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Industrial Development (Financial Assistance) Bill

3.19 p.m.

Brought from the Commons endorsed with the certificate of the Speaker that the Bill is a money Bill; read a first time, and to be printed.

London Local Authorities Bill [HL]

Read a third time, and passed, and sent to the Commons.

Regional Assemblies (Preparations) Bill

3.20 p.m.

The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Lord Rooker.)

On Question, Motion agreed to.

Baroness Blatch moved Amendment No. 24:

(1) Information shall be circulated to voters before any order is made for a referendum providing details of—
(a) the powers, responsibilities and constitutional arrangements of elected regional assemblies;
(b) the costs incurred by the boundary committee and the forecasted costs of any subsequent local government reorganisation;
(c) the administrative and initial starting costs for the establishment of regional assemblies;
(d) the predicted annual costs for the running of regional assemblies."

The noble Baroness said: My Lords, I rise to speak probably for the last time on this type of amendment, asking for information about powers, responsibilities and constitutional arrangements, about the costs forecast to be incurred by the Boundary Committee—we know that the Government have done work on this—the administrative and initial starting costs for the establishment of regional assemblies and the predicted annual costs of the running of the regional assemblies, on which the Government have also done some work. The amendment would ensure that voters are able to make an informed choice, when they vote in a referendum on the options. The relevant information must include information about costs and the sources of the money.

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I shall not dwell on the first part of the amendment. The case that voters should be informed about what they are voting for is irrefutable. I am sure that the Minister will agree with that, as he has done all the way through our deliberations on the Bill so far. The rest of the amendment relates to the provision of information about the costs of creating an elected regional assembly. Information about the cost of an elected regional assembly is important. It was important enough for the Labour Party to include in its 1997 manifesto a commitment that the exercise should be "cost-neutral". We support that proposition, and I would be interested to know whether the Minister holds to that manifesto pledge. Do the Government now believe that it is right that the reorganisation should divert funds away from investment in our public services? We should make no mistake about it: if the scheme is not cost-neutral, the only money that could be provided for it is money that could be spent on public services.

I have no doubt that the Minister will say that it is difficult to calculate the costs accurately. That is not what the amendment asks for, and, anyway, I agree. However, that does not mean that no attempt should be made to do so, and, as I said, we know that the Government have done something about it.

We have been through reorganisations before. I hope that we have all learnt a lot from them. There is information from the previous round of local government reorganisation—10 years ago—that has been independently analysed. The work of the Local Government Commission, as analysed by Professor Michael Chisholm, suggests, for example, that the costs of local government reorganisation would be well over £2 billion. That figure is widely regarded as an under-estimation of the true cost.

The Government might also argue that, although there will be initial costs, there will be savings in the long run. Again, it is difficult to see how they reach that conclusion. Local government reorganisations tend not to cut costs. The reform of local government in the early 1970s led to an increase in staffing of nearly 5 per cent and to the spiralling costs that led to the financial crisis that precipitated the Layfield inquiry.

If one applies to West Sussex the Ernst & Young model accepted by the Local Government Commission to assess costs and savings associated with reorganisation to a unitary authority, one can see that only on the basis of a unitary county would the transitional costs be repaid within a reasonable timescale. Even if one inflated the savings estimates from the model by 10 per cent and reduced the cost estimates by the same amount, one can see that reorganisations into more than one unitary tier of government do not pay the transitional costs.

Where will the money come from to pay for the transitional costs? In the previous round of local government reorganisation, according to Chisholm, upwards of 30 per cent of the costs of reorganisation were met from local authority reserves and revenue accounts. Is that to be the case again? The answer is clear: local people will, in the end, be asked to pay.

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They will pay through their council tax, and they will pay through a reduction in the quality of service delivery. The Government will, no doubt, have their own figures. I would be glad to hear them and would welcome a chance to examine the cost models on which they are based.

It is important that we have a debate on the matter. People must be provided with the information that will enable them to make an informed decision. That is the purpose of the amendment. I beg to move.

The Earl of Caithness: My Lords, your Lordships will not be surprised if I return to the question of powers. Yesterday, the noble Lord, Lord Rooker, said that he would not adjourn the House until I got a reply to the Written Question that DEFRA refused to answer. Sadly, I did not hold the Minister to that. If I had, we would not have adjourned, and we would have lost today's business. I have still not got a reply.

I leave it to your Lordships to decide whether that is deliberate obstruction or sheer incompetence on the part of the Government. I do not know. It is difficult to take part in a debate about an amendment relating to powers, when I do not have the Answer to my Written Question. I hope that the Minister will regain his touch. Perhaps, he should be in charge of more than one department. He got me a quick reply from his department; if he ran more than one department, we might all get quick replies. I shall have to come back to the matter when I have the information to hand.

Paragraph (d) of the amendment refers to the costs. My noble friend Lady Blatch has made all the relevant points, and I agree with her that the people who will pick up the tab will be the council tax payers, which will mean a reduction in services.

Lord Peyton of Yeovil: My Lords, I have great sympathy with my noble friend Lord Caithness on the question of powers. I speak in the light of yesterday's experience, which was such a sad occasion for me. I started by giving the Government every chance to illuminate the darkness of my mind and clarify, I think, eight or nine points that I raised. Noble Lords will imagine the depths of my sorrow, when I received absolutely no enlightenment.

I know that the noble Lord, Lord Evans of Temple Guiting, who replied to the debate, would have done his utmost to help me; he is always helpful. On this occasion, however, either no one told him what the answers were or there were no answers because nobody had even worked them out. I acquit the noble Lord of any intention to disappoint me.

I notice that the amendment moved today by my noble friend Lady Blatch, with her customary eloquence, is very similar to the amendment that I moved yesterday. I can hardly resist the temptation to express something of the disappointment and mortification that I felt when my amendment of yesterday and the remarks that I made then evoked no attention from my Front Bench, except a desire to get on with the business. I had not, at that point, obstructed the business—but be that as it may.

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Today, I shall resist the temptation to repeat all my questions of yesterday. I shall content myself with this semi-simple question: what powers will the assemblies have? There is a second question: where will they come from? We cannot just manufacture powers. The new powers that we are to give to the assemblies must come from somewhere. That will cause Ministers great discomfort. I cannot recall a government being anxious to shed powers. It is rather to the taste of Ministers to enlarge their empire, not to shrink it. I mean no disrespect to that very important personage the Deputy Prime Minister, but he is the last Minister who is inclined to shrink his empire, which now stretches over many pages in the Civil Service Yearbook. It is a record size; he has 120 columns.

Where are the assemblies' powers going to come from? Which Ministers are going to say, "We have more powers than we need, so we will give them to these worthy assemblies"? There are difficulties: no one has decided how many members will be in the assemblies and where they will come from. A great deal is undecided. It would be nice if one or two of the Minister's colleagues were to say, "We realise that this is an important occasion for self-sacrifice and we are prepared willingly to part with some of our powers". The answers to those questions would be fascinating. I assure the Minister that if he will be so gracious as to let me have a reply I shall maintain a peaceful silence thereafter.

3.30 p.m.

Lord Waddington: My Lords, the Minister still owes me a reply to a question I posed some time ago. I asked what would happen if there was a local government review followed by a referendum resulting in a no vote and who would bear the thrown-away costs. The Minister was unable to give me an answer when I last posed the question. Will he now assure me that unfortunate council tax payers will not bear the cost of such an abortive review?

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