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Lord Rooker: My Lords, I confirm that we are not planning regional armies.

Lord Pearson of Rannoch: No, my Lords, but the European Union is planning its own.

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So the question is this: will the Minister come to the Dispatch Box with his hand on his heart, and give an unequivocal assurance on behalf of Her Majesty's Government, that the regionalisation envisaged in the Bill will never and could never, and I mean never, lead to the kind of dominance by Brussels and the European Union which I have described? I look forward to his reply.

5.20 p.m.

Lord Hanningfield: My Lords, first I must declare that I am leader of Essex County Council. Perhaps I should also declare that I am the leader of the Conservative group on the Committee of the Regions in the UK. I shall have a discussion with my colleagues some time about that committee; I think that there are certain misunderstandings about it. At this stage of the debate, many of the messages have been put over. I shall repeat some of the issues, but they are worth repeating, because we have to make a lot of very difficult decisions on the Bill.

Although I am a firm supporter of transferring power from central government to the local community and am a strong believer in strengthening local democracy, I cannot support the proposals for devolution to the English regions as they stand. I have three principal reservations about the Bill. First, the regions in question are meaningless to most people in most parts of the country. Secondly, the creation of regional assemblies will lead to the abolition of county and district councils. Public services will be severely disrupted. The young, the vulnerable and the needy will ultimately pay the highest price for local government reorganisation. Finally, people will be asked to vote in referendums on the grey proposals of a White Paper. People should go to the polls to vote on the black and white substance of legislation.

Any consideration of regional government must start with the regions themselves. As I see it, England has been carved into eight convenient units. Originally created for administrative purposes, they lack any cultural, social or historical identity. Why manufacture regions? Many parts of England already have a natural identity. Consider my own county of Essex. With a population of 1.3 million people, it is larger than 13 American states. By European standards it is large enough to be a region in its own right. Historically, it was a kingdom before England was unified 11 centuries ago. It is a unit of government that people instinctively understand. The 100,000 London commuters who live in Essex look to the capital, not the so-called East of England.

I have been quite disturbed by much of the debate. I do not think that people understand what counties do or what they are. Most of the people who have spoken are not from a county background or have been on county councils. We have a devolved unit in this country—the counties. They are historically devolved and should stay that way. The noble Lord, Lord Newby, mentioned that the Yorkshire and Humberside region had dealings with China. Essex

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County Council has an office in China, as we have trade in China. Counties can undertake such dealings; we do not need regions to do it.

Regions must be more than mere compass points on a map. People will support regional assemblies only if they recognise themselves as being citizens of the regions that the bodies will represent. I fear that we are going through all this simply because of three parts of the country—the North East, Yorkshire and Humberside, and perhaps the North West, although not everything is certain there. The White Paper on regional devolution is entitled Your Region, Your Choice. Arguably, the Government have chosen regions for their own convenience. They are the Government's regions; it is the Government's choice.

Consulting people about meaningful regional boundaries is the first and most crucial step towards securing effective regional government. It is the key to encouraging people to vote in regional elections. It is the cornerstone on which regional government will stand or fall. That is why we are talking today. As the leader of a large local authority, I have grave concerns about tying elected regional assemblies to local government reorganisation. I was a serving councillor when local government structure was reviewed in the 1990s. There was little appetite for unitary authorities in many historic counties then. There will be no more now.

The threat of local government reorganisation will inevitably distract councils from the vital task of delivering quality public services. In my own administrative region, the East of England, the Audit Commission has judged the performance of five out of the 10 councils to be good. One local authority, Hertfordshire County Council, has been rated "excellent". Under regional assemblies, good and excellent councils will be dissolved. Councils that have been through a rigorous comprehensive performance assessment, have proven corporate capacity and have developed strong partnerships with their stakeholders will be dismantled. They could be replaced with untried and untested unitary authorities.

The taxpayer will shoulder the significant financial burden of reorganisation. As I said, public services will face inevitable disruption. As the Bill stands, the Secretary of State will have the power to call repeat referendums in regions that have rejected regional government every five years. Local authorities will be forced to operate in a climate of uncertainty if the issue keeps coming back. Forward planning and continuous service improvement will be undermined by the constant threat of reorganisation.

The Government believe that a regional tier of government is "one tier too many". That overlooks the different demands that different tiers of government are uniquely placed to meet. District councils are able to respond to local needs. A county council meets the economies of scale needed to deliver strategic services such as education and social care. If we introduce unitaries in rural counties, we shall lose the economies of scale, and sacrifice democratic accountability and the support for rural communities. Europe

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demonstrates that two tiers of government can co-exist beneath the region. We have only to look at the examples of Germany, France, Italy and Spain, as some of my noble friends have said.

Let us turn now to the powers of regional assemblies. As the Bill stands, people will be going to the polls in the dark. They will be asked to decide whether they want an elected regional assembly for their region. They will be expected to express an opinion before legislation has been passed defining any regional assembly's powers. As the Bill stands, people will be voting for what a regional assembly could be, not what it will be.

The White Paper, Your Region, Your Choice, states that functions are "generally" not being drawn up from local government. The Government have already signified that they intend to replace county structure plans with regional spatial strategies. The term "generally" allows scope for more responsibilities to be removed from local authorities. The Minister said that they would not be, but that does not reassure us about what is happening to planning. Voters must know what they are supporting before they enter the polling booth.

The weight of such constitutional reform rests solely on the shoulders of the Secretary of State. He will be the one to choose which regions should hold referendums. He will be tasked with interpreting the results of the "advisory" polls. It will be the Secretary of State who will ultimately decide whether a region should embark on the regional assembly route. A doubting Secretary of State will not even be able to turn to legislation for clarification or resolve.

The Bill sets no thresholds for voter turnout. It does not even state that a majority of those who vote in a referendum should vote in favour of elected regional assemblies for the result to stand.

The principles of devolution are laudable. Decisions should be taken as close to the people whom they affect as possible. We need to revive public interest in local democracy. It is because we are in favour of devolution that we oppose the proposals. Regional government will win public support only if it meets people's expectations. If we are to have regions, let them be meaningful with a natural identity. We should unshackle regional devolution from proposals to reorganise local government.

If there are any advantages of regional government, they must be weighed up against the costs, in both financial and democratic terms. We must ensure that any potential regional government is about getting real devolution, not centralisation in disguise. I have considerable reservations about the whole Bill.

5.29 p.m.

Lord Stoddart of Swindon: My Lords, is it not remarkable that in 1888 the Victorians passed the Local Government Act, which served this country well for 86 years until 1974, when that infamous Act virtually destroyed everything that the Victorians had done? In contrast, in the 1980s, we fiddled around trying to put right the 1974 Act. We did not succeed,

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and then, in the 1990s, we reformed local government again. Apparently, that has not been a success either, and we have now reached the Regional Assemblies (Preparations) Bill. The Bill intends to regionalise a country which is governed according to the unitary process and has been governed thus successfully over a very long period of time.

I say, first, that I am an unreconstructed fan of local democracy and local government. Therefore, I consider the Bill to be a completely unnecessary piece of legislation. It is not really about devolution, as the Minister told us. Devolution and empowerment of local people is what I want, but the Bill will certainly not provide that. Let us make no mistake and let us not pretend: it will impose yet another expensive, wasteful layer of government on England to no good purpose—indeed, probably the reverse.

The reason for the "quangoisation" of England is the removal of powers from local government. If we want to deal with quangoisation, I suggest that we give back those powers and let local authorities get on with the job that they have done for hundreds of years. If we really believe in devolving power to the people, the power should be given to strong local authorities. They should be empowered to provide for their areas what their residents need and want.

As I have already said, there is a paramount need to return to local authorities powers which have been filched from them by successive central governments of both political parties. Indeed, it is also important to give them adequate financial resources to do their job. Those resources must include the power to raise their own money and not to be beholden to central government for most of their income. I believe that someone said that local authorities have to provide 7 per cent of their income. When I was leader of Reading County Borough Council, we provided 65 per cent from our own resources, and that gave us power to do for our area what we wanted to do, and to do it successfully and with the consent of the people of the area.

The business rate should be returned to local authorities. It is a disgrace that they ever lost it. They should also have power to raise a local income tax or a sales tax and be allocated a proportion of VAT revenues on sales of vehicle fuels in their area. Indeed, where it can be done profitably, they should also be able to provide consumer services for the benefit of their council tax payers. That is what I call devolution—not regional councils but real devolution to the people of the local areas.

As to the need to supply services or have economic co-operation over a wider geographical area, there is no reason why local authorities should not co-operate together to provide them—they have done so before. Such arrangements would be cheaper, more efficient and more acceptable than the construction of the proposed assemblies. Let us have no doubt: those assemblies are bound to move power away from the localities—it is inevitable that they will do so—and they will be less accessible and less transparent.

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To further assist local democracy, the Cabinet system should be discontinued. It has been an absolute disaster up and down the country. It has removed decision-making from most of the councillors and has killed local discussion and local democracy. Therefore, having shown that it has failed, it is about time to drop that system and drop it quickly.

I appreciate that in some parts of the country local councils have been bamboozled into believing that elected regional assemblies will complement local government and not compete with it and that the regional authority will somehow attract new business to the area. Both propositions are open to considerable doubt. If the regional assemblies are to function in any significant way over the whole region, they will have to have the power to override the will of the local authorities; otherwise, they will be no good. Where they believe that they do not have that power, they will seek it, and probably—because they will be stronger than the local authorities—they will get it.

The regions are so large and widespread that there is unlikely to be identity of interest and purpose between the localities within it. Far from bringing people together, they will cause only conflict and discontent. So far as concerns economic development, industry and jobs, there is no evidence that regional authorities will assist the process of attracting or reallocating national or, indeed, international resources to any particular area, especially to regions which are already disadvantaged. What is more likely to happen is that we shall have elected regional assemblies which will be in competition with each other. The probability is that the rich regions will get richer at the expense of the poor ones.

In the North East, the real problem, as the noble Lord, Lord Dixon, pointed out, is that they are deprived of that 1.2 billion which goes to the Scots and to the Welsh. If they had that, I would guess that the call for regional government would quickly die away. The imposition of regional government will be a recipe for conflict and confrontation. Therefore, I am opposed to it.

But, of course, English local government is not the only consideration in this drive for elected regional assemblies, there is also a European element.

The noble Lord, Lord Bowness, reads the Sunday Telegraph and Christopher Booker's column. I recommend that everyone should. Indeed, if everyone did, they would be much better informed about what happens in the European Union and where it is going.

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