Localism Bill

Mark Reckless Excerpts

Monday 7th November 2011 Commons Chamber

[Annette Brooke (Mid Dorset and North Poole) (LD)]

It is a privilege to follow that interesting contribution from the hon. Member for Elmet and Rothwell (Alec Shelbrooke). I mean that; his contribution was very interesting.

I welcome the contributions made by noble Members in the other place, which have been exemplary. There has been working together, cross-party work and working among the Cross Benchers. Ministers in the other place have carried forward issues raised in Committee in this place. Therefore, I am not sure why there is so much criticism of the amendments. During consideration of the Bill, there has been co-operation with the Local Government Association. This is perhaps more relevant to the next string of amendments, but I would like to put on the record the fact that I have recently become vice-president of the Local Government Association.

I welcome the Government amendments because, for the most part, they will extend local decision making and they are all steps in the right direction. Restrictions on area committees will be removed and councils will be able to choose what sort of structure they operate under and when they change structure. I was a councillor when cabinet structures were imposed by a Labour Government. There is also the timing of when a vote on all-out local elections may be held, if that is the choice of the local authority. I welcome the abolition of the concept of shadow mayors, because that was certainly not the best example of local decision making.

We have said much tonight about the standards reforms. They are possibly the most important matter to discuss on this string of amendments. It seems that all hon. Members recognise that reform was necessary. Sadly, I think it would be true to say that hon. Members of all political parties have probably engaged in vexatious complaints, so it should not be only my party that is the thrust of such comments. We need to recognise that, unfortunately, the set-up—the nature of the beast—meant that vexatious complaints would occur.

When the Bill was introduced, it was a reaction to a great need for reform and it moved the pendulum. As often happens, it probably moved it too far. The other place has pulled that pendulum back and has achieved a very interesting balance. There has certainly been much discussion on the matter. At the back of my mind, I feel that we should be prepared to review how things are working. Obviously, we do not have such a provision before us today, but it would be useful to know how the new system is working out in, for example, two years’ time. It might be necessary to revisit the system. None of us has a crystal ball and can see how well the new system might work, but this is definitely the right type of reform. It is important to get a balance and, as much as possible, make the measure local. Nevertheless, there need to be important protections.

I therefore heartily welcome all the Government amendments in this string. I am afraid that I will not support the amendment of the hon. Member for Richmond Park (Zac Goldsmith). His passion for increasing local democracy is very important, but there are issues with local referendums, not least the fact that they could lead to conflicts and abuse. The amendment clearly has a number of technical deficiencies and therefore could not be considered anyway.

[Mark Reckless (Rochester and Strood) (Con)]

I shall address my remarks to the amendments relating to referendums—Lords amendment 112 and the excellent counter-amendment tabled by my hon. Friend the Member for Richmond Park (Zac Goldsmith)—and to the Minister’s remarks about council tax referendums.

It occurs to me to wonder how our counterparts in the United States Congress or the German Bundestag might look at our debate. It is about the Localism Bill, yet we seek to prescribe almost every last detail of how and when a locality might consult its people on an issue—whether that consultation should be binding or non-binding, how far it extends, and what exactly should be the trigger of signatures or the turn-out required. An alternative way of doing this, even if there were certain minimums, would be to allow localities themselves to experiment on what works best for them and to consult their residents as they wish.

I agree with the Government that the Bill introduces an improvement—at least a small one—in relation to a council tax referendum, in that when a local council comes up with a proposal for a level of council tax, it is somewhat better that central Government might require a referendum on that level rather than merely disagreeing with it and putting in place one that central Government happen to prefer. The local authority is the single body that is setting the council tax, then central Government come in with a successiveness tax test, and then there has to be a referendum.

I am concerned about how the Bill interacts with the Police Reform and Social Responsibility Act 2011. The way in which the police precept is set has some very special aspects relative to other local government precepts. The first of these is that the police precept is a pretty small proportion of the overall council tax, so setting a percentage increase above which it is required to have a local referendum acts as a far greater disincentive to placing a precept above that than it does for local government, because the proportionate cost of having a referendum for the police precept is far higher—perhaps up to 2% of the police budget. That makes it extraordinarily difficult for a police body to attempt to go beyond what central Government have set as that trigger.

Overall, I am concerned that setting these referendum requirements undermines the incentive to vote for local politicians who want to stand on a lower-tax basis. If central Government are in any case providing an automatic safeguard so that even if there is an enormously left-wing council that wants to push up the council tax by a huge amount, that reduces the incentive to vote for politicians who believe in lower taxes.

[Graham Jones]

I remind the hon. Gentleman that my left-wing Labour council is setting a 0% council tax level for the forthcoming year.

[Mark Reckless]

The hon. Gentleman’s Labour council, like every other council in the country, has set a 0% council tax level because this Government, who believe in localism, have come in with an offer they cannot refuse.

I was a councillor for four years, and I am afraid that such measures do not just reduce the incentive to vote for parties of the centre right: it sometimes leads to good Conservatives taking offsetting measures to give themselves greater scope for freedom from central Government. My own council of Medway had virtually the lowest unitary tax in the country outside the Scilly Isles, yet when we attempted to put in a tax increase that was very slightly above the standard percentage cap that was set, we were not designated but put under the process whereby action would be taken against us the following year if we did not pull our socks up. In fact, our increase was far lower, in absolute terms, than increases of similarly sized councils elsewhere.

The problem is the fear of being capped—of not knowing what the level will be next year—and possibly even the fear of being forced to have very expensive referendums with very embarrassing results for the local politicians, particularly if they do not succeed, and for which their locality has to pay for in any event. That may lead some councils, even good Conservative ones, to put up council tax by more than they otherwise would in a particular year so that they have a higher base and there is less concern that they might get capped in a future year in needing to put through a substantive increase.

[Alec Shelbrooke]

Does my hon. Friend think it is fair that the Government can impose a cap and say, “That’s it—you’re not raising it”, as in his fine example from Medway? Would it not be better to take that to the people and say, “Do you want to have this rise in council tax which we believe is above a cap?”, when he could argue exactly the case he has argued for Medway?

[Mark Reckless]

As I said, I believe that in this respect the Bill is a marginal improvement on what we had before. Let us consider the idea that the federal Governments in the US or Germany would look at each state, determine what the level is—indeed, the same level for all states—and say, “If you want to raise your property tax by more than that, you have to have this referendum, and this is the exact way in which we specify that it has to be run.” By comparison, we seem to have an extraordinarily centralised state, and I am disappointed that the tiny steps in the Bill have only a very little impact on that.

In the policing universe, the Bill is not just a little bit of progress but a step back. The significant difference is that there is not a single body making the decision, as with a local council within the referendum protection; we are setting up a special local body, a police and crime panel, that will have scrutiny, oversight and an overview of the directly elected commissioner. We said in the coalition agreement that the elected police and crime commissioner

“will be subject to strict checks and balances by locally elected representatives.”

We were then told—I questioned the Minister for Policing and Criminal Justice about this earlier—that the panel

“will have a power to trigger a referendum on the policing precept recommended by the Commissioner.”

The Minister said that he disagreed with the premise of my question, which was in fact the premise in the White Paper that the Home Office published in July last year, “Policing in the 21st century”, which said that the police and crime panel will have this power. However, the Bill, which provides for these referendums, has no provision to allow the police and crime panel to trigger such a referendum, and the powers appear to have been taken by the Secretary of State, despite the coalition agreement and what was promised in the White Paper last year.

When the Minister spoke about this on 30 March, it seemed that his officials had not properly explained to him his own Bill. He said that

“the police and crime commissioner will set the precept but a referendum will be triggered. The”

police and crime

“panel will not be able to prevent that, but it will be able to propose an alternative precept with accompanying reasons that will have to be published. The public will then have to decide—having both sides of the story.”—[Official Report, 30 March 2011; Vol. 526, c. 433.]

That suggests that the referendum was going to be between the commissioner’s precept and an alternative proposed by the panel. That is what we said would happen, but unfortunately the provisions of the Bill do not allow it to happen. In the case of the police precept, we are bringing in this third body—the Secretary of State. The Secretary of State, not the local panel, has the power to trigger a referendum. That is a highly regressive step that will prevent the elected police and crime commissioner from establishing a responsible relationship with his chief constable—perhaps being able to get him more budget and, in return, getting different priorities for policing. They will always be looking over their shoulder to the Secretary of State, who is giving a standard rise that they cannot go above without the risk of a local referendum that would cost perhaps 2% of the council tax, which they would have to pay even if they won. This will have a chilling effect on our proposals for police accountability.

I am very disappointed, because in 2005 I wrote a book called “Direct Democracy” for which I had four co-authors—my right hon. Friends the Members for Tunbridge Wells (Greg Clark) and for Arundel and South Downs (Nick Herbert), my hon. Friend the Member for Clacton (Mr Carswell), and Daniel Hannan, who is now an MEP. In that, we called for direct democracy and the devolution of powers, and, in particular, an elected person in charge of overseeing the police who would have local powers. We still believed that in the coalition agreement and we still believed it in last year’s White Paper when we said that the panel would be able to trigger a referendum. It is terribly disappointing that this Bill fails to provide for that and instead hugs the power to the Secretary of State.

[Bob Blackman]

I want to make three points. The first is about the codes of conduct and the abolition of the Standards Board. I, like many local councillors at the time, was the subject of numerous referrals to the Standards Board. The first that anyone heard of it was when they received the letter from the Standards Board saying that it had decided to take no further action on the vexatious complaint. It could take many months and, in certain cases, years before a complaint was determined one way or the other. In cases that were chosen for investigation, the investigations could take the length of a councillor’s term of office before it was decided whether they were guilty.

I have concerns about what is being proposed. I completely agree with having a national standard for the codes of conduct that local authorities should impose. There should be national standards and everybody should abide by them, even though they will be monitored at a local level. There is a key concern about how valid complaints will be investigated. I have a concern about elected councillors overseeing complaints about other elected councillors and about how politicians might seek to gain party political advantage over one another through standards committees. The concept of having independent individuals in charge is of course welcome. However, the risk is whether such people can be found for every local authority and whether they will be of a suitable standard to make the system work. I have concerns but, broadly speaking, the Government’s amendments should be welcomed.

My second point touches on the amendment tabled by my hon. Friend the Member for Richmond Park (Zac Goldsmith) on referendums. The key concern is about the difference between a local authority consulting the people it serves and it being bound by a referendum, possibly on a single proposition. I do not think that local authorities in this country consult properly. Instead, they notify the public that they will do something to them, regardless of what they think of it.

I will give an example from a local authority on which I used to sit. The London borough of Brent has decided to close half its libraries. The council put it to the public and 82% of people said that they did not like it. The answer from the council was, “We’re still going to do it.” That was the result of a consultation. The idea was overwhelmingly rejected, but the council are progressing with it. That would be a case, like my hon. Friend the Member for Richmond Park described, in which a referendum would undoubtedly go against what the local authority wishes to do. However, that does not change the fact that local authorities are elected to serve and to make decisions. They should do so even if those decisions are not liked by the people whom they represent.

I will also cite the case of Bristol, which several years ago conducted a referendum on the level of council tax to be charged. The council put four options to the people of Bristol: a reduction in council tax with a drastic reduction in services; a marginal reduction in council tax with a marginal reduction in services; a stand-still option; or the council’s preferred option of an increase in council tax and keeping services at the same level. Lo and behold, the people voted for a substantial reduction in council tax and a substantial reduction in services—not quite what was expected. One has to be careful in taking on a referendum. For the purposes that I have described, a referendum is clearly not the route to follow.

Equally, as I have said in interventions, if we had referendums with a trigger of 20% or 30% of people signing a petition, that would not necessarily work if the turnout for such a referendum would be far too low. That would be ridiculous and would impose on local authorities an unfair basis for making decisions. As we all know, it is easy to get people to sign a petition, but it is another thing to get them to vote. Clearly there is a role for petitions in consultations, but using them to trigger referendums is difficult.

My third point relates to the position on council tax. I have always been an advocate for councils being free to set council tax at the level they choose. If councillors choose to impose a swingeing increase in council tax, the public have the right to vote them out at the next election. We should trust the people to do that. I have always been stringently opposed to the capping of council tax or previous forms of local taxation, because it takes away the decision-making powers of local authorities. Councils should not have referendums held over their heads on council tax, but people should have the power of the ballot box to remove councillors who vote for a swingeing increase. That is the right way to protect people.

Most local authorities in this country have their councillors elected by thirds, so the local electorate has the power every year to remove councils and councillors who choose to vote for large increases in council tax. In unitary authorities, there are all-out elections, which means that councillors, having been safely elected, can take decisions at the beginning of their cycle to get their betrayal out of the way before they face the threat of the ballot box three or four years later. Perhaps we need to re-examine the governance of local authorities and ask whether they should face more frequent local elections, rather than having periodic elections when the decisions made by the local electorate are often more about the national Government of the day than the decisions that are made at a local level.

Having spoken about those three key issues, I will conclude my remarks. I warmly welcome the amendments proposed by the Government.

--- Later in debate ---

[Andrew Stunell]

We have had an interesting and wide-ranging debate, with plenty of interest added by Members’ personal experiences.

I appreciate the decision of my hon. Friend the Member for Richmond Park (Zac Goldsmith) not to press amendment (a) to a Division. He will have seen in the course of the debate that the force is not with him, although he has raised a number of interesting aspects, which I am sure he will ensure are kept in front of the House in the years to come.

Other hon. Members have raised a wide range of issues, and perhaps the most persistent raiser of issues was the hon. Member for Hyndburn (Graham Jones), who is not in the Chamber. This part of the Bill applies to local authorities; it does not attempt, and it never did attempt, to regulate community groups, neighbourhood forums or other non-governmental organisations. However, I remind the House that there is still a requirement on anybody spending public money to give a proper account of that spending and to be held accountable, if necessary in the courts, should they fail to do so. On the wider duty on anybody spending public money, the introduction of the equalities duty provides a substantial safeguard and remedy for those who feel hard done by as a consequence. I hope that the House will accept that as the right basis on which to proceed.

My hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) told us a shaggy bear story, but hidden behind it were some important observations, one of which was about the present system’s extensive capacity for creating trouble for council members going about their lawful business and trying to serve their community. He referred to a case in which essentially he was being bullied by a developer because of views he had expressed on a planning application. I am happy to tell him that, quite apart from our abolition of the Standards Board, our abolition of the pre-determination legislation, which is also right at the front of the Bill, will put in place a safeguard in such situations.

My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) drew attention to the hard work done in the House of Lords, not least by our Liberal Democrat colleagues. Government Members acknowledge the fruitful dialogue in the Lords, which I believe has produced a much-improved Bill. She suggested that it might be appropriate for us to return to the standards regime and monitor its performance after a couple of years. More broadly, the Government have said that they want to monitor the impact of legislation as time goes by, and I hope that she will understand that the House always has the capacity to return to matters. No doubt the Select Committee and others will keep an eye not only on that provision in the Bill, but on all the others.

I heard the contribution from my hon. Friend the Member for Rochester and Strood (Mark Reckless), particularly on police and police commissioners. My right hon. Friend the Minister of State, who has responsibility for decentralisation, has recently written to my hon. Friend about that matter, and I know that the Minister for Policing and Criminal Justice has also offered to liaise with him. I assume that he will want to take up that offer. He made several observations about what would happen in the United States, but I have reason to suspect that he is not in favour of introducing a federal system in the United Kingdom. In default of a federal system, we have to manage our own resources of governance.

On council tax referendums, I made the point in my introductory remarks that we are replacing a top-down limitation on what councils can spend and raise from the council tax with a process controlled by the electorate—the ones who pay for it—which is how local accountability is supposed to work in our democratic system. As those who did an A-level in this area will know, that is what we are all taught happens, but what has not happened for many years. We are changing a top-down financial control system to a bottom-up control system. In the eyes of my hon. Friend the Member for Rochester and Strood, that might not be perfect, but I hope that he would accept that it is more than just a small notional improvement.

[Mark Reckless]

It might be that for local authorities we are just about doing as the Minister states, but it is not the case for the area of policing that I raised. The letter that I received from my right hon. Friend the Minister of State was entirely unsatisfactory, and the meeting with my right hon. Friend the Minister for Policing and Criminal Justice has not happened. Importing the Localism Bill into the police framework makes a complete dog’s breakfast of the precept setting and contradicts the coalition agreement and last year’s “Policing in the 21st Century” White Paper.

[Andrew Stunell]

I am disappointed to hear my hon. Friend say that. Local people have as much right to take a view on excessive police precept increases as they do on increases in any other sector of local government. I believe that the provisions we have are right. I hope that he is not spurning the offer of a meeting my right hon. Friend the Minister for Policing and Criminal Justice, because he might find it more productive than he evidently fears it would be.