Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I beg to move amendment No. 85, in

clause 23, page 12, line 20, at end insert—

'(1A) If the grant or a part of it is made in connection with the discharge of functions in connection with spatial planning, such a grant shall be made by Order'.

Mr Joe Benton (Bootle, Labour)

With this we may discuss amendment No. 86, in

clause 23, page 12, line 21, after 'grant', insert

'shall be subject to a condition that no part of it shall be used for any purpose in connection with campaigning for or against any question to be put in a referendum pursuant to section 1 or in anticipation of such a referendum and otherwise'.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The amendments are intended to constrain the funding for regional chambers in a way that I shall now outline. The Bill gives the Secretary of State the power to

''make a grant to any person in respect of expenditure incurred in connection with the activities of a regional chamber.''

The language is slightly curious. Perhaps the Minister will explain who the lucky ''any person'' might be. The Government seem to be contemplating making payments to persons, as distinct from the chamber itself. Perhaps they envisage the Secretary of State paying the milkman direct, rather than a regional chamber paying its own milk bill. No doubt he will be able to clarify that.

Amendment No. 85 deals with the making of such grants in connection with the discharge of functions relating to spatial planning. The Minister will correct me if I am wrong, but I take it that that is the principle area that is envisaged. The White Paper from which he has been liberally quoting is entitled ''Your Region, Your Choice'', but there is no choice for regions in relation to the transfer of administrative functions from county councils to the currently unelected regional authorities, as designated by the Government.

It is probably appropriate that the Planning and Compulsory Purchase Bill is making progress on the Floor of the House even as we speak. That Bill will transfer powers from existing county councils and other authorities to regional chambers. I assume that the Minister will confirm that the grant-making power has been primarily designed with that purpose in mind. If the Government get their way in relation to the that Bill, it will be necessary to fund the activity that it covers. The amendment is intended to ensure that any such grants are made by order, so that there will be an opportunity for parliamentary scrutiny. They should not be made in any manner that means that they cannot be considered by Parliament in the proper way.

Amendment No. 86 addresses a separate point. It deals with the possibility—the Minister will doubtless describe this as paranoia—of grants being made to regional chambers for the purpose of, or in connection with, campaigning in a referendum campaign, a pre-campaign, or a campaign to persuade the Government to conduct a referendum campaign. We can assume that, by and large, regional chambers will be advocates of progress along the Government's chosen regional

route. It would be entirely wrong for public money given to the chambers to be used for campaigning. If there is to be a campaign, it must be conducted by private protagonists using their own funding. It is bad enough that central Government will clearly use our money to mount a partisan campaign in the run-up to a referendum; we must ensure that the regional chamber does not have a similar opportunity to use public funds.

In relation to amendment No. 86, I hope that the Minister can confirm that it is not the intention that the clause will grant public funds for campaigning purposes, and if so, I hope that he will let the Committee know what safeguards he intends to put in place to ensure that funds are not used to liberate other funds that could be diverted to mount such campaigns.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

Before I come to amendments Nos. 85 and 86, I shall pick up the issue raised by the hon. Member for Runnymede and Weybridge, who highlighted the fact that the clause starts with the words

''The Secretary of State may make a grant to any person''.

Lest the hon. Gentleman's paranoia extend enormously, and lest there be real anxiety about funds being channelled to consultants such as Streeter, Streeter and Streeter, and other potential beneficiaries, I should make something clear. The provision is designed to cover circumstances in which chambers may be constituted in their own right, as is the case with South East England Regional Assembly Ltd., or may have an accountable body—often one of the local authorities in the region—that acts as the recipient. The provision is an entirely appropriate framework that allows the transfer of funds to one such body, rather than requiring it to go to the local authority in all cases.

There is precedent for the provision. For example, section 126 of the Housing Grants, Construction and Regeneration Act 1996, which has already been referred to, opens with the words,

''The Secretary of State may, with the consent of the Treasury, give financial assistance to any person in respect of expenditure incurred in connection with activities which contribute to the regeneration or development of an area.''

Amendment No. 85 would mean that any grant that the Secretary of State made to the regional chamber in connection with its role as a regional planning body could be made only by a statutory instrument, which would be subject to affirmative resolution. It is difficult to understand why that level of scrutiny is considered necessary for relatively small sums, although a great number of grant-making powers are not subject to such onerous conditions.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The reason is that the money is incremental. The function is currently being discharged by authorities and bodies. I do not see any provision for clawback of money from them, so the Government are proposing additional public expenditure, and Parliament should be able to scrutinise that.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

As the hon. Gentleman will know, there is already a regional dimension to the planning process. The development of the policies that are being debated in the Chamber at this very moment involves the functions under discussion being regularised, with regional spatial strategies being prepared by each region. Clearly, that will be the responsibility of the elected regional assemblies where they exist. Elsewhere, we believe that it is right that that should be the responsibility of the chamber.

The Secretary of State's function is not a new one, as such. It is a rationalisation and part of the streamlining of the planning process, in order to help avoid the proliferation of tiers of planning that are a cause of the inherent delays in the planning process and have caused so much anxiety and frustration.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Let us be clear. When the Minister mentions the rationalisation of the process, he is saying that money is already financing the process. This is not a new process; it is ongoing, as he has said. The Minister proposes to give additional money to a new body to take over functions, but he does not propose to claw back any of the money that is currently being spent. In my book, the additional money is new money and it seems appropriate that Parliament should scrutinise the payment of it.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I have no doubt that, had we not included this provision, we would have been accused by the Opposition of stealing money from county councils as part of a process of rationalisation. This is another classic case. This Opposition wish to attack us and, whatever we do, we cannot win.

Our proposals are a sensible way of discharging the planning process efficiently and consistently, region by region. The Opposition's fears about county councils are greatly misplaced. We are trying to streamline the processes and create a more expeditious planning system than the present one. However, I will not stray into territory that is being debated on the Floor of the House.

The resources will help the regional chambers, which, in every region, we intend to be the planning body, to carry out their important role in preparing revisions to regional spatial strategies. It is right that the power to pay grant should be made available to the Secretary of State without the need for an annual approval process; it is a relatively small amount of voted money.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

How much money are we talking about?

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I cannot give a precise figure at the moment but I will write to the hon. Gentleman to give him the details. However, the sums are relatively small. They will be determined by colleagues who are responsible for the planning process.

Amendment No. 86 would rule out grant being used for either a yes or no campaign in a referendum. Its effect would be similar to that of the existing funding agreements, which are issued to the regional chamber or its accountable body. Funding agreements contain a standard condition:

''The accountable body may not use any grant paid under this funding agreement for expenditure falling within any of the following categories—

(a) expenditure on activities of a political or exclusively religious nature e.g. campaigning for, publicising and promoting the case for an elected regional assembly''.

It would be extremely unlikely for a chamber to publicise the case against an elected regional assembly, but, if it wished to do so, that would also be caught by the condition, as it refers to activities of a political nature.

I entirely agree with the sentiment that underlies the amendment, but I cannot agree to the amendment because it is not necessary. Of course it would not be right for any regional chamber to use Government grant for political ends, such as promoting yes or no campaigns. That is why we have included that standard condition in the funding agreements.

Mr Graham Stringer (Manchester, Blackley, Labour)

As always, I am listening to the Minister with great interest; he is explaining things that I did not know before. Will he consider the case of the North West Regional Assembly? It seems to be campaigning for an elected assembly: writing in support of an elected assembly in the local press, and appearing on local media to say that elected assemblies are a good idea, is campaigning. As I understood the Minister, that is already prohibited.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I was just about to talk about what we have already done in respect of the North East Assembly. I am happy to do exactly the same for the North West Regional Assembly.

When the North East Assembly wrote to the Department for advice on using its grant to promote a yes campaign, we replied in the following terms:

''The Department's view is that expenditure in support of a 'yes' campaign would be overtly political and is thus expressly excluded by the terms of the funding agreement.''

I would be more than happy to write in similar terms to the North West Regional Assembly if my hon. Friend feels that that is necessary. However, I suspect that the assembly will already have been made aware of the terms of the agreement.

Mr Jim Knight (South Dorset, Labour)

I hope that this point will not be regarded as mischievous. The Bill distinguishes between an interest in holding a referendum and an interest in a regional assembly. Would it be in order for a regional chamber to seek to generate interest in a referendum?

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

That is a very good question. If regional chambers form the view that there is a large measure of interest in their region—no doubt there will be a response to our soundings—it would be perfectly proper for them to advocate the holding of a referendum. That would be subsequent to their assessment of the degree of interest in the region in having one. It would be perfectly reasonable. Explicit campaigning for a yes vote would be a political activity that fell foul of the restrictions.

Mr Graham Stringer (Manchester, Blackley, Labour)

I would like the Minister to give a specific answer to my question. Is arguing the case for an elected regional assembly outside the powers of the current regional assemblies?

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

The point that I was making to my hon. Friend is that it would be inappropriate for assemblies to use Government grants that are made under the existing arrangements and which would be made under provisions in this part of the Bill for that purpose. If assemblies that are made up of bodies choose to use funds raised under different terms for such purposes, that is entirely a matter for them. However, we would not approve the use of grants—public money delivered by the Government for the purposes set out in our grant conditions—for political activities such as campaigning. That would be precluded on the basis that I outlined.

Mr Graham Stringer (Manchester, Blackley, Labour)

Are paid officials of the regional assembly allowed to write to local newspapers, talk to local media and say, ''We want a regional assembly''? Is that within their power?

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

If such officials were paid from funds raised privately from sources other than public funds and they were carrying out the agreed policy of the regional assembly, they would not be acting improperly. We are debating the use of public funds made under specific grant to those bodies from the Government. We have made it clear that it would be improper for such funds to be used for the purposes described. I hope that that satisfies my hon. Friend.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

In answering the question from the hon. Member for South Dorset (Jim Knight), the Minister suggested that campaigning for a referendum would be an acceptable use of public funds, but campaigning for a particular outcome once a referendum campaign was under way would not. I draw the Minister's attention to amendment No. 86, which is deliberately phrased to prevent both.

In seeking to suggest that amendment No. 86 is redundant, the Minister has demonstrated only half that. He has satisfied me that it is the Government's intention, at least, that the use of such funds should not be allowed during a referendum campaign. However, he appears to be telling the hon. Member for South Dorset that it is acceptable to use them for campaigning for a referendum.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

Let me make it clear that the main purpose of such funds is to enable the chambers—or assemblies, as they are often called—to carry out their principal functions, which are to oversee the work of the regional development agencies and to undertake appropriate activities to help with the analysis of how the region can improve its economic performance and other related activities. Those are the principal functions.

In the course of the soundings that are going on at the moment, if the chamber or assembly forms a view that there is a real interest within its region in having a referendum on whether there should be an elected regional assembly, it will be perfectly proper to bring that to the attention of the Government. That would not be campaigning for one outcome. I do not envisage that much expenditure would be involved, but, for the sake of clarity, the chamber would have a role to play.

We have consulted chambers along with Members of Parliament, Members of the European Parliament

and others. We seek the views of all representative bodies in the region, and it would be perfectly proper for the assembly to form a view on the degree of interest in a referendum and to make that view known to us. That would not conflict with the principal objection, which is to the use of public money for political campaigning. I hope that the hon. Member for Runnymede and Weybridge understands the distinction.

Mr Graham Stringer (Manchester, Blackley, Labour)

What advice would the Minister give a regional assembly if the private sector and several Labour councillors left it, if it were aware that the regional development agency was not in favour of it and if the Conservative party in the region was not in favour of it? The assembly would know that to be true because the bodies would have told it or withdrawn from it. Given that you would have failed to give an objective assessment of how the Deputy Prime Minister assessed interest, what advice would you give to the assembly about how to assess interest in its region?

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I am sure that you would not want to give advice, Mr. Benton. My hon. Friend is asking what advice I would give. It would be that it was right and proper for the assembly in the north-west region—as in any other region—to undertake its own research to establish the extent of interest throughout the region. Any action should not depend on the partial view of limited organisations such as the Conservative party, which would not necessarily reflect the settled will of the people of the north-west region. I accept that it would be appropriate for the assembly to take soundings and to relay its views to Government, and we would expect that to happen.

Mr Graham Stringer (Manchester, Blackley, Labour)

The only point that I was making was to ask what would happen if the North West Regional Assembly were wholly supported only by the Liberal Democrats. In such circumstances, how would the Minister advise the assembly to assess the direct interest in the region, given its immediate contact with political parties, with the exception of the British National party, which represent 99.9 per cent. of people in the north-west?

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I hope that my hon. Friend was not implying that the BNP represents such a high proportion. It is important to clarify that lest there be any doubt at all.

It is right and proper that the regional assembly should take soundings. We encourage bodies to draw on their membership and their wider contacts to inform any representations that they make to us. We said clearly in our guidance that we will attach greater significance to responses that indicate that wider constituencies have been involved in determining the response of specific organisations. It is not for me to tell my hon. Friend or the North West Regional Assembly how to go about that, but I would expect soundings to be taken. Assemblies will include representatives of every area in the region and will have ways of sounding opinion in different regions. After taking a balanced view on the strength of opinion, they will be able to form a view on whether

there is an appetite for holding a referendum, which is the question on which we will want advice.

I hope that I have established that amendment No. 86 is unnecessary and that amendment No. 85 is unduly restrictive. I hope that the hon. Member for Runnymede and Weybridge will agree to withdraw the amendment.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

We were told that amendment No. 85 was unduly restrictive because it dealt with small amounts of money but the Minister did not tell us how much that is. He did not argue against my contention that the amounts are additional public spending. That represents the first example of the financial burden that an additional tier of government will impose. Nothing will be saved at the lower level, but additional costs will be incurred at the new regional level.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I apologise to the hon. Gentleman. I have now received advice that the sums involved are less than £6 million. There is to be a transfer from the revenue support grant for local authorities, with any extra money coming from the Office of the Deputy Prime Minister's voted expenditure. We are talking not about large sums of money, but the necessary resources to ensure efficient delivery of the regional planning function.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Now is probably not the forum to pursue with the Minister the mechanism for clawback that he has in mind. To many people, £6 million would seem a considerable sum. I urge the right hon. Gentleman not to be too casual in his approach to the small change in his departmental till. How much of that £6 million will be represented by clawback? He has not said how much net additional public expenditure is anticipated to be involved?

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

The money comes from sums that are allocated to local government, and it is for local government to pass them on to enable the regional function to be conducted. The regional function has been discharged largely by regional bodies comprised of local councillors who, in turn, receive contributions from local authorities. I am referring to a transfer of that function and those sums direct to the regional chambers.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I take the Minister's reply to mean that no net additional public expenditure will be involved. As the current regional planning forums will be supported by officers of the county or district councils, I wonder whether it will be so easy for them to shed their cost base immediately or whether the clawback of grant moneys to them to fund the new regional structure will be onerous. I assume that the same people will not be seconded to carry on doing the work. If the same people are so seconded, it will be like a game of dressing up. The people will be the same centrally, have the same money and undertake the same job, but will wear different hats. I thought that the Government were suggesting that something more fundamental would happen. I shall not pursue that avenue because I am sure that my hon. Friends who have the pleasure and privilege of serving on the Standing Committee when it discusses the Planning

and Compulsory Purchase Bill will want to take up that matter.

The Minister dismissed the need for amendment No. 86 on lobbying during a referendum campaign by referring to the Government's standard grant agreement. I can see no reference in the Bill to the grant being made under such an agreement. Indeed, there is reference to grant being

''made on such terms as the Secretary of State thinks appropriate''.

Will the right hon. Gentleman give the Committee an unequivocal assurance that all such grants will be made on the terms of the standard grant agreement and that that agreement will maintain the prohibition on political campaigning? Will he also tell the Committee whether he would be willing to review that grant agreement to include a prohibition on lobbying activity in anticipation of a referendum? He said that no particular costs will be involved, but I can envisage a region engaging expensive consultants to move public opinion within the region, as I can envisage it wanting to persuade the Deputy Prime Minister of the state of public opinion. I consider that that would be an inappropriate use of public funds and I sense that the Minister does, too.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I thought that I had already made clear that our funding agreements contain a standard condition, which is that the accountable body may not use any grant paid under the agreement for expenditure relating to campaigning for publicising and promoting the case for an elected regional assembly. It is clear that that would be caught. The only issue for which I have made an exception is a legitimate soundings exercise by a regional assembly to ascertain the degree of interest in its region in holding a referendum. That would be a perfectly proper activity, but I do not envisage that it would come with a large price tag attached.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The Minister confirms, in a roundabout way, that under the standard grant agreement it would not be acceptable for a regional chamber to expend money on lobbying for the Secretary of State to conclude that there was a sufficient level of interest to order a referendum in the region. If that is what he is saying, I am satisfied. However, the gap in his otherwise faultless reasoning is that whatever the standard grant agreement might say, the Bill does not say that that agreement must be used. The Bill states:

''The grant may be made on such terms as the Secretary of State thinks appropriate.''

I was inviting the Minister to give an absolute commitment that a grant would always be made on the terms of the standard grant agreement and not otherwise, or as the Secretary of State thinks fit. Were the hon. Gentleman able to give that assurance, my concerns would be answered.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I can give the hon. Gentleman an assurance that these conditions apply to all grant agreements that we issue to regional assemblies. That will continue to be the case. I hope that that gives the hon. Gentleman the assurance that he wants. We do not consider it appropriate for regional assemblies to use this public money for campaigning or political

activities, and they should not do that. I did, however, give a caveat that they might have other sources of funds to which different criteria would apply. I do not just give a commitment on that to the Committee. That condition is written into all our funding agreements with regional assemblies and it will continue to be the case.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I am not a lawyer, so I will not assume that the Minister was choosing his words carefully. I will take what he said at face value. However, what the Minister did not say was that under subsection (2) all grants would be given under the terms of the standard grant agreement. The hon. Gentleman referred to the fact that in practice that had always been the case, but the Secretary of State has a wide discretion in the Bill.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

And that will continue to be the case.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

With regard to what the Minister said from a sedentary position, and in view of the need to make progress, I will accept that undertaking at face value and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 ordered to stand part of the Bill.