§ The Secretary of State for Transport (Mr. Nicholas Ridley)With permission, Mr. Speaker, I shall make a statement about the recent court judgment concerning the payment of grants to London Regional Transport by the Greater London council.
The Government took over responsibility for London Regional Transport on 29 June 1984, part way through the present financial year. Before we took over, the GLC had budgeted and precepted to pay grants to London Transport for the whole of 1984–85. Parliament therefore granted powers in section 49 of the London Regional Transport Act for the GLC to be directed to continue paying grants to LRT until the end of March 1985.
Accordingly, I made a direction on 29 June 1984, on the facts known to me at that time, requiring the GLC to pay a total of £281.3 million in grants to LRT in instalments up to the end of this financial year. The main factors which I had in mind in determining this figure included the GLC's decisions about revenue and capital grants to London Transport for 1984–85; LRT's financial needs for the remainder of the year, as assessed at that time; and the GLC's decision that LT should lease £27 million of assets, which imposed future liabilities on LRT. This was in accordance with the Government's intentions, as I made clear during the passage of the legislation.
The House will be aware that the direction was subsequently challenged by the GLC, and has recently been quashed by the High Court. It is clear from the judgment that the court took a different view of the way in which the powers under section 49 of the London Regional Transport Act should be exercised from that which I told Parliament the Government intended in taking the powers in the first place.
The effect of the judgment would be to reduce the money available to LRT by over £50 million at a very late stage in the financial year. A corresponding amount would accrue to the GLC. The Government regard this as contrary to the interests of ratepayers and LRT's passengers.
After studying the terms of the judgment, I have concluded that any new direction which could be made under the existing legislation either would not accomplish what was originally intended or would be vulnerable to further legal challenge, thus failing to resolve the damaging uncertainty which now exists over LRT's financial position for 1984–85 and beyond. Nor am I confident that an appeal would satisfactorily resolve the problems over the interpretation of section 49 which the judgment has brought to light.
In the circumstances, the Government consider that the matter can be settled only by the authority of Parliament. I shall shortly introduce new legislation to enable Parliament to determine once and for all the amount of grant to be paid to LRT by the GLC in 1984–85, and thereby ensure that the original purpose of section 49 of the London Regional Transport Act is carried out.
§ Mr. Peter Snape (West Bromwich, East)Is the right hon. Gentleman aware that his proposal to use Parliament to avoid compliance with a High Court judgment is a constitutional outrage, that any such attempt to legislate will be strenuously and rigorously opposed by all those 167 Members of the Opposition who happen to believe in the rule of law, that any Labour Minister who behaved in the same cavalier manner as the right hon. Gentleman would be pilloried, if not torn to pieces, by the whole of Fleet street and that any principal holder of ministerial office, after being condemned of illegality by a High Court judge, after telling blatant untruths in this House and after swindling the ratepayers of Greater London of about £50 million, ought formally to apologise to the House and tender his resignation?
The fact that the right hon. Gentleman, with typical bluff and bluster, proposes to act in the way that he has outlined in his statement means that he intends to use the Government's majority to force through retrospective legislation in order to flout the verdict of a court, to condone his own improper and illegal behaviour, to defy the traditions of this House and to earn the contempt and derision of all true democrats, who deplore his shameless arrogance and political chicanery. If the right hon. Gentleman had a shred of decency he would not be bothering the House with this appalling statement; he would have the courtesy to tender his resignation.
§ Mr. RidleyThe hon. Member for West Bromwich, East (Mr. Snape) has rather overreacted. It is clear that the court took a different view of the way in which the powers under section 49 of the Act should be exercised from that which the Government intended when taking the powers in the first place. When I told Parliament what section 49 meant, I really believed it to be true. If that was not the case, I should be misleading the House if I did not seek to put section 49 right so that it does mean what I said it meant.
§ Mr. John Maples (Lewisham, West)Does my right hon. Friend agree that it was made abundantly clear during the discussion of this clause in Committee that the unspent balance of moneys raised from the Government and from ratepayers for subsidising London's bus and tube services was to be paid over to LRT? That general principle was in no way dissented from at the time by any member of the Opposition. It would be an outrage to the ratepayers of London if the money raised from them for that purpose were to be applied by the GLC for any other purpose.
§ Mr. RidleyMy hon. Friend is quite right. I made the intentions of the Government quite clear. The fact that what I told Parliament does not appear to have been reflected in the court's interpretation of the legislation means—
§ Mr. RidleyNo, it does not mean that they were wrong. I said that the legislation does not mean what I told Parliament it did mean. Therefore, it is perfectly proper for me to put that error right in the way that I have suggested. May I underline my hon. Friend's perfectly reasonable statement that money taken from the ratepayers and passengers of London for the purpose of transport in London should be used for that purpose and not for any other. That is all that the Government seek to do.
§ Mr. Tony Banks (Newham, North-West)The Secretary of State has clearly revealed his total 168 incompetence. He does not even understand his own legislation. Will he tell the House what is the true figure? Is it £50 million, £60 million or £73 million?
§ Mr. RidleyThe exact figure will be in the Bill. The time to discuss the precise way in which it is computed will be when we reach the legislation. When announcing the intention to legislate it is not the normal practice to discuss the details of a Bill, let alone complicated figures which will involve fairly complex argument, in order to explain to the hon. Member for Newham, North-West (Mr. Banks) what they mean.
§ Mr. Tim Eggar (Enfield, North)Ratepayers in Enfield and elsewhere in Greater London paid rates on the understanding that they would be used for subsidising London Transport. Would it not be quite outrageous if the result of the interpretation of an Act, which was quite clearly expressed by my right hon. Friend, was that money could be spent by the Greater London council subsidising the women's committee, the police committee and other outrageous purposes for which the GLC tends to spend ratepayers' money?
§ Mr. RidleyMy hon. Friend is quite right. I find it extraordinay that the Opposition should seriously resist his proposition that money taken from his and other hon. Members' constituents who are London ratepayers should be used for a totally separate pupose from that for which it was raised.
§ Mr. Richard Tracey (Surbiton)Despite the huffing and puffing of Opposition Members, my right hon. Friend should be aware that the ratepayers of London welcome the action that he is to take. It is perfectly in line with the Government's intentions, as expressed on the Floor of the House and in Committee. Does my hon. Friend agree that this is just a last gasp attempt by this moribund GLC, before abolition, to frustrate the intention of the House and, indeed, that it is typical of the behaviour of the appointed members from the GLC on the LT board just before vesting day?
§ Mr. RidleyI agree entirely with my hon. Friend. It was because of the extraordinary behaviour of the members of the board just before vesting day that we had to make this direction in rather a hurry. The principle must not be overturned by what has happened. What I said to the House about the meaning of the section is what we have to do. We are talking about large sums of money. It would be quite improper for this money, which has been taken from the ratepayers for one purpose, to be used for another.
§ Mr. Simon Hughes (Southwark and Bermondsey)Does the Secretary of State recall that during the Committee stage of the London Regional Transport Bill he resisted an amendment which would have prevented this problem? Does he also recall that normally the attitude on the Conservative Benches is that decisions of the court produce not uncertainty but certainty, and that that is the place where such matters ought to be resolved? Does the right hon. Gentleman accept, if he did not do so before, that this is the best illustration of the fact that when Governments and Secretaries of State seek to interfere more and more in the affairs of local authorities and local services they do not know what they are doing, and that the best remedy is to do what we are trying to do in Committee upstairs in order to prevent any Secretary of 169 State from interfering in London affairs any more than happens at the moment? Will the Secretary of State please accept that we do not want any more of this kind of interference? He cannot get it right. He never has, and he never will.
§ Mr. RidleyI am not sure to which amendment in Committee the hon. Gentleman is referring, but many of those amendments would have failed to take the money that should have been taken from the GLC and apply it for the purpose for which it was precepted by that authority. We had every right to appeal against the judgment if we had wished to. In order to shorten the period of uncertainty, and, indeed, to remove uncertainty about the figures, it is obviously preferable that the appeal should take the form of legislation, so that certainty can be made clear. We cannot have this important matter subject to further legal challenge. I do not believe for one moment that the hon. Gentleman can sustain his argument that this is interfering with the GLC. The intentions of Parliament in an Act have proved not to be met by the way in which the legislation was drafted, and the only remedy is to put the legislation right.
§ Mr. Michael Shersby (Uxbridge)Is not the GLC effectively trying to prevent the ratepayers from benefiting from the investment that they made in LRT through the 1984–85 precept? Is that the situation that my right hon. Friend is describing?
§ Mr. RidleyThe sum of money is large—well over £50 million. If that sum is not paid over to LRT, fares will have to rise extremely high, further taxpayers' money will have to be provided or there will have to be an increase in the precept for next year in order to put right the gap which will appear in LRT's finances if we do nothing.
§ Mr. Nigel Spearing (Newham, South)Are not the perils of over-centralisation and the legislation related to it the real lesson of this sorry affair? Will the right hon. Gentleman use his excellent imagination to foresee the perils which await him if he persists with the legislation currently in Committee? Will he also agree that next year £69 million of ratepayers' money is to be paid for the GLC in respect of non-written-off debt? Will he take the opportunity in the forthcoming legislation to rectify that monstrous imposition on London's ratepayers?
§ Mr. RidleyI can see no conceivable way in which the issue of centralisation or devolution arises on the statement that I have just made. The statement arises out of a piece of legislation to which the House gave its assent last year. Nor do I see how it is possible for me to take into account any other matter concerning the GLC, because all that I am dealing with is the judgment, which is the subject of this statement.
§ Mr. Harry Greenway (Ealing, North)Will my right hon. Friend bear in mind that the GLC doubled fares and rates for Londoners in its first year of office and has since spent several million pounds on a completely spurious campaign, lying to pensioners and saying that they will lose their travel passes when the GLC is abolished, when the passes in question have since been guaranteed in law by the Government? Will my right hon. Friend guarantee that the GLC will not be allowed to get near London Transport, which it made such a mess of when it did?
§ Mr. RidleyI give my hon. Friend the guarantee for which he asks. It is a somewhat sad prospect to have to 170 go over the arguments of 1984 about the London Regional Transport Bill. That is what I regret about the need for this. All the fears, scares and rubbish that was talked at that time have been proved to be untrue. The only thing that has gone wrong is that the legislation needs amendment in the way that I have suggested.
§ Mr. Chris Smith (Islington, South and Finsbury)Does the Secretary of State expect the House to take his statement seriously? There is no damaging uncertainty at present; there is crystal clear certainty. The court has said clearly that the Government got it wrong, and the legislation is there to prove it. Will the right hon. Gentleman reflect on the fact that his statement has created extra uncertainty about the GLC's budget-making process for the forthcoming financial year? Does not his statement and the intended legislation make nonsense of the rate-capping legislation of his right hon. Friend the Secretary for the Environment and his attempts to set a rate limit for the GLC?
§ Mr. RidleyNo, Sir. There is at present in place no direction to the GLC, because the one that I made was quashed by the High Court. A new determination has to be made one way or another. Instead of making a new direction, I shall bring in a Bill which will have the amount of money named on the face of it.
§ Mr. RidleyI am sorry, I did not answer the hon. Gentleman's second point. I am in close touch with my right hon. Friend the Secretary of State for the Environment, and he is content with this legislation, which will be completely in accordance with what he is doing.
§ Mr. MarlowWhy is it that where there is a difference of opinion between the Government and a British court it is proper for the Government to bring before Parliament legislation favouring the Government's view rather than the court's view—I support that—yet when a European court disagrees with the Government it is impossible to bring forward legislation which the Government want, as we saw yesterday? Is it that Parliament can overrule British courts, but has no power when it comes to foreign courts?
§ Mr. RidleyMy hon. Friend tempts me on to ground on which it is beyond my competence to give him a full answer. I can tell him only that I believe that he is right to say that when a British court interprets an Act of Parliament in a way different from what Parliament was told, it is correct for Parliament to seek to use its sovereignty to change the law. There is a great difference between using sovereignty to change the law, and criticising the judiciary, which my hon. Friend will know is one thing that I have not done.
§ Mr. Jeremy Corbyn (Islington, North)Is not the Secretary of State proposing to indulge in a shabby little manoeuvre to condone his robbery of money from the GLC and the people of London? Is not his proposal, in the Bill that he will put through, yet another example of the dangers of centralising local government around people such as himself who do not even represent London constituencies and who have no understanding of the needs or operations of London Transport? Will not the proposals that he intends to bring forward create further chaos and confusion, which he will then use to blame the GLC, through his friends in the press?
§ Mr. RidleyI cannot accept the implication of the hon. Gentleman's words, that the money belongs to the GLC. The GLC precepted the ratepayers of London for the express and explicit purpose of passing the money on to LRT. How it can then be said that because it rated the money it should not give it to LRT baffles me. The hon. Gentleman has not told us what he thinks the £50 million plus, the windfall to the GLC if the Government did not take this action, would and should be spent on. He seems to think that further burdens should be put upon the ratepayers to make good the shortfall and that the GLC should be left with a surplus which it could spend on anything that it liked.
§ Mr. Harry Cohen (Leyton)Has not the court's decision shown that the Secretary of State is a law-breaker in this matter, and has not his statement today shown that he thinks he is above the law, even his own law? Is not the taking of the vendetta against the GLC into new retrospective legislation a constitutional disgrace? Has he not shown his incompetence and should he not now give the GLC back the money that he has robbed from it so that it can be used for the benefit of London ratepayers?
§ Mr. RidleyI do not claim to be a lawyer, but I can at least identify that the hon. Gentleman knows even less about these matters than I do. The idea that it is wrong for Parliament, which is sovereign, to change the law is something that he ought to know about.