Skip to main content

Lords Chamber

Volume 718: debated on Monday 22 March 2010

House of Lords

Monday, 22 March 2010.

Prayers—read by the Lord Bishop of Liverpool.

Introduction: Lord Hall of Birkenhead

Anthony William Hall CBE, having been created Baron Hall of Birkenhead, of Birkenhead in the County of Cheshire, was introduced and took the oath, supported by Lord Puttnam and Lord Moser.

Introduction: Lord Kakkar

Ajay Kumar Kakkar, having been created Baron Kakkar, of Loxbeare in the County of Devon, was introduced and took the oath, supported by Lord Higgins and Lord Patel.



Asked By

To ask Her Majesty’s Government whether they will make representations to the Government of Egypt regarding recent attacks on Christian communities and reports of discrimination against religious minorities.

My Lords, the United Kingdom Government condemn all instances of discrimination and persecution against individuals and groups because of their religion or belief. In January, my honourable friend Ivan Lewis, Foreign Office Minister for North Africa and the Middle East, raised the subject of the fatal shooting in Nag Hammadi with the Egyptian Minister of the Interior. In February, during the United Nations Human Rights Council universal periodic review of Egypt, we encouraged further Egyptian efforts to reduce and prevent discrimination in society on the grounds of an individual’s religion or belief. The protection of human rights is a central component of Egypt’s ongoing dialogue with the European Union.

My Lords, I thank the Minister for that encouraging reply, but is he aware that, while welcome concessions have recently been made with regard to the Baha’i community, great concern remains among the Coptic Christians, who have recently, on 12 March, suffered more violent attacks? Is he also aware that the recent report of the US Commission on International Religious Freedom claims that the Egyptian Government’s,

“respect for freedoms of … religion remained poor”?

Will Her Majesty’s Government therefore urge the Egyptian Government to do much more to protect the security and fundamental religious freedoms of all their citizens, as they are obliged to do under the Universal Declaration of Human Rights?

My Lords, in 2008 we welcomed the decision of the Egyptian courts to allow the Baha’i to have identification documents that give no indication of their religious affiliation. We are encouraging further efforts and we welcome the pursuit and subsequent arrests in respect of the fatal shootings at Nag Hammadi. While the Egyptian Government have accepted some 111 of the 165 recommendations made in the universal periodic review, we continue to press our concerns and stand ready to support Egypt and its Government in taking forward any of the UPR recommendations.

My Lords, will my noble friend confirm that Muslims in Egypt who convert to another religion are routinely subjected to arrest and torture and are prevented from taking refuge in any other country? While I recognise the work that the Government have done on this matter, would they consider inviting our colleagues in Europe to discuss joint action?

My Lords, I cannot confirm the detail on my noble and learned friend’s question, but I know that there is an issue. The European Union has an ongoing dialogue with the Government of Egypt on human rights; the European Neighbourhood Policy discusses human rights and there was a meeting on 10 and 11 March. I will certainly take up his points and respond to him.

My Lords, the Minister mentioned the EU’s dialogue with Egypt on democracy and human rights, but what is Britain doing to promote democracy and human rights in that country? Egypt is clearly stuck—in many ways, it has gone backwards in the past 10 years—on these issues. Are we working actively with the EU? Are we providing aid and technical assistance ourselves to help to strengthen civil institutions in Egypt?

My Lords, as I said, the European Union has an ongoing dialogue with the Government of Egypt, as do the United Kingdom Government. The European Neighbourhood Policy action plan creates a political sub-committee to take forward and provide a framework for dialogue on human rights. We were active in the universal periodic review of Egypt in February. We called for the Egyptian Government to review and amend legislation on freedom of association, freedom of expression, freedom of assembly, and religion, and to ensure full compatibility with Egypt’s international obligations—which we share—as a member of the United Nations Human Rights Council.

My Lords, the Minister will be aware of reports that, since 1981, no fewer than 400 Christians have been assassinated in Egypt, at an average of 13 a year. How many convictions have there been of those committing such atrocities? He will have seen the report that, as recently as 22 February in Dayrut, a Christian was shot 30 times and his head was paraded around the village. Four Muslims were in court about that incident. The result is in—acquittal. What comments does the Minister make on those facts?

My Lords, my first comment is that I am not aware of the detail of the case that the noble Lord raises, but I shall certainly look into it. It is true that in the Coptic Christian community there is a sense of being under greater and greater threat. I am told that this has come about in the past few years and that some years ago relations were much better between the Sunni Muslim majority and the Coptic Christian minority. The situation has been exacerbated by some of the issues raised by noble Lords. We continue to press the Government of Egypt on all occasions, both through the European Union and individually, to recognise human rights and the need to promote democracy. That is in the interests of that country and it is the acknowledged wish of that country. We must help Egypt to achieve it in a way that saves rather than squanders lives.

Will my noble friend confirm that the Westminster Foundation for Democracy has been active over the past few years in working with the Egyptian Parliament on programmes to promote democracy? Will he discuss with his colleagues in the Foreign and Commonwealth Office and the Department for International Development ways in which the work of the WFD can be expanded and developed?

My noble friend makes an important point. It is at the level of parliamentary exchanges that we have had an influence. One of the great problems in dealing with any country is that many problems are not at parliamentary level but at rural or village level, where understanding and tolerance are in shorter rather than greater supply. However, I take on board the suggestion that my noble friend makes and will raise it with my colleagues in the Foreign Office.

Will the Minister accept that we on our side associate ourselves strongly with the concerns raised by the noble Baroness, Lady Cox? He will know that there are more than 10 million Christians with Coptic connections in Egypt, so we are dealing with a major problem. Will he comment on the report that one reason why the tensions rose so rapidly in Nag Hammadi was incitement by a sheikh in a nearby mosque? If so, that is a serious matter. Could he comment on it?

Alas, I feel somewhat naked in your Lordships’ Chamber, inasmuch as I have no particular knowledge of that incident either. I shall investigate and respond. In general, what we wish to see is a greater willingness on all sides not to inflame situations that already have enough tension in them. I am not aware of the case that the noble Lord raises, but I shall investigate and respond as soon as possible.

My Lords, could Her Majesty’s Government encourage the Egyptian Government to be both proactive and positive in affirming the citizenship of all citizens, by which the security of minorities can be assured?

My Lords, I would love to be able to give the right reverend Prelate the assurance that he seeks. We do press the Egyptian Government, who have taken the matter seriously and offered assurances as recently as January, in a meeting with my honourable friend Ivan Lewis, about protection of the Christian community. We have to translate those commitments into action on the ground and we continue to make that endeavour on all occasions.

Defence: Nimrod Crash


Asked By

To ask Her Majesty’s Government whether there has been any change to the position regarding General Sir Sam Cowan and Air Chief Marshal Sir Malcolm Pledger and the allegations made against them in the Haddon-Cave report on the Nimrod XV230 crash.

My Lords, first I am sure that the whole House will wish to join me in offering sincere condolences to the family and friends of Captain Martin Driver, who died in Selly Oak Hospital last week from wounds sustained in Afghanistan, and of Lance Corporal Scott Hardy and Private James Grigg, who were killed in operations in Afghanistan recently. All were from 1st Battalion The Royal Anglian Regiment.

Before I answer the Question, I declare a past interest as a non-executive director of the DLO, the DPA and subsequently of Defence Equipment and Support. I assure noble Lords that in those roles I was not personally involved in any decisions relating to the matter before us, and that I have no interest, pecuniary or otherwise, to declare.

I turn now to the Question. The answer is no. The report was published last autumn. The Government are implementing its recommendations, but do not intend to make any further comment on Mr Haddon-Cave’s analysis of the roles of individuals.

My Lords, I thank the Minister for that extremely disappointing reply and of course add my condolences in relation to the three people killed in Afghanistan whom he mentioned. The military covenant is the tangible expression of the nation’s loyalty to its Armed Forces in return for their loyalty to the nation. In his report on the tragic loss of Nimrod XV230, Mr Haddon-Cave QC publicly condemned two distinguished senior officers, General Sir Sam Cowan and Air Chief Marshal Sir Malcolm Pledger, for imposing the defence cuts that were held partly to blame. Ministers, not senior officers, impose defence cuts, so can the Minister tell the House when the Government will heal this clear breach of the military covenant and demonstrate their loyalty to these now-retired officers by publicly refuting their unwarranted traduction for implementing ministerial direction?

My Lords, I have nothing to add on the case of the two individuals. The Minister of Defence accepted his responsibility. He also accepted the direct recommendations of the report and the wider criticism, and we are acting to implement that report. As I said, we have nothing to add on the case of the individuals.

My Lords, we on these Benches send our condolences to the families and friends of Captain Driver, Corporal Hardy and Private Grigg of the 1st Battalion The Royal Anglian Regiment. During the Nimrod Statement, the noble Lord said that he could not comment on these two officers because of a separate police investigation into two senior serving Royal Air Force officers. What is happening to this police investigation and what is the connection with the officers mentioned by the noble Lord, Lord Ramsbotham?

My Lords, I did indeed say that I could not comment for that reason. It is perfectly true that there is a general connection and that that could become a problem. However, on reflection, I think we have to say that quite honestly it is not appropriate to elaborate on the Haddon-Cave report, and we do not think it useful to second-guess that inquiry. I cannot comment on what will happen with these cases. They are in the hands of the Royal Air Force Police, to which they were directed following consultation with the Director of Service Prosecutions. I can say no more until the cases come to court or are dropped.

My Lords, first, I associate myself and these Benches with the condolences that have been expressed to the families and friends of the soldiers of the 1st Battalion The Royal Anglian Regiment who were killed in action. Will the Minister confirm that these officers were carrying out government policy when they were serving? If not, why were they still allowed to serve?

I assume we are talking about the two officers who have retired. It is true that the DLO was required to make these savings. It was expected that efficiencies would be made as a result of restructuring the Defence Logistics Organisation, merging three organisations into one, so it was indeed a government policy for which the Government were responsible. We have commented elsewhere that we have to see whether our systems can be improved to make sure that financial pressures never come into safety decisions. Indeed, we have affirmed that we are putting safety first.

My Lords, the noble Lord, Lord Robertson of Port Ellen, who was Defence Secretary at the time, says that he accepts full responsibility for the efficiency targets that he set for the Defence Logistics Organisation. He went on to say that Haddon-Cave made no attempt to interview Ministers, so,

“it was particularly unfair and unjust to name General Cowan … the first ever Chief of Defence Logistics, and his successor, Air Chief Marshal Pledger”.—[Official Report, 16/12/09; col. 1607.]

Do Her Majesty’s Government agree with the noble Lord, Lord Robertson, and, if not, why not?

My Lords, the Government accept the position that my noble friend Lord Robertson set out about responsibility for the cuts. He was clear that it was the intention of the Government of the day that efficiencies should be achieved. However, we will not comment on what my noble friend said about the individuals concerned. He offers a view from the evidence, and that is the only evidence that we have. We do not believe that it makes sense to second-guess the inquiry and we will not do so.

Taxation: Personal Residence


Asked By

To ask Her Majesty’s Government what further legislation they propose to deal with tax and personal residence.

My Lords, the Government reformed the rules governing the taxation of individuals who are resident but not domiciled in the United Kingdom in 2008. The Government have also introduced legislation to deem that all MPs and Members of the House of Lords be resident, ordinarily resident and domiciled in the UK for tax purposes.

My Lords, I thank my noble friend for his Answer. I am sure that he is aware that the issue of residence, or rather non-residence, remains very unclear. That of domicile is even more complex. I note what he says about Members of both Houses, which I assume has all-party agreement. If that does not go through in the current legislation, I assume it will go through in what is called “the wash-up”. More importantly, why do we not abolish the concept of non-domicile for everyone, leaving the question of residence as the only form of legislation on this matter on the statute book?

My Lords, my noble friend, as always, asks several questions. I believe that the proposal in respect of domicile and membership of Parliament, and particularly of the House of Lords, has all-party support. The concept of non-domiciles brings great benefit to the UK economy. It allows people to come here to work for a time, supporting the UK economy—particularly, but not exclusively, our service and cultural sectors, which are considerable beneficiaries of the non-domicile approach—but it does not subject them to taxation in the UK on their non-UK income, unless they have remained here for more than seven out of the past nine years.

On residency, my honourable friend the Financial Secretary in the other place has spoken about the desirability of putting the residency test on a statutory basis and consideration continues to be given to that subject.

My Lords, as so often, the noble Lord, Lord Barnett, and we on these Benches speak with one voice. Does the Minister agree with Cathy Newman’s first-class FactCheck analysis on Channel 4 that there are clouds of uncertainty about how much money a non-dom tax would raise? Instead of a non-dom tax, a poll tax of £25,000 or £30,000 a year—a flea bite for the super-rich—why not charge everyone who has lived here for seven years full British tax? If you are in the club, why should you not pay the subscription?

My Lords, I think the noble Lord misdirects himself and the House as regards the amount of money raised from non-domiciled individuals. More people have registered under the remittance tax basis for non-domicile treatment than we anticipated and our estimate is that the UK revenue achieves something in excess of £6 billion a year from non-domiciles. There are real advantages to the UK economy of allowing that status to continue. We have no current plans, either for the lifetime of this Parliament or for the duration of the next Parliament, to revisit the remittance basis of taxation.

Diamond Jubilee


Asked By

To ask Her Majesty’s Government what steps they are taking to stage a special horse race to mark the Diamond Jubilee in 2012.

My Lords, planning for Her Majesty the Queen’s Diamond Jubilee is still in the early stages, but the British horseracing industry is considering ideas to celebrate this great event. They include a special new race, themed race meetings across the UK, or moving the Derby—which will coincide with the 2012 Diamond Jubilee weekend—to one of the Jubilee Bank holidays.

My Lords, I cannot thank the Minister enough for that amazingly decent reply. I owe a debt of gratitude to the noble Lord, Lord Brooke of Alverthorpe, who initiated this idea in the first place. Does he agree that this offers Parliament the chance to unite in wishing Her Majesty good health, long life and the happiness that she deserves for a lifetime of service? Has any thought been given to a trophy for this race, to which I am sure we would all, including the rich Minister, be delighted to contribute and to it continuing in perpetuity?

My Lords, I am delighted that the noble Baroness is so delighted with my Answer; delighted and relieved, I think. All those with a love for horseracing, and for Her Majesty the Queen, which I suspect is the overwhelming mass of the British people, will be delighted to hear of the noble Baroness’s suggestion of raising a public subscription for such a trophy. I suspect that it will be oversubscribed. I will be very pleased to go arm-in-arm with the noble Baroness, flourishing our chequebooks, making sure that we are at the head of the queue.

My Lords, I cannot resist asking the Minister whether he realises that I would have laid 6:4 the field that he would not have given me as decent an Answer.

My Lords, we on these Benches—particularly me, because I do not often see Liberal Democrats at race meetings—find the suggestion by the noble Lord, Lord Brooke of Alverthorpe, and the noble Baroness, Lady Trumpington, very appropriate. It would be a suitable tribute to Her Majesty for the service she has given to the country and the support she has given to racing. Would the Minister not agree that the future of British racing, which is a model, is somewhat in doubt at the moment because of the funding problems and the internecine disagreements within racing? To do this properly, as I get the impression that the Government intend to do, would be a real shot in the arm and racing might be back on an optimistic route for the future, which, at the moment, it is not.

My Lords, I am not sure I share the observation that horseracing in this country is down in the dumps. That is certainly not my perception of it, although I do not have as close a contact with the industry as perhaps I should and would like. Noble Lords will understand that the British Horseracing Authority is responsible for the regulation and governance of the sport. It is in touch with the stakeholders and will know what to do and who to call in order to take forward the noble Baroness’s excellent idea.

Railways: National Express Franchises

Private Notice Question

Asked By

To ask Her Majesty’s Government what representations were made by either Stephen Byers or on his behalf to the Secretary of State for Transport and his department in relation to the National Express rail franchises; and if they will institute an urgent investigation into the allegations in the Sunday Times of 21 March 2010.

My Lords, there is no truth whatever in the suggestion that Stephen Byers came to any arrangement with me on any matter relating to National Express. It is equally untrue to suggest that National Express was allowed by the Government to avoid any of its rail contract obligations when the company’s east coast subsidiary announced its intention to default on its franchise on 1 July last year.

Stephen Byers had a brief conversation in the House of Commons with me last June about the east coast main line. We discussed his experience in dealing with rail franchise difficulties when transport secretary. As regards the situation then facing National Express, I told him that despite the company’s difficulties, I had no intention whatever of renegotiating the east coast franchise on terms favourable to the company as the company was seeking in its approaches to my department.

I told Mr Byers that such a move would undermine the rail franchise system and would not be in the best interests of taxpayers. This is precisely the policy that I pursued and announced to Parliament on 1 July last year when National Express indicated its intention to default on its east coast franchise. The Government declined to renegotiate the east coast contract. I required National Express to pay the full amount that was due for its failure to meet its contractual obligations under the east coast franchise, and I took every step that was legally possible in relation to the other National Express franchise contracts. This included my Statement to the House on 26 November that the company’s profitable East Anglia franchise would be terminated three years early, with all profits foregone.

These are the facts. Any claims to the contrary are pure fantasy.

My Lords, I thank the Secretary of State for his personal explanation and for his response to my Question. When did he first become aware of the allegations which have been printed this weekend, and what communication has he or his department had with Stephen Byers since then? Will he also tell the House why Mr Byers was under the clear impression that he had, as he put it, a deal with the Secretary of State?

My Lords, I became aware of the allegations when the production company behind the programme to be broadcast this evening contacted me last Tuesday or Wednesday; I cannot recall precisely which day. I have had no communication with Mr Byers since. I have not the faintest idea why Mr Byers said what he said to the undercover reporter, but I notice that he has withdrawn unreservedly the comments that he made.

My Lords, setting aside the particular problem of the allocation of rail franchises, do the Government now think it is time to ban the revolving door through which former Ministers and senior civil servants take up very lucrative retainers, consultancies and directorships, and rapidly transfer their allegiance to commercial companies where they are thought to have knowledge and access to their former colleagues? Is it not time to have at least a five-year interval between having such appointments in the Government and taking up these particularly lucrative consultancies?

My Lords, the noble Lord makes a good point about the need to examine further the rules on appointments which former Ministers and Members of both Houses can legitimately take up. However, on the question posed to me by the noble Baroness, I stress that I am accountable to this House for my actions as a Minister. The opening words of the Ministerial Code are:

“Ministers of the Crown are expected to behave in a way that upholds the highest standards of propriety”.

That is precisely how I have behaved throughout my dealings with National Express.

My Lords, it would be hard to argue for one moment that the noble Lord, Lord Adonis, was responsible for some of the things that are alleged in the Sunday Times report. However, I strongly support the argument put by my noble friend Lord Tyler that there is an absolute necessity for once again being much clearer about the rules that link the position of Ministers, particularly Ministers who have recently left office, with possible future commercial appointments. The position has become very unclear, very weak and very fuzzy. Does the Minister not agree that it is important to protect honourable Ministers such as himself by making these rules much clearer and more transparent than they are today?

I agree with everything that the noble Baroness has said, and I am very grateful for her personal remarks.

Does my noble friend agree that he has been most unfairly traduced? He has done the House of Lords a great service by being as frank and open as he has been.

My Lords, I have done nothing for which I owe the House an explanation or any apology. The fact that comments that are entirely unsubstantiated have been made does not, I hope, reflect on my personal conduct in this matter.

Business of the House

Motion to Refer to Grand Committee

Moved by

That the following two reports be referred to a Grand Committee:

Annual Report for 2008-09 of the Intelligence and Security Committee (Cm 7807)

Annual Report for 2009-10 of the Intelligence and Security Committee (Cm 7844).

Motion agreed.

Children, Schools and Families Bill

Order of Consideration Motion

Moved by

That it be an instruction to the Committee of the Whole House to which the Children, Schools and Families Bill has been committed that they consider the Bill in the following order:

Clauses 1 to 26, Schedule 1, Clauses 27 to 40, Schedule 2, Clauses 41 and 42, Schedule 3, Clauses 43 to 46, Schedules 4 and 5, Clauses 47 to 51.

Motion agreed.

Building Regulations (Amendment) Bill [HL]


My Lords, I beg to move that this Report be now received. In so doing I thank my noble friend the Minister and all the other parties for finding consensus on this issue, which I will bring back to this House at a later date.

Report received.

Powers of Entry etc. Bill [HL]


Report received.

Anti-Slavery Day Bill

Order of Commitment Discharged

Moved By

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.

Motion agreed.

Arrangement of Business


My Lords, as there is no speakers list for this afternoon’s debate on the House Committee’s report on financial support for Members of the House, it may be helpful if I say a few words about the expected running order. The debate will be opened by the Chairman of Committees, who will be followed by my noble friend the Leader of the House, the noble Lords, Lord Strathclyde and Lord McNally, and the noble Baroness, Lady D’Souza. At that point, the House may wish to hear from the noble Lord, Lord Wakeham, before other noble Lords rise to speak. With the leave of the House, my noble friend the Leader of the House will reply at the close of the debate.

House Committee: Third Report

Motion to Agree

Moved By

That the Report from the Select Committee on Financial Support for Members of the House: Declaration of Principal Residence and Publication (3rd Report, HL Paper 89) be agreed to.

My Lords, as with the previous debate on this issue in December, I will open today’s debate and the noble Baroness the Leader of the House will close it. As before, I should like to make a general declaration of interests on behalf of all noble Lords taking part today. I claim travel expenses under the scheme and I am a paid office holder. I am sure that many noble Lords taking part in today’s debate will have similar interests as claimants under the Members’ reimbursement scheme. Therefore, it is not necessary for noble Lords to begin their speeches with a declaration of interests.

The committee’s report on financial support for Members, specifically the declaration of principal residence and publication arrangements, should mark a significant step forward for the House following a difficult period. I do not intend to spend much time talking about the background to this report, which will be familiar to the House, but it might help if I briefly set out the timeline of recent events.

In June of last year, the House Committee asked the Prime Minister to commission the independent Senior Salaries Review Body to review the financial support available to Members of this House. The SSRB reported on 23 November and its report was debated by the House on 14 December. The Motion which the House approved after that debate accepted the principles and architecture of the SSRB’s report, and called for the establishment of an ad hoc group of Members to consider and consult on the issues in the report, and to advise the House Committee on their implementation.

On the following day, 15 December, the House Committee appointed the Members of the group with—I am very pleased to see him in his place this afternoon—the noble Lord, Lord Wakeham, as its chairman. It was envisaged at that point that in light of the Wakeham group’s recommendations, the House Committee would make a report to the House setting out recommendations for a new scheme of financial support based on the principles and the architecture of the SSRB’s report. The Leader of the House would then table the necessary Motions in the House for agreement before the end of the current Parliament.

In the event, it has not yet been possible for the group to finalise its report to the House Committee. In view of the limited time available in the last few weeks of the current Parliament, it will not now be possible to put a comprehensive package of proposals to the House before the end of the Parliament. On behalf of the House Committee, I should like at this point to put on record our appreciation of the work that the group has carried out so far on what are difficult and complex issues, not least the extensive consultation that the group has carried out with Members.

Despite the delay in implementing the package as a whole, the House Committee believes that we should make as much progress as we can now, given the commitment in December to bring the new scheme in at the beginning of the new Parliament. Therefore we propose that the House should agree to the introduction from the start of the new Parliament of new arrangements for the designation and certification of principal residences outside London. This will address a main weakness of the current scheme, which has been the subject of a good deal of understandable public criticism.

In addition, the committee recommends that the House should agree to new proposals for quarterly publication of information relating to Members’ expenses from 1 April this year. We believe that these two changes, coupled with the new arrangements relating to the code of conduct agreed by the House only last week and the appointment of an Independent Commissioner for Standards in the new Parliament, will constitute a significant move forward for the House. The House Committee will make a further report in the new Parliament with further proposals for the new system of financial support.

I turn now to the detailed recommendations of the report before the House. The report recommends a new definition for “main or principal residence”, which is significantly clearer and more robust than the current one. I should stress, as I did on 14 December, that the new and improved definition does not constitute any criticism whatever, implied or explicit, of those Members who have legitimately claimed allowances under the current scheme.

The committee’s report invites the House to agree to the SSRB’s main recommendation on principal residence: that all Members seeking to claim financial assistance with overnight accommodation within London sign a declaration stating the location of their principal residence and giving confirmation that it is outside Greater London. The ad hoc group has indicated informally that it agrees with this important SSRB recommendation.

The committee also recommends that the required declaration should include a statement of where Members spend most of their time—particularly where they spend most nights—when the House is not sitting. This time includes weekends during term time. That place should be the Member’s principal residence. Such a statement may also include any other circumstances which the Member deems relevant to his or her designation. Guidance on what these circumstances might be will be made available to Members by the Finance Department as soon as possible.

The House Committee believes that this recommendation strikes an important balance between the clear need for a robust and clear definition and for a definition which recognises that active Members may need to spend up to 150 days a year in their London accommodation—or perhaps more if they live a considerable distance away—in order to play a full part in the House. That is the reality for many of us and, for those of us primarily resident outside Greater London, means that some aspects of our lives inevitably revolve around us being inside Greater London. Therefore, for example, it seems to me entirely reasonable that an active Member should use a London address for correspondence because they are in London for most working days.

In advance of today’s debate, a number of Members have sought clarification of the meaning of the reference to where they spend most nights. It may be helpful for me to clarify at this point, for the record, that this wording means most nights when the House is not sitting, not most nights over the year.

The report also states that Members seeking to claim for overnight accommodation in London must support the declarations on their principal residence by providing the Finance Department with copies of documents from an approved list to verify that their principal residence is outside London. The declaration should be made on an annual basis and should be revised if the Member’s circumstances change. A further important recommendation is that all principal residence declarations should be made publicly available on the parliamentary website. Such a change would be an important and necessary step forward in transparency, as would the recommendations for other new publication arrangements, which I shall explain in a moment.

On audit arrangements, the SSRB recommended that fees and expenses paid to Members should continue to be externally audited by the National Audit Office and that the audit process should also check Members’ eligibility for financial assistance with overnight accommodation. Again, the Wakeham group has indicated informally that it supports this recommendation and that it should extend to auditing Members’ declarations of their principal residencies and to the supporting documentation which I have just mentioned.

Therefore, in addition to the publication of Members’ declarations, we invite the House to agree that the Accounting Officer should introduce a system of regular audit checks of the declarations of principal residence, both internally and via the National Audit Office. If the House agrees to the report, the administration will prepare standard declaration forms and communicate the new arrangements to Members in the next week or so.

I turn to the committee’s recommendations on publication of expenses information. Currently the House publishes annually the totals claimed by each Member in each category of expenses, along with the total number of sitting days attended. Some, but not all, Members disclose the location of their principal residence by county or region. Under the present arrangements, the annual publication of information on expenses for 2009-10 is due to take place this autumn. The timetable for publication is dictated in large part by the fact that, at present, Members can submit expenses claims within three months of the expenses arising. Once the information has been processed by the Finance Department, it is sent to Members to check. The three-month claim period, combined with the process of checking by Members, means that publication is necessarily delayed.

In the interests of greater transparency, and in line with the recommendations of the SSRB report, we recommend a move to quarterly publication of information relating to Members’ expenses, in the first instance broken down by the current categories of expenses. This proposal should take effect from 1 April 2010, with publication of the first quarter of the financial year 2010-11 in the autumn of 2010. This would be at the same time as publication of the 2009-10 information. We propose that, for quarterly publication, Members will be sent the material prior to its publication for information purposes only.

If the House agrees to quarterly publication from April, there are two related administrative changes which the committee believes will need to be made to achieve speedier publication. We recommend that, from 1 April 2010, expenses claims must be submitted within one month of the end of the month in which the expenses arose and that the Finance Department will send the information on expenses to Members prior to publication for information purposes only. Moving to quarterly publication from 1 April would be a significant change and another step forward for the House, placing information in the public arena on a more frequent basis than we currently do.

The report before the House today is short and contains a set of limited but significant recommendations. There is a clear consensus on the part of the independent SSRB, from the Wakeham group and from the House Committee that the lack of an adequate definition of “main residence” is a key weakness in the current scheme. This inadequate definition has exposed individual Members and the House as a whole to considerable public criticism. If the House agrees to the Motion before it today, it will send a message to the outside world that we are prepared to put our House in order and to tackle our problems head on.

With the introduction of proper definitions, better enforcement and a greater degree of transparency, it is my hope that, as a House, we can now, and in the coming months, move on from what has been a difficult period for the House. Early in the new Parliament, we expect to bring forward the wider package of changes to the system of financial support for Members. I beg to move.

My Lords, I am grateful to the Lord Chairman for setting out so clearly for the House the matters that we are considering today. Once again, this House is facing an important issue. Last week, the House took the last step—at least for the moment—in putting in place a new code of conduct and its associated guide to give Members of this House and members of the public a transparent yardstick by which to measure us. We now have in place a regime which is clear, consistent and credible. We now have a system which is fully capable of dealing with any similar issues to those which led this House last year to suspend Members in a way unprecedented in modern times.

I make no comment about the weekend media allegations against Members of another place, but if such issues recur in this House, we will deal with them. In that regard, I can inform the House that the one Member of your Lordships’ House who was approached by the undercover media operation, my noble friend Lady Morgan of Huyton, last week referred herself for investigation by the Sub-Committee on Lords’ Interests, chaired by the noble Baroness, Lady Manningham-Buller. She referred herself before the allegations were made public.

In relation to the system of financial support for Members of your Lordships' House, we are not yet in such a clear position, but we are getting there. What is before the House today is an essential step along the way. I make it clear to the House what today is not about: we are not considering a new system of financial support for Members of this House. Accordingly, I think it appropriate that in any contributions to today’s debate Members should be mindful of that. However, that does not mean that what is in front of us today is not important—far from it. We are considering something of particular significance for Members of this House and for the standing and reputation of the House beyond the Chamber.

We have seen and are still seeing an unprecedented degree of external scrutiny of this House. Nearly all of it is scrutiny by the media. Such scrutiny, if properly executed, is an important part of a properly functioning democracy. As I have said before in this Chamber, we in this House have our arguments and differences with the way in which this particular form of scrutiny has been carried out. However, without debating the merits or demerits of that, one point is clear. Almost all the scrutiny that we have faced has concentrated on a single issue—the definition of the principal residence of Members of this House who claim overnight allowances under the Members’ expenses scheme. That has been the focus of the attention and criticism, and that is the issue before the House today.

I strongly support what the House Committee proposes to the House today. Its report is in effect the first tranche of work from the ad hoc group that embraces the SSRB’s main recommendation on principal residence. I know that some Members of the House have questioned the decision to extract part of the ad hoc group’s work and bring just that element before the House today. I very much hope that the House will be able to hear later in this debate from the noble Lord, Lord Wakeham, about what the committee has concluded in this area. Although its work is not yet completed, I pay tribute to and thank members of the ad hoc group for the large-scale effort, time and commitment that they have already given to the considerable programme of work with which they were charged by this House. However, in advance of that, there is a pressing need to bring forward proposals in this area, especially with regard to the continued criticism of Members of this House in relation to their principal residences.

The proposals before us today offer a robust regime of the designation and declaration of the principal residence of Members of your Lordships’ House for the purposes of making overnight allowances claims. The proposals are clear, concise and comprehensible. I believe that they should be adopted by the House today. At the same time, I recognise that not all Members of this House will be content with them. For some, the criteria that they lay down may, in terms of the regime that the House has been operating—described by the noble Lord, Lord McNally, as “rough and ready”—prove difficult. Some Members of this House, who have made claims in the past, will, under this much tighter regime, no longer be able to do so.

No system can satisfy everyone; everyone’s individual circumstances are different and a change to new arrangements will inevitably lead to changes in some individual Members’ arrangements. However, I think that the right balance has been struck. What is being proposed is not some mechanistic regime that will lead to a number of Members of your Lordships’ House no longer being able to attend, but neither is it a loose system, which makes both Members of the House and public accountability vulnerable. It is, instead, a balanced regime of designation and declaration, one which supersedes in full the position that we have had in place in this House until now. It is a provision fit for the future.

I said last week when we considered our now approved guidance to our new code of conduct that responsibility for abiding by the code now passes to the Members of this House and I hope that in relation to the proposals on principal residence, the House will approve the Motion before us. If that is what the House decides to do, it places a responsibility on every Member to abide by what the House has decided and the provisions that it is putting in place. As with the code in relation to their principal residence, it is now for the Members of your Lordships’ House to consider their own position and circumstances in the light of the House adopting these provisions today. Members need to look at their circumstances, test them against the provisions that they are considering today and make any changes necessary, acting not just in accordance with the rules of the House but with their own standards of personal honour, morality and conduct.

This is a self-regulating House. In overall terms, in relation to these matters in Parliament, it is the Government’s policy to see a move from self-regulation to independent regulation. That is what we have proposed for the House of Commons and that is what the House of Commons has adopted. However, we recognised last year, when we brought what is now the Parliamentary Standards Act before your Lordships’ House, that a different tradition and practice of self-regulation in this House meant that we could not and should not yet apply regulation by the Independent Parliamentary Standards Authority to this House. Of course we welcome the forthcoming appointment of the independent Commissioner for Standards.

Our longer-term ambition remains but, in advance of that, we in this House have an approach based on the concept of a self-regulating House. With the principle of self-regulation, though, goes the priority of personal responsibility. As we have maintained in adopting a new code of conduct, the concept of personal honour is central to your Lordships’ House. The right of self-regulation is inextricably intertwined with the responsibility of self-compliance. The clear, consistent and credible proposals before us today will assist us. They will also address a weakness in our present system that all sides of the House acknowledge. They will mark a real improvement. The new regime of definition, designation and declaration of Members’ principal residences will be of benefit to Members of this House, to the Houses as a whole and to public accountability. I urge the House to adopt them and to support the Motion from the House Committee.

My Lords, I thank the noble Lord the Chairman of Committees and the noble Baroness the Leader of the House for what they have said and for being clear not just in their support for the report but in their explanations of it.

Last week, when we discussed the code of conduct, the noble Lord, Lord McNally, in his address made some extremely generous remarks about the noble Baroness and me. It would be entirely right for me to inform the House that the noble Lord and the Convenor have been part of a cross-party agreement that we should do things together as far as possible and that if we have disagreements—I am glad to say that we have had as few as possible—we should sort them out before coming to the House with a united voice, which we have done. Achieving the minimum exploitation for party advantage has been an advantage to this House and it will hold us in good stead.

I am sorry to hear about the problems that the noble Baroness, Lady Morgan of Huyton, may be having, but that is now a matter for the sub-committee of the noble Baroness, Lady Manningham-Buller. No doubt we shall receive a report in due course.

This is the next in a series of debates that we have had in recent months. Last week we discussed the code of conduct and our interests. This week we look at our regime of expenses and a new definition of “declaration of principal residence”. The reasons for the change that we are making today are well known and deeply regrettable. Most of us in this House have always known where our main home is and have not broken any rules, or indeed the spirit of the rules. More important than that, this is an opportunity to demonstrate a clear break with the past. It is the opportunity for the House to say, “We will not let the grass grow under our feet; we have come forward with a new initiative”.

I simply draw the House’s attention to paragraph 6 of the report, which says,

“A main weakness of the current scheme has been the inadequacy of the definition of what constitutes a Member’s principal residence outside London”.

That entirely tackles and deals with that situation. I agree with the proposal. I hope that the paperwork will be in place in plenty of time, so that Peers can hand over their necessary bureaucratic paperwork to the Clerks and this can be fully in place at the start of the next Parliament.

On the issue of publication, I welcome the start of the quarterly publication of claims, but I hope that the noble Lord the Chairman of Committees can perhaps go a little further and agree that this could well be the first step in moving towards a rolling declaration so that, when claims are paid by the Finance Department of the House of Lords, they should at the same time go on the website. That would again demonstrate a very clear commitment to transparency, accountability and clarity in our expenses.

I look forward to hearing the rest of the debate and particularly to listening to my noble friend Lord Wakeham. I am one of those who regrets, as I think many do, that we have been unable to come forward with a full package of reform before the end of this Parliament, but I understand the reasons for that. There is still a lot of work to be done and it is better to do it a little more quietly in the next Parliament than in a mad rush over the course of the next few days. I hope that the whole House will support this report.

My Lords, I thank the noble Lord, Lord Strathclyde, for his kind comments. The reason why I made that particular point last week is that, whereas most people expect the Liberal Democrats and the Cross Benches to behave, it becomes noteworthy when the government and opposition Benches do so. Nevertheless, I am grateful.

Today is a significant stage in a process in which we are dealing with damage to the reputation of this House, which has caused concern and worry to Members. As the Leader of the House reminded us last week when we debated the code of conduct, the House of Lords has not been slow in responding to specific threats to its reputation or to specific complaints. In the case of the Sunday Times sting involving four Members of this House, we were willing to use a 300 year-old precedent to impose sanctions and to employ a method of investigation and judgment whose process and fairness no one questioned. I believe that there is now general confidence in the noble Baroness, Lady Manningham-Buller, and her committee in dealing with events.

Today, we are carrying forward the implementation—or part-implementation—of the SSRB report into our system of allowances. When the report was first published, I, along with other party leaders, welcomed it and its broad architecture in spite of the element of collective punishment in its findings. I did so because I thought that the suggestion of a single daily allowance was more fit for purpose than splitting the figure between attendance and office costs. However, by the time that the House Committee came to examine the report and next steps, it was clear to me—and, I think, to other party leaders—that it would not be possible to persuade the House to swallow the SSRB report whole without further examination of its implications, especially for those Members who had London and out-of-London homes. Hence, we asked the ever willing noble Lord, Lord Wakeham, and his colleagues to take a second look. In so doing, we had to face a number of realities.

One reality is that we are a House of over 700 Members, appointed for life. Another is the average age of this House, which is 68. A further reality is that within our numbers are some of the richest people in the land and some who could not contribute to our deliberations without the support that our allowances scheme provides. Providing a one-size-fits-all scheme in such circumstances was always going to be difficult. Added to that was the fact that the allowance system had grown up to be—to use a phrase that I have used before—vaguely drawn and lightly policed. To put it another way, there was more than sufficient wriggle room in the system to make it more than a precise and detailed cover for itemised expenses. The reason for that is that we are not salaried and receive no payment when the House is not sitting, even though some expenses continue regardless of that fact. It is worth putting on record that, this year, Members of the House of Lords will be able to claim allowances in only eight months out of 12.

The report whose recommendations we are asked to endorse today is an interim report, for reasons that have been explained. The key recommendation that we agreed to is the introduction, from the start of the new Parliament, of new arrangements for designating and certifying principal residences outside London. That will address the main weakness of the existing system. Indeed, on re-reading the report before noble Lords today, I question the use of the term “inadequacy of definition”. The fact is that there was no definition. That may have been a glaring omission, but it cannot be put right by trying to write the rules retrospectively. Members were not asked to keep a log or retain receipts or other means of identifying their claims. However, as the Chairman of Committees has explained, the key elements of the new system deliver a clear definition of entitlement, a required proof of entitlement and a process of audit of entitlement. None of these factors was present in the old system, but all will be present in the new.

What we have faced in recent months is the dilemma faced by the Clerk of the Parliaments and the House Committee: we were moving in uncharted waters. In retrospect, we were probably wrong to try to get an interim definition. What I reject entirely is any suggestion that the House Committee or any member of it tried to sabotage police investigations by a retrospective writing of the rules. There were no rules and no guidance. Perhaps we should have left matters there until we were in the position that we are in today to put new rules in place.

Let me deal with another matter raised by the chairman of the Senior Salaries Review Body, Mr Bill Cockburn. In a letter to the noble Baroness, Lady Hayman, which was copied to me, he suggests that, somehow, today we weaken the guidance by basing claims on a specific geographic area—that of Greater London—rather than the SSRB’s preferred option of reasonable commuting distance of the House of Lords. Here, I need to make a declaration of interest. I live in St Albans, which is, for thousands of people, in reasonable commuting distance. I have also claimed overnight allowances when I finish late and start early to avoid getting home at midnight and getting up at 6 am. That was my choice under the existing rules. If the House wishes to change these rules to exclude me from that option, it is quite within its power to do so. Instead of using Greater London, it can suggest a 50-mile radius, a two-hour travelling time or even five yards north of where Tom McNally lives. What we must not have is an entirely subjective definition that may mean one thing to the SSRB, another to the Sunday Times and another to a 67 year-old Peer who sometimes needs to be here at 8 am and at times at 10 pm. If we have learnt anything from recent events, it is that our rules must be clear, precise and not open to subjective interpretation.

I say one more thing about Mr Cockburn’s letter and the overall impression of the SSRB. He and his colleagues give the impression that the work that they have done for us carries the weight of a statutory body or binding arbitration. It was we who asked for the SSRB’s advice; we could have asked a single individual to do this work or set up an ad hoc, free-standing committee of inquiry. As the noble Lord, Lord MacGregor, pointed out in our debate on the new code of conduct, it is always open to this House to refine recommendations in the light of its collective experience. I will not delay us for long, but I suggest that the SSRB looks at the contribution of the noble Lord, Lord MacGregor, from 16 March at col. 582, where he pointed out many examples of reports from royal commissions and others coming to this House and then being refined in the light of Members’ experience.

What the SSRB recommended was to replace what was, as the Leader said, a rough and ready, cheap and cheerful system with one that, in terms of the overnight allowances in particular, was pernickety, overbureaucratic and far too open to subjective judgments. Let us be clear: as the noble Baroness, Lady Royall, indicated, we will follow through complaints of wrongdoing and co-operate with the police where necessary. What we cannot do is retrospectively write the rules and then fit people up as lawbreakers where no laws existed for them to break. Today we have an interim statement. We rely on the noble Lord, Lord Wakeham, and his committee to continue the good work. We thank the SSRB for its work. However, I ask it not to feel honour-bound to react if we do not accept every jot and comma of its report. We asked for a report, not holy writ.

There is a dilemma still to be wrestled with about how those who live out of London and have London homes can receive an allowance that is transparent and proportionate without loading the Members and this House with a burdensome and expensive bureaucracy. There are those who want a fully receiptable system and those who do not. We await the wisdom of Wakeham on this matter.

As the leader of one of the three main parties in this House and a member of the House Committee and the Privileges Committee, I take my responsibilities very seriously. We are responsible for protecting a proud heritage in the reputation of this House. I do not want to see a system that allows cheats to prosper, but neither do I want a system that makes this House only for the London-based and independently wealthy. Perhaps we were too slow to move with the times in transparency and accountability. I take my full share of responsibility in assuming that the public would see that what they lost in detailed and transparent accountability they gained in a lean bureaucracy and value for money. That is not the spirit of our age and we have learnt that the hard way, but we have learnt and today is one more step in establishing a House of Lords whose probity, transparency and accountability will be a model for our times. I urge the House to accept the report.

The SSRB report published towards the end of last year is a milestone in House of Lords reform. It is unlikely that this House would have arrived at fundamental changes to the allowances arrangements with such speed in its absence. To some extent, the report can be seen as a stalking horse to see what the response is. Some of it has been discontented, but I guess that the SSRB expected some dismay. The important fact is that it has provoked debate, thought and revision, as well as the report we are considering today.

As the noble Lord, Lord McNally, has said, the SSRB wrote to the Lord Speaker on 18 March and copied the letter to other Members of this House. It was concerned that the definitions of “principal residence” did not include the full list of ancillary evidence advocated by the SSRB. For example, the SSRB recommends that the criteria for a principal residence should include answers to questions, such as, “Where are most of your possessions?”. This is not always a sensible set of information to make publicly available, for reasons of security alone. Further, there is the question, “If you live with a spouse, partner or other family members, which would they regard as their main address?”. The answer to that may well be, “Where my spouse or partner or family members live”, introducing a somewhat teleological element. Further, there is the question, “Which address do you normally use for correspondence?”. It depends very much on what sort of correspondence. These wholly legitimate concerns illustrate the difficulty of having ever more detailed rules and regulations.

Broadly, the House Committee report lays out a much stricter definition of “principal residence”, with external audit. We again have to thank the SSRB for setting us on this new and much needed path. However, as we debated last week, ultimately, conformity will depend to a large extent on personal honour, as has been emphasised. The framework of rules creates a culture of accountability, which with dedication could be infringed. I really do not believe that any among us would now undertake such subterfuge.

The formality of a signed declaration on a regular basis, together with relevant documents, all publicly available and externally audited, as this report recommends, will surely serve to remind the individual of his or her obligations. A personal statement of individual circumstances is nowhere precluded and there has to be both compassion and flexibility in applying the rules, given the different needs many Peers may have. Despite these qualifications, the new system is to my mind so radically different from the current unclear and confused guidance that I must conclude we now have a wholly new regime.

There is one further point I wish to take up. This House considers itself to be a self-regulating institution and this may for some sit uneasily with what I hope we will agree to today. Self-regulation, personal honour, a degree of political distance, not to say impartiality, and courtesy in our dealings all help to define, for me at least, the second Chamber. It is a syndrome or cluster of characteristics that has been badly abused, but it still exists and unless we can be seen to be refreshing this syndrome on a daily basis with good, open practice, we may lose something important. Each Member of this House has to take, and in the past has largely taken, personal responsibility on voting, debating, claiming expenses and/or declaring interests. Rules alone do not a society make nor can actions be policed all the time; there has to be a commitment to making the rules work. We may by agreeing to the recommendations set out in the report be setting our own standards, but these are based on external good practice. The report is a judicious combination of the SSRB recommendations together with a degree of flexibility.

Finally, in accepting this report, we have a package: a code of conduct that clarifies how we behave in this part-time, unpaid Chamber; the imminent appointment of an independent commissioner on standards; a reinvigorated sub-committee on standards and conduct; external audit and quarterly publication of expense claims. Further, if some aspects of the forthcoming Constitutional Reform and Governance Bill survive the end of this Parliament, we may also have far stronger powers to suspend or even expel those who do not conform to these reforms. I recommend that this report be accepted and implemented in the new Parliament, and that this step should be followed by others towards a more transparent and accountable second Chamber.

My Lords, I should like to intervene briefly as chairman of the ad hoc committee looking at the implementation of the SSRB report on House of Lords expenses. First, I would like to confirm that my group is fully behind the House Committee’s proposals. We have no doubt at all that the lack of a proper definition of “main” or “principal” residence is a major cause of the difficulties we have had. I offer my apologies to the House for not completing our report before the election, as we had originally intended, but it is better that we get things right than rush them through in an unsatisfactory state.

We have made good progress and are anxious that the report should command maximum support across the House, and that it is seen outside the House as fair, transparent and reasonable. However, it would not be wise for me to drop hints today as to what we are going to propose and what we are not. Perhaps I may just add this about our deliberations. We have consulted and received guidance from approaching 500 Members of this House, which is a substantial amount of consultation. Our report, when it comes out, will be consistent with the resolution of the House in approving the principles and architecture of the SSRB report. Our proposals will suggest a number of changes to the proposals made by the SSRB, but will not cost any more than those which the body itself estimated were broadly the same as the current costs of support for Members of this House. Here I have to say, and not for the first time in my life, that I agree with a great deal of what the noble Lord, Lord McNally, said in his contribution.

We hope sincerely that our proposals will be made acceptable to Members without increasing costs to the taxpayer and will be seen outside this House as fully acceptable. At this stage, however, I want only to say that I fully support the House Committee’s report.

My Lords, the House has reason to be grateful to the Chairman of Committees and the noble Lord, Lord Wakeham, for having seized some of the recommendations made in the wider discussions last year and having taken them forward at a point when there is little time left before the general election. I rise to intervene only briefly because I fear that there is some danger that we may still underestimate the scale of public concern that confronts us, and it is about that concern that I want to say a few words.

I recognise that the noble Lord, Lord Wakeham, has widely consulted within the House, which is excellent. However, beyond the House is another audience and we have to go a long way to persuade it of the changes made in this House and another place to meet its great concerns. I will not detain the House for long, but I want to put on the table some of the things that we need to carry in our minds as we move forward to the period after the general election, so that we can persuade the public that we are a trustworthy, noble and independent-minded House of the kind that they have come to respect, because that respect is at risk.

In the past few years, we have seen the development of a culture of entitlement. In another place, that was partly because of the preceding decisions of Governments of both parties to set on one side the recommendations of the SSRB and instead make their own decisions, and then in some cases to decide that they could not accept the recommendations for reasons of public response. We have built up a situation in which there is now a strong sense of disillusionment among people in the other House. They feel that they have worked increasingly hard, carried huge burdens of surgery and other constituency concerns, and made the creaking wheels of government work better through their efforts in their constituencies. Bluntly, they feel that they are not recognised, respected or rewarded for all that work. In this House, the situation is rather different, but here too a certain culture of entitlement has built up. Noble Lords have also been asked to work more and more, for longer and longer hours, and to undertake scrutiny operations that, when they first became Members of this House, they need not have thought would fall to them—to do some of the work that would have been done by the House of Commons in older times. There is also some sense that we are not adequately recognised or adequately rewarded for what we do.

In both Houses, that sense of entitlement has taken the form of taking expenses to the maximum that can be claimed, as that is one way to recognise the work done that has not been recognised by Government after Government, because of the way in which they have rejected the decisions of the SSRB and other independent bodies for a proper reward for people who act, serve and work in Parliament. However, I shall move from that quickly because—as the noble Baroness the Leader of the House will point out to me if I continue any further along that line; I have no intention of doing so—we are discussing the central issue of the principal residences in which we live.

Again, let us be straightforward. Much of the huge press outrage about Parliament—not, alas, about a particular House—has swirled around the core of claims for second homes, switching of second homes, mortgages that have already been largely paid off and, in our House, overnight allowances. Because the most lurid cases have been made the most of by our distinguished press, there is a widespread sense in the public as a whole that we are all on the take and trying to get the most out of a system that is fuzzy, uncertain and obscure, as my noble friend Lord McNally rightly said. We do not need to repeat the cases, but we know that some are very serious. Some are ridiculous, some outrageous. The most has been made of those cases—arising from a small minority in both Houses, I agree—to give a distorted picture of what we do in Parliament and the ways in which we are rewarded.

The proposal now being made—that the principal residence should be declared publicly be each Member of this House; and that he or she, having made that declaration, should allow it to be published on the website and to be audited and overseen by an independent body—is absolutely proper and right. However, we have a long way to go to restore trust.

When trust is lost from a system, two things can happen. I saw one of them many years ago in Russia after the fall of the Communist regime, when the absence of trust led to the use of raw force by one citizen against another, in an attempt to substitute for the collapsed rule of law. In the other case, what often happens is a bureaucratic, detailed, minute, tedious system of oversight, where law replaces trust because there is no trust.

I have recently completed a huge round of meetings all over the country, with universities, voluntary bodies and others. The meetings were not about Parliament, but about my book. What I encountered, which deeply disturbed me, was a reaction of disillusionment, anger and cynicism so deep that I now begin to fear for representative government itself. I have been from Newcastle to Chichester, from Bristol to Liverpool—all over the country—in the past couple of months, and have come back deeply troubled by the mood of my fellow citizens.

Can we meet that mood with a much more rigorous definition of what it is to be in one's principal residence? I like the definition of a principal residence as the place where you spend most of the nights when you are not engaged in the business of Parliament, hopefully with your family or with other colleagues. Above all, you should be able to show that this is your home, this is where you live, this is where you think you belong to, and it is the home you are responsible for and look after. There are some cases that could not begin to fit that definition.

I will make one criticism before I come to an end. I apologise for it, because I think that members of the House Committee, and in particular the leaders of the main political parties in this House, behaved with great courage and dignity when, in the December debate, they strongly supported the acceptance of at least the broad framework and outline of the SSRB's report. We all know that some things are wrong: it is a flawed report. It reflects an inadequate understanding of the work of this House, the attitudes of Members of the House towards one another and the trust that they feel in one another. Those flaws can be put right. The noble Lord, Lord Wakeham, is an outstanding example of somebody who, with his colleagues, can help to put them right. However, the fundamental principle is inescapable. We must accept completely the outline of the report in order to be understood and accepted again by our fellow citizens as a trustworthy House.

My one criticism, which I will make openly, is that the House Committee made a substantial mistake in accepting, even as an interim and passing definition, that a principal residence could be somewhere that one visited for one day a month. On that basis, I could visit my allotment one day a month and declare that my grass house is my principal residence. It will not do, and it has exposed us to ridicule in the country as a whole. I hope that members of the House Committee will accept that that was not a wise decision, will put it behind them, and will recognise that, while they have the support of excellent servants of the House like the chief Clerk, the final responsibility for the political judgment, not in a party sense but in a broader sense, rests with them.

We can now go ahead with this tough new regime, which I hope will bring us back into the trust of our fellow citizens, and which will recognise that an overall audit of what we do, unattractive and disagreeable though it is, is essential if we are again to become the House that the country trusts and to which it is prepared to see a great deal of respect paid.

My Lords, it is always rather daunting to follow the noble Baroness, Lady Williams. However, I will make one or two comments as chair of the House of Lords Appointments Commission. All of us on that commission have some idea of the views of those now outside the House who follow the House and its affairs closely, and who would like to join in its deliberations. From that perspective, I see great advantage in having arrangements for financial support for Members of this House which are clear, understood and accepted, and which do not discriminate against those who do not have independent means or live outside London. I agree very much with the views of the noble Lord, Lord McNally, on that point. It seems that the best way of achieving that is to move towards a system that gives people at least some payment for the work that they do in this House and includes a clear and accountable system for reimbursing justified expenses. I recognise the difficulties in moving to such a system straightaway, and I would not argue that the SSRB report is perfect in every respect, but I think that accepting and building on the principles and architecture of that report, as we agreed in our debate on 14 December, is the right approach.

I recognise why it has not been possible to reach agreement by today but I strongly support the argument that we should reach agreement quickly on what can be agreed and I therefore support the two specific recommendations before us today. The first and principal recommendation on accommodation seems to introduce welcome clarity in an area where that has been lacking. The second recommendation will help to increase the transparency that will make the system as a whole acceptable.

I hope that quite shortly after the election, whatever its outcome, we shall be able to debate and agree a full set of recommendations. Finally, I stress again the need for those recommendations and the new system that we evidently need in order to be clear and transparent to those of us in the House, to those outside it, including those who will continue to look at us critically, and those who would like the privilege—and it really is a privilege—of joining your Lordships’ House.

I do not wish to delay the House for very long and there are only two issues on which I wish to focus. First, I agree with a lot of what the noble Baroness, Lady Williams, said, particularly about the threat to democracy. That has come partly from the way that we have behaved in the House of Commons and the House of Lords—we are the authors of our own misfortune. It has also come partly from the press—not because of the way that they revealed the problem relating to expenses but because of the more generalised attacks on Peers and MPs, although they are of no use whatever to democracy. They also failed to emphasise the good points, one of which I am not alone in emphasising: that Members of the House of Lords are not paid and, among advanced countries, this is the cheapest second Chamber in the world. Those are pluses which we should not allow ourselves to forget.

There are other points on which I should like to dwell. My noble friend Lady Royall said, in effect, that these recommendations will fix things for the future. I hope that she is right, although I do not think that she is. I think that today we are making the same mistake that was made many years ago when the House of Commons started taking independent recommendations and altering them. The House of Commons got into a lot of the difficulties that it did because it altered those recommendations, and I think that we are doing the same. This system is not fully robust and I am sure—indeed, the noble Lord, Lord Wakeham, with all his knowledge of the press will know this—that a lot of people in the media will be busy filling out their Freedom of Information Act requests right now because this report opens up a number of issues which allow people to be examined again. I may write to my noble friend about this and I should be delighted if my thoughts were to be passed on to other parties. For reasons that will not be immediately apparent—this is the problem with trying to do things ourselves—we are opening up other avenues for the media to investigate. I emphasise, as the noble Baroness, Lady Williams, did, that this is not a failure of the press; it is our problem. It is not a failure of the officers of this House, who frequently try to defend us and, at times, the other House. It is our fault because the system that we have is not robust and strong.

My main point is that if you think of this as a taxpayer or as a member of the public—the public are most angry about this not the press—you will understand that both Houses have had a system where, until very recently, they determined their own income, expenses and allowances, either by accepting a report and then changing it, or in some cases, as in the House of Commons, making the recommendations. Having done that, they turn to the taxpayers and say, “You must pay”. That worked for many years partly because the system was a bit more limited but also because there was not something called the Freedom of Information Act. I am a supporter of the Freedom of Information Act. It opens up huge areas for people to investigate and that is unlikely to stop. We need to ask the additional question: what else can you investigate as a result of the system you are passing today?

When the House of Commons was getting itself into this mess, I said to a number of Members of the Commons that we could not go on with the system where we set our own expenses and income and I was told, “No, it will be okay, we cannot have it done for us”. Actually, we are doing something like that today, which is a mistake. At the end of this road, there must be an independent way of setting our income, the manner by which it should be paid and how it should be investigated if there is abuse. If anyone points a finger at me, I want to be able to go to the relevant body, which in my view—not everyone will agree with me—should be the Independent Parliamentary Standards Authority, which would cover the whole House. I would want that body to investigate the situation and tell me whether I am right or wrong and, if I am wrong, I would stop doing it. We should all want that.

We would not pass an Act of Parliament which allowed any group, say judges or diplomats or magistrates, to set their own income or which provided for an independent body to set their income, after which they could have a meeting among themselves to decide how it should be changed. We would throw out such an Act. So why are we doing it? That is what the public will ask.

Basically, I make two points: first, we need an independent body. From what everyone has said, I fully understand that that is not a matter for today but I want to make it clear that in future I will not support anything which does not have such a body at the end of the road. My belief is—the House might want to think about this—that inevitably it will be the IPSA. I suggest we get ahead of the game and do that ourselves. If you do not want it to be IPSA, come up with some other organisation. I would not argue about that. Secondly, although this is a step forward today, there are enough problems within it to indicate that there will still be challenges. It would be useful to find a way of addressing them. One way to address it is to have a system under which we can send advice round to Members on some of the allowances which they might claim in situations totally unrelated to Parliament but which will be affected by signing the declaration.

I have learnt a lot from trying to persuade the House of Commons not to get into the mess it got into. I failed. I say to this House, do not go down any road which does not have at the end an independent system which can very rarely be interfered with. Parliament, of course, is sovereign but, at the end of the day, we need to come up with a system which makes interference so rare that it does not happen and, above all, we need a system which can speak up for us instead of individual Peers being left on the front line having to defend themselves and putting forward an argument about why they thought it was all right, why it was all right before and so on. Please avoid that road.

My Lords, I am a member of the ad hoc group chaired by the noble Lord, Lord Wakeham. Most of the House knows that, as I have the impression that practically all Members of the House have made representations to us either formally or, at least, frequently in the Bishops’ Bar.

I strongly support the Motion to adopt a strict definition for principal residence. It is necessary and overdue. The key elements are quite straightforward: a declaration designating the principal residence outside London with the reasons, publication on the website, documentation such as council tax forms supporting the designation, audit checks and sanctions—I repeat “sanctions”—if that were necessary, as the recently adopted code of conduct extends to financial matters. All those matters are necessary and I believe they are sufficient. The definition and supporting requirements are only the means to an end since we do not get expenses for a principal residence outside London, but only for nights spent in accommodation in London on parliamentary business. The new strict definition of a principal residence outside London provides a defensible basis for establishing entitlement, if any, to an overnight allowance when on parliamentary business in London. The problem has been entitlement, not the rate of allowance itself since the current maximum rate was established independently by the Senior Salaries Review Body and adopted by the House in 2008. That is the independently fixed rate that we are paying now. It is nothing to do with the decision of this House, except that we accepted the recommendation by the Senior Salaries Review Body. I hope that the House will approve the Motion for a strict definition of a principal residence outside London.

My Lords, I shall make three points very briefly. First, I wholeheartedly support the recommendations. In that context, I am speaking as chairman of the Audit Committee. The inadequacies of our current system on principal residences have greatly concerned members of the Audit Committee, and me, in particular. This proposal deals appropriately with those inadequacies and requires auditable evidence. It addresses the aspect of our overall allowances that has caused most criticism and difficulty, and it is right to regard it as the priority. The original SSRB proposal on this aspect had some defects, which I criticised. They were in the detail. I do not need to elaborate on them because the noble Baroness, Lady D’Souza, has already referred to some of them. However, the House Committee has now got this right.

Secondly, it is a pity that the House will not complete its consideration of the rest of the SSRB proposals before the general election, although I understand and sympathise with the reasons. However, we have already accepted the framework, as other noble Lords have pointed out, and I hope we will deal with the rest of the report as quickly as possible in the new Parliament. Here, I follow what was said by the noble Lord, Lord Jay. I said in my evidence to the SSRB and in the debate in the House on 14 December that I did not think that our current system was fit for purpose in some key respects. I was thinking not of principal residences but of other aspects, and therefore I think it is right that we address them as quickly as possible.

Thirdly—the noble Lord, Lord McNally, has already kindly made this point by referring to the speech I made last week and I shall comment on what the noble Lord, Lord Soley, said in this context—there seem to be some abroad and in high places, if rumours are correct, who feel that we should accept all these reports by independent bodies without question. I do not share that view. It is important to look seriously at them and only with good reason change the recommendations on the figures—the salaries and the figures elsewhere. The noble Lord, Lord Williamson, pointed out that that is what we did on the overnight allowance. However, I do not believe that it is right uncritically to accept every recommendation by outside bodies. They do not always get it right. I am talking about the report on the code of conduct that we produced under the noble and right reverend Lord, Lord Eames, and the Leader’s Group. Since we had to work in haste and there were only six of us, our report, which was followed through in most of the framework and a lot of the details, required some consideration by other Members of this House and by a wider group before we came to our final conclusions. The guidance was changed in some respects, and it was changed for the better.

That is what we are doing today with this report. We are accepting the principal recommendation, but not all the detail because some of us have criticisms of it. After all, these outside bodies are not the repository of all wisdom—for example, there are no female members of the SSRB—and it is right that their proposals should be subjected to detailed scrutiny. However, I agree with the noble Lord, Lord Soley, that we should change the figures, in particular, with considerable caution because we are talking about something that affects us.

If I remember correctly, the noble Lord criticised the SSRB’s recommendation that the allowances in the other place be increased by some 40 per cent. I certainly thought that that was a huge mistake and would cause a lot of problems. I think it happened because there was considerable concern that Members’ salaries, bearing in mind their responsibilities and salaries outside, were quite out of date and inadequate, but it was a great mistake to try to deal with that through the allowances. That is where the real criticism was laid. We should not be criticised for looking in some detail at some of the aspects of the SSRB report if we think that it is not right, but we should do so with care and caution and with very good reason. That is what we did recently with the guidance and the code of conduct, and we should look at the remainder of the SSRB proposals in that spirit. I am very happy to accept without reservation the recommendations today.

My Lords, I am a Londoner, and I have had the good fortune, in my many years in this House, of going at night to my own home, to my own bed, to my own books, to my own family, to my own kitchen and to my friends in the neighbourhood in which I live. I am astonished at the self-sacrifice of those who cannot do that because they live outside London and have to spend their week time, when they are working in this House, away from their home, their families and their friends. Any criticism that underestimates the sacrifice that is made by those who live outside London is totally inappropriate. The talk in the press last year about barracks for MPs, and presumably for Peers as well, was outrageous, and I defend to the end the right of non-Londoners to have a decent life when they are here in London on duty.

Having said that, we misunderstand the reaction of the people of this country to what has been happening in Parliament in the past year or so if we think that it relates to only a small number of rogues. It is much more serious than that. I follow my noble friend Lord Soley when I say that people simply do not understand that we of all people should be able to set our own terms and conditions of service without any reference to an independent outside body. Of course there are things in the SSRB report that show a lack of understanding, and I will say nothing that implies that I am not in favour of the work which the committee of the noble Lord, Lord Wakeham, is doing to bring greater realism to those areas of the SSRB report, but in the end people want the House of Commons and this House to say that we are not the masters of our own fate when it comes either to our code of conduct or to what our remuneration or allowances—whatever it is proper to call them here—should be.

The House Committee appointed the SSRB, but it did so not because it was not right that the initiative should come to this House but because it would have been intolerable if we had not gone to an outside body to make recommendations to us. Therefore, I, like my noble friend Lord Soley, think that the principle behind all our interventions on this matter must be that we run this House through this or another outside body—through the parliamentary commissioner, in due course—and it should not be open to us to set our own conditions.

I do not wish anything that I say to be regarded as a criticism of the noble Lord, Lord Wakeham, whom I hold in very high regard, or of various other noble Lords who have taken part in this debate. However, having read paragraph 8 several times, I am quite at a loss to understand how any of your Lordships can think that it provides a definition of a principal residence. Some of your Lordships even think that it provides a strict definition of a principal residence. I am so glad to have repeated assent from the noble Lord, Lord Williamson. If he can show me the words in paragraph 8 that afford him that comfort, I should be very happy to give way.

Paragraph 8 states:

“The required declaration should”—

it does not say “shall”—

“include a statement of where Members spend most of their time when the House is not sitting … and in particular where they spend most nights”.

So there is a choice between where you spend most of your time, asleep or awake, or where you spend most nights. But that does not bring an end to the list of options. Paragraph 8 continues:

“Such a statement may also include any other circumstances which the Member deems relevant to his or her designation”.

That is precisely the situation in which we find ourselves today. The trouble that the noble Baroness, Lady Williams of Crosby, quite properly drew attention to—that is, people putting up the most extraordinary excuses for somewhere being a principal residence—is still accommodated under paragraph 8.

I am hanged if I can see how this document, although I shall vote for it because I am a loyal slave to my party, advances us one centimetre down the road to stricter supervision of our affairs. It is quite beyond me.

My Lords, perhaps I may, as a member of the ad hoc group, attempt to help my noble friend, although I am bound to say that, given how much he has been muttering about the report, I rather doubt that even my powers of persuasion will be adequate for that. This is a stricter definition in that it says that one should look at where one spends most of one’s time, including weekends, when the House is not sitting. Where do noble Lords go at the weekends? Do you stay in your London house or do you go to your principal house? Where are you in the recess?

This House sits at the maximum for about 150 days each year, which leaves about 215 days. I am sure that my noble friend is more than adequate to do the sort of arithmetic that people will generally be looking at. The Leader of the House has said that we should look at this in terms of our own responsibilities and how we calculate where we should be. Yes, it is strict and we can make fun of it, but it is the best that we have had so far. When the noble Lords, Lord Wakeham and Lord Williamson, the noble Baronesses, Lady O’Cathain and Lady Scott, and my noble friend Lord Tomlinson and I considered all these things, it was genuinely the best we could come up with and we have to have some sort of definition.

It has been said by some that we have to accept virtually everything in the SSRB report. Let me be quite clear with your Lordships: in the past, SSRB reports have been totally set on one side by Governments. I led a trade union which regularly put the SSRB reports it received on one side because of the necessity of doing so. It is very good to have the recommendations of an independent body, which is what we have done. But it is now our responsibility to look at those recommendations and to see if they will work in this House, which is why we carried out the biggest consultation exercise, I think, that this House has ever participated in and why we certainly got more active participation from your Lordships in the consultation we undertook.

The House Committee recommendation is the right one for us. I shall explain a little more about why I think that. The terms of reference put to the SSRB demanded that it looked at the clarity and transparency of how we operated. We then turned to the SSRB’s own principles, which your Lordships will find clearly enunciated in the report. The fifth principle says that there should be “unambiguous” rules for those setting out their claims.

The unambiguous rule that we have given is that a house must be outside the Greater London area if it is to be suitable to be adopted as a principal residence. We do not go into what constitutes a reasonable commuting distance for the very reason that many of your Lordships have enunciated. For some people it is reasonable to travel from York; for others it is unreasonable to travel from just a little way outside the Greater London area. We therefore have to adopt something which is clear and unambiguous. What the House Committee is putting forward is closer to the principle enunciated by the SSRB of a clear and unambiguous rule than the SSRB itself went on to adopt. In passing the House Committee report, we stick closer to the principles enunciated by the SSRB.

Points have been made about other criteria—the noble Baroness, Lady D’Souza, made some very good points—but, on the criteria in regard to the residence of other members of the family, I ask those Members who have children of school age where they would want to have their children with them during the week. For most, those responsibilities devolve on the mother rather than the father—not always, but for most. When I came to your Lordships’ House, I had a child of school age and, like most other parents, I would rather be with my child during term time. The criteria that state you must consider where other members of the family are is indirectly discriminatory against those who have children of school age—that is, against women—because it is upon women that those responsibilities mostly tend to devolve.

The third principle which the SSRB said was important relates to where most of your possessions are. We have had some amusing answers from your Lordships on that. However, again, for many women most of their possessions are clothes and personal effects. Like most women, I need most of my clothes and personal effects in London so that I can attend your Lordships’ House, otherwise I would be wearing jeans and gumboots and counting most of my possessions as the flowerpots in my greenhouse. If there had been a sensible woman on the SSRB—

My noble friend asks if there is such a thing. Yes, there are many sensible women—as he knows because he often sits on this Bench with the noble Baroness, Lady Hollis, and me. If there had been a sensible woman sitting on the SSRB, she would have been able to point out the enormous inappropriateness of those criteria. I think I shall leave it at that.

My Lords, I was not going to speak in this debate but, having heard what has just been said, I would like to make two points. First, in the country I wear country clothes; in London I wear clothes appropriate to come to this House. I would not dream of wearing a trouser suit in the country, and that is why I agree with the noble Baroness, Lady Symons. However, speaking as a former lawyer, I cannot see any problem with the definition in paragraph 8, supported as it is by paragraphs 9, 10 and 11. The concerns that this is not clear are seriously overrated.

My Lords, when I first mooted the possibility of living in more than one place, I was given interesting practical advice which adds to the point just made: that is, if you live in two houses you need at least three toothbrushes.

However, I should like to ask a specific question about the definition of “principal residence” Is it assumed that the address given for the principal residence for the purposes of this House will be the same address as the one given for the primary residence for the purposes of capital gains tax with the Inland Revenue? If that is not made clear, there is room for all kinds of worry, concern and innuendo. I hope that that can be clarified.

Where we allocate our principal residence has absolutely nothing to do with capital gains tax. HMRC rules allow us to designate whichever residence we want as our principal residence for capital gains tax. It is a tax avoidance issue; it has always been recognised as such; and I hope that it will continue to be so. You could have a tiny flat in London which cost a lot more than your house in the country and which would probably have more capital gains. You would designate that as your main house for capital gains purposes only. We have already had a ruling from HMRC on this, so the noble Lord should not worry about it.

My Lords, I bumped into a man; we got into a discussion; and he said what many noble Lords have said: “You’re all on the make”. There was nothing that I could say that would persuade him otherwise. I agree with what my noble friends and the noble Baroness, Lady Williams, have said: people in this country are angry, and no amount of persuasion on our part will calm them down unless we change the system dramatically. One has to talk to people; the hatred for politicians has to be felt. No amount of rational argument will make people calm down. We have got to change the system, and I hope that this is the first and important step on the way to doing so. I therefore welcome the report.

I add two points. First, it is absolutely essential, as my noble friend Lord Soley said, that these issues stem from an independent body that will determine and oversee what we are about—I think that that is clear and widely accepted. Only in that way can we demonstrate to the public that it is not us doing it for ourselves, but that independent people are adjudicating on the merits of our entitlements.

My second point has not been mentioned so much, although the Chairman of Committees did so in passing. Although I welcome paragraph 8, there may be some grey areas, and individual circumstances alter. It is important for there to be somewhere we can go, independent of the House, to ask for adjudication, and where we can say, “I have a dilemma; I want to play it absolutely straight. Will you please give me clear advice, guidance and virtual instruction as to what I can claim and what I can’t and how I can do that?” That is probably lacking in what we have so far, and I should like it to be built into the system. Then, we would not need to agonise and talk to colleagues in the Bishops’ Bar, saying, “Look, I’m not sure what to do about this”. It should be clear where we should go, and we should get that advice. Everybody else in the country can go to their employer and ask for adjudication on any of their claims. We are not able to do that so far. I hope that the new system will embody it when we get the full report from the noble Lord, Lord Wakeham. In the mean time, I welcome the report and I hope that we get on with it.

My Lords, I agree with the views expressed by the noble Lord, Lord Soley, and others who have recognised the importance of an independent determination of how the allowances system is to be handled. I would ask the Wakeham committee and the House Committee not just to consider the definitions contained in the report but also to spell out to some extent the processes whereby judgments will be made about whether the rules have been breached. That is an important matter if justice is not only to be done but seen to be done, and to be seen to be done by those to whom the rules apply.

I would not go quite as far as the noble Lord, Lord Gilbert, in saying that paragraph 8 of the report is totally unclear, but, in some respects, it is not clear enough. As somebody who lives 700 miles away from this House on the north coast of Britain and who sometimes travels over a weekend, two nights out of three, on a train, I would find it rather strange to be told that that weekend could not be counted or considered as being in my principal residence. I give another example. This month I have set off for my principal residence on the north coast and found that the snow gates were shut on the main road. Is that weekend to be taken as my having stayed in my principal home, or not?

A wider question arises. Is this description of what one’s principal home is retrospective or prospective? It cannot be of the instant only. Prospective rules are very difficult to conform with on occasion. For example, if my American wife’s relatives were unwell and it was necessary for her to visit them and for me to accompany my wife, and that tipped the balance so that I was out of my principal residence for slightly less than the available 50 per cent of available nights, where would the moral lesson derive? Who is going to decide it? My plea is to be explicit and clear, not so much about the definitions—I realise that in general terms they meet the needs of the situation—but in how to deal with the difficulties that will unquestionably arise from time to time. Process is important.

My Lords, I live on the south-west coast of Ireland and commute weekly to your Lordships' House. I pay my own air fares and always have done, since I joined this House in 1997. One role that I have tried to perform in your Lordships' House is to bring the expectations of the outside world into this Chamber and Parliament itself. That is not always an easy job. I totally identify with the remarks of the noble Baroness, Lady Williams, and with the noble Lord, Lord Strathclyde, when he says that this is an opportunity. The opportunity, as I see it, is to try to align ourselves with the expectations of the outside world and, most particularly, with the expectations of first-time voters. Anyone in your Lordships' House who is interested in the future of participatory democracy has an obligation to take the views of first-time voters very seriously indeed.

The report the week before last from the Hansard Society, Parliament 2020: Visioning the Future Parliament, contains a table. At the bottom of this table, it talks about various issues felt to be important to first-time voters. One of them is transparency and accountability. That is felt to be crucial by first-time voters. It is felt by Peers, MPs and parliamentary officials not worth mentioning. That cannot be right. The most important service this House owes to the country at large is to align our expectations with their expectations. If we do not, then in common with the noble Baroness, Lady Williams, I truly fear for the future of parliamentary democracy.

My Lords, we have had a serious and considered debate today, and I am grateful to all Members of this House who have taken part. I know that these are important issues for the Members of the House, important to the House itself and important beyond the House to Parliament, politics and the public. We are addressing today what the House Committee’s report, referred to in the Motion before us, calls a “main weakness” in the current scheme of financial support for Members of your Lordships' House—that is, the definition, designation and declaration of the main residence of Members of this House claiming overnight allowances. Not only do we not have a definition that is clear and precise, at present we have no definition at all, as the noble Lord, Lord McNally, pointed out. He was also right to say that we cannot and must not act retrospectively. That is in part an answer to the noble Lord, Lord Maclennan of Rogart, who was right to say that process is important. We must understand the process and have confidence in it. If the House adopts the proposal today and the House Committee agrees on the forms to be sent out, when Members see the forms they will have more confidence in the process.

Today we are replacing a lack of clarity with clarity, ambiguousness with unambiguousness and no definition not just with a definition but with a good, robust definition, despite what my noble friend says. I was going to answer my noble friend Lord Gilbert, who I think is my fellow slave to party, but he was dealt with very well by my noble friend Lady Symons—a very sensible woman, if I may say so, who was endorsed by the equally sensible noble and learned Baroness, Lady Butler-Sloss.

The discussion of these matters in today’s debate has been a helpful consideration of the issues, but I am glad that at the beginning the noble Lord, Lord Strathclyde, spoke of the cross-party agreement that exists about them, not just between our parties but with the noble Lord, Lord McNally, and the noble Baroness, Lady D’Souza. We often speak of differences between this our House and the other place, differences that we celebrate. The cross-party working and agreement that we have on these issues is a matter for celebration.

The publication of our expenses on a quarterly basis, in answer to the noble Lord, Lord Strathclyde, is a good first step on the road to a rolling publication, but that is a matter for another day which must be discussed at some future meeting of the House Committee. I say “future”, though, because we have to get the next step going—that is, quarterly publication—before we should start talking about a rolling programme.

The noble Baroness, Lady D’Souza, reminded us of the need for personal responsibility and the fact that rules are not enough. She is right. I am also grateful to her for drawing our attention to the importance of regular audit checks, both internally and by the National Audit Office. That is an important innovation.

The noble Baroness, Lady Williams of Crosby, and other noble Lords made important points about our relationship with the public, and she spoke specifically about the culture of entitlement. I too am concerned about such a culture, and that is why I believe the reports of the SSRB and the Wakeham group are so important to improve our system, to increase our responsibility and to restore trust. My noble friend Lord Soley is right when he says that the system that we have is our responsibility; we cannot blame the press for everything, and it is our responsibility to put this right.

The noble Baroness, Lady Williams, spoke of her fears about the mood of our fellow citizens. The fears and concerns that she expresses are chilling but realistic—democracy and our democratic system have undoubtedly been damaged by what has happened in Parliament over the past couple of years. Today’s decision will be just a step on the road towards restoring public confidence. I agree with my noble friend Lord Puttnam that we have to align ourselves with public opinion and align our expectations with theirs.

The noble Baroness raised the quasi-definition of visiting your main residence only once a month. I accept the fact that this was the responsibility of the House Committee—we accept political responsibility for that—but in some ways we were misrepresented by the press. Once a month was always in the context of residing or staying, rather than, say, a visit to your greenhouse for a day, and it was coupled with saying that we should be there for Recesses too. I want to put that clearly on the record.

In many ways, my noble friend Lady Symons also responded to the point made by the noble Lord, Lord McNally, about the SSRB’s concern about the definition of “reasonable commuting distance”. I believe that we have to be absolutely clear in our definitions to ensure that we can exert our own responsibility for our own security, but also to ensure that the public can have a clear understanding about what we should and should not do. That is why the definition we have before us today is the right one. I draw your Lordships’ attention to the fifth principle mentioned by the SSRB in its report, which is,

“to minimise the scope for abuse of allowances and for manipulation, by drawing up unambiguous rules for expenses claims”.

I believe that the definitions which we have today are unambiguous.

My noble friends Lord Soley, Lord McIntosh and Lord Dubs alerted us to the problems of self-regulation. That is a subject for another day, as I mentioned in my earlier speech, but it is the Government’s policy for this House to move from self-regulation to independent regulation. That is their ambition and, as I say, we will discuss that on other occasions. My noble friend Lord Soley also mentioned the new publication arrangements, which he feared would open the door to FOI queries. I look forward to receiving a letter from my noble friend, of course, but an inevitable part of these proposals—one which I welcome—is to put more information into the public domain. It is better and more open to do that proactively rather than await an FOI request. In many ways we are therefore being proactive rather than reactive, which is a good thing. The noble Lord, Lord Sutherland, asked about CGT and I am grateful for the intervention from the noble Baroness, Lady O’Cathain. We will await the advice from the ad hoc group on that matter, because it has clearly not been addressed by the House Committee to date.

In conclusion, I echo and strongly support the wise words of the noble Lord the Chairman of Committees in opening today’s debate. He said that with the introduction of proper definitions, better enforcement and a greater degree of transparency, he hoped—as I, too, hope—that as a House we could, now and in the coming months, move on from what has been a difficult period for the House. We know that there is more work for the House to do, and I am grateful for all the work undertaken by the noble Lord, Lord Wakeham, and his colleagues.

We have the new code of conduct and the new guidance to the code and, with the two changes that we are considering today, we have made significant moves forward. However, today’s proposals, important as they are, form only a part of the work which this House charged the ad hoc group under the noble Lord, Lord Wakeham, to carry out following the report from the SSRB. We welcomed that report and its recommendations, but we should heed the wise words of the noble Lord, Lord MacGregor, and of others. Those were recommendations; we will follow them in so far as we believe that it is right to do so; but they were not a tablet of stone.

We would certainly like to have concluded the work on the SSRB and the ad hoc group by now, but it has not been possible to do so. There is still work to be done on these issues. The crucial thing is to get it right. We need a system that is fair, transparent and reasonable. We need a report that commands maximum support inside this House, but also maximum support outside it. In advance of that, I believe that we are today taking a very good and clear step forward, one which offers real benefits to all involved and one which I commend to the House. The noble Lord, Lord Williamson, reminded us of the need for a strict, robust definition; I think that is what the noble Lord, Lord Jay, also endorsed. I believe that is what we have before us today, and I urge the House to support the Motion from the House Committee.

Motion agreed.

Norwich and Norfolk (Structural Changes) Order 2010

Motion to Approve

Moved By

That the draft order laid before the House on 10 February be approved.

Relevant Documents: 11th Report from the Joint Committee on Statutory Instruments and 12th Report from the Merits Committee.

My Lords, today we are considering the draft order which brings into effect proposals for a unitary council for the city of Norwich. With it, we will consider the draft order bringing into effect a unitary council for the city of Exeter. I recognise that there is a great deal of strong feeling on all sides of the House on the decisions we have taken in Devon and Norfolk. At the outset, I want to say that we recognise that these are controversial decisions. They are not matters that we have treated lightly. However, we believe that these decisions have been taken in the best interests of the people of Devon and Norfolk.

It may help the House, particularly in light of the amendments that have been put down by the noble Lord, Lord Tope, and the noble and learned Baroness, Lady Butler-Sloss, if I use my opening comments to say something about the decision-making process which has led to our proposing these orders, not least to dispel some of the myths surrounding these decisions. Before I turn to any consideration of process, it is important to recall the substance of the issues before us this afternoon. In short, the choice before your Lordships’ House is whether the cities of Exeter and Norwich should have new unitary councils—whether the people of those cities should have the unitary authorities which their democratically accountable councils have proposed, and for which there is genuine local appetite. In the case of Exeter, the unitary proposal has cross-party support across the council. In Norwich, the proposal is supported by Liberal Democrats, Labour Party members and Green Party members.

The benefits of unitary city councils are widely recognised and have been proven over time. Such councils reinforce the city’s distinctive identity and sense of place. They recognise that cities are the driver for wider economic growth and provide the clear, simple leadership needed. They also enable local services to be targeted and tailored to the particular challenges and issues that cities face. Moreover, unitary city councils will restore these cities to the position that existed before the 1974 reforms took away the system of local self-government which they had enjoyed for centuries. It is a myth to suggest, as some are, that these unitary proposals are ripping the heart out of the traditional county.

I turn now to the issues of process—and these, I accept, are not unimportant. I will first sketch out something of the history, which shows just how long these processes have been in train, and just how carefully and fully the options and choices have been considered by my honourable and right honourable friends over the years. The story originates back in 2006 when the Government issued an invitation to councils in England. Exeter and Norwich councils both put forward proposals for unitary local government. In February 2008, the Secretary of State sought the advice of the independent Boundary Committee, asking for alternative proposals covering Exeter and Devon and Norwich and Norfolk. She considered that the original ones did not meet the criteria in the invitation. The Boundary Committee undertook its own consultation, generating 20,000 responses, and submitted its advice in December 2009. Once the Government received the Boundary Committee’s advice, we allowed a further six-week period for representations, receiving more than 2,800, including meetings with many of the affected councils. It would be fair to say that the stakeholders and public in these areas have been consulted more than adequately on these proposals; that the process is anything but rushed; and that a resolution to these issues is now what all concerned crave.

Central to our decisions on the proposals was an assessment against the five criteria of affordability; whether there is a broad cross-section of support; strategic leadership; neighbourhood empowerment; and value-for-money services. Our assessment was that, contrary to the Boundary Committee’s views, the alternative proposals for single county unitaries in Devon and Norfolk did not meet all the criteria, in particular the “broad cross-section of support” criterion. It was clear that not one of the existing principal councils in the areas supported the idea of a unitary county council. Having considered the original proposals for Exeter and Norwich afresh against the criteria, our assessment was the same as that of the Secretary of State in December 2007. To a limited extent, the proposals still do not meet all the criteria.

In the case of Exeter, we judged that it did not meet the affordability criterion to a limited degree. The payback period would be a little longer than five years—the city council told us perhaps six. But without doubt, savings would exceed costs over a few years. In the case of Norwich, we judged that it too did not meet the affordability criterion to a limited degree. The payback period would similarly be a little longer. We also judged that the value for money on services criterion was not met.

Having made this assessment, we considered the merits of each proposal, giving careful consideration to the circumstances in which there were,

“compelling reasons to depart from the presumption that proposals that meet the criteria are implemented, and those that do not are not implemented”.

It has been suggested—not least by the Merits Committee—that this wider consideration of the merits of each proposal was somehow a new or novel procedure. I can categorically tell noble Lords that it is not. In December 2007, the then Secretary of State approached her statutory decisions in the same way. She recognised that it was in principle open to her to conclude that the criteria were not met, but that there was none the less a good reason to implement the proposal, or conversely that the criteria were met but that the proposal should not be implemented. In the event she decided that, having regard to all the circumstances then prevailing, it was appropriate to implement proposals that met the criteria, and not to implement proposals that did not meet the criteria.

In contrast, we concluded—when looking at the merits of the proposals in the round and considering today’s economic circumstances—that there were compelling reasons why these unitary proposals, despite not meeting all five criteria, should none the less be implemented. This was not least because when the Total Place approach is factored into consideration, the outcomes for services in Norwich generally would be as good, if not better, than the outcomes envisaged by the “value for money services” criterion. For both Norwich and Exeter, we judge that the risks of a slightly longer payback period are outweighed by the benefits for the local economy.

The Total Place approach is transforming the possibilities for local public service delivery. Total Place takes a “whole area” approach to delivering public services in a geographical location, looking at how to deliver better services at less cost, through effective collaboration between local organisations, led by local authorities. In the case of Exeter and Devon, and Norwich and Norfolk, it means that there can be the best of both worlds. There will be one local government leader able to provide strong strategic leadership for the city; and the more rural remaining two-tier area stands to have a stronger voice through a more focused county council, working closely with the rural districts. Together, in a partnership of equals, the city and county councils can work with other service providers to shape and jointly deliver high-quality services across the whole area, with the economies that brings, but which also meet the diverse needs of urban and rural communities.

I am sure noble Lords here today will recognise that Exeter and Norwich are the engines of economic activity and potential in their sub-regions. Their pull already draws in investors, businesses, employers and wealth. There are numerous examples of how these cities have been successful in attracting businesses—for example, the Met Office or EDF customer services relocating to Exeter, or the fact that Norwich ranks as a top 10 UK retail centre and one of the top 10 cities in the UK for employment in knowledge-intensive businesses. I recognise that much of this activity happens outside the cities’ boundaries, but most businesses do not choose to locate in a surrounding district council area just because it happens to be a particular district council—for example, locating in the district of Broadland in Norfolk or East Devon in Devon—but choose that location because they want to locate in and around the cities of Exeter or Norwich.

The strategic leadership that unitary councils for these cities will deliver means these cities’ “brands” can grow, and the gain to Exeter or Norwich will also be Devon’s or Norfolk’s because these benefits do not recognise administrative boundaries; they will spill over into the wider sub-region. That is why I can say without hesitation that we are convinced that the best outcome for the people of Devon and Norfolk is a structure which would see an urban-focused unitary council for the cities together with a two-tier local government for the rural surround.

I should like to turn briefly to the report that has been published on these orders by the Merits Committee. It raised a number of points which I hope I have already addressed, but there are a few further issues that I think are worth responding to here. The committee questions the extent to which interested parties should have been given the chance to comment on and evaluate the “compelling reasons” which informed our decisions to implement unitary councils for Exeter and Norwich. Representations were received from both affected councils and others, particularly orally at meetings, and covered a wide range of matters. We received representations arguing that the proposals should not be implemented, not because they did not meet the criteria but because, for example, the present form of governance was better than a unitary structure, or that even if unitary structures had merit, the change was not worth the candle. We also received representations arguing that unitary proposals which did not meet the criteria should none the less be implemented because the benefits they would bring would outweigh the downside of their not meeting the criteria. So clearly, those making these representations to us felt able to set out what for them were compelling reasons over and above the criteria why a proposal should or should not be implemented.

The committee also questioned the extent to which these unitary proposals, which rely on collaborative working, are now feasible. We are quite clear that there are real benefits to the residents of Exeter and Norwich arising from unitary status, as well as real advantages to all the residents of Devon and Norfolk from their councils working together with the new unitary councils, as well as for Torbay and Plymouth in Devon, to deliver real improvements for all. The Government’s expectation and hope is that the elected representatives will recognise these opportunities, put aside their differences and work together in the best interests of their residents.

I want also to respond to the points raised in the Joint Committee on Statutory Instruments’ report on the orders themselves and explain a little about how they work. The JCSI’s most serious concern is that it believes that,

“there is a doubt as to whether the orders, if they are approved and made, would be lawfully made”.

The reason for this doubt, in the JCSI’s view, is that if the High Court found for the claimants in the judicial review proceedings currently being brought by Devon and Norfolk county councils against these decisions, this might mean that the orders, after they had been made, would be rendered unlawful. The inference of the JCSI’s reasoning seems to be that we should await the outcome of the court proceedings before completing parliamentary consideration of the orders. We do not accept these concerns. This confuses parliamentary accountability with issues of legality and might mean that Parliament could not decide on an issue until court proceedings had been resolved.

We do not accept that the legislative process and business of government should be halted simply because judicial proceedings have been commenced, nor do we accept that it would be right for this House to base a decision on its assessment and judgment of the outcome of court proceedings. That would not seem to be consistent with the concept of a separation of powers between the legislature and the judiciary. I am sure that if noble Lords were to consider the full implications of the JCSI’s position, they would share the Government’s concerns. The JCSI also drew attention to the orders on the grounds of the unexpected use of powers, drafting that requires elucidation, and failure to accord with proper legislative practice. Officials in my department are confident that they have followed the proper drafting practice and that the instruments achieve their objectives.

We have prepared these orders following consultation with the councils concerned so that the arrangements we are setting up are those which local people believe are best for them. The orders provide that from 1 April 2011, Exeter and Norwich will become the sole principal councils for the cities, having both district and county functions. This will be a wholly new start. There will be a refreshed senior management team and, once elections are held in 2011, potentially new members. The orders provide for the establishment of an implementation executive to lead preparations for both new councils. These executives will be led by the leaders of the current city councils, with membership drawn not only from the city councils but also from those county councillors who represent areas in the cities. The orders also place a duty on all councils to co-operate during the transition.

My final point picks up on the JCSI’s concern that the provisions seeking to cancel the thirds elections due in both Norwich and Exeter in 2010 are an,

“unexpected use of the powers”,

in the Local Government and Public Involvement in Health Act 2007. We gave all the affected councils in Norfolk and Devon the opportunity to comment on the proposed transitional arrangements for creating new unitary councils. That included the option of holding elections to any new unitary council in either 2010 or 2011. Since all the local authorities in Devon and Norfolk expressed the clear and reasoned view that any elections should take place in 2011, the orders seek to do that. Consequently, the orders provide for the cancellation of elections for one-third of the members in Exeter and Norwich due to be held in 2010. In truth, the effect is that those elections are postponed to 2011. That is necessary to maintain the integrity of the local democratic process as, if elections in 2010 were to go ahead, there would be questions about their purpose since those elected would serve only a year’s term. Noble Lords will note that the provisions cancelling elections are similar to those made in previous structural change orders, which hindsight has shown to have worked effectively.

I want to say something briefly about the direction that the Secretary of State gave to the department’s accounting officer on 10 February. It is a myth that in some way the Secretary of State and officials are at loggerheads—nothing could be further from the truth. The process of seeking a direction is a standard part of the administrative processes of government. It was proper for the Permanent Secretary, as accounting officer for the department, to draw attention to the fact that Ministers had not chosen the option which appeared to deliver the best value for money. However, it was equally proper for the Secretary of State to set out Ministers’ reasons for their decisions, and to direct officials to implement those decisions.

The noble Lord said that the seeking of a political direction by the Permanent Secretary was a common procedure. Can he confirm how many times it has been used before?

I do not think I used the term “common procedure”; I said that it was a standard part of the administrative processes of government.

I can help the noble Lord with an answer. It is actually the first time that it has ever been asked for in the history of the DCLG.

The noble Lord may well be right; certainly it is a standard part of the processes of government and has been asked for in other departments over the years. The direction found its way into the public domain because we put it there. It would have done so in any event because it is sent to the Comptroller and Auditor-General, who would pass it on to the Public Accounts Committee.

The Secretary of State gave careful consideration to the Permanent Secretary’s advice before taking decisions on all the proposals. That recognised that accounting officers have certain responsibilities and that Ministers’ responsibilities range more widely. I add that the Permanent Secretary makes it clear in his letter that those ministerial reasons are wholly legitimate and proper.

We have taken our decisions by looking at and weighing the substance of the complex issues before us, seeking to balance a number of factors in each case. These are not simple issues. It is the task of government to look at the matters carefully, to balance the competing arguments, to assess the evidence and the differing claims, and finally to reach a balanced judgment as to what way forward is best for the people of the cities and counties involved. We recognise that the decisions that we have taken are controversial but, after careful consideration of all the issues, we are confident that they are in the best interests of the people of Devon and Norfolk. If we had fought shy of the decisions because of the controversy associated with them, we would be ill serving the people of Exeter and Norwich, and of Devon and Norfolk. The Government have faced up to their responsibilities.

I would be most grateful if the Minister would answer one question. I declare an interest as a former Norfolk Member of Parliament who represented many suburbs of Norwich. In his evidence to the Merits Committee—item 20 on page 72—a former and most distinguished leader of Norfolk County Council stated:

“Since 2007 I have only been asked to give my views on all-unitary arrangements, but to give them still, on the basis of the agreed criteria. I was therefore completely shocked to hear that, in making his decision for Norfolk, the Secretary of State concurs that these criteria are still not met, but that ‘for compelling reasons’ he had decided to depart from the rationale and approach for decision-making I was asked to give my views on, and create a unitary Norwich on its current boundaries anyway. The Secretary of State did not communicate this changed approach in advance nor consult on it ... This is surely unlawful”.

What are the Minister's views on that?

That was a long question that I thought the noble Lord would ask later in the debate. The issue of compelling reasons is as I outlined in my introduction. It was always clear in 2009 that, although the then Secretary of State decided to proceed only with proposals that met the criteria, he recognised that that would not necessarily always be the case, and that there should be scope when criteria were not met still to support and bring forward proposals if there were compelling reasons for them; and that when criteria were met, that did not necessarily in itself mean that the proposals should be brought forward if there were at the time compelling reasons for them not to be.

I outlined the two areas of compelling reasons that caused us to proceed with our decisions, which concerned the benefits arising from Total Place and the supreme importance of generating growth and making sure that we do everything we can to sustain growth in our country, particularly at the moment, given where we are on the issue of the deficit. That seems entirely appropriate. To suggest that somehow we should only ever stick to the criteria is not consistent with what has happened in the past. I beg to move.

Amendment to the Motion

Moved by

To leave out from “that” to the end and insert “this House declines to approve the draft Order laid before the House on 10 February because it does not comply with Her Majesty’s Government’s published criteria with respect to affordability of the future structure, without providing more evidence on whether the course proposed is likely to achieve its declared policy objective”.

My Lords, I will begin by declaring indirect interests. I was born in Devon, albeit within what are now the boundaries of the Plymouth unitary authority. My father's family has been Devon born and bred for as many centuries as we have been able to trace. Secondly, I have been a London borough councillor for the past 36 years. London boroughs have been unitary authorities for the past 45 years. Therefore, I need no convincing of the advantages of unitary local government. I start from a point of understanding of, and sympathy for, those in Exeter and Norwich, including some in my own party, who are keen to see these orders passed tonight. Indeed, I suspect that if I were a city councillor in Norwich or Essex, I, too, might be keen. Rightly or wrongly, councillors there see it as their last chance to gain unitary status for their cities. However, it should not be unitary status at any cost. What is before us tonight is all that is on offer at this time, and it is not good enough. The boundaries of the two proposed unitary authorities are wrong, and the timing is wrong—just as we head into what we all know will be the most challenging financial climate that local government has ever known.

Even more importantly, we have a responsibility to consider the effects of the draft orders on the wider counties of Devon and Norfolk—not just on the county councils, but on the citizens, businesses and other statutory and community organisations that represent them. Others with greater personal knowledge and experience of that than I have will speak in this debate, so, in the interests of brevity, I shall leave it to them to spell out the concerns of the people of Norfolk and Devon, and indeed of Norwich and Exeter. Instead, I shall concentrate, as did the Minister to a large extent, on the process that has led us to this point. It is a process that seems to unite everyone, regardless of their view about the outcome, in condemning the most appalling mishandling by this Government.

Although the Government will be accused of rushing through these orders tonight within days of the dissolution of Parliament, I agree with the Minister that this has in fact been going on and on for more than three years, characterised by much legal dispute and the expenditure of huge sums of public money. As the Minister said, in 2006 the Government invited local authorities to submit proposals for unitary status. They stated that all such proposals would have to meet each of five strict criteria, which the Minister listed: affordability, a broad cross-section of support, strategic leadership, neighbourhood empowerment and value-for-money services. So far as I am aware, every unitary authority established since that time has been judged by the Government to meet each of those five criteria. Can the Minister tell us of any that did not meet any of those criteria at the time they were proposed?

The Minister has outlined the sad history since that time and I shall not go over it again in any detail. But I want to say, most importantly, that in December 2007 the then Secretary of State announced that she did not think that either Exeter’s or Norwich’s bid for unitary status would meet the Government’s criteria, particularly on financial grounds. The Minister has already told us that. The Secretary of State therefore referred both bids to the Boundary Committee for advice.

For reasons probably known to many here, it took two years for that advice to be deliverable, but in December last year the Boundary Committee for England published its proposals. It recommended single county-wide unitary councils for Devon and Norfolk. It also made proposals for Suffolk, which are not the subject for debate tonight. Most significantly for tonight’s debate, it recommended against separate unitary councils for Norwich and Exeter on the grounds that they would not meet the Government’s affordability criteria.

In February, the Government announced that they rejected all the Boundary Committee’s recommendations and proposed instead to create unitary authorities for the cities of Exeter and Norwich, even though they agreed with the Boundary Committee that such proposals would not meet their own affordability criteria. The Permanent Secretary at the Department for Communities and Local Government, in his role as accounting officer, was so concerned about this that he wrote to the Secretary of State seeking a political direction because he did not believe that the proposals represented value for money. His letter is published in full on pages 29 and 30 of the Merits Committee report. We have just had an exchange on this and the Government have said, rightly, that his action in doing so was “perfectly proper” as accounting officer—no one questions that—but that Ministers had a wider role. Indeed they do. Therefore, while his actions were certainly perfectly proper, they were also unprecedented.

As the noble Lord on the Opposition Front Bench asked in his interjection, has there been any other occasion when that has happened? Now that he has notice of the question, can the Minister say whether there has been any other occasion, either within the Department for Communities and Local Government or any of its predecessor departments, when the accounting officer has felt the need to seek a political direction? I ask the question, as often is the case, in the pretty certain knowledge that the answer is no and that this is indeed unprecedented. Therefore, it may be proper, and it may be, as the Minister understandably sought to downplay, a routine part of government, but this is the first time that it has occurred. It is unprecedented and something that we should all take very seriously.

Next I turn to the report of the Merits of Statutory Instruments Committee, to which reference has also been made. It examined the draft orders in some detail. It sought further information from the department. I am sure that the report will be much quoted in tonight’s debate, so I shall confine myself to quoting the conclusion. In paragraph 35, the Merits Committee concludes that,

“it has insufficient information on which to be able to determine whether these Orders are likely to implement their policy objective … they may imperfectly achieve their policy objective”.

Faced with that conclusion, we might reasonably expect the Minister to give us the evidence which the DCLG failed to give to the Merits Committee’s satisfaction, on which it based its belief that there are compelling reasons. The Minister has repeated the Government’s belief, but has again failed to give hard, factual evidence to support that belief. Tonight we are asked to accept that this is an article of faith from the Government.

Devon and Norfolk county councils are challenging these decisions in the High Court on 28 and 29 April. In his letter to the Secretary of State, the Permanent Secretary said that he had “clear legal advice”—I suggest that clear legal advice is a little unusual in itself—that the risk of being successfully challenged in judicial review hearings is “very high”. It is not 50:50 or 60:40, but very high.

Last Thursday, the Joint Committee on Statutory Instruments published its report on these draft orders. It concluded that, if approved and made,

“there will be a doubt as to whether they would be lawfully made; that in one respect in particular they would represent an unexpected use of the power conferred by the enabling Act; that in one respect their purport requires elucidation; and that in one respect they fail to accord with proper legislative practice”.

The “unexpected use of the power conferred by the enabling Act”, to which the Joint Committee refers, is the cancelling of the city council elections due to be held on 6 May. As the committee points out:

“If the court decides that the decisions to implement the unitary proposals were flawed”—

the Government has “clear legal advice” that they are—

“it will be too late to restore the elections which will have been cancelled”.

So tonight we are asked to pass orders which the Government accept do not meet their own strict criteria on affordability; which the accounting officer believes do not represent value for money; which the Merits Committee, in its measured tones, believes may imperfectly achieve their policy objective; which the department has “clear legal advice” are of doubtful legality; the Joint Committee on Statutory Instruments has drawn to the “special attention” of each House; and which may be unlawful. We will also be cancelling elections 45 days before they are due to take place, with no time to restore them if that proves to have been unlawful.

I know that this House is always reluctant to support fatal Motions, but if ever there was a strong case for doing so, surely this must be it. Surely, we have a duty to all these bodies to say, “We’ve heard what you say and we will act on it”. Faced with all this evidence and more, can we simply say, “Oh dear, we really do regret that, but there is nothing we can do”? If ever there was a strong case to vote against orders, this must be it.

If these orders are passed tonight, it may be that they will be overturned in the courts at the end of next month. It may be that another Government will be elected the following month. It may be that that new Government will give high priority in their first 100 days to reversing these orders before implementation. Any or all of those things may happen, but they may not.

The one certainty of passing these orders tonight is that the city council elections will be cancelled only 45 days before they are due to be held. We will be denying the citizens of Exeter and Norwich their democratic right to express their view in an election. That is a very serious step to take at such short notice and one that your Lordships should consider very carefully before taking. Tonight we can simply “regret” all of this, but let it happen anyway; or we can say, “This is wrong!” and stop it happening. The decision is ours. I beg to move.

Amendment to the Motion

Moved by

At end to insert “but this House regrets that Her Majesty’s Government have laid before Parliament the draft Order, which does not comply with the Government’s published criteria with respect to affordability of the future structure, without providing more evidence on whether the course proposed is likely to achieve its declared policy objective; and calls on Her Majesty’s Government not to proceed with the draft Order before conducting further consultation with the residents of Norwich and Norfolk”.

My Lords, I shall speak to the amendments I have tabled. I shall, in due course, ask the House to support me if the amendments moved by the noble Lord, Lord Tope, do not meet with the approval of the House. I feel the wording of my amendments perhaps more appropriately reflects the spirit of this House than the fatal amendments about which you have just heard, and I propose therefore to abstain on the amendments tabled by noble Lord, Lord Tope. I hope very much that the House will support me in due course on the amendments to which I am about to speak.

I declare an interest as a member of the Merits Committee, but I made a point of not attending on the occasion when it considered these two orders in order to feel that I can speak entirely freely. I live 10 miles outside Exeter and my parents and grandparents and all my family on my maternal and paternal sides come from Norwich, so I know and love both cities. However I feel strongly that it is the duty of a Cross-Bencher, as a Peer independent of all political parties, to speak out if the Government of the day, of whichever political persuasion, seek to pass legislation that is seriously flawed, and that is what I propose to do today, even though it is unusual for a Cross-Bencher to do so.

Noble Lords have already heard a great deal from the noble Lord, Lord Tope, about the background to this, the issues that arise on the orders and the reasons why they are objectionable. These two orders are different from earlier unitary authority orders that came before this House. Indeed, they must be unique in the way in which the government department is presenting them. They therefore require the special attention of this House, as the noble Lord, Lord Tope, said. The Merits Committee pointed out:

“Both these proposals differ geographically from the seven previous orders, because they intend to convert only the central part of the defined area to unitary status, leaving it surrounded by a ‘doughnut’—

a lovely word—and that,

“geography is important to the Impact Assessment”,

and therefore to the cost implications.

I shall concentrate upon the other points made in the report by the Merits Committee and then summarise the points upon which I rely in support of the two amendments in my name. It is inevitable that I will tread a little over the ground already trodden by the noble Lord, Lord Tope, and I hope the House will forgive me. The noble Lord, Lord Tope, has already set out the conclusion of the Merits Committee. In coming to that conclusion, the committee received a considerable volume of written evidence that it considered and dissected. It raised questions on the unsatisfactory nature of draft orders. The main points made by the committee were that the proposed implementation of bids did not conform to all five criteria and that the introduction of additional reasons for selection would therefore appear to be contrary to previous practice—it had not happened before these draft orders.

The Merits Committee stated that it would have expected the department to set out in more detail the basis for setting aside the Boundary Committee’s recommendation. It pointed out the lack of evidence for the two compelling reasons, and when it asked the DCLG, as it tends to do, how the change of status was likely to overcome the cost disadvantages in this area, the department simply repeated the Written Statement and did not estimate any cost savings or efficiency gains.

The Merits Committee commented that it would be helpful to the House if the DCLG made a much more explicit analysis, which I do not believe we have yet received, of how much economic growth each city, as distinct from each county, is expected to generate as a result of becoming a unitary authority. As I understand it, the likely growth is expected to be outside the boundaries of each city. This is true particularly of Exeter; Cranbrook is a new village that is about to be built, and there is to be a Skypark and various other things that will grow very dramatically but not within the city boundary.

The Merits Committee asked why the department relied on the Total Place approach as a compelling reason. It suggested that the House might wish to seek a clearer explanation from the Minister as to why this approach was considered a compelling reason for granting the city unitary-authority status. I may not have listened as carefully as I hope I did, but I do not think that I got a very good answer on that. The committee pointed out the lack of consultation—there has been a great deal of consultation, but not on the two so-called compelling reasons—and, in view of the very strong opinions for and against the Government’s proposals, questioned the extent to which these unitary proposals, which rely on collaborative working, were now feasible. The committee made a very practical point here.

The Merits Committee also supported the point made by the Permanent Secretary in his letter that,

“as yet there is no clear evidence of the costs and benefits that may arise”.

It suggested that the choice between preserving the status quo and creating new unitary authorities,

“is one of the key issues on which the House may wish to take a view: which course of action best represents ‘the public interest’ and which section of the public's interests should take priority”.

The Merits Committee also suggested:

“The House may wish to consider whether or not sufficient evidence that the course proposed in the Orders will solve the problems identified without creating unacceptable consequences elsewhere, has been provided”.

I suggest that it certainly has not been. The committee questioned whether there had been a consistent decision-making process, and asked whether it was right to depart from the published procedure during the same tranche of applications, particularly without further consultation. Were the compelling reasons persuasive or was sufficient evidence published elsewhere to reassure the House? The answer is clearly no. The committee also questioned the timing of these orders when there are to be council elections, about which the noble Lord, Lord Tope, has already spoken.

I will now summarise the points that demonstrate clearly that these orders should not be supported by this House without further consultation and without the Government reconsidering them much further. First, neither Norwich nor Exeter meets the Government’s own criteria of affordability and, in the case of Norwich, value for money. Secondly, in December 2007, the Secretary of State rejected the Norwich and Exeter proposals. Thirdly, the Secretary of State asked the Boundary Committee for its advice, and on 7 December 2009 it advised that the Norwich and Exeter proposals should not be implemented as the Secretary of State’s previous concerns had not been displaced by any evidence received by the committee during its review. Fourthly, on 8 February, the Secretary of State received a letter from the Permanent Secretary, to which the noble Lord, Lord Tope, has referred, which said:

“The approach you are currently proposing makes it difficult for me to meet the standards expected of me as Accounting Officer”.

Those are extremely strong words. On 10 February of this year, the Secretary of State accepted that the criteria were not met, but found compelling reasons without any supporting evidence and without the consultation on the compelling reasons.

The Merits Committee reported that the orders may imperfectly achieve the policy objective. The cost implications have not been properly considered, nor the impact on truncating each county and the effect on some district councils, nor the consideration of unforeseen consequences. Perhaps most damning is the report of the Joint Committee on Statutory Instruments as recently as last week. It drew the special attention of both Houses to each of the draft orders on the grounds that if they are approved and made, there will be a doubt as to whether they will be lawfully made.

The JCSI went on to say that,

“the Houses should be in no doubt as to the proposition which the Secretary of State puts to them. It is that they should approve legislation implementing decisions which the Secretary of State himself is advised may well be successfully challenged”.

That seems to me to be the most extraordinary situation which this House faces today.

Will the Minister explain why this legislation has to be pushed forward at this time? What is the urgency for it? Why do we need it now, particularly in the light of the warning of the Permanent Secretary that the judicial review may well be successful—it has a high chance of success—the issue of lawfulness as raised by the report of the Joint Committee, and the impact of the cancellation of the May local elections? I am saddened that the Government do not seem to think that these are matters which weigh with them. I would urge the Minister again to consider withdrawing these orders and to reconsider the overall plans for the counties of Norfolk and Devon, and the cities of Norwich and Exeter.

My Lords, I want to speak only about the Norwich and Norfolk order. I declare an interest as a former Member of Parliament for south Norfolk for 27 years. I live in the county and I am much involved in many organisations in the county, a lot of which are completely non-political. I have received many representations on this issue. Indeed, I was speaking as president of the Norfolk Association of Village Halls this weekend about this very subject, because there was great concern about the impact for parish and district councils.

The Minister is very conscientious, which I admire. But if he had come to Norfolk and delivered the speech that he has delivered today, he would have been told that he was living in a different world from that in which they live—a world in which perhaps, as used to be said of former Labour Governments, Whitehall knows best. Much of what he said completely flies in the face of the facts. I believe that he would be howled down and greeted with disbelief. I think that he concluded by saying that this was the best of both worlds for Norfolk. Very few people in Norfolk believe that. In fact, they believe quite the opposite.

I do not regard this as simply a local matter. The Merits Committee report demonstrates that this should be a matter of great concern to this House in terms of government processes and the huge inadequacies in these two cases. I will not repeat all the different points, which I had listed. But the noble and learned Baroness, Lady Butler-Sloss, did brilliantly in her synopsis of all the key issues where I think that the Minister is plain wrong.

Initially, I want to make a point about the letter of the Permanent Secretary for the Department for Communities and Local Government. I was in the Government for 15 years and I was in charge of departments. I do not recall ever seeing a letter like that. Of course, what the Minister said is strictly accurate in terms of the constitution, but he did not say how often a letter like that is put forward, which is crucial. The point made by the noble and learned Baroness, Lady Butler-Sloss, about the position of the Permanent Secretary as accounting officer is very real. If this order goes through, he will have a difficult task in front of the Public Accounts Committee and his way out will be to say, “I warned the Minister”, which is why he has written the letter. In terms of value for money, affordability and all the things that he addressed, the Minister simply has rested on the argument that the Minister is entitled to say, “I ignore your letter of direction”. But it is a very serious matter.

I am not a great reader of Merits Committee reports, but having read this one I cannot believe that there has ever been such a devastating report. I will not repeat all the points made by the committee, but anyone who reads the summary will see that time after time, the Government’s case is destroyed by the report of the Merits Committee. The Minister has said nothing about that; he has simply relied on his very weak arguments.

The proposals go against the Government’s own criteria in their own legislation, especially in relation to value for money and affordability. In the current economic climate, these are two vital matters. The local authorities in Norfolk, as elsewhere, are going to face very challenging times and will have to make many cuts, efficiency savings and so on. They are addressing those issues, but to ask them to face the issues of affordability and value for money as well is a critical mistake by the Government.

The Minister said that Norwich City Council would have new leadership. My goodness, it needs it. The council has been heavily criticised on the grounds of value for money and affordability and, in four of the past five years, its accounts have not been approved. It is a pure act of faith on behalf of the Minister to believe that new leadership will change all of that.

As has been indicated, this decision runs in the face of a previous Secretary of State’s decision, which was the correct one in terms of the legislation. The Boundary Commission does not recommend this proposal. A letter written by the Permanent Secretary at the Department for Transport on this issue has now been revealed. The Minister referred to the wider issues of environment, infrastructure and so on. The Permanent Secretary at the Department for Transport criticised this proposal on transport grounds. He also said in his letter that he believed that Treasury officials would have difficulties with the proposal. I have been unable to find out what the Treasury officials said; perhaps the Minister will comment on that. As a former Chief Secretary myself—I have been making this representation to the Treasury—if I had had in front of me a proposal along these lines I would have asked some serious questions of the department. I cannot believe that the Treasury, in the current economic situation, thinks that this is a sensible proposal.

The Minister referred to the interests of the people of Norfolk and adequate consultation. He implied that this would not have an impact on the rest of Norfolk. However, in almost its opening paragraph, the Merits Committee states:

“The committee therefore remains unclear how unitary status is expected to solve the problems identified in relation to each city, without creating unacceptable consequences elsewhere”.

Those unacceptable consequences are for the rest of the people of Norfolk and for the councils involved. The Minister referred to consultation but he did not say that all other seven Norfolk councils are against this proposal and that they have made that very clear and very strongly, in recent days and before. The Minister did not refer to the Department for Communities and Local Government’s own consultation exercise in December and January, which revealed that only 3 per cent of those consulted favoured a Norwich unitary council. How on earth can the Minister then say that this is in the best interests of the people of Norfolk and provides the best of both worlds for Norfolk when only 3 per cent of those consulted think that that is the case? Does the other 97 per cent not matter? Is it not a case, once again, of Whitehall and a few in Norfolk knowing best?

On judicial review, as has already been stated, the Permanent Secretary at the department warned the Secretary of State that the risk of a successful challenge was very high—I suspect that very few Ministers have ever had a Permanent Secretary telling them that the risk of judicial review is very high—and the Secretary of State accepted it. The amendment of the noble and learned Baroness, Lady Butler-Sloss, deals with this issue correctly. The judicial review will undoubtedly take place and, if the Permanent Secretary is right and the risks are very high, it will reach a conclusion after the House has prorogued. We will be in a twilight period and we will then have a new Government and a new situation. Surely, irrespective of the legality, it makes proper procedural sense for this decision not to go ahead until the judicial review has been heard. The amendment proposed by the noble and learned Baroness, Lady Butler-Sloss, will achieve that by delaying this proposal until we have further evidence, not least that of the judicial review.

My Lords, we have in Norwich an excellent Eastern Counties press. Its morning paper, the Eastern Daily Press, is county-focused; the Evening News is the city paper. Both are from the same stable. On the day that the Secretary of State made his announcement proposing unitary status for Norwich, the morning paper quoted in its headline a Tory Norfolk MP, describing it as,

“the worst of all worlds”.

The Evening News, from the same stable, had as its headline:

“A New Dawn for Norwich”.

Those views, of the counties and the cities, as we have already heard today, are probably irreconcilable, even though I know that when Norwich thrives, so does Norfolk. I should here declare my interest as a former leader of Norwich City Council, a former Norfolk county councillor, a three times parliamentary candidate for a Norfolk constituency with a large rural population, an honorary freeman of Norwich as well as a DL for the county of Norfolk.

Given my commitment to Norfolk, as well as to Norwich, I would not support unitary status for Norwich if I did not truly believe that it would benefit Norfolk people, half of whose rural population, according to the Audit Commission, experience deprivation and look to the city for their jobs. More people commute into Norwich for their work than into any other city in the UK apart from London. Norfolk people—not just Norwich people—need a vibrant, strong, unitary Norwich if they are not to be left behind. When Milton Keynes became unitary, it enriched Buckinghamshire. When Leicester, Derby, Nottingham and Southampton became unitary under a Conservative Government, no one talked about ripping them out of the heart of their counties; no one now would say that they should be district councils; everybody now believes that they have enriched not just their cities but their county and their rural hinterland as well. At least 10 unitary councils, from Hartlepool to Blackburn to Reading, are no larger than Norwich is today, and they are driving forward their local economies. Norwich is the largest district council that is not a unitary. We are suffering as a result and, with it, the people of Norfolk are. The Work Foundation states:

“Other cities have benefited from single tier arrangements, and have used these to strengthen relationships with the rural hinterland”.

If Parliament agrees, Norwich will be able to go into bat for the people of Norfolk, who along with people in the north-east and Cornwall are among the poorest in the country. They need that body on their side.

Why am I so sure that Norfolk’s people need a unitary Norwich? Much was made of what the noble and learned Baroness, Lady Butler-Sloss, said—and she was right—about there being a sparsity of forward-looking evidence for economic development under a unitary authority. But why look in the glass, when one could look at the history book? I joined the city council in 1968, when we were a unitary county borough. I helped woo a major company, then Bland Payne, part of the Sedgwick Group, to Norwich. I helped organise the site, the planning consent, 150 key-worker houses, the roads, the training support and the transport. It was a one-stop package, and it has become the second-largest reinsurance company in the world.

Fifteen years later, as leader, I was approached by another major financial company. I offered it the site and key-worker houses, but I could not guarantee it the highways and planning consent that it needed for its package, as it was a county function. When it understood that we were two-tier, and that it would be dealing with two sets of offices, to and fro, it walked; it did not want the hassle. Because Norwich was not unitary, I lost 600 jobs, not just for the people of Norwich but for the deprived people of Norfolk as well. That is why these orders matter. Cities like Norwich and Exeter are not leaving their county and erecting walls. On the contrary, they want to power their counties with good knowledge economy green jobs, as cities have always done over the centuries. After all, Norwich is the regional capital of East Anglia—but we cannot do this on the revenues, resources and powers of a rural district council. As Professor Ron Johnson of the Boundary Committee wrote, when he left it, Norwich's economic development has a multiplier effect well beyond its boundaries. At the moment, the Work Foundation says that economic planning is schizophrenic at best and dysfunctional at worst. It is balkanised.

When Norwich was unitary, we built the prestigious city college and, later, the county bought in. We developed an international airport and the county joined us. We rebuilt the theatre royal and the county bought in. The city campaigned for a new university, the UEA, and gave up its municipal golf course for it. Indeed, the factory girls in Norwich's Rowntree Mac gave up half a day’s pay for the University of East Anglia to start. The county generously and properly backed it. I have no criticism of the county coming in behind the city; unitary cities are focused, fleet of foot, innovative and entrepreneurial; the county council, on reflection, over time, usually joins us. But now we are fettered. The city is planning for 30,000 new city jobs by 2026. It needs 100,000 square metres of office space in its city centre—and we are fettered.

At the core of these statutory instruments is a recognition that since medieval times city and countryside are different. City density and rural sparsity need different responses. That is why we have local government at all—to recognise that difference. If local government is not about local difference it is not local government. Indeed, precisely because the city of Norwich, or the city of Exeter, is one district council among many under the county council, understandably and reasonably enough the county seeks to offer a standard, uniform service that is a rural-level service across its acres. The result is to raid and run down the cities. As the Merits Committee said on page 12 of its report—much quoted tonight, there are,

“genuine concerns that the differing needs of city and rural dwellers are not being adequately met by the current arrangements”.

Precisely. We have been badly served.

I can give some examples. In the past six months alone our street lights will have been turned off in the city of Norwich, apart from a few central streets, between midnight and 5 am, because of works in the rural areas. The county proposes to close two day centres built by the people of Norwich to redistribute resources elsewhere in the county. The city and local business, particularly local business, wants to pedestrianise a medieval shopping street through the centre of Norwich, and county councillors who live 20 or 30 miles away are forbidding it. The county’s ruling 10-member cabinet contains not a single Norwich county councillor—not even a city Tory county councillor. It has just established an employment and skills board for Norwich, yet, despite such a high proportion of jobs being in Norwich, the city council will not be represented on that body.

How can the county understand the needs of the city with its very different rural experience? Let me touch on education. When the city ran education before 1974, there were six comprehensives in Norwich. From four of them you could get to university, and from three you could get to Oxbridge, as my son did. As a former teacher, Mr Corney, wrote to the local press, under the council’s watch one school is closed and, of the other five, four have been in special measures, three have had to restart with new names and two have been handed over to private providers. We estimate that something like £12 million a year is being redistributed away from city schools to help rural schools. I do not deny the right of the county to support rural schools, but I deny it the right to run down Norwich at that expense.

Much has been made not of whether the outcomes of unitary status are desirable but of the processes, and it is to that point that I now turn. Back in the summer of 2006, the White Paper outlined five criteria for unitary status: value for money, affordability, stakeholder ownership, strong leadership and neighbourhood empowerment. Those criteria were not statutory; they were not in the legislation. They were in consultation documents along with the White Paper; they were guidance, four years ago, from which the Secretary of State was entitled to depart.

The noble Lord, Lord MacGregor, has raised value for money and affordability. Four years ago, the Liberal Democrat administration that we, the Labour Party, inherited in Norwich, had a projected £2 million deficit. Now we are saving £4 million a year and have £8 million in balances, and we estimate that the transition costs will be repaid in three years, with further savings of £4.5 million a year to follow. I have crawled over those figures.

The Permanent Secretary, as accounting officer, rightly pointed out, in a letter much quoted today and published by the Secretary of State, that none the less value for money came from the cheapest option. No one today has said what the cheapest option was. I shall tell the House: it was, and this was favoured by the Boundary Committee, a unitary Norfolk. The savings, and the best value, came from abolishing all the district councils in Norfolk, including Norwich, and producing a unitary council with a population almost the size of Birmingham and almost the size of Cyprus—and we call it local government. No doubt we could make even greater savings by abolishing local government altogether.

A second criterion was stakeholder ownership. There was no support whatsoever for a unitary Norfolk county council. Even the Norfolk County Council would join a judicial review against giving the powers to itself. So two of the original five criteria, in ways that could not have been foreseen in 2006, cancelled each other out.

Meanwhile, although unitary cities had the support of key stakeholders across the parties, business and universities, we are told that we should have had a referendum and consulted the whole population. Who would vote? Norfolk dwellers unaffected by the proposals, living 40 miles away? After all, Norfolk’s population is five times larger than Norwich’s.

During the debate in Westminster on 2 March, Norfolk Tory MPs stood up one after another to demand this consultation. Of each one Charles Clarke, the MP for Norwich South, asked, “In what way are your constituents disadvantaged if Norwich becomes unitary and the rest of Norfolk’s local government structure is left unaffected?”. From those Tory MPs, answer came there none.

Instead, four years on and after a deep recession, the Secretary of State rightly adds two additional considerations: economic development, which is what cities like ours and Exeter do—fettered though we are—and a commitment to Total Place, a holistic and unitary approach to all public services.

I remind the House that in two-tier counties, services that should be integrated, like housing and social services are splintered. Where does the adult Down’s son who needs supportive housing go? Where do the frail elderly who wish to stay in their own home but need support go? Other services, like planning, are concurrent. Still other services, like weights and measures and environmental health, overlap. Where do you go if you want to complain about some mouldy cheese that you have bought? Yet other services, like highways, are done by agency.

At Norwich’s ancient—indeed, probably Anglo-Saxon—Freemen ceremony on Friday, someone told me about their recent council tax bill. “It’s a complete muddle,” he said. Nobody in Norwich knows who does what, to what standards, to what price or to what accountability. Therefore, under the present structure, they cannot hold city or county to account. Instead, we get confusion and inconsistency—and, sometimes, ignorance, duplication and disagreement.

The noble Lord, Lord Filkin, cannot be here today but, with his local government background, he was the founding chair of the Merits Committee. He has asked me to say that,

“strong central cities like Exeter and Norwich need the better governance and clearer accountability that comes from unitary status, to address the challenges within their boundaries and to contribute positively to the wider needs of their areas”—

wise words from the former chair of the Merits Committee. My regret is that it has taken so long to reach the Floor of this House, as the Boundary Committee kept proposing a unitary county that no one wanted together with five judicial reviews. Otherwise, these proposals would have been before your Lordships 18 months ago.

I have one last point. In April 2006, the noble Lord, Lord Bowness, a man experienced in local government, opened a local government debate from the Conservative Benches. Said one speaker in that debate,

“I understand entirely the concerns and frustrations … about the status of Norwich. Most people”,

this speaker said,

“apart from a few diehards in the counties at the time would have conceded unitary status to the former county boroughs”.—[Official Report, 27/4/06; col. 356.]

That speaker was the Conservative, the noble Lord, Lord Bowness. He was right then; I hope that the House will agree that he is right tonight and support the Government’s Motion.

My Lords, it had not been my intention to speak in this debate because I cannot claim a connection with either Norfolk or Suffolk, but the noble Baroness, Lady Hollis, was kind enough to say that she was going to refer to what I had said on a previous occasion. I am not going to say that I retract that, or that I consider that I have changed my view. It was a mistake, but it was one made 30 years ago, to abolish the county borough status of the major cities in the country. Those ancient cities clearly had a sense of history and identity quite different from other towns within the country. The role of the county was less understood then, perhaps, than it is now. I am not trying, then, to say that I was misunderstood or that I retract, but it was 30 years ago and local government has, for better or for worse, changed significantly.

I am no longer active in local government. I cannot say that my instincts towards the former county boroughs and the large cities have changed; they have not, but the financial situation has. While my instincts may not have changed, the questions raised by the Merits Committee which are before your Lordships are compelling. The arguments put forward by the noble Lord, Lord Tope, are also convincing; the amendment put forward by the noble and learned Baroness, Lady Butler-Sloss, is not fatal.

It seems to me that those of us with a genuine interest in local government—and in getting the local government structure right—ought therefore to be prepared to support the noble and learned Baroness on her amendment, to ensure that these changes are not made in the dying days of a Parliament. That is not asking anyone who believes, as I do, that large cities have a particular place and role in local government to deny it. It does, however, enable this proposal to be further examined in the way suggested by the Merits Committee.

My Lords, I support my noble friend Lord Tope, who made an excellent and compelling speech, in marked contrast to the reasons advanced by the Government in support of this order. I declare that one of my law firm’s offices is in the City of Exeter. I have known the city well for over 40 years, and my firm acts for many people in and round the City of Exeter. I have lived most of my life in Devon and I was Member of Parliament for Torridge and West Devon from 1997 to 2005.

I pay tribute to the Merits Committee for its report on this matter and to the Joint Committee on Statutory Instruments. These committees are drawn from all parts of the House. Members of both have put on record, as we have heard many times already this evening, that they have many and profound misgivings about these orders. Reports of both committees highlight the fact that there is clear written advice from the Permanent Secretary himself to the Minister that there is a risk of these decisions being successfully challenged in judicial review proceedings. I emphasise that the Permanent Secretary told the Minister that the likelihood of these challenges succeeding was very high. We have also heard this evening that this is a unique event in the history of this department of state.

These proceedings have now been taken and are due to be heard towards the end of April. Many of us in this House support the concept of unitary authorities, but I am amazed that Ministers have proceeded with these orders in the light of the deep and fundamental flaw in the reasons propounded to support them. I shall speak to the Exeter order because that is my area of interest, but most of the points I set out are equally applicable to the Norwich order. The Exeter order, as we have heard, should have satisfied all five criteria set out in the 2006 document, Invitation to Councils in England. The first criterion is that,

“the change to future unitary structures must be affordable; (defined as self-financing, with transitional costs being more than offset by savings over no more than 5 years)”.

The Department for Communities and Local Government’s own impact assessment of the draft order includes an analysis of costs and savings which shows a net cost of Exeter and Norwich becoming unitary authorities of £1.6 million over six years. Thus, the first test is failed by the department’s own impact assessment. I am told by very reliable sources that £1.6 million over six years is a minimum cost figure, and it is likely to be considerably more than that.

The figure contrasts dramatically with a net saving of £42.4 million if Norfolk and Devon became unitary including their capital cities. This figure comes from the department’s impact assessment. The loss to the public purse is at least £44 million if these proposals are implemented. It is not as though the public Exchequer is awash with money. The Government are borrowing nearly £500 million every day just to function, and yet they seek not only to drive a coach and horses through their own value-for-money test, but to add substantially to public sector debt—the debt that we all carry in this country. It is quite preposterous.

Ministers, in contradicting the Permanent Secretary’s overwhelmingly compelling advice, have put up two new reasons to support the orders. These are not tried and tested reasons; they have not been consulted on. The Minister has resorted to “back of a cigarette packet” political expediency. The first reason is to give priority to jobs and economic growth, which could not be contemplated in 2006 when the criteria were developed. As the Merits Committee states, this is an unquantified assertion. I would add that it was untested and has never been consulted on, and there is no logic or rationale whatever for the statement. Indeed, the Merits Committee has asked the DCLG to give a much more explicit analysis of how much economic growth each city, as opposed to each county, is expected to generate as a result of becoming a unitary authority.

The second so-called reason is the total-place approach, whereby, as unitaries, the two cities could open the way to improvements to the quality of public services. As with the first test, there is no logic, body, work, consultation or study to back up this assertion. As the Merits Committee rightly states, the Minister should provide a clearer explanation of why the Total Place approach is considered a compelling reason for granting each city unitary status.

Noble Lords will have heard that the third county, Suffolk, has been treated entirely differently, and there has been inconsistency even in this decision. I draw noble Lords’ attention to the submission made by the leader of East Devon District Council, Councillor Sara Randall Johnson, which is item 7 in the Merits Committee’s report. She states:

“I struggle to understand how a unitary Exeter could open the way for improvements to the quality of public services, which in a Devon context are already performing to a high level (recently confirmed in the Devon wide Comprehensive Area Assessment)”.

She goes on to say:

“It is a matter of record that even before 2006 local government in Devon was strongly focused on jobs and economic growth (witness, for example, the relocation of the Met Office and the expansion of Exeter Airport’s industrial base)”.

She goes on to make an entirely valid comment:

“Exeter’s boundaries are tightly constrained. Exeter’s economy is a success story but the suggestion that it has been achieved despite two-tier local government is nonsense”.

The city’s success has been built on a partnership of the city council, the county council and other local authorities. Most of Exeter’s future economic prospects now depend on development outside the proposed unitary city boundary. The county council has proved a very successful enabler for cross-council development.

There is very little public support for the Exeter order. I draw noble Lords’ attention to the MORI poll also referred to in Councillor Randall Johnson’s submission. All Devon local authorities are against these orders except for Exeter city. The orders will cost the average Band D council tax payer in Devon approximately £200 a year extra. I believe also that many, if not most, Exonians are against these orders, but most of all I believe these orders are deeply flawed, unlawful and amount to a gross abuse of power. We are here to deal with matters such as this. We should vote against these orders and throw them out.

My Lords, if you are the Bishop of Norwich it seems a bit superfluous to declare an interest. I was born in Torrington, Devon, but of pure Cornish parentage. They apologised to me for having their principal residence in the wrong place.

The diocese of Norwich covers nearly all Norfolk and much of north-east Suffolk; namely, the Waveney valley. Apart from some parishes in west Norfolk which are in the diocese of Ely, the diocese of Norwich is as near as you can get to the shape of the initial proposal of the Boundary Committee that there should be a unitary authority for Norfolk and Waveney. We have come some way since then.

It is the diocese of Norwich and not the diocese of Norfolk. My title is an indication of the significance of the city of Norwich for the great diocese it has served for more than 900 years. I am not quite sure whether a diocese counts as an ecclesiastical unitary authority. I shall consult the Archbishop on that. We are not short of tiers of local government with archdeaconries, three episcopal areas, two of them looked after by my suffragan bishops, 30 or so deaneries overall, 577 parishes and 642 churches. Whatever else may be its shortcomings—I am sure they are many—the Church of England knows something about sustaining, refreshing and reshaping historic structures over the centuries. We might even have been of help to the Boundary Committee, for the reason we are in this undesirable situation today is largely due to the serious misjudgments of that body. While it initially recommended a unitary authority on the scale of the diocese of Norwich, I doubt whether it knew it was doing so since its sense of history seems so limited. And in the matter of local government, history, place and context matter. When those are ignored, which seems to be a recurring feature of local government reform, the resulting structures do not work.

I have now been in Norwich for 10 years. On my arrival, I found myself president of the Norfolk and Norwich Association for the Blind. I went to the then Norfolk and Norwich Hospital, now the Norfolk and Norwich University Hospital with a new medical school. These institutions were founded in the 18th century. So, too, was the Norfolk and Norwich Festival, one of the oldest and best cultural festivals in the country. There are other organisations that use both Norfolk and Norwich in their titles. Coming as I do from Cornwall, it struck me how unthinkable it would be to give any of the great institutions of that Duchy names like the “Cornwall and Truro Hospital” or the “Cornwall and Truro Association” for this, that or the other. Yet it is natural in Norfolk because of the scale and significance of the city in relation to the county both historically and in the present day. More than 40 per cent of all the jobs in Norfolk are to be found in Norwich. Norwich’s significance in relation to the county can sometimes be resented, but it simply cannot be ignored economically, culturally or even spiritually.

The trouble with the proposal before us is that it is not the city as it is today which would have a unitary authority. It is the city as it would have been in the late 18th century or even earlier. Under this structural order, a significant proportion of those living or working in Norwich would not find themselves within the boundaries of the city. They would be in the city but not of it, or of the city but not in it. At least a third of what any observer would nowadays call the city of Norwich does not lie within the proposed boundaries, coterminous as they are with the city council at the moment and, in truth, largely with the ancient medieval city. This is the wrong sort of history; it is one which is fossilised rather than dynamic. The consequence of this is that we would have an education authority with just six secondary schools, one of them a voluntary-aided Catholic comprehensive and two others which are already academies. Four major secondary schools in the city, including the biggest, would remain in the county. This seems to me to lack coherence.

I think there are good grounds for a city unitary and still believe that a unitary city authority on the real boundaries of the current city would make good sense. A couple of years ago, people would have worked together in city and county to make such a proposal work. It was expected by many, feared by some, but could have been worked through. But the process has been so mishandled that you would have thought the Boundary Committee and the Government wanted to ensure as much dissension as possible and aimed to build tensions between city and county. We are very fortunate that the leaders of both Norwich City Council and Norfolk County Council are bigger men than this and continue to maintain good relationships, but you have only to read the local press to see the unnecessary conflict which this process has generated.

Within the city of Norwich there are people, especially in our more deprived communities—sadly, we have many of them—for whom the issues we are debating today must seem arcane and the politics incomprehensible. What they need are good local services and strong and well resourced local government. If this proposal were to deliver such things, I would be pleased, but it does not start from a strong base. I shall continue to work in partnership with whatever local government arrangements are in place in Norfolk and Norwich, so I am not inclined to vote today. But the story of the past three years has done little to build trust in our political processes or indeed faith in their transparency. That is the problem, whatever the outcome this evening. The people of Norfolk and Norwich really do deserve better than this.

My Lords, I shall not make a speech but ask the noble Lord one or two questions about a set of orders that we are not debating this evening, but that we should have been—those that relate to my home county of Suffolk. Suffolk has been considered alongside Devon and Norfolk right through this process, yet for some reason that is inexplicable to the people there, the Government decided that they would ignore the recommendations of the Boundary Committee and that Suffolk was to have a constitutional convention. Why has Suffolk been singled out in that way? Does he accept that it might have been sensible to use the approach of a constitutional convention for Suffolk at the start of the process three years ago, but it is not sensible to bolt it on at the end of a process that has cost Suffolk taxpayers many hundreds of thousands of pounds, significantly affected ability to recruit staff, and had a detrimental impact on ability to work in partnership? How does he think that Suffolk residents have benefited in any way from the process that we have had so far?

Finally, has the noble Lord given any guidance to Suffolk on how the constitutional convention is to do its work and frame its deliberations? Is it to work on the Government’s original five criteria or add in the two new ones, or should it just exercise its imagination and think about some criteria that the Government might dream up between now and the report?

My Lords, it is with considerable trepidation that I intervene in the debate: what possible contribution can a Welshman—from west Wales—have in relation to matters in Devon and Norfolk? I suppose one can put the other side of the coin and say that one is so far removed geographically from such places that one is able to look on the situation with total objectivity and complete neutrality. I shall speak for only a few minutes in what has been a fascinating, passionate debate with powerful arguments advanced. I do so because I have believed strongly for many years in unitary authorities.

I well remember attending the debates in the House of Commons in the early 1970s with regard to local government reorganisation. The late John Silkin made a speech arguing that one should reduce to the smallest number possible the tiers involved in any part of England and Wales. I remember him mercilessly using the words of Mark Antony:

“If you have tears, prepare to shed them now”.

He was speaking a great and universal truth, one that we in Wales have exploited. We have 22 county authorities. Many are small, extremely poor and—I am sure that persons who have dealings with Wales would agree—hardly in a position to carry out their basic statutory functions. The answer is not unification of boundaries, but the unification and sharing of functions. It is in that spirit that I look on this situation.

The noble and learned Baroness, Lady Butler-Sloss, put very powerfully the arguments relating to the five criteria. If these criteria constitute the laws of the Medes and Persians in this matter, and if they relate to the shorter rather than longer term, then her argument succeeds. However, these matters are not the laws of the Medes and Persians. When one is dealing with the prospect of whether a city should be a unitary authority, one is dealing with imponderables. It is of course right that you should have guidelines at your elbow when making that decision—but they are guidelines. How can you calculate how the energies of a great city—for example, Norwich—would be released by having reinstated the authority that it had for many centuries, up to 1974? Norwich is the biggest city in England and Wales that is not a unitary authority. How can you calculate, over the relatively short span of a few years, whether that will be in the best interests of the community?

The right reverend Prelate referred to communities. Parliament can do many things. It used to be said that Parliament could do anything except make a man a woman or a woman a man, but I am not sure whether that is a restriction any longer. However, one thing that it cannot do is create communities. It is people who create communities—by their outlooks, their fears, their hopes, their aspirations, and very often their deeds. There is a community in Norwich, Norfolk, and Exeter in Devon. They are giants with immense potential, but are shackled by the present system. It is right and proper that they should be given the opportunity to develop that potential.

I begin by declaring an interest. I have lived in Norfolk all my life. My forebears were in Norfolk as far back as we can trace. I have been a Norfolk county councillor for a division of the city of Norwich. I have been a Member of Parliament for south-west Norfolk, and I am a deputy lieutenant.

I pay tribute to the Minister, who is well respected in this House, for the skilful way in which he has presented the case for this extraordinary can of worms. What he has presented bears absolutely no relation to the perception of people in Norfolk of the process that has led us to this evening. It is impossible to imagine a more incompetent and unconvincing process than the one that has got us here. The whole episode, which has been characterised by delay, contradiction and disunity within government, began, as he admitted, in 2006. It has been massively costly in public money, energy and time on the part of councils, other public bodies and the voluntary sector. Local decision-making has been blighted and local government left paralysed at the very time when it must meet unprecedented demands and spending cuts imposed on it by the Government.

I do not for one moment doubt the seriousness and commitment of noble Lords who today support these orders. I have known the noble Baroness, Lady Hollis, for at least 34 years. She is serious about this process; but people in Norfolk wonder whether the Government are serious, and this is why. They say that if the Government were serious about imposing unitary local government throughout England, why did they not propose such a policy in their manifesto? If they were committed to the empowerment of people at local level, why did they legislate to ensure that the public should not be consulted on the issue, and that the status quo—that is, two-tier local government—would be ruled out without discussion? If they were really serious about unitary local government for Norwich and Exeter, why have they taken four and a half years to lay these orders today—arguably in the last four and a half days of their legislative life?

Those are the questions that are being asked in Norfolk and Norwich. I do not intend to rehearse the history of the episode—the issue of the criteria, the U-turns and the overruling of the decision of Hazel Blears—but I will emphasise, as did my noble friend Lord MacGregor, the extraordinary intervention of the accounting officer and Permanent Secretary at the DCLG. I can tell the Minister, because we have researched it, that his intervention is without precedent within the history of the department. He requested a political direction before the announcement could be made on the very reasonable grounds that the policy did not meet the Government’s own criteria. He also pointed out that the newly introduced criterion of Total Place had not been part of the original considerations and therefore had not been consulted upon. Like my noble friend Lord MacGregor, I have had no experience in the five Secretary of State jobs that I have held of having such a direction.

It is impossible to avoid pointing out that the present Norwich City Council has recently had difficulty in coping with its current responsibilities. In four of the past five years, its accounts have not been approved, and two of its recent decisions are at present being challenged in the courts. It is unclear that it could cope with broader policy areas, such as those relating to the elderly or vulnerable children. Its population—around 122,000—

I beg the noble Baroness’s pardon. The figure is still quite small. Its physical area is also small and opportunities for growth in jobs and housing are somewhat limited. That is a point well understood by the local business community. In any event, its current ability to provide strong strategic leadership is questioned.

Earlier this year, the Government announced the results of a “consultation exercise” on the proposal. I listened very carefully to what the Minister said about support. He said that there is genuine local support for this proposal. The Government have not revealed who was consulted but we know that it could not have been the public because they legislated to ensure that the public could not be consulted. However, we do know that, of the responses received, 85 per cent were in favour of the status quo in local government in Norfolk and Norwich, 10 per cent favoured a Norfolk unitary and just 3 per cent favoured a Norwich unitary. As we approach a general election, I wonder whether the noble Lord’s party would consider support from 3 per cent out of the total sample to be an overwhelming general election success, demonstrating genuine local support. In laying these orders, Ministers are going against the decision of a former Secretary of State, their own criteria, their own accounting officer in the DCLG, the advice of their own Boundary Committee and the opinion of the people affected—the people of Norfolk and Norwich—and all this in the last dying days of this Government.

In conclusion, the Merits Committee, as we have heard, requested evidence from the public as part of its consideration of the orders. Fifty of the 68 submissions received were from Norfolk and Norwich. Of the 50, just six were in favour of a unitary Norwich. All the others were opposed, including the Norfolk Police Authority, NHS East of England, NHS Norfolk, the Abbeyfield Society, the Saffron Housing Association, the Norfolk Association of Local Councils, parish councils and concerned individuals. All of those perceive the truth, which is that the introduction of a third system of local government into Norfolk will be divisive, costly, destructive to implement and enormously distracting for all public services at a time of financial constraint.

The Norfolk and Norwich Abbeyfield Society, which noble Lords will know is a housing and care organisation for elderly people, states in its evidence:

“The use of a Statutory Instrument to enact a Ministerial decision … which has been clearly demonstrated to be contrary to the wishes of the overwhelming majority both in the City and the County … smacks of political expediency rather than democratic engagement and it is the hope of our residents that you will resist this abuse of governmental power”.

I shall support the amendment tabled by the noble and learned Baroness, Lady Butler-Sloss, which asks the Government to think again about the mess that they have made of this whole issue.

My Lords, I support the order. I have no interest to declare and I have never been a councillor in the south-west. However, I spent 15 months of my life looking at the economy there and, as a result of that work, I support Exeter becoming a unitary authority. This evening we have heard voices of opposition, suggesting that we should leave things as they are and that we should stand still, but I do not think that is possible if you are very concerned about the well-being of people in Devon and the south-west. I have been a resident of Cornwall for just under 20 years, but in the eyes of many in the area that still makes me a grockle. It does not prevent me being very interested in the south-west and particularly Devon.

About three or four years ago, I was invited by the regional development agency, the government office in the south-west, to chair a group. On that body there were representatives of the university, the chamber of commerce, business, and so on, right the way through the whole community. At the end of that work, one of the key decisions, which was unanimously accepted by all the counties in the south-west, was that in such a rural area—Cornwall has the longest coastline of anywhere in Britain—the policy of moving forward within a whole county was not the best way forward for the future. There had to be enhancement of the economies of the cities in the south-west. Exeter was and is the lead city there. In 1998, there were something like 69,000 jobs in Exeter and by 2004 that figure had increased to 86,000. The projections for the regional spatial policy are that Exeter could have a population of 175,000 by the end of this decade.

This decision has not been reached quickly. Noble Lords ask why there is a hurry towards the end of this Parliament? The worst possible outcome this evening would be for the House to take no decision at all. The people in this county have been waiting a long time for the go-ahead to take their economy to the next stage.

Much play has been made of the letter from the accounting officer. I do not think there is any dispute that this is the first time that has happened, but the mere fact that there is provision for that to happen shows that it could have happened at some stage and the fact that it has happened here does not make the Minister's decision wrong. Indeed, the Boundary Committee’s report gives the Minister three options: “You can proceed with the unitary authorities for Exeter and Norwich; you can make no order at all; or you can accept our recommendation”. This has been going on for several years.

I chaired part of that work. All the various parties came together. The University of Exeter, the chamber of commerce and all the local political parties are in favour of this. I have some difficulty getting my head around how we rationalise the opposition to this order with the manifesto commitments that appear to be being made by the Opposition to go local on decision-making and put it in the hands of local people. This opposition to the order will prevent that. The Lib Dems have always stood proud on their local and community involvement. This will not hive Exeter off from the rest of the county. It will put into the hands of Exeter the social and economic engine, just south-west of Bristol, for the rest of the area and give it the opportunity to take its economy forward in a way that it has not been able to do.

I was approached by Devon County Council. I had an open mind on this. I met it and listened to what it had to say. It said that job expansion will be on the boundaries of Exeter, and I asked whether that would mean that if Exeter was a unitary authority, the people would need passports to get those jobs. This is about taking forward the opportunities that Exeter and the people of Devon will have. Exeter is a city that can grow that has a rural community around it. Their needs are different. For instance, recently, without any consultation with the councillors in Exeter, a new waste-to-energy building was developed in Exeter. Exeter city councillors were not involved. Exeter City Council wanted to set up a trust foundation for education that was supported by the university, Exeter College and everyone in Exeter. It was stopped by the education department in the county council. That cannot be good. Anyone who has been to Exeter, as I have, will know of the increasing transport and congestion problems and the housing demand, much of which is not being given the priority that it should have.

I support this order. I gather that it has gone through in committee in another place, although I may be wrong about that. Professor Ron Johnston was the local government expert on the Boundary Committee. He resigned because he thought the process was flawed and “biased”—his word—against Exeter and Norwich. He was put on the Boundary Committee as the expert on local authorities. I do not ignore what someone of his standing says. He felt that he could not go along with this and resigned.

We need to take a decision this evening, and I think we should decide to support this order. I oppose the Motion moved by the noble Lord, Lord Tope, and, with all due respect, I suggest that the Motion moved by the noble and learned Baroness, Lady Butler-Sloss, just defers this and will cause an impasse in the area, which needs a clear decision to get on with it, develop its economy and provide the housing and jobs that are needed. I believe a unitary authority for Exeter is the way to deliver that.

My Lords, I declare an interest because I live in Norfolk, pay rates there and, once upon a time, I was a deputy lieutenant. I find the introduction of these two structural orders remarkable for a number of reasons. Consultation has been going on for some four and a half years. Why is it only now, within a few months of a general election, that these orders are being produced? They say that the Secretary of State had consulted not with ordinary people but with,

“other persons the Secretary of State considered appropriate”.

One wonders who those people are. I think the Minister let the cat out of the bag when he said “stakeholders”. Who, or what, is a stakeholder? It is a dreadful piece of Civil Service jargon that is used all over the place nowadays. It sounds good but it does not describe who is involved. I always feel that a stakeholder is rather like some Viking with a pointed piece of wood which he shoves into the ground and says, “That’s mine”. Whenever I hear the word “stakeholder”, I am taken back to my childhood—something that happens with increasing regularity nowadays—and realised Edward Lear’s frustration at not knowing who the Akond of Swat was. Your Lordships may remember his distress, when he wrote:

“Who, or why, or which, or what, Is the Akond of Swat?

Is he tall or short, or dark or fair?

Does he sit on a stool or a sofa or a chair, or squat,

The Akond of Swat?

Is he wise or foolish, young or old?

Does he drink his soup and his coffee cold, or hot,

The Akond of Swat? …

Does he wear a turban, a fez, or a hat?

Does he sleep on a mattress, a bed, or a mat, or a cot,

The Akond of Swat?”

In his frustration, he ends:

“Some one, or nobody, knows I wot,

Who or which or why or what is the Akond of Swat?”.

For “Akond of Swat”, your Lordships may read “stakeholder”. We do not know who they are. All I know is that most people in Norfolk feel that they have not been consulted, even though the enigmatic “stakeholders” may have been. Perhaps, like snow, they are the wrong type of people to consult.

As a result, as has been said, one sort of consultation exercise found that 85 per cent wanted to keep the status quo and only 3 per cent wanted a Norwich unitary council. Why do we give all this power to Norwich City Council? It is not as though it is particularly good or efficient at running what it is supposed to be running at the moment. As my noble friends Lady Shephard and Lord MacGregor have said, the city council has not been officially approved for four out of the past five years. That is a terrible indictment of its efficiency, competence, honesty or something. On top of that, the Government want to lumber it with a whole lot of new duties and responsibilities, saying that it will be more efficient. Everyone knows that it will not be, and Norfolk County Council will lose them, which presumably will make it less efficient in turn.

The order says that Norwich will no longer be part of Norfolk. That is absurd, and I can see the right reverend Prelate the Bishop of Norwich getting worked up about it. The order says:

“There shall be a new county … Norwich”.

Rather like Genesis, “There shall be light”, and up comes a new county. The same goes for Exeter:

“Exeter shall cease to form part of the County of Devon”,

says the order, but then says:

“There shall be a new county … Exeter”.

We all know that that is absolute nonsense. You cannot just set up counties by a parliamentary order.

What happens to the position of Lord Lieutenant? Do these two new counties each get a new Lord Lieutenant? The noble Baroness, Lady Hollis, squeaks “No”—the first time that she has squeaked in the whole debate. She made a very forceful speech, on which I congratulate her, but she need not squeak in mine. By proceeding with these orders at the last minute, the Government are going against the recommendations of their own Boundary Committee. They have changed their mind over the assessment criteria to be used, and at the last minute. There was no prior consultation on this, and no one has had the chance to comment on the change of policy. Norfolk County Council is deeply opposed to it, and, as we have heard, your Lordships’ Merits Committee pretty well damned the orders.

When Hazel Blears was Secretary of State at the Department for Communities and Local Government, she wrote to both councils, saying that, as they could not meet the Government’s test of affordability and ability to pay for the reorganisation within five years, they would not be given unitary status. In other words, it was too expensive, it was not value for money and it would not pay. That is that; forget it. Now the present Secretary of State turns the whole argument on its head and says, in effect, “Oh that doesn’t matter. We will go ahead despite it all, and we will disfranchise the people of Norwich by telling them that they cannot have an election for the city council this year as they normally would”. I question how any Government can say, “You, oh city, cannot exercise your democratic rights and have an election. We, the Government, will prevent it”. It seems a pretty rum business, but that is the way in which the Government seem to be going.

The Permanent Secretary was so concerned about what the Minister wanted his department to do that he had to write and ask his Secretary of State to write back and instruct him to carry out that which he, the Permanent Secretary, thought was wrong. The noble Lord, Lord McKenzie of Luton, says that that is all right. Most people do not think that it is all right and my noble friend said that it was the first time it had ever happened. That does not make it right.

This is a most astonishing thing to have to do. Like many of your Lordships, I have been pottering around the ministerial corridors of Whitehall for nearly 20 years—in my case in a very minor capacity. But I have never heard of that happening before. In fact, I did not know that it was ever done or that you could do it. But perhaps that was because I was not near enough to the engine room. It is pretty amazing that a Permanent Secretary should be so horrified by what he is being asked to do to such an extent that it will prevent him properly carrying out his duties as accounting officer for his department that he has to ask his own Secretary of State to give him a written instruction to do what he believes is wrong.

In addition, the Permanent Secretary also warned his Secretary of State that the risk of these orders being taken for judicial review and succeeding is very high. What a warning and what a mess. Yet the Government still go on trying to force-feed their orders through Parliament on two unhappy and unwilling counties, and at the last moment. That is not the way in which to change local government and the Government know this. I will not be voting with the noble Lord, Lord Tope, because it is a pretty damning amendment, but I will be voting with the noble and learned Baroness, Lady Butler-Sloss, in the hope that at least the Government will think again.

My Lords, the much quoted Merits Committee drew our attention to the intention to cancel forthcoming council elections in the area. Cancelling elections at very short notice is something of which people should always be very suspicious and it is about this principle that I wish to speak. In the normal course of events, nominations for local elections in Norwich and Exeter would close at noon on 8 April. Failing tonight to approve the amendment from my noble friend Lord Tope will mean that this House is allowing the Government to halt the elections that those of us who are involved in campaigns and elections would know are in many respects already under way. We can only assume that the Government are fearful of the outcome of those elections. The Minister said that he wants to “preserve the integrity of the democratic process”.

Halting elections on the grounds that you may do badly in them is not democratic and should not be supported. Nor should it be something about which you only express regret. As my noble friend Lord Tope said, at the end of April the High Court action may well result in these orders being declared unlawful and being overturned. But by that stage, it will be too late to reinstate the local elections that would have given local voters their say in the running of these two councils for the first time in two years. It seems to me that there is no good reason for denying local voters the chance to have their say on how their councils are run over the next 12 months.

This, of course, is exactly the argument that noble Lords opposite would have made when the Greater London Council was abolished by the noble Baroness, Lady Thatcher, and the Conservatives in the 1980s, and the last planned round of elections to the Greater London Council were halted. Labour argued that those elections should have gone ahead, that people should have had their say and that it was an abuse of power simply to abolish planned elections in this way.

The Minister tonight may argue exactly the opposite case. He suggests that there is no point in holding local elections for Norwich and Exeter if the nature of those councils may change in 12 months’ time. However, that is a very weak argument in democratic terms. First, we do not know the outcome of the legal proceedings at the end of April; and, secondly, we do not know the outcome of the general election. So if these orders are approved tonight, all that they are guaranteed to achieve is the sudden halting of local elections that are planned and, in many senses, under way.

In response to this, there is simply no point in expressing “regret” about the Government’s plan. Earlier, the noble Baroness, Lady Hollis of Heigham, quoted the Eastern Daily Press; I wonder whether she has read the Eastern Daily Press today, which states that,

“the government presses on, fingers in its ears and blinkers on. We feel this is too important an issue for the peers, suddenly to come over all coy. Supporting a ‘motion of regret’ is not enough”.

It is right to say that this is ill-conceived legislation, and we should vote accordingly. The Western Morning News this morning argues that Ministers should, “listen more carefully”. Its editorial states:

“It is hard not to say the critics of this process are right that the Government is putting political ambition above the needs of both the city of Exeter and greater Devon”.

There may be some who are wondering when it is right to oppose rather than regret government orders. It must be right to vote against government orders when there is a clear abuse of process as so clearly outlined in this debate.

I had strong support from the Conservative Benches when the Government tried, in my view, to fiddle the election rules for the election of the first Mayor of London, and also very strong support when the Government forced through compulsory postal voting in the local and European elections in 2004. We thought then that there was a clear abuse of process and that it was right to vote against the Government. Those with longer memories than mine may also recall the stance taken by this House in 1969 when an outgoing Labour Government attempted to influence the Boundary Commission process to their own advantage just prior to the 1970 general election. That was an abuse of process. When a process is fundamentally wrong and anti-democratic, we should say no to it, not just regret it.

My Lords, if there is anything else we can say about this, I am jolly well going to say it.

I would be the first to say that my serious involvement in local government was a long time ago. I was chairman of two major committees on the Norfolk County Council and was very much involved in the 1976 local government reorganisation and the resulting county structure plan, which I took to public examination. However, I am still in touch with a wide variety of people in the county through voluntary as well as public organisations and have had many representations about the odd decision to grant Norwich unitary status coming so soon after the 2009 recommendation that it was not affordable.

My Norfolk comment would be, “Hold you hard”. The translation for those who are not fortunate enough to come from Norfolk is, “Wait a while”. Wait for the results of the general and local elections, wait for more representations to be made, wait for the guarantee that this is affordable and wait for the legal challenge. We have waited nearly five years; to wait a little longer will not be any problem and will save a lot of money and a lot of trouble. I shall support the amendment of my noble and learned friend Lady Butler-Sloss.

My Lords, I rise at this late stage because I have a screed of reasons why we should accept these orders and I want to speak on behalf of the fair city of Exeter. I would ask the House at this stage to concentrate not on the process but on the substance of the matter and the will of the people of the two cities concerned.

I shall make just two points on process. First, it has taken a long time and it has been fairly disastrous. However, it is not the process that now matters; it is the decision on the substance. I started to have some sympathy with the noble Lords, Lord Tope and Lord Rennard, on elections. However, if the city elections proceeded and the cities returned roughly the balance of councillors that they have now—in the case of Exeter, the council recently voted by, I think, 31 to two in favour of unitary status—would the Benches opposite then support unitary status for those cities, or would they ignore public opinion in those cities, as they have done up until this date?

I appreciate what the noble Lord is saying, but surely the people of Devon and Norfolk count in this, too. Surely it is matter not just for the citizens of those two cities, even if they were unanimous in agreeing to unitary status.

I have known and loved the city of Exeter since I was a child. In those days—the noble Earl, Lord Ferrers, has gone—you would drive into Exeter and see a sign which said, “The City and County of Exeter”. That is what the people of Exeter wanted. Yes, it does have implications for others, but the main implication is for those who live and work in, and draw their living from, Exeter. Overwhelmingly, those people have demonstrated through their votes, their council representatives and their businesses their support for unitary status. Institutions, civic and educational, all support unitary status. An article written by the chair of the chamber of commerce a few days ago indicated all the frustrations which businesses in Exeter city have with the two-tier process. They oppose the kind of red tape that I would normally expect the Benches opposite to raise as a problem for the operation of businesses. Others have asked where the localism is in the opposition to the orders. If we are to devolve to the lowest possible level of community decisions which mean something to the community, then let us do so in relation to the citizens of Exeter and of Norwich.

I make my second point on process. It was quite proper for the Permanent Secretary to write the letter. It was equally proper for the Secretary of State to override it, because the option which would have met most of the criteria, and the cheapest option, is not on the table, because no political party, no major institution and no major business representatives in the city of Exeter—I believe the same to be true in Norwich—supported a double unitary solution. It is either a unitary solution for Exeter, with Devon remaining two-tiered, or it is what is proposed. The Permanent Secretary’s letter is therefore to some extent irrelevant; the process is at this stage irrelevant; the timing is at this stage irrelevant. Parliament has had a substantial debate on local government issues. I would love it to discuss these things in more detail and more frequently. We do not want to be hung up on process; we want to take our decision on the basis of what the people of Exeter and Norwich want and what is best for them. That is encapsulated in the orders before us. I have heard no argument tonight that should be sufficient to deny the people of Exeter and Norwich their wishes.

I nearly always agree with the noble Lord, Lord Whitty. However, having lived in north Devon for the past five years in a town, Bideford, which has some of the poorest wards in the UK, I am shocked that the noble Lord and the noble Baroness, Lady Dean, whose previous work I respect, believe that this decision is only about the city of Exeter. I beg your Lordships to look again at what the NHS trust and the police authority said in evidence to the Merits Committee about the effects on towns such as Ilfracombe, Holsworthy and Bideford, which can ill afford any cuts for the reasons that I have given. When the noble Baroness, Lady Dean, did her study, it was in the good times. We are not in the good times now; we are in the bad times. For that very reason you have to look afresh at these issues and not ignore the people of the rest of Devon.

I live in Norwich, which, like Exeter, is a cathedral and a university city. It is an anciently established capital of its region and a modern driver of the regional economy. Both cities are significant cultural centres and both contain significant urban deprivation. Both have the experience of many hundreds of years of self-government and matured civic identity. The history of those two cities since 1974 when they were stripped of their county borough status and unitary powers has been, in the view of those cities, an aberration from their proper course. Surely it should be axiomatic that cities of this character, stature, complexity and size should be self-governing. The onus is on those who object to the restoration of self-government to these cities to make their case, and to do so, as my noble friend Lord Whitty has just said, with substantive arguments and not just bureaucratic, procedural or accountancy objections or complaints about the Secretary of State. Certainly, suggestions that it was improper on the part of the Secretary of State to proceed with these orders or that Parliament should not proceed with them are wrong.

The Merits Committee is at pains to stress that it is not the committee’s role to reach a definitive view on whether unitary status is right in these circumstances but rather to draw the special attention of the House to issues that it may wish to take into account in reaching its decisions. Similarly, the Joint Committee on Statutory Instruments draws attention to the judicial review launched by the county councils and other process factors, of which Parliament should be aware, but this is a matter for Parliament to decide. Judicial review can run its course but it should not prevent Parliament from taking its decision. It is significant that the High Court hearings will not be until 28 and 29 April and that the judicial review is not being run in parallel in with the parliamentary process, as has commonly occurred in the past. The timing suggests that the judicial system believes that Parliament should be allowed to exercise its responsibility. I cannot recall an instance when a unitary proposal has not been challenged through judicial review just as tactical challenges have been launched by Norfolk and Devon. Nor can I recall a single instance when judicial review has prevented a unitary organisation from proceeding. It has been suggested by the noble and learned Baroness and the Conservatives that there should be more consultation, but this process has been going on for three years. The Conservative threat to reverse the decision, if they get the opportunity, would prolong that even further. These delays are blighting for the two cities; it is overdue for us to take a decision.

We should debate the real merits of the issue—that is what we should have been debating—but I have heard no explanation this afternoon why the people of Devon and Exeter and Norfolk and Norwich would be worse off if the two cities had unitary status. If anybody can make a convincing case that unitary status for Exeter and Norwich would be detrimental to the people of Devon and Norfolk—

I am extremely grateful to the noble Lord for giving way. I think that I said that the changes, if made, would cost the average band D council tax payer £200 per year more. That is a fairly compelling reason.

The noble Lord brings me to the very point that I was about to make. If he is correct on that, it must follow that Devon has been siphoning off funds from Exeter that should have been used there and that there has been an inequitable distribution of resources within the county. It has been suggested that rural council tax levels would rise in Norwich. If that is so, it is because Norfolk has been draining resources away from Norwich that rightly should have been expended in Norwich but have not been. No; we have seen the attitude that what we have, we hold. We have seen nothing more rational or more generous, and we have certainly not had any explanation of what the unacceptable consequences, of which the noble Lord, Lord MacGregor of Pulham Market, spoke, would be.

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.

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”.

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 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.

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 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 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.

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?

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.

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.

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 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.

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 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.

A number of noble Lords referred to the cancelling of elections, including the noble Lords, Lord Tope and Lord Rennard. It is not unprecedented. The order in March 2008 that established a unitary Bedford similarly cancelled elections there in May 2008. Nor is it correct that the Government have clear legal advice that the order is flawed. There is legal advice about the prospect of judicial review proceedings, but it would be wrong for the House to second-guess the courts. What sort of process would it be for Parliament if we did not proceed with issues because a judicial review was under way?

I thought that the advice of the Permanent Secretary to his Minister was that the likelihood of success if the matter went to judicial review was considerable.

That may be the Permanent Secretary’s view, but should having that view cause us to stop a parliamentary process? This is a democratic process under way in this Chamber and in the other place.

Since the Minister has raised the question of what might happen between a judge and Parliament, I shall ask a question. If the House passes the orders and the judge says that the applicants for judicial review are successful, that will set the orders aside, will it not? Then you will be within a few days of the non-existent local government elections. It is nothing to do with what the judge says, but any litigants—even the Government—need to listen if they are given advice that the real prospect is that they will not succeed.

Yes, of course the Government and the Secretary of State have listened to that. The noble and learned Baroness is right in relation to the elections; she would know better than I would that if the judicial review were successful, the likely consequence is that the orders would be quashed. In relation to the elections that did not take place, the councillors would cease to hold office as a result and vacancies would have to be filled in the normal course of events.

Given the doubts about the legality of the Government’s conduct, have they sought advice from the Attorney-General about it?

My Lords, of course the Government and the Secretary of State have taken appropriate legal advice. The question of the Government acting unlawfully is not one that we accept.

I was trying to deal with the point made by the noble Lord, Lord MacGregor, and others, including the noble Baroness, Lady Miller, about not looking at such matters without taking account of what happens in the rest of the county. I agree. Clearly, there will be implications for local government in the remaining two-tier areas of the county. There should be no direct impact on the remaining district councils as their structures and responsibilities will not change, whereas there will be on the county council administration as its areas of responsibility will be greatly reduced. However, provided that the county council and city council in each case co-operate in the provision of upper-tier services across the county, there should be no negative impact on the standard of those services. Indeed, that presents the opportunity of a win-win situation.

A number of noble Lords referred to the issue of directions and the experience of the department. The department has been in existence for only about four years. I stress that, although it is not common, directions across government departments have happened under previous Administrations—there is nothing unique about this.

In relation to the advice that the Government have received, the Secretary of State considers that on balance there is a reasonable prospect of defending the judicial review brought by Devon and Norfolk county councils.

A number of issues were raised around affordability. There is a danger that the term is used more generally or widely than the criteria suggest, because this is about transitional costs and the period over which they can be repaid.

The noble Lord, Lord Burnett, talked about costs and the implications of proceeding with these matters. It is estimated that implementing a unitary Exeter and Norwich will cost £400,000 over the transitional period. However, we should remember that they will save £6.5 million every year. That is the key reason for our decision to focus on the medium and long term, rather than on short-term administrative implications. The noble Lord asked about consequent hikes in council tax. We have always made it clear that restructuring costs will be met locally, without increasing council tax.

The right reverend Prelate the Bishop of Norwich suggested that the proposals lacked coherence. I welcome his comments highlighting something that is truly important—namely, that the services for the people of the cities and counties are what matter. The unitary proposals will help to improve those services.

The noble Lord, Lord Burnett, said that Total Place is not a good enough reason to allow a unitary Norwich and Exeter. I do not agree, but I do not have time to expand on that. The noble Baroness, Lady Scott, asked why we were not considering issues around Suffolk. The issues are well known, and I will be happy to write to the noble Baroness given time constraints tonight.

The noble Baroness, Lady Shephard, talked about the history of directions. As I said, DCLG has been in existence only since the summer of 2006. The noble Baroness also asked why the Government had legislated to rule the public out of consultations. Our whole approach has been locally driven. The proposals are not imposed by government: they are proposals from councils, which are representative of local people. It is not correct that the Government have legislated to exclude the public. The legislation provides for a consultation with such persons as the Secretary of State considers appropriate. The Government's consultation—this deals with the point raised by the noble Earl, Lord Ferrers—sought views from councils representing local people and stakeholders, made clear that comments were welcome from anyone and asked councils to bring proposals to the attention of their communities.

I will deal with the point about stakeholders made by the noble Earl, Lord Ferrers. The invitation states that for the purposes of consultation, stakeholders shall include all local authorities, the wider public sector, the police, the health service, learning and skills councils, RDAs, the business community and the voluntary and community sectors.

It is time to close. We believe that the people of Exeter and Norwich, and the people in the surrounding county areas, will be best served by councils working in a partnership of equals between the urban core and the rural hinterland. We adopted an approach of carefully assessing each proposal against the five criteria. We gave careful consideration to the circumstances when there were compelling reasons to depart from the presumption that proposals that met the criteria should be implemented and those that did not should not be implemented. There were compelling reasons to depart. Our vision for these cities is that they should have a strong, independent council that has within its hands all the local levers of power necessary for the economic, social and environmental success of the city: a council that is at the heart of a complex network of council and local service providers, and which is able to drive the economic, social and environmental success not only of the city but of the wider county area. I urge noble Lords to vote for the Motion and oppose the amendment.

My Lords, a little over 10 minutes ago the Minister told us that his troops were leaving. My Chief Whip tells me that our troops are staying, so I am inclined—indeed, I am sorely tempted—to reply at least at equal length to all the points that the Minister has made. However, I shall resist that temptation because it simply would not be fair, and the noble Lord, Lord Bassam, is looking at me particularly crossly for suggesting it.

We have debated this matter for nearly three hours. The points have been very well made and there is no need for me to rehearse them now. I think that all those here who have taken part in and listened to the debate know whether they are for or against these orders. I simply want to make some closing remarks to those who are against, and in most cases strongly against, the orders.

My amendment and that of the noble and learned Baroness, Lady Butler-Sloss, are virtually identical. In fact, they are identical, save for two important points. The noble and learned Baroness’s amendment simply regrets the orders that many noble Lords have spent much of the past three hours saying are so wrong. One noble Lord suggested that, if passed, that amendment would delay the Government. It will not delay the Government. That is the whole point—the Government will not take any notice. We have only to look at what happened a week or so ago with the Richmond Park order, when a fatal Motion was lost by seven votes. A non-fatal Motion simply regretting the order was passed by a huge majority and within hours the Government announced, in a statement that I have here, that they would carry on in exactly the way that they had intended. Does anyone believe that, having got to this stage—having gone through the debate that we have tonight—all of a sudden the Government are going to say, “Oh no, sorry, we’ll stop. We’ll pause and reconsider”? Of course they will not; they will carry on.

I want to make my other point as strongly as I can. It is often said that the Conservative Opposition—or the opposition party, which for the time being is the Conservative Party—do not vote on fatal Motions. Since the last general election, there have been 13 fatal Motions. Substantial numbers of Conservative Peers have voted for those fatal Motions on eight occasions. I have the details here and shall read them out because I do not mind how long we take. By substantial, I mean 66 Conservative Peers on one occasion, 62 on another, then 38 and 36 and so on. Those are substantial numbers of Conservative Peers who felt able to vote in support of fatal Motions. If Conservative Peers feel so strongly that these orders are wrong, there is no reason why they should not support my amendment tonight. Of course, that applies even more so to the Cross-Bench Peers.

My Lords, I think noble Lords have heard enough from me and, perhaps, from everyone. I wish to test the opinion of the House.

Motion, as amended, agreed.

Exeter and Devon (Structural Changes) Order 2010

Motion to Approve

Moved By

That the draft order laid before the House on 10 February be approved.

Relevant Documents: 11th Report from the Joint Committee on Statutory Instruments and 12th Report from the Merits Committee.

Amendment to the Motion

Moved by

To leave out from “that” to the end and insert “this House declines to approve the draft Order laid before the House on 10 February because it does not comply with Her Majesty’s Government’s published criteria with respect to affordability of the future structure, without providing more evidence on whether the course proposed is likely to achieve its declared policy objective”.

Amendment to the Motion

Moved by

At end to insert “but this House regrets that Her Majesty’s Government have laid before Parliament the draft Order, which does not comply with the Government’s published criteria with respect to affordability of the future structure, without providing more evidence on whether the course proposed is likely to achieve its declared policy objective; and calls on Her Majesty’s Government not to proceed with the draft Order before conducting further consultation with the residents of Exeter and Devon”.

Amendment agreed.

Motion, as amended, agreed.

House adjourned at 8.37 pm.