7 Nov 2011 : Column 83

I am encouraged by the fact that the criticism of Opposition Members is now that we are not going far or fast enough, when, in fact, over the last 13 years, they made the problem worse, not better. We look forward greatly to their co-operation in this place—as it was so willingly offered in the other place—so that we can improve the Bill, make it even more localist, and deliver for local communities and local councils.

Mr Nick Raynsford (Greenwich and Woolwich) (Lab): As the Minister will know, the amendments include a requirement for the deletion of clauses 42 to 58, the local referendum provisions. Does he regard that as an enhancement of local decision making, an embarrassing withdrawal from a rather bizarre and ill-thought-out proposal for local decision making, or simply a recognition of a cock-up on the Government’s part?

Andrew Stunell: Given that the right hon. Gentleman spoke and, I believe, voted against the inclusion of that provision in the Bill, I should have thought that he would welcome the fact that the Bill in its present form reflects his point of view more accurately than it did before.

The amendments take the power and local responsibility of local authorities further than the Bill as originally drafted. Although the original Bill set out to achieve that, we always made it clear that there was more to do, and that we were willing to listen when there were sensible arguments for going further. That is what underlies the amendments, all of which—as was pointed out by my right hon. Friend the Minister—secured support throughout the other place. During the debates both here and in the other place, a number of Members of both Houses made sensible suggestions about additional areas in which we could free up local government. Let me highlight two examples in which the Bill now goes even further than we originally proposed in freeing local authorities to manage their own business as they consider appropriate.

Good arguments were advanced in the other place in support of the view that the rules on area committees were too prescriptive. In response, the Government tabled Lords amendments 269, 271 and 272, which remove the Secretary of State’s powers to make regulations in relation to such committees. When we were discussing the earlier group of amendments, the hon. Member for Warrington North (Helen Jones) maintained the argument—which does not bear close examination—that, in some mysterious way, inserting these proposals in the Bill, and improving them today, constituted an act of centralisation. Nothing could be further from the truth: our amendments relating to area committees demonstrate not just our intentions, but our delivery of increased localism for local authorities.

Good arguments were also advanced in the other place for the view that the rules on area committees were too tight. We therefore tabled Lords amendments 263, 267 and 270, which enable an executive of a local authority to delegate its functions to an area committee and to arrange for the discharge of those functions by an officer of the authority. That enables councils to establish whatever area committees they wish to establish, and to give them whatever executive functions they consider

7 Nov 2011 : Column 84

appropriate, without asking the Secretary of State for regulations or permission. Lords amendment 273 also removes the restrictions on the maximum size of area committees.

The Bill gives more powers to local authorities in respect of local elections. We have responded to representations about unnecessary restrictions on authorities wishing to change their scheme of elections, and the significant time constraints that were built into that scheme. Lords amendment 14 removes the rules stipulating when authorities may change their scheme of elections. It leaves them to make such decisions at a time that is right for them and their local communities without being dictated to by central government, and enables them to decide the date on which they will hold their first whole council elections.

Members of both Houses expressed the fear that the Government’s proposals would place unnecessary burdens on local authorities. We reflected carefully on those arguments, and discussed them at length with appropriate parties both inside and outside the House of Commons. One example relates to the point raised by the right hon. Member for Greenwich and Woolwich (Mr Raynsford) about the proposed mayoral arrangements. As a result of comments made on Report—by the right hon. Gentleman, among others—and on Second Reading in the House of Lords, we agreed to streamline our proposals for elected mayors. Lords amendment 312 and a number of consequential amendments remove our initial proposals on shadow mayors as precursors to directly elected mayors, while Lords amendments 94 and 296 and a number of consequential amendments remove our proposals on mayoral management arrangements, under which the elected mayor would also have become the chief executive of his or her authority.

Mr George Howarth (Knowsley) (Lab): May I ask the Minister a question about Lords amendment 112? As he will know, there are proposals—which are not universally accepted—for a directly elected mayor for the Liverpool city region. There is some support for them, and I support them in principle. Would the amended provisions make possible the creation of a directly elected city region mayor, but only on the basis that the powers of that person in regard to such important matters as transport, police and fire and rescue services are increased? Otherwise the amendment is pointless.

Andrew Stunell: The Bill does not encompass matters relating to city region mayors. That would require a separate provision. Let me, however, draw the right hon. Gentleman’s attention to the amendments with which we will deal shortly relating to core cities, and to my right hon. Friend’s request for the core city regions to consider what powers they might wish to take. There are various options, but I should make it clear that there is no proposal in the Bill for a city region mayor.

Under the Local Government Act 2003, local authorities can already conduct non-binding referendums on matters relating to their services or expenditure. In addition, the Bill gives local people powerful new rights to vote on key issues such as governance changes—for example, mayoral elections, council tax increases and, of course, neighbourhood plans. A number of members of the House of Commons Committee feared that, given those new rights, the provisions on referendums did not add

7 Nov 2011 : Column 85

enough to justify the additional burden. Similar observations were made in the House of Lords Committee, and, after careful reflection and discussion, we determined that the right course was to accept on Lords Report amendments 96 to 112 removing the provisions relating to local referendums. That does not change the provisions on council tax referendums, which are the vehicle that switches the power to prevent excessive tax rises from the Government and the Secretary of State to the local communities and electors who will be paying those bills if they vote for them.

Helen Jones: What is the Minister’s response to the view of the Electoral Commission that if council tax referendums are introduced in 2012, the time scale will be too short to allow them to be prepared for properly? Will he listen to the commission’s representations?

Andrew Stunell: We will, of course, take careful account of all the advice we receive. The powers are to be changed only in respect of non-binding referendums. The Government are committed to giving people a greater say, but local people currently have many good opportunities to speak out and be heard.

7 pm

Graham Stringer (Blackley and Broughton) (Lab): The Minister and I were involved in the congestion charge referendum in Greater Manchester, and I think we both had concerns about the returning officer’s impartiality. Will the changes under discussion deal with situations such as that, where the returning officer was appointed by one side of the campaign and they operated from adjacent offices?

Andrew Stunell: The hon. Gentleman reminds me that we sometimes make common cause on issues, and he is right to say there were concerns about that. The provision in question removes the proposal for non-binding referendums. Other proposals remain in the Bill, and the referendum to which the hon. Gentleman referred was, I believe, carried forward under the 2003 Act, which we are not amending.

I shall now turn to the amendment proposed by the hon. Members for Richmond Park (Zac Goldsmith), for Cleethorpes (Martin Vickers), for Brighton, Pavilion (Caroline Lucas), for Romsey and Southampton North (Caroline Nokes), for Clacton (Mr Carswell) and for Colne Valley (Jason McCartney)—and, I believe, supported by the hon. Members for Shipley (Philip Davies) and for Kettering (Mr Hollobone). It seeks to add to the Bill a scheme of binding local referendums. The Government are committed to giving people a greater say in how their communities are run, but we do not believe that it is sensible to introduce binding referendums on any subject that might arise. Given the potential scope of the local issues that binding referendums might cover and the many complex impacts that such a regime could have on local service delivery and local public finances, it would be unwise for there to be a presumption that all local referendums should be binding. There could be occasions where there are two competing referendums with potentially conflicting aims. There could be occasions where the course of action requested has significant cost implications and would have an adverse impact on the delivery of other services or priorities. Ultimately, it

7 Nov 2011 : Column 86

is the role of councillors to take decisions by balancing the various views of citizens alongside the needs of the community, particularly where there is no consensus, and those councillors are ultimately responsible to local people for their decisions through the ballot box. I hope the signatories to the amendment in question will air their points of view, but I hope they will not force a Division.

Alec Shelbrooke (Elmet and Rothwell) (Con): I congratulate my hon. Friend on making those comments. It is important that such referendums be non-binding, especially when we consider cities such as Leeds, part of which I represent, where there are many diverse communities. In times of economic trouble, it is easy for a blame culture to arise, and I can envisage situations in which some might try to use hate in a referendum campaign. If referendums were binding, that could cause a problem.

Andrew Stunell: I thank my hon. Friend for that wise remark. One can envisage such binding referendums having a variety of unintended negative consequences.

The issue of standards was keenly debated in both Houses. Members and peers made it clear that they supported the abolition of the Standards Board regime and the removal of what was a top-down, bureaucratic system. However, concerns were raised about some aspects of our proposals to deal with local authority standards after the abolition of the Standards Board, and about whether they would ensure the high standards we all expect of local authorities. There was, however, much common ground and we were able to refine and develop our proposals as the Bill progressed through the House of Lords, and thereby get to a position which reassured all parties. All sides agreed that the promotion and maintenance of high standards of conduct was vital; the debate was about how best to achieve that.

We have introduced amendments 29 to 36 to address these concerns. They focus on the offence of pecuniary interests, and ensure that there are appropriate defences, such as “reasonable excuse”. In simplifying our proposals, we have ensured that councillors cannot use their position for financial advantage, but without the danger of criminalising a councillor for an honest oversight or omission.

There was a feeling that the provisions dealing with local authority standards after the abolition of the Standards Board needed to be set out in more detail. On Lords Third Reading, following meetings with peers of all parties and Cross-Benchers, the Government introduced amendments 15, 20 to 26, 7, 125, 332 and 333, strengthening the standards provisions in the Bill. Local authorities will now have to draw up a code of conduct in accordance with the Nolan principles of standards in public life, which I am sure I do not need to remind Members are selflessness, integrity, objectivity, accountability, openness, honesty and leadership. Central Government will not otherwise prescribe its content, other than to require councillors to register and disclose both their pecuniary and non-pecuniary interests in an open manner. Local authorities will also have to put in place arrangements both to deal with complaints that the code has been breached and for coming to a decision about complaints. Again, we will not stipulate what these arrangements should be.

7 Nov 2011 : Column 87

Heather Wheeler (South Derbyshire) (Con): I thank the Minister for the clarity he is giving. In respect of this provision, district councils have felt that there might have been some suggestion that they would have to have a standards board looking after parish council complaints. I am sure that is not the Minister’s intention, however.

Andrew Stunell: It is neither our intention nor what is provided for in the Bill.

Graham Jones (Hyndburn) (Lab): May I extend that question? We are going to have neighbourhood forums in respect of neighbourhood development plans, and there is also an issue to do with community budgets and the Government asking for community groups to come together to spend local money—that was recently proposed by the Department for Communities and Local Government for deprived areas such as mine. Will such matters be the responsibility of the new standards arrangements? They will not fall under parish council responsibility; rather, they will be dealt with by the district council or the Government. How will they fit in with the standards arrangements?

Andrew Stunell: I think the hon. Gentleman might be confusing different processes. The Standards Board regime applied to councillors at parish, district and county level. We are sweeping away the Standards Board and making sure that local authorities put in place sound and sensible provision to safeguard the integrity of themselves and the members who serve on them.

To return to the question of my hon. Friend the Member for South Derbyshire (Heather Wheeler), district councils do not have to monitor parish councils. They do need to have in place arrangements to deal with allegations of misconduct by a parish councillor, but how they do that is up to them. We will expect district councils and parishes to work together to make arrangements as simple as possible.

Mr Clive Betts (Sheffield South East) (Lab): I welcome the fact that the Government at last recognise they may have some responsibility for appropriate standards being maintained in local councils. Can the Minister give an assurance, however, that where there is a serious complaint against a chief executive or leader of a council—perhaps about bullying of a junior member of staff or another councillor—the complainant will receive as robust an investigation into those complaints as under the current regime that the Government seek to abolish?

Andrew Stunell: Absolutely. We are clearly setting out what councils have to do and have in place, and the safeguard that they are required to provide.

On the application of the standards regime in London, we took the opportunity on Lords Report to make amendments 16 to 19, 28, 37, 408, 411 and 413, which ensure that the Mayor of London and the Greater London assembly are given equal roles in and responsibility for promoting and maintaining high standards, rather than leaving that function to be discharged by the assembly alone. The amendments also allow the assembly and Mayor to delegate functions to a committee or member of staff.

7 Nov 2011 : Column 88

With these amendments, taken as a whole, we have achieved a balanced approach to the promotion and maintenance of high standards of conduct, with local authorities determining for themselves how best to achieve that. They will be freed up from the top-down, bureaucratic yoke of a national regime, of a model code and of a quango-regulated regime that became a vehicle for petty, vindictive and often politically motivated complaints. Our approach, which balances localism with safeguards, is the right one to ensure accountability locally and consistently high standards right across the country.

This group also contains a number of more minor amendments, many of them technical in nature, but I will mention one because it will be of particular interest to Labour Members. Lords amendments 38 to 43 introduce measures intended to increase accountability on local authority decisions about pay and reward. During the Commons’ consideration, Labour Members welcomed these provisions, as far as they went, on senior pay and asked us to go further to see how the Bill could bring similar levels of accountability on the pay of the rest of an authority’s work force. We committed to do so, particularly in the light of Will Hutton’s review of fair pay in the public sector, which made several recommendations. Following the representations that we have received, and with that report as the background, we made amendments in the Lords which have the effect of expanding the scope of pay policy statements to include an authority’s policies towards its lowest-paid staff, as well as the relationship between the pay of its most senior staff and the rest of its work force. I hope that Labour Members will agree that these sensible changes broaden the scope of the measures to capture the spirit of their comments and the Hutton recommendations.

In summary, this group of amendments will radically reduce the prescription bearing down on local authorities, freeing them up to serve their local communities better. I wish to pay tribute to the way in which hon. Members from all parties have—in Committee and on Report in this House, and in the other place—engaged with this part of the legislation to deliver a much-improved Bill. I urge the House to agree to these Lords amendments, and I hope that hon. Members will not press their amendment (a) to a Division.

Helen Jones: We are dealing with a broad group of amendments relating to local authority governance. I wish to begin by speaking to amendment 15, which would ensure that it is compulsory rather than voluntary for local councils to adopt a code of conduct. The subsequent amendments make it clear that the code of conduct must be in line with the Nolan principles and would ensure that arrangements are in place to investigate complaints against a member, including the appointment of an independent person whose view must be sought before action is taken. As the Minister said, this group would also allow the Mayor of London to exercise functions relating to standards and provides for a register of interests.

We welcome the amendments. It was bizarre that, in Committee, Government Members opposed the requirement to have a code of conduct—I found that extremely confusing. We accept, in this House, that we should be subject to clear standards of behaviour, but the Government were proposing that other elected representatives—people who deliver important services

7 Nov 2011 : Column 89

to their communities and take decisions that affect people’s daily lives—should not face a similar requirement; a council might have a code or it might not. Such a situation is not acceptable. It fails to offer sufficient protection to the public and it implies that the standards regime is optional.

7.15 pm

In Committee, we heard all sorts of convoluted justifications for such an approach. The Minister said that the old system was

“an almost constant source of irritation to almost every local authority.”––[Official Report, Localism Public Bill Committee, 3 February 2011; c. 287.]

He is right about that—in my experience, it was usually the Lib Dems doing the irritating, because they were continually putting in complaints. He argued that authorities should have the freedom not to have a code of conduct, but that denigrates local government. He got very close to saying that local government was not important enough to be required to have a code of conduct. Nobody in Committee was standing up for the old system, but that did not mean that it was right not to have a code of conduct at all. Labour Members think it is a vital part of our democracy and deserves to be treated as such.

The Minister argued that there was no need for compulsion because everyone would have a code of conduct anyway, but that failed to answer the question of what would happen if they did not. We are pleased to see the amendments and to see that clause 18 sets out clearly that a register of interests must be maintained in an authority and how pecuniary interests must be disclosed.

Graham Stringer: My hon. Friend could not be more accurate, in that most of the vexatious claims under the previous legislation came from Lib Dem councillors who had lost the argument. Is she satisfied that these proposals contain a sufficient filter or enough common-sense criteria to reduce the number of vexatious claims from Lib Dem councillors or to stop such claims?

Helen Jones: The only people who can stop vexatious claims by Lib Dem councillors are the Lib Dems, but I am sure that as they dwindle away in local government so, too, will the number of claims from them.

These amendments are, no doubt, an improvement on the original Bill, but I have some reservations about how the system will work in practice. In particular, I wonder about the role of the “independent person” specified. He or she must have their views sought by the local authority before it makes any decision on an allegation. However, although their view must be taken into account, that person is not the decision maker and does not have the power to investigate. I accept that we do not want to set up a system that is too convoluted, but I foresee a real possibility of conflict. In most local authorities—in good local authorities—that person clearly will be involved, but there is no requirement for that to happen. In addition, that independent person may be consulted by those who are the subject of an allegation. That really raises the question of what the role is: is the independent person the judge, the defence counsel or merely a therapist for all those involved? It is very unclear and we will have to consider again how the arrangement would work in practice—it may be that more work than we intend will result for lawyers.

7 Nov 2011 : Column 90

Lastly, I am concerned that, although we now have something about pecuniary interests in the Bill, there is little about non-pecuniary interests, other than the fact that the code of conduct must secure their disclosure. We may well discover that it is necessary to have a clear definition of “non-pecuniary interests”, as we have in this House, for the sake of giving clarity to local councils and ensuring that minimum standards apply everywhere.

Let me address amendments 38 to 46 and 48, which the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell) rather skated over. The Government did not want to accept this set of amendments either, but they have now been forced to do so. Originally, the Government intended to require local councils to publish only information about the pay of senior staff. The reason for that was very simple: they wanted to propagate the myth that councils would not have to make cuts if only they cut top salaries. Let us be very clear that that is a myth. Liverpool council has cut £500,000 from executive pay, but it is a drop in the ocean compared with the £100 million-worth of cuts that it faces.

Alec Shelbrooke: Does the hon. Lady think that local authority money is better spent on libraries or on an international relations department?

Helen Jones: I think that, as Ministers keep saying from the Front Bench, it is for local authorities to make decisions about their priorities—the hon. Gentleman cannot have it both ways.

Let me be clear that I believe that people have a right to know how their money is spent. My personal view is that pay at the top of local authorities has risen to an unsustainable level, but it has been following pay in the private sector. We ought to make it clear that more than 90% of those who earn more than £150,000 are in the private sector—not the public sector. It is very interesting that the Government do not say anything about that. Neither do they want to say very much about low pay in the public sector, because that does not fit the myths that they create.

The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill): I am shocked at how little attention the hon. Lady has paid to our debates up to now. Does she not recognise that when the hon. Member for Birmingham, Erdington (Jack Dromey) raised this issue, we said at a very early stage that we were more than prepared to take that away and consider it? The tone of her contribution is markedly different from the very constructive manner of her colleagues in Committee. We kept our promise: we have reflected and delivered.

Helen Jones: If the Government believed that this issue was so important, they could have put it in the Bill to start with, but they did not because their focus was all on pay at the top of local authorities and not on the low pay that is endemic at the bottom.

Greg Clark: Once again the hon. Lady is being rather churlish. The Hutton committee had not reported by that time. We made a commitment that we would consider

7 Nov 2011 : Column 91

the recommendations in good faith and we have done that, as is reflected in the Bill. It would be nice if she could be a bit more generous in her remarks.

Helen Jones: If, as the right hon. Gentleman says, the reason was that the Hutton committee had not reported, one would have to ask why the Government introduced specifications in the Bill about senior pay. They did so because they want consistently to promote the myth that councils would not have to make front-line cuts if only they would cut top pay.

We are pleased that councils will now have to set out details of who they regard as their lower-paid staff and their approach to the pay of those employees. They will also have to include a statement about their policy on pay dispersions—what used to be called differentials when I was negotiating. This is a real and growing issue in this country and people are extremely concerned about it. The amendments represent a very modest step, but at least they will make information available to the public and ensure that councils consider the issue. The publication of details about pay will expose the inequalities that prevail and encourage people to think about how many of the services they rely on are delivered by people on low pay. There are people out there who provide care for the elderly, clean our streets and empty our bins—people whom we take for granted but without whom our towns and cities would quickly cease to function—and they are often very low paid.

I regret that the Government have not seen fit to include the requirement for local government contractors to provide pay transparency if the value of their contract is in excess of £250,000. We argued in Committee for that to be included, because we believe that it is a matter of basic justice. We believe that those who are paid from public money should not be on poverty pay and that the firms that provide public services should demonstrate how they are spending our money. Contracts that are outsourced might seem like better value, but if they depend on low pay that is then topped up by benefits, not only are they an affront to the people who work in those services but they might cost more public money in the long run. The increase in the outsourcing of services has made this step even more important, because we want good companies to compete on quality and efficiency, not by undercutting pay levels and terms of service. The amendments will at least bring more transparency into the system, but it is a pity that the Government could not have extended the duty a little further.

Let me address the amendments that remove the details regarding local referendums, which really illustrate what a mess the Government have got themselves into with the Bill. A welter of amendments dealt with this issue in the Lords, although it was dealt with extensively in the Bill Committee both in the evidence it received and during its debates. The late Sir Simon Milton, for example, pointed out that a referendum in London could cost £5 million if held on the same day as local elections, but could cost £11 million if held on a different day. However, it took the Government some time to realise what a huge drain on a local authority’s budget that could be. My hon. Friends also raised in Committee the huge costs that would be involved for local authorities, such as that for checking petitions for a referendum and

7 Nov 2011 : Column 92

for running the referendums. There was a real fear that the number of petitions and referendums would simply spiral over time. Even the leader of Shropshire council, who is a Conservative, warned that the costs could be “outrageous”, but it took a long time for the Government to change course.

Underlying those provisions was the Government’s failure to trust elected councillors to decide how to engage with their electorate. We still hear a lot from Government Front Benchers about devolving powers to local authorities, but it took them some time to realise that imposing this system on local authorities would have been unwise to say the least. Local authorities might want to use petitions, referendums or public meetings—whatever they wish—and, like all of us in elected office, if they do not get it right they pay the penalty at the ballot box. That is as democracy should be.

The Under-Secretary was adamant in Committee and would not budge an inch. I felt quite sorry for him, because he suffered the fate of many junior Ministers who are sent like officers on the Somme to defend an indefensible position until those above them finally decide that they ought to give way. Indeed, I am surprised that he is still here, because I understand that at the weekend the Lib Dem leader in Broxtowe called for him to resign following his performance. In Committee, the Under-Secretary would not accept the dangers of what he was proposing. However, there were risks that highly vocal pressure groups that did not necessarily represent the wider community—certainly not the whole authority area—could use the measures, so there was potential for whipping up feeling against necessary, but sometimes unpopular, provision.

I recall examples that I have dealt with regarding housing for people with mental health problems in the community. My experience has been that the idea is usually unpopular because of the misconceptions about mental health that many people hold, but that if one talks to neighbours and tries to deal with their fears, that usually works. Once people are settled in their homes, overwhelmingly the community around them is very supportive and helpful. One could not do that sort of work in the face of a polarising referendum, which some people might whip up for their particular ends. No one is saying that a referendum is always a bad idea, but there are many ways of engaging with voters and that is only one of them.

7.30 pm

If amendment (a) to Lords amendment 112 is put to the vote, we will oppose it for the reasons that have already been stated. We do not believe that imposing binding referendums on local councils is the way forward, because they can be misused, they can have an impact on services elsewhere and, as was said earlier, they may be used by people promoting racial hatred or for other purposes that we would consider inappropriate. In the end, the local council must take a decision and stand by it.

We welcome the amendments that remove the mayoral management arrangements from schedule 2 and delete the power of the Secretary of State to order that a specified authority must move to an elected mayor and cabinet system because, again, the original clauses clearly gave the lie to the idea that the Bill was about empowering

7 Nov 2011 : Column 93

local communities. On the contrary, it gave yet more power to the Secretary of State. The proposal to order a move to an elected mayor and cabinet was one of the most controversial in the Bill, together with the power to impose shadow mayors. I note that the Government are retaining the power to order an authority to hold a referendum on the subject because clearly they do not trust local councils, but at least we have seen some progress.

It is astonishing how many U-turns Ministers have done on this issue. In 2007, the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) told a Committee of the House:

“I would prefer that the Government did not prescribe the governance system for councils at all.”––[Official Report, Local Government and Public Involvement in Health Public Bill Committee, 25 February 2007; c. 251.]

I expect that, as the former leader of a local authority, he believes that, so I do not know what happened in the meantime, unless he was sat on by his right hon. Friend the Secretary of State for Communities and Local Government. The hon. Member for Hazel Grove (Andrew Stunell), who is now also an Under-Secretary of State for Communities and Local Government, told the same Committee:

“governance should be entirely a matter for local councils”—[Official Report, Local Government and Public Involvement in Health Public Bill Committee, 20 February 2007; c. 269.]

I agree, but he is a Lib Dem, and we have all seen “Focus” leaflets which argue different things in different areas.

The real point about these proposals is that they were entirely undemocratic—a fact that was recognised clearly in the other place. They would not have given the decision to local people and would have given whoever was made the shadow mayor a huge electoral advantage in any poll that followed. We believe that that was an entirely unacceptable way of going about things. To add to the confusion, the Secretary of State and the Under-Secretary, the hon. Member for Bromley and Chislehurst, have both said on different occasions that a mayor and cabinet system would only follow a referendum of local people. That is typical of the mischief and muddle that have characterised the Bill. So bad were the Government’s original proposals that even Tory councillors were speaking out against them. [Interruption.] The hon. Member for Elmet and Rothwell (Alec Shelbrooke) says from a sedentary position, “You don’t want to listen to them.” I hope his own councillors hear what he says.

The most outrageous suggestion from the Government was the proposal to allow an elected mayor also to be the chief executive of a local authority. Goodness knows what put that into their heads. It reflects a degree of confusion between political leadership and administration which is extremely worrying. I well recall in years past, when Labour took control of Lancashire county council, my former hon. Friend the Member for Blackpool North and Fleetwood, Joan Humble, going to the social services offices and saying, “We are going to implement this manifesto. You are going to tell me how to do it, and I will listen to your advice on how to do it, but make no mistake, we’re going to implement it.” That is the difference between political leadership and administration. One listens to officers about the best way to do things, but one has a political direction.

7 Nov 2011 : Column 94

The problem with what the Government were proposing was the muddling of those two, which has huge potential for undermining standards in the governance of local authorities because it removes the system of checks and balances that help local authorities to run properly. Removing the proposal and the introduction of a mandatory requirement to have a code of conduct is a step forward, as are some of the other amendments in the group. I only wish that the Government had listened earlier in Committee to the points that were made by my hon. Friends.

Zac Goldsmith (Richmond Park) (Con): I shall be brief, as I have made this point many times to Ministers.

The coalition agreement states:

“We will give residents the power to instigate local referendums on any local issue.”

Despite being wildly enthusiastic about the introduction of referendums, I was critical of this component of the Bill because I did not think it went nearly far enough. This aspect of the Bill recognised that people want more say and more control over the decisions that affect their lives, but because the referendums that we were proposing were to be non-binding, I think the Government would have failed to deliver. I tried on many occasions to persuade the Minister to convert the idea so that the referendums would be binding, but I failed.

I was told to take comfort from the fact that this was a start, and that the referendums did not need to be binding because only a mad local authority would ever go against the wishes of its electorate. Well, there are many mad local authorities, as everyone here knows. [Interruption.] I will name one or two. Earlier this year King’s Lynn and West Norfolk threatened to build a large incinerator, which triggered an almighty backlash from the local population. In the ensuing referendum the turnout was 61%, which would make most constituencies envious in the run-up to a general election. That is a serious figure—61% of the 80,000 people polled —and 92% of those voted against the incinerator. That was an overwhelming result, and hon. Members can probably guess the outcome: the result was ignored by the local authority.

Helen Jones: Did the question include where the incinerator should go?

Zac Goldsmith: To be honest, I do not know what options were offered, but a large percentage of the population turned out to vote and the vast majority of those made their opinion known and were ignored. Whether we agree with that decision is academic. The fact is that people had their say and were ignored.

Alec Shelbrooke: To reinforce the point that my hon. Friend makes about councils listening, when the then governing coalition of Conservatives and Liberals on Leeds city council was discussing an incinerator, which I opposed, the Labour councillors made great play of the fact that the incinerator was going to be built. They won power on the council in 2010, and they are now building the incinerator. We have not heard a peep from the councillors who opposed it before.

Zac Goldsmith: We could go on. I shall take the opportunity to give one more example of a mad council ignoring the wishes of local people. That was in my own

7 Nov 2011 : Column 95

local authority in Richmond, where a couple of years ago—


It happens even in places such as Richmond, where I called a referendum on a proposal to bring in a supermarket, which local people felt would seriously damage the independent shops in one of the much-loved streets in Barnes. We had a bigger turnout in that referendum than in any general election, but we had a Mugabe-esque result: nearly 90% of people rejected Sainsbury’s, yet the local authority did absolutely nothing to prevent the takeover of the high street by Sainsbury’s. Again, whether we agree with the decision or not, democracy ought to play a role in such decisions.

Bob Blackman (Harrow East) (Con): My hon. Friend is making a powerful case in favour of referendums. He referred to overwhelming turnouts in favour of a proposition. However, the proposal before us contains no safeguard for such a referendum, and there could be a binding referendum on a very small turnout. How would he deal with that problem?

Zac Goldsmith: I thank my hon. Friend for his intervention. There is a safeguard, although it may not be enough. The Government’s proposal was that 5% of the population could trigger a referendum, which I always felt was too low and would allow it to become a cranks’ charter, because it does not take much to get 5% of people to call for something, and we could end up debating some mad ideas. My amendment would raise the minimum number of signatures required to trigger a referendum to 20%, but I would be happy with 30%, because it should be difficult. A referendum should act as a veto in the hands of the people, but it should not be an easy mechanism to deploy.

Hilary Benn (Leeds Central) (Lab): We have just heard about one potential weakness of the hon. Gentleman’s amendment, and I would like to raise another. He has made great play of the fact that the result of the referendum would be binding—it is repeated several times in the wording of the amendment—but it then states that that would be

“subject to exceptions set out in regulations made by the Secretary of State”.

Could he assist the House by giving three examples of the kind of exceptions that he has in mind?

Zac Goldsmith: I can give the right hon. Gentleman one exception that covers many more than three: matters that are not in the control of the local authority. If the decision can be made without reference to national Government, the local authority would be bound by the results of a referendum. I am glad that the right hon. Gentleman described the weakness that I highlighted earlier as a “potential” weakness, because I hope that I answered the question adequately.

Hilary Benn: The example that the hon. Gentleman gives seems to be covered already by subsection (2) of his amendment, which says that a referendum can take place only if relates to one of the four examples given in paragraphs (a) to (d). It seems to me that his answer falls at an earlier hurdle—his own amendment. I ask him again whether he can give three examples of situations in which he thinks the Secretary of State should say that the result of a referendum is not binding.

7 Nov 2011 : Column 96

Zac Goldsmith: We are getting into a technical exchange—[ Interruption. ] It is very technical, and I think that the right hon. Gentleman has answered his own question, as Government Members have pointed out from a sedentary position. The previous Government’s proposals for the non-binding aspect of the referendum were clearly inadequate, but I concede that, as the Minister said at the time, they represent a start. It was a start until the entire chapter was dropped as it was being negotiated in the other place. That might have been a mistake, in which case I am happy to reintroduce the concept in the amendment, but it takes the previous Government’s idea one step further. The amendment would give people power to instigate a local referendum, which is a commitment that all Government Members made in the run-up to the last election. We all committed to ensuring that people could have their say in local referendums, and in my view it was an important part of the manifesto. Crucially, it is binding. Crucially, we have raised the threshold to 20%, which I hope would prevent the kind of abuses that people are worried about.

Bob Blackman: My hon. Friend once again makes a powerful case for referendums, but the point is that although the trigger for instigating a referendum would be 20% of the electorate, there would be no safeguard when it came to the voting. The turnout could be as low as 5% or 10%, but the result would still bind a local authority.

Zac Goldsmith: I thank my hon. Friend for his intervention. I will not argue on that point, because I do not necessarily disagree with him. The purpose of the amendments is to introduce the concept of binding local referendums. If it was decided as a result of a proper debate in the House that the minimum proportion of signatures needed to be 30%, I would not argue with that. At one point the Bill specified that it would be 15%, and after much discussion the Members in whose names the amendment stands decided to raise the figure to 20%. In my view, that is not an issue to get hung up about. Similarly, I certainly do not oppose the concept of a minimum turnout, and would have been willing to include that in an amendment, following proper discussion. It is the principle that is important. It was an error for the Government to remove even a half-hearted attempt at handing power back to local people, and it is a mistake that I think people will remember.

I will not press the amendment to a vote, because clearly it does not enjoy overwhelming support, and Front Benchers on both sides of the House have said that they will whip against it. If I pressed it to a Division, I would not expect to achieve anything other than wasting people’s time. However, I hope that the Government will think again and recognise that they have an opportunity to show that when they talk about localism they actually mean it, and that they trust people to make decisions that affect their own lives. I hope that they will recognise, as the Minister has done many times, that no one is better placed to decide the nature, shape, form and future of an area than the people who live in it. I urge the Government to think again.

7.45 pm

Graham Jones (Hyndburn) (Lab): I want to return briefly to the local code of conduct and how it will work. We all know that the Standards Board is going—and

7 Nov 2011 : Column 97

I, for one, am not sorry to see it go, but I would like to see something put in its place. We must have some form of security. I think that the Minister failed to answer my question, so I will put it again and give him the opportunity to intervene if he wants to. This legislation establishes neighbourhood forum groups that will shape and influence planning policy. Residents will be drawn almost at random, or it will be the usual people who get involved in community activities who will come forward. Surely they must be accountable in some way, according to some form of standards. They cannot simply operate in a vacuum, in which things can simply happen and then there is no way to hold them accountable for their decisions.

Last week the Department for Communities and Local Government announced the Community First programme, offering £30 million of grants to 597 of the most deprived wards. Here the Government are asking for neighbourhood committees to be set up. In my constituency, Peel ward, one of the most deprived in the country, is to receive £17,000 in each of the next two years as part of the Community First programme. The residents were told last week that they will have to set up a committee to spend what is essentially public money, yet there is no accountability. The Minister is totally unclear about how local authorities will deal not only with elected members in local authorities, but with unelected members who will be involved in some of the decision making that will help to shape public policy.

Andrew Stunell: I wanted to hear the rest of the hon. Gentleman’s point in case I was missing something fundamental, but I was not. I hope that I can return to the point later. I can assure him that there is nothing in the Bill that changes the requirement for any body that receives public money to spend it in a lawful way, and with integrity. If it is a charity or community group, the Charity Commission and other regulatory bodies will kick in. He is erecting a substantial mountain out of a very small molehill.

Graham Jones: I thank the Minister for his intervention, but I think that his answer is more smoke and mirrors. I am asking where the judicial framework is, and his answer is that there is none, but there is a legal framework, within which we all operate. If that is the case, why do we have standards in public life? It is because that is a judicial element that governs and reflects the service that we all give—but we encounter problems when people make decisions that are not in the best public interest, but in their own personal or prejudicial interests.

Robert Neill: Is the hon. Gentleman suggesting that every voluntary organisation that receives public funding should be subject to a standards regime? Surely he would accept that although neighbourhood forums, for example, propose the neighbourhood plan, there are other safeguards, in terms of the referendum, consistency with the local authority’s strategic plan and national policy, and a test of soundness, to deal with such matters. A standards regime would be grossly disproportionate in such cases.

Graham Jones: I am grateful to the Minister for trying to clarify that. Many of the organisations to which the Government give money have robust frameworks, but we are talking about a group of individuals who

7 Nov 2011 : Column 98

might, in the example of Peel ward, live on an ordinary street near me. They are not subject to the controls, charters, rules or regulations of any organisation. They are outside that, and not part of any judicial framework, so I do not think that he is right. I accept that there is a grey area between who we give money to and how far we should hold them to account in public life. None the less, when someone who lives two streets away from me and is not involved in any organisation can get involved in spending £17,000, might misspend it and cannot be held to account, there is definitely a void. I take the Minister’s point, but I am raising a concern that he has failed to answer.

Robert Neill: Surely the hon. Gentleman accepts that the local authority remains the accountable body, and the normal district audit and other regimes apply to it. I appreciate the sincerity of his point, but I earnestly urge him to think again, because he is missing the point, which is not as grave as he might think.

Graham Jones: I appreciate that, but, having a lot of experience in local government, I think that the Minister is missing the point: there is no judicial framework, so somebody can go out and do something, and if there is a complaint by another member of the public about those actions there is nowhere for it to go, so the complaints that we get now could continue. If that is going to happen in planning policy, we will have some problems, so we need a substantive framework and an opportunity for people to bring into public debate the decisions that the individuals on those bodies make.

Further to that point, I am concerned that there is no robust framework for standards, and again I bring local government experience to that point. A lot of vexatious complaints are politically motivated—[Hon. Members: “Yes!”] I hear the cheers from Government Members; I do not know where such complaints are coming from, but they certainly did not come from the Labour side in my local authority. Regardless of that, those who have worked in local authorities know that many complaints are politically motivated, and they need to be removed. That is a serious and substantive point, and simply having a non-elected chair but an elected committee is not acceptable. When we look around local government, we find that even that has failed. There needs to be an unelected, unaccountable—sorry, accountable—[ Interruption. ] I hope the record is corrected. There needs to be an accountable but non-elected body, because that, more than anything, will stop a lot of vexatious complaints. The Government would be doing themselves a favour if they introduced such a framework into local government.

Alec Shelbrooke: I shall comment on a couple of amendments, but, starting with amendment 15 and following the remarks of the hon. Member for Hyndburn (Graham Jones) on the Standards Board, I was a councillor for six years, from 2004 to 2010, and once during that time I was taken to the Standards Board but found not really to have done anything wrong. The local authority dealt with the matter internally, but the person who brought it did not like the decision and tried to take it to appeal, and that is the point: it was about a planning issue.

7 Nov 2011 : Column 99

Councillors stood in the ward I represented in Leeds on manifestos saying that they would protect certain characteristics of villages, and, when a planning application was made that totally undermined that, they wrote a letter of objection. The person who made the planning application took them to the Standards Board, saying that they were making a prejudicial complaint. That person used the board as a bullying tactic against councillors, and it happened time and again.

Nobody in this Chamber would say that people should not expect anything except the highest standards from those in public office. Everybody across the Chamber agrees with that, but the provisions brought in by the Standards Board were taken up by members of the public. Those people wanted to force the issue with a councillor, and they did not just make their life a misery; they cost them, personally and financially, a fortune.

Graham Jones: I was a victim of a vexatious complaint, on a very minor technicality, to the Standards Board. It was politically motivated, and, although I will not say which party chased it, I agree with the hon. Gentleman that such things are very annoying.

Alec Shelbrooke: I am most grateful to the hon. Gentleman, who makes my point. The complaint against him was politically motivated, whereas the one against me was made by somebody who was trying to get a particular decision on a planning issue and, effectively, trying to bully councillors not to get involved. There were several such cases, and whether someone has such politically motivated Standards Board cases, or whether the case comes from a slightly different angle, depends on which part of an authority they represent and the biggest issues there.

I do not want to get into which party takes the most people to the Standards Board, but I feel that the Labour party has been slightly unfair on our coalition colleagues. In the city of Leeds, Labour councillors formed a queue around the block to take others to the Standards Board. Indeed, one Labour councillor in Leeds, whom I am to going to name in the Chamber, took many people to the board over things that he considered to be a problem when Labour was in opposition, but now his party is in power and he is still not getting the information he wants, he is still pursuing the complaints. Even his own leadership say that they cannot keep control of him.

Do not get me wrong: the mindset behind establishing the Standards Board was correct. Credit should go to the previous Government for setting it up to demand the highest standards, but in reality and in practice that is not how it has worked, and it has become a useless tool that stops people writing in a manifesto what policies they would like to pursue. The board has been twisted and manipulated.

The former Mayor of London was taken to the Standards Board over a comment he made, and luckily he received the ruling that it had been made in his personal and private life, but what ruling was given to us councillors? It stated, “If someone comes up to you in the pub, you must say, ‘I am sorry, I am not a councillor.’” Come on, let us get real. Either we engage

7 Nov 2011 : Column 100

with our public, talk to people and understand things, or we become part of a robotic system in which the public are further distanced from us.

I guess that the vast majority of Members engage locally with their constituents, going down the pub, talking to people in the high street, getting information from what people feel is happening on the street and talking to them about it. Local councillors cannot do that any more, because unless they declare at the outset, “I am not discussing this with you, come to my surgery at this time,” they run a risk, and that represents a big disconnect from and disservice to the public. That was an unintended consequence of the Livingstone case, but whether we agree with his comments or not, that is not the issue, because they occurred in his private life, and the case should never have gone to the Standards Board.

We do have protection of the public: it is called the ballot box. That was always my argument as a councillor when it was said that someone was going to the Standards Board. There is a ballot box, whereby people can be voted in or out, and if someone were seen to be wholly corrupt it would not matter whether they were in the safest seat in the country, they would be voted out.

Graham Jones: Will the hon. Gentleman give way?

Alec Shelbrooke: I will give way. I think I know what is coming.

Graham Jones: I agree with the thrust of what the hon. Gentleman says, and I do not want to be controversial, but let us take the Community First programme in my constituency’s Peel ward, where residents are going to spend public money, or the neighbourhood forums. They are not elected. Where is the ballot box for those people?

Alec Shelbrooke: But there is something called the Serious Fraud Office—the fraud squad—and there is a law of the land, so we do not need to pursue such things through the Standards Board. If people misappropriate public funds, they can be reported to the police and there can be an investigation. Sometimes we double up on legislation to try to say to the public, “Look what we’re doing,” but in reality they have ended up with less influence and power, because things have become bound up in an operation that has not helped at all.

Graham Jones: If my community group decides that it is going to spend money on a project for which it has ownership, or on a project down the road for which there is no ownership within the Community First programme, and it then decides to skew the funding to what suits its needs, not somebody else’s, how does that fit in? That is not illegal, that is not fraud, but it is against accepted standards in public life.

Alec Shelbrooke: I invite the hon. Gentleman to intervene again on me. Who is awarding the grants to those people to spend that money?

Graham Jones: The Government are.

Alec Shelbrooke: Yes, but the money comes from the council, and that is the point: it comes from the local authority to start with.

7 Nov 2011 : Column 101

Graham Jones: It actually comes directly from the Department for Communities and Local Government.

Alec Shelbrooke: Through local communities and local government, projects are being identified—[ Interruption. ] I give way to the Minister.

Andrew Stunell: I wonder whether I may help my hon. Friend by reminding him that any body or organisation that spends public money is subject to the equalities duty, introduced under equalities legislation introduced by this Government earlier this year.

Alec Shelbrooke: I am most grateful to my hon. Friend for assisting me with that line of debate. There are protections in place: there is the law of the land, there is legislation and, when it comes to democratically elected people, there is the ballot box. I do not think it will do any harm to local government to remove the Standards Board and consider other areas, because it has wasted hundreds of thousands—if not millions—of pounds of taxpayers’ money on vexatious, vindictive claims. Beyond that, the board has slowed the process of local government, as well as the service and, indeed, the communications we, as elected Members, would want to have with our public. We need to address that.

8 pm

I shall also speak to amendment 112 proposed by my hon. Friend the Member for Richmond Park (Zac Goldsmith). Again, I want to focus on the facts. I am grateful to the shadow Minister for her comments and for the opportunity to intervene on the Minister earlier. If we have a binding referendum, we do not have control over what someone may be made to do. We can bring in threshold limits, but there is something called the internet, which makes it easy for people to move forward with ideas and get to thresholds. A relatively low number of people could then go and vote, and we would be faced with some very nasty legislation.

Zac Goldsmith: I have a brief question. If the amendment is pressed to a vote, would my hon. Friend support it if it included turn-out thresholds, not just trigger-mechanism thresholds?

Alec Shelbrooke: I would not support the amendment for the reasons my hon. Friend just mentioned, because if someone wants to have a referendum that is binding on any subject, they leave themselves open to several problems. My hon. Friend’s amendment contains provisions that he feels would deal with that. However, in this place, we must be very careful about the legislation we introduce and the language we use. We may try to foresee the instances that may occur and try to stop some unsavoury referendums taking place, but once the legislation saying that it is binding is in place, someone somewhere will find a way around it.

We live in heightened times of tension. That is inevitable in an economic downturn. We go through periods when there is a blame culture and it is easy to pick on the weakest person.

If the House will indulge me, I would like to refer to “The Simpsons”. I am sure I am not alone when I say that I am huge fan of “The Simpsons”. Some of the episodes can be particularly cutting. I remember one

7 Nov 2011 : Column 102

episode when some of the characters woke up to find a bear in the front garden and decided that they wanted to introduce a bear tax to keep the bears out. The mayor had a meeting and said, “I want to bring in a bear tax.” Everybody said, “We’re not paying any more tax”, to which the mayor said, “All right. Well, I blame the immigrants.” Everybody cheered and the mayor said, “We’ll have a referendum on it.” As the episode goes on, they have a referendum to kick out the immigrants because they are unhappy about having to pay more tax and there was not enough tax to sort out the bears. Later, the episode highlights the fact that people in their communities, their friends and so on have an immigrant past and are fully integrated. There is a road to Damascus moment for Homer who goes around saying, “This is a terrible referendum. We can’t vote on this.” The result comes in, and there is a 96% vote to get rid of all the immigrants because nobody listens.

Zac Goldsmith: I apologise for intervening again, but my hon. Friend’s argument is exactly an argument in favour of democracy and referendums. If an unattractive proposition is made, people’s gut reaction may be to take the least attractive option. However, after debate and discussion—just as Homer Simpson proved to my hon. Friend in his youth—the right decision is normally reached. There are examples of that happening. In Switzerland, there was recently a vote on a motion that would have made migration to that country almost impossible. All the pundits and pollsters said the proposal would be overwhelmingly accepted; in fact, it was rejected by two to one as a result of the type of discussions prompted by the referendum. I say to my hon. Friend: please do not fear democracy in the way so many of our colleagues here do.

Alec Shelbrooke: It is not democracy I fear; it is people who may not be fully informed going to the ballot box. Let us not forget that the Third Reich was elected.

In conclusion, there is a place for referendums, and the balance in the Bill is about right. However, referendums should not be binding, which could open things up. It is perhaps sometimes hon. Members’ responsibility not to adopt the position we would take ourselves, but to consider what is best overall to protect the people from those who would seek to abuse and twist a system, as, indeed, happened with the Standards Board.

Annette Brooke (Mid Dorset and North Poole) (LD): It is a privilege to follow that interesting contribution from the hon. Member for Elmet and Rothwell (Alec Shelbrooke). I mean that; his contribution was very interesting.

I welcome the contributions made by noble Members in the other place, which have been exemplary. There has been working together, cross-party work and working among the Cross Benchers. Ministers in the other place have carried forward issues raised in Committee in this place. Therefore, I am not sure why there is so much criticism of the amendments. During consideration of the Bill, there has been co-operation with the Local Government Association. This is perhaps more relevant to the next string of amendments, but I would like to put on the record the fact that I have recently become vice-president of the Local Government Association.

7 Nov 2011 : Column 103

I welcome the Government amendments because, for the most part, they will extend local decision making and they are all steps in the right direction. Restrictions on area committees will be removed and councils will be able to choose what sort of structure they operate under and when they change structure. I was a councillor when cabinet structures were imposed by a Labour Government. There is also the timing of when a vote on all-out local elections may be held, if that is the choice of the local authority. I welcome the abolition of the concept of shadow mayors, because that was certainly not the best example of local decision making.

We have said much tonight about the standards reforms. They are possibly the most important matter to discuss on this string of amendments. It seems that all hon. Members recognise that reform was necessary. Sadly, I think it would be true to say that hon. Members of all political parties have probably engaged in vexatious complaints, so it should not be only my party that is the thrust of such comments. We need to recognise that, unfortunately, the set-up—the nature of the beast—meant that vexatious complaints would occur.

When the Bill was introduced, it was a reaction to a great need for reform and it moved the pendulum. As often happens, it probably moved it too far. The other place has pulled that pendulum back and has achieved a very interesting balance. There has certainly been much discussion on the matter. At the back of my mind, I feel that we should be prepared to review how things are working. Obviously, we do not have such a provision before us today, but it would be useful to know how the new system is working out in, for example, two years’ time. It might be necessary to revisit the system. None of us has a crystal ball and can see how well the new system might work, but this is definitely the right type of reform. It is important to get a balance and, as much as possible, make the measure local. Nevertheless, there need to be important protections.

I therefore heartily welcome all the Government amendments in this string. I am afraid that I will not support the amendment of the hon. Member for Richmond Park (Zac Goldsmith). His passion for increasing local democracy is very important, but there are issues with local referendums, not least the fact that they could lead to conflicts and abuse. The amendment clearly has a number of technical deficiencies and therefore could not be considered anyway.

Mark Reckless (Rochester and Strood) (Con): I shall address my remarks to the amendments relating to referendums—Lords amendment 112 and the excellent counter-amendment tabled by my hon. Friend the Member for Richmond Park (Zac Goldsmith)—and to the Minister’s remarks about council tax referendums.

It occurs to me to wonder how our counterparts in the United States Congress or the German Bundestag might look at our debate. It is about the Localism Bill, yet we seek to prescribe almost every last detail of how and when a locality might consult its people on an issue—whether that consultation should be binding or non-binding, how far it extends, and what exactly should be the trigger of signatures or the turn-out required. An alternative way of doing this, even if there were certain

7 Nov 2011 : Column 104

minimums, would be to allow localities themselves to experiment on what works best for them and to consult their residents as they wish.

I agree with the Government that the Bill introduces an improvement—at least a small one—in relation to a council tax referendum, in that when a local council comes up with a proposal for a level of council tax, it is somewhat better that central Government might require a referendum on that level rather than merely disagreeing with it and putting in place one that central Government happen to prefer. The local authority is the single body that is setting the council tax, then central Government come in with a successiveness tax test, and then there has to be a referendum.

I am concerned about how the Bill interacts with the Police Reform and Social Responsibility Act 2011. The way in which the police precept is set has some very special aspects relative to other local government precepts. The first of these is that the police precept is a pretty small proportion of the overall council tax, so setting a percentage increase above which it is required to have a local referendum acts as a far greater disincentive to placing a precept above that than it does for local government, because the proportionate cost of having a referendum for the police precept is far higher—perhaps up to 2% of the police budget. That makes it extraordinarily difficult for a police body to attempt to go beyond what central Government have set as that trigger.

Overall, I am concerned that setting these referendum requirements undermines the incentive to vote for local politicians who want to stand on a lower-tax basis. If central Government are in any case providing an automatic safeguard so that even if there is an enormously left-wing council that wants to push up the council tax by a huge amount, that reduces the incentive to vote for politicians who believe in lower taxes.

Graham Jones: I remind the hon. Gentleman that my left-wing Labour council is setting a 0% council tax level for the forthcoming year.

Mark Reckless: The hon. Gentleman’s Labour council, like every other council in the country, has set a 0% council tax level because this Government, who believe in localism, have come in with an offer they cannot refuse.

I was a councillor for four years, and I am afraid that such measures do not just reduce the incentive to vote for parties of the centre right: it sometimes leads to good Conservatives taking offsetting measures to give themselves greater scope for freedom from central Government. My own council of Medway had virtually the lowest unitary tax in the country outside the Scilly Isles, yet when we attempted to put in a tax increase that was very slightly above the standard percentage cap that was set, we were not designated but put under the process whereby action would be taken against us the following year if we did not pull our socks up. In fact, our increase was far lower, in absolute terms, than increases of similarly sized councils elsewhere.

The problem is the fear of being capped—of not knowing what the level will be next year—and possibly even the fear of being forced to have very expensive referendums with very embarrassing results for the local politicians, particularly if they do not succeed, and for which their locality has to pay for in any event. That

7 Nov 2011 : Column 105

may lead some councils, even good Conservative ones, to put up council tax by more than they otherwise would in a particular year so that they have a higher base and there is less concern that they might get capped in a future year in needing to put through a substantive increase.

Alec Shelbrooke: Does my hon. Friend think it is fair that the Government can impose a cap and say, “That’s it—you’re not raising it”, as in his fine example from Medway? Would it not be better to take that to the people and say, “Do you want to have this rise in council tax which we believe is above a cap?”, when he could argue exactly the case he has argued for Medway?

8.15 pm

Mark Reckless: As I said, I believe that in this respect the Bill is a marginal improvement on what we had before. Let us consider the idea that the federal Governments in the US or Germany would look at each state, determine what the level is—indeed, the same level for all states—and say, “If you want to raise your property tax by more than that, you have to have this referendum, and this is the exact way in which we specify that it has to be run.” By comparison, we seem to have an extraordinarily centralised state, and I am disappointed that the tiny steps in the Bill have only a very little impact on that.

In the policing universe, the Bill is not just a little bit of progress but a step back. The significant difference is that there is not a single body making the decision, as with a local council within the referendum protection; we are setting up a special local body, a police and crime panel, that will have scrutiny, oversight and an overview of the directly elected commissioner. We said in the coalition agreement that the elected police and crime commissioner

“will be subject to strict checks and balances by locally elected representatives.”

We were then told—I questioned the Minister for Policing and Criminal Justice about this earlier—that the panel

“will have a power to trigger a referendum on the policing precept recommended by the Commissioner.”

The Minister said that he disagreed with the premise of my question, which was in fact the premise in the White Paper that the Home Office published in July last year, “Policing in the 21st century”, which said that the police and crime panel will have this power. However, the Bill, which provides for these referendums, has no provision to allow the police and crime panel to trigger such a referendum, and the powers appear to have been taken by the Secretary of State, despite the coalition agreement and what was promised in the White Paper last year.

When the Minister spoke about this on 30 March, it seemed that his officials had not properly explained to him his own Bill. He said that

“the police and crime commissioner will set the precept but a referendum will be triggered. The”

police and crime

“panel will not be able to prevent that, but it will be able to propose an alternative precept with accompanying reasons that will have to be published. The public will then have to decide—having both sides of the story.”—[Official Report, 30 March 2011; Vol. 526, c. 433.]

That suggests that the referendum was going to be between the commissioner’s precept and an alternative proposed by the panel. That is what we said would

7 Nov 2011 : Column 106

happen, but unfortunately the provisions of the Bill do not allow it to happen. In the case of the police precept, we are bringing in this third body—the Secretary of State. The Secretary of State, not the local panel, has the power to trigger a referendum. That is a highly regressive step that will prevent the elected police and crime commissioner from establishing a responsible relationship with his chief constable—perhaps being able to get him more budget and, in return, getting different priorities for policing. They will always be looking over their shoulder to the Secretary of State, who is giving a standard rise that they cannot go above without the risk of a local referendum that would cost perhaps 2% of the council tax, which they would have to pay even if they won. This will have a chilling effect on our proposals for police accountability.

I am very disappointed, because in 2005 I wrote a book called “Direct Democracy” for which I had four co-authors—my right hon. Friends the Members for Tunbridge Wells (Greg Clark) and for Arundel and South Downs (Nick Herbert), my hon. Friend the Member for Clacton (Mr Carswell), and Daniel Hannan, who is now an MEP. In that, we called for direct democracy and the devolution of powers, and, in particular, an elected person in charge of overseeing the police who would have local powers. We still believed that in the coalition agreement and we still believed it in last year’s White Paper when we said that the panel would be able to trigger a referendum. It is terribly disappointing that this Bill fails to provide for that and instead hugs the power to the Secretary of State.

Bob Blackman: I want to make three points. The first is about the codes of conduct and the abolition of the Standards Board. I, like many local councillors at the time, was the subject of numerous referrals to the Standards Board. The first that anyone heard of it was when they received the letter from the Standards Board saying that it had decided to take no further action on the vexatious complaint. It could take many months and, in certain cases, years before a complaint was determined one way or the other. In cases that were chosen for investigation, the investigations could take the length of a councillor’s term of office before it was decided whether they were guilty.

I have concerns about what is being proposed. I completely agree with having a national standard for the codes of conduct that local authorities should impose. There should be national standards and everybody should abide by them, even though they will be monitored at a local level. There is a key concern about how valid complaints will be investigated. I have a concern about elected councillors overseeing complaints about other elected councillors and about how politicians might seek to gain party political advantage over one another through standards committees. The concept of having independent individuals in charge is of course welcome. However, the risk is whether such people can be found for every local authority and whether they will be of a suitable standard to make the system work. I have concerns but, broadly speaking, the Government’s amendments should be welcomed.

My second point touches on the amendment tabled by my hon. Friend the Member for Richmond Park (Zac Goldsmith) on referendums. The key concern is about the difference between a local authority consulting

7 Nov 2011 : Column 107

the people it serves and it being bound by a referendum, possibly on a single proposition. I do not think that local authorities in this country consult properly. Instead, they notify the public that they will do something to them, regardless of what they think of it.

I will give an example from a local authority on which I used to sit. The London borough of Brent has decided to close half its libraries. The council put it to the public and 82% of people said that they did not like it. The answer from the council was, “We’re still going to do it.” That was the result of a consultation. The idea was overwhelmingly rejected, but the council are progressing with it. That would be a case, like my hon. Friend the Member for Richmond Park described, in which a referendum would undoubtedly go against what the local authority wishes to do. However, that does not change the fact that local authorities are elected to serve and to make decisions. They should do so even if those decisions are not liked by the people whom they represent.

I will also cite the case of Bristol, which several years ago conducted a referendum on the level of council tax to be charged. The council put four options to the people of Bristol: a reduction in council tax with a drastic reduction in services; a marginal reduction in council tax with a marginal reduction in services; a stand-still option; or the council’s preferred option of an increase in council tax and keeping services at the same level. Lo and behold, the people voted for a substantial reduction in council tax and a substantial reduction in services—not quite what was expected. One has to be careful in taking on a referendum. For the purposes that I have described, a referendum is clearly not the route to follow.

Equally, as I have said in interventions, if we had referendums with a trigger of 20% or 30% of people signing a petition, that would not necessarily work if the turnout for such a referendum would be far too low. That would be ridiculous and would impose on local authorities an unfair basis for making decisions. As we all know, it is easy to get people to sign a petition, but it is another thing to get them to vote. Clearly there is a role for petitions in consultations, but using them to trigger referendums is difficult.

My third point relates to the position on council tax. I have always been an advocate for councils being free to set council tax at the level they choose. If councillors choose to impose a swingeing increase in council tax, the public have the right to vote them out at the next election. We should trust the people to do that. I have always been stringently opposed to the capping of council tax or previous forms of local taxation, because it takes away the decision-making powers of local authorities. Councils should not have referendums held over their heads on council tax, but people should have the power of the ballot box to remove councillors who vote for a swingeing increase. That is the right way to protect people.

Most local authorities in this country have their councillors elected by thirds, so the local electorate has the power every year to remove councils and councillors who choose to vote for large increases in council tax. In unitary authorities, there are all-out elections, which means that councillors, having been safely elected, can take decisions at the beginning of their cycle to get their

7 Nov 2011 : Column 108

betrayal out of the way before they face the threat of the ballot box three or four years later. Perhaps we need to re-examine the governance of local authorities and ask whether they should face more frequent local elections, rather than having periodic elections when the decisions made by the local electorate are often more about the national Government of the day than the decisions that are made at a local level.

Having spoken about those three key issues, I will conclude my remarks. I warmly welcome the amendments proposed by the Government.

Martin Vickers (Cleethorpes) (Con): I rise to speak about the referendum issue. Members will note that I am one of the signatories to the amendment tabled by my hon. Friend the Member for Richmond Park (Zac Goldsmith).

I support the principle of referendums and believe that they are a natural development of our democratic process. Having spent many years as a local councillor fighting against centralisation, I warmly welcome the moves that the Government are making, but they could go further. To give an example, I sponsored and secured a referendum in one ward of my unitary authority to abolish a town council. I did so because there was clear opposition to a council that was charging in excess of £100 per household for band A properties. There was an overwhelming vote to abolish that council. Unfortunately, the referendum was not binding, because it was held under the Local Government Act 2003, to which the Minister referred. The unitary council of North East Lincolnshire subsequently overturned the referendum result.

Andrew Percy (Brigg and Goole) (Con): Outrageous.

Martin Vickers: I agree, it was outrageous that a decision of the electorate that had been arrived at democratically through the ballot box should be overturned by a local authority. Having granted the referendum initially, it should have reversed the result, if that was its wish, only through another referendum.

Andrew Percy: To assist my hon. Friend in his point, I add that in my constituency the people of Old Goole are seeking to separate from Goole and form their own parish council. There is a huge argument going on, and the one way in which it could be resolved is through a binding referendum.

Martin Vickers: Absolutely. My hon. Friend makes an extremely valid point, and I am sure Members of all parties can think of such examples.

The hon. Member for Warrington North (Helen Jones) made a valid point about premises that cater for people with mental health difficulties. I accept that local authorities have very difficult decisions to make in such cases. I can recall there being such a decision in my ward six or seven years ago, and if a referendum had been taken in the street in question there would certainly have been an overwhelming vote against such an establishment. However, it would be open to local authorities, as it is under the 2003 Act, to determine the arrangements for a referendum —whether it should be held in a ward or within the authority as a whole. There are ways of broadening the electoral base to cover such circumstances.

7 Nov 2011 : Column 109

8.30 pm

My hon. Friend the Member for Richmond Park made good points about turnouts. I accept that there should be an increase to 20% in the proportion of signatures needed to trigger a referendum, which would be a way of weeding out the frivolous requests. So would the other criteria that would be used to determine whether a referendum should go forward.

My hon. Friend’s amendment is an obvious move forward. We argue about referendums—only a couple of weeks ago we debated whether we should have one at national level. They are a natural development of the democratic process if we are to give our voters really meaningful power.

Alec Shelbrooke: I am listening very carefully to my hon. Friend’s points. I think Members of all parties have been guilty of trying to explain why they do not think particular referendums, on serious issues, should be binding.

If there were a referendum suggesting that councillors should not receive any money whatever for their work, I believe it would find popular support, yet councillors work hard and need some sort of recompense. If that referendum were binding, how would councillors deal with that situation?

Martin Vickers: My hon. Friend makes a very interesting point, and my response is obvious—I am arguing in favour of binding referendums, so I believe that such a referendum would have to be binding. There could be turnout—

Andrew Percy: Thresholds.

Martin Vickers: That is the word I am looking for; I thank my hon. Friend. Such referendums could therefore easily be accommodated.

Members should appreciate that there is growing apathy and disenchantment with our whole political process. The Government have tried to respond to that through measures in the Bill, through e-petitions and so on, but the only way we can really give people power is by giving them a clear-cut vote on issues. Although my hon. Friend the Member for Richmond Park said that he would not press his amendment, I hope that it will spur the Government on to further developments in the months and years to come.

John McDonnell (Hayes and Harlington) (Lab): I apologise to the House for coming so late to the debate. I am afraid I have been chairing a meeting elsewhere. I regret the fact that the hon. Member for Richmond Park (Zac Goldsmith) is not in his place now, but of course he has assiduously attended the rest of the debate. I wanted to ask him a couple of questions, but maybe other sponsors of his amendment will be able to intervene to clarify matters.

I can see the attraction of holding referendums on issues that are politically significant in an area, so that local authorities can seek guidance. Even if they were not binding, they would at least create a debate, and the local authority could take into account the views expressed.

7 Nov 2011 : Column 110

Proposed subsection (5) of the hon. Gentleman’s amendment sets out the local authorities that it would apply to, including

“the Common Council of the City of London in its capacity as a local authority”.

I wish to ask the amendment’s supporters whether, under the regulations and rules to be laid before Parliament designing the mechanisms and ground rules for referendums, as mentioned in proposed subsection (11), universal suffrage would apply in the case of the common council of the City of London. In other words, will it be one person, one vote, or will businesses be able to purchase votes and outvote local residents, as they currently can? Referendums could enhance local democracy, but I do not want us to enhance the power of businesses to control the lives of residents with the City of London corporation area.

Martin Vickers: The hon. Gentleman makes a valid point. My view—I can speak only for myself—is that democracy means one person, one vote, and that that would apply whether in the City of London or elsewhere.

John McDonnell: That is incredibly helpful, because although amendment (a) might not be pressed to a vote, the House in due course—fairly rapidly—will need to look at how undemocratic the City of London corporation actually is.

There are numerous examples of when a referendum in the City of London on the basis of universal suffrage—one person, one vote—would enable residents to address some of the abuses of the system that take place currently. If people want an example of those abuses, they should read the front page of The Guardian today. The City of London corporation has applied City cash—anything up to £100 million in local authority funding that is never audited or publicised; that completely lacks any form of transparency to local residents or the rest of the electorate in both the corporation area or elsewhere; and that is never investigated—to enhance a property development on the edge of the corporation area in Hackney. That also enhances the value of properties owned by Hammerson, which employs the lord mayor of the City of London corporation. A referendum in the City of London area could valuably take place on that matter. Residents could vote on whether it is appropriate for the City of London to enter into developments of that sort.

The Hackney example is not the only one; there was the Spitalfields development and opposition from the Barbican Association. The City of London corporation has ridden roughshod over the wishes of local residents to enhance the profits of businesses which employ council men on the corporation. If the hon. Member for Richmond Park is suggesting that the rules and regulations made under proposed subsection (11) of amendment (a) would ensure universal suffrage in the City of London corporation, it would be a major breakthrough for democracy in London.

I hope that the amendment is pressed to a Division if we gain assurances from all who have tabled the amendment that that is what it means. Even if we cannot use the amendment to prise open democracy in the City of London corporation, there will be other opportunities. Hon. Members from all parties should try to place this matter firmly on the agenda again, because allowing

7 Nov 2011 : Column 111

businesses to have the vote and to ride roughshod over the wishes of local residents in the corporation area is 21st-century abuse of power and democracy.

Andrew Stunell: We have had an interesting and wide-ranging debate, with plenty of interest added by Members’ personal experiences.

I appreciate the decision of my hon. Friend the Member for Richmond Park (Zac Goldsmith) not to press amendment (a) to a Division. He will have seen in the course of the debate that the force is not with him, although he has raised a number of interesting aspects, which I am sure he will ensure are kept in front of the House in the years to come.

Other hon. Members have raised a wide range of issues, and perhaps the most persistent raiser of issues was the hon. Member for Hyndburn (Graham Jones), who is not in the Chamber. This part of the Bill applies to local authorities; it does not attempt, and it never did attempt, to regulate community groups, neighbourhood forums or other non-governmental organisations. However, I remind the House that there is still a requirement on anybody spending public money to give a proper account of that spending and to be held accountable, if necessary in the courts, should they fail to do so. On the wider duty on anybody spending public money, the introduction of the equalities duty provides a substantial safeguard and remedy for those who feel hard done by as a consequence. I hope that the House will accept that as the right basis on which to proceed.

My hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) told us a shaggy bear story, but hidden behind it were some important observations, one of which was about the present system’s extensive capacity for creating trouble for council members going about their lawful business and trying to serve their community. He referred to a case in which essentially he was being bullied by a developer because of views he had expressed on a planning application. I am happy to tell him that, quite apart from our abolition of the Standards Board, our abolition of the pre-determination legislation, which is also right at the front of the Bill, will put in place a safeguard in such situations.

My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) drew attention to the hard work done in the House of Lords, not least by our Liberal Democrat colleagues. Government Members acknowledge the fruitful dialogue in the Lords, which I believe has produced a much-improved Bill. She suggested that it might be appropriate for us to return to the standards regime and monitor its performance after a couple of years. More broadly, the Government have said that they want to monitor the impact of legislation as time goes by, and I hope that she will understand that the House always has the capacity to return to matters. No doubt the Select Committee and others will keep an eye not only on that provision in the Bill, but on all the others.

I heard the contribution from my hon. Friend the Member for Rochester and Strood (Mark Reckless), particularly on police and police commissioners. My right hon. Friend the Minister of State, who has responsibility for decentralisation, has recently written to my hon. Friend about that matter, and I know that

7 Nov 2011 : Column 112

the Minister for Policing and Criminal Justice has also offered to liaise with him. I assume that he will want to take up that offer. He made several observations about what would happen in the United States, but I have reason to suspect that he is not in favour of introducing a federal system in the United Kingdom. In default of a federal system, we have to manage our own resources of governance.

On council tax referendums, I made the point in my introductory remarks that we are replacing a top-down limitation on what councils can spend and raise from the council tax with a process controlled by the electorate—the ones who pay for it—which is how local accountability is supposed to work in our democratic system. As those who did an A-level in this area will know, that is what we are all taught happens, but what has not happened for many years. We are changing a top-down financial control system to a bottom-up control system. In the eyes of my hon. Friend the Member for Rochester and Strood, that might not be perfect, but I hope that he would accept that it is more than just a small notional improvement.

Mark Reckless: It might be that for local authorities we are just about doing as the Minister states, but it is not the case for the area of policing that I raised. The letter that I received from my right hon. Friend the Minister of State was entirely unsatisfactory, and the meeting with my right hon. Friend the Minister for Policing and Criminal Justice has not happened. Importing the Localism Bill into the police framework makes a complete dog’s breakfast of the precept setting and contradicts the coalition agreement and last year’s “Policing in the 21st Century” White Paper.

Andrew Stunell: I am disappointed to hear my hon. Friend say that. Local people have as much right to take a view on excessive police precept increases as they do on increases in any other sector of local government. I believe that the provisions we have are right. I hope that he is not spurning the offer of a meeting my right hon. Friend the Minister for Policing and Criminal Justice, because he might find it more productive than he evidently fears it would be.

8.45 pm

A number of other hon. Members contributed to the debate, including my hon. Friend the Member for Harrow East (Bob Blackman), who eloquently pointed out that he, too, had been the victim of a vexatious complaint. He urged the Government to impose no limits at all on council tax, which should depend entirely on the views of councillors. That suggests that he perhaps does not recall that in earlier days that was the case. What we have is a system of accountability for financial decision making that is a huge improvement on the current top-down version, and one that I would ask him to observe in practice over the next few years.

My hon. Friend the Member for Cleethorpes (Martin Vickers) supported the general thread of amendment (a), standing in the name of my hon. Friend the Member for Richmond Park, but as I think we have agreed, that is a matter for a different day.

With his customary skill, the hon. Member for Hayes and Harlington (John McDonnell) found a way of introducing a completely different topic to the debate—a

7 Nov 2011 : Column 113

topic that I have no doubt he will bring back to the House on many future occasions, albeit perhaps in more propitious circumstances.

That brings me to the remarks of the hon. Member for Warrington North (Helen Jones). I have to say to the House that there is some history here, because in times long gone, she and I were both members of Chester city council. I therefore know that many of her remarks were made with her tongue firmly in her cheek, as they certainly were in past days too. I just wonder whether there were two missing words from what she said—those two words were “thank you”—because her entire speech consisted of agreeing that the amendments that we are discussing are exactly the right ones to make and great improvements to the Bill.

I notice that the hon. Lady picked out my Liberal Democrat colleagues as being particularly egregious when it comes to making complaints. Indeed, a number of other Members in this debate have considered which political party is the worst. Let me tell the House that 80% of complaints to the Standards Board come from parish councils, on which, by and large, there is no political party representation. That, of course, is part of the scandal of the whole process. When I recently spoke at the annual conference of the parish clerks association—[ Laughter . ]I have become accustomed to a more exotic style of life. I put it to those at the conference, and they agreed, that had the introduction of the regime been beneficial, the behaviour of parish councils should have improved. What actually happened was a rising tide of complaints and no evidence at all that the regime improved standards. The aim of having a standards board was to improve standards, not simply to generate complaints.

I got a hint from the hon. Lady, and also from her hon. Friend the Member for Hyndburn (Graham Jones), that if they had their way, they would return to a centrally determined quango doing exactly the same thing as the Standards Board. I have to say that hankering after that quango is not the way ahead. If she is concerned about the Bill not being localist enough, she has a slightly peculiar way of showing it.

The hon. Lady also mentioned pay accountability and transparency, and I think that she was welcoming what we have done. I want to pick up one of the points that she made. She said that she regretted that councils would not be compelled to pass the same duty on to outside organisations that were in receipt of council funding to deliver their services. I must point out to her that the legislation gives them the power to do that if they choose to do so, but it does not compel them to do so. I would just remind her that that is localism. We believe that that is exactly the right balance to ensure that local authorities have a framework in which they must operate, and a framework that they may apply to others who provide services for them.

The hon. Lady also mentioned local non-binding referendums, and she was characteristically generous. May I point out that her suggestion that I might not have survived comes ill from a team that started off with three people in Committee and has now been completely reconfigured, and that she herself is a newcomer to it? Those of us who worked through the Committee and Report stages know the hard work that went in and the efforts that have been made to achieve a better Bill.

The Bill will lift the burden of bureaucracy from councils. It will free them up, the better to serve their local communities. It will give local authorities greater

7 Nov 2011 : Column 114

control over their governance and less unjustifiable meddling by central Government. The changes made in the Lords take the reforms further, strengthen our provisions and sweep away even more of the deadening prescription and regulation that has for far too long constrained local authorities. I commend all the Lords amendments to the House.

Lords amendment 14 agreed to.

Lords amendments 15 to 49 agreed to , with Commons financial privileges waived in respect of Lords amendments 23, 29, 40 and 49 .

Clause 31

Power to require local or public authorities to make payments in respect of certain EU financial sanctions

Greg Clark: I beg to move, That the House agrees with Lords amendment 50.

Mr Deputy Speaker (Mr Lindsay Hoyle): With this it will be convenient to discuss Lords amendments 51 to 94, 227, 228, 230, 234, 241, 244, 246, 247, 250, 252 to 254 and 260.

Greg Clark: The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell) should count himself lucky to have had an invitation from the parish clerks. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) recently spoke at the annual general meeting of the British Toilet Association. I gather that he was flushed with success after making that speech.

I approach the Dispatch Box with some trepidation, because I was about to say that we had achieved “consensus in the House of Lords”, but on the basis of the earlier contribution from the hon. Member for Warrington North (Helen Jones), I fear that all six of those words make her see red. It seems that this Chamber should make a unilateral declaration of independence from the House of Lords, that nothing good can come from there, and that all decisions have to be made here. So I should be careful. As for consensus, the hon. Lady would pick a fight in an empty room. She managed to be warlike on amendments with which she wholeheartedly agreed, so goodness knows how we are going to get on with this group. None the less, we have achieved a degree of consensus and listened to the representations that were made in our own Public Bill Committee and in the other place.

We need to devolve power to local authorities, but there is clearly a risk that when we do, the powers that formerly resided with central Government could expose the nation to the risk of infraction proceedings if they put us in breach of EU obligations. This was a matter that needed to be addressed. It is only fair that council tax payers should not pay for poor behaviour on the part of local authorities in areas other than their own. That was the purpose of introducing the provisions on EU fines. We have had some useful conversations about those.

7 Nov 2011 : Column 115

The concerns raised both in Committee and in the other place were that Ministers should not be the prosecutor, judge, jury—and, in some cases, the co-defendant too—on some of those matters. Thanks to representations from the Local Government Association and the Greater London authority, we have thought carefully and hard about how we can allay some of those concerns.

I would like to put on the record my appreciation of the work of the late Sir Simon Milton, who, in evidence to the Localism Bill Committee when we first met, not only raised concerns about those procedures, but suggested a way forward that would satisfy all our concerns. He went away with his officials and reflected on that. During that process, very sadly, Sir Simon died. All of us in this place greatly regret his passing. We have appreciated his good counsel in these matters over the years. His colleague Daniel Moylan took up the work that Sir Simon had begun, and the fruit of that work is reflected in the Lords amendments, particularly amendments 57, 234 and 246. They provide that there should be a new stage of designation for authorities that might be subject to a fine.

I owe particular thanks to Lord Tope and Lord McKenzie, who introduced amendments to that effect in the other place. What these amendments will require is that Ministers should designate any authority that might be at risk of fines by affirmative order. Such an authority can be identified only if the infraction is the responsibility of the local authority, only if the actions follow its designation, and only in relation to specific infraction cases. There should be no retrospectivity.

The second set of amendments involve the creation of an independent advisory panel before any fines can be recovered from a local authority. Baroness Gardner of Parkes suggested this approach in amendment 58. It would mean a public report being made to the Minister by an independent panel, and it would include a fair apportionment of the culpability of any local authority so fined.

Amendments 59 et al enable the local authority to plan how it would meet the costs, and it is clear through these amendments that the authority’s responsibility for any fines ends when its culpability ends. The fines cannot continue beyond the point at which the authority has corrected its behaviour.

Some minor and technical amendments cover non-devolved matters in devolved areas. They proceed with the full agreement of each of the devolved Administrations. There are mirror powers for Welsh Ministers to pass on fines in their own area.

These changes sent to us by the House of Lords deliver on our commitment to introduce fines for councils only when they are responsible for the United Kingdom being fined, only when they can remedy the situation, and only when they can afford to pay. I commend the Lords amendments to the House.

Helen Jones: I am sorry that the Minister, who we all know is from the soft south and cannot deal with stroppy northern women—

Greg Clark: I am moved to tell the hon. Lady that I was born and bred in Middlesbrough, and that no resident of that fine town has ever been described as being of the soft south.

7 Nov 2011 : Column 116

Helen Jones: I stand corrected. I should have said that the Minister has probably spent too long down in the south. I am now going to surprise him, however, by agreeing with him. The worry about the original measures was that they risked imposing fines on councils for matters over which they had no control. I think that has been corrected in the House of Lords, so we support the amendments.

Lords amendment 50 agreed to , with Commons financial privileges waived.

Lords amendments 51 to 112 agreed to , with Commons financial privileges waived in respect of Lords amendments 54 to 60, 62, 64, 66 to 69, 72 , and 74 to 112 .

Clause 61

Council tax calculations by billing authorities in England

9 pm

Andrew Stunell: I beg to move, That this House agrees with Lords amendment 113.

Mr Deputy Speaker (Mr Lindsay Hoyle): With this it will be convenient to consider Lords amendments 114 to 150, 236, 236, 251, 334 to 349, and 414 to 417.

Andrew Stunell: The amendments focus on the community right to challenge, on assets of community value, and on council tax referendums. As the Minister of State, my right hon. Friend Member for Tunbridge Wells (Greg Clark), said at the beginning of our debates, the fundamental aim of the Bill is to shift power away from central Government and back to local communities. This part of the Bill enables decentralisation to be taken beyond the town hall, so that we can empower communities and enable them to play a bigger part in local life, whether their aim is to improve local services or to save treasured assets. Community rights will give communities more opportunities to do exactly that. When it is successful, it will give them a chance to compete to deliver those services themselves, using local knowledge, expertise and innovation to improve local services.

Assets of community value will hand communities the initiative so that they can identify important local assets such as the old town halls, village shops and pubs that are of value to community life. There are already many good examples across the country of communities coming together to take over local pubs, shops, libraries and community centres. I think that all of us will have seen examples—if not in our constituencies, during visits to other areas. However, there are many more cases in which communities have missed out because they were not aware that a building was up for sale, or because when they discovered that, they lacked the time to make a viable bid. The new right will make it easier for communities to save local assets that are important to them, and will give them the time that they need to prepare a bid to take them when they come up for sale.

We are also replacing central Government capping with council tax referendums. I had intended to say more about that, but I think that I covered it adequately in the last debate.

A wide range of bodies have said that the powers and opportunities that we are providing are long overdue and very welcome. The National Association for Voluntary

7 Nov 2011 : Column 117

and Community Action, the Association of Chief Executives of Voluntary Organisations, the National Council for Voluntary Organisations and Locality have all expressed the view that we are doing the right thing, and during the Bill’s passage Members on both sides of the House have expressed broad support for the principles of our reforms.

However, Members wanted us to go further in some respects, and expressed concern about the details of a number of other aspects of our proposals. As my right hon. Friend said, we have been in listening mode throughout. We have considered the points that have been made not just by Members of the House of Commons, but by peers and interested parties outside. The hon. Members for Birmingham, Erdington (Jack Dromey) and for Worsley and Eccles South (Barbara Keeley) played an important role in the debates that led to the amendments, and in the other place Lord Greaves, Lord Tope, Lord Patel of Bradford and Baroness Hamwee made helpful contributions.

Although we had some excellent debates here in Committee and on Report, we did not think it appropriate to amend the provisions until we had had a chance to consider all the responses to the consultation carefully. That consultation closed in May. Following consideration of the responses and the debates in the House of Lords, we tabled amendments on Report intended to improve the workability of the provisions in the Bill and strengthen their effectiveness.

On the right to challenge, the consultation and debates in both Houses demonstrated that there was an appetite to extend the reforms, but also that there were concerns about the prescription in the Bill. To address the former, amendment 115 makes it clear that the right could be extended to require a Minister or Government Department to consider expressions of interest. To address the latter concern, we have removed a number of delegated powers, particularly those allowing the Secretary of State to prescribe time scales associated with the right to challenge. Instead, under amendments 118 to 121 it will be for local authorities to set their own time scales, while having regard to factors to be set out in guidance.

There are also a number of minor amendments to the right to challenge. I will not detain the House by describing them in detail, but, for example, we have made it clear that the definition of community body in the provisions does not include a public or local authority, and we have ensured that if the right is extended, it would continue to apply only to services provided in England.

There has also been broad support for the principle of giving communities greater opportunities to identify assets of community value and more time to raise the funds. We have also had constructive discussions about improving the practical application of the provisions and avoiding overly detailed rules. I would particularly like to thank Lord Gardiner of Kimble, Lord Cameron of Dillington, Earl Cathcart and Lord Howard of Rising for their contributions to improving these provisions.

We have listened carefully, and amendments 122 to 126 define land of community value based on principal use for social well-being and social interests, including cultural, recreational and sporting interests. Amendments 127 to 130 make it clear that only a voluntary or community body with a local connection may nominate an asset to be listed by a local authority, which will safeguard against vexatious nominations by individuals. We have also improved the workability of these provisions by

7 Nov 2011 : Column 118

exempting certain types of relevant disposal: those where the community is not at risk of losing the asset. Amendments 140 and 144 exempt several types of relevant disposals from the moratorium in the Bill. As a result, the provisions will not cover situations such as where a village shop is to change hands as a going concern and the community will still get the benefit of a shop, nor will they capture a situation where a transfer is made between family members or through inheritance or gifts. Further exempt disposals will be set out in regulations. Most importantly, we have ensured that groups will have enough time to raise funds to buy assets; that was a key concern of community groups.

Amendments 141 to 145 specify that the interim moratorium will be six weeks, the full moratorium will be six months, and the protected period in which a further application cannot be made will be 18 months, starting from the first date. In other words, there will, in effect, be a 12-month moratorium period. We have also reduced the amount of prescription. Amendments 131, 132, 134 and 135 give local authorities greater freedom to decide how to administer and publicise lists of assets of community value in their local area. In summary, these amendments will ensure that the provisions give communities a powerful new tool to preserve assets of community value, while ensuring that we do not create unintended consequences.

These reforms were welcomed by the National Association for Voluntary and Community Action and by the Country Land and Business Association. When both those organisations claim victory, it is clear that we must be doing something right.

Finally, this group also contains a number of smaller technical amendments, which include provision for ensuring that levies made on local authorities by levying bodies are not part of the calculation on whether a council tax increase is excessive, and for ensuring that only residents, and not business voters, in the City of London are entitled to vote in a council tax referendum. I hope that that gives at least a little comfort to the hon. Member for Hayes and Harlington (John McDonnell). Overall, I hope that hon. Members will agree that these amendments significantly improve the Bill and address issues of common concern, and so will agree to them unanimously.

Roberta Blackman-Woods (City of Durham) (Lab): Labour Members broadly support the amendments, which support some of the points made earlier by my hon. Friend the Member for Warrington North (Helen Jones). This whole part of the Bill had to be substantially rewritten following discussions in this Chamber, in Committee and in the other place. Although it purported to give communities more power over their areas, it actually gave a lot more power to the Secretary of State to outline the time scale for local authorities to consider a transfer of community assets and on what those were. We are pleased, therefore, that a definition of land of community value has been put in the Bill and that some of the ridiculously prescriptive powers relating to the community right to bid have been removed or put where they should have been put—with local authorities. We are also pleased that the amendments should enable local authorities to set and publish their own time scales for deciding on community expressions of interest. I hope that that is helpful to them and to the local communities that wish to take over assets.

7 Nov 2011 : Column 119

John McDonnell: I shall be extremely brief. I wholeheartedly welcome this part of the Bill and the amendments proposed, but I would also welcome some advice from the Minister on the time scale for the implementation of the Bill and this bit of it. I shall quickly give a relevant example.

In my constituency, a library has been closed and a new one opened. I did not get everything I wanted, but I congratulate the local authority on opening the new library. For some time, there has been an expectation—indeed, promises have been made by the local authority in the past—that the previous and now redundant library would be handed over for community use. Despite a petition signed by more than 4,000 people urging the local authority to provide this facility for community use in some form, the London borough of Hillingdon is now rushing ahead with its sale. Last week, the authority actually gave itself planning permission for housing, despite the fact that I appeared at the petition hearing with the petition and directly quoted words of wisdom from the Secretary of State. He had cited a library being made redundant as an example of exactly what this Bill is intended to address.

So I ask the Minister about the London borough of Hillingdon’s undue haste to give itself planning permission for housing and to sell the site off to pre-empt the coming into force of this Bill. Will he assure me that something can be done to persuade the authority to listen to the local people and enable us to use this Bill for the purposes for which it was intended: to empower local people in respect of just this sort of asset? I would welcome any assurance that he could give, any advice that he might wish to render to the London borough of Hillingdon and anything that he can say about the importance of the community being listened to on such examples.

Andrew Stunell: I welcome the hon. Member for City of Durham (Roberta Blackman-Woods) to the Front Bench and welcome her welcome for the amendments that we have introduced. I understand that she obviously has to go through the ritual motions of accusing us of U-turns, but what we actually have is a Government who are listening and ready to share their learning with the House. We did not come to the House with a finished product, as my right hon. Friend the Secretary of State made clear from the moment the Bill was produced. I believe that the Bill has been improved at each stage of its progression and has now reached a state of perfection.

9.15 pm

The hon. Member for Hayes and Harlington (John McDonnell) has, as ever, skilfully brought to the House an issue of great importance to him and his constituents. I can tell him that, subject to events tonight, the Bill will go for Royal Assent later in the year and will come into force next year. He will not be surprised to hear that it does not contain any retrospective provisions and I am afraid there is nothing I can say that will make it retrospective. He invites me to join him in criticising the council for its decisions. That is his right and prerogative as a constituency MP and I am pleased that he is doing so but, in the spirit of localism, as a Minister I am bound to say that these are matters for local decision making, although I might have a view about the decision it took.

7 Nov 2011 : Column 120

John McDonnell: May I clarify that I am not enticing the Minister to criticise the local authority? However, there is an issue here. A Bill is coming to its conclusion and will shortly be enacted. Should not true a local authority taking a reasonable decision and taking into account all relevant factors take into account the fact that the Government intend the Bill to be implemented rapidly? Should it not therefore act in the spirit of the Bill?

Andrew Stunell: Perhaps it would be appropriate for the hon. Gentleman to make sure that the report of this exchange in Hansard is drawn to the attention of the council leader.

I can add a little more information about the timetable. The implementation of the rights requires secondary legislation in accordance with the procedures agreed by the House. Affirmative resolution measures require parliamentary time and consultation and we cannot prejudge exactly what the outcome will be. However, preparatory work is well in hand and the ministerial team certainly intend to get all these rights not only on the statute book but make them effective and active in local communities as soon as possible.

Mr Raynsford rose—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I do not think the right hon. Gentleman has been in his seat long. He really ought to think about whether he wants to make this intervention. Is it crucial?

Mr Raynsford indicated assent.

Mr Deputy Speaker: Then I shall allow it.

Mr Raynsford: I am very grateful to the Minister for giving way. He will know that the Government have taken the view, in relation to the next part of the Bill on planning, that their intended policy should be a material consideration for local authorities when assessing planning matters. Would it not be appropriate to do exactly the same in respect of the request of my hon. Friend the Member for Hayes and Harlington (John McDonnell)? Should it not be made clear to the council that the imminent implementation of this measure should be a material consideration when deciding the future of the library?

Andrew Stunell: The right hon. Gentleman is being a little naughty. As he knows, the material consideration is a matter for the courts, not for interpretation by the Government. Of course, it is open to the local authority to take account of forthcoming legislation and, as I am sure the hon. Member for Hayes and Harlington will point out, that might provide an opportunity for it to move ahead of the change just as much as it might incline it to wait for the measure to be implemented. As ever, one should be careful what one wishes for in this place.

Lords a mendment 113 agreed to, with Commons financial privileges waived.

Lords amendments 114 to 150 agreed to, with Commons financial privileges waived in respect of Lords amendments 114, 115, 131, 148 and 150.

7 Nov 2011 : Column 121

Clause 94

Abolition of regional strategies

Greg Clark: I beg to move, That this House agrees with Lords amendment 151.

Mr Deputy Speaker (Mr Lindsay Hoyle): With this it will be convenient to discuss the following:

Lords amendments 152 and 153.

Lords amendment 154, and amendment (a) thereto.

Lords amendments 155 and 156.

Lords amendment 157, and amendment (a) thereto.

Lords amendments 158 to 165, 237, 238, 240, 257, 262, and 350 to 368.

Lords amendment 369, and amendment (a) thereto.

Lords amendment 370, and amendment (a) thereto.

Lords amendment 371 to 382, and 418 to 425.

Greg Clark: Among the areas where centralisation has increased over the years is in the planning system. The regional spatial strategies, whatever their intentions, clearly took power from local communities. We made good progress in Committee in addressing the replacement for regional strategies in dealing with larger than local matters. The Bill introduces more opportunities for neighbourhoods through neighbourhood planning, and brings in compulsory pre-application scrutiny.

As we have worked through, we have established a good deal of common ground. The Committee debate focused on the duty to co-operate. Informed by the Royal Town Planning Institute and discussions across the Front Benches, we listened to the Committee and, as we indicated on Report, made various changes that have been reflected in the Bill as it left the House. We said on Report that the neighbourhood planning section would be amended in the House of Lords. We considered carefully suggestions made from all parts of the House, and the amendments before us today reflect that.

It is important to say that we want to see more planning, not less. We feel that over time the imposition from above has stood in the way of local communities expressing their own vision of the future of their community. That is what we want to give them a greater chance to do. At the heart of that is the need to achieve sustainable development. Section 39 of the Planning and Compulsory Purchase Act 2004 provides a duty on those preparing local plans to do so with the aim of contributing to the achievement of sustainable development.

Amendment 370 extends that principle to neighbourhood planning, with an explicit condition that it should contribute to the achievement of sustainable development. The duty to co-operate will require that public bodies should co-operate effectively on sustainable development. We debated in Committee whether to include the definition of sustainable development on the face of the Bill or whether it should be in guidance. I made a commitment to think seriously about that, which we did. We had various discussions in the other place involving Members on both sides of the House.

Let me say at the outset that there is no issue in principle with the definition proposed by the hon. Member for Birmingham, Erdington (Jack Dromey) and the right hon. Member for Leeds Central (Hilary Benn) in

7 Nov 2011 : Column 122

their amendment (a). It reflects the 2005 sustainable development strategy, which has not been repealed. In evidence not to the Select Committee chaired by the hon. Member for Sheffield South East (Mr Betts), to which I shall be giving evidence later in the week, but to the Environmental Audit Committee I and a DEFRA Minister made it clear that the 2005 strategy remains extant and we have no difficulty with the content of it. Of course, that has been captured in previous guidance—PPS1 in particular—and was updated from the first iteration of the sustainable development strategy in 1999.

There was a serious debate in the other place about whether the best place to reflect the shared view of sustainable development is on the face of the Bill, or whether that should be, as it always has been, in guidance. On Report there was some concern that a statutory definition makes it difficult to capture the full range of aspects of sustainability, which may include but go beyond some of the provisions in the sustainable development strategy. I happen to think, and I have said to the Environmental Audit Committee, that some of the thinking in the natural environment White Paper makes some helpful suggestions that one should be looking for a net gain for nature. It is important to be open to that.

In the other place, Baroness Andrews, the chairman of English Heritage and a recent former planning Minister, made some of the same arguments about heritage. She said:

“I feel strongly that one of the elements that is not in this amendment”—

the amendment before us is similar or even identical to the one that was considered in the other place—

“. . . is including something about our vital cultural and heritage needs, including those of future generations.”

She went on to say that

“one might add, for example, ‘meeting the diverse social, cultural, heritage needs of all people in existing and future communities and promoting well-being and social cohesion and inclusion’.”

The noble Lady said that

“if we are to debate the amendment”,

the Minister should consider whether the definition could be sufficiently flexible to include

“the new elements of the definition.”—[Official Report, House of Lords, 12 October 2011; Vol. 730, c. 1750.]

I cite that as an example of someone who shares our good will on that point and has recent experience in government of planning and of some of the difficulties.

Joan Walley (Stoke-on-Trent North) (Lab): I hear what the Minister says about Baroness Andrews, but the Government’s response to the Environmental Audit Committee’s report stated:

“The Government agrees that we should put the pursuit of sustainable development right at the heart of the planning system’s objectives and operation, and that we should be clear about what this commitment means in practice.”

How can they be clear about that if it is not in the Bill?

Greg Clark: I hope to convince the hon. Lady when I say more on that in a few minutes. As we are considering Lords amendments, I will reflect on the conclusions that were drawn after extensive debates on all these issues in the House of Lords and what its settled view was. Lord Howarth of Newport, a Labour peer, said:

7 Nov 2011 : Column 123

“Like other noble Lords I do not think that it is appropriate to attempt a full definition on the face of primary legislation because… the right place for that is guidance.”—[Official Report, House of Lords, 31 October 2011; Vol. 731, c. 1078.]

The Opposition spokesman, Lords McKenzie of Luton, in summing up, said:

“We accept that definitions are not going to be included in the Bill but I hope that at least we shall be able to get very strong assurances that there will be full definitions in the NPPF.”—[Official Report, House of Lords, 31 October 2011; Vol. 731, c. 1076.]

At the end of the debate, he said that he was happy to withdraw the same amendment because my noble Friend Baroness Hanham had