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26 Nov 2002 : Column 211—continued

Mr. Lansley: We must not understate the Government's proposals. I am sure that the hon. Gentleman has noticed that page 45 of the White Paper sets out an indicative expenditure budget for the regional assembly in the north-east. It has a transport budget in the form of £1 million for the rail passenger partnership. Given the importance of transport in

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regional economic development for the north-east, that is an indication of how little influence an assembly would have over the major issues.

Mr. Davey: The hon. Gentleman makes an excellent point very well. The problem that the Government will have when people are being asked to vote on the regional assemblies is that when they read the White Paper, they will see the lack of powers that are being given to them. Many people who would usually be huge advocates of regional devolution will say, XThis is not what we wanted or asked for." They might vote no and some will certainly abstain. The Government are shooting themselves in the foot.

That returns me to one of my original remarks. It may be a little unfair to the Deputy Prime Minister to say so, but I think that he has lost the argument in the Cabinet and that the Chancellor and the Prime Minister have overruled real devolution because they are scared of it. We have therefore been given paper tiger elected regional assemblies. Yes, we may be able to build on them in future, but they are not impressive and certainly do not live up to the rhetoric.

Norman Baker (Lewes): Does my hon. Friend accept that, if assemblies are to work, as I hope they will, people must feel affinity with the regions in which they are placed? The south-east is a huge economic engine encircling London. Does my hon. Friend accept that there is a case for splitting it into two so that people feel affinity with their areas? People in Lewes feel no affinity with Milton Keynes.

Mr. Davey: There is a very strong argument for such an approach, and I am grateful to my hon. Friend for making that point. I shall deal later with the fact that one of the problems of the Government's proposals is that they have taken the boundaries from the Office for National Statistics and indeed from the Conservatives, and set them in stone for no obvious reason.

The Liberal Democrats believe that one of the biggest holes in the plethora of powers that are not going to the regional assemblies is the fact that national health service responsibilities are not being devolved. Looking around the regions, it is the NHS that has the largest number of quangos and bodies without any regional representation. At a time when we are having so many problems in trying to run the NHS from the centre and to micro-manage an organisation with so many employees and other organisations inside it, surely we should start learning from experience in other countries. Countries such as Canada and countries as small as Denmark have devolved their health services to their regions and below, trusting the people so that those in the lower tiers of government run their whole health systems. Unsurprisingly, places such as Canada and Denmark have much better health systems as a result and people are far more satisfied with them than with the NHS.

Mr. Gordon Prentice: If the NHS were to be balkanised in that way, would there not be regional differences in the standard of health care? Would the Liberal Democrats embrace such differences?

Mr. Davey: I am very interested in the hon. Gentleman's comment. He clearly thinks that, after

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almost 60 years of the NHS, complete uniformity has been achieved and everyone gets exactly the same service. Of course, they do not get such a service and that is a nonsensical argument.

The importance of devolution is that it would allow local people choice to set their own priorities in their regions. As we believe that tax-raising powers should accompany devolution of powers over the NHS, we also think that people should decide how much they want to spend on it. That is a major hole in the provisions and a major difference between our approach to regional devolution and the Government's.

Mr. Brady: The hon. Gentleman confirms that the Liberal Democrats want regional government to be able to raise taxes. Does he see that as unlimited tax-raising power or would he cap it?

Mr. Davey: In the early stages of elected regional assemblies, there would be limits on that power. However, we believe that in due course—the hon. Gentleman will like this answer—they should be free to raise taxes as they choose, although they will be accountable to the people and the decision will be a democratic one taken by the people in the area. Again, I wonder why the Tories are so against democracy.

I should like to turn now to the details of the Bill and deal with why it is flawed and why the Liberal Democrats will table many amendments in Committee. Besides the powers outlined in the White Paper, no details on powers have been published for people to see before the first referendum, so they will be asked to answer a question without knowing all the full facts. That cannot be sensible. Okay, the Minister may say that that happened in Wales and Scotland, but it created many problems for those campaigning for devolution. The Welsh vote was almost lost. I am not saying that that was due only to the factor that I have mentioned, but I am sure that it had some impact. The Government are shooting themselves in the foot by not being clearer about the powers before the first referendum takes place.

Will the Minister for Local Government and the Regions and the Deputy Prime Minister publish a draft Bill? If the Government are not prepared to legislate before the first referendum, why do they not put a draft Bill before the House? We could then at least give the measures some pre-legislative scrutiny and the voters in the referendum would have a clearer idea of exactly what powers the Government were talking about.

Possibly the worst aspect of the Bill is the fact that the Government are confusing voting for an elected regional assembly with local government reform. I do not understand—I do not think the voters will either—why the Government have put those two issues together. They should be decoupled. If the Government are right and this is a case of XYour Region, Your Choice," surely it could also be a case of XYour council, your choice." People should be given a chance to vote on the issue, but the Government are not making such a proposal. The reason why they are not doing so is that they are running scared—the Deputy Prime Minister almost admitted it—of criticism that there might be more than three tiers

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of government. In many other countries, there are more than three tiers of government and that means that there is a bit more democracy. Perhaps if people were given the chance to vote against that and to vote for unitary structures that were separate from regional assemblies, they would choose to do so. That is their right, but surely such an approach is the more democratic and grown-up way of going about it. I should be interested to know whether, in trying to find out whether there is any great interest in holding a referendum for an elected regional assembly, the Minister will bother to find out whether there is any interest in local government restructuring.

Mr. Adrian Flook (Taunton): The hon. Gentleman spoke earlier about efficiency, but he is now talking about maintaining district councils and county councils while allowing the establishment of regional assemblies. Where does efficiency come in?

Mr. Davey: The hon. Gentleman will also remember that I spoke about democracy, which is very important. There is always a trade-off between democracy and efficiency. I am sure that a country could have a very efficient form of government under a dictatorship. I am sure that Pinochet thought that his civil service was working terribly well when he centralised all the powers. There is a trade-off and I find it odd that the hon. Gentleman does not want to give his constituents or voters in various other regions the chance to vote on that issue.

Mr. Dhanda: It is interesting that the Liberal Democrats are talking about introducing some form of local income tax and a tax-raising power for the regional assemblies. Are they also talking about introducing a third income tax if people do not opt for a unitary structure but choose a district, county and regional structure—a sort of Lib Dem triple whammy?

Mr. Davey: As the hon. Gentleman ought to know, council tax already does that. He fails to understand that the issue is about democratic choice. I think that cutting national taxes and giving power to raise them at a local and regional level is a sensible way forward.

One of the other problems with the Bill is that no boundary review was conducted before its introduction. As I said in response to an earlier intervention, we have inherited the regional boundaries from the Conservatives. I do not think that it is to the Government's credit that they have merely said, XMe too," in respect of the boundaries. They could have instituted a one-year, one-off review to find out what people in the regions felt were the right boundaries. It is a great shame that they have not done so.

Matthew Green: There is time.

Mr. Davey: Indeed, there is time if the Government get their act together. I wanted to raise one or two issues that we shall doubtless debate in detail in Committee, but I shall focus on only one before I conclude my remarks. I want to consider the ballot paper and the question. The Electoral Commission ruled that the preamble was not sufficiently clear, and the Deputy Prime Minister said that that would be taken into account.

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When we debated the Greater London Authority Bill, the Minister for Local Government and the Regions said that the relevant question had been determined through focus group research. What research has been conducted into the question for which the Bill provides? Have people in the focus groups told the Government whether they understand that the proposed question implicitly refers to local government reform? I am surprised that the Electoral Commission did not rule that the question was unintelligible. Although it did not, hon. Members should complain about it because it is unclear and does not tell people for what they are voting.

We welcome the Bill. Regional government and democracy should have been introduced many years ago. We have wasted years and millions of pounds on the quango state. The Government are therefore right to introduce the Bill.

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