Draft City of Liverpool (Mayoral Referendum) Order 2012

The Committee consisted of the following Members:

Chair: Philip Davies 

† Barwell, Gavin (Croydon Central) (Con) 

† Blackman-Woods, Roberta (City of Durham) (Lab) 

† Crabb, Stephen (Preseli Pembrokeshire) (Con) 

† Danczuk, Simon (Rochdale) (Lab) 

† Davies, Geraint (Swansea West) (Lab/Co-op) 

† Field, Mr Frank (Birkenhead) (Lab) 

† Harrington, Richard (Watford) (Con) 

† Kirby, Simon (Brighton, Kemptown) (Con) 

Latham, Pauline (Mid Derbyshire) (Con) 

† McVey, Esther (Wirral West) (Con) 

Qureshi, Yasmin (Bolton South East) (Lab) 

† Simpson, David (Upper Bann) (DUP) 

† Spencer, Mr Mark (Sherwood) (Con) 

† Stunell, Andrew (Parliamentary Under-Secretary of State for Communities and Local Government)  

† Swales, Ian (Redcar) (LD) 

† Tami, Mark (Alyn and Deeside) (Lab) 

† Watts, Mr Dave (St Helens North) (Lab) 

† White, Chris (Warwick and Leamington) (Con) 

Annette Toft, Committee Clerk

† attended the Committee

Eleventh Delegated Legislation Committee 

Monday 30 January 2012  

[Philip Davies in the Chair] 

Draft City of Liverpool (Mayoral Referendum) Order 2012 

8 pm 

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell):  I beg to move, 

That the Committee has considered the draft City of Liverpool (Mayoral Referendum) Order 2012. 

It is a pleasure to serve under your chairmanship for the first time, Mr Davies, to consider yet another mayoral referendum statutory instrument. The purpose of the order is to require Liverpool city council to hold a referendum on 3 May on whether it should start to operate a mayor and cabinet executive form of governance —that is to say, have a directly elected mayor. 

As we made clear in our programme for government, the Government are committed to creating directly elected mayors in the 12 largest English cities, subject to confirmatory referendums. Our impact assessment for the cost of the referendum in Liverpool is £140,000. All councils will be able to claim their costs from the Department, and officials will be discussing the details with returning officers from the cities very soon. 

Mr Frank Field (Birkenhead) (Lab):  If, in any of the areas where the Government want to hold mayoral elections, the council votes for a ballot to put up candidates, will there be a need for a referendum? 

Andrew Stunell:  I hope to cover that issue in a minute or two; it was sensible of the right hon. Gentleman to have raised it. 

The order is the next step in fulfilling the Government’s commitment for the city of Liverpool. I shall explain the rationale for our commitment to referendums on directly elected mayors, but first I shall recall the steps that we have taken previously on elected mayors and our approach to ensure that we can achieve the best way forward for our major cities. 

As a first step to delivering the coalition agreement commitment, we included provisions on directly elected mayors in the Localism Bill, which we introduced in December 2010. Those provisions included one introducing the idea that there would be shadow mayors in the cities before any election and one requiring that when a city adopted an elected mayor, it would introduce mayoral management arrangements. Those arrangements were that the city would cease to have a chief executive, the mayor being both the political leader and top executive of the authority. 

During the parliamentary passage of the Bill, the provisions attracted considerable debate and concern. We listened carefully to the arguments about why the

elements of a switch to the mayoral model could give rise to difficulties and hence were not appropriate. On careful reflection, we accepted those arguments and amended the Bill so that there was no longer a question of there being shadow mayors or statutory mayoral management arrangements. Our approach has been to listen carefully to the arguments, deal with the issues raised with an open mind and ensure that we take forward our mayoral agenda in a way that commands the widest degree of support and would best serve the interests of the cities concerned. 

The result is that the Localism Act 2011 contains a provision that enables the Secretary of State to require that in a particular city a referendum be held on whether or not that city has a mayoral form of governance. The order is the seventh order to implement that simple provision. As I have already stated, the Government were committed under the coalition agreement to giving local people in the 12 largest English cities the opportunity to enjoy the benefits of a directly elected mayor for their city. Leicester already has a mayor, following a resolution of the Labour-led council to move to a mayoral form of governance. The people of Leicester elected their first mayor in May 2011. 

At present, we are planning referendums in May in the other 11 cities—Birmingham, Bradford, Bristol, Coventry, Leeds, Liverpool, which we are discussing now, Manchester, Newcastle upon Tyne, Nottingham, Sheffield and Wakefield. Where a referendum vote is in favour, cities will rapidly hold an election for their first mayor. The cities Minister, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), has announced that such elections will be held on 15 November. To answer the right hon. Member for Birkenhead, I should say that it is, of course, open to a council to resolve to hold a mayoral referendum in any case. 

On the city deals that are under negotiation, there has recently been speculation about the relationship between the eight core cities, of which Liverpool is one, and the elected mayors. The Government’s position is clear: where cities want to take on significant new powers and funding streams, they will have to demonstrate strong and accountable leadership, an ambitious agenda for the economic future of their area, effective decision-making structures and private sector involvement and leadership. Cities with directly elected mayors will meet those requirements. 

As the Deputy Prime Minister has made clear, the appropriate governance structure may be different for each city, depending on its individual circumstances. It is important to clarify that no city deal, including Liverpool’s proposal, is contingent on having an elected mayor. Liverpool city council has proposed a package of measures, which includes a commitment to strengthen local government by moving to a mayoral model. The Government are considering that overall package and will respond in due course. I have to tell the right hon. Member for Birkenhead that, at present, I cannot go beyond that. 

Mr Field:  My point was slightly different. We have read press reports not only that the city wants to go ahead but that many candidates have declared themselves. If that is happening, do we need to hold such a referendum? 

Andrew Stunell:  As was demonstrated in Leicester, it is not necessary to hold a referendum if the council resolves to move to the mayoral model, which it can do if a majority of the councillors are in favour. Should a council resolve to do that before a referendum order is made, no referendum is required. 

Mr Dave Watts (St Helens North) (Lab):  I want to be absolutely clear on two points, which I want the Minister to address: first, that the extra resources and powers, which we have read about in our local newspapers, are not connected to the Government’s wish to have a mayor in Liverpool and, secondly, that it is correct that the people of Liverpool or any other town do not necessarily have to be asked whether they want a mayoral system. 

Andrew Stunell:  On the hon. Gentleman’s second point, I draw his attention to Leicester. Last year, the city council resolved to move to a mayoral model before the May 2011 elections. The council having done so, an election for mayor was held at that time. As the hon. Gentleman will know, Sir Peter Soulsby was elected as mayor of that city. That was in accordance with the mechanics set up by the Local Government Act 2000, which was brought into force during the previous Parliament under the auspices of the Labour Government. 

Mr Watts:  Can the people of a city such as Liverpool be clear that this Government’s view is that there is no need to obtain the consent of the voters before changing their democratic system? 

Andrew Stunell:  We have not changed the law that was introduced by the outgoing Labour Government. Section 35 of the 2000 Act had other provisions that could—indeed do—give the Secretary of State the right to require a referendum. In respect of Leicester, any of the other cities that we have been considering are able to take that route should they wish to do so. 

To change the Government’s system requires either a referendum of electors or a resolution of the council, which is of course elected by those electors. 

Geraint Davies (Swansea West) (Lab/Co-op):  Will the Minister advise whether the power is devolved and whether a referendum could happen in Swansea immediately after the council elections this May? 

Andrew Stunell:  I may need to seek advice about the situation in Wales. I believe that matters relating to local government in Wales are devolved and therefore not a matter for this House. In relation to councils in England—district, metropolitan or unitary—they are competent to do so. 

The Chair:  Order. It will help the Committee if we stick to the debate on Liverpool rather than going round the country to debate every other town. 

Andrew Stunell:  Thank you, Mr Davies. 

The value of big cities effectively led by powerful mayors is demonstrated by both domestic and international experience. For example, successive Mayors of London have transformed the capital’s governance and achieved a range of successes, including the London Plan, the

congestion charge and Crossrail. They have also gained high personal profiles. At the international level, Barcelona was transformed through the strong leadership of its powerful executive mayor. It is one of the most prosperous cities in Europe and one of the most popular tourist destinations. 

The Institute for Government and the Centre for Cities highlighted in their joint report that our cities are the heartbeat of the UK economy. That is why the Government believe that it is imperative that each of our major cities, which contribute so much to the economy, have the question of having a mayor put to them. The option to resolve to move to an elected mayor is available to all the cities, as I said, unless their current governance model has been agreed in a referendum; if it has been agreed in a referendum, it can be changed only by a further referendum. 

In our recent mayoral consultation, “What can a mayor do for your city?”, we heard a range of views from Liverpool. That range of views and healthy debate is what this statutory instrument is designed to release. It is about local choice, and it is important that local people have the chance to express their views on what they feel is right for their city. That is exactly what we are allowing to happen through the referendums. 

Simon Danczuk (Rochdale) (Lab):  For clarity, if this legislation is accepted this evening, how much more time does the local authority or council have to pass a resolution without the need for a referendum, and pass a resolution that allows it to have a directly elected mayor without a referendum? 

Andrew Stunell:  If this statutory instrument finds favour with the Committee today, it will be reported to the House. If the House agrees with the report, the Secretary of State will be able to sign the statutory order. It will not come into force until it has been signed. When it has come into force, Liverpool city council will be required to commission the referendum for 3 May. If at any time, up to the time when the Secretary of State signs the statutory instrument, some other course of action is decided on, it would still be open for that other course to be followed. 

Simon Danczuk  rose—  

Andrew Stunell:  If the hon. Gentleman does not mind, I will go on a little. For the sake of completeness, statutory timetables that come into force will provide a count back from the election day to the latest possible start date. I hope that that is a full and comprehensive answer, but if the hon. Gentleman wants to make a further point, I am ready to respond. 

Simon Danczuk  indicated dissent.  

Andrew Stunell:  That is fine. 

As we told the House in concluding the consultation exercise, the range of comments received reinforced the Government’s view that we should have a bespoke approach to powers in the cities. When my right hon. Friends the Deputy Prime Minister and the cities Minister launched the initiative in the core cities, that was exactly the route undertaken. 

Geraint Davies:  I am slightly unclear. When the statutory instrument comes into force, will councils be denied the opportunity to pass a vote in favour of holding a mayoral election, which would save £142,000, or will we stop them having that vote by holding a referendum? 

Andrew Stunell:  If both Houses of Parliament approve the order, the Secretary of State can sign it. He is not obliged to do so, but once it has been signed, it is a requirement that the referendum should go ahead. If an alternative course of action were proposed to the Government, it would be necessary to ensure that the timetables of those two processes were integrated. 

I conclude by saying that every one of our cities is unique, with different needs—[ Interruption. ]  

Mr Watts:  The Minister is drawing to an end, but I am still unclear why he believes this to be a democratic system. In the most recent mayoral referendum, some 17,000 people were in favour of a mayor and 13,000 were against, but 140,000 did not vote. If that is a general reflection of people’s views, it is hardly a reason to change the political system in other towns. 

We are in the middle or starting periods of elections, so voters of any town or city must know who will have the power, what the resources will be and what extra money will be made available. Is the Minister in a position to answer any of those questions before he concludes? 

Andrew Stunell:  Liverpool city council has proposed a package of measures, which includes a commitment to strengthen local government by moving to a mayoral model. The Government are considering the overall package and will respond in due course. I am sure that the hon. Gentleman will appreciate that it would not be proper for me to pre-empt or cherry-pick the response to Liverpool city council’s proposal. 

The hon. Gentleman asked about the threshold. I am sure that he will be aware that the concept of thresholds is not embedded in our democratic system and that councillors can be elected with a small minority of electors, as long as they have a majority of voters. The same is true for Members of Parliament and with referendums. Percentages in referendums in different places were, on average, approximately 31% against a local government elections average of approximately 35%, so they seem to command a reasonable level of legitimacy. 

Simon Danczuk:  Is the Minister familiar with the work carried out by the Liverpool Democracy Commission some years ago—an extensive consultation exercise with the people of Liverpool? It concluded that Liverpool should have a directly elected mayor. Has that been taken into account in proposals? 

Andrew Stunell:  The proposal gives the people of Liverpool the opportunity to assert that if it is the case. On a previous occasion—if I am allowed a brief digression—we discussed the ballot in Birmingham, in which 220,000 electors took part, that produced a majority in favour of a mayoral system, but the council went on to propose a leader and cabinet system. There

is sometimes a disconnect between the perception of the local democratic view and what it actually is. The referendum provides the opportunity to test that. 

Mr Watts:  The Minister is being generous with his time, but is not a referendum the only test of whether local people want a mayor? Is it not undemocratic to force a change of system without their consent? Does the Minister agree that special consideration is needed as to why so many are trying to avoid giving the people a chance to vote? 

Andrew Stunell:  I very much hope that, at the end of this debate, the hon. Gentleman will support the statutory instrument, because it secures what he wants, which is a referendum in Liverpool to determine whether it should have a mayor. I look forward to the resolution of this matter at the end of the Committee, and I have spoken enough, so I commend the order to the Committee. 

8.21 pm 

Roberta Blackman-Woods (City of Durham) (Lab):  It is a pleasure to serve under your chairmanship, Mr Davies. I am tempted to congratulate the Minister on finding his way to the correct room this evening, but I will not because it is a tiny bit cruel. Instead, I will congratulate him on his tremendous stamina in going through this large number of statutory instruments dealing with the mayoral referendums. 

Different systems of governance for local government operate in different places. Elected mayors can offer a highly effective form of local leadership, which is why we gave councils and local people the power to choose to have a mayor if they wanted one. Under legislation that the Labour Government passed, which has already been discussed this evening, local communities can decide whether to have a mayor by petitioning the council for a referendum. The council can also decide to hold a referendum or, following a two-thirds majority vote of the council, to move straight to a mayoral election. That means that local people are in charge of their own system of local government in their own area. 

As we know, the Government had to withdraw their undemocratic plan to impose shadow mayors thanks to pressure from the Opposition when the Localism Bill was going through the House, and the Minister has graciously noted that. As my hon. Friend the Member for Warrington North (Helen Jones) said during the debate on the Lords amendments: 

“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.”—[Official Report, 7 November 2011; Vol. 535, c. 93.] 

We note that progress, but the orders still compel local authorities to hold a referendum on introducing a mayor. 

By contrast, we believe that local people should decide whether they want to have a referendum on having a mayor, not Ministers. The Government like to claim that they believe in localism, but not when it comes to forcing costly referendums on people in Liverpool and other cities. That imposition is the very antithesis of

localism, but Ministers continue to trot out their monotonous Orwellian doublespeak, undeterred by the obvious inconsistency of their position. It was a different story when they were in opposition. Prior to the elevation of the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) to his present ministerial position, he said: 

“I would prefer that the Government did not prescribe the governance system for councils at all. I would prefer that it was left for them to decide in a broadly devolutionary fashion”. 

Similarly, when he was in opposition, the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove said: 

“I want to make the pure gospel point that 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. 251-269.] 

Maybe the Minister will explain how he reconciles his professed commitment to localism with these heavy-handed dictatorial edicts. What does he say to Conservatives in local government who also object to the Government’s autocratic approach, such as Anne Hawkesworth, the Conservative group leader on Bradford metropolitan district council? She said: 

“My colleagues and I are not supportive of elected mayors. We don’t think that the proposals are suited to the needs of the Bradford district. We’re hopeful that local people will recognise that an elected mayor would be unlikely to improve the quality of life of local residents or the quality of services provided to them and vote to reject the proposals.” 

We know that there is a range of views in the cities concerned about whether there should be a referendum for an elected mayor, including in Liverpool. Some people in the city are in favour, and some are against. The decision on that, however, should not rest here in Westminster; it should rest with local councils. 

Mr Watts:  Is my hon. Friend as confused as I am about whether the people of Liverpool will be given a vote to decide whether they want a mayor? I am also confused about what powers this mayor will have, and I am confused about any extra resources that would be made available. The Minister has not answered those three important questions. 

Roberta Blackman-Woods:  My hon. Friend makes truly excellent points, and I will ask the Minister some further questions to see whether we can get some more clarity about what will happen in Liverpool. 

Mr Field:  Does my hon. Friend not see that there is a difference between Liverpool and Bradford? I can see that Bradford may not want an elected mayor, and the leader may say so, but in Liverpool the leader wants to have a mayoral system. 

Roberta Blackman-Woods:  I thank my right hon. Friend for that point, but I was making a general point about the fact that the decision should be left to local councils and local people, and that it should not be imposed through the orders. There is another reason why we are opposed to the orders, however, which is that the Government want to add insult to injury by asking councils to bear the cost of the referendums up front. I understand that the Minister has said that councils will be recompensed for the cost of carrying them out, but there is a huge question to be asked

about priorities when local government finance is being cut by up to 19%—or by even more in some cases —while councils are being asked to fork out for the cost of referendums. Surely that may have a negative impact on front-line services that serve the most vulnerable. The Opposition think that that additional cost is an unfair burden on councils, especially in some areas where there is no local demand for a referendum, and we want the Government to think again. 

I want to ask the Minister a number of specific questions about Liverpool. It would help the Opposition if he gave some detailed information about what might happen, given that the local council in Liverpool might vote to move straight to a mayoral election in advance of the order being implemented. We understand that that can happen with a majority vote of the council members rather than a two-thirds majority, and that if that is the case, the Secretary of State will not sign the order that has been put through both Houses. If the Minister can confirm whether that is the situation, that would be helpful, because we will then know that Liverpool, if its local council agrees, will move straight to a mayoral election without the council having to bear the cost of the referendum and with the Government paying in due course. 

Can the Minister confirm whether the grants that Liverpool is concerned about will not be contingent on it changing its governance structures? There is a lot of concern in Liverpool and other cities that it will be necessary to change the governance arrangements to pull down Government grants. That seems totally unwholesome. If the Minister can deal with those specific points, I would be grateful. 

8.31 pm 

Andrew Stunell:  I shall immediately pick up on what the hon. Member for City of Durham has said, because she raised an important point. I made the point that no city deal, including Liverpool’s proposal, is contingent on having an elected mayor. I hope that that is clear. It is important for the Committee to understand that. Liverpool city council has proposed a packet of measures, including a commitment to strengthen local governance, by moving to a mayoral model. The Government are currently considering that overall package and will respond in due course. For the reasons that I gave before, it is not appropriate for me, partway through that consideration, to cherry-pick or second-guess its outcome. 

The hon. Member for St Helens North asked whether the contents of that proposed package of measures were visible. In the first instance, it would obviously be for Liverpool city council to make public that package, if it wished to do so. It is not a matter for the Government to do so and I suggest strongly that the proposals that Liverpool city council may be asked to consider should no doubt include consideration of the whole package of measures, rather than simply the governance issue. Those are matters for Liverpool, not for the Government. If Liverpool votes to move straight to a mayoral election in advance of the order being made, it would follow that the Secretary of State would not make that order. 

In response to the hon. Member for City of Durham, I think that it is the seventh time that my quotation that I am in favour of the “pure gospel” of localism has been

given. I am delighted to have that charge pinned on me, because I remain strongly in favour of localism. The hon. Lady suggested that there was something non-localist about what we were doing and that that suggested that we were somehow performing at a lower standard than had been set by the Labour Administration before 2010. I ask her to get some research done. The Mayor of London was created because the Labour Government required there to be a referendum across London. There was no element of choice or consultation. There was no referendum about whether London wanted a referendum; it was imposed and the Mayor of London election subsequently took place, and he was appointed. 

When this point has been made in one or other of the previous debates it has been said that, if one took an individual borough, that would be a quite different circumstance from that of the Mayor of London. The Mayor of London’s circumstance was wholly exceptional, so may I refer the hon. Lady to the requirement that the Labour Government placed on Southwark to hold a referendum on whether to have a mayor in Southwark in 2002 under legislation that they had introduced? That mayoral referendum took place and the outcome was 2:1 against having a mayor. A Labour Government not just used but invented the mechanism that they are now criticising so strongly. 

On the question of timing, if Liverpool council resolves to move to the mayoral model in sufficient time, it would then be open to the council to hold the first election of its mayor in May of this year. 

Roberta Blackman-Woods:  What would happen if the order is signed before Liverpool council holds its council meeting but in circumstances where it holds the meeting and reaches a decision in favour of a mayoral election before 3 May? That means after the order is signed, but in advance of 3 May. That is perfectly possible. 

Andrew Stunell:  The position is quite technical, but if the vote in Liverpool was taken in advance of the order being made, then the Secretary of State will not make the order. If the order is made and comes into force, Liverpool no longer has the power to resolve to have a mayor. 

The hon. Lady asked about the cost of the referendum. It is £140,000 if it goes ahead and the Government will pay the costs. She seems to be unaware that Liverpool city council, according to the figures it has reported to the Department, has £90 million in reserves. I do not think that carrying the £140,000 cost for a week or two will have any measurable effect on the delivery of services

in Liverpool, particularly as it has the certainty of reimbursement. It will have no difficulty in setting aside some of that £90 million to cover the cost for a week or two until all the bills are settled. 

Roberta Blackman-Woods:  The Minister is being most generous with his time. Could I bring him back to the point about the decision of Liverpool council? What if the order is signed on, say, 13 April and on 14 April the council had planned to have a vote that would have moved straight to a mayoral election and would have meant that the costs would not be incurred at all for a referendum? According to the Minister it is no longer able to do that. It will not be able to move to a vote of the council to go straight to a mayoral election; it will have to have a referendum instead. 

Andrew Stunell:  One is always on dodgy ground when one answers hypothetical questions. The first point I would make is that if either of those two decisions took place in April, we would be in trouble with both timetables— 

Roberta Blackman-Woods:  Okay, March. 

Andrew Stunell:  I understand the hon. Lady corrects herself to say March, but in the circumstances she described, where the order has come into force already, Liverpool city council no longer has the power to resolve to have a mayor. It is as simple as that. There is one process or the other process, not both processes. 

As far as I can tell, I have covered the points that were raised in debate and I commend the order to the Committee. 

Question put.  

The Committee divided: Ayes 10, Noes 5. 

Division No. 1 ]  

AYES

NOES

Question accordingly agreed to.  

Resolved,  

That the Committee has considered the draft City of Liverpool (Mayoral Referendum) Order 2012. 

8.41 pm 

Committee rose.