedings in your Lordships' House, take back concerns and proposals and work with them. I hope that the noble Earl will feel able, metaphorically at least, to bite one or two of his ministerial colleagues in the hope that this becomes a habit across government and not confined to the noble Earl.

[Earl Attlee]

My Lords, I thank my noble friend Lord Tope and other noble Lords for their kind comments. First, I plead not guilty for all the work: it was my officials what done it.

My noble friend Lord Tope talked about consultation on the EU legislation and the fact that we are committed to consulting with local authorities. I am confident that the LGG will hold our feet to the fire on this issue.

My noble friend Lord Jenkin mentioned Keeling schedules. They are useful in certain circumstances but the decision to use them is decided on a case-by-case basis.

My noble friend also asked me to give an assurance that under no circumstances could fines refer to activities, errors and omissions made before the Bill passes. I am very happy to give an absolute assurance that under no circumstances can the provisions be used retrospectively. Subsection (5)(b) of the clause proposed by Amendment 195ZAH means that only actions or inactions after designation can be taken into account. This is extremely important because it allows all those affected to concentrate on solving the problem rather than listening to the lawyers and doing nothing other than arguing. It is a very important point.

--- Later in debate ---

The noble Lord, Lord Beecham, asked about the statement of policy of the Local Government Group. Most of the heavy lifting has already been done in order to secure agreement to move forwards. The Local Government Group, the Greater London Authority and devolved Administrations will all be invited to input as we adopt the Local Government Group statement into one that applies more broadly across the country and to a wider range of public authorities. I am hopeful that there will not be significant rewrites and we will reaffirm all its key principles: no surprises; proportionality and reasonableness; and working together.

[Lord Beecham]

And ability to pay?

[Earl Attlee]

And ability to pay—a very important point. The fines can only be set at a level that will not effectively bankrupt the authority. That is one of the principles in the legislation.

--- Later in debate ---

[Lord Lucas]

My Lords, I am not at all sure that this is the right solution to the problem but I am sure the problem is there and I very much hope this Bill will deal with it. When one is looking at the application of localism to urban environments and to giving local communities some degree of control and influence over what is happening, one of the great problems—certainly a problem in the bit of London I lodge in during the week which is Lavender Hill—is empty properties. They are principally retail properties where the owners appear to have decided that they would rather they went empty than accept a lower rent and have some kind of commercial activity within them.

My view is that these owners should pay the full cost they are inflicting on the community by following that course of action. By allowing the street to appear derelict and empty they reduce the trade for other businesses. They reduce the prosperity of the area. They reduce the opportunity for jobs for people who live in the area. It is a thoroughly delinquent behaviour. It is something that costs the rest of the community dear. I do not believe that the current arrangements that merely allow for an ordinary empty rate are at all satisfactory. If we are going to have in the future the opportunity to create a neighbourhood in Lavender Hill, one of the first things we will wish to tackle is all the empty shops. We will not wish to do it by trying to persuade people to pay the vast rents which the street used to be able to command in the days when it was prosperous which was now some long while ago—it was 10 or 15 years ago. Some of these properties have stood empty since then. We will need some way of battening on to these landlords and making them realise that although it is their property and theirs to do what they do with it, if they choose to leave it empty and derelict they should pay the community something in respect of the costs they are causing it by their actions. I beg to move.

[Lord Beecham]

My Lords, the noble Lord has drawn attention to a significant problem with commercial property but the same principle can apply to residential property, particularly in the private rented sector. There are a significant number of homes left empty—it runs into some hundreds of thousands. In urban areas in particular it is very often private rented properties that are left unoccupied. They are as much a blight on the local neighbourhood as empty commercial properties and of course the demand for accommodation is considerable. Just recently walking around the ward I represent I noticed a number of properties that have been empty for some years. They are not in particularly good condition but not sufficiently dangerous to allow the local authority to take steps. It would certainly be an incentive for landlords to let those properties and bring them into use for the benefit of the whole area if a similar principle were adopted for residential properties as the noble Lord proposes for commercial properties. I hope the Government will look sympathetically on that aspect of it and endorse the noble Lord’s amendment.

[Baroness Gardner of Parkes]

My Lords, I am slightly concerned by this amendment as I think there is an international problem occurring of people buying things online to such an extent—I heard this in Australia while I was there and I believe it is the same everywhere—that people are closing up small shops because there is simply no way they can afford to compete with online purchases. I do not know what will happen in these instances. What will local authorities do? Will the people who own the shops be encouraged to convert them into residential accommodation or would it be considered very damaging to the whole high street suddenly to find that instead of shops in continuity in a row suddenly two or three were houses? In the past there were lots of little shops that were once houses. Would we be prepared to see the reverse of that happening?

I think it is a very complicated issue, and, if the landlord simply cannot get a tenant now, what does he do? Does he allow the property to fall down? I do not know what the answer is, particularly with the shop premises.

--- Later in debate ---

[Lord Shutt of Greetland]

I will certainly use my best endeavours to see that we can write to the noble Lord and that copies are placed in the Library so that other noble Lords with an interest can see the results of that.

[Lord Beecham]

Can the Minister also consider the points that I made in addition to those made by the noble Lord, Lord Lucas, for Third Reading?

--- Later in debate ---

Tabled by

[Lord Beecham]

195ZAZMB: Clause 42, Page 38, line 17, leave out “one or more” and insert “at least one-third of the”

[Lord Beecham]

My Lords, I understand that this amendment, like many others, would become superfluous, if, as I apprehend, the Government are to accede to amendments to be moved by the noble Lord, Lord Greaves, effectively to remove from the Bill the provisions for local referendums except in respect of council tax increases deemed to be excessive. In the circumstances that I apprehend are about to occur, there is not much point in my moving this amendment, and therefore I will not do so.

Amendment 195ZAZMB not moved.

Amendment 195ZAZN

Moved by

--- Later in debate ---

[Lord Lucas]

My Lords, I am significantly less well informed than the noble Lord, Lord Beecham. This has caught me by surprise, particularly since, in various discussions with my noble friend’s officials, the local referendum was used to ward off my requests for amendments in other areas. To go over some of my concerns, I have, throughout the passage of the Bill, tried to persuade the Government that they need to look at how localism will work in cities. In rural and suburban areas, planning is a great lever and generator of funds. All things will be possible if we get the planning side right. Once you have funds, you have the ability to do what you want in a neighbourhood to a certain extent. You certainly have a lever with which to negotiate with the local authority.

However, even in as gentle an urban area as Lavender Hill, planning has no function as a raiser of funds or people’s enthusiasm. The place is built out. There is very little that planning can do. You will never get a community created in Lavender Hill, let alone some of the more difficult areas of cities, on the basis of what is in the Bill. We should be turning our thoughts to how the section on allowing local initiatives to run local services might be made less formal so that neighbourhoods might group around it. We ought to turn our minds to how neighbourhoods can make representations to local councils and be listened to on subjects that they really care about, such as school catchment areas, how parking is enforced and how decisions are made about the distribution of services.

There are many ways in which we might build localism in cities. Surely the riots have shown us the importance of doing that. However, in removing this provision the Government remove the one bit of the Bill that gives a possible voice to neighbourhoods in cities in trying to persuade their local councils to do something in the way that the neighbourhood wants them to be done. I will not argue with the Minister and my other noble friends that what is in the Bill at the moment is not an expensive and bureaucratic way of doing it, but we have to find something else. The Bill is such an opportunity to improve life in cities but the Government do not seem interested in taking it. I find that enormously disappointing. I am particularly sad that—since somewhere in the great collective mind that is the department there is an awareness of my arguments—I should be kept in the dark and not given time to prepare thoughts and arguments to compensate for this loss later in the Bill. I shall apply myself to it for the rest of the evening. With luck, we shall not get so far into the Bill that I cannot find ways of putting back opportunities to argue these things. As I say, my main concern is that this great opportunity to help build communities in cities is being allowed to pass by at a time when we are all acutely aware that it should not be.

[Lord Beecham]

My Lords, I very much welcome the Government’s decision to accept the amendments of the noble Lord, Lord Greaves. We debated this at some length in Committee. The drawbacks of the system that the Government had intended to bring in were made manifest at that time. The Government, having made the egregious error—in the view of some of us—of adopting an American system for the direct election of police commissioners, were in danger of incorporating something like a Californian referendum system into local government. It has not been noticeably successful in California.

A referendum is a legitimate way of testing public opinion. That is absolutely right. It is less obvious that the proposals in the original Bill—to allow a very small minority of either elected members or the public to engender petitions on any subject under the sun, at any time and at any cost—would make a significant contribution to the kind of community engagement that the noble Lord, Lord Lucas, rightly wishes to see not only for the Lavender Hill mob but more generally. It is a perfectly legitimate and, indeed, important part of what local government and local governance must be about. However, there are other ways of involving communities and testing opinion. It is a pity that one of those ways—the petitioning procedure that was admittedly somewhat overcomplicated by the degree of regulation applied to it—has been abolished by the Bill. It required a council response to a petition from residents. It was a good measure. The noble Lord, Lord Shutt, made great play of the fact that it was extremely bureaucratic in the way that the previous Government laid out how these things should be conducted. There was some force in that but the principle was a good one. It required an authority to respond to a concern that was formally raised by petition. I hope that the Government might, even at this late stage, given that they have taken out this part on referendums, look again at whether that might be reintroduced, perhaps in some more acceptable form than previously.

There is also the councillor call for action. I do not think that the Government have disturbed that principle. Admittedly, it is up to a local councillor to make the call but, on the other hand, a councillor who declines to make a call when faced with a considerable body of opinion in his ward is unlikely to remain a councillor for long. There is also that mechanism. Generally, in recent years local government has been more inclined to establish local mechanisms for consultation and involvement. I hope that that will be reinforced. However, the substantial construction of the previous arrangements for referendum effectively constituted an invitation for people to make mischief, which would have happened, to divide communities, which would also have happened, and to involve the authority in considerable expense. It could run into hundreds of thousands of pounds for a significant-sized authority. The noble Lord, Lord True, expressed serious concerns on that basis. Therefore, we very much welcome the withdrawal of this proposition, which leaves three areas where referendums might occur, as we have heard. We shall come to one of those, namely the council tax referendum, shortly.

Under the circumstances, I am not sure that it is right at this point to raise some of the concerns of the Electoral Commission, with which some of your Lordships will be familiar, about how such referendums—now in only three categories—might be conducted. It raises a concern about expenditure in promoting referendums of that kind. Clearly, for local referendums that are being abandoned it will no longer apply. However, it will still be potentially applicable to other referendums—the three that have been referred to, on elected mayors, council tax and neighbourhood planning issues, which we will eventually come to. I raise it now so that Ministers might have an opportunity to think a little about the Electoral Commission’s concerns. They may of course have a response already; but if they have not, then those concerns will not disappear because these particular provisions are no longer to feature in the Bill.

I hope that in the course of further debate we will have an elucidation of the Government’s position in relation to what is a real concern in respect of how the remaining referendums might be conducted, and, more particularly, how they might be financed. Subject to that, I certainly support the amendment of the noble Lord, Lord Greaves, and I am pleased that the Government are, as the noble Baroness so gently puts it, minded to accept them.

[Baroness Hanham]

My Lords, I do not know that there is an awful lot more to say. It is interesting that at this stage of the proceedings we have a rather limited number of people here to debate what, in Committee and at Second Reading, was a significant and major issue, with barely a friendly voice in place for these provisions. I therefore say to a rather muted House that we have listened to the concerns and anxieties that were raised over all those aspects put forward by the noble Lords, Lord Greaves and Lord Tope, and others, about the expense. We have decided with regard to towns that the local referendums do not need to have a place within this Bill.

If I may just briefly address my noble friend Lord Lucas, who—if he will forgive me saying so—has strayed a little bit away from what these amendments would do. This is no attack on the cities. It is nothing to do with the cities. It is a general point of view and a general provision that would have allowed anybody—urban, rural, whatever—to have referendums. It has nothing to do with planning, either, as the planning referendums are not affected by this Bill, and we will be returning—probably on Wednesday—to the whole area of provisions for neighbourhood planning and neighbourhood referendums.

As other noble Lords have said—as the noble Lord, Lord Greaves, pointed out in his introduction and as the noble Lord, Lord Beecham, has said as well—there are going to be other opportunities for referendums. Not only are there the council tax referendums, there are the right-to-build referendums and the neighbourhood planning referendums. Those complement the provisions for referendums which are already open to councils to carry out on governance. Any council may carry out parish polls and informal polls which are to do with its services and functions. We believe that there is pretty good coverage of this, and that there is the chance for people to have their voice heard without these provisions.

We have accepted what has turned out to be the will of the House at a much earlier stage, namely that these provisions should be reconsidered. We have reconsidered them, and therefore I tell the House that we will accept the amendments of the noble Lords, Lord Greaves and Lord Tope.

[Lord Beecham]

Before the noble Baroness sits down, first of all I hope that she will forgive me for not thanking her, as I should have done, for responding, as she has just said, to the will of the House. It has been another very constructive contribution, and I am sure the whole House is grateful to her. Could I ask in respect of the issue raised by the Electoral Commission, which I appreciate is a slightly wider issue, whether the Government will be looking at that before we get to Third Reading, as there will be areas in which it might be relevant?

[Baroness Hanham]

My Lords, I have seen the Electoral Commission’s submissions in relation not only to the costs, but to questions and to how it should be involved. I cannot give the noble Lord a direct answer but it does seem to me to be inconceivable that we should not take quite serious note of the Electoral Commission’s representations on this. I am sure we will come back to that issue.

--- Later in debate ---

[Lord Greaves]

I take it that that was not the Minister’s reply to the debate. I have three brief points to make. We are moving on to the community right to challenge, and some of us have found it quite difficult to understand how it will work and how some of the problems which might result will be overcome. I thank the Bill team for their time and patience in explaining exactly how they see it working and being fairly honest about some of the difficulties which might exist. This is a difficult part of the Bill and it is one which, when it is enacted, as no doubt it will be, will need a careful eye kept on it. I cannot say that we have not had an immense amount of co-operation in trying to thrash it out.

I very much support Amendments 197B and 197E to 197G on the timing issues. Those are clearly a result of responding to the public consultation, but also to the discussions in Committee. I do not share the worries of the noble Lord, Lord Lucas, about the timing issues. The way in which the timing issues are now presented in the Bill is much better and leaves a great deal of initiative to local authorities. It is much better than the existing wording which leaves it all to the Secretary of State to lay down rules and regulations. I wish that the Government had been more flexible on similar matters in the 100 or so areas in the Bill that we can point to as giving excessive powers to the Secretary of State. In this instance, the Government have listened and we welcome that.

[Lord Beecham]

My Lords, the Minister referred to the extension to Ministers of the definition of agencies which might be subject to the right to challenge. That is the burden of Amendment 197B. Perhaps in his reply the Minister might indicate whether that could also include next-step agencies of government, which might carry out functions. More particularly, when one looks at Amendment 197D in conjunction with Amendment 197B, it seems to me that something of an anomaly is being created. There would be a community right to challenge Ministers under Amendment 197B, and that would extend to parish councils, but it would not, by virtue of Amendment 197D, extend to other local authorities, assuming one defines parish councils as local authorities. So we could have the anomalous situation of a parish council being able to exercise a right to challenge a government department or Minister about a provision of a service, but not the principal authority in which it is situated.

I do not imagine that that has been deliberately constructed in that way, but I should be grateful if the Minister would undertake to look at that anomaly before Third Reading. Parish councils can be quite substantial bodies—there can be 40,000 or 50,000 people in a parish area—and they might bid for a government service, whereas the county or district in which they are situated could not. That strikes me as a situation which would be difficult to explain. Perhaps it has not been envisaged as a possibility, but it seems to arise from these amendments. Perhaps the Minister could indicate a willingness to look at that point before we get to Third Reading.

--- Later in debate ---

I have received much more helpful responses on this subject from my noble friend at the Department of Health. Those responses suggest that, once we get the health Bill through—as I am sure we will—we will find local GP commissioning groups who are ready, willing and able to commission services from local community groups. Looking after the elderly, for instance, or making sure that people get looked after in other ways which the massive mechanisms of the National Health Service find difficult and inconvenient but which the community of patients through their doctors none the less wish should be done, will be accommodated readily and with ease and enthusiasm. We may well find communities becoming much more active in supporting their needier members through their beneficence and redirection of funds from the National Health Service. As I said, I have found those discussions very constructive. I very much hope that the same thinking is going on in my noble friend’s department.

[Lord Beecham]

My Lords, I certainly support the amendment of the noble Lord, Lord Greaves, in respect of the proposal that two or more employees could issue a challenge to the authority, which I would much rather were not in the Bill at all. Failing that, my Amendment 197CB, would at least require a majority of the employees affected to support such a move. I really hope that the Government will take that seriously. It does not seem appropriate that two or more employees—it might be a director or deputy director; it could be people lower in the organisation—could simply take a decision which would affect a considerable number of people without their consent and outsource a whole section of the local authority. That seems wholly unreasonable and not at all compatible with the general thrust of the Bill, which looks to secure support for a range of measures on the part of communities. I hope that the Government will acknowledge that there is an issue here and will accept one or other of the amendments. My preference would be that of the noble Lord, Lord Greaves, but, failing that, I would be delighted to accept his support for the fallback position.

However, I am less persuaded by his Amendment 197DA. I quite take the thrust of his intention, but I am not sure the wording is very compelling. The amendment refers to the body concerned being required to be,

“actively engaged … in the area in which the relevant service is being provided”.

Let us take as an example a county area and services for the elderly or domiciliary care. There might be an organisation in one corner of the county carrying out that service. It would hardly meet the description of being,

“actively engaged in the area”;

that is, across the area in which the relevant service is being provided. It is difficult to define in the way that the noble Lord seeks.

I am therefore unenthusiastic about the way in which the noble Lord reaches his objective, although I am bound to say that I am not sure that I can offer a better alternative. However, in respect of the previous two amendments, the Government need to rethink their position to facilitate at the very least a majority decision by those who would be affected by a move of two of their colleagues. I cannot see any logical reason why the Government should resist that.

[Baroness Hamwee]

My Lords, I have later amendments on the same issues. In relation to Amendment 197DA, I would like to say to my noble friend that I think that experience in the particular activity that is at issue is less important than the geographical link. I take his point about wanting a connection, but I am not quite convinced that it is the particular connection that he has mentioned. However, by and large I am entirely with him on this issue.

The noble Lord, Lord Lucas, framed this in terms of urban needs, and I myself am very much an urban and suburban person. He also mentioned the comfort of state provision. Since this debate has morphed into discussion not just about two employees, but about whether two employees might, as it were, sell out to Tesco, it does remind me that there is often a very sharp divide on this issue. People do not like Tesco, but they do like being able to shop in Tesco, which creates quite a dilemma.

My question for my noble friend is whether there is any room for local variation in a local authority’s response to such an expression of interest? I will come to my other questions when we come to my amendments later.

[Lord True]

My Lords, there is a gentle sense of irony in the representative of the workers’ party, and my noble friend who is yearning for the days when his party stood for worker control, expressing so much concern at the prospect of employees, however few—less than half, I gather, is unacceptable— expressing an interest in undertaking a function. It seems to me that we are witnessing major change in communities and local government and that it is perfectly reasonable, indeed it is already happening all over the country, that groups of workers and employees are coming forward with propositions to set up social enterprises, to take on existing bodies and to take on other activities. I am sorry that I was not in the Chamber to welcome the withdrawal by my noble friend of regulation in the previous group of amendments, which I do welcome. Yet here we are being pushed to prescribe and put blocks in the way of people putting forward expressions of interest simply on the basis that they might be employees of the organisation and, still worse, that they might secretly be in cahoots with capitalism.

[Lord Beecham]

That is not what I said, nor is it what the noble Lord, Lord Greaves, said. What we object to is the idea of two people in a potentially large organisation committing the rest of the employees. Where is the democracy in that?

[Lord True]

There is nothing to say that this deals with a large organisation—some of the things that we are discussing at the moment are relatively small. It seems inconceivable to me that two employees would act against the wishes of those people that they actually want to work with in the future. For years the noble Lord endured the policy of his party being made by small, powerful executives purporting to speak in the names of millions of people—for all we know, they probably still do. I do not see any reason why a group of workers or employees should not get together and entrust their negotiations about an expression of interest to two or three of their number. I think that we should be extremely careful in framing this Bill not to put forward regulation that makes employee initiative more difficult.

--- Later in debate ---

[Lord Lucas]

My Lords, the noble Lord, Lord Wills, is quite right that enthusiasm for freedom of information seems to wane the longer a party is in power. He is perhaps sitting there, safely in the far corner of the Back Benches, so that he does not get too heavily stamped on by his own Front Bench. The Labour Party quite clearly lost enthusiasm for the Freedom of Information Bill in the course of taking it through Parliament. It was by the narrowest of squeaks that it survived at all, and that was only six months into government. If it has developed a new affection for it now, I am delighted, but I do not expect it to last.

However, on our Front Bench, we have Mr Freedom of Information himself. My noble friend has been dedicated to this cause for a long time, so I hope that he will take a constructive view of what we might do. I share many of the concerns of my noble friend Lord True and do not think that this amendment does the trick. However, more openness in local government and more consideration of which of the larger contracts in local government should be open to freedom of information would be consistent with the way in which the Government are going; for instance, in considering whether examination boards should be subject to the Freedom of Information Act or putting UCAS on the list of bodies subject to it, as we have a draft regulation to do at the moment. If the processes of the Health and Social Care Bill lead to a substantial transfer of what is currently public activity away from the public gaze, I shall propose that we make sure that it is brought back swiftly through the Freedom of Information Act. I do not see this Bill as leading to large-scale transfers of activity away from the public gaze into obscurity, but there should be some protection in case there is. I hope that we get a constructive answer from my noble friend.

[Lord Beecham]

My Lords, I shall resist the temptation to stamp on my noble friend; it is a highly resistible proposition. I support the thrust of his amendments. Indeed, I detect certain sympathy on the detail of Amendment 199 from the noble Lord, Lord Lucas. There are matters in it that are worthy of further consideration by government and I hope that they will not simply reject the topic out of hand even if they cannot quite accept the wording of the amendments for reasons which have been advanced tonight and perhaps others.

On the new clause that would be inserted by Amendment 201, it is not an extraordinary demand to make of a public body that it should keep a record of, or at least do a report on, requests for freedom of information. I should have thought that this was a reasonably appropriate matter for a council audit committee—I serve on such a committee—to have before it as it is information about the governance of the authority. It does not seem to me that the amendment seeks to impose an inherently onerous obligation. It is one that should be within the knowledge of members of that authority. I think that routing it through the audit committees, or possibly standards committees, of councils would be a good way to ensure that elected members do not lose sight of the council’s obligations and that they ensure that their officers actually comply with them. I hope that the Minister will accede to my noble friend’s request to think about this and to perhaps bring something back at Third Reading. It is an important issue and although sometimes, obviously, there are difficulties in complying with requests, there is no reason why these issues should not be examined and, in the interest of good governance, improvements made to the local regime.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, I am very grateful to the noble Lord, Lord Wills, for moving the amendment. It is well known that he was himself, when in office, a champion of freedom of information. I am very grateful for the comment of the noble Lord, Lord Lucas, about my own record. I failed to persuade Jim Callaghan to put freedom of information into the programme of the 1976-79 Labour Government, but I was very happy that it was with Liberal Democrat votes that the Freedom of Information Act that is now on the statute book passed through this House. I am sad to read that the Freedom of Information Act is among Mr Blair’s major regrets of his premiership as it remains one of the things that I am most proud of being associated with.

I think that the noble Lord, Lord Wills, is a little ungenerous about the approach of this Government. It is not true that we have done nothing since coming into office. In fact, quite the reverse is the case. I think that the initiative that this Government have shown in relation to freedom of information and transparency has been quite revolutionary. The Government are committed to extending the scope of the Freedom of Information Act and to increased transparency and have made considerable progress in this since May 2010. For instance, as part of a package of measures announced in January, we have already introduced primary and secondary legislation to extend the Act’s scope and are currently consulting on more than 200 further bodies in this regard. In order to ensure that the Act continues to meet the needs of its users, the Act as a whole will be subject to post-legislative scrutiny. I do not think that noble Lords fully appreciate just how revolutionary that is. Indeed, when I urged that we bring forward post-legislative scrutiny, some of the strongest supporters of freedom of information were slightly nervous that the Act would come under too much criticism. What I say to them, and say to supporters of the Act now, is that post-legislative scrutiny and the assessments built into it will give the opportunity to prove what I still believe: that freedom of information underpins good governance.

Localism Bill

Lord Beecham Excerpts

Monday 12th September 2011 Lords Chamber

I will reflect on what my noble friend has said very carefully, but perhaps I could press him a little further in clarifying the reasons. I welcome Amendment 105 and it is all very well that the Minister must consult borough councils, but I believe there should be more public accountability. Perhaps a Statement laid before Parliament is not the right approach but the Government should publicly hold themselves to account to explain why, if they decide to delegate functions in future, they have not delegated them to the boroughs. Perhaps in his response the Minister will be able to explain, or say whether he would be prepared to go a little further—not necessarily on the face of the Bill—in giving undertakings in that area.

[Lord Beecham]

My Lords, I hesitate to trespass on to the territory of the capital but I have a good deal of sympathy with the points made by the noble Lord, Lord True. He argues powerfully for greater involvement by the London boroughs and for procedure that would facilitate that and indeed put the onus on the Government to prove their case in terms of delegation.

However, another aspect should be taken into account. The amendment speaks of a requirement to consult,

“each London borough council … the Common Council, and … the Assembly”.

There is, of course, a cross-London body of councils, London Councils. In addition to the individual approaches, which obviously make sense, I would have thought it would be useful for London Councils to express a view as an organisation. The noble Lord is nodding his assent to that. Obviously it would be possible to garner the views of the 30-odd London boroughs, but seeking the view of London Councils itself might facilitate a better dialogue across the capital and, I hope, influence the outcome in directions that might not otherwise arise through separate consultations and responses. I wonder whether, if nothing else is done, London Councils could be added to the list of three given in Amendment 105.

[Lord Jenkin of Roding]

My Lords, I would like to respond to that briefly. London Councils has made it very clear from the beginning of this Bill that it has been unhappy with the extent to which the regional authority in London—namely, the mayor and the London Assembly—seems to have been more successful in securing powers and opportunities than have London boroughs. Maybe that is their fault, but the fact of the matter is that the point made by my noble friend Lord True is shared by London boroughs as a whole. There needs to be a better balance between the mayor and the boroughs on these sorts of matters. As I have said before, the boroughs are responsible elected authorities and deserve to have a proper consideration on these matters. I hope that the Minister will feel able to give further consideration to this point. Here is another case where the mayor’s lobbying seems to have been more effective than that of the London boroughs. I am not sure whether that is right or justified, but that seems to be what has happened.

[Lord Taylor of Holbeach]

My Lords, I am grateful to the noble Lord for bringing all these points to bear on what is actually quite a difficult balancing act, and I think noble Lords will agree. I am not a London person, but I come from a two-tier authority. I live in a county council area and in a district council area, and the responsibilities between those two councils are usually clearly defined by statute. I think the governance of London is more involved. The Government’s policy intention is to try to keep an even balance between the democratic mandate which is vested in the mayor and the London Assembly and the democratic mandate which is vested in the London boroughs. I am sure all noble Lords will agree that keeping that balance right is not easy.

Much of the talk has been about how the consultation might go and the consequences of a consultation where perhaps the proposals do not meet with consensus. These are reasonable challenges. The noble Lord, Lord Beecham, asked whether the joint council body for London would be consulted. It is a matter of fact that it would be consulted; I do not know it is a statutory body as such, but it is clearly a body that would be validly consulted. This would not, however, avoid proper consultation with the individual boroughs. It is very important to place on record that these government amendments seek to enshrine the role of the boroughs themselves. Indeed, they are coloured by the amendment of my noble friend Lord True, which seeks to go further in protecting the interests of the boroughs. I understand that.

I was asked how Parliament would be able to challenge any decisions that might be made in this area. In reality, Ministers are accountable to Parliament and I cannot imagine a decision considered by any noble Lord to be totally unfair or irrational to go unchallenged, either by question or even debate in this House, let alone down the other end where quite a large number of Members represent London constituencies.

[Lord Beecham]

Does the process envisage delegation being made by order or is it outside that process? If it is by order, would it be by affirmative resolution or by a negative procedure?

[Lord Taylor of Holbeach]

While I await the answer to that part of the process, perhaps I may continue with the process of consultation. It is important to get this on the record too. The consultation exercise will have to be appropriate to the matter in question. The problem with being too prescriptive about the nature of the consultation is that it does not have room for more flexible responses. Consultation should not be a tick-box exercise. It is a proper dialogue. It should not really be about whether it has majority support or not but about what is right, and consensus should be sought across the boroughs and London in the interests of the people of London. In the end, the governance of London is not for the benefit of the mayor, the Assembly or the London boroughs; it is for the people who live there.

In response to my noble friend’s challenging question, the process is outside the statutory instrument process. It is purely an administrative function. However, the decision is still capable of being challenged in Parliament, as I have said, if it is seen to be perverse. There are no immediate plans to use this power, but it is envisaged that it could be used to delegate the administration of some of the national programmes that may be produced on the horizon. That is why it is important to have this capacity and a process whereby there can be discussions across London as to where a national programme might be best delivered.

My noble friend Lord True castigated us, in the nicest possible way, as he would, for not recognising that the Localism Bill is the place where, by empowering local boroughs, we would enhance localism within London. The role of the boroughs is clearly laid down by statute, and they are a very important part of London’s governance. However, London is an exceptional place—it is the capital city of the country—and a number of services are effectively organised across London. The power to delegate arises only when the Secretary of State considers that the functions can be exercised appropriately by the mayor. We say that this provides the sort of comfort which my noble friend seeks. In effect, only a Minister exercising his powers under this clause can do this.

I hope that my noble friend will feel free to withdraw his amendment. I believe that the Government have got the balance on this issue just about right.

--- Later in debate ---

Moved by

[Lord Beecham]

109A: Clause 5, page 4, line 9, at end insert—
“(2A) An order under subsection (1) or (2) may not be made in respect of—
(a) this Act; or(b) any of the provisions listed in Schedule (Statutory exemptions from section 5: supplemental provision).(2B) The Secretary of State may by order amend Schedule (Statutory exemptions from section 5: supplemental provision) to include additional statutes or Regulations.
(2C) An order made under subsection (2B) is to be made by statutory instrument.
(2D) Before an order may be made under subsection (2B), a draft order must be approved by an affirmative resolution in both Houses of Parliament.
(2E) Schedule (Statutory exemptions from section 5: supplemental provision) has effect.”

[Lord Beecham]

My Lords, when we discussed the provision about general competence in Committee, the noble Lord, Lord Newton, who is not in his place, chided me for my apparent diffidence in respect of the way in which I moved amendments at the time. I did and do welcome the conferring of the power of general competence that the Bill provides, especially in the light of the general perception in the media by such august bodies as the TaxPayers’ Alliance and even occasional Ministers that “general incompetence” is the term that should be applied to much of local government—something that I certainly refute. However, there are flaws in the Government's proposals and the amendment addresses at least some of them.

The two amendments in this group relate to what can only be described as a dispensing power which the Secretary of State will take to disapply, repeal or amend legislation that he conceives somehow inhibits the exercise of the general power of competence. It is fair to say that in Committee the noble Baroness addressed concerns that had been raised about, for example, the application of human rights legislation on matters of that kind, and indicated that these were not envisaged as being embraced by the Bill. Certainly I accept that point. However, a great many pieces of legislation, on the face of it, appear to fall within the provisions of Clause 5(1) and therefore are subject to amendment, repeal or revocation, in the words of the clause. They extend over a wide area of public policy. A number of them are listed in the proposed new schedule that is the subject of the second amendment in this group. They cover such areas of law as part of the Childcare Act, the Child Poverty Act, the Care Standards Act, disabled persons regulations, carers legislation, parts of the Mental Health Act, the Community Care Act and the Environment Act. The list includes an Act in relation to which I will not declare an interest: the Prevention of Damages by Pests Act.

It is a formidable list of legislative requirements that can, simply by order, be revoked. That raises a significant question about the role of the Executive. It is not clear whether Clause 5(1) requires any such changes to be made by affirmative resolution. Certainly that was the view of the Delegated Powers Committee. Other provisions in the clause are subject to affirmative resolution, or would be subject to it. The noble Baroness indicated in Committee that that was probably the case, and it would appear so. However, it does not necessarily seem to be the case in relation to Clause 5(1). Perhaps the noble Baroness will comment on that.

--- Later in debate ---

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

My Lords, I am glad that the noble Lord, Lord Beecham, is not seeking to get me out of my job just yet. I thank him for that. There is a little overexcitement about Clause 5(1)—not that the noble Lord ever raises his voice excitedly. However, there are concerns that are not necessary. Amendment 109A would prevent the Secretary of State making any orders under Clause 5(1) and (2). That would mean that he could not even amend the long list of legislation set out in Amendment 119E. However, it would give him order-making powers to add to the legislative list; he would be able to add but not to take away.

The power in Clause 5(1) is a power to remove restrictions and limitations to the legal capacity of local authorities that prevent them exercising the general power of competence. I think that we all want to see them have this general power. The clause must be read in the context of that power, which is a power to do things that an ordinary individual can do. It is not a power to remove any duty or obligation placed on local authorities, such as many of those listed in Amendment 119E, where such duties or obligations do not restrict or limit the capacity of the local authority to do things that the individual can do.

Noble Lords must hang on to the word “individual”; that is the important aspect. We do not consider that Clause 5(1) could be interpreted—the noble Lord addressed this and understands it—as allowing the Secretary of State to amend the requirements of, for example, the Equality Act or the Human Rights Act as they apply to local authorities. These Acts place broad duties on public authorities, including individuals, so they cannot be part and parcel of this power of competence. These Acts are not a restriction or limitation on the legal capacity of the local authority, so the power could not be used in the way suggested for these or any other similar legislation, just as it could not be used to exempt local authorities from prohibitions contained in criminal law.

We have listened to concerns, and amendments were brought forward in the other place, which are now in Clause 6, to place restrictions and limitations on the power in Clause 5(1). We believe these provide additional safeguards so that there can now be no doubt about the scope of the power. It does not permit the removal of essential duties, protections or rights from the Secretary of State. I also confirm that, as part of the consultation required by Clause 5(7), it will be appropriate to consult every person or group of persons, or their representatives, who will be substantially affected by the proposal. The results of any such consultation would have to be presented to Parliament, and then Parliament could veto the order.

The noble Lord asked me whether Parliament would be involved in this. As I said, Clause 5(7) is also modelled on what is in the Legislative and Regulatory Reform Act. The procedure to be followed would be negative, affirmative or superaffirmative, and that would be ultimately determined by Parliament. This matter has been put to the Delegated Powers Committee, which has no difficulty with that and has expressed itself on side with the procedure.

We believe that these amendments are unnecessary. We are trying to give local authorities as much power as we can, but we realise that some of that is going to come eventually from Parliament. There are restrictions on the powers of the Secretary of State in these procedures. Local authorities are not going to have completely unfettered power with the general power of competence, but it will be much wider than it is at the moment.

I hope that I have answered the noble Lord satisfactorily about the involvement of Parliament if the Secretary of State were to use these powers, so I hope that he will feel able to withdraw his amendment.

[Lord Beecham]

I am grateful to the Minister for her reply. I accept that there now appears to be at least a parliamentary procedure here. I still think it is difficult to accept the notion that primary legislation imposing duties that were imposed for a purpose on local authorities and others should be varied or revoked in the way set out in the Bill. Having noted the point about the affirmative procedure, however, I accept her assurances and beg leave to withdraw the amendment.

Amendment 109A withdrawn.

Moved by

[Lord Beecham]

109B: Clause 5, page 4, line 10, leave out subsections (3) and (4)

[Lord Beecham]

Amendments 109B and 109C relate to the same provision under the Secretary of State’s powers, but in this case they seek the deletion of the power of the Secretary of State in effect to nullify the power of competence which the Bill purports to represent. This is really quite an exceptional provision and is not at all acceptable. The Secretary of State takes upon himself, having conferred or purported to confer this very broad power, the right to,

“by order make provision preventing local authorities from doing, in exercise of the general power, anything which is specified, or is of a description specified, in the order”,

or, under Clause 5(4), to make that subject to conditions. That is a very far-reaching incursion on the principle that the Bill seeks to advance, and it is simply not acceptable.

Amendment 109C in this group deals with the rather strange phrase, “any necessary protection”, which is contained in the clause and is in no sense defined. It is presumably left to the Secretary of State to determine what a necessary protection is. These are the limits under the power contained in Clause 6. In the absence of any sensible definition, I do not think this is an acceptable power to confer on the Secretary of State. I invite your Lordships to agree that these provisions should be left out of the Bill, and I move Amendment 109B accordingly.

[Baroness Hanham]

Amendment 109B, as the noble Lord said, would remove subsections (3) and (4) of Clause 5. These subsections provide reserve powers to allow the Secretary of State to prevent authorities from exercising the general power or to set conditions around the use of this power. We believe that these powers provide a necessary and proper safeguard, given the breadth of the new power—to ensure, for example, that risks to both local government finances and the Exchequer are properly managed. The Government have no plans—I think I said this earlier on—to use the powers in subsections (3) and (4). At present, there is nothing in mind; the Secretary of State is not sitting there with great excitement, his pen poised, waiting to take away what he has already given. The Government actually expect them to be used very rarely, if at all. They are, however, an insurance policy. They might, for instance, have to be used to deal with any risks that might arise from authorities’ use of the new general power—I think I said this in Committee—to engage in novel financial transactions using public money. That might require the Secretary of State to step in. The use of the power is subject to consultation and to the affirmative procedure, which would ensure suitable parliamentary scrutiny. I just want to stress that, occasionally in legislation, we need to provide for the very end of the road when something might go wrong, and that is all the clause is for.

Amendment 109C would remove one of the conditions that place restrictions and limitations on the use of Clause 5(1). The provision in question must not remove, as the noble Lord said very clearly in his opening remarks, “any necessary protection”. This condition ensures that protections—which might relate, for example, to the economy, health and safety, civil liberties, the environment or national heritage—are not removed. A similar condition is used in the Legislative and Regulatory Reform Act 2006, so this is not new to legislation. It is quite deliberately wide. Any Secretary of State seeking to make an order under Clause 5(1) must be satisfied that the condition is met and must explain why to Parliament. We believe, therefore, that this and the other conditions in Clause 6 are a useful additional safeguard and should be retained.

Before the noble Lord or others intervene, I will speak to government Amendments 234, 235 and 236, because it might help the debate coming afterwards. Amendment 234 gives effect to the recommendations of the Delegated Powers and Regulatory Reform Committee in relation to Clause 5(2). Clause 5(2) is entirely benign; it can be used only to remove wholly overlapped, and therefore unnecessary, powers. It cannot be used to remove duties. The amendment ensures that orders made under Clause 5(2), if not made in conjunction with orders under Clause 5(1) and subject to special procedures set out in Clause 7, will have to be subject to an affirmative procedure. We believe that those safeguards, coupled with the intense level of parliamentary scrutiny provided, give sufficient protection.

--- Later in debate ---

I hope that my reply will allow the noble Lord to withdraw his amendment.

[Lord Beecham]

I am grateful to the Minister for her reply, and I have no difficulty with the government amendments to which she spoke. However, I continue to have difficulty with the response to my amendment. The Secretary of State is clearly not prepared to trust local government with the powers that he is conferring on local government. He retains significant power to override the exercise of the general power which he has purported to confer or to impose conditions, admittedly subject to a parliamentary procedure. The whole case is redolent of the Government simply not being prepared to trust their partner in local government, a point that was made by the noble Lord, Lord Newton, when he was castigating me for being insufficiently robust on the previous occasion. I hope I have not failed his test today.

On this and on the previous occasion the Minister referred only to some novel financial practices, as if these were the most likely candidates for the invocation of the powers conferred by the Act. So far as financial practices are concerned, if there is any suggestion that they are likely to damage the finances of the local authority, there are existing mechanisms to deal with that within and outside the authority in the proper financial officer and audit, albeit perhaps not for much longer under the auspices of the Audit Commission. There are perfectly proper safeguards, and the additional powers that the Secretary of State seeks to reserve for himself under this Bill are not needed. I still do not understand what is meant by the “necessary protection” to which Clause 6 refers. Protection from what, against what and to what extent it is necessary are entirely opaque. In these circumstances, I must test the opinion of the House.

--- Later in debate ---

[Baroness Gardner of Parkes]

My Lords, I am very impressed with the way the amendment was moved and by the universal support that there seems to be in the House on this. I do not want to be a wet blanket but I am slightly concerned about the sweeping powers that will be given to the Minister, and I should like to feel satisfied that the super-affirmative resolution that was referred to will come into force and work. It is very important, particularly as over the years we will get changes of government. The provision is universally approved of, and when I hear my noble friend Lord Jenkin, who has vast experience in this field, favouring it, then I can do nothing but agree.

[Lord Beecham]

My Lords, I congratulate my noble friend Lord McKenzie on moving the amendment, working very hard to ensure that it is in an acceptable form and persuading the Minister that it represents the right policy. I must congratulate the Minister and the Government on making the most significant concession, if you will, that we have had so far in terms of the Bill. This is the most localist part of the entire Bill, and the Minister and her colleagues deserve to be congratulated on that. Indeed, the noble Lord, Lord Tope, also should be congratulated. We have had an almost biblical experience tonight. The voice was the voice of the noble Lord, Lord Tope, but the words were the words of the noble Lord, Lord Shipley—however, they were none the less persuasive for that.

Incidentally, the noble Lord, Lord Shipley, has done well to be in Manchester today. Were he travelling down by the east coast main line this afternoon he would not get here. I understand that winds have blown down trees on the east coast line and things are massively disrupted. Perhaps one day somebody will do something about the rail network and make sure that these incidents are less apt to cause damage.

However, I must say in reference to the noble Lord, Lord Jenkin, that it was my pleasure to work with him, up to a point, when he chaired the Inner City Partnership committee as Secretary of State in Newcastle and Gateshead in the 1980s. I was then the leader of the council, a position that I relinquished—not before time, many people thought—some 17 years ago. It would have been helpful to have had the kind of powers conferred by this amendment—assuming it is passed, as I take it it will be—on local government.

As some of your Lordships will be aware, I am not an enthusiast for elected mayors by any means. I am therefore glad that the original restriction has been abandoned because it seems to me important that councils with the more conventional model of leader and executive should have this opportunity. Indeed, they have earned this opportunity. I refer particularly to the leader of Manchester City Council and his authority, which has blazed a trail in terms of urban regeneration and activities, not just for its authority but as one of the leading authorities in the Greater Manchester area of the Association of Greater Manchester Authorities, which now has parliamentary authority for a unique structure so far in terms of English local government.

Certainly the conferment of these wider powers is very welcome, particularly as I fear that some of the other changes in government policy will have an adverse effect on what everybody intends to happen, which is that the economic prosperity of these areas should be reinforced and, we hope, expanded.

I think that the Government erred in dismantling the regional structures, acknowledging that much of the work has to be at the sub-regional level, and therefore led by local authorities, in particular by the core cities. The disappearance, certainly in the north-east region of the Regional Development Agency has not been helpful. LEPs may be working in some places, but I do not think that they necessarily fill the gap. While I cannot speak for other parts of the country, certainly in the north-east I am bound to say with regret that an outbreak of parochialism, if not tribalism, is actually diminishing the capacity of what is a fairly compact region to deal with these issues. One hopes that the conferment of powers under this Bill will to a degree remedy that deficiency, but it is not axiomatic that authorities which are not so far being regarded as core cities will either seek these powers or use them in a collaborative way.

Later in the Bill we will talk about the duty to co-operate. It is a political duty rather than a legal one at the moment, so it remains to be seen how, in terms of planning, that duty can be strengthened. If the good intentions of this amendment are to be implemented, that will require a more constructive attitude on the part of some authorities than has been evident in the recent past. However, more than that is needed; it also requires a buy-in from a range of government departments and agencies. The Department for Communities and Local Government has set out its stall, but it remains to be seen whether other departments will, as it were, shop at that stall. There are some reasons to be concerned about that. One stems from the decision of the Government to abolish the regional offices and take back into Whitehall those civil servants up and down the country who became part of the dialogue between local areas and the Government in Whitehall. In my and others’ view, that local intelligence cannot simply be replaced by people sitting, in the case of Newcastle, in an office nearly 300 miles away, although the distances will differ. These people will not have a day-to-day acquaintance with the needs of an area or with local leaders, whether they be political or business leaders. In the north-east and no doubt elsewhere we found over many years that those who served in the Government offices became powerful and useful advocates for the regions and cities with the main departments in Whitehall. That, I think, is currently missing.

Beyond that, there is the question of what is happening to the community budgets. These are the replacement for the Total Place programme initiated at the suggestion of the Local Government Association, but adopted by the previous Government. The intention has been to pool resources across government departments and work to a common agenda which would differ according to each locality. That is the principle which has been piloted with some success. However, I have been making inquiries through Parliamentary Questions about the degree to which there has in fact been any buy-in by government departments to this agenda. It is totally unclear how much of the expenditure being authorised by departments at the local level has been applied to the concept of the community budgets. Apparently no one is even collating this information, let alone trying to ensure that departments are working with each other and their local partners on this programme. If that is the case for the policy that has been deployed until now, one has to wonder whether other departments will, in practice, fulfil the Government’s intentions—I repeat, I applaud them on adopting the policy set out in the amendment—in terms of the actual devolution of functions. If they are not prepared to co-operate and pool budgets in a joint way, will they seek to devolve functions to and through local government?

One can imagine a range of such functions, not least in the area in which my noble friend will have the good fortune to lead for the Opposition tomorrow and for some time hence, that of welfare reform. There are clear possibilities for much of the work being carried out in terms of employment, benefits and getting people from welfare into work to be done through local government and for responsibilities to be devolved in that respect. I hope that the Government will not simply wait for departments to come forward with proposals, but will positively promote the idea of piloting different approaches and services in authorities with a track record and whose capacity will in any event have to be recognised under the terms of the amendment.

It seems that this amendment has great potential for changing the way we respond to local needs and circumstances in a manner that reflects the strengths and opportunities as well as the weaknesses of a local and regional economy, and indeed those who make the decisions within it. But it needs to be driven across Whitehall. I do not know whether that would be a function of the Minister for Cities. Potentially it might be one, and I understand that the noble Lord, Lord Shipley, is an unpaid adviser in that department. After spending many years in opposition and a few years in power in Newcastle, he is well qualified to assist the Minister, if that is the position. But again, this really does need to be driven from the top of Government, let alone by the Department for Communities and Local Government, however worthy it is in this respect. It is early days of course, and I do not know whether the Minister will be able to indicate whether there have been any discussions across the departments about how these matters might be progressed. Of course, we have only just had the amendment put before us so these are early days, but it would be reassuring if the Minister could say whether, at the very least, the Secretary of State would seek to work with Cabinet colleagues, the Local Government Association and perhaps a selection of the local authorities to explore in a coherent way how, while allowing for variation and experimentation, the intentions of this very worthy amendment could be implemented. I look forward to hearing what the Minister has to say.

[Baroness Hanham]

My Lords, I am delighted to have been able to put my name to these amendments. There is no doubt that the core cities have worked extraordinarily hard to make sure that what they are hoping to achieve is well understood. The amendments were originally moved by the noble Lord, Lord McKenzie, at the previous stage, and we have worked on them ever since. It is very appropriate that something like this is done on a cross-party basis. As the noble Lord, Lord Beecham, said, these are big powers that are very localist in nature and will do precisely what local government has wanted for a long time. It is therefore appropriate that they are now being presented in a way that enables us all to join in.

I am grateful for the support of the noble Lords, Lord Shipley and Lord Tope, and the noble Lord, Lord Beecham, for all the questions he has asked me. I hope that I shall be able to answer some of them. However, we have learnt from him that the railway line to Newcastle is not operating because of fallen trees. That is useful to know at this stage in case we all suddenly want to run off and go there. I am also grateful to my noble friend Lord Jenkin for expressing his support. We recognise that things have moved on a long way from the days when he was a very distinguished Secretary of State who was extremely supportive of local government. But I do not think that even he at that stage could have envisaged that we would have been able to do this.

As has been said, the new clauses proposed in the amendments allow for the transfer of public functions and the delegation of ministerial functions to local authorities and other permitted authorities. They combine the amendments that allowed for the transfer and delegation of functions to local authorities as originally tabled by the opposition Front Bench in Committee with a power a transfer functions to elected mayors as set out in new Section 9HA which, as a consequence, we are now withdrawing.

--- Later in debate ---

I am no parliamentary draftsman, but the noble Earl, Lord Attlee, said that they always get it right. If that is the case, and I am sure that it is, perhaps he can explain what it means because it does not mean a lot to me. I also notice that if any local authority gets something wrong, if the Secretary of State does not like what it is doing he seems to be able to stop anything that he wants. However, that could be quite a breath of fresh air to local authorities, and I hope that they will grasp the nettle and try things out. I hope that they will be able to raise money from those who can afford to pay, because we would get a much better transport infrastructure network in these important areas if that happens.

[Lord Beecham]

My Lords, I very much endorse my noble friend’s observations but, like him, I also have one or two questions about how things might work. I come from an area that has been well served by a passenger transport authority and executive for many years. We have a pretty good bus system and a metro system, which was initiated by a Conservative Government in the 1970s—ad idem again across the Floor—and extended more recently. It is very successful but its powers in relation to private bus companies are circumscribed. That is a source of frustration, at least to that passenger transport executive, and I wonder whether the Bill will actually open the possibility of a different relationship between the authority and the bus companies. Incidentally, I suppose I ought to declare an interest as the holder of a bus pass and a concessionary metro pass.

I know from my own experiences as a ward councillor, but also from general issues arising from transport, that the feeling is that there is insufficient leverage in the hands of the executive in relation to private contractors. That is one question, and, again, if it is not possible to give an answer immediately, subsequently will be quite satisfactory.

The other issue relates to the Highways Agency. One can well envisage circumstances in which the role of the Highways Agency may be quite important to the transport plans of an executive, and, indeed, to the delivery of transport services. Again, in my experience, it is not always the most amenable government agency that one has to deal with. I know that the experience of the noble Earl, Lord Attlee, is different—we have had a conversation to that effect—but, certainly, there is at least some potential for a different relationship between an authority with the powers that will conferred on it by this Bill and the Highways Agency.

Going back to where we left the discussion on core cities, the same principle applies. Will there be buy-in not only from the Department for Transport but in particular from that executive agency, which is very influential and needs to co-operate with the body charged with the delivery of local transport? Of course, the Highways Agency does not deal, generally speaking, with the road network in towns and cities. Nevertheless, in a sub-regional area such as Tyne and Wear, Greater Manchester or elsewhere, there is a relationship between their activities and programmes and those of the executive. I wonder whether any enlightenment might be cast upon that issue. Again, I do not necessarily expect a reply off the cuff, and if it is more convenient I would be happy to receive a written communication in due course.

[Lord McKenzie of Luton]

My Lords, I shall speak briefly in support of these amendments, subject to any issues that come out of the very forensic questioning of my noble friends. Amendment 119BA seeks simply to ensure that the powers conferred can be pursued either alone or collectively with one or more ITA. I accept entirely the Minister’s confirmation that it can and that this amendment is not necessary. I am pleased that that is on the record. As the noble Earl said, we moved amendments in Committee to achieve a general power of competence for ITAs similar to that given to fire and rescue authorities in the Bill. These replicated amendments moved by my honourable friend Barbara Keeley in another place. The Minister there explained that these were matters for the Department for Transport and were under consideration. That, indeed, was the response when we debated the amendments in Committee here, but the Government committed to take matters further, which they have done. They have fulfilled their obligation to the House and we are happy to support these amendments.

--- Later in debate ---

Moved by

[Lord Beecham]

119F: Schedule 2, page 207, line 27, at beginning insert “Subject to receiving a proposal under sub-paragraph (5),”

[Lord Beecham]

Amendment 119F and the other amendments in the group refer to the additional permitted governance arrangements contained in the schedule. The legislation as drafted allows the Secretary of State to make provision for changes in such arrangements. The thrust of these amendments is to ensure that the changes stem from proposals made by the individual authorities affected, rather than being initiated from Whitehall and the Secretary of State himself. The amendments go on to refer to the principles upon which such changes should be made. Clause 9BA(6) says that:

“The conditions are … that the operation by the authority of the proposed arrangements would be an improvement on the arrangements which the authority has in place for the discharge of its functions”.

That seems to me an unnecessarily narrow prescription. They ought to be, as the Bill goes on to say,

“likely to ensure that the decisions of the authority are taken in an efficient, transparent and accountable way”.

My amendment incorporates that phrase, but goes on to say that the arrangements would be appropriate for all local authorities, or for any particular local authority, to consider and—this is the important part of the amendment—that the arrangements are consistent with the principles of localism and representative local democracy, a phrase that, as far as I am aware, does not appear anywhere else in the Bill.

In our discussion at Second Reading and from time to time in Committee, noble Lords on all sides of your Lordships’ House stressed the importance of representative local democracy as a necessary part of any localism agenda. That should be reflected in the consideration of any Government’s arrangements. I do not think that it is necessary to confine any changes to where they would after all, in the view of the Secretary of State, represent an improvement. There is no particular need, in my judgment, for that. They should certainly not represent any lessening of the efficacy of those arrangements, but they could be different without necessarily representing an improvement, in the eyes of the Secretary of State, as long as they meet the criteria of transparency, efficiency and accountability and are consistent with the principles of localism and representative local democracy. That should be sufficient.

I hope that the Minister, if she is dealing with these amendments, will regard them as friendly rather than unfriendly. They are designed to reinforce what is said to be the thrust of the legislation but in a way that, first, places the initiative with the local authority rather than the Secretary of State for providing that the criteria are met, but secondly—again, I stress this—emphasises that the principles of representative local democracy should be met in any such change. I beg to move.

[Baroness Hanham]

My Lords, we debated both these amendments in Committee. We accept that most proposals for additional governance models will come from local authorities. That will be how the impact will go given their expertise as practitioners. However, Amendment 119F still fails to recognise that ideas and proposals about new governance models may also come from other sources. The amendment says that the Secretary of State cannot do anything without having a proposal put to him. We need to make it clear that those proposals could come not only from local government but from local government representatives, think tanks or research units. Therefore, they might not be sufficiently well formed for the Government to take them on board. Saying that the Secretary of State may implement something only after a suggestion has been put forward may be restrictive, although the noble Lord is also saying that the Secretary of State should not be able to dream up a form of governance and then try to implement it. That is not the sense of this legislation. I hear what the noble Lord says, but that is not the intention.

In any case, if the Secretary of State decided to do that, he would be forcing local authorities to do something that they may not want to do and that is not the intention behind these provisions. We are not going to force local authorities. They would not have to adopt arrangements set out in any regulations made under this provision. This is an empowering clause not a diktat clause.

In Amendment 119G, the conditions that the noble Lord suggests are, if I may put it politely, less useful for local authorities than the existing ones. It does not seem unreasonable that there should be an explicit requirement that any proposed new arrangements should be an improvement on what is already there. There are three areas of governance listed in the Bill and anything else would have to be an improvement on what is there. I believe that the existing conditions give clarity for local authorities that may be considering submitting a proposal and we would not want to change that.

Finally, I remind noble Lords that any regulations made under this provision would simply extend the range of choice of governance models available to local authorities. They would not have to adopt those arrangements. They would be one more in addition to that list of three if somebody can think of something remarkable to do.

I hope that with that explanation the noble Lord will be able to withdraw his amendment.

[Lord Beecham]

I am grateful to the Minister although it is entirely unclear who would judge and on what basis whether the change was an improvement or not. However, in the circumstances, I beg leave to withdraw the amendment.

Amendment 119F withdrawn.

Localism Bill

Lord Beecham Excerpts

Wednesday 7th September 2011 Lords Chamber

[Lord Shipley]

My Lords, in moving Amendment 84 I shall also speak to Amendments 86 to 90. These all relate to the standards of accommodation and repairing obligations. Amendment 84 will ensure that all tenants and other occupiers of housing with short terms have the benefit of repairing obligations. The Landlord and Tenant Act 1985 provides that the implied repairing obligations set out in its Section 11 only apply to leases of less than seven years. This Bill proposes to apply that Section 11 to secure and assured fixed-term tenancies of more than seven years to take account of the fact that the new, flexible tenancies may be granted for longer than seven years. The proposed new clause in my Amendment 84 gives all the tenants of all short leases of less than 21 years the benefit of implied repairing obligations, so this amendment is important.

Amendment 86 relates to the same Act, which currently provides that those who have previously held a lease for more than seven years and who have not previously had the benefit of the repairing obligations by landlords will still not gain the benefit of such obligations if they renew their lease with one of less than seven years. There seems to be no justification for excluding any short leases from the repairing obligations, which should surely apply to new short leases, irrespective of what length the previous lease was. This amendment would achieve that result.

Amendment 87 would make landlords responsible for repairing furniture, fixtures, fittings and appliances in furnished lettings. Section 11 of the Landlord and Tenant Act 1985 implies repairing obligations into all leases of less than seven years in those granted since 24 October 1961. They are required to,

“repair the structure and exterior of the dwelling-house”,

and,

“to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation”.

However, it makes no provision in relation to any furniture, fixtures, fittings or appliances provided by landlords in respect of furnished dwellings, such as beds, sofas, cookers, fridges and so on.

Although most people would expect landlords to be responsible for the furniture and fittings that they have supplied in furnished dwellings, few tenancy agreements—even those of social landlords—impose any specific repairing obligations in this respect. Most furnished lettings are granted by private landlords whose tenancy agreements often make no reference to repairing obligations at all. However, where there is any such reference it is usually only one to the terms implied by Section 11 of the Landlord and Tenant Act 1985. In the absence of any specific term in the tenancy agreement covering furniture and so on, there is no obligation upon a landlord to repair or keep in working order the furniture or fittings that she or he has supplied. It is sometimes possible to argue for an implied term to make the landlord liable to repair in this situation, but this leaves the position uncertain and unnecessarily complicated in this regard.

The proposed amendment would ensure that the legal responsibility for furniture, fittings, fixtures and appliances in furnished tenancies falls where it should lie: namely, upon landlords. Given that furnished tenancies are usually short term, it is completely unrealistic to expect tenants to carry out such repairs themselves. These repairing obligations should fall on the landlord, not the tenant. This amendment would ensure that this was the case.

Amendment 88 would ensure that all tenants can live in housing that does not injure the occupier’s health. Again, it refers to the same Landlord and Tenant Act and the same obligations. The courts have decided that the obligation to repair arises only where there is disrepair—namely, where there has been deterioration from some former condition. As such, the obligation to repair does not usually cover design defects. However, sometimes unhealthy housing conditions arise not from disrepair but from design defects. The most common example is condensation dampness which occurs as a result of the construction of a dwelling house; namely, through inadequate insulation, ventilation and/or heating, and not because of any disrepair to the structure or the installations supplied. The point is extremely important because currently tenants living in unhealthy conditions which arise as a result of design defects are unable to take any civil action to ensure that these conditions are rectified. While it may be possible for tenants to take action in the magistrates’ courts under the Environmental Protection Act 1990, no public funding is available to take such cases. Local authorities can also bring proceedings under the 1990 Act but, of course, are unable to bring proceedings against themselves.

Amendment 88 would enable tenants to take civil proceedings in order to make their landlords rectify design defects which render the premises injurious to the health of the occupiers. It seems only right in the 21st century that tenants of residential accommodation should expect to live in accommodation that does not injure their health and should be able to take steps to rectify the defects giving rise to these conditions whatever the cause. In relation to the installations in a dwelling house, tenants are already able to take civil action to rectify design defects which result in the specified installations not being in proper working order. They should also be able to take action when the defects affect, or will affect, their health.

The public spending implications of this are not great because the decent homes standard has improved the public housing stock. The main benefit of this amendment would be private tenants of rogue landlords, where the worst of the housing stock now rests. Indeed, giving such tenants a private remedy could reduce public spending because it would take some of the pressure off hard-pressed local authorities, which have the job of enforcing the housing standards in the Housing Act 2004, and could also provide savings to the National Health Service. The current necessity to draw a distinction between disrepair and design defects, as opposed to simply concentrating on the effects on the occupier, makes the law in relation to repairs unnecessarily complicated and results in the need for expert evidence on the cause of the problems. Removal of the distinction would greatly simplify the law in relation to disrepair. This proposal would therefore benefit not just those tenants who are presently living in unhealthy housing conditions but the civil justice system as well.

Amendment 89 would make landlords responsible for the repair of installations for ventilation, particularly extractor fans. The Landlord and Tenant Act 1985, as currently enacted, makes no provision in relation to installations for ventilation, save in respect of windows. Lack of ventilation is a common cause of condensation dampness in dwelling houses and is often prejudicial to health. Over the years many properties have been fitted with extractor fans in order to combat this problem. However, there is presently no obligation on landlords to keep such installations in repair or proper working order unless this is expressly provided for in the tenancy agreement. Few tenancy agreements, even those of social landlords, make specific reference to extractor fans, with the result that tenants have no remedies when extractor fans break down or do not work properly. Given that extractor fans are usually fitted by landlords, the responsibility for repairing them should fall on the landlord, not the tenant. This amendment would ensure that this was the case.

Finally, Amendment 90 seeks to ensure that all tenants and other occupiers of housing can live in housing that is fit for its purpose. In 1996, the Law Commission recommended that, subject to certain exceptions, an implied term of fitness should be imposed on all tenancies of less than seven years. This proposed new clause goes a little further in that it would apply the term not only to tenancies but to licences. It seems only right that any occupant of residential accommodation should be able to expect accommodation that is free from damp and has natural lighting, ventilation, a water supply and other basic facilities for sanitation and the cooking of food. At present, the other main repairing obligation in Section 11 of the 1985 Act is confined to matters of disrepair. Therefore, if a property is unfit in the respects mentioned above because, for example, of design defects, the occupier has no remedy. That cannot be right. A house with no damp-proof course could be rendered so damp as to cause the tenant pneumonia but there would be nothing in the tenancy agreement to compel a landlord to install one. On the other hand, if there was a damp-proof course in place that had failed through disrepair the tenant would have a contractual remedy. That is an absurd anomaly.

Public spending implications again are not great because a decent home standard has improved the public housing stock. Again, the main benefit of this amendment will be private tenants of rogue landlords, where the worst of the housing stock now rests. Indeed, giving such tenants a private remedy could reduce public spending because it would take some of the pressure from local authorities who have the job of enforcing housing standards in the Housing Act 2004.

In the recess, my noble friend the Minister replied to me following Committee stage. I should like to pursue a sentence in the letter that I received because it caused me some concern. I am sure that that was unintended but we need to clarify the record. In terms of repairing obligations on landlords, the letter states that,

“where there is no evidence to the contrary I am not prepared to increase burdens on landlords with the attendant risks for growth in the sector”.

It is inevitable that the private rented sector will grow but I am puzzled by what I would regard as the basic standards of accommodation, with basic attention to repair and maintenance of properties and enabling people who are tenants to live in accommodation that is fit for purpose. I do not see that as a risk for the sector. People have a right to expect a basic standard of accommodation and I hope very much that my noble friend will put my mind at rest and confirm that there should be applied a basic standard that needs to be delivered through amendments to the law. At present, too many private sector rented accommodation units are falling through the legislation that currently exists because it has not been modernised—well, in the past 25 years—to a standard that would reflect current modern needs.

[Lord Beecham]

My Lords, Newcastle is once again united. We are even more united now than we were under the previous Administration. I congratulate the noble Lord, Lord Shipley, on tabling these amendments and equally congratulate those who have briefed him so thoroughly with the material that he has brought to your Lordships’ House today. He has highlighted an important area of the national housing debate which has been subordinated in recent times to the simple question of household numbers, housebuilding and the long queue of people denied access to accommodation, including first-time buyers and their problems. Much of the emphasis has been simply around numbers and the owner-occupied sector.

The real problems addressed by the noble Lord’s amendments are to be found essentially in the private rented sector, which has received insufficient attention for many years under Governments of both parties, with the result that, as the noble Lord pointed out, far too many people are living in unsatisfactory accommodation. We are living in a letters’ market, as it were. Demand for rented accommodation is going up all the time and obviously property numbers are not going up to match. Reputable organisations are anticipating additional problems when changes in housing benefit come in, and already there is some indication that private landlords are reluctant to let to housing benefit tenants. There is huge pressure within this sector. As the noble Lord pointed out, that sector has much the highest rate of disrepair and the least degree of modernisation through to decent home standards. Therefore, there is a huge need for concentration on these problems. The very basic matters to which the noble Lord referred must be an essential part of the responsibility of any landlord.

There will be a slight irony if the Government resist the amendment. If the exterior of a property was at issue, Town and Country Planning Acts would apply. Owners can be made to tidy up the outside of their property, and even paint it, whatever the length of tenure or even if it is owner-occupied; but when it comes to the inside, as the noble Lord pointed out, these powers do not exist for far too many properties. Therefore, there is nothing wrong in principle with imposing obligations on owners—in this case, renting owners—because they are applicable to all owners as far as concerns the property exterior. One might have thought that, from the point of view of safety and health, the interior is more important. It is perfectly logical that legislation should be amended in the way proposed by the noble Lord.

I will sound a cautionary note. The noble Lord referred to the availability of civil proceedings once the measures pass into law. Again, I remind noble Lords that access to the courts by this group of potential litigants is likely to be affected by the pending changes to legal aid. If current proposals go through, only under exceptional circumstances will legal aid be available to assist tenants in enforcing repair obligations of this kind. Perhaps that should be borne in mind in future debates. I hope that the noble Lord and his colleagues will join Members on all sides of your Lordships' House in investigating those steps very thoroughly, because these matters are not divisible. If we are looking at the housing situation holistically, we must look not only at obligations but also at methods of enforcement. The noble Lord touched on them. We must be sure that those methods remain available to the people who will need them.

I hope that the Minister will respond sympathetically to the suggestions contained in the amendments. I represent an area that has a significant private rented accommodation sector. There are a number of very poor landlords and a licensing scheme that is beginning to have some impact. I hope that that experience, which is reflected in many places, will be improved by the Government giving fair wind to the noble Lord's proposals.

[Lord Kennedy of Southwark]

My Lords, I will speak only very briefly in this debate as the Newcastle duo—the noble Lord, Lord Shipley, and my noble friend Lord Beecham—have covered the matter thoroughly. We support the thrust of the amendments tabled by the noble Lord, Lord Shipley. They address real issues and I am grateful to him for raising them. I look forward to the response of the noble Lord, Lord Taylor.

Localism Bill

Lord Beecham Excerpts

Wednesday 7th September 2011 Lords Chamber

[Lord Best]

My Lords, Amendments 41 and 51 are also about local authorities having greater freedom to organise their housing affairs without constant barriers being put in their way. These amendments concern the restrictions on local authorities that flow from taxing the sales of right-to-buy properties or any other sales of properties by housing authorities at 75 per cent of the money received by the local authority. Housing associations can sell properties, whether under the right to buy that they operate or on the open market where they have a vacant property. They can recycle 100 per cent of their receipts back into housing, to improving their housing stock and to building new homes.

The housing association of which I used to be chief executive, the Joseph Rowntree Housing Trust, had a programme of selling alternative vacant properties on our estates so that we could get a better mix of people of different incomes living in the same community. We could replace every home that we sold because we received 100 per cent of the funds from that sale to recycle into new homes elsewhere. However, local authorities have to pay 75 per cent of their proceeds back to the Treasury. Now that we are in the mode of reforming the housing revenue account, this seems to be the moment at which that restriction should be lifted and local authorities should be liberated to recycle the proceeds from sales.

I understand that the Treasury is very reluctant to forgo the receipts that it currently collects. That perhaps is understandable, because this is serious money that is coming into the Treasury. It has managed to scoop the pool here for many years, and tens of billions of pounds from right-to-buy sales have gone into the Exchequer. I understand that it does not wish to say goodbye to those arrangements. I also understand that in settling the debt in the new self-financing scheme for local authorities, account has been taken of the rental income that people will forgo once a property is sold. Nevertheless, saying goodbye to 75 per cent of the proceeds from right-to-buy sales, in stark contrast with the way housing associations are treated, seems to be an item on which reform at this time would be very significant.

Let me make it clear that it is not only right-to-buy sales that attract a 75 per cent tax—not a tax on the capital gain, but a tax on the sum received—as it is also imposed on the sale of bits of land and properties that are vacant and not subject to the right to buy. Where local authorities, like the Rowntree trust, would like to sell council houses to get a better mix of incomes across an estate, local authorities will not be able to recycle the proceeds from those sales, as they will have to pay 75 per cent to the Treasury. I think that the Treasury will argue again that it would like to see those receipts coming back to it since deficit reduction is top of the list of the Government’s priorities, but the Treasury is not going to receive anything from the sale of properties outside of the right to buy if local authorities know that it is such a bad deal to sell them in order to regenerate an area using the money they raise. No businesslike authority will proceed with these sales in order to pay money to the Treasury as a voluntary act. Local authorities simply will not do it. The Treasury is not going to forgo capital receipts if the 75 per cent tax on councils is lifted for those properties where the right to buy does not exist—in other words, where the council can make a sale voluntarily rather than being compelled to do so, as with the right to buy. I hope that the Government will be able, if deficit reduction in this spending round is so paramount that nothing can be done about the right-to-buy receipts, at least to offer to some extent a reassurance in relation to the sales of other properties that are not subject to the right to buy.

During the summer I have had discussions and correspondence with the Minister, and I hope that she will be able to tell us this afternoon that there may be some change of the Government’s mind about this very severe restriction on local authority activity, one where the ludicrous level of taxation makes it very difficult to run a business. I beg to move.

[Lord Beecham]

My Lords, the noble Lord referred to the 75 per cent tax levied on the proceeds of right-to-buy sales. It is interesting to note that at the moment there is a good deal of pressure on the Government to abandon the 50 per cent tax charged on those with substantial incomes and that, indeed, at least part of the coalition Government is interested in a mansion tax, which I suspect would be levied at substantially less than 75 per cent. In the context of housing, we should not be thinking in terms of taxation. The nation is paying a very heavy price in terms of housing need for the refusal of Government, initially in the 1980s, to allow any of the proceeds of the sale of council housing to be reinvested in housing and, it must be said, for the somewhat belated and modest change that was made to those rules by the previous Government. It does not seem to make any kind of economic sense.

The money raised by the right to buy would be ploughed back into housing provision. That would have two effects, the first of which would be that it would create assets on the balance sheet; it would not disappear into thin air. Secondly, it would give a much needed boost to the construction industry and therefore to the economy at a time when, as the Chancellor has belatedly conceded, things are not looking good in terms of the projected growth rate. Thirdly, it would lead to employment being taken up and thus a reduction in the cost of paying benefits. Most particularly, I suspect that the result would be that houses would be built rather more quickly than through the hoped-for gains to be made by the proposals in the national policy planning framework, which seem to assume that planning is the reason for the low number of houses being built, whereas of course the key issues are in fact finance and people’s capacity to buy.

Looking at it purely in housing terms, the noble Lord’s amendment makes a great deal of sense. I hope that the Government will rethink their position because it would make an immediate and much more significant contribution to dealing with the housing problem, as well as helping with economic growth without damaging the balance sheet. Indeed, in some respects it would strengthen the balance sheet with assets that are likely to appreciate.

[The Earl of Listowel]

My Lords, I hesitate to speak, having not taken part in previous work on this Bill, but my noble friend’s amendment and his words bring to mind some research that was brought to my attention some years ago into lone mothers living in isolation with their children, scattered around cities. They were often forced to live a long way from their communities and extended family because there was insufficient housing stock to enable them to be placed closer by. So if my noble friend’s amendment will help local authorities to supply enough housing to ensure that parents—more often than not mothers—bringing up children on their own had easy access to their communities and extended family, I certainly want to support it.

--- Later in debate ---

[Lord Beecham]

My Lords, I welcome the contribution of the noble Lord, Lord Newton, not least because he is only the second Conservative Back-Bencher to speak in seven hours of debate on Report. I dare say we will hear a great deal more from him and, I hope, others as we go forward.

I entirely endorse the remarks that have been made so far by noble Lords, and I share the experience of the noble Lord, Lord Tope, of serving as a local councillor. It is frequently a local councillor’s task to take up tenants’ complaints, as one does, with the relevant housing department or ALMO—many authorities have now transferred their stock—to help people through the council’s complaints procedure and to help them move complaints to the ombudsman. Many of us have done that. I find it rather patronising of those who suggest that it is somehow necessary to reconnect councillors with social housing. Most of us who represent areas with social housing regard that as part of our daily, weekly and monthly routine.

However, there are some additional issues to which I would like to refer briefly. First, as I read the Bill, there need be no nexus between the individual making a complaint and the councillor for the area in which he lives, because the Bill speaks of a member of the housing authority. It could be from one end of Newcastle to the other in my own case. There is no necessary connection between the tenant and the member he approaches, and that is hardly sensible, even if one follows the line of the Government’s thinking on this matter.

Secondly, I presume that under the adjudication by the ombudsman there may be the possibility of an award of compensation. That is not necessarily binding on an authority, but it is pretty indicative and most authorities, though I regret to say not all, comply with those recommendations and make a payment when one is indicated. On the face of it, it would seem that the individual member adjudicating would also have that responsibility. It seems distinctly worrying that there should be implicit pressure on a member not only to make a finding but also, perhaps, to award compensation. That does not seem to be a healthy relationship between an elected councillor or, for that matter, a Member of Parliament, and a constituent.

The third factor that we may have to bear in mind is that there are pending changes in the legal aid and advice system that will effectively strip people of their right to legal aid and advice. In this housing area, whether it be with local authorities, housing associations or other landlords, there is frequently a need for legal advice and support, and one fears that effectively removing that source will be unhelpful to tenants. Frankly, imposing the responsibility on elected members, whether councillors or MPs, is by no means a substitute for such proper advice.

All these factors tend to the same direction, namely that the amendment should be accepted by the Government. There is no huge political issue here. As we have heard, there is no demand for this outside, from tenants, their representatives or anybody else. There is no logical basis for the recommendations and I hope that the Minister will indicate that she will think again about the desirability of this additional superstructure on a system which is working perfectly well.

[Lord Whitty]

My Lords, my name is on Amendment 68, which provides for a dual system. I do not think anyone is arguing that the tenants or leaseholders should not have the right to call in their councillor, MP or tenant panel. The issue, as has been said, is whether they should also have—from the start, not just when they have already been to their councillor—the ability to go direct to the ombudsman.

I have two points on this. First, it is not only a contradiction to principles of administrative law, it is also a direct contradiction to most consumer practice in the rest of the economy. As the noble Lord, Lord Newton, said, there are numerous ombudsmen. Some were set up by Parliament, such as the financial services and energy ombudsmen, and some are industry-based, dealing with anything from double glazing to property. In none of those cases is there a filter after the initial filter of having to raise the complaint with the provider in the first place, as my noble friend Lady Hollis has said. After that point, there is not a single example where a third party, of whatever description, is required to intervene. That may be discrimination against the English, but it is certainly discrimination against tenants and leaseholders as compared with any other consumer.

Secondly—this ought to be an obvious point, but it has not yet been spelled out in this crude way—there are a lot of reasons why individual tenants and leaseholders may not want to go to their local councillor. They may have fallen out with them, or had a terrible decision from them, or they may be their political opponent. There are also all sorts of reasons why they may not wish to raise the issue through the tenant panel, although I believe that is a good innovation. They may know people on the panel whom they disagree with or they may not approve of earlier decisions made by the panel. It surely should not be for Parliament to say to them that, despite all their reservations and previous experience, they must go through one of these three channels. All three channels are important and should be there, and if they need to be put on the face of the legislation let us do so. But we must not deny the ordinary social housing tenant or leaseholder within social housing provision the right to go direct to the ombudsman. I plead with the Government to drop this absurdity.

--- Later in debate ---

[Lord Palmer of Childs Hill]

My Lords, this amendment also has the fatal “o” word—ombudsman—in it, but noble Lords need not be afeared because it is a very non-contentious issue to which the noble Baroness, Lady Hanham, has kindly replied, and I agree with her answer. I tabled the amendment about the ombudsman because, when reading the Bill, one notes that the Housing Ombudsman will make a determination, but no mention is made of any compensation element. Determination is all very well, but an applicant may want monetary payment or grovelling of some sort and that is not mentioned in the Bill.

When investigating this in advance of the helpful reply of the noble Baroness, Lady Hanham, I went back to Schedule 2 to the Housing Act 1996, which says, as the Minister implied, that the Housing Ombudsman may,

“order the member of a scheme against whom the complaint was made to pay compensation to the complainant”.

It is already in law that compensation of a monetary sum can be paid. I will make what is almost a drafting point. The laws of this country are so entwined and confused that it is wrong that one has to keep referring back to previous Bills to understand the Bill that one is looking at. We are not talking only of lawyers who will go back and say: “Ah, that is in the Housing Act 1996”. In this Bill one does not see any element of monetary repayment as compensation. I seek acknowledgement that, in whatever paper forms are produced, there will be a cross-reference to the 1996 Act so that people can see that there is a determination. I would be very happy if the Minister would confirm something on those lines. I beg to move.

[Lord Beecham]

My Lords, I will follow the noble Lord, Lord Palmer, on the question of compensation. Clearly, the ombudsman route provides the possibility of compensation. It is not certain whether that would apply to the alternative route, which we debated at some length earlier. Perhaps the noble Earl could indicate whether under the alternative method of the designated person—a councillor, Member of Parliament or tenant panel—there will be the opportunity for a compensation payment to be made by the designated person. If not, we would have two systems, one of which would afford the possibility of compensation while the other would not. I am sure that the noble Earl much appreciated that word in his shell-like ear. In the event that we will have two competing systems, will the Government ensure that guidance is given to tenants that that is the case—in other words, that under one system they may get compensation while under the other they will not? The matter could be discussed in the forum to which the Minister referred. Strange circumstances could arise if the situation were not clear.

[Earl Attlee]

My Lords, Amendment 74 highlights the Housing Ombudsman’s power to order a member landlord to pay compensation to a complainant. I understand that my noble friend would like there to be greater clarity on how the ombudsman calculates the level of compensation to be awarded and I am grateful to him for raising the issue. Our view is that it is not necessary to include any new specific requirements in the Bill. In practice the ombudsman already provides a breakdown of any compensation he has decided to award, which is done in the context of what the ombudsman considers to be fair and reasonable in all the circumstances of the case. This arrangement allows flexibility to address specific issues and to provide a useful level of information, depending on the circumstances of each case. Clearly it would be difficult to attain this flexibility in a legislative duty on the ombudsman.

The ombudsman is intending to consult early next year on a revised statutory scheme to reflect the proposed extension of his jurisdiction to include complaints about local authority landlords, in addition to housing associations. I have no doubt that there will be further opportunities through that consultation process to engage on these and other issues. In answer to the question asked by the noble Lord, Lord Beecham, anything referred to the ombudsman means that compensation can be paid.

[Lord Beecham]

My question is in relation to the other routes that have been included in the Bill and which may be taken further in discussions before Third Reading. Would compensation be payable when the matter is dealt with by a local councillor, Member of Parliament or a tenants panel? If not, would that be made clear to the applicant, whereas the ombudsman would provide the possibility of compensation?

[Earl Attlee]

My Lords, in view of the complexity, a detailed letter would be appropriate.

--- Later in debate ---

[Lord Kennedy of Southwark]

That is a very interesting response. I have heard the exact opposite from the government Bench on many other proposals.

[Lord Beecham]

I remind the Minister of the thrust of the question of the noble Lord, Lord Best—the risk that because an order is enforceable, the RSL sector is regarded as being within the public sector, with consequential adverse effects on the financial status of its expenditure in relation to the Government’s expenditure requirement.

--- Later in debate ---

[Baroness Doocey]

My Lords, I declare an interest as a member of the London Assembly and the Metropolitan Police Authority.

This amendment seeks to deal with the nature and extent of overcrowding and to highlight why the present law is inadequate and needs reform. Overcrowding is an invisible problem compared with homelessness and rough sleeping. Consequently, it tends to be viewed as less of a priority. But overcrowding has a serious impact on children, especially their health and educational attainment, and it disproportionately affects larger households.

Overcrowding is a major problem in London. In 2008 London had more than 200,000 overcrowded households, almost 7 per cent of London’s homes. That was an increase of one-third over the previous decade. About half of these overcrowded households are in the social rented sector; overcrowding is worse in that sector than in any other form of tenure. London has over 40 per cent of England’s overcrowded households in the social rented sector, and nearly 400,000 London children live in overcrowded conditions. The overcrowding rate for black and minority ethnic households in London is about four times that for white British households.

There is no doubt that overcrowding is largely a consequence of housing supply shortage. Therefore this amendment is not a complete solution to overcrowding. For that, we need to build many more homes and, in particular, larger family homes. But this amendment is intended to deal with the abuse of the existing housing stock.

Breaching legal overcrowding standards is a criminal offence, but the official definition of overcrowding has survived unchanged since 1935 and is seriously outdated. Relatively few households are legally overcrowded even though some people have to sleep in living rooms and kitchens. There is little incentive for local authorities to tackle the problem if the law is not actually being broken. This amendment meets the need to provide an updated definition of statutory overcrowding based on the bedroom standard. This would realign the law with the actual problem and would therefore provide local authorities with an incentive to reduce overcrowding. Once there is a serious legal incentive in place for local authorities to tackle overcrowding, it may force them to reorder their priorities when it comes to housing allocation policies.

Overcrowding is a very serious issue. So if the Government are not minded to accept this amendment, perhaps my noble friend the Minister could outline what the Government propose to do to update the official definition of overcrowding, which has not changed for the last 75 years.

[Lord Beecham]

My Lords, even in your Lordships’ House there are not many of us who were around when these standards were laid down in 1935, as the noble Baroness has pointed out. Housing conditions in general have improved since those days, but she is quite right to draw attention to serious issues around overcrowding. They are not confined to London, although her figures show these issues are extremely problematic in the capital. She is also right to draw attention to the particular problems faced by some BME communities, many of whom have large families and find it difficult to secure accommodation which is adequate to house them.

I have every sympathy with the amendment. I note that the measurements are given in “old money”, when perhaps these days we should be looking at metric equivalents, but that is a trivial point. I am however somewhat at a loss as to how to respond to the Government’s response to the amendment. It seems to be based, to put it crudely, upon facile optimism about the effects of the measures that are being taken around the duties to deal with homelessness and, in particular, the use of flexible tenancies as a means by which, apparently by magic, accommodation of the appropriate size in the appropriate location will become available. The Minister for Housing assured us at a meeting a couple of days ago that he does not expect flexible tenancies to go much less than 10 years in duration, as opposed to the two years that was thought to be the benchmark. In his view—I hope he is correct—that will in fact constitute only a handful of cases. Given that, I cannot see how this measure is going to free up significant accommodation in general, let alone for this particular category.

It seems to us in the Opposition that the noble Baroness has touched on a key issue and the Government’s response thus far has not addressed it to any significant extent. Identifying the issue and improving the standards by which the question of overcrowding is to be judged does not in itself transform the situation, of course, but it would certainly allow housing authorities and the Government to have a better view of the reality of the situation.

I hope that the noble Baroness will not mind me quoting the example she gave in a conversation with me, of a recent case of a child sleeping in a bath which was deemed by the housing department to be acceptable because the child was in “a room”. It is extraordinary for this situation to be acceptable to a housing department in 2011. It could hardly have been acceptable in 1935. But statutorily it is acceptable, and she has other examples of that kind. This is extremely worrying and I am sure the Government would be horrified if there were found to be a significant number of such cases.

Strengthening the framework will allow a proper measurement to be taken of the degree to which this is an issue that needs to be addressed, and with a greater urgency than is likely to occur simply as a result of the other changes that the Government have made. I hope that the Minister will talk further with the noble Baroness to see how this can be improved and, beyond that, agree that this is an issue that should be pursued outside the context of this Bill as the Government look into housing policy generally.

[Baroness Gardner of Parkes]

My Lords, I am sympathetic to the idea of the need for action on this. I was very distressed this week to meet someone in a studio flat, or self-contained bedsit, who told me it is impossible for her to sleep. The private accommodation units where she resides are listed as being for one person, but immediately above her, accommodation of the same size is shared by five people. She finds it impossible to sleep, or even live there. She is trying to find somewhere to move to in any case, as her small accommodation is going up from £600 per month to £800 per month, but she works as a cleaner and is experiencing great difficulty.

What worries me is that this is an illegal overcrowding, from what the noble Baroness has said, and yet the tenants are frightened to do anything about it for fear of being put out. I asked her why she did not report it and she said she did not dare because she would be put out and would have nowhere, and until she could find somewhere to go to she could do nothing. This is what worries me about this amendment. It is marvellous to make all these proposals but where is the accommodation going to come from to house all these people?

I come from a very big family and we were fortunate enough to have a house, and space is not so limited in Australia, but if you have a big family would you not rather be somewhere safe and secure, even overcrowded, than nowhere at all? I am very concerned about the impact of being too precise about things. As I say, in theory it is absolutely marvellous but I would really like to know how it is going to work in practice.