Localism Bill

My Lords, I entirely endorse the observations made by my noble friend Lord McKenzie. I was happy to ascribe my name to the amendments moved by the noble Baroness, Lady Eaton, and indeed I congratulate her on tabling them. I think the Committee would wish to join me in congratulating her on her tenure of office, which ends this week, as chairman of the Local Government Association. She has been a very distinguished representative of local government. She has been quite unafraid to express the views of the local government family to Governments of all three political colours over the past few years, and we look forward to her playing an even greater role in your Lordships House than she has felt able to pursue so far because of a slight feeling of a conflicted position. My noble friend Lord McKenzie referred to the position of Wales and Northern Ireland, and he seems to be absolutely right. I obviously have every sympathy with the noble Lords, Lord Wigley and Lord Empey. One would not wish to see these fines imposed on either Wales or Northern Ireland, or indeed on Scotland. However, it would be ridiculous if they were excluded from and England were included in certain situations. For example, if the Tweed or the Severn were polluted from the north or the west of the relevant borders, the Welsh or Scottish authority involved might be exempt and an English authority held liable. That would seem quite absurd. My noble friend Lord Berkeley and the noble Earl, Lord Cathcart, asked about the number of potential breaches. Noble Lords may recall—although probably not—that at Second Reading I referred to a Written Question and Answer in relation to this matter. The Question was what estimate the Government have made, "““of the potential liability of the United Kingdom to pay fines to the European Union; and what proportion they anticipate would fall to be paid by local authorities under the provisions of the Localism Bill””." The Answer from the noble Lord, Lord Sassoon, was: "““The United Kingdom has never incurred a financial penalty under Article 260 of the Treaty on the Functioning of the European Union””—" or under the former articles— "““and no such fines are anticipated””." I suggested at Second Reading that it was a little curious that in that case there should be provision in the Bill at all. However, the Answer went on: "““In the event of such a financial penalty, it is not possible to anticipate what proportion would fall to local authorities under powers proposed in the Localism Bill””.—[Official Report, 24/5/11; col. WA 419.]" Therefore, it could be a very large or a very small sum. In that context, I ask the Minister to indicate whether it is correct, as the Local Government Association believes, that the Government are considering fines relating to four specific EU laws so that councils could be forced to pay up to £1.2 billion in fines. It is alleged that the UK is facing a potential £300 million EU fine for breaches of air-quality targets. Is that correct? Furthermore, a slightly worrying feature of the fines proposal is the reference to the breach being ““caused or contributed to”” by a local authority. A contribution can go from a small proportion to a very large one. What is the Government’s thinking about the situation that would arise if it were not wholly the responsibility of an individual local authority or a number of local authorities? In those circumstances, how would the fine be apportioned and who would determine it? Presumably, on the basis of the Bill as it stands, it would be the Secretary of State. I recall money being lost to the United Kingdom, and particularly to the region from which the noble Lord, Lord Shipley, and I come, not through the fault of local authorities but through the negligence of civil servants who failed, for example—this was in the days of the previous Government—to transmit bids for EU funding in sufficient time for the money to be allocated and received. The money went missing but unfortunately there was no question of the local authorities fining the Government for that negligence. It seems that this is a one-way street. When it comes to money being lost to the UK, only local authorities seem to be scheduled to be in the firing line. There are real problems here with the processes. The noble Earl, Lord Cathcart, talked about Ministers signing up successive Governments to regulations, and he was right to say that. In particular, Governments have signed up to these regulations without consulting local government, upon which under the Bill and indeed perhaps more generally responsibilities would lie. The position now seems to be that if the Bill goes through unamended local authorities will be faced with decisions made on the basis of targets, deadlines and laws dating back more than 10 years—again without any consultation along the way. It is suggested that local authorities have defaulted on EU obligations on four directives: air quality, public procurement, services and the waste framework. Ministers have been asked to substantiate these claims but they have not provided the evidence. Perhaps the noble Lord would indicate what evidence there is for any such alleged breaches. In particular, there is the interesting example of Ministers apparently having claimed that 23 waste planning authorities have failed to submit their waste plans by an informal deadline between the Government and the European Commission, which could incur—allegedly—an EU fine. The Government apparently failed to communicate the importance of that deadline to the councils in question or its link to the directive. It was eventually communicated at a workshop—a workshop, not in any kind of directive or guidance. It is not in European Union law or in the domestic legislation that implements it. The only official communication went out six months after the deadline had passed. In these circumstances it would be ridiculous for a fine to be levied on authorities if the Government were to seek to enforce it. Others of your Lordships, including the noble Baroness, Lady Kramer, have referred to the difficulties particularly of air quality. Indeed, this was the subject of a review commissioned by Defra that was published in March 2010 when mandatory targets on councils were being considered. The Defra review said: "““Giving authorities responsibility for achieving a part of the target … would be impossible to monitor and enforce; there would be no way of deciding conclusively the causes of any change to””—" pollution concentrations— "““at the specified location””." That is fairly obvious but it does not seem to be reflected in the Government’s position. The problem is that there are a number of draft laws in the pipeline that could affect local government, and again I hope that the Minister will confirm when these are being considered this time around, as opposed to what has happened under previous Administrations, that there will be adequate consultation. Finally, one matter worries me slightly. The noble Baroness, Lady Scott, referred to passing on the fines. It may be that if the amendments succeed either the whole clause will be struck out or there will be an arbitration procedure. I am not normally paranoid, but sometimes in local government one feels that successive Governments, particularly their civil servants, are out to get us—perhaps the Treasury in any case is out to get us. If the situation arises in which the fines are struck out, I wonder whether it would not occur to some bright civil servant that the net cost to the Government of paying EU fines might not somehow be deducted from the revenue support grant that goes to local government, which would perhaps help individual authorities that might otherwise be made liable but would not help the totality of the local government family. I would very much welcome an assurance from the Minister, if he is able to give it either today or subsequently, that in the event of the fines not being levied on individual authorities but having to be paid by the UK, there is no intention to recoup from local government in this indirect method. I have no doubt that the noble Lord would not countenance it but there may be others around Whitehall who would, so it would be good to have some assurance that that would not follow.