House of Commons Hansard Debates for 13 Jun 1989

Mr. O'Brien : This is a charade.

Mr. Bennett : Will the Department consider the progress of ombudsman cases? If the ombudsman's findings are ignored in a succession of cases, will the Department come back to this matter?

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Mr. Gummer : First, I want to answer the hon. Member for Normanton (Mr. O'Brien) who spoke about a charade. Before the hon. Gentleman shouts out what he does not understand, he should know that I have spent a great deal of time trying to find a way to make Coventry and other councils accept the law. I have found that there is an easy way to do that, but that that carries a disadvantage that is greater than the advantage. If Opposition Members think that this is a charade, they do not appreciate how seriously we judge when someone is cheated out of money by a public authority. What is even more serious is that an hon. Member of this House should say that such action was wrong. Does the hon. Member for Normanton think that it was wrong for the council to deny the ombudsman's report?

Mr. O'Brien : The charade refers to the hon. Member for Pembroke (Mr. Bennett) who has no intention ot pressing the new clause--we knew that from the start. He is being unfair to his constituents and his actions constitute a charade.

Mr. Gummer : I repeat the question--was it wrong to cheat that family of £17,500?

Mr. Soley rose --

Mr. Gummer : I want the hon. Member for Normanton to tell me whether the council was wrong.

Mr. O'Brien : This is a night of charades.

Mr. Gummer : Once again the hon. Gentleman refuses to say that he believes that the council was wrong.

Mr. Soley rose --

Mr. Gummer : No, I shall not give way as the hon. Gentleman has had every opportunity to make his case.

The House can make a distinction between those on the Conservative Benches who have publicly admitted that the actions of a Conservative council were wrong--as well as those of a Labour council--and the actions of Opposition Members who, when challenged to say whether it was right to cheat someone of £17,500, were not prepared to admit it.

I am sorry that I cannot support my hon. Friend the Member for Pembroke, but I believe that there are good reasons for not doing so.

Mr. Nicholas Bennett : I have listened with care to the arguments put forward by my right hon. Friend. I am satisfied that he has put forward strong objections to this new clause and I beg to ask leave to withdraw it. However, I will keep an eye on the situation and if this matter and other matters like it are not resolved I will bring the issue back on a future occasion.

Motion and clause, by leave, withdrawn.

Clause 22

Consideration of adverse reports : Scotland

Lord James Douglas-Hamilton : I beg to move amendment No. 230, in page 30, line 32, leave out from committee' to end of line 36 and insert

as is mentioned in section 23(2) of this Act ; or

(b) an education committee appointed under section 124 of the Act of 1973 ;'.

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Mr. Deputy Speaker : With this we shall take Government amendments Nos. 231, 239 and 240,

Lord James Douglas-Hamilton : Amendments Nos. 230 and 231 are drafting amendments.

I draw your attention, Mr. Deputy Speaker, to the fact that amendments Nos. 241 and 242, which are not linked with amendments 239 and 240 are identical, and with your leave I will speak to them too. These amendments are designed to address the rather different Scottish circumstances in terms of arrangements for consultation between central Government and local government. I do not think that I need to go into them in greater detail.

Amendment agreed to.

Amendment made :-- No. 231, in page 30, leave out lines 41 to 47 and insert

a joint committee--

(a) established under section 56 of the Act of 1973 or under paragraph 7 of Schedule 10 or paragraph 6 of Schedule 20 to that Act (local authority, education and social work joint committees) ; or (

(b) referred to in paragraphs (a), (b), or (e) of section 23(2) of this Act (fire, police and local government and teachers' superannuation joint committees).'.-- [Lord James Douglas-Hamilton.]

Clause 24

National Code of Local Government Conduct

Mr. Matthew Taylor : I beg to move amendment No. 205, in page 25, line 1, leave out

for the guidance of members of local authorities'.

Mr. Deputy Speaker : With this we will take amendments Nos. 206, in page 32, line 2, leave out recommended'.

and 207, in page 32, line 29, leave out guided' and insert bound'.

Mr. Taylor : I and my hon. Friends have tabled these amendments because without them, in our view, clause 24 is a worthless piece of bureaucracy designed to do nothing but facilitate the contempt in which many members of both Labour and, particularly, Conservative councils continue to hold the current national code of local government conduct.

As I have said, those councillors--and they are the overwhelming majority from all parties--who are honourable people will naturally accept whatever guidance is given them by the Secretary of State so long as it continues to be in the spirit of the current code. However, if the need is to improve the quality of local government it is not to those people that the Secretary of State needs to be addressing himself. It is to others who do not follow that code in a way that I believe is fitting within local government and who do not accept the guidance contained in the code.

Clearly, Ministers believe that they should follow the code, but when it comes to people such as, for example, the Conservative leader of Kingston council, who, despite having been given several specific opportunities, refuses to endorse the code, we cannot have confidence that they will follow it. Asking such people to be guided by such a code is like asking a kleptomaniac to be guided by the Ten Commandments. It just will not happen. They clearly do not believe that they should be so guided. They will not be so guided and the Ministers should be doing something

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about it. Any councillor who is not prepared to be bound by the national code of local government conduct should clearly not be a councillor in the first place.

The amendment is designed to ensure that councillors, when elected and working on local authorities, are so bound. If Ministers genuinely believe that they should follow the code there is no reason for them not to accept these amendments. I hope that the hon. Lady who is to reply will accept that this is about controlling those who are determined, despite holding positions of responsibility, not to be bound by the code unless they have to be. Nothing in the Bill will do anything to affect the conduct of those who are determined not to follow the Minister's wishes and what are my wishes and, I suspect, the wishes of the overwhelming majority of the population. 11.15 pm

Mrs. Virginia Bottomley : I will not disagree with the hon. Gentleman about the importance, the value and indeed the necessity of increasing the code's prominence. That is why we have been busy updating the national code of local government conduct, which will be prescribed by the Secretary of State and approved by Parliament. Councillors will be required, on taking office, to declare that they will abide by the code.

I am not able to accept the hon. Gentleman's amendment because it reflects a misunderstanding of the nature of the code. It is a frame of reference providing broad principles and general guidance to members, but it is not a definitive rule book. It lays down important standards of behaviour, but it deals with matters which, by their nature, are not sufficiently clear-cut to be given statutory force. The imposition of a requirement of the kind suggested by the hon. Gentleman would require a different approach to the format, style and content of the code and that would risk damaging its value altogether by trying to make it something that it clearly cannot be. To impose the code on members and to alter its advisory status would endanger the acceptability of the code among members and complicate the code. However, we are strengthening the code, updating it and my right hon. Friend the Secretary of State will prescribe it. In addition, there is the material difference that the local ombudsman, on investigation of a case, will, if he believes that maladministration has resulted from a breach of the national code, be required to name the individual involved unless he believes that it would be unjust to do so.

I hope that the hon. Gentleman agrees that that represents a significant enhancement of the status of the code and will make all involved realise the weight that the Government attach to it.

Mr. Matthew Taylor : I am not satisfied that anything will be done to tackle the abuse of current councillors who say that they do not accept the nature of the code. Simply asking them to agree to be guided by it means little if they do not believe in the principles that it embodies in the first place. Nothing that the Minister has said will do anything to make them follow it.

However, I shall not press the amendment since we are about to debate two amendments which may allow the Minister to modify her position. If she accepts amendment No. 208 it will give the ombudsman the power to take some action against individuals who act in the way that I

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have suggested. However, I shall come to that matter in a moment. In that respect only, I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn.

Amendments made : No. 239, in page 32, line 8, after consult', insert--

(a) as respects England and Wales'.

No. 240, in page 32, line 8, after government', insert and

(b) as respects Scotland, such associations of local authorities'.-- [Lord James Douglas-Hamilton.]

Clause 25

Anonymity in reports on investigations

Mr. Matthew Taylor : I beg to move amendment No. 208, in page 33, line 15, at end insert

where the local commissioner is of the opinion that the maladministration or breach of the National Code of Local Government Conduct is of a serious nature he may recommend to the Secretary of State that the member be barred from office for an appropriate period'.

Mr. Deputy Speaker : With this it will be convenient to take amendment No. 209, in page 33, line 30, at end insert

Mr. Taylor : I mentioned these amendments a second ago when I noticed that the Minister had a quick look at what was coming. Perhaps she forgot to mention earlier that she had decided to accept these amendments, so that we need not be concerned about the previous group--at least, I hope so.

These amendments follow logically from the argument that I have just presented. It is clear that if the national code of local government is to be effective, there must be some sanction on local councillors.

The Minister has already said that she does not believe that people should be bound by law to follow the code of conduct. However, the amendments would give the local commisioner the power to take action where there were serious breaches of the code by offences which in his view made the perpetrators unfit to hold office. In that way we would give the local commissioner some teeth so that the public and other councillors could see that justice was being done.

I hope that it would never be necessary for such powers to be exercised because councillors seeing that such powers existed would follow the code rather than simply pledging themselves without feeling constrained to follow it in practice.

The amendment specifically says :

"where the local commissioner is of the opinion that the maladministration or breach of the National Code of Local Government Conduct is of a serious nature he may recommend to the Secretary of State that the member be barred from office for an appropriate period."

Clearly, ultimately, the decision would lie with the Secretary of State, but it would be only after a thorough investigation and only in the most extreme circumstances.

If the Minister believes that councillors should follow the code of conduct, she must believe that ultimately there ought to be some form of sanction against councillors who

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do not observe it properly. In too many cases the reality is that councillors display a cynicism both to their directorate and to their council. Unless changes are made, not only will the code be ineffective, but the Government will make a mockery of their own attempt to argue that codes of conduct should be observed.

Mr. Soley : I understand the hon. Gentleman's intentions, but they are ill-advised. As I said in Committee, it is always a mistake to attempt to establish structures that override democracy. The hon. Gentleman said that the local electorate are often cynical about councillors. I can tell thim that they are often cynical about Members of Parliament, too. If the hon. Gentleman is prepared to see councillors overridden, he must be prepared to see right hon. and hon. Members overridden by the commissioner for parliamentary business, with the power to say, "This Member has behaved improperly and therefore should be debarred." Ultimately, it is far more critical in defending democracy to ensure that the final say remains with the electorate.

Mr. Wallace : The hon. Gentleman touches on a delicate area. A comparable situation for Members of Parliament is the declaration of a Member's interests. Does he believe that any sanction should attach to a right hon. or hon. Member who fails to comply with that requirement?

Mr. Soley : The House debated that issue earlier, when I remarked that it was wrong to treat councillors differently from Members of Parliament and that there should be broad but similar guidelines covering all elected representatives. There is a proper debate to be had about the extent to which such a person should be allowed to participate and vote in a debate in which he has a personal interest. The point was made in an earlier debate--and I am not being critical of the hon. Member for Orkney and Shetland (Mr. Wallace) for not being present in the Chamber at the time --that there should be similar rules for right hon. and hon. Members as there are for councillors. I am making the more fundamental point that if one believes in the primacy of the electorate, one must let them decide for themselves--even though I am the first to agree that, at times, they are cynical about councillors and Members of Parliament.

The danger in the last group of amendments from the hon. Member for Pembroke (Mr. Bennett) was that, under them, the local authority ombudsman could have debarred many of the Coventry city councillors, both Labour and Conservative. Despite what was said by the Minister--and the word "cheats" was used--anyone who reads the details of the Coventry case, which was incredibly complex and endured for many months, and in which there were two sides to the argument, will be aware that if the local authority had followed the ombudsman's recommendations the councillors might have been surcharged. One can imagine the problem that would have arisen if the ombudsman had had the right to disbar them from office. We cannot go down that road, which poses a danger to parliamentary and local democracy. Although the amendments are well intentioned, the end result would be a form of executive decision-making that overrode elected members--and that would be undesirable.

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Mrs. Virginia Bottomley : I agree with the hon. Member for Hammersmith (Mr. Soley) that the amendments are well intentioned. We are united in wanting to ensure that the national code is widely regarded and highly respected, and is observed. The hon. Member for Truro (Mr. Taylor) hopes that it will never be necessary for my right hon. Friend the Secretary of State for the Environment to take certain steps. As matters stand it would be impossible for him to do so, because he does not have the power to bar a local authority member from office.

The Register of Members' Interests has already been debated, but the national code is a different issue concerning more general conduct and the way in which local government members should behave and discharge their responsibilities--which is much harder to enforce strictly, by statute. However, the measures already outlined for identifying a particular member who was in breach of the code which had led to maladministration will have a dramatic effect. The hon. Member for Truro questioned whether we had a cynicism towards local councils and the electorate. We have a great deal of confidence in local councils and the electorate. Once a member has been identified as having breached the code, giving rise to maladministration, I have confidence that councils and the electorate will take the necessary steps.

Mr. Matthew Taylor : When I am told that my amendments are well intentioned I know that the Liberal party still survives within the Social and Liberal Democrats. I listened to what the Minister said and hope that she will be proved right in practice.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 27

Restrictions on promotion of economic development

Mr. Battle : I beg to move amendment No. 248, in page 34, line 41, at beginning insert

Subject to subsection (2A) below'.

Mr. Deputy Speaker : With this it will be convenient to take the following amendments :

No. 249, in page 34, line 41, at beginning insert

Subject to subsection (3A) below'.

No. 250, in page 35, line 1, after above', insert

but subject to subsection (2A) below'.

No. 251, in page 35, line 1, after above', insert

but subject to subsection (3A) below'.

No. 252, in page 35, line 7, at end insert--

(2A) No Regulations made under subsections (1) or (2) above shall operate to prevent a relevant authority which does not have assisted area or aid status for exercising its power to provide financial assistance by way of grants, loans or guarantees under section 26(2) above, or otherwise to create any restriction which would have a differential effect on the exercise of such powers for those purposes as between authorities in different areas.'.

No. 253, in page 35, line 16, at end insert--

(3A) No Regulations made under subsections (1) or (2) above shall prohibit the exercise by a relevant authority of its powers under section 26(2) in relation to activities

(a) which fall within the scope of any scheme for the promotion of employment, training or enterprise sponsored by any Department of State ; or

(b) in respect of which the authority receives financial assistance from the European Community.'.

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No. 254, in page 35, line 19, at end insert- -

(4A) The Secretary of State shall, within two years of the first date on which any regulations under this section come into effect, undertake a review of the operation of such regulations, and publish the results.

(4B) The Secretary of State shall, as part of the conduct of any review established under subsection (4A) above, consult the local authority associations and such other organisation or individuals concerned with the promotion of local employment and enterprise as appear to him to be concerned.'.

Mr. Battle : We now move on to part III of the Bill which deals with economic development. We welcome the introduction of clause 26 and the introduction of the new economic development powers. We found it surprising that, although one clause introduces the new power, it is followed by another three pages in part III which take away the provisions of the power. The margin note to clause 27 defines them as :

"Restrictions on promotion of economic development."

The restrictions will be left to regulation, and we do not yet know what that will be. To that extent it will be in the hands of the Secretary of State. We should sort it out here and now, on the face of the Bill, and ask whether it is necessary to restrict this power once it has been given. The power seems to be given with one hand and swiftly taken away with the other.

Economic development is not new in local authorities. Certainly, some of them have played a vital role in the analysis of the development of the local economy, and have contributed to it. Before I came to the House I served as a member of Leeds city council which was active in the early 1980s in precisely this way, and we used what provisions we could from the urban programme and other sources. It is fair to say that Government priority in economic development tends to be focused particularly on travel -to-work areas and areas with assisted status. Under the new regulations, will the power be restricted to those areas? If so, many local authorities will miss out because the designations of those areas and often the industries that cover them cover wide areas that mask real areas of deprivation and areas in need of economic development.

I shall give an example from Yorkshire and Humberside to illustrate my point. Unemployment at the coast in the town of Bridlington stands at 19 per cent. but that is covered by the Bridlington and Driffield travel-to- work area in which the unemployment rate is only 4 per cent. The local problem in Bridlington is disguised because the case is judged simply by the travel-to-work area.

In my own city, Lord Joseph, who represented a part of Leeds, redefined the boundaries of the travel-to-work area. In defining the relationship between Leeds and Bradford, a part of south Leeds, which was one of the poorest parts of the city, was left out of the travel-to-work area for assisted area status purposes. The Pudsey area which was one of the wealthiest parts of Leeds was drawn in under the Bradford assisted area status. Substantial pockets of inner-city deprivation can be masked in that way. In my constituency, Armley is practically an urban village of the kind that grow up around key local industries such as textiles and engineering. Where those industries have been hit hard there are pockets of unemployment.

The local authorities that engage in economic development are not only in the large cities, but in rural areas where the population may be much smaller. Many

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rural authorities are involved in such development, through grants and loans to small businesses and the like. Their official statistics, when compared with the figures for densely populated areas such as the large cities, will not show up the local need.

11.30 pm

But value of assistance to local areas ought to be widely recognised. For example, Ashford, Kent--in the overheated south-east--uses financial powers to relocate badly-sited small businesses. It may need to exercise those powers even more if British Rail's proposals go ahead. Why not? There is no reason for Ashford to be penalised, and no reason for it not have discretion to exercise the new power.

I shall not rehearse our Committee debate ; the Minister's response then, however, gave us the impression that we were talking about financial assistance itself rather than the primary power. Our concern is with the power itself ; why not leave it with local authorities, and let them choose whether to provide financial assistance?

The Institute of Local Government Studies at Birmingham university recently carried out a survey on the impact of possible geographic restrictions if the new power is applied. Of the 330 authorities that responded, 148--about 40 per cent.--were identified as having no special-area status, and of the authorities providing direct financial assistance nearly half were located in the south-east. Most were in the shire districts, with a moderately sized population ; about half were Conservative-controlled and one third

Labour-controlled. One conclusion in the report states :

"the findings suggest that the restriction of powers to give financial assistance to businesses to places with special area designation would curtail these activities in a number of highly active authorities, some of which are operating in areas of high unemployment. In addition, a number of authorities which do not offer financial assistance at present are active in other fields of economic development. They may also be prevented from expanding their activities, for example to respond to change in local unemployment rates, if the proposed restrictions are enacted".

It is clear that the regulations could well have that effect, inadvertently or otherwise. We are not in a position to say, because we do not know what will be in them. We do not think that some authorities should be penalised as against others. I repeat that we are not talking about the amount of financial assistance ; indeed, the Government have the power to cap such assistance. What we are talking about is the power itself. The power presented in clause 26 is welcome ; why can it not be for all?

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