House of Commons

Monday 28th October 2013 Commons Chamber

Monday 28 October 2013

The House met at half-past Two o’clock

Prayers

Monday 28th October 2013 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 28th October 2013 Commons Chamber

The Secretary of State was asked—

[Kerry McCarthy (Bristol East) (Lab)]

1. What support her Department provides for sanctuary schemes for victims of violence.

[The Secretary of State for the Home Department (Mrs Theresa May)]

The Government have put stable funding in place, ring-fencing nearly £40 million for specialist local domestic and sexual violence support services, rape crisis centres, and national helplines. Decisions on whether to fund the provision of sanctuary schemes for victims of violence are for local authorities, based on their assessment of local need.

[Kerry McCarthy]

I thank the Home Secretary for that response, but I understand that funding for sanctuary schemes has fallen by over a third under this Government. Freedom of information requests have shown that about 21% of victims of domestic violence who make use of such schemes are now falling foul of the bedroom tax. Does the Home Secretary think that such people, who are in a place where they are safe from their abuser, should be evicted because of the bedroom tax?

[Mrs May]

The sanctuary schemes obviously have value for a number of people. They are not right for everybody, but for those for whom they work, such schemes are important when put in place. Latest statistics show that last year, 2012-13, 7,100 households had homelessness prevented or relieved thanks to the installation of a sanctuary scheme—a 17% rise on the previous year. On the spare room subsidy, the Government are providing baseline funding of £20 million annually to the discretionary housing payment scheme, which is available to local authorities to help people in such circumstances. The Government have also provided an additional £25 million per annum on top of the baseline funding until the end of the spending review period.

[Mr James Gray (North Wiltshire) (Con)]

In addition to sanctuaries, which are terribly important, does the Home Secretary agree that it is time to re-examine sentencing guidelines on domestic abuse? In one case in my constituency, the ex-husband, who has been convicted twice of domestic abuse, is now living in the same estate as his terrified ex-wife, and no custodial sentence was handed down. Surely such a person should be in prison.

[Mrs May]

My hon. Friend makes an interesting point, and the Minister for Policing, Criminal Justice and Victims is sitting on the Front Bench and will have heard that question in relation to responsibilities of the Ministry of Justice. Importantly, I have asked Her Majesty’s inspectorate of constabulary to look at the policing of domestic violence, and we must examine how the police respond to such incidents. I am pleased that the Government have introduced a number of pilot schemes and are considering various ways that victims of domestic violence can be further protected. Domestic violence protection orders, for example, enable the victim to remain in their home, rather than the perpetrator remaining and the victim being forced out.

[Michael Fabricant (Lichfield) (Con)]

Last week I wore pink, in common with 100 others in Lichfield—pink trousers, pink shirt, pink feather boa—to walk for the Pathway project in my constituency. It looks after those—not only women, but men too—who suffer from domestic violence. Will the Home Secretary or one of her team please come to Lichfield to see the good work the Pathway project is doing?

[Mr Speaker]

The hon. Gentleman must have looked even more exotic than usual.

[Mrs May]

I know that my hon. Friend has a fondness for taking photographs, and I wonder whether he has taken a photograph of himself that could perhaps be circulated to Members of the House for their edification. He makes an important point, however, and I commend the Pathway project in Lichfield. I have noted the hon. Gentleman’s invitation, as has the Minister for Crime Prevention, for one of us to come and visit. May I say what excellent work people in the Pathway project and similar schemes are doing on this important issue?

[Dr Phillip Lee (Bracknell) (Con)]

2. What assessment she has made of the latest crime figures.

[The Secretary of State for the Home Department (Mrs Theresa May)]

Our police reforms are working and crime is falling. Recorded crime has fallen by more than 10% under this Government, and the independent crime survey shows that crime has more than halved since its peak in 1995.

[Dr Lee]

Between 2011-12 and 2012-13 recorded street-level crime in Bracknell fell by 12%, and recorded antisocial behaviour by almost one third. Does the Home Secretary agree that it is possible to save taxpayers’ money and reduce crime at the same time?

[Mrs May]

I absolutely agree with my hon. Friend. Both our constituencies are served by Thames Valley police, and I am pleased that since 2010, crime has fallen by 25% in the Thames Valley police area, including a fall of 30% in my constituency. My hon. Friend is right. Those who said that when police budgets were cut the only thing that would happen would be for crime to go up have been proved wrong. I commend the work of all the police officers and staff who have contributed to those good crime figures.

[Fiona Mactaggart (Slough) (Lab)]

There has been a 30% increase in reports of rape, and yet a dramatic fall in the number of rape cases referred for prosecution. What is the Home Secretary doing about that?

[Mrs May]

The hon. Lady is right to draw attention to that—we need to look at the matter very seriously. I am happy to say that the Minister for Crime Prevention is doing so. In addition, the Home Office has sat round the table with national policing leads and the Crown Prosecution Service to consider why we are seeing that most recent trend, and to develop a plan for ensuring that cases are referred to the CPS when it is right to do so.

[Duncan Hames (Chippenham) (LD)]

The 12% fall in crime excluding fraud will be welcomed in Wiltshire by my constituents, but businesses repeatedly find themselves victims of seemingly invisible but none the less criminal behaviour online. What support is being given to businesses to tackle those online thefts?

[Mrs May]

First, the Office for National Statistics now includes figures on fraud reported to Action Fraud in the police recorded crime count. That is an important step forward—we now get a more accurate picture. Crucially, following the launch of the new National Crime Agency, we have established within it an economic crime command, which will enhance our ability in this country to deal with a variety of economic and financial crimes, including the fraud my hon. Friend describes.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

The Home Secretary will be aware not only that rape statistics have gone up, but that the figures for child abuse have gone up hugely as well. Five years ago, 50% of rape offences were referred to the CPS, but now only 30% of rape and abuse of children offences are referred. What will the Home Secretary do about that? Does she believe that 20% cuts to the police might have something to do with it?

[Mrs May]

No, I do not accept the premise on which the hon. Lady’s question is based. We are looking very seriously at the question of child abuse. That is why my right hon. Friend the Minister for Policing, Criminal Justice and Victims was involved in setting up a group across Departments on the question of child abuse and child sexual exploitation to ensure we can deal as effectively as possible with that most horrific crime.

[Mr David Ruffley (Bury St Edmunds) (Con)]

Crime will fall even further if we can make bigger reductions in police bureaucracy. Front-line officers using body-worn cameras have the potential to reduce the amount of paperwork they have to do back at the station. Will my right hon. Friend indicate how many police hours she believes could be saved by that new technology, which has been endorsed recently by the Minister for Policing, Criminal Justice and Victims?

[Mrs May]

My hon. Friend makes an extremely important point. I had informal discussions about the use of body-worn cameras at the college of policing last week. I am pleased to say that a number of forces have piloted the use of such cameras. The college will look at best practice so it can ensure they are used as effectively as possible. They will not only reduce the bureaucracy that the police are involved with, but provide greater and enhanced ability to deal with crimes and provide the evidence in criminal circumstances. They will also benefit officers when accusations are made about their behaviour—often, the body-worn camera will show when such accusations are not correct.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Crime has fallen overall thanks to the development of neighbourhood policing under a Labour Government. With the thin blue line stretched ever thinner, there are disturbing signs of a generation of progress in some areas being reversed. Since the general election, shoplifting is up in 23 police areas and mugging is up in 15 police areas. There has been a staggering 44% increase in mugging in London. Does the Home Secretary therefore share the concerns of Her Majesty’s inspectorate of constabulary that that which has proved to be so successful and is so valued by communities throughout our country—neighbourhood policing—“risks being eroded”?

[Mrs May]

May I first welcome the hon. Gentleman to his new role on the Opposition Front Bench? I am not sure that his question was the best approach for him to take. I am very sorry that he has failed to recognise the work being done by police officers and staff around the country to ensure that overall levels of crime have fallen since 2010. I would hope he welcomes the work they are doing. HMIC has made it clear that forces, in taking the budget cuts, have focused on ensuring front-line resilience. That is a very good example of how it is possible to do more for less.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

5. What steps she is taking to restrict immigration routes into the UK without limiting the ability of UK universities to attract international students.

[The Minister for Immigration (Mr Mark Harper)]

Since 2010, the Government have taken steps to reform all routes into the UK to deal with abuse, but we have been careful to protect our world-class universities. In the past year, we have still seen a rise in visa applications to universities.

[Mr Djanogly]

Given that we have significantly restricted the ability of foreign students to stay on after the end of their studies, is it worth retaining their inclusion in the immigration figures?

[Mr Harper]

I am grateful to my hon. Friend for that question, as it gives me the opportunity to say that they should be in the figures. Those who come here for more than a year are migrants in the same way others are, and use public services. It also gives me the opportunity to say that we have not restricted the ability of students to work where they have a graduate-level job that earns £20,300. We welcome the best and the brightest to do exactly that.

[Keith Vaz (Leicester East) (Lab)]

On the Chancellor’s recent visit to China, he made a big and open offer to the most populous country on earth: all Chinese students are welcome to study in the United Kingdom. If they take up that offer, that will have a serious effect on the Government’s aim to restrict immigration to under 100,000. What does the Minister for Immigration think of that big and open offer?

[Mr Harper]

First, I do not think the Chancellor was suggesting that the entire population of China will come to the United Kingdom all in one go. The right hon. Gentleman makes a sensible point, but it is worth remembering that students who come to the UK will stay for their course and then leave. They do not, over time, make a contribution to net migration. We have, however, already seen strong growth in the number of students coming from China. They are welcome at our universities and we want to see them come.

[Jeremy Lefroy (Stafford) (Con)]

What is the latest assessment the Minister has made of the value of international students to the UK economy and society?

[Mr Harper]

We welcome international students as long as they study at a genuine university or other genuine institution. We have dealt with abuse, which we inherited from the Opposition, but we welcome students and the best of them are welcome to stay here to create businesses, wealth and jobs.

[Pete Wishart (Perth and North Perthshire) (SNP)]

The Minister knows that almost the entire Scottish higher education establishment despise the immigration reforms, which do nothing but make Scotland a less attractive place to come. This is not working for us and we do not have the issues of the rest of the United Kingdom. Can we now make our own course, so that we can make Scotland an attractive and welcoming place for international students?

[Mr Harper]

If the hon. Gentleman looks at the facts, he will see that there is an increase in the number of international students going to the excellent universities in Scotland. Scotland is attractive to international students, as is the rest of the United Kingdom. I see no evidence that our immigration reforms are turning students away.

[Julie Elliott (Sunderland Central) (Lab)]

International students play a vital role in Sunderland university, which is in my constituency. The changes to immigration rules since the Government came to power have made a lot of areas of the world feel that we are closed for business. What is the Minister doing to address that view and change it back, so that they know we are open for business and welcome international students?

[Mr Harper]

Ministers take every opportunity to make the case that we welcome genuine students and to set out the attractive offer we have. As the right hon. Member for Leicester East (Keith Vaz), the Chair of the Select Committee, said, both the Chancellor and the Mayor of London were in China recently to make that case. The Prime Minister has been to India, as has my right hon. Friend the Home Secretary. We make the case at every opportunity and I am glad the hon. Lady is doing so, too.

[Paul Uppal (Wolverhampton South West) (Con)]

6. What steps she is taking to tackle gang crime.

[The Minister for Policing, Criminal Justice and Victims (Damian Green)]

The Government have a programme for ending gang and youth violence, which provides support to local areas. It focuses on preventing vulnerable young people from joining gangs, helping those who want to leave gangs and tough enforcement against those who commit violence. We will publish our second annual report later this year.

[Paul Uppal]

I commend Wolverhampton police, through Operation No Deal and a general clampdown on crime and drug gangs, on recent significant arrests. Will the Minister assure me that significant steps are being made to continue that work? From anecdotal evidence in recent canvassing sessions, I have noticed a pick up in drug dealing, particularly in the south of the city.

[Damian Green]

My hon. Friend raises a serious issue. As he knows, Wolverhampton is one of the 33 priority areas to which the Home Office is giving particular help on this issue. We are working with Wolverhampton and other areas to tackle gang-related drug dealing as part of the ending gang and youth violence programme, and we will continue to do so and also use the new National Crime Agency and the serious organised crime strategy to ensure that we continue to attack the organised crime routes of drug dealing in too many of our cities.

[Mr Philip Hollobone (Kettering) (Con)]

The good news from Northamptonshire is that overall crime is down 14% in the last three years, but the bad news is that for every 1,000 people in the county, there are 11 crimes of violence, compared with eight per 1,000 in Merseyside and 10 per 1,000 in Greater Manchester. Surprising though these figures may be, will my right hon. Friend ensure that when the Home Office allocates funds to regional police forces, it takes such statistics into account?

[Damian Green]

My hon. Friend is a doughty campaigner for the local interests of his constituents, as he should be, and we hear all the recommendations he makes to us. His county is lucky to have a particularly good police and crime commissioner, who will, I know, bear down hard on crimes of violence.

[Sheryll Murray (South East Cornwall) (Con)]

7. What steps she is taking to curb metal theft.

[The Minister of State, Home Department (Norman Baker)]

We have already seen significant reductions in metal theft following targeted police action and the banning of cash payments for scrap metal. The implementation of the Scrap Metal Dealers Act 2013 earlier this month will further clamp down on rogue dealers while supporting legitimate businesses.

[Sheryll Murray]

Following visits I have made to bona fide metal recyclers in my constituency that do carry out checks on their clients in Cornwall, will my hon. Friend tell me what action his Department is taking to ensure that rogue dealers are prosecuted and punished, and does he agree that all metal recyclers must have a level playing field on which to operate?

[Norman Baker]

Yes, I absolutely agree. The Scrap Metal Dealers Act, which I mentioned, is designed precisely to ensure that rogue traders are dealt with properly, and a properly funded licensing scheme will see more effective compliance activity by local authorities and stronger enforcement by the police, ensuring a level playing field for law-abiding scrap metal dealers. For example, we see from the British Transport police that offences are down 44% in the last year.

[Tessa Munt (Wells) (LD)]

My local paper still carries adverts providing only a mobile phone number and offering free collection of any scrap metal, cars, vans, caravans and electrical items for cash payments. What can my constituents in Somerset expect by way of checks and investigation into those who place these adverts, especially since fly-tipping of these very items is such a bane to Somerset residents and adds to the cost of their council tax bills?

[Norman Baker]

We have created a new criminal offence to prohibit cash payments to purchase scrap metal and therefore my hon. Friend ought to report that matter to her local police. If it is a registered scrap metal dealer who holds a licence, the local authority will want to look into the matter.

[Harriett Baldwin (West Worcestershire) (Con)]

8. What steps she is taking to reduce illegal immigrants’ access to housing.

[The Minister for Immigration (Mr Mark Harper)]

The Immigration Bill will require private landlords to make some simple, straightforward checks so that illegal migrants do not have access to private housing. Existing legislation already makes it clear that illegal migrants do not have access to social housing.

[Harriett Baldwin]

Farmers in my constituency offer temporary housing to the seasonal agricultural workers who pick the delicious crops we grow in West Worcestershire. Will it be the farmers or the gangmasters who are required to verify their immigration status?

[Mr Harper]

If employers make available tied accommodation —meaning it is tied to their employment—they will not have to make further checks, because, as employers, they already have to check someone’s right to work in the United Kingdom, and we do not want to overburden them with bureaucracy.

[George Freeman (Mid Norfolk) (Con)]

I congratulate and thank the Home Secretary for the excellent measures in last week’s Immigration Bill, which is strongly welcomed by my constituents. Have Ministers seen the recent report stating that the NHS is currently losing £2 billion a year on health care to non-UK residents who should not be here? May I encourage the Home Office, with other Departments, to do everything possible to continue the good work to clamp down on illegal citizens taking public services from our citizens?

[Mr Harper]

We will be doing the first stage of that in the Immigration Bill by ensuring that people who come here as temporary migrants make a fair contribution to the NHS before they can have access to it. The Secretary of State for Health will also introduce separate measures to ensure that hospitals become more effective at charging people who have no right to free access to health care paid for by our taxpayers.

[Steve Brine (Winchester) (Con)]

9. What steps she is taking to tackle the use and supply of legal highs.

[The Minister for Crime Prevention (Norman Baker)]

We already control hundreds of so-called legal highs and are working with law enforcement partners to disrupt the supply of these often dangerous substances. The Home Office has led communications activity targeting young people and students to advise of the risks of legal highs. We also regularly update public health messaging on those risks. We are not complacent, and we continue to look at ways in which we can enhance our response.

[Steve Brine]

The UK is fast becoming a hub for the European legal highs market, and a recent report from the all-party group on drug policy reform claimed that more than one new substance was coming to Britain each week. Does the Minister share my concern that many legal highs are now purchased online and delivered direct to people’s homes? Will he also look again at the Misuse of Drugs Act 1971 to see whether it is still fit for purpose, given the new web-based market for legal highs?

[Norman Baker]

I am not sure that I accept my hon. Friend’s premise that we are a hub for that activity. First, however, let me say how sorry I was to learn of the recent incident in which one of his young constituents died, possibly as a result of taking a substance known as AMT. The cause of death has yet to be confirmed. That particular substance is legal, but as a result of that case I asked officials on Friday to look at the matter urgently, and action was taken under our drugs early-warning system at 6 pm on that day. My hon. Friend mentioned internet sales, but only about 1% of drugs are sourced in that way. Nevertheless, we take that avenue seriously and the National Crime Agency is undertaking operational activity accordingly.

[Tracey Crouch (Chatham and Aylesford) (Con)]

The Minister will be aware that there are shops on our high streets, such as UK Skunkworks in Chatham, that sell legal highs alongside other drug paraphernalia. Those shops abandon any responsibility for the sometimes tragic consequences of their activities by labelling the products as being unfit for human consumption. Will he commit to including the over-the-counter sales, and the labelling, of legal highs in his review, so that we can prevent further deaths similar to that of Jimmy Guichard?

[Norman Baker]

I entirely agree with the premise of my hon. Friend’s question. Those so-called head shops often behave irresponsibly. She will know that a study of international comparisons is currently under way, and the consideration of legal highs is very much part of that process.

[Mr Julian Brazier (Canterbury) (Con)]

My hon. Friend will be aware of the three deaths in Kent, two of which were in my constituency. I welcome his early-warning system and temporary banning orders, but may I suggest that the best way to cope with this is simply to say that if someone dies or becomes severely ill as a result of taking a drug that is a close chemical cousin of a banned drug, that should throw up a criminal offence?

[Norman Baker]

The Home Office already takes steps to ensure that when a new substance appears that could be injurious to health, we seek to ban analogous drugs—the family of drugs—as a consequence. Some of the banned drugs have often not yet been created, but if and when they are created, they are already covered. We are trying to deal with this through anticipatory methods as well as by other means. We also try to have an early response system, so that when a substance appears, it can be picked up and banned very quickly.

[Justin Tomlinson (North Swindon) (Con)]

10. What steps she is taking to address domestic violence.

[The Secretary of State for the Home Department (Mrs Theresa May)]

Domestic violence is a dreadful form of abuse and is totally unacceptable. Our approach to tackling it is set out in the Government’s updated violence against women and girls action plan. Key initiatives include piloting domestic violence protection orders, which I referred to in a previous answer, and a domestic violence disclosure scheme. We have also extended the definition of domestic violence to include 16 and 17-year-olds and to include the use of coercive control.

[Justin Tomlinson]

I have visited the women’s refuge in Swindon and was extremely impressed by the help and facilities that it provides. What steps is the Home Secretary taking to support the work of those vital safe havens for victims of domestic violence across the country?

[Mrs May]

Like my hon. Friend, I pay tribute to all those who work in refuges and provide refuge for the victims of domestic violence. They are predominantly for women, as the majority of such victims are women, but we must never forget that men can also be the victims of domestic violence, as my hon. Friend the Member for Lichfield (Michael Fabricant) said earlier. The Government are providing stable funding of £40 million to support specialist domestic and sexual violence services, such as the independent domestic violence advisers who offer further valuable support to victims.

[Julie Hilling (Bolton West) (Lab)]

The last Girl Guides survey showed that 5% of girls thought it was okay to be threatened with violence for spending too much time with friends, and that 25% thought it was okay for a person’s partner to check up on them and read their texts. What are the Government doing to combat domestic violence by educating young people, particularly young women, about what is acceptable in relationships, and—

[Mr Speaker]

Order.

[Mrs May]

Although cut off in her prime, the hon. Lady makes an important point. It is shocking to see the number of girls and young women—and, indeed, the number of boys and young men—who think that violence in a relationship is okay and part of a relationship. She is absolutely right that we must do what we can to educate young people about what a proper relationship should be and what should not be part of it. That is why the Home Office has supported a very successful national teenage rape prevention campaign, which we were able to extend into a teenage relationship abuse campaign. The figures and responses show that those campaigns have had a real impact on young people’s understanding of the nature of relationships.

[Andrew Stephenson (Pendle) (Con)]

19. Victims of domestic violence in my constituency sometimes find the first step of talking to someone about it to be the hardest one to take. Residents are well served by the Pendle domestic violence initiative helpline, as well as the national domestic violence helpline. Will my right hon. Friend tell us what she is doing to ensure that the victims of domestic violence are aware of these helplines, which provide them with valuable support at the time they need it most?

[Mrs May]

My hon. Friend is absolutely right to commend the work of those who provide helplines, and I would like to congratulate him on the success of the Pendle domestic violence initiative. Helplines indeed play an important role in supporting the victims of domestic and sexual violence. That is why the Home Office provides £900,000 to five national helplines each year. We take every opportunity to publicise these helplines, and we have done so through the two campaigns to which I referred in my previous answer—the teenage rape prevention campaign and the relationship abuse campaign. It is important to keep telling people about the availability of these helplines.

[Helen Jones (Warrington North) (Lab)]

The Home Secretary is astonishingly complacent given that reported domestic violence has risen by 31% on her watch, while at the same time as funding for refuges and specialist advice has fallen by 31%, the number of independent domestic violence advisers is falling and specialist domestic violence courts are being axed. Is this a deliberate attempt to target the victims of this violence or does it simply show that she has no influence over her colleagues in other Departments?

[Mrs May]

First, I welcome the hon. Lady to her new role on the shadow Home Office Front Bench, but I have to say that I thought that the nature of that question was beneath her. [Interruption.] The hon. Lady says “facts” from a sedentary position, and she quoted a figure of 31%. I understand, however, that that came from a survey based on the average from 63 local authorities, and that survey did not take into account responses from 201 authorities that said cuts had not been made in their provision. If the hon. Lady wants to cite facts, I suggest she looks at them more carefully in future. This Government take domestic violence very seriously. That is why it is this Government who have put in place stable funding of £40 million and why under this Government rape crisis centres are opening, when under the last Labour Government they closed.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

13. What recent assessment she has made of the level of referrals from the police to the Crown Prosecution Service for domestic violence offences.

[The Minister for Crime Prevention (Norman Baker)]

The Home Office chaired a meeting with the Director of Public Prosecutions last month. This has led to a six-point plan to increase the number of referrals from the police to the Crown Prosecution Service. However, it should also be noted that last year saw the highest ever conviction rate for domestic violence prosecutions.

[Mr McCann]

I am grateful for that answer and for all other answers given on this subject this afternoon. Since the general election, however, there has been a 13% fall in the number of cases of domestic violence being referred to the CPS from the police. Will the Minister ban the use of community resolutions in all cases of domestic violence?

[Norman Baker]

We have heard from the Home Secretary that the ministerial team in the Home Office take this matter very seriously. We will discuss it later this week with chief constables and others. We are determined to ensure that domestic violence is given the prominence it should have within the legal system. I have also had a discussion about this matter with my colleague, Lord McNally, at the Ministry of Justice.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

14. What steps she is taking to reduce abuse in the immigration system.

[The Minister for Immigration (Mr Mark Harper)]

We have taken a number of steps to deal with abuse in the immigration system, and the Immigration Bill will go further. It will ensure that people do not have access to public services when they should not, it will reform the appeal system, and it will establish the House’s and Parliament’s views on how judges should make decisions relating to article 8 of the European convention.

[Alec Shelbrooke]

Housing pressure in my constituency is huge as a result of the last Government’s unfettered immigration policies. Can my hon. Friend confirm that he intends to continue his endeavours to cut immigration further, thus relieving the pressure that is undermining the level of new housing being demanded by Labour-led Leeds city council?

[Mr Harper]

My hon. Friend has made a good point. Our reduction in net migration will reduce the pressure on housing, and the provisions in the Immigration Bill ensuring that people who have no right to be here have no access to housing will increase the amount of housing stock available to British citizens and to lawful migrants who are following the rules.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

I accept the need to tackle abuse in the system, but may I draw the Minister’s attention to a disturbing anomaly? Families in which neither parent has been given the right to work become dependent on local churches and friends, and experience great distress. Is there no way in which the immigration system can take account of their circumstances, and allow one parent to work? That ought to be the norm, but it seems to be happening less and less often.

[Mr Harper]

If neither parent has the right to work because neither has the right to be in the United Kingdom, the solution to the problem is for them to leave. If the reason is that their case is being examined because they are, for example, claiming asylum, the state will support them while the case is under way. If the hon. Gentleman wishes to raise a specific case in his constituency, I should be delighted if he got in touch with me, and we can have a look at it.

[Nick de Bois (Enfield North) (Con)]

17. What advice would the Minister give councils when residents with dependants have exhausted the immigration appeal process and therefore have no recourse to public funds, but, because they have not left the country either voluntarily or as a result of enforcement, the councils are still continuing to have to meet their high costs?

[Mr Harper]

In most cases, councils will have no liability to support such people, but they should carry out a human rights assessment. In a limited number of cases they may have to support them, but in most cases they will not. Indeed, by continuing to support those people when they need not do so, all that councils are doing is encouraging them to remain in the United Kingdom when they have no right to be here.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Baroness Warsi has said of “Go Home” ad vans:

“I don’t think it was a particularly positive experience and I am glad that we won't be going back to it.”

She also said:

“I think it’s always important for government to be clear when they are speaking to their communities that all people who are part of this nation legally are absolutely welcome.”

Does the Minister agree with that Cabinet Minister, and what steps will he take to reduce the use of dog-whistle politics?

[Mr Harper]

I entirely agree that everyone who is in the United Kingdom legally, obeying our laws and rules, is very welcome indeed. We have always made that clear. As the hon. Lady knows, the campaign was focused squarely on those who were here illegally. My right hon. Friend the Home Secretary made it clear last week that we had looked at some of the evidence, that we did not think the pilot had been successful enough, and that we would not be rolling it out further.

[Diana Johnson]

Having considered the evidence and decided that the campaign was not successful and should not be repeated, why does the Minister not publish the assessment of that policy, and let us see how many people left the country as a result of it?

[Mr Harper]

During last week’s debate on the Immigration Bill, my right hon. Friend made it clear that we would indeed publish the assessment when we had finished carrying out the evaluation. We are going to do the work properly, and we will publish the information in due course.

[Mr David Heath (Somerton and Frome) (LD)]

One of the parts of the immigration system that has been least open to abuse historically is the seasonal agricultural workers scheme. I know how carefully the Minister looked at the evidence before deciding to end the scheme. Will he now commit himself to monitoring the position, along with his colleagues in the Department for Environment, Food and Rural Affairs and the Department for Work and Pensions, so that we can ensure that the ending of the scheme does not damage either the economy or food availability?

[Mr Harper]

I have a constituency interest, as constituents of mine took advantage of the scheme. The hon. Gentleman is right—it was not abused, but it was nearing the end of its natural life this year, because it was open only to those from Bulgaria and Romania, and they will be able to come to the United Kingdom in any event after transitional controls have been withdrawn. We had to choose whether to create a new scheme, and we decided that we did not need to do so because sufficient labour was available in the European Union. However, I can assure the hon. Gentleman that we will continue to keep the matter under review, along with other Departments, to ensure that our agricultural industry is not damaged in any way.

[Mr Robert Syms (Poole) (Con)]

15. What plans she has to make it easier to deport foreign terrorists and criminals.

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

The Immigration Bill will put the law on the side of the public, deporting criminals first and hearing appeals later wherever possible, and cutting the number of appeal routes available. Importantly, the Bill also addresses the abuse of the right to a family life under article 8 and upholds the view of Parliament that convicted criminals should be deported.

[Mr Syms]

My constituents in Poole welcomed the deportation of Abu Qatada but want to be reassured that the changes in the Immigration Bill will ensure that the law is on the side of law-abiding people from now on.

[James Brokenshire]

I know that my hon. Friend spoke in the Second Reading debate on the Bill and underlined those points. I was closely involved in the deportation of Abu Qatada, an important success for this Government, which was not achieved by the previous Government. That case showed the number of appeals that are possible and the slowness of the process. That is why it is right that we tackle the number of appeals. Seventeen potential appeal routes are available. We want to reduce that to four and to cut down on the abuses of the system.

[Chris Bryant (Rhondda) (Lab)]

The changes in the Immigration Bill will mean that those who are caught trying to enter a sham marriage will be deported from this country. I wholly welcome that, but when the Minister eventually answered some questions from me three months late, he revealed that the number of occasions when a registrar has written to the Home Office under section 24 of the Immigration and Asylum Act 1999 to notify it of significant concern about a possible sham marriage has risen dramatically since 2010. There are measures to deal with that in future, but why has that happened?

[James Brokenshire]

It is important to tackle sham marriages, and that is why the Bill has specific measures to address that. The Government are very focused on deporting those who should not be in this country. That is why we are taking the steps we are in the Bill.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

16. When she expects to respond to the recently closed consultation on stop and search powers; and if she will make a statement.

[The Minister for Policing, Criminal Justice and Victims (Damian Green)]

The consultation on the powers of stop-and-search ran for 12 weeks over the summer and generated a high volume of responses from national and local community groups to the police and members of the public. There were over 5,000 responses to the consultation, all of which are being analysed. We aim to publish the findings of the consultation and a response by the end of the year.

[Simon Hughes]

I am entirely in favour of appropriate stop-and-search, not least because an hour ago in Bermondsey, someone was clearly doing a runner having nicked stuff from a shop not far from my constituency office—they were a bit too far away for me to rugby tackle them, unfortunately. However, will the Minister ensure that the Government’s policy ends the excessive arrest of people who clearly should not be subject to stop-and-search, and the excessive stopping and searching of black, Asian and other minority groups?

[Damian Green]

That is precisely what the consultation is about. I regret that my right hon. Friend was prevented from being the “have a go” hero that I know he wants to be. I am happy to tell him that, even before the results of the consultation are published, the Metropolitan police have taken their own steps to improve the situation and that, from June 2011 to June 2012, in London, the arrest rate following stop-and-search went up from 10.6% to 17.3%. That suggests that the police are becoming much more sensitive about using that power in a way that leads to arrest.

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

18. What steps she is taking to tackle human trafficking.

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

We intend to publish a modern slavery Bill to strengthen further our response to this abhorrent crime. The Bill will consolidate existing offences, increase the maximum sentence available, limit future activities of perpetrators and introduce an anti-slavery commissioner. The National Crime Agency is also prioritising action against those involved in these appalling crimes.

[Annette Brooke]

I thank the Minister for that answer and welcome the introduction of the legislation. I fear that too many trafficked children currently do not receive the support they need. Will the Government consider including a proposal in the forthcoming legislation to appoint independent guardians to ensure that these vulnerable young people have advocates to access support?

[James Brokenshire]

My hon. Friend is right to highlight this approach to the support provided to those who are trafficked into this country. I note that the report recently published by the Children’s Society and the Refugee Council made a number of the points my hon. Friend has made. Local authorities already have a statutory duty to safeguard and promote the welfare of trafficked children in their care. That is not applied as well across local authorities as it should be. We have a major programme of work in place to transform the care system and we will be focusing on this specific vulnerable group.

[Ian Lucas (Wrexham) (Lab)]

Last week I attended a very worrying human rights briefing about human trafficking in Libya—the trafficking of people to Europe generally and the United Kingdom—and the impact of the difficult political situation there. Will the hon. Gentleman urgently discuss the situation with the Foreign Office and see what steps are being taken to limit the criminal activities emanating from Libya?

[James Brokenshire]

The hon. Gentleman makes a very important point about the need for work overseas to prevent people from being trafficked into this country. The recently formed National Crime Agency very much focuses on each element of this, really tackling the organised crime groups, and we are already in close contact with our ministerial colleagues at the Foreign Office, but I will certainly note the specific point he makes.

[Mike Freer (Finchley and Golders Green) (Con)]

20. What steps she is taking to address domestic violence amongst hard to reach groups.

[The Minister for Crime Prevention (Norman Baker)]

The coalition Government acknowledges that some victims of domestic violence have specific needs and require a specialist response. The updated violence against women and girls action plan sets out a series of steps to address these needs, and outlines additional measures to protect hard-to-reach victims.

[Mike Freer]

Many women in observant religious communities find it hard to leave a domestic violence background. What specific practical support can be given to these women so they feel comfortable about leaving a violent background?

[Norman Baker]

The Government acknowledges that victims face a variety of pressures when leaving violent relationships. In order to provide a specialist response for hard-to-reach victims, we have, for example, funded projects aimed specifically at those at risk of forced marriage and female genital mutilation, to raise awareness of the law, legal rights and support services. They can also be helped through the five freephone helplines the Home Secretary referred to earlier.

[Stephen Gilbert (St Austell and Newquay) (LD)]

21. What steps she is taking to help tackle unlicensed sexual entertainment venues.

[The Minister for Crime Prevention (Norman Baker)]

The Policing and Crime Act 2009 determined that decisions on licensing applications for sexual entertainment venues are best made at a local level. It also sets out the limited circumstances where such a licence would not be required. Hosting regular sexual entertainment without the relevant licence would represent a significant breach of broader licensing conditions, and local authorities are responsible for monitoring and enforcing those requirements.

[Stephen Gilbert]

I am grateful to my hon. Friend for that reply. Some pubs and clubs in my constituency have been regularly exploiting the loophole in the 2009 Act to which he refers. That puts patrons and performers at risk. Will he meet me to discuss how we can tighten up regulations in this important area?

[Norman Baker]

I understand my hon. Friend’s concerns. There is a balance to be struck between having rigorous and appropriate licensing conditions and imposing unnecessary bureaucratic burdens, but I will, of course, be very pleased to meet with my hon. Friend to discuss this further.

[Lorely Burt (Solihull) (LD)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for the Home Department (Mrs Theresa May)]

May I first thank and congratulate the police, and, indeed, all the other emergency services, on the excellent work they have been doing overnight and continue to do today for the victims of the terrible storm?

Earlier this month the new National Crime Agency was launched to lead the UK’s fight against serious and organised crime. For the first time we have a single national agency harnessing intelligence in order relentlessly to disrupt organised criminals at home and abroad. I have also announced that we will introduce in this Parliament a modern slavery Bill, which will include measures to send the strongest possible message to criminals: “If you’re involved in the disgusting trade in human beings, you will be arrested, prosecuted and locked up.” Modern slavery is an appalling evil in our midst and no man, woman or child should be left to suffer through this terrible crime. Finally, I have recently introduced an Immigration Bill which will stop immigrants using certain services where they are not entitled to do so, reduce the pull factors which encourage people to come to the UK, and make it easier to remove people who should not be here.

[Lorely Burt]

On the last point, what is the Secretary of State doing to ensure that her plans to introduce charges for foreign nationals using the NHS will not deter bright young talent from coming here to work or study?

[Mrs May]

My hon. Friend is right to draw attention to the fact that in the Immigration Bill, we will ensure not only that a better process will be put in place to deal with situations where people come here for a very short time, use the NHS and should be charged but the charges are not being retrieved, but that those who come for a temporary period and may use the NHS will actually contribute to the NHS. That is only fair to hard-working people up and down the country. We will be looking, in particular, at the issue of students, and we have been very clear that we will set the surcharge for the use of the NHS at a rate that is competitive, because a number of other countries across the world do exactly this and at a higher charge.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

I join the Home Secretary in thanking the police and all the emergency services for their excellent work in response to today’s storm. I know that the House will also want to send sympathies to the families of those who are reported to have tragically lost their lives as a result of the storm.

It is because the police do such a valued and vital job that it is also important to have effective investigations when things go wrong, so that they do not cast a shadow over the excellent work that so many police officers do each day. So does the Home Secretary agree that in order to do that, it is time to replace the police watchdog, the Independent Police Complaints Commission, with a new organisation with stronger powers?

[Mrs May]

I join the shadow Home Secretary in sending condolences to the families and friends of those who, it is reported, have lost their lives as a result of the storm, and she is right in saying that the whole House will wish to pass our sympathies on to those who have lost loved ones. On her question, I think it is right that we beef up the IPCC—that we give it a greater ability to deal with serious and sensitive cases and complaints that have been made against the police, rather than seeing so many of those complaints referred back to the police for their investigation. I think the public are concerned at the number of cases where they see the police investigating themselves, and the Government are committed to increasing resources at the IPCC. We have given it new powers and, if necessary, we will continue to do that.

[Yvette Cooper]

The Home Secretary’s response is welcome, but it does not go far enough. Let us consider some of the problems we have seen for the IPCC. So far, the IPCC has proved that it is powerless to direct action in the case of West Mercia police; it is powerless to get seven former police officers to come to interview over Hillsborough; and it is unable to keep the confidence of families over the Mark Duggan case, over undercover policing and Stephen Lawrence, or over the death of Ian Tomlinson. Surely the Home Secretary agrees that the public need to have confidence not only in the police, but in the watchdog, in order for an effective job to be done? The resources are not sufficient, and the watchdog needs the powers to be able to launch its own investigations and ensure that lessons are learnt. That is the best way to ensure that a shadow is not cast over the excellent work the police do. We have been urging her to do this for more than a year now, so why will she not introduce these reforms to give the watchdog the much stronger powers that it needs?

[Mrs May]

The right hon. Lady knows full well that not only the issue of the investigation of complaints against the police, but the whole question of the integrity of the police goes further than simply the IPCC. We have taken a number of steps: for example, the register of struck-off police officers, which will be introduced as a result of action taken by this Government. It is exactly the sort of thing that would have helped in respect of the police officer involved in the issue relating to the Ian Tomlinson death, to which she referred. This Government are taking action on the IPCC. We are going to increase the resources, we are increasing the powers for the IPCC and we will ensure that it will be investigating the serious and sensitive cases which currently are passed back to the police. I think it is right that these investigations are done by a body that is not the police themselves.

[Mr Speaker]

We need short questions and short answers. Let us be led by Mr Marcus Jones.

[Mr Marcus Jones (Nuneaton) (Con)]

T3. Several constituents of mine who have made complaints against the police to the IPCC feel that it did not have the necessary teeth to act on their grievance. Notwithstanding my right hon. Friend the Home Secretary’s previous answer, will the Minister say what more can be done to deal with this situation?

[The Minister for Policing, Criminal Justice and Victims (Damian Green)]

As my hon. Friend will just have heard, it is precisely to address this genuine public concern that we are increasing not only the resources available to the IPCC but its powers, so that it can take on the serious and sensitive cases. The powers we have given it are ones the IPCC has requested because it has identified the gaps in its own powers.

[Nic Dakin (Scunthorpe) (Lab)]

T2. Will the Home Secretary confirm that for the past year, police have had to destroy the DNA of people arrested for but not charged with rape without the right to appeal to the DNA commissioner, which the Prime Minister promised they would have?

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

We have amended the rights to retention of DNA to ensure that those convicted of offences are properly on the database, which the previous Government failed to do. We have introduced a new process whereby the police will be able to appeal to the commissioner, and they have not sought to address that in respect of historic DNA cases.

[Robert Halfon (Harlow) (Con)]

T5. As the Minister will be aware, Essex unfortunately has one of the highest levels of domestic violence in the country, with nearly 27,000 cases reported to the police in 2011-12. Many more victims are afraid to come forward. What specific training is being given to police officers to spot domestic violence cases, given the vulnerable state victims are in following such abuse?

[Damian Green]

We have taken a number of actions under the ending violence against women and girls action plan, including domestic violence protection orders and the domestic violence disclosure scheme. Her Majesty’s inspectorate of constabulary has conducted a review of all forces and their response to domestic violence to ensure that the good practice available in some force areas is spread as widely as possible—including, I am sure, my hon. Friend’s local force.

[Ann McKechin (Glasgow North) (Lab)]

T4. Will the Home Secretary confirm whether she has held any discussions with her fellow European Union Ministers on developing a common approach to how we will handle the increasing flood of Syrian refugees, particularly so that we can try to avoid disasters such as those we have witnessed in recent days?

[Mrs May]

A number of discussions have been held at EU level in relation to Syrian refugees both at the Justice and Home Affairs Council and at the European Council that took place at the end of last week, on which the Prime Minister will be making a statement after questions have finished. We have been considering, and the UK is supporting, a regional programme close to Syria to enable us to work with those countries that have borne the brunt of accepting refugees from Syria, to ensure that the right and appropriate support is given. The United Kingdom has given more humanitarian aid for Syrian refugees than all the other members of the European Union put together.

[James Morris (Halesowen and Rowley Regis) (Con)]

I recently took part in a knife crime summit in Birmingham following a series of incidents that have taken away more young lives. Does the Minister agree that stop-and-search powers for the police can be an effective way of clamping down on the carrying of knives in certain of our inner-city communities?

[Damian Green]

I absolutely agree that stop-and-search is an extremely important tool in the hands of the police. My hon. Friend will be aware that the consultation is not about reducing police effectiveness in the use of stop-and-search, but increasing it by making it more targeted, so that it is more effective for the police and gives rise to more confidence in communities.

[Heidi Alexander (Lewisham East) (Lab)]

I recently met a young Tamil man who had previously been deported back to Sri Lanka by the Home Secretary. He showed me his torture scars resulting from the Sri Lankan terrorist investigation department having tortured him. Will the Minister give me a categorical assurance that we are no longer returning men to Sri Lanka to be forcibly abused by the Sri Lankan authorities there?

[The Minister for Immigration (Mr Mark Harper)]

The hon. Lady will know that we make decisions on asylum on a case-by-case basis and very carefully. We look at the country information we have and use the best available data. Everyone whom we determine does not have the right to our protection has the opportunity to have their case heard by an independent judge. We only return people to countries where we do not think that they need our protection, and we always keep the situation in the country under close review, working with our international partners.

[Sir Tony Baldry (Banbury) (Con)]

Is there any possible reason for a chief constable or another warranted police officer not to respond to a reasonable request or recommendation from the Independent Police Complaints Commission?

[Damian Green]

Obviously, all chief constables will take full notice of what the IPCC says and will respond to reasonable requests. I think I know the matter to which my hon. Friend refers, and he will have seen that in that case chief constables have responded to what the IPCC recommended.

[Kerry McCarthy (Bristol East) (Lab)]

T9. According to Refuge, three women a week commit suicide because of domestic violence and their abusers usually escape scot-free. Some campaigners are calling for a specific offence of liability for suicide to be introduced. What does the Home Secretary think is the answer?

[Mrs May]

Of course, it is horrific to see the number of women who die at the hands of their abusers or who commit suicide as a result of the abuse they are suffering. This is an issue we have looked at in the past, and for a variety of reasons we decided that we would not go ahead with the proposal the hon. Lady puts forward, but I am happy to look at the issue again.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

One of the stubborn points that I hear from my constituents is that although crime is dropping, which is obviously welcome, rural crime is still not coming under control. Will the Minister please take a very close look at the police community support officers? Most of the stolen property turns up in Exeter or Bristol. If we had the resources for PCSOs, we would be able to detail a lot more of the thefts that are going on across places such as Exmoor, get some of the stuff back and deter these criminals if they thought they were going to get caught when they get back with the stuff that they had stolen.

[Damian Green]

I am happy to tell my hon. Friend and the House that in Avon and Somerset crime is down 21% since June 2010. We should pay tribute to the police in Avon and Somerset for doing that. I will look carefully at the recommendations that my hon. Friend makes about rural crime.

[Mr Nigel Dodds (Belfast North) (DUP)]

A moment ago the Home Secretary welcomed the setting up of the National Crime Agency, as do I, but unfortunately, as she will know, in Northern Ireland it has been blocked by two parties. What steps is she taking in conjunction with the Secretary of State for Northern Ireland and the Minister of Justice in Northern Ireland to address this very big failing in relation to tackling crime and criminal gangs in Northern Ireland?

[Mrs May]

The right hon. Gentleman raises an important point. We have had a number of discussions with both my right hon. Friend the Secretary of State for Northern Ireland and the Minister of Justice in Northern Ireland on this matter. The National Crime Agency will be working with the Police Service of Northern Ireland on matters relating to serious and organised crime and all matters under the National Crime Agency’s responsibilities, and we continue to talk both to my right hon. Friend and to the Minister of Justice and look for a further way forward on this issue.

[Julian Smith (Skipton and Ripon) (Con)]

Following the disturbing reports in The Sun this morning about the impact of the Snowden files on our intelligence services, may I urge the Home Secretary to continue to balance national security with press freedom as she deals with this issue?

[Mrs May]

My hon. Friend has raised an important point, which he has rightly raised on a number of occasions in the House. It is important, of course, that we protect press freedom, but we also need to ensure that we are able to protect our national security and that we do not see information being published which could give any succour to those who wish to do us harm through terrorism.

[Mr Speaker]

Extremely briefly now. I call Mr Nick Raynsford.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

The Minister for Immigration will be well aware that I have had to draw his attention to unreasonably long delays in implementing tribunal decisions which have reversed Home Office refusals in individual cases. When will he put an end to the scandal of people waiting six months or, in some cases, more than a year for legally binding decisions to be implemented by his Department?

[Mr Harper]

The right hon. Gentleman is quite right: he has drawn some of those cases to my attention. Sometimes, when tribunals make rulings that require a change in policy, it is important to get that policy right to make sure that we can implement the tribunals’ decisions in the way they intended. If the right hon. Gentleman has any further cases, which he seemed to have, will he please get in touch with me and I will be happy to take those up for him.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry to disappoint remaining colleagues, but we must now move on.

EU Council

Monday 28th October 2013 Commons Chamber

15:33

[The Prime Minister (Mr David Cameron)]

In the past 24 hours the country has been hit by one of the worst storms for many years. I know the thoughts of the whole House will be with the families and friends of the four people we know have lost their lives. I am sure the whole House will join me in paying tribute to our emergency services and to all those who have been working to clear up the debris and get our transport system moving again. All the agencies involved are working as fast as possible to get things back to normal.

Let me turn to last week’s European Council. The key subjects under discussion were business regulation, competitiveness and monetary union. We also discussed migration policy following the Lampedusa tragedy and the importance of the EU’s eastern partnership, specifically with respect to Ukraine, so the background to this Council was the state of the European economy. There is no doubt that the outlook is better than it has been, particularly here in Britain, where Friday’s figures showed the fastest growth for three years. My aim at this Council was to do everything possible to enhance the prospects of a sustained and balanced recovery here in the UK. We made good progress in three areas in particular: cutting red tape; promoting trade and the completion of the single market in digital and services; and protecting British interests as the eurozone integrates further. Let me briefly say a word about each.

First, on cutting red tape, Britain’s business taskforce produced an excellent report, which was endorsed by 100 European businesses. I chaired a meeting bringing members of the business taskforce together with President Barroso and the leaders of Germany, Sweden, Italy, Poland, Finland, Estonia and the Netherlands. Those countries, which represent all parts of Europe and all political traditions, agreed on the need to make more progress in cutting regulation and helping businesses across Europe to create jobs. The strong language adopted in the communiqué by all EU member states reflects that ambition. It calls for rapid implementation of REFIT, the Commission’s own bureaucracy-cutting initiative, and a proper scoreboard to measure exactly how much regulation is being cut. Deregulation is now part of the EU agenda in a way that it simply has not been before.

Secondly, on trade, we welcomed the conclusion of the new EU-Canada trade deal, which could be worth £1.3 billion to the British economy, with estimates suggesting that British exports to Canada could go up by as much as a fifth. Last week’s agreement also means that we can now move on to focus on the EU-US talks that we began at the G8 at Lough Erne. There were some attempts to link that potential US trade deal with the concerns about US intelligence, but the Council rejected the idea.

On the digital single market, once again a commitment was made to complete that by 2015, potentially boosting growth by as much as 4% of the EU’s total GDP. As Britain is a world leader in e-commerce, that is very much in our interests. We made good progress at the Council on issues such as portability of data, e-identification, e-invoicing and payment services, and an EU-wide copyright regime for the digital age. But we also agreed not to rush ahead with the data protection directive on an artificial timetable, because the current draft has disproportionate burdens on small business that need to be removed. With regard to the services directive, we also agreed that it was time to look at a new sector-by-sector approach, rather than just trying to remove all the outstanding barriers to free trade in services in one go, a process that has stalled in recent years.

Thirdly, on defending Britain’s interests, as I have argued repeatedly in this House, the European Union is changing and the eurozone needs more integration and co-ordination, but Britain is not in the single currency and is not going to be, so we should not have to take part in those additional pieces of co-ordination, whether they cover economic or social policy. Therefore, while eurozone members agreed to even more intrusive policy co-ordination, including on social policy, I was clear that Britain will not take part. That is reflected in the communiqué, which states that all changes are voluntary for those countries not in the single currency.

On the tragedy at Lampedusa, we agreed the next stages of the work of Frontex, which is responsible for trying to stop people coming into the EU in the first place, but we rejected the idea that there should be additional burden sharing for so-called “front-line states”, not least because the figures show that Britain, France, Germany, Belgium and Sweden received almost 70% of asylum applications recorded in the EU in the last 12 months. What is most important of all is to help stop the problems at their source. The UK will continue to play a leading role in that, for example through support for border security in Libya and the focus of our development assistance on helping countries at risk of instability.

On the eastern partnership, we agreed that countries that look to Europe for support, such as Ukraine, should be free to enter into agreement with us, while of course continuing to insist on proper standards of governance and justice that such a relationship should entail.

Finally, because of the recent controversies there was much discussion of the role of intelligence agencies. We agreed a statement, which we signed as Heads of Government—because there is no EU competence in this area, and nor should there be—saying that European countries and America should have a relationship based on trust and referring to the damage that had been done by recent revelations. The UK has a very strong, long-standing, trust-based relationship with the US, not least as part of the “Five Eyes” partnership, together with Canada, Australia and New Zealand.

With regard to our own intelligence services, it has been a long-standing stance that we do not comment on their activities, but it is worth saying this: we have parliamentary scrutiny of our intelligence agencies through the Intelligence and Security Committee, and we have strengthened that oversight. Our agencies operate under the law and their work is overseen by intelligence commissioners. Of course, as technology develops and the threats we face evolve, we need to ensure that the scrutiny and frameworks in place remain strong and effective, but we have every reason to be proud of our intelligence services and the way they are properly constituted in our country.

Since 2000, we have seen serious attempts at major acts of terrorism in Britain, typically once or even twice a year. Since 9/11—this is a significant figure— 330 people have been convicted in our courts, here in the UK, of terrorism-related offences. This year alone, there were major trials related to plots including plans for a 7/7-style attack with rucksack bombs, two plots to kill soldiers, and a failed attempt to attack an English Defence League march using an array of lethal weapons. There were guilty pleas in each case. Twenty-four terrorists were convicted and sentenced to more than 260 years in jail. I quote these figures just to demonstrate the scale of the ongoing threat that we face in our country. Our intelligence has also allowed us to warn our EU allies about terrorist plots aimed at their people, about cyber attacks on their businesses and infrastructure, and about attempts in their own states to traffic drugs, people, arms and money illegally.

Our intelligence officers serve our country without any public recognition. Some have given their lives in this service, and yet their names are not known and their loved ones must mourn in secret. We owe them, and every intelligence officer in our country, an enormous debt of gratitude. They are silent heroes and heroines keeping our country safe, and they deserve our support. I commend this statement to the House.

15:42

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement. May I start by joining him in sending my deepest condolences to the families of the four people who have died during the storm conditions of the last 24 hours? Let me also join him in thanking the emergency services for the work they have done overnight to protect people and the work they are now doing to clear the debris. Will he take this opportunity to update the House on the hundreds of thousands of homes without power in south-west England, East Anglia and the midlands, and on how long it is expected to take for it to be restored?

On the European statement, I join the Prime Minister in his support for the work of our intelligence services. It is vital, it keeps us safe, and, as he said, by its very nature it goes unrecognised. I join him in applauding the men and women who work for our intelligence services. I also support the summit’s statement on this issue. We can all understand the deep concerns that recent reports have caused in some European countries, especially Germany, so as well as providing that support for intelligence services, it is right that every country ensures proper oversight of those activities.

Turning to the formal agenda of the summit, first, on trade, we welcome and support the conclusion of the Canada-EU trade deal and agree with the focus on the US-EU trade agreement. At the start of this year, a timetable for December 2014 was set to complete negotiations. Will the Prime Minister set out any further developments on that challenging timetable and its feasibility? Does he agree that the possibility of this agreement is an important reminder, including perhaps to his Cabinet, that a prosperous future for Britain lies inside, not outside, the European Union?

Secondly, completion of the digital single market could have a significant impact on our prosperity. On numerous occasions, the Prime Minister has come to this House stating his commitment to expand the single market in digital services. What has been achieved at this summit that was not achieved at previous summits? Can he reassure us that the delay to the data protection directive is a delay and not simply a pushing of this into the long grass for it never to be completed?

On regulation, we will look at the proposals of the Prime Minister’s taskforce. We agree with the need to restrain unnecessary regulation and welcome any progress on this, but we do need to distinguish between good and bad regulation. That takes me to a couple of questions about his taskforce’s report. In the light of the horsemeat scandal earlier this year, does it really make sense, as the taskforce seems to be suggesting, to scrap new rules providing transparency about where slaughtered meat has come from? What about rules on agency work? Those rules play an important role in deterring employers from using low-wage migrant labour to undercut local workers, but his taskforce says they should be watered down. What reassurance can he provide that this will not simply mean cuts in wages and conditions, and a race to the bottom?

On broader economic policy, I note that the Prime Minister said at the end of his European summit press conference that his priority was now to

“make sure...it is a recovery for all”.

Does this represent an acknowledgement that despite the welcome news on growth, millions of people still feel worse off because of the cost of living crisis? Talking of that crisis, did he share with other European countries the fact that the UK has the highest inflation in Europe and in the last quarter we saw the lowest wage growth in Britain on record?

The Prime Minister also said after the summit that he wanted to help people “excluded from our economy”. This includes youth unemployment, which is mentioned in the communiqué. [Interruption.] I know that Government Members do not want to hear about youth unemployment, but it is a very important issue. The shameful truth is that nearly one in five unemployed young people in Europe lives in Britain, and the Prime Minister’s youth contract has recently been branded a failure by his own advisers, so what did he say at the summit about the changes needed here in Britain when it comes to youth unemployment?

For people who are struggling with their energy bills and whose wages are falling, and for young people looking for work, is it not the truth that nothing is different after this summit from what it was before? To be fair, in his heart of hearts, I think even the Prime Minister realises that, because he began his press conference after the summit with the stirring words: “Another European Council concluded.” Is not that the best that can be said for this summit?

[The Prime Minister]

I make no apology for coming to this House and repeating the policy prescriptions we need to achieve in Europe. We have a very consistent record of going after completing energy, completing digital and completing services. That is what will make a difference. It is hard work in Europe—it is hard going —but we are making progress.

The Leader of the Opposition asked a number of questions; let me answer all of them. On electricity disconnections, more than 200,000 people are currently disconnected and work is under way to reconnect them. Obviously, circumstances will differ in each case, so it may take longer for some than others.

I very much welcome the fact that there is cross-party agreement on the intelligence services. Over recent years, we have put in place—under Governments of both parties—very good arrangements for governing our intelligence services and we should be proud of the work they do.

On the EU-Canada trade deal, the right hon. Gentleman is right that there is still more to do. I think that the most difficult decisions in principle have been made, particularly on key areas such as beef and dairy, so I do not expect this to take a long time. The pressure is on, because everybody knows that the EU now wants to turn to the bigger deal with America, so the Canada deal needs to be wrapped up.

On digital and the single market, there is quite a lot of detail in paragraphs 5 to 9 of the communiqué about the specific progress on individual items. Whether they are telecoms, data or rules for e-commerce, a huge number of detailed changes have to be made.

I reassure the right hon. Gentleman that we have looked very closely at the data protection directive. The effect of the current draft would be to add more than £300 million to the costs of UK business. It would mean that quite small businesses that do market research, for example, would have to employ one extra person simply to comply with the directive. We need a directive in order to make the digital single market work properly, but the current draft is wrong and we should hold it up so that we get it right.

On deregulation more generally, I hope the right hon. Gentleman will read the report, which is excellent because it comes up with good principles that should be adopted in Europe, such as the one-in, one-out principle that we have adopted in the UK. It also makes 30 recommendations for directives to be scrapped, amended or in some cases completed. It is a good report.

On unemployment, let me answer the right hon. Gentleman specifically. The UK youth unemployment rate is below that of France, Italy and the EU average. It is down over the quarter. The youth claimant count is down 79,000 since the last election. There is much more to do, but the fact is that just this morning we announced 100,000 extra training opportunities for young people and there are record numbers of apprenticeships—they are now running at twice the rate they were under the previous Labour Government.

The right hon. Gentleman made a number of economic predictions that rather reminded me of other predictions he has made over the years. He told us in 2010 that our policies would lead to a loss of 1 million jobs. That was completely wrong: we have added 1.4 million private sector jobs. In 2012 he was still saying, amazingly, that the loss of public sector jobs would not be made up for by the growth of private sector jobs. Again, he was wrong: we got 1 million more people in work.

As late as June this year, the shadow Chancellor, who is not in his place—presumably he is sorting out Labour’s HS2 policy—said that we would choke off growth, and yet the truth is that this year we are forecast to grow more than twice as fast as Germany. Those are the results we are getting both here and in Europe.

[Mr John Redwood (Wokingham) (Con)]

During the summit, did the Prime Minister manage to raise the issue of energy prices? EU regulations mean that we have much dearer energy than America or Asia, and I seem to remember the previous Government willingly signing up to those proposals. They are clearly a competitive impediment to us.

[The Prime Minister]

There was no specific discussion about energy prices, but one of the proposals of the business taskforce report is to ensure that we do not add to the cost of, for instance, shale gas extraction. That was very much welcomed by other member states. We need to consider how regulations add to the costs for energy consumers.

[Mr Jack Straw (Blackburn) (Lab)]

I welcome the Prime Minister’s efforts in respect of deregulation. May I ask him to pay particular attention to the REACH—registration, evaluation, authorisation and restriction of chemicals—regulation? As I have explained to the Secretary of State for Environment, Food and Rural Affairs, that regulation is likely to have a deleterious effect on one company in my constituency, which does not wish to be named for obvious reasons. We all support health and safety measures in respect of chemicals, but will he look at the over-elaborate enforcement of the regulation, which is unnecessary and could do gratuitous damage to companies in this country?

[The Prime Minister]

The right hon. Gentleman makes a good point. That issue is covered in the excellent document by the business taskforce.

May I take this opportunity to say how much the right hon. Gentleman will be missed in Parliament by Members on both sides of the House? I worry that if he retires to his house in my constituency, he might be a rather frequent correspondent when he has so much time on his hands. However, his contributions are always welcome.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

May I join the Prime Minister in offering my condolences to those who are suffering from bereavements as a result of today’s weather, and my thanks to the emergency services? I also echo his warm words about working with our eastern European neighbours, including Ukraine, at the European Council.

Following last week’s very good economic news for Britain, does the Prime Minister agree that we can best show that the EU provides more jobs and trade in this country not only by making good trade deals, but by developing a digital common market in which Britain can lead, because English is our language, and which can open the telecoms market and end the nonsense of roaming charges, which are onerous and expensive?

[The Prime Minister]

Ending roaming charges would be a good step that would demonstrate that EU directives can sometimes make people’s lives easier, rather than more difficult. The challenge is that, all too often, we find that a directive will add to business costs, rather than reduce them. That is why it is vital to hardwire into the EU’s systems a greater belief in deregulation and cost-cutting.

[Mr Peter Hain (Neath) (Lab)]

If we are giving impetus to association agreements with Ukraine, Moldova and Georgia, where does that leave Turkey? What assessment has the Prime Minister made of the reports that Germany and France may be revising their attitude to Turkish membership of or association with the European Union? Surely Turkey should be a greater priority, given its crucial role as a gateway between Europe and Asia and between the Christian and Muslim worlds.

[The Prime Minister]

We should take the two cases separately. We are in accession negotiations with Turkey and another chapter has just opened in relation to its membership of the EU, which I support. Ukraine and the other Eastern Partnership countries are a different matter. They are obviously under an enormous amount of pressure to join a trade area dominated by Russia. We want to say to those countries that if they want to have a relationship with Europe and to trade with it, they can. This is an opportunity to say to countries such as Ukraine that they must continue to make progress with governance and justice if they want to have that relationship. That is an important part of the EU’s relationship with those eastern countries. I therefore think that the two cases are slightly different.

[Andrea Leadsom (South Northamptonshire) (Con)]

The Prime Minister is determined to achieve proper reform of the EU. Does he agree that it is ridiculous that the EU spends only 2% of its annual budget on trade and more than two thirds of its annual budget on structural funds and agricultural policy? Does he think that that needs to change?

[The Prime Minister]

That does need to change. We made some progress at the recent budget negotiations, because the deal for the seven-year period involves a cut. The EU will, to coin a phrase, have to do more with less. Hopefully it will do less with less—that would be even better. It should focus on things that will improve living standards in European Union countries. Obviously, trade deals are chief among those things.

[Kevin Brennan (Cardiff West) (Lab)]

Did the Prime Minister discuss with Chancellor Merkel the targeting of her phone by the American intelligence services? Will he tell the House whether his phone has been targeted and, if not, why not?

[The Prime Minister]

There was a good moment at the dinner when one EU Prime Minister said how disappointed he was that clearly no one was interested in his conversations. I will not reveal who that was. We do not comment on these issues. The White House has made the situation perfectly clear and I do not need to add to what it has said.

[Mr Speaker]

I call Alistair Burt.

[Hon. Members]

Hear, hear!

[Alistair Burt (North East Bedfordshire) (Con)]

Thank you, Mr Speaker, and I thank colleagues very much.

I welcome what the Prime Minister had to say on migration and avoiding the tragedies in the Mediterranean, but will he reaffirm the long-term nature of support to Arab countries in transition? There is a sense that just two years after the events of 2011, countries should be settling down and sorted out, but the impact on politics, economics and security has been significant. If we are to avoid the tragedy of deaths in the Mediterranean, and greater migration, an assurance from the United Kingdom and the EU that there will be long-term support for transition would be helpful.

[The Prime Minister]

My hon. Friend did a huge amount in the Foreign Office to ensure proper relationships between the EU and those north African countries, and that we put in resources to try to help stabilise them. Clearly there is much more work to be done, and we must keep on with that initiative because the best way to stop those migratory flows is to help heal those countries at source.

[Alison McGovern (Wirral South) (Lab)]

May I push the Prime Minister a little further on that point? He said in his statement that the next stages of work for Frontex were agreed at the Council? Will he say what that amounted to and what part the UK will play, both by itself and as part of necessary EU co-operation? Nobody in this country wants any more of the terrible incidents that we have seen in the Mediterranean.

[The Prime Minister]

As the hon. Lady said, the tragedies that have happened were appalling, and we must therefore improve all the ways we deal with this issue. Frontex is, as its name suggests, absolutely on the front line, and it needs the resources necessary to carry out its work. There will be a bigger and broader debate in the EU about the whole issue of migration, and we should try to avoid the sense that there are somehow front-line states such as Italy or Malta that are under particular pressure. When we look at the figures and see how many asylum seekers per 1,000 people there are coming to Britain or countries such as Hungary, we see that there is a fair burden share. All those issues will be discussed at European Council, probably after the next European elections.

[Mrs Anne Main (St Albans) (Con)]

Were there any discussions at the European Council about the role that the EU might play in the forthcoming election in Bangladesh, in observing and ensuring free and fair elections?

[The Prime Minister]

That issue was not discussed, because we were focused on trade and the single market, and additional issues of migration and the eastern partnership. Observers can play a role, however, and I am sure my friends in the Foreign Office who are sitting next to me will respond to my hon. Friend on how Britain and the EU can help with those elections.

[Mr David Winnick (Walsall North) (Lab)]

Given the orchestrated campaign and witch hunt against The Guardian, is this an appropriate time to congratulate it on publishing details of how the mobile phone of the German Chancellor has been monitored? Does the Prime Minister consider that that sort of information should be in the public domain?

[The Prime Minister]

I certainly would not congratulate The Guardian newspaper, because I can see what has been done. Information has been published about the work of our security and intelligence services that will, quite frankly, make this country less safe. We live in a free country, so newspapers are free to publish what they want. We have not been heavy-handed and come in with injunctions and all the rest, but we appeal to newspapers to use judgment, common sense and responsibility when they make such decisions.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I congratulate my right hon. Friend on his emphasis on deregulation for British business. To get such deregulation, what kind of treaty change does he think we will need in the end?

[The Prime Minister]

We must ensure that the way Europe works is not always by reaching for regulatory changes and costs when it examines a problem. Sometimes that will just be about Europe behaving in a different way—as I hope it will on shale gas, for example—but on other occasions it will require institutional changes, such as the red card system that my right hon. Friend the Foreign Secretary has suggested, or further treaty changes to try to reduce the burden of regulation, or indeed take this country out of areas of regulation. All those things should be on the table.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I thank the Prime Minister for an advance copy of the statement. It is unclear whether the UK will be allowed to rejoin some measures following the block opt-out of EU criminal law because, of course, rejoining will be subject to veto by other members. What discussions on that did the Prime Minister have with his counterparts? Would it not be better to address any concerns he has by trying to reform the system rather than by leaving it, as was so clearly said in the recent Cambridge university law faculty paper on the subject?

[The Prime Minister]

I did not have discussions about that at this European Council—it was not on the agenda—but it is absolutely right to exercise the UK opt-out. That means coming out of all the areas and having the opportunity, if we so wish, to negotiate our way back in to those that matter most. That is the right approach. Europe should be focused on prosperity, growth and trade, and not on other issues.

[Dr Julian Lewis (New Forest East) (Con)]

Did the Prime Minister have any conversations with our EU friends about his welcome commitment to an in/out referendum on British membership? Will he make it a condition of any future coalition that any future coalition partner must agree not to stand in the way of such a referendum?

[The Prime Minister]

My hon. Friend is always keen to get such conditions in black and white, but I can satisfy him on this occasion. I have said clearly that I would not be Prime Minister of a Government unless they put in place that EU referendum by the end of 2017. I could not be more clear. I did not have any specific conversations about the referendum pledge. It is well known by EU members. Interestingly, while holding the referendum, Britain is perfectly capable of leading the way and bringing countries together on issues such as deregulation to pressurise the rest of the EU to take up an agenda that would be good for all of us.

[Jeremy Corbyn (Islington North) (Lab)]

Will the Prime Minister tell the House what discussions took place on relations with Iran, on the future of a sanctions policy against Iran and, importantly, on Iran’s participation and that of every other partner in the region in a Geneva II peace process to try to end the ghastly war in Syria?

[The Prime Minister]

There was not a Council-wide discussion, but I took the opportunity to speak with Cathy Ashton, who is doing an excellent job on behalf of this country and the EU. It has rightly taken a tough line in negotiations with Iran, because steps by Iran on the nuclear front need to be seen. On Syria, the first thing that has to happen is that Iran needs to sign up to Geneva I and those principles before being able to move forward to Geneva II.

[Sir Edward Garnier (Harborough) (Con)]

Turning back to the issue of the refugees coming across the Mediterranean and the tragedy at Lampedusa, did the Italian Government or Italian leaders ask my right hon. Friend whether there was any assistance by Royal Navy patrols? On Libyan border security, was my right hon. Friend referring to Libya’s African land border or to the maritime border?

[The Prime Minister]

The Italians have been doing very good work to up their naval patrols in a particular operation to try to assist with the problem. They have not asked us for any assistance, but relations between Britain and Italy are extremely good. On Libya, Britain’s focus is more on helping on the land borders that have been particularly porous and dangerous in recent years. Obviously, we are also working with Libya to try to increase its level of domestic security, because one key to preventing such migratory flows is ensuring that countries have Governments who work.

[Keith Vaz (Leicester East) (Lab)]

Further to the question from the hon. and learned Member for Harborough (Sir Edward Garnier), the Italians have been doing a good job but, even last weekend, 800 migrants were prevented from going to Lampedusa by the Italian authorities. Although support for Frontex and agreements on an EU basis with origin countries are useful, it might be necessary for Britain to have bilateral arrangements with some origin countries. Does the Prime Minister support that?

[The Prime Minister]

I always listen carefully to the right hon. Gentleman on such issues—his Home Affairs Committee does such good work on them. My point is that Britain already does over and above our share of taking people who are fleeing torture and persecution, or people who are fleeing for a better life but who claim asylum. We share a very big part of the burden and I do not want to do things that add to it.

[Julian Smith (Skipton and Ripon) (Con)]

I welcome the Prime Minister’s robust defence of our security services. Following this morning’s revelations in The Sun on the impact of the Snowden leaks, is it not time for any newspaper that may have crossed the line on national security to come forward and voluntarily work with the Government to mitigate further risks to our citizens?

[The Prime Minister]

I thank my hon. Friend for his consistent championing of the intelligence services, who do such important work to keep our country safe. As I said, we have a free press and it is very important that the press feels it is not pre-censored in what it writes. The approach we have taken is to try to talk to the press and explain how damaging some of these things can be. That is why The Guardian destroyed some of the information on disks it had, although it has now printed further damaging material. I do not want to have to use injunctions, D notices or other, tougher measures; it is much better to appeal to newspapers’ sense of social responsibility. However, if they do not demonstrate some social responsibility, it will be very difficult for the Government to stand back and not to act.

[Jenny Chapman (Darlington) (Lab)]

What is the Prime Minister going to do about the fact that even people with as many as three jobs are unable to make ends meet? Prices in the UK are rising faster than anywhere else in the EU.

[The Prime Minister]

The first thing to do is to keep inflation down. The Bank of England has that responsibility and we have seen better figures in recent weeks. Even more important is to help people with their living standards by making sure that we continue to grow the number of people in work—up by 1 million since the election—and, crucially, that we cut taxes. We are now seeing people earn £10,000 before they pay any income tax. That means someone on a minimum wage working a full-time week is seeing their tax bill cut by two thirds —that is good news for them.

[Christopher Pincher (Tamworth) (Con)]

Will my right hon. Friend say whether at the EU Council there was any attempt by our EU partners to raid our rebate further? They were quite successful at it when the Labour party was in power. What would his response be to such a raid?

[The Prime Minister]

It was one of the few EU Councils that I have been to where there was not a specific attempt to raid our rebate. However, because the corset, as it were, that we put around the EU budget between 2014 and 2020—the seven-year deal—is so tight, the European Parliament is trying to spend as much money as possible before 2014. I think that what we will see, depressingly, is amending budgets to the 2013 budget, on which, of course, we can be outvoted, but from 2014 onwards we are going to see the EU budget cut. That is good news, because it means less contribution from us, and our rebate is safe.

[Chris Bryant (Rhondda) (Lab)]

Talking of the Prime Minister’s constituents, Mr Phil Ball is one of the Greenpeace activists in prison in Murmansk, along with five other Britons, including Kieran Bryan, who is a journalist. There are no German nationals in Murmansk, but Angela Merkel rang President Putin to say that this is a sledgehammer to crack a nut. Has the Prime Minister already rang President Putin? If not, will he do so as a matter of urgency?

[The Prime Minister]

This is a serious issue, which I have spoken about in the House previously, not least because one of my constituents is involved. The Minister for Europe has been on this case day after day. I will look at every single intervention I could possibly make to help. If contact directly with President Putin would be helpful, I am certainly prepared to consider it.

[Harriett Baldwin (West Worcestershire) (Con)]

I note that the EU Council agenda now includes the social dimensions of economic and monetary union. Will the Prime Minister confirm that welfare systems continue to be a national competence and that he will fight any attempt by the Commission to interfere with the UK’s important welfare reforms?

[The Prime Minister]

I thank my hon. Friend for her question. There are two points here. What the eurozone countries want is a sort of social score card to go with deeper integration. I said that we did not want to be involved in that and insisted on a voluntary system. We not only need to see that welfare issues remain for national Governments; we need to look at the habitual residence test and some of the problems with the welfare system. This is not now a uniquely British complaint about European systems. We hear it from German and Dutch Ministers and others, so we need to build an alliance to try to ensure that we have a better system in Europe.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

What progress—or lack of it—was made on banking union and did the Prime Minister find any support among fellow EU leaders for the idea that it would benefit Britain’s very important financial services industries to pull out of the EU and erect barriers between us and our most important market?

[The Prime Minister]

There was some progress on banking union, but this is an issue predominantly for members of the eurozone. A single currency necessitates some form of single bank regulation and resolution system, and that is what its members are putting in place. They are doing so quite tentatively, however, because they are beginning to realise what an enormous transfer of sovereignty it could amount to—theoretically, of course, it would see German citizens standing behind Greek banks and vice versa. Some progress was made. Britain is not taking part in this banking union, of course, but we have achieved some excellent safeguards to ensure that we have a real say over those parts of financial services regulation to which we are still subject. I suspect that progress towards full banking union will be fairly slow, but in any case Britain will not be involved.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

I join my right hon. Friend in paying tribute to our security services, whose members not only risk their lives to keep us safe, but have to sit in silence while ludicrous conspiracy theories are often thrown at them. If the first rule of intelligence is the “need to know” principle, the second is do not throw stones in glass houses. At the European Council, did he have a chance to speak to his French counterpart, the French President, about his intelligence services’ record on industrial espionage, and will he seek assurances that the French will not use the Snowden affair as a political football for another agenda and therefore undermine the EU’s and Britain’s intelligence capabilities?

[The Prime Minister]

First, I insisted that we were clear that intelligence services were a national competence, not an EU competence, which was why the statement, of which my hon. Friend can see a copy, was issued by EU Heads of State and Governments, not the European Council or the European Commission. That is very important. Certainly, there was a lot of discussion at the dinner of the point my hon. Friend raises. Different Prime Ministers and Presidents made different points and I listened carefully to their contributions.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Prime Minister has rightly paid tribute to the work of the intelligence services, and I am sure he will agree that hundreds of lives have been saved in Northern Ireland over many decades as a result of the excellent work of many intelligence officers. Does he agree that it is important to put on the record the excellent life-saving work of people in the security forces and intelligence services, at a time when it has become ever so fashionable to degrade and denigrate that work and to revise the roles of various groups during the troubles in Northern Ireland?

[The Prime Minister]

The right hon. Gentleman makes an important point. It is not always possible—in fact, it is hardly ever possible—to identify even the specific pieces of work done by the security services in foiling various crimes or bomb plots, but the fact is that they have done extremely good work on that basis. That is why I quoted the figure of 330 people going through our courts and being convicted since 2001. If we asked people what number they would expect that to be, I think they would come up with something much, much lower. The figure points to the scale of the threat and therefore to the need to maintain a very strong security presence.

[Philip Davies (Shipley) (Con)]

Further to the question from my right hon. Friend the Member for Wokingham (Mr Redwood), will the Prime Minister tell us how much the EU’s renewable energy target has added to UK consumers’ energy bills already and how much it is likely to continue to add in the future? Will the EU get rid of this ridiculous target and does my right hon. Friend agree that the Energy Secretary who signed up to that directive, the current Leader of the Opposition, has a brass neck to claim to be the champion of low energy prices?

[The Prime Minister]

I will not be able entirely to satisfy my hon. Friend, which is always a difficult job. There is no doubt that green levies and charges add to consumer bills—the figure is over £100 and rising. I would argue that it is necessary to help some renewable technologies to get going, but the moment we can remove those levies is the moment that we should remove them. One of this Government’s first acts was to remove the £179 levy placed on every single bill by the renewable heat initiative, which was put in place by none other than the Leader of the Opposition.

[Pete Wishart (Perth and North Perthshire) (SNP)]

The Scottish people are of course pleased and delighted that the Prime Minister has found time to engage in debate with European leaders, but we are still wondering why he has been such a big fearty in refusing to debate with Alex Salmond, the First Minister of Scotland.

[The Prime Minister]

This is such an old chestnut that I could almost put the answer to music. The fact is that the debate about Scotland’s future in the United Kingdom is not a debate between the leader of the Scottish National party and the leader of the Conservative party. It is not even a debate between the Scottish First Minister and the British Prime Minister. It is a debate between two groups of people in Scotland: people such as the hon. Gentleman, who want to break up the successful partnership of the United Kingdom and put all that at risk, and people in Scotland who very sensibly want to stay part of the United Kingdom. Because the SNP is not winning the argument, it is looking for some distraction therapy; well, I am not going to fall for it.

[Sarah Newton (Truro and Falmouth) (Con)]

We are a nation of garden-loving, nature-loving people. Will my right hon. Friend consider carefully the real concerns expressed by the Royal Horticultural Society about the unnecessary and costly proposed EU regulations on seeds and plants that would do so much harm to businesses and gardeners the length and breadth of our country?

[The Prime Minister]

I try to keep up with all EU legislation, but I am afraid that that one has passed me by, which I am particularly sad about because I am very proud of my vegetable patch and of the investment that I make in seeds every year, even though it does not always pay off in the form of good results. I will look carefully at the issue that my hon. Friend has raised.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Having gone some way towards reforming parliamentary scrutiny of the intelligence services through the Intelligence and Security Committee, does the Prime Minister think that it is now time for some parliamentary scrutiny of the intelligence commissioners?

[The Prime Minister]

We have just done a major piece of work to see how best we can strengthen the ISC, and put those proposals in front of the House. I think we should let those settle down before we consider other changes.

[David Rutley (Macclesfield) (Con)]

I welcome the Prime Minister’s statement and, particularly, the recommendations of his business taskforce. It is good to hear that those recommendations were endorsed by more than 100 businesses in the EU. Will he tell the House what further steps will be taken to engage yet more businesses across the EU to ensure that we make even faster progress on this vital agenda?

[The Prime Minister]

My hon. Friend raises an important point. There is a good dialogue in this country between business and the Government on the cost of regulation and the things that need to change. I am not sure that that debate takes place in the other European countries, so I have asked the authors of the excellent report—who include a number of very senior business leaders in Britain—and Ministers to do a tour of European capitals to try to get European business leaders and European alternatives to the CBI together and to encourage them to lobby their Governments, so that we can really get the issues of deregulation and cost reduction hard-wired throughout the European system.

[Mr William Bain (Glasgow North East) (Lab)]

Does the Prime Minister agree with the assessment that a successful transatlantic trade and investment partnership would increase our exports to the United States by as much as three fifths, and be worth as much as £10 billion a year to our economy? Does he also acknowledge that the only way to achieve those benefits is to make the case for being part of the European Union, instead of appeasing those who want us out of it?

[The Prime Minister]

I agree with the hon. Gentleman in that I think an EU-US trade deal can add to the economies of the EU and the US. Britain is particularly well placed to benefit because these complex trade deals now help quite a lot with trade in services, where we have real expertise and a real comparative advantage. I do not agree with him, however, in that I do not think that we will secure Britain’s place in a reformed European Union if we just stick our head in the sand and pretend that there is not a real question mark hanging over our membership. The fact is that consent for our membership is wafer thin, and we need to change Europe and then have a referendum so that we can rebuild it.

[Mr Peter Bone (Wellingborough) (Con)]

The Prime Minister is leading Europe in the efforts to end modern-day slavery. However, there are two countries in Europe that are in denial that it even exists. Did he have a chance to talk to the German Chancellor and the French President about this? If not, could he call them on their mobile phones, so that the Americans can find out about it too?

[The Prime Minister]

As I mentioned in the statement, the issues of trafficking and slavery were mentioned briefly at the Council. Britain is doing a good job in leading the way not only in applying the relevant European rules but in going above and beyond them to wipe out modern-day slavery here in the UK. That will put us in a stronger position to be able to turn round to other countries and say, “Look, this can be done in a way that does not add massively to costs but that is absolutely right for our countries.” I am very happy to have those conversations.

[Nia Griffith (Llanelli) (Lab)]

US protectionism has long been detrimental to some poorer countries that are trying to sell certain products. What pressure can the Prime Minister bring to bear on the US-EU trade treaty negotiations to ensure a better deal for some of the poorest countries in the world?

[The Prime Minister]

The hon. Lady raises an important point. As part of these negotiations, we should push for what we have here in the EU—basically, duty-free and quota-free access for the poorest countries in the world. That has worked well, has not cost European jobs, and has created wealth in other parts of the world. We should encourage other countries to do the same thing.

[Margot James (Stourbridge) (Con)]

Between the end of 2011 and the middle of 2013, exports from the west midlands grew by 30%—almost twice the rate of the next strongest regional performer. Does my right hon. Friend agree that the EU-Canada trade deal and the progress he has made in cutting EU red tape from the digital economy will provide a further boost to exporters in the west midlands and across the entire country?

[The Prime Minister]

I would certainly commend exporters in the west midlands. This morning, I met apprentices from across the country, and a number of them were from Jaguar Land Rover, which has seen staggering growth in its business. We need that to happen across the board—not just in manufacturing, but in the digital economy. That is what these changes are all about.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I refer to the answer given to my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) on banking union. The Prime Minister said in his statement that he would be defending Britain’s interests if he ensured greater integration and co-ordination in the eurozone. The stability of the eurozone is in our interest, but is he not worried by the lack of progress and about the signals coming out of the eurozone that progress will be much more difficult and much slower. Is it not in our interests to be concerned about that and to do whatever we can to ensure that it is carried through at the earliest opportunity?

[The Prime Minister]

The hon. Gentleman is absolutely right: it is in our interest to have a working and stable single currency on our doorstep, and that will require a banking union, just as we effectively have a banking union and single currency in the United Kingdom. Some progress has been made. In terms of our efforts, the most important thing for us is to make sure that, as that goes ahead in the eurozone, we are not left out in respect of the regulations that affect the single market. Financial services is, of course, a vital business not just for the City of London, but for the cities of Belfast, Glasgow, Birmingham and the like. It is there that we should focus our negotiating effort to make sure that we have real safeguards in how those regulations are written.

[Guy Opperman (Hexham) (Con)]

The north-east of England has a positive balance of payments. Did the Prime Minister have the chance to point out in respect of trade and employment that general unemployment in the north-east has fallen by 18% and youth unemployment by 24% over the last 18 months—due, I suggest, to the policies of this Government?

[The Prime Minister]

I thank my hon. Friend for standing up for the north-east. I had a good meeting in Brussels with Martin Callanan, the leader of Britain’s MEPs, who strongly represents the north-east in the European Parliament. We are seeing better employment figures and falls in unemployment in parts of the country, but we have more work to do to make sure that the recovery is spread right around the country.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Which approach to EU relations does my right hon. Friend think will deliver the best outcome for Britain —more regulations, surrendering our rebate, increasing the EU Budget and signing up to the EU bail-out mechanism, or reducing regulation, defending our rebate, cutting regulation and getting out of the bail-out?

[The Prime Minister]

I absolutely agree with my hon. Friend. Taking a tough approach on issues such as deregulation, the bail-out and the EU budget can be done at the same time as winning friends and allies in these important negotiations. What was interesting about this European Council was that, on the traditionally British issue of deregulation, we had the support of the French, the Finns, the Swedes and the Italians. We thus had people on the centre, the centre-right and—in the case of the Italian Prime Minister—the centre-left of politics, agreeing with us.

[Chris Heaton-Harris (Daventry) (Con)]

I welcome the statement, and, indeed, a report on cutting red tape published by the business taskforce, which estimated that if we opened EU markets in the digital economy alone, we could add 4% to Europe’s GDP. Did the other European leaders around the Council table agree with the Prime Minister about the level of excess regulation, are the effects of such regulation being felt throughout Europe, and does the Prime Minister agree that the Commission should spend less time consolidating EU legislation and more time repealing it?

[The Prime Minister]

I do agree with my hon. Friend about that. However, to be fair to the Commission, I must tell the House that it has changed its stance in recent years, and is leading some of the efforts to cut the number and costs of regulations in Europe. That is extremely important, but we need to keep up the pressure at national level as well.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Did my right hon. Friend have a chance to discuss Europe’s competitiveness vis-à-vis the rest of the world, particularly in view of the sensible measures taken by the Irish Republic to ensure that it will be out of the bail-out mechanisms in December?

[The Prime Minister]

One of the reasons for pushing the deregulation agenda is the need to keep pointing out that Europe will be in danger if we go on adding to our regulatory costs while other parts of the world are becoming more competitive. This is not, as the Leader of the Opposition says, a race to the bottom. It is a recognition that we want highly skilled, high-end, high-network jobs to enable us to compete with the Chinese, the Indians and the Malaysians. We in Europe must play to our strengths in areas such as the digital single market. We have a market of 400 million people, but unless that market works properly, we shall not benefit.

[Mr Robin Walker (Worcester) (Con)]

As a key trading partner and long-standing ally of our Commonwealth partners in Canada, the United Kingdom is particularly well placed to benefit from the £1.3 billion free trade agreement. May I urge the Prime Minister not just to press on with the broader transatlantic free trade agreement, but to ensure that other Commonwealth countries appear high on the list of the EU’s free-trade partners?

[The Prime Minister]

I can certainly give that assurance. We have pushed for all the EU free trade agreements that have taken place in recent years, such as the agreements with Singapore and Korea, but I think that we have many more opportunities to move further and faster. We must recognise that we are operating in a competitive world. As the New Zealand Prime Minister said to me recently, there is only a certain amount of capacity in that Government to do free trade deals. We must ensure that what we are offering is attractive.

[Michael Ellis (Northampton North) (Con)]

I congratulate my right hon. Friend on the excellent work that he is doing in cutting red tape. It is clear from what has been said by businesses in my constituency that they were inundated with, and stifled by, more EU regulations and red tape under the past Government than they had ever been before. Does my right hon. Friend agree that not only is the Labour party responsible for more red tape than ever before, but it clearly loves red tape more than it loves the red flag?

[The Prime Minister]

I do not think that enough attention was paid to the problems of regulation and red tape, but I think that proper attention is being paid to them now. We are showing that it is possible to win allies in Europe, including the European Commission, and to ensure that red tape is cut.

[George Freeman (Mid Norfolk) (Con)]

I strongly welcome the Prime Minister’s leadership in regard to the small business deregulation and the business taskforce, and particularly welcome the delaying of the badly drafted EU data protection directive relating to e-commerce. The UK is plainly leading the way in the use of data transparency to drive the empowerment of citizens, taxpayers and consumers, and the creation of new markets. May I encourage my right hon. Friend to continue his strong resistance to the EU’s attempts to do for our data pioneers what it would have done for our currency?

[The Prime Minister]

My hon. Friend has made a good point. A single e-commerce market requires proper rules on data protection, but if those rules are much more onerous than what we have today, they will add to costs, destroy jobs and send those jobs elsewhere. That is why, although we are the biggest enthusiasts for the completion of the digital single market, we must get the directive right rather than just signing it through, as the Labour party would have done, without caring about the consequences.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

We have 4.9 million small and medium-sized businesses in our country. The number has risen by 400,000 since 2010. Did the Prime Minister have a chance to talk about those businesses and the regulatory burden that has been imposed on them?

[The Prime Minister]

My hon. Friend has made an important point. Given that 400,000 net new small businesses have been created since the Government came to power, we should be trying—at both European and UK level—to exclude micro-businesses altogether from some of these classes of regulation.

[Nick de Bois (Enfield North) (Con)]

Businesses throughout the country will welcome the Prime Minister’s drive to cut barriers to growth. Does he agree that one simple and effective way of doing just that would be to change the current public procurement thresholds in the EU, thus releasing more opportunities? Did he discuss such action, and will he continue to press for it?

[The Prime Minister]

We did not discuss public procurement on this occasion but it is worth looking at. One of the things that the Government are looking at domestically is whether we can get rid of a lot of these pre-qualification questionnaires to make it far easier for businesses to compete for Government contracts.

[Neil Carmichael (Stroud) (Con)]

I welcome the Prime Minister’s emphasis on deregulation and trade, but does he agree that more competition, more connectivity and more investment in technology, such as one can find in my constituency, would exert downward pressure on energy prices, not the state intervention proposed by the Opposition?

[The Prime Minister]

There is no doubt that a more competitive energy market both in the UK and in the EU would put downward pressure on prices. It is the same in every industry. If one sees a tendency towards monopolies and oligopolies, one tends to see higher prices, less competition and less choice for consumers. That is why we see eight new companies coming into the energy market. Is it not good that the Leader of the Opposition has followed my advice and switched to one of the small upstart businesses for his energy supply? The only problem he has is that the new business that is accepting his custom does not support his policy and thinks that it will be a disaster.

[Alun Cairns (Vale of Glamorgan) (Con)]

The reformed UK Trade & Investment is making a significant difference in helping British businesses to export at record levels, contributing to last week’s excellent growth figures. Does the Prime Minister agree that UKTI can now focus on a major new opportunity following the EU-Canada agreement?

[The Prime Minister]

My hon. Friend is right. UKTI now has more areas to look at around the world. It has excellent leadership from Stephen Green, the Trade Minister whom we hired from HSBC, and I am pleased that Ian Livingston, who until recently ran BT, will bring even more impetus to the vital work that UKTI and our trade bodies do around the world.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my right hon. Friend’s strong defence of our intelligence services. Does he agree that it is a great shame that the very modest measure that we enacted last year to protect them from wholly spurious civil actions did not receive full bi-partisan support?

[The Prime Minister]

My hon. Friend makes an important point. As I said, I think that we scrutinise our intelligence services in the correct way in this House. I am always happy to look at other suggestions but I do not at the moment think that there is anything else we need to do.

[Mr Philip Hollobone (Kettering) (Con)]

Did my right hon. Friend have the chance to ask the Prime Ministers of Romania and Bulgaria for their estimates of how many of their citizens are likely to head our way from 1 January? Given that the level of youth unemployment in this country remains stubbornly high, despite the tremendous progress in the economy, even at this late hour, will the Prime Minister consider enacting the emergency provisions buried deep in EU treaties to prevent the end of transitional controls on Romania and Bulgaria, which will send a firm signal to our EU partners that we are serious about renegotiation?

[The Prime Minister]

We have kept the transitional arrangements for as long as we possibly can. I do not believe that there are powers in the EU arrangements to extend them any further. As I said to 600 apprentices I spoke with this morning, the key to the issue is that, as well as having tough controls on immigration from outside the EU, we need to improve our education system so that young British people are capable of doing the jobs that our economy is clearly creating, and reform our welfare system so that it is not an option to live on benefits when one can work. Education and welfare are two things that can make the biggest difference to immigration and controls on immigration, which I know that everyone on this side of the House wants to see.

[Mr Marcus Jones (Nuneaton) (Con)]

On Friday, I met a number of small business people from across the west midlands. What message of support and reassurance can my right hon. Friend give those people in relation to regulation and red tape, following his excellent contribution to the EU summit?

[The Prime Minister]

First, I thank my hon. Friend’s constituents for the work that they do. Running a small business means taking a huge amount of risk and working extremely hard. They are the wealth creators of this country. They are likely to be the ones who create the most jobs in this country. Our job is to try to work out how we can make it easier for them to operate, to hire people and to grow. That is the challenge for the Government and it is one that we take on with relish.

Point of Order

Monday 28th October 2013 Commons Chamber

16:34

[Mr Peter Bone (Wellingborough) (Con)]

On a point of order, Mr Speaker. Is there anything you can do to increase attendance on the Opposition Benches when the Prime Minister has the courtesy to come to this House and make an important statement? At the end of it just five Labour Back Benchers were present, and the last 20 minutes were taken by Tory Members. What does that say to the public?

[Mr Speaker]

As the hon. Gentleman knows, I am not responsible for attendance or the factors that contribute to it. The hon. Gentleman’s inquiry was, I suspect—I say this non-pejoratively—a largely rhetorical inquiry, but he has satisfied his taste buds on the matter and his sentiments are on the record.

Local Audit and Accountability Bill [Lords]

Monday 28th October 2013 Commons Chamber

[Relevant documents: The First Report from the Communities and Local Government Committee, Session 2010-12, Proposed Code of Recommended Practice on Local Authority Publicity, HC 666, The Fourth Report from the Communities and Local Government Committee, Session 2010-12, Audit and inspection of local authorities, HC 763, and The First Report from the Draft Local Audit Bill ad hoc Committee, Session 2012-13, Draft Local Audit Bill: Pre-legislative Scrutiny, HC 696.]

Second Reading.

16:34

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

I beg to move, That the Bill be now read a Second time.

This Bill is a natural progression of the coalition Government’s programme for reform. It decentralises power away from quangos to local people, it saves taxpayers money by cutting waste and red tape, and it replaces top-down inspection with local accountability and transparency.

The Bill will do three things. First, it will abolish the residual Audit Commission. We have already abolished its interfering and ineffective inspection regimes, such as comprehensive area assessment. We have successfully outsourced its local audit contracts, building on the fact that a lot was already outsourced. This Bill provides for the primary legislation to finish the job. There is an obvious question to ask at the outset: if companies and charities can choose their own auditors, why should councils be any different?

The Audit Commission was born of good intentions, but in a different age. Local government has changed since the 1980s, in part due to the reforming legislation of that decade which helped stamp out corruption and jobs for the boys, but by the end of the century the Audit Commission was no longer the protector of the public purse under the new regime. It had become a top-down regulator of local government, micro-managing local services and imposing excessive and questionable red tape.

The Audit Commission was a creature of the centralised state, more interested in the views of “central Government stakeholders”—to use a dreadful phrase—than of local taxpayers. For example, it failed to act on the real problems of dysfunctional administration in Doncaster. It praised Corby council for its financial controls, missing wholly the Corby cube scandal. It was caught up in the Icelandic banking collapse, and then tried to shift the blame on to councils, while it had itself badly invested £10 million in Iceland. Meanwhile, councils, like my own in Brentwood, were marked down for having weekly rubbish collections because Millbank-based inspectors did not like them.

Research before the general election suggested that local government inspection and performance regimes added up to 40% to core council expenditure. Even the Department for Communities and Local Government’s own documents admitted that the performance management regime was “unbalanced”, with 80% focused on meeting top-down requirements.

Meanwhile, the Audit Commission itself wasted taxpayers’ money with a culture of excess. The Audit Commission hired lobbyists to stop the abolition of comprehensive area assessment, and indeed, to

“combat the activities of Eric Pickles.”

I have no idea how that ended. It splurged on corporate credit cards, including £770 for a lavish meal in an oyster bar for its board members to discuss better “corporate governance”. The commission subsequently lost the bill for its own dinner. It spent £53,000 on designer chairs for meeting rooms in 2010, with some costing as much as £900. The Audit Commission spent, in its latter time, far too much time sitting comfortably.

We have already shut down most of the Audit Commission. This Bill will close it down for good and introduce a new, localised audit regime, with estimates suggesting it could save £1.2 billion over the next 10 years —with councils saving the most. Local bodies will appoint their own auditors from an open and competitive market, with thousands more contracts up for grabs. There will be a significant opportunities for small firms to bid and expand their businesses. Local bodies will be able to choose their own auditors, join forces to appoint auditors together or establish a body to appoint auditors on their behalf. The key principle is that they can choose auditors in a way that best suits their needs.

[Mr John Redwood (Wokingham) (Con)]

Does the Secretary of State agree that what we want is an audit system that does not equate amounts of money with outcomes without proper testing of that? We seem to have an audit system that says, “This council spends twice as much as that council, so it must be twice as good.” We want to know what we get for the extra money.

[Mr Pickles]

My right hon. Friend makes a reasonable point. The audit regime is just part of the process of transparency; the publication of amounts above £500 and the right to be able to see what the council is doing increase the opportunity for the taxpayer, the voter and the local press to investigate.

[Robert Neill (Bromley and Chislehurst) (Con)]

I entirely agree with my right hon. Friend’s observation about the great opportunities we are giving to the council tax payer. Does he also agree that the perverse consequence of the previous system was that council policies were often skewed towards obtaining the result required to get approval by the Audit Commission, rather than towards the priorities that the council tax payers would have wished for?

[Mr Pickles]

My hon. Friend makes a reasonable point. There was a box-ticking culture, and local authorities were often spending an enormous amount of time on increasing their scoring as opposed to delivering decent services for local people.

Protection remains in place for whistleblowers and to prevent Enron-style conflicts of interest. We need to remember that the Westminster homes scandal was uncovered not by the Audit Commission, but by an outsourced auditor from Touche Ross. There is no reason why private sector auditors cannot be independent and fiercely robust. Reserve intervention powers will remain to tackle systemic failures such as those at Doncaster, working with the local government sector, but they are the exception that proves the rule. There will be a continuing role for both Members of Parliament and Ministers to use their public voice to challenge local government when bad decisions are made—that is called democracy.

The second provision in this Bill will protect the local press from unfair local competition. Where local newspapers thrive, local democracy thrives. Local newspapers not only inform residents of what is going on, but play a vital role in exposing local waste, mistakes and corruption, and, thus, in holding councils to account. When councils put out their own glossy free sheets to compete with local newspapers, local democracy is the loser. Tackling that abuse was a key pledge in not just the coalition agreement, but the general election manifestos of both parties.

In 2011, Parliament previously strengthened the local government publicity code, but a small number of councils have intentionally ignored it, with Tower Hamlets being a case in point. Ofcom has found it guilty of breaching broadcast rules for political advertising, but no power exists to tackle its political propaganda sheet, and local auditors have recently refused to intervene. Such actions are not just a misuse of public funds; they are, ultimately, harmful to local democracy and the independence of the free press. They are also further evidence of a worrying pattern of divisive community politics and mismanagement of council staff and resources by the mayoral administration. So provisions in the Bill will ensure that we will act when Parliament is ignored. Yes, this is central intervention, but it is being done to protect the free press and deal with the serious abuse of power. Even in a localist system, there is a role for central Government to set an ethical framework and maintain checks and balances on local government to prevent corruption. Without such backstops, there would be a siren voice for a return to top-down inspections or to set up a quango such as the Audit Commission.

The third and final provision in the Bill will close a legal loophole and ensure that all councils’ bills will be set so that they are fully accountable to local taxpayers. Some unelected bodies are setting a levy on council tax bills with little or no accountability for local voters—from waste disposal authorities and integrated transport authorities to crematorium boards. We will ensure that the direct democracy provisions in the Localism Act 2011 allow council tax referendums to apply also to that quango state.

The Bill has already been scrutinised in the Lords, where the Government listened to a range of views and made a number of minor amendments. Subject to the will of the House, we intend to make the Bill even stronger. We will modernise the archaic rules on parish polls, for example by allowing longer voting hours and postal votes. Perhaps our most significant proposal is to give people the right to film, blog or tweet at council meetings. Some councils would prefer meetings to be held behind closed doors, but the public has the right to see decisions being taken and how the money is spent.

A private Member’s Bill promoted by Mrs Thatcher introduced the right to attend council meetings back in 1960, and that in turn built on a law introduced by the Liberal Government of 1908, so this is truly a coalition of minds. It is right that we should now bring her legacy up to date for the digital age. We have previously amended secondary legislation to open up councils’ executive meetings and have encouraged councils to open up their full council and committees. Many have refused, however, citing health and safety, data protection or just standing orders. Tower Hamlets said that such a change would lead to “reputational damage”. Well, yes, it probably will when people see what is going on in their council chambers. There have even been cases of the police being called to threaten bloggers with arrest. We will therefore make the necessary changes to primary legislation to allow full councils and committees to be open as well.

Our argument is that the coalition Government are scrapping the top-down red tape of Whitehall inspection and micro-management. That will save taxpayers’ money and help to devolve power, but it must go hand in hand with local transparency and accountability. We must ensure an independent free press and scrutinise and challenge bad decisions by councils. Individual taxpayers and the new wave of citizen journalists must be let in to conduct their own scrutiny. We are localising audit and scrapping protection, while ensuring that there is protection against the bad old days of municipal corruption. In short, the Bill will deliver greater openness, stronger local democracy, accountability and significant savings for the taxpayer. I commend it to the House.

16:48

[Hilary Benn (Leeds Central) (Lab)]

The Bill might appear to some to be rather dry—[Hon. Members: “No!”] I am relieved to hear that.

As the Secretary of State has said, the Bill principally concerns how we ensure the probity, economy, efficiency and effectiveness of the spending of billions of pounds of public money. As we have heard, it might be said that the Bill, introduced by one of the late Baroness Thatcher’s great supporters, seeks both to extend, through greater transparency in council meetings—the subject of her private Member’s Bill, as the Secretary of State has reminded us—and to overturn, through the abolition of the Audit Commission, part of her political legacy. The Audit Commission was of course set up by the noble Lord Heseltine. As he explained in his autobiography—it is important to remember this:

“I thought it wrong in principle, as the 1976 Layfield Report had said, that councils should be able to appoint their own auditors. Awkward auditors do not get reappointed.”

That was his judgment.

Lord Heseltine’s creation did have achievements to its credit, although we did not hear them from the Secretary of State. It contributed to savings in local government and it developed value-for-money comparisons. I think I am right in saying that it was the Audit Commission that appointed John Magill under section 13 of the Local Government Finance Act 1982 to investigate Shirley Porter and the homes for votes scandal in Westminster.

[Mr Redwood]

On the point about the value-for-money component of the audit, I and a friend of mine, John Hatch, wrote that idea up and persuaded Conservative Ministers to introduce it. It did not come from the Audit Commission.

[Hilary Benn]

I shall come to the need to maintain a value-for-money focus in the work of the successor bodies for precisely the reasons that the noble Lord Heseltine set out, but I accept that the Audit Commission had its critics and in some respects it lost its way. The Opposition accept that there is no going back on its abolition—rather suddenly announced, to the surprise of many, by the Secretary of State in August 2010. Clearly, it is personal.

The fact that it has taken three years for the Bill to reach this House is a sign of the complexity of what has been removed and what has had to be created to replace it, and of an unfinished task. It took the dedicated probing of my noble Friends Lords McKenzie and Beecham—I pay tribute to them for their expert scrutiny in the other place—to draw out all the questions to which the Government still do not have answers, despite having had so long to think about them. I wish to acknowledge the helpfulness of the noble Baroness Hanham during consideration in the other place. She indicated the Government’s willingness to move on some of our areas of concern, but on one occasion she was famously reduced to saying that

“this matter is still under consideration, as are all the other matters.” —[Official Report, House of Lords, 15 July 2013; Vol. 747, c. 557.]

I shall now turn to these outstanding matters.

First, the Bill needs to provide for the joint procurement of audit for principal authorities, and we are told that this will be added in Committee. It must be, because significant savings can be made this way. The Government’s own impact assessment recognised that individual audit procurement was unlikely to match joint procurement when it came to producing lower fees. There is a limited market in public audit. In the last financial year 800 councils, health bodies and fire and rescue authorities were audited by private firms. How many auditors were appointed? Seven. We believe, and many others agree, that the intended savings may not appear at all—quite the contrary.

A central procurement system with the power of appointment could yield savings of up to £200 million over five years, according to the Audit Commission’s own analysis. I do not understand why the Government spent quite so long in the other place resisting what is a very sensible idea, and we look forward to seeing the promised amendment.

Secondly, there seems to be a marked lack of enthusiasm on the part of Ministers for the kind of comparative value-for-money studies that the commission has undertaken. We are not yet sure how the value-for-money profiles, which help to ensure best practice and are currently maintained by the commission, are to be managed in future and by whom. When he introduced the original legislation to create the Audit Commission, the then Secretary of State, Lord Heseltine, said:

“Audit involvement in value-for-money work is not new, but the Bill gives much greater emphasis to it. The commission will have a duty to undertake comparative studies . . . and the auditor will have a duty to satisfy himself that the authority has made proper arrangement for securing value for money.”—[Official Report, 18 January 1982; Vol. 16, c. 52.]

This Bill puts less emphasis on it. Only a residual role is being given to the National Audit Office. Is that really the right thing for Ministers to do, given the pressures that councils face today, and the changes they are having to make to the way they work? Surely, this is a time when value-for-money studies—learning from others—are even more important than they were.

[George Hollingbery (Meon Valley) (Con)]

The right hon. Gentleman will know that the Bill enables the National Audit Office to provide value-for-money studies, but because he is well informed about local government matters, he will also know that the Local Government Association has expressed considerable enthusiasm for conducting these reviews itself. Is it not better that local government finds what it needs to make value-for-money judgments on, and starts those reviews itself?

[Hilary Benn]

I entirely accept the hon. Gentleman’s point. It seems to me that there is a case for both. Having read the deliberations in the other place, I am just reflecting that Ministers there really lacked enthusiasm for the continuation of central value-for-money work, but I take his point about local authorities coming together to learn from each other.

Thirdly, the Bill as drafted requires the appointment of new auditor panels. The health bodies, as we know, will have panels based on their existing audit committees. On the one hand, the ad hoc Committee that scrutinised the draft Bill described that as an added layer of governance and made a case for strengthened audit committees in order to meet the independence requirements of best practice. On the other hand, the contrary argument has been made that there would be difficulties in asking audit committees to do the work of the panels, not least because in many local authorities the audit committees have a much wider range of responsibilities. Perhaps when he replies, the Minister will explain how he sees audit panels working as sub-committees of audit committees.

Fourthly, on freedom of information, the Bill will weaken the public’s right to know. The Audit Commission is covered by the Freedom of Information Act, but, generally speaking, private auditors are not, so transparency, which the Secretary of State repeatedly tells us he supports, will be diminished. That is really important, especially as more councils are outsourcing work to private companies. We all remember the Government’s recent unhappy experience with the tagging contract scandal. Given that the Government’s view on applying the Act and the arguments they advanced in the other place have changed over time, it would be helpful if the Minister indicated whether there is any chance that their view might change again.

[George Hollingbery]

I am grateful to the right hon. Gentleman for being so generous in giving way. Is it not the case that clauses 21 and 22, when combined with clauses 24 and 25, mean that freedom of information requests are completely superfluous? Clauses 21 and 22 allow the auditor to request any and all documents not only from the council but from connected parties, and clauses 24 and 25 make that information available to the public, so why would one need an FOI request?

[Hilary Benn]

I do not accept the argument that the Freedom of Information Act is superfluous, because it depends on whether auditors seek the information in the first place. I think that, regardless of the action that auditors might or might not take, the public should be protected by having the right to request the information. That point was made extremely forcefully and eloquently by my noble Friend Lord Wills in the other place.

There are some other concerns. We need clarity on who will maintain the outsourced contracts when the Audit Commission finally disappears. What about certification relating to reimbursement of housing benefit claims? We welcome the movement of the national fraud initiative to the Cabinet Office, but the provisions on the purposes for which data matching can be used do not include the prevention and detection of maladministration and error, which we would like to be reflected.

That is what is in the Bill, but there is a great big hole in it. It is principally a backward-looking piece of legislation giving effect to the Secretary of State’s decision of three years ago. He has completely failed to make provision for auditing in the new world being built before our very eyes, which I think is an astonishing omission. The proposed audit arrangements simply do not provide for that changing world in which public services are managed and provided. We have shared services, community budgets, city deals and combined authorities, which are all part of a shift towards much stronger working between central and local government, yet the current and proposed audit arrangements still focus much too narrowly on institutions—the arrangements in the Bill for local government and the National Audit Office for Whitehall—rather than the work they do. Therefore, as community budgets develop, does it really make sense for different auditors to examine the use of the local government pound while the NAO examines the use of the Whitehall pound when they are being spent together? If the service is shared and common, so should the audit be. I hope that Ministers will reflect on that point.

Robust independent audit of public bodies is essential to ensuring public confidence in Government. It is up to us to ensure that we get it right, especially after the three years that have intervened, followed by a Bill that—I gently point out—took longer to gestate than a baby African elephant.

I turn now to clause 38. Let me say at the outset that one local authority publication, which the Secretary of State mentioned, is pretty clearly outside the letter and the spirit of the code—that is, East End Life, which is weekly, advertises property, and carries local news. The Labour leader in Tower Hamlets says that it is an expense that residents cannot afford. The question for the House is therefore a simple one: why has the Secretary of State not done anything about it already? Why has he not sought judicial review? It is no good his shaking his head—he could have taken action, given the fuss he is making, but he has chosen not to do so, and he gives no answer.

[Robert Neill]

On precisely what grounds does the right hon. Gentleman think that judicial review could take place, since non-compliance with the code has no sanction attached to it?

[Hilary Benn]

It would be a very important legal argument as to whether the courts would attach weight to what is a code. If the Secretary of State is that worried about East End Life, why did he not take action before coming to this House to ask for clause 38 and the extraordinary powers it contains?

The Secretary of State is asking the House to give him the right, if he feels like it, to control local council publications. We have recently had a great deal of debate about the royal charter following the Leveson report. [Interruption.] The Secretary of State is chuntering, but there is a lot more to say about this clause. The charge has been levied, quite wrongly, that politicians are trying to control what appears in the press, yet this clause really would give a politician the power to control, if he wanted to, what is written, how often, and in what way. This shows that underneath a lot of localist rhetoric, the right hon. Gentleman is nothing more than a centralist. I am astonished that Liberal Democrats appear to be happy to go along with a thoroughly illiberal proposal.

The clause would allow the Secretary of State to issue an order directing that one authority, or every authority, comply with his interpretation of one or all of the provisions of the code. I remind the House that the code covers paid advertising, leaflet campaigns, publication of free newspapers and news sheets, the maintenance of websites, the frequency of publications, the content of publications, and even display stands at party political conferences. Clause 38(1)—the first time I read this I could not really believe it—says the following—[Interruption.] I know that Government Members do not want to hear it. Perhaps the right hon. Gentleman could explain why he wants to be given this power:

“The Secretary of State may give a direction to an authority whether or not the Secretary of State thinks that the authority is complying with the code to which it relates.”

Roughly translated, he wants the power to give direction to a council even though he does not think that it is not complying with the code, and nor does anyone else. We are sometimes mystified by the way his mind works, but under this Bill he will not even have to answer to himself for his own thoughts and actions.

That prompts the question why the Secretary of State has put this measure forward. He advanced two arguments, the first of which is about competition with local newspapers. I agree that local newspapers are a very important part of our democracy. Their independent reporting holds us to account, and they give us important news and information about what is happening in our area. However, many local newspapers are in real difficulties as readership declines and people get more of their news from the electronic media. Sir Merrick Cockell, the highly respected Conservative leader of the Local Government Association, says:

“We’ve simply not been shown any evidence that council publications compete unfairly with local newspapers.”

Such evidence as we do have suggests that the amount of advertising revenue taken by council publications is relatively small, especially compared with the amount of revenue contributed to local newspapers by way of statutory notices.

It is therefore very curious that, despite great play being made in the Secretary of State’s speech and in all the consultation documents of unfair competition and the loss of advertising revenue, it was reported a little while ago that he had indicated to a private meeting of Conservative councillors at the LGA conference that the requirement to place statutory notices in local newspapers is going to be phased out within a couple of years. I would be happy to give way to the right hon. Gentleman if he would like to clarify the Government’s position on the future of statutory notices. The House will have noticed that he has nothing to say. That is because on the one hand he is arguing that council magazines and the advertising revenue they take are a terrible threat, while on the other hand it seems, as reported by Conservative councillors who were at the meeting, that he is thinking of withdrawing a much larger amount of money that papers get from local councils in the form of statutory notices. The truth is that his position is utterly inconsistent.

[George Hollingbery]

I am grateful to the right hon. Gentleman for giving way; he is truly being generous with his time. Is he able to give any particular reason why local papers could not report statutory notices as a news item rather than as something that they are paid to do? Does he think it is right that the public purse subsidises commercial organisations like local newspapers when they have plenty of other opportunities to make money?

[Hilary Benn]

The hon. Gentleman makes a perfectly fair point, partly because of the changing way in which people are getting their news. He is right that there is nothing to prevent papers from publishing those notices anyway, and I think that everybody recognises that we are moving towards a different era. The point I am making is that the Secretary of State has jumped up and down to complain about advertising revenue, which is very small compared with the much larger revenue that comes from statutory notices, hence the inconsistency of his argument.

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

Should the main concern not be the best use of council resources? Is it really a good use of those resources if they are paying for statutory advertisements that most people manage to miss?

[Hilary Benn]

That is a fair point, as I have said, but perhaps the hon. Lady should have a conversation with the Secretary of State about what his policy is, because we are none the wiser. Indeed, when the code of practice was originally published, the Government specifically rejected a prohibition on authorities taking third-party advertising in their magazines. That is what paragraph 8.25 of the explanatory memorandum had to say.

[Ian Mearns (Gateshead) (Lab)]

Does my right hon. Friend agree that, while an awful lot of people may miss statutory notices, some organisations—like estate agents, property agents and anybody involved in the licensing trade—trawl through the papers deliberately looking for them?

[Hilary Benn]

I accept my hon. Friend’s point. If the system is changed in the future, as long as people knew where they should look, they could trawl through council websites or other publications.

On the frequency of publication, the vast majority of councils that produce magazines publish them four times a year or less. A very small number publish more frequently, but does that constitute justification for the power in clause 38? Does it actually matter if a small parish council puts out an A4 newsletter once or even twice a month? What business is it of the Secretary of State anyway? Has he not got more pressing things to do?

The second argument we have heard is that Ministers are exercised by propaganda on the rates. The Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis), has talked about a

“corrosive abuse of taxpayers’ money.”—[Official Report, 14 February 2013; Vol. 558, c. 840W.]

The Secretary of State has talked about pocket Pravdas, town hall Pravdas and shutting down the Pravda printing presses. Members will detect a bit of a theme there, so I thought I had better have a look. I spent a little time reading through council publications, copies of which I have with me.

Given what Ministers have said, I was expecting to find a hotbed of raw, red propaganda and party politics, but I have to say that I was sorely disappointed. There was not a single proclamation from local authority supreme Soviets, no diktats from executive board commissars and—this was especially disappointing—not a single article on the latest tractor production figures. There was nothing on collective farms. The nearest I got to that was an article about a community garden where “residents developed plots”. Is that the sort of dangerous, collectivist revolutionary activity—plotting in the garden—that keeps Ministers awake at night? Actually, the piece is from an excellent publication, South Kesteven Today—the local magazine of the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles)—and is about a community garden in Stamford.

I continued my search for the cause of all this anxiety. I had a look at Bradford’s Community Pride. The Under-Secretary of State for Communities and Local Government, the hon. Member for Keighley (Kris Hopkins), who has responsibility for housing, has left the Chamber, but the magazine had an article on deadlines for primary school applications and an explanation of council tax. Is that a problem?

I had a look at the Epping Forest magazine, Forester, which had an article about parking charges. We know how that subject gets the Secretary of State going, but it is also a very good publication. And what has Luton done? What has Luton done?

[Mr Pickles]

Just tell us.

[Hilary Benn]

The Secretary of State obviously forgets that he criticised Luton for its publication. I have the latest edition of Luton Line. It is a very good publication. On the front page is a photograph of the former Transport Minister, the hon. Member for Lewes (Norman Baker), holding a spade and standing next to the Labour leader of the council—now that is a coalition to reckon with. They are celebrating work starting on a new relief road.

These publications contain articles about recycling, articles on health, pleas for foster parents, adverts for MPs’ surgeries, and lists of councillors. Pocket Pravdas? What a load of nonsense.

Moving from the fanciful to the serious, the LGA has taken independent legal advice on clause 38, and Sir Merrick Cockell says that it

“confirms our fears that a government could hand power to one individual in Whitehall to restrict councils from campaigning on important issues such as HS2 or hospital closures if they so wish.”

[Roberta Blackman-Woods (City of Durham) (Lab)]

He doesn’t know his own Bill.

[Hilary Benn]

No, the Secretary of State does not know his own Bill and he does not want to hear what his Conservative colleague, Sir Merrick Cockell, has to say about it.

Members should remember what the code says. Paragraph 15 states that local authorities should

“avoid anything likely to be perceived by readers as…being a commentary on contentious areas of public policy.”

High Speed 2 is contentious, as are hospital closures, the removal of fire engines, and whether Heathrow should expand. Is the Secretary of State really saying that there is something wrong with local councils representing the views of their residents? Sir Merrick’s conclusion is that clause 38 “sets a dangerous precedent”. I could not agree more.

The National Union of Journalists says:

“There is no evidence that extra statutory powers are required”.

The National Association of Local Councils opposes clause 38. Birmingham city council said in its response:

“we do not accept the government’s starting point.”

Exactly!

[Mr Redwood]

We all understand that it can be desirable for councils to run political campaigns and that it will certainly happen. Is not the point that they can do so in the usual way—by making speeches in the council chamber, talking to journalists, getting it in the local media and putting it on free websites—but not through paid-for propaganda?

[Hilary Benn]

Let us take the case of High Speed 2 and the concerns that have been expressed by some of the right hon. Gentleman’s colleagues about the route. Is he saying that local councils should not be able, on behalf of their residents, to express a view, to make representations and to say that they want the route to be changed? If he is not saying that, I do not see how he can support clause 38, given the advice that the LGA has taken.

[Mr Redwood]

Will the right hon. Gentleman give way?

[Hilary Benn]

No, I have been very generous in giving way.

The great localist is, in this Bill, asking to be given a great big blue pencil so that he can cross out things that he does not like.

[Mr Pickles]

Nonsense!

[Hilary Benn]

The right hon. Gentleman shakes his head and says that it is nonsense, but he is undone by his own words. He has obviously forgotten what he said in the response to the consultation, in which ministers justified the new powers by saying that they would

“ensure that in future effective action can be taken should any council be considering publicity that is of a political or tendentious character.”

The only way in which that can be interpreted is that the Secretary of State is seeking to take a pre-emptive power of censorship. What did he mean by that and how on earth will it work?

Last year, the Secretary of State told the Conservative party conference that

“without constant vigilance—the cigar-chomping Commies will take over.”

What none of us realised then was that the person we needed to worry about was him. Clause 38 is wrong in principle and I cannot see how it will work in practice. We will seek to remove it in Committee.

I turn now to clause 39 and the new matters that the Secretary of State wants to include in the Bill. In responding to the debate, will the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth, explain why he is reneging on the deals that his Government signed by making the provision on referendums and levying bodies retrospective?

The Secretary of State well knows that an important element of the Leeds city region deal was the establishment of a significant transport investment fund, partly funded by central Government and partly funded by the transport authority levy over 20 years. A year ago, the former cities Minister, the right hon. Member for Tunbridge Wells (Greg Clark), said that the deal was:

“Giving cities the powers, control over resources, and funding they need to fire on all cylinders”.

Will the Secretary of State explain why, almost a year after his ministerial colleague put pen to paper to sign the deal, he is asking the House to undermine it? Will he set out his assessment of the impact of his decision, and say what effect it will have on holding back investment in transport infrastructure and local growth in the city region? This is an important point of principle, because I fear that the actions of the Secretary of State in imposing the rules retrospectively and going back on a done deal will undermine confidence in the city deal process—which I support—and harm the certainty on which sound financial planning and private investment rely.

To limit the damage of his decision, will the Secretary of State clarify for the record that at the time the city deal was signed, he had no plans, and had had no discussions, about changing the rules on levying authorities? The answer to that must be no, because if he had done so he would—of course—have been honour-bound to disclose that to the people with whom he was negotiating.

[Mr Pickles]

rose—

[Hilary Benn]

I will give way so that the Secretary of State can clarify that point.

[Mr Pickles]

It is important to address this rather silly suggestion. From the published plans and what we know, the extra levy does not make a single percentage share difference. We know what the city deal is for Leeds—it is perhaps the most ambitious of the lot. Even assuming that we have the same referendum threshold as in the past, the proposal comes nowhere near to going over that threshold.

[Hilary Benn]

First, that is not the view held by the Leeds city region, and secondly, the House will have noticed that the Secretary of State did not answer the specific question I put to him about what he knew when he signed the deal.

The Secretary of State proposes to make other changes by widening the scope of the Bill, and there have been discussions about how we deal with the problem of the Leeds city region and the fact that York cannot be a full member of the combined authority because of what is known as the Selby corridor—it is not coterminous. Perhaps he will respond to that point. I am grateful for the indication I have received from Ministers that they are willing to deal with that issue—in the Bill if they can, and if not through other legislation—and it would be helpful if the Secretary of State could place that on the record.

[Mr Pickles]

I am happy to say that what the right hon. Gentleman wants to achieve—to ensure that authorities can work together as part of a deal, even though they are not coterminous—is eminently reasonable. Whether we achieve that through the Bill or through other mechanisms, we are happy to enter into discussions about that, and I am confident we can have a resolution before Christmas. What he seeks is wholly reasonable, wholly sensible, and we will do our best to achieve it.

[Hilary Benn]

I am genuinely grateful to the Secretary of State for that assurance, and I look forward to working with him to bring that change about.

On parish polls, it is clearly not sensible to allow 10 people, in some cases, to trigger a referendum in a parish that represents 10,000, 20,000 or an even larger number of people. We will therefore support that change, and also the proposal that councils in England should allow the recording and videoing of council and committee meetings. In this day and age, big changes in technology make recording and videoing readily possible, and I cannot see the difference between sitting in a meeting, listening and writing down what is being said, or—for those who have shorthand—taking a verbatim record, and making one’s own recording.

As the Secretary of State acknowledged, a new generation of bloggers is relating to politics in a different way, which we should all warmly welcome—frankly, the more people who get to hear what their local council is doing, the better. Who knows? Perhaps this House will one day follow suit and allow those watching us to keep their own records of proceedings—indeed, I may one day be tempted to record the Secretary of State from across the Dispatch Box. I have, however, a sneaking suspicion that Brass Crosby—who, as some Members will know, was committed to the Tower of London in the 1770s for daring as Lord Mayor to release a newspaper editor who had had the audacity to report what was happening in Parliament—and indeed Thomas Hansard, after whom the Official Report is named, would both thoroughly approve of that change.

In conclusion, there is a great deal for the Committee to discuss, and I know that my hon. Friend the Member for Corby (Andy Sawford) will do a sterling job leading for the Opposition and responding to the debate. We owe it to ourselves, local authorities and the people that we—and they—represent, to get the right system in place, and it is clear there is still much to do.

17:19

[Robert Neill (Bromley and Chislehurst) (Con)]

I was delighted to hear my right hon. Friend the Secretary of State finish an important piece of work to which we committed ourselves when we first came into government. I was intrigued to listen to the right hon. Member for Leeds Central (Hilary Benn), the shadow Secretary of State. It was a curate’s egg performance. I grant that there were some near rib-tickling moments—some of which were probably not intended—but it was a classic case of an Opposition searching for something to oppose. My right hon. Friend has introduced and delivered a Bill that the Government said at the very beginning of the coalition we would introduce. I am delighted that it has come to fruition.

Let me deal with the various parts of the Bill. I was fascinated to see some of the Audit Commission’s expenditure when I was part of the Opposition Front-Bench team. In the climate of the 1980s, there was an argument for considering a body such as the Audit Commission. However, two things happened: the Labour Government caused massive mission creep in the Audit Commission, and the climate changed. What caused the massive mission creep? Effectively, the Audit Commission was used as the machine for imposing a centralised performance regime on local government. That was a distinctly and fundamentally un-localist thing to do.

The situation is well described by Professor George Jones of the London School of Economics, whom many hon. Members will know—he is the biographer of Herbert Morrison. Professor Jones would not regard himself as a natural admirer and advocate of the coalition Government’s policies, but he believes in local independence. I disagree with many of the things he says, but he has described the Labour Government as taking “a fateful decision” that

“turned the Audit Commission in effect into an agent of central government…[It] marked the end of its independence, which was confirmed as further tasks required by central government were placed on the Commission: inspecting local authorities’ performance, judging and scoring them.”

Professor Jones is one of the leading independent academics. Most people would say he has a left-of-centre viewpoint—he happens not to be a member of any political party—but that significant academic is condemning the actions of a Government of whom the right hon. Member for Leeds Central was a member. It is therefore a bit rich of him to accuse the Secretary of State of back-door localism. Anyone who knows my right hon. Friend and the history will know that that is nonsense.

The Audit Commission grew beyond its remit to such an extent that it became the elephant in the room in a great deal of local government budgeting. Increasingly, time and again, local authorities—officers and members—felt themselves to be more constrained. They felt they had to play the system and adopt policies and priorities that ticked the box of Audit Commission approval. The system of reward and funding was such that they were incentivised to tick the box to meet central Government objectives rather than those of their council tax payers.

That was initially swept away when the coalition Government got rid of the iniquitous comprehensive area assessments regime, which, at that time, was a huge amount of the Audit Commission’s work. Essentially, the core audit function was left. As I recall, by that stage, the Audit Commission was about the fourth largest audit practice in the country. There was no logical reason why such a large audit practice should not operate in a commercial environment, providing that a proper statutory regime was in place to overarch it and that there was a proper regulation and performance regime, which the Bill introduces.

We saw that when the in-house audit practice was successfully floated in the private sector. It is worth noting that, as a consequence, there has been a 40% reduction in audit fees paid by local authorities. By the time the Bill is implemented and the Audit Commission is finally abolished, there will be a 50% reduction in those bills. That has got to be a good and thoroughly localist thing. Those of us experienced in local government will remember regular complaints about the level of charging by the Audit Commission. There was also the iniquitous situation of its top-slicing, whether it did the job in-house or it was done through private sector contractors, which was clearly unjustifiable. I hope people accept that the Bill recognises a sensible reality.

I have to say with a smile that I note the cost of trying to persuade the Opposition Front Bench team to change our minds was put at £56,000. They were getting my right hon. Friend the Secretary of State and I cheaply at that price. On the other hand, it did not have much effect, so perhaps they were had in any event. I assume that £50,000 was for my right hon. Friend and £6,000 was for me—I am fully aware of the status of these things—but it says something of the level of unreality in the Audit Commission. In the end, that is why it had so few friends in local government and why its departure will be unlamented. Instead, we have a sensible set of checks and balances which need to be put in place, and which I think the local government sector now understands.

It is also worth saying that performance management and improvement in the sector has matured—a point made in interventions on the right hon. Member for Leeds Central. There is a great willingness to collaborate and work closely together; that is a classic case of recognising that the game has moved on.

The Bill seeks to tackle the code of practice on publicity, which is significant. I was the Minister when we introduced the code and there had been a number of egregious examples of abuse by local authorities. East End Life is of course the example most regularly cited, but I am afraid there are others.

[Hilary Benn]

It would certainly help consideration of the Bill on Second Reading if the hon. Gentleman listed those examples. Indeed, Baroness Hanham said that she had a list, but did not want to share it with Members in the other place. Perhaps the hon. Gentleman will now tell us which local authorities are breaking the code.

[Robert Neill]

The right hon. Gentleman obviously knows that the only roles in Gilbert and Sullivan I could do at school were the patter songs—one does not have to sing in tune. I do “have a little list” and will come to it in but a moment.

It is significant that East End Life, run now by an independent council but initiated at a time when the council was otherwise controlled, is one case on which the right hon. Gentleman and I can agree. We agree that that is a particularly bad case, but it goes further than that. Much of East End Life was based on some of the work done by The Londoner, which was produced by the first Mayor of London. By the end of his first term of office, he was a member of the right hon. Gentleman’s party. The current Mayor of London has had no difficulty in getting his case and his arguments across to the London public, and getting information about Greater London authority services across, without the cost of The Londoner. In fairness, even when Ken Livingstone was a member of the Labour party, he supported the current mayor of Tower Hamlets—against a Labour candidate. Perhaps I should not remind the right hon. Gentleman of that.

[Andrew Bridgen (North West Leicestershire) (Con)]

A constituent of mine is a member of an active parish council in my constituency. She raised concerns that the Bill seeks to curtail how parish councils can communicate regularly with their constituents. Does my hon. Friend agree that that would not be right?

[Robert Neill]

Many responsible local authorities communicate sensibly and proportionately with their constituents, and there is no reason why parish councils cannot do that too. There has been a great deal of scaremongering from some commentators and sources, some politically motivated, regarding the extent of the Bill. I am sure that my hon. Friend’s parish council has nothing to fear.

[Chris Williamson (Derby North) (Lab)]

Will the hon. Gentleman give way?

[Robert Neill]

I give way to my former shadow.

[Chris Williamson]

Might the current Mayor of London’s ability to get his message out and his not having to rely on a council newspaper have something to do with the fact that the Evening Standard is his chief cheerleader and ran a vituperative campaign against the previous incumbent, and might that have something to do with the previous incumbent’s inability to get his message out?

[Robert Neill]

Now that, like me, the hon. Gentleman has time to reflect from the Back Benches, he might consider that part of this problem was that he always fought the last battle. That one is dead and gone. The current Mayor gets his message across because he makes the right case to Londoners. I would think it a good thing if an independent newspaper supported my policies; it would be better than having to pay £1.5 million or £2 million to cook up a newspaper to support them instead. So I do not think he has advanced his case with that intervention.

For another example, the right hon. Member for Leeds Central could pop across to Greenwich from Tower Hamlets and have a look at the—taxpayer-funded, of course—Greenwich Time which has been published for several years now by the Labour-controlled council. In one recent editorial, the council leader attacked the Government’s policies of austerity for damaging the people of Greenwich. That is an interesting view which might have come straight from the pen of the shadow Chancellor—perhaps it did, for all I know—but I am not convinced that it is relevant to the role of the local authority.

Neither am I convinced that it is the role of that interesting Greenwich publication to tell me about the football fixtures or the cinema listings or to give me helpful restaurant reviews. It is the same with East End Life. These are all worthy things that a commercial local paper does, but to use the phrase of my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), it is not a sensible use of council resources. I am sure we all want leisure or weight-loss ideas, but it is not the job of these supposed newspapers—these council publications—to provide them. It is a deliberate move on to the turf of privately run, independent newspapers. I say “deliberate” because in some cases, I regret to say, local authorities do not like the competition and criticism. That is what this is about.

Moving away from Greenwich, the right hon. Member for Leeds Central could cross the river again to Newham, where The Newham Mag makes great play of the “savage cuts”—an interesting phrase that I am sure the ever-restrained mayor of Newham had nothing to do with—imposed by the Government. In one fascinating passage, it stated that some councils pulled the plug on their Christmas lights this year because of “savage cuts” in their funding from central Government. When we worked on the formula grant, my right hon. Friend the Secretary of State and I did not consider taking out local authorities’ Christmas light funding. It was a clever use of words to try to suggest that central Government were being Scrooge and making it impossible for people to have Christmas lights on their high street. The article did not mention, of course, that Newham council did not cut the publicity budget, which paid for The Newham Mag, and which even on a conservative estimate would run to about 10 sets of high street lights. Interestingly, even in otherwise legitimate advertising—about making benefit claims and where to go—every reference to cuts is prefaced with “savage” or “massive”. It is clearly politically loaded and another example of how councils are acting against the spirit of the code.

[Ian Mearns]

I am following the thread of the hon. Gentleman’s argument. Is he actually saying that the Gateshead Post, which used to be published every Wednesday, but met its demise more than a dozen years ago, was put out of business by a council publication that did not exist at the time it ceased printing?

[Robert Neill]

What I am saying is that the Gateshead Post was entitled to its view because it was not paid for by public money.

If the leader of Barking and Dagenham council or the mayor of Newham want to put across their views, they can put out a press release through their respective Labour party offices, just as I put my views across in press releases paid for by my constituency party. I do not believe that I should get the council tax payers in my area to pay for me to put out my political views. Such activities are happening consistently, however. The London borough of Barking and Dagenham’s News stated that the council had been forced to make cuts to services. The article related to the spending review, but the council made no reduction to the £1.5 million that it was spending on the News. Simply hiding behind East End Life might make the shadow Secretary of State appear reasonable, but there is a lot more to it than that. I regret to say that, as it happens, all the publications on my list are in Labour areas.

[Chris Williamson]

The hon. Gentleman has expressed his opposition to press releases being distributed by local authorities on behalf of the controlling group. When he was a Minister in the Department for Communities and Local Government, did his Department issue press releases on his behalf?

[Robert Neill]

Yes, but I did not use them to attack the policies of the Opposition in party political terms. I would not have been allowed to do so under the ministerial code, and anyway they were dealt with by civil servants. I think the hon. Gentleman is also forgetting that, in all the cases I have described, local authorities that are using publicly funded publicity instruments to protest against Government cuts are using discretionary spend that they could have directed into front-line services. That is a classic example of why the Labour party is unhappy about this issue. I regret to say that it goes well beyond the egregious case of Tower Hamlets.

If local authorities want to get information across, which I accept has to happen, they might like to do as my own council, the London borough of Bromley, does. Rather than going to the expense of running its own newspaper, it puts a four-page wrapper around one of our local papers about four times a year. Those pages set out the information very attractively. They are well designed and contain professional journalistic input, and they wrap round the free-sheet that is delivered to everyone anyway. That is a cost-effective and politically proportionate way of getting genuine information across. Also, it does not offend against the code. It is nonsense that although an independent watchdog has held Tower Hamlets to be in breach of the publicity and advertising codes, there is still no legal means of doing anything about it. The Bill will rectify that anomaly.

I say with respect to the right hon. Member for Leeds Central that it is not good enough to say that we could try a judicial review.

[Hilary Benn]

You could.

[Robert Neill]

Well, we could try to resolve many things by way of a judicial review, but whether that would be a wise or proportionate use of public funds, when the outcome is highly uncertain, is questionable. Surely it would be much better to deal with the problem at source, in the way that is being proposed. The Opposition appear to have little to say on this matter, and they appear to be shedding a great many crocodile tears about this aspect of the Bill.

[Andy Sawford (Corby) (Lab/Co-op)]

The hon. Gentleman has shared his thoughts on a range of publications by London local authorities. I invite him to condemn Hammersmith and Fulham council, which he would surely deprecate for publishing a magazine that not only advertises “Sofas and Stuff” on the local high street but comments on the impacts of Government policy on local residents. Will he also consider the publication from the royal borough of Kensington and Chelsea, which gives its views on the Government’s Crossrail proposals and on funding implications for the council, among other things? Does the hon. Gentleman see any difference between that—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The hon. Gentleman is new to the Dispatch Box, but I must remind him that interventions must be brief, whether they are made from the Dispatch Box or from the Back Benches.

[Robert Neill]

There is often a material difference, depending on the precise nature of the language used and the objectives sought to be put across. That is precisely why the Bill is framed in such a way as to provide discretion for the Secretary of State to act where a number of triggers are coming into play. I do not think that intervention worked from the hon. Gentleman’s point of view either.

Let me deal with the issue of council tax referendums. A great deal of objection was raised in the other place, but I do not believe that it was all genuinely warranted. I am glad that the right hon. Member for Leeds Central did not pursue the argument of retrospectivity to the extent that it was pursued in the other place. My noble Friend Baroness Hanham dealt with that effectively, making very clear the Government’s intentions in this regard. Levying bodies and their principal councils had clear notice, so that argument has been knocked on the head. I want to take the opportunity to pay tribute to Baroness Hanham’s work as a Minister in the Department for Communities and Local Government. She was a fantastic and unusually hard-working colleague—someone who probably has more experience in local government than many people here will have forgotten about, let alone learned from. I hope I am allowed to say that, Madam Deputy Speaker.

The key objective of council tax referendums is to protect the council tax payer. It could not be right to get to a position where it was possible to have a degree of expenditure shunting. We sometimes hear about cost shunting, but a degree of expenditure shunting is possible in theory, from the constituent member authorities of a levying body on to the levying body in the knowledge that the expenditure moved on to the joint body would not be captured by the council tax threshold referendum. With respect, that would be pulling the wool over the eyes of the council tax payers of the local authority’s area. The council tax referendum proposals are therefore sensible in protecting council tax payers by removing a loophole that could have been open to that sort of abuse. As the Secretary of State said, when we looked at city deals, we found that the amount involved was not such as to cause the extent of the problems suggested.

For a raft of reasons, the levy on some local authority areas amounts to more than the amount of council tax itself. The levies account for something like 56% of council tax bills—in Liverpool, for example. I am sure that all hon. Members who support our proposals for council tax referendums would agree, in principle at any rate, that they exist to protect the council tax payer. It surely cannot be right that under current arrangements over half the spend is exempt from control by a referendum.

[Annette Brooke]

I quite understand the intention behind this measure, but could my hon. Friend help me with this query? Is not an unintended consequence possible? If the referendum were lost, the levy went ahead and the council tax was frozen, might not the penalty fall back on the council, which would have to bear the costs and cut back on its own services?

[Robert Neill]

In the case of the majority of the larger levying authorities—it does not apply to some smaller ones—my experience has often been that they take the form of joint boards or joint authorities, which have elected members of the constituent authorities sitting on them, but who are also in a sense members of a separate legal personality. That is why they are not part of the council for the purposes of the council tax itself. If a council is concerned that its council tax bill should not rise unduly, which might put it in jeopardy of breaching the referendum threshold, it would be perfectly logical and sensible for it to talk to its representatives on the board. If I were the leader of that council, I would talk in clear terms to my colleagues who were the leaders of the other constituent authorities. There is thus a perfectly good and practical means for council leaders and their representatives to avoid that happening. Equally, when they sign up to particular elements of expenditure through a joint board, it is not unreasonable for them to take into account the budgetary consequences of that expenditure for their council tax payers. As I say, these are sensible proposals, which close a loophole.

I hope that the Bill will commend itself to the House. It deals with important issues, and I agree with the right hon. Member for Leeds Central that it is not a purely dry piece of legislation. I congratulate my right hon. Friend the Secretary of State on producing an entirely localist Bill. After all, localism is not just about passing power down to local authorities as institutions; it is also about passing power down to the residents of those authorities, who are the ultimate consumers, and the ultimate people to whom councillors, officers, and we as Members of Parliament ought to be responsible.

17:44

[Chris Williamson (Derby North) (Lab)]

The Government have presented us with yet another very bad Bill. Indeed, it is so bad that it is difficult to know where to start, but let me begin by saying that there is a certain irony in what we are doing today. As was pointed out by my right hon. Friend the Member for Leeds Central (Hilary Benn), the Audit Commission was established by a former Conservative Government 30 years ago, and here we are now, debating this Bill because another Conservative Government want to get rid of it.

Government Members, including the Secretary of State himself, have suggested that the exposure of the gerrymandering of Westminster city council, which was exchanging homes for votes, had nothing to do with the Audit Commission. I wonder, however, whether the regime that the Government are now proposing would have been able to unveil that appalling scandal, as the district auditor did then. It really was an absolute disgrace, and it led to a huge surcharge on the leader of the council.

The role of the Audit Commission has been both extended and reduced over the years, but I often found its interventions very helpful when I was leader of Derby city council. It was able to assess the effectiveness of local public services, thus providing us with a benchmark in relation to local authorities in other parts of the country and the services that they provided. It did so by means of the comprehensive area assessment which has been so ridiculed by the Secretary of State, and which was one of the first things to be ditched when the Government came to office.

It is probably not surprising that the Government made that decision, as it coincided with their imposition on local authorities of unprecedented cuts, which have continued year after year. The comprehensive area assessment would doubtless have highlighted the significant diminution in the quality and breadth of the services provided by local authorities that resulted directly from the Government’s cuts agenda—and a very unfair agenda it was. As we know, the cuts fell most heavily on the local authority areas in greatest need, although, perversely, some authorities in other parts of the country received an increase in Government grant. I think that, had it been allowed to continue, the comprehensive area assessment would have put the Government parties in a highly embarrassing position.

[George Hollingbery]

When I was a portfolio holder on Winchester city council, I had to respond to the comprehensive area assessment. One of my favourite statistics that it made me report was the number of buildings that were open to the public and the number of those buildings that were accessible to disabled people. I managed to improve the ratio in my first year in post, simply because we closed a building to the public. Do Members actually think that that constitutes a useful set of reporting targets for any normal council? If the hon. Gentleman is really so keen on the comprehensive area assessment, may I ask whether he would reinstate it if he were the relevant Minister in a Labour Government?

[Chris Williamson]

The hon. Gentleman makes an extreme point to illustrate his argument. No one is justifying unnecessary targets. There was perhaps an over-burdensome target culture, but surely that is not a reason to throw the baby out with the bathwater. It would be an extreme overreaction to get rid of the whole shooting match just because there were perhaps some overbearing and silly performance indicators, although there was certainly scope for improvement. As my right hon. Friend the Member for Leeds Central said, we accept that the Audit Commission is going, but what is being put in its place leaves a lot to be desired.

Government Members have said that getting rid of the Audit Commission will realise significant savings, but the truth is that most of the savings have already been achieved by axing the inspection work for which the commission was responsible. It seems that this is yet another case of double counting by the Secretary of State, as there is not much evidence to support his statement that there will be a saving. Indeed, many experts say that fees are likely to increase as a consequence of scrapping the commission. The draft Local Audit Bill ad hoc committee called for the publication of a new financial impact assessment and said that the baseline should be 2010-11, rather than 2009-10. If that were done, we might get a clearer picture of what the savings will be, if any, as a consequence of the Bill.

[George Hollingbery]

The hon. Gentleman is being generous in giving way. I am puzzled by the putative ideas on the savings that are being made. The Audit Commission has recently re-let 70% of the business that it did in-house to private contractors and achieved 40% savings—some £40,000 per council, I understand, although that figure may be slightly wrong. Nevertheless, there was a 40% reduction in the costs of audit. Does the hon. Gentleman not recognise that that is a real and proper saving that would not have happened if the Audit Commission were still in place?

[Chris Williamson]

Let me quote people who perhaps know a little more about these things than me. The draft Local Audit Bill ad hoc committee looked at the matter in detail. It

“heard conflicting evidence about whether and how much public money is likely to be saved by implementing this legislation.”

I have struggled to find anyone who thinks that the proposal is a good idea.

The Audit Commission said:

“Under a free market model, the current benefits of pooling auditors’ costs will be lost and councils in remote geographical locations”—

many of the locations represented by Government Members—

“will have to meet the economic cost of the audit. In some cases this may be significantly higher than historical fee levels.”

The Local Government Information Unit said:

“If the market concentrates further, or even stands still, this will eventually lead to higher, not lower, fees.”

The Select Committee on Communities and Local Government has pointed out that the Government’s proposals for local government

“contrast with the situation in central government, where the NAO is reducing the percentage of work that it contracts out to private firms”.

I do not understand why that double standard is being applied by the Government when it comes to local government. Cynics might say that the Government are creating yet another money-making cartel. We know that the Conservative party has form in using taxpayers’ money to enrich vested interests in the private sector. We need look no further than the privatisation of the utilities, with millions of consumers being ripped off on a quarterly basis by the big six utility companies. We could also look at railways privatisation, which has seen the railway companies fleecing the travelling public, or the deregulation of the private rented sector, where we have seen a massive hike in rents. As a consequence, the housing benefit bill has gone through the roof—some £10 billion a year is going into private landlords’ pockets. This is yet another example of the Conservative party flagrantly using taxpayers’ money to enrich vested interests in the private sector. It is a shameful abuse.

The Communities and Local Government Committee hit the nail on the head:

“Unless the Government can crack the problem of the very limited competition in the audit market in the UK, it will be open to the accusation that the abolition of the Audit Commission is not a measure to save public money but merely a mechanism to transfer public money into private hands.”

I could not put it better myself. Clearly, that is an endorsement of my suspicion about the Government’s real motive for introducing the Bill.

[Robert Neill]

How does the hon. Gentleman square that with the Competition Commission’s recent report into statutory audit services, which pointed out that some 90% of audits of FTSE 350 companies are dealt with by what are sometimes termed the big four, whereas they only deal with about 50% of local authority audits and mid-sized firms get the bulk of the rest?

[Chris Williamson]

The hon. Gentleman is a big champion of vested interests in the private sector, so I am not surprised that he tries to argue that what the Government are doing is right. It is not for me to square that. If he has an issue with what the Communities and Local Government Committee has said, I ask him to take that up with the Committee. I am quoting directly from its conclusions after it looked at the matter in some detail. Do not come to me and ask me to square that. I invite him to ask the Committee to square the evidence that it took. This is the reasoned conclusion that it reached—

[Andy Sawford]

It has a Tory majority.

[Chris Williamson]

Indeed. As I understand it, those were the unanimous findings of the Communities and Local Government Committee.

The Bill is misconceived in another respect. My right hon. Friend the Member for Leeds Central dealt with this eloquently. In the Bill, there is no recognition of joint working, which is essential; it was increasingly important when I was leader of Derby city council. We worked to bring other public sector agencies on side with us to get more bangs for the public sector pound that was being spent in Derby, and that is even more essential as the budget at our disposal diminishes.

Therefore, I hope—my right hon. Friend made this plea—that the Government will reflect on the matter. If, as seems likely, they proceed with the Bill, I hope they will consider how the audit process could be made more relevant and up to date, given the situation we find ourselves in and the way in which public services are delivered. It does not make sense to require each public sector body to undertake a separate audit. It would be far better to recognise the fact that local authorities and other public sector agencies are working collaboratively. It is far better to have a collective audit that recognises the reality of the way in which public services are delivered in this day and age.

[George Hollingbery]

I was interested in the comments by the shadow Secretary of State, because the explanatory notes to schedule 4, paragraph 1, say:

“This paragraph sets out the different ways in which a body may meet the requirement to have an auditor panel. It is intended to provide flexibility for different arrangements that can reflect local circumstances and, for example, any joint working arrangements.”

There are clearly provisions in the Bill to deal with that matter.

[Chris Williamson]

But not—[Interruption.]—as my right hon. Friend the Member for Leeds Central is pointing out sotto voce, where there is a national and local collaboration in that sense. That is the point. This is not a partisan matter; I hope that the Government will take that on board and make that sensible amendment so the Bill is more fit for purpose.

I want to touch on the Secretary of State’s Orwellian proposal effectively to take charge of all council communications across the country. Whatever happened to the Secretary of State’s brave new world? When he first came into office he promised the end of what he described at the time as

“the Ministerial command and control system”.

Well, if this is not a ministerial command and control system, I do not know what is. This is the party that promised us localism and that promised it would sweep away the controlling hand of central Government. What a joke!

The Secretary of State has most certainly gone back on that, and his justification for his position simply does not stand up to examination. Let me quote a couple of experts in the field. The National Union of Journalists said:

“We do not believe that this element of guidance reflects the needs of many communities, nor the practicalities of providing prompt, accurate advice and information to them. In areas where there are no, or limited local newspapers”—

that, again, will include the constituencies of many Members on the Government Benches—

“then sharing planning details, service changes and details of consultations on a quarterly basis is insufficient.”

Even coalition Members in the other place have criticised this proposal. Lord Tope said:

“All we have had from the Government is rather silly and misleading statements from the Secretary of State about ‘town hall Pravdas’.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 898.]

Baroness Eaton, who, like the Secretary of State, is a former leader of Bradford city council, said

“there is no evidence that council publications are competing unfairly with local newspapers and, by the Government’s own admission, very few councils are breaking the existing recommendations”

and,

“It is therefore regrettable that many of the proposed measures in the Bill centralise powers to the Secretary of State and allow central government to interfere with matters that should rightly be decided at a local level.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 903 and 902.]

The Conservatives claim to be the great localists. When I was on the Front Bench and said that the Labour party is the true localist party, Conservative Members scoffed, but here we have a clear example of the Conservative party being the true centralisers in this country today.

We must also consider the retrospective impact of the proposed council tax referendums. The hon. Member for Bromley and Chislehurst (Robert Neill) referred to that and suggested that somehow it was not really an issue, but I beg to differ. I genuinely think that there is a real issue, which goes a long way towards undermining city deals—a welcome innovation as they give more powers to local authorities in the major core cities around the country—although I think the Government should go further in terms of devolving powers.

Again, I could not find anybody with a good word to say about this part of the Bill. The LGA says it jeopardises growth-generating investment. The country is on its knees and we are barely back into growth, so it seems absolutely crazy to deny the opportunity of growth-generating investment now. The Chartered Institute of Public Finance and Accountancy says it will confuse local accountability. Baroness Eaton said:

“It is like revising the speed limit downwards and then fining any motorist who has not obeyed the new limit before it was introduced.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 903.]

The truth of the matter is that local authorities are reaching agreements with levy-imposing agencies with whom they are working in partnership. They will have made arrangements going forward and some of the fees will be increasing over time, and that could push the council tax increase above the threshold at which a referendum must be called. That could leave councils in a very difficult situation. What will happen if the referendum results in opposition to the increase being imposed? The fees will still have to be paid. It will simply mean there will be even deeper cuts over and above the unprecedented cuts that have already been imposed on local authorities.

We know that many local authorities are heading towards a situation in the very near future—in the next financial year and certainly the year after that—where it will not be possible to deliver any non-statutory services. The litter will not be removed from streets and grass verges will be growing out of control. What is going on here? This is simply unacceptable. These are services that define a decent and good society, yet they are being put in jeopardy still further by this part of the Bill.

This is a dog’s dinner of a Bill, as is clear from what has been said not only by my right hon. Friend the Member for Leeds Central and me, but all the experts on these matters. They are all saying the Government have got this wrong. I urge the Minister to take a long hard look in Committee at the provisions contained in this Bill, and to perform some serious surgery and agree to the amendments we will be putting forward to try to make a better job of what is a very poor Bill. I think it will create a very difficult situation for local authorities, end up costing more money and ill-serve the people in the local authority areas that will be affected.

18:07

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

I had better start by declaring that I am a vice-president of the LGA, as it is being mentioned rather a lot in this debate. I also want to thank the Secretary of State—albeit in his absence—for his introduction of the Bill and his enlightening examples. I thank, too, the shadow Secretary of State for his visual aids and his account of his search for plots, which was interesting.

As the Bill has passed through the other place, it has already been considered in detail, and a large number of amendments were made, although some of them were minor and technical. I was very pleased that the Government undertook to introduce more amendments in the Commons, and I was also pleased by the announcements that consideration will be given to the modernisation of parish polls and the introduction of more openness in the recording of council meetings. It will be very good on occasions for people to be able to watch them at home and be able to switch off, rather than having to set off on what might be a long journey and then have to sit through a great deal of business before getting to the relevant part.

I want to comment on four main areas of the Bill. First, I want to discuss the principles behind the abolition of the Audit Commission, although I recognise that today we are really only talking about abolishing the residual part of it. I thought we had achieved a consensus about the abolition, until I heard the speech of the hon. Member for Derby North (Chris Williamson) and now I am not so sure. I recall the many briefings from all the councils in my constituency that have included reference to the burdens and costs arising from this set-up, always with the rider, “There is never any compensation from central Government, despite all these burdens placed upon us.”

The Audit Commission did become bureaucratic; it changed from its early purposes, there was little incentive to reduce its costs, which were paid for by local bodies, and its approach encouraged local bodies to focus more on the views of the Audit Commission than those of local people. The reforms in this part of the Bill will create a more efficient audit system. They are part of this Government’s wider drive to give greater responsibility to local bodies and encourage local people to hold those bodies to account, and the Bill is a step in the right direction. Councils are perfectly capable of appointing their auditors, as companies, charities and foundation trusts already do, and are best placed to decide what arrangements suit them locally. It should not be for central Government or anyone else to dictate to local bodies the people they should appoint. Under these reforms, they should know exactly what they are paying for and have control over their procurements. I am sure that we will discuss whether we are ending up with a cartel or with competition in greater detail in Committee.

The Secretary of State said that the expected savings from the abolition of the Audit Commission are estimated to be £1.2 billion. Despite the comments made by Labour Members, I felt that it was good to know that, unlike with some other Bills passing through this House, some pre-legislative scrutiny was undertaken on the then draft Local Audit Bill.

The Local Government Association wants the Bill to be amended to allow councils to continue to procure external audit nationally and, in so doing, avoid the need to establish independent audit appointment panels. Lord Tope said on Second Reading:

“In my long experience of local government, I have yet to meet anyone who has been clamouring to be a member of an independent auditor panel. That is not usually the way in which public engagement is sought by the public.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 898.]

I am pleased that the Government have been in dialogue with the LGA and agreed to work up an amendment that will create a sector-led body to offer councils an opportunity to opt in to a national procurement option. The LGA would also like the current audit contracts to be extended until the completion of the 2019-20 audits, in order to lock in significant savings—that is very important in these times of austerity. I imagine that matter will also be discussed in greater depth in Committee.

On council tax referendums, closing a loophole to prevent unaccountable levying authorities from exerting pressure on council tax seems a laudable aim—however, I have two buts to add. As a localist, I am not keen on council tax referendums—an alternative to capping—because they interfere with local decision making. However, I accept that, in these times of austerity, council tax freezes and controlling council tax are very important controls of the cost of living for many hard-working families. Secondly, I am concerned about the unintended consequences if the council and the levying board do not work perfectly together, despite the fact that the council might have representatives on the levying board. A financial risk is also placed on the local authority, which it could well do without in these difficult times. As Labour Members have said, there could also be a perverse incentive in terms of growth, whereby much-needed investment in infrastructure could be curbed, which does not seem right. I also share the concerns about the retrospective nature of the provision. So there are definitely questions to be answered here.

What I really want to see is transparency for the general public. Both on precepts and levies, members of the public are confused by the newspaper headline, “Your council tax is frozen”. They might not go through all the details in the Bill—I accept that the details are in place—but the bottom line for them is that their council tax is not frozen. That makes people very angry, because they do not see the accountability in the system. So I have just a few questions about that proposal.

The publicity code has been much mentioned this afternoon. My experience of local government, public relations departments, and council newspapers and publications has led me to conclude that the administration —the party in power—has a greater enthusiasm for having a big PR department and good, big, flashy newspapers than the opposition. Normally, the opposition will say, “We can find savings in the budget by slashing the PR budget.” That is usually the proposal on budget-setting night. However, if the opposition party then moves into control, it suddenly finds that the PR department is rather useful, after all. There are rightly questions about this money and the way it is spent, but a council publication has an important role to play; it certainly means that the public become more engaged, even if that is just a case of knowing where grit bins will be in icy weather and what provision is going to be made. Such publications are important disseminators of information for the many people who still do not access the internet. We cannot have all the information in that format at the moment, so the newspaper is of importance.

Given that not many examples of abuse are being provided and that most local authorities are probably not going to be affected by this measure, I have a concern that we may be using a sledgehammer to crack a nut—that question needs to be asked. Again, the measure slightly offends my localist principles, because the local council should be making the decisions and standing up to be counted when it is seen by its electorate as wasting money on these “lavish” publications. I am not at all convinced by the argument that such publications are in widespread competition with local newspapers, and the evidence would seem to be against that view; so, again, questions remain. I can see what the Government are aiming to do, but we have to recall that the provision of information and a council being outward looking is a good thing, even if most of the photos in the newspaper are of members of the ruling party.

I wish to end by talking about statutory notices. The LGA has called for the introduction of a new clause that would remove the duty on local authorities to publish statutory notices in their local newspapers. It would not remove the duty on councils to inform their residents about the statutory notices or any other area of council policy; it would just allow councils to decide whether or not the local newspaper was the best place to do that. It has been estimated that adopting the new clause could save local government at least £26 million per year, which is a considerable sum, and more cost-effective methods of conveying this information are available. I believe an Opposition Member intervened to suggest that estate agents and other professionals look at all the public notices, but they should be there for ordinary members of the public, who are the ones who do not spot the notices that affect them. So I do not feel that the most effective method of conveying information to the bulk of council tax payers is being used. The professionals who need to know this information could access it online; perhaps it is paper notices that are needed for residents. Will the Government repeal this outdated and expensive statutory requirement? Such an approach would be strongly welcomed by all parties in local government.

18:20

[John McDonnell (Hayes and Harlington) (Lab)]

I want to address three issues. The first is the Bill’s failure to acknowledge the fears for probity in local government, the second is its failure to address the structural and procedural breakdown of accountability and the third is the new code of practice for council newspapers.

We usually preface such debates by explaining our background in local government, and I am trying to address these matters completely objectively and without being partisan in any way. I do so as someone who has worked on the front line of a social services department, who was the head of policy of a London borough and who then became an elected member of the Greater London council, chair of finance and deputy leader before going back to being a bureaucrat in local government as the secretary—they now call them chief execs—of the Association of London Authorities, then the cross-party body of the Association of London Government. I have done my time, I suppose, over 25 years in local government.

There are fears for accountability and probity that the Bill does not seem to acknowledge or address. I wonder whether Members have seen the report published this month by Transparency International UK. Many of us will have worked with that organisation—which monitors corruption and probity, particularly in developing countries around the world—in the context of our countries of interest. I have, particularly on Kenya and other African countries.

The organisation monitors corruption in government throughout the world—establishing league tables, as some Members will recall—raises awareness of it and advises civil society and Governments on how to combat it. I urge Members to look at the report it has published this month, entitled “Corruption in UK Local Government: The Mounting Risks”. Let me quote the executive summary and some of its recommendations, which I will want to try to insert into the Bill as we discuss it in detail.

The good thing about the report is that it says there is not much evidence of corruption—but that is because what evidence there is, is anecdotal, although part of the problem is that not a lot of research has been done. The report found that although there was no agreement on the levels of corruption in local government, there was agreement across the board about the “disturbing picture” whereby

“the conditions are present in which corruption is likely to thrive”.

The report states that those conditions are

“low levels of transparency, poor external scrutiny, networks of cronyism, reluctance or lack of resource to investigate, outsourcing of public services, significant sums of money at play and perhaps a denial that corruption is an issue at all.”

The report goes into some detail about the checks and balances for accountability and probity in local government and is critical of the previous and current Governments’ performance, which undermined some of the processes of transparency, particularly the awarding of public contracts, the overseeing of their implementation and the growing tendency to outsource provision and transfer personnel between public and private roles—the revolving door syndrome that occurs not only in central Government but has gone into local government. The report also states:

“Planning decisions remain highly discretionary and are vulnerable to corruption in several areas.”

Allegations and incidents have been recorded—not at any high level, but they exist—of bribery in local government, collusion, conflicts of interest and corruption-related fraud. Of course, we have also seen examples of electoral corruption prosecuted in Birmingham and elsewhere. The report refers to a number of changes in legislation, particularly this Bill, that undermine the climate, procedures and structures that would address corruption and protect us from it.

Let me go through some of the criticisms of this Bill and some of the other legislation introduced by the Government. Transparency International UK is concerned about the abolition of the Audit Commission, as there will not longer be a “back-stop” to provide support and work to protect against corruption. There will be

“no institution with wider powers of public audit to enable criminal investigations, which the Audit Commission used to have”.

There will be

“no institution to collect nationwide data on fraud and corruption or analyse trends”,

and:

“New external audit reports will not be adequately covered by the Freedom of Information Act”.

That point has been raised by my right hon. Friend the Member for Leeds Central (Hilary Benn). The report also states:

“Local authorities will have a reduced internal capacity to investigate fraud and corruption, due to austerity measures”.

Those concerns will build up to create a climate in which there are fears for probity. The report also states:

“The responsibility for investigating and detecting fraud and corruption is being delegated to lower-level officers”

in local government. It continues:

“Audit committees are weakened and may disappear because there is no longer a statutory requirement for an audit committee to be a full committee in its own right…External auditors appointed under the new arrangements may face incentives to avoid undertaking investigations or raising concerns about suspicions of fraud or corruption.”

The report expresses its concern that:

“There is no longer a universal code of conduct to provide clarity to members serving on different public authorities and committees…There is no longer a requirement for members to declare gifts and hospitality and no legal requirement for either a standards committee or the monitoring officer to check any register of interests on a regular basis”.

Again, that is not addressed by the Bill. The report goes on:

“There is no longer a statutory requirement for a council to have a standards committee…There is no longer any obligatory sanction for members that violate the local codes of conduct”

and there is an overreliance on party discipline as the main sanction. It states:

“Since the abolition of Standards for England, there is no longer a national investigations body for misconduct.”

As the hon. Member for Mid Dorset and North Poole (Annette Brooke) mentioned, that means that some local authorities might struggle to appoint independent people

“of the appropriate calibre and legitimacy to perform the new role”

under the self-regulatory system of panels. The report says:

“The system relies too heavily on the new offence of failing to declare a pecuniary interest”,

and, of course:

“The ability of chief executives, financial officers and monitoring officers to hold elected members to account would be compromised by proposals to abolish their statutory employment protection.”

That all leads Transparency International UK to conclude:

“The Government’s changes, without apparent consideration of the consequences for corruption, are likely to have unintended consequences. The effect of the changes has been to create a situation in which corruption could thrive.”

The report is worrying and when the Bill goes into Committee, it might be worth inviting the organisation to address the Committee or provide evidence so that these matters can be properly discussed with it and its expertise can be drawn in to our consideration of the Bill, which is about local audit, and therefore probity, and local accountability, and therefore democratic accountability.

Some of the recommendations that Transparency International UK suggests could be built into the Bill are worth examining. The first states:

“Private companies, when operating services in the public interest, should be required to comply with the Nolan Principles.”

Secondly, the organisation recommends:

“Legal employment protections should be maintained for key anti-corruption officials, including Chief Executives and Monitoring Officers”.

Thirdly, it suggests:

“It should be a statutory requirement”

in this Bill

“for a local authority to have an audit committee as a dedicated full committee, with a specific remit to oversee corruption risk assessments and corruption investigations.”

It also suggests that now that the audit will be undertaken by private firms, consideration should be given to creating an auditors’ forum on corruption to bring together the private audit firms involved in local authority audit to share information, advice and good practice on the risks they identify in the audit role.

Transparency International UK also recommends that the Government should insist that the research function undertaken by the Audit Commission should continue somewhere within Government to give a clearer picture of the prevalence and scale of corruption in UK local government.

Again, although work has been undertaken by existing structures, such as the national fraud audit that has been taking place in some specific areas, there is no overall responsibility lodged with a specific body to undertake research at a national level.

The report recommends that each local authority should have a nominated individual responsible for counter-corruption who conducts a regular corruption risk assessment and liaises closely with law enforcement authorities. I will not go through the remaining recommendations except for the final one, which states that as work now goes out to the private sector, it is critical that auditors should be allowed to assess the documents from significant private contractors that a local authority has used.

[Chris Williamson]

On that point, is my hon. Friend familiar with the PricewaterhouseCoopers citizens jury which showed that, when polled, the overwhelming majority of the British public favour public services being delivered by public authorities and by directly employed public servants? If services are to be externalised, the safeguards that my hon. Friend is describing would be the bare minimum that the vast majority of the British public would expect.

[John McDonnell]

There is a general worry about what happens after privatisation. My hon. Friend cited a number of examples—rail, energy and others. People are concerned about standards of probity and issues surrounding the exploitation of the resource. There are similar concerns in relation to local government and the use of the private sector. It is important, therefore, that we build safeguards into the Bill to reassure people. I am a great believer in direct provision by the local authority itself, but if there is to be contracting out or outsourcing, it is important that we reassure people that there is a legislative framework that provides safeguards to ensure probity and to counter corruption. Transparency International suggests that that should be built into the legislation. It is important that we listen to an organisation that has the relevant expertise.

The final recommendation deals with freedom of information, which has been raised a number of times in the debate. Transparency International recommends:

“Private companies, when operating services in the public interest, should be required to comply with the Freedom of Information Act with regards to those services.”

As a specific example, it states that

“audit reports from local authorities should be covered under the Freedom of Information Act or published directly as public documents.”

That is not a particularly challenging recommendation. It should be standard practice.

As Members consider the Bill further, I suggest that they read the Transparency International report “Corruption in UK Local Government: The Mounting Risks”, and invite the organisation to provide them with more detailed information and evidence. That might enable us to address some of the concerns that have been expressed and which we all hear from time to time in our constituencies. These may be anecdotal, but the information from Transparency International suggests that there is mounting national concern as well.

My second point is about examples in my own area. The Bill does not seem to address any of the structural or procedural concerns arising from the degradation of accountability within local government. I was hoping that the Bill would go further in ensuring full accountability and transparency in local decision making. To a certain extent I blame the previous Government for the structural problems that we now have in local government. I use my own local authority as an example. I would like to see amendments to the Bill that ensure full transparency of all decision making.

In my local authority, Hillingdon, we have a leader and cabinet system which has centralised powers in the hands of one person—the leader. The leader is able to use exclusive patronage to appoint all the other members of the cabinet, and that patronage then determines the lucrative business of the payments of himself—£65,000 a year for a part-time job, plus expenses—and of every other member of the cabinet, who receive £50,000 to £55,000 each. If any members step out of line, they are demoted. In recent weeks in my local authority, I have seen long-standing experienced senior councillors prevented even from standing again for the local authority.

Transparency International’s report expresses concern about cronyism in local government. In my local area I am witnessing the worst forms of cronyism where the leader appoints everybody, everybody is responsible to the leader, and there are financial consequences if people step out of line. In addition to that, there is nothing in the Bill about the decision-making process in relation to policy, which has also been centralised. In my local authority all decisions, no matter how minor, go through the leader’s office. If any officer loses the favour of the leader, they are out. If an officer provides unpalatable advice to the leader, that is enough for them to be shown the door. That is described among officers in Hillingdon as a reign of terror.

Whistleblowing is not an option for most. In Hillingdon, when people are asked to leave, they go under a compromise agreement, which includes a gagging order. I would like to see in the Bill an end to all compromise agreements in local government and an end to all gagging orders that are implied as part of those compromise agreements, because they prevent officers from providing independent advice or making public their concerns to all members of the council and to the general public.

I want to see the Bill also address the issue of secrecy. The cabinet system means that all major decisions in my area are made in part 2 of the cabinet agenda—that means in confidence and in secrecy. As an officer in the past, I have advised on what should be in part 2 and what should be in part 1 and in public. Decisions which I considered in the past should be made in open committee and information upon which those decisions are made are almost inevitably put in part 2 in Hillingdon—the confidential part of a cabinet meeting. I want to see a provision in the Bill which restricts the ability of members to avoid accountability by putting decision making into the secret part of cabinet agendas.

I shall give a couple of examples to show how ludicrous the practice has become. For the building of a new school in my area, a matter which I have raised in the House before, a consultant was employed to examine which site the school should be built on. It was controversial because the council wanted eventually to build on a country park—a green-belt field about which even the Mayor of London expressed his concerns. The consultant’s report on which sites were examined, all in council ownership, was put in part 2 of the cabinet agenda—the secret part. Even freedom of information requests were refused on the grounds of commercial confidentiality.

We must address in the Bill how councils are allowed to interpret commercial confidentiality in a way that avoids accountability and avoids their providing even the basic information to local members of the public and also to opposition members. Let me give another example. On the same site there was a recent archaeological find of flints. The report from the archaeologist who discovered the flints was put into part 2 of the cabinet agenda on the basis of commercial confidentiality. It might have been commercially confidential 6,000 years ago, but not now. Eventually both reports were released, but not in a timely fashion.

The problem—I say this from a non-partisan point of view—is that an opposition councillor who seeks to reveal anything that is in part 2 of a cabinet meeting is threatened with criminal sanction, so people are fearful of releasing information from part 2. We should address that matter in the Bill. We need to define more clearly what is commercial confidentiality, and what criteria can be used for putting items into the secret part 2 of the agenda for a committee or cabinet meeting. I believe that is being abused, not necessarily for corrupt reasons, but perhaps for party political advantage or because individual councillors do not want to be held to account by local communities.

The Bill refers to audit and some elements of transparency as best it can, but it does not really address accountability and scrutiny. In my borough, scrutiny is virtually non-existent. Scrutiny committees are packed with a majority of party members loyal to the leader and can therefore be controlled by patronage. Scrutiny committees might have been an excellent idea some years ago, but in many local authorities, including mine, they have proved toothless.

There are real concerns about corruption. Advice needs to be provided to local authorities on how independent investigations should take place when allegations of corruption are made, but again that is not covered in the Bill. I will cite an example I raised in the House some years ago relating to the planning incentive grant introduced under the previous Government by the then Department of the Environment. If a local authority considered its planning applications within 13 weeks, it was given an additional grant from central Government, so it was in incentive to improve efficiency. In my local authority—this was proved, and the details published, as a result of what I said in the House—dates and signatures on documents were found to have been forged in order to bring planning application decisions within the 13-week period, even though many were taken later.

Those forgeries were exposed because fortunately one of the planning applications was submitted by a police inspector. He looked at the documentation and discovered that the dates had been changed. In fact, decisions on his application had been recorded as taking place even before council officers had met him to discuss it. After an investigation, a couple of officers retired from the local authority unsanctioned. Bizarrely, the leader of the section responsible for the planning process was then promoted. There is nothing in the Bill that provides real direction for local authorities on how to deal with such matters. It is extraordinary that these things still go on, yet we turn a blind eye to it by not relating the legislation to the real world of local government.

I could cite many other examples, including Southern Cross and the neglect of the elderly in my constituency, and non-monitoring as a result of the staff cuts that have taken place. Again, elderly people suffered but no one was held responsible. There was a refurbishment programme of an old people’s home—I raised this 12 months ago—which resulted in a year-long delay for elderly people being relocated to their homes. There was laundering of money via contracts to a builder. Again, there was an internal investigation that reported to part 2 of a cabinet meeting and there were no sanctions whatsoever against any officer. I wrote to the Secretaries of States of successive Governments on all those matters to call for an inquiry, but there was no response and no action was ever taken.

I am using my local authority as one example, but there are others across the country. My point is that the Bill seems to be irrelevant to what is happening in my local authority and many others across the country. It is irrelevant to the concerns about corruption raised by Transparency International and to our concerns about good governance and accountability at the local level. I hope that there might be an opportunity to amend the Bill and expand some elements of its remit to tackle some of the concerns that I, many of my constituents and many others across the country have. I hope that the Government are not fearful of grasping this nettle. Their main priority in the Bill should not be simply to let more contracts to the private sector; it should be to improve local audit and accountability. A key element of that is probity.

Let me turn to the proposal relating to local authority publicity. The all-party group on the National Union of Journalists, of which I am secretary, has been expressing concerns about some of the ideas raised throughout the consideration of this proposal. The NUJ represents members of the local press and media as well as local government officers working on the newspapers and journals published by local authorities. It is worth remembering, whatever has been said in the knockabout between the parties, that NUJ members working in local government abide by the same code of conduct as other journalists but, as local government officers, are not allowed to put forward party political views. Indeed, they could be sanctioned legally for doing so.

It has been argued that additional statutory powers are needed to strengthen the existing code of practice. As my right hon. Friend the Member for Leeds Central said, there are existing powers for that and the Government could take action against local authorities that overstep the mark, but they have failed to do so. They have taken no legal action and there has been no judicial review whatsoever of any council newspaper. I find that surprising, given the outrage that has been expressed in this House and elsewhere.

Although many of us would like to see thriving local newspapers reporting what happens in council chambers and providing information to their local communities, in reality it is rare to find a single journalist even at full council meetings. I will circulate the information from the NUJ on just how many newspapers have gone to the wall over the past 20 years, how many jobs have gone in the industry and the impact that has had on quality journalism. The circulation of some of the papers that still exist is also very limited.

The council newspaper is therefore often the only way that local people can get some form of information on what is happening in the local authority. I have looked at this, as has the Communities and Local Government Committee and others, to see what impact council newspapers have had on the commercial viability of local newspapers, and no evidence whatsoever has been found. In some instances it is quite the reverse, with an element of synergy between the local press and the local authority in its publication of information. I am concerned that the proposed measure is unnecessary, because sanctions already exist. It will also undermine the dissemination of information by local authorities to their local communities. From the NUJ’s point of view, it could have as a consequence the loss of jobs at a local level, which we should all be concerned about.

There also needs to be some clarity. I have criticised Hillingdon council, but let me now try to defend it. It is currently seeking to ensure that the local community is properly informed on two key issues of local concern. One of them, as my right hon. Friend the Member for Leeds Central mentioned, is the expansion of Heathrow airport, in which it is up against a large corporation that is sending out large amounts of information to the local community, most of which is inaccurate. It is only the local authority that is providing a balanced analysis of what is happening. The other issue is high-speed rail. I am anxious that Hillingdon council, or any other local authority, should not be debarred from ensuring that local people are kept informed about such pertinent issues, because it is absolutely essential that they are fully aware of the consequences if they are to exercise their democratic right and decide on the actions taken by local and national Government.

I would like assurances from the Minister that the activities of local authorities to inform local residents of matters such as high-speed rail or the expansion of Heathrow airport will not be curtailed by this legislation. I agree that putting press releases out is one thing, but if the local press has declined so badly, with a limited circulation and an inability to report on many issues, a press release will be inadequate. I understand the point the hon. Member for Mid Dorset and North Poole made about other mechanisms, particularly the internet, but not all people are connected, so they rely on the local authority journal that comes through the letterbox. I agree with what she said about having pictures of local councillors on every page, which I could possibly do without.

It is important that we in no way hamper the ability of local authorities to communicate with their residents. There may be opportunities for authorities to work together with the local press. I understand the point made about newspaper wrap-arounds, which have proved effective in some areas. That can assist greatly in communicating local ideas, but it does depend on the local newspaper’s circulation. Even the free sheets do not get everywhere, unfortunately. It might be possible—I would like the Government to look into this—to enable partnerships between local authorities and the local press whereby joint publications or similar could assist in the dissemination of local information.

[Chris Williamson]

Many local newspapers already print the council newspaper, thereby providing an income stream and additional source of welcome revenue for those newspapers, which are often under extreme financial pressure.

[John McDonnell]

I hate the word “synergy” but there is a potential for synergy between the local authority and some of the independent local press and publishers to disseminate information locally. One of the ideas that has come up is about local authorities participating in independent publishing companies—DCMS considered this previously—through joint ownership of a magazine or other communication that can go out to local residents. However, some flexibility from Government and amendments to the Local Government Act 2000 and the Local Government Act 2003 may be required to enable that sort of investment by the local authority in participating in independent companies.

There are constructive ways forward on this issue. If we take away the banter, whether it is about Hammersmith, or East End Life or whatever, we may arrive at a constructive way forward whereby local authorities can communicate with their residents and we can ensure that that is not used for purposes beyond good information dissemination and can protect jobs in the local authority and the local press.

18:52

[George Hollingbery (Meon Valley) (Con)]

Last time I spoke on local government matters of this complexity—this is a complex Bill—a colleague grabbed me from behind after I had finished and said, “By Christ, you seemed to know what you were talking about, but God you were boring.” I think I am likely to get the same response at the end of this speech, so I hope that Members will excuse me before I start.

I welcome the abolition of central auditing and inspection, which was highly bureaucratic and rarely had any real effect. It led to very little action, at least in my council, and was highly burdensome and expensive. Indeed, just putting in the systems to cope with it cost my council £50,000. That seemed completely over the top given that the council raises only £4 million in council tax.

I have already given an example of one of the ludicrous statistics that I had to collect, but I would like to share a couple more. We had to report the percentage of the council work force who were of black and ethnic minority origin compared with the percentage in the local area that we served. In one year, we had a 25% fall in that indicator because one person retired.

We were also asked to report on the time taken to re-let local council housing. Sitting here in Westminster that seems like a sensible thing to measure, but in Winchester we had a serious problem with hard-to-let apartments, many of which had been un-let for a year, perhaps two or even three years, because they were 30 or 40 years old and no longer suited to modern conditions. The better we did on that, the worse our indicator got, because the length of time we had taken to re-let council flats went up and up as we added a year or perhaps two years every time we re-let a council flat. That is not what was intended, and it demonstrates the problem with large central organisations. I very much welcome the abolition of the system.

Members have talked about the amount of money that has been saved by the abolition of the Audit Commission. There is some debate about this, but it is undeniable that the 70% of local government audit business that was previously handled in-house by the Audit Commission has been re-let at a 40% reduction in the amount charged. That is a real gain at a time of money difficulties, and it is to be welcomed.

The reason I have fairly lengthy notes is that the Communities and Local Government Committee, on which the hon. Member for Derby North (Chris Williamson) also served, reported on this issue in July 2011. I should like to go through some of the recommendations that we made, compare them with the Bill, and see whether what we recommended has been delivered. In evidence, we detected some nervousness about violating the principle that public bodies should not appoint their own auditors. I have never understood the problem with that. I cannot see the philosophical difference between the private and public sectors in terms of audit. In both cases, roughly the same requirements hold. Yes, we have to be absolutely confident that public money derived from taxation is properly spent, but why is that, in principle, any different from individuals giving money to private companies that has to be properly handled and is subject to the rules of the land? In both cases, the public must have full confidence that the law is being upheld and that their money is being spent as intended. I recognise that a lack of confidence in how public money is being spent threatens the whole principle of a Government being able to raise taxation in the first place, which lies at the very heart of our democracy. That said, I cannot see that there is any greater need than a general confidence in the true and fair view of the private sector on which so much of our economy rests. I cannot see why this is any more important in the public sector than in the private sector.

The Committee felt that the change was no great threat as long as sufficient safeguards were put in place, and I firmly believe that the Bill provides them. A reasonable summary of our principal recommendations is that any replacement audit regime should be independent, transparent and effective. Let us then look at the Bill to see whether it contains remedies to those three issues. We asked that any scheme be “proportionate and risk based”. Paragraph 1 of schedule 6 deals with that in that it specifically allows the code of audit practice to be different for different authorities. That is exactly as it should be. It is somewhat at odds with our request for “ensuring consistency”, but as long as all audit is driven by the same overarching principles, the need for a proportionate approach trumps uniformity.

We asked that local so-called value-for-money reporting be carried out by each authority rather than the auditor. Clause 19 provides that auditors must be satisfied

“that the authority has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.”

It is unclear how that will be dealt with in detail, but we must suppose that it will be covered in the code of practice issued by the National Audit Office. I urge the NAO to accept the Committee’s recommendation and leave the form of that to local authorities to supply as they see fit and for auditors to judge adequacy and robustness.

We also asked for

“clear and uncontestable protections for assuring the independence of audit committees and auditors”.

That is unequivocally provided for in clause 9 and schedule 4 for audit committees and in schedule 5 for the auditor. We asked that any appointment decision rest with full council rather than another body of councillors to ensure that the decision could not be made on the quiet. Paragraph 1 of schedule 3 does exactly that.

In the other place, Lord McKenzie tabled amendments to allow local authorities to create a voluntary sector-led body to appoint auditors, thus removing the need for all local authorities to have their own independent audit committee to appoint auditors. That is eminently sensible, and I am absolutely sure that it will lead to competitive tendering that will reduce bills for all authorities. I am pleased, as was the right hon. Member for Leeds Central (Hilary Benn), that Baroness Hanham conceded that in the House of Lords and that amendments to that effect will be tabled in Committee.

In passing I note that where authorities choose not to join such a body, there may be scope for having one committee in a council that deals with all issues that require independent control. I suspect that that does not need addressing in the Bill but is something that councils could do for themselves. To my mind, there is at least one other such committee—that setting councillors’ rates of pay and expenses. There could be one committee that has a majority of independent councillors and/or members and an independent chairman that would be allowed to deal with all issues that required an independent view.

Clause 16 provides for the regulations on the removal of auditors, on which the Committee concluded that there should be a double lock, whereby both full council and the audit committee had to recommend the removal of an auditor before it could happen. Clause 16 specifies only that regulations may be issued on that subject. We will need to see the detail of the secondary legislation to be completely certain about how the issue of removal will be dealt with, but I am confident that the Government understand that protecting auditors and their role in councils is extremely important, and that removal and how it occurs must be dealt with adequately.

On the qualifications of auditors, Lord McKenzie raised in the other place the issue of specific qualifications for auditors in the public sector. Given that I have some experience of both public and private audit, I can vouch for the material difference between the two—some might call it a gulf—and I welcomed the Government’s commitment in the Lords to add words to that effect. Those words now appear in clause 17 and paragraphs 8 and 13 of schedule 5, which will establish a register for qualified individuals. That is a sensible move. If we are going to have independence of audit, we need to make absolutely certain that those who are eligible to be auditors are properly qualified and that there is a register where we can check whether they are properly qualified.

The Committee also commented on the transparency of the process, a topic that was also brought up in the Lords. I do not intend to dwell on it for too long, because I have already made clear in an intervention on the shadow Secretary of State that I think that clauses 21 and 22, combined with clauses 24 and 25, make it unnecessary for the regime to be subjected to freedom of information legislation.

The Committee was concerned that the right to object to accounts should be proportionate and reasonable. Many members of the Committee and witnesses reported that the right to object had been substantially abused in the past. I suspect that many who have worked in local government will recognise that that is a tactic used by people who are dissatisfied with the council in general or perhaps even with one particular councillor.

One individual cost my own council more than £50,000 in a single year by challenging the accounts in what can only be described as a vexatious manner and an angry reaction to a decision that had affected him personally. As such, I welcome clause 26, which, while allowing timely and significant objections, seeks to limit the ability to misuse the power.

The Committee was particularly concerned about the matter of public interest reporting. We asked that that element be safeguarded when the Bill was introduced, but we did not seek to prescribe how that should be done. My reading of the Bill is that the issue is more than adequately covered by schedule 7.

Lord McKenzie probed the question of whether the National Audit Office should be explicitly tasked with performing the role previously played by the Audit Commission as mentor during the public interest reporting process, for which the Committee also asked tangentially. Baroness Hanham responded in the Lords by saying that, given the NAO’s role in the design and scope of local audit, she felt that it would always be there to give advice. I think that that is a reasonable assessment and it seems that Lord McKenzie agreed.

Finally, the Committee felt that the proposal for thematic studies previously undertaken by the Audit Commission to be undertaken by the NAO was entirely workable. Indeed, we said that it “may have some advantages”. We also expressed the view that the Local Government Association was well placed to do more work of this sort outside the more formal NAO structure. My understanding is that the LGA is keen to progress this matter, and I would welcome that.

It seems to me that, given all the measures under discussion, any reasonable observer can safely conclude that the new regime gives more than adequate confidence that the new system will be robust, transparent and independent.

I want to comment briefly on a couple of other aspects of the Bill that deal with matters other than audit, and it will not surprise anyone to know that one of them is “The Code of Recommended Practice on Local Authority Publicity”. At the moment the code is only advisory and continues to be abused by only a very small number of authorities. It is right that public money should not be allowed to pay for partisan political activity, save in very limited instances and when specifically authorised by Parliament; Short money is a particular case in point. The Government are absolutely right to try to stop such abuse. It cannot be right to have political campaigning on the rates, but I ask the Minister to be careful.

At present a number of authorities breach the code, but they do not do so for political gain; usually, it is related to the frequency of publication. There is an argument that quarterly publishing is more than adequate and that to allow more would threaten the viability of local newspapers, particularly if the content of the council newsletters is not limited solely to council matters, takes advertising and is laid out in such a way to compete directly with newspapers. I have some innate sympathy with that position, but I must admit that the evidence that there is truly an adverse effect is scant.

My real worry is that, while the enforceability of the code is clearly important, so too is the proportionality of the code itself. I suspect that Ministers are not, in fact, too worried about the frequency of publication. Their real worry is the partial nature of a very few publications—the “Pravdas,” to quote the Secretary of State—but legal officers on councils will not see it that way. Understandably, once the code becomes enforceable their advice will be that they cannot recommend anything other than that which the code allows, which includes not publishing more frequently than quarterly, as detailed in paragraph 28. I believe that as long as local authorities can adequately justify a more than quarterly publication we should not seek to prevent them from doing so.

A more than quarterly publication would have been costly and pointless for my own district council. We simply did not have enough to tell our local electorate every single week or even once a month. At the same time, a number of much larger authorities could easily fill a publication monthly with objective, useful and relevant information for residents. May I encourage the Minister to look at the code with a view to dealing with that point?

Will the Minister also look again at the publication requirements for statutory notices, which have already been mentioned? Although it is right that we consider the effect on local newspapers of the competition provided by local authority publications, it is also right that we consider how we spend public money to best effect.

One of my local editors made the argument to me that it is important for readers to be able to see what is going on in a public authority and that the publishing of statutory notices in newspapers is an important part of that process. I pointed out to him that if he truly thought that to be the case, there was nothing to prevent the paper from reporting on them and publishing the list itself if it felt that strongly about the matter. The simple fact is that the vast majority of the public access data about planning, licensing and so on from public notices and, thereafter, council websites, rather than from the local paper.

This issue was a bugbear to me as a portfolio holder. It was expensive, inflexible and of little advantage to the public, and it cost my council—a small district council—£32,000 a year. It may have been to the advantage of the profitability of newspapers, but I really do not think that that should be a relevant factor.

Finally, I turn to council tax referendums. It is clear that the Government are right to give local voters the right to vote on council tax increases that are above the limit set by the Government as reasonable and proportionate. I believe that is much better than a cap, allowing as it does for a council to take its case to the voters if it believes it has a strong enough case to persuade them.

The Bill corrects an anomaly in current regulations that omit levying authority charges from the calculations that determine the proposed percentage increase on council tax. We have already had the argument about why they should be added, but there is a difficulty that the Government need to address. If there needs to be a council tax referendum because the amount charged by the levying authority pushes council tax above the Government’s limit, there is no legal way in which the council can force that levying authority to change its charge. Neither is there any duty on the levying authority to hold a referendum—that falls to the local council taxpayers. I believe that that is wrong. We have to force some decision on levying authorities if this particular provision is to work correctly.

Three simple possibilities have occurred to me. It may be that none of them is the right thing to do, but they are all possible. The first is to impose a cap on levying authorities, which is not something that I would favour. The second is to impose the cost of the referendum required as a result of the charge from the levying authority on the levying authority. The final one is to make a no vote binding on the levying authority, such that it has to change the charge back in such a way that the overall council tax will rise only by the amount specified by the Government. I would welcome a commitment from the Minister to consider the matter and hope he will make some proposals in Committee.

In conclusion, I am confident in the general thrust of the Bill and in the vast majority of its measures. I will certainly vote for it tonight should there be a Division, although I suspect that is unlikely given what others have said. I ask, however, that Ministers address some of the concerns I have raised when the Bill goes to Committee.

19:08

[Andy Sawford (Corby) (Lab/Co-op)]

This has been a lively debate on an important Bill and it is a pleasure to follow the contributions of many hon. and right hon. Members. The hon. Member for Bromley and Chislehurst (Robert Neill) spoke with experience of local government, and it may not surprise him that I want to start on a note of consensus with him and the hon. Member for Meon Valley (George Hollingbery) by saying that I for one recognise that the Audit Commission went beyond its remit. Indeed, my right hon. Friend the Member for Leeds Central (Hilary Benn) made clear at the outset that we do not seek the restoration of the Audit Commission, and we understand that, to be frank, no one will lament its passing.

However, even though the Bill has been three years in the making, it is full of holes. My hon. Friend the Member for Derby North (Chris Williamson) said that the Bill is a dog’s breakfast. He made a strong speech in which he talked about the important functions of the Audit Commission, such as auditing and providing value for money in an independent way. Although we might not lament the Audit Commission’s passing, we should be concerned about those vital functions.

We must explore critical issues in Committee that are currently unclear, such as the arrangements for the future management of audit contracts and the transfer of Audit Commission functions. We do not know, for example, who will maintain the vital value-for-money tools. As a result of pressure in the Lords, not least from my hon. Friends, we have been promised improvements, such as amendments on opting into centralised arrangements for audit procurement. We can only hope that when the details are forthcoming in Committee, they meet the aspirations of their lordships and of the many organisations, including the LGA, that have pressed for those sensible amendments. It was good to hear the hon. Member for Mid Dorset and North Poole (Annette Brooke) pressing the Government on that point. I hope that she will take forward the good work of her colleague, the noble Lord Tope, in Committee.

There is doubt about the amount that the proposals will save. When the Minister responds, I expect that he will make claims about the level of savings, as did the Secretary of State in opening the debate. However, it would do Ministers much more credit if they stopped double-counting and deliberately inflating the estimated savings. We all know that most of the savings have already been banked with the axing of the Audit Commission’s inspection work and with most of the audit work outsourced.

It is disappointing that the Government ignored the advice of the draft Local Audit Bill ad hoc Committee, which, after receiving conflicting evidence on the savings, recommended that a new financial impact assessment be made. The Committee believed that only modest savings were likely and was concerned about whether a real market would develop. As my right hon. Friend the Member for Leeds Central said, in the last financial year, only seven firms were appointed for the nearly 800 councils, health bodies and fire and rescue authorities that were audited by private firms, and 90% of those bodies were audited by only five firms.

The Audit Commission has raised fears that some local authorities might find it hard to attract a suitable auditor:

“In a free market, we believe there is a risk that some local authorities may find it hard to attract an auditor with the necessary skills and experience, at a reasonable price.”

It continues:

“We are aware that the firms are already considering which audits they would look to drop under the new arrangements.”

As my hon. Friend the Member for Derby North, the LGA and the National Association of Local Councils have said, that will be a particular concern for smaller authorities.

On new entrants to the market, I share the scepticism of the draft Local Audit Bill ad hoc Committee, which said:

“We heard evidence to suggest that it is not realistic for smaller firms and organisations such as mutuals and co-operatives to bid successfully for one-off audits without an inevitable impact on quality, consistency or cost.”

The Local Government Information Unit, whose evidence and advice should always be considered—I should declare an interest as its former chief executive—points out that a 10% increase in audit fees would wipe out any predicted savings. Grant Thornton said that

“it is likely that fees will increase, not decrease, as a result of the draft Bill”.

[John McDonnell]

One simple measure to expand the market might be to prevent an audit firm from being the auditor for a local authority if it already has contracts with that authority.

[Andy Sawford]

My hon. Friend made a very interesting speech and I hope that he will follow the passage of the Bill closely. I will have to give further thought to the implications of his suggestion, but if the arrangements proposed by the Government are to work, there must be an open market and a wide range of audit firms must provide audit services. We would also want that to be reviewed regularly by the audit panel. The points that the hon. Member for Meon Valley made about the dismissal of auditors were important.

Steve Parkinson of the Society of Local Council Clerks said:

“When we get to the 2017 tender exercise, I cannot imagine those fees going down, and especially for the smallest, I can see them needing to go up.”

That speaks to the point made by my hon. Friend the Member for Derby North about what lies ahead. What assurance can the Minister give that the new audit arrangements will not lead to rising costs, rather than savings, for some councils?

On savings, it is welcome that, after Labour pressure in the Lords, the Government undertook to look sympathetically at a proposal for an optional joint procurement body. We welcome the assurances that the Secretary of State has given today and we look forward to seeing those proposals. Central procurement could save more than £205 million of public money over five years. That figure does not come just from the Audit Commission, but is supported by the LGA. Will the Minister assure us that he will bring forward detailed proposals on joint procurement as soon as possible? We hope to have them by this Thursday evening so that we can give them full and constructive consideration in Committee.

Joint procurement arrangements might address some of the concerns about the practicalities of requiring all councils to have auditor panels with independent members. As my right hon. Friend the Member for Leeds Central said, the Secretary of State considers himself to be a revolutionary, so he must be disappointed to be associated with arrangements that everyone but him sees as overly bureaucratic.

We will table amendments in Committee on the overlap between the new audit panels and the audit committees that most councils already have. My hon. Friend the Member for Hayes and Harlington (John McDonnell) suggested that all councils should be required to have an audit committee. Most councils have one already, but we should consider his suggestion further in Committee. We will also raise the practicalities of recruiting sufficient independent and appropriately qualified members for the audit committees, which were referred to by the hon. Member for Mid Dorset and North Poole. What evidence does the Minister have that there are people who are willing and able to take on that important role?

In Committee, we will also explore the removal of auditors and the purposes for which data matching can be used. As the Bill stands, those purposes do not include the prevention and detection of maladministration and error, as my hon. Friend the Member for Hayes and Harlington pointed out. We want to see that included in the Bill. We also want auditors to be covered by the Freedom of Information Act and will table amendments to that effect.

Does the Minister understand the concern that whistleblowers might feel uncomfortable approaching a private auditor that is employed by a local body or council? That is why we will propose that the audit committee should be named as a prescribed person in the Bill. I do not understand why the Government have resisted that. Perhaps the Minister will enlighten us.

My hon. Friend the Member for Hayes and Harlington highlighted concerns about corruption. I have read the important report that he mentioned. It is important that the new audit arrangements maintain independence, encourage probity, make appropriate provision for whistleblowers and ensure that it is possible to compare the relative performance of different authorities. He made wider points that we should explore further, including on the openness of council meetings, the use of commercial confidentiality and the role of scrutiny.

Perhaps the biggest disappointment with the Bill, as my right hon. Friend the Member for Leeds Central and my hon. Friend the Member for Derby North said, is that the proposed audit arrangements do not provide for the changing way in which public services are being managed and provided. The proposed arrangements require each local authority and other local bodies and public sector bodies to conduct separate audits. However, shared services, community budgets and combined authorities all demonstrate that there is a shift towards much stronger partnership working by local authorities, including with Government Departments. It is therefore a missed opportunity that the Bill focuses too narrowly on individual local authorities, rather than on arrangements that would enable auditors to follow the public pound through the system.

Many hon. Members have spoken about the provisions on local authority publicity. We support the code of recommended practice on local authority publicity and believe that it is broadly sensible. However, as my right hon. Friend the Member for Leeds Central said, there is no evidence to suggest that there are widespread breaches. No hon. Member has provided clear evidence of that today. The Government have taken no action to date under the code. Why not?

Clause 38 will allow the Secretary of State to issue a direction regardless of whether or not he thinks the authority is complying with the code. That is an extraordinary power grab that is worthy of the worst form of authoritarian government. The hon. Member for Bromley and Chislehurst revealed the true purpose of it. In seeking to support the Government, he listed a range of council publications, but gave no examples of where they had breached the code. The only common factor between the publications was that they were all from Labour-led councils. I know that in his heart he is a localist, as am I. Does he not agree that the way to deal with the problem is to fight the elections in those areas a little harder and to seek a Conservative majority, because it is clearly their political control that offends him, rather than the content of the magazines?

As for the wider controls on council publications, the Government suggest that local authority publications undermine the local press, but there is no evidence to prove that. Local papers are struggling for a variety of reasons. Indeed, as my hon. Friend the Member for Hayes and Harlington said, sometimes there is a welcome synergy between local newspapers and council papers. The Conservative-led LGA has complained, rightly, that the proposals are ill considered and not based on evidence or proper consultation—points echoed in the House of Lords by the Conservative peer Baroness Eaton, and the Liberal Democrat Lord Tope.

In my area, I have received many representations from residents in the smaller towns and villages of east Northamptonshire for whom the Nene Valley News—published, despite my best efforts, by the true blue local council—is a communications lifeline. Some residents of those villages feel so strongly about the issue that they tell me they will consider voting for me and my party for the first time because of the impact the measures will have on general well-being in those villages. That is surely not what the Secretary of State thought would follow from his nonsense claims about pocket Pravdas, which he cannot substantiate. We hope the Government will see sense when we consider the Bill in Committee, and I hope we will have the support of the hon. Member for Mid Dorset and North Poole because, as she rightly said, this is using a sledgehammer to crack a nut.

When the Minister responds, will he say whether he accepts the comments made by his colleague, Baroness Eaton, a former leader of Bradford council, that the Bill centralises powers to the Secretary of State? Will he say how many local authorities in England publish magazines more than six times a year, and will he inform the House how many times the code of practice on local authority publicity has been breached? We are concerned that the third major area of the Bill on council tax referendums adds further uncertainty to council finances at a time when—as my hon. Friend the Member for Derby North said—councils face incredible challenges, and that that could lead to further reductions in essential local services.

Clause 39 means that councils may have to hold a referendum on council tax increases because of increases in levies due to agreements made in previous years or over which they have no control. As my right hon. Friend the Member for Leeds Central said, we are deeply concerned about the retrospective nature of those changes—a point pressed on the Minister by the hon. Member for Mid Dorset and North Poole in another sensible intervention.

A year ago the Government signed city deals to improve transport infrastructure and boost local growth by allowing specific transport authorities to raise money for specific schemes. A year on, that agreement is being torn up. That undermines confidence in the whole city deal process across government, and harms the certainty on which sound financial planning and private investment relies. In short, it is damaging for our cities and our economy. As the LGA said:

“There is a risk of perverse outcomes that will put growth generating investment at risk”.

That is absolutely right, and I hope the Minister will address that issue and think again.

There are other complications. Authorities have no powers to reject levies, yet they are obliged to hold referendums because of large levy rises imposed on them by other bodies. The actions of levying bodies could lead to council tax referendums in some authorities, but not in neighbouring authorities because some levying bodies cross local authority boundaries. I hope the Government recognise the serious problems with those proposals.

The Chartered Institute of Public Finance and Accountancy stated:

“The entire burden of any referendum is actually placed on major preceptors and billing authorities despite the fact that they have no ability either to directly influence the amount of individual levies or require a body to reduce its levy as a result of a referendum.”

Does the Minister accept that including levies in the amount used to trigger a council tax referendum will jeopardise the city deals his own Government have approved? If a council tax referendum is lost and the levying body refuses to reduce its levy, what does he expect a local authority to do?

Despite serious problems with the Bill, I will end on a positive note. The Government propose to introduce two new elements to the Bill: on parish polls and transparency of council meetings. As the Minister would expect, the Government will have to answer the justifiable criticism—not least from our friends in the other place—that those proposals are being introduced rather late in the day and have not had the scrutiny given to the rest of the Bill. However, we support the intentions behind the proposals, and stand ready to play catch-up and assist with detailed scrutiny of those proposals in Committee. I sincerely welcome assurances that the Government will address the concerns raised by my right hon. Friend the Member for Leeds Central about combined authority boundaries. I hope we can do that through the Bill, but we welcome the assurance that another way will also be sought.

Finally, I thank the Minister for the helpful dialogue we have had since my appointment, particularly over the instruction to extend the scope of the Bill, and for the way he has facilitated contact with officials at his Department involved with the Bill. I hope that he is under no illusions about the many holes in the Bill, but also that he is in no doubt that the Opposition will approach Committee stage constructively.

19:24

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

Right hon. and hon. Members have raised a number of important points in the debate, and I look forward to discussing some of them in more detail during Committee as well as now. I will first respond to some of the main points raised, and then I will speak more generally and hopefully cover all the points Members have made.

A few comments have been made, not least by the right hon. Member for Leeds Central (Hilary Benn), about an audit for a modern world and authorities working together—an understandable point as we are looking to modernise the way we all work. Auditors of local government bodies and health bodies are required to comply with the relevant code of audit practice, and are used to working together across organisations in both the public and private sectors. It is right, however, that auditors must assess the body responsible for the spending, which is why the Bill is worded in this way.

The right hon. Gentleman also raised data matching, and we are sympathetic to that issue and will no doubt discuss it in Committee. The hon. Member for Corby (Andy Sawford) mentioned a sector-led procurement body. We are open to allowing the establishment of a central procurement capacity, provided—this is key—that it is led by the sector, is not mandatory, and gives local authorities the choice and opportunity to take part or appoint locally. We will deal with that in Committee.

Comments have been made about independent audit committees, or auditor panels, and the approach in the Bill gives flexibility to local authorities. A body can use its existing audit committee to act as the auditor panel if the majority is independent, or it can establish a small separate auditor panel if it is not, thereby allowing for anything that might happen later with a centrally organised sector-led body.

The hon. Member for Derby North (Chris Williamson) raised some issues, not least competition in the audit market. We are not creating new barriers; in fact, we are opening the local audit market and I hope it will develop even further. He also commented on whether council tax referendums are fair—other Members also made that point—and said that nobody wants this change. Councils such as Stockport, Liverpool and Newcastle—to name a few—might disagree with him, however, as they have all asked specifically for this change, which will put all local authorities on to a consistent footing. Currently, some local authorities undertake functions directly and in-house, and are therefore subject to referendum principles within that. Levying bodies are not, and therefore the proposals will bring things closer together.

My hon. Friend the Member for Bromley and Chislehurst (Robert Neill) did an excellent job early in this Parliament on ending the Audit Commission—the quango and the way in which it worked with the comprehensive area assessment. He has huge experience in and understanding of local government, and how the Audit Commission worked. I appreciate the time he has given me since I took office to work through some of those issues. His huge experience has been a great asset in reaching the point we have with the Audit Commission. We have managed to save councils so much in officers’ time, and therefore taxpayers’ money, over the past couple of years, as my right hon. Friend the Secretary of State was able to take through the ending of the comprehensive area assessment. My hon. Friend the Member for Bromley and Chislehurst mentioned the publicity code and referendum principles, and I will touch on those in the main part of my speech.

I welcome the support of my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) for parish polls and the modernising of transparency, as I do that of the hon. Member for Corby. My hon. Friend noted how important the council tax freeze has been for families, which is one reason why we think it so important for that freeze to be applied across the board, fairly and evenly, as I have outlined. She also mentioned statutory notices, which I will touch on in a moment.

The hon. Member for Hayes and Harlington (John McDonnell) touched on a range of issues that are probably outside the scope of the Bill. I must explain to him, however, that the Audit Commission has been contracting out a percentage of its work for some considerable time. He also touched on counter-fraud activities and outcomes, and we are clear that local government must tackle fraud. That is worth about £2 billion a year, and it is important for taxpayers that it be dealt with. We are actively supporting local government to tackle that issue, not least through the Fighting Fraud Locally strategy with the Local Government Association.

At the point of closure, the Audit Commission’s national fraud initiative will transfer in its current successful form to the Cabinet Office. We recognise the value of the Audit Commission’s other counterfoil tools and are working with it and other interested parties to develop recommendations on their future.

[John McDonnell]

May I suggest that the Minister meet Transparency International UK and go through its report? Perhaps he could offer advice in Committee after meeting that group.

[Brandon Lewis]

As a general matter of principle, I am happy to meet anybody who wants to talk about any part of my brief. I obviously extend that invitation to Transparency International UK.

On the fairness of council tax referendums, my hon. Friend the Member for Mid Dorset and North Poole rightly outlined the anger of some areas and residents when they are faced with claims of a council tax freeze but receive spiralling bills from their authority. Clause 39 specifically addresses that—it ensures that claims of a freeze are based on the bill that hits doormats rather than any half-measures.

My hon. Friend the Member for Meon Valley (George Hollingbery), who has a background in local government, spoke of his wide experience of comprehensive area assessments and gave a great outline of exactly why we need a firm ending of the Audit Commission, so there is no chance of it coming back in the format we have experienced. He touched on auditor appointments, on enforcing the publicity code, which I will deal with later, and on council tax referendums and levying bodies. He suggested a range of interesting opportunities to ensure that referendums are dealt with in a proper and fair manner for the authorities. I look forward to taking his suggestions forward in Committee.

Let me be clear why the Government have decided to proceed with the final abolition of the Audit Commission. The House has heard how our reforms to local audit will result in a more efficient audit system, with an estimated £1.2 billion of savings—I would not want to disappoint the hon. Member for Corby by not mentioning the £1.2 billion of savings. That is exactly why it is important to push forward and embed that to stop any chance of future Audit Commission mission creep.

The reforms are not just about saving money. They are about the Government’s drive to decentralise power and responsibility to local bodies, and giving local people better tools to hold bodies to account. By cutting out the middleman, local bodies will no longer be forced to foot the bill for Audit Commission costs. They will know exactly what they are paying for in their audits. Local bodies will be required to publish information about their auditor appointments and any public interest reports they receive from the auditor. People will therefore be able to find that information locally, rather than having to go to a remote central body.

The reforms improve local accountability. As many hon. Members, including Opposition Members, have said, the Audit Commission had lost its way, forcing councils to focus on Audit Commission priorities rather than priorities that matter to local residents. My hon. Friend the Member for Meon Valley outlined some of those. As a councillor, I remember sitting in meetings when officers told us what we should do—it was often to do with waste collection. The suggestions were not made because they were right for our residents, but because they ticked a box to please the Audit Commission, and the Government would punish us further down the line if we did not take that action. The Government’s impact assessment estimates that the cost to local authorities of complying with the CAA was around £25 million per year—that money could be better spent on other things that residents want and need and deserve to have delivered.

Let me reassure hon. Members who are concerned that the quality of audit will suffer. The Government are committed to ensuring that that does not happen. Private audit firms have long had a role to play in auditing public bodies. As I have said, the Audit Commission has contracted out some 30% of its audit contracts to private audit firms. Last year’s outsourcing exercise demonstrated that public audit can be carried out to the same high level but at a much lower cost to the taxpayer.

The Bill contains robust mechanisms to safeguard auditor independence. The work of the auditors remains largely unchanged and auditors will still be required to use their professional judgment to decide whether to make a report in the public interest if they believe something is amiss. To enshrine that important principle, the Bill allows auditors to recover costs for their time in making a public interest report or advisory notice. By amending existing secondary legislation, we will ensure that whistleblowers can make disclosures to local auditors directly or to the National Audit Office.

Many hon. Members have mentioned the publicity code. I want to make one point clearly at the outset: there is no change to the code. The measures contribute to the Government’s commitment to localism rather than run counter it. Given that the code is not changing, I am somewhat surprised that any hon. Member has a problem with it being put into statutory form. Opposition Members have complained that the Government have not enforced the voluntary code. By putting it in statute, we can make sure that it is enforced to ensure that taxpayers’ money is spent appropriately and properly, and not for political ends.

There have been exaggerated claims that provisions on the code will lead to central Government clamping down on, for instance, HS2 campaigning, which has been mentioned. That is nonsense. Councillors are free to campaign on behalf of their constituents. Indeed, the Government legislated in the Localism Act 2011 to give councillors the freedom to campaign. If any challenge is balanced and factually accurate, it will not contravene the code, unlike some publications. For example, Nottingham city council’s website seems unusually to mirror the Nottingham Labour party’s website. Residents might want to question expenditure on that sort of thing. If anything, the publicity code defends council communications from political interference and propaganda-pushing, as was outlined by my hon. Friend the Member for Bromley and Chislehurst, who gave a range of examples.

The Government have no intention of monitoring or censoring communications, but it is right for us to act when concerns are expressed that local authorities are in breach of a code approved by Parliament. It is certainly right to act when authorities use taxpayers’ money to fund publicity for political purposes.

[Hilary Benn]

Where is the evidence?

[Brandon Lewis]

The right hon. Gentleman keeps asking for evidence, but my hon. Friend the Member for Bromley and Chislehurst has given it to him. In addition, I suggest the right hon. Gentleman compare Leeds city council’s website with the Labour party website.

The Government are aware of the burden that placing statutory notices in newspapers can place on local authorities, and that some authorities believe there are cheaper and more effective ways of informing local people on issues that affect their lives. The Secretary of State has been clear that, in the internet age, commercial newspapers should expect, over time, less state advertising as more information is syndicated online for free. Local papers need to develop new business models to fit the 21st century, particularly as it does not make sense to cross-subsidise one industry with fees from another. However, that will take time.

The Government’s council tax referendum measure will give protection against large increases in taxes raised by levying authorities such as waste disposal, integrated transport and pension authorities. Some say that the measure is unfair. I dealt with that earlier in my speech, but let us be clear that local authorities and levying bodies can work together and have done so, both under the old Government capping procedure, and more recently through the referendum principle. Councils have long worked together to agree council tax levels. That was always the case under previous systems.

[Chris Williamson]

Will the Minister at least acknowledge that levying bodies could, if the referendum goes against the council tax increase, result in even bigger cuts in the local authorities affected? Surely he must accept that.

[Brandon Lewis]

I do not accept that. The hon. Gentleman tried to make a good argument for his point of view—he wants more councils to increase tax—but the Government believe in freezing council tax and in keeping the cost of council tax down for families. We are unlike the previous Government, under whom council tax doubled. He made the argument for letting council tax spiral yet again, but I am afraid the Government do not agree with him.

The Government have made it clear that there has been no agreement to allow excessive increases in council tax without a referendum as part of a city deal. City deals are important, but they are also subject to the referendum principles. The largest estimate for a city levy in Leeds is still well below the 2% referendum principle—it is between 0.2% and 0.9%.

The House will decide shortly whether it consents to the Government including measures in the Bill to modernise the rules governing parish polls and to increase the transparency of council meetings. At the request of the other place, we are seeking to amend the Bill to include measures on parish polls, because they need to be modernised to bring the archaic process up to date, and to ensure they provide a legitimate method for local communities to have a voice on issues that directly relate to parish matters.

The widening of the Bill’s scope creates the opportunity to tackle not only parish polls, but problems with the transparency of council meetings. Those important measures will increase local accountability, strengthen local democracy and save taxpayers money. I appreciate the co-operation of the hon. Member for Corby on the matter and how he has worked with the Government to bring the measures forward. We will doubtless have further discussions on them in Committee, but town hall doors should be open to bloggers, tweeters and those who want to film and report on meetings. We will discuss that further in a few minutes.

It is a pleasure to serve under your chairmanship, Madam Deputy Speaker—this is the first time I have spoken at the Dispatch Box with you in the Chair. I hope the House sees fit to support the Bill.

Question put and agreed to.

Bill accordingly read a Second time.

LOCAL AUDIT AND ACCOUNTABILITY BILL [LORDS] (PROGRAMME)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Local Audit and Accountability Bill [Lords]:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 21 November 2013.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Mark Lancaster.)

Question agreed to.

LOCAL AUDIT AND ACCOUNTABILITY BILL [LORDS] (MONEY)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Local Audit and Accountability Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of:

(1) any expenditure incurred by a Minister of the Crown or the Comptroller and Auditor General in consequence of the Act; and

(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Mark Lancaster.)

Question agreed to.

LOCAL AUDIT AND ACCOUNTABILITY BILL [LORDS] (Ways and Means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Local Audit and Accountability Bill [Lords], it is expedient to authorise:

(1) the charging of fees in connection with the recognition of qualifications and supervisory bodies and of periodical fees to be paid by recognised qualifying and supervisory bodies, and

(2) the payment of sums into the Consolidated Fund.—(Mark Lancaster.)

Question agreed to.

Local Audit and Accountability Bill [Lords] (Instruction)

Monday 28th October 2013 Commons Chamber

19:40

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

I beg to move,

That it be an instruction to the Local Audit and Accountability Bill [Lords] Committee that it has power to make provision in the Bill about:

(1) polls consequent on parish meetings, and

(2) access to meetings and documents of local government bodies.

The motion seeks to widen the scope of the Bill to provide for the measures to be introduced. I take this opportunity to thank the Opposition, who have offered their support for the motion. I look forward to working with them in Committee.

Modernising parish polls is a long-standing issue that was raised during the passage of the Bill in the other place by the Earl of Lytton. It was agreed to consider amending the Bill in this House to include a power for the Secretary of State to make provision in regulations to modernise the rules on parish polls. We need to define more tightly what constitutes a legitimate topic for a poll, and modernise the archaic way polls are conducted, not least to ensure that all electors in the parish have an opportunity to vote. This will allow all local people to have a say on issues that genuinely affect their parish.

On openness, we want to increase levels of transparency to make it harder for councils to make decisions out of the sight of those they serve—something hon. Members touched on this afternoon. In particular, we want the public to be able to film, blog or tweet at all meetings where they are allowed to be present. Some councils are still refusing to allow people to do this, preventing local people from using modern technology to hold their elected representatives to account. Councillors should not be shy about the public seeing the great work they do for their local communities. We have already legislated on this matter for meetings of a local authority executive. The new provisions will allow us to extend that level of openness to other council meetings, closing the loopholes that councils are using to refuse the public access.

19:42

[Andy Sawford (Corby) (Lab/Co-op)]

I welcome you to your new role, Madam Deputy Speaker. This is the first time I have spoken under your chairmanship.

I refer the House to my remarks on Second Reading on the instruction issued to extend the scope of the Bill. I repeat my thanks to the Minister for the constructive dialogue we have had in recent days. We support the Government’s intentions on this matter. We will, of course, want to look at the detail and hope there will be strong consultation with many organisations and interest groups, not least the National Association of Local Councils, which made representations on parish polls. We should also spend some time referring back to the excellent debate in the other place, led by the Earl of Lytton.

On modernising practice in council chambers, in this world of blogging we support the principle. We are all concerned to ensure that it will enhance, not disrupt, democratic proceedings. I understand the point made by the hon. Member for Mid Dorset and North Poole (Annette Brooke) that it may enable the public to turn off council meetings when they choose, but I am sure we all hope that it will encourage the public to tune in and take more interest in local democracy.

Question put and agreed to.

Business without Debate

Monday 28th October 2013 Commons Chamber

delegated legislation

Monday 28th October 2013 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Excise

That the draft Excepted Vehicles (Amendment of Schedule 1 to the Hydrocarbon Oil Duties Act 1979) Order 2013, which was laid before this House on 8 October, be approved.—(Mark Lancaster.)

Question agreed to.

European Union documents

Monday 28th October 2013 Commons Chamber

Motion made and Question put forthwith (Standing Order No. 119(11)),

Relations between the EU and the Overseas Countries and Territories

That this House takes note of European Union Documents No. 12732/12 and Addenda 1 and 2, a draft Council Decision on the association of the overseas countries and territories with the European Union; notes the progress that the UK has achieved against its key negotiating priorities in Council negotiations; and further notes the trade advantages and access to European Union funds that the Decision provides.—(Mark Lancaster.)

Question agreed to.

ADMINISTRATION

Monday 28th October 2013 Commons Chamber

Ordered,

That John Penrose and Mr Desmond Swayne be discharged from the Administration Committee and Mr David Evennett and Mr Robert Syms be added..—(Mr Evennett, on behalf of the Committee of Selection.)

Tobacco Products Directive

Monday 28th October 2013 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mark Lancaster.)

19:45

[Lorely Burt (Solihull) (LD)]

I add my welcome to your elevation to the Chair, Madam Deputy Speaker. This is the first time that I am benefiting from your wise direction; I am sure it will not be the last.

This is an opportunity to put the case for small retailers, who are caught between a rock and a hard place when it comes to the sale of tobacco. A few weeks ago, I was visited by a delegation of small retailers, a number of whom were my constituents who were supported by the publication Asian Trader. Also at the meeting, and uninvited by me, were representatives of Imperial Tobacco. I was surprised to see them and wondered what role they had to play in the proceedings. They were attending, I was told, in a spirit of helpfulness, and offered their “help” to me until I explained in no uncertain terms that I was not a friend of the tobacco lobby. However, their presence did lead me to consider the amount of influence tobacco companies have in the retail industry, and the kind of messages they are giving to tobacco retailers.

Tobacco companies have a lot of money—it is a huge industry—but as purveyors of substances that kill one in two long-term users, they do not tend to be the most popular lobbyists around. I received an e-mail from a Liberal Democrat councillor, John McClurey, who has been a newsagent for more than 30 years. He suggested that the tobacco companies were using the good names of the small retailers to lobby Parliament with their own promotional messages. He also suggested they were circulating misinformation to tobacco retailers, with the aim of scaring them into becoming a voice for tobacco manufacturers.

When I met the retailers, there was no doubt in my mind that they believed passionately in what they were telling me, but knowing the involvement of the tobacco lobby led me to re-examine objectively what they were saying in the light of wider evidence. For example, on the European tobacco products directive, my retail friends told me that banning smaller quantities of tobacco—packs of 10 cigarettes and 20 grams of loose tobacco—was wrong because it discriminated against smokers on a tight budget and smokers aiming to give up. It undoubtedly does. However, it also discriminates against minors, who are extremely sensitive to price changes. These packs of 10 cigarettes have been dubbed “kiddie packs” because they are so popular with teenage smokers.

My retail friends also believe that smuggling is a growing scourge that will be made worse by the advent of plain packaging and ever-increasing duty. According to Her Majesty’s Revenue and Customs, tobacco smuggling has more than halved in the past decade to 9% of total sales. I am not saying that 9% is not far too high, or that general statistics will help my friend Paul Cheema at his newly opened Kwik Save in Solihull if smuggled tobacco is being sold from a van near his shop. Nevertheless, despite tax hikes on cigarettes to the extent of 88% of the recommended retail price, the amount of tobacco smuggling has continued to decline. The tobacco multinationals’ concern about illicit trade needs to be evaluated in the light of their having paid billions in fines and payments to settle cigarette-smuggling litigation in the EU and Canada. They are being prosecuted for smuggling their own products, so their trying to unsettle small retailers, when some of their number are perpetrators of the problem, sounds a little hollow.

Is “plain packaging” not a misnomer, given that recent EU votes have confirmed that 65% of the packaging surface will have to carry writing and pictures warning prospective customers of the health dangers of the product? Other distinctive markings will also be required. The Government are therefore confident that plain packaging will be no easier to counterfeit when it comes under the scrutiny of government officials.

The European Parliament has voted for a ban on packs of 10 cigarettes; for a minimum weight of 20 grams for “roll your own” cigarettes; for banning characterising flavours, such as menthol, which are also particularly attractive to young people and women; and, as I just mentioned, for 65% of the surface carrying words and pictures informing people of the dangers of smoking. That is not in dispute. It has also voted against plain packaging; against the ban on slim cigarettes, which we know are particularly attractive to younger smokers and women; and against the ban on sales displays.

We await the final recommendations of the Government’s two consultations this Parliament, and we know that they are waiting for the results of the Australian plain packaging experiment, but will the Minister say how long she considers a reasonable time to wait before it can be evaluated? When will the Government report be published, and can the Minister give any insight into the Government’s thinking on plain packaging, slim cigarettes and sales displays? As I said, retailers are stuck between a rock and a hard place—between the health lobby and the need to trade—and so are the Government, but any indication she can give of what the future is likely to hold would be much appreciated.

The EU recently voted against prohibiting the purchase of e-cigarettes alongside tobacco and against registering it as a medicine. That is a sensible measure. Many former smokers attest that e-cigarettes have helped them to give up when nothing else had worked. Furthermore, making them a medical product would likely have increased their cost and reduced their availability. What is the thinking in the Department of Health on e-cigarettes? Will we follow the EU in not medicalising them, and if so, what product safety standards will be put in place?

Finally, I want to discuss proxy purchasing. Interestingly, there is no age in the UK at which the smoking of tobacco products is illegal, if children can get their hands on them. The legal age for purchasing a packet of cigarettes is 18, and retailers can be subject to serious penalties if caught selling tobacco to under-18s. Proxy purchasing—when an over-18 buys cigarettes for an under-age smoker—is illegal in Scotland, but not in England and Wales, so in the latter, the retailer can be prosecuted, but the proxy purchaser cannot.

Aman Bhura, from News and Booze in West Bromwich, says that now is the time for the Government to take the lead in the enforcement of illegal sales of tobacco. He says that

“we retailers are being forced to become the policing arm of the government... Responsible retailers will have staff trained to detect proxy selling, but it is an act which is extremely difficult to judge and prove”.

It is clear that tobacco retailers are more than prepared to measure up to their responsibilities in respect of proxy selling to under-age youngsters, but without a legal constraint to back them, what can they do? Will the Government not strengthen their arm by making proxy purchasing illegal, as it is in Scotland? Will the Minister consider changing the law to make proxy purchasing of tobacco products illegal in England and Wales?

I will leave the final word to Councillor McClurey:

“I make more profit from selling a 50p packet of chewing gum than a packet of 10 cigarettes. Sale of cigarettes represents 50% of my turnover but only 14% of my gross profit. If my customers stopped buying cigarettes and bought a packet of chewing gum instead I would be a wealthier shopkeeper.”

I look forward to the day when our retailers make a much healthier profit, when they sell fewer cigarettes and more of other products that have a better sales margin. That would be a good deal and a fair deal for everyone.

19:55

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

It is a pleasure to see you in the Chair, Madam Deputy Speaker. I congratulate the hon. Member for Solihull (Lorely Burt) on securing a very timely debate. I enjoyed her thoughtful speech. I suspect that there will be things on which I cannot respond in quite the level of detail she would want, but she has posed all the important and current questions, and I will try to cover as many of them as I can.

We all agree that smoking has an enormously harmful impact on health. Nearly 80,000 people die in England every year from smoking-related illnesses, and the Government are obviously committed to reducing the number of those premature deaths—it is a priority for us—so this is a welcome opportunity to debate tobacco control. I will first take a moment, however, to highlight the UK’s international reputation on tobacco control. Successive Governments have demonstrated a commitment to improving public health through effective tobacco-control policies, and a wide range of measures have contributed to our long-term success. Over the past decade, complementary domestic and EU legislation has contributed to a decline in smoking prevalence among both adults and young people, and in England today the rate of adult smoking prevalence is under 20% for the first time. But clearly we want to keep making progress.

Since the 2001 tobacco products directive, there have been several scientific and international policy developments on tobacco control, an obvious one being the World Health Organisation’s framework convention on tobacco control, to which every EU member state and the European Commission are parties. It has become necessary to update the current directive, however, and that work is ongoing. The revised directive, to which the hon. Lady devoted much of her speech, proposes new requirements across a range of areas, including: the ingredients and emissions of tobacco products; labelling and packaging; product traceability and security features; cross-border distance sales; and novel and nicotine-containing products. The UK Government welcome the revised tobacco products directive and believe that the proposals will be good for public health across Europe, particularly in helping to prevent children from taking up smoking—it is of concern to us all that the vast majority of smokers started before they turned 18.

Our key objectives for the directive include: bigger pictorial health warnings; ending tobacco with characterising flavours, which the hon. Lady described, including menthol and fruit flavours; and requiring nicotine-containing products such as e-cigarettes to be regulated as medicines. During the negotiations, my predecessor and officials worked to secure adequate freedom for member states to introduce domestic policies within the scope of the directive that aim for a higher level of health protection where justified. That is important because we want to retain the freedom to do more if we want to. For example, we need the ability to introduce standardised packaging if we wish to do so.

[Ian Swales (Redcar) (LD)]

Does the Minister share my concern that some packaging is clearly aimed at children—for example, there is one with a Lego-style pattern called “14”—and women, through pastel colours and so on?

[Jane Ellison]

Yes, I share that concern. I saw a presentation only last week with some of those adverts and imagery. As I said, it is a key priority of ours to prevent children and young people from taking up smoking, so anything that might contribute to their taking it up is extremely worrying.

The UK’s support for the general approach agreed at the June Health Council was important in securing the qualified majority needed to avoid losing hard-won negotiated improvements to the text of the directive. Hon. Members will also be aware that the European Parliament has been scrutinising the proposal, and this is obviously where we have had some recent pushback in some areas. We were pleased to see that, on 8 October, the Parliament agreed with the Council and voted to ban packs of cigarettes with fewer than 20 sticks, to increase health warnings to 65% of the front and back of packs, to make pictorial warnings mandatory throughout the EU—as they are already in the UK—and to prohibit characterising flavours.

It should be noted that the Council and the European Parliament rejected the Commission’s proposal to ban slim cigarettes, so that will not form part of the final revised directive. As the new Minister, I made inquiries into why that was the case, and I understand that there was not enough support among EU member states or parliamentarians for such a ban. We in the UK felt that we had to go with the majority to ensure the progress of the directive, as it will be good for public health overall. That was a pragmatic decision. Like the hon. Lady, I believe that this package of measures will help to reduce the number of young people who take up smoking in the UK.

We are currently considering the detailed amendments that the European Parliament would like to make. We were disappointed that the Parliament did not support the regulation of nicotine-containing products as medicines. We believe that the medicines regulatory regime, applied with a light touch, is the best fit for these products. Although I cannot say too much more about that now, we recognise that there is a lively ongoing debate on that subject, and it is one that we are engaged in. It is also vital that we maintain momentum on the overall negotiations over the coming months, so as to finalise the directive as soon as possible.

The hon. Lady devoted some time to considering what the tobacco products directive will mean for small retailers. As a Back Bencher, I was co-chairman of the all-party parliamentary retail group, and I heard many of the same representations that she mentioned. I recognise those concerns. We recognise that some of the proposals will have impacts on tobacco retailers in regard to the range and pack size of tobacco products that they will be able to sell. During the negotiations, as with all of our tobacco control measures, we continue to consider the impacts on all areas of society, including businesses large and small.

I share the hon. Lady’s doubt that introducing the proposed revised directive, if and when agreed, will have any immediate or drastic effect on small retailers. As she said, retailers face an ongoing challenge to diversify the range of products that they sell so that they are not over-dependent on tobacco sales. British retailers are, and always have been, the most innovative in responding to consumer needs and diversifying. The earliest any new requirements would be likely to take effect in the UK would be 2016, meaning that shopkeepers have time to start making changes now.

The hon. Lady made some interesting points on illicit tobacco. Like her, I have heard that some tobacco manufacturers and retailers believe that certain measures in the proposed directive could drive more smokers to purchase illicitly traded tobacco products. We are not aware of any peer-reviewed and published studies that show that that would happen. However, we are not complacent when it comes to counterfeit or non-duty-paid tobacco products in the UK. The illicit tobacco market is complex and decisions by individuals to get involved in purchasing illicit tobacco depend on a range of factors. The proposed directive envisages a Europe-wide tracking and tracing system for tobacco products, the details of which we are still negotiating in Brussels. The European Commission says that that will reduce the amount of illicit products in the EU. Security features against counterfeiting will also allow consumers to verify the legal status of the products. The hon. Lady suggested that we were perhaps paying insufficient attention to the security features on the packaging, because they are often not very plain at all.

I am glad that the hon. Lady has pointed out that the illicit market in cigarettes and roll-your-own has diminished significantly since the launch of the first Government tobacco strategy in 2000, with the mid-point estimate of the tax gap for illicit cigarettes decreasing from 21% in 2000-2001 to 9% in 2012-13, for example, according to Her Majesty’s Revenue and Customs data. The UK’s success in reducing illicit tobacco is in no small part due to successive Governments’ commitment to, and investment in, enforcement, and that remains a key part of our policy. We should also see further progress on illicit tobacco on a global scale when the new framework convention on tobacco control protocol on illicit trade is implemented.

The hon. Lady made some interesting points about proxy purchasing. Obviously that is something that, as a new Minister, I have just begun to look at, and I was glad that she explored some of the arguments. I want to emphasise the valuable contribution that the majority of retailers make to ensuring that legitimate tobacco products are sold according to the law, including by not selling tobacco to people under 18 years old. Retailers get frustrated that we hear only about the occasional instances of poor practice that hit the headlines, and that decent, ordinary retailers do not get any credit for the way in which they uphold the law. I want to place on record my thanks to all those retailers who make strenuous efforts to uphold the law and who do not sell tobacco products to children.

I sympathise with the difficulties retailers face in ensuring that they do not make sales to under-age people. I also understand why some retailers feel that buying tobacco on behalf of a child should be an offence. However, we need to think carefully before introducing a proxy purchasing offence. I understand that the supply of cigarettes to children is a problem, but an offence of proxy purchasing would not necessarily tackle the wider problem of supply.

[Lorely Burt]

Will the Minister tell us whether any lessons have been learned from Scotland’s introduction of an offence of proxy purchasing that might be transferrable to the rest of the UK?

[Jane Ellison]

I was going to say that we are interested to see what will happen in Scotland. It is relatively early days yet, but I am certainly interested in looking at that.

Many children who smoke get their cigarettes from friends and family, and from other children who share cigarettes in parks and playgrounds. An offence of proxy purchasing would be unlikely to stop family members or friends giving cigarettes to young people. The offence was introduced in Scotland, where there is a slightly different regulatory regime, as part of a package of measures. Also, we cannot draw a comparison with alcohol because the regulatory regimes for the sale of alcohol and tobacco are different.

Enforcement of a good deal of tobacco control legislation, including age of sale, is the responsibility of local authority trading standards officers. I have asked questions about the capability of enforcing any such rules introduced. Currently, the Trading Standards Institute, while supportive in principle of any additional measures to tackle under-age access to tobacco, has told us that experience with the alcohol offence shows that there are likely to be difficulties enforcing a proxy purchase offence for tobacco. In practice, it is sometimes difficult to prove the offence and effective enforcement would entail surveillance of shopper and retailer behaviours, which can be time consuming and resource intensive. As I say, I am aware that, since 2011, there has been a proxy purchasing offence in Scotland, which was brought in as one of a number of changes—and we will keep a very close eye on how it has been implemented.

Having heard what the hon. Lady has said tonight, I would encourage Members who have evidence about the potential impact of introducing an offence for proxy purchasing to write to me, particularly if they have feedback from their local trading standards officers about the realistic potential for effective enforcement.

Let me finally touch on a couple of further points that the hon. Lady raised. As I have mentioned, the tobacco products directive does not seek to introduce standardised packaging, but it would allow the UK to proceed with that if we wanted to do so. The Government published a summary of the consultation responses, issued a written statement earlier this year and responded to an urgent question. As the hon. Lady knows and as I mentioned several times at Health questions last week, the Government have decided to wait before making a final decision on standardised packaging. The policy remains under very active consideration and the Government have not ruled out its introduction. We are assessing all the information available to us from Australia and elsewhere. I cannot give the hon. Lady a time frame, but I repeat the fact that the policy is under very active consideration. Some interesting information is coming in from around the world, not just from Australia.

We want member states to have the flexibility to make further progress on domestic tobacco control measures in certain key areas, potentially going beyond the new directive, and we have been helping to shape the final text of article 24 to try to achieve that as an objective. I hope the hon. Lady agrees that it is sensible to see what we can learn from other countries’ experience, but it is hard for me to speculate about what different impacts might be seen and when.

It has been a key strand of the Government’s commitment to reducing the take-up of smoking among young people that the display of tobacco has been prohibited in large shops such as supermarkets since April 2012. That display consultation happened under the previous Government. In April 2015, legislation extending the covering up of tobacco in all retail outlets will come into force.

I have endeavoured to try to cover all the points that the hon. Lady raised in her very thoughtful speech. As she recognises, the topicality of this debate is notable; many of the issues are being debated here and in the European Parliament. We are very much engaged in that debate. I look forward to hearing what other Members think and to hearing further from the hon. Lady on the important subject she has raised.

Question put and agreed to.

20:11

House adjourned.

Written Statements

Monday 28th October 2013 Written Statements

Monday 28 October 2013

EU Foreign Affairs Council

Monday 28th October 2013 Written Statements

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

My noble Friend the Minister of State for Trade and Investment, Lord Green of Hurstpierpoint, has made the following statement:

The EU Foreign Affairs Council (Trade) took place in Luxembourg on 18 October 2013.

Sir John Cunliffe (UK Representative to the European Union) and I represented the UK on all the issues discussed at the meeting. A summary of those discussions follows.

Financial Responsibility for Investor State Dispute Settlement

The presidency reported that their compromise text had been adopted by member states during the previous week and would now form the Council position for negotiations with the European Parliament and the European Commission.

Eastern Partnership Summit

The presidency highlighted the importance of strengthening the EU’s economic links with Eastern Partners. They would therefore include deep and comprehensive free trade agreements with Ukraine, Moldova and Georgia as part of wider association agreements with those countries and present these at the Eastern Partnership summit in November. Member states agreed that, provided the relevant political obligations were met, the Ukraine agreement could be presented for signature and those with Moldova and Georgia for initialling.

Adoption of the EU/China and EU/ASEAN Negotiations on investment

Council adopted the presidency’s compromise mandates on both the China investment agreement and Association of South-East Asian Nations (ASEAN) investment agreement without debate.

Declassification of the EU/US Transatlantic Trade and Investment Partnership (TTIP) negotiating Directives

The presidency reported that there was no consensus in favour of declassification of the TTIP mandate. Therefore the mandate will remain a classified EU document.

State of play on preparations for the IX World Trade Organization Ministerial Conference (Bali, 3-6 December 2013)

The Commission reported accelerated progress in Geneva since September; new WTO Director-General Roberto Azevedo was bringing energy to the negotiations. EU Trade Commissioner Karel De Gucht underlined that considerable effort would still be required to secure agreement at December’s ministerial conference in Bali. In the debate the UK was joined by other like-minded member states (Sweden, the Netherlands, Denmark, Malta) in urging flexibility in order to secure a deal and in highlighting the economic benefits to the EU.

China anti-dumping measures on wine

The Commission felt the case was politically motivated, providing the Chinese with balance in the face of other high-profile disputes and the upcoming investment agreement negotiations. Progress had been limited since the summer, when China agreed not to introduce duties before the end of the formal investigation period in June 2014. At the EU/China high-level economic and trade dialogue the Commission would insist on starting formal negotiations, and would push hard to reach an early resolution.

Lunch: TTIP and Japan negotiations; Canada

Ministers received an update on both the TTIP and Japan negotiations over a private lunch which otherwise concentrated on the Canada deal which was being simultaneously concluded by President Barosso and Canadian Prime Minister Stephen Harper in Brussels. This long awaited conclusion was unanimously and warmly welcomed.

“The Future of Apprenticeships in England: Implementation Plan”

Monday 28th October 2013 Written Statements

[The Minister for Skills and Enterprise (Matthew Hancock)]

Today the Government have published “The Future of Apprenticeships in England: Implementation Plan” and the associated “Guidance for Trailblazers”.

Apprenticeships are at the heart of the Government’s drive to give people of all ages the skills employers need to grow and compete. They already deliver strong returns for the economy, for employers and for apprentices. A record 1.5 million apprenticeships have been started since 2010.

Following the Government’s endorsement of the employer-focused vision in Doug Richard’s independent review of apprenticeships, and our subsequent consultation on his recommendations, the implementation plan sets out policy, process and time scale for reforming apprenticeships in England.

Our reforms will ensure that apprenticeships become more rigorous and more responsive to the needs of employers. We will improve the quality of apprenticeships by introducing higher expectations on English and maths grading to incentivise apprentices to strive to be the best and an increased focus on assessment at the end of an apprenticeship to ensure full competence.

We are putting employers in the driving seat, by giving them responsibility for developing short clear standards and the high-level approach to assessment that will replace long and complex frameworks, to ensure they better meet the skills needs of employers. We also intend to announce our future approach to apprenticeship funding later this year.

Trailblazers will lead the way in implementing these new apprenticeships, ensuring that employers are involved in their design and that we deliver them in a way that works. We will learn from trailblazers lessons for the future delivery of all apprenticeships. The first trailblazers will focus on vital occupations in the following sectors:

Aerospace

Automotive

Digital Industries

Energy and Utilities

Electrotechnical

Financial Services

Food and Drink Manufacturing

Life Sciences and Industrial Sciences

In total, more than 60 organisations are already involved, including large and small businesses and professional bodies. Together they already had more than 13,000 apprentices start in 2011-12

Copies of the implementation plan and guidance for trailblazers, including a full list of the organisations involved, are being placed in the Libraries.

Local Accountability

Monday 28th October 2013 Written Statements

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

Later today, the House is considering opening the way for the Government to introduce amendments to the Local Audit and Accountability Bill that will take forward proposals to give the press and public new, stronger rights to film and report council meetings.

Subject to parliamentary approval, the legislation will enshrine in the law the right of residents, bloggers and journalists to report, blog, tweet and film council meetings in England.

Last year, the coalition Government introduced secondary legislation to open councils’ Executive meetings to greater scrutiny, and I actively encouraged councils to do the same with their meetings of committees and full council. In August, I asked the planning inspectorate to open up their hearings fully to the public. However, many councils have slammed their doors shut rather than opening them up, clinging to old-fashioned Standing Orders or spurious excuses like “health and safety”.

A recent survey from the TaxPayers’ Alliance revealed an alarming number of councils in Yorkshire and Lincolnshire who were still keeping democracy behind closed doors. Some councils had even banned local residents from recording, blogging and tweeting at council meetings. Consequently, the Government are to move amendments to primary legislation to help open up all council meetings.

An independent local press and robust public scrutiny is essential for a healthy local democracy. We are taking action against “town hall pravdas” which are undermining the independent free press, but I want to do more to help the new cadre of hyper-local journalists and bloggers.

It was a Private Member’s Bill by Margaret Thatcher which introduced the substantive right to attend council meetings back in 1960, building on earlier legislation from the Liberal Government of 1908. It is right that we now bring these provisions up to date with the digital age. Councillors should not be shy about the good work that they do.

This measure will help bloggers and tweeters, as well as journalists, unlock the mysteries of local government and make it more transparent for all. My Department is standing up for press freedom.

Government amendments will also seek to improve the archaic rules over parish polls—allowing for example, longer polling hours, postal votes and polling cards—responding to the debate of the Bill in the House of Lords.

The Bill will also abolish the residual parts of the Audit Commission; protect local press from taxpayer-funded town hall propaganda sheets; and ensure that local taxpayers have greater say over council tax levies imposed by bodies with a minimal or no public presence.

Subject to parliamentary approval, these measures will apply to all councils in England.

The coalition Government have abolished top-down inspection like comprehensive area assessment and is scrapping the Audit Commission, and we have given councils more power. But it is essential that local people and local media are able to hold their councils to account. Local accountability and local transparency is essential for localism to thrive.

City Deal

Monday 28th October 2013 Written Statements

[The Minister of State, Cabinet Office (Greg Clark)]

Following the successful completion of the first wave of city deals in July 2012, with the “Core Cities” the Government committed to work with a further 20 cities and their wider areas to negotiate a second wave of city deals in October 2012.

These cities (the next 14 largest cities and the six cities with the highest population growth) are in the process of negotiating the devolution of specific powers, resources and responsibilities required to deliver locally-determined economic priorities.

Over recent months I have been in negotiation with the Reading, Bracknell Forest, Slough, West Berkshire, Windsor and Maidenhead and Wokingham local authorities and the Thames Valley Berkshire local enterprise partnership (LEP) and I am pleased to inform the House that a number of proposals will take effect as the Thames Valley Berkshire Local Enterprise Partnership City Deal.

The Thames Valley Berkshire Local Enterprise Partnership City Deal aims to improve the ability of young people in the area to take up the jobs that are being created by local businesses.

The city deal will:

Bring together local and national investment in order to ensure every young person has the opportunity to undertake the right training, improve their skills, find an apprenticeship or get a job.

In addition the LEP will work with local businesses to develop a joint approach to supporting new and growing businesses.

The LEP expects these arrangements to support new opportunities for 4,500 people in the area.