Clause 20 - Directions
Local Government Bill
3:15 pm

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

I beg to move amendment No. 45, in

clause 20, page 8, line 19, leave out 'in writing' and insert 'made by regulation.'.

We have had this argument more than once in the short time I have been on the Bill. Primary legislation is one thing; regulations by secondary legislation are a lesser thing; and directions, at a Secretary of State's whim, lack any form or scrutiny or control by this democratically elected Parliament. While I can understand the need for directions in dire circumstances, on the whole they should be avoided. Hence, we suggest in our amendment that the directions should be made by regulation. Will the Minister tell us what he expects the directions to contain, and provide some examples. That is important, and people reading the Hansard report of our proceedings would expect that.

Mr Christopher Leslie (Parliamentary Secretary, Cabinet Office; Shipley, Labour)

Amendment No. 45 deals with the three powers to issue directions. Clause 2(2) allows the Secretary of State by direction to waive any national borrowing limit for an individual authority. Under clause 4(2), the Secretary of State could impose a local borrowing limit on an authority by direction. Finally, under clause 16(2)(b), a direction could be used to allow revenue expenditure to be used as capital expenditure. The powers are essential to the Bill and the operation of the chapter. Directions are issued by writing a letter to an authority. They enable action to be taken quickly, but also sensitively, in individual cases. However, the amendment would remove them and require regulations to be made instead. That process could lead to unacceptable delays and reduce flexibility.

I asked officials in my Department to look for other examples in previous local government legislation to see whether there were precedents for powers to direct. Lo and behold, they discovered at least 16 direction powers, not least in those provisions enacted between

1980 and 1997 under legislation passed by the previous Administration. Section 40(6) of the Local Government and Housing Act 1989 issues directions that particular expenditure may be treated as capital expenditure. Taking the example set by the previous Administration, we believe that in certain circumstances direction powers are important. The clause defines how the directions would operate.

Mr Andrew Turner (Isle of Wight, Conservative)

It does not take a great deal of prescience to ask officials to look back and answer the Minister's question, if that person is the Minister. What takes a little more prescience is to ask officials to look back and anticipate the questions that may come from the Opposition. The Minister has not answered the question that was asked by my hon. Friend the Member for Cotswold, which was on what occasions directions of that sort have been used Why was it necessary for them to act so rapidly that the regulatory procedure was inappropriate?

Mr Christopher Leslie (Parliamentary Secretary, Cabinet Office; Shipley, Labour)

In the debate on a previous clause, when we were looking at one of the direction powers, I gave specific examples of capitalisation of spending by Plymouth and Thurrock councils in the financial year 1996–97. The previous Administration issued directions, not least at the request of the local authorities, to assist them in some of their reorganisation costs. I answered the hon. Member for Cotswold by giving examples of the sort of circumstances in which the three powers in the chapter might be used for specific local authority cases. I have covered some of the issues that may arise in the clause. It is not an unusual clause, and it is not unusual to have directions in a Bill. I hope that the Committee will accept that.

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

There is one unintended consequence of what the Minister is saying. By referring to the Housing Act 1989 and its six powers of direction, he demonstrated to the Committee that Governments with large majorities tend to pass sweeping and all-encompassing legislation. That is not necessarily the best action to take. It may be that too large a majority is not the best thing for democracy. Having said that, the clause is straightforward, as is the amendment. However, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 20 ordered to stand part of the Bill.