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Simon Danczuk (Rochdale) (Lab): Although the Secretary of State clearly has the stomach for these terrible cuts, that is not the case in local government. In Rochdale,
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the Liberal-Conservative coalition council has collapsed under the weight of the Government's unfair front-loaded cuts. Today the eighth Lib Dem councillor resigned from their party. Will the Secretary of State join me in congratulating Rochdale's Labour councillors, who have put lead in their pencils and taken minority control to create a compassionate council that cares about local people?

Mr Pickles: The hon. Gentleman had clearly prepared his speech before I delivered my statement. How can 8.9% extra help to Rochdale-to his council-and the following year a 4.3% drop in spending power be regarded as front loading? We have gone out of our way to help Rochdale. We have offered more help than the Labour party would have done. The hon. Gentleman's council would be a lot worse off if we had applied Labour's formula. This is a progressive settlement which protects the vulnerable, and the hon. Gentleman does himself no good by not recognising that fact.

Andrew Percy (Brigg and Goole) (Con): I welcome the statement and, in particular, the announcement of a general power of competence for local councils. Will that or a similar power extend to parish councils? There is a great opportunity for parish councils to help local councils, as we did in my village this weekend with snow removal. There is a great opportunity also for parish councils, working with their district councils, to help save money, so will that power extend to the parishes?

Mr Pickles: Increasingly, we will encourage more parish councils to be formed. We believe that the neighbourhood is the natural point to which funding should go for local authorities, and I am very happy to confirm to my hon. Friend that, indeed, parish councils will get a general power of competence. Basically, the chain will turn on its head: the normal presumption is that councils have to find a law to take a particular action; now, they will have to find a law that prevents them from doing so. I think that that will allow for greater flexibility.

Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab): I congratulate the right hon. Gentleman, whom I must describe as Eric through the looking glass, on being able to persuade his minority coalition partners that a scorched earth policy is actually fair and progressive. This year, the national business rate will raise just over £22 billion. Is it not the case that, by 2014-15, the amount that central Government distribute will equal the business rate and run very close to breaking the current law, whereby they are required to distribute the whole grant to English local government?

Mr Pickles: I thank the right hon. Gentleman for the allusion. He seems to be vying for the title of the Red Queen: judgment first, judgment first, before he hears the facts.

Mr Blunkett: Better than the White Rabbit.

Mr Pickles: Before the right hon. Gentleman disappears down his own rabbit hole, I will continue.

There is a theoretical surplus in 2013-14, but the right hon. Gentleman knows that we have an obligation to distribute the national non-domestic rate to authorities.
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The figure of £3 billion is overstated, because the Office for Budget Responsibility has not taken into account the number of grants that we have rolled into the block grant. We have done that because of its distributive effect, and by 2013-14 we hope that a new system of local government finance will be in place.

Miss Anne McIntosh (Thirsk and Malton) (Con): This announcement is the other side of the coin for flood defence spending. Will my right hon. Friend explain what proportions of the budget, with the removal of ring fencing, will be spent on capital expenditure and on maintenance? Will he consult on the possibility, if councils find themselves short of money, of water companies adopting and maintaining new sustainable drainage systems?

Mr Pickles: The latter point will of course be a matter for my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs. On the capital programme, the various Departments will make their usual announcements in the reasonably near future, so that local authorities have an indication of their capital programmes.

Joan Ruddock (Lewisham, Deptford) (Lab): The Secretary of State speaks of fair, sustainable and progressive proposals, but he must be using a different dictionary from the one on my bookcase, because his proposals will devastate my deprived constituency and borough of Lewisham. Given that 40% of the budget is spent on elderly and children's care, can he not see that the proposals will mean draconian cuts in everything else? Will he not admit that his real agenda is shrinking the state and shifting the blame?

Mr Pickles: The hon. Lady will be pleased to know that Lewisham faces a drop in spending of 6.5% this year and 4.3% the following year. That does not strike me as draconian by any stretch of the imagination. She has made her reputation on shroud waving in this Chamber, but she should be addressing the needs of the people of Lewisham, who will continue to receive a high level of support from the central state to ensure reasonable provision in Lewisham.

Stephen Gilbert (St Austell and Newquay) (LD): Does the Secretary of State agree that the ending of ring fencing announced today and the introduction of the Localism Bill mark an historic turning point for local government in our country? After 13 years of the previous Government micro-managing every part of local government, today marks the day when the coalition takes Whitehall out of the town hall.

Mr Pickles: I entirely agree with my hon. Friend. I am delighted that the reductions in Cornwall will be 3.9% next year and 2.2% the following year. He is entirely correct. No matter what the Opposition say, we are passing real, substantial powers to local authorities. We have reduced the number ring-fenced from 90 to about 10. The only substantial ones to note are the school grant and the national health service grant that starts in 2013. We have given local authorities a great deal of leeway and discretion. Given that the Local
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Government Association said that it would be perfectly capable of dealing with a 9% reduction in spending and that the overwhelming majority of councils are well below 8%, I am very surprised-as, no doubt, he is-that there is not more celebration across the Chamber.

Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): Liverpool is the most deprived city in the country and 40% of 16 to 18-year-olds there are about to lose all their education maintenance allowances. Will the Secretary of State tell the House how much Liverpool will lose in cash terms, including the cuts already made this year?

Mr Pickles: I made a very pleasant visit to Liverpool earlier this year and had the opportunity to meet and spend time with Councillor Joe Anderson. He told me that he felt that his chief executive and senior staff were overpaid. I commend to the hon. Lady the very brave decision that he has taken today to reduce his top management of 74 by 48. By just removing 48 staff and those among the top officers taking pay cuts, £4.25 million has been saved. That is an indication of the determination of Liverpool. I am delighted to tell her that giving a new damping grant to Liverpool has meant that we have saved an extra £15 million on top of that.

Rory Stewart (Penrith and The Border) (Con): Given the unique problems faced by rural areas and the incredible creativity and energy with which the Eden valley and other communities are overcoming their problems, will the Secretary of State please reassure us about the impact that these decisions will have on rural communities?

Mr Pickles: One of the great difficulties that I have alluded to is trying to balance relative need with sparsity, which is extremely difficult. I was very keen to pass the additional money available for adult social care into those communities. That has meant that some district councils-by their nature, because they are not social services departments-have faced a quite considerable reduction. That is why we have moved additional money across from my Department to ensure that those communities are not put at a disadvantage. I admit to my hon. Friend that this is a stop-gap, but I hope that within two years we will be producing a much fairer, much more transparent and much more honest policy. We are operating on the basis of an inherited policy, but frankly it was not worth the candle to dismantle it just for two years.

Mr Bob Ainsworth (Coventry North East) (Lab): As Coventry council declares hundreds of redundancies, how does the Secretary of State justify his denials that he is relishing wielding the axe, given that he was one of the first Secretaries of State to settle with the Treasury at one of the highest levels of cuts? How does he claim to be concerned about the most deprived communities given the cuts that he made to the area-based grants, which fall almost entirely on those councils with the most deprived areas within their jurisdictions?

Mr Pickles: The right hon. Gentleman is a very distinguished Member of the House, and he should know not to believe everything he sees in the newspapers. I settled with the Chancellor three days-I think-before the final settlement. I have no idea why the stories that I was an early settler came out. I am sure that the right
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hon. Gentleman will be delighted that Coventry faces a cut in its spending of 5.9%, and 3.9% the following year. The substantive point is this. I listened to the chief executive of Coventry council this morning on the radio, and given what the council has been doing in terms of greater efficiency and amalgamating services, what we have been able to offer through this process has meant that Coventry has received considerable protection. The levels of cuts are in single figures. This time last week, Opposition Members told us that we were going to see reductions in spending of 20% or 30%. We were told it was going to be Armageddon, so they would have settled for 5.9%.

Heather Wheeler (South Derbyshire) (Con): While I congratulate the Secretary of State on looking after the most vulnerable people in society, may I press him to give some comfort to middle England and the district councils, particularly given the situation that we face over disabled facility grant and other issues that are coming along, especially in south Derbyshire?

Mr Pickles: We are all paying a great deal of attention to the squeezed middle, not least those on the Opposition Benches. One of the consequences of our decision to put substantial moneys into adult social care, as well as the move-across on the bus grant, is that the district councils, by proportion, received a much smaller amount. That is why we put in some additional sums of money in order to protect them. I think that middle England is safe with the coalition.

Mr Clive Betts (Sheffield South East) (Lab): The Secretary of State is right that local government was fearful of the up-front nature of the cuts, which is still there, and the disparities in the cuts, particularly in that they most adversely affected those authorities with the highest level of grant. Will he therefore produce figures comparing not only grant settlements year on year but total spending levels, including council tax, authority by authority? Although he says that the highest cuts in total spending power reduction will be 9%, if the average is 4.4%, does that not mean that some authorities will get no cuts at all, or even perhaps a small increase?

Mr Pickles: I believe that Dorset gets a 0.1% increase in its financing; I hope that it will not go mad and squander that additional sum of money. I do not think that any place in England is seeing an increase, when the fact that district councils are receiving a considerably greater reduction in their spending power is taken into consideration. The hon. Gentleman may have seen the bundle of documents that I have here, which include lots of things explaining exactly how we have done this. I commend to him the straightforward calculation on pages 55 to 56, which explains precisely and exactly how the figures have been worked out.

Several hon. Members rose -

Madam Deputy Speaker (Dawn Primarolo): Order. I remind hon. Members that questions are supposed to be short. If the answers could be short as well, that would be helpful, because many hon. Members still wish to participate.

Christopher Pincher (Tamworth) (Con): Will my right hon. Friend commend Lichfield district council and Tamworth borough council on leading the way by sharing
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front-of-house and back-office services to save council tax payers' money? Will he also congratulate Tamworth borough council on its announcement that it is freezing council tax? It is the first time that that has happened in Tamworth in a generation. Does that not demonstrate that Conservative councils offer value-for-money services-

Madam Deputy Speaker: Order. I have only just said to the House that there should be short questions. That does not mean three short questions or four short questions. The Secretary of State will answer one of those questions.

Mr Pickles: In the interests of brevity, I congratulate Tamworth. That is the kind of Tamworth declaration that I would expect.

Hazel Blears (Salford and Eccles) (Lab): The Secretary of State says that he is being generous in putting £30 million of his departmental budget into local government. For a big man, that is pretty small beer. Does he accept the truth that the abolition of area-based grant means that the poorest places, especially in the north, will be worse off? In Salford, £3 million of area-based grant goes into tackling crime and disorder.

Mr Pickles: For Salford, the reduction in spending power will be 8.5% next year and 3.9% the following year. There is a misunderstanding from the right hon. Lady, although I do not mean that disrespectfully. The way to protect the poorest is to put money into the block grant, because that is the most distributive grant. That point is like the argument about the level of capitalisation. The more money that goes into the block grant, the more that vulnerable communities are protected.

Justin Tomlinson (North Swindon) (Con): I support powers to veto excessive council tax rates, especially for those on fixed incomes. That will be welcomed in my constituency, where under the former Labour-controlled council, council tax rates rocketed by 42% in just three years. To protect residents, what levels can we expect for future capping rates?

Mr Pickles: Of course, I hope that it will not be necessary to cap any authority this year. I rather hope that they will all accept the council tax freeze. The beauty of the measure is that once we get through this year, there will be no more capping. A reasonable level will be suggested, and after that, local people can decide. If local authorities make a reasonable case for an increase, so be it. The measure will act as a break against excessive council tax rises.

Mr Nick Raynsford (Greenwich and Woolwich) (Lab): The Secretary of State expresses surprise that we are not rejoicing at the settlement that he has announced. After 13 years of Labour Government announcements that always contained year-on-year real terms increases in grants to local authorities, this year the Secretary of State is announcing a settlement in which every local authority in England-with the possible exception of Dorset, although that point was not entirely clear-will suffer a loss. Is that not an indication of what the Tory in government means?

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Mr Pickles: The right hon. Gentleman would not have dreamed of the relative needs level of 83%. Frankly, somebody as distinguished as he should not be asking, "Why are there cuts? What's happening?" We are in debt. The country is in a parlous state. Our level of sovereign debt is the highest in Europe. Had his party won the election, there would be real cuts in real terms in local government right now.

Mrs Anne Main (St Albans) (Con): Under the previous Government, St Albans city and district council, like other councils, laboured under an enormously bureaucratic and interfering assessment regime, with its regulations and inspections. Will the localism policy and the cuts in red tape save local authorities money through not having to comply with expensive regulations?

Mr Pickles: My hon. Friend is absolutely correct. We have got rid of comprehensive area assessments and all the daft targets, which achieved absolutely nothing. The problem with them was that they cost serious money to put together. That money can now be applied to front-line services.

Mr George Howarth (Knowsley) (Lab): The Secretary of State will be aware that grant floors are important to boroughs such as Knowsley. Can he explain how his banded floors will operate, and will he indicate what percentage will apply in each of the four bands?

Mr Pickles: I am happy to do that. Let us deal first with social services authorities. In 2011-12, the floor will be 11.3% for the most dependent authorities, then 12.3%, 13.3% and 14.3% for the least dependent. In the case of shire districts, the floor will be 13.8% for the most dependent, then 14.8%, 15.8% and 16.8%, so there is a good 3% difference between the various bands. Of course, for an authority such as Knowsley there will be a transitional grant on top of that to get the levels down to 8.9%.

Dr John Pugh (Southport) (LD): Will the Secretary of State clarify whether the new formula more adequately addresses the needs of authorities such as Sefton that have a disproportionate number of elderly residents?

Mr Pickles: Authorities with elderly residents, of course, will be some of the relatively big gainers because of the provision of adult social care. We want to put extra money into authorities with social services departments, and thanks to my right hon. Friend the Secretary of State for Health, we are looking at putting in serious money to deal with adult social care. I can recall standing at the Opposition Dispatch Box and asking for precisely the action that we have delivered today.

Stephen Timms (East Ham) (Lab): Given what the Secretary of State has said about fairness, why is it that from looking through the list of London borough grant changes, we see that the biggest losses in absolute and percentage terms are in the local authority areas where the level of disadvantage is the greatest?

Mr Pickles: I wish to make it absolutely clear that obviously, authorities that are more dependent on the grant will feel the effects of any reduction. We have moved the relative needs figure to 83%, and introduced the banded floors and the transitional grant, to protect
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those authorities. Had we not taken those decisions, and had we applied the system that the Labour party did, the effects on those communities would indeed have been great.

James Morris (Halesowen and Rowley Regis) (Con): I welcome the Secretary of State's announcement today. Is it not the case that across the country, there are lots of examples of local authorities working in partnership to reduce costs, sometimes across political divides? Will he outline how he can encourage local authorities along the line of more collaborative behaviour?

Mr Pickles: I am pleased to report that a number of authorities have gone some considerable way to find savings that can be made. We have already talked about Coventry, and Hammersmith and Fulham, Kensington and Chelsea and Westminster have started to join together to improve things. Birmingham has managed to save £130 million by outsourcing and Suffolk £40 million by divesting services. In the west midlands, asset rationalisation has achieved a £640 million saving. There is a very long list, which I shall not read out, but it is immensely important that authorities recognise that they can protect front-line services by shifting resources from the centre to the most vulnerable.

Andrew Gwynne (Denton and Reddish) (Lab): No matter what the Secretary of State says, the fact is that Tameside council is preparing for massive spending reductions over the next four years. Given that he has said that the changes are fair and sustainable, how does he square that situation for a borough ranked the 56th most deprived local authority area in England?

Mr Pickles: Tameside is enjoying considerable protection because of the three steps that I have announced, which I will not repeat. There are additional ways in which Tameside could improve its financial position, including through the regional development fund and such like. In fact, I have just been told that Tameside has a reduction in spending of 6.2%, which hardly figures with what the hon. Gentleman has just said, so I shall look forward to finding a nice thank-you note from him on the board tonight.

Andrew Griffiths (Burton) (Con): May I congratulate the Secretary of State on protecting adult social care and on listening to local councils about front-end loading? May I also commend to him the work of East Staffordshire borough council, which, by cutting expensive senior management, is protecting front-line jobs and services? Does he agree that average reductions of just 4.4% will mean that no council should be cutting front-line services?

Mr Pickles: I am grateful to my hon. Friend. This move goes hand in hand with increased transparency, because, by the end of January, every local authority will have to produce online all expenditure of more than £500 for close scrutiny by the electorate. If authorities are not cutting senior management but are instead taking out front-line services, it will not be me to whom they will be accountable but their electorate. I believe that this settlement will ensure that the trend towards a reduction in the centre and the protection of front-line services will be accelerated.

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Liz Kendall (Leicester West) (Lab): Will the Secretary of State tell the House how much money councils will be getting from the NHS to spend not on social care but on public health?

Mr Pickles: There are two funds, which add up to just a smidgen over £2 billion. The co-operation of the Department of Health, and the move in which local authorities with social services departments will now have an opportunity to influence the local health scene, represent a considerable change of which Joseph Chamberlain would have been proud. This will put local authorities in their rightful place of being able to co-ordinate a vital part of public health provision.

Julian Smith (Skipton and Ripon) (Con): May I ask the Secretary of State how he has dealt with the mess that he inherited from the previous Government around concessionary bus travel, which is so important for communities in North Yorkshire?

Mr Pickles: It has been a most dreadful experience, with the moves from the districts to the counties. One of the principal problems has been that a number of district authorities put in more money than the Government were actually giving them. At some point, some of that money was passported across to the counties, so that the districts registered a loss. I have tried to help by adopting a broad-brush approach of putting additional money into districts that are faced with a big loss in their spending power, but this is only a provisional assessment, and I will be listening carefully to what local authorities have to say on this issue.

Michael Dugher (Barnsley East) (Lab): Does the Secretary of State think that Mr David Shakespeare should remain as leader of the Conservative group on the Local Government Association after his offensive remark last week, which has been reported in today's newspapers, that constituents from poorer parts of the north-including areas such as my own-should

Mr Pickles: I was not aware of Councillor Shakespeare's remarks until the hon. Gentleman mentioned them. I will be seeing him first thing on Wednesday morning, and I shall ask him precisely what he meant by that.

Richard Graham (Gloucester) (Con): I welcome the Secretary of State's commitment to review business rates revenue. May I encourage him by saying that giving much of the business rates revenue back to local councils would reward proactive councils such as Gloucester city council, which sets out to attract inward investment, with a great source of new jobs?

Mr Pickles: I am very aware of my hon. Friend's constituency. I have visited it and know how proactive the council is in trying to bring in business. That is the secret: we need a system that rewards enterprise and initiative. Sadly, the current system tends to stifle both.

Richard Burden (Birmingham, Northfield) (Lab): The Secretary of State will know that, in the early part of the year, before the general election, Birmingham city council was already facing a major overspend. It claimed that it was not getting enough money from the then
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Labour Government, whereas one or two others said that the overspend was due to the council's mismanagement. Now that the right hon. Gentleman proposes to cut even more money from Birmingham city council, which does he think it was? Will he give the cash figure for the reductions in Birmingham? How does his statement relate to the forthcoming 20% cut in police numbers that his hon. Friends in the Home Office also propose for the west midlands?

Mr Pickles: I am delighted to tell the hon. Gentleman that Birmingham faces a cut in its spending of 8.3%, and 4.3% for next year. I am also pleased to tell him that Birmingham has managed, through outsourcing, to reduce the gross level by £135 million, which is attractive. The hon. Gentleman represents a party that got us into the mess in the first place.

Mr Ronnie Campbell (Blyth Valley) (Lab): It was the banks.

Mr Pickles: The hon. Gentleman says, "Oh it's the banks". Big Government, with unsustained borrowing, got us into the mess. Labour Members must take their fair share of guilt and blame for that.

David Rutley (Macclesfield) (Con): In Macclesfield, we are fortunate to have the wonderful Bollington leisure centre, which is run by the community for the community. Does my right hon. Friend agree that that success story clearly shows what local communities can do under the powers of the Localism Bill?

Mr Pickles: My hon. Friend clearly shows what localism can do, and the Localism Bill will ensure that more communities can do that. He will have noticed the scoffing on the Labour Benches about ordinary people banding together to protect a community facility. We have to emphasise that it does not have to be owned by the state to be used by the community. My hon. Friend clearly demonstrates the future; Labour Members demonstrate the past.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Earlier this year, Liverpool, the most deprived local authority, sustained the largest cut to its area-based grant of any core city. Will the Secretary of State now please answer the question asked by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), and tell us how much he is cutting in cash terms from Liverpool's budget?

Mr Pickles: One of the reasons why the hon. Lady's constituents and the fine city of Liverpool face a problem is the working neighbourhoods fund, which the Labour party cut. It took that money away. We had to find a way to pay for that, which is why Liverpool will be restricted to a loss of 8.7% and 7.1%. In addition, on the tour to which I referred earlier, we ensured that the money for decent homes, which the previous Government abandoned, was provided for Liverpool. Liverpool is in a much stronger position now than it was when the Labour Government were in power.

Paul Uppal (Wolverhampton South West) (Con): While I welcome today's statement, particularly the measures that go towards tax incremental finance, will my right
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hon. Friend consider making them developer led, rather than local authority led? When the measures were trailblazed in the United States a couple of decades ago, most American cities and states found that regeneration was much more effective when they were developer rather than local authority led.

Mr Pickles: Obviously, as part of my job, I have met a number of developers. Those who have reasonably full books as far as housing is concerned are the ones who have got alongside a local community. Those developers are seen not as an occupying army bulldozing over the green belt, as was the case under the previous Labour Government. They work alongside local communities, clearly demonstrating the benefits that development can bring to a neighbourhood. I think that that is the future-developers, local government and local communities working in co-operation-and that is what the Localism Bill will deliver.

Mr Ronnie Campbell: I met the chief executive of my local authority, Northumberland county council, last week. He tells me that he must save £100 million in the next two or three years. I hazard to say that that puts Northumberland county council in a right pickle. Is it not true that all that is happening is that services are being slashed and cut, people are being put on the dole, and the volunteers, if the Secretary of State can get them, must come in to replace them?

Mr Pickles: I have good news for the hon. Gentleman in terms of the loss of spending power, which is just 5.6% this year and 3.2% next year. As he is so cosy with his chief executive, he should ask him to take a pay cut to reduce central funding and the central office, to start sharing with other authorities, and instead of cutting the front line, to start cutting the feather-bedding.

Anne Marie Morris (Newton Abbot) (Con): I am delighted that rurality and the age of the population will be taken into account, but may I have some reassurance that Devon will not find itself, as now, right at the bottom of the spending league tables for schools, with children having roughly £400 per head less spent on them because of the cost of transport, among other things?

Mr Pickles: My hon. Friend should be pleased to know that Devon faces a cut of 1.8% in its spending. One reason for that, as in other local authorities, is that social services are offered a degree of protection depending on the number of elderly people who have chosen to live there. However, some of the districts have to rely on the full amount in terms of the guarantee of no more than 8.9%.

Derek Twigg (Halton) (Lab): The Secretary of State lost his train of thought this morning on the "Today" programme, which we can well understand given his disgraceful statement to the House this afternoon, but may I ask him a specific question? In the banding annex of the local government finance report, Dorset is in band 4, but he said that it will receive a slight increase in funding, or at least no cut. Will Halton, which is in band 1-the most deprived band-receive an increase in funding? It cannot be fair for somewhere in band 4 to get a better settlement than somewhere in band 1.

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Mr Pickles: The hon. Gentleman would be better to can the abuse and read the plain English guide to the settlement, which I commend to him because it demonstrates that what he just said is nonsense.

Charlie Elphicke (Dover) (Con): Does the Secretary of State share my sadness that such a tough local government settlement was necessitated because the previous Government shattered the public finances? Despite that, can he confirm that he has found £650 million to ensure that council tax is frozen next year in Dover and Deal and across England?

Mr Pickles: I am delighted to respond to my hon. Friend and to say that the council tax freeze will offer substantial protection to his constituents, who have worked hard and paid through the nose for council services over the years, seeing enormous increases under Labour. I am delighted that we can offer that additional money to freeze council tax.

Mr Dennis Skinner (Bolsover) (Lab): Is the Minister aware that Bolsover lost every single pit when the Tories were last in, and that every single textile factory was closed? It is in the bottom 50 of all constituencies in Britain in terms of deprivation, and there is something sinister in him deciding to cut Bolsover's grant by 20.3%. Why?

Mr Pickles: The hon. Gentleman is entirely wrong. Bolsover will receive the full protection of the 8.9% cap in terms of its total spending power. That is a substantial difference- [Interruption.] He chunters, but we have opted for a measure regarded as desirable by the Local Government Association and his Front-Bench team a week ago. He should not blame the method just because it has not delivered the kind of bloody stumps that Labour Members wanted.

Bob Blackman (Harrow East) (Con): Local authorities all over the country will welcome the £200 million set aside to transform back-office functions and cut bureaucracy, but they will be concerned about how they can access the money. Will my right hon. Friend confirm the £200-million figure and state how local authorities can access it, so that we can see those reductions in bureaucracy and the transformation of the system?

Mr Pickles: They will gain access in precisely the same way they have gained access this year and in previous years: they will bid for an amount. No authority has ever received 100% so the £200 million will be apportioned on a percentage basis. I look forward to receiving applications from authorities throughout the country.

Mr Denis MacShane (Rotherham) (Lab): The verdict on this policy will be delivered next May and in May 2012, and I fear that the Secretary of State has just written the Götterdämmerung of Conservative councillors over the next four or five years. In Rotherham, there are literally hundreds of voluntary organisations relying on just a small helping hand from local government of a few hundred or few thousand pounds-not big money. May I ask him to pay particular attention to that to ensure that the voluntary sector does not go under as a result of the settlement?

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Mr Pickles: Given that the reduction in spending for Rotherham is just 5%, it should be in a strong position to continue funding those groups. At a time when funding by Government grant is being reduced by 26%-14% in terms of total resource-it is beholden on local authorities not to salami-slice, but to restructure in order to achieve the advantages of back-office mergers. If Rotherham, which is a fine authority, does that, I am sure that those small grants will be protected.

Dr Sarah Wollaston (Totnes) (Con): Towns such as Dartmouth and Kingsbridge in my constituency are resisting the imposition of high and unwanted on-street parking charges by the county council that they see as a back-door form of revenue raising. Would my right hon. Friend encourage them to organise a local referendum?

Mr Pickles: It is always a bit of an inconvenience when the public make their position known-democracy is always a bit messy, but it is the best system we have. I cannot see any problem with local authorities facilitating such a referendum. The county council could also think about delegating that function to the local towns, so that they can organise these things. That is what happens in an awful lot of districts. My hon. Friend represents an attractive part of the world that many of us visit in slightly more clement times. However, car parking can be vital to a local economy so if she wants to start the referendum process, she has my full support.

Thomas Docherty (Dunfermline and West Fife) (Lab): Further to the question from the shadow Secretary of State, given that the Secretary of State has repeatedly referred to the Localism Bill, in the House and on the radio this morning, as a new constitutional settlement, will he confirm that all stages will be taken on the Floor of the House?

Mr Pickles: Madam Deputy Speaker, you have asked for brevity, so I am happy to say no. A longer answer is: not a chance.

Gavin Barwell (Croydon Central) (Con): May I warmly welcome my right hon. Friend's commitment to reforming the fundamentally flawed system that he has inherited? However, does he agree that in the interim, councils such as mine-which, unlike most local authorities, saw real-terms cuts under the previous Labour Government-will have a particularly hard time?

Mr Pickles: I do recognise that, and I apologise to my hon. Friend. I would not have wanted to start from this position; I would have wanted a fairer, more reasonable system. However, I recognise that when we start to move money around the country and change things round, we have to put in floors and ceilings. That would have been more disruptive to local government than what we are doing, which we are at least doing on the basis that we are all in this together and that we have managed to protect the most vulnerable authorities.

Tristram Hunt (Stoke-on-Trent Central) (Lab): I have in my hand a rather thin document entitled "The thinking that underpins the Localism Bill". It is full of big words such as "liberalism", "community politics" and "big society", some of which the Deputy Prime Minister thinks he understands, but is all this not just hot air
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unless we see a real end to rate capping, an offer of local tax-raising powers in communities and the return of the business rate, which the Tories removed?

Mr Pickles: Except for the abuse, it sounds as if the hon. Gentleman might be ready to defect across the Chamber-and we will, of course, be ready. I would hardly describe the bundle of documents that we have issued as insubstantial, and frankly, I would commend to him the plain English guide to the settlement. However, if the hon. Gentleman wants to make a representation to the Government about the reform of local government finance, he is most welcome to do so, because I will be absolutely frank: although he is no longer in his usual place, we are indebted to the right hon. Member for Greenwich and Woolwich (Mr Raynsford), on whose hard work we will be building, but who received scant thanks from the previous Government.

Jason McCartney (Colne Valley) (Con): My Colne Valley constituents, and in particular the Lingards community association, are excited about the Localism Bill, because it comes at a time when Labour-run Kirklees council is running a consultation costing tens of thousands of pounds-perhaps hundreds of thousands of pounds-in order to impose 28,000 new homes on our beautiful part of west Yorkshire. Will the Secretary of State join me in confirming that the Localism Bill will give powers to local people to decide where local houses will be built?

Madam Deputy Speaker (Dawn Primarolo): Order. We are not talking about the Localism Bill; we are talking about the settlement. As the hon. Gentleman did not ask about the settlement, we will move on.

Graham Jones (Hyndburn) (Lab): The Secretary of State said in his statement that there are "substantial incentives available for councils," and he mentioned the new homes bonus. May I ask him to ensure that demolitions will be netted off? I have 2,500 empty properties in my constituency, and if demolitions are included, there will be no new homes bonus for what is one of the most deprived constituencies. Another point that I want to touch on briefly-

Madam Deputy Speaker: Order. No, the hon. Gentleman will not raise another point. This has already gone on for a long time. I have been very patient, despite the fact that I have asked people for short questions and short answers.

Mr Pickles: We are talking about a regeneration fund, and we will indeed be offering part of the new homes bonus to get property that is empty after a period back into service.

Graham Jones indicated dissent .

Mr Pickles: The hon. Gentleman can shake his head, but we are responsible for the new homes bonus, so I tend to think that we probably know a little more about it than him, and he should be reasonably happy about that answer.

Emily Thornberry (Islington South and Finsbury) (Lab): Those responsible for providing adult social care who have heard the right hon. Gentleman predicting
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that the settlement will result in improved quality may think that he is telling a cruel joke. Is he confident that when ADASS-the Association of Directors of Adult Social Services-and the Local Government Association have studied the detail of the settlement, they will stop saying that there will be a shortfall in social care funding of billions of pounds?

Mr Pickles: I have to say that, not so long ago, I was at the Opposition Dispatch Box asking for this kind of money. We are talking about the only substantial increase in social care that this House has seen for a very long time. Frankly, mocking it is ridiculous. What the settlement will also do is increase co-operation and co-ordination between the health service and social services. That is something that we can all unite behind. There are many reasons-I suppose-to attack the settlement, but that is certainly not one of them.

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Cancun Climate Change Conference

5.29 pm

The Secretary of State for Energy and Climate Change (Chris Huhne): I wish to make a statement on the outcome of the United Nations climate conference in Cancun. The House will remember the disappointment of last year's conference in Copenhagen, particularly its failure to agree a comprehensive and legally binding global treaty to supplement or replace the Kyoto protocol. Expectations for the Cancun conference were not high. After Copenhagen, it seemed as if the very principle of multilateralism was on trial. Our objectives, therefore, were modest. We aimed to demonstrate that the UN process was back on track. We also hoped to put in place some of the building blocks for an eventual global agreement and to rebuild momentum.

I am delighted to say that our expectations were not just met, but exceeded. The conference agreed a series of linked decisions under both its tracks: the Kyoto protocol and the framework for reaching a new and more comprehensive agreement. Emissions reduction pledges made under the Copenhagen accord by developed and developing countries provided a valuable starting point and have been brought into the UN climate convention framework. We can now assess the overall policy pledges against the requirements of the science.

These decisions provide a solid foundation for further work. For the first time, there is an international commitment to

to hold the increase in global average temperature below 2° C. This includes processes for adopting targets for peaking emissions as soon as possible and substantially reducing them by 2050.

The conference also adopted decisions to develop systems for measuring, reporting and verifying emission reductions and actions in line with countries' commitments. This is essential to confidence in each other's actions. Developing countries will get access to low-carbon technology and help with adaptation to climate change. Market-based mechanisms will be considered to deliver effective reductions in emissions at least cost.

Forestry was a key area. The conference agreed the framework for REDD plus-reducing emissions from deforestation and forest degradation-through which developing countries will be paid for keeping trees standing rather than logging them. The conference also made progress on rules for accounting for land use, land use change and forestry under the Kyoto protocol-an issue that was too difficult to be settled last year or at Kyoto and it has remained problematic ever since Kyoto.

The conference also agreed the establishment of a green climate fund to support policies and activities in developing countries. The fund will be governed by a board with equal representation from developed and developing countries, and its finances will be managed in the first instance by the World Bank. A transitional committee will be established to design the institutions and operations of the fund, and we aim to see that make rapid progress. The conference also endorsed the commitment made by developed countries at Copenhagen to mobilise at least $100 billion a year by 2020 to address the needs of developing countries.

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The conference did not settle the future of the Kyoto protocol, nor did it adopt a new and more comprehensive treaty incorporating all countries. Neither outcome was realistically possible this year. Nevertheless, the agreements reached at Cancun represent a very significant step forward, particularly given that it seemed possible, even as late as last Thursday, that the conference would break up over precisely that issue. In the end, every country represented there, with the exception of Bolivia, felt able to support the outcomes.

There remains much to do in the run-up to the 2011 climate conference in Durban. Given the outcome of Cancun, however, we can be far more confident than seemed possible just a few weeks ago. I am sure that the House will join me in congratulating the Government of Mexico, who were responsible for hosting and chairing the conference. The diplomatic skill, political courage and dogged determination of Foreign Minister Patricia Espinosa and her team was responsible in very large part for its success. I was happy to be able to support her in co-chairing some of the negotiating groups that addressed the key issues.

I also wish to pay tribute to the British team of negotiators. Even though our delegation was one of the smallest of those of the G8 countries, its members played a key role in many of the detailed negotiating groups, often leading for the EU. The climate diplomacy carried out by the Foreign and Commonwealth Office in the year leading up to the conference clearly helped to lay the groundwork for a successful conclusion.

Tackling climate change should transcend party politics. Britain has built a strong reputation internationally as a forward-looking country, and I thank my predecessor for his work in helping to achieve that. I was also pleased to be able to include in the UK delegation representatives of the Scottish Parliament and the Welsh Assembly Government; it was the first time that that had happened.

The coalition Government are determined to tackle the accelerating threat of climate change. We intend to demonstrate how a successful and prosperous low-carbon economy can be developed in the United Kingdom and the European Union, providing employment, exports and energy security and reducing emissions. The Energy Bill published last week and the consultation paper on electricity reform to be published later this week are key components of that, as is the adoption of a more ambitious target for reducing EU carbon emissions, and in that context I welcome the Spanish Government's recent declaration of support for a 30% reduction in EU emissions by 2020. We are pressing for an ambitious package of measures to be agreed by EU leaders in February next year to create the infrastructure and incentives for a faster move to a low-carbon economy within Europe.

On the international front, we will build on the momentum achieved in Cancun. There is much still to be achieved, but we can now look forward with renewed optimism to the Durban conference next year. As the representative of one non-governmental organisation said,

That is true, but in saving the process it represents a triumph for the spirit of international co-operation in tackling an international threat, and I am sure that the whole House will join me in welcoming that.

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Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): I thank the Secretary of State for his statement, and for early sight of it.

International progress on climate change is of the utmost importance to us all. I am pleased that the Secretary of State has been able to attend the House in person today, so that we have a chance to question the Government on progress. We must acknowledge that the agreements made in Cancun are an important step in the right direction, and, on behalf of the Opposition, I join the right hon. Gentleman in congratulating the Mexican Government on creating an environment in which the nations of the world could agree a common statement. The statement of intent that has come out of Cancun builds on provisions made by my right hon. Friend the Member for Doncaster North (Edward Miliband) in Copenhagen last year, and we all hope that it will pave the way for more ambitious aims in South Africa next year.

We welcome the establishment of a climate fund to help developing nations and commitments to take action on deforestation. We also welcome the acknowledgement of the gap between the promised emission cuts and the cuts that the science tell us are necessary. Does the Secretary of State believe that holding to an increase of below 2º is enough, given that scientists now say that an increase of between 2º and 4º is more likely?

We have a long way to go, and, as the Secretary of State said, it is essential that the Government take a lead internationally. The right hon. Gentleman has already suggested that the European emission reduction target should be 30% by 2020, and he recently issued a statement with Germany and France pressing for such a reduction in carbon dioxide emissions. Last week, the Committee on Climate Change reported in support of that aim. We are delighted that Spain is now on board. Will the Secretary of State tell us whether that is the extent of European Union support? He talks of pressing for measures in the EU, but will he say what practical steps he and the Government are taking in Europe? It might be said that the Government whom he represents are not of one mind when it comes to European relations, and we and the country need to know which point of view dominates the agenda. Will there really be progress by February?

The Secretary of State was involved in discussions and conversations on Kyoto. Is he able to give the House a better sense of how those negotiations went, although they were not an outright success?

The climate fund to assist developing nations is a welcome step, but we need assurances that funds will be in place. I welcome the Secretary of State's aim to see rapid progress on the part of the transitional committee. Can he give us a timetable for that progress? We have agreements, but we need to make sure that actions are taken or else the agreements will not be a foundation for change. Will the Secretary of State also give us further details on how finance will be secured, because the developing countries need this life-saving finance and they and their citizens cannot wait?

Finally, we need to see leadership from Britain and Europe over the next 12 months, before countries meet again in South Africa. The Government must demonstrate leadership at home-here in the UK-and in Europe. We need the Government to commit to low-carbon growth and to show they can deliver before the opportunity
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has passed. Although we have had welcome announcements from the Government about implementing the green deal for householders, we do not know whether it will include a carbon reduction target. The right hon. Gentleman has also announced that he will go ahead with the green investment bank, but we do not know whether there will be enough money for it to do its job.

We lack detail, therefore, yet we hear from businesses of the need for certainty, and households in fuel poverty need support and certainty too. We need flesh on the bones, and we need action between now and the next conference in South Africa.

Chris Huhne: I thank the hon. Lady for her remarks, and I am delighted that there is, I think, a broad measure of political support from all three main parties in the House-and also from the nationalist parties, although none of their representatives are in the Chamber.

The hon. Lady was absolutely right to mention the continuing gap between what the science tells us is necessary to reduce carbon emissions and the pledges that were made in the Copenhagen accord and that are now incorporated in the United Nations framework convention on climate change process. The gap will be assessed as part of the work that will be set in train as a result of the agreements in Cancun, and the UN environment programme report was a useful first step in pointing that out.

I make no bones about the fact that we argued for, and would have liked, a clear commitment to a peaking of global emissions by 2020. The reality is that time is running out, and we need to be as precise as possible. We were not successful in achieving that clear and specific target, but we did have a clear commitment on peaking global emissions as early as possible and, obviously, we will move as quickly as we can towards achieving certainty.

Yes, it was welcome that Spain joined us. We have been working quite hard on the 30% commitment, including through some meetings in Cancun. The Minister with responsibility for climate change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), had meetings with the incoming presidency, and I had meetings with the Spanish Minister and other colleagues. Apart from Spain, France and Germany, we also now have a commitment from Denmark, and I am confident we will shortly have a commitment from Sweden as well, with all of them broadly in the same place. We must recognise that there are difficulties, especially for some of the economies still in transition, particularly Poland, which rely very much on lignite and hard coal, and we can try to deal with that. The process is under way and it will be important to address that in the new year.

The negotiations on legal form were always going to be exceptionally difficult, and we knew we could not reach an outcome. For the UK, the key negotiating strategy was to make sure that we embodied in the agreement at Cancun a substantial amount of substance that we can then show at Durban next year. Hopefully, that will provide a real incentive to the progressive countries that want to do a deal and to some of the more reluctant countries, by showing that there is enough on the table to make them be a little more flexible than they have been thus far on, for
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example, whether there is a commitment in the Kyoto protocol or whether it is in the convention track-and, indeed, whether there is a legal commitment in the convention track, which I very much hope, so that we can, effectively, have two parallel sides.

The hon. Lady asked about the finance. Fast-start finance is under way, and I am very pleased to be able to say that the Government have already disbursed the fast-start commitments we made for this financial year, and they have also been identified for the next financial year. Therefore, that money, which was agreed at Copenhagen, is being paid out. On the broader objective of $100 billion a year, we had an agreement to take note of the work that the advisory group on finance had done. That means that a lot of the work-for example, on bunker fuels and the potential for raising finance from aviation-can be taken into account and will go forward to Durban. I am cautiously optimistic that this advance will be crucial in getting the developing countries to sign up next year. This agreement, by the way, is the first time ever we have had an agreement by the developing countries to reduce their emissions compared with business as usual. That is quite a step forward, although it would obviously be nice to make it legally binding.

I can assure the hon. Lady that there is no division in the Government on leadership in Europe. I know she is sceptical, but we have worked very closely with all parts of Government, particularly the Foreign and Commonwealth Office, which has done an outstanding job. The team in Mexico City and the FCO more widely have done an outstanding job in helping us to prepare for these talks. It is an agreed part of our strategy as a Government that we recognise that our power as a nation to achieve our national objectives in the area of climate change is immeasurably greater the greater the extent to which we work through our European partners and manage to get them on board. That has been a key part of our approach to this issue.

Martin Horwood (Cheltenham) (LD): May I echo my right hon. Friend's words about Patricia Espinosa, the chair of the summit, and indeed echo her words to me in Cancun, which commended my right hon. Friend personally for the positive role that he played? May I ask him to elaborate a little further on the issue that he was asked to tackle by her, namely the risk that in 2012 we may still see the planet unprotected by any continuing international agreement?

Chris Huhne: We would obviously like, as my hon. Friend knows, to have a legally binding global agreement. That is our objective and I know that it is shared by those on both sides of the House. It is also shared by our European partners. We must not underestimate, however, the fact that although the convention track is not yet legally binding and does not have a commitment to a legal outcome-although a process was set up at Cancun whereby the convention track can discuss options for a legal outcome-the political commitment that it represents of incorporating the Copenhagen accord pledges within the UN framework and of having an agreement about the monitoring, reporting and verification of those pledges on the Kyoto side and international consultations, analysis and separate wording on the convention side is a significant step forward. We can
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have a lot of trust, and so can businesses, in the fact that that will underpin many of the investments that are being made.

Let me add one other point that gives me cautious optimism. Some of the countries that have been regarded as difficult and sceptical about making international commitments were much better as regards our objectives at Cancun. I hesitate to single out any one in particular, but it is striking that China is making commitments through its latest five-year plan that, were they incorporated into an international agreement, would reach a long way towards where we would like China to be. The Indian Government-in particular, I pay tribute to Minister Ramesh-played an outstanding role in ensuring that we could get a verification system that will stand the test of time.

This is a very significant agreement. We do not have a legally binding agreement yet. We would like that, but the political commitment and the substance of many of the decisions that have been taken are substantial.

Several hon. Members rose -

Madam Deputy Speaker (Dawn Primarolo): Order. I would be grateful if the Secretary of State gave slightly shorter answers from now on. We have other important business and I am trying to ensure that every Member gets to put their one brief question to him.

Barry Gardiner (Brent North) (Lab): I recognise and welcome the Secretary of State's and the Government's commitment in this area, but given that the $100 billion a year by 2020 was announced last year and the money did not come and given that the $30 billion a year fast-start funding was announced last year and did not come, why should any developing nation believe that Mexico will be different and not only that the money will come but that it will be new money that will be evenly balanced, as it was supposed to be, between mitigation and adaptation?

Chris Huhne: The fast-start finance is being paid. [ Interruption. ] No, actually, a very substantial amount is coming through. If one looks at our European partners and the Dutch Government's website, which lists all the commitments that have already been made, including those outside Europe where countries have been stepping up to the plate, one sees there is a substantial measure of commitment. Things are not perfect and we are not all the way there but there is real money going through, and that can underpin real action early on to help developing countries in their efforts.

On the $100 billion, there is much more flesh on the bones than there was a year ago. We have the report of the advisory group on climate change financing, which has done a lot of good technical work, and it has been taken note of here. We will make progress through the rest of the year.

Neil Carmichael (Stroud) (Con): Obviously, we all welcome the progress that was made at Cancun and it is extremely good news that we are talking about processes being re-established. How does the Secretary of State think that China and India could be encouraged to co-operate more fully with the targets on carbon dioxide reduction?

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Chris Huhne: I have already mentioned the very positive efforts that Minister Ramesh and the Indian Government have made, as well as the way in which China is incorporating real targets into its domestic legislation, including ensuring that more than a fifth of the Chinese population is covered by low-carbon pilot areas. China is now in a serious, leading position in a number of low-carbon technologies. It is the world's largest producer of solar photovoltaics and I have had expressions of interest from Chinese firms about investing in the UK in offshore wind manufacturing facilities. Frankly, there is an enormous and very impressive level of commitment within China to serious investment in low-carbon products. I believe that will come forward in terms of an international commitment for the simple reason that those businesses need certainty about the international framework in exactly the same way as our businesses do, so we will get that change-indeed, we are getting it-in the Chinese Government's position.

Joan Walley (Stoke-on-Trent North) (Lab): Given the importance of achieving some progress, however small, at Cancun, does the Secretary of State think that UN procedures are fit for purpose? In terms of the improvements that are needed, what role can Parliament take, given that the previous Government's Climate Change Act 2008 gives us an opportunity to take a leading role across the planet?

Chris Huhne: I am very grateful for the hon. Lady's question-I say that with some feeling-because she has hit the nail on the head. The agreements that we reached at Cancun were, in my view, reached despite the process and procedures rather than because of them. Frankly, I have never been involved in any international or national set of procedures with so little in the way of standing orders and rules of procedure designed to guide the participants towards a result. As a member of the National Union of Journalists, I think that any union chapel would despair at the lack of procedures and the lack of ability to push things through. Reform of the UN is above my pay grade, but having participated in this process I strongly hope we can move on and get to a better process, because this is a serious issue that needs it.

Andrew George (St Ives) (LD): I warmly congratulate my right hon. Friend. What proportion of the funds going into the green climate fund and of the $100 billion by 2020 in funding for developing countries will be sourced from existing budgets that are currently available to the Department for International Development?

Chris Huhne: I can answer for the UK Government, but not for others. Some £2.9 billion will be drawn from the UK's aid budget and that figure will rise to 0.7% of gross national income by 2013, so it will be additional to existing spending. We are also maintaining the previous Government's commitment that the £2.9 billion will continue to account for less than 10% of overseas development assistance in every year of the spending period.

Graham Stringer (Blackley and Broughton) (Lab): The Secretary of State has spoken very grandly about his aspirations and what he wants from the UN and for the globe. On a much more mundane level, if he gets all
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his aspirations on carbon targets and renewables, how much extra will my constituents have to pay in their energy bills in each of the next 10 years?

Chris Huhne: Every year, in the annual energy statement, we set out what the impact is on consumers. The last time we made that calculation, in the annual energy statement in the summer, we calculated that, assuming an oil price of $80 a barrel, which is rather less than the current price, the total increase in household bills, taking into account our other policy measures, including energy saving, would be 1%. The higher oil and gas prices are, the greater the savings. The break-even point comes at $100 a barrel, beyond which our consumers will gain from the move to a low-carbon economy and away from the fossil-fuel economy.

Duncan Hames (Chippenham) (LD): I congratulate my right hon. Friend on seeing the negotiations through to the very end last week; it was certainly worth it. Now that the green climate fund has been agreed, how does he intend to broker international consensus on which of the options for climate finance may be taken forward to fill it?

Chris Huhne: This is going to be a pretty difficult issue-we know that from the proceedings in the advisory group on climate change financing. There are a lot of options on the table, the technical work has largely been done and we have to hope that we can make further progress over the next year. Now that we have identified a clear political will to find that finance, we have to hope that the technical means to provide it will be there, but the technical options on bunker fuels, aviation and so on are set out in the group's report.

Mr William Bain (Glasgow North East) (Lab): I particularly welcome the progress on the REDD agreement that the Secretary of State has announced, especially given that deforestation accounts for up to a fifth of all annual global CO2 emissions. Will he be in a position, by the Durban summit, to update the House on the sources of funding for the programme, particularly on the contribution that will be made by businesses and Governments in the UK and the EU?

Chris Huhne: I hope that we can update the hon. Gentleman even before then because there was a
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commitment in Cancun to use fast-start finance to get this going. Sadly, I can answer only for the UK Government and not for the 192 or so other Governments who were represented at Cancun. However, I very much hope, and will keep my fingers crossed, that we will make even more progress on this.

Joan Ruddock (Lewisham, Deptford) (Lab): I congratulate the Secretary of State on the role that he and his team played at Cancun and on continuing the Labour party's policies in that respect. Does he agree that individual European countries could afford to take a second Kyoto commitment period and that the EU could raise its emissions reduction target to 30% at very little extra cost given that, in the light of the recession, emissions have dropped?

Chris Huhne: I entirely agree with the right hon. Lady and I have repeatedly made exactly that point to my European Union colleagues. That argument is making real progress-for example, Spain is the latest country to commit to the 30% target-so we are gradually getting there, but there are problems for some member states. Rome was not built in a day, and neither was the European Union.

Bill Presented

Localism Bill

Presentation and First Reading (Standing Order No. 57)

Mr Secretary Pickles presented a Bill to make provision about the functions and procedures of local and certain other authorities; to make provision about the functions of the Local Commission for Administration in England; to enable the recovery of financial sanctions imposed by the Court of Justice of the European Union on the United Kingdom from local and public authorities; to make provision about local government finance; to make provision about town and country planning, the Community Infrastructure Levy and the authorisation of nationally significant infrastructure projects; to make provision about social and other housing; to make provision about regeneration in London; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 126) with explanatory notes (Bill 126-EN)

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Police Reform and Social Responsibility Bill

Second Reading.

Madam Deputy Speaker (Dawn Primarolo): Before I call the Home Secretary, I inform the House that Mr Speaker has selected the amendment in the name of the Leader of the Opposition.

5.59 pm

The Secretary of State for the Home Department (Mrs Theresa May): I beg to move, That the Bill be now read a Second time.

From the very start of British policing, Sir Robert Peel's key principle that the

has set the standard across the world.

I am sure the whole House will join me in praising the bravery, courage and professionalism of our police officers and staff, who do their dangerous job usually unarmed. As we saw again last week, police officers up and down the country put their lives on the line every day. Neighbourhood police officers and police community support officers deal with antisocial behaviour, catch and deter criminals and reassure the public. The Government appreciate and value all their efforts.

But it is a sad fact that despite these efforts, crime is still too high, too many communities still live in fear, and too many people still do not believe, rightly or wrongly, that the criminal justice system is on their side. Our reforms to policing will make the service even better at fighting crime, more responsive to the needs of their local communities and much more efficient.

We will not just talk about being tough on crime and its causes. Instead, we will free police officers up to be tough on crime by slashing the bureaucracy and targets that have kept them from the streets, and by giving them back the discretion to do what they believe is right. We will shift power directly into the hands of the public as they elect police and crime commissioners to lead the fight against crime and disorder in their areas.

At national and international level, we will support the police in dealing with crime that crosses police force and international borders, so we will use subsequent legislation to introduce a powerful new operational body, the national crime agency, to take the fight against serious and organised crime to the next level and to enhance the security of our borders.

Britain remains a high crime country. In England and Wales alone, the police are recording more than 1,000 incidents of grievous bodily harm or actual bodily harm every day and more than 4 million total crimes a year. That is unacceptable. We have one of the most expensive criminal justice systems in the world, but only half the public trust that it will protect them from criminals. We are now faced with the added challenge of cutting crime at the same time as we deal with the record budget deficit.

To those who say that we should slow the pace of reform because of the need to make budget cuts, I say that the economic situation makes reform more important, not less. We need to do more to cut crime, reduce bureaucracy, increase accountability and drive value for money precisely because we are reducing budgets.

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The current policing governance arrangements are simply not working. Police authorities have become remote from the public-only 7% of people have even heard of them, and only 8% of local authority wards in England and Wales are represented on their police authority. They are not effective at doing what they are supposed to do. Fewer than one in three police authorities inspected last year were found to be performing well overall, and fewer than one in five performed well in setting strategic direction and value for money, despite the fact that these are their two main functions. They have neither the democratic mandate to set police priorities, nor the capability to scrutinise police performance.

We need a new approach, one that takes power from the bureaucrats and puts it back in the hands of the people and the professionals. So the deal for the police is greater public accountability through police and crime commissioners and, in exchange, more freedom to do their jobs, less Government interference and much less bureaucracy. We have already begun slashing Labour's bureaucracy. By scrapping the stop-and-account form and cutting the items recorded during a stop and search, we will save 800,000 hours of police time every year, and that is just the start.

Keith Vaz (Leicester East) (Lab): Will the right hon. Lady join me in commending the work of Jan Berry, who was appointed by the previous Government but completed her report under the present Government, and her recommendations to reduce police bureaucracy? Will the right hon. Lady give the House an undertaking that that work will continue, and that Jan Berry or someone like her will continue to monitor the reduction in the bureaucracy that is hampering the police in doing their job?

Mrs May: I am happy to take up the point made by the right hon. Gentleman. Jan Berry did a very good job in looking at police bureaucracy. Obviously, she had considerable experience which enabled her to do that. I can reassure the right hon. Gentleman that the work will continue. We are already taking forward further work in a number of ways to examine the bureaucracy surrounding policing so that we can take further steps to reduce the amount of bureaucracy that the police have to deal with.

With a strong democratic mandate from the ballot box, police and crime commissioners will hold their chief constable to account for cutting crime. They will have the power to appoint and dismiss chief constables if they do not believe they are performing effectively. If the public do not believe that their police and crime commissioner is performing effectively, the commissioner will face the ultimate sanction of rejection at that same ballot box. Importantly, police and crime commissioners will set the annual budget for their force and will determine the local precept-the local contribution to policing costs.

Police authorities are not properly accountable for how public money is used, so they do not drive value for money in their forces. The democratic mandate of police and crime commissioners will put them in a much stronger position to drive the efficiencies and value for money needed to ensure that resources are focused on the front line.

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Alun Michael (Cardiff South and Penarth) (Lab/Co-op): The right hon. Lady mentions a number of functions and areas of accountability. Does she agree that whoever is responsible for the police must ultimately be judged by success in reducing crime, which is the single most important objective that the police have to deliver?

Mrs May: I am very pleased to hear the right hon. Gentleman echoing the very words that I have used to the Association of Chief Police Officers conference and other conferences when I have been speaking about the key aim of the police, which is indeed to cut crime.

Chris Bryant (Rhondda) (Lab): I shall not echo what the Home Secretary has been saying. One of my big anxieties is that she talks about accountability in relation to the commissioners, but each of the forces in our land is a rather curious geographical unit. For instance, in the South Wales police, the demands of Swansea and of Cardiff will be completely and utterly different from the demands of valleys communities such as those in the Rhondda. It will be extremely hard for one person to reflect that better than a body of people who come together from the different communities.

Mrs May: If the hon. Gentleman will bear with me, I will shortly deal with part of the point that he makes.

Earlier today, we announced police force funding allocations. These ensure equal treatment across all forces, as each force will receive the same percentage reduction to its core Government funding. At the same time, we are giving the police service greater freedom than ever before over how to use its resources. With this new budgetary freedom, police and crime commissioners will be able to make real decisions about funding local priorities.

Concerns have been expressed about placing this degree of power in the hands of one person. The hon. Member for Rhondda (Chris Bryant) made the point about an individual representing, in some cases, a large area with competing and different requirements within it. The Bill will ensure that there are appropriate checks and balances on those powers.

At the core of our proposals is the establishment of new police and crime panels. These will ensure that there is a robust support and challenge role at force level, and that the decisions of the police and crime commissioners are tested on behalf of the public on a regular basis.

Hazel Blears (Salford and Eccles) (Lab): I share the concerns of my hon. Friend the Member for Rhondda (Chris Bryant) about the ability of a single individual to be visible and accountable in an area such as Greater Manchester, with 2.5 million people. Is it not the case that the police and crime panels which the right hon. Lady proposes are remarkably similar to the police authorities, which have been criticised time and again for lack of visibility and lack of accountability?

Mrs May: No. I shall come on to describe some of the powers of the police and crime panels. That democratically elected individual is essential, restores a link between the police and the public, and makes sure that at those elections the public are able to have their say about what their police and crime commissioner is
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doing in terms of the responsibilities of the police. To those who raise the issue of representation of the full area, which is the point made by the hon. Member for Rhondda, I repeat the figure that I gave earlier in my speech: only 8% of local authority wards are currently represented on the police authorities, so the police authorities are not providing representation on the same basis as some of those who call for their continuation would argue.

Hazel Blears rose -

Mrs May: I see that the right hon. Lady is eager to jump up again. I will take this intervention, then I will make progress.

Hazel Blears: I am very grateful to the Home Secretary, because those issues have obviously tested many Home Secretaries over the past few years. Has the right hon. Lady given any consideration to electing those local representatives, who would then be visible, accountable and have a local mandate?

Mrs May: Yes. Indeed, the right hon. Lady's own Government looked at the possibility of electing police authorities and rejected it, but we are sure about what we are doing through the police and crime commissioners and the police and crime panels. The panels will comprise locally elected councillors and some independent and lay members, who will be able to veto a commissioner's proposed precept by a three-quarters majority and veto any candidate a commissioner proposes for chief constable by the same majority. The public will also be given opportunities to scrutinise the performance of their police and crime commissioners directly, through enhanced local crime information, including street-level crime maps.

Charlie Elphicke (Dover) (Con): On accountability, is it not the case that London has an elected Mayor, covering 6 million people? That person is highly visible, highly accountable and, even, highly popular. There are executive mayors throughout the country, including in Lewisham and in east London, who are highly visible and accountable, too, so surely the argument about accountability is a bogus one.

Mrs May: I am very grateful to my hon. Friend, who is exactly right: this is not an untried method of dealing with police accountability. The Mayor of London is indeed the equivalent of a police and crime commissioner. Earlier, from a sedentary position, the hon. Member for Vale of Clwyd (Chris Ruane) said that the Mayor of London was "too visible", but politicians should be out there, visible and able to take on-

Chris Ruane (Vale of Clwyd) (Lab): He's too blond!

Mrs May: I am not going to be tempted down the route of saying that he is too blond. [ Interruption. ] You can never be too blond.

Mr David Hanson (Delyn) (Lab) rose -

Mrs May: I want to make some progress, but I see that a former Policing Minister wishes to intervene, so I will take his intervention.

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Mr Hanson: Will the Home Secretary clarify one point? Under current legislation, it is illegal for a police officer to be a member of the British National party or of other extremist groups, but will she clarify whether these elected individuals, at local council level or at commissioner level, will be able to be members of such political parties? Will that be compatible with managing police officers, who cannot?

Mrs May: I am about to come on to exactly that point. The right hon. Gentleman asks whether it is appropriate for such individuals to belong to a political party of which a police officer cannot be a member, but one could argue that the same position already exists: Home Secretaries are elected under political banners. I actually trust the people of this country on elections.

I shall return to that point, because police and crime commissioners will give the public a real voice in policing. They will ensure that what the public cares about is taken seriously, and that local people's priorities are the priorities of the police. I thank ACPO for its constructive engagement in the reform process, and the Association of Police Authorities will have an important role to play until police and crime commissioners are introduced. We will continue working with the APA until that point. We have consulted widely with the public and with key partners, such as the APA and ACPO, through the consultation document "Policing in the 21st century: reconnecting police and the people", which was published earlier this year, and in other consultation with them. We have listened to their views and amended our proposals accordingly.

Ed Balls (Morley and Outwood) (Lab/Co-op): On consultation with the Association of Police Authorities, there is a letter in The Guardian today- [ Interruption. ] It is signed by the Conservative, Liberal Democrat and Labour leaders on the APA, and it says:

police and crime commissioners-

Why has the Home Secretary failed to persuade Conservatives on the APA that her proposals are good proposals?

Mrs May: Comments about turkeys and Christmas might be appropriate at this point, and I suggest that the right hon. Gentleman think about that.

Ed Balls: Is the right hon. Lady really calling Mr Rob Garnham, the highly respected chair of a police authority, a turkey? Should she not withdraw that remark?

Mrs May: The right hon. Gentleman- [ Interruption. ] His hon. Friend the Member for Vale of Clwyd can even do the turkey noises for him.

Let me explain my earlier comment. It is very straightforward. We have had discussions with the APA about the future of police and crime commissioners, and it is no surprise that police authority members are not as convinced as we are about setting up PCCs, because when they are set up police authorities will be abolished. That was my point, but I am sure that the right hon. Gentleman will give us the benefit of his views.

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Ed Balls: Turkeys voting for Christmas? May I quote Sir Hugh Orde, of the Association of Chief Police Officers, who said:

Is the Home Secretary calling the head of ACPO a turkey as well?

Mrs May: No, I am not. Had the right hon. Gentleman been listening, he would have heard me say already how grateful we are for our constructive engagement with ACPO. We have listened to its comments on the introduction of police and crime commissioners and amended our proposals accordingly.

To return to the point about democracy, first, I see no reason not to trust the British public. We trust the public and we trust democracy, so I see no reason to constrain democracy by vetting or by excluding candidates we might think are extremist. The British public have shown over the years that they are perfectly capable of stopping extremists where they should be stopped-at the ballot box.

Secondly, although the whole point of our reforms is to improve the local accountability of the police, that in no way means that cross-boundary challenges such as organised crime, terrorism or other national policing issues will be neglected. Police and crime commissioners will be supported by a new strategic policing requirement to help them to hold their force to account for all its policing, and they will have a duty to collaborate with other police forces and other agencies, including the new national crime agency, on issues that cut across force boundaries. I am clear that the structures that we are putting in place must address national policing issues as well as local ones. Commissioners will also be required to work with other forces to simplify the arrangements for procurement and back-office functions in order to improve efficiency and achieve better value for money.

Thirdly, let me reassure the House that the introduction of police and crime commissioners will in no way affect the operational independence of the police. Commissioners will not manage police forces.

Mark Tami (Alyn and Deeside) (Lab): Will the right hon. Lady give way?

Mrs May: No, I am going to make some progress.

Commissioners will not manage police forces, and they will not be permitted to interfere in the day-to-day work of police officers. The Bill sets out for chief constables and for police and crime commissioners clearly defined roles that, in the words of the director of the Institute for Public Policy Research, are

I should also like to point out for the benefit of Opposition Front Benchers that we have included provisions to prevent police and crime commissioners appointing political advisers from public funds. All appointments will need to be made on merit, and all posts must be politically neutral.

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Vernon Coaker (Gedling) (Lab): Will the Home Secretary clarify that point? My right hon. Friend the Member for Morley and Outwood (Ed Balls) quite rightly raised the issue of political advisers for police and crime commissioners, but the Policing and Criminal Justice Minister says that the posts will be politically restricted. Although "politically restricted" means not being active politically, it does not mean that these political advisers cannot be a member of a political party. Will the Home Secretary therefore confirm that political advisers to police and crime commissioners can be members of a political party?

Mrs May: Our intention is absolutely clear: the police and crime commissioners will not be able to appoint from public funds political appointees who are political advisers. We do not think that that is appropriate for them, and that is absolutely clear in what we are doing.

Vernon Coaker: I apologise to the Home Secretary for intervening again, but this is an extremely important point. When the Minister for Policing and Criminal Justice explained the meaning of the term "politically restricted," he said:

It is not correct to say that someone cannot be a member of a political party when they are in a politically restricted post. Will the Home Secretary confirm that?

Mrs May: I am happy to confirm-this is at the heart of the matter, and I know that Opposition Front Benchers have been trying make something of the issue-that we are very clear that police and crime commissioners should not be able to appoint political advisers from public funds. I do not believe that that would be right. That is the intention behind what we are doing and this Bill.

Ed Balls: It is very important to be clear when we make statements in the House. It is not the case that Opposition Front Benchers have been trying to make something of the issue. At a meeting of the APA, the Policing and Criminal Justice Minister said that the first decision he would make if he were elected a police and crime commissioner would be to appoint a political adviser. Did he say that? Can the Home Secretary confirm that? If he did say it, can she tell him he was wrong to say it and that it is not in fact true?

Mrs May: I have just checked with my right hon. Friend and he is absolutely clear that he did not say that. I say to the right hon. Gentleman, who seems to think that the issue has suddenly arisen in the last minute, that the document that summarises the consultation responses to "Policing in the 21(st) century" states clearly on page 13, at paragraph 2.12:

[ Interruption. ] Hon. Members should wait. It goes on to state:

Our intention is absolutely clear.

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The running costs and day-to-day expenditure of police and crime commissioners will not be any greater than that of police authorities.

Mark Tami: Will the Home Secretary give way?

Mrs May: I am going to make some progress; I have been very generous in giving way to Opposition Front Benchers.

The running costs and day-to-day expenditure of police and crime commissioners' will be less than 1% of the total costs of policing. What will be different is the value that the public get for that money. Police and crime commissioners will need to demonstrate value for money to local people or they will simply not be re-elected. The only additional cost of police and crime commissioners will be the costs involved in running the elections because, as we know, democracy costs money. That cost will be £50 million over four years, compared with the £50 billion that will be spent on policing in the same period.

Chris Bryant: Will the Home Secretary give way?

Mrs Madeleine Moon (Bridgend) (Lab) rose-

Mrs May: No, I shall make some progress. Let me make this point clear: the money will not come from funds that would otherwise have gone to policing. In the spending review, the Treasury provided funds specifically for these elections because it knows, as I do, that this money will help to cut crime. In contrast, I ask hon. Members to remember that we currently spend £120 million of public money every day on paying the interest alone on the debt that the previous Labour Government racked up.

Our proposals to introduce police and crime commissioners will reconnect the police with the public they serve, and will ensure that the police focus on what local people want, not on what national politicians think they want. Our proposals will help to cut crime and will deliver the efficient, effective and responsive police service that we all want.

As well as giving power back to communities in terms of policing, the Bill will give power over licensing decisions back to local communities. Five years ago, when Labour introduced 24-hour drinking, they promised us a European-style café culture. I was the shadow Secretary of State for Culture, Media and Sport at the time, and I told the House that Labour was being reckless in pressing ahead with longer licensing hours without first dealing with the problems of binge-drinking. Sadly, Labour's Licensing Act 2003 has proved to be the disaster that many predicted. The police continue to fight a battle against alcohol-fuelled crime and disorder, and the taxpayer continues to pick up the bill of more than £8 billion per year. Last year, there were more than 1 million alcohol-related hospital admissions. That cannot go on.

Over the summer, we consulted on plans to overhaul the Licensing Act to give local communities greater power to tackle the problems associated with alcohol. We received more than 1,000 responses, which we have taken into account. The Bill will give all those affected by licensed premises the chance to have a say in the licensing process. It will allow early morning restriction orders to be extended to between midnight and 6 am
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and it will give licensing authorities the power to take swift action to tackle problem premises by refusing licence applications or applying for a licence review, without having to wait for a relevant representation from a responsible authority. The Bill will also lower the evidential hurdle for licensing authorities, so that it is easier for them to refuse or revoke licences from irresponsible retailers. In addition, the Bill will double the maximum fine for under-age sales to £20,000.

Keith Vaz: I warmly welcome what the Home Secretary has said today, which is in keeping with the recommendations of the Home Affairs Select Committee in the previous Parliament. Why did the Government not go that one step further and enshrine minimum pricing in legislation?

Mrs May: May I pay tribute to the Home Affairs Committee's work on the issue? I shall finish talking about what is in the Bill and will then comment on the issue raised by the right hon. Gentleman, which is not covered in the Bill.

We shall allow local councils to charge a late-night levy on licensed premises that open after midnight to help to pay for late-night policing and other services, such as taxi marshals or street wardens. On the issue raised by the right hon. Gentleman, which is not included in the Bill, the Government remain committed to banning the below-cost sale of alcohol and we will bring forward proposals on that shortly.

Right hon. and hon. Members will not need me to tell them of the growing concern about the availability, use and potential harm of so-called legal highs. We supported the previous Government in the action they took to ban mephedrone, and we have taken legislative action against a similar but even more potent drug: naphyrone. The existing arrangements for bringing a drug under control using the Misuse of Drugs Act 1971 remains our preferred approach. However, it simply takes too long to respond effectively to these new and fast-evolving substances. In the meantime, their availability in the UK goes unchecked and we run the risk that they will gain a foothold-as mephedrone did-and that they will cause damage on our streets and harm to our young people. The power in the Bill to make year-long temporary class drug orders-temporary banning orders-will strike the right balance between swift action and expert advice. The offences in the Bill are rightly targeted at suppliers and traffickers, and carry significant penalties.

On a different issue, I am sure that right hon. and hon. Members from all parties would agree that for too long the historic Parliament square has been subjected to unacceptable levels of disruption and abuse caused by long-term encampments occupying the site. The actions of a small minority have also prevented others from enjoying an important public space. The Serious Organised Crime and Police Act 2005 tried to deal with the disruption on the square by targeting protest as a whole, but it went too far and missed the point. The continuing occupation of the square and last week's violence, on which I updated the House earlier, have shown that those measures have not worked. The Bill will restore the right to peaceful protest around Parliament by repealing the relevant sections of the 2005 Act.

Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab): I confess that I was responsible for
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the original clause in what became the 2005 Act. I would like to apologise for that, because we did not quite get it right. However, it is not the drafting of the legislation that matters but whether people are prepared to implement it. The Home Secretary will certainly have my support if she can manage to get the police and the local authority to work together to do something, rather than simply talking about it.

Mrs May: I am grateful for the right hon. Gentleman's point. I think it is fair to say that the whole of Parliament thought that previous attempts to deal with the matter had succeeded and that people were disappointed when we discovered that that was not the case. I can confirm that the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), who deals with crime prevention, has been working very closely on the matter with the Metropolitan police, the Greater London authority, Westminster city council and, indeed, with the House authorities where relevant. Those parties are willing to work together to ensure that we keep Parliament square clear of encampments. The Bill does not deal with the problem of permanent encampments by restricting protests across the board; it bans the use of tents, other equipment and the unauthorised use of loudhailers in Parliament square.

Michael Ellis (Northampton North) (Con): The Bill must go through the relevant parliamentary procedures and will probably not receive Royal Assent until the end of July. Is my right hon. Friend conscious of the fact that the royal wedding is in April and that there will be pressure to remove the encampment before that auspicious occasion?

Mrs May: I am grateful to my hon. Friend for raising that issue. The Prime Minister made it clear at Prime Minister's questions, and I have made it clear separately, that we need to ensure that we can clear Parliament square for the royal wedding on 29 April.

The Bill addresses another important area of law that is not currently working-the whole issue of how we apply universal jurisdiction, which is a key principle of international justice that enables some of the gravest offences to be prosecuted here, regardless of the state in which the offences were committed.

Mr David Winnick (Walsall North) (Lab): Does the Home Secretary accept that there are already adequate safeguards in this respect? It is not a question of someone simply going to the magistrates court alleging that a war criminal is on British soil. There is a feeling-she obviously does not share it-that this law is being changed as a result of the pressure that Israel put on the previous Government and is clearly putting on this Government. It does seem unfortunate that we are going to change the law because a foreign country has put such pressure on us.

Mrs May: We are not changing the law because a foreign country has put pressure on us. In relation to this law, the evidential requirement that is needed in order for somebody to go and get an arrest warrant is significantly less than that required for a successful prosecution. We are saying that the Director of Public
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Prosecutions should be able to look at any such application that is made and give consent to it or otherwise.

Charlie Elphicke: The measures on universal jurisdiction are one of the more important aspects of the Bill, because what we have seen before has made Britain a laughing stock as a place of fishing and trawling for international justice in matters that are better dealt with elsewhere.

Mrs May: I thank my hon. Friend for making that point. It is certainly clear that the current process for applying for an arrest warrant has deterred some public figures from overseas from coming to the UK. The Bill will make the process fairer and safer by requiring the consent of the Director of Public Prosecutions before a warrant can be issued.

Ann Clwyd (Cynon Valley) (Lab) rose -

Richard Burden (Birmingham, Northfield) (Lab) rose -

Mr Andy Slaughter (Hammersmith) (Lab) rose -

Mr Andrew Love (Edmonton) (Lab/Co-op) rose -

Mrs May: I am about to come to the end of my speech, but I will give way to the right hon. Member for Cynon Valley (Ann Clwyd).

Ann Clwyd: I am grateful to the Home Secretary. May I ask her what test the DPP will be expected to apply before an arrest warrant is granted under this new proposal that the district judge currently does not apply? What is the difference between them?

Mrs May: The key issue that the DPP will look at is the basis for the request for the arrest warrant and the extent to which there is a genuine basis for bringing it forward. He will look at the prospects for a successful prosecution and balance that issue in the view that he takes. At the moment, the threshold requirement is significantly less than would normally be required in bringing a successful prosecution.

Mr Slaughter rose -

Mrs May: I will not take any more interventions because I am about to finish my speech. I am sure that the hon. Gentleman will be able to make a contribution later in the debate. I am very conscious that lots of Back Benchers wish to get in.

Mr Slaughter: Just to clarify this point?

Mrs May: As I said, I am about to finish my speech.

The Bill is focused on cutting crime and putting power back where it belongs-in the hands of local people. Directly elected and directly accountable police and crime commissioners will bring reform to the police, ensuring that they cut crime, focus on local priorities and drive up performance. The problems of 24-hour drinking will be tackled by giving our communities greater powers over licensing decisions, and the emerging problems of legal highs will be dealt with through temporary banning orders.

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At the international level, our relationships with our overseas partners will be strengthened by the introduction of the key safeguard in the application process for universal jurisdiction arrest warrants. At home, our democracy will be strengthened by the restoration of the right to peaceful protest outside Parliament, at the same time as we take targeted action to deal with the long-term encampments and loudhailers which cause so much disruption and distress.

This Bill is necessary, it is proportionate, and it is right. I commend it to the House.

6.34 pm

Ed Balls (Morley and Outwood) (Lab/Co-op): I beg to move,

Protecting the public and giving people confidence that they can live free from the fear of crime and antisocial behaviour is the first duty of Government. On the front line in the fight against crime are our police and police community support officers, who do a difficult, sometimes dangerous job with great professionalism. We should start by congratulating our police, who, in record numbers, under Conservative and Labour Governments since 1994, have delivered a 50% fall in crime. We congratulate them on that achievement. We will support the Government, where we can, to ensure that our police have the resources and the powers that they need to do the job.

It is right, too, as the Home Secretary said, that the police must be close to the local communities they serve and be responsive to the views of local communities in order to be accountable to the taxpayer. I pay tribute to the reforms made in recent years by Labour Home Secretaries who have introduced neighbourhood policing, which has ensured that the police are embedded in our communities. That is an achievement of which Labour Members can be very proud.

However, we will argue in Committee that there is more that we can do to deepen that accountability at the force level and at the neighbourhood level to ensure that the police are properly and fully responsive to local communities. I have to say to the Home Secretary that the approach to police accountability that the coalition is pursuing in the Bill is absolutely not the answer to that challenge. Indeed, the judgment of the Association of Police Authorities, which said that elected police commissioners are the wrong reform at the wrong time, is looking more prescient by the day.

Andrew Bridgen (North West Leicestershire) (Con): Will the right hon. Gentleman cast his mind back to the cuckoo months of the previous Prime Minister's Administration, when the then Home Secretary, the former Member for Redditch, considered the idea of
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elected chiefs of police and then discarded it, not because of politicisation or fears about cost, but because of lobbying from Labour councillors who did not want to lose their lucrative positions on police authorities?

Ed Balls: I merely draw the hon. Gentleman's attention to the excellent House of Commons research report on the Bill, which makes it absolutely clear, in terms, that the then Home Secretary rejected that proposal because it would lead to the politicisation of our police, which is exactly why we are opposing these measures.

Look at the storm that is now gathering around the Home Secretary. Over the past few days, we have seen the events in Sweden- [ Interruption. ] Hon. Gentlemen mock the events that are happening. We are seeing a rising terrorist threat. We saw the events of last Thursday and the statement that we had to have this afternoon about disorder on our streets. We have the Olympics coming up the year after next, with the Home Secretary now proposing to force through a 20% cut in the Olympic policing budget.

Mrs May: The right hon. Gentleman raised the Olympic security budget in his response to my statement earlier. I refer him, yet again, to today's written ministerial statement on police funding allocations, which says that we have protected the £600 million expenditure on Olympic security. In fact, we think that what is needed can be done more cheaply than that, but we are protecting the £600 million. Will he now withdraw his accusations?

Ed Balls: I will do no such thing, and I will tell the House exactly why. We are consistently told by the Home Secretary that she has protected the counter-terrorism budget. What she means by "protected" is that it is cut by only 10%, unlike the police budget, which is cut by 20%. That is what the protection is all about.

Steve McCabe (Birmingham, Selly Oak) (Lab): I note that the policing Minister's letter says that he hopes to make savings and not to use the £600 million. Today's Birmingham Mail points out that despite an earlier promise that the Pope's visit would be subject to a special grant for security, that grant was never provided, and west midlands police have virtually exhausted their contingency for special events. If that happens around the country, how can the Government possibly hope to make savings on the Olympics?

Ed Balls: I do not know the answer to that. When I spoke to my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell), the shadow Olympics Minister, about it this afternoon, she said that she was assured that any reduction in the £600 million budget would be briefed on in advance with the details of the savings, but she has had no such briefing. It looks to me as though the commitment to keep £600 million in principle was rushed in at the weekend.

The reality of the position is that the Home Secretary is seeking to achieve a 20% cut which will further stretch policing around our country at a time when the largest cut in our police budgets in peacetime history over the past 100 years has just been announced. In the west midlands and Greater Manchester, 2,500 officers are already set to lose their jobs, not to be appointed, or to be removed through regulation A19 powers, with
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equivalent numbers among PCSOs and other public staff. Other forces around the country will be considering today's announcement of 20% real-terms cuts. The health budget was broadly flat, although falling slightly; the schools budget was broadly flat, although falling slightly; and the defence budget was cut by 8%. People around the country are asking where the Home Secretary was and how come the police budget was cut by 20%.

Mark Tami: My right hon. Friend is talking about massive cuts across the piece. Does he agree that the £50 million that the Government are prepared to spend on electing police commissioners could be put towards front-line officers?

Ed Balls: As my hon. Friend knows, the Association of Police Authorities estimates that 600 officers' jobs could be saved with the money that will be spent on the unnecessary election of police commissioners. We hear nothing from the Liberal Democrats, who all stood on a manifesto commitment of 3,000 more police officers, not 20,000 officers being cut.

Mark Tami: I am reliably informed that I was wrong. The figure is not £50 million, but £136 million, despite what the Home Secretary said.

Ed Balls: I am happy to accept my hon. Friend's clarification on that point.

The context for this legislation includes the largest cuts to policing that we have seen, police officers losing their jobs through A19 powers and a freeze on recruitment across the country, at a time when the security threat is rising. The Home Secretary and the business managers have chosen the day on which the cuts have been announced to ask for support for the risky experiment in police accountability that is elected police commissioners. The coalition has no mandate and no evidence base for that reform. It has not done a proper consultation and it has failed to win the active support of either the police or the public.

Matthew Hancock (West Suffolk) (Con): Before the election, when the then Home Secretary was asked whether he could promise that police numbers would not be cut under Labour, he replied "No." Is not that and this nonsense about the Olympics budget why nobody is listening to the right hon. Gentleman as shadow Home Secretary?

Ed Balls: No. I know that the hon. Gentleman knows about Treasury matters, but he ought to read his brief a little more carefully before making such interventions, which reveal his lack of knowledge on our position.

Matthew Hancock rose-

Ed Balls: I will answer the hon. Gentleman's previous erroneous intervention before I give him a second go to see whether he can do better. Her Majesty's inspectorate of constabulary, an independent body, said that it was possible to make reductions of 12% in the central Government grant over four years, without cutting front-line policing, as we heard last week. The Government are pushing through savings not of 12% but of 20%, and they are doing so not over four years but by front-loading them, so that the biggest cuts are in the first two years.
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As police authorities say, it is impossible to make such cuts without cutting front-line policing capability. If what we proposed was being done, cuts to front-line police numbers-indeed, cuts to all police numbers-would be avoided. Under the coalition, there will be cuts to front-line policing. No Government Members were elected on such a manifesto, and they will be held to account in the coming months and years. I happily give way to the hon. Gentleman so that he can have a second go.

Matthew Hancock: I do not mind being held to account for sorting out the nation's finances. The right hon. Gentleman should answer the question. He said that my intervention was erroneous. When the previous Home Secretary was asked whether he could guarantee to protect police budgets from being cut, did he not say, "No"?

Ed Balls: The hon. Gentleman knows the answer to his own question. He can wave his arms around in a histrionic way, but the reality is that the previous Home Secretary said that he could not guarantee the individual decision of every chief constable of the 43 forces. However, he said that on the basis of a 12% reduction over four years, there would be no need for any reduction in police numbers. Under the coalition, the Police Federation estimates that 20,000 officers will be cut. We know that 1,100 officers will be cut in Birmingham and that 1,400 will be cut in Greater Manchester. The difference is that under our proposals there would have been no cuts to police numbers, and under the coalition proposals there will be cuts in every constituency and in every police force in the country. Those cuts will be made worse by the additional expenditure on the ridiculous and flawed proposals before us.

Michael Ellis: Am I correct that the shadow Home Secretary admitted that £1 billion of police budget cuts had to be made? If so, where would he make those cuts?

Ed Balls: If, rather than framing his intervention, the hon. Gentleman had listened to the previous one, he would have known the answer to his question and would not have had to bother asking it. HMIC said that a 12% reduction in the central Government grant over four years was deliverable without cuts to front-line policing. That advice has not been taken by the Government: they have gone not for 12% but for 20%, and it will be front-loaded on the first two years. The coalition policy will mean not 3,000 more police officers, but visible, front-line police officer cuts in police forces up and down the country. That is not the manifesto on which Government Members were elected, and they will be held to account.

Chris Bryant: Will the cuts not be more savage in particular areas? In police forces such as South Wales, the work that absolutely must be done, such as policing major sporting events, looking after the Welsh Assembly and the continuation of anti-terrorism work, will not be cut, meaning that the neighbourhood policing that happens in ordinary people's streets will end up being cut?

Ed Balls: I hope that that will not be the case. The chief constable of West Yorkshire police has said the
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opposite to me. His priority will be to protect neighbourhood policing, if possible.

That point brings me to a smear that has been propagated regularly by those on the Government Front Bench. On the basis of the HMIC report, they claim-in my view erroneously-that only 11% of policing has been visible at any one time and that the other 89% has somehow been wasted on bureaucracy and form-filling. The fact is that 50% of that 89% comprises the policing of organised crime and domestic violence, criminal investigation departments, and work on drug and alcohol policies. Perhaps such policing is not done in neighbourhood teams, but it is vital nevertheless. It is discounted by those on the Government Front Bench as waste and bureaucracy. Frankly, that is an outrageous slur.

The Minister for Policing and Criminal Justice (Nick Herbert): The right hon. Gentleman has admitted that he would have cut police funding by £1 billion a year, which is the HMIC proposal, and that under his proposals, there would be no cut in police numbers. Will he explain how he would achieve £1 billion of savings?

Ed Balls: I fear that we may be wasting time by going over the same point, but I will explain it again. HMIC said that a cut of more than 12% in central Government funding would lead to a cut in visible, front-line police numbers. The coalition is cutting central Government funding not by 12% but by 20%. As the previous Home Secretary made clear, on the basis of the HMIC report, savings could be made in procurement and through collaboration-precisely the sort of cross-force collaboration that will be undermined by elected police commissioners. It is possible to do that without cuts to front-line policing. It is the Minister's 20% cuts that will lead to a reduction in police numbers, as is accepted universally by police officers across the country.

Mr Hanson: I hope to help my right hon. Friend. As he knows, I was the Minister with responsibility for policing in the previous Government. The £1 billion that we sought to save was made up of £500 million to £600 million from overtime and shift patterns, several hundred million pounds from police procurement of things such as helicopters and uniforms, and savings through back-office staff mergers. All those savings could have been made without cutting front-line policing. The HMIC report shows that the additional £1 billion that is being taken out by the Government will damage front-line policing.

Ed Balls: My right hon. Friend is making the point that the previous Home Secretary would have fought his corner for the police and Home Office budgets. In the spending review, the Home Secretary did not exactly lead the police chiefs up Downing street, as the Secretary of State for Defence did with the defence chiefs. We heard nothing-not a squeak. The Home Secretary calls what we ended up with a fair settlement, but it is a deeply unfair settlement, compared with that for schools, health and defence, that hits the police disproportionately with spending cuts. Police chiefs around the country ask me, "Where was the Home Secretary?"

Charlie Elphicke: I have been listening to the right hon. Gentleman for the past 10 minutes, and I have yet to hear a credible alternative plan. All we have is another blank sheet of paper.

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Ed Balls: What the hon. Gentleman will not hear from us is support for a reform that a former Met commissioner has today said is

It will weaken police accountability by making it more personalised and less representative of local communities, and it will overturn a 170-year tradition of independence in policing by empowering one elected individual to direct police priorities, fire chief constables and hire political advisers to do his bidding. It will make cross-force collaboration harder, not easier, and it will divert millions of pounds-the equivalent of 600 police officers-from the front line to new elections. It is a flawed reform that will waste millions and do nothing to reduce crime, so we are very sceptical about giving the Bill a Second Reading.

Mrs Moon: South Wales police currently have a police authority that contains cross-party representation from the leaders of a number of local authorities as well as people who are independently selected. How can it be said that there is greater democratic accountability when one person is directly elected than when there is cross-party representation from across the whole police authority area?

Ed Balls: I do not know, and that is one of the flaws in the Bill that we will need to investigate in Committee. As I understand it, that problem was why the Liberal Democrats did not support the policy. They rejected it in their policy documents in the past two years, stating that

That was why they rejected the policy in the first place.

Paul Maynard (Blackpool North and Cleveleys) (Con): The right hon. Gentleman has described the current situation as "non-optimal". May I ask him what he means by that term and what his own plans for reform are, or is he doing just what his leader is doing and bringing nothing but a blank sheet of paper to the Chamber?

Ed Balls: As I said at the beginning, we will propose amendments in Committee to strengthen accountability at force and neighbourhood level, but in a way that is consistent with an approach to policing that respects political independence and ensures broad-based accountability across an area. Concentrating power in one individual will lead inevitably to political interference, and it will be impossible for one individual to represent, for example, the individual point of view of every town and community in West Yorkshire.

Charlie Elphicke: Will the right hon. Gentleman give way?

Ed Balls: Oh, go on.

Charlie Elphicke: I thank the right hon. Gentleman for his patience with me. In Kent, the police authority's idea of accountability seems to be to sue people who question it for libel, which I regard with serious concern. That should not be done with public money. The Library report to which he referred states that two thirds of the public said that they did not know who to go to if they had a complaint, and that 59% said that it was very
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difficult to have a say on how their area was policed. Surely an elected police commissioner would be more responsive.

Ed Balls: I do not know whether the Library report quotes the Conservative chair of the police authority in Kent, who, as I understand it, totally disagrees with the hon. Gentleman and says that the proposal is flawed and will not work. It will not be properly representative.

Bizarrely, the coalition came along and proposed the abolition of police authorities, but then realised that it was a flawed policy. It then decided to reinvent police authorities and give them a new name so that they would be called panels rather than authorities. The problem of representation needs to be solved, because it is serious.

Hazel Blears: Does my right hon. Friend agree that visibility and accountability have to be balanced with the integration of services, particularly with local authorities and other partners? Partnership working in policing has been shown to work over the past few years, and a single elected commissioner could well tear the system apart and lead to much less effective policing on the ground.

Ed Balls: I agree, and effective accountability really ought to happen in the main in the basic command unit. We need to ensure that the police are accountable to their community, but that they can demand support from the local authority, the health service and the other agencies that are vital to tackling the causes of drug crime and wider youth crime. All that will be ripped up under the Government's proposals, and we will end up instead with one elected person for a massive area, who will be able to visit each ward perhaps once every other year. That is not local accountability at all.

Mr Aidan Burley (Cannock Chase) (Con): The right hon. Gentleman has just said that a single elected individual could rip apart the policing in an area. Is that what he would say to Bill Bratton, who was the single elected individual who increased the detection of crime in New York and Los Angeles?

Ed Balls: The shadow policing Minister, my hon. Friend the Member for Gedling (Vernon Coaker), read out to me earlier the views of Bill Bratton on the Conservative proposals and the risky and reckless way in which they are drawing conclusions from the American experience. Bill Bratton said:

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