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Earl Russell: My Lords, has the noble Lord, Lord Hanningfield, discovered that for the Treasury the proposition that a sum of money is sufficient for the purpose for which it is voted is always a tautology?

Lord Hanningfield: My Lords, we note the comments of the noble Earl, Lord Russell.

A democratically elected body that is responsible to local people must take the level of council tax into account. That demonstrates how far removed Ministers are from the day-to-day realities of real life, which those of us in local government still face, and the lack of respect that exists in some parts of government for genuine democratic accountability. Perhaps the Minister will comment on that.

Since 1997 this Government have introduced over 100 parliamentary Bills and over 2,000 sets of regulations that have a direct bearing on the operations, services and functions of local government. Never can there have been so much activity for so little reward. I am very pleased indeed that this Government are committed to deregulation. I cannot imagine how many Bills and regulations they might have passed if they were not.

8.20 p.m.

Lord Bassam of Brighton: My Lords, my noble friend Lord Rooker tells me that the noble Lord, Lord Hanningfield, has made possibly the longest speech in tonight's debate. As noble Lords know, the noble Lord, Lord Rooker, has an enviable reputation for brevity and being bold and to the point. So my task is to try and ensure that I take no longer than the noble Lord, Lord Hanningfield. I am sure that noble Lords will be delighted to hear that. However, I am set a very difficult task. I have some 50 sheets of notes and associated points of detail on which questions have been asked. I am unlikely to go through those. If I did there would be some rather depressed souls in your Lordships' Chamber.

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However, one thing about today's debate which particularly pleases me has been the breadth of contributions from all sides of the House and the great interest in the very many different aspects of what is a wide-ranging Bill. I think that is a commonly agreed point. Important differences have been expressed during the course of the debate. In particular, I suppose that the noble Lord, Lord Hanningfield, was the gloom and doom merchant from the Opposition Benches, but then I would expect that. He made a speech which sounded terribly similar to a speech I made in the Brighton council chamber some 20 years ago when I was arguing fiercely against the ghastly financial constraints that were then being placed on us by the noble Lord, Lord Jenkin of Roding. Recently, I unearthed a press release which was attached to my speech at the time. There are many ironies in your Lordships' Chamber, but that was one that I particularly enjoyed.

I also enjoyed, for very different reasons, the tease from the noble Lord, Lord Alli, in threatening to go through the great minutiae and detail of the Bill. Sadly, I have to do that job, and it gives me great pleasure because for 20 years and more of my life I have been involved in local government and I have enjoyed it greatly, for it is a very beautiful thing.

As I said, the debate has been very wide-ranging. There is no way in which I can cover all the points raised, but many issues have been raised which deserve an answer. We shall write to noble Lords about any points I do not cover and ensure that an explanation is given. We shall have an opportunity in Committee to pick up very many of those issues in considered detail.

Most emphasis was placed on the desire of all of us to reduce red tape and the burdens placed on local government. I think we all share that common commitment. In welcoming the Bill, the noble Baroness, Lady Hanham, seized on that point, as did the noble Baronesses, Lady Hamwee and Lady Maddock, and I believe they welcomed it. The noble Lord, Lord Shutt of Greetland, was rather more questioning as to whether he thought a new golden era was about to dawn. Nevertheless, he welcomed the Bill too. That shows that we are heading generally in the right direction. After all, I am sure many Members of your Lordships' House would agree that there have been many years when perhaps there has been too much of the heavy hand of central government disposed towards local authorities.

We believe that we are reversing that process. We are proud to be associated with that. There are times when it is absolutely right that the centre should take a firm hold. But we also believe strongly in devolution. I believe that the Bill, with its many deregulatory moves, particularly in the field of finance, is right to move in that general direction.

We have also had an interesting debate on Section 28. I suppose that the most discordant voice on that came, as one would expect, from the noble Baroness, Lady Blatch, who speaks with great passion, even if one does not always agree with her on the subject. I shall resist the temptation to retreat to the fiefdom of

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Brighton and Hove and make responsive references to the point she made on that except to say that my children go to local schools. If she was trying to scare me about sex education in the borough in which I live I am afraid she failed. So far as I can see, sex education in the local authority whose services I enjoy seems on the whole to be very well conducted indeed, as it is in most others.

This debate is not about protecting our children in the terms that the noble Baroness has attempted to set out. Repealing Section 28 is important. It is not just totemic. Many noble Lords said that it was symbolic. In 1988, when it was passed into law, many of us in local government felt a great sense of shame that the government of the day decided to visit it upon us. Representing, as I did then, a local authority with a large lesbian and gay community, I was particularly affected by it. It made running services across the board, particularly for those from that community, difficult indeed. They treated us with a great deal more suspicion than perhaps was right and proper. It made our lives very difficult and it painted local government in a way that was not helpful. I am proud that we are associated with repealing that clause. We need to persuade this House of that. It is long overdue.

I shall go through some of the questions raised on specific points and I shall deal with the issues in turn. The noble Baroness, Lady Hanham, asked some important questions about the prudential borrowing regime. The prudential borrowing system gives authorities freedom to borrow without government consent if they can afford to service the debt without extra government support. We shall continue to support the major part of local authorities' borrowing programmes and shortly we shall consult on future arrangements for that support. In our view the prudential system will allow extra self-financing investment on top of whatever we, as the Government, support.

The noble Baroness also asked whether we would be able to make draft regulations available on the business rates retention and on the growth incentive element of that. We intend to consult—a strong theme of this piece of legislation—all interested parties on many details of the proposed scheme. We cannot make draft regulations available until that consultation has been completed in the autumn. However, I can give the noble Baroness an assurance that we shall produce a detailed memorandum on our objectives for the scheme for consideration by your Lordships' House.

I have dealt with Part 8—the noble Baroness, Lady Hanham, like others, raised that important concern. We shall have the opportunity for greater debate in Committee.

The noble Baroness raised the issue of small business rate relief, which has been broadly welcomed. We take the view that a balance has to be struck between the small businesses receiving the relief and the larger businesses paying for relief by a supplement on the non-domestic rating multiplier. Under the current scheme the rate bills of larger businesses need to be increased only by less than 2.5 per cent. That

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would necessarily increase if the threshold of businesses receiving the relief increased. That is a very important consideration. No doubt the noble Baroness will wish to raise those issues when putting forward her own proposition in an amendment.

She also asked a couple of interesting questions on smaller matters. She asked whether it is our intention to raise a new tax on recycling. No, we have no intention of doing that. She asked about body piercing—we have had a wide-ranging debate extending from body piercing to council tax relief. She asked whether we would bring forward an amendment to licence body-piercing establishments. It is important that issues relating to that are addressed in a collective way. Our intention is that there should be further discussion with colleagues to try to achieve the best way forward on that. Parliamentary time may not allow such a measure to be put into the Bill, but we appreciate the point that she raised.

The noble Baroness also raised a key issue—one that the noble Lord, Lord Jenkin of Roding, also raised—about the involvement of local people in the BIDs process and whether we intended to put that on the face of the Bill. We recognise the importance of support for all local stakeholders in that area. We recognise that that will be vital to the success of BIDs. It is important that local communities are consulted. We question whether the mechanism suggested by the noble Lord is right. However, we look forward to further debate on those issues in Committee and to hearing other noble Lords' contributions. BIDs is an important initiative which the Government strongly support and one that I supported from a local government perspective before we came to government.

I recognise that there is concern about pooled capital receipts. Council housing is, of course, a local asset, locally managed, and so on. But it is also a national asset and the benefits, accrued receipts, and so on, need to be considered in a broader national context. Of course, concerns will be expressed locally about the change but we believe that as a redistributive mechanism it is an entirely fair way to proceed.

The noble Baroness, Lady Hanham, and a number of noble Lords raised the issue of council tax bands. She asked whether we agreed that there should be new bands and to consider the relative balance between poor and rich in housing. She asked whether it was a new property wealth tax. As we made clear in our White Paper, we shall listen to local government and taxpayers ahead of revaluation. As the noble Baroness will appreciate, the White Paper recognised that making the tax more progressive—for example, by changing the ratios—could have a regressive impact. We have to take careful account of that.

The noble Baroness, Lady Hamwee, asked whether changes to banding would be robust enough, regardless of house prices. We cannot foresee the property market in 2005, or how it will change by 2007 when the new bands will be implemented. But we shall take every sensible step to ensure that the banding scheme is robust to reflect those changes.

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We are grateful to the noble Baroness, Lady Gale, for raising an important issue. She asked whether Welsh local authorities could have the same flexibility as that proposed in Clause 76 for English local authorities on removing or reducing council tax discounts. The matter has been raised with my right honourable friend the Minister for Local Government by the National Assembly for Wales. It is an issue that we shall consider. I give an undertaking today to come back to your Lordships' House at a later stage of the Bill with a decision on whether or not we shall be able to amend the Bill to achieve that objective.

We recognise the important issue raised by the noble Lord, Lord Sawyer, on the transfer of staff. We want to offer assurances to those who may be affected by such changes in the future. I am happy to confirm to the noble Lord that we shall ensure that the provisions covering contracting-out exercises will include the same protection for staff as enjoyed by those in central government and its agencies. They will ensure that if authorities select private or voluntary sector providers, it will be on the basis of their ability to deliver high quality services, not by cutting costs or driving down staff terms and conditions and pensions. I can give that assurance. The Government will be more than happy to continue to have dialogue with the trades unions affected which may have some other outstanding concerns.

I conclude by reiterating that, despite the complex and detailed issues in the Bill, the Bill should be broadly welcomed today not only by your Lordships' House but local government generally. Indeed, the Local Government Association has given the Bill its blessing. In a recent release, I think it said that it believes that the proposals in the Bill represent significant new freedoms for local councils and will help them deliver improved services to their communities. If I were still a local government leader, I should certainly subscribe to that as a commentary. It is also promising that the Confederation of British Industry has put on record its welcome for many aspects of the Bill.

I have enjoyed this afternoon's debate. I have listened with great interest to all that has been said. I apologise to noble Lords to whose questions I have not fully responded. I hope that the House will not just like the Bill but enthusiastically give it a deserved Second Reading. I commend the Bill to the House.

On Question, Bill read a second time.

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