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10 Mar 2003 : Column 120—continued

Mr. Raynsford: I put it to the hon. Gentleman that the arrangement for discretionary charges, which will also be available under the Bill, covers those marginal circumstances. In response to the issue raised by the hon. Member for Cotswold involving a level playing field in relation to private sector firms that might trade in the same area, it is important for local authority trading to be on a proper basis, which is why we propose the company structure.

Mr. Davey: The Minister may have made an important point for those people who will read the report of our debate, which shows why we needed more time to discuss those particular clauses. The understanding of many people in local government,

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having read the Bill, is that the powers under clause 93 with respect to charging link to powers in clause 95 with respect to trading. If he is saying that local authorities could get involved with and charge for some marginal activities without setting up a company structure, that is welcome clarification. We need more time—possibly an Adjournment debate or a debate elsewhere—to explore other aspects of those clauses. Perhaps some fears held by people in local authorities could be put to rest.

Let me make one other observation, which represents a real concern for local authorities. It involves how the comprehensive performance assessment categories have been tied to freedoms in the Bill, especially with respect to trading. The concern is that a local authority could set up a company to trade, working in partnership with the private sector and the other partners, only for a future assessment under the CPA framework to change its category. That would prevent it from trading, because different freedoms and flexibility would apply and old freedoms would be taken away. If that is to be the position in law, it will create great uncertainty when a company to trade or a partnership is established. That could prevent those partnerships and that trading from happening in the first place.

Mr. Raynsford: The Audit Commission will consult in the near future on proposals for the refreshment of CPA. We have been discussing with the Audit Commission a mechanism to ensure that, if there is a change in the category applicable to a local authority, there should be appropriate transitional arrangements, so that there is no immediate disruption of arrangements such as he has identified. There may be a period of grace for the authority to improve its performance, so that it can continue to exercise those responsibilities.

Mr. Davey: The Minister was trying to be helpful, but unfortunately he was not helpful enough. I understood that that was what the Government were consulting on, but it may not be sufficient, especially if the local authority wants to set up a robust trading arrangement with the private sector involving, for example, private investment capital. If there is the danger of an Audit Commission review, even with a period of grace, the possibility of ending the trading arrangement could prevent the private capital from being advanced in the first place. I hope that the Minister will reconsider that issue. We tabled new clauses to deal with that problem, but unfortunately we were not able to debate them. I hope that the Minister will give that point particular attention, and will accept our amendments in the other place.

I have dealt with our concerns about the mistakes in the Bill, the omissions and the lack of debate on key clauses, especially on trading and charging. In my concluding remarks, I want to focus on the provisions on which we agree with the Government, because they are the reason why we will support the Government in the Lobby tonight. The prudential borrowing regime that the Bill puts in place is an issue on which Liberal

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Democrats have campaigned for many years. Although it is not perfect, it is a major step forward and deserves the support of both sides of the House.

Business improvement districts represent a real opportunity for local authorities to work with business, and for businesses to set the agenda and set the pace of improvements in our town centres. I was proud to be at the launch of Kingston First only two weeks ago. Kingston town centre management is working with the London Development Agency and the local private sector. Kingston may be one of the first town centres to benefit from this legislation, so people in our area particularly welcome that provision.

We agree with the Government over their council tax reforms. As the Minister will know, we want to go a lot further, but these are steps in the right direction to make an appallingly unfair tax slightly less unfair.

Finally, we have made sure that section 28 will be removed from the statute books. That is a real step forward, and it had huge support in the Lobby. It is to be regretted that the Leader of the Conservative Opposition decided that he would change his position yet again. He has previously been on the record implying that it was now time that section 28 was removed from the statute book. He has now done another volte-face, and he has flip-flopped and gone the other way. The Conservative party is incredibly divided on this and many other issues. Only 77 Conservative Members of Parliament were in the Lobby with the Leader of the Conservative Opposition, which shows that he was unable to take even half the members of his parliamentary party with him.

The Bill has much to commend it, and the House should give it a Third Reading. I hope that the other place will make the amendments that the Liberal Democrats tried to make, but we were unfortunately unable to persuade the Government of their merits.

9.44 pm

Dr. Iddon : This is a complex Bill. We sat for 14 two-and-a-half-hour sittings, one of which was extended. I listened to the hon. Member for Cotswold (Mr. Clifton-Brown) complain about the lack of time, but much of that was due to the fact that the Opposition laboured some of the points, especially in the early stages of the Committee. In my view, they only have themselves to blame for not having the time to discuss some of the clauses that he complained about. Any hon. Member who is any doubt about the complexity of the Bill should have a look at clause 64. I still cannot get my head around the algebra for calculating the non-domestic rate multiplier. I have to confess, as a member of the Committee, that there are similar clauses that I still do not understand.

Local authorities have welcomed, and will welcome, the ability to borrow, the ability to trade, the relaxation in business rates, the introduction of improvement districts, and even, dare I say it, the controversial matter that we are discussing—the relaxation in local controls on fire brigades. I understand that it is a difficult time to announce the latter measure, given what is going on, but I am sure that in the end it will be welcome.

I want particularly to mention the ability to trade. As my right hon. Friend the Minister knows, I was chairman of housing in Bolton for 10 years, and we had

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a great deal of trouble buying double glazing from private firms. For example, the windows fell out because they were not secured properly, and burglars could easily get in. I could give a long catalogue of our troubles with private firms selling us double glazing and ripping us off into the bargain. Many householders also suffered from that. We therefore decided to set up our own double glazing production unit, which was greatly welcomed by tenants. Former tenants who had bought their houses wanted to buy the same double glazing product from us, but we were restricted from selling it to them by the Government who were previously in control. The ability to trade on a level playing field—not to have any advantages, but to trade equally with the private sector—has never existed before, and the independence that it offers to local authorities is very welcome. I assure hon. Members that Bolton's double glazing product would knock the spots off any private sector product. My colleagues in local authorities would say that it does not go far enough, but it is a huge step in the right direction.

I turn to housing finance. In Committee we had a big wrangle—the hon. Member for Cotswold mentioned it again tonight—about the pooling of capital receipts in housing. I am amazed that the hon. Gentleman does not recognise the difficulties that we face in the north. He criticised, as he criticised in Committee, the pooling of capital receipts in order to spend them where they are most needed. Houses in the south and south-east of England, especially here in London, are sold for huge amounts of money. In the north, we cannot get such high capital receipts. And what do Conservative Members want to spend them on? Keeping their council taxes down. I suggest to the hon. Gentleman that the conditions in which people in the north live—in council houses and in private sector houses—are so bad that he should come and have a look at them. I am in favour of pooling capital receipts and spending them on housing, not on keeping council taxes down in the south and south-east of England.

Mr. Clifton-Brown: I am grateful to the hon. Gentleman for giving way, as he criticised me. He knows full well that the rules prevent capital receipts from housing being used to subsidise council tax—that simply cannot happen. The other factor is that if one takes money away from councils that have sold their housing, they will not be able to build any more houses, so people in those local authorities will suffer.

Dr. Iddon: As the hon. Gentleman knows, there are ways and means of spending capital receipts—I have not got time to go into them. He knows the ways around the rules as well as I do.

I very much welcome the separation of housing benefit from the housing revenue account, which makes the housing revenue account completely transparent for the first time. When I asked my right hon. Friend the Minister in Committee whether that was the end of the double whammy whereby council house tenants pay for the housing benefit of their neighbours through council house rents, then, like the rest of us, pay again through the taxation system, he agreed that it was.

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I welcome the end of section 28. I listened to the debate in Committee and I have listened to it again tonight. People have become passionate for the right reasons. We have spent an awful lot of time on this—and, to be frank, I wonder whether it was worth while spending so much time on it. We just wanted a quick end to section 28. It has not happened quickly; indeed, it has not happened yet. There will, of course, be a battle in the other place.

I do not understand the Conservative Opposition's amendments this evening. They have been criticising the Government for bureaucracy in local government and education, yet, if one considers their amendments closely, one sees that they would increase bureaucracy. They wanted ballots—albeit on a small number of occasions—and they wanted schools to report on various things. They have to get their act ready. Either they want a reduction in bureaucracy or they want the increase in bureaucracy that they have been arguing for this evening.

I congratulate the Minister for Local Government and the Regions, my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), and the Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Shipley (Mr. Leslie), on the hard work that they have done. In the early Committee stages, I saw the Minister under considerable pressure for the obvious reason that he had other matters to deal with. On one occasion at least, I wondered how much sleep he had had. I congratulate my right hon. Friend and my hon. Friend.

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