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Mr. Redwood: That is an interesting answer to a question that I did not ask. I asked about what the Government propose in the Bill, which is the subject of the amendment tonight. I still do not understand what work his Department will do to foresee the authorities that might get into difficulty. How bureaucratic will that be? Will there be more forms or requests for information? What would trigger an investigation and what would trigger action?

Mr. Raynsford: As I said earlier, we gave an undertaking to act only in circumstances in which two tests were passed. The first was that the chief finance officer of the local authority had given advice that was ignored by the council and, secondly, that the authority was, as a consequence, moving towards serious financial difficulties. That will not apply on very many occasions and we have no intention of employing any new staff to monitor the situation. We already have good arrangements for helping those authorities classed as "poor" under the comprehensive performance assessment. The engagement arrangements are working well and, in many cases, authorities are showing real signs of improvement. That is the way in which we will continue to work to support and help authorities in difficulties to recover. We will continue with that work, but we see the need for a long stop to guard against the extreme cases that I described earlier.

The hon. Member for Kingston and Surbiton (Mr. Davey) argued that the powers in the Bill might be misused. However, the powers in the new clause are certainly capable of being misused and they should be removed from the Bill. I hope that he will agree that the powers requiring the Audit Commission to carry out an extensive survey of the finances of every local authority to guess whether it might overspend by 10 per cent. are wholly undesirable. I hope that he will not support the new clause because it is arbitrary, perverse in effect,

15 Sept 2003 : Column 633

expensive and undesirable. It is also highly centralising, which would go against everything of which he is in favour.

Mr. Edward Davey: We want to give the Minister one more chance to think again on clause 26.

Mr. Hammond: Yes.

Mr. Davey: I am glad to have the hon. Gentleman's assent. We understand some of the imperfections of the amendment, but the Minister has an opportunity to accept the principle that underlies clause 26, which is the main driver behind the amendment. We will support the amendment tonight so that it can go back to the Lords and the Government can think again.

Mr. Raynsford: Clause 26 is not before us, but the new clause is. We debated clause 26 in Committee. Perhaps his party did not advocate it sufficiently forcefully, but I have cited the view of the Conservative spokesman from the Front Bench in Committee, who advised the Liberal Democrats not to press the amendment. I also reminded Members that the other place voted on clause 26 and the Opposition were defeated. We are not debating clause 26, because it has been debated in both Houses. We are now debating a separate new clause that would have the undesirable consequences that I have outlined.

Mr. Hammond: The Minister has said several times that we are not debating clause 26. However, the new clause seeks to limit and define the circumstances in which powers bestowed by that part of the Bill, including clause 26, could be applied. It is wrong for the Minister to say that our debate tonight should not include clause 26.

Mr. Raynsford: I did not say that we should not debate matters that might incorporate provisions that might affect clause 26; I said that we are not debating clause 26. We are debating the new clause, which would have a much wider effect because it applies to the whole of part 2, including the provisions that allow greater flexibility in responding to circumstances after the serving of a notice under section 114. That is widely welcomed by local government but would be perversely hindered by the new clause, because only those authorities that had been fingered by the Audit Commission could benefit from that provision. That is an absurd and perverse outcome. The hon. Gentleman knows that the new clause is nonsense. I am sorry that the Opposition have not yet recognised the absurdity of their position and have not withdrawn the new clause.

In response to the right hon. Member for Wokingham (Mr. Redwood), I agree wholeheartedly that it is always desirable that financial difficulties should be remedied by an electoral rather than an imposed outcome. I simply put it to him that quite a lot of authorities hold elections only once every four years, so it is a bit tough to tell the long-suffering citizens of an area that they have to wait three years to remedy a serious financial crisis that could have a damaging impact on services in their area because there is no provision to act in an emergency to deal with extreme circumstances. I repeat

15 Sept 2003 : Column 634

that it is only in such extreme circumstances, where the chief finance officer has given advice that has been disregarded and the authority is seriously heading for the rocks, that we envisage using those powers. I hope that it will never be necessary to do so.

We are committed to giving local authorities more freedom; all the provisions in part 1 give substantial additional spending freedoms, in relation not only to borrowing but also in a number of other aspects. This modest provision in part 2 ensures that that freedom is matched by an accompanying safeguard against extreme circumstances. I hope that it will never be needed, but if it is needed I—and, I suspect, those who follow us in this place—will be pleased that it is there to guard against such circumstances. I hope that Members will agree that the proposed new clause, which is unworkable and undesirable, should be deleted.

Question put, That this House disagrees with the Lords in the said amendment:—

The House divided: Ayes 256, Noes 144.

Division No. 311
[6:11 pm


Adams, Irene (Paisley N)
Ainger, Nick
Ainsworth, Bob (Cov'try NE)
Alexander, Douglas
Allen, Graham
Anderson, Janet (Rossendale & Darwen)
Armstrong, rh Ms Hilary
Atherton, Ms Candy
Austin, John
Baird, Vera
Banks, Tony
Barnes, Harry
Battle, John
Bayley, Hugh
Beard, Nigel
Benn, Hilary
Benton, Joe (Bootle)
Berry, Roger
Best, Harold
Blears, Ms Hazel
Borrow, David
Bradley, rh Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brennan, Kevin
Brown, rh Nicholas (Newcastle E Wallsend)
Brown, Russell (Dumfries)
Browne, Desmond
Bryant, Chris
Burden, Richard
Burgon, Colin
Burnham, Andy
Byers, rh Stephen
Cairns, David
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Caplin, Ivor
Casale, Roger
Cawsey, Ian (Brigg)
Challen, Colin
Chapman, Ben (Wirral S)
Chaytor, David
Clark, Dr. Lynda (Edinburgh Pentlands)
Clark, Paul (Gillingham)
Clarke, rh Tom (Coatbridge & Chryston)
Clwyd, Ann (Cynon V)
Coaker, Vernon
Coffey, Ms Ann
Cohen, Harry
Cook, rh Robin (Livingston)
Corbyn, Jeremy
Corston, Jean
Cousins, Jim
Cox, Tom (Tooting)
Cruddas, Jon
Cryer, Ann (Keighley)
Cunningham, rh Dr. Jack (Copeland)
Cunningham, Jim (Coventry S)
Dalyell, Tam
Davey, Valerie (Bristol W)
Davies, rh Denzil (Llanelli)
Davies, Geraint (Croydon C)
Dean, Mrs Janet
Denham, rh John
Dhanda, Parmjit
Dismore, Andrew
Dobbin, Jim (Heywood)
Dobson, rh Frank
Donohoe, Brian H.
Doran, Frank
Dowd, Jim (Lewisham W)
Drew, David (Stroud)
Dunwoody, Mrs Gwyneth
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Ellman, Mrs Louise
Etherington, Bill
Farrelly, Paul
Field, rh Frank (Birkenhead)
Flint, Caroline
Flynn, Paul (Newport W)
Foster, rh Derek
Foster, Michael (Worcester)
Foulkes, rh George
Gapes, Mike (Ilford S)
Gardiner, Barry
Gerrard, Neil
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Roger
Goggins, Paul
Griffiths, Jane (Reading E)
Griffiths, Nigel (Edinburgh S)
Grogan, John
Hain, rh Peter
Hall, Mike (Weaver Vale)
Hamilton, David (Midlothian)
Hanson, David
Harris, Tom (Glasgow Cathcart)
Havard, Dai (Merthyr Tydfil & Rhymney)
Hendrick, Mark
Hepburn, Stephen
Heyes, David
Hood, Jimmy (Clydesdale)
Hope, Phil (Corby)
Hopkins, Kelvin
Howarth, rh Alan (Newport E)
Howarth, George (Knowsley N & Sefton E)
Hoyle, Lindsay
Hughes, Beverley (Stretford & Urmston)
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan (Braintree)
Iddon, Dr. Brian
Illsley, Eric
Jackson, Glenda (Hampstead & Highgate)
Jackson, Helen (Hillsborough)
Jamieson, David
Jenkins, Brian
Johnson, Alan (Hull W)
Johnson, Miss Melanie (Welwyn Hatfield)
Jones, Helen (Warrington N)
Jones, Lynne (Selly Oak)
Jowell, rh Tessa
Joyce, Eric (Falkirk W)
Kaufman, rh Gerald
Keeble, Ms Sally
Khabra, Piara S.
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby)
King, Ms Oona (Bethnal Green & Bow)
Knight, Jim (S Dorset)
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, David
Lazarowicz, Mark
Lepper, David
Levitt, Tom (High Peak)
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)
Linton, Martin
Lloyd, Tony (Manchester C)
Lyons, John (Strathkelvin)
McAvoy, Thomas
McCabe, Stephen
McCafferty, Chris
McDonagh, Siobhain
MacDonald, Calum
McDonnell, John
MacDougall, John
McFall, John
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
Mactaggart, Fiona
McWalter, Tony
Mahmood, Khalid
Mahon, Mrs Alice
Mallaber, Judy
Mann, John (Bassetlaw)
Marshall, David (Glasgow Shettleston)
Marshall, Jim (Leicester S)
Marshall-Andrews, Robert
Martlew, Eric
Meacher, rh Michael
Michael, rh Alun
Miliband, David
Miller, Andrew
Moffatt, Laura
Moonie, Dr. Lewis
Morley, Elliot
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Naysmith, Dr. Doug
Norris, Dan (Wansdyke)
O'Brien, Bill (Normanton)
O'Hara, Edward
Organ, Diana
Osborne, Sandra (Ayr)
Palmer, Dr. Nick
Perham, Linda
Pickthall, Colin
Pike, Peter (Burnley)
Plaskitt, James
Pond, Chris (Gravesham)
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Prescott, rh John
Prosser, Gwyn
Purchase, Ken
Quin, rh Joyce
Quinn, Lawrie
Rammell, Bill
Rapson, Syd (Portsmouth N)
Raynsford, rh Nick
Reed, Andy (Loughborough)
Reid, rh Dr. John (Hamilton N & Bellshill)
Robertson, John (Glasgow Anniesland)
Roche, Mrs Barbara
Rooney, Terry
Ross, Ernie (Dundee W)
Ruddock, Joan
Ryan, Joan (Enfield N)
Salter, Martin
Savidge, Malcolm
Sawford, Phil
Sedgemore, Brian
Sheerman, Barry
Sheridan, Jim
Simon, Siôn (B'ham Erdington)
Simpson, Alan (Nottingham S)
Singh, Marsha
Skinner, Dennis
Smith, rh Andrew (Oxford E)
Smith, Geraldine (Morecambe & Lunesdale)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Soley, Clive
Spellar, rh John
Squire, Rachel
Starkey, Dr. Phyllis
Steinberg, Gerry
Stevenson, George
Stewart, David (Inverness E & Lochaber)
Stoate, Dr. Howard
Straw, rh Jack
Stringer, Graham
Sutcliffe, Gerry
Taylor, rh Ann (Dewsbury)
Taylor, David (NW Leics)
Thomas, Gareth (Clwyd W)
Tipping, Paddy
Todd, Mark (S Derbyshire)
Touhig, Don (Islwyn)
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Neil (Wigan)
Twigg, Derek (Halton)
Vis, Dr. Rudi
Ward, Claire
Wareing, Robert N.
Watson, Tom (W Bromwich E)
Watts, David
Whitehead, Dr. Alan
Williams, rh Alan (Swansea W)
Wills, Michael
Winnick, David
Winterton, Ms Rosie (Doncaster C)
Wood, Mike (Batley)
Woodward, Shaun
Woolas, Phil
Wright, Tony (Cannock)
Wyatt, Derek

Tellers for the Ayes:

Gillian Merron and
Mr. John Heppell


Ainsworth, Peter (E Surrey)
Allan, Richard
Atkinson, David (Bour'mth E)
Atkinson, Peter (Hexham)
Bacon, Richard
Baldry, Tony
Baron, John (Billericay)
Barrett, John
Beith, rh A. J.
Bellingham, Henry
Bercow, John
Beresford, Sir Paul
Blunt, Crispin
Boswell, Tim
Bottomley, Peter (Worthing W)
Bottomley, rh Virginia (SW Surrey)
Brady, Graham
Brake, Tom (Carshalton)
Brazier, Julian
Breed, Colin
Brooke, Mrs Annette L.
Browning, Mrs Angela
Bruce, Malcolm
Burns, Simon
Burt, Alistair
Calton, Mrs Patsy
Cameron, David
Campbell, rh Menzies (NE Fife)
Carmichael, Alistair
Cash, William
Chapman, Sir Sydney (Chipping Barnet)
Chope, Christopher
Clappison, James
Collins, Tim
Cormack, Sir Patrick
Cotter, Brian
Curry, rh David
Davey, Edward (Kingston)
Davis, rh David (Haltemprice & Howden)
Djanogly, Jonathan
Duncan, Alan (Rutland)
Duncan Smith, rh Iain
Evans, Nigel
Fabricant, Michael
Fallon, Michael
Field, Mark (Cities of London & Westminster)
Flook, Adrian
Forth, rh Eric
Foster, Don (Bath)
Fox, Dr. Liam
Gale, Roger (N Thanet)
Garnier, Edward
George, Andrew (St. Ives)
Gibb, Nick (Bognor Regis)
Gidley, Sandra
Gillan, Mrs Cheryl
Goodman, Paul
Gray, James (N Wilts)
Grayling, Chris
Green, Damian (Ashford)
Green, Matthew (Ludlow)
Greenway, John
Grieve, Dominic
Hague, rh William
Hammond, Philip
Hancock, Mike
Harris, Dr. Evan (Oxford W & Abingdon)
Hawkins, Nick
Hayes, John (S Holland)
Heath, David
Heathcoat-Amory, rh David
Hoban, Mark (Fareham)
Horam, John (Orpington)
Howard, rh Michael
Jack, rh Michael
Jenkin, Bernard
Kennedy, rh Charles (Ross Skye & Inverness)
Key, Robert (Salisbury)
Knight, rh Greg (E Yorkshire)
Lamb, Norman
Lansley, Andrew
Laws, David (Yeovil)
Leigh, Edward
Lewis, Dr. Julian (New Forest E)
Liddell-Grainger, Ian
Lidington, David
Llwyd, Elfyn
Loughton, Tim
Luff, Peter (M-Worcs)
McIntosh, Miss Anne
Maclean, rh David
McLoughlin, Patrick
Malins, Humfrey
Mawhinney, rh Sir Brian
Mercer, Patrick
Mitchell, Andrew (Sutton Coldfield)
Moore, Michael
Moss, Malcolm
Norman, Archie
Oaten, Mark (Winchester)
O'Brien, Stephen (Eddisbury)
Osborne, George (Tatton)
Page, Richard
Paice, James
Pickles, Eric
Price, Adam (E Carmarthen & Dinefwr)
Prisk, Mark (Hertford)
Redwood, rh John
Rendel, David
Robathan, Andrew
Robertson, Laurence (Tewk'b'ry)
Roe, Mrs Marion
Rosindell, Andrew
Ruffley, David
Russell, Bob (Colchester)
Sanders, Adrian
Shephard, rh Mrs Gillian
Simmonds, Mark
Simpson, Keith (M-Norfolk)
Smith, Sir Robert (W Ab'd'ns & Kincardine)
Soames, Nicholas
Spink, Bob (Castle Point)
Spring, Richard
Stunell, Andrew
Taylor, Ian (Esher)
Taylor, John (Solihull)
Taylor, Matthew (Truro)
Taylor, Sir Teddy
Thomas, Simon (Ceredigion)
Tyler, Paul (N Cornwall)
Tyrie, Andrew
Viggers, Peter
Walter, Robert
Waterson, Nigel
Watkinson, Angela
Webb, Steve (Northavon)
Whittingdale, John
Widdecombe, rh Miss Ann
Wiggin, Bill
Williams, Roger (Brecon)
Willis, Phil
Wilshire, David
Yeo, Tim (S Suffolk)
Young, rh Sir George

Tellers for the Noes:

Mr. Mark Francois and
Mr. John Randall

Question accordingly agreed to.

15 Sept 2003 : Column 637

Lords amendment disagreed to.

It being more than two and a half hours after the commencement of proceedings on the programme order, Mr. Deputy Speaker proceeded to put forthwith the Questions necessary for the disposal of business to be concluded at that hour, pursuant to Orders [28 June 2001, 29 October 2002 and this day].

Lords amendment No. 19 disagreed to.

Lords amendment No. 20 and Government amendments (a) and (b) thereto and consequential Government amendments (c), (d), (e) and (f) agreed to.

Clause 3

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