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7 Jan 2003 : Column 122—continued

Mr. Edward Davey: Will the hon. Gentleman give way?

Mr. Clifton-Brown: No, I will not. I have only one minute in which to sum up.

To sum up, Mr. Deputy Speaker—Mr. Speaker, I do beg your pardon! Happy new year!—this is a highly centralising Bill that will introduce redistribution on a grand scale: redistribution of housing receipts, housing revenue accounts, and rent limitation subsidies. Indeed, it will set rents in the public sector for the future in this country. The Bill gives the Secretary of State huge order-making powers. We will oppose it root and branch and we will seek to amend it in Committee with all the vigour that we can.

9.45 pm

The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Christopher Leslie): It gives me great pleasure to follow the hon. Member for

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Cotswold (Mr. Clifton-Brown) in summing up this debate. I certainly agree with him on one issue at least: I also wish you a happy new year, Mr. Speaker.

The relationship between central and local government is at a crucial juncture, and it is entirely proper for the Government to help to ensure that all communities have their right to decent local services fulfilled. It is also right, however, that Whitehall should begin to have more faith in local councils to deliver quality local services. We need to put more trust in local government to do the right thing, and the Bill takes us further forward in that regard. Relations between local and central Government are improving, power is being devolved, and more freedoms and local responsibilities are being given to councils.

The Bill proposes that unnecessary controls and regulations should be replaced with a more appropriate, targeted approach, recognising and rewarding the best-performing councils and encouraging improvements in others. The Bill is designed to help local government to be more responsive to local needs and local pressures—precisely the point made by my hon. Friend the Member for Leeds, West (Mr. Battle) in his excellent contribution earlier. I am pleased to say that the Local Government Association has welcomed the Bill, and the significant new freedoms that it contains. The Welsh Assembly also supports the specific clauses relating to Wales. The Bill is a key ingredient in our wider policy approach, and, of course, needs to be looked at in the wider context of the White Paper and of other changes that we have made to devolve power, raise standards, invest more, increase funding and give greater freedoms and flexibilities to local government.

At the outset, I would like to say a brief word about the fire service, as my right hon. Friend the Minister for Local Government and the Regions mentioned earlier. The fire service is a local government service, and, in the light of the publication of the independent review of the service under the stewardship of Sir George Bain, the Government are determined to press ahead with changes in line with the principles that he set out. The fire service needs modernisation, but fire chiefs are often hampered in making changes by antiquated requirements to get the Secretary of State's permission, as set out in section 19 of the Fire Services Act 1947. Fire chiefs need to be given more freedom to manage and to modernise, so the Government will repeal the relevant parts of section 19 to help local chief fire officers to implement a risk-based approach to fire cover. The Fire Brigades Union has today tried to paint that change as the removal of the right of the public to be consulted. Nothing could be further from the truth. Chief fire officers and fire authorities will want to involve the local community in shaping their fire and rescue services, but there is no longer any need for every dot and comma to go through the Whitehall machine. Reform and modernisation have to proceed.

There are many detailed provisions in the Bill, but it will be impossible for me to go through every one of them in the time available. Many hon. Members talked about the provisions relating to council tax reform, and the Liberal Democrats—in the shape of the hon. Member for Kingston and Surbiton (Mr. Davey)—now want to scrap council tax altogether. Perhaps we will

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hear a little more in Committee about what they intend to replace it with, although I suspect that they are less clear on that. The proposals to give councils the power to reduce the second home discount to 10 per cent., to reduce or remove the empty homes discount and to introduce other council tax discounts have been welcomed. I realise that they have been opposed, in part, by the hon. Member for Cities of London and Westminster (Mr. Field), but they have been welcomed in other ways by the hon. Member for Isle of Wight (Mr. Turner). We shall have to see which of those hon. Members gets on to the Committee.

Few Members mentioned the exemption for students from joint and several liability for council tax, although many students in further and higher education will welcome that provision. The hon. Member for Kingston and Surbiton welcomed as sensible the introduction of the new statutory revaluation cycle, to take place every 10 years. Many hon. Members took note of the new power to change the number of valuation bands. The hon. Member for Brentwood and Ongar (Mr. Pickles) did not want this, but I believe that it may be necessary to improve fairness and the level of progressiveness in the council tax system. We have not made decisions on that yet, but it makes sense at this stage to take the position that we have adopted. My hon. Friends the Members for Denton and Reddish (Andrew Bennett) and for Wigan (Mr. Turner) have rightly pointed out the economic realities. Some people feel that they are being penalised by the low value of their homes, with band A being too wide. I am pleased that at least we have the support of the Liberal Democrats in that regard.

There are many changes relating to business rates. Very few Members went through them, so I shall not dwell on them too much. However, I believe that they are necessary and administratively sensible.

Many Members referred to housing capital receipts. In particular, the pooling arrangements have been criticised and questioned. The hon. Member for Kingston and Surbiton and the right hon. Members for North-West Hampshire (Sir George Young) and for Skipton and Ripon (Mr. Curry) were worried about the provisions. They were queried too by my hon. Friends the Members for Stevenage (Barbara Follett) and for Hemel Hempstead (Mr. McWalter). I shall make three points. First, clause 11 applies only to housing receipts, not to other capital receipts. Secondly, it is principally right-to-buy receipts that will be pooled alone. It is—[Interruption.] Perhaps the hon. Member for Cotswold should listen to this because he was incorrect on this matter earlier. It is not stock transfer—large-scale voluntary transfer receipts—that will be involved in the pooling. The right hon. Member for North-West Hampshire was also incorrect on that matter. The receipts did not accrue, therefore, as a result of prudent debt management, but as the result of individual decisions of householders to buy their properties. It is not a question of penalising prudent authorities. It is principally right-to-buy receipts that will be pooled.

Mr. Clifton-Brown: In his clarification mode, will the Minister clarify the matter further? Can he confirm that there will be no element of retrospectivity and that there will be receipts only after the Bill receives Royal Assent?

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Can he confirm also that there will be no element of pooling of clawback from previous sales—that is, uplift in value and clawback from previous sales?

Mr. Leslie: I am happy to be able to confirm those points. However, I shall go further and say that I hope that the hon. Gentleman will be persuaded that the principle of pooling is the right approach to take. It is the fairest approach to ensure that we treat equally all authorities throughout the country and spend on the basis of need, bearing in mind especially deprivation and disadvantage.

We have increased spending on housing by more than two and a half times. It is precisely to tackle the issues raised by the hon. Member for Guildford (Sue Doughty) that we need to ensure that investment in housing is made on the basis of need for social purposes.

The hon. Member for Mole Valley (Sir Paul Beresford) rather peculiarly attacked clauses 101 and 102, which are designed to protect employees of local authorities where contracting out is to be conducted on the basis of staff transfers on preserved terms and conditions unless there are exceptional circumstances, and where transferees are to be offered either retention of their local government pension scheme or a broadly comparable scheme. I believe that it is important to institute a measure of protection for local government employees. I am glad that the Bill contains such provisions.

There are important provisions that relate to better accounting and financial management practices. For example, we will ensure that we have a prudent level of reserves set in local authorities. The hon. Member for Kingston and Surbiton opposed these provisions. However, there are some extreme cases—for example, Hackney, Walsall and others—that we cannot ignore. We need to have a safeguard against some of the more extreme eventualities. I am concerned that the Liberal Democrats are perhaps looking slightly reckless and imprudent. None of us would want that, would we?

It is important also that the provisions to ensure that councils monitor their own budgetary performance are approved. That is not about intervention but simply about following good practice. I believe that when these matters are considered in Committee, Members will come to realise that point. There are many other technical provisions about resource accounting in terms of the housing revenue account. I believe that we are taking an equitable approach. It is simply an accounting change. The financial position of authorities will not be affected.

My hon. Friends the Members for Denton and Reddish, for Brighton, Pavilion (Mr. Lepper) and for Bedford (Mr. Hall), the hon. Members for Cities of London and Westminster and for Kingston and Surbiton and others, dwelt on the provisions relating to business improvement districts. I am pleased to have their support. The official Opposition oppose the measures, despite the fact that the Confederation of British Industry has given them its full support. BIDs will create partnerships between businesses and local councils, which will work together to improve their area. I heard the point made by my hon. Friend the Member for Bedford, and there are safeguards in the provisions. There is a double lock on the vote because there is a

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requirement not only for a simple majority but for one based on the aggregate rateable value. That is very important. The nature of the activities of the business improvement district and the levy must be set out before the vote.

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