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5.30 pm
Dr. Alan Whitehead (Southampton, Test): I am fascinated to see the new Conservative doctrine on local government unfolding before our eyes. Is the hon. Gentleman suggesting--judging by his analysis so far, he is--that the referendum principle should apply to anything a council might want to do, regardless of the initial policy of central Government?
Mr. Letwin: No. I shall not dwell on the matter in detail, save to say that there is a specific point that differs from that which applies in respect of anything else that local government does. We are talking about central Government interfering grossly with the actions of a democratically elected authority. Our view is that, where local democracy is shown on a wide scale to yield a certain result, such intervention should not occur.
Ms Armstrong: I am delighted to be able to respond to a debate on the Bill, and I welcome hon. Members who were not members of the Standing Committee to these deliberations. I was interested in the remarks of the hon. Member for West Dorset (Mr. Letwin). I welcome his conversion to democracy that is not limited to four-yearly elections, and his recognition of the ideas that the Government set out in our White Paper to encourage far more public consultation, which are at the centre of all our proposals. Indeed, the draft Bill presented today includes specific proposals on referendums on the form of governance used in localities.
New clause 6 would impose limitations on the use of the reserve powers so that they could not be used following a referendum in which a simple majority had endorsed the council tax and at least 50 per cent. of the electorate had voted. The endorsement by local people of an authority's budget would be consistent with our modernising agenda and our drive to encourage local authorities to engage the local community more effectively; and such consultation or endorsement may influence any decision on whether to use our reserve power. However, a referendum is only one form of consultation that a local government body might choose to undertake, so we do not think it appropriate to put referendums into the Bill as the sole form of consultation to be used.
This morning, I met members of a citizens panel that is used effectively by the local authority. They were adamant about the importance of their ability to debate issues and to form an understanding of the complexities with which councils frequently have to deal. They are considering ways of ensuring that other people in their area do the same. Although they welcomed our proposals on referendums, they wanted to maintain the use of other forms of consultation.
The Bill already allows the Secretary of State or the National Assembly for Wales to determine categories of authorities taking into account any information considered relevant. The extent to which a local authority has taken steps to consult and involve its local community may well be considered relevant information for that purpose, and I
hope that it will be. Conservative Members have referred to the referendum in Milton Keynes. I saw my hon. Friend the Member for Milton Keynes, North-East (Mr. White) in the Chamber a short while ago, but he has gone now. The Bill allows deliberations such as that to have an influence on the Government, whereas existing legislation passed under the Conservative Government, does not allow us to take into account such consultation, because it cuts out any such considerations. It is precisely because we want such considerations to be part of the process to decide whether or not capping takes place that we have introduced the Bill in its current form.
Mr. Sanders:
Does the Minister accept that an expensive full referendum of all of the people is not the only way in which a local authority could go about public consultation, and that focus groups might suffice to test the public's views on what was needed?
Ms Armstrong:
I have spent about five minutes saying that other forms of consultation are important and that central Government should not, in the Bill, restrict an authority's choice of the form of public consultation it wants to employ. Consultation should be thorough, but different methods or even a combination of methods may be appropriate at certain times.
Over the next few years, wide-ranging reform and modernisation of local government will take place, so it is impossible to predict how central Government will use their reserve powers in future. We hope that we do not have to use them--indeed, we have constructed the powers with that hope in mind--but we need the flexibility to respond to changing circumstances in future years.
Mr. Swayne:
Will the Minister give way?
Ms Armstrong:
The hon. Gentleman was not a member of the Standing Committee, so it is right that he, as a Member of Parliament, should attend these debates on the Bill. As was spelled out clearly in the White Paper, we are trying to provide for a more flexible relationship between central and local government, so that local government has greater control. Only when a local authority is clearly out of step with local people's interests and flouting the national interest shall we intervene, but we need the flexibility provided by the Bill to do so. Having explained that, I am happy to give way to the hon. Gentleman.
Mr. Swayne:
Will the right hon. Lady acknowledge that, precisely because of the lack of predictability that she describes, it is proper to insert in the Bill the use of a referendum as a decision-making mechanism--not as a means of consultation, but as a proper means of making a decision and holding the Government to account?
Ms Armstrong:
The idea is to hold the council to account through a referendum, but I shall let that pass.
Mr. Burstow:
To return to the question of different forms of consultation, we welcome the Government's openness on the range of methods of consultation that could be used. However, in considering what is relevant, will the Secretary of State adopt different views on the various forms of consultation and give different weighting
Ms Armstrong:
We have to make sure that the consultations carried out are those that have enabled the widest group of people to make representations, and that they have been carried out in a clear, straightforward and honest way. The hon. Member for Torbay (Mr. Sanders) will know that I made it clear in Standing Committee that the Government would have to take into account, for example, the nature of the questions asked and the turnout in a referendum. Those are matters to which we would have regard in considering whether there had been a genuine attempt to engage with local people in coming to the decisions that were taken. We would want to see that there had been that full engagement and that the council had taken an honest approach to consultation and any more direct decision taking that it was offering to the public.
Mr. Sanders:
Will the right hon. Lady give way?
Ms Armstrong:
I want to facilitate debate, but I do not want to be accused of taking up too much time.
Mr. Sanders:
I appreciate the Minister giving way again. We are dealing with an important point. Is she saying that it is not the quantitative but the qualitative value of the consultation that will be taken into consideration?
Ms Armstrong:
I think that I have expressed our approach as fully as possible. I would not accept one focus group. Someone may tell me, "This is a very high-quality focus group," but I would not think that that was the basis for a high-quality consultation exercise. However, I do not want to be pushed into being so rigid as to say that, for example, a rural area that had developed a good devolved system of involving local people had to proceed in a certain way. Clearly, such an area would want to act in some respects in a different manner from an inner-city authority.
I do not want to be pushed into a position where we in central Government determine the method and local government feels that it has to get through our hoops. I want local government itself to be serious about how it consults and engages the public on one of the most important decisions that it has to take, which is the level of council tax that it will be setting. That is inevitably closely linked to the best value aspects of the Bill.
We want the flexibility to be able to respond to changing circumstances. We do not wish to restrict the principles that could be implemented. The hon. Member for West Derbyshire (Mr. McLoughlin), who is also not in his place, pressed the hon. Member for Eastbourne (Mr. Waterson) on what would happen to Derbyshire. Had the Bill been in place, we could have brought in representatives of Derbyshire county council, talked to them and made it clear that in our view what they had done was excessive, but that we did not want to subject the authority to re-billing. We could have made it clear
that we were giving them notice that if they did not take account of our position in the following year, the council would be designated and that council tax capping would be implemented.
That, to me, seems to be the right sort of flexibility between central and local government. Far from being more draconian, it involves engaging in mature debate with local government on the basis of clear criteria and recognising that local government is grown up. It would be giving local government the chance to amend what it is doing in future budget setting so that it can come within the national criteria of which it should be taking account.
I move on to amendments No. 98 and No. 117, which seek to change the heading of clause 28 and the heading of part 2 of schedule 2 so that they read:
"Regulation and Limitation (Capping) of Council Tax and Precepts".
It is sometimes helpful for Opposition Members to suggest amendments to improve Parliamentary Counsel's drafting. However, we take the view that the regulation of council tax that is referred to in the heading includes the new reserve powers and the limitation of council tax benefit subsidy. As one word is to be preferred to four, we prefer to leave the drafting as it is.
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