Local Government Bill [HL]

My Lords, I apologise to the noble Lord, Lord Rennard, but, looking at the speakers list, I thought that the Liberal Democrats had changed their spokesman and that is why I rose. I want to follow the noble Lord but shall speak largely for Norfolk. When this is all over, the issue that the Bill involves will be a very good subject for a thesis in some university’s political or constitutional department as an example of how not to handle issues in government. Frankly, it has been a shambles throughout and an expensive and lengthy one too—a classic example of how not to proceed on issues such as this, including political gerrymandering as a last desperate throw. At the outset—and I talk about the outset of the Boundary Committee’s approach to all this—many of us stressed to the committee the importance of affordability and value for money as key tests. We proved to be right, and more on that later. As my noble friend on the Front Bench reminded us, unitary applications had to meet all five tests. Early on, the Boundary Committee found that the Norwich unitary authority, which eventually emerged from the Government but which they did not recommend then, failed the key tests of both affordability and value for money. Incidentally, I say in passing that Norwich City Council was found wanting by the local government audit process on these grounds, and in four of the past five years its accounts have not been approved. The then Secretary of State therefore turned down the proposal for a Norwich unitary authority on that basis. When a later Secretary of State, John Denham, revived the issue of a unitary authority on these boundaries, the Boundary Committee warned that this was unaffordable but was ignored. As has already been stressed, the Permanent Secretary and accounting officer for the department laid out his concerns about affordability and value for money and added feasibility, asking for a written instruction. As I said in the debate on 22 March, during my long time in government, I cannot recall ever having received a written instruction, and I can hardly recall any of my colleagues doing so. That was a very rare step to take, but it was taken. The subsequent published correspondence revealed that the Department of Transport also raised serious doubts on transport grounds and expected the Treasury to do so too on financial grounds. I shall return to that later. As the noble Lord, Lord Rennard, has already commented, our Merits of Statutory Instruments Committee produced what I thought was a quite devastating report. I do not often study that committee’s reports, but I am sure that this was one of the largest it has produced. Page after page tore the proposal to shreds. We now know that the High Court ruled that the orders should be quashed. The noble Lord, Lord Rennard, has already quoted from remarks made by Mr Justice Ouseley in that regard. I want to pick out one or two comments from his judgment. He said, ""On the face of it, the decisions taken by the Secretary of State and the Minister simply made a mockery of the consultation process"." He continued: ""I am satisfied that this change in approach"—" the change of approach which the then Minister took— ""was unfair and deprived the county councils of the opportunity to make their case in the consultation process"." He was particularly devastating in commenting on the last-minute change in the way in which the then Secretary of State looked at the criteria. He said: ""He alerted no one, and none were able to address the principle of changing the role of the criteria or his two specific reasons for now allowing a proposal to proceed despite not meeting all of the criteria. On the face of it, it appears that something has gone very wrong"." That is a pretty devastating criticism of the process that was followed, at the last minute, by the previous Government. The fact is that the Labour Government’s deathbed action was a political fix, which was rushed through at the last minute, flew in the face of all previous work and evidence, ignored all the compelling criticism and opposition and gave the majority of local authorities in Norfolk, and pretty well all of the public, no time to be consulted or to respond. Indeed, I think that the Government’s decision was the worst possible one, as our debate on 22 March demonstrated. I was always in favour of the status quo in Norfolk, but we were originally asked by the Boundary Committee to put forward a second choice if our first choice was rejected. My second best, but far behind the status quo, would have been a Norwich unitary authority which would have been based on new boundaries, although against that was the upheaval and the cost, so I did not recommend it, but that would have been a choice. At least that would have reflected the changed nature of Norwich. What made no sense at all was to base the unitary authority on existing boundaries when only 14 per cent of the planned housing and economic growth for the Norwich policy area—the long-standing definition of structure planning for Norfolk as a whole—would have fallen inside the boundaries of the unitary authority then proposed by the Government. The noble Lord, Lord McKenzie, has made much reference to democracy and to local reactions and has talked about the people of Norwich. I have one or two points to make on that. There are many other local authorities in Norfolk. The population that would have been affected by the then Government’s unitary proposal was much smaller than the overall population; in other words, those who opposed the unitary authority were much greater in number, by local authority, than the population of Norwich City Council itself. Besides, when the department conducted a poll of reactions in Norfolk as a whole, only 3 per cent of the respondents were in favour of the proposal that the Government then put forward. I do not think the noble Lord can argue, in any sense, that the feelings of the people of Norfolk were properly reflected. During the general election, that was quite a considerable issue in most of Norfolk. Of course, the general election result was decided on other things, but it is not insignificant that Norfolk had a very substantial positive Conservative response in the general election and Norwich itself returned a Conservative MP who supported our general line on the unitary authority. But above all, it is the costs in the current climate that matter to me. For some time, I argued that affordability and value-for-money grounds should be in the forefront. I was doing so even three to four years ago when this issue was first debated. It was clear then that we were entering an exceptionally difficult financial climate of fiscal deficit and soaring public expenditure. I have to say that it is even more compelling today in the current climate and the impact assessment makes the point. There will be a huge up-front cost, before any benefits run through, of the order of £40 million. It is that cost that matters in the next two years, when local authorities will be under great pressure. The letter from the Permanent Secretary at the Department for Transport referred to Treasury officials being likely to advise their Minister against accepting the proposals, and I understand only too well why. In our debate on 22 March, the then Minister refused to confirm that that was the Treasury’s position, but I am pretty sure that it would have been. How could we possibly justify additional expenditure now on a political fix when we all know that we are entering a period of severe financial constraint and cut-backs? With all the pressures now facing local authorities, how could we possibly justify expenditure on this political exercise which most local authorities in Norfolk opposed? I understand why my noble friend Lady Hanham cannot tell us what the Treasury reaction was before the election, but I would be interested in knowing what its assessment is now. I suspect that to a considerable extent it influenced the impact assessment. Will she confirm today that all expenditure on the planning process by the consultative committee in Norfolk will be stopped? Surely it is an abortive expenditure and should not be allowed. I want to say a word or two about the process. I believe that we in the Conservative Party have behaved perfectly properly on this issue. We made our case at the local level and were vindicated in that the unitary proposal was rejected by the Boundary Committee on the evidence and supported subsequently by the Permanent Secretary and accounting officer in the relevant department. We took much stick in Norfolk for observing the strict convention in this House relating to statutory instruments by the decision not to vote on 22 March. We did that because we thought it right to obey and follow the convention in this House. Locally, it was very difficult to explain the situation after that vote, and very difficult at times during the general election. It would have been so easy to win that vote because, like the Lib Dems and Cross- Benchers, we would have voted in favour. But we observed the rules and instead made clear our intentions in our party’s election manifesto. We have been true to our word, and are bringing forward this legislation to fulfil that manifesto commitment. I have to say to the noble Lord, Lord McKenzie, that democratic legitimacy, about which he spoke, is what we have observed all the way through. We observe the conventions in this House; we have not relied on the High Court decision; we have carried through our manifesto commitment and brought the legislation forward here; and we have reflected the feelings of a vast majority of people who expressed their views in Norfolk as a whole. The Government have been true to their word. I congratulate my noble friends on the speed with which the Government have acted and I hope that we shall be able to continue with due speed.