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23 Nov 2005 : Column 449WH—continued

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Local and Regional Government

2.30 pm

Andrew George (St. Ives) (LD): I am delighted to have secured this debate on the future of local and regional government. I am pleased that we can discuss such an apparently wide-ranging issue in one of our 90-minute debates. Hon. Members who want to take part will recognise the importance of establishing a clear relationship between local and regional government powers and national Government policy.

I shall start by commenting on the Government's plans of the past eight years for the devolution of central Government and Government agency powers to so-called regional assemblies and how that relates to local government. I shall also comment on certain aspects of my constituency—I am sure that hon. Members would be surprised if I did not mention Cornwall a few times—including the long-term unitary authority, the Council of the Isles of Scilly, in the far west of it.

The Government have stated their intentions towards regional assemblies in various Acts governing preparations for their establishment. The Minister will doubtless have a clear recollection of the substantial defeat of the Government's proposal in the north-east just over a year ago, and I shall comment on the progress made since then and the Government's intentions following that heavy defeat of their approach to devolution.

I should make it clear that I do not question or even criticise the Government's desire for genuine devolution and for completion of the work that they started. Many hon. Members on the Liberal Democrat Benches and elsewhere strongly support, as I do, the Government's efforts and indeed successes, in devolving power to the Scottish Parliament, the Welsh Assembly and London. However, I want to tease from the Minister, as I hope others will, how the Government intend to fill the many vacuums in policy in order to deliver genuine devolution to the rest of the country.

David Taylor (North-West Leicestershire) (Lab/Co-op): Does the hon. Gentleman agree that the substantial defeat of a year or more ago was not necessarily a permanent rejection of regionalism as a concept but a rejection of the detail of the proposal that was put to the north-east, as well as a lack of conviction among the electorate that there would be a genuine transfer of power and resources to the level that they were being asked to approve?

Andrew George : I am not sure that I agree entirely with the hon. Gentleman's analysis, although I do not interpret the north-east's rejection of the Government's approach to devolution as a rejection of the concept of devolution or a rejection of the prospect of devolved power. It was, as I just said, a rejection of the Government's approach. My criticism is that it was typical of so much of the Government's control-freak approach elsewhere, which I also criticise, whereby they insist on deciding where boundaries are, what powers the people of a region or Government zone will have, how those powers will be dispersed and to what timetable, when a referendum will take place and under what terms, and in what context everything will be
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carried out. I hope that they will learn lessons from the referendum in the north-east and not hide away under a stone, wondering what on earth they should do next, although I worry that that is what they are doing. As the hon. Gentleman rightly said, they should not interpret the referendum as a rejection of devolution itself.

David Taylor : Regionalism.

Andrew George : There is a debate to be had about what is interpreted as regionalism and what is interpreted as devolution and decentralisation. I shall come to my criticism of the Government in a moment, but it relates in part to the fact that they are concerned not with regionalism, but with attempting to establish a democratic structure in Government zones. Such zones are not regions, because there is no internal integrity in many of them. I cannot comment on the north-east, but I can certainly comment on the Government zone of the south-west. It is not a region, but a Government zone, which has been created over time not only by this Labour Government but by their predecessor Governments for reasons of bureaucratic convenience. It certainly has nothing to do with regionalism, because regionalism implies that a region recognises its own internal integrity and then seeks to achieve power for itself.

David Taylor : Will the hon. Gentleman give way?

Andrew George : I will once but then I want to make progress.

David Taylor : This will be my last intervention. We can agree that reform does not necessarily involve regionalism, but does the hon. Gentleman agree that it does involve genuine decentralisation and real independence, with local accountability, local democracy, a majority of revenue being raised locally and decisions about how it is spent being made locally? How can we raise revenue in that context, given, not least, that the Liberal proposal for local income tax went down like a lead balloon?

Andrew George : I do not want to be diverted on to the rights and wrongs of local income tax, although I dispute the hon. Gentleman's interpretation that it went down like a lead balloon. It obviously went down like a lead balloon with him, but that was not the case for a lot of others, who recognised the inequalities of the council tax system and the farce of the Government's attempt at revaluation, which I notice has been put in abeyance.

In a debate on 12 July in this Chamber, I raised the issues before us with the Minister's colleague, the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick). In summing up what point the Government had reached, he said:

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In recent years, however, we have seen not devolution but further centralisation of strategic planning and learning and skills. The same is about to happen to fire control, the police and, to a large extent, housing. Those are all moving from local authority influence to Government zones, Government quangos and non-accountable bodies.

Chris Huhne (Eastleigh) (LD): I very much appreciate my hon. Friend's points about the proposals for amalgamating and centralising various public services. Does he agree that that is happening at a time when we are already the most centralised member state of the European Union in terms of the amount of tax revenue that is collected and disbursed centrally? On the latest figures from the Organisation for Economic Co-operation and Development, 94 per cent. of all tax revenues go to central Government before being disbursed, on occasion, to local authorities. In only one of the 25 EU member states is that proportion higher. That state is Malta, which has a population only a little larger than the London borough of Croydon. Does my hon. Friend agree that the figures are compelling and suggest that we are excessively centralised, and that the Government are heading in the wrong direction, rather than attempting to decentralise?

Andrew George : I am grateful to my hon. Friend for making that point. As Malta has a population roughly the same size as that of Cornwall, there are probably a number of lessons to be—

Chris Huhne : Malta's population is smaller than that.

Andrew George : Sorry, obviously more people have left the island since I last heard about it. One could draw a number of conclusions from my hon. Friend's intervention. I am sure that the Minister will bear it in mind in his concluding remarks.

The issue is not just the centralisation of important local government services which local authorities have discharged effectively for decades. Bearing in mind the Government's proposals for local education authorities and the big question mark over the relationship between social services and various health quangos, we can see coming down the track a further siphoning of local government powers to quangos, to Government zone bodies with appointed Government placepeople, or to Departments. That is the inevitable result of the direction of Government policy.

What have we seen as a result of the north east assembly referendum last year? Basically, the Government have demonstrated paralysis; they appear to have no idea. A year on from the referendum, there has been no comment and no proper assessment. There is no sign that the Government are prepared to debate the issue.

Before this debate, I reminded the Minister that on 11 November 2004, when he was Deputy Leader of the House, I asked him when the Government would recall the Regional Affairs Committee, which was established to fill the vacuum created by the lack of any debate about the regional dimension to Government policy. The Committee last met 18 months ago. As I recollect, it met to discuss a relatively unimportant matter relating
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to "The Northern Way"—I am sure that it was important to the north, but I am talking about Government strategy and Government positioning on the important issues of the day. That Committee, which was set up to undertake an important task, has not met since.

I asked the Minister, who was standing in for the Leader of the House on that occasion last November, when the Government would take the opportunity to review their policy following the north-east referendum. He replied:

The then Leader of the House must have considered it very seriously, because I heard no more about it. We are still waiting to hear whether the Regional Affairs Committee will ever meet again. Surely this is a time when it should be meeting weekly to hold the Government to account and to review where Government policy is going.

Alistair Burt (North-East Bedfordshire) (Con): May I help the hon. Gentleman with this part of his argument? The reason the Government do not recall the Committee is that they have no need to, because they have already made up their mind about what they are doing. I draw his attention to what the Deputy Prime Minister said in the House on 8 November 2004, just after the referendum result, when he made his intentions clear:

That is their intention, so they have no interest in listening to anyone else.

Andrew George : I thank the hon. Gentleman for his intervention. It is helpful, but it is also worth pointing out that on that same occasion, when the Deputy Prime Minister was answering questions following his statement, he went on to say in answer to my question on democratically accountable regional government:

He said that, yet since that time we have had a complete vacuum.

Matthew Taylor (Truro and St. Austell) (LD): With the Government's plans for regional assemblies dead in the water, we are left, as my hon. Friend has said, with the centralisation of services from fire control rooms to secondary education and much else besides, plus a regional tier that is unelected, unaccountable and, frankly, extraordinarily bureaucratic and inefficient. Is it not true that the only way to rescue that is to revitalise the process of democratisation of regional and local government by making it closer to the people and allowing them the opportunity to take the decision to
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have assemblies that are genuinely accountable and local? We are told that the Government have considered that idea for urban areas. I hope that they have. They should certainly be considering it for rural communities that have a genuine sense of identity. What is wrong with the Government's plans is that their regions have no proper identity.

Andrew George : I am grateful to my hon. Friend. In many ways, I agree with him. I, as a Cornishman, do not presume to know what is best for the north-east, the north-west, the midlands or anywhere else. It is not for me to decide.

I will come in a moment to the solutions that I think the Government have to pursue. They do not need a control-freak approach, which seems to assume or misunderstand that devolution is about holding on for dear life and controlling the agenda down to the last tee. Devolution is fundamentally about letting go and giving people in the regions as defined by them the opportunity to bring forward their business cases. They should be able to select from a menu of powers and take their cases to the Government, urging support for them, not the other way round. That is why the Government have catastrophically failed.

Daniel Kawczynski (Shrewsbury and Atcham) (Con): A lot of resentment is felt in Shropshire, particularly by our chief constable, Paul West, who has stated that he does not want the West Mercia police authority to be amalgamated with four other police authorities. That, coupled with the regional fire control centres, is another example of how the Government are determined to bring about regionalisation by stealth, no matter what local people wish.

Andrew George : I am not sure that it is regional government by stealth. It is the bolstering of an unaccountable Government zone, potentially supported by various cronies and placepeople and certainly not accountable to the zone—the south-west is not a region, as far as I am concerned, and I cannot talk about Mercia—that it is supposed to represent. The issue that the hon. Gentleman talks about needs to be drawn out, and the Government need to reflect on it.

The debate in this Chamber on 12 July and the paucity of the Government's response to the vacuum in policy demonstrate that they appear to be on the nursery slopes of the debate. They are not engaging in the debate: they do not wish to. If they do engage in it, they demonstrate that they are still on the nursery slopes by coming out with the same twaddle about needing economies of scale. One needs only to lift one's eyes beyond the narrow horizons of the Government's view of what Britain should be like to the wider world and to look at regions and provinces in other countries. Grown-up countries do not take the view that they need economies of scale in order to deliver services, and they do not take the view that they need to dictate to those regions and provinces what size—

Chris Huhne rose—

Tony Baldry (Banbury) (Con): rose—

Andrew George : I will give way in a moment, but I am now on my hind legs.
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Those countries realise that if small provinces are required to work with other provinces, small or large, in order to achieve the economies of scale that will allow them to deliver important services, it can be done. Those provinces and regions simply need the space and the opportunity to do it.

Tony Baldry : The hon. Gentleman is being far too kind to the Government. He assumes that they have beneficial motives; they do not. The Government know that Labour councils will get hammered in the local government elections next year, and this is all a distraction, putting district councillors against district councillors—people of one party against others of the same party. It will not work. There is nothing noble about it. It is a distraction, because they know that their party will be devastated in next year's elections.

Andrew George : I am aware of the time, so I hope that those who intervene on me do not mind that as a result of taking interventions I shall speak for rather longer than I had intended. Unless I hear otherwise, I will try shortly to draw my remarks to a close. However, I will try to deal with the questions raised.

I will come to the question of how these things relate to the apparently leaked memo—I believe that the Minister will say that it was a letter—from the Minister of Communities and Local Government to some of his governmental colleagues. The important issue is the order in which reorganisation takes place, if it is to take place. I am sure that the leak leaves a number of people with the clear sense that mere cynicism lies behind the alleged proposals for local government reorganisation and that they are not part of an intelligent, thought-through policy.

Mr. Philip Hollobone (Kettering) (Con): Before the hon. Gentleman moves on, is he aware that Northamptonshire now has a grotesque structure called a sub-region? The Milton Keynes and South Midlands sub-region has published its own spatial strategy and encompasses counties that fall into the east midlands and the eastern and the south-eastern regions of England. It has taken from the counties' structure plans responsibility for planning thousands of new houses in the shire counties.

Andrew George : I am sure that the Minister will take on board that plea on behalf of the area that the hon. Gentleman represents. Many of the proposals and spatial strategies emanating from such bodies are particularly ghastly documents, and those local authorities that wish to engage with them find it extremely difficult to do so. There is very strong objection to the way in which such documents have been drawn up and about the fact that they fail properly to reflect some of the strategies and intentions of the local authorities with which such bodies are engaging.

Having said all that, it is rather sweet of the Government to respond as they do whenever I raise the Cornish dimension to devolution. Despite the fact that a large number of people aspire—I would argue that it is the settled will of Cornwall—to modest powers devolved to a regional assembly that covers the local
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authorities of Cornwall and of the Isles of Scilly, the Government take the view that they know better than the people of Cornwall how to run their affairs. It is extremely kind of them, but we could do without that level of intervention.

Chris Huhne : Let me reinforce my hon. Friend's point. Does he agree that the English regions of which the Government seem so enamoured are extraordinarily large? My region, the south-east, has more than 8 million people and is covered by 83 Westminster constituencies. Every English region apart from one—the north-east—is larger than the Republic of Ireland. Therefore, we should consider much more substantial decentralisation than merely to the regional level on which the Government are so keen.

Andrew George : Let me correct my hon. Friend: he cannot say regional level and must get used to the term Government zone level if we are to do this right and use the proper terminology. However, he rightly points to the need for a constructive proposal to fill the vacuum in Government policy. I hope that the Minister is listening. If the Government follow the principle of letting go rather than that of holding on for dear life, they should end up taking a grown-up but more passive approach to devolution. They might recognise that it is possible to achieve devolution and decentralisation in the over-large Government zones by waiting and allowing local authorities, community groups and others to make a business case for the definition of their own regional boundaries, and to demonstrate how they would run their region and which powers they would wish to take on initially—recognising that it is a process and not a single event—from a menu that the Government would, I hope, be prepared to offer them. Referendums are far more likely to be won if the people in the regions are involved than if the terms appear to be imposed by the Government.

With regard to local government reorganisation and the Whitehall memo that was apparently leaked to the press at the weekend, let us put aside the claims that it is all part of a scurrilous and cynical Government ploy to deal with the problems of Tory shire counties. We need to take care that it is not part of another cynical ploy—a tactic to divert us from the important task of addressing the deficit in the definition of devolution from central Government, particularly when so many powers are being syphoned away from local authorities and so many statutory responsibilities have been loaded on to them.

Such authorities are given no other choice than to be Government agents rather than genuine local government making its own decisions, so the whole exercise becomes rather fatuous. It is like asking an engineer to start building a bridge from the centre or, in the context of the syphoning away of powers that I have described, like rearranging the deckchairs on HMS Local Government before it finally goes under. One has to start with a clear vision of what the Government want to achieve with the devolution of power and of their strategy.

Finally—this is the Isles of Scilly interlude in the wider debate—the Government should take care with the uniform application of national policy and its
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impact. The Isles of Scilly have a population of 2,000 people and a small local authority with a range of responsibilities covering not just county and district council matters but others such as water, which was never privatised, and the running of the airport and the port.

Either because Government Departments like visiting the Isles of Scilly, which is possible, or because they fail to understand the nature of the responsibilities of the council of the Isles of Scilly, there have in the past year been 31 inspections from different Departments, by inspectors who stay in one of the many swanky hotels on the island and meet officers. Some 113 days of the four chief officers' time has been taken up with receiving and meeting those guests and answering questions, although each chief officer has only a total of 220 days each year. When one takes into account all the time that they have to put into the preparation of their case and answering inquiries, one sees that more than 250 days of chief officer time is taken up with addressing the problems of inspection. That is neither best value for local government resources nor proportionate. I hope that the Minister is keeping a watching eye on that and considering the cost.

I have had to fight the best value inspections. We have managed to negotiate the number of indicators that have been used from 140 down to 75, but there were times when the local authority was asked to undertake a best value analysis for grave digging, trading standards and traffic wardens. In fact, on some occasions the best value analysis cost more than running the service. That is a bizarre situation on which I hope the Minister and the Government will reflect when they review how to deal with such matters, and I hope that they will not always assume that all local authorities are large metropolitan areas.

Finally, civil contingencies budgets were apparently enhanced for this year. Under the new formula, the civil contingencies budget for the Isles of Scilly was cut from £54,000 a year to £1,800 a year. That is some enhancement. That amount hardly covers the cost of the officer responsible for the service travelling to meetings in the so-called region—in Exeter and other places—and his telephone bill, let alone his other costs and expenses. Clearly, the Government need to reflect on that.

I apologise to all present for taking so much time, but I understood that more people wished to intervene than to make speeches, so I have taken that into account.

I hope that the Government will not hide and become paralysed. Although in Liberal Democrat terms I have been brutal with the Minister in my comments, I hope that he will not become paralysed, because some of us are keen to engage with a Government who demonstrate that they are genuinely eager to deliver devolution and decentralisation. That cannot be done if they keep retreating into their shell.

We want to help. I hope that the Minister is listening , is prepared to take note and will debate the matter further and often.

Mr. Eric Illsley (in the Chair): Before calling the next speaker, I remind Members that I intend to begin the winding-up speeches at 3.30 pm, so I ask for brief contributions from here on in.
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3.4 pm

David T.C. Davies (Monmouth) (Con): Perhaps I should declare an interest from the start. I have been a Member of the Welsh Assembly for the past six years, despite the fact that I campaigned and voted against it. If I had the opportunity to vote in another referendum, I would probably vote for Christmas, unlike the proverbial turkey. I went into politics because I believed that it should be about low taxes, high-quality public services, low taxation wherever possible and building a sense of cohesion. The Welsh Assembly, and regional government in general, undermines those key principles.

We saw a huge rise in the costs of government from the moment that the Welsh Assembly was set up. One of the first decisions taken was to build ourselves a brand new building, which originally cost £6 million and is now running at £66 million. That money is coming straight out of the block grant for the Welsh Assembly, or regional government, and could be spent on other matters.

There are also Welsh embassies all over the world—or, rather, in the more exotic parts of the world—[Interruption.] I am happy to give way to anyone who wants to ask me about that. I have tried to find out the costs of the embassies. I know that they run into millions; the embassy in New York is in the Chrysler building. I am unable to give a definitive figure because, despite my asking a series of written questions on it, the Minister has not been able to give me a proper cost.

There has also been an expensive reorganisation of quangos, which brings me to public services. One effect of regional government is a tendency among those running it to try to do things differently, even when there is no real reason to do so. I have been critical of this Government in Westminster and their handling of the health service. However, they are doing a far better job of running the health service than their colleagues in the Welsh Assembly are. Perhaps that is because the Government have a slightly more pragmatic approach or because of the relatively lower costs of having a larger health service in England; I do not know the full answer. The health service in England is far better than the one in Wales.

Daniel Kawczynski : May I tell my hon. Friend and the Minister something? As a result of the different policies that the Welsh Assembly now employs, my Royal Shrewsbury hospital loses £2 million a year, because the Assembly pays a different amount per patient than English authorities do.

David T.C. Davies : Indeed. I am grateful to my hon. Friend for pointing out some of the many irregularities caused by the fact that we no longer have a national health service; we have a regional health service.

On education, it concerns me that there is now talk of developing separate qualifications that might not be recognised in the rest of the United Kingdom. On agriculture, we saw the effects of the difficulty of getting the level of expertise needed to deal with complicated cases during the foot and mouth crisis. That was demonstrated when somebody from the Welsh Assembly agricultural department rang up one of my constituents, who had asked for a movement licence on a bull, to ask what sex the bull was. That is a true story.
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The hon. Member for St. Ives (Andrew George) mentioned taxation. Under the current models, regional governments are not given powers to raise taxes—quite rightly, too. As a result, where they have had responsibility for local government funding there has been a tendency for them to use that to raise taxes through the back door by increasing council tax.

In a debate on local government the relevant Minister was criticised for council tax rises of between 74 and 90 per cent. I think I said that we would be having parties in the street to celebrate if our council taxes had risen by only 90 per cent. or so in Wales. In my constituency, the figure is more like 130 per cent.

I am proud to be Welsh, particularly on international days, and I am again very much looking forward to the game against England this year. I am also proud of the fact that I am British. There is currently a great danger—a tendency to encourage people to define themselves by the region that they come from, by their ethnicity, by their religion or by any one of a number of other distinctions, whereas we should encourage everyone to define themselves as British.

We have to build a strong, cohesive society. To do that, we should say to people that they should be able to celebrate whichever culture, religion, ethnicity or regional identity they feel that they have; that is fine. However, we also need to encourage people to celebrate something that is a little different and that can unite us all. That argument is currently being won on both the left and the right.

I can see some advantages in regional government. Regional government representatives and Assembly Members—whatever we want to call them—are local. They are back in their constituencies most nights and are therefore easier to get hold of. It is easier to get hold of Ministers in the Welsh Assembly Government than to get hold of Ministers in Westminster. That was said without any disrespect to the Minister present today, because there are more regional representatives and they are more local. It is also easier to raise matters in the local press, because it tends to be based in the areas where regional governments are based.

I do not believe that the advantages outweigh the disadvantages. I accept that there is now a question, because we have a Parliament in Scotland, which has tax-raising powers and primary legislative powers, an Assembly in Wales with secondary legislative powers and, theoretically, no tax-raising powers—although I would argue that it has them—and an assembly in London. I shall not go into the complexities of Northern Ireland. We have different systems of government throughout the United Kingdom. That was not thought through sensibly. The population of Scotland is of course twice that of Wales, which is twice that of Northern Ireland. The question arises of our perhaps setting up an English Parliament or regional governments, or simply preventing Welsh and Scottish Members of Parliament from voting on matters that affect only England. That is a matter for the English to sort out. However, I strongly suggest that the answer to the question is not more politicians, more taxation, lower public service levels, or anything that undermines the principle that all of us are British.
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3.10 pm

Dr. John Pugh (Southport) (LD): I congratulate my hon. Friend the Member for St. Ives (Andrew George) on securing an important and timely debate. In preparation for it, I thought about who I would consider the most influential figure in recent local government history, and I concluded that it was probably not anyone pictured in the halls around Westminster, but Derek Hatton, or "Degsy", as he is known in Liverpool, who managed not only to be a bête noire of Labour and the Conservatives but to be not much liked by Liberal Democrats. He was the last person I can recall who set municipal power into deliberate conflict with Whitehall power.

When Derek Hatton came to power, the Government had already decided, post-Toxteth, that local government could not really be trusted, and had tried to emasculate or sideline it by creating other agencies. The Greater London council and metropolitan counties had already been abolished. Certainly, Mr. Hatton played a pivotal role in a hardening of Whitehall thinking which, I should say, spans different Administrations.

The strategy that I have described has not been reversed. Those of us who have observed local government in recent years have noticed a reduction in its functions, a limiting of its role as a provider, and a capping and controlling of its budgets, with, on balance, a preponderance of its funding increasingly being provided from the centre, and the loss of business rates. The Government have gone so far as to determine the structure of council meetings, with the imposition of the cabinet system.

To be fair, the Government would probably claim, by contrast, to have given local government some new powers. However, when those powers are examined in detail they tend to emerge as powers to enable rather than provide, powers that, often, are shared with other partners, or what I might call short-straw powers, such as the power to impose congestion charging or administer the Licensing Act 2003—unattractive numbers that central Government do not fancy.

We must accept that the great days of civic power are some way behind us now, with the not unexpected result that turnout is down and local government is by and large left as a useful whipping boy or, occasionally, bogey man, whereas in reality genuine power has shifted massively to the centre. I should go so far as to say that local government is not only no longer an autonomous unit, but not any more even a trusted partner.

Centralisation, however, goes only so far. There comes a point at which centralisation assumes a burden that it can no longer carry. It has thus been necessary for the centre to create various satellite agencies, such as the development agencies and the Government offices that inhabit the regions like colonial viceroys, and to try through them to administer each region in various ways. Such agencies certainly father, in conjunction with regional assemblies, a host of varied strategies.

I disagree with my hon. Friend the Member for St. Ives that there is paralysis; I think that there is progress, because we all know that a range of interesting strategies are at the moment cooking in the bowels of various Government offices and development agencies—spatial strategies, housing strategies, transport strategies and economic strategies. All those are influential or bound
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to be influential. They are consulted on in a brief and perfunctory pattern, but I do not think that anyone would recommend them as genuine, ideal democratic products.

Perhaps I can give two local examples from the region that the Minister and I inhabit. A north-west transport strategy is being developed. That is basically a 10-year transport plan for the entire north-west. It is being produced fairly quickly, with a deadline of around January for the region and around March for the Government. It is proposed that £1.4 billion of public expenditure will be committed or prioritised. Included in that strategy there will obviously be some schemes that many Members of Parliament would like; but other schemes that they would like may well not be there. Key decisions are being made with inordinate haste. The whole process is veiled, by and large, from council leaders, certainly in part from Members of Parliament, and certainly from much of the business community. None the less, it will undoubtedly be fairly influential.

The region that I share with the Minister comes under the Northwest Development Agency. It often says that it has a three-year strategic plan that identifies which projects it will and will not fund, but I invite Members just to try to get it off them—they will find it fairly difficult. They would also find that not even the Freedom of Information Act 2000 will prise the plan from the agency.

I think that there is an appalling democratic deficit, and most people would say that that was the case in the example that I have just given, but the situation is complicated by haste and the genuine lack of regional government. Whatever we think about it, there is now some regional decision making by our regional government. That, coupled with the regionalisation of emergency services—something mentioned by other Members—and of the health services, is not so much a democratic deficit as a complete democratic vacuum. That is one reason why the Select Committee on the Office of the Deputy Prime Minister will look into regionalisation over the next few weeks or months.

I turn to the poor old counties—I say "poor old counties" because they have essentially been stripped by the regional bodies of their strategic transport role. Roads are no respecters of council boundaries; I accept that. Counties have been largely stripped of education, and are simply a postbox for educational funding. Social services are, by and large, shared between counties and health bodies now, and so the counties act in partnership rather than autonomously. In fact, it has to be said that they are now an extra layer in a world, largely, of unitaries. As function and structure are intimately related, if all those changes in function are made, some change in structure will inevitably be suggested at some point. Therefore, the leak from the Minister for Communities and Local Government the other day was heard with a sense of inevitability by some of us, because it follows logically and consecutively from the Government's prior plans.

However, I do not want to get into a debate about the structure of local government, or even to suggest an ideal template to hon. Members. The fundamental issue, as was highlighted in the introductory speech, is the democratic deficit. The question is how we get public
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ownership of local and regional decisions, and how we persuade people that it makes a real difference to vote for any local or regional body.

3.18 pm

Tony Baldry (Banbury) (Con): It was always ridiculous making the right hon. Member for Kingston upon Hull, East (Mr. Prescott) the Deputy Prime Minister, because the Government then had to create a whole Department for his entertainment. Having created the Office of the Deputy Prime Minister, they then had to find something for it and its junior Ministers to do. All they have managed to do is meddle; there is compulsive meddling on the part of this Government. Oxfordshire is about to lose its fire control centre; the Home Office is deciding whether Thames Valley police should join Hampshire police to form a new force; and there is a comprehensive reorganisation of primary care trusts only a few years after they were introduced.

I do not think that the Government have any noble intent in suggesting a reorganisation of local government. It is a ploy; they know that next year there will be some very difficult local government elections for them—in London, in the unitary authorities and in a number of the shire districts. They know that they will get squeezed by Conservatives and Liberals, and I suspect they will find themselves in a very humiliating position. This proposal is a distraction from future election losses and a distraction from the extent to which, under the Government's stewardship, council tax has gone up and continues to go up. Last year, the Government injected a one-off £1 billion into council tax—a pre-election give-away that clearly will not be repeated this year. As I shall later say, we are likely to see an average increase of £100 in council tax because of the Government's actions.

We do not need to look too closely, because we know from the experiences of history what happens when one seeks to reorganise local government. As Sir John Banham, who undertook the last consideration of reorganisation, said only the other day on "The World at One":

However, that is what the Government want to do in rural England: to be disruptive and expensive and to deliver less. When I go down the high street in Banbury, I am not stopped by people who say, "We would really like to see Oxfordshire county council abolished. We would love to see a unitary authority here." What they are really concerned about is the collapse of the NHS in Oxfordshire and the fact that their council tax bills are going through the roof.

When the council tax was introduced in 1993–94, it averaged £456; today it averages £1,009. Sir Jeremy Beecham, the vice-chairman of the Local Government Association and a Labour councillor, said only the other day that the LGA is hoping for a substantial sum from the Government along the lines of last year's one-off £1 billion payment, because if it does not get that, there will be a shortfall that could mean an average £100-a-year increase in the council tax this coming year. That is not because local authorities have been wasteful, irresponsible or profligate or because they have been
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tearing up £5 notes and throwing them into the River Thames; it is because authorities across England face extra costs of £2.8 billion to cover the new responsibilities imposed by Whitehall. Those are Sir Jeremy Beecham's figures.

The Minister for Local Government (Mr. Phil Woolas) : Even the Local Government Association does not say that the figure to which the hon. Gentleman refers is made up of supposed new burdens.

Tony Baldry : That is the reported figure. Perhaps the Minister will give the new burdens figure when he winds up; we look to having the whole of that incorporated into the local government settlement. That settlement will be difficult not only because of council tax, but because we will be hammered in Oxfordshire on the supporting people budget. It is wholly unsatisfactory that councils should regularly have to plead for one-off cash handouts, rather than having a stable and predictable source of income from the Government.

What is also particularly distressing about the ever-increasing hikes in the council tax bill—which are, of course, a very effective stealth tax because they result from the Government's shifting of burdens from central Government to local government without proper funding—is that the people who get really hammered are those on fixed incomes such as pensioners. Council tax has risen and continues to rise by far more than prices and the state pension. We have seen the council tax go up by nearly three times the inflation rate.

There is another particularly stupid aspect of the proposals for reorganising, merging or scrapping Oxfordshire county council or other tiers of local government. In its reports, the Audit Commission shows that in the south of the country, for example, local authorities—many of which are Conservative-controlled—are better than any other part of the public sector in delivering efficiency savings and are persistently among the best performers in the Audit Commission league tables. If parts of central Government were as effective as local authorities such as Oxfordshire county council and Cherwell district council at delivering efficiency savings and doing more for less, public finances would be a lot better and there would not be that sizeable black hole in the Government's finances.

The whole debate about the reorganisation of local government is a deliberate distraction on the part of the Deputy Prime Minister and Ministers. They want to attract attention away from the substantial hikes in council tax that we will see as a consequence of this year's local government settlement, which always comes up just before Christmas in the hope that the Christmas break will also somehow distract people's attention. They want to distract people's attention also from the devastating local government results that will occur quite rightly next May.

3.25 pm

Sir Peter Soulsby (Leicester, South) (Lab): I speak as somebody who has been an elected member of a local authority for some 30 years, and who led one for some
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17 years. On many occasions during that time, I found myself on the receiving end of changes in structure and in Government policy.

I can look back during that period at a significant change to the way in which the public view local government and local government views itself. We have seen public esteem for local government and the morale of those involved in it—particularly elected members—diminish. Members of all parties will acknowledge that the link between the level of spending of individual local authorities and the level of taxes levied by them was lost in many people's minds, and that it became confused and opaque. We have discussed on other occasions the gearing effect of how things work at the moment.

I shall keep my remarks brief and look back to the damage that was caused in the 1980s with the confrontation between central Government and local government—the attack on services, the erosion of powers and the way in which local government's legitimacy was undermined. I shall also look forward to the Lyons review of the structure and the purpose of local government and its function.

David T.C. Davies : Will the hon. Gentleman give way?

Sir Peter Soulsby : No, time is about to expire, so if the hon. Gentleman will forgive me, I shall not give way.

We must look forward with some optimism to the Lyons review, and look for genuine devolution and decentralisation to arise from it. I hope that through the review and in the Minister's contribution towards its thinking he agrees that some significant issues need to be tackled. Most particularly, there is the funding of local government to ensure the availability of a broader range of funding sources and genuine accountability by local government for the level of spending, which is then linked back to the level of taxation.

I hope that the Minister agrees that there is a need for a review of the remnants of the two-tier system. It was partially addressed by the abolition of the metropolitan councils and the establishment of some unitary authorities, but it must now be addressed throughout the remainder of the UK. The system remains wasteful, and unnecessary duplication is built into it.

I hope also that the Minister agrees that there is a need to look again at the way that the cabinet and scrutiny systems have worked in practice, recognising that although there have been some benefits, in many areas it has led to increased confusion rather than transparency about where decision making takes place, and that the role of scrutiny is not always 100 per cent. successful.

Finally, I hope that now and as part of the review the Minister will consider ways in which it is possible to restore the morale of members of local government, recognising that for all parties there is a real issue about attracting a high calibre of person to local authorities, and, once they are elected, retaining those members. Far too many of them will serve one term and decide that they are going to go away and do something useful with the rest of their life. We need to restore the legitimacy and prestige of those who serve us, as members of local
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authorities. We must recognise that there is a job to be done to restore local government as an essential part of our democratic structures.

3.30 pm

David Howarth (Cambridge) (LD): I congratulate my hon. Friend the Member for St. Ives (Andrew George) on securing this debate on an important and timely topic. I agree with him especially on two points. First, I agree with his preference for power to be held at the most local level possible. If that turns out to be regional, or zonal, as he puts it, that is fine, but it strikes me—as I think it strikes him—that that will be quite a rare occurrence. Usually, power can be held at a level more local than the large zonal level to which he refers. The second point implicit in what he said was that power ought to be built up from the bottom rather than imposed from the top. That leads to my, and I think his, preference for joint working and joint commissioning of services as a way of overcoming the problems of economies of scale, rather than starting with gigantic authorities built around the principle that sometimes quite rare services must be delivered in the most efficient way.

It strikes me that the regional level might be suitable, say, for strategic planning and some aspects of transport—although even in respect of transport, sub-regional levels are often better—but that there are otherwise few natural functions for it. As my hon. Friend said, however, as long as regional offices exist, and as long as regional quangos multiply, there is a serious democratic deficit to be dealt with in our approach to regional government. It is important to review the way in which existing regional assemblies work to ensure that they are properly accountable, and we should be thinking about looking for ways in which to make them more clearly accountable downwards to local government, rather than upwards to national Government.

The situation of local government following the leaked memo to The Daily Telegraph is interesting. The Lyons review started as a review of finance. Then the Government announced that it was to be expanded to look into function. Now it seems that we are to have a review of structure as well. Add those three things together, and we are in the midst of a general review of local government. Albeit perhaps by accident rather than by design, that is the point that we have reached. If so, this is the right time to return to first-principle thinking about local government, and for the Government to publish a White Paper outlining their view of the whole relationship between central and local government, rather than tackling the question in parts. For Liberal Democrats, the basic principle is localism.

Mr. James Gray (North Wiltshire) (Con): From the Minister's body language—I saw him smiling at his civil servants—it appears that the Government propose to bring forward a White Paper along those lines. I hope that the Minister will be able to confirm that later.

David Howarth : I would be happy if that idea had occurred to the Department and the Minister.

For us, the basic principle is localism. Power should be exercised at the most local possible level. However, it is important to understand not just the principle but the
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reasons for it, as they may determine a lot of policy direction. The Minister has heard me say this before, but perhaps other hon. Members have not. We have three distinct reasons for being in favour of localism, which lead to distinct conclusions in their own right. One is that power should be dispersed, rather than being too concentrated in too few hands, and that local government has a constitutional role to play. The second is that there is a need for diversity and experimentation, both in government and in society, and that local government can play a role in that as well. Thirdly, there is a need for democratic participation, and it is important that local government should be seen as a way in which local people can participate in the democratic process. I do not have time to go into those three reasons at great length, although I am sure that Ministers would be happy to respond on the reasons for localism, rather than simply stating conclusions.

The most important aspect of our belief in the dispersal of power is that we think that local government should be about local politics, not about local administration. Part of the problem is central Government's view that local government should be their agent rather than a source of political legitimacy in its own right. We should look forward to a situation where national Government respect the powers of local government within its sphere and a financial structure is in place to back that up, and where, when national Government want local government to act for them, they have to negotiate with local government about accepting extra responsibilities, rather than simply imposing them through legislation.

The central point about experimentation and diversity is that local government should be able to experiment not only with the delivery of policies but with what policies to deliver. National Government should content themselves with minimum standards and providing information about performance and practice. The crucial difference is that the implied national policy has been for decades that public services should be delivered in the same way throughout the country. That is implicit in the local government financial system. As a matter of principle, we should move away from the idea of uniformity to one in which local government is encouraged to have different policy aims from national Government.

The most important of the three points concerns democratic participation. It is necessary to the survival of democracy itself that as many people as possible have direct experience of the democratic system. By that, I mean not only voting but standing in elections, serving as a representative, making decisions and being held accountable for those decisions. We cannot afford further development of a small and separate political class—an isolated clique of leaders divided from a resentful mass whose only experience of democracy is being governed by someone else. The best defence of democracy is the widespread experience of democratic politics.

The theme that lies behind what is said on many sides, including in the leaked document in The Daily Telegraph, is that it is a good idea to reduce the number of councillors just for the sake of it. I oppose that. By international standards, we are not over-represented in this country. The Government might quite rightly—this relates to a point raised by the hon. Member for
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Leicester, South (Sir Peter Soulsby)—be worried about the quality of local government councillors, and think that one way of addressing that could be to reduce the number of councillors and to use the money that would otherwise be spent to increase allowances to make attractive salaries. However, that is the wrong way to attract talent to local government. The best action to take would be to increase the powers of local government and to free it from national control, so that councillors can achieve something for their communities. Freedom for councils means better councillors.

It seems that one of the Government's reasons for unitary councils is a reduction in the number of councillors. I would not accept that. I also reject the idea of a single system of local government throughout the country. A single system is wrong; there should be various ideas of how to run local government. There is immense geographical diversity in the country and what might be appropriate for a rural area might not be appropriate for an urban area. However, as another former council leader, I am much attracted to single-tier local government, especially in urban areas. The present system leads to immense confusion and failure among the various levels of local government to take responsibility.

It is difficult for the electorate to believe that the county council is responsible for all the roads, even in an urban district, or that one council deals with waste collection, while another deals with waste disposal. I remember from my time as a council leader that the local population always thought that I was responsible for all the county's services, including part of the health service. That lack of clarity is a real problem for democratic accountability.

If The Daily Telegraph leak is right, I strongly advise the Government to think carefully about how they propose to go about the reform. They risk repeating some of the mistakes of the Banham/Grant commission. That went for speed. Its remit was limited to building new authorities out of existing authorities, and not crossing county boundaries. In many areas, including mine, those two rules by themselves meant that no agreement was possible, because fears of dominance of town over country or country over town, or the existence—in my area—of several important towns close to county boundaries made the creation of a rational system of unitary authorities impossible.

I advise going for a slower, but more thorough process that allowed more radical solutions and that sought ideas not only from existing councils, which are bound to reflect their institutional interests, but from a wider community. Structure is probably the last thing that must be decided after function and finance, and it is important for the Government to return to that.

3.40 pm

Alistair Burt (North-East Bedfordshire) (Con): Welcome, Mr. Illsley, to the third and probably spikiest of an occasional series of seminars on the Office of the Deputy Prime Minister, ably run by the Minister and the hon. Member for Cambridge (David Howarth). Although we have less time than normal on this occasion, what has been packed in has certainly been up to the quality of our previous sessions.
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I congratulate the brutal hon. Member for St. Ives (Andrew George) on securing this debate and leading off. He gave a series of illustrations of how the present burden of waste and bureaucracy is causing nonsense and managed to put the words "cynical ploy" and "this Labour Government" in the same sentence. I suspect that if that were tapped into Google there might be more than one reference to those words being linked.

My hon. Friend the Member for Monmouth (David T.C. Davies) told us about his experience of the Welsh Assembly and of how costs can rise. He spoke endearingly of Welsh embassies around the world but, frankly, with the Welsh rugby team and Katherine Jenkins, I do not see that anything else is needed to advertise Welshness anywhere.

The hon. Member for Southport (Dr. Pugh) drew attention to another modern problem connected with local government: the plethora of bodies that are now involved in some way in partnerships or stakeholding so that any consultation must be rushed before information comes back. That led him to the conclusion, as it would have led me, that the only winner in such a system is the sole partner with a fixed and single view: the Government.

My hon. Friend the Member for Banbury (Tony Baldry) in a series of devastating attacks clearly pointed out the damage done by the waste, bureaucracy and nonsense that characterise local government today. He rightly referred to the quotation of John Banham about how the costs of restructuring are always well beyond anything that is contemplated. He put his finger on the elephant in the room: the leaked letter of the Minister of Communities and Local Government which was a ploy to divert attention from impending huge council tax increases and to set Tory against Tory—a ploy with which we will not comply.

The hon. Member for Leicester, South (Sir Peter Soulsby), with almost a slight deviation to the 1980s which might not have been necessary, made a significant and well measured contribution on the problems of attracting people into local government, of public esteem and of establishing proper links between what is raised and what is spent. Although it has taken him 30 years to decide to leave local government and get a life, we are delighted that his experience is so well put to effect in a debate such as this.

The hon. Member for Cambridge in his usual persuasive and homely way gave us another master class based on his experience of local government. I particularly agree with and support his point that if we want to enhance local authorities in this country, we do not need gimmicks. We need to restore their power and accountability, and then the sort of people who made local government great in this country will again be attracted to work in that area. There are already good people in local government, but too many have slipped away because they feel that they could do something elsewhere. We want them restored to local government.

I remember that as a child when I passed churches, and being a good follower of Jesus, I read the little homilies outside. One I particularly remember said accusingly, "If you were charged with being a Christian, would there be enough evidence to convict you?" I have lived with the guilt of that ever since. I could turn that
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around today and ask the Minister whether there was sufficient evidence to convict him and his colleague of making a complete Horlicks of local government in England and Wales. I suggest that the answer would be yes. Based on that evidence, we have heard today all the problems with which he is rightly charged.

There is continual tension in the United Kingdom between the powers of central Government and the needs of local government. That waxes and wanes over the years depending on the Government, and there is never a fixed point at which there is a settlement. The nation feels that this Government are central and controlling and the lack of trust in them is strongly reflected at local level. If there is to be a better future for regional and local government in England and Wales, three problems must be addressed and put right.

First, the Government must stop undermining local accountability. New taxes and burdens are imposed on local government, but it is not given the funds to pay for them and the public become confused about the responsibilities of their local authority and of the Government. New burdens in recent years have included the landfill directive, the directive on disposal of white goods and electronics, asylum seeker dispersal, care standards, emergency planning, homelessness and licensing. All were placed on local authorities without money to pay for them.

Beyond that, there is a growing sense among those at senior level in local government that, these days, they must look up to Whitehall for their careers and future, not out to the community that they are supposed to be serving. They feel that they are the local arm of central Government, and that is not what local government should be. In my area, that led to the nonsense of rate capping. Mid Bedfordshire council had the 10th lowest charge in England, but it cost £85,000 to re-bill ratepayers, all to save them an average of 15p per week. That is an example of domination by the Government going too far.

Secondly, the Government must stop undermining local responsibility by moving powers to various boards and partnerships. We all know of examples. The clearest one is moving powers to regional offices which do not, in fact, deliver the goods. They now have responsibilities for transport, housing and planning that have been taken from democratically elected bodies. If regional offices worked, that would be something, but the report yesterday from the Urban Task Force neatly illustrated how they fail to get things right. In describing the problems of delivering regeneration, the Urban Task Force stated:

That is how the new bodies and the new partnerships do not deliver on just one aspect of government—the vital one of delivering regeneration. They do not do the job and are not effective in crucial areas.

Thirdly, the Government must sort out and stop the incessant drive to regionalisation. The preamble of the leaked letter states:
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that is, the Minister of Communities and Local Government—

If that is to be done in the context of police and health, we know what it will be. It will be regionalisation, as that is where restructuring goes and it is the declared aim of the Government. We know exactly what we will get if local government reorganisation follows that pattern.

A better approach for the Minister for Local Government to take would be, first, to restore local authority powers and responsibilities. Powers should be gathered from the top down and sideways from the various boards. That would lead to an increase in interest and participation.

Secondly, the Minister should encourage the voluntary coming together of areas where there is a natural congruence, because the regional boundaries as currently devised simply are not adequate. For example, there is more congruence among south coast towns than there is in any structure that links them with places many miles to the north or inland.

Thirdly, the Government should be an enabler and ring-holder, and not enforce from the top down. Fourthly, it is better to build from the bottom up, and to ensure that councils at district, county, borough and metropolitan levels pare costs, share facilities and look for a consensus on what is delivered and how it might be done. Finally, the Government should pare down partnerships and make their responsibilities clearer so that they can deliver. That is a better recipe for local government growth and development in this country than continuing along the failing lines that I fear the Minister and his colleagues will enforce on us all.

3.50 pm

The Minister for Local Government (Mr. Phil Woolas) : I thank hon. Members for a very wide-ranging debate. The title of regional and local government allows comment on just about anything. I congratulate the hon. Member for St. Ives (Andrew George) on securing the debate and on giving us the opportunity to share different policy ideas and strategies. I also thank him for asking questions about his constituency. I am grateful for the advance notice that he gave me, and for the spirit in which he approached the subject.

I reject the central charges that hon. Gentlemen have made against Government policy. There have been caricatures of policy, repeats of urban myths and some slight exaggerations. We have also been accused of control freakery yet again. This Government, who devolved power to Scotland, to Wales and to London, and who have pursued a policy of freedom and flexibility towards local government, cannot fairly be accused of control freakery, especially when contrasted with the Government of the 1980s and early 1990s, a period to which some hon. Members referred.

We have also been accused of regionalisation. That is unfair, and I shall try to explain why in the brief time available to me. The debate in Government and in
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Parliament was whether transport, for example, should be regionalised down from Whitehall, not up from local authorities. Some functions, such as those performed by regional fire control centres, are performed well at regional level. Emergency numbers have worked very well indeed in London for most of the past 100 years, and have the support of most fire officers across the country.

I shall try to answer as quickly as I can some of the specific points made by the hon. Member for St. Ives, because it is his debate. He called for a new meeting of the Regional Affairs Committee. The Government are open to that suggestion, but I remind him that only eight Members responded, if my memory serves me correctly, when the views of the House were canvassed on whether it should meet again.

Andrew George : Perhaps I blinked when that happened, but just so that I did not miss it, will the Minister say how the House was canvassed on whether the Regional Affairs Committee should meet again?

Mr. Woolas : If my memory serves me correctly—I shall correct myself if it does not—my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) canvassed the House, and the Leader of the House was presented with the result of the canvass just before the hon. Gentleman asked his question in the House. That, I remember, was part of his consideration. The point is that the Committee exists. I should have thought that the House would want to consider the possibility of its meeting again. I am certainly not standing in the way of its doing so. Indeed, I believe that it has the power to meet outside London.

The hon. Gentleman made some points about the Isles of Scilly. The per capita ratio of senior officers to population is pretty high compared with my local authority, but he has a point, on common-sense grounds if in no other way, and I am pleased to report to the Chamber that Departments, agencies and the council have started to work together under voluntary arrangements to plan improvements, particularly to the inspection regime. Indeed, a meeting is scheduled for 19 December to take that forward. I am very conscious of the fact that applying the funding regime to the Isles of Scilly does produce unintended consequences that can be disruptive for them, and I thank the hon. Gentleman for making that point.

May I hit on the head the point about county councils versus districts, and the suggestion that that was a cynical ploy on the part of a Labour Government? I do not concede that, because I do not concede for a moment that all counties and districts are held by the Conservative party. If we took the point made by the hon. Member for Banbury (Tony Baldry) and picked, say, Durham and Lancashire, we would find that the situation was different. Although it is not, of course, the Government's policy to comment on leaks, a close reading of The Daily Telegraph shows that the options were simply put forward and no conclusions were drawn. It is hardly a secret—indeed, it is an open debate in local government—that the issue has been considered not least by districts and counties. However,
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Government policy on the issue shows no predilection towards counties or district—or, indeed, towards taking action on structures at all.

Alistair Burt : I am extremely grateful to the Minister for giving way in such a tight debate, but can I press him on the issue of context? The point made by the Minister of Communities and Local Government at the beginning of his letter is that the debate on restructuring should be seen in the context of the structural changes being made to the police and health services. Those are being redesigned on a regional basis, which therefore gives rise to the supposition that that will also be the context for the changes in local government. Can the Minister respond?

Mr. Woolas : I can respond and I am glad to have the opportunity to do so, because I think that the hon. Gentleman is misreading things in that respect. No regionalisation of primary care trusts is being proposed; it is the strategic health authorities that are being considered for regionalisation, and I remind hon. Members that they were regional not too long ago anyway. As I said, the decision on fire control is a sensible management and logistic decision, rather than a policy or political one. Similarly, the proposals for the police, which have been considered and consulted on, are not prescriptive or universal across the country. Amalgamations are proposed where clear benefits to the service can be brought about. The Government's policy is service improvement-led; it is certainly not about regionalisation.

I am squeezed for time, although I am glad to be so, because it is good to see hon. Members taking part in the debate. None the less, let me say that I hope that the hon. Member for St. Ives appreciates that the Liberal Democrat party is in favour of elected regional assemblies. In this debate, he said that very few powers could reasonably be held at regional level, and I do not quite see how the two policies square. At the same time, the hon. Member for Monmouth (David T.C. Davies) said that he is not in favour of devolution and that it has all gone wrong. Therefore, the hon. Member for Monmouth is against devolution, the Liberal Democrat party and the hon. Member for Cambridge (David Howarth) are apparently in favour of devolution to the regions, but do not know what the regions should do, and the hon. Member for North-East Bedfordshire (Alistair Burt), who speaks for the official Opposition, accuses the Government of centralisation. The words "pot" and "kettle" come to mind.

David T.C. Davies : I actually said that devolution did not work—I said nothing about the shire counties. In fact, I would be very much in favour of taking further powers from central Government and giving them to county councils, although not to regional assemblies.

Mr. Woolas : I thank the hon. Gentleman. As I have told many conferences of local authority leaders in recent weeks and months, the introduction of local area agreements and the pooling and aligning of Government central funds at local level, with local authorities acting as first among equals in respect of other public sector agencies, are some of the most significant acts of devolution in this country for many a
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year. I therefore reject the notion that this is a centralising Government and that we are implementing a stealth policy of regionalisation. In fact, as our manifesto declared, and as can be seen from the freedoms and flexibilities, local area agreements and other policy measures that we have introduced, our policy is one not only of decentralisation of function, but of devolution. Let me take the example of the licensing law. The licensing law is an act of devolution; it passes powers to local authorities, although one would not know that.

On the point about the new burdens, the Government are committed to dealing with that. The Local Government Association says that there are £72 million of extra costs, but I have not had one letter pointing out the savings that will be made through that act of devolution.

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