Earl Attlee
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(13 years ago)
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Lord Kennedy of Southwark
As far as it goes, I support the amendment moved by the noble Baroness, Lady Gardner of Parkes. Pedicabs, and the way in which they operate, can be a nuisance, and it is only by licensing them that we can get some control over them. It would therefore be good if local authorities could establish local by-laws for the licensing of pedicabs in their area. If people are going to travel in them, we should make sure that they are roadworthy, that there is proper insurance cover for passengers, that there are rules about where they can stand when waiting for business, that the people peddling them comply with traffic legislation and that, where breaches occur, there is provision to get them off the road.
I accept that at present they seem to operate only in central London, so Westminster council faces the biggest problem. However, like my noble friend Lord Berkeley, I would have preferred to see London-wide licensing of pedicabs. They will no doubt move elsewhere, with Camden, Islington, Kensington and Chelsea, Southwark and Lambeth all likely to have them in parts of their boroughs. By-laws that differ from borough to borough just risk confusion and it would be better to have a London-wide option. However, as I said, the Opposition support the thrust of the amendment and I hope that the Government can indicate what they will do to deal with this problem.
Earl Attlee
My Lords, I can understand why my noble friend Lady Gardner of Parkes has moved this amendment. She has explained the problem and other noble Lords have made sensible and balanced contributions. However, Transport for London and ultimately the mayor are responsible for pedicabs in London. The Government take the view that issues surrounding pedicabs in London should be dealt with at a local level, which this amendment would provide for. After all, this issue only really affects London. However, the mayor, Transport for London and the London local authorities are already taking the initiative to address the matter with straightforward measures that avoid the trap of overregulation. Noble Lords will be aware that Westminster City Council is currently working up a voluntary—
Lord Berkeley
I am sorry to interrupt the Minister but I believe that they operate in Oxford, and there is a similar problem there. But I do not know what the solution is.
Earl Attlee
My Lords, I skilfully avoided saying that this problem was unique to London, because I thought this issue might arise, and I might get challenged by someone like the noble Lord.
Westminster City Council is currently working up a voluntary registration scheme for pedicabs, with registration being incentivised by providing parking bays and pedicab ranks for members. Those operators and riders subscribing to the scheme will sign up to a code of practice, and the noble Lord, Lord Berkeley, has already alluded to these developments. This registration scheme would then tie in with the provisions relating to the enforcement of road traffic offences in relation to pedicabs, which are included in the London Local Authorities and Transport for London (No. 2) Bill, currently before Parliament. Effective implementation of the provisions in the Bill relies on a system of licensing or registration being in place. The relevant clause could not come into force until a registration scheme for owners and riders has been approved by the Mayor of London.
Baroness Gardner of Parkes
I thank the noble Earl and the noble Lords who have contributed to the debate. It has been much wider and more interesting than I had expected. However it is an issue, and I would like to respond on a couple of points.
The noble Lord, Lord Berkeley said that it should apply to the whole of London. I draw attention to the fact that traffic varies tremendously in London. For example, on the subject of disabled parking, the blue badge scheme does not apply in any of the three central London boroughs. You have to have a blue badge and a local badge as well to take full advantage of disabled parking. If you have a blue badge, there are blue-badge places you can use, but you cannot use any other parking places. Each of the three central London boroughs said it would make it impossible for them, because they would be flooded by people coming from outside the boroughs. So this is a long-standing arrangement just for central London.
I do not agree with the noble Lord that you need to have licensing for pedicabs out in Havering, for example, which I represented at one time. I do not believe there are any pedicabs running around Havering. I think they are a fun thing in central London. However my concern is not the fun element, which I agree with my noble friend Lord Jenkin, is absolutely wonderful. In Bangkok it was great fun to travel around in them. However it is not a fun element if you are at risk of being injured due to their ignoring road behaviour. That is what worries me.
This is an issue that needs to be tackled. I accept that it might be better tackled somewhere else and in some other way. Perhaps LRT could deal with it selectively, but it has to be done selectively, because many boroughs will have no problem at all. If—as the noble Lord, Lord Berkeley has said—Oxford already has pedicabs then there are other places which need this issue to be addressed now. But again, the areas will need to be limited.
I have listened to the debate and I think it is valuable to have it on record for when this issue comes up again as it surely will in some other capacity. Meanwhile I beg leave to withdraw the amendment.
Earl Attlee
“(1) A Minister of the Crown may, in accordance with the provisions of this Part, require public authorities to make payments of amounts determined by a Minister of the Crown in respect of an EU financial sanction to which this Part applies.
(2) A requirement to make a payment under this Part—
(a) may only be imposed on a public authority if— (i) the authority has been designated under section (Designation of public authorities); and(ii) the EU financial sanction concerned is one to which the designation applies; and(b) must be imposed by a notice given to the authority under section 33 (referred to in this Part as a final notice).”
Earl Attlee
My Lords, I shall speak to a necessarily long list of amendments, starting with Amendment 195ZAA. The amendments deal with EU fines. I thank noble Lords for the constructive suggestions made during and since Committee. As a direct result, I am able to move some substantial amendments and therefore intend to take a little time explaining them.
To start, it would be helpful to reaffirm the basic principles here: this is about encouraging authorities not to incur fines for the UK in the first place. In the unprecedented circumstance that the UK is fined in relation to an infraction, it is about achieving compliance quickly, using a process which is fair, proportionate, reasonable and holds no surprises. We do not want to pay escalating fines to Europe. We have never incurred fines regarding an infraction and do not see these provisions as a prelude to being more relaxed about infraction proceedings or fines.
All this is reflected in the policy statement of the Local Government Group, which has been placed in the House Library and updates the one previously put forward by the Greater London Authority. I strongly welcome the statement, which is very helpful. I thank both the Local Government Group and the Greater London Authority for working with us so closely on this, and for their help and support. This paper will form the basis of a government policy statement on which we will consult more fully in due course.
The noble Lords, Lord Tope and Lord McKenzie of Luton, each provided convincing proposals on designation in Committee. I have combined these and taken them further so that the Minister would need to designate each authority by order, using the affirmative procedure and specifying the infraction case and related activities of the authority, before the Localism Bill’s provisions could be used. The activities described must take place after the order comes into force and will relate to the authority’s functions and obligations.
This means that authorities can be designated only for something which is their responsibility. Only actions or failures to act following designation would be taken into account when deciding whether to pass on a fine, and only in relation to the specific infraction case. The designation order would cease to have effect when the infraction case was closed. This responds to concerns on retrospectivity raised previously and highlighted in Committee by my noble friend Lord Newton of Braintree. It puts in place a mechanism which will give authorities an early opportunity to put things right, to solve the problem, before any fine. It also means that this House and the other place will have the ability to test the rationale for the proposed designation in debate. If this does not provide sufficient incentive, and in the unprecedented circumstance that the UK is fined for failing to comply with EU law, we will establish an independent advisory panel before seeking to recover any fines.
I am grateful to my noble friend Lady Gardner of Parkes and the noble Lord, Lord Best, for suggesting how an independent advisory panel could provide sufficient checks and balances to ensure that the Minister could not act, at the same time, as prosecutor, judge, jury and co-defendant on these matters. As I made clear in Committee, we remain committed to the principles of transparency, fairness, reasonableness and proportionality. This amendment will enhance all these qualities.
Such a panel would be formed at the point of need, with relevant legal, topical and sectoral expertise for the specific case. The Minister would consult the panel on the procedure and timetable. The panel would receive representations directly from the Minister and from the authorities involved. It would carry out fact-finding and make published recommendations to the Minister, including on the fair apportionment of culpability.
I remain strongly of the opinion that decision-making should remain with the Minister as an elected member of the Government with responsibility to make such decisions on resources. Any Minister acting against recommendations would need strong reasons for doing so should there be a subsequent judicial review.
The amendments on the process reflect the new role of an independent panel and will enable the authority better to plan its finances by covering all possible payments up front: lump-sum, accrued and ongoing periodic fines. This transparency could be a big help, allowing the authority to weigh the costs of fines against the costs of speedy compliance.
Any ongoing liability to pay towards a fine from the EU would end at the point where the authority demonstrated that it had taken all reasonable steps to comply. There is also provision for liability to be reduced—but not increased—if there is a change of circumstances.
We are extending the provisions to cover reserved matters in devolved areas. I am grateful to the noble Lords, Lord Wigley and Lord Empey, who spoke on this, with others, in Committee. I can confirm to the House that the extension of the provisions to cover reserved matters, without prejudicing the performance of any devolved functions, has the full agreement of all the devolved Administrations. On the request of the Welsh Government, we are also providing a mirror power for Welsh Ministers to pass on EU fines to responsible public authorities exercising devolved functions in Wales. This replicates the UK provisions in their entirety, including designation by order.
The rest of my amendments make changes to ensure that the clauses as a whole work together.
Finally, I should like to respond to the amendment proposed by the noble Lord, Lord Berkeley—in advance of him moving it—which would ensure that the Government could not designate any rail or inland waterway provider. I agree that we should not penalise companies for their private services and functions, but where a company is performing a public function, and only for that public function, it needs to be encouraged to comply with EU law in order to avoid significant fines being picked up by the British taxpayer. Where a private company has responsibility under statute to carry out public functions, the default position would be to use any existing regulatory framework to resolve the issue. A Minister would seek to designate a private company only if it was carrying out a public function, if it had caused or contributed to an active infraction case, and if any regulatory body had not been able effectively to incentivise compliance. This would of course be tested by this House and the other place should a Minister seek to designate in such circumstances.
I hope that this demonstrates that I have taken on board the points raised in Committee, and that these provisions are stronger and better as a result. With these amendments there is a very clear emphasis on incentivising avoidance of fines. We are radically devolving power, but that needs to go hand in hand with responsibility. Therefore, I strongly believe that these provisions will help to protect UK taxpayers. I beg to move the government amendment, and hope that the noble Lord, Lord Berkeley, will be willing to withdraw his amendments at the appropriate point after he has spoken to them.
Lord Tope
My Lords, as I think I was the first to complain about the original provisions of the Bill when we considered it in Committee, it is only right that I should now be the first to rise to congratulate the Minister on what he has achieved since we were in Committee. I said at that time, with great regret, that the first that local government knew of the Government’s intentions on EU fines was when they read it in the Bill, which was most unsatisfactory. That is not the responsibility of the noble Earl, Lord Attlee, at all. His responsibility is the leadership that he has shown since that time in retrieving this situation. None of us would have wished to start from there, but that is where we found ourselves. The noble Earl has worked tirelessly since that time to achieve a compromise that is fully and wholly accepted by the Local Government Group, the Greater London Authority and, as far as I am aware, all others involved in this. It is still their position that it would be better if this were not in the Bill at all, but that is not too surprising—most people would rather not have provisions to fine them in legislation. Given that it is the Government’s intention, for the reasons given, that this will be in the Bill when it is enacted, then—thanks to the noble Earl and, as I think he would be the first to acknowledge, thanks to his officials—we have achieved a satisfactory outcome.
The only point that I would like to add is to welcome—as I also said in Committee—the statement of policy. It is a very good intention that the Government will discuss with local government those areas of concern in upcoming proposed EU legislation that has a significant effect upon local government. That is a very welcome good intention but I want to be sure that it happens. I have no doubt whatever that, as far as the noble Earl’s department is concerned, that has always been the case. I have been for many years a member of the Local Government Association’s European and international board and its predecessor’s bodies, right back to the days of the Local Government International Bureau. For some time in the early days of the new Labour Government we had regular meetings not only with CLG but also with the FCO and the Europe Minister to discuss issues of concern. They fell into abeyance some years ago and do not happen any longer. My plea to the noble Earl, and through him to the Government, is to ensure that this very welcome statement of policy does not just remain a statement of good intent but is actually put into practice. I am sure that this sort of meaningful dialogue between representatives of local government and representatives of central Government—not just CLG but also the FCO and other departments dealing with these issues, as appropriate—can only be to mutual benefit and will, we all hope, ensure that the provisions that we will shortly pass will never need to be used.
Lord Beecham
He was none the worse for that. I do not think that his wife, who used to drive him around, would have been guilty of depositing fish and chip papers anywhere near the noble Lord’s house.
The position that we have reached is one that the Local Government Association has worked very hard with the Minister and colleagues from all sides of the House to achieve. In particular, the outcomes around the designation and the opportunity to correct a situation that perhaps led to a fine—the provision of an effective appeals system—have all been significant. I am encouraged that the statement of policy that has been produced by the Local Government Group is one that I understand the Government are minded to adopt. Perhaps when he replies the noble Earl will indicate how far their consideration of the document has gone and whether there are likely to be any issues of significance that might not accord with the proposals that have been made. I understand that effectively an agreed position has been reached around four main areas: working in partnership; that there should be no surprises; that there should be a fair and proportionate process; and that consideration should be given to the ability to pay.
One of the crucial issues first voiced in the debate to the Committee by the LGA was the lack of an opportunity for local government to be involved in the legislation from which proceedings ultimately might flow in terms of infringement of European law. It is welcome that the Government have now indicated that local government will be identified specifically as a key sector for consultation when the Government enter into negotiations on EU legislation that could ultimately lead to fines coming down to local authorities. That is an extremely important extension of the consultative role that should ensure that the legislation is right in the first place, which would be a distinct improvement on the position hitherto.
The Minister has made it clear that there will be no surprises in future. No local authority will be taken by surprise because of the designation process, which is a reasonable one in which Parliament will be involved. Equally, the process will be broadly based in terms of those involved in deciding a number of matters—for example, whether the UK Government themselves have contributed to the infraction. I take it that that will also apply to any infraction that might have been contributed to by the devolved Administrations where their activities impinged on European legislation. I assume that that is taken care of in the arrangements that the Government have come to with the devolved Administrations.
My final point is crucially important. The panel will determine these matters and the Minister will consider the authority's ability to pay a fine and provide for possible alternatives in the event that the ability to pay is not present. It is conceivable that a small district council might find it impossible to pay a significant fine in respect of some infraction of environmental legislation within its competence. It is extremely welcome that the Government have acknowledged that that is a risk and that they will not be seeking to extort from such an authority a contribution to a financial penalty that would seriously impede the activities of that local authority.
Thanks very largely to the Minister, we have reached a satisfactory position on this. It has been a good example of the way in which local government and the Government can work together and in which Ministers can listen to proceedings in your Lordships' House, take back concerns and proposals and work with them. I hope that the noble Earl will feel able, metaphorically at least, to bite one or two of his ministerial colleagues in the hope that this becomes a habit across government and not confined to the noble Earl.
Earl Attlee
My Lords, I thank my noble friend Lord Tope and other noble Lords for their kind comments. First, I plead not guilty for all the work: it was my officials what done it.
My noble friend Lord Tope talked about consultation on the EU legislation and the fact that we are committed to consulting with local authorities. I am confident that the LGG will hold our feet to the fire on this issue.
My noble friend Lord Jenkin mentioned Keeling schedules. They are useful in certain circumstances but the decision to use them is decided on a case-by-case basis.
My noble friend also asked me to give an assurance that under no circumstances could fines refer to activities, errors and omissions made before the Bill passes. I am very happy to give an absolute assurance that under no circumstances can the provisions be used retrospectively. Subsection (5)(b) of the clause proposed by Amendment 195ZAH means that only actions or inactions after designation can be taken into account. This is extremely important because it allows all those affected to concentrate on solving the problem rather than listening to the lawyers and doing nothing other than arguing. It is a very important point.
Earl Attlee
And ability to pay—a very important point. The fines can only be set at a level that will not effectively bankrupt the authority. That is one of the principles in the legislation.
Earl Attlee
Earl Attlee
“Designation of public authorities
(1) A Minister of the Crown may by order designate a public authority for the purposes of this Part.
(2) The order must—
(a) specify the public authority by name;(b) identify any EU financial sanction to which the designation applies; and (c) describe the activities of the authority which are covered by the designation.(3) The order may identify an EU financial sanction for the purposes of subsection (2)(b) by—
(a) specifying an EU financial sanction that has been imposed on the United Kingdom;(b) specifying any Article 260(2) proceedings that have been commenced and providing that the designation is to apply to any EU financial sanction that may be imposed on the United Kingdom in those proceedings;(c) specifying a judgment of the Court of Justice finding that the United Kingdom has failed to comply with an EU obligation and providing that the designation is to apply to any EU financial sanction that may be imposed on the United Kingdom for failing to comply with that judgment; or(d) specifying or describing any proceedings under Article 258 or 259 of the Treaty on the Functioning of the European Union that have been or may be commenced and providing that the designation is to apply to any EU financial sanction that may be imposed on the United Kingdom for failing to comply with a judgment of the Court of Justice given in those proceedings. (4) The order may, for the purposes of subsection (3)(d), describe any proceedings under Article 258 or 259 that may be commenced by reference to the subject-matter of—
(a) a Reasoned Opinion addressed to the United Kingdom under Article 258 or 259 (as the case may be); or(b) any other document sent to the Government of the United Kingdom by the Commission of the European Union or by another member State which gives notice to the Government of the possibility of proceedings being commenced against the United Kingdom.(5) The activities described for the purposes of subsection (2)(c) must be activities of the public authority which—
(a) are carried out in the exercise of non-devolved functions of the public authority; and(b) take place after the provisions of the order describing the activities come into force.(6) The following may not be designated under this section—
(a) the House of Commons, the House of Lords, the Scottish Parliament, the Northern Ireland Assembly or the National Assembly for Wales; (b) a Minister of the Crown or a United Kingdom government department;(c) a member of the Scottish Executive;(d) the First Minister or the deputy First Minister for Northern Ireland, a Northern Ireland Minister or a Northern Ireland Department;(e) a member of the Welsh Assembly Government;(f) a court or tribunal.(7) Before making an order designating a public authority a Minister of the Crown must consult—
(a) the public authority concerned; and(b) if it is a public authority with mixed functions, the appropriate national authority.(8) In sections 32 to 33 references to “acts”, in relation to a public authority which has been designated under this section, are to acts within a description of activities covered by the designation.”
Earl Attlee
“Establishment of independent panel
(1) This section applies where—
(a) an EU financial sanction to which this Part applies has been imposed by the Court of Justice; and(b) at least one public authority has been designated under section (Designation of public authorities) and the EU financial sanction is one to which the designation applies.(2) A Minister of the Crown must establish a panel for the purpose of carrying out any functions it may be given by or under any provision of this Part in relation to that EU financial sanction.
(3) The panel must be established before any warning notice is given to a public authority in relation to that EU financial sanction.
(4) The panel is to consist of one or more individuals appointed by a Minister of the Crown who appear to a Minister of the Crown to have suitable qualifications, expertise or experience to carry out their duties.
(5) A Minister of the Crown may invite nominations for appointment to the panel from such organisations as a Minister of the Crown considers appropriate.
(6) The validity of any acts of the panel are not affected by a vacancy among its members.
(7) A Minister of the Crown may pay to a member of the panel such fees, allowances or expenses as a Minister of the Crown may determine.
(8) A Minister of the Crown may provide such staff, accommodation or other facilities as a Minister of the Crown may consider necessary to enable the panel to carry out its functions.”
Earl Attlee
“(1) Before a public authority which has been designated under section (Designation of public authorities) can be required to make any payment under this Part in respect of an EU financial sanction to which the designation applies—
(a) a Minister of the Crown must give a warning notice under this section to the public authority;(b) the procedures set out in the warning notice (with any changes made under subsection (7)) must be followed; and(c) a Minister of the Crown must determine the matters mentioned in section (Matters to be determined before a final notice is given)(4).”
Earl Attlee
“Matters to be determined before a final notice is given
(1) This section applies where—
(a) a warning notice has been given to a public authority; and(b) the panel has considered all representations made to it under the procedures set out in that notice. (2) The panel must make, to a Minister of the Crown, a report on the matters to which the representations made to the panel relate.
(3) The report—
(a) may be published by the panel in such manner as the panel thinks fit and, if not published by the panel, must be published by the Minister of the Crown to whom it is made in such manner as the Minister of the Crown thinks fit;(b) must include recommendations as to the determination of the matters mentioned in subsection (4)(a) and (b);(c) if the authority has made representations to the panel about anything the authority considers relevant to any of the matters mentioned in paragraphs (c) to (e) of subsection (4), must include recommendations as to the determination of the matters mentioned in those paragraphs; and(d) must include the panel’s reasons for any recommendations included in the report.(4) After having had regard to the report, a Minister of the Crown must determine the following matters—
(a) whether any acts of the authority did cause or contribute to the infraction of EU law concerned and, in relation to any periodic payments mentioned in subsection (3)(c) of section 32, whether those acts have continued and will continue to do so;(b) the proportion of—(i) the total amount of the sanction (as specified under subsection (3)(b) of that section), and(ii) any periodic payments (as specified under subsection (3)(c) of that section),that, in the light of the acts of the authority which are determined to have had or to be having an effect mentioned in paragraph (a), is to be regarded as reflecting the authority’s share of the responsibility for the infraction of EU law concerned or, in relation to any such periodic payments, the continuing infraction of EU law concerned; (c) whether the authority should be required to make any payment or payments in respect of the EU financial sanction;(d) if so, what payment or payments the authority should make towards—(i) the total amount of the sanction specified under subsection (3)(b) of that section; and(ii) any periodic payments specified under subsection (3)(c) of that section; and(e) when any such payment or payments should be made.(5) In determining the matters mentioned in subsection (4)(c), (d) and (e) the Minister of the Crown must have regard to—
(a) the effect on the authority’s finances of any amount it may be required to pay and in particular, if the authority has mixed functions, the need to avoid any prejudicial effect on the performance by the authority of its devolved functions;(b) the determination under subsection (4)(b); and(c) any other relevant considerations.(6) Before making a final decision on the matters mentioned in subsection (4)(c), (d) and (e), the Minister of the Crown must invite—
(a) representations from the authority about the potential effect on its finances and, if it has mixed functions, the effect on its devolved functions of any amount it may be required to pay; and(b) if the authority has mixed functions, representations from the appropriate national authority.”
Earl Attlee
Earl Attlee
Earl Attlee
Earl Attlee
Earl Attlee
““the appropriate national authority”, in relation to a public authority with mixed functions, has the meaning given by section (Meaning of “public authority” and related terms)(8);
“Article 260(2) proceedings” has the meaning given by section 31(8)(c);
“Court of Justice” means the Court of Justice of the European Union;
“EU financial sanction” has the meaning given by section 31(8)(a);
“final notice” means a notice under section 33;
“functions”, “non-devolved functions” and “devolved functions” are to be construed in accordance with section (Meaning of “public authority” and related terms);
“infraction of EU law”, in relation to an EU financial sanction, has the meaning given by section 31(8)(b);”
Earl Attlee
“PARTEU fines: WalesPower to require Welsh public authorities to make payments in respect of certain EU financial sanctions
(1) The Welsh Ministers may, in accordance with the provisions of this Part, require Welsh public authorities to make payments of amounts determined by the Welsh Ministers in respect of an EU financial sanction to which this Part applies.
(2) A requirement to make a payment under this Part—
(a) may only be imposed on a Welsh public authority if— (i) the authority has been designated under section (Designation of Welsh public authorities); and(ii) the EU financial sanction concerned is one to which the designation applies; and(b) must be imposed by a notice given to the authority under section (Final notices) (referred to in this Part as a final notice).(3) If a final notice is registered in accordance with rules of court or any practice direction, it is enforceable in the same manner as an order of the High Court.
(4) Any sums paid by a Welsh public authority under this Part are to be paid into the Welsh Consolidated Fund.
(5) In this Part—
(a) “EU financial sanction” means a sanction consisting of a lump sum or penalty payment (or both) imposed by the Court of Justice in Article 260(2) proceedings for an infraction of EU law;(b) “infraction of EU law”, in relation to an EU financial sanction, means the failure to comply with a judgment of the Court of Justice given in proceedings under Article 258 or 259 of the Treaty on the Functioning of the European Union; and(c) “Article 260(2) proceedings” means proceedings under Article 260(2) of that Treaty.”
Lord McKenzie of Luton
My Lords, the purpose of the amendment is to try to have a safety valve in the arrangements for referendums around council tax, and for the outcomes of those, whereby the Secretary of State, notwithstanding the early determination, may direct that a substitute calculation can be increased by an amount determined by the Secretary of State. When we debated these amendments before we instanced particular circumstances where it was perhaps difficult for a local authority to disclose fully some of the sensitivities around its budget. Those matters might be commercially confidential or there might be a dispute outstanding. To spell out the consequences, risks and costs associated with that that could fall on the local authority, which could be difficult and prejudice its position. Hence the proposition that there should be an opportunity for the Secretary of State, obviously after discussions, to increase the amount determined. It may be that the Minister will say that this could be dealt with earlier in the process when the Secretary of State designates certain categories of authority, and that there will then be scope through that discussion to itemise just a few or even one particular local authority. That would be the mechanism to allow a council tax increase which was relevant to that local authority, but which was greater than the amount generally determined. That is the purpose of the amendment. I beg to move.
Earl Attlee
My Lords, I fear that my response on this occasion will be fairly similar to the previous one. The amendment does not take account of the fact that the provisional principles for council tax referendums will be announced at the same time as the provisional local government finance settlement. Authorities will then have the opportunity to make the Secretary of State aware of any exceptional circumstances that they consider he should take into account when determining the principles.
The noble Lord, Lord McKenzie, suggested that there may be financial problems that the local authority is reluctant to disclose. But what about being open to the Secretary of State about its problems? Surely it would want to keep the Secretary of State informed. I do not understand how the situation could arise whereby a local authority was in severe difficulties but wanted to keep that quiet from the Secretary of State.
Lord McKenzie of Luton
I am sorry if I was not clear. The concern was not about being open and transparent with the Secretary of State, but about the process of a referendum laying bare some difficult situations that could prejudice the outcome of those so far as the wider public is concerned. Obviously, in due course, everything would have to be properly reported and accounted for in the public domain, but there could be some sensitivity around issues just at the point where the referendum might be undertaken. That is the issue we are seeking to safeguard.
Earl Attlee
I think that I can accept, as the noble Lord describes, that you might not want to make the difficulties public at the time of the referendum, should that be necessary, but I do not understand why the local authority would not make it clear to the Secretary of State that there was a problem locally. It might have been a minor disaster, or a facility could have been destroyed, for example. The Secretary of State may or may not be aware of it but the local authority could tell the Secretary of State, and if it is a matter that does not need to be fully advertised then the Secretary of State could perhaps put it in a different category. It might be common knowledge, and therefore it would not be a surprise that the local authority was put in a different category.
In addition, if an authority is faced with difficulties prior to the referendum being held, the Secretary of State may direct that the authority need not hold a referendum if he considers that it will be unable to discharge its functions effectively or unable to meet its financial obligations. It cannot be right to allow an authority to apply to set an excessive council tax after it has been rejected by the electorate, nor can it be right for the Secretary of State to set a higher level of council tax after a referendum.
I do not think that this is localist. Indeed, it would defeat the whole reason for having a council tax referendum in the first place—to let the local electorate decide. I therefore ask the noble Lord to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Earl for his explanation. We had this response and exchange previously. I should stress that I was not in any way suggesting that a difficulty which a local authority may be in should not be fully shared with the Secretary of State. I was simply expressing the difficulty, at that point in time, of having to expose it fully in the public domain because of the adverse consequences that it might bring, to the detriment of the taxpayers in that area. That was the issue that I was seeking to pursue.
I take the noble Earl’s point that doing this perhaps after the referendum has been lost would seem to negate that process. However, I hang on to the point that there needs to be some mechanism to deal with it. The noble Earl referred to provisions, which we will cover in a different way in Amendments 196A and 196B, whereby if the Secretary of State is of the view that an authority is unable to discharge its functions or would be unable to meet its financial obligations the Secretary of State can step in. However, when we discussed that matter last time, it emerged that that would be an in extremis situation and I am still trying to focus on an issue when that situation has not been reached but it might be a material contractual issue that the local authority is facing. The issue may have reached a critical stage in negotiations, or there may be litigation pending or under way. I am suggesting a safety valve to deal with that.
If the Minister is saying that the best way of dealing with that is to have these discussions earlier so that there can be a separate category for that authority, I would accept that as a route forward. Quite how it would be viewed by the wider public if an individual authority, which presumably would have to be named, were to be separately categorised, and the inferences that might be drawn, could give rise to some—
Earl Attlee
My Lords, you could have a category with a single authority or with two authorities that have some bad luck, where something went wrong, and they could be treated a little more generously than others.
Lord McKenzie of Luton
Again, I am grateful for that. I hold to the view that although it may help in some instances, being named separately in a category with a potential council tax increase that was greater than that of most other authorities could itself engender inquiries, concerns and speculation over what might be going on. There is no easy way round this but I am happy to accept the Minister’s assurance that this type of issue could be dealt with through the mechanism that he identifies. I am content to leave it there and beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I beg to move Amendment 195K but shall not move Amendments 195L or 195M because this is an overlapping provision. This amendment would delete the detailed list of issues where guidance can be given by the Secretary of State in relation to a referendum. Regulations can touch upon provisions relating to: the question to be asked; the publicity to be given in connection with a referendum; the limitation of expenditure in connection with a referendum; the conduct of the authority, members of the authority and officers of the authority; when, where and how voting in a referendum is to take place; how the votes cast in a referendum are to be counted; and for disregarding alterations in a register of electors and so on. I contend that those issues should be left to the local authority to determine. If we are to be adherent to localism and want to trust local authorities, then we do not need this degree of prescription.
I am afraid that I missed all the fun over the removal of referendums earlier in the Bill as I was in the Committee on the Welfare Reform Bill. This is one area where referendums clearly remain in the Bill but I believe that the prescription should be removed.
Earl Attlee
My Lords, this amendment removes the power to make regulations in relation to significant issues relating to the conduct of council tax referendums. If there are to be no regulations, what are there to be? Are authorities to be left to make up their own rules on conducting council tax referendums and counting the votes?
Voters are entitled to see referendums handled in a consistent way with proper safeguards. The Government have accepted, on the recommendation of your Lordships’ Delegated Powers and Regulatory Reform Committee, that the regulations should be subject to the affirmative resolution procedure.
When I responded to similar amendments proposed in Committee, I said that the regulations would be modelled on existing regulations on the conduct of referendums on local government executive arrangements and would be subject to consultation with the Electoral Commission. Therefore, we are not suggesting a completely different system for operating a referendum; we are merely suggesting changes, where necessary, for this particular type of referendum.
Given that the regulations will be given considerable scrutiny and will be subject to the approval of both Houses, I request that the amendment be withdrawn.
Lord McKenzie of Luton
My Lords, I do not think that we are going to agree on this issue. We think that the Bill is unduly prescriptive and unnecessary. Clearly, the local authority has to have a referendum if it is going to deal with its council tax levels or if it wishes to go above the designated level. It cannot avoid that. If it acted spuriously or arbitrarily, it could obviously be held accountable for that.
There is also the question, which we touched on in Committee, of what happens if the referendum is found to be flawed in some respect in due course. What happens to the declared outcome of that referendum? That is an adjunct to these provisions but, on the specifics of seeking the removal of this prescription, I think that I understand the Government’s position. I do not agree with it but I do not see that there is a great point in pursuing it further this evening and I beg leave to withdraw the amendment.
Earl Attlee
“(6A) No regulations under this section are to be made unless a draft of the regulations has been laid before and approved by resolution of each House of Parliament.”
Earl Attlee
My Lords, in its report, your Lordships’ Delegated Powers and Regulatory Reform Committee recommended that regulations made under new Section 52ZQ should be subject to the affirmative procedure.
These regulations will set out the rules for conducting council tax referendums, and I am content that the Bill should be aligned with this recommendation. To give effect to this recommendation, Amendments 196 and 197 will add new subsection (6A) to new Section 52ZQ of the Local Government Finance Act 1992, which is inserted by Schedule 5 to the Bill, and will amend Schedule 6 accordingly.
There are a number of further minor and technical amendments—Amendments 197A, 197ZA, 197ZB, 197ZC, 197ZD and 197ZE. These do not alter the policy effect of the council tax referendums provisions but they ensure that minor drafting errors are corrected and that the provisions operate appropriately in relation to Wales. If your Lordships desire, I can give more detail on these amendments, but I assure noble Lords that they are minor and technical. I beg to move.
Lord McKenzie of Luton
My Lords, I am content with the government amendments and have no points to raise in connection therewith. Although they are grouped together, I have not yet spoken to Amendments 196A and 196B. I do not know whether they will be called separately but I can support the government amendments as they stand.
Lord McKenzie of Luton
My Lords, this amendment takes us back to the point that we touched on earlier this evening: whether circumstances might arise where currently the Secretary of State can determine whether an authority will be unable to discharge its functions in an effective manner or will be unable to meet its financial obligations unless it has a so-termed excessive council tax increase. Our amendment would bring to that process the right to seek an independent assessment of those same criteria, so that there is a process, other than, or in addition to, the Secretary of State’s own engagement with that decision. That may, in part, provide a route for dealing with the issue that we discussed earlier concerning one-off events arising for local authorities.
My understanding is that these tests are to be judged in the extreme—only if there is a cataclysmic situation and not one somewhere along the spectrum before that. I do not think that that is what the wording actually says or what the natural meaning would be. However, I believe that an authority should have a right to an independent assessment when it is heading towards situations which are very serious for it and which, without an excessive council tax increase, it could not see its way through.
Earl Attlee
My Lords, similar amendments were withdrawn in Committee. I set out the Government’s position there and my noble friend Lady Hanham followed up in significant detail in her letter to the noble Lord, Lord Beecham, dated 19 July, a copy of which has been placed in the Library of the House. I shall not repeat all those points in detail, other than to reiterate that it would be inappropriate for an unelected and unaccountable person to make the decision, which will involve a judgment about whether local taxpayers should be entirely unprotected from excessive increases for a financial year.
My noble friend’s letter made it clear that authorities will be able to make the Secretary of State aware of any special circumstances applying to them during the process when council tax principles are formulated and finally determined. We talked about the possibility of having a separate category. If my right honourable friend got this decision wrong, clearly there could be very serious consequences if it turned out that a local authority was not able to carry out its functions, and there would be political repercussions for my right honourable friend. My noble friend also said the Government would keep an open mind about the context within which this power to disapply a council tax referendum would be used. With this in mind I would ask the noble Lord to withdraw these amendments.