Local Audit and Accountability Bill [Lords]

Public Bill Committee, 19 November 2013.

Schedule 8 - Advisory notices

Andy Sawford (Labour, Corby)

I beg to move amendment 141, in schedule 8, page 67, line 22, leave out from ‘the’ to end of line and insert

‘addressed to the Chairperson or Mayor of the authority and the officer concerned’.

Edward Leigh (Conservative, Gainsborough)

With this it will be convenient to discuss Government amendments 48 and 51.

Andy Sawford (Labour, Corby)

It is a pleasure to see you back in the Chair, Sir Edward. I hope you saw that we made good progress in scrutinising the Bill last week.

The amendment concerns advisory notices that can be issued by the local auditor in respect of a decision by the authority that

“would involve the authority incurring unlawful expenditure”,

where an authority

“is about to take...a course of action which, if followed to its conclusion, would be unlawful and likely to cause a loss or deficiency”,

or where there is

“an item of account, the entry of which is unlawful.”

We broadly support the schedule and agree that the local auditor should have the power to issue advisory notices. Clearly, it is about tidying up arrangements to take forward powers previously exercised within the Audit Commission framework.

Our concern is about paragraph 1(2):

“An advisory notice is a notice which—

(a) is addressed to the authority or officer concerned.”

Our reading of the provision is that the authority could receive a notice, but it is not clear to whom it would be sent and who would act as the representative of the authority. It could be the monitoring officer, the finance officer, the chief executive of the council, or the mayor or chairperson of the council, depending on the type of local authority; it could be sent to the authority without a named person on the notice, or it could simply be sent to an officer. Can the Minister clarify whether there will be any further guidance on whom a notice should be sent to?

We also consider that the “or” in the provision is unhelpful and should be an “and”. In local authorities around the country, the overwhelming majority of their transactions are lawful, certainly in terms of their intent and motivation, but there are instances—some have been raised in Committee—where local authorities have taken unlawful action. Our concern relates to the advisory notice being addressed to an officer of the council. We could foresee a situation in which the officer was in some way implicated by the advisory notice. It may, for example, be sent to the chief executive, the finance officer or the monitoring officer. Such individuals have at times been at fault—if we look at past public interest reports—when issues have come to light within the local authority.

We have suggested a simple amendment, so that the notice could be sent to the chairperson or mayor—it could be the chairperson of the board in some types of authorities—and the officer. Our view is that a belt-and-braces approach would ensure that whether it is members or officers who are part of the problem—in some cases, neither may be aware of the issue, and there might be a genuine, understandable reason why things have gone wrong in the authority—they would be aware of the advisory notice and the auditor’s concerns and could take appropriate action.

I hope that the Minister will reassure us that the current wording addresses my point—although it is difficult to see how we could be convinced by an “or” rather than an “and” in the sentence—or agree to take the provision away and look at it. That is not a political point, but a practical point about how local authorities work and about ensuring that the appropriate people receive the advisory notice so that appropriate action can be taken on behalf of the public.

Brandon Lewis (Conservative, Great Yarmouth)

Schedule 8 enables a local auditor to issue an advisory notice, if they consider that an authority or an officer has undertaken, or is about to undertake, unlawful action that has financial implications. An advisory notice must be sent to either the authority or an officer of that authority, whoever is thought to have taken or be planning to take the action. While an advisory notice has effect, schedule 8 makes it unlawful for the authority or officer to continue to take that action, unless the authority has given written notice to the auditor and the notice period has expired.

Amendment 141 changes the individual to whom an advisory notice needs to be sent. I do not consider that to be the best approach and therefore do not consider the amendment necessary. It specifies that an auditor serves an advisory notice by sending it to the chairperson or mayor of an authority, rather than to the authority. If an advisory notice is being served on an officer, it must also be sent to the authority, as in paragraph 2(1)(b).

I consider the amendment to define the individual to whom a notice would be sent too narrowly, because it does not enable service of advisory notices on authorities led by persons other than a mayor or chairman. The “authority” means “relevant authority” as defined in schedule 2 and applies regardless of the governance arrangements of the body. The Bill enables an auditor to issue an advisory notice to any of the bodies under schedule 2, except health sector bodies.

In law, if a document, such as an advisory notice, is served on an authority, it will in most cases be served on that authority in accordance with section 231 of the Local Government Act 1972. For example: an advisory notice to a local authority would be posted to the address of the principal office of the authority; an advisory notice to a parish meeting would be served on its chairman; and an advisory notice on a police and crime commissioner would be served on the commissioner. The existing definition is preferable, and I hope that that means that we can convince the hon. Gentleman to withdraw his amendment.

I shall also speak to amendments 48 and 51. They are minor amendments, which apply the definition of “relevant authority concerned” when the auditor issues an advisory notice, to all of the provisions around advisory notices, rather than just paragraph 3 of the schedule. The “relevant authority concerned” means the relevant authority to which, or to any officer of which, an advisory notice is addressed.

Andy Sawford (Labour, Corby)

I thank the Minister for his reply. I am not familiar with section 231 of the 1972 Act. I do not think that he has fully addressed our concerns. Given that we are talking about a range of relevant authorities, as set out in schedule 2 of the Bill, I take his point that specifying “Chairperson or Mayor” may not be appropriate to many of the relevant authorities. We may therefore move a simpler amendment on Report stating that the advisory notice should be sent to the authority and the officer concerned. In the meantime, I hope that the Minister will consider the matter further.

We are not talking about the overwhelming majority of cases, in which the intention or motivation of officers of local authorities is sound, but the incredibly rare exception where the officer of the authority in receipt of the notice might be the officer of the authority who is part of the problem. The Minister suggests that that could be the case—that that officer would be sent the notice—and our view is that it is clearly sensible for the authority to have that notice drawn to its attention at the same time. We will raise the issue again on Report. In the meantime, I ask the Minister to consider a small amendment to change “or” to “and”. Nothing would be lost and there is something is to be gained by doing so. I beg to ask leave to withdraw the amendment.

Clause 30 - Power of auditor to apply for judicial review

Edward Leigh (Conservative, Gainsborough)

That is good progress.

Clause 31 - Accounts and audit regulations

Andy Sawford (Labour, Corby)

I beg to move amendment 142, in clause 31, page 20, line 22, leave out paragraph (f).

Yes, it is good to make progress on a number of clauses where we can see the Government’s intent and believe that the clauses are sensible. Sadly, clause 31 is perhaps not, although we will hear from the Minister as to why he considers the clause necessary.

The clause is, for us, another example of overreach by the Secretary of State. We hope that the Government, in light of some of their assurances on how audit operates, will consider it unnecessary and over-prescriptive.

Clause 31 will allow the Secretary of State to make regulations about provision of the form and contents of accounting records; the form, contents, preparation and approval of statements of accounts and so on. Hon. Members will be able to see in subsection (1)(a) to (g) the range of areas in which the Secretary of State may make regulations.

As the Minister has rightly pointed out, there is a great body of law, guidance, custom and practice regarding the conduct of audit in this country in both the private and public sectors through the good work of the Chartered Institute of Public Finance and Accountancy. There will, for example, be a code of audit in the Bill, which will be published in consultation with CIPFA by the Comptroller and Auditor General. We support that and consider that to be a helpful form of guidance.

What we consider to be unhelpful is providing a power for the Secretary of State to meddle in the detail of, for example, how a local authority will present its accounts. Clearly, we would all expect it to do so appropriately, in a way that is transparent to the public and that its auditors consider appropriate. If it were not, the auditors would certainly not be shy in including in their letter to the local authority that they were concerned about the way in which the accounts were kept and prepared. Clearly, it would fall foul of the code that the CAG will set out, and the professional conduct that members of CIPFA, who are the leads in local authorities for the preparation of accounts, would have to be concerned about, given their own professional reputations and qualifications. We do not, therefore, consider the code necessary. There is, however, an extraordinary bit of over-reach, even within a clause that is unnecessary overall. That is subsection (1)(f), which states:

“The Secretary of State may by regulations applying to relevant authorities…make provision about…the financial management of relevant authorities”.

To take that power through secondary legislation to meddle in the financial management of relevant authorities is wholly inappropriate and not in line with the rest of the clause.

The Minister might tell us that it is helpful for there to be guidance on or uniformity in how local authorities and other relevant bodies prepare their accounts, but to say that the Secretary of State can, as he chooses, issue provisions about the financial management of relevant authorities seems wholly disproportionate and out of step with the rest of the clause. Will the Secretary of State use that power to direct how local authorities spend their money? Will he use that, for example, to extend his noted obsession with bins to direct how local authorities should reserve money for that particular interest of his? Will that power provide effectively an open door for him to meddle in what are rightly local authorities’ policy decisions on local expenditure and proper financial management?

The Secretary of State has not been shy in telling local authorities how much they should pay people and, notably, he has told local authorities how much they should keep in reserves. Those are rightly matters for those local authorities: they are dependent on local circumstances and should be judgments left to them. Yet, here he has snuck in, to what otherwise appears to be a fairly innocent—if unnecessary—clause, a huge, sweeping power that will allow him to meddle and advance his role as the great centraliser.

The Secretary of State pretends, through measures such as the Localism Act 2011—I and other hon. Members have supported some of these—to be committed to localism, yet by virtue of the Bill, and this measure in particular, he is taking extraordinary powers in terms of secondary legislation. If he wants to bring forward some kind of Bill, statement or White Paper on financial management in local authorities and what he thinks the priorities should be, he could publish that alongside the review of local government finance for next year. If he wanted to make substantive comment about local authority financial management, he could do so when he sets out the provisional allocation of grant in December, rather than seek this power that, if we do not check today, will allow him to do anything he likes in respect of the financial management of relevant authorities. That is quite extraordinary.

We urge the Minister simply to remove the whole clause, because it is unnecessary. If he is minded to keep the clause, we urge him to remove subsection (1) altogether. If, however, he is minded to keep subsection (1), because for some reason he thinks it necessary, certainly we urge him to support our amendment that would delete paragraph (f), which surely he must agree is out of order.

Edward Leigh (Conservative, Gainsborough)

I call Chris Williamson. How nice to see you this morning.

Chris Williamson (Labour, Derby North)

Nice to see you too, Sir Edward. I have missed you over the weekend, so it is nice to reacquaint ourselves.

I rise to support my hon. Friend, who talked about the over-reach in the clause. He is absolutely right. We hear much rhetoric from the Minister and the Secretary of State about the importance of localism, but, as my hon. Friend pointed out, this measure flies in the face of localism. I cannot believe that Government Members would disagree. The Secretary of State and the Minister are in danger of indulging in doublespeak—they talk about localism but they have included this clause in the Bill.

As my hon. Friend pointed out, we have heard a lot of talk from the Secretary of State in the past three years about the level of reserves held by local authorities, but those reserves were put in place to enable them to cope with the unprecedented cuts made to local authority funding by central Government. Local authorities have inevitably tried to build up their reserves to minimise budgetary and financial disruption and to manage the cuts that have been imposed on them. They draw on their reserves to manage the cuts in an orderly way, and to ensure that there is not a huge impact on members of the public who rely on local authority services.

Andrew Griffiths (Conservative, Burton)

I recognise the point that the hon. Gentleman is making about reserves enabling councils to plan, but does he not share the frustration of council tax payers who see local authorities—predominantly Labour authorities—cutting vital public services while racking up millions in reserves?

Chris Williamson (Labour, Derby North)

I am not sure whether the hon. Gentleman is living in a parallel universe. I would be interested to hear whether he can cite a specific example of that. He should look at the sorts of situations that local authorities, whether Labour or Conservative, face. This is not a party political issue. Local authorities right across the piece are alarmed about the scale of the cuts being imposed on them, and they have used their reserves to manage the cuts in an orderly way. Of course, it can appear curious that reserves are being built up while cuts are being made, but local authorities are between a rock and a hard place. They have got to use their reserves creatively to minimise the impact of the funding cuts. I hope that the hon. Gentleman will recognise that, because this issue affects not only Labour local authorities, but all local authorities. The situation is patchy, because local authorities in the most deprived parts of the country have been subjected to the biggest cuts, but all local government has had significant reductions.

Local authorities face a difficult situation, and it is unreasonable for the Government to impose a clause such as this, which could meddle with authorities’ ability to manage a financial situation that they are in through no fault of their own, but as a result of Government decisions. If localism means anything, local authorities must be empowered to manage their finances on the ground in a way that reflects their needs and the pressures on them. If Whitehall and the big, heavy hand of the Secretary of State disrupt that ability, it will have a very negative outcome on council tax payers.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I wonder whether the hon. Gentleman would like to comment on the neighbouring local authority to mine, Manchester city council. Although it has £100 million of reserves, last year it received £1 million from the Government to handle the spare bedroom subsidy. It felt that it was so well off that it sent £500,000 back to the Government, but it continues to evict families without spending that money.

Chris Williamson (Labour, Derby North)

Again, we are getting a half-truth.

Edward Leigh (Conservative, Gainsborough)

Order. Clause 31 is about accounts and audit regulation. I know that the hon. Gentleman, who is very skilled, will keep referring to accounting records and financial management.

Chris Williamson (Labour, Derby North)

Absolutely, Sir Edward; I will most certainly do that.

Andy Sawford (Labour, Corby)

Reflecting on your advice to my hon. Friend, Sir Edward, the interventions are instructive when it comes to showing us how the clause might be used. Government Members have sought to make completely inappropriate political points that are factually inaccurate, and that reveal their intention of using the clause to bring about their political view of the world, rather than allowing local authorities to decide on their financial priorities.

Chris Williamson (Labour, Derby North)

My hon. Friend eloquently makes a point that I was about to deal with. The intervention by the right hon. Member for Hazel Grove was instructive, because it indicated that the Government want to adopt a power to intervene in a way that would disrupt and damage a local authority’s ability to manage its finances. He talked about the spare room subsidy. As we know, the money available from the Government for that purpose is inadequate, and by accepting it, local authorities would be making life complicated and difficult, and would not be dealing with the situation. It would have been far better to abolish the bedroom tax, and there was an opportunity to do that when the issue was voted on last week. We know, however, which way he voted.

Brandon Lewis (Conservative, Great Yarmouth)

I will try to help the hon. Gentleman to move away from political point scoring, as the hon. Member for Corby called it, by pointing out that he might want to double-check the clause. He referred to reserves and how councils manage their finances in relation to this clause, but reserves are governed by council tax setting, which is covered by part 2 of the Local Government Act 2003. Regulations made under clause 31 are not relevant to reserves.

Chris Williamson (Labour, Derby North)

In speaking of party political point scoring, I am only responding to interventions from Government Members. The fact is that the power is wide-ranging. I hear the Minister’s assurance, and I will be guided by my hon. Friend the Member for Corby as to our ongoing response, but I still have a good deal of concern about how the power might be used.

Andy Sawford (Labour, Corby)

Does my hon. Friend agree that the Minister’s argument against the amendment on the grounds that provisions governing local government finance exist elsewhere does not really follow? Clause 31(1)(f) is not necessary, and where the Government want to specify policies concerning local authorities’ financial management with regard to matters such as reserves, they should do so in the appropriate place. They should not adopt a sweeping additional power that would enable them to act contrary to existing provisions on local government finances and reserves.

Chris Williamson (Labour, Derby North)

My hon. Friend makes a telling and revealing point, which highlights that the Minister is arguing against himself. His previous intervention appears to indicate that the provision is unnecessary. Perhaps he will accept the amendment or remove the clause altogether.

Andrew Griffiths (Conservative, Burton)

It is important that we debate the question of financial management. The hon. Gentleman pointed me to the facts of the situation when I mentioned reserves; I will confirm the facts to him. Last year, Derbyshire county council increased its reserves from £234 million to £241 million, while it closed libraries and children’s centres. Does he not agree that it is important to focus on financial management?

Chris Williamson (Labour, Derby North)

I am not sure that that intervention is entirely fair or, indeed, relevant. Derbyshire county council is adjacent to the hon. Gentleman’s constituency, so I am sure that he is aware that it faces huge financial pressures. He can point to the council’s reserves, but I am talking about trying to manage the situation in as undisruptive a way as possible. He can point to Derbyshire, but many Conservative-led local authorities are in a similar situation. This is not a party political point; this is about the role of local government versus central Government, and unnecessary interference by central Government. The Government claim to be in favour of localism, but if they are, what is the point of the provision? The Minister’s intervention indicates that he acknowledges that the clause is unnecessary and irrelevant, because existing powers are available to him. What is the point of this additional clause, unless—as my hon. Friend the Member for Corby suggested, and as I fear—it is being used in an overbearing way to affect decisions at a local level in a way that would have a damaging and disruptive impact on that local authority?

The clause would force local authorities to take a line that the Secretary of State feels is the flavour of the month. We have heard about bins and the Secretary of State’s determination to reintroduce a weekly bin collection. We have heard his continual criticism and complaints about remuneration levels in local authorities. He constantly interferes, yet claims to be a localist. Here is yet another example where his actions do not meet his rhetoric.

James Morris (Conservative, Halesowen and Rowley Regis)

I know the hon. Gentleman always views the motivations of the Secretary of State for Communities and Local Government with a degree of suspicion. Is he not reassured by subsection (3), which says that the Secretary of State “must consult” before making these regulations with

“(a) the Comptroller and Auditor General,

(b) such representatives of relevant authorities as the Secretary of State thinks appropriate”?

That probably means the Local Government Association and other bodies in local government. He must also consult

“the recognised supervisory bodies.”

The hon. Gentleman’s rhetoric on the Secretary of State’s motivations and the powers imbued in the clause is undermined by subsection (3), which suggests that the Secretary of State must consult extensively within local government before making any regulations relevant to subsection (1).

Chris Williamson (Labour, Derby North)

It is not so much the Secretary of State’s motives, though I do question those, but his actions that concern me. Actions speak louder than words. It is of course welcome that he will consult. If his previous record is anything to go by, he can consult and then ignore those whom he consulted, if their view does not coincide with his view of the world.

Paul Blomfield (Labour, Sheffield Central)

Even in the context of the Bill, there is an example. Will my hon. Friend look at the Secretary of State’s consultation on the provisions we are to discuss shortly? In April 2013, the Secretary of State announced a consultation on protecting the independent press from unfair competition, but he announced plans to legislate within two days of the close of the consultation, clearly having paid no regard to it.

Edward Leigh (Conservative, Gainsborough)

Order. The Chair is in some difficulty. The clause relates to accounts and audit regulations. Paragraph (f) is about the financial management of relevant authorities. I do not know, as I have not yet heard the Minister, whether that relates to financial management of accounts and audit regulations. I am anxious not to have a long debate about the iniquities or otherwise of local government finance, and what the Secretary of State is or is not doing. We could get very wide of the point. I know, Mr Williamson, that you will want to stick strictly to the financial management of accounts and audit regulations, will you not?

Chris Williamson (Labour, Derby North)

I absolutely will, Sir Edward. I will draw my remarks on the clause to a conclusion. My fear is that the clause is intended to be used as a Trojan horse to influence, affect and, indeed, direct decisions of local authorities on the ground. It flies in the face of any concept of localism.

My other concern is this: writ large throughout the Bill is an intention to reduce scrutiny. We heard from Transparency International about the lack of checks and balances, and that that will lead to more fraud and corruption in local authorities. My worry is that this is another opportunity for the Secretary of State to force more privatisation and externalisation on local authorities. As we know, a consequence will be less scrutiny of the private sector organisations providing public services through externalised contracts.

As we have heard from organisations such as Transparency International, that will lead to more fraud and corruption. That is a real fear and concern. If all of us in this room are concerned about the public pound, securing value for money and ensuring tax council tax payers are not ripped off, this is a clause too far. I hope that the Secretary of State will withdraw the entire paragraph.

Brandon Lewis (Conservative, Great Yarmouth)

After a wide-ranging discussion I will try to keep strictly to clause 31, which provides a power to make accounts and audit regulations. The regulations have a long history and form a vital part of the legislative framework for financial management and accountability in local government and other non-health bodies covered by the Bill. The amendment would remove the power to make regulations on the financial management of relevant authorities. This is a new provision, which did not appear in the equivalent power in the Audit Commission Act 1998. It complements and supports another new power in paragraph (g) to make regulations on internal control systems, whose removal has not been proposed, I notice.

These are rapidly developing topics and the use of regulations allows the requirements to be kept up to date with the latest good practice. This is in line with the approach in the private sector, where the Financial Reporting Council publishes the UK corporate governance code, with which listed companies are expected to comply. It is an approach followed in central Government and the national health service, where these issues are also covered by codes. Reliance on primary legislation runs the risk of freezing practice in local government at the time the legislation is passed.

It is worth commenting on the issue of “meddling”. The regulations made under the clause will give legal backing to the CIPFA code, as do the current accounts and audit regulations. The apparently new powers are essential to allow a natural evolution of the accounts and audit regulations in order to keep up with modern practice. These regulations have for decades contained important provisions on financial management and internal control, where they are linked with documents and processes connected with the accounts which were within the regulation-making power. However, now that the financial management and internal control provisions form such a significant part of current practice, which the regulations must cover, we have decided to include a specific power in the clause, so that it is absolutely clear what powers are being granted.

Andy Sawford (Labour, Corby)

Will the Minister give way?

Brandon Lewis (Conservative, Great Yarmouth)

Let me just finish this point. I will give way in a couple of minutes. It may help the Committee if I outline the requirements on financial management and internal control that have been included in the regulations. In the 1974 regulations, the provisions were quite rudimentary, simply requiring the chief finance officer to determine the systems of accounting control and ensure that they were observed. Those regulations also placed a duty on that officer to maintain a current internal audit—a vital part of effective financial management and internal control. Regulations made in 1983 and 1996 broadly maintained these requirements, but strengthened them in a number of ways: in particular the duty to maintain an effective internal audit was transferred from the chief finance officer to the authority itself.

Major changes were made in the 2003 regulations, which placed a duty on the authority to ensure that its financial management was adequate and effective and that there was a sound system of internal control. Authorities were required to review the effectiveness of internal control at least once a year, and a statement on internal control had to accompany the statement of accounts. The internal audit duty was also strengthened. Important amending regulations were made in 2006, requiring the review of internal controls to be considered by the body or a committee. The current accounts and audit regulations, which date from 2011, broadly maintain these requirements with some modernising of the language.

That development of the regulations over the years has been accompanied by the issue of professional guidance by the Chartered Institute of Public Finance and Accountancy, which complements and expands on the core duties set out in the regulations. These developments have mirrored developments in the private sector following the publication of the Cadbury report in 1992, and in the rest of the public sector.

Andy Sawford (Labour, Corby)

As ever, it is helpful when we hear the Minister’s response and understand the intention behind the measures in the Bill. Some of what he says is reassuring. On the point about internal control, he noted that the Opposition have not highlighted that provision, but we see it as different to the specific point about financial management of relevant authorities. Will the Minister provide examples of why that power may be necessary and how may it be used? The one example he has given so far, specifying sound financial management, is clearly the whole purpose of the audit itself—indeed of the Bill. It is not something that needs to be specified in secondary legislation by the Secretary of State.

Brandon Lewis (Conservative, Great Yarmouth)

That is why it is important that we get the right provisions in any given Bill, so that the Bill does not just outline what we are trying to do, but is able not only to change the wording of policy, but to change and develop the policy in practice.

In central Government and the NHS, provision can be made by codes issued under the authority of the Treasury and the Department of Health, but for local government we must proceed by legal provision. Regulations are the appropriate medium to use, so that the requirements can keep pace with developments in best practice. That is what has happened over the past 20 years, and the addition of paragraphs (f) and (g) to the accounts and audit regulations will give explicit recognition to that important function of the regulations.

As I said earlier, the amendment would remove only paragraph (f), on financial management, leaving paragraph (g), on internal control, in place. That would make little sense. Internal control exists within the overall financial management framework of a local authority. To be able to regulate one but not the other risks leaving the framework incomplete. Key aspects of financial management, such as internal audit; the role of committees in reviewing their annual governance statement; and the overall duty to maintain adequate and effective financial management will be covered by the regulations. Removing the power from the clause would call into question our ability to include such provisions in future regulations.

Paul Blomfield (Labour, Sheffield Central)

I concur with my hon. Friend the Member for Corby that the way in which the Minister is describing the provision is reassuring. Despite his words, however, there remains considerable concern for us about the use of subsection (1)(f). If it is used in the way he describes in relation to paragraph (g), it sounds entirely reasonable, but the provision remain a stand-alone paragraph in a clause that is about accounts and audit regulations, which would give considerable power—the sort of power that has been suggested by some of his colleagues in this debate, for example, the power to direct local authorities on how they manage their reserves. That is only one example. The power is broad ranging. Is the Minister not concerned that he is creating an extraordinary precedent, not only for the current Secretary of State, but for any future Secretary of State?

Brandon Lewis (Conservative, Great Yarmouth)

If the hon. Gentleman looks in Hansard at what my hon. Friends were saying about the use of reserves in response to the hon. Member for Derby North, he will see that they were responding to his comments on the stringencies of local government finance. I will not test your patience, Sir Edward, by getting into the strengths of local government finance and how well it has coped, with the latest BBC report highlighting how satisfied people are.

I cannot overemphasise the importance of effective financial management in local government. In this country, we have been mercifully free of the sort of troubles we currently see in some American cities, for example. In part, that is due to the strong emphasis on sound finances that has always been in our local government system, but it is vital that the legislative framework provides for proper direction and support for the future.

Paul Blomfield (Labour, Sheffield Central)

I was interested by the Minister’s reference to American cities. I am assuming that the implication is that some of the problems in American cities could have been dealt with by direction to the city in how they manage their money, not simply how they regulate their accounts, audit procedures or financial reporting. Is that the power the clause is seeking for the Secretary of State?

Brandon Lewis (Conservative, Great Yarmouth)

I repeat exactly what I said a few seconds after the quote the hon. Gentleman has referred to. In part, it is due to the strong emphasis on sound finances, which has always been in our local government finance system. We need to ensure that we keep it that way and allow the system to be flexible enough to develop as things move forward and practice moves.

The Public Accounts Committee has recently taken a close interest in financial viability and financial control systems in local government. The Department for Communities and Local Government’s accounting officer has set out his responsibilities for those systems in a statement that has been considered by the PAC. His power to act on those responsibilities depends on the ability of Ministers to set an adequate legislative framework for local government. That is essential, so that Parliament can receive the assurance it needs about the proper use of public funds.

In light of my explanation, I hope that the hon. Gentleman will withdraw his amendment.

Andy Sawford (Labour, Corby)

I thank the Minister for his response, but I do not feel it adequately addresses the points raised by my hon. Friends.

The Minister makes the provision sound benign, describing the way in which it updates practice in the world of audit and financial management. He clearly sees paragraphs (f) and (g) as inseparable, but my hon. Friend the Member for Sheffield Central highlighted how they are separate points and allow the Secretary of State to do very different things, and, specifically in relation to paragraph (f), to meddle in financial management. That is relevant.

The Minister tells us that the provision might be used in relation to the audit and accounts of local authorities. Indeed, Sir Edward, I heard you ruminating on that and whether the wording of the clause is such that paragraph (f) would confine the use of the power.

James Morris (Conservative, Halesowen and Rowley Regis)

Is not the hon. Gentleman alighting on the key point, which the Minister also raised, that the term “financial management” as it relates to the clause is quite narrowly defined? In accounting terms, when people talk about financial management in this type of context, they are specifically relating it to a framework by which the accounts and the framework of local authority accounting is to be taken into account, so financial management in the clause is narrowly defined. Is that not the key point that should reassure him?

Andy Sawford (Labour, Corby)

The hon. Member for Halesowen and Rowley Regis makes a characteristically helpful intervention. He thinks the best of the Government’s motives, as we would expect, but we too want to think the best of the intentions behind the clause. I was looking to see whether the Minister was nodding in the direction of his hon. Friend to confirm the point he made. If the Minister had made that point clearly in his remarks, it would have been incredibly helpful, but he was not able to give us any clear examples of how the clause would be used. Part of the process of scrutinising the Bill is to help people in the future to interpret the meaning of the clause, and to ensure that the parameters in which the clause could be used are more clearly set out on the record.

In fact, the Minister made much more general reference to the Government’s need for powers to meddle in financial management, causing us greater concern, as did interventions from some Government Members on the policy decisions of local authorities on how they manage their finances. If the intention behind the clause is to have some very limited powers over financial management, relevant to audit in a local authority and clearly linked to the points on internal control the Minister made well, that is something altogether different from a clause which, as it stands—certainly by any reading of the Minister’s inability to give examples or clarify how it could be used—could be used much more broadly to meddle with policy decisions that are rightly the preserve of local authorities accountable to their local electors.

James Morris (Conservative, Halesowen and Rowley Regis)

I cannot recall the Minister using the word “meddle” in relation to paragraph (f), but the point remains that in common practice, when any regulatory body talks about financial management—if we look at the Companies Act 2006 and at other ways of approaching audit and control—financial management is used in a very specific, defined way, and that obviously applies to the clause.

Andy Sawford (Labour, Corby)

I thank the hon. Gentleman for that intervention. No disrespect to the Minister, but I would be happy to see the hon. Gentleman responding for the Government on this point. He makes a much more helpful contribution to the debate and is more reassuring on how the power could be used. As the paragraph stands, it is inconsistent with the intentions set out around the rest of the clause. It is certainly inconsistent with the Government’s much vaunted commitment to localism, and I am a localist, so I want to help them to be consistent in their claiming to be the champions of localism.

Frankly, it would be unconstitutional in the United States and in most western countries for the central Government to take this kind of power and to meddle in local financial affairs. If it were debated in the United States there would be public uproar about the overreach of the federal Government, yet the Government have slipped it through our parliamentary system without any real explanation, clarification or limitation of how it can be used. I note that the Minister failed to respond to my hon. Friend the Member for Sheffield Central, who sought clarification on how the power will be used.

My hon. Friend the Member for Derby North called the clause a Trojan horse. Again, I suspect that there is a difference of opinion about the Government’s motivation. The Government may not have designed it as a Trojan horse, and we should give them credit for that. The officials who drafted subsection (1) may have thought that it was helpful. However, we cannot deny that it can be used as a Trojan horse.

We do not want to oppose something that could be important and helpful to matters such as internal control and the conduct of audit, on which the Opposition have sought to bring scrutiny to bear. It would be wrong of us to limit the ability of auditors to properly hold local authorities and other authorities to account. However, we are struggling because we have not been assured that that is the intended effect of paragraph (f).

Brandon Lewis (Conservative, Great Yarmouth)

The hon. Gentleman has been generous in giving way today. I appreciate that he is not referring to the clause as a Trojan horse just to make political capital and to score political points, and he has stressed that he does not seek to do that. Clause 31 specifically and clearly refers to how accounting procedures are dealt with, so it seems self-explanatory that it refers to accounting procedures rather than anything else. As I said in my main remarks, the regulations that may be made under the clause will give legal backing to the CIPFA code, on which I know the hon. Gentleman puts great weight, and to the current accounts and audit regulations—but it is obviously a matter for the hon. Gentleman.

Andy Sawford (Labour, Corby)

As I made clear, we want to understand why the Government think the clause is necessary. The Minister’s view is that it is necessary and that some elements of it carry forward previous provisions relating to the world in which the Audit Commission was responsible for audit. However, my point, which the Minister again failed to address by conflating the debate on the whole clause, is that paragraph (f) leaps off the page.

Brandon Lewis (Conservative, Great Yarmouth)

I will have one more go at trying to allay the hon. Gentleman’s fears. It is clear that the clause seeks to deal with the key aspects of financial management, such as internal audit and the basic content of annual accounts, as the current accounts and audit regulations already do. We do not intend to change the scope of the regulations, and I struggle to see how even the Opposition can argue that the clause will do that.

Andy Sawford (Labour, Corby)

I thank the Minister. That was his most helpful reply so far, and it would be helpful if future Secretaries of State and others to refer back to it. He said that paragraph (f) relates to the basic content of annual accounts and matters of internal control. If that is the effect of the clause in the long run, we can understand the Government’s intentions. I ask the Minister to go away and think about whether that can be made clearer and more explicit on the face of the Bill, although it is now in Hansard. It is a shame that we have had to draw it out of the Minister, because we all want to make rapid progress on the clause. We will return to this on Report to ensure that there is the strongest possible clarification that the measure will not be used in an inappropriate way. In thanking my hon. Friends for making incredibly helpful, important and telling contributions to the debate, which have finally drawn some clarification, I beg leave to withdraw the amendment.

Schedule 9 - Data Matching

Brandon Lewis (Conservative, Great Yarmouth)

I beg to move amendment 53, in schedule 9, page 72, line 17, at end insert—

‘(10A) In this paragraph “enactment” includes—

(a) an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales,

(b) an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament, and

(c) an enactment contained in, or in an instrument made under, Northern Ireland legislation.’.

Edward Leigh (Conservative, Gainsborough)

With this it will be convenient to discuss the following:

Government amendments 104 and 54.

Amendment 143, in schedule 9, page 74, line 1, at end insert—

‘(d) to assist in the prevention and detection of maladministration and error.’.

Brandon Lewis (Conservative, Great Yarmouth)

These amendments clarify and update the data-matching provisions in schedule 9 and add the prevention and detection of errors and inaccuracies as further potential purposes for which a data-matching exercise can be carried out by the national fraud initiative. Amendment 53 makes it clear that “enactment” in the context of schedule 9 includes primary or secondary legislation made under Measures or Acts of the National Assembly for Wales, Acts of the Scottish Parliament and Northern Ireland legislation.

Schedule 9, paragraph 4(8) makes it an offence for a person to disclose data, other than in specific circumstances. Paragraph 4(7) sets out where the onward disclosure of data may occur and in particular provides that disclosure is permitted under “an enactment”. The amendment clarifies that that term applies to enactments contained in, or instruments made under, devolved legislation. That also ensures consistency between schedules 9 and 11. Amendment 104 updates the definition of relevant NHS bodies in Northern Ireland for the purposes of data-matching exercises. The revised definition covers the full range of NHS bodies in Northern Ireland participating in data-matching exercises and is designed to be consistent with legislation in Northern Ireland, Scotland and Wales.

Amendment 54 adds the prevention and detection of errors and inaccuracies as further potential purposes for which a data-matching exercise can be carried out by the national fraud initiative. Lord McKenzie made a strong case for similar powers to be included in the Bill in the other place. At that time we considered that, although the Bill provides a timely opportunity for such an amendment to be made, especially given the national fraud initiative’s future home in the Cabinet Office, it was critical that we understood the implications of such a potential extension to ensure that the balance of risk and opportunity was properly assessed. Over the summer that is what we have done.

We consider that the amendment will allow the national fraud initiative to continue to undertake the ad hoc data-matching exercises that it does at present through the Audit Commission's wider powers once the NFI moves to the Cabinet Office. That means that all possible uses of the NFI to carry out data-matching exercises will be set out in the Bill. That will allow the possible extension of the data-matching powers to include the prevention and detection of crime, other than fraud; to assist in the apprehension and prosecution of offenders; to assist in the recovery of debt due to public bodies; as well as the prevention and detection of inaccuracy and error, which is the subject of the amendment.

I remind colleagues that, before adding any of these purposes, the Secretary of State must consult relevant authorities, their representatives and the bodies affected. In addition, those regulations will be subject to the affirmative resolution procedure. In our view, those safeguards will ensure that proper consideration is given to any extension to the initiative’s current powers.

Andy Sawford (Labour, Corby)

May I ask, Sir Edward, on a point of order, whether it is your intention that I cover our amendment 143 in responding to the Government’s amendments?

Brandon Lewis (Conservative, Great Yarmouth)

If it helps, I can cover that quickly as well before the hon. Gentleman speaks. I shall be brief. Amendment 143 would require the addition of a fourth potential purpose for which data-matching exercises can be undertaken by the national fraud initiative to

“assist in the prevention and detection of maladministration and error”.

As I have outlined, Government amendment 54—I hope this will give the hon. Gentleman some satisfaction—adds the prevention and detection of errors and inaccuracies as further potential purposes for which a data-matching exercise can be carried out by the national fraud initiative. We consider that the amendment will allow the national fraud initiative to continue to undertake the ad hoc data-matching exercises that it does at present through the Audit Commission’s wider powers, once it has moved.

Although we felt that a good case was made by the Audit Commission for the inclusion of error, in our view there was insufficient evidence on how the investigation of maladministration over and above error might be used. Furthermore, maladministration has a strong association with the work of the local government ombudsman. We were concerned that its use here might cause confusion as it could result in another body looking at maladministration in local authorities. However, unlike the ombudsman, it would be unable to act on the findings, thus potentially adding to his burden while raising the potential for conflicting roles and responsibilities.

I hope that with that explanation the hon. Gentleman will not press his amendment.

Andy Sawford (Labour, Corby)

I thank the Minister for his remarks, which greatly assist me—and render some of my carefully prepared notes redundant.

Edward Leigh (Conservative, Gainsborough)

I apologise for allowing the Minister to speak first.

Andy Sawford (Labour, Corby)

I do not mean it in that respect, Sir Edward. The Government have listened, and that is to be welcomed. They have listened in respect of specifying where the national fraud initiative will go. Points were raised extensively in the House of Lords. The Government committed to setting out where it would go, and we now know that it will go to the Cabinet Office.

The Government have also listened to the point about error, but there is clearly some difference between us on the strength of Government amendment 54, which is to be welcomed in itself, compared with our own proposed amendment, which is supported by a wide range of stakeholders, so I wish to speak to why we believe it is necessary.

Our concern is that the data-matching exercises that the Audit Commission undertakes at present under its audit powers would not be available to any new body, as they would not fall within the additional purposes provided for. In tabling the amendments at this stage, the Minister has helpfully strengthened those elements of the Bill and gone some way to responding to our concern. We would all agree that prevention and detection of maladministration and error are particularly important. The context that my hon. Friend the Member for Derby North referred to—the financial challenges that the local authority faces—makes this as important as it has ever been.

We recognise that local authorities are being pressed to make tough, quick decisions. My hon. Friend made the point about reserves and the ability of local authorities to plan ahead as they see their finances being cut disproportionately to the rest of the public sector. Some authorities, notably those serving the most deprived communities in the country, are facing the most swingeing cuts. The consequences of the decisions that are being pressed upon them and the speed at which they are having to take decisions are huge in terms of the sound financial management that we would all hope to ensure is in place in local authorities, and ultimately there are consequences for the public that local authorities and other relevant authorities serve.

We want the Bill to be amended so that data-matching powers can be included in relation to maladministration and error. I will set out why. We have talked about the Audit Commission’s shortcomings—all hon. Members have been keen to point those out, especially Government Members—but its work through the national fraud initiative has identified around £1 billion worth of fraud, error and overpayments. Particularly at a time when local authorities are struggling for resources, we want to ensure that such amounts of money—£1 billion of public money—are adequately detected. The point in Government amendment 54 about error is well made.

On maladministration, the ad hoc Committee on the draft Local Audit Bill recommended amendment 143, as did the Audit Commission, which cited a range of ways in which such powers had been used. The Bill helpfully adds foundation trusts, and a range of other bodies, to the list of mandatory participants; the Government responded, in a welcome way, to points made about that in the other place. The Bill would therefore provide many more opportunities to detect maladministration and error across a much broader range of organisations.

Housing associations are an example of bodies that participate in data matching only if they choose to do so. That is despite clear evidence that data matching is a very powerful tool for helping bodies to detect potential tenancy fraud, and the increased focus on housing tenancy fraud over the past two years has led to significant savings for the public purse. We want housing associations, foundation trusts, local authorities—indeed, all bodies—and especially the public and the tenants whom those bodies serve to be protected from maladministration.

The Minister suggests that the powers in amendment 143 would overlap with the role of the local government ombudsman. He made an interesting observation about how the amendment would interplay with the ombudsman’s role; that is certainly something for us to go away and think about. When he responds, I hope that he will recognise that we broadly welcome the approach that he has taken, and that we think that the proposals are the result of good scrutiny. Many of the amendments were tabled because of the level of concern expressed, both in and outside Parliament.

There are a few questions to which I ask the Minister to respond. The ad hoc Committee heard suggestions that regardless of who owns the national fraud initiative—we now know that it will be the Cabinet Office—there should be a governance board representing key stakeholder interests to oversee the initiative’s development and operation. That seems a helpful and welcome suggestion. I ask the Minister to respond on that point.

It is not clear to me, or to other bodies—this point was made by the ad hoc Committee—what mechanism will be available to the Cabinet Office to ensure that participants in the data matching in the national fraud initiative follow up on data matches; perhaps the Minister can point me to the effect that any of the amendments in this group will have in that regard. To come back to the point about the baby and the bathwater—I recall your regret, Sir Edward, at the use of that language—the Audit Commission has a wide range of powers, some of which it has used to good effect; its appointed power to ensure that bodies subject to data matching follow up on data-matching exercises could be lost. If the Minister could assure us on what powers, if any, the Cabinet Office will have in that respect, it would be helpful.

Maladministration is the sticking point, as the Minister says. We will test the issue on Report, and hope that the Minister listens to our concerns that his amendment does not go far enough. Dealing with “errors and inaccuracies” is a more benign way to use the national fraud initiative, although clearly that can save substantial amounts of public money. Maladministration is quite different. That relates to points made to us by Transparency International about the potential for corruption in local government. We know of examples of significant maladministration by local authorities around the country; they are always regrettable, and they come from administrations of all types, sizes and political colours. The infamous “homes for votes” scandal is perhaps an example that will always be on the mind of people who are considering how effective audit is.

Clearly, through the data-matching exercise, maladministration may come to light. The effect of not giving any powers is that the Cabinet Office and authorities and auditors who are made aware of maladministration—it may have come to light through data matching—will have no powers to act upon it. The local government ombudsman might, by some other route, commence some kind of investigation, but, to our knowledge, there is no trigger from the data-matching exercise to the role of the Cabinet Office and any action by the local government ombudsman.

Could the Minister assure us, perhaps by some form of guidance or a letter to the Cabinet Office that he copies to us, that there would be an expectation that the local government ombudsman would act when there is evidence of maladministration or suspected maladministration—we would all hope that subsequent investigation finds simply error or inaccuracy rather than maladministration? Will he assure us that, when maladministration comes to light through data matching, action will be taken, if not in the more direct way in the Bill that we propose, then in an indirect way through the local government ombudsman? In the absence of such a trigger, we will need to press the matter to a vote.

Brandon Lewis (Conservative, Great Yarmouth)

I hope I can reassure the hon. Gentleman. Discussion on the arrangements for the governance of the national fraud initiative will continue with representation from interested parties. We are currently in discussion with the Cabinet Office and the Audit Commission to finalise those arrangements as part of the wider work on the transitional arrangements.

It also worth confirming that all public bodies that are subject to audit are required to participate in a bi-annual data-matching exercise carried out by the NFI. As the NFI charges those bodies a fee for any data matches supplied, it is unlikely that they would fail to follow them up. The success of the NFI in providing local government with such an effective tool to tackle fraud demonstrates the value of the exercises. Local government agrees.

We have to be aware of how important a tool that has been in the fight against fraud in local bodies. It has identified more than £1 billion since it was started in 1996. We are keen to ensure that it is able to carry on fighting the good fight in that respect while continuing to develop its capabilities in a fast-moving and fast-changing forward landscape. That is why, on 15 July, Lord Wallace announced that those powers will transfer to the Cabinet Office once the legislation is in place. The wider scope of public audit also means that the external auditor would need to be reassured that the body had suitable counter-fraud measures in place to protect public funds.

I should like to reassure the hon. Member for Corby that we have discussed the wording and scope of the amendment with the Audit Commission. It has confirmed that it is content that the measure enables the future owner of the NFI to run the types of data-matching exercises that it currently does. We believe that that gives the right cover. To be clear, the additional purposes we have outlined are on assisting in the prevention and detection of crime other than fraud, assisting in the apprehension and prosecution of offenders, and assisting in the recovery of debt owing to public bodies.

Andy Sawford (Labour, Corby)

It is reassuring that the Audit Commission supports the Government’s approach in the schedule. As I have made clear, we welcome the way the Government have listened. We know that the Audit Commission supports many of the substantial concessions that the Government have made, but it does not support the Minister on the maladministration point. I have its most recent note to me, which I believe other members of the Committee will have received—it is a publicly available submission to the Committee. It clearly states that the purposes that should be added include:

“to assist in the prevention and detection of maladministration and error”.

The Audit Commission does not support the Government on that point. We cannot allow its welcome agreement with the Government and the Government’s welcome concessions to mask the fact that there is a clear disagreement on that point between the Government and everybody else, including the ad hoc Committee, the Audit Commission, the Opposition and their lordships.

Brandon Lewis (Conservative, Great Yarmouth)

I will not repeat everything I said in my core remarks on the role of the local government ombudsman in dealing with maladministration, fraud and error—the hon. Gentleman has said he will go away and look at them—but, as I have said, a relevant Minister would be required to consult widely before regulating, modifying or limiting any current powers that are subject to the affirmative procedure.

Schedule 10 - Best value inspections

Brandon Lewis (Conservative, Great Yarmouth)

I beg to move amendment 55, page 75, line 4, in schedule 10, leave out ‘paragraphs (a) and (b)’ and insert ‘paragraph (a)’.

Edward Leigh (Conservative, Gainsborough)

With this it will be convenient to discuss Government amendments 56, 57, 105 and 58 to 61.

Brandon Lewis (Conservative, Great Yarmouth)

Amendments 55 to 61 are intended to take account of amendments to the Local Government Act 1999 made by the recent Public Audit (Wales) Act 2013 that have already removed or amended provisions relating to the Auditor General for Wales.

Amendment 105 makes a minor and technical amendment to section 25(2)(a) of the Local Government Act 1999, to ensure that inspectors and assistant inspectors of best value authorities can still be required to have regard to any guidance issued by the Secretary of State when carrying out investigations or inspections of best value authorities, once the Audit Commission is abolished.

These are minor and technical amendments that remove redundant references or make clarifications to related provisions in existing legislation. I do not intend to delay the Committee further.

Schedule 11 - Disclosure of information

Andy Sawford (Labour, Corby)

I beg to move amendment 144, in schedule 11, page 76, line 36, at end insert—

‘unless there is an overriding public interest in favour of its disclosure’.

Edward Leigh (Conservative, Gainsborough)

With this it will be convenient to discuss amendment 145, in schedule 11, page 77, line 22, at end insert—

‘(l) to the Comptroller and Auditor General, for the purposes of the functions under or by virtue of section 18 and Schedule 6 of this Act, or

(m) to the Secretary of State, for the purposes of accounting to Parliament; and

(n) for the purposes of the Care Quality Commission under the Health & Social Care Act 2008.’.

Andy Sawford (Labour, Corby)

Elsewhere in the course of the debate— we hope there will be time to debate our new clause 2 —we have commented on some of the provisions in the preceding clauses. We have not sought to debate them at this point because we wish to ensure that our general and wide-ranging concerns about transparency are well made. We shall do so in relation to new clause 2.

We know that many cases of wrongdoing, maladministration and fraud in local authorities are identified by whistleblowers bringing them to the attention of the appropriate person. Currently under the relevant legislation the Audit Commission and its appointed auditors are both described as prescribed persons. We consider that it is possible that whistleblowers might not approach a private auditor employed by a local body or council in the way that they would perhaps have approached the Audit Commission or its appointed auditors. Although we have sought to put in place safeguards for the independence of that relationship, the perception of the local authority employee in a new world where the authority itself will have appointed its own auditor may mean that that officer or whistleblower does not feel confident enough to approach a private sector auditor as they might have approached the auditor independently appointed by the Audit Commission.

In addition, they could have approached the Audit Commission, but that provision is not allowed for in the Bill. That is why we have tabled our amendments 144 and 145. We agree with the recommendation of the ad hoc Committee that the council’s audit committee should be named in the Bill as a prescribed person. I do not understand why the Government have resisted this. The effect of our amendments is to ensure that the Government think further about this. It is very important that new audit arrangements maintain independence, encourage probity, make appropriate provision for whistleblowers and ensure that it is still possible to compare the relative performance of different local authorities. After all, independent auditors blew the whistle on the homes for votes scandal that was referred to in the debate.

A possible consequence of the way the Bill is worded is that a worker may believe that their only option to raise an issue of concern is with the media or general public. This is one route to shining a light on maladministration, error or fraud, but so often it is a blunt instrument to address issues in a local authority, compared with whistleblowing to an appropriate person. Although this may be to the private sector auditor, and we do not want to exclude that option for whistleblowers, we seek to enhance the options for them to ensure that it can take place.

Departments are accountable to Parliament for the billions of pounds of taxpayers’ money paid to them by local bodies. Departmental accountability system statements refer to the assurance that Departments obtain from local external audit. Therefore, accounting officers need to continue to have access to the results of audits.

Schedule 11 will make audit information confidential except in certain specified circumstances. That is our concern, reflected in amendment 144, about access to information. The amendment is a small, tidying-up amendment. It is a different point from whistleblowing, although the two are related.

Under the schedule as it currently stands, there is a general bar on disclosure, and there are exceptions. Paragraph 2(1)(a) of the schedule states:

“Information to which this Schedule applies may not be disclosed except…with the consent of the body or person to whom the information relates”.

As I understand it, that is not a total block on the disclosure of information, because sub-paragraphs (1)(b) to (1)(k) will allow a disclosure even where a person does not give their consent; indeed, our amendment would add additional exceptions in relation to the Comptroller and Auditor General.

Our view is that, in the interest of transparency, we should not seek to place significant limitations on when information can be disclosed. Currently, if information does not relate to the specific provisions of sub-paragraph (1)(b) to (1)(k), , we could find a situation—it may be an exceptional situation, which the Minister might reflect to us in responding to the amendment—in which an individual to whom the information relates says, “I don’t want that information to be in the public domain”, and it is not possible to identify where that information falls within sub-paragraph (1)(b) to (1)(k), which contain a range of specific provisions that override an objection under sub-paragraph (1)(a).

We have sought Government officials’ clarification that one does not have to meet all the overriding provisions; simply one of them. However, where it is not possible to identify a specific overriding provision, it will be possible for an individual to say, “No, I don’t want the information to be made public”.

The sensible way of covering all eventualities is to add to sub-paragraph (1)(a), which currently states

“with the consent of the body or person to whom the information relates”,

the phrase,

“unless there is an overriding public interest”.

That exact form of words is used elsewhere in the Bill, so there is precedent; the Government have used that form of words. We hope that they will look at the amendment and consider it to be a helpful way of ensuring that there are no loopholes. Clearly, where there is a public interest, there is no loophole. We hope that the Government will see our intention and understand that the amendment would be a perfectly reasonable and sensible one to make to the Bill and would stand in the interests of transparency.

I have made the point about whistleblowers, which was debated extensively in the House of Lords. We cannot understand why the Government will not see the point that the Bill will not cover people who do not wish to approach the private auditor so it needs to be substantially strengthened. I know that some of my hon. Friends feel strongly about that. The point was also raised by Government Members in the House of Lords and made strongly by the cross-party ad hoc Committee. I hope that the Minister will feel able to accept our amendments. This is not a political point; it is made in the spirit of ensuring that there is the maximum transparency. When things go wrong—all the evidence suggests that that is rare—we will then have the maximum opportunity, because there are no loopholes regarding the disclosure of information and no barriers to whistleblowers, to ensure that appropriate action is taken.

Chris Williamson (Labour, Derby North)

I hope that the Minister will listen to my hon. Friend’s wise counsel on this issue, because this is a helpful amendment. As my hon. Friend said, it is a tidying-up amendment, which will offer considerable additional protection and strengthen the Bill.

Throughout our consideration of the Bill, I have made various comments about the way in which powers to root out fraud and corruption are being diminished, and the schedule is another of the provisions that make it more difficult to shine a light on malpractice. The Government seem to want to go down the path of more externalisation and privatisation, and it would be helpful if the Minister, subject to his response, accepted the amendment.

It is interesting to look at what the Under-Secretary of State for Communities and Local Government, Baroness Stowell, said about the detection of fraud and corruption. She was pleased that local authorities had detected £178 million in fraud last year. However, she went on to say that they needed to go further. It is difficult for them to go further, however, because the whole thrust of the Bill is in the opposite direction. I therefore hope the Minister will take the amendment on board and consider it. If he is not prepared to accept it, I hope that he will at least reflect on the Bill’s wording and perhaps introduce his own amendments further down the line to address the concerns that my hon. Friend outlined.

It is not unreasonable to ensure that something should be disclosed if there is an overriding public interest in disclosure. If the public interest is overriding, it should surely not be within the power of the body affected simply to say, “No, we don’t want this disclosed, thank you very much. It might be a bit embarrassing for us.” Well, the public interest—particularly if it is overriding, as in the amendment—should prevail in those circumstances.

We hear a lot about transparency from Ministers and other Government Members, and if they genuinely believe in it, they will agree that the amendment is reasonable. I therefore hope that the Minister will take it on board or introduce his own form of words to deal with the issue. If we could achieve that, it would be of at least some reassurance to the general public, who will be alarmed by much of the content of the Bill.

Andy Sawford (Labour, Corby)

My hon. Friend is right to draw the Government on this point. We understand that they have said they intend to make the Comptroller and Auditor General a prescribed person through an amendment to regulations, rather than through the Bill, but we would hope to hear that from the Minister and to have absolute confirmation that that will take place.

Chris Williamson (Labour, Derby North)

My hon. Friend is absolutely right. We wait with bated breath to hear the Minister’s response, and we hope he will give that reassurance or simply accept the amendment.

James Morris (Conservative, Halesowen and Rowley Regis)

Is it possible for the hon. Gentleman to give an indication of how he defines the overriding public interest?

Chris Williamson (Labour, Derby North)

I do not seek to define it here today, but I think that there is probably an accepted definition. My hon. Friend might be able to assist in giving a clear indication of what we mean by an overriding public interest, but I think that there is an accepted definition, laid down by precedent, that could come to the fore. My hon. Friend might be able to help.

Andy Sawford (Labour, Corby)

It is really worrying to hear a Government Member ask that question, because it calls into question the use of this language by the Government elsewhere in the Bill, and whether they know what their intention is. Perhaps the Minister can clarify this point. We used this wording because we thought that the Government might accept it. If the Government do not have clarity about what the overriding public interest is, then we might need to review whether we would support that provision elsewhere in the Bill.

Chris Williamson (Labour, Derby North)

That is a helpful and revealing intervention, and all the more reason why we hope that when the Minister responds he will be able to assist on that point. This would also help the hon. Member for Halesowen and Rowley Regis. It is not for me to stand here and define that; it is a matter for the Government and for looking at the precedents for the use of that term.

Neil Carmichael (Conservative, Stroud)

Does the hon. Gentleman agree with me that sub-paragraph (3) helps to broaden the scope of this paragraph as a whole?

Chris Williamson (Labour, Derby North)

To be honest, I am not sure that it does. We tabled the amendment simply to seek clarity. Given the hazy notion—subject to what the Minister says—of what is meant by overriding public interest, the amendment is even more important. We will listen to the Minister’s response in justifying—or not—this particular clause.

If you said that a clause was going to be agreed under which potentially embarrassing information could be disclosed only with the consent of the body or the person to whom the information related, without the proviso that we suggest, then alarm bells would ring for ordinary lay members of the public. I am just an ordinary lay member of the public. I might be a Member of Parliament, but I am a bricklayer. My background is bricklaying, so I am not a lawyer or an expert on these things. I am trying to use the everyday, common parlance used by the ordinary people whom I seek to represent in this place.

To me, as an ordinary humble bricklayer, the wording of the clause without the added proviso—notwithstanding the hazy definition of what we mean by overriding public interest—fills me with some trepidation. The onus is not on me to explain it; we are in opposition at the moment. We are merely pointing out what we consider to be weaknesses. I appreciate that the term is in the amendment, but in the end it is up to the Minister and to the hon. Gentlemen and hon. Ladies on the Government Benches to give us and the public the reassurance that what they are doing will not diminish accountability and transparency.

As we heard from Transparency International, there is the potential for this to result in more fraud, corruption and misuse of public money. Particularly in a time of austerity, when people see unbelievable cuts in public spending and services being decimated, they have the right to know that money is being spent wisely and appropriately. Where public money is revealed to have been misspent, people should know about it. Why should potentially embarrassing information be revealed only with the consent of the body or the person to whom the information relates? [Interruption.] Perhaps the hon. Member for Burton, who wants to intervene, can explain that.

Andrew Griffiths (Conservative, Burton)

Is the hon. Gentleman seriously asking us to vote for an amendment when he cannot explain what the words mean?

Chris Williamson (Labour, Derby North)

I think there is an accepted view of what is understood by an overriding public interest.

Andrew Griffiths (Conservative, Burton)

Which is?

Chris Williamson (Labour, Derby North)

We only have to look at case law. Very often these words are subject to interpretation. An example of overriding public interest might be if money is expended wastefully, resulting in considerably more council tax payers’ money being used to fund a project than necessary, when more cost-effective ways were available. Another example is if a member of staff is dismissed. Government Members have said that confidentiality clauses should be scrapped. If the amendment was accepted, it might be a way of ensuring that situations such as that could be brought to the public’s attention.

The hon. Gentleman is making an unreasonable semantic point. He is trying to undermine an important and valid concern that we are expressing, which is unfair when all we seek to do is protect the public and ensure that information is not withheld unreasonably from the council tax payer and the general taxpayer.

Andy Sawford (Labour, Corby)

I am very concerned that hon. Members voted for the provision on page 8, line 15 in clause 10 on the functions of an auditor panel, which includes the words

“unless there is an overriding public interest in favour of its disclosure”,

without knowing what that phrase meant at that point. We hoped that they knew what it meant. We interpreted it in a common-sense way, as my hon. Friend has set out. Clearly, if that is not a shared understanding and Government Members do not know what they mean by it, we might have to consider raising the use of that term in clause 10(11) on Report. Frankly, it would be rendered meaningless if they have no idea what they mean by it.

Chris Williamson (Labour, Derby North)

That is a revealing intervention. Hon. Members have been seeking to put me on the spot and undermine my support for the amendment by suggesting that I cannot give a definitive explanation of what is meant by an overriding public interest. I have tried to give a bricklayer’s common-sense view of what it might mean, but I have already made the point that I am not a lawyer. There may be lawyers and more learned individuals on the Government Benches. Indeed, some of my own colleagues may wish to give a legalese definition. But, as my hon. Friend points out, the hon. Member for Burton, who sought to embarrass me with his intervention, has already voted for those words.

Andrew Griffiths (Conservative, Burton)

I know what they mean, you don’t.

Chris Williamson (Labour, Derby North)

Fine. Then perhaps the hon. Gentleman can assist.

Edward Leigh (Conservative, Gainsborough)

Order. We do not need the sedentary remarks. The bricklayer can keep going.

Chris Williamson (Labour, Derby North)

I am very grateful, Sir Edward. I could not keep laying bricks because I have a poorly shoulder at the moment. Luckily, I am in the House of Commons seeking to stand up for the ordinary people who elected us to this place.

Paul Blomfield (Labour, Sheffield Central)

On the mischievous and unhelpful interventions from the Government Benches, I have just been googling “overriding public interest”. It is curious that a number of Government websites use the phrase “overriding public interest” in a number of different contexts. I assume therefore that Government Members do know what it means. Their interventions are unhelpful and we can move on to another point.

Chris Williamson (Labour, Derby North)

I am grateful to my hon. Friend for that intervention. That would be sensible, and when the Minister responds I am sure he will give the definition. If he does not, I will intervene to invite him to do so. As a humble bricklayer, I have clearly not been able to satisfy hon. Members, so I wait with bated breath to hear the Minister’s definition. He of all people must know because it is in the Bill and has already been voted on.

Following the mischievous interventions from coalition Members, some of the points that I was going to make have evaporated from my mind. I will sit down and if they come back to me when the Minister is responding I may have the opportunity to intervene to seek clarification.

Brandon Lewis (Conservative, Great Yarmouth)

This is one of the first times I have heard the hon. Member for Derby North referred to as “humble”, but I take that under advisement. I will return to the key issues of amendments 144 and 145, tempting as other parts of the discussion have been. I will outline what schedule 11 deals with because hon. Members have tempted us a little way from the path.

Schedule 11 deals with the information obtained by the auditors and other bodies listed in paragraph 1. It is not designed to cover disclosure of information obtained by individuals independently, such as whistleblowers. I have said that there is no need for the Bill to include provisions covering whistleblowing. We will amend the Public Interest Disclosure (Prescribed Persons) Order 1999 to list the Comptroller and Auditor General and local auditors as prescribed persons for whistleblowing purposes in the new audit framework. With regard to the important role of whistleblowing generally, we will debate that further when we come to new clause 3, which specifically covers that.

The amendment seeks to amend the provisions relating to disclosure of information obtained by local auditors undertaking functions under the Bill, inspectors undertaking inspections under part 1 of the Local Government Act 1999, or other specified organisations such as the recognised supervisory bodies. I have some sympathy with the intent behind the amendment, but it is unnecessary because the provisions already enable disclosure of information. Without detaining the Committee too long, I will go into that in a little more detail to try to satisfy Labour Members.

Schedule 11 enables the auditor and others to ask for information they need to undertake their functions effectively by protecting certain types of information and restricting its onward disclosure. Amendment 145 would add further organisations or persons to whom information may be disclosed. It would add the Comptroller and Auditor General for the functions under schedule 6, the Secretary of State for the purposes of accountability to Parliament, and the Care Quality Commission. I outlined part of my response to that a few moments ago. I can see why auditors might choose to share information with the National Audit Office to support the development of the code of audit practice or guidance, or with a Government Department to support the provision of assurance to the accounting officer that public money for which it is accountable has been used appropriately. We agree that auditors should be able to share information with, for example, the Care Quality Commission, but the amendment is not necessary to enable local auditors to share information with those parties.

Paragraph 3 of the schedule already enables local auditors to disclose information unless doing so would prejudice the operation of their function. There is no restriction on whom this information can be disclosed to.

Andy Sawford (Labour, Corby)

Characteristically, the Minister is giving a helpful response to enable us to understand better, and I am encouraged by how the scrutiny process can draw such things out. However, his points are not consistent. The Bill sets out a range of exemptions in the specific provisions, yet he says they are not needed because there is a catch-all. Which is it? I am reassured by the point about the catch-all, but am wondering why the Government feel the need to specify the exemptions.

Brandon Lewis (Conservative, Great Yarmouth)

I hope to be able to satisfy the hon. Gentleman. I am glad that my response was able to shed some light and help matters. If it helps, I will be quite happy to work things the other way around and give responses before the hon. Gentleman moves his amendments, but for now I will stick with the system used in Committee.

Specifically regarding the Care Quality Commission, we do recognise the importance of it having access to the information necessary to ensure that health service providers provide people with safe, effective, compassionate and high-quality care. The CQC already has the power, under the Health and Social Care Act 2008, to require registered providers to provide any documents that the CQC considers it necessary to have for the purposes of its regulatory functions. That includes a health service provider providing a copy of its audit report, should that be required by the CQC.

On amendment 144, paragraph 2 of the schedule sets out that information may not be disclosed and the exceptions to that. One is that the information may be disclosed “with the consent of the person or body to whom the information relates”.

The amendment would allow disclosure without the party’s consent if there is an overriding public interest in favour of disclosure. I argue that that is unnecessary.

Paragraph 2 of the schedule provides a number of reasons why anyone who holds information could disclose it, one of which is that the person or body has consented to that, but that is only one of the reasons that would make disclosure possible. If it is the auditor who holds the information, as I have said, paragraph 3 enables them to disclose that information to anyone, unless doing so undermines their undertaking the audit.

Chris Williamson (Labour, Derby North)

I just wonder whether the Minister could help us by defining what he means by an overriding public interest, to which he just referred.

Brandon Lewis (Conservative, Great Yarmouth)

I thank the hon. Gentleman for raising that again. When we look at what an auditor decides is in the overriding public interest, that is a matter for that auditor to take forward. It is also for someone else who holds the information and is seeking to disclose it. They can do so with the auditor’s consent under paragraph 4 of the schedule.

I think the hon. Gentleman missed the point of what we are looking at; it is about how the auditor can share information. The auditor must give consent unless the disclosure could prejudice their ability to undertake their functions effectively. That means that the schedule provides sufficient reasons for which local auditors and others can disclose information, which is its purpose. We will take another look at the schedule to ensure that that is the case, however, as I accept that it is extremely technical. With that assurance, I hope that the hon. Member for Corby will withdraw his amendment.

Andy Sawford (Labour, Corby)

Having pointed out the processes of this place, I did not expect such a fatuous and disappointing response from the Minister on the value of the scrutiny we bring to bear. He will recognise that the ad hoc Committee provided excellent pre-legislative scrutiny, as did the Communities and Local Government Committee, which commented on the issues of public audit. During the Bill’s passage through the Lords, it was substantially improved. We seek to continue to do that through the scrutiny we bring to bear. I was commenting on how, at times, the Minister has been helpful in that regard, so it was intended as a generous offer.

Brandon Lewis (Conservative, Great Yarmouth)

I was not trying to be fatuous; I was trying to make the very comment the hon. Gentleman made several times. I appreciate his comments and helpful remarks and I intend to continue to be as helpful as I can in recognising the issues raised.

Andy Sawford (Labour, Corby)

I thank the Minister for that welcome clarification, because I was slightly surprised and disappointed, but let us move forward and consider whether his reassurances are sufficient to allay the concerns raised by my hon. Friends. An unexpected concern arose during the debate, particularly in response to the contribution of my hon. Friend the Member for Derby North, who made it clear, as I hoped I had, that what we seek to do through our amendment that calls for a public interest test is to ensure that the Bill has no loopholes.

Government Members have challenged us on what we mean by public interest. That is difficult to define. For hon. Members who take a particular interest in this, the hon. Member for Burton considers that he has a definition. I suggest to him that he forwards that definition to the Public Administration Committee. It would have been a short cut for it in its incredibly extensive inquiry into how the public interest can be defined, which concluded:

“Defining the ‘public interest’ is anything but easy…no single factor can be said to constitute the ‘public interest’, nor can the outcome of conducting a public interest test be predicted in advance; a case-by-case approach will be necessary”.

The Committee went on to propose some rules of thumb.

As my hon. Friend the Member for Derby North pointed out, he is a humble builder; I started my working life in a warehouse. Perhaps as we do not have the legal qualifications that some Government Members boast about, we would benefit from their instructive comments on how to define some of these complicated legal terms. We did not raise this issue in relation to clause 8, in which the Government themselves used the exact same language that we sought to borrow in our amendment. We are satisfied that, although difficult to define, the public interest is a widely used concept in law. For example, legislation about the role of the Information Commissioner includes extensive provisions about the public interest, and there is extensive debate on the matter in Hansard.

Chris Williamson (Labour, Derby North)

Sir Edward, if you will forgive me for consulting my modest electronic device, in an attempt to increase my knowledge I have sought to use the internet to find a definition of an overriding public interest. I have found an interesting one that I think is relevant, and I would be interested in the views of my hon. Friend on it; indeed it would be helpful to know whether the Minister agrees with it. It defines actions in the overriding public interest as actions that are required by local or national Government that are

“necessary for the promotion of public safety, health or general welfare”.

Andy Sawford (Labour, Corby)

I thank my hon. Friend; that is indeed in line with what we envisaged the Government intended when they used the term themselves in the Bill. It is also in line with the interesting discourse on this matter by the Public Administration Committee. I would agree with that Committee—I suspect my hon. Friend would too—that it is difficult to predict exactly what will constitute the public interest, and that it needs to be judged on a case-by-case basis. If, however, Government Members feel the need to specify what is intended by a reference to the public interest, I suggest that they press the point with the Minister, who of course can include the definition in the relevant schedule to the Bill.

Government Members may take some comfort in that. We can accept that this is a broad concept that is difficult to define but is incredibly important, which is why we tabled the amendment. I am grateful to my hon. Friend for his extensive remarks on the amendment. As he said, those remarks were made at the expense of some additional remarks I know he intended to make about the onus in respect of whistleblowers.

The Minister’s response does not satisfy the points raised by the ad hoc Committee, the Audit Commission and others. In particular, I was hoping to get clarification about how the regulations on the role of the Comptroller and Auditor General will be amended to bring them into line with the Bill. I was also hoping for detail about some stronger relationship between the role of the local ombudsman and that of the Comptroller and Auditor General, or indeed the Cabinet Office on the data-matching initiative. I had hoped the Minister might consider some kind of trigger. He gave no indication of that in his remarks but I am ever hopeful.

The Government have made some significant concessions on other areas of the Bill, so I will withdraw the amendment in the hope that the Minister and his officials will go away and reflect on the points we have made. I also say to him that although he may not accept our point about the Comptroller and Auditor General, our point about social care seems to me entirely in line with what he himself has sought to do in the Bill.

Brandon Lewis (Conservative, Great Yarmouth)

I will simply restate my closing remarks, which may give some further comfort to the hon. Gentleman. I believe that the schedule provides sufficient reasons for which auditors can disclose information, but I accept that it is extremely technical, and so we will take another look at it to ensure that that is the case.

Andy Sawford (Labour, Corby)

I am grateful to the Minister for that. I hope that he will look at all our points on schedule 11 and, for example, that he will see that proposed sub-sub-paragraph (n) is not controversial and is consistent with the rest of the paragraph, so that he will at least accept that one. We would be particularly grateful, in terms of the emphasis of further consideration by the Minister, for inclusion of proposed sub-sub-paragraph (l), on the Comptroller and Auditor General. The other points that we were making are technical—we were being helpful to the Government—but that matter is more a matter of policy, on how to ensure that whistleblowing can be conducted effectively. I appreciate the Minister’s response, however, and I beg to ask leave to withdraw the amendment.

Clause 37 - Duty of smaller authorities to publish information

Andy Sawford (Labour, Corby)

Has there been consultation with the National Association of Local Councils and other bodies on the duty of smaller authorities to publish information? As ever in the course of the Bill—a point entirely understood by the Minister in debate on earlier clauses—we want to ensure that the measures in it are proportionate. I would therefore welcome a brief assurance from the Minister that the clause is proportionate and that there has been consultation with the sector.

Brandon Lewis (Conservative, Great Yarmouth)

Yes, we have been in discussion with the association and we continue to meet regularly. Also, the measure is proportionate, so I hope that the hon. Gentleman is content with that, although I am happy to let him have some further information if that is helpful.

Clause 38 - Code of practice on local authority publicity

Andy Sawford (Labour, Corby)

I beg to move amendment 146, in clause 38, page 24, line 4, leave out ‘one or more specified local authorities’ and insert ‘a local authority’.

Edward Leigh (Conservative, Gainsborough)

With this it will be convenient to discuss the following:

Amendment 147, in clause 38, page 24, line 15, leave out sub-paragraph (4) and insert—

‘(4) A direction can only be made by the Secretary of State if—

(a) evidence of a breach of a code has been published and sent by the Secretary of State to the local authority;

(b) a local authority, on receipt of a letter from the Secretary of State notifying them of evidence which purports to demonstrate a breach of the code has made a response to the Secretary of State within 28 days; and

(c) upon receiving any response the Secretary of State has published a report detailing his conclusions.’.

Amendment 148, in clause 38, page 24, leave out from line 37 to line 21 on page 25.

Andy Sawford (Labour, Corby)

We had hoped to have dealt with this clause this morning, in the interests of making progress on the Bill, but it will not surprise you, Sir Edward, or the Minister, that we intend to raise some very serious issues about it and to make it the subject of some debate. We have tabled three amendments. We hope that the Minister understands and supports the purpose behind them and that he sees that we are trying to be helpful, not only to the Government by ensuring that they do not make bad legislation, but to the public, who are not well served by the clause, and to local authorities around the country. I anticipate that there will not be a clause stand part debate, given the three amendments on different points, so I will speak broadly to the clause, as well as specifically to the amendments.

The clause is not only unnecessary, but more than that; it is undemocratic. We support the publicity code, which indeed was in place under a Labour Government. It is a helpful safeguard and a piece of guidance for the public on how local authorities communicate with the public. It put in place general principles for how such publicity should be in the interests of the public; for communicating information to the general public; and for the local authority to engage locally in a way that enhances democracy, ensures that local people are aware of the services provided by the council, and engages people in local public debate such as consultations and so on.

There is no evidence that the code is being widely breached. Indeed, Ministers have been pressed on that point. In the other place, Baroness Hanham said:

“I shall not say which local authorities we already know are breaching the code. I have them. I could do it, but I think it is probably not helpful. I hope noble Lords will accept my assurance that at least a dozen are breaching…at the moment.”—[Official Report, House of Lords, 15 July 2013; Vol. 747, c. 604.]

She goes on to say how she believes those local authorities are breaching the code.

It is extraordinary to have a significant piece of legislation that Members, including some from the governing parties, described on Second Reading in the Commons as a sledgehammer to crack a nut. It is extraordinary to have the Government proposing something as draconian, undemocratic and sweeping as clause 38 without feeling the need to provide any evidence of why it is necessary—indeed, they have denied us that evidence. The Government have said, “I have them. I could do it, but I think it is probably not helpful.” Not helpful to whom? Not helpful to the public in understanding the real purpose behind clause 38? Or, as I suspect, not helpful for the Government?

The truth is that there is not really any evidence. The Government have very little evidence of how the code is being substantially breached. There are one or two examples. We have accepted that there is a particular local authority publication that could reasonably be said, on first reading, to breach the code. We have sought to understand how the Government have taken action in relation to that breach of the code. I have tabled parliamentary questions, to which I have yet to receive a reply. I have asked the Secretary of State for Communities and Local Government what communication he has had with the London borough of Tower Hamlets about its observance of the local authority publicity code. I have asked the Secretary of State how many local authorities he and his Ministers have written to regarding their observance of the local authority publicity code. I asked those questions in October and have yet to receive a reply.

Perhaps the Government have the examples. Perhaps they could do it—that is, reply to me—but think it is probably not helpful, in the spirit of Baroness Hanham. I greatly regret that they have not provided them to me. I wonder whether the noble Baroness Hanham has a little list. I wonder whether the Minister has a little list somewhere and would care to share it with us so that we can get some insight into the basis on which the Government think it is appropriate to take this incredibly sweeping power.

Clause 38 was not included in the Bill when the draft Local Audit Bill Committee sat, thereby denying this part of the Bill the necessary scrutiny. Such matters are ultimately for the Public Bill Office to consider in consultation with the Government, but we would question why it is appropriate to introduce such a clause at a late stage to a Bill that is otherwise about local public audit. We suspect that it is because the Government have motives that are not wholesome and not democratic, and that in seeking to do this they are trying to push these powers through without proper scrutiny and without providing proper evidence.

Through the clause, the Secretary of State is granting himself editorial authority over council publications. There is an extraordinary line that just leapt off the page when I was reading the Bill. It says:

“The Secretary of State may give a direction to an authority whether or not the Secretary of State thinks that the authority is complying with the code to which it relates.”

Whether or not. That is a sweeping power to act as publicity chief for local councils around the country, editor in chief of their publications, and censor in chief of what our elected local councils can do and say by way of communicating with their local public.

Amendment 146 would change new subsection (1) so that the Secretary of State would be able to direct “a local authority”, rather than

“one or more specified local authorities”.

If the clause must remain part of the Bill—of course, we do not support it in total—and in order to make our amendments selectable by your good self, Sir Edward, we have sought to table amendments that begin to bring some proportion to the powers by limiting them to a local authority.

Amendment 148 would delete this astonishing new subsection, which allows the Secretary of State to take powers whether or not he thinks a council is complying with the code. The Secretary of State wants the power to give a direction to a council, even where he does not think it is not complying with the code. On what basis is that a reasonable power for the Secretary of State to take? Would that pass any sensible test of local public opinion? Do any Government Members, who will no doubt vote through the clause and the extraordinary subsection within it without giving it any scrutiny, really think that their local public would think it appropriate for the Secretary of State to say, even if he has no evidence that there is a breach of the code—in fact, even if he knows that the council is not breaching the code—that he can act as their editor and censor-in-chief? It is absolutely mystifying.

Under the Bill, the Secretary of State will not even have to answer to himself for his own thoughts or actions. That is extraordinary and is worrying in relation to all the other Henry VIII powers that the Secretary of State has taken in the Bill. That is why Opposition Members are so concerned. At times, Government Members have implored us to believe in the benign and good intentions of the Government in introducing these measures, which, they argue, are intended to be helpful, but this particular power for the Secretary of State is clearly not benign and is not based on good intentions.

Amendment 148 would delete all of new section 4B of the Local Government Act 1986, which allows for proactive meddling by the Secretary of State. The new section goes beyond action on an individual local authority, whether or not the Secretary of State thinks they have taken action; it gives him the power to just sit there at night, dreaming up ways to tell councils that they can or cannot communicate with the public, including the language that they might use and the issues on which they might comment. New section 4B is Putinesque in its effect. Given the debate on Second Reading and the comments of Baroness Hanham, it also seems to be Putinesque in its intention, which is the most worrying thing of all.

Either the Secretary of State wants everyone to stick to the code, in which case he could have chosen a different wording that required compliance with the code—the issue is that the code might not be challengeable by judicial review, given its wording, and therefore the Government want to bring force to it—or he wants to be selective. We want to know what purpose new section 4B serves.

A consultation called “Protecting the independent press from unfair competition” was published in April 2013. We understand that some of the motivation behind the clause is about local authority newspapers competing unfairly with local papers. We all value our local papers, where we have them. That is a crucial point for my area, because the Corby Telegraph is an absolutely brilliant local paper, which does not see any threat from the local authority publication—I have spoken to it about that—and serves a vital local purpose in communicating with the public, but my public in the other four towns I represent are not served at all by a local paper, so hugely value their local authority publication. I look forward to acquainting the Minister a little with the role that the Nene Valley News plays in our local life. There is no strong evidence that local authority papers are competing with local newspapers.

As my hon. Friend the Member for Sheffield Central said earlier, the Secretary of State made this ruling two days after the close of the Government’s consultation. I have taken the precaution of looking at that consultation and it is in no way definitive. I cannot see how the Secretary of State concluded within two days that it was. In fact, there is a complex relationship between local independent newspapers and local authority publications. In some areas, the local newspapers are complemented by the local authority publications. Clearly, local authorities are well supported by statutory notices, which is a separate issue that I will turn to later.

Following the Government’s response to the consultation, Sir Merrick Cockell said

“This announcement confirms what councils feared all along: the consultation on whether the Publicity Code should be made law was flawed both in its central premise and how it was carried out.”

I hope that Government Members want to listen to Sir Merrick. He is a Conservative member of the LGA, but he is also its chair and therefore widely respected and speaks for the whole of local government. He continued:

“Councils have very strong views on these issues which could have a profound impact on how they communicate with and represent their residents, yet they weren’t given the opportunity to fully consider the proposals and have their say.”

He is absolutely right. The consultation was rushed through, which is consistent with the extraordinary remarks of Baroness Hanham and with the clause being introduced after pre-legislative scrutiny. The clause’s effect is wholly undemocratic, as is the basis on which the Government argue that they have for bringing the clause forward.

The Local Government Association estimates that 79% of council publications reach 90% or more of their local population, whereas just 1% of local newspapers reach 90% or more of a council’s residents. It would be interesting to know which local newspapers make up that 1% and have such widespread coverage, but local newspapers are struggling in my area. I regret that and try my best to support them, but the readership of local newspapers is declining rapidly all around the country, not least because of competition from online media and the other ways that people choose to access information nowadays. Many sources of local news are now available, in particular through the internet, and many people get their local news through Facebook or Twitter. Local newspapers have tried to embrace that and to share their content through those mediums, but they face new and incredibly powerful competitors for what are called “eyeballs”. Those who look at local newspapers are, or so I am told, called eyeballs in the trade. Those eyeballs are sadly increasingly moving away from our much-valued local papers to other sources of news. That is, however, nothing to do with local council publications.

I am aware of one example only of a council publication containing substantial advertising and substantial editorial content that we might otherwise expect to see in a local paper. Where local council publications are competing unfairly, I would have expected to see the Government take some action. It is a failure by the Government, given how important they tell us the matter is, not to act on the one case where there is an issue and to investigate it. The Labour members of that local authority, which was Tower Hamlets, are certainly concerned, because they raised it with my right hon. Friend the Member for Leeds Central (Hilary Benn).

Organisations such as the National Union of Journalists have raised serious concerns about the Bill and I want to turn to outside interests, but I first wonder whether the Minister might be more thoughtful in response to his noble Friends. Lord Tope said:

“All we have had from the Government is rather silly and misleading statements from the Secretary of State about ‘town hall Pravdas’.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 898.]

Baroness Eaton, who is a former leader of Bradford city council and with whom I have had the pleasure of working in a previous life, is a much-respected figure in local government. She is also a member of the Conservative party and is not afraid to speak truth to power and said:

“It is therefore regrettable that many of the proposed measures in the Bill centralise powers to the Secretary of State and allow central government to interfere with matters that should rightly be decided at a local level.”

She went on to say:

“This clause is unnecessary as there is no evidence that council publications are competing unfairly with local newspapers and, by the Government’s own admission, very few councils are breaking the existing recommendations.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, cs. 902 and 903.]

It was in response to that that we heard about Baroness Hanham’s little list. Lord Palmer of Childs Hill, a Liberal Democrat Member who sits on the Government Benches, said:

“Putting it on a statutory basis, as framed, is unnecessary and heavy-handed.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 908.]

Lord Palmer was quoted by the hon. Member for Mid Dorset and North Poole (Annette Brooke) on Second Reading when she described the proposal as an extraordinary overreach by the Government and unnecessary.

Three years ago the Audit Commission conducted an investigation, and produced a report on local authority publications. That made it clear that local authority publications do not represent unfair competition. It found that the money spent by councils was not unreasonable, and that few council publications were published sufficiently frequently to be viable media for most local advertising.

That is an important point about the character of those local publications. Obviously, we would all want action in cases where there is evidence of a breach of the code under the Local Government Act 1986. What action is taken in such cases?

I hope that the Minister knows that the LGA has published a briefing. It is a very unusual step for that cross-party association to go as far as supporting an Opposition amendment, as it would normally fight shy of engaging in a way that might be perceived as political.

It is a measure of the importance accorded to the matter by the Conservative-led LGA, which has a majority drawn from the Minister’s party, that it has said that should the Government be unwilling to remove the clause it would support the amendments that I and my hon. Friend the Member for City of Durham have tabled—amendments 146, 147 and 148. It has said:

“The clause gives the Secretary of State the power to direct a local authority regardless of whether that authority is complying with the code to which these powers relate. The powers are too wide ranging and do not allow councils any local discretion about how to engage with their residents.”

It also comments:

“This is unnecessary and could allow a Secretary of State to interfere with the work of an elected council”.

I hope that the Minister has had the opportunity to look at the briefing, which adds:

“Amendments 146, 147 and 148 more closely define these powers.”

I know from my conversations with LGA representatives that it will particularly welcome our emphasis on a process that would ensure that evidence would be considered. We wanted a requirement—a simple test—so that whenever there is evidence it is investigated and the local authority has the opportunity to respond.

Given the degree of subjectivity in the way the Secretary of State can apply the provision, there should be evidence that before making any determination he has asked the local authority to clarify why it conducts its publicity work as it does. That would give a measure of reassurance and would make the clause, if the Government want to press it, more democratic.

The National Association of Local Councils also has a Conservative majority, although it rarely acts in a political way as a body. It is a consensual cross-party organisation, but I gently remind the Minister that while my friends are involved in it, so are his. The association states:

“We do not support measures in Clause 38 to enshrine the publicity code in law”.

It is concerned that

“there is no evidence parish and town council publications are competing unfairly with local newspapers…the existing code provides for action to be taken against a parish or town council if there is evidence they have breached the code and to our knowledge there have been no breaches or any action taken”—

which is consistent with our understanding of the Government’s track record to date, and their failure to answer my parliamentary questions, which were tabled in October.

The association says—and its language is quite surprising—that

“giving more powers to the Secretary of State is anti-localist, flies in the face of localism and is a threat to local democratic accountability”.

I cannot remember a time when I have heard the good folk at NALC expressing themselves in a way that shows they feel so strongly.

NALC also says:

“we do not support the Secretary of State having further powers to determine the frequency or require compliance”.

It adds—I am sorry but I cannot oblige the association on this point:

“we do not support Parliamentary time being taken up putting the existing code into legislation”.

We intend to use some parliamentary time today, but hope that NALC will support our purpose in doing so. It argues that there are many other ways in which the Government could support the work of local councils, rather than undermining it, as the clause does.

I hope that the Committee will forgive me for being parochial, but I have a particular local interest in the effect of the Bill. The Nene Valley News—I know the Minister will be disappointed, but I cannot lay my hands on the copy I brought for him—is an important publication in my area. It is delivered fortnightly to more than 37,000 homes and businesses. Sir Edward, I have a copy if you are interested in reading of local matters in east Northamptonshire.

Edward Leigh (Conservative, Gainsborough)

It will become my bedtime reading.

Andy Sawford (Labour, Corby)

It says,

“We produce Nene Valley News as a public service to local residents. Our reporting aims to be fair and accurate, and we welcome articles from residents about community activities taking place around the district.”

I have received many representations from residents in the smaller towns and villages across east Northamptonshire for whom Nene Valley Newsis a communications lifeline. Some residents of those villages feel so strongly about this matter, it could be a defining issue at the next election. My Conservative opponent at that election will be looking for support in some of those beautiful, affluent villages and may find the door closing on him, due to disgust at the Government’s decision to remove this vital local communications tool. We should not underestimate how strongly people feel.

The leader of East Northamptonshire district council, with whom I have spoken about this matter, is deeply concerned and opposed to the Government. If the Minister is unsure of the political balance or concerned that the council’s view may be influenced by members of my party, he should know that there are sadly only two Labour councillors on the whole of East Northamptonshire district council. It is bastion of shire Conservatism. The council’s policy and resources committee said,

“The Committee notes the implications and expresses regret that it will be necessary to stop production of Nene Valley News, which was regarded as an effective way of engaging with the community.”

That was a gentle way to minute a lively discussion. I have spoken to many councillors about that.

I have also brought other publications, in case hon. Members are interested in knowing how these local publications appear around the country. They may be familiar with their own, but they can look at the samples I have here. They contain information on local facilities. They promote local voluntary and charitable organisations and their activities in a helpful way. They provide information on local planning issues, matters where the public are rightly interested in the work of the local authority. Of course, it is right that we should try to make the public as aware as possible.

There is no overlap between these publications and the local newspapers because they simply do not cover the same area. The concern of local residents is that no other publications will look to cover the same areas, because it will not be viable for them to produce the content that would be sufficiently local and relevant to more dispersed smaller towns and villages, to employ reporters to gather the news, or sell and distribute any new local paper in the area. They are left with nothing.

Local resident Michael Leeding said that Nene Valley News is an excellent way for the council to communicate with the community and that tradesmen in the area would suffer from its closure. He believed other forms of publishing the news would not hit such a wide audience. He said,

“I believe there is no element of competition between the local press and the Nene Valley News. They are complementary to each other, not competitive. It informs us about what is going on in the area, the availability of local facilities, local planning details, local tradesmen, plus much, much more. I believe that as well as being a great source of information it must help local organisations and tradesmen develop.”

Jacky Bright has recently moved back to the area and has found that Nene Valley News helped her to keep up with what is going on in the local area. She also sometimes takes The Northamptonshire Telegraph but finds very little overlap between the publications. She said,

“Stopping Nene Valley News will leave our area the poorer. I am astonished that a Government that seems to want to have so many decisions made at local level—often when it is inappropriate”.

I do not know what she means by that and I may not agree with her on the point. However, she continued,

“should be passing legislation at a national level to deal with such a local issue.”

That is the point. The public do not understand it. They have heard what we believe is the Government’s empty rhetoric about localism and see this as entirely inconsistent with it.

Derrick Sims, whom I believe is a Conservative member of the authority, but I will double-check, said,

“It does seem strange that a Government that espouses the merits of local government should remove its main means of communication with its people. I have used Nene Valley News to advertise support sessions at the local library as well as church fundraising activities. There is no other publication in the area that can replace Nene Valley News. I implore you to reconsider this decision as it will certainly have a negative effect on local communities.”

Edward Leigh (Conservative, Gainsborough)

Order. I am afraid I must bring the rhetoric to a temporary close. I apologise.

Michael Weir (Scottish National Party, Angus)

I remind the Committee that with this we are discussing the following:

Amendment 147, in clause 38, page 24, line 15, leave out sub-paragraph (4) and insert—

‘(4) A direction can only be made by the Secretary of State if—

(a) evidence of a breach of a code has been published and sent by the Secretary of State to the local authority;

(b) a local authority, on receipt of a letter from the Secretary of State notifying them of evidence which purports to demonstrate a breach of the code has made a response to the Secretary of State within 28 days; and

(c) upon receiving any response the Secretary of State has published a report detailing his conclusions.’.

Amendment 148, in clause 38, page 24, leave out from line 37 to line 21 on page 25.

Andy Sawford (Labour, Corby)

It is a pleasure to see you back in the Chair, Mr Weir. I am sorry you were not able to hear about my local authority’s excellent publication, the Nene Valley News. I spoke about the value that local people place on it. They consider it to be

“invaluable to East Northants villages”,

according to a Conservative councillor on East Northants district council. I am always keen to represent all areas of my constituency and all shades of opinion. I do so today because there is a cross-party consensus in my constituency that local newspapers play a vital role.

Before we adjourned, I quoted Mr Derrick Sims, who talked about the value of Nene Valley News to charities in the area. He said:

“It does seem strange that a government that espouses the merits of local government should remove its main means of communication with its people.”

Mr Jonathan Spencer has told me that he advertises his business in the Nene Valley News, which provides him with a range of customers. He said:

“This is an essential piece of information...the like of which cannot be matched by any alternative method I have seen so far...The sellable news in East Northants is entirely different to that in the imaginary world Pickles inhabits.”

That is my constituent’s language—he is, of course, referring to the Secretary of State. Mr Spencer says:

“They function, where they exist, hand in hand.”

By that, he means sellable news, in his language, and publications such as the Nene Valley News that he is familiar with and advertises in. He goes on:

“The publicised argument from Pickles reads well for his audience of newspaper publishers but doesn’t sit well in reality...The Nene Valley News is an innocent publication full of local information and advice...On my commercial level, I advertise in the publication and it generates the majority of my business. I understand that many of the advertisers have the same response. There is no other outlet that offers the same coverage of customers. So much for Tory support of small business.”

I have said to the Minister—I hope he takes the point—that many of the people who feel so concerned about this are naturally inclined to support him and the Conservative party. I am sure that that picture is mirrored all around the country, particularly in rural areas and the more sparsely populated areas, where such publications are the only source of news.

I have also highlighted evidence from organisations such as the National Union of Journalists and the Local Government Association, which claims that, far from threatening local newspapers, local government actually supports local newspapers in many areas of the country. It does so not only through partnership working, but by jointly promoting features through local papers around town centres, and encouraging local competitions such as local awards and so on in which local newspapers participate—they often sell advertising space in connection with them.

For example, in my area, we have the Spirit of Corby, but there are awards all across Northamptonshire. I am sure they take place all around the country. There are business awards among the business community. A local authority might work with the local chamber of commerce or other local business partnerships. Local authorities work with the local paper to promote good practices and to sell advertising space. Local authorities frequently work with the local newspaper to encourage participation in, and attendance at, community events such as carnivals, and to enable the local paper to sell advertising space.

The planning authority frequently brings forward developments, certainly in an area such as mine that is very open to having new housing in the area, and often works in partnership with the local authority. We had the controversial “North Londonshire” campaign. Opinions vary, but that was a local authority and local media partnership from which the local paper benefited significantly.

There are particular examples, such as eastendlife, of which the Minister will no doubt remind us.

Mark Pawsey (Conservative, Rugby)

The hon. Gentleman referred to eastend life. He will be aware that the Select Committee on Communities and Local Government reported a couple of years ago on the code of practice on local authority publicity. It referred to the excesses of certain council papers and specifically to that publication. How would he deal with the excesses of certain local council papers?

Andy Sawford (Labour, Corby)

I thank the hon. Gentleman for his remarks. I served with him on that Committee. He always approaches such matters thoughtfully and constructively, as on this occasion—he is inviting me to comment on a significant failing on the part of Government. It may be that the same charge can be levelled at previous Governments, but I am not aware of the previous Government having concerns on which they did not act. What we have here is that after three years in power, the current Government say that they have such significant concerns that they will legislate, and yet there is no evidence that they sought to take action. That is the substance of the parliamentary questions I tabled in October, to which I have referred.

The hon. Gentleman invites me to say what action I would take. Were I in the Minister’s chair in the Department for Communities and Local Government, and had those concerns been brought to my attention, I would have investigated them and followed the evidence. I would invite the council to respond to me on those concerns and I would enforce the publicity code. The failure of the Government to enforce the publicity code when there has been an evident breach is regrettable. More concerning is their failure even to begin a course of communication with the local authority when they identified a breach—that is incredibly disappointing.

The hon. Gentleman is right to say that the Communities and Local Government Committee looked at the issue and recommended action, but it did not support, and would not now support, the draconian measures in the Bill, because they go too far. What is not in dispute between Opposition Members and the Government and the hon. Gentleman is the fact that there is a publicity code. It was signed up to by all parties. It was developed in this place after considerable thought and consultation. We support the publicity code. Our argument is that when there is a breach of the code, a different course of action would be more appropriate than the draconian and undemocratic legislation the Government have introduced.

Before the hon. Gentleman’s intervention, I was speaking about the Nene Valley News. I want to share some of its key content and ask the Minister or other hon. Members to tell me what they find offensive. It promotes the way the Rockingham Forest Trust, which manages Stanwick lakes—one of my and my family’s favourite places to spend time at the weekends—has won heritage funding. Of course, that is part of promoting an important local facility. All such facilities are viable only if they are well used, so, given that there is no other local newspaper, promoting the lakes through the Nene Valley News is important.

The Nene Valley News mentions how the authorities are clamping down on illegal scrap metal dealers. It promotes the activities of the council in clamping down and quotes the Conservative chair of the licensing committee. I am sure the Minister will want to support the action of Councillor Glenn Harwood MBE. Such work is particularly important in our rural communities and small towns, where metal theft is a huge issue. Local people want to know what action they can take and how they can report things to the licensing committee.

Neil Carmichael (Conservative, Stroud)

I am wondering why I am not going to some of those events. The problem is not that kind of information in that kind of newspaper, but when Lambeth council, for example, uses public funds to castigate the Government and pass the buck on cuts to services in Lambeth. That was clearly a misuse of public funds. Does the shadow Minister agree? Does he therefore accept that the Government are carrying out a pledge to prevent such misuse in the future?

Andy Sawford (Labour, Corby)

Regretfully, the hon. Gentleman only points out the motivation behind the clause, which is entirely political and entirely subjective about a local authority’s ability to campaign. I will turn to that in a moment, and I am keen to share with the Committee the legal advice that the LGA received, which it has shared with me.

The hon. Gentleman says that he welcomes publications such as the Nene Valley News, or bits of it. I am sure he would welcome all of it. I am happy to tell him what else is in it—I am sure he is waiting with bated breath. However, the fact is that that publication will cease to exist. That is the whole point. He is right to welcome the paper. The Conservative councillors on East Northamptonshire council and local voters know that the paper is a lifeline, and I know that without it there will be huge local consequences. The measure is the very opposite of the big society, and indeed of the localism the Government have talked about. It is an incredibly damaging measure. It has petty political purposes, but will have a damaging effect on our communities and on real people’s lives around this country.

Brandon Lewis (Conservative, Great Yarmouth)

Bearing in mind the hon. Gentleman’s comment earlier that there is cross-party support for the code, which was brought in some years ago and is not changing, could he point out what in the code stops a publication in a way that he is not happy with? He has just said that he is happy with the very code we are discussing.

Andy Sawford (Labour, Corby)

Clearly, the point is that the code is advisory. The previous Government did not take action in relation to the code because they considered that, in so far as local authorities were asked to have regard to the code, they did so. Local authorities also made judgments about what was appropriate to local circumstances and the local area. Councils up and down the country produced different types of publications with different frequency.

In discussion with the Minister and his officials prior to the commencement of the sitting, I said that, if the measure was about enforcing compliance with the code, why not simply say in the provisions that local authorities must comply with the code of publicity? I would not have supported that, because I do not think it necessary, but that would have turned the code from something to which local authorities must have regard to something with which they must comply, with all the legal force behind it. The answer was that local authorities might have a good reason for doing what they do. Is that not precisely the point?

Any sensible Minister, when confronted with the Nene Valley News and told why it is appropriate to the local area, would support the local authority to continue publishing it, yet, because of the how the Government intend to interpret and enforce the code, the authority will have to cease publication. The paper encourages people to ask their councillor or MP if they advertise local surgeries, including my own local surgery. As Members of Parliament, we all know how important those surgeries are. I am concerned that people will not know about my surgeries at Irthlingborough children’s centre, at Raunds library, at Thrapston library and at the courthouse in Oundle, which I hold regularly so as to meet the needs of the same communities served by the Nene Valley News, because that publication will no longer be available to local people.

The paper talks about the changes to the local council tax support scheme, which we know are a real problem for many people because of the way in which the council tax benefit cut has been passed down to local authorities, particularly impacting on the poorest people in our communities. It advises people on how to stay safe on bonfire night—as a pet owner, I welcome the advice on how to keep my pets safe. The paper talks about the council committee meetings. It advertised the Nene Valley scouts 46th annual firework display. I very much hope that many people went along to support that in response to the advert in the Nene Valley News.

The paper does something that I am sure is as dear to the Minister’s heart as it is to my own. The Government tend grossly to exaggerate benefit fraud in this country, but we all know that a tiny minority of people commit that fraud. Is it not welcome that the Nene Valley News wants to stamp out benefit fraud? This morning, I heard the Secretary of State for Environment, Food and Rural Affairs again recommit himself to the now incredible idea that the Government will be the greenest ever, but the Nene Valley News might have helped them by encouraging people to go green this Halloween, which I think was a very good idea.

The matter will be dear to the heart of my hon. Friend the Member for City of Durham, because she is very keen to work with local authorities around the country, and especially the Labour councils that are leading good practice to promote neighbourhood planning. She will be pleased to see that neighbourhood planning is in full swing in our area, and that people are encouraged to participate. There is other information in Nene Valley News, for example on how you can secure your home. There are adverts promoting local businesses, such as through the service directory. Those very small businesses are provided with very affordable advertising when there is no other local newspaper, and those business people are very worried. Denford Construction, Marigolds Clean ‘n’ Mow, Hunt plumbing and heating—I gave the Minister a quote a moment ago that I hope he took seriously—highlight the Government’s inconsistency. Their stated commitment is to support small businesses, but they are taking away their principal means of advertising for local custom.

I am sure that you, Mr Weir, have heard enough about the Nene Valley News, but I end with this section, headed “Life after Nene Valley News”. They are running a local consultation about what will happen next. The article states:

“Legislation is being introduced which prevents East Northamptonshire Council from publishing a newspaper on a fortnightly basis because it is deemed to be unfair competition for the local press”.

We have noted that there is no local paper in this area and that the measure is clearly absurd, but the local electorate must be told.

“We expect the legislation to become effective from 31 March 2014”.

The Opposition are doing our best to prevent that, but the legislation may well be effective from that date if the Government do not listen to sense today. The article states:

“We’re aware that Nene Valley News has a wide readership and is valued by local residents and businesses so we will be developing a new Communications Strategy which will focus on”

the communication gaps in the area as much as possible.

We all know that whatever happens in future will not replace the Nene Valley News. It asks people to complete a local survey on how the council can best communicate. For example, it wants to know whether people read the Northamptonshire Telegraph, although readership is very low in that area. It wants to know what radio stations or other sources of news people might follow, or whether people would get information from the council website. I commend them. I try to work constructively with East Northamptonshire district council, including its Conservative leader Steve North. We work closely together on important initiatives such as Rushden Lakes to regenerate our area. I share the council’s regret at the demise of Nene Valley News and commend it on taking steps to keep its local public informed, but we all know that there is going to be a huge gap and we greatly regret it.

The hon. Member for Stroud mentioned past allegations of breaches of the code on council campaigning. They are serious and worrying, but his point relates to our concern that this is an undemocratic measure by the Secretary of State. The legal advice that the Local Government Association has received and passed to me includes the view that the measure could be a limitation on local campaigning.

I shall say a little about that and share the legal advice. The draconian powers that the Bill will give the Secretary of State are contrary to the principles of subsidiarity in this country, which we are signed up to as a signatory to the European charter on local self-government. An important principle of subsidiarity is that government should take place at the lowest possible level: that is, closest to the community.

More than that, we hope the Government will recognise that the measure is contrary to the spirit of localism—I certainly subscribe to that, and I know the Minister would like to see himself as a localist. Communication is at the centre of a vibrant local democracy, and going too far in regulating it would threaten democracy in this country. It is already undermined by the excessive centralisation that has built up over many decades and that the Government have said they wish to reverse.

Paragraph 15 of the code arguably already places stringent restrictions on local authorities from voicing opinions on matters of substance and importance to the local electorate. There are legal restrictions on local authorities from campaigning, but we do not challenge them in the context of the Bill and hope they are proportionate. However, the measure goes too far in saying that local authorities cannot campaign on behalf of their local communities and cannot communicate locally with the public about vital policy issues that might have an impact on people in the area.

Paragraph 15 of the code states:

“Local authorities should ensure that publicity relating to policies and proposals from central government is balanced and factually accurate. Such publicity may set out the local authority’s views and reasons for holding those views, but should avoid anything likely to be perceived by readers as constituting a political statement, or being a commentary on contentious areas of public policy” .

To decide the limits on the kind of commentary that a local authority might engage in is always going to be a subjective matter of interpretation. For example, could the consultation in the Nene Valley News on the implication of the Government’s legislation be seen in some way to be provocative or political, in that it highlights the detrimental impact of the Government’s legislation? I would argue that that consultation is intended to be helpful to the local community.

Roberta Blackman-Woods (Labour, City of Durham)

My hon. Friend is making such a powerful case that it will be interesting to see how the Minister deals with some of the issues he has raised.

Does my hon. Friend agree that it would be profoundly anti-localist not to allow local people, through a publication such as Nene Valley News, to make their opinions known not only about the value of the newspaper, but about what they get out of the current legislation and how they think they will be negatively affected by the proposed change? It seems extraordinary that the Government would wish to do that.

Andy Sawford (Labour, Corby)

Regretfully, I agree with my hon. Friend. It is extraordinary, and it is damaging our community. I wonder whether, in turn, my hon. Friend agrees with me about an article in Around Ealing. It asks:

“Are you prepared? Did you know the Government is changing the amount of benefit some people can claim? These wide-ranging alterations will affect people in work, as well those who are not.”

The article sets out, for example, the implications of the bedroom tax, which will have a significant impact on many local residents, and advises people what telephone number they may use to seek help or advice about those implications. It advises that it may be possible to downsize to a property with a more appropriate number of bedrooms, but of course the point is that there are few such properties available.

In providing what I think is a helpful commentary to local people about the impact of Government legislation, the council could be said by the Secretary of State to be overstepping the mark and saying something political. However, in my view, that is a matter for local judgment, rather than for an overbearing Secretary of State who does not like a local authority publicising the detrimental impact of his policies on local residents. That seems to be what the proposal is all about; it is all about preventing the public from getting a full grasp of some of the consequences of this Government’s often damaging policies on people in our local communities.

The publication, though, might find favour with the Secretary of State, because he would love to see a small child carrying a bin as part of the local “recycling first” policy; we know that the right hon. Gentleman likes nothing more than bins. The publication may therefore avoid his red pen when he starts to censor our local council publications around the country.

The legal advice to the Local Government Association states:

“If we take the example of HS2, a central Government project of immense significance to the authorities affected by it (some who are strongly in favour and some who are strongly against), it is conceivable that the Secretary of State could use his direction-making powers to require specifically named councils who oppose the scheme in principle to refrain from making any adverse comment about the scheme in their publicity, on the basis that it is”—

quoting from paragraph 15 of the code—

“‘likely to be perceived by readers as…being a commentary on contentious areas of public policy’.”

The advice continues:

“How can that possibly sit with the fact that as a matter of principle those same authorities can challenge the process behind HS2 in the courts—as they have done—and petition Parliament against the hybrid bill for HS2—which they surely will do? Why should the authorities concerned not be able to make their opposition known or provide a commentary on the scheme by means of publicity, and provide information to their local residents about why the authorities are opposed to it, and explaining to their local residents how they can oppose it too? Even though primary legislation specifically provides that a council can petition against the HS2 Bill (see…the Local Government Act 1972), there is a real possibility that using the direction-making powers in particular, the Government could seek to prevent the authority from communicating its views to its own residents.

The step change from merely ‘having regard’ to the policy to being required to comply with it does not sit well in an example like this. If a local authority is so directly affected by a controversial central Government proposal like this, then it should have the discretion that it has with the ‘have regard’ provision to enable it to consider the code, and”—

this is the critical point—

“take a view as to whether the matter is of such importance to its residents that the code should not be complied with to the letter.”

We come to a point of interpretation. I, as a localist and a democrat, would rather see the balance of interpretation being with local authorities in the first instance. They should decide whether a commentary is in the interest of their communities. If the Secretary of State has a concern, based on an evidential process and a proportionate response, he should raise it with the local authority. He should not seek these powers, which would give all the authority to interpret the code to him and none to local authorities.

It is not unknown for central Government to request or require local authorities to publicise central Government policy. If an authority is asked to do so on a contentious area of public policy, it may have to refuse for fear of breaching paragraph 15 of the code. Examples may include the implementation of universal credit, or changes arising from NHS reform. In the Ealing publication, for example, there is an article about local plans for the reconfiguration of hospital services in north London. It would clearly have to take a view about that, because it could be subject to a challenge from the Secretary of State.

We come to a problem about local government finances. Local authorities may have to interpret the law prudently, as unfortunately they sometimes do with planning. Local authorities sometimes take the precautionary view that they will not oppose a planning application because the costs of legal action and appeal are so high, even if the majority of local residents have good reasons to oppose it. There will be a significant legal burden on local authorities if legal action is taken against them for their interpretation of their ability to comment on or to publicise news and information that emanates from central Government, yet the central Government may require them to publicise policies and their impact on local communities.

I want to highlight a further consequence of the lack of clarity. The loose way in which the current code is drafted sits easily with the duty to have regard to it. For example, paragraph 28 of the code states:

“Local authorities should not publish or incur expenditure in commissioning in hard copy or on any website, newsletters, newssheets or similar communications which seek to emulate commercial newspapers in style or content.”

Again, it is a matter of interpretation. When is something like a local newspaper, and when is it not? For example, is the publication of the chairman of the Conservative party in Welwyn Hatfield, Your Council Your Borough, which profiles the annual sports awards, like a local newspaper? As I have highlighted, often there is a complementary relationship between local publications and local authorities. However, that publication could be seen to be political because it promotes the activities of the council leadership. “What a year!” it says, with pictures of prominent local councillors. It contains a piece from the leader, which talks about decisions the local authority has made. Those policy decisions are, of course, political.

Often, the decisions that the leadership of a local authority make, especially at a time when it has diminishing resources, are controversial. They may be politically contentious in the council chamber. Yet is it not right that they can communicate with local people about the impact of those decisions? So is Your Council Your Boroughsomething that competes with a local newspaper, or is it something entirely different in quality? Is it not typical of the kind of local publications that will be negatively impacted by the Bill? I ask the Minister that question quite seriously. I am sure that he has looked at these publications; I have looked at a wide range of them, such as East Hampshire’s publication, Partners, andeastend lifeis different. Had I been the Minister for Local Government, I would have been in touch with it to say that it is inappropriate and contrary to the code, and asked it to change course. If necessary, I would have followed that with legal action.

Of course, a local authority should have regard to the legal force of a code, but the long-held principle in this country is that courts of law should make judgments based on reasonableness. Could eastend life be said to have been reasonably produced based on a proper consideration of the requirements of paragraph 28 of the code not to compete with commercial publications? I think that any reasonable court of law would judge that it walks like a local newspaper, it talks like a local newspaper and it quacks like a local newspaper, so action should have been taken, and it is the Government’s failure not to have done so.

There is no definition in the code of newsletter or news sheet, so it would be entirely for the Secretary of State to decide whether a publication contravened paragraph 28. We do not know whether the Secretary of State intends to set out any further clarification of the code, but we know that the Bill will allow him to introduce new codes, which could be pushed through using the Government’s parliamentary majority. They would be unlike the previous code, which was based on a consensual approach in the House, bearing in mind the balance in our democracy between Government’s power to have a say about prudent use of local resources and the right of local democratically elected people to make those judgments in their own area.

The legal evidence from the Local Government Association raises a set of issues, which I hope that the Minister has had an opportunity to consider. It looks, for example, at the implications of the Secretary of State’s power to make orders as he sees fit. We are deeply concerned about the nature of the legislation, and we will oppose it. We oppose the entire clause, but we have also tabled some brief amendments. I remind the Committee that the amendments are designed to remove the exceptional provision that the Secretary of State can take action whether or not he thinks the code has been complied with, because that is clearly not appropriate. Surely, Government Members can use their good sense on this occasion. They may want to keep in the Whip’s good books, and some will not want to compromise future careers or preferment by staging a rebellion today, but they must recognise that the provision is completely inappropriate and wrong, and they will have to account for it to their own local authorities. Perhaps the nature of some authorities means that they have never published anything significant that would be impacted by the legislation, but I am sure that there will be Government Members who will greatly regret, as I will, the demise of publications such as Partners, Welwyn Hatfield Life and Nene Valley News, most of which will not survive the Government’s changes.

Our other amendments are designed to create a sense of proportion. Amendment 147 would specify that the Secretary of State should be in receipt of evidence of a breach before he takes action, rather than speculatively taking action because he spotted something that he found offensive while he was on the bus coming across Lambeth bridge. I am sure that members of Lambeth council will find it difficult to stomach when they see the Secretary of State using the Government’s huge communications budget to promote the Government’s rationale for the swingeing cuts that the council faces. In the same way, I am sure that the Secretary of State finds the council’s pointing up the consequences of his policies difficult to bear, but that is a democracy, and I want to live in that kind of country, not in a Putinesque regime in which the Secretary of State can ban something just because he does not like it.

We are proposing a basic test of evidence and a right for local councils to respond to the evidence and set out their reasons, so that the Secretary of State, in exercising such a highly subjective power, will at least be required to consider why a local authority has published an extra copy of its newspaper. When I discussed the matter with the Minister’s officials, I was told that if a town or city were hosting the Tour de France, for example, it might want to publish an additional copy of its newspaper to promote the event. In my area, the equivalent of Tour de France in Durham, Sheffield or the Minister’s part of the world might be the local conker festival. It is all about what is important in a particular area or community: what has economic value; what has value in terms of local democracy; and the vibrancy of a local community. Those are not matters for the Secretary of State to determine, but for local authorities to determine. That is why a simple test of evidence is the right way forward, if indeed we have to bear the clause at all.

I hope that members of the Committee have thought about the implications for our democracy. A very important principle is at stake. I hope that the Minister will commit to take this away and review the clause, with a view to bringing forward more proportionate, sensible proposals on Report. I hope he is finally listening to the wealth of evidence that he has had, including the commentary from his noble Friends in the other place and, indeed, on Second Reading in the Commons, which shows that the measure is considered to be a sledgehammer to crack a nut.

Andrew Griffiths (Conservative, Burton)

I do not intend to delay the Committee for long on clause 38. It is an important clause and we need to consider how it will operate in practice and its implications. We need to do the right thing for our residents, council tax payers and local authorities across the country.

The hon. Member for Corby began his speech this morning by referring to a little list. I think it was a reference to the famous conference speech from my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley). I too have a little list that was e-mailed to me from one of my constituents who lives in Staffordshire, but pays business rates in Derbyshire. It is a little list of the publications of Derbyshire county council. Members of the Committee might be interested to know that those venerable publications include Derbyshire First, Your Derbyshire,b_line magazine, Derbyshire Gold, Reach,Safer Derbyshire, Derbyshire Governor, Derbyshire Business First, and Derbyshire’s Workforce magazine. All those publications are produced by Derbyshire county council and paid for by Derbyshire council tax payers. The Committee might think that that is all perfectly fine. They are a set of publications that Rupert Murdoch himself would be proud of.

Andy Sawford (Labour, Corby)

I am sure the hon. Gentleman has anticipated this intervention and will give us a stunning and compelling reply, but clearly it would have been incredibly difficult for Anne Western, the Labour leader of Derbyshire county council, to have established such a broad range of publications in her brief time in power. They are obviously the responsibility of the previous administration, which is perhaps being reviewed right now by our colleagues in Derbyshire.

Andrew Griffiths (Conservative, Burton)

I am absolutely delighted that the hon. Gentleman raises the case of Councillor Anne Western, because it is to her that I wish to speak. The resident who e-mailed me made specific reference to Councillor Western and sent me a copy of October’s edition of Your Derbyshire, a fantastic glossy publication paid for by council tax payers. I want to refer to paragraph 15 of the code, which states:

“Local authorities should ensure that publicity relating to policies and proposals from central government is balanced and factually accurate. Such publicity may set out the local authority’s views and reasons for holding those views, but should avoid anything likely to be perceived by readers as constituting a political statement, or being a commentary on contentious areas of public policy.”

So I will refer to a full-page spread by Councillor Western, in which she said:

“The county council is under pressure too. Following news of £127 million worth of cuts to its funding over the next five years, the county council suffered another body-blow over the summer when the coalition Government suggested a further £30 million cut was in the pipeline.”

It goes on:

“The Government needs to know the devastating effects the cuts it’s imposing will have on our communities.”

Chris Williamson (Labour, Derby North)

Is the hon. Gentleman refuting the figures that were quoted by Councillor Western or are they accurate?

Andrew Griffiths (Conservative, Burton)

The point I am refuting is that the publication accords with what is laid out in paragraph 15 of the code, which clearly states:

“Local authorities should ensure that publicity relating to policies and proposals from central government is balanced and factually accurate. Such publicity may set out the local authority’s views… but should avoid anything likely to be perceived by readers as constituting a political statement.”

Does the hon. Gentleman not agree that the councillor’s comment is a political statement?

Chris Williamson (Labour, Derby North)

Does the hon. Gentleman believe that the council tax payers of Derbyshire are entitled to such information or should it be kept secret from them?

Andrew Griffiths (Conservative, Burton)

As I already alluded to, I have no problem with making the details of the financial settlement of Derbyshire county council or any other county council available to the public, because it is obviously something that the public have a right to know about. I do, however, have a problem with party politics on the ratepayer, which is exactly what we are witnessing in this publication and what the Government are seeking to stop with the clause. It cannot be refuted that the councillor’s comment is a party political statement. Taxpayer money is being used to make party political points on the behalf of the Labour party in Derbyshire.

Andrew Bingham (Conservative, High Peak)

I would just like to confirm what my hon. Friend says; as a council tax payer and resident of Derbyshire, I also object to my council tax being used to produce political leaflets that are passed out as the views of the county council.

Andrew Griffiths (Conservative, Burton)

I thank my hon. Friend for making that point and for standing up for residents in his constituency and council tax payers in Derbyshire.

Roberta Blackman-Woods (Labour, City of Durham)

I do not agree with the hon. Member for Burton. Indeed, he said himself that the information was factually accurate. If he believes so strongly that the councillor’s comment is a political statement, will he tell the Committee whether action has been taken under the current code?

Andrew Griffiths (Conservative, Burton)

I am delighted that the hon. Lady has raised that. I hope that the Minister will take on board my concerns and will consider whether this publication, from October this year, which obviously flouts the rules and uses council tax payers’ money to make political statements, should be measured against the code and whether action should be taken.

Andy Sawford (Labour, Corby)

May I ask the hon. Gentleman what action he has taken? He could have written to the monitoring officer or the chief executive. I will make a freedom of information request to find out what action has been taken by local Members of Parliament in respect of what they perceive to be a breach of the code.

Andrew Griffiths (Conservative, Burton)

The hon. Gentleman is absolutely right. Given that I received this information today, I will be doing exactly that. I am delighted that the hon. Gentleman has prompted me to do that and I will be delighted to copy him into the correspondence should he so wish.

Paul Blomfield (Labour, Sheffield Central)

I am wondering whether the hon. Gentleman is arguing that it is wrong for councils to express a view on the behalf of the people whom they represent on issues that affect such people. I draw his attention to comments from the Conservative leader of the LGA, Sir Merrick Cockell, that relate to this particular clause. He describes the clause as “a mistake” and says that he fears the Government may

“restrict councils from campaigning on important issues such as HS2 or hospital closures if they so wish.”

Does the hon. Gentleman disagree with the Conservative leader of the LGA?

Andrew Griffiths (Conservative, Burton)

I am a strong supporter of Sir Merrick, and I agree with many things that he says, but I refer the hon. Gentleman back to paragraph 15 of the code, the terms of which are clear. It cannot be said on the one hand that the Government’s proposals are unnecessary, because there is a code that can be used to protect the public and the council tax payer, and then on the other that, when there is a flagrant breach, as there has been by the Labour-run Derbyshire county council—

Chris Williamson (Labour, Derby North)

The hon. Member for High Peak made the position clear: Conservative Members are objecting to Labour council leaders articulating the impact of Tory cuts on their local areas. That seems to be the only objection that we have heard so far. That is not a breach. The fact is that in May Labour was elected with an overwhelming landslide majority in Derbyshire and it has inherited a terrible budget situation with unprecedented funding cuts. Councillor Western is merely setting out what the impact is, and let us be clear that the impact is a body blow to Derbyshire. That is not party political. She is merely setting out what the impact will be on council tax payers in her area. Surely they are entitled to know that.

Michael Weir (Scottish National Party, Angus)

Order. Interventions should be brief.

Andrew Griffiths (Conservative, Burton)

Of course I understand why the hon. Gentleman would need to defend his county council leader when she is using public funds in such an egregious way. I completely understand that, but I again refer him to the code. Comments should be “balanced and factually accurate” and,

“should avoid being perceived by readers as constituting a political statement”.

How on earth can the phrase:

“The Government needs to know the devastating effects the cuts it’s imposing will have on our communities”

not be perceived as a political statement? The fact that the hon. Gentleman is trying to defend such a breach of the code shows that the Government’s approach is absolutely right. I refer again to the same publication, which says:

“Cuts of this size will damage your services over the next five years. We don’t want to see that happen”.

This is party political posturing on taxpayers and the rates. As much as the hon. Member for Sheffield Central may shake his head, the people in Derbyshire who foot the bill for that deserve better. They deserve a code and they deserve a Government who prevent the use of council tax payers’ money in this way. I ask the Minister to look at that breach of the code, and to confirm today that the Government proposals will stop politicians in the town hall using council tax payers’ money to campaign on the rates in such an egregious way.

Chris Williamson (Labour, Derby North)

Obviously, I rise in support of my hon. Friend the Member for Corby, who I think has put forward an irrefutable case. I am entirely unconvinced by the contribution of the hon. Member for Burton, because he was giving his opinion and parading it as if it were fact. He can report his concerns to the monitoring officer, and we will see whether the comments made by Councillor Western are deemed to be party political. I do not believe that they are in any way, shape or form.

I absolutely believe that it is the right of council leaders and elected council members in different local authorities to express, through their publications, the impact of decisions on the people they represent. Why should they not be able to do that? There is a code of practice within which they need to operate, and if the Government have a problem with councils breaching—in their view—the code, remedies are available. However, from what we understand it seems that there has been no effort made by the Government on a single case to articulate any concerns about a breach or a possible breach of the code of practice.

It must be said that this is a very nasty clause, which places the Secretary of State as the censor in chief in our country. I wonder what kind of country we are becoming. What kind of democracy do we want to live in? The clause has been brought before the Houses of Parliament in all seriousness. Is this Committee expected to swallow it and think that in some way this represents democracy? It seems to me to be the very antithesis of democracy.

I am reminded of the 1980s, when a previous Conservative Government sought to attack Derbyshire county council, a local authority with which they disagreed at the time, and to use legislation to clamp down on the council. It was probably the publications in Derbyshire at the time that led to the 1986 legislation, which I will come on to in a while.

I wonder what the Government are frightened of. Why are they so scared of local authorities expressing opinions and information to their electors about decisions affecting their local areas? Intervene on me: why are Conservative Members frightened of that? Surely information should be imparted freely throughout the local authority area. All the local authority is doing is informing the public, who have a right to know. Much of it is incredibly innocuous stuff. My hon. Friend the Member for Corby went to great lengths to explain the sort of information that is incorporated in many council publications, which members of the public should receive. Very often, in many parts of the country, no alternative is available to get that information across to local residents.

Brandon Lewis (Conservative, Great Yarmouth)

I wonder whether the hon. Gentleman could clarify whether he still supports the voluntary code and the terms within it.

Chris Williamson (Labour, Derby North)

The code is something that we support, yes. It is supported across local government. That seems to be a fairly straightforward and obvious point, and I am happy to get it on the record. Working within that code is perfectly proper and the document from Derbyshire that was referred to was within that code. We shall see whether the hon. Member for Burton refers it to the monitoring officer; there will be an investigation and a view will be given. I suspect that it will come down in support of Councillor Western and against the hon. Gentleman.

Let us be clear: 79% of council publications reach 90% and more of their local electorate. That is a pretty impressive penetration rate—only 1% of local papers achieve that kind of penetration. As we have already heard from my hon. Friend the Member for Corby, there are many local authority areas in this country where there is no alternative local newspaper to provide information and news to residents, so the only source of local news and information is through the council publication. What we see here is an attempt by the Government to close off that opportunity to provide the information.

Andrew Griffiths (Conservative, Burton)

Will the hon. Gentleman give way?

Chris Williamson (Labour, Derby North)

Let me read this quotation from the National Union of Journalists, then I will give way to the hon. Gentleman. The National Union of Journalists says that:

“We do not believe that this element of guidance reflects the needs of many communities, nor the practicalities of providing prompt, accurate advice and information to communities. For example, in areas where there are no, or limited local newspapers, then sharing planning details, service changes and details of consultations on a quarterly basis is insufficient”.

Andrew Griffiths (Conservative, Burton)

I want to comment on the hon. Gentleman’s point about where there is no other newspaper; the hon. Member for Corby referred to the Nene Valley News and there being no other newspaper. In Derby North, in my constituency and in many others across the country there are newspapers struggling for copy, advertising and support. For instance, the Derby Telegraph provides a fantastic service. Does the hon. Gentleman think that the Derby Telegraph should have to put up with this unfair competition?

Chris Williamson (Labour, Derby North)

I am glad the hon. Gentleman has made that point. Let me be clear and quote the Derby Telegraph, which does not consider the publication of the local council newspaper in Derby as any threat whatever. Indeed, it benefits from the publication of that newspaper, because it publishes it and prints it, so it is getting an income stream, as well as advertising revenue, from the local authority. Far from the Derby Telegraph suggesting that this is a threat, it welcomes it and benefits from it. I do not accept the hon. Member for Burton’s point.

Neil Carmichael (Conservative, Stroud)

My problem with this debate is that clause 38 is about encouraging compliance with the code and, so far, that has received fairly broad acceptance from Opposition Committee members. Should we not focus on whether we want to insist that the code works, is operated and is complied with?

Chris Williamson (Labour, Derby North)

There is no evidence to suggest that the code of practice for local authorities—the voluntary code—is being breached at the moment. If there were some evidence of widespread abuse, there might be some justification, but even then I would be a little anxious and nervous about using a sledgehammer to crack a nut. However, there is no evidence, so I do not understand what the hon. Gentleman is concerned about.

Paul Blomfield (Labour, Sheffield Central)

Again, there is a great deal of cross-party consensus—not in this room, but certainly outside it—on these unnecessary provisions. Is my hon. Friend aware of the comments made by Baroness Eaton, a well respected former Conservative leader of Bradford council? She said:

“This clause is unnecessary as there is no evidence that council publications are competing unfairly with local newspapers and, by the Government’s own admission, very few councils are breaking the existing recommendations.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 903.]

Chris Williamson (Labour, Derby North)

I am grateful to my hon. Friend. I am familiar with the noble Baroness’s comment; I may even have quoted her on Second Reading. It is clear that there is cross-party support, if not in this sitting, then in the wider reaches of the other place. Certainly, outside Parliament there is widespread cross-party support for the position that we are taking.

My hon. Friend the Member for Corby has already mentioned that the LGA, which it has to be said is a Conservative-led organisation, supports our amendments in their entirety. He said that that is pretty much unprecedented. I have been around the LGA for some time. Despite my youthful appearance, I was a councillor some 20-odd years ago and served on the LGA. I do not recall its being so forthright in its support for what might be argued is a partisan amendment. We are living in unprecedented times. There is cross-party support—if not in this room, then in the wider world.

The proposition being advanced by the Government has Orwellian implications. The Secretary of State is setting himself up as Big Brother. Rather than being the Secretary of State for Communities and Local Government—I have made the point in the past and this provision just reinforces it—he is the Secretary of State for the Ministry of Truth. Perhaps we should rename the Department “the Ministry of Truth”, which would be a more appropriate name if the clause is unamended.

Andrew Griffiths (Conservative, Burton)

To get us back to the amendment tabled by the hon. Member for Corby, will the hon. Gentleman clarify which, if any, sections of the code he disagrees with? If he does not disagree with any of the code, will he explain why he does not want it to be fully enforceable?

Chris Williamson (Labour, Derby North)

It is a sledgehammer to crack a nut. We have already made the point that there is no problem with the voluntary code and that the LGA does not have a problem with it. The clause would put so much power in the hands of the Secretary of State and one wonders where he or a future Secretary of State will go with that power. It is unjustified. Why legislate when there is no evidence to justify the legislation? That leaves me suspicious and leads to suspicions in the minds of people from all parties—outside this place, if not in this room.

Andy Sawford (Labour, Corby)

My hon. Friend talks about suspicions. Does he agree that the hon. Member for Burton’s contribution to the debate reveals why we are right to be so concerned about what the Government’s real intentions are? It is about wanting to silence opposition in this country, as they have done with the gagging law.

I have read comments by Andrew Lewer, the former Conservative leader of Derbyshire council, in the publication —helpfully, all past copies of the publications are online—and he makes similar references to the impact of Government on his local area as elected leader of the local council. It is incredibly worrying. Does my hon. Friend agree?

Chris Williamson (Labour, Derby North)

I absolutely agree. The more interventions I hear from the hon. Member for Burton, the more alarmed and concerned I become. I hope that sense will prevail in the end, because this is a very worrying trend. Talk about a sledgehammer to crack a nut!

Powers are already available under section 4(1) of the Local Government Act 1986, a piece of legislation precipitated in part by previous attacks on Derbyshire county council, led at the time by Councillor David Bookbinder. As we know, “publicity” is defined in that legislation, having regard to the contents of the publicity code and section 6 of the Act, as

“any communication, in whatever form, addressed to the public at large or to a section of the public”.

I say again that powers are available. There is no real evidence of widespread, if any, abuse, and as far as I am aware, the Government and Ministers have not attempted to take any action. If they are so concerned, why have they not written to local authorities? Why have they not even considered judicial review? My hon. Friend the Member for Corby referred in his contribution to his parliamentary question:

“To ask the Secretary of State for Communities and Local Government”—

or the Ministry of Truth, whichever one prefers—

“what communication he has had with the London Borough of Tower Hamlets about adherence to the Code of Practice on Local Authority Publicity.”

Answer came there none.

My hon. Friend asked another parliamentary question:

“To ask the Secretary of State for Communities and Local Government, how many local authorities he or Ministers in his Department have written to with regard to their observance of the Code of Practice on Local Authority Publicity.”

Answer came there none.

What is going on here? There are remedies available, but the Government are not using them. They have not even taken the trouble to write to local authorities, which, if we believe what Government Members are saying, are in breach of the code and being party political at every turn. The truth of the matter is that there is no evidence of that. Even the example cited by the hon. Member for Burton and backed up by the hon. Member for High Peak is, in my view, nowhere near a breach in any event. The best that they can do is to point to one: Derbyshire county council. That is all we have heard today.

Andrew Bingham (Conservative, High Peak)

A High Peak borough council magazine was printed some time ago that featured the Labour leader waving around a pen with “Labour” written on it. I wrote to the chief executive on that exact subject.

Chris Williamson (Labour, Derby North)

I am not sure how the hon. Gentleman wants me to respond to that, or whether it was a serious intervention. Is he happy for it to appear in Hansard—that he is concerned about the Labour leader of a borough council brandishing a pen with “Labour” on it? As though anybody would be able to read that it said “Labour”, unless it was a giant pen! Was he signing a giant cheque with a giant pen?

Andrew Bingham (Conservative, High Peak)

To be honest, I noticed it, and so did several residents. They said to me, “Why should they have a party political emblem in a council-produced magazine?” I agree, but the point that we are trying to make is that it typifies how things can be placed. They call it product placement, and it was banned on television—“EastEnders” would have Kellogg’s corn flakes on the breakfast table and so on. We could go on about this; I am sure that there are many other examples up and down the country.

Chris Williamson (Labour, Derby North)

My goodness me, if they are as strong as that, I give up. Is that the best we can do? I am almost speechless. We have heard an alleged breach of the code in some comments from a leader of Derbyshire county council setting out the impact of the Government cuts on the residents of Derbyshire.

The only other example is that in a photograph in a newsletter from High Peak borough council, the Labour leader had a pen with “Labour” written on it. That was a breach, so we are passing legislation to prevent leaders of councils appearing in photographs brandishing pens with “Labour” on them. I do not know whether the hon. Gentleman can see it, but I have a pen here that says “League Against Cruel Sports”. Can he read it? That would be about the size of the image seen. Honestly, I find this utterly ridiculous.

Andrew Bingham (Conservative, High Peak)

I repeat that if councils, whatever— [ Interruption. ] Labour Members obviously find it all very hilarious, but I make the point that it was not just me who noticed it and said, “Hmm.” Constituents came to me and said, “That isn’t right.” If Labour Members think that what my constituents bring to me is worthy of ridicule, that is fine—that is their prerogative.

My hon. Friend the Member for Stroud referred to the Lambeth council poster on the cuts, and that poster was outside my flat in Lambeth. There are various examples. In isolation, people might think that the pen thing is funny, but when my constituents come to me, I do not particularly like to laugh at what they tell me.

Chris Williamson (Labour, Derby North)

Fine. People may articulate their concerns to the hon. Gentleman, and they are perfectly at liberty to do so, but is the pen really a breach of the code? Does it merit legislation? As my hon. Friend the Member for Corby has pointed out, we could argue that the Labour leader at the time, by using a Labour pen, was saving the council tax payer money by not using a pen funded by the council tax payer, so perhaps he should be congratulated.

Andrew Bingham (Conservative, High Peak)

That is a fair point, but what we do not know is whether the pen actually worked.

Chris Williamson (Labour, Derby North)

We will never know. It would be interesting to know whether the hon. Gentleman referred the case to the monitoring officer.

Roberta Blackman-Woods (Labour, City of Durham)

Does my hon. Friend agree that it was a Labour pen, so it must have worked?

Chris Williamson (Labour, Derby North)

Absolutely. I completely concur.

Andrew Bingham (Conservative, High Peak)

Does the hon. Gentleman agree that when a constituent brings something to me as their elected representative—no matter how amusing Opposition Members might find it—I should do something about it, rather than just say “Don’t be so silly, go away”?

Chris Williamson (Labour, Derby North)

I am not suggesting that the hon. Gentleman should say, “Don’t be so silly, go away.” What I am suggesting is that he should not elevate that to the point where he uses it to justify introducing legislation. I talked about using a sledgehammer to crack a nut, but, goodness me, this is much more than a sledgehammer; it is one of those piledrivers that was used to build the London Shard. It is unbelievable that his trivial example could be invoked as justification for introducing legislation.

Andy Sawford (Labour, Corby)

I wonder whether my hon. Friend, like me, is not particularly concerned that Councillor Irene Dean, a member of Welwyn Hatfield borough council, is wearing a blue shirt in a picture and that Councillor Sara Johnston, a Conservative, is wearing a blue dress. There are many images of local authority members. In East Hampshire district council’s Partners magazine, they are wearing badges. The measure is clearly intended to stop the display of any political or campaigning emblems, because the Government are trying to stamp out even charitable and third-party emblems. Does he agree that the measure will result in officials in the Department for Communities and Local Government using microscopes to check whether any such badges or emblems—or even the offending pens—carry anything that could be construed to be in any way political?

Chris Williamson (Labour, Derby North)

My hon. Friend makes a pertinent point that goes to the heart of the ridiculousness of the measures that the Government are seeking to introduce. One wonders where it will all end. They are letting a genie out of the bottle that will have unwelcome and potentially unforeseen consequences.

Mark Pawsey (Conservative, Rugby)

The hon. Gentleman is enjoying a bit of knockabout, but I want to take him back to the Select Committee on Communities and Local Government inquiry into local government publications. I draw his attention to the report’s conclusion:

“While there is…a case for individual politicians and parties to state their position on particular issues, this should be at their own expense.”

Does he not agree with that sentiment and, therefore, that illustrations such as that provided by my hon. Friend the Member for Burton should not be included in local authority publications?

Chris Williamson (Labour, Derby North)

I have already made my position clear. I do not believe that the words attributed to Councillor Western are in any way, shape or form a breach. If the hon. Member for Burton wants to report that to the monitoring officer, no doubt an inquiry will be forthcoming and we will find out what the monitoring officer thinks about Councillor Western’s comments.

Andrew Griffiths (Conservative, Burton)

We all accept the old adage that the pen is mightier than the sword. Is the hon. Gentleman not demonstrating why it is important for the code to be in legislation? He is trying to hide behind the code being a voluntary code and the enforceability of that. If he supports the code being a voluntary code, why does he not think it should have some teeth and be enforceable?

Chris Williamson (Labour, Derby North)

It has teeth. It is already universally accepted across local government. Local government already signs up to the voluntary code. As I have said, we have not heard widespread examples of abuse. We have heard of one from the hon. Member for Stroud and we have heard about the pen, but that is about it. There is not the evidence available.

Paul Blomfield (Labour, Sheffield Central)

In the context of comments made by hon. Members on the Government Benches, my hon. Friend might reflect on the extraordinary powers the Secretary of State is giving himself to intervene, to exercise editorial authority over council publications

“whether or not the Secretary of State thinks that the authority is complying with the code”.

The powers being sought are nothing to do with code compliance; they are everything to do with sucking power to the centre.

Chris Williamson (Labour, Derby North)

That is very much so. It speaks to the party political nature of the clause. We have heard about two council leaders. One made some comments and another held a pen. That is all we have heard. The individual who is being really party political—this goes to the heart of what is proposed—is the Secretary of State, who will have powers to intervene, even if there is no evidence of a breach of the code or abuse. It is clear and set out in the Bill. Why should the Secretary of State have such powers? He is seeking to use them in a partisan way to intervene against councillors in local authorities that he does not like, such as the leader of Derbyshire county council and the leaders in Nottingham. As local elections come next year and beyond, there will probably be more Labour local authorities. This provision would give the Secretary of State the power to intervene against political opponents he does not like, even though they are acting perfectly lawfully and within the code of practice.

Neil Carmichael (Conservative, Stroud)

The hon. Gentleman has asked a perfectly reasonable question, so let us answer it. According to a parliamentary answer from the Minister, 10% of local government publications breach the code. That includes the example of Lambeth council, which I have already mentioned and my hon. Friend the Member for High Peak reiterated. Lambeth council said that the Government had cut its money so it was forced to cut services. That is blatantly political.

That sort of activity is within the code. We have agreed that the code is acceptable. The code would say that that practice was not acceptable, so we should agree that it is not acceptable. Now we have to find a way to ensure there is more compliance. That is the issue here: 10% of publications do not comply. It is therefore necessary to introduce clause 38 to make compliance and enforcement possible.

Michael Weir (Scottish National Party, Angus)

Order. Interventions should be brief. A lot of interventions in this debate are getting very long, so please let us have briefer interventions.

Chris Williamson (Labour, Derby North)

I hear the hon. Gentleman’s intervention. I am not sure it is valid. I note his reference to 10%. I think that is a fairly subjective view. I would be interested to hear from the Minister whether he can confirm that. As far as I am aware, there have not been any examples of Ministers making representations to local authorities about breaches. We know that local government is resourceful but I am not sure they have developed alchemy yet. I am not sure that Lambeth pointing out that a big reduction in funding from central Government will have an impact on front-line services qualifies as a breach of the code.

Roberta Blackman-Woods (Labour, City of Durham)

My hon. Friend is making a powerful argument against the clause. Does he agree that interventions from Government Members seem to suggest that they do not want local communities to get factual information about the impact of Government cuts on their area? That is what they are trying to close down.

Chris Williamson (Labour, Derby North)

My hon. Friend is absolutely right. Going back to the previous intervention from the hon. Member for Stroud, he referred to 10% of local authorities breaching the code. I am not sure when he got that information, because when Baroness Hanham was challenged on the number of local authorities that had allegedly breached the code, she said:

“I shall not say which local authorities we already know are breaching the code. I have them. I could do it, but I think it is probably not helpful. I hope noble Lords will accept my assurance that at least a dozen are breaching them at the moment.”—[Official Report, House of Lords, 15 July 2013; Vol. 747, c. 604.]

That is not 10%, but just 12. As I pointed out this morning, I am just a lay person. I am not a lawyer or an accountant; I am a humble bricklayer. Even by my maths—I left school without any qualifications—12 does not constitute 10% of local authorities.

Neil Carmichael (Conservative, Stroud)

I have been looking at a very interesting website, “NS the voice of local media”. It represents all sorts of organisations and organs of the local media. That is where that information comes from. But in a parliamentary answer the 10% was explicitly stated by the Minister. There is a case to be answered here. It is no use just referring to our own personal experiences because we cannot know all of the situations across the whole of the country, but we can assume that the figure of 10% is broadly right.

Chris Williamson (Labour, Derby North)

I am grateful to the hon. Gentleman for that clarification. I thought he said when he intervened earlier that it was a formal answer to a parliamentary question. It now seems that it is from an independent website. We can all go on the internet and find all sorts of things asserted. In an earlier debate I was called to order by the Chair for using an internet definition of a “close friend”. I am not sure the hon. Gentleman’s argument carries any weight. I can only refer to Baroness Hanham, who said that it was around 12, which is less than 1% of local authorities. My maths is not great and perhaps my hon. Friend can help me.

Andy Sawford (Labour, Corby)

I am sorry to disappoint my hon. Friend but I cannot shed light on this element of the debate. Clearly there has not been any real evidence forthcoming from the Government, but that was an extraordinary statement. They claim to have the information and refuse to give it in the House of Lords.

The hon. Member for Stroud made an instructive comment and I wonder what my hon. Friend’s response to it might be. He said that we cannot always know what is happening in other areas and we cannot base our judgments entirely on what happens in our areas. The whole point of changing the code from an advisory one to one that is enforceable by the Secretary of State on his judgment is that he will take precisely the power to use his subjective opinion to stop councils from publishing things all around the country based entirely on what he thinks. That is what is wrong with the measure and what is anti-democratic.

Chris Williamson (Labour, Derby North)

My hon. Friend is absolutely right. That is precisely what is wrong with it. There is no evidence whatever of widespread abuse. The localist Secretary of State, someone who allegedly believes in localism and the power of local people and the power of self-determination, is taking these unprecedented powers to himself. Not even Margaret Thatcher sought to take powers to that extent in the 1980s when the wholesale assault was launched on Derbyshire county council.

My hon. Friend talked about the impact of the clause and said that it will preclude local authorities from supporting local people in their campaigns on issues of local concern. I wonder what on earth a local authority or elected members are for if not to stand up for the local electors who put them there in the first place. Surely they should have the right and the power to stand up, facilitate and assist campaigns on matters of local concern. Anybody who claims to be a localist could not argue against that notion. Local elected members should be able to represent, stand up for and facilitate campaigns on issues of great concern to the electors who put them into office in the first place.

Duncan Hames (Liberal Democrat, Chippenham)

The hon. Gentleman makes his point strongly. If it were not for the fact that there are, of course, other means by which to do so, his would be a compelling argument. Does he agree that there is quite a difference between representing the existing concerns of an electorate and seeking to persuade that electorate of a position held by one portion of it, and that, in addressing those arguments, we ought to recognise the difference between the two?

Chris Williamson (Labour, Derby North)

The local code, I believe, makes that distinction already. I come back to the point that if there were examples of widespread abuse, there might be something to say for introducing the clause, but we have not heard of such examples. I do not know whether the hon. Member for High Peak has any examples further to a Labour leader holding a pen, but we have no examples to justify using a huge piledriver to crack a tiny nut. On that basis, until such time as he can come forward with examples to justify the legislation his Government proposes, he ought to support our amendment.

Paul Blomfield (Labour, Sheffield Central)

I wonder whether the hon. Member for Chippenham, who just intervened, was similarly concerned about the position of the Lib Dem-Tory Southwark council back in 2008 when it—legitimately—raised concerns about the Labour Government’s NHS policy and the closure of a local hospital on behalf of Southwark’s residents. Would he condemn that council for doing that and for making those views known in council publicity?

Chris Williamson (Labour, Derby North)

Obviously, that local authority was perfectly at liberty to articulate those concerns. I will come on to examples such as that in a moment or two, in which local authorities rightly use council publications to articulate the views and concerns of their residents.

I do not know whether the hon. Member for Chippenham thinks that that was an abuse. I happen to think it was not. It certainly was not challenged as being abuse at the time. Surely it was a perfectly legitimate use of council tax payers’ resources, because the decision would have a direct impact on that local area. Surely it is reasonable in those circumstances for the democratically-elected community leaders to articulate those views.

It would be wrong if legislation were passed that makes it difficult—impossible, even—for local authorities to support their residents in campaigns. That is a good case in point from 2008, but a campaign could be on a range of other things, such as the location of an incinerator, the building of a new supermarket, the site of a new road or infrastructure projects such as HS2, which my hon. Friend the Member for Corby mentioned in his opening remarks. If a local authority is to mean anything, surely it ought to be articulating and representing the views of its residents. I know, however, that sometimes the Government of the day might not like to hear some of those views.

This afternoon, we have heard from Members that they objected to the words used by Councillor Western of Derbyshire county council. However, George Orwell said:

“If liberty means anything at all, it means the right to tell people what they do not want to hear.”

It is pretty clear that Government Members in this Committee do not want to hear local authorities representing their communities and repeating back to them the impact of the unprecedented swingeing cuts that they are voting for and that are being imposed on local government up and down the country. To somehow say that it is wrong, that it is in breach of the code, that it is party political, or that it is anti-democratic to articulate to local residents that a funding reduction from central Government will impact on services to people on the ground, seems incredible. I find it astonishing that anybody could suggest that that was in some way wrong and unacceptable.

Government Members may not like to hear it, but it is important that local government members of whatever political persuasion have the ability to stand up and speak up for the local residents that put them where they are. Those in central Government might not like to hear the views and concerns of local people about the policies they are implementing at a national level, but surely local people have a right to speak up.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I hope to speak later in the debate, but I wanted to ask whether the hon. Gentleman thought it properly reflects the need for a balanced projection if a Lambeth council poster talks about the impact of cuts on residents without also disclosing on the same poster that that council has £84 million in the bank in reserves?

Chris Williamson (Labour, Derby North)

We dealt with that issue earlier on. I am not sure whether the right hon. Gentleman was here this morning—or was it another day? One day seems to merge into another when we are enjoying ourselves so much in this Committee. Anyway, we dealt with the issue of reserves and made the point that, because of the unprecedented swingeing cuts that are being imposed by the coalition Government—he served on the Front Bench when those decisions were taken—councils are keeping reserves in order to minimise the impact on front-line services. It is important that reserves are there to be used to minimise that impact, and he will well know that many of them will be earmarked.

I cannot comment on whether the figure he has given is correct—I take the right hon. Gentleman at his word—but it really does not justify these measures. In many ways, it is a separate point. If Lambeth council had included on its poster that it had some money in reserve, how would that be in any way relevant? Had it done that, would it have stopped the Government? Would it have precluded his support for the Bill? It is a spurious example and certainly does not justify using a piledriver to crack a miniature nut.

Andy Sawford (Labour, Corby)

Two elements of the previous intervention are instructive, so I wonder whether my hon. Friend might comment on them. First, there is a consistency in any example given: what is clearly motivating the Government, and is behind this extraordinary, disproportionate and undemocratic clause, is that they have not liked, on occasion, a local community and its elected representatives speaking a bit of truth to power. In the example cited by the right hon. Member for Hazel Grove, had the local authority chosen to highlight its prudent planning of reserves, could not that have been seen as political posturing to highlight its record as a great Labour council making sensible decisions to build up reserves in the event of a difficult time ahead?

Chris Williamson (Labour, Derby North)

If the clause is enacted, that would be absolutely the view taken by the Secretary of State. As we know, irrespective of whether there is any breach, the Secretary of State can intervene, so my hon. Friend makes a pertinent and penetrating point.

Andrew Griffiths (Conservative, Burton)

Perhaps the hon. Gentleman thinks it would have been less troublesome if Anne Western, at the same time as saying that it was a

“body-blow over the summer”

that the county council was having to consider £30 million of extra cuts, had said, “But we’re increasing our reserves from £231 million to £241 million.” Does he think that that would have been a more accurate description?

Chris Williamson (Labour, Derby North)

The hon. Gentleman should make that point to his right hon. Friend the Member for Hazel Grove, because he brought up the issue of reserves. We have rehearsed that argument, and I am not sure that it is particularly helpful to go into detail about the whys and wherefores of local authority reserves, and the reasons why local authorities are building up their reserves to try and minimise the impact on local authority services that is a consequence of the unprecedented swingeing cuts that the Secretary of State is imposing.

Where on earth is the inspiration for all this stuff coming from? When we strip all the language and all the discussion we have had away, it is really an attack on free speech. We are talking about democratically elected local community leaders being prevented from speaking up for their electorate. If that is not an attack on free speech, I do not know what it is.

John Stevenson (Conservative, Carlisle)

What is the purpose of the council chamber if it is not to debate issues and have free speech?

Chris Williamson (Labour, Derby North)

Of course I am not saying that free speech is being closed off entirely, but this is one important part of free speech that is under attack from the Government.

Duncan Hames (Liberal Democrat, Chippenham)

If the hon. Gentleman is so concerned about freedom of speech, would he encourage magazines published by local authorities to have an independently edited letters page—[ Interruption ]—so that the ordinary council tax payer might have freedom of speech in those publications?

Chris Williamson (Labour, Derby North)

My hon. Friend the Member for Corby points out from a sedentary position that people could send those to a local paper. To be honest, I think that some local authorities already have such a page. I am not absolutely certain, but I am pretty sure that I have seen examples of that in local council publications, and I would not have a problem with that—it would be quite a good thing.

This policy is very much an attack on free speech. The hon. Member for Carlisle talked about the council chamber being the bastion of free speech in which views can be heard and exchanged. That is absolutely true but, as we all know, attendance at council meetings is regrettably not huge. The reportage of council meetings often leaves a lot to be desired because of the difficulties that many local newspapers and radio stations are experiencing. At council meetings in my early days on Derby city council, there was always a journalist from the local newspaper, a broadcast news reporter from Radio Derby and a broadcast news reporter from Ram FM, as I think it was at the time. Those three journalists were there for the entire meeting. By the time I resigned from Derby city council, we did not see any of them very often—not even the representative from the Derby Telegraph.

Neil Carmichael (Conservative, Stroud)

I am puzzled, because I cannot understand how this can be described as an attack on free speech when the code itself is very clear. We all appear to agree about its objectives and purposes, and it includes a description of what councils should be allowed to do: communicate about local government activity. Where the code draws the line is on making overt political points, and surely we would want compliance with that. Clause 38 simply does that; it does not extend or strengthen the code, but simply enforces it.

Chris Williamson (Labour, Derby North)

I am at risk of repeating myself, but I would have more sympathy with the hon. Gentleman’s intervention if he could cite some examples of abuses that are going on. We have not seen any. We have had a pen, a bus shelter, and some comments from the leader of Derbyshire county council, and apparently the bus shelter misdemeanour would have been ameliorated if there had been some reference to Lambeth’s reserves. There are no examples of any real abuses, and I stand by my point that the proposal is an attack on free speech, because it gives unfettered power to the Secretary of State.

I wonder where the Secretary of State is getting his inspiration from. Is it from Iran, perhaps, with an attack on free speech? Perhaps it is a Putinesque former Soviet Union, to which my hon. Friend the Member for Corby referred. Perhaps it is North Korea, and the Secretary of State wants to be the supreme leader of local government. Rather than being known by his name, he might prefer to be “Kim Jong Pickles”. We will see him flanked by military people and viewing operations through his binoculars, perhaps with a curious hairstyle.

I despair as to what on earth the Government are doing. They claim to be localist and say that they want to devolve power and free the people, but they are, at the same time, controlling them with an iron fist. It really is coming back to the point about Big Brother and the ministry of truth.

I shall conclude with a quote from Oscar Wilde:

“I may not agree with you, but I will defend to the death your right to make an ass of yourself.”

Governments Members are in real danger, as a bare minimum, of making asses of themselves. We want to save them from that ignominy. I say to Government Members, “Please support our amendment. Don’t make asses of yourselves. Stand up for the localist principles that you all claim to believe in.” If they genuinely believe in those principles and in free speech, they cannot possibly support the clause.

My hon. Friend set out an irrefutable argument that was backed up by fact and by the views of ordinary members of the public—from various parts of the country as well as his constituency—who have grave reservations about what the Government are doing. As has been pointed out, that could have political ramifications. All credit to him for magnanimously trying to help his political opponent by preventing him from making an ass of himself when he confronts my hon. Friend in the general election in 2015.

The clause is a retrograde and dangerous step, so I hope that Government Members will think carefully before they allow it on to the statute book.

Martin Vickers (Conservative, Cleethorpes)

I will not detain the Committee too long. We spent more than two hours discussing the clause, which I think is totally disproportionate to its relevance to the Bill as a whole. I certainly support what is proposed in clause 38 and we need a little balance to what has been said over the past hour or two.

The shadow Minister said that he regretted the potential demise of various council newssheets. We have heard a whole litany of contributions from people who claim that they are a lifeline in their community. I would welcome their demise, to be perfectly honest, because to a great extent they are taxpayer-funded propaganda.

In my part of the world, we have two particularly valuable local newspapers, the Grimsby Telegraph and the Cleethorpes Chronicle, both of which cover local politics, although not quite to same extent as 20 years ago, as the hon. Member for Derby North pointed out.

John Stevenson (Conservative, Carlisle)

Does my hon. Friend agree that local independent media are the vehicle for real scrutiny and for challenging power? They will hold people to account, not newspapers paid for by local government.

Martin Vickers (Conservative, Cleethorpes)

I entirely agree with my hon. Friend. I readily admit that local newspapers’ coverage of council meetings is not what it was in 1980 when I was first elected.

Duncan Hames (Liberal Democrat, Chippenham)

Surely not.

Martin Vickers (Conservative, Cleethorpes)

I am afraid so; it was 26 years of service.

In August 2009, however, the Grimsby Telegraph referred to a debate in which one speaker said:

“I think these types of publications produced by councils and public bodies benefit no one except those employed in”

their

“printing and distribution”.

It attributed that comment to a Councillor Martin Vickers. I do not know what happened to him, but I am sure he is doing something equally worth while nowadays.

It is important that we support the viability of our local newspapers. The debate to which I referred was about a proposal that North East Lincolnshire council’s newspaper should publish all public notices and recruitment advertising, which would naturally have been a major blow to the local newspapers that carried that advertising. Understandably, we all speak in support of our local newspapers and want them to remain viable. If we allow council newspapers to expand to take on recruitment advertising and public notices, their viability will inevitably be brought into question.

Neil Carmichael (Conservative, Stroud)

My hon. Friend makes a good point. It was the theme of the Newspaper Society when it said that this sort of publication

“competes unfairly with independent newspapers for readers and advertising revenues.”

That is what local newspapers think, so does he agree that this measure is a useful one to defend the local press?

Martin Vickers (Conservative, Cleethorpes)

I entirely agree with my hon. Friend. I fully support this measured proposal.

It might be useful if I set out one or two examples of the public’s thoughts that are the opposite of what the shadow Minister cited. During that 2009 debate, the then rector of Grimsby, Rev. Michael Hunter, said:

“Talk of the council, the largest employer in North East Lincolnshire, transferring its advertising to an in-house publication and withdrawing a significant funding stream from its local newspaper will surely threaten its existence. Whether we love the Telegraph or not, this is an alarming development for those of us who treasure the freedom of the press and the part it plays in community cohesion.”

Paul Blomfield (Labour, Sheffield Central)

I know that the hon. Gentleman is making his points sincerely and has concern for local media, but what would he say to Baroness Eaton, who has at least as distinguished a role in local government as a Conservative councillor as he does—she is the former leader of Bradford council—when she says that

“there is scant evidence of council publications competing unfairly with local newspapers”.

The rest of the debate is in Hansard.