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Earl Russell: My Lords, am I right in thinking that members of each House may freely attack each other on neutral ground, but they may not do that from behind the ramparts of the privilege of their own House?

Lord Greaves: My Lords, my understanding is that the Companion states that one can criticise members of the House of Commons, as long as it is done on factual matters, matters of issue and principle, and not as a personal attack. I hope that I am not in any way making a personal attack.

I am merely quoting what has been put out in a press statement by my party, and explaining why I find myself very troubled indeed not to be able to support what my party is saying on this issue. The press statement continues:

That is still the case and nothing has changed.

Finally, the press statement says that this,

    "significantly improves the chances of referendums on regional assemblies actually being won".

I do not think that the situation in the North West is any different. It will make it much more difficult in one important respect for any referendum in the North West to be won. There is already a united Conservative Party that will be campaigning against it. The Labour Party in the North West is already split, and will not be campaigning for the referendum in any united way. I had hoped that the Liberal Democrats would be. I have no doubt that the Liberal Democrats in the North West will be split down the middle on this proposal. There will be as many campaigning for a "No" vote as for a "Yes" vote. If there is going to be a referendum, the Government has to win—it is not there for the taking. I believe that the chances of a referendum being won are receding by the minute—certainly in the North West, which is the region that I know.

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If the Government hold a referendum in the North West, and they lose, they would set back regional government in our region for a long time. I regret that the amendments that are being moved by my noble friend Lady Hamwee, and later by the Minister, do nothing to help us—or them—to win a referendum in the North West. I now do not genuinely know what side I will be on in that referendum, which is again why I am sitting here and not on the Front Bench.

3.45 p.m.

Baroness Carnegy of Lour: My Lords, I have not spoken before on the Bill, but the issue has now been widened, far beyond the question of regional assemblies, to a constitutional issue. It is clear that the Liberal Democrats are now the little friends of Labour in England, as well as in Scotland. I am surprised to hear from the noble Lord, Lord Greaves, about what has happened. It is to his eternal credit that he has made quite plain what has been going on. It looked to me, when I received a letter from the Office of the Deputy Prime Minister to explain the Government's view, that there had been a murky deal between them and the Liberal Democrats behind closed doors. However, the noble Lord has explained more to us.

It is an enormous matter to suggest that people in a referendum should change their local government arrangements, linked to an assembly decision, without conceivably having enough information to know what they should do. When local government became single tier in Scotland in preparation for the Scottish Parliament, it was done openly through primary legislation in a separate Bill. People knew the ins and outs of what was happening. It was not subject to a referendum.

This is a completely different way of approaching the issue. To think that the county councils are likely to be abolished in that cause before local government elections, for purely political ends, is something that the public should be aware of.

Baroness Blatch: My Lords, I rise to support my noble friend Lady Hanham. I join her in saying that the noble Lord, Lord Greaves, has been very courageous and highly principled. One of the great strengths of this House is that when Members of this House feel strongly about something, and consider it a matter of principle, we have a reputation for always respecting individuals' consciences. Certainly we do in this instance. We are sad at the story that we have just heard from the noble Lord, Lord Greaves.

I rise briefly to ask what is at stake. We now know—and always did—that the Government's price for regional government was to have single tier government. There was much unease on both the Liberal Democrat Benches and ours when this was being discussed. It seemed to us that to ask one question, which then invited wholesale reorganisation of local government, was wrong. There is now a shabby compromise, where the second question on the ballot paper will be, "Which way do you want to die?" "Do you want regional government?" requiring a straightforward answer, "Yes" or "No". If you answer

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"Yes", then you will get a shabby compromise and you will have to say whether you want to die by hanging or by the electric chair. You are going to get single tier government whether you like it or not.

Make no mistake, that is what is at stake, both in Amendment No. 1 and certainly in Amendment No. 12. We believe that this is the death knell for county government for the following reasons. In practice, one can conceive of it being a less serious reorganisation for districts to absorb the functions of the counties, although it would be a major upheaval. We know that planning is being taken from the counties anyway, and we also know that transferring education to learning and skills councils is only a step away. All that would be left would be easily absorbed by the district councils.

It becomes a clear operation from the point of view of the Government. I say that because I have been listening to Labour politicians for a long time, and I know that their desire has been to see the end of county government. It is impossible to envisage the upheaval that would be caused in the unlikely event of counties becoming the regional single tier. County government has neither the reputation nor the functions and powers of district councils.

It would not just be a question of reorganising local government, there would be completely new kinds of county councils. They would not be the kind that we know at present. Instead of losing districts and having counties as single tier government, it would be much more likely in practice that one would lose the counties, and there would be single tier government at district level. Even at that level, many of the districts are too small to be unitary authorities. Local people would lose their district councils as they now know them, in favour of a considerable merging of district councils across the country. We know what a pain that would be. Whichever way one looks at it, local government will be moved further away from the people.

My final point is purely political, and I make no apologies for that. Let the Liberal Democrats go out around the country and explain to the people. We are still at the Report stage of the Bill; it has another stage to go before it goes to the Commons for them to consider what we have had to say. At this early stage of the Bill, to sell local government down the river is unforgivable. I hope that local people are listening to that message. They have handed the Government local government reorganisation on a plate and it will not receive our support.

Lord Brooke of Sutton Mandeville: My Lords, I shall be brief. At Second Reading I made allusion to various lessons that might be learnt from the past. The Minister was gracious enough to say that I was right. acknowledging that,

    "we should learn lessons from the past when we go in for such changes. In the forthcoming period and during the passage of the Bill, I hope that we will be able to show that we have done that".—[Official Report. 20/2/03; col. 1330.]

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If the consequence of these amendments is the disappearance of the county councils, it is for the Minister in responding to the debate to indicate in what way he has learnt from the past in that regard.

Lord Hanningfield: My Lords, I support what has been said by the noble Lord, Lord Greaves. Reorganisation of local government does not come lightly. In a large county with two tiers, 40,000 people might be employed. They will be conscious of their jobs and future. I went through local government reorganisation in the 1990s and in Committee the noble Lord, Lord Greaves, said that he remembered it in the 1970s. It takes a great deal of work and discussion. The concern is not only political; it exists among people working in local government who look after the elderly, run schools and provide other such services.

As a result of these proposals, during the next year there will be even more chaos as people increasingly fight over two, three or four options. The whole idea is crazy. I do not believe that people understand what local government reorganisation is like. It is vicious. Districts fight districts, and perhaps counties fight counties. We will have a year of such chaos.

It would have been much simpler to have allowed a question such as, "Do you want to retain your local government structure as it is?". We have heard the Minister say on several occasions that there must be two tiers or nothing. But regional government in other countries works well with three tiers. The Minister and the Government should rethink the whole issue.

The amendment makes the situation worse. It would cause more chaos, unease and unhappiness for staff. I could not oppose anything more in the Bill. The Bill was difficult before we began our deliberations; this proposal makes it much worse. It will cause chaos and heartache throughout the whole of local government.

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