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Lord Fraser of Carmyllie: My Lords, the whole purpose of my answers has been to explain that we are not prepared to see an anti-competitive position adopted by whoever may be first into the market. However, I neglected to respond to one part of my

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noble friend's question, which may be relevant to what the noble Lord, Lord Thomson, has mentioned. Those who are described as free-to-air broadcasters will have exactly the same rights for access to the conditional access service as anyone else who would otherwise pay. We have to recognise that those who move first and take the greatest investment risk have a legitimate first mover advantage. However, we are concerned that no one should adopt a dominant position. We have the technology regulations in place. We are consulting on the conditional access services position. If anyone has any further views on how those should be refined, my department will be interested to receive those representations.

Lord Bruce of Donington: My Lords, in view of the fact that this directive became operative in the Recess, and of the importance which my noble friend Lady Dean, and indeed the Government, attach to this matter, would it not be wise for the Government to initiate a full-dress debate upon this whole subject? Will the noble Viscount the Leader of the House take steps to ensure, in conjunction with the usual channels, that an adequate opportunity is afforded to the House to discuss this question?

Lord Fraser of Carmyllie: My Lords, if there is to be a full-dress debate, I suggest that on that occasion my noble friend Lord Inglewood might respond to it. I am beginning to reach the end of my knowledge on this complicated matter.

There are no such digital arrangements in place yet. It was desirable that we had the regulations published as soon as possible; as I indicated, I very much hope that the second part of them will be introduced before the end of the year. Then, well in advance of any activity using conditional access, all the regulations will be in place.

Lord Chalfont: My Lords, I apologise for pressing a question that has already been asked at least once; however, I should like some reassurance upon it. Is it not a fact that, under the regulatory regime as presently drafted, upon the launch of digital television there is a danger that one broadcaster could exercise a monopoly over access to all digital television--unless of course the viewer were to purchase a number of technology boxes for the top of his set to decode different signals? If that is so, is it not a matter of the greatest importance that the Government pre-empt that before the launch of digital television and ensure that no monopoly is possible? Will the Minister please give the House that assurance?

Lord Fraser of Carmyllie: My Lords, I believe I answered that question. However, if it is not clear, perhaps I may attempt to clarify the matter further. The regulations we have already introduced cover the licensing of conditional access technology. That licensing must be undertaken on fair, reasonable and non-discriminatory terms. It would not be open to

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the one granting the licence to require of the manufacturer that a common interface arrangement be excluded. If someone regards himself as having been improperly refused such a licence, then the regulations would allow him to take action in court. That is not the only aspect of the matter. Even if the technology is in place and only one box allows access from satellite, terrestrial or cable television, we want to have in place regulations that allow proper access to the services. Those regulations are presently out for consultation and we hope to have them in place before the end of the year. If the noble Lord has views on the draft regulations and is concerned to see them amended, I have already extended an invitation to offer representation. As I hope he will appreciate, our purpose is exactly the same as his; namely, that those who come into the business and take large risks should secure a first mover advantage. However, at the same time we strongly resist the idea that any monopoly should be created.

Lord Cledwyn of Penrhos: My Lords, will the noble and learned Lord arrange for an explanatory paper to be published so that the people who pay the licence can understand what he is talking about?

Lord Fraser of Carmyllie: My Lords, I should be delighted to have such a paper myself.

Lord Donoughue: My Lords, I join in congratulating the Minister both on his rapid mastery of this delightful subject and on the reassuring tone of his remarks. He will have noticed the strong feeling on all sides of the Chamber. Does he agree that it is not spoken words in this House that matter, but that we examine the regulations in great detail? Is he aware that the directive contains ambiguities which might allow a potential monopolist to wriggle off the hook? Will he therefore assure the House that the regulations will be absolutely precise in a number of areas? In particular, will he ensure that broadcasters will be able to issue their own smart cards to their own customers and not be subject to the control of a monopolist gatekeeper?

Lord Fraser of Carmyllie: My Lords, I am grateful to the noble Lord for his opening remark. If there are points of ambiguity in the regulations, it is precisely during the period of consultation upon which we are presently engaged that we wish to have them cleared up. I shall be grateful to him if he will let me know of any such ambiguities.

The position is not entirely easy. We cannot adopt certain steps being urged upon us such as the mandatory licensing of intellectual property. That would be an extreme step. Nothing at the present time indicates that such a course would be appropriate. As I have stated on a number of occasions, we do not wish to see a monopoly in place; but we want to allow those who take the risk of investment to take

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proper advantage of it, while at the same time ensuring that no such complete restriction is allowed to favour them.

Lord Monkswell: My Lords, I appreciate that the situation is difficult and complicated. However, am I right in thinking that the regulations referred to by the Government are based on a European Union directive? If that is the case, will the Government give an assurance that, if the final regulations allow Rupert Murdoch to have a monopoly that excludes the BBC, they will not blame the European Union for that outcome?

Lord Fraser of Carmyllie: My Lords, I hope that none of my remarks led the noble Lord to believe that we should try to blame anyone else. We are concerned to ensure that, as we hope, the pre-eminent position that the United Kingdom presently enjoys in this field can be secured. It is a massive opportunity for exports and trade. We want to maintain that position. At the same time we are well aware of the dangers of establishing a monopoly and seek to introduce regulations to avoid that possibility.

Lord Archer of Weston-Super-Mare: My Lords, will the Minister agree that the Question has proved that there are far too many television programmes already?

Lord Fraser of Carmyllie: My Lords, I am a little anxious in responding to my noble friend since the one thing I do understand about digitalising the signal is that it will possibly allow him to enjoy as many as a further 200 channels.

Baroness Dean of Thornton-le-Fylde: My Lords, I thank the Minister for dealing so fully with the Question. Will he take into account that, in relation to the regulations presently out for consultation, time is of the essence? I gather that the present monopoly supplier of satellite television is already out to tender for the new set-top box which will be launched next autumn. Time is of the essence in putting the regulations in place very quickly, in order to give the director-general the right to cover and license these areas.

Lord Fraser of Carmyllie: My Lords, all the points that the noble Baroness made are well understood. As I indicated, that is why we put out the regulations on 23rd August, giving the maximum time available to put the provisions in place. Clearly it is desirable to ensure that some of the anxieties that noble Lords have will be met, that access will be very much greater than at present, and that the opportunities that lie in the television world will be very much extended and to the benefit of the United Kingdom as a whole.

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Relations between Central and Local Government: Select Committee Report

3.7 p.m.

Lord Hunt of Tanworth rose to move, That this House take note of the Report of the Select Committee on Relations between Central and Local Government, entitled Rebuilding Trust (Session 1995-96, HL Paper 97), and of the Government's response (Cm. 3464).

The noble Lord said: My Lords, in moving the Motion in my name on the Order Paper, I should perhaps start by reminding noble Lords briefly of the remit that the House gave us in October last year. Our task was to consider the relationship between central and local government: the balance in that relationship; whether it was working well or badly; the legitimate concerns of both parties to it; and in particular the financial relationship, including the extent to which financial independence for local government is desirable and practicable. We were not concerned with structure or boundaries, with devolution or with problems relating to particular services; and our terms of reference excluded Northern Ireland. Finally, we were told to complete that rather formidable task by the Summer Recess.

After studying some 150 written memoranda and holding 28 meetings, during which 35 sets of witnesses gave oral evidence, we were left in no doubt that relations between central and local government, although perhaps better than a few years ago, were unsatisfactory. There is a high degree of unconstructive tension between them. We did not point fingers or attempt to allocate blame because the movement of power to central government or to quangos has been happening over a long time and under different governments.

The pressures for national standards are part of the story and, of course, in the 1980s some local authorities had only themselves to blame for some of the restraints imposed upon them. The trouble is, however, that the shift in the balance over time has been on a piecemeal basis as governments reacted to particular problems by taking powers away from the local authorities and it has not been in accordance with any over-arching philosophy as to what it is right for local government to do.

However, the cumulative effect has been not just a weakening of local democracy--which most people who gave evidence to us regretted, since local government is concerned with issues which affect the citizen locally and directly--but also a blurring of accountability so that a local consumer or taxpayer with a problem often does not know and cannot even find out who is responsible for it.

The overwhelming weight of our evidence was that a change of climate was required and that that change pointed to strengthening local democracy while safeguarding and maintaining the essential interests of central government. Although some of our witnesses sought that change in new constitutional arrangements or a Bill of Rights to reinforce the democratic mandate

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of local government, we did not see it as within our terms of reference to consider or to call for a codified written constitution to enshrine the powers of local government. We thought it more sensible to assume the continuation of the doctrine of vires under which local government has to adduce powers from Parliament for any action it takes and to see how the climate could be improved and how present arrangements could be made to work better. We came to the unanimous conclusion that there was plenty of room for this.

I cannot mention them all, but our main recommendations can be summarised under three objectives: first, to mark the status and respect which is due to a system of local government enjoying a democratic mandate. We recommended that, first, the guidelines agreed in November 1994 between the Prime Minister and the English local authorities should be expanded into a more formal concordat on the place of local government, its role, its financial base and so on. Secondly, we recommended that the UK should adhere to the Council of Europe's Charter--and of course, the Council of Europe has nothing whatever to do with the European Union. The charter is on local self-government and we seem to meet its provisions anyhow. Thirdly, we recommended that a permanent parliamentary committee should be established to take an overview of and to monitor central/local government relations.

Next, we recommended helping local authorities to play what we felt was their increasingly important role of community leaders in the field of local governance where they alone at the local level can take an overall and prioritising role, in contrast to quangos which are normally single-interest bodies and often unelected. We recommended that: first, the local authorities should have a new power of local competence somewhat wider than that provided in Section 137 of the Local Government Act, but still a restricted power; secondly, that they should be enabled to experiment with different internal management and electoral arrangements; and, thirdly, that better arrangements should be introduced in Whitehall to co-ordinate policy on local issues like public safety and drugs which cut across departmental boundaries.

Finally, on the crucial issue of finance, we recommended: first, that capping should no longer be the general practice, although a reserve power to cap should remain subject to parliamentary approval. Whatever the past justification for capping--and we did not comment on it--it is in our view no longer necessary. It distorts local finance, it confuses accountability and it restricts the ability of local authorities to take financial responsibility for their action. Secondly, we recommended that Treasury control of local authority self-financed expenditure should be relaxed and that the local revenue base should be enlarged by returning the non-domestic rates to local authority control. We felt that the shrinkage of the locally financed base is a disincentive to accountability and has a most undesirable effect on gearing. Thirdly, we recommended that standard spending assessments should be simplified and should be used only for their original purpose of grant distribution. Fourthly, we

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thought that there should be a review of whether compulsory competitive tendering should become voluntary and in any case less detailed.

I do not have time to expand on most of the recommendations, although I hope that some of my colleagues will do so. However, I wish to say a word about the proposal for a permanent parliamentary, although not necessarily House of Lords, committee to maintain an overview of central and local government relations. We were aware that in 1992 the Select Committee on committee work, under the chairmanship of the noble Earl, Lord Jellicoe, considered and came down against the idea of a standing committee. We would not wish to appear disrespectful of that view. Indeed, our recommendation for an outside overview committee is couched somewhat tentatively and does not necessarily refer to this House. It seemed to us, however, particularly in the light of the evidence we heard, that things had changed somewhat since 1992. We were mainly influenced by the feeling which ran through all the evidence that we took that whatever decisions were taken on particular issues, the real need was for central and local government to put an adversarial past behind them and to build a new relationship of trust, otherwise, we might as well get rid of local government altogether. To give them their due, I believe that both sides recognise that. But we were struck by the number of witnesses who felt that an outside independent body could play a useful role in making the inevitable tension between the two tiers creative rather than adversarial.

Before touching on the Government's White Paper which is also mentioned in the Motion, I wish to thank all those who helped the Select Committee in its work. I wish to thank the many witnesses, and perhaps I may say how struck we all were by the number of people who thought the issue that we were discussing was important and volunteered evidence to us. We were also exceptionally fortunate in our two specialist advisers: Professor Michael Clarke from the School of Public Policy at Birmingham University, and Mr. Tony Travers of the London School of Economics. Their wide knowledge and experience and their constructive approach were very helpful to us. Our clerk, Mr. Simon Burton, was a real tower of strength both in organising our work and in drafting and redrafting our report against a very tight timetable.

Finally, I wish to express my personal thanks to my colleagues for their consistently helpful approach and for their forbearance. Some of them may wish today to develop points raised in evidence which do not feature in our report, but I wish to stress that the report itself was unanimous.

I now wish to express my appreciation of the fact that the Government's response to the report takes the form of a White Paper. I understand that it is an unusually formal way of replying to a Select Committee report and thus marks the Government's view of the importance of the subject. It is most welcome. I am sure that my committee would also welcome much of the tone of the White Paper and, above all, the fact that it looks to the future and does not rake up old scores. Of course, my

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committee no longer exists, so the few comments that I should like to make about the White Paper are essentially personal ones.

The Government agree that the present state of central-local government relations is unsatisfactory and that a change of climate is needed. They agree that the existing guidelines for central and local relations for England and Wales should be developed to incorporate issues of the kind identified by the Select Committee and that similar guidelines should be prepared for Scotland. They agree that those guidelines should include a statement setting out the role and status of local government, covering the same ground as the Council of Europe's charter, even though, no doubt for political reasons, the Government are still unwilling to adhere to the latter.

The Government agree in principle on the need for a new and restricted power of local competence to encourage the leadership role of local authorities. They agree to legislate to allow experimentation with new forms of internal management and to conduct joint research on ways of encouraging public participation. They agree also to examine the effectiveness of Whitehall arrangements for handling cross-departmental business affecting local government.

Those decisions and the language about partnership accompanying them are very much in line with the Select Committee's thinking and I welcome that. But then, coming to the crucial, day-to-day issue of finance, a quite different tone emerges. The Select Committee's recommendations on the discontinuation of capping as a standard procedure with a reserve power to cap when an authority sets a clearly unreasonable budget, on the simplification of SSAs, on the relaxation of control over local authorities' self-financed expenditure and on the return of the non-domestic rate to local control are all rejected.

The Select Committee fully accepted the Government's clear need to ensure that local authority expenditure as a whole is kept within reasonable bounds and that adequate reserve powers are in existence to ensure that. However, we were concerned about the way in which that control is exercised at present. I am afraid that we were not at all persuaded by the Treasury's evidence on the matter. Our recommendations may not be perfect but I am bound to say that it seems somewhat inconsistent, to say the least, to talk the language of rebuilding trust while refusing to make any concession at all on the financial issues which are at the heart of the central-local government relationship. We shall all want to listen very carefully to what the minister has to say when he comes to reply to the debate.

Perhaps the most intriguing sentence in the White Paper came at the end of paragraph 6. After saying that the building of good central-local government relations is something which must be continued and developed over time, it goes on to say:

    "The Lords Report and this response, therefore, should not be regarded as the end of a story or even a beginning, but rather simply as one more, albeit significant and valuable, chapter in the continuing development of our living constitution".

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I hope that that does indeed mean that as trust is rebuilt both sides will show a greater sense of partnership and greater flexibility in future years on finance as well as on other matters.

I commend the Select Committee's report to the House as a contribution to what will be a continuing debate. I beg to move.

Moved, That this House take note of the Report of the Select Committee on Relations between Central and Local Government, entitled Rebuilding Trust (Session 1995-96, HL Paper 97), and of the Government's response (Cm. 3464).--(Lord Hunt of Tanworth.)

3.25 p.m.

Lord Williams of Elvel: My Lords, the House will be grateful to the noble Lord, Lord Hunt, for presenting the committee's report and for outlining its conclusions in the elegant manner we would expect from a former Secretary of the Cabinet. To my party, the debate is particularly welcome at this time. A general election is in the offing. One of the issues which no doubt will be debated, perhaps because of a coincidence of dates between the general election and local elections, is the future of local government. The least I can say is that there appear to us to be some important differences of opinion about what that future should be between ourselves and the present Government--I use the words "present Government" advisedly--which the noble Lord, Lord Hunt, illustrated. I am glad of the opportunity afforded today to restate and reaffirm the essential themes presented to the committee by the Labour Party in both our written memorandum and oral evidence.

The House will be grateful to the noble Lord not only for the clarity with which he introduced the report of his committee but also for the manner in which he chaired its proceedings, as I know from the compliments I have heard paid to him and my own personal experience. As the noble Lord said, the committee's report has been welcomed not only by my party but also by those who will form the new Local Government Association in England, the Welsh Local Government Association and the existing Convention of Scottish Local Authorities.

The report has also been welcomed, although in a somewhat muted tone and with many reservations, by the present Government. That is indeed a tribute to the committee, especially as the welcome is in the form of a White Paper.

I hope that I do not strike too much of a partisan note if I say that the committee's report is particularly welcome to us since it broadly endorses views which we have held for some time and which we set out in our evidence. I shall mention only a few specifics on which our agreement is absolute. Britain should sign without delay the Council of Europe's charter on local self-government. Local government should be encouraged to develop its role as the community leader; should be allowed more freedom to experiment with internal structures; and should seek new ways of increasing turnout in local elections and be encouraged

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by central government to do so. Capping should no longer be a general practice imposed without regard for circumstances. The non-domestic rate should be returned to local authority control. The whole system of compulsory competitive tendering needs to be reviewed and there should be some outside independent body. I recommend that that might be an appropriate matter for your Lordships' House in the course of time.

In all those matters we support the conclusions of the report. I do not wish to say too much more about them except perhaps that we regard the Council of Europe charter as a matter of the greatest importance. My noble friend Lady Farrington will have more to say on that matter later; she will also comment on SSAs, of which she has great experience.

I wish to concentrate on what I regard as the central issue of the report; namely, the problem of what may be described as centralisation. From that follows logically the matter, described by the noble Lord, Lord Hunt, as a crucial issue, of local authority finance. In case your Lordships feel that I am wholly and uncritically supportive of the report, I should like to indicate some of the difficulties we see in the full and immediate implementation of the committee's conclusions. I can assure your Lordships it is a matter of timing rather than substance.

Centralisation, as our evidence to the committee pointed out, is not a new problem. The noble Lord, Lord Hunt, described how the shift to the centre has taken place throughout the 20th century under governments of all political persuasions. The Liberal Government in 1906 took control over the payment of pensions. The Labour Government of 1945 nationalised gas and electricity. The provision of water and sewerage, long regarded as a local government function, was nationalised in England and Wales by a Conservative Government in 1973. Even by the time the Conservative Government took office in 1979, the position of local authorities in terms of authority and stature was a long distance from the old Birmingham of Joseph Chamberlain. In the matter of centralisation no political party can claim total innocence.

Our concern now is that the shift to the centre has gone unhealthily far. In short, we believe that central government have taken too much to the centre and that local democracy has become enfeebled to the point where it is neither true nor effective. We agree with the broad conclusions of the report on that issue. But let me be brutally frank. We believe that since 1979 there has been a deliberate and sustained assault on local government. The time has now come to call a halt. It is not only a question of calling a halt; it is also a question of putting the whole process into reverse.

The nature of the assault was perhaps best illustrated by the imposition of the poll tax against the advice of practically everyone in local government--of all parties or none--who saw its pitfalls. The experience, as noble Lords will be aware, was truly dreadful. Indeed, it was largely responsible for the fall of one Prime Minister. It is now time to repair--in this we agree with the report--in so far as we can, some of the damage that has been done.

I understand from the government response that the Government have, somewhat belatedly, come round at least partially to that point of view. They accept the

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recommendation in the committee's report that the guidelines agreed in November 1994 between the Prime Minister and local government associations should be in a more formal framework. But the government response still reserves the right to add to the issues suggested in the report another matter; namely,

    "the role of local government in supporting national aims and objectives set by the Government".
I find that particular response seriously depressing. The Government--or perhaps I should say the Conservative Party since it is the Conservative Government who are responding--have completely failed to understand that one of the main features of local democracy is pluralism. Simply put, that means that democratically elected local authorities may well fall to be controlled by parties or a combination of parties different to the party in power at Westminster. That is a fact which any party in control of central government must accept. It is a monstrosity to insist that any party, of whatever colour, should retain the right--not in legislation, because that is self-evident as long as that party commands a majority in the House of Commons--to require local government to support objectives set by that party's government unless those objectives are either submitted to and approved by Parliament in legislation or they are the product of a consensus between all those who have responsibility in the area; in other words, and in practice, all political parties. Anything else would be a negation of proper democracy. Unless that fundamental point is accepted I doubt whether all the fine words in the Government's response are worth more than a row of beans.

Local authorities have a direct democratic mandate which is quite separate from national government. Until and unless that is recognised--this is the main thrust of the report--and local authorities are no longer treated as mere providers of services, democracy in this country will continue to suffer. I recognise that in their response to the committee's report the present Government--I repeat, the present Government--have moved their ground a bit. But the history of the past few years gives me little confidence that it is more than a temporary spasm.

Let us consider the facts. Since 1979 over 200 Acts of Parliament affecting the powers and responsibilities of local government have been implemented. Regulations of the greatest detail have been introduced to curtail the freedom of local councils to take their own decisions. The degree of central government interference in what most countries would regard as management decisions is not mirrored anywhere else in the developed world. There has been a deliberate attempt to bypass local authorities through the mechanism of the quango. Government-appointed or self-appointed bodies are now responsible for over £30 billion of public spending which used to be under the influence or control of elected local authorities. Education, training, housing, urban development, public transport and planning are only some of the major policy areas over which democratically elected representatives of local people have lost their say. To cap it all, central government now make no fewer than 40,000 appointments to non-elected bodies.

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In the light of all that, it is no wonder that local authorities have lost trust and that the noble Lord--I am sure he was responsible--entitled the report, Rebuilding Trust. It is little wonder that in the circumstances so few candidates of quality in any party are prepared to stand for election as councillors or to serve local authorities as officials. Local government used to be the breeding ground for aspiring politicians at national level. It is no longer. It seems that that role has now passed to estate agencies.

That leads me naturally, since it is central to the problem pointed out by the noble Lord, Lord Hunt, to local authority finance. It is at the heart of centralisation, as the committee points out in chapter 5. It is clear to us that local authorities should have as great a control over their revenue-raising powers as is possible. Perhaps I may speak to the present situation. Local authorities should not be put in the position in which they are forced to raise council tax in order to provide a dying government with room to reduce the headline rate of income tax. In case your Lordships think I am making too much of a party political point, it is worth remembering that last April, when inflation was 2.4 per cent., council tax increases averaged 6 per cent. The previous year, when inflation was at 3 per cent., council tax increases averaged 5.2 per cent.

We know that the Government wish to reduce the standard rate of income tax for purely electoral reasons--it has been advertised well in the press--but it makes no social sense to force a disproportionate increase in council tax in order to do that. In purely party political terms, if I may be cynical for another moment, it makes great sense since the manoeuvre allows the Conservatives, who control central government, to blame Labour and the Liberal Democrats for the council tax increases as opposition parties control most local authorities which are responsible for setting the level of council tax. The tactic is really very simple. You reduce the revenue support grant from central government to local authorities so as to leave room for income tax cuts. Local authorities are then forced to raise more in council tax in order to maintain the level of service which has been, and is, required of them by central government and Parliament. Central government--Conservative--can then reduce national income tax and blame local councils--Labour or Liberal Democrat--for raising taxes in another form. It is all very simple, but I put it in those terms to your Lordships because I believe it is fundamentally dishonest.

I said earlier that we accepted the broad conclusions of the committee's report. Nevertheless, as I pointed out when giving oral evidence to the committee, what is required in our view is a change of culture--a change in the whole way in which the governance of this country is perceived. As I said in the debate on the Address--I do not like to quote my own words but I shall--subsidiarity, like charity, begins at home. And it is no good demanding subsidiarity from Europe unless we are prepared to concede it at home. But it is equally no good imagining that such a cultural shift

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as I am suggesting and as I suggested in oral evidence to the committee is quickly or easily accomplished. It is going to take a long time and many disappointments to get from where we are at the moment, as the committee pointed out, to where we should be. It is that word of caution which I would leave with your Lordships. Fine words may be spoken in opposition, but they butter no parsnips in government, and since that is where we expect to be in a few months' time I hope your Lordships will accept that my reservations on timing are to the point.

Having delivered that perhaps slightly sombre warning, I conclude by congratulating the noble Lord, Lord Hunt, and his committee on the quality of the study and the report. I assure your Lordships that we do, and will, take most seriously their recommendations. They have pointed to changes that are needed. Their work has been thorough and effective. We will make sure that that work and those results are not lost.

3.43 p.m.

Baroness Hamwee: My Lords, I start by declaring an interest as a serving councillor in the London Borough of Richmond upon Thames and I have various local authority positions, mainly stemming from that. I wondered how, in paying tribute to our chairman, I could avoid being formulaic. It really is quite difficult. One has heard before the thanks to chairs of Select Committees, but I have to say that the noble Lord, Lord Hunt, expressed what members of the committee thought far better than we could have done. It would have been a pleasure to have been a fly on the wall witnessing his incisiveness and objectivity. It was an even greater pleasure to take part in the process and in the work led by him, with, as he rightly said, the assistance of the professional advisers and of the Clerk of the Committee.

It was in large part due to the noble Lord's chairmanship that our report was unanimous and also to a large extent because the subject matter--the importance of rebuilding trust--transcended so many differences. I suspect that some members of the committee may have been a little uneasy at how far we went. I know that some of us might have liked to have gone a little further, not perhaps so much in content as in emphasis and in the expansion of certain points. However, the serious nature of the report, and especially of its recommendations, is underpinned and underlined by that unanimity.

I have explained that I am a local councillor. I have been vividly reminded recently of the need for trust by somewhat parochial events--but parochial events illustrating wider issues. In my ward the local authority has been involved in what I think most people would regard as a very small proposal for a very small development. We have called it "mini golf", for failure to find any smaller term to describe it. People who live nearby are anxious and suspicious and talk of it in terms such as an "astro-turfed theme park", but it is something on the scale of clock golf at the seaside.

I have been forced recently, because of these reactions, to assess the response. Why do people think there is a hidden agenda? In my defence I should say

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that generally the scheme has been well received, but why should some people think that my colleagues and I--and indeed the council officers--would want to impose something if it is really so very unpopular? What possible benefit could there be in it for us? The answer is not logical, or if it is logical, at any rate it is not causally connected. I think it is that politicians and politics generally are in such disrepute that the instinctive view among many members of the public--the default mode, perhaps, in computer speak--is that anything that comes out of the political process must be tainted. So they distrust the politicians. The future of local government--the future of all government--lies in recreating trust. I do not believe we can recreate trust between the tiers of government without rebuilding the trust of the public.

I recall that when I first thought about standing for my local authority one of my friends started to call me "T. Dan Hamwee". Things have moved on rather positively since then, but politicians share the responsibility for rebuilding trust. If we can do it, we shall be a little nearer to the goal of helping to build a society of people who are keen to exercise their rights of citizenship. That is what a good deal of our report was concerned with--the quality of government, the importance of democracy and the ballot box and the opportunity for local government to do what it sees as right for its own community and to take the consequences at the ballot box. It is that readiness to take the consequences that entitles councillors to do things differently between different areas.

We heard a good deal of such sentiments during the evidence given to the committee. The Scandinavian countries have gone through this exercise. I was fascinated to learn of the experiments that have gone on there. In Scandinavia the systems of local government have traditionally been subject to quite heavy regulation. To try to break that up, free local government experiments were set up. The aim was to innovate, to develop systems and service delivery and to develop ways of relating to the citizen. The experiment was endorsed officially--ironically, that means that it was endorsed centrally--but the endorsement created an environment in which people would take risks. The whole process involved evaluation. So schemes which did not work were dropped and some which did work and worked well were taken up by central government; and the examples were passed round. That very culture of freedom meant that some authorities actually did things which they discovered they could have done under the old rules but had assumed that they could not. That freedom to experiment, as your Lordships will readily appreciate, means that the freedom to fail must be accepted as being an occasional, one hopes, but inevitable consequence.

In our first public session, we moved very quickly to the issue of local competence. The Select Committee raised with the Department of the Environment the freedom for local government to exercise the power of competence. The DoE stated very firmly in its written evidence that,

    "local authorities must be able to adduce specific statutory authority for their actions".

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The senior civil servant giving evidence to the Select Committee commented that local authorities can use Section 137 of the Local Government Act. That section is referred to in the Government's response. He reminded the Select Committee that the section enables local authorities to spend money for the benefit of their areas and inhabitants.

I asked whether spending within that section has to come within any cap which is applied by Government under the current rules. The reply was, "yes". My noble friend, Lord Tope, asked,

    "Since capping is related to Standard Spending Assessment, can you tell us how section 137 spending is reflected in the SSA calculations?"
The reply was,

    "I think specifically not at all is probably the short answer".

I am disappointed with the Government's response on the question of the power of local competence. To say that financial limits placed on the use of those powers do not give rise to difficulties because most authorities are spending within the limits is perhaps a failure to understand or admit the relationship with the other regulations to which I have just referred. I look forward to the reassessment which we are promised, but the very wording used in the White Paper:

    "whether a more general power of local competence is practical and advisable in the light of broader priorities",
seems to hint at the answer.

The freedom to experiment seems to be accepted more readily in the response in the area of internal working arrangements. How one does things is important, but the scope for effectiveness is limited if what one can do is limited. The freedom to do things differently has recently been identified as important by Sir Charles Carter, whose report on pulling together 10 years of work by the Joseph Rowntree Foundation on local government has just been published. He says that leadership is especially needed in promoting this idea. It is,

    "not a ground for suspicion or rebuke or bureaucratic obstruction, but the essential means for the emergence of new ideas which can then compete for more general acceptance".
It is a pity that the Government are not more willing to embrace the freedom to do things differently. That is particularly odd, given that at European level they argue this very freedom for themselves.

The various controls and constraints which the committee called to be lifted, such as capping, CCT and so on, are not just about constraining spending, but about constraining innovation. The effects are much more long term and fundamental than year-on-year economies. Pushing CCT so far that those who let the contract lose all sense of hands-on experience; controlling capital in order to control a local authority's capital base, because that base means power, so that there is little investment; capping and ring fencing and the Treasury imposing hypothecation even when it does not accept it for itself--all these things are very serious.

I read earlier this year of a warning that the private financing of local authority projects was at risk after a recent court judgment. For the cognoscenti, I refer to the Allerdale case. Bankers would not know if their

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borrowers were allowed to borrow so they did not know if they could enforce repayment. The Government were being urged to establish a new tribunal to vet deals in advance in order to certify whether a proposed borrowing was intra vires. Is not the real issue local authority freedom, not the artificial criteria but a local authority being able to seek borrowing based on proper, normal commercial and indeed correctly political assessments?

These regimes also distort perceptions. Who is responsible for certain courses of action or indeed the failure to take action? Accountability breaks down so fast when discretion is constrained. My own authority is currently consulting, as it always does, on next year's budget. At a public meeting last week we were asked, "Please do not spend so much on roads. We want you to spend more on education and on services for elderly people". But if my local authority gets credit approvals, as it may well do, for work to the roads, what are we to do? That credit approval will not be transferable. How do we explain without whingeing--I assure noble Lords that most of us would prefer not to whinge about all this--to the resident who sees road works outside his own house when he has an elderly relative who is receiving less than an ideal level of domiciliary care? I believe that we shall continue in the vicious circle of deficient accountability and mistrust by the public while so little of the local authority budget is raised locally. That is a view that is widely shared. The Government seem to accept that there should be an increase, even if it is a small one. I have to say that theirs is a minority voice in arguing against a return to the business rate.

It is no wonder that people are so confused and that their votes, if they do vote locally, are so affected by what is happening nationally. I am glad to see the statement in the White Paper that the Government want to see progress in increasing public participation in local democracy and local government. I hope that their actions will not be as top down as some of their comments seem to suggest. I do not believe that people want to be treated with paternalism, which is not to say that they do not want leadership. They are very open to that idea, particularly where they have been involved by their local authority. I believe that the future of local government lies in finding the best level of that involvement and the best mechanisms. That is almost bound to vary from place to place and from group to group because even in a relatively small country such as ours we have a culture which is not a monotone. I remain true to my Liberal Democrat roots in believing that government should be delivered at the lowest possible level, but I do not believe that there is any one formula. Certainly I believe that politicians at all levels have an obligation to encourage participation, not simply saying to people, "Here is power, get on with it", but "Here is power and support to use it in the best way".

It is all a question of trust, which is sometimes assisted by symbolic actions. Signing the European charter of local self-government would, among other things, be such a symbol. Perhaps that would be too symbolic in the case of Europe. Establishing a new mechanism to scrutinise the Government's proposals

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would also be a symbol, as well as a useful mechanism. As the noble Lord, Lord Hunt of Tanworth, reminded us, that is what was proposed when we drew to some extent on the experience of the Delegated Powers Scrutiny Committee. That is not perhaps the step which the White Paper suggested. A concordat between central and local government, something more than a guideline, would also be a symbol, but it would be much much more.

The Government's response states,

    "It hopes that local government will be willing to play its part".
That is fair enough. Every sector must play its part to rebuild trust, including the trust of citizens--and of people who want to be citizens, not subjects--and the trust of tiers of government of one another.

I believe that there is a great responsibility on the next government, of whatever colour and of whatever intensity of colour, to work to rebuild that trust. If the next government fail, or refuse, to do that, they will be failing thousands of councillors and council officers who are frustrated in the job that they want to do. They will be failing millions of people, not only by precluding efficient and effective local government, but by precluding their participation. Indeed, I do not think that it would be going too far to say that they would be failing the cause of democracy itself.

4.1 p.m.

Baroness Platt of Writtle: My Lords, our interests are declared in our report so your Lordships will understand that I attach great importance to the deliberations of the Select Committee on relationships between the two elected tiers of government in our democracy and that I deeply wish to see the gradual but strong move towards "Rebuilding Trust" between them, which is the title of our report. We were very fortunate in our chairman whose longstanding skills drew out an agreed report although there were many areas of disagreement during our deliberations.

I am glad that in their response the Government also accept the importance of the subject and wish to play their part in improving those relationships and regenerating trust, as does the newly set up joint Local Authority Association. That augurs well for the future.

The committee believes, as do the Government, that there will always be tensions between the two levels of democracy. Those tensions need, however, to be used constructively on both sides to solve difficult problems of future policies. Too often they are used as an excuse for slinging mud across the fence, particularly if different political parties are involved and, of course, the media love to stir up a row.

As we stated in our report, recognising that local government is created by statute, it needs to play its part in improving future relationships with a mature recognition of its standing relative to central government. As councillor Sir Jeremy Beecham and others fully acknowledged in evidence to us,

    "Some local authorities during the 1980s sometimes tried to take on national government in matters which were not their proper concern, and to spend to excess".

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That was a great mistake which I believe many now regret. We need a mature recognition of their standing.

Central government must play its part too, and I was glad to read in the response that the Government regarded,

    "robust, independent local government as an essential feature of the country's democratic society".
Local government has become more corporate over the years and I am glad that the Government are to examine the effectiveness of cross-departmental handling of business so as to reflect that need in Whitehall. The involvement of the Government's regional offices in this respect will be valuable as they too are more corporate, but they must be seen to take local needs upwards to Whitehall, as well as demonstrating government policy the other way. I am glad that the Government are already putting our recommendation into action by increasing the number of two-way secondments and exchanges between senior civil servants and local government officers so as to improve the link between "Town Hall and Whitehall". There needs to be a strong ongoing policy in developing mutual professional respect.

We welcomed the Prime Minister's guidelines for central and local government relations as a turning-point of the tide towards better days, but those need to be further strengthened and mutually and sincerely put into action on both sides over future years. Actions of central government such as publishing major policy changes affecting local government in the press without prior notice to local government so that it can produce a considered response instead of a knee-jerk reaction should be unthinkable. That shows a total lack of trust. I am glad that the Government accept our recommendation that those guidelines should be strengthened and given more formal status and that they are to pursue the matter with the new overall Local Government Association, and in Wales and in Scotland, with the stated aim of improving the guidelines. It may be worthwhile looking at the impact of the Citizen's Charter in this area because it has been very successful overall. I also welcome the fact that the Government propose similar action to improve public involvement and local participation in local government. That is very important.

I am very sorry that the Government are not to set up a parliamentary committee to review relationships and to receive annual reports from those concerned. I believe that that would have helped to strengthen relationships between Members of Parliament and their local authorities and to improve mutual respect. Perhaps at least annual reports should be presented to the Select Committee on the Environment, and to others where relevant.

I also regret that the Government will not sign the European Charter although they support its principles. However, I welcome the fact that they consider that a clear signal is necessary to recognise the value of local government and that they intend to agree with local government a statement covering the same ground as the charter and setting out the role and status of local government. That constitutes a valuable step forward in trust.

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It is of great importance that the Government accept the vital role of local government in community leadership and agree to review the scope for action within Section 137 and to assess whether a more general power of local competence should be allowed. I hope that that too is approached on both sides in a constructive manner and results in progressive action.

I am glad that the Government intend to bring forward enabling legislation in the next Parliament to allow local authorities to propose experiments in internal management. I am not in favour of wholesale change in that area, but pilot schemes can often give valuable experience that others can follow, and new arrangements can gradually develop based firmly on successful practical experience. I am not in favour of any major reorganisations in local government--certainly for another 20 years--as they always prove more expensive than expected and, if anything, create more problems than they solve. "If it ain't broke, don't fix it" is a good motto.

I am sorry that the Government do not feel that they can loosen the compulsion on compulsory competitive tendering. We felt that that would indicate a substantial statement of increased trust. It is a pity that, to quote from the Government's response,

    "many local authorities have sought to avoid competition wherever possible",
but we felt that the holding of a reserve power by government, which is strictly enforced, might have controlled those few authorities adequately. We have no doubt, as we say, that CCT has produced a change for the better, and has led many councils to see themselves as efficient and economic enablers in the provision of services rather than purely providers. Public services must be there to serve the local public in the best possible manner and flexibility must be the name of the game.

Finance is a knotty problem. In saying that, I believe that the Audit Commission has done an excellent job in encouraging efficiency, economy and the conservation of public expenditure. I hope that it continues to do that. It is very important that the public should be clear who has made a decision to alter the services that affect them substantially. At present mud is slung indiscriminately by both sides and the public have no means of judging who is at fault. As The Times said on 25th July, councils can be their own worst enemies, whingeing a great deal but still managing to foot the bills. They cry "Wolf" too often.

Accountability is vital in a healthy democracy. SSAs are complex and the public does not understand them. Councillors often feel that they are a very blunt instrument, and especially when used for capping. Different parts of England have very different expectations and priorities in the provision of services, and elected local government must be free to try to meet those local needs in a variety of ways. SSAs and capping form a straitjacket of prevention rather than enablement, especially when associated with a high gearing which is inevitable where local government is raising only 21.4 per cent. of local expenditure. I am glad to hear that the Government plan a modest increase in the proportion met by council tax.

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I am sorry that the Government did not feel able to return the non-domestic rate to local authority control. I have doubts myself, in that the non-domestic rate smacks of "taxation without representation" as industry and commerce have no vote. However, I believe that local authorities now have a statutory duty to prepare an economic strategy for their areas upon which they must consult the business community. If non-domestic rates are too high, industry and jobs flee to other parts of the country. So I hope that that new duty will enforce prudence. It would certainly have improved accountability.

Local government is only as successful as the people it attracts to its service--councillors and officers. I thoroughly support the Nolan Committee's view that the most important qualities to be encouraged in public life are selflessness, integrity, objectivity, accountability, openness, honesty and leadership. Beyond that, we want members with a variety of experience in life, and good professional officers upon whom to rely for advice. They will be attracted to local government only if they have sufficient freedom to develop innovative and worthwhile services to the public to meet local needs.

I am glad that the Government are taking the steps that they are in response to our report. I wish they had gone further in relaxing financial controls, with safeguards, but clearly making local government both responsible and accountable for its decisions. In that respect, I believe that the emphasis on local government elections should return to being more local. Too often the media show local elections as a vote for or against the national government in Westminster, which they most emphatically are not. Local elections must be about electing the best and most responsible local councillors--strong-minded, honest, efficient men and women prepared to stand up for the needs of their local communities--truly prepared to be accountable locally.

Whitehall certainly does not know best on local matters, and local government, as the Government accept, has been elected to be a focus of leadership in local communities. The Government themselves believe in subsidiarity, and are proposing, in the new Local Government Rating Bill, to give more influence to the lowest tier of local government (parish councils), which I welcome.

I hope that the Government, in their wish to continue to work on improving relationships over a period of time, will see their way, step by step, to relaxing some of those straitjacket financial controls as local government itself acts responsibly. I hope that will attract people of calibre into local government, and although not a believer in "golden ages", I am sure that democracy in this country will be the beneficiary in future.

4.14 p.m.

Lord Borrie: My Lords, in following two speakers who were themselves members of the Select Committee, I have great pleasure in congratulating them as well as the noble Lord, Lord Hunt of Tanworth, on the

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presentation of this clear and valuable report and I also congratulate the noble Lord on initiating this debate today.

I have only one small interest to declare, as honorary president of the Institute of Trading Standards Administration, an office which I held for four years from 1992, until a few weeks ago, when I happily handed over that task to the noble Baroness, Lady Wilcox, whom I see in her place on the Government Benches. The Institute of Trading Standards Administration is the professional body for trading standards officers engaged by local authorities in the important task of upholding high trading standards and fair dealing in the market place, to the benefit of the general public and legitimate business.

I am proud of the fact that the institute asked me to be its president when I left my post as Director-General of Fair Trading in 1992, because, after all, I had been head of a non-ministerial central government department and they are local government officers. I am happy to imagine at any rate that there were good relations between those two parts of central and local government and trust between us, in the pursuit of similar objectives.

Yet I do not disagree with the general thrust of the Select Committee's report. In general, I do not have much doubt that relations between central and local government are, as it put it, "unsatisfactory and can be improved". Given the all-party and cross-bench membership of the committee, the report's title, Rebuilding Trust, is significant. After all, one can only rebuild trust if it has broken down. Trust is, at its best, a two-way concept.

I suppose that central government in the 1980s, with its strongly assertive and conviction politics agenda, did not trust local government to conform to central government's objectives for policy and spending restrictions, and, as the noble Baroness, Lady Platt, indicated, some local authorities overreached themselves in ambitious and often silly extensions of local authority competence. Local authorities, for their part, lost trust in central government because their powers and functions, and spending capacities, were drastically reduced and their role marginalised when vital areas of policy were transferred to central government or central government-appointed quangos.

The Select Committee report steers clear of commenting upon local government structure. I fully understand that, and I do not complain. But I believe that another aspect of local government distrust of central government has been the launch of large-scale local government reorganisation in all parts of Great Britain. I follow again the noble Baroness, Lady Platt, "If it ain't broke, why fix it?" I wonder what all that restructuring was in aid of. The exercise seemed to involve a remedy in search of a problem at least in England, as distinct from Wales and Scotland. There was massive consultation through the work of the Local Government Commission, although one must admit that that seems to have resulted in a great deal of confusion and inconsistency between one part of England and another. When Sir John Banham did not invariably

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come up with solutions acceptable to central government, he was replaced as chairman. In Wales and Scotland, reorganisation simply went ahead imposed by Act of Parliament.

Trading standards form but a small part of local government activity, but they are important to consumers of goods and services of all kinds, and, as I said, to legitimate business. I point out that at one time I led a delegation of trading standards officers, all employed by local authorities, to see various Ministers. When we went to see John Redwood, then Secretary of State for Wales and Allan Stewart who was then at the Scottish Office, I did not find them at all rewarding occasions. Our concern was that splitting up existing cohesive, hard-working and useful trading standards departments between several new unitary authorities would be bad for efficiency and even the viability of the service, and therefore for the protection of the public. These concerns were brushed aside with the suggestion that local authorities could after all co-operate voluntarily one with the other. There could be voluntary co-operation between different local authorities. Can the government tell us in the course of today's debate whether such arrangements in Wales and Scotland have been made?

The report of the Select Committee expresses the general position extremely well. I do not believe I need to apologise for quoting it again. The Select Committee reports that many in local government feel that they have been crushed and abused by central government over many years. I believe that that expresses the matter with great clarity. I particularly like the conclusion of the report that acceptance of its recommendations would give local authorities more space in which to breathe and develop.

I detect in the report a moderately optimistic note to the effect that recently there has been an improvement in central government/local government relations. I quote Councillor Sir Jeremy Beecham, chairman of the Association of Metropolitan Authorities. He has already been quoted today. He gave evidence to the committee that in the past few years there had been an increasingly relaxed relationship between Department of the Environment Ministers and representatives of local government. So that I do not partially quote him, he added that he was not sure whether that extended to other government departments.

Sir Jeremy was one of three leaders of major local authorities on my party's Regional Policy Commission (on which I also served) whose report was published earlier this year. I should like to conclude my remarks this afternoon by mentioning two of the commission's conclusions. They are particularly relevant to the subject of today's debate and give some cause for optimism for the future. One of our conclusions was that local government could and should give leadership. My noble friend Lord Williams of Elvel referred to community leadership as a vital aspect of local government work. We believed that it should give leadership to much needed economic and social regeneration, particularly in the worst parts of urban conurbations, in partnership with private as well as various community interests.

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The Select Committee report gives a number of examples of partnerships between local authorities and other bodies, for example to achieve successful single regeneration budget bids. An example of successful local authority leadership is the work of Lancashire Enterprises which was started by Lancashire County Council. It has a number of achievements to its credit, including the rescue of Leyland Daf in 1993, investment in small-scale management buyouts and worker buyouts and the provision of venture capital to local entrepreneurs. Recently, someone has commented that partnerships are becoming as familiar a feature of urban life as traffic jams. At least they are more constructive.

I also want to mention our approach to the 10 government offices for the regions established two years ago to co-ordinate the work of central government departments in the various regions of England. We sought to follow the twin principles of democratic accountability and subsidiarity. We proposed that a Minister at Cabinet level be appointed with overall responsibility for co-ordinating and integrating regional matters for which the government offices for the regions would be accountable. In time, as regional chambers or assemblies were set up some of the functions of the government offices for the regions should be transferred to them, ensuring more direct accountability to elected representatives of local and regional communities.

I believe that the work of the Select Committee has been extremely timely. History may show that it led the way to a more collaborative and co-operative relationship between central and local government--one in which the inevitable tensions between different levels of government are creative rather than negative.

4.25 p.m.

Lord Beloff: My lords, those of your Lordships who have studied the list of members of the Select Committee will be aware that I stated no interest. I believe that in that I was unique; I was a member of the committee who had never served in, or been in any organisation related to, local government. My interest, such as it was, was confined to local government in the late 17th century, about which I wrote my first book, when England was governed by justices of the peace, local landowners, clergymen and the closed corporations of the towns. Whether we were then governed better or worse is not a matter that we need to go into today.

When we refer to local government we mean locally elected government. My interest was to find whether, in a modern advanced industrial society, that is a viable proposition in the sense that, unlike the situation in the 17th century, more people now work in one place, get their recreation in another and reside in a third. So the question of local identity is itself a problem. We were confronted with passionate advocates of local self-government and increased powers for local elected bodies both in the scope of their activities and their freedoms. I, and no doubt my colleagues, were interested in the evidence of the witnesses who came before the committee. For me, it was a wholly new world. I was like an anthropologist in the rain forests of New Guinea. They were strange creatures. My conclusions were somewhat surprising. In the whole series of oral evidence--I do not

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believe that I missed a single session--those who came out best were the officers of local government. Their evidence was in general clear, to the point and well expressed. Those who came out worst were, without exception, civil servants. It may be that they are so restricted by their duties to Ministers that they are unable to answer questions on which they have not previously received instructions. It might be referred to as "smothered by Osmotherley".

We have to ask ourselves whether Select Committees of either this House or another place can properly fulfil their proposed functions if an important part of government that makes so many of the decisions is inhibited in helping those committees reach conclusions. I was not in the least surprised--I imagine that the noble Lord, Lord Hunt, to whom we owe an obligation, was also not surprised--by the tone of the White Paper in dealing with our financial suggestions since the representatives of the Treasury showed a total inability to understand the subject we were investigating. That was a problem.

The other problem which exercised me and which still exercises me after hearing the enthusiastic proponents of some kind of reinvigoration of local government is whether there is a popular demand. My noble friend Lady Platt of Writtle who, unlike me, has vast experience in this field, says that parish councillors, town councillors, county councillors and so on should be elected in the light of the services they can perform for their local communities and not as a demonstration of people's attitude to the government in power or to the Opposition of the day.

That might be a moral injunction but I think it bears no relation to what research indicates and, indeed, what the bare statistics indicate about local government. If people were really interested and if they thought that different councillors would give them better roads, better miniature golf courses, or whatever the current phrase may be, would they not seek opportunities to question them about such matters and eventually to vote? The low turn-out in local government elections is a fact which the committee could not escape and which your Lordships, in considering the matter, cannot escape either.

Democratic local government was created in this country as part and parcel of the democratisation of government as a whole. The various reforms in local government did not exactly coincide with but were roughly parallel to the enlargements of the franchise for Parliament; that is, they were part of a general movement by which power was diffused from the few to the many.

I have come to doubt whether in this country there is an enthusiasm even for national self-government. After all, we have allowed an increasing part of Parliament's duties to be transferred to the institutions of the so-called European Union without much protest on the part of the public; in fact without an awareness that it is happening. I wonder whether noble Lords opposite who hope to form part of a forthcoming Labour Government appreciate that Mr. Blair as Prime Minister will have

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less influence on our destinies than his predecessor, Mr. Kinnock, who is a Brussels Commissioner. There is someone with power.

If we are not interested in self-government as a nation, it is perhaps understandable that we are not interested in self-government locally. When one questioned the enthusiasts for self-government on the ground, locally, there was an inability to show a demand from the public for the return of greater power to local authorities.

Another factor to emerge very clearly was that without a greater degree of fiscal autonomy there was nothing much that local government could do to improve its powers or its performance. The cry, "No representation without taxation" was heard from successive witnesses. I venture to disagree with the noble Lord, Lord Williams of Elvel, about the poll tax. The more I listened to people saying how important it was that there should be a direct relationship between those who were receiving the services and those who were paying for them through local taxation and that that relationship should exist through the elected councils, the more it became clear to me that the poll tax was a very good idea and would have been a very popular way of returning power to local government if it had not been messed up in its application. In principle what we were being asked for was a form of poll tax which would have re-created the link between local expenditure and local taxation on the one hand and local services on the other.

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