Motion to Approve

Norwich and Norfolk (Structural Changes) Order 2010 – in the House of Lords at 4:45 pm on 22nd March 2010.

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Moved By Lord McKenzie of Luton

That the draft order laid before the House on 10 February be approved.

Relevant Documents: 11th Report from the Joint Committee on Statutory Instruments and 12th Report from the Merits Committee.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Communities and Local Government, Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Work and Pensions, Parliamentary Under-Secretary (Department for Communities and Local Government) (also in Department for Work and Pensions), Parliamentary Under-Secretary (Department for Work and Pensions) (also in the Department for Communities and Local Government) 5:05 pm, 22nd March 2010

My Lords, today we are considering the draft order which brings into effect proposals for a unitary council for the city of Norwich. With it, we will consider the draft order bringing into effect a unitary council for the city of Exeter. I recognise that there is a great deal of strong feeling on all sides of the House on the decisions we have taken in Devon and Norfolk. At the outset, I want to say that we recognise that these are controversial decisions. They are not matters that we have treated lightly. However, we believe that these decisions have been taken in the best interests of the people of Devon and Norfolk.

It may help the House, particularly in light of the amendments that have been put down by the noble Lord, Lord Tope, and the noble and learned Baroness, Lady Butler-Sloss, if I use my opening comments to say something about the decision-making process which has led to our proposing these orders, not least to dispel some of the myths surrounding these decisions. Before I turn to any consideration of process, it is important to recall the substance of the issues before us this afternoon. In short, the choice before your Lordships' House is whether the cities of Exeter and Norwich should have new unitary councils-whether the people of those cities should have the unitary authorities which their democratically accountable councils have proposed, and for which there is genuine local appetite. In the case of Exeter, the unitary proposal has cross-party support across the council. In Norwich, the proposal is supported by Liberal Democrats, Labour Party members and Green Party members.

The benefits of unitary city councils are widely recognised and have been proven over time. Such councils reinforce the city's distinctive identity and sense of place. They recognise that cities are the driver for wider economic growth and provide the clear, simple leadership needed. They also enable local services to be targeted and tailored to the particular challenges and issues that cities face. Moreover, unitary city councils will restore these cities to the position that existed before the 1974 reforms took away the system of local self-government which they had enjoyed for centuries. It is a myth to suggest, as some are, that these unitary proposals are ripping the heart out of the traditional county.

I turn now to the issues of process-and these, I accept, are not unimportant. I will first sketch out something of the history, which shows just how long these processes have been in train, and just how carefully and fully the options and choices have been considered by my honourable and right honourable friends over the years. The story originates back in 2006 when the Government issued an invitation to councils in England. Exeter and Norwich councils both put forward proposals for unitary local government. In February 2008, the Secretary of State sought the advice of the independent Boundary Committee, asking for alternative proposals covering Exeter and Devon and Norwich and Norfolk. She considered that the original ones did not meet the criteria in the invitation. The Boundary Committee undertook its own consultation, generating 20,000 responses, and submitted its advice in December 2009. Once the Government received the Boundary Committee's advice, we allowed a further six-week period for representations, receiving more than 2,800, including meetings with many of the affected councils. It would be fair to say that the stakeholders and public in these areas have been consulted more than adequately on these proposals; that the process is anything but rushed; and that a resolution to these issues is now what all concerned crave.

Central to our decisions on the proposals was an assessment against the five criteria of affordability; whether there is a broad cross-section of support; strategic leadership; neighbourhood empowerment; and value-for-money services. Our assessment was that, contrary to the Boundary Committee's views, the alternative proposals for single county unitaries in Devon and Norfolk did not meet all the criteria, in particular the "broad cross-section of support" criterion. It was clear that not one of the existing principal councils in the areas supported the idea of a unitary county council. Having considered the original proposals for Exeter and Norwich afresh against the criteria, our assessment was the same as that of the Secretary of State in December 2007. To a limited extent, the proposals still do not meet all the criteria.

In the case of Exeter, we judged that it did not meet the affordability criterion to a limited degree. The payback period would be a little longer than five years-the city council told us perhaps six. But without doubt, savings would exceed costs over a few years. In the case of Norwich, we judged that it too did not meet the affordability criterion to a limited degree. The payback period would similarly be a little longer. We also judged that the value for money on services criterion was not met.

Having made this assessment, we considered the merits of each proposal, giving careful consideration to the circumstances in which there were,

"compelling reasons to depart from the presumption that proposals that meet the criteria are implemented, and those that do not are not implemented".

It has been suggested-not least by the Merits Committee-that this wider consideration of the merits of each proposal was somehow a new or novel procedure. I can categorically tell noble Lords that it is not. In December 2007, the then Secretary of State approached her statutory decisions in the same way. She recognised that it was in principle open to her to conclude that the criteria were not met, but that there was none the less a good reason to implement the proposal, or conversely that the criteria were met but that the proposal should not be implemented. In the event she decided that, having regard to all the circumstances then prevailing, it was appropriate to implement proposals that met the criteria, and not to implement proposals that did not meet the criteria.

In contrast, we concluded-when looking at the merits of the proposals in the round and considering today's economic circumstances-that there were compelling reasons why these unitary proposals, despite not meeting all five criteria, should none the less be implemented. This was not least because when the Total Place approach is factored into consideration, the outcomes for services in Norwich generally would be as good, if not better, than the outcomes envisaged by the "value for money services" criterion. For both Norwich and Exeter, we judge that the risks of a slightly longer payback period are outweighed by the benefits for the local economy.

The Total Place approach is transforming the possibilities for local public service delivery. Total Place takes a "whole area" approach to delivering public services in a geographical location, looking at how to deliver better services at less cost, through effective collaboration between local organisations, led by local authorities. In the case of Exeter and Devon, and Norwich and Norfolk, it means that there can be the best of both worlds. There will be one local government leader able to provide strong strategic leadership for the city; and the more rural remaining two-tier area stands to have a stronger voice through a more focused county council, working closely with the rural districts. Together, in a partnership of equals, the city and county councils can work with other service providers to shape and jointly deliver high-quality services across the whole area, with the economies that brings, but which also meet the diverse needs of urban and rural communities.

I am sure noble Lords here today will recognise that Exeter and Norwich are the engines of economic activity and potential in their sub-regions. Their pull already draws in investors, businesses, employers and wealth. There are numerous examples of how these cities have been successful in attracting businesses-for example, the Met Office or EDF Customer Services relocating to Exeter, or the fact that Norwich ranks as a top 10 UK retail centre and one of the top 10 cities in the UK for employment in knowledge-intensive businesses. I recognise that much of this activity happens outside the cities' boundaries, but most businesses do not choose to locate in a surrounding district council area just because it happens to be a particular district council-for example, locating in the district of Broadland in Norfolk or East Devon in Devon-they choose that location because they want to locate in and around the cities of Exeter or Norwich.

The strategic leadership that unitary councils for these cities will deliver means these cities' "brands" can grow, and the gain to Exeter or Norwich will also be Devon's or Norfolk's because these benefits do not recognise administrative boundaries; they will spill over into the wider sub-region. That is why I can say without hesitation that we are convinced that the best outcome for the people of Devon and Norfolk is a structure which would see an urban-focused unitary council for the cities together with a two-tier local government for the rural surround.

I should like to turn briefly to the report that has been published on these orders by the Merits Committee, which raised a number of points which I hope I have already addressed, but there are a few further issues that I think are worth responding to here. The committee questions the extent to which interested parties should have been given the chance to comment on and evaluate the "compelling reasons" which informed our decisions to implement unitary councils for Exeter and Norwich. Representations were received from both affected councils and others, particularly orally at meetings, and covered a wide range of matters. We received representations arguing that the proposals should not be implemented, not because they did not meet the criteria but because, for example, the present form of governance was better than a unitary structure, or that even if unitary structures had merit, the change was not worth the candle. We also received representations arguing that unitary proposals which did not meet the criteria should none the less be implemented because the benefits they would bring would outweigh the downside of their not meeting the criteria. So clearly, those making these representations to us felt able to set out what for them were compelling reasons over and above the criteria why a proposal should or should not be implemented.

The Committee also questioned the extent to which these unitary proposals, which rely on collaborative working, are now feasible. We are quite clear that there are real benefits to the residents of Exeter and Norwich arising from unitary status, as well as real advantages to all the residents of Devon and Norfolk from their councils working together with the new unitary councils, as well as for Torbay and Plymouth in Devon, to deliver real improvements for all. The Government's expectation and hope is that the elected representatives will recognise these opportunities, put aside their differences and work together in the best interests of their residents.

I want also to respond to the points raised in the Joint Committee on Statutory Instrument's report on the orders themselves and explain a little about how they work. The JCSI's most serious concern is that it believes that,

"there is a doubt as to whether the orders, if they are approved and made, would be lawfully made".

The reason for this doubt, in the JCSI's view, is that if the High Court found for the claimants in the judicial review proceedings currently being brought by Devon and Norfolk county councils against these decisions, this might mean that the orders, after they had been made, would be rendered unlawful. The inference of the JCSI's reasoning seems to be that we should await the outcome of the court proceedings before completing parliamentary consideration of the orders. We do not accept these concerns. This confuses parliamentary accountability with issues of legality and might mean that Parliament could not decide on an issue until court proceedings had been resolved.

We do not accept that the legislative process and business of government should be halted simply because judicial proceedings have been commenced, nor do we accept that it would be right for this House to base a decision on its assessment and judgment of the outcome of court proceedings. That would not seem to be consistent with the concept of a separation of powers between the legislature and the judiciary. I am sure that if noble Lords were to consider the full implications of the JCSI's position, they would share the Government's concerns. The JCSI also drew attention to the orders on the grounds of the unexpected use of powers, drafting that requires elucidation, and failure to accord with proper legislative practice. Officials in my department are confident that they have followed the proper drafting practice and that the instruments achieve their objectives.

We have prepared these orders following consultation with the councils concerned so that the arrangements we are setting up are those which local people believe are best for them. The orders provide that from 1 April 2011, Exeter and Norwich will become the sole principal councils for the cities, having both district and county functions. This will be a wholly new start. There will be a refreshed senior management team and, once elections are held in 2011, potentially new members. The orders provide for the establishment of an implementation executive to lead preparations for both new councils. These executives will be led by the leaders of the current city councils, with membership drawn not only from the city councils but also from those county councillors who represent areas in the cities. The orders also place a duty on all councils to co-operate during the transition.

My final point picks up on the JCSI's concern that the provisions seeking to cancel the thirds elections due in both Norwich and Exeter in 2010 are an,

"unexpected use of the powers", in the Local Government and Public Involvement in Health Act 2007. We gave all the affected councils in Norfolk and Devon the opportunity to comment on the proposed transitional arrangements for creating new unitary councils. That included the option of holding elections to any new unitary council in either 2010 or 2011. Since all the local authorities in Devon and Norfolk expressed the clear and reasoned view that any elections should take place in 2011, the orders seek to do that. Consequently, the orders provide for the cancellation of elections for one-third of the members in Exeter and Norwich due to be held in 2010. In truth, the effect is that those elections are postponed to 2011. That is necessary to maintain the integrity of the local democratic process as, if elections in 2010 were to go ahead, there would be questions about their purpose since those elected would serve only a year's term. Noble Lords will note that the provisions cancelling elections are similar to those made in previous structural change orders, which hindsight has shown to have worked effectively.

I want to say something briefly about the direction that the Secretary of State gave to the department's accounting officer on 10 February. It is a myth that in some way the Secretary of State and officials are at loggerheads-nothing could be further from the truth. The process of seeking a direction is a standard part of the administrative processes of government. It was proper for the Permanent Secretary, as accounting officer for the department, to draw attention to the fact that Ministers had not chosen the option which appeared to deliver the best value for money. However, it was equally proper for the Secretary of State to set out Ministers' reasons for their decisions, and to direct officials to implement those decisions.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Communities and Local Government, Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Work and Pensions, Parliamentary Under-Secretary (Department for Communities and Local Government) (also in Department for Work and Pensions), Parliamentary Under-Secretary (Department for Work and Pensions) (also in the Department for Communities and Local Government)

The noble Lord may well be right; certainly it is a standard part of the processes of government and has been asked for in other departments over the years. The direction found its way into the public domain because we put it there. It would have done so in any event because it is sent to the Comptroller and Auditor-General, who would pass it on to the Public Accounts Committee.

The Secretary of State gave careful consideration to the Permanent Secretary's advice before taking decisions on all the proposals. That recognised that accounting officers have certain responsibilities and that Ministers' responsibilities range more widely. I add that the Permanent Secretary makes it clear in his letter that those ministerial reasons are wholly legitimate and proper for Ministers.

We have taken our decisions by looking at and weighing the substance of the complex issues before us, seeking to balance a number of factors in each case. These are not simple issues. It is the task of government to look at the matters carefully, to balance the competing arguments, to assess the evidence and the differing claims, and finally to reach a balanced judgment as to what way forward is best for the people of the cities and counties involved. We recognise that the decisions that we have taken are controversial but, after careful consideration of all the issues, we are confident that they are in the best interests of the people of Devon and Norfolk. If we had fought shy of the decisions because of the controversy associated with them, we would be ill serving the people of Exeter and Norwich, and of Devon and Norfolk. The Government have faced up to their responsibilities.

Photo of Lord Ryder of Wensum Lord Ryder of Wensum Conservative

I would be most grateful if the Minister would answer one question. I declare an interest as a former Norfolk Member of Parliament who represented many suburbs of Norwich. In his evidence to the Merits Committee-item 20 on page 72-a former and most distinguished leader of Norfolk County Council stated:

"Since 2007 I have only been asked to give my views on all-unitary arrangements, but to give them still, on the basis of the agreed criteria. I was therefore completely shocked to hear that, in making his decision for Norfolk, the Secretary of State concurs that these criteria are still not met, but that 'for compelling reasons' he had decided to depart from the rationale and approach for decision-making I was asked to give my views on, and create a unitary Norwich on its current boundaries anyway. The Secretary of State did not communicate this changed approach in advance nor consult on it ... This is surely unlawful".

What are the Minister's views on that?

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Communities and Local Government, Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Work and Pensions, Parliamentary Under-Secretary (Department for Communities and Local Government) (also in Department for Work and Pensions), Parliamentary Under-Secretary (Department for Work and Pensions) (also in the Department for Communities and Local Government)

That was a long question that I thought the noble Lord would ask later in the debate. The issue of compelling reasons is as I outlined in my introduction. It was always clear in 2009 that, although the then Secretary of State decided to proceed only with proposals that met the criteria, he recognised that that would not necessarily always be the case, and that there should be scope when criteria were not met still to support and bring forward proposals if there were compelling reasons for them; and that when criteria were met, that did not necessarily in itself mean that the proposals should be brought forward if there were at the time compelling reasons for them not to be.

I outlined the two areas of compelling reasons that caused us to proceed with our decisions, which concerned the benefits arising from a total place and the supreme importance of generating growth and making sure that we do everything we can to sustain growth in our country, particularly at the moment, given where we are on the issue of the deficit. That seems entirely appropriate. To suggest that somehow we should only ever stick to the criteria is not consistent with what has happened in the past. I beg to move.

Amendment to the Motion

Moved by Lord Tope

To leave out from "that" to the end and insert "this House declines to approve the draft Order laid before the House on 10 February because it does not comply with Her Majesty's Government's published criteria with respect to affordability of the future structure, without providing more evidence on whether the course proposed is likely to achieve its declared policy objective".

Photo of Lord Tope Lord Tope Liberal Democrat

My Lords, I will begin by declaring indirect interests. I was born in Devon, albeit within what are now the boundaries of the Plymouth unitary authority. My father's family has been Devon born and bred for as many centuries as we have been able to trace. Secondly, I have been a London borough councillor for the past 36 years. London boroughs have been unitary authorities for the past 45 years. Therefore, I need no convincing of the advantages of unitary local government. I start from a point of understanding of, and sympathy for, those in Exeter and Norwich, including some in my own party, who are keen to see these orders passed tonight. Indeed, I suspect that if I were a city councillor in Norwich or Essex, I, too, might be keen. Rightly or wrongly, councillors there see it as their last chance to gain unitary status for their cities. However, it should not be unitary status at any cost. What is before us tonight is all that is on offer at this time, and it is not good enough. The boundaries of the two proposed unitary authorities are wrong, and the timing is wrong-just as we head into what we all know will be the most challenging financial climate that local government has ever known.

Even more importantly, we have a responsibility to consider the effects of the draft orders on the wider counties of Devon and Norfolk-not just on the county councils, but on the citizens, businesses and other statutory and community organisations that represent them. Others with greater personal knowledge and experience of that than I have will speak in this debate, so, in the interests of brevity, I shall leave it to them to spell out the concerns of the people of Norfolk and Devon, and indeed of Norwich and Exeter. Instead, I shall concentrate, as did the Minister to a large extent, on the process that has led us to this point. It is a process that seems to unite everyone, regardless of their view about the outcome, in condemning the most appalling mishandling by this Government.

Although the Government will be accused of rushing through these orders tonight within days of the dissolution of Parliament, I agree with the Minister that this has in fact been going on and on for more than three years, characterised by much legal dispute and the expenditure of huge sums of public money. As the Minister said, in 2006 the Government invited local authorities to submit proposals for unitary status. They stated that all such proposals would have to meet each of five strict criteria, which the Minister listed: affordability, a broad cross-section of support, strategic leadership, neighbourhood empowerment and value-for-money services. So far as I am aware, every unitary authority established since that time has been judged by the Government to meet each of those five criteria. Can the Minister tell us of any that did not meet any of those criteria at the time they were proposed?

The Minister has outlined the sad history since that time and I shall not go over it again in any detail but I want to say, most importantly, that in December 2007 the then Secretary of State announced that she did not think that either Exeter's or Norwich's bids for unitary status would meet the Government's criteria, particularly on financial grounds. The Minister has already told us that. The Secretary of State therefore referred both bids to the Boundary Committee for advice.

For reasons probably known to many here, it took two years for that advice to be deliverable but in December last year the Boundary Committee for England published its proposals. It recommended single county-wide unitary councils for Devon and Norfolk. It also made proposals for Suffolk, which are not the subject for debate tonight. Most significantly for tonight's debate, it recommended against separate unitary councils for Norwich and Exeter on the grounds that they would not meet the Government's affordability criteria.

In February, the Government announced that they rejected all the Boundary Committee's recommendations and proposed instead to create unitary authorities for the cities of Exeter and Norwich, even though they agreed with the Boundary Committee that such proposals would not meet their own affordability criteria. The Permanent Secretary at the Department for Communities and Local Government, in his role as accounting officer, was so concerned about this that he wrote to the Secretary of State seeking a political direction because he did not believe that the proposals represented value for money. His letter is published in full on pages 29 and 30 of the Merits Committee report. We have just had an exchange on this and the Government have said, rightly, that his action in doing so was "perfectly proper" as accounting officer-no one questions that-but that Ministers had a wider role. Indeed they do. Therefore, while his actions were certainly perfectly proper, they were also unprecedented.

As the noble Lord on the Opposition Front Bench asked in his interjection, has there been any other occasion when that has happened? Now that he has notice of the question, can the Minister say whether there has been any other occasion, either within the Department for Communities and Local Government or any of its predecessor departments, when the accounting officer has felt the need to seek a political direction? I ask the question, as often is the case, in the pretty certain knowledge that the answer is no and that this is indeed unprecedented. Therefore, it may be proper, and it may be, as the Minister understandably sought to downplay, a routine part of government, but this is the first time that it has occurred. It is unprecedented and something that we should all take very seriously.

Next I turn to the report of the Merits of Statutory Instruments Committee, to which reference has also been made. It examined the draft orders in some detail. It sought further information from the department. I am sure that the report will be much quoted in tonight's debate, so I shall confine myself to quoting the conclusion. In paragraph 35, the Merits Committee concludes that,

"it has insufficient information on which to be able to determine whether these Orders are likely to implement their policy objective ... they may imperfectly achieve their policy objective".

Faced with that conclusion, we might reasonably expect the Minister to give us the evidence which the DCLG failed to give to the Merits Committee's satisfaction, on which it based its belief that there are compelling reasons. The Minister has repeated the Government's belief, but has again failed to give hard, factual evidence to support that belief. Tonight we are asked to accept that this is an article of faith from the Government.

Devon and Norfolk county councils are challenging these decisions in the High Court on 28 and 29 April. In his letter to the Secretary of State, the Permanent Secretary said that he had "clear legal advice"-I suggest that clear legal advice is a little unusual in itself-that the risk of being successfully challenged in judicial review hearings is "very high". It is not 50:50 or 60:40 but very high.

Last Thursday, the Joint Committee on Statutory Instruments published its report on these draft orders. It concluded that, if approved and made,

"there will be a doubt as to whether they would be lawfully made; that in one respect in particular they would represent an unexpected use of the power conferred by the enabling Act; that in one respect their purport requires elucidation; and that in one respect they fail to accord with proper legislative practice".

The "unexpected use of the power conferred by the enabling Act", to which the Joint Committee refers, is the cancelling of the city council elections due to be held on 6 May. As the committee points out:

"If the court decides that the decisions to implement the unitary proposals were flawed"- the Government has "clear legal advice" that they are-

"it will be too late to restore the elections which will have been cancelled".

So tonight we are asked to pass orders which the Government accept do not meet their own strict criteria on affordability; which the accounting officer believes do not represent value for money; which the Merits Committee, in its measured tones, believes may imperfectly achieve their policy objective; which the department has "clear legal advice" are of doubtful legality; and which the Joint Committee on Statutory Instruments has drawn to the "special attention" of each House and may be unlawful. We will also be cancelling elections 45 days before they are due to take place, with no time to restore them if that proves to have been unlawful.

I know that this House is always reluctant to support fatal Motions, but if ever there was a strong case for doing so, surely this must be it. Surely, we have a duty to all these bodies to say, "We've heard what you say and we will act on it". Faced with all this evidence and more, can we simply say, "Oh dear, we really do regret that, but there is nothing we can do"? If ever there was a strong case to vote against orders, this must be it.

If these orders are passed tonight, it may be that they will be overturned in the courts at the end of next month. It may be that another Government will be elected the following month. It may be that that new Government will give high priority in their first 100 days to reversing these orders before implementation. Any or all of those things may happen, but they may not.

The one certainty of passing these orders tonight is that the city council elections will be cancelled only 45 days before they are due to be held. We will be denying the citizens of Exeter and Norwich their democratic right to express their view in an election. That is a very serious step to take at such short notice and one that your Lordships should consider very carefully before taking. Tonight we can simply "regret" all of this, but let it happen anyway; or we can say, "This is wrong!" and stop it happening. The decision is ours. I beg to move.

Amendment to the Motion

Moved by Baroness Butler-Sloss

At end to insert "but this House regrets that Her Majesty's Government have laid before Parliament the draft Order, which does not comply with the Government's published criteria with respect to affordability of the future structure, without providing more evidence on whether the course proposed is likely to achieve its declared policy objective; and calls on Her Majesty's Government not to proceed with the draft Order before conducting further consultation with the residents of Norwich and Norfolk".

Photo of Baroness Butler-Sloss Baroness Butler-Sloss Crossbench 5:30 pm, 22nd March 2010

My Lords, I shall speak to the amendments I have tabled. I shall, in due course, ask the House to support me if the amendments moved by the noble Lord, Lord Tope, do not meet with the approval of the House. I feel the wording of my amendments perhaps more appropriately reflects the spirit of this House than the fatal amendments, about which you have just heard, and I propose therefore to abstain on the amendments tabled by noble Lord, Lord Tope. I hope very much that the House will support me in due course on the amendments to which I am about to speak.

I declare an interest as a member of the Merits Committee, but I made a point of not attending on the occasion when it considered these two orders in order to feel that I can speak entirely freely. I live 10 miles outside Exeter and my parents and grandparents and all my family on my maternal and paternal sides come from Norwich, so I know and love both cities. However I feel strongly that it is the duty of a Cross-Bencher, as a Peer independent of all political parties, to speak out if the Government of the day, of whichever political persuasion, seek to pass legislation that is seriously flawed, and that is what I propose to do today, even though it is unusual for a Cross-Bencher to do so.

Noble Lords have already heard a great deal from the noble Lord, Lord Tope, about the background to this, the issues that arise on the orders and the reasons why they are objectionable. These two orders are different from earlier unitary authority orders that came before this House. Indeed, they must be unique in the way in which the government department is presenting them. They therefore require the special attention of this House, as the noble Lord, Lord Tope, said. The Merits Committee pointed out:

"Both these proposals differ geographically from the seven previous orders, because they intend to convert only the central part of the defined area to unitary status, leaving it surrounded by a 'doughnut'- a lovely word-and that,

"geography is important to the Impact Assessment", and therefore to the cost implications.

I shall concentrate upon the other points made in the report by the Merits Committee and then summarise the points upon which I rely in support of the two amendments in my name. It is inevitable that I will tread a little over the ground already trodden by the noble Lord, Lord Tope, and I hope the House will forgive me. The noble Lord, Lord Tope, has already set out the conclusion of the Merits Committee. In coming to that conclusion, the committee received a considerable volume of written evidence that it considered and dissected. It raised questions on the unsatisfactory nature of draft orders. The main points made by Merit Committee were that the proposed implementation of bids did not conform to all five criteria and that the introduction of additional reasons for selection would therefore appear to be contrary to previous practice-it had not happened before these draft orders.

The Merits Committee stated that it would have expected the department to set out in more detail the basis for setting aside the Boundary Committee's recommendation. It pointed out the lack of evidence for the two compelling reasons, and when it asked the DCLG, as it tends to do, how the change of status was likely to overcome the cost disadvantages in this area, the department simply repeated the Written Statement and did not estimate any cost savings or efficiency gains.

The Merits Committee commented that it would be helpful to the House if the DCLG made a much more explicit analysis, which I do not believe we have yet received, of how much economic growth each city, as distinct from each county, is expected to generate as a result of becoming a unitary authority. As I understand it, the likely growth is expected to be outside the boundaries of each city. This is true particularly of Exeter; Cranbrook is a new village that is about to be built, and there is to be a Skypark and various other things that will grow very dramatically but not within the city boundary.

The Merits Committee asked why the department relied on the Total Place approach as a compelling reason. It suggested that the House might wish to seek a clearer explanation from the Minister as to why this approach was considered a compelling reason for granting the city unitary-authority status. I may not have listened as carefully as I hope I did, but I do not think that I got a very good answer on that. The committee pointed out the lack of consultation-there has been a great deal of consultation, but not on the two so-called compelling reasons-and, in view of the very strong opinions for and against the Government's proposals, questioned the extent to which these unitary proposals, which rely on collaborative working, were now feasible. The committee made a very practical point here.

The Merits Committee also supported the point made by the Permanent Secretary in his letter that,

"as yet there is no clear evidence of the costs and benefits that may arise".

It suggested that the choice between preserving the status quo and creating new unitary authorities,

"is one of the key issues on which the House may wish to take a view: which course of action best represents 'the public interest' and which section of the public's interests should take priority".

The Merits Committee also suggested:

"The House may wish to consider whether or not sufficient evidence that the course proposed in the Orders will solve the problems identified without creating unacceptable consequences elsewhere, has been provided".

I suggest that it certainly has not been. The committee questioned whether there had been a consistent decision-making process, and asked whether it was right to depart from the published procedure during the same tranche of applications, particularly without further consultation. Were the compelling reasons persuasive or was sufficient evidence published elsewhere to reassure the House? The answer is clearly no. The committee also questioned the timing of these orders when there are to be council elections, about which the noble Lord, Lord Tope, has already spoken.

I will now summarise the points that demonstrate clearly that these orders should not be supported by this House without further consultation and without the Government reconsidering them much further. First, neither Norwich nor Exeter meets the Government's own criteria of affordability and, in the case of Norwich, value for money. Secondly, in December 2007, the Secretary of State rejected the Norwich and Exeter proposals. Thirdly, the Secretary of State asked the Boundary Committee for its advice, and on 7 December 2009 it advised that the Norwich and Exeter proposals should not be implemented as the Secretary of State's previous concerns had not been displaced by any evidence received by the committee during its review. Fourthly, on 8 February, the Secretary of State received a letter from the Permanent Secretary, to which the noble Lord, Lord Tope, has referred, which said:

"The approach you are currently proposing makes it difficult for me to meet the standards expected of me as Accounting Officer".

Those are extremely strong words. On 10 February of this year, the Secretary of State accepted that the criteria were not met, but found compelling reasons without any supporting evidence and without the consultation on the compelling reasons.

The Merits Committee reported that the orders may imperfectly achieve the policy objective. The cost implications have not been properly considered, nor the impact on truncating each county and the effect on some district councils, nor the consideration of unforeseen consequences. Perhaps most damning is the report of the Joint Committee on Statutory Instruments as recently as last week. It drew the special attention of both Houses to each of the draft orders on the grounds that if they are approved and made, there will be a doubt as to whether they will be lawfully made.

The JCSI went on to say that,

"the Houses should be in no doubt as to the proposition which the Secretary of State puts to them. It is that they should approve legislation implementing decisions which the Secretary of State himself is advised may well be successfully challenged".

That seems to me to be the most extraordinary situation which this House faces today.

Will the Minister explain why this legislation has to be pushed forward at this time? What is the urgency for it? Why do we need it now, particularly in the light of the warning of the Permanent Secretary that the judicial review may well be successful-it has a high chance of success-the issue of lawfulness as raised by the report of the Joint Committee, and the impact of the cancellation of the May local elections? I am saddened that the Government do not seem to think that these are matters which weigh with them. I would urge the Minister again to consider withdrawing these orders and to reconsider the overall plans for the counties of Norfolk and Devon, and the cities of Norwich and Exeter.

Photo of Lord MacGregor of Pulham Market Lord MacGregor of Pulham Market Conservative 5:45 pm, 22nd March 2010

My Lords, I want to speak only about the Norwich and Norfolk order. I declare an interest as a former Member of Parliament for south Norfolk for 27 years. I live in the county and I am much involved in many organisations in the county, a lot of which are completely non-political. I have received many representations on this issue. Indeed, I was speaking as president of the Norfolk Association of Village Halls this weekend about this very subject, because there was great concern about the impact for parish and district councils.

The Minister is very conscientious, which I admire. But if he had come to Norfolk and delivered the speech that he has delivered today, he would have been told that he was living in a different world from that in which they live-a world in which perhaps, as used to be said of former Labour Governments, Whitehall knows best. Much of what he said completely flies in the face of the facts. I believe that he would be howled down and greeted with disbelief. I think that he concluded by saying that this was the best of both worlds for Norfolk. Very few people in Norfolk believe that. In fact, they believe quite the opposite.

I do not regard this as simply a local matter. The Merits Committee report demonstrates that this should be a matter of great concern to this House in terms of government processes and the huge inadequacies in these two cases. I will not repeat all the different points, which I had listed. But the noble and learned Baroness, Lady Butler-Sloss, did brilliantly in her synopsis of all the key issues where I think that the Minister is plain wrong.

Initially, I want to make a point about the letter of the Permanent Secretary for the Department for Communities and Local Government. I was in the Government for 15 years and I was in charge of departments. I do not recall ever seeing a letter like that. Of course, what the Minister said is strictly accurate in terms of the constitution, but he did not say how often a letter like that is put forward, which is crucial. The point made by the noble and learned Baroness, Lady Butler-Sloss, about the position of the Permanent Secretary as accounting officer is very real. If this order goes through, he will have a difficult task in front of the Public Accounts Committee and his way out will be to say, "I warned the Minister", which is why he has written the letter. In terms of value for money, affordability and all the things that he addressed, the Minister simply has rested on the argument that the Minister is entitled to say, "I ignore your letter of direction". But it is a very serious matter.

I am not a great reader of Merits Committee reports, but having read this one I cannot believe that there has ever been such a devastating report. I will not repeat all the points made by the committee, but anyone who reads the summary will see that time after time, the Government's case is destroyed by the report of the Merits Committee. The Minister has said nothing about that; he has simply relied on his very weak arguments.

The proposals go against the Government's own criteria in their own legislation, especially in relation to value for money and affordability. In the current economic climate, these are two vital matters. The local authorities in Norfolk, as elsewhere, are going to face very challenging times and will have to make many cuts, efficiency savings and so on. They are addressing those issues, but to ask them to face the issues of affordability and value for money as well is a critical mistake by the Government.

The Minister said that Norwich City Council would have new leadership. My goodness, it needs it. The council has been heavily criticised on the grounds of value for money and affordability and, in four of the past five years, its accounts have not been approved. It is a pure act of faith on behalf of the Minister to believe that new leadership will change all of that.

As has been indicated, this decision runs in the face of a previous Secretary of State's decision, which was the correct one in terms of the legislation. The Boundary Commission does not recommend this proposal. A letter written by the Permanent Secretary at the Department for Transport on this issue has now been revealed. The Minister referred to the wider issues of environment, infrastructure and so on. The Permanent Secretary at the Department for Transport criticised this proposal on transport grounds. He also said in his letter that he believed that Treasury officials would have difficulties with the proposal. I have been unable to find out what the Treasury officials said and perhaps the Minister will comment on that. As a former Chief Secretary myself, I have to say-I have been making this representation to the Treasury-that if I had had in front of me a proposal along these lines I would have asked some serious questions of the department. I cannot believe that the Treasury, in the current economic situation, thinks that this is a sensible proposal.

The Minister referred to the interests of the people of Norfolk and adequate consultation. He implied that this would not have an impact on the rest of Norfolk. However, in almost its opening paragraph, the Merits Committee states:

"The committee therefore remains unclear how unitary status is expected to solve the problems identified in relation to each city, without creating unacceptable consequences elsewhere".

Those unacceptable consequences are for the rest of the people of Norfolk and for the councils involved. The Minister referred to consultation but he did not say that all other seven Norfolk councils are against this proposal and that they have made that very clear and very strongly, in recent days and before. The Minister did not refer to the Department for Communities and Local Government's own consultation exercise in December and January, which revealed that only 3 per cent of those consulted favoured a Norwich unitary council. How on earth can the Minister then say that this is in the best interests of the people of Norfolk and provides the best of both worlds for Norfolk when only 3 per cent of those consulted think that that is the case? Does the other 97 per cent not matter? Is it not a case, once again, of Whitehall and a few in Norfolk knowing best?

On judicial review, as has already been stated, the Permanent Secretary at the department warned the Secretary of State that the risk of a successful challenge was very high-I suspect that very few Ministers have ever had a Permanent Secretary telling them that the risk of judicial review is very high-and the Secretary of State accepted it. The amendment of the noble and learned Baroness, Lady Butler-Sloss, deals with this issue correctly. The judicial review will undoubtedly take place and, if the Permanent Secretary is right and the risks are very high, it will reach a conclusion after the House has prorogued. We will be in a twilight period and we will then have a new Government and a new situation. Surely, irrespective of the legality, it makes proper procedural sense for this decision not to go ahead until the judicial review has been heard. The amendment proposed by the noble and learned Baroness, Lady Butler-Sloss, will achieve that by delaying this proposal until we have further evidence, not least that of the judicial review.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour 6:00 pm, 22nd March 2010

My Lords, we have in Norwich an excellent Eastern Counties press. Its morning paper, the Eastern Daily Press, is county-focused; the Evening News is the city paper. Both are from the same stable. On the day that the Secretary of State made his announcement proposing unitary status for Norwich, the morning paper quoted in its headline a Tory Norfolk MP, describing it as,

"the worst of all worlds".

The Evening News, from the same stable, had as its headline:

"A New Dawn for Norwich".

Those views, of the counties and the cities, as we have already heard today, are probably irreconcilable, even though I know that when Norwich thrives, so does Norfolk. I should here declare my interest as a former leader of Norwich City Council, a former Norfolk county councillor, a three times parliamentary candidate for a Norfolk constituency with a large rural population, an honorary freeman of Norwich as well as a DL for the county of Norfolk.

Given my commitment to Norfolk, as well as to Norwich, I would not support unitary status for Norwich if I did not truly believe that it would benefit Norfolk people, half of whose rural population, according to the Audit Commission, experience deprivation and look to the city for their jobs. More people commute into Norwich for their work than into any other city in the UK apart from London. Norfolk people-not just Norwich people-need a vibrant, strong, unitary Norwich if they are not to be left behind. When Milton Keynes became unitary, it enriched Buckinghamshire. When Leicester, Derby, Nottingham and Southampton became unitary under a Conservative Government, no one talked about ripping them out of the heart of their counties; no one now would say that they should be district councils; everybody now believes that they have enriched not just their cities but their county and their rural hinterland as well. At least 10 unitary councils, from Hartlepool to Blackburn to Reading, are no larger than Norwich is today, and they are driving forward their local economies. Norwich is the largest district council that is not a unitary. We are suffering as a result and, with it, the people of Norfolk. The Work Foundation states:

"Other cities have benefited from single tier arrangements, and have used these to strengthen relationships with the rural hinterland".

If Parliament agrees, Norwich will be able to go into bat for the people of Norfolk, who along with people in the north-east and Cornwall are among the poorest in the country. They need that body on their side.

Why am I so sure that Norfolk's people need a unitary Norwich? Much was made of what the noble and learned Baroness, Lady Butler-Sloss, said-and she was right-about there being a sparsity of forward-looking evidence for economic development under a unitary authority. But why look in the glass, when one could look at the history book? I joined the city council in 1968, when we were a unitary county borough. I helped woo a major company, then Bland Payne, part of the Sedgwick Group, to Norwich. I helped organise the site, the planning consent, 150 key-worker houses, the roads, the training support and the transport. It was a one-stop package, and it has become the second-largest reinsurance company in the world.

Fifteen years later, as leader, I was approached by another major financial company. I offered it the site and key-worker houses, but I could not guarantee it the highways and planning consent that it needed for its package, as it was a county function. When it understood that we were two-tier, and that it would be dealing with two sets of offices, to and fro, it walked; it did not want the hassle. Because Norwich was not unitary, I lost 600 jobs, not just for the people of Norwich but for the deprived people of Norfolk as well. That is why these orders matter. Cities like Norwich and Exeter are not leaving their county and erecting walls. On the contrary, they want to power their counties with good knowledge economy green jobs, as cities have always done over the centuries. After all, Norwich is the regional capital of East Anglia-but we cannot do this on the revenues, resources and powers of a rural district council. As Professor Ron Johnson of the Boundary Committee wrote, when he left it, Norwich's economic development has a multiplier effect well beyond its boundaries. At the moment, the Work Foundation says that economic planning is schizophrenic at best and dysfunctional at worst. It is balkanised.

When Norwich was unitary, we built the prestigious city college and, later, the county bought in. We developed an international airport and the county joined us. We rebuilt the theatre royal and the county bought in. The city campaigned for a new university, the UEA, and gave up its municipal golf course for it. Indeed, the factory girls in Norwich's Rowntree Mac gave up half a day's pay for the University of East Anglia to start. The county generously and properly backed it. I have no criticism of the county coming in behind the city; unitary cities are focused, fleet of foot, innovative and entrepreneurial; the county council, on reflection, over time, usually joins us. But now we are fettered. The city is planning for 30,000 new city jobs by 2026. It needs 100,000 square metres of office space in its city centre-and we are fettered.

At the core of these statutory instruments is a recognition that since medieval times city and countryside are different. City density and rural sparsity need different responses. That is why we have local government at all-to recognise that difference. If local government is not about local difference it is not local government. Indeed, precisely because the city of Norwich, or the city of Exeter, is one district council among many under the county council, understandably and reasonably enough the county seeks to offer a standard, uniform service that is a rural-level service across its acres. The result is to raid and run down the cities. As the Merits Committee said on page 12 of its report-much quoted tonight, there are,

"genuine concerns that the differing needs of city and rural dwellers are not being adequately met by the current arrangements".

Precisely. We have been badly served.

I can give some examples. In the past six months alone our street lights will have been turned off in the city of Norwich, apart from a few central streets, between midnight and 5 am, because of works in the rural areas. The county proposes to close two day centres built by the people of Norwich to redistribute resources elsewhere in the county. The city and local business, particularly local business, wants to pedestrianise a medieval shopping street through the centre of Norwich, and county councillors who live 20 or 30 miles away are forbidding it. The county's ruling 10-member cabinet contains not a single Norwich county councillor-not even a city Tory county councillor. It has just established an employment and skills board for Norwich, yet, despite such a high proportion of jobs being in Norwich, the city council will not be represented on that body.

How can the county understand the needs of the city with its very different rural experience? Let me touch on education. When the city ran education before 1974, there were six comprehensives in Norwich. From four of them you could get to university, and from three you could get to Oxbridge, as my son did. As former teacher, Mr Corney, wrote to the local press, under the council's watch one school is closed and of the other five four have been in special measures, three have had to restart with new names and two have been handed over to private providers. We estimate that something like £12 million a year is being redistributed away from city schools to help rural schools. I do not deny the right of the county to support rural schools, but I deny it the right to run down Norwich at that expense.

Much has been made not of whether the outcomes of unitary status are desirable but of the processes, and it is to that point that I now turn. Back in the summer of 2006, the White Paper outlined five criteria for unitary status: value for money, affordability, stakeholder ownership, strong leadership and neighbourhood empowerment. Those criteria were not statutory; they were not in the legislation. They were in consultation documents along with the White Paper; they were guidance, four years ago, from which the Secretary of State was entitled to depart.

The noble Lord, Lord MacGregor, has raised value for money and affordability. Four years ago, the Liberal democrat administration that we, the Labour Party, inherited in Norwich, had a projected £2 million deficit. Now we are saving £4 million a year and have £8 million in balances, and we estimate that the transition costs will repaid in three years, with further savings of £4.5 million a year to follow. I have crawled over those figures.

The Permanent Secretary, as accounting officer, rightly pointed out, in a letter much quoted today and published by the Secretary of State, that none the less value for money came from the cheapest option. No one today has said what the cheapest option was. I shall tell the House: it was, and this was favoured by the Boundary Committee, a unitary Norfolk. The savings, and the best value, came from abolishing all the district councils in Norfolk, including Norwich, and producing a unitary council with a population almost the size of Birmingham and almost the size of Cyprus-and we call it local government. No doubt we could make even greater savings by abolishing local government altogether.

A second criterion was stakeholder ownership. There was no support whatsoever for a unitary Norfolk county council. Even the Norfolk County Council would join a judicial review against giving the powers to itself. So two of the original five criteria, in ways that could not have been foreseen in 2006, cancelled each other out.

Meanwhile, although unitary cities had the support of key stakeholders across the parties, business and universities, we are told that we should have had a referendum and consulted the whole population. Who would vote? Norfolk dwellers unaffected by the proposals, living 40 miles away? After all, Norfolk's population is five times larger than Norwich's.

During the debate in Westminster on 2 March, Norfolk Tory MPs stood up one after another to demand this consultation. Of each one Charles Clarke, the MP for Norwich South, asked, "In what way are your constituents disadvantaged if Norwich becomes unitary and the rest of Norfolk's local government structure is left unaffected?". From those Tory MPs, answer came there none.

Instead, four years on and after a deep recession, the Secretary of State rightly adds two additional considerations: economic development, which is what cities like ours and Exeter do-fettered though we are-and a commitment to Total Place, a holistic and unitary approach to all public services.

I remind the House that in two-tier counties, services that should be integrated, like housing and social services are splintered. Where does the adult Down's son who needs supportive housing go? Where do the frail elderly who wish to stay in their own home but need support go? Other services, like planning, are concurrent. Still other services, like weights and measures and environmental health, overlap. Where do you go if you want to complain about some mouldy cheese that you have bought? Yet other services, like highways, are done by agency.

At Norwich's ancient-indeed, probably Anglo-Saxon-Freemen ceremony on Friday, someone told me about their recent council tax bill. "It's a complete muddle," he said. Nobody in Norwich knows who does what, to what standards, to what price or to what accountability. Therefore, under the present structure, they cannot hold city or county to account. Instead, we get confusion and inconsistency-and, sometimes, ignorance, duplication and disagreement.

The noble Lord, Lord Filkin, cannot be here today but, with his local government background, he was the founding chair of the Merits Committee. He has asked me to say that,

"strong central cities like Exeter and Norwich need the better governance and clearer accountability that comes from unitary status, to address the challenges within their boundaries and to contribute positively to the wider needs of their areas"- wise words from the former chair of the Merits Committee. My regret is that it has taken so long to reach the Floor of this House, as the Boundary Committee kept proposing a unitary county that no one wanted together with five judicial reviews. Otherwise, these proposals would have been before your Lordships 18 months ago.

I have one last point. In April 2006, the noble Lord, Lord Bowness, a man experienced in local government, opened a local government debate from the Conservative Benches. Said one speaker in that debate,

"I understand entirely the concerns and frustrations ... about the status of Norwich. Most people", this speaker said,

"apart from a few diehards in the counties at the time would have conceded unitary status to the former county boroughs".-[Hansard, 27/4/06; col. 356.]

That speaker was the Conservative, the noble Lord, Lord Bowness. He was right then; I hope that the House will agree that he is right tonight and support the Government's Motion.

Photo of Lord Bowness Lord Bowness Conservative 6:15 pm, 22nd March 2010

My Lords, it had not been my intention to speak in this debate because I cannot claim a connection with either Norfolk or Suffolk, but the noble Baroness, Lady Hollis, was kind enough to say that she was going to refer to what I had said on a previous occasion. I am not going to say that I retract that, or that I consider that I have changed my view. It was a mistake, but it was one made 30 years ago, to abolish the county borough status of the major cities in the country. Those ancient cities clearly had a sense of history and identity quite different from other towns within the country. The role of the county was less understood then, perhaps, than it is now. I am not trying, then, to say that I was misunderstood or that I retract, but it was 30 years ago and local government has, for better or for worse, changed significantly.

I am no longer active in local government. I cannot say that my instincts towards the former county boroughs and the large cities have changed; they have not, but the financial situation has. While my instincts may not have changed, the questions raised by the Merits Committee which are before your Lordships are compelling. The arguments put forward by the noble Lord, Lord Tope, are also convincing; the amendment put forward by the noble and learned Baroness, Lady Butler-Sloss, is not fatal.

It seems to me that those of us with a genuine interest in local government-and in getting the local government structure right-ought therefore to be prepared to support the noble and learned Baroness on her amendment, to ensure that these changes are not made in the dying days of a Parliament. That is not asking it of anyone who believes, as I do, that large cities have a particular place and role in local government. It does, however, enable this proposal to be further examined in the way suggested by the Merits Committee.

Photo of Lord Burnett Lord Burnett Spokesperson for Communities and Local Government

My Lords, I support my noble friend Lord Tope, who made an excellent and compelling speech, in marked contrast to the reasons advanced by the Government in support of this order. I declare that one of my law firm's offices is in the City of Exeter. I have known the city well for over 40 years, and my firm acts for many people in and round the City of Exeter. I have lived most of my life in Devon and I was Member of Parliament for Torridge and West Devon from 1997 to 2005.

I pay tribute to the Merits Committee for its report on this matter and to the Joint Committee on Statutory Instruments. These committees are drawn from all parts of the House. Members of both have put on record, as we have heard many times already this evening, that they have many and profound misgivings about these orders. Reports of both committees highlight the fact that there is clear written advice from the Permanent Secretary himself to the Minister that there is a risk of these decisions being successfully challenged in judicial review proceedings. I emphasise that the Permanent Secretary told the Minister that the likelihood of these challenges succeeding was very high. We have also heard this evening that this is a unique event in the history of this department of state.

These proceedings have now been taken and are due to be heard towards the end of April. Many of us in this House support the concept of unitary authorities, but I am amazed that Ministers have proceeded with these orders in the light of the deep and fundamental flaw in the reasons propounded to support them. I shall speak to the Exeter order because that is my area of interest, but most of the points I set out are equally applicable to the Norwich order. The Exeter order, as we have heard, should have satisfied all five criteria set out in the 2006 document, Invitation to Councils in England. The first criterion is that,

"the change to future unitary structures must be affordable; (defined as self-financing, with transitional costs being more than offset by savings over no more than 5 years)".

The Department for Communities and Local Government's own impact assessment of the draft order includes an analysis of costs and savings which shows a net cost of Exeter and Norwich becoming unitary authorities of £1.6 million over six years. Thus, the first test is failed by the department's own impact assessment. I am told by very reliable sources that £1.6 million over six years is a minimum cost figure, and it is likely to be considerably more than that.

The figure contrasts dramatically with a net saving of £42.4 million if Norfolk and Devon became unitary including their capital cities. This figure comes from the department's impact assessment. The loss to the public purse is at least £44 million if these proposals are implemented. It is not as though the public Exchequer is awash with money. The Government are borrowing nearly £500 million every day just to function, and yet they seek not only to drive a coach and horses through their own value-for-money test, but to add substantially to public sector debt-the debt that we all carry in this country. It is quite preposterous.

Ministers, in contradicting the Permanent Secretary's overwhelmingly compelling advice, have put up two new reasons to support the orders. These are not tried and tested reasons; they have not been consulted on. The Minister has resorted to "back of a cigarette packet" political expediency. The first reason is to give priority to jobs and economic growth, which could not be contemplated in 2006 when the criteria were developed. As the Merits Committee states, this is an unquantified assertion. I would add that it was untested and has never been consulted on, and there is no logic or rationale whatever for the statement. Indeed, the Merits Committee has asked the DCLG to give a much more explicit analysis of how much economic growth each city, as opposed to each county, is expected to generate as a result of becoming a unitary authority.

The second so-called reason is the total-place approach, whereby, as unitaries, the two cities could open the way to improvements to the quality of public services. As with the first test, there is no logic, body, work, consultation or study to back up this assertion. As the Merits Committee rightly states, the Minister should provide a clearer explanation of why the Total Place approach is considered a compelling reason for granting each city unitary status.

Noble Lords will have heard that the third county, Suffolk, has been treated entirely differently, and there has been inconsistency even in this decision. I draw noble Lords' attention to the submission made by the leader of East Devon District Council, Councillor Sara Randall Johnson, which is item 7 in the Merits Committee's report. She states:

"I struggle to understand how a unitary Exeter could open the way for improvements to the quality of public services, which in a Devon context are already performing to a high level (recently confirmed in the Devon wide Comprehensive Area Assessment)".

She goes on to say:

"It is a matter of record that even before 2006 local government in Devon was strongly focused on jobs and economic growth (witness, for example, the relocation of the Met Office and the expansion of Exeter Airport's industrial base)".

She goes on to make an entirely valid comment:

"Exeter's boundaries are tightly constrained. Exeter's economy is a success story but the suggestion that it has been achieved despite two-tier local government is nonsense".

The city's success has been built on a partnership of the city council, the county council and other local authorities. Most of Exeter's future economic prospects now depend on development outside the proposed unitary city boundary. The county council has proved a very successful enabler for cross-council development.

There is very little public support for the Exeter order. I draw noble Lords' attention to the MORI poll also referred to in Councillor Randall Johnson's submission. All Devon local authorities are against these orders except for Exeter city. The orders will cost the average Band D council tax payer in Devon approximately £200 a year extra. I believe also that many, if not most, Exonians are against these orders, but most of all I believe these orders are deeply flawed, unlawful and amount to a gross abuse of power. We are here to deal with matters such as this. We should vote against these orders and throw them out.

Photo of The Bishop of Norwich The Bishop of Norwich Bishop 6:30 pm, 22nd March 2010

My Lords, if you are the Bishop of Norwich it seems a bit superfluous to declare an interest. I was born in Torrington, Devon, but of pure Cornish parentage. They apologised to me for having their principal residence in the wrong place.

The diocese of Norwich covers nearly all Norfolk and much of north-east Suffolk; namely, the Waveney valley. Apart from some parishes in west Norfolk which are in the diocese of Ely, the diocese of Norwich is as near as you can get to the shape of the initial proposal of the Boundary Committee that there should be a unitary authority for Norfolk and Waveney. We have come some way since then.

It is the diocese of Norwich and not the diocese of Norfolk. My title is an indication of the significance of the city of Norwich for the great diocese it has served for more than 900 years. I am not quite sure whether a diocese counts as an ecclesiastical unitary authority. I shall consult the Archbishop on that. We are not short of tiers of local government with archdeaconries, three episcopal areas, two of them looked after by my suffragan bishops, 30 or so deaneries overall, 577 parishes and 642 churches. Whatever else may be its shortcomings-I am sure they are many-the Church of England knows something about sustaining, refreshing and reshaping historic structures over the centuries. We might even have been of help to the Boundary Committee, for the reason we are in this undesirable situation today is largely due to the serious misjudgments of that body. While it initially recommended a unitary authority on the scale of the diocese of Norwich, I doubt whether it knew it was doing so since its sense of history seems so limited. And in the matter of local government, history, place and context matter. When those are ignored, which seems to be a recurring feature of local government reform, the resulting structures do not work.

I have now been in Norwich for 10 years. On my arrival, I found myself president of the Norfolk and Norwich Association for the Blind. I went to the then Norfolk and Norwich Hospital, now the Norfolk and Norwich University Hospital with a new medical school. These institutions were founded in the 18th century. So, too, was the Norfolk and Norwich Festival, one of the oldest and best cultural festivals in the country. There are other organisations that use both Norfolk and Norwich in their titles. Coming as I do from Cornwall, it struck me how unthinkable it would be to give any of the great institutions of that Duchy names like the "Cornwall and Truro Hospital" or the "Cornwall and Truro Association" for this that or the other. Yet it is natural in Norfolk because of the scale and significance of the city in relation to the county both historically and in the present day. More than 40 per cent of all the jobs in Norfolk are to be found in Norwich. Norwich's significance in relation to the county can sometimes be resented, but it simply cannot be ignored economically, culturally or even spiritually.

The trouble with the proposal before us is that it is not the city as it is today which would have a unitary authority. It is the city as it would have been in the late 18th century or even earlier. Under this structural order, a significant proportion of those living or working in Norwich would not find themselves within the boundaries of the city. They would be in the city but not of it, or of the city but not in it. At least a third of what any observer would nowadays call the city of Norwich does not lie within the proposed boundaries, coterminous as they are with the city council at the moment and, in truth, largely with the ancient medieval city. This is the wrong sort of history; it is one which is fossilised rather than dynamic. The consequence of this is that we would have an education authority with just six secondary schools, one of them a voluntary-aided Catholic comprehensive and two others which are already academies. Four major secondary schools in the city, including the biggest, would remain in the county. This seems to me to lack coherence.

I think there are good grounds for a city unitary and still believe that a unitary city authority on the real boundaries of the current city would make good sense. A couple of years ago, people would have worked together in city and county to make such a proposal work. It was expected by many, feared by some, but could have been worked through. But the process has been so mishandled that you would have thought the Boundary Committee and the Government wanted to ensure as much dissension as possible and aimed to build tensions between city and county. We are very fortunate that the leaders of both Norwich City Council and Norfolk County Council are bigger men than this and continue to maintain good relationships, but you have only to read the local press to see the unnecessary conflict which this process has generated.

Within the city of Norwich there are people, especially in our more deprived communities-sadly, we have many of them-for whom the issues we are debating today must seem arcane and the politics incomprehensible. What they need are good local services and strong and well resourced local government. If this proposal were to deliver such things, I would be pleased, but it does not start from a strong base. I shall continue to work in partnership with whatever local government arrangements are in place in Norfolk and Norwich, so I am not inclined to vote today. But the story of the past three years has done little to build trust in our political processes or indeed faith in their transparency. That is the problem, whatever the outcome this evening. The people of Norfolk and Norwich really do deserve better than this.

Photo of Baroness Scott of Needham Market Baroness Scott of Needham Market Party Chair, Liberal Democrats

My Lords, I shall not make a speech but ask the noble Lord one or two questions about a set of orders that we are not debating this evening, but that we should have been-those that relate to my home county of Suffolk. Suffolk has been considered alongside Devon and Norfolk right through this process, yet for some reason that is inexplicable to the people there, the Government decided that they would ignore the recommendations of the Boundary Committee and that Suffolk was to have a constitutional convention. Why has Suffolk been singled out in that way? Does he accept that it might have been sensible to use the approach of a constitutional convention for Suffolk at the start of the process three years ago, but it is not sensible to bolt it on at the end of a process that has cost Suffolk taxpayers many hundreds of thousands of pounds, significantly affected ability to recruit staff, and had a detrimental impact on ability to work in partnership? How does he think that Suffolk residents have benefited in any way from the process that we have had so far?

Finally, has the noble Lord given any guidance to Suffolk on how the constitutional convention is to do its work and frame its deliberations? Is it to work on the Government's original five criteria or add in the two new ones, or should it just exercise its imagination and think about some criteria that the Government might dream up between now and the report?

Photo of Lord Elystan-Morgan Lord Elystan-Morgan Crossbench

My Lords, it is with considerable trepidation that I intervene in the debate: what possible contribution can a Welshman-from west Wales-have in relation to matters in Devon and Norfolk? I suppose one can put the other side of the coin and say that one is so far removed geographically from such places that one is able to look on the situation with total objectivity and complete neutrality. I shall speak for only a few minutes in what has been a fascinating, passionate debate with powerful arguments advanced. I do so because I have believed strongly for many years in unitary authorities.

I well remember attending the debates in the House of Commons in the early 1970s with regard to local government reorganisation. The late John Silkin made a speech arguing that one should reduce to the smallest number possible the tiers involved in any part of England and Wales. I remember him mercilessly using the words of Mark Antony:

"If you have tears, prepare to shed them now".

He was speaking a great and universal truth, one that we in Wales have exploited. We have 22 county authorities. Many are small, extremely poor and-I am sure that persons who have dealings with Wales would agree-hardly in a position to carry out their basic statutory functions. The answer is not unification of boundaries, but the unification and sharing of functions. It is in that spirit that I look on this situation.

The noble and learned Baroness, Lady Butler-Sloss, put very powerfully the arguments relating to the five criteria. If these criteria constitute the laws of the Medes and Persians in this matter, and if they relate to the shorter rather than longer term, then her argument succeeds. However, these matters are not the laws of the Medes and Persians. When one is dealing with the prospect of whether a city should be a unitary authority, one is dealing with imponderables. It is of course right that you should have guidelines at your elbow when making that decision-but they are guidelines. How can you calculate how the energies of a great city-for example, Norwich-would be released by having reinstated the authority that it had for many centuries, up to 1974? Norwich is the biggest city in England and Wales that is not a unitary authority. How can you calculate, over the relatively short span of a few years, whether that will be in the best interests of the community?

The right reverend Prelate referred to communities. Parliament can do many things. It used to be said that Parliament could do anything except make a man a woman or a woman a man, but I am not sure whether that is a restriction any longer. However, one thing that it cannot do is create communities. It is people who create communities-by their outlooks, their fears, their hopes, their aspirations, and very often their deeds. There is a community in Norwich, Norfolk, and Exeter in Devon. They are giants with immense potential, but are shackled by the present system. It is right and proper that they should be given the opportunity to develop that potential.

Photo of Baroness Shephard of Northwold Baroness Shephard of Northwold Conservative

I begin by declaring an interest. I have lived in Norfolk all my life. My forebears were in Norfolk as far back as we can trace. I have been a Norfolk county councillor for a division of the city of Norwich. I have been a Member of Parliament for south-west Norfolk, and I am a deputy lieutenant.

I pay tribute to the Minister, who is well respected in this House, for the skilful way in which he has presented the case for this extraordinary can of worms. What he has presented bears absolutely no relation to the perception of people in Norfolk of the process that has led us to this evening. It is impossible to imagine a more incompetent and unconvincing process than the one that has got us here. The whole episode, which has been characterised by delay, contradiction and disunity within government, began, as he admitted, in 2006. It has been massively costly in public money, energy and time on the part of councils, other public bodies and the voluntary sector. Local decision-making has been blighted and local government left paralysed at the very time when it must meet unprecedented demands and spending cuts imposed on it by the Government.

I do not for one moment doubt the seriousness and commitment of noble Lords who today support these orders. I have known the noble Baroness, Lady Hollis, for at least 34 years. She is serious about this process; but people in Norfolk wonder whether the Government are serious, and this is why. They say that if the Government were serious about imposing unitary local government throughout England, why did they not propose such a policy in their manifesto? If they were committed to the empowerment of people at local level, why did they legislate to ensure that the public should not be consulted on the issue, and that the status quo-that is, two-tier local government-would be ruled out without discussion? If they were really serious about unitary local government for Norwich and Exeter, why have they taken four and a half years to lay these orders today-arguably in the last four and a half days of their legislative life?

Those are the questions that are being asked in Norfolk and Norwich. I do not intend to rehearse the history of the episode-the issue of the criteria, the U-turns and the overruling of the decision of Hazel Blears-but I will emphasise, as did my noble friend Lord MacGregor, the extraordinary intervention of the accounting officer and Permanent Secretary at the DCLG. I can tell the Minister, because we have researched it, that his intervention is without precedent within the history of the department. He requested a political direction before the announcement could be made on the very reasonable grounds that the policy did not meet the Government's own criteria. He also pointed out that the newly introduced criterion of Total Place had not been part of the original considerations and therefore had not been consulted upon. Like my noble friend Lord MacGregor, I have had no experience in the five Secretary of State jobs that I have held of having such a direction.

It is impossible to avoid pointing out that the present Norwich City Council has recently had difficulty in coping with its current responsibilities. In four of the past five years, its accounts have not been approved, and two of its recent decisions are at present being challenged in the courts. It is unclear that it could cope with broader policy areas, such as those relating to the elderly or vulnerable children. Its population-around 122,000-

Photo of Baroness Shephard of Northwold Baroness Shephard of Northwold Conservative

I beg the noble Baroness's pardon. The figure is still quite small. Its physical area is also small and opportunities for growth in jobs and housing are somewhat limited. That is a point well understood by the local business community. In any event, its current ability to provide strong strategic leadership is questioned.

Earlier this year, the Government announced the results of a "consultation exercise" on the proposal. I listened very carefully to what the Minister said about support. He said that there is genuine local support for this proposal. The Government have not revealed who was consulted but we know that it could not have been the public because they legislated to ensure that the public could not be consulted. However, we do know that, of the responses received, 85 per cent were in favour of the status quo in local government in Norfolk and Norwich, 10 per cent favoured a Norfolk unitary and just 3 per cent favoured a Norwich unitary. As we approach a general election, I wonder whether the noble Lord's party would consider support from 3 per cent out of the total sample to be an overwhelming general election success, demonstrating genuine local support. In laying these orders, Ministers are going against the decision of a former Secretary of State, their own criteria, their own accounting officer in the DCLG, the advice of their own Boundary Committee and the opinion of the people affected-the people of Norfolk and Norwich-and all this in the last dying days of this Government.

In conclusion, the Merits Committee, as we have heard, requested evidence from the public as part of its consideration of the orders. Fifty of the 68 submissions received were from Norfolk and Norwich. Of the 50, just six were in favour of a unitary Norwich. All the others were opposed, including the Norfolk Police Authority, NHS East of England, NHS Norfolk, the Abbeyfield Society, the Saffron Housing Association, the Norfolk Association of Local Councils, parish councils and concerned individuals. All of those perceive the truth, which is that the introduction of a third system of local government into Norfolk will be divisive, costly, destructive to implement and enormously distracting for all public services at a time of financial constraint.

The Norfolk and Norwich Abbeyfield Society, which noble Lords will know is a housing and care organisation for elderly people, states in its evidence:

"The use of a Statutory Instrument to enact a Ministerial decision ... which has been clearly demonstrated to be contrary to the wishes of the overwhelming majority both in the City and the County ... smacks of political expediency rather than democratic engagement and it is the hope of our residents that you will resist this abuse of governmental power".

I shall support the amendment tabled by the noble and learned Baroness, Lady Butler-Sloss, which asks the Government to think again about the mess that they have made of this whole issue.

Photo of Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde Labour

My Lords, I support the order. I have no interest to declare and I have never been a councillor in the south-west. However, I spent 15 months of my life looking at the economy there and, as a result of that work, I support Exeter becoming a unitary authority. This evening we have heard voices of opposition, suggesting that we should leave things as they are and that we should stand still, but I do not think that is possible if you are very concerned about the well-being of people in Devon and the south-west. I have been a resident of Cornwall for just under 20 years, but in the eyes of many in the area that still makes me a grockle. It does not prevent me being very interested in the south-west and particularly Devon.

About three or four years ago, I was invited by the regional development agency, the government office in the south-west, to chair a group. On that body there were representatives of the university, the chamber of commerce, business, and so on, right the way through the whole community. At the end of that work, one of the key decisions, which was unanimously accepted by all the counties in the south-west, was that in such a rural area-Cornwall has the longest coastline of anywhere in Britain-the policy of moving forward within a whole county was not the best way forward for the future. There had to be enhancement of the economies of the cities in the south-west. Exeter was and is the lead city there. In 1998, there were something like 69,000 jobs in Exeter and by 2004 that figure had increased to 86,000. The projections for the regional spatial policy are that Exeter could have a population of 175,000 by the end of this decade.

This decision has not been reached quickly. Noble Lords ask why there is a hurry towards the end of this Parliament? The worst possible outcome this evening would be for the House to take no decision at all. The people in this county have been waiting a long time for the go-ahead to take their economy to the next stage.

Much play has been made of the letter from the accounting officer. I do not think there is any dispute that this is the first time that has happened, but the mere fact that there is provision for that to happen shows that it could have happened at some stage and the fact that it has happened here does not make the Minister's decision wrong. Indeed, the Boundary Committee's report gives the Minister three options: "You can proceed with the unitary authorities for Exeter and Norwich; you can make no order at all; or you can accept our recommendation". This has been going on for several years.

I chaired part of that work. All the various parties came together. The University of Exeter, the chamber of commerce and all the local political parties are in favour of this. I have some difficulty getting my head around how we rationalise the opposition to this order with the manifesto commitments that appear to be being made by the Opposition to go local on decision-making and put it in the hands of local people. This opposition to the order will prevent that. The Lib Dems have always stood proud on their local and community involvement. This will not hive Exeter off from the rest of the county. It will put into the hands of Exeter the social and economic engine, just south-west of Bristol, for the rest of the area and give it the opportunity to take its economy forward in a way that it has not been able to do.

I was approached by Devon County Council. I had an open mind on this. I met it and listened to what it had to say. It said that job expansion will be on the boundaries of Exeter, and I asked whether that would mean that if Exeter was a unitary authority, the people would need passports to get those jobs. This is about taking forward the opportunities that Exeter and the people of Devon will have. Exeter is a city that can grow that has a rural community around it. Their needs are different. For instance, recently, without any consultation with the councillors in Exeter, a new waste-to-energy building was developed in Exeter. Exeter city councillors were not involved. Exeter City Council wanted to set up a trust foundation for education that was supported by the university, Exeter College and everyone in Exeter. It was stopped by the education department in the county council. That cannot be good. Anyone who has been to Exeter, as I have, will know of the increasing transport and congestion problems and the housing demand, much of which is not being given the priority that it should have.

I support this order. I gather that it has gone through in committee in another place, although I may be wrong about that. Professor Ron Johnston was the local government expert on the Boundary Committee. He resigned because he thought the process was flawed and "biased"-his word-against Exeter and Norwich. He was put on the Boundary Committee as the expert on local authorities. I do not ignore what someone of his standing says. He felt that he could not go along with this and resigned.

We need to take a decision this evening, and I think we should decide to support this order. I oppose the Motion moved by the noble Lord, Lord Tope, and, with all due respect, I suggest that the Motion moved by the noble and learned Baroness, Lady Butler-Sloss, just defers this and will cause an impasse in the area, which needs a clear decision to get on with it, develop its economy and provide the housing and jobs that are needed. I believe a unitary authority for Exeter is the way to deliver that.

Photo of Earl Ferrers Earl Ferrers Conservative 7:00 pm, 22nd March 2010

My Lords, I declare an interest because I live in Norfolk, pay rates there and, once upon a time, I was a deputy lieutenant. I find the introduction of these two structural orders remarkable for a number of reasons. Consultation has been going on for some four and a half years. Why is it only now, within a few months of a general election, that these orders are being produced? They say that the Secretary of State had consulted not with ordinary people but with,

"other persons the Secretary of State considered appropriate".

One wonders who those people are. I think the Minister let the cat out of the bag when he said "stakeholders". Who, or what, is a stakeholder? It is a dreadful piece of Civil Service jargon that is used all over the place nowadays. It sounds good but it does not describe who is involved. I always feel that a stakeholder is rather like some Viking with a pointed piece of wood which he shoves into the ground and says, "That's mine". Whenever I hear the word "stakeholder", I am taken back to my childhood-something that happens with increasing regularity nowadays-and realised Edward Lear's frustration at not knowing who the Akond of Swat was. Your Lordships may remember his distress, when he wrote:

"Who, or why, or which, or what, Is the Akond of Swat? ...

Is he tall or short, or dark or fair?

Does he sit on a stool or a sofa or a chair, or squat,

The Akond of Swat?

Is he wise or foolish, young or old?

Does he drink his soup and his coffee cold, or hot,

The Akond of Swat? ...

Does he wear a turban, a fez, or a hat?

Does he sleep on a mattress, a bed, or a mat, or a cot,

The Akond of Swat?"

In his frustration, he ends:

"Some one, or nobody, knows I wot,

Who or which or why or what, is the Akond of Swat?".

For "Akond of Swat", your Lordships may read "stakeholder". We do not know who they are. All I know is that most people in Norfolk feel that they have not been consulted, even though the enigmatic "stakeholders" may have been. Perhaps, like snow, they are the wrong type of people to consult.

As a result, as has been said, one sort of consultation exercise found that 85 per cent wanted to keep the status quo and only 3 per cent wanted a Norwich unitary council. Why do we give all this power to Norwich City Council? It is not as though it is particularly good or efficient at running what it is supposed to be running at the moment. As my noble friends Lady Shephard and Lord MacGregor have said, the city council has not been officially approved for four out of the past five years. That is a terrible indictment of its efficiency, competence, honesty or something. On top of that, the Government want to lumber it with a whole lot of new duties and responsibilities, saying that it will be more efficient. Everyone knows that it will not be, and Norfolk County Council will lose them, which presumably will make it less efficient in turn.

The order says that Norwich will no longer be part of Norfolk. That is absurd, and I can see the right reverend Prelate the Bishop of Norwich getting worked up about it. The order says:

"There shall be a new county ... Norwich".

Rather like Genesis, "There shall be light", and up comes a new county. The same goes for Exeter:

"Exeter shall cease to form part of the County of Devon", says the order, but then says:

"There shall be a new county ... Exeter".

We all know that that it is absolute nonsense. You cannot just set up counties by a parliamentary order.

What happens to the position of Lord Lieutenant? Do these two new counties each get a new Lord Lieutenant? The noble Baroness, Lady Hollis, squeaks "No"-the first time that she has squeaked in the whole debate. She made a very forceful speech, on which I congratulate her, but she need not squeak in mine. By proceeding with these orders at the last minute, the Government are going against the recommendations of their own Boundary Committee. They have changed their mind over the assessment criteria to be used, and at the last minute. There was no prior consultation on this, and no one has had the chance to comment on the change of policy. Norfolk County Council is deeply opposed to it, and, as we have heard, your Lordships' Merits Committee on Statutory Instruments pretty well damned the orders.

When Hazel Blears was Secretary of State at the Department for Communities and Local Government, she wrote to both councils, saying that, as they could not meet the Government's test of affordability and ability to pay for the reorganisation within five years, they would not be given unitary status. In other words, it was too expensive, it was not value for money and it would not pay. That is that; forget it. Now the present Secretary of State turns the whole argument on its head and says, in effect, "Oh that doesn't matter. We will go ahead despite it all, and we will disfranchise the people of Norwich by telling them that they cannot have an election for the city council this year as they normally would". I question how any Government can say, "You, oh city, cannot exercise your democratic rights and have an election. We, the Government, will prevent it". It seems a pretty rum business, but that is the way in which the Government seem to be going.

The Permanent Secretary was so concerned about what the Minister wanted his department to do that he had to write and ask his Secretary of State to write back and instruct him to carry out that which he, the Permanent Secretary, thought was wrong. The noble Lord, Lord McKenzie of Luton, says that that is all right. Most people do not think that it is all right and my noble friend said that it was the first time it had ever happened. That does not make it right.

This is a most astonishing thing to have to do. Like many of your Lordships, I have been pottering around the ministerial corridors of Whitehall for nearly 20 years-in my case in a very minor capacity. But I have never heard of that happening before. In fact, I did not know that it was ever done or that you could do it. But perhaps that was because I was not near enough to the engine room. It is pretty amazing that a Permanent Secretary should be so horrified by what he is being asked to do to such an extent that it will prevent him properly carrying out his duties as accounting officer for his department that he has to ask his own Secretary of State to give him a written instruction to do what he believes is wrong.

In addition, the Permanent Secretary also warned his Secretary of State that the risk of these orders being taken for judicial review and succeeding is very high. What a warning and what a mess. Yet the Government still go on trying to force feed their orders through Parliament on two unhappy and unwilling counties, and at the last moment. That is not the way in which to change local government and the Government know this. I will not be voting with the noble Lord, Lord Tope, because it is a pretty damning amendment, but I will be voting with the noble and learned Baroness, Lady Butler-Sloss, in the hope that at least the Government will think again.

Photo of Lord Rennard Lord Rennard Liberal Democrat

My Lords, the much quoted Merits Committee drew our attention to the intention to cancel forthcoming council elections in the area. Cancelling elections at very short notice is something of which people should always be very suspicious and it is about this principle that I wish to speak. In the normal course of events, nominations for local elections in Norwich and Exeter would close at noon on 8 April. Failing tonight to approve the amendment from my noble friend Lord Tope will mean that this House is allowing the Government to halt the elections that those of us who are involved in campaigns and elections would know are in many respects already under way. We can only assume that the Government are fearful of the outcome of those elections. The Minister said that he wants to "preserve the integrity of the democratic process".

Halting elections on the grounds that you may do badly in them is not democratic and should not be supported. Nor should it be something about which you only express regret. As my noble friend Lord Tope said, at the end of April the High Court action may well result in these orders being declared unlawful and being overturned. But by that stage, it will be too late to reinstate the local elections that would have given local voters their say in the running of these two councils for the first time in two years. It seems to me that there is no good reason for denying local voters the chance to have their say on how their councils are run over the next 12 months.

This, of course, is exactly the argument that noble Lords opposite would have made when the Greater London Council was abolished by the noble Baroness, Lady Thatcher, and the Conservatives in the 1980s, and the last planned round of elections to the Greater London Council were halted. Labour argued that those elections should have gone ahead, that people should have had their say and that it was an abuse of power simply to abolish planned elections in this way.

The Minister tonight may argue exactly the opposite case. He suggests that there is no point in holding local elections for Norwich and Exeter if the nature of those councils may change in 12 months' time. However, that is a very weak argument in democratic terms. First, we do not know the outcome of the legal proceedings at the end of April; and, secondly, we do not know the outcome of the general election. So if these orders are approved tonight, all that they are guaranteed to achieve is the sudden halting of local elections that are planned and, in many senses, under way.

In response to this, there is simply no point in expressing "regret" about the Government's plan. Earlier, the noble Baroness, Lady Hollis of Heigham, quoted the Eastern Daily Press; I wonder whether she has read the Eastern Daily Press today, which states that,

"the government presses on, fingers in its ears and blinkers on. We feel this is too important an issue for the peers, suddenly to come over all coy. Supporting a 'motion of regret' is not enough".

It is right to say that this is ill-conceived legislation, and we should vote accordingly. The Western Morning News this morning argues that Ministers should, "listen more carefully". Its editorial states:

"It is hard not to say the critics of this process are right that the Government is putting political ambition above the needs of both the city of Exeter and greater Devon".

There may be some who are wondering when it is right to oppose rather than regret government orders. It must be right to vote against government orders when there is a clear abuse of process as so clearly outlined in this debate.

I had strong support from the Conservative Benches when the Government tried, in my view, to fiddle the election rules for the election of the first Mayor of London, and also very strong support when the Government forced through compulsory postal voting in the local and European elections in 2004. We thought then that there was a clear abuse of process and that it was right to vote against the Government. Those with longer memories than mine may also recall the stance taken by this House in 1969 when an outgoing Labour Government attempted to influence the Boundary Commission process to their own advantage just prior to the 1970 general election. That was an abuse of process. When a process is fundamentally wrong and anti-democratic, we should say no to it, not just regret it.

Photo of Lord Walpole Lord Walpole Crossbench

My Lords, if there is anything else we can say about this, I am jolly well going to say it.

I would be the first to say that my serious involvement in local government was a long time ago. I was chairman of two major committees on the Norfolk County Council and was very much involved in the 1976 local government reorganisation and the resulting county structure plan, which I took to public examination. However, I am still in touch with a wide variety of people in the county through voluntary as well as public organisations and have had many representations about the odd decision to grant Norwich unitary status coming so soon after the 2009 recommendation that it was not affordable.

My Norfolk comment would be, "Hold you hard". The translation for those who are not fortunate enough to come from Norfolk is, "Wait a while". Wait for the results of the general and local elections, wait for more representations to be made, wait for the guarantee that this is affordable and wait for the legal challenge. We have waited nearly five years; to wait a little longer will not be any problem and will save a lot of money and a lot of trouble. I shall support the amendment of my noble and learned friend Lady Butler-Sloss.

Photo of Lord Whitty Lord Whitty Labour 7:15 pm, 22nd March 2010

My Lords, I rise at this late stage because I have a screed of reasons why we should accept these orders and I want to speak on behalf of the fair city of Exeter. I would ask the House at this stage to concentrate not on the process but on the substance of the matter and the will of the people of the two cities concerned.

I shall make just two points on process. First, it has taken a long time and it has been fairly disastrous. However, it is not the process that now matters; it is the decision on the substance. I started to have some sympathy with the noble Lords, Lord Tope and Lord Rennard, on elections. However, if the city elections proceeded and the cities returned roughly the balance of councillors that they have now-in the case of Exeter, the council recently voted by, I think, 31 to two in favour of unitary status-would the Benches opposite then support unitary status for those cities, or would they ignore public opinion in those cities, as they have done up until this date?

Photo of Lord Teverson Lord Teverson Spokesperson and team leader for Climate Change and Energy

I appreciate what the noble Lord is saying, but surely the people of Devon and Norfolk count in this, too. Surely it is matter not just for the citizens of those two cities, even if they were unanimous in agreeing to unitary status.

Photo of Lord Whitty Lord Whitty Labour

I have known and loved the city of Exeter since I was a child. In those days-the noble Earl, Lord Ferrers, has gone-you would drive into Exeter and see a sign which said, "The City and County of Exeter". That is what the people of Exeter wanted. Yes, it does have implications for others, but the main implication is for those who live and work in, and draw their living from, Exeter. Overwhelmingly, those people have demonstrated through their votes, their council representatives and their businesses their support for unitary status. Institutions, civic and educational, all support unitary status. An article written by the chair of the chamber of commerce a few days ago indicated all the frustrations which businesses in Exeter city have with the two-tier process. They oppose the kind of red tape that I would normally expect the Benches opposite to raise as a problem for the operation of businesses. Others have asked where the localism is in the opposition to the orders. If we are to devolve to the lowest possible level of community decisions which mean something to the community, then let us do so in relation to the citizens of Exeter and of Norwich.

I make my second point on process. It was quite proper for the Permanent Secretary to write the letter. It was equally proper for the Secretary of State to override it, because the option which would have met most of the criteria, and the cheapest option, is not on the table, because no political party, no major institution and no major business representatives in the city of Exeter-I believe the same to be true in Norwich-supported a double unitary solution. It is either a unitary solution for Exeter, with Devon remaining two-tiered, or it is what is proposed. The Permanent Secretary's letter is therefore to some extent irrelevant; the process is at this stage irrelevant; the timing is at this stage irrelevant. Parliament has had a substantial debate on local government issues. I would love it to discuss these things in more detail and more frequently. We do not want to be hung up on process; we want to take our decision on the basis of what the people of Exeter and Norwich want and what is best for them. That is encapsulated in the orders before us. I have heard no argument tonight that should be sufficient to deny the people of Exeter and Norwich their wishes.

Photo of Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer Spokesperson for the Home Office

I nearly always agree with the noble Lord, Lord Whitty. However, having lived in north Devon for the past five years in a town, Bideford, which has some of the poorest wards in the UK, I am shocked that the noble Lord and the noble Baroness, Lady Dean, whose previous work I respect, believe that this decision is only about the city of Exeter. I beg your Lordships to look again at what the NHS trust and the police authority said in evidence to the Merits Committee about the effects on towns such as Ilfracombe, Holsworthy and Bideford, which can ill afford any cuts for the reasons that I have given. When the noble Baroness, Lady Dean, did her study, it was in the good times. We are not in the good times now; we are in the bad times. For that very reason you have to look afresh at these issues and not ignore the people of the rest of Devon.

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour

I live in Norwich, which, like Exeter, is a cathedral and a university city. It is an anciently established capital of its region and a modern driver of the regional economy. Both cities are significant cultural centres and both contain significant urban deprivation. Both have the experience of many hundreds of years of self-government and matured civic identity. The history of those two cities since 1974 when they were stripped of their county borough status and unitary powers has been, in the view of those cities, an aberration from their proper course. Surely it should be axiomatic that cities of this character, stature, complexity and size should be self-governing. The onus is on those who object to the restoration of self-government to these cities to make their case, and to do so, as my noble friend Lord Whitty has just said, with substantive arguments and not just bureaucratic, procedural or accountancy objections or complaints about the Secretary of State. Certainly, suggestions that it was improper on the part of the Secretary of State to proceed with these orders or that Parliament should not proceed with them are wrong.

The Merits Committee is at pains to suggest that it is not the committee's role to reach a definitive view on whether unitary status is right in these circumstances but rather to draw the special attention of the House to issues that it may wish to take into account in reaching its decisions. Similarly, the Joint Committee on Statutory Instruments draws attention to the judicial review launched by the county councils and other process factors, of which Parliament should be aware, but this is a matter for Parliament to decide. Judicial review can run its course but it should not prevent Parliament from taking its decision. It is significant that the High Court hearings will not be until 28 and 29 April and that the judicial review is not being run in parallel in with the parliamentary process, as has commonly occurred in the past. The timing suggests that the judicial system believes that Parliament should be allowed to exercise its responsibility. I cannot recall an instance when a unitary proposal has not been challenged through judicial review, as tactical challenges have been launched by Norfolk and Devon. Nor can I recall a single instance when judicial review has prevented a unitary organisation from proceeding. It has been suggested by the noble and learned Baroness and the Conservatives that there should be more consultation, but this process has been going on for three years. The Conservative threat to reverse the decision, if they get the opportunity, would prolong that even further. These delays are blighting for the two cities; it is overdue for us to take a decision.

We should debate the real merits of the issue-that is what we should have been debating-but I have heard no explanation this afternoon why the people of Devon and Exeter and Norfolk and Norwich would be worse off if the two cities had unitary status. If anybody can make a convincing case that unitary status for Exeter and Norwich would be detrimental to the people of Devon and Norfolk-

Photo of Lord Burnett Lord Burnett Spokesperson for Communities and Local Government

I am extremely grateful to the noble Lord for giving way. I think that I said that the changes, if made, would cost the average band D council tax payer £200 per year more. That is a fairly compelling reason.

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour

The noble Lord brings me to the very point that I was about to make. If he is correct on that, it must follow that Devon has been siphoning off funds from Exeter that should have been used there and that there has been an inequitable distribution of resources within the county. It has been suggested that rural council tax levels would rise in Norwich. If that is so, it is because Norfolk has been draining resources away from Norwich that rightly should have been expended in Norwich but have not been. No; we have seen the attitude that what we have, we hold. We have seen nothing more rational or more generous, and we have certainly not had any explanation of what the unacceptable consequences, of which the noble Lord, Lord MacGregor of Pulham Market, spoke, would be.

The Permanent Secretary was entirely legitimate in writing his letter as accounting officer but, as my noble friend stressed, the Secretary of State has wider responsibilities. In his policies for local government he ought to promote high quality public services, opportunities for economic growth and the health of our democracy. These are indeed compelling reasons.

The noble Lord, Lord Burnett, professed to be shocked that the issue of jobs and growth had been brought in as a consideration, and complained that they had not been consulted upon. I can hardly think that he supposes that had the people of Exeter or Devon been consulted on whether they would have liked more jobs and growth, they would have said, "No, thank you".

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour

If the noble Lord will allow me, I will resist; it is getting late.

Circumstances have vastly changed since 2006 and, of course, policy should not be frozen. The issue of affordability has been laid before us, and a number of noble Lords have cast reflections upon the management competence of Norwich City Council. The council, together with Deloitte, has established that there will be net savings in the transition of £4.5 million during that period, and subsequently another £4.4 million year by year. Indeed, the latest CLG estimate is higher; the Minister of State, Rosie Winterton, used the figure of £6.5 million per annum accruing in net savings after five years.

Norwich as a unitary authority would be a new council, using best modern practice and building on the excellent neighbourhood approach that it has already developed. We are asked for evidence, but you cannot produce evidence for something that has not yet happened. It is a matter of judgment, not proof, and the right criterion is reasonableness. It is a reasonable judgment that these two cities with unitary status will be viable and that the new arrangement will be beneficial to the cities and the counties. I cite the European Institute for Urban Affairs, a think tank that studies these matters systematically. It says:

"Where cities have been given more freedom and resources there is evidence they have responded by being more proactive, entrepreneurial and successful".

I speak with experience of Newport. The noble Lord, Lord Elystan-Morgan, referred to the establishment of unitary authorities throughout Wales in 1994 by the Conservative Government. They were indeed imposed-there was no consultation-but at this stage we do not complain because it has worked very well. Newport as a unitary authority has been a great success, all the time improving the quality of its services.

Here is a piece of evidence that the status quo in Norfolk is rather expensive: two-thirds of Norfolk Conservative county councillors are what we vulgarly call "twin-hatters"-that is, they are both county councillors and district councillors. Some, indeed, claim as much as £40,000 a year in attendance allowances, and they do not have two homes to maintain. No wonder they love a two-tier system and want to hang on to it, and no wonder that the consultation failed to represent the authentic strength of support across the county for a unitary Norwich. Conservative county councillors control the district, Conservative district councillors control the parishes and Conservative parish councillors control the responses to consultation. Indeed, I am sorry to have to say to the House that I have heard reports that in Norwich the charitable and voluntary sector, whose objections were cited by the noble Baroness, Lady Shephard, was, frankly, bullied by Norfolk county social services and reminded on which side its bread was buttered when it was making its representations on the unitary proposals.

Evidence from the past is that Norwich has been poorly served by Norfolk. My noble friend Lady Hollis referred to the schools. Better education will mean not only better opportunity for Norwich's children but, in the end, lower costs in social security, social services, healthcare and police.

Evidence from the present is that Norwich has been shortlisted for selection as the UK City of Culture in 2013. It has a brilliant contemporary arts scene, as well as a most remarkable heritage-there are more medieval churches in Norfolk than in any other city north of the Alps. In England, Norwich is in contention with the great cities of Birmingham and Sheffield for selection as city of culture. It will need the resources and the autonomy of unitary status so that it can fulfil that role illustriously.

The evidence points to very good value for money and affordability in the future. We know that single-tier local government is better co-ordinated and works faster. It is closer to the people, more transparent and more accountable. The Secretary of State was absolutely right, in making this decision, to take into account the importance of developing the policy of total place. That integration of the public, private and voluntary sectors in a holistic provision of services, meeting every aspect of need, can only work locally. You must know your community intimately. You must know what is really there and what it is really like, who the people are and who you can make partnership with. That way, all of the community's resources can be mobilised in a single, effective strategy and we will have best practice and value for money, whereas a two-tier system of local government inevitably involves elements of duplication, time-wasting negotiating procedures, a confused perception as to who does what, and opaque and poor accountability.

The county of Norfolk is distracted; the primary loyalty of its decision-makers is not in Norwich and their detailed knowledge is not of there, but Norwich's urban problems are urgent. Poverty and health problems, again, need strategies that integrate education, health, social services, social security and the police, which is why we ought to have unitary status. The East of England Development Agency has referred to Norwich as a potential engine of growth. Well, allow Norwich to be a powerful engine of growth and allow local enterprise, both public and private, to be released there. Allowing it to produce jobs and prosperity on an altogether different scale will be good for the county, just as it will for the people of Norwich.

It would have been better, as the right reverend Prelate said, had the Boundary Committee recommended a unitary Norwich on expanded boundaries. It did not, but at least the proposal which we have before us would make for far better services and a far better prospect of economic growth than continuing the two-tier system which we have, so it is in the interests of Norfolk that it should let Norwich prosper. Let it better serve the county and the region! It will be an advantage for all if Norfolk is disembarrassed of Norwich. Each of those major local authorities will then be able to concentrate their resources and abilities in serving the very different needs of the communities to whom they will be accountable: the urban needs of Norwich and the rural needs of Norfolk and the smaller towns there.

Norfolk is huge. It is 75 miles from end to end. Norfolk County Council has more than enough on its hands as it is. Of course, Norwich will work in close collaboration with Norfolk where appropriate: on transport, environmental issues, tourism and culture. The Norfolk & Norwich Festival will continue to thrive as something shared between the people of Norwich and those of the wider Norfolk. It is not for a second suggested or implied that Exeter and Norwich would be indifferent to or disconnected from their surrounding counties, or that the destinies of those cities and counties are not inextricably linked, so central government and the big counties should let communities go and allow democratic culture to revive.

This is one of the most profoundly important reasons why these orders for unitary status for Exeter and Norwich should be able to continue. What we have seen since 1974, with the imposition of new-fangled, artificial authorities and the abolition of the county boroughs, has been a progressive disengagement from local government-indeed, from democratic participation at every level. It is widely recognised that we face a crisis of democratic confidence. We need to rescue and recreate our democratic culture at the base, at local level. The way to do that is to allow communities to have full responsibility and to create clear accountability to those local communities. More people will then be again engaged in local government and local democracy, and more able people will be attracted to it; so when the Secretary of State invited communities in 2006 to bid for unitary status, that was a proper and creative thing to do. Unitary local government is what people in those cities want.

I hope that we shall not follow the blandishments of the noble Lord, Lord Tope, who has led his Liberal Democrat colleagues in Norwich and Exeter a very merry dance. In the interests of discretion and not to embarrass him or anybody else, I will not quote what they have said, but they are very unhappy. They understood that the Liberal Democrats would not be tabling a fatal Motion. We learnt that at the beginning of last week. Twenty-four hours later, the noble Lord tabled his Motion of annulment. It is sometimes said that the Liberal Democrats say one thing at one end of town and another at the other. Indeed, those of us who remember that pinnacle of the noble Lord's political career-the Sutton and Cheam by-election-will remember that it was said of him then. It was clearly happening again in the Palace of Westminster last week. The noble Lord, Lord Tope, really ought to blush, and the House ought to rescue these honest local Liberal Democrats from ruthless manipulation by the London Liberal Democrats.

The House ought also to be very wary. This is not a game. It is a serious time-a moment of great political sensitivity as we approach an election. The House ought to be extremely careful in voting down orders proposed by an elected Government, due to be voted on by the elected House of Commons tomorrow. Discretion would be the better part of valour. I deprecate the Motion of the noble and learned Baroness, Lady Butler-Sloss. She said that she was fond of Norwich, but this does not seem a very kind way to show her affection. She did not explain why she though that unitary local government would be bad for Norwich or Exeter. At least the noble and learned Baroness's Motion is constitutionally respectable, even if it is politically inadvisable.

Photo of Lord Elton Lord Elton Conservative 7:30 pm, 22nd March 2010

Does the noble Lord recall the contents of paragraph 4.44 of the Companion to the Standing Orders of this House, which recommends that speeches should not last longer than 15 minutes?

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour

I am extremely grateful to the noble Lord. He has made an absolutely proper point. I apologise for banging on at this length. I feel very strongly about it. Of course, we ought to proceed to a vote.

Photo of Baroness Murphy Baroness Murphy Crossbench

My Lords, the Cross Benches have barely said a word. I will speak for just two minutes in support of the Government. Listening to this debate, one would think that everybody who lived in south Norfolk or north Norfolk was against this order, and everybody who lived in the city of Norwich was for it. That is not the case. I live in the Waveney valley. The undulations may not be as great as they are in Devon, but they are pretty perfect to me. What is good for the regional development of East Anglia and Norfolk as a whole is what is crucial for Norwich-a centre of power to drive the local economy. The process has been shambolic. I can quite understand why the local county council and district councils are not that keen on losing some of the money that they will lose. It is perfectly understandable. I do not sit on any of those councils and never have. However, what is good for Norwich will be very good for the regional economy and I support the order. It will be very sad if, because of the messy process, we lose it today.

Photo of Lord Bates Lord Bates - Shadow Minister (Also Shadow Minister for the Cabinet Office and Communities and Local Government), Shadow Minister, - Shadow Minister (Also Shadow Minister for Communities and Local Government and Energy and Climate Change), Shadow Minister, - Shadow Minister (Also Shadow Minister for the Cabinet Office and Energy and Climate Change), Shadow Minister, Shadow Minister (Business, Innovation and Skills), Deputy Chair, Conservative Party, Shadow Minister

My Lords, I will be brief. I sense that the debate has happened and people have probably reached their conclusions. There is not much more to add but I need to make just a few points to put the Opposition's position on these orders on the record. We are not talking here about Exeter and Norwich orders, but Exeter and Devon and Norwich and Norfolk orders. We therefore have to consider all elements of them. The Secretary of State initially set these up in 2006. Five tests were set and failed when the report was issued in respect of both Norwich and Exeter. Therefore, the Secretary of State asked that, in the case of those two cities, the Boundary Committee should be invited to consider the five tests again. The Boundary Committee did so and came back with a recommendation contrary to what has been put before us this evening.

In moving her amendment, the noble and learned Baroness, Lady Butler-Sloss, brilliantly dissected the case and also pointed out the legal weakness in the wording of the orders. The Merits of Statutory Instruments Committee produced an outstanding report of incredible depth. It has 35 opening paragraphs, each of which finishes with a request-almost a rhetorical request-to the DCLG to provide further information and to justify its case. However, the Merits Committee will be disappointed to know that the Government cannot provide it with an answer because there is no answer for them to provide, such is the shambolic way in which this matter has been put forward. This was highlighted-in an extraordinary way-by the Permanent Secretary, the accounting officer for the department. That point was picked up by my noble friends Lord MacGregor, Lord Ferrers and Lady Shephard. We should consider for just a second the weight of Cabinet-level expertise evident in the submissions of people who have said that they have never seen a letter of this nature from a Permanent Secretary. That is extraordinarily damning of the way in which the Government have conducted themselves.

I wish to quote from a letter from Peter Housden, the Permanent Secretary, to the Secretary of State. The letter states:

"Having considered your and the Minister for Local Government's preliminary decisions on the unitary proposals before you, and the reasons for them which you have explained to us and which I understand, I do have concerns, principally about their value for money and feasibility. Accordingly, if you were to decide to proceed ... I would be grateful for a written instruction from you to implement these decisions ... Whilst I understand these ... reasons, I am concerned that the approach you are currently proposing makes it difficult for me to meet the standards expected of me as Accounting Officer".

This is absolutely damning evidence of what is felt at the heart of government about what has happened. The Boundary Committee, the Joint Committee on Statutory Instruments, the Merits Committee, the Permanent Secretary and the Secretary of State were opposed to the measure. The Boundary Committee had a second look and was still against it. It is asserted that the people of Exeter and Norwich are in favour of the measures but, as noble Lords know, nobody has ever bothered to ask them. The one time that they were asked their opinion in the DCLG's own consultation, 85 per cent were in favour of the status quo, 10 per cent were in favour of a Norfolk unitary council and 3 per cent favoured a Norwich unitary council. Her Majesty's Opposition have made it absolutely clear that should we form a Government after the general election, one of the first acts that we will take will be to issue an order to annul these orders. That should be carefully considered and weighed. The judicial review and the general election will take place in the next six weeks. Why, after four years, does the measure need to be rushed through at this point? In concluding its synopsis of this whole debate, the Municipal Journal said that local government reorganisation had descended into a Whitehall farce. That is exactly what this has become. For narrow party political advantage this is being rushed through against all advice. The words of the right reverend Prelate the Bishop of Norwich should ring in our ears when he says that the people of Norwich and of Norfolk-and for that matter, the people of Exeter and of Devon-deserve better. After the next general election, we hope that they will get it.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Communities and Local Government, Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Work and Pensions, Parliamentary Under-Secretary (Department for Communities and Local Government) (also in Department for Work and Pensions), Parliamentary Under-Secretary (Department for Work and Pensions) (also in the Department for Communities and Local Government) 7:45 pm, 22nd March 2010

My Lords, if the debate tonight has shown anything, it is that the question of whether to have unitary councils is one that is hotly debated and generates strong feelings. I should make it clear that if the noble Lord, Lord Tope, presses his amendment-we have debated these issues in aggregate today-and is successful in doing so, we would want the opportunity to test him moving his amendment in relation to the second order as well.

Perhaps the one indisputable fact is that in Exeter and Devon and in Norwich and Norfolk, the case for and against a unitary city is strongly contested. There are supporters, opponents, evidence in favour and, indeed, evidence against. For local people in these areas, those who will benefit most if we get the decisions right or suffer most if we get them wrong, these matters are certainly not party-political issues. They are not simple and it is the task of the Government to look at them carefully, to balance the competing arguments, to assess the evidence of the different claims, and finally to reach a balanced judgment on the best way forward for the people of the cities and counties involved. We are clear that the decisions we have taken in relation to unitary proposals for Devon and Norfolk are in the best interests of the people of those areas.

The noble Lord, Lord MacGregor, asserted that this was a case of Whitehall knowing best. I can say to him that the process of creating unitary councils is the very opposite of Whitehall knows best. The unitary proposals we are considering today are the proposals of the locally elected, democratically accountable Exeter City Council and Norwich City Council. These are local proposals for which there is considerable appetite in each of the cities. Perhaps I may emphasise that point, particularly for those who assert that this is a form of party political gerrymandering: all noble Lords will have had a letter from Councillor Stephen Morphew, leader of the Labour group on Norwich Council, Councillor Claire Stephenson, leader of the Green group, and Councillor Brian Watkins, the leader of the Liberal Democrat group. It states:

"We are writing to you personally to seek your support for both of these draft orders, but particularly for the order to create a unitary council for the city of Norwich. There is overwhelming cross-party support for this on Norwich City Council, representing 34 of the 39 seats on the council".

My noble friend Lady Hollis, as ever, made a most powerful argument in favour of unitary authorities and what they can do to regenerate and drive forward the economy of a local area. As she explained, she has done this from the perspective of someone with a commitment to Norwich and to Norfolk more generally. She talked about the opportunity of having unitary authorities that are focused, innovative and entrepreneurial. That is now in part fettered by a two-tier approach. I mention the instance she raised, that of street lights going off at 10 o'clock at night.

My noble friends Lady Hollis and Lord Whitty, and other noble Lords, raised the issue of county unitaries. We disagree with the Boundary Committee because there is no support for those. Neither of the two county councils supports them, or indeed any of the principal councils. Further, all but a handful of parish councils are opposed to them. If we were to proceed with those alternatives, which is the benchmark that has been suggested for working out at best value, I guess that there would be more judicial reviews about us not sticking to the criteria and guidance that were laid down.

The noble and learned Baroness, Lady Butler-Sloss, said that there was no evidence of cost savings, efficiencies and so on, and talked about the effect on local economies and services. I suggest that that is not the case. The department's impact assessment has been laid before Parliament and shows that, once up and running, the unitaries will result in annual savings of some £6.5 million per year. But the benefits will be so much greater in terms of promoting the economy, achieving real growth in jobs, and economic regeneration.

The noble Lord, Lord Tope, suggested that we have got the timing wrong on this because of challenging financial circumstances. I would suggest to the noble Lord that it is precisely because of the challenging financial circumstances we have that we are right to press ahead with this. We know that we have to do all we can to drive growth in the economy and we know the power that unitary authorities such as Norwich and Exeter could utilise.

A number of noble Lords made reference to Total Place, which is part of the reason for the Government making the decisions they have. The noble Lords, Lord Burnett and Lord Tope, and the noble and learned Baroness, Lady Butler-Sloss, all remarked that the Total Place pilots have demonstrated that by putting the citizen at the heart of service design, taking a holistic view of the funding available within an area, and working across organisation boundaries in a collaborative and integrated way not only provides significant opportunities both to deliver better services and outcomes for people everywhere, but also drives down costs. There are various elements to this. Total Place envisages a strong role for local government, placing it firmly at the centre of decision making in a community. There is also a cultural element. A couple of bids have stated that the explicit cultural element in Total Place has been key to creating new and more powerful ways of collaborating.

I am advised that the troops are leaving, so I shall see whether I can make progress. My speeches do not usually have this effect.

I was pressed on the economic benefits that accrue from the changes; they are substantial. I do not have time to go through them. Those who know about unitary authorities will know that they make a real difference. I have certainly experienced it directly in Luton, which became a unitary authority under or as a result of Conservative government proposals.

The noble and learned Baroness, Lady Butler-Sloss, asked what the urgency was-why now? A number of other noble Lords-the noble Earl, Lord Ferrers, in particular-referred to why things had taken so long. We have consistently made clear our desire to bring to an end the uncertainty in these areas, which has been going on for well over three years. In addition, there are clear and practical reasons. If we approve the orders now, the new councils can be implemented in April 2011. Any further delay would make that impossible.

A number of noble Lords referred to the cancelling of elections, including the noble Lords, Lord Tope and Lord Rennard. It is not unprecedented. The order in March 2008 that established a unitary Bedford similarly cancelled elections there in May 2008. Nor is it correct that the Government have clear legal advice that the order is flawed. There is legal advice about the prospect of judicial review proceedings, but it would be wrong for the House to second-guess the courts. What sort of process would it be for Parliament if we did not proceed with issues because a judicial review was under way?

Photo of Earl Ferrers Earl Ferrers Conservative

I thought that the advice of the Permanent Secretary to his Minister was that the likelihood of success if the matter went to judicial review was considerable.

Photo of Baroness Butler-Sloss Baroness Butler-Sloss Crossbench

Since the Minister has raised the question of what might happen between a judge and Parliament, I shall ask a question. If the House passes the orders and the judge says that the applicants for judicial review are successful, that will set the orders aside, will it not? Then you will be within a few days of the non-existent local government elections. It is nothing to do with what the judge says, but any litigants-even the Government-need to listen if they are given advice that the real prospect is that they will not succeed.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Communities and Local Government, Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Work and Pensions, Parliamentary Under-Secretary (Department for Communities and Local Government) (also in Department for Work and Pensions), Parliamentary Under-Secretary (Department for Work and Pensions) (also in the Department for Communities and Local Government)

Yes, of course the Government and the Secretary of State have listened to that. The noble and learned Baroness is right in relation to the elections; she would know better than I would that if the judicial review were successful, the likely consequence is that the orders would be quashed. In relation to the elections that did not take place, the councillors would cease to hold office as a result and vacancies would have to be filled in the normal course of events.

Photo of Lord Pannick Lord Pannick Crossbench

Given the doubts about the legality of the Government's conduct, have they sought advice from the Attorney-General about it?

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Communities and Local Government, Parliamentary Under-Secretary (also in the Department for Communities and Local Government), Department for Work and Pensions, Parliamentary Under-Secretary (Department for Communities and Local Government) (also in Department for Work and Pensions), Parliamentary Under-Secretary (Department for Work and Pensions) (also in the Department for Communities and Local Government)

My Lords, of course the Government and the Secretary of State have taken appropriate legal advice. The question of the Government acting unlawfully is not one that we accept.

I was trying to deal with the point made by the noble Lord, Lord MacGregor, and others, including the noble Baroness, Lady Miller, about not looking at such matters without taking account of what happens in the rest of the county. I agree. Clearly, there will be implications for local government in the remaining two-tier areas of the county. There should be no direct impact on the remaining district councils as their structures and responsibilities will not change, whereas there will be on the county council administration as its areas of responsibility will be greatly reduced. However, provided that the county council and city council in each case co-operate in the provision of upper-tier services across the county, there should be no negative impact on the standard of those services. Indeed, that presents the opportunity of a win-win situation.

A number of noble Lords referred to the issue of directions and the experience of the department. The department has been in existence for only about four years. I stress that, although it is not common, directions across government departments have happened under previous Administrations-there is nothing unique about this.

In relation to the advice that the Government have received, the Secretary of State considers that on balance there is a reasonable prospect of defending the judicial review brought by Devon and Norfolk county councils.

A number of issues were raised around affordability. There is a danger that the term is used more generally or widely than the criteria suggest, because this is about transitional costs and the period over which they can be repaid.

The noble Lord, Lord Burnett, talked about costs and the implications of proceeding with these matters. It is estimated that implementing a unitary Exeter and Norwich will cost £400,000 over the transitional period. However, we should remember that they will save £6.5 million every year. That is the key reason for our decision to focus on the medium and long term, rather than on short-term administrative implications. The noble Lord asked about consequent hikes in council tax. We have always made it clear that restructuring costs will be met locally, without increasing council tax.

The right reverend Prelate the Bishop of Norwich suggested that the proposals lacked coherence. I welcome his comments highlighting something that is truly important-namely, that the services for the people of the cities and counties are what matter. The unitary proposals will help to improve those services.

The noble Lord, Lord Burnett, said that Total Place is not a good enough reason to allow a unitary Norwich and Exeter. I do not agree, but I do not have time to expand on that. The noble Baroness, Lady Scott, asked why we were not considering issues around Suffolk. The issues are well known, and I will be happy to write to the noble Baroness given time constraints tonight.

The noble Baroness, Lady Shephard, talked about the history of directions. As I said, DCLG has been in existence only since the summer of 2006. The noble Baroness also asked why the Government had legislated to rule the public out of consultations. Our whole approach has been locally driven. The proposals are not imposed by government: they are proposals from councils, which are representative of local people. It is not correct that the Government have legislated to exclude the public. The legislation provides for a consultation with such persons as the Secretary of State considers appropriate. The Government's consultation-this deals with the point raised by the noble Earl, Lord Ferrers-sought views from councils representing local people and stakeholders, made clear that comments were welcome from anyone and asked councils to bring proposals to the attention of their communities.

I will deal with the point about stakeholders made by the noble Earl, Lord Ferrers. The invitation states that for the purposes of consultation, stakeholders shall include all local authorities, the wider public sector, the police, the health service, learning and skills councils, RDAs, the business community and the voluntary and community sectors.

It is time to close. We believe that the people of Exeter and Norwich, and the people in the surrounding county areas, will be best served by councils working in a partnership of equals between the urban core and the rural hinterland. We adopted an approach of carefully assessing each proposal against the five criteria. We gave careful consideration to the circumstances when there were compelling reasons to depart from the presumption that proposals that met the criteria should be implemented and those that did not should not be implemented. There were compelling reasons to depart. Our vision for these cities is that they should have a strong, independent council that has within its hands all the local levers of power necessary for the economic, social and environmental success of the city: a council that is at the heart of a complex network of council and local service providers, and which is able to drive the economic, social and environmental success not only of the city but of the wider county area. I urge noble Lords to vote for the Motion and oppose the amendment.

Photo of Lord Tope Lord Tope Liberal Democrat 8:00 pm, 22nd March 2010

My Lords, a little over 10 minutes ago the Minister told us that his troops were leaving. My Chief Whip tells me that our troops are staying, so I am inclined-indeed, I am sorely tempted-to reply at least at equal length to all the points that the Minister has made. However, I shall resist that temptation because it simply would not be fair, and the noble Lord, Lord Bassam, is looking at me particularly crossly for suggesting it.

We have debated this matter for nearly three hours. The points have been very well made and there is no need for me to rehearse them now. I think that all those here who have taken part in and listened to the debate know whether they are for or against these orders. I simply want to make some closing remarks to those who are against, and in most cases strongly against, the orders.

My amendment and that of the noble and learned Baroness, Lady Butler-Sloss, are virtually identical. In fact, they are identical, save for two important points. The noble and learned Baroness's amendment simply regrets the orders that many noble Lords have spent much of the past three hours saying are so wrong. One noble Lord suggested that, if passed, that amendment would delay the Government. It will not delay the Government. That is the whole point-the Government will not take any notice. We have only to look at what happened a week or so ago with the Richmond Park order, when a fatal Motion was lost by seven votes. A non-fatal Motion simply regretting the order was passed by a huge majority and within hours the Government announced, in a statement that I have here, that they would carry on in exactly the way that they had intended. Does anyone believe that, having got to this stage-having gone through the debate that we have tonight-all of a sudden the Government are going to say, "Oh no, sorry, we'll stop. We'll pause and reconsider". Of course they will not; they will carry on.

I want to make my other point as strongly as I can. It is often said that the Conservative Opposition-or the opposition party, which for the time being is the Conservative Party-do not vote on fatal Motions. Since the last general election, there have been 13 fatal Motions. Substantial numbers of Conservative Peers have voted for those fatal Motions on eight occasions. I have the details here and shall read them out because I do not mind how long we take. By substantial, I mean 66 Conservative Peers on one occasion, 62 on another, then 38 and 36 and so on. Those are substantial numbers of Conservative Peers who felt able to vote in support of fatal Motions. If Conservative Peers feel so strongly that these orders are wrong, there is no reason why they should not support my amendment tonight. Of course, that applies even more so to the Cross-Bench Peers.

Division on Lord Tope's amendment.

Contents 54; Not-Contents 118.

Amendment disagreed.

Division number 1 Norwich and Norfolk (Structural Changes) Order 2010 — Motion to Approve

Aye: 52 Members of the House of Lords

No: 116 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Photo of Baroness Butler-Sloss Baroness Butler-Sloss Crossbench

My Lords, I think noble Lords have heard enough from me and, perhaps, from everyone. I wish to test the opinion of the House.

Division on Baroness Butler-Sloss's amendment.

Contents 169; Not-Contents 110.

Amendment agreed.

The name of one Member of the House voting in the Contents Lobby was not recorded.

Division number 2 Norwich and Norfolk (Structural Changes) Order 2010 — Motion to Approve

Aye: 166 Members of the House of Lords

No: 108 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Motion, as amended, agreed.