My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(Lord Rooker.)
My Lords, the purpose of this amendment is to remove the requirement for a statutory revaluation cycle from the Bill. We have two objections to a statutory revaluation cycle. First, we question why revaluation is necessary at all. Secondly, we question why it should be undertaken on the basis of a statutory cycle rather than in accordance with perceived need.
We had a long debate about revaluation in the Grand Committee. We queried why the Government had opted for a 10-year cycle. There is, it turns out, no particular magic about a 10-year cycle—it is simply what appears to be a convenient administrative period.
Statutory revaluations will take council tax further towards being solely a property tax, which is not what it was intended to be. Council tax was originally devised as a tax which was part property based and part service based. As the Minister is aware, wholly property-based taxation has proved unpopular in the past. Moving back towards the rates is not the way to go. Given that council tax is part property tax and part service tax, logically we might argue that there should also be a statutory valuation cycle for the costs of providing public services in each local authority area. Inflation in the costs of providing services has also risen differentially over the past 10 years across the country and had a huge impact on local authorities, especially those around London.
If the Government suggest that that is taken into consideration through the operation of the financial formulas, then we could point to the way in which grant was distributed last year, which clearly demonstrates that the Government can load the council tax burden differentially on different parts of the country in accordance with their own policy dictates. That is, in fact, precisely the effect of revaluation. It is clear that house prices have risen much faster in London and other parts of the South of the country than they have elsewhere. Since 1991, house prices in some parts of London have gone up by 175 per cent, compared to an average rise across the country of 90 per cent. The effect of that will be that council tax payers in these parts of the country will see their council tax bills rise dramatically as their houses move up one or even two council tax bands.
Let us remember that there is very little correlation between the differential rise in property value and the rise in average incomes—a fact recognised by the Government in their White Paper. So ability to pay becomes a significant issue. Then there is of course the double whammy effect. Not only will council tax payers have to pay more because they have moved up a band or two but, precisely because of that movement, large amounts of grant will be shifted away from London, the South West, the South East and the East of the country to the Midlands and the North. That is likely to create further upward pressure on council tax bills.
The net effect of the measure is that people in the parts of the country that the Government do not favour will pay much more council tax than those elsewhere. For example, the New Policy Institute calculates that following a revaluation, 75 per cent of people living in London will pay more council tax than 90 per cent of people in the North of the country. It is simply not the case that 75 per cent of Londoners are better off than 90 per cent of people living in the North. That is unfair and the effects will lead to a great deal of dissatisfaction around the country.
Let me now turn to the question of a fixed revaluation cycle. As my noble friend Lord Caithness explained in Committee, the original decision to set property bands was an attempt to avoid the expense and time-consuming process of revaluation. Revaluation is undoubtedly an expensive and time-consuming operation. We certainly would not wish to see a revaluation carried out unnecessarily.
What, then, is the purpose of a fixed time period? No one says, "It has been a few years since we last had a valuation; let us have another one". The purpose of a revaluation is to correct grossly disproportionate movements in the housing market. It may be that over a 10-year period those movements are negligible, as they were for much of the 1950s and 1960s, and that going through the expense of a revaluation cycle is unnecessary. However, it may be that house prices are so volatile that it would make sense, so far as this Government are concerned, to have revaluations much more frequently than that. Why, then, do the Government not move away from the concept of a fixed time period for revaluations and instead consider fixing revaluation to the actual movement of house prices in the market?
If that is, indeed, what the Government are seeking to address, why do they not fix in statute that once the divergence in house prices across the regions has reached a certain level, a revaluation has to take place within the next two years? It seems to me that the Government's approach lacks imagination, is old-fashioned and is unfair, particularly to people in the East, the South East and London. I beg to move.
My Lords, I wish it were that simple. In essence property taxes ought to be simple to administer and collect. They certainly were when we had rates. We are trying to reach the happy position of transparency and clarity in the way in which the tax works.
Clause 78 inserts a new Section 22B into the Local Government Finance Act 1992 creating a statutory cycle for council tax revaluation in England and Wales. We think that is a wise course of action. We think that it is necessary and that is why we have the clauses in the Bill and why we intend to press ahead and seek parliamentary approval for the clauses.
We have not done this without giving the matter thought. Neither have we done it without talking to people. We have consulted extensively on the issue of revaluation. We have had a Green Paper, a White Paper and finally last summer a draft Bill and then a Bill brought before your Lordships' House after going through another place. Perhaps it would make sense if I quoted some of the reactions to the draft Bill to help focus minds.
The Society of County Treasurers said that it,
"generally welcomes the proposed changes to council tax, including the revaluation of property values every 10 years".
"welcomed the proposed changes to the council tax" and went on to say that,
"we support the intention to hold a revaluation in 2005 . . . and regular revaluations at least every ten years thereafter".
The LGA has repeated its support for revaluation in its briefing on the Bill dated 4th July.
There were also responses from both the Conservative and Liberal Democrat Groups at the LGA. The Liberal Democrats, to their credit, said,
"fixed cycles for revaluation are helpful", while the Conservative Group leader, Councillor Gordon Keymer, wrote in June 2002 that:
"We support the intention to hold a new revaluation in 2005 and regular revaluations thereafter".
I wonder which Conservative Party I am talking to. Is it the one of which the noble Lord, Lord Hanningfield, is a member, or is it that of Councillor Gordon Keymer, a leading Conservative LGA spokesman so far as I can recall?
The Government have a clear position on statutory revaluation. Judging from the kind of reactions we have had from experts in local government, I find it rather surprising that noble Lords opposite want to remove the clause creating a statutory revaluation cycle. There will be some difficulties with it and no doubt there will have to be some very careful thought given to the way in which it works but it is clear and transparent and people understand the process. Property values shift over time and as we are in the business of having a property tax, there are swings and roundabouts in that process. However, we believe that this is the right course of action and that it is right to make it plain within the Bill. Having said all of that, I hope that the noble Lord will withdraw his amendment.
My Lords, before the Minister sits down, and with the leave of the House, I wish to draw his attention again to the survey that my noble friend Lord Hanningfield mentioned, which has been carried out for the Association of London Government. I declare an interest as a member of a London authority.
It is abundantly clear from the survey that what is important is how a revaluation is conducted—the amendment we are discussing ensures that we debate this matter—and what its effect is. The survey's findings are absolute dynamite with regard to London. Property values will inevitably go up substantially but the shift of resources in terms of the revenue support grant between London and the South East—
My Lords, I am grateful to the noble Baroness for that brief intervention which sounded more like a speech to me. Perhaps it was a brief intervention.
I believe that only this week we received the ALG survey. We recognise it simply as a useful contribution to the debate. Knowing the veracity with which the ALG approaches these matters, and knowing its chief official very well, as does the noble Baroness, I am sure that this is its opening shot in a campaign. One respects it for that. We shall obviously study the survey closely and reflect upon it. As I say, it is a useful contribution to the debate but it does not undermine the case for having revaluation and revaluation cycles.
My Lords, I thank the Minister for those comments. Before I was a member of this House—I am wearing my LGA hat—I remember meeting the then Minister of State for local government, Hilary Armstrong, and talking about revaluation. I agree that the LGA as a body has talked about revaluation. Hilary Armstrong said that no way would the Labour Government make the same mistake as the Conservative government and have a revaluation as that led to the community charge/poll tax as a result of the tremendous variation and changes after revaluation.
I also remember the noble Lord, Lord Rooker, saying in Grand Committee that he did not want to make the same mistakes as the Conservative government. Here the government are falling into the biggest trap of all with revaluation. Having begun to assess what a revaluation means, having seen Sir Robin Wales, the leader of the ALG, this week, and having done more work ourselves on the effects of revaluation on great chunks of the country, we feel that much more thought needs to go into this before we agree to a blanket revaluation. Therefore, we feel that we should test the opinion of the House.
moved Amendment No. 72:
Page 42, line 27, at end insert ", provided that such change does not alter the ratio between the top and bottom band.
( ) The power under subsection (4A) shall not be used to alter the ratio between the top and bottom bands set out in subsection (1).""
My Lords, in moving Amendment No. 72, I shall speak also to Amendments Nos. 73 and 74. The amendment would ensure a measure of protection to homeowners from steep increases in council tax, along the lines discussed in the previous amendment. For the first time, council tax levels have now breached an average of £1,000. We have reached a situation in which steep, year-on-year rises in council tax are becoming unacceptable.
I sincerely believe that, on top of the steep rises we have seen this year, there is a danger that the whole system could be brought into disrepute by changing the structure of the council tax substantially. I appreciate that the amendments would move beyond the original 1992 legislation by imposing a limit on the band-ratio differentiation. I shall explain why we are proposing the safeguard.
As I pointed out in our discussion on the previous amendment, when it was established, council tax was part property tax, part tax on services. There was a great deal of debate about that in Committee, but council tax was introduced on that basis, and the structure of discounts built into the system indicates the tax's double aspect.
It would therefore not be right, or in conformity with the principles under which council tax was established, simply to replicate in the council tax ratios the difference in banded house prices. The fact that the council tax pays, in part, for services must act as a drag on the growth of bands or on the increase in ratios between them. That is only logical and I think we can all sign up to it.
We all know that council tax is regressive. Its impact on people on a low income is greater than its impact on people on a high income. I accept that as a fact. What I dispute, and it is an extremely dangerous assumption, is the supposition that those people living in more expensive properties are necessarily those with the highest levels of disposable income.
In many parts of my own county, and I am sure in other places across the country, it is the elderly, who have worked hard all their lives to buy a nice house, who occupy some of the largest properties. However, they are also the group with the lowest levels of disposable income in the county.
We have to be careful, therefore, about assuming that the unfair, regressive nature of the tax can be remedied by increasing the amount paid by people living in large properties. It was also suggested in Grand Committee that people in the South East were benefiting unfairly from the current council tax structure. Let us not forget that although we have a common structure of council tax bands, the amount that people pay in each band varies across the country.
Across the South East last year, there were huge council tax rises—17 per cent in Essex; 18 per cent in Surrey; 18.3 per cent in Suffolk; 19 per cent in Hertfordshire and over 20 per cent in East Sussex. As we know, even higher rises were seen in parts of London. The Government have already made clear their intention to shift the tax burden on to homeowners in the South East through their adjustments to the grant distribution mechanism. Our amendment would achieve some measure of protection to prevent the further penalisation of those homeowners.
We should also bear in mind that we live in an age when mortgage companies seem to be prepared to lend more and more money against smaller incomes. It may be that people living in large houses are actually carrying relatively high levels of debt. The value of property seems, from a number of angles, to be an unsafe proxy for the ability to pay and we should therefore be cautious about changing the structure of the tax system.
As I have said on previous occasions, I am not fully wedded to the existing ratio. However, it would be helpful if the Government were to introduce a ceiling ratio mechanism. At the same time, when there is already so much unrest about the levels of council tax, it would be helpful if the Minister could reassure people that there will be no move to increase the existing band ratios. I beg to move.
My Lords, I shall return briefly to the survey. I know that the Minister has not seen it, but it is extremely important. One issue that it addresses is the impact of the introduction of more bands. It has been suggested in the debate that if there were higher bands that would be more helpful to those in lower bands. However, it has now been pointed out that that would not be helpful at all and would not soften the blow for anybody. In London the average council tax bill would go up and the potential loss of grant would be very substantial indeed. It is estimated that London could lose more than £400 million to the North and the North West and that the impact of the increase in council tax could be very serious. There needs to be a careful review of the number of bands and the ratio between them. One of the points that we have made is that the ratio should remain at the same level as it is now.
My Lords, it is like an all-us-southerners-stick-together day. It is an unfair way to introduce the Government's response to the amendment, but, first, I am not here to speak for London and, secondly, I know nothing about the survey. I have not seen any of its results. I am here to speak for fairness for council tax payers. The present system is not completely fair, as we all know. I agree with very much of what the noble Lord, Lord Hanningfield, said.
It would seem simple merely to change the ratio, but if that is predicated on the assumption that people who live in big houses have big incomes, that is wrong and it would blow up in one's face. The noble Lord is absolutely right. There is no correlation between disposable income and the size and value of one's property, for the very reason that he gave; namely, that elderly people have invested their life savings and income in property, knowing that they would live on a lower income. Making the changes can appear seductive, but one makes them at one's peril if one ignores those kind of circumstances.
However, the amendment would remove the powers to change the three-to-one ratio. Most council tax payers do not have a clue what we are on about. They may know what band they are in; they may see six or seven bands on their council tax bill and they may know they are in the lower band. However, by and large, they do not see anyone else's council tax bill and, in general, most of their neighbours will be paying the same kind of figure. Houses do vary in a street, but, by and large, the same kind of figure is being paid. It will never cross their minds that the person who is living in a property that is worth £300,000 will not ever pay more than three times the council tax that the person in the lowest property band—up to £40,000—is paying. They will say, "Hang on a minute. There is a big difference between £300,000 and £40,000. It's rather more than three to one, for a start". The ratio is artificial.
It reminds me of the metaphorical ghost of the noble Lord, Lord Heseltine. He was quite unabashed when he introduced the council tax. It was the great fix, at the end of the poll tax under the noble Baroness, Lady Thatcher. He was charged with coming up with a solution to the poll tax. He came in waving his papers like "peace in our time". He was quite unabashed about the reason for the three-to-one ratio, and that was that he did not want the rich to pay too much. I paraphrase what he said, but he was quite open about the reason for the capping. It is not a capping to help poor people; it is a capping to help, by and large, those in bigger houses, notwithstanding the point that there is no direct correlation with disposable income.
We discussed the matter in Committee and I do not want to go into further details. However, there would be a problem if we were to accept the amendment. We would not be able to change the ratio to reflect more closely the relative values of bands and we will not know what they will be until a revaluation takes place.
We have not yet decided whether we will change the ratio, but it does not make sense to limit our powers in this area, especially as we know that the existing ratio does not reflect the relative spread of values. Obviously, when a revaluation takes place, the differential changes that have occurred in the country will result in different figures.
Amendments Nos. 72 and 74 would mean that the Government could not make significant reforms to the banding scheme. They would limit the way in which we could operate the bands to prevent the creation of new bands at the top end. I understand that noble Lords are concerned about the exercise of these powers, but constraining them in this way is not a sensible way to proceed.
Any change to the banding schemes, whether this be in revaluing the bands, adding new bands or changing the ratio to the bands, must be made by an order that is subject to the affirmative resolution in the House of Commons. That will provide the proper parliamentary scrutiny for a change in the local taxation system.
Amendment No. 73 seeks to give the Secretary of State the power to introduce sub-national differences in council tax bands. As we have said on a number of occasions in this House and in another place, we already have sufficient powers in the existing Local Government Finance Act 1992 to introduce regional banding if we choose. The powers to change council tax bands, or the proportions between them, are exercised by an order under Section 5 of that Act.
Section 113(1) of that Act makes it clear that powers to make orders under the provisions of that Act, including Section 5, may be so exercised as to make different provision for different cases, or different descriptions of case, including different provisions to different areas or for different authorities. Therefore, potentially massive change could take place under the legislation and I presume that the provisions in the 1992 Act were originally made in that Act and have not arrived as a result of later amendments.
The facility to make changes was therefore built into that Act, but the changes were not made because it was early days. I fully accept that the council tax was new. It was a quick-fix solution for disposing of the poll tax without returning to the rating system. There would be considerable difficulties and restrictions if we were to accept the amendments, but we have no plans to change the ratio of 3:1 and any such changes would be contemplated only after examining the relative changes following revaluation and the necessary research. In that I include social research, economic research and, I suspect, political research.
My Lords, I thank the Minister for that reply. His final comment about political research was a wise one. I remember as a young councillor going to a meeting addressed by Margaret Thatcher and attended by about 1,000 people. People were virtually screaming against the rates because they had become such an unpopular tax. We talk now about the unpopularity of the poll tax/community charge, but we forget that the rates were extremely unpopular with a great bulk of the population. That is why the Government came up with that idea.
I believe that we are coming to the end of the council tax. There is a growing group of retired people—it is called "Support the Retired"—which is spreading like wildfire across the South and the East. I have been summoned to a large meeting in eastern England in two or three weeks' time to defend the outrageous levels of council tax. Perhaps the noble Lord, Lord Rooker, might like to come with me.
We are moving this series of amendments because careful thought must be given to an alternative to the council tax. Nick Raynsford, the Minister for local government, has instituted work on the different systems of revenue for councils, but that is not for today. We shall return to the subject on Third Reading, but I beg leave to withdraw the amendment today.
moved Amendment No. 76:
After Clause 80, insert the following new clause—
"COUNCIL TAX APPEALS
(1) Schedule 11 of the Local Government Finance Act 1988 (c. 41) (tribunals) is amended as follows.
(2) After paragraph 11(1)(a) there is inserted—
"(aa) an appeal which includes an issue of valuation arising out of a decision or order which is given or made by a tribunal on an appeal under section 23 above, shall be referred to the Lands Tribunal;"."
My Lords, in Committee, my noble friend Lord Caithness tabled a probing amendment which sought to correct an unfair anomaly that exists to frustrate any council tax payer from appealing against council tax assessment on anything other than a point of law.
Currently, once an appeal has been made to the valuation tribunal, a council tax payer is prevented by Schedule 11 to the Local Government Finance Act 1988 from appealing against a decision of the tribunal on anything other than a point of law to the High Court. Valuation tribunals are not "expert" tribunals. They are composed mainly of lay members and do not have valuation experts. Although the lay members perform the same role as do magistrates in that they are experts on their own, it means that a council tax payer cannot put his case to someone who is a professional in council tax.
It is proposed that instead the council tax payer should have the opportunity to appeal to the Lands Tribunal on valuation grounds. I beg to move.
My Lords, Amendment No. 76 seeks to provide an appeal route for decisions that have been made by a valuation tribunal in respect of council tax. This matter was expertly raised by the noble Earl, Lord Caithness. He kindly wrote to my noble friend Lord Rooker about it and we give notice that following today's considerations we will be replying in full to that correspondence.
There is a difference between council tax and non-domestic rates when it comes to appeals on decision by valuation tribunals. I appreciate that this lacks symmetry, but that was a conscious decision on the part of the previous administration at the time the council tax was introduced. We consider that the distinction is still valid.
It might aid our debate if I quote what the noble Lord, Lord Strathclyde, said on the matter on 27th January 1992, when the Bill, which became the Local Government Finance Act 1992 was then in Committee. While discussing the equivalent provisions for Scotland, he said that,
"valuation appeals under the council tax will essentially be very simple, relating as they will only to questions of capital value. That is a very different matter from some of the arcane and complex rating issues which are the special responsibility of the Lands Valuation Appeal Court. We do not, in other words, envisage that the specialist knowledge and experience of the Lands Valuation Appeal Court will be required in order to determine council tax valuation appeals".—[Official Report, 27/1/92; col. 1154.]
That was how the previous administration saw the position.
While Amendment No. 76 does not seek to provide for an appeal to the Lands Valuation Appeal Court, which is a Scottish court, similar principles apply. The Lands Tribunal in England, like the Land Valuation Appeal Court in Scotland, has specialist expertise in matters of land valuation.
The key point here is that council tax does not require the detailed specialist valuation expertise of the Lands Tribunal. Council tax valuations are to bands of valuations and are capital values, not rental values. There is a big difference. We agree that there needs to be a mechanism for appeals on points of law, but this is properly to the High Court, and we have that mechanism. We are not convinced that there need to be any other grounds for appeal of a valuation tribunal decision to another body.
Perhaps in taking on board those comments, the noble Baroness will feel happy to withdraw her amendment.
My Lords, I thank the Minister for his reply. It dealt with the kernel of the problem but still leaves a question. The kernel of the problem is that the only appeal that a council tax payer who has a problem with the valuation tribunal decision can make is to the High Court on a matter of law. That seems to be eminently inequitable. A person will probably find it enormously difficult to find a position of law in relation to capital value. Therefore, I do not agree with the Minister that there is no need to find a better appeals system. However, for today's purposes, I beg leave to withdraw the amendment.
moved Amendment No. 76A:
After Clause 84, insert the following new clause—
(2) In paragraph 8(4) (approval of mayor's final draft budget by the assembly), for the words "at least two-thirds" there is substituted "a majority""
My Lords, this is different. We did not deal with this matter in Committee and I am sure that your Lordships will feel far more cheerful about considering some completely new material.
The purpose of the amendment is to correct a curious imbalance in the powers of the Mayor of London and the Greater London Assembly on the crucially important matter of the final approval of the budget for London. It is true that the mayor is elected, but so are the members of the Greater London Assembly. Their role as the elected representatives of the various parts of London is to scrutinise the work of the mayor and to hold him to account—not least on behalf of some of the many areas of London that the mayor rarely visits.
The assembly is a democratic body with a democratic mandate and a democratic responsibility. Yet Schedule 6 to the Greater London Authority Act allows the mayor, in effect, to bypass the Greater London Assembly and impose an unamended budget with the support of only one-third of the members of the GLA. Although the assembly can propose amendments at an earlier stage, Schedule 6 requires a two-thirds majority to amend the final budget.
I cannot conceive that the House of Commons would agree to a situation where a budget could be secured with the support of only 220 out of 659 Members of Parliament. Both the House and the country would regard that as ridiculous, yet, as I understand it, that is what happens with regard to the mayor's powers in the Greater London Assembly. With the support of a minority of assembly members—nine out of the 25—in only one party out of four represented, the mayor can impose a budget. That is an odd sort of democracy, especially in a system that is supposed to be partly proportional.
The problem associated with that is that the mayor has not used that freedom terribly wisely. He has taken many opportunities to increase spending, and the precept has become a major part of Londoners' lives. Spending has increased enormously since the Greater London Assembly was set up, and 17.6 per cent of each council tax bill in London now goes to the mayor. There is nothing that Londoners or the people they have elected to represent them, either in local boroughs or, more relevant to this amendment, in the GLA, can do about that so long as the mayor has the support of just nine assembly members.
I believe there is a strong case for removing this anomaly and for giving the assembly greater power to control the mayor and to force him to carry support from at least half the elected members. I beg to move.
My Lords, again, I declare my interests as a member of the Greater London Assembly and also as the current chair of the budget committee, which today is having to meet without me, although I am sure that it is scrutinising thoroughly what the mayor has been doing.
I am aware that the Conservative Party's candidate for the mayoral election next year announced that he would end the proportional voting system for members of the assembly. However, it seems to me that having that system in place provides a very good check and balance and a good mix, as it were, for the job that members of the assembly must do.
However—I may surprise the noble Baroness here—I agree that with regard to the budget it would be better to have the proportion that she proposes rather than the two-thirds/one-third mix, which is in place at present. The mayor's budget is the only matter on which the assembly has, in effect, a veto, and I believe that it would be preferable for the mayor to have to persuade rather more than one-third of the members of the assembly of the rightness of his proposals for each budget. Therefore, I support the noble Baroness on that issue.
However, I do not support the manner in which the noble Baroness presented the personalisation of the issue. Perhaps that is not really part of the argument; I do not know. She talked about the current mayor as though he will always be mayor. I ask the noble Baroness, Lady Hanham, not to encourage him—he will not be mayor for ever! However, as I said in debate on an earlier amendment, the solutions of the Conservatives, the Liberal Democrats and, indeed, the Labour Party are not the same. But on the issue of a 51 per cent vote, I support the amendment.
Section 87 of, and Schedule 6, to the Greater London Authority Act establish the roles of the mayor and assembly in deciding budget requirements for the GLA and all its functional bodies. The GLA's budget must be finalised by the end of February each year. The first stage is for the mayor, having consulted the assembly and the functional bodies about their relevant component budgets, to draw up a draft consolidated budget. The mayor then consults the assembly about the draft budget before presenting it to the assembly at a public meeting on or before 1st February. The assembly may approve the draft, or amend it, by simple majority vote before returning it to the mayor.
The mayor then prepares a final draft budget and presents it to the assembly at a public meeting before the end of February. If the final draft does not include amendments that the assembly made to the first draft, the mayor must give reasons. The assembly will then either approve the final draft by simple majority, or amend it by a two-thirds majority. The budget, as amended, will then be the authority's budget for the coming year.
The separation of powers between mayor and assembly is central to the GLA's budget-setting process. The budget-setting procedures are intended to be sufficiently flexible to accommodate the assembly's need to play a part in the formulation of policy and the determination of the mayor's priorities. They also allow the assembly to influence the levels of expenditure on the different functions and, hence, to influence the level of the council tax precept. But, because the budget is the principal tool for delivering the mayor's strategies, it is important that the procedures do not provide the assembly with unreasonable powers to amend the progress of the budget.
It is clear that the amendment would fundamentally alter the balance of power between mayor and assembly envisaged in the GLA Act, making it much easier for the assembly to override the mayor's budget. In practice, the existing arrangements have allowed the assembly to exert effective influence by causing the mayor to reduce his initial budget proposals. In any case, the Government's view is that, only three years into the GLA's existence and before the first mayoral term is complete, it is much too early to consider making fundamental changes to the new governance arrangements in London. Moreover, I believe that it could be argued that it would be wrong to make piecemeal changes to the statutory arrangements without considering the bigger picture.
The balance of power between mayor and assembly was proposed after much careful research into the working of mayoral systems in other countries. In particular, because the mayor is elected as the executive by the people of London, it is right that he or she should be in the driving seat. However, the mayor should not have the ultimate power to determine the budget against a two-thirds majority. That is the balance under the Act, and we believe that it remains a sensible one.
I appreciate that we are probably moving into a period of campaigning on these issues. I can see the value, particularly for noble Lords opposite, in bringing this amendment as part of their campaign for a change next year. However, we need to look longer term and think about the structures and how they work. My simple appeal today is to give this longer. Let us see how it works over time and learn from the experience of it. We should also benefit and reflect on the experience that this structure has brought, having learned from other mayoral systems in other countries.
We are happy with the current position. We appreciate that this causes difficulties for some. The balance of power has to be right—and it is right at the moment—to enable the mayor to drive through his strategies. It may change in future years. But, in electing the mayor, these strategies have been by and large endorsed by the people of London.
My Lords, I thank the Minister for his reply. I do not think that the Local Government Bill was brought forward at this stage as part of a campaign. But it is the only measure where one can raise the question of the tensions against the mayor's overweening control. It was certainly not as part of a campaign that this amendment was tabled. It was an opportune moment to re-examine what is in the Greater London Act and the powers associated with the mayor.
One of the difficulties has always been—I believe that the noble Baroness, Lady Hamwee, has to some extent agreed—that the Assembly's scrutiny position over the mayor is not as strong as perhaps other people would wish it was. One thing that has become apparent over the years since this new system was introduced is that there probably is not enough tension against the mayor by those who are providing a scrutiny role. It is very difficult for the London boroughs to affect what the mayor does. The mayor's budget is imposed on London boroughs. Therefore, it would seem to be far more sensible to have more tension against the mayor's budget proposals which are, after all, probably the only proposals over which anyone can hold him to account.
I want to reiterate my point that this was not a campaigning point. It has nothing to do with that; the Bill was a vehicle to move the amendment. If the Local Government Bill had not been here, there would be no question of this amendment or this matter being raised. But it has been for the purposes today. I beg leave to withdraw the amendment.
My Lords, Amendment No. 79 amends Clause 88, which deals with housing and homelessness strategies. It is a probing amendment. I hope that the Government will be able to use it as a basis for giving assurances about the priority that should be given to homelessness by local authorities, and particularly the development of effective homelessness strategies.
I am grateful to Shelter for its assistance with the amendment and, indeed, for bringing the matter to our attention. Sections 1 to 3 of the Homelessness Act 2002 require local housing authorities to carry out a review of homelessness in their area and to develop a strategy for tackling it. They must publish the strategies by July of this year.
The statutory requirements place a strong emphasis on partnership and multi-agency working, with specific duties on social services departments to assist local housing authorities in developing the strategy.
Clause 88 puts local housing strategies on a statutory basis. In practice, these requirements are similar to those that local housing authorities are already carrying out on a non-statutory basis. The Explanatory Notes to the Bill make it clear that the local housing strategy document will in future form the overarching framework within which the authority should consider other policies on more specific housing issues.
There are obviously benefits in rationalising the number of strategies and allowing them to be merged in a single statement. What concerns Shelter—I ask the Minister to respond to this—is that the provisions in the Bill should not be seen as a signal that homelessness, and in particular the development of effective homelessness strategies, should be given less priority.
I hope the Minister can give us a number of assurances. First, perhaps he will make it clear that the Government continue to believe that a strategic response to homelessness remains a key priority for local authorities and that the proposals in the Bill will not detract from their statutory responsibility under the Homelessness Act.
Secondly, there is the emphasis on prevention and support. Traditionally, there has been a focus on bricks and mortar issues. But prevention and support must not be lost. I hope that the Minister will provide assurances that that is certainly where one of the focuses of homelessness strategies will be.
Thirdly, the strategy process also stresses the importance of joint working between local authority departments and in particular with social services. I understand from Shelter that local authorities have responded well to the 2002 Act and are engaging positively in the strategy process. However, there is some concern about the extent to which housing authorities and social services are working effectively together. Shelter has carried out a survey of local housing authorities. More than three-quarters said that improvements were needed in the way that they work with social services.
The Minister may feel that it is appropriate to take up the matter with colleagues in the Department of Health. I hope, as I say, that this morning provides a basis for assurances along the lines which I seek. I beg to move.
My Lords, I shall make a brief response to an important issue. I make it absolutely clear that we have some sympathy with Amendment No. 79. However, we believe that we have already taken account of what it seeks to achieve.
The amendment, as the noble Baroness said, would impose an additional duty on the Secretary of State and the National Assembly for Wales, when exercising their powers under Clause 88, to require local authorities to have housing strategies. The amendment would require us and authorities to have particular regard to authorities' strategic homelessness functions.
It is of vital importance that housing and homelessness strategies support and reinforce one another. The existing guidance stresses the need for robust links between housing and homelessness strategies. We believe that the importance of this approach can be emphasised through further guidance. Therefore, there is no need to include this level of detail in statutory legislation on the face of the Bill.
I hope the noble Baroness will welcome our proposals set out in the Explanatory Notes to the Bill to give local authorities the option of rationalising their housing strategy, homelessness strategy and home energy conservation reports into one document. We envisage that this would improve the necessary links between the documents by reducing the overlap. It would also reduce the burden on local authorities.
However, we continue to believe that a strategic response to homelessness remains a key priority for local authorities. Clause 88 does not change the provisions in the Homelessness Act 2002. Therefore, if an authority chooses to incorporate the homelessness strategy in the broader housing strategy, the duties under the Homelessness Act still apply.
The noble Baroness is quite right: it is new legislation. It is being embraced by local authorities. We are doing everything we can within the homelessness directorates of the department to assist local authorities. We have targets for local authorities on some aspects, about which it is important that people understand—particularly in terms of those in bed and breakfasts and rough sleepers. We have an active involvement in those areas through the government offices of the regions.
Even in recent times—not in any way that is negative or chastising—I have met local authorities either at my office or when I have gone on visits and my ministerial colleague, Yvette Cooper, has done the same with about a dozen authorities where we needed to be reassured that action is in hand with a hands-on approach now to ensure that targets that are important to us, especially that for families with children in bed-and-breakfasts, are achieved next March. We are not waiting until February to find out whether we are on course for that. So we are taking the matter extremely seriously—we know that local authorities are as well; there is no division between us on that.
As I said, if we need extra provision, we can provide it through guidance; we are absolutely confident of that. I am grateful to the noble Baroness for tabling the amendment. I would say through her to Shelter that although everything in the garden is not rosy, we are on the case and do not see the need to write the provision into the Bill. I hope that, with those reassurances, the noble Baroness will withdraw the amendment.
Of course, my Lords. I hope that the Minister will take further opportunities to stress the joint working that is needed between different parts of local authorities. That is never that easy—that is in no way inconsistent with what I have been saying about centralisation in debates on earlier parts of the Bill—but further ministerial comment about the value of that would be helpful. I am grateful for the Minister's remarks and I beg leave to withdraw the amendment.
My Lords, the amendment returns us to the issue of retrospection, which I raised in Grand Committee. I then said that what the Minister had said deserved rereading quietly. I have done that. Among other things, the Minister said that he agreed with the thrust of my concern, but felt that the issue could be dealt with through secondary legislation. I was having difficulty working out what secondary legislation would enable the Secretary of State to deal with my concerns. The Minister said:
"Leave it with me. I shall take further advice and, if need be, I shall write to the noble Baroness".—[Official Report, 17/6/03; GC 271.]
The Minister may have felt that to be unnecessary, but the need was mine rather than his.
I hope that in response to the amendment, he will explain how the matter can be dealt with through secondary legislation. If he would rather leave that for a letter during the recess, that would be fine, but I should like to understand. I beg to move.
My Lords, I certainly do not intend to send a letter. I have here a statement on which is printed in bold at the top of the page, "Read in full". So there will be no deviation. I apologise to the House for taking the few minutes necessary to put this on the record. It is a small amendment but a rather large statement so, as I have been warned by my advisers, I shall stick to the text.
Amendment No. 80 is in our view unnecessary. Clause 122, to which the amendment refers, sets out a number of general provisions in relation to orders and regulations made under the Bill. Subsection (1) provides that any power to make orders or regulations under the Act includes power, first, to make different provision for different cases or areas, and, secondly, to make incidental, supplementary, consequential or transitional provision or savings, including amending or repealing any enactment or instrument made under any enactment.
Amendment No. 80 seeks to add to that a requirement that such power to make transitional provision shall be applied to ensure that any arrangements previously lawfully made under the provisions in Clause 101(2), which is entitled,
"Exercise of powers by reference to authorities' performance categories", shall not be made unlawful. Clause 101 covers the exercise of various powers that allow the Secretary of State to remove regulatory controls on authorities or to grant additional powers to them. The powers mentioned include the power to modify legislation that prevents or obstructs compliance with best value or the promotion of well-being and the power to remove requirements to produce plans or strategies. They also include powers to specify: performance indicators and standards; frequency and content of best value reviews and performance plans; and non-commercial considerations for local authorities entering into contracts.
The amendment relates to Clause 122. That means that it would cover only those transitional provisions where the power to make them is in the Bill rather than another Act. The provision would affect only orders made under Clauses 96 to 98, affecting trading, and Clause 119, affecting the use of penalties from dog fouling. It would not attach to orders made under Section 70 of the Local Government and Housing Act 1989, the Local Government Act 1999, the Local Government Act 2000 or the Regulatory Reform Act 2001, as the powers allowing transitional provisions in such orders are in the Acts, not in the Bill. Transitional powers may be attached to these provisions—for example, Section 16(3)(c) of the Local Government Act 1999 already makes provision for any order under the section to include,
"consequential, incidental and transitional provision".
During Grand Committee, the noble Baroness asked questions about the trading provisions in the Bill. My understanding was that the particular issue with which she was concerned related to transitional arrangements following reassessment under the comprehensive performance assessment—in particular, that arrangements entered into lawfully should not be made unlawful. The concern was about an authority slipping down a category and thereby losing a freedom—particularly one that involved an agreement with a third party—and the effect that the re-categorisation would have on that authority in relation to that freedom.
The amendment addresses the question of what happens to existing freedoms and flexibilities—for example, trading powers—if an English local authority undergoes re-categorisation and is no longer able to exercise the power to trade by virtue of falling into a lower performance category. As I said in the debate, we agree with the thrust of the concern but that issue can be dealt with through secondary legislation.
It may be helpful if I take a few more minutes to explain how we believe that that issue can be adequately covered by the transitional provisions in the Bill and those already in the enabling powers that will be used to grant freedoms and flexibilities. I have already written to the noble Baroness about that, but this will allow me to place our view on the record.
Clause 101 covers the exercise of various powers that allow the Secretary of State to remove regulatory controls on authorities or to grant additional powers to them. In particular, subsection (1) makes it clear that the powers mentioned in subsection (2) may be exercised for the purpose of making provision that relates to authorities that are for the time being in a particular performance category under Clause 100. Where provision of that kind is made and an authority undergoes re-categorisation, the result will be that the provision relating to the authority's old category will no longer apply to it and, instead, the authority will be subject to the provision that applies to its new category. The powers mentioned in subsection (2) include the powers to make orders under Clauses 96 to 98—those affect the power to trade and the power to modify enactments in connection with charging or trading.
Clause 122(1)(b) in particular makes provision for transitional arrangements to form part of any orders made under the Bill. An order made under the trading powers in Clause 96 will be framed by reference to descriptions of authority which by virtue of an order under Clause 100(4) are of a particular category. I can confirm that Clause 122 enables provision to be made in any Clause 96 order for transitional arrangements, where an authority undergoes performance re-categorisation and is no longer able to exercise the power to trade by virtue of falling into a lower performance category—that is, under a comprehensive performance assessment of being weak or poor. It is intended that the transitional provisions would be drafted so as to ensure that trading arrangements already entered into by an authority while it was exercising those powers could continue subject to certain time limitations, which we are to consider further.
Existing powers therefore enable us to make provision for transitional arrangements following re-categorisation. The amendment is in effect attempting to limit the Secretary of State's discretion. The Secretary of State could decide that, in exercising the power to make transitional provisions, an authority should—for good reason—lose the trading power. He will exercise the power reasonably and is able to preserve a freedom, but we do not want him to have to preserve a freedom once it is granted. It will be for the authorities to ensure that their arrangements are consistent with that. The transitional provisions are likely to ensure continuity but there may be circumstances where that is inappropriate and, therefore, the Secretary of State's discretion should not be limited in the way suggested.
In view of those reassurances, I hope that the noble Baroness will withdraw her amendment. God bless us all.
And all who sail in her, my Lords. I apologise for suggesting that the noble Lord has not written the promised letter. I am not aware that I have received it. I certainly would not have suggested that he had not written the letter had I received it. Clearly, that is another answer that will repay re-reading. I would not fancy trying to explain to colleagues why I was calling a Division if I did so—it would take more than eight minutes.
Although I understand the Minister's point about the Secretary of State's discretion, I note that the department is still considering how long it should last and for how long decisions and actions taken under it should be valid if an authority drops a category. In practical terms, that is a very important issue. I am grateful to the Minister for that detail and to his officials for spelling it out so carefully. I beg leave to withdraw the amendment.
moved Amendment No. 81:
Page 102, line 34, at end insert—
:TITLE3:"Local Government (Miscellaneous Provisions) Act 1982 (c. 30)
(1) In Schedule 3 to the Local Government (Miscellaneous Provisions) Act 1982 (control of sex establishments), in paragraph 2 after "sex cinema" there is inserted ", adult cabaret club".
(2) In Schedule 3 to the Local Government (Miscellaneous Provisions) Act 1982, "adult cabaret club" means any premises, vehicle or stall used to a significant degree for—
(a) any exhibition, performance or dance of any type where such exhibition, performance, or dance involves a person who is unclothed or in such costume, attire, or clothing as to expose any portion of the female breast below the top of the areola or any portion of the pubic region, anus, buttocks, vulva or genitals, or wearing any device or covering exposed to view which simulates the appearance of any portion of the female breast below the top of the areola or any portion of the pubic region, anus, buttocks, vulva or genitals, or human male genitals in a discernibly turgid state, even if completely and opaquely covered; or
(b) any exhibition, performance or dance of any type where such exhibition, performance or dance is distinguished or characterized by a predominant emphasis on the depiction, description or simulation of—
(i) human genitals in a state of sexual stimulation or arousal;
(ii) acts of human masturbation, sexual intercourse or sodomy;
(iii) fondling or other erotic touching of human genitals, pubic region, buttocks or female breast; or
(c) any exhibition, performance or dance which is intended to sexually stimulate any member of the public and which is conducted on a regular basis or as a substantial part of the adult cabaret club's activity and includes, but is not limited to, any such exhibition, performance or dance performed for, arranged with or engaged in with fewer than all members of the public on the premises at that time, with separate consideration paid, either directly or indirectly, for such performance, exhibition or dance and which is commonly referred to as table dancing, couch dancing, taxi dancing, lap dancing, private dancing or straddle dancing."
My Lords, this amendment would amend the meaning of "sex establishment" as contained in paragraph 2 of Schedule 3 to the Local Government (Miscellaneous Provisions) Act 1982. In Grand Committee, my noble friend Lady Blatch moved a similar amendment to this on my behalf. It was one of those occasions where I had amendments on the Floor of the House on one Bill and in Grand Committee on the other. It was not an easy task to juggle, but it kept one fit running between the two places. On that occasion, the amendment had very different wording; it referred to "lap-dancing clubs" rather than "adult cabaret clubs". The amendment was rejected by the Government on the basis that the definition was not clear.
Whatever else is said about this successor amendment that charge cannot be levelled at it now. I must admit that I got huge help in drafting the amendment in pursuit of the aim of total clarity. At present, a sex establishment, within the 1982 Act, includes a sex cinema or a sex shop. The amendment would add adult cabaret clubs to that definition and therefore bring the licensing of such establishments within the provisions of Schedule 3 to that Act.
The reasoning behind the amendment is straightforward. At present, the licensing of adult cabaret clubs, popularly known as lap-dancing clubs, is dealt with by way of application for an entertainment licence under the provisions of the 1982 Act. Part I of and Schedule 1 to that Act relate to the licensing of public entertainment, and Part II and Schedule 3 relate to sex establishments.
The introduction of the amendment has been prompted by the recent rapid growth in so-called lap-dancing clubs, which are now presented as executive entertainment, but are in fact no more than high-class strip joints. I must confess that I have never been in a lap-dancing club, and, when I first heard of the term, I thought that it related in some way to lap-tops. However, my innocence was soon shattered when I discussed the Bill with friends, particularly as it is related to the licensing of sex shops—an amendment that I moved in Grand Committee, when the Government kindly indicated that they had sympathy with the amendment and would look further at it.
These clubs are a menace, at best, and, at worst, an encouragement of depravity. That is not hyperbole, but rather the sentiments of an acquaintance involved in entertaining corporate clients. In his experience, one visit to such an establishment was not only demeaning, leaving him feeling pretty well besmirched, but also lightened his wallet to the tune of £600 within one hour.
The entertainment at these clubs is provided by women who dance on stage or individually for a particular client and progressively remove their clothing. Some licensing authorities have applied special conditions to entertainment licences to the effect that only partial nudity is allowed, but that provision is becoming increasingly rare. I understand that there are also conditions that are sometimes applied relating to the distance to be kept between dancers and clients, and to restrict the touching of any of the dancers by the clients.
I am convinced that, when the 1982 Act was passed, Members of this House did not envisage that entertainment licences would be granted for such explicitly sexual entertainment. In addition, there have been recent media reports to the effect that the local vice squad had investigated a particular lap-dancing club on Tottenham Court Road as there was a suspicion that it was being used as a front for prostitution activity.
In addition, I understand that, when members of the public wish to object to the granting of a licence for a lap-dancing club, they find themselves restricted by the usual "planning criteria" that are applied to other applications. They relate to whether or not there will be a noise disturbance to residents from the premises, parking difficulties or an increased risk of litter or public order offences. Clearly, the issues that lead local residents to object to a lap-dancing club very seldom relate to these specific grounds. They are much more likely to centre around the considerations that can be given by a local authority when an application is made for a sex shop licence; that is to say, the character of the relevant locality and the use to which other premises in the vicinity are put.
Just last week, on Friday 11th July, an item in The Times read:
"Southwark Cathedral, a relative shrine of sexual liberalism compared with bishoprics, is embroiled in a row with its neighbour, the aptly named Club Wicked. The cathedral . . . is mortified at the prospect of live sex shows taking place next door. Cathedral officials have complained to the local council that the club is 'into bondage and sado-masochism' that 'cause outrage to clergy and cathedral by reason of our Christian faith'. A council spokesman said: 'We are treading on unusual ground for a local authority. There have been many complaints about this application for live sex shows'".
It would therefore seem eminently sensible to bring the licensing of adult cabaret clubs within the remit of Part II of Schedule 3 to the Local Government (Miscellaneous Provisions) Act 1982. This simple amendment would achieve that legitimate aim. I beg to move.
My Lords, I support my noble friend. I was very pleased to substitute—rather inadequately—for my noble friend in Committee. I was disappointed by the answer given by the noble Lord, Lord Bassam, but I promised to reflect on it. As my noble friend pointed out, there was a query about definition, but it was more a case of government opposition to the substance of what my noble friend was projecting. My noble friend has worked very hard and sought help to address the points about which the Government were concerned. I believe that this time she has got it right.
The measure is already enjoyed by a local authority. It seems entirely harmless to give all other local authorities the opportunity to have some control over a form of entertainment that now appears to be getting out of control in some areas. It would protect the community. The particular example given by my noble friend Lady O'Cathain was Southwark. The amendment would give the local authorities the opportunity to respond to concerns in their own communities and to do something to about cleaning up the neighbourhood if what is going on in these places is offensive. It is widely known that the parameters of what is going on in these clubs are becoming wider and wider, and there appears to be no effective control in law. This is a modest, enabling amendment, which, for the sake of decency in our communities, should be supported.
My Lords, I congratulate the noble Baroness, Lady O'Cathain, on bringing back what she described as a simple amendment. I do not think that it is simple—I was impressed by the complexity and the coverage that the amendment attempts to secure. There is little doubt that it addresses a matter of very considerable concern to people in many areas where lap dancing clubs and other similar clubs have opened in recent years.
My first experience of this matter as a politician was when, as leader of a council, I was appalled by the proposition of having a lap dancing club in Hove, which seemed an altogether inappropriate place. Many people in that part of the city were deeply offended by the suggestion that such a club should be located there.
The noble Baroness, Lady O'Cathain, put her finger on the point, as it were, when she said that the planning criteria that were available to consider the application were not fit for the purpose, which made it difficult for decency to prevail.
We accept that the matter is important—all our political experience tells us that local authorities should have adequate powers to regulate such establishments. However, as I said earlier, the amendment demonstrates the complexity of drafting to cover the types of dancing and performance that may take place in such clubs. I have heard of many of the types of dancing described in the amendment, but I have not come across taxi dancing before. I am looking forward to somebody telling me exactly what that is.
I can see that much thought has gone into the drafting of this amendment. The problem with it, however, is that it would catch a far broader range of clubs than those at which it is aimed—by reason of including dancing in clothing that reveals a portion of the buttocks, for example. That is not only a matter of drafting; it raises very significant questions about the extent to which entertainment should be controlled.
I am concerned that this is a matter on which there is a need for wider consultation than is possible within the time scale of the Bill. I appreciate that that is similar to the response given in Committee, and I anticipate the disappointment of the noble Baroness in hearing those words. However, the proposal has implications for local government and they and other interested parties would need to be consulted extensively. It is a regulatory matter on which there would need to be a regulatory impact assessment. There are enforcement issues that would need to be taken very carefully into account. There is a need for more generalised consultation within local government and other interested groups and I am sure that the police, who would get involved in some aspects of enforcement, would also need to be consulted.
The Government are more than happy to pursue the issue and undertake consultation. However, given the time frame of this legislation—the new financial regime must be ready to kick in by a certain time next year—we cannot proceed on the basis of this amendment, crafted cannily and extensively as it undoubtedly is. We cannot support this amendment for this Bill. For those reasons, I hope that the noble Baroness will take up our offer of further discussions so that we can try to perfect something for a later time and another government Bill that covers local government matters. As my noble friend Lord Rooker said yesterday, "There's always another one coming along shortly afterwards".
My Lords, before my noble friend Lady O'Cathain decides what to do about her amendment, the Minister talked about complexity, but all legalese is complex; that is a given. We know that lay readers find such matters difficult to work their way through. However, the Minister has enormous back-up from parliamentary counsel and officials in the department. Is he really saying that he admits that there is a problem and that local authorities have inadequate measures to deal with it and that some of these clubs are offensive to the communities, but is not taking a heaven-sent opportunity to do something about the problem? He has not explained why my noble friend's amendment is unacceptable.
The amendment would be widely welcomed. If, over time, it is seen not to be suitable for the purpose, it is within the Government's powers, with our support, to perfect it at a later date. I see nothing wrong with my noble friend's amendment and nothing that the Minister has said tells us why the amendment is defective.
My Lords, I need not tell you how very disappointed I am about this. It is quite unfair because we will not now protect the people who live around the areas and those who are seduced into going into these clubs. There is a chipping away at the moral fabric of this country that is going on relentlessly. We have an ideal opportunity—and I thank my noble friend Lady Blatch most sincerely for her support.
Somebody in this country has to stand up to stop these clubs. It is not good enough to say—and I use the Minister's words back at him—that it is "a matter of very considerable concern". If that is the case, why can we not do something about it? There is no earthly reason why not. The Minister said that we need a full regulatory impact assessment and that the police must be consulted. Those are fine words, but that is all that they are. The Minister has not said when the consultation would take place, what sort of time scale would be involved, or how long these adult entertainment or lap dancing clubs will be permitted to rampage throughout the country. That is what they are doing.
There are people who are caught by such clubs on the basis of corporate entertainment, as I explained. One place is even next door to a Christian cathedral. It is not good enough. On the basis of the Minister's reply, I am not satisfied and I wish to test the opinion of the House.
moved Amendments Nos. 82 to 84:
Page 108, line 16, at end insert—
"41A In section 13(3) (reduced amounts), after "section 11" there is inserted ", 11A"." Page 109, line 13, at end insert ", and
(b) for "12(1)" there is substituted "12"." Page 109, line 15, at end insert ", and
(b) for "12(1)" there is substituted "12"."
On Question, amendments agreed to.
Schedule 7 [Repeals and revocations]:
moved Amendment No. 84A:
Page 115, line 10, column 2, at beginning insert—
"In section 53(4A), paragraph (b) and the word "and" at the end of paragraph (a)."
My Lords, this part of Schedule 7 cross references to paragraph 3 of Schedule 6 of the Local Government Finance Act 1988. This paragraph ceases to have effect as a consequence of Clause 70 of this Bill, which is the removal of the power to prescribe rateable values. This is a technical amendment and has no effect apart from tidying up the Bill. While I have the opportunity, briefly, I would like to make clear our approach to Clause 70 to which the technical amendment relates.
It is the Government's intention to end the practice of prescribing the rateable values of certain industries from 1st April 2005, following the next non-domestic rates revaluation. Clause 70 removes the Secretary of State's power to prescribe rateable values. That is a major change in valuation policy and there are inevitably risks. Indeed, a number of questions were raised in Committee on the Bill in another place. Although there was agreement to the principle of ending prescribed valuations, there was some concern that ordinary ratepayers would have to foot the bill if there were a significant number of appeals. There was also concern that the Valuation Office Agency and the rating system in general might be under some pressure.
It was suggested that a reserve power might be needed in case the valuation system could not cope with the ending of prescribed rating. We have considered those points in forming our position on the matter. We must be sure that all valuations are robust and defensible otherwise there is a risk of successful challenge of those values. The consequences of such action would likely be costly and burdensome for both ratepayers and the Valuation Office Agency. Were there to be a significant loss to rates yield following such a challenge, the Secretary of State would have to decide whether to pass on the loss by increasing the multiplier for everyone. He would have to consider the instability that that may cause to the rating system.
The Valuation Office Agency is keen to try to agree beforehand the assessments of properties occupied by those industries wherever possible as that will create certainty for ratepayers and reduce the prospect of extensive litigation. But, at this stage, it is not possible to determine whether such an agreement will be achieved. We intend therefore to proceed cautiously. We will take advice from the Valuation Office Agency on whether proposed valuations for individual industries are robust and defensible. We hope that that will be the case for all industries. But the Valuation Office Agency may not be confident of the valuations in some cases because, for example, there is insufficient information available on which to base their valuations. If we judge this to be the case, the Government may decide not to end prescription in certain cases at that time.
In such cases, the Government may choose not to commence Clause 70 in a wholesale manner. Instead we may decide to take a phased approach and commence Clause 70 at different times for different industries. We hope that that will not be necessary, but we think it would be rash to rule out at this stage a phased introduction. This will not require a change to the Bill, but none the less we thought it right to explain to the House, while the Bill was still being considered, how the power might be operated. I hope that noble Lords agree that this is a sensible and cautious approach, while still remaining committed to ending prescribed rating. I beg to move.
My Lords, in speaking to Amendment No. 86, I shall speak also to Amendment No. 90, which is the main force of the discussion. It brings us back to a debate in Committee on the Fire Services Bill. I raised what seemed to be a potential conflict in the terms of the Fire Services Bill which, as noble Lords will know, gives the Deputy Prime Minister or the Secretary of State powers to intervene—under what is a short-term Bill—to make decisions that affect not only firemen's pay but also conditions of service.
Conditions of service include matters such as the closure of fire stations and the rearrangement of fire services within a local authority area. Those powers fall to local authorities under Clause 120 in this Bill. We also now have the White Paper which will be effective, presumably, in the not too distant future when the proposed fire services Bill is brought forward. In Committee on the Fire Services Bill, the Minister said that if he could think of anything to say on the subject on Report that was better than anything he said in Committee, he would; and that it would be put on the record.
In the interim, we have had the compendium of responses on that matter and others, which were raised in Committee on the Local Government Bill. It briefly refers to that particular issue. But I would prefer the Minister to justify today why these two clauses are necessary and why they will not overlap and conflict with each other. I suspect that they will.
Amendment No. 90 proposes that the provisions in the Local Government Bill are not invoked until the "Fire Services Act" has effectively passed out of existence, because it has a sunset clause of two years. At the end of the two years, the clauses in the Local Government Bill would be introduced straightforwardly. Otherwise, potentially, there would be a conflict if the Fire Services Bill had to be used, although I accept that the legislation is intended for an emergency situation. I look forward to the Minister's response. I beg to move.
"One is almost in parallel worlds".—[Official Report, 7/7/03; col. GC 49.]
Indeed, it is that sense of being in a parallel universe which has prompted the noble Baroness.
However, we do not think that it would be right to support these amendments. The provisions in this Bill are very desirable. Those are the ones that we want to see in effect. It is the Fire Services Bill which is, to us, so offensive. That is the one we want to see the back of, not the ending of the Secretary of State's powers as provided by Clause 120. The noble Baroness is right to try to obtain clarity on the issue, but I hope that she will not pursue the matter to its logical conclusion—which to us would be illogical.
My Lords, I remember using the term "parallel worlds" in response to a particular amendment, but I think that the 11 hours in Grand Committee on the Fire Services Bill was actually a parallel world. It was certainly another world to that which I have been used to since I have been in this House. I think that I can satisfy the noble Baroness about the apparent conflict. I have been giving the matter more thought anyway.
Clause 120 removes the requirement for fire authorities to seek the Secretary of State's approval before making a reduction, no matter how minor, in the number of fire-fighting posts or before the closure of a fire station or, indeed, the withdrawal of a fire appliance. The Bain review recommended that Section 19 of the Fire Services Act 1947 be amended or repealed as soon as possible to remove obstacles to introduce new and more flexible fire cover arrangements. The Government fully support this view and I believe there is a degree of political consensus that, in a modern fire service, operational decisions of this kind should be taken locally.
Noble Lords have expressed concern at a perceived conflict between the greater operational flexibility that the repeal of Section 19 will give fire brigades and the powers of direction on the use or disposal of property contained in the Fire Services Bill. We do not believe that there will be any such conflict. As I said during our debate in Grand Committee on the Fire Services Bill, the Government consider it prudent to take these powers to deal with particular circumstances if they arise, but we hope that they will never need to be used. It is our avowed desire that the Fire Services Bill is never operated during the two years that it will lie on the statute book.
The powers in the Fire Services Bill are concerned only with the recent dispute and its immediate aftermath. They would allow the Secretary of State to ensure that fire authority assets—paid for by the public—are available to those providing emergency fire cover in the event of further strikes. The powers would also allow the Secretary of State to ensure that some limited modernisation of the service could take place if it was being blocked, but I repeat that it is our strong preference for us not to have to use these powers. Noble Lords will of course be aware that the powers will lapse after two years after enactment of the Fire Services Bill; the sunset clause is quite unambiguous. By contrast, the introduction of integrated risk management planning, the repeal of Section 19 of the 1947 Act and the proposals set out in the White Paper are all measures for the longer term.
The move to integrated risk management in the UK fire service is a very positive step forward. It puts the emphasis firmly on outputs and outcomes in terms of lives saved and injuries prevented, accelerates the move from intervention to prevention and is more responsive to locally identified risks and needs. By delaying the repeal of Section 19, a repeal which enjoyed cross-party support in the other place, this amendment would deny fire authorities the flexibility they need to introduce a risk-based approach to the provision of fire cover. I cannot see the reason for that. The potential consequences of doing so and thus continuing with the existing inflexible and overly centralised fire cover arrangements are, I believe, self-evident. It is ludicrous beyond belief that at present the moving of appliances between fire stations has to be agreed by the Secretary of State. The current operating system is incredibly detailed and anachronistic.
The guidance on the introduction of integrated risk management planning, which I hope noble Lords have had an opportunity to consider since Committee, makes clear our continuing expectation that it is essential for local communities to be consulted about significant changes in fire cover. Fire authorities also have a general duty under best value legislation to consult about the way in which they exercise their functions.
There are a number of safeguards in place to ensure consistency of approach without inhibiting local flexibility and decision making. Integrated risk management plans will be drawn up within a framework of national guidance and fire authorities will be expected to maintain current fire cover arrangements until they have produced an integrated risk management plan and consulted local communities on any changes proposed. The performance of fire brigades in providing effective and efficient fire cover will continue to be monitored.
I hope that those explanations set the context. However, we have three elements to consider here. We have, first, the Fire Services Bill, a measure directly related to the dispute which has just ended but which has not been finally and completely settled because of all the dates that have to be met under the agreement. To that extent we now enjoy peace and tranquillity, but there is still work to be done as a direct result of the signed agreement. So the Fire Services Bill has been designed to cover that.
Secondly, we have a clause in the Bill before the House which seeks to abolish Section 19, as recommended by the Bain review and which we want to implement straightaway. Thirdly, in the meantime, the Government have produced their long-term considered response to Bain in the form of the White Paper, which obviously indicates that in the future there will be a major piece of legislation. All three elements can be taken together or separately.
In September we shall consider on Report the Fire Services Bill. I understand that tickets are being offered at a hot rate based on the performance of the parallel universe in the Grand Committee proceedings. However, noble Lords need to bear in mind the crucial point that the Government hope that the Bill will never be operated. It is our hope that it will lie on the statute book and never actually be used. Given that, it is easy to contemplate the abolition of Section 19, the introduction of integrated risk management plans and, it is hoped, a better life for fire service personnel and better performance for the public.
With those explanations, I hope that the noble Baroness will be content to withdraw her amendment. Bearing in mind that this is the last occasion on which I shall speak at this stage of the Bill, I want to put on the record a different but related matter. If I did not do so, I would be rightly chastised.
Before we conclude our proceedings on Report, it is right to tell noble Lords that the Statement on education funding to be made in the next hour or two will include a proposal relevant to this Bill, involving a minor amendment to education legislation. Obviously I cannot pre-empt the Statement being made now in the other place, but it is only right to alert noble Lords to the amendment. I shall write to noble Lords on both Front Benches shortly—or, it is hoped, immediately—to explain the proposals in detail. A government amendment to this Bill will be brought forward at Third Reading in September. However, it is only right that I mention this now because reference will be made to this Bill in the forthcoming education Statement to be made shortly.
My Lords, I thank the Minister on three counts. First, for giving us the information that we should hang around during the afternoon to make sure that we hear the education Statement; secondly, that we should hang around during the late evening of Wednesday, 10th September, to ensure that we can take up our hot tickets for the front seats in the show for the Fire Services Bill, which I note will begin only after the conclusion of all other business on that day, so we may be in for a long night; and, thirdly, for his explanation in response to my amendment. However, I am bound to say that I still have some difficulty with it.
The Minister knows that the only reason I tabled the amendment was to seek some clarity about the overlap between the Bills. I was not particularly interested in the integrated risk management planning process. We are all agreed on that and it forms a part of this Bill. However, if the Fire Services Bill ever had to be deployed—I understand all the "ifs" and "buts"—then some of the provisions in that Bill would relate to the reorganisation of fire services within local authority areas. I do not refer to the moving of equipment and so forth, rather to the reorganisational aspects.
If that were to happen then one Bill is going to have to be superior to the other. I understand that, in those circumstances, the Secretary of State or the Deputy Prime Minister would be able to impose a solution, but under the terms of the Local Government Bill he would already have passed that responsibility over to the local authorities. I do not think that the Minister has yet resolved the conflict about which of the two Bills would be paramount.
My Lords, there is no doubt about that. The Bill which would be paramount would be the Fire Services Act, as it will become. If the forthcoming Fire Services Act had to be operated, that would take place only under the circumstances of an emergency and the failure of the parties—the employers, the Fire Brigades Union and everyone else—to agree. We would have a disaster on our hands. The two-clause Fire Services Act would give the Deputy Prime Minister the power to impose solutions, settlements, changes to contracts of employment and the moving or using of equipment. A dispute which the parties had failed to resolve themselves through their own procedures and their own arbitration, so that it was then necessary to operate the Fire Services Act, would amount to an emergency and the Fire Services Act would take precedence. That would be necessary in those circumstances in order to protect the public.
I do not need to take advice; in my mind I am absolutely clear on the point. The Fire Services Act would be paramount at such a time, but obviously for the shortest period possible because the circumstances would be those of a breakdown in negotiations and the need to impose a settlement so as to draw a line under the dispute. We have learnt the lessons of the past 12 months and that is why the Fire Services Bill has been brought before your Lordships' House.
My Lords, I shall not rehearse the problems that we have with the Fire Services Bill, one of which is whether the Deputy Prime Minister will be able to do anything that he wants to under the Bill because there are no parameters in it. But that is not a matter for today. I thank the Minister for his robust reply and I beg leave to withdraw the amendment.
moved Amendment No. 89:
Page 76, line 40, leave out "to 49" and insert ", 41A to 47, 48(a), 49(a)"
On Question, amendment agreed to.
[Amendments Nos. 90 and 91 not moved.]
moved Amendment Nos. 92 and 93:
Page 77, line 31, after "(9)" insert ", 76(2) to (5)"
Page 77, line 38, after "(3)," insert "48(b), 49(b),"
On Question, amendments agreed to.