City of Wakefield (Mayoral Referendum) Order 2012

Lord Grocott Excerpts

Tuesday 17th January 2012 Grand Committee

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

My Lords, the purpose of all these orders to which I speak is to require the local authority named to hold a referendum on 3 May 2012 on whether it should start to operate a mayor and cabinet executive form of governance; that is, to have a directly elected mayor. As we described in our programme for government, the coalition Government are committed to creating directly elected mayors in the 12 largest English cities, subject to confirmatory referendums. These orders are the next stage in fulfilling that commitment. I shall explain the rationale for this, but first I would like to recall the steps that we have previously taken on elected mayors and the approach that we have followed in seeking to ensure that we can achieve the best way forward for our major cities.

As a first step to delivering our coalition agreement commitment, we included provisions on directly elected mayors in the Localism Bill which we introduced in December 2010. Those provisions included introducing the idea that there would be shadow mayors in the cities before any election and that, where a city adopted an elected mayor, it would be required to introduce mayoral management arrangements. These arrangements were that the city would cease to have a chief executive and the mayor would then be both the political leader and the top executive of the authority.

During the parliamentary passage of the Bill, these provisions attracted considerable debate and concern, particularly in the House of Lords. I remember it well. We listened carefully to the arguments being made about why these elements of a switch to the mayoral model could give rise to difficulties and hence were not appropriate. On careful reflection, we accepted the arguments being made and amended the Bill so that there was no longer any question of there being shadow mayors or statutory mayoral management arrangements. Our approach was to listen carefully to the arguments, address the issues raised with an open mind, and seek to ensure that we took forward our mayoral agenda in a way that commanded the widest degree of support and would best serve the interests of the cities concerned.

It is perhaps worth recording that when the House considered the question of mayors in the Localism Bill on Report there were no Divisions on any of these provisions or amendments. The result is that the Localism Act contains a simple provision that enables the Secretary of State to require in a particular city a referendum to be held on whether or not that city has a mayoral form of governance, and the orders before the House today are the first use of this provision.

I now turn to why we are seeking the House’s approval for these orders. As part of the coalition agreement, the Government committed to creating directly elected mayors in the 12 largest English cities, subject, as I said, to confirmatory referendums. Leicester already has a directly elected mayor, following a resolution of the Labour-led council to move to a mayoral form of governance and the people of Leicester elected their first mayor in May 2011. We are therefore planning referendums in May 2012 in the other 11 cities: Birmingham, Bradford, Bristol, Coventry, Leeds, Liverpool, Manchester, Newcastle-upon-Tyne, Nottingham, Sheffield and Wakefield. Where the referendum vote is in favour of having a mayor, the city will then rapidly hold an election for its first mayor.

The Government think that there is good evidence that where a city has a powerful and directly accountable mayor this can be a major factor for delivering local economic growth and bringing greater prosperity to that city. The value of big cities, effectively led by powerful mayors, is demonstrated by a range of international experience. For example, the Mayor of London has transformed the capital’s governance and achieved a range of successes including the London plan, the congestion charge, Crossrail and Boris bikes. Barcelona was transformed into a leisure and cultural centre through the strong leadership of its powerful executive mayor, Pasqual Maragall, who was elected as head of the list of the winning party. It is now one of the most prosperous cities in Europe with a GDP per capita 44 per cent above the European average.

Of all the governance models, we think that the mayoral model has the greatest potential to provide that strong and accountable leadership needed for our cities to be successful, economically, socially and environmentally. That is not to say that other forms of local government cannot deliver success or indeed that a mayor guarantees success, but we are clear, not least from the evidence of cities around the world, including London, that where a city has mayoral governance the odds of success are greater.

Why do we have the 12 cities? As the Institute for Government and Centre for Cities highlighted in their joint report, our cities are the heartbeat of the UK economy. Despite occupying less than 10 per cent of the UK’s land, they contribute 60 per cent of our economic output. That is why the Government believe that it is important that in each of our major cities, which contribute so much to our economy, the opportunity to have a mayor is seriously addressed by the electorate.

Of course, it may be, as in the case of Leicester, that the city council—the democratic representatives of the city’s communities—simply resolves to move to an elected mayor without a referendum being held. That option is available to all the cities unless their current governance model was agreed in a referendum, and will remain so until we have made a referendum order for that city. But if this option is not taken up, then local people should be given the opportunity to address the issue and decide. That is why we are bringing these orders to be approved by Parliament.

Finally, I remind the Committee that the orders we are considering today are about local choice and allowing local people to have a say on how their city is governed. Although we are clear about the benefits that mayors can bring, we are and remain localist. We believe that decisions about how a locality is governed are best taken locally. This is about letting local people decide. I commend the orders to the Committee.

[Lord Grocott]

My Lords, I cannot resist making just one general point before I get on to the specifics about my fundamental objection to the directly elected mayor system. I see it as an import from a different political culture. In essence, it is a presidential arrangement. All levels of our democracy in our country have embraced the parliamentary system whereby executive heads emerge from the elected body. I think that is infinitely preferable to the presidential system. The Minister’s examples were notably from abroad, with the exception of London, and bringing in this system whereby elected councillors have no direct say on who the city’s leader should be is—I cannot find a less pompous way of putting this—alien to our political culture, and I do not think there is too much wrong with our political culture. In my view, it has inevitably—certainly in the United States and here—led to mayors being elected who simply do not arrive via the tried-and-tested system.

I thought that the evidence put forward for extending this system in this dramatic way was pretty thin. The explanatory document claims that,

“directly elected mayors … enhance their city’s prestige and maximise the potential for local economic growth”.

Let us not go to Barcelona or anywhere else. We have had this system in Britain for a number of years. Where is the evidence that those lucky cities and towns that have directly elected mayors have seen the prestige of their areas enhanced in comparison with those that have not had the benefit of directly elected mayors and have seen economic growth? In short, has London been demonstrably much better governed, to justify all this additional expense, than has, let us say, Newcastle, Manchester or Birmingham? If there is any evidence, I would love to see it, but I am not aware of it.

I move to the specifics of the orders that we are now looking at. One has already been mentioned by my noble friend Lady Farrington. I am afraid this is more of a rhetorical question than one I expect the Minister to be able to answer because it is unanswerable. How on earth can you have an order that states:

“The authority must, on 3rd May 2012, hold a referendum”—

I would add, in brackets, “whether you want to or not”—with the Government’s alleged commitment to localism? Why the compulsion? Why not leave it to the local authority to make up its own mind? I do not know the answer to that one. I do not think it will do to suggest, as the Minister did, that somehow this is an opportunity for local people to decide and that the Government are neutral, at least to the extent that the local people can make their own decisions, because is it just an accident that the only places where local citizens will be able to decide on their governance are places where they do not have an elected mayor at the moment? What about all those local authorities that have an elected mayor? Why not ask them whether, on the basis of the past 10 years, it is a good way of spending public money? I am delighted to be able to report that, as the Committee will know, in the one area where people have been given that choice, namely the splendid city of Stoke-on-Trent with the outstanding Stoke City Football Club, the public were asked, “Do you want to continue with your elected mayoral system?” The answer was a pretty resounding, “No, we don’t, thank you very much”.

[Lord Rooker]

We need to hear the full story on Stoke-on-Trent. The structure between the mayor and the council was not replicated anywhere else in the country; it was unique. The Stoke system was almost designed to fail and indeed did fail, but it is not the same system as for the other elected mayors.

[Lord Grocott]

As my noble friend has argued for a referendum, I simply say to him: let the people in these other cities decide whether they want to continue with their mayoral system. They have had long enough to test it out, and he may be right that it is only in Stoke that they would say, “No, thank you very much”. If we are to have referendums in places that do not have mayors—I would rather we did not have any at all—then let us have them in places where they do.

I have a couple of questions about the cost. The only statistic that I have is from House of Commons Hansard of 20 December, where the Government said that,

“the cost of referendums for elected mayors will be £2.5 million”.—[Official Report, Commons, 20/12/11; 1187W.],

That is an average of about a quarter of a million pounds per referendum. Frankly, I am not very interested in who pays for it; all I know is that we will. I suppose it would be very unfair to put it all on the local authority, but the blunt truth is that those of us who do not live in any of these cities—I am one of them—will be paying for them to have a referendum, which I certainly do not want. We will find soon enough whether the public want that. Can the Minister confirm whether those figures are accurate?

I also note that paragraph 10 of the Explanatory Memorandum says:

“A Regulatory Impact Assessment has not been prepared for these instruments as they have no impact on business, charities or voluntary bodies and the cost of conducting the referendums across the 11 cities is less than £5 million”.

I do not know how these impact assessments are worked out these days, but that may be the cost of the referendum. Of course, if the referendum results in a yes, then the cost of implementing this system in 11 cities will be massively in excess of £5 million. In effect, through these orders we are setting a train in motion that will cost an awful lot of money. I would like the Minister to tell us who will pay for the reorganisation costs in the event of there being a yes result of a referendum. I would also like to know the estimate that the Government are making before we go on this journey about the cost for each of the local authorities because most of them can ill afford any unnecessary expenditure at the moment.

I would also like to ask the Minister about the responsibility for implementing the new system. The order is loose enough, as it stands at the moment. Article 4, under the title,

“Action to be taken after referendum”,

states:

“If the result of the referendum held by virtue of this Order is to approve a change to a mayor and cabinet executive, the authority must implement that change”.

It goes on to say that if a local authority does not do that, the Secretary of State will. Following the question asked by my noble friend Lord Beecham earlier, if there is a decision to make the change, I would like to know the timescale within which the implementation of that change must take place whether it is done by the local authority or by the Secretary of State?

I very much regret that these orders have come forward. I know this was an idea dreamt up by some policy expert in some recess of the previous Labour Administration. I did my best to stop it happening then, but without success, and this is my second attempt. I do it with more confidence now as I know—I will check the figures because they are around somewhere—that there was no evidence of any great enthusiasm for this system when local areas had the chance of holding referendums under the legislation that the previous Government brought in. There were very low turnouts, by and large. Some were lower than normal for local government elections. I know of no great evidence that these places have been a riotous success. Mercifully, where I live in the West Midlands, we do not have a directly elected mayor but, like the rest of us, I spend lots of time in London, and I am massively unimpressed with the directly elected mayoral system. I do not find it a wonderfully impressive and exciting operation, and I do not know why we should proceed with this without the evidence to justify it. I am, to put it mildly, unhappy with these orders.

[Lord Cormack]

My Lords, I came to listen, but I am provoked into saying a few words because, not for the first time in my brief period in this House, I find myself almost totally in agreement with the noble Lord, Lord Grocott, who has deservedly acquired a reputation for speaking his mind and speaking with a lot of common sense.

I was one of the very few Conservative Members of Parliament who voted against the abolition of the GLC. An amendment of mine came quite close to defeating the Government of the day. My argument was complex, but it was basically that I thought that if we abolished the GLC we would finish up with something worse. I believe that that has proved to be an accurate prophecy. We have the mayor and of course I shall campaign for his re-election later this year as a dutiful member of his party.

I would not be detaining the Grand Committee now if these Benches were crammed, but as they are not, and as I believe that I am the only Conservative Back-Bencher in the Grand Committee Room, I want to say this to the Grand Committee, the Minister and everyone else. The noble Lord, Lord Grocott, does not claim to speak for the Labour Party, and I do not claim to speak for the Conservative Party, but just as many of his colleagues in his party have grave reservations about the whole concept of the elected mayor, so do many people in the party to which I have belonged for well over half a century.

Many people feel, as does the noble Lord, Lord Grocott, that it is not quite the way we do things in this country. I believe in the collegiate atmosphere of local government which, at its best, delivers a real service. As the country has demonstrated many times—the greatest example of this was Joe Chamberlain in Birmingham—that does not prevent a great leader emerging. The balances and counterbalances that are built into the committee system make for better local government. They also provide a greater challenge for individual councillors, each one of whom has the opportunity to shine. Since we moved to elected mayors and cabinet systems, one has very often found in local authorities that only a handful of people really count. I do not believe that that can be right. I do not believe that it is in the British tradition to elect one supremo to be the mayor.

I am entirely happy about the concept of a referendum. I did not used to like referendums, and I still do not like them very much, but the fact is that they are now here. Because they are here and they are here in abundance today, it makes absolutely uncontestable the case that there must be a referendum if anybody is ever so silly as to propose the abolition of the House of Lords. However, that is another story, although I felt it right to get it in because I know that the noble Lord, Lord Grocott, at least is entirely at one with me on that, and maybe others are too.

If we must spend this money, let these towns and cities have their referendums. I shall be interested in the turnout. I personally do not believe that any referendum should count unless there is a threshold. Here I have great sympathy with the noble Lord, Lord Rooker, who went along those lines not long ago. If it is the genuine wish of local people to have an elected mayor in these cities, having had the opportunity to consider the merits and the problems, so be it. However, I hope that they will reflect very carefully and that they will realise that if they go for an elected mayor—somebody with real executive authority—they will be turning their backs on a system of local government which has served this country well over the years. That is a system which I and many others have admired and one in which the Minister has played a considerable and constructive part, as has the noble Lord, Lord Beecham, who has an enviable record in these matters. They provided leadership, but it was leadership of a team. The danger with a mayor is that he dictates to a team. People should bear those things in mind.

--- Later in debate ---

[Baroness Hanham]

I will have to take the noble Lord's word for it. People may have known who he was but he has certainly been heard of since. The question is whether he was better known at the time or subsequently.

A lot of questions have been asked. It is not helpful to go over the debate again. We have a debate on the previous orders and we have had a very interesting Second Reading speech from my noble friend Lord Cormack, who was not entirely supportive. We have just a few issues to deal with. As regards turnout on the referendums, as I think I have said before, probably some had about the same turnout as local elections. The noble Lord, Lord Beecham, did not think that was quite right. I do not think anybody would accept that they have been in the general election ballpark figure but there has been a good turnout.

The noble Lord, Lord Grocott, referred to the interminable business of savings and costs. We have gone through the election costs. We anticipate that the costs of reorganisation will absolutely depend on what amount of reorganisation a local authority needs to do. It may not need to do very much at all. The mayor comes in and it might need to provide him with a room. He will probably need a couple of members of staff. His expenses will fall within the general administration of the council. Therefore, I do not anticipate there being a huge extra cost to the council as a result of this. I am sure it will make the decisions which ensure that there is no huge extra cost. I do not think the Government want—

[Lord Grocott]

I intervene only as it may save time when we discuss this later. Presumably, figures are available showing the cost of the mayoral systems that have been introduced. I challenge the Committee to say whether there has ever been a local government or, indeed, any other reorganisation which has not cost more than people said it would. I respectfully suggest to the Minister that the costs are likely to be a bit more than those incurred in providing a room and perhaps a secretary. When the orders come back to the House, could we be given figures showing what the actual costs of reorganisation have been where the mayoral system has been introduced?

[Baroness Hanham]

I am not sure that I can answer that even now. As I have said, the costs will depend on how much reorganisation a city council has to undertake to accommodate the mayor. As I understand it, the evidence we have shows that there has not been a substantial increase in costs where elected mayors have taken up office. I am not going to be able to provide figures down to £5,500,000 and 36 pence. If I can find more helpful information for the noble Lord, I will, but this is about as good as we can get in that it is for the relevant area to work out in its own mind how much reorganisation it needs to do.

The implementation of the system is entirely the same. It will be up to the authority itself to decide how to implement it. However, we expect the mayor to be in position three days after the election. There should be no hiatus. As I say, he should be in position three days after the day on which the result of the first mayoral election is declared and then take office four days after the election, so this happens within a week.

I love the speeches of the noble Lord, Lord Beecham. They are all always very taxing and have a nice aspect. I thank him for his speech. I do not have much to say in response to it but it was nice to hear his words. He has been consistently against us from the start, so there is no change there. I hope that within the space of these two discussions we have more or less covered the ground. I appreciate that we are going to have another go at this later.