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David Taylor (North-West Leicestershire): Would the right hon. Gentleman have the grace to concede that those very substantial municipal gains were also made in the teeth of opposition from his parliamentary predecessors in the Conservative party?

David Davis: That certainly not true. What I am talking about was often done by Conservative council leaders. However, if the hon. Gentleman wants to try to score points, I recommend that he perhaps start by reading the evidence given to the Select Committee on Transport, Local Government and the Regions when it considered the local government Bill. For example, Professor Travers pointed out only too clearly that the centralisation trends since the last war have been characteristic of all parties, and it is not particularly smart for one party to claim a monopoly of virtue. We have to recognise that there are benefits and virtues to be encouraged.

We support changes that will truly give power to local people, allowing them to take more decisions and empowering local representatives to deliver. Never were such plans more needed. Year after year, the Government have tied up councils with best value, comprehensive performance assessments, inspection regimes and red tape. Whitehall tells local authorities how to spend an ever growing proportion of their money.

In 1997, ring-fenced grants represented 4 per cent. of total central support for local authorities. The figure is now 15 per cent.—nearly four times higher. Local councils today are judged against 130 specific performance indicators. They must agree up to 46 plans with Whitehall, covering everything from pipeline safety to minerals extraction. They are monitored by four different inspection regimes, which cost roughly #600 million a year. The Government's response to all this is not to set local Government free, but to strengthen the grip of Whitehall.

Mr. Clive Betts (Sheffield, Attercliffe): Does the right hon. Gentleman welcome the proposals to increase resources for planning departments, after years of cuts under the previous Government? Does he welcome the proposals for prudential guidelines on capital spending and extra resources—again, after years of cuts under the previous Conservative Government? Does he also welcome the proposals to allow local authorities to trade more freely, after years of legislation through which the previous Government tried to do everything they could to try to stop local authorities doing precisely that?

David Davis: If I were the former leader of Sheffield city council, I would be very careful about what I said about the virtues of local government.

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To address the point made by the hon. Gentleman, I shall start with another quotation:

XThe idea that you give freedom to the people who are already achieving is quite perverse." That is not something that would bother the hon. Gentleman. The quotation continues:


XThe real issues are the Councils in the middle and the failing ones which actually just need a lot more freedom . . . If government keeps pinning Councils down, they can't do the things they want to do and services won't get better".

The Deputy Prime Minister will recognise that, as it was not my opinion but that of the former director of inspection at the Audit Commission, who now works for him in another context.

The Deputy Prime Minister (Mr. John Prescott): I'll be seeing him tomorrow.

David Davis: The right hon. Gentleman should take his advice.

As the Labour-dominated Select Committee also said:

XThe White Paper on which this Bill is based raised considerable expectation about a change in the relations between central and local government. On the whole the draft Bill appears to be far from a radical overhaul and in many cases gives more powers to the Secretary of State".

That further extension of centralisation and control, as bad as it is, is not the main aim of the Bill.

Dr. Alan Whitehead (Southampton, Test): In the light of the right hon. Gentleman's new-found localism, does he accept that there is any role whatever for central Government concerning the support of local government? If so, what is it?

David Davis: Of course the central Government have a role—to a very large extent, the vast majority of local government activities are funded by central Government at the moment. There is also an oversight role, of course, but the difficulty is that in this area, with four different scrutiny regimes and #600 million of expenditure, it is not competent. Is the hon. Gentleman's question serious? If he does not mind, I shall move on, as that is such an obvious point.

The main aim of the Bill, whichever of the three financial options the Government take, is clear: to gerrymander money from well run, high quality Conservative councils, which provide good service, to badly run, low quality, money-wasting, high-taxing, Labour crony councils, which provide poor service. That is the purpose of the local government Bill. It is the kind of gerrymandering that Britain became used to in the days of Dickens: not the best of times, but the worst of times. For people in Labour-controlled areas it may be the season of light, but for those in Conservative-controlled areas it will be the season of darkness—I am sure that the Deputy Prime Minister recognises the quotation to which I refer, and knows what follows it.

Much of this gerrymandering is being done by stealth, such as the plans to pool capital receipts from housing transfers. Of course that is not about devolving power down.

Matthew Green (Ludlow): Will the right hon. Gentleman give way?

David Davis: Not for the moment.

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This programme reflects the priorities of politicians, not the priorities of people. That brings us to the Deputy Prime Minister's flagship measure—the Regional Assemblies (Preparations) Bill. As I said, we support proposals shaped by democratic principles, which boost economic growth, slash red tape and truly give power to local people.

Mr. Mark Hendrick (Preston): When the right hon. Gentleman talks about gerrymandering, will he refer to the imposition of urban development corporations, which totally bypassed local people and local authorities, and did very little to regenerate the inner cities?

David Davis: I am afraid that the hon. Gentleman has shown that he has just walked in to the Chamber. He missed the first half of my speech, in which I talked about the problems of the previous Administration.

To return to the question of regional assemblies, we talked about ways of supporting people. The Bill will do none of those things. Let us take democratic principles as an example.

Joyce Quin (Gateshead, East and Washington, West): Will the right hon. Gentleman give way?

David Davis: In a moment.

In a democracy any referendum, especially a referendum that intends to set up a new institution such as a regional assembly, must offer a clear choice. If people are to vote on whether to establish a regional assembly, they should know what they are voting for. What powers will the Assembly have? How many members will it have? How will they be elected? What will be the cost? The order should be straightforward: plan first, referendum second. However, this Bill turns that order on its head. There will be a referendum first and a plan afterwards. The Deputy Prime Minister is asking people to vote for a pig in a poke. When asked about the issue, his Department's answer apparently was, XThere has already been a White Paper." It will come as news to Members on both sides of the House that a White Paper and a Bill are now identical.

Let us suppose that the House has the temerity to amend a Bill that creates a regional assembly. People could find that they had voted for one kind of assembly, but got another. That brings me to my first question for the Deputy Prime Minister, and I hope that he will answer it in his speech: if the House amends a Bill, thus altering the proposed structure or powers of any assembly, will the people be allowed another vote, or will they have to take what they are given?

Regional government will do nothing to boost economic growth. Indeed, it may slow it. On the Government's preferred measure of unemployment—the labour force survey—the highest unemployment rate in this country is, surprisingly, in London, at 7 per cent. The second highest rate is in Scotland at 6.5 per cent. London and Scotland may not, at first sight, have all that much in common, and their problems are certainly far from identical. However, the one thing they

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do have in common is new structures of government, and those structures are slowing down economic growth. In London,

Xwe are fast approaching a time when the financial pre-eminence of the City may become seriously imperilled."

Those are not my words, but those of Gavyn Arthur, the Lord Mayor of London, about the Deputy Prime Minister's good friend, Ken Livingstone, the Mayor of London. No wonder London is the only area of England where earnings have gone down.

Mr. Salmond: Will the right hon. Gentleman give way?

David Davis: The hon. Gentleman will have to wait; I have already given way to him once.

The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty): Give way. He has a plane to catch.

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