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The Permanent Secretary was entirely legitimate in writing his letter as accounting officer but, as my noble friend stressed, the Secretary of State has wider responsibilities. In his policies for local government he ought to promote high quality public services, opportunities for economic growth and the health of our democracy. These are indeed compelling reasons.

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The noble Lord, Lord Burnett, professed to be shocked that the issue of jobs and growth had been brought in as a consideration, and complained that they had not been consulted upon. I can hardly think that he supposes that had the people of Exeter or Devon been consulted on whether they would have liked more jobs and growth, they would have said, "No, thank you".

Lord Burnett: My Lords-

Lord Howarth of Newport: If the noble Lord will allow me, I will resist; it is getting late.

Circumstances have vastly changed since 2006 and, of course, policy should not be frozen. The issue of affordability has been laid before us, and a number of noble Lords have cast reflections upon the management competence of Norwich City Council. The council, together with Deloitte, has established that there will be net savings in the transition of £4.5 million during that period, and subsequently another £4.4 million year by year. Indeed, the latest CLG estimate is higher; the Minister of State, Rosie Winterton, used the figure of £6.5 million per annum accruing in net savings after five years.

Norwich as a unitary authority would be a new council, using best modern practice and building on the excellent neighbourhood approach that it has already developed. We are asked for evidence, but you cannot produce evidence for something that has not yet happened. It is a matter of judgment, not proof, and the right criterion is reasonableness. It is a reasonable judgment that these two cities with unitary status will be viable and that the new arrangement will be beneficial to the cities and the counties. I cite the European Institute for Urban Affairs, a think tank that studies these matters systematically. It says:

"Where cities have been given more freedom and resources there is evidence they have responded by being more proactive, entrepreneurial and successful".

I speak with experience of Newport. The noble Lord, Lord Elystan-Morgan, referred to the establishment of unitary authorities throughout Wales in 1994 by the Conservative Government. They were indeed imposed-there was no consultation-but at this stage we do not complain because it has worked very well. Newport as a unitary authority has been a great success, all the time improving the quality of its services.

Here is a piece of evidence that the status quo in Norfolk is rather expensive: two-thirds of Norfolk Conservative county councillors are what we vulgarly call "twin-hatters"-that is, they are both county councillors and district councillors. Some, indeed, claim as much as £40,000 a year in attendance allowances, and they do not have two homes to maintain. No wonder they love a two-tier system and want to hang on to it, and no wonder that the consultation failed to represent the authentic strength of support across the county for a unitary Norwich. Conservative county councillors control the district, Conservative district councillors control the parishes and Conservative parish councillors control the responses to consultation. Indeed, I am sorry to have to say to the House that I have heard reports that in Norwich the charitable and voluntary sector, whose objections were cited by the

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noble Baroness, Lady Shephard, was, frankly, bullied by Norfolk county social services and reminded on which side its bread was buttered when it was making its representations on the unitary proposals.

Evidence from the past is that Norwich has been poorly served by Norfolk. My noble friend Lady Hollis referred to the schools. Better education will mean not only better opportunity for Norwich's children but, in the end, lower costs in social security, social services, healthcare and police.

Evidence from the present is that Norwich has been shortlisted for selection as the UK City of Culture in 2013. It has a brilliant contemporary arts scene, as well as a most remarkable heritage-there are more medieval churches in Norfolk than in any other city north of the Alps. In England, Norwich is in contention with the great cities of Birmingham and Sheffield for selection as city of culture. It will need the resources and the autonomy of unitary status so that it can fulfil that role illustriously.

7.30 pm

The evidence points to very good value for money and affordability in the future. We know that single-tier local government is better co-ordinated and works faster. It is closer to the people, more transparent and more accountable. The Secretary of State was absolutely right, in making this decision, to take into account the importance of developing the policy of total place. That integration of the public, private and voluntary sectors in a holistic provision of services, meeting every aspect of need, can only work locally. You must know your community intimately. You must know what is really there and what it is really like, who the people are and who you can make partnership with. That way, all of the community's resources can be mobilised in a single, effective strategy and we will have best practice and value for money, whereas a two-tier system of local government inevitably involves elements of duplication, time-wasting negotiating procedures, a confused perception as to who does what, and opaque and poor accountability.

The county of Norfolk is distracted; the primary loyalty of its decision-makers is not in Norwich and their detailed knowledge is not of there, but Norwich's urban problems are urgent. Poverty and health problems, again, need strategies that integrate education, health, social services, social security and the police, which is why we ought to have unitary status. The East of England Development Agency has referred to Norwich as a potential engine of growth. Well, allow Norwich to be a powerful engine of growth and allow local enterprise, both public and private, to be released there. Allowing it to produce jobs and prosperity on an altogether different scale will be good for the county, just as it will for the people of Norwich.

It would have been better, as the right reverend Prelate said, had the Boundary Committee recommended a unitary Norwich on expanded boundaries. It did not, but at least the proposal which we have before us would make for far better services and a far better prospect of economic growth than continuing the two-tier system which we have. It is in the interests of Norfolk that it should let Norwich prosper. Let it

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better serve the county and the region. It will be an advantage for all if Norfolk is disembarrassed of Norwich. Each of those major local authorities will then be able to concentrate their resources and abilities in serving the very different needs of the communities to whom they will be accountable: the urban needs of Norwich and the rural needs of Norfolk and the smaller towns there.

Norfolk is huge. It is 75 miles from end to end. Norfolk County Council has more than enough on its hands as it is. Of course, Norwich will work in close collaboration with Norfolk where appropriate: on transport, environmental issues, tourism and culture. The Norfolk & Norwich Festival will continue to thrive as something shared between the people of Norwich and those of the wider Norfolk. It is not for a second suggested or implied that Exeter and Norwich would be indifferent to or disconnected from their surrounding counties, or that the destinies of those cities and counties are not inextricably linked. So central government and the big counties should let communities go and allow democratic culture to revive. This is one of the most profoundly important reasons why these orders for unitary status for Exeter and Norwich should be able to continue. What we have seen since 1974, with the imposition of new-fangled, artificial authorities and the abolition of the county boroughs, has been a progressive disengagement from local government-indeed, from democratic participation at every level. It is widely recognised that we face a crisis of democratic confidence. We need to rescue and recreate our democratic culture at the base, at local level. The way to do that is to allow communities to have full responsibility and to create clear accountability to those local communities. More people will then be again engaged in local government and local democracy, and more able people will be attracted to it; so when the Secretary of State invited communities in 2006 to bid for unitary status, that was a proper and creative thing to do. Unitary local government is what people in those cities want.

I hope that we shall not follow the blandishments of the noble Lord, Lord Tope, who has led his Liberal Democrat colleagues in Norwich and Exeter a very merry dance. In the interests of discretion and not to embarrass him or anybody else, I will not quote what they have said, but they are very unhappy. They understood that the Liberal Democrats would not be tabling a fatal Motion. We learnt that at the beginning of last week. Twenty-four hours later, the noble Lord tabled his Motion of annulment. It is sometimes said that the Liberal Democrats say one thing at one end of town and another at the other. Indeed, those of us who remember that pinnacle of the noble Lord's political career-the Sutton and Cheam by-election-will remember that it was said of him then. It was clearly happening again in the Palace of Westminster last week. The noble Lord, Lord Tope, really ought to blush, and the House ought to rescue these honest local Liberal Democrats from ruthless manipulation by the London Liberal Democrats.

The House ought also to be very wary. This is not a game. It is a serious time-a moment of great political sensitivity as we approach an election. The House ought to be extremely careful in voting down orders

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proposed by an elected Government, due to be voted on by the elected House of Commons tomorrow. Discretion would be the better part of valour. I deprecate the Motion of the noble and learned Baroness, Lady Butler-Sloss. She said that she was fond of Norwich, but this does not seem a very kind way to show her affection. She did not explain why she though that unitary local government would be bad for Norwich or Exeter. At least the noble and learned Baroness's Motion is constitutionally respectable, even if it is politically inadvisable.

Lord Elton: Does the noble Lord recall the contents of paragraph 4.44 of the Companion to the Standing Orders of this House, which recommends that speeches should not last longer than 15 minutes?

Lord Howarth of Newport: I am extremely grateful to the noble Lord. He has made an absolutely proper point. I apologise for banging on at this length. I feel very strongly about it. Of course, we ought to proceed to a vote.

Lord Bates: My Lords-

Baroness Murphy: My Lords, the Cross Benches have barely said a word. I will speak for just two minutes in support of the Government. Listening to this debate, one would think that everybody who lived in south Norfolk or north Norfolk was against this order, and everybody who lived in the city of Norwich was for it. That is not the case. I live in the Waveney valley. The undulations may not be as great as they are in Devon, but they are pretty perfect to me. What is good for the regional development of East Anglia and Norfolk as a whole is what is crucial for Norwich-a centre of power to drive the local economy. The process has been shambolic. I can quite understand why the local county council and district councils are not that keen on losing some of the money that they will lose. It is perfectly understandable. I do not sit on any of those councils and never have. However, what is good for Norwich will be very good for the regional economy and I support the order. It will be very sad if, because of the messy process, we lose it today.

Lord Bates: My Lords, I will be brief. I sense that the debate has happened and people have probably reached their conclusions. There is not much more to add but I need to make just a few points to put the Opposition's position on these orders on the record. We are not talking here about Exeter and Norwich orders, but Exeter and Devon and Norwich and Norfolk orders. We therefore have to consider all elements of them. The Secretary of State initially set these up in 2006. Five tests were set and failed when the report was issued in respect of both Norwich and Exeter. Therefore, the Secretary of State asked that, in the case of those two cities, the Boundary Committee should be invited to consider the five tests again. The Boundary Committee did so and came back with a recommendation contrary to what has been put before us this evening.

In moving her amendment, the noble and learned Baroness, Lady Butler-Sloss, brilliantly dissected the case and also pointed out the legal weakness in the

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wording of the orders. The Merits of Statutory Instruments Committee produced an outstanding report of incredible depth. It has 35 opening paragraphs, each of which finishes with a request-almost a rhetorical request-to the DCLG to provide further information and to justify its case. However, the Merits Committee will be disappointed to know that the Government cannot provide it with an answer because there is no answer for them to provide, such is the shambolic way in which this matter has been put forward. This was highlighted-in an extraordinary way-by the Permanent Secretary, the accounting officer for the department. That point was picked up by my noble friends Lord MacGregor, Lord Ferrers and Lady Shephard. We should consider for just a second the weight of Cabinet-level expertise evident in the submissions of people who have said that they have never seen a letter of this nature from a Permanent Secretary. That is extraordinarily damning of the way in which the Government have conducted themselves.

I wish to quote from a letter from Peter Housden, the Permanent Secretary, to the Secretary of State. The letter states:

"Having considered your and the Minister for Local Government's preliminary decisions on the unitary proposals before you, and the reasons for them which you have explained to us and which I understand, I do have concerns, principally about their value for money and feasibility. Accordingly, if you were to decide to proceed ... I would be grateful for a written instruction from you to implement these decisions ... Whilst I understand these ... reasons, I am concerned that the approach you are currently proposing makes it difficult for me to meet the standards expected of me as Accounting Officer".

This is absolutely damning evidence of what is felt at the heart of government about what has happened. The Boundary Committee, the Joint Committee on Statutory Instruments, the Merits Committee, the Permanent Secretary and the Secretary of State were opposed to the measure. The Boundary Committee had a second look and was still against it. It is asserted that the people of Exeter and Norwich are in favour of the measures but, as noble Lords know, nobody has ever bothered to ask them. The one time that they were asked their opinion in the DCLG's own consultation, 85 per cent were in favour of the status quo, 10 per cent were in favour of a Norfolk unitary council and 3 per cent favoured a Norwich unitary council. Her Majesty's Opposition have made it absolutely clear that should we form a Government after the general election, one of the first acts that we will take will be to issue an order to annul these orders. That should be carefully considered and weighed. The judicial review and the general election will take place in the next six weeks. Why, after four years, does the measure need to be rushed through at this point? In concluding its synopsis of this whole debate, the Municipal Journal said that local government reorganisation had descended into a Whitehall farce. That is exactly what this has become. For narrow party political advantage this is being rushed through against all advice. The words of the right reverend Prelate the Bishop of Norwich should ring in our ears when he says that the people of Norwich and of Norfolk-and for that matter, the people of Exeter and of Devon-deserve better. After the next general election, we hope that they will get it.

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7.45 pm

Lord McKenzie of Luton: My Lords, if the debate tonight has shown anything, it is that the question of whether to have unitary councils is one that is hotly debated and generates strong feelings. I should make it clear that if the noble Lord, Lord Tope, presses his amendment-we have debated these issues in aggregate today-and is successful in doing so, we would want the opportunity to test him moving his amendment in relation to the second order as well.

Perhaps the one indisputable fact is that in Exeter and Devon and in Norwich and Norfolk, the case for and against a unitary city is strongly contested. There are supporters, opponents, evidence in favour and, indeed, evidence against. For local people in these areas, those who will benefit most if we get the decisions right or suffer most if we get them wrong, these matters are certainly not party-political issues. They are not simple and it is the task of the Government to look at them carefully, to balance the competing arguments, to assess the evidence of the different claims, and finally to reach a balanced judgment on the best way forward for the people of the cities and counties involved. We are clear that the decisions we have taken in relation to unitary proposals for Devon and Norfolk are in the best interests of the people of those areas.

The noble Lord, Lord MacGregor, asserted that this was a case of Whitehall knowing best. I can say to him that the process of creating unitary councils is the very opposite of Whitehall knows best. The unitary proposals we are considering today are the proposals of the locally elected, democratically accountable Exeter City Council and Norwich City Council. These are local proposals for which there is considerable appetite in each of the cities. Perhaps I may emphasise that point, particularly for those who assert that this is a form of party political gerrymandering: all noble Lords will have had a letter from Councillor Stephen Morphew, leader of the Labour group on Norwich Council, Councillor Claire Stephenson, leader of the Green group, and Councillor Brian Watkins, the leader of the Liberal Democrat group. It states:

"We are writing to you personally to seek your support for both of these draft orders, but particularly for the order to create a unitary council for the city of Norwich. There is overwhelming cross-party support for this on Norwich City Council, representing 34 of the 39 seats on the council".

My noble friend Lady Hollis, as ever, made a most powerful argument in favour of unitary authorities and what they can do to regenerate and drive forward the economy of a local area. As she explained, she has done this from the perspective of someone with a commitment to Norwich and to Norfolk more generally. She talked about the opportunity of having unitary authorities that are focused, innovative and entrepreneurial. That is now in part fettered by a two-tier approach. I mention the instance she raised, that of street lights going off at 10 o'clock at night.

My noble friends Lady Hollis and Lord Whitty, and other noble Lords, raised the issue of county unitaries. We disagree with the Boundary Committee because there is no support for those. Neither of the two county councils supports them, or indeed any of

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the principal councils. Further, all but a handful of parish councils are opposed to them. If we were to proceed with those alternatives, which is the benchmark that has been suggested for working out at best value, I guess that there would be more judicial reviews about us not sticking to the criteria and guidance that were laid down.

The noble and learned Baroness, Lady Butler-Sloss, said that there was no evidence of cost savings, efficiencies and so on, and talked about the effect on local economies and services. I suggest that that is not the case. The department's impact assessment has been laid before Parliament and shows that, once up and running, the unitaries will result in annual savings of some £6.5 million per year. But the benefits will be so much greater in terms of promoting the economy, achieving real growth in jobs, and economic regeneration.

The noble Lord, Lord Tope, suggested that we have got the timing wrong on this because of challenging financial circumstances. I would suggest to the noble Lord that it is precisely because of the challenging financial circumstances we have that we are right to press ahead with this. We know that we have to do all we can to drive growth in the economy and we know the power that unitary authorities such as Norwich and Exeter could utilise.

A number of noble Lords made reference to Total Place, which is part of the reason for the Government making the decisions they have. The noble Lords, Lord Burnett and Lord Tope, and the noble and learned Baroness, Lady Butler-Sloss, all remarked that the Total Place pilots have demonstrated that by putting the citizen at the heart of service design, taking a holistic view of the funding available within an area, and working across organisation boundaries in a collaborative and integrated way not only provides significant opportunities both to deliver better services and outcomes for people everywhere, but also drives down costs. There are various elements to this. Total Place envisages a strong role for local government, placing it firmly at the centre of decision making in a community. There is also a cultural element. A couple of bids have stated that the explicit cultural element in Total Place has been key to creating new and more powerful ways of collaborating.

I am advised that the troops are leaving, so I shall see whether I can make progress. My speeches do not usually have this effect.

I was pressed on the economic benefits that accrue from the changes; they are substantial. I do not have time to go through them. Those who know about unitary authorities will know that they make a real difference. I have certainly experienced it directly in Luton, which became a unitary authority under or as a result of Conservative government proposals.

The noble and learned Baroness, Lady Butler-Sloss, asked what the urgency was-why now? A number of other noble Lords-the noble Earl, Lord Ferrers, in particular-referred to why things had taken so long. We have consistently made clear our desire to bring to an end the uncertainty in these areas, which has been going on for well over three years. In addition, there are clear and practical reasons. If we approve the orders now, the new councils can be implemented in April 2011. Any further delay would make that impossible.

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