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Mr. A. J. Beith (Berwick-upon-Tweed): Will the Deputy Prime Minister accept that the Liberal Democrats have been campaigning on this issue for years? We welcome the fact that the right hon. Gentleman has brought forward proposals today. We will examine them closely to see whether they will achieve what needs to be achieved—bringing the regional government that already exists in this country under proper democratic control, and bringing down to regional level decisions that are now taken in London and which should be taken much closer to the people whom they affect.

Does the right hon. Gentleman understand that we have some anxieties about the slowness of the process, which involves two stages of legislation? When they vote, will people know precisely what powers will be available to their regional assembly, or will that depend on a subsequent piece of legislation?

Is the Deputy Prime Minister aware that we do not approve at all of his involvement of local government reorganisation in this process? The White Paper is not supposed to be about local government. If there is a job

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to do reorganising local government, would not it be far better, rather than trying to organise it from London, to let the regional assembly do it once it has been elected?

Does the Deputy Prime Minister accept that the council tax is not a particularly fair tax? It is not a very good instrument, as it will also confuse the role of local government with that of regional government, which is something quite different. Also, there is no mechanism to deal with those regions where—unlike the north-east, Yorkshire, and the north-west—there is no clear consensus about the regional boundaries. Such a mechanism ought to be established.

I hope that the Deputy Prime Minister realises that, in regions such as the north-east, there will be a continuing demand for the levels of funding that Scotland has achieved through the Barnett formula. People in the regions affected will regard that as very much part of the process. The argument about establishing a version of the Barnett formula for the north-east or north-west will not go away simply because the regional assembly argument is moving forward.

Will the Deputy Prime Minister recognise that the Liberal Democrats want to make the process work, so that it delivers to people in the regions something for which they will vote? When the legislation comes forward, we will seek to improve the package. We will also aim to help to present it more effectively than the Government have managed so far. In that way, people in regions where there is already a recognised demand for democratic control of regional government will be able to vote for it, and thus achieve it.

The Deputy Prime Minister and First Secretary of State: I thank the right hon. Gentleman very much for his words of support. The most recent Liberal Democrat document on regional policy was produced a few weeks ago, and there is a clear difference between our approaches to the matter. However, we agree on the essential objective—that people should be able to make a decision about regional government.

I look forward to the debate about the balance between the powers of regional government and local authorities. The right hon. Gentleman will be able to see how they are spelled out in the White Paper. Any confusion about the use of precepts or council tax stems largely from the Liberal Democrats' belief that the regional body should have tax-raising powers. That is a fair position, and no doubt we will hear the debate. The same proposal arose in the debates about devolution, and different solutions were found for the Welsh Assembly and the Scottish Parliament.

The right hon. Gentleman asked whether people will know about the powers available to the regions and the counties. I assure him that they will be spelled out, and it will be made clear to people where the resources will come from and what functions the bodies will carry out. We think that that is important, but we believe that a two-tier structure—a unitary and regional structure—is appropriate for regional government. However, there are strong arguments about the counties, and that means that the case will have to be made. People will listen to the arguments and will decide whether they want a two-tier structure. Our judgment is that a two-tier structure is the best.

Local authority members would not necessarily all be

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happy if a new directly appointed regional assembly decided the local structure in their area. That is one of the reasons why the Tories imposed the unitary system in Scotland without asking the Scots about it—because it was highly controversial. The Banham inquiry did not complete the arguments for a unitary system because it ran into a lot of flak in different parts of the United Kingdom. We have now come to a political judgment that it would be better to have two tiers—a regional and a unitary system of government. We look forward to the debate and the contributions to be made by Opposition Members.

Andrew Bennett (Denton and Reddish): Will my right hon. Friend resist being deflected by Conservative Members' crocodile tears about the counties, given that they got rid of the six metropolitan counties? Does he accept that there will be a major welcome for his statement on the Labour Benches, particularly in respect of transferring power from the centre to the regions? However, the balance must be that democratically elected regional assemblies are quickly put into place.

The Deputy Prime Minister and First Secretary of State: I very much agree with my hon. Friend on these matters. It is a question of balance, but at the end of the day it is about democratic accountability. The simple point is one that I have made before: decisions about the regions are currently made by local government officers and civil servants; we propose to change that so that people can choose to go for a directly elected assembly. That will provide the opportunity for directly elected members to make the decisions, rather than civil servants.

Mrs. Gillian Shephard (South-West Norfolk): Does the Deputy Prime Minister agree that the principles of accountability and transparency are important for good government at local and, indeed, given what is to follow today, national level? If he does agree, will he explain how the proposals that he has outlined will enhance those principles, given that his explanation of the proposals indicates that they will result in a mish-mash of incomprehensible and remote local government arrangements across England?

The Deputy Prime Minister and First Secretary of State: I do not accept that. Of course, the right hon. Lady has not been able to read the White Paper. There is a fundamental difference between us, which is quite understandable, and I do not mean this as a criticism. We want to give the people the opportunity to decide what their local authority structure should be. To say that it must be a unitary structure within a directly elected region raises questions about the accountability of the present structure. However, the present democratic structures in the regions can remain as they are.

People in the regions have to demand change and go through a process and a justification; then there will be a referendum in which the people will decide. We have made it clear today that if we want directly elected assemblies, we must have the unitary local authority system. I should have thought that that would have a great deal of support from the Conservatives—after all, they imposed such a system on Scotland without consultation.

Mr. David Clelland (Tyne Bridge): Some of us recognise what others will come to recognise in due

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course: that my right hon. Friend has done a great service to our nation and to democracy in the announcement that he has made today and the work that he has done on this issue over many years. His announcement will be widely welcomed in the north-east of England, although we would like to discuss certain aspects with him further. It gives the people of the region a choice that would apparently be denied to them by the Conservative party.

My right hon. Friend spoke of flexibility. Will the legislation that will introduce assemblies be flexible enough to allow for assemblies' powers and responsibilities to be widened, in consultation with the assemblies, without the need for further primary legislation?

The Deputy Prime Minister and First Secretary of State: First, I thank my hon. Friend for his kind remarks. It is generally recognised in the House that those in the north-east have been at the forefront of demanding an elected regional assembly. One can reasonably assume that they will be first at the gate.

My hon. Friend says that he will want to discuss some of the details with us. It is no secret that we will be meeting people in the north-east tonight and I shall hear their views. I am sure that it will not be total endorsement and that they will have criticisms to make. There are varying views in the north-east. Some want to see a complete parliament in the north-east, more or less, rather than an assembly. They want to keep all the powers. That is a school of thought in a number of regions, not least Cornwall. However, we must find a balance.

My hon. Friend asks whether we can go further even before we have drafted legislation or entered into consultation, and I have to say no to that at the moment. However, given what is happening in Scotland and Wales, where people are beginning to feel that they can express their views, I am not surprised that people ask for more rather than less.

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