HC Deb 04 May 1999 vol 330 cc803-9
Mr. Raynsford

I beg to move amendment No. 129, in page 123, line 43, leave out ("the' and insert

'(referred to in this section and section 7B as "the'.

Mr. Deputy Speaker

With this, it will be convenient to discuss Government amendments Nos. 130 to 134.

Government new clause 35—Secretary of State's functions in relation to the strategy.

Mr. Raynsford

New clause 35 adds a new section to the Regional Development Agencies Act 1998. It allows the Secretary of State to give guidance to the mayor on matters to be covered and issues to be taken into account in the economic development strategy that will be developed on behalf of the mayor by the London development agency. The mayor will have to have regard to the guidance, but there will not be a power, as with other RDAs, to give guidance on the strategy to be adopted in relation to any matter. That reflects the unique status of the mayor, who will have oversight of the development agency in London.

There is also provision for the Secretary of State to issue a direction requiring the mayor to alter the strategy if it is inconsistent with national policies or likely to be detrimental to any area outside London. The measures mirror the planning provisions and those for other mayoral strategies.

Amendment No. 129 is necessary as a consequence of new clause 35 adding another section to the Regional Development Agencies Act 1998.

Sir Sydney Chapman

I do not want to be insistent, but, in Committee, we debated long and hard whether guidance or a direction should he given. While new clause 35 says:

The Secretary of State may give guidance and

The Mayor is to have regard to any guidance", is not its gist that the Secretary of State may direct the mayor to do what he wants? While I understand the need for the mayor to have a strategy consistent with national policy, is this not the shadow rather than the substance of devolution to the mayor and people of London?

Mr. Raynsford

The hon. Gentleman is wrong. There must be an overarching national concern when several different regions pursue economic development strategies that may result in their coming into conflict with each other. In the national interest, the Secretary of State must take an overview. That is sensible. In London, we have rightly made the development agency answerable to the mayor. There is therefore proper democratic accountability in the region. The mayor can give guidance to the LDA on how to conduct its business. The only safeguard is to ensure that, where there is a possible conflict with national policy, or where there is action that would be detrimental to another part of the country, the Secretary of State will have an intervention power. That is the right and proper balance.

9.45 pm

I accept entirely that some elements in the House—one usually thinks of those sitting on the Liberal Democrat Benches in that connection—would allow anarchy and would allow regions to pursue their own interest regardless of the interest of other regions. That would not be responsible or serious and we are not proposing it. However, we are giving a considerable amount of devolved power to the mayor and to the London development agency to develop a regional development strategy that is appropriate to London's needs, but focuses on the issues that will be really important in London—the promotion of tourism and the development of the financial services industries and of other service industries that will be of unique importance in the London area. The development agency, working with the mayor, will pursue those issues.

Amendments Nos. 130 to 134 are technical amendments to simplify and clarify the text of the Bill. I commend new clause 35 and amendments Nos. 129 to 134 to the House.

Mr. Ottaway

I suspect that new clause 35 is another measure that is being introduced in case the hon. Member for Brent, East (Mr. Livingstone) becomes mayor of London. When the Bill left Standing Committee after a great deal of debate, the original plan was that the Secretary of State would be able to correct inconsistencies. However, the new clause is a quite distinct firming up of the legislation. One wonders why it was not introduced in Standing Committee, because there is nothing novel or unique about it. Basically, the Secretary of State will now decide what the policy is; no other interpretation can be put on the measure. The Secretary of State can give guidance, and, if the mayor wanders off, he will receive a great deal more guidance until he comes back into line. In other words, the Government know best and, in truth, this is another example of the nanny state.

However, a far more serious aspect of the measure is the fact that the London development agency will have a fairly influential effect on the economy of London. In the judgment of Conservative Members, that should be a matter for the mayor. The Minister will be aware that we do not agree in principle with the Regional Development Agencies Act 1998; we believe that assistance should be focused on specific areas, rather than on regions. Nevertheless, we shall have to learn to live with the Act. The mayor can use the LDA as a vehicle for his economic policy—or he could until the new clause came along. Now, the Secretary of State will decide what the policy is. That is fine; it is probably what the Government intend. However, what is the point of having the authority in the first place, if this sort of rearguard action is going to take place in the latter stages of the introduction of the legislation?

I think that the measure is a sign that the Government are losing their nerve slightly over the whole issue. They started out by proclaiming loudly that the mayor would lead a brave new world, but now we find that it is not the mayor but the Secretary of State who will lead that brave new world.

Mr. Wilkinson

I endorse everything said by my hon. Friend the Member for Croydon, South (Mr. Ottaway). As he suggested, the measure is, in essence, a Brent, East mayoralty contingency clause, but it is equally a Conservative mayoralty contingency clause. It is likely that the requirement for the policies of the London development agency to be consistent with national policies would not be met if a Greater London Authority were led by a Conservative mayor—the aspiration of Conservative Members. A Conservative mayor would follow policies that were quite different from those of a socialist Government in Whitehall.

Mr. Gapes

Does the hon. Gentleman suggest that, for an indefinite time in the future, there will always be a Labour Government? Is the Conservative party now in so bad a state that he feels that there is no possibility that a Conservative Government will ever be elected again?

Mr. Wilkinson

As so often happens, the hon. Gentleman has got hold of the wrong end of the stick. I was hypothesising the strong likelihood that there would be a Conservative mayoralty and saying that a Conservative-led Greater London Authority would pursue policies of stimulating enterprise and getting bureaucracy and interference off the back of commerce and industry in the capital, to such an extent that the capital would

become an example of free enterprise in action. A socialist Administration would probably not be too delighted about that, especially as such a capital city would be a magnet for further private-sector investment of a sort that would demonstrate the great disparity between the performance of other regions of the country, which have inherent disadvantages compared with the capital, and what was being engendered in industry and commerce in London.

The Government are not, as has usually been the case in respect of this Bill, setting up the Secretary of State as a back-seat driver; instead, the Secretary of State would be more or less in the boardroom of the development agency for London. Not only is the Secretary of State to give routine guidance on strategy, but he will be able to pray in aid allegations of the development agency's strategy being "inconsistent with national policies" or

having … a detrimental effect on any area outside Greater London". Given that there is bound to be a distinction and diversity of performance, objectives and policy between the capital and elsewhere in the country, the Secretary of State is being given carte blanche to issue directions to the development agency.

In my judgment, the work of the development agency will not be primarily to encourage the financial services sector, which is located predominantly, albeit by no means exclusively, in the City of London and which has always had the full impetus of the City of London corporation behind it—indeed, that is one of the main raisons d'être of the corporation. Nor will it be to encourage tourism, which also has its own bodies, such as the London tourist board, to attract tourists to the capital. Indeed, the complaint has always been that the influx of tourists to London is disproportionate, that other regions have been disadvantaged and that income from tourism has been distributed unequally between London and the provinces. Therefore, we can discount the two examples offered by the Minister.

It is much more likely that, under vigorous Conservative leadership, the development agency will work to restore manufacturing to full health in the capital. Because so many advantages have been given to other areas, through the Welsh Development Agency and its Scottish equivalent and all sorts of regional policies which have favoured manufacturing industry in the provinces, manufacturing industry in London has had a difficult time. In certain sectors, it has done well, but with imaginative policies from a development agency, London's manufacturing sector could do even better.

The new clause is a recipe for back-seat driving of the worst sort and it has little to commend it. It is an illustration of the fact that the Labour Government do not trust the GLA or the LDA to get on with the job, but believe that they should have the right to meddle and interfere ad infinitum.

Mr. Edward Davey

We have debated this issue several times in Committee, but it is appropriate for me once again to make the Liberal Democrats' views clear, because the issue reveals the fundamental difference between the Government and us.

The Minister said earlier that the Liberal Democrats' approach to the Bill is anarchic, but nothing could be further from the truth: our approach is democratic. Not only do we believe in devolution, but we understand how

it works and we believe that if devolution is to take place, it should be done properly and fully. The Government are trying to reduce the level of democracy, perhaps for the reason offered by other hon. Members—the Brent, East question—but more probably because they fail to understand people's desire to take control of their own lives. In his opening remarks, the Minister suggested that the mayor of London would have greater power than would be afforded to other regions. New clause 35, subsection 7B(1) states:

The Secretary of State may give guidance to the Mayor about the exercise of his functions". According to the Minister, the Secretary of State can intervene and force the mayor to review his strategy only in respect of national policies. However, subsection 7B(7) contains the definition of "national policies", which it says are:

any policies of Her Majesty's government which are available in a written form and which—

  1. (a) have been laid or announced before, or otherwise presented to, either House of Parliament, or
  2. (b) have been published by a Minister of the Crown."
In other words, the Secretary of State can decide what constitutes a national policy and use that as an excuse to intervene.

The Government are trying to hide their embarrassment about their centralist tendencies under a fig leaf. However, as new clause 35 demonstrates, the tentacles of the leviathan state are all over the so-called new, devolved assembly. The devolution that the Government propose in this Bill is, in many ways, a charade. As I said in Committee, this Bill both establishes Government for London and abolishes it. It is a great shame that the Government feel so nervous about devolution that, even at this late stage, they must give the Secretary of State yet another power. The Liberal Democrats oppose that move.

Mr. Raynsford

I am enjoying the image of myself as a tentacled leviathan who is trying to swallow all local and regional initiative in London using the overriding centralist powers that are our obsession. The Liberal Democrats have clearly not yet woken up to the fact that we are recreating a democratic citywide authority for London, which was abolished 13 years ago by the former Conservative Government. We pledged that we would return to London the right to have its own democratic citywide authority, and we are delivering on that promise.

I assure the hon. Member for Croydon, South (Mr. Ottaway), who led for the Opposition, that there is an obvious case for having a London development agency. He doubted the need for such a body, but it will be the mayor's economic development arm. It will play a key role in regeneration strategies, in advising on the distribution of the single regeneration budget and encouraging partnership to promote other regeneration initiatives. That is a hugely important role in a city divided by great wealth and great poverty. We need to galvanise and bring together all available agencies and resources to have the most positive and powerful impact on the London economy and on the regeneration of its disadvantaged areas.

That is the role that the development agency will have. It will work to the mayor, unlike regional development agencies elsewhere that will report directly to Ministers.

There will be local accountability within London, but it is only sensible that it should take place within a national framework. The Secretary of State will give guidance to the mayor in the same way as he will direct the regional development agencies in other areas. That is entirely compatible with devolution in London within a national framework.

The hon. Member for Ruislip-Northwood (Mr. Wilkinson) believes that this is about fettering the powers of a future Conservative mayor. That is a fantasy, as is his scenario about a Conservative mayor miraculously restoring London's manufacturing. I put it to him in the nicest possible way that, if he had come to London during the 18 years of Conservative Government, he would have seen the immense damage that was being done to manufacturing industry and the collapse and decline of that industry in so many parts of London that resulted from the policies pursued by the Government whom he supported. I remind the hon. Gentleman that we are about creating a proper framework for economic development in London that will respect the need for manufacturing and other service industries and will do the best for London.

The hon. Member for Kingston and Surbiton (Mr. Davey) claimed that the Liberal Democrats are not anarchic. He then rather spoilt the effect by expressing astonishment that national policies are the same things as the policies of the Government. That could come only from a party of absolutely implacable anarchists who have no understanding of the process of government. Government does not exist to issue texts for discussion at Liberal discussion groups; government is here to govern.

10 pm

Mr. Davey

I was taking issue not with the need for London's policies to be consistent with national policies but with the way in which national policies are defined in the Bill. The Government could have chosen to define national policies as policies that apply throughout the country, but they chose not to do so. They chose to define national policies as those that were laid down by the Government, and those policies might apply only to London.

Mr. Raynsford

I put it to the hon. Gentleman that the Government govern the whole country, and Government policies therefore apply to the whole country, unless they are defined as applying only to one area. In new clause 35, we are proposing a provision by which the Secretary of State will be able to give guidance, but instead of directing the development of the London development agency strategy—which would be a matter for the mayor—would have the power of intervention on two grounds. Those two grounds are consistent throughout the Bill, because we recognise the need—which I am sorry that the Liberal Democrats do not recognise—for the devolved government in London to work within a national framework, respecting the fact that London remains part of the United Kingdom and respecting the fact that its policies should not have an adverse impact on other parts of the United Kingdom.

Those are sound principles, which anyone who is experienced in the process of government would recognise are fundamental to successful devolution. Those are the principles that underpin our policies. Those are the principles that underpin new clause 35.

I commend the amendment to the House.

Amendment agreed to.

Amendment made: No. 130, in page 124, line 19, leave out 'in relation' and insert

', in particular, with respect' .—[Mr. Raynsford.]

Forward to