---

Ms Armstrong: I should like to help the hon. Gentleman. He may know that Lord Nolan has today published his third report on local government. He makes recommendations about how planning decisions are made and handled. We shall consult widely on that in the light of the report, and will therefore be able to return to some of the issues that we discussed in Committee. I do not believe that those issues need detain us at the moment, but we shall take any recommendations seriously and consult on them.

Mr. Pickles: That is most helpful. In Committee, the hon. Lady said that the issue was one of certification, and had nothing to do with planning. If she is moving from that position, that is marvellous.

Ms Armstrong rose--

Mr. Pickles: I hope that the hon. Lady is not going to disappoint me by retracting.

Ms Armstrong: I am trying to be helpful. What I have just said does not interfere with what I said about certification. We shall deal with any concerns about planning issues through consultation and our response to the Nolan committee. I do not want the hon. Gentleman to run away with the thought that we are not serious about that, but nor do I want him to think that we shall have to

8 Jul 1997 : Column 836

come back to the Bill with subsequent amendments. The Bill deals adequately with the situation. Planning issues will have to be dealt with in the other way.

Mr. Pickles: I cannot imagine the hon. Lady being anything other than helpful. She claims that what she has just said does not interfere with what she said in Committee, but it slightly contradicts some of what she said before.

The public would expect to know about the state of planning in certification. I cannot put that better than Mr. Charles Kirkman did. He is quoted in the Nolan report, setting out the problem that we are asking the Minister to address. He said:

"I appreciate that this is a difficult problem to solve but it does appear in principle wrong, that councils should determine planning applications, in which they themselves have a strong financial interest. Even if a theoretical division of development and planning functions were introduced, it would be difficult to implement under a single Chief Executive."

I share that view. I recognise that the hon. Lady will want to return to the Nolan recommendations, but we must consider the issue. We all felt deep shame when we read this morning about the problems of Doncaster council. The problem is not just the level of corruption in Doncaster, but the apparently cosy relationships between developers and councils.

I repeat that we do not intend to press for a Division, but we expect the Government to look carefully at the difficult issues of conflicts of interest.

8.4 pm

Mr. Tony Colman: I congratulate the Government on the speed with which they have brought the Bill forward. We must remind ourselves that it is still only 68 days since the general election. As chairman of 4 Ps, I know that there was no Bill ready to inherit. For some time, 4 Ps had been asking for one, representing local authorities and the private companies working on PFI projects. Bringing the Bill forward so rapidly shows the Government's determination to do business and to ensure that public-private partnerships flourish between local authorities and the private sector.

I was surprised to hear the hon. Member for Brentwood and Ongar (Mr. Pickles) talk about a Damascene conversion. That conversion has really been on the other side. My right hon. Friend the Member for Hull, East (Mr. Prescott) started down the road towards the private finance initiative back in 1991. It is important to remember that it is a Labour party idea. We are now going to demonstrate properly how it can be carried into local government and other areas.

I am pleased that the Opposition do not want to press for a Division, and that they support the Bill. I hope that the slight threats issued by the hon. Member for Brentwood and Ongar do not presage possible changes in another place. I am concerned, because the private sector and local government want to get on with the projects. We want to give local government and the private sector the assurances in the Bill.

Credit is due to officials at the Department of the Environment, Transport and the Regions and at the Treasury, as well as to the 4 Ps legal forum. In particular, I pay tribute to the work of Paul Bryans and Peter Fanning, the new chief executive of 4 Ps, for their work

8 Jul 1997 : Column 837

in preparing the Bill. We have had to concertina the consultation, but local government and private sector lawyers were fully involved. There were 24 Government amendments in Committee, showing how those views were taken into account. As a humble Back Bencher in the Government party, I take pride in the Bill, which I believe will be acceptable to those to whom it will apply.

Clifford Chance--one of the largest legal practices in the United Kingdom and a member of the 4 Ps legal forum--has welcomed the Bill, calling it a

"quick fix response to current uncertainties about local authority powers"

and

"an improvement on the present position."

Many other legal practices, including Evershed, have echoed that strong endorsement of the Bill as a way forward.

The Bill has clear, limited objectives, addressing the concerns of private companies wishing to do business with local authorities. Those objectives were drafted against an extremely complex framework of local authority legislation and regulation. As a former leader of a local authority, I can vouch for the difficulties that the Bill has had to confront to fit in with that legislation. Some Opposition amendments could not be taken on board.

The Bill appears to meet its limited objectives admirably. However, the private finance initiative is a new and developing approach for local government. It would be imprudent to rule out the possibility of further legislation being needed should gaps emerge as ideas for public-private partnerships develop. I have every confidence that the Government will be ready to act if the need arises.

8.8 pm

Mr. Burstow: I shall try not to detain the House too long, but I should like to raise several points that were mentioned earlier but remain of concern.

First, I should like to pick up one or two of the comments by the hon. Member for Brentwood and Ongar (Mr. Pickles). He remarked on the Government's Damascene change of attitude on the PFI. We seem to have witnessed two roads to Damascus this evening, as he made some refreshing and honest comments on the validity and value of the PFI as a significant way of levering private finance into local government. I was grateful to witness two Damascene changes of belief tonight.

Secondly, the hon. Gentleman referred to our discussions in Committee about the need to be concerned about conflicts of interest that might arise in determining planning applications. I agreed with the Minister's comments in Committee, and raised concerns that accepting an amendment that would effectively put an obligation on an authority to have regard to its planning decisions in its contracting arrangements could be construed as fettering the discretion of elected members of local authorities in discharging their planning responsibilities. I would not wish that to be included in the Bill in any way, shape or form.

The hon. Gentleman and the Minister referred to the third report of the Committee on Standards in Public Life, and particularly to the section dealing with potential conflicts of interest. I draw attention to the conclusion of that section of the report, which states:

8 Jul 1997 : Column 838

"Our conclusion is that the balance struck at present between local autonomy and central guidance and supervision is broadly correct. The Department of the Environment must however be kept fully informed and show due diligence. It must not hesitate to step in if public disquiet is clear. Respect for local autonomy is a good principle, but it has led the Department to fail to respond to serious local concerns in the past."

The report then makes two specific recommendations, to which I am sure the House will return.

The question of autonomy goes to the heart of what the Bill should have been about. It has been our contention throughout its passage that an opportunity has been missed to pursue something in which we believe passionately, and which we thought, in a measured way, the Government also supported--the idea of extending to local authorities a power of local competence or, as the Labour party calls it, a power of local initiative. We were hoping that the Bill would provide an opportunity to engage with the Government on how we might achieve that end.

We do not agree with the view advanced by Ministers and shadow Ministers that a power of general competence is an illusion, and is simply symbolic. In evidence for that belief, we point to the many examples of powers of general competence that operate in other European countries that cherish and protect their local government in a clearer constitutional framework than ours.

I was grateful to the Minister for giving us on Report assurances in respect of the potential for exposing officers to liability for negligence. However, we regard the Bill as something of a red herring. That is not just because we believe that a power of general competence would address many of the issues that have caused concern in the business community in terms of the ability to enter into binding contracts with local authorities.

We also believe that the Government have slipped into the same habit that the previous Government had, of imposing duties on local authorities rather than giving them discretions. We fear that, although the Minister has told us that the Bill imposes no new duties, we should have done one of two things tonight. Either we should have implemented a power of general competence, or we should have sought to clarify the law in respect of the powers and duties of local authorities. The Bill forces the obligation on to local authorities, and creates a cumbersome and bureaucratic procedure.

Like the official Opposition, we have no intention of dividing the House as we believe strongly that although the Bill is imperfect, it provides some reassurance to the private sector and in that sense it represents a useful safeguard. However, if the Government are serious about building a new relationship with local government over the next few years, as I am sure they are, because they have many friends and colleagues in local government--they probably want that relationship to extend beyond the Labour party--they have to engage in a serious discussion about what a power of general competence might mean, as many in local government--not just from the Liberal Democrats but across all parties--believe that it is an appropriate next step.

---