New Clause 11 — Repeal of Section 2A of Local Government Act 1986

Part of Local Government Bill — [2nd Allotted Day] – in the House of Commons at 9:29 pm on 10 March 2003.

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Photo of Edward Davey Edward Davey Shadow Spokesperson (Office of the Deputy Prime Minister), Shadow Minister (Olympics and London), Liberal Democrat Spokesperson (Olympics and London), Liberal Democrat Spokesperson (Office of the Deputy Prime Minister) 9:29, 10 March 2003

The Minister may have made an important point for those people who will read the report of our debate, which shows why we needed more time to discuss those particular clauses. The understanding of many people in local government, having read the Bill, is that the powers under clause 93 with respect to charging link to powers in clause 95 with respect to trading. If he is saying that local authorities could get involved with and charge for some marginal activities without setting up a company structure, that is welcome clarification. We need more time—possibly an Adjournment debate or a debate elsewhere—to explore other aspects of those clauses. Perhaps some fears held by people in local authorities could be put to rest.

Let me make one other observation, which represents a real concern for local authorities. It involves how the comprehensive performance assessment categories have been tied to freedoms in the Bill, especially with respect to trading. The concern is that a local authority could set up a company to trade, working in partnership with the private sector and the other partners, only for a future assessment under the CPA framework to change its category. That would prevent it from trading, because different freedoms and flexibility would apply and old freedoms would be taken away. If that is to be the position in law, it will create great uncertainty when a company to trade or a partnership is established. That could prevent those partnerships and that trading from happening in the first place.