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Lords Chamber

Volume 728: debated on Monday 20 June 2011

House of Lords

Monday, 20 June 2011.

Prayers—read by the Lord Bishop of Exeter.

Caste Discrimination

Question

Asked By

To ask Her Majesty’s Government what is their assessment of the finding of the National Institute of Economic and Social Research concerning the existence of caste-based discrimination in the United Kingdom.

My Lords, Ministers have been carefully considering the findings of this report on caste discrimination and the wide range of views expressed by interested parties. The Government’s red tape challenge currently has a three-week spotlight on equalities. This presents people with a further opportunity to express their views on the possible need for caste legislation. We will announce our intentions once we have had sufficient opportunity to analyse the comments from this exercise.

I thank the Minister for her Answer. I appreciate that this report is being given very careful attention. In view of the fact that the UK’s record on racial discrimination is to be examined by the Committee on the Elimination of Racial Discrimination, will the Government bring the report mentioned in the Question to the attention of that committee and will they respond to its recommendation in August 2003 that caste-based discrimination be included in domestic legislation?

First, I commend the noble and right reverend Lord for all that he and my noble friend Lord Avebury have done to flag up this matter. Caste discrimination, like any other form of discrimination, should not be tolerated. He refers to the UN committee, which is reporting in August this year. We are aware that that is likely to flag up caste discrimination. At the moment, as I said, the spotlight is on equalities. The report is being given very serious attention. The national institute report states that evidence suggested that such discrimination was found, but it also makes clear that putting this conclusion beyond categorical doubt is difficult, which is why this report, the evidence around it and the submissions are receiving such attention at the moment.

My Lords, the Equalities Minister told me that the Government would be in a better position to announce their findings on whether to activate the section in the Equality Act on caste discrimination once they had assessed the views that were expressed by stakeholders as part of the red tape challenge, which the noble Baroness has mentioned. As that exercise is about regulations, does my noble friend agree that stakeholders would not know that it was important for them to respond to the challenge until my honourable friend wrote to them? Many of them, including the Anti Caste Discrimination Alliance, have not received the letter, so they will have only a week to respond before the period of consultation ends at the end of this month. Does my noble friend also agree that among the Dalit organisations, there is overwhelming support for caste to be made a protected characteristic under the Act? She will remember that from having heard them in the committee room upstairs when they were first consulted.

I thank my noble friend for that and for his dogged determination to ensure that anyone who is vulnerable will not be discriminated against. I can assure him that officials wrote to 22 caste stakeholders from the pro and anti-legislation lobbies on 10 June, advising them about the red tape challenge and inviting them to participate in the debate by expressing their views on the possible need for caste legislation. That will add to the submissions that are already in.

My Lords, is the Minister aware that one of the disadvantages of not exercising the power given to them by the previous Parliament to include caste discrimination as part of race discrimination is that there might be litigation in this country that relies on, for example, the views of the CERD committee to which she has referred?

I hear what my noble friend Lord Lester says, and I should think that anyone hearing that will quake in their boots. If there is indeed caste discrimination, anyone meting that out needs to be wary. That is echoed in what my noble friend says.

From her general discussions, does the Minister have any idea of the extent to which the relevant community leaders are aware of a problem of caste discrimination? If so, what do they say when asked about it?

My Lords, I think that they are aware of that. Given the debate on the Equality Act and all our discussions over the past few years, it would be a miracle if it had passed them by and they were not aware of it. In my view, all the communities seem to be well aware of the discussion over this. It seems to be generally accepted that caste is there. What is disputed is whether there are practices of discrimination. Whether it is declining or maintained is also disputed.

The red tape challenge is especially important for the Government. However, discrimination is discrimination, and I respectfully suggest that only anti-discrimination legislation would provide real redress for victims.

The noble Baroness makes a cogent point. One of the things that the report sought to identify was whether this could most appropriately be addressed by the legislation or whether it fell outside that. Some issues, such as bullying in schools, may well be dealt with by schools being much more alive to this problem. However, evidence is coming through on both sides about how legislation is required, because this kind of discrimination will not be caught by the current legislation. That is the key in this instance.

Well, there is an interesting one. This is a question that neither the academics nor I can answer. One of the things that is very striking about the issue is how little academic work has yet been done on it. That academic work is increasing and improving, which I welcome.

My Lords, is the Minister aware that there are two major Hindu organisations in this country: the Hindu Forum and the Hindu Council? Will she ensure that those organisations are contacted with a view to seeing how the community in the first instance can look at the issues that have arisen and deal with them as part of the community initiative, and, if that does not work, to see what other actions are necessary?

I know that there is such dialogue, but I will take back his suggestion and urge that further action is taken.

Armed Forces: Foreign Pilot Training

Question

Asked By

To ask Her Majesty’s Government what steps they are taking to fill vacant places in military pilot training programmes with foreign service personnel.

My Lords, first, I am sure that the whole House will wish to join me in offering sincere condolences to the families and friends of Colour Sergeant Kevin Fortuna, 1st Battalion The Rifles, Lieutenant Oliver Augustin, 42 Commando Royal Marines, Marine Samuel Alexander MC, 42 Commando Royal Marines, Corporal Michael Pike, 4th Battalion The Royal Regiment of Scotland, Lance Corporal Martin Gill, 42 Commando Royal Marines, Rifleman Martin Lamb, 1st Battalion The Rifles, Corporal Lloyd Newell, the Parachute Regiment, Craftsman Andrew Found, the Royal Electrical and Mechanical Engineers attached to the Royal Scots Dragoon Guards, and Private Gareth Bellingham, 3rd Battalion The Mercian Regiment, who were all killed recently on operations in Afghanistan. My thoughts are also with the wounded, and I pay tribute to the courage and fortitude with which they face their rehabilitation.

As a result of the strategic defence and security review, the Royal Air Force has reduced its long-term requirement for pilots of all platforms. Consequently, a decision was taken in February to reduce the numbers of UK trainee pilots undergoing the initial phase of flying training. It will take some time to remove the resulting additional spare capacity from the training programme and we are actively seeking to offer any surplus training slots to foreign students.

I would like to associate myself with the remarks of the Minister. I am not sure whether he is aware that I have been on an Armed Forces parliamentary scheme and visited RAF training stations. I have been made aware of the considerable number of training vacancies for fast-jet pilots. Does the Minister agree that when the UK sells military aircraft, it is prudent to have a world-class training facility where affordable places are available to foreign pilots? Does he recognise also the wonderful relationships with foreign pilots that are generated during pilot training, with proven long-term results for diplomatic relations in times of trouble and conflict?

My Lords, I was aware that my noble friend was doing the Armed Forces parliamentary scheme and I very much commend the important work that it does. The Ministry of Defence recognises the value to the country obtained from training pilots from partner countries. We are at the early stage of discussions with the UK defence industry to explore how best to take this issue forward. Supporting the training needs of our partners and allies provides important defence and diplomacy benefits—for example, the involvement of Denmark in operations in Libya—and is also a critical factor in securing contracts for defence export sales, which are worth billions of pounds and thousands of jobs to the UK defence industry.

My Lords, on this side we, too, offer our sincere condolences to the families and friends of Colour Sergeant Kevin Fortuna, Lieutenant Oliver Augustin, Marine Samuel Alexander MC, Corporal Michael Pike, Lance Corporal Martin Gill, Rifleman Martin Lamb, Corporal Lloyd Newell, Craftsman Andrew Found and Private Gareth Bellingham, all of whom were killed recently on active service in Afghanistan. Like the Minister, we pay tribute to those who have been wounded and face lengthy rehabilitation. We have been reminded again this afternoon of the enormous sacrifices being made by the members of our Armed Forces.

The Minister said that the Government were seeking to offer any surplus training slots to foreign trainee pilots. Will such personnel pay the marginal costs of their training or the full economic costs, bearing in mind the additional expenditure that we now face in respect of our operations in Libya? How long will the training of foreign personnel continue—the Minister referred to the time that it would take to remove spare capacity from the training programme—and approximately how many foreign personnel does he expect that we will be training?

My Lords, flying training for foreign students under international defence training is provided at full cost. Training provided by the UK Armed Forces is rightly considered as some of the best in the world. As such, we expect demand to continue. We have no plans for that to diminish. I do not have with me the figures on how many foreign students are trained. I am aware that for this financial year— 2010-11—the requirement was for 155 students in total to be trained. I will write to the noble Lord with the exact figures on foreign students.

My Lords, I should like first to join these Benches in the earlier tribute.

Given that, unfortunately, for the next 10 years or so we are going to be without our own aircraft carrier, can my noble friend tell the House what plans the Government have to maintain carrier training of pilots using French and American aircraft carriers, and what the appropriate financial arrangements are going to be?

My Lords, Royal Air Force and Royal Navy pilots have for a number of years undertaken carrier training with our allies; and, as my noble friend said, we are currently in discussions with the French and the US navies on future training programmes ahead of the Queen Elizabeth carriers entering service. The Royal Navy currently has two pilots training with the US navy. In addition, the RAF and the Royal Navy have five exchange officers serving in the US navy flying the F/A-18 and AV-8B aircraft. As for the financial arrangements, as discussions are ongoing, the financial arrangements are still being considered.

My Lords, I do not think that the Minister has, in a sense, answered the sheer complexity of the last question. Being able to operate a large-deck carrier with fast jets is incredibly complicated. I understand that we have a few pilots training with the Americans and the French, but will he please confirm that we are going to establish a focus, a package of training and all the measures attached, rather like we had for the CSSE when we did this with the Polaris programme, so that we can drive from now until the first large-deck carrier is fully operational? By removing the Harriers, it is very difficult. It needs a real focus, and we need to do something like that.

I can give the noble Lord the information that he wants not just on the pilots but on the whole of the deck-handling operation. We are looking at this very closely with both of our allies.

My Lords, does my noble friend agree that UK-trained foreign pilots will be better able to work alongside our own forces in future conflicts?

My Lords, the European Defence Agency recently awarded helicopter training for six NATO and Partners for Peace organisations to AgustaWestland, which will take place in Wiltshire. Does the Minister agree that this is an excellent role for the EDA and an excellent result? Does he see other opportunities from the EDA for similar training in the United Kingdom?

I thank my noble friend for that question. I am not fully briefed on what we could get from the EDA, but we welcome our foreign friends and allies sending pilots for training over here. We give an excellent service.

Universities: Admission

Question

Asked By

To ask Her Majesty’s Government what measures they have put in place to ensure that people from ethnic minority backgrounds achieve admission to top universities.

My Lords, universities are responsible for their own admissions policies and decisions. The Government are establishing a new framework with increased responsibility on universities to widen participation, including to the most selective institutions, as set out in our guidance to the Director of Fair Access. Ethnicity is one factor which will be considered in access agreements. The proportion of black and minority-ethnic undergraduates in higher education has grown from 16.4 per cent in 2001-02 to 20.4 per cent in 2009-10.

I thank my noble friend for that encouraging Answer. I am sure he will agree with me that many more children from BME backgrounds, and white working-class boys, need to be encouraged to start thinking of their education path to top universities from as early as primary school. The numbers of BME students going to university have increased, but research by the Runnymede Trust has shown that BME students predominantly do not apply to the top 20 leading universities.

At the University of Exeter, where I am chancellor—I declare an interest—very few British-born BME students apply. Research shows that only 8 per cent of BME students who do go to university attend Russell group universities, resulting in less prestigious degrees and lower employment opportunities. Can my noble friend the Minister tell the House what is being done proactively by the Government, by schools and by universities to inspire BME students to apply to top-class universities, as exemplified by Michelle Obama during her visit to Britain last month?

My Lords, I agree with my noble friend that the process ought to start at the earliest possible stage, at primary schools and throughout schooling, to encourage all children to consider this option. I am also grateful to my noble friend for mentioning that other group who ought to be addressed—white working-class males, who are again, sadly, very badly underrepresented.

I would not entirely accept her figures for the more selective universities. The figures I have for the Russell group show that something like 14 per cent of those attending come from an ethnic minority background. Obviously that varies from one institution to another: for fairly obvious reasons, at Queen’s University Belfast it is as low as 2 per cent whereas it is over 50 per cent at the London School of Economics. It varies throughout, but the overall figure for the Russell group is some 14 per cent.

My Lords, I declare an interest as a professor at Imperial College London. Is the Minister aware of the outstanding work done in getting children from ethnic minorities and impoverished backgrounds into that university, a Russell group university, in particular the work of the Reach Out Lab, which allows children aged seven to 18 to do practical work in all forms of science as a way of training them to think about aspirations for a great university? Does the Minister agree that universities could do more to make the relationship between schools and universities seamless by opening their doors and making this kind of work possible across the country?

The noble Lord answers his question for me. The institution to which he refers and to which he is attached has a very good record indeed. I have the figures in front of me: the figure there is some 45 per cent. We offer congratulations to Imperial College on what it is doing. What he said about the work that the higher education institutions themselves should do plays very strongly indeed and I would commend his words to the House and to the entire higher education sector.

To put the answer that my noble friend has given in context, could he very kindly tell us what is the proportion of the population formed by ethnic minorities in the same definition that he has used in relation to the academic world?

It depends what you mean by the same definition. If one takes the general working population, the figure is some 11.1 per cent, compared to that 20.4 per cent that I gave; if one just takes the under-30 age group, which is obviously nearer to those who are at university, the figure is 13.4 per cent. I am afraid I cannot break the figures down any further.

My Lords, I very much welcome the Government’s recent campaign to inform people of the exact nature of the new fees system and the help that will be available to students. However, it would be helpful to know what steps the Government will be taking to assess how effective that campaign has been in reaching all sections of the community, not just ethnic minorities but other unrepresented groups as well, and what steps will then be taken to communicate with those found not to have been reached by the recent campaign?

My Lords, we accept that many people have not quite understood what the Government are proposing. We wish that they would and we will try to educate them in that process, so that they understand that eligible students will not be paying upfront or paying more than they did in the past. They will pay for longer but they will not pay more per year. Obviously, we will do research into what we have done to see just how effective that has been.

Your Lordships’ House will recall that the recent report by the noble Lord, Lord Browne of Madingley, recommended that graduates would begin to pay their loans back only when their earnings reached £21,000 and that interest would be charged at the cost of borrowing to the Government. Will the Minister confirm that the Government are now proposing that the interest rate to be charged after earnings reach £21,000 will be as high as 3 per cent plus RPI? Will he indicate what studies have been carried out on the impact that this will have on admissions from people from ethnic minority backgrounds?

My Lords, the noble Lord asks a large number of questions, which I propose to answer simply. We have broadly followed the recommendations by the noble Lord, Lord Browne, but not entirely, and we draw our own conclusions. But he is quite right to say that we decided that no one would pay until they were earning at least £21,000 a year and that there should be an appropriate level of interest beyond that rate. That was set out in a Statement some six months ago, which was repeated in this House, and is what we shall be ensuring comes to pass with the passage of the relevant clauses in the Education Bill. The noble Lord can also wait for the introduction of the higher education paper which will be published shortly.

Health: Hepatitis C

Question

Asked By

To ask Her Majesty’s Government what assessment they have made of the number of people infected with hepatitis C who remain undiagnosed.

My Lords, to the end of 2009, the latest year for which complete data are currently available, a cumulative total of 79,165 laboratory diagnoses of hepatitis C had been reported to the Health Protection Agency. The HPA advises that the number of laboratory diagnoses made will be higher than this because of underreporting, but the number of undiagnosed individuals is not known.

The Health Protection Agency refers to a very much higher number of people—possibly 250,000—being infected with hepatitis C. That is its estimate, and there are other estimates of up to 450,000. I very much welcome my noble friend’s detailed Answer, but since 1997 the number of cases of hepatitis C reported each year has almost trebled. The majority are still undiagnosed, and I ask that in future there is more systematic and proactive screening of prisoners in prison to ensure that we diagnose more cases.

My noble friend is absolutely right that there is a range of estimates of both the incidence and the prevalence of hepatitis C. I could spend some time explaining why that is, but it is partly to do with the long incubation period of hepatitis C, the symptoms of which do not manifest themselves for many years. My noble friend is also right that prisons tend to be a repository of this condition. In recent years, the story there has been good. The provision of information for prisoners and prison staff on hepatitis C and other blood-borne viruses has increased. There has also been increased access to hepatitis C testing for prisoners. We have had improved access to treatment for prisoners with hepatitis C and to drug treatment generally, which is of course absolutely germane to this condition. I believe that the focus is there, but that there is more to do.

My Lords, can the Minister tell the House how many patients infected with hepatitis C by contaminated NHS blood have since died in consequence?

My Lords, I am sure that the noble Lord will know that precise figures are not available for that group, but I hope he will also recognise that we have taken steps to improve the financial help available to these unfortunate victims of the contaminated blood disaster of the 1970s and 1980s.

My Lords, does the Minister agree that under GMC rules on informed consent, it is not proper to take a sample of blood for another purpose and then to screen that blood for the presence of hepatitis without the consent of the individual? However, does he further agree that for research purposes or for epidemiological research, it is perfectly proper to screen large batches of blood samples taken for other purposes, such as epidemiological research, provided that the results are anonymised?

The noble Lord is quite right that generally speaking there is no problem about using human tissue samples for research purposes where those samples are anonymised. In other circumstances, of course, the Act demands that the principle of consent should apply.

My Lords, obviously there is no general screening programme for hepatitis, and we appreciate the severity of cases such as that involving contaminated blood, which has just been referred to, but can the Minister explain what an ordinary person should be looking for before submitting themselves for screening? It must be advantageous to have such conditions diagnosed early rather than late.

My noble friend is absolutely right that early diagnosis is always a good thing for this condition as it is for many others. We know who the risk groups are, and therefore the important thing is to target screening and testing at those groups. Predominantly, the at-risk groups are injecting drug users or former injecting drug users; they account for well over 80 per cent of cases of hepatitis C. Those groups are the focus of our efforts in primary and community care, and especially in prisons.

My Lords, does the Minister agree that some ethical issues might arise in the mass anonymous screening of blood samples if a treatment was available for the disease that was being screened?

In the case of hepatitis C, treatments recommended by NICE are of course available that, if taken early enough, can dramatically affect the course of the disease. I think we are in danger of straying into legislative territory that is perhaps the occasion for a wider debate as to how, if at all, we might expand the scope of the Human Tissue Act so as to reach those cases that I think the noble Lord is referring to.

My Lords, we all welcomed the Government’s Statement in January announcing increased support for those with hepatitis C. Will the Minister please tell us what progress is being made to deliver the exception from means-testing of the new payments and the provision of prepayment prescription certificates, and which national charities are in receipt of the additional funding of £100,000 to support the victims of hepatitis C and their families?

My Lords, the Caxton Foundation has been established to address the group of hepatitis C victims identified in the Government’s Statement earlier this year: that is, those victims of the contaminated blood disaster who went on to develop hepatitis C. I understand that the foundation will begin to make payments later this year that will include payments to those who are eligible for the free prescriptions service to which she referred.

Localism Bill

Committee (1st Day)

Relevant document: 15th Report from the Delegated Powers Committee.

Amendment 1

Moved by

1: Before Clause 1, insert the following new Clause—

“Purpose of this Act

(1) The purpose of this Act is to promote a political and administrative system and culture which—

(a) is based on the principle that each decision should be made at the lowest practical and effective level, and that where there is a conflict between decisions at a higher or more local level there is a presumption that the local level will prevail unless there are clear and over-riding reasons why it should not;(b) is underpinned by basic rights for all persons and safeguards against arbitrary discrimination against any person;(c) focuses public decision-making on bodies which are elected, representative and accountable;(d) may incorporate minimum standards for the provision of public services that may be established by Parliament, government and elected bodies at a higher level than that at which decisions are made, but otherwise welcomes diversity of provision on the basis of locally determined needs and preferences;(e) includes a restriction against regulations and orders by government and bodies at higher levels than the minimum absolutely necessary;(f) shapes the structures of local government in ways that are designed to facilitate the involvement of local citizens, individually and as members of their communities and neighbourhoods;(g) welcomes and encourages the involvement of local citizens in the design of such structures and participation within them; and(h) encourages the formation of bodies by local citizens in which they may organise to influence public decision-making, take part in processes of local governance and help to provide local services.(2) A public body or public official shall, when acting under the provisions of this Act, have regard to the political and administrative system and culture described in subsection (1).

(3) In subsection (2) “public official” means a government minister or employee, or an employee of any body responsible for making decisions on behalf of the government or a local authority.”

My Lords, as it is the beginning of Committee, I should declare my interests yet again. I am an elected member of Pendle Borough Council, vice-president of the Open Spaces Society and a member of the British Mountaineering Council and its access, conservation and environment group. There may be others, which I shall declare if they arise as the Bill progresses.

Topically and coincidentally, an article by Julian Glover in the Guardian this morning, headed “The coalition still hasn't worked out the principles that bind it together” states:

“Last year's coalition agreement was brilliant at forcing a quick start, but useless as a guide to the government's founding values now the pace is slowing. It provided a to-do list of reform but avoided deep questions that must now be confronted: what is the coalition's attitude to democratic accountability, the role of markets and competition in public service? What does it mean by localism? To what extent should empowerment be accompanied by a harsher willingness to allow people to fail if they do not act? Above all, is the reconstruction and fragmentation of the state ideological rather than a consequence of deficit reduction?”.

Those questions are fundamental to the Bill in front of us.

Localism is not new, although the word “localism” used in this context is fairly new. The first person whom I could find using it was David Blunkett in 2004, and what he said then is not much different from what the Government are saying now.

The amendment seeks to state at the very beginning of the Bill that its purpose is to promote a political and administrative system and culture which is based on localism—localism as defined in the amendment. Proposed new subsection (1)(a) states that it should be based on the principle which in Eurojargon is known as subsidiarity and that,

“there is a presumption that the local level will prevail unless there are clear and over-riding reasons why it should not”.

It is not clear that that presumption is uniformly and consistently applied throughout the Bill. We have some very localist provisions; we then have some very detailed national prescriptions; and they rest side by side as one reads avidly through the 430 pages of the legislation. I do not want to be too critical; I am trying in the amendment to provide the Government with a friendly challenge to look at some of the inconsistencies that may exist and to tell us clearly what their view of localism is.

Proposed new subsection (1)(b) states that localism is,

“underpinned by basic rights for all persons and safeguards against arbitrary discrimination against any person”.

It must not be local majoritarianism; it should be based on the principles of democracy in which basic individual rights are fundamental.

Proposed new subsection (1)(c) states that localism,

“focuses public decision-making on bodies which are elected, representative and accountable”.

All Governments in the past few years have said that they want to decentralise and get away from the controlling hand of Whitehall and Westminster in the detailed way in which it has developed in this country. It is not clear in all cases, either with the previous Government or with this one, that the predominant role of democratically elected authorities is high in their mind; in fact, it is not clear that local government is always held in high regard by the people at the centre. Yet true localism must be based on democracy.

Proposed new subsection (1)(d) deals with the knotty problem of minimum standards. There was considerable and interesting discussion in Committee in the House of Commons as to how localism interacts with a belief that in many areas—certainly, for example, in social care—national government has not only the right but the obligation to lay down minimum standards before local diversity can apply. The question of what those minimum standards should be and in which areas they should apply is fundamental and it is not clear that the Government have given this issue the clear thought required.

Proposed new paragraph (e) seeks to include a restriction against regulations and orders from central government to the minimum absolutely necessary. If the figure in the Bill is 142, as the Local Government Association has calculated—or whatever it is—no one will persuade me that that complies with the requirement for them to be the minimum absolutely necessary. You have only to look at some of them to see that removing them would not cause the whole edifice to collapse.

Proposed new paragraphs (f), (g) and (h) concern local democracy, local involvement and the growing interest and realisation in local government, particularly in the past 10 or 15 years, that the framework for local government in which councils are elected—whether by thirds, every four years or whatever, and then simply get on and do their will without further involvement, often at many stages, by the local population—is no longer the way forward. Local democracy has to involve local citizens, individually and as communities and neighbourhoods, and the system should welcome and encourage that local involvement.

Very often when Governments think it is a good idea for communities to be involved, they do so on the basis that that involvement is different and separate from the system of democratic local government. That will not work. It is absolutely crucial that the system of democratic local government is fundamentally based on involvement and participation by local people. This has to be a genuine involvement, not only the organising of surveys and so on which are written so that they are effectively rigged to get the outcome required.

Proposed new paragraph (h) involves encouraging the formation of bodies by local citizens in which they may organise to influence public decision-making. This reflects the argument of the noble Baroness, Lady Bakewell, at Second Reading when she gave a graphic account of how people had been actively involved in campaigning in her borough in London. However, this cannot always be organised by authorities, local government or national government; it will happen when people want to do it. The important thing for Government is to ensure that the structures make it easy to do and not restrict or block it.

Proposed new subsection (2) is the most important of all. It requires that public bodies and public officials should be under a duty to act in the light of the principles of localism and the points set out in proposed new subsection (1). At the moment that is not the case. People, officials and bodies cannot be challenged because they are behaving in a traditional bureaucratic way—or, at least, not legally challenged because there is no underlying requirement for them to change their culture and the way they do things and to help create a more democratic and better society.

I hope that the Government look favourably at this amendment. I can understand that they might want to change a few of the words. They might think that some of it is rather revolutionary. If they look underneath the surface, they will see that it is highly revolutionary, but it is what this Bill ought to be about and ought to be based on. There are parts of this Bill that are based on this; but there are other very substantial parts, as we will find out as we go through the Bill, which are not. They are still centralised and, even when the proposal has been put forward and can be described as localist, it is top-down localism. It is saying, “You must behave in this way, which we define as localist, because it’s good for you—but we will determine the rules and regulations and the way in which it’s going to work”. That is not localism; it is a new form of top-down government. It may be better than doing everything at central level and not paying attention to local level, but it is not true localism.

As I say, I hope that this friendly challenge to the Government will be well received and that we end up with a Bill that is indeed true localism. I beg to move.

My Lords, the noble Lord, Lord Greaves, has had a long, distinguished and occasionally challenging career—and I say that as someone who served on the same authority for 20 years. I put two points to him. First, would he agree with me that almost everywhere else in Europe, unlike in this country, the principle of subsidiarity refers to the most local level of government—that is, local government— at which a good decision can be taken or policy made? Localism based on community groups and neighbourhoods that are self-forming and sometimes self-selecting are not a version of subsidiarity under the widely used European term.

Secondly, the noble Lord referred to people in the locality and the difficulty of decisions being made above the locality level. How would he envisage that working? I cite two issues to do with planning from my experience in local government. In the 1980s, long-stay mental hospitals were being replaced by local hostels for people to be reintegrated into the community. I faced ferocious public meetings with people who were absolutely determined that it would not happen in their backyard. It was an extremely difficult decision, made worse by the sadness in Ribbleton of three of the people who had spoken out publicly against such hostels coming to me privately and telling me that members of their families had been locked away for decades.

The second planning issue involved a hostel for former prisoners around the corner from where I lived. If the localism that seems to be implicit in this legislation had applied, they would not have had it, and I cannot think of any other community that would have welcomed the proposal. An absolutely ferocious public meeting was held. I was the only member of the planning committee who had given approval to it and who was present at that meeting. It was verbally nasty. When I was out with my children, I was threatened with a beer bottle by a member of the public who had been at the meeting and had been drinking. At the end of the meeting a ferocious woman in a hat bore down on my husband and said, “Is she your wife—can’t you keep her under control?”

That sort of public meeting and those sorts of services are the most intractable. They are very difficult unless a decision and delineation are made so that the general good and the needs of smaller groups can be protected. I know from his background that the noble Lord, Lord Greaves, would sympathise with the need for the provision of both those services for ex-prisoners and former long-stay patients.

My Lords, I look forward to addressing the questions that the noble Baroness, Lady Farrington of Ribbleton, has just raised when we come to the neighbourhood section of the Bill. It is important that for such people, and indeed for Gypsies and others who have traditionally been made unwelcome, we have a system whereby localism does not become exclusion.

I welcome the amendment of the noble Lord, Lord Greaves. My noble friend Lady Hanham may remember that in 2006 my brother, Tim Palmer, published a pamphlet with Policy Exchange called No More Tears. If she has read that, she will realise that I am a considerable radical when it comes to localism—I share his views—and I regard the Bill as a small step on the way. In her reply to the amendment, I hope that at this stage of the Bill we shall have a good exposition of where the Government stand on localism at the moment, which will give us a good context for the rest of these debates.

My Lords, there was much in my noble friend’s speech in moving the amendment with which one could not but agree. I particularly liked his point that there may be too many provisions in the Bill where it appears that the Government are trying to tell local authorities how to exercise their newly granted general power of competence. I look forward to identifying particular points in the Bill and saying, “Look, this is not necessary”.

Where I have had difficulty with my noble friend’s new clause is that it is not going to achieve anything in the direction that some of us would like to see. You have to look at the individual provisions of the Bill if you actually want to reduce the degree of central control or direction of a locally exercisable power. If my noble friend is seeking to oblige the House to look at the Bill with that in mind then his speech will have made a useful contribution, but I am not sure that the provision that he seeks to put in would add anything. The way that one deals with legislation is that one looks at the provisions in the Bill itself and that is what we will spend a large part of the next four weeks doing.

On the interpretation of the Bill, I remind the House that the courts decided long ago, in the case of Pepper v Hart, that if the provisions of a Bill are unclear, the courts are entitled to see what Ministers said in introducing and debating it. I had to downsize my own household when we moved back to London, and I offered around my bound Hansards, which covered well over 40 years, to see whether anyone wanted them. They are all now in the Supreme Court on the other side of Parliament Square. I have not been to look at them but I am told that that is where they are. They did not cost me or the court anything. That is in order that the Supreme Court judges can have in front of them the Hansard reports of what was said by Ministers to be the purpose of the Bill.

Looking at what Ministers can say about this Bill and what is actually in it, one wonders what the purpose of the proposed new clause is. My noble friend made an interesting exposition of a number of points, but it would not be appropriate to add a new clause of this sort when we have eight days of debate in which we will be dealing with the details. I have to say that if my noble friend sought to press his new clause to a Division, I would have some difficulty in supporting him. I hope that he will forgive me.

My Lords, I support the amendment moved by my noble friend Lord Greaves because I believe that defining the principles and the culture of this Bill matters profoundly to our understanding of the debates that we will have on each of its parts. I declare my interest as a member of Newcastle City Council.

The coalition agreement is helpful because it underpins where the Bill has come from. It says:

“The Government believes that it is time for a fundamental shift of power from Westminster to people. We will promote decentralisation and democratic engagement, and we will end the era of top-down government by giving new powers to local councils, communities, neighbourhoods and individuals”.

That is a powerful, clear statement and it should be the test by which we examine the Bill in Committee. However, I think that it would help us to have a closer definition of terms. The definition of “local councils” is clear to us all, because local councils have a statutory role. However, a community can be both a community of interest and a community of place and it is important that we do not confuse the two. Neighbourhoods are clearly places; one or more neighbourhoods, when joined together, make a community. Ultimately, neighbourhoods form the electoral base—the ballot box base—on which democratic decisions can be made. Those neighbourhoods joined together create a ward, through which councillors are elected. As for individuals, these are the people who work in, live in or visit the area, but I think that this predominantly relates to those who have a vote and therefore are residents in their council area.

My noble friend Lord Greaves talked about the importance of the principle of subsidiarity and devolving decision-making to the lowest level possible. I hope that we would all agree with that aim. One of my worries, which I have expressed before in your Lordships’ House, is that we as a country are in grave danger of confusing localism with atomisation. Government and Whitehall departments create thousands upon thousands of little platoons. Those may be in the health service, schools or a whole range of organisations operating at a local level, but they are not co-ordinated by their local council—they are not strategically led by a democratically accountable body. They are run in and out of Whitehall and they are not ultimately accountable to the test that I said should be applied—the ballot box. These issues of principle are vital, which is why I believe that my noble friend’s amendment is exceedingly important. It is about subsidiarity and the power of the ballot box—it may be through referendums or through the election of individuals—but it has to be about reducing, not increasing, the powers of the Secretary of State on local matters.

In Committee, we will come on to an interesting test. In the council tax referendum, people will have the power only to reduce the council’s recommended council tax. With true localism, there would be a power to increase council tax as well as to reduce it—that, too, should be the subject of a referendum if people want it to be. It also implies that we have got a representative system in place in which the ballot box can operate. We do in rural areas, through parish councils. It is a great deal more difficult in urban areas, where the only democratic system based on the ballot box is the ward in which councillors, one or more, have been elected. It is important, as we go through the Bill, to make sure that we tie that democratic accountability through the ballot box to the decisions that are being made. That is particularly important in discussions on planning matters.

Finally, I hope that all Whitehall departments will understand that they have to be integrated into the localism agenda. It will not be enough for DCLG to be the Whitehall department that is pressing the localism agenda along with local councils throughout the country if it then finds that other Whitehall departments wish to retain direct budgetary control and control through the atomisation of public services.

My Lords, I welcome the discussion on this amendment, which gives us an opportunity to consider the guiding principles of this legislation. It is quite clear that there is much confusion in the Bill about what localism is and whether we are being offered localism or greater centralisation. The opportunities to shift power to the people, so to speak, may in fact be giving greater opportunities for those local groups that are already well organised and sufficiently competent to challenge local authorities and other local service providers. Therefore, it is important that we establish some understanding of the principles of the Bill, to try to remove some of those confusions as we consider the detail of the clauses, as we inevitably will—some to a greater extent than others.

I particularly welcome the amendment because, if we are genuinely going to shift power to people, it provides us with an opportunity to consider how we become much more inclusive. Paragraphs (b) and (c) in the proposed new clause offer us the opportunity to consider how we can ensure that all have the opportunity to share in the power that is being shifted to local people.

Secondly, we need to reinforce local democracy. The confusion in the Bill may almost enable us to weaken our current system of local government, whereas we should be looking to strengthen it. Local government is the one area where we have proper accountability, even if it is not as effective as it should be; there is no basis on which we are able to demonstrate that we are seeking to engage with people more, getting them to participate in those local democratic processes. In talking about localism, we miss an opportunity if we do not also look to engage people and strengthen local democracy by getting them to engage in the current processes.

If we are to establish a culture of inclusion as the amendment suggests, it is important that we state these principles right at the heart of the beginning of the Bill, so that we have them as a guide to facilitate our detailed consideration.

My Lords, I welcome the comment of my noble friend Lord Jenkin that the good points made by the noble Lord, Lord Greaves, should be incorporated in the Bill. However, I do not really see the point of putting them in an amendment, although they are extremely important and should be thoroughly examined. As has been said, many seek to define “localism” and we look forward to the government guidance.

I am totally in favour of devolving greater freedom to local authorities and communities and giving them a right to challenge and bid for assets. Those of us who have been involved in local government at different levels for decades know that its self-reliance in making decisions has always been dominated by Whitehall. Surely we should consider favourably and with due justice a bottom-up approach to planning and to making the system clearer, more democratic, more effective and, one hopes, with less red tape. All that surely makes sense.

Of course, with power—that power may be thrust on local authorities to some extent—comes responsibility. We are all aware that local authorities are having a tough time getting to grips with that responsibility at a time of tight budgets. However, nothing concentrates the mind more effectively than revenue restrictions. The Financial Times correctly stated:

“Without revenue, local democracy is hollow”.

Giving more responsibility to locally elected representatives obviously raises many questions, given that local authorities often have to refer to another body for ultimate decision-making. For example, we have a very effective Health Protection Agency, which has the capability to ascertain, investigate and identify outbreaks of infectious food-borne diseases. It acts as a central point of expertise in disease management and its capability is recognised worldwide. The possible loss of such co-ordinating bodies, with the consequent loss of expertise, runs the risk of reducing the ability to monitor and identify outbreaks of food-borne diseases, which have to be reported by local councils. Co-ordinating bodies are key in responding to incidents such as the recent E. coli outbreak in Germany, which it has been suggested was due partly to poor communication between local investigators and a national body. Therefore, we need that link to a central body and we need expertise on the ground to deal with a problem at local level. I hope my noble friend the Minister agrees that the co-ordinating body is essential to deal rapidly with potential disease spread.

My Lords, I support my noble friend’s amendment, because it goes to the heart of the fundamental issue of how our body politic and administrative systems work. The amendment essentially sets out what we want to do in a Bill called the Localism Bill, before we discuss how to do it. That is an important reminder of what we should put in front of those who draft these things, because in this country, unlike many others, when we talk about empowering people, the assumption is that somehow Whitehall has to define every element of it, in particular because it may otherwise be subject to legal challenge. Other countries give a power of competency at a local level and look to those who exercise those powers to defend the manner in which they have done so rather than rely on the crutch of how the national tier has defined what they should do.

By definition, having a Bill of this size that calls itself the Localism Bill illustrates the flaw inherent in our body politic: we do not understand the principle of devolving decision-taking to others or that that decision-taking has to involve devolution of responsibility for the “how”, not just the principle of the “what”. One does not have to have spent much time talking with the Local Government Association or others to realise the many reservations of powers to Ministers that are inherent in the Bill, which is an inch-and-a-half thick. It cannot be right that a Bill that is about empowering local communities has to be defined in that kind of detail, although I suspect that that is not so much a flaw of the Bill but of the system—let us not forget that the Bill amends many other Acts and, if they were all here, I do not think that I could hold the Bill in my hand.

My Lords, I take issue with my noble friend Lord Taylor only to the extent that we should start with not just the “how” but the “why”. It does not matter what you call something, provided you do not then use your term as an excuse for sloppy thinking. That is a danger. It would be easy during our debates on the Bill to say that such-and-such is local or localist, without analysing what that means and what it should mean in each context.

The noble Lord, Lord Jenkin, referred to Pepper v Hart. I must say that it worries me when people who have not been closely involved with our proceedings say, “Parliament clearly must have thought such-and-such”, and one wonders whether Parliament has thought at all about a particular issue.

Representative democracy is so valuable for lots of reasons, but I have written down four: balance, priorities, nuance, and wide objectives. When the noble Baroness, Lady Farrington, spoke about community groups being self-selecting, I thought that she was going to say that they were self-serving—just occasionally, they are and I, too, recognise the examples she gave. The issue of bail hostels precluded my party from taking control of our local authority in 1978. My noble friend Lady Tonge was elected in a by-election shortly afterwards, having failed to be elected at that earlier point. However, the issue was of concern in a community that one should have thought was most sympathetic to the problem that the establishment of the bail hostel was addressing. The centre has a role, but its role is not to protect local people against their own local authority.

The noble Lord, Lord Jenkin, asked what the clause would achieve. It sets criteria against which the detail of the Bill can be tested. Something that is superficially local or localist is not sufficient.

My Lords, I have considerable sympathy with the sentiment behind the proposed new clause. Ever since I was a schoolboy, I have been arguing for devolution in one way or another, and I have not changed. In the past few months, in regard to the boundaries Bill, the police Bill and the Public Bodies Bill, a great deal of the House’s time has been taken up by me arguing devolution points, as I am sure the noble Lord, Lord Taylor of Holbeach, will remember. My sympathies are all with the new clause, but a constitutional issue of immense magnitude is raised by it.

Pepper v Hart, as mentioned by the noble Lord, Lord Jenkin, caused a massive upheaval in the whole concept of interpretation by a court of what was contained in an Act of Parliament. Up until then, the same rule had abided for utterings in an Act of Parliament as for the interpretation of a will. It was the golden rule of interpretation. That was very simple. It was that the strict grammatical meaning of the words should determine the matter unless there was some obvious or latent ambiguity. In other words, it was in any event restricted to solving the problem that arose from an ambiguity. It was not of general content. When Pepper v Hart came along, it did not change that rule; all it did was change the machinery by which one tried to deal with that conflict.

The new clause, whose intentions are admirable, seems to be an attempt to go well beyond that. It is not confined to situations of latent or patent ambiguity but deals with a whole host of general situations. I will be corrected if I am wrong, but it seems to be an attempt to act as if we had a written constitution at the limits of the Bill, and those limits are very wide indeed. But we do not have a written constitution. Therefore, we could have endless argument as to whether there is a patent or latent ambiguity. To speak for a moment of my former occupation, I have no doubt that clever lawyers would seek to persuade courts that there were ambiguities and conflicts where there were none. Here we have a presupposition that one can pretend in legislation that there is a written constitution, as set out in the new clause, when in fact we do not have such.

The new clause is titled “Purpose of this Act”, but the purpose of an Act is set out in its preamble, which is not part of the Act itself. It is very much like the memorandum of a limited company: it sets out the metes and bounds of what can be contained in the legislation. With the best will in the world, the new clause, laudable though it is, would, if carried, create a massive constitutional problem to which there is no real answer.

My Lords, it seems a long time ago now, but I spent 28 years in local government. The noble Lord, Lord Greaves, has done the House a favour in tabling this amendment because it has enabled us to have this useful, fundamental debate before we get into the detail. As I was unable to speak at Second Reading, I should declare myself as a landowner in Essex, in case anyone wishes to raise it at any point.

The noble Lord, Lord Elystan-Morgan, has pointed out the problem with the amendment. There is much in it with which one could agree in principle. I think similarly to the noble Lord that, the more one tries to define localism, the more one is at risk of destroying it. Once you start to spell it out in words of one syllable which ordinary people can understand, you begin to restrict freedom of action. As I understand it, the purpose of localism is to get local matters back into the control of local people as much as one reasonably can. However, the Bill does not tackle the fundamental problem that is faced by all, which is the issue of local government finance. When I was first a Member, my county received less than 50 per cent of its finances from the centre. I remember warning the council in those days of the dangers if that balance shifted. Today, the balance is somewhere near 80 per cent from the centre. Whatever we do in the Bill, there will always be that fundamental weakness: the ability of the centre to control events at a local level because of a lack of financial independence.

If anyone wants to try to interpret the Bill, they should first read this debate. Everything that has been said is appropriate and relevant and it has been very useful to have this discussion. I look forward to hearing what my noble friend on the Front Bench has to say, but I hope that the noble Lord, Lord Greaves, will not take the amendment any further. It seems to me that he has achieved what he wanted in having this debate. If we tried to put this down in writing, I am sure that we could all think of additional words and words that we would prefer not to see, but if an issue came before the courts on this basis, I think we would be giving them an impossible task. Having had the debate, I hope that the matter goes no further.

My Lords, I was very disappointed not to be able to speak at Second Reading as this is a matter very close to my heart. On this occasion, I do not believe I have an interest to declare in that I have never been a local councillor. My family has farming interests in Suffolk, which perhaps I should declare, as that will come up later. Clearly, over many years, I have been involved in local organisations and charities, some of which are declared in my interests.

The amendment has given us an opportunity—particularly those of us who could not speak at Second Reading—to speak on this matter. I am a staunch believer that decisions should be taken at the lowest level. I welcome the Bill and look forward to taking part in the various aspects of it, when we may want to strengthen, improve or alter it slightly. That is the nature of the Bill; it is huge and covers a wide section of specifics.

However, I have slight difficulties, even with this amendment. It is headed “Purpose of this Act”, and proposed new subsection (1)(a) says that,

“there is a presumption that the local level will prevail unless there are clear and over-riding reasons why it should not”.

It does not explain what would happen then or what that would achieve. I do not think that it is appropriate to nitty-gritty one’s way through the amendments at this stage. Various questions need raising on them, word by word and sentence by sentence.

I actually rose to say that, although we have had this worthwhile short debate, I do not believe that my noble friend’s amendment is necessary. The Bill clearly sets out what it wants to do. When we come to the individual clauses within it, there may well be important issues that we want to look at and reflect on in greater detail. At this stage, I want merely to say that while I have sympathy with the amendment, it is not one that I support.

This is the first time I have spoken in Committee and I again declare that I am a councillor in the London Borough of Sutton and a member of its executive. I put my name to my noble friend’s amendment for a very particular reason. I have heard it described as a Second Reading amendment—slightly a contradiction in terms, but I understand what is meant—and it prompts an important debate that we should have at the start of our proceedings.

Unusually, we have a Bill with a one-word title: “localism”. It seems to mean different things to different people and it appears to mean different things in different parts of this Bill. Above all, it seems to mean entirely different things in different parts of the Government. Therefore, my noble friend and I thought that the amendment would prompt a useful Committee-stage debate at the beginning to try to discover between ourselves what we understand by “localism” and where we disagree about it. Of course, neither I nor my noble friend would pretend that this is the ultimate, perfect, absolute definition, but it sets out fully some principles that we believe are important when considering localism. It is not localisation, as I often hear it described. It is not simply decentralisation or devolution.

We have had an interesting debate. Almost every speaker has, in effect, said, “Yes, but”. One or two, notably the noble Lord, Lord Ouseley, welcomed the debate for the right reason—that it sets out what we are trying to do. As others have said, localism is not atomisation. As I said at Second Reading, localism is not populism and it is important to understand that. Alternatively, as someone else said, it is not majority-ism—I do not know whether that is a word or whether I can say it. Local democracy, which is what this is about, is democracy. It is about ensuring that all voices are heard and listened to with equal respect. It is a system and a process, not necessarily one that makes the decisions but one that informs those who are democratically elected and accountable for the decisions. In other words, it is a process that informs the decision-makers. It may be that, in particular circumstances, it is appropriate for those decision-makers to delegate that decision, but it is not simply dumping decisions and abrogating the responsibility that local councillors are elected to take.

After all these years in local government, I would be the very last person in this House to claim that all local councillors and all local government are always perfect and get things right. Of course they do not. There are too many examples, probably run by all parties, where local authorities are not good at engaging with local people and local groups, whether they be geographical or interest groups. This amendment tries to say that that is a very important part of the decision-making process. I shall not deprive my noble friend Lord Greaves from turning the clock back some 20 or so years to that time on Lancashire County Council when he was answering the questions put to him by the noble Baroness, Lady Farrington. However, as she knows, not quite 20 years ago both of us were members of the EU Committee of the Regions, the body set up in 1994 to be the voice of regional and local government. We both have some knowledge and experience of subsidiarity, as practised on the continent but rarely in this country. Subsidiarity in this country seems to stop at national level. We have all argued for many years that if subsidiarity means bottom-up, in simple terms, it should start at the bottom and not be top-down. Devolution is top-down—and is a very good and necessary thing in a centralised state—but subsidiarity should build from the bottom up.

I agree with the noble Baroness that, as in other countries, decision-makers should be informed by their engagement with their local communities in a much better way than is the case now. At issue is the way that they are informed in making their decisions. We need properly accountable and elected people and bodies. All of us who have been councillors for any length of time can cite similar examples to those cited by the noble Baroness, Lady Farrington. I am sure that we have all faced quite strong public opposition. As leader of the council and even in the ward that I represent, I, too, faced such opposition. I will not digress for too long, but I was faced with a similar instance of a mental health hostel being set up in a residential road in my ward. There was initial fear, suspicion, worry and concern among the neighbours. The way in which we approached this was to hold a meeting of residents in somebody's front room. We discussed the issue and went through a lengthy process. In the end, as a result of the engagement, the immediate local community were not just supportive of the proposal but remained very supportive of the house itself and of the people in it, and integrated them as an active part of the community. Of course, it does not always work that way; it is never that easy or simple, but it is part of the answer to how you approach the making of those responsible decisions.

My Lords, does the noble Lord accept that in the cases that he and I cited, that applied, but that in the case of our school for ex-prisoners, pressure was put on the seller of the property when permission had been given, and the seller refused to sell to NACRO?

I am grateful to the noble Baroness. I did not mean to imply that these things are simple and easy and that all you need to do is talk to people and everything will come out right; I am not that naive or simple. I am just saying that the way in which decisions are made is often as important as what the final decision is, and sometimes helps and facilitates the making of those difficult decisions. They need to be made by the appropriate sphere of government that is democratically elected and accountable.

We set out here, at some length, what we believed should be the definition of localism—what we believe it means. We did so in part to see who would agree with us and who would not. We think that these are the criteria on which we should judge the Bill as we go through Committee: that is why we tabled the amendment in Committee, at the beginning. We are saying that these are the criteria by which we should judge whether this part of the Localism Bill reflects what we understand to be localism, and that if it does not meet the criteria perhaps something in the Bill could be improved. We have had a useful, relatively short debate and perhaps have a better understanding at least of what we on these Benches mean by localism. I am not sure quite what noble Lords who made a “yes, but” response understand by localism. As they said, perhaps it will become clear as we go through the various stages of the Bill.

My Lords, I, too, declare an interest as a councillor in Newcastle upon Tyne and as a vice-president of the Local Government Association. A week ago in your Lordships' House, the government Chief Whip lamented the fact that not enough legislation was being debated in Grand Committee. Of course, it would have been quite wrong for this Bill to be assigned to Grand Committee. However, this debate could hardly be better placed than in Grand Committee in the Moses Room. After all, that Room bears a portrait of a majestic, bearded figure bearing tables of stone on which are incised 10 commandments.

This afternoon, the noble Lord, Lord Greaves, comes to us not with 10 commandments but with 10 criteria by which this Bill is to be judged. Try as I might—and I have tried—I cannot find very much to disagree with. It is something like 120 years since Sir William Harcourt, a distinguished Liberal Chancellor of the Exchequer, proclaimed, somewhat optimistically from one point of view, or perhaps pessimistically from another point of view, that, “We are all socialists now”. Nowadays, we are all localist, but that definition of localism is, to put it mildly, somewhat elastic. I think the noble Lord, Lord Greaves, has set out as good a definition as one might reasonably expect. If I had a reservation, it would be that in proposed new subsection (1)(d) in the amendment the reference is to,

“minimum standards for the provision of public services”.

I accept that that would be a partial definition, but I think one needs to look at minimum entitlements in addition to minimum standards. Standards imply provision of a service; entitlements are a somewhat broader concept that would, for example, avoid us reverting to a 19th-century poor law view in which benefits are calculated differentially across the country. Indeed, there is a case for variation, and I have sometimes thought of promoting a society for the preservation of the postcode lottery because it seems to me that localism of any definition implies different choices according to local circumstances. I therefore welcome the thrust of this proposed new clause.

I would not say that it is a better definition, but I would accept it as an additional definition. However, the spirit is shared across the Chamber.

The key to the noble Lord’s amendment is surely the emphasis on representative local democracy. That is what local government is and must be all about. That is what, as we go through this Bill, we shall see is in danger of being significantly undermined, both in the Bill’s provisions and in some of the current policies that are being applied. Representative local democracy is different from government by referendum of the kind that we sometimes see in jurisdictions such as Switzerland or California, but we will debate those matters later.

I think the noble Lord, Lord Shipley, was entirely right to borrow my phrase about the atomisation of local government. There is a real danger in this Bill and in other legislation that is currently being debated in Grand Committee and other places that that will be a feature. He is also right to say that all government departments need to adopt an integrated approach. In that context, it is worth reflecting on what appears to be happening to what is now called community budgeting and was called total place. There is little evidence, it seems to me, certainly based on an Answer that I received from the Minister, that anyone in government, apart from the Department for Communities and Local Government, is taking this very seriously, but it is a serious issue and I certainly wish the Minister well in her efforts to persuade her colleagues to sign up effectively to it. In that context, if we are talking about local government promoted and administered on the lines that the noble Lord’s amendment suggests, we need to look closely at what is happening in that regard.

Having said that, I think there are difficulties in the noble Lord’s amendment as an amendment. The noble Lord, Lord Jenkins, and other noble Lords, including the noble Lord, Lord Elystan-Morgan, have pointed out the—

The noble Lord, Lord Beecham, and I have known each other for a great many years, but perhaps I may establish at the outset of this Committee stage that there is no “s” on the end of my name. I hope that he will forgive my interruption.

I sincerely apologise to the noble Lord. I sometimes felt closer to him than to the former noble Lord who does have an “s” at the end of his name. He and other noble Lords referred to the implications of incorporating this amendment into legislation. There are difficulties in that respect. To refer for one moment to my previous argument about the integration of government, that will not be made any easier by the abolition of government offices, which were a very useful mechanism for two-way information flow between central and local government.

I return to the form of the amendment in a constructive spirit and ever willing to help cement relations on the government Benches between the two partners to this coalition. Bearing in mind, of course, that one of the great localists was Joseph Chamberlain—who started life as a municipal socialist and Liberal and became a Liberal Unionist and very much part of a significant coalition which did great damage to the Liberal Party—it is surely possible to bring the two views together. Without necessarily incorporating the terms of this amendment into the Bill, it would be possible to follow the alternative method implied by the noble Lord, Lord Jenkins—Lord Jenkin—which was for the Minister to make a statement.

If the Minister were to make a statement saying that these are acceptable propositions about localism and, taken together, broadly constitute a reasonable definition of localism, surely that would suffice to meet the test of legality referred to by the noble Lords, Lord Jenkin and Lord Elystan-Morgan. It would reinforce the import of these propositions as criteria against which, if necessary, the legislation and Acts under it might be interpreted—if necessary, in the last resort—by the courts.

I hope and anticipate that the noble Lord will not press his amendment to the vote, but it would be helpful if the Minister at least indicated support for the principles about which there has been very little difference in today’s debate.

My Lords, I thank everybody—it practically is everybody—in this Committee for starting this Bill off so thoughtfully, as the speeches have been today. Mind you, they have been mostly Second Reading speeches rather than a straightforward debate on an amendment. None the less, it has been an interesting and informative time.

It will perhaps not surprise the Committee that I am not going to accept the amendment, nor do I think that it is appropriate from this position to assert that I am happy with the principles underlying this amendment. If I am not careful, if I say that I support it, we could be landed with a series of judicial reviews, the Minister having said that the principles were all absolutely fine—I am not going to do that. I accept that somewhere and in some of them there is the spirit of localism and that is really what we are looking at. There really is no way that one can start a Bill with a purpose such as this because it will never measure out exactly what the purpose of the legislation is, and it rather puts one into a straitjacket for the rest of the debate.

Having said that, perhaps I may move on to the debate. It was suggested that localism is ideological, but it is not—it is extremely practical. For a long time we—certainly those who are in local government, and I declare an interest as I have been in local government—have inveighed against the centre and said that we should have much more powers in local government and be given much more responsibility. That is what the Bill does. Its purpose is to pass down as much as possible to local areas, not only to local government but also to neighbourhoods and communities.

That does not bypass local government. By getting neighbourhoods and communities involved, there is a better and more democratic discussion. Views are better understood and put forward. As for the comments of the noble Baroness, Lady Farrington, on neighbourhoods making decisions, the decisions she mentioned would have been made in conjunction with the local development plan or the strategic plan and could not have been made by a neighbourhood on its own. That is tantamount to understanding that local councils will not be bypassed by what is going on.

Local democracy, by definition, is the involvement of as many people as possible. Too often there is complete disinterest in local areas about what local government is doing because no one believes that the functions belong to local government rather than central government. I do not believe that that will be the case by the time we have finished considering the Bill.

There has been support across the House for the measures in the amendment. My noble friend Lord Lucas said that the Bill represents small steps to localism, and I agree that we are on the way to achieving that. The noble Lord, Lord Shipley, referred to the grave danger of confirming localism by atomisation, although the point may have been raised originally by the noble Lord, Lord Beecham, who described it as involving “little platoons”. But do we really believe that neighbourhoods and communities are little platoons? Do we not believe that they are what make up local areas and communities, and should we be ignoring what they say? The Bill gives the electorate ample opportunity to take part in democracy and make sure that its voice is heard.

I turn to the specific questions. I was asked whether a council tax referendum could be used to increase rather than reduce this tax. The purpose of the council tax referendum is to replace the very unwelcome capping regime which I think we all agree was to the detriment of local decision-making. The council tax referendum would ensure that if the council wishes to put up council tax more than is recommended, it will have to be at the behest of the local community. The noble Lord, Lord Ouseley, mentioned reinforcing local democracy, which again I think I have covered. As we go through, we will see how this reinforces local democracy.

I think that my noble friend Lady Hamwee—although I am not too sure where my noble friends are at the moment and where they are not—also covered the point about representative democracy. My noble friend Lord Dixon-Smith came back to the fundamental debate, which is that by producing such principles there is a risk of destroying what the Bill is trying to do, and I agree with him. The Bill does not discuss local government finance. Indeed, noble Lords know that a review is going on at the moment, so it is not appropriate in this Bill.

I have covered most aspects of what has been raised in the debate. I would only say that I think that the principle of localism is well established. The issue was debated at length during the Bill’s passage through the other place. I do not know that anyone has picked up too much of what that debate was about. It pushes out as far as possible into communities and neighbourhoods, and into the hands of individuals and community groups, but in doing so it does not undermine local democratic principles. Localism means handing power down directly to councils, freeing local government from central and regional control. At other times, it means creating new rights for local communities to become more involved in local affairs, which is what I have been describing as what neighbourhoods and communities can do. In rolling back central direction, it will also be necessary to ensure that local authorities are accountable for all the decisions they take. We considered the Bill’s principles in our Second Reading debate two weeks ago, and I hope that we can now make progress on our scrutiny of the substantive provisions.

Finally, perhaps I may address the question of the amendment raising a couple of risks. I touched on the risk of judicial review proceedings, and I want to underline that by saying that it is our view that judicial proceedings could be brought on the grounds that a decision made under the Bill had been made without regard to the principles. I think that that would be a very retrograde and unfortunate step. An example of that might be if a Secretary of State exercised a power to make secondary legislation in a non-localist way. There is a risk that it could also be used as a guide to the legal meaning of a provision in the Bill, so if in the future there was doubt as to what a provision meant, a court would be able to take account of the purpose of the Bill as set out in this proposed clause. The risks are therefore quite high. I thank my noble friend for introducing the proposed new clause but I regret to tell him that I will not be accepting it.

I wonder if I could raise another point at this stage. At Second Reading I indicated that we would listen to noble Lords’ concerns about shadow mayors and mayors as chief executives. We are keen to build on the common ground and consensus that the Bill has enjoyed. I should therefore like to say at this stage that when we reach the debate on mayoral provisions, the Government will be pleased to support amendments that have the effect of deleting from the Bill mayoral management arrangements; that is, mayors as chief executives and the concept of shadow mayors. In more detail, this means that we will delete mayoral management arrangements and we will be supporting Amendment 57 in the names of my noble friends Lord Jenkin of Roding, Lord Tope, Lady Scott of Needham Market and the noble Lord, Lord Beecham. We will also be supporting Amendments 62A, 66A, 84E, 87A to 87D, 108A and 187 in the names of my noble friends Lord True and Lord Howard of Rising, which complete the changes needed to delete mayoral management arrangements. I should add that deleting these provisions from the Bill will not prevent councils deciding to do away with the non-statutory post of chief executive should they choose to do so. Indeed, the newly elected mayor of Leicester has announced that he is proposing to do just that.

In order to delete shadow mayors from the Bill, we will also support Amendments 69A to 69C, 73A, 74A, 75A, 77A, 77B, 79A, 81A and 84A to 84D, again in the names of my noble friends Lord True and Lord Howard of Rising. It is the Government’s view that these amendments best achieve the removal of these provisions while retaining provisions needed for an effective process for creating city mayors.

I recognise that there are a number of other amendments relating to shadow mayors and mayoral management arrangements. We will not support those as, given the above amendments, they would be unnecessary.

I am sure the Committee will understand that this decision has come about as a result of concerns that have been raised in the Commons and in discussion here at Second Reading. I am sure the Committee will welcome the Government’s decision in these matters.

My Lords, I thank the noble Baroness for her reply in general but, more particularly, for the last part of it. I think there was widespread support for the denouement to the protracted debate over many months about these two—if the noble Baroness will forgive me for saying it—rather absurd propositions, of which, I think in all fairness, Ministers were not necessarily the authors. There has been a remarkable story around whether the proposal for shadow mayors was on or off, with various statements being made by Ministers and then countermanded, but the final outcome will be warmly received. It augurs well, I trust, for the way in which debate on this Bill will be taken forward. We look forward to even more changes in the direction of good sense and local democracy.

Without wishing to prolong the debate, I should like to endorse what the noble Lord, Lord Beecham, has said and to thank my noble friend for the swift acceptance of two of the substantial amendments to which I have put my name on the Marshalled List.

When I had the opportunity to discuss matters very briefly with the Minister’s right honourable friend the Secretary of State, he said that he thought that we were going to be able to reach accommodation on some of the points that had been made at Second Reading. My noble friend has done exactly that, and I express my gratitude.

My Lords, the Minister’s last two announcements are extremely welcome and I am quite prepared to trade my amendment for them. It is good news all round. As the noble Lord, Lord Jenkin, has just said, it bodes well for future debate.

It is only in the House of Lords that the noble Lord, Lord Beecham, or anyone else, would raise in evidence events that took place more than 100 years ago. While the short-term effects of Joe Chamberlain’s and the other Liberal Unionists’ defection was extremely damaging to the Liberal Party, the slightly longer-term result of it was that the Liberals gained their greatest ever victory in the 1906 election, in which Joe Chamberlain and his allies in the Conservative Party were roundly trounced. If we are looking for historical precedents, there is one.

The Liberal Government were returned to power with a smaller majority in both elections of 1910. That is a historical fact. Unfortunately, the First World War then intervened and caused all sorts of bother.

I thank everyone who has taken part in this useful debate, which has set the tone for a lot of the detailed discussion to come. The noble Lord, Lord Jenkin, quite rightly said that the details in the Bill will determine what happens if and when it is passed. The underlying values—or, as he called them, principles—of the Bill and the conflicting principles that many of us see within it will be a continuing theme as we debate the detail, and it is right that we should continue to relate the one to the other.

The noble Lord, Lord Beecham, hit the nail on the head and homed in on the most fundamental part of the amendment: the importance—I do not use the word “primacy”— within any local democratic system of democratically elected local government. We can argue about the structures and whether they are good or bad—about their size and the way they work and so on—but unless there is a presumption that decisions locally will be taken by those who are elected by and accountable to the people in general, the whole system risks becoming anarchic. As we go through the Bill, a recurring theme will be the extent to which what is proposed in it strengthens or undermines local government. That will be absolutely vital.

The noble Baroness, Lady Farrington, raised a fundamental question about what you do when people in a neighbourhood or a community, which are two different concepts—a neighbourhood is a place where people live and a community is the way in which people interact with each other, although they are sometimes, but not always, the same—rise up in a way that you might think is populist, unreasonable or hysterical but which is, nevertheless, in the noble Baroness’s words, ferocious. Those of us who have been around in local government and local campaigning for a long time have all known this and have all seen it. It is very difficult. Without the buttress of democratically elected local government there is no way in which such forces can be resisted unless there is an imposition by bureaucratic bodies from above, which, philosophically and fundamentally, is not the way to do it.

I remember a proposal a few years ago to open a residential home for people suffering from schizophrenia in a former Quaker meeting house. The reaction of the people living in a wide area around it was ferocious. It was a difficult situation but the councillors across the board stood firm, behaved in a reasonable way and gave permission for it. That home is still in operation and no one has a word to say against it. Councillors have to take decisions on the basis of reason and not on the basis of public reaction on every occasion.

This is very difficult just before an election. When we run a council we have a fundamental principle that in the three or four months before an election we never introduce a new traffic calming scheme. This is because everyone is in favour of a traffic calming scheme until it is put in and then everyone finds things wrong with it. However, you sort out the problems and a few months later everything is all right. Another thing you never do is change the arrangements for waste collection and recycling. You do all these things in the summer and well before elections come along. You sort out the problems in a sensible way and everyone then is, hopefully, fairly happy.

There has to be a certain amount of such manipulation, otherwise you cannot do things—at least, you cannot do things and get re-elected. Nevertheless, democratic government is fundamental to it all. We on the Liberal Democrat Benches believe that this is an ideological matter. That is not to say that it is not also a practical matter. The practicalities set out in the Bill relate to how you carry out matters in line with your underlying ideological principles. If it is not ideological, I do not know why it is called “Localism”. “Isms” tend to be ideological. I think “Localism” is a silly name for the Bill. Nevertheless it is the name it has been given. I was musing as to whether we would have a “Conservatism” Bill, or a “Liberalism” Bill, or perhaps a “Conservatism-Liberalism” Bill on the lines of Marxism-Leninism, which I never quite understood. I thought then that perhaps the Finance Bill each year should be called the Optimism Bill.

On that note, I thank all noble Lords for taking part in the debate and look forward to debating some of the more practical things that we will come on to. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Clause 1 : Local authority’s general power of competence

Amendment 2

Moved by

2: Clause 1, page 2, line 1, leave out “or elsewhere”

My Lords, this group might take us a little less time. In moving Amendment 2, I shall speak to Amendment 3, which is in the same group.

These amendments probe in what circumstances a local authority would use the general power to do anything outside the United Kingdom. I do not imagine that local authorities will be encouraged to carry out military adventures in new parts of the Middle East, or indeed anywhere else. What are those things outside the United Kingdom that local authorities cannot do at the moment and which they might want to do under the new general power?

Secondly, I want to probe in what circumstances an authority might want to do anything other than for the benefit of its own area or residents. Surely, local authorities are elected to serve and represent the interests of their own residents and to carry out services in their area. There are already means by which local authorities can do work for other local authorities, for example, and can carry out activities outside their area, but it is invariably with the consent of the local authorities in the areas outside their own area. What is it that the Government think that local authorities might do that they cannot do at the moment outside their area and not for the benefit of their residents? I do not know why residents would want to elect a local authority that spent a lot of its time and energies doing things for other people outside its own area. These are two basic questions. I beg to move.

Perhaps in the absence of any other contribution, I might make a suggestion to the noble Lord. I do not know whether my suggestion will appeal to the Minister, but there will be occasions when a local authority wants to do something, particularly overseas, which might be deemed to be outside its current powers. For example, it might want to do something in collaboration with authorities in the developing world; there might be relationships with a country or locality where help might be given with infrastructure or education. It might be that in a community or urban area there were people whose origins lay abroad, perhaps in the subcontinent or elsewhere, where there was some sort of disaster, and a local authority might wish to make a financial or other contribution.

I am frankly rather surprised that the noble Lord should take such a narrow view of these issues. We play a reasonably prominent role in the affairs of local government internationally—something that I have always personally eschewed, having neither the time nor inclination to travel to or from Strasbourg, Brussels or places further afield. But there are many in local government who do and who make a significant contribution to international co-operation, so I would have thought it was fairly obvious that it would be desirable to widen the possibilities here. Obviously, local councils in exercising any such powers remain answerable to local communities, and sometimes those communities would be among the first to press for action to be taken by the local authority or local government bodies as a whole. I myself, when I was involved in the Local Government Association, was keen to promote capacity-building in the Israeli-Arab municipal sector, for example. The association, through international local government bodies, has helped out in other places where there have been conflicts—Kosovo is a place in point. The noble Lord could be a little more ambitious in what he thinks local government might be able to do in cases that strike individual local authorities or groups of local authorities as ones where the expertise of local government and local communities in the UK might make a contribution. I hope that he will not press his amendment.

Does the noble Lord agree that everything that he has mentioned has taken place and is taking place, and therefore can be done under existing powers? What new projects or activities does he think ought to take place that would require the new general power of competence in these areas?

My Lords, I do not think that it is necessary for me to answer that. We are talking about a general power of competence; the less fettered it is, the better. It may be that individual actions have not been challenged, although at times of international disasters, when suggestions have been made that local authorities should contribute financially towards appeals that have gone out, that has been felt to be outside their powers. I am not suggesting that that would be a common practice but, if it is seen as a priority by a particular local authority, it should be open to that authority to do so.

My Lords, I am tempted to thank the noble Lord on the opposition Benches for answering the question for me. The noble Lord, Lord Beecham, has put his finger absolutely on the button: there are many areas where local government can help overseas. In fact, going back to my own days in local government, I remember well that we gave enormous help to the setting up of local government in a place called Mbale in Uganda. We had exchanges between officers on my council and officers from Mbale. We taught them how to start and set up a rates system and a community charge system. So there is that, as well as the help abroad for people in emergencies. There are all sorts of areas where this power is necessary.

My friend opposite has done well to point out that there are times when this would be valuable, but also that what we are talking about is a general power of competence and, whether or not it was available under the well-being power, it is reiterated under this power to ensure that there is no mistake about it.

Amendment 2 attempts to limit unnecessarily the extent of the general power of competence by restricting the exercise of power to the United Kingdom only. Amendment 3 also attempts to limit unnecessarily the extent of the general power, by requiring that the authority be able to demonstrate that activity has directly benefited the authority, its area or persons resident. If you are benefiting someone or a country abroad with your help, I hope you would also be affecting your residents, who would be glad that you were doing so.

The effect of the amendments is to attempt to turn this into a well-being power. We need to give local authorities confidence in the powers available to them. Rather than grant a power to do specified things, the new power is drafted on the basis that local authorities will be able to do anything that an individual with full capacity can do. That is the general power of competence, and that is the way that it is drafted. We believe that this will give local authorities freedom to act in the interest of their local communities and to generate efficiencies and savings, the benefits of which will be passed on to those communities. I would not be willing to accept the amendment and I hope that the noble Lord will be happy to withdraw it.

My Lords, before my noble friend responds, perhaps I may ask the Minister about Amendment 3. I entirely understand that a local authority should be able to do something that is only indirectly for the benefit of its residents and I understand that the Government might want to make sure that a local authority is not open to a claim that what it is doing is not, even indirectly, for the benefit of its residents. Is that the sort of technical protection that lies behind these words? Surely what a local authority does should be at least indirectly for the benefit of its residents, even if there is disagreement as to whether something is for the benefit of its residents. In the minds of the people who are taking the decisions, that must be the case, must it not? Perhaps this is a technical protection, which I had not understood until the Minister spoke.

My Lords, of course we expect councils to act in the best interests of the communities that they serve, but we do not believe that it is for the Government to dictate what that means. Local authorities are, as we know, accountable through the ballot box and the other provisions of this Bill, not to mention our system of administrative law, which requires the statutory powers for any public authority to be exercised reasonably, in good faith and for proper purposes only. I think that that covers the questions that my noble friend Lady Hamwee has asked and sets into context the provisions in the Bill.

My Lords, I am not sure that I understood that last exchange; I shall read Hansard carefully so that perhaps I will understand it. I am grateful to the Minister for her response and to the noble Lord, Lord Beecham, for assisting her. These were probing amendments—nothing more—and I shall read carefully what has been said. On that basis, I ask leave to withdraw Amendment 2.

Amendment 2 withdrawn.

Amendment 3 not moved.

Clause 1 agreed.

Amendment 4

Moved by

4: After Clause 1, insert the following new Clause—

“Objective of the general power

(1) A local authority shall exercise the power conferred by section 1 with the objective of achieving sustainable development.

(2) In this section “sustainable development” means development that meets the social, economic and environmental needs of the present without compromising the ability of future generations to meet their own needs including the application of the following principles—

(a) living within environmental limits,(b) ensuring a strong, healthy and just society,(c) achieving a sustainable economy,(d) promoting good governance, and(e) using sound science responsibly.”

My Lords, this is an important amendment on sustainable development. There is growing concern that this Government are sidelining sustainable development despite their welcome ambition to be the greenest Government ever. At the moment, there is considerable uncertainty out there as to how sustainable development will be achieved by central and local government and how their commitments and goals will be taken forward. Funding has been withdrawn from the Sustainable Development Commission, which was the watchdog and adviser to the Government on their sustainability goals. Without this body auditing government output across Whitehall, it may be difficult to highlight and address government decisions that do not support the achievement of sustainable development.

In February, Defra released Mainstreaming Sustainable Development—The Government’s Vision and What This Means in Practice. There are concerns that this seeks to redefine sustainable development by placing greater emphasis on the economic pillar, as in the document priority is given to stimulating economic growth and tackling the deficit, both of which are, obviously, important matters. Then in this year’s Budget and the subsequent policy initiatives, the Government made it clear that they are taking forward a pro-growth agenda to address the economic deficit. None of us will disagree that that is required, but we must continue to take urgent and effective action to achieve sustainable development, to reduce our impacts on the natural world and to make the transition to a green economy. Such action must be in all sectors, covering the whole Bill—that is the purpose of the amendment—including the planning system, but not just the planning system, to ensure a consistent and co-ordinated approach.

The delivery of local priorities within a localist agenda that involves local people on a far greater scale than at the moment must continue to be linked with the delivery of larger-than-local national and international priorities. Certain critical goals need a shared approach. Achieving sustainable development is one of them. In 1983, the World Commission on Environment and Development, convened by the UN, was created to address growing concern about the consequences of the accelerating deterioration of the human environment and natural resources across the globe. The outcome of the work, the Brundtland report, Our Common Future, was published in 1987 and provided us with the well known international definition of “sustainable development”. Importantly, the report launched a comprehensive gateway to sustainability which included social, economic, political, institutional and environmental criteria. It established important broad principles which, to this day, have influenced environmental laws and planning in a wide range of countries, including this one.

In this country, in 2005, we adopted the sustainable development strategy, Securing the future. This strategy established the twin goals of living within environmental limits and providing a just society by means of a sustainable economy, good governance and sound science. These five guiding principles of sustainable development are repeated in the amendment. They are intended to underpin all policy and legislation and act as a lens through which all new proposals are viewed.

My fundamental question is whether this is still the view of the present Government. Do the Government accept that this view of sustainable development underpins all their work, not just planning activities? Does sustainable development underpin everything in the Bill? Do the Government still hold to the Brundtland definition and, if not, what is their definition now? Do the Government still accept that sustainable development is a means of balancing economic, social and environmental needs equally and bringing them together? Or is there now to be a presumption for development which is economically sustainable, even if not socially or environmentally sustainable—or less socially and environmentally sustainable than economically sustainable?

That fundamental question lies behind a great deal of current government legislation and activity. The coalition Government have been working on a presumption in favour of sustainable development to be included in the national planning policy framework, the NPPF. A draft of the presumption was released last Wednesday by the Department for Communities and Local Government. There are widespread concerns that the definition of “sustainable development” used for this purpose is significantly different from the Brundtland definition and gives the economy proportionately greater weight than the environmental or social aspects.

This is also a probing amendment. I hope that the Minister will be able to give me satisfactory answers. The more satisfactory they are, the more progress we will make on the Bill. This fundamental matter arises in a number of parts of the Bill, particularly in Part 4, “Community Empowerment”, Part 5, “Planning” and Part 6, “Housing”. I look forward to the Minister’s reply.

My Lords, I welcome this amendment with its intention to remedy what is at least a perceived gap at the Bill’s heart. Without it, or something like it—it may need a bit more work—the Bill does not yet contain an adequate definition of “sustainable development”. In fact, almost no definition of the concept is given in the Bill at all.

In Clause 95 there is a requirement for local authorities responsible for planning—district, county, unitary authorities and others—to co-operate in relation to planning for sustainable development, but little clear indication is given as to what this co-operation will entail or what it will achieve in practice. The notes to the Bill indicate that local planning authorities will also be expected to consider whether to prepare joint local development documents, but again such development is not defined.

As so much of the Bill is about planning, empowerment of local communities and new building, it is perhaps unwise to proceed without an associated statutory description of what sustainability means, particularly in these contexts. The noble Lord, Lord Greaves, has already referred to the most widely accepted and used definition of sustainable development—the Brundtland commission’s statement. That definition is still worth quoting. It says that sustainable development is development which,

“meets the needs of the present without compromising the ability of future generations to meet their own needs”.

It contains within it two key concepts—the concept of needs, particularly the essential needs of the world’s poor, to which overriding priority should be given, and the idea of limitations imposed by the state of technology and social organisations on the environment’s ability to meet present and future needs. This definition of sustainable development has as much to do with spirituality and culture as with the environment and economy—the two categories already mentioned.

A sustainable community has to be one that offers both a positive present and a positive future for all people—economically, environmentally, socially, spiritually and culturally. It is responsible to the needs of all and exercises careful stewardship of a community’s environment and its soul. In short, I suggest that true sustainable development is about sustaining the common good.

In an earlier debate on Clause 1, the noble Lord, Lord Greaves, spoke of the distinction between a neighbourhood and a community, between where people live and how people interact and behave. I suggest that true sustainable development has to do with both. If this Localism Bill is to have real value, it must also have the ability to ask not only who gains but also who may be excluded from the benefit of the ideas and proposals which it contains. Without some coherent definition of sustainable development at its heart, I fear that this may not be so.

My Lords, this is an extremely important amendment. Although my noble friend proposes it as a probing amendment, I hope Ministers may come to recognise that incorporating a clear and balanced definition of sustainable development in the Bill is fundamental to the workings of a Bill that is predicated on sustainable development. It is important to set out this definition in statute and not simply in the proposed national planning policy framework.

I declare my interests in this area: I chair the strategic partnership that is delivering an eco-community in Cornwall, which is all about these issues; I chair the National Housing Federation, which takes an interest in these issues; and I chair in a voluntary capacity the Rural Coalition, which brings together some 14 national bodies with a particular interest in the sustainable development of rural communities, including Britain’s major planning bodies and organisations such as CPRE and CLA. All these bodies have expressed concern about the absence of a proper and balanced definition.

I have taken an interest in this issue for more than 20 years, but did so most particularly when I was asked by the previous Government to carry out a review of rural planning on a non-partisan basis in relation to economic development and housing—the Living Working Countryside report. The first chapter concentrated on the way in which the term “sustainable development” can lead to perverse consequences when people do not use a balanced definition. Too often, developments have been refused because sustainability is seen in purely environmental terms, not in terms of the sustainability of communities and the rural economy. Exactly the same criticism could be made the other way around, if sustainability is seen too often simply in terms of economic development. I share the concerns expressed about the proposed definition.

This issue is not without consequences. It directly filters down to the way in which decisions that profoundly affect the sustainability of communities are taken at the local level. In the review, I said something else that is important here. The sustainability of communities, when we are looking at how they develop, is not about a judgment on whether that community is sustainable, because one might argue that many communities, if started from scratch, would not be created in the form that they are. The question is always: does change contribute to enhancing the economic, social and environmental sustainability of that community, or does it detract from it? It is a moving target and we should not seek perfection before we allow change. It is perfection that we are striving towards—not that we can achieve it at any given moment.

For all these reasons, it is fundamental that Parliament is clear about what we mean by a presumption in favour of sustainable development, and we cannot have that clarity if we do not set out in statute a proper definition of it. The meaning that we may each take may be different. One reason that I rise to speak is that, the more we put on the record what we mean by these issues, the more likely it is that we will get the right consequences. I simply do not believe that we should empower something so fundamental if it is simply part of the planning guidance, rather than the statute itself, and is easily amendable.

It is fundamentally obvious that if we believe that this sustainable development is important to the legislation, if we believe that it is an important principle in how this country should go forward, and if we believe that it is important to how we develop communities, we should at least be clear about what we mean by it. Having been involved in these debates for 20-odd years, I learnt long ago that if one talks simply about sustainable development, a large part of the audience is unlikely to know what you are talking about at all, and the rest of the audience thinks it knows what you are talking about, but if you do not explain it, you are liable to find out that everyone has a completely different idea of it, depending on their particular vested interest.

I regard it as something of an achievement of the Rural Coalition that we bring together such a diverse range of views, which is perhaps best epitomised by the involvement of the CPRE on the one hand and the CLA on the other. We have always agreed that getting the balance right is fundamental, and that it should be set out at this stage in the legislation. While this may be a probing amendment, I hope that we will get from the Minister a commitment to bring something into statute and agree that the definition should be balanced and forward looking about what we can achieve, not simply an assessment of the status quo.

My Lords, this has been an instructive exchange, so far. No one has been able to define sustainable development and, indeed, the Bill does not define it. There is a simple reason for that, because the term “sustainable development” is totally meaningless. It is one of those cant expressions that grew up with the Brundtland report—perhaps a bit earlier; but that report referred to it—and is meant to feel good, but has absolutely no meaning whatever.

The right reverend Prelate attempted to define sustainable development as the type of development that he approves of. He is perfectly entitled to approve of some forms of development more than others, but that is not the sort of thing that you can put in a Bill, and quite rightly so. We live in a developed economy that has been developing for at least 1,000 years. That seems to be pretty sustainable to me. I cannot think what is unsustainable about it. It has also, importantly, led to a considerable rise in living standards among a greatly increased population.

Look at the developing world: that is what they want to do, too. They have great poverty and they want the sort of development that we have had in the developed countries. They say, “Now we are going to do that”. The idea that there is something unsustainable about it is proven to be false by the fact that it has been going on for 1,000 years or more—much more, in fact. The idea that sustainable development has any meaning whatever is clearly nonsense. It is a great pity that the Government put the phrase in the Bill. If they had not, we would not have this ridiculous debate. At least, I commend them on not attempting to define something which has no meaning whatever.

My Lords, before I say anything else, I should probably declare an interest, which I hope that I do not have to declare every time, which is that my wife is a former chairman of Braintree District Council and currently the cabinet member for planning and strategy. I hasten to add that, on this subject, we have not considered our views together, and I am not expressing her opinions—as I do on everything else, of course.

This is an unusual occasion for me. I do not usually find myself tempted to my feet by my noble friend, who is historically rather more robust than I am. I am normally seen as being on the softer side of the party. I have every sympathy what he just said. I will not elaborate, therefore, but I add a second heretical view, which is that, from what I have heard so far today—and I have reservations about parts of the Bill—we are in danger with all these definitional clauses of creating a pure lawyers’ paradise in which every decision is capable of endless judicial review to determine what these meaningless words mean. I do not encourage that.

My Lords, I declare an interest as the leader of a local authority in London. I also thank my noble friend for her earlier comments on shadow mayors, which were extremely welcome. I do not want to come between my noble friends Lord Greaves and Lord Lawson, but I express concern about the way in which the amendment, with its merits or otherwise, is framed. Here, I follow the remarks of my noble friend Lord Newton of Braintree.

The amendment as framed, which requires a local authority to exercise the power, is applied to the core general power of competence at the start of the Bill. That means that everything done by any local authority under the Bill may be subjected to the tests. Many of the tests are desirable—I certainly do not go as far as my noble friend Lord Lawson in his comments on sustainable development, which is in principle an admirable objective—but I fear that, if the amendment is applied to the Bill in general terms, the willingness to use the general power of competence may be tainted by fear of legal action. The fundamental point that I hope that we will pursue is, as I said at Second Reading, that we should do nothing to limit the power of general competence or to discourage local authorities from employing it.

It is a worthy try by my noble friend Lord Greaves, but I hope that if he wants to return to this important principle, it should not, for the reasons expressed by my noble friend Lord Newton, be applied to this part of the Bill.

My Lords, I enjoyed what my noble friend Lord Taylor of Goss Moor said, and I would like to hear more about that, but I hope that we do not embark on a definition in the Bill for something that, in all practical terms, will be impossible to define in practice. Not only will it have the effect described by my noble friend Lord True, but for neighbourhood plans, anything of this sort will make any power that the neighbourhood has completely nugatory because it will always be open to attack by someone who has their own definition and own ways of looking at sustainable development in any particular circumstance. We have an example in east Hampshire where a decision has been taken that sustainable development means that there should be no new development of any sort in the countryside. In other words, to fit in with that strategic objective, there can be no neighbourhood plans because there can be no development. That is all based on sustainable development.

If I may say so, that is precisely why, if we are to have a Bill that makes the definition of sustainable development the whole basis of our planning system, we should say what we mean. It was precisely the issue mentioned by the noble Lord that led me to start my report by saying that we need to ensure that our approach to sustainable development is properly defined as a balance between economic and social environmental interests, is forward looking and is not an assessment of the countryside as unsustainable.

I therefore think that this is a very important thing to get right. I shall listen to the Minister with great interest. If we get it wrong, it has the potential to destroy a very important part of the Bill.

My Lords, in moving the amendment, to which I have added my name, my noble friend made it clear that it is a probing amendment. It might therefore be that the Minister is not about to accept it. If that proves to be the case, I am conscious that the Minister has received considerable advice from behind her that she should not attempt to define sustainable development now or at any time in the future. Therefore, perhaps she could confirm that the Government intend, in the not very distant future, to publish their definition of sustainable development, a definition that will subsequently appear in the national planning policy framework document. If she can confirm that, can she also confirm that it will at least reflect the balanced approach that the amendment seeks to achieve?

My Lords, we should congratulate the noble Lord, Lord Greaves, on giving us an early opportunity, during the course of the Bill, to debate this very important issue. We agree that it is important to enshrine, at an appropriate point in the Bill, a definition of sustainable development and the principles that he has outlined in the amendment. We agree with the definition and with the principles that he has set out. I anticipated that we would have this debate a little later when we got to Part 5 of the Bill, but important points have been made about this not being just about narrow planning; there is a broader dimension to it.

I agree with what the noble Lord said in moving the amendment. There are concerns about sustainable development being sidelined by the Government. He referenced the Budget pronouncements. Clause 124 could be a change in the balance of the assessment of sustainable development, and we have a lack of clarity over the NPPF; indeed, the advisory group’s draft has moved us some way away from what the previous Government had accepted and which I thought was generally accepted as sustainable development.

With some hesitation, I disagree with the noble Lord, Lord Lawson, that sustainable development is a meaningless concept. The fact that we may have had 1,000 years of growth generally in the economy and growing prosperity is fine, but are there not judgments to be made along the way about what that has done to the environment? Certainly in latter years, has not that growth often been achieved by recognising that you have to balance the impact, for example on the environment? I do not believe that it is a meaningless concept.

I agree with the point made by the noble Lord, Lord True, about the framing of the amendment, and I shall come on to that in a moment. There is a real risk that you create a lawyers' paradise. One of the assessments of well-being powers, and why they were not better used, was that lawyers, who were very cautious, got involved and that that precluded the use of the power more extensively than was anticipated at the time. I therefore very much agree with the right reverend Prelate the Bishop of Exeter in his approach to sustainable development, and with the noble Lord, Lord Taylor of Goss Moor. I disagree with the noble Lord, Lord Lawson.

When thinking about the Opposition’s response to this amendment, I considered how it sits with the local authority’s duty to prepare community strategies. That is set down in the Local Government Act 2000. There has hitherto been a requirement to prepare community strategies for improving economic, social and environmental well-being and contributing to the achievement of sustainable development in the UK. I asked the DCLG whether that obligation still exists. It does, but perhaps the Minister will confirm the Government’s intention to repeal the duty to prepare a sustainable community strategy. Instead, the Government have set down light-touch, best-value statutory guidance, on which they are consulting. The consultation document is extremely interesting, and shows about four pages of rubric on one page of a draft definition of “best value statutory guidance”. Only one sentence potentially touches on sustainability. It states:

“Under the duty of best value, therefore, authorities should consider overall value, including environmental and social value, when reviewing service provision”—

in place of the existing obligation to have sustainable community strategies.

The noble Lord, Lord Greaves, said that he wanted something that ran throughout the Bill, but I do not believe his drafting achieves that. Specifically, it states:

“A local authority shall exercise the power conferred by section 1”,

which is the general power. Again, analysis of the well-being power showed that it was not used in preference to statutory powers that local authorities may have. If we saw that replicated with the general power, in a sense what the noble Lord is seeking to achieve here would not capture that.

I understand that this is a probing amendment, and we support its thrust. We certainly want to see those definitions in the Bill and are happy to work with the noble Lord to achieve some refinement to the approach set down in his amendment.

My Lords, I understand that this is a probing amendment and I thank all noble Lords who have taken part in this short debate. The Government are not unsympathetic to the attempt to describe “sustainable development”. In fact, they have already done so on two occasions. They support the Brundtland definition, and their statement on maintaining sustainable development, published in February this year, includes a commitment to embed these principles across government policy. Therefore, it is not only in this Bill that the sustainable development is likely to come about.

We accept that there is a strong relationship between the Government’s approach and the ambitions of this Bill. However, whether we can spell it out in a way that is acceptable on four fronts is probably more difficult. It would put it on to a statutory framework that is a lawyers’ paradise. The expectation and understanding is that local people will be best placed to understand what is right for sustainable development locally, and noble Lords may have become aware of the definitions that have appeared in the consultation on presumption in favour of sustainable development that has just been published.

On the planning system, we believe that there is a presumption in favour of sustainable development at the heart of the new planning system. We will look to local planning authorities to prepare local plans on the basis of objectively assessed development needs and with sufficient flexibility to respond to rapid shifts of economic change. They should approve without delay development proposals that accord with statutory plans—noble Lords opposite mentioned that—and should grant permission where the plan is absent, silent or indeterminate, or where relevant policies are out of date.

That issue is one of planning. Noble Lords also referred to the generality. February’s Statement made clear the Government's view that there are three pillars—the economy, society and the environment—which are interconnected. We recognise that long-term economic growth relies on protecting and enhancing the environmental resources that underpin it, and on paying regard to social needs. Those are the principles of sustainable development that we need to take forward.

I will resist, at least for the moment, having a definition such as that put forward by the noble Lords, Lord Greaves and Lord Tope. If there was ever going to be a definition, we would need to be very clear and sure that it would be legally unchallengeable, because definitions never define the whole process and all the opportunities; sometimes they are restricting rather than helpful. Some of my noble friends behind me may be slightly sad about this. I say to them that in general the Government have some sympathy with sustainable development. As I have indicated, they have already made commitments on the subject. However, I regret to say to the noble Lord, Lord Greaves, that his proposed new clause would not be helpful at this stage.

My Lords, I will speak briefly. I welcome two aspects of what the Minister said. The first is her reiteration of the Government’s support for the principles of sustainable development, which is important. The second is the fact—I have listened carefully and will read Hansard later—that she did not rule out setting out these principles in the Bill. We will have to see whether we can convince the Government to do it. Their open-mindedness at this point is very welcome.

I say to those who think that a thousand years of economic development prove that we do not need sustainable development that in that time some civilisations collapsed as a result of the overuse of their resources; I refer to central America, the desertification of the north African coast and, in my own area of Cornwall, the disappearance of the herring trade. Today we see more profound impacts on the environment, such as the destruction of the rainforests, and we should not sit content in this country and assume, just because until now we have survived quite well when others have not, that we have greater wisdom than civilisations that collapsed before us.

My Lords, again I am grateful to all noble Lords who took part in this debate, which has been slightly enlightening and has taken us forward a little. I am particularly grateful to the right reverend Prelate the Bishop of Exeter and to my noble friend Lord Taylor of Goss Moor for their strong support. As I listened to my noble friend just now, I thought that the greatest economic growth in this country during the past few hundred years was the Industrial Revolution, and how much better that revolution would have been—surely it would not have been stymied in any serious way—if environmental considerations had played a much greater part in development during that period instead of the massive attacks on the physical environment: the quality of air and all the rest of it. It has cost an enormous amount of money to clean it up since. It is not just economic growth, is it? It is the way you do it; it is regulation in ways that protect the environment and finding ways in which economic growth can be environmentally beneficial.

I am afraid that I disagree fundamentally with the noble Lord, Lord Lawson of Blaby. He said that the phrase “sustainable development” is meaningless. I have some sympathy with that part of his argument because I have said that in many ways from the Benches in the other corner of the Chamber on almost every Bill affecting the environment since I came into this House. People have continually been willing to use the phrase “sustainable development” without pinning down what it means. I do not believe that pinning it down would result in a legal nightmare; I think it would result in clarity. Both the previous Government and this Government have been moving towards a much clearer definition of what it means, and that is to be welcomed. I very much welcome the sympathy—perhaps I will get some tea as well, I do not know—which this amendment elicited from the Minister on this occasion. The problem with it is very simple; the Government are now saying on every occasion that there will be a presumption in favour of sustainable development, and it is not possible to keep on saying that without having a fairly clear idea—you can keep on saying it, but it is not sensible—of what it means.

My noble friend Lord Lucas said that he fears that any definition would result in interminable legislation. As my noble friend Lord Taylor said, if there is no definition, that is when interminable legislation is likely. The noble Lord, Lord True, noted that the amendment applies to the core of the Bill, not just to the planning part. That was absolutely deliberate. I understand his point, but it was deliberate because we believe that sustainable development affects far more than simply the functions of local authorities and other bodies in planning.

I do not think I have anything else to say on this. I accept the Minister’s sympathy. I will glow in that sympathy for a short while, and on that basis I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Schedule 1 : General power of competence: consequential amendments

Amendment 5

Moved by

5: Schedule 1, page 188, line 10, leave out paragraphs 2 to 4

My Lords, Amendment 5 is grouped with an amendment from the noble Lord, Lord Wigley. I do not normally take the lead on matters Welsh in your Lordships' House, but there seem to me to be two important issues here. One is the matter in Schedule 1 —why local authorities in Wales are to be deprived of what we are told is going to be a wonderful thing: namely, the new general power of competence. I understand it is because the Welsh Assembly Government have said that they do not want it, but it is often the case in legislation that even if Wales and the Welsh Government do not want to make use of legislation in the short run, they are given a permissive power to adopt later, if they decide to do so, powers that are going to be introduced in England. There are a number of matters in the Bill for which that could be the case, and my question is simply: why is that not being done in this case?

However, there is a more fundamental thing. We often get Bills in which we get tangled up with devolution matters halfway through and have to try to untangle them at that stage. The basic reason for putting down this amendment was to ask the Government whether at this very early stage of the Bill they can make a clear statement on devolution and Wales to explain the basis on which Wales is included, and in many cases not included, in this legislation and how the Bill works in relation to Wales and devolved matters. I beg to move.

My Lords, Amendment 18 stands in my name and is grouped with Amendment 5. Before getting into my own comments, I warm to the latter comments by the noble Lord, Lord Greaves, in proposing Amendment 5, about the very complex model of devolution that we now have for Wales. Scotland has a fairly clear-cut model for which something is devolved or not devolved. In Wales, there are bits of Acts here, there and everywhere that are a nightmare for those who need to interpret them. It is something that the Government might like to look at at some stage in the interests of everyone and of getting some symmetry in the relationships that we have within these islands.

At Second Reading, I said that I would ask questions in Committee on the applicability of Clauses 1 to 8 to Wales. Your Lordships will be aware that local government in Wales is wholly devolved. That was established by the Local Government (Wales) Act 1994, when we were still under the Welsh Office. With the establishment of the National Assembly in 1999, responsibility moved from the Secretary of State to the Assembly. Following the referendum this March, full legislative competence came to the Assembly over these matters. I realise that that was after the Localism Bill had started its passage in another place, and I understand that some adjustments have been made to take that on board.

Amendment 18 is therefore very much a probing amendment. The Explanatory Notes with which we are provided state that Clauses 1 to 8 are relevant to England only. I realise that the notes do not have status in law, but they are none the less important for us in debate and therefore one takes notice of them. Yet Clause 5(8) refers to the effects of these clauses upon Wales. Clause 5(2) provides that:

“the Secretary of State may by order amend, repeal, revoke or disapply”,

statutory provisions if he thinks this may prevent local authorities exercising their general powers of competence in England. If these powers apply to England and Wales, quite serious questions arise about the implications for local government in Wales, and that runs through other parts of this Bill. As Clause 5(8) refers to,

“an order … that has effect in relation to Wales”—

those are the words in the Bill—clearly this is a possibility. Will the Minister give us some indication of the circumstances in which this could apply to Wales—some examples, perhaps, or some issues—and how often it is anticipated that these powers might impact on Wales?

Clause 5(8) also states that the Secretary of State must consult Welsh Ministers before using such powers in a way that impacts on Wales, so I shall press a little more on the meaning of consulting. If consulting allows the UK Minister to agree or disagree with his Welsh counterparts, if he agrees and carries on regardless, does that not undermine the devolution of local government issues to Wales as provided in legislation and as was assumed in the referendum that we have just had? I suggest that if there was provision for requiring a legislative competence Motion to be passed in the Assembly on each such order brought forward by the UK Minister indicating the Assembly’s consent to that, it would at the very least safeguard the devolved powers from being eroded by being overridden from Westminster. Otherwise, what measures do the Government intend to put in place to deal with any such disagreement? This is meant to be a helpful amendment to ensure that the power over local government in Wales is not clawed back to Westminster, and that clarity will be provided for those who have to live with its consequences.

I will briefly address Amendment 5, which was moved by the noble Lord, Lord Greaves, and is also in the name of the noble Lord, Lord Roberts of Llandudno. As things stand, by virtue of Schedule 1, as I interpret it, local government in Wales will continue to retain the power for the promotion of well-being, as laid out in the Local Government Act 2000, even though local authorities in England will be subject to changes under this Bill. Amendment 5 appears to have the effect that changes to local government in England will also apply to local authorities in Wales, but under paragraph 12 of Schedule 7 to the Government of Wales Act 2006 this cannot be done without a legislative competence Motion in the Assembly. The referendum in March confirmed the Assembly’s legislative competence in these matters. Is it the intention, therefore, of the noble Lords, Lord Greaves and Lord Roberts, to re-reserve these powers to Westminster? I would be glad to have the Minister’s comments on this, and indeed on both amendments.

My Lords, a few years ago I had the pleasure and privilege of chairing a review into local public services in Wales. I visited Caernarfon and, after a meeting with the leader of the council and officers of that borough, I sauntered through the streets of Caernarfon. It was an unnerving experience because everyone was, perfectly naturally in that part of Wales, speaking Welsh and I could not understand a word of it. I am bound to say that I have rather the same sensation having heard the noble Lords, Lord Greaves and Lord Wigley, this afternoon. I do not pretend to understand all that they have asked.

I confine myself to one question to the Minister, but perhaps also to your Lordships who have moved and spoken to these amendments: has the Welsh Local Government Association been asked to give a view on these matters? That would have been sensible. I confess to not having done so myself, so I am not in a position to criticise others who may not have. However, it would seem important, at least by the time we get to Report, to have inquired whether the Bill is acceptable to the Welsh Local Government Association or whether it would prefer the amendments moved.

In fact, the Welsh Local Government Association is very exercised about having clarity in this Bill. There is a lack of clarity and it would welcome some clarity on the points that have been raised.

I apologise to the noble Lord opposite for trying to cut him out on the way.

As I was saying before the noble Lord rightly interrupted me, I hope that we will be able to reassure the noble Lord, Lord Wigley. The Government have been asked to amend the Local Government Act 2000 to enable Welsh Ministers to make orders under this particular power rather than them having to ask English Ministers to do so as at present. We are considering that and I hope that I will be able to give the noble Lord a final response on that later.

It might be helpful if I quickly went through how this Bill applies to Wales. I also confirm that we have been in regular contact with the Welsh Assembly Government about the application of the provisions of the Localism Bill to Wales. The devolution extent of provisions in the Bill is set out in the Explanatory Notes, and where provisions do not apply to Wales this reflects the wishes of the Welsh Ministers about whom we have talked.

The following provisions apply to Wales: providing fire and rescue authorities with additional powers— that was by amendment on Commons Report; predetermination; pay accountability; abolishing the duty to promote democracy; repealing the petitions duty; business rate supplement ballots; the discretionary power for local authorities to grant business rate discounts; assets of community value; the community infrastructure levy; major infrastructure projects—the abolition of the IPC; housing reform, particularly homelessness; repairing obligations in leases of seven years or more; the abolition of HIPs; and the abolition of the standards board provisions applied to police authorities in Wales.

There have been two legislative consent Motions in relation to the Localism Bill. First, for provisions relating to local government pay accountability, to the abolition of the duty to promote local democracy, and to the abolition of petitions duties and homelessness duties, a legislative consent Motion was debated and agreed in the Assembly on 8 February. The noble Lord, Lord Wigley, nods his head, so that is clearly right. Secondly, for government amendments relating to the general and charging powers of fire and rescue authorities in Wales and to assets of community value, a further legislative consent Motion was debated and agreed in the Assembly on 14 June.

We are not changing how the well-being power works in Wales. It will continue to act as it always has, and Welsh Ministers will continue to submit proposals to the Secretary of State where they encounter barriers to the exercise of that well-being power. Welsh Ministers were offered the opportunity to have the general power of competence but they decided against it.

The noble Lord, Lord Wigley, spoke to Amendment 18. Although the general power of competence does not apply to Welsh local authorities, in theory it might be possible for Clause 5(1), the barrier-buster power, to be used to amend the law in Wales as it applies to English local authorities. In effect, therefore, the general power of competence can be adopted in future if that is what Wales wants. Although, as I said, the circumstances in which this might happen are considered to be very limited indeed, the requirement to consult Welsh Ministers was introduced to address possible concerns that might arise later about the scope of the power. Once again, that has been agreed with the Welsh Ministers. The amendment seeks to make the condition more onerous by requiring the consent of the Assembly.

I am very grateful to the noble Baroness. If this is just an in-case provision—in case a change in future required this to be exercised—and given the emphasis that she has rightly put on having agreement from Assembly Ministers, what would the circumstances be if, having consulted, there was a disagreement?

I will have to take advice about that because I was not expecting that question. I will write to the noble Lord and not hazard a guess because we might end up offending each other. If I may, I will make sure that he gets an answer to that specific question.

With that explanation, I hope the noble Lord, Lord Wigley, will feel able to withdraw his amendment. I think the noble Lord, Lord Greaves, was very much heading to get the sort of answers that I have now given, so I hope he will feel able to withdraw his amendment on the basis that I have given sufficient information.

My Lords, I am grateful to the Minister for that. I will read it carefully, and I will take advice from people in our group who are more Welsh than I am and see whether they agree with it too. On first hearing, it does sound a fairly straightforward explanation of where we stand in the Bill, which was the purpose of putting down the amendment.

The noble Lord, Lord Wigley, asked me whether I wanted to re-reserve powers. I do not, in any circumstances —this was merely a useful peg to pin a couple of questions on, which have been answered fairly satisfactorily.

The only question that comes to mind listening to the Minister, which she may not be able to answer, is how widely the Welsh Ministers consulted local authorities in Wales on whether they wanted the general power of competence. She may not have that information, but it is an open question that someone might have the answer to.

The noble Lord, Lord Wigley, suggested that the devolution settlement in Scotland was simple. It may be more straightforward than in Wales, but one of the last big Bills in which I was involved was the Marine and Coastal Access Bill in the previous Parliament. The whole relationship with Scotland was an absolute nightmare. It was all down to the details of the way in which the devolution settlement for Scotland affected a whole series of matters in that Bill. However, Scotland is not much affected by this Bill, and perhaps we should be grateful for that.

The Minister’s first remarks on the way in which the Government are thinking about releasing some of the controls on Wales were welcome. If that comes about, I think we would be very much in favour of it. On that basis, I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Schedule 1 agreed.

Clause 2 : Boundaries of the general power

Amendment 6

Moved by

6: Clause 2, page 2, line 13, leave out subsections (1) and (2)

My Lords, I shall speak also to Amendments 7, 8 and 9. In common with the rest of local government, for many years we have pressed to have a general power of competence. I should make clear at the start that we are wholeheartedly in support of this, although I increasingly wonder exactly how much extra difference it will make. I nevertheless welcome it without reservation.

I have no intention of pressing these probing amendments to the vote but want to give the Government an opportunity to place on record a little more clearly the limitations being imposed on that general power; certainly I am not clear on them. Amendments 6 and 9 probe the nature of overlap and the boundaries imposed on the general power by pre-commencement and post-commencement limitations and, in particular, the intentions of the Government in relation to post-commencement limitations. Amendment 8 probes why local authorities should not be able to change their governance arrangements at least to a degree under the general power. These are questions to which we would really like some answers. If Parliament graciously is granting the general power, the fewer limitations the better. We wonder, as we will in later stages of the Bill, why it is necessary to say what local authorities may or may not do once they have that general power. With that, I look forward to hearing the clarification and expansion from the Minister, and I beg to move.

My Lords, I thank my noble friend for his question. The general power is drafted on the basis that local authorities will be able to do anything that an individual might do, other than that which is specifically prohibited. In practice, this means that local authorities will be required to act in accordance with statutory limitations or restrictions. This is not surprising as we would not want local authorities to be completely outside the law.

Clause 2(2) sets out that limitations in legislation apply to the general power but draws a distinction between pre- and post-commencement limitations. Restrictions in post-commencement legislation will apply to the general power only where the drafting of the new legislation is clear that this is the policy intention. Amendment 6 would remove the requirement that local authorities exercising the new power act in accordance with any restrictions. Amendment 9 removes the definitions of post- and pre-commencement limitation from the clause.

Some restrictions on the activities of local authorities are obviously needed—for instance, a council should not have free rein to override the rights of others and these should be set out in the clearest terms—to ensure clarity for local authorities and avoid the uncertainty that has led to legal challenges to local authority powers in the past. That is what these subsections seek to achieve. We cannot require pre-existing limitations to expressly refer to the general power but, where these are found unnecessarily to restrict the general power, they can of course be removed following consultation. Amendment 7 would allow local authorities to decide their own governance arrangements and Amendment 8 will allow local authorities to use the general power to further contract out its functions.

We believe that it would be inappropriate that local authorities should be entirely free to change their governance arrangements. The Government set the overall governing structures of local authorities while still providing them with sufficient flexibility to decide on the most appropriate arrangement for their individual circumstances. This ensures democratic accountability and that transparent and workable arrangements are put in place. Arrangements for discharge of functions remain subject to existing legislation. Contracting out of functions will continue to be permitted in specific cases. The noble Lord asked specifically why local government should not be able just to make its own decisions about its governance. The answer is that the Government are right to be able to set the overall governing structures of each local authority.

I am puzzled by the answer about contracting out. Is not what is important that a local authority ensures that a particular service is delivered, rather than how it delivers it?

My Lords, contracting out is clearly one of the ways in which a local authority can carry out its services but it will still be subject to the Deregulation and Contracting Out Act 1994. Those provisions are not being repealed, so they will continue to be part of the legislative control that will be maintained on the general power.

I am grateful to the Minister for her reply, which I will read with great interest tomorrow. I am still a little puzzled about the restrictions on the governance, to which we will come at a later stage. If I understood the Minister correctly, she said that the Government felt that it was right to have some restrictions on what local authorities could do in their governance arrangements. I wish that I had the quote with me but I recall that, in the August edition of Total Politics, the Secretary of State said that he did not care what system of governance local councils have. He even said that they could have a choral system and sing sea shanties for all he cared, provided only that the system of government was efficient, transparent and accountable—three criteria to which every one of us would agree. Therefore, I am still a little puzzled as to why the Government feel that it is necessary to restrict a general power of competence in this area. Nevertheless, we will no doubt get to this in the later stages of this Bill. In the mean time, I beg leave to withdraw Amendment 6.

Amendment 6 withdrawn.

Amendments 7 to 9 not moved.

Clause 2 agreed.

Clause 3 : Limits on charging in exercise of general power

Amendment 10

Moved by

10: Clause 3, page 3, line 13, leave out “, or could be done,”

My Lords, Amendment 10 stands in my name and that of the noble Lord, Lord Greaves, as does Amendment 11 where our names are reversed but we are as one, as always. These probing amendments are simply to ask the Government to explain more fully—for instance, as regards Amendment 10—the meaning of “or could be done”, so that we can understand better what this overlap of power means and what power the local authority is using that is not the general power.

Amendment 11 causes me a little more concern, not least because among my responsibilities on my council is that for the provision of leisure services, and therefore I particularly want to understand a little better than I do at the moment what exactly the Government mean in suggesting that no local authority should ever make a year-on-year surplus. If some parts of our leisure services were not able to make a profit, that would have quite a serious effect on my local authority and, I suspect, on some others. Perhaps I do not fully understand the provision, so I look forward to an explanation from the Minister of exactly what is meant by it. I beg to move.

My Lords, I endorse the amendments and the questions that the noble Lord, Lord Tope, has asked because it is far from clear what the import of these provisions will be, particularly in relation to charging. Do the costs of provision allow for just the basic costs or would they include the cost of replacement, renewal, training and reinvestment? The definition in the Bill seems very narrow. Perhaps the Minister would agree to take it away and look at it. I do not think that there is a lot between us on this. We on this side are not seeking, and nor do I think is the noble Lord, to encourage a position where the provision of a service is translated into a commercial enterprise, but the boundaries are perhaps less obvious than they might first appear. I should have thought it would be possible to reach an accommodation that gives sufficient tolerance to allow a surplus to be reinvested into the service as opposed to something that might be distributed elsewhere.

My Lords, “the costs of provision”, the term used in Clause 3(3), could mean only the direct costs of provision or it might mean the indirect, back office costs and so on. Can the Minister help me on the exact import of the term? My second question concerns how this provision fits with Clause 4, which deals with doing things for a commercial purpose. Is there some sort of provision that falls short of doing things for a commercial purpose but which is outlawed by Clause 3(3)?

My Lords, the answer to that will have to come in a note, I am afraid, because I am not clear about the relationship between the two. I will make sure that my noble friend has a reply to her questions so that she may return to the point on Report if she so wishes.

With regard to the provision of leisure services, which was the specific area raised by the noble Lord, Lord Tope, those services are subject to separate powers to charge, so they are unaffected by the general power by virtue of Clause 3(2)(c). In other words, these services once again come under previous legislation and therefore cannot be subject to this legislation. I think that this is going to be the answer that we will give to a number of these issues, where the general power of competence is restricted by previous legislation which is not being amended or annulled. I hope that that answers the question.

My Lords, I am grateful to the Minister for her answer, but I am bound to say that I am not any wiser than before. I have used leisure services as an example since it happens to be one for which I am responsible, but perhaps it was the wrong example, which is one of the troubles with using examples. Frankly, I am no clearer about the meaning of this provision and what restrictions it would bring about.

I can see from my raised position that the noble Lord, Lord Beecham, wishes to speak.

Perhaps the noble Lord could offer the Minister the example of a meals on wheels service that an authority might provide instead of, say, leisure services.

Indeed, I am happy to offer the Minister the example of a meals on wheels service, which has just come to mind as possibly a more appropriate example. I would be grateful if she could elucidate a little more because I see that I am not the only noble Lord in the Committee who has failed wholly to understand it. If it is not possible for her to do so today, I am sure that she will write to us, but if she is able to be a little clearer about what is covered rather than what is not covered by this provision, I would be grateful.

My Lords, I will try to be a little more helpful. Part of the answer is that the Government believe that a local authority service should not make a surplus year on year. I think that that was one of the points raised earlier. By providing a power to charge for discretionary services, the Government’s aim is to encourage authorities to provide the sort of services that they would otherwise decide not to provide or improve at all because they cannot justify or afford providing them for free or improving them. I do not think that that actually answers the question, so I am going to write to the noble Lord before the next stage.

Before my noble friend responds, the crucial question that comes to mind is this: if the provision as it is in the Bill is passed, does it change the existing situation?

The existing situation is that current legislation limits what can be done, and this continues to limit it. Under the general power, if it is not restricted by current legislation, then it is permissive.

I am grateful to the Minister for her offer to write, which it is hoped will clarify the situation. I might suggest that if we are all struggling a bit with what is in the Bill, perhaps the drafting is not as clear as it should be, and that is something on which we shall all have to reflect. In the mean time, I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

Amendment 11 not moved.

Clause 3 agreed.

Clause 4 : Limits on doing things for commercial purpose in exercise of general power

Debate on whether Clause 4 should stand part of the Bill.

I did not give notice of my intention to ask a question about Clause 4, but I have listened to the discussion on the previous group of amendments with some interest. Clause 4(1) gives me a certain amount of anxiety. The provision describes,

“power on a local authority to do things for a commercial purpose only if they are things which the authority may, in exercise of the general power, do otherwise than for a commercial purpose”.

Does that really just mean that if it is illegal to do it otherwise, they may not do it for a commercial purpose, or is there some inwardness here which perhaps I have not appreciated? It sounds almost tautologous. If a local authority cannot do something, presumably it cannot do it whether for a commercial purpose or otherwise, in which case why put it in the Bill? If there are differences or some distinction is being drawn here, I would be most grateful if my noble friend could explain it to me.

My Lords, I want to join this brief exchange because I am developing an increasing sense of Alice in Wonderland. It feels as though we are operating in two worlds: the old world in which local authorities were only allowed to do things that were in statute, and the new world in which they are free to do anything unless they are barred. It is beginning to feel, in the context of this debate and future debates, that there is a real problem about being caught in the middle where local authorities will be stopped from doing a lot of the things that previous legislation allowed them to do. I am sorry, but I find it difficult to express the point, but I am sure that noble Lords are beginning to get a sense of what I mean. The question of how significant the general power really is, if local authorities are continually hampered by previous legislation, will become very important. It is an issue to which we will keep coming back.

My Lords, Clause 4(1) provides that an authority may,

“do things for a commercial purpose”;

that is, to trade under the general power, while subsection (2) provides that if an authority is doing something for a commercial purpose, it must be carried out “through a company”. If an authority wishes to trade, under subsection (1) it can do so, but if it wants to do something else for a commercial purpose, it must be carried out through a company. It is not trading, rather it is presumably providing a service of some sort, and that must be done through a company.

I, too, am slightly confused. I remember sitting in the Minister’s seat when we were discussing the Greater London Authority Bill—I can see smiles of remembrance in turning to the Box. When asked a direct question by the noble Baroness, Lady Hamwee, I remember seeing one person in the Box nod and another shake their head. I should like a little more clarity than that. Examples of trading would be interesting. If a parks department was selling surplus plants, would that be trading? It is that sort of thing that I would like to know in a written response from the Minister. I hope that she will accept, given my earlier example, that it is not a criticism of her reply.

Clause 4 agreed.

Clause 5 : Powers to make supplemental provision

Amendment 12

Moved by

12: Clause 5, page 4, line 10, leave out subsection (3)

My Lords, this is an important clause. It is almost a case of the Secretary of State giveth and the Secretary of State may take away, and there are some significant concerns about it.

The clause begins with what I think is intended to be a helpful provision, Clause 5(1), where if the Secretary of State thinks that a statutory provision may prevent or restrict an authority exercising the general power, he may by order amend, repeal, revoke or disapply it. Following debate in another place, some limitations on the exercise of that power under subsection (1) are set out in Clause 6. However, there remains real concern about much of the legislation that might be disapplied. That is certainly one key provision to which I will return.

There are problems also in other parts of the clause. Subsection (2) deals with the position where if the Secretary of State “thinks”—it is odd that that word is used in legislation, but so be it—that the general power is overlapped by another power then he may by order amend, repeal, revoke or disapply any statutory provision, whenever passed or made. In respect of that provision, the Delegated Powers Committee has expressed significant reservations. I refer to paragraph 17 of its report on this part of the Bill, which states:

“Where this power is exercised in the same instrument as the power in clause 5(1), the procedures applicable to orders under clause 5(1) apply. But where the power is exercised separately, the order is, despite being the exercise of a Henry VIII power, subject only to negative procedure”.

The committee was not persuaded by the memorandum that the case had been made for a departure from the normal presumption that the power should be subject to affirmative procedure. It did not think that it should be displaced and recommended that,

“orders under clause 5(2) which amend Acts should, where not combined with orders under clause 5(1), be subject to affirmative procedure”.

I would be grateful if the Minister could indicate whether the Government are prepared to accept that recommendation, or, if a conclusion on that has not been reached, whether she would in due course provide a view.

The next two subsections also provide very wide powers for the Secretary of State. Subsection (4) states that he may,

“by order provide for the exercise of the general power by local authorities to be subject to conditions, whether generally or in relation to doing anything specified, or of a description specified, in the order”.

In other words, the general power of competence may be qualified significantly simply by order. Subsection (3) states that the Secretary of State may prevent local authorities doing anything which is specified, or is of a description specified, in the order.

Those are two substantial qualifications. The Secretary of State can, effectively at a stroke, by order cut down the power of general competence, disapply it completely in relation to activities which he considers should not be carried out or make them subject to conditions. On that point the Delegated Powers Committee commented:

“We do not consider that this is justified. We recommend that orders under clause 5(3) amending earlier orders so as to extend the earlier order to other authorities should be subject to the affirmative procedure. This applies equally to orders under clause 5(4)”.

Again, I would ask the Minister to indicate the Government’s response—if she can, today—to the committee’s view.

Reverting to the dispensing power with which Clause 5(1) provides the Secretary of State and acknowledging that the Government sought to clarify the position in what is now Clause 6, I nevertheless point out, as does Amendment 14, that there are many Acts of Parliament which could under the Bill as it stands see their impact significantly diluted by a dispensation on authorities no longer to have to comply with duties that are imposed on them. I shall not, of course, read out the long list, but matters affected could include those relating to equalities—about which the Equality and Human Rights Commission has expressed clear views—the Chronically Sick and Disabled Persons Act, the Public Health Act, environmental legislation and much else besides. As indicated, all that would be required in terms of process for this dispensing power to be exercised would be an order, which your Lordships might think is not satisfactory in the context of the conflict that would then arise with the very principle of the power of general competence which, like the noble Lord, Lord Tope, I welcome. I share with him the qualification that one does not quite know how far it extends present powers, but it is nevertheless a welcome indication of the Government’s overall approach.

In addition to those significant reservations, there are questions arising under other amendments that I propose in relation to consultation. Amendment 15 suggests that all local authorities which may be affected by an order that might be contemplated under previous provisions should be consulted, not merely those which the Secretary of State may select. In addition, two further groups should be consulted: persons or organisations representing local government, including organisations representing members of staff of local authorities, who would clearly have an interest in this matter, as well as such other persons as the Secretary of State considers appropriate. These would be, I suggest, fairly straightforward matters, and I would hope that the Minister felt able to accept those suggestions.

In addition, Amendments 22 and 23 are based on, or certainly reflect, submissions made by a number of bodies, including the Equality and Diversity Forum. The amendments seek to insert some safeguards. Amendment 22 provides that,

“the policy objective intended to be secured by the provisions is necessary because it could not be satisfactorily secured other than by the provision proposed”.

So there would be a greater onus on the Secretary of State to satisfy that condition. Amendment 23 seeks to add that,

“the provision does not relate to any statutory measure having constitutional significance, including, but not limited to, the Human Rights Act 1998”.

Both proposals are made by the Equality and Diversity Forum, which represents a wide range of national and non-governmental organisations. In its briefing material it welcomes the Government’s proposals for the creation of the big society and the decentralisation of power, as it puts it, but states that it is very concerned about the far-reaching powers set out in Clause 5 that,

“permit the Minister by order to ‘amend, repeal, revoke or disapply’ any statutory provision that he thinks ‘prevents or restricts local authorities from exercising a general power’”.

In its view,

“such extensive powers could be used to revoke or repeal a number of important statutory provisions, such as the Public Sector Equality Duty created by the 2010 Equality Act, with minimal parliamentary scrutiny”.

It continues:

“This has to be seen in the context of the red tape challenge website which proposes the removal of the whole of the Equality Act 2010 on the basis that it is a ‘burden on business’”.

Perhaps when she replies the Minister will tell us how that consultation exercise is going and what the weight of demand is for change to the statutory requirements that have been, as it were, put up for review or possible abolition.

In welcoming new Clause 6, the Equality and Diversity Forum, as I say, finds that it does not go far enough.

Taking the Government at their word, one anticipates that they would wish to see the general power as unfettered as possible. These provisions in the Bill, unless amended, would leave too much power in the hands of the Secretary of State of the day effectively to curtail the general power of competence on the basis of little protection in the way of scrutiny by Parliament. At the very least, as the Delegated Powers Committee suggests, there should be an affirmative procedure for any order to be made. This ought to follow, as these amendments suggest, a proper and thorough consultation process before any disapplying orders are made and before conditions are laid down, let alone the hugely overriding provision in Clause 5(3) which would prevent local authorities doing anything described or specified in the order.

It is a wide-ranging power effectively to cripple the exercise of the power of general competence. I cannot believe that that is intended, but that is what the drafting suggests. Again, I hope that the Minister will take this away and enter into further discussions about this strange contradiction to the thrust of the part of the Bill we are now discussing.

My Lords, I have Amendments 16 and 17 in this group and, because of the usual vagaries of grouping, I have two amendments in the next group which are either identical or of identical import to Amendments 22 and 23 in this group: Amendment 22 is effectively the same as my Amendment 21 in the next group and Amendment 23 is effectively my Amendment 25 in the next group. I shall therefore speak to the two amendments in this group and not to those two of my amendments when we get to the next group.

Amendments 16 and 17 relate to the process of consultation. Amendment 16 seeks to add a further category to the three categories already in the Bill, which at Clause 5(7) states:

“Before making an order under subsection (1), (2), (3) or (4) the Secretary of State must consult—such local authorities … such representatives of local government, and … such other persons (if any), as the Secretary of State considers appropriate”.

I seek to add to that the words,

“such persons who are representative of interests substantially affected by the proposal”.

Clause 5(7) currently requires the Secretary of State to consult local authorities, representatives of local government and such other persons, if any, as he considers appropriate. Amendment 16 would require the Secretary of State to consult the additional category I have stated.

It is important that the Secretary of State should be required to consult with those who could potentially lose the benefit of statutory protection, whatever it may be, before the provision in question is repealed or amended. The amendment closely reflects the consultation requirements in Section 13(1)(a) of the Legislative and Regulatory Reform Act 2006, on which it is based, and also Clause 10(1)(b) of the Public Bodies Bill of blessed memory. In both cases the requirement to consult representatives of those substantially affected is additional to the duty to consult such other persons as the Secretary of State considers appropriate. My question is: why the change in this Bill compared with, particularly, the Legislative and Regulatory Reform Act 2006?

Amendment 17 seeks to remove the words “if any”. Those words appear to have been added to this Bill when compared with the existing legislation on which it is based. In the spirit that the Bill is too long already, I offer to take out two little words. More seriously, what difference in meaning is created by the addition of these words when compared with the existing legislation? That is the kind of question you get from people like me who are suspicious that any change is for a reason and not on a whim.

The noble Lord, Lord Beecham, referred to his Amendments 22 and 23; as I have said, my Amendments 21 and 25 are of identical meaning. The noble Lord referred to the red tape challenge. The Government seem to have a knack for totally unnecessary major public relations disasters. It is a good idea to remove red tape when it is not necessary, but the huge scale and breadth of the Acts of Parliament and regulations which are being churned out, month by month, on the different areas of the red tape challenge are a recipe for many people becoming concerned, jumping up and down and mounting campaigns which one hopes will be largely unnecessary when the final result comes out.

Having made that comment, I shall devote attention to the amendments. Amendment 21 to Clause 6(2) sets out a number of conditions that have to be met before the Secretary of State can make an order under Clause 5(1). Amendment 22, as moved by the noble Lord, Lord Beecham, would add a further condition—

To be a little bit pedantic, I am perfectly happy to answer those questions, but I think we are on the seventh group of amendments, with Amendments 12 to 17 to Clause 5, and Amendments 22 and 23. The noble Lord has just referred to Amendments 20 and 21, which I think come in the next group. It may be more convenient if they could be considered there.

I apologise. I shall explain it all again, because there is a mess-up in the groupings and it is best to discuss the questions under the amendments tabled by the noble Lord, Lord Beecham, rather than under mine that come later. I keep referring to mine because my notes obviously refer to them.

If my noble friend objected to the grouping and thought that the amendments should have been put together differently, he had plenty of opportunity over the weekend to put that to the Government Whips. As it is, surely to goodness he must debate those amendments in the group in which they are listed on the amendment paper—otherwise it becomes extremely confusing.

I agree entirely, except that I did make changes to the grouping. As a result of this, we are where we are. I attempted to make sense of it, but in the end it did not come out that way. Let me be absolutely clear: I am talking to the two amendments in the group that starts with Amendment 12 as moved by the noble Lord, Lord Beecham. I apologise for the confusion in the numbers, which is entirely in my head and in my notes. I shall attempt to be much clearer.

I am talking now about Amendment 22, which is in the group that we are debating. The amendment, which was tabled by the noble Lord, Lord Beecham, and which I entirely support, reflects the analogous condition in Section 3(2)(a) of the Legislative and Regulatory Reform Act 2006. This additional safeguard is needed and is not covered by the other conditions—for example, the requirement for proportionality. The reason is that Clause 6(2)(a) refers to the proportionality of the “effect of the provision”, while Amendment 22 relates to the means of achieving that objective. The Secretary of State would have to be satisfied that the particular amendment or repeal proposed is the only way of satisfactorily securing the objective; it would require him to consider whether there were other possibilities—for example, by issuing guidance to local authorities or by amending or repealing a less significant provision. This is an extremely complicated matter. I do not know whether the Minister will be able to give us an answer that can satisfy us all, but again perhaps further discussion, either by letter or in person, can take place.

Amendment 23, which relates to the Human Rights Act and similar Acts, would add a further condition to Clause 6(2). Section 8 of the Legislative and Regulatory Reform Act 2006 makes a specific exception for the Human Rights Act. The Minister in the House of Commons stated that Clause 6(2)(e) would preclude the making of an order repealing the Human Rights Act or any part of it, but that paragraph relates to the provision—in other words, what the order proposes to do. This is different from whether the statutory provision itself, which is the subject of the order, is of “constitutional significance”. The point is that the 2006 Act recognises that distinction. The Bill as it stands does not recognise it and the question is why not. Why the change? The amendment of the noble Lord, Lord Beecham, would restore the distinction, which would be a very sensible thing to do.

My Lords, having already declared my wife as an interest, I will not repeat that. However, in view of the contents of Amendment 14, I should mention that I am in possession of a disabled person’s blue badge and that I chair a mental health trust.

I wanted to join in on this debate partly because of puzzlement and partly because I thought that the noble Lord, Lord Beecham, moved his amendments—in particular Amendment 14—with rather more diffidence than I had expected, and certainly with less vigour. By the time you have got through five of these clauses, your mind begins to glaze over, to be honest. However, as I read the provisions as a mere layman, what is being said here is that local authorities can do anything they like, subject to some broad qualifications, and the Secretary of State can allow them to do anything they like if he likes what they want to do; but if he does not like what they want to do, he can do whatever he likes to stop them—and all this with a limited piece of secondary legislation, possibly altering primary legislation, and on the basis of a negative resolution. I think that is it in plain English—I hope that it is, and I see some nods.

At the end of the Public Bodies Bill, I said that I thought that Henry VIII had suffered a major setback but not a terminal defeat and had gone off to regroup somewhere. Well, I now know where—it was in the Department for Communities and Local Government. Here is Henry VIII, on his charger, writ larger than ever before.

I have reservations about this, to put it mildly. The noble Lord, Lord Beecham, used a telling figure in the Second Reading debate, that there were over 1,200 pieces of legislation that could be amended by this Bill, using these powers. He has picked out some of them, and I think that he has done us a service, but I want to know the justification for this. If it is secondary legislation that is being changed, I can understand it, but if primary legislation, which has been duly and thoroughly debated and passed by Parliament, can be swept aside in this way, there is a real question about what we are all doing here. I note that safeguards have been written in, but I am not sure that they are on a parallel with the safeguards written into the Public Bodies Bill. At the very least, if the House is expected to acquiesce in these proposals, it needs at least a similar level of safeguard as we have in the Public Bodies Bill. I rest my case for the moment.

I have not spoken in the Committee stage, so I declare my interest as president of the Local Government Association. In that capacity, let me say that the earlier remarks from the Minister on shadow mayors and mayors acting as chief executives will be extremely well received at the LGA this evening.

I wanted to say one or two things in support of the remarks of the noble Lord, Lord Newton. The underlying intention is honourable—that if the general power of competence is inhibited by any other legislation, the Secretary of State has what could be rather draconian powers to overrule other legislation. But that clearly needs to be hedged around with some safeguards. A number of us have received representations from an alliance of disability groups, which are particularly concerned that some of the legislation that relates to their rights and entitlements might be diminished. That came to us from Age UK, Scope, which is involved with people with cerebral palsy, the National Autistic Society, the RNIB and Mencap. All these organisations are deeply concerned that some of the protective legislation that surrounds the world of disability might be done away with for the possibly good reason that it got in the way of the power of general competence —but that would seem a lesser priority. So we need reassurances here, and I support this bunch of amendments.

My Lords, I wish to add something to what my noble friend Lord Newton of Braintree and the noble Lord, Lord Best, have said. The anxiety is not so much that any Government would be so stupid as to try to repeal essential provisions on welfare of the sort that have aroused some alarm but that this Government might be succeeded by another who are not so keen on the whole process of localism, devolution and subsidiarity and might therefore use the powers in a way that would restrict the general power, which might go contrary to the purposes of this legislation. I declare once again that I am joint president of the London Boroughs Association, which is certainly concerned about this possibility. The chances of any Government wanting to make material inroads into the welfare legislation to which reference has been made, and much of which is in the list in the amendment tabled by the noble Lord, Lord Beecham, are a little unreal. No doubt, however, reassurance will be necessary, and I hope that my noble friend on the Front Bench will be able to reassure those who have expressed anxieties that that is not the intention.

As I understand it, the purpose of this clause—the whole of the purpose of the power that is given—is simply to enable a local authority to exercise its general power of competence. If there are obstacles in previous legislation that prevent that, or if there is overlap, then to that extent the order may then remove the obstacle. It cannot just sweep away whole legislation; as I understand it, the provision in question has to be specifically related to the general power. I have had a lot of representations as well, and it is right that these fears should be aired on the Floor of the House so that reassurances can be given. However, the noble Lord, Lord Beecham, made the point that there is a distinction between the clauses as to whether the resolution is affirmative or negative.

I have two things to say. The first is that if the Joint Committee on Statutory Instruments makes a recommendation—I, too, read the wording that the committee recommends strongly that it should all be affirmative—it would be very unusual indeed for a Minister not to accept it. I have been through a number of Bills, most recently the Energy Bill, where that has been accepted. The whole range of recommendations was accepted, and government amendments were put down to achieve that. The second point is that if you have sufficient parliamentary supervision, that should be a sufficient assurance of protection. The power is necessary if you are going to make a reality of the general power of competence but it has to be defined, as I think it is intended to be, and it has to be subject to affirmative resolutions as recommended by the Joint Committee.

My Lords, I had not intended to intervene but I am tempted because I need to ask the Minister one question: could this subsection not be used by some other Secretary of State at some point in future to amend this legislation because it has a power in it to which he or she objects?

My Lords, in reply to that last question, the powers to amend legislation are relative to the use of the general power. Under Clause 1 the Secretary of State will be empowered to sweep away any legislation that is standing in the way of the power of competence—that is what that clause is about. The answer to my noble friend Lord Dixon-Smith is that I do not think that that would be possible. The provision does not get rid of any legislation at all; it is only any legislation that stands in the way of the general power of competence.

I hear the concerns that have been raised regarding this clause and I hope that I will be able to reassure noble Lords on some of it. I say at the outset that the power is normally subject to the affirmative procedure, as set out in Clause 209. There are limited exceptions to that, but we are taking on board and considering the recommendations of the Delegated Powers Committee as we have on other matters. We will come on to that in due course, but noble Lords may feel reassured that the general view that the Delegated Powers Committee is not overridden will probably be maintained.

Unlike Clause 1, where the Secretary of State can take away legislation, Clause 5(3) and (4) provide reserve powers to allow the Secretary of State to restrict what a local authority may do under the general power or to set conditions around it. We believe that these powers are a necessary safeguard, given the breadth of the new power, to ensure, for example, that risks to both local government finances and the Exchequer are properly managed.

The powers will be of the most limited use. The Government have no plans to use the powers in subsections (3) and (4) and expect them to be used extremely rarely, if at all. However, they might be used to deal with, for instance, any risks that might arise from authorities’ use of the new general power to engage in novel financial transactions. They are therefore a tug back if local authorities seem to be going well beyond their brief under the general powers.

On Amendment 14, the general power of competence is designed to give local authorities real freedom to innovate and act in the interests of their communities, although not to be too innovative in financial terms, as I have just said. However, there is continuing misunderstanding about the scope of Clause 5(1). This provides the Secretary of State with powers to remove or change statutory provisions that prevent or restrict use of the general power—that is, restrictions or limitations that bite on the general power by virtue of Clause 2, the clause where the Delegated Powers Committee considers that there should be an affirmative order. The whole clause is about removing barriers to the legal capacity of authorities to act, so that they may act innovatively and in the best interests of the community. It is not aimed at removing duties, nor is it a general purpose tool to remove any legislation that places burdens on local authorities.

Until now, there has been no comprehensive list of the legal duties placed on councils. To remedy this, the Government agreed with the Local Government Association that we should compile such a list—the noble Lord, Lord Beecham, referred to this—so that everyone is clear what legal obligations local councils have and to check whether the duties are relevant.

The review is ongoing. Once it is completed, it will be decided whether any changes are necessary to the statutory duties, but neither the review nor the barrier-buster power that is in Clause 5(1) is aimed at removing statutory duties protecting vital front-line services, so there is no link between these processes.

The Clause 5(2) power can be used only to remove English authorities’ powers that are obsolete because they are overlapped by the new power. Its purpose is to tidy up the statute book and simplify the law, but there will be no practical effect on the scope of local authority powers or duties.

Amendments 15, 16, and 17 are unnecessary; they attempt to gold-plate the consultation arrangements already in this clause. The existing wording in the clause does exactly what it says it does—it will ensure that anyone who needs to be consulted will be consulted—so no further elaboration is needed. The consultation must be carried out properly and in accordance with general public law principles. This means that the Secretary of State must act reasonably in deciding whom to consult and must act in accordance with equality duties, which were also mentioned, and he can be challenged if he does not.

We believe that the more specific a list becomes, the more likely it will inadvertently exclude people who need to be included. We have seen this many times in legislation. I well remember trying to get more and more people put on to the face of a Bill, but that is not always helpful. We believe that it is better that these matters are left to be judged in the particular circumstances, as quite often the consultation list will change, depending on what is being proposed. We believe that the consultation requirements are comprehensive and we do not think that these amendments are necessary.

On Amendment 22, the power is a power to remove statutory restrictions. If the same thing can be achieved in a different way, it is hard to see how they can be statutory restrictions in the first place. I am sure that, if an order is unnecessary, that will be brought to attention of the Secretary of State during consultation.

Amendment 23 raises a concern about the Human Rights Act. We want to make it very clear that an order under Clause 5(1) cannot be used to repeal the Human Rights Act. It is unlikely that the power is wide enough, as it is a power to remove restrictions and limitations that prevent a local authority from acting as a natural person and a natural person could not get rid of the Human Rights Act. It is not a general purpose tool to remove any obligation placed on local authorities. Furthermore, the third condition requires that the provision made by the order does not remove any necessary protection, which means protection afforded by measures such as the Human Rights Act. The fourth condition requires that the provision made by the order will not prevent any person from continuing to exercise any right or freedom that he might reasonably expect to continue to exercise. Any right conferred or protected by the European Convention on Human Rights is a right that a person must reasonably expect to keep. Finally, and most significantly, the fifth condition is that the provision made by the order is not constitutionally significant. I think that we can agree that repealing the Human Rights Act would be constitutionally significant. The DPRRC has signified that it is content with the safeguards on this power. In addition, we have provided for a stringent parliamentary procedure. Therefore, we do not think that anything further is necessary.

The noble Lord, Lord Newton, and others have raised concerns about the conditions on the use of the power. It may be useful at this stage to say that Clause 6, which limits the power under Clause 5(1), was introduced in the other place as a result of the concerns expressed. We believe that a list would need constant updating. If something was inadvertently left off the list, that would not mean that it could be amended. We believe that Parliament, when considering orders made under these powers, will be able to judge whether the use of the power is appropriate.

I hope that I have covered all the amendments, although I think that one or two got muddled into the next group—certainly, Amendment 22 appears in my notes twice. I hope that I have responded to noble Lords’ questions satisfactorily and that they will not press their amendments.

Before my noble friend sits down, will she confirm that she has repeated the explanation that was given in the memorandum to the Joint Committee on Statutory Instruments about the difference between subsections (1) and (2), which the Joint Committee expressly and firmly said that it did not accept? Is she now firmly saying that she will nevertheless insist on the difference—an affirmative resolution for an order under subsection (1) but a negative resolution for an order under subsection (2)? If so, I would find that difficult to accept.

My Lords, I hope that I said in my remarks that I understood what the recommendation was and that we would look at it further. It is almost inconceivable that a recommendation from that committee would be ignored.

My Lords, I shall comment briefly on the consultation amendments in my name, Amendments 16 and 17. The noble Baroness said that they would gold-plate the legislation. As I understand it, they would simply put this legislation on the same basis as the Legislative and Regulatory Reform Act and the Public Bodies Bill, which was in this House only recently. I am tempted to ask why those pieces of legislation were gold-plated. I hope that this might be looked at again.

The noble Baroness also said that adding a requirement for consultation with representatives of people who are likely to be affected could restrict the amount of consultation that took place, but as it would be an additional requirement—the requirements in the Bill would not be changed at all—and would include the words,

“such other persons that the Secretary of State considers appropriate”,

it is difficult to see how it would restrict anything. It would simply extend the amount of thought that the Secretary of State would have to give to exactly who is being consulted and provide a bit of guidance to him. The two arguments that the Minister has put forward seem a bit weak. When Hansard comes out tomorrow, I will read exactly what was said, but I think that it would be no skin off anybody’s back to accept the amendments.

Finally, I asked why the words “if any” had been added to the similar provisions in other legislation that this is based on. Perhaps the Minister will write to me and explain the significance of that.

My Lords, I am sorry that I disappoint the noble Lord, Lord Newton, by my uncharacteristically diffident approach to this legislation. I shall try to repair that omission. I was trying to give the Government some credit for responding to concerns raised in another place about Clause 5(1) in particular. Incidentally, the long list of statutory provisions in Amendment 14 was derived from those tabled in another place. The noble Lord is right to say that there are many more statutory provisions that could be disapplied or to which the legislation might extend. I think that the number is 1,296, but there is a formidable list here.

However, that is not the only concern. In particular, Clause 5(3) does not relate to dispensing powers; it is a simple provision, which says:

“The Secretary of State may by order make provision preventing local authorities from doing, in exercise of the general power, anything which is specified, or is of a description specified, in the order”.

In other words, the Secretary of State takes power to disapply the general power of competence on whatever topic and in whatever form he fancies. That is a very different proposition from one that seeks to allow a disapplying power to permit and facilitate the exercise of the general power of competence and it is completely unsatisfactory. It is a remarkable proposition: the Secretary of State seeks to give a power to do anything unless he objects. It is the political equivalent of Henry Ford’s “You can have any colour as long as it’s black”. Of course, Henry Ford inspired Aldous Huxley’s Brave New World—Fordism is the theme that runs through the book. The title of Brave New World, of course, is not inappropriately derived from “The Tempest”. Noble Lords will recall Caliban’s wandering gaze:

“O brave new world, That has such people in't!”.

Well, it is not a brave new world that has such propositions in it. I hope, again, that the Government will look not only at Clause 5(1) and the matters deriving from that, but, in particular, at the sweeping powers under Clause 5(3) which can apply under subsection (5) to,

“all local authorities … particular local authorities, or … particular descriptions of local authority”.

I suppose that means particular classes of local authority.

In replying and endeavouring to be helpful, as of course she does, the noble Baroness indicates that the Government will expect to use these discretionary powers only to deal with particular actions of local authorities which cannot at this point be identified. She referred to “novel financial transactions”. Well, I suppose that a local authority could engage in a novel financial transaction now. It would have to ensure that it was legal, and if it was not legal it could be challenged. It is not at all appropriate to have as sweeping a power as this against unknown and unknowable possible future activities of local authorities. If the Government are particularly concerned about financial transactions, why do they not, for the avoidance of doubt, make that a category in the Bill? But they do not, because the power is simply unlimited.

There are also some issues around the drafting. I appreciate that there are difficulties with the drafting, but when Clause 6 says,

“the provision does not remove any necessary protection”,

what does that mean? What is a “necessary protection”? It is presumably necessary, or not, in the eyes of the Secretary of State. All of that confirms the undesirability of the procedure, about which the noble Lords, Lord Jenkin and Lord Newton, have been rightly exercised, being of a negative kind as opposed to an affirmative resolution.

Again, I hope that the Government will look at this matter. The noble Lord, Lord Newton, rightly referred to the Government’s wise second thoughts on the Public Bodies Bill, and there are certain parallels here. I hope that the Government will take seriously the substantial objections, both to the process and also, in particular, to the thrust of Clause 5(3), which, as I said in moving the amendment, contradicts the whole spirit of a general power of competence that many of us applaud and would be glad to see in the Bill. If the Government want to achieve their reputation for promoting localism, they need to review and revise the procedures and principles set out in this clause. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Amendments 13 to 18 not moved.

Clause 5 agreed.

In moving that the House be resumed, perhaps I may suggest that the Committee stage begins again not before 8.04 pm. The Committee will be aware that the House will have to debate a Statement and a Question for Short Debate, so the Committee may possibly resume a little later than but no earlier than the time I stated.

House resumed. Committee to begin again not before 8.04 pm.

Greece: Default Contingency

Statement

My Lords, I shall now repeat a Statement that has been made in another place by my honourable friend the Financial Secretary to the Treasury. The Statement is as follows:

“Honourable Members will be aware of the recent developments in Greece. There has been considerable media speculation about what this means for the Greek adjustment programme and potential market reactions. I am not going to engage in speculation on what may or may not happen, but give the House an account of the facts as they currently stand.

Let me begin with some background on Greece and the financial assistance package. The international financial assistance package for Greece was agreed in May 2010. The package is composed of two elements: a loan of €30 billion from the International Monetary Fund, and €80 billion of bilateral loans from euro area member states. Although they were created at a similar time, neither the EFSM, which is backed by the EU budget, or the euro area-only EFSF contributed to the package for Greece. The adjustment package requires Greece to undertake significant adjustment efforts.

There are some very difficult questions that Greece has to address now, because of the assumption when the package was put into place that Greece would be able to access market funding again in 2012, which looks unlikely in current market conditions. The House will also be aware of political developments in Greece and that a new Cabinet has been appointed; the Government will soon be subject to a vote of confidence in the Greek Parliament. The Greek Parliament will also be voting on a medium-term fiscal strategy, which is a key element of the conditions attached to the current adjustment programme, later this month.

Against this backdrop, the euro area member states have been discussing next steps. The euro group released a statement today calling on,

‘all political parties in Greece to support the programme’s main objectives and key policy measures to ensure a rigorous and expeditious implementation’.

The statement also said that Ministers will,

‘define by early July the main parameters of a clear new financing strategy’.

This is a statement from the euro area member states. Let me be clear: the UK has not been involved in those discussions. We are not participating directly in the May 2010 package of support for Greece and there has been no formal suggestion either of UK bilateral loans or for use of the European financial stabilisation mechanism, which is backed by the EU budget. The UK only participated in the May 2010 package for Greece through its membership of the IMF. So the burden of providing finance to Greece is shared between the IMF and euro area member states, and we fully expect this to continue. Our position on this is well understood in the euro area.

The UK believes that the international community needs a strong International Monetary Fund as an anchor of global economic stability and prosperity, and over the past few years we have seen how important that role can be in times of crises as the IMF has taken swift and decisive action to support the global economy. There is of course no room for complacency. The Treasury, together with the Bank of England and the FSA, is monitoring the financial system, including the euro area, on an ongoing basis. Many scenarios are considered as part of the normal policy development process, but honourable Members will agree that it would not be appropriate for me to be discussing the detail of those scenarios. May I also remind honourable Members that UK banks have little direct exposure to Greece?

The continuing uncertainty in the euro area is also a reminder of the benefits of taking early action to stabilise and recapitalise the banks, as the UK has done. The UK banking system has developed a strong capital position, which has allowed it to become more resilient and will help insure it against future risks. UK banks have made good progress in sourcing funding despite difficult market conditions.

The difficulties faced by eurozone countries such as Greece and Portugal reinforce why it is right to pursue the course we set last year to tackle the deficit. The House should reflect that our deficit is larger than that of Portugal, but our market rates are similar to those of Germany. The action we have taken to strengthen the country’s finances stands us in good stead during this period of instability in the eurozone. No one on either side of this House should lose sight of the importance of these decisions in protecting the UK economy”.

My Lords, that concludes the Statement.

My Lords, I am most grateful to the noble Lord for repeating as a Statement the answer to an Urgent Question given by the Financial Secretary in another place. I must begin by congratulating him on the feat of speaking for a full four and a half minutes without referring for a moment to the substance of the Question asked. However, he still has some way to go before acquiring the skills of Mr Alan Greenspan, who famously qualified his speeches when chairman of the Federal Reserve by declaring that, “If anyone understood me, I misspoke”.

Of course, everyone will agree that we live in dangerous financial times and it is incumbent on all those in authority to take care when commenting on market-sensitive information, even to the extent of not answering legitimate parliamentary questions. However, the other fundamental aspect of these uncertain times is that it is important to plan for the worst, even as we hope that it will not happen. Assurance that the Government are indeed planning for the worst will enhance rather than reduce market confidence. Without going into any analytical detail, will the noble Lord tell us what is the Treasury’s current worst-case estimate of the potential exposure of UK financial institutions should there be a disorderly Greek default? Even if he will not answer that question, in the event of market disorder will the present Government stand behind UK financial institutions as the previous Government did? Any worst-case estimate should not, of course, refer just to direct exposure to Greek sovereign and private debt, as the noble Lord did just now, but to the exposure to other jurisdictions that might reasonably be assumed to suffer contagion from a Greek default. Just as the collapse of Lehman Brothers inflicted such a shock on the western financial system that the wholesale funding markets froze, pushing major banks into insolvency from which they had to be rescued by the state, so in similar fashion a default in Greece could produce knock-on effects. Of course, all these effects may already be priced into the market—we hope that they are—but we must plan for the worst.

As the noble Lord will be aware, Mr Michael Cohrs, a member of the new Financial Policy Committee of the Bank of England, has stated that what keeps him awake at night is the interconnectedness of the system, which could create ripple effects in financial markets throughout Europe and beyond. Without referring to any particular market or giving any other detail, what is the Treasury’s worst-case estimate of the scale of those ripple effects as they might impact the UK?

We also learnt from the Lehman collapse that the consequential fall in bank lending to households and industry—Lehman had been growing at more than 20 per cent a year and then ceased to grow at all—resulted in a fall in GDP from which the UK still has not recovered and, again in consequence, led to a sharp rise in the Government deficit. What contingency measures have the Government put in place to ensure that lending to industry and households will not be cut in the face of any market turmoil produced by a Greek default? Industry in particular needs to be confident that lending will be available at reasonable cost. Will the Minister guarantee that at the very least the lending targets of Project Merlin will be attained? If the eurozone economic problems put upward pressure on the UK deficit, will the Government revise their deficit reduction policy?

Finally, given the potential damage to the UK economy of financial disorder in the eurozone, does the Minister accept that it is very disturbing that Her Majesty’s Government seem to take pride in the fact that they are playing no part in the development of UK policies that will minimise future damage to the UK? Is it not time for the Government to be more proactive in Europe in pursuit of Britain’s best interests?

My Lords, I shall try to respond to the noble Lord’s questions one by one. First, he asked about the exposure of UK banks to Greece—not only the direct exposure but the wider exposure. It is important to recognise that the exposure of the UK banks to Greece is modest relative to that of other countries. For example, the exposure of the UK banks to the Greek public sector is $4 billion, which compares with the $22.7 billion exposure of the German banks to the Greek public sector. The total exposure of the UK banking system to Greece, including other credit commitments, is of the order of $19.2 billion. To put it into context, that compares with outstanding credit commitments to Portugal of more than €30 billion and to Ireland of the order of €180 billion.

I will not comment on what the ripple effects might be. In repeating my honourable friend’s Statement that the Treasury, the Bank and the FSA are running a whole range of scenarios against which we test the resilience of the UK system at any one time, I refer the noble Lord, Lord Eatwell, and other noble Lords to the financial stability report—the regular six-monthly report—that will be forthcoming from the Bank of England within the next few days, which will no doubt give an updated assessment in the wider context of how the Bank sees these matters.

On the question of contingency measures, the critical issue here is that the UK banks have been recapitalised and have been through stringent stress tests. They continue to be subjected to the appropriate stress tests by the FSA. They are in a strong position. The Merlin agreement has been signed. It is a much more comprehensive agreement than anything that the previous Government had to ensure the continuing flow of credit, particularly to small and medium-sized enterprises. I agree with the noble Lord that this is a critical issue. There is absolutely no suggestion that any of the events that we are talking about in Greece will have a direct impact on the ability of the banks to rise to the commitment they have made in the Merlin agreement.

The other thing that is absolutely critical here is that the UK continues to retain the utmost confidence of the international markets. The fact that interest rates on the 10-year benchmark gilt are this evening standing at 3.22 per cent, with spreads that have narrowed against the benchmark German bund since the general election, shows the confidence that the international markets have in the strong position of the UK. Those low interest rates enable the banks to fund themselves and to lend on to British small and medium-sized enterprises in order to underpin the recovery of the economy.

That takes me directly to deficit reduction. I am very grateful to the noble Lord for feeding me the lines which make the critical points, because it is only as a result of sticking to the deficit reduction plan that we have the low interest rates that mean that our businesses can be supported by the banks in this very difficult international climate. If we were doing what the shadow Chancellor proposed last week—unfunded tax reductions which would cost £51 billion over the lifetime of this Parliament—we would very soon lose the confidence of the international markets, our interest rates would zoom upwards and our banks and, indeed, individual lenders would be in a very serious position. Therefore, we will stick to our deficit reduction plan, as recently endorsed by the IMF in its latest report.

The noble Lord referred to our position in Europe and our contribution to the debate. Noble Lords who were present for our very interesting debate on Thursday of last week on your Lordships’ European Union Committee’s report on EU economic governance will have heard me explain at length how we are fully involved at every stage in discussions to make sure that the eurozone arrangements strengthen fiscal governance and that we drive forward the wider market reforms of the 2020 vision. The UK is absolutely central to discussions ensuring that what we need in Europe to get us out of the weak situation that others are in—this applies inside or outside the eurozone, but particularly within it—are the market reforms that will bring sustainable growth and ensure that we do not have these sorts of Greek problems into the future.

My Lords, would my noble friend like to comment on press reports that Standard Chartered Bank is ceasing to be involved in short-term interbank transfers with European banks? Does he believe that to be true? Is it happening with other British banks? If so, what are the implications?

My Lords, I am not going to comment on what is going on in the markets and with individual banks at all, and I am sure that my noble friend would not expect me to. However, I would make the point, which was also made in the Statement, that UK banks have been able, in very tough market conditions, to improve their funding position very considerably over the past year and more. The overall situation of the interbank market is far better—although we should not take any of these things for granted—than it has been at points during the financial crisis. It is therefore important, as my noble friend reminds us, that confidence within the banking system enables there to be liquidity. As I say, we are in a much better position in that respect than we were during the financial crisis itself.

My Lords, I start by congratulating the Minister on taking longer to answer questions than he did to repeat the Statement given by his honourable friend in the other place. One might suggest that the reason we have low interest rates and banks are not lending is more to do with the fact that the economy is moving back towards recession than for the reasons that the Minister gave. Let me ask three short questions that I think can be answered by short and quite factual answers. First, have the Government absolutely ruled out any use of the EFSM in support of Greece or any other European nation, over and above the commitments already made? Secondly, has the Bank of England accepted Greek sovereign credit as collateral for loans made by the Bank of England to the European Central Bank, and therefore for loans on which the Bank of England is exposed? Thirdly, are we as a country exposed to the need to recapitalise the ECB should Greece default on its sovereign debt?

On the role of the EFSM, I would refer the noble Lord to the words of the French Finance Minister, Christine Lagarde, when recently interviewed on the BBC. She talked about the package for Greece being one of bilateral loans, and she saw the likelihood of any future support for Greece as a continuation of that bilateral arrangement. So there has been no question of using the EFSM in the context of Greece. As for the question on the Bank of England, I am certainly not going answer for what the Bank of England does or does not take in—nor would the noble Lord, Lord Myners, for one minute begin to think that I would start answering questions about the bank’s collateral policies. As to the capitalisation of the ECB, that is an entirely hypothetical question, as the noble Lord knows full well.

My Lords, is it not apparent that the Greek economy cannot become competitive in the foreseeable future at its present exchange rate? Greece will be condemned to an endless succession of deflation and bailout unless it leaves the euro. Is it therefore not extremely important that discussions by the British Government and in the European Community should take place on how to minimise any collateral damage should that come to pass?

My Lords, I am not sure that I entirely accept my noble friend’s starting premise. The position is that Greece is a member of the eurozone, and the eurozone will continue to be the eurozone. We want to see the strengthening of fiscal and economic discipline within that zone. When the IMF put together and led the programme that Greece signed up to—which had elements of fiscal consolidation, structural fiscal reform and wider structural reform—it was done precisely in the context of Greece continuing to be a member of the eurozone, and that is the continuing position. The package has been put together and the new Government have some decisions to take. The IMF is coming up to its regular review before the next drawdown of the package, but that is entirely in the context of Greece being able to finance itself on an ongoing basis within the eurozone.

Has my noble friend seen the extraordinary anti-German graffiti and the slogans being shouted by the crowds in Athens? Does that not illustrate what Professor Martin Feldstein, the Nobel prize-winning economist at Harvard, has always said—that the euro, far from bringing countries together, increases tensions between them? Can my noble friend also explain what sense there is in Ireland and Greece borrowing more money to lend to Portugal, and Ireland and Portugal borrowing more money to lend to Greece?

My Lords, I have not been on the streets of Greece or seen what is going on in Athens, but clearly it is regrettable if anti-German sentiments are being expressed on the streets there. However, I have not been following the detail of the riots. The main thing is that we need to support the Greek Government and encourage them, as the eurozone Ministers have done in their statement today, to progress their package and enable the IMF to complete the upcoming assessment. As for the second-order effects of who needs capital where in order for loans to flow, my noble friend reinforces the point that this is a very interconnected system and the ongoing work on the short-term and medium-term stability of the eurozone has to be mindful—as we have been reminded already this evening—of the interconnectedness of the systems at every level.

My Lords, is it not the case that this is not a euro crisis, as many commentators have been trying to pretend, but a Greek funding and fiscal crisis caused by excessive borrowing by the Greeks, irresponsible lending and mispricing of risk by lenders? It is not the first time that we have seen that in the past year or two. Does the Minister agree that this would have arisen irrespective of the currency that Greece happened to have? It would have happened whether Greece had been in the dollar zone or the pound sterling zone or still had the drachma. Secondly, to avoid the risk of a considerable panic, is not a renegotiated package for Greece necessary, providing for an orderly restructuring of its debts, a credible series of repayments and a set of definite figures for offsets and provisions by Greece’s creditors? Is it not time that we began to think in those terms? Thirdly, is it not the case that Greece leaving the euro or a Greek devaluation is the opposite of what is required? If Greece went back to the drachma, it would of course greatly enhance the value of its euro debts—and its debts are primarily in euros—but that would increase the burden on Greece and increase the portion of Greek assets that overseas lenders and investors would have to write off. Such a move would be counterproductive and damaging from our point of view as well. Moreover, devaluation never works as a stimulus to growth unless wage bargainers are under monetary illusion and cannot tell the difference between nominal and real wages and do not ask to be compensated for the reduction in real purchasing power. That is a most unlikely situation for Greece at the present time.

I agree with the noble Lord, Lord Davies of Stamford, that if the UK continued with the excessive deficit policies of the previous Government, we would be in a terrible mess in this country. Whether you are in or out of the euro makes no difference, and the UK would be experiencing considerable problems if we had not gripped the deficit. I agree with the implication of his analysis on that point. On the second question about sustainable financing, that is precisely where the IMF starts its assessment of debt sustainability. The critical first plank of sustainability for Greek debt hinges on Greece sticking to its agreed fiscal consolidation path. All else flows from that. As for the Greeks or anyone else leaving the euro, that is a hypothetical question and not one that we should spend any time on.

Does the Minister agree that it is critical not just for Greece but for the UK economy that there is not a disorderly Greek default? In that circumstance, does he agree that the least worst option in what is a difficult situation is to agree an orderly re-profiling of Greek debt? If so, will the Government support moves by the eurozone Finance Ministers to bring about such a re-profiling?

I certainly agree with my noble friend that the last thing anyone wants is disorder, whether default or anything else. As I made clear, the next steps are, first, a question for the eurozone itself. We are not directly involved in the eurozone discussions. To address my noble friend’s point, the statement from the euro group today reads:

“Ministers agreed that the required additional funding will be financed through both official and private sources and welcome the pursuit of voluntary private sector involvement in the form of informal and voluntary roll-overs of existing Greek debt at maturity for a substantial reduction of the required year-by-year funding within the programme, while avoiding a selective default for Greece”.

As I said, that is a matter for the eurozone Ministers, but I think that they are addressing the issue in the way that my noble friend suggests.

Would the Minister care to remind the House of the percentage of, first, the euro area, and, secondly, of the European Economic Area, of which we are a part, which is constituted by the Greek economy? I would not say that it is peanuts, but is it not a rather low percentage? If Europe wished to, could it not help to restructure the Greek economy—with stringent terms, by the way? Would not the whole House stand behind that policy agreed around Europe and say that we want it to work—God’s speed, we want it to work? Are there not some Members of the House who do not want it to work?

I am happy to confirm that Greece is a relatively small part of the euro area but, as we have already identified this afternoon, Greece is interconnected, as are all the European and global financial markets. Therefore, one should not in any way trivialise the Greek situation and the capacity for difficulties in the markets.

That said, it is also important to be clear about the lines around whether the UK should or should not be involved in these matters. We are not a member of the eurozone; we are not going into the eurozone; and we are not going to make any preparations to enter the eurozone in the lifetime of this Government, this Parliament. We must make sure that, on the one hand, we are not part of any ongoing and permanent support mechanism for the eurozone; at the same time, we have to play a full part to ensure that the eurozone economic governance is fit for purpose.

Does my noble friend agree that if relatively less or more successful countries or economic areas are to share a currency, there is a requirement for substantial ongoing transfer payments, as is the case within the US and even within the UK? Secondly, does he by any chance know roughly what proportion of Britain's exports to the eurozone are to what I would call hard northern Europe, compared to softer southern Europe?

I am not able off the top of my head to break down the analysis of our exports, and I am not quite sure where my noble friend would draw the line between hard and soft. The critical point here is that more than 40 per cent of our exports go into the eurozone. Of course, they are generally distributed in relation to the size of economies, with Ireland, as we discussed in relation to the Irish package, having for historical reasons a disproportionately large share. My noble friend makes the point that it is absolutely in the UK's interest to ensure that the eurozone economies are successful, because that is where the largest part of our exports go.

Does my noble friend think that a new set of arrangements made within the euro area by the IMF for Greece will work this time? It did not work last time. Unless there is some confidence that new arrangements made to support Greece will work, in the sense that they can restore the Greek economy—there is very little sign that the Greeks are able to take any medicine which would restore it to health—would we not be better served by working within Europe to help our European friends understand that letting Greece remove itself from the eurozone and take the default that it clearly is in is in everybody's interest?

My noble friend Lady Noakes asks a very good question. It is inevitable that people will ask: was the package appropriate? One should take comfort from the fact that the IMF has a long and successful record of implementing restructuring programmes. The IMF programme for Greece was put in place in market conditions and with a market outlook somewhat different from that which Greece and the eurozone subsequently encountered. The first requirement is for the Greek Government to be encouraged to get back on track, to stick to the agreed fiscal consolidation path. Beyond that, it is for the IMF to see what needs to be done. The key thing is for the original plan to be back on track. I therefore think that we should not at this point second-guess whether the plan is or is not appropriate.

I will not be drawn into whether the Greek situation would be better in one hypothetical scenario or another.

My Lords, does the noble Lord agree that, however brave the Greek Prime Minister is —he has shown extraordinary guts and determination—and however much a new Greek Government might wish to pursue the austerity programme and the conditions being laid down, there must be room for doubt whether any Greek Government can secure the degree of self-discipline within the country that would enable them to meet the conditions of the IMF and of the other European countries? That being the case, does the noble Lord not agree that the great interest of the United Kingdom Government lies in co-operating as closely as possible with our eurozone partners in putting together contingency plans to meet whatever eventuality may occur, because the Greek Government are extremely unlikely to be able to live up to their promises?

My Lords, I am not going to be drawn by my noble friend Lord Tugendhat into giving a commentary on Greek politics, which I am not qualified, in any case, to do. However, the Greek Parliament will hold a vote of confidence on the new Government very soon—I believe that it may be tomorrow. Critically, the Greek Parliament will vote on a medium-term fiscal strategy consistent with the agreement into which they have entered. That vote in the Parliament is expected to be later this month. I think that it would be wrong to question the commitment of the Greek Government and Parliament to the package. On contingencies and close co-operation, I can only confirm that, either in terms of what is being done by the authorities in the UK or in co-operation with our European partners, we will certainly look at a wide range of contingency plans and scenarios.

Biological Diversity

Question for Short Debate

Asked By

To ask Her Majesty’s Government how they propose to implement the agreement reached at the meeting of the Conference of the Parties to the Convention on Biological Diversity held in Nagoya, Japan, in October 2010.

My Lords, I start this short debate on the Convention on Biological Diversity by declaring my interest as chairman of the Living With Environmental Change partnership and by thanking those who put their name down to speak this evening.

The recent natural environment White Paper, entitled The Natural Choice: Securing the Value of Nature, describes the 2010 Conference of the Parties to the Convention on Biological Diversity, held in Nagoya, Japan, as historic. We all hope that this will prove an accurate assessment and that the outcomes over the next decade deliver a new international deal to protect and enhance biodiversity and ecosystems.

The conference emphasised the value of the natural environment to human welfare and livelihoods and stressed the link between action on biodiversity, climate change and development. We all fervently hope that its new global vision will be achieved. This is stated as follows:

“By 2050, biodiversity is valued, conserved, restored and wisely used, maintaining ecosystem services, sustaining a healthy planet and delivering benefits essential for all people.”

The parties also agreed on a shorter-term ambition, which was to:

“Take effective and urgent action to halt the loss of biodiversity in order to ensure that by 2020 ecosystems are resilient and continue to provide essential services, thereby securing the planet’s variety of life, and contributing to human well-being, and poverty eradication”.

To achieve this, the parties agreed on 20 targets and five strategic goals. These commendable aspirations, however, have to be put into the context of the failure of Governments to meet the previous target, which over the previous 10 years was to achieve a significant reduction in the rate of biodiversity loss by 2010.

The convention’s report, Global Biodiversity Outlook 3, pointed out the failure to do anything of the sort. It warns of critical tipping points that could lead to large-scale rapid changes causing potentially irreversible damage to ecosystem services. The question is therefore whether this new strategic plan, with its 20 targets, will prove more effective.

In summary, the new strategic plan emphasises the need for effective and urgent actions, appropriate and effective policies and evidence-based decision-making. Each member state is required to develop a natural strategy in line with the strategic plan, integrating sustainable resource use across all sectors of policy and meeting biodiversity targets.

We missed our targets up to 2010 because of a basic lack of understanding among Governments about the value of nature and the long-term benefits to be derived from its protection. There was a lack of public awareness of how ecosystem functions contribute to human welfare and of their benefits, including goods and services, some of which can be valued economically and others that have a non-economic value. Ecosystem services, such as soil formation, nutrient cycling, flood hazard reduction, water purification and air pollution reduction are all underpinned by biodiversity, and the level and stability of ecosystem services generally improve with increasing levels of biodiversity.

Earlier this month, the UK National Ecosystem Assessment was published by the Government. It was a collaboration of scientists from a number of Living With Environmental Change partners, and could prove to be a massively helpful tool to help decision-makers in government, business and society put in place long-term measures to protect and enhance our ecosystem services, including our biodiversity. Both this report and the recent White Paper are important developments that point in the right direction.

A third document to be launched later this month is the England Biodiversity Strategy, which is to be followed by strategies from the devolved Administrations. Tomorrow, the European Union Environment Ministers will, we hope, adopt the EU biodiversity strategy. Here is a plethora of strategies and documents, and they will all have to spell out just how we are going to deliver on the Nagoya commitments.

Of the 20 targets, I will refer to just a few. Target 6 requires all fish stocks to be managed and harvested sustainably, and target 7 requires areas under agriculture and forestry to be managed to ensure conservation of biodiversity. We could have a full debate on the implications for the common agricultural policy and the common fisheries policy, as perhaps we should, but clearly the EU biodiversity strategy will have to come up with some convincing reasons why that might become a reality.

Target 9, which concerns invasive alien species, is of particular relevance to our overseas territories, in a number of which the accidental importation of species, such as rats, has caused serious damage to the indigenous wildlife: for example, ground-nesting birds. Indeed, programmes are already in place in some of our overseas territories to eliminate such pests, but more programmes will clearly be essential if we are to meet our obligations under this target.

Target 15 commits Governments to restoring 15 per cent of degraded ecosystems by 2020, and the White Paper accepts this commitment. There will have to be a clear evidence-based assessment of what constitutes a degraded ecosystem and an inclusive procedure, by which I mean it should include as many people as possible in the process of determining priorities for restoration.

A key outcome was the Nagoya protocol on access to genetic resources and the sharing of benefits arising from their use. Access and benefit-sharing provisions are critical to countries with exploitable genetic material. Very often that means developing countries, which must at all costs protect their intellectual property. Access agreements are also very important to our national centres of excellence such as the Royal Botanic Gardens, Kew and the Natural History Museum. Kew's core business is to collect and research plant diversity for conservation purposes and to enhance the sustainable use of plants. The Nagoya protocol encourages research that contributes to conservation and the sustainable use of biodiversity through the establishment of simplified measures for non-commercial research. This protocol is to be welcomed, and particularly the intention to simplify measures for non-commercial research.

Again, whether all this will be practical will depend on whether Governments, the business community and society at large understand and value our biodiversity. In this country, we are short of taxonomists, which means that for many species we lack experts who can identify species before they face extinction. The House of Lords Science and Technology Committee has, on three occasions, reported on the need for a national programme to support systematics and taxonomy. There are now grounds for believing that government departments, research councils and the taxonomic community itself are addressing this serious issue. We need to engage the enthusiasm of both urban and rural populations. I pay tribute to such organisations as the open air laboratories, OPAL, which enlist the wider public in such projects as the bugs count undertaken with the Natural History Museum.

The environment White Paper pledges the Government to invest £1.2 million to support the development of the National Biodiversity Network. This network collates a vast amount of records provided largely by knowledgeable volunteers and local organisations around the country, a highly cost-effective way of generating essential data. The long-term support for the National Biodiversity Network is of key importance if we are to meet our targets.

Above all, we need to encourage a new generation of naturalists. We need to ensure that in these difficult times public funds are still available for local museums and natural history societies so that we can continue to generate these biological records.

I look forward to hearing from the Minister that the natural environment White Paper will be followed up by policies and actions that will ensure that by 2020 we have indeed met these challenging targets.

My Lords, I have to declare an interest as a trustee of the Pond Conservation Trust. Freshwater is one of the most extensively exploited and vulnerable parts of the environment. That vulnerability has been further exposed by the drought that we have experienced this spring. Moreover, the harsh spell of weather that we had before Christmas, with record low temperatures, led to many frozen ponds and streams, and so further jeopardised the wildlife that is dependent on freshwater.

In the past 20 years, huge investment has gone into attempts to improve the quality of our rivers, but there has been little improvement in the biological condition of those rivers. About one-third of the monitored length of our rivers is not in a good biological condition due to such things as industrial pollution and fertiliser run-off from farmland. Over the next 20 years, a further £20 million will be spent to protect freshwater ecosystems through agri-environment schemes, investments in the infrastructure of the water industry and in conservation grants. However, ponds, a major reservoir of freshwater diversity, continue to decline in quality.

The Government’s White Paper on the natural environment, published this month, says,

“They are often overlooked but small water bodies such as ponds and ditches play a critical role in supporting ecosystems … Ponds alone support 70% of freshwater biodiversity and more endangered species than lakes, rivers, streams or ditches”.

Inevitably, government schemes to protect the environment will tend to be large-scale, such as the landscape-scale works recommended in the Lawton review, but ponds are essentially small-scale and local. The Pond Conservation Trust has since 2008, in company with local people and various partners, helped to create 1,600 new ponds, 420 of which are specifically for biodiversity action plan species. This project has also helped to change attitudes and has been used as an example of good practice by NGOs and by the Government.

However, work such as this cannot depend on local efforts alone, but needs to be underpinned by appropriate science and government policy. I want to ask the Minister two questions. Is he satisfied that the freshwater science base of this country is sufficient to provide the evidence needed by policy-makers to protect and ensure freshwater biodiversity? It is not just the species that depend on water directly—such as frogs, toads, newts, dragonflies and various plants and invertebrates—but also birds and bats, mammals such as voles and otters, and reptiles such as grass snakes. Secondly, as new schemes are introduced, are effective monitoring systems in place to determine which schemes are successful and cost-effective?

My Lords, I congratulate my noble friend Lord Selborne on introducing this debate in such a timely manner, given that tomorrow the Environment Council meets to discuss the EU’s biodiversity strategy till 2020. That meeting of EU Environment Ministers will be an important test of resolve in meeting the commitme