Decentralisation

– in the House of Lords at 1:16 pm on 30th June 2005.

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Photo of Lord Kirkwood of Kirkhope Lord Kirkwood of Kirkhope Liberal Democrat 1:16 pm, 30th June 2005

My Lords, I am very pleased to be here, and to follow the distinguished contribution from the noble Lord, Lord Chan, whose reputation as someone who has spent much of his professional life in community life precedes him. He made an excellent and important speech. He made two points in particular. He is right that good policy is essential but that if it is not implemented properly at a local level, that vitiates any of its value. He also rightly stressed the role of pharmacists—community pharmacists in particular—as a pharmacist myself I was especially pleased to hear him say that. I am sure that his contribution will repay careful study by your Lordships.

I am also pleased to be here because I am one of three Whips being introduced and making maiden speeches today. There must be something in the subject that attracts three Chief Whips at the same time. I do not know what is the collective noun for Chief Whips—

Photo of Lord Kirkwood of Kirkhope Lord Kirkwood of Kirkhope Liberal Democrat

I will settle for conspiracy.

Someone said to me just after I was introduced to this distinguished House that I had already made a name for myself because I had more "k"s in my name than anyone else and I was asked if I was a member of the Klu Klux Klan. I have never been a member of the Klu Klux Klan, but I was a Chief Whip, which is not quite the same thing. The three of us spent many happy years in the other place ordering people to come to London quickly. It is interesting that today we are debating the need to get out of London and decentralise the governance of the United Kingdom.

I enjoyed the speech of the noble Lord, Lord Foster. I previously sat at his feet and learnt the black arts and look forward to continuing to do that in future. I am especially happy that the Government have provided a Minister with whom I have a relationship, because when I arrived as a green rookie as a researcher, the noble Baroness was a distinguished member of the Library service and kept putting me right with enormous—consummate—charm. I suspect that she may continue to do that later. I look forward to listening to what she has to say.

It is a quintessentially British process: the metamorphosis from having been a green legislative caterpillar in the House of Commons to a red legislative moth here in the House of Peers. I am not yet a butterfly, because I have to learn the Companion to the Standing Orders before I can fly properly. I have been told that, but I think that I will need at least an 11-week recess and at least two Italian beaches before I have any real prospect of understanding self-regulation, which completely baffles me.

But I am here and am delighted to be here. It is a fascinating and daunting process and was pleasurable right up until now, but I suppose that this is where the work starts, so I had better turn to the subject of the debate.

People who make maiden speeches make a point of recognising the role of the staff and how helpful they are in the introductory process. I absolutely concur with that view. It is not just a question of friendliness; you can tell when you come into an institution whether it is working well—at least, I feel I can—and this is a happy place where people work well together. They may have differences but there are perfectly adequate, grown-up ways of accommodating them without rancour.

The staff play a core part in that. I have been helped: with great charm I was dug out of a broom cupboard when I was confidently expecting to arrive in the Royal Gallery. I was redirected to Central Lobby—of course I was not lost; nobody gets lost—by staff who were patience personified. They were delightful; we must not forget the contribution that they make. They make that contribution because they believe that the institution is important. That is why they get up in the morning and willingly come into work. They should never be taken for granted. It is very hard to strike the balance between being open and friendly and being efficient and professional, but it has been achieved here. None of us who serves in this House should take that for granted.

I should confess that I have a fatal effect on institutions. Shortly after I left Cranhill Senior Secondary School, it was bulldozed to the ground. I then went on to Heriot-Watt University pharmacy school, but shortly after I graduated the school was closed. When I asked the department the reason, it said that the quality of the undergraduates was not good enough. I have just left the House of Commons, so goodness knows what will happen to the Mother of Parliaments, but I give it until around Christmas. However, I can reassure noble Lords that I propose to be here for a very long time. My next planned career move is to the great parliament in the sky, so there is no risk involved in my being a Member of your Lordships' House.

I must confess that, although people told me about the work in this House all the time, I was so busy ordering people around as a Chief Whip that I never got an opportunity fully to understand exactly how much work was done here and how high quality it was. We should do something about that. Perhaps the conspiracy of Chief Whips should get together after the debate and send a message back about how important this place is.

If I had any doubt about that, it was dispelled when, as part of the osmosis process, my new Chief Whip sent me to listen to a debate on 22 June about European Union development. I had intended to stay for 10 minutes but two hours later I was still there, listening to the noble Lord, Lord Grenfell, who gave a very lucid explanation of his committee's work, followed by the noble Lord, Lord Lawson of Blaby, who talked about the Fontainebleau agreement—I did not agree with it all but it was fascinating—and then the noble and learned Lord, Lord Howe of Aberavon. The noble and learned Lord was heckled with a great deal of discretion and a certain amount of demonstrated displeasure by the noble Baroness herself, Lady Thatcher, who was sitting next to him. It was a great privilege to listen to a grown-up debate about issues facing Europe. The sadness is that not a word of it appeared in public print thereafter.

I learned from that experience. If it is indicative of the quality of debates in this House, I have a long way to go. It is 21 years since the Fontainebleau agreement was reached; perhaps in 21 years' time I will be able to make a contribution of that quality to this House. Although the debate was a little retro, as you would expect, it was a fascinating occasion, and I look forward to contributing to such debates in future.

I shall turn very briefly to the subject. The Prime Minister, in a very interesting speech to the European Parliament, talked rightly about whether Europe had lost its connection with the people of Europe. That same question could quite appositely be raised closer to home. The noble Lord, Lord Foster, will probably understand my next point better than the rest of us. I wish to quote from the Prime Minister's speech about reconnecting Europe to the people. He said:

"It is time to give ourselves a reality check. To receive the wake-up call".

That is a typical Blair sentence; it contains no subject. He continues:

"The people are blowing the trumpets round the city walls. Are we listening?".

Chapter six of Joshua depicts the Canaanites inside Jericho. Joshua is outside with his seven priests, seven trumpets and seven circuits. On the seventh day there is a great shout and the walls fall down. Listen to the next sentence:

"Have we the political will to go out and meet them so that they regard our leadership as part of the solution not the problem?".

The noble Lord, Lord Foster of Bishop Auckland, will know that when the walls fell down, Joshua walked in and massacred everybody inside, except Rahab the harlot, who had given a safe house to some of Joshua's spies. If the Prime Minister is taking us into the land of the Canaanites with some of his proposals for Europe, I do not want to go there. In fact, Joshua put the cap on the whole thing by cursing the prospect of anybody rebuilding the walls of Jericho. It is time that some of the new speechwriters in No. 10 were sent back to bible class on Sunday. We would all be the better for it.

I am pleased that this debate has taken place because it is quintessentially important. Simplification and decentralisation must be mainstreamed, in every sense, throughout government policy, across government departments. I have the privilege of serving as a director and trustee of one of the Rowntree trusts. We were so concerned about the disconnection between the electorate and the governance of the United Kingdom that we set up an inquiry, which we were lucky to get the noble Baroness, Lady Kennedy of The Shaws, to chair. We look forward to the result of that inquiry early in 2006, because it will make a contribution. I hope that the Government will take proper notice of it.

I welcome the debate; it is on an important subject. During my 20 years as a constituency Member in the other place, rural south-east Scotland suffered a salami-slicing reduction in public services in all sorts of ways. It is important that we turn our attention to putting that right.

As noble Lords may recall, Woody Allen said that 80 per cent of success is showing up. As I showed up this morning, I hope that I can claim eight out of 10 for my maiden speech if I promise to work better on the content in future. But I hope that this subject will show up. If it shows up again in this House, I will be very pleased to take part in those debates. More importantly, I hope that it shows up in the Government's priorities in future, because there is almost nothing as important as getting decentralisation and simplification of the governance of the United Kingdom right.

Photo of Lord Giddens Lord Giddens Labour 1:27 pm, 30th June 2005

My Lords, I congratulate the noble Lord, Lord Kirkwood, on his maiden speech, which was delivered with great verve and humour. I was very pleased that he eventually got round to the topic of the debate. The noble Lord will bring a lot to this House because of his expertise in social policy, education and social welfare and his work with the Rowntree Reform Trust, which he now chairs. I am sorry that we do not have a personal relationship, therefore I cannot speak in any depth from my knowledge of him. But from his speech it is obvious that he is going to be an extremely worthwhile Member of your Lordships' House. I am very happy to welcome him here today and we are very pleased that, agreeing with Woody Allen, he decided to show up.

I thank the noble Lord, Lord Phillips of Sudbury, for initiating the debate. A good philosophical principle for understanding something is to begin by looking at its opposite. If we want to understand why such an intensive debate about devolution, decentralisation, local autonomy and local democracy is going on around the world, we should start, not from the local village post office, but at the opposite end of the scale, from the impact of globalisation on societies. Globalisation is the pre-eminent fact of our times. It is the defining feature of our epoch. It is much discussed, but it is not always well understand. Globalisation is not simply a single force; it does not move simply in a single direction.

If I were asked to picture what globalisation is doing to our societies, I would say that you have to see it as a threefold set of influences. Some powers are pulled away from the nation into the global market place; we know that. That is the prime reason for the demise of Keynesian national economic management from about the 1970s onwards. If globalisation pulls away, it also pushes down. It creates new demands for local autonomy, new possibilities for local power and new forms of local cultural identity for which people strive.

The push-down effect of globalisation is, of course, not always, benign. Most of the serious conflicts going on in the world today are either within nations or across nations, rather than between nations. At the core of globalisation is a new demand for local autonomy and local power.

If globalisation pulls away and pushes down, it also squeezes sideways. It creates new demands for regional identity and regional power. It creates new forms of region in world society. We need only consider, for example, the importance of Catalonia in the north of Spain to see how important regions are in the new global economy.

Globalisation also changes even the smallest of localities. Your local post office looks the same, probably, as it did 20 or so years ago. You probably still pass the same kind of forms across the counter, but your local post office is actually at the centre of a global electronic network. Nearly everything that happens once the form is passed across is integrated into an electronic system. So, the local post office is, in many respects, different from what it was a few years before. The functions of the post office have been undercut by electronic mail. Electronic mail is also part of a truly global system of communication that directly affects our own lives, personal identities and localities. Your local village store might look the same as it was, but now it almost certainly has products in it from all round the world. It is probably in competition with the giant supermarket that has been built up the road.

What applies to localities also applies to cities. I was pleased to hear a remark about the "global city". London has become a global city. What does that mean? It means that London is no longer simply part of the UK. London is in the UK, but it points outwards into the global economy. There is no clearer example of that than the role of the City. It is so important for generating jobs in our society, but it is part of a global financial system. It is not only London that has become a global city; today, all cities, in some sense, are global cities. They are no longer simply part of their hinterland, as it were; they are integrated into a wider system. We have to understand that, when we develop local politics and seek the economic resurgence of an area.

I disagree with the noble Baroness, Lady Seccombe—I am sorry, I have lost the thread of what I was going to say.

Photo of Lord Desai Lord Desai Labour

She has that effect on people.

Photo of Lord Giddens Lord Giddens Labour

I disagreed with her because, today, regional identity is becoming especially important. Therefore, an agenda for the regions is crucial.

The Government have recognised since their inception the importance of reacting to globalisation and its complex nature. They have recognised that it presumes devolution. That is why there has been devolution of power to the nations, the introduction of a regional agenda and attempts at devolution in the National Health Service. Empowering local authorities, while making sure that they modernise first, is a crucial part of the Government's agenda.

Against that background, I shall make four brief comments about regional devolution and identity. First, in the world that I have just sketched—and momentarily forgot about—regional identity and regional power become inescapable. You cannot have strong local power and strong local democracy, unless you also have strong regional identity and regional democratic accountability.

After the failure of the referendum in the north-east in November 2004, Bernard Jenkin MP gave a speech in which he, rather like the noble Baroness, rejoiced that the regional agenda was, as he put it, dead and that it had been blown out of the water. I think that it creates deep structural problems for our society. You must have an effective regional identity and an effective regional agenda. If you do not have democracy at regional level, you essentially have unaccountable regional power. I have to say that the Government are partly responsible for the situation. It is no good setting up regional assemblies and devolving to regions if you do not give them real power. It was the fact that we had such a half-hearted version of devolution, rather than concern about the addition of another level of bureaucracy, that was the prime reason why voters in that area voted it down. It was a retrograde step for the country.

Secondly, the idea that one can directly transfer power from the centre to the locality, which seems to be the leitmotiv of resurgent Conservative philosophy, is almost wholly phoney. You cannot transfer power from the centre to the locality because of the nature of the changes that I described. We live in a society in which you must have what political scientists call—I hope that your Lordships will forgive me—"multi-layered governance". Multi-layered governance is an inseparable part of a society struggling to come to terms with globalisation. That means, for example, that, if you want local resurgence, you must get communities to help themselves. Of course, you will want to transform local government to make it more efficient and accountable, and you will want to work with voluntary associations in the area. However, often, that will not be enough. You need forms of partnership between the centre and the localities, and you often need a regional stratum to collaborate with too. For example, if you want to do something about poor neighbourhoods or deprived areas, you will need central government intervention to provide leverage. Often, if you simply transfer power to a locality, you entrench the power of local élites. You might entrench local stasis and entrench precisely the things that you need the centre to help you get rid of.

Thirdly, as the regional agenda seems to have ground to a halt, cities will become particularly important. Cities are likely to step into the gap, and that will adversely affect rural areas. We must endorse the agenda for the election of city mayors. In this country, it has been a rather fraught affair, but we now have some systematic research—rather than just assertion—from the New Local Government Network, produced in 2004. It shows some interesting results. For example, mayors are, on average, known to 57 per cent of local people, a proportion that rises to 73 per cent in the north-east. That is far more than know traditional council leaders. In the expansion of local democracy, that must be a key plank.

I agree that some of the leaders have proved controversial. This morning, I looked at the website for Ray Mallon of Middlesbrough. It was very interesting. His was a controversial election, but he is doing interesting things. For example, he says on his website that he does not agree that the idea that resolving problems of crime and anti-social behaviour is best done by putting more police on the streets. He says that you want flexibility, rather than simply more police on the streets. That is interesting.

Fourthly, you cannot have effective local democracy or local empowerment unless resources are provided. An interesting study of elections across Europe in relation to the economic resources of local communities and municipalities shows that the more economic power a local community has bears a direct correlation to the level of voting in elections. Finland allows the most local economic power and allocates the most resources to local authorities, and it has a very high turnout. It is very interesting that there is an almost complete correlation across Europe.

In conclusion, that suggests that the Government must bite the bullet and consider transferring further economic power to localities. You cannot have devolution unless you devolve real responsibility.

Photo of Lord Tyler Lord Tyler Liberal Democrat 1:40 pm, 30th June 2005

My Lords, I have long been conscious of the differences between your Lordships' House and another place along the Corridor. If I had not, I think that I would have been disabused of this illusion by robust conversations with Members—friends—on all sides of this House since I arrived here.

However, I think that I have detected one basic similarity between the two Houses of Parliament: pride of place. At the other end, Members constantly and understandably refer to their constituencies. They have to. But in your Lordships' House, on the other hand, the connection seems both more permanent and more deep-seated. Hereditary titles have centuries-old associations with different parts of the United Kingdom. In their wisdom, the legislators responsible for the Life Peerages Act 1958 retained that need for geographical links in our titles. When the complex negotiations in 1998–99 produced the House of Lords Act and the curious hybrid composition which we enjoy today, no one even suggested that modernisation required the severing of that link.

So, in my view, pride of place is an integral part—the lifeblood—of parliamentary democracy and the lifeblood of our body politic in the United Kingdom. It will therefore come as no surprise to your Lordships that I rejoice in my long connection with the great county of Cornwall, described by Quiller Couch as "The Delectable Duchy". I have been involved there for well over 35 years.

Some noble Lords will know from visiting Cornwall that it has its own unique character and integrity. Indeed, our border with England—the River Tamar—is much better delineated than that with Scotland and Wales. Our history is of a resilient, highly intelligent people with great ingenuity and enterprise, whose inventive and innovative spirit meant that we were a trading nation, and indeed had the first industrial revolution, long before the rest of the British Isles had escaped extreme insularity. I sometimes remind my English friends that when we were trading with the Phoenicians, they were dancing about in woad.

So far as I am aware, my only family connection with your Lordships' House is that my ancestor, Sir Jonathan Trelawny, sat here in the 17th century successively as Bishop of Exeter and then Bishop of Winchester. Trelawny was, and is, something of a folk hero to the people of Cornwall. His family had been deeply involved in the life of the county for many generations. However, when he became the symbol of Cornwall's independent spirit, it was because he, in common with the six other bishops, was locked up in the Tower by King James II for resisting the royal decrees which appeared to undermine the Church of England and strengthen suspicions of a Catholic takeover. The King recalled later that, of all the Bishops, my great, great, great, great, great, great, great, great grandfather was "the most saucy".

The subsequent trial for seditious libel in Westminster Hall, and eventual acquittal by a London jury, were followed with bated breath in Cornwall. Although not then their diocesan bishop, Trelawny's name quickly achieved fame as the county's champion against the interference and domination of a remote authority. The news of his acquittal, on 30 June 1688, was received with peals of church bells, the firing of town cannons and the consumption of a great deal of beer and sack. That was the beginning of the end for King James II. It laid the foundations for the Bill of Rights on which our constitution is so firmly anchored.

Years later, another remarkable Cornish character, Parson Hawker, in my old constituency of North Cornwall, wrote the national anthem which records these events. The chorus runs:

"And shall Trelawny live?

Or shall Trelawny die?

Here's twenty thousand Cornish men

Will know the reason why".

In the 21st century that song is still sung with raucous enthusiasm on many occasions, not least at Twickenham—win or lose.

That rather lengthy background is intended not just to ensure that your Lordships' House is aware of the arrival of a very modest Cornishman, or indeed to celebrate today's anniversary of the acquittal of the seven bishops, but to demonstrate a number of salient characteristics of our country and the need for our political institutions to reflect and respect them.

The United Kingdom is blessed with a richness of varied communities, traditions, historical roots and present-day concerns and aspirations. As my noble friend Lord Phillips of Sudbury said earlier, diversity in this comparatively small country is a very important thread. British people identify with areas and communities of widely varying size and significance, from the great City of London to the smallest island or parish. It is something that we should rejoice in and recognise politically. It is not just nostalgia for the tourist trade, but a deep-seated human need that is perhaps even more necessary in a technological era when our lifestyle is so affected by international—indeed, global—concerns. I believe that, psychologically, it is beneficial and extremely important to all of us.

In the past half century or so, successive governments have sought to standardise and centralise, very often in the interests of quality control, to the point that we now have the most dirigiste administrative system in the whole of Europe. I acknowledge that the road to hell is paved with good intentions. But those good intentions have gone sour in their implementation.

Meanwhile, as has been said, other countries—notably the former command economies of dictatorships of the Right and the Left, right across the Continent—have decentralised, often, ironically of course, with British advice and British assistance. The most obvious example is that of the Federal Republic of Germany. Meanwhile the limited devolution to Scotland, Wales and, intermittently, Northern Ireland has met some needs and expectations, but merely reinforced others.

At least some of the current alarming disengagement of the public from the political process, as my noble friend said, and from the parliamentary and local government elections in particular, can be ascribed to that perception of remote control. Alienation is a feature of perceived distance from and influence on decision making.

Cornwall is just one natural community where history, geography and present-day social integrity seem to be neglected and undermined by our political institutions. The dilution of local government autonomy and obsessive nitpicking by Westminster and Whitehall has reached such a pitch that all noble Lords must realise that it is a feature that is recognised by our neighbours in our own areas.

As long ago as 1968 I co-authored a little booklet entitled Power to the Provinces. We were responding to the creation of appointed regional economic planning boards, which were modelled more on colonial administrations of our imperial past than on democratic agents of devolution. However, the general approach that we advocated was widely relevant then and is still widely relevant today. In essence, we said that "decisions should be taken as close as possible to the people they affect".

Years later, that admirable concept was given the rather ugly title of "subsidiarity" by the Major government. But, despite that title, the concept is still extremely valuable and is at the heart of the debate introduced by my noble friend Lord Phillips. That principle holds good for every level of governance. While I personally have no particular grief for the recent demise of the draft EU constitution, to which reference was made earlier, I very much regret that the commitment to greater subsidiarity seems to have died with it.

Yet there is clearly both an appetite and an opportunity for not only a new commitment, but also a new and more radical programme of devolution. The collapse of the attempts to impose unwieldy regional assemblies, to which reference has been made, which would have mirrored the vast Conservative government regional quangos of yesteryear, and the failure of the attempt to encourage acceptance of elected mayors with centralised powers, has left a vacuum.

Every level of governance needs to be reassessed in that light. There are lessons, I believe, even for your Lordships' House. In the Second Chamber of Parliament Bill, which I and more prominent Members of both Houses prepared and published earlier this year, we were very careful to protect and enhance the links with every part of the United Kingdom.

I have worried and written about these matters for many years and I do not pretend that I have reached a definitive conclusion, but I am convinced that our long-suffering citizens and the very health of our parliamentary democracy require a fresh and more energetic initiative to reverse the centralisation of the past half century. Localism does not mean narrow parochialism. Greater local participation need not lead to national disunity. Bureaucracy need not be a dirty word if its application is much more sensitive to local and personal influence.

There is a moment—just a moment—when the tide turns. I believe that we can catch that incoming tide now. But if we do not, it will not be just "twenty thousand Cornish men" who will want to know the reason why; it will be millions of our fellow citizens from every community throughout the United Kingdom.

Photo of Lord Desai Lord Desai Labour 1:51 pm, 30th June 2005

My Lords, around 45 years ago I was writing a PhD dissertation on the world tin economy. I had to immerse myself in the beauties of Cornwall and its economy. But I did not think then that I would have a chance to show off some of that knowledge in paying tribute to the noble Lord, Lord Tyler. Cornwall also had one of the oldest parliaments, the Stannary Parliament, so the noble Lord comes from a distinguished democratic tradition. If anyone has the right to be local, perhaps Cornishmen do above many others.

The noble Lord has had a distinguished career in another place. He entered it rather prematurely, was ejected, and then had to come back again. I can assure him that this time he can stay. He will not be ejected. My only regret is that he did not take the title of his famous ancestor. We would have loved to have a Lord Trelawny here, but in any case he is very much welcome because he speaks with authority, in particular on this topic.

I am not a localist at all. I believe that this debate is based on nostalgia, delusion and wishful thinking. Being a Londoner, it is hard to claim that one belongs to a community of 10 million people. I thought to myself, if only I had been lucky enough I could have invented for myself a small rural hamlet far from London. I could then claim that I was deeply fond of it and that I wanted to go back there. I cannot do that because I can claim only Bombay, a city of 25 million people. It just gets worse since having lived in four different countries before I arrived here, it is hard to make a claim to nostalgia.

When people talk about localism, they speak of a world that no longer exists. The noble Lord, Lord Phillips, almost admitted that when he said that mobility is the enemy of localism. Mobility is here to stay. Each of us, wherever we live, has a network of friends who are not only local, but can be found across the country and across the globe. My best friend may not be my neighbour. My neighbour may be the person whose Leylandii I hate are growing close to my garden. My best friend may live on another continent. Indeed, that often happens. Let us consider the world wide web. On one level it is very centralising because it is a single thing, but on another it is very diffusing and decentralising. It makes possible contacts across the world, and I would rather be accused of cosmopolitanism than of localism.

There are lots of contradictions here, a major one of which came out in the words of the noble Lord, Lord Phillips. It is the confusion between centralisation and decentralisation and between government and voluntary activity. Very often, we want not actual decentralisation but "destatisation", in the form of wanting far more voluntary activity. As was pointed out earlier, local governance can be as centralising as central governance. We have all heard stories of how horrible and lacking in understanding local authorities can be. So we have a draw a distinction between what it is that we do and do not want.

It may be, as my noble friend Lord Giddens said, that globalisation takes power away from the nation state, upwards and downwards, and makes the entire notion of government rule slightly obsolete. The 20th century was a period of national governments and Keynesian demand management. We came to look upon national governance as the answer to all problems. Even today, much as people talk about localism and devolution, at least in this country we love uniformity. The slightest divergence in the performance between health authorities leads to complaints of postcode lottery healthcare provision. The slightest divergence in secondary school exam results and outcomes leads to cries of, "Oh, we cannot have that". We love uniformity because we mistake it for equality.

So if we ever did devolve power I would bet that, as a Londoner, I would pay the price by having to give money to those lovely local people who want to live in rural areas but do not have the tax revenues to afford the kind of lives they want to lead. Thank you, but I would have to fund their localism and I do not know that I am ready to do so. Those who want localism have to be able to tolerate gross inequalities in outcomes. If you love living in Cornwall, you should love living there without railways or electricity and whatever else you do not have and cannot afford. But with devolution the demand for resources immediately goes up. There is a contradiction here. If you really love your local village, whether you drive there in your Jaguar or something else, you should not ask for extra resources. Uniformity of outcomes requires a central revenue distributing authority because no other authority will provide it.

I am glad that noble Lords on the Liberal Democrat Benches have not talked about local income tax after what happened in the last election. A local income tax would be the most disastrous thing. If you really mean to depend on local income tax, poor communities would be consigned to a very poor existence. So let us stop all this nice sentimentality.

Money is generated by large agglomerations of economic activity. It is not generated by agriculture, mining or even tourism. It is generated by large agglomerations through economies of scale. It is generated by corporations that are globally well connected, and it is that wealth which affords us the luxury of our rural existence. It is also those large, profit-making organisations which have to be nurtured. They are nurtured by imposing limits on taxation. We have to remember that. Therefore those who want localism must come clean and choose: what will they do without if they want localism? You cannot have localism with a uniform existence.

Again, I was very surprised that the noble Lord, Lord Phillips, complained—as his party often does—about the election outcome. He was arguing, in principle, for proportional representation but under certain PR arrangements—not all—what happens locally does not matter because only the national aggregate of votes is considered.

If you argue for a list system—

Noble Lords:

No.

Photo of Lord Desai Lord Desai Labour

My Lords, just listen to me. Another half sentence and I would have finished what I was going to say. If you argue that seats in Parliament should be allocated according to the proportion of total votes cast nationally, under a list system you would lose the one local connection that the House of Commons has—that is, an MP with a constituency.

Of course, there are other schemes. I have read them all. But I shall sit down and the noble Lord, Lord Phillips, will tell me what I know.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs

My Lords, I thank the noble Lord for giving way. He provokes too much. The assumption that I am arguing in favour of a list system is about as fallacious as could be. The noble Lord may have heard of the Jenkins commission, established by the Prime Minister. That is nearer the mark.

Photo of Lord Desai Lord Desai Labour

My Lords, I did not say that the noble Lord had advocated a list system. I said that the noble Lord had complained about the outcome of the present election and that therefore his party had advocated PR. I was very careful in what I said. I was not born yesterday. I have read the Jenkins report—indeed, I have read much more than the Jenkins report—and I have my own view on PR. But let us not go into that.

The fact that local votes would be aggregated into a national total neglects locality. The fact that people voting Liberal Democrat choose to live in different localities rather than concentrating in a few has a cost for the Liberal Democrats—they get fewer MPs. Tough luck. If you like localism, suffer the consequences.

We need to think not so much about localism as such but about how people can live wherever they want to live. But if they choose to live wherever they want to live, they must then consider how much they will depend upon a central fisc. Really and truly spoken, the consequence of localism is a society in which government does not do very much for you; you do a lot more for yourselves and take the consequences.

Photo of Lord Shutt of Greetland Lord Shutt of Greetland Chief Whip, Liberal Democrat Lords Chief Whip 2:03 pm, 30th June 2005

My Lords, I am delighted to speak in this debate which was so ably introduced by my noble friend Lord Phillips of Sudbury. The debate calls attention to the case for decentralisation and greater local autonomy. We have heard from three excellent maiden speakers. Whether they are whip-free or whip-less I am not quite certain but, bearing in mind their contributions, I am very pleased that the trumpets shall sound.

I wish to establish two principles, one of which was mentioned by my noble friend Lord Tyler. First, decisions made in the public domain should be made at the lowest possible level; and, secondly, citizens are entitled to take a view about wherever they live. They should be able to say, "I live here. This is my place. I want to do something about life and conditions here and I want direction about how I should behave in doing so".

I have prepared one or two notes but, before I go any further, I should say a little in response to the noble Lord, Lord Desai. We on these Benches will have to share out our response to the noble Lord.

It is five years since I came down to London to enter this place. I do not know much about London but I have found a place to live and I have found that the citizens here are proud of the place. Indeed, they are often proud of the locality within London in which they live, whether it is Kensington, Peckham or wherever. That is a kind of localism. Sometimes I find that I do not understand what people are saying because they have their own language and accents and so on. So the argument put forward by the noble Lord, Lord Desai, that there is nothing local down here in London is a fallacy; a great number of things are local.

I also disagree with the noble Lord in as much as I believe that any system of organising government and government activity will always require some kind of equalisation. I cannot envisage circumstances where there is not some kind of equalisation with regard to expenditure.

In an earlier debate in your Lordships' House, I spoke on local matters. I had gotten hold of the minute book of the Halifax Borough Council of 1937. In that book were recorded the kind of activities in which the council was involved, including gas, water, public transport, hospitals and all kinds of other activities that are nowhere near local government today. Of course, promoting that which is local is not necessarily promoting that which is local authority, but local authority is important in the sense of giving leadership to a community.

I am tempted to talk about 25 of the past 30 years, when I served as a councillor at Calderdale Metropolitan Borough Council, and to share some of my experiences, but I wish to refer to something else.

In his speech, my noble friend Lord Kirkwood of Kirkhope referred to his involvement with the Rowntree Trust—I hold a similar position as a trustee of the Joseph Rowntree Charitable Trust—and to the POWER inquiry. Parallel with that, the Charitable Trust Democracy Committee, which I chair, has instigated a project entitled "The State of Local Democracy", the purpose of which is to discover how local communities work. It involves detailed research into two fine, free-standing towns—Burnley and Harrogate. The work is being conducted by Stuart Wilks-Heeg and Steve Clayton of the University of Liverpool and it is expected that the research will be published at the end of this year or early next year. So far, a great deal of hard work has been done and several interim papers have been produced. Some of the information that has emerged is worth sharing.

One of the interesting points in a paper entitled Institutional Mapping is a break-down of what public money is spent in Burnley and what is spent in Harrogate. These figures are difficult to obtain because you are often looking at regional bodies and how much of their share is spent in a particular locality. But the best estimate that we can get is £294 million in Burnley and £380 million in Harrogate.

On the other hand, of that figure the Burnley Borough Council budget is £15 million and the Harrogate Borough Council budget is £20 million. In other words, both councils account for 5 per cent of the public spend in those localities. Of course they are in two-tier local government areas. If we add the district and county councils together, the figure moves up to 40 per cent in Burnley and 53 per cent in Harrogate. But if you consider how the people in the Burnley council and Harrogate council areas would regard them as their institutions, 5 per cent seems a tiny amount to be controlled by those authorities. The noble Lord, Lord Giddens, mentioned multi-layered governance. As regards governance, it seems to me that one would expect the borough council layer to be a tiny proportion indeed.

Further draft papers have been produced on public accountability. As regards representation on local and regional quangos, the larger the body the less representative it is. As noble Lords will know, such bodies usually have the word "strategic" in the title. In the paper, there is also reference to participation and consultation. It is interesting to learn that a lot of consultation takes place, but how realistic is it? Someone was interviewed by the team about leisure facilities and consulting young people about them. I read from the draft report:

"They've had a lot of complaints from young people about the council, who've been consulting on the sports facility, and someone from the Youth Council said 'what is the point in consulting. Everything we've asked for, they've say that they can't afford. So why are they consulting, because we can't have what we want . . . we wanted a climbing wall and we wanted a diving board, but we can't have 'em because they can't afford 'em, (so), they've asked us what we want, we've told them . . . so what is the point in asking us?'"

Raising expectations that cannot be fulfilled, by what seems to me to be the phoney method of consultation, causes problems. A further draft report has been produced. It is entitled Political participation and local democracy: a comparative audit of local politics in Burnley and Harrogate. I was interested to see the number of members of political parties. In the two constituencies, where from time to time there is some contention, we find that the total number of people in all the parties is 1,760, and the total number in the two towns who are active in those causes, rather than just being armchair members, is 212. I believe that that is far too fragile for democratic life. Does it have some connection with, for example, the fact that at local authority level we are talking of only 5 per cent of the expenditure being dealt with by the borough councils? Does that have some influence on why so few people are involved in real activity?

These papers will be produced and a document will be available at the end of the year. Finding out how local communities are working today is important work. I trust that, when that work is published, it will assist in pushing forward the localism debate.

Photo of Lord Hunt of Chesterton Lord Hunt of Chesterton Labour 2:13 pm, 30th June 2005

My Lords, I congratulate the noble Lord, Lord Phillips, on introducing the debate on decentralisation and local autonomy. I want to make one or two analytical, as well as practical, points. I find in my conversations with the noble Lord that he tends to disparage the formal approach, but as he has been known to take tea with a professor of statistics, there is hope for him yet.

As a private citizen and in my public career over 35 years as a city councillor, a civil servant and a party member, I have seen great progress in the UK in the theory and practice of community involvement in all aspects of life as that affects communities. So I do not share the rather gloomy view expressed by the noble Lord, Lord Phillips, in his opening speech. However, as a former chief executive of the Meteorological Office, I admit that, although there has been considerable improvement in weather forecasts, many people rightly complain that there are now fewer short-range weather forecasts available to the public compared with in the 1970s. I shall refer to that point in a moment.

My early, na-ve ideas about community action had to be revised when I read Tony Crosland's cautionary words. One might think of him—surprisingly he is not often quoted in this House—as an early sceptic of old Labourism and a far-sighted prophet of many new Labour policies. He pointed out how people neither want to attend endless local meetings, nor do they want their lives to be determined by the small number of activists who like to attend meetings and work on local campaigns. He might not entirely agree with the noble Lord, Lord Shutt, on that point. As everyone knows, people are complicated and one day they can be sceptics about community action and the next day they can be fierce activists if their interests are affected.

In the UK, anyone who enters public life at any level, including in your Lordships' House, needs to understand the complexity of people's relationships with public affairs and, therefore, one needs broad shoulders, a sense of humour and a philosophical approach. In the 1960s, there used to be an excessively narrow perspective of local community action, based on elected bodies and their delegated quangos. I used to sit on some and often they were ponderous and useless; for example, discussing the frequency of double-decker buses in outlying housing estates provided by a monopolistic transport company—useless and depressing kinds of conversations—or discussions with the conservators of the River Cam who could not influence much about the flow up or downstream.

Despite the views of the noble Lord, Lord Phillips, on Thatcherism, I believe that transport deregulation has greatly improved local transport. We now have little buses buzzing around those estates. Similarly the privatised water bodies, with an effective regulatory agency, the Environment Agency, have greatly improved the effectiveness and responsiveness of water and sewerage systems in the UK compared with the past.

More recently, Alan Milburn, an effective cheerleader for new Labour—perhaps not a philosopher—explained in the Times that local action now involves locally-elected bodies, local agencies of central government, local private sector branches and non-governmental community programmes, often supported by the private sector. Of course, there is a great tapestry of overlapping bodies, but that is the British way and seems to be accepted by the Tories, the Liberal Democrats and new Labour—I am not sure about old Labour. In Paris, for example, the parks are run by one or two organisations, whereas in London more than 100 organisations run our parks and I believe we rejoice in that complexity. However, the UK and France both agree that given the complexity of local community action, there needs to be prominent local leadership to help co-ordination, stimulate local involvement and help to provide funds.

I have a suggestion to make which I acquired from a marvellous article in Le Monde soon after I entered the House in July 2000. Perhaps the House of Lords could follow the French Senate by holding occasional receptions here for mayors and other local leaders, with a rich variety of British food and drink available to motivate their Lordships' attendance. You should have read Le Monde's description of the regional foods available to the French Senate.

I have a few more serious points to make in relation to policy. Local action needs to be further encouraged to enable communities to deal with natural disasters and climate change. In Holland, local democracy began with polder flood committees. In the UK, we sometimes believe it began with juries, but in Holland it definitely began with flood committees. I have visited villages in China where the local party officials move elderly people upstairs when floods come through the villages on the Pearl River delta, possibly a more useful role than delivering leaflets. Seriously, it is encouraging that there are now many initiatives by local authorities and utilities to help elderly people; for example, insulating their homes and dealing with flood threats.

I am glad that Mrs Beckett has now taken up the advocacy that local communities should be developing energy policies to reduce carbon emissions. The National Society for Clean Air and Environmental Protection, of which I am honoured to be vice-president, met yesterday. It was very encouraging to see that local authorities are going to move in this direction. With the help of the Foreign Office, we have been co-ordinating with cities in the United States and Germany and I believe that this is an example of very practical action that will have large-scale, global implications.

Another aspect of the response to these extreme natural events has to be local, as we saw last week in Yorkshire. Robert FitzRoy was born 200 years ago next Tuesday. He was the first head of the Met Office and came to a tragic end. I am sorry that he is no longer here. He is famous for introducing local storm warnings, which can be seen in the ports around the UK. Of course, the warnings were so successful that the people of Cornwall objected, because the shipwrecks of Cornwall provided most of their income. Those were the people in the House of Commons who objected to the storm warnings. Indeed, warnings were actually suppressed for 11 years before they were reintroduced amid public outcry. There will be a commemoration of this event next week at the graveside in Upper Norwood.

In the UK at the moment forecasts are provided by the media and the internet. There used to be many local met offices, airfields and ports to provide advice to local people. Even in small cities weather is extremely variable and we should have more local micro-systems and weather information stations such as there are in the United States. However, that would require a change in regulations and funding. We should think about that, especially as we may be entering a period of more extreme and variable weather.

My third point relates to targets, and was mentioned earlier by the noble Baroness, Lady Seccombe. Standardised targets and a national auditing for local services are necessary because they are paid for nationally and people need to be sure that the performance statistics are reliable. We have heard a lot about how that could lead to distortion and how figures are sometimes not presented as honestly and as straightforwardly as they should be. However, as the noble Lord, Lord Giddens, has shown—and I have seen in north Devon and elsewhere—the focus of the Sure Start programme on deprived communities and families could have been initiated only with the aid of very detailed social surveys and performance indicators.

On the question of whether public servants are more or less straightforward and honest in relation to targets, the noble Lord, Lord Phillips, seemed to imply a general downward drift of standards, people and everything else. I would take a nineteenth-century example. I refer your Lordships to Anthony Trollope's experiences of improving local post office services. He had targets, which he said in his marvellous autobiography that he always met because his staff were sanguine with the numbers. His clerks knew that he wanted "good results". That was in the 1850s. He was also not above using his post office travelling expenses to help his fox-hunting. Businessmen and civil servants are probably the same as they always were.

My main criticism of the present regime is that the untouchable gatekeepers of the Audit Commission and the National Audit Office are unduly sensitive about public debate on their policies and methods. When I was a civil servant I was not allowed to publish an article on the service's use of statistics until after I had left. As the noble Baroness, Lady Seccombe, pointed out, there needs to be more debate.

Photo of Lord Newby Lord Newby Spokesperson in the Lords, Treasury 2:24 pm, 30th June 2005

My Lords, I am grateful to the noble Lord, Lord Phillips, for introducing this debate. I wish to speak about local government finance and about regional government in England. So, at least to a certain extent, I constitute the second barrel of the volley against the noble Lord, Lord Desai.

Where there is agreement on local government finance, it is on the fact that the current system is unsatisfactory. Even if we ignore some of the specific problems associated with the council tax—such as the unsatisfactory banding structure or the anomalies of revaluation—even its best friends could hardly argue that the tax is an adequate foundation on which to base rejuvenated local politics and government. I absolutely agree with the noble Lord, Lord Giddens, that the power to raise revenue is linked inexorably to political power.

Political power is the key to greater engagement with people. Why should people wish to get involved in local government if they are there largely to implement the will and targets of national government? The kind of person who is happy with that role is different from the kind of independent-minded municipal leader of whom we saw many in the late 19th and early 20th centuries.

The grim fact is that only 4 per cent of public sector revenue is raised from local taxes. That constitutes only about a quarter of all the revenue spent locally, and it causes a whole raft of problems. The most obvious problem, I suppose, is that if you want to raise an extra 1 per cent of total revenue for your local council, you have to put up the taxes at your disposal by 4 per cent. It becomes very difficult to make significant changes.

This situation is far from inevitable. In the United Kingdom, until the 1980s, local taxation covered about 60 per cent of local government spending. Elsewhere in Europe and the world the position is very different. In Sweden, for example, 46 per cent of all public sector revenue is raised locally. In France, the figure is 18 per cent and in Germany 13 per cent. Therefore, in Germany, which has one of the lower figures, the amount is still more than three times the UK level.

The situation has changed to some extent, but whereas here there has been greater centralisation, across much of Europe there has in recent decades been much greater decentralisation. In Italy, for example, during the 1990s, the proportion of revenue raised locally has increased from 15 to 45 per cent. So it is possible to do it. In this matter we have been going against the grain of what other countries have felt made sense.

What principles should we adopt if we are going to raise more revenue locally? Several should come near the top of the list. First, we should accept as a principle of local government that most funding for local services should be raised locally. That implies that there needs to be more than one local tax. It makes sense that, if one takes the basket of local taxes together, they should be as buoyant as possible. Also, as with national taxation, local taxation and local taxes should be progressive where possible. There does not have to be a great analysis of the council tax to see that it fails on most of those counts.

What would we do instead? The noble Lord, Lord Desai, has teed me up and I will mention local income tax. There was a moment when he seemed to imply that this is a rash innovation that would be counter-productive in almost every respect. Yet, local income tax has a buoyancy and progressiveness that council tax lacks. It has a greater ease of collection and administration than council tax, and it gives the opportunity for greater local autonomy.

Most importantly in terms of whether this tax makes any sense, most other countries already do it. In much of Europe, local income tax is a major if not the major source of local income. In parts of Scandinavia, it is almost the only source of local income.

We spent a long time during the general election discussing local income tax. Although we got into immensely detailed discussions about whether a nurse married to a policeman on median income living in a semi-detached house in Cardiff would be better or worse off, nobody, as far as I am aware, was able to put forward a principled opposition to local income tax that we felt scored a hit against it. I hope that we will continue as a party to advocate local income tax as a principal source of local revenue as a replacement for the council tax.

The second step that could be taken to broaden the tax base very easily—which at a stroke would increase the proportion of local expenditure raised locally from about a quarter to almost half—would be to re-localise the national non-domestic business rate. The circumstances that led to the nationalisation of the business rate—that is, extreme leftwing Labour councils which were seen to be putting up the business rate and therefore deterring business—are no longer part of the political firmament. Our thinking should reflect that. It would also be perfectly possible to ensure that any increase in local business rates imposed locally was less than, or equal to, any increase in other forms of local income. It would be perfectly possible to decentralise that process, giving local businesses a greater interest in what their councils were up to, and ensuring that there were limits within which that tax could be imposed.

A third area is, as it were, everything else. In Westminster we have a situation in which half the revenue raised locally comes from traffic fines and charges. I am not sure that that is absolutely the best paradigm—but I do think that local authorities should have greater power to experiment with their relatively modest local revenue-raising sources to bring a diversity and a buoyancy to their revenue. Although that sounds like a relatively large agenda for change, compared with many of the public policy challenges that we face, it should be relatively straightforward to move towards. We on these Benches look forward to the Lyons report, which is coming out later in the year and will offer a chance to make progress on a better system of local government revenue-raising.

The second issue that I want to raise briefly is the whole question of regional government. Following the loss of the referendum in the north-east, we are in the worst of all worlds. Under the legislation, the Government started moving some powers to a regional level—strategic planning being an obvious example. But there is now no prospect for any sensible form of democratic control of those powers.

I agree with previous noble Lords who have said that one reason why the referendum failed in the north-east was that not enough powers were being transferred for the proposal to look sensible. The other reason, frequently used and widely believed, is that elected regional government would create a new layer of bureaucracy. In fact, the opposite would be the case. There is a huge layer of regional bureaucracy with tremendous powers. The government officers for the region dispense billions of pounds and are completely unaccountable. If I were still a civil servant, the job that I would really love would be to be in charge of a regional government office because—my word!—the amount of decision-making that you do in that post, with effectively no one controlling you, is absolutely phenomenal. The bureaucracy is there—it is working; it is just that it is not under democratic control. Frankly, it is a sort of hidden scandal of the way in which we do things.

In the short term, however, it must be accepted that we will not have elected regional assemblies. Certainly, it seems unlikely to happen in this Parliament. But I suggest three things that might begin to improve the situation at regional level.

First, regional development agencies work quite well, at least in some regions. Just as they have already been given increased powers—for example, in recent times over tourism—there are other things that they should have responsibility over, which would at least increase the degree of regional decision-making. This is a personal view, which I am not sure is necessarily party policy, but I would transfer the relevant functions of the learning and skills councils to regional level. They are regional delivery mechanisms and should be controlled at regional level and not from Coventry.

Secondly, I would streamline the existing regional functions and somehow bring them together into a single agency overseen by elected councillors. I would also reverse the decision on planning and return strategic planning functions to the county councils. In many ways, those are pretty poor, second-best solutions, but they are probably the best that are obtainable in the short term. In the longer term, we need to be bolder, both in revitalising local government and bringing proper accountability to the already powerful regions.

Photo of Lord Griffiths of Burry Port Lord Griffiths of Burry Port Labour 2:35 pm, 30th June 2005

My Lords, I thank the noble Lord, Lord Phillips, for bringing this debate to the Floor of the House and for allowing us to contribute to an area of life that touches all of us at whatever level. Some noble Lords have spoken in this debate from heights that I cannot hope to command. We have heard three wonderful maiden speeches from three people whose self-assurance, compared with the trepidation that faced me when I made my maiden speech only a few months ago, is positively mind-boggling. But I am delighted to hear the expertise that comes from along the Corridor, and look forward to hearing much more of it in due course.

I want to address the subject from a much humbler point of view—but I want to start at least by pretending to be intellectual. In the middle of the 18th century, Montesquieu identified the bureaucratic state as the distinctively modern form of despotism. He bemoaned the fact that there seemed to be a drift towards precisely that end point in the national monarchies and nation states of his day. He placed his hope in, of all things, the aristocratic structures of post-feudal societies. For him, moderate government, if we were ever to find it, meant the dispersal of power and the rule of law. As long as landed aristocracies maintained a role in local government, an over-concentration of power in central government could be withstood, according to his theories. His extreme illustration for that point of view was England.

It seems fitting to ask, in a day when aristocracy is no longer offered that mechanism for the dispersal of power, what alternatives are available to serve the same end. I wish there were more noble Lords here from that class to answer my question, but they have clearly gone to the country. In what mechanisms can we vest the hope that there will be a possibility of withstanding the encroachments of central government? It is not quite enough to be critical of self-government. A great deal more thought, and a fair amount of effort, has to go into identifying or building up those instruments that can affirm local identities and draw from them enough self-confidence to take control of their own affairs and develop the cultural, educational, recreational, social, spiritual and—yes—political dimensions of community life. Others have spoken in this debate about regional assemblies and representative government at various levels.

My own experience, for the last quarter of a century, is in London—"a wonderful place", said Bob Hope,

"or at least it will be when it's finished".

In a sprawling metropolis such as London, the secret is, as the noble Lord, Lord Rogers, once put it, the building up of "knowable communities"—or, as it is more usually put, the development of those villages which, strung together, make up this capital city. To achieve that, people must be enabled to lead decent lives, to bring up their children in security and to conduct themselves with integrity. They need space to be themselves, to think as well as to act, and they need an environment which encourages them to build relationships and to form communities. That will always be best done by collaboration between central and local bodies; it is not enough for either the one or the other to be so mistrustful of the other that collaboration cannot happen between public and private entities. I was delighted in one of the maiden speeches to hear the word subsidiarity—and I would always yoke "solidarity" with subsidiarity, as those are the two key concepts in Catholic social teaching that has been very beneficial across the last century.

In the inner-city where I live recent examples of help from central government and national bodies include the EC1 New Deal, the Building Schools for the Future initiative and lottery money for the St Luke's Centre, through which wonderful musical programmes in the community are being offered by the London Symphony Orchestra. As it happens we have good health facilities, primary care and NHS dentists. We may not be typical: I merely report, count my luck and wish the same for everyone else.

These are splendid initiatives but initiatives and resources that come from central government can only be pump priming, enabling injections of resource. The rest will happen only when people on the ground—elected representatives, leaders of cultural associations, members of the professions, of industry and commerce—appropriate, shape and commit to the projects and programmes that will express local aspirations.

Yesterday I had tea on the Terrace with my local ecumenical colleagues—what a bunch they are. What heroic effort they put into building local communities. My Lutheran colleagues have a fine musical tradition with jazz and baroque music their speciality. My Roman Catholic friends have, with help from the New Deal regeneration fund, turned a car park into a garden—an act of transubstantiation that I can go along with—and it is used by local people. It is an oasis of calm in a very busy spot. My Anglican colleague oversees a brilliant centre that offers a wide variety of services to elderly and lonely people.

The YMCA stretches out a hand to asylum seekers and single people beginning their working lives in the capital. As for us Methodists, we are heavily involved in local schools; we offer musical recitals; a service to mums and carers with their toddlers; we host a dozen or more not-for-profit organisations for their training and other needs. I could go on. Beyond this ecumenism lies our relationship with other non-Christian faiths. We are in dialogue with them as we seek to serve our communities together.

We will work with any organisation of good will, for example, from our local pub—Hansard may record the first commendation of a local pub by a Methodist Minister at this point—the Angel in Islington, whose landlord and staff are community workers in their own right. They provide space for conversation, for "chilling out" and generally for the building of relationships. I refer also to local history groups, locally based charities, the symphony orchestra which I mentioned and the Spitalfields Festival, which all come on to our territory.

I am so grateful to hear the expertise of people who can handle concepts relating to tax regimes, political arrangements and the rest of it, but from my angle of view building communities means encouraging local initiatives, and it takes time. My word of caution to my noble friends in the Government—a plea even—would be to avoid, unless absolutely necessary, unrealistic targets being set for the achievement of community building because that is not how they work. They come together at their own pace. The pressure that comes from inappropriate targets can be, and usually is, very counter-productive.

My other plea would be to take faith communities more seriously. This is the moment when the "cringe" factor sets in. Yet, in my experience, they are not usually hotbeds of sectarianism at all, or narrowly focused, ideologically driven outfits with heavy programmes committed to proselytisation. In fact, very much the opposite, they offer safe space as well as sacred space. They work with others of good will, not against them. The leaders and others in the faith communities are still there when the lights need putting out, when the money runs out, when the projects are finished and when doctors, social workers and teachers have all gone home. They are there in solidarity with the people. Who knows, Montesquieu might just identify them as the modern day bastion of local people—a necessary check on the relentless march of central power, a substitute, and a worthy one, for the aristocracy.

Photo of Baroness Maddock Baroness Maddock Liberal Democrat 2:44 pm, 30th June 2005

My Lords, like others who have spoken, I am grateful to my noble friend Lord Phillips for initiating the debate as I am somewhat of an "anorak" when it comes to regional and local government. The debate has provided a good opportunity to hear three excellent maiden speeches.

I need to declare one or two interests connected with this debate. I am a member of the Committee on Standards in Public Life, which has touched on some of the issues that we have discussed today, and I am a vice-president of the National Housing Federation. Recently I became an elected councillor again. I am now a councillor on Northumberland County Council. For me, life has come full circle as more than 20 years ago I started my political career as a city councillor in Southampton. What is even more amazing is that about two weeks after I was elected, I started to collect my pension.

I became involved because I cared about the community in which I lived. I particularly cared about the community in which I was bringing up my children. I am probably as passionate about local involvement in community life today as I was then, and possibly even more so because I have seen so much power taken up to the centre in those 20 years.

Why is local democracy so important? Other speakers touched on that matter. I certainly believe that the health of national democracy depends on the health of local democracy. As others have said, throughout history we in this country have had a very well developed hierarchy based on local communities running their affairs. In earlier days the hierarchy was based on church structures. Many of those structures still exist. In the 19th century we developed strong local government to provide schools, drainage, sewerage, housing, hospitals, and, as time went on, transport, gas and electricity. It was local government that fashioned our towns and city centres. It was local government that built public facilities and many of the buildings that still form the hearts of our towns and cities today.

Local government is more than the services it provides. That has been reflected in many of the comments today. It is not just an agent for delivering central government policy goals. At its best, it provides a bedrock for pluralism and the basis for civic society to thrive. At its best, local democratic government provides a way for a community to reconcile competing local priorities and determine for itself what mix of services is required. In that regard I do not agree with the noble Lord, Lord Desai, who is not in his place. Open participatory local government enables the democratic voice of a community to be heard on matters that affect that community, and not just the ones it is responsible for.

Many challenges face us and many of them require local solutions. However, the challenge for Westminster and Whitehall is to let go. That means giving local government the space for local initiative and innovation. Again, those comments have been made by others this afternoon. The combination of democratic legitimacy, service provision and purchasing, along with regulatory powers and the representative role, places local government in a unique position. If the Government are serious about tackling crime and want to promote environmental sustainability and to tackle social exclusion, they need to recognise that those challenges need a bottom-up approach.

In some areas the Government have recognised that. When I think of this Government and local activity one of the things that comes to mind is Sure Start, which has been mentioned today, and local strategic partnerships. Although I am not critical of the good work that is being done by many of those bodies, I am often concerned about the lack of democratic accountability in so many of these areas. In my own town of Berwick-upon-Tweed I was fairly shocked to discover that the chairman of the local strategic partnership was elected by means of an election carried on through the local newspaper. I do not think that is truly democratic.

National governments should set out the policies and strategies that they want to see. They should legislate imaginatively in a way that enables regional councils and local councils to carry out those strategies and policies in a way which best reflects local structures. Again, that has been reflected in comments this afternoon.

In addition, local councils can and do play a vital role in gathering information to enable governments to allocate resources fairly. When I was a Member of another place, I had the opportunity to take a Private Member's Bill through Parliament. The Act that resulted illustrates part of the point that I have just made. I chose to steer through the Home Energy Conservation Act, which gives a duty to each local authority—district and unitary—to assess the energy efficiency of all residential properties—public and private—in its area and produce a strategy containing the measures that are necessary to achieve significant energy savings in homes in the area. The report must also contain an assessment of carbon dioxide emissions, and the measures that could be implemented there, and take into account people's personal circumstances, which was the start of looking at dealing with the fuel poor.

That is a good example of how local councils can enable the government to get information to target resources for national strategies. In addition, as the Act has progressed, grants have been made available for implementing the plans that came forward, and they have promoted partnership and innovation, which has involved local councils and local businesses, and of course it has helped many local people in need. Unfortunately, the Government could have made a lot more of it, but that is not the debate for today.

Many of us had high hopes in 1997 of the Blair Government when it came to devolution and democracy. The Liberal Democrats had worked closely with Labour on those issues before it came to power. Initially, all went well, and good progress was made; we have a Parliament in Scotland and an Assembly in Wales. As time has gone on, the Government have become less and less committed to devolution and more and more confused about how to carry out reforms in those areas. Their efforts to set up democratic regional government in England, as the noble Lord, Lord Giddens, said, failed miserably. The proposal for powers to go up from county councils to regional bodies was wrong—that is not what devolution is about. It is about handing power down. There was a lack of clear thinking about where they were going on this and a lack of passion from the Government. If they really believed in regional bodies they should have been more passionate about them and maybe we would have had a better result. We had a damp squib of a referendum in the north-east, and it has probably put back the chance of democratic regional government for a generation, which I very much regret.

I have written here exactly the same words as my noble friend Lord Newby. We have the worst of all worlds: unelected regional bodies with imposed central targets, particularly in the areas of planning and housing. I was on the Front Bench during the passage of the Planning and Compulsory Purchase Act 2004. While it made some good changes to the system at district level, at county level the substantive planning role has been removed. Where previously counties determined everything from rural conservation to economic development, those functions now fall to government regional offices and unelected regional bodies.

The Act imposes central targets on the local planning framework to a degree previously unknown in England and completely unheard of in most of Europe. The only concession that we won from the Government as the Bill passed through this House was to make sure that the regional bodies had to consult the county councils. They were allowed to do it if they wanted to under the original legislation.

There has been widespread criticism and ridicule of the new system. The one criticism that I like best is from the Local Government Association, which describes the results as:

"Old centralism managed by a regional branch office".

The Government need to do some serious rethinking about what is going on this area. Other noble Lords have said that today, and my noble friend Lord Newby put forward some ideas. The muddle and confusion have not helped, because people feel disenchanted by the lack of accountability. The level of participation in local elections is low and, as other noble Lords have said, it is extremely difficult to attract councillors to take on the role when so much is dictated from the centre. After all, who wants to get the blame for matters that are really completely beyond their control?

Everyone finds that difficult. In Northumberland, there are 67 council seats, and even Labour found that it could not stand candidates in 10 seats. Nevertheless, it still runs the council, and councillors have been concerned in our area about the demise of local democracy and the lack of participation. Indeed, they were so concerned that last year they set up an independent Democracy Commission chaired by the writer and broadcaster Eric Robson. It consulted widely in the area and reported back in an excellent document. Many of the recommendations—

Photo of Lord Hunt of Chesterton Lord Hunt of Chesterton Labour

My Lords, has the noble Baroness considered having fewer councillors, as in the United States?

Photo of Baroness Maddock Baroness Maddock Liberal Democrat

My Lords, there are areas where we could certainly have fewer councillors, but in this country—I am using up my time here which is sad—we have a high proportion of people to each elected representative. It is much higher than in the rest of Europe.

Some of the points made by the Democracy Commission were for voting at 16; the single transferable vote for local elections; the strengthening of local committees; the strengthening of the role of town and parish councils; joint meetings between councils to lay out plans. My noble friend Lord Shutt of Greetland made the point that people feel disillusioned when they are consulted and it seems to mean nothing.

I am conscious of the time, but I want to share with noble Lords the conclusion of the report, which is fitting for the debate that we are having today. It says:

"Buried in the hundreds of pages of evidence received by the Democracy Commission was a particularly worrying response. A very large number of people simply don't care what happens to local democracy. If you share our view that democracy at local level is one of the foundations of a civilised society, that finding should worry you too".

I do not have time to read all of it, but it continues:

"Dismiss this report if you will. But when central government has further eroded the influence of local democracy; when voter turn outs have dropped to levels that completely undermine the legitimacy of local politics and when extremist groups and individuals have filled the vacuum created by inaction and petty rivalry it will be too late to recover this report from the waste paper basket where you filed it".

Photo of Baroness Sharp of Guildford Baroness Sharp of Guildford Spokesperson in the Lords, Education & Skills 2:57 pm, 30th June 2005

My Lords, I, too, join other noble Lords in thanking my noble friend Lord Phillips of Sudbury for initiating this debate and in saying how much I enjoyed the three excellent maiden speeches today.

My interest in the issue of localism was stirred in the early 1970s by spending four years in the United States. That was a time when, noble Lords may remember, in this country Sir Keith Joseph was busy getting rid of counties such as Rutland and Middlesex and creating hybrids such as Avon. My friends in the United States were much bemused by that. They said, "How is it that in your country Parliament can destroy entities that have existed for 10 centuries, whereas in this country federal government would not dare touch the boundaries of states, which have existed often for less than one century".

That is the case. In the United States, states have considerable powers not only to vary legal practices, health services, education services and so forth within the states, but also to raise taxes and to go to the market. It is not only states that have those powers in the United States. It is, as the noble Lord, Lord Giddens, mentioned, a multi-layered democracy. As you go down the layers from states to counties to townships to communities to the local school board—often for a community as small as 3,000 people—each has the right to determine what they wish to do in terms of provision and also to raise taxes and frequently to go to the money market and borrow money. For townships in the United States, there is no guarantee. They have a market rating through Standard & Poor's, and if they have a good credit rating they can borrow money; if they have a bad one, they cannot.

I was interested in the fiscal federalism that emerged in the United States, and particularly in the vibrant communities that some of it raised—except, of course, in the inner cities. As my noble friend Lord Phillips said, self-help emerges from within. It was when those communities in the inner cities grabbed hold of their own destiny that they began to regenerate themselves. One has seen that in inner-city Baltimore, inner-city Philadelphia and so forth.

Contrast that fiscal federalism with what I saw emerging when we came back to the United Kingdom, where the pursuit of the public sector borrowing requirement meant that central government began rapidly to dictate not only what should be spent at a local level through the standard spending assessment, but the level of taxes taken at local level through capping. Borrowing was already limited to loans through the Public Works Loan Board; you had to go to the Treasury cap in hand and say, "Please sir, may we borrow this money?". On top of that, the Ryrie rules meant that, even if you got private money to match your public funding, it still fell within the public sector borrowing requirement and required Treasury permission.

My interest in fiscal federalism was further stimulated by my work at Sussex University on innovation in Europe and, in particular, why rates of innovation varied between different countries. Why had some countries succeeded in developing growth poles, whereas regional policy in Britain had been such a disaster area? The classic examples are Emilia Romagna in Italy and Baden-Wurttemberg in West Germany. The noble Lord, Lord Giddens, has already mentioned Catalonia and Barcelona, and there is Nice and its hinterland around Sophia Antipolis. In the 1990s, why did Ireland emerge as a tiger economy when, in terms of location it was in all respects worse placed than any British region, except perhaps Northern Ireland?

Part of the answer lay in the degree of autonomy enjoyed by those regions. They had money of their own and could raise money through taxes. They could borrow money from the banks, and did. They linked up with local bankers and businessmen to develop local projects. They used funds available from the European Investment Bank and the European Social Fund to lever more money. They brokered deals with international companies and brought in foreign investment, but backed it up by bringing together their local universities and technical colleges, financing training packages, and promoting the supply-chain links with small and medium-sized businesses. Of course it was cumulative. Success built on success. Computer companies attracted software specialists, semiconductor manufacturers and so forth.

In the 1990s, Ireland copied all that. It had the benefit of being classed as one of the poorest EU regimes, qualifying for very substantial structural funds. However, it invested in building its capabilities in education and training, expanding its universities and technical colleges, and providing a clear strategic framework within which its businesses could plan. With 3.5 million people, it was smaller in population terms than most British regions, and its location across the sea from Wales put it at a serious disadvantage in terms of access to mainland Europe. Its great advantage, if I might say so, was that it was free of Treasury controls.

Linking those experiences, I therefore concluded that one secret was the degree of autonomy to take decisions and do one's own thing. The other was always having the right people at the right time with vision and nous to take that vision forward.

The noble Lord, Lord Giddens, talked about the concept of multi-layered democracy. Britain has traditionally been such a democracy. At the national level, power has been divided not only between the different arms of government—Parliament, the Executive and the judiciary—but always between central and local government. Out of that pluralism comes—or came—diversity. Different local authorities used to go different ways and do different things.

As noble Lords know, education is the subject on which I speak for my party. In the 1960s, we saw considerable diversity in the provision of education in this country, with areas such as the West Riding of Yorkshire leading the field in terms of innovation. Out of diversity comes innovation. There is experiment. What is seen as best practice is copied. That is the great advantage of pluralism. Let 1,000 flowers bloom, and out of them many good things come.

That is very different from the current situation. Today in education we have a national curriculum, national tests, national literacy hour and national numeracy hour. That goes down to telling the teacher what they must do in every five minutes of the lesson. The Education Act that we put through this House earlier this year was called by the Local Government Association the "nationalisation of education", because it embraced the total ring-fencing of budgets so far as local education authorities were concerned. There is no discretion about what they may spend on schools.

I want to quote a speech given by Charles Clarke to the National Social Services Conference in October last year. In it, he said:

"Ministers are in a position in which they can't be certain that, if they make £x million available, then they will get y outputs and y outcomes in return. So what they have chosen . . . is single purpose bodies with dedicated funding streams, clear accountabilities, bypassing local government rather than working with local government . . . I believe the public expect these services [education and child protection] to be provided as national services which means that local government role is in effect (and I use this word advisably) active agents for central government in relation to these key services".

The words,

"active agents for central government in relation to these key services", signal what seems to be the final nail in the coffin of local education authorities. In future, they are no more than agents of central government. Indeed, if No. 10 had its way and every school became an academy, defined as an independent state school—if that is not a contradiction in terms—or a foundation school, LEAs would become totally superfluous. Central government would be running some 25,000 schools in this country. We shall have moved a long way from the pluralism which, until the past two decades, characterised the provision of services such as education.

Does it matter? Yes, it does, because it amounts to a considerable centralisation of power. As the noble Lord, Lord Wilson of Dinton, in an article in the latest edition of the Political Quarterly, stated that,

"too much power in too few hands as a settled pattern in central government is undesirable in both principle and practice, because it may lead to a decline in the quality of decisions and possibly to the abuse of power".

I shall summarise my three main points. First, political decentralisation without economic decentralisation is futile. The power to raise and vary taxes is a key to meaningful decentralisation, but so, too, is the power to raise money on capital markets. Clearly, there must be safeguards, such as credit ratings, district auditors and referendums on major projects, but national governments must learn to trust the electors and the markets to make up their own minds on whether projects are worth while. Secondly, decentralisation will and should lead to diversity and, far from running away from diversity and condemning it as "postcode lotteries", we should embrace it as a vital constituent of progress and innovation. Thirdly, as liberals, the message of embracing and, indeed, reinforcing pluralism within the political institutions of this country is vital, for that pluralism is under threat and, with Parliament presently ineffective in limiting the power of the Executive, the danger of an abuse of power at the centre is ever present.

Photo of Baroness Falkner of Margravine Baroness Falkner of Margravine Spokesperson in the Lords (Communities & Local Government), Office of the Deputy Prime Minister 3:10 pm, 30th June 2005

My Lords, I, too, join other noble Lords in thanking my noble friend Lord Phillips of Sudbury on providing an opportunity for us to debate these issues which, clearly, we on these Benches hold dear.

It was also pleasurable to hear the maiden speeches of three former Chief Whips—the noble Lords, Lord Foster of Bishop Auckland, Lord Kirkwood of Kirkhope and Lord Tyler. I must say that that raised some anxiety. I wondered whether this was a back-door method of bringing their promise of more discipline to our House. In the context of Chief Whips, I worked as a researcher under both the noble Lords, Lord Kirkwood and Lord Tyler, at some point when they were Chief Whips and learned much at their feet—not least about Scotland and Cornwall—which, as a foreigner to this country was fascinating. So, I do not think that regional identity will be under threat as long as we have these noble Lords on our Benches.

In winding up from our Benches, I should also draw attention to the Government's cunning game plan in putting forward Front-Bench spokespeople, such as the noble Baroness, Lady Andrews, and others who speak on foreign affairs, who bring much wisdom and, indeed, charm to their roles. I think that that is to wear us down—but I shall try to remain vigilant.

In May 2005, the general election was characterised by ever-increasing calls by politicians from all sides for democratic accountability. They spoke in support of local communities, local regeneration and, above all, local control. Did the voters buy those promises for a new localism? If the election results are anything to go by, the answer is a comprehensive "No", with less than a third of votes going to a party that formed the Government and minor improvement in support for the Opposition. Rightly, that has led to calls for more action to reconnect politicians with the people, to re- engage the spirit of civil duty and to re-invigorate communities anew.

But if voters are cynical about the promises made by politicians, it is because they know from their personal experiences when they go about their daily life that the reality is that power and decision-making have moved away from them, that loss of control is tangible and that "community" is an expression which has little meaning in any everyday sense. People realise that there has been a change in the way that life is lived.

They know that since 1997 the number of elected councillors has fallen to just over 22,000, but that the army of appointed members of quangos has risen to over 60,000. They know that a third of public expenditure is now spent on consultants, accountants and lawyers, devising and enforcing a culture that is driven by targets and league tables, as many noble Lords have mentioned. For example, in 1997, some 40 per cent of people were dissatisfied with the NHS. That was at a time when medical staff numbers were rising by 4 per cent per year. By 2001, dissatisfaction ratings had risen to over 50 per cent. By then, medical staff numbers were rising by 3 per cent, but the number of administrators in the NHS was rising by 6 per cent. It is not entirely surprising that more and more people think that the NHS is unresponsive to patients' needs. Yet, as the noble Lord, Lord Chan, pointed out with an illustration from Merseyside, targets do not necessarily improve the provision of care.

The increase in centralisation is not restricted to increases in bureaucracy alone. The ethos of Whitehall is subsumed by a culture of targets. Central government measures what is measurable, not what is important—which is obvious to frontline staff. It is then surprised when there is a mismatch, or a knock-on effect elsewhere. A classic and tragic illustration of this is the spread of hospital-acquired infections, such as MRSA, which was born of a culture of targets replacing clinical judgment and good practice. This is the realisation of Goodhart's Law, which states that any target used as a means of control is bound to be perverted. So we end up in a situation where a hospital that is compelled to cut patients' time on trolleys finds that it can meet its targets to reduce that time by buying super-trolleys that can be designated as mobile beds. The accountant is satisfied, but the patient who is untreated for hours knows that he or she is sold short, whether he or she is lying on a trolley or on a mobile bed.

To be fair to new Labour, it has not been the master of centralisation from scratch. That job was well embarked upon by successive Conservative governments, as the noble Baroness, Lady Seccombe, so thoughtfully touched upon. We find ourselves in the aftermath of an election observing the familiar sight of the Conservative Party in search of a leader. The inevitable beauty parade is accompanied by the need to become more electable, hence new thinking.

So where does Tory blue skies thinking lead this time? It leads to the admission—long overdue—that the abolition of local accountability was their creation. It was capped by the totemic symbol of the abolition of the GLA, which left London, alone among the great cities, with no voice of its own. Theirs was a record of decades of centralisation, universal capping, nationalisation of business rates, cutting support grants and establishing the right to buy with centrally determined discounts.

But we should be grateful that they are talking the talk now. As Mr Douglas Carswell, the new Member for Harwich and one of the authors of a pamphlet entitled Direct Democracy: An Agenda for a New Model Party, puts it:

"Undoubtedly the abolition of the Greater London Council, the rate-capping, and the imposition of the national curriculum and a lot of tendencies started while the Tories were in office".

He goes on to say:

"but they have accelerated since then".

Hence the newfound conversion to localism, but the new model party will have to do more than just pay lip service to decentralisation.

As recently as the election, the Conservative spokesman on local government, Caroline Spelman, was dismissing attempts to rethink local government finance, and announcing that they would scrap the revaluation of council tax. Her thinking was along these lines: just because a house has gone up in value, it does not cost any more to empty the bins. Those are not the words of a champion of local government. They are the words of someone happy to undermine local government by perpetuating the myth that all councils do is collect the rubbish.

The trend to centralise power is accompanied by another social trend, that of social fragmentation. This has been touched upon by many noble Lords. It is unfortunately a trend that is seen across the board, for example, in the increasing fragmentation of communities in rural areas, where the viability of small villages is at risk because local people are obliged to move away when they cannot afford housing. It is also seen in jobs that are filled on a contract basis, in order not to tie an employer to obligations to their workers. The right reverend Prelate the Bishop of Southwell touched on that trend.

The loss of locality and community is all around us. We live in clone towns where a journey from one high street in one town to a town somewhere else will contain no narrative of where we have come to. Its local architecture, shops and pubs will tell us no story of where we are. This loss of narrative has been creeping upon us for many decades through the growth of large chain stores, the loss of planning powers and through changes in the structures of our lives.

So when we are told to "act global but think local", we are at a loss to define what local might be. As the noble Lords, Lord Giddens and Lord Griffiths of Burry Port, reminded us, identity is integral to our thinking and to what we mean by "local" and "regional".

The key to local resurgence is the relationship between the centre and localities. That comes under the greatest tension in the provision of public services. The Government have and are doing much fresh thinking in the area. In our contribution to the debate we would urge them to do less, but to do it better, because the solutions do not lie with central government, but with the people.

As my noble friend Lady Maddock so passionately pointed out in her description of her experience as a councillor, if central government were to let go, the thing we would urge above all is to free local government to raise more of its own money and to spend it on its local priorities.

That would involve an acceptance that councils could have variable performance. They do today. The creation of the financial link between the taxpayer and the authority would energise the taxpayer to greater vigilance over spending in his name. There would probably be an increase in voting turnout in local elections, as well as a greater voice for communities. Alongside that there would need to be a reinstatement of a block grant from central government to give truly greater choice at local level. The challenge would be for central government to renounce ring-fencing, which flies in the face of democratic accountability.

My noble friends Lord Newby and Lady Sharp have both spoken about the need for fiscal federalism. I hope the Government have been listening carefully. That brings me to the issue raised by the noble Lord, Lord Desai. He mentioned the confusion between uniformity and equality. The dilemma for all governments at all times is that of reconciling standards in the provision of services with local variations—what is commonly known as the "postcode lottery".

While it is entirely appropriate for central government to treat citizens equally in terms of national benefits and social security, they cannot and should not apply that to the provision of services such as education, health and transport. To do so would be to imply that individuals are cast from the same mould. Furthermore, communities are no more cast from the same mould than individuals. There are bound to be different needs and different responses which are appropriate to those needs. Accepting pluralism, as my noble friend Lady Sharp said, means a recognition that central government cannot be sensitive to the needs of every child, every pensioner and every patient.

So perhaps we need to accept on all sides that our quest for local accountability will mean accepting postcode variation. If it comes with increased local democratic accountability, it may well be a worthy endeavour.

In concluding, I shall turn to the great liberal, John Maynard Keynes. When describing the establishment of the welfare state that he sought to create, he described a system where we can act as an organised community for common purposes to promote social and economic justices while respecting and protecting the individual—his freedom of choice, his faith, his mind and its expression, his enterprise and his property.

So, for Keynes the first was possible while respecting the second, but people were the basis of that organisation. I would argue that both are still possible today, and we hope to work constructively with all sides to achieve that end.

Photo of Baroness Hanham Baroness Hanham Spokespersons In the Lords, Local Government Affairs & Communities, Spokespersons In the Lords, (Also Shadow Minister for Women & Equality- Not In the Shadow Cabinet) 3:23 pm, 30th June 2005

My Lords, before turning to the debate and thanking the noble Lord, Lord Phillips, for generating it, I welcome the noble Baroness, Lady Falkner, to what I think is her first appearance on the Front Bench. I was feeling quite glowing and warm towards her until she got a little bit into her speech and started making some random remarks about the last Conservative government and the present policies of the Official Opposition. My warmth has faded a little for her in that capacity, but I am sure that she will do well on the Front Bench. So I welcome her to it.

I thank the noble Lord, Lord Phillips, for generating what I think we would all agree has been a debate which has been wider ranging than perhaps we had anticipated—and probably wider ranging than the noble Baroness, Lady Andrews, will have looked and hoped for. I do not envy her the task of winding up the debate. It has also been extremely philosophical, careful, theoretical and analytical and, sometimes, practical. I hope that the noble Lord will feel that he has given us an excellent opportunity for this House once again to demonstrate the breadth of its wisdom and its ability to contribute.

The whole world of localism and devolution has completely different connotations to practically everyone who discusses it. There are innumerable views, but I have sensed less political controversy today on what localism is about than I might have expected. Localism is of course the buzzword for bringing things much more narrowly to the local community—at least, I think that that is what it means; that is my interpretation of it.

I shall concentrate on local government and declare my interest as a member of a local authority and former leader of Kensington and Chelsea. I mention Kensington and Chelsea only because, in her previous life, the noble Baroness, Lady Falkner, was a candidate in one election there. I just thought that I would point out that she has risen from those great heights to these.

The Government think that they have given local government more power, responsibility and flexibility but, in reality, only a small amount of local discretion has emerged. It has emerged today that people think that it has still been subject to the little admired series of regulators, inspectors and targets and the whole system of comprehensive performance assessments. Although it would be fair to say that they have raised the game of poorer administrations, they have become an increasing burden on those that have always demonstrated that they can deliver local government efficiently, pragmatically and sensitively within a tight budget. Many local authorities have done that over the years.

In future, as my noble friend Lady Seccombe pointed out, the assessments are being changed at the behest of the Audit Commission. It is interesting that that is changing but none of us have had the slightest opportunity to discuss that. The proposals have come out of left field and, I gather, are to be part of a new regime of inspection of local authorities—tighter, more difficult and probably, as has been said, making it harder to achieve the standards required. They do nothing to lessen the burden of government regulation and direction in the whole way that services are managed and made responsive to each local community.

It would also be fair to say that the Government's interpretation of localism is to include the whole quangocracy, especially of regional bodies—we have heard quite a bit about regional government this afternoon—and regional assemblies. Despite the very clear decision of the electorate in the north-east, regionalism is still alive and with us. In housing, planning, environment and waste, strategic decisions are being made well away from local communities.

However, it has clearly emerged this afternoon that it is local communities which matter. A local community is nothing without local people; it is not a series of houses; it is a body of people, individuals who come together, live together and want to make a contribution together. Both the right reverend Prelate the Bishop of Southwell and the noble Lord, Lord Foster, in a brilliantly evocative maiden speech, drew that out. No policy or strategy can work satisfactorily if the local community and people are not signed up to it and do not believe in it.

The noble Lord, Lord Foster, comes from a part of the world which I know, where the traditions of close communities and personal relationships, connections and responsibilities for each other still exist. Thankfully, they run deep. The noble Lord spoke eloquently about government "testing to destruction"—I like that phrase—micromanagement from the centre. Many of us would say "Hear, hear!" to that. The destruction has not been quite sufficient. Perhaps the noble Lord, with his Salvation Army background, will allow me to express hope that he will blow his trumpet more frequently, although a little bird has told me that it might be a tuba rather than a trumpet.

Micromanagement from the centre has been far too apparent, particularly with this Government. Their modernisation programmes have turned our constitutional arrangements and traditional structures upside down, and there is no evidence that policies have provided any benefit. They have forced unwieldy structures on organisations and in many respects have, for many of us, trounced tradition.

The noble Lord, Lord Giddens, extolled the virtue of regions—it is a lot fairer to say "regions" rather than "regionalism"—in an extremely interesting speech about the effect of globalisation. But I disagree with him that there is such a thing as a regional identity in this country. We do not seem to be run by regions. Apart from Scotland and Wales, which have always had their own identities, we are not very good at being regionally focused. Our traditions are more local than that, and probably more county-based, as the noble Baroness, Lady Maddock, said.

I shall drift aimlessly into the matter of the health service—I am chairman of an acute trust. I echo the observation of the noble Lord, Lord Chan, that despite all the efforts, money and detailed directions from the top, and the significant achievements on many of the targets imposed, the public still do not think that much has happened to change the National Health Service. There is great emphasis, both in local government and the National Health Service, on choice and people deciding what they themselves can do. But surveys show that people do not want choice and are happy for decisions to be made for them. They want to be sure that they have satisfactory provision, that their care will not be jeopardised by what happens to them, that people in authority are doing the right things and making the right decisions, and that those people know and understand the place that they are in. That brings us back to the importance of localism.

The Government's control centres on their insatiable desire to legislate for everything and their command of the purse strings. They want to direct everything they pay for. There is not much way out of that dilemma. As the noble Lord, Lord Newby, said, a review of the financing of local government is under way but there seems no evidence that it will differ much from what we have seen previously. The options have always existed; it is a matter of deciding whether they can be brought together or whether there should be just one or the other.

However, I am not altogether happy about the augurs from the experience in Northern Ireland, where it has been suggested that council tax contributions should be just under 0.75 per cent of the value of property. If my calculations are correct, such a system would mean that people in this country would pay anything from £400 to £50,000 annually in council tax. Clearly that will not work, so I hope that we will not get served up with such a system.

I agree that we must return to the issue of greater involvement of local people and raising money locally. There is a question of how you do that and whether the business community should get involved.

I wish to end with two brief points about what happens when local communities get disconnected from government. First, on Tuesday night, we had a discussion in the Chamber—I think that it was unique—about a planning application. The application, which was for a 50-storey tower block on the banks of the river, was refused by Lambeth council. The refusal was upheld by an inspector but, as we understand it—unless the situation has changed—the Secretary of State has indicated that he is minded to approve the application, thus overriding the local authority and the planning inspector. It was an interesting debate, and the case is an interesting indication of how the Government put their hand on something that local people do not want.

My second point concerns the Mayor of London, who has decided to extend the congestion charge to Kensington and Chelsea. I declare an interest as a member of Kensington and Chelsea council. The Mayor has undertaken three lots of consultation on the matter, and, in all three, he has been resoundingly told that it is not wanted. There is no evidence that he has listened to that or paid it the slightest attention. The local community will be landed with something that it does not want.

If localism is to mean anything, it must mean that decisions should be made as near as possible to local people. Those two examples—there is a myriad of others—indicate to me that we are nowhere near that. We need to be nearer. The debate that we have had today has taken us a long way towards understanding what people need. Until we recognise the fact that, even in a global society, people want to run their own life and their own community to the best of their ability, we are losing the plot.

Photo of Baroness Andrews Baroness Andrews Parliamentary Under-Secretary, Office of the Deputy Prime Minister, Parliamentary Under-Secretary (Office of the Deputy Prime Minister) 3:37 pm, 30th June 2005

My Lords, it is always difficult when the Opposition spokeswoman sympathises with the Minister about the problems that she will have winding up. She is right.

The debate could hardly have been more timely. On behalf of everyone, I thank the noble Lord, Lord Phillips of Sudbury, for a debate that has been incredibly thoughtful, speculative and expert. We are used to it in this House, but we continue to raise our standards. It has been an outstanding debate. We have ranged from Montesquieu to Keynes and from storm warnings to the Audit Commission.

The maiden speakers, who made such an excellent contribution, could not have chosen a better debate in which to speak. It has enabled them to confirm, I hope, what the noble Lord, Lord Kirkwood of Kirkhope, said about the reputation of the House, once he had made his presence felt, as it were. It has also enabled the three maiden speakers to use their wide and differing experiences in the other place and elsewhere to our great benefit.

I was delighted by each maiden speech. I am pleased that my noble friend has joined the great company of abolitionists. He will find that there are lots of them in the House; we have all had the same Damascene conversion. As the noble Baroness, Lady Hanham, said, he was able to bring such colour and vitality to the debate. I did not know that he played the tuba.

I also did not know that the noble Lord, Lord Kirkwood of Kirkhope, had been a pharmacist. That is one of the things that I never got to the bottom of, when I knew him in another life. All I can say about his excursion into community destruction in Jericho in the context of this debate is that we would welcome any advice that he has about that. If he wants a session on the Companion, there are many people in the House who will be happy to help him.

I do not think that we have been too unwelcoming to three new Whips. I am particularly pleased that we have two extra Celts. The Celtic fringe is beautifully strengthened by the addition of a Cornishman. We benefited enormously from his elegant account of his ancestry, something that always goes down well in this House.

To come back to the nature of the debate, community is an incredibly fertile area for debate in this House, which, of course, has ranged from the global to the very local. I want to talk a lot about the local aspect. No one could have spoken with more conviction than the noble Lord, Lord Phillips, or could have introduced this debate in quite that way. He has had a habit of speaking, as we Quakers say, "truth to power" for many years, which he did again today by raising philosophical, practical and political questions, of which there are many rich seams. I do not want to interfere in the private grief between the noble Baronesses, Lady Falkner and Lady Hanham.

There is a consensus in the Chamber, not least shared by the Government, that our instincts on what we are trying to do are right. The Government are engaging with precisely the same challenges, which we are doing in particularly innovative ways. ODPM, which I have the honour to serve, is very much at the forefront of the championing of local democracy and localism. I see improved governance through local autonomy and greater community involvement as inseparable, urgent and indispensable to revitalising democracy.

We have a very ambitious agenda at ODPM to create sustainable communities, which are, basically, places where people are proud to live and feel safe in their homes. We want to ensure that no one is disadvantaged by the neighbourhood in which they live. Huge differences can be seen in our neighbourhood renewal programme. The agenda is about engaging people in the life of those places.

The language today has been about ownership and trust, which are shared concepts, within the framework of local government, which we want to be as effective as possible. There has also been something of the spirit of a confessional about it. With the exception of my noble friend Lord Desai who is always provocative, not least towards the Government, we have shared our reservations about centralism. We have not gone so far as to compete on who is the greatest centralising government, but we have all been guilty in the past of assuming that Whitehall knows best and lost sight of what really matters.

The Government can take credit for the fact that in recent years we have moved away from telling people what to expect, how to expect it, what it looks like and what they can do with it. We have moved far more closely to trying to find out what people want, how they want to be engaged and how we can make that happen.

Our manifesto stated that services would be free and personal to all, putting more power in the hands of the patient, the parent, the citizen. This week, the Government published another type of manifesto, entitled, Together We Can. It was produced by the Home Office, bringing together many government departments, and sets out explicitly how we want to see government and people working together in a new relationship to ensure that people have a greater say. I commend it to the House because it brings together examples of how we are trying to involve local people and young people in regeneration strategies and evaluating how areas are changing and improving. That is just a taste of what is happening. I know that it speaks to the passion with which this debate has been addressed in this House. I look forward to noble Lords reading it, much as I look forward to reading all the research reports that were quoted across the House about the involvement of local communities, not least Burnley and Harrogate, about which the noble Lord, Lord Shutt, spoke very eloquently.

Those are the sorts of projects that we are thinking about in Together We Can. In the areas where we are building new communities—for example, the great project that is the Thames Gateway—or where we are regenerating older communities—for example, in the north and west where the challenges of rebuilding a community are so different—we are determined to give local institutions and local people greater access to the levers that pull and push change. Managing change is what we have been talking about today. It involves building services around the needs of local people, whether they are students, patients, families or communities. It means finding new ways of funding and delivering services so that they reach the people for whom they are intended.

We have talked about partnerships. It means building partnerships around people, not service providers. We have talked about leadership that should be as rich and resilient as possible. Primarily, however, it is about fostering local involvement, local ownership and active citizenship. All this amounts to significantly more than a different way of doing things. We are looking to secure a new balance between central and local government, what is potentially a new role for regions and cities and, crucially, a new relationship between government and the people we serve.

We take as our starting point four principles which, when taken together, address some of the concerns that were raised by the noble Baroness, Lady Seccombe, and by my noble friend Lord Desai from the other and opposite point of view. In 2002 the Prime Minister set out a statement of what we want to see in terms of public service reform. The balance we seek to achieve is this: it is one between central government responsible for setting national standards—yes, because they are important; delivered by front-line professionals empowered to meet those standards; public service organisations enabled to respond to the different needs of communities; and cutting red tape. In achieving that balance we can address some of the fears which have been expressed about too many targets and too much centralism.

The result is expanded choice. We have seen choice grow in applying those principles, perhaps most radically to public services such as education and health. As the noble Baroness, Lady Seccombe, will know, not only have we given schools greater freedom and greater security of funding, we have also created new opportunities for partnership across the community. I look with great pleasure at the opportunities offered, for example, by extended schools. We are offering schools a new relationship by cutting red tape and offering them more power to determine and evaluate their own improvement plans. Indeed, our debates on the Education Bill during the previous Session drove some of those important and progressive developments.

Likewise in the health service, I am incredibly grateful to the noble Lord, Lord Chan, for setting out so powerfully what the Government are trying to achieve. He proved that in local areas we are reaching the place where we want to be. We have taken health spending to the lowest local levels by devolving it to primary care trusts. We have sought to involve patients in a variety of new ways, whether through expert patient groups, NHS Direct or walk-in clinics. No longer is there that formidable and patronising relationship between doctor and patient which made it difficult for patients even to approach doctors. We can do more, but we understand what we have to do. Moreover, we are of course strengthening and expanding our partnership with the voluntary sector. And, as I have said, whether in new places like the Thames Gateway or in older communities, we are looking for new ways forward.

Our approach at the ODPM is based on the belief that devolution to the front-line is critical. We cannot achieve what we want in terms of improvements and the reduction of inequalities unless we devolve to those who deliver by freeing up bureaucracy, building trust and, as the noble Baroness, Lady Sharp, pointed out, bring innovation into the process. So we are the champions of local government and local partnerships.

But all we do has to be contained and amplified within a framework of strong and effective local government. That unique role, as noble Lords know so well in this House, involves leading communities and ensuring that local voices are heard, setting a compelling vision and strategy—which means balancing interests—taking decisions in the interests of the community as a whole, and joining up delivery.

Over the past few years we have led the debate on the future of local government. Since joining the department I have been deeply impressed by exactly what we are trying to achieve and how we have been trying to communicate those aims. We want to develop a shared vision of the future role of local government, and that means working at the right level. My noble friend Lord Giddens opened a rich seam when he spoke of globalisation and the role of the regions. Looking for the right level of involvement in a country as rich and diverse as this means taking on board what my noble friend had to say. We have seen the beginnings of an interesting and productive debate on where we see the regions going, and we know that at least two views on this are held around this House.

Our view is this: we still see profound inequalities between regions and localities. For communities that means shorter lives, fewer jobs, worse housing, poorer education and bleaker prospects. We have a responsibility to address those issues, which means thinking and planning strategically around wider areas as well as around our cities. Certainly, I think we have somewhere to go with our cities. So that is why we are committed to strong regional agencies and why we want to see enhanced the frameworks for housing, economic development, skills and transport.

The noble Baroness, Lady Sharp, referred to a commitment to innovation. As those of us who have been in the science policy community on and off know, it is extremely interesting how much we can learn from European regionalisation. I am very pleased to say that we are beginning to learn because, as the noble Baroness will know, we have committed ourselves to putting a new regional focus on innovation. Every region now has a science and industry council; we are looking to the RDAs to encourage a joining-up between HEIs and industry; and we have a greater connection between our universities. It is a hugely exciting agenda. If we can get that innovation agenda working at that level, we can transfer it also down into local regions.

The noble Lord, Lord Shutt, referred to strong local leadership. He is absolutely right. I do not accept that localism necessarily means inevitable inequalities—that is the whole point about government holding the ring—because many projects, such as the new children's trusts, will depend on strong and confident partnerships. That is why we have taken steps to strengthen the capacity of local government to develop such partnerships.

I know noble Lords opposite may think that we have not gone far enough in freeing up funding—and, again, the noble Baroness, Lady Sharp, raised some interesting questions in this area—but in the Local Government Acts of 2000 and 2003 we offered an extended package of financial freedoms, we reduced ring fencing, we repealed controls on borrowing and we have reduced inspection.

We have speeded up the pace of reform by giving local authorities greater discretion over what they do by introducing three-year financial settlements from 2006–07. I am very pleased that we have created an opportunity for the noble Lord, Lord Newby, to speak about local income tax and local finance. We are fascinated by the debate going on within the Liberal Democrat Party. The noble Lord is right to say that we are having our own debate, and we look forward to what Sir Michael Lyons says in his report. So there is a very interesting agenda in that area.

I do not think that I should undertake to speak for the Audit Commission but I am sure that James Strachan will read the debate with pleasure. It is a bit unfair to say that the changes to the CPA came out of left field because they were signalled and there was extensive discussion and consultation with local government. I am sure that that point will be taken.

The key point about local government as it is developing lies in its ability and its demonstration of innovation. We have seen this in the local strategic partnerships—which have achieved a tremendous amount at local level, particularly in neighbourhood renewal areas—and in the local area agreements. The challenge of using many different funding streams to deliver important local services, such as children's play or healthy living centres, is one that local government have now faced up to.

Local area agreements are a huge success. They have succeeded in reducing the number of targets in some areas from several hundred to just 60. We are looking at a new way of doing things by bringing statutory and voluntary partners together in a very profound way. We want to see more. Indeed, so enthusiastic are we that we have recently announced that every council and its partners will have the opportunity to develop a local area agreement over the next few years. But, as always, there is more to do.

I wish I could take more time to speak about the fragility of local democracy itself by picking up on something that the noble Lord, Lord Shutt, said. It is not acceptable that 71 per cent of our councillors are male and that their average age is 57. It is a challenge that we face across all parties. We need to make the role of the local councillor more attractive and we should perhaps look at issues such as remuneration. That is a debate to which we shall return at another time.

I want to talk about neighbourhoods and local communities. That is where the debate has centred and it is where the debate can be most productive. Devolution halts, but it does not stop, at the town hall. The sense of place, for most of us, is very straightforward. It is very local indeed: it is our street; it is our local park. That is where action takes effect; as the noble Lord, Lord Shutt, said, "I live here; this is my place".

So how do we engage people in that sense of place? How do we engage them in the things that matter to them? This year, ODPM has published a paper called Citizen Engagement and Public Services: Why Neighbourhoods Matter. We need people to sign up to that, just as we need them to sign up to the principle. We need to understand why some communities are sterile, unhappy and unsafe, while others, which are similar in history and geography, are more successful. The right reverend Prelate would be particularly interested in that on the basis of his experience.

We need to listen more intelligently. The noble Lord, Lord Chan, provided us with an excellent example of listening in the health service. We need to commit to helping neighbourhoods to become the kind of communities that they want to become. Self-help emerges from within. We believe that the new opportunity lies with the locality and with the neighbourhood. Neighbourhood management, neighbourhood wardens, the new deal for communities alongside initiatives such as Sure Start and extended school hours are helping people to feel that they belong. Whatever one reads, whether it is a research report or a report about the arts in communities, people say, "I want to belong; I feel I belong; this is where I feel my identity lies".

That works on the wider political platform. The ultimate goal is engaging people and getting them to commit to local and national democracy. Where there has been greater engagement through resident elections and partnership boards, we have also seen an increase in the turn-out in local elections.

We need to be confident about involving the community. We need to be realistic. Partnership comes with trust. Within the notion of community there are different communities which may be based on faith, on ethnicity and on interest. My noble friend Lord Griffiths gave us some very good examples of ecumenical activity across his patch, as did my noble friend Lord Hunt, when he mentioned that we are much more practised now in the theory and practice of community development. We know about community development. We have the animateurs on the ground, but we need to understand that it means different things. It means enabling people to take decisions, to develop activities, to sustain projects and to know and care for each other and that means delivering services and enabling statutory and voluntary services to work together.

We believe that is critical and that is why we place community involvement at the heart of civic renewal. It is critical because it gives us better value for money, a far greater chance of stickability and sustainability in the community, and more inclusive, active democracy, greater social cohesion and opportunities for individuals to build up skills. As the noble Baroness, Lady Seccombe, said, this is all about individuals. At the end of the day, we are considering how to build that commitment.

Volunteering is a touchstone of an active democracy and it has grown. The Home Office survey shows that the number of volunteers has increased by more than 1.5 million. Paradoxically, at the same time, the number of people who thought that they could influence local affairs fell from 43 per cent to 38 per cent. That is a crucial challenge for us. It is not enough to have the tenant management organisations and the Neighbourhood Watch committee. Being involved is more difficult. We have to understand. I am loath to quote Oscar Wilde but he said that socialism takes too many evenings. Those of us who regularly try to attend our GC, agree with him, but that is what it is about. It is about making people want to do those things.

There is a long way to go before we win the war. Self-evidently, the greatest challenge lies in our poorer neighbourhoods, where people participate less, but where the need to participate is more. They are less likely to be involved, less likely to vote, less likely to use services, less likely to trust the council and less likely to care for the community. We have to engage the people there.

We put in the ODPM document, Citizen Engagement and Public Services: Why Neighbourhoods Matter, the concept of a national neighbourhood framework, which will recognise and empower individuals and groups to take neighbourhood action, building on what we already know works. We are looking, for example, at triggers for action; mechanisms that would work, such as a petition that people could use to influence or prompt a service provider, letting the neighbourhood manage community assets and devolving money from the council to ward councillors.

This is not easy to achieve—it is extremely difficult—but we have heard some good news today. First, the sense of community is strong and thriving in many instances, as noble Lords have testified, not least in faith groups. That was described as the Milky Way of diversity. Secondly, we have the evidence that things are working. We are not short of documentation or proof. Let us use that intelligently. Thirdly, we are determined to succeed and that determination is particularly well set out Together We Can.

I am sorry that I have to stop because there is a lot more that I would like to say. It is a measure of how powerful this debate has been that we take away more questions than solutions. The debate has raised a lot of cross-party commitment and instinct which I am always happy to see. We have all agreed that with opportunity and participation come responsibility and respect. We are deeply serious that this matter is crucial to our democratic vision. I commend the noble Lord for giving us the opportunity to have such a terrific debate. I congratulate the maiden speakers and everyone else who spoke in the debate.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs 4:01 pm, 30th June 2005

My Lords, it falls to me to finalise the proceedings. I must immediately say how grateful I am to all who have spoken. It is a rare event to have three maiden speakers on one occasion. I suspect that it is unique to have three former Chief Whips as the three maiden speakers—I am not sure that the word "maiden" is appropriate in that context. It was an honour and it was also striking to have three doughty men from the fringes—one from Cornwall, one from the very north of England and one from the far southern reaches of Scotland. They may be on the fringes geographically, but I suspect that they will be central to the proceedings of this House.

In response the noble Baroness, Lady Hanham, who said that she hoped that I would be pleased with the debate, I am pleased. I am pleased because a wide expression of views was put forward. It has been a thoughtful debate, as the Minister summing up said, and we have a lot to think about. I suspect that there was far more that united us than divided us. It is one of the great conundrums, one of the challenges of governments—and unfortunately we have not had the experience recently—to try to trim back and control. Governments should observe a self-denying ordinance as regards the exercise of governmental power and accretion of those powers. There was a strange unanimity coming from different directions and quarters. On behalf of us all, I thank all of us and beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn