Rt Hon Lord Lilley

    Mr. Peter Lilley (Hitchin and Harpenden) (Con):
    I draw the House’s attention to my declaration in the Register of Members’ Interests.

    It is a privilege to follow the hon. Member for Southampton, Test (Dr. Whitehead), and, indeed, a series of deeply thoughtful speeches, all of which expressed some concerns about whether the Bill will remedy the disparity between local authorities’ responsibilities and their accountability to the electorate, and whether it will accentuate rather than alleviate that division.

    I begin by considering a narrower issue and by taking it for granted that the Bill’s three key objectives-promoting local democracy, encouraging co-operation between local authorities and facilitating regional planning-are a good thing. I want to draw attention to a phenomenon, which, if the measure does not tackle it, could undermine all three objectives. It is the increasing exploitation of a little known loophole, which allows one council to meet its housing targets by building houses in another local authority’s area. That threatens the first objective, since local democracy cannot properly operate without local accountability. If one council can meet its Government targets at the expense of the interests of residents in another area, to whom it is not accountable electorally, that is the antithesis of local democracy.

    The loophole undermines the second objective-promoting co-operation through leaders’ boards and economic prosperity boards-because it is hard to envisage how local authorities will co-operate if one or more decide that they can meet their goals by invading their neighbours. That is a recipe for lack of co-operation rather than for facilitating it.

    The same is true of facilitating regional planning and meeting housing targets, which are regional planning’s principal objective, if, once those targets are sub-aggregated to individual regions, houses are not built in areas where local authorities were told that there was a need and a duty to build them, but in someone else’s area-possibly even outside the region.

    Colleagues may not know-I did not until comparatively recently-that it is legally possible for one council to try to meet its housing targets by seeking planning permission to build in another local authority area. They may think that, even if it is legally possible, it does not happen in practice.

    Kelvin Hopkins


    Mr. Lilley:
    I will certainly give way to the hon. Gentleman because his council is one of the guilty parties.

    Kelvin Hopkins:
    I understand precisely what the right hon. Gentleman is talking about in our locality. However, would it not be sensible when, for example, a large town needed to expand to accommodate its population, for the land to become part of the expanding authority-for a transfer of territory to take place from one authority to another? That seems the most sensible way forward.

    Mr. Lilley:
    That would mean even more ambitious plans to invade and take over local authorities.

    Mr. Garnier:
    I sympathise with my right hon. Friend’s point, even more so now that I have heard what the hon. Member for Luton, North (Kelvin Hopkins) has just said. My constituency goes up to the city boundary of Leicester, but Leicester city council would like to expand its authority into the suburban area of my largely rural constituency, in a borough called Oadby and Wigston. The city council does not want the area to build houses in, but it would like to get hold of its council tax base.

    Mr. Lilley:
    That would probably add to the incentive. I have enormous admiration for the hon. Member for Luton, North (Kelvin Hopkins), but we need to think hard about the consequences of what he has suggested. If an authority was told by the Government, rightly or wrongly, through their regional planning policy, that it needed to build a certain number of houses in its area and if the neighbouring authority needed to build another number of houses in its area, it would be wrong for the first authority to be able to say, “Well, we’ll build that number of houses, but not in our area. We’ll build them in someone else’s.” Wherever the borders ought to lie, such matters should be decided quite separately.

    As will become obvious to you, Mr. Deputy Speaker, a recent example of the problem is that the local authorities in Luton and South Bedfordshire decided to try to meet their housing targets by making an area in the neighbouring district of North Hertfordshire one of their preferred locations for house building. The area that Luton and South Bedfordshire have chosen was not included in the original Milton Keynes and south midlands spatial strategy, so no one in North Herts was consulted while the strategy was going through. The area in question was not even one of Luton and South Bedfordshire’s preferred options when they were considering how to meet that broad strategy, once it had been decided. It was only when it suddenly dawned on local councillors in Luton and South Bedfordshire that there would be some opposition-there is always some opposition-to building where they had originally thought it would be sensible and right to build and that they could avoid that opposition, in electoral terms, by transferring their ambitions to a neighbouring area that they went ahead with the proposal.

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    Luton and South Bedfordshire have selected the area of Lilley Bottom, as it is known, near the eponymous village of Lilley in my constituency. Not many hon. Members have villages in their constituencies that are named after them, still less parts of their anatomies, or after which they are named, but there we are. The area is a particularly beautiful part of my constituency and probably one of the most attractive valleys in the constituency, which makes it even more abhorrent to those who live there that it has been seized upon in this way. The area provides a vital resource, at least to the inhabitants of Luton, South, who have a beautiful area of countryside on their boundaries, which they greatly want and, by and large, want to keep. Should the plan go ahead, there would be a double loss, for the inhabitants of both North Herts and Luton.

    It is not only that area that is affected, however. There is another area where a neighbouring local authority is planning to build, in St. Albans, in the southern part of my constituency, although that plan has recently been stopped. My point is that although the problem may not be common throughout the country, if we do not stop it, we will open the floodgates. There will not be a council in the country with housing pressures in its area that will not think, “How much more preferable to seek planning permission in another area.” I do not know whether there is even any limit on councils choosing areas in entirely different parts of the country. Could the inhabitants of Kent seek to meet their housing targets by building in Northumbria? As the law is currently phrased, I think they could. That is an absurdity. We should take the opportunity provided by this Bill to close that loophole and ensure that local authorities try to meet their targets in their areas and for their constituents, to whom they are responsible.

    Kelvin Hopkins:
    I thank the right hon. Gentleman for giving way again. The problem arises where there is no possibility of accommodating those who need housing within the boundaries of the authority in question, which is certainly the situation in Luton. Perhaps 1,000 more houses might be built in in-fill, but we need much more than that, with 8,500 people on the housing transfer and waiting list. The problem is uncomfortable, but it has arisen from necessity, not perversity.

    Mr. Lilley:
    I hate to tell the hon. Gentleman about his own constituency, but his constituents-his councillors-first identified sites in various parts of Luton and neighbouring areas that were sufficient for housing targets. In my view those areas are quite sensible places to build, but it is up to those councillors. It was only when there was a degree of opposition from some locals in those areas that the councillors thought, “Let’s put the houses in someone else’s area where it doesn’t matter if there’s opposition, because they can’t vote against us as they’re not in our constituency.” There are plenty of areas in the Milton Keynes-to-Luton region, which is what the target covers, where building could be undertaken, without going into another county.

    There has recently been a welcome High Court decision that, at first sight, has a bearing on the issue. Hertfordshire county council and St. Albans district council took the eastern area regional plan to the High Court and won,

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    which is the first time that a regional housing plan has, to a degree, been overturned by the High Court. The decision affected both the proposal for Dacorum to spread beyond its boundaries into land owned by St. Albans-the land is the other side of the motorway, so most people do not realise that it is owned by St. Albans-and building work in Welwyn and Hatfield. Knowing that I was going to raise the issue today, my local newspaper, the Herts Advertiser, made the helpful suggestion that we could rely on the court case to achieve what I want to achieve through parliamentary measures. Unfortunately, my understanding is that we cannot do so, although I look forward to a response from the Minister if I am wrong and if the case has indeed solved the problem.

    My understanding is that the court said that the east of England plan was wrong because of a failure to carry out a proper strategic environmental assessment of urbanising the belt between Dacorum, St. Albans and Welwyn and Hatfield and the fact that they would begin to merge into each other if building took place. The decision was not based on a rejection of the right of one council to build outside its own area. I therefore hope that, in summing up, the Minister will correct me if I am wrong. Indeed, I would be delighted if I were wrong and if the case means that the threat from Luton and South Bedfordshire in North Hertfordshire has disappeared.

    I hope that the Bill will be amended to close that loophole; otherwise, the Bill’s very objectives will be threatened. I am concerned that it has emerged that the Committee stage of the Bill will be so brief as to inhibit the time to amend it appropriately and close that loophole. I know that the Minister cannot give me a commitment to table specific amendments today, but I would ask him to give a commitment in summing up at least to give serious consideration to introducing an appropriate amendment in Committee. Unless he does so speedily, the opportunity for the House to do its job and amend the Bill to improve it will be lost. I hope very much to hear from the Minister at the end of this debate that he will do that.

    I shall briefly make some broader points. The Bill purports to promote local democracy. How does it do that? It does so by telling local authorities what they must do and how they must do it, and then monitoring them and sanctioning them if they do not do it. What is the cost? What are the resources? What is the time frame? How many extra officials will need to be employed to ensure that authorities are meeting the 3,000 words of obligations imposed on them? What resources will be made available from central Government to enable those officials to do those things? If they are already doing them, no extra resources will be required, but then no extra legislation will be needed. The presumption must be that many officials are not doing those things and that extra resources will therefore be required.

    At a time of economic crisis, the one thing we ought not to be doing is adding to the enormous deficit that this country faces, which exceeds the entire budget of the Department, as well as the budgets of the defence system and the education system. I cannot believe that we are going to add to it, albeit in small ways, by imposing extra obligations, which will require extra resources, on local authorities. This is a sign that the Government have no idea of the scale of the crisis that

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    we face, not just this year but for years to come. If we are to bring total public expenditure back into line with the taxable resources of this country, why are they seeking to place on local government additional costly obligations that no one in the Chamber has so far suggested are necessary? Nor have I heard any call from outside the Chamber for these duties to promote this, that and the other.

    The second thing that the Bill does is to promote local government by transferring power away from elected and partly elected bodies. It moves power from regional bodies-which are pretty bad, but at least they contain some indirectly elected members-to leaders’ boards. We are not told what the composition of the leaders’ boards will be. The presumption is that they will consist of the leaders of the local authorities, although that is not spelled out in the Bill. They could consist of the chief executives of the local authorities-or their wives and girlfriends, or husbands and boyfriends. The composition is not spelled out; we are simply told that a board will be established and that it will be called a leaders’ board. One thing that we know is that people will not be directly elected to the leaders’ boards. The boards will have a constitution and duties imposed on them by the Government. In practice, they will be supervised and monitored by the Government, and they will be dissolved if the Government do not like them. This seems to be going in exactly the wrong direction.

    I would like a Bill that genuinely lived up to its title, and that promoted local democracy, economic development and the construction of houses in the right places, but I fear this Bill will not do that. Unless it is modified, it will be undermined by the growing exploitation of a loophole that threatens all its key objectives. It promotes additional burdens on local authorities-and, ultimately, on the local taxpayer-for which there is no demand and no need, and it removes power from the people to central Government and to unelected bodies in a wholly undesirable way, for which the House has so far shown no support.