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Mr. Letwin: I bow to my hon. Friend's greater expertise in this area, but does he not agree that the cunning of new clause 5 is that the second part of it need not apply? Local authorities might impose council taxes but, as long as they lived up to best value, they would escape the capping provisions.

Sir Paul Beresford: My hon. Friend is absolutely right. I am concerned that the Minister may come to the Dispatch Box at the end of the debate and refer to the generosity to the beacon councils as a substitute for the new clause. [Interruption.]

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I have read all the paraphernalia about beacon authorities, and I fear that many authorities are being forced down a road that they may not wish to take. The actions of local authorities may be impeded. New clause 5 is simplicity itself--even if it is difficult technically--because it says that the best authorities, according to a best value measurement, with low council tax should be freed from the burden and be allowed to provide their services locally with the support of the voting public.

I think of two authorities in particular that have been lambasted by the Government, but time and again, the public have given them enormous support. They will be burdened by the Bill, unless we can persuade the Minister to accept new clause 5. [Interruption.] That will give us the opportunity to change the emphasis, rather than the technicalities, and remove the burden from local authorities.

9.15 pm

Mr. Gray: It is always slightly terrifying to follow my hon. Friend the Member for Mole Valley(Sir P. Beresford), who, from his time in Wandsworth, epitomises in so many respects all that is best about local government and the way that we ran it, providing the best possible services to people at the cheapest price without any of the unnecessary paraphernalia proposed in the Bill.

I am puzzled because the Minister's sedentary comments during my hon. Friend's speech seemed to imply that new clause 5 will not end that interventionism. I am puzzled also that she should find it necessary to make such sedentary remarks at all. That seems rather strange behaviour for a Minister, and if there is a way to demonstrate that the new clause would not do as my hon. Friend said, it might have been sensible for her to intervene on him in the time-honoured traditions of the House, rather than muttering from the Front Bench.

I am also cowed by the fact that I am following the speech of my hon. Friend the Member for West Dorset (Mr. Letwin), whose learning and elegance of exposition terrifies anybody who follows him. I was, however, worried when he heaped praise on Liberal Democrat-controlled Dorset county council, which is a bizarre thing to do. I must say that, hate it as I would, I should prefer to have a Labour-controlled council in my county than a Liberal Democrat-controlled council. The only thing worse would be a Lib-Lab council, which is what Wiltshire had until a recent by-election allowed the Conservatives to take control of the council, and we look forward to significant changes being made.

I was disappointed that I did not have the privilege of serving on the Standing Committee that considered the Bill, which I would have greatly enjoyed. However, I tried to follow its proceedings from Hansard and discussions with my right hon. and hon. Friends. I have experience of local government because I serve, with other hon. Members who are present, on the Select Committee on Environment, Transport and Regional Affairs, which last year produced a report on the implementation of best value, which we greatly enjoyed doing. The Select Committee is currently involved in discussing how we can improve local government finance. Without giving away any secrets, I can say that the results of those discussions will be known in a week or two. It will be interesting to find out how the Select Committee views capping and

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other aspects of local government finance in that report, and how it will influence the outcome of the debate on the Bill.

Mr. Deputy Speaker: Order. The House will have an opportunity to hear how the Select Committee conducts its affairs, but we must return to new clause 5.

Mr. Gray: I was conscious that I had begun to ramble, Mr. Deputy Speaker, and I am grateful to you for correcting me.

My point is that the Select Committee report on capping will be interesting because it may have a direct bearing on the sunset clause--new clause 5.

Conservative Members are not opposed to the principle of best value. Indeed, we think that local government exists precisely to strive continuously to provide a best-quality service to the public at an affordable cost. Delivering high-calibre services has long been a priority of Conservative-controlled councils, and we are proud of that record. Unlike hon. Members who constantly talk about us being sorry for what we did while we were in government, I am not the slightest bit sorry for that, particularly in relation to local government. I am proud of the fact that we introduced compulsory competitive tendering and reformed local government, which when we came to power in 1979 was, by and large, a complete shambles. So much of what we did in DOE terms--I worked in the Department of the Environment for two or three years--took great strides in putting right some of the worst aspects of local government.

Ms Keeble: Is the hon. Gentleman proud of the fact that the Conservative Government brought riots to the streets of all our inner cities in the early 1980s, and brought riots again with the poll tax?

Mr. Deputy Speaker: Order. These matters are a little wide of new clause 5.

Mr. Gray: Indeed, Mr. Deputy Speaker. I shall not be tempted into answering the hon. Lady's point, although from her privileged position in Cheltenham Ladies' college and elsewhere, I cannot imagine what she knows about protest in the streets of London.

Of course CCT had its downside and its disadvantages. All of us would be concerned about one or two aspects of the way in which it worked. None the less, it had two overwhelming advantages, which best value demonstrably does not have. First, it was relatively clear, straightforward and intellectually pure. We knew what it was. It was the application of the market--the use of the tendering process and the market to provide the best possible local government services. That is exactly the opposite of the interventionist and bureaucratic approach of best value.

Secondly, leaving aside the interventions that the Government had to make when CCT was not properly applied--from my time in the Department of the Environment, I remember how often that was, especially when left-wing Labour councils went out of their way to find ways to avoid applying CCT--it largely allowed local government to go about its business. By and large, local authorities put their business out to tender and accepted the best tender.

Mrs. Louise Ellman (Liverpool, Riverside): The hon. Gentleman supports compulsory competitive tendering

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and opposes best value, yet the new clause to which he is speaking deals with best value. Does he not think that his comments contradict those of the hon. Member for West Dorset (Mr. Letwin), of whom he expressed such great fear and terror?

Mr. Gray: I am grateful to the hon. Lady for her intervention. The fact that we both serve on the Select Committee deters me from being too harsh in my reaction to her remarks. The new clause implies that CCT was better. The interventionism implicit in the best value regime would end after three years if it were not used. It is a sunset clause. If a local authority does what it ought to do and provides best value at the best possible price, which is its duty, the interventionist powers of the Secretary of State will lapse.

I am arguing that that is what happened under the CCT regime. The local authority was left to get ahead with its own business. It put the business out to tender, examined the tenders as they came in, chose the best one at the best price, and delivered the best services at the best price.

One has only to look at Wandsworth, where I had the privilege to live for a number of years when it was run by my hon. Friend the Member for Mole Valley, to see what CCT could do in turning round the worst-run local authority into the best-run local authority at the best price to the taxpayer. At one stage, as hon. Members will remember, the council tax in Wandsworth went to zero. Throughout its history, the poll tax was lowest in Wandsworth.

How different from that is the best value regime. The precise way in which it will work is, to say the least, a little clouded in mystery. The Select Committee's examination of best value last year came to the conclusion that it was weak and vague at its extremities--probably a well enough intentioned sort of idea, but definitely weak round the margins. Who would set the standards by which the local authority would judge itself? If those standards were not achieved, what a large amount of intervention by the Secretary of State would follow.

The setting of standards by which the local authority's delivery will be judged--and the way in which the Government ensure that they are sufficiently robust and demanding--is entirely bureaucratic, to a degree that is beloved of Labour politicians in so many ways. They love committees, bureaucracy, regulations and restrictions. They love telling people what to do. They love to tell local government that they know best, that they will lay down what is best and that if local government does not live up to that, they will intervene. All that is so beloved of Labour in every aspect, and so hated by Conservative Members. We believe in giving people the right to make their own decisions and to lead their own lives. That is why the new clause is so important.

The thrust of the debate about the place of local government in society today, and of the debate in the Select Committee on the subject of local government finance, has been to find a way of telling local government that it has a real constitutional role to play, that it is the elected representative of the people and that it has been chosen locally to make important decisions about the way in which life is run locally, and to find a way to allow it the freedom to govern as it should.

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The new clause takes the principles of best value which, as I say, are weak, interventionist and bureaucratic, but limits them. It sets out how the best possible services can be provided at the best possible price to the electorate. We welcome that. It goes on to say that, if local authorities can do that for three years and the Secretary of State has no reason to intervene, at the end of that period, the Secretary of State will have those rights of intervention removed. That is an extraordinarily important democratic step which is directly in line with the flow of current thinking on local government.

The new clause is saying, as both parties go to great lengths to say in the Select Committee, that more authority should be given to local government--and we must find ways of handing authority back to it. There is much talk about whether it should have more power to raise its own finance. All that is important. Local government must either be a delivering mechanism--a management mechanism--or it must be true government, in which case powers must be handed back to it. That is why the Opposition feel so uneasy about many of the central proposals in the Bill.

The Bill says to local government, "You are not local government at all. I, the Secretary of State, know more about the provision of good services than you guys do. You may be elected, but that's tough. I am elected and I am the Secretary of State, and I know more than you fellows do. I shall pretend that you have a lot of powers. I shall remove CCT. That was bad because of the market and because it was compulsory"--


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