Localism Bill

Public Bill Committee, 8 February 2011.

Clause 32

Clause 33

Clause 34

Clause 35

Nick Raynsford (Labour, Greenwich and Woolwich)

I rise only to ask the Government to explain why they believe, under the clause, that it is necessary to change the provisions of the Business Rate Supplements Act 2009, which allows local authorities, in consultation with local businesses, to come forward with proposals for a business rate supplement to contribute towards the investment necessary to promote the economy of an area. The 2009 Act provides for ballots to be held, but gives a degree of discretion to local authorities so that they are not necessarily bound to hold a ballot—even if a ballot is thought to be a good idea—in cases where the business contribution is a relatively small proportion of the total cost of a scheme. That seems to fit rather well with the philosophy set out last week by the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove, when he said:

“The Government…believe that if a local authority wants to adopt its own code of conduct, it should be free to do so. It is almost inconceivable that authorities will not adopt one…Authorities should, however, have that freedom”.––[Official Report, Localism Public Bill Committee, 3 February 2011; c. 287.]

Why should not the same principle apply here? It may be desirable to have a ballot and, in most cases, a ballot will be conducted. However, if the contribution from the business rate supplement is a very small proportion of the total, is it absolutely necessary to insist in all cases? I would be grateful if the Minister would explain why they are adopting a different principle in this particular case to the one enunciated last week by the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove.

Bob Neill (Conservative, Bromley and Chislehurst)

The overarching principle is the one that Government Members have consistently advanced, including when the 2009 Act was going through Parliament: businesses should not be taxed without the right to have a say. While I do not disagree with the broad proposition of the 2009 Act—that business rate supplements to raise funds for economic development projects are desirable—we think, as I argued in opposition, that all businesses should have the chance to vote. That is simply what we are doing.

The right hon. Gentleman also needs to remember that for some very large BRS schemes, although the sum raised may be less than one third of the total cost of the project, that can be a considerable sum for businesses —particularly small and medium-sized enterprises—so we think it is right that they should have a say on it.

Nick Raynsford (Labour, Greenwich and Woolwich)

Perhaps the Minister will therefore explain why subsection (7) says:

“The amendments made by this section do not apply in relation to a BRS imposed before the date this section comes into force.”

He knows very well that Crossrail is covered by that, and the Government accepted that the Crossrail scheme should not be subject to a ballot on the business rate supplement. It is slightly rich for them to say that they are arguing for ballots in all cases, but that for a project as large and significant as Crossrail—where the contribution from the business rate supplement was actually very substantial—everything is perfectly all right because they accept that there should not have been a ballot and they will not retrospectively require one. Frankly, there is a whiff of inconsistency—a little bit of opportunism—in the air, and I regret that the Government are trying to justify their decision in this case on very shaky grounds indeed.

Bob Neill (Conservative, Bromley and Chislehurst)

That is the most specious argument I have yet heard in the course of this Committee. The right hon. Gentleman argued during the passage of the 2009 Act that Crossrail had to be exempt because of its importance, and that if there was a ballot on the Crossrail levy, it would risk unpicking the whole of the funding settlement. He was right, and the Government have therefore continued with that course. Crossrail is an established scheme—it is in fact the only such scheme that has been set up prior to this measure. We are recognising the previous Government’s stance that it was not desirable to unpick or undermine the funding settlement for Crossrail. That settlement was widely debated, all the major candidates in the mayoral election supported it, and there had been wide discussion with the business community. It is an exception, but it is not intellectually inconsistent. I hope, given that the right hon. Gentleman supports Crossrail as much I do, that he will welcome the fact that we have reflected that in the drafting of the clause.

Nick Raynsford (Labour, Greenwich and Woolwich)

If my argument is specious, the Minister’s is equally specious. In truth, when the Conservative party was in opposition, it recognised the need for an exception in the case of Crossrail. It was a huge exception. It is bizarre that the Conservative party accepted that then, but now argues that there should be no exceptions in future, even if the scale of the business rate supplement contribution is tiny. That flies counter to the views expressed to the Committee by the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove. He said that we should give local government discretion and that we must not impose obligations on it. He said that local government will do the right thing, will have a standards code and—in this case—will hold a ballot, but that we should not force it to do so. I am afraid that there is an inconsistency. I merely enjoyed pointing it out, so I will take this no further.

David Ward (Liberal Democrat, Bradford East)

I would not want to comment about the “Origin of Species” debate, but I want to lay a marker on consistency. I accept the Minister’s point about taxation without representation but, on the point of consistency, we will later be considering local referendums in which businesses have no right to participate. That issue, which I think was raised by the British Chambers of Commerce, is a matter for later, and although I support the clause, the Committee needs to bear in mind the question of consistency.

Bob Neill (Conservative, Bromley and Chislehurst)

I understand my hon. Friend’s point. Different types of referendums are outlined in the Bill and it is not unreasonable that different criteria should apply. There is a world of distinction between a code of conduct that does not impose a financial obligation and a business rate supplement that—sometimes for good reasons—does impose a financial burden. For those reasons, we think it is right that there should be a vote. I urge hon. Members to support the clause.

Clause 36

Jack Dromey (Labour, Birmingham, Erdington)

We welcome the Government’s proposals on business rates, but we question how effective some of those proposals will be. We support giving councils the power to set local discounts on business rates. Let me give a practical example.

Before Christmas, I led an excellent debate in Westminster Hall on the regeneration of high streets. One of the big issues in that debate, which sought to address considerable concern about the decline of high streets nationwide, was precisely how discounts might be applied to encourage businesses to move back into the high street. In my local area, there is a strong view that Erdington High street is not what it once was, and a strong determination to see it regenerated, so such measures are a welcome step in the right direction. However, we doubt the ability of many councils, particularly in deprived areas, to fund such discounts, given the unprecedented and unfair cuts being imposed on them by the Secretary of State. The cuts total 27% nationwide. Next year £170 million will come out of Birmingham’s budget alone. There is also, of course, the grotesque disparity between the treatment of Birmingham, on the one hand, and Wokingham and Surrey, on the other.

We have, therefore, several questions for Ministers. How will councils that have been hard hit by the Government’s unprecedented and unfair finance settlement be able to fund local discounts on business rates? Are the Government concerned that those areas that are unable to fund the discretionary relief will fall further behind those areas that can? Have they consulted on this issue? What is their assessment of the impact of the proposals? How might they remedy that disparity?

Bob Neill (Conservative, Bromley and Chislehurst)

I am glad that the Opposition Front Bench team welcome the principle behind discretionary rate relief. This is an enabling power, and we trust that local authorities will use their discretion to exercise it according to the circumstances. With respect to the hon. Member for Birmingham, Erdington, the question of the financial settlement is not germane to the principle behind this piece of primary legislation, which is there to endure both in difficult economic times—inherited from the hon. Gentleman’s party—and in better times, when the results of our policies for economic recovery come to fruition. It gives local authorities the choice as to how they fund it and in what form. It therefore seems to be a thoroughly localist measure.

Ian Mearns (Labour, Gateshead)

I come back to the point made by my hon. Friend the Member for Birmingham, Erdington. Discretion exists but is significantly fettered in a particular part of the country by the hit that local authorities are taking from the budget settlement. The 12 authorities in the north-east of England are taking on average a budget cut of £81 per head of population, whereas the commensurate figure for the south-east, outside London, is £21. How can that discretion be exerted when there is such a disproportionate effect in local authorities in certain parts of the country?

Bob Neill (Conservative, Bromley and Chislehurst)

The hon. Gentleman misses the point. First, the funding per head for those parts of the country to which he refers is considerably greater than that for some of the authorities that have been quoted in the south-east of England. Secondly—

Ian Mearns (Labour, Gateshead)

Will the Minister give way?

Bob Neill (Conservative, Bromley and Chislehurst)

Let me finish. Secondly, it does not take account of the fact that specific arrangements were made to limit the impact on those areas most vulnerable in the funding settlement. Thirdly, we put in place a transitional grant to make up for the loss of the working neighbourhoods fund, which was being removed by the Government supported by the hon. Gentleman. Fourthly, the ultimate responsibility for the tight financial settlement lies with those who left the country in record deficit and have made life difficult for local authorities. We in Government are doing our best to deal with that inheritance.

Ian Mearns (Labour, Gateshead)

I take the point that the level of cuts is because of the level of grant. But the level of grant also reflects the capability of local authorities in particular regions to raise revenue locally through the banding structure. In my own authority of Gateshead, the banding structure reflects a situation where 65 to 67% of the properties are in band A. It is therefore difficult to raise the extra revenue on a local basis, given the relative property values in different parts of the country. Levels of Government grant have come to be what they are because the banding structure has that impact on a national and regional basis.

Bob Neill (Conservative, Bromley and Chislehurst)

I know the hon. Gentleman will appreciate that this Government took specific steps to assist those local authorities in greatest need by increasing the weighting given to the needs element within the formula grant to 83%, which is the largest ever. Yes, there are long-term issues about the way in which local government is financed. We have announced our local government resource review, and that is why we have a two-year settlement, although it is a four-year spending period. So we can reasonably revisit issues following that review.

Jack Dromey (Labour, Birmingham, Erdington)

We, too, trust councils to make good use of the powers, including for the regeneration of high streets. The issue is their ability to make good use of the powers. If Wokingham is losing £4 per head, Birmingham is losing in excess of £100 per head as a consequence of the decision taken by Ministers. On Friday last week, voluminous impact studies arrived late in the day. Can I press the Minister on this issue? Has any study been carried out on the likely use of these powers, and in particular on the ability of those councils in hard-pressed areas—yet further hard pressed as a consequence of budget cuts—to make use of those powers?

Bob Neill (Conservative, Bromley and Chislehurst)

First, it is worth bearing in mind that, as I said before, this measure has been widely supported by the local government community, which accepts that it would be for each local authority to decide whether it makes use of the power. Attempting an assessment of the form that the hon. Gentleman suggests would not therefore be practical. Local authorities would decide whether they used the power or not, according to the circumstances in which they find themselves. As that might be at some stage in the future, it is not a realistic point to make.

The impact assessment sets out fully the steps that we have taken to investigate and, as I have said, the measure has been supported well by the local government and business communities. It is worth bearing in mind that the Royal Institution of Chartered Surveyors, the British Chambers of Commerce, and the Greater London authority, which is one of the largest authorities with a business interest, have all supported the measure. It is localist and enabling, and once the Government’s economic policies have been successful, many local authorities will be able to start taking advantage.

Gavin Barwell (Conservative, Croydon Central)

Does my hon. Friend agree that contrary to the argument that is being made to him, finding £50,000 for a rate relief scheme for a struggling high street will be easiest for authorities with the largest overall budgets? For such authorities, £50,000 is a small percentage of their total budget compared with a shire district council, for example, whose budget is much smaller and for whom £50,000 is a more significant sum.

Bob Neill (Conservative, Bromley and Chislehurst)

That point is entirely fair. What is sometimes forgotten in this debate is that although there are larger pressures within larger authorities, there is often scope for greater flexibility within the system, and my hon. Friend’s point is well made. Some authorities will be keen to take this up, but we trust them to judge their financial circumstances to decide the appropriate point at which they do so.

Clause 37

Jack Dromey (Labour, Birmingham, Erdington)

Labour in government introduced the small business rate relief scheme in 2003, and in their Budget of March 2010, the Labour Government announced a temporary increase of SBRR. We welcome the Government’s decision to make this small but important change to that scheme, which was introduced following the Local Government Act 2003.

I have two questions. First, what have Ministers made of the very good representations from the British Chambers of Commerce, suggesting that the current drafting may result in many small businesses still having to apply for relief in future, which may mean that some small businesses lose out? Secondly, will Ministers consider changing the clause’s wording to ensure that any new rate relief scheme automatically applies to small and medium-sized enterprises?

Bob Neill (Conservative, Bromley and Chislehurst)

I am grateful for the hon. Gentleman’s broad support for the thrust of the proposal, and I think that we have a measure of consensus as far as this important issue is concerned. In trying to find the best means of achieving a greater degree of automation, we looked at various options and settled upon this one. The reason is well set out in the impact assessments that accompany the Bill.

I am aware of the observations by the British Chambers of Commerce. We are not convinced about the risk that it has identified, but we will continue to talk to the BCC and ensure that any practical issues are picked up in practice, and I am happy to assure the hon. Gentleman on that matter. We think we have solved the problem, but we are always happy to be open-minded about an objective that we have both agreed on.

Jack Dromey (Labour, Birmingham, Erdington)

It is to be welcomed that there was an impact study on the clause, as opposed to what happened on the previous clause. Can I press the Minister to go one step further? The BCC has identified a legitimate issue. I know from experience, as I am sure all hon. Members do, that some SMEs will take advantage readily of what is on offer. There are also SMEs, however, that are unlikely so to do, for a variety of reasons, including not knowing what is on offer. In such circumstances, if there is common ground, as I believe there is—that we want all SMEs to benefit—will Ministers agree to consider the notion of automaticity with a view to bringing back proposals on Report?

Bob Neill (Conservative, Bromley and Chislehurst)

We have to be a little careful; we are doing what we can to achieve automaticity, but it is worth explaining why we have not gone any further. We are removing the requirement to submit an application, but we will continue working with the British Chambers of Commerce, other bodies and local councils to ensure that information about eligibility is available. Taking that course also has the advantage of bringing small business rate relief into line with other reliefs, so it has merit.

The suggestion has been made that we could somehow move to further automaticity, based on the value of the hereditament. Two factors caused us not to go down that route. The first is that any increase in the relief would have to be borne by businesses that were not benefiting from the small business multiple, so there would still be a burden. A satisfactory solution has not been found to the second factor, which is why we rejected it. Although I agree with the desire of the hon. Member for Birmingham, Erdington to assist small and medium-sized-enterprises—that is the object of the policy—the alternative proposition that was being advanced could have given relief to large chains that happened to have a large number of outlets that were comparatively small in size. We were keen to avoid that unintended consequence.

Although we will continue to keep an open mind, we believe that we are taking the safest route; it will prevent the unintended consequence of there being a small hereditament relief rather than a small business relief, and thus a distortion of the market. The other proposal could also have had an impact on those businesses that are sometimes referred to as being “on the shoulder”; they fall short of relief but would have to pick up an increase in the multiplier to fund those just below it. That could have created injustices.

Jack Dromey (Labour, Birmingham, Erdington)

Forgive me for pressing the Minister one final time on this question, Mr Amess. It is accepted that there are complexities inherent in what the Government propose, but I believe that it is common ground that a number of small businesses that could badly do with taking advantage of what is being proposed will not be able so to do. If that is so, will Ministers not reconsider? If there were such common ground, the business community would be most disappointed if Ministers said that they had an open mind but then shut the door.

Bob Neill (Conservative, Bromley and Chislehurst)

I do not believe that the drafting of the clause gives rise to the sort of concern that has been expressed. The question of whether small businesses will take it up is better addressed not through the drafting of the clause or through primary legislation but through information campaigns and working with councils and representative bodies to raise awareness. That is the important bit.

Jack Dromey (Labour, Birmingham, Erdington)

Does the Minister accept the views being expressed by the BCC and others that, as it stands, it is likely that many small businesses will not take advantage of what is on offer? They might be able to do so, but will not do so—for instance, because they simply do not know about it.

Bob Neill (Conservative, Bromley and Chislehurst)

I have to repeat the fact that that is not because of the drafting of the Bill. Although it is a genuinely held fear, I believe that it can be proved wrong through imaginative work by the Government, local authorities and business bodies. I refer the hon. Gentleman to the view of the Federation of Small Businesses, which said:

“The onus is now on councils to be creative and not needlessly make small businesses go through an application process when it is obvious they are ineligible. We have developed excellent relations with councils across the country through our small business engagement accord and we will be urging them to use their new powers to ensure that all small businesses receive the relief that they are entitled to.”

I agree with the Federation of Small Businesses and I am happy to work with it; I am sure that the hon. Member for Birmingham, Erdington and his colleagues will use their good offices to do likewise.

Clause 39

Barbara Keeley (Labour, Worsley and Eccles South)

I beg to move amendment 79, in clause 39, page 28, line 16, leave out subsection (1) and insert—

Sir David Amess (Conservative, Southend West)

With this it will be convenient to discuss the following: amendment 80, in clause 39, page 28, line 30, at end insert—

Amendment 87, in clause 44, page 31, line 31, at end insert—

Barbara Keeley (Labour, Worsley and Eccles South)

There are a lot of new Members on the Committee, and this is the first time, I think, that we have debated amendments across clauses. If the amendments seem to jump about a bit, that is because of how you have selected them, Mr Amess.

Amendments 79 and 80 add a condition to be met before a referendum must be run, which is that the local authority has not already held two referendums in the preceding 12 months. The amendments aim to ensure that a local authority does not have to run too many referendums in one year.

The current financial context is important; we have already touched on that this morning, and we need to keep reminding ourselves of it. Local authorities face swingeing budget cuts of 27% over the next four years, and those cuts are front-loaded in the next financial year. We know, and need to keep thinking about the fact that, some metropolitan councils face cuts of between £40 million and £100 million this next year. The worst cases involve authorities such as Manchester, which has to cut 2,000 jobs, and Liverpool, which has to cut 1,500. In that context, making the cost of running local referendums manageable is important.

I was amused to read some of the predictions of the impact assessment. They are rather naive, and recent written evidence from Henry Peterson agrees:

“The Impact Assessment on proposals for non-binding referendums again has a thin evidence base, and makes big assumptions in its forecast costs for England as a whole. As has been seen with FoI legislation, administrative costs of such ‘empowering’ legislation can grow steadily, as lobbying organisations and the media learn to use such tools.”

The first cost element for a local authority will be that of checking petitions for referendums. The impact assessment estimates the work load for that as the clerical resource, and the rest of the estimate is just one day of a junior manager’s time per year, to check that the issue is local and not vexatious, and one day of a council lawyer’s time. That is really surprising. Overall, the estimates assume that only 10% of all petitions will be valid.

The cost of running referendums is not properly known, but costs for a London borough are estimated at £70,000 if the referendum is run alongside a local election, and up to £250,000 if it stands alone—a significant cost. In his evidence to the Committee, Sir Simon Milton, of the Greater London authority, said:

“We have made a calculation. Because the GLA is a panel and an authority, it would be required to hold a referendum panel. The cost of doing that, if it were to be combined with our quadrennial elections, would be around £5 million. If it were to be taken outside that period, and you would basically have to run a referendum with nothing else going on, that would cost £11 million. The GLA’s annual budget is £70 million, so you can see that that would be quite a disproportionate burden for the GLA to have to carry. One of the things we would urge this Committee and, indeed, the Government to consider is injecting some kind of requirement relating to proportionality or value for money. That would mean we would not be faced with having to hold such a referendum for small issues.”––[Official Report, Localism Public Bill Committee, 25 January 2011; c. 49, Q81.]

Of course, as with almost every other aspect of the Bill, we cannot see whether such a requirement will be specified because the details all await regulations. As the Bill stands, the Secretary of State takes powers over the trigger percentage of petitions, over deciding what is a local matter and whether the referendum question relates to a matter that he has specified, over the conduct of local referendums and the combination of polls at referendums, and over when and where voting is to take place and how the votes cast are to be counted. Doubtless we will touch on those matters in debates on later clauses.

It is worth putting those possible costs alongside the costs for councils running a petitions system. Last week, Department for Communities and Local Government Ministers seemed to think that that was an onerous matter, because they wanted to repeal the duty on petitions. The figures on petitions given in the impact assessment include the small internal costs for councils in reviewing and debating petitions. It costs £1,500 to run an e-petition system, plus £500 in maintenance, £2,000 in ongoing costs and £170 to create and approve a petitions system.

The section on petitions goes into amazing detail, giving figures on how much it costs to run a scheme to respond to petitions—between 0.002p and 0.02p per head—to respond to petitions relating to functions outside the authority and to hold a full council debate on a petition. It also details how much it costs for officers to give evidence to the council’s scrutiny functions, and how much petition reviews and debates on petition reviews cost. However, the ongoing costs of a petitions system were uprated on the basis that the number of petitions would increase sharply, by 50%.

Although the impact assessment gives those detailed figures for the costs internal to the council of responding to and reviewing petitions, no such costs are given for responding to and debating petitions for local referendums. The total costs of petitions nationally were initially given as £4.7 million, and then they dropped to £4.2 million a year after that—or the small sum of £11,898 per council per year. We have full estimates of the costs of running a petition system—we have even counted in the cost of debates in council and of giving evidence to scrutiny committees—yet those costs still amount to only £12,000 per local authority.

I believe that the estimates of how many valid petitions and requests for local referendums will be made are conservative. The cost of running a single referendum per year per local authority is estimated at £42 million nationally, compared with just £4.2 million as the ongoing cost of running petition systems. That means that referendums will cost 10 times as much. That is a conservative estimate.

The reason why I think that the estimates for the number of referendums are conservative is that to guide its assumptions about the likely number of local referendums, the impact assessment used the numbers of local authorities that were required to hold a mayoral referendum as a result of a valid local petition. We know that there has not been a great deal of enthusiasm for elected mayors, but a referendum on a local matter is a different proposition.

Without thinking too hard, I can think of three or four ongoing matters in Salford that could easily turn into petitions for referendums—for example, the closure of the maternity and neonatal unit at Salford Royal hospital, the closure of an NHS walk-in centre in one area and the relocation of its services to the other end of the city at Salford Royal hospital, and local school reconfiguration, which involves local school mergers. One of the schools has been fighting closure since 2008, and would not find it at all difficult to get at least 1,000 people to sign a petition.

I am one of three MPs in Salford, and as I said, I can see three or more current issues that could translate into one authority-wide petition and two or possibly three ward-level petitions. That might translate, across the city, to pressure for two or three authority-wide referendums and six ward or area-level referendums, not the one per year given in the impact assessment. I foresee much more than that. I am sure my hon. Friends can think of a similar number of pressing concerns in their local authority areas.

Many of our witnesses were also concerned about the costs of running local referendums. Councillor Keith Barrow, the leader of Shropshire council, told us that

“referendums are a concern. I hope we will not get too many people triggering referendums, because the costs are outrageous in some instances. I go back to the point that this is our job as local councillors. All my councillors are going into the community and attending public meetings; that is not so expensive, but it does take more time.”––[Official Report, Localism Public Bill Committee, 25 January 2011; c. 30, Q39.]

All that I have mentioned, including the concerns of our witnesses, leads me to be concerned about the cost to councils of running local referendums if there are no safeguards. The amendments would provide a first safeguard, and I hope that the Committee will support them.

Gavin Barwell (Conservative, Croydon Central)

Does the hon. Lady not accept that amendment 87, far from providing a first safeguard, would probably create a situation in which a local authority could refuse to accept any referendum if it wished? It posits a purely subjective judgment about whether the costs are unreasonable. Given its financial circumstances, an authority could judge that any referendum would be too expensive and therefore unreasonable, and could stop any referendum taking place.

Barbara Keeley (Labour, Worsley and Eccles South)

The hon. Gentleman is jumping ahead. I will come to that in a moment, when I will answer his point. We need safeguards. The current safeguard or way of managing the costs issue seems to be to suggest that local referendums be held on the same day as local elections or other referendums. That makes sense until one thinks about it, because it means that if there is a difficult issue in a ward, such as the school closure that I mentioned, the referendum issue becomes the election issue. There is recognition that that is possibly not the right thing to happen.

I turn now to amendment 87. As the hon. Gentleman just said, it adds a new ground for the local authority to determine whether it is appropriate to hold a local referendum based on the total cost of running referendums in a 12-month period. To answer his question, we need some safeguards. I suggest several different safeguards: we could limit the number to two a year or we could look at the costs. We have to find some way.

Two or three authority-wide referendums and ward-level referendums could easily come up in my local authority. They would be very costly. Amendment 87 is a probing amendment. Can the Minister tell us what would happen if a local authority found itself deluged with requests and petitions to hold local referendums?

Brandon Lewis (Conservative, Great Yarmouth)

Does not arguing that we cannot have the referendum on the same day as an election, or have referendums on different issues at the same time because it could be confusing, denigrate the intelligence of our electorate, who can differentiate between an election and a referendum? Having them on the same day and limiting it to once a year would keep costs reasonable.

Barbara Keeley (Labour, Worsley and Eccles South)

I am not arguing that at all. I am saying that the Bill recognises that as a possibility. I am talking about the costs and I am asking Ministers how they would safeguard the situation so that local authorities, such as Salford, do not find themselves with £500,000 worth of costs for running authority-wide referendums or four, five, six or seven ward-level referendums.

The Government have put forward the Bill and it is up to them to say how local authorities can manage the costs. Local authorities will bear the costs. My response to the hon. Gentleman’s point is that if a referendum issue is contentious enough, the election is then simply about that issue. We had a referendum across Greater Manchester on congestion charging and nothing else was considered. I know that it dictated the results in the local elections that were held. The stance that candidates took on that referendum was the big issue.

Can the Minister tell us what will happen if local authorities are deluged with requests and petitions? Even the website ConservativeHome has said that there should be some safeguards. It asks the question:

“What if we ended up with a referendum every two minutes as portrayed in that Peter Cook film The Rise and Rise of Michael Rimmer?”

For those who have not seen it, the film was a cult British satire from 1970 written by and starring the late Peter Cook. His character takes over a polling firm, becomes an adviser to the Conservative leader, then a Conservative MP and then Prime Minister. Michael Rimmer rises and rises in politics—the Minister is smiling—and he is elected Prime Minister by promising a referendum on everything. When finally the public grow sick of referendums, the very last is on the question of having no more referendums and no more elections. So the character becomes president for life. My point is that we need safeguards and I hope that the Committee will accept the amendments.

David Ward (Liberal Democrat, Bradford East)

I accept that the cost of referendums is an issue, but I do not consider it to be the issue. I do not like referendums; I do not like national referendums and I certainly do not like local referendums. I believe that they undermine elected local councillors and that they are another example of micro-management, which is a euphemism for downright interference in the operations of elected local members. There are so many ex-local councillors—indeed, some Members remain local councillors—in the House of Commons; I do not understand why we are appearing so unfriendly and untrusting. I do not understand why we cannot leave local government alone more.

The debate between contesting progressive parties over whether it should be 5% or 10% is laughable. Every Friday in one of my local mosques—if not in a shopping centre—I could get 5%, 10% or even 50% turnout for a referendum on a local community matter. Last week, it made me smile when we were talking about people not wanting to turn out to vote. I can assure hon. Members that people are very keen to turn out to vote in some parts of my constituency. In fact, they are so keen that they do so several times.

I understand the need for a referendum when a high-level elected body, such as this, requires a lower-level elected body to have a constitution, and when minority Administrations elected on a first-past-the-post system stipulate what the rules for the changes in the constitution should be. However, I would not go much further than that. There is the cost of operating a referendum and of monitoring everything else that goes on around that. Again, there is some micro-management taking place in relation to telling local authorities how they must publicise, advertise and promote. That is one step too far.

The issue is important not only because of the cost, but because of the message that we are sending out to local councillors. That message is patronising. Many parts of the Bill are downright patronising—and, indeed, contemptuous of local elected members. I am sorry that I have to say this, but this place has a pretty poor record on probity and standards. I do not think we are so good that we should preach—let alone dictate—to others on many matters that are in the Bill.

Nicholas Dakin (Labour, Scunthorpe)

I am pleased to follow the hon. Member for Bradford East, who puts his finger on the problem at the heart of the referendums issue. What do we really mean by localism? Whom are we trusting? How does that trust balance between local elected representatives and local people? That matter needs working through properly if we are to realise a localism that we can all get behind together. Many hon. Members from all parties have a lot of local government experience and recognise the description that the hon. Gentleman gives of the strength of local democracy and local elected representatives. We need to be careful that we do not undermine our trust in those local leaders by the decisions we make on matters such as this.

My hon. Friend the Member for Worsley and Eccles South drew careful attention to the contradictions within the impact assessments on petitions and referendums. There seems to be double-thinking going on, which is unhelpful in getting matters right. It is obvious that referendums are more complex than petitions because they are a second phase of testing things. Petitions are well trusted and have a strong pedigree within local systems, as my hon. Friend the Member for Birmingham, Erdington reminded us in his excellent speech the other day, which went back to at least the Magna Carta if not before. It was a telling contribution from which we all went away feeling much benefited.

If we are genuine about localism, we really need to listen to what local people and local elected representatives said in their evidence to us. There is a unanimity of concern about the proposals for referendums as they currently lie, which is why it is important that in Committee we put in proper safeguards to protect local people and the present position. My hon. Friend the Member for Worsley and Eccles South referred to Councillor Barrow, leader of Shropshire council, and Sir Simon Milton, who explained their worries. Councillor Mike Jones, leader of Cheshire West and Chester council, also expressed serious concerns and said that

“there are costs of the referendum, which are not cheap. Parish council elections normally cost £1 to £1.50 per person, so this is not a cheap way of doing things.”––[Official Report, Localism Public Bill Committee, 25 January 2011; c. 30, Q39.]

There is clear and proper concern that we must address a duty as we take the matter forward. Costs are a problem, and in some parts of the country it could be a good way of managing costs to have the referendums on the same day as local council elections. However, in the area that I come from we have local council elections every four years, so that does not seem a reasonable way of dealing with such issues.

Alison Seabeck (Labour, Plymouth, Moor View)

Let us say that members of the public put forward their wish for a referendum in June, after an April or May election. If they have to wait a whole year for an outcome, does my hon. Friend agree that that will be deeply frustrating and will not do what it says on the tin about empowering people?

Nicholas Dakin (Labour, Scunthorpe)

My hon. Friend is exactly right. If an issue is right for a referendum, local people will want to address it on a timely basis, and a year is a long time to wait. I suggest that four years is an extremely long time to wait. We cannot alter the fact that referendums will place costs on local people. As the hon. Member for Bradford East said, getting names to spark a petition or referendum will not be difficult on the type of issues mentioned earlier. It is not difficult to spark a referendum in respect of how things are currently written. We need to put safeguards in place.

Local authorities face unprecedented challenges at the moment in serving the people whom they are to serve. There are to be cuts of 28% over four years. Making haphazard further cuts at different times could cause mayhem and put local services on the brink of being unable to be properly delivered. I hope the Government are genuine in trying to work through and arrive at a Bill that allows localism to be delivered properly. We want in place the checks and balances that are necessary if we are to have legislation that will enjoy the confidence not only of people here, as the hon. Member for Bradford East said, but local people in communities throughout the land.

James Morris (Conservative, Halesowen and Rowley Regis)

The hon. Gentleman is making a lot of points about the evidence of local people, but the Bill seeks to address the evidence of the past 30 or 40 years that a huge gap has built up between ordinary people and decision making at a local and national level. Referendums would bridge that gap. He is confusing—perhaps deliberately—an objection on the basis of cost, with his objection, which is about the principle of referendums, and he should be clear about that. The hon. Member for Worsley and Eccles South said that there is clear demand for that direct involvement in decision making, especially in local areas.

Nicholas Dakin (Labour, Scunthorpe)

I have not yet seen any part of the evidence base—it may be that it has been hidden like a needle in a haystack—that says there is a clarion call from local people for referendums. [Interruption.] No, to be honest my hon. Friend the Member for Worsley and Eccles South said that there was regular interest in petitions, and petitions have, as my hon. Friend the Member for Birmingham, Erdington reminded us, a tradition that goes back a long way. They have currency and credibility and they are relatively inexpensive, despite Conservatives’ and Liberal Democrats’ concerns. What I have not seen yet, and would be very pleased to see, is people saying, “Yeah, we want a local referendum. That will make things better.” That did not come through in any of the evidence sessions, and we saw people from across the whole spectrum of beliefs and interests. I did not hear that said once. If that has been said, I would be very pleased to see that evidence, and it would assist us in coming to a proper decision. So far, all I have seen on such evidence is a desert.

Jack Dromey (Labour, Birmingham, Erdington)

My hon. Friend is right to say that the Government are taking away the right of citizens to petition and to have their petition responded to. Does he not agree that what is now being offered is an illusion of empowerment on the basis of direct involvement in decision making? How can that be squared with the situation in Birmingham where, were there not to be a referendum until May, decisions would be made on 1 March to close 43 out of 60 youth centres, by which time it would be too late for the voice of the people of Birmingham to be heard?

Nicholas Dakin (Labour, Scunthorpe)

My hon. Friend makes an excellent point. Indeed, the scope of the referendum allows referendums to take place on things over which the local authority has no control. If a referendum came out in favour of not closing a particular hospital, it is unclear how it would then empower local communities to prevent that closure going ahead.

Brandon Lewis (Conservative, Great Yarmouth)

The hon. Gentleman said that he did not hear any organisations in the evidence session saying that they welcomed referendum. He should take a closer look at some of the written evidence. In my brief look, I have found three organisations—Civic Voice, Keep Britain Tidy and E.ON—commenting on the positive effects of a local referendum and how they welcome it. In fact, Keep Britain Tidy’s criticism was that it felt that 5% was too high, but that figure was introduced by the previous Government for the mayoral referendum, so it is consistent with what we are doing.

Nicholas Dakin (Labour, Scunthorpe)

I thank the hon. Gentleman for his diligence and his contribution. It was very helpful.

Heidi Alexander (Labour, Lewisham East)

It is a pleasure to follow the thoughtful contributions of my hon. Friend the Member for Scunthorpe and the hon. Member for Bradford East. The main problems with the clauses on the referendum reflect some of the wider tensions that exist with the Localism Bill. We talked about the potential tension in the interplay between direct forms of democracy, such as the referendum, and the role of elected representatives. I will say a bit more about that later.

My hon. Friend the Member for Birmingham, Erdington spoke about the illusion of empowerment. This clause—and many of the subsequent clauses and the Bill overall—serves to stoke up expectation in local communities. My fear is that it will not deliver on that expectation. We have touched on the fact that these referendums will be non-binding, so we could have a lot of expense and excitement, and then the local authority turns around and says, “We have taken into account what you have told us in this referendum, but we will not do it for these reasons.” I read the debate on Second Reading this morning. When noting the non-binding nature of these referendums, the hon. Member for Richmond Park (Zac Goldsmith) suggested that this could be little more than an expensive gesture. He has hit the nail on the head with that description.

I fear that the expectations of communities will be enlarged through this process. We want to see credible things happening in our communities for their positive benefit, be it the provision of affordable housing or the development of additional capacity in renewable energy generation, which I know is controversial. However, not only do referendums make such things potentially impossible; they add a huge amount of delay to the process. We took evidence from a number of people who spoke about the current uncertainty; taking six months to put the petition together, and the authority taking another 12 months to respond, means 18 months of potential delay. If we are going to go down this route, everyone needs to do so with their eyes wide open.

I return to the comments of the hon. Member for Bradford East about the tension here with elected representative democracy. We should ask ourselves what the clause says to local councillors and what it says about their purpose. I am reminded of a situation in my own constituency. We conducted a ballot on a controversial regeneration scheme—I accept that a ballot is different from a referendum—and we had huge turnout. However, it came down to 56% of people saying, “Yes, we want the estate redeveloped”, and 44% saying, “No, we don’t”. The result could have been closer, and the role of elected councillors in that situation would be to bring their values and judgment to bear in taking that decision. They should recognise what local people have said. Ultimately, however, it comes down to locally elected representatives making that decision.

Gavin Barwell (Conservative, Croydon Central)

The example the hon. Lady has just given sheds a lot of light on this debate in two regards. First, she argued earlier that it was a weakness in the Bill that the referendums were not binding, but she has just made the case as to why they perhaps should not be. Secondly, what does she read into the fact that so many people wanted to take part in the ballot to which she referred?

Heidi Alexander (Labour, Lewisham East)

Perhaps I did not express myself quite as cogently as I would have liked. I was reflecting concerns about the fact that the referendums are non-binding; I was not necessarily suggesting that they should be binding. I was highlighting a comment that a lot of people have made about the referendums. They want to be involved but they also want contact with their elected representatives. They want to understand the context in which decisions are being made.

I return to a point that has already been made—that it is quite easy to get people to put their names to something. I have stood outside train stations and in shopping centres, and as much as I might try to explain exactly what we are doing, people will say quite quickly, “Oh, yeah, I’ll put my name down for that”. A petition is perhaps accumulated quite quickly, therefore, and perhaps represents a particular minority interest.

How many people will participate in such a referendum? In local elections in the borough of Lewisham, if we get 30% turnout we think we have had a bit of a success. We could spend a lot of time and money conducting such a referendum, perhaps not getting a huge turnout and perhaps having the views of a small minority reflected. What would that do to the planning process? I seek the Minister’s response to questions about whether a referendum on current valid planning applications can take place. That issue might be slightly outside the scope of the clause, for which I apologise; however, when he responds to later debates, perhaps we could return to it. Would a referendum on a large planning application be seen as a material consideration if a planning committee debated that application at a later date?

Gavin Barwell (Conservative, Croydon Central)

If the turnout in the ballot that the hon. Lady mentioned was huge, but in her borough—it is not too dissimilar from mine; we are both south Londoners—the turnout in local elections is considered good at 30%, does that not suggest that such referendums might be a good way to re-engage people in the democratic process?

Heidi Alexander (Labour, Lewisham East)

Perhaps I should have explained in more detail that my example involved 156 properties, or approximately 300 people. Many people were involved in the ballot precisely because the local authority had spent many years talking to them about the options, and they understood what those options were. Those residents were asked a simple yes-no question, but many of the decisions that local authorities make are incredibly complex. Some issues, such as the local development plan for an area, are not necessarily suited to a simple yes-no answer. Perhaps my choice of example could have been better.

My hon. Friend the Member for Worsley and Eccles South touched on the disproportionate nature of conducting referendums in London, which could cost £11 million outside election years, compared with the GLA’s annual budget of £70 million. I reiterate that that could present huge difficulties, and I echo the view of Sir Simon Milton, who spoke of the need for a proportionality or value-for-money test in conducting pan-London referendums.

It is useful to consider the type of scenario in which referendums might be used in London. We know that a huge amount of disquiet exists, for example, about the public transport fares increase. I share that, because I know that average rail fares have risen 6% over the past three years. We could stand outside the stations in London in January and ask passengers whether they would sign up to a referendum on the hike in transport fares—I might like to do so as a good bit of political interest with the current Mayor—but I wonder whether that is right for Transport for London, which is a billion-pound organisation that has to do a huge amount of planning. Although it would be political entertainment for me to have a referendum, that is not necessarily the right way for Transport for London to operate a budget of that scale.

Documents such as “The London Plan”, the strategic planning document for the whole of London, deal with complex matters. They are complex in and of themselves, but they are complex also because they relate to other strategies such as the waste and transport strategies for London. If a referendum is held on one plan, or on one part of that plan, what are the knock-on effects for other planning work that has taken place? I will not take up any more of the Committee’s time, because I have probably said enough already, but I hope the Government will listen to some of my concerns.

Andrew Stunell (Liberal Democrat, Hazel Grove)

We have had a wide-ranging debate, and many reasonable questions have been asked. I will do my best to give satisfactory answers, but I will start by shooting down a piece of nonsense that unfortunately came from the hon. Member for Birmingham, Erdington. He said that we have abolished petitions. We have not abolished petitions; what we did, as the Committee took on board earlier in our deliberations, was to remove a provision that has not yet been brought into force. All existing arrangements about petitions are there.

Jack Dromey (Labour, Birmingham, Erdington)

Will the Minister give way?

Andrew Stunell (Liberal Democrat, Hazel Grove)

I will give way in a moment. I think the hon. Gentleman should wait for the duck to land.

It is still open to the hon. Gentleman’s constituents—and indeed, to him—to collect as many petitions as he wants and to present them to Birmingham city council in exactly the way that has always been permitted. Nothing that we have done removes citizens’ rights to participate in petition-gathering.

Jack Dromey (Labour, Birmingham, Erdington)

Thousands of signatures are being collected on petitions about cuts to Birmingham’s youth services on the one hand, and cuts to its police services on the other. Does the Minister accept that, in future, when such petitions are presented to the council, it will not be under obligation to respond, which violates a tradition that dates back to the days of ancient Greece?

Andrew Stunell (Liberal Democrat, Hazel Grove)

I should have thought that the council would be unwise not to respond. I do not want to revisit our discussions, but any sensible and prudent local authority will have proper regard for the representations it receives from its citizens. Such representations will sometimes come via petitions, the flow of which is unlikely to slow down this year as a result of our provision.

Jack Dromey (Labour, Birmingham, Erdington)

May I press the Minister further for a straight answer to a straight question? Under the Government’s provisions, Birmingham city council will not be under an obligation to respond to its citizens. Is that true?

Andrew Stunell (Liberal Democrat, Hazel Grove)

It never has been. We can go back to the ancient Greeks, stop at Magna Carta or roll forward—petitions have a valuable role to play in our society, as the hon. Gentleman has told us in considerable detail. They do not change—and are not capable in themselves of changing—the outcome of decisions that are taken by others. I want to make it clear that we are discussing non-binding referendums, too.

I shall pick up on the starting point of the debate, which was not introduced until my hon. Friend the Member for Bradford East brought it to our attention. A core question must be answered: to whom are locally elected representatives accountable? The system in this country, which has built up over the years, is that in practice they are accountable to Parliament—to Whitehall, actually, not to Westminster. The entire purpose of the Bill is to change that accountability around, so that they become accountable to their local communities. When they look over their shoulders they should not see Whitehall; they should see their constituents.

Heidi Alexander (Labour, Lewisham East)

Will the Minister give way?

Andrew Stunell (Liberal Democrat, Hazel Grove)

I will, if I may, develop my point a little. My hon. Friend the Member for Bradford East described himself as a localist fundamentalist. Just for once, I am a little more localist and fundamentalist than he is. We want empowered and engaged communities who hold their councils and their locally elected representatives to account. I do not apologise to my hon. Friend for the provision, because it is right. It is part of turning the system around so that accountability is to the local communities and local electors in the area, not to the dictates of central Government.

Heidi Alexander (Labour, Lewisham East)

I thank the Minister for giving way. I began to be reassured as his argument developed. In my six years of being a councillor, however, my accountability was certainly to the electorate and I did not feel the burden of accountability to Whitehall. Does he accept that accountability to the electorate should include all that electorate, some of whom, perhaps, do not vote in local elections? It does not include only those with the loudest voices.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I absolutely agree that it is important for such accountability to represent the whole community. From that point of view, the hon. Lady might agree that a petition collected outside a railway station might be less representative than a referendum of the whole community. Neither is perfect, but in terms of gathering views from the whole community, a referendum would be a more effective mechanism.

Nicholas Dakin (Labour, Scunthorpe)

The Minister has been most generous in giving way.

I concur with what my hon. Friend the Member for Lewisham East said. During my time as an elected member, I was always accountable to the people who elected me in my ward, and I am sure that that is what everyone recognises first and foremost.

Surely, if the Bill is about trusting local elected members, we should just trust them to use whatever mechanisms they and their communities want to use. If a local area wants to use a referendum, it should be allowed to do so. Referendums should not be forced on it by national Government saying, “A referendum is good for everyone, whether you like it or not.” That is the path that I am afraid we are going down.

Andrew Stunell (Liberal Democrat, Hazel Grove)

The hon. Gentleman has completely misunderstood what we are doing. We are not imposing referendums on local government, but providing an opportunity for citizens in their communities to call one if they think it is appropriate. They will do so, one presumes, if they believe that the authorities are not delivering on something that they want to see happen or not happen.

Barbara Keeley (Labour, Worsley and Eccles South)

I mentioned earlier that as the Bill is drafted, the Secretary of State will have power over the trigger percentage of petitioners, deciding what is a local matter, whether the referendum question relates to a matter that he has specified, the conduct and combination of polls, when and where voting is to take place and how the votes are cast.

The Minister has just said that the provision is being created so that councils are accountable to their local people and not to Whitehall. I think he said that they should not be looking over their shoulders to Whitehall. However, local people putting in a petition or request for a local referendum might find that the Secretary of State has decided that that is not a local matter, that he has already proscribed that particular subject or any of the other things that I have just listed. How can the Minister say to us that councils should not be looking over their shoulders when the Secretary of State is trying to take all those powers?

Andrew Stunell (Liberal Democrat, Hazel Grove)

The hon. Lady is trying to have her bread buttered on both sides—she spent quite a bit of her speech telling us that she thought the problem was that there were no safeguards. The Bill does not specify every possible conceivable safeguard, but it introduces a mechanism for developing those safeguards, so that when the proposals come into force, they will be in place.

The hon. Lady will know very well from her time in government that that power will be exercised by the Secretary of State, not by getting out of bed and thinking something up, but in consultation with local government and taking into account relevant factors and considerations regarding the nature of the extent and the mechanics of holding a referendum, some of which have quite rightly been raised in the debate.

I would like to move on to some of the practical concerns that were raised about aspects of the proposals in the clause and more generally in the chapter. A number of points were made about the costings and some criticism was raised about the impact assessment. I remind the Committee that the provision is a new one, so it is covered by the new burdens doctrine, which is an obligation on central Government to ensure that no additional costs falls on local government collectively.

Nick Raynsford (Labour, Greenwich and Woolwich)

The Minister will realise that there has been a long-standing debate between central and local government about just how far the new burdens doctrine compensates local authorities fully for the costs incurred. Will the compensation be based on the appraisal that the Government have conducted, which suggests, as my hon. Friend the Member for Worsley and Eccles South pointed out, rather low costs, or on the actual costs incurred by local authorities in holding referendums?

Andrew Stunell (Liberal Democrat, Hazel Grove)

We shall use the well-developed and well-trusted methods that the right hon. Gentleman supervised so ably when he was a Minister.

Nick Raynsford (Labour, Greenwich and Woolwich)

The Minister will be aware, from the introduction of my question, that while I did my utmost to apply the rules properly when I was the Minister, it did not necessarily satisfy local government, which often complained that it was not getting enough. Will he now please answer my question? Will the compensation be based on the Government’s estimate of cost, which most believe is far below the actual cost, or on the actual cost, which can be quite easily established once the authority has held the referendum?

Andrew Stunell (Liberal Democrat, Hazel Grove)

I am quite sure that once the costs have been easily established, as the right hon. Gentleman says, we shall have representations, and I am sure that the Government will take a view on that at that point.

Ian Mearns (Labour, Gateshead)

We have quite clearly been given an estimate of £21 million a year for the cost on local authorities as a result of the provisions of the Bill. Funding for the new burden’s cost will be provided by the Secretary of State through the spending review. I asked the Minister a question and he had the good courtesy to reply that there is an established formula of £21 million. I must say, however, that that seems a low estimate of the additional cost.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I am aware of the criticism of the costings, but I will pick up on one practical point about the cost of checking the validity of petitions, which the hon. Member for Worsley and Eccles South queried. The impact assessment makes assumptions about the likely staff resource required, and that is based on information provided to us directly by Bury council.

Barbara Keeley (Labour, Worsley and Eccles South)

To be accurate, I did not question that. There are figures in the impact assessment on the clerical cost, but I actually questioned the estimate’s inclusion of one junior manager and one legal officer for one day a year. I must say that, with the level that I can see in my constituency and across Salford, the notion of one junior manager and one legal officer for one day a year only is naive in the extreme. I quoted a witness, who used to be a senior officer in Hammersmith and Fulham and who has been an adviser to the Department for Communities and Local Government, who said that those assumptions were thin. The question of the burden and safeguarding against it is important in the current financial context. That is the point that I was making.

Andrew Stunell (Liberal Democrat, Hazel Grove)

Yes, it is important, and the Government’s estimate will be drawn up with regard to the available evidence and any representations received. I will not invent a new new burdens doctrine here today. The Government and preceding Governments have had a way of approaching the issue, and we shall do it in exactly the same way, taking fair and reasonable regard of the evidence received.

Moving on, the hon. Lady and I took an active part in the referendum campaign in Greater Manchester, which was on whether congestion charges should be introduced. She said, in a slightly disparaging way, that that debate had dominated some local elections and had perhaps altered the outcome—as though that was a bad thing. Yet, I would have thought that this is actually about ensuring that local communities have a voice and can get their view across. The hon. Member for Scunthorpe has said that he is always in touch with his electors. We all like to think that we are always in touch with our electors, which is why none of us ever get beaten in elections. However, if our electors come to a view that we fail to reflect in what we do, we should not be too disappointed when we suffer the electoral consequences. The hon. Lady and I were in a select group of Greater Manchester MPs who took a view that it was a mistake to introduce the congestion charges, and our electorates certainly agreed with us. In the event, the figure in favour of rejection was some 73%, so we were vindicated in that campaign.

What is absolutely clear is that the authorities in Greater Manchester, if they had found a way to avoid the referendum, would have done so, and would have been happy to introduce the congestion charges. The referendum was a useful safety valve, which I do not pray in aid of referendums in all circumstances, but I make the point that elected representatives sometimes get out of touch with the real world and with their communities, so it is right for a mechanism to be in place to give them a sharp tug on the reins and a reminder of who is really in charge. Coming back to my starting point, that sharp tug is surely much better done through such a mechanism than through some Secretary of State issuing a directive that thou shalt or thou shalt not have congestion charges in Greater Manchester.

Ian Mearns (Labour, Gateshead)

The contradiction that I am finding difficult to come to terms with is that Government Members have said that what we are talking about is an additional way for local elected members to be in touch with their communities, but from the inherent estimate of costs, which the Minister has given us and is in the Bill’s explanatory notes, they are not expected to do so too often. That seems to be a contradiction. The provision adds the extra layer of contact, which will be rarely used, given the inherent costs of such things as referendums.

Andrew Stunell (Liberal Democrat, Hazel Grove)

Opposition Members seem a bit betwixt and between. They are not quite sure whether there will be so many referendums that every local authority will be bankrupted, or whether the measure is tokenistic, ineffective and a complete waste of time.

Keeping in touch with one’s electorate is worth spending a little bit of money on. It is part of the democratic cost in this country. I would not expect the Opposition to advance the argument that we are better having elections every 10 years because we could save so much money. Surely Opposition Members recognise that there is a cost and this is part of it.

Several hon. Members rose—

Andrew Stunell (Liberal Democrat, Hazel Grove)

I have a choice. I give way to the hon. Member for Gateshead.

Ian Mearns (Labour, Gateshead)

I am grateful to the Minister for giving way, but I need to come back on the point. We are not betwixt and between—the Government Members are. My point is that I do not anticipate the Government estimate of £21 million being at all relevant, because the power—if it comes to fruition—would be widely used in lots of areas around the country. I do not have a problem with that, as long as the Government estimates are exactly right and as long as enough safeguards ensure that the power is not widely abused.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I am sure we will talk more about the safeguards as we go on through the debate. However, on the cost, clearly at some future date it will be discovered whether our estimate, as set out in the impact assessment, is sensible and reasonable, or whether some other estimate needs to be taken into account, in which case that evidence will indeed be taken into account.

I might, inadvertently, have given the Committee the impression that the petitions duty that we abolished had not come into force. Of course, it did come into force, early last year. What we did was to take away that bureaucratic machinery, put in place at great expense, and to say that the pre-existing petitions regime remains fully in course.

Heidi Alexander (Labour, Lewisham East)

I am interested to hear the Minister talking about the bureaucratic machinery he is taking away for petitions, and yet people could be forgiven for thinking that the clauses in the Bill on referendums invent a totally new bureaucratic machinery.

Andrew Stunell (Liberal Democrat, Hazel Grove)

We are trying to keep the machinery as unbureaucratic as possible, but the Opposition want safeguards. The safeguards will come in the codes, which will be developed in consultation with local government and which my ministerial colleagues and I intend to be as unbureaucratic as possible.

Let me pick up the question about the timing of referendums. The Bill does not say that you have to wait six months or a further year. It sets a time frame within which the referendum must be held. I am reminded of the situation in Switzerland, where in some of the cantons they have a referendum day every six months, and all the referendums which have accumulated in that canton are dealt with in one day. It might well be that referendums will coincide with local elections, but, as the hon. Member for Scunthorpe said, some places only have four-yearly or biennial elections, in which case a separate provision would have to be made.

Jack Dromey (Labour, Birmingham, Erdington)

The Minister has said, “Let the people be heard”—subject, of course, to the Secretary of State reserving the power to use his Henry VIII ability to intervene. May I press the Minister further on this point about the illusion of empowerment? Tomorrow we will be debating in this House the proposal to shut down all of the advice services of the Citizens Advice Bureau—the generalist advice services. The final decision will be made on 1 March. The elections will not then take place until May. We propose that the referendum should coincide with the elections. In those circumstances, should the council agree to defer any decision until after May?

Andrew Stunell (Liberal Democrat, Hazel Grove)

It is for the council to decide how it proceeds, and one might make the same argument about a petition or any other representation made. The council has a statutory duty to reach decisions on a certain timetable; it will, I am sure, take into account all relevant considerations before it takes that decision.

Nic Dakin rose—

Jack Dromey rose—

Andrew Stunell (Liberal Democrat, Hazel Grove)

I think the hon. Member for Scunthorpe was left out last time.

Nicholas Dakin (Labour, Scunthorpe)

The Minister says, “It is for the council to decide how it proceeds”. That is a very strong statement. Why not let councils decide whether they want to have referendums as part of their infrastructure of contact with local people? That would be truly localist and allow differential ways of this developing within the current legislation.

Andrew Stunell (Liberal Democrat, Hazel Grove)

Of course, the Bill does exactly that. There are three ways of having a non-binding referendum. One is triggered by the majority of the council; one is initiated by councillors within a smaller area if the referendum is planned to be within that smaller area—that in turn has to be signed off by a majority of the council. The third way—the way on which we have spent our time this morning—is one that is initiated by the local community via a petition. So—I think I understood the hon. Gentleman’s question—the mechanism he is seeking is in the Bill. The question is whether an additional mechanism should be in the Bill. That is what we are debating: a trigger by the local community.

Jack Dromey (Labour, Birmingham, Erdington)

If the Minister is saying that the council will make its decision on 1 March, is it not then a cruel confidence trick to pretend to communities that they can have their say in a referendum in May, two months after the decision is made by the council?

Andrew Stunell (Liberal Democrat, Hazel Grove)

No, of course it is not. I am surprised that the hon. Gentleman is so naive as to say that. If he were to spend this next weekend collecting signatures on a petition—as no doubt he will be—and if that petition is presented to the council next week—as no doubt it will be—is he performing a naive confidence trick on the people who sign those petitions? Of course not. He does not believe that, and nor do I. The referendum is about establishing what the community believes is the right solution in response to a question. It is then quite properly the responsibility of those who hold the power of decision-making to take that into account as a material consideration. This is a non-binding process, just as a petition is a non-binding process.

Brandon Lewis (Conservative, Great Yarmouth)

Does the Minister agree that Labour Members’ problems and confusion arise from their having completely misread this part of the Bill? They have not understood that the referendum power is not about giving power to councils; it is about empowering local people, so that they have their say.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I thank my hon. Friend, who made that point more eloquently and succinctly than I have so far managed to do.

The amendments are mistaken in their intention, and would not achieve what they set out to do. I urge the Committee to reject them, and in due course to support the clause with enthusiasm.

Barbara Keeley (Labour, Worsley and Eccles South)

That is helpful in crystallising what we are debating. The debate has ranged further than my amendments, probably because it has been the first one on referendums today. It boils down to a great confusion that I see among Government Members about removing the duty to respond to petitions, which has only just been introduced, has gained traction, and is cheap, popular and flexible, but which is being replaced with something that the Government have not done a good job of costing and is a potential burden. We now hear that the Government are not prepared to accept any of the sensible safeguards suggested in our amendments.

The hon. Member for Great Yarmouth sees the provision as empowering local people to have their say. I was a councillor for nine years, and this is my sixth year as an MP. I understand the desire of local people to have their say, and it is important that we all recognise that, but a non-binding advisory referendum will not satisfy them—unfortunately, it will not.

Henry Smith (Conservative, Crawley)

Will the hon. Lady give way?

Barbara Keeley (Labour, Worsley and Eccles South)

Let me make some progress.

I referred earlier to the referendum in Greater Manchester on the congestion charge. It was a binding referendum, and the turnout in Salford was the highest—60%—in Greater Manchester, because council leaders had agreed to make it binding. That is the difference. What people really want, in having their say, is to be listened to. The worst of all worlds would be for the council to have a duty to operate something that might run into hundreds of thousands of pounds a year and for it, for other reasons, to have to turn round and not give it effect. Once the referendums are up and running, they will not be a popular mechanism to let people have their say; they will become another source of frustration, which arises when people have their say and feel that they are ignored.

Henry Smith (Conservative, Crawley)

Does the hon. Lady not accept that referendums are more objective, empirical and scientific than petitions, which are more subjective, although they can be useful?

Barbara Keeley (Labour, Worsley and Eccles South)

I do not think that we have had enough practical experience of referendums to know. The assumptions in the impact assessment are based on mayoral referendums, which we do not have a great experience of in this country. I have experience of a particular and heated debate, as does the Minister. Like the council tax referendums that we will come on to later, the difference was that it involved people paying out money every day to achieve the transport aim of reducing congestion. One thing that is known is that a focused debate on something that will cost more—an extra tax, if you like—will exercise people.

Some of the issues that I have mentioned will also exercise people. The debate on the closure of our maternity unit raises very difficult issues for local people. The closure of a walk-in centre, which is proposed in a ward in my constituency, has focused debate. To return to the point that I made earlier, petitions cost less than £12,000 per local authority on the Government’s estimate, but the proposed system might cost £200,000 to £250,000, and we have no real confidence in those estimates.

We have heard concerns raised by members from across the Committee. The hon. Member for Bradford East made it clear that he does not agree with referendums. It is important to make it clear, as we approach the Division, that we do not object to referendums, but we are concerned and we believe that there should be safeguards. We are not confident about the estimates, and we are not the only ones—we have heard many concerns raised, and my hon. Friends the Members for Lewisham East and for Scunthorpe have touched on those difficult issues, too. The Government are suggesting that local government does something that they are not adopting for Departments. Many people in local government are asking why, if there is such enthusiasm for referendums, the Government will not allow referendums to be run on particular issues. If there were a national referendum on selling off the forests, the Government would find themselves responding to a high level of comment.

I have already expressed particular concern about the Secretary of State’s powers over referendums. That makes matters not properly accountable to the local population, because they will have to look over their shoulder to Whitehall. It will not keep people happy if, once they have put their petition in, they do not get their referendum because the Secretary of State says that the matter is not local.

We are not convinced on the costings. We have something that costs local authorities a small amount—£12,000—but the Government want to remove the duty to respond to that and bring in a system which I estimate will cost £128,000 an authority. That is an underestimate. I can see it costing £500,000 or more. That is a concern, because we are so stretched in many of our cities, particularly in the north of England. The context is difficult. There are different views. We are not against referendums, but there has to be a realistic view taken on the costings. There is no point having figures of burdens that are half or a quarter of what they will be.

Gavin Barwell (Conservative, Croydon Central)

I will detain the Committee for a minute or two. The hon. Lady has tried to clarify the Opposition’s position, and it certainly needed a lot of clarifying, because at various points in the debate I was not sure whether they were against referendums all together, whether they were arguing that they should be binding, rather than advisory, or whether they were saying that safeguards needed to be applied. A case can certainly be made—the hon. Member for Bradford East made it—for a pure representative democracy, but it is a rather bizarre argument to make in current times, when public satisfaction with politicians and our representative democracy is not very high. Anything to have a greater involvement of people is to be encouraged. The hon. Member for Worsley and Eccles South referred to the referendum in Greater Manchester, where there was a turnout of 60%. I cannot imagine that many local authorities in the country achieve that in their local elections.

There has been a lot of support expressed by the Opposition for petitions vis-à-vis referendums. While petitions are an important and useful device, they do not have the benefit of showing both sides of an argument or how many people are on either side of the argument. As the hon. Member for Lewisham East said, it is easy to get a few people to sign a petition, but it does not reveal whether a significant chunk of people in the community take a contrary view.

On whether a referendum should be binding, if large numbers of people vote for a proposition in a referendum, there will be a lot of pressure on the council to follow that viewpoint, unless there are very strong arguments as to why it should not seek to do so. My main objection to these amendments is that they miss the point on safeguards. The key safeguard is the percentage threshold. I am surprised that we have not had a debate about the 5% figure.

Barbara Keeley (Labour, Worsley and Eccles South)

We are coming to that.

Gavin Barwell (Conservative, Croydon Central)

I know that we will deal with that later, but these amendments miss the point. If the percentage threshold is correct and several petitions cross that threshold within a year, there is no reason why there should not be several referendums, if enough people are concerned about an issue. Amendment 87 is a wrecking amendment, which would allow a council to disregard any petitions that were put forward.

The concerns about costs are misplaced. I can speak only in relation to my authority, but I can only think of one petition, in 12 years on the London borough of Corydon, which passed the 5% threshold. Croydon has an electorate of some 240,000, so a 5% threshold would need 12,000 electors to sign a petition. The Croydon example is relevant, because the Labour-controlled Croydon council chose to hold referendums on council tax in 2000 and 2001. It had a significant turnout, and although the referendums were not binding, the council followed the results of the referendums in both those years. In 2002, after the London borough elections, the Labour council proposed a 27% council tax increase. Surprise, surprise, we had no referendum on that. I am sure that the people of Croydon would have been grateful if the provisions my hon. Friends on the Front Bench are seeking to introduce in the Bill had been in place at that time, so that they could have done something about it.

The hon. Member for Lewisham East raised two points of concern, on which I would like Ministers to reflect. One was in respect of planning and licensing applications, which does raise an issue. If a referendum were proposed on a particular planning application, there are issues about a potential delay in adjudicating that application. Clearly it would be difficult for the planning committee to proceed and give planning permission to something on which it knew there was a petition for a referendum. There are also issues about the quasi-judicial nature of those decisions. It seems perfectly reasonable to have a referendum on an issue that is a normal one for political discussion and debate in a council chamber. There is a difference in relation to planning and licensing applications.

Heidi Alexander (Labour, Lewisham East)

When we took evidence from external witnesses some uncertainty was expressed by representatives of house builders about the provisions of the Bill in this respect. Would the hon. Gentleman join me in asking Ministers to clarify this aspect of the Bill, that is, referendums in relation to planning applications?

Gavin Barwell (Conservative, Croydon Central)

I agree with the hon. Lady. I think my colleagues on the Front Bench are keen to have these provisions apply to as wide a range of decisions as possible. We do not want to get into territory where the Government are constraining things too much. There is an issue in relation to these two categories of decisions, where councils are exercising a quasi-judicial function, rather than the normal political decisions they take. The hon. Lady’s second point was about the Greater London authority. The issue there is an authority covering a very large population, so the costs of holding a referendum are going to be considerable. Because the authority is strategic in nature, the budget of the authority is limited. The situation can arise where the cost of holding the referendum—

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman will understand—we have had discussions about it—that matters for which the Greater London authority is responsible, such as transport, have huge budgets. It is perfectly foreseeable that there could be a demand for a referendum on fare increases, either on the underground, buses or trains in London, and it would be very difficult to argue why there should not be a referendum on something of huge public concern such as that.

Gavin Barwell (Conservative, Croydon Central)

I take the right hon. Gentleman’s point. I think there is a slight difference between a referendum on an issue that is the responsibility of the Metropolitan Police Authority or Transport for London, which have much larger budgets, and one on a core GLA area of responsibility. I am not suggesting that we should preclude referendums in these areas. I would just like the Front-Bench team to look at the particular case of the GLA, which I think is different from other local authorities in some regards.

Nick Raynsford (Labour, Greenwich and Woolwich)

On a point of order, Mr Amess. Will there be an opportunity for a clause stand part debate? If so, I will defer my remarks until then. Given the wide-ranging nature of this discussion, if you are going to rule that we have covered the issues without a clause stand part, I would beg your leave to make my remarks now.

Sir David Amess (Conservative, Southend West)

Order. I have been listening very carefully but I am still inclined to allow a clause stand part debate.

Nick Raynsford (Labour, Greenwich and Woolwich)

In which case, I will make no further contribution to this debate.

Barbara Keeley (Labour, Worsley and Eccles South)

I think we have some further questions. I am finding it rather confusing, Mr Amess. We are not only having a clause stand part debate, but we are jumping about between clauses. I understand many members of the Committee are not used to that. A number of questions were just asked of the Minister; it is not clear when he is going to answer. Other Members and I have raised matters to which we have not had answers. We have just had some questions that I was going to put. There is the question of costs and safeguards that I was talking about in relation to the GLA. I had two or three questions about that, which the hon. Member for Croydon Central has just put. The situation is difficult. Does the Minister want to answer them now?

Andrew Stunell (Liberal Democrat, Hazel Grove)

I will take your advice, Mr Amess, but it seems that those matters are covered by clause 44.

Sir David Amess (Conservative, Southend West)

Order. All remarks made by members of the Committee must always relate to amendments proposed. As for Ministers responding to the many questions that are asked, it is entirely a matter for Ministers whether they respond to each and every question. It is not a matter for the Chair. If the Minister decides that he does not want to respond to a question, so be it. There is nothing, within reason, to keep hon. Members from continuing to press the Minister, but if the Minister does not want to respond I am afraid that is the end of the matter.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I took that to be a steer. Clause 44 refers to the grounds for determination and raises various points that we might discuss in due course. Some members of the Committee have already referred to what they see as the Secretary of State’s outrageous powers to decide what is and what is not an appropriate issue. This will not be a post-hoc thing—it will not be the case that the Secretary of State will find out that there is a petition on x and then decide that x is not appropriate. There will be a prior set of guidelines, which, as I have already described, will be drawn up, in consultation with local government and other interested and appropriate bodies, to determine what should and should not be included.

Members have rightly drawn attention to some of the issues that need to be considered in relation to planning and licensing, and to trans-London issues. I do not think that the Committee will be surprised to hear that we have received representations from the Mayor’s office on that. These are all matters for further consideration.

Barbara Keeley (Labour, Worsley and Eccles South)

I think that the confusion results from the fact that amendment 87, which I tabled, relates to clause 44, and that has drawn us into a debate on that clause, whether we wanted it or not. Will the Minister respond specifically to the points raised by Sir Simon Milton, which I quoted earlier? My amendments have built-in safeguards, one of which is that a local authority should not have to run more than two referendums a year. The impact assessment’s assumption is that local authorities will run only one, so I do not understand why the Minister objects to an amendment for two.

Cost is another issue and it ties in with what Sir Simon said. He asked the Committee and the Government to build some kind of value for money or proportionality element into local referendums so that they did not find themselves running an expensive pan-London referendum on small issues. My amendments centre on cost safeguards and, given the cost of £5 million or £11 million, a response should be given to that point.

Andrew Stunell (Liberal Democrat, Hazel Grove)

The hon. Lady is absolutely right that amendment 87 relates to clause 44, and I apologise for not picking that up clearly. She proposes a strange provision, because the fact that the impact assessment assumes that, on average, there will be one referendum per local authority does not mean that there is any restriction. There might be three in one area. There might be a ward-based one or a borough-wide one. It would be wrong to give this opportunity to local communities and then say, “You are not time-barred or issue-barred, but number-barred. Someone else got one in ahead of you, so you cannot have one of your own.” I do not think that that is the right approach at all.

Barbara Keeley (Labour, Worsley and Eccles South)

If the Minister reads amendment 79, he will see that it relates to the grounds upon which a local authority “must” hold a referendum, one of which is that it will not have already run two in one year. It is, of course, always optional. As the Minister has said, good local authorities can run referendums if they want to, but they should not be forced to run more than two a year. That could cost, as has been mentioned, in the region of £150,000, £170,000, £250,000 or more.

Andrew Stunell (Liberal Democrat, Hazel Grove)

We do not accept that argument. We think that it is right for local communities to be able, within the safeguards and guidelines that we have talked about, to commission or requisition a referendum, provided that they have reached the threshold number. It should not be for the local authority to disqualify that on the grounds that it thinks it has done too many already.

There will still be petitions, and I would have thought that any prudent local authority would use the ones that came to its notice in order to judge whether it needed to reflect further upon the issues it was considering as a way of deflecting, responding to or heading off the possibility of some referendums. There is a connection between the mechanisms, which I am sure a far-sighted local authority would take stock of.

I do not think that amendment 87 takes the right approach at all. The Government certainly recognise that referendums will cost money, and that local authorities will bear the cost of holding them. I repeat that we are committed to ensuring that additional burdens on local authorities are funded in accordance with the new burdens doctrine, which is long-established and much-used.

Barbara Keeley (Labour, Worsley and Eccles South)

I beg to move amendment 77, in clause 39, page 28, line 38, at end insert—

Sir David Amess (Conservative, Southend West)

With this it will be convenient to discuss amendment 78, in clause 50, page 33, line 40, leave out

‘in such manner as it thinks fit’

and insert—

‘in print and online in a format easily understandable and useable by communities’.

Barbara Keeley (Labour, Worsley and Eccles South)

We do not need to spend long on the amendments, but they deal with an important point relating to communication to enable the local community to understand a new process. Amendment 77 would require local authorities to publish on their websites and in print an accessible guide for communities to the referendum process. There is a tendency—certainly at the Department for Communities and Local Government —to make things available only on websites. We must remember that not everyone in the population has access to the internet, even though many do. Amendment 78, which jumps ahead to clause 50, says similarly that the local authority should publish such a document in print and online in a format easily understandable and useable by communities.

Amendment 77 relates to the process. It involves a guide to referendums, so that local people understand them. It could help local authorities significantly, if people do not understand that there is a difference between petitions and referendums in that people must be locally based. Members have mentioned people standing outside railway stations and capturing rail users, but if those rail users happen to live in different places, that might not be appropriate, as a ward-level referendum includes only the people who live in that ward. The amendment could help local authorities avoid having to handle and check lots of petitions that turned out not to have the right signatures or not to be about a local matter. I hope that the Committee will support the amendments.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I am sorry to disappoint the hon. Lady. We do not propose to support the amendments, as they place an extra duty on local authorities and prescribe the format for publishing information. The amendment seems to go back to the bureaucratic and cumbersome petitions duty imposed on councils by the Labour Government. What we are putting in place is a flexible and straightforward scheme which enables local people to have their say on issues that matter to them, and the Opposition are trying to spell out in detail exactly how that scheme must be run by local authorities. It tries to prescribe how local authorities should publish information and it removes local authorities’ discretion to publicise as they see fit. If a petition reaches the town hall with the names of 5% of the electorate on it, it is extremely likely that a very much larger proportion than 5% of people are fully aware of the fact that a petition is being brought forward. It seems to me that one of the lesser problems is going to be giving publicity to the existence of the petition, which will clearly relate to an important and significant issue if it has reached the 5% level, and probably the essential point to give publicity to is when the vote is going to be.

Of course, anything that is published should be easily understandable and usable, but we do not believe that telling authorities how they do that is the right way to go. Local authorities produce plenty of publicity on a very wide range of issues, nearly all of it is good and appropriate and they do not require legislation in order to get it right. Hon. Members have talked about trusting local government, about giving them freedom to get on with it; that is what the Localism Bill is about and we do not believe that these provisions contribute to that process at all.

Barbara Keeley (Labour, Worsley and Eccles South)

I am surprised, I have to say. I have detailed twice, but I think I need to say again, that the Secretary of State wants to take powers in this matter of a trigger percentage, deciding what is a local matter, whether the question relates to a matter he has specified, conduct, combination of polls, when or where voting is to take place and how votes are to be counted. If anything is telling local authorities what to do about referendums, this chapter of the Bill is telling them. As I mentioned last week, these amendments were put forward by a coalition of charities headed by Age UK and they are simply put to try to make sure that information is available to the community. We think that that is important, so we will push the amendment to a vote.

Nick Raynsford (Labour, Greenwich and Woolwich)

I want to talk a little about the clause as a whole, because I believe it is a clause that has been put together without sufficient thought. While the principle of referendum may be appropriate in certain circumstances, this has the hallmark of an unduly centralist imposition that will cause alarm and concern as well as cost to a significant number of local authorities. That view has been articulated on both sides of this Committee. The hon. Member for Bradford East has expressed his concerns in just the same way as some of my hon. colleagues on the Opposition side. We have also heard from the Government side of the Committee a view that this is the key to reinvigorating local democracy. The hon. Members for Croydon Central and for Halesowen and Rowley Regis have broadly expressed that view, and I hope I do not do their argument injustice. The Minister has also articulated his opinion.

I find it difficult to believe that the imposition of a further referendum will reinvigorate local democracy, and I ask the hon. Member for Halesowen and Rowley Regis to reflect that when the previous Government were in power, a lot of referendums were held. In the early days, we had referendums on big constitutional issues such as devolution to Scotland and Wales, and the introduction of the Greater London authority. We had referendums on mayoral constitutions and on the council tax, and there was the referendum that has been referred to in the Manchester area on the introduction of a congestion charge. Despite those referendums, I do not see much evidence that local democracy has been reinvigorated. I may be wrong, but I do not think the hon. Gentleman would say that the experience of holding those referendums over the past 13 years has done the trick. I do not say that maliciously; I think that referendums have a part to play but they are not a magic bullet. The idea that holding a referendum will provide a magic bullet and restore local democracy seems to be a false assumption.

There are also dangers with referendums, some of which have been highlighted in the debate. There is the risk that a referendum may play to highly vocal pressure groups acting on populist issues that appeal to sections of a community but not necessarily the whole community. Residents in one or two wards may hold a strong point of view that is not shared by those in the whole local authority area. Because of the scope for holding referendums not just on the basis of local authority boundaries but within individual polling districts or wards, the danger is that we could end up with some unsatisfactory outcomes. Particular vocal groups may campaign on one cause, and although the local authority and the residents in the whole area may take a different view, they would not be able to articulate it fully because the referendum would be held only in that narrow area.

There is the potential for whipping-up feeling on unpopular causes. We have referred in the past to issues such as the location of incinerators, or the creation of necessary social provisions such as hostels for people who may not be terribly popular in the community—those with alcohol or drug abuse problems, for example, or with similar issues. There is scope for divisiveness due to referendums that are used by small interest groups against the wider interests of the local authority area as a whole. As the hon. Member for Bradford East pointed out, that can undermine the position of local councillors who are elected to represent their area. It is not a magic bullet or a universal benefit. There are potential difficulties.

David Ward (Liberal Democrat, Bradford East)

One of the consequences of moving forward with this provision is that it could take away a differentiating factor between good councillors. I am sure that the hon. Gentleman as a constituency MP, and many others who have been councillors, constantly survey local residents over and over again. One could say that that is a referendum. It is a way of finding out about local views on local issues that affect people. It is an effective and cost-effective way of finding out about local opinion.

Nick Raynsford (Labour, Greenwich and Woolwich)

I agree with the hon. Gentleman. I add the caveat that I do not issue “Focus” leaflets although I use other means of adopting the connection with my electorate. However, the principle that a public representative should engage in regular communication with their constituents in order to ascertain their views and get feedback is right. Local councillors who do that are engaging properly with the public, and we should encourage such provisions.

The Minister’s defence was somewhat shaky. He argued in the context of amendment 79 that the petitions could help alert local authorities to issues that might subsequently be the subject of a referendum. I think that I cite him correctly. If that is so, why on earth are the Government saying, “petitions bad” and removing the duty to respond to petitions, “referendums, good” and imposing a duty to hold them? That has all the hallmarks of an ill-thought-out clause that has been shoehorned into the Bill because of the slightly bizarre year-zero assumption that everything done by the previous Government was wrong and that everything done by the new Government will be right.

I am sorry to disillusion Government Members, but the Minister articulated this view himself at one stage: the reality of constitutional change is that we learn gradually, we make changes, and we do so in an incremental way. For heaven’s sake, we should be saying that there is scope for the use of referendums in certain circumstances, particularly on important constitutional matters when people should be consulted. However, referendums are not problem-free, and other mechanisms can help in the process, including the petition.

We should not be pushing through a partisan measure that does not command the support of all Government Members in the House. We should be giving further thought to how referendums can help to engender greater public involvement. We should also consider how to refine the petitioning process to ensure that it can make a contribution. We should consider other ways of encouraging communications of the sort that the hon. Member for Bradford East rightly identified, although that should obviously be left to the local representative. We should not be issuing diktats on that front. The approach of an intelligent Government would be to improve public participation, realising that it would not be right to impose it from above with central diktats saying that certain things had to be done.

If the clause is subject to a Division, I hope that the Committee will vote against it. That will give the opportunity for more constructive thought on how to advance an agenda that I suspect all of us believe in—how to enhance local engagement in politics, how to improve the quality of local democracy, and how to do it without imposing unreasonable burdens.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I thank the right hon. Gentleman for his contribution. I would probably agree with something approaching 50% of what he said. He erected something of an Aunt Sally, and had a good go at it, but he was obviously right to say that it is not a magic bullet.

The heart of the Localism Bill is not about introducing non-binding referendums. It is about turning power around, so that local communities rather than Whitehall and Westminster have the power to make their local authorities accountable. This provision is a small part of that jigsaw. However, I cannot accept the right hon. Gentleman’s comment that it is a centralist imposition. We are opening a door that local communities can go through; they can use it to increase the accountability of public bodies. That covers not only local councils; the point has been made that it could often cover matters relating to other public bodies. We are opening a door, not imposing some kind of oppressive regime.

The right hon. Gentleman asked whether referendums had been effective in reinvigorating local democracy. If one distinguishes between acute and chronic, it has to be said that in Greater Manchester the referendum had a dramatic effect, with higher turnouts than were achieved in local government elections throughout its 10 metropolitan boroughs. My hon. Friend the Member for Croydon Central mentioned referendums in Croydon; again, there was a substantial turnout.

We do not claim that it is a one-size-fits-all magic bullet. It is not imposed on communities. It is an opportunity for communities to take. The extra provision that seems to have really aggravated Opposition Members is not the referendums duty, but the possibility that referendums might be generated by local residents rather than by town halls. Surely, they can see that it is appropriate for local residents to have the capacity to commission the referendums, instead of them simply having a process dumped on them by their councils when they consider there to be an issue to have a vote on and other matters are ruled out.

The right hon. Gentleman also said that he was concerned about the difficulties there would be with sectional interests and wards voting one way and council areas another way. That is so different from petitions is it not? One goes out to collect a petition and the only people one encounters are those in favour of whatever issue is on the petition. The other people just walk by and do not sign or say anything because there is not a petition against that very issue. The sectional interests problem exists—it is real and I do not dismiss it—but it is just as real for a petition as it is for a referendum. In fact, I suggest to him that it is rather worse.

Of course, there is a link. A responsive council that has councillors who are fully engaged with their communities and who take those concerns into their councils will find that it gets fewer petitions and probably no requests for referendums. That is because there is an easy passage for community concerns through locally elected representatives to a responsive council. The problem, which I am sure the hon. Member for Worsley and Eccles South would not deny, is that we might put a different coloured badge on the politicians concerned, but we all know that, in different places, that ideal model does not exist. There are gaps in the representative links between the community and councillors and, indeed, between councillors and the town hall. That is when petitions will get written and requisitions made for referendums. If one effect of our provision is that local councils will work harder to be more responsive to avoid having referendums, surely the Opposition can see that the provision is worth while. I urge the Committee to support the clause.

Barbara Keeley (Labour, Worsley and Eccles South)

I will try to be brief. I shall return to the context. As we take the measure forward, we need to think about the context because it is so important in terms of the costs and the need for safeguards. As my hon. Friend the Member for Birmingham, Erdington said, it might be that some hon. Members are not in this situation—I am sure that the cuts that my hon. Friend was talking about are not the main topic down the local pub in Tunbridge Wells—but the context of the measure is the cuts this year, next year and for many years. People are losing their jobs, facilities are closing and the services that people value are being cut back. That is the issue. When local referendums are introduced, many of our local authorities will be living with that situation all the time.

Brandon Lewis (Conservative, Great Yarmouth)

Will the hon. Lady give way?

Barbara Keeley (Labour, Worsley and Eccles South)

No, I want to make some progress. The Minister talked about having a responsive council, but local referendums will not just be triggered by empowered citizens; they will be triggered by councillors. That mechanism is also there. Referendums could become a constant running battle. Every council has some opposition. Sometimes the opposition is very difficult to handle; for example, there are minorities from political parties that none us would be particularly comfortable with.

Andrew Stunell (Liberal Democrat, Hazel Grove)

May I draw the hon. Lady’s attention to the fact that a petition request from a group of councillors still has be signed off by a majority of the council. A referendum is not called automatically.

Barbara Keeley (Labour, Worsley and Eccles South)

I understand that. With the difficult cuts agenda, I can foresee a situation where local authorities will be in a constant new battle about having a referendum on this cut, that cut or the other cut. I reiterate that the Opposition are not against local referendums in principle. However, I am disappointed that the Government are not listening to any arguments about the need for safeguards, or to our concerns. We have reiterated the substantial concerns of people from outside about costs and the need for safeguards.

I shall return to the matter of the Secretary of State’s powers to regulate. No details on how that will work are available to the Committee. The Minister is saying what I described last week as, “It will be okay, because we say it will be okay,” and that is not good enough. Unless he is prepared to give assurances that it will not be a costly burden, and that there will be some safeguards—and details of what the safeguards will be—we will vote against the clause, because Ministers need to be more prepared to listen. We have further debates on local referendums, but the Minister must be prepared not simply to reject every amendment but to consider some of the sensible things being proposed. Even if the Minister does not like all the detail, if there is merit in them he could take them away and think about them. We cannot have every amendment spurned as not needed with something so untested.

Clause 40

Stephen Gilbert (Liberal Democrat, St Austell and Newquay)

I beg to move amendment 123, in clause 40, page 29, line 10, leave out subsection (2).

Sir David Amess (Conservative, Southend West)

With this it will be convenient to discuss the following: amendment 81, in clause 41, page 30, line 2, leave out ‘5%’ and insert ‘10%’.

Amendment 82, in clause 41, page 30, line 3, leave out subsection (2).

Amendment 83, in clause 41, page 30, line 3, leave out ‘or lower’.

Stephen Gilbert (Liberal Democrat, St Austell and Newquay)

Amendment 123 takes away from the clause the ability of the local authority to vary the percentage at which a petition that has been duly signed by electors is accepted. I do not intend to delay the Committee for long. I have two observations to make. This might be a slightly techie point and I may have misunderstood it, but I do not think the clauses need it in the sense that, as the Minster has already told us, the council will be able to choose to have a referendum by a majority of councillors pushing for one, so we do not need to have the alternate provision that they can choose to vary the number of electors within the percentage that is deemed to be the trigger threshold. They can simply get on and do it. Will the Minister tell us whether the powers already exist in another part of the Bill to achieve what clause 40(2) is trying to achieve?

That is the techie point. My second point is slightly more abstract. It does not seem right that if we establish a threshold, we can then, on the other hand, ignore that threshold. The right hon. Member for Greenwich and Woolwich gave us some examples when talking about waste disposal and situations for homeless people or recovering drug addicts. I can imagine situations where it will be in the local authority’s interest to produce a referendum that might not necessarily be in the interests of the local community, and therefore the local authority may choose to put a question to people in a specific area to pursue a particular course of action with a lower threshold of signatures than the people in that area would need to trigger their own referendum under the 5% threshold. As it happens, I share some concerns about whether 5% is appropriate, but I believe we will come on to that later.

Particularly when taken with clause 50, subsection (2) gives the local authority a huge amount of power and influence in debating and setting the context for a referendum to achieve its end. Clause 40(2) allows the local authority to vary the trigger point, and clause 50 allows it to take part in all sorts of promotional activity to support a particular view in the referendum.

I agree with what my hon. Friend the Minister said: local people should be commissioning, petitioning and requisitioning referendums rather local councils dumping referendums on them. My concern is that because the provision allows for an unequal threshold, in a sense, the local authority can trigger a referendum that may be in its interests but is not necessarily called for by the majority of local residents.

I shall finish with a couple of questions to the Minister. First, am I right to say that the subsection is redundant because other powers in the Bill in effect allow the council to do what the subsection seeks to achieve? Secondly, what is the point of having a number in one place that can be ignored in another? Will he enlighten me further on the Government’s thinking on those issues?

Barbara Keeley (Labour, Worsley and Eccles South)

Amendments 81 to 83 are grouped. The hon. Member for St Austell and Newquay has been discussing the question of the trigger level. Amendment 81 changes the required percentage from 5% of the local electorate to 10%, which seems to be a better figure. On the question of the powers to change the trigger threshold, which the hon. Gentleman spoke about, amendment 82 removes the Secretary of State’s power to change the trigger threshold through secondary legislation, and, as an alternative, amendment 83 allows the Secretary of State to increase the threshold but not to lower it. It seems strange for a Bill to specify a figure, when there is a power to change it and a power for councils to ignore it. It is rather messy.

Brandon Lewis (Conservative, Great Yarmouth)

Will the hon. Lady clarify something? There seems to be inconsistency here. When the Labour party was in Government, it set a threshold of 5% for the mayoral referendums. Why does she feel that 5% is not appropriate for referendums now when her Government passed it for mayoral ones?

Barbara Keeley (Labour, Worsley and Eccles South)

I think that there were various referendums. I was a councillor in Trafford, and we have a grammar school selection system. The trigger level for a ballot on the grammar school system is 10%, so different levels are attached to different things. Due to a view that people ought to be able to express an opinion on governance, it was set at 5%, but other things have been at 10%, such as a parental ballot on selection. Amendments 82 and 83 offer two different ways of saying that the Secretary of State should not be able to lower the threshold, because in our view 5% is too low anyway.

I return to the points made on a number of occasions about the financial context. I spoke earlier about it costing £70,000 to £250,000 for a borough-wide referendum. That was the figure from the Department. However, the cost of a ward or a smaller level referendum has not been discussed or thought about. I have seen estimates of council by-elections costing £20,000 to £30,000, so the cost will probably range from £10,000 to £30,000 depending on how big the area is. When he replies, I hope that the Minister can tell me what the estimated cost is. What does the Department think it will be? At ward level, in my constituency, a 5% petition to trigger a referendum means 400 signatures. We have heard Members say—most of us, particularly those who were councillors, understand—that it is not hard to get 400 signatures on a local issue. I have been at meetings where 400 people turn up, so we could simply get people at a meeting to sign a petition for a trigger. A 10% threshold would mean 800 signatures at ward level in my local authority and about 22,000 across the authority.

Stephen Gilbert (Liberal Democrat, St Austell and Newquay)

Does the hon. Lady accept that there is a trade off between the threshold at which the trigger is set and the obligation—or lack of obligation—on a local authority to have the referendum?

Hugh Bayley (Labour, York Central)

I remind the Committee that with this we are discussing the following: amendment 81, in clause 41, page 30, line 2, leave out ‘5%’ and insert ‘10%’.

Amendment 82, in clause 41, page 30, line 3, leave out subsection (2).

Amendment 83, in clause 41, page 30, line 3, leave out ‘or lower’.

Stephen Gilbert was in the in the middle of an intervention on Barbara Keeley, and I take it that it was a short intervention.

Stephen Gilbert (Liberal Democrat, St Austell and Newquay)

It was indeed, Mr Bayley. It is a pleasure to reconvene under your chairmanship this afternoon, this evening and for most of the night. I was asking the hon. Member for Worsley and Eccles South whether she thought that there was a trade-off between higher thresholds for triggering a referendum and the obligation on the local authority to call one. Therefore, if the threshold was set at 10%, as amendment 81 suggests, would she feel that local authorities are obliged to have a referendum at that level?

Barbara Keeley (Labour, Worsley and Eccles South)

I welcome you, Mr Bayley, and I am pleased to be speaking with you as Chair again. The difficulty with obliging is that it would be hard to do so without any consideration of the subject matter and the financial implications of having a referendum. There is an interplay between such things that is important for the Committee to consider. I do not know whether I should replay my last sentence from this morning, but I was discussing the difficulty at the ward level. If the trigger level for a referendum is only 5%, that would be 400 signatures only. Many of us know that it is not difficult to collect 400 signatures, and that might cause a plethora of requests.

On amendment 82, the Secretary of State takes so many powers that we have to return again to that anti-localist theme. It was interesting that we had some late written evidence from Henry Peterson, who said:

“For this measure, the argument given for central imposition of local arrangements is that ‘local authorities will need to adhere to robust processes’ and hence ‘Government involvement is appropriate’.”

He continues:

“This is not localism. Local authorities are perfectly capable of holding robust referendums, under present legislation, where this is seen as an effective way of airing and deciding an issue.”

This morning, we discussed the fact that Greater Manchester had an effective referendum on whether to implement congestion charging, and I certainly agree with Mr Peterson that, either together or separately, local authorities are

“perfectly capable of holding robust referendums”.

He added an interesting thought for the Committee, which was that the Government should contemplate applying the measures to their own workings before imposing them on a local government. It is, however, hard to see why the Government feel that there is a need for the Secretary of State to take a power to set the required percentage of signatures that would trigger a local referendum.

Amendment 83 is an alternative, because it would mean that even if we had a situation where the Secretary of State is taking the power to specify a different percentage, it would have to be higher. If we are querying whether 5% is too low, which we are, it does not seem appropriate to consider measures that would let the Secretary of State make it even lower. As I said, at ward level, 5% of the local electorate is as low as 400 signatures, so it hard to see why less than 5% would be necessary. The amendments are sensible in the context of the current financial restraints on local government, and I hope that the Committee can support them.

Hugh Bayley (Labour, York Central)

I call Mr Lewis—Yes, Brandon Lewis.

Brandon Lewis (Conservative, Great Yarmouth)

Thank you, Mr Bayley. It is an honour to be known by you now and to speak with you in the Chair. I do not want to keep the Committee too long; I just want to outline why we should be completely against changing the threshold.

As I mentioned earlier when I intervened on the hon. Member for Worsley and Eccles South, amendment 81 seems to be extremely inconsistent—I would not go as far as hypocritical—given that the Opposition are suggesting 10% when they, when in Government, had 5% as the threshold for local referendums for directly elected mayors. In my constituency, we had a referendum for such a mayor on the 5% threshold. I understand the hon. Lady’s point that, in some areas, it can be too easy to achieve, and I spoke to people in my area who signed the petition for that referendum with a complete misunderstanding of what it was about. It had been put across to them in a way that was quite different from what it actually means to have a directly elected mayor in a two-tier authority. That threshold is there and it was seen as right by the Labour Government that that would be an appropriate threshold for a local community to consider changing the way it is governed, so why it should be any different for any other issue that might be important to a community is beyond me. Indeed, there are organisations such as Keep Britain Tidy that say that even 5% is too high a threshold. So there are arguments both ways, but I think the Government have got it right this time in keeping the threshold—if there is going to be one—consistent with that which already exists for directly elected mayors. It makes sense to me to keep it that way.

Andrew Stunell (Liberal Democrat, Hazel Grove)

If I may pick up some specific points raised in the debate by way of questioning. I think it was the hon. Member for Worsley and Eccles South who asked about the cost of ward referendums. Obviously the cost depends on the number of electors in the ward, and they are of hugely different sizes across the country, but the evidence we have is that a referendum held at the same time as a local election can cost 50p per head, and if not held with an election the cost is around £1.50 per head. Obviously if there were multiple referendums on the same day you would not have to multiply by £1.50 each time.

Nick Raynsford (Labour, Greenwich and Woolwich)

The Minister will recall the evidence we heard from Sir Simon Milton who quoted figures of a £5 million cost if a Greater London authority referendum was held on the same day as an election, and £11 million if it was held separately. That is a different ratio from the cost figures the Minister has given us of 50p for a ward election held on the same day as an election and £1.50 if held separately. Does the Minister have any idea as to why there should be that discrepancy between the two sets of figures?

Andrew Stunell (Liberal Democrat, Hazel Grove)

I have got a very good idea. There is a significant fixed cost to having any election, so at a ward level the number is different from, let us say, that on a GLA basis. That said, I was going to go on to say that for instance in Salford, the local authority of the hon. Member for Worsley and Eccles South, the average ward size is approximately 8,300 so the cost would be over £4,000 if the referendum was held with an election, and over £12,000 if held independently. For Birmingham, which has one of the largest ward sizes in the country with an average of 18,500, the equivalent costs are £9,000 and £28,000.

A number of early speakers in the debate talked about the council having the power to vary the threshold. I want to make it clear that a council has no power to vary the threshold. The issue under discussion at that point was whether, having failed to reach the threshold—let us say 4.9% rather than 5% turning out to be the number—the council should have the leeway to say fair enough, it was a good attempt, we will have a referendum on that issue. My hon. Friend the Member for St Austell and Newquay, in moving amendment 123, asked whether we need this provision at all, because, as he quite rightly pointed out, the council—entirely independently of a petition for a referendum being raised—can determine by majority that it is going to hold a referendum in any case. That is obviously the case, but we had in mind a situation where, say 4.9% had been reached but not 5%, there might be scope for argument, even possibly challenge, that despite the council having a separate power it would be convenient for them to have this additional power. I would describe it as belt and braces.

So I say to the my hon. Friend the Member for St Austell and Newquay that in a sense, whether he is successful in defeating me or I am successful in defeating him, it makes no difference to the council’s capacity to hold a referendum on that issue should it choose to do so. However, we believed in bringing the Bill forward that it was right to have a provision that put beyond any doubt the fact that the council, even if the referendum result had failed by a margin, could still go ahead.

Perhaps I could say to the right hon. Member for Greenwich and Woolwich that the brains behind the scenes tell me that the 50p and £1.50 per elector figures are based on recent experience of the referendum in Tower Hamlets, and that is set out in paragraph 32 of the impact assessment.

The hon. Member for Worsley and Eccles South said that she thought that 10% would be a safer figure because it would prevent a large number of potentially vexatious and time-wasting referendums from being called. That is somewhat in opposition to what she told the Committee last Thursday:

“Collecting 5% of signatures—if that remains the amount required—will not be easy.”––[Official Report, Localism Public Bill Committee, 3 February 2011; c. 332.]

I do not think that it will be that easy, and I made the point before lunch that I have no doubt that an alert local authority and alert local elected representatives will want to indicate to their communities that they do not have only a referendum through which to get their point across. Our 5% figure, reflecting as it does on exactly the same practice as the previous Government did, is the right one to have.

Amendment 83 would limit the Secretary of State’s power in making variations to the power to make the percentage go up and not down. Perhaps I should first say something about the Secretary of State’s powers, because it is important to understand that we have not included every detail of the procedures, and have made it clear that there is a subsequent process to establish the criteria, which has to be carried out in discussion with local authorities and others who will be directly affected. It seems right, therefore, to retain in the legislation the Secretary of State’s capacity to reflect on the consultation, and on the views and experience over time, and to vary the conditions if that is appropriate.

It was also suggested, I think, that we were trying in some way to replace petitions with referendums, and that that somehow weakened the relationship between elected members and the communities they represented. The opposite is the case, and the fact that citizens can have a referendum does not weaken their relationship with their elected representatives. In fact, it strengthens it in two ways. First, by giving people a voice through a referendum there is an incentive for their elected representatives to listen and to engage, and if an elected representative was tempted not to give their community the attention that they should, that community could resort to having their say through a referendum. The fact that they can do that, will incentivise representatives to play a full and active part in exactly what the name says: representative democracy.

Secondly, a referendum can be an effective vehicle though which a community can make clear to their representatives their views on a particular issue. The hon. Member for Worsley and Eccles South and I have both referred to the referendum on congestion charging in Greater Manchester. She referred to it as a binding referendum; it was not binding in a legal sense, but it was in the sense that the authorities that undertook the referendum undertook to listen to the outcome and act on it. A non-binding referendum does not require representatives to act in a particular way, but it brings the community’s view loudly and clearly before them, so that they can take their decisions in no doubt at all about the views of the people they represent. In other words, referendums can enhance, not diminish, representative democracy.

I want to pick up one of the quite understandable points that the hon. Member for Lewisham East raised in the earlier debate, on the applicability and the appropriateness of referendums for all kinds of issues. We do not see the referendum regime duplicating other regimes where people in communities can have their say. Orders under clause 44 allow matters to be excluded from the scope of local referendums. We want to consider carefully what those matters should be.

A number of sensible and appropriate suggestions have been made during the course of today’s debate, and we want to reflect on those. It could well be the case that there is reason for planning to be treated in a different way, because there is scope for representations to be made in a different form. When we get to that part of the Bill and the neighbourhood planning system, there will be ample scope for local communities to make their views clear, not only in a non-binding referendum, but to establish the planning framework for their communities in a binding referendum.

Heidi Alexander (Labour, Lewisham East)

Will the Minister clarify whether, by saying “by order” under clause 44, it is the Government’s intention to exempt planning and licensing applications from referendum?

Andrew Stunell (Liberal Democrat, Hazel Grove)

What I said is that we would carefully consider what matters should be excluded. If I can avoid it, I do not want to get into drawing up a list on the hoof, in Committee. We have heard what has been said, and we will carefully consider how we might proceed, taking account of the views that have been expressed here and in evidence.

Nicholas Dakin (Labour, Scunthorpe)

It seems odd that we have not got this information before us now. It is putting the cart before the horse. I will give him another hypothetical situation. A community is outraged about its local forest being sold off and there is a referendum on it. What is the point of that referendum? I can understand why a community might be outraged, frustrated and want a referendum. That would give a clear message to their local representatives, but those local representatives knew about the community’s views to start off with. I am concerned that there is reference to information that will be dealt with, when that information should be before us today, so that we can make a proper and correct decision.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I had rather hoped that the Committee would welcome us taking a flexible approach on the points that have been made in debate. It is our intention to carefully consider the matters that have been raised and to come forward with what we would see as the appropriate next steps in due course.

Nick Raynsford (Labour, Greenwich and Woolwich)

Does the Minister not understand that this is setting out a constitutional concept that is completely alien from the one that should guide our proceedings? We are here to scrutinise this piece of legislation. I fully understand the Minister saying that he wants time to reflect on this. That would have been entirely acceptable if we had a pre-legislative scrutiny phase. He would have had a chance to reflect, and the Bill would have been presented with the detailed provisions for us to consider when debating that Bill. As it is, the only Committee charged with scrutinising the Bill in this House is being asked to take it on the Minister’s say-so, without a chance to look at the detail. That is not acceptable, and I sincerely hope that when they come to scrutinise this in another place, they will draw conclusions from the fact that this House has not been able to fulfil its constitutional obligation to scrutinise this Bill properly.

Andrew Stunell (Liberal Democrat, Hazel Grove)

The right hon. Gentleman makes his point forcefully, but he overlooks the fact that the existing provision, which allows local councils to have referendums, is not hedged with many restrictions on their topics. What we are looking at, in the light of the discussion that we have had, is whether we should simply roll that provision forward so that local communities can commission a non-binding referendum, as councils already can, unconditionally, or broadly unconditionally —or unconditionally in the context of the discussions that we have had so far; perhaps someone can find some conditions that do apply. It is now being suggested that we should look more carefully at whether that unconditional remit should be available for publicly community-initiated referendums, and we are taking stock of those points.

Jack Dromey (Labour, Birmingham, Erdington)

There is the important issue of whether the provision will include planning. The Minister makes the Delphic oracle look like a beacon of clarity by way of comparison. Can we be absolutely clear about this? First, will planning be exempt from what is being proposed in respect of referendums? Secondly, can the Minister give some examples of what he is talking about? He said that he does not want to give references on the hoof, but at least a flavour of his thinking would be helpful.

Andrew Stunell (Liberal Democrat, Hazel Grove)

A flavour of my thinking is that I am thinking about the evidence that was given to us at the opening of our Committee’s deliberations, and I am reflecting on the points that have been made in this debate. I shall not say that, as a matter of course, all planning decisions will be exempt from referendums. There will be issues raised by the national planning policy framework which it would obviously be appropriate for referendums to consider, and there might be others where it would be important to reflect on the scale or impact of a development. I do not want to be drawn into that, but it is right and appropriate to give the matter further consideration.

The hon. Member for Lewisham East mentioned licensing. There may be other topics for which members of the public, the Committee and Parliament would see another route for local communities to make their views known effectively. In such cases, it might be sensible to exclude local referendums if effective alternative ways already exist for communities to get their point across.

Heidi Alexander (Labour, Lewisham East)

I thank the Minister for his generosity in giving way. Could he explain the discrepancy between his comments in Committee today and the comments of the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells, when we were questioning the external witnesses. I had a look at Hansard for 25 January—the transcript of the debate that took place. The Minister of State said that

“there is no referendum that impacts on any planning application.”––[Official Report, Localism Public Bill Committee, 25 January 2011; c. 77, Q126.]

I am a little confused, because this Minister is now saying that he will consider these matters. Could he clear up the confusion for me?

Andrew Stunell (Liberal Democrat, Hazel Grove)

It is probably better at this stage for me to say that I will write to members of the Committee and clear up the confusion. Let me make it clear that my right hon. Friend the Minister of State and I are making exactly the same points in questions and comments today. We want an effective power for local communities to call non-binding referendums, and for those referendums to be taken seriously as an important element of democratic accountability. It is important that we get that precisely right, and these are issues which I am trying to assure the Committee we shall work on and deliver.

Stephen Gilbert (Liberal Democrat, St Austell and Newquay)

When my hon. Friend the Member for Bradford East and I tabled the amendment, we wanted to challenge the need to have subsection (2) in the clause. The Minister refers to my defeating him or his defeating me, but perhaps we can accept a score draw, because it seems that the belt-and-braces approach to which he alluded might be entirely correct. However, the subsection does not need to be part of the clause. Overall—we will come to this under clause 50—I have some worries that the Bill could give an awful lot of influence to local authorities, allowing them to frame the terms of a referendum, rather than do what the Minister said—and what I agree with—and give the powers to local people. With that score draw, I beg to ask leave to withdraw the amendment.

Clause 41

Clause 42

Barbara Keeley (Labour, Worsley and Eccles South)

I beg to move amendment 84, in clause 42, page 30, line 10, leave out paragraphs (b) and (c) and insert—

We are still seeking to test and scrutinise the different parts of the process of introducing local referendums. It was clear from the last debate that certain aspects still seem a bit ragged, in terms of understanding the legislation. The community empowerment measures have not been consulted on and have not had any scrutiny.

The amendment would mean that a local referendum would be required in an authority only if at least 25% of the members of that authority made a request for it. That must still include a majority of members for the electoral area, or areas, where the referendum is to take place. The amendment would increase the level of support necessary for a request from members to hold a local referendum. Setting the level at one or more members, as the Bill does, means that a councillor from a single-member ward, or two or three members from one ward, could make a request for a local referendum. The amendment aims to ensure that those councillors also have the support of councillors from other words.

This is a sensible measure aimed at ensuring that the local referendum process is manageable for local authorities. As the Minister said, the decision on whether to hold a local referendum in response to a request will be taken at a full council meeting. However, unless there is some indication of the level of support needed, local authorities could find themselves receiving constant requests for local referendums from a small minority of councillors. As I mentioned earlier, some councils have the unfortunate difficulty of obstinate minorities, sometimes from extreme parties. Clearly, a single councillor from such a party, or a little group of them from one or more wards, could employ the tactic of constantly putting in referendum requests and then going to the local population and saying, “They never agree to any of our requests.” It would require a bit more work, but requiring 25% of members to support a request for a referendum is reasonable.

In the House, through early-day motions, we try to show that a particular matter, issue or proposition has a certain level of support by gathering signatures. The idea is similar to that. The amendment could help make the process more manageable, so I hope that the Committee can support it.

Nick Raynsford (Labour, Greenwich and Woolwich)

My hon. Friend almost lost my support by citing early-day motions as a reason for backing her amendment. I regard early-day motions with considerable suspicion. They seem to me to be a form of parliamentary incontinence. Having had an encounter with the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove, at a debate on housing in the autumn, I can say that he probably regrets having signed as many early-day motions as he clearly did, because such things come back to haunt one.

That aside, I want to come on to the proposed change to the clause. The amendment would delete subsection (1)(b) and (c) and, in its place, insert two new paragraphs. The Bill says that

“A request to a…local authority complies with this section if…(b) each member who requests the local referendum is a member for an electoral area in that relevant area”

and

“(c) in the case of an electoral area with more than one member, all of the members or a majority of the members for the area make the request”.

That seems to lay the whole provision wide open to exactly the kinds of problems that we identified and discussed in earlier debates. There could be particular pressure from small areas in a local authority where the councillors might be pressured unduly by particular interest groups that are opposed to a scheme or a type of development—something that is not popular—and where councillors could easily be pushed into agreeing to put their names to a request for a local referendum.

The threshold seems quite small, leaving the provision wide open to the abuse already identified. We all know that that is likely. Among the many submissions of evidence that we have received is one from RenewableUK, a highly responsible organisation that the Government ought to support, given their aspiration to be a green Government. However, the organisation is clearly extremely alarmed at the scope for local referendums to be used to stop the development of renewable energy schemes, which are extremely difficult to get through the planning process because they tend to engender very strong feelings.

We have a classic illustration of the Government’s green objectives and devolutionary objectives potentially being in conflict, with no evidence whatever of a sensible way to resolve the conflict. That is a characteristic that we have identified all the way through the Bill, and we will go on identifying it while we are in Committee—which, I fear, will be for a long time this evening, so we might have a great deal more to say on the subject. The contradictions, and the lack of coherence and detailed thinking on how such arrangements can best work, are all too clear.

We have had a submission from Mr Henry Peterson, to which my hon. Friend the Member for Worsley and Eccles South has rightly referred on a couple of occasions. Mr Peterson will be known to many people here; he has been a distinguished local government officer. He served for a long period in the London borough of Hammersmith and Fulham—so long that I was actually the Member of Parliament for that area when he started his service—and he continued there until 2005. In the course of a long and distinguished career as director, deputy chief executive and monitoring officer, he developed a number of extremely thoughtful and intelligent observations about the success and failures of various initiatives taken over that long period to try to extend community empowerment, and some of the tensions and difficulties that that can create.

I strongly recommend Mr Peterson’s submission to all members of the Committee who have not yet read it, because it is full of wisdom. It is a sensible paper that sets out some of the difficulties, problems and pitfalls that will befall us if the provisions in the Bill go through without substantial amendment. In his submission, he gives the very apposite warning that

“There is the risk that the complex processes initiated by the Bill will lead to no point of decision, other than through expensive legal proceedings in the courts.”

Government Members would do well to reflect on the extent to which one of the unintended consequences of the Bill that they are promoting is to bring a great deal of business to m’learned friends. They will benefit because there will be constant scope for challenge: challenge if the procedures have not been applied properly; challenge if a local authority is felt to have taken a decision that is not entirely in keeping with the legislation; and challenge if a local councillor has or has not failed to act in the way that a local community group that is keen to promote a particular cause feels that the councillor should have acted.

I fear, therefore, that there is scope for litigation. There is certainly scope for confusion and ill-feeling, and for undermining the position of local councillors. The amendment tabled by my hon. Friend the Member for Worsley and Eccles South gives a much sounder basis for the consideration of the process that we are discussing. I am not terribly wedded to that process; as I have said on previous occasions, it is a contradiction to say that the Government wish to devolve more say and scope to local authorities, and then to prescribe, in extraordinary detail, precisely how one of these referendum processes should operate. That does not seem to be entirely in line with the spirit of localism. However, if we are going to do that—the Government seem determined to do so—we should do it on a much sounder basis than that set out in clause 42. We should instead be prepared to set a reasonably tough threshold. The threshold of at least 25% members of an authority is a real safeguard against an unrepresentative group, who may be strong in one particular locality of the authority, hijacking the whole agenda.

Gavin Barwell (Conservative, Croydon Central)

The right hon. Gentleman makes some valid points, but could I put to him an opposite argument? He will know that there are many local authorities where the minority group on the council is less than 25% of the members of the council. Is there not a danger that if we set the threshold at 25% of the council, the majority groups could essentially prevent any councillor from a minority group from pressing for a referendum in their area?

Nick Raynsford (Labour, Greenwich and Woolwich)

I absolutely accept the hon. Gentleman’s point, and that is the difficulty about trying to be too prescriptive. That is why I said, in advance of making these comments, that I doubted the wisdom of being as prescriptive as the Bill is on something that is supposed to be devolutionary and to give more say to a local authority. Having done that, however, I feel that we should have safeguards against the specific problem that I have identified. I have risen to speak in support of the amendment tabled by my hon. Friend the Member for Worsley and Eccles South, which has the figure of 25%. I accept that that might have a downside in certain circumstances, but I can see it having an upside in other circumstances, where an unrepresentative group tries to hijack the agenda.

The amendment is not perfect by any means, but it is better than the provisions in clause 42 unamended. I sincerely hope that those members of the Committee who are open-minded and want us to do our job of scrutinising the legislation, rather than leaving Ministers an extraordinary carte blanche to decide all these things afterwards, after ruminating—or not—on the debates in Committee but having evaded proper scrutiny, make the decisions.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I find the amendment rather strange. The hon. Member for Worsley and Eccles South herself said that the key point is not the number of councillors who request a referendum, but that, at some point, the majority of the council has to agree to it—it has to be agreed by the full council. Whether it is one local authority member, 25% of them or 49% of them, what matters is that, when the final decision is taken, it is 50% plus one of them. From that point of view, the amendment seems not to achieve any of her objectives, because the wider support she said was an important component is provided by the council’s decision, not by somebody—either an individual or more than an individual—coming forward in the council.

The hon. Lady said it was important to ensure that small minorities cannot take command of the agenda, and the right hon. Member for Greenwich and Woolwich referred to the agenda being hijacked by a small minority. When I was first elected to a local authority, in 1979, I was one of a four-person group on a 60-councillor authority. If I remember, the Conservatives held 40 of the 60 seats, so one political party had an overwhelming majority. We were the newcomers, and we were seen as extremists. [Interruption.]I would be delighted if the Committee thought that was still true.

We should to be very careful about advancing an argument in this place that there should be rules designed to exclude small numbers of democratically elected councillors, however unpleasant their views may seem to us. The clause does not do that. A ward councillor in a district with a single-councillor ward could bring a referendum forward; if it is a three-person ward, it requires a majority of the councillors to bring a referendum forward. To initiate a referendum would require the support of the councillors covering the area in which it is to be held.

The right hon. Gentleman made a wide-ranging attack on the Bill, but he absolutely failed to address the amendment—I suspect because he knows in his heart that the amendment is not worthy of support. He picked out many things that he thinks are wrong with the provision, all of which carry exactly the same risks as the petition duty, which we have just disconnected because it could be hijacked by an endless procession of referendums being called by a minority group member under some external influence. How much more is that true of petitions? How much more is that true of the formulation that he so vigorously defended only two or three days ago?

I am sure when we get outside, the right hon. Gentleman and I will give each other a bit of a grin, but the argument he put to us cannot possibly have been real or substantial.

Ian Mearns (Labour, Gateshead)

Anyone who has experience of local government will be aware of individual members of councils who, for their own ends, deliberately try to clog up the system. In the authority of which I was a member for 27 years, there were one or two individuals—in fact, there were probably more than that during that period—who had a bee in their bonnet and, for example, spuriously referred matters to the ombudsman. It takes up an awful lot of officer time to establish, first and foremost, whether there is a case to be answered; and then, if the case is referred to the ombudsman or if it goes directly to ombudsman, an investigation has to be carried out. In probably about 95% of those cases, the ombudsman reported back to the authority that there was no case to answer.

In such a situation, individual councillors could for their own political or personal reasons or because they are “under the influence”—those are the words I think the Minister used—clog up the system by repeatedly asking for referendums on a whole range of issues. The local authority would, quite rightly, have to ensure in each case that the argument for having a referendum or not was properly investigated. If one, two or three members of an authority are repeatedly and deliberately attempting to clog up the system—there has been experience of that—the Bill allows them far too much leeway.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I really cannot accept that. I say to the hon. Gentleman that if he can point to any respect at all in which the mischief he has described is greater with this provision than it was with the petitions provision, I would willingly give way. However, it seems that every word he has spoken and that the right hon. Member for Greenwich and Woolwich had to say on the subject is exactly the same criticism as that made for petitions. The fact of the matter is that minorities in a democracy are a pain in the neck for those in the majority. Part of the whole business of accountability—indeed, the very work of this Committee—is about the minority challenging the majority and pressing us on our case. It cannot be right for Opposition Members to argue differently.

Nicholas Dakin (Labour, Scunthorpe)

I thank the Minister—he is being very generous in giving way. The point he makes about the balance between majorities and minorities is fair. On the circumstances that my hon. Friend the Member for Gateshead described in relation to how mischief can be made, the Minister said that that case can be made for petitions as well as for referendums. The key issue is that referendums will be a far more complex, time-consuming, costly process. I foresee circumstances in which referendums disturb the focus of a local government organisation from its major purpose. It could end up spending a lot of time dealing with and managing the process of referendums, when it should be directly focusing on serving the people it has been elected to serve. Not having the legislation properly grounded could result in the good intentions that we recognise within the Bill having quite a perverse outcome.

Hugh Bayley (Labour, York Central)

Order. May I remind hon. Members that interventions are meant to be short? There is nothing to prevent Members who are intervening from making speeches if they wish to do so. Could you bring your intervention to an end, Mr Dakin?

Nicholas Dakin (Labour, Scunthorpe)

Thank you, Mr Bayley. I had just finished.

Andrew Stunell (Liberal Democrat, Hazel Grove)

The hon. Gentleman did not adduce a single reason to justify his claim that the petition was somehow superior to the referendum. Of course, the point he makes about a referendum being more serious and all that kind of stuff is right, but it is still not going to happen unless a majority of councillors vote for it to happen. If a councillor-initiated request comes forward, the council still has the power to stop it if it does not want it.

David Ward (Liberal Democrat, Bradford East)

I am loth to give advice on how referendums, which I do not support at all, should be conducted, but my ears pricked up at mention of the protection of the minority. Again, there is an inconsistency. I accept many of the arguments put forward about the protection of minority rights on a council group. Like the Minister, I was part of a minority group, but I was also a minority councillor within my ward—one of three at one point. We could have a situation in a ward in which 100% of the electorate sign up to a petition for a referendum, but two out of the three councillors in a ward stop it. Is that right?

Andrew Stunell (Liberal Democrat, Hazel Grove)

I can absolutely assure my hon. Friend that that is not right. There are different ways in which a referendum may be triggered and they are in parallel, not in series. In other words, if 100% sign up to a petition—it is pretty obvious what the result of the referendum will be—the council does not have the option; it has to do it. In default of that, it is possible for local councillors to promote the idea that the council should have such a referendum. That becomes effective only if a majority of the council agrees with the ward councillors that that should be the case.

We have focused on wards. There is nothing here that requires it to be either the whole council area or an individual ward area. It might be that it is more than one ward. It might be an area committee area or some other grouping. Whatever the grouping, if the councillor route for requesting a referendum was in play, it would need a majority of councillors in that area. I am sorry, but I have to say to my hon. Friend the Member for Bradford East that if a minority in a ward wants a referendum, they have had it unless they can persuade the 5% to sign up to a public requisition.

Nick Raynsford (Labour, Greenwich and Woolwich)

The Minister sets out his argument for the circumstances that were outlined by the hon. Member for Bradford East in which 100% of the electorate were in favour of a referendum but two out of the three councillors were not. I can see that the council would still be able to treat this as a petition that complied with the legislation through clause 40, even though it does not comply with clause 42. Let me put to the Minister a slightly less extreme illustration where there is sufficient support for a referendum to generate the numbers above the threshold, but two out of the three councillors are still opposed. What happens in those circumstances? Will there still be an automatic referendum, or will there be an element of doubt?

Andrew Stunell (Liberal Democrat, Hazel Grove)

There will be an automatic referendum. The public requisition trumps the other methods of securing such a vote. I said some time ago—my Whip thinks it was too long ago—that amendment 84 is of no practical use and actually reduces the capacity of local representatives to represent their communities in the council. I very much hope that the hon. Member for Worsley and Eccles South will withdraw her amendment and not put it to a vote.

Barbara Keeley (Labour, Worsley and Eccles South)

I will not detain the Committee for too much longer. A number of points have been made about the objectives of the amendment. All the Opposition’s amendments are about making the process of running a referendum more manageable. That is what we are trying to do. With a piece of legislation that has never been tested, consulted on or had any form of scrutiny, it is perfectly valid that we propose ideas that the Minister might not agree with, or that he thinks are fanciful, because each of these aspects and propositions of the Bill need to be tested.

There will be a divide in this Committee, I think, between people who support petitions and those who are constantly running down the whole notion of a petition when the petition is in itself a trigger for a local referendum. It seems bizarre to be constantly running down the idea of a petition. We do not have to go back to Greece, but it has an absolutely honourable tradition. I can say why I think a petition is better: it is cheap and flexible. It does not need 5% or 10%; it can be presented with 25, 105 or 100,000 names. We said in the early stages of debate that a petition is one of the most understood forms of participation, with the highest rates. When asked, most people will say that they have signed one in the past 12 months.

Brandon Lewis (Conservative, Great Yarmouth)

Does the hon. Lady not accept that one of the problems with a petition as opposed to a referendum is that it represents only one side of the story? One of the Opposition’s criticisms has been that, at a 5% threshold, a small group could get a referendum, but a small group could get a petition stating only one side of the case. At least with a referendum, both sides are heard and the case is made for and against. [Interruption.]

Barbara Keeley (Labour, Worsley and Eccles South)

My hon. Friend the Member for Plymouth, Moor View is saying, rightly, that it depends on the question. Sometimes there are big questions, such as, “Shall we impose congestion charging across the whole of Greater Manchester?” which have a big impact on the people affected; sometimes the questions deal with smaller subjects, such as “Is the lighting sufficient in the street down to our day nursery?” which I mentioned in last week’s sitting. We must have manageable and affordable processes, and petitions are cheap and flexible.

Nicholas Dakin (Labour, Scunthorpe)

The other point that my hon. Friend made, which is worth reinforcing, is that the use of petitions and their value are understood. There is no illusion with them, but there is great possibility for illusion with referendums. The illusion of power rather than its reality is a big concern.

Barbara Keeley (Labour, Worsley and Eccles South)

Indeed. I must also defend my comments on early-day motions. I cited them only in terms of the principle of getting support for an idea. I agree that the problem with early-day motions is that people outside this place think that they carry more weight than they do, which is a fraud on such people. We are all constantly asked to sign such motions and people think that, because of that, something will happen.

David Ward (Liberal Democrat, Bradford East)

There is nothing to stop anyone from getting up a counter-petition, which we have all done hundreds of times.

Barbara Keeley (Labour, Worsley and Eccles South)

Yes, indeed. There is a hierarchy of methods: some are cheap, easy to carry out and flexible; others are more expensive and should be used only at certain times when there is a deal of support.

To conclude my comments on early-day motions, I speak as someone who—this is a badge of honour—got most signatures from Members for supporting carers week, for which I was a champion. I knew as I was doing that, however, that it did not have a point and I hoped that I was not deluding people. We need to be careful about such matters.

We cannot have a mechanism at the heart of local referendums and then talk about the mischief caused by petitions, which will stay. If there is confusion, however, it is about centralising and taking powers for the Secretary of State over the process, and then being unwilling to consider any sensible amendments to make that process manageable. I shall continue to say that the Bill creates a new duty and a new burden. We are the people who are charged with scrutinising its clauses, so it is right that we consider different aspects and methods. I hope that the Ministers listen. On that basis, I beg to ask leave to withdraw the amendment.

Clause 43

Ian Mearns (Labour, Gateshead)

I should like to examine how subsections (3) and (4) relate to clauses 40(1)(a), 41(1) and 40(2). Under subsection (3),

“subsection (2) does not apply to a petition or request if…it is received by a district council whose area is part of the area of a county council, and…the district council thinks the question stated in the petition or request relates (in whole or in part) to the functions of a partner authority of the county council other than the district council.”

If a district council receives a petition that fulfils the criterion in clause 41(1)—in other words, the 5% criterion—and determines that the question does not relate to it as a district council but that it relates to the county then, according to clause 43(4)(b),

“the county council must consider a petition so referred as if it had received it from the petitioners”.

If the 5% criterion has been fulfilled in a district and the question is passed to the county, will the county, in making its determination, decide that the 5% criterion has been fulfilled in its area? A district is usually much smaller than a county, so although the 5% criterion might have been fulfilled in the district sense, but it certainly might not have been in the county sense. I know that there is latitude in clauses that we debated earlier, but that seems to be an automatic contradiction, because the 5% that fulfils the district criterion might be so much less than the 5% that fulfils the county council criterion that the petition will not be properly considered.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I completely assure the hon. Gentleman that that situation will not arise, because the threshold is 5% within the area where the referendum is intended to be held. Whether the petition was from a ward or from the whole of a district, if the 5% is reached for a referendum to be held in the area, it would still be the same 5% of the same area when it goes forward to the county. It might be only part of a county division, or it might be several county divisions comprising a shire district. The measurement is of the area within which the referendum is to be held. I hope that provides some reassurance.

Ian Mearns (Labour, Gateshead)

It does not, because it may be that the petition comes from a particular district council ward that does not replicate the county council ward. Would it therefore be appropriate for a county council to hold a referendum in a sub-division that it does not recognise as part of its electoral area—in other words, a district council ward or division that is totally different from a county council ward or division? Would it be appropriate for a county council to hold a referendum based on a district council ward? I assume not.

Andrew Stunell (Liberal Democrat, Hazel Grove)

That could happen within a district area, even with a request to a district, because a parish, for instance, does not necessarily conform to a district ward or a combination of district wards. There are already circumstances at the district level, where a referendum would be held on a non-ward basis. I alluded to that in responding to the previous debate, and that is exactly the same situation as might apply with shire districts in a parished area. I assure the hon. Gentleman that that is the procedure. It is not exceptional, and it is what is proposed in the Bill.

Ian Mearns (Labour, Gateshead)

May I suggest that the Minister should follow that up? There are significant grounds for misunderstanding how the provision will apply on a local level. I take it that the Minister will follow that up with some significant explanatory notes.

Several hon. Members rose—

Hugh Bayley (Labour, York Central)

Perhaps, as we are having a slightly wider debate, I will call a number of Back Benchers, and then come back to the Minister.

Nick Raynsford (Labour, Greenwich and Woolwich)

We have had an interesting discussion about the provisions that apply where there may be an element of doubt as to whether an issue for referendum is more appropriately dealt with by the district council or the county council, but I do not see any provisions in the Bill that relate to a possible conflict between a London borough council and the Greater London authority.

When the Greater London authority was set up, it was very much part of our thinking that, wherever possible, it should not have an overlap of responsibilities with the London borough councils. The belief was that the Greater London authority should be a strategic body and the councils should remain the bodies charged with delivering services locally. The purpose was to avoid the kind of conflicts that, unfortunately, characterised relations between the old Greater London Council and the London boroughs. Generally, that mechanism has worked. As time has gone on, however, and as Mayors have become more rapacious, seeking ever greater powers, and as Governments of all persuasions have been inclined to humour Mayors by giving them greater powers, we are moving into a world where there will be a greater overlap between the Mayor’s powers and the powers of the London boroughs.

Housing is an obvious example: in the original provisions for the Greater London authority, we did not give the Mayor specific housing powers, because we felt that that was best left for the boroughs. An arrangement was included for dividing the strategic planning powers from the boroughs’ local planning powers, but that was as far as it got. Now, of course, the Mayor has substantial housing powers and inevitably, there will be conflict between the Mayor and the boroughs. Into that, one can see a situation where people pushing a cause seek to advance it through a referendum. It might be a member of the Greater London authority trying to do so, although in clause 42, I see that members are precluded from requesting a referendum themselves. That would not, of course, preclude them from talking to a colleague in a local authority, who could request a referendum in that authority. Were that to happen, the Mayor and indeed, the GLA, might feel that that was an inappropriate use of the referendum power to push a point of view that was hostile to the policy of the GLA or the Mayor, on the part of an individual local authority.

Although the Bill does not seem to have any mechanism to deal with such circumstances, I look forward to the Minister’s response, and I hope that he can assure me that there is such a mechanism. I cannot see it, however, and in its absence, I feel nervous. There will be malicious use of these powers to foment disagreement between boroughs and the GLA, which is not in the interests of good governance in London. As the Government clearly recognise that there might be a problem in two-tier areas outside London and a mechanism has been set in place for resolving that, would it not be appropriate to give further thought to a mechanism within London to ensure that any such conflict between London boroughs and the GLA can be resolved? I hope that inspiration is finding its way rapidly to the Minister, and that he can give me a response.

Andrew Stunell (Liberal Democrat, Hazel Grove)

First, I defer to the right hon. Gentleman in the matter of how the current governance of London was established and its subsequent evolution and development. As extra powers are given to successive Mayors, it is true that what he has described becomes more of a possibility.

I am happy to report to the right hon. Gentleman that if a borough receives a petition for a referendum on an issue that is the responsibility of the GLA, the borough must hold a referendum if it considers that it has influence on the issue, or if any of its partner authorities have influence over it—and Transport for London is a partner authority. In other words, as I understand what I have in front of me, if there were a request for a petition in the London borough of Lewisham, or of Greenwich, which was valid in all respects from residents to, for example, fares in London, it would be right and in order for that London borough to conduct a non-binding referendum. I believe that the right hon. Gentleman is right in saying that there is no direct referral mechanism to the GLA.

We may need to write to Members about this matter. I certainly do not want to give a misleading impression, but I believe that what I have said to the Committee is a correct interpretation of the Bill.

Gavin Barwell (Conservative, Croydon Central)

I want to assist my hon. Friend by giving him time to find the inspiration he seeks.

The right hon. Member for Greenwich and Woolwich has made a sensible, constructive point that needs looking at. Although that may not happen now, perhaps there will be an opportunity to clarify whether it is only TfL that is a partner body, or whether other branches of the GLA family are included. For example, the Bill gives power to the Mayor in relation to mayoral development corporations. One could envisage a situation where constituents of London Members petition, or councillors on a particular local authority wish to have a referendum on such a proposal, which clearly would be the responsibility of neither the TfL nor the national partner authority, but the Greater London Authority. At some point, having a clarification on whether amendments are required to deal with that, or whether the Bill as drafted takes account of those issues, will be helpful to the Committee.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I thank my hon. Friend for speaking at that precise moment in the way that he did.

For the GLA to hold a referendum as a result of a petition, that petition must relate to the GLA, and it must be above the 5% threshold for the whole of the GLA area. A borough referendum, as we discussed, would require 5% within that borough.

The right hon. Member for Greenwich and Woolwich asked a question that probably bears a little bit more inspection, and it might be better for me to write to members of the Committee to make it exactly clear what we are proposing. I point out that there will be a later stage of the Bill when we deal with powers in London, and it might be appropriate then to take a second look at the matter.

Clause 44

Barbara Keeley (Labour, Worsley and Eccles South)

I beg to move amendment 86, in clause 44, page 31, line 25, leave out subsection (5).

Hugh Bayley (Labour, York Central)

With this it will be convenient to discuss amendment 124, in clause 44, page 31, line 25, leave out subsections (5) and (6).

Barbara Keeley (Labour, Worsley and Eccles South)

I find myself again in the familiar territory of tabling an amendment that would remove from the Bill extra powers for the Secretary of State, which is what amendment 86 aims to do. We want to ask why the Secretary of State thinks he is able to determine for a local authority what a local matter is. It seems quite a ridiculous idea, and is in itself very centralising. Straightforwardly, I say this: taking on a power to decide what is a local matter is centralising by definition, and it should be removed.

I know that the hon. Members for Bradford East and for St Austell and Newquay have also tabled an amendment to remove those powers. Those on both sides of the Committee are questioning why the Secretary of State feels the need to use such powers, and I hope that Ministers can tell us why.

Stephen Gilbert (Liberal Democrat, St Austell and Newquay)

As the hon. Lady said, my hon. Friend the Member for Bradford East and I have tabled a similar amendment, but it is slightly more encompassing given that we are seeking to delete both subsections (5) and (6) in order to remove the Secretary of State’s current power to determine what may constitute a local matter. Crucially for me, there is an inference there that he will be able to determine what might not be considered to be a local matter.

I want to paint a scenario that I hope is accurate, and I am sure that Ministers will correct me if I am wrong. There is a live issue in my constituency that may well fall within the remit of the Secretary of State’s intervention. St Dennis is a small village in my constituency, with a population of about 2,000, smack bang in the middle of the former clay-mining district. There is a proposal for a mass-burn incinerator that can take 250,000 tonnes of rubbish each year. Not only the local parish council, but all the adjoining parish councils, are against it. The district council, before it was abolished under local government reorganisation, was also against the proposal, and Cornwall county council turned down the planning application in March 2009.

However, as that facility has wider implications for Cornwall, arguably for the south-west and possibly for the UK’s obligations for climate change and emissions levels—all arguments that I refute, but they are arguments that can and have been made—it may be deemed by the Secretary of State not to be a local issue, but an other-than-local issue, if I can put it in those terms. I shall give some other examples.

Wind farms could clearly be a matter of concern within the local area but may arguably be of national concern when it comes to energy security and provisions to ensure that the lights do not go out. We recently saw the well-led protests against airport expansion in the south-east, but over the next couple of decades that will be a problem for most parts of the country; it undeniably has a local impact, but it is clearly wrapped up in matters to do with regional economic growth and the national transport strategy. We can see that sort of complexity in other areas—for example, in education policy, with the advent of free schools and the drive for more academies. Whatever one’s view on that, it affects the local area but is also part of our national policy.

I believe that true localism would allow local people, through their elected representatives and through local offices, to take a view about local issues. I find it quite bizarre that the Localism Bill should include a clause that allows a national politician to determine what those local issues are—and, more crucially, what those local issues may not be, and therefore the matters on which people may be denied the chance to have a referendum. Are we really saying that having an incinerator in my constituency would not be a legitimate subject for a referendum, or that the airport expansions in the south-east, wind farms or whatever else were not legitimate subjects?

There is a huge conflict at the heart of the clause, and huge scope for local people to be denied votes by a Secretary of State—I hasten to tell my hon. Friends that I do not mean the present Secretary of State—on those issues that concern them most. Amendment 124 is a probing amendment to see whether these matters have been thought through by the ministerial team and to help me understand their thinking on why it should be appropriate for a national politician to decide what is a local issue, and by implication to be able to decide what is not one. I hope that the Minister will tell us what further consideration he will give to this matter, both within the Department and within the GLA.

Nick Raynsford (Labour, Greenwich and Woolwich)

I congratulate the hon. Member for St Austell and Newquay on his amendment. I hope that he will not treat it as a probing amendment, because it has a great deal of merit. The hon. Member for Bradford East identified its merit; it is inappropriate in legislation that is supposedly about localism to give such extensive powers to the Secretary of State to determine these matters.

The hon. Member for St Austell and Newquay put it far better than anyone, so I shall not repeat what he said, but he made the case that, in a Localism Bill, it is absurd to give the Secretary of State power to define what is or is not a matter to be determined locally.

Gavin Barwell (Conservative, Croydon Central)

Both my hon. Friend the Member for St Austell and Newquay and the right hon. Gentleman are right to say that we need some reassurance about how such wide-ranging powers will be used. As a former Minister, does the right hon. Gentleman foresee circumstances in which it would be inappropriate for local authorities to hold referendums? I shall give an example.

If, during the previous Parliament, Conservative local authorities had all chosen to organise referendums on the then Government’s failure to hold a referendum on the Lisbon treaty, from a local perspective would he have a problem with authorities using such a power in that way?

Nick Raynsford (Labour, Greenwich and Woolwich)

That is a very good question, and I give the straightforward answer that I have given on many occasions. In my view, the general power of competence in the Bill is in a sense a bit of a fraud. In my view, it is not appropriate for local authorities to conduct foreign policy matters. That is why I prefer the previous definition, which was a power to pursue the well-being of the area, defined broadly to cover its economic, environmental and social well-being, but without any temptation for authorities to venture into this territory. I shall not give examples; we all know of celebrated instances of local authorities indulging in a certain amount of grandstanding on matters way beyond their area’s interests. I would not regard that as appropriate.

There must be safeguards, and I do not think that the Bill as drafted gets them right. It dangles the possibility of localism without setting proper parameters, but then leaves a lot of issues, such as this one, up in the air and absolutely at the mercy of the Secretary of State’s decision by order, not Parliament’s decision by statute. To my mind, that is an outrage. I have said during earlier debates that it is not acceptable to ask the Committee to agree something that clearly allows the Secretary of State to tell a local authority what it may or may not do when we do not know how that power will be used. We should be thoroughly, properly briefed before we are asked to give an informed view on a section of statute concerning how the Secretary of State will use such powers.

Gavin Barwell (Conservative, Croydon Central)

The right hon. Gentleman has accepted that some safeguards on the power are needed. If a local authority chose to hold a referendum on something that all Committee members would agree was inappropriate, would there not be a difficulty passing primary legislation in time to deal with it before the referendum? I understand his point of principle, but I am not sure whether leaving such matters to primary legislation would provide such a safeguard.

Nick Raynsford (Labour, Greenwich and Woolwich)

I probably did not explain myself correctly. I prefer retaining the power of well-being rather than general competence because well-being is so defined as to leave no doubt, and it would have been ultra vires to conduct a referendum on foreign policy matters. That is the point that I was making. The hon. Gentleman might not agree, but I think that localism is important and that clear parameters must be set for what is and is not acceptable. I have my view. He may have a different view, but I think that we can both agree that it is better that it is absolutely clear in statute and is not subject to the whim of a Secretary of State who may use the order-making powers at any point to change the ground rules. That does not seem at all right on issues so fundamental.

David Ward (Liberal Democrat, Bradford East)

On the Lisbon treaty, clause 44 includes in the grounds for determination the local authority’s right to make such decisions. For instance, clause 44(4)(a)(i) says that a local matter is one that

“relates to the economic, social or environmental well-being of the area”.

It is covered. It does not need to be second-guessed by a Secretary of State when the local authority can make that decision itself.

Nick Raynsford (Labour, Greenwich and Woolwich)

I agree wholeheartedly. That is the point that I was making in response to the hon. Member for Croydon Central: one needs such things to be clearly defined in statute. I expressed my preference for the general framework of the power of well-being, which, as the hon. Gentleman rightly points out, is specifically referred to in subsection (4)(a)(i). I would be perfectly happy to rest on that. I do not regard it as acceptable for the Secretary of State to be able to trump that and say, whatever the local authority thinks, “I’m coming in with regulations which haven’t been agreed by Parliament, other than under the statutory instrument procedure. They are not in statute, simply in a statutory instrument.” I regard that as an inappropriate use of the Secretary of State’s power, and I suspect that the hon. Gentleman and I agree on that. I hope that his friend the hon. Member for St Austell and Newquay, and possibly the hon. Member for Croydon Central, will agree as well. We might then see the proportion of votes in the Committee shift even more positively towards an outcome that we can all applaud.

Andrew Stunell (Liberal Democrat, Hazel Grove)

May I respond first to my hon. Friend the Member for St Austell and Newquay? He made a thoughtful contribution, particularly about St Dennis in his constituency. Earlier today, we discussed how planning applications might or should be circumscribed in the conditions and regulations relating to the measures. I assure him, as I did earlier, that those matters are receiving careful consideration.

Stephen Gilbert (Liberal Democrat, St Austell and Newquay)

I chose the examples explicitly because they relate to both planning policy and other policies. The incinerator is obviously a planning issue, but it is also a waste issue, while free schools are education policy issues and airports are transport policy issues. They are interlinked.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I agree with my hon. Friend. I have already made a couple of references to the national planning policy framework, and we will debate its relationship to council plans, local plans and neighbourhood plans at a later stage. We also discussed earlier the relevance of subjecting factors in the national planning policy to a referendum. However, I think that my hon. Friend’s broader point is about what limitations should be placed, either in primary or secondary legislation, on a local authority’s capacity to decide what should or should not be subject to a referendum. Bear in mind that it is for the local authority to decide whether it is a local matter and whether it is vexatious and so on. They are the people with their hand on the windpipe of the proposal in terms of what to let through.

The question is whether any overriding issues should be excluded or included. By introducing this Bill, we believe that that could be the case. It is difficult to convey this to a sceptical Committee, but it is not our intention to give an extreme power to the Secretary of State. He has an order-making power, but it must be used in consultation with local authorities and other interested bodies in order to establish what the framework should be.

Nicholas Dakin (Labour, Scunthorpe)

Does the Minister understand why we are a sceptical Committee? The information is not before us and it has not gone through consultation, so we are basically being asked to take on trust the centralising powers of the Secretary of State. That makes this more of a centrist Bill than a localist one, which is its central contradiction.

Andrew Stunell (Liberal Democrat, Hazel Grove)

No, I do not accept that, and I have set out my case on it several times. We are providing an important capacity for local communities to challenge their local authorities and to put their local representatives on their mettle through the non-binding referendum procedure. It is absolutely right that Parliament should decide the exact context for that, and clause 44 sets out what we believe to be the right context. It is right that we set out the parameters we expect local authorities to operate within when exercising this additional opportunity, and the Opposition have not established anything to the contrary.

I say to my hon. Friend the Member for St Austell and Newquay and to the hon. Member for Worsley and Eccles South, who tabled amendment 86, that the issue is about making sure that we have a business-like proposition that will be useful to local communities and that will not be open to abuse or misuse. As has been rightly pointed out, in earlier times there was a tendency for certain local authorities to venture into foreign policy and other matters that were none of their business, which is exactly why clause 44(4) appears as it does. It is also right to include subsections (5) and (6) to make sure that, in the light of what are, at present, unforeseen circumstances—they have certainly not yet been articulated—it is possible to amend and vary the power.

As we envisage it, the provision does not mean that, when a referendum is proposed, the Secretary of State will step in and say that it is not on a valid topic. It is a question of establishing a framework in which decisions can be taken. There might be a whole range of issues. I do not want to speculate on what they might be. I guess if one had a nuclear submarine base within the local authority area, there might be some very important reasons why the Secretary of State might take a view about that kind of project. I do not want to pre-empt a decision, but I give it merely as an illustration of the fact that it is not quite as straightforward and simple as some Members may have imagined.

Heidi Alexander (Labour, Lewisham East)

Will the Minister give way?

The rest of the debate is in Hansard.