HC Deb 26 July 1999 vol 336 cc74-83

Lords amendment: No. 3, in page 10, line 20, leave out paragraph (d)

The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones)

I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker

With this, it will be convenient to discuss Lords amendments Nos. 4 to 7 and 9.

Mr. Jones

The Government have introduced three amendments to clause 14, which are all technical and intended to clarify its effect. I shall deal first with amendments Nos. 3 and 4, the first of which paves the way for the other.

Amendments Nos. 3 and 4 have been introduced to make a technical change to clause 14. They would make what was paragraph 14(2)(d) into a free-standing subsection. Hon. Members will note that the wording of the new provision would remain identical to that of the original, and would not extend the powers of the Secretary of State or the National Assembly in any way. The amendment has been proposed simply to clarify the scope of the existing provisions.

Amendment No. 5 deals with a number of situations in which the exercise of subsection 14(5) powers by the Secretary of State or the National Assembly might cause difficulties. These relate to cases in which there is a right of recourse to the Secretary of State, or he has an existing role or power in relation to a best value authority. Amendment No. 5 is designed to clarify the operation of the clause in such situations and tackles the problem by introducing two new subsections to clause 14. I emphasise that the circumstances in which the provision would apply are exceedingly rare.

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We have always maintained that intervention under clause 14(5), where the Secretary of State takes over responsibility for a function, would be the exception, not the norm, and that it would be to address the very worst failure in service delivery. We envisage that, in the handful of cases where a direction was issued under clause 14(5), most often, the Secretary of State would not exercise the function himself, but would appoint an independent person to carry it out. Where nominees were appointed, they would, in most cases, be considered to be independent from the Secretary of State, and the difficulties that I outlined relating to the Secretary of State's powers would not arise. Although the circumstances in which the provisions would be necessary are very rare, the amendment is essential for ensuring the proper function of the clause in all circumstances.

I stress that Lords amendment No. 5 is not about increasing the powers of the Secretary of State or the National Assembly, but about ensuring that their existing roles and powers can continue to be exercised sensibly. When the Secretary of State takes over a function, he does so on behalf of local people to ensure that a higher standard of service is delivered. Local people's rights of appeal and other such entitlements should not be compromised to enable that to happen. The amendment will help to ensure that such a circumstance does not arise.

Lords amendment No. 9 is technical and ensures that the new regulatory powers that we propose to introduce under clause 14(5A)(a) can be used effectively in Wales. The Bill provides that the National Assembly will exercise the full range of intervention powers set out in clause 14(5). The Secretary of State will not take action under that clause in respect of failure in Wales, as he has no powers to do so. Where the Assembly wishes to make regulation in respect of functions where powers have been transferred to it, it is a relatively straightforward process. However, there will be some cases where the Assembly intervenes under clause 14(5) and judges it necessary to make use of the consequential regulatory power at clause 14(5A)(a), but in an area where powers have been reserved to the Secretary of State. If those regulatory provisions are necessary, it is clearly unsatisfactory to leave the Assembly with no powers to make them as that would either lead to the creation of mutually conflicting provisions or, worse still, inhibit the Assembly from taking clause 14(5) action at all, even where it is the most appropriate form of intervention.

Lords amendment No. 9 addresses the potential anomaly by providing that in circumstances where the Assembly might wish to make regulatory provision in respect of a reserved area following intervention, it may do so, but only with the express approval of the Secretary of State. The Government believe that that is consistent with the principles of Welsh devolution, but will ensure that the National Assembly has the same flexibility to use the powers in clause 14 as would be available to the Secretary of State in England. That will provide consistency and ensure that the National Assembly will have the same freedoms to act to protect the interests of local people in Wales as exist elsewhere.

Lords amendment No. 7 is technical. Clause 27(2) lists the order-making and regulatory powers that, in England, would be subject to the negative resolution procedures of either House of Parliament. The amendment adds the new regulatory powers set out in Lords amendment No. 5 to that list.

Lords amendment No. 6 is also technical. Hon. Members know that the Government's approach to commencement is designed to provide best value authorities with some certainty about when their statutory obligations will begin, while providing an opportunity to commence certain provisions promptly, where it is sensible or helpful to do so. The amendment will help to achieve that by allowing, if necessary, early commencement of provisions relating to police and fire authorities in both England and Wales. The previous wording of clause 26 did not achieve that and we have therefore made this necessary adjustment to allow the Government to align commencement of best value for those authorities in both countries.

Mr. Shaun Woodward (Witney)

I am delighted to respond to the amendments and even more delighted to see almost as many Ministers as Government Back Benchers. I cannot think why they need to demonstrate their performance today, but I suspect the fact that they keep their pagers on will reveal to the House what is in store.

We do not intend to delay the House long, but we have some questions. The Minister described the amendments as technical, tidying-up amendments. We want to test what he means by "technical". By and large, when Ministers say amendments are "technical", they are centralising measures that grab power for the Secretary of State wherever possible.

The amendments are described as technical, but they increase the centralising powers of the Secretary of State's Department. We should not be surprised because the Green Paper stressed that best value was designed to bring about "cultural change", and the Government's 1997 manifesto said: The basic framework … of local service provision must be for central government. The amendments show the Government grabbing whatever power they can.

Lords amendments Nos. 3 and 4 are in one sense strictly technical, so my questions seek clarification. On Report in another place, the Minister, Lord Whitty, remarked: the wording of the new provision remains identical to the original."—[Official Report, House of Lords, 17 June 1999; Vol. 602, c. 514.] If so, perhaps the Minister can explain why the words have to be changed. Can he confirm that that interpretation is correct? As he said, clause 14(2)(d) permits the Secretary of State to direct an authority to take such other action as in the Secretary of State's opinion is necessary and expedient". Crucially, the amendment would permit the Secretary of State to direct an authority to take not "such" but "any" action that he considered necessary or expedient. What is the difference between "such" and "any"? If "any" is the same as "such", why did the word have to be changed? In what circumstances would the Secretary of State take "any" action and what would such action be?

Lords amendment No. 5 extends the powers of the Secretary of State. The Minister was at pains to say that the amendments do not extend his power, but it is nonsense to suggest that. Even a cursory glance at this amendment reveals that it does. It creates a new regulatory power and puts it into the hands of the Secretary of State. Lord Whitty said that its use would be "exceedingly rare" in any circumstances, but it is a far-reaching provision which gives the Secretary of State the power to disapply or modify an enactment that confers a function on him in respect of a function of a best value authority.

Mr. Tony McWalter (Hemel Hempstead)

Does the hon. Gentleman suggest that it would be better to leave such a function in the hands of a failing or lamentably inefficient authority than for someone to come in and recognise the importance of getting it discharged efficiently?

Mr. Woodward

The difference between the Opposition and the Government is that the Conservatives believe in local democracy; the electorate can always get rid of councillors—as the Government found out in this year's local elections when they began rapidly to lose seats throughout the country. The hon. Gentleman should realise that the Conservatives do not believe in centralising power; the Government believe in centralising power—giving more and more power to the Secretary of State and taking it away from local authorities.

Sir Paul Beresford

Does my hon. Friend agree that the boot is on the other foot? The intervention by the hon. Member for Hemel Hempstead (Mr. McWalter) referred to the Minister stepping in. There is a great deal of flag waving for that, but the headline in the Municipal Journal is Intervention 'will be kept to a minimum'". In other words, the Minister will probably not step in anyway.

Mr. Woodward

As always, the Deputy Prime Minister is all over the shop—or all over the train perhaps, as we have begun to see. He has a disastrous disintegrating transport policy, as well as disintegrating local authority power.

The amendment gives no small power; once again, it is a Henry VIII measure. Secondary legislation will be used, so we have concerns about the amendment—in the context of the centralisation of power to the Secretary of State. Once again, our questions to the Minister are principally about the times when that power would be exercised. It is not good enough for the Minister simply to say that it would be used only in exceptional circumstances. It is in exceptional circumstances that power is abused. It is incumbent on the Minister to explain to the House the precise circumstances in which that power would be used.

The Government should tell us why they are introducing the amendment at such a late stage, if they believe that the matter was such an important part of the Bill all along. The Minister should give the House examples in which the Secretary of State's powers under clause 14(5) would be exercised. Today, the Minister has not justified why there should be such a right of recourse to the Secretary of State and why the Government are unable to trust local democracy.

My hon. Friend the Member for Mole Valley (Sir P. Beresford) has already expressed some concerns about amendment No. 6 which he may wish to adumbrate. The amendment empowers the Secretary of State to order the early commencement of provisions relating to police and fire authorities in Wales. Ordinary commencement is 12 months after the passing of the Bill. Unamended, clause 28 gave the power to the National Assembly for Wales; amended, it shifts the power to order early commencement of sections 15 to 17 or section 26", and the new section on housing benefit and council tax benefit to the Secretary of State. The amendment reduces the commencement order powers of the National Assembly and gives them to the Secretary of State.

Why has the Minister done that? On what occasions would that measure be used? As Lord Whitty said, in another place—[Interruption.] The Ministers on the Treasury Bench are chatting among themselves; they do not want to listen to what their noble Friend said. However, it might be as well if they listened. Lord Whitty said that the measure would allow early commencement where it is sensible or helpful to do so".—[Official Report, House of Lords, 17 June 1999; Vol. 602, c. 514.] Will the Minister tell the House what "sensible" and "helpful" mean in that case, so that we can understand the purpose and meaning of the legislation, instead of the obfuscatory way in which he has delivered the amendments to us today?

Mr. Sanders

The fundamental question has remained unanswered in Committee and in the other place, although perhaps we shall receive a glint of light this evening: what are the exceptional circumstances? Secretaries of State already have powers to intervene in local government—for example, in a social services department. If there is any hint of abuse in a placement, the Secretary of State can intervene. In a failing school, the Secretary of State can intervene. Powers of intervention exist. Why is there a need for additional powers?

In his opening statement, the Minister said that the powers were there to protect local people. What is the purpose of the ballot box in a local election if it is not to give the people the power to remove a failing local authority? Why should a Secretary of State make that decision? Under best value regimes, it is the Secretary of State who sets the standard and monitors whether it is being met. The Secretary of State sanctions and judges whether that standard has not been met. Why is the additional power needed? It would be extremely helpful if we could have an answer on what the exceptional circumstances are.

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Miss Julie Kirkbride (Bromsgrove)

I should be interested in the answer to a more specific question about the Secretary of State's new powers in the measure. What are the Secretary of State's powers to intervene in local government procedures when the contracting-out arrangements—or non-contracting-out arrangements—are being changed? I have in mind a specific example from my constituency, where confidential council records were abused.

Bearing in mind that such records might end up in the hands of third parties under the new contracting arrangements, I want to know what action the Secretary of State would take if, for example, a situation arose similar to the one in which we were left in Bromsgrove during the local government election campaign. During the campaign, information was targeted on various named individuals who were eligible for free bus passes. Their names were held in confidence by the local council, but the individuals were specifically targeted, by name, address and a code marking used by the council. They were sent Labour party political propaganda that suggested—from records that should not have been available to the party—that, if the Conservative party were to win in Bromsgrove on 6 May, we would abolish free bus passes. The House will be pleased to hear that we have not done so. What action would the Secretary of State be prepared to take if information was abused in that way?

It transpired that the person responsible for that act was Councillor Peter McDonald, who is now the leader of the Labour opposition on Bromsgrove district council—I am pleased that he is in opposition. The chief executive of the council has given me clarification that those letters were sent and that Councillor Peter McDonald was in possession of the records. The chief executive told me that he had handed a copy of those sensitive records to Councillor McDonald.

When we took up the matter after an article about the abuse of that information had appeared in The Birmingham Post, the chief executive told me it would seem reasonable to assume that the information used to 'target' the Labour Party literature was largely based on information obtained from Council sources. His letter continued: It is fair to point out that Mr Fisher"— one of the council officials— initially declined to provide such information and, as a result, was subject to considerable 'pressure' from Councillor McDonald. In eventually yielding to that pressure Mr Fisher told Councillor McDonald of his reservations in supplying the information and indicated that under no circumstances should the data be used for Party political purposes. He also advised Councillor McDonald that before using the information for any purpose he should discuss the situation with myself"— that is, the chief executive.

The letter continued: Councillor McDonald chose to ignore this and has never discussed the information, or its use, with me. In retrospect, and assuming that the Labour Party are unable to offer an alternative version of events, it would appear that Mr Fisher's trust in Councillor McDonald was misplaced. The letter then goes on to justify the actions of the council officer who handed over the information.

If Councillor McDonald is found guilty of an offence, it could be a criminal offence under the Data Protection Acts. He would be guilty of bringing the Labour party into disrepute. It would seem that a sleaze allegation could be made against Bromsgrove Labour party, and I should be grateful if the Minister clarified whether the Secretary of State's new powers would deal with events such as those.

Sir Paul Beresford

To be helpful to the Minister, my speech will give him time to work out how to respond to the outrageous accusation clearly spelled out by my hon. Friend the Member for Bromsgrove (Miss Kirkbride). That councillor's actions are merely a classic example of the sort of behaviour that we remember from many previous occasions and have come to expect.

The amendments are wonderful amendments to an amazing clause. They give huge powers to the Secretary of State, especially amendments Nos. 3 to 5. Any regulation that the Secretary of State likes, he can add to, and any he does not like, he can remove—there is no democracy and no discussion. In Committee, the clause was referred to as the "trust me" clause, and its provisions would suit Ministers if there was a slack local council or a trade unionist who needed to be pleased.

We have heard brave words about how the amendments would enable the Secretary of State to intervene, and the Municipal Journal headline reads, "Intervention 'will be kept to a minimum'" Failures triggering the provisions of amendments Nos. 3 to 5 fall into two groups. The first is "Failures of process", which we are told are unlikely to trigger intervention; the second group is "Failures of substance", which we are told are more likely to trigger intervention.

Under "Failures of process" is listed first: a failure to consider competition". That is the crux of getting a decent value-for-money, best-value services, but it is out of the window. Next, we find "a failure to consult", but that could be avoided pretty easily, with a couple of sweeps of the local wards to make sure everything sounds all right. Then, we have a failure to set performance targets". I can understand why local authorities might not meet that requirement, especially as they are still awaiting Government guidance on some of those matters. Finally, we have a failure to publish benchmarking data. Given the struggle of some of the inner London Labour authorities to find benches, let along benchmarks, one would hardly be surprised if they failed to meet that requirement.

Under "Failures of substance", we find first: a failure to meet any single national performance standard". As we feared, the Secretary of State can choose selectively to pick on any local authority that is not in favour that month. A second failure of substance is persistently high costs not warranted by service excellence or need". I can think of innumerable Labour local authorities, especially in London, that fail by that standard. Next, we find a failure to improve standards". The difficulty with that is that, in some areas, it might be impossible to do so. Take ground maintenance: a dry summer means that grass cutting is kept to a minimum, but a wet summer means that the contractor or the in-house team will struggle to keep up, with the result that the local authority is held to have failed to improve standards. Finally, under "Failures of substance", we find a failure to act on critical inspection reports". One of the difficulties with that is that, every so often, there is what one might call an oddball inspector. That provision might mean that a local authority got into distinct difficulties merely because the Secretary of State chose to accept the report of a single oddball inspector.

My greatest concern about the amendments is that they would allow soft joint ventures, local authority company guarantees and even municipal trading. At no stage in proceedings on the Bill have Ministers made it clear that municipal trading will be outlawed. That causes me great concern because, if that matter is not dealt with, we shall have returned to the position of the late 1970s. Compulsory competitive tendering brought local authorities back into line. Many Conservative Members feel that best value is the next logical step from CCT but, the more I listen to the Minister, the greater my doubts about that.

Amendment No. 6 appears to be a reshuffle of the original amendment, but the original concern stands. We expect Royal Assent on this Bill in August 1999 and the Bill should come into force in autumn 2000, but many local authorities are way behind in preparing for best value. They have mixed reasons for that—some are waiting for Government guidance. We need to recognise that it will be at least five years—2005—before the best value programme is fully up and running and we can expect to see any results from it. Meanwhile, there is a great clamour to get rid of CCT, which goes on 2 January 2000, five years before the best value results can be expected. To the recipients of services and to those who pay for them, those could be five years of heavy damage.

Mr. Jon Owen Jones


Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. It would be appropriate if the Minister asked for the leave of the House before replying to the debate.

Mr. Jones

I apologise, Mr. Deputy Speaker. With the leave of the House, I shall reply to the debate.

The hon. Member for Mole Valley (Sir P. Beresford) entertained the Committee with several speeches, but, as far as this Bill is concerned, he appears to be stuck in a rather schizophrenic state. From his experience in local government, he gives many reasons why local authorities, all carefully chosen to be Labour authorities, did not perform adequately or efficiently. Those comments are balanced by attacks on the Bill for placing too onerous a responsibility on local authorities to perform to standards of efficiency and service that central Government may lay down.

At least the Liberal Democrats are consistent. The hon. Member for Torbay (Mr. Sanders) expressed the well-rehearsed argument that there was no reason why the amendment should impose an extra requirement, because the only thing needed to ensure that local government is efficient, effective and incorrupt is the ability of local electors to throw out offending councils at election time. That argument has been used consistently throughout our deliberations on this Bill and others, but if we accept it—[Interruption.]

The hon. Member for Witney (Mr. Woodward) says that that argument has the merit of democracy, but I shall not embarrass him and bore the House by detailing the many occasions on which Conservative Governments interfered in, and attacked, local government. Suffice it to say that, now that they are in opposition, the Conservatives continue to attack local government. However, they cannot have it both ways. At least the Liberal Democrats are consistent—wrong, but consistent, and there is merit in consistency. I put it to the hon. Member for Witney that there is nothing but hypocrisy in his arguments—he cannot have it both ways.

The hon. Member for Bromsgrove (Miss Kirkbride) appears to have confused the Bill before the House today, which deals with best value, with a Bill that is to be introduced in the next parliamentary Session, which will deal with ethics in government. In any case, the case that she describes is one that would come before a court. It is not a matter for discussion in the context of the Bill.

The hon. Member for Witney asked why the word "any" was used instead of "such" in amendment No. 4. The word "such" would be used in a clause with more than one provision, but if it stands alone, "any" is better drafting. It is simply a drafting point, and there is no other significance.

In amendment No. 5, new subsection 5A provides the Secretary of State with a regulation-making power to make consequential arrangements that include disapplying or modifying existing legislation, and specifies the circumstances in which the power would apply. Hon. Members will note that the scope of the provision is very narrow and will apply only in cases where the Secretary of State has a function in respect of a best value authority and where he has issued a direction under subsection 14(5). We expect that to be a rare combination of circumstances.

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Subsection 5B specifies the nature of the regulations. Again, it is very narrow in scope. The regulations can modify existing legislation, but they will operate only in circumstances in which the Secretary of State wishes to exercise an existing function concurrently with a best value function of the authority.

I shall clarify further why those provisions are needed, by providing an example of the circumstances in which they might be used. The example that the Government provided in another place concerned the Secretary of State's role when exercising a planning function on behalf of an authority. Were he to intervene to take over a planning function, decisions on planning applications would thereafter be made in his name. In the event of planning permission being refused, the applicant would have his usual right of appeal, but that is a right of appeal to the Secretary of State.

I am sure that the House would agree that it would be undesirable for the Secretary of State to determine appeals against his own refusals of planning permission. The new subsection that we are introducing would allow for regulations to be made to make alternative arrangements to deal with the fact that the Secretary of State had taken a decision that was now subject to appeal, and the regulations would be written to ensure that they were consistent with the Secretary of State's role as the planning authority. Similar provisions would need to be made to allow the Secretary of State, for example, to continue to call in controversial planning applications.

Where the regulations proposed are in force, the Secretary of State will still be able to use his call-in power. Those planning applications that he would want to call in, had the regulations not been in force, would still be subject to a process that is likely to involve a public local inquiry. For cases dealt with in that way, there would not be a right of appeal to the Secretary of State; this is the position now for all cases that are called in. The right to seek judicial review in the courts is still available, of course, and would not be fettered by the proposed regulations.

Amendment No. 6 does not reduce the Assembly's powers, as was rather unbelievably claimed. It never did have the power to act in respect of police and fire authorities. The amendment simply ensures that police and fire authorities in Wales can be treated in the same way as in England.

Lords amendment agreed to.

Lords amendments Nos. 4 to 9 agreed to.

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