Localism Bill

Lord Beecham Excerpts

Tuesday 12th July 2011 Lords Chamber

[Lord Best]

My Lords, I give qualified support to Amendment 148 in the name of my noble friend Lady Greengross and to Amendments 148ZZZA and 148ZZZBA tabled by the noble Lord, Lord McKenzie. My support is qualified because the words,

“the local planning authority must”,

are not popular in local government circles. I would find it hard to be entirely supportive of extra obligations being placed by central government on local authorities, but I am supportive because noble Lords are absolutely right that collecting local data on housing markets and making them available, not least to any neighbourhood preparing a neighbourhood plan, as well as to the local authority preparing its local development plan, is more than just good practice; it is essential if housing providers are to meet local needs and demands.

To take the example of the area of interest to the noble Baroness, Lady Greengross, if the local authority’s assessment shows that many thousands of family houses are occupied by one older person or an elderly couple, with the certainty that all those occupiers will grow older in years to come, clear signals can be given to private house builders and housing associations that there is a big market for attractive, manageable, economical apartments that are tailor-made for older people to buy or rent.

I give full backing to the intention behind these amendments and hope that their objective of getting local authorities to do what they should can be fulfilled, not least through the national planning policy framework, even if that objective is not accomplished by a new obligation on local authorities.

[Lord Beecham]

I hesitate to express a slightly different point of view as a vice-president of the Local Government Association from our esteemed president, but I am not quite as reluctant as he is to see this kind of duty, as proposed by the noble Baroness, Lady Greengross, and my noble friend Lord McKenzie, incorporated into the law, particularly given the state of the housing market in general and the huge unmet demand for housing, particularly affordable housing. It is important that all authorities recognise that there is a need to promote the provision of more accommodation. It is noticeable that since the disappearance of the regional spatial strategy, something like 200,000 houses it is estimated will no longer be built that would have been built had those plans been progressed.

I add one further dimension to the prescription from the noble Lord, Lord Best, for encouraging new building. I entirely agree with him that it is very desirable for private builders and housing associations to help to cater for the needs of an increasingly ageing population and indeed others. To that I would add local authorities themselves. That might be something that they would appreciate. Perhaps as a quid pro quo for having the extra responsibility of drawing up plans for affordable housing, the fact that they might actually be able to provide some themselves might be an additional incentive. I hope that sweetener will persuade the noble Lord, Lord Best, that his qualification might safely be abandoned.

[Lord Whitty]

My Lords, I support the principles of the amendment proposed by the noble Baroness, Lady Greengross. A whole section of this Bill later on in Part 6 deals with social housing and changes many of the existing arrangements for tenure, what the local authority is obliged to provide and tenants’ rights. Some of them I support and some of them I strongly oppose. However, the whole point of a social housing strategy is that it relates to the totality of the housing need in the area. Unless there is a provision somewhere in this Bill, such as the provision suggested by this and related amendments, dealing with social housing in the abstract is nonsense.

All forms of housing tenure are in crisis. We know that a lot of people who would have got a mortgage by the age of 30 now can no longer get a mortgage until their late 30s or even into their 40s. More and more people are having to rent in the private sector and are being delayed in setting up an independent household. We know that the rate of household formation is growing because of various developments in society, but it is growing at twice the rate of new build housing. We therefore have to have an holistic approach to housing need, area by area. If we are not going to achieve the targets through the regional spatial strategies, which I admit were a bit Stalinist in their approach, we have to ensure that the local authorities themselves take responsibility for looking at housing need in their areas and assessing it against their private sector development plans and the social housing that they and the housing associations in their areas can provide.

Somewhere in this Bill we need to tell local authorities that part of their responsibility from now on must be assessing total housing need against costs, against price and against demographic trends. That is not covered by the 2004 Act in sufficient detail. Given what I would regard as something close to a crisis in the housing market in all forms of tenure, I think it would be appropriate for us to set that out in the Act. Then, when we consider the social housing provisions, we can set them against a requirement for every local authority to assess needs, supply, demand, price, and demographic and employment changes, and to set its social housing targets and provision against that background. Unless we do that, social housing is isolated and is a residual form of housing based on what is already there. It does not relate to the needs of the totality of the community in which local authorities operate. If the Government are prepared to accept the noble Baroness’s amendment here, they need to say that at least somewhere in this Bill, and we need to ensure that local authorities behave accordingly.

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[Lord True]

My Lords, if my noble friend wants to come to our high street, he can have 30 minutes of free parking. The Mill Road story, to which my noble friend referred, is extremely interesting. Unfortunately, the Tesco Express, which was its original focus, was successful. There are defects with all the amendments before the Committee; I hope that my noble friend will not feel that all of them have to be addressed.

I was very encouraged by what was said in the other place. One difficulty is that not everyone has the same view of vitality. My predecessor as leader of my council from another party said that he would be delighted if he heard that a Tesco was opening in his area, because it would bring people to that shopping area. We must address head-on the nature of the retail multiple and the manner of the high street. Can my noble friend assure us that before we finish examining the Bill, when we have seen the national framework, Parliament will give local authorities real power to deal with the problems which my noble friends, Lord Cotter and Lord Greaves, and the noble Lord, Lord McKenzie, raised? That is all I ask for at this stage, not a detailed commitment. I hope that my noble friend can give that assurance.

[Lord Beecham]

My Lords, I warmly endorse the thrust of the three amendments. It is clearly desirable to have a proper planning framework to encourage retail diversity. However, although that is necessary, it is not a sufficient condition of ensuring that we get retail diversity. There are other significant considerations, particularly financial considerations and other policies which may militate against the achievement of the aspirations of the amendments—with which I entirely concur.

I can cite examples from my experience. When I was chairman of the development committee in Newcastle, I tried to persuade our partners in the city centre shopping centre—we were partners because we owned a substantial stake in it—to diversify the offer to try to get away from chainstores, which were pretty much all we had there, and provide for some niche retailing. Despite the fact that we were significant shareholders, I was totally unable to persuade them to do that.

In another example of the Tesco influence, in the west end of Newcastle adjoining a street in an ethnically mixed area with a lot of little local shops and one or two other retailers, Tesco has secured planning permission to build a largish store on the site of a former hospital. The hospital is very keen to get the money from it, for obvious reasons. I am afraid that council officials supported the recommendation, and indeed an inspector upheld the recommendation. So we have a Tesco store not far from the town centre that is likely to do serious damage to local shopping.

I fear there are policies that might encourage that kind of trade-off, where you are effectively getting a financial benefit—in that case for the hospital but in other cases for the local authority itself. Most of us welcome the proposal for tax increment financing but that puts a premium on promoting development that will generate significant rateable value on which you are then going to borrow. There will be a temptation, frankly, to push that kind of development at the expense of the kind of development that these amendments are interested in promoting, which is less likely to contribute hugely in terms of rates and certainly is more difficult to put together. So you potentially have a policy that might militate against the thrust of these amendments.

We are also now going to get a range of enterprise zones. I do not know if the Minister can tell us whether there will be any restrictions this time round on retail developments in the enterprise zones. As I understand it, it is pretty much carte blanche for whoever develops these zones. Again, I speak from experience—and there are other Members of your Lordships’ House who will know the kind of damage that was done to city centre shopping in places such as Newcastle, Manchester, Sheffield and Birmingham by some very substantial out-of-town shopping developments in enterprise zones. Enterprise zones were originally designed to promote investment in manufacturing industry and so on. It would be unfortunate if again they were to be captured by the interests of large retail developers, thereby threatening diversity in existing centres.

These amendments are entirely on the right lines and I hope that the Government will consider them very seriously. However, I also ask them to recognise that there is a need to look at the other policies that impinge on this area and try to ensure that there is a sensible look across the piece at the implications of a range of policies on the objectives that these amendments seek to promote. Perhaps that is a debate for another occasion but I do not think that we can look at these things in isolation. We need to bring them together, and I hope that these amendments may help us start to do that.

[Lord Taylor of Holbeach]

My Lords, I thank all noble Lords for participating in this useful debate on this group of amendments, which has been informed by my noble friend Lord Cotter’s Retail Development Bill and his experience in this area. I am very grateful to him for moving his amendment. As noble Lords, including my noble friend Lord Greaves, have said, the amendments in this group raise similar issues around town centre policy and retail diversity. The noble Lord, Lord Beecham, is absolutely right: a healthy retail economy is the most important thing in maintaining healthy town centres.

We understand and share the concern to ensure that developments should be sustainable. Planning has a key role in achieving this. The coalition’s commitment to this should not be in doubt. We also acknowledge the value to communities of prosperous and diverse high streets. Town centres are key to sustainable growth and local prosperity. They are at the heart of neighbourhoods, giving communities easier access to shops and services. The noble Lord, Lord McKenzie, is right that the Government have already made a clear commitment in debates on this Bill in another place—and, as noble Lords will know, as part of the Budget—that we will maintain strong policies that put town centres first for new retail development.

Perhaps I can address the interest expressed by my noble friend Lord Greaves in Mill Road, which is no doubt an important local area in Cambridge. Local councils have many tools to support local shops—not just planning but business improvements districts and, under this Bill, neighbourhood plans—and to bring complementary developments to the area. There are levers available to assist within the armoury that local authorities have at their disposal.

However, I just caution noble Lords that there is a risk that these amendments are a backdoor attempt to get at supermarkets. We must be clear that town centre planning policy is not pro or anti-supermarkets. Planning cannot seek to restrict lawful competition between retailers; in fact, planning policy is, and has always been—under all Governments and under different controlling administrations of local councils—blind to whether the operator of a retail proposal is a supermarket or an independent. We want the right scale and type of development in the right location to meet people’s shopping needs. That is the issue that we need to be addressing. That is what planning policy can support local councils to achieve in a more practical manner than legislation.

Perhaps I may deal with the point that the noble Lord, Lord McKenzie, made earlier, when he asked about the duty to co-operate in situations where the impact or influence that a development might have crosses local council boundaries. This is analogous to the housing issue. The duty to co-operate is not actually the main safeguard in this respect. Retail developments in one council area must be assessed for their impact on town centres in the catchment area. If catchment areas cross local council boundaries, it makes no difference—the impacts must still be assessed on the basis of the catchment area. This particular safeguard therefore already exists in planning practice.

[Lord Beecham]

My Lords, I just wonder about the definition of town centres. In an area such as Newcastle, the town centre is obvious, but in an area like Doncaster or Kirklees, where a number of towns are brought together under one unitary authority, what would be the definition of a town centre? I am sure that the Minister understands my point.

[Lord Taylor of Holbeach]

I think that I can help the noble Lord. Large centres of population have clearly identifiable city or town centres, but the outer suburbs usually have shopping malls and streets that are very important as neighbourhood shopping areas. We really want to be able to strengthen all these traditional shopping areas that people have been able to access. The whole purpose of this is of course to make sure that we do not lose the heart that lies at the centre of all our great communities. The issue applies just as much to a market town—or coastal town, as we were discussing earlier today—as it does to a large city. That is the focus. I will go on to say that the long-expected, shortly-to-arrive national planning policy framework will indeed make clear what our position is on that.

It is really up to the local council to decide what constitutes its view of a town centre and what it wants for the local population. After all, local councils are best placed to set locally relevant policies for the scale and type of retailer they want to see in their area and to integrate them with other policies on housing and economic growth. The best place to do that, then as now, is in the local plan rather than in a separate retail diversity scheme. Earlier, the noble Lord, Lord Whitty, mentioned the word “holistic”. I quite like that word because I think planning should be done on an holistic basis. More widely, local authorities can work with local businesses to help them offer a distinctive and attractive product to consumers using tools such as business improvement districts.

The noble Lord, Lord Beecham, asked a specific question about enterprise zones. Any retail development in an enterprise zone will still be subject to the strong town centre first policy as in national planning policy. I hope that that satisfies the noble Lord that the Government are ensuring that this matter is addressed properly. Further, I hope that my responses encourage the noble Lord to withdraw his amendment.

Localism Bill

Lord Beecham Excerpts

Thursday 30th June 2011 Lords Chamber

[Lord Greaves]

My Lords, in moving Amendment 120B, I shall speak also to the other eight amendments in this group, which are in my name and in the name of my noble friend Lord Tope, who will arrive in a minute, I hope.

Although we have debated only two groups of amendments so far, we have made quite a lot of progress in discussing the issues around the proposals for referendums. These amendments address the question of who can call referendums under the provisions of this chapter. We approached the question of referendums with some scepticism—that has become obvious. Nevertheless, we understand that there is a localist case for referendums regardless of whether referendums themselves are a suitable part of local democracy. The case was made well by the noble Lord, Lord True, before the lunch break. We are troubled by referendums not just because they present various practical dangers and difficulties, which we talked about last Thursday and this morning, but because of the question of whether local democracy should be plebiscitary or deliberative. The problem with referendums is that they demand a yes or no answer to questions that very often require a great deal of careful discussion and deliberation and are not answerable in a yes/no sort of way; they are answerable in a much more complex way that requires amendment, mediation and compromise between different interests in the community. This is at the heart of the question of who should call referendums.

This suite of amendments would delete those parts of the Bill that allow referendums to be called by a small number of elected councillors. It would also delete the provision that an elected mayor, whether in London or elsewhere, could call a referendum. It would also, perhaps for different reasons, delete the provisions that allow a council itself to call a referendum. I will take those points in order.

In our view, the provision that allows a small number of elected members to call a referendum in their wards is open to a great deal of misuse and abuse. In particular, if,

“one or more members of the authority can make a request”—

in the words of the Bill—then the,

“member for an electoral area”,

or,

“a majority of the members”,

in a multi-member area can call a referendum. It is not clear whether councillors for adjoining wards could join together and jointly call for the same referendum in two or more wards. I put that question to the Minister.

Last Thursday we discussed the danger—so I will not go into it in great detail now—of councillors using referendums in their wards as a tool for re-election, calling a referendum on a populist issue on the same day as they are due to face the electors. An equally dangerous prospect is rivalry within a ward, if perhaps two out of three councillors called a referendum in order to do down the election campaign of a colleague of a different party. A further problem is that wards do not necessarily, and very often do not, match communities.

For all these reasons, many of us find undesirable the possibility that a small number of councillors—one, two or three—can call a referendum in their part of the borough and, as long as it fits the provisions of the Bill, the council will not be able to stop it. The arguments apply equally to elected mayors, who could quite easily call populist referendums to coincide with their own re-election or to boost their popularity. There seems no reason why a mayor should call a referendum about issues that relate to the mayor’s powers because the mayor can address them without a referendum.

As far as the resolution of the council is concerned, these provisions seem unnecessary. Councillors can call referendums at the moment under their existing general powers, and presumably they will continue to be able to do so. They are also able to make arrangements appropriate to the particular referendum that they might want to call. We were given an example in the King’s Lynn area where a referendum called by the district council cost £80,000. It resulted in an overwhelming majority one way, and then the county council ignored it. The argument for not having a referendum on the basis of the resolution of the council is that it is not necessary, and the council can do it anyway without being constrained by the detailed rules and regulations in this Bill.

My final point is that the Bill suggests that referendums can take place within a ward or an electoral division or they can take place in a whole area. However, if you think about towns such as Keighley, which is a clearly separate town within the city of Bradford, why should it not be able to have a referendum, if we are going to have referendums, in a clear community like that? In the case of Burnley, Padiham is a clearly separate town in the Burnley district, but it consists of two wards and bits of other wards; so why should it not be able to have a referendum in the natural community rather than the artificial wards? I beg to move.

[Lord Beecham]

My Lords, I endorse most of what the noble Lord has suggested. In particular I entirely concur with his view that the provision for council members to requisition a referendum is apt to lead to mischief and is unnecessary. It is open to the whole council to choose to have a referendum if it wishes. Perhaps the Minister would confirm that it would even be the case in a mayoral council, that the council as a whole could pass a resolution for a referendum. However, to extend that principle to individual members is unnecessary and likely to be a source of considerable nuisance as well as expense. I hope that the Minister will feel, on reflection, that that particular part of the Bill can be safely abandoned without prejudice to the rights of the public at large.

[Earl Cathcart]

My Lords, I may have misunderstood, but regarding this business about local councils calling for referendums, I thought the Minister said previously that,

“following a request from a member, a referendum may not be held unless the full council has resolved that it be held”.—[Official Report, 28/6/11; col. 1746.]

I therefore thought that we had moved on from that argument.

--- Later in debate ---

[Lord Beecham]

My Lords, as a preliminary point I refer again to the issue raised this morning with regard to the Delegated Powers Committee, because Clause 54 gives the Secretary of State the right to make regulations. Given what he indicated this morning, I assume that the Minister is inclined to adopt the position of the Delegated Powers Committee; namely, that these regulations should be subject to affirmative resolution. I certainly hope that that would be the case. He nods assent, for which I am grateful.

The noble Lord, Lord Rennard, touched on an interesting issue when he talked about paying people to requisition a referendum. I do not know of a precise precedent but certainly an analogous situation arose not too long ago in Greater Manchester, where a large commercial concern, Peel Holdings, was, among others, very hostile to the notion of a congestion charging scheme for Greater Manchester. It launched a campaign in the metropolitan borough of Bury to call for a mayoral referendum in the hope and assumption that an anti-congestion charge mayor of whatever political affiliation would be elected, and because in the great scheme of things a single authority in Greater Manchester—only one authority—could veto the whole scheme, that would be sufficient to jettison this scheme, which the company felt was against its interests.

I understand that the company invested a considerable amount of time, energy and cash in securing the signatures to enable a referendum to be held. It was held and there was a low turnout—I recall that something like 11 per cent or so of people voted in the referendum for the holding of a mayoral election, which then took place. Happily, from my perspective, an equally small proportion of the electorate turned out to vote against having a mayor. That is an indication of the dangers that might arise if there was no restriction on what commercial interests might get up to in the context of securing local petitions. Of course, the difference is that that referendum was binding and other referendums would not be; nevertheless, there is a real danger in that regard. However, I take note of what the noble Lord, Lord True, has said—one must be careful about creating new offences. Although the matter is certainly worth exploring, I do not rush to an immediate view that creating another offence of this kind is necessarily the answer. Having said that, I find it difficult to think of a better solution, so one might have to have recourse to that.

I have an amendment in this group, the number of which escapes me, which relates to Clause 54(7) about the making of regulations, and would require the Secretary of State to consult not only the Electoral Commission but the Local Government Association as well. I hope that the Minister will accede to that. It seems sensible to me to involve the LGA in matters of this kind. However, I do not understand some of the provisions that Clause 54 makes for regulations to be made by the Secretary of State. This goes back to some of the remarks made by the noble Lord, Lord Jenkin, yesterday. Clause 54(4) states:

“Regulations under this section may make provision about—

(a) when, where and how voting in a local referendum is to take place;

(b) how the votes cast in a local referendum are to be counted”.

A simple assimilation of electoral law, in so far as that prescribes these matters, would surely be sufficient. The notion that detail of that kind needs to be made the subject of a Secretary of State’s regulation strikes me as absurd. On the other hand, if there are to be regulations, I do not quite follow the position of the noble Lords, Lord Rennard and Lord Greaves, and, for all I know, his colleagues on the Lib Dem part of the government Benches, who wish to take out of subsection (6) regulations,

“about the limitation of expenditure … for the questioning of the result of a referendum by a court or tribunal”,

or for

“creating criminal offences”.

Those strike me—provided that we have the affirmative procedure—as matters that should or certainly could be included.

[Lord Greaves]

I may have misread the Bill, but my understanding is that the Bill states that they cannot be part of the regulations.

[Lord Beecham]

I beg the noble Lord’s pardon: that is right. I withdraw my last remarks and accept the noble Lord’s amendments to my comments. However, whatever we have in the regulatory framework, the key thing is that the minimum should be prescribed and that whatever is prescribed should be done in conjunction with the Local Government Association and subject to affirmative resolution.

[Lord Taylor of Holbeach]

My Lords, perhaps I may start by saying that the Government are inclined, as I indicated, to accept the concept of affirmative resolution for the regulations. I can also say that the inclination of the Government is for a light touch in this area. We have already seen that there are tensions between a rigorous procedure for the collection of names and the necessary legal restrictions placed on the conduct of elections. The difference between the two is that a referendum is not mandatory, it merely advises a local authority and it is therefore not unreasonable to say that it may be covered by a lighter touch than an election whose outcome is definitive, where the problems to which noble Lords have referred apply. I have spent a lifetime in active party politics, and I know how important it is to try to create a proper framework. I was grateful to both my noble friend Lord True and the noble Lord, Lord Collins, for pointing out the problems that could arise if we tried to set up regulations that criminalised activities in collecting petition names, and the like.

Amendment 129E creates a criminal offence, and Amendment 129C broadens the Secretary of State’s regulating powers to allow the regulations to provide for referendum results to be questioned in court. The creation of criminal offences is simply unnecessary for a regime that is, effectively, non-binding.

One problem that the coalition is trying to deal with is the profusion of unnecessary criminal offences on the statute book. I suggest that the incurring of expenditure to pay someone to campaign to collect signatures falls well below the hurdle that needs to be cleared before persons should be at risk of receiving a criminal record.

I have not examined the situation fully, but my first impression was that the noble Lord, Lord Collins, might well be right, because the reason why it is possible to pay people to work in elections is that their fees are part of the election expenses. It could create problems if they were also involved in a referendum.

Amendment 129B expands the scope of the Secretary of State's power to make regulations on the conduct of referendums to include regulations about the limitation of expenditure in connection with a referendum. The noble Lord, Lord Greaves, is right about what the Bill states on that. We will be discussing the wider issues about publicity arrangements for referendums in a later group.

Clause 46(6)(b) distinguishes between the procedural regulations that may be made in respect of local referendums which are not binding and those which may be made in respect of binding referendums, such as whether to have an elected mayor. We intend that local referendums should be more light touch, given their non-binding nature. The intention behind the amendments may be to limit restrictions on authorities in connection with the question. In fact, the equivalent provision in regulations for binding referendums is used to impose spending limits on petition organisers and those opposing petitions, and they are invariably accompanied by criminal offences for breaching spending limits. We are not convinced that such requirements are necessary for this scheme of non-binding referendums.

We will discuss publication arrangements in a later group and our intentions on that issue. In the mean time, Amendment 129E, which, in hindsight may have been better grouped with Amendment 129D, seems to have little practical effect. It would remove the words “of the referendum” from Clause 55(8). These words may be considered unnecessary but they do not cause any harm and to a small degree remove any doubt that may exist. I cannot say that I am convinced that it is worth making the amendment.

The amendment moved by the noble Lord, Lord Beecham, would insert a statutory requirement to consult the Local Government Association in making regulations about voting in, and the conduct of, local referendums. The Electoral Commission is expressly included in the Bill as it is standard practice in all such electoral matters. I neglected to say in reply to the previous debate that we are consulting the Electoral Commission. However, I can assure noble Lords that we intend to consult widely before making regulations, which will include local government associations. I hope that noble Lords will see these non-binding referenda becoming a very different category from ordinary electoral law and I hope that with these assurances, my noble friend will withdraw the amendment.

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[Lord Jenkin of Roding]

My Lords, I am happy we should also discuss my Amendments 128EA and 129CA. So far in this discussion of referendums we have tended to see it almost in a bilateral way between the public, who might petition and support a referendum, and the local authority, which might be disposed to agree to hold a referendum and have to deal with the results. These amendments are concerned with the third party: a person or company whose activities may have been the cause of suggesting that there should be a referendum. Putting it briefly, they should be involved in some way in the process, being consulted at the different stages and having the opportunity to have their say. This is what these three amendments are about.

When we come to it later, the Bill is perfectly clear on how and why a referendum might be held. It is also clear that it would not be binding on the local authority, but the processes are not as clear as they should be. I will take the example of an airport. I have had the advantage of consulting the company that runs Gatwick Airport, but the issue could apply to similar projects and institutions around the country. Of course, if the proposal is of the major kind that comes within the purview of the Infrastructure Planning Commission, or the MIPU that will take its place under the Bill, there is a separate procedure: I will not touch on that.

In the case of airports, the level for application of the processes of the IPC is if a development would involve more than 10 million passengers a year. That is a pretty big hurdle. A great deal of what goes on—this may apply to power stations or even reservoirs, but will certainly encompass airports—including a great deal of the ongoing development that falls below that limit, will therefore have to be considered by the local authority.

I am not referring now to the question of planning, which we will deal with later when we debate the next clause. The question is whether a project may be put forward that has aroused opposition and may therefore provoke a referendum. Gatwick Airport is a good example because it exemplifies exactly what might be expected. Gatwick is the UK's second largest airport. As I have learnt in the course of my discussions, it has the busiest single runway in the world. That is an astonishing fact, but it is what I am told. The airport serves 200 destinations in 90 countries, with around 33 million passengers a year. The airport recently had a change of ownership. The new owners are very busy developing the airport so that its potential can be properly utilised for the benefit not only of the local economy but of the country as a whole. The airport provides around 25,000 jobs on campus and another 13,000 across the region. It generates a very large amount of wealth, as noble Lords may imagine.

The airport does not operate in a vacuum. It is surrounded by local communities and is close to a number of towns. The owners are very conscious of the need to be responsible developers and to take account of local opinion. They have always done that and I suspect that the new management are doing it rather better than their predecessors. Therefore, we are talking about how to achieve a balance between the very desirable objective in the Bill of giving local residents a bigger say in what happens in the areas in which they live, and giving investors the confidence that is necessary if they are going to develop their business. That is the issue. Hitherto we have been talking about the first aspect: the question of how local communities can have a say. The second, of course, is what these amendments are intended to address.

One should remember that a commercial institution like Gatwick Airport often has to work to extremely tight timetables. It has to raise finance and have regard to its regulator. An economically regulated airport such as Gatwick can face severe financial penalties if the targets set by the regulator are not met. Investors need the certainty that there will be no potential obstacles to meeting those timetables so they can be reasonably sure of avoiding the penalties.

How is this new system going to be applied to them? How are you going to deal with this? The purpose of my amendments, as I said at the beginning, is to provide the clarity which the Bill does not have at the moment. They would provide for a transparent consultation between a local authority and an affected third party—in this case the company running the airport—which might be named in a local referendum as to whether it is appropriate that a referendum should be held at all. Further, if a referendum is to be called that relates to it, it should be notified.

Finally, Amendment 129CA would ensure that a named third party—in this case the manager of the airport or it might be any of the other investors with ongoing development requirements—should be consulted before the local authority chooses whether to give effect to the result at all. We have already discussed that the referendum is not binding: it is a decision the local authority would have to take. All the clause asks is that the affected third party should have an opportunity to have a say and that the local authority should have regard to any representations.

It might be said that these things are so automatic they ought to happen already. I am sure that is not always the case. People can sometimes plough ahead. It may be an unpopular development. I have not been told, but I suspect that around major airports there are communities deeply hostile to what goes on there; it would not surprise me in the least. I used to live near Stansted Airport and, as we have all seen, the opposition to the expansion has been immense. There has been intense opposition. Every airport will have that but they need to be reasonably sure that the managers and the developers can have a proper opportunity to have their say and for their views to be taken into account.

That is what these three amendments do. They provide a level of safeguard against what one might call the unintended consequences of what is otherwise a desirable development. It is people having more of a say about what happens in their own areas. When I questioned the people from the airport they told me firmly, “We agree it is right and proper that local people should be able to express their views on issues specific to their area”. I come back to the point that it is a question of holding the balance. My amendments simply intend to provide reasonable procedures which would enable a better chance with the local authority holding the balance as it should. I beg to move.

[Lord Beecham]

My Lords, with respect to the noble Lord, the first amendment is an unnecessary addition to the responsibilities of local authorities. On the kind of issue the noble Lord has addressed, such as a very controversial issue like an airport or major development, it is inconceivable that a prospective developer would be unaware of a petition doing the rounds. On the other hand paragraph (b) of Amendment 126ZA says,

“any person who is the owner or occupier of any land to which the petition or request relates”.

I can think immediately of situations in my own ward where we have empty properties about which there is considerable concern. There might well be petitions coming to the local authority to do something about them but very often it is impossible to know who the owner of the property is or how to contact the owner. Again, that would create a significant burden and, with the best possible motive, it is overegging the responsibilities of the authority.

--- Later in debate ---

[The Earl of Lytton]

My Lords, I had not expected to speak on this amendment, but I think the noble Lord, Lord Jenkin, raises a very valid point. I live within what is known as the Gatwick Diamond economic area, so I know very well what he is referring to. I know of situations where, for instance, residential development takes place near to industrial premises through normal course of development and re-use. Gatwick Diamond, along with many other areas, is now a 24/7 operation. It is near enough to coastal ports for large lorries to be coming along and near enough to all sorts of aviation-related and other downstream industries.

Local residents may not much like 44-tonne lorries coming along in the wee small hours of the morning. I can quite see that, but it is not fanciful at all to suppose that they might not wish to procure a cessation via triggering a referendum with a view to protecting what they see as their interests. Nor is it a planning-only issue because it may relate to a whole raft of regulatory functions for which local authorities and other bodies have responsibility. While I cannot vouch that the wording that the noble Lord, Lord Jenkin, uses is cohesive, I think there needs to be some regard for the economic consequences of what is being sought by a referendum. It seems that a referendum can be formulated on quite a narrow premise. If that is the case, it is quite possible for it to concern things of a much broader spectrum. It is worthy of consideration by the Minister.

[Lord Beecham]

Does the noble Lord not agree that in matters of the significance and complexity to which he and the noble Lord, Lord Jenkin, have referred, a referendum is probably the least effective way, in terms of time, of drawing the matter to the attention of the local authority? There are ways of doing that through petitions or by addressing local councillors through the local media that would be much quicker and more likely to have an effect than the necessarily rather cumbersome processes that would be involved in a referendum. In those circumstances, therefore, is there perhaps less urgency and potency in the noble Lord’s amendment than might otherwise have been the case?

[The Earl of Lytton]

In response to the very wise comments of the noble Lord, Lord Beecham, it may well be a cumbersome way of doing it but the point is that we do not yet know what the precise trigger is going to be, or the subject matter. The provisions of the Bill cover a very large spectrum of possibilities and we are effectively empowering the Secretary of State to make orders. It is legitimate to lay down a marker as to what the parameters might be—I suspect that is all the noble Lord, Lord Jenkin, is doing at the moment—and just to sound a word of warning. It is timely in that context.

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[Lord Greaves]

My Lords, I have been listening to the wonderful words of the Minister about how important it is that local government should not be encumbered by lots of detailed rules and regulations and thinking that at least we are on the same wavelength. Tongue in cheek, I wonder if he will take a pristine copy of the Bill home with him this weekend, and a nice big red pen, and annotate the Bill in appropriate ways to strike out a large number of the detailed regulations and the 140-odd provisions for yet more detailed regulations for local authorities, and hand it to a civil servant next week and say, “This is your job for a week; get rid of it”. I live in hope.

I move Amendment 126A and the seven amendments in my name and that of my noble friend that are set out in this group together with Amendment 128A, as I announced earlier. There is a useful Labour amendment in the group but I will let the noble Lord, Lord Beecham, speak to it.

Clause 47 is an important clause because it sets out the grounds on which the council should make its decision when it receives a petition or indeed a request from a member about whether a referendum takes place or not. This is not a trivial decision. We have heard that referendums across London might cost many millions of pounds; but for any big councils in big cities, we are talking about millions of pounds. Even for smaller councils, it can be an important item in their budget, or one that is not in their budget, which nevertheless they have to find a way of covering. In the present financial circumstances this might well mean cutting other useful services.

This is a list. Whenever we put forward lists, we are always told by the Government to be very careful because, if we put things in the list, they are in, and if we do not put them in the list, people might think they are not in. In this case, we know that they are not in because Clause 47(1) says:

“A principal local authority may only determine”—

I emphasise “only determine”—

“that it is not appropriate to hold a local referendum in response to a petition or request on one or more of the following grounds”.

The list in Clause 47 is extremely important because it ties the hands of the local authority. It does not say to it, as the Minister has pointed out, that if it is in the list, it cannot have a referendum; however, it provides grounds by which a referendum can be refused. Regardless of whether we agree with referendums, I think that everybody agrees that we do not want a proliferation of them. We do not want dozens of referendums taking place all over the place. We want them held on important and useful things.

These grounds are vital. Amendment 126A refers to the first ground. It is a probing amendment to find out what the words mean. Clause 47(2) says:

“The first ground is that the authority thinks that action taken to promote or oppose the referendum question is likely to lead to contravention of an enactment or a rule of law”.

When I read this, I thought, “What does it mean?”. The phrase,

“action taken to promote or oppose the referendum question”,

refers to something happening during the referendum campaign. It is not about the question itself—what the effect would be of carrying out what the referendum wants brought about; it is about action taken during the campaign which,

“is likely to lead to contravention of an enactment or a rule of law”.

I can only think that this refers to the possibility of public disorder of some sort. Will the Minister say what the Government think it refers to? It is very difficult to see how this could be made to stick if it was challenged, because how would you know that the referendum question would be likely to lead to an unruly campaign? Alternatively, what else does it refer to? If it refers to a referendum question that is, for example, overtly racist, it would be easy to reject it, but the chance of getting such a referendum question is very small indeed. Racists who want to use a referendum to promote their cause are going to be more careful about how they word the question. So this is a probing amendment to find out what it means.

Amendments 126B and 126C challenge the word “influence”, and again are probing amendments. We suggest that this should be brought in more tightly to a council’s powers; that is, the things it can do. Even the general power of competence might be very wide. It is difficult to think of things that people might want to hold a referendum on but over which the council does not have some sort of influence. I suppose that a referendum about the melting of the Arctic ice cap might be thought out of order, but even then it might be tied to the council’s climate change policies, so it is difficult to think of areas where the council has absolutely no influence. Some clarification of what the influence of a council is, in this sense, would be helpful.

Amendment 126D refers to subsection (4)(b):

“a principal local authority or a partner authority has an influence over a matter if the authority can affect that matter by the exercise of any of its general or particular functions”.

That is very wide indeed, and I assume that it includes the new general power of competence. Is that true, because it means that it does go very wide? Amendment 126E seeks to insert a new subsection:

“The third ground is that the action requested by the question is unlawful or discriminatory, or would contravene the authority’s codes relating to equality of treatment or its financial regulations”.

Other noble Lords may think of other things that should be included, but this is clear. Surely it should be laid down that if the action requested by the petition and the referendum question is actually unlawful or clearly discriminatory against an ethnic group, the disabled, men, women or anyone else, and would contravene all the codes an authority has on equality of treatment, or if the council could not do something because of its financial regulations, then it should be able to be thrown out without question. Indeed, anything which it would be impossible for the council to do but is being asked for in a referendum should be more clearly set out.

I turn to Amendment 126F. However, as the Minister has already moved an amendment today, this amendment is not needed, and we are grateful for that. Amendment 126H refers to the grounds set out in the Bill. At the moment they do not seem to be sufficiently wide. A council ought to be able to refuse a referendum if it judges that it concerns a trivial matter and spending money on it would simply not be worth the candle. Similarly, if the council or someone else is doing something anyway, the referendum would be a waste of time because the decision has been made. The Government have already moved an amendment to deal with repetition which provides that another referendum on the same subject cannot take place for four years. That, too, is extremely welcome. Our definition of “disproportionate” is that the cost of holding a referendum is excessive when bearing in mind the cost of carrying out the proposal in question. If a council is being asked to spend £80,000 to hold a referendum when to do what the referendum is asking for would cost only £15,000, it is a pointless waste, whether or not the council wishes to do it.

Finally, we suggest that the fifth ground for the decision is that it is not appropriate because what is being asked for is the allocation of a disproportionate level of resource in one area when it is absolutely clear to the council that it is either not practical due to financial constraints or it would be unfair; that is, it would be possible but it would mean taking resources from existing schemes and services to put into a particular scheme or service that was being requested by an area in a way that would not be equitable across the authority. Knowing that before the referendum takes place, the authority can show that it is not financially viable and that holding a referendum would be a waste of everybody’s time and money.

These amendments may not be perfect but the criteria that the Government are putting forward at the moment in this clause are not sufficient to give a council enough flexibility to carry out the kind of localist decision-making that the Minister talked about not long ago—on a common-sense basis, without holding referendums which will simply waste a lot of time and money and not achieve anything. I beg to move.

[Lord Beecham]

I will speak to the amendment of the noble Lord, Lord Greaves, but also to my own Amendment 126CA, which would include on page 40, line 18, under grounds for determination in Clause 47, a definition of “local” which means that an issue can be,

“determined to be so by the principal local authority”.

In other words, in addition to the conditions for what is local, it gives the authority the power to determine an issue of locality.

The noble Lord, Lord Greaves, has come forward with a mixed bag of amendments here. First, I will address his last proposition on the cost of the project relative to the cost of a referendum—or, indeed, the question of equity. That is Amendment 128A, to which he referred, on the deployment of extra resources in part of an authority’s area. I am not quite with the noble Lord on this. Actually, a petition for a referendum is an opportunity to debate an issue that might be of significance to that part of an authority’s area. Incidentally, I am not sure whether the amendment could extend to the whole of an authority’s area or just part, and if so how that part is to be defined, except perhaps by the petitioners.

If there is such an issue, it is proper that it should be debated. Initially, no doubt, those promoting the referendum would be invited by the council to explain their position and the council would respond. That is a sensible way of proceeding. If they then wished to proceed to a referendum they should not be prevented from doing so. That is an opportunity, certainly for the residents or petitioners to make their case but also for the authority to exercise some leadership and explain what it is doing and the constraints within which it operates. It can make that clear not only for the purposes of the particular referendum but as a matter of general interest to the area as a whole. We all face these decisions about priorities all the time. They are perhaps insufficiently acknowledged or understood by the electorate. If referendums are a way to bring home some of these truths, particularly as they are non-binding, I would not want to resist them taking place.

The noble Lord’s amendments include a reference to the question of influence as opposed to power. He cites the issue of the melting ice cap, implying that that is not a matter of local interest. The noble Earl, Lord Cathcart, is not in his place today, but if he were he might say that the residents of Norfolk have good reason to fear the melting of the ice cap. Saving the presence of the noble Lord, Lord Lawson, that issue might not be specifically related to the ice cap, but climate change and its impact on a community might well be a matter over which an authority has some influence and which it is relevant to ask it to look at. Influence would surely include a power, whereas the other way round it would not necessarily be the case. I would have thought that influence is actually a better way of looking at that issue.

I want to refer to one other amendment that the noble Lord spoke to. It is Amendment 128D, on the disproportionate cost of the referendum,

“bearing in mind the cost of carrying out the proposal in … question”.

Again that raises a difficulty, as a matter might be of considerable significance to people but not involve much cost. There might be, let us say, a traffic issue or something of that kind which might be felt to be of great importance in an area. The referendum might be more costly than the exercise of dealing with the issue but I would not like it to be precluded simply on those grounds. Again, I hope that the very process of getting to the point of a referendum might facilitate the resolution of matters. As I indicated in an intervention on the noble Earl, Lord Lytton, there are other methods. Given that this will be on the statute book, it seems wrong to define too narrowly the situation in which it might be used. This might be an example of going a little too far to restrict the right, so I would not support the noble Lord on that amendment.

--- Later in debate ---

[Lord Beecham]

Why could the local authority not say that it is not elaborating because of confidentiality or the Human Rights Act? Why should it not make that clear in those circumstances?

[Lord Tope]

My Lords, that is exactly my point. I thought that the Minister had just given the reason which the local authority would give in those circumstances for not accepting it. If I remember rightly, the question asked by my noble friend Lord Greaves was, “What are these exceptional circumstances?”. The example that has just been given is not one of them because the local authority would give the reason which the Minister has just given us.

--- Later in debate ---

[Lord Beecham]

The noble Lord might look at Clause 52(4), which seems to give the relevant discretion.

[Lord True]

I noticed that but thought it an extraordinarily strange piece of drafting. It says that you must wait—but need not wait if you do not want to. I do not recognise that sort of drafting. Why not just leave both subsections out?

[Lord Beecham]

The noble Lord will become very familiar with that sort of drafting in the course of discussions on this Bill and others.

[Lord Taylor of Holbeach]

First, I heard what my noble friend said about the word “misleading” in the Bill and will reflect on whether that might be improved in some way. I hope that he welcomes the general principle that the authority should be able to make sure that the question being put is relevant and accurately reflects the situation, in relationship with the petition organiser. The last thing that one wants is a matter of semantics, where the petition organiser has to go back and get all the names and addresses again. This gives a necessary flexibility. I hope that my noble friend will be able to withdraw that amendment.

My noble friend indicated that he will withdraw Amendments 128T and 128V. Amendment 128U would require the local authority to hold a referendum on the same day as an election or other referendum within the next 12 months. Our provision currently requires that the referendum will be held on the same day as a referendum or election in the next six months. As I have already said, we believe that the provision in Clause 52(3) as drafted is sensible and practical. Councils may not know 12 months in advance whether a poll will be triggered. Generally, local people will want a referendum to be held as soon as practicable. The amendment proposed by my noble friend would tend towards delaying it. We are sympathetic to my noble friend Lord True’s general approach of leaving this to the local authorities to manage at their discretion. We do not consider this amendment necessary. If there are good reasons to delay a referendum for more than six months then the council can do so.

I hope that with the assurances I have given, and in particular the agreement to look again at the word “misleading”, that my noble friend will feel free to withdraw his amendment.

--- Later in debate ---

[Lord True]

I know that the noble Lord, Lord Beecham, wishes to speak briefly: I, too, will speak briefly. I do not think that this is a matter that we can resolve in this Committee. It is important and perhaps in the period up to Report we may see some guidance and thoughts as to how the Government, the Electoral Commission and others see it developing. There is a difference between a national referendum about an unresolved policy question and certain circumstances of local referendums. The noble Lord, Lord Brooke of Alverthorpe, is no longer in his place; he has rushed out to organise a referendum against the parking-charge policy of his own council. In those circumstances it is surely reasonable for the council to defend its policy against the proposition that is put on the other side, so I do not think that we can be absolutist on this matter. I do not favour the extensive spending of public money, but I hope that my noble friend, as we discuss these things over the next few weeks, will not rule out and disarm councils—elected representatives—from putting their case in referendums.

[Lord Beecham]

My Lords, I echo the concerns of the noble Lord, Lord True. This is difficult territory. The Bill as it stands contains a provision that,

“enables the authority to incur only such expenditure as is reasonable”.

The noble Lord, Lord Greaves, has already indicated that it is not at all clear what “reasonable” might be, but I put it another way: if expenditure is unreasonable, then, of course, it can be challenged by the usual audit processes. I think that that is sufficient safeguard in that respect. What is more complicated is the question of equal prominence. Amendment 128AA states that the decision is only to,

“be exercised following a resolution authorising the maximum amount to be spent”.

This raises some difficult issues. On the equal-prominence argument, who is to provide the case for the petitioners—for those who are seeking the referendum? It can hardly be suggested that the local authority should provide their case for them. There will be cases in which there is a well resourced, articulate group of people who can produce a substantial case. If, on the other hand, it is a community group, or some organisation which produces a three-line question for a referendum, it may not be able to do that. Is the council then constrained to reply to the three-line referendum with a three-line response? That would not be reasonable. The equal-prominence test is very difficult to operate in practice.

Localism Bill

Lord Beecham Excerpts

Tuesday 28th June 2011 Lords Chamber

[Baroness Greengross]

My Lords, first, I declare an interest as the vice-president of the Local Government Association. I decided to table Amendments 115 and 116 in this group because there is such widespread fear, some of which we have heard about today, in many local authorities and in other areas that this clause relating to the imposition of EU fines could be used as a mechanism for the Government to unload their own responsibilities onto those same authorities. That fear is absolutely understandable.

In her amendments the noble Baroness, Lady Gardner, suggests an ingenious mechanism for operating the system. Yet I am sure she would agree that, like other suggestions that have been made—for example, by the noble Lord, Lord Tope—it is a mechanism and no more. That leaves open the basic principles upon which the mechanism would operate. It is a bit like establishing a court of law without establishing the laws upon which it will base its judgment.

To my mind, those principles are very clear. Some people, in addressing this problem, have been arguing that EU fines should never be payable by local authorities. I find that a rather strange argument. In so far as it is prompted by the fear that a future Government might seek to use the legislation to pass their own responsibilities onto local authorities, it is, as I said, understandable but the solution is not the mere deletion of the clause. For local authorities the upside of the Bill is that, at long last, they get the powers that they should have. I totally agree with that but if they have the rights and the powers, they must surely accept the responsibilities that go with them. It must be right that if a local authority does something which, in part or in whole, results in the imposition of an EU fine it should, to that same extent, bear the responsibility. That is all this amendment calls for.

The amendment is merely a clear statement of the principle upon which the mechanisms for deciding the issue will operate. If I might be clear again: it merely says that if it can be proved,

“beyond reasonable doubt that the infraction of EU law has arisen, wholly or in part, as a direct result of the actions of the local … authority … that … authority should be responsible to that extent”.

[Lord Beecham]

In terms of proving “beyond reasonable doubt”, would the noble Baroness accept that the arbitration procedure would be a legitimate forum within which that burden of proof would need to be discharged or is she suggesting some other mechanism, including the courts, by which that test would be applied?

[Baroness Greengross]

I am not suggesting the detailed mechanism now. I agree with the noble Lord that we have to get this clear but I am just trying to clarify the issue. I agree that the phrase “beyond reasonable doubt” actually does no more than bring with it a number of legal arguments and problems. Because this is a difficult thing to prove, if the Minister were to indicate, for example, that she would support such an amendment subject to those words being deleted, I would be happy to omit them.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I speak to Amendments 117ZA and 117ZB, to Amendments 110A and 114A, to which we have added our name, and to the other amendments in this group. This has been a fascinating debate but there seems to be one very clear strand that I think that pretty much everyone who has spoken has signed up to, which is that, if these provisions proceed, the Secretary of State cannot be the final decision-maker in respect of these fines. I am on the side of those who hope that these provisions go in their entirety. I will just touch upon the point raised by the noble Lords, Lord Wigley, Lord Empey and Lord Newton. According to the Notes to the Bill, my understanding is that these provisions relate to England only, so it seems to me entirely reasonable to ask the Minister whether there is going to be any proposition that will extend them somehow to Wales, Northern Ireland and Scotland. If the answer is no, then I say good luck to Wales, Northern Ireland and Scotland. Nevertheless, how do you address the point that the noble Lord, Lord Newton, made, that you could have an EU penalty that, you might argue, is the responsibility of a number of local authorities, some in England, some not, so that under these provisions an English authority would be forced to cough up and authorities in Wales and Northern Ireland would not have to? If that is the proposition, that is simply a nonsense and cannot be right.

If I may say to the noble Earl, Lord Cathcart, I think this issue around gold-plating of EU directives is, frankly, a myth. Every time an exercise is done to try to identify where that happens, the answer pretty much always comes back that it is very difficult to identify. I agree with the noble Baroness, Lady Kramer, that this is not about laying blame at the feet of Brussels. As I said a moment ago, I am on the side of those who believe that we should remove these provisions from the Bill in their entirety, along with the noble Lord, Lord Tope, the noble Baroness, Lady Scott, and others, for the reasons that the LGA touched upon; namely, that they are,

“unfair, unworkable, dangerous for local economies, and unconstitutional”.

The noble Lord, Lord Tope, spoke to that, and other noble Lords made the point that it is the UK Government who have EU obligations, not local authorities. If there is an issue about recalcitrant local authorities, surely it has to be addressed by more effective regulation by powers of intervention that central government could take, not by this nonsense of trying to apportion fines on some basis with all the complexities and problems that noble Lords have identified today.

My understanding is—and the LGA briefing touches upon this—that the concerns are particularly around air quality, public procurement, services and waste. As a start, can the Minister confirm that those are the particular areas that the Government are concerned with? Can he also tell us at what stage potential infraction proceedings have reached over these various areas or others that might be under way? My noble friend Lord Berkeley gives instances of several hundred in relation to transport. If we cannot get these clauses out of the Bill, and if we are to try to work out the best process to deal with this, it is worth reflecting on what I understand to be the process leading to infraction proceedings and the raising of a penalty.

Looking at the more formal arrangements in Articles 258 and 260, it has to start with an informal letter of inquiry from the Commission, then a formal letter presenting an opportunity to respond to an alleged breach of Community law, followed by reasoned opinion, which is the 41 notice from the Commission advising a member state that it is in breach of its obligations, followed, if there is no satisfactory response, by an application of the Commission to the ECJ for a formal ruling.

Following that, if there is a determination that there is a breach, there will be a letter requesting information on the steps taken to put an end to the infringement. If there is failure to comply, there will be formal notice that the member state has failed to comply, following by a reasoned opinion, which is the formal determination by the Commission that the member state has failed to comply with the ECJ judgment, followed by a financial penalty.

Therefore, the process is extensive, and there are a number of occasions when member states can challenge the existence of a breach or attempt to rectify it. Indeed, is it not the case that, even before these processes occur, there will in practice be opportunities to discuss with officials any suggested breaches of the treaty, with an iterative process to try to reconcile matters? This can extend over many months, if not years. Is it not the case that they are not clear-cut issues and that compromises may have to be reached along the way? That is why it seems fundamentally unacceptable that under the Government’s proposals an authority will be formally engaged with an EU financial sanction only when it has become a reality.

I shall run through some of the amendments in a moment. I do not think that any of them separately encompasses what we now consider to be a robust fallback position in removing these provisions, but I believe that in aggregate they present a cocktail of suggestions which I hope the Minister will digest, as he has time to do between now and Report.

In our view, any retention of these provisions—our preference is for them to be removed and we will not give up on that yet—must include safeguards which make it clear that the consequences of a failure of transposition of directives into UK law can never be visited on local authorities. There must be a requirement for the Government to use all the powers at their disposal to ensure compliance with ECJ rulings, whether they are powers relating to regulation or powers of intervention. Perhaps on that latter point the Minister would write to me setting out what powers the Government have over the various areas of concern and the extent to which they have been deployed to date or are planned to be deployed to avoid or mitigate any EU breach.

There must be a statutory opportunity for authorities whose actions or inactions are considered by Ministers to have potentially contributed to a breach to be notified at an early point, and certainly before the start of the processes set out in Article 258, with a right for such authorities to be kept up to date with developments and negotiations, and to be able to make representations to government about the conduct of such negotiations and to be given an opportunity to rectify any contributory breaches. There must be protections for authorities which do not wilfully and deliberately set aside a power or responsibility and where they have taken all reasonable steps to bring about compliance. There must also be a right for authorities affected to have access to some form of independent review, judicial or otherwise—and there seems to be strong support for that—which assesses not only whether the proposed levying of the fine received by the UK is fair but whether the processes and engagement leading up to the end result have been appropriate and consistent with the principles that I have set out.

The collection of amendments before us covers much of that ground and, as I said, provides some of the key ingredients for a fallback position. While we will continue to argue for the removal of these clauses, we will consider supporting a fallback position if it is sufficiently robust. The onus is now on the Minister and his colleagues to take note of the mind of the Committee, although I suggest that it is pretty clear. I believe that he has a decent time to do that before Report and I urge him to do so.

[Lord Beecham]

My Lords, I entirely endorse the observations made by my noble friend Lord McKenzie. I was happy to ascribe my name to the amendments moved by the noble Baroness, Lady Eaton, and indeed I congratulate her on tabling them. I think the Committee would wish to join me in congratulating her on her tenure of office, which ends this week, as chairman of the Local Government Association. She has been a very distinguished representative of local government. She has been quite unafraid to express the views of the local government family to Governments of all three political colours over the past few years, and we look forward to her playing an even greater role in your Lordships House than she has felt able to pursue so far because of a slight feeling of a conflicted position.

My noble friend Lord McKenzie referred to the position of Wales and Northern Ireland, and he seems to be absolutely right. I obviously have every sympathy with the noble Lords, Lord Wigley and Lord Empey. One would not wish to see these fines imposed on either Wales or Northern Ireland, or indeed on Scotland. However, it would be ridiculous if they were excluded from and England were included in certain situations. For example, if the Tweed or the Severn were polluted from the north or the west of the relevant borders, the Welsh or Scottish authority involved might be exempt and an English authority held liable. That would seem quite absurd.

My noble friend Lord Berkeley and the noble Earl, Lord Cathcart, asked about the number of potential breaches. Noble Lords may recall—although probably not—that at Second Reading I referred to a Written Question and Answer in relation to this matter. The Question was what estimate the Government have made,

“of the potential liability of the United Kingdom to pay fines to the European Union; and what proportion they anticipate would fall to be paid by local authorities under the provisions of the Localism Bill”.

The Answer from the noble Lord, Lord Sassoon, was:

“The United Kingdom has never incurred a financial penalty under Article 260 of the Treaty on the Functioning of the European Union”—

or under the former articles—

“and no such fines are anticipated”.

I suggested at Second Reading that it was a little curious that in that case there should be provision in the Bill at all. However, the Answer went on:

“In the event of such a financial penalty, it is not possible to anticipate what proportion would fall to local authorities under powers proposed in the Localism Bill”.—[Official Report, 24/5/11; col. WA 419.]

Therefore, it could be a very large or a very small sum. In that context, I ask the Minister to indicate whether it is correct, as the Local Government Association believes, that the Government are considering fines relating to four specific EU laws so that councils could be forced to pay up to £1.2 billion in fines. It is alleged that the UK is facing a potential £300 million EU fine for breaches of air-quality targets. Is that correct?

Furthermore, a slightly worrying feature of the fines proposal is the reference to the breach being “caused or contributed to” by a local authority. A contribution can go from a small proportion to a very large one. What is the Government’s thinking about the situation that would arise if it were not wholly the responsibility of an individual local authority or a number of local authorities? In those circumstances, how would the fine be apportioned and who would determine it? Presumably, on the basis of the Bill as it stands, it would be the Secretary of State.

I recall money being lost to the United Kingdom, and particularly to the region from which the noble Lord, Lord Shipley, and I come, not through the fault of local authorities but through the negligence of civil servants who failed, for example—this was in the days of the previous Government—to transmit bids for EU funding in sufficient time for the money to be allocated and received. The money went missing but unfortunately there was no question of the local authorities fining the Government for that negligence. It seems that this is a one-way street. When it comes to money being lost to the UK, only local authorities seem to be scheduled to be in the firing line.

There are real problems here with the processes. The noble Earl, Lord Cathcart, talked about Ministers signing up successive Governments to regulations, and he was right to say that. In particular, Governments have signed up to these regulations without consulting local government, upon which under the Bill and indeed perhaps more generally responsibilities would lie. The position now seems to be that if the Bill goes through unamended local authorities will be faced with decisions made on the basis of targets, deadlines and laws dating back more than 10 years—again without any consultation along the way.

--- Later in debate ---

[Lord Shipley]

My Lords, I want to add a word from the perspective of English core cities. The proposals around tax increment financing put by the eight largest English cities to Government three to four years ago have gradually been working their way through a number of committees, particularly in the Treasury. In the past 12 months added impetus has been given to tax increment financing. I hope that what my noble friend Lady Kramer is proposing here does not cause any delay to the move forward with the Government’s proposals because tax increment financing is urgently needed to enable cities, in particular, and all councils to be able to borrow against future business rate income growth. At present local councils have the power to borrow prudentially, but prudential borrowing requires there to be an income stream guaranteed to enable that borrowing to proceed. Tax increment financing enables borrowing to be made against future growth and projections of that business rate income, as my noble friend Lady Kramer rightly pointed out.

These are not separate issues and they can sit happily together but we are looking for some clarity from Government that tax increment financing as a principle will go ahead as speedily as the Deputy Prime Minister announced that it would last year. Local authorities are waiting for the powers to be implemented and it could well be a further 18 months to two years before those powers come forward. They are urgently needed. Otherwise infrastructure funding that requires a capital investment based on borrowing on the markets needs to be progressed. Without it that investment will not take place. I look forward to my noble friend the Minister clarifying the speed with which tax increment financing can be introduced and how then that proposal lies with this proposal in the name of my noble friend Lady Kramer.

[Lord Beecham]

My Lords, the noble Lord, Lord Shipley, is quite right to refer to the support for the principle from the core cities and also, in general, from the Local Government Association. I endorse that. To help me understand the implications of this measure, can the Minister refer back to the point that she raised about this being more acceptable to business ratepayers because they will benefit from the projects that are being financed through this mechanism as opposed to something like Crossrail where they may not have done? This does not necessarily constitute an objection to the proposal, but I wonder whether that is right. The rates are borne by the occupier of business premises. The value effectively goes to the owner and they are not necessarily the same. We have had over many years in local government finance the position where property owners contribute little to the regeneration of cities and the like. The financial burden falls on the tenants through the rents and they also pay the rates. I wonder whether she is not being a little optimistic in assuming that the occupiers of premises that may benefit from these developments will be as enthusiastic as she might suppose, although, as I say, that does not vitiate the validity of the proposal as a means of financing investment.

[Lord Shutt of Greetland]

My Lords, I hope I can be helpful on this but, while thanking all noble Lords who have spoken, I revert to the point that my noble friend Lady Kramer made in her initial remarks about this being a probing amendment.

The Government have committed to introduce tax increment financing but we should not pre-empt the outcome of the local government resource review that will conclude in July. The review is looking at both local retention of rates and tax increment financing as we need to make sure that tax increment financing proposals are consistent with our wider proposals on business rates retention. The amendment appears to increase the rates liability of businesses, whereas tax increment financing, as generally understood, does not increase the business rates that would otherwise be levied but uses those rates to repay the borrowing that helped to deliver a piece of infrastructure. The business rate supplement and proposals for tax increment financing are two separate models that are structured differently. Rather than integrate them, there is no reason why they could not be used alongside each other to facilitate the funding of infrastructure to support economic growth.

The amendment seems to create two types of business rate supplement. The first type is a traditional business rate supplement of up to a 2p levy on business rates payers within an authority area that occupy property rated above £50,000 for an economic development project. The second type is a business rate supplement for where tax increment financing has delivered some infrastructure project of up to a 2p levy within an authority area but is restricted to the increases in rateable value of properties rated above £50,000 as a result of some infrastructure that has been implemented by tax increment financing.

The amendment appears to be defective in a number of ways. There is no definition of tax increment financing. The amendment would also create some practical concerns. The tuppence maximum will apply to the area, so in London the proposal could not apply as the tuppence limit reached by the Crossrail business rate supplement has been dealt with. Applying the increase to the rateable value to adjust the impact of the tax increment financing project would require a second ratings list to be set up for all properties with rateable values both prior to and after the tax increment financing project delivery. A consequent increase in administrative costs is highly subject to challenges over the extent of any rateable value increase as a result of the tax increment financing project or other factors—refurbishment of a property, for example.

The tax increment financing scheme does not increase the business rates that would otherwise be levied but uses those rates generated by the infrastructure to repay borrowing. Under existing arrangements, 100 per cent of business rate revenues collected by local authorities are pooled for redistribution to local authorities in England. By considering options to enable councils to retain their locally raised business rates, the current local government resource review provides an opportunity for significant changes in the way in which councils are funded. Such an approach could help to set free many local councils from dependency on central government funding and provide incentives for them to promote economic growth. The review is considering how we could manage the distributional impacts of any new arrangements. More deprived councils will continue to receive support.

Last September, the Deputy Prime Minister announced that the Government were committed to take legislation to allow for tax increment financing. Then, the local growth White Paper, issued in November, set out the Government’s intention to carry out a resource review. The terms of reference for the resource review were published in a Written Ministerial Statement by the Secretary of State on 17 March 2011. The resource review will look at local retention and tax increment financing in the round and will conclude in July. The aim is then to move as quickly as possible towards implementation, taking into account the need for primary legislation.

I appreciate the spirit of Amendment 118ZA, which aims to ensure that any business rate supplement where the levy raises less than one-third of the overall project cannot be imposed between Royal Assent and the commencement order without a ballot. However, we do not think that bringing forward commencement of that part is necessary as we are not aware of any proposals for any new business rate supplement planned to be imposed—that would fund less than one-third of the overall project—as we have not seen an initial prospectus or consultation. The business rate supplement for Crossrail has already been imposed and would not be affected by the amendment. I should like to offer reassurance that the Government will bring into force the proposed change that will ensure a ballot for all future business rate supplements regardless of whether it funds more or less than one-third of overall costs.

Clause 38 will come into force following a commencement order to be made by the Secretary of State. We will look to make that commencement order for a date no earlier than two months after Royal Assent in line with convention that legislation is brought into force earlier only where necessary and in exceptional circumstances. I trust that that is a fair response to the noble Baroness and that she will feel able to withdraw her amendment.

Localism Bill

Lord Beecham Excerpts

Thursday 23rd June 2011 Lords Chamber

Moved by

[Lord Beecham]

34: Schedule 2, page 189, line 27, at beginning insert “Subject to receiving a proposal under sub-paragraph (5),”

[Lord Beecham]

My Lords, this group of amendments concerns governance issues, the part of the Bill to which we now move. The amendments deal with some of the regulations which the Bill empowers the Secretary of State to make. I have a vision of a group of civil servants in the subterranean depths of Eland House employed full time in drafting regulations on all manner of things, many of which we will encounter as the Bill progresses through Committee. In the interests of health and safety, if nothing else, of those who are so engaged and of local government, I suggest that the Government look again at the degree to which they are seeking to regulate.

The amendments relate to Schedule 2, page 189, and seek to limit the degree to which regulation will take place other than at the request of local authorities. Amendment 34 suggests that regulations should be made only if asked for by authorities. Amendment 35 would limit significantly the arrangements that the Government seek to make under these proposals and would ensure that any such arrangements are consistent with the principles of localism and the representative democracy which featured so largely in the initial debate on the amendment proposed by the noble Lord, Lord Greaves. I beg to move.

[Lord True]

My Lords, it might be helpful if I speak to my Amendment 37, which is in this group and relates to governance arrangements. I apologise for its rather dense language but it imitates the drafting style of the Bill and I was trying to be as accommodating as possible to the Government. The real issue here is about the relations between lower tier and higher tier authorities, and how we achieve localism where things are done to local people by higher tier authorities.

I have a very live example: before leaving for the House this morning, I received an extremely angry e-mail from a person in my ward asking, “Why on earth are you wasting my money moving bus stops on our high street?”. The answer is that I am not doing that. I have had meetings with TfL asking it not to move bus stops. But it is all being done by a higher tier authority within a lower tier authority without any open consultation with the people affected.

There are many other examples of this kind of thing, and I am sure it does not only go on between London boroughs and regional government—it probably goes on between lower tier authorities and county councils and, in some cases, parish councils. Another example would be the one I cited at Second Reading where, after consultation with local people, we proposed revised parking standards in a neighbourhood. Without holding any public consultation, we received a letter from a higher authority saying that the arrangements were not satisfactory and did not accord with its standards, and we were asked to change them.

I do not wish to unpick the constitutional arrangements between lower and higher tier authorities in this country, but I do not think that the Bill is very localist when it comes to London boroughs. Indeed, it strikingly fails to be localist in that respect. What I am really asking for in the amendment, although I do not expect my noble friend to agree to it at first bite nor do I necessarily want to add to the huge bible of regulation that is emerging from this Bill, is recognition of the important principle here. If we believe in localism, at the very least it should be open to the lower tier authority to be able to say to the higher tier authority, “If you are considering planning changes which specifically affect an area”, such as whether to have high-rise buildings in the centre of Twickenham, which happens to be a live issue in my authority, “meetings should be held by the higher tier authority to gauge the opinion of local people”. It might even be that we could ask officers to come and hold public meetings, or indeed have the right to require that that should happen.

At the moment there is no formal ability for a lower tier authority to act on behalf of its local residents to do what we would regard as absolutely normal in terms of explaining to residents what is going on. It is absolutely inconceivable, if we were planning to change the alignment of a high street in a village or small town centre, that that would be done without prior and detailed public consultation with local people. The purpose of the amendment is to give a lower tier authority such as my own, a London borough, but also those outside London, the ability to propose or suggest arrangements to the higher tier authority to ensure that it conducts itself in a proper, localist fashion in respect of matters that affect local people. I urge my noble friend to reflect on the issue being raised here.

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[Baroness Hanham]

My Lords, we believe that the leader and cabinet model is a good one. We also believe that the leader should be able to select those whom he wishes to have with him. It is a very close relationship, and it is very important that it works well. We think it right for a leader to be able to appoint his own executive team.

Amendment 38 would prevent the maximum size of an executive being set at a figure lower than 10 members. I accept that current experience with 10 members is about right, but I would not accept that future circumstances will be such that, while it might be right to increase the maximum limit of the size of an executive, it might not be right to have a lower limit. I think that that is what the noble Lord’s amendment suggests. Experience demonstrates that 10 is about the right number, and that a lower number may be too little and a higher number too much. Most of these cabinet systems are working quite well as they are. One might also point out that the more cabinet members you have, the more you have to pay. I hope that that resolves some of the questions.

[Lord Beecham]

I thank the Minister for her reply and thank the noble Lord, Lord Greaves, for the support that he gave to some of the amendments. In relation to Amendment 37A, in practice there would be little advantage in going along that route. It would be a foolish leader who endeavoured to appoint an executive without the support of his colleagues. He would not last long in leadership, I suspect. In reality, I do not think that this particular provision is required.

On Amendment 38, however, the Minister rather skates over the implications of the Bill as it presently stands. I cannot see any reason why the determination of the size of the executive should not be entirely at the discretion of the local authority. At the very least, it would be wrong to leave the Secretary of State with power arbitrarily to reduce the size of the executive to, potentially, one or two members. Generally speaking, 10 is about the right figure; in the case of my own authority and that of the noble Lord, Lord Shipley, the new administration has actually reduced the number of cabinet members, to use the phrase adopted, from 10 to six. That is legitimate and a matter of decision for the authority. In my submission, it would not be legitimate for the Secretary of State to prescribe that. Given the increasing spread of responsibilities, the partnership arrangements that now exist and the structures that now surround local government, it may well be creating an onerous burden on members of executives if their numbers were to be confined. I hope that the Government look again at this really rather purposeless provision.

The noble Lord, Lord Jenkin, raised the question of principle, which it may be as well that we dispose of today. He asks very legitimately where the power of general competence is in all this. I had the pleasure of working with, or perhaps beneath, the noble Lord when he was Secretary of State for the Environment and chaired the Inner City Partnership committee in Newcastle. He was always clearly committed to local government. The problem is not so much around the concept of general competence as that the Bill, or much of it, rests on an assumption—certainly on the part of civil servants, and perhaps of Ministers of all Administrations—of general incompetence in local government and those who serve in it. I fear that that suspicion lies behind many of the manifold provisions in the Bill which purport to increase the degree of regulation that the Secretary of State can impose, if he sees fit. I hope that on reflection, as we go through the Bill, the Minister and her noble friends will think again about the degree to which they are taking upon themselves a burden that is effectively unnecessary. I beg leave to withdraw the amendment.

Amendment 34 withdrawn.

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[The Deputy Chairman of Committees (Baroness Harris of Richmond)]

I must inform your Lordships that if Amendment 39 is agreed to I cannot call Amendment 40 by reason of pre-emption.

[Lord Beecham]

My Lords, I speak to Amendments 40 and 43 and, in doing so, endorse very much what the noble Lord, Lord Greaves, has said. This is another example of what Tony Blair might have described as “regulation, regulation, regulation”. It is certainly well over the top. In particular, new Section 9EA(2) of the Local Government Act 2000, which he read out, is as classic a piece of Civil Service gobbledegook as I have seen for some time. I guess that, as I go through the Bill, there would be further examples.

Amendment 40 would delete that clause, and Amendment 43 would deal with the prescription as to the size to be covered by an area committee, limiting it to two-fifths. In principle, I would like to see that matter left entirely to the discretion of local authorities. However, if the Government were not disposed to take that view, my amendment would reduce the size of the committee to something which is less like half the total size of an authority and more like what most of us would regard as a manageable area in which it is possible to reflect the views of local communities and members. If the Government wish to have some guideline on this, I invite the Minister to opt for something lower than the proportion indicated in subsection (5) as it now stands.

[Lord Tope]

My Lords, briefly, I support my noble friend Lord Greaves. He certainly has more experience of rural areas than I do, but I speak from the perspective of what he referred to as a “compact urban area” or, more accurately, a suburban area: a fairly small—in terms of area—London borough. We have six local committees on the council as a whole. There are 43 Liberal Democrat councillors and only 11 Conservative councillors. However, because of the political demography, one of those six local committees is still controlled by a Conservative majority.

Each of those local committees has limited executive powers, which we hope will be extended further, and each operates in quite different ways, partly because of the councillors on them and the way in which they choose to react, and partly, and more particularly, because of the nature of the areas that they represent. All of the councillors for those areas are members of those local committees, to a varying extent, and the local residents in those areas come to those meetings certainly to a far greater extent than they attend meetings of our executive. They take part in those committees and, to varying extents, they feel that they are part of the deliberations.

As a council we have not felt it necessary to prescribe in great detail what each of those local committees shall, or shall not, do or how they will, or will not, behave. They behave sensibly, even the one run by the Conservatives behaves moderately sensibly. We demonstrate, in a very obvious way, the difference between a Conservative-run committee and a Liberal Democrat-run committee. That is what democracy is about; it is what we ought to be doing. As a council, we have not felt the need to prescribe it, nor have we ever thought that we should have prescribed it. I commend to the Government the fact that they too should trust local authorities in this case, as we trust local committees.

[Lord Greaves]

My Lords, I commend the reply of the Minister on this group of amendments. I advise her to use that exact wording for every group of amendments that we put forward throughout the rest of the Bill; however, I do not say that very optimistically. There are clearly some discussions to be had.

I would just like to respond to the amendments spoken to by the noble Lord, Lord Beecham, and particularly to Amendment 43, which I disagree with fundamentally. In a sense, the amendment reflects the diversity and variety of local government and the representation of local government in your Lordships' House and in this Committee. It is a big-city view, a view of big authorities: in a big city, an area committee of 40 per cent would, in almost any conceivable situation, be ridiculous. However, that is not necessarily the case in smaller authorities.

Perhaps I can tell the Committee the position in my own authority in Pendle. We have five area committees and they range from 32 per cent—these figures are based on mid-year population estimates for 2008—down to 10.7 per cent. The 32 per cent is for the town of Nelson, which has an estimated population of 28,745, which, by big-city standards, is not excessive—it might be just two wards or one and a half wards in some big cities. It would be ridiculous to split Nelson because it is a community with a town centre. You walk from the middle of the town centre and you get to the edge of the town and Nelson stops and you are in the countryside and into smaller communities. I believe that the figure of 40 per cent is right. Quite clearly, there needs to be sensible reflection on the basis of local knowledge in a particular area.

[Lord Beecham]

Does the noble Lord agree that the best course would be to dispense with the clause altogether and leave the matter entirely to the discretion of the local authority, which is my first preference?

[Lord Greaves]

The noble Lord knows that I agree with him on that. It should be left to the good sense of local authorities. It is difficult to see a situation in which you would want a system of area committees where one area committee was more than half, but there might be such circumstances. There might be a district authority with a large town that is surrounded by a constellation of smaller communities. That would be the sensible way to do it. I believe that if it is left to sensible local discretion, the areas will be based on the real communities that exist there in the best possible way they can be defined on a sensible working basis.

I thank the Minister for her interesting reply on Amendment 39 and I look forward to discussions on it. I beg leave to withdraw the amendment.

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[Baroness Hanham]

My Lords, we are back again to the same arguments that we had on the previous amendment on area committees. It relies on the regulations. I thank my noble friend Lord True for suggesting a way in which amendments might come. I think we need to look carefully at what has been said. Perhaps I need to review this before the next stage to see whether anything needs to be done about these provisions.

[Lord Beecham]

My Lords, I am grateful to the Minister for that very helpful response. We are now into the realm of guidance. It seems to me that guidance is a more acceptable face of regulation—or its better looking twin, as it were—but there is a little bit too much of that as well in the Bill. Matters like this can perfectly sensibly be left to individual local authorities and the guidance that other bodies, such as the Local Government Association, would be prepared to offer. I look forward to hearing the Minister’s response. As we go through the Bill, I think there will be many examples where all sides of the House would wish to see precisely that accommodating attitude reflected so that we do not end up on Report with many detailed amendments which should not be dividing us at all.

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[Lord True]

It may have been for others. I did not know that the noble Lord, Lord Tope, was there. In those circumstances, had there been a scrutiny system with four scrutiny committees, under this amendment a member of the opposition would have found himself or herself chairing two scrutiny committees. The principle behind the amendment is a good one but in practice it simply would not work. In my humble view, the so-called “cabinet” system that was imposed on us by the previous Administration has tended, as many of us involved in local government know, to create a potential gulf between the executive members and the back-bench members of the governing party and local authorities have had to work against that all the time. It is vital that back-bench members of the governing party have full involvement—often very sceptical involvement—in the operation of the authority. It is desirable that they should also be given the opportunity to take a leading role in challenging the authority and scrutinising it. This is often the case in many authorities that I know and have visited. It would be outrageous for the opposition party to be excluded from chairing scrutiny committees but equally, as well as being impractical in certain circumstances, it would be undesirable to exclude the back-bench members of a governing party from being involved in taking executive decisions and playing a leading role in scrutiny. Therefore, I am afraid that I cannot support my noble friend’s amendment.

[Lord Beecham]

My Lords, I begin by paying tribute to the noble Lord, Lord Shipley, and his colleagues for changing the system that we operated in Newcastle when they took office in 2004. I will let the noble Lord and your Lordships into the secret that prior to that date I had tried to persuade my colleagues at least to emulate the system in another place of a balance of chairmanship of such committees, but with my usual lack of cogency I failed to persuade them at that time. However, they have now been converted by the noble Lord and his colleagues, so things move on.

I entirely accept what the noble Lord, Lord True, has said about the impracticality of the suggestion behind the amendment. I can give a better justification. The borough of Newham has 60 Labour members and no opposition members at all—or at least no overt opposition members—so clearly the amendment would not work there. The Labour Party advice about scrutiny committees is that the relevant duty should be shared. That is national Labour Party advice and I hope that the same is true of other political parties as well. It would make a great deal of sense.

If I differ from the noble Lord it is because, as has rather often been the case, he has tended to view scrutiny as something retrospective and as a case of holding an executive to account for decisions that it has made or is about to make. That is part of the job but it overlooks the forward programming of an authority and the development of policy. One of the great advantages of properly resourced scrutiny is that it allows members to develop policy free of the operation of the whip, which should not apply in scrutiny.

After 24 years chairing committees and leading a council, I was eventually voluntarily dispatched to my Siberian power station; that is, the arts and recreation committee in Newcastle. I found that being a back-bencher was very different from chairing a meeting. As the chairman of a meeting, you had an agenda and if you were any good at it you knew what you wanted, you had a discussion and you got it through. In Newcastle’s case I would have a pre-meeting with 15 Labour members for an hour. That represents an average of four minutes each. The dialogue was not Socratic in its nature. It was not the highest level of political debate and many members were simply concerned to get through the meeting as quickly as possible. By contrast, scrutiny actually allows people to think. Some people found the transition to be rather difficult, but it is welcome.

The whole thing can be summarised for me by my moment of revelation, which came when, having missed a meeting, I went to a meeting of the arts and recreation committee—a very worthy committee with a big agenda —and I read in a minute that a member had raised the question of birds eating grass seed on the Leazes Park allotment. I thought, “Has it really come to this? This is not really an effective way of running things”. I therefore support in principle the executive scrutiny split, provided that scrutiny is adequately resourced.

Subject to those reservations, I generally support scrutiny. I will refer briefly to Amendment 48 in this group relating to new Section 9FC and the guidance being proffered. New subsection (3) states that in exercising the power to refer matters to a scrutiny committee,

“the member must have regard to any guidance for the time being issued by the Secretary of State”.

The notion that 20,000 councillors are going to consult the bible on scrutiny issued by Eland House before they are able to refer something is, frankly, ridiculous. I anticipate that the Minister will acknowledge that this could be excised from the Bill without damage. I invite her so to indicate.

[Lord Tope]

My Lords, I am sure that we will all forgive the noble Lord, Lord Beecham, for paying tribute to my noble friend Lord Shipley. It was a well deserved tribute. Perhaps I may also help him with the problem he enunciated about the London Borough of Newham. Of course, it would make it very much easier for Newham to implement my noble friend’s proposals were we to have proportional representation in local government. For the past 25 years, the first past the post system in local government has very ill served the Conservative Party; it has, throughout pretty well all those 25 years, been most unjustly served by our current electoral system. None of that was what I intended to say. In fact, I rose to speak to Amendment 46 and 47 in this group. My noble friend Lord Greaves will speak to Amendments 49 and 49C.

Amendment 46 is self-explanatory. Its provisions recognise the reality of a situation that in many authorities it is not a single officer who alone has the scrutiny function. That person will inevitably, in most cases, need other officers in the discharge of those functions. That speaks for itself and my amendment is a better way to reflect reality in most authorities.

Amendment 47 is rather more serious. Its purpose, if we are to have this part of the Bill, is that the scrutiny provisions should apply also to district councils. I am sure that my noble friend Lord Greaves has far greater experience. I have no experience of district councils because I am in an inner London borough. I know of no reason why—albeit with lesser functions—district councils should not be treated in exactly the same way as all other local authorities of whatever type in the country, as far as the scrutiny function is concerned. That is why Amendment 47 seeks to remove from the Bill the new subsection that excludes district councils from these provisions.

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[Baroness Hanham]

My Lords, I shall start by saying that I recognise a lot of what I have heard from noble Lords regarding how councils operate. The amendment of the noble Lord, Lord Shipley, would make it compulsory for scrutiny committees to be chaired by the leader of the opposition party on a council. This amendment is unnecessary. I know of many councils that do precisely that, whereby a leader or senior member of the opposition party chairs review and scrutiny meetings. That is absolutely proper, but such a provision does not need to be couched in either guidance or legislation. As the noble Lord, Lord Beecham, pointed out, there may be some areas where there are no opposition members, but the amendment would make such a provision mandatory. There are some areas where all members are Conservatives and the issue is the same. I hope that from the tenor of the debate noble Lords will agree that such a provision is neither appropriate nor necessary, and that we should not return to it. The annual scrutiny survey, which, I must say, I did not know existed, shows an upward trend, with 42 per cent of authorities allocating scrutiny chairs to members outside the majority group. This idea is clearly taking off well enough, without any interference from Parliament.

Amendments 46 and 47 would change the arrangements on designated scrutiny officers, particularly to make it clear that a designated officer could lead other officers in the discharge of scrutiny functions, as well as requiring district councils in two-tier areas to designate a scrutiny officer. Again, the amendments proposed are not necessary. Of course, we envisage that scrutiny will involve a number of officers to support a scrutiny committee. That already happens, it is part and parcel of the way scrutiny committees are run, and indeed in some councils they are completely separate from the rest of the administration so that they are completely independent. It is unimaginable that one scrutiny officer could not appoint somebody to help him. It is certainly not necessary to make that mandatory because I am quite certain that in most local authorities that is precisely what happens. There is nothing to prevent a district council in a two-tier area designating a scrutiny officer but statute does not require this. Noble Lords have made the point that district councils perhaps do not have quite such onerous responsibilities as county councils and therefore it is not mandatory for them to have a designated officer, although of course if they choose to have one they can. That is perfectly in order.

Amendments 48 and 49 remove the requirement on members to have regard to the guidance and the regulation-making powers of the Secretary of State in relation to referral of matters to a scrutiny committee. These powers enable the Secretary of State to ensure that certain important safeguards are in place. Regulations made under the power that noble Lords are seeking to remove protect against vexatious or discriminatory matters from being placed on the scrutiny committee meeting agenda. They also exclude matters for which there are already statutory processes and rights of appeal, such as planning and licence decisions or matters relating to an individual. It is not unreasonable that those matters should be placed before scrutiny committees in the course of their business.

We believe that the existing framework is working pretty well without removing the requirement for scrutiny committees to make reports and recommendations relating to partner authorities and local area agreements. Having said that, I have some sympathy with Amendment 49C, which is seeking to remove the link between local improvement targets and local area agreements—that might indeed become otiose. We are absolutely clear that where authorities operate executive governance arrangements, scrutiny arrangements must be in place. We recognise that scrutiny plays an important role in holding the executive to account and contributing to policy development in authorities. I certainly support what the noble Lord, Lord Beecham, says—that overview and scrutiny committees, like planning committees, should not be whipped. They are clearly committees where scrutiny and challenge should take place and that should not be done against a background of being told what to do.

Amendment 69 would make it mandatory for councils with committee systems to have an overview and scrutiny committee. That is not necessary. The committee system in itself should have a scrutiny role and always did in the past—that was one of the benefits of the committee system. Therefore, that amendment is not necessary.

With the various explanations and assurances I have given, I hope that noble Lords will not press their amendments.

[Lord Beecham]

I am grateful to the Minister for her response. In relation to Amendment 69, which I did not address before, scrutiny ought not to be just a matter of looking at the internal workings and policies of the council itself. It should be used, and in many cases is being used, as the noble Lord, Lord Tope, mentioned, to look beyond what other organisations are doing—or not doing, more to the point—in the locality beyond the statutory requirements, for example, that would apply to the health service for authorities with adult service responsibilities. The amendment does not quite address the issue in the terms that perhaps it should have done but I would welcome some encouragement from the Minister for authorities which do not necessarily have a scrutiny committee to use their own committee system for that purpose, and to encourage those to whom application is made for some explanation of what they are doing in a locality to respond as if this were a request from a scrutiny committee. It would be helpful if Ministers said something to support such activity on the part of councils, particularly district councils, which perhaps do not have a full-blown scrutiny process but which may seek to follow the example of other authorities which do have that process to explore the workings of organisations, be they public sector or private sector, and the impact they have on their community.

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[Baroness Hanham]

My Lords, I thank noble Lords for their amendments, and I start by saying that I shall be helpful in relation to some but not to others. As noble Lords have said, the various amendments in the group seek to remove the guidance or regulation-making powers of the Secretary of State—a common theme this afternoon. In each case, the powers enable certain safeguards to be in place. Although noble Lords are critical of regulation, sometimes it is necessary at the same time to protect other aspects with which they are concerned.

Amendment 45A would remove the ability to issue guidance on important matters such as scrutiny chairs, as we discussed on the previous group. Amendments 48A, 48B and 48C would remove the requirement for members to have regard to guidance and the Secretary of State’s regulation-making power in relation to the referral of matters to a scrutiny committee. However, as I said, these powers enable the Secretary of State to ensure that certain important safeguards are in place. We have discussed some of them, such as vexatious or discriminatory matters being placed before a scrutiny committee, which we talked about on the previous amendment. I do not think that it is unreasonable that that sort of aspect should be ruled out of the scrutiny committee’s responsibilities. Some might take that view and some might not but I think it is sensible that they are left with no option about that. As well as rights of appeal, the amendments would also exclude matters that are already statutory processes, such as planning and licensing decisions or matters relating, for example, to an individual. Therefore, I shall not be able to accept those amendments.

Amendments 49U and 49V would remove the ability of the Secretary of State to make regulations to guard against the duplication of requests by scrutiny committees to other partner bodies. They are regulations that seek to minimise the burden on such authorities and make best use of the available information.

Amendments 47A, 49A, 49B and 49D to 49T also look to reform existing scrutiny provisions by simplifying and expanding the definition of “partner bodies”. They would expand the matters in relation to which scrutiny committees may rely on their powers, removing the link to local area agreements—which we have already agreed I should look at—and extending the powers of district council scrutiny committees, among other things, as we have already discussed.

As I said in the debate on the previous group, we do not believe that the existing framework hampers innovative practices by scrutiny committees. However, I have some sympathy with the aims of some of the amendments, and, again, I shall draw them into the discussions that we need to have. They seek to bring up to date the scrutiny regime that sits across various Acts of Parliament in light of recent changes, so it is right that we should look at them.

I am happy to consider Amendments 47A, 49A, 49B, and 49D to 49T. In debating previous amendments, we also discussed committee system authorities and the operation of scrutiny. Our view is that such authorities should be able to choose to have overview and scrutiny committees. Proposed new Section 9JA makes this clear. Removing the section entirely would create confusion. It would be unclear whether committee system authorities could operate scrutiny committees, and what the role and powers of such committees would be if they did. Therefore, the amendment is proposing that is unnecessary.

The provisions that Amendments 87ZB to 87ZD seek to change replicate existing provisions in the Local Government Act 2000, which reflect the important interests that the Church of England and the Roman Catholic Church have in the provision of education, given the significant number of voluntary-aided schools in most if not all local authorities. It is correct that these significant partners in education should by right have representation on the relevant scrutiny committees. Therefore, we do not support the amendments.

With those explanations, the realisation that we discussed some issues when debating the previous group of amendments, and my acceptance of further discussions on some of the amendments, I hope that noble Lords will not press their amendments.

[Lord Beecham]

My Lords, again I found that a very helpful answer, and I agreed with most of the comments and responses that the noble Baroness gave. I offer a suggestion about where an assurance at some stage would be helpful. In exercising his powers to proffer guidance, the Secretary of State might wish to consult either or both—preferably both—the Local Government Association and the Centre for Public Scrutiny. One would not want to write the Centre for Public Scrutiny into statute, but an indication that there would be those discussions, particularly with the Centre for Public Scrutiny, which is quite independent, would be helpful in ensuring that the guidance was broadly acceptable to the local government world and beyond. I take the point that it is necessary, in order to ensure public confidence and that minorities within local government are protected—given that the politics can be a little difficult at times—that there should be some guidance on this range of issues. If the guidance were informed by the Centre for Public Scrutiny and consulted on with the LGA, that would be a way forward. The provision does not need to be statutory, but an indication would be very helpful. I do not ask the Minister to respond immediately.

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Moved by

[Lord Beecham]

50: Schedule 2, page 207, leave out lines 25 and 26

[Lord Beecham]

My Lords, the amendment touches on the question of transparency and the openness to the public of meetings. It seeks to reflect what I understand to be the present position, which is that meetings are open unless council committees or executives decide to exclude the press and public, usually on grounds of confidentiality. This might be commercial confidentiality or sensitive staff issues and the like. The amendments in my name create a presumption that the meetings will be open to the public unless there are good reasons for not having them as such. Those reasons clearly would have to be enunciated. It is difficult to find a form of words that fully meets the case. The noble Lord, Lord Shipley, will speak to his amendments, which import the term “necessarily”. However, the question then arises of how one defines what is necessary. There is no simple answer, but it is important to have the presumption in the Bill if we can get it, and I look forward to hearing from the Minister in due course.

[Lord Shipley]

My Lords, I will speak to Amendments 53, 54 and 55 in my name. Each is a probing amendment to get confirmation from the Minister that there will be no deterioration in the access of the general public, the press and opposition councillors to meetings and to information. I seek that reassurance because, as the noble Lord, Lord Beecham, says, it is quite difficult to get the right wording. The overriding intention must be that there should be no deterioration in what currently pertains in local government for individuals—the public, the media or other councillors—seeking access to meetings and information. The Bill confers an awful lot of powers on the Secretary of State to make decisions in that area. I understand why that is, but I would be more comfortable if it was absolutely clear to the general public that there will be no diminution in their access to information and meetings.

[Baroness Hanham]

My Lords, the current presumption of meetings being held in public comes under the Local Authorities (Executive Arrangements) (Access to Information) (England) Regulations 2000, with which I am sure the noble Lord is entirely familiar. The general principle of that is that there is a presumption in favour of openness, where key decisions of executives are made.

We are—I hardly dare to say the word—aiming to make new regulations which will remove some of the current prescription that make it clear that there is a presumption in favour of public meetings. As the noble Lord has already said, it is essential that there is some ability for a committee to close its proceedings for private or confidential reasons, but those must not be outwith what would normally be discussed in public. We are going to retain the parts in the Local Authorities (Executive Arrangements) (Access to Information) (England) Regulations 2000—I will not go through that again—to ensure that written records of certain decisions must be available to the public. We are also going to regulate how they must be made available so, as a result of what we are proposing, there will not be any deterioration in the right of access to meetings. We will just tidy up to make it clear that, as the noble Lord and other noble Lords have said, the presumption in favour of open meetings is absolutely understood.

[Lord Beecham]

I accept the Minister’s helpful suggestions, as ever, and I shall refer to the 2000 local government regulations. I shall look them up tonight. I beg leave to withdraw the amendment.

Amendment 50 withdrawn.

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[Lord True]

My Lords, I have a number of amendments in this group, and I want to follow on from what the noble Lord, Lord Tope, has said by thanking very sincerely my noble friend for the leadership and responsiveness she has shown on this matter. Those of us who have been present in the Committee today will also have noted the openness, warmth and positive way in which she has responded to a number of the points that have been put forward. We are all grateful for that.

I am slightly confused by the groupings, which have changed a little overnight, perhaps for reasons related to pre-emption or to a number of other points. By the way, I should pay tribute to my noble friend Lord Jenkin of Roding, who played a big part in raising this issue at Second Reading. There was unity across the House that to create shadow mayors before the electors in the cities concerned had had an opportunity to have their say was not a good idea. The Minister then came forward at the earliest possible opportunity to say that the Government had accepted the arguments, so the principle does not need to be debated at any great length, and I do not propose to do so. However, I should give notice, in speaking to the large number of amendments within this grouping, that it should be taken that I have also spoken to Amendments 74A, 77A, 77B, 79A and 81A. They are not in this group, but they relate to the same subject. Even if I have it wrong, I hope that the Committee will accept that I shall not come back to those amendments later, and I repeat my thanks to my noble friend for taking up the point in the positive way she has.

[Lord Beecham]

My Lords, the amendment moved by the noble Lord, Lord Tope, relates to the part of the Bill which defines a mayor as distinct from a councillor. I wonder whether that is particularly well advised. I cannot recall the precise clause or paragraph in the schedule that deals with the eligibility of people to stand for election as mayor. It lists a whole series of officers of an authority who may not stand. At the moment, a serving member or employee of a local authority is disbarred from standing as a councillor. If the mayoral position was to be treated for all purposes in the same way as a councillor, you would not need a provision in the Bill to identify all the authority officers who could not stand for that position. Indeed, it could be argued that if you do not treat the mayor as a councillor, you might find that some people are inadvertently omitted but who perhaps should be barred from seeking to be elected because they already hold a position within the authority. My understanding is that the bar will remain in place for some time after their period of service has concluded.

Would it not be sensible for the Government to rethink this provision and simply state, unless there is a regulation the other way, as it were, that all provisions relating to councillors such as declarations of interest and all the rest of it should apply to elected mayors, rather than reverse the procedure and require regulations specifically for the elected mayor which could otherwise be avoided?

In relation to the remarks made by the noble Lord, Lord True, there was a problem, and indeed there still is a problem, in the grouping of these amendments. As I read it, many of the noble Lord’s amendments tag on to provisions for the implementation of the mayoral system, with reference to a referendum having taken place on the basis of three possibilities. One is the decision of a local authority itself, but subject to a referendum. Another is a petition from the public generally, and the third, which is the problematic one for many of us, is the requirement to hold a referendum by the Secretary of State. As I understand it, the noble Lord’s amendments, along with those of his noble friends, assume for the purposes of their amendments that the compulsory referendum remains part of the Bill. Last night I endeavoured to turn the debate around the other way so that we could deal with that issue first. When we come to consider the Bill on Report, perhaps we might look at how to address the issue.

The implementation points are perfectly valid and apply to the two non-compulsory forms of acquiring an elected mayor, but while I know that the Committee will not divide on them today, if the amendments were to be accepted on Report, it would be assumed that the compulsory referendum had been agreed. Some of us, perhaps many of us, have different views about that. In today’s groupings there are amendments which address that issue of principle, and I hope that the noble Lord understands where some of us are coming from in that respect.

[Lord True]

I thank the noble Lord. I have seen his Amendment 81B, and obviously that implies the direction he is coming from, but I certainly do not want to be unhelpful to the Committee in any way. My objective, which the Government have now said is theirs as well, is to erase the principle of shadow mayors. However, I agree that the point of principle he has raised does merit discussion at some point in our proceedings. I will be as co-operative as I can, under advice.

[Baroness Hanham]

My Lords, unfortunately these amendments were grouped and degrouped rather speedily overnight, so we were slightly surprised to see this morning where the degroupings were. However, I accept the fact that the noble Lord will want to deal with the referendum issue at the next stage. Is there an amendment to which he wants to return? Otherwise I will accept all the amendments I have already said that I would accept, and I will go through them quietly again. The noble Lord indicates that he does not have an amendment to which he wants to return. That being the case, within the groupings of the noble Lord, Lord True, I shall list which amendments I am willing to accept, and if there are any differences about that, we shall look at the issue again. The amendments are Amendments 62A, 66A, 69A, 69B, 69C, 73A, 74A, 75A, 77A, 77B, 79A, 81A, 84A, 84B, 84C, 84D, 87A, 87B, 87C, 87D, 108A and 187. In listing them, I repeat the undertaking that I gave at the outset of Committee to remove the provisions for mayoral management arrangements.

I shall deal finally with Amendment 56, to which I suspect the noble Lord will want to return at some stage. The amendment would remove the provisions about whether an elected mayor is to be treated as a member or councillor of a local authority. I am told that these provisions replicate those in the Local Government Act 2000, which put in place the default position that a mayor is not to be treated as a member or councillor unless regulations provide that they should be. I do not know which side of the bed we are now on, or whether we are getting into it or out of it, as the noble Lord has said, but the default position is already in regulations.

[Lord Beecham]

I am just anxious that we should not have senior officers of the authority clambering into the bed. It might be easier to deal with it in the way that I have described, but perhaps that can be looked at. If regulations already exist and the intention is to replicate them, that might serve. On the other hand, it may be simpler just to revert to the principle of treating the mayor for all purposes as a councillor. But we can look at that before Report.

[Baroness Hanham]

I thank the noble Lord for that. Unless I have not done something that I ought to have done, I ask that the amendments that I have listed be accepted and that the noble Lord withdraw Amendment 56 for the moment.

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[Lord Tope]

My Lords, my name, too, is on this amendment like that of my noble friend Lady Scott of Needham Market. Unfortunately my noble friend is unable to be here today—which I think she particularly regrets given the other names that have now been added to the amendment. I echo all that the noble Lord, Lord Jenkin, has said, and I am relieved to know that even with all his experience, he is possibly nearly as confused as I am about exactly where we are left with this, except that it is certainly in a much better place than it was a few days ago, which is welcome.

I understand now—in the proper spirit of localism, I suppose—that those mayors who are minded also to become chief executives, as I think is intended in Leicester, are at liberty to do so. I said at Second Reading that localism must mean the right to make the wrong decision. Therefore, I have to defend the right to make the wrong decision. There should be a clear difference between the role of an elected political leader and the role of a chief executive—I realise that we still have a head of paid service. A chief executive is usually, in theory, apolitical. There is a clear distinction and I regret the extent to which that is becoming blurred.

Once again I thank the Minister not only for her support for the amendment but for being willing and able to come out and say so at an early stage in the Bill. Like the noble Lord, Lord Jenkin, I look forward to a clear exposition of exactly where we are, and what is and is not in the Bill, as we go forward.

[Lord Beecham]

My Lords, I join this love fest with enthusiasm and congratulate not only the Minister on working this small miracle but other noble Lords—particularly the noble Lord, Lord Jenkin, whose long experience and stature have no doubt contributed to bringing about a change of mind on the part of Ministers generally—on achieving this very satisfactory result to what would otherwise have been a very unfortunate situation. I am happy to endorse everything that has been said by the noble Lord, Lord Tope, in thanking all those involved.

[Lord True]

My Lords, perhaps I may take a minute of the House’s time and speak now to the two other amendments in the group on which I lead and which have the same welcome effect, as noble Lords on all sides have said. I, too, repeat my salute to my noble friend Lord Jenkin of Roding and the Minister. The separation of mayor and chief executive is a good idea and we should maintain it. I am grateful to my noble friend.

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Moved by

[Lord Beecham]

64: Schedule 2, page 216, leave out line 27

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[Lord Beecham]

My Lords, this group of amendments relates to still more regulatory powers conferred on the Secretary of State, this time in connection with the mayoral position, however derived, in respect of terms of office and the like. The schedule gives the Secretary of State power to regulate the term of office of an elected mayor. I am asking, through the amendment, whether “the term” is used in the sense of a four-year or five-year term, or whether it also gives the Secretary of State power to limit the number of terms. For example, under the police reform Bill, there is a limit to the number of terms that a police commissioner can serve—if that cataclysmic proposal should reach the statute book—to two terms of four years. There is nothing in the Bill to suggest that that is the Government’s intention this time, but it would be welcome if we could have an indication that it was not intended to limit the number of terms for an elected mayor. I say that having served what would have been four and a bit terms, had that term applied to the leadership of the council in Newcastle. But I declare no interest whatever in being elected mayor of Newcastle. I make that very clear.

Amendment 65 refers to the wide-ranging powers in regulations and would restrict those necessary for the purposes of this part of the Bill. Amendment 66 relates to a curious provision on elections and their administration. Under subsection (5) of new Section 9HN, the Secretary of State may make regulations,

“exercisable … on, and in accordance with, a recommendation of the Electoral Commission”,

with a curious exception which I do not really understand. Perhaps the noble Baroness can help me, if not today then subsequently, because it goes on to say,

“except where the Secretary of State considers that it is expedient to exercise that power in consequence of changes in the value of money”.

I do not understand to what that relates. It might relate to election expenses, but it is certainly not clear from the section what it relates to, and a little elucidation would be extremely welcome.

Amendment 67 seeks to ensure that the exercise of the Secretary of State’s powers to regulate in this whole issue of elected mayors and their elections is subject to approval by the Houses of Parliament. These are matters going to the heart of the exercise of local democracy, and they should be subject to affirmative resolution.

I think that the noble Lord, Lord Shipley, will speak to Amendment 86. One particularly odd matter is covered by Amendment 87ZA, which curiously has the Secretary of State involved in the appointment of mayoral assistants. I cannot think why that should be the case. I recall once in Newcastle, when we had a twinning relationship with a city in China, their mayoral delegation came over and the mayor addressed the council. He went up to the dais and one of his retinue came up with his spectacle case, opened it and handed the mayor his spectacles. That seemed an interesting position to hold, and I thought I would indent for a spectacle bearer to the leader of the council, but in the end refrained from doing so. Presumably the Secretary of State would now get involved in such an appointment. It cannot be right, can it, for the Secretary of State to be making regulations for the appointment of a mayoral assistant? Perhaps the Minister can explain. If she cannot do so today—and I would not at all blame her—perhaps she might write to me and others of your Lordships on that point. I beg to move.

[Lord Tope]

I shall speak to Amendments 86 and 87 in this grouping. My noble friend Lord Shipley has unfortunately had to leave for an hour for another very important engagement, as things would have it at exactly the moment when his amendments come up, so I find myself once again in that position.

The amendments are fairly self-explanatory. They deal with the appointment by the elected mayor of a deputy mayor. Amendment 86 says that such an appointment should be subject to agreement by a majority of the executive. That is certainly desirable; the amendment would say that it was essential, and that would be quite proper given what the role of the deputy mayor could be.

Amendment 87 deals with a situation when there is a vacancy in the office of deputy mayor and the elected mayor has to appoint another person to be deputy mayor. There is no provision that that other person need be a member of the executive; therefore, it is even more important in those circumstances that the other person appointed by the deputy mayor should meet with the agreement of a majority of the executive. As the noble Lord, Lord Beecham said earlier in a slightly different context, any sensible mayor, like any sensible leader, would make sure that they did that. On the other hand, it is still a little easier to remove a leader if it is necessary than, quite rightly, to remove an elected mayor. Therefore, we feel that this provision should be in the Bill for the sake of good government.

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[Baroness Hanham]

My Lords, I thank noble Lords for this little exchange. I will see what I can do. Amendment 64, as the noble Lord said, seeks to remove the power of the Secretary of State to make regulations changing the term of office of elected mayors. This is an important power that allows for transitional arrangements to be made following the first election of mayors. In October 2001, when a number of mayoral elections were held, the Secretary of State was able to vary the mayors’ terms of office so that the second elections were held in May, and in some local authority areas the mayor’s term was varied to enable the mayoral elections to be held at the same time as local government elections. We believe that it is important that this power, which has been available to the Government since 2000, is retained.

Amendment 65 is unnecessary as regulations made under new Section 9HN can relate only to the conduct of mayoral elections, and changes to electoral law or regulations cannot be made for any other purpose under this power.

The noble Lord has queried the provision at new Section 9HN(5). The Secretary of State is able to make regulations placing limitations on election expenses. However, in most cases he must do so only following a recommendation from the Electoral Commission. The only exception when a commission recommendation is not necessary is where the Secretary of State makes changes to any limits in line with inflation. That would mean an upgrading of the mayor’s election expenses owing to the fact that there had been inflation, which of course we do not have at the moment so it would not be necessary. The noble Lord asked what “money” relates to here. It means election expenses, which can be uprated by the Secretary of State. Again, this replicates provisions in the Local Government Act 2000.

Amendment 67 seeks to require regulations made by the Secretary of State under new Section 9ID on the election, terms of office and filling of vacancies of executive leaders to be subject to the affirmative procedure. We envisage that any regulations made under this section would be used for transitional purposes when a change in governance arrangements takes place. Furthermore, the Delegated Powers and Regulatory Reform Committee, having completed its review of the Bill, is satisfied with the level of parliamentary scrutiny of regulations made under new Section 9ID. We are therefore not convinced that the existing arrangements in the 2000 Act, whereby such provisions have been subject to the negative procedure, should be changed. That remains the situation.

On the question of deputy mayors, Amendments 86 and 87, tabled by the noble Lord, Lord Shipley, seek to require the mayor to gain the agreement of his or her cabinet when appointing their deputy mayor. The Government’s view is that the decision about who to appoint as their deputy mayor should be a decision for the mayor alone. It seems unnecessary for a directly elected mayor, accountable to the electorate of an entire local authority area, to have to seek the agreement of a cabinet, the members of which they themselves have appointed, to determine who the deputy mayor should be.

Amendment 87ZA seeks to remove an elected mayor’s ability, if he or she wishes, to appoint an assistant. Such assistants can currently fulfil a similar role to those carried out by political assistants to the main political groups on the council. Given the significant role that elected mayors play in their local communities—taking key strategic decisions, acting as ambassador for the area and facilitating effective partnerships are just part of what they do—then, in the same way as leaders are supported by political assistants, elected mayors will need an assistant to effectively carry out these roles. There are currently four independent and local authority mayors in England. As such, independent mayors are ineligible to have a political assistant who works only to the main political groups on the council. Amendment 87ZA may have the effect of leaving such mayors without any access to any political support or assistance.

However, we are not saying that an elected mayor must appoint an assistant. The appointment of a mayoral assistant is entirely optional and we would expect mayors to have regard to existing support structures within the council, both political and administrative, and its financial resources when reaching a decision on whether it is necessary to appoint an assistant. The Secretary of State has, of course, no involvement in a mayor’s appointment of an assistant.

I hope that these responses are helpful and will convince the House that these amendments are unnecessary and need not be pressed.

[Lord Beecham]

I beg leave to withdraw the amendment.

Amendment 64 withdrawn.

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[Lord Tope]

My Lords, my noble friend Lord Shipley wished to move this amendment but, as I explained earlier, he has unfortunately, from my point of view, had to go to another engagement and will be there, I think, for another 15 minutes or so.

At a later stage of the Bill, we will probably spend a considerable amount of time discussing local referendums and the many issues that arise in connection with them. This is the first, and perhaps in some ways slightly premature, time that we come to this subject. Amendment 73 would raise the threshold for calling a referendum from 5 to 10 per cent of local government electors. We believe that 5 per cent is too low a figure. When we get to the later provisions, we will have a lot more to say about what the threshold should be and how we should get there, as well as other issues.

My noble friend Lord Shipley would have said that, if the need for a referendum is strong, there really should be more signatures to demonstrate that, and they should be easy to collect. I think we all recognise that the cost of a referendum, wherever it is conducted, is significant—it is not something that is simple to carry out. A whole range of matters has to be dealt with in conducting a referendum and, if it is to be done at significant cost, the need for it must be truly demonstrated. Public demand for it should be there, and 10 per cent—I would say at least 10 per cent—is a better figure because it balances the right to have a referendum, which is conferred under this legislation, with the need for it to be held and the implications of doing so. I beg to move.

[Lord Beecham]

My Lords, this is another example of possible misplacement in the groupings, for which I do not blame anyone. It is very difficult to get a perfectly rational system. In fact, I pay tribute to the officer of this House who works so hard, so long and so late in trying to make sense of my and other noble Lords’ belated efforts to table amendments. She does a wonderful job and I have every sympathy for her. At least she does not have to read my handwriting, which would make the task impossible and not just difficult.

In relation to the amendment moved by the noble Lord, Lord Tope, I certainly concur, as, I think, do these Benches, with the proposal for a higher threshold. However, I want to address the rest of the amendments in this group, which go to the critical question in relation to governance of whether there should be compulsory referendums at the diktat of the Secretary of State. The amendments that follow essentially relate to that.

The Minister has fortunately helped us by removing the conflation of the position of mayor and chief executive, and she has dealt with—perhaps liquidated—the position of shadow mayor. We are now left with this element of the compulsory referendum. In that respect, it is necessary to look at the whole question of the mayoral system—its provenance and development.

I was present at the meeting about 15 years ago when Tony Blair launched on an unsuspecting Labour Party, and an even more unsuspecting shadow Secretary of State in the person of Frank Dobson, the notion of an elected Mayor of London and, following that, the possibility of having elected mayors elsewhere. I took his motivation at face value. He thought—and others who have advocated this in the past have thought and currently think—that it would invigorate local democracy, improve turnout at local elections and enhance the accountability of local political leadership because the elected mayor would have a mandate from across the whole authority. That was the theory; let us look a little at the practice.

Bearing in mind that until now, and until the legislation changes, only 5 per cent of the electorate in any authority has been needed to requisition a referendum, there have been, I think, only 41 referendums, if one takes Leicester into account, in the 10 years in which this option has been open. One area has had second thoughts and has terminated its adoption of the system. Of the 40 referendums, 14 were in favour of an elected mayor and 26 against.

What is perhaps more significant is the turnout in the referendums and the turnout in the local elections. This, after all, was going to be the great advantage to local democracy of this new system. There have only been two referendum turnouts greater than 40 per cent and both of those took place on a general election day. Some referendums had turnouts of less than 20 per cent, 10 had between 20 and 30 percent, and 17 had between 30 and 40 per cent. The upper thirties is probably about average for a local election—by no means satisfactory, but self-evidently at least no worse, and in many cases better, than the turnout in these referendums. It is quite significant that the turnouts were also very low in the ensuing elections. Some of the referendum turnouts were abysmally low: Bedford had a turnout of 16 per cent; Lewisham had a turnout of 18 per cent; among the best were Hartlepool with 34 per cent and Torbay with 32 per cent. However, this does not give any grounds for saying that this is an enormously popular reform that people are rushing to adopt.

Nor has the turnout in elections been very much greater, even in London. The turnout in the first mayoral election in London was 37 per cent. In the second, there were two—how shall I put it?—charismatic or certainly very visible candidates, and an election that seemed to run for a year, such that every time I stepped out of a Tube station in London and saw an Evening Standard banner, it was always proclaiming something about Ken or Boris. It was impossible, even if one wished to, to escape the fact that there was a London mayoral election. However, even then, the point seems to have eluded 55 per cent of the London electorate. Again, there does not seem to be much evidence for the initial inspiration of this change: that it would improve—whether dramatically, modestly or even at all—the turnout in local elections or interest in local government.

The other arguments were about visibility and effectiveness. Many of the elected mayors have been capable people. In London, I can certainly cite three of them: Robin Wales in Newham; Steve Bullock in Lewisham, albeit with a referendum there of only 18 per cent and, I think, a mayoral election turnout of about the same, when he was first elected; and Jules Pipe in Hackney. All of them, incidentally, had been council leaders before they became elected mayors. However, what sort of alchemy is it that is necessary to transmute a council leader into a mayor? Or is it—and I hope the right reverend Prelate will not take exception to my analogy—some process of transubstantiation that transforms a less visible and accountable leader into an all-singing, all-dancing mayor with much enhanced visibility and effectiveness?

It was interesting that, in promoting the idea of elected mayors, the Labour Party saw fit to send a delegation to the Netherlands to see how this wonderful system was working. They slightly overlooked the fact that, in the Netherlands, mayors are in fact Crown appointees and not elected at all. Similarly, those who pointed to very successful continental mayors, such as the mayor of Barcelona, seem to overlook the fact that he was not personally directly elected—he was the leader of the largest group or faction in the Barcelona council. He was a very able—in fact a brilliant—local politician and extremely effective, but he but not directly elected. In our own politics, although I remember Tony Blair saying in a television broadcast, “The people of Britain elected me Prime Minister”, actually they did not. They certainly have not elected the present Prime Minister. That is not to disparage him; it is just a fact. Why should it be assumed that it is necessary to have that direct personal mandate to be a legitimate leader?

It is said that if authorities adopted the mayoral system, extra powers would be given and a certain amount has been given to mayors in that position. Yet the question arises that we discussed briefly at Second Reading and earlier in Committee: why should those powers be confined to the directly elected mayor, as opposed to the leader and executive model? There seems to be no particular rationale on that. One thinks of great local government figures of the past, from all parties: of Joseph Chamberlain in his initial, Liberal incarnation; of Neville Chamberlain, who was slightly dismissed by Lloyd George as a good mayor of Birmingham in a bad year but who nevertheless had a considerable local government reputation and, it is fair to say, did a lot for it as a Minister; or of Herbert Morrison, a great leader of local government; or, perhaps slightly more controversially, of one of my capable but slightly flawed predecessors as leader of Newcastle council, Dan Smith, who was nevertheless a hugely influential and creative figure, in the best sense, during his surprisingly brief period. People in all political parties have also been extremely effective. Why should it be assumed that council leaders are necessarily less visible, accountable or effective than elected mayors?

There are problems stemming from the system as it has been created, not simply because of the accretion of powers in a single pair of hands but because of the structure around that. It takes a two-thirds majority to overturn an elected mayor’s budget. Yet you can have a situation with an elected mayor from one party and a majority of the council from another. It has happened twice in the authority adjoining mine. It happened with a Labour mayor and a Tory council and it is now exactly the other way round, with a substantial Labour majority in North Tyneside and a Conservative mayor. That highly anomalous situation raises two questions. First, what is the other councillors’ role in that kind of situation? It has to be a substantially downgraded role from what we are used to and what is appropriate. Secondly, will there not come a day when people wonder, “What is the point of electing councillors at all, or of voting for a particular political party, if you are required to have at least two-thirds of the council to vote down a proposition from the mayor”? Most particularly, there is the most crucial decision of all: that about the budget. There are, it seems, real difficulties inherent in the system.

There is also a suspicion, certainly on this side of the Chamber—it may be in certain parts of the other side of the Chamber—about the current political motivation for this decision to take the power to require referendums to be held. I refer in particular to a speech made by the Member for Grantham and Stamford in another place, Nick Boles. He is, I suppose, a Tory intellectual. There are people unkind enough to think that term a bit of an oxymoron but I would not allege that in the case of Mr Boles, who is an extremely bright, intelligent and articulate man. Yet he said some time ago, apropos of this position about elected mayors, that it was the only way in which there would be a ladder back into power for the Conservative Party in places where its chances were pretty minimal. I think that he cited Manchester and other places where Conservative representation has been minimal, if not nil, for some time. I hope that is not the Government’s motivation and I would not for a moment imagine that the Minister would subscribe to that motivation, but others elsewhere might.

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[Baroness Hanham]

My Lords, the amendment has excited a deal of interest. I wish to make it absolutely clear that we are not talking about imposing mayors on cities; we are talking about imposing a referendum. It is crucial that we do not get too exercised about the imposition of a certain form of government. We are saying that it is the coalition Government’s view that cities would benefit enormously from having a mayor; they would benefit democratically and from all the interests that a mayor brings and all the influence that a mayor can exert. The noble Lord, Lord Jenkin, who is obviously not totally behind us on this, has pointed to the success of the London Mayor. When we first saw that starting, I do not think any of us thought that it would be very effective. In fact, it has been under two separate Governments; it has raised the profile of London.

We are trying to give a similar profile to other cities or to give local people the opportunity to say whether they think that would be an appropriate form of government for their city. The only imposition will come from the requirement to hold a referendum, and that requirement will be introduced under this legislation.

We believe that the economic growth and prosperity of our larger cities is absolutely essential to the economic recovery of the country as a whole. If we do not have good economic situations in the cities, things will look very dismal. We believe that a mayor would promote extra economic growth.

The Institute of Governance and the Centre for Cities have highlighted in their recent joint report that cities are the heartbeat of the United Kingdom’s economy. I think we would all support that. Although they occupy less than 10 per cent of the United Kingdom’s land, they contribute 60 per cent to its economic output.

The Government believe that it is clear that mayors are right for every major city. We remain true to our localist credentials, and it is absolutely up to the citizens to decide whether their city will have an elected mayor or not. We think they should, and we will be doing our utmost to ensure that everyone has all the facts about how a mayor can benefit the city and do a good sales job for its businesses and the people who live and work there. But finally and ultimately, the decision will be theirs.

We are committed to this in the coalition agreement. I thought that the noble Lord, Lord Greaves, was going to go seriously off-message and he may indeed seriously be still off-message. I hope that the noble Lord, Lord Tope, is not off-message, or all the other people who have signed up to this amendment. This is part and parcel of the coalition agreement that we should give local people in the larger cities in England a direct say on whether they want their city to have an elected mayor.

I know that local people can already petition for such a referendum. They can do it under previous legislation, and their elected representatives can decide, as they did in Leicester, where they have gone ahead of the game. There the council decided that the city should have a mayor, with the first mayor being elected there in May. We are convinced that the issue is now of pressing importance for the cities and for the country as a whole, and that people in the major cities should have a simpler, more immediate means for addressing the question. In short, as soon as practicable, people in each of the largest cities should have an opportunity of deciding whether they want an elected mayor. Some see this as central government imposition and “anti-localist”. We disagree completely with that. It will be for the local people to decide.

We have listed the cities, but the noble Lord, Lord Beecham, tabled Amendment 81B, where he wants specifically to have the cities named in the Bill. We will not agree to this, as it would have the effect of making the Bill hybrid, which would be a terrible mistake. Apart from that, even if that was not the situation, it would provide uncertainty, and I think that the House feels that that should be avoided. Given that the House will be asked to approve any order under Section 9, which is the order-making power, and we will have an opportunity to debate the merits of each city holding a referendum, I do not believe that it is necessary to set that out in primary legislation. I will certainly resist Amendment 81B.

I will be resisting the other amendments, including that on raising the threshold from 5 per cent to 10 per cent. In the cities, 5 per cent would be a very substantial proportion, and we should not make the hurdle any higher than that. As it is cities that we are talking about, we would not want to change that percentage.

I am not going to address each amendment. I have given an indication of why we believe that the mayoral referendum proposal should first of all come to this House and, if agreed, should go on to the cities to be carried out as soon as possible so we can have a decision and get on with having elections in the next year or the next 18 months. I thank noble Lords for their contributions but regret to say that I will not be accepting any of the amendments. I ask the noble Lord who moved the amendment to withdraw it.

[Lord Beecham]

My Lords, I thank the Minister for her reply, which was almost precisely in the terms that I expected. I shall refer briefly to the interesting speech of the noble Lord, Lord Jenkin, who talked about the success of the mayoral system in London. Arguably, that is the case, but there were successful leaders of London before the mayoral system—Herbert Morrison has been cited but one could also cite Horace Cutler as a Conservative leader or indeed Ken Livingstone in his original incarnation.

I am not sure whether it was the noble Lord, Lord Jenkin, or the noble Lord, Lord Heseltine, that Ken Livingstone was referring to on one occasion when, on emerging from Marsham Street, as it then was, having had one of a series of meetings in the dark days of the 1980s when the GLC was at loggerheads with the Government, he was asked, “Why are you going to see him again?” and he replied, “I think he likes me for my body”. Whether it was the noble Lord, Lord Jenkin, or the noble Lord, Lord Heseltine, who said that, I am not entirely sure.

[Lord Jenkin of Roding]

I assure the noble Lord that it was not me. I would also question whether or not it was my noble friend Lord Heseltine. It may be a bit apocryphal.

[Lord Beecham]

I recall seeing it on television at the time. At all events, the noble Lord refers to a continental pattern, but the continental pattern is actually very varied. He mentioned Barcelona but, as I pointed out, in Barcelona there is no direct election for mayor. There are direct elections or indirect elections in different places and, as I also indicated, there are places where the mayor or burgermeister is a Crown or state appointment. The proposition here is more American in its origins, rather like the unfortunate police commissioner proposal —and equally tainted, in the view of some of us.

The noble Lord, Lord Jenkin, also referred to Liverpool. I well remember those days, and I remember the noble Lord going out of his way to be helpful to a very difficult group of people who, having managed to persuade him to make some concessions, then went extremely triumphalist at his expense and indeed may have caused him to move on from his job, an ill reward for a Minister who was doing his level best to help a difficult situation, but not one that surprised those of us who knew those with whom he was dealing. I recall a Sunday Times “Life in the Day” when Mr Hatton was talking about his family and how his daughter was very keen on horses. The article ended by saying that she liked nothing better than “to have a little trot around”, which seemed to me entirely appropriate. The noble Lord was extremely patient and forbearing, and those of us who remember him at that time acquired then and have since retained great respect for him and his style of politics.

[Lord Jenkin of Roding]

The noble Lord is being more than generous. I should point out that that most demanding of bodies, the 1922 Committee, had absolutely no doubt that I had been suborned by the leaders of Liverpool, and I had overwhelming support from that committee.

[Lord Beecham]

The noble Lord certainly deserved it.

The Minister talked about Amendment 81B as being out of place because it would provide uncertainty. On the contrary: the point of that amendment is to limit the operation of the imposed referendum—I accept entirely that an imposed referendum is what we are discussing, not an imposed mayoral system—to these 11 cases. If there is a technical problem with what is in effect a sunset clause dealing with that group of authorities, perhaps on Report we will have to recast it. I think that it is fair to say that it will be our intention to test the opinion of the House at that stage about whether it is right to press on with imposing referendums in the way that the Bill provides. We do not think that it is right to do so. The noble Lord, Lord Greaves, has raised a legitimate question about the cost, which will no doubt feature in any campaigns which have to take place.

One further point is something of a puzzle. The expression regarding the definition of these authorities was that they were the “11 largest cities”. Well, that is not the case. Assuming, for the moment, that some of them are in fact cities, there are others: the city of Sunderland has a larger population than Newcastle; Kirklees, a collection of Yorkshire towns, is also substantially larger than Newcastle; and there is Hull. I do not quite know the basis on which the 11 have been chosen. However, these are the lucky 11 that remain in the frame. We on this side of the House will do our best to see that the overall principle is rejected by the House and then, if not, that the mandatory exercise is confined to these 11 authorities.

[Baroness Hanham]

I will address two issues. I said that we were rejecting Amendment 74A. Of course, we are not; we have already accepted it. We were asked for the estimated cost of the mayoral referendums. It is about £2.6 million, and the department will bear the cost.

[Lord Beecham]

My Lords, the noble Baroness has a rather more pleasant duty to attend to in a few minutes when she goes to, presumably, the town hall in Kensington and Chelsea. We wish her well, and an enjoyable evening. We look forward to resuming the debate next week with the new freeman of the Royal Borough of Kensington and Chelsea.

[Lord Greaves]

My Lords, I will be very quick; we would not want the Minister to be late. She is quite right: I am totally off message on this issue as far as the coalition agreement is concerned. I am not off message as far as the coalition is concerned. The Government should learn. They have had a huge car crash, as people say nowadays, with the AV referendum; I voted loyally for that on every occasion and now I wish I had not. This will be another, in the modern phrase, car crash.

Whatever has been in coalition agreements and manifestos, there are times when, politically, Governments have to consider what is likely to happen. In most if not all these places, it seems likely that the Liberal Democrats will be campaigning vigorously against having an elected mayor—alongside the Labour party in many cases, and, I suspect, the Conservative party in so far as it still exists in some of these places; it certainly exists in some of them.

I am grateful for the information on the cost. I did not quite catch who was going to bear it. Was it central government? Yes. Well, a waste of public money is a waste of public money, whoever pays for it. I wonder whether the Government can direct me to some serious evidential basis for the view that having elected mayors provides better local government than would otherwise have been the case. I have not seen that evidence. There is lots of political and other argument about it, but I have seen no serious evidential basis for that proposition. If the Government have it, I would be grateful if they would make it available.

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[Lord Jenkin of Roding]

My Lords, as I spoke at length to the earlier amendment, I can deal with this extremely briefly. This amendment and Amendment 79, which are in my name and those of the noble Lords, Lord Best and Lord Hunt of Kings Heath, and the noble Baroness, Lady Scott, are intended to be paving amendments to the substantive amendment which we discussed in the previous group, Amendment 82. My noble friend may wish to refer to some of the amendments to which she has put her name in this group. I beg to move.

[Lord Beecham]

I just want to confirm that the effect of the amendment is to remove the possibility of an authority being required to hold a referendum again within 10 years once a first referendum has rejected the idea of a mayor. I understand that to be the position, but having worked quite long and late on these matters, I was not entirely sure that my mind was sufficiently clear to appreciate that point. The Minister seems to be confirming that situation, which is eminently satisfactory.

[Baroness Hanham]

My Lords, we had a long discussion on the previous amendment, as the noble Lord, Lord Jenkin, says, and I think that that covered what has been raised here. I can confirm that Amendments 76 and 77 would prevent another referendum within 10 years. Therefore, I ask the noble Lord not to press Amendments 76, 77, 78 and 79. Government amendments have already been agreed to. I thank the noble Lord, Lord Beecham, for his very kind remarks. I am off now to become a free woman.

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[Lord Newton of Braintree]

My Lords, I rise to do something which my noble friend on the Front Bench will regard as unusual, if not unique. In the absence of an opportunity to speak on whether the clause should stand part, I state that, although I am interested in the answers to the ingenious questions that my noble friend Lord Greaves has asked, I am principally concerned to declare my undying support for this clause, as I understand it.

I have already indicated that my wife has been chairman of Braintree District Council, is currently the cabinet minister for planning and strategy—I think that that is the right description—is on the planning committee and, indeed, represents me on Braintree District Council. Indeed, I even voted for her. When my wife became a district councillor for the second time about eight years and a few months ago, I could not believe it when I discovered what these predetermination rules were. Any MP would have had a fit if he had been told that he could not indicate to his constituents that he shared their view on a matter that was likely to come before Parliament and would vote accordingly. I think that I have the purport of this right. Noble Lords are indicating that I have. Why should councillors not be able to say to their constituents that they agree with them on a matter and that they will vote accordingly when it comes before the council? I cannot see the slightest merit in that position. I do not think that it is democratic or defensible and, if, as I understand it, this clause gets rid of it, I am in favour of the clause.

[Lord Beecham]

Surely the noble Lord thinks that there might be a distinction between a quasi-judicial function such as a planning or licensing matter and a matter of general policy.

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[Lord Hart of Chilton]

I want to make just one contribution to this fascinating debate. The arguments alleging bias are few and far between and almost invariably fail, for the reason that the noble Lord, Lord Newton, gave; that is, it is almost impossible to get to the bottom of whether somebody is biased. The issue here, however, is that, in relation to a planning application, councillors are charged with giving full consideration to all material factors and the local plan, and reaching a decision in the light of the officer’s report that they have received. This is not to preclude councillors saying whatever they want and they can campaign until the cows come home on particular issues, but here we are talking about a particular councillor considering a planning application. Any councillor can go the planning committee, make representations and argue the merits of a case, but we are concerned here with a decision-maker who has said unequivocally that he is on all accounts against a proposal. It does not matter what he has heard; he will be voting against. In those circumstances, how can that person, sitting there and evaluating the application, be deemed to be fulfilling his duty to give due consideration to the application before him? The words rather indicate that, from now on, this will be a bias charter. Those who wish to campaign in that way will always then have a defence, saying, “You cannot indicate that any of the things that I said up to the moment of the application being considered is evidence of bias”. It will now make situations where bias was always difficult to prove almost impossible. Bias in relation to an application considered by councillors is not a proper course to take.

[Lord Beecham]

I recall at Second Reading the noble Lord, Lord Teverson, speaking very passionately about how one needs to respond to constituents. The assumption is that a councillor will always be on the side of his constituents, but that may not be the case. A councillor may decide that a particular project—let us say, an application for a bail hostel or something of that kind—is one that he, having heard the evidence, would want to support. It might be an incinerator or an abattoir, which may not play terribly well with his constituents. How would those constituents feel, as opposed to the commercial developer who might be the applicant—which is assumed normally to be the case—if they believed that their councillor had made up his mind in favour of something that they did not want without being open to persuasion and hearing their arguments and representations at the decision-making meeting? If one takes that point of view into account, one has the grave concerns which both my noble friends have advanced and which require detailed consideration by the time we get to Report. This is not a one-way street. We have to be very careful about how we might seek to change the balance within what is, as I implied in my earlier intervention, a quasi-judicial function. It is about only those that I think we are concerned.

[Lord Taylor of Holbeach]

The noble Lord has degrouped amendments which address that issue; perhaps we will come on to that matter later. The failure of an elected politician to fulfil the wishes of their constituents or to fail to respond properly to their wishes cannot be legislated for; the solution lies in the electoral process, at a subsequent general election. The illustration that the noble Lord used could not be covered by legislation in any way that he would have wished.

I believe that we have satisfactorily demonstrated that the purpose of this clause is to clarify the position of elected councillors to make it possible for them to campaign and engage fully with their local communities on issues which concern them without inadvertently—as has been the case in the past—excluding themselves from the decision-making process by doing so. That is why this is a great step forward and why it is in the Bill.

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Moved by

[Lord Beecham]

96A: Schedule 4, page 256, line 11, leave out paragraphs 11 to 14

[Lord Beecham]

My Lords, this is the first in a series of amendments on the position of standards committees. A small number of us might like to have seen the Standards Board preserved, but clearly that will not happen. The focus of this amendment and subsequent amendments, which will be moved by other noble Lords, is on the preservation of standards committees in councils. This amendment deals with the position on page 256 of the Bill of authorities which currently have such committees and it would amend the previous legislation to omit most, if not all, of those listed. It is probably an accident of grouping that it appears here rather than with Amendment 97, to which I have added my name and which the noble Lord, Lord Tope, will move. I assume that the noble Baroness will not be here. I apologise to your Lordships for the fact that if we go more than a few minutes past seven o’clock, I will not be here either because I need to get back to my home in the north tonight. In case that eventuality arises, I add my strong support to the requirement for standards committees to be preserved. We need a mechanism in councils that is independently chaired—other amendments go into the detail of how such a procedure might work—to retain the confidence of the public in the standards to be observed by those who represent them locally. I hope that it will not be the same as the standards regime in another place but experience suggests that there is a need for a properly constructed scheme under which complaints can be ventilated and dealt with speedily, locally and impartially to sustain confidence in local democracy. To that end I move this amendment and indicate my support for the subsequent amendments.

[Lord Wills]

I hope that my noble friend will comment on a concern brought to me by a constituent when I was the Member of Parliament for North Swindon, which powerfully illustrates the case that he is making for the amendment.

A couple of years ago the constituent came to me with his concerns about the Wyvern theatre in Swindon, which is owned by Swindon borough council but the management of which is contracted to a private company. My constituent had learnt that the business of the lead member in the Swindon borough council cabinet with primary responsibility for letting this management contract had been given thousands of pounds worth of business—from memory, it had been given £10,000 to £12,000 worth of business—by the theatre. It was clear that the councillor concerned had acted properly in leaving the room whenever this contract was discussed. However, that did not satisfy my constituent who made the point to me over and over again that if a Minister had been in an analogous position there would have been a scandal and the Minister would have had to resign. He kept saying to me that even if the councillor had done nothing wrong himself, the private management company might still be trying spontaneously to curry favour with that councillor as his decisions could be of enormous importance to its commercial well-being.

I told my constituent that in my view there was nothing necessarily wrong with a councillor getting business in this way. Councillors are not paid a salary in the same way as Members of Parliament are, for example, and most councillors need to earn a living. I told my constituent that the way to deal with the matter was to find out whether a proper procurement process had been followed, whether the contract had been put out to tender, if it had not been, why not, and if it had been, how many people had responded to the tender, what prices had been offered and whether the contract had been awarded on price, quality or for some other reason—in other words, whether it was all transparent. My constituent pursued this route and I did so on his behalf. We went to the council, which could not do anything. We went to the private company which was not covered by the freedom of information legislation and refused to give any information, so the situation was completely opaque and remains so to this day.

I hope the Minister will agree that such a lack of transparency on such a potentially sensitive issue is not acceptable and that this amendment may provide a way to tackle the opaque nature of such a transaction. I am sure that this situation is not unique to Swindon. If the amendment is not acceptable, perhaps the Minister can come up with some other proposal. I hope my noble friend will agree that his amendment would help to deal with this sort of issue.

[Lord Beecham]

My Lords, I am not sure that it would. Standards committees were established to investigate allegations about members’ conduct. If a member has complied with the requirements of registering an interest and declaring it, unless there was any evidence on the part of a complainant that he had done something improper such as lobbying colleagues behind the scenes or something of that kind, I cannot see that the standards committee route would avail. Other processes might be worth pursuing—for example, via the audit committee of a council or possibly the district auditor. However, I cannot see, in the particular circumstances that my noble friend has outlined, that that would fall within the province of a standards committee or the Standards Board. There does not seem to be a sufficient prima facie case of misconduct on the part of an elected member who has actually declared an interest and absented himself from a decision-making process. I am sorry that that does not sound too helpful, but the system was not designed for such a case as that which my noble friend has outlined.

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[Lord Tope]

My Lords, I hesitate to intervene at this stage. This is almost the first time in a very long local government career that I actually think that central government should be imposing something. I share the views that have been expressed that it must be a statutory requirement that each local authority must—not may—have a code of conduct. There is a separate issue concerning how that code of conduct is drawn up but I think that it would be nonsense for each local authority to have a different one. There should be a uniform code. I believe that the Association of Council Secretaries and Solicitors—we used to call them legal officers—is drawing up a code of conduct that could be adopted. That is good and right, and I do not suggest for a moment that central government should draw up the code and impose it; I am saying, and I believe quite strongly, that Parliament—central government, if you like—should say that a code of conduct is mandatory, not voluntary. Good local authorities—the vast majority—will adopt a code of conduct, but the ones that most need, and should have, a code are probably those least likely to have one. That is why it should be a mandatory requirement.

The code does not have to be drawn up by central government; it could be drawn up by the association that I mentioned or by the Local Government Association. However, I believe that it needs to be a uniform code so that we do not have different standards wherever they happen to suit particular local interests, usually because it is those local interests that are most in question.

My other question relates to the standards committee. Again, I feel that in the general, although not universal, rejoicing at the departure of the Standards Board for England we are in danger of throwing out a baby with the bath water. We are in danger of moving to a situation that is worse than the one we had before the Standards Board was put in place. Therefore, I believe that it should be mandatory for each local authority to have a standards committee. I say that as one who will constantly argue against prescription, but this is one area where it is particularly important. My noble friend Lord Shipley has proposed a way in which standards committees might be constituted. There are lots of discussions to be had around that, and they could well be had within local government and not necessarily involve central government. However, again, the mandatory requirement to have a standards committee is fundamental.

Those are two issues where, unusually for me, I argue that there should be at least a minimum requirement of a mandatory code of conduct and a standards committee, the composition and nature of which could be subject to further consultation and discussion. Those two requirements should be in the Bill.

[Lord Beecham]

I endorse everything that the noble Lord has said. I could not have put it better myself. I beg leave to withdraw the amendment.

Amendment 96A withdrawn.

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Lord Taylor of Holbeach: We are back on track on an issue which we covered in some of the previous debate. I hope that I have made the position of the Government clear on the Standards Board and the unwillingness of the Government to take the position of imposing a code of conduct on councillors from the centre. The philosophy of the coalition is that the Localism Bill means what it says. It is up to local authorities to present the conduct of their public duties in a way that is to the satisfaction of the electorates that they represent. In no way does that imply that misconduct can be approved of but it is for local authorities to determine what measures they put in place to effect a code of conduct.

[Lord Beecham]

I hear what the noble Lord says but the Bill distinguishes, does it not, between matters which will be made criminal offences. Failure to register or to declare an interest are offences at the serious end of misconduct. But is that not a national provision? What is the difference in principle between obligations of that kind and obligations of other sorts of conduct that can affect a community that a council is representing?

[Lord Taylor of Holbeach]

I do not think the noble Lord is suggesting that to offend the code of conduct in any way should be made a criminal offence. What is clear is that some aspects of conduct in public office are indeed criminal matters and therefore subject to prosecution under the existing law. We will come on to the declaration of interests at a later point.

This has been a worthwhile debate, but I hope that noble Lords understand exactly where the coalition is coming from and why it is seeking to introduce a regime that puts the responsibility on local authorities themselves to ensure the proper conduct of their members and their business. We will have useful opportunities between now and the Report stage to discuss these matters further. In the mean time, I hope that my noble friend will withdraw his amendment.

Localism Bill

Lord Beecham Excerpts

Monday 20th June 2011 Lords Chamber

[Lord Tope]

I am grateful to the noble Baroness. I did not mean to imply that these things are simple and easy and that all you need to do is talk to people and everything will come out right; I am not that naive or simple. I am just saying that the way in which decisions are made is often as important as what the final decision is, and sometimes helps and facilitates the making of those difficult decisions. They need to be made by the appropriate sphere of government that is democratically elected and accountable.

We set out here, at some length, what we believed should be the definition of localism—what we believe it means. We did so in part to see who would agree with us and who would not. We think that these are the criteria on which we should judge the Bill as we go through Committee: that is why we tabled the amendment in Committee, at the beginning. We are saying that these are the criteria by which we should judge whether this part of the Localism Bill reflects what we understand to be localism, and that if it does not meet the criteria perhaps something in the Bill could be improved. We have had a useful, relatively short debate and perhaps have a better understanding at least of what we on these Benches mean by localism. I am not sure quite what noble Lords who made a “yes, but” response understand by localism. As they said, perhaps it will become clear as we go through the various stages of the Bill.

[Lord Beecham]

My Lords, I, too, declare an interest as a councillor in Newcastle upon Tyne and as a vice-president of the Local Government Association. A week ago in your Lordships' House, the government Chief Whip lamented the fact that not enough legislation was being debated in Grand Committee. Of course, it would have been quite wrong for this Bill to be assigned to Grand Committee. However, this debate could hardly be better placed than in Grand Committee in the Moses Room. After all, that Room bears a portrait of a majestic, bearded figure bearing tables of stone on which are incised 10 commandments.

This afternoon, the noble Lord, Lord Greaves, comes to us not with 10 commandments but with 10 criteria by which this Bill is to be judged. Try as I might—and I have tried—I cannot find very much to disagree with. It is something like 120 years since Sir William Harcourt, a distinguished Liberal Chancellor of the Exchequer, proclaimed, somewhat optimistically from one point of view, or perhaps pessimistically from another point of view, that, “We are all socialists now”. Nowadays, we are all localist, but that definition of localism is, to put it mildly, somewhat elastic. I think the noble Lord, Lord Greaves, has set out as good a definition as one might reasonably expect. If I had a reservation, it would be that in proposed new subsection (1)(d) in the amendment the reference is to,

“minimum standards for the provision of public services”.

I accept that that would be a partial definition, but I think one needs to look at minimum entitlements in addition to minimum standards. Standards imply provision of a service; entitlements are a somewhat broader concept that would, for example, avoid us reverting to a 19th-century poor law view in which benefits are calculated differentially across the country. Indeed, there is a case for variation, and I have sometimes thought of promoting a society for the preservation of the postcode lottery because it seems to me that localism of any definition implies different choices according to local circumstances. I therefore welcome the thrust of this proposed new clause.

[Baroness Hamwee]

Would the noble Lord agree that a better term might be “postcode democracy”?

[Lord Beecham]

I would not say that it is a better definition, but I would accept it as an additional definition. However, the spirit is shared across the Chamber.

The key to the noble Lord’s amendment is surely the emphasis on representative local democracy. That is what local government is and must be all about. That is what, as we go through this Bill, we shall see is in danger of being significantly undermined, both in the Bill’s provisions and in some of the current policies that are being applied. Representative local democracy is different from government by referendum of the kind that we sometimes see in jurisdictions such as Switzerland or California, but we will debate those matters later.

I think the noble Lord, Lord Shipley, was entirely right to borrow my phrase about the atomisation of local government. There is a real danger in this Bill and in other legislation that is currently being debated in Grand Committee and other places that that will be a feature. He is also right to say that all government departments need to adopt an integrated approach. In that context, it is worth reflecting on what appears to be happening to what is now called community budgeting and was called total place. There is little evidence, it seems to me, certainly based on an Answer that I received from the Minister, that anyone in government, apart from the Department for Communities and Local Government, is taking this very seriously, but it is a serious issue and I certainly wish the Minister well in her efforts to persuade her colleagues to sign up effectively to it. In that context, if we are talking about local government promoted and administered on the lines that the noble Lord’s amendment suggests, we need to look closely at what is happening in that regard.

Having said that, I think there are difficulties in the noble Lord’s amendment as an amendment. The noble Lord, Lord Jenkins, and other noble Lords, including the noble Lord, Lord Elystan-Morgan, have pointed out the—

[Lord Jenkin of Roding]

The noble Lord, Lord Beecham, and I have known each other for a great many years, but perhaps I may establish at the outset of this Committee stage that there is no “s” on the end of my name. I hope that he will forgive my interruption.

[Lord Beecham]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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I am sure the Committee will understand that this decision has come about as a result of concerns that have been raised in the Commons and in discussion here at Second Reading. I am sure the Committee will welcome the Government’s decision in these matters.

[Lord Beecham]

My Lords, I thank the noble Baroness for her reply in general but, more particularly, for the last part of it. I think there was widespread support for the denouement to the protracted debate over many months about these two—if the noble Baroness will forgive me for saying it—rather absurd propositions, of which, I think in all fairness, Ministers were not necessarily the authors. There has been a remarkable story around whether the proposal for shadow mayors was on or off, with various statements being made by Ministers and then countermanded, but the final outcome will be warmly received. It augurs well, I trust, for the way in which debate on this Bill will be taken forward. We look forward to even more changes in the direction of good sense and local democracy.

[Lord Jenkin of Roding]

Without wishing to prolong the debate, I should like to endorse what the noble Lord, Lord Beecham, has said and to thank my noble friend for the swift acceptance of two of the substantial amendments to which I have put my name on the Marshalled List.

When I had the opportunity to discuss matters very briefly with the Minister’s right honourable friend the Secretary of State, he said that he thought that we were going to be able to reach accommodation on some of the points that had been made at Second Reading. My noble friend has done exactly that, and I express my gratitude.

[Lord Greaves]

My Lords, the Minister’s last two announcements are extremely welcome and I am quite prepared to trade my amendment for them. It is good news all round. As the noble Lord, Lord Jenkin, has just said, it bodes well for future debate.

It is only in the House of Lords that the noble Lord, Lord Beecham, or anyone else, would raise in evidence events that took place more than 100 years ago. While the short-term effects of Joe Chamberlain’s and the other Liberal Unionists’ defection was extremely damaging to the Liberal Party, the slightly longer-term result of it was that the Liberals gained their greatest ever victory in the 1906 election, in which Joe Chamberlain and his allies in the Conservative Party were roundly trounced. If we are looking for historical precedents, there is one.

[Lord Beecham]

Would the noble Lord care to recall what happened at the subsequent general elections?

[Lord Greaves]

The Liberal Government were returned to power with a smaller majority in both elections of 1910. That is a historical fact. Unfortunately, the First World War then intervened and caused all sorts of bother.

I thank everyone who has taken part in this useful debate, which has set the tone for a lot of the detailed discussion to come. The noble Lord, Lord Jenkin, quite rightly said that the details in the Bill will determine what happens if and when it is passed. The underlying values—or, as he called them, principles—of the Bill and the conflicting principles that many of us see within it will be a continuing theme as we debate the detail, and it is right that we should continue to relate the one to the other.

The noble Lord, Lord Beecham, hit the nail on the head and homed in on the most fundamental part of the amendment: the importance—I do not use the word “primacy”— within any local democratic system of democratically elected local government. We can argue about the structures and whether they are good or bad—about their size and the way they work and so on—but unless there is a presumption that decisions locally will be taken by those who are elected by and accountable to the people in general, the whole system risks becoming anarchic. As we go through the Bill, a recurring theme will be the extent to which what is proposed in it strengthens or undermines local government. That will be absolutely vital.

The noble Baroness, Lady Farrington, raised a fundamental question about what you do when people in a neighbourhood or a community, which are two different concepts—a neighbourhood is a place where people live and a community is the way in which people interact with each other, although they are sometimes, but not always, the same—rise up in a way that you might think is populist, unreasonable or hysterical but which is, nevertheless, in the noble Baroness’s words, ferocious. Those of us who have been around in local government and local campaigning for a long time have all known this and have all seen it. It is very difficult. Without the buttress of democratically elected local government there is no way in which such forces can be resisted unless there is an imposition by bureaucratic bodies from above, which, philosophically and fundamentally, is not the way to do it.

I remember a proposal a few years ago to open a residential home for people suffering from schizophrenia in a former Quaker meeting house. The reaction of the people living in a wide area around it was ferocious. It was a difficult situation but the councillors across the board stood firm, behaved in a reasonable way and gave permission for it. That home is still in operation and no one has a word to say against it. Councillors have to take decisions on the basis of reason and not on the basis of public reaction on every occasion.

This is very difficult just before an election. When we run a council we have a fundamental principle that in the three or four months before an election we never introduce a new traffic calming scheme. This is because everyone is in favour of a traffic calming scheme until it is put in and then everyone finds things wrong with it. However, you sort out the problems and a few months later everything is all right. Another thing you never do is change the arrangements for waste collection and recycling. You do all these things in the summer and well before elections come along. You sort out the problems in a sensible way and everyone then is, hopefully, fairly happy.

There has to be a certain amount of such manipulation, otherwise you cannot do things—at least, you cannot do things and get re-elected. Nevertheless, democratic government is fundamental to it all. We on the Liberal Democrat Benches believe that this is an ideological matter. That is not to say that it is not also a practical matter. The practicalities set out in the Bill relate to how you carry out matters in line with your underlying ideological principles. If it is not ideological, I do not know why it is called “Localism”. “Isms” tend to be ideological. I think “Localism” is a silly name for the Bill. Nevertheless it is the name it has been given. I was musing as to whether we would have a “Conservatism” Bill, or a “Liberalism” Bill, or perhaps a “Conservatism-Liberalism” Bill on the lines of Marxism-Leninism, which I never quite understood. I thought then that perhaps the Finance Bill each year should be called the Optimism Bill.

On that note, I thank all noble Lords for taking part in the debate and look forward to debating some of the more practical things that we will come on to. I beg leave to withdraw the amendment.

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[Lord Greaves]

My Lords, this group might take us a little less time. In moving Amendment 2, I shall speak to Amendment 3, which is in the same group.

These amendments probe in what circumstances a local authority would use the general power to do anything outside the United Kingdom. I do not imagine that local authorities will be encouraged to carry out military adventures in new parts of the Middle East, or indeed anywhere else. What are those things outside the United Kingdom that local authorities cannot do at the moment and which they might want to do under the new general power?

Secondly, I want to probe in what circumstances an authority might want to do anything other than for the benefit of its own area or residents. Surely, local authorities are elected to serve and represent the interests of their own residents and to carry out services in their area. There are already means by which local authorities can do work for other local authorities, for example, and can carry out activities outside their area, but it is invariably with the consent of the local authorities in the areas outside their own area. What is it that the Government think that local authorities might do that they cannot do at the moment outside their area and not for the benefit of their residents? I do not know why residents would want to elect a local authority that spent a lot of its time and energies doing things for other people outside its own area. These are two basic questions. I beg to move.

[Lord Beecham]

Perhaps in the absence of any other contribution, I might make a suggestion to the noble Lord. I do not know whether my suggestion will appeal to the Minister, but there will be occasions when a local authority wants to do something, particularly overseas, which might be deemed to be outside its current powers. For example, it might want to do something in collaboration with authorities in the developing world; there might be relationships with a country or locality where help might be given with infrastructure or education. It might be that in a community or urban area there were people whose origins lay abroad, perhaps in the subcontinent or elsewhere, where there was some sort of disaster, and a local authority might wish to make a financial or other contribution.

I am frankly rather surprised that the noble Lord should take such a narrow view of these issues. We play a reasonably prominent role in the affairs of local government internationally—something that I have always personally eschewed, having neither the time nor inclination to travel to or from Strasbourg, Brussels or places further afield. But there are many in local government who do and who make a significant contribution to international co-operation, so I would have thought it was fairly obvious that it would be desirable to widen the possibilities here. Obviously, local councils in exercising any such powers remain answerable to local communities, and sometimes those communities would be among the first to press for action to be taken by the local authority or local government bodies as a whole. I myself, when I was involved in the Local Government Association, was keen to promote capacity-building in the Israeli-Arab municipal sector, for example. The association, through international local government bodies, has helped out in other places where there have been conflicts—Kosovo is a place in point. The noble Lord could be a little more ambitious in what he thinks local government might be able to do in cases that strike individual local authorities or groups of local authorities as ones where the expertise of local government and local communities in the UK might make a contribution. I hope that he will not press his amendment.

[Lord Greaves]

Does the noble Lord agree that everything that he has mentioned has taken place and is taking place, and therefore can be done under existing powers? What new projects or activities does he think ought to take place that would require the new general power of competence in these areas?

[Lord Beecham]

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

[Baroness Hanham]

My Lords, I am tempted to thank the noble Lord on the opposition Benches for answering the question for me. The noble Lord, Lord Beecham, has put his finger absolutely on the button: there are many areas where local government can help overseas. In fact, going back to my own days in local government, I remember well that we gave enormous help to the setting up of local government in a place called Mbale in Uganda. We had exchanges between officers on my council and officers from Mbale. We taught them how to start and set up a rates system and a community charge system. So there is that, as well as the help abroad for people in emergencies. There are all sorts of areas where this power is necessary.

My friend opposite has done well to point out that there are times when this would be valuable, but also that what we are talking about is a general power of competence and, whether or not it was available under the well-being power, it is reiterated under this power to ensure that there is no mistake about it.

Amendment 2 attempts to limit unnecessarily the extent of the general power of competence by restricting the exercise of power to the United Kingdom only. Amendment 3 also attempts to limit unnecessarily the extent of the general power, by requiring that the authority be able to demonstrate that activity has directly benefited the authority, its area or persons resident. If you are benefiting someone or a country abroad with your help, I hope you would also be affecting your residents, who would be glad that you were doing so.

The effect of the amendments is to attempt to turn this into a well-being power. We need to give local authorities confidence in the powers available to them. Rather than grant a power to do specified things, the new power is drafted on the basis that local authorities will be able to do anything that an individual with full capacity can do. That is the general power of competence, and that is the way that it is drafted. We believe that this will give local authorities freedom to act in the interest of their local communities and to generate efficiencies and savings, the benefits of which will be passed on to those communities. I would not be willing to accept the amendment and I hope that the noble Lord will be happy to withdraw it.

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[Baroness Hanham]

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

[Lord Beecham]

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

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

[Lord Wigley]

In fact, the Welsh Local Government Association is very exercised about having clarity in this Bill. There is a lack of clarity and it would welcome some clarity on the points that have been raised.

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[Lord Beecham]

My Lords, I endorse the amendments and the questions that the noble Lord, Lord Tope, has asked because it is far from clear what the import of these provisions will be, particularly in relation to charging. Do the costs of provision allow for just the basic costs or would they include the cost of replacement, renewal, training and reinvestment? The definition in the Bill seems very narrow. Perhaps the Minister would agree to take it away and look at it. I do not think that there is a lot between us on this. We on this side are not seeking, and nor do I think is the noble Lord, to encourage a position where the provision of a service is translated into a commercial enterprise, but the boundaries are perhaps less obvious than they might first appear. I should have thought it would be possible to reach an accommodation that gives sufficient tolerance to allow a surplus to be reinvested into the service as opposed to something that might be distributed elsewhere.

[Baroness Hamwee]

My Lords, “the costs of provision”, the term used in Clause 3(3), could mean only the direct costs of provision or it might mean the indirect, back office costs and so on. Can the Minister help me on the exact import of the term? My second question concerns how this provision fits with Clause 4, which deals with doing things for a commercial purpose. Is there some sort of provision that falls short of doing things for a commercial purpose but which is outlawed by Clause 3(3)?

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[Lord Tope]

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

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

[Lord Beecham]

Perhaps the noble Lord could offer the Minister the example of a meals on wheels service that an authority might provide instead of, say, leisure services.

[Lord Tope]

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

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Moved by

[Lord Beecham]

12: Clause 5, page 4, line 10, leave out subsection (3)

[Lord Beecham]

My Lords, this is an important clause. It is almost a case of the Secretary of State giveth and the Secretary of State may take away, and there are some significant concerns about it.

The clause begins with what I think is intended to be a helpful provision, Clause 5(1), where if the Secretary of State thinks that a statutory provision may prevent or restrict an authority exercising the general power, he may by order amend, repeal, revoke or disapply it. Following debate in another place, some limitations on the exercise of that power under subsection (1) are set out in Clause 6. However, there remains real concern about much of the legislation that might be disapplied. That is certainly one key provision to which I will return.

There are problems also in other parts of the clause. Subsection (2) deals with the position where if the Secretary of State “thinks”—it is odd that that word is used in legislation, but so be it—that the general power is overlapped by another power then he may by order amend, repeal, revoke or disapply any statutory provision, whenever passed or made. In respect of that provision, the Delegated Powers Committee has expressed significant reservations. I refer to paragraph 17 of its report on this part of the Bill, which states:

“Where this power is exercised in the same instrument as the power in clause 5(1), the procedures applicable to orders under clause 5(1) apply. But where the power is exercised separately, the order is, despite being the exercise of a Henry VIII power, subject only to negative procedure”.

The committee was not persuaded by the memorandum that the case had been made for a departure from the normal presumption that the power should be subject to affirmative procedure. It did not think that it should be displaced and recommended that,

“orders under clause 5(2) which amend Acts should, where not combined with orders under clause 5(1), be subject to affirmative procedure”.

I would be grateful if the Minister could indicate whether the Government are prepared to accept that recommendation, or, if a conclusion on that has not been reached, whether she would in due course provide a view.

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[Lord Beecham]

My Lords, I am sorry that I disappoint the noble Lord, Lord Newton, by my uncharacteristically diffident approach to this legislation. I shall try to repair that omission. I was trying to give the Government some credit for responding to concerns raised in another place about Clause 5(1) in particular. Incidentally, the long list of statutory provisions in Amendment 14 was derived from those tabled in another place. The noble Lord is right to say that there are many more statutory provisions that could be disapplied or to which the legislation might extend. I think that the number is 1,296, but there is a formidable list here.

However, that is not the only concern. In particular, Clause 5(3) does not relate to dispensing powers; it is a simple provision, which says:

“The Secretary of State may 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”.

In other words, the Secretary of State takes power to disapply the general power of competence on whatever topic and in whatever form he fancies. That is a very different proposition from one that seeks to allow a disapplying power to permit and facilitate the exercise of the general power of competence and it is completely unsatisfactory. It is a remarkable proposition: the Secretary of State seeks to give a power to do anything unless he objects. It is the political equivalent of Henry Ford’s “You can have any colour as long as it’s black”. Of course, Henry Ford inspired Aldous Huxley’s Brave New World—Fordism is the theme that runs through the book. The title of Brave New World, of course, is not inappropriately derived from “The Tempest”. Noble Lords will recall Caliban’s wandering gaze:

“O brave new world, That has such people in't!”.

Well, it is not a brave new world that has such propositions in it. I hope, again, that the Government will look not only at Clause 5(1) and the matters deriving from that, but, in particular, at the sweeping powers under Clause 5(3) which can apply under subsection (5) to,

“all local authorities … particular local authorities, or … particular descriptions of local authority”.

I suppose that means particular classes of local authority.

In replying and endeavouring to be helpful, as of course she does, the noble Baroness indicates that the Government will expect to use these discretionary powers only to deal with particular actions of local authorities which cannot at this point be identified. She referred to “novel financial transactions”. Well, I suppose that a local authority could engage in a novel financial transaction now. It would have to ensure that it was legal, and if it was not legal it could be challenged. It is not at all appropriate to have as sweeping a power as this against unknown and unknowable possible future activities of local authorities. If the Government are particularly concerned about financial transactions, why do they not, for the avoidance of doubt, make that a category in the Bill? But they do not, because the power is simply unlimited.

There are also some issues around the drafting. I appreciate that there are difficulties with the drafting, but when Clause 6 says,

“the provision does not remove any necessary protection”,

what does that mean? What is a “necessary protection”? It is presumably necessary, or not, in the eyes of the Secretary of State. All of that confirms the undesirability of the procedure, about which the noble Lords, Lord Jenkin and Lord Newton, have been rightly exercised, being of a negative kind as opposed to an affirmative resolution.

Again, I hope that the Government will look at this matter. The noble Lord, Lord Newton, rightly referred to the Government’s wise second thoughts on the Public Bodies Bill, and there are certain parallels here. I hope that the Government will take seriously the substantial objections, both to the process and also, in particular, to the thrust of Clause 5(3), which, as I said in moving the amendment, contradicts the whole spirit of a general power of competence that many of us applaud and would be glad to see in the Bill. If the Government want to achieve their reputation for promoting localism, they need to review and revise the procedures and principles set out in this clause. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Sustainable Local Transport

Lord Beecham Excerpts

Wednesday 19th January 2011 Lords Chamber

[Earl Attlee]

My Lords, I did not manage to write down the noble Lord’s last point, so I shall answer it first. This is not a blueprint for bureaucracy; it is a blueprint for doing things more efficiently. The noble Lord initially said that it would not be productive. However, it is for local authorities to deliver the scheme and it is for the department to assess the scheme and fund it. The noble Lord talked about this being the usual stuff that is served up. I am a little disappointed about that but I say to him that every scheme has to meet two criteria: it has to provide for both growth and carbon reduction. A scheme may provide for carbon reduction indirectly but it has to show carbon reduction as well as growth. As for the noble Lord’s point about NATA and the detailed assessment, he has been on at this Government and the previous Government for some time about this but I assure him that my department is working on it.

[Lord Beecham]

My Lords, will the Minister look again at the passage in the Statement which says that the local sustainable transport fund,

“forms part of a wider picture of more streamlined and simplified funding”?

Does he not agree that it would be more honest to include the word “reduced” in that sentence? Although I welcome extending the decentralisation of power to local transport, which the Statement also mentions, does the noble Lord not agree that there is a regional dimension to transport and transport infrastructure which the abolition of the regional development agencies will make more difficult to realise than otherwise? Will he indicate whether the Government have any intention of making the Highways Agency more accountable, and, in particular, will he indicate how, under the system of very localised transport, authorities in the north-east will be able to put pressure on the Government or the Highways Agency for the dualling of the A1 north of Newcastle, which appears to have been shelved for a very long period? Finally, does the noble Earl recall that his very distinguished grandfather, the first Earl, in an interview in later life identified transport as one of the major priorities for the future? Does he agree that this White Paper does not bring that future very much nearer?

[Lord Greaves]

My Lords—

Severe Winter Weather

Lord Beecham Excerpts

Monday 20th December 2010 Lords Chamber

[Earl Attlee]

My Lords, I am grateful for my noble friend’s comments. Ministers were not happy about the situation on communicating the transport opportunities to people two weeks ago. It is inconceivable that these problems will not be considered in the new year.

[Lord Beecham]

My Lords, I, too, thank the Minister for repeating the Statement. In addition to talking to BAA, will Ministers also talk to the airline operators about the need for them to inform their customers and to ensure, together with BAA and other airport operators, that every attention is paid to the needs of people who may, unfortunately, be stranded.

Secondly, will the Government look again at stopping the Warm Front programme applications? While it is certainly true, as the Statement made clear, that fuel payments have been made, the programme of insulating homes will be slowed. It is obviously too late, in any event, to make a difference this winter, but given what has happened in the past couple of years, does the Minister agree that it might be necessary to look again at that decision in order that there should not be an hiatus in the insulation programme?

Thirdly, on the steps taken by the health service and local authorities, does the Minister agree that it might be desirable to look at whether extra resources might be needed, in certain parts of the country, in order for the health service to cope with the additional demands and pressures that might arise and, indeed, for something like the Bellwin rules—which, I understand, are to be abolished under the new dispensation—to be looked at in relation to local authorities?

Finally, on a more domestic concern, will the Minister look at conditions within this House and consider whether it is desirable to turn the heating off on a Friday, leaving this place to be extremely cold for the staff and your Lordships on a Monday?

[Earl Attlee]

My Lords, I think I mentioned in my Statement—I apologise if the Statement does not say it—that my right honourable friend the Secretary of State has had discussions with Willie Walsh at BA and I expect that Ministers or senior officials will have talked to leaders of other airlines to work out a way forward in order to minimise the effect on travelling passengers.

The noble Lord talked about the Warm Front scheme. It is slightly outside the scope of the Statement, but I appreciate the current difficulties of houses being very cold. We are experiencing it a little in your Lordships' House. It is a little colder than normal. Fortunately, I am not responsible for the conditions inside your Lordships’ House, but I always take the precaution of putting on extra clothes on a Monday morning.

Railways: Public Procurement

Lord Beecham Excerpts

Tuesday 30th November 2010 Grand Committee

[Lord Beecham]

My Lords, like other speakers, I congratulate the noble Baroness, Lady Greengross, on her ingenuity in managing to hang a debate about the wider issues of public procurement on the rather slender hook of railway privatisation. I am glad that she intends to look at further areas of service delivery where this might apply, because although some lessons, particularly in risk, might arise from the experience of rail privatisation, it does not seem a particularly good analogy for most of the services in which government or local government are engaged.

However, as a frequent user of the east coast express line, I am somewhat nostalgic for the days of British Rail, but that is one area that the report did not touch on. Clearly, the issue of risk is widely recognised in that report and by previous speakers as being somewhat unreal when it comes to the expectation of benefit to be derived from privatisation or outsourcing, given the importance of the services in question.

There is one area which Governments of any political colour might be tempted to advance as an argument for privatisation. First, you have to raise capital, which may be more difficult, and secondly, you have to keep it off the public sector borrowing requirement. That seems to be the only compelling justification for the private finance initiative. Even then, contracts were entered into that were far too long. Clearly, if things go wrong, as they have done, the Government have to step in. It is always open for a contractor to liquidate rather than continue and to be made to pay penalties.

The noble Baroness referred to the possibility of bonds and penalties, which is superficially attractive, but that would be priced into the contract in the first instance and, in any event, it might not suffice in the end to deal with problems that arise. It struck me that a more useful transport comparison might have been the bus industry, which was largely municipally owned—it still is, very successfully, in London. The competition that ensued—sometimes there were too many buses chasing each other down the high street—and the standards of service that followed might have made a better comparison. It is important to recognise that there is virtue in having a mixed economy of provision in which public and private providers, and those from the voluntary sector, all have a part to play.

That is valuable, and I would not want us to move in the direction that Nicholas Ridley once advocated of councils meeting once a year simply to let the contracts. Councils and other bodies should be both commissioners and providers of services. I say that in the light of experience in residential care in the 1980s and 1990s, which was largely privatised as a result of the then Government’s approach to paying for it. Previously, it was organised largely by local councils. Ultimately, most local authorities withdrew from the field—eventually, unfortunately, so did many of those who succeeded in obtaining contracts—and we were left with a very unsatisfactory situation.

The public sector needs to be involved as one of the providers. There also need to be safeguards. Clearly, there has to be a level playing field on terms and conditions for those competing in this arena. We saw in the National Health Service how outsourcing led to a significant reduction in the levels of remuneration of care staff, and we have seen the same thing happening to some degree in the outsourcing of domiciliary services, even when they are run by third-sector organisations. We clearly need accountability; I endorse what the noble Baroness, Lady Howe, said about that. Some of that can take place in the realm of local authority scrutiny, which can be quite effective provided that it brings in the users of services as well as others. In all this, we have to bear in mind the need particularly to encourage the role of the third-sector providers, which means looking at the size of contracts. It is possible to achieve economies of scale by letting large contracts all the time with which smaller organisations cannot compete, so we need to ensure that there are smaller or local-scale contracts, which will enhance accountability and allow for the innovation that the third sector often brings.

Have the Government given thought to the requirements of the EU on tendering? There is an assumption that you can take a workforce and turn it into a mutual and it will get a contract, but I understand that that may not be the case. Everyone has to compete in the same way as any other contractor, and there is no automatic assumption that that will happen.

Finally, I turn to one developing area that will require very sensitive handling. We are now moving into an area in which commissioning will be not only for a service and by a large commissioning body, such as GP commissioners or a local authority, but by individuals using personal budgets. That is to be welcomed, but it has to be managed; people will have to be helped to navigate their way through a system, choosing the right suppliers of a service and the right kind of service. The market has to be managed, and there has to be considerable quality assurance. A new dimension is opening up, and I hope the noble Baroness will look at that as well as the current practice in the areas that she has identified. I congratulate her again on her ingenuity, which struck me as being worthy of a Wall Street banker or derivatives trader, but in this case with much more benign results.

Transport: Investment

Lord Beecham Excerpts

Tuesday 26th October 2010 Lords Chamber

[Earl Attlee]

My Lords, the congestion charge is not my responsibility but the responsibility of the Mayor of London.

On the difficulty of local maintenance, I shall write to the noble Lord. On the Highways Agency, it can do a number of things to better manage the strategic road network. It can build on the investment of the previous Government in better systems, to make sure that maintenance takes place at the right point—not too early and not too late.

As for the noble Lord’s question about local authority congestion charging, I should say that we have no intention of introducing a national scheme.

The road schemes to be cancelled because there is no foreseeable future for them are: the A1 Leeming to Barton scheme; the A19 Seaton Burn interchange; the A19 Moor Farm scheme; the A21 Kippings Cross scheme; the A21 Flimwell to Robertsbridge scheme; the A21 Baldslow scheme and the A47 Blofield to North Burlingham scheme.

[Lord Beecham]

My Lords, before the general election, visiting Conservative spokesmen who came to the north-east spoke warmly about the prospect of dualling the A1 north of Newcastle. Will he confirm that not only is there now no prospect of that happening for the foreseeable future but even smaller improvements to that road are not likely to take place as far ahead as one can see? Will he also bear in mind, when he talks about local authorities undertaking capital works, that the capital programme of local authorities is to be cut by 45 per cent?

[Earl Attlee]

My Lords, there is a slight glimmer of hope for the A1 north of Newcastle. We are considering whether it should be part of the strategic road network. However, this does not mean that it will be dualled any time soon.