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Lord Bassam of Brighton: As the noble Lord said, Amendment No. 57 relates to Clause 13(8). It relates to the ability of a lender, where interest is overdue, to ask the court to appoint a receiver to oversee debts and secure the revenues.

Clause 13(8) provides that lenders may not apply to the courts for assistance unless the sum owed to them is at least 10,000. Amendment No. 57 proposes to increase that figure to 50,000.

The present threshold, set in 1989 by the previous administration, is 5,000, so we are already making an increase, very roughly to reflect inflation. But the figure needs to remain low for the reassurance of lenders. As I said when responding to Amendment No. 56, any weakening of protection to lenders could make it more difficult or more expensive for local authorities to borrow. They might even try to borrow to invest in the art market. We would not wish matters to go awry in South Essex in that respect.

Even so, it seems sensible to keep this threshold figure under review. Clause 13(9) allows us to do that and to vary the figure by order, if we considered that was necessary. But Amendment No. 58 would remove

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that power. As I have said, we think that the figure in the Bill—given what has happened since 1989 in terms of inflation—is about right. However, we believe that we ought to have flexibility for the future. That is reflected in the wording of Clause 13(9). The Delegated Powers and Regulatory Reform Committee, which reported on the Bill recently, was entirely happy with the procedure that we set in place. I say to the noble Lord that it would not be our intention to lower that threshold. We cannot see any immediate circumstances in which we would want to do that. It is more than likely that the threshold would need to rise with inflation.

5.15 p.m.

Lord Hanningfield: For the record, will the Minister confirm that the purpose of the Secretary of State's power is not to lower the threshold but to raise it with inflation as the years go by? Will the Minister clarify that for the record?

Lord Bassam of Brighton: I think that that is what I said. The threshold would need to rise from time to time to reflect movements in inflation.

Lord Hanningfield: I thank the Minister for those comments. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 58 not moved.]

Clause 13 agreed to.

Clause 14 [Information]:

On Question, Whether Clause 14 shall stand part of the Bill?

Lord Hanningfield: I oppose the Question that Clause 14 stand part of the Bill.

We should like to take this opportunity to question the Minister about the kinds of information the Secretary of State intends to request from local authorities under this clause and how this information will be used.

Although we accept the need for an ongoing dialogue between local authorities and central government, we should like some assurance that the Secretary of State does not intend to use this power to intervene unnecessarily in local authority affairs.

Can the Minister also assure us that that will not add significantly to the workload of local authorities—we shall return to that point on another amendment—and that the range of performance indicators, data and statutory returns already submitted on a regular basis to the Government will not be duplicated in this information?

I speak with feeling on the matter having recently exchanged a considerable amount of information and letters with the Secretary of State for Education. I felt rather bruised and hurt by the Secretary of State's treatment of local authorities. I strongly oppose the Question that Clause 14 stand part of the Bill. I should like the Minister to confirm that the dialogue with local authorities will be conducted in a fair and just

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manner and that information will not be sought in such a way as unduly to increase the workload of local authorities.

Baroness Maddock: When this clause was discussed in another place there was a considerable amount of political knockabout—some of it concerned the clause but some did not—which reminded me of my early days in another place. I could never get used to the fact that we spent so much time saying how pleased we were to serve on committees with certain people and recounting our connections with those people outside politics.

When the clause was debated in another place my honourable friend the Member for Kingston discussed at length what it was reasonable for the Government to require under the terms of the clause and how much that would cost. The Conservative Members tried to persuade him not to press his amendments to a Division and the clause was agreed. Indeed, the honourable Member for Cotswold, Mr Clifton-Brown, said that the concept of reasonableness would have to be taken into account from a legal point of view. Perhaps I am being a little disingenuous in introducing a political knockabout point into the Committee, but I was surprised at the line taken by the Conservatives in another place.

Lord Smith of Leigh: Will my noble friend confirm that this is one of the freedoms which excellent authorities might have—namely, not to submit these returns—bearing in mind my interest as a leader of an excellent authority?

Lord Bassam of Brighton: I am surrounded by excellence in the Committee. We are all local government friends from times past—or at least I think that we are.

I hope that I can offer some words of comfort and reassurance on Clause 14. It requires local authorities to provide the information that is needed to implement the new capital finance system. That much is clear. There is an information requirement at present. That has been in existence for some time.

When I was a local authority leader I used to complain bitterly when the government wanted yet more information before they would accept a reasonable case that we had made. I also used to complain that the government did not ask for particular bits of information which would have proved that we needed to have extra resources for whatever project we were trying to plan. Those of us involved in local government always wanted to have it both ways.

We are trying to put in place a sensible system, to ensure that the information requirements are reasonable—to use a term that was used earlier—and that the requirements are no more onerous than they are at present. We are also trying to do our best in central government to simplify the information needs so that we do get the matter right. Obviously, there needs to be dialogue on these matters from time to

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time. The LGA is very good at making its case. We have discussed the matter with the LGA and with CIPFA. They have shared their views with us. So it is not just a case of central government imposing arbitrarily a need for information that we have dreamt up. We have worked it out with those parties that have worked closely with us to ensure that we request necessary data.

Some of the information sought for the new regime will be different because it is a new regime. Therefore, there will be new information requirements. I understand that we shall ask authorities to notify us of the affordable borrowing limit they have set at the start of the year. That ties in with Clause 3(1). That will be one of the factors we take into account in deciding whether a national borrowing limit needs to be imposed in any one year under Clause 4(1).

We do not wish to impose more onerous requirements. We want to keep the matter as simple as we can. The principle on which the clause is based draws on the history of controls in the area of the capital finance system. Therefore, the clause is not—and I hope will not be seen as—something which is new and burdensome for the sake of it. It will be reviewed from time to time and we shall take into account the views of CIPFA, the LGA and those other bodies that work with local government to ensure that regimes are sensible and practical in their workings.

Lord Hanningfield: I thank the Minister for that explanation. I still consider that the Secretary of State has a strong power under the clause.

Lord Bassam of Brighton: What is it specifically in the clause that the noble Lord objects to? What is it that the noble Lord thinks places additional onerous burdens on local authorities? It would be helpful to know that.

Lord Hanningfield: Clause 14 refers to a local authority supplying the Secretary of State with information,


    "at such time, as he may request".

That is a very general power for the Secretary of State to have. As I said, we totally accept that information should be supplied.

Lord Bassam of Brighton: Does the noble Lord also accept that that wording is common throughout the language of local government finance and has been in existence for many years? I am sure that he is familiar with it from the time when his party was in government.

Lord Hanningfield: I accept that the wording is familiar but I do not consider that it is necessary to include it in the clause. I hear what the Minister says. This is a matter on which we shall want to reflect. We may return to the clause at a later stage.

Clause 14 agreed to.

Clause 15 [Guidance]:

Lord Hanningfield moved Amendment No. 59:


    Page 7, line 5, leave out paragraph (a).

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The noble Lord said: In moving Amendment No. 59, I wish to speak also to Amendment No. 60.

We welcome the Government's intention to support local authorities by issuing guidance on prudent financial management where necessary. This amendment would ensure that any such guidance is scrutinised by Parliament in the appropriate manner. This is a theme that runs through several amendments.

The Government have promoted the prudential regime as extending considerable and extensive new freedoms to local authorities. We hope that that will occur. Much of the practical working of the regime is not covered in the Bill and will become clear only once we have seen the regulations. The regulations are where many of the key elements will be determined. It is, therefore, of the utmost importance that Parliament has the opportunity to scrutinise the regulations. I beg to move.


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