House of Commons Hansard Debates for 11 Dec 1992

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Mr. Banks : The Government also did away with a lot of local authorities, which was one way of dealing with it. It is rather like going to the doctor to complain of a headache and getting one's head chopped off. The doctor gets rid of the headache, but such drastic measures do not necessarily commend themselves to people who are suffering from a headache.

The Government have attacked local authorities, and it worries me greatly. I am a very reasonable person. I like to think charitably, even of Conservative Members, although I am continually disappointed in that hope. However, I should like to think that in our system of local government we have something that is worth standing up for and defending, in real terms. Of course there will be political differences between us--that is the stuff of our party political democracy--but the way in which local authorities and councils have been abused by the Government in recent years is, to me, unacceptable.

I do not intend to make a big issue of it, but a number of hon. Members have referred in the debate to local authority junketing and to the fact that we must make sure that the Bill does not lead to even more. It is a bit rich to say things like that in this place when large numbers of overseas fact-finding trips are available to Members. We get very upset when our electors refer to those as junkets.

In the circumstances, it is unwise of us to refer to similar local government activities as junkets. As my hon. Friend the Member for Bolsover (Mr. Skinner) once memorably said about visits of Members of Parliament abroad, "I notice that they never go fact-finding to Greenland in the winter." [Interruption.] No, his passport was stolen. It was obviously one of those plots by central Government to stop him going abroad and telling the truth about what goes on in this country.

Our local government system deserves far more credit from the Government than it has received. I hope--again, it is a faint hope--that today's atmosphere, in our discussions about this measure that affects local authorities, will be a harbinger of future debates and future relations beween central Government and local authorities, although I shall not hold my breath while I wait.

The hon. Members for Beckenham (Mr. Merchant) and for Broxtowe referred to relations with eastern Europe, a matter which should concern all of us. There is a crisis in eastern Europe. There is a particular crisis developing in Russia. One reads the news coming out of Moscow these days with increasing alarm. Economic and social problems are leading to political problems.

I must say to the hon. Member for Beckenham that Britain must do more through local authorities and central Government to assist eastern Europe. Like many others, I believe that we need a latter-day equivalent of a Marshall aid plan for eastern Europe. If conditions deteriorate badly in eastern Europe, particularly in Russia, the political implications for western Europe will be profound. It could be a tragedy of historic proportions, and it is not good enough for western Governments to stand on one side saying, "We hope that the reforms will work. We are looking vary favourably at you. We are keeping our fingers crossed, and we are giving you a little money." That is not enough. We are not responding sufficiently to the enormous changes that are taking place in eastern Europe--changes which are unimaginable in our society. We think that we have problems in Britain, and Labour Members often talk about the problems created by the

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Government's economic policies, but ours are as nothing in comparison with the problems of eastern Europe, particularly in Russia.

I hope that the Bill will offer the Government a greater incentive to do far more in conjuction with our European partners to assist those people of eastern Europe who are going through such tumultuous changes. The demands on local government for advice and assistance from central and eastern Europe and the third world are enormous, but they represent the desire of communities in those countries to control themselves. Inquiries have already been made of local authorities about, for example, Britain's electoral arrangements. The hon. Member for Beckenham mentioned Lithuania. I wrote a report for the Council of Europe on Lithuania's application for membership of the Council of Europe. One of the problems that emerged during my two-day visit to Lithuania--I can assure hon. Members that that was no junket!--was how to organise political parties, voting and registration. Our local authorities have great expertise on such matters. Countries such as Lithuania look to us to tell them how to organise free elections. We must respond generously to those requests, and no doubt the Bill will facilitate that.

Such countries are also asking about organising individual services. The hon. Members for Broxtowe and for Beckenham and others mentioned waste disposal, which is an important matter. Many east European countries have no real standards of waste disposal, and one saw how appalling it was when the great security blankets were lifted in countries such as Albania and Romania. When we saw how bad conditions were in eastern Europe, it put all our problems into context.

On one of my visits to the German Democratic Republic, I took a close interest in waste disposal, which has always been a matter close to my heart--for many obvious reasons, some uncharitable Conservative Members might think. When I was chairman of the public services committee on Lambeth borough council, it was always a fascinating subject. One pulls the chain or sticks it in the dustbin and tends to forget about it. It is fascinating to know what happens after that. In eastern Europe, when one pulls the chain it does not normally work ; it certainly did not do so in Lithuania when I was there recently, but that was a nasty experience on which I do not want to dwell too long.

When I was in the German Democratic Republic, I saw how the west Berlin authorities had taken advantage of the low standards in east Berlin. They had moved their rubbish over for the east Berlin authorities to deal with. The German Democratic Republic authorities were happy to take the hard currency--God knows where it was going--but the irony is that the federal republic has now inherited many of the problems that it helped to create. Our waste disposal authorities are very efficient and have much expertise to offer east European countries, where the standards of environmental protection are abysmally low, to put it mildly.

My hon. Friend the Member for Workington mentioned direct labour organisations, which have come in for a lot of criticism in the House, some of which has been fair but an awful lot of which has been very unfair. It is good to know that the expertise of the remaining direct labour organisations can be effectively transferred to other countries in the east.

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Mr. Andrew Miller (Ellesmere Port and Neston) : Will my hon. Friend join me in congratulating Ellesmere Port and Neston borough council direct labour organisation whose workers organised convoys to Romania and have adopted an orphanage there, thus creating a link between Romania and the town? That is an example of what a direct labour organisation can do to promote the concept behind the Bill.

Mr. Banks : I certainly join my hon. Friend in offering congratulations. I take the opportunity to say that many organisations in this country, especially voluntary organisations, are doing much to relieve suffering around the world, not only in eastern Europe but in Somalia and elsewhere. The House must always be prepared to pay full tribute to the people who not only contribute financially but often risk their lives in the provision of humanitarian assistance to areas far less fortunate than ours. I return to the overseas requests to local authorities for their expertise, especially the request about forms of local taxation. I was surprised when I heard of such a request--I assumed that people were getting in touch with local authorities to find out how to avoid the mistake of the poll tax, which I assume we would not wish to export. The Under-Secretary of State for the Environment, the hon. Member for Hornchurch (Mr. Squire), was a poll tax rebel, and rightly so. I am glad that his rebellion was duly rewarded in the end, although it took a long time, as it did for me. As one rebel to another, it is nice that we have reached a position of junior responsibility, which is wholly unpaid in my case but rather more remuneratively rewarded in the Minister's case.

We can tell other countries about local taxation, if only what to avoid. We can tell them about mechanisms of accountability, which is connected to electoral arrangements. Accountability is very important because local government accountability and democracy underpin parliamentary accountability and democracy. We tamper with them at our peril, and I believe that we have tampered far too much. Consumers' and citizens' rights are new rights which countries in former totalitarian regions are now seeking to establish for the first time, and not merely by means of constitutions on pieces of paper which set out the most wondrous array of freedoms, none of which applies in reality, but by real consumer rights and citizenship rights. They are the areas of expertise which our local authorities can offer.

Local authorities are the bodies best placed to meet the myriad needs of individuals in their daily lives. The decisions taken by local authorities affect the daily lives of our constituents far more than the Acts passed by central Government. When I walk around Forest Gate, I am regularly seized by constituents--not by the throat, I hasten to add--who ask why, for example, the streets are so dirty. I always say that it is not the councillors who throw around the dirty rubbish but the dirty people who live in the area. They also ask why they cannot get their child into a particular school or get a place in hospital.

Their questions are always about local services--they rarely stop me in Forest Gate to ask about the situation in Bosnia. That does not mean that they are not interested--of course they care--but their daily lives are affected by the actions of their local authorities. The ability of local authorities to deliver services is very much affected by the decisions made in the House and in

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the Departments of central Government, so, although we are not directly responsible to the people on the street, we are indirectly responsible, because we decide the resources that will be available to local authorities for the discharge of their responsibilities. The list of those responsibilities is vast--it includes homes, safety in those homes through the fire services and the police, safety in the streets, transport, education, social security, leisure, arts, sports, heritage and jobs and training through the fostering of economic development.

Many local authorities have economic development units which are doing a grand job in trying to mitigate the worst excesses of central Government economic policies. Other local government services include encouragement of and funding for the voluntary sector, environmental health, acting as a consumer watchdog, planning the physical environment, waste collection, waste disposal and licensing, including recycling, and the control of building standards. All those services have an impact on our constituents in their daily lives ; hence local authorities are very much in the firing line. The Minister and Conservative Members have made the lives of local councillors pretty miserable these days. I find it strange--not wondrous strange, but still strange--that people want to stand for their local authority any more. They get abused by local newspapers and national newspapers. Their range of duties is continually prescribed by central Government. The resources available to them are limited by central Government. They are denounced by Conservative Members. Often if they are Labour councillors, they are attacked by their own local parties. They are asked, "Why is the council carrying out the cuts imposed by this lousy Conservative Government? Why are you doing the Tories' dirty work? You are nothing more than the running dogs of British imperialism." That is the sort of language one expects to hear in my general committee these days.

In London, many councillors simply stand down because they are not prepared to carry on trying to run services with the inadequate resources provided by central Government. It is not only Labour councillors who think in those terms. Harrow council, a true blue Conservative council, made similar noises recently when it considered its standard spending assessment and the budgets with which it would have to deal. If the Minister is spreading such discontent in true blue areas such as Harrow, one can imagine the problems he is creating in good, solid socialist areas such as Newham. Although he is probably not very worried about the latter, he should be a little more concerned about the former.

Local authorities are grappling with some of the most pressing contemporary problems, especially in inner-city areas and areas that have been affected by industrial decline. The problem of homelessness is appalling. At my advice surgery tonight, 60 per cent. of all the cases will be about homelessness. It is a crisis. I know that that word is overused in politics, but it is true that homelessness is a crisis in London and elsewhere, as evidenced by the number of people who are sleeping rough on the streets.

At this time of year, everyone is concerned about the homeless, but that concern should not be confined to the run-up to Christmas. It may give us a feeling of having done something when we see Crisis at Christmas open up warehouses--there are many empty warehouses in London and elsewhere--and we see the homeless getting a bit of Christmas cheer. That may relieve our consciences,

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but it should not. The problem of homelessness should stay uppermost in our minds all the time. It is unacceptable in the latter part of the 20th century to have so many thousands of unemployed construction workers while so many thousands of people are homeless. Surely it cannot be beyond the wit of even this Government to bring those two together to provide the decent homes which are so necessary.

Before Conservative Members ask about empty local authority properties, I point out that no local authority deliberately keeps its properties empty. I assure hon. Members that in Newham, local Members of Parliament have regular meetings with housing officials to ensure that such a criticism can never be validly levelled at the borough. It would give me no satisfaction, and it would weaken my argument in criticising the Government, if I knew that the local authority for which I have some responsibility and to which I have some accountability was failing to fill its voids as fast as possible.

Local authorities have to deal with other issues, such as illiteracy, environmental improvement and the problem of drugs. Drugs are a tremendous problem in London. In recent discussions, Scotland Yard said how worrying the drugs problem had become. Other local authority services include job creation, job training and crime prevention. They are all matters with which we are having to deal in this country at the moment, but our problems pale into insignificance in comparison with those of eastern Europe, where there has been an enormous increase in the supply of drugs, in crime on the streets and in homelessness.

Many people in eastern Europe must be wondering what they have let themselves in for. We must think carefully about that because if, in comparison with what is happening at the moment, Mr. Brezhnev's presidency should start to look like the halcyon days, or Joseph Stalin like a kindly old gentleman who knew how to provide decent services, we should be in trouble, too. The east Europeans will be in more trouble than us, but we will also be in trouble. We must recognise our shared responsibility. As we battle against homelessness, illiteracy and drug-related crime and drug provision, we have things that we can tell and expertise that we can pass on to those grappling with those problems openly for the first time. The concept of the community governing itself within the laws of the country concerned is similar to the principle of subsidiarity as it should be applied within the member states of the European Community. I find it rather depressing--perhaps I ought also to find it strange--that the Government bang on about subsidiarity in the EC when what is needed is a bit more subsidiarity in the relationship between central and local government. At the moment, local authorities are faced with a great centralising Government, whatever the Minister may protest to the contrary. Centralisation was the natural instinct of the previous Prime Minister. I hope that it may gradually abate in the few years that the present Prime Minister has left to him. It would certainly be a great improvement if he recognised that we need to devolve more powers to local communities rather than taking powers away from them.

Dr. Liam Fox : In view of the hon. Gentleman's dislike of centralisation, I look forward to hearing him welcome the opting out and local management of schools and fund-holding practices.

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Mr. Banks : I do not welcome them, because they do not give more power to local communities. Although they may give the appearance of more local autonomy, they are in fact centralising measures. What opting out and LMS mean is that the Department for Education funds schools and so decides what goes on. Those who have hold of the purse strings decide what happens. It is the same with central Government's approach to local government, and it is an old trick : one simply restricts funding and lets local authorities take the blame for the failure to deliver adequate services.

Sir Paul Beresford : I have been struggling to work out how the hon. Gentleman's remarks come within the scope of what we are discussing. I now realise that we are talking about overseas aid in reverse. The delegation and freedom of schools works very successfully in a number of Commonwealth countries, and perhaps we have learnt from them.

Mr. Banks : The hon. Member for Croydon, Central (Sir P. Beresford) need not worry too much about the extent to which my remarks come within the context of the Bill, because he is not in the Chair. I have not been called to order by the occupant of the Chair and therefore consider my remarks to be in order. It is the approbation of the occupant of the Chair and not that of the hon. Gentleman which I desire.

The problem that Britain faces is that the Government have continually attacked local authority services. It is somewhat ironic that other countries should be seeking advice from the United Kingdom on a whole range of matters in connection with which the ability of our local authorities has become increasingly limited by central Government policies.

As I said, United Kingdom local government has a long and proud record, not least in innovations subsequently adopted nationally--in public health and basic utilities in the 19th century, and in equal opportunities and recruitment in the 20th. Many of those innovations were disparaged by national politicians in this place but subsequently adopted in legislation. United Kingdom local authorities remain vital bodies with a willingness to experiment and they remain in close touch with their communities. However, as I have said, increasingly in a unitary and already centralised state without a written constitution, central Government have sought to control and even stamp out many local government activities.

There have been no fewer than 144 Acts of Parliament since 1979 on local government. Not very many of those were particularly helpful. That information was provided by the Parliamentary Under-Secretary of State for the Environment, the hon. Member for Hornchurch. Of the 144 Acts, 51 must be regarded as major and their results are well known : the virtual removal of budgetary discretion by capping and now effective capping in advance through publishing the criteria and thereby forcing authorities to budget in accordance with them ; the reduction of local revenue to an average of 15 per cent. of local spending ; the abolition of key authorities ; the transfer of key services such as further education ; compulsory competitive tendering ; national control of teachers' pay ; imposition of housing action trusts--initially without ballots until defeated in another place ; encouragement of estate transfers to private landlords ; refusal even now to allow the majority of capital receipts

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to be spent on regeneration and central prescription, for example, in education. Therefore, it sits ill on the lips of Conservative Members to talk about the advice that we can give other countries about democracy, democratic accountability and the maintenance of an effective local government system.

Sir Paul Beresford : Central Government's drive to get local government to produce value for money and standards has, over recent years, generated the expertise in dealing with the private sector to get that sector to work for local government. It has produced the information and knowledge that countries overseas seek and pay for.

Mr. Banks : It is a normal political ploy to take the credit for anything that looks good and blame everything that has gone wrong on someone else. The Minister cannot pin a partisan approach on this matter on me. It would be a very stupid politician--and I am certainly not one of those--who claimed that everything done by one side is bad and everything done by the other side is good. That is absolute nonsense. That is the very thing that I am complaining about. Some reforms have been useful. I cannot actually think of one at the moment, but no doubt a Conservative Member could assist me. Let me be charitable in this season of goodwill : the Conservative Government must have done something good in local government. However, I object to the peculiar attitude on the Conservative Benches that a Conservative local authority must mean good and a Labour local authority must mean bad. That is nonsense and it does no service to the House. It certainly does a grave disservice to local authorities.

I have always been prepared to support any and every local authority. I have been prepared to criticise authorities where necessary--both my own and Conservative authorities. However, I have always been prepared to pay tribute where necessary. I thanked the Minister for Housing and Planning when he visited Newham recently and said some very nice things and, much more importantly, gave us some extra resources. I welcome that kind of thing. That is the kind of spirit in which I hope we would go forward in terms of local and central government in the context of the Bill.

I want to refer specifically to concerns that the local authority associations have with regard to the Bill. Everyone has welcomed the prior consultation. The hon. Member for Broxtowe has done a magnificent job in consulting everyone. All local authority associations--Conservative and Labour dominated--have appreciated that.

However, there are some concerns. The first involves the requirement for consent. The associations see no need in principle to import a requirement for the Secretary of State to give his consent to individual schemes. Local authorities are responsible bodies which act within the law. They are accountable to their electors and subject to increasing tight ministerial control on their overall expenditure. The associations understand that Ministers are unlikely to want the requirement to be dropped, but welcome indications that a general authorisation is likely to be given under clause 1(2). Secondly, there are concerns about the "without prejudice" clause. It would have been preferable if the Bill

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had included a clause that made it clear that the new power had no effect on any existing power to provide technical assistance to bodies outside the United Kingdom.

The reason for that is that the new provision is likely to overlap with existing activities that are undertaken in conjunction with activities covered by other specific powers--for example, the promotion of economic development under section 33 of the Local Government and Housing Act 1989 or under general discretionary powers such as section 137, as amended, of the Local Government Act 1972. General powers are intended to be used only where no more specific powers exist. Therefore, in practice, activities would come to be undertaken increasingly under the new powers as set out in the Bill, and thereby impose a consent requirement where none applied before and further limiting local authorities' discretion.

Thirdly, there is the de minimis exclusion. I understand that an announcement is expected of a de minimis threshold below which consent would not be required. That is likely to take the form of an expenditure limit determined by the size of the resident population of the relevant authority's area, and will be issued under a general authorisation after enactment. The recognition of the need for a de minimis arrangement is welcomed by local authority associations, although they consider that a more buoyant mechanism would avoid the need for regular updating of the fixed amount against inflation. There might be difficulties if a relatively inflexible range of fixed amounts were applied to very large authorities. I understand that Strathclyde regional council and Birmingham city council are particularly active in that respect.

It will be important to establish whether the proposed limit would include the notional cost of officer time. An initial visit by officers might be necessary to assess a project before any decision is made on funding. It will be preferable to exclude altogether initial expenditure on the development of unfunded projects. It is hoped that the thresholds will be established to take account of those concerns.

Fourthly, I refer to the scope of the Bill. Clause 1(1) covers the provision

"of advice and assistance to a body engaged in local government outside the United Kingdom."

That is a fairly limited form of wording. The associations have pointed to possible difficulties in assisting bodies setting up local government and public agencies which might provide services which, in the United Kingdom, are functions of local authorities. That is an important point, and I hope that the Minister will be able to address it. I trust that, if he cannot do so now, the matter will be reviewed in Committee.

Fifthly, certain local authorities choose to channel advice and assistance through consultants. Such firms have frequently been engaged by the United Kingdom Government to act as go-betweens with institutions overseas. The associations will wish to seek assurances that the wording of clause 1(1) does not preclude such arrangements from continuing.

Sixthly, clause 1(4) excludes from the new power the provision of grants, loans or other financial assistance. There is concern that that could be taken to cover the provision of equipment, expertise and joint work on projects. As a practical example, fire authorities have been encouraged to donate fire appliances on replacement to the

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new democracies of central and eastern Europe. Such vehicles and equipment clearly have a book value, and it seems possible that clause 1(4) would prevent the exercise of the power in that respect. I am sure that the Minister will be able to clear up that matter.

Mr. Campbell-Savours : It has just dawned on me that there should be monitoring of the expenditure that local authorities entertain under the Bill, because it might be taken into account in the annual allocation of overseas aid. What are the sums involved ?

Mr. Robin Squire : They might be very small.

Mr. Campbell-Savours : The Minister says that they might be very small, but we do not know how the scheme will develop over years. It might become the central vehicle in the delivery of skills and information about skills.

Mr. Banks : I am grateful to my hon. Friend. Those matters are best kept for the Committee, although no doubt the Minister will say something about them. There must not be any charge for any of those services, however they are provided to local charge payers. That clearly must not follow. Although there is much good will within hard-pressed local communities for dealing with problems overseas, it can ruin the exercise if local electors- -local taxpayers--feel that they are losing services and losing out through local authority activity overseas.

Clearly, everything must be self-funding. When the arcane mechanisms for calculating revenue support grant and standard spending assessment are being considered at the Department of the Environment, I hope that it will be possible--to take up the point made by my hon. Friend the Member for Workington--to monitor which local authorities are becoming involved. I am sure that the Bill will shortly become an Act, and the local authorities should be monitored to see how they are discharging their responsibilities and carrying out their functions under the new Act, and to what extent that will impact on the provision of local services.

I know what the hon. Member for Broxtowe means in the Bill, which states that its provisions will be self-funding. However, it will be virtually impossible to ensure that it is completely watertight : there will be some leakage. I hope that that fact will be taken into account. To put it crudely, there is no such thing as a free lunch, even for Conservative Members. Therefore, where there may be some leakage, I hope that local authorities will not be penalised, providing that it has arisen accidentally and not because those authorities have flouted the Bill's provisions.

I congratulate the hon. Member for Broxtowe on introducing an exceedingly necessary Bill to give powers where we thought they already existed but found they did not. It has been described as a modest Bill, but I do not think it so--it is a useful and important Bill. The Opposition welcome it and will work hard in Committee to raise various issues and obtain from the Minister assurances on and solutions to a few minor problems raised by the local authority associations. I thank the hon. Gentleman for introducing the Bill and I wish it well.

1.1 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. Robin Squire) : It seems an appropriate time for me to set out the Government's position on the Bill and deal with some of the queries raised by earlier

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speakers. I shall start, predictably, by congratulating my hon. Friend the Member for Broxtowe (Mr. Lester). The Bill encapsulates two of the characteristics that he brings to the House. There has been wide reference to one of them : his knowledge of developing countries. The Bill goes straight to the heart of that expertise, and it is particularly appropriate that my hon. Friend should be introducing it. Secondly, as my hon. Friend reminded us in his speech, like me he is a former chairman of finance of a local authority. The combination of those two qualities makes his introduction of the Bill most appropriate. I warmly congratulate him on doing so and express my relief that he has returned safely from his interesting trips abroad.

I shall first dispose of the only discordant note introduced in this morning's proceedings, by the hon. Member for Newham, North-West (Mr. Banks). I assure him that it is commonplace for myself and other Ministers travelling around the country to give credit where it is due to local authorities, regardless of the nature of their political control. To make an obvious point, in recent months we have specifically recognised the work of a number of Labour authorities in relation to city challenge. We recognised the plans that they proposed, and duly acknowledged their merit in the award of city challenge.

If I dare say it to such a trendy Member, the hon. Member for Newham, North -West is in danger of being a little out of touch. We consulted and listened to local government on the important issue of whether a staff commission for new authorities is needed, possibly under the local government commission. We listened, acted and announced a staff commission. On the further development of compulsory competitive tendering in the white collar sections, we have listened to the concerns raised by local authorities across the country and responded to them. The local authorities have recognised and welcomed the steps that we have taken. Above all, the introduction of the council tax from next April has been effected hand in hand with local authorities to ensure that there are no problems.

The hon. Member for Newham, North-West may turn up here with a modern hairstyle modelled on Jonathan Ross's, but his views are stuck in the 1970s or early 1980s. He must get up to date. He need not hold his breath ; he can carry on breathing easily. We are in a good partnership and it is working well.

The Bill has the strong support of the Government. I am pleased to see that it seems to command the support of all sections of the House. Before dealing with its detail and how we envisage its operating, I might usefully go into the background for the benefit of the House and explain how we have arrived at this point.

We start with that often misunderstood idea, town twinning. There are those --the few, as ever--who have given it a bad name. The phrase "junketing on the rates" has been mentioned more than once this morning, first by my hon. Friend the Member for Croydon, Central (Sir P. Beresford), who brings considerable expertise--not to junketing on the rates but from running a very efficient local authority in Wandsworth which sets an example to authorities here and abroad. These stories of junketing have been helped along by the tabloid press, but I think that they are very much the exception. They belong much more to the past, when scrutiny of local expenditure was not as vigorous.

The town twinning movement took off after the second world war, representing the genuine wish of people

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throughout Europe to reach out the hand of friendship and to build bridges of understanding so that never again would bigots or fanatics be able to come to power on a tide of ignorance and suspicion and lead our continent into tragedy.

Town twinning is a small-scale, grassroots activity, consisting of exchanges of school children, sports teams, artistic groups and the like. Sometimes it has been extended to co-operation on technical matters. In recent years, that has increasingly happened when British authorities have been twinned with authorities in less-developed countries, but such assistance has inevitably been small scale. Although there is no single or specific piece of legislation giving power for town twinning, a number of powers exist which, together, allow for all the educational and cultural activities understood to come under traditional town twinning.

The position on technical twinning--technical assistance to a twinned overseas authority--has always been more uncertain, with lawyers working for individual authorities and the Local Government International Bureau concluding that, on balance--how else would lawyers conclude?--sufficient powers could be inferred to allow authorities to undertake such work. It was certainly understood that there would be no legal problem if the cost of such assistance were paid from central Government grant.

Following the collapse of communism in central and eastern Europe in 1989 there was keen interest among Ministers at the Department of the Environment and in the local government community in assisting the setting up of stable and efficient systems of local government in these newly democratic countries. That was seen as having the potential to make a major contribution to the achievement of political stability and economic recovery there.

The interest and enthusiasm were not confined to the United Kingdom. Within weeks of the fall of communism in the first of the east European dominoes, Poland, Senator Regulski, the Polish Minister charged with setting up democratic local government from scratch, was in London asking for our help. Delegations from Hungary and Czechoslovakia followed.

My right hon. Friend the Secretary of State for Wales, when he was Minister for Local Government and Inner Cities, led a mission to Poland in February 1990, and the value that the Poles and other east Europeans placed on our local government experience and expertise was made very clear to him.

Why us? It is clear that the east Europeans value our long tradition of democratic local government and our tendency to gradual evolution to meet new challenges. They also appreciate that in terms of their size, their budgets, the scope of their activities and their provision of local services our local authorities are probably unsurpassed in Europe and have a great deal to offer in terms of nuts and bolts experience and advice.

Visitors to this country are usually more than a little surprised to discover how much autonomy local government in Britain has. European local authorities have much smaller budgets. Visitors are taken aback when we explain that there is no general system of supervision of local authorities by the state, that local government has no

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hierarchy and no prefect or commissioner or voivode with whom everything has to be agreed. There is no Government rule book setting out how an authority should transact every aspect of its business. That is the reality in Britain. We could ask any French mayor about the reality in France, but it would be advisable to do so when he is well out of earshot of his prefect.

Dr. Liam Fox : We have many lessons to teach local government overseas, but perhaps we could learn from our own mistakes and tell those authorities about the dangers and pitfalls of over-regulation which affects not only local government but many parts of our national life.

Mr. Squire : I have considerable sympathy with my hon. Friend's view. He will remember that when we took power in 1979 one of our first acts was to sweep away more than 300 controls governing the minutiae of the way in which local government conducted its business. I am sure that there will always be opportunities for further gains in that area.

The result of what I have been outlining was a series of Foreign and Commonwealth Office-sponsored assistance programmes for local government in Poland, Hungary, Czechoslovakia and Bulgaria. The second initiative was the technical links scheme which was set up by the Foreign and Commonwealth Office and the Local Government International Bureau in June 1991. It is a joint central-local government initiative financed by a £700,000 per annum allocation from the know-how fund. Its purpose is to contribute to the growth and management of local democracy in Poland, Czechoslovakia, Hungary, Romania, Bulgaria, Albania and the Commonwealth of Independent States by supporting specifically targeted technical projects to be carried out jointly by a United Kingdom local authority and a local authority in one of those countries to help the east European authority develop its capacity and skills. Projects aim to deal with urgent technical difficulties such as, for example, environmental, public health, infrastructure or service delivery problems. Through achievement in those areas, the efficiency and effectiveness of east European local authorities can be improved and local democracy strengthened. Local economic and social reconstruction will also benefit.

Local authorities showed a strong initial interest in the scheme and nine projects were approved in November 1991. However, by last December doubts had begun to arise over local authorities' powers to do such work. A court case on another matter dealt with the scope of section 111 of the Local Government Act 1972, on which, I believe, local authorities may have been relying for power to give technical assistance, and may have strengthened those doubts. The Audit Commission, which strongly supports the objectives of the technical links scheme, received legal advice to the effect that there were serious doubts about authorities' powers to carry out such work outside the United Kingdom.

It is for the courts to interpret the law and for individual local authorities to satisfy themselves about their powers, and some have continued to be satisfied that they have sufficient powers. My Department did not dissent from the Audit Commission's view. The doubts rapidly cast a shadow over technical twinning and the technical links scheme. Authorities felt inhibited and I think it fair to say that the scheme was put on ice for a time.

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It was clear that, unless we could take action to remedy these legal doubts, we risked losing an extremely effective scheme for getting assistance to eastern Europe. We looked in vain for alternative powers, but the situation could be remedied only by primary legislation.

The possibility of an amendment to last year's two Department of the Environment local government Bills was investigated, but would have widened their scope to an unacceptable extent. Therefore, I am extremely pleased that my hon. Friend the Member for Broxtowe, who was successful in the ballot, chose this Bill. By doing so he has made it possible to save this initiative and British local government's capacity to use its expertise to help eastern Europe. We have taken two steps to help local authorities in the period before my hon. Friend's Bill comes into force, assuming that it will. The first is that the Foreign and Commonwealth Office has agreed that all significant direct costs incurred by local authorities in carrying out a project under the technical links scheme will be met from the know-how funds. Previously, most staff costs were met by the authority.

Secondly, we have made it known that the Secretary of State is prepared to sanction under section 19 of the Local Government Finance Act 1982 local authority expenditure under the technical links scheme. That power is one which the Secretary of State may exercise only in special circumstances-- for example, in anticipation of new legislation that has been announced and is not expected to be controversial and will authorise the type of expenditure in question ; in other words, where it is probable that a sanction will be required for only a limited period of time.

Where a sanction is granted, the auditor has no power to apply to the court for a declaration that the expenditure is contrary to law. We informed the Audit Commission and the local authority associations that, in the unlikely event of expenditure under the scheme being challenged by an auditor, we are prepared to offer a sanction. As my hon. Friend the Member for Broxtowe explained, the purpose of the Bill is to provide local authorities with a power to provide advice or assistance, on any matter in which they have skill or experience, to bodies engaged in local government outside the United Kingdom, subject to the consent of the Secretary of State. Like my hon. Friend, the Government intend to ensure that local authorities have, more or less, the powers that they thought they had until doubts set in last December. I say "more or less" quite deliberately. It is true that if my hon. Friend's Bill is enacted we shall have a requirement for the Secretary of State's consent that we have not had before. On the other hand, we shall also have a clear and definite power to provide overseas technical assistance where before we had only "inferred or implied" powers, uncertainty, and a reliance on a liberal interpretation of the law--some might say wishful thinking. I am clear that on balance local government will be in a stronger position after this Bill is enacted than it was in prior to the arising of the present "doubts".

Ever since my hon. Friend took on this Bill, both he and my Department have been at pains to consult representatives of local government on the way in which we should deal with the legal problem. Last summer, my officials circulated copies of the first draft of the Bill to the local authority associations and to others in local government who are prominent in the provision of assistance overseas. Subsequently, my hon. Friend and my

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officials had two full meetings with the associations and others. We tried to take on board their concerns as far as we were able, and I know that that was welcomed by the associations, who have made clear their strong support for the Bill--as was echoed this morning by the hon. Member for Newham, North-West.

We shall stay in close contact with local government throughout the proceedings on the Bill. It is an enabling Bill for local government, and we want to enable it to do a good job overseas--but there must be safeguards, and that brings us to the consent requirement. That is not meant in any way as a heavy-handed control, but as a means of ensuring that the good name of the many, sensible authorities doing a valuable job overseas is not overshadowed by the well-publicised misdeeds or excesses of the occasional crackpot authority. The consent requirement will ensure also that no significant cost arising from overseas technical assistance falls on the local council tax payer. We support such assistance, but it is not appropriate for significant costs to be met out of local taxation--it is not a function or service of local government.

However, as I say, we have no intention of being heavy handed and I do not envisage the need for many individual consent applications. We intend to issue general authorisations, which will cover most work of that type.

My right hon. and learned Friend the Secretary of State intends to give general authorisations for work under approved Government, EC, or other international agency schemes. Those authorisations will cover also de minimis expenditure, being expenditure below approved thresholds related, as was suggested by the hon. Member for Newham, North-West, to authorities' resident population, and work carried out where there is no net expenditure --that is, where grant or other income matches the amount of expenditure.

We also intend that the general authorisations will cover small-scale expenditure on advice and assistance arising out of, and incidental to, town twinning links, provided that it does not exceed twice the spending in the previous financial year. That will allow authorities to continue to undertake small-scale work of that type without having to seek specific consents.

My hon. Friend the Member for Broxtowe and my officials will be discussing the details of these proposed general authorisations with the local authority associations in the new year and I will write to the chairmen of the associations before the Committee stage of the Bill, with a model general authorisation covering those matters. If I have not already conveyed this from the Dispatch Box, I can confirm that my approach is to be very open minded, and I expect to satisfy the authorities in due course in respect of some of the smaller points made by the hon. Member for Newham, North-West.

I turn to specific points raised in today's debate. There was a marvellous balance between the significant number of excellent speeches made by my hon. Friends. I know that they will understand, however, if I begin by dealing with what was said by the hon. Member for Newham, North-West. He asked me whether officer time would be included in the provision for de minimis limits. I am open to suggestion ; we shall await representations from local authorities. I cannot accept that a "without prejudice" clause would be appropriate. The argument for such a clause is that, by providing a specific power enabling overseas technical

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assistance to be given, the Bill will remove local authorities' existing ability to do such work on the basis of general discretionary powers--such as section 137 of the Local Government Act 1972--or specific powers such as section 33 of the Local Government and Housing Act 1989, which promotes economic development. The central point, however, is the serious doubt about the legitimacy of using the existing powers. The Audit Commission's lawyers take the view that there are no existing powers for technical assistance : that, indeed, is why the Bill has been presented. It is difficult to see the purpose of a "without prejudice" clause in respect of powers that are not thought to exist. Nevertheless, to meet the local authorities' concern that small-scale technical assistance work arising out of town-twining activity should not require a consent under the Bill, the Secretary of State will give a general authorisation for such work.

As the hon. Member for Newham, North-West said, local authority associations have asked my hon. Friend the Member for Broxtowe to amend the Bill to allow local authorities to assist bodies--such as consultancies-- that help overseas authorities. I am advised that the Bill, as drafted, would allow a council to provide an overseas authority with advice and assistance, in conjunction with consultants ; if the legal position varies, I shall await further

representations.

The hon. Member for Newham, North-West mentioned the reference to financial assistance in clause 1(4). That is intended simply to prevent local authorities from providing overseas authorities with such assistance, such as grants or loans. The question has now arisen whether the provision also excludes other financial assistance, such as the provision of equipment. The hon. Gentleman mentioned the possibility of fire authorities' donating fire appliances that have been replaced. My hon. Friend and my officials will discuss such matters with the local authority associations before the Committee stage, and I am sure that we shall be able to resolve them. I shall write to the hon. Gentleman about any outstanding matters.

Mr. Tony Banks : The Minister has not yet mentioned the scope of clause 1(1), which refers to

"a body engaged in local government".

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