Cities and Local Government Devolution Bill [HL] — Report (2nd Day)

– in the House of Lords at 4:30 pm on 15th July 2015.

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Relevant documents: 1st, 2nd and 3rd Reports from the Delegated Powers Committee

Amendment 34A

Moved by Lord McKenzie of Luton

34A: After Clause 7, insert the following new Clause—

“Audit committees

(1) A combined authority must arrange for the appointment of an audit committee to—

(a) scrutinise the authority’s financial affairs;

(b) review and assess the authority’s risk management, internal control and corporate governance arrangements; and

(c) review and assess the economy, efficiency and effectiveness with which resources have been used in discharging the authority’s functions.

(2) The audit committee must have an independent chair.”

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

My Lords, I shall also speak to our other amendments in this group. A strong and adequately resourced scrutiny process is an essential ingredient in the process of devolving substantial powers to combined authorities—and, it might be thought, especially to mayoral combined authorities. The sheer quantity of amendments in this group reflects the importance that all noble Lords, including the Government, have given this issue.

Our Amendments 35 and 37 ensure that the scrutiny committees can enquire into and challenge not only actual decisions—for example, by call-in procedures—but matters under consideration prospectively, rather than just retrospectively.

Amendment 43 requires that guidance by the Secretary of State on the functions of overview and scrutiny committees should be affirmed by the affirmative procedure, in the light of the crucial role that such committees should play.

The Bill lacks an adequate procedure comparable to that of the audit committees found in local government. Amendment 36 seeks to remedy this deficiency, but we felt on reflection that it does not quite meet the case, since it delegates to the overview and scrutiny committee the task of appointing another committee, independently chaired, to carry out that audit function. Our Amendment 34A seeks to remedy the position by explicitly requiring the appointment of a separate audit committee, again independently chaired, with the responsibility for reviewing and scrutinising the authority’s financial management and affairs in the same terms as Amendment 36. Given the potentially large expenditure of the combined authorities if the promise of devolution is to be realised, this is an important role and one that is distinct from the general overview and scrutiny process.

Although they have yet to be moved, we support the Lib Dem amendments concerning political balance and the chairing of the scrutiny committee, but have some concerns about possible delays of call-in powers, which could necessitate another round of consultation.

We will listen with interest to the government amendments, particularly to Amendment 41, which requires the approach to reconsideration powers to need the consent of the combined authority. This would appear unduly restrictive. We are not quite sure why it is proposed to have an alternative to an independent chair of scrutiny, but in any event can live with what is proposed. I understand that we are not able to hear from the noble Lord, Lord Kerslake, today on his very substantial amendment about governance, which we felt was very important. As proposed, however, some of the voting thresholds may be problematic, especially the requirement for unanimity at the first meeting of the overview and scrutiny committee.

Overall, however, these amendments highlight the importance that we should place on getting oversight right in circumstances where considerable power is rightly being placed with a combined authority and possibly a mayor. This should also address in part—although, doubtless, not comprehensively enough—those who have expressed fears about a single-party state. I beg to move.

Photo of Lord Shipley Lord Shipley Liberal Democrat Lords Spokesperson (Communities, Decentralisation and the Northern Powerhouse)

My Lords, we have a number of amendments in this group. During the debates on this Bill, we have tried from these Benches to emphasise the importance of legitimacy and accountability in this new tier of government. By legitimacy, I mean, first, a direct connection with the ballot box in the new structure and, secondly, the prevention of one-party states in which the same political party has control of the post of elected mayor, the nominated combined authority and the nominated overview and scrutiny committee. In Committee, we proposed direct election to the combined authorities, so that the mayor was not the only elected post, but this did not find favour. Now we have a group of amendments that concerns overview and scrutiny committees, which are very important—more important than they might have been, had some of the amendments that we debated in Committee been agreed.

I am pleased that, following our debate in Committee, further, more detailed proposals have come forward from the Government. Some are welcome but some do not go far enough. Let me explain what I hope the Government will do. Our amendments would require the chair of an overview and scrutiny committee to be from a different political party from the mayor; that assumes that the mayor is a member of a political party. If that is not the case, the chair could be from any political party. An independent chair could work—we said that previously—but it would be better to have an opposition councillor who has been duly elected to their post as a councillor from within the combined authority area, not least because if one appoints an independent person it immediately raises the question of who appoints that independent person. To put it another way: how is independence guaranteed? The make-up of the overview and scrutiny committee also needs to reflect the number of seats held by each party in those local authorities making up the combined authority. Later, we have proposals on the electoral system that should be used so that the first past the post system does not encourage the development of a one-party state.

Our other amendments would also allow the committee to call in decisions made by the mayor and delay them—not for long—to allow further consideration when it is felt to be necessary. To do its job properly, an overview and scrutiny committee needs the power to call for information and to receive it. It will not be enough if the overview and scrutiny committees exist but are then prevented doing their job by a combined authority that prefers to keep things out of public scrutiny.

Amendments 35 and 37, which we support, would enable the overview and scrutiny committee to examine decisions before they are taken, rather than wait for a decision to be made; that is welcome. Amendment 34A, which I signed up to, would create an audit committee with an independent chair. I welcome that proposal as well. It is essential in this case that the chair is independent and appropriately qualified to do the job. In practice, it should cover the functions of a public accounts committee, an efficiency committee and a risk committee. This matters because the savings that could be achieved by public service reform and reducing duplication at a local level have been well established, but we now need to ensure that it all happens. The audit committee would be of significant help in delivering that objective.

The noble Lord, Lord McKenzie, made mention of Amendment 41, and I will do likewise, with two questions for the Minister on that amendment. First, proposed new sub-paragraph (4A) states:

“An overview and scrutiny committee must publish details of how it proposes to exercise its powers in relation to the review and scrutiny of decisions made but not yet implemented”.

If the implementation period is very short, what power would an overview and scrutiny committee have under this measure to hold up a decision for further consideration? Secondly, and this is the point that the noble Lord, Lord McKenzie, raised when talking about proposed new sub-paragraph (4B), what is the objective in requiring an overview and scrutiny committee to,

“obtain the consent of the combined authority to the proposals and arrangements”?

I can see that there could be a situation in which the overview and scrutiny committee misses something, which would need to be put right by the combined authority. However, I certainly hope that this measure would not be used by members of a combined authority who do not wish to see the overview and scrutiny function work effectively. I look forward to hearing the Minister’s comments on that.

Finally, all our proposed amendments have a common purpose in wanting to ensure proper accountability for the devolution that is about to occur. I hope the Minister will agree that they should be included in the Bill.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, all these amendments are about overview and scrutiny and the accountability of combined authorities. Making overview and scrutiny as strong and effective as possible is a priority for us. I was pleased in Committee by how clear it was that this is a shared priority across this House. The government amendments reflect the discussions I had with noble Lords from across the House, and I am grateful to them all for the expertise and experience that they brought to the discussions. Effective scrutiny not only ensures better decision-taking by those exercising new devolved powers but can be the safeguard against one-party states developing, and so prevent the loss of public confidence in the process of devolution.

Before discussing the various substantive issues on overview and scrutiny that have been raised, I turn first to government Amendment 81, which provides that any orders made under the powers in the new Schedule 5A to the 2009 Act will be subject to the affirmative parliamentary procedure, rather than negative. The Delegated Powers and Regulatory Reform Committee recommended this, and we accept the recommendation.

Before turning to the detail of scrutiny arrangements, I shall address Amendment 34A, which would require the combined authority to appoint an audit committee and for that audit committee to have an independent chair. In the case of local authorities, and indeed in the case of such existing combined authorities as the Greater Manchester Combined Authority, the audit committee is appointed by the authority. Audit committees usually comprise senior non-executive members of the authority and, where this is the local choice, may also include one or more independent members. We recognise the importance of audit committees. The role of that committee in any authority includes supporting the authority’s chief financial officer, the Section 151 officer. It is an integral part of the financial controls and internal checks of the organisation.

Without this amendment, the approach would be to allow combined authorities to appoint, as they see fit, audit committees drawn from the membership of the authority and, where they consider appropriate, include independent members. I am sure that none of us wants unnecessary prescription. However, I can see the case for a combined authority, given its particular structure, which may or may not include a mayor, to be required to have an audit committee appointed by the authority. I can also see the case that it might be appropriate for such a committee to have one or more independent members. I am not persuaded that it would be right to prescribe in every circumstance that the chair of the committee should be an independent member. Accordingly, I am prepared to consider the issue further for Third Reading, have discussions with noble Lords and, if appropriate, return with an amendment on this at Third Reading.

I will return at the end to questions asked by noble Lords. Turning now to the substantive issues, I first address the question of call-in. Government Amendments 38, 41 and 49 and Amendments 39 and 40 relate to this. The government amendments aim to strengthen the power of call-in for overview and scrutiny committees of combined authorities. With these amendments, combined authorities and their overview and scrutiny committees will be able to set up and operate effective and proportionate call-in arrangements. These come into play when there is a real need, but equally they cannot become a mechanism for delaying or for impeding the efficient conduct of business. Crucially, the call-in arrangements in any authority will be a local matter for the authority and its scrutiny committees to decide and agree.

Amendment 38 gives a strong foundation for call-in by providing that the overview and scrutiny committee has the power to direct the combined authority not to implement a decision called in while it is under review.

Amendment 41 provides that the overview and scrutiny committee must publish the arrangements of all procedures for call-in that it has agreed with the combined authority. This approach in handling the arrangements developed and agreed locally means that there can be a genuine local ownership of the call-in arrangements so that these become part of the local culture of effective scrutiny.

Amendment 49—this might assist the noble Lord, Lord Shipley—allows the Secretary of State to make provision about the length of time for which a decision can be called in. This is to provide a safeguard so that, whatever the local agreed arrangements are, call-in cannot be either for too short a period to be effective or so long that it delays the implementation of decisions for an unnecessarily long time.

Amendments 39 and 40, tabled by the noble Lord, Lord Shipley, and the noble Baroness, Lady Pinnock, would give the overview and scrutiny committee the power to call in a decision and require a delay in implementation for further public consultation to be carried out. I do not believe we can go along with this step. I do not think a delay in implementation should be contingent on public consultation. I think the noble Lord, Lord McKenzie, also alluded to his concerns on this aspect.

The next substantive aspect of overview and scrutiny that I would like to address is that of the powers and operation of scrutiny. The Government are committed to ensuring strong and effective scrutiny in combined authorities. Accordingly, we intend to make an order under paragraph 3(2)(g) of new Schedule 5A which would ensure that, like members of overview and scrutiny committees of a council operating executive arrangements, the members of the scrutiny committee for the combined authority will have access to documents containing exempt or confidential information that relates to a decision it is reviewing.

Amendments 44 to 48, 50 and 55 are also focused on enhancing the information requirements for overview and scrutiny committees, but I do not believe they are necessary or appropriate. Amendment 44 would allow the power to be given to an overview and scrutiny committee by order to compel other bodies to provide information. This is unnecessary because the power in paragraph 3(2)(g) already allows the Secretary of State to include in an order details of information that must be disclosed by “other persons”. In addition, giving a blanket power to the overview and scrutiny committee to do this risks creating undue additional burdens on businesses and public authorities.

Amendment 45 would amend paragraph 3(2)(f) of new Schedule 5A so that the Secretary of State must, when making an order about the publication of reports or recommendations of an overview and scrutiny committee, or of the responses by the combined authority, require the overview and scrutiny committee to publish these.

Amendment 55 would remove the provision which allows the Government to provide for exempt or confidential information to be removed from reports, recommendations or responses when they are published.

Amendments 46, 47, 48 and 50 would amend paragraph 3(2)(g), which allows provision to be made in secondary legislation about information which must, or must not, be disclosed to an overview and scrutiny committee by the authority or by other persons. The amendments would require any order under this paragraph to require a local authority in all cases to disclose information to a scrutiny committee.

The Bill provides that the Secretary of State may make provision in secondary legislation for the publication of reports et cetera and for information to be disclosed to an overview and scrutiny committee. It is sensible that the principles of exempt and confidential information continue to apply. These principles require an authority to protect confidential information, such as information prohibited from being disclosed by a court order. The principles also protect exempt information—for example, information about the investigation of a crime—unless it is in the public interest to disclose it. Rather than encouraging the openness which they seem to intend, the amendments could produce the opposite effect and inhibit the overview and scrutiny committee in its work. Where authorities and scrutiny committees are forced to publish all reports in full, they may feel unable to write on sensitive matters which should rightly be considered.

Opposition Amendments 35 and 37 would widen the scope of scrutiny so that a committee may review decisions under consideration. In strict terms, while a decision is under consideration, there is nothing to review. However, I understand and indeed support the wish for overview and scrutiny committees not only to be involved after the event but to play a role in earlier stages of shaping policy. The Bill satisfies this by allowing the scrutiny committee to make reports and recommendations proactively about anything that affects the authority’s area or its inhabitants, as provided for in paragraphs 1(2)(c) and 1(3)(c) of new Schedule 5A. Hence, Amendments 35 and 37 are not necessary.

I turn to amendments relating to the membership of overview and scrutiny committees and who should be their chair. On membership, government Amendments 42, 51 and 56 make provision further to guarantee the independence and appropriate balance of the membership of all overview and scrutiny committees of all combined authorities.

Amendment 51 provides that the majority of members of an overview and scrutiny committee must be members of the constituent councils of the combined authority area. In practice, nearly all members will be from constituent councils, but there may of course be independent members—as I will touch on in relation to the chair—or members in different roles as decided locally. Overview and scrutiny committees will have the power to co-opt non-voting members as they see fit.

As to the political balance of an overview and scrutiny committee, the Government are committed to ensuring in every case an appropriate political balance. Accordingly, the Government’s firm intention is to provide by order under paragraph 3(2)(a) of new Schedule 5A that the political balance of any overview and scrutiny committee must align with the political balance of the elected members of the constituent councils, a matter which we discussed the other day. As a consequence, government Amendment 42 removes paragraph 2(4)(b), thereby removing the requirement for the committee to be politically balanced in relation to the combined authority membership. This amendment is vital to ensuring that we avoid everywhere the one-party state that noble Lords have mentioned in debates and achieve a truly politically balanced membership across the combined authority area.

Amendments 53 and 57 seek to provide that the membership of an overview and scrutiny committee is politically balanced, reflecting seats held by constituent councils in the combined authority area. While we understand and broadly share these aims, we believe that the approach which we are adopting of delivering and specifying political balance through an order is the right approach which will enable genuine political balance, in every circumstance, to be delivered.

As to the chair of an overview and scrutiny committee, government Amendments 52 and 56 make provision, again, to ensure the independence of an overview and scrutiny committee. Amendment 52 would provide on the face of the Bill that the chair of an overview and scrutiny committee for a combined authority must be one of two categories of person: either an independent person; or, in the case of a mayoral combined authority, a member of a constituent authority who is not of the same political party as the mayor or, in the case of a non-mayoral combined authority, a member of a constituent authority who is not of the same political party as the biggest party of the combined authority. The definition of independent will be provided in secondary legislation and ensure that any such person is recruited by the combined authority through open and fair processes. In the case of any particular combined authority, an order can specify what option for the scrutiny committee chair—independent person or constituent council member—is to be adopted. Alternatively, this can be left as a matter for local choice, to be exercised at any time the authority sees fit. Government Amendment 56 provides the appropriate definitions. I believe that these amendments deliver the intention that the noble Lords, Lord Shipley and Lord Scriven, sought to achieve in Amendment 54.

Photo of Lord Scriven Lord Scriven Liberal Democrat 4:45 pm, 15th July 2015

I welcome the Minister’s reply but I would like to go away and reconsider what she is suggesting. In my own personal experience, open competition or advertisement has been made for independent chairs of a number of committees on which I have sat in South Yorkshire, including for the fire authority. It turned out that the independent members—when further scrutinised after appointment by the majority party—all, interestingly, had a link back to that majority party. While I appreciate that what the Minister is saying is reasonable, in practice I have on at least three occasions seen it not to be reasonable. I ask her to really consider the whole process relating to independent members and how, in a one-party state, to stop such members being linked to the majority party—either the mayor’s party or a combined authority party.

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Lord in Waiting (HM Household) (Whip)

I remind noble Lords about the rules on Report: we should not introduce new matters and nobody should speak after the Minister, except for matters for elucidation.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I thank the noble Lord, Lord Scriven, for his comments; I certainly will go away and think about them. In making these amendments, we hoped that they would deliver the intention that both he and the noble Lord, Lord Shipley, sought to achieve. No matter how the legislation is done, we could all point to examples where it is not quite perfect, no matter how good the intention and no matter how tight the legislation is—though I take the noble Lord’s point.

I turn, finally, to opposition Amendment 43, which seeks to give greater statutory force to the guidance about overview and scrutiny that may be issued under paragraph 2(9) of new Schedule 5A. As the Bill stands, that guidance is already statutory guidance in the sense that due regard must be given to it. I do not think that further statutory requirements about guidance would be right. As the House will appreciate, if the

Secretary of State draws up any such guidance, he would of course want to seek the views of those who are expert in the field of overview and scrutiny.

I turn to some specific points and, first, to the point made by the noble Lords, Lord McKenzie of Luton and Lord Shipley, on why a combined authority should agree to the overview and scrutiny arrangements. It is important that scrutiny arrangements are agreed by the combined authority—though it need not be unanimous agreement—so that the authority embeds scrutiny into its arrangements and the culture of the organisation. It is certainly not a clause to be used to weaken arrangements; rather, it is to ensure a culture of scrutiny throughout the authority.

Photo of Lord Shipley Lord Shipley Liberal Democrat Lords Spokesperson (Communities, Decentralisation and the Northern Powerhouse)

My Lords, can the Minister elucidate what happens if there is a stand-off because neither side agrees?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government 5:00 pm, 15th July 2015

My Lords, that is an interesting question. I have witnessed many a stand-off in local authorities. The combined authority is obliged through its voting arrangements, whatever they may be—they will be different in different places—to come up with a resolution. I appreciate that it might start with a stand-off but I hope that it will be resolved in accordance with the democratic arrangements within the combined authority.

The noble Lord, Lord Shipley, asked about implementation, the short period of time and the powers of call-in. I hope I have explained to him that our new amendments give the Secretary of State the power to provide, by order, for a minimum call-in period.

The noble Lord also inquired about the chair of the overview and scrutiny committee. Under the Government’s amendments, the chair of an overview and scrutiny committee can never be a member of a constituent council if he is a member of the same political party as the mayor of a combined authority.

I hope those responses are helpful and that, with them, the noble Lord will feel happy to withdraw his amendment.

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

My Lords, I thank the Minister for her detailed response to our amendments and a raft of other amendments. I also thank the noble Lord, Lord Shipley, for his support for most of our amendments. I look forward to the Government bringing forward at Third Reading something on Amendment 34A and the audit committee. In respect of Amendments 35 and 37, I understand that the matter is already covered. I take the point on statutory guidance.

I do not 100% agree with the Government on Amendment 41 on the point that we discussed. However, it is fair to say that, together with the noble Lord, Lord Shipley, we have a substantial identity of view over a broad range of areas. We do not have an identity of view on everything, particularly around access to some of the documentation. However, for my part, I am happy to withdraw the amendment.

Amendment 34A withdrawn.

Schedule 3: Overview and scrutiny committees

Amendment 35 not moved.

Amendment 36 had been withdrawn from the Marshalled List.

Amendment 37 not moved.

Amendment 38

Moved by Baroness Williams of Trafford

38: Schedule 3, page 22, line 37, after “includes” insert “—

(a) power to direct that a decision is not to be implemented while it is under review or scrutiny by the overview and scrutiny committee, and

(b) ”

Amendment 38 agreed.

Amendments 39 and 40 not moved.

Amendment 41

Moved by Baroness Williams of Trafford

41: Schedule 3, page 22, line 38, at end insert—

“(4A) An overview and scrutiny committee must publish details of how it proposes to exercise its powers in relation to the review and scrutiny of decisions made but not yet implemented and its arrangements in connection with the exercise of those powers.

“(4B) Before complying with sub-paragraph (4A) an overview and scrutiny committee must obtain the consent of the combined authority to the proposals and arrangements.”

Amendment 41 agreed.

Amendment 41A had been withdrawn from the Marshalled List.

Amendment 42

Moved by Baroness Williams of Trafford

42: Schedule 3, page 23, line 18, leave out from “committees)” to end of line 21

Amendment 42 agreed.

Amendments 43 to 48 not moved.

Amendment 49

Moved by Baroness Williams of Trafford

49: Schedule 3, page 24, line 23, at end insert—

“(h) as to the minimum or maximum period for which a direction under paragraph 1(4)(a) may have effect.”

Amendment 49 agreed.

Amendment 50 not moved.

Amendments 51 and 52

Moved by Baroness Williams of Trafford

51: Schedule 3, page 24, leave out lines 24 to 31 and insert—

“(3) Provision must be made under sub-paragraph (2)(a) so as to ensure that the majority of members of an overview and scrutiny committee are members of the combined authority’s constituent councils.”

52: Schedule 3, page 24, line 31, at end insert—

“(3A) Provision must be made under sub-paragraph (2)(b) so as to ensure that the chair of an overview and scrutiny committee is—

(a) an independent person (as defined by the order), or

(b) an appropriate person who is a member of one of the combined authority’s constituent councils.

(3B) For the purposes of sub-paragraph (3A)(b) “appropriate person”—

(a) in relation to a mayoral combined authority, means a person who is not a member of a registered political party of which the mayor is a member, and

(b) in relation to any other combined authority, means a person who is not a member of the registered political party which has the most representatives among the members of the constituent councils (or, if there is no such party because two or more parties have the same number of representatives, is not a member of any of those parties).”

Amendments 51 and 52 agreed.

Amendments 53 to 55 not moved.

Amendment 56

Moved by Baroness Williams of Trafford

56: Schedule 3, page 24, line 42, at end insert—

“( ) In this paragraph—

“constituent council”, in relation to a combined authority, means—

(a) a county council the whole or any part of whose area is within the area of the combined authority, or

(b) a district council whose area is within the area of the combined authority;

“registered political party” means a party registered under Part 2 of the Political Parties, Elections and Referendums Act 2000.”

Amendment 56 agreed.

Amendment 57 not moved.

Amendments 58 to 61 had been withdrawn from the Marshalled List.

Amendment 62

Moved by Baroness Williams of Trafford

62: After Clause 9, insert the following new Clause—

“Requirements in connection with establishment etc. of combined authority

(1) The Local Democracy, Economic Development and Construction Act 2009 is amended as follows.

(2) In section 110 (requirements in connection with establishment of combined authority), for subsections (1) to (3) substitute—

“(1) The Secretary of State may make an order establishing a combined authority for an area only if—

(a) the Secretary of State considers that to do so is likely to improve the exercise of statutory functions in the area or areas to which the order relates, and

(b) the constituent councils consent.

(1A) If a scheme for the establishment of the combined authority has been prepared and published under section 109 the Secretary of State must have regard to that scheme in making the order.

(2) In a case where no such scheme has been prepared and published, the Secretary of State must consult such persons (if any) as the Secretary of State considers appropriate before making the order.

(3) In this section “constituent council” means—

(a) a county council the whole or any part of whose area is within the area for which the combined authority is to be established, or

(b) a district council whose area is within the area for which the combined authority is to be established.”

(3) In section 113 (requirements in connection with changes to existing combined arrangements), for subsections (1) and (2) substitute—

“(1) The Secretary of State may make an order under section 104, 105, 106 or 107 in relation to an existing combined authority only if—

(a) the Secretary of State considers that to do so is likely to improve the exercise of statutory functions in the area or areas to which the order relates, and

(b) the constituent councils consent.

(1A) If a scheme has been prepared and published under section 112 the Secretary of State must have regard to that scheme in making the order.

(2) In a case where no such scheme has been prepared and published, the Secretary of State must consult such persons (if any) as the Secretary of State considers appropriate before making the order.

(2A) In this section “constituent council” means—

(a) a county council the whole or any part of whose area is within the area or proposed area of the combined authority, or

(b) a district council whose area is within the area or proposed area of the combined authority.”

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I know that we have already debated this but I promised to come back to it today, following the Delegated Powers and Regulatory Reform Committee report. I would also like to speak to Amendments 71, 72 and 77. I read with interest the DPRRC’s report yesterday and would like to respond with a detailed explanation of the reasons behind these amendments. Amendments 62 and 77 are designed to fast-track the establishment of a combined authority where circumstances warrant this, while maintaining all the necessary safeguards.

The current process for creating a combined authority under the 2009 Act is lengthy and consists of four stages. First, local authorities have to undertake a governance review. This involves the authorities concerned considering whether a combined authority would improve the governance of the functions which they are considering it might exercise. In doing this, the authorities usually engage with local partners and their communities, although they are not statutorily required to do so. The next stage is for the authorities to develop a scheme for a proposed combined authority. Together, the governance review and scheme provide the reasons for establishing the combined authority and how it will operate. The third stage involves the Secretary of State undertaking various considerations and a statutory consultation that includes being required to consult the very authorities that have undertaken the review, prepared the scheme and are seeking the establishment of the combined authority.

The fourth and final stage is that each House of Parliament must approve a draft order providing for the establishment of the combined authority, after which the Secretary of State can make the order in the terms of the approved draft. Past experience shows that it can take well over a year even to reach the point of the order being made. Noble Lords will see that inevitably, the process involves some duplication. In particular, where establishing a combined authority is agreed as part of a devolution deal, the duplication of local discussion, engagement and consultation can be substantial.

Amendments 62 and 77 provide a streamlined process for creating combined authorities where the risks of duplication are minimised. An example might be where a number of councils, as part of a deal, agree to the establishment of a combined authority. They have provided the Secretary of State, as part of these deal discussions, with sufficient information and evidence to undertake the statutory tests: that is, to conclude whether creating the combined authority is likely to improve the exercise of statutory functions in the combined authority’s area; and to have regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government. All councils in the area of the proposed combined authority then consent to its establishment.

In such a circumstance, the fast-track process would enable the Secretary of State to seek Parliament’s approval to the draft order, once he has fulfilled his statutory duty to consult such persons as he considers appropriate. With this streamlined process, the councils no longer have to undertake the lengthy process of developing a governance review and preparing a scheme. This is because the substance of these processes will have been undertaken in a different way and the Secretary of State will continue to be required to apply the statutory tests and the statutory consultation, which he would need to do in accordance with administrative law—the legal framework which applies in any case where the Secretary of State exercises his powers. He must have regard to all relevant considerations, must not have regard to irrelevant considerations, and his decisions must be rational and within the powers that he is exercising.

These amendments also provide that where the fast-track process is not being followed and councils are developing a governance review and scheme, the process can still be more streamlined than it is currently. The current requirements on consultation, particularly that the Secretary of State consult the authorities that have prepared the scheme, are replaced by a requirement that the councils, which will have engaged with their communities when preparing their scheme, must consent to the establishment of the combined authority in the terms of that order. The Secretary of State still has the option of consulting if he considers it necessary.

These amendments therefore facilitate the timely implementation of devolution deals which will be of critical importance to areas being able to respond quickly to the economic challenges and opportunities they and the country face today—helping to grow our economy, improving productivity and increasing our competitiveness. I hope noble Lords consider that these explanations address the DPRRC’s comments.

Government Amendments 71 and 72 will enable the Secretary of State to confer functions of a public authority on local authorities as well as combined authorities. Amendment 83 is consequential on these. These amendments are intended to make it clear that there is a level playing field for all areas to agree devolution deals with the Government, including areas where there is no combined authority.

Noble Lords have previously raised concerns that the Bill focuses on devolution to large cities with combined authorities, and asked how the Bill’s provisions apply in non-metropolitan areas where there may perhaps not be combined authorities. We are clear that devolution applies equally across England—to counties and towns as well as cities. As I have said, the Government are ready to discuss with any area the powers and budgets they want devolved to them and the governance arrangements they propose to support those powers. We want towns and counties to play their part in growing the economy, and we are offering them the opportunity to agree devolution deals and provide local people with the levers they need to boost growth.

It will be for local areas to decide over what geography they would wish to have those powers devolved. Where a functional economic area covers a wider area than a single local authority, a combined authority can be an excellent means for enabling local authorities to collaborate effectively and work across their administrative boundaries. But there are areas in which the functional economic area may comprise a single local authority, and where this might be the best geography over which to devolve powers and budgets. We are already discussing such deals with some areas and making excellent progress in areas such as Cornwall. Amendments 71 and 72 are necessary to enable such deals to be agreed. These amendments apply to county councils and district councils the same powers for transferring public functions as under Clause 6, which the House has approved, including the amendments approved on Monday.

The Delegated Powers and Regulatory Reform Committee has concerns about the potentially wide scope of powers that could be conferred under the provisions in Clause 6 and these new clauses without a statutory consultation. We responded to its concerns on Clause 6 by tabling Amendment 33, which was passed by the House on Monday. This requires the Secretary of State to lay a report before the House whenever an order is laid before Parliament under the provisions in Clause 6. This report would need to include details of any consultation.

Before saying more on consultation, I would like to address the point made by the Delegated Powers Committee that a duty to lay a report cannot be regarded as equivalent to a duty to consult. We do not see, and never have seen, the duty to lay a report as replacing a duty to consult. The purpose of the report is to ensure that Parliament has full information about the deal in question, including information about the powers being devolved, why they are being devolved and what outcomes are expected from that devolution. We see the report addressing the issue raised by the committee that there is no information about the kind of powers that may in any case be devolved.

We have explained why this Bill is an enabling Bill. Equally, we recognise the importance of Parliament being fully aware of the nature of a deal when considering an order implementing it. That is the purpose of a report.

In relation to both Clause 6—before we introduced the additional requirement of the report—and to the equivalent provisions which Amendments 71 and 72 introduce into the Bill for transferring powers to county councils and district councils, including unitaries, the Delegated Powers Committee has concluded that they constitute an inappropriate delegation of powers. In our response to the committee’s first report, with the important points we have included, we made it clear that we do not share this view.

The committee saw no reason why the legislation giving a wide discretion as to the conferring of functions should not, at the same time, give a clear indication of what those functions might be. As we have set out in this debate, and as we heard persuasively from the noble Lord, Lord Heseltine, on Monday, if the Government set out in some way the scope or template for devolution, it would turn the whole bottom-up devolution process which they are pursuing, following their manifesto commitment, on its head. It is for the areas themselves to decide and come forward with what they want devolved to them. It is for them to reach their decisions without some centralist template, schedule or description constraining their ambition. As the noble Lord, Lord Heseltine, explained, if there were to be some centralist framework, given the nature of Whitehall, the risk is that it would be limiting. This Government, with their manifesto commitments and through this Bill, are seeking to reverse 150 years of centralisation. We are not—as the Delegated Powers Committee is suggesting—confusing flexibility with imprecision.

Turning back to consultation, in the context of deal making, we do not see that making a duty on the Secretary of State to consult would be appropriate. Such a duty would reinforce the top-down, government-driven view of this process—the very antithesis of what we want this process to be. We consider that consultation is more appropriately undertaken locally by the areas developing the proposals than by the Secretary of State. However, it is right for the Secretary of State to consider such consultations. He will need to do so in order to fulfil the statutory test before regulations transferring powers can be made. This is likely to improve the exercise of statutory functions in the local authority’s area.

Moreover, it is right that Parliament should know all about such considerations by the Secretary of State. The reporting requirement now included both in Amendments 71 and 72 and in Clause 6 of the Bill ensures that this is so. Each House of Parliament will need to approve any order conferring powers under the provisions in this Bill, or under Part 6 of the 2009 Act, through the affirmative procedure. For these reasons, I believe that Amendments 71 and 72 will ensure that Parliament will have all that it will need to consider the orders implementing the devolution deals.

Photo of Lord Tyler Lord Tyler Liberal Democrat Lords Spokesperson (Constitutional and Political Reform) 5:15 pm, 15th July 2015

My Lords, I am grateful to the Minister—as I am sure are all noble Lords who have been following this very difficult process. It has been a difficult process from the outset because the Government have brought forward very substantial changes with these new clauses. I do not blame anybody for that. That is the way life is. It will be apparent from the noble Baroness’s long explanation that the concerns of the Delegated Powers and Regulatory Reform Committee are substantial—and she has answered them substantially. But she was very generous earlier in saying that, between now and Third Reading, she would think about some of the issues that have been raised.

I wonder whether the House shares my view that we are in some difficulty. I do not know how many Members who have been following these proceedings have been able to read the report in detail. It was available only yesterday afternoon. I wonder, therefore, whether there would be general agreement in the House—and perhaps the noble Baroness would also agree—to giving us a little more time to see how these two quite distinct views might be brought together. The unanimous decision of that well-respected committee was that there were concerns about these two clauses. The fact that the noble Baroness needed 12 or 13 minutes to explain what exactly was involved in the new clauses rather supports my view.

Rather than having a detailed debate, and since there are only a few days between now and Third Reading, I wonder whether she would agree to withdraw government Amendment 62 and the associated short Amendment 77, as well as Amendments 71 and 72, so that everybody can be sure that we are bringing together the important concerns of the Delegated Powers and Regulatory Reform Committee with the substantial answers that the Government would wish to give. It may be that, with a small tweak here and there, the concerns of the committee can be met. Then we should be a great deal more satisfied with the process and reassured that the House’s consideration of the Bill has been properly undertaken.

Photo of Baroness Eaton Baroness Eaton Conservative

Will the Minister confirm that if an area currently without a combined authority agrees a devolution deal that involves the creation of a combined authority, without Amendments 62 and 77 it could be at least a year, if not two, before any powers could begin to be devolved?

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

My Lords, I, too, take this opportunity to raise again an issue covered in Amendments 62, 63, 64 and 65, on which I am still not sure we have got to the right position. Is there any flexibility here? I think we all recognise that the Minister has been extremely helpful to the House, but she is still holding to the view that you can belong to only one combined authority: therefore, I address the issues in Amendment 64. That is fine if you are part of Greater Manchester and a whole big combined metro authority. It is also fine when you want a combined authority of adjacent urban unitary authorities with shared goals and objectives. However, I think the Minister was the first to recognise that there are very real problems where you have an urban unitary area surrounded by rural areas. Plymouth may be an example of that, although I am not speaking for it as I do not know whether it shares my views. Equally, where you have shire districts, as with Norwich and Cambridge—I am speaking for them—possibly Exeter, and many other medium-sized cities of England, there is a complexity because they are, if you like, islands of urban economic generation. Therefore, it makes sense not to have that one-size-fits-all version of a combined authority.

For example, my city produces economic growth. We have only about 20% or so of the relevant population but produce more than 50% of the relevant jobs. We want city and district partners for what we have now— that is, a greater Norwich partnership for economic development, travel to work and issues of connectivity. However, it would be desirable to have a wider geography with which to tackle the bigger issues of public sector reform, and integrated NHS and social care, for example, which cannot be done on a sub-county basis, and where it may make sense to go beyond a county basis and link across counties. How do we do this? I have just received an email from the leader of Cambridge City Council—not my own, so it offers a different view. We have been trying to see where the voices lay on this. Mr Herbert states that a growing number of councils want to create city-district partnerships for economic development and travel to work, while being part of a larger geography for public sector reform and tackling care and the NHS jointly. He says that the ideal solution might be,

“to have different combined authorities for those different functions, bringing together the partners who it makes most sense to work with on these different issues. That is particularly true for the largest county towns/cities and the new unitaries who have a strong common cause with immediately adjacent authorities, but not necessarily with all authorities in a county or LEP area”.

Mr Herbert adds, however, that the problem is that,

“the current legislation around Combined Authorities, and the draft Bill the new Government has brought forward, seemingly do not allow for this—insisting on a single Combined Authority”.

He talks of addressing the issue:

“While the Bill is still in draft, and before we get forced into arrangements”,

which I maintain do not work for a large chunk of the country, such as urban authorities surrounded by rural authorities, unitaries surrounded by shire districts and district cities, which provide the energy for their counties, which are surrounded by other districts. The proposed single combined authority that the Minister has laid down will cramp the contribution that such areas can make to economic growth. I absolutely understand that this has to be negotiated in a bespoke way with the Secretary of State and am perfectly happy that that should be the case, following the thrust of what the Minister has argued in the past. Will the Minister or the Secretary of State therefore meet the leaders of such authorities in such situations for whom the single combined authority—the one-size-fits-all approach—does not work? If it is too late for this Bill and if the Government are willing to expand the remit, perhaps amendments to that effect could be tabled in the other place.

Photo of Baroness Jenkin of Kennington Baroness Jenkin of Kennington Conservative

My Lords, can my noble friend clarify that Amendments 71 and 72 are necessary to put all local areas on a level playing field, and to enable a devolution deal in local authority areas such as Cornwall?

Photo of Lord Woolmer of Leeds Lord Woolmer of Leeds Labour

My Lords, I want to echo some of the points made by the noble Lord, Lord Tyler. From my own selfish point of view, I welcome speed in this area. There is no doubt that a lot of corners could be cut in terms of the public understanding of what is being proposed, the discussion and so on. These are substantial changes. Some local authorities will go in with others that never dreamt of doing so before. Other public bodies will be incorporated or will jointly share functions with local authorities never considered before. These are very substantial changes.

Normally, one would say that there has been a lot of thought about this, proposals have been discussed and so on. There is a balance here between speed and process, and Governments want to get on. In the days when I led a council, I had to get on. It is jolly annoying when you sometimes have to stop to consult and discuss more widely, but at the end of the day it can be helpful. If it is not done appropriately and adequately at local level, the Minister may find that there is more pressure at government level for those discussions to go on than they expected. So there is an argument for careful discussion. I am not suggesting that we hide behind that, but we should not put the cloak around us that speed is important. We have been waiting for years for this, as the noble Lord, Lord Heseltine, said—150 years, the Minister said. Let us get on with it; we know what we want to do. I would welcome the chance to discuss some of those matters at Third Reading, not to hold things up but just so that there is adequate discussion.

I ask the Minister to clarify one or two points. Amendment 62 states that,

“‘constituent council’ means a county council … or a district council”.

I assume that that probably means both a county council and a district council, and that both would need to be considered. That may be purely language but I assume that it would mean both. Where do unitary authorities fit into that wording? Where do they fall into the constituent council language?

Finally, can the Minister clarify a point that was raised by my noble friend Lady Hollis? If a shire district council wished to join a combined authority—for example, comprising metropolitan district councils—am I right in saying that the county council, or part of it, would have to join? For example, if Harrogate and its associated area wished to join with West Yorkshire, would North Yorkshire County Council as a whole have to join a combined authority, and would it then have enough to join a combined authority? Could a shire district join a combined authority without the county council? If the Minister could clarify that, it would be useful to me. I am not suggesting that there would be a disagreement, but it would just be helpful to me to understand that.

If a very large county council were to be part of a combined authority through the fact that one or more of its district councils wanted to join that authority, would the other part of that county council be able to join another combined authority? In other words, could a very large county council be part of two combined authorities? That is not impossible for very large county councils and it is not really clear in the Bill. It would certainly be helpful to me and to others to have those points clarified.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Communities and Local Government) 5:30 pm, 15th July 2015

I thank the Minister for her detailed exposition of the issues around these two sets of amendments. I support the noble Lord, Lord Tyler, in asking whether we can take this forward to Third Reading, if necessary. These substantial amendments herald very significant changes to what has been the process hitherto. We had the Delegated Powers Committee’s report just yesterday—for some of us who were on other duties, not until this morning—and the noble Baroness’s presentation raises issues. Rather than asking the Government to withdraw the amendments, why do they not proceed while recognising that they are if necessary open to final amendment at Third Reading, which is only a few days away? Given the range of queries now emanating from our considerations—every time we look at this it raises more issues—it seems that we should try to structure a meeting with the Minister, and colleagues if necessary, between now and then to iron out as much of this as possible.

From our point of view, as my noble friend Lord Woolmer said, if we can speed up the process we would be supportive of that in principle. We certainly support extending the arrangements to individual counties and councils. That is not an issue but some of the process stuff is. One point that bothers me still is in relation to what the Delegated Powers Committee report said on Amendment 62. In paragraph 11, the report says clearly:

“We see the scheme process, which involves local engagement and consultation, as being wholly different from the process of discussion and negotiation which takes place only between the local authorities and the Secretary of State”.

I would accept having administrative law brought into play and prayed in aid as a constraint or parameter that the Secretary of State had to comply with. But introducing that sort of concept fairly late in the day is a bit unusual, and its context needs proper consideration.

On Amendments 71 and 72, we know that the innate problem is of having a difference between those of us who believe that there should be some parameters put into the Bill, but not to stifle initiative and innovation, and the Government’s view that they will oppose that. Notwithstanding that, it would be helpful for progress today and to get the best solution possible over these amendments if the Government would recognise that, if necessary and appropriate after further discussion, this would be open for amendment at Third Reading. That would otherwise save us making more difficult choices here and now.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I thank all noble Lords for the comments that they have made. My noble friend Lady Eaton talked about the problems of delay, which are very real. The noble Baroness, Lady Jenkin, talked about Amendments 71 and 72 being necessary for places such as Cornwall. She is absolutely right.

My noble friend Lady Eaton asked whether an area that is not currently a combined authority can access the powers of devolution. She asked about areas without combined authorities. Again, without Amendments 71 or 72 it is not possible to confer powers on, say, Cornwall. Places such as Cornwall would be very concerned if the Bill did not have that power.

The noble Baroness, Lady Hollis, asked why you cannot be in two combined authorities. Councils can be constituent members of one combined authority and non-constituent members of another. That is quite possible. I will give the noble Baroness an example before she gets to her feet. In Greater Manchester, Cheshire East is a non-constituent member of the Great Manchester Combined Authority for the purposes of, I think, business rates.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

So it is not an opt-out?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

No, it is not an opt-out but it is a non-constituent member for the purposes of some of the powers the combined authority might get for business rates. I think that is the reason that it is a non-constituent member. I apologise if the noble Baroness is still confused.

The noble Lord, Lord Woolmer, asked several pertinent questions, as always—

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

Will the Minister come back to the substance of the questions I asked? She may well do later in her wind-up to this bundle of amendments but, if that is all she is going to say, forgive me, she has not addressed the issues. We share the same wish for outcome but can she come back to some of the other issues I raised?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I was trying to say to the noble Baroness that for one purpose a local authority might be a constituent member of a combined authority; for another purpose—I gave the example of Cheshire East—it may be a non-constituent member of a combined authority. In other words, it has involvement with more than one combined authority but on a different basis, which I thought was the point she was making.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

If the Minister could write to me more fully, that would be helpful and then perhaps we can follow it up. I do not want to waste the time of the House.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I have just been passed another note about this. Another example is that York is a non-constituent member of West Yorkshire Combined Authority. In fact, I think that is why the noble Lord, Lord Woolmer, was nodding so readily.

Photo of Lord Woolmer of Leeds Lord Woolmer of Leeds Labour

At what point in a mayoralty would a non-constituent authority become a constituent authority? How many elements of the combined authority’s functions would a non-constituent authority have to share in order for it to become a part of a combined authority? That presumably means that the mayor of the combined authority would be taking decisions or influencing decisions of the combined authority that were outwith the electorate of this non-constituent local authority. Am I right on that?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I hope I can answer this satisfactorily. Let us take the example of York, within Yorkshire. If York was to become a constituent member of some sort of Yorkshire combined authority it could not then become a constituent member of another combined authority, but I think it would be perfectly possible for it to become a non-constituent member of another combined authority for certain purposes. So in other words, if Cheshire East decided that it would, with consent, have a combined authority with Cheshire West and Chester, would that then preclude it from being a non-constituent member of the Greater Manchester Combined Authority? I do not think that it would—but I can confirm that in due course, if it helps the noble Lord.

Photo of Lord Warner Lord Warner Labour

May I suggest that the Minister responds to the perfectly sensible proposition of my noble friend Lord McKenzie that we curtail this set of discussions so that we can make some progress?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I always try to answer noble Lords’ questions from the Dispatch Box. However, in this instance, I take the noble Lord’s point. With the leave of the House, I propose to withdraw Amendment 62 today and return to it at Third Reading.

Amendment 62 withdrawn.

Amendments 63 to 65

Moved by Baroness Williams of Trafford

63: After Clause 9, insert the following new Clause—

“Removal of geographical restrictions in relation to EPBs

(1) The Local Democracy, Economic Development and Construction Act 2009 is amended as follows.

(2) Omit subsections (3) and (4) of section 88 (EPBs and their areas).

(3) In section 95(2)(a) (changes to boundaries of an EPB’s area: conditions), for “conditions A to D” substitute “conditions A and D”.

(4) In section 98(3)(c) (preparation and publication of scheme for new EPB: conditions) for “conditions A to C” substitute “condition A”.

(5) In section 99 (requirements in connection with establishment of EPB), after subsection (3) insert—

“(3A) Subsection (3B) applies where the Secretary of State is considering whether to make an order establishing an EPB for an area and—

(a) part of the area is separated from the rest of it by one or more local government areas that are not within the area, or

(b) a local government area that is not within the area is surrounded by local government areas that are within the area.

(3B) In deciding whether to make the order, the Secretary of State must have regard to the likely effect of the creation of the proposed EPB on economic development or regeneration in each local government area that is next to any part of the proposed EPB area.”

(6) In section 102 (requirements in connection with changes to existing EPB arrangements), after subsection (2), insert—

“(2A) Subsection (2B) applies where the Secretary of State is considering whether to make an order under section 95 and—

(a) part of the area to be created is separated from the rest of it by one or more local government areas that are not within the area, or

(b) a local government area that is not within the area to be created is surrounded by local government areas that are within the area.

(2B) In deciding whether to make the order under section 95, the Secretary of State must have regard to the likely effect of the proposed change to the EPB’s area on economic development or regeneration in each local government area that is next to any part of the area to be created by the order.””

64: After Clause 9, insert the following new Clause—

“Removal of geographical restrictions in relation to combined authorities

(1) The Local Democracy, Economic Development and Construction Act 2009 is amended as follows.

(2) Omit subsections (3) and (4) of section 103 (combined authorities and their areas).

(3) In section 106(2)(a) (changes to boundaries of a combined authority’s area: conditions), for “conditions A to D” substitute “conditions A and D”.

(4) In section 109(3)(c) (preparation and publication of scheme for new combined authority: conditions), for “conditions A to C” substitute “condition A”.

(5) In section 110 (requirements in connection with establishment of combined authority), before subsection (4) insert—

“(3A) Subsection (3B) applies where the Secretary of State is considering whether to make an order establishing a combined authority for an area and—

(a) part of the area is separated from the rest of it by one or more local government areas that are not within the area, or

(b) a local government area that is not within the area is surrounded by local government areas that are within the area.

(3B) In deciding whether to make the order, the Secretary of State must have regard to the likely effect of the creation of the proposed combined authority on the exercise of functions equivalent to those of the proposed combined authority’s functions in each local government area that is next to any part of the proposed combined authority area.”

(6) In section 113 (requirements in connection with changes to existing combined arrangements), after subsection (2A) (inserted by section (Requirements in connection with establishment etc. of combined authority) above) insert—

“(2B) Subsection (2C) applies where the Secretary of State is considering whether to make an order under section 106 and—

(a) part of the area to be created is separated from the rest of it by one or more local government areas that are not within the area, or

(b) a local government area that is not within the area to be created is surrounded by local government areas that are within the area.

(2C) In deciding whether to make the order under section 106, the Secretary of State must have regard to the likely effect of the change to the combined authority’s area on the exercise of functions equivalent to those of the combined authority’s functions in each local government area that is next to any part of the area to be created by the order.””

65: After Clause 9, insert the following new Clause—

“Changes to existing EPB

(1) The Local Democracy, Economic Development and Construction Act 2009 is amended as follows.

(2) In section 100 (review by authorities: existing EPB)—

(a) in subsection (1), for “a review of one or more EPB matters.” substitute “a review of—

(a) a matter in relation to which an order may be made under section 95 or 96;

(b) a matter concerning the EPB that the EPB has power to determine.”;

(b) omit subsection (3).

(3) In section 101 (preparation and publication of scheme: existing EPB)—

(a) in subsection (1), for “any one or more of sections 89, 91, 92, 95 and 96” substitute “section 95 or 96”;

(b) in subsection (2), omit “or powers”.

(4) After section 101, insert—

“101A Application in respect of change to constitution, functions or funding: existing EPB

(1) Any one or more of the authorities to whom this section applies may, in relation to an existing EPB, apply to the Secretary of State in respect of one or more EPB matters.

(2) This section applies to—

(a) the EPB;

(b) a county council whose area, or part of whose area, is within the area of the EPB;

(c) a district council whose area is within the area of the EPB.

(3) For the purposes of this section an “EPB matter” is a matter in relation to which an order may be made under any of sections 89, 91 and 92.

(4) An application to the Secretary of State under subsection (1) must—

(a) be made in writing;

(b) specify how the exercise of the power to make an order under any one or more of sections 89, 91 and 92 would be likely to improve—

(i) the exercise of statutory functions relating to economic development and regeneration in the area of the EPB, or

(ii) economic conditions in the area of the EPB.

(5) An application may be made under this section only if every authority to whom this section applies consents to the making of the application.”

(5) In section 102 (requirements in connection with changes to existing EPB arrangements)—

(a) in subsection (1), after “section 101” insert “or to an application made under section 101A”;

(b) in subsection (2)(a), after “section 100(2)” insert “or section 101A(2)”.”

Amendments 63 to 65 agreed.

Amendment 66

Moved by Lord Warner

66: After Clause 9, insert the following new Clause—

“Devolving NHS responsibilities

(1) The Secretary of State may only exercise the powers in section 105A of the Local Democracy, Economic Development and Construction Act 2009 to transfer to a combined authority, or other designated body working in association with a combined authority, responsibilities of any health service body, if he considers that—

(a) it is in the best interests of the population served by the authority in terms of their health outcomes;

(b) it will facilitate the discharge of his duties in sections 2 and 4 of the Health and Social Care Act 2012 (duties to improve the quality of health services and reduce inequalities); and

(c) it will improve the effectiveness and sustainability of local health and care services.

(2) Under subsection (1) an “other designated body” must be a body corporate with a governing body and a chief accounting officer that are able to produce annual audited public accounts and be accountable annually to the combined authority for its performance.

(3) Where there is no other designated authority, the combined authority must have a designated chief accounting officer for the NHS responsibilities transferred to it and must account separately in its accounts for the monies spent on those transferred responsibilities.

(4) In making a transfer of responsibilities and resources in accordance with subsection (1) the Secretary of State shall require a memorandum of understanding on future service intentions, models of service delivery and use of resources to be agreed between NHS England and the combined authority or the other designated body working in association with the combined authority.

(5) A memorandum of understanding under subsection (4) shall—

(a) be for a period of at least five years;

(b) be consistent with the Secretary of State’s responsibilities under the 2012 Act, including his Mandates to NHS England;

(c) ensure compliance with the regulatory and national service and information standards required of NHS commissioners and service providers; and

(d) specify the key health outcomes and improvements to be achieved for the period of the memorandum.

(6) The provisions of an agreed memorandum of understanding under subsection (5) shall be incorporated in an order made by the Secretary of State.

(7) An order may not be made under subsection (6) unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.

(8) Once an order is approved, the Secretary of State may not use his powers of intervention in the actions of the combined authority or other designated body unless they have demonstrated, after due warning, a consistent inability to meet their population’s health needs or to do so within the agreed funding provisions made available to the authority or other designated body.

(9) A combined authority or other designated body working in association with it under the provisions of this section shall publish an annual report on how responsibilities in the memorandum of understanding in subsection (4) have been discharged alongside the published annual accounts.

(10) In this section, “health service body” has the same meaning as in the National Health Service Act 2006.”

Photo of Lord Warner Lord Warner Labour

Noble Lords may understand why I got up a little impatiently earlier. I move Amendment 66 in my name and in those of the noble Lord, Lord Patel, and the noble Baroness, Lady Walmsley. Let me start by reiterating my support for this Bill and lack of any objection whatever to including the transfer of NHS responsibilities through it. This amendment brings us back to earlier discussions on the arrangements for devolving NHS responsibilities, which led to a very helpful meeting with the Minister and her colleague the noble Lord, Lord Prior, on 6 July, when Howard Bernstein, the Manchester City Council chief executive, and officials from NHS England also joined us. I thank the Minister for arranging that meeting. We clearly got across our main point of concern—that the Bill had failed to address how it dovetailed with NHS legislation, particularly the Health and Social Care Act 2012. I think that the Minister has accepted our main argument on that point, and I am only sorry that I was unavoidably absent when she moved her amendments to try to deal with that issue late on Monday evening, but I have read Hansard carefully.

Rather than ploughing on through the detail of my amendment, I raise a few points of clarification about the Government’s apparent response to the concerns that my noble friend Lord Hunt and I raised at earlier stages of this Bill. As I understand the Minister from reading Hansard, she is saying that Amendment 28 enables NHS responsibilities to be conferred by order on a combined authority instead of a current public authority or for those functions to be exercised concurrently by an existing authority and a combined authority. The order could also impose specified conditions or limitations on that particular deal. That certainly meets my concern that the Bill seemed to have no regard to the 2012 Act, but it raises some other concerns which I shall come to briefly in a moment.

The Minister went on to say on Monday that the power to specify conditions or limitations in orders on the transfer of responsibilities would also give the Secretary of State power to stop the transfer of regulatory and supervisory functions to the local level. However, she then rejected Amendment 31, which rather confused me as it more neatly excluded those functions altogether from Clause 6. She offers the prospect of coming back to this issue at Third Reading. I do not think that we have dealt properly with the issue of regulatory and supervisory functions going down to the local level. I think the Government are trying to stop that, but I am not sure that, by making it an order-by-order process, that meets the case. I have a few other points. I see the Minister wants to jump up, but let me just finish my argument and then she can probably deal with all of them.

I do not wish to be churlish, but the Government’s way of dealing with my concerns and those of my noble friend Lord Hunt is pretty clunky. It could mean that each order could have different specifications of conditions and limitations depending on the local negotiations. This could mean over the years the piecemeal unpicking of the Health and Social Care Act 2012 across the country. We could end up moving from a “national” health service under that legislation to a service involving different arrangements in terms of entitlements and the Secretary of State’s duties to different populations. There is a problem for the Government, in that they do not understand fully that this is a “national” health service. Many of the other functions that are being devolved are not an integral part of a national service. I fear that, given where the Government are taking this—accidentally—we will end up with a piecemeal set of arrangements that basically take the “N” out of the NHS. I do not say that the Government are trying to do that deliberately. It is one of the consequences of doing this deal by deal, with no oversight of conditions that cannot be part of these particular local deals.

The Government seem to recognise that there may be a problem because, as the Minister said:

“Amendments 80 and 82 are minor changes … enabling the Secretary of State to amend or modify legislation”.—[Hansard, 13/7/15; col. 439.]

She gave the example of the National Health Service Act 2006. That adds to my concern that this agenda is a fragmentation of the NHS, involving a lot of local deals that make sense to a given locality, but with many consequences for other parts of the country that may not be part of those local deals. I am not sure that the Government, through the Department of Health, have really thought this through. In a moment I will suggest how they might deal with these issues.

I am not going to plough all the way through my amendments, but what I am concerned about is the collective punitive effect over time of the Government’s “workaround” approach to the concerns that have been expressed while this Bill has been taken through the House. There has to be some overarching provision of the kind that my noble friend made in Amendment 31 —about regulatory provisions not accidentally slipping down into local deals.

I would welcome the Minister’s explanation, which I have never really had, of why she is unwilling, given the nature of the National Health Service, to include in the Bill a clear process for dealing with these issues. I accept that it may be late in the day for the Government to do that in this place, but they should still consider doing so in the other place. If they do not want to go that far, I have an alternative proposition: they should consider an amendment to the Bill which provides that, six months after Royal Assent and after consultation, some form of statutory code or guidance will be produced on how devolution of NHS responsibilities under the Bill will work, and how they will interpret the wide powers they have taken in the Bill to organise that devolution. I fear that if they do not clarify the situation, there will be a great deal of confusion, chaos and misunderstanding in the NHS, which could rebound on the Government over time.

That is my constructive suggestion to deal with a set of circumstances that are bubbling up as a result of the Government trying to do this quickly and without thinking through all the implications of using the Bill to devolve NHS responsibilities. In the mean time, I beg to move the amendment so that we can have a brief discussion on these matters.

Photo of Baroness Walmsley Baroness Walmsley Liberal Democrat Lords Spokesperson (Health) 5:45 pm, 15th July 2015

My Lords, I have not taken part in debates on the Bill before today but I have followed carefully what has been said about devolving health functions, and have had several conversations with my noble friends and the noble Lord, Lord Warner. I have agreed with the concerns expressed by my noble friend Lord Shipley and the noble Lords, Lord Warner and Lord Hunt of Kings Heath, that there is not enough specifically in the Bill to ensure the accountability of the new devolved entity in relation to healthcare, nor enough to ensure adherence to national standards. Despite the fact that national standards of course vary across England and the devolved nations—quite widely, in some places—it is important that at the very least we ensure minimum standards of care in the devolved entities in reality, not just in theory in the applications of the authorities to the Secretary of State in the first place.

It must be borne in mind that the Bill is breaking new ground at a time when the health and social care system is still settling down to the new structure introduced by the Health and Social Care Act 2012, and is doing so at a time when the NHS is being asked to make enormous efficiency savings, many acute health trusts are posting a deficit, and in some places the social care system is in danger of crashing. Thus it is not surprising that opposition parties are asking the Government to place safeguards in the Bill in the interests of patients in Greater Manchester and other places in future, and to be very clear what is intended.

On 13 July, during the first day of Report, the Minister said in response to these concerns that government Amendment 28,

“enables the Secretary of State to provide for the functions concerned to be exercisable by the combined authority or public authority, subject to specified conditions or limitations”.—[ Official Report , 13/7/15; col. 439.]

She gave some examples, such as a condition that the combined authority must also meet the current statutory duties held variously by the Secretary of State for Health, NHS England and clinical commissioning groups, thereby ensuring the continuation of current NHS accountabilities and standards. The question is: will the Secretary of State impose such a condition? We need to know that now, not just after the Bill has passed. As the noble Lord, Lord Warner, has said, we are in danger of landing up not with a national health service but with a set of local health services. I hesitate to use the phrase “postcode lottery”, but I think noble Lords know what I mean.

The Minister gave other examples of possible conditions, such as reducing health inequalities, continuous improvements in service and so on. While I am very much in favour of the real devolution of powers as opposed to simple decentralisation, it is my view that it is not worth doing these things at all unless they actually result in service improvements and reductions in inequality. I therefore ask her to be very clear about the Government’s intentions in this respect.

We also need some assurance that the devolved authorities will still be subject to the same regulators that protect standards in the rest of the country; they cannot regulate themselves. We had some assurance about this from the Minister on Monday night when she accepted the points made, but I am sure that we would all be happier if this were reflected in the wording of the Bill. I am not satisfied that we should rely on the Secretary of State making a series of orders; there is a danger in that, and we need more than that.

Photo of Lord Patel Lord Patel Crossbench

My Lords, in Committee I sat through an extensive exchange in the debate between the noble Lords, Lord Warner and Lord Hunt of Kings Heath, and the Minister. I thought at the time that the noble Lords were enjoying themselves while the Minister was not. While I accept in principle that the devolution of the NHS has no problems with it—after all, we used to have regional health authorities—what is a problem is ensuring that they should be bound by the same statutory national regulations so that they do not themselves invent new regulations that are neither statutory nor binding on others. The point made by the noble Lord, Lord Warner, is important: if one set of regulations could be found in the Bill that would be binding, we would get away from having to make different sets of regulations each and every time, which is what would cause confusion. That is what the noble Lord alluded to and it seemed sensible to me. In principle, though, I accept that the devolution of the NHS is not a bad idea.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords

My Lords, this has been a very useful short debate. I think that the Minister will know that those of us who take an interest in NHS matters have no problem at all with the aims of the Bill, particularly in Greater Manchester; we all see the advantage and the potential of pulling together the NHS, local government, the university sector and the hugely important life sciences sector within Greater Manchester. We are also very grateful to the Minister, both for the meeting that she arranged and for agreeing that we can come back to my Amendment 31 at Third Reading in order to ensure that regulatory and supervisory functions cannot be included in a transfer of responsibility.

I also say to her that I take it this will also involve the funding of local Healthwatch being taken away from constituent local authorities. I do not expect her to respond to this; I merely make the point that their job is to provide an independent assessment of local health services. If health is transferred to local government in the way provided, there is no way that local authorities should continue to have the money routed through them to fund local Healthwatch. Clearly, it should be allocated by national Healthwatch directly to local Healthwatch. We will certainly come back to this at Third Reading; it is a very important matter that I wanted to give her notice of.

Then there is the issue that a piecemeal approach by order could inadvertently undermine the national nature of the NHS. We are looking for a response at Third Reading that recognises that there has to be some statement about the integrity of the NHS as a national service. Those are the two issues that I put to the Minister. Perhaps people in local government do not understand that a lot of what is done in the NHS is done not through statute but by what has been described as soft power. In other words, at the end of the day the Secretary of State for Health can ring up any chairman or chief exec of any NHS body and, in the end, they will do what they are asked to do because they all recognise that they are part of the national NHS family. It is very important that we do not lose that sense of belonging if you are transferring functions to local authorities. The DCLG relationship with local authorities is very different from the relationship between the Department of Health and NHS bodies.

Many of the actions that are taken are not done through statute. For instance, none of the fantastic reconfiguration of stroke services in London, a reduction from about 20 to nine services that has led to hugely improved outcomes, was done through statute; it was done because people recognised that there was a lead from the centre and they responded to it. My concern is that once we move in the direction of the Bill, we will lose a lot of that sense of national cohesion. That is why some statement in the Bill rather than through individual orders would be so important and, in supporting where we are going with the Bill, would give some measure of comfort to people in the NHS.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

Having listened to this debate, and with a certain interest in these matters, it occurs to me that the devolution proposed in the Bill is a devolution from one subsidiary authority to a local authority. There is no devolution of the responsibility of the Secretary of State, which is guaranteed under the 2012 Act. The Secretary of State remains responsible, in the same way as he is in relation to the existing health services. In a way, therefore, that is the theoretical guarantee for the National Health Service, except of course that the practical implications in which these things are worked out may be affected by this. The relationship between the Secretary of State and a local health authority may be a bit different from his relationship with the Greater Manchester authority. There is a possible problem in that area, but I think that we should emphasise that the Secretary of State is not by the Bill being empowered to devolve his responsibility as Secretary of State for the National Health Service.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords 6:00 pm, 15th July 2015

My Lords, I always hesitate to respond to the noble and learned Lord, because he always comes back at me, but I am sure that he is right about the statute. It is more about the symbolism of that leadership. I know that one should avoid unnecessary legislation, but this is crucial. This is a very thin Bill in terms of pages; in terms of its significance, it is hugely important. Some of us are looking for some reassurance in statute that the essential point of what the noble and learned Lord said will continue in future.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I start by thanking my noble and learned friend for putting everything so succinctly and eloquently in summing up what is the case in the NHS in relation to devolution, and the noble Lord, Lord Warner, for again eloquently outlining his amendment.

Amendment 66 puts certain limitations and conditions on the conferral of health powers on a combined authority or another body working with a combined authority. In particular, it requires the Secretary of State to consider that various conditions are met; that the other body must be a body corporate with a chief accounting officer; and that a memorandum of understanding is produced and reported against. It also prevents the Secretary of State intervening except in certain circumstances.

As we have discussed, Amendment 28, which was passed, and others in its group would enable any limitations or conditions to be specified in an order transferring health functions and were intended to provide assurance that any future devolution arrangements will continue to uphold existing accountabilities and national standards for the NHS.

Most of the limitations and conditions that the noble Lord, Lord Warner, outlines could be specified in an order using those provisions if doing so were considered appropriate in the context of a bespoke devolution deal. For example, we could enable the conferral of health powers to a combined authority to be accompanied by a condition that it must also meet current statutory duties held variously by the Secretary of State for Health, NHS England and clinical commissioning groups, thereby ensuring continuation of current NHS accountabilities and standards.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords

My Lords, I just want to raise a specific point about that which the intervention by the noble and learned Lord has raised. Notwithstanding what the Minister said about current accountabilities, my reading of new subsection (4) in Clause 6 is that because the Secretary of State may by order transfer a function and that the new subsection defines the public authority as being a Minister of the Crown or a government department, in some circumstances, the Secretary of State’s power is indeed transferred to the combined authority. That modifies the noble and learned Lord’s position, and that is why it is so important.

Photo of Lord Warner Lord Warner Labour

Before the Minister responds to that, perhaps I may add to it. I read from her statement on Monday evening, where she makes it absolutely clear that, under Amendment 28, we would be conferring on the combined authority many of the duties, such as,

“the duty to seek continuous improvement in the quality of services, reduce health inequalities, promote the NHS constitution”,

and to,

“seek to achieve the objectives in the NHS mandate”.—[ Official Report , 13/7/15; col. 439.]

As I understand it, what she is saying openly and transparently is that those duties get transferred to the combined authority through the order. If someone then says to the Secretary of State, “I don’t like the way health inequalities are going on in Cornwall”, or wherever, presumably, the Secretary of State can say, “Tough. I passed an order through Parliament which enabled me to offload that duty to this group of people for a period of time”.

Is the Minister saying that she did not mean what she said on Monday, or have we got this wrong?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I am not going back on what I said on Monday. I think that I made clear on Monday that the accountability and functions of the bodies do not change.

Photo of Baroness Walmsley Baroness Walmsley Liberal Democrat Lords Spokesperson (Health)

On a point of elucidation, the Minister said that the Secretary of State could impose those conditions. Is there any circumstance in which the Secretary of State should not impose such fundamental conditions as she has outlined?

Photo of Baroness Walmsley Baroness Walmsley Liberal Democrat Lords Spokesperson (Health)

I was just saying that the noble Baroness said that the Secretary of State could impose conditions such as meeting the current statutory duties of the Secretary of State or NHS England. I wondered whether there would be any circumstances in which the Secretary of State should not impose such conditions, because I think that they are pretty fundamental to standards.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I do not know of any such situation where he should not, but obviously each deal will be different. I cannot speak to a theoretical situation, but no one is suggesting that the Secretary of State loses the powers, particularly in respect of his ultimate accountability to Parliament for the provision of NHS services.

Most of the limitations and conditions that the noble Lord, Lord Warner, outlines could be specified in an order using the provisions, if doing so were considered appropriate in the context of a bespoke devolution deal. For example, we could enable a conferral of health powers on a combined authority to be accompanied by a condition that the combined authority must also meet the current statutory duties held variously by the Secretary of State for Health, NHS England and clinical commissioning groups.

Further safeguards are already provided by other provisions in the Bill. Before making an order to transfer functions, the Secretary of State must consider that such a transfer will improve the exercise of statutory functions. The Secretary of State is also bound by various duties in relation to the health service when exercising his functions. These are set out in the NHS Act 2006, and concern duties such as the duty to act with a view to securing continuous improvement in the quality of services and to have regard to the need to reduce health inequalities. Such duties would be relevant here and, in making an order transferring health service functions, he would be obliged to discharge them.

The order implementing a particular devolution deal must be debated and approved by both Houses of Parliament, and Parliament’s consideration will be supported by the laying in Parliament of a report setting out the detail of the deal, a new requirement under the provisions in Amendment 33, which the House passed on Monday. Those reports will set out and explain the full deal—that is, the wider context in which any order is being made. Hence, the report will set out and describe any memorandum of understanding that councils in the area, the combined authority and the various NHS bodies involved have agreed. That memorandum of understanding will describe and make clear the nature of the devolution agreement, including the degree of permanence or how long it is expected to last. We can see this in the MoU which Greater Manchester has entered into.

Amendment 66 would also require a combined authority to publish an annual report on its deal in relation to health. As we have noted previously, there will be a process for evaluating the progress on each deal agreed with each area as part of the deal. For example, the Greater Manchester deal has an extensive programme of evaluation, with evaluations being public documents available to all with an interest in the area and the progress that it is making. In this context, it is not appropriate to make a requirement about the reporting or evaluation of some particular aspect of a deal—indeed, an aspect that may not be in all the deals which are agreed.

We do not feel there is a need to restrict the ability of the Secretary of State to intervene as set out in Amendment 66. The Secretary of State is already under a duty when exercising functions in relation to the health service to have regard to, always subject to the interests of the health service, the autonomy of the bodies exercising health functions.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords

My Lords, I am sorry to intervene again but surely the whole problem is that the Secretary of State may in fact devolve that to a combined authority under the Bill? That safeguard ultimately may not apply. That is the problem. Look at Clause 6(4). The very fact that by an order-making power a government department or a Minister of the Crown can be abolished takes away that essential safeguard. This is a local government Bill, essentially written for local government duties. I can see how it fits, but once the NHS is taken in, we are talking about a very different order. No one is objecting to what is happening in Greater Manchester—I applaud what is happening there. At this stage, all we are asking is for the Minister to allow us to consider what she has said and bring it back at Third Reading. She is, I know, trying to be very helpful.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I am trying to be helpful, although I am not sure that I am being very helpful. I indicated to the House on Monday that we are considering with a view, as appropriate, to returning at Third Reading to the question of whether to exclude from functions that can be transferred those regulatory and supervisory functions of national regulators responsible for regulating public authority functions. However, I would add that our consideration is not about how to exclude them on an order-by-order basis but whether to take these regulatory functions out of the scope of the Bill. This would put beyond doubt—whatever devolution deals, including health, were agreed—that the position of the regulators, such as Monitor and the Care Quality Commission, would be untouched, as indeed would the NHS constitution and mandate and all the NHS standards of care and access, as my noble and learned friend Lord Mackay pointed out.

With these perhaps not entirely satisfactory explanations, I hope the noble Lord will agree to withdraw his amendment.

Photo of Lord Warner Lord Warner Labour

There was a lot of heat but not much light, I suggest, from that debate. I say to the Minister that I am still thoroughly confused as to whether the Government are talking about transferring duties, powers, functions or responsibilities—there is a raft of words that may look as though they are the same, but they are not. On Monday night, the Minister talked about the conferral of duties from the Secretary of State. If, as the noble and learned Lord, Lord Mackay, is suggesting, the Secretary of State’s duties in the 2012 Act are absolute and apply to the whole of England—I think he is probably right—I do not see how they can be transferred under an order-making power in this Bill. We need to come back to this at Third Reading. We need something specific about the NHS in the Bill. It may not be the detail of my amendment, but, at the moment, we are in danger of creating considerable confusion around the world in terms of the NHS and what is intended by the Bill in relation to its responsibilities. In the mean time, on that basis, I beg leave to withdraw my amendment.

Amendment 66 withdrawn.

Amendment 67 not moved.

Amendment 68 had been withdrawn from the Marshalled List.

Clause 10: Governance arrangements etc of local authorities in England

Amendment 69 not moved.

Amendment 70

Moved by Baroness Williams of Trafford

70: Clause 10, page 10, line 39, at end insert—

“( ) At the same time as laying a draft of a statutory instrument containing regulations under this section before Parliament, the Secretary of State must lay before Parliament a report explaining the effect of the regulations and why the Secretary of State considers it appropriate to make the regulations.

“( ) The report must include—

(a) a description of any consultation taken into account by the Secretary of State,

(b) information about any representations considered by the Secretary of State in connection with the regulations, and

(c) any other evidence or contextual information that the Secretary of State considers it appropriate to include.”

Amendment 70 agreed.

Amendments 71 and 72

Moved by Baroness Williams of Trafford

71: After Clause 10, insert the following new Clause—

“Power to transfer etc. public authority functions to certain local authorities

(1) The Secretary of State may by regulations—

(a) make provision for a function of a public authority that is exercisable in relation to a relevant local authority’s area to be a function of the local authority;

(b) make provision for conferring on a relevant local authority in relation to its area a function corresponding to a function that a public authority has in relation to another area.

(2) Regulations under subsection (1) may include further provision about the exercise of the function including—

(a) provision for the function to be exercisable by the public authority or relevant local authority subject to conditions or limitations specified in the regulations;

(b) provision as to joint working arrangements between the relevant local authority and public authority in connection with the function (for example, provision for the function to be exercised by a joint committee).

(3) The provision that may be included in regulations under subsection (1)(a) includes, in particular, provision—

(a) for the relevant local authority to have the function instead of the public authority,

(b) for the function to be exercisable by the relevant local authority concurrently with the public authority,

(c) for the function to be exercisable by the relevant local authority and the public authority jointly, or

(d) for the function to be exercisable by the relevant local authority jointly with the public authority but also continue to be exercisable by the public authority alone.

(4) Regulations under subsection (1)(a) may, in particular, include—

(a) provision for the making of a scheme to transfer property, rights and liabilities from the public authority to the relevant local authority (including provision corresponding to any provision made by section 17(4) to (7) of the Localism Act 2011);

(b) provision to abolish the public authority in a case where, as a result of the regulations, it will no longer have any functions.

(5) In this section—

“function” (except in subsection (4)(b)) does not include a power to make regulations or other instruments of a legislative character;

Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975;

“public authority” includes a Minister of the Crown or a government department;

“relevant local authority” means a county council in England or a district council.”

72: After Clause 10, insert the following new Clause—

“Section (Power to transfer etc. public authority functions to certain local authorities): procedure etc.

(1) The Secretary of State may make regulations under section (Power to transfer etc. public authority functions to certain local authorities) only if—

(a) the relevant local authority consents, and

(b) the Secretary of State considers that the making of the regulations is likely to improve the exercise of statutory functions in the local authority’s area.

(2) The power to make regulations under section (Power to transfer etc. public authority functions to certain local authorities)—

(a) is exercisable by statutory instrument;

(b) includes power to make transitional, transitory or saving provision;

(c) may, in particular, be exercised by amending, repealing, revoking or otherwise modifying any provision made by or under an Act whenever passed or made.

(3) A statutory instrument containing regulations under section (Power to transfer etc. public authority functions to certain local authorities) may be made only if a draft of the instrument has been laid before each House of Parliament and approved by a resolution of each House.

(4) At the same time as laying a draft of a statutory instrument containing regulations under section (Power to transfer etc. public authority functions to certain local authorities) before Parliament, the Secretary of State must lay before Parliament a report explaining the effect of the regulations and why the Secretary of State considers it appropriate to make the regulations.

(5) The report must include—

(a) a description of any consultation taken into account by the Secretary of State,

(b) information about any representations considered by the Secretary of State in connection with the regulations, and

(c) any other evidence or contextual information that the Secretary of State considers it appropriate to include.

(6) If a draft of regulations under section (Power to transfer etc. public authority functions to certain local authorities) would, apart from this subsection, be treated for the purposes of the standing orders of either House of Parliament as a hybrid instrument, it is to proceed in that House as if it were not a hybrid instrument.”

Amendments 71 and 72 agreed.

Amendment 73

Moved by Lord Tyler

73: After Clause 10, insert the following new Clause—

“Governance arrangements for local government: entitlement to vote

In section 2 of the Representation of the People Act 1983 (local government electors), in subsection (1)(d) for “18” substitute “16”.”

Photo of Lord Tyler Lord Tyler Liberal Democrat Lords Spokesperson (Constitutional and Political Reform)

My Lords, I can be relatively brief, because the case for this amendment is very straightforward and has been rehearsed on all sides of your Lordships’ House with considerable support on many occasions.

The Liberal Democrats have been in favour of this extension of the franchise to 16 and 17 year-olds for many years. Indeed, I presented in your Lordships’ House Private Member’s Bills on the subject in the 2013-14 Session, the 2014-15 Session and the current Parliament. These have enjoyed widespread support across the House. I am especially grateful for consistent support from the noble Lord, Lord Lucas, on the Conservative Benches, the noble Lord, Lord Adonis, on the Labour Benches, and the noble Baroness, Lady Young of Hornsey, on the Cross Benches. Recently, we have enjoyed the very substantial support of the Labour Party, which now officially endorses the campaign. I am delighted to share this amendment with the noble Lord, Lord Kennedy.

Hitherto, our support for the extension of the franchise has been based on personal experience of the growing maturity of this age group, their increased responsibility and the acknowledged fact that their citizenship course should lead inexorably to voter registration as they become adult citizens and then to participation in the democratic process. There is good reason to think that young people are more likely to register to vote, and start a lifetime of actually voting, if they are still in the home environment. Once they leave, usually at about the age of 18 for further education of all sorts or employment, they become much more elusive. All the other distractions kick in and their involvement in the life of their home area weakens or ceases altogether. The 18-plus age group all too often disappear off the electoral scene, and once gone many never return.

We would be the first to admit that this used to be based on theory and subjective judgment. However, since September last year, we have had hard empirical evidence from Scotland of the readiness among young people to take on this vital civic function. The huge success of the extension of the vote to 16 and 17 year- olds in the referendum, as negotiated by my right honourable friend Michael Moore but agreed to by the whole coalition government Cabinet, was thought by some to be a step too far.

But consider the facts. First, there was a remarkable response in terms of registration—no signs of disinterest there. Secondly, the level of debate, as noted by all observers including Members of your Lordships’ House, was lively, intelligent and very well informed. Thirdly, the turnout on the day of the poll was excellent, with 75% casting their vote, which far outweighed that of the 18 to 24 year-old cohort, which managed only 54%. That demonstrates the point that I was making earlier. Fourthly, and contrary to the hopes of Mr Alex Salmond, the majority of those in that younger age group supported the Better Together case, displaying more maturity and resilience to the blandishments of the separatists than many of their elders—notably, middle-aged men. In summary, the new young voters proved themselves to be better informed, more conscientious and even more mature than many of their elders—they blew to smithereens all the misgivings and dire warnings of the doomsayers.

As a result, in the debates on the Wales Bill in your Lordships’ House last autumn, I successfully argued that a similar referendum in the Principality could not rationally and in justice exclude this age group. My understanding is that all parties in the Welsh Assembly have now decided to include them.

I will quote the views of the leaders of the parties in the Holyrood Parliament. Since the referendum in Scotland, that Parliament voted on 18 June this year to extend the franchise consistently both for the Scottish Parliament itself and for all local elections north of the border. All the parties, including the Conservatives, whose leader has been an enthusiast for this reform, voted unanimously for the change. That prominent Conservative, Ruth Davidson MSP, argued this persuasively in a recent interview in the Guardian:

“I’m happy to hold my hands up and say I changed my mind. I’m a fully paid-up member of the ‘votes at 16’ club now for every election. I thought 16- and 17-year-olds were fantastic during the referendum campaign. I can’t tell you the number of hustings and public meetings I did, and some of the younger members of the audience were the most informed. You know, there is nothing more terrifying for somebody up on the stage who is trotting off the latest IMF figures to have somebody in the front row with a smartphone googling your answers to make sure that you’ve got it exactly right. That happened, and that is terrifying, let me tell you”.

She spoke at a BBC event for youth voters and said, about that:

“There were eight and a half thousand kids there asking questions about the Barnett formula! It was phenomenal. It was truly, truly impressive”.

Then she was asked by the Guardian interviewer if she had told the Prime Minister that he is wrong about the franchise. She said:

“Absolutely, absolutely. I’ve spoken to the prime minister about it. He’s not convinced, but I continue to work on him”.

I hope there will be Members on the Government Benches this evening who will also be prepared to work on the Prime Minister to recognise the facts of life as demonstrated north of the border.

All parties in Holyrood have now, as I say, had direct experience of this extension of the franchise, this inclusion of this age group, and it is clearly both rational and right. At the end of my speech on this issue in Committee, I posed two simple questions for members of your Lordships’ House who might still remain resistant to this logical change. I suggested that they ask themselves, first:

“What evidence have they that the young people in this specific age group in England and Wales are less mature, less responsible and less well informed than their compatriots in Scotland? Secondly, if this is truly a United Kingdom, how can they justify discrimination in such an absolutely crucial matter as the electoral franchise, which will exclude young people south of the border?”.—[Hansard, 29/6/15; col. 1918.]

The electoral register is surely the foundation stone of our representative democracy. We should not knowingly countenance variations of this order in different parts of the country. In the subsequent debate, and indeed in the days since, not one Member of your Lordships’ House has even attempted to answer those questions; nor has anyone else, to my knowledge. The half-hearted objection that this Bill is not the appropriate place to achieve this reform simply does not stand up to scrutiny. The Long Title of the Bill includes the following statement:

“to make provision about local authority governance; and for connected purposes”.

As the Public Bill Office correctly advised us, here it is, this amendment, on the Marshalled List. Nothing could be more relevant to local authority governance than the franchise on which its governors are elected. I beg to move.

Photo of The Earl of Listowel The Earl of Listowel Crossbench

My Lords, I oppose this amendment, but in doing so I must apologise to the House because I was slightly delayed at the start. We went through the previous grouping very quickly and, with the permission of the House, I would like to intervene at this point.

I opposed this move the last time that it was raised by the noble Lord, Lord Tyler, on the then Wales Bill. Immediately I learned that moves of this kind were in the Labour manifesto I sought to speak with Labour’s representative on youth. I feel very concerned about this matter although it is encouraging to hear what the noble Lord says about the experience in Scotland, and I look forward to studying the outcome. The aims are utterly laudable considering that young people in this country more and more will be carrying the burden of our pensions and of healthcare of the elderly. Listening to their voices is very important indeed, and of course we should always seek as far as possible to listen to the feelings and wishes of young people. The trouble is that, with respect, I do not think this is the right way to do it.

I am very interested in adolescents. I have worked with them and much of my life has been spent thinking about the issue of adolescence, speaking with professionals and reading the theoretical material around it. It is really important to think about adolescence in this context. “Adolescence” comes from the Latin root “to grow up”. It is a huge change in young people’s lives. One looks, for instance, at Anna Freud and her work in the 1960s on adolescence. She of course set up the Hampstead nurseries at the end of the Second World War to provide for children separated from their parents, and the Anna Freud Centre is named after her. She was a great expert in this area. She highlighted the fact that huge physical changes take place in adolescence, that huge sexual changes take place, and that issues around aggression and how young people manage aggression manifest themselves. It really seems unfair to ask so much of young people when they are going through all these changes. She also highlighted the way that one week they will be studious, perhaps—thoughtful, intellectual—and then the next week can go to the other extreme, to the opposite sort of behaviour. They of course also very much reject their parents as they go through adolescence and often take extremely opposite views from those of their parents.

These young people are going through a very interesting time, and of course they are rather suggestible, particularly with the use of the internet now. It is easy to access them, so politicians who wish to and are unscrupulous can quite easily manipulate these young people. We have seen the ease of manipulating such young people through the process of grooming young people for sexual exploitation and by Islamic State. These young people may manifest themselves as quite intellectual at times, but they change very suddenly to a different point of view. They are not very stable because of their growing period.

I feel very concerned about this, and I hope your Lordships will reject this amendment. I look forward to the House’s response.

G

The Earl of Listowel talks of the young people in this country more and more will be carrying the burden of our pensions and of healthcare of the elderly.
Yes and do they know or are they told that when their time comes for retirement that they will not have a free choice of where they can retire with a fully indexed state pension ? I doubt it as so many currently frozen pensioners were not told as Governments past and present condone this discriminative and unjustified, undemocratic policy.

Submitted by George Morley

Photo of Lord Heseltine Lord Heseltine Conservative

My Lords, this is a highly controversial subject. There are many opinions on both sides of the House, and I have no doubt that the issue will be returned to time and again. Perhaps, however, your Lordships will agree with me that this Bill is the implementation of a manifesto commitment by the elected Government to devolve power from the Whitehall departments to combinations of local authorities. It is not about changing the electoral system. There was no reference in the manifesto associated with this commitment to changing the electoral system. Although as a Member of another place I was probably guilty on many occasions of abusing the full interpretation of the law in order to advocate petty or personal views that I held, I cannot believe that your Lordships are going to agree to add little bits—like trinkets on a Christmas tree—that suit our own particular ambitions but actually are not the intention of the Bill.

If the noble Lord were to talk about the need to change this, there is a proper place for that to happen, and that is for the Government to launch a wide basis of consultation. I think it would be appropriate for that to start in another place, which after all reflects the elected democracy of this country, and it would not be appropriate for this House to try to impose on another place a suggestion of that sort. I do not enter into the merits of the case. I merely suggest to your Lordships that we are here with a very specific task: the implementation of a manifesto commitment, which we should execute with dispatch.

On that basis, having heard all the eloquence that the noble Lord brings to this cause and to many others, I hope very much that he will feel he has served the purpose that he had in mind and not seek to change the electoral arrangements under the guise of devolving power to local authorities.

Photo of Lord Knight of Weymouth Lord Knight of Weymouth Labour 6:30 pm, 15th July 2015

My Lords, with all due respect to the noble Lord, who quite rightly commands huge respect across the House, I have to disagree with him on this matter. This Bill is an exciting Bill, in terms re-forging local government and opportunities around it. Extending the vote to 16 and 17 year-olds was debated and in principle agreed in respect of the Scottish referendum. The UK Youth Parliament consistently argues that we should extend the franchise to 16 and 17 year-olds. Yesterday, we heard in the other place the excellent maiden speech of the newly elected Member, Mhairi Black, who is but 20 years old. I have no doubt that, three years ago, she would have been well able to exercise her franchise responsibly. I have no doubt either, having worked with members of the Youth Parliament when I was in government, that 16 and 17 year-olds would do so, too. I say with due respect to the noble Earl that I understand that people mature at different rates, but I also understand that 18, 19, 30 and 40 year-olds mature at different rates. We really should be doing this. The issue was debated in respect of Scotland and we should now extend it to England.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, it was indeed debated in the case of Scotland, but without any consensus in this House. I support strongly what my noble friend Lord Heseltine, said: that this is not the Bill to tack it on to, nor is it for us in this House, with a Bill beginning in this House, to send it to another place with this stipulation in it. The noble Lord, Lord Tyler, and I have crossed swords on many occasions on this issue, so what I am saying will be of no surprise to him. He knows that I respect his point of view; he knows that I fundamentally disagree with it.

This is my first my intervention on this Bill, and I apologise for that, but this is not the time and this is not the place. I completely concede the one powerful aspect of the argument of the noble Lord, Lord Tyler, and he knows that, because, when we were first confronted with the idea of votes for 16 year-olds in the Scottish referendum, I was one of the first in your Lordships’ House to argue that it should not have been agreed and conceded by the Prime Minister. I believe that it was changing the constitution in a very difficult way and creating a precedent which it would be difficult to resist. However, as the noble Lord knows only too well, we have not had a wide-ranging debate on this issue and my noble friend Lord Heseltine is entirely correct in suggesting that there should be some form of inquiry, commission or whatever to look at the whole issue of the franchise.

I believe that it is illogical in a country where it is not legal to drive a motor car, to consume alcohol or to smoke cigarettes at the age of 16 for young people to have the vote. I also believe that there is some danger in giving the vote to those who still have, in most cases, two years of full-time education ahead of them. There is all the difference in the world between a sixth-former who is to some degree under the influence of a school teacher, and a young undergraduate who has left school and is beginning to enter the wide world. Therefore, whenever this debate is rehearsed in your Lordships’ House or any other place, I will take a lot of convincing—and I doubt that I will be convinced—that we should make this change.

In the past couple of years we have made constitutional changes without linking them up. We had the ridiculous business earlier this year, in the last Parliament, where certain things had to be settled by St Andrew’s Day and other things by St David’s Day. Artificial deadlines were set up, and there was no cohesive argument or proper plan. Now we are falling into the same danger again if we seek to insert this measure in a Bill which has not yet been to the other place. The other place, if it wishes to insert an amendment to this effect, is the right place to do so. We are not, and I hope that the amendment will be resisted this evening and that we will have at some stage in the not-too-distant future a proper opportunity to examine the franchise and whether or how it should be widened. I have my own views—

I believe that we should have compulsory registration; I even believe that there is a case for compulsory voting; and I believe passionately, as your Lordships know because I have spoken about it many times, in citizenship education—but things must be done logically and sensibly. Although I would never accuse my friend, the noble Lord, Lord Tyler, of not being sensible, I honestly do not believe that he is doing this House or the constitution in general a service if he presses this amendment tonight. If he chooses to do so, I shall certainly vote against it.

Photo of Lord Quirk Lord Quirk Crossbench

My Lords, the noble Lord, Lord Tyler, has done his cause, this House and this Bill a service. I would be very sympathetic to the idea of lowering the participation age in elections, which is an issue that has worried us all for many years ever since 16 became the age for marrying et cetera. However, I also agree that the place to start such a move is not in this House. It may well be in the Bill, and now that the noble Lord has very kindly brought this matter to Parliament’s attention in this way, I feel sure that the people down the corridor will take the hint and, if they are so minded, can introduce the measure, knowing full well that there will be a sympathetic reception to such an amendment when it comes back here.

Photo of Lord Brooke of Sutton Mandeville Lord Brooke of Sutton Mandeville Conservative

My Lords, I rise expressing extreme sympathy for the enthusiasm which it is possible to develop for politics at a very early age but which does not lead me to be in support of the amendment. I was one year old at the general election of 1935. I therefore had to wait until 1945, when there was a further general election. Two and a half Members of Parliament for the Labour Party have played first-class cricket and one hundred and twenty-six and a half have played first-class cricket and represented parliamentary seats in the Conservative interest. The half was Aidan Crawley. I was at a prep school in Buckinghamshire where he was the Labour candidate. It was a matter of total astonishment to me at the age of 11—admittedly, there had been no elections between 1935 and 1945—that somebody who had played first-class cricket for Oxford and for his county, Kent, could espouse the Labour cause.

It was the case by then that my late noble kinsman had won the first by-election after Munich and therefore I had lived with a Member of Parliament in the Conservative interest for the previous seven years. We arrived late at the count in 1945 in Lewisham West, where my late noble kinsman was the Member of Parliament defending the seat. His seat had been announced. It is a seat which has generally gone with the Government of the country, a fact which was further proved by the late Chris Price, whom a number of people in your Lordships’ House will have been very fond of. He told me that he was absolutely sure that the reason why he was elected for Lewisham West as a Labour candidate was the coincidence that the Tory who had won the seat back in 1951 was a Mr Henry Price and that the people of Lewisham West assumed that Chris was his son.

The thing that had the most powerful effect on me in the 1945 count occurred in Lewisham East, where Herbert Morrison retained the seat. The independent candidate—a man called Russell—had been put in prison by Morrison in 1941 and had remained there until 1945, when he was released and decided that he would get his revenge on the Home Secretary by standing against him. He got the best part of 1,000 votes and gave what was, without question, the longest speech of thanks to a returning officer that I have ever heard; Mr Russell spoke for 25 minutes, explaining why he disapproved of Mr Morrison.

In the years immediately after 1945, my late noble relative stood as the Conservative candidate in a by-election in Kilburn. She won the seat by 300 votes and held it again at the next council elections. I have, I think, every ground for thinking that she is the last Conservative councillor to represent Kilburn in all the years since. In 1949, in an era when there had been no Conservative—

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Liberal Democrat Shadow Attorney General

This sounds like an innings by Mr Geoffrey Boycott. I wonder if the noble Lord could get to the point of the amendment.

Photo of Lord Brooke of Sutton Mandeville Lord Brooke of Sutton Mandeville Conservative

The noble Lord’s intervention is most gracious; if he will forgive me, I am coming towards that end. Between 1945 and 1950, no by-elections were won by the Opposition party, yet in the LCC elections in 1949, my late noble kinsman led the Conservative Party to an absolute dead-heat—that was the first sign that there was a change in the politics of the country. I acknowledge what the noble Lord, Lord Thomas of Gresford, has just said and I will fast-forward as much as I can.

I followed the referendum in Scotland with the keenest interest and I totally understand why it constitutes a large part of the argument about this change. However, there were factors in that referendum that greatly raised the temperature and enthusiasm of people. In the years since I entered your Lordships’ House, the previous Labour Government insisted on changing the arrangements for election after election on the grounds that the number of people who were voting was going down, but they never succeeded in reversing the situation as a result of the steps that they took—there was diminishing enthusiasm.

I have, myself, been subjected to some evidence. A young man, a boy, who sits in a youth parliament locally—I live in rural Wiltshire—sought to enlist me in the cause of the noble Lord, Lord Tyler, not directly but on the same principle. I was happy to enter into correspondence with him and to engage in argument and discussion, but I said to him that, before the conversation went any further, he had to explain why there seemed to be no shift at all in voting patterns between the ages of 18 and 35 and, if that was so, why I should support him on voting at 16. It is on those grounds that I am opposed to this amendment being carried at this stage.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Labour

My Lords, this amendment was previously debated in Your Lordships’ House in Committee. I and my noble friend Lord McKenzie of Luton were delighted to add our names in support of it and we do so again today. It is of course the policy of not only the Labour Party—and now the Liberal Democrats—but of the Scottish National Party and, I believe, the Green Party and Plaid Cymru. It is also, as was referred to earlier, the policy of the Scottish Conservative Party, whose leader Ruth Davidson MSP is on record as saying that she is a fully paid-up member of the “votes at 16” club. Why would the leader of the Scottish Conservative Party support votes at 16? I suspect the answer is the experience of young people aged 16 and 17 who voted in the referendum and the 75% turnout in that group, which the noble Lord, Lord Tyler, referred to.

The Minister should therefore speak to her colleagues in the Scottish Parliament and hear first hand why they are convinced that this is the right thing to do and have, with all other parties in that Parliament, voted to give young people aged 16 and 17 the right to vote in local and Scottish Parliament elections. Young people in Scotland took up their new responsibility with pride and a real sense of civic duty—they have shown that it was the right thing to do. We should extend this to allow other young people to vote at the age of 16 to elect local councillors across the whole of the UK.

What is also important, however, is proper citizenship education. What is offered at present is not really up to scratch and needs to be improved. The noble Lord, Lord Cormack, is a great supporter of that and on that much we are agreed—although I know he is not with me tonight on allowing 16 and 17 year-olds to vote. There is no fixed age for people to take part in a whole range of things. At present, at 16 you can consent to medical treatment, join a trade union, pay tax, consent to sexual relationships, change your name by deed poll, join the Armed Forces, be a company director, and get married, albeit with parental consent.

The reasons for opposing this amendment have been heard before—when, for example, the Labour Government chose to reduce the age from 21 to 18. I have enormous respect for the noble Earl, Lord Listowel, and the noble Lord, Lord Heseltine, but I do not agree with their remarks this evening. If you look back in history, Lord Curzon said in 1912, when talking about votes for women, that women did not have the experience to be able to vote. Looking further back to the debates on the 1832 Reform Act, landowners said that only people who had an interest in land should be allowed to vote. Today, in 2015, those statements are seen as quite ridiculous. To deny young people the vote will, in future years I am sure, also be seen as ridiculous. You can of course vote at 16 in three of the nearest Crown dependencies to the United Kingdom: the Isle of Man, the Bailiwick of Jersey and the Bailiwick of Guernsey. You can also vote at 16 in elections in Norway, Germany and Austria.

In Committee, I gave the shocking figures for the number of attainers registered to vote. I referred to the fact that we have seen a 45% drop, which is nothing short of catastrophic. Both parties in the previous Government should be ashamed of what has happened. I asked the Minister about it in our previous exchange and she said that she had not actually read the Electoral Commission report but was equally concerned about the point I had raised. Has she now read the report and what action will she be taking to deal with this appalling state of affairs? If we were looking at another country, I am sure the Government would be saying that it was a terrible state of affairs and that it should sort it out. The Minister might also have seen the briefing from the Electoral Commission. It says very little and has, again, come out at all too short notice. Can she speak to her friend Gary Streeter, who answers questions about these issues for the Speaker’s Committee? Again and again, the Electoral Commission issues responses on these matters on the day of the debate or the night before. If they are to be meaningful, they need to come out much sooner.

I say to the noble Lord, Lord Brooke of Sutton Mandeville, that I have never played first-class cricket but I am a strong supporter of Surrey County Cricket Club—I wear my club tie with pride tonight—and I have attended its matches at the Oval many times. I am also a proud supporter of the Labour cause.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government 6:45 pm, 15th July 2015

My Lords, Amendment 73 would have the effect of lowering the voting age for local government elections in England and Wales from 18 to 16. There is no doubt that the Scottish referendum debate was unique in the way that it engaged the public and secured the participation of 16 and 17 year- olds in a way that we have not seen before—I absolutely acknowledge that, as well as the other factors that may have engaged the people of Scotland.

It is clear that lowering the voting age to 16 for local elections in England and Wales is a major change to the fundamental building blocks of the country’s democracy. The starting point for making such change would seem to be that those democratically elected to represent the people of this country consider all the issues involved, seek the views of those they represent, and seek to recognise where public opinion stands on the issue and what would maintain confidence in ensuring that the elections are free and fair and give genuine voice to the people. They discuss the issues and, having carefully weighed the argument and recognised where consensus and opinion lie across the country, decide whether or not to make the change.

This should be the approach to deciding whether to make fundamental changes to our election systems. It is entirely consistent with this approach for the Scottish Parliament to decide that the voting age for local government elections in Scotland, and there the Parliament has now decided to reduce the voting age to 16.

It is clearly right for Parliament to consider whether there should be a change to the franchise for local government elections in England. However, noble Lords may wish to reflect on whether it is appropriate that such a fundamental electoral change should be instigated in your Lordships’ House—an unelected Chamber—rather than in the other place. Whatever the quality of the many and varied discussions we have had today, we can all agree that, although the quality of our debate is high, we have necessarily not had the wide-ranging consideration which can happen only following a debate across the country and after hearing the views of many on the issue. In short, whatever merits there may be in making this change to the franchise for local elections, today is not the time and this Bill is not the vehicle.

As to its merit, noble Lords will know that the Government have no plans to lower the minimum voting age. In most democracies, including most of the EU member states, the voting age is also 18. In the EU, only Austria allows voting for 16 year-olds. The age of 18—not 16—is widely recognised as the age at which one becomes an adult and gains full citizenship rights. In 2014, the Select Committee which conducted an inquiry into lowering the voting age to 16 noted in its report that the available evidence suggests that the public are in general satisfied with the voting age as it is.

The noble Earl, Lord Listowel, spoke about the broader issue of the transition from childhood to adulthood, which deserves fuller consideration than as an adjunct to the Bill. He talked about the vulnerabilities, in many ways, of 16 and 17 year-olds to various external influences.

I shall refer to comments made by noble Lords in this House on that point. In the Legal Aid, Sentencing and Punishment of Offenders Bill 2012, the noble Lord, Lord Beecham, said:

“My Lords, given the time, happily this is a short amendment. The Police and Criminal Evidence Act 1984 established that people under the age of 17 years are to be treated as children and therefore have to be questioned or interviewed in the presence of an appropriate adult, but people of 17 years of age and up to 18 are not treated in the same way. The Government have dealt with what has been an anomaly about treating 17 year-olds as adults for the purposes of bail, and that has now been changed to lift the age to 18. It would seem to be consonant with that approach if the appropriate adult provision was also extended from 17 years of age to 18. This is a straightforward matter”.—[Hansard, 15/2/12; col. 882.]

During proceedings on the, Criminal Justice and Courts Act 2015, noble Lords opposite recognised that:

“Anyone who is the parent of a teenager or whose children were recently teenagers knows that at that age a person is on the cusp of adulthood. They are moving out of childhood and into adulthood. It is often a very difficult stage where young people appear to be very mature and yet at the same time they are childlike and vulnerable”.—[Hansard, 23/7/14; col. 1201.]

That was said by the noble Baroness, Lady Kennedy of The Shaws.

The noble Lord, Lord Tyler, talked about discriminating against 16 and 17 year-olds. Deciding whether or not to give the vote to 16 and 17 year-olds is not a question of removing some inappropriate discrimination; it is about what is appropriate for 16 and 17 year-olds, who are at the point of moving out of childhood and approaching adulthood. Many things are not appropriate for people at that point in their lives. They cannot marry without parental consent, as the noble Lord, Lord Kennedy, said; they are treated in special ways in various aspects of the criminal justice system; and they cannot join the Army without parental consent.

For the reasons I have set out we cannot support the amendment and I hope that the noble Lord will agree to withdraw it for two reasons only: first, this is not the Bill to decide a huge issue such as this; and, secondly, we are an unelected Chamber and it is not for us to propose a change in the franchise.

Photo of Lord Tyler Lord Tyler Liberal Democrat Lords Spokesperson (Constitutional and Political Reform)

My Lords, the noble Baroness’s last remark has really irritated me because I have worked hard to prevent the views of the House being treated as not significant simply because, at the moment, we are unelected. I have worked hard to achieve some election. Indeed, if there had been slightly different circumstances in 2012, the previous Government’s Bill would have been sorting out this issue by now.

In the mean time, I am extremely grateful to colleagues on all sides of the House for the serious way in which they have approached this issue. I am particularly grateful to the noble Earl, Lord Listowel, because he went to the heart of the matter. I can reassure him that in Scotland this issue was treated seriously; the debate was very thoughtful, and when the Scottish Parliament came back after the referendum they recognised that young people had taken the issue seriously. Given his experience, I hope he will agree that it is a fact of life that if you give people responsibility they will become more responsible. Anyone in your Lordships’ House who thinks that suddenly we are going to be swamped with huge numbers of irresponsible, immature 16 and 17 year-olds who will swing elections should worry about older people. I am 73 and I do not pretend that I am always entirely logical on all issues.

Photo of Lord Cormack Lord Cormack Conservative

The noble Lord believes very strongly in elections—he said that again a few moments ago. If this Bill had followed the normal course and had come to us from another place, and the other place had not inserted an amendment on votes for 16 year-olds, would he think it appropriate to do so?

Photo of Lord Tyler Lord Tyler Liberal Democrat Lords Spokesperson (Constitutional and Political Reform)

I would. As the noble Lord constantly reminds us, we have a particular responsibility to think carefully about the way in which our constitution should operate. I entirely agree with what he said during his speech that what happened in Scotland is a precedent that is difficult to resist. I agree with him; I think that is absolutely true.

I say to the noble Lord, Lord Quirk, that it is precisely because we are in a position with this Bill to encourage the other place to think about it that the best way to do that is to pass the amendment. That is what Parliament is all about, a conversation between the two Houses.

I do not accept that the Bill is an inappropriate vehicle for thinking hard about the foundation stone of our democracy. As the noble Lord, Lord Heseltine, has said on many occasions throughout the Bill, this is an exciting moment in which to revive local democracy. What better way to do that than to explain to young people that the future of their local communities is at the centre of this proposal? As I said earlier, the Bill specifically refers to the governance of local authorities—and therefore this would be appropriate.

We have had an interesting debate but, at the end of it, no Member of your Lordships’ House has sought to answer the two questions that I posed in moving the amendment. I believe that the young people of England and Wales are just as mature, responsible, well informed and ready to take on some of the responsibilities of adult citizenship as the young people of Scotland. It has been proved in Scotland and all parties in Scotland have now accepted that it has been proved. It is time for us to catch up with them and demonstrate to the young people of England and Wales that we have confidence in them, too. Therefore I wish to test the opinion of the House.

Division on Amendment 73

Contents 221; Not-Contents 154.

Amendment 73 agreed.

Division number 1 Cities and Local Government Devolution Bill [HL] — Report (2nd Day)

Aye: 219 Members of the House of Lords

No: 152 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendment 74

Moved by Baroness Janke

74: After Clause 10, insert the following new Clause—

“Referendums to undo change to mayor and cabinet executive

In the Local Government Act 2000, omit section 9NA (effect of section 9N order).”

Photo of Baroness Janke Baroness Janke Liberal Democrat 7:12 pm, 15th July 2015

My Lords, I ask the House to correct a great injustice in the city of Bristol. In 2012, there was a referendum in which 12 cities voted on whether they wanted an elected mayor. Bristol was the only city to vote yes. As a result, it has to ask the permission of Parliament to vary or change its system of governance. Many people in Bristol may still support an elected mayor but many are saying that they should have the rights of every citizen in every other city of England; namely, that they should have the right to collect a petition, have another referendum and vary their system of government if they so wish. At the moment, that is not the case.

Section 9NA was added to the Local Government Act. It states that, in the case of a referendum being conducted by order, only cities that reject the referendum may still vary their system of governance. This amendment seeks to omit Section 9NA from the Act. It is a great irony that we have before us a Bill which many have said is exciting, and promises new horizons and greater involvement for local people, as well as responsibility, as we have just seen in the vote on the voting age. Yet, one city and its nearly 500,000 citizens do not have the right to reject a system of governance that they find no longer suits them.

I hope noble Lords will agree that this democratic deficit cannot be allowed to prevail. If the new Bill is to go forward and to become an Act, and we are to give greater powers, greater freedoms and greater responsibilities to combined authorities throughout the country, we must correct this anomaly today. I ask for, and hope I will get, support from Members on other Benches. I beg to move.

Photo of Lord Heseltine Lord Heseltine Conservative 7:15 pm, 15th July 2015

My Lords, we touched on this subject in Committee. I hope very much that your Lordships will reject this proposal. In this House, it is universally agreed that we are shifting power on a massive scale to local authorities in whatever form they decide to combine. It is important, urgent and economically of great significance. The idea that we should be trying to reintroduce a system whereby the moment someone becomes unpopular as a mayor, the whole focus of attention in the city or conurbation over which they have been elected should be subject to people going around with petitions saying, “Can we have a new system of government?”, is about the most undermining thing one could do to the strength of the authorities that we are trying to create.

One could expand on the arguments but the House has been sitting for a considerable time. The simple argument is that we want to devolve serious power to elected people who have the certainty of a period in power in which to carry out their responsibilities. I have never seen a Government take the difficult decisions that have to be taken, often in circumstances not of their making—there could be an economic downturn or whatever—without the elected leaders, Government or council not being at some stage very unpopular. That does not mean that they are wrong; it means that they are sometimes doing a difficult job that is often long overdue. To accept this amendment would be to create a degree of instability and uncertainty, which is precisely the sort of thing that we are trying, in this legislation, to get rid of. I hope your Lordships will reject the amendment

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

My Lords, the noble Lord, Lord Heseltine, was part of a Government which did not merely effect a change in personnel; they abolished a whole range of councils without any local choice in the matter at all. I am afraid that one must take his criticisms of this amendment with that background in mind. The Government’s current proposals effectively impose, as it were, a life sentence on the form of governance of combined authorities. That does not apply to the mayoralty in other authorities.

Your Lordships will recall that several councils whose people chose to have an elected mayor have, in light of the experience, changed their minds and, perfectly properly and democratically, decided that that should no longer be the case. It seems quite invidious that when councils were compelled to have a referendum—not by local demand but by the Government—they are stuck with that choice for evermore. The noble Baroness has adduced a perfectly consistent, logical argument and we on these Benches will support her should she choose to divide the House.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, this amendment seeks to remove Section 9NA of the Local Government Act 2000, which currently provides that, where a council has been required to hold a mayoral referendum under an order made by the Secretary of State, and where that referendum has been successful and a mayor duly elected, the mayoral model of governance cannot subsequently be changed except by a further Act of Parliament.

I recognise the strength of feeling that the noble Baroness, Lady Janke, brings to this debate and her view—I do not know whether it is the view of the people of Bristol—that the people of Bristol should have the opportunity to hold a governance petition for a referendum on a change to their governance arrangements. In summary, if I have understood the noble Baroness’s arguments, she would like the people of Bristol to be in the same position as they would have been in if they had, in 2011, had a petition for a mayoral referendum, and in the resulting referendum in 2012 had voted to have a mayor.

Were this to be the situation, I accept that the people of Bristol could petition for and hold a further referendum at any time from May 2022 on whether to switch from a mayoral form of governance to some other form of governance. The people of Bristol are not in that situation. The situation in Bristol is that Parliament agreed that there should be a referendum on whether to have a mayor, and the people of Bristol voted to have one. Accordingly, as noble Lords will have heard me say in Committee, I cannot accept this amendment on the grounds of both precedent and principle.

I have spoken previously about the precedent established by the arrangements put in place for establishing the London mayoralty, whereby Parliament instigated a referendum through enacting primary legislation and the electors subsequently voted for a mayor. The arrangements were then put in place by a further Act of Parliament. There is no provision in these arrangements for the people of London to vote that they no longer want a mayor.

I have also spoken about the position in Bristol, where Parliament instigated a mayoral referendum under the Local Government Act 2000 through both Houses approving an order establishing a referendum and the people of Bristol then voted for a mayor.

That form of mayoral governance was then established under the Local Government Act 2000. As in the case of the Mayor of London, mayoral governance in Bristol can be changed only by a further Act of Parliament. The amendment before us would mean that the electors of Bristol could, if they chose, have a referendum following a governance petition, and if they voted to end the mayoral model, it would end.

I have also been quite clear that, in those cases where a mayor has been introduced wholly by local choice, it is right that wholly local choice should be able to end the mayoral governance. However, in the case of Bristol, a change of governance should be by both local choice and some decision of Parliament specifically related to Bristol.

Following our previous discussions, I have been considering what further options there could be for properly involving both Parliament and the people of Bristol in such a decision. I do not believe the noble Baroness’s amendment would properly involve Parliament in a decision about Bristol. However, the Bill provides a means for Parliament to be involved in various ways with specific places in the course of implementing a devolution deal.

Clause 10 provides that, with the consent of the councils involved, regulations can be made that modify an application in particular cases of the provisions of Part 1A of the Local Government Act 2000. Among other things, this makes provision about mayors, including provisions about mayors in Bristol’s situation. As we have discussed during the passage of the Bill, any regulations under Clause 10 powers need to be approved by a resolution of both Houses of Parliament, and the intention is to make such regulations where this is necessary to implement an agreed devolution deal.

Accordingly, as part of an agreed devolution deal with Bristol, through its approval of Clause 10 regulations —which would provide the opportunity not afforded by this debate for full consideration of the issues for Bristol—Parliament could indicate its willingness to see the electors of Bristol have a choice through a referendum to end, if they wished, the Bristol mayoralty. Having said this, it is, of course, entirely a matter for the councils involved in any such deal to decide what powers they wish to be devolved to them and what changes in governance arrangements they wish to propose. While the Government are ready to have conversations with any area about any proposals, I cannot prejudge what the outcome might be in a particular case. On that note, I hope noble Lords will be prepared to withdraw their amendment.

Photo of Baroness Janke Baroness Janke Liberal Democrat

My Lords, I thank the Minister—I meant to thank her initially—for her time spent discussing the amendment with me. I would like to put that on record.

The noble Lord, Lord Heseltine, mentioned that, when something becomes unpopular, people suddenly want to put an end to it and this threatens all sort of things. This is not the case. We have had plenty of unpopular decisions in our city which have not necessarily ended up changing the system of governance. In fact, several attempts by the local paper to introduce a mayor failed dismally. It was only after Ministers came to Bristol, marketed the concept and made lots of promises that people believed them. If we are really talking about trust, moving forward and giving responsibility, this is a very poor basis on which to do so.

The Minister has already said that this is modelled on and relates to the situation in London. It does not. I have spoken to colleagues in London and the whole situation there was completely different. This is an anomaly. There was no legislation put before Parliament to enable a Bristol mayor. I put to your Lordships that it is entirely disproportionate that one city should have to come to Parliament to change its system of governance. It is out of spirit with the Bill, it is out of spirit with the feeling of the people of the city, and it is entirely undemocratic. On the basis of the arguments I have heard, I should like to test the feeling of the House by putting it to a vote.

Division on Amendment 74

Contents 182; Not-Contents 141.

Amendment 74 agreed.

Division number 2 Cities and Local Government Devolution Bill [HL] — Report (2nd Day)

Aye: 180 Members of the House of Lords

No: 139 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendment 75

Moved by Lord Shipley

75: After Clause 10, insert the following new Clause—

“Governance arrangements of local authorities in England: election of councillors

(1) Section 36 of the Representation of the People Act 1983 (local elections in England and Wales) is amended as follows.

(2) After subsection (1) insert—

“(1A) Rules made by the Secretary of State under subsection (1) must ensure that each vote in the poll at an election shall be a single transferable vote.

(1B) A single transferable vote is a vote—

(a) capable of being given so as to indicate the voter’s order of preference for the candidates for election as members for the constituency; and

(b) capable of being transferred to the next choice when the vote is not needed to give a prior choice the necessary quota of votes or when a prior choice is eliminated from the list of candidates because of a deficiency in the number of votes given for him.””

Photo of Lord Shipley Lord Shipley Liberal Democrat Lords Spokesperson (Communities, Decentralisation and the Northern Powerhouse) 7:35 pm, 15th July 2015

My Lords, earlier today I spoke about the need to ensure accountability in this new layer of local government. I said that one way to increase public confidence in this structure would be to reduce the likelihood of a one-party state being created in a local area. The best way to prevent it is to introduce proportional voting through the single transferable vote for local elections, which Scotland, of course, already has.

Whenever power has been devolved in the UK in recent years, it has been accompanied by a change to a more proportional voting system. I believe, and have said several times during our debates on this Bill, that further devolution of powers will be put at risk if they are not matched by improved legitimacy, accountability and strong scrutiny and governance arrangements.

In Scotland, STV was used for all council elections in 2007 and 2012. There are no longer uncontested seats there and no council is controlled by single parties with huge majorities that do not reflect that party’s share of the vote. In England and Wales, however, there are more than 100 councils where one party commands more than two-thirds of the seats. In Scotland, there is none. Compare that situation with what the Government now propose for this new tier of local government. First past the post elections are what generates the one-party state. With a more proportional voting system, legitimacy, accountability and public confidence in the new structure would be enhanced. Given that multi-party politics is now firmly established in the UK, voters’ wishes at the ballot box need to be translated proportionately into seats at the local government level. I beg to move.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Labour

My Lords, Amendment 75 is not one which we on these Benches can support. I declare an interest as an elected local councillor in the London Borough of Lewisham.

Although this amendment is concerned with elections to local councils in England, I mentioned in Committee that we had a referendum in 2011 on changing the voting system for elections to the House of Commons. That was wholly rejected and I have seen nothing following on from that result, or anything that has happened subsequently, which leads me to believe that the country wants to change the voting system for any elections. I also mentioned that we have got ourselves into a bit of a mess in recent years. We have managed to heap on voters a whole plethora of voting systems and that is not a good thing to do. I accept that, where a proportional system has been chosen, it should remain. However, I would like to see us use fewer systems.

I also referred to the fact that I thought that one of the worst systems was the supplementary vote system. I have observed many counts where people have only put a cross in the second column, which means that their vote is discounted. Therefore, I would like to see a reduction in the number of systems being used, and we certainly cannot support the amendment tonight.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, this amendment is about the voting system for local government elections in England and Wales. Like Amendment 73, it would introduce a fundamental change to these. As I explained in the case of the earlier amendment, we are clear that issues such as this need to be considered in a far wider context than this Bill. Even in terms of timescale, when STV was introduced in Scotland, the review of the 32 local authorities took two years, and clearly in England that would take much longer. Notwithstanding any of the arguments for or against the amendment, as I said in the previous amendment, this is not the Bill to be talking about changes to the franchise. As the noble Lord, Lord Kennedy, pointed out, the people of this country said no to the alternative vote in 2011—I was one of the people who campaigned against it. Again, it is not the place of an unelected House to propose changes like this. Therefore, I ask the noble Lord to withdraw his amendment.

Photo of Lord Shipley Lord Shipley Liberal Democrat Lords Spokesperson (Communities, Decentralisation and the Northern Powerhouse)

My Lords, if it is not the role of your Lordships’ House to scrutinise legislation, it is hard to see on what basis this Bill has started in this House. If your Lordships are not permitted to move amendments or to discuss matters of direct concern about one-party states being created in combined authority areas across a number of parts of England, then I think it is the responsibility of your Lordships’ House to be able to do so.

The noble Lord, Lord Kennedy of Southwark, raised a number of objections. We mentioned Scotland, and the truth is that if it still had a first past the post electoral system in local elections, the Labour Party would have been wiped out in Scotland at that level as well. I do not argue that that is in the interests of our democracy; nor do I argue that it is in the interests of our democracy that there are no Conservative councillors in a number of our northern cities. This is not good for democracy. The only way that you can solve the problem is for someone to take an initiative.

I am reconciled to the fact that the two big parties in this country do not want change, because it suits them not to have change—at least, it does in England and Wales. Actually, however, we have a higher responsibility. We operate now in a world of multi-party politics. It is wrong that votes are not equal and that one-party states can be created through the first past the post electoral system. That is what the Government are perpetuating, and it is entirely appropriate for your Lordships’ House to take a view on that. I wish to test the opinion of the House.

Division on Amendment 75

Contents 71; Not-Contents 222.

Amendment 75 disagreed.

Division number 3 Cities and Local Government Devolution Bill [HL] — Report (2nd Day)

Aye: 69 Members of the House of Lords

No: 220 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendment 75A

Moved by Baroness Hollis of Heigham

75A: After Clause 10, insert the following new Clause—

“Combined authority and local authority functions: report on additional council tax bands

The Secretary of State shall, following consultation with local authorities, lay before each House of Parliament a report on the introduction of additional higher bands of council tax in England for the areas of combined or local

authorities which may assume additional functions under the provisions of this Act, with the number of bands and the tax rate for each band to be specified in regulations which would be made by the Secretary of State.”

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour 7:54 pm, 15th July 2015

My Lords, this is a probing amendment, for obvious reasons, and it has slightly awkward wording to put it into the scope of the Bill, for equally obvious reasons. Quite simply, it asks the Secretary of State to discuss with local authorities and return with a report on the financial impact and desirability of additional council tax bands, perhaps to have two or three above the current band H.

This issue is not going to go away—we are, I think, heading into a perfect storm. Local authorities and combined local authorities are rightly taking on greater functions for economic growth, for which they need enhanced resources. Yet in the past five years, our finances have been cut by some 40% while needs such as social care have grown. Those needs will increase even further when 50p an hour is added to the minimum wage for domiciliary care. That is highly desirable, but how is it to be funded? We need more money in the system.

On Saturday 11 July, the Guardian showed that in 2010 we had some 200,000 houses worth more than £1 million but that, just five years later, the figure is 525,000. The huge price distortion in housing over the past 20 years, with vast capital gains which are neither earned nor taxed, means that there is a widely shared recognition that our council tax bands which are levied on such property take a far higher proportion of lower rather than of higher incomes. The bands are highly compressed; therefore they are regressive and unfair, and therefore they should be modified—which, in turn, would generate more income.

Those bands were devised in the 1991 revaluation for the new council tax which replaced the Tory poll tax. I was among those who worked on that Bill, and we all agreed that we needed to revalue every 10 years or so. The longer you leave revaluation, the more problematic it is—and no Government, including my own, have had the guts to do it. It is precisely because the problem gets worse that no Government will step in to stop it getting even worse than it is. I fear that a full revaluation seems unlikely unless the Bill of the noble Lord, Lord Marlesford, goes for it. However, one quite modest piece of tinkering—adding on extra bands at the top—would be a useful way forward. It would do two things: it would bring in extra income to the local authority, and it would be fairer to individual families. There are 13 streets in London where the average house price is £10 million. No one in this House thinks it right that a property worth £2 million, let alone £10 million or £20 million, should be in the same band as a property with one-third or even 1/10th of its value.

Just to remind ourselves, band D is the fulcrum point of the eight bands. Dwellings in the top band H are rated at three times the bottom band A. The entire width between the bands is 3:1, so if band D is one, band C is eight-ninths of that, band B is seven-ninths and band A is six-ninths. There is a one-ninth drop for every band below D. Above band D, band E is 11/9ths, band F is 13/9ths, band G is 15/9ths and band H is two. Of course the higher bands cover a wider range of property price ranges, but even so, they have a more generous ratio to band D than smaller homes in lower bands. It is not a flat tax but it comes pretty close to one because the top band pays only three times as much as the bottom band, even though the property may be worth 30 times as much. This is profoundly unfair and regressive. We have a 3:1 ratio in our property taxes while the old rating system offered a far greater stretch—something like 20:1, I think—until it was abolished for the poll tax. In some countries, the property tax ratio is nearer to 20:1, and as far as I can tell, we have in this country one of the most compressed sets of local property tax bands in Europe and compared to the USA.

If one driver of this amendment is fairness for hard-pressed families, who need public services more than the wealthy, the second is income for equally hard-pressed local authorities. In the north-east, half of all properties are in band A and only 3% or 4% are in bands F and G, so the levy at band D is usually well above the English average. London and many parts of the south-east are the mirror opposite, with only 3% or 4% of properties in band A and 20% in bands F, G and H, so their band D is much lower still.

What are the implications? The result is that not only do the very affluent in London not pay a fair property tax within London but neither is it fair when compared to authorities outside London. Families in the lowest band A in Nottingham, Hartlepool and Walsall pay around one-fifth more in council tax than the residents of Kensington Palace Gardens, whose properties are valued at more than £40 million apiece. To take another example that the Minister may be familiar with, families in band A properties in Trafford paid almost the same in council tax—£736 —as families in band H properties across Wandsworth and Westminster.

Of course, the heavy lifting should be done by fairer equalisation grants but modifying the bands can contribute to that. However, if the Government will not tackle a full revaluation—and my Government were equally squeamish—I urge them to deal with the most obvious unfairness of the artificially compressed bands at the top and at least do a partial revaluation of top band H. London has around 60,000 band H properties, the south-east 34,000, the east 12,500—which is mainly Cambridge—and the north and the Midlands have a third of that. Stretching the bands at the top would produce greater fairness within each region but would also, of course, allow greater resources for equalisation between regions.

How feasible is fishing band H? It is very feasible. I have consulted several district valuers on this. Every year, local valuers value new property—it is about half their workload—substantially modified existing property, significant environmental changes, such as new roads, and conversions from flat to shop to house. Overall in this country they do about 300,000 to 400,000 valuations a year, depending on the amount of new housebuilding. There are some 132,000 band H properties in England. Revaluing band H properties alone, perhaps over three years, would add about 10% to valuers’ average annual workload, though more in London and less outside. It is about the same as the annual fluctuation now that district valuers have in their workload, which is driven by the rate of housebuilding. It seems to me entirely feasible.

When Wales introduced a new band I as part of its full 2004 revaluation, about one-third of its band H properties moved up. If the same proportion held in Norwich it would be done in a month. Nationally, 50,000 properties might move up one or two bands, bringing in several million pounds to local authorities. If we had the resources to fish band G as well, so much the better. I emphasise again that a less compressed set of bands would allow a fairer redistribution within boroughs as well as greater resources for equalisation across the country.

We did not construct sufficient bands in 1991. We did not anticipate future house price rises. We did not future proof the system as we should have done. Property prices have outgrown the bands but done so unevenly, inconsistently and unfairly. This is a property tax. If those at the very top do not pay their fair share, those in the bottom bands have to pay proportionately more. I beg to move.

Photo of Lord Marlesford Lord Marlesford Conservative 8:00 pm, 15th July 2015

My Lords, the noble Baroness, Lady Hollis, has identified a problem that many of us would recognise. The extremely good system of council tax needs updating. She proposes in her amendment that the Secretary of State commissions an inquiry and produces some proposals. I have to some extent anticipated this because I have produced a scheme for dealing with this problem. The problem is—as the noble Baroness described—that it is not acceptable in today’s world that the most expensive property pays only three times the amount of the humblest and cheapest property. The very fact that there is a differential between band A and band H shows that the principle of taxing according to value is accepted. I say that because I know the views of my noble friend Lord True on property taxes. I am not particularly keen on any taxes but council tax was a very elegant and successful successor to the poll tax, which was a political disaster. I believe that we need to update it in a way that is not unduly retrospective and most of all that does not require the great bureaucracy of a revaluation. Since the old days of the rates people have always worried about the huge task that a revaluation would involve. That is why my proposals are somewhat different.

I start with the table as it is, which is bands A to H. Band A starts at up to £40,000, as was done in the original April 1991 proposals. The highest band H starts at £320,000, which is today a meaningless figure in terms of property values after inflation. I am suggesting that there should be new bands. They would still be called A to H and there would be a greater rate of progression than one to three. I have set this out in my Bill. My Private Member’s Bill has been lucky enough—I came seventh in the ballot out of 42 or 43 Private Members’ Bills—to get a Second Reading date, which is Friday 11 September this year. I hope that some of your Lordships may be kind enough to come to that occasion and to speak on it.

Basically I am proposing that there be a considerably greater rate of progression between band A and band H. Equally, I have set bands that are much more in accordance with today’s values. Band A will go up to

£250,000 instead of £40,000, band B will be £250,000 to £500,000, band C £500,000 to £1 million, band D £1 million to £2 million, band E £2 million to £5 million, band F £5 million to £10 million, band G £10 million to £20 million and band H will be more than £20 million. These valuations are relevant to today’s prices.

Originally the Government put a rate of six for band A. They did this for arithmetical reasons so as not to have fractions. They made band H 18—three times band A. I also start band A at six and therefore under my scheme there will be no change in the tax paid from the present time up to the value of £250,000. Thereafter I go up to eight instead of seven. That is a 33% increase for properties between £250,000 and £500,000 as opposed to a 17% increase. In other words, taking it nationally, band A—give or take £100 —is £1,000 a year. So band A is currently £1,000 and band H is currently £3,000, give or take a differential for different local authorities.

So I would be having about £1,300 as opposed to about £1,200 for my band B. But when it gets up to the higher figures and the top level—say band G, where it is £10 million—there would be a considerably greater progression. Instead of being only 2.5 times, it would be 16.7 times. And when it gets to the astronomical figures, even by today’s values, of £20 million, band H would be 42 times as much as band A. So band A would still pay £1,000 and band B would be paying £1,300; it would then go up progressively, but more rapidly as it gets higher. For example, for band F, which is £5 million to £10 million, it would be eight times—and then it goes up to 16 times followed by 42 times. So there is a considerable progression at the top.

The great thing about my idea is that, instead of having a valuation, you take the values or the actual prices paid for the properties. All the properties are on the land registry, which came into full operation on 1 April 2000. It will apply to half of all the dwellings in England, using the actual values paid—and I should amend the Bill so that it applies only to England and not to Scotland and Wales. The other properties will migrate to the new system as and when they change hands. So there would be two bands operating side by side; there will be the present bands A to H which go up three times and the new bands A to H which go up 42 times.

Nobody will be on the new bands unless that is the known price that they have paid. Even if it is a very expensive house, it is very unlikely that back in 2000 it would have been anything like as expensive, so there is a natural evening out so that it does not appear vigorous and savage when first introduced. The other properties will migrate as and when they change hands, whether that is by sale, gift, inheritance or anything else.

It is a neat system, because it would require no valuations at all. I think that it would come into force in a way that people would find fair and acceptable. We have to do something, and this is my suggestion for something.

Photo of Lord True Lord True Conservative

My Lords, I was referred to by my noble friend and although I was not going to speak on this amendment—I have made only one speech in the course of this Bill—I was provoked to speak by what was said by the noble Baroness opposite. I am afraid that I am not going to follow my noble friend in trailing a great speech on 11 September, but I look forward to participating in that debate. I think that he is too wise an old bird to assume that he really knows everything about the council tax—but, if he wants to hear it, I shall be there on 11 September.

I was provoked by the noble Baroness opposite, who was quite open in what she said—that she wants more money and more tax. She said, “We need more income”. It was cloaked in the marvellous language of equity, but it was actually the true language of the party opposite. Does my noble friend on the Front Bench agree that, having been seen off on the mansion tax by the British people not very long ago, the noble Baroness is leading the charge to get back at the British people by other means, behind the front doors of their homes?

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

It is right to begin the Opposition’s response to this issue by reminding the House that the noble Lord, Lord Heseltine, to a large extent removed the poll tax and replaced it with the council tax, which was a distinct improvement, although it must be said that the council tax contains an element of the poll tax within it. That is what leaves us in an anomalous situation, more than 20 years on, with this now outdated tax base.

I declare an interest—I have a general local government interest, but I also have an interest as a householder with a house in band F that is worth some 20 times the value of some of the smaller houses in the ward that I represent in Newcastle. That is a function of how out of scale matters now are. The suggestion that there should be a rebanding is very timely, although my noble friend has not insisted on any particular formula; she is asking for a proper review. I concur with her in deeply regretting the fact that the Labour Government twice missed an opportunity to do this, or rather rejected an opportunity to do it. The first time was in respect of a report that was assembled by a committee of which I was a member, chaired by my former right honourable friend Nick Raynsford, and the second time by Sir Michael Lyons. Both of those reports were kicked into touch. But nobody has yet mentioned the fact that there was a change in Wales, which took the form of increasing banding at the top, with two extra bands—but no split was made at the bottom of the scale, which perhaps should have been the case. However, there is a precedent, at least, for making a change something along the lines of my noble friend’s suggestion.

The noble Lord, Lord Marlesford, has clearly got some very interesting ideas about how to reform the council tax, but there is an element that needs to be considered. When we look at those very high valuation figures, we are essentially talking about London—and, perhaps, one or two places outside. But there is a case —examined by Nick Raynsford’s review and the Lyons review—for looking at regional banding. That would seem to me a potentially more equitable way in which to change the system. But we do not have to take a particular view about the outcome of the process that my noble friend suggests, except that change is clearly necessary. It is intolerable that these vast differences apply, and the noble Lord adequately demonstrated the huge disparity in valuation that now takes place, which is not reflected in the tax paid. That is particularly irritating when so much of the property in London that is of that value is owned by people not resident here anyway, yet they still pay a very modest contribution. In a sense, the noble Lord is proposing something like a mansion tax; the Chancellor has taken over a few of the Labour Party’s suggestions in the past and reissued them in blue covers, and it may be that the noble Lord can persuade the Chancellor to do likewise with this. But let us not call it a mansion tax; let us call it a local tax, or a council tax, but a modified and improved council tax.

As to the total quantum, that is a separate issue. I do not think that my noble friend’s amendment necessarily involves an increase in the total to be raised, although it is probably time that that was the case. But it is somewhat odd that there is regular revaluation of commercial rateable values for the purposes of the business rate, which, incidentally, gives rise to huge problems with appeals that take ages to deal with and are very difficult—particularly when the Government expect in the event of a successful appeal not to have to return to councils moneys that councils have handed over to the Government. But that is perhaps a separate issue. This Government set their face against any revaluation of the domestic system.

It is time that that process was begun. My noble friend’s modest and restrained amendment, and the way in which she described it, offers an opportunity which I hope the Government can accept. I apprehend that she may not test the opinion of the House on this, but I hope that she has planted a seed in the minds of the noble Baroness and other Ministers in an effort to update the good work the noble Lord, Lord Heseltine, commenced 24 years ago. It would produce a more equitable system between taxpayers and between different areas of the country. That is the objective. I hope that ultimately— and over not too long a period—we will see progress.

Photo of Lord Marlesford Lord Marlesford Conservative 8:15 pm, 15th July 2015

Before the noble Lord sits down, I would like to point out that my proposal is in no way a mansion tax. A mansion tax is a toxic brand that did huge damage to his party. It is a phrase invented by the Lib Dems, who then had the sense to abandon it. Mr Miliband scooped it up and proposed to use it. It was a terrible mistake from the point of view of the Labour Party. It must have cost them a lot of votes, because of course, “mansion tax” is a “soak the rich” label. It is what old Labour was about; it is not what Mr Blair was about and will not, I assume, be what the Labour Party will be about at the next election. My system is in no way anything to do with the mansion tax.

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

It will be interesting to see what the Daily Mail, the Telegraphand the Expressmake of the noble Lord’s suggestions when they come to be debated. I suspect that he may find those words reappearing in their columns. We will see.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I thank the noble Lords who have spoken this evening, particularly my noble friend Lord Marlesford, who has given a good warm-up act for his Bill, which we will discuss on 11 September and to which I will respond. I will return to the matters he has raised this evening when we consider that Bill.

Amendment 75A would require the Secretary of State to lay a report in Parliament on the introduction of higher bands of council tax in the areas of both combined and local authorities. The Government have stated their determination to keep council tax bills low. The last five years of council tax increases are the lowest since council tax was introduced in 1993 and have even been lower than inflation. We already provide local referendums, triggered at a threshold of a proposed increase over 2%, so that people can have a say on the levels of their council tax.

The noble Baroness, Lady Hollis, compared different areas. Of course, councils will ultimately have a say on the level of council tax that they raise. Many councils have frozen their council tax over the last few years. We do not support higher council tax bands, or a council tax revaluation which would be required to implement them. Revaluation and higher council tax bands can lead to higher council tax bills for hard-working people. We are clear that council tax is not a wealth tax but a charge for the use of local services.

The current banding system reflects the fact that many larger homes make slightly greater use of local services, but it intentionally is not a poll tax or a domestic rate. The Government have already taken a number of steps to tackle property tax avoidance by a small minority of wealthy people, and also increased stamp duty on the highest valued homes.

Given these explanations, I hope that the noble Baroness will be content to withdraw her amendment.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

The reply I was disappointed in was actually that of the Minister. She knows, as does everyone here who has spoken in this debate and has a local authority background—I could not speak for the noble Lord, Lord Marlesford—that what effect there is on local authority revenues can be entirely neutral. It is a way of distributing the load. Therefore, to say that if you are in favour of having extra bands at the top in the name of greater fairness, that is unfair to the very rich, is itself a bit rich, given that at the moment, many of them are paying council tax of £20 a week. That is less by far than what people on one-fiftieth of their income, with a property value of one-tenth of theirs, are paying in their local patches. My amendment is cost-neutral, in the sense that the impact depends entirely on where the individual local authority pitches its band D. It can collect exactly the same money as it collects now but in a fairer way or, going back to the point made by the noble Lord, Lord True, it can decide that it wants to use it to raise more resources, primarily from those who can most afford to pay—the broader shoulders of those who are multimillionaires, many of them billionaires—towards the cost of the additional functions of economic growth such as connectivity, transport and building our infrastructure. A lot of that will rightly be carried by local government, but it does not have the revenue to do it and has no means of finding it.

You can approach it whichever way you like. You could use it to raise more revenue or you could decide, if you are of a more conservative disposition, that you do not want to raise any more revenue but none the less, you are mildly troubled by the fact that someone in a property worth £400,000 is paying the same as someone in a property worth £40 million. I myself would be mildly troubled by that, and I am surprised that that view is not shared more widely by some of your Lordships.

The noble Lord, Lord Marlesford, has given us a much more ambitious plan than I was proposing. What I am trying to do is simply to keep this issue in people’s minds. The longer you leave it, the worse the problem becomes. We can either try for a big bang down the road in which you will hear from the losers but not from the winners, or we can start making some incremental adjustments. The easiest way to start doing that is at the very top, where most people have a pervading sense of the unfairness of the extent to which council tax bands have outgrown the value of house prices. There is no longer the co-terminosity that existed when we devised this system—in which I was a player—back in the early 1990s.

The time is late, and I will stop there. Obviously, I will withdraw the amendment, but I say to the noble Baroness that it is rubbish to say that this is all about trying to raise council tax—and she knows it. She knows from her local government experience that this provision could be neutral in terms of the money it raises, or it could not be neutral and you could raise more money. It is about rebalancing in a fairer and more equitable way the relativities of property values within any local authority—full stop. If she is on the side of not balancing those relativities in a fairer way, I can only say that I am deeply disappointed in her response tonight. None the less, I beg leave to withdraw the amendment.

Amendment 75A withdrawn.

Amendment 75B

Moved by Lord McKenzie of Luton

75B: After Clause 10, insert the following new Clause—

“Devolved governance arrangements for London

(1) The Secretary of State may by order establish as a body corporate a joint board for the Greater London Area for the purposes of improving statutory functions relating to economic development and public functions generally within the Greater London Area.

(2) An order may be made under subsection (1) only if the relevant authorities within the Greater London Area and the Mayor of London consent to the making of this order.

(3) In this section relevant authorities means—

(a) London borough councils, and

(b) the Common Council of the City of London.

(4) An order under this section must specify the name by which the joint board is to be known.

(5) The joint board for the Greater London Area is to consist of members appointed by the Board’s constituent councils and the Mayor of London.

(6) The Secretary of State may by regulation make provision in relation to the joint board about—

(a) the membership of the board,

(b) the voting powers of members of the joint board,

(c) the executive arrangements of the joint board, and

(d) arrangements for the transfer of property and other liabilities.

(7) The Secretary of State may by order—

(a) make provision for a function of a public authority that is exercisable in relation to the Greater London Area to be a function of the joint board, and

(b) make provision for conferring on the joint board in relation to the Greater London Area a function corresponding to a function that a public authority has in relation to another area.

(8) An order under subsection (7)(a) may make provision—

(a) for the joint board to have the function instead of the public authority, or

(b) for the function to be exercisable by the joint board concurrently with the public authority.

(9) In this section a public authority—

(a) includes a Minister of the Crown or a government department;

(b) does not include—

(i) the Mayor of London,

(ii) the Common Council of the City of London Councils, or

(iii) a London borough council.

(10) The Secretary of State may by order provide for Chapter 1 of Part 1 of the Localism Act 2011 to have effect in relation to the joint board as it has effect in relation to a local authority.

(11) The Secretary of State may by order abolish the joint board for the Greater London Area only if the board’s constituent councils and the Mayor of London applies consent to the making of the order.”

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

My Lords, I will also speak to Amendment 75C. In doing so, I return to the issue of devolution for London. Following our brief debate at the conclusion of consideration in Committee, we have now tabled two more detailed amendments in my name and that of my noble friend Lord Beecham and the noble Lord, Lord Tope, whose experience of the London local government scene is second to none—in parallel of course with the noble Lord, Lord True. These amendments have been drafted by London Councils. We thank the Minister for facilitating the meeting after Committee, which included a representative of London Councils. We understand that there may have been other meetings as well. It is hoped that these have helped establish a consensus around what is required in terms of additional devolution for London and how that might be delivered. We are advised that over the last year London boroughs and the Mayor of London have worked together to develop ambitious plans for further devolution to London. Yesterday, at a meeting of the London Congress, London’s elected leaders endorsed a proposition for London that set out proposals for devolution and public service reform in relation to employment, skills, business support, crime and justice, health and housing. Each of these areas represents a key challenge facing London. Indeed, some touch on two of the most critical issues facing the country over the next five years: improving productivity and boosting the supply of housing across all tenures. The approach to each is underpinned by the belief that London, like other cities, should have significant responsibilities devolved from the national level in order to develop locally led responses to its most pressing issues.

London’s current government arrangements work well, with London boroughs and the Mayor possessing distinct executive powers, but maintaining a successful strategic partnership. However, it is considered that further devolution to London will require new decision-making arrangements at both pan-London and sub-regional level. Further, London Councils points to a need to explore which elements are likely to require under-pinning in order to meet the standards of accountability expected of government in respect of process and funding.

During the debate in Committee, we were encouraged by the comment from the noble Baroness, Lady Williams, to explore these issues in more detail and further probe the Government’s thinking. As I said, we thank her for facilitating the meeting. At the request of London Councils, we have tabled two probing amendments that set out the thinking in more detail and seek to explore where statutory underpinning in support of further devolution might be needed.

The new clause in Amendment 75C has been tabled to provide a basis for debating the need to create an enabling provision for operational delegation to groups of boroughs in London. To be clear, this has not been drafted with a view to its being included in the Bill as worded, but with the aim of securing the Minister’s reassurance that existing provisions will meet the tests of government for delegation to groups of London authorities in London.

In particular, London Councils is concerned about what, if any, underpinning may be required if there is a view that existing provision is insufficient to support ministerial delegation to joint committees formed under Section 101(5) of the Local Government Act 1972. Boroughs in London are not permitted authorities for the purposes of delegation under Section 16(1) of the Localism Act 2011 and cannot take on the functions of other public bodies. Existing borough groupings are already pushing up against the limits of what can be achieved using existing voluntary arrangements.

Subsection (1) of the new clause in Amendment 75C would provide for a joint committee of London boroughs to be able to request in writing to the Secretary of State arrangements for the delegation to it of a function of a Minister or of a government department. These arrangements might reasonably include conditions on the exercise and applicable geography of a delegated function. They might also cover provision relating to revocation of a delegation and strengthening existing provisions requiring any decision by the committee to be passed by a simple majority. The amendment is not prescriptive and invites a Government response about what, if anything, is needed legislatively to make such arrangements as proposed. Subsection (2) requires that any request made under subsection (1) must have the support of all members of the joint committee making the request. Similarly, subsection (5) states that no delegation or variation can be made under subsection (1) without the agreement of all constituent members of the joint committee. Taken together, subsections (1), (2) and (5) set a triple lock on the use of provisions within the clause. This would respect the need to balance the efficacy of joint arrangements with the sovereignty of local borough leaders.

The new clause in Amendment 75B deals with establishing a joint board for devolution to London. It explores the kind of provision that is believed to be needed in order to establish between London boroughs and the Mayor of London support for further devolution to the capital, along the lines set out and in the endorsed draft of the London proposition. As with Amendment 75C, the new clause has not been drafted to prescribe at this stage all the details of a new pan-London decision-making mechanism. Rather, it reflects the desire by London boroughs to raise the issue of London governance at a point in the Bill’s passage where appropriate reassurance and debate might be secured.

In particular, London Councils has offered this clause with a view to exploring three issues. First, there is the potential legislative presumption in favour of delegation to the mayor through Section 223 of the Localism Act 2011. In particular, joint work between London boroughs and the mayor in preparing the London proposition has underlined the need for a shared mechanism for overall steering and direction. The second issue is the extent to which it would be helpful if any delegation of functions to London recognised the collective governance of those functions by London boroughs in combination with the mayor. In particular, while it might be that a joint committee of London boroughs and the mayor proposes a partial way forward, such an approach could make boroughs reliant on entirely voluntary arrangements, particularly with regard to voting.

Specifically, London Councils is concerned that paragraph 39(1) of Schedule 12 to the Local Government Act 1972 states:

“Subject to the provisions of any enactment (including any enactment in this Act) all questions coming or arising before a local authority shall be decided by a majority of the members of the authority present and voting thereon at a meeting of the authority”.

Subsection (1) of the new clause in Amendment 75 specifies that the proposed purpose of the board is to improve statutory functions relating to economic development and public functions generally within the Greater London area. The motive for proposing such a wide-ranging purpose is to encompass the potentially broad sweep of functions that might be devolved to London as part of joint negotiations that it is understood are under way with the Government.

Subsections (2) and (3) require that the board can be established only if all the boroughs, the City of London and the Mayor of London agree. Subsection (5) states that any joint board should consist of members appointed by the board’s constituent councils and the Mayor of London. Subsection (6) proposes that details relating to a number of aspects of the board—membership voting powers, executive arrangements and so on—might be provided for in regulation. Subsections (8) and (9) propose that the power be limited so that the board cannot take on any function that is currently a function of the mayor, London boroughs or the City of London. This reflects agreement across London government that all areas of activity under the authority of either the London mayor or London boroughs will remain separate from any partnership arrangements and decision-making on newly devolved matters.

Photo of Lord Brooke of Sutton Mandeville Lord Brooke of Sutton Mandeville Conservative 8:30 pm, 15th July 2015

I realise that the drafting of the amendment is not the noble Lord’s, but in proposed new subsection (9), to which he referred a moment ago, it might be sensible if the penultimate word in the penultimate line was struck out at this juncture, as, at the moment, it constitutes nonsense.

Photo of Lord Tope Lord Tope Liberal Democrat

Perhaps I can help and speed things up a bit. The subsection to which the noble Lord draws our attention refers as printed to the “City of London Councils”. The word “Councils” is obviously superfluous and a mistake. It might reveal where the drafting came from.

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

I am grateful to the noble Lord, Lord Tope, for some assistance on that. This was the drafting of London Councils, but I will make sure that it is corrected. I am grateful to the noble Lord for bringing that to my attention.

Proposed new subsection (10) proposes that the board be given the general power of competence. That is in order to support the potential for future rounds of negotiation. Proposed new subsection (11) creates provision for the Secretary of State to dissolve the board only if the board’s constituent councils and the Mayor of London agree, although we recognise that the board might be dissolved through an Act of Parliament.

We are close to the end of this House’s consideration of the Bill. Nevertheless, we hope that the amendments will elicit a response today or at Third Reading that will enable progress to be made. If not, we hope that at least a fair wind will be given to the issue as the Bill heads for another place. I beg to move.

Photo of Lord Tope Lord Tope Liberal Democrat

My Lords, my name is also to the amendment, and I am very pleased to give my support in the terms described by the noble Lord, Lord McKenzie, to whom I am particularly grateful for introducing the amendment so clearly and fully. I join him in expressing our gratitude to the Minister for meeting us and London Councils so that we could explore our concern over the issue rather more fully—leading, I think, to a better understanding all round.

It has been my lot to speak only at the end of each stage of the Bill, having sat through all the other debate—which I have done with great interest and considerable patience. It has been clear from the start that the Bill as drafted, although it includes London, does not really relate to London government. Nor is there any intention to recreate in any way the structure of government that pertains in London. That is correct. London’s government structure is unique. On the whole, over the past 15 years, it has worked fairly well.

However, I have had the impression, in part from your Lordships’ debates, but also from debate outside the House and in other places, that there is general feeling that because London has its Greater London Authority, its directly elected mayor and the London boroughs, devolution within London is largely finished, certainly in legislative terms—that we have done it and now it is time for the rest of the country to catch up. I entirely reject that view. London is by no means finished. Devolution is anyway an ongoing process that will develop and evolve, possibly for ever, in different ways. Certainly after 15 years, we are ready to see greater devolution of power—I stress that word—from central government to London government. By London government, I do not mean only the Mayor of London, I mean the London boroughs as well, and I mean jointly between the Mayor of London and the London boroughs.

In replying so far, at each stage of the Bill, the Minister has been fulsome in welcoming any proposals that may come from London to bring that about. We are concerned that there should also be the necessary enabling legislation in place to allow any proposals agreed between each borough, the mayor, the City of London and the Government to come into effect as quickly as possible. Concern has been expressed during debate among your Lordships that we should not delay implementation by holding referendums or in any other way. It would be absurd if we went through all the stages of getting 32 London boroughs, the City of London, the Mayor of London and the Government all to agree on what we wanted to do about further devolution in London only to find that there was not legislative provision to enable it to happen and that we had to wait for another legislative opportunity to bring that about. We all know that such legislative opportunities do not come along very often. This is the obvious place to make such provision and this is the right time to do so.

The noble Lord, Lord McKenzie, made clear that our amendments are not intended to be a detailed proposal for implementation now, but rather a fairly detailed indication of thinking within London. Not the amendment but the proposals reflect considerations that took place yesterday at the meeting of the congress of leaders of the London boroughs and the mayor. To that extent, it is a probing amendment rather than one that we seek to see in this exact form in the Bill.

We do this to try to give greater clarity to the direction in which London and London government are going in their thinking and determination to have much wider powers devolved to it from central government in the areas, as the noble Lord, Lord McKenzie, said, of employment, skills, business support, crime and justice, health, and housing—in other words, on a much wider basis than is presently the case. The concern is that we can go only so far on co-operative arrangements and mutual agreement. We need reassurance that there is statutory provision to enable the bodies—particularly the joint committees when they are established—to operate effectively, be responsible and, when appropriate, be legal entities. So we are trying to find out the latest thinking of the Government in those areas. If it is the view that further legislative provision is necessary—I think now that it increasingly is—then this is the Bill in which to do it. We seek an undertaking from the Government that, by the time the Bill reaches Royal Assent, such provision will be included in it.

Photo of Lord True Lord True Conservative 8:45 pm, 15th July 2015

My Lords, since we are told that this is a probing amendment, perhaps I might be probed. I come with apologies to the House at this late hour, particularly to the Minister, who has done an absolutely outstanding job in leading the House through the Bill. However, when the amendments on London were tabled in Committee at the last possible stage, a lack of notice prevented me attending. Perhaps as leader of a London borough, a member of the leaders’ committee of London Councils and one who was present at the meeting that has been alluded to several times, I might be allowed to speak for rather longer than I would otherwise do. I will try not to test the patience of the House, but the issues are important.

A meeting of the London congress, lasting one hour and in the presence of mayor Boris Johnson, is not a suitable occasion for dissecting in detail a document that is laid before the committee. It is true that yesterday at the congress of London Councils, with the mayor, general assent was given for discussions to continue on the potential strands of devolution in London. We believe that boroughs can and should do more. However, assent to continuing work in progress should not be taken to indicate universal consent by all those present and all the boroughs represented to all that is on the table or, if I may say so, some of the things that may be lurking in briefcases under the table.

London is very different from other areas being considered under this Bill. It already has a very powerful elected mayor and a regional government. It has scrutiny arrangements and a London Assembly, which is imperfect in many ways, I agree, but which for now exists—although I wonder about putting two forms of government or congress alongside each other. It also has 32 London boroughs, about which Whitehall and others are sometimes rather sniffy. Many of those boroughs freely co-operate and we know no law to make us do so. My own borough shares services with Merton and Kingston. We run joint children’s services as a community interest company with Kingston, which is monitored by a joint committee supervising those services across the two councils. We are also setting out joint staffing with Wandsworth. Working with Wandsworth, we will be larger than Newcastle and Luton combined, and certainly bigger than Bristol or Manchester City Council. We are only one sector of a huge and hugely diverse capital. The boroughs have a legitimate place and voice and should not just be shuffled aside in these discussions.

I can confirm that valuable discussion is ongoing between the Government, the Mayor of London and London Councils, which we support, about potential strands of devolution. It is unfortunate that, sometimes, the geometry of these discussions is asymmetrical. For example, some of the more eccentric elements in what was a curate’s egg of ideas on planning published last Friday were discussed by the Government with the mayor but not with London Councils, the powers of which are to be overridden by the mayor. That does not create the climate of trust that is vital to success in devolution discussions between different levels of authority.

I referred to the diversity of our capital and the diversity of the strands of the policy being discussed, which have been listed by the noble Lord, Lord McKenzie.

In my submission, it is unlikely that, over such a vast canvas of place, policy and authorities, a single statutory institutional model will fit every contingency. It is already obvious that, in London, some areas of policy, under the Little Red Riding Hood garb of devolution, actually mask the wolf of centralisation, whether up to City Hall or further up the pecking order in the bureaucratic jungle. We need to know exactly how we are to proceed in these critically important areas under discussion. Work could begin now and has already begun across London without the need for statutory institutions in many of these areas. We should get on with it and not inhibit those authorities that are already trying to do things by navel-gazing too much over the legal text. I do not subscribe to the amendments before the House; nor do I, or my group on London Councils, subscribe to the text put forward for the governance model for London.

There is a clear conflict in some areas—I have referred to housing and planning—between devolution and centralisation. These issues are not easily resolved, but they have to be discussed. They will be harder to resolve if the illusion persists that the boroughs are the problem. If we had had the power in our borough to develop some dormant and semi-dormant public sector land, it would have been developed long ago. It would have been developed with provision for local schools and amenities that some of the proposals advanced last Friday sadly lacked. Why can we not give a council the right to acquire public sector land that is not used? The value of the land could remain vested in the state, and we could just get on with a community brief that delivers some of these houses and schools and things that people want. Why is it that local boroughs—London boroughs—are too often just put in the firing line and told that they are not part of the debate? I ask that they should be.

The massive expansion in the population of London that is now envisaged must be addressed on a regional basis, considering infrastructure, travel to work and so on. It is like the expansion in the Victorian era. It simply cannot be contained by pouring concrete within the line of the GLA borders drawn on a map. It is bigger than just the Mayor of London, the London boroughs and the nation. Of course a great many things will have to be done within the London boroughs and the London area. We all acknowledge the need to play a part in that, but we need a broader discussion. If we confine it to this, we will miss many points.

I will not go into the details of the amendments. They have been explained at some length by the noble Lord, Lord McKenzie. I do not agree with them; they are premature. Amendment 75C, as I read it, locks any committee that is formed into existence on terms that may be varied, whereas its duties may be dissolved only by legislation. Although councils have to consent to go in, the fact that it is statutory gives the Government of the day a lock on a committee’s dissolution. In that sense, it is rather reminiscent of the euro. Once you are in, you are in. Hence, in my view, there is a need for prior consent. It is a one-way lock that the noble Lord is putting forward. There are some very worthwhile experiments and ideas on devolution under consideration, but those ideas may or may not work. Their success will depend on whether future Governments sustain the revenue streams in the areas they propose to devolve. That is something on which no Government have a great record.

Devolution is a great idea. I am all for it if it is what it says on the tin, but I and, I know, a number of other London leaders of a similar mind will want to see a little more of the nature of the contract before we sign or consent freely to a statute’s being passed into law. It would be a very difficult world if we were to be given these new functions, about things where we were required by law to fill holes the Government or the NHS later left behind. We might find ourselves being forced to cut even faster things we are already called on to reduce.

I do not want to appear wholly negative. I am not negative. I think this is a very worthwhile discussion. There is good, positive work in progress. But I hope no one is under the illusion that everybody is already signed up to the details in the small print. I do not think it should be pre-emptive or placed in any statutory gridlock before full and general consent from the London boroughs.

Some strands of these policies may be able to be advanced more quickly than others. But I am a realist: I understand the appetite of City Hall to keep control and not devolve fully. But I am also a localist and I think my right honourable friend the Secretary of State is, too, so I hope that careful thought will be given to balancing those factors as we look to the future in our capital instead of, as all too often happens when a new policy is made and when there is a great idea, as there is underlying this Bill, people going forward insisting on a single-institutional answer and trying to force varying and diverse problems, policies and solutions into one straitjacket.

Let us finish what is already on the table before us in the Bill before bringing in London, before calling for another not quite yet properly cooked dish of London pie and mash. It is not quite ready yet; do not let us rush it out of the kitchen, appetising though the pie and liquor may well be, if we can get to the point of agreeing the solution.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, as discussions on these amendments have demonstrated, the ideas for devolution in London to London councils are interesting and varied. As I have explained many times in previous debates, there is an expectation that local areas will do just that and come forward with proposals to support devolution for their areas, and of course London is no exception.

I know that London boroughs and the Greater London Authority are working on a package of reform proposals, and I was very pleased to meet the noble Lord, Lord Tope, and others—I think that it was last week; time goes very strangely in this House—and interested to hear their thinking. We expect boroughs and the GLA to come forward to us with those proposals in the coming months. I recognise that the proposals may need a strengthening of London governance arrangements, and I can see how the proposals in the amendments may provide the kind of governance arrangements that might be needed.

However, for now, I suggest to noble Lords that we continue at some later stage our discussions on what the most appropriate changes would be to provide the London governance needed for future greater devolution and how such changes might best be provided for in this Bill. Therefore, I ask that noble Lords do not press their amendments.

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

My Lords, I am grateful to all noble Lords who have spoken in that brief debate. Insofar as what the Minister said, yes, of course, we will withdraw the amendment at the appropriate time, but it is good to hear that a package of proposals is being worked on which might entail strengthening of governance arrangements.

The point of having amendments now is that the Bill is just about to pass from this House. This is a legislative vehicle, which is why it is an opportunity to test the water on what might be an appropriate structure to deal with the emerging devolution proposals.

Clearly, the noble Lord, Lord True, is heavily involved in all this—it is an integral part of what he does—and I accept entirely that, as he said, there is a desire to continue with the work in progress of developing these thoughts. It is not a done deal in the sense of what he said. I accept, too, and can well imagine that devolution in London is heavily impacted by diversity and the need to build a climate of trust with government. Given the massive expansion in the population, to which the noble Lord referred, I acknowledge, too, the need to look at this on a regional basis and the need for broader discussion.

I am grateful to the noble Lord, Lord Tope, for his support for the draft amendments, on the basis that they are probing amendments to try to set down and understand some parameters. A key question that emerges from this is whether the legislative hurdles that they seek to address are real—I think that this is one of the issues that London Councils had concerns about.

I accept that this is not necessarily about locking people into particular institutions. It is an attempt to understand where these sorts of devolution arrangements that London boroughs wish to enter into can be enabled under existing legislation or whether something is needed in addition. Perhaps we could hear more specifically from the Minister. We had one discussion on that and it seemed that, in some areas, there was acceptance that additional legislation would be required. We have got the sense this evening that this is the case—this Bill will go to the other place in September and October but it will have been passed in some shape or form by the end of this year—so this is a missed opportunity if London devolution, as London wants it, needs the benefit of some tweaking or changing of legislation. Can the Minister address that point?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I thank the noble Lord for that—it may be that some tweaking of legislation is required; we have on other parts of the Bill similarly alluded that the tweaking of other legislation might be required in order to align it with this Bill on devolution. The discussions have started well but I request that we give a bit more time to this and discuss it in due course.

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

I am grateful for that. It is good that discussions are proceeding well; it is a good start to the process. I just hang on to the point that this is not an open-ended legislative opportunity. I suppose that we have had DCLG Bills quite frequently in recent times, but this one will be out of the other place by the end of the year. It will be a great pity if there is still uncertainty as to the legislative arrangements, this Bill is passed and somebody then says, “Hang on, we can’t do something that we want to do as an integral part of devolution in London because we need primary legislation to do it”. That was the thrust of the amendment —to probe and tease out that matter. I think that we have probably given this enough of an airing tonight, so I beg leave to withdraw the amendment.

Amendment 75B withdrawn.

Amendment 75C not moved.

Schedule 4: Minor and consequential amendments

Amendment 76

Moved by Baroness Williams of Trafford

76: Schedule 4, page 25, line 14, at end insert—

“2A In section 91 (exercise of local authority functions), in subsection (1), after “an area” insert “all or part of which is”.”

Amendment 76 agreed.

Amendment 77 not moved.

Amendments 78 to 83

Moved by Baroness Williams of Trafford

78: Schedule 4, page 25, line 19, at end insert—

“(2B) An order under subsection (1)(c) may include provision for a function exercisable by a local authority in relation to an area all or part of which is comprised in the combined authority’s area to be exercisable by the combined authority in relation to the combined authority’s area.”

79: Schedule 4, page 25, line 42, at end insert—

“5A In section 111 (review by authorities: existing combined authority), in subsection (3)(a), for “any of sections 104 to 107” substitute “section 104, 105, 106 or 107”.

5B In section 112 (preparation and publication of scheme: existing combined authority), in subsection (1), for “sections 104 to 107” substitute “sections 104, 105, 106 and 107”.”

80: Schedule 4, page 26, line 3, at end insert—

“6A (1) Section 114 (incidental etc. provision) is amended as follows.

(2) Omit subsection (2).

(3) In subsection (3), for “by virtue of subsection (2)” substitute “in an order under this section by virtue of section 117(5)”.”

81: Schedule 4, page 26, line 9, leave out sub-paragraph (3)

82: Schedule 4, page 26, line 12, at end insert—

“( ) After subsection (4) insert—

“(5) An order under any provision of this Part, other than an order under section 116 or an order mentioned in subsection (2A)(a) or (b), may include provision amending, applying (with or without modifications), disapplying, repealing or revoking any enactment whenever passed or made.””

83: Schedule 4, page 26, line 26, at end insert—

Localism Act 2011

9 The Localism Act 2011 is amended as follows.

10 (1) Section 15 (power to transfer local public functions to permitted authorities) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (a), for “a permitted authority” substitute “an EPB”;

(b) in paragraph (b), for “permitted authorities” substitute ““EPBs”.

(3) Omit subsection (4).

(4) In subsections (6) and (7), for “permitted authority” substitute “EPB”.

(5) In subsection (8), for “a permitted authority” substitute “an EPB”.

11 In section 17 (transfer schemes), in subsection (1), for “permitted authority” substitute “EPB”.

12 (1) Section 18 (duty to consider proposals for exercise of powers under sections 15 and 17) is amended as follows.

(2) In subsection (1)—

(a) for “a permitted authority” substitute “an EPB”;

(b) in paragraph (b), for “permitted authority” substitute “EPB”.

(3) In subsection (3), in paragraph (a), for “permitted authority” substitute “EPB”.

13 In section 20 (interpretation) at the appropriate place insert—

““EPB” means an economic prosperity board established under section 88 of the Local Democracy, Economic Development and Construction Act 2009;”.”

Amendments 78 to 83 agreed.

In the Title

Amendment 84

Moved by Baroness Williams of Trafford

84: , line 5, after “governance” insert “and functions”

Amendment 84 agreed.