Localism Bill

Lord Tope Excerpts

Tuesday 5th July 2011 Lords Chamber

[Lord McKenzie of Luton]

My Lords, first, I wish to speak to the amendments spoken to by the noble Lord, Lord Greaves, with which we sympathise. It is not just a case of semantics and of substituting one form of words for another. For the reason that he has outlined, we agree with him that if “excessive” is used in the legislation it will inevitably end up in the question that is put to the voters in a referendum, as it would be the technical term. We are denying local authorities the right to campaign for the council tax increase that they want. If we want to approach this matter in a neutral way, the very least we can do is to remove prejudicial legislation, as the noble Lord termed it.

The Minister may well say that “excessive” is not a new term and that it is embodied in the current capping legislation. However, there is a difference between that position and what may happen in the future because the current arrangements for capping will not be put to a popular vote. Therefore, that term is effectively an internal term rather than one that would inevitably feature in the referendum question on some basis or other. For that reason, I believe that we need to recast the term that is in the legislation.

I agree with the noble Lord, Lord Jenkin. It is a central point of our concern with this legislation that it is stuffed with detailed powers and that the Secretary of State has to draw back from the nominal rights that it is seeking to give to local authorities. I doubt whether the gap between finishing Committee in July—if we do—and Report in September is long enough to unpick some of the stuff that has come from our discussions today, but at least there is perhaps a longer gap than usual. Our attitude to the amendments of the noble Lord, Lord Jenkin, depends on precisely where the Government are on this. When last Thursday we had our first canter around the issue of capping powers, it was said that all Governments of all persuasions had held to themselves a reserve power. If in fact it is the Government’s position that they are eschewing that power, we do not feel obligated to hold to the position that I think I outlined—that it is difficult for us to deny the current Government those powers if we took them in past years. If that is not one of the criteria of the Government, that point falls away. When he responds, perhaps the Minister can tell us whether the Government see the arrangements currently included in the Bill as capping powers, whether they believe that they should have the right to hold those powers, or whether they are, by one formulation or other, happy to let local electors decide on what the appropriate level of council tax should be. If his response is, “Well, we think there should be reserve capping powers and this is what the Bill is about”, that is one thing, but if the argument is that the Bill is about making sure that electors are the final arbiters in this, that helps us in our position on the matter.

I say to the noble Lord, Lord Jenkin, that there is a question about his formulation. Under the Government’s proposition, a level of council tax, if deemed excessive, requires the authority to produce a substitute calculation. As I understand it, a substitute calculation is one that is not excessive. I suppose that most authorities in this position would compute a substitute council tax that was just a smidgen short of what the excessive level would be. I am not quite sure, on the noble Lord’s formulation, what that substitute calculation would be and what would happen in circumstances where there was a referendum, 5 per cent of the electors called for it, and they did not support the level of council tax that was proposed. What are the consequences of that? If the noble Lord could help us with that point, it would be appreciated. It is clear under the Government’s propositions what the consequences would be, but I am not quite sure what the consequences would be under the noble Lord’s formulation.

I think that this has been a very helpful debate. It is incumbent on the Minister to say whether the Government see the powers as capping powers and believe that they need them, or whether that is not their position and this is basically about letting electors decide what the appropriate or inappropriate level of council tax would be.

[Lord Tope]

My Lords, I suppose I can rise to speak on behalf of the only party in this House that is unencumbered by a history of support for capping, but I will try to resist too much temptation there. My name is obviously with my noble friend Lord Greaves on his amendments. I think he is right and I hope that the Government will consider very carefully that fairly simple change to wording which, as others have said, is actually very important. If these provisions are to be in Bill—like my noble friend Lord Greaves, I would rather that they were not—it is important that we have a neutral wording and not a prejudicial wording, which “excessive” must be, especially if that wording is likely to be used either as part of a referendum question or at least in support of any such referendum.

My particular reason for wanting to say a few words now is to support the noble Lord, Lord Jenkin, both in his general and particular plea. The general plea relates to much less regulation and dictation from the Government, a message repeated throughout the Bill. It is salutary to remember that when Ministers first announced the Bill, it was greeted with a pretty widespread welcome right across local government. The aim and intention as enunciated by Ministers was, broadly speaking, welcomed. We knew that there would be some things in here that we would be less happy about, but we thought that most things we would be fairly happy about. Then we came to see the detail of the Bill and the extent to which, as others have said, if it is localism at all, it is localism top-down. It is also prescribed by ministerial regulation and it is potentially constrained by Secretary of State powers. I join the noble Lord, Lord Jenkin, in urging Ministers, during what will be a longer than usual gap between Committee and Report, to take courage and look seriously at whether we need to be so risk averse that we hedge everything with regulations, Secretary of State powers, and so on. I said at Second Reading that if we mean localism, we have to trust local government. Some may occasionally get it wrong, but is that a reason to legislate for the vast majority that are to be trusted and should be trusted?

I turn now to the particular of this, which is about council tax capping. I do not have to be quite as measured as the noble Lord, Lord McKenzie. I do not have to carry that history and I understand that. It is council tax capping, as others have said. In reality, it is probably the most effective capping that a Government have ever had, because I suspect that very few, if any, local authorities will take the risk of setting what is prescribed as an excessive tax. It will be a huge risk: not just the risk of whether they can or cannot win a referendum but the cost and administrative upheaval of having to rebill later.

That seems to me to fly in the face of a fairly basic principle of localism. I have always believed that it was a fundamental democratic principle that local councillors are elected—personally, I wish that they were elected under a fairer system, but, nevertheless, they are elected —to determine the needs of their local community and to balance those needs with the level of tax that has to be raised to meet them. That is a tricky balance. Then they are accountable for their decisions to the people who elect them, the local people. We come back to the fact that if there is to be a referendum on council tax levels, it should be the local people who determine the need for a referendum, not the Secretary of State. To me, that is what localism is about, and that is why I support both the general statements of the noble Lord, Lord Jenkin, and his particular in the amendment.

[Earl Attlee]

My Lords, this is a large group. I shall speak first to Amendments 129LZZZA, 129LZZG, 129LZZH, 129LZZJ, 129LZAA, 129LZAB, 129LZC, 129LZE, 129LZF, 129LABZA, 129LABZB and 129LBA.

These amendments from my noble friend Lord Jenkin would require a referendum to be held only in response to a local petition signed by local electors. I understand what my noble friend seeks to achieve. That may indeed be purer localism than the Government's approach, but there would be grave practical difficulties in going down that road. My noble friend seeks to allow the timing to be determined locally, but time will be very short for such a petition to be organised, as council tax must be set in early March. If democratic control is to be effective, and not just cause financial confusion, the electorate's endorsement or otherwise of the authority's decision should follow very soon after. Given the binding nature of the referendum, it would be necessary to establish that each signatory of the petition was a local government elector in the area. That would be a difficult, time-consuming, contentious and potentially expensive precursor to the main event, the referendum itself.

The amendments leave in place the notion of substitute calculations, but do not resolve with any certainty the basis on which those calculations should be made. In effect, the authority will be saying, “If you do not like this level of council tax, we will adopt that one”. Who is to say that the electorate will not feel the substitute to be excessive as well?