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Baroness Hanham: I have always thought that the Mayor of London was a figurehead. I am concerned that he might shuffle the money through to his lesser bodies. However, the Minister has made the position clear and I withdraw the Motion that the clause should stand part.

Clause 33 agreed to.

Clause 34 [Wales]:

On Question, Whether Clause 34 shall stand part of the Bill?

Baroness Hanham: This clause refers to the position of Wales and how the grant-making provision under Clause 31 will be applied. Presumably this is a fully devolved matter. It is made clear in Clause 31(5) that no Treasury consent is needed for grants made in Wales. The question here, therefore, is one of scrutiny.

Taxpayers' money is levied by central government in Westminster, but we retain no control over how this money is spent and disbursed under the grant system provided for here. The matter will be one for the discretion of the Welsh Assembly. I am not challenging the devolution process—not really—I merely ask what provisions are in place in the Welsh Assembly to ensure that the eventual dispersal of funding in the form of grants made under Clause 31 is subject to a satisfactory level of public scrutiny and transparency.

For Ministers to make a grant in England, Treasury consent is needed. Why is there no similar provision for Wales? The Welsh Assembly cannot levy its own

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taxes; is it right for it to have absolute discretion in the use of United Kingdom taxes for grants in Wales, without any central government control?

Can the Minister say whether this marks a significant change in terms of grants and funding for the Welsh Assembly? On what basis have the changes been made? Will regular reports be made available of the progress of this system?

Lord Rooker: I shall give a short answer to the Motion because a longer response will be made later. I can confirm that the Welsh Assembly intends to put in place controls to ensure that the power is exercised prudently and properly. What I do not know is when or whether we will know even what are to be the draft controls before, say, the Bill receives Royal Assent.

However, it is axiomatic that, following the devolution settlement and the probity with which the Welsh Assembly is operating, the grants would not be made in Wales until controls have been put in place by the Assembly. I can put it on the record that those controls will be put in place which I suspect, although I do not know, will perform the same function as that performed by the Treasury for England.

Baroness Hanham: I think the Minister said that no grant would be paid under the terms of Clause 31 to the Welsh Assembly under Clause 34 until the United Kingdom Parliament or Ministers were satisfied that the controls were in place. Is that correct?

Lord Rooker: No, that is going much too far. I am simply saying that we have repeatedly said that, in England, the Treasury's consent is needed for award of the grants and that, in Wales, Treasury consent will not be required before the Assembly exercises its power to make grants. That is consistent with the devolution settlement. However, the Assembly intends to put in place controls to ensure that the powers are exercised prudently and properly. I am therefore assuming—it has to be the case—that before the Assembly exercises its powers to make grants it will have put in place the controls which I outlined to ensure that the functions are exercised prudently and properly. I did not say that grants would not be made payable after Royal Assent.

The Assembly will exercise the powers in Wales as that is consistent with the devolution settlement. However, it will not exercise the powers before it has put in place those controls. As I have said on the record, the Assembly intends to put in place controls to ensure that the powers are exercised properly. I therefore assume that no grants will be paid until those controls are put in place.

Baroness Hanham: Will the Minister also confirm that the grants in Wales will be listed as they are in the United Kingdom under the local government finance settlement, as we have discussed in previous debates?

Lord Rooker: I assume that that is the case. The Welsh Assembly will be the grant-paying body. This clause is not about UK Ministers paying grants to Welsh authorities or the Welsh Assembly. I should

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perhaps say that there is open government in Wales. Indeed, people in Wales sometimes claim that government is a bit more open there than it is in England. That is what devolution is about.

There should be no doubt about whether the Welsh Assembly will publish who has received grants, although it might not be done exactly as it is in England. I can say that no secret grants will be paid in Wales under the proposals. However, listing might not be done exactly as it is in England—by adding to the list, as I said, when the rate support grant and all the other grants are dealt with. There will be no secret grants, and a list of grants showing the amounts and the receiving councils will be made available.

Baroness Hanham: I hear what the Minister says. I assume that his assumptions are correct.

Clause 34 agreed to.

Clause 35 [Interpretation of Chapter 1]:

Baroness Maddock moved Amendment No. 96:

    Page 16, line 2, at end insert—

"( ) a town and parish council"

The noble Baroness said: Amendment No. 96 is a very simple amendment. It adds town and parish councils to the list of local authorities for the purposes of Part 3, Chapter 1 of the Bill. It is a probing amendment. The next clause talks about best-value grants for parishes. However, there is a question as to why town and parish councils cannot be part of the grant-paying regime. I suspect that part of the answer is that this is not something that the Government do very often. However, if they are going to try to introduce legislation that allows for many different possibilities, which clearly is the purpose of much of the Bill, it seems logical to include town and parish councils in the list. I beg to move.

Lord Hanningfield: I support the amendment. Later amendments deal with parish councils. I thought that an objective shared by the Government and the rest of us was to do what we can to build up and support our town and parish councils. I therefore very much support the amendment.

5.45 p.m.

Lord Rooker: Well, there is a logical explanation, in that the power in Clause 31 is intended to be a much more streamlined and flexible alternative to Section 88B of the Local Government Finance Act 1988. Parish and town councils are not among the bodies that can be paid under that Act; they do not receive grants under Section 88B. Clause 31 is designed to be, not a replacement for that power, because it will remain on the statute book, but a much more streamlined alternative. The Government have recognised that there is a need to provide the power to grant for parish and town councils for the purpose of

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best value duties under the beacon council scheme. Clauses 36 and 37, to which we shall shortly turn, deal with that.

Baroness Maddock: I heard what the Minister said; in part I pre-empted his reply; but, if I may say so, that was not a terribly logical answer. However, given what he said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hanham moved Amendment No. 97:

    Page 16, line 7, at end insert—

"( ) No power under this section is to be exercisable in relation to a regional assembly in England."

The noble Baroness said: The amendment is intended to probe where regional assemblies may stand in the new expenditure grant system, as laid out in Clauses 31 to 35. I know that the Minister will tell me that there are no regional assemblies yet, but they are in process. As we know from the Regional Assemblies (Preparations) Act 2003, which was recently passed by the House, and from what the Minister said in Committee last week, it is likely that a referendum to establish a regional assembly in one of the regions will be called before too long—always assuming that, somewhere along the line, the soundings exercise can be made to square with what is proposed.

That means that, before too long, we may have a fully fledged assembly functioning with a certain amount of devolved and independent power. Under Clauses 31 to 35, conditions are set out to adapt the expenditure grant provisions to the unique circumstances of the Greater London Authority and the Welsh Assembly—as we have discussed.

How would regional assemblies fit into that scheme? Is it envisaged that they could receive grant from central Government, as can the Greater London Authority? Would conditions be imposed for the use of such grants, as for the Greater London Authority, under Clause 33(2), or would they have autonomy, as does the Welsh Assembly, in the disposal of any grants made? What would be the allocation of funding to regional assemblies?

Throughout discussion of the Regional Assemblies (Preparations) Act 2003, there was considerable confusion about that. The Minister told us then—I can hear him saying it now:

    "There will be no new powers, no new money and no new tiers".—[Official Report, 24/3/03; col. 552.]

My noble friend Lady Blatch, among others, pointed out that if the powers of a regional assembly were to be merely scrutinising and advising on regional strategy, it would have no need of the precepting powers that are to be made available to it. As we learnt during discussion of that Act, regional assemblies will not be categorised as local authorities, as the Greater London Authority is not. Nor will they take powers from local authorities, according to the noble Lord, Lord Rooker.

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The situation is complex and unclear and we would welcome clarity about how grant funding and expenditure provision under this chapter would fit in with the Government's plans for regional assemblies, if they are even set up. I beg to move.

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