Localism Bill — Committee (4th Day) (Continued)

– in the House of Lords at 2:30 pm on 30th June 2011.

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Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government 2:30 pm, 30th June 2011

My Lords, I would just say that in the Library are a number of documents which have been laid for the attention of the Committee.

Clause 42 : Duty to hold local referendum

Amendment 120B

Moved by Lord Greaves

120B: Clause 42, page 37, line 26, leave out subsection (3)

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, in moving Amendment 120B, I shall speak also to the other eight amendments in this group, which are in my name and in the name of my noble friend Lord Tope, who will arrive in a minute, I hope.

Although we have debated only two groups of amendments so far, we have made quite a lot of progress in discussing the issues around the proposals for referendums. These amendments address the question of who can call referendums under the provisions of this chapter. We approached the question of referendums with some scepticism-that has become obvious. Nevertheless, we understand that there is a localist case for referendums regardless of whether referendums themselves are a suitable part of local democracy. The case was made well by the noble Lord, Lord True, before the lunch break. We are troubled by referendums not just because they present various practical dangers and difficulties, which we talked about last Thursday and this morning, but because of the question of whether local democracy should be plebiscitary or deliberative. The problem with referendums is that they demand a yes or no answer to questions that very often require a great deal of careful discussion and deliberation and are not answerable in a yes/no sort of way; they are answerable in a much more complex way that requires amendment, mediation and compromise between different interests in the community. This is at the heart of the question of who should call referendums.

This suite of amendments would delete those parts of the Bill that allow referendums to be called by a small number of elected councillors. It would also delete the provision that an elected mayor, whether in London or elsewhere, could call a referendum. It would also, perhaps for different reasons, delete the provisions that allow a council itself to call a referendum. I will take those points in order.

In our view, the provision that allows a small number of elected members to call a referendum in their wards is open to a great deal of misuse and abuse. In particular, if,

"one or more members of the authority can make a request"- in the words of the Bill-then the,

"member for an electoral area", or,

"a majority of the members", in a multi-member area can call a referendum. It is not clear whether councillors for adjoining wards could join together and jointly call for the same referendum in two or more wards. I put that question to the Minister.

Last Thursday we discussed the danger-so I will not go into it in great detail now-of councillors using referendums in their wards as a tool for re-election, calling a referendum on a populist issue on the same day as they are due to face the electors. An equally dangerous prospect is rivalry within a ward, if perhaps two out of three councillors called a referendum in order to do down the election campaign of a colleague of a different party. A further problem is that wards do not necessarily, and very often do not, match communities.

For all these reasons, many of us find undesirable the possibility that a small number of councillors-one, two or three-can call a referendum in their part of the borough and, as long as it fits the provisions of the Bill, the council will not be able to stop it. The arguments apply equally to elected mayors, who could quite easily call populist referendums to coincide with their own re-election or to boost their popularity. There seems no reason why a mayor should call a referendum about issues that relate to the mayor's powers because the mayor can address them without a referendum.

As far as the resolution of the council is concerned, these provisions seem unnecessary. Councillors can call referendums at the moment under their existing general powers, and presumably they will continue to be able to do so. They are also able to make arrangements appropriate to the particular referendum that they might want to call. We were given an example in the King's Lynn area where a referendum called by the district council cost £80,000. It resulted in an overwhelming majority one way, and then the county council ignored it. The argument for not having a referendum on the basis of the resolution of the council is that it is not necessary, and the council can do it anyway without being constrained by the detailed rules and regulations in this Bill.

My final point is that the Bill suggests that referendums can take place within a ward or an electoral division or they can take place in a whole area. However, if you think about towns such as Keighley, which is a clearly separate town within the city of Bradford, why should it not be able to have a referendum, if we are going to have referendums, in a clear community like that? In the case of Burnley, Padiham is a clearly separate town in the Burnley district, but it consists of two wards and bits of other wards; so why should it not be able to have a referendum in the natural community rather than the artificial wards? I beg to move.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

My Lords, I endorse most of what the noble Lord has suggested. In particular I entirely concur with his view that the provision for council members to requisition a referendum is apt to lead to mischief and is unnecessary. It is open to the whole council to choose to have a referendum if it wishes. Perhaps the Minister would confirm that it would even be the case in a mayoral council, that the council as a whole could pass a resolution for a referendum. However, to extend that principle to individual members is unnecessary and likely to be a source of considerable nuisance as well as expense. I hope that the Minister will feel, on reflection, that that particular part of the Bill can be safely abandoned without prejudice to the rights of the public at large.

Photo of Earl Cathcart Earl Cathcart Conservative

My Lords, I may have misunderstood, but regarding this business about local councils calling for referendums, I thought the Minister said previously that,

"following a request from a member, a referendum may not be held unless the full council has resolved that it be held".-[Hansard, 28/6/11; col. 1746.]

I therefore thought that we had moved on from that argument.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, I thank all noble Lords for their contributions to this debate and indeed the noble Lord, Lord Greaves, for tabling these amendments. I should reassure him that councils in neighbouring wards can get together to hold a referendum covering a community. I cannot help the way that warding is done. Generally speaking, we have to have building blocks in local government and the ward system is the one that is used, but under the provisions of the Bill it would be possible to hold a referendum that just addressed the interests of Keighley or Burnley, which he illustrated.

Perhaps I can address the implications of the amendments and say why I will resist them. Amendments 120B, 120C, 126ZZA, 128QA, 128R, 128VA and 128W would remove the provisions that would allow councillors to call for local referendums and councils to pass a resolution to hold a referendum. These amendments would have the effect that if an authority were keen to hold a referendum on a local matter, it would not be able to use the powers to hold a formal referendum conferred by the Bill and would only be able to use the rather informal powers contained in Section 116 of the Local Government Act 2003. We accept that local authorities have the power to hold advisory polls under Section 116, but those polls are limited to the council's services or its expenditure on such services and are therefore not as far-reaching as the provisions in the Bill.

We want to enable councils to hold referendums on any issue of local importance. We believe that as leaders in their areas, it is right for them to be able to do so. It is open to a council under the provisions to hold a referendum on any matter. However, any decision must be taken within the parameters of administrative law. It would need to be a rational decision with reasoned grounds for it. In answer to the point made by the noble Lord, Lord Beecham, these provisions apply also to mayoral councils. Clearly it would not be rational to hold a referendum on a matter about which no practical decision would be possible by those who were able to take the decision. For example, a decision on whether the country should invest in a programme-the illustration that I have here is rather far-fetched, to send a person to Mars; I am not sure who the drafters of this text had in mind-would not be a rational subject for a referendum by a local authority. Further, the local authority would need to consider very carefully the holding of a referendum on a matter over which it, its partner authorities or the people of the locality had little or no influence. It is not rational for the authority to incur the cost of a referendum which can serve no possible purpose.

I do not see any great advantage in denying authorities access to the referendum framework that we are setting up under this Bill if they want to use it. Nothing in the provisions that my noble friend seeks to omit imposes any obligations on authorities, so I urge him to withdraw the amendment and to support the localism that they promote.

Some of these amendments, Amendments 129K and 129L, refer to the mayor as a member, and I am grateful to my noble friend for bringing them forward. They would remove elected mayors from the definition of "member", meaning that they could not use the power in Clause 45 to call for a referendum in the area of the council that they have been elected to lead. In fact, this may not be such a great hardship for elected mayors, since they could initiate a referendum by seeking a resolution of the authority under Clause 50. I accept the point made through Amendment 129L-to remove the Mayor for London from the provisions set out in Clause 58(2)-and we will want to consider these points carefully with a view to returning to them at a later stage. I thank my noble friend for submitting those amendments.

With the explanations which I have given in support of the Bill's provisions, I hope that my noble friend will feel able to withdraw his amendment.

Photo of Lord Tope Lord Tope Liberal Democrat

I am grateful to the Minister for that reply. Unless I missed it, I do not think that he addressed the particular concerns referred to by both noble Lords, which is what happens with split wards. What would happen to a three-member ward where two are from one party and the third is from another? In my own borough, one-third of the wards are in that position, so it is a significant point. A long time ago I was an opposition councillor, and I would suspect that in the run-up to the council elections, which in London is only a one-in-four-year opportunity, it would be almost irresistible for two opposition councillors seeking to oust their third, unwelcome friend from another party, to seek to trigger a referendum, if only to force the majority party to turn it down shortly before the election. I am sure that that is not what the Government have in mind. I speak with the confidence that none of the opposition councillors in my borough will ever read Hansard and know that I am saying this, but I suspect that this is a tactic that may well enter the minds of some. It is not what the Government intend. I therefore wonder whether we ought not to think a bit more about tightening the provisions to prevent what I must not call frivolous campaigning, but very opportunistic opposition campaigning, by whichever party, because I am sure that, in opposition, we would all do it. Perhaps we should consider that point.

Photo of Lord True Lord True Conservative 2:45 pm, 30th June 2011

I apologise to my noble friend for missing his opening remarks. I referred to this on an earlier amendment so I will not labour the point, but I agree strongly with the points made by my noble friend Lord Tope. In these circumstances the councillor power needs further examination, and I hope that my noble friend will be prepared to consider that. On the question of area and ward boundaries which my noble friend referred to, the reality is that, in many cases, as real localism emerges, people will choose areas that do not coincide with the boundaries of wards. We as an authority accept that we are defining areas in terms of what local people have chosen as their communities. Indeed, the most recent referendum held in our authority did not follow ward boundaries but community boundaries, and people participated in it enthusiastically. I do not want to press my noble friend further on the point, but the language of the "electoral area" used in the Bill, whether at this point or elsewhere, could create serious obstacles to the actual implementation of localism in the way that communities would choose. I hope that my noble friend will consider that further.

Photo of Earl Cathcart Earl Cathcart Conservative

My Lords, I cannot quite understand where we are, which is why I got up before. Earlier this week I moved Amendments 125 and 126, which provided that a councillor could not call for a referendum unless he had a petition signed by 5 per cent of the electorate. I have before me the Hansard report where the Minister, the noble Lord, Lord Taylor, said:

"I believe that the safeguard we have in place-that, following a request from a member, a referendum may not be held unless the full council has resolved that it be held".-[Hansard, 28/6/11; col. 1746.]

Surely that is the check. I admit that it is far better than the one we proposed, which was getting 5 per cent of the vote.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

Indeed I can confirm that, and I apologise to the noble Lord, Lord Beecham, because both he and my noble friend Lord Cathcart asked me about it. I will repeat what I said: councillors may call for a referendum, but it will go ahead only if the full council decides that it should. However, the points raised by my noble friends Lord Tope and Lord True need some consideration. The Bill makes no reference to a political party. It does not even talk about controlling councils or membership of groups because that is not the principle on which this piece of drafting was done, and indeed my noble friend Lord True will understand that sometimes it is difficult to provide definitions in legislation. I have explained that our building block is the ward system.

We are going to go on to talk about neighbourhood planning in the future, and it will be useful to consider this debate in the light of that. Meanwhile, we will consider the point made about the risks that could be involved. However, my noble friend Lord Cathcart has kindly given me an opportunity to explain that the whole council has to approve whether a referendum at the bid of an individual councillor or group of councillors should go ahead.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, I am grateful to everyone who has taken part in this short debate and for what the Minister has said. While the question of a council being able to call a referendum under these provisions seems unnecessary and more in the way of detailed prescription, I understand that it is not a significant issue. The one significant issue that has come out of the debate is the question of whether individual members should be able to call referendums in their own wards. I just want to take the Committee through what the Bill says.

Clause 45 is about a request for a referendum by members. It says that a request complies with this section if a member for a ward-or, if it is a multi-member ward, a majority of members for that ward or division-asks for that referendum. That is subject to Clause 46(2):

"The principal local authority must determine whether it is appropriate to hold a local referendum in response to the petition or request".

That is the point that the noble Earl, Lord Cathcart, made. But Clause 47, which we will come onto in some detail in the later group, clearly says in subsection (1):

"A principal local authority may only determine that it is not appropriate to hold a local referendum in response to a petition or request"- and that request is a member request-

"on one or more of the following grounds".

The way in which the local authority, the council, treats a member request as far as grounds for determination-that is, deciding whether it can go ahead-is exactly the same as if a petition is received. We will discuss some of the stuff in Clause 47 a little later but the point is that, if it complies, the council does not have any discretion. It still has to make a formal decision but that decision is whether it complies. If it does, the referendum goes ahead. In an absolute way, the case made by the noble Earl, Lord Cathcart, is not what it says in the Bill. If I am wrong, this is a crucial issue that needs to be settled and sorted out.

On that basis, and the basis that more discussion has to take place about member-requested referendums, I beg leave to withdraw the amendment.

Amendment 120B withdrawn.

Amendment 120C not moved.

Clause 42, as amended, agreed.

Clause 43 : Petition for local referendum

Amendment 120D

Moved by Baroness Hanham

120D: Clause 43, page 38, line 8, after "44)," insert-

"(ba) where the principal local authority is the Greater London Authority, it is duly signed-

(i) by the required percentage of local government electors in each London borough, and

(ii) by the required percentage of local government electors in the area of the Common Council of the City of London,"

Amendment 120D agreed.

Amendment 120E not moved.

Amendment 120F

Moved by Baroness Hanham

120F: Clause 43, page 38, line 12, leave out from "though" to end of line 14 and insert "-

(a) where the principal local authority is not the Greater London Authority, the petition does not comply with subsection (1)(b), or

(b) where the principal local authority is the Greater London Authority, the petition complies with neither or only one of paragraphs (b) and (ba) of subsection (1)."

Amendment 120F agreed.

Amendment 120G

Moved by Lord Rennard

120G: Clause 43, page 38, line 20, at end insert-

"( ) In order to comply with this section a petition must be validated by the Electoral Registration Officer or Officers for the relevant area as follows-

(a) that the name of each person on the petition is that of a local government elector who is registered at the address stated on the petition, and

(b) that the signature of each person on the petition corresponds to that on the electoral registration form signed by that person."

Photo of Lord Rennard Lord Rennard Liberal Democrat

My Lords, this amendment stands in my name and in the name of my noble friend Lord Greaves. I shall speak also to Amendment 129A, Amendment 129H and Amendment 188 within this group. Amendment 120G simply requires that the electoral registration officer should check that the signature of the person on one of these petitions requesting a referendum is the signature of that person on the register. Amendment 129A says that they must be on the register, not just entitled to be on the register. That is an important issue of clarification. Amendment 129H says that they must be on the register on the date that they sign. Amendment 188 says that this process cannot really start effectively and properly until we have individual voter registration, so that we have on the register the signatures of the people signing these things and those can be checked against it.

On Tuesday, we listened to many discussions about how many signatures should be required to trigger a request for a referendum of this nature. Apart from the arguments over whether it should be 5, 10, 15 or 25 per cent, it is of considerable importance that, if we are collecting any signatures demanding that such a referendum be held, we know that the people signing petitions are on the electoral register, on it on the relevant day and that their signature on the petition matches what is recorded by the electoral registration officer. That is as will be the case in future for all voters with individual voter registration but is at present the case only with postal voters. At the moment, people sign nomination forms for elections but it is not possible to check their signatures. There are so few signatures required on a nomination form that it is possible quickly to make enough inquiries to see whether those signatures really are the signatures of those people nominating a candidate. However, if in future we are going to trigger perhaps expensive referendums requiring dozens, hundreds, thousands or tens of thousands of signatures, we must have a process for checking that they are genuinely the signatures of local electors. There will be nothing to check that these signatures are really the signatures of those people until we have individual voter registration in place. We will have it before the next general election campaign. Otherwise, there will be accusations that small groups of people may be able to fill in the forms with different signatures from names that they simply find on the register. There will be no effective way of checking that they really are the electors that they are supposed to be.

I have often argued in this House that we need greater security in our election process. We do not really know how much abuse there is of the election process. If more people knew how easy it would be to cheat on some of our election rules, there would perhaps be much more cheating in elections. The previous Government moved and this Government are moving to tighten up our electoral processes as a safeguard against potential fraud. We should have proper safeguards against fraud in relation to these petitions.

For example, there have been a lot of problems with the Electoral Commission dealing with donations made to political parties from people on or perhaps not on the electoral register. One of these amendments makes plain that you should be on the electoral register if you are signing this petition-not simply that you should be entitled to be on it. This principle was a matter of significant debate when we considered the Political Parties, Elections and Referendums Act 2000. It was clearly the view of this House, the other place and the Government that if you make a donation to a political party as an individual you should definitely be on the register-not simply able to claim that you are entitled to be on it, had not gone on it and had been missed out. The same principle should apply for these petitions.

Finally, in these various provisions considering how referendums may be triggered, what consultation has there been with the Electoral Commission about such matters? I beg to move.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, before we consider the implications of these amendments, it is important to remember that we are not actually talking about voting in the referendum itself but about the petition. It is the view of the Government that it is up to a local authority to determine the validity of any referendum that is presented to it.

Amendment 120G would introduce a new layer of bureaucracy requiring that an electoral registration officer must validate each petition to check the names, addresses and signatures of each person who signs a petition. This potentially places a significant burden on the ERO and could lead to delays in the holding of a referendum. An authority will clearly be able to check signatures on the petitions if there is a serious thought that it might be filled with forgeries but it must be for the local authority to decide how it wishes to do so. The authority may consider it unnecessary to verify every signature before it can determine whether the petition is a valid expression of local opinion. Those authorities that wish to devote their time and resources to check each signature may do so. The Government's view is that most will take a sensible approach. There is no need to impose this extra burden.

It would also be impossible for local authorities to comply with the amendment at present. As my noble friend Lord Rennard admitted, our voter registration does not require the signatures of each elector on the voter registration form, only a signature from one member of the household. As such, local authorities do not hold the signatures of each individual voter, as this amendment would require. My noble friends may have sought to address this point through Amendment 188, which provides that the whole chapter on local referendums cannot be commenced until universal voter registration has been introduced. This would delay commencement of the local referendums regime and thus delay giving local people the mechanism to make their voice heard on issues that matter most to them. I do not believe that is the thinking of the coalition.

Amendment 129A suggests a drafting change to the definition of who would be entitled to vote in a local referendum, probing why we have used the form of words that are currently in Clause 54(1). The answer is somewhat technical: there are some categories of people who are local government electors but who are not entitled to vote in a local election; for example if they are in prison.

Amendment 129H would restrict the category of person who can sign a petition calling for a referendum to those who are registered by a particular date specified in the petition. This is just the sort of procedural technicality that certain lawyers would love to seize on to challenge the validity of a referendum. There really is no need for it. It would implicitly give rise to an obligation on all petitioners to include such a date expressly.

I therefore hope that with these assurances the amendment will be withdrawn. There is no requirement for a signature as part of our plans for individual voter registration because that would prevent registration by phone or e-mail, for example, which may be included in those proposals. With those considerations, I hope that the noble Lord will be able to withdraw his amendment.

Photo of Lord Rennard Lord Rennard Liberal Democrat 3:00 pm, 30th June 2011

My Lords, I am grateful to the Minister for his clarification of government thinking on these issues, which I might cheekily paraphrase as saying, "Whatever high standards we have for policing our democratic elections, those should not apply in relation to the gathering of petitions that may require these referendums". I might ask him for a little further clarification on the issue of being on the register or entitled to be on the register, given that he cited specifically the case of prisoners. Those who are in prison are not able to vote in elections. Is he suggesting perhaps that they should be entitled to sign these petitions? That thinking seems a little muddled, if that is perhaps the case. I continue to have reservations about whether petitions that may be costly to the public purse should be triggered without more safeguards than the Bill currently provides. On that note, I am happy to withdraw the amendment.

Amendment 120G withdrawn.

Amendment 120H

Moved by Lord Greaves

120H: Clause 43, page 38, line 39, at end insert "or

(iii) a parish."

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, this simple amendment would allow a referendum to take place in the area of a parish council which did not coincide with ward boundaries of either the county council electoral divisions or a district or borough ward. This amendment is not about a parish council conducting a referendum or about the existing provision for parish polls. There is an amendment about those matters later on. It suggests that there may well be circumstances-in my view, there are lots of circumstances-where, if there are to be local referendums, a parish is the appropriate area for the referendum to take place.

There are many examples of where parishes are grouped together to form ward boundaries for principal councils yet those parishes are often more natural communities than are the wards themselves. That is why parishes are as they are, whereas wards are arbitrary and have to be within a certain size. Therefore, very often, wards do not reflect one natural community. They might reflect a series of natural communities or slice communities in two-that very often happens.

Where parishes consist of a village or a small town it is often the case that they are the appropriate unit to hold a referendum if that is what people want and that provision exists. By definition, parishes will consist of one or more polling districts, which exist in order to be able to hold parish council elections. I therefore suggest that even if the referendum applies to a principal council, at whatever level, it ought to be possible to call a referendum within a parish area, rather than what may be a much more cumbersome and inappropriate ward boundary area. I beg to move.

Photo of The Earl of Lytton The Earl of Lytton Crossbench

My Lords, the noble Lord, Lord Greaves, will doubtless have expected that the words "parish council" might cause this particular old pike to rise from the depths. I see where he is coming from, although I initially felt that this could loosely be reclassified as "Son of Clause 56 stand part". I appreciate that he has made a distinction which prevents me from pressing that in particular. I will leave most of my comments for the question on Clause 56, because there is a generic process about parishes and how they fit into the thing.

I am a little concerned about inserting the principle regarding parish into something that relates to principal authorities. I question whether it rightly sits there, bearing in mind that the Bill proposes that the Secretary of State can make a separate set of provisions for parish councils. It seems to me that there are very good reasons for that, because we have to be rather careful about what template we are using for the purposes of referendums, so I question whether the insertion of the reference to a parish here is the right one, unless the intention is to eliminate Clause 56 altogether.

Photo of Lord True Lord True Conservative

My Lords, on this point there is of course a fundamental difference between how parishes are viewed inside and outside urban areas. I understand all the misgivings as far as rural parishes are concerned and do not wish to follow along that line, but it would perhaps not be wise to add my noble friend's suggestion to the Bill. I point out that in the recent referendum in my own authority which I referred to, the area chosen for it was in fact the boundary of a parish because that ran across more than one ward. It is not right to write that into statute but it reinforces the point that I and other noble Lords made earlier: that some power to enable local authorities to define an area, which might or might not be a parish, would be a useful broad, localist and permissive power. I would not favour writing it into the Bill in this way but it may be one of the instruments and measures that a local authority ought to be allowed to choose other than a ward.

Photo of Lord Taylor of Goss Moor Lord Taylor of Goss Moor Liberal Democrat

My Lords, I have a particular interest in this amendment because parishes in many rural communities are far more relevant than local authority or council boundaries. They are not only historic but often relate to particular communities in a way that local authority wards do not, certainly in my part of the country. That is because wards are driven by numbers, not by community. This seems a good and proper issue to raise. There is of course already the power for parishes to call their own referendums, so the query might be whether this is necessary because, if a community wanted it, one might argue that there is provision for it already.

However, the legislation here is making reference to particular issues relating to local authorities. Frankly, I therefore see more relevance to allowing a power in relation to a parish as a community than to having specific reference to the electoral division for the primary local authority. I would hope that the Minister can respond positively to the principle here, whatever the means might be to achieve it.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, I think that I can respond positively. I say to my noble friend and namesake that I do not know how big Goss Moor is, but Holbeach has a population of some 8,500 people in one parish. Some parishes are remarkably large and other parishes are remarkably small, so it is very difficult. One size, or system, fitting all is very difficult. There are provisions, of course, for a local referendum, or parish poll, under the provisions of the Local Government Act 1972, to which the noble Lord, Lord Taylor of Goss Moor, has referred.

The amendment would include parishes in the definition of a "relevant area" as that applies to a principal local authority. We do not think that this is appropriate, particularly because we are looking at how we might look at referendums at parish level in legislation within the Bill and as a result of a consultative process, as I said before. Indeed, I mentioned to the noble Earl, Lord Lytton, that I foresaw his organisation being very much involved in this consultative process.

Our approach to local referendums is to enable referendums on local matters at the relevant council area, but for the issue at hand. If it is a district council matter, or a matter over which the district council has influence, the referendum can be held at the district council level, whether it be across one or more wards of the district, or the entire area of the district council, but it is the district council that is the triggering authority for this poll, other than having a parish poll. If it is a parish matter, we believe that a parish poll is the most appropriate method. We will discuss our intended approach to parish council referendums later, and I can assure noble Lords that the parish sector will be fully catered for. We want to see a modernised and proportionate local referendums regime for parishes, on which we will fully consult. I hope, therefore, that with these assurances my noble friend will withdraw his amendment.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My difficulty is that I do not know what that regime might be, or even what the Government are talking about. Whether the Minister will give a little more information when we touch briefly on Clause 56 later, I do not know, but I will not talk about that now.

Let me just give one example. In the parish of Laneshaw Bridge, which is in Pendle in the ward of Boulsworth, a huge issue that has split the village is the question whether the village school should be very considerably expanded to take in a much larger area than the village. The village was split. Nobody knows what the majority opinion in the village is; what we know is that there were campaigning groups on both sides. Yet a referendum within Boulsworth ward relating to that issue-which would be a classic and typical example for a referendum-would be irrelevant, because the village is only one fifth or so of the entire ward. The rest of the ward consists of another much larger village, another couple of larger villages in a different parish, in which I live, and part of the town of Colne. Having the referendum in that arbitrary area would be irrelevant to knowing what the people of Laneshaw Bridge think.

Photo of Lord Taylor of Goss Moor Lord Taylor of Goss Moor Liberal Democrat

I strongly support my noble friend on this. The issue is not whether the matter is one which lies with the local authority or with the parish-that is readily understood and, if it lies with the parish, the parish poll would suffice-but it may well be a matter which lies for decision with the local authority but only affects a small community. It is the nature of rural local authority wards that they often cover a number of communities, many of which would not be affected by the issue at hand, even though it is the local authority that is the decision taker. That is the issue that was not really responded to earlier.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I am grateful to my noble friend for making the point more strongly and better than I did. There is clearly an issue here and it is clearly one that will continue to be discussed. We look forward with interest to seeing the Government's proposals for parishes, but the continuation of the point made by my noble friend Lord Taylor is: who pays for the referendum? If it is a district, county or unitary issue, surely that authority should pay for the referendum and the cost of it should not fall upon the parish council, which may well have a view on the matter and be involved in the discussions, but is not responsible in any way for the issue before the referendum. That is a very important matter.

The noble Lord, Lord Beecham, made the point that there is possible provision in the Bill for local authorities to define appropriate local areas which are not co-incident with ward boundaries. It seems to me that a provision that they should be one polling district or a collection of polling districts is one that ought to be looked at by the Government, because polling districts, by their very nature, already have the machinery in place for elections, yet polling districts in most wards are smaller than the wards of which they form part. I put that suggestion to the Government and, on that basis, I beg leave to withdraw the amendment.

Amendment 120H withdrawn.

Amendments 120J and 121 not moved.

Clause 43, as amended, agreed.

Clause 44 : The required percentage

Amendment 121A

Moved by Lord Taylor of Holbeach

121A: Clause 44, page 39, line 2, leave out "as follows" and insert "to subsection (2),"

Amendment 121A agreed.

Amendments 122 to 124A not moved.

Amendment 124B

Moved by Lord Taylor of Holbeach

124B: Clause 44, page 39, line 2, at end insert-

"(1A) Subject to subsection (2), "the required percentage" in section 43(1)(ba) means 1%."

Amendment 124B agreed.

Amendment 124C not moved.

Amendment 124D

Moved by Lord Taylor of Holbeach

124D: Clause 44, page 39, line 3, after "(1)" insert "or (1A)"

Amendment 124D agreed.

Clause 44, as amended, agreed.

Amendment 124E

Moved by Lord Rennard

124E: After Clause 44, insert the following new Clause-

"Offence of paying for signatures

(1) A person commits an offence if the person makes a payment-

(a) to any person to carry out the collection of signatures on a petition under this section, or

(b) to any person to organise any other persons to carry out the collection of signatures on a petition under this section.

(2) A person who is guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale."

Photo of Lord Rennard Lord Rennard Liberal Democrat

My Lords, this amendment addresses another issue of serious concern regarding the potential for abuse in this system. My noble friend Lord Greaves will deal with other aspects of abuse in other amendments in this group, but Amendment 124E deals with the ban that I believe is required on paying people to collect petition signatures to try to trigger these referendums. I am concerned about this potential for abuse because big money interests may be able to use and abuse the petition and referendum systems in order to gain undue influence in an unfair way and subvert other democratic safeguards.

I have seen the way in which this happens from time to time in the United States, where what they call "initiatives" are rather more common than perhaps they are in this country where we would call them referendums. I have seen examples, which I have been given by lobbying organisations, where a big company has decided that it wants to build something and make a lot of money from doing so, but it understands that the relevant local authority might consider, even if there is a desirable benefit to the community, that it is not a priority for that community to build such a project. Rather than try to persuade the local authority that that is what it should do, the company hires people to go around canvassing door to door and in shopping centres and persuading them to sign petitions. I know from my own experience of campaigning over many years that sometimes it is not hard to get a lot of people to sign something if you are quite a persuasive person. These lobbying companies hire persuasive canvassers to go door to door in areas with a lot of people, persuading them to sign sufficient petitions to get an initiative.

When the initiative then has to be agreed to because there is seen to be public demand for it, and not to agree to that public demand would be seen to be a problem for the local authority, then the moneyed interests hire the lobbying company to run direct mail campaigns and adverts in the local paper, persuading people that this is what should be voted for. When the initiative is successful, those interests benefit significantly in a commercial sense from something that has not really been proven in a democratic way to be the desire of local people, but where money has paid for the collection of petition signatures and has been very decisive in determining the outcome of the ballot. That is not at all the intention of the Government with this sort of process, but it could open up the democratic system to that sort of abuse. For those reasons, I beg to move.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I will speak to Amendments 129B and 129C, which are in this group. They refer to Clause 54, which refers to regulations about voting in, and the conduct of, referendums. Clause 54(6) states clearly:

"Regulations under this section may not include provision ... about the limitation of expenditure in connection with a referendum ... for the questioning of the result of a referendum by a court or tribunal", or,

"creating criminal offences".

The question here is: does that mean that established and understood election law, in these areas and in others, will not apply in the case of a local referendum? Will normal election law not apply? What redress does anyone have if it is believed that someone is rigging the referendum if there is a considerable degree of personation taking place-despite the complacency that there still is in many quarters, quite a bit of old-fashioned personation goes on at polling stations in some parts of the country-or the rigging of postal votes, which takes place on a frequent basis in some parts of the country and in any case is perfectly easy to do? If the system is that there is no criminal or other redress against this happening, the odds are that where some people think that the question behind the referendum is very important, the odds are that this sort of thing will continue.

If there are freestanding referendums, that may simply be a matter for the referendum. However, it is quite clear that, for reasons of cost, where referendums are taking place councils will do their best to make sure that they do so at the same time as elections-probably on the first Thursday in May, whenever the local elections are taking place or European elections in June and so on. Under those circumstances, if I read the provisions of Clause 54 correctly, rules will apply to the election campaigns but some of them will not apply to the referendum campaigns taking place alongside them. Given what we all believe will happen- that in some cases referendums will be organised to assist election campaigning-the distinction between the two may not be all that obvious.

If I were campaigning in a local election and there was a referendum going on at the same time, I might well include reference to the referendum and what I thought people should do-both for and against it-in my election literature. Indeed, this happened on a large scale among all the parties during the AV campaign, but less so with the Labour party because it could not make up its mind whether it was in favour or against. It happened on a large scale with the Conservative Party and to some extent among the Liberal Democrats. Leaflets were put out saying, "Vote for Joe Bloggs and, by the way, vote"-yes or no-"in the referendum campaign". Or it was the other way around: leaflets went out which were 90 per cent "vote no" in the referendum campaign, and also "Vote for your local Conservative candidate". I compliment their skill in doing that; it won them a lot of seats.

It is going to happen, certainly at local level. So what about rules like election law, such as the need for imprints on leaflets? Will that apply to referendum material? What about the rules about payment of canvassers? My noble fiend Lord Rennard referred to the possible payment of canvassers for collecting petition signatures, but what about paying canvassers to go around and persuade people to vote one way or the other in a referendum, which is illegal in elections? What about offences relating to what you can and cannot do at the counting of the votes? What about offences relating to intimidation of voters? Particularly where there are joint elections, common sense suggests that there should be common rules. The provision in Clause 54 suggests that there should not. I would be grateful if the Minister could explain what it means and whether it needs some amendment before the Bill completes its passage through this House.

Photo of Lord Collins of Highbury Lord Collins of Highbury Labour

My Lords, the noble Lord, Lord Rennard, made a point in moving the amendment about the payment to individuals collecting signatures. I would be slightly concerned that he, as an able organiser in the Liberal Democrats, may fall foul of such an amendment if he was paying employees of the party to undertake political activity that may include support for a referendum. I would hate to think that he may end up in jail as a consequence, so perhaps he could clarify the position.

Photo of Lord Rennard Lord Rennard Liberal Democrat

Briefly, no problem seems to occur in elections. The paid staff of parties, as the noble Lord will well know, take part in elections, but it has never been considered an activity of paid canvassing. The activity of a large organisation like a big business deciding it wants to get something through and employing people specifically to sign the petition would be of a rather different order.

Photo of Lord True Lord True Conservative

My Lords, I fear that I rather agree with the noble Lord opposite. There is always a risk in creating a new criminal offence-or a new offence in any case. I hope that my noble friend will resist the amendment of my noble friends. The example of a local newspaper-"Tear off a strip, sign our petition"- which might be delivered by paid delivery potentially gets one into quite difficult areas. The paid deliverer could actually be deemed to be collecting signatures for a petition.

There might be a perfectly innocent occasion where somebody says to a child or young person, "Come along and help me collect some signatures, and we'll buy you what you have been wanting for some time". That is a perfectly normal kind of thing that goes on in family life, not just in politics. I understand the concerns of my noble friend Lord Rennard about big business, as he puts it, but we may be creating another regulatory hammer if we went down this road. It would not be helpful and might have unintended consequences.

So far as the other amendments are concerned, my noble friend can obviously answer for the Front Bench. I do not want to go into my views on the Electoral Commission as that would detain us for too long, but at least Clause 54(7) states:

"Before making any regulations under this section, the Secretary of State must consult the Electoral Commission".

I would have thought that the Electoral Commission was capable of giving the Secretary of State advice on the kind of matters that my noble friend Lord Greaves has raised.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health) 3:30 pm, 30th June 2011

My Lords, as a preliminary point I refer again to the issue raised this morning with regard to the Delegated Powers Committee, because Clause 54 gives the Secretary of State the right to make regulations. Given what he indicated this morning, I assume that the Minister is inclined to adopt the position of the Delegated Powers Committee; namely, that these regulations should be subject to affirmative resolution. I certainly hope that that would be the case. He nods assent, for which I am grateful.

The noble Lord, Lord Rennard, touched on an interesting issue when he talked about paying people to requisition a referendum. I do not know of a precise precedent but certainly an analogous situation arose not too long ago in Greater Manchester, where a large commercial concern, Peel Holdings, was, among others, very hostile to the notion of a congestion charging scheme for Greater Manchester. It launched a campaign in the metropolitan borough of Bury to call for a mayoral referendum in the hope and assumption that an anti-congestion charge mayor of whatever political affiliation would be elected, and because in the great scheme of things a single authority in Greater Manchester-only one authority-could veto the whole scheme, that would be sufficient to jettison this scheme, which the company felt was against its interests.

I understand that the company invested a considerable amount of time, energy and cash in securing the signatures to enable a referendum to be held. It was held and there was a low turnout-I recall that something like 11 per cent or so of people voted in the referendum for the holding of a mayoral election, which then took place. Happily, from my perspective, an equally small proportion of the electorate turned out to vote against having a mayor. That is an indication of the dangers that might arise if there was no restriction on what commercial interests might get up to in the context of securing local petitions. Of course, the difference is that that referendum was binding and other referendums would not be; nevertheless, there is a real danger in that regard. However, I take note of what the noble Lord, Lord True, has said-one must be careful about creating new offences. Although the matter is certainly worth exploring, I do not rush to an immediate view that creating another offence of this kind is necessarily the answer. Having said that, I find it difficult to think of a better solution, so one might have to have recourse to that.

I have an amendment in this group, the number of which escapes me, which relates to Clause 54(7) about the making of regulations, and would require the Secretary of State to consult not only the Electoral Commission but the Local Government Association as well. I hope that the Minister will accede to that. It seems sensible to me to involve the LGA in matters of this kind. However, I do not understand some of the provisions that Clause 54 makes for regulations to be made by the Secretary of State. This goes back to some of the remarks made by the noble Lord, Lord Jenkin, yesterday. Clause 54(4) states:

"Regulations under this section may make provision about-

(a) when, where and how voting in a local referendum is to take place;

(b) how the votes cast in a local referendum are to be counted".

A simple assimilation of electoral law, in so far as that prescribes these matters, would surely be sufficient. The notion that detail of that kind needs to be made the subject of a Secretary of State's regulation strikes me as absurd. On the other hand, if there are to be regulations, I do not quite follow the position of the noble Lords, Lord Rennard and Lord Greaves, and, for all I know, his colleagues on the Lib Dem part of the government Benches, who wish to take out of subsection (6) regulations,

"about the limitation of expenditure ... for the questioning of the result of a referendum by a court or tribunal", or for "creating criminal offences.

Those strike me-provided that we have the affirmative procedure-as matters that should or certainly could be included.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I may have misread the Bill, but my understanding is that the Bill states that they cannot be part of the regulations.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

I bet the noble Lord's pardon: that is right. I withdraw my last remarks and accept the noble Lord's amendments to my comments. However, whatever we have in the regulatory framework, the key thing is that the minimum should be prescribed and that whatever is prescribed should be done in conjunction with the Local Government Association and subject to affirmative resolution.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, perhaps I may start by saying that the Government are inclined, as I indicated, to accept the concept of affirmative resolution for the regulations. I can also say that the inclination of the Government is for a light touch in this area. We have already seen that there are tensions between a rigorous procedure for the collection of names and the necessary legal restrictions placed on the conduct of elections. The difference between the two is that a referendum is not mandatory, it merely advises a local authority and it is therefore not unreasonable to say that it may be covered by a lighter touch than an election whose outcome is definitive, where the problems to which noble Lords have referred apply. I have spent a lifetime in active party politics, and I know how important it is to try to create a proper framework. I was grateful to both my noble friend Lord True and the noble Lord, Lord Collins, for pointing out the problems that could arise if we tried to set up regulations that criminalised activities in collecting petition names, and the like.

Amendment 129E creates a criminal offence, and Amendment 129C broadens the Secretary of State's regulating powers to allow the regulations to provide for referendum results to be questioned in court. The creation of criminal offences is simply unnecessary for a regime that is, effectively, non-binding.

One problem that the coalition is trying to deal with is the profusion of unnecessary criminal offences on the statute book. I suggest that the incurring of expenditure to pay someone to campaign to collect signatures falls well below the hurdle that needs to be cleared before persons should be at risk of receiving a criminal record.

I have not examined the situation fully, but my first impression was that the noble Lord, Lord Collins, might well be right, because the reason why it is possible to pay people to work in elections is that their fees are part of the election expenses. It could create problems if they were also involved in a referendum.

Amendment 129B expands the scope of the Secretary of State's power to make regulations on the conduct of referendums to include regulations about the limitation of expenditure in connection with a referendum. The noble Lord, Lord Greaves, is right about what the Bill states on that. We will be discussing the wider issues about publicity arrangements for referendums in a later group.

Clause 46(6)(b) distinguishes between the procedural regulations that may be made in respect of local referendums which are not binding and those which may be made in respect of binding referendums, such as whether to have an elected mayor. We intend that local referendums should be more light touch, given their non-binding nature. The intention behind the amendments may be to limit restrictions on authorities in connection with the question. In fact, the equivalent provision in regulations for binding referendums is used to impose spending limits on petition organisers and those opposing petitions, and they are invariably accompanied by criminal offences for breaching spending limits. We are not convinced that such requirements are necessary for this scheme of non-binding referendums.

We will discuss publication arrangements in a later group and our intentions on that issue. In the mean time, Amendment 129E, which, in hindsight may have been better grouped with Amendment 129D, seems to have little practical effect. It would remove the words "of the referendum" from Clause 55(8). These words may be considered unnecessary but they do not cause any harm and to a small degree remove any doubt that may exist. I cannot say that I am convinced that it is worth making the amendment.

The amendment moved by the noble Lord, Lord Beecham, would insert a statutory requirement to consult the Local Government Association in making regulations about voting in, and the conduct of, local referendums. The Electoral Commission is expressly included in the Bill as it is standard practice in all such electoral matters. I neglected to say in reply to the previous debate that we are consulting the Electoral Commission. However, I can assure noble Lords that we intend to consult widely before making regulations, which will include local government associations. I hope that noble Lords will see these non-binding referenda becoming a very different category from ordinary electoral law and I hope that with these assurances, my noble friend will withdraw the amendment.

Photo of Lord Greaves Lord Greaves Liberal Democrat

Before my noble friend decides whether or not to divide the House, I should say that these are extremely important matters and we do not believe that the Government have given them the importance that they merit. Whether we like it or not they are all about the possibility for graft and corruption-perhaps not at the same level as for an election itself, but nevertheless graft and corruption over an important matter. If they are not important matters, why are we spending all this money having these referendums?

I just want to make two very brief points. First, within electoral law for elections there is a clear and well understood distinction between paying canvassers and paying people for doing other things, such as delivering leaflets, manning committee rooms, or whatever. You can pay helpers in elections but you are not allowed to pay canvassers. There is a growing area between the two but the distinction is well understood and by and large adhered to.

My second point, which is more fundamental, is the point I made about joint campaigns. It is inconceivable that there will not be joint campaigns of trying to get someone to vote for or against a referendum and an election campaign at the same time, with joint literature, posters and other things that money is spent on. Unless the regulations referring to the referendum are similar to those referring to the election, it will drive a coach and horses through the limits on election expenditure. There must be the same rules for the same two things if people are campaigning for the two things together in the same place at the same time. That is common sense otherwise it is a recipe for a huge amount of misunderstanding and chaos, and as I said, driving a coach and horses through some of the local election rules, not least on the limits on expenditure. That question needs a bit more thought by the Government.

Photo of Lord Newton of Braintree Lord Newton of Braintree Conservative

Before anybody says anything else, may I pick up on something which my noble friend Lord Greaves said? I understand that it has not been raised, even though I admit that I have not been here throughout the debate. My question has been illustrated in what my noble friend was saying: what is the position of the party agent in all this? That question has not been specifically addressed. It appears that a lot of these referendum campaigns will be organised by political parties. What is the position then of the party agent who is paid? Who is regarded as paying him? If any member of the association or the Labour Party or whatever is regarded as paying the agent, then it seems to me that if the agent does anything to encourage or assist, he is in danger of falling foul of this clause. What is the answer?

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative 3:45 pm, 30th June 2011

I think the agent would be in danger of falling foul of this amendment, not this clause. That is an important distinction. The noble Lords, Lord True and Lord Collins of Highbury, join my noble friend Lord Newton of Braintree in pointing out the difficulties of the heavy hand of regulation.

Photo of Lord Rennard Lord Rennard Liberal Democrat

My Lords, perhaps there is not an easy answer to the question just posed by the noble Lord, Lord Newton, but the point is well made that there are grey areas and some difficulties. When we are looking at this petition process and these referendum issues, we have to look rather more carefully than we have done up to now at how we avoid abuse within the system. From my noble friend Lord Greaves and the noble Lord, Lord Beecham, we have heard some genuine concerns about how the system could be open to abuse. We have also heard from the noble Lords, Lord True and Lord Collins, that there is no appetite for what might be considered to be further regulation or offences.

The position from these Benches, and why we are testing out these issues, is not that we want more regulation and more offences, but rather that we want some of the safeguards which properly apply in elections, to avoid abuse of the electoral system and, perhaps, situations in which people could say that pound notes can buy more influence than people's votes. That is a fundamental principle of democracy. We try to have fair rules in elections; they are not perfect and are often grey. Many of us are trying to work to improve them, but we try to have some rules to make sure there is a balance in funding and safeguards to avoid people cheating. Some of those rules and regulations are important in elections and they should also be considered as relevant and necessary in the petition process and for these referendums.

I do not think we have necessarily got quite right the model of what we should do, on which basis I am happy to withdraw the amendment. However, all of us who are concerned must look further at this issue and consult further, as suggested in the amendment by the noble Lord, Lord Beecham, a device that may come to us from the Electoral Commission and the Local Government Association.

Amendment 124E withdrawn.

Clause 45: Request for referendum

Amendments 125 and 126 not moved.

Clause 45 agreed.

Clause 46 : Duty to determine appropriateness of referendum

Amendment 126ZZA not moved.

Amendment 126ZA

Moved by Lord Jenkin of Roding

126ZA: Clause 46, page 40, line 3, at end insert-

"(6) Before determining whether it is appropriate to hold a local referendum under subsection (2), the principal local authority must notify-

(a) any person who is named in the petition or request,

(b) any person who is the owner or occupier of any land to which the petition or request relates, and

(c) any other person whom the authority considers to have an interest which is likely to be affected by any steps that the authority may take to give effect to the result of the referendum."

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

My Lords, I am happy we should also discuss my Amendments 128EA and 129CA. So far in this discussion of referendums we have tended to see it almost in a bilateral way between the public, who might petition and support a referendum, and the local authority, which might be disposed to agree to hold a referendum and have to deal with the results. These amendments are concerned with the third party: a person or company whose activities may have been the cause of suggesting that there should be a referendum. Putting it briefly, they should be involved in some way in the process, being consulted at the different stages and having the opportunity to have their say. This is what these three amendments are about.

When we come to it later, the Bill is perfectly clear on how and why a referendum might be held. It is also clear that it would not be binding on the local authority, but the processes are not as clear as they should be. I will take the example of an airport. I have had the advantage of consulting the company that runs Gatwick Airport, but the issue could apply to similar projects and institutions around the country. Of course, if the proposal is of the major kind that comes within the purview of the Infrastructure Planning Commission, or the MIPU that will take its place under the Bill, there is a separate procedure: I will not touch on that.

In the case of airports, the level for application of the processes of the IPC is if a development would involve more than 10 million passengers a year. That is a pretty big hurdle. A great deal of what goes on-this may apply to power stations or even reservoirs, but will certainly encompass airports-including a great deal of the ongoing development that falls below that limit, will therefore have to be considered by the local authority.

I am not referring now to the question of planning, which we will deal with later when we debate the next clause. The question is whether a project may be put forward that has aroused opposition and may therefore provoke a referendum. Gatwick Airport is a good example because it exemplifies exactly what might be expected. Gatwick is the UK's second largest airport. As I have learnt in the course of my discussions, it has the busiest single runway in the world. That is an astonishing fact, but it is what I am told. The airport serves 200 destinations in 90 countries, with around 33 million passengers a year. The airport recently had a change of ownership. The new owners are very busy developing the airport so that its potential can be properly utilised for the benefit not only of the local economy but of the country as a whole. The airport provides around 25,000 jobs on campus and another 13,000 across the region. It generates a very large amount of wealth, as noble Lords may imagine.

The airport does not operate in a vacuum. It is surrounded by local communities and is close to a number of towns. The owners are very conscious of the need to be responsible developers and to take account of local opinion. They have always done that and I suspect that the new management are doing it rather better than their predecessors. Therefore, we are talking about how to achieve a balance between the very desirable objective in the Bill of giving local residents a bigger say in what happens in the areas in which they live, and giving investors the confidence that is necessary if they are going to develop their business. That is the issue. Hitherto we have been talking about the first aspect: the question of how local communities can have a say. The second, of course, is what these amendments are intended to address.

One should remember that a commercial institution like Gatwick Airport often has to work to extremely tight timetables. It has to raise finance and have regard to its regulator. An economically regulated airport such as Gatwick can face severe financial penalties if the targets set by the regulator are not met. Investors need the certainty that there will be no potential obstacles to meeting those timetables so they can be reasonably sure of avoiding the penalties.

How is this new system going to be applied to them? How are you going to deal with this? The purpose of my amendments, as I said at the beginning, is to provide the clarity which the Bill does not have at the moment. They would provide for a transparent consultation between a local authority and an affected third party-in this case the company running the airport-which might be named in a local referendum as to whether it is appropriate that a referendum should be held at all. Further, if a referendum is to be called that relates to it, it should be notified.

Finally, Amendment 129CA would ensure that a named third party-in this case the manager of the airport or it might be any of the other investors with ongoing development requirements-should be consulted before the local authority chooses whether to give effect to the result at all. We have already discussed that the referendum is not binding: it is a decision the local authority would have to take. All the clause asks is that the affected third party should have an opportunity to have a say and that the local authority should have regard to any representations.

It might be said that these things are so automatic they ought to happen already. I am sure that is not always the case. People can sometimes plough ahead. It may be an unpopular development. I have not been told, but I suspect that around major airports there are communities deeply hostile to what goes on there; it would not surprise me in the least. I used to live near Stansted Airport and, as we have all seen, the opposition to the expansion has been immense. There has been intense opposition. Every airport will have that but they need to be reasonably sure that the managers and the developers can have a proper opportunity to have their say and for their views to be taken into account.

That is what these three amendments do. They provide a level of safeguard against what one might call the unintended consequences of what is otherwise a desirable development. It is people having more of a say about what happens in their own areas. When I questioned the people from the airport they told me firmly, "We agree it is right and proper that local people should be able to express their views on issues specific to their area". I come back to the point that it is a question of holding the balance. My amendments simply intend to provide reasonable procedures which would enable a better chance with the local authority holding the balance as it should. I beg to move.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

My Lords, with respect to the noble Lord, the first amendment is an unnecessary addition to the responsibilities of local authorities. On the kind of issue the noble Lord has addressed, such as a very controversial issue like an airport or major development, it is inconceivable that a prospective developer would be unaware of a petition doing the rounds. On the other hand paragraph (b) of Amendment 126ZA says,

"any person who is the owner or occupier of any land to which the petition or request relates".

I can think immediately of situations in my own ward where we have empty properties about which there is considerable concern. There might well be petitions coming to the local authority to do something about them but very often it is impossible to know who the owner of the property is or how to contact the owner. Again, that would create a significant burden and, with the best possible motive, it is overegging the responsibilities of the authority.

I have a little more sympathy with the after-the-event process that the noble Lord refers to in Amendment 129CA because it requires the authority to consult. There will potentially be same issue on paragraph (b) but, in general, it is not unreasonable to require the authority to consult in a referendum those affected although, bearing in mind again that we are talking about non-binding referendums, this is a less significant issue than it would otherwise be. Nevertheless, it is good practice for an authority to consult if it is going to do that, and I see no harm in that provision. However, if the Government are minded to accept it, I urge that there be some qualification to paragraph (b) about the ownership or occupation of land, which may be very difficult to identify. On the other hand, paragraph (c),

"any other person whom the authority considers to have an interest", is so wide that I think it is a bit much. If the Government are at all minded to respond sympathetically to the noble Lord, and I hope they are in respect of the second point, it should really be combined to paragraph (a) and a modified paragraph (b). That would be my respectful suggestion.

Photo of Baroness Valentine Baroness Valentine Crossbench 4:00 pm, 30th June 2011

I declare an interest as chief executive of London First, which includes businesses that may be affected by the provisions in this Bill.

I support these amendments as I consider them to be in the spirit of the Bill. The noble Lord, Lord Jenkin, gives a useful example in Gatwick Airport, but there is a wide range of third parties that may be affected by any referendum. When decisions are being taken, those impacted by them should be notified and consulted openly. It is right that local authorities consult those potentially affected about whether it is appropriate to hold a referendum at all, as well notifying them if it were to happen and consulting on what steps are taken afterwards. Referenda should be a positive tool and, to that end, they should be well considered and thoughtfully implemented if they are to have the best possible impact on communities. I hope the Minister agrees.

Photo of The Earl of Lytton The Earl of Lytton Crossbench

My Lords, I had not expected to speak on this amendment, but I think the noble Lord, Lord Jenkin, raises a very valid point. I live within what is known as the Gatwick Diamond economic area, so I know very well what he is referring to. I know of situations where, for instance, residential development takes place near to industrial premises through normal course of development and re-use. Gatwick Diamond, along with many other areas, is now a 24/7 operation. It is near enough to coastal ports for large lorries to be coming along and near enough to all sorts of aviation-related and other downstream industries.

Local residents may not much like 44-tonne lorries coming along in the wee small hours of the morning. I can quite see that, but it is not fanciful at all to suppose that they might not wish to procure a cessation via triggering a referendum with a view to protecting what they see as their interests. Nor is it a planning-only issue because it may relate to a whole raft of regulatory functions for which local authorities and other bodies have responsibility. While I cannot vouch that the wording that the noble Lord, Lord Jenkin, uses is cohesive, I think there needs to be some regard for the economic consequences of what is being sought by a referendum. It seems that a referendum can be formulated on quite a narrow premise. If that is the case, it is quite possible for it to concern things of a much broader spectrum. It is worthy of consideration by the Minister.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

Does the noble Lord not agree that in matters of the significance and complexity to which he and the noble Lord, Lord Jenkin, have referred, a referendum is probably the least effective way, in terms of time, of drawing the matter to the attention of the local authority? There are ways of doing that through petitions or by addressing local councillors through the local media that would be much quicker and more likely to have an effect than the necessarily rather cumbersome processes that would be involved in a referendum. In those circumstances, therefore, is there perhaps less urgency and potency in the noble Lord's amendment than might otherwise have been the case?

Photo of The Earl of Lytton The Earl of Lytton Crossbench

In response to the very wise comments of the noble Lord, Lord Beecham, it may well be a cumbersome way of doing it but the point is that we do not yet know what the precise trigger is going to be, or the subject matter. The provisions of the Bill cover a very large spectrum of possibilities and we are effectively empowering the Secretary of State to make orders. It is legitimate to lay down a marker as to what the parameters might be-I suspect that is all the noble Lord, Lord Jenkin, is doing at the moment-and just to sound a word of warning. It is timely in that context.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

I am going to speak in support of what my noble friend Lord Beecham said. It is the mention of airports that I cannot resist, of course, because we have one in Luton. I know how important it is to the local community and what a generator of jobs it is. In many ways, airports are the organisations least likely to need the measure that the noble Lord proposes because they have consultative committees anyway so there is automatically a wide engagement with the community. The principle of somebody who is potentially on the receiving end of a referendum or a petition knowing about that and the local authority having to make a decision to engage with them seems to be entirely reasonable. What we are balking at is that the specific amendment is a little too prescriptive and takes us too far down an unfortunate path. However, we are all well aware of the challenges that airports in particular face.

Photo of Lord Newton of Braintree Lord Newton of Braintree Conservative

My Lords, I apologise to my noble friend but tempted again I have been-on this occasion just to show how even-handed I am-to join in a little bit with the noble Lords, Lord Beecham and Lord McKenzie, with due apologies to my noble friend Lord Jenkin. It is the third arm of this that worries me most. It says,

"any other person whom the authority considers to have an interest which is likely to be affected by any steps that the authority may take to give effect to the result of the referendum".

It is not just airports. Major commercial developments, for example, have effects over a wide area. Leaving aside Stansted, about which I know a good deal, and which would certainly be said to have effects over 30, 40, 50 or 100 or more miles, Lakeside at Thurrock has had effects on shopping centres all over Essex. It is unimaginable that the local authority would really have to consult the people of Thurrock, Chelmsford, Colchester, Braintree and Brentwood-to name the Secretary of State's constituency and indeed that of the noble Baroness, Lady Smith. We need some caution before going down the path scripted in this amendment. That is all I would say. There may be merit in the purpose but the wording needs very careful consideration.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

I have been rather eager to stand because I feel that this gets to the nub of the issue. I am not entirely sure whether my noble friend Lord Jenkin, who has presented these amendments, is the same noble Lord who just the other day was urging me to trust local people to run these affairs. Localism is the name of the Bill; localism is what it is about. I urge him to read his own speech in Hansard to realise why it is that the Government do not want to bind this policy up. If any organisation of significance feels that it is vulnerable to popular opinion and is so out of touch with local opinion that it is not able to realise that a referendum is being carried on which might affect its interests, it deserves all the expression of popular opinion that may come its way. I am sorry to be so frank but I am motivated by the nature of this argument.

I do not think that the noble Baroness, Lady Valentine, was in the Chamber when I introduced government amendments earlier today which excluded planning applications from the referendum process. That is very important to understand in this context.

Photo of Baroness Valentine Baroness Valentine Crossbench

I was aware that the noble Lord had introduced the amendments and I am delighted that he did.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

I am most grateful. I take on board what the noble Baroness said but noble Lords opposite and my noble friend Lord Newton have made it clear that this process should not be so burdensome that it kills off the very expression of local opinion that we want to generate.

As regards the amendments tabled by my noble friend, I share his concerns that no person should find himself featuring in a referendum without an opportunity to make representations on the matter. But that I am sure is in the nature of these things and the dialogue within local communities. I understand that my noble friend is using the word "person" in the strictly legal sense of meaning company and corporate activity. In my estimation, it would be a rare case, as I have said, that a referendum will in practice concern a situation where people are totally unaware of the issues that are subject to a referendum.

Similarly, in deciding whether to give effect to a referendum result, the local authority will have regard to the need to balance the views of all interested groups. It will have regard to the economic interests of the area as perceived by it as a local authority and as elected representatives. To take such decisions is what local government has to do all the time. If there was any doubt that it would be appropriate for authorities to consult people directly affected by referendums, I hope that what I have said will dispel that. We believe that the amendments are unnecessary burdens on authorities and I hope that my noble friend will not press them.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

I am grateful to all those who have expressed their views so frankly on this group of amendments. Of course, this is intended primarily to raise the issue and there have been a number of quite forceful responses. I am very grateful to the noble Baroness, Lady Valentine, and the noble Earl, Lord Lytton, for their support. Nevertheless, in response to my noble friend on the Front Bench, I feel myself in a sense wanting to say touché. Of course, I am not seeking to impose centrally or to tell local authorities the details of how they should do this. But it is part of the function of central government to protect local communities and ratepayers against possible abuse of processes by local government. One would always say that. But it does not need the great mass of legislation in this Bill.

Having said that, I am sure that those who have advised me on this will study the issue carefully and will decide whether it will be necessary to come back to this on Report. We will have quite a lot and it may be that this will not achieve enough support at that stage but we will look at it. In the mean time, I beg leave to withdraw the amendment.

Amendment 126ZA withdrawn.

Clause 46 agreed.

Clause 47 : Grounds for determination

Amendment 126A

Moved by Lord Greaves

126A: Clause 47, page 40, line 8, leave out subsection (2)

Photo of Lord Greaves Lord Greaves Liberal Democrat 4:15 pm, 30th June 2011

My Lords, I have been listening to the wonderful words of the Minister about how important it is that local government should not be encumbered by lots of detailed rules and regulations and thinking that at least we are on the same wavelength. Tongue in cheek, I wonder if he will take a pristine copy of the Bill home with him this weekend, and a nice big red pen, and annotate the Bill in appropriate ways to strike out a large number of the detailed regulations and the 140-odd provisions for yet more detailed regulations for local authorities, and hand it to a civil servant next week and say, "This is your job for a week; get rid of it". I live in hope.

I move Amendment 126A and the seven amendments in my name and that of my noble friend that are set out in this group together with Amendment 128A, as I announced earlier. There is a useful Labour amendment in the group but I will let the noble Lord, Lord Beecham, speak to it.

Clause 47 is an important clause because it sets out the grounds on which the council should make its decision when it receives a petition or indeed a request from a member about whether a referendum takes place or not. This is not a trivial decision. We have heard that referendums across London might cost many millions of pounds; but for any big councils in big cities, we are talking about millions of pounds. Even for smaller councils, it can be an important item in their budget, or one that is not in their budget, which nevertheless they have to find a way of covering. In the present financial circumstances this might well mean cutting other useful services.

This is a list. Whenever we put forward lists, we are always told by the Government to be very careful because, if we put things in the list, they are in, and if we do not put them in the list, people might think they are not in. In this case, we know that they are not in because Clause 47(1) says:

"A principal local authority may only determine"-

I emphasise "only determine"-

"that it is not appropriate to hold a local referendum in response to a petition or request on one or more of the following grounds".

The list in Clause 47 is extremely important because it ties the hands of the local authority. It does not say to it, as the Minister has pointed out, that if it is in the list, it cannot have a referendum; however, it provides grounds by which a referendum can be refused. Regardless of whether we agree with referendums, I think that everybody agrees that we do not want a proliferation of them. We do not want dozens of referendums taking place all over the place. We want them held on important and useful things.

These grounds are vital. Amendment 126A refers to the first ground. It is a probing amendment to find out what the words mean. Clause 47(2) says:

"The first ground is that the authority thinks that action taken to promote or oppose the referendum question is likely to lead to contravention of an enactment or a rule of law".

When I read this, I thought, "What does it mean?". The phrase,

"action taken to promote or oppose the referendum question", refers to something happening during the referendum campaign. It is not about the question itself-what the effect would be of carrying out what the referendum wants brought about; it is about action taken during the campaign which,

"is likely to lead to contravention of an enactment or a rule of law".

I can only think that this refers to the possibility of public disorder of some sort. Will the Minister say what the Government think it refers to? It is very difficult to see how this could be made to stick if it was challenged, because how would you know that the referendum question would be likely to lead to an unruly campaign? Alternatively, what else does it refer to? If it refers to a referendum question that is, for example, overtly racist, it would be easy to reject it, but the chance of getting such a referendum question is very small indeed. Racists who want to use a referendum to promote their cause are going to be more careful about how they word the question. So this is a probing amendment to find out what it means.

Amendments 126B and 126C challenge the word "influence", and again are probing amendments. We suggest that this should be brought in more tightly to a council's powers; that is, the things it can do. Even the general power of competence might be very wide. It is difficult to think of things that people might want to hold a referendum on but over which the council does not have some sort of influence. I suppose that a referendum about the melting of the Arctic ice cap might be thought out of order, but even then it might be tied to the council's climate change policies, so it is difficult to think of areas where the council has absolutely no influence. Some clarification of what the influence of a council is, in this sense, would be helpful.

Amendment 126D refers to subsection (4)(b):

"a principal local authority or a partner authority has an influence over a matter if the authority can affect that matter by the exercise of any of its general or particular functions".

That is very wide indeed, and I assume that it includes the new general power of competence. Is that true, because it means that it does go very wide? Amendment 126E seeks to insert a new subsection:

"The third ground is that the action requested by the question is unlawful or discriminatory, or would contravene the authority's codes relating to equality of treatment or its financial regulations".

Other noble Lords may think of other things that should be included, but this is clear. Surely it should be laid down that if the action requested by the petition and the referendum question is actually unlawful or clearly discriminatory against an ethnic group, the disabled, men, women or anyone else, and would contravene all the codes an authority has on equality of treatment, or if the council could not do something because of its financial regulations, then it should be able to be thrown out without question. Indeed, anything which it would be impossible for the council to do but is being asked for in a referendum should be more clearly set out.

I turn to Amendment 126F. However, as the Minister has already moved an amendment today, this amendment is not needed, and we are grateful for that. Amendment 126H refers to the grounds set out in the Bill. At the moment they do not seem to be sufficiently wide. A council ought to be able to refuse a referendum if it judges that it concerns a trivial matter and spending money on it would simply not be worth the candle. Similarly, if the council or someone else is doing something anyway, the referendum would be a waste of time because the decision has been made. The Government have already moved an amendment to deal with repetition which provides that another referendum on the same subject cannot take place for four years. That, too, is extremely welcome. Our definition of "disproportionate" is that the cost of holding a referendum is excessive when bearing in mind the cost of carrying out the proposal in question. If a council is being asked to spend £80,000 to hold a referendum when to do what the referendum is asking for would cost only £15,000, it is a pointless waste, whether or not the council wishes to do it.

Finally, we suggest that the fifth ground for the decision is that it is not appropriate because what is being asked for is the allocation of a disproportionate level of resource in one area when it is absolutely clear to the council that it is either not practical due to financial constraints or it would be unfair; that is, it would be possible but it would mean taking resources from existing schemes and services to put into a particular scheme or service that was being requested by an area in a way that would not be equitable across the authority. Knowing that before the referendum takes place, the authority can show that it is not financially viable and that holding a referendum would be a waste of everybody's time and money.

These amendments may not be perfect but the criteria that the Government are putting forward at the moment in this clause are not sufficient to give a council enough flexibility to carry out the kind of localist decision-making that the Minister talked about not long ago-on a common-sense basis, without holding referendums which will simply waste a lot of time and money and not achieve anything. I beg to move.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

I will speak to the amendment of the noble Lord, Lord Greaves, but also to my own Amendment 126CA, which would include on page 40, line 18, under grounds for determination in Clause 47, a definition of "local" which means that an issue can be,

"determined to be so by the principal local authority".

In other words, in addition to the conditions for what is local, it gives the authority the power to determine an issue of locality.

The noble Lord, Lord Greaves, has come forward with a mixed bag of amendments here. First, I will address his last proposition on the cost of the project relative to the cost of a referendum-or, indeed, the question of equity. That is Amendment 128A, to which he referred, on the deployment of extra resources in part of an authority's area. I am not quite with the noble Lord on this. Actually, a petition for a referendum is an opportunity to debate an issue that might be of significance to that part of an authority's area. Incidentally, I am not sure whether the amendment could extend to the whole of an authority's area or just part, and if so how that part is to be defined, except perhaps by the petitioners.

If there is such an issue, it is proper that it should be debated. Initially, no doubt, those promoting the referendum would be invited by the council to explain their position and the council would respond. That is a sensible way of proceeding. If they then wished to proceed to a referendum they should not be prevented from doing so. That is an opportunity, certainly for the residents or petitioners to make their case but also for the authority to exercise some leadership and explain what it is doing and the constraints within which it operates. It can make that clear not only for the purposes of the particular referendum but as a matter of general interest to the area as a whole. We all face these decisions about priorities all the time. They are perhaps insufficiently acknowledged or understood by the electorate. If referendums are a way to bring home some of these truths, particularly as they are non-binding, I would not want to resist them taking place.

The noble Lord's amendments include a reference to the question of influence as opposed to power. He cites the issue of the melting ice cap, implying that that is not a matter of local interest. The noble Earl, Lord Cathcart, is not in his place today, but if he were he might say that the residents of Norfolk have good reason to fear the melting of the ice cap. Saving the presence of the noble Lord, Lord Lawson, that issue might not be specifically related to the ice cap, but climate change and its impact on a community might well be a matter over which an authority has some influence and which it is relevant to ask it to look at. Influence would surely include a power, whereas the other way round it would not necessarily be the case. I would have thought that influence is actually a better way of looking at that issue.

I want to refer to one other amendment that the noble Lord spoke to. It is Amendment 128D, on the disproportionate cost of the referendum,

"bearing in mind the cost of carrying out the proposal in ... question".

Again that raises a difficulty, as a matter might be of considerable significance to people but not involve much cost. There might be, let us say, a traffic issue or something of that kind which might be felt to be of great importance in an area. The referendum might be more costly than the exercise of dealing with the issue but I would not like it to be precluded simply on those grounds. Again, I hope that the very process of getting to the point of a referendum might facilitate the resolution of matters. As I indicated in an intervention on the noble Earl, Lord Lytton, there are other methods. Given that this will be on the statute book, it seems wrong to define too narrowly the situation in which it might be used. This might be an example of going a little too far to restrict the right, so I would not support the noble Lord on that amendment.

Photo of Lord True Lord True Conservative 4:30 pm, 30th June 2011

My Lords, I would also like to warn against this. Although I have some sympathy with some of the amendments spoken to by my noble friend, I think that Amendment 128A could cause great difficulties. As is emerging in this Committee, I am rather more enthusiastic about or tolerant of referendums than my noble friend perhaps appears to be. The reality is that when local authorities are being forced to restrain their spending, as they are at the moment-in our case £30 million was taken out of the budget-the last line,

"taking into account the resources available to the authority", would mean that, at a time of contraction, a local authority would effectively be able to say no to any referendum on the general basis that, "We can't afford what you're asking for". That could be used by some authorities simply to say, "We can't do any of it, so bye-bye".

Equally, it would be quite difficult to resist calls for referendums, per contra-if ever that day comes; I do not expect to see it in the foreseeable future-when there are more resources coming into local authorities. I would be nervous about that and I rather agree with the noble Lord, Lord Beecham. Let us say, for example, that a community wished to see its local school expand but it was not possible at that time. Why would it not be reasonable for them to put their case forward in a referendum and put a marker down for some time in the future? I could not follow my noble friend on that amendment.

I think that Amendment 126CA, which was tabled by the noble Lord, Lord Beecham, and states,

"determined to be so by the principal local authority", is also in this group. I must tell my noble friend that I have some sympathy with this amendment as it emerged in earlier discussions. This is linked to the power that we discussed for individual councillors or pairs of councillors to launch referendums. Unless the local authority is able to determine what is a local matter to that authority, we could perversely be creating a situation where, for example, in its standing orders the local authority forbids discussion of the wars, perils and plagues around the world and yet a member of the council who wishes to have that matter discussed could use the referendum power to say, "Let's have a referendum on this subject". They might get some support and it could be a way of getting round it.

Again in the cause of localism, it should be open to the local authority to determine in every respect the way in which matters to be discussed impact on it, either directly or indirectly through a referendum. It should be left to the local authority at least to be able to have enough influence to align the mechanisms with a simple, coherent definition of what is a local matter. Apart from my liking for localism, the noble Lord, Lord Beecham, may have at least a useful argument there.

Photo of Lord Lucas Lord Lucas Conservative

I would add that Amendment 128D also gives authorities a complete get-out: they simply say that they are already considering the matter, and that is it.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

This has been a useful debate. I am very grateful to the noble Lord, Lord Greaves, for opening it, but even more grateful to my noble friend Lord True and the noble Lord, Lord Beecham, for their contributions. They recognised that there are difficulties in seeking to restrict the use of referenda too far. For example, Amendments 126A and 126E would replace the generic reference to,

"action taken to promote or oppose a referendum question leading to a contravention of an enactment or rule of law".

I suspect that my noble friend Lord Greaves is presenting this as a probing amendment to find out what this is about and what sorts of enactments are considered unlawful. Clearly, no local authority could be obliged to consider through a referendum something which is unlawful. I hope that I can reassure my noble friend that the provision as drafted achieves the result that he requires. The Equality Act 2010, for example, is clearly "an enactment". The way in which Clause 47(2) is drafted actually caters for all the sorts of things that we would all want to catch and leaves no space for mischievous attempts to get round the protection, such as by phrasing a question cleverly so that it is not "the action requested" that would be unlawful, but the campaign surrounding the referendum.

The second ground that my noble friend mentioned was that the matter was not a local one over which the local authority has influence. My noble friend wanted to know what influence was and what would be the effect of replacing the word "influence" with the word "power". Amendment 126D removes Clause 47(4)(b), which contains the definition of "influence". We can appreciate the intention behind these amendments; nobody wants councils to be forced to hold irrelevant referendums and we have seen how the unconstrained power for electors to force parish polls has sometimes been misused by particular lobby groups to force polls on matters that are far removed from the remit of parish councils. However, if my noble friend is asking whether "influence" in Clause 47(4)(b) includes the general power of competence, I would say that indeed it does.

I do not believe that the alternative drafting suggested by noble Lords improves on what is in the Bill. When one considers the impact of Clause 1, one needs to be quite cautious about referring to situations where local authorities have "power" in future. I hope that noble Lords will accept my assurance that the formulation in Clause 47 is framed broadly enough to differentiate the circumstances where there is a manifestly inappropriate attempt to abuse the referendum system from one where there is an issue of local importance in which the local authority has a genuine role. My noble friend has acknowledged that his amendment is unnecessary in the light of the government amendment.

Amendments 126H and 128D seek to expand the fourth ground to give local authorities greater scope to reject a petition. We accept that there is a case for giving councils the flexibility to reject repetitive petitions or requests for referendums, and I hope that my noble friend will accept that the proposals set out in the government amendments that I outlined earlier will meet his concerns. I contend that the arrangements in those amendments offer a better solution to what we all hope will not in fact become a problem in practice. The key to deterring frivolous calls for a referendum is to have in place a robust system for dealing with such things.

I am not sure that my noble friend is right. The noble Lord, Lord Beecham, grasped the point that cost is not the proper equation to be taken into account in judging whether a council should be able to refuse a referendum. Something may be extremely important to a local community that may involve little expenditure in terms of its implementation but would have a great impact on people's lives, and it is perfectly proper that that should be a subject for a referendum if the local authority feels that that is correct. So long as we get the framework right, and I believe that we have, there will be no point in anyone attempting to abuse the system and so they may not bother.

On Amendment 128A again, I agree with my noble friend Lord True. As he has said, that amendment would enable any referendum to be refused. I cannot see that that is the purpose of the legislation, and I hope that my noble friend Lord Greaves will reflect on that.

Amendment 126CA of the noble Lord, Lord Beecham, seeks to provide that a local matter will be a matter determined to be so by the local authority. We agree that it is for local authorities to determine whether or not it is appropriate to hold a local referendum. Our provisions give local authorities discretion to do that, subject to certain safeguards that we have discussed today. I am therefore not convinced that this amendment either is necessary or would make any practical difference, given the wording of Clause 47(3), which refers to whether the local authority,

"thinks that the matter to which the referendum question relates is not a local matter".

So, that phrasing is already there. I hope that, given these assurances, the amendment will be withdrawn.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, I will think carefully about whether to withdraw it. Clearly I am not going to win on some of the amendments in the group, such as Amendments 128A and 128D, and it may well be that the clear majority view in the Committee is right. However, this has been a useful discussion and I thank noble Lords who have taken part.

The Minister said, and I think I quote him accurately, "So long as we get the framework right, then it'll all be okay". However, we are talking here about some of the framework, and you cannot rely on local authorities to get the framework right unless the legislation is right.

There are two areas that require more thought. The first and by far the most important concerns things that are illegal or contrary to council codes of conduct. The Minister said, rightly, that no council would want to carry out actions as the result of a referendum, or indeed to carry out a referendum, calling for things that were not legal. However, I think that what words say in legislation is important. As I read the proposal, and as I said when I was moving the amendment, the unlawful thing set out there is not the request in the referendum question-not what the question is calling for-and it is not the outcome of the referendum if it were successful; rather, it is the campaign, or action taken to promote or oppose the question in the referendum. That must mean what happens during the referendum campaign, not what happens after people have voted and the consequences that occur if the council decides to go ahead with a proposal as the result of a referendum being passed. There is a real difference there. Perhaps the Minister can tell me why I have got it wrong.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, I may have misunderstood my noble friend. I have listened to what he is saying, and there is no way that any campaign of any description can be based on illegal acts. I hope that I have not misunderstood my noble friend. If I have, perhaps he might have a word with me and explain where I have gone wrong. Not only is it not possible for a referendum to be put that demands a council to perform illegally, it is clearly wrong for campaigners to offend against the law in the nature of the campaign or statements that they make in seeking to petition for a referendum.

Photo of Lord Greaves Lord Greaves Liberal Democrat

The Minister is absolutely right. The law is the law, and if people break the law, they break the law. My point is that, as I read the legislation, the illegality refers to the likelihood of people breaking the law during the election campaign as a ground for refusing to have a referendum. Although I tabled an amendment to remove that, it was a probing amendment and I am not suggesting that it should be removed. I am suggesting that it should be made absolutely clear that the ground for refusing to have a referendum is that what is being asked for as the outcome of the referendum is not legal. I cannot understand why that should not happen. That is different from the conduct of the campaign, but I am happy to discuss this informally with the Minister.

Briefly, the Government should think about the "trivial" point. This clause currently refers to questions which are "vexatious or abusive", wording which comes from the Local Democracy, Economic Development and Construction Act 2009 in relation to petitions. That Act is being repealed, and we will probably have the same debate over that.

A council ought to be able to reject a petition for a referendum on the grounds that the issues in it simply are not worth the candle-that they are "trivial", or whatever wording the Government would come up with; that they are de minimis in some way. Perhaps the Government will reflect on that. I beg leave to withdraw the amendment.

Amendment 126A withdrawn.

Amendments 126B to 126F not moved.

Amendment 126G

Moved by Baroness Hanham

126G: Clause 47, page 40, line 25, leave out from "ground" to "is" in line 27

Amendment 126G agreed.

Amendment 126H not moved.

Amendment 127

Moved by Lord Lucas

127: Clause 47, page 40, line 28, at end insert-

"( ) The fifth ground is that the referendum question includes or relates to planning matters."

Photo of Lord Lucas Lord Lucas Conservative

My Lords, the Minister has got ahead of us on this with Amendment 128E being debated rather earlier today, but I do not see that Amendment 128E covers the cases that interest me. Perhaps, if I am wrong about that, my noble friend can explain. I am principally interested in the way in which allowing planning matters in under a referendum would make a mess of the provisions for neighbourhood planning. We have extensive provision there for referenda and there should not be a cross-cutting system which allows that process, which is difficult and expensive enough to organise anyway, to be upset by people running competing referendums, or in other ways trying to upset the decision once it has been made.

My noble friend's amendment looks at the granting of planning permission. I am much more interested in the creation of a neighbourhood plan. Subsection (4)(b) of the government amendment refers to,

"a statutory right of appeal in respect of the substance of the matter or decision", on the part of persons adversely affected. In other words, it is saying that this provision does not apply if there is no third-party right of appeal, which I think there is not in a lot of planning permissions. I view the scope of subsection (4) of Amendment 128E as being very limited compared with the sort of exclusions that I would like to see. As all planning is dealt with very satisfactorily in the neighbourhood planning section, it should not be allowed in the local referendum section in any form. I beg to move.

Photo of The Earl of Lytton The Earl of Lytton Crossbench

My Lords, as I explained to the Minister earlier today, I think that Amendment 128E has largely covered my amendment. However, like all amendments, there was a supplementary purpose lurking behind it, which was to try to probe the wider interaction between the facility of referendums generally, especially in their cumulative effect-the noble Lord, Lord Beecham, who is not in his place at the moment, touched on that a few minutes ago-and the wider family of the statutory functions of local authorities. It is instructive to note Amendment 128C relating to transport.

I have lost count of the number of times that the burdens on local authorities on the one hand and the need to get at the authentic voice of people on the other have been referred to in this part of the Bill. We are considering the effects for a democratically elected representative body whose functions might not work terribly well, or be effectively discharged, if a referendum is imposed. The Bill cannot be all things to all men. We have to have a balance between vox populi on the one hand and the effective administration of local government on the other. That balance needs to be explained.

I hope that the Minister will be able to elaborate on some of these points, but I certainly think that there is an issue here, which was touched on in earlier debates in Committee. We need to be clear to what extent people within a community should engage with the representative and democratic processes of those who are set up to represent those community interests as opposed to reaching for some bypassing measure in the form of a referendum.

Photo of Lord Best Lord Best Crossbench

My Lords, Amendment 128B is in my name. I do not think that we have given the Government enough credit for the amendment that we heard of earlier today, because that seemed to me to satisfy, if not entirely-I want to dwell on that-a good deal of the misgivings that we have had about referendums applying to the world of planning. We now have an amendment that will mean that planning applications are taken out of the reach of petitions and referendums. That is an enormous difference from where we were yesterday. I want to place on record my appreciation to the Government for taking that forward. It means that another laboriously prepared speech of mine is now redundant, but the amendment is extremely welcome.

Our hesitations about where we have got to are as follows. We understand that discretion is there for local authorities not to go ahead with referendums if there is a statutory process that gives members of the public opportunities to make representations and a statutory right of appeal or of investigation through a review. However, although that clearly applies to individual planning applications-great stuff-does that apply to all of the processes of preparing local development plans? I think that it must cover the preparation of the local development frameworks. If it did not cover the local authority preparing its local development plan, that would be disastrous. Throughout local government, we are already way behind in getting those local development frameworks undertaken. The abolition of regional spatial strategies means that we will be in limbo if local authorities do not have their own local development plans. We must get on with that. It would be incredibly difficult for the Government to pursue their growth agenda and do the good things that they want to do in terms of the development of renewable energy and the development of new homes if the threat of referendums was hanging over the creation of local development plans.

Beyond that, there are supplementary planning documents. They may not have the full panoply of examination in public and independent inspection in all cases. For removal of doubt, it would be better to have an amendment such as that in my name or in the name of the noble Lord, Lord Lucas, that takes the whole of the planning scene out of the referendum process. If we cannot, can we at least have firm reassurance that the process of producing local development plans, with the supplementary elements that go with them-the whole of that process-will be excluded by this excellent amendment?

Photo of Lord True Lord True Conservative

My Lords, I am sorry to strike a discordant note, but I strongly disagree with aspects of the remarks of my noble friend Lord Lucas and the noble Lord, Lord Best, in relation to parts of the planning system. We discussed this briefly earlier, and I will not reiterate my remarks then.

My noble friend Lord Taylor undertook to write to me about referendums where a London borough, in the case I gave, may have set up an indicative planning brief but the higher, regional authority intervened with an alternative proposal. I think it is entirely justifiable-indeed, desirable-that there should be a referendum in those cases. It would be most unfortunate if the legislation ruled out such an eventuality. It would disfranchise people on some of the most basic and fundamental issues that affect their lives and the nature of how their community develops.

I certainly could not support an amendment ranging as widely as that of my noble friend Lord Lucas. "Planning matters" is wording far too widely cast. Of course I agree with the point established in Committee; I think that most noble Lords agreed that we do not want to encourage referendums on individual planning applications. I also have very grave doubt about how far we should cast it in relation to local development plans and frameworks.

We have a local development framework at the moment, which it is clear that the public do not find satisfactory. As neighbourhood planning develops, a referendum might well be desired by people or wished for by the council. That is a useful device in an age of localism in involving people in such fundamental issues.

I hope that my noble friend will resist casting that constriction on the right of people to be heard on the neighbourhood and place in which they live. Nothing to my mind is more fundamental in the 21st century to the role of a local authority than the spirit of place. People's opportunity to express their view about the nature of their place in terms of the broad planning framework under which they live in their communities seems to be absolutely vital. It would send a hard and difficult message if the Committee were to constrict that opportunity in the way suggested by the noble Lord.

Photo of Lord Brooke of Alverthorpe Lord Brooke of Alverthorpe Labour 5:00 pm, 30th June 2011

My Lords, I hope that you will forgive me for intervening as I did not speak on Second Reading. Under this heading, I wonder whether the Minister can clarify whether there is an exemption on petitioning and on moving to have a referendum on car-parking charges. I discovered that my area in London recently increased car-parking fines to £130-a phenomenal increase. I gather that many of these increases are taking place in different locations on similar scales around the country. I wonder whether this will provide the opportunity for the citizen to petition against those, or indeed move for a referendum.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I shall speak briefly to the amendments, and say that we are with the noble Lords, Lord Best and Lord Lucas, on this. It is an opportunity for the Government to set out quite broadly their view on the exclusion, not only for particular planning applications but for the broader role of planning briefs and everything that goes with the planning process. Like the noble Lord, Lord Best, I think that we should congratulate the Government on their earlier concessions. That has helped our deliberations to move on a lot.

I say to the noble Lord, Lord True, that of course it must be right that people have the opportunity to engage and influence their neighbourhood and place. That is just what the neighbourhood planning provisions in the Bill are designed to do, with a referendum attached to that. We have some amendments coming now suggesting that there should be earlier consultation in the process of those engaged in developing plans, so we are with you on that. That is within the structure of the Bill. The noble Lord, Lord Best, made an important point about LDFs. We need to get on with that as so many of them are not yet completed. We have a lacuna, with regional spatial strategies going before many of these plans were in place, and the data associated with all of those are in danger of disappearing. We propose to deal with that by transition arrangements but that is a debate for another day, if not another week at the rate we are going. I hope that the Government will take the opportunity to clarify, as far as they are able, the scope of the exemption around planning as that is hugely important.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, I am grateful for this opportunity as it was a key area and the decision to table the amendments has helped to move the Bill forward. I am, however, in a less than satisfactory situation in the sense that we can see that a number of factors now come into play. The definition of planning appeals, an appeal process, and the rest of it means that it will require some further thought to see what the implications are. It is clear that a referendum on planning applications can be ruled out, but indicative planning and the like with consultative processes are a matter that we need to consider, as well as how exactly they might be brought into this process. My noble friend Lord True carefully articulated the importance of making sure that the public voice in these matters is not stifled. We accept that, but on the other hand we do not want the whole referendum process to be totally absorbed on planning matters.

I promised my noble friend Lord True that I would write to him. Indeed, I will write to all noble Lords and place a copy in the Library of our position on this issue, so that it is quite clear. However, I do not from this Dispatch Box want to give an on-the-hoof answer which may mislead noble Lords in this regard; I do not think that helps to take the debate forward and I apologise.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

We appreciate what the Minister has said because we are likely to get into planning issues next week-maybe on Tuesday at some stage, or maybe not even till Thursday. It would really help our deliberations if by then the Government had been able to focus more specifically on these issues, and perhaps we could have some reassurance on that.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

I thank the noble Lord for assisting me. Knitting it into the neighbourhood planning proposals is clearly going to be important as well.

The noble Lord, Lord Brooke of Alverthorpe, was worried not so much about his car-parking charges as the fines when he did not pay them, if I heard him correctly. At any rate, perhaps one may lead to the other. Our amendments put in place a framework for councils to decide to refuse a referendum in certain cases. The issues raised by noble Lords clearly illustrate how difficult it would be to compile a list. This is why we have adopted our approach in our recommendations generally about how councils may determine particular referendum petitions.

Photo of Lord True Lord True Conservative

May I briefly assist the Committee and perhaps my noble friend if I made it clear that Clause 47(6), whether we like the word "vexatious" or not, helps to guard against some of the fears of my noble friend Lord Lucas and the noble Lord, Lord Best? If there were a case where hundreds and thousands of people had been involved in indicative planning and the process of planning, clearly a referendum that then came along from a group would potentially be vexatious. A local authority could resist that. Maybe "vexatious" is not the right word, but what concerns me is the case that I cited of a regional body, London, interfering with a lower body where there has been no effective consultation, it was a choice between two visions of the future and there has not been adequate public involvement. It might in those cases not be vexatious to have a referendum. It might be illuminating and that is the difference. Perhaps in considering this, my noble friend might want to look at the application of Clause 47(6) and how that would bite on these potential powers.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

Again my noble friend makes a valuable contribution and points out how complex this is going to be in terms of definition. I would like to thank him for his contribution and my noble friend Lord Lucas for tabling the original amendment which has given rise to this debate. I hope I can persuade him to withdraw it, but I think the noble Lord, Lord Brooke, wants to come back.

Photo of Lord Brooke of Alverthorpe Lord Brooke of Alverthorpe Labour

I am grateful to the noble Lord for helping me to differentiate between charges and fines. I was indeed referring to fines and, as somebody asked me which was the borough, I say that it was Wandsworth. It has the lowest council tax in the country, but some of the highest fines and charges. Was he saying to me that, in his view, an attempt to have a referendum in that area would probably be ruled out?

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

I can say to the noble Lord that the first indication I had about the correct response had a simple two-letter word: no-that it would not be possible. However, I sought further elaboration and gained a slightly more elaborate response, though the short answer is probably correct-that this would not be a subject on which a local referendum could be held.

Photo of Lord Lucas Lord Lucas Conservative

My Lords, that is a pity. I hope that my noble friend, as he is in letter-writing mood, will let the noble Lord, Lord Brooke, and me know why this could not be the subject of a referendum. It is one of the main ways in which local authorities choose to beat their residents about the head-one of the main reasons why the residents of Richmond are now happy to have my noble friend Lord True there rather than the previous incumbent. It seems to be very much the sort of thing that local referendums should be about. However, I am sure that my noble friend will be able to give us some comfort on that-or at least point out where in the Bill is the clause that stops us having referendums on this issue, so that we can take it out on Report.

As to what we were supposed to be talking about, I am very grateful to my noble friend for offering to write. It is a very complicated area and not one where I profess any expertise: I was mainly concerned that we were producing something that would cut across the bit of the Bill which really interests me, namely neighbourhood planning and how it works. My noble friend and other noble Lords-including my noble friend Lord True-have raised many subjects to which I will be very interested to read the answers. My particular worry is that proposed new subsection (4)(b)(i) in Amendment 128E seems to suggest that this is a matter in which injured and adversely affected persons have a right of appeal. In the case of most planning applications, one can consider oneself adversely affected if one has to look at an ugly monstrosity across the street, yet one does not have the right to appeal because there is no third-party right of appeal. I am concerned that the wording of the amendment does not exempt most planning applications, but I am sure that the Minister will cover that in his reply.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, U-turns are allowed nowadays in politics, are they not? I will correct an answer that I gave. I misread the answer that I was given to the question of the noble Lord, Lord Brooke, about a referendum. Councils could not refuse to hold a referendum on car-parking charges: the referendum would need to be held.

Photo of Lord Lucas Lord Lucas Conservative

I want to just stand here and feel happy for a bit, but I will beg leave to withdraw my amendment.

Amendment 127 withdrawn.

Amendments 128 to 128D not moved.

Clause 47, as amended, agreed.

Amendment 128E

Moved by Lord Taylor of Holbeach

128E: After Clause 47, insert the following new Clause-

"Petitions: special cases in which holding of referendum is discretionary

(1) Where a principal local authority has under section 46 made a determination that it is appropriate to hold a local referendum in response to a petition, the authority (if it has not already done so) must cause the petition to be-

(a) considered for the purposes of subsection (2) by its chief finance officer, and

(b) considered for the purposes of subsections (3) and (4) by the proper officer.

(2) The petition is a special-case petition if the authority's chief finance officer estimates that the cost of holding a local referendum in response to the petition would be more than 5% of the amount last calculated by the authority before it received the petition as its council tax requirement for the financial year in which the petition was received by it.

(3) The petition is a special-case petition if the proper officer of the authority is of the opinion that the matter to which the referendum question relates has been, or has substantially been, the subject of at least one local or other referendum held-

(a) in the four years ending with the date on which the petition was received by the authority, and

(b) in the area to which the petition relates (whether or not in that area alone).

(4) The petition is a special-case petition if the proper officer of the authority is of the opinion that-

(a) there is a statutory process and it is the case, or is substantially the case, that the process involves giving-

(i) members of the public, or

(ii) members of a section of the public, an opportunity to make representations in relation to the matter, and

(b) it is the case, or is substantially the case, that persons adversely affected by the matter or a decision made in relation to it have-

(i) a statutory right of appeal in respect of the substance of the matter or decision, or

(ii) a statutory right to instigate a review of the substance of the matter or decision.

(5) A person is not to be taken as having a right within subsection (4)(b)(i) or (ii) as a result of being able to-

(a) make an application for judicial review,

(b) make a complaint under Part 3 of the Local Government Act 1974 to a Local Commissioner, or

(c) make a complaint to a housing ombudsman under a scheme approved for the purposes of Schedule 2 to the Housing Act 1996.

(6) In this section-

"council tax requirement", in relation to the Greater London Authority and a year, means the aggregate of-

(a) the component council tax requirement for the year for the London Assembly, and

(b) the component council tax requirement for the year for the Mayor of London;

"chief finance officer", in relation to a principal local authority, means the officer having responsibility, for the purposes of-

(a) section 151 of the Local Government Act 1972,

(b) section 6 of the Local Government and Housing Act 1989, or

(c) section 127(2) of the Greater London Authority Act 1999, for the administration of the authority's financial affairs;

"the referendum question" has the meaning given by section 47(7);

"statutory" means provided for by an Act or an instrument made under an Act."

Amendment 128EZA (to Amendment 128E) not moved.

Amendment 128E agreed.

Clause 48 : Action following determination in response to petition

Amendment 128EA not moved.

Amendments 128F and 128G

Moved by Lord Taylor of Holbeach

128F: Clause 48, page 41, line 1, after "referendum," insert "and

(b) the petition is not a special-case petition,"

128G: Clause 48, page 41, line 3, at end insert-

"(3A) Subsection (3B) applies if-

(a) the determination is that it is appropriate to hold the referendum, and

(b) the petition is a special-case petition.

(3B) The proper officer of the authority must-

(a) if the authority is not the Greater London Authority, arrange for a meeting of the authority to decide on a resolution that the referendum should be held, or

(b) if the authority is the Greater London Authority, arrange for the authority to decide on a resolution that the referendum should be held.

(3C) The arrangements under subsection (3B)(a) or (b) must be such as to enable the decision concerned to be made as soon as is reasonably practicable after-

(a) the determination is made, or

(b) if later, the officer concerned came to be of the opinion as a result of which the petition is a special-case petition.

(3D) If the authority-

(a) is not the Greater London Authority and resolves at the meeting mentioned in subsection (3B)(a) that the referendum should be held, or

(b) is the Greater London Authority and resolves that the referendum should be held, it must make arrangements for the referendum to take place in accordance with sections 51 to 54."

Amendments 128F and 128G agreed.

Amendment 128H

Moved by Lord Greaves

128H: Clause 48, page 41, line 8, leave out subsection (5)

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, in moving the amendment I will say how nice it is to see the noble Lord, Lord Brooke of Alverthorpe, in his place. The noble Lord could have his referendum on parking charges and the council would meet the cost of the referendum by increasing the charges even more. Who knows what unintended consequences may occur? I will now speak to the amendment before the Whips start glowering at me.

Amendment 128H is about the publicity that a principal local authority has to give to a determination that it is not appropriate to hold a referendum. Clause 48(4) states:

"If the determination is that it is not appropriate to hold the referendum ... the notification must give the reasons for the determination, and ... subject to subsection (5), the authority must publish those reasons when it publishes the determination".

That all seems fine. But then subsection (5) says a quite extraordinary thing:

"A principal local authority is not obliged to publish those reasons if it thinks that in all the circumstances it would be inappropriate to do so".

I cannot think of any circumstances in which it would not be appropriate to publish the reasons why the local authority has decided not to hold the referendum when it gets a petition which otherwise matches all the necessary conditions.

The grounds for determination are set out in Clause 47 which we have been discussing at some length and they are fairly clear-they would be even clearer if some of my amendments were passed. Even so, the Bill is going to include a clear statement of the reasons why a council can decide not to have a referendum even though it gets a petition.

Amendment 128Q is exactly the same wording in relation to a request for a referendum from a member. Whether it has to tell the member the reasons why it is not going to have the referendum the member is asking for, I am not quite sure, but it seems quite extraordinary that this is the case. It takes me back to my very early days in local government, which are far too long ago, when the council I was on-and no doubt many others-used to publish a minute for a decision that said something like, "That the action now mentioned be carried out by the officer now named".

That sort of thing does not happen any more. My understanding is that local authorities are now under a general obligation to state the reasons for all the decisions they make and publish. That is certainly what the local authorities I know all do and I think that is now required. If a decision can be made not to hold a referendum without having to say why, then if the people asking for the referendum are rich enough it is a recipe for lining the pockets of a lot of lawyers. If they are not rich enough they will just get very angry and the whole process will be undermined.

I am challenging similar provisions in Amendments 129D and 129CAA which cover what a local authority does after a referendum and the action it decides to take. Again, it is suggested that if no action is taken then the authority has to publish the decision. In this case what the Bill says is right: the authority has to publish the decision and the reasons why if it decides not to do anything about a referendum that has been carried by a majority of people voting and calls for action. However, it does not have to say anything at all if it decides to carry out what the referendum wants or it decides partly to carry out what the referendum wants or to do something slightly different which might achieve some of the same objectives.

It seems to me that whatever the decision is on the basis of the referendum that has taken place, the local authority ought to make a clear statement of what it is going to do in response to the referendum, the decision of the referendum and give the reasons why. In this case, I suspect it is that the people drafting this have not thought through it 100 per cent. I would have thought the Government could have redrafted this part without any real problems. The first two, where it clearly says that you do not have to say why you are rejecting it, are clearly wrong and must be challenged.

Amendment 128J is the other amendment in this group and takes us back to some discussions we had on the Local Democracy, Economic Development and Construction Act when it was going through this House on the question of identification of the organiser of a petition. It was all very unsatisfactory when that Bill came to this House. We got it right. This is less unsatisfactory but it is still not quite right. Clause 48(6) states:

"In this Chapter 'petition organiser', in relation to a petition, means-

(a) the person designated in the petition as the person with whom the authority may deal in relation to the petition".

It is possible that a petition will come in and the person is not actually designated in the petition but the person identifies themselves as the organiser, they turn up and hand it in, they have a covering letter that they have signed or something like that. Amendment 128J suggests a slightly better wording. Instead of,

"designated in the petition" it suggests,

"notified when the petition is delivered to the authority".

All the authority needs to do is to ask who the person in charge of the petition is. It might be the first name on the list; it might be the person who has simply signed the covering letter; it might simply be the person who turns up at the council offices or hands it to the mayor, or whatever they do, and identifies themselves as the organiser. The subsection just needs to be clarified a little. I beg to move.

Photo of Baroness Whitaker Baroness Whitaker Labour

My Lords, some noble Lords may think that my one question for the Minister might have sat more easily with amendments in previous groups, but I hope they will indulge me because then I had to be in the Education Bill Committee, to which I shall shortly have to return. My question can loosely be attached to this group of amendments.

The problem that has been brought to my attention is that when local authorities are bound to publicise and take the outcomes of referendums into account in decision-making, it could result in them being pressured by local communities into disregarding welfare issues and the rights of Gypsies, Travellers and others. We know that there is form on this. Local communities have had that kind of attitude. My question for the Minister is: is there any safeguard to deter that?

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

Perhaps I may help the noble Baroness, Lady Whitaker. She may not be aware that one of the government amendments makes it clear that planning applications-it is often under planning applications that these matters arise-are excluded from the provisions for referendums. The noble Baroness will remember that we had a brief exchange about this earlier. The whole business of provision for Traveller populations is subject to direction and regulations as far as local authorities are concerned, so it is an area in which local authorities are obliged to act properly. It is also an offence for people to campaign on these issues in a way that breaks the law. I hope that the noble Baroness is content on that matter.

The amendments tabled by the noble Lord, Lord Greaves, require the council at all times to publish its reasons for such a determination. We believe that the vast majority of local authorities-in fact, almost without exception-will publish their reasons for such a determination. They want local people to know why their petition or the request from their councillor was not considered appropriate. However, removing the discretion not to publish those reasons could mean that the council is required to publish details that may be confidential or otherwise inappropriate. For example, the petition could relate to an individual for whom it would cause further embarrassment to publish details of the petition or breach their human rights. In such a case, the authority would be able to report that the petition had been rejected but without any further detail.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

Why could the local authority not say that it is not elaborating because of confidentiality or the Human Rights Act? Why should it not make that clear in those circumstances?

Photo of Lord Tope Lord Tope Liberal Democrat

My Lords, that is exactly my point. I thought that the Minister had just given the reason which the local authority would give in those circumstances for not accepting it. If I remember rightly, the question asked by my noble friend Lord Greaves was, "What are these exceptional circumstances?". The example that has just been given is not one of them because the local authority would give the reason which the Minister has just given us.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

Perhaps in continuing to respond to this set of amendments the answer might become clearer. The noble Lord went on to suggest that with the words "designated in the petition" and in seeking to get a particular person named as the petition organiser, it would be reasonable to expect that a petition will usually make clear who an organiser is and that in most cases the organiser will welcome being the contact point for the petition. However, it is possible that a petition could fail to specify the organiser and we expect authorities to act reasonably in seeking to identify who might take on that responsibility. Little is added to this clause by imposing a requirement on anyone to provide a notification. Where the petition is clear, the person identified will be the organiser; where it is unclear, the discretion in Clause 48(6)(b) enables an authority to decide who appears to be carrying out the role of organiser. My reaction in considering this amendment is rather overshadowed by my political campaigning background. I have explained the difference between electoral processes and the petition process, but I see what my noble friend is driving at. If there is ambiguity in this matter, I am prepared to look at this again.

I am not convinced that Amendments 129CAA and 129D are necessary. It is reasonable to expect that if a council or partner authority decides to give effect to a referendum they will tell people about how they have listened and acted on their views or that local people will notice it anyway. However, the provision in Clause 55 is important in that it ensures that where partner bodies decide not to give effect to a referendum result, local people are made aware of the reasons why. I hope that that explains that. Sometimes giving the reason for the rejection can give the game away; for example, it could identify that an individual had a criminal conviction. This is another reason why it might be essential to have discretion in the Bill. However, given the contributions made by noble Lords, we will look at this and see if the wordings do reflect exactly what it is the Committee would wish to see in the Bill.

Photo of Lord Tope Lord Tope Liberal Democrat

My Lords, I am grateful to the noble Lord. I suspect that as he was speaking he was remembering many of the things that I am only too well aware of in the reality of petitioning. On the question of the exceptional circumstances, if they were reasons of a confidential nature I imagine that the local authority would use the words that they use now when they going into confidential session as the reason for not pursuing the Bill. These are not major points that will hold up the Bill but we should look at them to see whether there can be better wording. If there really are exceptional circumstances that the local authority is unable to state-and I am bound to say that I cannot think what that might be, because if something is of a confidential nature then that would be the reason-then we should say what they would be. I cannot think that there are any that cannot be covered by the appropriate form of words.

Amendment 128H, which is in the name of my noble friend Lord Greaves and refers to "designated in the petition", once again reminds me of the happy hours we spent on the local democracy Bill and all that that legislation prescribed on petitions. I recall that my noble friend brought in some petitions to his council, which did not look like petitions to Parliament in any sense. We all know that they are not usually neat and tidy, with the petition organiser's name at the top. Again, this is not a major point. My noble friend has suggested an alternative wording which I think would meet it very well. However, the term "designated in the petition" does not meet it. Most of the petitions to my council that I have seen-and I suspect that the Minister has had similar experience-do not designate anyone in the petition itself. It just does not work that way. Therefore, a rather simpler, looser way would serve the point much better and save people getting into an unnecessary tangle.

Photo of Lord Greaves Lord Greaves Liberal Democrat 5:30 pm, 30th June 2011

I am grateful for the support from my noble friend and others, and for the fairly emollient response from my noble friend the Minister. The first point that I was going to make has just been made by my noble friend. Councils deal with decisions all the time-for example, not giving licences to people because they have criminal convictions. Sufficient reasons are given for those decisions without going over the top and hauling them out into the open and putting them in the local stocks, which we have in my town. I cannot think of any decisions minuted by my council in the past two decades for which the reasons have not been set out. People are perfectly capable of writing decisions that are appropriate in the circumstances.

However, I cannot quite understand how criminal convictions will come into this. I suppose that the petition organiser might turn out to be a complete rogue, but why should that invalidate a petition that was otherwise perfectly valid, especially as the Minister said earlier that people in prison should be able-it is slightly extraordinary-to sign these petitions even though they cannot vote? I cannot see why a person should not be able to organise a petition in his community simply because he has criminal convictions. The petition itself is hardly likely to reveal people's criminal convictions. Is it? I do not know.

I am grateful for what the Minister said. I think that we will have a few more chats about this. I beg leave to withdraw the amendment.

Amendment 128H withdrawn.

Amendment 128J not moved.

Clause 48 agreed.

Clause 49 : Action following determination in response to request

Amendment 128K

Moved by Lord Taylor of Holbeach

128K: Clause 49, page 41, line 20, leave out "arrange for a meeting" and insert "-

(a) if the authority is not the Greater London Authority, arrange for a meeting of the authority to decide on a resolution that the referendum should be held, or

(b) if the authority is the Greater London Authority, arrange for the authority"

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, government Amendment 129G makes a change to Clause 57. The purpose is to make it clear that the,

"function of passing of a resolution", in this chapter is, in the case of the Greater London Authority, a joint function of the mayor and the Assembly, and that the function is to be discharged in the same way as the Greater London Authority discharges any other functions that are specified as the joint responsibility of the mayor and the Assembly.

Government Amendment 128K removes the requirement for the Greater London Authority to hold a meeting to decide on a resolution to hold a referendum. It reflects the constitutional arrangements of the authority, which does not hold joint meetings of the mayor and the Assembly and will instead enable appropriate arrangements to be made for the mayor and the Assembly to come to a decision about whether to hold a referendum.

Government Amendments 128N and 128P make consequential changes to Clause 49(3), again removing the requirement for the Greater London Authority to hold a meeting. I hope that noble Lords will agree that this clarification is helpful and I urge them to accept these amendments.

In this group we have some amendments from my noble friends Lord Greaves and Lord Rennard. Amendment 128L seeks to make it clear that a resolution to hold a referendum may be taken at the next ordinary meeting of the authority following determination that it is appropriate to hold a referendum. Amendment 128M in consequence removes Clause 49(3), which requires a meeting to discuss a resolution to be held as soon as practicable. These amendments assume that the wording of Clause 49(2) currently requires a meeting to be specifically convened for the purpose of resolving whether to hold a referendum. I can assure noble Lords that that is not our intention. We believe that the inclusion of the word "for" in Clause 49(2) makes it clear that a meeting must not be specifically convened but that the issue may be added to the agenda of any meeting of the full council. I will listen to the debate of my noble friend and then perhaps I can respond to his proposal.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, I have two amendments in the group, Amendments128L and 128M. Amendment 128L says "arrange a meeting", and Amendment 128M says,

"as soon as is reasonably practicable after the determination is made".

Clearly, if it is two and a half months until the next full council meeting of that authority,

"as soon as is reasonably practicable", could be taken to mean that the meeting has to be called more quickly than that. I am perfectly happy to accept the assurances that the Minister has already given. I was just concerned about the cost of these referendums to local authorities. The cost of organising an extra meeting of the full council is not cheap for any authority, especially for a small one where the cost is a larger proportion of its budget. It is not a trivial expense. If the Minister is putting that assurance on the record, then my amendments have achieved their purpose.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

I thank my noble friend for that observation. It is a matter of the precision of the language, and the key phrase is,

"the proper officer of the authority must arrange for a meeting", to be held. Had the phrase been that the proper officer "must arrange a meeting", it would have been clear that a meeting must be specifically arranged. We believe that the wording in the Bill is clear. If it proves not to be the case, we are prepared to reconsider it. However, we believe that the meaning is clear. I would be grateful if my noble friend would withdraw his amendment.

Amendment 128K agreed.

Amendments 128L and 128M not moved.

Amendments 128N and 128P

Moved by Lord Taylor of Holbeach

128N: Clause 49, page 41, line 22, leave out "meeting must be held" and insert "arrangements under subsection (2)(a) or (b) must be such as to enable the decision concerned to be made"

128P: Clause 49, page 41, line 24, leave out "resolves at the meeting" and insert "-

(a) is not the Greater London Authority and resolves at the meeting mentioned in subsection (2)(a) that the referendum should be held, or

(b) is the Greater London Authority and resolves"

Amendments 128N and 128P agreed.

Amendment 128Q not moved.

Clause 49 agreed.

Clause 50 agreed.

Clause 51 : Question to be asked in local referendum

Amendments 128QA and 128R not moved.

Amendment 128S

Moved by Lord Greaves

128S: Clause 51, page 42, line 10, leave out subsections (3) to (5)

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, the amendments in this group need not detain us for long. They have been tabled to probe the appropriateness of the word "misleading" as the criterion a local authority can use to change the wording of a referendum question. It must consult the people who have forward put the petition before doing so, but I am not sure that the word "misleading" covers everything. For example, an authority might want to improve the grammar of a question. As my noble friend Lord Tope said, petitions to councils even for something as important as a referendum are not necessarily written in the most appropriate phrases. If more felicitous wording can be introduced, it may be an improvement, but I am not sure whether that would make the question any more or less misleading. There may be inappropriate words in the question, which the council thinks are slang or rude, but once they are removed the petition remains perfectly valid.

More substantively, a question might be asking for action from the wrong people. It might ask the council to do something which it cannot do, but the council might be able to do other things. I am trying to think of an example. There is a gap in the railway line between Colne and Skipton on the Lancashire-Yorkshire border, and a campaign called SELRAP is working to have it reinstated. Noble Lords might have had communications from the group because it is vigorous in pursuing its case with everybody. I am not sure whether I should declare an interest as a patron of SELRAP since I am talking about it, but I was bullied into it. A petition might ask Pendle or Craven council, or even Lancashire or North Yorkshire county council, to reinstate the railway line. Regrettably, that is not within the power of any of those local authorities. On the other hand, it is within their power to provide funds to SELRAP and to push the process of assessing proposals for the reinstatement of the line further along the road. The GRIP process is a series of steps that all cost money, and the authority could contribute towards it.

A petition might come in asking any of the councils to put in a new railway line, but it would be rejected on the grounds that it had nothing to do with them. On the other hand, the councils could ask for a differently worded petition so that SELRAP could be funded to undertake the next batch of work necessary to get Network Rail, the Government and everyone else to pay attention. Alternatively, it might be a county council matter but the petition is sent to the district council, or vice versa. Those are helpful changes, and I do not think the word "misleading" describes them.

Amendments 128T and 128V were meant to probe the question of holding the referendum on the same day as elections, and whether that is a good or a bad thing. We have discussed this in some detail so it is not necessary to pursue it any further. Amendment 128U looks at how quickly a referendum has to take place once a council determines that it should be held. If it is generally thought that in order to save money and for general convenience, a referendum should be held on the same day as an election, and that election is due within 12 months, the amendment would make it possible, at the discretion of the council, to delay the referendum for up to 12 months rather than only up to the six months provided for in the Bill. In most cases referendums brought forward during the summer and autumn would have to be freestanding and would therefore cost perhaps three times as much. I beg to move.

Photo of Baroness Gould of Potternewton Baroness Gould of Potternewton Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, the amendment proposed is:

"Page 42, line 10, leave out subsections (3) to (5)".

Photo of Lord True Lord True Conservative

I apologise for that, my Lords. I was dazzled by the sun and by my noble friend's arguments. I do not want to speak to all the amendments in the group, although I have quite a bit of sympathy for them. However, Clause 52(3) is far too restrictive, so again I want to be more permissive than my noble friend. I really do not see what business it is of the Government to come in and say that a local referendum is to be delayed until the date of an election or another referendum. If it is an urgent question relating to a matter of concern that might involve a small number of people in a borough, it need not be that expensive. Why cannot the local authority just get on with it and use its own discretion? Clause 52(1), (2) and (5) seems perfectly reasonable, but could my noble friend just leave the rest to the local authority to determine?

Photo of Lord True Lord True Conservative

I noticed that but thought it an extraordinarily strange piece of drafting. It says that you must wait-but need not wait if you do not want to. I do not recognise that sort of drafting. Why not just leave both subsections out?

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

The noble Lord will become very familiar with that sort of drafting in the course of discussions on this Bill and others.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

First, I heard what my noble friend said about the word "misleading" in the Bill and will reflect on whether that might be improved in some way. I hope that he welcomes the general principle that the authority should be able to make sure that the question being put is relevant and accurately reflects the situation, in relationship with the petition organiser. The last thing that one wants is a matter of semantics, where the petition organiser has to go back and get all the names and addresses again. This gives a necessary flexibility. I hope that my noble friend will be able to withdraw that amendment.

My noble friend indicated that he will withdraw Amendments 128T and 128V. Amendment 128U would require the local authority to hold a referendum on the same day as an election or other referendum within the next 12 months. Our provision currently requires that the referendum will be held on the same day as a referendum or election in the next six months. As I have already said, we believe that the provision in Clause 52(3) as drafted is sensible and practical. Councils may not know 12 months in advance whether a poll will be triggered. Generally, local people will want a referendum to be held as soon as practicable. The amendment proposed by my noble friend would tend towards delaying it. We are sympathetic to my noble friend Lord True's general approach of leaving this to the local authorities to manage at their discretion. We do not consider this amendment necessary. If there are good reasons to delay a referendum for more than six months then the council can do so.

I hope that with the assurances I have given, and in particular the agreement to look again at the word "misleading", that my noble friend will feel free to withdraw his amendment.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I am grateful for that and will certainly do so on that assurance. I clearly put these down as probing amendments. On the timing, having listened to the discussion I agree with the noble Lord, Lord True, that it ought to be down to the local authority. If they want to call a referendum immediately, they out to be able to do so. It may well be an issue that will be dead in 12 months anyway. On the other hand, the wording ought not to preclude having the referendum on the same day as the next round of elections, as far as fixed elections are concerned-general elections now appear to be fixed but we will see-so long as they are not more than 12 months away. It may well be that some authorities that do not elect their council every year will not have an election within 12 months. Those that do ought to be able to have it on that day if that is what they think best on the principles set out by the noble Lord, Lord True. I beg leave to withdraw the amendment.

Amendment 128S withdrawn.

Clause 51 agreed.

Clause 52 : Date of referendum

Amendments 128T to 128W not moved.

Clause 52 agreed.

Clause 53 : Publicity for and in relation to local referendum

Amendment 128X

Moved by Lord Greaves

128X: Clause 53, page 43, line 9, leave out subsections (4) and (5)

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, this amendment probes the material about the referendum and the question published by the local authority holding the referendum. Clause 53(4) says:

"Subject to subsection (5), the principal local authority may publish, or arrange for the publication of, material that is designed to encourage support for or opposition to the question to be asked in the referendum", while Clause 53(5) says this applies only to referendums which are,

"held in response to a petition", from the public, "or a request" from a member or members of the authority and that the authority can,

"incur only such expenditure as is reasonable", whatever that may mean.

I am moving this amendment to take out those two subsections as a means of probing how they will work and what they mean. I have also put down Amendments 128Y and 128Z, which say that if the local authority produces material in support and/or opposition to the question, it has to do so in a fair and balanced way. It has to give,

"equal prominence to the arguments", on each side. That mirrors what happens in national referendums, where the Government, or the Electoral Commission on behalf of the Government, publish statements which say, "On the one hand, vote yes; on the other hand, vote no". They put a fair and balanced argument. In this new world of local referendums, it is not clear to me whether local authorities are going to be able to churn out publicity on one side only, or to be strongly in favour of one side and against the other, and whether that is intended or desirable. This is a very important question that needs careful bottoming.

My understanding is that the Electoral Commission has expressed some concern about this and believes that there should be balance, although I was looking for the stuff that I think I have had from it before this debate and I could not find it. I cannot quote exactly what it is saying but it would be interesting to have a definitive view from the Electoral Commission on this matter, certainly before we get to Report. It is fairly obvious that this is an important matter and that there may be different views on it, but our view is that a council ought to be putting out fair and balanced publicity, if it wishes to put out publicity at all. It ought to have the option not to spend any more money than it is already and to keep out of the argument altogether. The Bill suggests that it can because it says:

"the principal local authority may publish, or arrange for the publication of", with the clear implication there that it does not have to if it does not want to.

Particularly where a referendum is tied in heavily with the local political argument and where referendums and local elections get intertwined, as I think will be inevitable, it will be dangerous for local authorities to get involved on one side of an argument. The political party running a local authority may strongly be on one side with the party in opposition, which might be ready to take over if it wins enough seats, on the other. For the local authority to weigh in with public money in those circumstances seems to me to be wrong in principle. I am not saying that people should not campaign; people should campaign, but they should go out and organise their own campaigns.

Amendment 128AA seeks to put some controls on expenditure on this kind of publicity in a referendum on which the local authority spends its own money. It seeks to harden up the word "reasonable" by saying that it has to be approved by a meeting of the council. The meeting of the council that determines that a referendum should take place should also decide whether the local authority spends any money on it and how much; it should set a budget for it, because, in any case, this will be all be money outside the council's agreed budget. I assume that councils will not put contingency sums in their budget in case they have referendums. They will all be hoping that they do not have any, from that point of view. They will not want to put the council tax up or cut other services at budget time in order to put money aside for referendums, so I assume they will not do that and therefore it may well need a supplementary vote by the full council anyway, if it is a full-scale referendum and is costing tens or even hundreds of thousands of pounds. Where is it going to come from? The council will have to decide, so it would be part of that.

I would only put forward Amendment 128AA on the basis that the council was going to be even-handed. The council being able to vote sums of money to one side in a highly politically contentious question is a very dangerous way forward. This is put forward as genuinely probing, to find out what the Government's views are, but it is also a considerable concern that might need a bit more thought before Report.

Photo of Lord True Lord True Conservative

I know that the noble Lord, Lord Beecham, wishes to speak briefly: I, too, will speak briefly. I do not think that this is a matter that we can resolve in this Committee. It is important and perhaps in the period up to Report we may see some guidance and thoughts as to how the Government, the Electoral Commission and others see it developing. There is a difference between a national referendum about an unresolved policy question and certain circumstances of local referendums. The noble Lord, Lord Brooke of Alverthorpe, is no longer in his place; he has rushed out to organise a referendum against the parking-charge policy of his own council. In those circumstances it is surely reasonable for the council to defend its policy against the proposition that is put on the other side, so I do not think that we can be absolutist on this matter. I do not favour the extensive spending of public money, but I hope that my noble friend, as we discuss these things over the next few weeks, will not rule out and disarm councils-elected representatives-from putting their case in referendums.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

My Lords, I echo the concerns of the noble Lord, Lord True. This is difficult territory. The Bill as it stands contains a provision that,

"enables the authority to incur only such expenditure as is reasonable".

The noble Lord, Lord Greaves, has already indicated that it is not at all clear what "reasonable" might be, but I put it another way: if expenditure is unreasonable, then, of course, it can be challenged by the usual audit processes. I think that that is sufficient safeguard in that respect. What is more complicated is the question of equal prominence. Amendment 128AA states that the decision is only to,

"be exercised following a resolution authorising the maximum amount to be spent".

This raises some difficult issues. On the equal-prominence argument, who is to provide the case for the petitioners-for those who are seeking the referendum? It can hardly be suggested that the local authority should provide their case for them. There will be cases in which there is a well resourced, articulate group of people who can produce a substantial case. If, on the other hand, it is a community group, or some organisation which produces a three-line question for a referendum, it may not be able to do that. Is the council then constrained to reply to the three-line referendum with a three-line response? That would not be reasonable. The equal prominence test is very difficult to operate in practice.

I am also somewhat doubtful about the notion of a council specifying a maximum amount to be spent at the beginning of a process. One does not know what form the campaign will take. To go back to my example-although it is not on all fours with this issue because it related to a binding referendum rather than to these, which are not binding-Peel Developments was a well resourced company putting substantial amounts of money into a campaign locally. There may well be a situation where a well resourced commercial interest-for instance, a private residents' group-put a lot of money together to campaign legitimately on an issue. I suggest that the council could not tie its hands in advance by indicating a maximum amount. Flexibility is called for here.

The noble Lord, Lord Greaves, is on a probing expedition. I would like to join him on that expedition, although I am not sure that we will end up in the same place. There needs to be some serious consideration here. While the Electoral Commission's views may be valuable, we again have to bear in mind that these are not binding decisions. It is therefore less important, though not unimportant, to be as precise as on the major constitutional issues on which the commission adjudicates or indeed regarding the electoral process itself, where there are limits to be employed.

Given that referendums can be authority-wide or merely confined to a ward or a smaller area-or, given the right percentages, across the whole of London-it is very difficult to be at all precise about how matters should be couched in financial terms or even about how they should be expressed. Within that area, the case for a referendum on a simplistic notion to reduce council expenditure or abandon a particular project might be advanced in a few short paragraphs, while the arguments against might be complicated. On perhaps an environmental issue or any one of a number of issues, the case against the referendum might be complicated, but the case for it could be presented simplistically. It cannot be right that the council is constrained from putting the full picture to its population.

I do not know quite where we end up with this, but I am not particularly happy with the thrust of some of the noble Lord's amendments. I would not like to see much in the way of constraint on how councils can respond to petitions.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative 6:00 pm, 30th June 2011

My Lords, the debate has shown that this is a complex and sensitive area. We would certainly not want councils to be innocent bystanders when important local issues were being debated. I am grateful to my noble friend for tabling these amendments because at least they give us an opportunity to check whether the words in the Bill reflect what we want out of this process. I suspect that not just the Electoral Commission but the LGA itself will want to reflect on this area. Currently, any publicity published by an authority will have to be in accordance with the code of recommended practice on local authority publicity, which means that it has to be even-handed and responsible. It is necessary for the recommended practice to allow local authorities to put their case in a proper fashion. Generally, authorities are restrained from publishing any publicity material relating to a referendum question on issues such as whether to adopt executive arrangements. The scope of local referendums, however, is such that there is the possibility of questions being put which could have significant impact on communities. We believe that it is right that councils should be able to play a part in the process when the referendum has been triggered by a petition or request. Referendums such as have been proposed by my noble friend unnecessarily restrict the position of local councils.

The arrangements for authorities to control expenditure are already set out in Clause 53, coupled with an authority's wider duty to have regard to the code of recommended practice on local authority publicity. They are adequate to ensure that excessive amounts of public money are not spent on publicity material for referendums. I hope that these explanations and assurances persuade my noble friend that he can withdraw his amendment. This is an area where local authorities are likely to want to satisfy themselves that the arrangements as set out in the Bill meet their need to protect community interests as they see them. With that, I hope that my noble friend will withdraw his amendment.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I am grateful to noble Lords for the discussion. It is an indication of the complexity of the issue that I have agreed with most of the things that most noble Lords have said on all sides; it is in no circumstances straightforward. As I hope I said, I moved the amendment to probe and, in order to probe, I proposed something quite different from what was in the Bill. There are good arguments on both sides. I firmly believe that local authorities, faced with what they might think of as a hostile referendum question, should be able to put their point of view forward and, if it is a complex question, should be able to explain it.

It is quite possible, of course, that the local authority will be in favour of the referendum question, in which case it is not clear why they should spend any money at all. Perhaps they think that the people organising it are incompetent and will not do it very well. Who knows? One can imagine lots of different circumstances.

I am firmly of the countervailing view that local authorities ought not to be able to get involved in promoting referendum campaigns which are effectively being put forward by parties or party-political candidates-or any candidate in local elections-for political purposes. That would be quite wrong and quite contrary to the present code of publicity. It is difficult to see how to draw up regulations which cater for both the extreme circumstances of a hostile referendum which the authority thinks would seriously wreck its strategy and policies in key areas and, on the other hand-

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

Does the noble Lord have a view on whether local authorities should be able to campaign on council tax referendums, which are in a sense political because the policy is effectively decided by elected councillors? Would he support the right of councils to be able to campaign in those?

Photo of Lord Greaves Lord Greaves Liberal Democrat

Yes, I would. Although it is important that local authorities should not get involved in party-political campaigning, the present code of conduct on local authority publicity is too restrictive. Local authorities ought to be able to campaign in a general way more easily and widely than they can at the moment if they believe that what they are campaigning for is in the interests of the people that they serve and represent. However, that is a wider issue. We have the code as it is and I do not think that there is any prospect of it being changed much in the near future. However, it will be very difficult to find satisfactory wording that stops local authorities intervening in elections and political matters, but allows them to defend their well thought-out and agreed policies and strategies against hostile attack. This matter has to be further discussed and considered and the various organisations involved, including the LGA and the Electoral Commission, have to be involved in that. I beg leave to withdraw the amendment.

Amendment 128X withdrawn.

Amendments 128Y to 128AA not moved.

Clause 53 agreed.

Amendment 129 not moved.

Clause 54 : Voting in and conduct of local referendums

Amendments 129A to 129CZA not moved.

Clause 54 agreed.

Clause 55 : Consequences of local referendum

Amendments 129CA to 129E not moved.

Clause 55 agreed.

Clause 56 : Application to parish councils

Debate on whether Clause 56 should stand part of the Bill.

Photo of Earl Cathcart Earl Cathcart Conservative

My Lords, on Tuesday, when we discussed whether 5 per cent was the appropriate figure to call referendums, I went through all the levels of local government right down to the parish level. I was rather crestfallen when my noble friend Lord Taylor dismissed my arguments by saying,

"I should emphasise that the Bill's provisions in this area do not provide for referendums relating to parish councils, which are not part of the Bill. We will have an opportunity later to discuss parish councils".-[Hansard, 28/6/11; col. 1744.]

With hindsight, I may have got rather ahead of myself on Tuesday. Therefore, I welcome the opportunity to discuss parish councils now. I will not repeat the remarks that I made on Tuesday, but will the Minister take into account what I said then when the Government consider this clause? Five per cent of electors in my noble friend's parish in Holbeach might seem all right, but that is not appropriate in a parish with only 200 electors, which means that only 10 people would be required to call a referendum-that is far too low. In my parish in Norfolk, with only 50-odd electors, the 5 per cent figure would mean that three people could call a referendum. Perhaps different percentages could be applied according to size. If 5 per cent is appropriate for Holbeach, perhaps 20 per cent for a parish with only 200 electors-that is, 40 people-might be the right figure.

I presume that when this clause refers to parish councils, that includes parish meetings. Will the Minister please confirm this?

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, the purpose of this stand part debate and of Amendment 129F is to have an exploratory discussion to probe the Government about their intentions with regard to parishes. Is what is in the Bill to be taken at face value in that the Government realise that they have to think about how referendums will interact with parish and town councils, and inevitably therefore consider the relationship between the existing legislation for parish polls and the new provisions for referendums which are altogether more complex and involved?

The provisions for parish polls are really very simple. A very small number of people can turn up to a parish meeting-what used to be called the ratepayers' meeting when people paid rates-and requisition a parish poll. The parish poll is a referendum of all the local government electors in the parish, but it is often on a fairly small scale. Sometimes it is not. Sometimes it is run as a normal election, with all the polling stations open, except that the polling hours are from 4 pm to, I think, 9 pm-the noble Earl, Lord Lytton, will correct me if that is wrong-so there are restricted polling hours.

Photo of Lord Greaves Lord Greaves Liberal Democrat

It is something like that. I do not think that it was extended to 10 pm; it might be only until 8 pm; I am not sure.

In my experience of parish polls, there is sometimes agreement between the council concerned and the district council or borough council, which has to organise the polls from its normal election process, not to have all the polling stations open. I am aware of a smallish town which has six or seven polling stations. They have a parish poll and they opened only one of the polling stations in the town centre on the grounds that it did not cost them as much. That flexibility is available, and it is an altogether simpler process. Of course, it is open to abuse because of the small number of people who can requisition a parish poll. Even if the Government are keeping provision for parish polls, I would think that, as part of the review, they will consider how the referendum provisions will impact on parishes.

There are now a lot more much bigger parishes than there ever used to be. A lot of places which, before 1974, were urban districts or small boroughs, have now become town councils. If you have an electorate of 18,000 or 22,000, or even more, having 10 people able to turn up at a parish meeting and only a small number of those being able to requisition a poll is nonsense. The parish poll provision is there for small, rural parishes, and the world is, in many places, not like that any more.

Have the Government any firm plans for what they will do or is it all provision in case they want to do something in the future? If they have firm plans, can they tell us what they will be before Report? The Bill's provision about possible central government funding for referendums in parishes, organised by parish councils, is interesting, but I cannot believe that it is serious. It would leave it open to organise referendums in parishes on a large scale without any financial implication locally. The more that we discuss this in Committee, the more I come to the view that the number of referendums which will take place is probably a great deal less than some of us feared when we started looking at this, simply because of the financial problems.

We saw in the AV referendum that the no campaign campaigned heavily on the cost of the referendum itself-as though that was a logical reason to vote no, although the spending was already taking place. That was a very effective way of campaigning, and I am coming to the view that local referendums will meet a huge amount of opposition simply on the basis of cost. When people go around trying to organise them, once the cost and the implications for the council budget are revealed, a lot of them will not go ahead.

That is just musing about the future. The more that the Government can tell us about their proposals for parishes now, the better. I make it absolutely clear that I am in no circumstances trying to abolish parish polls. I am probing the Government's intentions.

Photo of The Earl of Lytton The Earl of Lytton Crossbench

My Lords, I welcome the amendment in so far as it opens up an opportunity to make a contribution on this point. I fundamentally support the Bill's provisions to provide for the Secretary of State to make specific provision for parish council referendums. There are many reasons for that, of which I am sure the noble Lord, Lord Greaves, will be aware. I am sorry that I cannot elaborate on the question of the times of day and the hours when certain things relating to parish polls might take place. I am afraid that I am only the humble president of the National Association of Local Councils and not a fully paid-up clerk of one of the more go-getting parish councils. Noble Lords will have to suffer second best on this occasion.

As I said on Second Reading, parish councils are not a homogenous institution. They are so highly variable in size and many other ways that it is difficult to think of a standardised approach. I suspect that this is very much work in progress in terms of discussions going on with the department on how to deal with this rather difficult issue because of the problem of trying to make one size fit all. Not only are there differences in size of electorate but their budgets, capacity, degree of training and even their expertise differ widely, even within a particular size category.

My purpose was to flag up some of the things that the Secretary of State might need to consider. As I say, I am aware of ongoing discussions and I certainly do not want to be in any way prescriptive. In the parish council, being the smallest unit of local government, there must be a proper balance between engagement with representative democracy and the referendum facility. That is likely to be exacerbated in future because, as localism brings an involvement by parish councils with a larger range of things that may have been dealt with traditionally by principal authorities, the opportunities for things to be called into question will inevitably increase. We must have robust systems to guard against that. It is also the case that that can add to the risks of people wanting to reach for the referendum solution. It is beginning to look like a question of how many bites of this not very large cherry in some places is to be provided for the public.

I will not labour the point about the engagement with the democratic and representative function of parish councils. The burdens of referendums on parish councils are by and large disproportionately high. I mentioned that in a previous Committee sitting and gave an example. Currently, the trigger for a parish poll under paragraph 18 of Schedule 12 to the Local Government Act 1972 is by common consent too low. But that is no argument for removing it altogether. I was very pleased to hear the noble Lord, Lord Greaves, say that that was not his intention. I look forward to something better than that provision in the Local Government Act coming forward at a later stage, but I do not know whether discussions will have proceeded that far ahead. There is a need to prevent the parish being hijacked by the referendum provision. To that end triggers must be in some way relevant to the issue and possibly to the parish size. I cannot go further than that because we are dealing with tiny parish councils on the one hand and some very large town councils on the other, some of which have budgets that would exceed principal authority sizes.

There has to be a genuine local interest. I was very pleased when, some time ago, one of the smaller political movements tried to hijack the process for national political aims. I seem to recall it was something to do with the European Union and it was ruled out of order. Quite right too, because what should a small parish be doing with something concerning the European Union? Small parishes in particular are vulnerable, if we are not careful, to these sorts of pressures.

In addition, there needs to be protection for referendums cutting across other issues that have to be dealt with-the other powers and functions. I mentioned this earlier in connection with principal authorities. The same thing needs to be built in; not necessarily on exactly the same model, but in essence something similar. There needs to be a cost benefit out of all this, not for it to be completely disproportionate in the manner that I explained when I addressed this issue at our last Committee sitting.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, this is an important area. The Bill that addresses localism must indeed address the issue of parish councils, the most local form of government. In providing for referendums in this Bill, the Government have said that they will be consulting about the way they take place. I am grateful for the contribution of the noble Earl, Lord Lytton; and perhaps I can make amends to my noble friend Lord Cathcart for my dismissive ways with his previous contributions on this subject.

I value the contributions made by both noble Earls because I consider parish councils to be important. My noble friend Lord Greaves has an amendment in this group, Amendment 129F, which we can consider at the same time. It relates to parishes where electors have long enjoyed the power to demand a local referendum or parish poll under the Local Government Act 1972. It removes the power of local government electors to demand a parish poll. However, as my noble friend says, he has no intention of anticipating that this amendment might achieve that objective until replacement facilities are in place.

We know that a poll must be organised if the chairman consents, or if it is demanded by 10 or one-third of the electors present at the meeting, whichever is the lesser figure. So the triggers for parish polls can be quite small. None the less, I understand the concerns expressed about the varying size of parishes and this is a matter that will be considered by the review that the Secretary of State has put in train. This, along with whether parish provisions apply to parish meetings as well as parish councils, are all part and parcel of the mix. We will see if there is pressure to bring this in and if it is possible within the review that the Bill provides.

I agree that the current parish poll rules need reform, but accepting the amendment moved by the noble Lord, Lord Greaves, would remove the provisions without replacing them with anything. We want to see a modernised and proportionate referendum regime for the parish sector and we propose to create this with regulations under Clause 56, which empowers the Secretary of State to apply the scheme to parish councils with such modifications as may be necessary. The effect of the clause would be to allow the replacement of the existing archaic parish poll regime with a modernised local referendum regime tailored to the particular circumstances of parish councils. While we seek to retain this important element of direct democracy that has been enjoyed for years by voters in parish areas, we want to modernise the existing regime and make it fit for purpose in the modern world.

Before making any regulations, we will consult widely on the reforms that people want to see. We will consult on whether all or some of the referendum provisions in the Bill should apply and on whether the ability of electors to demand a poll at a parish meeting should be retained; and, if it is, on what the threshold should be. Decisions on the appropriate modernised regime for parishes will be taken following the consultation, and subsequent regulations will be subject to affirmative resolution, giving noble Lords the opportunity to ensure that the replacement regime is better than the existing provisions. I hope that the assurances I have given will allow noble Lords to accept that Clause 56 should form part of the Bill.

Clause 56 agreed.

Amendment 129F not moved.

Clause 57 : Discharge of functions

Amendment 129G

Moved by Lord Taylor of Holbeach

129G: Clause 57, page 45, line 1, leave out from "Authority," to "by" in line 2 and insert "a function of passing a resolution under this Chapter is to be exercisable (in accordance with this Chapter)"

Amendment 129G agreed.

Clause 57, as amended, agreed.

Clause 58 : Interpretation

Amendment 129H not moved.

Amendment 129J

Moved by Lord Taylor of Holbeach

129J: Clause 58, page 45, line 40, at end insert-

""special-case petition" has the meaning given by section (Petitions: special cases in which holding of referendum is discretionary)."

Amendment 129J agreed.

Amendments 129K and 129L not moved.

Clause 58, as amended, agreed.

Clause 59 : Referendums relating to council tax increases

Debate on whether Clause 59 should stand part of the Bill.

M

Lord Taylor: "The Bill that addresses localism must indeed address the issue of parish councils, the most local form of government."

The following refers and connects to relevant recommendations and expert opinions.

Localism Bill Part 4 — Community empowerment Chapter 1 — Local referendums Clause 53 Application to parish councils

http://iniref.wordpress.com/letter-to-communities-ministry-r...

Submitted by Michael James Macpherson

Photo of Lord Shipley Lord Shipley Liberal Democrat 6:30 pm, 30th June 2011

My Lords, I will speak to this clause on behalf of the noble Lord, Lord Tope, and will address some of the principles that stand behind it. In practice, the clause continues a capping regime. Councils will not want to risk losing a referendum because there will be a significant rebilling cost. Clause 59, and Schedules 5 and 6, create a duty for a billing authority to determine, in line with principles set out by the Secretary of State, whether a proposed council tax increase is excessive. Authorities will be required to hold a local referendum on the proposed rise if it is deemed to be excessive.

The difficulty is that it should be for local people to determine whether they find a proposed council tax increase excessive rather than for the Secretary of State to decide what constitutes excessive. Local people should trigger the referendum, not the Secretary of State. Therefore, there is a strong case for saying that amendments to the Bill should be introduced that would limit the Secretary of State's power to determine what constitutes an excessive rate of council tax and would give that power instead to local people under proposals elsewhere in the Bill for holding local referendums so that they can decide what constitutes an excessive rate of council tax.

Secondly, councils, rather than the Secretary of State, ought to be able to decide when a referendum will be held and to decide the arrangements for it. We should also delete powers for the Secretary of State to make non-specific regulations on matters such as the question to be asked in the referendum, the allowable publicity accompanying that referendum and how votes are to be counted. We have already discussed the percentage levels required to trigger a referendum and it seems to me that this is an example of where we do not need to have the Secretary of State interfering with what local people could perfectly well handle for themselves.

There are two issues that I feel concerned about and I have raised them at previous stages of the Bill. When a billing authority is determining whether a council tax proposal is excessive it might be appropriate for a referendum to be held on whether the council tax level and increase proposed is deemed by some to be too small. True localism should mean that local people have the right to hold a referendum on whether the council tax might be raised higher than the level that the Secretary of State deems to be excessive. I do not propose that one should have a higher rate-simply that if you really want to implement localism it should lie within the power of local people to make that decision.

There is a further complication to this. Under the Bill, referendums can be held within electoral areas within a council area. It is inevitable that referendums will be held on issues that might require additional expenditure to be made within that area. It might be unreasonable to expect the whole of the council area to fund the additional increase. The increase could be for a specific local facility that might otherwise close down, such as a swimming pool that people would like to preserve that requires additional cash. At the moment parish councils have certain powers to raise additional money. We could see referendums being held to save local facilities such as the swimming pool where local people might be willing to pay for the facility and would wish a referendum to be held on generating the necessary resource.

This seems to strike at the very heart of localism. Ultimately, if we permit referendums to be held within one or more electoral areas of a council, logically those people should be allowed, as those who have a parish council are allowed, to vote to spend additional money. I speak from my perspective as a member of Newcastle City Council. Half of my ward has a parish council, which has the power to raise additional money, and the other half does not and is not able to raise additional money. That is a complication that will become very important.

The broader issue in terms of Clause 59 is whether it is for the Secretary of State to decide to hold a referendum or whether it is for local people to use the facilities that exist to generate that referendum.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, we should thank the noble Lord, Lord Shipley, for introducing this clause stand part debate and for his very clear exposition of localism and what it means in terms of council tax. I agree with him that the provisions in the Bill amount to a capping regime. I am sure the Government will argue that local people do determine what is excessive if they support a referendum. That is a very narrow interpretation of the Bill. This is capping by another name.

We also have to acknowledge that successive Governments have reserved the right to limit increases in domestic taxation when they have been judged to be excessive. We certainly did as a Government, and I believe that the Conservative Government did. I am not sure whether the noble Lord, Lord Jenkin, is culpable as well. There are arguments about whether that is important for the overall management of the economy.

When the noble Lord, Lord Greaves, introduced his first amendment in our proceedings, he talked about localism being decisions being taken at the lowest possible level, but he acknowledged that there is a wider dimension that has to be taken into account in some instances. The impact assessment for the Bill-

Photo of Lord Greaves Lord Greaves Liberal Democrat

I think I said "underpinning a minimum level of service". I certainly would not apply it to council tax.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

Indeed. I was not suggesting that the noble Lord would have judged council tax to be one of those things, but I think there is an argument that it is. The impact assessment reminds us that some 36 authorities have been capped under legislation that this Bill will replace-I think that is since the power was first used in 2004-05-and 16 of those were subject to in-year designation and had to redo their calculations. Indeed, the architecture of the Secretary of State setting principles with the opportunity to look at different categories of authorities has been imported from the existing capping regime.

We feel constrained in denying the Government powers which effectively amount to capping powers and their right to influence levels of taxation in the broader interests of the management of the economy, anti-poverty strategies, et cetera because the reality is that each year the Secretary of State will set the benchmark for council tax increases and it is probably right that few councils will run the gauntlet of a referendum, given the costs and consequences of an adverse outcome. The impact assessment estimates the cost of a council tax referendum to be between £85,000 and £300,000. Should a referendum not be successful, the administrative consequences could be convoluted, with year-end refunds or credits against future liabilities and the possibility for people to ask for an in-year refund, so the systems and costs involved in those choices could be significant.

We are coming on to discuss the powers that the Secretary of State has taken for himself in framing how the referendum question is to be put and the constraints around expenditure. According to the impact assessment, the authority will not be able to campaign for its proposed council tax level. Given the debate we have just had about the authority's role in referendums, perhaps the Minister will confirm that an authority cannot campaign for the council tax increase that it thinks is appropriate. Of course, we might expect the cards to be stacked against those proposing the increase. Councils are facing unprecedented dilemmas at present with budgets severely constrained and with front-end loading because the coalition Government's approach to the deficit is to cut too far and too fast. The system will have to cope with the challenges of the localisation of non-domestic rates. If this is to happen, will not local councils be forced to look to that as a source of extra income before running the risks of referendums that would increase council tax? I am not sure that that would be good news for the business community, but perhaps the Minister will tell us-I know these things are embryonic at the moment-whether there will be equivalent capping-type regimes for a localised, non-domestic rate and, if not, what the likely impact of having these effective capping powers on council tax increases might be for the NNDR.

One of the other issues that arise from this in making an assessment about whether council tax levels are fair is how council tax rebate is going to work in the future. The Government are localising council tax rebate. Not only are they cutting 10 per cent off it in aggregate, but it seems as if it is going to be left to local authorities to make individual judgments about the scheme that they want to introduce and maintain. That runs contrary to giving powers to government to manage these things centrally, and is an added complication.

For the present, we will focus our efforts on trying to improve the provisions in the Bill rather than to do away with them, but we are mindful of the strong localist argument for not having these powers at all.

Photo of Earl Attlee Earl Attlee Lords Spokesperson (Department for Transport), Lord in Waiting (HM Household) (Whip) 6:45 pm, 30th June 2011

My Lords, I am grateful to my noble friend Lord Shipley for giving me the opportunity to promote the principle of council tax referendums. We have several interesting amendments to debate later on, including some government ones.

Clause 59 gives effect to Schedule 5, which inserts a new Chapter 4ZA into the Local Government Finance Act 1992. This enables local electors to approve or veto excessive council tax increases in a referendum. It also gives effect to Schedule 6, which removes the Secretary of State's powers to cap council tax in England and makes consequential amendments to various Acts as a result of the provisions for council tax referendums. The clause will ensure that excessive council tax increases occur only where they have a clear mandate from local people. This is in contrast to capping, where Ministers take the decisions and local people have no say at all. It will strengthen local democracy and ensure councils are more accountable to their electorates, but it will allow the electorate to vote for increased expenditure if they want it.

A set of principles defined by the Secretary of State will be used by authorities to determine whether their council tax increases are excessive. These principles must be submitted in a report to the House of Commons for its approval. A comparison of basic amounts of council tax could be the only principle, but the Secretary of State can include other principles as he sees fit. It is necessary for the excessiveness principles to be determined by the Secretary of State with the approval of the House of Commons.

The noble Lord, Lord McKenzie, touched upon the wider economic issues of council tax expenditure. It would be impractical and excessive to require a referendum for every single council tax increase. The flexibility allows for different sets of principles for different categories of local authorities. For example, principles relating specifically to town and parish councils could ensure that the great majority of councils-indeed, all but large, high-spending parish councils-would not be required to hold referendums. The report for the House of Commons must be laid before the date on which the local government finance report for the year is approved. Authorities will therefore know, when setting their council tax, whether or not they have exceeded the principles, so they will go into this process with their eyes open.

Where an authority determines that its council tax is excessive, it will normally hold a referendum no later than the first Thursday in May-the usual date of local elections. However, the Secretary of State can specify a different date by order, such as to allow the referendum to be held on the same day as local government elections if this date is not the first Thursday in May. Entitlement to vote in the referendum is based on the register of local government electors and entitlement to vote in local government elections for a particular area.

Where an authority sets an excessive council tax increase, it must also make substitute calculations to determine a basic amount of council tax which does not exceed the excessiveness principles. The substitute calculations would take effect in the event that the authority's increase is rejected in a referendum or the authority fails to hold a referendum by the required date. The Secretary of State may make regulations concerning the conduct of referendums, which would include such matters as the wording of the question to be asked in the referendum, the publicity to be given and expenditure limits. There are obvious reasons why this may be necessary.

The noble Lord, Lord McKenzie, asked whether authorities can campaign for the proposed increase in council tax. No, it is intended that they cannot. They must put the facts to the electorate and leave them to decide but individual councillors will be free to campaign.

The Secretary of State will have the power to direct that the council tax referendum provisions should not apply. The power could be exercised only where it appears to the Secretary of State that unless the authority is allowed to increase its tax excessively, the authority will be unable to discharge its functions in an effective manner or be unable to meet its financial obligations. This is a reserve power and the expectation is that this would be used only in exceptional circumstances, such as where the High Court has exercised its powers to appoint a receiver where an authority has failed to service its debt within a set time period.

This clause is long and detailed but it is not as complicated as capping legislation, which has such concepts as budget requirement, designation, nomination, designation after nomination and vice versa, notional budget capping as well as actual capping and so on. And I have not got the foggiest clue what that is about. It replaces all that with a simple concept; namely, that local people and not Ministers should take the decision to approve or veto excessive council tax increases.

Sadly, council tax has more than doubled since 1997. If councils want to set excessive council tax increases-that is, those that exceed the norm-in future they will have to prove their case to the electorate. I urge that Clause 59 should stand part of the Bill.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

I touched on non-domestic rates and localisation, and how that regime would sit alongside the regime proposed in the Bill. In particular, I should like to know whether there would be equivalent capping powers on the business rate because that has ramifications for council tax levels as well.

Photo of Earl Attlee Earl Attlee Lords Spokesperson (Department for Transport), Lord in Waiting (HM Household) (Whip)

My Lords, that is a weensy bit technical for me. Some amendments deal with non-domestic rates. If the noble Lord's point does not get covered, I will of course write to him.

Photo of Lord Greaves Lord Greaves Liberal Democrat

The Minister mentioned parish and town councils. I think he said that only a small number would be caught by the referendum provisions and that there would be those which are very large and would have large levels of spending. He is nodding so I remember correctly. What sort of scale does he expect this to be? Would it be three or four, half a dozen, or 30 or 40? The Government must have some idea.

Photo of Earl Attlee Earl Attlee Lords Spokesperson (Department for Transport), Lord in Waiting (HM Household) (Whip)

My Lords, the noble Lord has asked an important question. There will be provisions to ensure that small parish councils do not get caught by these provisions. They will be for only the larger authorities. I am sure that we will either get to a suitable amendment or I can write to the noble Lord and other members of the Committee with full details of how that important issue is addressed.

Clause 59 agreed.

House resumed.

House adjourned at 6.55 pm.