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11 Nov 2008 : Column 244WH—continued

Paragraph 1.4 of the draft proposal, which was published in July, reads:

Then, yesterday, the boundary committee issued a briefing note for today’s debate in which the boundaries have moved again:

First we were told that Torbay and Plymouth would be specifically included in any discussions on changes in local government service delivery in Devon, then that they might be involved and now that they will be involved only if certain criteria are met.

It was felt that Torbay had been included at the start of the process—the boundary committee gave a clear indication to officers and councillors, as well as to me, that we should engage with the process—so it is extraordinary that council tax payers’ money has been thrown down the drain and time wasted when we were allegedly never invited to participate in the first place. The Minister should ask why Plymouth and Torbay unitary authorities would have made considered submissions, alongside individuals and organisations from both areas, if the boundary committee had not misled them into investing time and resources.

How the boundary committee can continue under the misnomer that it is advising the Secretary of State on the structure of local government in Devon, when four out of every 10 Devon households are excluded from the review, amazes me. I cannot speak on behalf of my Devonian cousins in Plymouth, but my constituents, who make up three quarters of the residents of Torbay unitary authority, will miss out and be disadvantaged if either of the recommendations from this unelected and unaccountable quango are accepted. This process has missed an opportunity to reunite Plymothians and the people of Torbay with the rest of Devon as a whole, or at least with unitary authorities with “Devon” in their titles. Three or four evenly sized unitary authorities could have met each of the five criteria laid down by the Secretary of State. They could also have tackled the problems faced by Torbay unitary authority and the challenges confronting the south Devon economy.

Torbay is the same size as the Exeter unitary authority that the boundary committee ruled out on the grounds that it was too small to be an effective unitary authority. Torbay needs to be placed in a much wider south Devon context of commuter patterns, health care and education provision and economic activity. The towns of Totnes, Ashburton, Dawlish, Paignton, Newton Abbot, Torquay, Teignmouth and Brixham share a common heritage and history. Yet the people of Teignbridge and South Hams have been denied the opportunity to consider taking over the smaller area and population of Torbay, and instead could be taken over by the largest unitary authority in the country with a headquarters a long way from the people it serves. Indeed, unitary county hall could well end up in Barnstaple if one of the draft recommendations is accepted.

If either of the recommendations is accepted, Torbay will be the smallest unitary authority in the south-west region, encircled by the largest unitary authority in the country. It will certainly not be in my constituents’ interests to be overshadowed in this way and it would be a great injustice not to allow them even to participate in the process that brought it about.

In a letter to the review manager from the elected mayor of Torbay and the chief executive, the point was made very clear that:

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That should be straightforward and common sense, but clearly it is not happening. Torbay and Plymouth have effectively been excluded from the review, even though the review’s final and accepted recommendations will have important implications for both those areas.

The solution is to go back to the drawing board and start again from the grass roots up. If the Secretary of State for Communities and Local Government wants to improve local government in Devon, the whole of Devon should be included in those improvements. She should return to the criteria, reform them and get the review right. Instead of displeasing all the people all the time, the Government should include all the people in determining changes to the delivery of their services. This is after all supposed to be local government, but “local” seems to be the one thing missing from this whole debacle.

12.39 pm

The Minister for Local Government (John Healey): I congratulate the hon. Member for Torbay (Mr. Sanders) on securing this debate. In his opening remarks, he quite rightly listed the famous sons and daughters of Devon. I had not realised that he also hails from the county that he represents. I can see that that is a particular source of pride for him.

I am very conscious of the pride that there is in the county. My concern, however, has been to consider whether or not there are better arrangements for the future governance of Devon. In particular, I refer to arrangements that would benefit the residents of Devon. That is the underlying principle behind our interest and the request that we have made to the boundary committee.

I welcome the fact that the hon. Gentleman describes himself as an advocate of unitary local government. In the past 15 months, I have felt like I was one of the few advocates of unitary authorities and one of the few who could see their great advantages, including avoiding duplication, increasing efficiency and simplifying responsibility for local council tax payers and local residents.

This debate takes place at a significant time in the restructuring process. As the hon. Gentleman is aware, the boundary committee is considering the representations on its draft proposals for single-tier local government in Devon. Its job is to assess them and provide advice to the Secretary of State and Ministers at the end of the year. I should make it clear that, at this stage, the job is that of the boundary committee and that the Government have no formal role, not least because the boundary committee is charged under statute to conduct the process and is set up under statute as an independent body.

As things stand, therefore, the statute prevents Ministers from making any decision on alternative proposals for unitary local government until six weeks after the date of receipt of advice, which is scheduled to be 31 December. Let me assure the hon. Gentleman that Ministers, not the boundary committee, will make the decisions and that we will be accountable, including in the House, for any decision. Given where we are in the process, I hope that the hon. Gentleman will understand that I will not
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comment specifically on the draft proposals that the boundary committee has published and on which it is considering representations.

Let me deal with the hon. Gentleman’s core concern. He asks on what basis the boundary committee is considering the position of Torbay and Plymouth and whether it has changed since February, when the initial request for its work was made. On 6 February, we asked the boundary committee to provide advice on a number of matters in relation to a proposal for a single tier of local government in Exeter that had been submitted to Government. That request specifically asked the boundary committee whether certain alternative unitary proposals could be identified that would have the capacity to meet the criteria that the Government had set out. In that request—I checked on this during the hon. Gentleman’s speech—we made it clear that the alternative proposals should involve changes to the boundaries of Plymouth and Torbay only if, on the basis of any evidence received, the committee considers that they are essential if there is to be an alternative proposal for a single tier of local government for Exeter and the whole or part of the surrounding Devon county area. In aggregate, that would have the capacity to deliver the outcome specified by the five criteria.

If the hon. Gentleman has not had a copy of the full request—I suspect that he has—I am happy to let him have one. In black and white and on paper, the basis on which the boundary committee could, or perhaps should, consider the boundaries of Torbay has been clear from the outset.

Mr. Sanders: Does it not strike the Minister as odd that the extremely experienced and able local government officers in two local authorities, together with capable councillors—in one case an elected mayor—and a Member of Parliament have all interpreted that differently? Not only that, they had conversations with the commission and were encouraged to put forward ideas. Later, they were told that they should not have done that, because it was not part of the criteria.

John Healey: I cannot account for how local government officers might have read the guidance, whether they understood it or how they understood it. If the hon. Gentleman had talked to me about it at the same time as other hon. Members, I would have been very clear with him. What was reflected in the request for advice was, essentially, that we should not look to alter the unitary authorities where they exist, but that there had to be some scope for the boundary committee, if it felt that it might be necessary as part of any overall proposals for other arrangements within the county, to consider that question. That was the basis nearly eight months ago, when we first published the advice.

Mr. Sanders: I accept the point that the Minister makes. Since being told that one had wasted one’s time, I have been trying to request a meeting, albeit with the Secretary of State, to discuss the matter. I have been told that the decision is taken not by the Secretary of State, but by the boundary review and that it will make its recommendations at the end of the year.

John Healey: If the hon. Gentleman was seeking a formal meeting with the Secretary of State, he will have to wait for the boundary committee to conduct its part of the process. It is up to the committee how it does
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that, as long as it meets the terms of the guidance and the timetable that we have set out. It is for those with an interest in the subject to make their representations and their case to the boundary committee. When we receive alternative proposals—if the boundary committee wishes to make them for Devon—there will be a period of four weeks in which the hon. Gentleman and others can make representations directly to Ministers. If he wishes to meet me at that stage and there are grounds to do so, I will be happy to meet him. Then it will be—this is set out in statute—at least another two weeks before Ministers can make any decision on future unitary arrangements, based on alternative proposals from the boundary committee.

As I said earlier, Ministers will make the decision. We will take into account not just what we may be advised to consider by the boundary committee, but any representation that is made to us at that time. Any decision that we take will be reported to the House, and we will be accountable through hon. Members and to the House. Clearly, if we proposed any change to the current local government arrangements, we would have to table regulations to that effect, and they would be fully debated. That would allow hon. Members to scrutinise the details of the proposals, as well as to hold us to account for any decision that we take.

I think that I heard the hon. Gentleman say that he accepts that there is no question of him not being allowed to participate in the process. The purpose of the published request to the boundary committee was to make it clear from the outset the basis on which the boundary committee had been asked to consider the position of Plymouth and Torbay in the context of its principal job, which is to look at the unitary arrangements—or potential unitary arrangements—in those parts of Devon that are still two tier. In other words, we wanted to ensure in the process that existing unitary authorities would not be changed unless that was necessary.

I am not sure whether the hon. Gentleman got to these questions, although they were implicit in what he said. Can we not allow the boundary committee to do something different from what we asked it to do in February? Can we not make it clear that we want it to consider the boundaries of Plymouth and Torbay in a more open fashion? To some extent, we are bound by the statutory nature of the process, which is set out in legislation and does not allow us to amend a request for advice from the boundary committee after it has been issued. If we were to consider taking such a step, we would therefore have to issue an additional request.

Given that the original request for advice was made eight months ago, that there is less than two months to go before the committee is due to make proposals to the Government and that Devon and all the interested parties have been working on the basis of the advice that we requested from the boundary committee, it simply does not make much sense to consider that option, not least because it would extend the period of uncertainty, which I am anxious to keep to a minimum, because I recognise that it raises big questions for people and existing councils in Devon. I am anxious to get to a position where we are clear about what we think should be the way forward without unnecessary delay.

However, it may be of some interest and comfort to the hon. Gentleman, as he has taken the trouble to initiate the debate, if I make it clear that the legislation
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and the process have the potential to allow for boundary changes after the creation of any new unitary authority in Devon. Although the boundary committee stated when it published its draft proposals on 7 July that it had decided not to recommend changes to the boundaries of Torbay or Plymouth in its draft proposal, the committee might consider that some boundary adjustments could be advantageous to the authorities concerned, including his. The committee’s view, which I share, is that those boundary adjustments could be promoted if a review under section 8 of the Local Government and Public Involvement in Health Act 2007 were undertaken later.

Mr. Sanders: Would those adjustments be minor, or could they involve a fundamental reorganisation, as suggested in the recommendations?

John Healey: Essentially, the boundary adjustments would probably be described better as modifications than as fundamental re-drawings, but the powers exist nevertheless under section 8 of the 2007 Act. I urge officers in the councils concerned to consider that if we decide to proceed with adjustments to the local government arrangements in the other part of Devon. If we do, the hon. Gentleman may also want to make representations on that point when we seek to implement any decision.

I have explained what stage we are at and the process that we will undertake following receipt of the boundary committee’s advice and proposals at the end of this month. After that, the earliest that the Secretary of State could take and announce any decision would be the middle of February. If appropriate, we would then introduce any necessary regulations to the House without undue delay. As I said, I am keen to ensure that we reduce the period of uncertainty and give the clearest possible direction, so that the House has the chance to discuss and approve or reject the proposals. If we were to consider a system of unitary authorities for all or part of Devon, the work necessary to prepare for such a change could then be started in earnest.

In summary, I have two things to say to the hon. Gentleman. First, the basis on which the boundary committee has conducted this process and considered the boundaries of Torbay or Plymouth has been clear from the outset; it was clear in the request for advice published back in February. Secondly, it seems sensible, particularly more than eight months on, to stick with our present approach. There is a legal framework for dealing with questions about boundary changes for Torbay and Plymouth subsequently, and it could be initiated either by the boundary committee or under the legislation by a local authority, including his, in whose favour he speaks so strongly.

12.56 pm

Sitting suspended.

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Bank Lending

1 pm

Mr. George Mudie (Leeds, East) (Lab): It is a pleasure to participate in this debate and to do so under your chairmanship, Mr. Martlew. It is the first time that I have served under you, but I have heard highly of how fairly and sympathetically you chair Committees. Hopefully, I will need neither your fairness nor your sympathy.

My objectives in the next quarter of an hour are, first, to demonstrate the culpability of the financial sector in landing us in our present very straitened circumstances; and, secondly, to consider how the sector seems, at this very early date, to be responding to Government measures and to the recession that is just getting under way. I will contend that the way in which the financial sector behaves will affect the length, depth and seriousness of the recession. If the financial sector is positive in partnership with the Government, there is a chance that we will have a short and shallow recession. However, if it is not, and I will contend that there is every sign that it is not acting positively, the great fear is that we will have a deep and long recession, which will adversely affect many people in this country.

I start by making the point that yesterday in the Chamber we had a debate on the economy on an Opposition motion. There was the political opportunity to blame the recession on the Government’s policies and so on. However, any fair person who has looked at the events of the past 12 months, or who has been involved in them, must say that the origin of the current economic problems clearly lies in the finance industry and in the United States.

Mr. Andrew Pelling (Croydon, Central) (Ind) indicated assent.

Mr. Mudie: I am glad to see that I have support in another part of Westminster Hall today.

The fact that there was cheap money enabled money to be pumped into the system and inappropriate lending to take place. My favourite example from America is that of the old lady of 90 who was employed as a cleaner and given a $450,000 mortgage. After two years with that mortgage, she felt that it was time to retire, which I think was a very sensible move, but of course she lost her house because the mortgage was called in. That is probably an extreme example but it is none the less an example of the extent of the laxity and irresponsibility of borrowing, because of the cheap money that was available.

However, the really bad thing that came out of the United States was that the financial sector, not content with extending the market with cheap money, packaged it into different financial instruments. For some reason that, looking back now, no one can understand, those instruments received a triple A rating and the American financial sector was able to sell them throughout the world—a major selling place was the UK—without the buyers taking the trouble to analyse what was in these financial vehicles, because of the triple A rating that had been granted to them. Thus, some of these very doubtful loans were added to—what? No one knew, because they just bought these instruments, as they were covered by a triple A rating. The instruments were very saleable and they made money.

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