HC Deb 04 November 1999 vol 337 cc493-8

Queen's recommendation having been signified

Motion made, and Question proposed,

That, for the purposes of any Act resulting from the Greater London Authority Bill, it is expedient to authorise—

  1. (a) the payment out of the National Loans Fund of any sums required to enable the Public Works Loans Commissioners to make loans to the Greater London Authority or any functional body, within the meaning of the Act; and
  2. (b) the payment of sums into the National Loans Fund.—[Mr. Hill.]

1.20 pm
Mr. Eric Forth (Bromley and Chislehurst)

It is unfortunate to say the least that the Minister failed to seek to catch your eye, Madam Speaker, to explain the nature of this money resolution. Normally, that would be criticised, because Ministers have often failed to do it. However, it is particularly important in this case because the money resolution carries with it significant implications.

I would have thought it a proper courtesy to the House—and essential to the debate—that the Minister explained the background to the money resolution, and gave some indication of the amounts involved. [Interruption.] Does my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) wish to intervene?

Mr. Oliver Heald (North-East Hertfordshire)

I was simply on the edge of my seat with excitement at my right hon. Friend's comments.

Mr. Forth

My hon. Friend ain't heard nothing yet. The complex nature of the money resolution is such that it requires a fuller explanation than we would normally expect.

The money resolution refers to the national loans fund and the public works loans commissioners making loans to the Greater London Authority or any functional body, and to the payment of sums into the national loans fund.

It would have been helpful if the Minister had explained—however briefly—the role that he sees the national loans fund playing in this matter. I would have benefited from a brief explanation of the nature of the fund, its size, where its revenue comes from, and its accountability, as that is all crucial to the money resolution, and therefore to the approval that the Government are seeking.

We are being asked to approve the payment out of an as yet unspecified fund of any sums required. We are being asked to sign a blank cheque, and to say that we are content that any amount of moneys may he paid out of the fund. Also, we must have fixed in our minds the work that the commissioners do. I would like to know who they are, who appoints them and to whom they are accountable for the loans that they will make to the GLA.

Two bodies are involved in the provision of considerable sums of money, and I would appreciate some guidance from the Minister on the amounts. I have no idea whether we are talking about £50 million, £500 million or £1 billion passing through the mysterious fund and the hands of the hitherto mysterious commissioners, of whom I know little because the Minister has not enlightened us. They, in turn, will make loans to the GLA. On what basis might loans be made?

Before the money resolution is agreed, it is essential that we be given information about the basis on which public works loans commissioners can make loans to the Greater London Authority. I suspect that we are talking about considerable sums of money, so it is important that we understand the relationship between the public works loans commissioners and the Greater London Authority. Those matters are fundamental to proper consideration of the money resolution, which is more complicated than usual. It involves different bodies, and hints at their possible relationship.

We must envisage the flow of moneys into the national loans fund from an as yet undescribed source—it would be useful to know how the national loans fund obtains its funding and moneys. The fund will, in turn, make moneys available to the public works loans commissioners—again, it is essential to know on what basis. The commissioners will in turn make loans to the Greater London Authority.

In any other circumstances, that would begin to look like money-laundering. Although I do not suggest that that is so in this instance, we require more than the usual perfunctory explanations from a courteous Government and a considerate Minister—with whom, regrettably, we are not faced. The Minister seemed to imply that we should nod through the money resolution without showing us the courtesy of providing an explanation of these complex matters.

Mr. John Bercow (Buckingham)

My right hon. Friend has alerted the House to a worrying subject. Are public works loans commissioners possessed of a financial expertise that is denied to mere mortals, or are they simply well-meaning laymen?

Mr. Forth

We need to explore that in this short debate. We need to know more about the fund and the identity of the mysterious commissioners. We want to make a judgment about their competence to deal with large sums of money. I suspect that such sums will be taxpayers' money, but I do not know, because the House has not been informed of the source, prior to the meander through the convoluted process of funds and commissioners, before the money ends up in the hands of the Greater London Authority.

I know that my hon. Friend the Member for Buckingham (Mr. Bercow) will have studied the matter carefully, and noticed that the money resolution refers to "any functional body". Thus funds will not only flow to the Greater London Authority. We are considering a complicated nexus of relationships between the origin of the funds and the filtration process by which decisions are made about the disposition of the funds. That is more than enough reason for curiosity about relationships between bodies and amounts of money, and about whether we should approve the money resolution, which, in effect, is a blank cheque.

If the Minister had sought to catch your eye, Madam Speaker, he might have been able to allay such fears, simply by providing explanations and so allowing us to move on briskly after that reassurance. However, he has, regrettably, taken a high-handed attitude, which I hope will not set the tone for the next debate.

As my hon. Friends have pointed out, we must consider many complex matters in the next debate. It would help the Government to ease the passage of the business if the Minister gave us a succinct but sufficient explanation of each matter, rather than simply expecting the House to nod the business through.

It is an understatement to say that our Committee proceedings were unsatisfactory. The number of Lords amendments makes us even more suspicious that the Bill has been grotesquely mishandled and mangled and that it is effectively now a new Bill, in which case we will have to scrutinise it even more closely than we might otherwise have done.

I am trying to give the Minister some guidance on how to ease the Bill's passage through the House; but before we get to all that, I hope that he will tell us more about the money resolution.

1.30 pm
Mr. Peter Brooke (Cities of London and Westminster)

As he so often did in Committee, my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) spoke with such eloquence and comprehensiveness that there is little left to say in support, but I have one observation that reinforces what he said.

At business questions, the Leader of the House referred to the large number of technical amendments which, she sought to argue, excused the fact that we were confronted with 193 pages of Lords amendments that we have two days at most to consider. We all sympathise with the new Minister, the hon. Member for Streatham (Mr. Hill), for having had to cope with this welter of paper since 30 September. His Back Benchers clearly have confidence in him, for they are not present. His predecessor, now the Minister for Housing and Planning, cannot be invisible in the normal manner of prompters on a stage and is therefore rather conspicuous.

By not speaking to the money resolution, the Minister has demonstrated that what is clearly a technical element of the business for today and Monday will not be explained to us by Ministers. If that is a presentiment for the rest of the two days, some of us, I am afraid, may get slightly impatient before we are through. I very much hope that the Minister will respond fully to the questions that my right hon. Friend has raised, not least because the climate of the rest of our considerations will be a great deal better if he does.

1.32 pm
Mr. David Wilshire (Spelthorne)

There are some genuine questions to be answered before we decide whether to vote for or against the amendments. I do not like deciding what to do first and trying to work out what the Bill means afterwards. I am unhappy with any suggestion from any Government of whatever political persuasion that we should create a new tier of bureaucracy, which will undoubtedly add to costs, without being told where there will be compensating savings by reducing bureaucracy somewhere else. The House should never authorise any additional expenditure without being crystal clear about what control Parliament has over it.

Will the Minister please put a figure to what he considers to be the meaning of "any sums required"? If so, we can double it and know that we are somewhere near the truth. What will the money be used for? Where will it come from? When the Government were considering the supposed benefits of the authority, what attention was paid to the cost of obtaining those benefits? Some sort of cost-benefit argument is absolutely crucial.

Where will the savings come from to be set against what we are being asked to authorise? What power will Parliament have to scrutinise and control the spending? What control and scrutiny will there be by the GLA itself, what by the mayor, and what by the Treasury? Those are genuine and necessary questions, and we must have answers to them before we vote on the technical matters that follow.

1.35 pm
Mr. Edward Davey (Kingston and Surbiton)

I associate the Liberal Democrats with what has already been said. The right hon. Member for Bromley and Chislehurst (Mr. Forth) has raised some important points, and it is incumbent on the Minister to explain to the House why the money resolution is needed.

1.36 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill)

I feel well and truly chastised by the observations made by Opposition Members. Yet all was done with the best of intentions. I rather expected something to be said on the subject, so it seemed only right to listen to the questions so that I could more properly answer them. It is exactly those questions, as posed by the right hon. Member for Bromley and Chislehurst (Mr. Forth) and others, that I now propose to answer.

A money resolution is needed to authorise the issue out of the national loans fund of sums required by the public works loans commissioners to make loans to the GLA or any of its functional bodies. It will also cover consequential payments by the commissioners into the fund.

As bodies whose capital finances are regulated under part IV of the Local Government and Housing Act 1989, the GLA and its functional bodies have power to borrow from the public works loans commissioners. The commissioners can lend money at rates that are often below those obtainable in the market.

Section 3 of the National Loans Act 1968 makes provision for the funding of loans made by the commissioners out of the national loans fund. The commissioners are empowered to make loans to precepting authorities. The GLA will be a major precepting authority, so the commissioners will be able to lend money to them. Lords amendment No. 169 would amend the National Loans Act 1968, which specifies bodies to which the commissioners can make local loans, to allow them to lend money to the functional bodies, which are neither local nor precepting authorities.

Mr. Forth

Where does the national loans fund get the money from?

Mr. Hill

I propose to come to that point in due course. It was an issue that the right hon. Gentleman raised, and I shall answer it in the proper order.

It is most important that the GLA and the functional bodies should be able to obtain funds for their capital programmes from the public works loans commissioners. That will ensure that those bodies can achieve the best value in borrowing for capital purposes by providing them, in common with all other local authorities, with an alternative to borrowing at open market rates.

Questions were asked about the identity of the public works loans commissioners. They are appointed by the Treasury, by royal warrant under the Public Works Loans Act 1946, on the advice of the Prime Minister in consultation with the Chancellor. The current commissioners are listed in the 124th annual report of the Public Works Loan Board, published by HMSO this year, a copy of which is in the Library.

However, before the right hon. Member for Bromley hastens—

Mr. Forth

Bromley and Chislehurst.

Mr. Hill

I am sorry, I meant the right hon. Member for Bromley and Chislehurst. Before he hastens to the Library to check that information, may I deal with the other questions raised by Opposition Members?

I was asked how much money was involved. That entirely depends on how much the functional bodies wish to borrow—[HON. MEMBERS: "Ah."]—and on how much the public works loans commissioners decide to lend. How will it be spent? It will be spent on the public purposes defined by bodies such as Transport for London, the London development agency and others. Those functional bodies, and the GLA, can borrow up to the amount for which they have credit approvals available.

The right hon. Member for Bromley and Chislehurst, having been a distinguished education Minister in his time, will undoubtedly have dipped into the national loans fund from time to time. As a former Minister, he will certainly know that the functional bodies to which such loans are granted have credit approvals available. Such credit approvals as are available are subject to the scrutiny of Ministers. Indeed, they are dependent on ministerial approval. I hope that that answers the question.

Mr. Bercow

I am perplexed by the explanation the Minister has just given. Can he confirm whether a local authority, such as Lambeth borough council, in whose area he represents the Streatham constituency, would be eligible to apply for such loan assistance? If it would, does he agree that that would be a legitimate source of anxiety to thousands of law-abiding taxpayers, because that council has an almost unrivalled capacity for spending money like confetti in a wholly irresponsible fashion that a Conservative authority would not allow?

Mr. Hill

The hon. Gentleman is right to say that I have the honour and privilege of representing the south of Lambeth, an area which he represented briefly in the early 1990s. Under the Bill, there is no question of a local authority taking such a loan. However, in answer to the broader question, I confirm that £6 billion a year is lent to local authorities by the PWLB and the outstanding debt is currently about £45 billion.

Question put and agreed to.

Resolved, That, for the purposes of any Act resulting from the Greater London Authority Bill, it is expedient to authorise—

  1. (a) the payment out of the National Loans Fund of any sums required to enable the Public Works Loans Commissioners to make loans to the Greater London Authority or any functional body, within the meaning of the Act; and
  2. (b) the payment of sums into the National Loans Fund.

Sir Sydney Chapman (Chipping Barnet)

On a point of order, Mr. Deputy Speaker. In the business statement earlier today, the Leader of the House said that next Monday's business would include the remaining consideration of the Lords amendments to the Greater London Authority Bill, followed by the guillotine motion on another Bill. She did not say when she intended that the guillotine should fall on the first Bill. It would be helpful to me and, I am sure, to other hon. Members if we were told whether it will be at 7 o'clock or 10 o'clock. Whichever it is, it is a scandalously short time in which to examine 820 amendments.

Mr. Deputy Speaker (Mr. Michael Lord)

We cannot pursue business questions at this stage in the afternoon and we must proceed with the matter before the House.