House of Lords
(12 years, 8 months ago)
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Public Libraries: Closures
(12 years, 8 months ago)
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Lord Borrie
To ask Her Majesty’s Government what discussions they have had with local authorities about the closure of public libraries.
Baroness Rawlings
My Lords, DCMS officials have had discussions with local council officers from Gloucestershire, Lewisham, Somerset, Brent and the Isle of Wight. They have considered the relevant evidence and circumstances. DCMS officials will continue to monitor changes to these and other library services carefully.
Lord Borrie
I would like to think that the heart of the noble Baroness was in the right place but she has not actually indicated whether, for example, she agrees with me that public libraries are a vital asset for education and recreational purposes. Local authorities should regard them as of great importance, because being local is the essence of the thing. As the author Alan Bennett said the other day, it is no good people having a library if they have to go on an expedition in order to access the books. Does the noble Baroness agree that the public libraries Act imposes a statutory duty on the Secretary of State—and therefore, I suggest, Ministers and not just officials—to ensure that local authorities provide an effective and efficient library service?
Baroness Rawlings
My Lords, yes, I read that piece by Alan Bennett, which was absolutely right. The public libraries Act 1964, which the noble Lord, Lord Borrie, mentions, does say that there is a public duty to keep comprehensive and efficient libraries open. Of course, we know how important libraries are because we have the wonderful Library—even though it is private—here in the House of Lords, which is a treasured privilege. Most people understand that libraries are special places and not just facilities. They provide access to considerable electronic information as well as books.
Baroness Gardner of Parkes
I think it is our side; the Question came from the noble Lord’s side. Can the Minister tell me how many libraries are threatened by closure?
Baroness Rawlings
My noble friend Lady Gardner asks a very good question. Detailed data about the library sector are published annually. Local authorities are in the process of consulting. However, the DCMS monitors proposals as well as any changes that are made to library services from information it has gathered via correspondence and media coverage and from relevant bodies such as the Museums, Libraries and Archives Council.
Lord Peston
My Lords, despite the folly of the Government’s economic policies, we are still a very rich country. Can the noble Baroness explain why we are considering closing any libraries at all since, when most of us were young, we got our education in libraries?
Baroness Rawlings
My Lords, the closure of any libraries is a local authority matter. The Secretary of State has the privilege of inquiring into the situation, which is constantly under review. Each case is different and, while some libraries are closing, he is fulfilling his statutory duties.
Lord Tope
My Lords, it is the turn of this side next. I declare my interest as executive councillor responsible for the public library service in the London Borough of Sutton, where no libraries have been proposed for closure. Would the Minister agree that public libraries are an extremely important community resource? In any discussions with library authorities and local authorities, will she urge them first to consider what other facilities can be provided in public libraries? Indeed, will she urge them to consider whether public libraries can be located in other facilities and their services extended far beyond simply the loan of books? These measures should be realised so that libraries are used far more effectively, as a first consideration, as a proper community resource.
Baroness Rawlings
Yet again, I agree with my noble friend Lord Tope. Libraries are a very important resource and could be used for other facilities. Every authority in England is required to provide a comprehensive and efficient library service under the Public Libraries and Museums Act, but it is for each authority to determine at local level how much it spends on libraries and how it manages to deliver that service to meet the needs of its library users, bearing in mind the resources available.
Baroness Bakewell
My Lords, in a recent campaign run by the Evening Standard in London, Nick Clegg declared his absolute support, issuing a rallying cry to parents to read to their children more often. I wonder whether the Minister and the Government realise and appreciate that you cannot read books without libraries. Perhaps there is a division in the coalition on this.
Baroness Rawlings
The noble Baroness, Lady Bakewell, makes a very good point. This is exactly where the big society philosophy is relevant—
Baroness Rawlings
The needs of the community are at the heart of library service provision. We hope that the big society will give citizens more of a role in determining the shape of public service and what it delivers. The ability of libraries to reach out and be involved with communities means that they have a vital role in delivering the big society. The noble Baroness is absolutely right about the importance of reading to children. That is one area that Her Royal Highness the Duchess of Cornwall has been promoting extensively.
Lord Brooke of Sutton Mandeville
My Lords, as our local library in rural Wiltshire is now significantly kept open by volunteers, would my noble friend like to say something about volunteering?
Baroness Rawlings
My noble friend Lord Brooke raises a valid point, which is very topical at the moment. Over the past 10 years we have seen an increase in the number of people volunteering in libraries. Volunteers regularly help to deliver homework clubs for schoolchildren. They contribute to projects, they digitise items in library collections and they provide buddy support for people new to using computers. It is important to remember that authorities remain accountable to their communities for the changes they make, and that includes the use of volunteers.
The Lord Bishop of Hereford
My Lords, the point was made earlier about the need occasionally for other premises where libraries are being closed. We have in Hereford diocese an excellent example, of a library in a church tower. A lift, loos and other facilities are provided. If local authorities have to relocate libraries that are under threat of closure, I would be grateful if the Government would give them every encouragement to look at partnerships in a whole range of ways, including with the churches.
Baroness Rawlings
My Lords, the right reverend Prelate makes an extremely good point, which I look forward to taking back to the department.
Airports: Heathrow
(12 years, 8 months ago)
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Lord Spicer
To ask Her Majesty’s Government whether they expect Heathrow airport to lose its status as the world’s busiest international airport; if so, to which airport; and when.
Earl Attlee
My Lords, last month the Department for Transport published its UK aviation forecasts to support the development of a new policy framework for UK aviation, which supports economic growth and addresses aviation’s environmental impacts. It is forecast that Heathrow will have 85 million terminal passengers in 2030 compared with 65.7 million in 2010. The department does not forecast demand for airports outside the UK.
Lord Spicer
My Lords, when I was Minister for Aviation, Heathrow was the number one international airport in the world and Gatwick was number four, and together they provided the international crossroads and hub for the whole world. Does my noble friend share my concern—based, if for no other reason, on economic growth—that the pre-eminence of Heathrow should now be challenged by the likes of Schiphol and Frankfurt because of the capacity constraints that have been set on it?
Earl Attlee
My Lords, I understand the point that the noble Lord makes, but there are also airports in the Far East which will probably overtake Heathrow eventually. We want to see a successful and competitive aviation industry which supports economic growth and addresses aviation’s environmental impact. Aviation should be able to grow, but to do so it must play its part in delivering our environmental goals and protecting the quality of life of local communities.
Lord Soley
Is not the answer to the Question of the noble Lord, Lord Spicer, really that, in future, South American flights will go to Madrid, Indian and Chinese flights will go to Frankfurt and Schiphol and the rest will go to Paris? If the Government are determined to advertise that Britain is closed for business, I can hardly think of a better deterrent than the current aviation policy, with the possible exception of the reintroduction of biplanes.
Earl Attlee
My Lords, the noble Lord will understand that we cannot arrange for every flight coming into Europe to land at Heathrow.
Baroness Kramer
My Lords, the Minister will be aware of the recent report by Airport Watch, which demonstrates that Heathrow and London dwarf every European rival in number of flights to the world’s main business destinations. Therefore, would he agree that in order to keep its place, Heathrow should focus on how it treats its passengers and perhaps the UK Border Agency could change its policy so that people with non-UK passports can get through in less than one and a half hours, which was true at terminal 3 two weeks ago?
Earl Attlee
My noble friend makes extremely important points which were all picked up by the South East Airports Taskforce. She mentioned the UK Border Agency. We are aware of scope for improvement and UKBA is working on that. She will also be aware of other things that will be happening as a result of the South East Airports Taskforce’s work, which will improve the experience for passengers.
Lord Berkeley
My Lords, would it not be better if we concentrated on service quality at airports and did not go for the busiest? Is the Minister aware that Beijing is soon to have another runway, which will give it a total of 120 million passengers a year, and would it not be much better for the environment if we concentrated policy in this country on the medium and shorter-term passengers being able to travel by high-speed rail and ordinary rail?
Earl Attlee
My Lords, the general thrust of what the noble Lord says is very good. Interestingly, I went to Gatwick airport last week and saw the effort being put towards improving the passenger experience. No doubt I shall be going to Heathrow shortly.
Lord Dixon-Smith
My Lords, the present situation in our airports was predicted 45 years ago, I think. There was a very reasonable proposal to put an airport in the Thames estuary, which would remove the constraints that are inevitable anywhere west of London. Perhaps my noble friend might care to comment on that possibility, as it is being raised again. At least, if that strategic decision were taken, there would be the possibility of a long-term solution.
Earl Attlee
My Lords, we welcome all these suggestions. The mayor’s input and suggestions will be considered alongside the many other contributions to the debate about our future airport aviation policy.
Lord Palmer
My Lords, could the noble Earl try to persuade his colleagues in the Treasury to look again at this terrible problem of air passenger duty, which is one of the reasons that Heathrow has lost its premier slot in the world?
Earl Attlee
My Lords, the noble Lord will know that air passenger duty is under review. However, it is a matter for the Treasury, as well as the Department for Transport. We are giving it careful consideration and will make an announcement in due course.
Lord Mawhinney
My noble friend has already made it clear that this Government have made their decision about Heathrow. However, this Government also talk about the need for economic growth as well as environmental sustainability. If the next Government and those after also believe in economic growth, would my noble friend recommend that they build a third runway at Heathrow or a new airport in the estuary?
Lord Davies of Oldham
What is the Government’s transport policy really meant to contribute to economic growth? On rail, it seems a question of asking passengers to pay more; on roads they cut the funding that subsidises the cameras that keep our roads safe; and on aviation they have taken the negative decision against the third runway. What exactly are the Government’s plans for the aviation industry to make a contribution to economic growth?
Earl Attlee
My Lords, we will have to wait and see when the aviation policy framework document is published next year as a draft.
NHS: Cost-effectiveness
(12 years, 8 months ago)
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Baroness Thornton
To ask Her Majesty’s Government whether the Department of Health will draw attention to the recent report in the Journal of the Royal Society of Medicine on the cost-effectiveness of the National Health Service.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the department welcomes the report to which the noble Baroness refers, and recognises the significant gains in health achieved by the National Health Service since 1979. However, its evidence is limited and does not support broad generalisations on NHS cost-effectiveness. The NHS can still make major improvements to the health of the nation and must continue to respond to pressures from an ageing population, new technology and rising patient expectations.
Baroness Thornton
My Lords, I thank the Minister for that Answer. The Government seek to justify the hugely risky reforms of the NHS by saying that our NHS is not fit for purpose in a variety of ways, including not being cost-effective. We all know that improvements can be made—there is no doubt about that at all—but how does the Minister reconcile that with yet another authoritative report in the Royal Society of Medicine journal which says, among other things, that in terms of cost-effectiveness—that is, economic input versus clinical output—the UK NHS is one of the most cost-effective in the world, particularly in reducing mortality rates, and that among other systems, the US healthcare system is one of the least cost-effective?
Earl Howe
My Lords, I must point out one thing about this report: it does not make any claims for how cost-effective our health system was at any given point in time. What it does is measure the improvement in mortality over a period and then assess the cost-effectiveness of that improvement, which is a very different thing. Yes, the NHS has made great strides in improving mortality rates, but that is the only metric that the report deals with. It completely ignores other measures of quality. It is also completely silent about anything that happened after 2005, so recent years are not covered.
Lord Clement-Jones
Is not the really difficult and vital context in which we find ourselves at the moment the fact that we need significantly to improve productivity in the NHS in line with the so-called Nicholson challenge, which was endorsed by both this Government and the previous one? Can the Minister remind us of the record under the previous Government and tell us what he expects to be the outcome of the current health reforms?
Earl Howe
I am grateful to my noble friend. A Written Answer was published in Hansard recently that tracked the changes in productivity of the NHS between 1996 and 2008. He will know if he read it that there was a decrease in productivity over that period of around 3.1 per cent. The pressures on the NHS are increasing. In order for it to respond to the needs of the future, including an ageing population and the cost of new technologies, it needs to adapt to new ways of working that reduce cost pressures while delivering improved outcomes. The measures that are before Parliament seek to do just that.
Baroness Farrington of Ribbleton
My Lords, can the Minister give an example of any major reorganisation and restructuring that has not cost more money and put the brakes on improvements in the service that were being made, particularly when the Government bringing in to the system such major changes comprise two parties that said that there would be no major reorganisation of the National Health Service were they to be in government?
Lord Patel
Does the Minister agree that improving the quality of healthcare will lead to higher costs?
Earl Howe
No, I do not. There are plenty of examples of quality costing less because the system gets it right first time. We see this time and again, for example in the Quit programme. The simplest example is that if we can treat patients correctly in hospital and keep them in for the shortest amount of time, we save a great deal of money.
Lord McColl of Dulwich
My Lords, on the subject of cost-effectiveness, does my noble friend agree that we are in the middle of the most serious epidemic to afflict this country for 100 years—namely the obesity epidemic? The cure is free: you just have to eat less. Why does the Department of Health insist that exercise is important in this equation?
Earl Howe
My Lords, the department takes its cue from NICE. I am sure that my noble friend will agree that exercise is never irrelevant to the question of obesity. I think that my noble friend's difficulty centres on how relevant it is in relation to reducing calorie intake. No doubt the debate on that will continue.
Baroness Pitkeathley
My Lords, does the noble Earl agree that no system of health, particularly with an ageing population, can be effective and efficient unless we also provide the best possible social care to link with it?
Earl Howe
I agree with the noble Baroness. One of the aims of our reforms is to integrate health and social care in a much more seamless way. There is another element to our reforms, which may have escaped noble Lords' notice. It is our wish to bear down on health inequalities in a much more systematic way than we have done hitherto. Both health and social care have a part to play in that.
Lord Tugendhat
My Lords, I declare an interest as chairman of the Imperial College Healthcare NHS Trust. Does my noble friend not agree that whenever an international organisation such as the OECD or the IMF has good words to say about the conduct of the British economy, the Chancellor of the Exchequer always welcomes them and uses them as an argument to support the Government’s economic policy? Would it not be helpful, when other organisations have good words to say about the NHS, for the Government to welcome them with equal fervour? Of course the NHS can improve and must modernise and move with the times; but when significant institutions such as the Commonwealth Fund in America, and the one that has just been quoted, have good words to say about the NHS, surely the Minister should be less carping.
Earl Howe
My Lords, in my opening words I said that we welcomed the report. I stressed that we fully acknowledge the improvements that have been made by the NHS over the past few years, which the report highlights. However, it is limited in its scope. The difficulty with all these reports is comparing like with like, particularly with different health systems. I am not decrying the work that went into the report, but I will say that perhaps some OECD reports take us closer to how well the UK's health system is performing in relation to those of other countries.
Baroness Williams of Crosby
My Lords, will the Government take a larger look at the scope and permanence of the NHS’s success in recent years? Does the Minister agree that a key factor is the share of GDP devoted to the NHS and the results that it produces? The NHS has consistently produced better results with a much lower share of GDP than some comparative health services, including that of the United States.
Earl Howe
My noble friend is right. There is also another measure that counts—not just the percentage share of GDP, but the absolute amount of money in the health budget that goes into our NHS. As she will know, the amounts of money have increased substantially over recent years. That produces a rather different ratio from the one in the report referred to in the Question.
Autism: Personal Independence Payments
(12 years, 8 months ago)
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Lord Touhig
To ask Her Majesty’s Government what impact the assessment criteria for personal independence payments are anticipated to have on the number of people with autism who will claim the allowance, compared with the number of those who claim disability living allowance.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, it is too early to identify what the impact of the personal independence payment will be, as we are still developing the new assessment criteria. We are determined that the personal independence payment will be fairer than the disability living allowance, taking better account of the impact of mental, cognitive and intellectual impairments. The inclusion of activities around communication, planning and following a journey will help assess the impact of autistic spectrum disorders on individuals’ lives.
Lord Touhig
I thank the Minister for his very helpful reply. Is he aware that the way in which the draft assessment criteria for the new personal independence payments are framed, coupled with the 20 per cent cut in spending and a focus on those with the greatest personal care needs, could mean that many people with autism will lose the lifeline currently provided by the existing disability living allowance? Will the Minister say how the Government will ensure that this vulnerable group of people will continue to get the much needed financial support required to give them a good quality of life?
Lord Freud
My Lords, first, I must reinforce the point which I know I have made in the Chamber before; when people talk about cuts, they mean cuts on projections. The actual payments are essentially being held flat in real terms. We have looked at the initial assessments and are currently revising them in the light of our experience and after speaking to many groups, including the National Autistic Society, in order to refine the assessment. We will publish that and our findings in the next couple of months.
Lord Wigley
My Lords, we will all have received numerous representations in the context of the Welfare Reform Bill, which is coming up, from people who are most concerned about the loss or potential loss of the disability living allowance. Will he give an assurance that when this Bill comes into Committee, the Government will seriously consider accepting amendments in order to try to safeguard some of these most vulnerable people and not steamroller the savings that they intend to get from this Bill at the expense of the most vulnerable in our society?
Lord Freud
My Lords, there is no intention of steamrollering people. In fact, one of the things about the personal independence payment is that it is designed to be far more effectively focused at the people who need support, particularly those with learning disabilities and so on. I can absolutely assure noble Lords right around the House that during the process of this Bill I will listen very carefully to people and that good ideas will be gratefully received.
Lord Addington
My Lords, can the Minister give us an assurance that when we go through any form of assessment or process, a great effort is made to get the right information about the individual conditional set of problems? Much of the historical problem here is the fact that if a person did not fit the particular slot or the interviewer did not have enough information, they did not have the freedom—or were not encouraged—to go and find out the best answer.
Lord Freud
My noble friend makes the very good point that there has been continual disappointment in that area of assessment. We are beginning to learn how to do that better. Professor Harrington, in the context of a different assessment—the WCA—is pointing us in the right direction in getting information and support for people when they are being assessed.
Lord Freud
My Lords, clearly this is a different assessment that measures different things. However, we are learning lessons from the WCA, and noble Lords will know that we are making considerable changes to it to make sure that it works as effectively as possible. We also expect to make sure that the personal independence payment is focused on the needs of the individual. The assessment is much more appropriate than the DLA assessment, which is, frankly, subjective and inconsistent and relies much too much on self-assessment.
Lord Kinnock
Would the Minister like to give further attention to the first reply he gave to my noble friend Lord Touhig to the effect that the cuts are cuts in projections and spending is flat? Does that take account of the fact that we now live with the reality of a 5 per cent inflation rate?
Lord Freud
Yes, my Lords. I made absolutely clear in that response that I was talking in real terms, so it takes account of inflation.
Lord McKenzie of Luton
My Lords, the Minister said that he is in listening mode with the Welfare Reform Bill and is eager to learn lessons. Can he tell me what lessons he will learn from today’s IFS report, which states that when the tax and benefit programme of this Government is analysed the poorest 30 per cent of people are bearing the brunt?
Lord Freud
My Lords, this is a serious recession, and the IFS emphasised how it will impact. One thing we will discuss as we go through the Welfare Reform Bill is the way in which we direct a lot of resource precisely to the poorest people. On a like-for-like basis, the universal credit injects something over £4 billion extra a year to the poorest people, against the current benefit system.
Company Remuneration Bill [HL]
(12 years, 8 months ago)
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London Olympic Games and Paralympic Games (Amendment) Bill
(12 years, 8 months ago)
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International Renewable Energy Agency (Legal Capacities) Order 2011
(12 years, 8 months ago)
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Lord Wallace of Saltaire
That the draft order laid before the House on 7 June be approved.
Relevant document: 23rd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 September.
Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2011
(12 years, 8 months ago)
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Lord De Mauley
That the draft order laid before the House on 4 July be approved.
Relevant document: 27th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 September.
Localism Bill
(12 years, 8 months ago)
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Lord Jenkin of Roding
Lord Jenkin of Roding
My Lords, the noble Lord, Lord McKenzie, has very kindly added his name to this amendment, tabled in my name. With this group of amendments, we turn to the subject of the mayoral development corporations in London.
Anybody with experience of development corporations, such as the London Docklands Development Corporation and other development corporations outside London, will recognise their hugely important role in urban regeneration in often very run-down areas. One essential characteristic that led to the success of these development corporations, not least the LDDC, was the provision that they had to be planning authorities and therefore had full authority over planning in their areas. In the 1980s this enabled my noble friend Lord Heseltine and my noble and learned friend Lord Howe of Aberavon to trigger what we must all agree has been the most amazing regeneration of what was then the almost derelict area of London docks. My role came later, as Secretary of State for the Environment, and with my late friend Nicholas Ridley, then Secretary of State for Transport, we were responsible for promoting both London City Airport and the Docklands Light Railway. These have transformed the Docklands area and indeed much of east London. Therefore, it is no surprise that the Mayor of London, Boris Johnson, supported by the Greater London Assembly, has persuaded the Government to include mayoral development corporations in the Bill. This is what Chapter 2 of Part 7 of the Bill is all about. As with all those who are concerned with the development and future of London, I warmly welcome most of this chapter but I have a few points to make.
I note in passing that the origin of this suggestion related to the Olympic legacy, for which these clauses will be of great value, but if it had been confined to the Olympic legacy, that would have made the Bill a hybrid bill. Therefore, the Government very wisely accepted that this proposal for development corporations in London should cover the whole of the area. Of course, they may not be confined to single boroughs, and indeed one of the attractions is that they could well cover an area that extends over more than one borough. The combination of this and the fact that they will be planning authorities in their own right has caused some anxieties on the part of the 33 London boroughs and the City of London. I remind the House that I have declared an interest at each stage that I am a joint president of London Councils.
There are two issues: first, whether the London boroughs should be represented on the mayoral development corporation boards, committees and sub-committees; secondly, what appears to be in the Bill an inadequate consultation of the boroughs on the formation and operation of a mayoral development corporation. I tabled the amendments in this group and I very much welcome the support of the Official Opposition in the name of the noble Lord, Lord McKenzie.
Lord McKenzie of Luton
My Lords, as the noble Lord, Lord Jenkin, has indicated, we are pleased to put our name to these amendments. We thank the Government for responding to at least one of the amendments, which means that the noble Lord will not have to introduce that one. The issues, as the noble Lord has explained, seem to be extremely straightforward and clear-cut. The consultation simply seeks for London boroughs parity with what happens to the London Assembly and for them not to have to go through the indirect route for the reasons that the noble Lord has explained and to make sure that there is fair representation. The Government have recognised that there should be representation for the boroughs on MDC boards. It seems a natural and reasonable extension to that that there should be representation on committees and sub-committees. Having said that, I fully support the amendments tabled by the noble Lord.
Lord Palmer of Childs Hill
My Lords, as regards the mayoral development areas, reference is made to consultation with a number of bodies, including the Greater London Authority or local councils. But consultation is different in the minds of different people. In local government, we have seen many consultations, the results of which have been ignored. It worries one that a London borough may be only one part of the decision-making process and may only be consulted.
In particular, the government amendment refers to local borough councils having a “relevant” interest if the mayoral development area in any way impinges on the area of that local borough. The boundaries of London boroughs do not fit neatly into developments. For example, the Brent Cross development, which was built more than 30 years ago, is expanding, with which I agree. It is right on the borders of the boroughs of Barnet, Camden, Brent and Harrow. It seems to me that when this situation arises in the future, “relevant” local authorities should be those that have an interest and are affected by the proposed mayoral development areas, and not only those where the mayoral development area would be situated within that local borough. I invite the Minister to consider whether the word “relevant” is correct in this case and whether adjoining local boroughs should also be in some way incorporated in this Bill.
Lord Campbell of Alloway
My Lords, I support my noble friend’s amendment as a requisite safeguard for the flexibility of the London boroughs; that is, flexibility being within their remit and for their discharge.
Lord True
My Lords, I declare an interest as leader of a London borough. I thank my noble friend the Minister for the moves that have been made to address some of the legitimate concerns put forward at the previous stage. Having said that, my noble friend Lord Jenkin of Roding eloquently put the case for further consideration of some of the minor details—some of which are not so minor—in clarifying how this will work. Rightly or wrongly, there is suspicion among leaders of London boroughs about the risk of the mayor imposing policies on areas of London. Further safeguards and assurances would be desirable in that respect.
The other brief point I wish to make is that, as my noble friend Lord Jenkin said, recourse to the London Assembly, with all great respect to that body, is not a fully local response. In the Bill we already have to contend with the fact that regional government is continuing in London and that the local element of the Bill is somewhat deficient in London. Geographically elected members of the London Assembly represent quite large areas—less local than London boroughs—and are less urgently concerned through wards with local affairs. The London Assembly Members who are elected under proportional systems do not have that kind of local connection.
I hope that my noble friend, in considering the amendment of the noble Lord, Lord Jenkin, will tell us that he will be able to consider further the noble Lord’s points before the next stage.
Earl Attlee
My Lords, this group of amendments addresses concerns raised about borough councils’ representation on an MDC’s board and committees. I am grateful for all noble Lord’s contributions. We have thought carefully about this and have tabled government amendments.
Amendment 97 would ensure that a borough council, including for this purpose the Common Council of the City of London, whose area forms part of an MDC, will have an automatic seat on the board by requiring that the mayor must exercise his power to appoint members to the MDC so as to secure that the members of an MDC include at least one elected member of each relevant council. Such appointments will still be subject to the same safeguards as other appointments. Amendment 99 would allow the mayor to remove a borough council member from an MDC’s board if that member ceases to be a borough member and the mayor wishes to appoint another member of that borough in the original member’s place. Amendment 102 is a consequential amendment to rules about the validity of proceedings and simply ensures that the absence of at least one elected member of each affected borough council will not affect the validity of an MDC’s proceedings.
Amendment 100 removes the stipulation that the majority of members of a committee or sub-committee of an MDC must be members of the MDC. These are significant concessions. My noble friends have suggested in Amendment 98 that one-sixth of the members must be from the boroughs, but that is not necessary. For example, with the proposed Olympic Park Legacy Corporation the four borough members would be likely to constitute rather more than one-sixth of the board. On that basis I ask my noble friends to withdraw their amendment. The House may recall the amendment the noble Baroness, Lady Grey-Thompson, tabled for Committee, which was not debated. That sought to provide that an MDC’s committees and sub-committees should not, as is currently the case, require a majority of MDC members. I am delighted to say that we have brought forward Amendment 100, which secures the aims of the noble Baroness.
Amendment 101, tabled by my noble friend Lord Jenkin of Roding and the noble Lord, Lord McKenzie, also relates to membership of committees and sub-committees but seeks to prescribe membership. It states that there should be at least one elected borough representative on both committees and sub-committees from those boroughs whose areas are affected by a designated mayoral development area, and, where those committees are concerned with planning, that at least half of the membership should comprise representatives from affected boroughs. I hope the House will agree that the existing provisions regarding committees and sub-committees, bolstered by Amendment 100, will give an MDC maximum flexibility over the make-up of its committees and sub-committees. I hope that deals with the point raised by my noble friend Lord Campbell of Alloway. For example, an MDC will be able to appoint one or more relevant borough council members to its planning committee and, should it wish to do so, have a majority of non-MDC members on that committee.
I turn now to Amendments 96 and 103 which address a borough’s comments on, first, the proposed designation of a mayoral development area and, secondly, designation of an MPC as the local planning authority. It is clearly right that an affected borough council must be consulted on both these issues, just as it is right to offer the opportunity to the London Assembly, relevant Members of the other place and other statutory consultees as the Bill provides. It is also the case that the mayor will be obliged to consult affected borough councils and other statutory consultees were he to propose that an MDC should offer business rate discounts. The Bill provides that, should comments be made by the London Assembly and the mayor not accept those comments, he is obliged to publish a statement giving reasons for that non-acceptance. Amendments 96 and 103 would extend that requirement to comments of the borough councils. However, there is no need to do this. As I have said, an affected borough council must be consulted by the mayor, so it could make its views known to him by that route. But a borough council could also make representations to its London Assembly constituency member who, in turn, could feed those views to the Assembly as a whole, as a result of which the Assembly could, if it wished, relay those representations and any of its own to the mayor. I suggest that this is a sufficient level of scrutiny.
I would ask noble Lords to withdraw their amendments and accept Amendments 97, 99, 100 and 102 in their place.
Lord Jenkin of Roding
My Lords, I am grateful for the care with which my noble friend has replied to the amendments, but I have to say that I am concerned at what he said towards the end of his remarks about the London boroughs having to put their views to Assembly members who, in turn, will put them to the mayor. That is not a proper or, indeed, a dignified treatment of independent elected authorities which have made substantial comments on the mayor’s plans. I really am quite disappointed about that.
I understand the point made by my noble friend on the question of representation, and in particular on the question of numbers. What we are asking for is that they should at least have representation on committees and sub-committees, but all my noble friend has been able to say so far is that it would give maximum flexibility if this were not in the Bill because there is nothing to prevent the mayor making sure that there are such representatives. However, it does not oblige him to do so; the Bill merely says that this can be done. So I have to say that I am a bit disappointed.
I hope that my noble friend will be prepared to look at this again between now and Third Reading. I have to tell him that the boroughs feel strongly about the issue, and I am grateful to my noble friends Lord True and Lord Palmer of Childs Hill for what they said on the issue. The boroughs are concerned because while at the moment no other mayoral development corporations are planned beyond the Olympic Park Legacy Corporation, there will be, so we need to guard against the possibility of there being a serious conflict of interest, and the Bill ought to provide a proper machinery for dealing with that. I hope that I have convinced the House that this is the not the case at the moment.
Obviously I am not going to divide the House, but it does seem to me that I am entitled to ask my noble friend to have another look at this between now and Third Reading, which we shall not have for some weeks yet so there is plenty of time. I beg leave to withdraw the amendment.
Baroness Hanham
“(1A) The Mayor must, subject to sub-paragraph (3), exercise the Mayor’s power under sub-paragraph (1) so as to secure that the members of an MDC include at least one elected member of each relevant London council.
(1B) For the purposes of this Schedule—
(a) “London council” means a London borough council or the Common Council of the City of London, and(b) a London council is “relevant” in relation to an MDC if any part of the MDC’s area is within the council’s area.”
Baroness Hanham
“(ca) the member has since being appointed ceased to be an elected member of a relevant London council and the Mayor wishes to appoint an elected member of that council to be a member of the MDC in the member’s place,”
Baroness Hanham
“(ba) its members not including at least one elected member of each relevant London council,”
Lord Taylor of Holbeach
“Local Authorities (Goods and Services) Act 1970 (c. 39)1A In section 1(4) of the Local Authorities (Goods and Services Act) 1970 (supply of goods and services by local authorities: interpretation) in the definition of “local authority” after “(joint waste authorities)” insert “, a Mayoral development corporation”.”
Lord Taylor of Holbeach
My Lords, I shall begin by speaking to government Amendment 107, which is also in the group.
The government amendment seeks to enable the greatest sharing of back-office services across the GLA group. The mayor has an ambitious shared services programme for the GLA group utilising existing powers under the Greater London Authority Act 1999, which enables the GLA and its functional bodies to share administrative, professional and technical services with each other.
We are conscious that there are several legislative gaps in the existing legislation, with a number of bodies in the GLA’s ambit not covered, potentially restricting further opportunities for savings and efficiencies. That is why, following discussions with the mayor, we introduce the new amendment as part of the London reform package to extend the powers to three further statutory entities; namely, the Commissioner for the Metropolitan Police, the London Transport Users’ Committee and the London Pensions Fund Authority.
The amendment also gives the Secretary of State the power to add other persons or bodies performing public functions in London, other than wholly national bodies, to the list of entities covered by Section 401A, following consultation with the relevant person or body. This will allow the inclusion of unique bodies such as the Lee Valley Regional Park Authority or the Museum of London, if there is an appetite in London for their inclusion. We will be discussing further the extent of any order with the GLA, the boroughs and other relevant partners over the autumn.
Finally, Amendment 104 amends Schedule 22 to classify a mayoral development corporation as a local authority for the purposes of the Local Authorities (Goods and Services) Act 1970. This will allow a mayoral development corporation to share administrative services and supply goods to local authorities on the same basis as other functional bodies, again in support of the mayor’s shared service agenda. I therefore beg to move.
Lord Berkeley
My Lords, this is a very interesting pair of amendments. Proposed new paragraph (d) in Amendment 107 is about the London Transport Users’ Committee, which the Minister will be aware that Amendment 108 seeks to merge more closely into the GLA. If Amendment 108 is not carried—and I will certainly oppose it if I can be in the Chamber at the time—who decides whether these administrative sharing arrangements take place? If the London Transport Users’ Committee remains as it is, who decides whether it should merge its administration? Can they resist a request to share or is it a matter of negotiation?
Lord McKenzie of Luton
My Lords, it seems to me that the concept of sharing back-office and administrative services is entirely reasonable and I can see the benefits that might flow from that. My noble friend raises an interesting question as to how it works and whether there is a discussion or an imposition when new bodies are brought in. I suppose I am a little surprised that there are not the general powers already available for the sharing of these functions but I support the thrust of this.
Lord Taylor of Holbeach
I assure the noble Lord that we would not be tabling amendments if the power were already in existence—no, it does not exist, which is perhaps surprising to noble Lords, but I hope that with the consent of the House it will in future. I thank the noble Lord, Lord Berkeley, for his question and I reassure him that any decision on these fronts has to be mutually agreed. This is really designed to be of advantage to both parties and for the people of London.
Independent Commission on Banking
(12 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, I shall now repeat a Statement that has been made in another place by my right honourable friend the Chancellor of the Exchequer. The Statement is as follows:
“Mr Speaker, I should like to make a Statement on the final report of the Independent Commission on Banking. The report is an impressive piece of work—broad in scope, incisive in its analysis and clear in its recommendations. The commission has done what we asked it to do. It has come up with an answer to the question of how Britain can be the home of successful international banks that lend to families and businesses without exposing British taxpayers to the massive costs of those banks failing. Frankly, it is a question that should have been asked and answered a decade ago.
We should all thank Sir John Vickers and the other members of the commission—Clare Spottiswoode, Martin Taylor, Bill Winters and Martin Wolf—for a job well done. But this commission and this report have not come about by accident. It was set up by this coalition Government to learn the lessons of what went so catastrophically wrong: a decade long debt-fuelled boom that ended in a dramatic financial crisis, a deep recession and a debt overhang that is still holding back our economy; a regulatory system that totally failed to spot enormous imbalances building up and proved incapable of dealing with the crisis when it first broke; and, most importantly in the context of this report, huge global banks that turned out to be “too big to fail”, so that taxpayers were called upon for many billions of pounds in order to prevent a financial meltdown. We still do not know, and may not know for many years, how much of that money will ever be recovered, despite irresponsible promises made at the time that not a penny would be lost.
We are fundamentally changing the system of regulation and tackling the debts but this bailout for banks is the element of the crisis that has, justifiably, caused the most anger. It is an affront both to fairness and to the very principles of a market economy. It is not available to any other sector of the economy, and nor should it be. It breaks the principle that those who take risks should face the consequences of their actions and, as a result, it played an important role in encouraging the excessive risk taking that caused this crisis.
Of course, taxpayer bailouts did not only happen in this country. An international regulatory response to the crisis is now emerging, with the new Basel rules and the anticipated new additional requirements for systemic banks, but here in Britain we cannot rely only on the international reform process to make our banking system safe. The scale of the challenge we face and the risk for our taxpayers is on a different scale from most other countries.
The balance sheet of our banking system is close to 500 per cent of our GDP, compared to just over 100 per cent in the US and around 300 per cent in Germany and France. Only Iceland, Ireland and Switzerland had larger banking systems relative to their GDP, and they have now all taken action that goes well beyond new international standards. As the report says,
‘part of the challenge for reform is to reconcile the UK’s position as an international financial centre with stable banking’.
This is what I have called ‘the British dilemma’—how to remain a successful global centre of finance without asking taxpayers to bear unacceptable risks or put the broader economy at risk. We set up the Banking Commission to help us solve the British dilemma. Let me set out its recommendations and how we propose to respond.
The first proposal is the introduction of a ring-fence around retail banking. The Government have welcomed this recommendation in principle. As the report says,
‘the objective of such a ring-fence would be to isolate those banking activities where continuous provision of service is vital to the economy and to a bank’s customers’.
In other words, the provision of key domestic retail banking services, such as taking deposits from individuals and small businesses or providing them with overdrafts. The central benefit of a ring-fence is not to end large universal banking groups but to make them more easily resolvable in a crisis. The costs should fall on shareholders and the wholesale debt holders, not small depositors or taxpayers. A successful ring-fence will be able to ensure the continuation of vital payment services that are crucial to preventing an economic collapse. This directly addresses the perceived implicit taxpayer guarantee which is at the heart of the too-big-to-fail problem.
The commission has also proposed a more flexible ring-fence. In terms of its scope, it says that,
‘domestic retail banking services should be inside the ring fence, global wholesale/investment banking should be outside, and the provision of straightforward banking services to large domestic non-financial companies can be in or out’.
Many will see this as sensible and it will reduce inefficiencies resulting from any mismatch between customer deposits and business lending within an individual bank.
On the strength—or height, if you like—of the ring-fence, it recommends that the retail subsidiary should have what it calls ‘economic independence’. In other words, it should meet regulatory requirements on a stand-alone basis and its relationships with other parts of the group should be arm’s length and regulated in the same way as relationships with third parties. A great deal of detailed work will now be required to see how that principle can be put into practice.
Secondly, the commission has also made important recommendations to ensure that banks have bigger cushions to withstand losses. These are that the large retail ring-fenced banks should have equity capital of at least 10 per cent. It also recommends that retail and other activities of large UK banking groups should have primary loss-absorbing capacity of at least 17 per cent to 20 per cent, including long-term debt that can be written off, so that, unlike last time, both shareholders and bondholders bear losses, not the taxpayer. Within this, it recommends some regulatory discretion about the composition of this loss-absorbing capacity. Again, many will see that as sensible.
Thirdly, the commission recommends the introduction of depositor preference. I repeat again that the Financial Services Compensation Scheme covers 100 per cent of eligible deposits up to the new European limit of €100,000. The depositor preference proposals would bolster this scheme by ensuring that other bank creditors are subject to losses first when a bank goes bust, minimising the cost to the FSCS and ultimately to the taxpayer.
The fourth set of recommendations relates to competition in the banking sector. They have not got as much attention as the other recommendations, but they are as important to families and businesses. I agree with the commission that the best way to ensure a reliable and affordable supply of lending to our families and businesses is through competition. The collapse of banks such as Bradford & Bingley and the merger of Lloyds and HBOS, welcomed by the previous Government, mean that there is too little competition and switching bank accounts remains difficult. I welcome the recommendations to change this. On the divestment of the Lloyds branches, the commission has said that the key test should be the emergence of a strong and effective new challenger bank. I agree that that would be very much in our country’s interest.
Those are the recommendations. Let me now turn to the implications for the wider economy, the implications for Britain as a global financial centre and the timetable for the Government’s response. The report is clear that the right solution, implemented properly and to the right timetable, will help our economy, not hinder it. Let us remember that the mistakes made by poorly regulated banks ended up costing the economy many many billions of pounds. The commission notes that some of its recommendations could reduce the profitability of some banks’ investment banking operations. That is largely because we would be removing the subsidy that comes from any perceived implicit taxpayer guarantee. We should not confuse the interests of bank shareholders with those of British taxpayers. It is also critical that reforms of this kind do not lead to a worsening of credit conditions in the economy. Indeed, Vickers says:
‘Banks with more robust capital, together with the creation of the ring-fence, would provide a secure and stable framework for the supply of credit to businesses and households in the UK economy’.
Indeed, the commission believes that its proposals could help to rebuild the culture of relationship banking that has been so sadly lost over the past decade and would help banks understand the credit needs of their customers better.
Let me turn to the UK’s role as a global centre for finance and banking. I will be very clear. This Government want Britain and the City of London to be the pre-eminent global centre for banking and finance. We want universal banks headquartered here, with all the advantages that that brings. The Vickers report explicitly addresses this issue, and for those investment banks with credible recovery plans, it has not recommended higher equity requirements than those agreed at an international level. This would mean that the global investment banking operations of UK banks can continue to be as competitive as any in the world. We will continue as a Government to keep the City as a whole internationally competitive, as was clear last week when we welcomed, with the Chinese Government, the development of the offshore renminbi market in London.
Let me end by explaining to the House how we will now take forward the commission’s report. We welcome the recommendations in principle. They would require far-reaching and complex changes. John Vickers is the first to say that they cannot be delivered overnight. The detailed work will start immediately. We will consult on the costs and benefits of the most appropriate way to implement these changes. We will provide a response by the end of this year, so that there is no uncertainty hanging over the industry.
We will legislate in this Parliament to put the needed changes into law. We will consider which changes can be in the existing Financial Services Bill and which will need a new Bill, and we will discuss these changes with international partners to ensure consistency with international agreements and EU law. We will follow the advice of the independent commission and ensure that any changes to the British banking system are fully completed by 2019. This is a sensible timetable that fits with the international regime. As Vickers himself said this morning,
‘short-termism got us into this mess and we need long-termism to build a more stable system for the future’.
The question of how Britain can be the home of successful, global banks that lend to British families and businesses but do not have to be bailed out by British taxpayers should have been answered a decade ago, but it was not even asked—and that failure means this country is still paying the price for that failure. Billions of pounds have been spent and hundreds of thousands of jobs have been lost as a result. It is this Government who set up the banking commission—not just to ask the questions but to provide the answers. Today represents a decisive moment when we take a step to a new banking system that works for Britain. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Davies of Oldham
My Lords, I am grateful to the Minister for repeating the Statement made in another place earlier this afternoon. Of course, we are grateful to all who contributed to the Vickers report, particularly the chairman. After all, this is probably the most important report to come before this Government during their time in office. Therefore, it is important that we recognise the points that the Minister made about the time necessary for full consideration of the important issues involved. However, if we have a clear anxiety about the Government’s response—I recognise that it is an initial response at this stage—it concerns whether it has the urgency which the nation demands. The report proposes significant reforms to an industry that contributed substantially to a huge rise in job losses and caused great uncertainty among our fellow citizens. Hundreds of thousands are seeing their living standards decline. At the root of this is the catastrophe in the financial sector that we have lived through.
Of course, the report is concerned with the UK position, UK banks and the United Kingdom Government’s response and contribution to finding a solution. However, I hope that the Minister will give greater reassurance as regards the urgency of taking the earliest possible action. I am not clear why the Government have not indicated that they look upon the financial legislation before both Houses as a vehicle for at least establishing a basic framework of the response. That would at least translate fine words into early and clear action. That is the very least that we can ask of the Government in response to a situation which has been so catastrophic for our nation.
My second point, in somewhat lower key, concerns the international dimension. Of course, we are concerned about United Kingdom legislation but it is important that the Government, particularly the Chancellor, should recognise that the solution to the financial problems which face banking in this country has to be consonant with the solutions which are put forward and engaged in by all the major economies in the world. That is why it is so important that the Chancellor should recognise the international role which he has to play in respect of the reform of the world’s financial provisions, particularly regulation.
Thirdly, I hope that the Minister will not dwell too much on the past.
Lord Davies of Oldham
We all recognise that the catastrophe which occurred in 2008 was enormously detrimental to the welfare of this country. However, I hope the noble Lord will recognise that it occurred not just in this country but constituted an international financial failure. Regulation failed in the United States of America and other countries. That international dimension is crucial to finding a solution. If the Minister merely looks on this as an opportunity for point scoring and berating the previous Government, that would ill fit the present situation and the problems that we all face, to say nothing of the fact that he would have to quote chapter and verse those senior Conservative politicians who, during the build up to the events of 2007-08, warned of the impending difficulties and demanded tighter and more effective regulation of the City. If evidence of that kind emerges at any stage, I for one would be glad to see it. However, I would be amazed if it existed.
Today’s Statement provides an opportunity to give a brief response to a fundamentally important problem. I am keeping my remarks brief confident in the fact that we shall have another opportunity to debate this matter on Thursday of this week. I hope the Government and the Minister appreciate that we shall have a greater opportunity to deploy our arguments in that debate after we have fully examined the Vickers report and the Government’s initial response to it. I look forward to that debate, as I am sure does the Minister.
Lord Sassoon
My Lords, I was never a boxer, so I have never understood the concept of leading with the chin, but I really think that we have seen the noble Lord, Lord Davies of Oldham, doing exactly that this afternoon. I am pleased that he recognises the importance of this report; but how he has nerve to stand up and tell this Government that we should be addressing the report with urgency, I simply do not know. I do not want to make cheap points this afternoon when there are much more important things to say.
Lord Sassoon
Well, should I or not? Perhaps I will. This is important because it exemplifies what this Government are doing and what the previous Government did not do. There were 18 months between the collapse of Lehman Brothers and the general election in which work such as that which we commissioned could have been commissioned by the previous Government. There were two and a half years after the appalling events following the collapse of Northern Rock in which the previous Government could have looked at the structure of banking, but they did nothing. There were more than 10 years in which they presided over the debt-fuelled boom that led to this disaster that we are now mopping up. So I really do not think that we need lectures about urgency on the follow-up. We are taking the timetable suggested by the independent commission, and that will be our guide.
I apologise if my droning on with a 2,000-word Statement means that not every sentence or paragraph can be picked up. However, as the noble Lord asked about the use of the existing Financial Services Bill and the international dimension, I remind him that both points are addressed in the same paragraph of my right honourable friend’s Statement, which I will read out again:
“We will consider which changes can be in the existing Financial Services Bill and which will need a new Bill, and we will discuss these changes with international partners to ensure consistency with international agreements and EU law”.
So I completely agree with the noble Lord, Lord Davies of Oldham, on these two points, which is why my right honourable friend has addressed them in his Statement. I look forward to any more constructive thoughts that he and his noble friends may be able to come up with as we go forward discussing these very important matters.
Lord Newby
My Lords, on these Benches we welcome the report and the Government’s response to it. We also welcome the degree of urgency with which the noble Lord, Lord Davies of Oldham, wishes the report to be implemented, not least because some of us had to put up with withering scorn from the Labour Benches during the previous Parliament when we suggested exactly the proposals that are now in this report.
The report says that while the full implementation of the proposals might take a number of years, there is much to be gained by moving quickly to set the framework in place so that the banks know what they are up against. The Minister has already mentioned that the Government will look at the extent to which the financial services Bill might be a vehicle for doing that. As we now have a Joint Select Committee on the Bill, of which I have the privilege to be a member under the chairmanship of Peter Lilley MP, would he accept that this offers Parliament a golden opportunity to take evidence quickly on the principal issues that the Vickers report raises and to move with some determination? I am sure that the vast bulk of rule-making that will be required to implement this series of proposals will not need primary legislation but will need FSA regulation or secondary regulation, and that the legislative framework in primary legislation should be relatively short and straightforward.
Lord Sassoon
I am very grateful to my noble friend. We will work as hard and as fast as we can now to take forward consideration of the detail. As I have stressed, we have accepted the recommendations of the report in principle, but there is a lot of potential devil in the detail and we need to do a full cost-benefit assessment. Indeed, we need to work through what would be appropriate to introduce into the financial services Bill and what would need a stand-alone Bill. I have no idea how the committee may want to proceed, but it now has the Vickers report in front of it and we will get on with sorting out all these issues as quickly as possible. However, we should not underestimate the amount of work for officials and the amount of consultation needed to get the detail right.
Lord Barnett
I welcome the Statement and I note that, in its recommendations, the commission talked about the short-term report being dealt with as soon as possible, although it would take until 2019 to deal with the full action that needs to be taken. I would like to clarify this with the noble Lord. He talked about some of the points and he repeated part of the long Statement about what will happen, but could he clarify how soon he expects the banks to be in a position to do the kind of reform recommended in this report, which is so strongly supported by the Chancellor? Is not the real current danger that, if the eurozone banks collapse, as, regretfully, seems all too likely—recently the Chancellor said that that would not just be disastrous for Europe but for us as well—we could be bailing out banks long before 2019, whether we are in the eurozone or not and we may have to bail some out in the very near future? How would that fit in with the reform in the short term that will enable the actions which are strongly recommended by the report to be carried out?
Lord Sassoon
I am grateful to the noble Lord, Lord Barnett, for welcoming the Statement. Clearly, there is a series of different sorts of recommendations in the report. Some of them relate to ring-fencing and the adequacy of capital, where the date of 2019 fits in with the move to implementation of Basel III. So there is a clear logic for making sure that the construct that we are putting in place here is targeted at the same date as the related international recommendations in the same area. On the other hand, of course there are recommendations in areas such as competition, connected, for example, with the ongoing disposal of Lloyds branches, where the timetable is rather different and where the commission, quite rightly, is looking to see action on a shorter timescale. We need to look at the pacing of some of the reforms in relation to 2019, that being the date of Basel III implementation, and others in relation to the individual merits of the case. That is the approach we will take.
Lord Higgins
This is certainly a massive and comprehensive report which is rightly welcomed by the Government. I have two questions. First, there is certainly a point of view which says that the right answer is to have complete separation of investment and retail banking. The commission has not come down in favour of that but in favour of ring-fencing. The danger is that there are loopholes in the ring-fence. Could my noble friend say in what circumstances resources might flow from one side of the ring-fence to the other, thereby continuing, albeit perhaps in a more limited form, the dangers which arise if there is a degree of connection between investment and retail banking?
Secondly, as far as timing is concerned, I understand the point my noble friend is making about Basel. However, it has also been suggested that, given the state of the economy, it would be dangerous to implement these changes too quickly, because it would inhibit the continued recovery. Would my noble friend agree that it is right to review that aspect of timing as we go along, and not set in concrete the idea that we should wait until 2019 before going ahead with the ring-fencing proposals?
Lord Sassoon
My Lords, I regret that I may fail to satisfy my noble friend Lord Higgins in my answers. On his first point about the design of the ring-fence, and whether there are loopholes, the commission has been quite clear in relation to one or two major structural elements of the ring-fence. It has recommended that discretion should be allowed to the banks as to whether the lending business to large industrial companies should be on one side of it or the other. That will be the first of a number of detailed issues that need to be looked at in the design work. I would not wish to pre-empt that work, other than noting that my noble friend’s question of loopholes and how they might come about will be, I am sure, very much in the minds of those doing the detailed work.
On the speed of implementation, I do think it is important—as it was with the Basel III work, and the European directive that flows with it—that the banking industry, taxpayers and all those who deal with the banks have a clear understanding of what the end position will be. There is a separate question as to what the appropriate implementation timetable will be. I am sure that the commissioners thought very carefully about this when they put forward the date of 2019. I repeat that—as my noble friend will know—it is the same date as the Basel implementation. I am sure they thought about that very hard.
Lord Forsyth of Drumlean
My Lords, I draw the House’s attention to my entry on the register as a director of MBNK, which is seeking to establish a new bank.
I congratulate my noble friend and the Chancellor on the way in which they have gripped this difficult subject, by appointing the Vickers commission, which has done an outstanding job. Some of us may not agree with all of the report, but it is a careful and sensible analysis. Some people have argued that this will damage the competitiveness of the City of London, but does my noble friend not agree that the City of London will benefit from having certainty? The fact that the Chancellor has the courage to take this on will help with the process and help our competitiveness.
I suggest that if my noble friend is thinking of giving a Christmas present to the noble Lord, Lord Davies of Oldham, he might buy him a copy of the right honourable Alistair Darling’s memoirs, in which he will find why it is not a good idea to look to the previous Government’s behaviour in this area. May I remind the House that it was the previous Government who gave Sir Fred Goodwin his knighthood for services to banking?
Lord Sassoon
I am very grateful to my noble friend Lord Forsyth for welcoming this report. It is a fine piece of work that has been done under a lot of time pressure. The commissioners have developed the analysis very considerably from their interim report, and I share my noble friend’s conclusion that by coming out now with these reforms to strengthen our banking system, we will place our banks and the City of London in an even better position to compete globally, as the Government want them to be able to do.
Lord Elystan-Morgan
My Lords, I appreciate that it is wholly necessary that there should be an effective firewall between retail and wholesale banking, and that the detail of that remains to be determined. However, perhaps the Minister will accept that the seriousness of the situation is illustrated in this way. Section 6 of the Theft Act 1968 defines theft as occurring in circumstances where a person uses the property of another as if that property were his to dispose of, irrespective of the rights of the other. In that way, the revelations of 2008 show quite clearly that in many instances there was moral theft, if not actual legal left.
Lord Sassoon
I am certainly no lawyer, so whether there was legal theft I will leave to lawyers to sort out. On the question of moral theft, I look to the Bishops’ Benches for guidance. The noble Lord makes the serious point that these events were deeply shocking and needed the sort of serious response that the Government and the commission have given. That is why we will drive through the recommendations that we accepted in principle today.
Baroness Ford
My Lords, I have a slight disagreement with the noble Lord, Lord Higgins. I particularly welcome the flexibility around the ring-fence, which is a very intelligent response to the dilemma of separation that clearly reflects the reality of modern Treasury management. That is greatly to be welcomed. However, given that a huge component of the problems that we have experienced concerns the misallocation and mispricing of risk, and the failure of regulation, will the Minister say whether, in line with the changes that the commission set out today and that Basel III will introduce, the Government have any proposals for further strengthening the regulatory framework in this country? Banking systems in other countries such as Canada did not fail. I declare an interest: I worked for a Canadian bank in that period. One of the distinguishing features of the Canadian system was the strength of regulation. Are there any plans for further strengthening the regulatory framework in this country?
Lord Sassoon
I am grateful to the noble Baroness for pointing out the good sense with which the commission addressed the question of the ring-fence. Clearly it has thought about the arguments that have been put over recent months. In respect of the failure of regulation, on which I completely agree with her, the overhaul of the regulatory structure, which is coming forward in the financial services Bill, is very significant. It puts the primary responsibility for looking at the risk in the entire system where it ought to be: that is, with the central bank. That is a fundamental change. The new Financial Policy Committee of the Bank of England is up in effective shadow mode, ahead of the legislation going through. It is able to address—and is addressing—risk issues as we speak, and I am sure that it will take note of whether there is anything further in the report that it ought to pick up on.
Baroness Kramer
My Lords, I join others in welcoming the Government’s enthusiastic acceptance of the report, and particularly of ring-fencing, which is much harder to erode than changes in regulation. However, I am sure that the Minister will agree that those who have suffered the most from the failure of the banks and the depth of the economic crisis that followed have been among the most vulnerable and disadvantaged, along with the smallest businesses. Would he be willing, as he looks to introduce a new bank that will provide more high street competition, to encourage banking services that will address the micro and the very small business, and which will reach out to the economically disadvantaged, who currently get a basic bank account offered with ill grace and very few services?
Lord Sassoon
I am grateful to my noble friend Lady Kramer for bringing us back to one of the constituencies most affected by the state of our banking system. That is why I welcome the discussion in the report about issues concerning the ability of individuals to switch accounts. There are important recommendations about the Lloyds Bank disposals, which make the point that this is not just a numbers game, of counting the branches that must be disposed of, but about creating another competitor out there. Therefore the report addresses critical aspects of the challenges that she poses, but in addition—whether it is looking at mutual models, credit unions or all the other aspects of a rich and varied banking system—there are significant other channels which the Government continue to address.
Lord Flight
My Lords, I draw attention to my entry in the register indicating that I am a director of Metro Bank, one of the new banks.
I would like to make three points while generally welcoming the recommendations. First, I remember over 10 years ago, following what I believed then to be the mistaken collapse of Barings, talking to the then Governor of the Bank of England about changes to the lender-of-last-resort doctrine, which had stood this country’s banking system in very good order for nearly 100 years. It changed by it being said that it was available only to larger banks, walking straight into the moral hazard problem whereby very large banks were of the belief that they could not be allowed to fail, which was the case, and smaller banks were not able—if there were a banking run—to get lender-of-last-resort support. That is why a whole lot of them wound up. It is very important in achieving competition that, broadly, the lender-of-last-resort doctrine is restored to what it was.
Secondly, I am slightly worried that increasing banks’ capital may be brought forward too quickly. I draw noble Lords’ attention to the very convincing writings of Professor Tim Congdon to the effect that if we increase capital requirements very speedily, we will end up shrinking the money supply, which is the last thing we want to do when the country is trying to struggle its way out of recession.
Finally, one banking system, Lebanon’s, escaped all the problems because the governor of the central bank of Lebanon had the wisdom to spot what was coming, to warn the banks and to keep them out of it. There is nothing more important than having a really good central bank governor who actually knows what is going on and blows the whistle in good time.
Lord Sassoon
All I can say is that my noble friend Lord Flight makes three important and interesting observations which we need to dwell on as we take all this work forward.
Baroness Noakes
I declare my interest, as recorded in the register, in particular as a director of the Royal Bank of Scotland, although my views are and always have been entirely my own.
My noble friend the Minister will be aware that there remain concerns, not least from organisations such as the CBI, about the impact of these proposals on the availability and cost of lending to smaller businesses. There are also concerns about the impact of the proposals on the strength of our financial services industry, which is and will remain a significant contributor to the economy. I therefore welcome the emphasis in my right honourable friend the Chancellor’s statement on cost-benefit analysis being carried out before implementation. Will my noble friend say a little more about when this cost-benefit analysis will be undertaken?
Lord Sassoon
I am grateful to my noble friend Lady Noakes. We will get on with all the consideration of the detailed recommendations and the cost-benefit analysis as soon as possible. I cannot be more specific than that, but as my right honourable friend said, it may be that some things can be brought forward for the financial services Bill, which is an indication of the speed with which we will go at this.
Localism Bill
(12 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:03 - Division on Amendment 109B - Ayes: 137 / Noes: 220 - Amendment 109B disagreed.
Lord Taylor of Holbeach
“(3A) Before making or varying a delegation under subsection (1) above, a Minister of the Crown must consult—
(a) each London borough council,(b) the Common Council, and(c) the Assembly.”
Lord Taylor of Holbeach
My Lords, Ministers already have the power to delegate functions to the mayor and the London Development Agency under the Regional Development Agencies Act 1998. We believe that it is right that Ministers continue to have such a power once the LDA is abolished. Through the London reforms in this Bill, the GLA will be gaining significant new powers and responsibilities, including activities from the LDA, enabling London itself to meet the strategic challenges facing the capital.
There may be instances in future where it makes sense for the mayor to play an active role in the delivery of national programmes, through a power of delegation, to ensure that these programmes can be better tailored to London’s specific circumstances. However, we are conscious of the concerns expressed in the other place about this power and the risk that it could marginalise the role of London boroughs, and of the amendments tabled in Committee by my noble friends Lord True and Lord Jenkin, which we did not have time to discuss. In response to these concerns, we are proposing through government Amendment 105 to require a Minister to consult London boroughs and the London Assembly before the use of this power to delegate functions. This will ensure an opportunity for debate and dialogue within London about the appropriateness of any proposed delegation of a ministerial function to the mayor prior to the delegation being made.
Amendment 106, which was tabled by my noble friend Lord True, would go further than this by requiring a Minister to consult boroughs specifically about whether the function could be more appropriately and effectively conducted at a more local level and then to lay a Statement before Parliament if boroughs believe that they are better placed than the mayor to undertake the function. While I fully understand my noble friend’s reasoning, I do not believe that such detailed stipulation is necessary. It should be readily apparent from the statutory consultation whether boroughs have concerns about the mayor exercising a function that they are better placed to undertake. If the function was of sufficient importance, one could see Members of both Houses wanting to raise the issue with the relevant Minister.
I reassure my noble friend that this Government have striven to ensure broad consensus between the mayor, the Assembly and the boroughs about the future direction of London’s governance and, if I may say so, it is exemplified by the reforms in this Bill. We will continue to do so in future. It is vital that both tiers of London government—the GLA and the boroughs—fully accept each other’s democratic mandate and remit and that there is consensus about any use of this power. I therefore ask my noble friend not to move his Amendment 106 in favour of the Government’s Amendment 105, which I beg to move.
Lord True
My Lords, as the Minister said, I have Amendment 106 in this group. I listened very carefully to what he said and I have had the opportunity of talking about this matter with my noble friend Lady Hanham. None the less, I must press him a little because, as he acknowledged in his remarks, we discussed the matter contained in this amendment earlier today: it is the localist deficit that remains in London as a result of this legislation. I of course acknowledge the good relations between the mayor, the boroughs and the other London institutions, but these good relations are not fixed for all time. My amendment addresses future arrangements and future occasions on which the Government may decide that they wish to delegate functions. I believe that, where possible, a truly localist Government would wish to delegate those functions to the most local level practical and in London, in many cases, that will be London boroughs, although we have heard many times in these debates that Ministers would like powers to be delegated even below the level of boroughs and principal authorities.
Lord Beecham
My Lords, I hesitate to trespass on to the territory of the capital but I have a good deal of sympathy with the points made by the noble Lord, Lord True. He argues powerfully for greater involvement by the London boroughs and for procedure that would facilitate that and indeed put the onus on the Government to prove their case in terms of delegation.
However, another aspect should be taken into account. The amendment speaks of a requirement to consult,
“each London borough council … the Common Council, and … the Assembly”.
There is, of course, a cross-London body of councils, London Councils. In addition to the individual approaches, which obviously make sense, I would have thought it would be useful for London Councils to express a view as an organisation. The noble Lord is nodding his assent to that. Obviously it would be possible to garner the views of the 30-odd London boroughs, but seeking the view of London Councils itself might facilitate a better dialogue across the capital and, I hope, influence the outcome in directions that might not otherwise arise through separate consultations and responses. I wonder whether, if nothing else is done, London Councils could be added to the list of three given in Amendment 105.
Lord Jenkin of Roding
My Lords, I would like to respond to that briefly. London Councils has made it very clear from the beginning of this Bill that it has been unhappy with the extent to which the regional authority in London—namely, the mayor and the London Assembly—seems to have been more successful in securing powers and opportunities than have London boroughs. Maybe that is their fault, but the fact of the matter is that the point made by my noble friend Lord True is shared by London boroughs as a whole. There needs to be a better balance between the mayor and the boroughs on these sorts of matters. As I have said before, the boroughs are responsible elected authorities and deserve to have a proper consideration on these matters. I hope that the Minister will feel able to give further consideration to this point. Here is another case where the mayor’s lobbying seems to have been more effective than that of the London boroughs. I am not sure whether that is right or justified, but that seems to be what has happened.
Lord McKenzie of Luton
My Lords, as we have heard, the government amendment requires consultation before there is any delegation or variation of a delegation of ministerial powers to the Mayor of London. This consultation must take place with each London borough, the Common Council of the City of London, and the Assembly. The noble Lord, Lord True, requires consultation on whether the function could be more appropriately conducted at borough level and, if a majority thinks so, an explanation has to be given to Parliament. We obviously support the consultation and the government amendment, but there is no specific guidance in the amendment as to what might result from such consultation. There is no specific requirement to publish the results, produce a response or indeed report to Parliament. Could the Minister give us some more details about these matters? If, for example, the consultation were to be overwhelmingly hostile to the concept, would it still proceed? Can he give us an idea of the type of eligible functions likely to be involved in the sort of delegation contemplated?
The amendment tabled by the noble Lord, Lord True, with which, like my noble friend Lord Beecham, I have some sympathy, raises an interesting point about the role of London boroughs and their equivalents under the so-called Core Cities amendments, which we will shortly come to. Should it be accepted at any stage that the boroughs—one or all of them—would be a better destination for such delegation, and what powers in the Bill would allow that to happen?
Lord Taylor of Holbeach
My Lords, I am grateful to the noble Lord for bringing all these points to bear on what is actually quite a difficult balancing act, and I think noble Lords will agree. I am not a London person, but I come from a two-tier authority. I live in a county council area and in a district council area, and the responsibilities between those two councils are usually clearly defined by statute. I think the governance of London is more involved. The Government’s policy intention is to try to keep an even balance between the democratic mandate which is vested in the mayor and the London Assembly and the democratic mandate which is vested in the London boroughs. I am sure all noble Lords will agree that keeping that balance right is not easy.
Much of the talk has been about how the consultation might go and the consequences of a consultation where perhaps the proposals do not meet with consensus. These are reasonable challenges. The noble Lord, Lord Beecham, asked whether the joint council body for London would be consulted. It is a matter of fact that it would be consulted; I do not know it is a statutory body as such, but it is clearly a body that would be validly consulted. This would not, however, avoid proper consultation with the individual boroughs. It is very important to place on record that these government amendments seek to enshrine the role of the boroughs themselves. Indeed, they are coloured by the amendment of my noble friend Lord True, which seeks to go further in protecting the interests of the boroughs. I understand that.
I was asked how Parliament would be able to challenge any decisions that might be made in this area. In reality, Ministers are accountable to Parliament and I cannot imagine a decision considered by any noble Lord to be totally unfair or irrational to go unchallenged, either by question or even debate in this House, let alone down the other end where quite a large number of Members represent London constituencies.
Lord Beecham
Does the process envisage delegation being made by order or is it outside that process? If it is by order, would it be by affirmative resolution or by a negative procedure?
Lord Taylor of Holbeach
While I await the answer to that part of the process, perhaps I may continue with the process of consultation. It is important to get this on the record too. The consultation exercise will have to be appropriate to the matter in question. The problem with being too prescriptive about the nature of the consultation is that it does not have room for more flexible responses. Consultation should not be a tick-box exercise. It is a proper dialogue. It should not really be about whether it has majority support or not but about what is right, and consensus should be sought across the boroughs and London in the interests of the people of London. In the end, the governance of London is not for the benefit of the mayor, the Assembly or the London boroughs; it is for the people who live there.
In response to my noble friend’s challenging question, the process is outside the statutory instrument process. It is purely an administrative function. However, the decision is still capable of being challenged in Parliament, as I have said, if it is seen to be perverse. There are no immediate plans to use this power, but it is envisaged that it could be used to delegate the administration of some of the national programmes that may be produced on the horizon. That is why it is important to have this capacity and a process whereby there can be discussions across London as to where a national programme might be best delivered.
My noble friend Lord True castigated us, in the nicest possible way, as he would, for not recognising that the Localism Bill is the place where, by empowering local boroughs, we would enhance localism within London. The role of the boroughs is clearly laid down by statute, and they are a very important part of London’s governance. However, London is an exceptional place—it is the capital city of the country—and a number of services are effectively organised across London. The power to delegate arises only when the Secretary of State considers that the functions can be exercised appropriately by the mayor. We say that this provides the sort of comfort which my noble friend seeks. In effect, only a Minister exercising his powers under this clause can do this.
I hope that my noble friend will feel free to withdraw his amendment. I believe that the Government have got the balance on this issue just about right.
Lord McKenzie of Luton
Should it be decided at some stage that a delegation of ministerial functions to a borough or a group of boroughs is a preferred route, does the structure of the Bill permit that?
Lord Taylor of Holbeach
Yes, indeed it does. Functions may well be legislated for in the future that are borough-based and not a matter for the GLA or the mayor.
Lord Jenkin of Roding
Can my noble friend point—I am sorry; this may be an unfair question—to a provision under which the mayor can delegate functions to the boroughs? I am not sure that that provision is in the Bill. I am sorry; I perhaps should have given notice of this.
Lord Taylor of Holbeach
I thought the noble Lord, Lord McKenzie, was asking me whether, in future legislation, responsibilities could be delegated to boroughs.
Lord McKenzie of Luton
I have obviously not been clear enough. I was asking whether, if at some point in the future it were decided to delegate responsibilities to a London borough, the Bill, or any other piece of existing legislation, provides authority for that. I think my question is the same as that of the noble Lord, Lord Jenkin: does the Bill permit that delegation now or at some stage in the future?
Lord Taylor of Holbeach
Is the noble Lord asking whether this can work the other way around and that powers that are currently vested in the mayor should be delegated to the boroughs?
Lord McKenzie of Luton
I am sorry; we are getting into a Committee-type exchange. No, it was just that, as I understand it, the Bill permits ministerial functions to be delegated to the mayor, subject now to the consultation that the amendment is focused on. The noble Lord, Lord True, was asking about delegation not to the mayor but to London boroughs. I think the Minister responded that that was not being contemplated. My question is: if the decision were taken tomorrow that it would be more appropriate to delegate some functions from Ministers to London boroughs, does the Bill permit that? Is that in accordance with the Bill?
Lord Taylor of Holbeach
“Sharing of administrative etc services by London Authorities
(1) Section 401A of the Greater London Authority Act 1999 (sharing of administrative etc services by the Greater London Authority and functional bodies) is amended as follows.
(2) In subsection (1) (definition of “constituent body”)—
(a) for “constituent body” substitute “relevant London authority”, and(b) at the end of paragraph (b) insert “,(c) the London Pensions Fund Authority,(d) the London Transport Users’ Committee,(e) the Commissioner of Police of the Metropolis, and(f) such person or body falling within subsection (1A) as the Secretary of State may specify by order.”(3) After that subsection insert—
“(1A) A person or body falls within this subsection if the person or body exercises functions of a public nature in relation only to—(a) Greater London,(b) a part of Greater London, or(c) a part of England including Greater London or a part of Greater London.”(4) In subsection (2) (power of constituent bodies to enter into arrangements for provision of administrative etc services), for “constituent bodies” substitute “relevant London authorities”.
(5) In subsection (3) (arrangements may include discharge of functions by one constituent body on behalf of another)—
(a) for “constituent bodies” substitute “relevant London authorities”, and(b) for “constituent body” substitute “relevant London authority”.(6) In subsection (4) (power of constituent bodies to form joint committees) for “constituent bodies” substitute “relevant London authorities”.
(7) In subsection (5) (joint committee to be treated as separate from constituent bodies for purposes of section)—
(a) for “constituent body” substitute “relevant London authority”, and(b) for “constituent bodies” substitute “relevant London authorities”.(8) After subsection (6) insert—
“(6A) The Secretary of State must consult a person or body before making an order under subsection (1)(f) specifying that person or body.”(9) In section 420(8) of that Act (orders subject to annulment) after the entry for section 395 insert “401A(1)(f);”.”
“London Transport Users’ Committee
(1) On the day appointed for the commencement of this subsection, the body corporate known as the London Transport Users’ Committee that was established under section 247 of the Greater London Authority Act 1999 (as amended) shall cease to exist.
(2) All statutory powers, duties and responsibilities of the London Transport Users’ Committee shall on the day appointed for the commencement of this subsection vest and devolve in the Greater London Authority and are to be exercised by the London Assembly.
(3) Any appointment to the London Transport Users’ Committee in pursuance of section 247 of the Greater London Authority Act 1999 (as amended) shall cease to have effect and section 247 of that Act (as amended) shall cease to have effect from the commencement of this subsection.
(4) References in enactments, instruments and other documents to London Transport Users’ Committee shall have effect from the commencement of this subsection as references to the London Assembly.
(5) Section 251 of and Schedule 18 to the Greater London Authority Act 1999 (as amended) shall cease to have effect from the commencement of this subsection.
(6) Section 248 of the Greater London Authority Act 1999 (as amended) shall be amended by omitting the words “Authority or” in subsection (1)(a) and by omitting the words “or the Authority” in subsection (3)(b).
(7) Section 249 of the Greater London Authority Act 1999 (as amended) shall be amended by omitting subsection (3).
(8) Section 250 of the Greater London Authority Act 1999 (as amended) shall be amended by omitting subsection (1)(a), the words “the Assembly and” in subsection (2) and the words “the Assembly” in subsection (3).
(9) Section 252A of the Greater London Authority Act 1999 (as amended) shall be amended by substituting the words “the Committee” for the words “the London Transport Users’ Committee” in subsection (2)(a).
(10) Section 252B of the Greater London Authority Act 1999 (as amended) shall be amended by omitting the words “the London Assembly” in subsection (1)(b).”
Lord Tope
Amendment 108 would transfer the purpose and functions of the London Transport Users’ Committee, which operates under the name London TravelWatch and is the body responsible for passenger representation within London, to the London Assembly. The amendment originates from a review conducted last year by the London Assembly, which showed that such a transfer of functions would save up to £1 million per annum of taxpayers’ money. The findings of that review were accepted by all four political parties on the London Assembly. The amendment is therefore supported by all the parties in the London Assembly, the Mayor of London and London Councils, which represents not only the political parties but all 32 London boroughs and the City of London. London TravelWatch was established under the original GLA Act, the purpose of which was to devolve powers and responsibilities to London. That all those elements in London are wholly behind this measure, which saves a significant amount of public money, ought in itself to be enough to persuade the Government to comply with the wishes of London’s elected representatives.
However, I understand that the Government have some concerns. Indeed, during the Recess I had a letter in the name of the noble Baroness the Minister. Let me try to address some of the concerns set out there. Quite rightly, there is a concern to ensure that passenger interests in London are effectively and properly represented by a genuinely independent body. As many of us know, whatever else it is, the structure of London government is unique. The London Assembly is solely a scrutiny body. It has no executive or regulatory powers at all; its function is to scrutinise and hold to account not only the mayor but also the functional bodies. I speak as a member of the London Assembly’s transport committee for some years and I do not think it will surprise anyone to learn that a substantial part of that committee’s work is holding Transport for London and, to a lesser extent, other transport operators in London, to account. It does so very independently because it has no responsibility for TfL—indeed, exactly the opposite. Its members are directly elected by Londoners, as distinct from the members of London TravelWatch, who do an extremely good job but are appointed by the London Assembly. The budget for London Transport—I am sorry, London TravelWatch—is provided by the London Assembly, so again it cannot be argued that the assembly is in some way less independent than the body it appoints and whose budget it provides.
I am sure that again it will come as no surprise to noble Lords to learn that a substantial part of the casework of most London Assembly members, particularly those representing constituencies, is on transport-related issues since they relate to anyone who has to live, work or travel in London. Of course a lot of work for members arises from that, and they are in touch with their constituents on transport issues. Making them officially the passenger representative body can only enhance that and join up the two sides.
The argument was also put that nothing had been said about the workload of the casework. That was because the purpose of this amendment is simply to transfer the function. However, I am sure that if the function were transferred, the wherewithal to carry out that function would follow it. It is not for me to say, but I would assume and expect that the current staff in London Transport—I mean London TravelWatch; I keep making the same mistake—would very likely transfer across under TUPE regulations. That would be a matter for discussion, should this happen. However, without doubt the London Assembly will need to have the capacity to carry out the necessary casework.
Finally, I make a point for serious consideration by the Government. If changes are to be made to London TravelWatch, we need to remember that it was set up under the Greater London Authority Act 1999 and that primary legislation will be needed to change that. I suspect that we will not see this or any other Government introducing a London TravelWatch Bill in the near future so some other vehicle will need to be found in order to make whatever the changes may be. I think, and dare I say I hope, that that may be some way off. Therefore the opportunity arises in this Bill to carry out the wishes of all of London’s elected representatives, to save a substantial amount of public money—more necessary than ever at the present time—and, I would venture to suggest, to provide a strong, independent, directly elected and directly accountable passenger representative body. I beg to move.
Lord Faulkner of Worcester
My Lords, I am sure the House is grateful to the noble Lord, Lord Tope, for moving this amendment and giving us an opportunity to discuss the case of passenger representation in London. However, it may not surprise him to know that I take considerable exception to the case that he, the mayor and the Greater London Assembly are putting forward because I think it is fundamentally flawed. I am aware that it has come about as a result of the review of London TravelWatch carried out last year by the GLA, which did indeed recommend that it be wound up and its functions folded into the assembly. However, that process was seriously flawed. The assembly consulted a number of stakeholders, but then completely ignored what they said. For example, the Association of Train Operating Companies, ATOC, has written to me and said:
“We firmly believe that the functions of a consumer watchdog, in providing impartial casework and research support, and facilitating the resolution of individual complaints with train companies should be demonstrably independent, not under direct political control.
Assembly Members are keen to point out that taking on London TravelWatch's activities will help them to provide greater scrutiny of the mayor's and GLA's activities. However, we believe the priority for London TravelWatch should be handling disputes from individual passengers as a consumer champion and undertaking independent research, not being sidetracked on to issues of political or electoral interest to Assembly Members. Passengers will not benefit if London TravelWatch becomes merely a means for point-scoring”.
The assembly's review claims—and the noble Lord, Lord Tope, has referred to this—that there is scope for substantial savings. The review is vague about where those savings will come from. There does not appear to be any reference to transitional costs or to the cost of the GLA accommodating the staff, although the noble Lord, Lord Tope, did say that a TUPE arrangement may apply, which would undoubtedly have an impact on whatever savings may be possible.
London TravelWatch itself has demonstrated that it can cut its budget by 25 per cent over the next two years, while staying completely independent from politicians and concentrating on its core functions of appeals casework, and policy and investigation. There is a huge danger that the present multimodal work on behalf of the travelling public who use buses, the underground, the Docklands Light Railway, Tramlink, taxis, Dial-a-Ride, and National Rail in and around London would be fragmented if this amendment were adopted. It makes no sense to separate London TravelWatch's rail-related work from its work covering other modes. An example is its excellent, recent report on incomplete Oyster pay, which affects everyone who uses public transport in and around London.
I conclude with one further point: the GLA does not speak for those who are not resident in London. Seventy per cent of all rail journeys begin, end, or pass through London and London TravelWatch's remit extends far beyond the boundaries of Greater London, and includes large chunks of Essex, Hertfordshire, Bedfordshire, Buckinghamshire, Surrey and Kent, and it is from there that passengers travel into London for work or leisure purposes.
This is a really bad idea, which would lead Londoners to be disadvantaged compared with those outside London, who have independent representation on Passenger Focus, looking after their needs, whether they are rail or bus passengers. It is that independence that is important, and that is why I hope the Government will resist this amendment.
Lord Jenkin of Roding
My Lords, my noble friend Lord Tope moved the amendment comprehensively and I only want to make two points. The first point, which has been referred to by those who have already spoken in the debate, is that the September 2010 report by the London Assembly was a very substantial document indeed. It was not entered upon lightly and inadvisably. Despite what we have just heard, it was conducted with great thoroughness and we then came to the conclusion that there was no point, if you have an elected assembly already, in having a second, different body dealing with transport. It was a serious piece of work and the degree of support which my noble friend Lord Tope has indicated is sufficient evidence of that.
My second point is that all local authorities are under stringent spending pressures. Here is a proposal which could save up to £1 million a year for London. In the present circumstances, it is rather unwise not to accept that that is something which should be considered very seriously indeed. I understand the points made by the noble Lord, Lord Faulkner, and the case that has been made by London TravelWatch. At the same time, there is here a formidable piece of work. It will save £1 million and the proposals in the report should be accepted. I therefore put my name to this amendment in order to give the House a chance to make that change.
Baroness Kramer
My Lords, I had not intended to speak on this amendment, but I feel that I must reply to the noble Lord, Lord Faulkner of Worcester. Like many here, I have great regard for the individuals at London TravelWatch and the work that they do. However, the very citation from ATOC carries its own message that, of all the groups in London, the train operating companies would prefer the body which they find they can more easily ignore to the one that they must take seriously. That is entirely in character with the functioning of the TOCs and ATOC. It is precisely to have a much bigger impact on behalf of passengers that it makes sense to make this move from TravelWatch, integrating it into the GLA.
I may have misheard the noble Lord, Lord Faulkner, but he seemed to suggest that, if there was that integration into the GLA, there would be a fracturing of the transport voice. Yet the GLA is already holding TfL rigorously to account. I was on the board of Transport for London and I can tell your Lordships which body it was afraid of—it was very much the GLA. It is the ability of that body to pound away on behalf of the passenger that would be gained by this shift, so I support this amendment.
Lord Whitty
My Lords, I hope that the Government’s reservations, to which the noble Lord, Lord Tope, referred, are indeed strong. This needs to be rejected. I do not want to repeat everything that my noble friend Lord Faulkner said but I would go for the fundamental point. The noble Lord, Lord Taylor, since he is a battle-scarred veteran of the Public Bodies Bill, will probably recall my advocacy of separate representation for the consumer interest in publicly provided bodies and in those which are regulated publicly. The Government wisely backed off from including in lists various bodies, including Passenger Focus, which could have been abolished, while for those that they are going to change they have provided an alternative but still independent body, either in another quango or in the third sector. It is a central provision of public services or those that are regarded as public utilities in this country that we have a separate consumer organisation. That applied when we set up the nationalised industries, when we privatised and liberalised those industries and when we passed the Greater London Authority Act to set up that body. It should continue to apply.
I suppose that I should apply two past interests here, both as a consumer champion as chair of Consumer Focus and as the Minister who, as the noble Lord, Lord Tope, will recall, brought the Greater London Authority Bill through this House. He will also recall that it was the second longest non-financial Bill ever—the absolutely longest, the Government of India Bill in 1935, was never implemented. The implementation of the Greater London Authority Act has left some problems but I do not believe that this is one of them.
It is important that we retain the distinction between the provider, and those who oversee the provider, and the consumer interest. The mayor is responsible for the provision and the London authority for overseeing that provision. In that sense, they are not much different from a private sector board as regards their consumers, so I am afraid that it does not impress me that all parties on the Greater London Assembly welcome and support this move. It is no more impressive to me than if there was a unanimous vote on the board of Thames Water to say that it wished to abolish the Consumer Council for Water, or that Michael O’Leary and the board of Ryanair said that they wished to abolish the Air Transport Users Council or—to go back to my past interests—that the boards of British Gas or npower should say that they wished to abolish Consumer Focus and any successor powers.
We must distinguish between the role of a consumer interest representative and those who are providing, or are part of the governance structure of those who provide, a service. Indeed, in London, predecessor bodies to this go back to the private company of London Transport, through the nationalisation process, through the GLC, through the abolition of the GLC, into the establishment of TfL and through to the London authority and the 1999 Bill. That was sensible. London Assembly members may well have reservations about aspects of this and may well feel that some changes need to be made—that might be right—but this clause does not say that, nor does it say that there should be some rationalisation between the London authority and Passenger Focus.
It might be conceivable that the transfer of this body into Passenger Focus was a rational move; I do not personally think so, but it would still provide an independent consumer voice focus. Actually, however, for the reasons that my noble friend points out, London is unique in this response. London is the only city in this country where the vast majority of people go to work by public transport. TfL has responsibilities way beyond the bus and train area—for roads, taxis and so on. As has also been pointed out, people outside London, and therefore with no voice in the election of GLA members, have an interest in this. So there is no principled argument that would call for the abolition of this body. I would be prepared to consider, and I suspect that the Government would be prepared to consider, something less than that, which allowed for easier changes, but the straight abolition of an independent consumer voice in the most complex, most difficult and in many respects most integrated transport system in the whole country would be a seriously retrograde move and I hope that the Minister will soundly reject it.
Lord Kennedy of Southwark
My Lords, Amendment 108, moved by the noble Lord, Lord Tope, is an interesting amendment, on which I look forward to the response of the noble Earl. As a Londoner, I always thought that the London Transport Users’ Committee did quite a good job standing up for Londoners and, as my noble friend Lord Whitty said, for people travelling through London who have no vote in the GLA or any other elections in London. Having proper GLA input into what goes on in London transport is obviously very important. It has not happened in the past and that is very regrettable. What worries me, though, is where people will go to have their voice heard if this body is abolished. I know that the body is appointed by the London authority. I have some concerns, as a south Londoner, that there is very little experience of south London on the board. That needs to be addressed in the next round of appointments. One member may have been to Putney once or twice, but there is very little involvement in south London.
Another thing that worries me is the performance of London Underground. Noble Lords may not be aware that since April this year performance statistics have ceased to be published, so we have no idea what is going on in London Underground. I think we all know that it is getting worse, for sure, and this is something that needs to be addressed by both the users committee and the London authority pressing the mayor to release those figures again and to say why they have been stopped.
In conclusion, I am not against reform at all, but we need to hear more about how this will improve the situation. We in London all find that things are getting much worse, so we need to hear more about improvements. This may be something for the future, but not now.
Lord McKenzie of Luton
My Lords, I should explain that our official Front Bench position is that we support the amendment, which means that, should it be put to a vote, I, at least, will be obliged to vote in favour. I am not sure how many of my colleagues behind me would follow me into the same Lobby. Our position was formulated because of strong support from the GLA, but I take it as implicit in my mandate that supporting the amendment would be conditional on the Government being able to answer a lot of the very robust challenges that have come, particularly, from this side of the House during this debate.
My noble friend Lord Whitty spoke about the importance of preserving a strong consumer interest. Points were also made by my noble friend Lord Faulkner about whether this will benefit passengers, some of whom do not live in London and are not London voters. Indeed, it covers rail travel from such places as Luton. If we were to separate rail from other modes of travel, how would that work? I understand the thrust of the movers of the amendment, but these are questions that need to be satisfied before it could proceed. Perhaps in responding the Government can confirm that there was overwhelming support for the proposition among transport operators and rail user groups. Will the Government let us know, for the record, whether any alternatives to transfer to the GLA have been considered and on what basis they were rejected?
The Government have acknowledged the considerable amount of casework undertaken by London TravelWatch and are presumably satisfied that this could be handled under the proposed new arrangements. The London Assembly review of TravelWatch, to which the noble Lord, Lord Jenkin, spoke, recommended that the reorganisation be folded into the assembly but with rail functions distributed between the assembly and the national independent passenger watchdog Passenger Focus. Have the Government undertaken an analysis and will they support that as an appropriate way forward?
I look forward to the Minister's reply and hope that he can dig me out of my dilemma on this issue. Powerful issues have been raised that need to be answered before the proposition can and should proceed, much as we love the thrust of it. In particular, there is a mood that the status quo should not necessarily be accepted. There may be ways in which it can be improved and cost savings may be generated. I would be interested in the Minister's views on that as well.
Earl Attlee
My Lords, Amendment 108 would abolish the London Transport Users’ Committee and transfer its functions to the London Assembly. My officials assured me that this would be an easy amendment to deal with—even I would be able to deal with it. The reality is that I find myself in the middle of a pretty vigorous debate. On the other hand, the noble Lord, Lord McKenzie of Luton, also finds himself in an interesting position.
I regret we did not have time to discuss this amendment in Committee when it was tabled by the noble Lords. As my noble friend Lady Hanham indicated in her subsequent letter, the Government believe that it is inappropriate—at this stage through this Bill—for the London Transport Users’ Committee, which is the independent transport users watchdog for London, to be transferred to the London Assembly.
Among other things, the committee undertakes an important and impartial complaints ombudsman role on behalf of London transport users in and around London, and it is vital that any change to the current arrangements ensures that complaints continue to be dealt with in a genuinely independent manner. In particular, there is an EU requirement which mandates the designation of an independent body for complaints for rail transport users. So there is an important question that needs to be resolved about how far the assembly can be sufficiently independent for the purposes of this EU legislation, given its party-political membership, its role in scrutinising the work of the mayor and TfL and its influence over the strategic direction of transport policy in London—especially when this Bill will allow it to reject the mayor’s transport strategy.
Indeed, if the Government had proposed such an amendment, there would have been concerns from many noble Lords about the lack of independent safeguards in the legislation. Therefore, as we have heard from our debate this evening, there are still some important questions that need to be resolved before we can consider legislating for any new arrangements. The noble Lord, Lord McKenzie of Luton, asked me a few more and I do not know the answers, which is why we cannot support the amendments.
However, as I am sure that noble Lords will agree, it is entirely right during a time of fiscal constraint for the London Assembly to consider ways to achieve best value for taxpayers’ money from the London Travel Users’ Committee that it oversees. The Department for Transport has already undertaken a review of Passenger Focus, the national rail passenger watchdog, which will deliver significant savings, and DfT will work with the committee, the assembly and other partners to explore ways to deliver an efficient and effective ombudsman function for London transport users.
On this basis, I hope that the noble Lord will withdraw his amendment.
Lord Tope
I think that I am grateful to the noble Lord, Lord McKenzie, for his more measured support for the amendment. I am less grateful to him for tempting me to call a vote just to see what happens. We will have to see about that. I am grateful to the noble Lord, Lord Faulkner, for putting the case from London TravelWatch. I have seen its briefing. It is not surprising that the body which is proposed for abolition is less keen on its own abolition. That is entirely understandable. I hope that I did not say or imply that there is something wrong with the way in which it does its job. Indeed, the noble Lord, Lord Whitty, gave us a brief history of it all. Back in the 1970s, I was a member of its predecessor body. I am grateful to the noble Lord for reminding us of the many happy hours that we spent discussing the GLA Act, as it became.
A number of points have been made, and I am not going to spend a long time answering them all. We are referring to the abolition of London TravelWatch. Let us be clear: the body that we are talking about may be subsumed in the London Assembly but we are certainly not talking about abolishing the function and representative role of the passenger interest. It is very important that we understand there is no suggestion of that. On the contrary, there is a belief, perhaps not shared by all, that that passenger interest would be enhanced by being represented by people who have been elected. I accept that they are not elected by everybody who ever travels on transport within London; I do not think that will ever be the case. However, I am a little puzzled that members of the Labour Party should say that, because a body is popularly elected, it is therefore not independent. I find that a rather strange argument and one that is difficult to follow. I made very clear—I know this from my eight years’ experience of serving on the London Assembly—that this is an independent body. It has no executive functions and does not always love the mayor. None of the members always loves the mayor, whoever the mayor may be. It has no executive responsibility at all for TfL. Indeed, an enormous amount of its time is taken up questioning—sometimes vigorously, as my noble friend Lady Kramer said—and calling to account the principal transport provider within London and, indeed, the train operating companies that appear for questioning. Therefore, there is a vigorous representation of passenger interest on the part of those people whom most of the passengers—but not all—will have elected as their representatives.
The noble Lord, Lord Kennedy, referred to himself as a south Londoner. I am more south London than him, certainly in geographical terms, but I share his interest in that regard. That situation would be corrected if it were the London Assembly because, whatever I personally may think of the inadequate electoral system by which that body is elected, it represents the whole of London.
Tempting though the suggestion of the noble Lord, Lord McKenzie, is, I will not press the amendment to a Division. The Minister need not comment on this point now but I believe that discussions are going on about introducing changes regarding greater involvement with Passenger Focus. I hope the Government will ensure to the best of their ability that the London Assembly—I mean the London Assembly, not the GLA, which might well mean the mayor instead—is directly involved in all those discussions. I beg leave to withdraw the amendment.
Baroness Kramer
“Transport for London: Rail Authority for London
(1) Section 196 of the Greater London Authority Act 1999 (power of Greater London Authority to give instructions or guidance to Franchising Director) is amended as follows.
(2) In subsection (1), for “The Authority may give instructions or guidance to” substitute “Transport for London shall be”.
(3) Omit subsections (2) to (4).
(4) In subsection (5)—
(a) in the opening words, omit from “give” to the end;(b) in paragraph (a), for “prevent or seriously hinder him from complying” substitute “fail to comply”;(c) omit paragraph (b) (but not the “or” following it).(5) In subsection (6), for “the Authority” (in both places) substitute “Transport for London”.
(6) In subsection (7), for “instructions or guidance may be given” substitute “the Franchising Director shall act”.
(7) In subsection (8), for “the Authority” (in both places) substitute “Transport for London”.
(8) Omit subsection (9).
(9) For the title substitute “Transport for London to be the Franchising Director”.”
Baroness Kramer
My Lords, this amendment follows on nicely from the previous amendment. It also illustrates the general confusion over the structure of transport in the London area. The purpose of the amendment is to remove from the Department for Transport the responsibility for rail franchising within the inner suburban area of London and transfer it to Transport for London. It is wholly within the spirit of the Bill to take from the centre and give to a regional or more local body powers that it can exercise more effectively and more efficiently for the benefit, in this case, of passengers.
Noble Lords will know that at present Transport for London effectively either manages or in some way regulates the Tube, the Docklands Light Railway, bus services, river transport services and taxi services, but when it comes to rail, it has only a very limited purview. It directly manages London Overground, which is one very minor line, and it will have oversight of Crossrail once it is completed. However, when it comes to the inner suburban rail services that criss-cross much of the London area, Transport for London’s role is extremely limited. The Department for Transport lets and manages the franchises and Transport for London can simply specify and pay for either an increment to that service or—terrible bureaucratic word—a decrement to that service. Essentially, the consequence of that has not been very beneficial to passengers.
I would argue that London is different from much of the rest of the country when it comes to rail. Fourteen per cent of Londoners use the National Rail network to commute daily to work. Indeed, outside of London proper, in the south-east and east of London there are many more who use that rail network to commute to work within the London area. That makes it distinctly different from any other part of the country. There are 10 train operating companies, so it is a highly fragmented service. Demand in the area is so inelastic that the kind of competitive pressures that have effect in the rest of the country are virtually irrelevant when it comes to London, where demand is so high, capacity is constantly at breaking point and there is always a need for additional capacity. So the competitive issue that exists elsewhere is not relevant within London itself.
I said that there were 10 different train operating companies. That means 10 different brandings, 10 different fare structures, 10 different forms of marketing, 10 different commercial strategies and 10 different operating time horizons. As noble Lords will know, the McNulty review recommends that more power should go to the train operating companies and franchises should be longer. So trying to create an integrated London Transport service within this environment, where rail is so fragmented and Transport for London has so little direct power, is very significantly undermined. If your Lordships would like an example of what this does to, as it were, disadvantage passengers, I draw your attention to the Oyster card. I should declare that I am a former member of the board of Transport for London and was very involved with the rail side. Rows went on year after year to try to get any form of Oyster card available on National Rail. Then we got “pay as you go”, which most people have now enjoyed only for the past couple of years. Technically it could have been done very easily, but the issue was never high on the priority list for the Department for Transport, which had to be involved because of the franchising structure. The TOCs saw it as a way to leverage money out of London Transport. The whole process was very much to the disadvantage of passengers. If your Lordships want another quick example, just go down to Waterloo. The next time you are stuck on a train that is slow because there is no space to get into Waterloo station, you will see that there is an empty platform. When Eurostar moved to St Pancras, one of the international platforms was, at great expense to the Government, converted to domestic use. The department has never managed to get its act together to put that into play for passengers. That is another huge, wasted asset. Frankly, this is repeated all over London.
Sometimes I seethe with envy when I talk to transport friends in Berlin as they are able to work with the bus and taxi services so that late-night trains are met by a co-ordinated timetable of buses and taxis, ensuring that train passengers have a seamless journey. The battle in London has been to look at travel as a single journey, whether you use one mode or multiple modes to get to your destination, and to create that kind of integration. It has been phenomenally successful, but leaving out rail makes no sense.
Sometimes people say that people from outside London use the services so they must not be too London biased. We can give them a voice by putting some directors from outside London onto the relevant board within Transport for London. It is also true that the department will continue to have a voice, but the balance needs to be shifted towards an entity which has a genuine interest, in a detailed way, in the quality of service, as Transport for London does.
Lord Spicer
Is the empty platform at Waterloo, which the noble Baroness has been describing, the reason why plays are being put on there now?
Baroness Kramer
Plays are not taking place on the adapted platform but it would be better to use it for a play than nothing at all. It is absolutely ridiculous.
I have two more points to make. Some people say that there must have been a lot of thought about how the franchises should be divided up and a reason for not giving far more influence over the rail franchising process to Transport for London. The rationale was, “We don’t like Ken Livingstone”. When the GLA Bill went through this House, particularly when TfL was under review, there was an attempt to minimise the London influence. We had the disastrous Tube public/private partnership, which was a key part of the structure and which ensured that Transport for London really could not manage the system as a whole.
There was very little appreciation of the benefits of integration. That is one of the other pieces, if you like, which came out of much of that kind of thinking. We have all moved beyond that and recognise the benefits of integration and the benefits of regional management. I argue that at this time, when the transport infrastructure in this area is desperately overstretched, when we really are in a situation of economic recovery in some areas of London and you practically have to strap people to the roofs of transport carriages, we need to maximise the use of that infrastructure. Therefore, the logic is to change the franchising responsibility, which is what this amendment attempts to do.
Lord Berkeley
This is an interesting amendment. I was particularly seized of the way in which the noble Baroness, Lady Kramer, proposed it because, following the previous amendment and the discussion about London Travel Watch—I am sorry that I was not in the Chamber at that time—I was sent a map of the extent of London Travel Watch, which goes well beyond the GLA boundary in many areas. I do not think it goes all the way out to Banbury but it goes quite a long way in that direction; it also goes a long way west and a long way south. It made me think that if this amendment were accepted, one would end up with the same kind of problem. On the main network, not many trains terminate within the GLA boundary. I believe Croydon must be near the edge—I am no expert on Croydon but perhaps some of my noble friends could confirm that—but I do not think that any services that go through East Croydon terminate there. So there will be a debate between those who want long-distance services as frequently as possible, stopping as infrequently as possible, between Croydon and the centre of London, for example, and those who live within the GLA boundary who want a regular stopping service.
The other problem, which is particularly evident on the lines south of London, is that in many places you can get to two or three different London termini by train. It is a lovely service if it works—it usually does—but it is a very complex network. It compares strongly with the Underground lines which, on the whole—apart from the Northern line—may serve two destinations at each end, but not three or four. I can see a time when Transport for London might say that it would like to rationalise the services south of London, for example, by making them more frequent, but going to fewer destinations, and having cross-platform interchange in some places, because it thought that would be better for its electorate.
I mentioned the question of through-services and the debate regarding them and the shorter-term. There is also the question of access for freight—I declare an interest as chairman of the Rail Freight Group—although there is not much freight south of the Thames, so we can probably forget about that. However, I also recall a big debate during the many Crossrail debates, because when TfL thought it was in charge of Crossrail and the Great Western, it started off on the basis that it would have the sole use of the slow lines, to Maidenhead or Reading, and all the other trains could have the fast lines. TfL thought that was a brilliant idea, because it would run a very frequent service—there would probably be those lines of heavy cables that you see between London Underground lines—but it completely forgot that those lines are run as a network of four tracks. If anything goes wrong on one track, the trains are immediately switched to the other ones to keep the service going. I did a calculation at the time, which indicated that if Crossrail had got its way the passenger operators would have had to cut their service frequency to places such as Cardiff, Oxford and Bristol by at least 50 per cent, if not more. Only half the freight trains would have gone up that line, and when one of the lines was dug up, they would just have to stop.
That is the logical consequence of splitting responsibilities. There is work to be done with TfL and the Department for Transport to take into account the needs of people who live within the GLA area and then we can have a big debate on how the available capacity is shared out between the department’s view, which is, one hopes, long-distance, and TfL’s, which has a local view. As for giving the train operators—all 10 of them, as the noble Baroness said—more responsibility, I think that is a bit dangerous when so much co-ordination is needed. It is a debate that we need to have. I am not sure whether this is the right amendment, but I think it is very useful to be having this discussion.
Lord Faulkner of Worcester
My Lords, I was tempted to speak by the noble Baroness, Lady Kramer, as she was tempted to speak by me on the previous amendment. I have a great deal of sympathy with the points she is making. I will start with a correction—also for the noble Lord, Lord Spicer—that it is not only one platform at Waterloo that is out of use; it is platforms 21, 22, 23 and 24. I think I am right in saying that it is 21 and 22 which are being used by the production of “The Railway Children”, which I can recommend unreservedly. I speak as a trustee of the National Rail Museum, as it is very much our play.
Baroness Kramer
Without being a train wonk on this, there is only one platform that has been converted for domestic use. The other platforms could be, but that work has not been done.
Lord Faulkner of Worcester
The noble Baroness, Lady Kramer, is quite correct. As I said, I have a great deal of sympathy with the point she makes but my concern is that the introduction of a new franchising authority, which the amendment proposes, would be in danger of creating greater fragmentation of the railway than we have at present. I agree with her that there are probably too many train operating companies. It is the Government’s intention that franchises should be longer than they have been in the past, and I strongly support that. However, to introduce a new franchising operator could lead to confusion and fragmentation. My noble friend Lord Berkeley refers to services that serve London but go well beyond. The classic example of that is the Thameslink line, which starts in Bedford, goes through Luton and St Albans—none of which is covered by Transport for London or the GLA—and then goes south from Croydon to Brighton.
Services like that need to be looked at in a regional context, and I am not certain that looking at them in a London context would make a great deal of sense. However, I pay tribute to what Transport for London has done in the development of its Overground service. The opening up of the East London line is an extraordinarily successful venture. The trains are very popular and they provide new journey opportunities for people who probably did not make those journeys, or tried to do it by car, or struggled on buses. It deserves to be commended for that.
I agree with my noble friend that it is helpful to have this debate, but this amendment is not quite the way that we should go.
Earl Attlee
My Lords, I understand the intention behind my noble friend’s amendment; namely, that the mayor and TfL should have greater control over London’s commuter rail franchises, given their wider transport responsibilities. As my noble friend Lady Hanham said in her letter following the Committee stage, TfL already plays an important role in relation to London’s commuter rail services. It already has, as pointed out by my noble friend, effectively full franchising powers over the London Underground concession, covering a number of key routes across London. It works closely with the Department for Transport in the development of other rail franchises affecting London, with the mayor having the ability to pay for outputs over and above those that the DfT specifies. By the way, I undertake to look up in the dictionary the definition of “decrement”.
The devolution of other London commuter rail franchises to the mayor and TfL is not a straightforward matter. The geography of London’s commuter rail network does not sit well with London’s administrative boundaries, with many lines extending well into neighbouring counties, as pointed out by many noble Lords. Furthermore, capacity on much of the London commuter network is limited, and there are inherent conflicts between London-area and non-London services that need to be balanced in the best interests of all users, and to keep overall costs down.
I am afraid my noble friend did not satisfy me in how the balance would be struck between the needs of commuters who live in London, and who elect the mayor and the Assembly, and those living in Luton, Brighton and Woking, who do not. There is a real question of a democratic accountability deficit if other London commuter rail services are devolved to the mayor, as many commuters do not live in London so do not have the opportunity to participate in the elections.
Nevertheless, the Department for Transport is happy to engage TfL further about the devolution of local rail services, in the context of Sir Roy McNulty’s independent study on rail value for money earlier this year. This study suggested that more local control of rail services could contribute to the development of lower-cost regional railways and, in line with the Government’s localism agenda, we are considering options for more local control of some rail services in other parts of England. We will also continue to encourage operators to work more closely with TfL. The new working arrangements, put in place for the South Central franchise which was let in 2009, appear to be working well.
On this basis, I urge my noble friend to withdraw her amendment.
Baroness Kramer
My Lords, I am delighted that I have been able to stir up some debate on this issue and see it get some attention—rather than slip to its usual place at the bottom of everybody’s priority list—because there are some genuine issues here.
I say to those who are concerned about passengers outside the London area that most people have London as their destination and are therefore intensely important to TfL; they are not marginal. Also, most people who come in contribute in some way to London’s economic viability, either through business or entertainment, and so are very much a concern to Transport for London even though they do not actually live within the area. Again, we can also bring in other board members.
I am delighted to have sparked off some of this debate. Given that, I beg leave to withdraw the amendment.
Lord Beecham
“(2A) An order under subsection (1) or (2) may not be made in respect of—
(a) this Act; or(b) any of the provisions listed in Schedule (Statutory exemptions from section 5: supplemental provision).(2B) The Secretary of State may by order amend Schedule (Statutory exemptions from section 5: supplemental provision) to include additional statutes or Regulations.
(2C) An order made under subsection (2B) is to be made by statutory instrument.
(2D) Before an order may be made under subsection (2B), a draft order must be approved by an affirmative resolution in both Houses of Parliament.
(2E) Schedule (Statutory exemptions from section 5: supplemental provision) has effect.”
Lord Beecham
My Lords, when we discussed the provision about general competence in Committee, the noble Lord, Lord Newton, who is not in his place, chided me for my apparent diffidence in respect of the way in which I moved amendments at the time. I did and do welcome the conferring of the power of general competence that the Bill provides, especially in the light of the general perception in the media by such august bodies as the TaxPayers’ Alliance and even occasional Ministers that “general incompetence” is the term that should be applied to much of local government—something that I certainly refute. However, there are flaws in the Government's proposals and the amendment addresses at least some of them.
The two amendments in this group relate to what can only be described as a dispensing power which the Secretary of State will take to disapply, repeal or amend legislation that he conceives somehow inhibits the exercise of the general power of competence. It is fair to say that in Committee the noble Baroness addressed concerns that had been raised about, for example, the application of human rights legislation on matters of that kind, and indicated that these were not envisaged as being embraced by the Bill. Certainly I accept that point. However, a great many pieces of legislation, on the face of it, appear to fall within the provisions of Clause 5(1) and therefore are subject to amendment, repeal or revocation, in the words of the clause. They extend over a wide area of public policy. A number of them are listed in the proposed new schedule that is the subject of the second amendment in this group. They cover such areas of law as part of the Childcare Act, the Child Poverty Act, the Care Standards Act, disabled persons regulations, carers legislation, parts of the Mental Health Act, the Community Care Act and the Environment Act. The list includes an Act in relation to which I will not declare an interest: the Prevention of Damages by Pests Act.
It is a formidable list of legislative requirements that can, simply by order, be revoked. That raises a significant question about the role of the Executive. It is not clear whether Clause 5(1) requires any such changes to be made by affirmative resolution. Certainly that was the view of the Delegated Powers Committee. Other provisions in the clause are subject to affirmative resolution, or would be subject to it. The noble Baroness indicated in Committee that that was probably the case, and it would appear so. However, it does not necessarily seem to be the case in relation to Clause 5(1). Perhaps the noble Baroness will comment on that.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I am glad that the noble Lord, Lord Beecham, is not seeking to get me out of my job just yet. I thank him for that. There is a little overexcitement about Clause 5(1)—not that the noble Lord ever raises his voice excitedly. However, there are concerns that are not necessary. Amendment 109A would prevent the Secretary of State making any orders under Clause 5(1) and (2). That would mean that he could not even amend the long list of legislation set out in Amendment 119E. However, it would give him order-making powers to add to the legislative list; he would be able to add but not to take away.
The power in Clause 5(1) is a power to remove restrictions and limitations to the legal capacity of local authorities that prevent them exercising the general power of competence. I think that we all want to see them have this general power. The clause must be read in the context of that power, which is a power to do things that an ordinary individual can do. It is not a power to remove any duty or obligation placed on local authorities, such as many of those listed in Amendment 119E, where such duties or obligations do not restrict or limit the capacity of the local authority to do things that the individual can do.
Noble Lords must hang on to the word “individual”; that is the important aspect. We do not consider that Clause 5(1) could be interpreted—the noble Lord addressed this and understands it—as allowing the Secretary of State to amend the requirements of, for example, the Equality Act or the Human Rights Act as they apply to local authorities. These Acts place broad duties on public authorities, including individuals, so they cannot be part and parcel of this power of competence. These Acts are not a restriction or limitation on the legal capacity of the local authority, so the power could not be used in the way suggested for these or any other similar legislation, just as it could not be used to exempt local authorities from prohibitions contained in criminal law.
We have listened to concerns, and amendments were brought forward in the other place, which are now in Clause 6, to place restrictions and limitations on the power in Clause 5(1). We believe these provide additional safeguards so that there can now be no doubt about the scope of the power. It does not permit the removal of essential duties, protections or rights from the Secretary of State. I also confirm that, as part of the consultation required by Clause 5(7), it will be appropriate to consult every person or group of persons, or their representatives, who will be substantially affected by the proposal. The results of any such consultation would have to be presented to Parliament, and then Parliament could veto the order.
The noble Lord asked me whether Parliament would be involved in this. As I said, Clause 5(7) is also modelled on what is in the Legislative and Regulatory Reform Act. The procedure to be followed would be negative, affirmative or superaffirmative, and that would be ultimately determined by Parliament. This matter has been put to the Delegated Powers Committee, which has no difficulty with that and has expressed itself on side with the procedure.
We believe that these amendments are unnecessary. We are trying to give local authorities as much power as we can, but we realise that some of that is going to come eventually from Parliament. There are restrictions on the powers of the Secretary of State in these procedures. Local authorities are not going to have completely unfettered power with the general power of competence, but it will be much wider than it is at the moment.
I hope that I have answered the noble Lord satisfactorily about the involvement of Parliament if the Secretary of State were to use these powers, so I hope that he will feel able to withdraw his amendment.
Lord Beecham
I am grateful to the Minister for her reply. I accept that there now appears to be at least a parliamentary procedure here. I still think it is difficult to accept the notion that primary legislation imposing duties that were imposed for a purpose on local authorities and others should be varied or revoked in the way set out in the Bill. Having noted the point about the affirmative procedure, however, I accept her assurances and beg leave to withdraw the amendment.
Lord Beecham
Lord Beecham
Amendments 109B and 109C relate to the same provision under the Secretary of State’s powers, but in this case they seek the deletion of the power of the Secretary of State in effect to nullify the power of competence which the Bill purports to represent. This is really quite an exceptional provision and is not at all acceptable. The Secretary of State takes upon himself, having conferred or purported to confer this very broad power, the right to,
“by order make provision preventing local authorities from doing, in exercise of the general power, anything which is specified, or is of a description specified, in the order”,
or, under Clause 5(4), to make that subject to conditions. That is a very far-reaching incursion on the principle that the Bill seeks to advance, and it is simply not acceptable.
Amendment 109C in this group deals with the rather strange phrase, “any necessary protection”, which is contained in the clause and is in no sense defined. It is presumably left to the Secretary of State to determine what a necessary protection is. These are the limits under the power contained in Clause 6. In the absence of any sensible definition, I do not think this is an acceptable power to confer on the Secretary of State. I invite your Lordships to agree that these provisions should be left out of the Bill, and I move Amendment 109B accordingly.
Baroness Hanham
Amendment 109B, as the noble Lord said, would remove subsections (3) and (4) of Clause 5. These subsections provide reserve powers to allow the Secretary of State to prevent authorities from exercising the general power or to set conditions around the use of this power. We believe that these powers provide a necessary and proper safeguard, given the breadth of the new power—to ensure, for example, that risks to both local government finances and the Exchequer are properly managed. The Government have no plans—I think I said this earlier on—to use the powers in subsections (3) and (4). At present, there is nothing in mind; the Secretary of State is not sitting there with great excitement, his pen poised, waiting to take away what he has already given. The Government actually expect them to be used very rarely, if at all. They are, however, an insurance policy. They might, for instance, have to be used to deal with any risks that might arise from authorities’ use of the new general power—I think I said this in Committee—to engage in novel financial transactions using public money. That might require the Secretary of State to step in. The use of the power is subject to consultation and to the affirmative procedure, which would ensure suitable parliamentary scrutiny. I just want to stress that, occasionally in legislation, we need to provide for the very end of the road when something might go wrong, and that is all the clause is for.
Amendment 109C would remove one of the conditions that place restrictions and limitations on the use of Clause 5(1). The provision in question must not remove, as the noble Lord said very clearly in his opening remarks, “any necessary protection”. This condition ensures that protections—which might relate, for example, to the economy, health and safety, civil liberties, the environment or national heritage—are not removed. A similar condition is used in the Legislative and Regulatory Reform Act 2006, so this is not new to legislation. It is quite deliberately wide. Any Secretary of State seeking to make an order under Clause 5(1) must be satisfied that the condition is met and must explain why to Parliament. We believe, therefore, that this and the other conditions in Clause 6 are a useful additional safeguard and should be retained.
Before the noble Lord or others intervene, I will speak to government Amendments 234, 235 and 236, because it might help the debate coming afterwards. Amendment 234 gives effect to the recommendations of the Delegated Powers and Regulatory Reform Committee in relation to Clause 5(2). Clause 5(2) is entirely benign; it can be used only to remove wholly overlapped, and therefore unnecessary, powers. It cannot be used to remove duties. The amendment ensures that orders made under Clause 5(2), if not made in conjunction with orders under Clause 5(1) and subject to special procedures set out in Clause 7, will have to be subject to an affirmative procedure. We believe that those safeguards, coupled with the intense level of parliamentary scrutiny provided, give sufficient protection.
Lord Beecham
I am grateful to the Minister for her reply, and I have no difficulty with the government amendments to which she spoke. However, I continue to have difficulty with the response to my amendment. The Secretary of State is clearly not prepared to trust local government with the powers that he is conferring on local government. He retains significant power to override the exercise of the general power which he has purported to confer or to impose conditions, admittedly subject to a parliamentary procedure. The whole case is redolent of the Government simply not being prepared to trust their partner in local government, a point that was made by the noble Lord, Lord Newton, when he was castigating me for being insufficiently robust on the previous occasion. I hope I have not failed his test today.
On this and on the previous occasion the Minister referred only to some novel financial practices, as if these were the most likely candidates for the invocation of the powers conferred by the Act. So far as financial practices are concerned, if there is any suggestion that they are likely to damage the finances of the local authority, there are existing mechanisms to deal with that within and outside the authority in the proper financial officer and audit, albeit perhaps not for much longer under the auspices of the Audit Commission. There are perfectly proper safeguards, and the additional powers that the Secretary of State seeks to reserve for himself under this Bill are not needed. I still do not understand what is meant by the “necessary protection” to which Clause 6 refers. Protection from what, against what and to what extent it is necessary are entirely opaque. In these circumstances, I must test the opinion of the House.
Baroness Hanham
Baroness Hanham
My Lords, government Amendments 110, 111 and 113 accept the recommendations of the DPRRC to change the procedures to be followed when making orders relating to the general powers of fire and rescue authorities. Amendments 110 and 111 make orders to expand the scope of an existing order subject to the affirmative procedure, as recommended by the DPRRC.
In response to the amendment tabled on 20 June by the noble Baroness, Lady Smith of Basildon, I said that it was never the Government’s intention to enable charging for all community fire safety or prevention activities and that I would reflect on the best way of achieving that aim. Amendment 113, tabled in respect of England and Wales, retains the existing position that fire and rescue authorities cannot charge for the giving of advice, on request, about preventing fires and means of escape in any premises. The amendment retains the existing ability of fire and rescue authorities to charge for the giving of advice in relation to non-domestic premises unless that advice is requested under Section 6(2)(b) of the Fire and Rescue Services Act 2004 which sets out the criteria for fire safety; the noble Baroness will know more about this than I do. Fire and rescue authorities will not be able to charge for the giving of advice in relation to domestic premises in any circumstances. Charging is optional and up to full cost recovery, not for profit. This amendment will replicate existing arrangements on charging for giving advice as set out in the 2004 Act. I await the amendment tabled by the noble Baroness.
Baroness Smith of Basildon
My Lords, I rise to speak to our Amendment 112 and comment on the government amendments in this group.
I welcome the Government’s amendments and I am grateful to the noble Baroness for her comments. I appreciate that it caused some confusion when I first raised this. As the noble Baroness generously said, when she first wrote to me, her officials and government Ministers had understood that the legislation as drafted would not allow for charging. It was completely inadvertent, as she said, and they had not appreciated that a consequence of the Government’s proposals to expand and increase charges would lead to community fire safety being charged for. Indeed, she wrote to me to that effect. I thank her because, when it was recognised that our concerns on this were justified, she raised the matter in the House and immediately wrote to me as well to clarify the position and agreed to bring forward government amendments to correct the error. I am grateful to her for doing that.
I have to say to her that this is a fairly large Bill, about 500 pages long. It is very detailed and quite technical in parts, and some of the discussions we have had have sometimes seemed quite complex. We have concerns that some parts of this Bill may have been rushed through to the House before they were fully and properly drafted. It is to the great credit of the noble Baroness that she has been ready to engage and debate on these issues, and at times has been prepared to concede and bring forward amendments to try to improve this legislation. So I am grateful to her for the amendments she has brought forward today, in so far as they go.
I am sorry to raise the matter in this way, but I am looking at the difference between the amendment in my name and the amendment from the Government, which refers to Section 6(2)(b) of the 2004 Act. Our Amendment 112 would not allow charging for community safety or fire prevention work, whereas the government amendment refers to Section 6(2)(b) of the 2004 Act, which is purely about the fire safety work that a fire authority must undertake as part of its core functions. I entirely agree that that is right and proper in so far as it goes. The last Government recognised that fire safety should be a core function, and therefore placed a duty on fire authorities to undertake fire safety. No fire authority should be allowed to charge for that core function, as the noble Baroness rightly agrees. Where I think there is a grey area—and some clarification on this would be helpful, as this is another unintended consequence—is that many fire authorities have extended this work to the related, but slightly wider, community safety remit.
I have some particular examples of this work, which I am sure the noble Baroness would never want to see lost to the community. For example, my authority in Essex runs a number of courses for young people, such as one called “Firebreak” and another called “Young Firefighters”, and there are similar schemes in other authorities. They do promote fire safety—there are clearly benefits for fire safety—but there are much wider benefits to the individuals taking part and to the community. In Basildon, Essex fire service uses these projects, working with local authorities, councils and other bodies, as part of a team tackling crime and disorder. The fire service is part of the crime and disorder reduction partnerships, and it is very proud of this work. I looked at its website earlier today for examples. It seems to me—the noble Baroness can assure me on this—that from the wording that is taken from the 2006 Act this does not exactly fall under fire safety.
For example, there is a page on the Essex County Fire and Rescue Service website about Darren, 18, of Ashingdon Road in Hawkwell. He has just joined the crew of his local fire station as the newest recruit, and he said:
“It was Firebreak which really showed me what I wanted to do with life and how I could do it. I had got into the wrong crowd and was getting in trouble with the police and then bringing that trouble with me into school and getting into worse trouble”.
His head teacher referred Darren to the “Firebreak” course—it is a long quote but I will read it—and, as Darren says,
“When I got back to school I ditched my mates and really buckled down. Almost straight away I saw my grades improving and my predicted exam results shot up. Firebreak made me realise that there is more to life than getting in trouble and mucking about and gave me something to work towards”.
That is not technically fire safety, but the benefits to the community are enormous. Another person mentioned is Craig, who is 20 and attended this course in 2005. He says:
“I was taking drugs, drinking and stealing cars. Basically I was completely off the rails. Firebreak has changed my life, I no longer drink or take drugs and am now working to become a firefighter myself”.
The Cheshire fire service signs up to missdorothy.com. I do not know whether the noble Baroness is aware of missdorothy.com. When I was Fire Minister I went to see some of the work that it is doing, which is about community safety for younger children. Given the trust placed in firefighters, and their very respected position in the community, they were engaging very young children in community safety. Part of that was about fire safety and being safe, but also about being safe in their broader lives. The Cheshire fire service is also one of the employers involved with the Prince’s Trust programme. I certainly think that nobody in your Lordships’ House would want to lose the fire service’s involvement with the Prince’s Trust. There is a 12-week personal development course, and the fire service is one of the employers doing that.
Devon and Somerset is another authority that has a personal development scheme, also called “Firebreak”, for key stage 4 pupils from 14 to 16. Its website says that it provides a
“themed educational diet designed to complement and enhance the school curriculum. It aims to raise achievement, improve self motivation, increase educational engagement”,
and aims to develop,
“practical skills, life skills, communication skills, team work”.
Looking around the country, I see that Suffolk authority is another one to engage actively with children and young people. One of its objectives is to prevent and reduce fire crime and fire, but it also wants to engage young people, and has professional staff working with the authority, to identify good practice in working with children and young people. East Sussex has a “LIFE” project and Chester has a “Respect” project.
All of those have proven successes in deterring young people not only from a life of crime but from social disorder as well. My fear is, if it was the Government’s intention, which I suggest it probably was not, that these should be charged for—and I think that, under the Government’s amendments, they would be able to be charged for—then those very young people who can benefit most from these courses would not be able to do so.
Another issue is that, if these courses were chargeable, who would pay? In many cases it would be another public authority. What we would be doing is introducing a bureaucracy to move money around the system. So it would be helpful if the Minister, perhaps not today, could reflect on the advice she was initially given that this would not be covered by fire safety. Perhaps there may be some kind of guidance that could be issued. I think that this is the kind of work that so many people in the community benefit from.
In my own authority, at Basildon fire station, Martin Trevillion leads the community safety programme, and it is an exceptional programme. Having spoken to so many young people that have benefitted from it, I would be reluctant for us to lose that programme simply through inadvertent drafting of legislation.
Finally, I want to raise one other issue, which is that of carbon monoxide safety and awareness. I am also not clear that Section 6(2)(b) of the 2004 Act, which talks about advice on how to prevent fires and on means of escape from buildings, would cover carbon monoxide safety. This is a particular issue: there have been a number of deaths and serious injuries due to carbon monoxide, and it is something that fire authorities are able to take on and work with, and I know that some of them already do so. I would not think that the noble Baroness intended that that should be charged for as well.
When at Second Reading I first raised the issue of charging for community safety, it was clear that the Government had not thought about the implications, quite inadvertently, and this had slipped through. The Minister was able to respond to those concerns very positively. I hope she understands that my raising these tonight is in exactly the same tone, as this is a service provided by the fire authorities, working with their community, which we really would be very loath to lose, if they had to charge for it. I ask the Minister—I think she has had time to reflect, or to receive enlightenment on this issue quite soon—even if she cannot give me a full answer today, to reflect on that so some guidance can be issued, because this resource that is provided by our fire and rescue services is very valuable for the community.
Lord Berkeley
My Lords, I would like to support what my noble friend has said about the problem of charging for fire advice. When I read the second part of Amendment 113—proposed new subsection (5B)—I thought, “Well, any fire authority that is able to charge will probably do so”. Is it really the Government’s intention that small businesses, and particularly charities like the Scouts and others that are not for profit, should have to pay for such advice? My experience with such businesses is that it is very hard to start up anyway. I believe that you have to get fire advice in many cases. Having to pay will make life even more difficult. I can understand why the Government want to allow fire authorities to make such charges but to do that for non-profit organisations seems to be a little hard. Perhaps the Minister could reflect on that and consider whether it could be omitted for charities and non-profit organisations.
Baroness Hanham
My Lords, I am struggling to get a response on both matters. I understand that we are working within the framework of the fire and safety Act, so whatever that includes will be included. I am very reluctant to answer the noble Baroness today. I do not have the answer. It is quite wide in terms of what we are seeking to do. The same applies to the noble Lord, Lord Berkeley. I always hate having to say that I do not know the response to something, but I will have to do so today. If the noble Baroness and the noble Lord will forgive me, I will write to them before Third Reading to make sure that there is a clear understanding of the answer to both questions. My gut feeling is that probably there is wriggle room here for the fire authorities to decide whether or not to charge, but we should be clear about that. I will write and will make sure that that response is in the Library so that we can come back to it before Third Reading, if necessary.
Baroness Hanham
Baroness Hanham
“(5A) Subject to subsection (5B), section 18A(1) does not authorise charging for action taken under section 6.
(5B) Subsection (5A) does not prevent charging for the giving of advice, other than advice of the kind mentioned in section 6(2)(b), in relation to premises where a trade, business or other undertaking is carried on (whether for profit or not).”
Lord McKenzie of Luton
“CHAPTER 2ATransfer and delegation of functions to certain authoritiesPower to transfer local public functions to permitted authorities
(1) The Secretary of State may by order make provision—
(a) transferring a local public function from the public authority whose function it is to a permitted authority;(b) about the discharge of local public functions that are transferred to permitted authorities under this section (including provision enabling the discharge of those functions to be delegated).(2) An order under this section may modify any enactment (whenever passed or made) for the purpose of making the provision mentioned in subsection (1).
(3) The power to modify an enactment in subsection (2) is a power—
(a) to apply that enactment with or without modifications,(b) to extend, disapply or amend that enactment, or(c) to repeal or revoke that enactment with or without savings.(4) An order under this section may disapply, or modify the application of, Chapter 4 of Part 1A of the Local Government Act 2000 (changing local authority governance arrangements) in relation to a county council or district council to which the order transfers a local public function.
(5) The Secretary of State may not make an order under this section unless the Secretary of State considers that it is likely that making the order would—
(a) promote economic development or wealth creation, or(b) increase local accountability in relation to each local public function transferred by the order.(6) For the purposes of subsection (5)(b), in relation to a local public function, local accountability is increased if the exercise of the function becomes more accountable to persons living or working in the area of the permitted authority to which it is transferred.
(7) The Secretary of State may not make an order under this section unless the Secretary of State considers that the local public function transferred by the order can appropriately be exercised by the permitted authority to which it is transferred.
(8) The Secretary of State may not make an order under this section transferring a local public function to a permitted authority unless the authority has consented to the transfer.
(9) Before making an order under this section, the Secretary of State must consult such persons as the Secretary of State considers appropriate.”
Lord McKenzie of Luton
My Lords, in speaking to Amendment 114, I shall speak to the other amendments in this group. Given that they each also bear the names of the Minister and the noble Lord, Lord Shipley, I have some expectation that they may be acceptable to your Lordships. The Bill currently includes provisions which enable the Secretary of State by order to transfer a local public service function from any person to its elected mayor. In Committee, we sought to amend that by widening its application to local authorities that operated a leader and cabinet executive model of governance. That amendment was eventually withdrawn.
Additionally, in Committee, we tabled amendments which were prompted by the Core Cities group. These amendments sought equivalent opportunities for the transfer and delegation of functions as were provided to the Mayor of London under the Bill. It was suggested that this approach had cross-party support among the Core Cities group, growing support from the Members of Parliament of the core cities and support from Ministers. In the event, these amendments were not moved on the final day in Committee. Over the Recess, the Government have taken the issue forward with the Core Cities group, hence the amendments today. They also cover the original proposals for transfers to mayors which are replaced.
Amendment 114 provides for the transfer of local public functions from a public authority to a permitted authority. A public function is a function of a public authority. A permitted authority includes a county council in England, a district council and an economic prosperity board. The transfer is achieved by an order of the Secretary of State and may not be made unless it considered that the order would promote economic development or wealth creation, or increase local accountability in relation to each local public function. The Secretary of State must be satisfied that the permitted authority can exercise the function appropriately and has consented to the transfer.
Amendment 115 permits the delegation to a permitted authority of a Minister’s eligible functions, mirroring the provisions of Clause 210, which cover such delegation to the Mayor of London, and on which we touched on earlier amendments. Amendment 116 allows the Secretary of State to make a scheme for the transfer of property rights or liabilities to give effect to a transfer of functions and a delegation of a Minister’s eligible functions or their revocation.
Amendment 117 imposes a duty on the Secretary of State to consider any proposals for the exercise of these powers which come from a permitted authority and to establish criteria by which they must be considered. Amendment 118 crucially sets out a robust super-affirmative procedure for any order which seeks to transfer functions to a permitted authority. Amendment 119 covers definitions. Amendments 151, 161, 163 and 241 are consequential.
Core Cities is a network of the local authorities of England’s eight largest city economies outside London. It includes Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. The cities drive their local economic areas and make a significant contribution to the national economy. They work in partnership with government to influence policy and to develop new ideas based on knowledge of what works on the ground to improve economic performance and reduce dependency. The Core Cities group has a track record of more than 15 years led by city leaders across all parties.
The powers in this amendment could be available to anywhere that meets the criteria. However, England’s core cities are the main drivers of the country’s economy outside London and the south-east. Together, their primary urban areas deliver 27 per cent of the national economy, more than London, and contain 16 million residents. The role of cities is central to delivering national economic outcomes, reducing dependency on public spending, and in driving growth, productivity and tax revenues. Supporting growth in the core cities is vital to rebalance the UK economy.
With more decentralised arrangements for governance and public finance, these cities would be able to deliver greater economic outcomes for the UK. Recent independent economic forecasts commissioned by Core Cities have demonstrated that the local enterprise partnership areas, given greater control over the drives of growth, are capable of delivering an additional 1 million jobs and £44 billion economic output over the next decade.
The Bill offers an opportunity through these amendments to create a binding narrative around other localist and decentralising policy, enabling this Government to deliver a distinctive set of urban policies and a legacy of empowered cities driving private sector growth and jobs. The Bill proposes to transfer powers from the London Development Agency and the Homes and Communities Agency to the Mayor of London, and makes provision for further ministerial delegation. Other major economic areas need the same opportunity to be able to drive growth and prosperity for their business and residents, and for the wider economy. The country needs London to do well but, to create an equitable and multicentred national economic strategy, the same chance needs to be given to other areas that are capable of growing employment. England needs a London-plus national economic policy.
It is the intention of the Core Cities group to seek these powers for its members but it will not be restricted to the core cities and their urban areas. Any economic area that fulfils the eligibility criteria could be able to request these delegations. The overarching aim of the amendment is to drive economic growth and productivity, and reduce dependency. Now is a critical moment for economic recovery and we need to boost local investment and investor confidence. This amendment would support private sector growth and jobs; create new opportunities for efficiency, innovative finance and investment; enable distinctive urban policy and a legacy of empowered cities; ensure continued buying from private sector partners on LEPs; support the implementation of a local government resource review and further incentivise local authorities and their partners; support the implementation of enterprise zones; clarify existing routes of delegation; support double devolution to local communities; support the wider restructuring of subnational economic development architecture; create a route to delegate to further emerging governance structures; and be a significant—I suggest popular—and symbolic step towards decentralisation and localism. I beg to move.
Lord Tope
I am grateful to the noble Lord, Lord McKenzie, for moving the amendment. As he rightly said, my noble friend Lord Shipley has added his name to it and was hoping and expecting to be here to speak in support of it. He has been in Manchester all day on government business. I have just heard that he has only just got on a train in Manchester, so I suspect that he will not be here in time to contribute to this debate. However, I have a fairly good idea of what he would have said had he been here, and I speak on his behalf. As someone who has been a London councillor all his adult life, I must say that I had not expected to be speaking on behalf of Core Cities. It is a rare privilege and something I do enthusiastically because I very much support these amendments.
Both this Government and the previous Administration have made firm commitments to devolution and decentralisation. The Bill now offers an opportunity to hand decision-making powers from central to local government, working in partnership with the private sector. The Government’s stated aim is to rebalance the economy, focusing on the whole of our national economic system as well as London and the south-east, enabling other places to develop their economies to boost national growth and productivity.
Devolution has happened at different speeds in different geographies. London will receive further powers through the Bill, and the devolved Assemblies already have powers that are not available directly to cities in England. Without further decentralisation there is a risk that England’s core cities, which generate 27 per cent of England’s GVA—my noble friend Lord Shipley points out that that is more than London—and other towns and cities will be unable to perform to their full potential and support nationwide growth and enterprise. Recent independent forecasts by Oxford Economics demonstrate that the core cities’ eight local enterprise partnership areas are capable of delivering an additional 1 million jobs and £44 billion GVA over the next decade, given the tools to do so.
This enabling amendment creates a route to these tools to ministerial delegation and the transfer of public service functions for economic development and wealth creation to single and combined authorities in England. Any such actions would be subject to competency tests, including strong local governance and private sector buy-in, evidence that growth can be delivered and sound arrangements to work across administrative boundaries.
The potential of the amendment would be open to any place, as the noble Lord, Lord McKenzie, has said, that can demonstrate that it can pass the competency tests that the Government will set out. It will ensure that local areas have the powers and financial autonomy to deliver local solutions to their challenges, and that further legislation will not be needed to pass these powers to cities’ civic and business leaders. Any major transfers will be subject to parliamentary scrutiny.
The amendment would support private sector growth and new opportunities for investment, ensure continued buy-in from private sector partners on LEPs, support the implementation of policy to incentivise places to deliver growth, support double devolution to local communities, and be a significant step towards decentralisation.
As the noble Lord, Lord McKenzie, has said, these amendments enjoy support from at least three sides of the House and, I hope, passive support from the fourth. Therefore, I am very pleased to be able to support them.
Lord Jenkin of Roding
My Lords, having heard the case in favour of these amendments, I am not in the least surprised that my noble friend on the Front Bench has added her name to them. My only comment is to say how much has changed since I was in charge of local authorities back in the 1980s. It is a change that is entirely welcome. This is a far more positive approach than anything I had to deal with at that time. Perhaps a veil might be drawn over that period; it was a very unhappy period for much of local government. I thoroughly support these clauses and I congratulate the core cities on the work they have done to bring all this forward.
Baroness Gardner of Parkes
My Lords, I am very impressed with the way the amendment was moved and by the universal support that there seems to be in the House on this. I do not want to be a wet blanket but I am slightly concerned about the sweeping powers that will be given to the Minister, and I should like to feel satisfied that the super-affirmative resolution that was referred to will come into force and work. It is very important, particularly as over the years we will get changes of government. The provision is universally approved of, and when I hear my noble friend Lord Jenkin, who has vast experience in this field, favouring it, then I can do nothing but agree.
Lord Beecham
My Lords, I congratulate my noble friend Lord McKenzie on moving the amendment, working very hard to ensure that it is in an acceptable form and persuading the Minister that it represents the right policy. I must congratulate the Minister and the Government on making the most significant concession, if you will, that we have had so far in terms of the Bill. This is the most localist part of the entire Bill, and the Minister and her colleagues deserve to be congratulated on that. Indeed, the noble Lord, Lord Tope, also should be congratulated. We have had an almost biblical experience tonight. The voice was the voice of the noble Lord, Lord Tope, but the words were the words of the noble Lord, Lord Shipley—however, they were none the less persuasive for that.
Incidentally, the noble Lord, Lord Shipley, has done well to be in Manchester today. Were he travelling down by the east coast main line this afternoon he would not get here. I understand that winds have blown down trees on the east coast line and things are massively disrupted. Perhaps one day somebody will do something about the rail network and make sure that these incidents are less apt to cause damage.
However, I must say in reference to the noble Lord, Lord Jenkin, that it was my pleasure to work with him, up to a point, when he chaired the Inner City Partnership committee as Secretary of State in Newcastle and Gateshead in the 1980s. I was then the leader of the council, a position that I relinquished—not before time, many people thought—some 17 years ago. It would have been helpful to have had the kind of powers conferred by this amendment—assuming it is passed, as I take it it will be—on local government.
As some of your Lordships will be aware, I am not an enthusiast for elected mayors by any means. I am therefore glad that the original restriction has been abandoned because it seems to me important that councils with the more conventional model of leader and executive should have this opportunity. Indeed, they have earned this opportunity. I refer particularly to the leader of Manchester City Council and his authority, which has blazed a trail in terms of urban regeneration and activities, not just for its authority but as one of the leading authorities in the Greater Manchester area of the Association of Greater Manchester Authorities, which now has parliamentary authority for a unique structure so far in terms of English local government.
Certainly the conferment of these wider powers is very welcome, particularly as I fear that some of the other changes in government policy will have an adverse effect on what everybody intends to happen, which is that the economic prosperity of these areas should be reinforced and, we hope, expanded.
I think that the Government erred in dismantling the regional structures, acknowledging that much of the work has to be at the sub-regional level, and therefore led by local authorities, in particular by the core cities. The disappearance, certainly in the north-east region of the Regional Development Agency has not been helpful. LEPs may be working in some places, but I do not think that they necessarily fill the gap. While I cannot speak for other parts of the country, certainly in the north-east I am bound to say with regret that an outbreak of parochialism, if not tribalism, is actually diminishing the capacity of what is a fairly compact region to deal with these issues. One hopes that the conferment of powers under this Bill will to a degree remedy that deficiency, but it is not axiomatic that authorities which are not so far being regarded as core cities will either seek these powers or use them in a collaborative way.
Later in the Bill we will talk about the duty to co-operate. It is a political duty rather than a legal one at the moment, so it remains to be seen how, in terms of planning, that duty can be strengthened. If the good intentions of this amendment are to be implemented, that will require a more constructive attitude on the part of some authorities than has been evident in the recent past. However, more than that is needed; it also requires a buy-in from a range of government departments and agencies. The Department for Communities and Local Government has set out its stall, but it remains to be seen whether other departments will, as it were, shop at that stall. There are some reasons to be concerned about that. One stems from the decision of the Government to abolish the regional offices and take back into Whitehall those civil servants up and down the country who became part of the dialogue between local areas and the Government in Whitehall. In my and others’ view, that local intelligence cannot simply be replaced by people sitting, in the case of Newcastle, in an office nearly 300 miles away, although the distances will differ. These people will not have a day-to-day acquaintance with the needs of an area or with local leaders, whether they be political or business leaders. In the north-east and no doubt elsewhere we found over many years that those who served in the Government offices became powerful and useful advocates for the regions and cities with the main departments in Whitehall. That, I think, is currently missing.
Beyond that, there is the question of what is happening to the community budgets. These are the replacement for the Total Place programme initiated at the suggestion of the Local Government Association, but adopted by the previous Government. The intention has been to pool resources across government departments and work to a common agenda which would differ according to each locality. That is the principle which has been piloted with some success. However, I have been making inquiries through Parliamentary Questions about the degree to which there has in fact been any buy-in by government departments to this agenda. It is totally unclear how much of the expenditure being authorised by departments at the local level has been applied to the concept of the community budgets. Apparently no one is even collating this information, let alone trying to ensure that departments are working with each other and their local partners on this programme. If that is the case for the policy that has been deployed until now, one has to wonder whether other departments will, in practice, fulfil the Government’s intentions—I repeat, I applaud them on adopting the policy set out in the amendment—in terms of the actual devolution of functions. If they are not prepared to co-operate and pool budgets in a joint way, will they seek to devolve functions to and through local government?
One can imagine a range of such functions, not least in the area in which my noble friend will have the good fortune to lead for the Opposition tomorrow and for some time hence, that of welfare reform. There are clear possibilities for much of the work being carried out in terms of employment, benefits and getting people from welfare into work to be done through local government and for responsibilities to be devolved in that respect. I hope that the Government will not simply wait for departments to come forward with proposals, but will positively promote the idea of piloting different approaches and services in authorities with a track record and whose capacity will in any event have to be recognised under the terms of the amendment.
It seems that this amendment has great potential for changing the way we respond to local needs and circumstances in a manner that reflects the strengths and opportunities as well as the weaknesses of a local and regional economy, and indeed those who make the decisions within it. But it needs to be driven across Whitehall. I do not know whether that would be a function of the Minister for Cities. Potentially it might be one, and I understand that the noble Lord, Lord Shipley, is an unpaid adviser in that department. After spending many years in opposition and a few years in power in Newcastle, he is well qualified to assist the Minister, if that is the position. But again, this really does need to be driven from the top of Government, let alone by the Department for Communities and Local Government, however worthy it is in this respect. It is early days of course, and I do not know whether the Minister will be able to indicate whether there have been any discussions across the departments about how these matters might be progressed. Of course, we have only just had the amendment put before us so these are early days, but it would be reassuring if the Minister could say whether, at the very least, the Secretary of State would seek to work with Cabinet colleagues, the Local Government Association and perhaps a selection of the local authorities to explore in a coherent way how, while allowing for variation and experimentation, the intentions of this very worthy amendment could be implemented. I look forward to hearing what the Minister has to say.
Baroness Hanham
My Lords, I am delighted to have been able to put my name to these amendments. There is no doubt that the core cities have worked extraordinarily hard to make sure that what they are hoping to achieve is well understood. The amendments were originally moved by the noble Lord, Lord McKenzie, at the previous stage, and we have worked on them ever since. It is very appropriate that something like this is done on a cross-party basis. As the noble Lord, Lord Beecham, said, these are big powers that are very localist in nature and will do precisely what local government has wanted for a long time. It is therefore appropriate that they are now being presented in a way that enables us all to join in.
I am grateful for the support of the noble Lords, Lord Shipley and Lord Tope, and the noble Lord, Lord Beecham, for all the questions he has asked me. I hope that I shall be able to answer some of them. However, we have learnt from him that the railway line to Newcastle is not operating because of fallen trees. That is useful to know at this stage in case we all suddenly want to run off and go there. I am also grateful to my noble friend Lord Jenkin for expressing his support. We recognise that things have moved on a long way from the days when he was a very distinguished Secretary of State who was extremely supportive of local government. But I do not think that even he at that stage could have envisaged that we would have been able to do this.
As has been said, the new clauses proposed in the amendments allow for the transfer of public functions and the delegation of ministerial functions to local authorities and other permitted authorities. They combine the amendments that allowed for the transfer and delegation of functions to local authorities as originally tabled by the opposition Front Bench in Committee with a power a transfer functions to elected mayors as set out in new Section 9HA which, as a consequence, we are now withdrawing.
Lord McKenzie of Luton
My Lords, I thank the noble Baroness, Lady Hanham, for her reply and all the noble Lords who have spoken in support of the amendments. It seems that we have unanimity, I think for the first time during our deliberations. I thank the noble Lord, Lord Jenkin, in particular. As he said, the climate has changed since he was Secretary of State. I remember some of those days with a district authority in Luton. If I except Newcastle, there was the odd Labour-controlled authority in those days to which we, even on these Benches, would not have been overly keen to transfer these sorts of powers.
The noble Baroness, Lady Gardner, asked about the superaffirmative procedure. Amendment 118 very clearly sets out that, as the Minister has described, these orders have to go through the superaffirmative process before they can proceed.
My noble friend Lord Beecham made the valid point that the Government have to play their part in all this, because Amendment 117 requires and places an onus on government to respond or to consider proposals that are made to it by core cities or whoever. I should reiterate that credit for this goes to the Core Cities Group. It originated it and raised it with us. I know that it raised it with the noble Lord, Lord Shipley, and I thank the noble Lord, Lord Tope, for speaking on his behalf today. It is good that the Government took it up over the Recess and knocked it into technical shape so that it works properly. I will not press my luck further. I beg to move.
Amendment 114 agreed.
Amendments 115 to 119 agreed.
Amendment 119A
Earl Attlee
“CHAPTER 2AOther authoritiesIntegrated Transport Authorities
In Part 5 of the Local Transport Act 2008 (integrated transport authorities etc) after section 102A insert—“CHAPTER 4General powers102B Powers of Integrated Transport Authorities
(1) An ITA may do—
(a) anything the ITA considers appropriate for the purposes of the carrying-out of any of the ITA’s functions (the ITA’s “functional purposes”),(b) anything the ITA considers appropriate for purposes incidental to the ITA’s functional purposes,(c) anything the ITA considers appropriate for purposes indirectly incidental to the ITA’s functional purposes through any number of removes,(d) anything the ITA considers to be connected with—(i) any of the ITA’s functions, or(ii) anything the ITA may do under paragraph (a), (b) or (c), and(e) for a commercial purpose anything which the ITA may do under any of paragraphs (a) to (d) otherwise than for a commercial purpose.(2) Where subsection (1) confers power on an ITA to do something, it confers power (subject to section 102C) to do it anywhere in the United Kingdom or elsewhere.
(3) An ITA’s power under subsection (1) is in addition to, and is not limited by, the other powers of the ITA.
(4) Subsection (5) applies if there is, in relation to an ITA—
(a) a Passenger Transport Executive established under section 9 of the TA 1968 for the integrated transport area of the ITA, or(b) an executive body established by virtue of section 79(1)(a) or 84(2)(d).(5) The ITA may delegate to the Executive or body the ITA’s function of taking action under subsection (1) (but not the function of determining what action to take).
102C Boundaries of power under section 102B
(1) Section 102B(1) does not enable an ITA to do—
(a) anything which the ITA is unable to do by virtue of a pre-commencement limitation, or (b) anything which the ITA is unable to do by virtue of a post-commencement limitation which is expressed to apply—(i) to the ITA’s power under section 102B(1),(ii) to all of the ITA’s powers, or(iii) to all of the ITA’s powers but with exceptions that do not include the ITA’s power under section 102B(1).(2) If exercise of a pre-commencement power of an ITA is subject to restrictions, those restrictions apply also to exercise of the power conferred on the ITA by section 102B(1) so far as it is overlapped by the pre-commencement power.
(3) Section 102B(1) does not authorise an ITA to borrow money.
(4) Section 102B(1)(a) to (d) do not authorise an ITA to charge a person for anything done by the ITA otherwise than for a commercial purpose (but see section 93 of the Local Government Act 2003 (power of ITAs and other best value authorities to charge for discretionary services)).
(5) Section 102B(1)(e) does not authorise an ITA to do things for a commercial purpose in relation to a person if a statutory provision requires the ITA to do those things in relation to the person.
(6) Where under section 102B(1)(e) an ITA does things for a commercial purpose, it must do them through—
(a) a company within the meaning given by section 1(1) of the Companies Act 2006, or(b) a society registered or deemed to be registered under the Co-operative and Community Benefit Societies and Credit Unions Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969.(7) In this section—
“post-commencement limitation” means a prohibition, restriction or other limitation imposed by a statutory provision that—
(a) is contained in an Act passed after the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force on or after the commencement of section (Integrated Transport Authorities)(1) of that Act;“pre-commencement limitation” means a prohibition, restriction or other limitation imposed by a statutory provision that—
(a) is contained in an Act passed no later than the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force before the commencement of section (Integrated Transport Authorities)(1) of that Act;“pre-commencement power” means power conferred by a statutory provision that—
(a) is contained in an Act passed no later than the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force before the commencement of section (Integrated Transport Authorities)(1) of that Act;“statutory provision” means a provision of an Act or of an instrument made under an Act.
102D Power to make provision supplemental to section 102B
(1) The Secretary of State may by order made by statutory instrument make provision preventing ITAs from doing under section 102B(1) anything which is specified, or is of a description specified, in the order.
(2) The Secretary of State may by order made by statutory instrument provide for the exercise by ITAs of power conferred by section 102B(1) to be subject to conditions, whether generally or in relation to doing anything specified, or of a description specified, in the order.
(3) The power under subsection (1) or (2) may be exercised in relation to—
(a) all ITAs,(b) particular ITAs, or(c) particular descriptions of ITAs.(4) Before making an order under subsection (1) or (2) the Secretary of State must consult—
(a) such representatives of ITAs,(b) such representatives of local government, and(c) such other persons (if any),as the Secretary of State considers appropriate.(5) Subsection (4) does not apply to an order under subsection (1) or (2) which is made only for the purpose of amending an earlier such order—
(a) so as to extend the earlier order, or any provision of the earlier order, to a particular ITA or to ITAs of a particular description, or(b) so that the earlier order, or any provision of the earlier order, ceases to apply to a particular ITA or to ITAs of a particular description.(6) Power to make an order under this section includes—
(a) power to make different provision for different cases, circumstances or areas, and(b) power to make incidental, supplementary, consequential, transitional or transitory provision or savings.(7) The Secretary of State may not make an order to which subsection (8) applies unless a draft of the statutory instrument containing the order (whether alone or with other provisions) has been laid before, and approved by a resolution of, each House of Parliament.
(8) This subsection applies to—
(a) an order under subsection (1), other than one that is made only for the purpose mentioned in subsection (5)(b);(b) an order under subsection (2), other than one that is made only for that purpose or for imposing conditions on the doing of things for a commercial purpose.(9) A statutory instrument that—
(a) contains an order made under this section, and(b) is not subject to any requirement that a draft of the instrument be laid before, and approved by a resolution of, each House of Parliament,is subject to annulment in pursuance of a resolution of either House of Parliament.””
Earl Attlee
My Lords, in moving Amendment 119A, I shall also speak to Amendments 119B, 119D, 119DA and 119BA, in the name of the noble Lord, Lord McKenzie of Luton. The amendments will allow integrated transport authorities and their executive bodies, passenger transport executives, to properly undertake activities that benefit or contribute to their purposes. The enabling power goes beyond the existing incidental powers and can extend outside their geographical boundaries and immediate hinterland. These bodies are not local authorities and will therefore not have the benefit of the general power of competence that is already contained in the Bill.
The matter was debated in another place and in this House on 20 June. In response to an amendment tabled by the noble Lord, Lord McKenzie, the Secretary of State for Transport sought agreement to include suitable provisions in the Localism Bill, and this was given. The amendment provides an appropriate broader general power for integrated transport authorities and their passenger transport executives. For consistency, the power will also be provided to combined authorities and economic prosperity boards.
The main reason why these bodies need such a power is that local authorities using similar powers to the ITA’s existing incidental and well-being powers have been the subject of successful legal challenge. Integrated transport authorities and their passenger transport executives have therefore been unwilling to undertake activities and enterprises that are not expressly prescribed in law. The view that they could be successfully challenged has been supported by legal opinion obtained by the Passenger Transport Executives Group. An example provided by PTEG of the activities that they are seeking to use the new powers for is the provision of back-office functions for transport smart cards, similar to Oyster cards in London, to local authorities not in an ITA area or in another integrated transport authority area. Because providing and charging for such an activity is not expressly permitted by existing legislation, they fear legal challenge.
The potential benefits of integrated transport authorities being able to let their passenger transport executives undertake such operations for others is that they will be able to realise the economies of scale from providing similar services to a number of bodies. The bodies wishing to use these services will also benefit from obtaining the service more cost-effectively from an organisation that is already doing something very similar. The cost savings realised by both provider and client can be passed on to council tax payers. In the case of the service provider, this will be the metropolitan district councils in the area concerned. In the case of the client organisations, this will be either local authorities outside an ITA area or the metropolitan district councils within another ITA area.
The suggested amendment to government Amendment 119B in the name of the noble Lord, Lord McKenzie of Luton, is unnecessary because we are satisfied that where it serves some purpose in relation to a body’s function, collective action is already covered in the drafting of the new broader general power to be found in proposed new Clause 102B(1). Noble Lords will be aware that the parliamentary draftsmen undertake their work with great care. We are at one with what powers we want to grant and we should trust the parliamentary draftsmen to get it right on our behalf.
On government Amendment 119D, I have just explained to your Lordships our argument for providing integrated transport authorities and PTEs with wider general powers. This amendment seeks to do the same for combined authorities and economic prosperity boards, which are intended to provide stable governance mechanisms for long-term strategic decision-making on economic issues. In bringing groups of relevant authorities together, both are expected to be based upon meaningful economic geography. Where a combined authority is established for an area, it will be responsible for the transport functions in place of an ITA as well as having economic development and regeneration powers. Currently, one combined authority has been established in Greater Manchester. Economic prosperity boards are similar to combined authorities but without the transport functions. There are presently no economic prosperity boards.
Given that broader powers are being given to integrated transport authorities, it is essential that these powers are also made available to combined authorities and economic prosperity boards to ensure that they can effectively discharge their economic objectives. Indeed, given the close interrelationship between economic development and transport, it would be unreasonable not to confer these broader powers upon both bodies and would undermine their ability to deliver sustainable economic growth. I beg to move.
Lord Berkeley
My Lords, this is an interesting group of amendments. The Minister explained their purpose very well, but it seems to me that the pendulum is swinging from local authorities, PTEs and ITAs et cetera getting a bit frightened of what they are allowed to do to something that is beginning to look like a Henry VIII clause in the transport field. That is probably quite a good thing, actually. It seems that they are going to be given powers to do anything. Perhaps the noble Earl could explain whether this could include, in respect of the integrated transport authorities or the passenger transport executives, things such as operating rail franchises if they felt like it. Could they take a bigger role in sponsoring and deciding how the franchises were run, and what would be the extent of their financial commitment to it?
Could those authorities go as far as was recently planned in Merseyside: for Merseytravel to run a vertically integrated railway and take over the infrastructure from Network Rail? It was interesting that that authority had been lobbying to do this for at least five years, if not 10, but then just as the McNulty report, which might have encouraged them to do it, came out it decided that it was not going to do it because it was too risky. However, it is an interesting option that may be open to other authorities. What will they do in running trams and operating buses? The prospect of even better integration between different types of services would be good, if it happened.
Lord Beecham
My Lords, I very much endorse my noble friend’s observations but, like him, I also have one or two questions about how things might work. I come from an area that has been well served by a passenger transport authority and executive for many years. We have a pretty good bus system and a metro system, which was initiated by a Conservative Government in the 1970s—ad idem again across the Floor—and extended more recently. It is very successful but its powers in relation to private bus companies are circumscribed. That is a source of frustration, at least to that passenger transport executive, and I wonder whether the Bill will actually open the possibility of a different relationship between the authority and the bus companies. Incidentally, I suppose I ought to declare an interest as the holder of a bus pass and a concessionary metro pass.
I know from my own experiences as a ward councillor, but also from general issues arising from transport, that the feeling is that there is insufficient leverage in the hands of the executive in relation to private contractors. That is one question, and, again, if it is not possible to give an answer immediately, subsequently will be quite satisfactory.
The other issue relates to the Highways Agency. One can well envisage circumstances in which the role of the Highways Agency may be quite important to the transport plans of an executive, and, indeed, to the delivery of transport services. Again, in my experience, it is not always the most amenable government agency that one has to deal with. I know that the experience of the noble Earl, Lord Attlee, is different—we have had a conversation to that effect—but, certainly, there is at least some potential for a different relationship between an authority with the powers that will conferred on it by this Bill and the Highways Agency.
Going back to where we left the discussion on core cities, the same principle applies. Will there be buy-in not only from the Department for Transport but in particular from that executive agency, which is very influential and needs to co-operate with the body charged with the delivery of local transport? Of course, the Highways Agency does not deal, generally speaking, with the road network in towns and cities. Nevertheless, in a sub-regional area such as Tyne and Wear, Greater Manchester or elsewhere, there is a relationship between their activities and programmes and those of the executive. I wonder whether any enlightenment might be cast upon that issue. Again, I do not necessarily expect a reply off the cuff, and if it is more convenient I would be happy to receive a written communication in due course.
Lord McKenzie of Luton
My Lords, I shall speak briefly in support of these amendments, subject to any issues that come out of the very forensic questioning of my noble friends. Amendment 119BA seeks simply to ensure that the powers conferred can be pursued either alone or collectively with one or more ITA. I accept entirely the Minister’s confirmation that it can and that this amendment is not necessary. I am pleased that that is on the record. As the noble Earl said, we moved amendments in Committee to achieve a general power of competence for ITAs similar to that given to fire and rescue authorities in the Bill. These replicated amendments moved by my honourable friend Barbara Keeley in another place. The Minister there explained that these were matters for the Department for Transport and were under consideration. That, indeed, was the response when we debated the amendments in Committee here, but the Government committed to take matters further, which they have done. They have fulfilled their obligation to the House and we are happy to support these amendments.
Earl Attlee
My Lords, I am grateful for the welcome to these amendments. The noble Lord, Lord Berkeley, asked about extension of powers possibly covering rail franchising and Henry VIII powers in this amendment. Primary legislation would be required to allow the ITAs to be involved in franchising outside their area. If such changes are required, the Government will look for a legislative opportunity.
The noble Lord, Lord Beecham, mentioned the Highways Agency. He will understand that the Highways Agency is concerned with the strategic road network, but I am confident that it will work closely with local authorities. The noble Lord also asked about powers relating to local bus services in ITA areas. ITAs set a broad strategy for public transport, including buses. Most bus services in an ITA area are run on a commercial basis. ITAs are responsible, where they see fit, for topping up—in other words, adding extra services. There are some detailed questions and I will ensure that we get a full answer to all the questions. A copy will of course be placed in the Library. I beg to move.
Baroness Hanham
“Passenger Transport Executives
(1) In Part 2 of the Transport Act 1968 (integrated transport authorities etc) after section 10 insert—
“10A Further powers of Executives
(1) The Executive of an integrated transport area in England may do—
(a) anything the Executive considers appropriate for the purposes of the carrying-out of any of the Executive’s functions (the Executive’s “functional purposes”),(b) anything the Executive considers appropriate for purposes incidental to the Executive’s functional purposes,(c) anything the Executive considers appropriate for purposes indirectly incidental to the Executive’s functional purposes through any number of removes,(d) anything the Executive considers to be connected with—(i) any of the Executive’s functions, or(ii) anything the Executive may do under paragraph (a), (b) or (c), and(e) for a commercial purpose anything which the Executive may do under any of paragraphs (a) to (d) otherwise than for a commercial purpose.(2) Where subsection (1) confers power on the Executive to do something, it confers power (subject to section 10B) to do it anywhere in the United Kingdom or elsewhere.
(3) The Executive’s power under subsection (1) is in addition to, and is not limited by, the other powers of the Executive.
10B Boundaries of power under section 10A
(1) Section 10A(1) does not enable the Executive to do—
(a) anything which the Executive is unable to do by virtue of a pre-commencement limitation, or(b) anything which the Executive is unable to do by virtue of a post-commencement limitation which is expressed to apply—(i) to the Executive’s power under section 10A(1),(ii) to all of the Executive’s powers, or(iii) to all of the Executive’s powers but with exceptions that do not include the Executive’s power under section 10A(1).(2) If exercise of a pre-commencement power of the Executive is subject to restrictions, those restrictions apply also to exercise of the power conferred on the Executive by section 10A(1) so far as it is overlapped by the pre-commencement power.
(3) Section 10A(1) does not authorise the Executive to borrow money.
(4) Section 10A(1)(a) to (d) do not authorise the Executive to charge a person for anything done by the Executive otherwise than for a commercial purpose, but this does not limit any power to charge that the Executive has otherwise than under section 10A(1)(a) to (d).
(5) Section 10A(1)(e) does not authorise the Executive to do things for a commercial purpose in relation to a person if a statutory provision requires the Executive to do those things in relation to the person.
(6) Where under section 10A(1)(e) the Executive does things for a commercial purpose, it must do them through—
(a) a company within the meaning given by section 1(1) of the Companies Act 2006, or(b) a society registered or deemed to be registered under the Co-operative and Community Benefit Societies and Credit Unions Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969. (7) In this section—
“post-commencement limitation” means a prohibition, restriction or other limitation imposed by a statutory provision that—
(a) is contained in an Act passed after the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force on or after the commencement of section (Passenger Transport Executives)(1) of that Act;“pre-commencement limitation” means a prohibition, restriction or other limitation imposed by a statutory provision that—
(a) is contained in an Act passed no later than the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force before the commencement of section (Passenger Transport Executives)(1) of that Act;“pre-commencement power” means power conferred by a statutory provision that—
(a) is contained in an Act passed no later than the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force before the commencement of section (Passenger Transport Executives)(1) of that Act;“statutory provision” means a provision of an Act or of an instrument made under an Act.
10C Power to make provision supplemental to section 10A
(1) The Secretary of State may by order make provision preventing the Executive from doing under section 10A(1) anything which is specified, or is of a description specified, in the order.
(2) The Secretary of State may by order provide for the exercise by the Executive of power conferred by section 10A(1) to be subject to conditions, whether generally or in relation to doing anything specified, or of a description specified, in the order.
(3) The power under subsection (1) or (2) may be exercised in relation to—
(a) all Executives,(b) particular Executives, or(c) particular descriptions of Executives.(4) Before making an order under subsection (1) or (2) the Secretary of State must consult—
(a) such representatives of Executives,(b) such representatives of local government, and(c) such other persons (if any),as the Secretary of State considers appropriate.(5) Subsection (4) does not apply to an order under subsection (1) or (2) which is made only for the purpose of amending an earlier such order—
(a) so as to extend the earlier order, or any provision of the earlier order, to a particular Executive or to Executives of a particular description, or(b) so that the earlier order, or any provision of the earlier order, ceases to apply to a particular Executive or to Executives of a particular description.(6) Power to make an order under this section includes—
(a) power to make different provision for different cases, circumstances or areas, and(b) power to make incidental, supplementary, consequential, transitional or transitory provision or savings.(7) A statutory instrument containing an order to which subsection (8) applies (whether alone or with other provisions) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
(8) This subsection applies to—
(a) an order under subsection (1), other than one that is made only for the purpose mentioned in subsection (5)(b); (b) an order under subsection (2), other than one that is made only for that purpose or for imposing conditions on the doing of things for a commercial purpose.(9) A statutory instrument that—
(a) contains an order made under this section, and(b) is not subject to any requirement that a draft of the instrument be laid before, and approved by a resolution of, each House of Parliament,is subject to annulment in pursuance of a resolution of either House of Parliament.”(2) In section 10(1) of the Transport Act 1968 (powers of a Passenger Transport Executive)—
(a) in paragraph (xxvii) (power to invest sums not immediately needed) for “any sums which are not immediately required by them for the purposes of their business” substitute “their money”, and(b) in paragraph (xxviii) (power to turn unneeded resources to account) omit “so far as not required for the purposes of their business”.(3) In section 22 of the Transport Act 1968 (orders under Part 2 of that Act to be subject to annulment) after subsection (2) insert—
“(2A) Subsections (1) and (2) of this section do not apply in relation to orders under section 10C of this Act (but see subsections (7) to (9) of that section).”
(4) In section 93(9) of the Local Government Act 2003 (authorities with power under section 93 to charge for discretionary services) before paragraph (b) insert—
“(ab) the Passenger Transport Executive of an integrated transport area in England;”.(5) In section 95(7) of the Local Government Act 2003 (power to authorise certain authorities to do for commercial purposes things that they can do for non-commercial purposes) in the definition of “relevant authority” before paragraph (b) insert—
“(ab) the Passenger Transport Executive of an integrated transport area in England;”.”
Baroness Hanham
“Economic prosperity boards and combined authorities
(1) In Part 6 of the Local Democracy, Economic Development and Construction Act 2009 (economic prosperity boards and combined authorities) after section 113 insert—
“General powers of EPBs and combined authorities113A General power of EPB or combined authority
(1) An EPB or combined authority may do—
(a) anything it considers appropriate for the purposes of the carrying-out of any of its functions (its “functional purposes”),(b) anything it considers appropriate for purposes incidental to its functional purposes,(c) anything it considers appropriate for purposes indirectly incidental to its functional purposes through any number of removes,(d) anything it considers to be connected with—(i) any of its functions, or(ii) anything it may do under paragraph (a), (b) or (c), and(e) for a commercial purpose anything which it may do under any of paragraphs (a) to (d) otherwise than for a commercial purpose. (2) Where subsection (1) confers power on an EPB or combined authority to do something, it confers power (subject to section 113B) to do it anywhere in the United Kingdom or elsewhere.
(3) Power conferred on an EPB or combined authority by subsection (1) is in addition to, and is not limited by, its other powers.
113B Boundaries of power under section 113A
(1) Section 113A(1) does not enable an EPB or combined authority to do—
(a) anything which it is unable to do by virtue of a pre-commencement limitation, or(b) anything which it is unable to do by virtue of a post-commencement limitation which is expressed to apply—(i) to its power under section 113A(1),(ii) to all of its powers, or(iii) to all of its powers but with exceptions that do not include its power under section 113A(1).(2) If exercise of a pre-commencement power of an EPB or combined authority is subject to restrictions, those restrictions apply also to exercise of the power conferred on it by section 113A(1) so far as that power is overlapped by the pre-commencement power.
(3) Section 113A(1) does not authorise an EPB or combined authority to borrow money.
(4) Section 113A(1)(a) to (d) do not authorise an EPB or combined authority to charge a person for anything done by it otherwise than for a commercial purpose (but see section 93 of the Local Government Act 2003 (power of EPBs, combined authorities and other best value authorities to charge for discretionary services)).
(5) Section 113A(1)(e) does not authorise an EPB or combined authority to do things for a commercial purpose in relation to a person if a statutory provision requires it to do those things in relation to the person.
(6) Where under section 113A(1)(e) an EPB or combined authority does things for a commercial purpose, it must do them through—
(a) a company within the meaning given by section 1(1) of the Companies Act 2006, or(b) a society registered or deemed to be registered under the Co-operative and Community Benefit Societies and Credit Unions Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969.(7) In this section—
“post-commencement limitation” means a prohibition, restriction or other limitation imposed by a statutory provision that—
(a) is contained in an Act passed after the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force on or after the commencement of section (Economic prosperity boards and combined authorities)(1) of that Act;“pre-commencement limitation” means a prohibition, restriction or other limitation imposed by a statutory provision that—
(a) is contained in an Act passed no later than the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force before the commencement of section (Economic prosperity boards and combined authorities)(1) of that Act;“pre-commencement power” means power conferred by a statutory provision that—
(a) is contained in an Act passed no later than the end of the Session in which the Localism Act 2011 is passed, or (b) is contained in an instrument made under an Act and comes into force before the commencement of section (Economic prosperity boards and combined authorities)(1) of that Act;“statutory provision” means a provision of an Act or of an instrument made under an Act.
113C Power to make provision supplemental to section 113A
(1) The Secretary of State may by order make provision preventing EPBs or combined authorities from doing under section 113A(1) anything which is specified, or is of a description specified, in the order.
(2) The Secretary of State may by order provide for the exercise by EPBs or combined authorities of power conferred by section 113A(1) to be subject to conditions, whether generally or in relation to doing anything specified, or of a description specified, in the order.
(3) The power under subsection (1) or (2) may be exercised in relation to—
(a) all EPBs,(b) all combined authorities,(c) particular EPBs,(d) particular combined authorities,(e) particular descriptions of EPBs, or(f) particular descriptions of combined authorities.(4) Before making an order under subsection (1) or (2) the Secretary of State must consult—
(a) such representatives of EPBs or combined authorities,(b) such representatives of local government, and(c) such other persons (if any),as the Secretary of State considers appropriate.(5) Subsection (4) does not apply to an order under subsection (1) or (2) which is made only for the purpose of amending an earlier such order—
(a) so as to extend the earlier order, or any provision of the earlier order, to a particular EPB or combined authority or to EPBs or combined authorities of a particular description, or(b) so that the earlier order, or any provision of the earlier order, ceases to apply to a particular EPB or combined authority or to EPBs or combined authorities of a particular description.(6) Power to make an order under this section includes—
(a) power to make different provision for different cases, circumstances or areas, and(b) power to make incidental, supplementary, consequential, transitional or transitory provision or savings.”(2) For section 117(2) and (3) of the Local Democracy, Economic Development and Construction Act 2009 (affirmative procedure applies to orders under Part 6 other than certain orders under section 116) substitute—
“(2) An order to which subsection (2A) applies may not be made unless a draft of the statutory instrument containing the order (whether alone or with other provisions) has been laid before, and approved by a resolution of, each House of Parliament.
(2A) This subsection applies to an order under this Part other than—
(a) an order under section 113C(1) that is made only for the purpose mentioned in section 113C(5)(b),(b) an order under section 113C(2) that is made only for that purpose or for imposing conditions on the doing of things for a commercial purpose, or(c) an order under section 116 that amends or revokes provision contained in an instrument subject to annulment by resolution of either House of Parliament. (3) A statutory instrument that—
(a) contains an order under this Part, and(b) is not subject to any requirement that a draft of the instrument be laid before, and approved by a resolution of, each House of Parliament,is subject to annulment by resolution of either House of Parliament.””
“Further amendments
(1) In section 146A of the Local Government Act 1972 (application of provisions to certain joint and other authorities)—
(a) in subsection (1) for “or (1A)” substitute “, (1ZD) or (1ZE)”, and(b) after subsection (1ZC) (which is inserted by section 9 of this Act) insert—“(1ZD) An Integrated Transport Authority is not to be treated as a local authority for the purposes of section 111 above (but see section 102B of the Local Transport Act 2008).(1ZE) Neither an economic prosperity board, nor a combined authority, is to be treated as a local authority for the purposes of section 111 above (but see section 113A of the Local Democracy, Economic Development and Construction Act 2009).”(2) In section 93(7) of the Local Government Act 2003 (provisions that do not count as prohibitions on charging for the purposes of section 93(2)(b)) after paragraph (c) insert—
“(d) section 100(2) of the Local Transport Act 2008 (well-being powers of Integrated Transport Authorities and combined authorities),(e) section 102C(4) of that Act (Integrated Transport Authorities),(f) section 10B(4) of the Transport Act 1968 (Passenger Transport Executives), and(g) section 113B(4) of the Local Democracy, Economic Development and Construction Act 2009 (economic prosperity boards and combined authorities).””
Lord Beecham
Lord Beecham
Amendment 119F and the other amendments in the group refer to the additional permitted governance arrangements contained in the schedule. The legislation as drafted allows the Secretary of State to make provision for changes in such arrangements. The thrust of these amendments is to ensure that the changes stem from proposals made by the individual authorities affected, rather than being initiated from Whitehall and the Secretary of State himself. The amendments go on to refer to the principles upon which such changes should be made. Clause 9BA(6) says that:
“The conditions are … that the operation by the authority of the proposed arrangements would be an improvement on the arrangements which the authority has in place for the discharge of its functions”.
That seems to me an unnecessarily narrow prescription. They ought to be, as the Bill goes on to say,
“likely to ensure that the decisions of the authority are taken in an efficient, transparent and accountable way”.
My amendment incorporates that phrase, but goes on to say that the arrangements would be appropriate for all local authorities, or for any particular local authority, to consider and—this is the important part of the amendment—that the arrangements are consistent with the principles of localism and representative local democracy, a phrase that, as far as I am aware, does not appear anywhere else in the Bill.
In our discussion at Second Reading and from time to time in Committee, noble Lords on all sides of your Lordships’ House stressed the importance of representative local democracy as a necessary part of any localism agenda. That should be reflected in the consideration of any Government’s arrangements. I do not think that it is necessary to confine any changes to where they would after all, in the view of the Secretary of State, represent an improvement. There is no particular need, in my judgment, for that. They should certainly not represent any lessening of the efficacy of those arrangements, but they could be different without necessarily representing an improvement, in the eyes of the Secretary of State, as long as they meet the criteria of transparency, efficiency and accountability and are consistent with the principles of localism and representative local democracy. That should be sufficient.
I hope that the Minister, if she is dealing with these amendments, will regard them as friendly rather than unfriendly. They are designed to reinforce what is said to be the thrust of the legislation but in a way that, first, places the initiative with the local authority rather than the Secretary of State for providing that the criteria are met, but secondly—again, I stress this—emphasises that the principles of representative local democracy should be met in any such change. I beg to move.
Baroness Hanham
My Lords, we debated both these amendments in Committee. We accept that most proposals for additional governance models will come from local authorities. That will be how the impact will go given their expertise as practitioners. However, Amendment 119F still fails to recognise that ideas and proposals about new governance models may also come from other sources. The amendment says that the Secretary of State cannot do anything without having a proposal put to him. We need to make it clear that those proposals could come not only from local government but from local government representatives, think tanks or research units. Therefore, they might not be sufficiently well formed for the Government to take them on board. Saying that the Secretary of State may implement something only after a suggestion has been put forward may be restrictive, although the noble Lord is also saying that the Secretary of State should not be able to dream up a form of governance and then try to implement it. That is not the sense of this legislation. I hear what the noble Lord says, but that is not the intention.
In any case, if the Secretary of State decided to do that, he would be forcing local authorities to do something that they may not want to do and that is not the intention behind these provisions. We are not going to force local authorities. They would not have to adopt arrangements set out in any regulations made under this provision. This is an empowering clause not a diktat clause.
In Amendment 119G, the conditions that the noble Lord suggests are, if I may put it politely, less useful for local authorities than the existing ones. It does not seem unreasonable that there should be an explicit requirement that any proposed new arrangements should be an improvement on what is already there. There are three areas of governance listed in the Bill and anything else would have to be an improvement on what is there. I believe that the existing conditions give clarity for local authorities that may be considering submitting a proposal and we would not want to change that.
Finally, I remind noble Lords that any regulations made under this provision would simply extend the range of choice of governance models available to local authorities. They would not have to adopt those arrangements. They would be one more in addition to that list of three if somebody can think of something remarkable to do.
I hope that with that explanation the noble Lord will be able to withdraw his amendment.
Lord Beecham
I am grateful to the Minister although it is entirely unclear who would judge and on what basis whether the change was an improvement or not. However, in the circumstances, I beg leave to withdraw the amendment.
Charities Bill [HL]
(12 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Phillips of Sudbury
Lord Phillips of Sudbury
My Lords, it is a strange feeling to be moving a group of amendments that comprise the totality of the amendments to this 250-page Bill. But this is a consolidation Bill. As one who has served on the Joint Committee on Consolidation Bills, I know well enough that on consolidation one is not allowed to change substantive law. I emphasise that the amendments that I have tabled and the comments that I am about to make bear no ill reflection whatever on the Bill team or the parliamentary draftsman. Indeed, I have had the utmost co-operation from all of them.
However, with a Bill that affects the voluntary sector in particular, one must seek to make that measure as comprehensible as possible. I could not refrain from tabling a set of amendments to attempt to make the crucial definition clauses of the Bill fractionally more understandable to the lay reader. The last thing one wants in the world when legislating for the voluntary sector is to force it into the hands of lawyers who will do their best but who, I am afraid, are expensive beasts. I speak as one of 53 years duration. The amendments taken as a group effect no change but they see the definition of “charitable purpose” or “charitable purposes” brought into one clause, Clause 2, which will then enable Clause 11 to be removed from the Bill. In practical terms, that will be of considerable benefit.
Before explaining why, I should say to the Committee that I am aware that Section 73 of the Charities Act 2006 requires a review of the 2006 Act, which is about to commence, which will end with a report being placed before Parliament. Indeed, I was instrumental, with others, in getting that unusual provision written into the 2006 Act. But there is nothing in the Act to say that anything shall flow from the report. I produced this amendment determined that at least in the interim years—one could be talking about quite a few years, even an eternity, before any amendments are made to this Bill—the definition clause should be a little more understandable.
Why is it more understandable? I wish sometimes that one could annex to technical amendments such as this a copy of the clause they seek to amend, incorporating the amendments. The amendments seek to get rid of Clause 11, which defines “charitable purposes” or “charitable purpose” differently from the definition in Clause 2. Clause 1 defines “charity” in a way which is difficult to reconcile. It is reconcilable but only by dint of considerable legal subtlety. It is already difficult to reconcile Clause 1 with Clause 2. The last thing in the world one wants is for the unwary reader—that is to say he or she who does not plough all the way through the Bill—then to find that there is a different definition of “charitable purposes” in Clause 11. As I say, that in itself represents a significant practical improvement in the Bill because the definition of “charitable purpose” or “charitable purposes”—those two phrases are used in different places in the Bill—and the definition of “charity” itself are the linchpin definitions of the entire Bill.
I had hoped to simplify the Bill further. However, I received a communication from the Bill team which made clear that the extent of the use of the phrase “charitable purposes” or “charitable purpose” is unknown. The Committee may think it rather extraordinary that we have no place to which anyone, including the parliamentary draftsman, can go to be informed about all the uses of the phrase “charitable purposes” throughout our primary and secondary legislation. There is no such source of information. In the age of technical wizardry that defect could and should be resolved, not just for the benefit of the experts but for the many who will have to interpret this and many other statutory provisions in the future. As one of the letters that I received from the Bill team stated, there are what they call “known unknowns”—I like that phrase—which is another way of saying “We haven’t a clue”. The document continues:
“While we are able relatively easily to search the database of General Public Acts for references to ‘charitable purposes’, the same cannot be said of subordinate legislation (as defined for the purposes of clause 2), not all of which is stored in the available databases, or private Acts, hardly any of which are in the available databases”.
I have tabled my modest but, I think, significant amendment in the hope that the Government may say that they think it is an improvement but in the expectation that, given the complexity of the whole—I nearly used a Saxon word—business, they will need further time in order to clear the decks as regards simplifying these crucial clauses. I look forward to hearing what my noble friend has to say in replying to these amendments. I am grateful for the Committee’s patience.
Baroness Finlay of Llandaff
I rise briefly to support the spirit of what the noble Lord, Lord Phillips of Sudbury, has said because when people are setting up charities they often try to find ways around the complexity of registering a charity. There is an enormous number of charities and sometimes it is extremely difficult to be clear whether they truly are charities. I say that as a patron of several small charities from their outset. One often has a sense of when a “charitable purpose” really is a charitable purpose and when it is stretching the limits, but that has implications for donors and the Charity Commission. The reference to “known unknowns” is reasonable. In many aspects of life we know that new situations will arise but we do not know what they will be. The danger is that matters can be contested at a later stage. The noble Lord has thrown down a rather wonderful challenge to the Government. I look forward to hearing their response.
Baroness Smith of Basildon
My Lords, this may be one of those rare occasions when I am pleased not to be the Minister answering the noble Lord’s questions. As the Minister knows, we welcome this consolidation. The comments that have been made highlight what the legislation seeks to achieve. The noble Lord raised similar issues at Second Reading. I have to confess that he lost me somewhat when he spoke in that debate. However, I have carefully read the points that he made. It strikes me that we are attempting to make the legislation more straightforward, less complex and easier but we are not making it easy. I noted that the noble Lord mentioned making the measure more understandable to the lay person. I am not sure that we are ever able to make such legislation more understandable to the lay person. This is very much a lawyer’s issue. My noble friend Lord Boateng has queried whether people need a lawyer to help them set up a charity. If the noble Lord, Lord Phillips, will forgive my saying so, I fear that we have two lawyers and three opinions on this issue as it seems to comprise an argument between lawyers.
I confess that I do not understand the legal complexities which would allow me to make a distinction between “charitable purpose” or “charitable purposes”. I cannot see the difference between those two phrases. However, I fully understand the necessity to get definitions right so as to avoid long drawn out arguments in court. I have carefully read the report of the Joint Committee on Consolidation Bills. We should be grateful to it for considering the points that we put to it. It has also considered the point that the noble Lord has made. All I can do is to seek advice on this from the Minister. I am sure that she has received legal advice on whether this is a justifiable concern. Is she able to share that legal advice with us? If there is an issue around the definition, how significant will that be in terms of interpretation? Her advice would be helpful in enabling the Committee to reach a conclusion on this matter and in reassuring us that the Bill does what it seeks to do and that the definition is satisfactory.
Baroness Verma
My Lords, I start by thanking all noble Lords who have taken part in this important but short debate. I welcome the opportunity to try to explain the Government’s position as clearly as I can.
I welcome the knowledge and expertise of my noble friend Lord Phillips in charity law and his assiduousness in scrutinising legislation that affects charities. I know that he has taken a very close interest in the consolidation Bill. Earlier this year he raised a number of points with the noble and learned Lord, Lord Carswell, the chairman of the Joint Committee on Consolidation Bills. He has also since then discussed various points with the Bill team in considerable detail. As a result, we have been able to make some important drafting improvements at the Joint Committee stage and we are extremely grateful to my noble friend for that.
The amendments tabled by my noble friend concern the relationship between Clauses 2 and 11. I know that my noble friend's object here is to make further drafting improvements. However, the discussions we have engaged in with him have indicated that his concerns go deeper than that. As a result, we have already undertaken to address the underlying problem that he has raised. This can be done only outside the consolidation process. I shall explain that in a little more detail in a moment but perhaps I may just set the context for this discussion. Clauses 2 and 11 reproduce the existing law as it has stood since the passing of the Charities Act 2006. We are not aware of anyone having expressed concerns about these provisions at the time of the passing of the 2006 Act. Furthermore, at no point in the consultation process on the present Bill has anyone expressed any concerns about the relationship between Clauses 2 and 11. The draft Bill was the subject of full public consultation in 2009 and has the support of the charities sector and the Charity Commission.
I should explain that Clauses 2 and 11 contain two subtly different definitions of “charitable purpose”, one of a very general application and the other of a much more limited application. Two types of suggestion have been made about the relationship between these clauses. The first involves changing the law; the second aims simply to improve the drafting of the Bill. The suggestion between Second Reading and the Joint Committee proceedings was of the first type. It was suggested that instead of the two subtly different meanings of “charitable purpose” applying in different contexts, there should be one definition of “charitable purpose” applying across the board. Unfortunately, substituting a single definition of “charitable purpose” cannot be achieved without changing the law. It is not permissible within the constraints of the consolidation process for the Bill to change the law. So no amendments were tabled at Joint Committee to Clauses 2 or 11, and the Joint Committee agreed to the clauses as drafted.
The amendments that my noble friend has now tabled aim to improve the drafting of the Bill without changing the law. However, we are not convinced that this is the right response to the real issue that my noble friend has raised. The fundamental issue—it is one that we recognise—is that it is awkward to have two definitions of “charitable purpose” applying in different contexts. The amendments that the noble Lord has tabled do not remove this awkwardness; they merely present it differently. We think that the right thing to do is not to make drafting changes to the Bill, but instead to seek to address the underlying issue.
We recognise that it could be a desirable simplification to substitute the two definitions applying in different contexts by a single definition applying across the board. However, it is clear that this cannot be done through this Bill. I have therefore already suggested to my noble friend that it can be considered as part of the forthcoming review of the Charities Act 2006. It appears that there is a case for simplification here, and we believe that the review is the right place to explore thoroughly the legal changes that would be required to achieve this simplification.
I return to the amendments before us. The drafting of the consolidation Bill is a very technical business and the provisions have already been very clearly considered and given a clean bill of health by the Joint Committee. However, my noble friend has tabled what amount to detailed drafting points so I will explain why we resist these amendments.
I will begin by saying that we think that the way in which the definitions of “charity” and “charitable purpose” are structured in the Bill is an improvement on the current legislation. In particular, putting the 1993 Act definitions in Part 1 of the Bill next to the 2006 Act definitions makes them more visible to the reader. In the Government's view, my noble friend’s amendments would not improve this drafting. First, we think that the amendments would damage the logical structure of Part 1 of the Bill by taking a definition that belongs in Chapter 2 and putting it into Chapter 1 where it does not belong. I will explain that in a little more detail. As is clear from its title, Part 1 of the Bill is concerned with the definitions of “charity” and “charitable purpose”. Chapter 1 of Part 1 deals with definitions that apply generally—that is, in legislation generally and in documents, and in England and Wales as well as, for certain purposes, Scotland and Northern Ireland. Chapter 2 of Part 1 deals with definitions that have a much more limited application—that is, they apply only in England and Wales, and only to provisions deriving from the Charities Act 1993. The different scope of the two chapters is signalled by the chapter titles. Chapter 1 is headed “General” and Chapter 2 is headed “Special provision for this Act”. It is not a drafting improvement to interfere with this structure.
Furthermore, we think it is undesirable to confuse the picture for readers in Scotland and Northern Ireland by injecting into Chapter 1 a definition that concerns the interpretation of provisions that relate only to England and Wales. Chapter 1 affects the law of Scotland and Northern Ireland for certain purposes relating loosely to fiscal matters.
Finally, in our view the amendments would be inconsistent in that they would leave two alternative definitions of “charity” in Chapters 1 and 2. If the two alternative definitions of “charitable purpose” are brought together in the way suggested, it would seem illogical to leave the two definitions of “charity” in separate places.
I am keen that progress on this Bill is not unduly delayed. I therefore ask the noble Lord to accept the assurances that I have offered him. Of course, he will have a further opportunity to debate this matter when the 2006 Act comes under review later in the year. I am sure that my noble friend’s expertise would be very welcome at any further deliberations on the matters of concern that he has raised in his amendments. We are willing to ensure that the underlying issue to which he has helpfully drawn attention is addressed in its proper forum. On that basis, I invite him to withdraw his drafting amendment.
Lord Phillips of Sudbury
My Lords, I am grateful to my noble friend the Minister for her careful response. I have to say that some of the refinements in her reply will bear a little more scrutiny of Hansard on my part. She made the point about Part 1 and Chapter 1 applying to England and Wales generally, although to Scotland and Northern Ireland to some extent. That point is not apparent at all from the way in which Clause 11 is currently drafted. While I will of course withdraw the amendment tonight, as I told her I would, I would like to engage in further discussion on this issue in the hope that something can be done to improve things before we get to Report. I will just tell the House—because it is another measure of what a nonsense we have got our affairs into—that last year the Finance Act created an entirely new definition of “charitable purposes” with a schedule extending that definition that runs to eight pages. I am afraid that our legal system has burgeoned out of all sense and has become counterproductive. With that vindictive spirit, I withdraw my amendment.
Localism Bill
(12 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Hanham
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, in Committee, I gave a commitment to consider the noble Lord’s amendments aimed at removing the Secretary of State’s powers to make regulations prescribing rules and restrictions about the discharge of functions of local authority executives by area committees. I am delighted to say that today we are bringing forward amendments which achieve those aims.
Amendments 120 to 131 and 160 delete in their entirety the Secretary of State’s powers to make regulations in relation to area committees and remove unnecessary conditions, which previously applied to the creation of such committees, including the maximum area that a committee could cover. In future, councils will be free to set up whatever area committees they wish and give them whatever executive functions they consider appropriate without having to rely on regulations made by the Secretary of State. I hope that noble Lords will agree that this is a good deregulationary part of my work. I beg to move.
Lord Jenkin of Roding
I very much welcome what my noble friend has said. I shall refer to this a little later when we come to the Amendment 155 group.
Lord Beecham
My Lords, I welcome the noble Baroness’s acceptance of the concerns that were raised and their reflection in this group of amendments. If we could have similar co-operation over the rest of the Bill, we would be delighted—and surprised.
Baroness Hanham
“(iiia) by an area committee,”
“(aa) by an area committee,”
(a) by an area committee, or(b) ”
(a) by an area committee, or(b) ”
“(5A) Where by virtue of this section any functions may be discharged by an area committee, then, unless the senior executive member otherwise directs, the committee may arrange for the discharge of any of those functions by an officer of the authority.”
““senior executive member” means—(a) in the case of a mayor and cabinet executive, the elected mayor;(b) in the case of a leader and cabinet executive (England), the executive leader.”
Baroness Hanham
Baroness Hanham
My Lords, I gave a similar commitment in Committee to consider the amendments which aimed at removing overly prescriptive and complicated arrangements on necessary regulation-making powers in order to simplify and strengthen local government’s scrutiny arrangements. Having considered the issues carefully, including with the Centre for Public Scrutiny, I am pleased to bring forward amendments which achieve a number of these aims.
On the removal of unnecessary restrictions on referral of matters by non-committee members, Amendments 134 to 139 remove prescription about matters which may be referred to a scrutiny committee by councillors who are not members of the scrutiny committee. In future, these councillors will not be restricted to the referral of local government matters only. Instead, they may refer a wider range of matters to scrutiny committees for consideration, thus enhancing their role as advocates of their local communities.
In terms of referral of matters to the scrutiny committee, the amendments broaden the range of issues that can be brought before that committee by non-committee members. It will, of course, remain for the scrutiny committee to decide what course of action is appropriate following any referral, as is the case now.
With regard to local improvement targets and local area agreements, Amendments 140, 142 and 147 remove the link between local government scrutiny and local improvement targets in local area agreements. Partner authorities will be required to have regard to the reports and recommendations of scrutiny committees that relate to any of their functions exercised in relation to the committee’s area or residents of that area. This empowers local authorities to hold partner authorities to account for wider activities they undertake, thus ensuring that local people have a say on matters that affect them.
On the simplification of local government scrutiny arrangements, our remaining Amendments 132, 133, 141, 143, 144, 145, 146, 148, 149, 150 and 164 place the scrutiny committees of non-unitary district councils into an equivalent position to those of other authorities. They enable scrutiny committees in non-unitary district councils to hold partner authorities to account, and at the same time the amendments greatly simplify the scrutiny provisions and remove delegated powers of the Secretary of State.
I hope that noble Lords will agree that these amendments represent an improvement to the provisions, and will therefore be happy to accept them.
Lord Beecham
My Lords, I confess that I find it difficult to keep up with the speed of the amendments, but I will try. I hope that noble Lords will forgive me if I have misunderstood something. I say again that I welcome the thrust of the amendments in this group. However, I am not clear about Amendment 133, which refers to page 215 of the Bill. It appears to delete a reference to scrutiny of crime and disorder matters. I may be wrong, but as I read it, the amendment takes out the obligation or possibility of an overview and scrutiny committee scrutinising the police. I may have that wrong: it does not sound right as I say it. However, looking at the drafting, I wonder whether the amendment has that effect. New Section 9F states:
“An overview and scrutiny committee of a local authority may not discharge any functions other than … its functions under this section and sections 9FA to 9FJ, … its functions under section 19 of the Police and Justice Act”.
I would like confirmation that it will still be possible to scrutinise such matters.
I presume that the passenger transport authorities that we have just referred to, with their extended powers, would potentially be subject to scrutiny as a local authority partner. If that could be confirmed, I would be delighted and would congratulate the Minister on this group of amendments.
Baroness Hanham
My Lords, I am sure that there is a fantastic explanation for this, but I am bound to say that at the moment I do not have it to hand. I am sure that the intention is to ensure that scrutiny continues, because that is our whole purpose. If I get a note in the coming seconds, I will share it with the noble Lord. If I do not, I will write with the answer and apologise for not being able to respond in person.
Baroness Hanham
(i) the authority’s area, or(ii) the inhabitants of that area.”
(i) the relevant committee is a non-unitary district council committee, or(ii) ”
“non-unitary district council committee” means—
(a) an overview and scrutiny committee of a district council for a district in a county for which there is a county council, or(b) a sub-committee of such a committee,”
“relevant partner authority”, in relation to a relevant committee that is a non-unitary district council committee, means—
(a) the county council for the county concerned, or(b) any person (other than the district council concerned) who is a partner authority in relation to that county council for the purposes of Chapter 1 of Part 5 of the Local Government and Public Involvement in Health Act 2007, other than a chief officer of police.”
Lord Beecham
Lord Beecham
My Lords, the amendment deals with matters affecting a more controversial element of the Bill: namely, the position relating to elected mayors. It deals with the power of the Secretary of State to make various regulations and prescriptions concerning the election of such mayors, to which new Section 9N in the schedule also relates. I note that the Electoral Commission has taken the view that:
“Elections for Mayor are often exciting local affairs, with colourful personalities clashing on issues relevant to their area”.
That is an interesting piece of publicity for the concept, which my noble friend Lord Adonis will undoubtedly confirm. However, there are some reservations, to put it mildly, about the strength of the argument behind it, which suggests that elected mayors are a superior form of local governance calculated to promote greater interest in local democracy and a higher turnout.
The Lord Bishop of Birmingham
My Lords, I listened with interest to the argument of the noble Lord, Lord Beecham. I bring before the House an amendment that assumes that there will be a process for elected mayors in the foreseeable future. I was part of a cross-party community group from Birmingham that met the Secretary of State for Communities and Local Government last Thursday. We found that our concerns were listened to favourably. They are reflected in the amendment that is before the House this evening. The city of Birmingham is expecting to have a vigorous debate leading up to a referendum in May 2012 on whether to have an elected mayor. As some noble Lords will know, Birmingham has a long tradition of vigorous civic leadership, not least in the past 20 years of the present arrangements. Now, in the largest local authority in the country, in a creative city of many faiths and cultures that trades in a global market, there is a desire for continued and even enhanced strong and vigorous governance.
In the event of a yes vote, Amendment 151C seeks to have an election for mayor as soon as possible after the referendum. There are two benefits of this that we put to the Secretary of State, which we think he heard favourably, especially when there are vital financial, social and cultural decisions to take. First, we seek to minimise the potential paralysis in leadership over many months between a referendum and an election for a mayor, and secondly—which should be of interest to all of us at this stage—we seek to keep the cost of any mayoral election to a minimum. I do not doubt that there are factors about other elections under consideration, but I ask the Minister to respond favourably to this amendment. If Birmingham and other cities in the country say yes to having a mayor, we expect the mayor to be in post without delay and at minimum cost.
Lord Adonis
I strongly support what the right reverend Prelate has just said. In my role as director of the Institute for Government, I joined the cross-party civic delegation from the city of Birmingham that met the Secretary of State last week and raised the issue that the right reverend Prelate has just described about what will happen after the referendum next May if there were to be a positive vote. The view strongly held in the city of Birmingham, and in other cities where the issue of an elected mayor is being debated at the moment, is that it is unacceptable for there to be a full year’s delay between a positive referendum result and the first election of a mayor to take charge of the city’s governance. Essentially, we would have a year of paralysis in which the existing administration would be a lame duck. My noble friend Lord Beecham holds strong views against mayors, but I imagine he will agree that it is not a good idea to leave the government of a great city in a state of limbo for a full 12 months.
The purpose of the amendment tabled by the right reverend Prelate, to which I put my name, is to encourage the Secretary of State to align the first mayoral election with any other election that may be taking place in those cities between May 2012 and May 2013, which is fully within the discretion that the Secretary of State has to make regulations specifying the date of the first election. Even if there were not to be an election in those cities earlier than May 2013, it may be that there is a case for the first election of the mayor to take place before that date.
The Institute for Government published a report a few weeks ago highlighting the paralysis that would follow a positive election result if no election for the mayor were to take place for a year. In that report, we suggested that the first election for the mayor should take place in September 2012. If there is to be an election for police commissioners across the country in November 2012—a matter to be debated by the House later this week—aligning the first mayoral election with the police commissioner election would make a great deal of sense. It may be that the will of the House and of Parliament will be to move the police commissioner election to a later date. Whatever the date of the first elections to take place in cities with a positive referendum result, the first elections after May 2012 should, by the will of the leaders of those cities, take place a great deal sooner than May 2013, and if it is possible to align them with other elections that would be the best course.
What we are looking for from the noble Baroness is a sympathetic response to the argument for an early mayoral election where there is a positive vote in the referendums next May and any encouragement that she can give to the concept of aligning the first mayoral election with any election that might take place sooner than May 2013. In particular, if police commissioner elections are to take place in autumn 2012, any words of encouragement she can give as to the willingness of the Government to bring forward regulations that would align the first mayoral elections with those police commissioner elections would be very well received in Birmingham and in the other cities where there may be a positive referendum result next May.
Baroness Hanham
My Lords, I thank noble Lords for raising these matters. I have an immediate answer to the noble Lord, Lord Beecham, about whether the orders would come to Parliament: where there is a proposal for a referendum, that is an affirmative order in Parliament. I think I explained that in Committee. It is Parliament’s decision brought forward at the time of the secondary legislation. Mayors will not be forced on any cities, as I have said on many occasions, but cities will be obliged to take it into consideration in a referendum and those will all come to Parliament.
Amendment 151A seeks to take away the power of the Secretary of State to make regulations setting the date of elections for, and the terms of office of, elected mayors. As the noble Lord, Lord Adonis, and the right reverend Prelate the Bishop of Birmingham have said, Amendment 151C seeks to provide that any first mayoral elections shall take place no later than the first date of elections in the area. As the noble Lord, Lord Adonis, explained, that would be any election that was likely to take place after a referendum on 15 November 2012.
As I have explained previously, the regulating power would allow for an earlier first election than May 2013. Such an approach would be in line with previous practice, where first elections for mayors have on occasion taken place in October, before reverting to the usual May cycle. I know the right reverend Prelate and the noble Lord, Lord Adonis, have had discussions with the Secretary of State about this. The most encouraging I can be is to say that the issue is well understood; no decisions have yet been taken on it but we are due to produce secondary legislation before the end of the year and decisions will be taken before then. I am sure the noble Lords will be involved in some of the discussions on that. I cannot give a firm commitment at the moment that that will happen but, as I say, there is a very clear understanding of the proposals made and the reasons and rationale behind them.
Those were not very long answers but they were not very long amendments. I ask noble Lords not to press their amendments in the light of my response.
Lord Beecham
My Lords, I am grateful to the noble Baroness for her assurance that parliamentary approval will be required before designating any authority to have a referendum. However, I am surprised and disappointed that it should be thought necessary for the Secretary of State to prescribe a referendum when it is evident from the absence of any requisition by a mere 5 per cent of the electorate that there is any such interest from the local community to start with.
Moving on to the amendment tabled by the right reverend Prelate and supported by my noble friend, I find it surprising that it should be thought that paralysis would ensue if there was a delay of a year between the referendum and a subsequent mayoral election. It could even have been argued that it would have been better to have followed the precedent of the 1973 local government reorganisation, when a shadow authority was elected and did not actually take office for a year. That actually gave the incoming authority time, on new boundaries and all the rest of it, to assimilate the problems of the area and develop an appropriate response, changing structures and the like. To suggest that it is essential to move straight into the position where the nature of the authority changes during the year strikes me as illogical, potentially disruptive and damaging, and in fact onerous for the newly elected incumbent, should there be any newly elected incumbents to that position. He or she would be entering into office half way through the year, unable to do very much at all about the existing budget, and contending with structures that would be difficult to rearrange in a short time.
Moreover, in terms of cost, surely it would be less expensive to have an election coinciding with the normal municipal election in the following year. I quite take the point made by the noble Baroness that there have been some instances of mid-year referendums, but if one is looking at the issue of cost it is, I should have thought, clearer that there would be a cost saving to have them at the same time as the local election. Indeed, that point has been made for us, conveniently, in connection with the debate over the timing of the elections for police commissioners, if indeed we are to have those.
Lord Adonis
Is my noble friend aware that in only one of the cities in which referendums are going to be held next May will there be a municipal election in 2013? In all of the other cities there would need to be a special election held in May 2013 if the election of the mayor were to take place anyway. I assume that my noble friend does not think that paralysis is an issue. I do not understand the read-across with shadow authorities at all—a shadow authority has been created, whereas the mayor by definition has not been elected, so that point does not hold. I assume that my noble friend, in his antipathy to mayors, does not think that it is a good idea to delay by a full two years the interval between a positive referendum result and the first election of a mayor.
Lord Beecham
I am certainly tempted to think so, but I will resist the temptation. In any event, what would be the worst thing of all, I suspect, is the coincidence of a police commissioner election and a mayoral election. We would then have two elections which would be, and I quote again,
“exciting local affairs, with colourful personalities”,
with one running for mayor and one running for police commissioner, and, quite conceivably, on conflicting manifestos. I think that that would be an absolute recipe for confusion and the worst of all possible worlds. We will revert, no doubt in a couple of days, to the issue of the timing of any police commissioner elections, but if the current intention of the Government is to proceed in November, then I think that that makes the proposition advanced by the right reverend Prelate and my noble friend quite difficult and untenable. I hope that the Government will think again, or think further, about the proposition that has been put to them, and will in particular avoid that coincidence.
For myself, I think the shadow proposition would actually be better, but of course there is not an amendment to that effect, so I cannot very well move it. I think the worst of all possible worlds would be police commissioner elections and mayoral elections in however many authorities there will be—there are 11 authorities coming forward. So I hope that the Government will, on this occasion, prove unbending. I beg leave to withdraw my amendment.
Baroness Hanham
Baroness Hanham
My Lords, I am giving prezzies all through this part of the Bill. I cannot believe it. It seems an unusual situation, which is why I am commenting. In Committee, my noble friends Lord Tope and Lord Palmer of Childs Hill tabled amendments aimed at removing any delay between the time a local authority resolves to change its governance arrangements and the implementation of that change. During the debate, I stated that I had some sympathy with the points raised by noble Lords, particularly about the time that has to elapse before changes in governance arrangements can be implemented.
Having taken this matter further, I am happy to tell noble Lords that Amendments 152 to 154 build on their amendments to deliver the desired effect. In essence, these amendments provide that, after a passing of a resolution to change governance arrangements, a local authority can make that change, in the case of moving to the mayoral model, three days after the election of the first mayor; in the case of moving from the mayoral model, three days after the end of the term of office of the serving mayor; and, in all other circumstances, including moving to the committee system, at the first annual meeting after the resolution or such other later annual meeting specified by the local authority itself in its resolution to change governance arrangements. Local authorities therefore will be able to resolve at any time to change their governance arrangements and implement those changes without any unnecessary delay and at a time that best suits their circumstances.
In Committee, there were clearly concerns that there was a hiatus between a proposal put forward for new governance and its being able to be implemented. It seemed quite a long time, so we have taken account of that and I hope the amendments make it clear that there need not be any delay. I beg to move.
Lord Tope
My Lords, I thank the Minister for expressing her sympathy for what we were saying so well tonight. We of course welcome these amendments. I had the distinct impression that because of this not being perhaps a major part of the Bill, the Government had not properly taken account of the effect that if those councils which wished to change their governance arrangements now, as soon as they are able to under this Bill, had whole council elections, as we have in London and a number of other parts of the country, they would be waiting until after 2014 to be able to make the changes. Those councils which had whole-council elections this year would have to wait another four years to do it. That made no sense so I am pleased that the Minister recognised that and I welcome these amendments.
The amendments will be particularly welcome in a number of councils—certainly ones in London that I know of—which have, in effect, already changed their governance arrangements but hold meetings of the executive after the committee meetings. The meeting of the executive lasts for five minutes and agrees with every decision just taken by the committee. That is the procedure they use in order to get around the system as it is at the moment. It would clearly be even more of a nonsense if that sort of thing were to carry on for another two or three years. I welcome these amendments very much and I know that they will be welcomed in a number of councils, including my own, which are intending to make these changes as soon as the law permits.
Lord Beecham
My Lords, the ingenuity of the noble Lord’s colleagues defies description. I certainly welcome this sensible amendment. However, it is timely to say a word in favour of the leader and executive model and, in particular, to draw attention to the one part of the recent publication by the noble Lord, Lord Adonis, with which I agree. In relation to elected mayors, the paper makes a strong point. I told him that I agreed with something he had written and he was surprised. The relevant part is the emphasis that he makes about the need for a strong and independent scrutiny function, with which I entirely agree under whatever system is operated—be it mayoral, leader and executive or a straight committee system.
There are those who are still in love with the old-style committee system; the notion that you have a collection of Socratic city elders engaged in philosophical dialogue about the affairs of state in a particular borough or authority. I am bound to say that that does not accord with my own experience, particularly after serving for many years as chairman of committees, leader of the council, and so on.
When I departed to the Siberian power station of the arts and recreation committee, having given up the leadership and any other executive position—by choice I may say; it was self-imposed exile—I discovered that as a back-bench member of the traditional committee system one’s influence was pretty limited. When you are in the chair you can move things on quite briskly: you have an agenda and you get it through. When you are a back-bench member you usually have a political group meeting beforehand. It may last about an hour and there are 12 or 15 of you, which gives an average of four or five minutes each. The point of the formal meeting is to get it over with as quickly as possible. In reality, very little of the purported scrutiny takes place in the traditional committee system nor is there very much influence over policy.
That was summarised for me most effectively one day—I hope your Lordships will forgive this brief anecdote. I had missed a committee meeting of the arts and recreation committee but went to the next one. I read the minutes, which said that a member had raised a question about birds eating the grass seed in the Leazes Park allotments. I thought to myself, “Has it really come to this?”. We had an £800 million budget, with goodness knows how many problems and opportunities to debate, and the most the member could think of to raise at a committee meeting was birds eating grass seed at an allotment. I do not say that that entirely characterises the committee system, but there is some danger of that happening.
The main thrust of my, perhaps somewhat tedious, observations is to recommend that, whatever the circumstances, there must be a strong and independently sourced scrutiny role, not only to hold the executive to account, because perhaps too much of scrutiny has been based on a retrospective look at the actions of an executive, but to look forward, and, as it should be, in an unwhipped forum, at policy, development and so on. That is not incompatible with a committee system, but in reality, in my experience, it rarely took place that way. It needs a push for strong scrutiny and I hope that irrespective of the provisions of the Bill, the Government will encourage authorities to maintain and enhance that scrutiny role, whatever type of authority they are and whatever model of governance they adopt. I certainly would not oppose these amendments to give councils the option to choose their own system.
Baroness Hamwee
My Lords, my noble friend, who I understand has executive responsibility for grass seed in the London Borough of Sutton, along with allotments and other matters, would have wanted to have come back to say that these amendments are not about the merits of any particular system, but about local decisions about what is appropriate for each local authority.
I think that the noble Lord, Lord Beecham, would agree that scrutiny is a developing art rather than a science, and that the experience of different systems over the past 10 years has contributed to an extension of that expertise.
This is not much of an anecdote I am afraid, but my first experience of scrutiny was as a member of what we then called the performance review committee, which was formed largely to respond to what the Audit Commission had to say about what was going on in the authority. My goodness, things have moved a long way since then. I agree with the noble Lord that if scrutiny is to be good, it needs to be much more constructive than simply looking back and commenting on decisions and actions that have been taken.
I do not think that what underlies these amendments needs in any way threaten the development of scrutiny. Further, I should declare an interest as a member of the advisory board at the Centre for Public Scrutiny. It will be interesting to see how the art of scrutiny develops further under another mix of arrangements across authorities.
Baroness Hanham
My Lords, I was fascinated by the ruminations of the noble Lord, Lord Beecham, on the committee system. He had some lovely anecdotes and we enjoyed them enormously. The fact is that whether or not the noble Lord likes the committee system, it is now going to be part of the governance arrangements that local councils can decide to use. The important aspect of the amendment is to ensure that there is no hiatus in any change of governance and that it can be implemented immediately. We all know what happens when there is a gap and you have to wait a long time to implement another stage.
I agree with my noble friend Lady Hamwee about scrutiny. Nothing in these arrangements would stop a local authority from having scrutiny committees. If it has a committee system, it can have a scrutiny system running alongside those arrangements. Nothing here would put those arrangements under threat. In broad terms, the noble Lord, Lord Beecham, may have supported these amendments, although he did have a little beef, to which we all listened with great interest, about the committee system. I beg leave to—
Lord Taylor of Holbeach
My Lords, perhaps we could reconsider government Amendment 152.
Baroness Hanham
“(3) Subject to subsection (2) and section 9MB(2), the local authority may take steps for the purposes of preparing for the change or implementing it (including steps relating to transitional arrangements).
(4) If the local authority is not currently operating a mayor and cabinet executive and the change does not provide for the local authority to operate a mayor and cabinet executive, a “relevant change time” for the purposes of subsection (2) is a time during—
(a) the first annual meeting of the local authority to be held after the resolution to make the change in governance arrangements is passed, or(b) a later annual meeting of the local authority specified in that resolution.(5) If the local authority is not currently operating a mayor and cabinet executive and the change provides for the local authority to operate a mayor and cabinet executive, a “relevant change time” for the purposes of subsection (2) is—
(a) a time during the third day after the day of the declaration of the result of the poll at the first election of the mayor, or(b) if a person is returned as the mayor at that first election without a poll being taken, a time during the third day after the day on which a poll would have been taken.(6) If the local authority is currently operating a mayor and cabinet executive and the change provides for the local authority to cease to operate a mayor and cabinet executive, a “relevant change time” for the purposes of subsection (2) is a time during the third day after”
Lord Jenkin of Roding
Lord Jenkin of Roding
My Lords, noble Lords may recollect that on several occasions during the Committee stage I was moved to criticise and protest about the mass of detailed prescriptive measures in the Bill, with the prospect of more to come through the battery of regulations that are foreshadowed in the legislation. My main point can be stated very simply: at the centre of Part 1 is the welcome provision that gives local authorities a general power of competence. Whereas in the past they could do only what statute allowed them to do, now they will have the same competence as individuals. In other words, at a stroke local authorities can cast off the shackles of government control. Yet at almost every point in this Bill, in every part and schedule, there are pages and pages of directions going into the minutest detail of how local authorities must implement these provisions.
As I pondered this my mind went back to what is, I am afraid, another anecdote in the form of an old political joke. A communist orator was haranguing the crowd saying, “It’s the rich who have their dinners at the Ritz hotel and the poor have to go to Smokey Joe’s. But when the red revolution comes and you get your freedom, it will be the rich who will have to go to Smokey Joe’s and you’ll be able to eat your dinner in the Ritz”. The little man at the back put up his hand and said, “I’d rather go to Smokey Joe’s”. The orator said, “When the red revolution comes and you get your freedom, you’ll damn well do what you’re told”.
The local authorities associations have made it very clear that they dislike being told how to do things. They dislike being told how to write letters, how to conduct referendums, how to co-operate and much else besides. I voiced their dissatisfaction and I was not alone. In all parts of the House, noble Lords supported my protests, and at times I became quite heated.
My noble friend Lord Tope, who is very experienced in these matters, noted that there has been a culture in Whitehall whereby they feel they have a duty to tell local authorities how to carry out their functions. However, he also noted that the local authorities themselves have absorbed that culture to the extent that they now expect to be told how to do things. My noble friend on the Front Bench has already indicated some movement in this and we are very grateful.
Before the Recess, I sought out my right honourable friend Greg Clark, the Minister of State in charge of the Bill. He agreed to meet me with a deputation from the Local Government Association and London Councils. At that meeting, which happened a few days after the start of the Recess, we set out our concerns and provided him with a long list of detailed provisions, which we believed could be dropped without affecting the purposes of the Bill.
After discussion, the Minister agreed. He agreed that his officials and those of the associations should get together during the Recess with a view to agreeing what might be dropped. Last week I was sent a long letter from the department setting out the amendments whose purpose Ministers were minded to accept, others which they were reluctant to accept, and some where decisions still have to be made. It was not everything but it is a very good start. I expressed my pleasure both to the officials and to the Minister.
The House has already welcomed Amendments 120 to 131 removing the powers to make regulations in respect to area committees and conditions which apply to the creation of such committees. We have also just accepted Amendments 132 to 150, substantially simplifying the scrutiny provisions, and these certainly stemmed from the discussions.
I am told other amendments will be tabled about the frequency and conduct of referendums. We will also come to the amendments on the right to challenge, Amendments 197E to 197G, where there is to be guidance instead of statutory prescription. There are also amendments on the community right to buy, Amendments 203, 203B and 203C.
These are a very welcome start and there is the prospect of more to come, especially on planning. Some of my amendments in the group, led by Amendment 155, have been dealt with, and I warmly welcome the government amendments in the group.
I end by picking out two of my amendments—it would be tedious to go through the lot—that have not been accepted so far. They are Amendments 158 and 159 on referendums, and Amendment 204 on the duty to co-operate. On referendums, there are two distinct issues: first, when and in what circumstances a referendum should be held; and, secondly, how they should be conducted. On the first issue, it would seem sensible to deal with that on each occasion that it comes up in the Bill, because they may differ from case to case. On the second issue, however, it really is necessary to stop telling local authorities how to suck eggs. They have great experience in running referendums and they should be trusted to do that properly, not have to be told how to do it.
Amendment 204 refers to the duty to co-operate set out in Clause 98. I really do not believe that local authorities need to be told how to co-operate. They, after all, have been co-operating with each other for a very long time and it is an impertinence to have to spell out in the Bill how they are supposed to do it. They are well accustomed to doing it and they should be trusted. I hope that my noble friend may be able to comment on both the referendums and the duty to co-operate.
I referred at the beginning of my speech to the culture—perhaps it might be better called a mindset—whereby Whitehall feels that it has to tell local authorities how to conduct their functions, while the local authorities expect to be told. If the general power of competence is to mean anything in practice, that culture—that mindset—has to be changed. The best way to start changing it is to stop doing it. I beg to move.
Baroness Hamwee
My Lords, unless the Minister is about to move the government amendments—I was wondering whether she was going to do that—perhaps I should keep going.
Baroness Hanham
Perhaps I will move those amendments—that is, I will speak to them. I am constantly being reminded about that, and quite rightly too. They are Amendments 156, 157 and 162. In Committee, as the noble Lord, Lord Jenkin, has reiterated, there are a number of provisions in Schedule 2 to the Bill which noble Lords considered were either overly prescriptive or unnecessary. While I have not been able to act on all of their concerns, Amendments 156 and 157 remove provisions in relation to the actions a local authority must take following a referendum about a change in governance model. I hope that that will be another of the deregulatory ways that we deal with today.
In doing so, these amendments put beyond any doubt that local authorities must act in accordance with the wishes of local people as expressed at a referendum. In light of the Delegated Powers and Regulatory Reform Committee’s comments we have also tabled Amendment 162, which provides that regulations made under Section 9MG in relation to the conduct of governance referendums will be subject to the affirmative resolution procedure.
Baroness Hamwee
My Lords, I was intending to comment on only one of the noble Lord’s amendments. I agree very much with the thrust of his comments but I would simply take up with him whether at this point we should be dealing with Clause 98. I am concerned about applying the general points that he has made at this stage to a very contentious part of the Bill. As he said, Amendment 204 would delete the provision for statutory guidance about the duty to co-operate, which is, in full, a:
“Duty to co-operate in relation to planning of sustainable development”.
One would have had to be in a very faraway country to be unaware of how contentious “sustainable development” and its application have become—interestingly, led by the Daily Telegraph—over the last two or three weeks.
I find it difficult to make a judgment about the need or otherwise and the desirability or otherwise of statutory guidance without debating the substantive duty. I have always had a concern about legislation purporting to tell local authorities how to co-operate—I share that very much with my noble friend—but without discussing the whole substantive provision, I find it difficult to come to a view as to whether or not statutory guidance is desirable. It is very difficult to take this proposition along with the others and, as I say, I very much agree with the points that he has made where they arise in other parts of the Bill.
Lord McKenzie of Luton
My Lords, I follow the noble Baroness, Lady Hamwee, on this point. Your Lordships’ House should give the noble Lord, Lord Jenkin, great thanks for the diligence with which he has pursued this issue right from the start of the Bill. He has been consistent in challenging the unnecessary powers that have littered the Bill and, going through the list before us tonight, I do not have any problem with the amendments, with the possible exception of Amendment 204. As the noble Baroness says, planning has become, almost overnight, incredibly contentious. We are not now going to reach the substantive provisions until October and I think that it would be better to view them in the round and as a whole. It would be quite difficult to see the lack of guidance somewhere in the system relating to the duty to co-operate. It is a departure and a new issue in planning. It is the replacement of regional planning. It is very important that we get it right.
I accept the noble Lord’s point that when an individual authority is going to consult it does not need guidance on that. Local authorities are well experienced in doing that, but this is guidance in the context of some new planning requirements and it would be premature to do away with the prospect of government having some guidance on the generality; not just bilateral consultations and relationships between authorities, but multilaterally and where the sub-region fits. The guidance that might flow from this could be really helpful in that regard.
I do not wish to detract from the fantastic job the noble Lord has done in leading the charge on these issues. That is the only issue I take with the list that is before us.
Lord Beecham
My Lords, I warmly congratulate the noble Lord, Lord Jenkin, on his numerous amendments, particularly those he has moved this evening, with the possible exception—I agree with my noble friend Lord McKenzie—of Amendment 204. It is not that I wish to see detailed prescription about how the duty to co-operate should be exercised. My concern has been about what will happen in the event that local authorities do not co-operate. I have voiced that concern on previous occasions. There are cases where there are difficulties on land allocation for housing and that kind of issue where there needs to be some mechanism to resolve a dispute or to be available when co-operation is not forthcoming. That apart, I certainly endorse the noble Lord’s view about the highly detailed prescription around referendums. Indeed, one could go further. I notice in new Section 9MC, for example, that regulations include,
“the manner in which a petition is to be presented to a local authority”.
That is presumably on one knee, held up on a cushion or something. It is bizarre. There is far too much of all that.
I also cannot understand how anyone can believe that a change of governance in the town hall is going to excite the local electorate. It is just arguable that the mayoral referendum might, although as I indicated, turnouts would not suggest a huge demand. But if an authority chose to go from a committee system to a leader and executive system, I do not think that that would be much argued about and discussed in heated fashion in the ward that I represent, the one represented by the noble Lord, Lord Shipley, or frankly anywhere.
This whole referendum process, which we will debate in a different context later on, is going too far. It may be that the Secretary of State now fancies himself as Napoleon III—possibly not. But it is too easy a device to resort to. God help us if we have a series of referendums about this at great cost with very little participation. It is the wrong mechanism. Councils should be trusted in ordinary circumstances—I take the point about a change to the mayoral system—to come to their own conclusions about the form of governance. It is not a matter about which the electorate is in the least concerned. If people were, they could exercise their views at the ballot box in the ordinary way.
I am very much in sympathy with the noble Lord’s amendments and when we return to referendums in a different context later I hope that there will be some cross-party support. I agree with my noble friend Lord McKenzie that we need to look again at the issue of the duty to co-operate, which is in a different category.
Baroness Hanham
My Lords, again we are having a major discussion on the amount of regulation in the Bill and the amount that we can try to remove as time goes on. My noble friend Lord Jenkin has been very clear all the way through that he thinks that there is too much prescription within the legislation. Sometimes I have agreed with him as in the area committees on which we have removed all the regulation today and sometimes we believe that there is a rationale for that amount of detail in the Bill. Some of what I will say falls along those lines. Where we have been able to take parts out as in my previous amendments we have done so, but there are still areas where—I hate to disagree with my noble friend Lord Jenkin—we are not quite on the same track.
I will briefly go through the amendments that my noble friend has tabled and give my reasons why we may not be able to accept them. Amendment 155 deletes new Sections 9MD and 9ME from Schedule 2 to the Bill. These new sections replicate the safeguards which the previous Government sought to establish and which this House approved, so I hope that we will have support from noble Lords opposite. They enable the Secretary of State to ensure that local people can have their say on governance arrangements if needed—for example, in cases where referendums have not been held when required or where unreasonable arrangements or timeframes are being proposed.
It could be argued that these powers are not necessary given the provisions in new Section 9N, but we do not believe that to be the case. Orders under that new section can require only a mayoral referendum and not referendums on any other form of governance—unlike the provisions in new Sections 9MD and 9ME.
Amendments 158 and 159 would remove the ability of the Secretary of State to make regulations about the conduct of governance referendums. As I have tried to explain, I have listened carefully during the course of our proceedings to concerns about the amount of delegated powers, but I am afraid that I am not going to be able to agree with the amendments. As with many provisions in Schedule 2 to the Bill, the power in new Section 9MG to make provision about the conduct of local governance referendums replicates an existing power in the Local Government Act 2000. Regulations were last made under the 2000 Act in 2007. Our broad intention is to replicate these regulations when bringing forward new secondary legislation under this provision in the Bill. The current regulations cover all aspects of organising and conducting polls at governance referendums, including the opening hours of polling stations and the content of ballot papers, ensuring polls are held in accordance with the practices for an election.
Given the importance of the referendum’s subject matter and the fact that the result will be binding on the council concerned, I think that not only are these regulations needed but that the level of detail about the procedure to be followed is appropriate. It is vital for local people to be assured that robust, fair, open and consistent arrangements are put in place for governance referendums in order for them to feel that their vote will count.
Should noble Lords accept our Amendment 162, regulations made under new Section 9MG will be subject to affirmative resolution procedure. Accordingly, I hope that noble Lords will have the opportunity to debate and consider the content of the regulations before they are made.
Amendment 159A seeks to delete the Secretary of State’s power in new Section 9N to make an order requiring specified local authorities to hold a mayoral referendum. This power is central to delivering the coalition agreement commitment to create directly elected mayors in the 12 largest cities in England, subject to confirmatory referendums. The power in new Section 9N to provide for mayoral referendums in our largest cities does just that, and nothing more. It will allow for local people to make their choice at a referendum, and in those cities where there are votes in favour of the mayoral model, for the city to be governed by an elected mayor.
Amendment 204 would remove the requirement—the noble Baroness, Lady Hamwee, touched on this—for bodies subject to the duty to co-operate to,
“have regard to any guidance given by the Secretary of State about how the duty is to be complied with”.
The duty to co-operate signals a significant change in the way that strategic planning will happen. There are conflicting views on whether the duty to co-operate will be overly prescriptive—the point my noble friend Lord Jenkin was making—or too flexible. Indeed, we have been criticised by some in the House for the lack of prescription in our approach to strategic planning and have debated amendments to define the outputs, process and boundaries to be used by local councils. We consider that strategic planning needs to be a flexible process that allows councils to decide how best to serve their local communities, businesses and interested parties and we continue to reject prescriptive approaches. A duty to co-operate is intended to drive a culture change and new spirit of partnership working in the ways that councils and other public bodies work on strategic planning matters. It will be vital that councils and their partners rise to the challenge. Any guidance issued will be light touch rather than prescriptive, will focus on ensuring the efficient introduction of new policies and will be produced in consultation. In the light of the explanation I have given, I hope that my noble friend will be willing to withdraw the amendment.
Lord Jenkin of Roding
My Lords, when I tabled these amendments the purpose was to have a debate of exactly the kind which we have just had. I am sorry that it has come fairly late in today’s proceedings but I am immensely grateful to those in all parts of the House who have recognised that there is an issue here which had to be addressed—and it is being addressed. Noble Lords have said kind things about me but Greg Clark responded immensely positively to the approach which I made. Officials in the department and in the local authority associations have worked very hard to do this.
As regards what amendments should go into the group, I tabled a lot of the amendments and asked the Government Whips Office to put them all together so that we could have a debate. Of course, we will come back to some of these issues at a later stage. I think both the noble Lord, Lord Beecham, and my noble friend have indicated that there are issues to which we shall need to come back. As I understand our rules, when we get to Amendment 204, it is perfectly possible for anybody to move it and speak to it. The fact that it has appeared in an earlier group is not an absolute bar. However, in the light of the publication of the framework planning policy paper, we may well look at some of these issues. As the noble Lord has said, that will be in October on the last two days of our Report proceedings.
I take the point that some of these amendments may well merit considerably longer debate than we have had today. However, I think that the purpose of this debate has been served. I think that Ministers in my noble friend’s department have recognised that the Bill’s drafting has gone through the other place apparently without much being said about this. We started the argument in Committee here and it has now been accepted that this is not the appropriate way for the Government to treat local authorities these days, particularly in the light of the general power of competence. Nevertheless, there will be other opportunities to come back to some of these issues, and I hope that those opportunities will be taken. I cannot say that the Bill is going to get any shorter, because in the course of the proceedings of the last two days in Committee we have added a great deal to it, but those measures have been welcomed in all parts of the House.
I hope that we have now started the process of trying to dismantle this mindset of local authorities having to be told how to do their job. They are responsible, elected bodies, and if they are going to have a general power of competence, let them get on with it. I beg leave to withdraw the amendment.
Baroness Hanham
Baroness Hanham
(a) for “regulations made under section 18” substitute “section 9E(2)(b)(iiia), (3)(aa), (4)(a) or (5)(a)”, and(b) after “Act 2000” insert “or under regulations made under section 18 of that Act”.”
Lord McKenzie of Luton
Baroness Hanham
Lord McKenzie of Luton
Baroness Hanham
Baroness Hanham
“Timetables for changing English district councils’ electoral schemes
(1) The Local Government and Public Involvement in Health Act 2007 is amended as follows.
(2) Omit the following provisions (which provide that councils may pass resolutions to change their electoral schemes only in certain permitted periods)—
(a) section 33(4), (6) and (7) (district councils changing to whole-council elections),(b) section 38(4), (6) and (7) (non-metropolitan district councils reverting to elections by halves), and(c) section 40(4), (6) and (7) (district councils reverting to elections by thirds).(3) In section 33 (resolution for whole-council elections: requirements) after subsection (3) insert—
“(3A) The resolution must specify the year for the first ordinary elections of the council at which all councillors are to be elected.
(3B) In the case of a district council for a district in a county for which there is a county council, the year specified under subsection (3A) may not be a county-council-elections year; and here “county-council-elections year” means 2013 and every fourth year afterwards.”
(4) In section 34(2) (years in which whole-council elections to a district council are to be held if scheme under section 34 applies) for paragraphs (a) and (b) substitute—
“(a) the year specified under section 33(3A) in the resolution, and(b) every fourth year afterwards.”(5) In section 34 (scheme for whole-council elections) after subsection (4) insert—
“(4A) Ordinary elections of councillors of the council under the previous electoral scheme are to be held in accordance with that scheme in any year that—
(a) is earlier than the year specified under section 33(3A) in the resolution for whole-council elections, and(b) is a year in which, under the previous electoral scheme, ordinary elections of councillors of the council are due to be held.(4B) In subsection (4A) “the previous electoral scheme” means the scheme for the ordinary elections of councillors of the council that applied to it immediately before it passed the resolution for whole-council elections.”
(6) After section 31 insert—
“31A Minimum period between resolutions to change electoral schemes
If a council passes a resolution under section 32, 37 or 39 (“the earlier resolution”) it may not pass another resolution under any of those sections before the end of five years beginning with the day on which the earlier resolution is passed.”(7) In section 57 of the Local Democracy, Economic Development and Construction Act 2009 (requests for review of single-member electoral areas by councils subject to a scheme for whole-council elections) after subsection (4) (meaning of “subject to a scheme for whole-council elections”) insert—
“(4A) A district council is also “subject to a scheme for whole-council elections” for those purposes if—
(a) section 34 of the Local Government and Public Involvement in Health Act 2007 (scheme for whole-council elections) applies to the council, but(b) by virtue of subsection (4A) of that section (temporary continuation of previous electoral scheme), not all the members of the council are to be elected in a year in which ordinary elections of members of the council are to be held.””
Baroness Hanham
My Lords, we have already removed restrictions which applied to local authorities when they are deciding to change their governance arrangements. We have debated those this evening. Amendment 165 seeks to remove further prescription and restrictions imposed by the previous Government on local authorities in relation to changing their scheme of elections. Amendment 165 inserts a new clause into the Bill that removes in their entirety the current rules that stipulate that district councils may only resolve to change their scheme of elections during permitted periods. Permitted periods would last just over six months and occur only every four years.
We believe that local authorities should be free to make such decisions at a time that is right for them and their local communities, not during a time period dictated to them by central government. Accordingly, this amendment provides that in the future district councils in England that wish to change their scheme of elections will be able to resolve to do so at any time and will be able to specify the date on which they will hold their first whole council elections. In order to prevent local authorities from repeatedly changing their electoral schemes, and the uncertainty and disruption this may bring, Amendment 165 provides that, once a local authority has resolved to change its scheme of elections, it may not make another such resolution for a period of five years.
The current position, where district councils in two-tier areas are prevented from holding elections in the same year as the county council—that is in the fallow year—is also maintained. This is to ensure that there is clarity among local people about the role and functions of different tiers of local government in their area and to avoid voter confusion. In an area where there is no county council, no such restrictions on the date of the first whole-council election will apply. The decision will be entirely for the council concerned. Amendment 244 makes consequential amendments to the 2007 Act.
Lord McKenzie of Luton
“( ) The provisions of this section are without prejudice to the general obligation of a decision-maker to maintain an open mind in considering the issues relevant to the decision.”
Lord McKenzie of Luton
My Lords, I shall speak also to Amendment 165B. The purpose of Amendment 165A is to clarify whether the provisions of Clause 14 change the basic position that, in exercising discretion in making decisions, a councillor must not have a closed mind. This is especially relevant to, but not limited to, matters of planning. It is understood that the purpose of Clause 14 is to seek to clarify the position of councillors who, despite guidance from the Standards Board—which will now disappear—have considered themselves constrained in offering views on matters for fear of invalidating a decision or themselves being subject to challenge.
There has been a series of legal decisions which have sought to draw the line between legitimate predisposition and unlawful predetermination. The courts have accepted that councillors are likely to have, and indeed are entitled to have, a disposition in favour of a particular decision. An open mind is not an empty mind; it is ajar. Contrast that predisposition with circumstances where a person has closed their mind to all considerations other than an already held view—predetermination. The courts have recognised two types of predetermination: actual predetermination and apparent predetermination. The latter, apparent predetermination, is where a fair-minded and well informed observer, looking objectively at all circumstances, considers that there is a real risk that one or more of the decision-makers has refused even to consider a relevant argument. These matters have previously been commented on also by the Standards Board for England, including how the code might be impacted. Obviously, this all falls by the wayside subject to the outcomes of deliberations that we may have on this issue in due course.
When we debated this in Committee, we took it that Clause 14 was not intended to change the law and that decision-makers remain required to maintain an open mind in considering views relevant to a decision. Perhaps the Minister could confirm that that is the Government’s position. This is what Amendment 165A seeks to put on the face of the Bill. Assuming we are at one on this issue, what is the position on apparent predetermination? It would seem that Clause 14 changes the law because it precludes a fair-minded, well informed observer from looking objectively at all the circumstances. So can the Minister say what type of evidence would be taken into account when determining whether a person had a closed mind?
We do not oppose provisions which seek to enshrine in primary legislation the protections for councillors associated with predisposition—if the noble Lord, Lord Newton, were here, I would say that we accept the Lady Newton test in that regard—and we remain unconvinced that in doing so the Government have not opened the door to undermining the protections of probity long afforded by the concept of predetermination. Of course, this is happening when the Standards Board for England is disappearing from the scene.
In view of the uncertainty created by what is happening, Amendment 16 simply calls for the Secretary of State to review the consequences of this clause and to report to Parliament within three years. I beg to move.
Lord Pannick
My Lords, I have added my name to Amendment 165A. I share the concerns that have been expressed by the noble Lord, Lord McKenzie of Luton. This is not the ideal time of day to discuss the intricacies of local government law, but there are three points that I want to make.
First, existing case law makes it very clear, and rightly so, that in the context of local government, a predisposition to decide an issue in a particular way is lawful. There is nothing unlawful in a councillor saying to constituents that he or she agrees with or disagrees with a planning proposal, and is minded to support it, or indeed oppose it, in the planning committee, provided that the councillor adds that he cannot commit himself and that he must consider all the points that are raised before he decides how to vote.
What is unlawful is for the councillor to have or give the appearance of having a closed mind. That is predetermination of the matter, such that he or she will not listen to the arguments that are advanced in favour of or against the planning or other proposal put before the council. The Court of Appeal set out these basic principles very clearly indeed, in 2008, in the case of the Queen on the application of Lewis v Redcar and Cleveland Borough Council [2009], Volume 1 of the Weekly Law Reports, 83.
Lord Justice Rix stated at paragraph 94 to 96—and the other two judges adopted the same approach—that local councillors who are deciding a planning matter, or any other matter, are not required to be impartial in the sense required of a judge. The law as it is recognises that local councillors have political allegiances, that they have politics, and that their politics involve the adoption of policies. There is nothing wrong with that, and it is highly desirable that it remain the case, so long as there is no closing of the mind before the planning or other committee decision and the vote. The law strikes the right balance.
Secondly, although I think the law has the balance correct at the moment, I have no objection to legislation setting out this position and clarifying the matter, removing any doubt. However, it is vital that the legislation must get the balance right. My concern is that Clause 14 as currently drafted does not make it clear that although predisposition is permissible—indeed, may be desirable—predetermination is not permissible. Clause 14(2) is too broadly drafted.
Suppose the councillor says publicly, a month before a controversial planning application is considered by the planning committee, “I am going to vote against the proposal for the bail hostel. I was elected on a platform to oppose this planning development, and I am simply not interested in the arguments that may be advanced in favour of this proposal.” That would be a clear case of predetermination. Clause 14(2) would appear to make such a statement irrelevant in law. If we enact this legislation in this current form, such statements would be said to be, for the purposes of Clause 14(2)(a), something previously done by the decision-maker which,
“directly or indirectly indicated what view the decision-maker took, or would or might take, in relation to a matter”.
I hope that Clause 14 is not intended to exclude reliance in court on such a statement as evidence of impermissible predetermination. If it were intended to have that effect, it would be a substantial change in existing law and would be very much a change for the worse, because it would allow councillors to predetermine issues.
My third point, therefore, is that Clause 14 needs revision to tighten the language and avoid the ambiguity that I have indicated. There are various ways in which this could be done. One is by Amendment 165A. I hope very much that the Minister—I think that it is the noble Lord, Lord Taylor, who will be responding—will tell the House that he will take this matter away and will, with his officials, give further consideration to this important question before Third Reading.
Baroness Hamwee
My Lords, the word that I stumbled over when I first read Clause 14(2) was “just”. Not justice, which of course is important, but “just because”, which is not the sort of language that one normally sees in legislation. However, since the noble Lord has spoken, and having heard what he said, which I found extremely helpful, the word that now concerns me is “might”. Clause 14(2)(a) refers to a view that a decision-maker,
“took, or would or might take”.
How does “might” stand in the context of the distinction between predisposition and predetermination? I am far more confused than I was 10 minutes ago.
Lord Beecham
My Lords, I support the amendments tabled by my noble friend Lord McKenzie—especially the second amendment in the group. We are entering difficult territory, as outlined clearly by the noble Lord, Lord Pannick. At the very least, given the potential difficulties that might arise from a change, there ought to be a proper, evidence-based review, and three years should be sufficient for that. There are clear dangers in the way that the clause is drafted, and we cannot overlook the political background to its production. Its provenance lies in political debate, with those on one side claiming that it is improper to prevent councillors campaigning on issues and then voting on them. Of course, that is perfectly legitimate in the context of any council policy such as education, social care or whatever: but not in a situation that is quasi-judicial, which is how planning and licensing decisions should be taken.
I am afraid that the rather loose terminology deployed on political platforms colours one’s view of the potential impact of the proposal in Clause 14. It also raises the possibility of undue pressure being applied to elected members who will no longer have the defence that, “I must not indicate how I am going to vote because I am obliged to look at all sides of the case”. That might be regarded as being swept away. I am not saying that it is the intention of the clause to sweep it away, but that inference might be drawn by those seeking to solicit the support of members. One must not assume that that solicitation will always be on the part of electors. It may be on the part of those on the other side of the proposal: namely, the developers. It is invidious to place members in that position. They need the protection of the kind of approach that the noble Lord, Lord Pannick, has enunciated.
I hope that the Minister will look again at this, particularly at Amendment 165A, and whether that can be deployed to mitigate the impact of Clause 14. In any event, however, I hope he would accept, or just consider accepting, Amendment 165B, which would allow the situation to be reviewed in this rather delicate area on the basis of evidence rather than surmise. We are looking, at this late hour, for some commitment to think again and talk again about this in order to avoid potential future difficulties for elected members and officers of the council as well. It would also provide clarity for public applicants and objectors alike.
Lord Taylor of Holbeach
Nobody will deny that this is a complex area. Previous position and predetermination can meld into a situation where drafting legislation can be difficult. I want to reassure noble Lords on what Clause 14 is about and what it is not about. The provision in the Bill does not have any effect on the legal effects of a local authority member being predetermined. The legal position is, and will remain, that a local authority member making a decision should have an open mind. Whatever he or she may have said about the way they were going to vote or whatever campaigns there were, we are in practical politics and we know that people will campaign on issues. The clear point of focus of any legislation and the law, currently and as a result of Clause 14, is that the decision should be made with an open mind.
I recognise that the noble Lord, Lord Pannick, is one of the most eminent lawyers in the House, and I say that knowing there are many eminent lawyers in this House. However, I hope he will agree—I think he does, along with the noble Lord, Lord McKenzie—that the courts have been very sensible in recognising that politicians hold views and there is nothing wrong with them holding views. The way we drafted these positions in Clause 14 is to make it clear to those less well versed in the law—and that is certainly true of the majority of us—that politicians are free to talk to the public about issues and free to campaign on important issues. It will ensure that, at the end of the day, prior indications of an opinion will not be treated as evidence of predetermination.
Perhaps I can reassure the noble Lord, Lord McKenzie, that the only evidence that can be presented to show that a person does not have an open mind is that which exists at the point of the decision-making process. Therefore, prior comments, commitments and pledges do not matter as long as the local authority member clearly listens to the evidence and makes his decision. It may accord with his prejudice or his predisposition, but any evidence that he has a closed mind can only be made at the point when he makes that decision and not at any point prior to that.
Lord Pannick
I am grateful to the Minister for giving way. Do I understand him to be saying that any prior statement is irrelevant to the question of whether the councillor had an open mind at the time of decision-making? If that is what the Minister is saying, the example that I gave in my contribution to this debate would be irrelevant even though, surely, it would be highly material to the question of whether at the time of the decision the councillor had an open mind.
Lord Taylor of Holbeach
The test is that the decision-making process is key and the councillor demonstrates the ability to listen to the argument and to vote accordingly at the time of the decision-making. That is the current position in law. There is no suggestion that because somebody has campaigned on an issue they should not be free. Indeed, I think the House would acknowledge that people who have campaigned on issues should be free, as long as they demonstrate at the point at which the decision is being made that they have been prepared to consider opposing arguments. The fact that they have voted in accordance with their previous position does not necessarily mean that they predetermined the decision. That is precisely what this clause is designed to make clear.
I hope noble Lords will understand that this is a genuine attempt to provide clarification on a difficult area. To the extent that Amendment 165B has been tabled to suggest that this should be subject to review, it is unnecessary because, as we stated in our published impact assessment for this provision, there will be a post-implementation review to ascertain its impact. It will provide all the information that noble Lords have been seeking through presenting Amendment 165B. I hope the noble Lord will withdraw the amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply and the noble Lord, Lord Pannick, and my noble friend Lord Beecham for their support on this amendment. I am sorry if collectively—it is probably my fault—we have confused the noble Baroness, Lady Hamwee.
I do not think the Minister’s response has moved us forward on this issue. If anything, I think it has moved us backwards. We accept that these are complex issues and that drafting legislation is difficult. The noble Lord, Lord Pannick, said that he thought that the courts have hitherto got the balance about right. If the Minister thinks through the logic of what he has just said, if you can judge whether somebody had a closed mind only at the point of taking a decision, and if you have to leave aside and close your mind to all the previous evidence, even though any reasonable person might say that in particular circumstances it was abundantly clear that an individual had closed his mind, could that not leave the process open to massive abuse, because all somebody who wishes to thwart or support a decision needs to do is to behave sensibly and appropriately on the day at the point of the decision-making, even though he might have made his position absolutely clear before that? I am not a lawyer, although the noble Lord, Lord Pannick, certainly is, but it seems to me that the position he put in his example—that Clause 14(2) means that you have to exclude all that evidence when it comes to court, if that is where it arrives, and the Minister said that you do—must constitute a change in the law as it is at the moment. I do not think that the Government are in the right place. We are not trying to be difficult. This is not a party political issue, and I understand the Minister trying to get it right for councillors so that they are free of the fear that they may have been subject to to date, but I simply do not think that the Government are right. We are obviously not going to press Amendment 165A tonight, but I urge that we have the opportunity to have some discussion with officials between now and Third Reading—and I would welcome the input of other noble Lords, particularly the noble Lord, Lord Pannick—with the right to bring it back if necessary. There is a risk that we are changing the law.
Lord Taylor of Holbeach
Of course we are always happy to discuss matters further, but I wanted to make the Government’s position quite clear. The clarification in Clause 14 is designed to make clear that there is a point at which predetermination can be adjudged, and that is the point at which a decision is made. To present any other points as being the point at which predetermination exists obviously becomes extremely complicated because you get involved with statements that have been made before the decision was presented before the member concerned.
Lord McKenzie of Luton
My Lords, I understand exactly that it is at the point at which the decision is made that people’s minds ultimately become closed, but that is where some judgment must be made. The issue is whether in making that judgment you ignore everything that has gone before. That is the point that we are struggling to understand.
Baroness Hamwee
My Lords, I suggest to the noble Lord that the words which had initially confused me—making the decision “just because” of these factors—in fact answer his point. I think that those words “just because” mean that they are a consideration but they are not the only consideration. They are part of all the criteria that should be assessed when judging whether or not a mind has been closed. I can see that we are not going to take it further today. I just wanted to put that into the arena as well and assure the noble Lord that it was not he who confused me.
Lord McKenzie of Luton
I am grateful to the noble Baroness but I do not think it helps us. If somebody who has done something said something, just because they have said that, if the provision requires you to not focus on that, not to take that into account in making a decision, you can count that decision only once and this excludes it. Perhaps we ought to see whether we can make some progress on this outside of these deliberations, but I really do not believe that the Government are in the right place on this.
Lord Pannick
Does the noble Lord accept that the Minister is undoubtedly right that the question of whether or not the councillor has a closed mind must be assessed as at the date when the council takes the decision? My concern—I ask whether it is his concern—is that it appears from the Minister’s observations that he is suggesting that anything that the councillor says at an earlier date, however extreme it may be, is irrelevant to the question of whether the councillor had a closed mind as at the date of the council decision. That seems to be the issue.
Lord McKenzie of Luton
Yes, I am grateful to the noble Lord. That is exactly my concern and I honestly do not think we have had clarification on that. Perhaps we can take this forward by other means. With the leave of the House, I beg leave to withdraw the amendment.