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The noble Lord, Lord Newby, raised a point that I had anticipated about the balance between the wording in the Bill and its dependence on secondary legislation; he asked whether the Bill was essentially a carrying document rather than a document of substance. Many of the important features of the saving gateway, including the list of qualifying benefits and credits and the method of calculating maturity payments, are set out in the Bill. However, many of the details of the scheme’s

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operations are relatively technical and are better suited to secondary legislation. It is also important that there is some flexibility for the scheme to be amended, developed and improved in the future in the light of experience to ensure that it continues to meet its objectives without the need for further primary legislation. We will of course look closely at the report of the Delegated Powers and Regulatory Reform Committee on the Bill and will consider these issues again carefully ahead of the Committee stage.

The noble Lord, Lord Newby, raised questions about providers—a point also covered by the noble Baroness, Lady Noakes. The noble Lord asked whether we were creating something that no one would be willing to offer in the commercial market. I have in front of me quotations from Mr Alan Cook of the Post Office which take me to a rather different conclusion. I think that banks, building societies and credit unions all now recognise the increased value of a loyal depositor base from retail deposits, rather than reliance on wholesale deposits. The opportunity is here for banks and building societies, including the Post Office and credit unions, to develop a new customer base, because we are seeking to promote a new savings habit among a group of people who either do not have a savings habit at the moment or—this is very important—have savings but not within the regulated formal banking system. Taking people into the regulated financial system will, in itself, be a huge benefit arising from this important legislation.

I am sure that the noble Baroness, Lady Noakes, would expect me to point out that there are no nationalised banks. There are banks in which the Government have a large shareholding and there are banks in temporary public ownership, but there are no nationalised banks.

The noble Lord, Lord Newby, also raised questions about Thoresen and issues concerning advice. I will ensure that, when we come to this matter in Committee, I am informed and can advise the House or I will write to those who have participated in this debate, updating them on where the Thoresen projects are at the moment. I am afraid that this matter does not currently fall within my sphere of recollection but I will definitely ensure that we are well informed ahead of Committee.

Finally, the noble Baroness, Lady Noakes, welcomed the Bill with what, for her, was an unusual and distinct enthusiasm, which will warm the hearts of new Labour and the left. There is a belief that after many years we are finally beginning to get things right and this may well be the start of a trend. She asked why it has taken us so long to bring about the scheme. The answer is that we have been carrying out pilots. If we had not, we would probably be criticised for that as well. Pilots will produce hard evidence. The noble Baroness said that she wishes to see more detail of that hard evidence. When we next come to the Bill, we will make every effort to satisfy that requirement.

Questions were asked about the use of savings balances, but I am not sure in my own mind that that is necessarily relevant to the legislation. The purpose is to establish a habit and a pattern of saving without being prescriptive on the use of that saving. If someone used the saving to finance a special need or to meet an emergency, that would seem to be entirely consistent

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with the expectations of those who advocate thrift. The important question is: having run down the balance through force of necessity, will people, when circumstances permit, re-engage with the financial institution with which they have established a relationship and a comfort level? Will walking into a bank or building society no longer be an inhibiting or intimidating experience but one with which they are comfortable?

The noble Baroness also asked whether the targeting was appropriate and, in particular, whether it should be defined in the way that the eligible community is. On that, the real value and virtue of this approach is its simplicity. We are creating a product that is simple, easy to administer and easy to understand, without the need for a means test or complicated form-filling. No doubt, as we go through the detail of the Bill in Committee, noble Lords will have an opportunity to test those attractions versus the counterarguments about the appropriateness of the defined target group, or the “rough edges” issue, as the noble Lord, Lord Newby, described it.

I think that I have covered nearly all the points that were raised on Second Reading. If I failed to do so, I will of course write to any Member who raised a point that I overlooked. I commend the Bill to the House.

Bill read a second time and committed to a Grand Committee.

Local Democracy, Economic Development and Construction Bill [HL]

Bill Main Page
Copy of the Bill
Explanatory Notes

Report (First Day)

4.36 pm

Clause 1: Democratic arrangement of principal local authorities

Amendment 1

Moved by Lord Tope

1: Clause 1, page 1, line 7, after “duty” insert “to use reasonable endeavours”

Lord Tope: My Lords, I move Amendment 1 and will speak to Amendments 2, 7, 14 and 16. I again declare my interest as a councillor and a member of the executive in the London Borough of Sutton and—perhaps because of that—as a member of the Sutton Partnership Board, the local strategic partnership; the Safer Sutton Partnership Service, which is the local CDRP; and numerous other bodies that councillors inevitably find themselves on.

More pleasantly, I thank the Minister and her officials on behalf of my noble friends for the considerable lengths to which they have gone to help us to understand the purpose and intentions of some parts of the Bill; to persuade us of the virtues of other parts of the Bill; and generally to convince us not to be a nuisance at this stage. The Minister has been partially successful in that. We certainly have a better understanding. I am not certain that we have a greater liking for some parts

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of the Bill and, inevitably, there are some parts on which we simply disagree. That disagreement will be resolved in the normal way in a democracy. We are grateful for the lengths to which the Minister and the noble Lord, Lord Patel, have gone to work with us on this.

Chapter 1 relates to the duty to promote democracy. First, for the avoidance of any misunderstanding, my noble friends and I have no disagreement whatever with the importance of promoting democracy. Indeed, most of us have spent most of our adult lives doing exactly that: trying to encourage an active and participatory democracy; helping people to understand the system—for all its virtues and faults—better; and to be able to work in that way. We have no problem whatever with that.

Secondly, there were suggestions at an earlier stage that we did not recognise that there is a problem. Yes, there is a problem. We certainly recognise that. It is generally accepted that, for a range of reasons, local government has improved hugely in its efficiency and effectiveness in the last decade or so.

Sadly, the public perception of local government has not improved at the same rate. There are reasons for that, which are rather deeper than a simple lack of understanding by the public. Of course it is good, right and proper that the public should understand how local democracy works in all its many aspects and that local authorities should do whatever they can and more to promote that, but there is a more fundamental problem than seems to be addressed in the Bill. It is very difficult to persuade people to be interested and to read something when they are simply not interested. You can explain—most local authorities explain their processes and procedures—but if the public are not interested or have a deeply cynical view because the local authority may be simply unable to do what they think it should do, no amount of well written literature or excellent websites will convince people to take an interest in that in which they are not interested.

So we have some reservations, to put it no stronger than that, about making it a statutory duty for principal local authorities to promote democracy. We have no problem with their doing so, indeed, we would encourage them to do so, but making it a statutory duty seems to us to be missing the solution to what is a fundamental problem. Nevertheless, we accept that the Government want to make that a statutory duty and that in doing so, they are responding to many representations made to them, not least by the Councillors Commission, to which the Minister referred many times. We share the reservations of the Local Government Association, which, in accepting the need for a statutory duty, stated:

“The LGA believes the Government could be much lighter in its approach by just setting out the ... duties and then leaving it to local authorities to decide what works best for their communities and residents”.

That sums up our position very well. It is for local authorities to determine what is best to suit local circumstances, local culture and local conditions.

The Minister has assured us throughout previous stages that the Government intend a light-touch approach; that they are trying very hard to curb the natural

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instinct to be prescriptive. I entirely accept that. I am certain that that is the Minister's intention and strong wish, but it all depends on the guidance. As usual at this stage of a Bill, we have not seen the guidance. We do not know what is in it. Inevitably, as guidance is written, there is a need to explain a bit more what is meant, or even what is not meant. As that goes on, gradually it becomes more and more descriptive and prescriptive.

Until we see the guidance, final reassurance is not there. Guidance is guidance by definition, but inevitably it becomes a standard by which any local authority is judged. If a local authority is judged to be in some way falling short of the standard in the guidance, which may be simply by perception because the local authority is unable or unwilling to do what petitioners want it to do, for instance, it is judged by that. What is, I am sure, a genuine desire to be light touch gets heavier as we go along. Those are our concerns and that is why we would much rather take the position of the Local Government Association of making it a statutory duty but leaving local authorities much freer to determine how they fulfil it.

Amendments 1, 7, 14 and 16 add the words “to use reasonable endeavours” at appropriate places in the Bill. That is in part to try to provide some reassurance to local authorities against the dangers that I have just described and, secondly, because of the need to balance the duty with the cost. The Minister said in Committee that the Bill provides for the extra cost. With respect, a Bill or even an Act, does not in itself provide any extra money. It suggests what might be the total cost of its provision; it does not give local authorities any money. I oppose specific grants for specific tasks. However, it means that any additional resources are wrapped up in the general settlement and invisible—indeed impossible—to discern. In earlier days, as a leader of the council, I was constantly being told, when any new duty came in, that it was in the SSA. We do not have SSAs any more but the system is still there and any additional resources for extra duties are always said to be buried somewhere in the settlement and nobody can ever find them.

4.45 pm

That might well be the case. Local authorities fortunate enough to receive any additional funding—small as it would be—would have it as part of their general grant settlement and would have to balance its use with all the other increasing demands placed on local authorities these days. Even those authorities fortunate enough not to be floor authorities, would not necessarily recognise any benefits simply by the enactment of this Bill. Many local authorities, particularly in London, are what is called floor authorities and will not get any additional resources anyway. Using “reasonable endeavours” is a qualification that would enable local authorities, I hope, to act in a proportionate way in meeting their statutory duty and not in a way that some of their residents might expect them to do, particularly if they are dissatisfied with the outcome.

Amendment 2, which is a little different, requires a principal local authority to promote:

“The duty of members of the authority as democratically elected representatives”.

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In Committee, in support of the Bill, the Minister referred several times to the recommendations of the Councillors Commission. The clause recommends the commission’s recommendations 1a and 1b—they are encapsulated in the Bill—but they are only some of its recommendations. Recommendation 1c said,

Recommendation 1d said,

Therefore, the total recommendation is not fully met in this clause. I imagine that the Minister will say that it is adequately covered by Clause 1(2). However, such was the importance given to it by the Councillors Commission that a passage in the report supporting their recommendation said,

It went on to speak of the All-Party Parliamentary Local Government Group’s report, which echoed that view, and concluded that councils should do more to encourage people locally to consider putting themselves forward for election. It argued that councils should have a formal duty to do so, recommending that there should be a new legal duty on councils, possibly on the returning officer, to provide information about the role of councillor in order to support recruitment.

Those were actually the Councillors Commission’s recommendations. Having them in Clause 1(2) in a rather general sense does not, in any way, give them sufficient regard. If the Minister is rightly going to cite what the Councillors Commission wants, and incorporate one part of its recommendations in the Bill, the other part is of at least equal importance and should also be recognised and included. That is the purpose of Amendment 2.

Lord Graham of Edmonton: My Lords, I enjoyed the contribution that we have just heard, which comes from the coal face. The noble Lord is actively involved in and very knowledgeable about local government as it operates at this time. However, from my experience from long ago, my first question when I read,

in Amendment 1 was: why is it necessary to put those words into the clause? Is it because, if they were not in it, there would be the fear that unreasonable endeavours would be used?

I cannot imagine a council, council officers and those in the general milieu of the local government scene in any area not using reasonable endeavours. If the noble Lord, Lord Tope, is implying that no endeavours would be made at all without that phrase, I beg to differ. More than once in Committee and on Report, the spectre has been raised of too much prescription and too much law being laid down as to what one can and cannot do. The Minister is in the position of being damned if she does and damned if she does not.

The clause and, indeed, the Bill make a reasonable endeavour to be clear. The noble Lord, Lord Tope, is saying, “That is all very well as far as it goes, but I

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want to egg the pudding and gild the lily”. Where do we stop? There is no doubt that, from his experience and mine, the day we finish with this Bill we will think of 100 ways in which it could have been improved but we did not do so. In other words, the second thought is always there. I simply ask whether this amendment seeks to do too much.

Amendment 2 would insert the words,

All the members of the authority are democratically elected, unless the noble Lord, Lord Tope, can tell me of circumstances in which a member of a local authority is not democratically elected. Again, I ask—I do not want to make too much of this—why the noble Lord and his colleagues think that these amendments are necessary. I think that they are superfluous and I will be interested to hear what the Minister has to say.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My Lords, I thank the noble Lord, Lord Tope, for the gracious way in which he introduced this first debate on Report. We went over this Bill in great detail in Committee and I am very glad to share our understanding with him. Clearly we are all very much in favour of promoting democracy and we recognise that there is a problem in so far as we would like to see a livelier and more engaged local democracy in our communities. We have that common ground between us, so I will carry on trying to persuade him to support me on things with which he may, strangely, disagree.

In this short debate, I will address the noble Lord’s amendments and speak to my own and I will briefly recap what the duties to promote democracy set out to achieve. Clause 1 places a duty on all principal local authorities—including county and district councils, unitary authorities and London boroughs—to promote an understanding of their decision-making arrangements and those of various other public authorities that provide or influence the provision of services in their area and to promote existing opportunities to participate in those arrangements. Local authorities are expected to promote such understanding to people who live, work or study in the area. It is an ambitious intention, but, as it is set out here, it is relatively modest. I take my noble friend’s point and should say that we have tried to balance it so that it is not overloaded by detail and certainly not overloaded by prescription.

In essence, we want to encourage greater involvement in local democracy and we start from the premise that there is a lack of understanding. We aim to ensure that people know what services the council and other public bodies operating locally provide, what councillors do, how decisions about services are made and how people can participate in and influence them. People will then stand a better chance of getting involved in local politics, which, as I have said, means standing not just as a local councillor but also as a magistrate or school governor. The duty is intended to ensure that the relevant information is available to those who seek it and that it is promoted beyond people who would normally get involved to those who are less engaged and therefore underrepresented.

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In Grand Committee, we spent some time discussing the evidence and I do not want to repeat what I said at that time. The Councillors Commission, having considered the evidence, thinks that this is a vital way forward in the effort to revitalise local democracy. Indeed, evidence continues to come forward. Recently, officials have been seeking to add a question to the citizenship survey about what people think of their councillors, but the proposal had to be dropped because in the trials that we carried out not enough people knew who their councillor was or what they did for the responses to be meaningful. That is a serious finding.

Also in Grand Committee, the noble Lord, Lord Best—he is not in his place—speaking as the president of the LGA, said that the duty to promote democracy should be recognised as a core function of local authorities and that the association supported the duty on the basis that it was not overly prescriptive. As the noble Lord, Lord Tope, gracefully acknowledged, we are trying hard to achieve a light-touch approach. The duties are not prescriptive; they set out the scope of what we are asking local authorities to do, but we have not suggested how they should go about it. For all the reasons that we have given in debates in this House over many years, we do not lightly seek to put duties on local government.

The noble Lord, Lord Tope, pointed out the dichotomy between the measurable achievements of local government —the real successes that we have seen in improving services as measured by the CPA over the past decade—and the perception of the community that local government is somehow still not up to the mark or even failing. Local government has faced many challenges over the past years and it is frustrating for those working in the service to know that their achievements have not been accepted by the local community. We are trying to address issues of reputation and perception as well as seeking to engage more people through attracting them to serve in local government. We need to do this for all the reasons that we have discussed so that we can ensure that future councils are shaped by a more diverse range of people who reflect the views and experiences of the full community.

However, what is gratifying is how local government has already responded positively to the duty to involve, which comes into force in April. It marks the next step in making sure that people have the opportunity to become involved because they know how to do so. We heard examples of councils doing something along the lines of what we seek; indeed, many are doing it very well. However, it is not done well or at all in other places. Therefore, in the duty in Clause 1, we are trying to ensure that every person, no matter where they live, is able readily to access the information and knows how to seek it out. We want all local authorities to see promoting democracy as a positive and essential part of their core business. We recognise that it is a new responsibility, although it is bound to build on existing work. The noble Lord, Lord Tope, is right to say that we have addressed it in terms of a new burden and so have provided additional funding. I take his point that the funding is not ring-fenced, but it has been provided. By requiring local authorities to promote understanding of the council and the connected functions of other

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related authorities, we seek to send a clear message that encouraging local people to become involved in shaping the services that they receive really does matter and can make a difference.

5 pm

I understand where the noble Lord is coming from in his Amendments 1, 7, 14 and 16. We debated the issue in Committee. The concept of “reasonable endeavours” is perfectly sensible but he will not be surprised when I say that it muddies what we see as a clear and unambiguous duty on local authorities, especially as authorities would be expected to do only what is reasonable to meet any duty, including this one, unless there was some absolute standard of compliance on the face of the legislation, which is certainly not the case here. The provisions are intended to set out the scope of the expectation but with no detail about how local authorities should discharge their duty; we trust in the ability, creativity and commitment of local authorities to develop the best approaches to putting that duty into action.

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