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The Minister for Local Government and the Regions (Mr. Nick Raynsford): I am most grateful to the hon. Gentleman for giving way. Will he clarify whether he proposes that the boundary review should cover London, as that is not clear in the amendment?

Mr. Hammond: Of course not. The subject under discussion is the situation in England, excluding Greater London, which has been dealt with in previous legislation, as the Minister is well aware.

The proposals seem the sensible and obvious way of proceeding if there is a genuine desire for an all-England workable regional government solution. It is the absurdity and arbitrariness of the boundaries that have generated the most hostility to the Government's proposals. Their only response is simply to say that it would take too long to conduct a boundary review before implementing a referendum, but they are prepared to delay a referendum while a local government review is carried out.

Paragraph (b) of the subsection set out in the amendment deals with our concerns about pre-legislative referendums. My right hon. Friend the Member for Charnwood (Mr. Dorrell) pointed out that we are asking the public to vote for a pig in a poke. They have no idea of what powers regional assemblies would have or what authority they would represent. We must trust the Minister when he says that the detail is in a White Paper or consultation document, but we would rather see the measures in place to ensure that people are aware of precisely what the powers and responsibilities of the regional assemblies would be if they opted for them, including the tax-raising powers.

There is an almost bizarre contrast between the Government's absolute and unshakeable commitment to ensuring that local government reorganisation is done and dusted, reported on and established in black and white before a referendum is held and their apparent failure to set out the substance of the powers that will be given to the regional assemblies that will be created if the referendum is successful. People will be asked to vote when the substantive issues are still unclear, but we are told that the subsidiary issue must be resolved first. Incidentally, neither do the Government propose that the electoral boundaries of the districts used in a region for the election of regional assemblymen will be defined before a referendum takes place.

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Paragraph (c) would require there to be substantial business support in a region before a referendum is called. The Bill already provides for a so-called test of an appropriate level of interest in holding a referendum, although that is undefined. One of the Government's principal arguments in favour of regional assemblies has been that they will boost regional economic growth. At the very least, that case has not been proven. Indeed, in Scotland, the opposite appears to be the case. Scotland has enjoyed negative—if that is the right word—GDP growth in the fourth quarter of 2001 and the first quarter of 2002, which is the classic definition of a recession. Overall, in the year up to the second quarter of 2002, its GDP grew by just 0.3 per cent., which is not much more than a 10th of growth of the UK as a whole.

Mr. Doug Henderson (Newcastle upon Tyne, North): I hate to refer back to the Scottish issue again, but I must take issue with the hon. Gentleman. I do not think that any Scottish industrialist or business person—I know quite a few of them—would argue that the reason for the relative slowness of the Scottish economy is the Scottish Parliament. It is clearly due to the decline in the technology industries. There is no argument about that in Scotland, so I do not know where he got that idea from.

Mr. Hammond: I shall tell the hon. Gentleman: I got it from the CBI, which is using Scotland as an example that England should not follow, as it shows how additional bureaucracy and layers of government can impose burdens that restrict economic growth.

I am not surprised that the hon. Gentleman is confused about that, because it appears that the Deputy Prime Minister is also confused. On 20 November, referring to my hon. Friend the Member for Christchurch (Mr. Chope), he said:

XHe must have been asleep for months, during which time the CBI and other representatives of industry have made it clear that they are supportive of the proposals."—[Official Report, 20 November 2002; Vol. 394, c. 630.]

For the record, and to clear up any residual confusion in the mind of the Deputy Prime Minister, I shall quote from a Confederation of British Industry press release issued on 23 September, which stated that its members

Xhave given 'a vote of no confidence' in government plans to develop the English regions."

In case that was not clear enough for the Deputy Prime Minister, the director general of the CBI bothered to go all the way to the Labour party conference to say it again. There, he said:

XBusiness doesn't believe that regional assemblies will deliver . . . There is a real danger they could make a bad situation even worse."

I would suggest to the Minister, therefore, that it was perhaps not my hon. Friend the Member for Christchurch who had been asleep for all those months but the Deputy Prime Minister, at the Labour party conference. Perhaps those who attend Labour party conferences will have some sympathy with him.

5.45 pm

Regional assemblies will take control of the regional development agencies. The creation of elected regional assemblies is thus a key issue for business in the regions,

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and business interests have to be taken into account. Business will clearly have no vote in a referendum, if one is called, so it is right and proper that the Secretary of State should be obliged to establish—before calling a referendum—that there is substantial business support for such a referendum in the region in question.

Mr. Derek Foster (Bishop Auckland): The hon. Gentleman is now arguing that the regional assemblies taking responsibility for the regional development agencies is a substantial reason for the CBI being against the proposal. I remember distinctly, however, having campaigned for regional development agencies for 25 years, that the CBI was almost entirely opposed to RDAs—not only in the north-east, but almost everywhere else as well. This therefore seems like complete opportunism on the part of the CBI, and the Tory party is erecting it as a hurdle for the Bill to jump over.

Mr. Hammond: It is interesting that Labour Members have spent most of the last five years citing the CBI's support for everything that they are doing, whenever the CBI has made observations that the Government find helpful. Now that the CBI has made an objective observation expressing the views of business in the regions about this proposal, Labour Members want to demonise it. That is very telling.

Jim Knight rose—

Mr. David Borrow (South Ribble) rose—

Mr. Hammond: I shall make some progress if I may, because there is quite a lot to get through, and I am sure that other hon. Members will want to contribute to this debate, which is only one of the three debates that we wish to have in the first two and a half hours of our allocated time.

Paragraph (d) in amendment No. 46 seeks to introduce a requirement for the Secretary of State to produce an independent auditor's report. The Labour party manifesto of 1997 stated:

XIn time we will introduce legislation to allow the people, region by region, to decide in a referendum whether they want elected regional government. Only where clear popular consent is established will arrangements be made for elected regional assemblies. This would require a predominantly unitary system of local government, as presently exists . . . and confirmation by independent auditors that no additional public expenditure overall would be involved."

That was Labour's commitment. Our charge is that the Bill will create an extra tier of government, more bureaucracy, more red tape, more tax, more spending, more politicians, more talk, more expensive headquarters buildings and, if Labour controls any of the assemblies, no doubt more cronyism and sleaze as well.

The Minister must accept this amendment, because its words are not my words, but the words of the Labour party manifesto, copied into the amendment. The Labour party, when it was bidding for the job of government, said that there would be independent audit to ensure no additional public expenditure; now that it

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has the job, it should stick to its word; otherwise, the Minister must tell us how much additional public money and additional tax this whole edifice is going to cost us.

Amendment No. 24 seeks to introduce a slightly more objective test to replace the utterly meaningless one in clause 1(4) of the Bill, which states:

XThe first condition is that the Secretary of State has considered the level of interest in the region in the holding of such a referendum."

What does Xconsidered the level of interest" mean? Does it mean that, in the time it takes his Jaguar to get from New Palace Yard back to his departmental office, the Secretary of State has had a think about it in the back of his car? This is no test at all. There is no requirement that the interest be substantial and no requirement even that that interest be determined as representing a certain level of support for the proposals. There could be a lot of opposition to the Bill, but it would be perverse indeed to use that as a ground for calling a referendum.

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