HC Deb 15 May 2000 vol 350 cc78-119
Mr. McDonnell

I beg to move amendment No. 3, in page 2, line 10, leave out from 'there' to end of line 19.

Mr. Deputy Speaker

With this it will be convenient to discuss the following amendments: No. 64, in page 2, line 12, leave out from 'director' to end of line 13 and insert 'or employee'.

No. 65, in page 2, leave out lines 14 to 16.

No. 79, in page 2, line 19, after '1890' insert— 'or a church, religious body, voluntary sector or community organisation which has registered as a charity under the Charities Act 1993'. No. 80, in page 2, line 19, after '1890' insert— 'or trade union certificated under section one of the Trade Union and Labour Relations (Consolidation) Act 1992'. No. 26, in page 2, line 19, at end insert— 'relevant employee" means a person whose principal or only place of work on the qualifying date is ordinarily the hereditament in respect of which the entitlement to appoint a voter arises and who works for that qualifying body.' No. 5, in page 2, leave out lines 25 to 28.

No. 34, in clause 3, page 2, line 42, after '£200' insert— 'and which has conducted a ballot of its relevant employees to determine the person to be appointed as a voter.'. No. 37, in page 3, line 12, leave out from 'greater' to end of line and insert— 'number of employees of the qualifying body.'. No. 16, in page 3, line 13, leave out from the beginning to 'the' in line 14 and insert— 'A qualifying body shall appoint as voters pursuant to subsection (1)(c) above'. No. 17, in page 3, leave out lines 18 to 22.

No. 38, in page 3, line 20, after 'values', insert— 'the number of relevant employees.' No. 40, in clause 4, page 3, line 28, leave out from 'shall' to end of line 30 and insert— 'conduct a ballot of all relevant employees to elect its voter or voters.'. No. 48, in clause 5, page 4, line 17, leave out subsection (5).

No. 51, in clause 8, page 5, line 4, leave out 'appoint' and insert 'elect'.

No. 52, in page 5, line 7, leave out 'appointed' and insert 'elected'.

No. 25, in page 6, leave out schedule 1.

No. 53, in schedule 1, page 6, line 2, leave out 'appoint' and insert 'elect'.

No. 54, in page 6, line 7, leave out from 'scale:' to end of line 24 and insert—

Number of Relevant Employees Maximum Number of Persons whom that Body may Elect
Up to 1,000, 1
For every 1,000 over the first 1,000 1 for every thousand relevant employees
No. 56, in page 6, line 28, leave out 'rateable value' and insert 'number of relevant employees'.

Mr. McDonnell

Although the matter of human rights is one for debate, it cannot be debated under any of the amendments, so I simply point out, Mr. Deputy Speaker—

Mr. Deputy Speaker

Order. That matter has been debated. If the hon. Gentleman does not intend to address his remarks directly to the amendments, I shall have to call him strictly to order.

Mr. McDonnell

I shall move on to the amendments, Mr. Deputy Speaker. We return to this debate with some amazement. Our argument thus far has been that the Bill is thoroughly undemocratic. The amendments have been tabled in an attempt to introduce some form of democratic legitimacy to the measure.

Although we are debating one group of amendments, it covers several separate principles, so I shall seek your permission, Mr. Deputy Speaker, to divide the House on more than one amendment in the group. The amendments have been grouped under the heading "Qualifying Bodies", but the individual amendments have different purposes, so I believe that we should have separate votes. The main thrust of all the amendments is to democratise the Bill. Although they are grouped, I shall seek leave later to divide the House on at least three sub-groups, and I shall now set out the arguments for that.

The amendments would ameliorate the Bill. In the previous debate, we urged compliance with some of the basic, democratic procedures of local government. The amendments would designate who can qualify to vote for a voter—who will be qualified to nominate a voter at future elections for the City of London.

Clause 3 currently proposes three groups. The first consists of people who are in occupation…as owner or tenant. That provision strikes at the core of the debate; it refers to physical occupation.

The second group refers to residents—as in any other local government or national election. We have just gone through a whole process of devolution; residence was a qualification in each measure that was introduced—for Wales, Scotland and Ireland.

However, through the amendments, we need to strike at the third category of residents, defined in subsection (c) as a person appointed as a voter in writing by a qualifying body which is ordinarily in occupation for relevant purposes as owner or tenant of the whole or part of a hereditament situated in that ward which is shown in the local non-domestic rating list.

Dr. Norman A. Godman (Greenock and Inverclyde)

I could be described as a semi-permanent resident of the City of London and a tenant of the City of London's housing department. Has my hon. Friend received any representations from the Barbican Association on this aspect of the Bill and on his amendments? I live in the Barbican and other residents have mentioned the Bill in passing, but I should like to know whether the Barbican Association itself has been in touch with my hon. Friend.

Mr. McDonnell

That is an important point. I have received no representations from tenants or residents in the Barbican. However, the City of London corporation has undertaken a range of consultations, although the House has yet to receive a report. I should be happy to give way to any hon. Member who would like to make such a report. Several meetings have been held in different areas of the City, but I do not know whether one was held in the Barbican estate.

Mr. Gerald Bermingham (St. Helens, South)

Does my hon. Friend agree that, under the measure, an unelected, unsupervised, unaccountable person—perhaps a director of a major corporation—could nominate who should have voting rights within the City, and that such nomination would be at the whim and fancy of that unelected, unaccountable person?

Mr. McDonnell

As I go through the amendments that have been tabled in my name and in that of my hon. Friend the Member for Leyton and Wanstead (Mr. Cohen), my hon. Friend will see that they seek to deal with the potential of such abuse.

As I said, we have had debates on local government reform, and on devolution and the legislatures for Northern Ireland, Scotland and Wales. In all those cases, voting has been based on residential qualifications and in none of them was there the strange mechanism of a qualifying body based on the ownership of property. According to clause 2 the qualifying body is a body corporate or an unincorporated body other than a partnership within the meaning of section 1 of the Partnership Act 1890. I shall return to that point, because it is a bizarre piece of drafting. What do the words within the meaning of section 1 of the Partnership Act 1890 mean? I checked and found that they are almost meaningless. Under section 1 of the 1890 Act, to which I shall refer in detail later, a partnership is a relationship between people, that seeks profit. Therefore, it is an anomaly that such partnerships are ruled out by the clause.

In effect, the problem with the Bill is that, although residents retain their right to vote and their votes are based on universal suffrage, those votes will be swamped by what is in effect the sale of votes to businesses and the votes based on property itself. This is the last area of political life in which votes can be bought in that way. As many know, we sought to reject that provision on Second Reading, and the Committee struggled with inadequate advice, so it sought more independent external advice. However, we are now left to press amendments designed to achieve two basic objectives.

First, the amendments would ensure that the business voter was physically present, or occupied, the premises in the City from which he or she, or the qualifying body, gains the qualification to vote. Secondly, if business votes are to be allocated, the qualification for those votes should be based not on property ownership, the value of the property or how much property a company or director owns, but on human beings—the employees who work for the company. That point is based on the assertion that the employees, or the workers, are the real generators of the City's wealth and that the City is their working environment. If anyone other than the residents should have a say in the City's management, it should be the employees. That is not a radical demand to make in this century.

With your permission, Mr. Deputy Speaker, I would be grateful if you would consider allowing us to divide the House on three or four different amendments in the main group because each addresses a different principle relating to the qualifying bodies.

Mr. Martin Bell (Tatton)

Does the hon. Gentleman feel some surprise that, in the first year of a new century, a democratic assembly is debating the buying and selling of votes?

Mr. McDonnell

I was surprised when we debated that issue in the last century, too. Not only are we debating such issues, but the Bill is being forced through the House on the payroll vote. If it were left to a free vote, we would not have this travesty before us.

7.15 pm

A number of principles are covered by this group of amendments on the qualifying bodies. Each of those principles merits the consideration of a separate vote. For that purpose, I have divided the main group of amendments into smaller groups. The first smaller group aims at stipulating the physical presence of the qualifying body. It is made up of amendments Nos. 3, 65, 5 and 48.

The second group argues that, when the votes are allocated, a qualifying body should qualify on the basis of its employees—that is, human beings—not on the basis of the property it owns. That group is made of amendments Nos. 64, 26, 34, 37, 16, 17, 38, 54 and 56. The third group demands that employees must determine who will vote on their behalf. It contains amendment No. 40 and consequential amendments Nos. 51, 52 and 53.

The three groups that I have described strike at three distinct principles, and I argue for separate votes on that basis. The first group is about physical presence. A person's entitlement to vote should depend on the physical location of an individual within the geographical area in which the vote is to be cast and in which that vote will have its effect. That has been the basis of our democracy, for perhaps three centuries.

The second group is about qualification, and states that the quantity of votes should not be based on how much property is owned by an individual or company. If people do not live in the area, they should at least work in the area. The argument is that they, the employees, should have a stake—an argument that is almost new Labour.

My third group is about qualification. It argues that voters who gain a vote through a business connection should be elected by the employees of a firm or business. The votes of a firm should be cast following of a vote of its employees to determine whom they entrust to cast their votes and to fulfil that responsibility.

I have grouped the amendments in that way because they represent a sliding scale of democratic engagement. It would almost restore to the City corporation the traditions on which it was founded—workers coming together in the distinct areas where they live and work to govern those areas. The tradition is that those who work within the City's boundaries are stakeholders as much as, and as well as, the residents. Therefore, they should have a say in running the corporation and in the management of their area.

That is why I have tabled amendments on physical location and occupation, and those that would ensure that votes were based on employees. However, if the votes on those amendments fail, I would at least urge that we divide on whether the votes based on the property qualification should be exercised by voters who have been elected by the employees of a business that qualifies to vote. There is a logic to having separate votes on the amendments.

I suggest a fourth vote. It would be on the amendments that were tabled last week and which Madam Speaker accepted this morning. The fourth vote would guarantee that two further organisations that would qualify as qualifying bodies were included on the face of the Bill. I draw attention to the amendments that argue that churches, voluntary organisations, community organisations and religious groups should be specified as qualifying bodies. It may be argued that they are unincorporated bodies, but I shall return to that point. I have sought legal and other advice, as the issue is not clear.

Mr. Robert N. Wareing (Liverpool, West Derby)

This is the first time that I have spoken on the Bill, which seems to be fresh out of "Jurassic Park". Am I correct in saying that the City of London corporation is the health authority for the port of London? Would not it be right to include in the measure those who work on health for the port of London, including representatives of Unison and the dock workers?

Mr. McDonnell

The amendments would enable the employees of the City of London corporation and all the organisations that have a location in the City of London to have, if not a direct say, at least some say in who will cast their votes for corporation representatives. As my hon. Friend said, employees involved in all functions exercised by the corporation should be include in a vote.

Dr. Godman

My hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) raised an interesting matter. Is not Bart's in the City? What rights do the 300 to 400 people working in that famous hospital have under the Bill?

Mr. McDonnell

That is an interesting question, as I am not sure whether Bart's qualifies as an incorporated body—which is one reason why clause 4 needs to be clarified.

Mr. Stephen Pound (Ealing, North)

On that note, there is surely no doubt that the vast verdant swathes of Hampstead heath and Epping forest that are in the City of London's iron fist are under the aegis of the incorporated body. Those unfortunate but honest artisans labouring in Epping forest and Hampstead heath have no democratic input into the terms and conditions of their service. How can that possibly be defended?

Mr. McDonnell

The amendments partly relate to that. Amendments were tabled that sought to bring Hampstead heath and Epping forest into the geographical area of the City of London, which would enable residents in those areas to vote. Those amendments were not selected for debate.

However, it can be argued that employees of the City corporation who are based outside the corporation, but work in such fields of activity, are located primarily in the City and could participate as employees under the amendments. If nothing else, we should at least agree, in a final vote, that the definition of bodies that qualify, as businesses do, for a vote in the City should include churches, religious organisations, voluntary organisations and community organisations.

It can be argued that the wording already allows for that. However, that is open to doubt and we must clarify the matter in the Bill. We should also vote on whether trade unions located in the City of London—in the sense that they are operational there and represent members' interests there—should be recognised as a qualifying body, thus enabling them to elect someone who would vote on the composition of the City corporation.

Mr. John Cryer (Hornchurch)

My hon. Friend may not be aware that, before I came to this place, I was a journalist working on the daily paper Lloyd's List, as well as various left-wing publications such as Tribune, which my colleagues on the Front Bench know and love. Under the amendments, would the chapel of the National Union of Journalists have the right to elect voters?

Mr. McDonnell

There are two issues involved in that question, which is why I would like the details to be included in the Bill. First, does the organisation have a financial property base in the City of up to £200 rateable value? Secondly, is it a qualifying body as an incorporated or unincorporated body? The question is whether either of those factors is applicable.

In our discussion of the amendments, I want to demonstrate that the references to corporate and unincorporated bodies in the Bill are, in legal terms, almost gobbledegook. To give security to those organisations, we should name them in the Bill. As I said, one of my arguments concerns stakeholding. Bodies such as churches, trade unions and others contribute to the life of the City of London and to the quality of that life, so I believe that they should be entitled to vote.

With the approval of the House, I shall seek four separate votes on qualifying bodies. I accept that that is difficult, but we are dealing with a sliding scale of amendments which could improve the Bill. We should at least seek to include in the Bill an acceptance that churches and others would be recognised as qualifying bodies. I would welcome your advice on those votes and their time scale, Mr, Deputy Speaker.

I shall explain the meaning of the linked amendments Nos. 3, 65, 5 and 48. There should have been a further consequential amendment, which would have deleted clause 3(1)(c). Unfortunately, however, it was not tabled. Let me offer apologies on behalf of my hon. Friend the Member for Leyton and Wanstead, who tabled several of the amendments and is on parliamentary duties in Washington.

Mr. Pound

In Tyne and Wear?

Mr. McDonnell

In the United States.

I have added my name to several amendments tabled by my hon. Friend.

The Labour party's manifesto sets out the background to the amendments. We are seeking to abide by the commitments that we gave to the electorate during the election. We have sought to establish good local government, enabling people to have the powers within their area which they felt that they needed to improve their quality of life. The manifesto states that local government should work in partnership with local people, local business and local voluntary organisations. We argued that councils would have the powers necessary to develop partnerships and bring about greater accountability. We also said that we would try to introduce a general power of improvement for certain areas. The amendments seek to do that.

Our party leader's argument at a certain conference about the forces of conservatism was an argument in favour of democratic engagement. The House has established, within its Public Administration Committee, a Committee to examine innovations in citizen participation. Our amendments seek to ensure that we engage the citizens of the City of London corporation in their own government and management.

In the past, we have defined citizens, especially in relation to local government, as people living in a defined geographical area. However, there are exceptions, and overseas voters are included. The previous Government included passport holders as voters, but a local connection—even one from 20 years ago—qualified them for that. I believe that the present Government are reducing that period.

There are also proxy and postal votes to cover temporary absences, such as holidays and working away. However, despite further innovations to enhance democratic participation, it is still based on identifiable location. Hence the reforms that we introduced to increase opportunities to register, such as a rolling register right up to the weeks just before an election. That is unlike the previous system of registering, which was based on a date in the October prior to the election. However, even the rolling register is still based on physical presence, and depends on location in a constituency in a parliamentary election, or in a ward in a local government election. Even with proportional representation in the recent London mayoral elections, qualification was still based on living in an area, being located within a boundary—a geographical area of greater London defined by the Greater London Authority's area of responsibility.

Why is that so? It is because we have defined democracy as people who have a common interest—almost a physical interest in the area that they share—coming together in their shared life experiences. Democratic participation and votes cast should be based on the knowledge of that area.

7.30 pm

A voter in physical occupation is defined in clause 3(1) as an owner, tenant or resident, but, for the qualifying body, the Bill goes further. Clause 2 states that the qualifying body can be established in relation to occupation by a director, officer, employee or agent of that body and, in lines 14 to 16 on page 2, goes even further by adding through a holder of any paid or unpaid office. A person can be appointed as a voter under clause 3(1)(c) by a qualifying body solely because the organisation can have an agent present in that hereditament.

What does "presence" mean? How long will a person have to be present? Would it be solely on the day or night of the qualifying date—1 September of the previous year? If it is based solely on the presence of a paid agent or an office holder on 1 September, businesses will be able to vote if such a person physically occupies the premises for one day only.

We accept that clause 5 sets out that the voter's principal place of work must be in the City and that the voter must have worked for a qualifying body for 12 months previously, or, under the alternative conditions, that the voter's principal place of work must have been in the City for an aggregate period of five, or even 10 years. However, the business connection will have to be for only one day on particular premises.

The Bill's promoters have set out their views on what they consider to be its benefits. They say: The entitlement extends to a qualifying body only if it actually occupies premises in the City for the purposes of carrying out a trade, business, profession or other occupation or calling, while the performance of the functions of any paid or unpaid office being functions for whose performance accommodation has been provided by the qualifying body. That is a somewhat disingenuous allegation of physical presence. The qualifying body may acquire the rights of physical presence by a director's presence—not that of an employee or a major shareholder. So, the requirement that voters should have a connection with the City in order to gain a right to vote, as stated by the promoters, can be met by a qualifying body with a director—a tenuous connection.

There is an extraordinary circular logic to the promoters' argument. They argue that the qualifying body qualifies because of physical presence, but physical presence can be gained only by a director who is a member of the board of directors. Under clause 5(5), a director can be a person treated as having his principal workplace in the City, and therefore eligible to be a voter. Clause 5(5) states: A person who on the qualifying date is a member of a board of directors or other governing body of a qualifying body shall, for the purposes of this section, be treated as having his principal or only place of work on that date, and for the period during which he has been a member of that board or governing body, at the hereditament (or part) in respect of which the entitlement to appoint by that qualifying body arises.

Mr. Bermingham

Would not one be faced with the absolutely ridiculous situation in which somebody who does not own shares in but is a director of Amusement Ltd., running a theme park in north Yorkshire but registering it in London, could become a qualifying voter in the City of London if so appointed?

Mr. McDonnell

There is a strong anxiety—let us put it no stronger than that—that the system will be open to abuse. The Bill is not only almost incomprehensible but unenforceable.

Mr. Pound

I apologise for interrupting my hon. Friend's flow, which is as ever illuminating and elucidating. He quoted clause 5(5), which refers to the presence of the person at the hereditament (or part)… What does he understand by part of the hereditament? Is it a shed in the garden behind the building, a priest hole beneath the stairs, a forgotten part of the attic, a cupboard?

Mr. McDonnell

Understanding the Bill requires an element of fervent study, Jesuitical training and a creativity of mind to enable enlightenment. I do not think that we have enough time for that.

Mr. Pound

I was educated by the Jesuits.

Mr. McDonnell

As someone who was educated by the de la Salle brothers, I suspect that my analysis of the clause may not have reached the level of the Jesuits. I look for enlightenment from the right hon. Member for Cities of London and Westminster, the sponsor of the Bill, and my hon. Friend the Minister, who I am sure has a full and thorough understanding of the nature of hereditament and its parts from piloting through Committee this and other Bills. I defy any hon. Member to clarify how clause 5(5) would not result in a director of a company being able to do whatever he or she wanted in order to qualify to cast a vote. We are talking about becoming a voter and not about qualifying to choose a voter.

I shall cite a hypothetical example of someone wanting to abuse the system. If I were interested in shaping the policy of the City of London corporation because I wanted to sell off the assets to friends and reap rich rewards—God forbid—I would encourage my friends to register as a qualifying body by buying a small office or part of a hereditament. I would lodge an agent in that office on 1 September—perhaps for 12 months—or say that I was the company's director and therefore the office was my principal place of work, as clause 5(5) requires.

Not only would my organisation acquire the right to appoint a voter, but I could become that voter because I had been a member of the board of that company and the office would be treated as my principal or only place of work. That is a recipe for every carpetbagger who wants to join the City of London corporation gravy train. I genuinely believe that the matter needs reconsideration and I am surprised that the Bill has come quite so far without much amendment.

Amendment No. 5 would tackle the problem by deleting clause 2(2). Amendment No. 3 would delete further lines that pronounce on the need for physical location in the City of London area. It would delete the contortions in the Bill that will enable someone to qualify as a qualifying body and then as a voter.

Mr. John Cryer

It occurs to me that multinational companies, international banks and other such institutions might consider this putative legislation with some interest on the basis that, if the business vote in Britain can be extended, there is no reason why it cannot be so extended in other countries and in cities such as Tokyo or Toronto.

Mr. McDonnell

It is interesting that my hon. Friend cites Tokyo. I was interviewed over the Christmas recess by Japanese business journalists who were interested in the proposed legislation. They thought that it would provide a fascinating way in which a company could exert influence within a particular area, and was something that would want to be replicated elsewhere. The purchase, establishment and registration of a holder company within an area would enable voters to be chosen, and eventually the representatives could become voters themselves or become the casters of votes, and then move on to the City of London corporation.

Mr. Wareing

Recently there has been reference in the news to the proposal to merge the stock exchanges of London and Frankfurt. Is it possible that under the Bill someone living in Frankfurt could have a vote in the City of London, while a worker, a Londoner, living in the City of London would be denied that possibility?

Mr. McDonnell

It is important that we seek clarification from the promoters. They have issued a statement today, and I find it difficult that we are not able to respond to such statements. If I had received today's statement early enough, I would have wanted to question parts of it or to publish an alternative brief. The statement contains assertions that voters should have a connection with the City. It goes on basically to argue that whoever qualifies for a vote and casts a vote has a connection with the City. However, as clause 5(5) demonstrates, that connection can be fairly tenuous. It can be indirect, and it can certainly overcome some of the conditions that the Committee sought to include in the Bill to ensure that there would be a connection between those people who cast their votes and those who were elected—that being that they lived, worked and served within the City.

Amendment No. 5 would overcome some of the difficulty by removing the relevant subsection. I urge the House to examine the potential for voting for the amendment. As I have said, amendment No. 3 is designed to ensure physical location overall.

The qualification that a qualifying body will seek under the proposed legislation is physical presence by an officer. "Officer" is not defined in the Bill. What does it mean? What legal standing does "officer" have? What officerships are we including within the definition? Are they chair, vice-chair, secretary, treasurer, auditors, chief executive, president? What other functional officers may qualify? There is a strong argument for amendment No. 3, which would delete the provision that enables a director, officer or agent, or holder of any paid or unpaid office, of the body concerned to be present and therefore qualified to vote because it is in occupation.

As for other functional officers, how far does the provision extend and what is the relevant case law? For example, is it possible to designate more than one person to any of these officerships on a joint basis? If we had joint secretaries, could it be that only one of them would need to be present within a particular location to satisfy the condition of occupation? It seems that there has been no debate on the matter, and I would welcome assurances from the promoters and my hon. Friend the Minister that the matter has been or will be examined, and that we shall receive a statement.

The objective of my line of questioning is to ascertain how open the proposed legislation is to abuse and manipulation by the unscrupulous, or by those who do not wish to lose their less formal or perhaps ceremonial positions. An attempt may be being made to keep the free lunches coming. However, there may also be an attempt by some to manipulate the proposed legislation to enable other abuse at a later stage.

7.45 pm

Amendment No. 3 would eliminate the possibility of qualifying bodies enabling the agent to be present. We should be anxious about the concept of an agent. How is agency defined? Are there qualifications to be gained for someone to become an agent? If so, can I apply? What is the transaction that enables an agent to be appointed? Has a legal process to be completed to designate an agent? If so, what is it? Is there a documentation process to record the award of an agency? The issue is important because residents qualify for a vote as a result of residency, and that residency is recorded on the electoral roll. I take it that the business qualifies as a result of the hereditament, and that is recorded also as a result of the ownership of property and the payment of council tax, business rates and other forms of evidence.

However, what documentation evidences an agency? If there is documentation, is it a matter of public record? Is it open to public inspection? Will it be covered by freedom of information legislation that we are promoting as part of local government legislation so that there will be access to information? Will there be an electoral roll that will be open to free examination by the public?

It is fairly clear what I am getting at. If anyone can be an agent, if any process can be followed, if there is no transparency, if there is no documentation and if there is no so-called electoral roll of agents, how can we test the bona fides of an agency?

Mr. John Cryer

It occurs to me that in this place at least we have a Register of Members' Interests. We know that when the Conservative Administration was in power, not all Conservative Members bothered to fill it in completely and honestly. Nevertheless, we have the register. Given the proposals in the Bill, we shall not see anything resembling a register of voters' interests.

Mr. McDonnell

My hon. Friend has raised an important point. If there is an issue of agency, the agency would enable the qualification of a qualifying body to appoint voters. Those voters would in turn elect the corporation representatives. My hon. Friend is right in suggesting that we should be aware of the interest of agents when they exercise that function. Amendments were tabled relating to the registration of masonic links, for example, which were not selected. Whatever the system, it is important that there is transparency. Why is that? It is because qualification is based on physical occupation. How is it possible to check physical occupation as in clause 2, if we do not know the name of the agent, the process of authorisation or who authorised the agent? How can we challenge the qualification of a qualifying body to vote on the basis of the occupation of the agent if the identity of the agent is not recorded along with the property that he is supposed to be occupying?

Mr. Bermingham

My hon. Friend is using the word "agent". I have scoured the Bill: what is an agent?

Mr. McDonnell

That was the first question that I asked. I would welcome a definition from the promoters and from my hon. Friend the Minister. If we are talking of a person acting on behalf of an organisation, it should be relatively simple to put him on some form of electoral roll. If the agent is an organisation, matters become more difficult. Who are the agents of that organisation? It becomes extremely difficult to define and is open to abuse because it is not transparent. I would welcome a clear definition of "agent" from the promoters.

Dr. Godman

The aim of amendments Nos. 3 and 5 may not be to protect the interests of existing voters. If my hon. Friend fails to persuade the House to vote for those amendments, is it likely that the present electors—the people who live in London—would become a minority in the new electorate established by the Bill? That is an important question. It may be an indirect consequence of the Bill that the present electors become a minority.

Mr. McDonnell

That is one of the issues that has been raised consistently throughout the debate and in Committee. Our concern is that if organisations, particularly businesses, are qualifying bodies under the clause and can therefore appoint voters, they will swamp the residential vote.

Assurances were given to the Committee that the promoters would introduce a wider package of reforming measures. Their statement today says: The Bill forms only part of a wider package of reforming measures, and the Promoters have given the Select Committee formal undertakings as to the implementation of the remainder. These can be dealt with by the Corporation's legislative mechanisms and do not therefore require Parliamentary powers. Some of those measures would entail the re-warding of the City of London corporation to protect the resident voters. Although those assurances were given to the Select Committee in June last year and we received statements like the one today from the promoters in June, July, November and January, the reform package has not been completed. Therefore the protections that my hon. Friend seeks have not been secured.

That is why it is critical that we debate amendment No. 3 properly tonight. The amendment would go some way to providing that protection by deleting the passage from lines 10 to 19 which allows the manipulation of the system, making it possible to become a qualifying body by being a director, officer, employee and so on, or an office holder.

The amendment would also strike at the heart of the concept of "agent". It would resist this democracy by proxy, and the substitution of the elector by other nominees. It would require physical presence. Occupation of any hereditament, or part of a hereditament, means occupation by personal physical presence there. That is what the amendment would achieve.

In addition to the words "director" and "agent", clause 2(1)(b) refers to the catch-all concept of office holder.

Mr. Kelvin Hopkins (Luton, North)

The concept of physical presence is clearly important in elections, but in general and local elections we make provision for postal voting for those who cannot be physically present. Has my hon. Friend given any thought to that?

Mr. McDonnell

I tried to clarify that in previous debates. There is a distinction between those who are temporarily absent from their normal residence, and those who have no connection with an area. That is why this Government have tried to deal with the ridiculous provisions for the overseas vote introduced by the previous Government, whereby someone could vote in my constituency, for example, although he had not been there for 20 years. We have tried to restore the local connection. That is based on residence, either current or sometime previously. The Bill does not enable us to re-assert that principle.

Amendment No. 65 would delete lines 14 to 16 of clause 2, which relate to the concept of office holder. That is the final catch-all. If one is not personally, physically present to qualify, one can do so by being a director or officer, or one can appoint an agent. If that is too much trouble or costs too much, one can set up an office for an office holder. The beauty of that arrangement is that it avoids any payments to an agent, because it can be an unpaid office holder.

What is an unpaid office holder? That sounds like a member of the family. It sounds like some form of sinecure. What type of office is envisaged? I would welcome a response to these questions and a clear view from the promoters. Perhaps they can provide that in a future statement. Are the offices restricted? What is their range?

Let me give an example. Does any activity pursued on behalf of a firm enable the person pursuing that activity to be described as an office holder? If the office is unpaid, what is the relationship between the individual in occupation and the body that qualifies on the basis of his occupation? What is an office holder?

The wording suggests that the activities of the office holder for the performance of whose functions accommodation is being provided by a qualifying body are not irrelevant. Functions are performed within that accommodation, but the clause does not define what office that person or persons will hold in relation to the performance of those functions. The wording is extraordinary. On that basis, virtually anyone who passes through a venue, or who has some vague relationship to a company, can enable it to become a qualifying body, qualifying for votes in the City corporation.

The office holder does not necessarily have to be an office holder of that qualifying body. The clause refers to a holder or any paid or unpaid office for the performance of whose functions accommodation is being provided by a qualifying body. It does not specify that that is an office holder of that qualifying body.

There may have been an error of drafting. I understand the intent, but it is not reflected in the content. A person operating from accommodation provided by a qualifying body may be unrelated to that body, may not be an employee of that body and may not be performing a function of that body. That is muddled drafting, which could open up a vista of abuse and manipulation.

The muddle continues into the next paragraph. What is a "qualifying body"? The drafting is unbelievable. I asked the House of Commons Library to provide advice. Amendment No. 3 would strike out this paragraph as well. In the words of my hon. Friend the Member for Leyton and Wanstead, it is gobbledegook.

The clause states: qualifying body" means a body corporate or an unincorporated body other than a partnership within the meaning of section of the Partnership Act 1890 I want to explore what that means because it is almost meaningless as it is currently drafted. I have asked for a definition of "body corporate". It usually means a body that is incorporated under a public or private statute other than the Companies Acts. A good example is a private water company or, previously, the Post Office. It also includes companies that are incorporated by a royal charter and probably those that are incorporated by prescription. The City of London corporation is a good example.

Although the term "body corporate" is used to distinguish a body from companies under the Companies Acts, in general usage, it could include such companies. It may also include companies that are incorporated overseas. How much stakeholding can foreign companies have in the City of London corporation? That question was asked earlier. Under the definition that I have given, a body corporate could be a body that was incorporated overseas.

I asked the Library for a definition of an "unincorporated body". If we have at least some definition of a body corporate, what is an incorporated body? The response said that "unincorporated body" would probably cover almost every entity apart from an individual. That is startling. It means that almost everything apart from an individual is an unincorporated body. However, we cannot be sure because our advice from the Library states that the meaning will depend on the context because it can be further defined. The term that is used in the Companies Act 1985 is applied widely, but that measure contains no helpful definition.

"Unincorporated" could include partnerships, building societies, friendly societies, corporate and joint ventures, co-operatives and other mutual bodies, and unincorporated associations. It could even include such bodies as police authorities. The previous debate that we held about hospitals might therefore be relevant. The Library said that "unincorporated body" was a catch-all term. The clause states that a qualifying body is a body corporate or an unincorporated body. That is extraordinary. In other words, it covers anything apart from an individual.

However, for some bizarre reason, the clause excludes a partnership within the meaning of section 1 of the Partnership Act 1890 I tried to clarify that. As a Member of Parliament, stumbling through a private Bill, I believed that it should at least be comprehensible to us before we enacted it, if we enact it. I dutifully asked the Library to trawl through the definition of partnership in section 1 of the Partnership Act 1890. I challenge the majority of hon. Members to understand the relevance of the exclusion of such partnerships. Section 1 of the 1890 Act states: Partnership is the relation which subsists between persons carrying on a business in common with a view of profit. I cannot understand why, having included bodies corporate and unincorporated bodies, the Bill excludes partnerships that are established to pursue profit.

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Mr. Bermingham

As a lawyer, I declare an interest. A partnership under the 1890 Act does not carry limited liability. Each partner is jointly and severally liable for the whole of the debts incurred. A corporate or unincorporated body can carry limited liability. If specific partnerships are permitted, what happens to those, such as me, who are members of chambers in the City of London, but are not in partnership with anyone? Every member of my chambers is entitled to vote in the City of London.

Mr. McDonnell

That is a good point, which I was going to make later. The Bill must clarify exactly who is entitled to vote. Clause 1, which is a quagmire of a provision, gives a vote to almost all those who want to wangle one if they own a certain amount of property. It is therefore bizarre that it isolates the partnerships for which the 1890 Act provides. I understand the issue about limited liability. However, section 1 of the 1890 Act also states: But the relation between members of any company or association which is registered as a company under the Companies Act, 1862, or any other Act of Parliament…formed or incorporated by or in pursuance of any other Act…a company engaged in working mines within and subject to the jurisdiction of the Stannaries…is not a partnership within the meaning of this Act. It is extraordinary that the Bill proposes the exclusion of partnerships that do not have limited liability, as my hon. Friend the Member for St. Helens, South (Mr. Bermingham), who has vast experience of the law, pointed out, and those that pursue profit. Why exclude them? The promoters should explain that. Surely the City corporation is not embarrassed about the pursuit of profit? If it is, the revolution is here.

Amendment No. 5 would delete subsection (2) of clause 2. As I explained, the amendments that are associated through trying to define "qualifying body" refer to the concept of an unincorporated body in occupation that is treated as the owner or tenant. Subsection (2) provides for the unincorporated body to be treated as owner or tenant whether or not the…owner or tenant…is in occupation. Again, that is gobbledegook. What does it mean? If an unincorporated body is any organisation other than an individual, the provision is open to abuse. Subsection (2) provides that the unincorporated body which is in occupation of the whole or part of a hereditament shall be taken to be so as owner or tenant whether or not the person who is on its behalf the owner or tenant of that hereditament or part is in occupation. Occupation goes out of the window.

The associated amendments deal with physical occupation. The Bill drives a coach and horses through the concept of physical occupation. My hon. Friend the Member for Leyton and Wanstead stated in a letter that one only has to read clause 2(2) to realise that it is gobbledegook, vague and not properly defined. He asks whether partnerships and other non-corporate bodies are included. He states that the provision is open to abuse, misuse or misinterpretation and that it is a lawyer's paradise. I agree, but the lawyers will be corporate lawyers, who will try to secure an interest for their company.

We have heard the interpretation of what is an unincorporated body. I suggest in amendment No. 79 that we should include as a qualifying body a church, religious body, voluntary sector or community organisation which has registered as a charity under the Charities Act 1993. Those may fall within the definition of an unincorporated body, but there is no guarantee of that. I sought clarification and advice on whether their inclusion could be guaranteed. Unincorporated bodies can be interpreted in the context of specific legislation, a law or a particular case, but there is an element of uncertainty. We need to guarantee recognition of the role played by those key stakeholders, which must be able to qualify for votes.

I care about the fact that such organisations must be reputable. For that reason, I have included the safeguard that they should be registered as charities under the Charities Act 1993. There are guaranteed standards of transparency, probity and community support for voluntary or community organisations, which provide justification for their qualifying for a vote. There is no doubt that they are key stakeholders. There are numerous churches and a vast number of voluntary organisations in the City of London corporation area and I pay tribute to the enhanced role that the corporation has played in recent years, particularly through the Bridges fund, to develop community support in its area. The Bill should ensure that community organisations, especially those that have been enhanced by the corporation's support, are entitled to qualify at least for a vote on determining a voter.

Amendment No. 80, which also deals with qualification, recognises another stakeholder by suggesting that a trade union certificated under section one of the Trade Union and Labour Relations (Consolidation) Act 1992 should also be a qualifying body. That represents not a back-door route to workers' control, but recognition that trade unions, which have many members and a presence in the City corporation, are key stakeholders. The Manufacturing, Science and Finance Union and other unions that organise City employees have strong memberships and therefore should have a strong voice, at least as qualifying bodies that can nominate a voter who would then qualify for a vote that would help to elect the City of London corporation. The representatives of the organised work force would then be eligible to qualify for a vote.

Amendment No. 80 does not represent industrial democracy, but it recognises the role of trade unions as stakeholders and partners. It would open up the management of the City corporation to its own trade unionists as well as the trade unions based in the City that represent City workers. For example, it would enable trade unions such as Unison and the Police Federation, as an association, to have some say in the management of the City corporation as they would qualify for a vote for a voter. I welcome the promoters looking sympathetically on the engagement of those key stakeholders in the system.

The argument on these amendments is important to us because physical presence is critical; it has been at the heart of our democratic system throughout. Democracy, from the Greeks onward, has been founded on the rights of those living and working in a defined geographical area. Why? Because electors then have a direct interest in the management of their environment and the place in which they live and work, because they have shared life experiences that bind them together and because democratic participation and casting a vote should be based on living knowledge of the area that people seek to represent. They should know which issues need to be confronted and how best to address them. With your permission, Mr. Deputy Speaker, I should like a separate vote on physical presence.

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Dr. Godman

My hon. Friend rightly emphasises the need to protect the interests of the residential voters, but what assurances have the promoters given on the protection of the interests of residents who want to stand for office in the court of common council? Am I right that a number of the elected representatives on the court of common council live in the Barbican? Would his amendments protect their interests as elected representatives?

Mr. McDonnell

Again, the protections that my hon. Friend seeks may be present in the wider package of reform measures that the corporation and the promoters suggest in their statement. However, until the measures are implemented, how can we ensure that those rights are guaranteed? That is a valid point and I am sure that those from the corporation who are listening to the debate would be willing to meet him to go through the details. They kindly saw my hon. Friend the Member for Leyton and Wanstead and the meeting was fruitful, if only in terms of discussing crossrail and how many more grants for his constituency could be pursued. They have also offered to see me. I apologise for being unable to make a previous meeting; it was to have taken place on the day of Bernie Grant's funeral so I could not attend. The corporation has been courteous enough to offer Members individual meetings to discuss protection and I urge my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) to take that matter up directly with it.

Amendment No. 64 is associated with amendments Nos. 26, 34, 37, 16, 17, 38, 25, 54 and 56, and I shall explain why they are all of a part. They are based on the simple premise that a body should have a physical presence in the area to qualify. We have considered how that can be distorted and contorted in the Bill, but now we must discuss another matter. Even if a vote is to be based on a business, a location or a commercial operation—not the stringent physical presence requirements that we want—the number of votes should be based not on the property holding, but on the number of employees at a particular firm or qualifying body. Those employees should be able to elect the voters who in turn, along with the residents, would eventually elect the City corporation. The electorate should comprise human beings, not properties, and electoral rights should be based on individuals and their role as residents, workers or employees.

Amendment No. 64 makes the first reference to the "employee" as having a physical presence in the hereditament to gain qualification for the qualifying body.

Mr. Bermingham

Has my hon. Friend considered the situation that could well arise in which a registered office is in a building occupied by firms of solicitors? He will no doubt have seen a sign listing company after company whose registered offices are in such a building. According to the promoters, under clause 3 they do not have to be separately rated. Does each of those companies, because the director and secretary are registered there, become a qualifying voter? If so, one block could have 50, 60, 70, 80 or 150 qualifying voters, all of whom would have a vote but none of whom would have any employees working in the block.

Mr. McDonnell

I understand my hon. Friend's point. I am not sure whether such contortion can be prevented. I would welcome the promoter's response to that point. Such multiple qualification could lead to abuse. It would be worth having a statement from the promoters about how that problem would be tackled. It may be tackled in the reform package that they have suggested, which falls outside the Bill. We may need to examine that problem in more detail.

Amendment No. 64 would identify the employee as the first reference and key to defining physical presence in the hereditament to gain qualification as a qualifying body. I accept that there are possibilities for abuse, as my hon. Friend suggested, either with or without employees, but we need to state the principle of the employee being the key element.

Amendment No. 26 would define "relevant employee" as a person whose principal or only place of work on the qualifying date is ordinarily the hereditament in respect of which the entitlement to appoint a voter arises and who works for that qualifying body. I have chosen that definition to overcome some of the queries and concerns that hon. Members have previously raised. It is important that it is not a fly-by-night employee who is at that place of work for only a limited time and moves on, or who moves from place to place and can qualify various bodies simultaneously. It should be the employee's principal or only place of work. That would prevent a person from being hired as a transient or peripatetic employee to become the carpetbagger who enables individual companies to qualify.

There have been discussions about how difficult it would be to establish a company's employment resources. I appreciate the difficulties in establishing who the relevant employees are and whether a location is their principal or only place of work. I acknowledged that on Second Reading, but I think that we were too charitable because it is clear that companies can readily identify from their records who their employees are. Extensive employment records are required for statutory purposes, such as national insurance, taxation, tax avoidance, and health and safety. Employees can be traced, located, verified and associated with a particular company.

There is no difficulty identifying employees and relating them to firms. The difficulty is relating employees to fixed locations: that may be open to abuse. If so, we should perhaps introduce a location register similar to the electoral roll. It could be funded by companies seeking qualification. If they apply to be a qualifying body on the basis of having employees at a particular location, they could fund the registration of those employees with the City corporation. If the City corporation can produce an electoral roll for residents, I see no difficulty in ensuring an electoral roll for employees.

It is argued that, on the City corporation's estimate, about 250,000 employees commute to the City each day for work. That number of people would not be difficult to register. It may seem large, but it is the electoral roll of my borough and of most boroughs in London, so it is manageable. The onus should be on the companies seeking to be qualifying bodies on the basis of their employees. They should assist in the financing of an electoral roll based on employment.

Such a register would be verifiable, because anyone could compare the electoral roll of employees with national insurance, taxation or health and safety records. I do not accept the argument that it is an insuperable problem to define "relevant employee" and to ensure that that person has a principal or only place of work at that firm and that they are located within that hereditament.

Amendment No. 4 was not selected, so I shall pass it by. It would have excluded people associated with the sex industry. I am not sure why it was not selected, but I shall leave that to hon. Members' imagination. My hon. Friend the Member for Leyton and Wanstead wanted to show that the term "relevant employee" may have to be further defined. We may want to exclude certain employment, and I understand that. We exclude people from the electoral roll because of their criminal activity.

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. The hon. Gentleman is doing what he knows perfectly well he must not do. He said he would pass the amendment by, and he must pass it by completely.

Mr. McDonnell

I have passed the amendment by, and shall now deal with amendment No. 34, which states that a qualifying body may only appoint—I detest the word "appoint" and prefer the word "elect", which is why I have tried to amend other parts of the Bill—

Mr. Pound

There is no future for my hon. Friend in the Labour party then.

Mr. McDonnell

I hope that you did not hear that, Sir Alan. It was almost a compliment.

Amendment No. 34 would require that a qualifying body could appoint a voter only if it had conducted a ballot of its employees to determine the person appointed as a voter. As it stands, the Bill provides that a person appointed as a voter would probably be appointed by a decision of the board or by a director or chief executive, but we do not know, because it is not defined.

Mr. Bermingham

Does my hon. Friend realise that that creates one of the most alarming anomalies in the Bill? Say that the board of X Ltd. decided to appoint my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) as a voter in the City of London and then by some mischance he gets himself elected to the corporation's board and the directors decide that they do not like him and take him off the voting list. He would lose his right to sit on the City corporation. Someone who is unelected and unaccountable would have disfranchised a human being and removed a councillor. I cannot see that being in accordance with the European convention on human rights.

Mr. McDonnell

I advise my hon. Friend not to stray into the issue of compliance with the European convention on human rights, because that may cause difficulties. The issue is about right of recall. Amendment No. 34 suggests that a ballot should be conducted to ensure that a person appointed as a voter is appointed on the basis of the wishes of employees in the relevant firm. As my hon. Friend says, under the Bill as it stands that person will be appointed on the whim of the firm, and his or her appointment can therefore be withdrawn on the same whim. Not only would that undermine the potential vote; it could undermine the individual's position and status if he or she were elected to the corporation of the City of London. It cannot be right for a company to have that power of veto and that right of recall.

8.30 pm

I am trying to ensure that there is an election by employees, because that would prevent an individual company from seeking to influence the corporation in respect of a point of policy that might have a direct bearing on its own operation. As far as I can see, the Bill as it stands allows companies to exert immense influence on the appointment of voters, and therefore on representatives of the corporation.

In earlier debates, concern was expressed about how, if we agree on a ballot of employees to nominate a voter, we can practically ensure that the ballot is fair, open and transparent and enables employees' will to be exercised fairly and democratically, without undue influence. It is always difficult to prevent the exercising of undue influence, but I do not believe that difficulties will be involved in registering the number of employees in a company in order to conduct a ballot to enable a vote to take place, either in the workplace or by post to employees' home addresses, so that those employees can decide who should exercise their votes and, in some instances, who should become members of the corporation.

The proposal relates to an earlier point, because it would be facilitated by a register of employees. It is not difficult to do that in the case of a population of 250,000, and it is surely not a problem to place such a duty on a company with a limited number of employees in order to ensure probity in the conduct of a ballot. It would remove the right to appoint from the chief executive or the board of directors, and would place that important right in the hands of those who work for the qualifying body.

Amendment No. 37 is consequential. The Bill suggests that if a hereditament spans more than one ward, it should be deemed to be in whichever ward contains the greatest part or structure. The amendment simply proposes that if a hereditament spans more than one ward, the decision on which ward it should belong to should be based not on the scale of the property holding, but on where the largest number of employees are. That would prevent a skewing of the balance.

Amendment No. 16 is also consequential. It suggests that the limitation in clause 3(6) is not necessary if the qualification is based on the number of employees, and would eliminate the limit on the number of votes that a company can exercise on the basis of the number of its employees. Amendment No. 17, in my name and that of my hon. Friend the Member for Leyton and Wanstead, would delete schedule 1, which, in its present form, bases the allocation of votes on property and is therefore superfluous. The amendment is slightly more radical than amendment No. 38, which would retain the schedule but would amend it to ensure that voters were appointed on the basis of the number of employees.

Amendment No. 40 would place a duty on the qualifying body to ballot its employees to elect the voter or voters. Amendment No. 51 would throw out the word "appoint". It is, I think, a reflection on the Bill that throughout it are references to appointing rather than electing. That is a stain on any Bill that purports to bring about democratic reform. The amendment would install the concept of election—the concept of democracy—where it should be. Perhaps in this debate it constitutes heady radicalism, almost reaching the heights of democratic socialism: it not only includes the word "elect", but would bestow the vote on the workers themselves.

Amendment No. 52, another consequential amendment, would remove the word "appointed" and insert the word "elected". Amendment No. 25 would abolish schedule 1. Amendment No. 53 would also remove "appoint" and insert "elect". Amendment No. 54, a more moderate amendment to the schedule, would introduce a system whereby, rather than the current allocation of votes in relation to the value of property owned—£200 up to £20,000 of rateable value, over £20,000 but not over £1 million, and over £1 million—there would be an allocation based on the number of employees. I suggest that the association with rateable value should be replaced by a system of one vote for every 1,000 employees, and that they should be "relevant employees" physically based in the hereditament in which a company seeks to qualify for the vote.

It has been argued that the residential vote might be swamped. Given an electorate of about 250,000 commuters coming into the City, that will not happen: the 2,500 votes will be allocated to companies on the basis of the number of their employees, and, with 5,000 residential votes, there will be no such swamping. I do not think that linking the number of votes to the number of employees on the basis of one per 1,000 is in any way intimidating in terms of the residential vote; I also think that my amendment would secure a balanced approach to the number of votes employees should have, on which businesses can then draw.

Amendment No. 56 is a similar consequential amendment that removes the reference to votes based on rateable value and installs the reference to the vote based on the number of employees.

At its mildest, my argument throughout the debate on this sub-group of amendments is that, if votes are to be distributed, the employees themselves must have their say, and that their right to have a say has been denied them until now; there has been no say for employees within companies.

If we are—I mean it sincerely—to build a stakeholder society, we will need to ensure that all the stakeholders are thoroughly involved. The Bill does not do that. The amendments go some way to ensuring that stakeholders are identified and provided with rights. I accept that with those rights come responsibilities; there is a responsibility of service. If one votes for a body, one is also entitled at some stage to stand for that body and to provide it with a service.

We discussed the stakeholder theme before the last general election and it was seized on by the Government. We developed it under new Labour and as part of the third way following Will Hutton's book "The State We're In." That seminal work opened and developed a debate about what a just society is. A just society is one in which we all have a stake. It is one in which we can make a contribution financially, in employment terms or, as some of us do, by participating voluntarily through voluntary organisations. In any democratic reform, those stakes, those contributions, should be recognised.

The amendments go some way to acknowledging the stakeholder society within the City corporation area. Almost unlike any other area, the City corporation is ripe for a stakeholder approach. It has a combination of residents and, thanks to City corporation funding, a strong and developed voluntary and community sector. Religious organisations and churches, which have been with us since mediaeval times, have also developed there, and there is the business sector. However, what has been missing among all those groups of stakeholders has been the voice of the workers themselves—the people who spend most of their working day in the environment of the City.

Mr. Wareing

There is another group of people who perhaps deserve an amendment: the students, for example, at the London school of economics.

Dr. Godman

There is also the City university.

Mr. Wareing

Indeed, there is the City university, Goldsmith's college and various other higher and further education establishments.

Mr. Deputy Speaker

Order. Let us deal with the Bill as it is.

Mr. McDonnell

Thank you, Mr. Deputy Speaker. There is a way in which to acknowledge the role of students almost as though they were employees of a particular body within an organisation, but I shall not pursue that matter because I can see that you are not succumbing to that argument. I shall concentrate on the amendments in hand.

That set of amendments, which is linked to a further set that we may debate later or on another occasion—which establishes electoral colleges—seeks to establish a stakeholder concept within the City of London corporation.

Mr. Deputy Speaker

Order. No doubt inadvertently, the hon. Gentleman has started to repeat himself. That I cannot allow.

Mr. McDonnell

At this stage, then, I simply need to say that the amendments allow for the formation of the right of workers within the City to have a say over their immediate environment. Why is that important? Because they should have a right to have a say over how their immediate environment is managed and governed. What does that mean? It is not industrial democracy within a firm; it is not about workers' rights; it is about the right of the estimated 250,000 workers who commute to the City to have a say and to make their contribution. It enables development of a discussion whereby those people can say what they require and how their needs can be met within the City area.

Before I conclude, may I briefly put the following point? Residents have their say over what they feel they need. Businesses have their say over what they feel they require within that limited environment to ensure that they function as businesses. What is not heard is the voice of employees who come into the area, telling us what they need to function as employees. I give a few simple examples.

Mr. Deputy Speaker

Order. The hon. Gentleman has dwelt on that point to such an extent that I shall begin to think of invoking the Standing Order against him for repetition.

Mr. McDonnell

I understand, Mr. Deputy Speaker. I simply wanted to mention the example of nurseries, which would enhance the quality of employees' lives, and the need for out-of-hours schooling.

Mr. Deputy Speaker

Order. I have ruled on repetition. I do not think that the hon. Gentleman need fear that any of those people will feel that their views have not been represented.

Mr. McDonnell

Thank you, Mr. Deputy Speaker.

This group of amendments opens up a new agenda for the City corporation and asks new questions of all of us. It opens up a new horizon, giving us the opportunity to liberate the legislation, to make it truly democratic. I would not want such provision to be replicated elsewhere, because I understand the special argument about the City of London. I understand the special needs of businesses, employees and residents in the City, and how we have to combine those needs.

8.45 pm

Although I do not accept the Bill, if we are to compromise on it—that is what we are trying to do today—I urge hon. Members to accept this group of amendments. The amendments define physical presence, ensure that qualifying bodies are proper qualifying bodies and give a voice to employees.

Mr. Peter Brooke (Cities of London and Westminster)

I once moved a group of 25 amendments, in Committee, in opposition on the Finance Act 1978, but I do not think that I have ever replied to a grouping of 20. I congratulate the hon. Member for Hayes and Harlington (Mr. McDonnell) on the stamina with which he spoke to the amendments, although I cannot necessarily agree with the content of his speech. I hope that he and the House will excuse me if I am rather briefer than he has been. Nevertheless, I shall concentrate on and cover his amendments. As the issues are complicated, however, I shall not hurry my objections to his amendments and to those that he shares with the hon. Member for Leyton and Wanstead (Mr. Cohen) in this group.

In replying to this group of amendments, I should like first to say a little about Labour Members' objections—on what might be described as grounds of general principle—to the Bill's reference to "qualifying bodies" before explaining the amendments' effect and why, consequently, I shall be inviting the House not to accept them.

As has been made clear in today's exchanges, many of the amendments in this group are prompted by objection in principle to the involvement of those representing businesses—qualifying bodies, in the terminology of this group of amendments—in the City's voting system in the way anticipated or, indeed, at all. The entitlement of individuals appointed by qualifying bodies to participate in City elections—which the amendments seek to alter—reflects, as the arrangements in the City have always reflected, the fact that the City is overwhelmingly a place for doing business rather than for living in.

Participation by business in City elections is not new, as all hon. Members will by now appreciate, but the voting system has been adapted over time to meet changing circumstances. The Bill continues that process. By way of illustration, in the 14th century, the qualification to vote in common council elections was solely a business one: voting entitlement was confined to members of the guilds. That arrangement was later expanded—[Interruption.]

Mr. McDonnell

Will the right hon. Gentleman give way?

Mr. Brooke

I shall give way in a moment. If the hon. Gentleman will forgive me—no doubt he had the same situation in his speech—it is easier if I reach the end of a sentence before someone interrupts me.

The arrangement was later expanded to enable electoral participation, partly by the City companies and partly by the wards. I give way to the hon. Gentleman.

Mr. McDonnell

The right hon. Gentleman is as courteous as ever. I urge him to recognise that, in those days, there was not the same distinction between those who had a company and those who did not. Those who lived and those who worked in the City were one—people worked in their area. I urge him—he has read as much of the literature as I have—to accept that.

Mr. Brooke

I understand the hon. Gentleman's intervention, but he will know—as I was saying a moment or two ago—that part of the objection to the process of this legislation and the City having a business vote has come back to the business vote, as such. However, I acknowledge what he has just said.

The principle of participation by both business and residential interests remains today, and it is reflected in the proposals that we are now considering and in which the concept of qualifying bodies is a key ingredient.

Much of what has been said on the amendments is informed by objection to the inconsistency between the electoral arrangements in the City and those elsewhere. That criticism overlooks the fact that, while local authorities are statutory bodies created since the 19th century, with boundaries determined in accordance with resident populations, the City's jurisdiction has always been based on its position as a centre of trade. As I have already said, its franchises have, over time, reflected that fact. I remark in passing that the City is the most notable centre in Europe for archaeological research, because there has been continuous commercial activity on the site for 2000 years.

The aim of the Bill is to ensure, through appointments made by qualifying bodies, that the range of interests in the modern City business community is properly represented. That aim is no novelty in the development of the City's local governance. It is axiomatic. An argument that local governance of the world's leading international financial centre—which, I remind Labour Members, includes the economic development brief—should be decided solely by 5,000 residents is surely misplaced.

The hon. Member for Hayes and Harlington has contended that the Bill would result in City business being given a disproportionate influence in the workings of the Greater London Authority, given the duties on the authority to consult the City's common council, as a London local authority. That point lacks substance, because the Greater London Authority Act 1999, on whose Committee the hon. Gentleman and I both served for many hours, imposes obligations on the authority to consult London local authorities and business interests in the capital. It provides that the business voice is to be heard, regardless of whether it is channelled through a local authority.

The notion that the City is a threat to the workings of the Greater London Authority does not seem to be shared by the hon. Member for Brent, East (Mr. Livingstone), now the mayor of London. His mayoral manifesto, "Ken for London" said, in its business section, "London: Business Capital of Europe", that he will work with the Corporation of the City of London and major City institutions to ensure London remains the financial capital of Europe. I shall address specifically the amendments tabled by the hon. Member for Leyton and Wanstead, whose absence I entirely understand and which the hon. Member for Hayes and Harlington explained. I shall then respond to the details of the amendments tabled by the hon. Member for Hayes and Harlington. The hon. Gentleman gave an accurate precis of the meeting that the City corporation and I were able to have outside this place with the hon. Member for Leyton and Wanstead since we last debated the Bill.

Amendment No. 3 would remove reference to directors, officers, employees, agents and holders of paid or unpaid offices from the definition of occupation in clause 2. That would define occupation as "personal physical presence" on premises, but without referring to the classes of people who might be included. It is a paving amendment for others in the group, to which I shall speak later. The result would not change the requirement for occupation, but it would create ambiguity as to which people were intended to be covered by the definition.

Amendment No. 5, to which the hon. Member for Hayes and Harlington has also appended his name, would remove clause 2(2). In consequence, unincorporated bodies, whose property must, as a matter of law, be held by individuals, would be taken out of entitlement if the individuals who acted as trustees or custodians of the property were not based on the premises. The main casualties of the amendment would be charitable and voluntary sector bodies, which are often unincorporated. Their property is frequently held through the permanent officers based in national or regional offices, with local premises used by voluntary staff or place workers.

Clause 2(2) was included in the Bill because it seemed to the promoters undesirable that such people should be excluded from participation in elections simply as the result of a legal technicality.

Mr. McDonnell

Does that mean that the right hon. Gentleman supports the amendment that would include churches, religious bodies, the voluntary sector and community organisations in the Bill?

Mr. Brooke

I shall come to that point. The hon. Gentleman has also tabled an amendment including trade unions, and I will deal with both points. To return to the point I was making, such a result seemed to the promoters arbitrary and contrary to the aim of ensuring that as wide a range of interests as possible are included in the new scheme.

Amendment No. 16 would remove the current restriction in clause 3(1)(b) on the number of individuals qualifying bodies may appoint as voters and would require City businesses to appoint as voters everybody working at the premises. As drafted, the amendment would not restrict the entitlement to employees working at premises in the City. That arrangement would increase substantially the electoral base that is consistent with the objectives of the Bill. Requiring entry on the voting lists of all those working for City employers, not necessarily in premises in the City, is questionable, and I suspect that it was not what the hon. Gentleman intended.

Even if the requirement is assumed to be applicable only to City premises, the consequences would mean that the City's resident voters would be completely swamped. The scheme now before the House has been developed mindful of the need to maintain the voice of residential voters, as I mentioned myself on Second Reading. That objective must mean that the voting entitlement of City businesses has to involve some process of selection. It might be said that the need to apply a mechanism to give the various interests of the City a voice on a representational basis, involving the selection of individuals, is one of the principal points of contention, but amending it by entering every City worker as a voter—I remind the hon. Gentleman that the City has a resident population of some 5,000 and a daytime one well in excess of 250,000—is not a practical solution.

Mr. McDonnell

The amendments would register employers as voters for voters, who would in turn elect the City corporation, in the same way that the Bill would register businesses to appoint voters for voters who would then take part in the elections.

Mr. Brooke

I do not wish to have a laboured exchange with the hon. Gentleman, but as I said a moment ago his intent is not always matched by the words he seeks to include in the Bill.

Amendments Nos. 17 and 25, tabled by the hon. Member for Leyton and Wanstead, are interlinked and would remove schedule 1. The result would be to delete the scheme for appointing voters by qualifying bodies by reference to rateable values. Acceptance of the amendments would leave the Bill in a highly ambiguous, indeed unworkable, state, because clause 3 would provide for appointments by qualifying bodies by reference to rateable values. I infer, however, that taken together the hon. Gentleman's amendments are intended to remove the appointments mechanism for qualifying bodies altogether. That would leave clause 3(1)(a) and (b) to define the qualifications of voters in ward elections. That definition is essentially a restatement of the existing business and residential franchise, which therefore means that the primary objective of the current Bill—to broaden the franchise—would be defeated.

Here I acknowledge that the hon. Member for Hayes and Harlington may deliberately have been seeking to reach that outcome, even though it is not the purpose of the Bill.

9 pm

I turn now to the amendments tabled by the hon. Member for Hayes and Harlington. Amendment No. 48 would exclude members of governing bodies of qualifying bodies who are not based at the premises to which the voting entitlement relates. Clause 5(5) was included in the Bill for those reasons.

First, as a matter of law, the directors or members of the governing body of an unincorporated business are regarded as the personification of the company. It would be somewhat odd if such people, who could be held personally responsible for a qualifying body, could not be appointed under the Bill. Clause 5(5) makes sure that the entitlement is conferred.

Secondly, it seems inequitable to exclude everyone working for a qualifying body from participating in the new scheme simply because the directors happened not to have offices in that building. I have referred already to a similar point with regard to amendment No. 5.

Thirdly, there was a specific desire to enable those who participate in the running of charities to involve themselves in the extended franchise. Charities often depend on part-time board members. Those public-spirited people may well have a very valuable contribution to make, and the City corporation has sought to facilitate that contribution by including clause 5(5) in the Bill.

Amendment No. 64 would exclude reference to officers and agents from the definition of occupation in clause 2. Personal physical presence as a requirement of occupation would remain, but the explanation of which classes of persons might satisfy the requirement would be removed. There would continue to be specific reference to directors and employees, but not to officers and agents. At the very least, the result would make the meaning of the word "occupation" less clear.

However, if amendment No. 64 were to exclude officers and agents from the definition, as the hon. Member for Hayes and Harlington may intend, the effect would be rather worse. For example, if the company secretary were based in the premises but the directors were based in another building, the whole work force at the former premises would be excluded from participation in the enlarged franchise. That would be a form of social exclusion.

The reference to agents was included by the promoters of the Bill because the conduct of company affairs through an agent has long been established as a fact of commercial life, and there appears to be no reason to exclude those working for companies from the scheme simply on the basis of those companies' internal management arrangements.

Amendment No. 65 would remove limb (b) from the definition of "occupation" in clause 2. That provides that occupation by personal physical presence includes the situation where holders of paid or unpaid offices occupy premises for the performance of their work. Amendments Nos. 79 and 80, with which I shall deal later, touch on the same subject.

The provision was included primarily to deal with religious organisations, which will, under the Bill, be able to participate even if the property in the City that they occupy is unrated. Premises used by holders of religious offices—those offices may well be unpaid—will not usually be owned by them. Instead, office holders will use accommodation made available by others, either for philanthropic reasons, or through a board or other intermediate body whose job is to provide accommodation throughout a given area or nationally for members of the religious organisation concerned. The clergy, and those connected with religious orders, are a relevant interest in the City community, as elsewhere, and the promoters of the Bill would not wish them to be excluded.

Amendment No. 79, about which the hon. Gentleman intervened on me, would exclude churches, religious bodies, and voluntary sector and community organisations registered as charities from the extended franchise. Amendment No. 80 would have a similar effect on trade unions. From the manner in which the hon. Gentleman spoke to those amendments, and from his recent intervention, I do not think that that was his intention in tabling them. However, that is the effect that they would have. The reason is that in both cases, the additional words proposed in the amendments follow the words "other than" in the current definition of a qualifying body in clause 2.

It will be apparent from what I have said already that the amendments run counter to the intention of the Bill, which is to include as wide a range of interests as possible in the new scheme. In the amendments, the hon. Gentleman—inadvertently, I am quite certain—would simply enlarge the number of people who could be excluded, by specific reference.

Mr. McDonnell

I am grateful to the right hon. Gentleman for pointing out what could have been a drafting error. Leaving that aside, would he, on behalf of the promoters, suggest that with a redraft the proposal could be brought back to ensure that the Bill provided for the inclusion of churches, voluntary organisations, religious bodies and trade unions?

Mr. Brooke

I am grateful to the hon. Gentleman for the spirit in which he put his question. I was not seeking to grind him—to use the phrase so often used by Ministers—about the amendments being defective. Those amendments are not so much defective as wrongly addressed.

I have alluded on two occasions to the importance of including charities and churches. The hon. Gentleman intervened on me in my first reference to that. It is the promoters' intention that churches and charities should be included. I will, of course, in the familiar phrase, make sure that the promoters are confident that their intent is fully reinforced by the way in which the Bill is currently constructed. I am grateful to the hon. Gentleman for reinforcing the need for that contribution.

Mr. McDonnell

May I also ask the right hon. Gentleman to extend his reference to trade unions?

Mr. Brooke

I am less well advised on trade unions, but I will certainly draw the issue to the attention of the promoters.

Amendment No. 26 would insert a new definition of "relevant employee" in clause 2. The definition is picked up in the substantive amendment No. 34, which would require a ballot of all employees to decide who is to be appointed. Selection by ballot, rather than by appointment, can be made to sound attractive—and if I may say so, the hon. Gentleman did so make it. That is, however, as far as the matter goes, as is apparent—at least, in my speech—once the practical implications are examined. I should like to spend a short while in that examination.

The hon. Gentleman has some knowledge of industrial ballots and referral under the Employment Relations Act 1999. He will know that a simple statement requiring a ballot is a very long way from the difficulties of the practice. As one of the leading independently produced handbooks on the subject says: the rules for industrial action ballots are notoriously complex… It notes the description by the Master of the Rolls of the practice of ballots as a minefield in which it is all too easy to stray from the paths of safety and legality… The hon. Gentleman may know of the survey conducted in 1998 by the Labour research department, a body whose findings may appeal more to him than they necessarily would to me. The survey revealed that balloting irregularities accounted for 45 per cent. of all employers' legal actions against trade unions since 1983. It is against that background that the hon. Gentleman's amendments must be judged.

The amendments do not provide anything like the level of safeguards that Parliament has set down as necessary to ensure fairness and propriety in the conduct of industrial ballots. That is particularly apposite when one considers the context of the amendments, which seek to address issues of democratic legitimacy. For example, there is no requirement for an independent scrutineer, and no control over how the ballot is to be conducted. In particular, there is nothing about whether the ballot should be secret, as is now required for all industrial action ballots. In fact, nothing is said about the procedure by which the ballots envisaged by the amendments would be conducted.

I do not seek in any way to get at the hon. Gentleman's amendments. If I may pay him a parliamentary compliment across the Floor of the House, I think that his 20 amendments—all of which were regarded by Madam Speaker as being within the rules of order—have provided us with a rich feast. The fact that one or two details may be missing at the margins should not be held against his achievement in constructing them.

The hon. Gentleman might quite properly say that he would envisage ballots being conducted as all others are, so that probity may be reasonably assumed. Once that point is accepted, however, one must also accept that statutory procedures and rules would need to be imposed, which is, to re-quote the graphic terminology of the Master of the Rolls, "a minefield". It appears to be generally agreed that—because, no doubt, of the procedural complexities—ballots are an expensive business. They are not embarked upon lightly, but the hon. Gentleman's amendments would require every business and other qualifying body in the City to embark on one. That seems tantamount to the creation of an obstacle guaranteed to ensure that City businesses did not participate, with the result that the Bill's proposals would come to nothing.

Mr. McDonnell


Mr. Brooke

I shall give way, but the hon. Gentleman will understand, after what I have just said, if I animadvert to him in my subsequent remarks.

Mr. McDonnell

I am trying to sidestep becoming a parliamentary institution. On independent scrutiny, I have to tell the right hon. Gentleman that I made points about the ability of individual firms to fund proposals, the structure of balloting and postal balloting. That aside, will he advise me on what independent scrutiny there is of the registration of qualifying bodies under the Bill?

Mr. Brooke

I shall respond first to that point and then return to what I had intended to say. In answer to what the hon. Gentleman has just said, I must, if he will allow me, fall back on the ministerial prop of saying that I shall write to him. As for the references that he perfectly properly made in his speech, as his speech lasted in excess of 100 minutes, I should not wish to take an examination on the whole of it. I was seeking, as best I could, to ensure that I responded to his central points.

Before the hon. Gentleman intervened, I was about to say that I could not tell whether the fact that his references to ballots might drive a coach and horses through the City's intentions for the Bill was his ulterior and secret motive, but that I could say that that would be their effect.

Amendment No. 37 seeks to alter clause 3 to provide that hereditaments that cross ward boundaries are to be treated as located in the ward in which the majority of employees working at the hereditament concerned are located. The clause provides that cross-boundary properties are allocated on the basis of the ward in which the greater part of the building is located.

9.15 pm

The undesirability—if not the impracticability—of deciding location on the basis of where in the premises employees are located is not difficult to identify. Employees are not static, and an attempted assessment of the part of the premises in which the majority of them might be located at any given moment is likely to yield highly arbitrary results. Even if the amendment were read as implying reference to an additional parameter—such as where in the building the employees usually work—in deciding location, the results would be capricious. Allocation of the voting entitlement could, for example, end up being based on the position of office furniture in a room, and could be altered simply by moving the desks around.

Buildings have a degree of permanence, and the approach taken by clause 3 is consistent with that taken in other contexts, including, for example, the compilation of rating lists where hereditaments cross rating authority boundaries. That, I suggest, offers a much more practicable and precedented method of dealing with property that crosses ward boundaries.

Amendment No. 38 would add a reference to "relevant employees" in clause 3(7); it refers to schedule 1 and is consequential on amendment No. 26, to which I have already spoken. Amendment No. 40 would delete from clause 4(1) the requirement on qualifying bodies to ensure that the composition of the work force is reflected in the appointments made, and substitutes the requirement for a ballot. In speaking to amendment No. 34, I explained at some length why ballots do not promote a practicable way forward. Amendments Nos. 51, 52 and 56 are also consequential, as the hon. Member for Hayes and Harlington pointed out.

Amendment No. 54 again refers to relevant employees and thus back to the issue of ballots. However, it substitutes for the table in schedule 1 an entitlement for qualifying bodies limited to the appointment of one person for work places where up to 1,000 people are employed and one more for each thousand thereafter. The effect of that would be to limit the entitlement of the vast majority of City businesses to one person. Only the largest City businesses—less than 1 per cent. of the total—would be eligible to appoint more. For the vast majority of businesses, there would thus be no prospect of participation by a cross-section of the work force.

There would be an absence of proportionality. The retail kiosk would have the same level of representation as the business employing hundreds of people. Such representation would then be triggered only if businesses went through the ballot procedure. For the reasons I gave earlier, that is not a reasonable expectation.

In addition to those elements, even if—for the sake of argument—it is taken as realistic to assume that businesses would voluntarily go through a balloting exercise to appoint one person, the overall increase in the City's electorate, and thus the level of representation of the City's diverse commercial interests, would be small and distorted. That runs counter to the Bill's intentions.

I have responded to the amendments in some detail to demonstrate to the House why the Bill, and especially the process to which this group of amendments is directed, have been framed in their current form. I hope that also explains why I have to invite the House not to accept the amendments.

Mr. Pound

It is with a slight reluctance that I speak in opposition to the right hon. Member for Cities of London and Westminster (Mr. Brooke). Normally, to see his name as a Bill's sponsor is similar to seeing the old sign outside Lords cricket ground saying that admission was 6d, or a shilling if Dr. Grace was batting. The presence of the right hon. Gentleman is usually the imprimatur of acceptability to the broad feeling of the House.

As the right hon. Gentleman walks to the wicket for what he has described as his last season at the crease in this place, with his club tie around his flannels, perhaps a decent touring cap rakishly worn over one eye, and his bat tucked under his arm, the plasters around its base bearing witness to many past struggles, many of us on both sides of the House will think of the last innings of John Berry Hobbs, Hammond, or any other great batsman. We shall look with sentiment at what has been—and will continue to be—a most distinguished career. Be that as it may, tonight the right hon. Gentleman is wrong.

Mr. Brooke

I much appreciate what the hon. Gentleman has just said. However, given the metaphor that he is using, is he aware that a predecessor as Member of Parliament for my constituency, Mr. William Ward, accomplished in 1820 the ground record for Lords of 278 when he played for the MCC against Norfolk? That remained the ground record for 105 years.

Mr. Pound

Very few Labour Members are not aware of that fact. As has already been mentioned, my hon. Friend the Member for Hayes and Harlington (Mr. McDonnell) and I had the benefit of education from the de la Salle brothers and the Jesuits. In fact, many of us thought that Lords was the Catholic cricket ground. We have learned more about it tonight and we have been pleased to do so.

It is a shame that the right hon. Member for Cities of London and Westminster, as he takes guard at the crease in his last season, is faced, on the Labour Benches, by the rude mechanicals from west London. Although I have no doubt that, as ever, he will gracefully caress the crimson wanderer to the palings with the waft of the willow that has characterised his parliamentary style, he will, I trust, forgive some of us if we see ourselves as Eric Hollies to his Bradman, or even Lillee to his Edrich.

I pay tribute to my hon. Friend the Member for Hayes and Harlington. He is not yet my right hon. Friend although after tonight's tour de force, I have no doubt that the Cabinet beckons him. [HON. MEMBERS: "Which cabinet is that?"] Unfortunately, it is probably the cabinet of Dr. Caligari or the cabinet used by Harry Houdini.

My hon. Friend has attempted to do what I thought to be wholly impossible. He has attempted to make better a bad piece of legislation and he has attempted to bring daylight, clarity, sanity and logic into the most bizarre mosaic of mediaeval mummery that anyone can look at without doubting that their senses still rest between their ears. How on earth can one justify the Bill?

There is only one intellectually sustainable case to be made for the Bill. I have my views on the amendments and, in my opinion, the City of London is in many ways an extremely successful institution. It would be a glorious addition to the London borough of Hackney.

Mr. Jeremy Corbyn (Islington, North)


Mr. Deputy Speaker (Mr. Michael Lord)

Order. I am not sure which amendment the hon. Member for Ealing, North (Mr. Pound) is addressing. I would be very grateful if he would start to address one of them.

Mr. Pound

Yes, Mr. Deputy Speaker. I give way to my hon. Friend.

Mr. Corbyn

Before my hon. Friend goes into detail as to which amendment would extend the boundaries of the borough of Hackney into the City of London, will he remember that the borough of Islington also has a boundary with the City of London, as does the borough of Tower Hamlets? We do not wish the City to be annexed to Hackney to the exclusion of Islington and Tower Hamlets. Will my hon. Friend reflect on that point?

Mr. Pound

I thank my hon. Friend for so brutally and publicly correcting me. Although the resident population of the City of London is about one third the size of an average London ward, why should not the three adjoining boroughs be refreshed by the addition of new wards from the City of London?

On the generality of the 20 amendments before us—the overwhelming thrust of which is to seek to input an element of democracy, participation and accountability into the Bill—I do not think that even the inclusion of the ingenious proposals and propositions put forward by my hon. Friend the Member for Hayes and Harlington addresses the fundamental issue in the Bill. The problem is a yawning dichotomy in which a mediaeval structure, which is successful, does not have the courage to say, "We are remarkably successful. Yes, we are capitalist robber barons and we are something special."

Mr. Deputy Speaker

Order. I am sorry to interrupt the hon. Gentleman again. However, he must differentiate between a Second Reading speech and dealing with the amendments. [Interruption.] Order. The hon. Gentleman must direct his remarks specifically to the amendment before the House.

Mr. Pound

I accept your criticism, Mr. Deputy Speaker, which is entirely justified.

I am especially concerned with amendments Nos. 79, 80 and 26, which seek to address the democratic deficit of the franchise proposed by the Bill for the City of London. It is perfectly possible to argue, as the right hon. Member for Cities of London and Westminster has done, that religious bodies and voluntary sector and community organisations are already represented. Even if amendments Nos. 79, 80 and 26 are accepted—I do not doubt that they will be, as I have faith in the good nature, will and intelligence of the House—that will not resolve the issue, and will provide the City of London with no more than a fig leaf of democracy.

I am told that my hon. Friend the Member for Hayes and Harlington spoke for more than 100 minutes. Many hon. Members wish to speak, so I am reluctant to speak at that length. However, in considering the Bill we should ask ourselves—as has been said in an intervention—what legacy we wish to leave the people reading the history of the 21st century. In discussing amendments to a Bill in the House of Commons in the first year of the first decade of the third millennium, are we seriously considering a mediaeval formulation of property franchise, which is not based on any justifiable or defensible system anywhere in the world? Indeed, it is a modern artifice grafted on to a mediaeval structure.

When those who follow us read what we have said tonight, will they be able to understand why we were seriously suggesting that any democratic organisation—even a soi-disant democratic organisation—in this country could, seriously and intellectually, try to base its franchise on property value and the ability and skills of employers, whether at first or second remove, and nominate its staff to vote on its behalf? I cannot believe that future generations will regard that with anything but amazement and bemusement.

If there were a clause in the Bill abolishing the City of London it would gain support but, unfortunately, there is no such clause. We must therefore content ourselves with the 20 amendments tabled by my hon.—soon to be right hon.—Friend. His amendments address consistently the issue of appointment, which goes to the heart of the concerns that many of us have about the continued existence of the Baltic trading post that has grown and swelled into the vast City of London today. The 21st century is surely not the century of appointments. If it is anything, it must be the century of election, of democracy, of accountability, of the—

Mr. Edward Davey (Kingston and Surbiton)

House of Lords?

Mr. Pound

I naturally exclude Labour's plans for the House of Lords, in response to that quiet aside from the hon. Member for somewhere south of the river.

We must avoid an appointments system that, as my hon. Friend the Member for Hayes and Harlington graphically demonstrated, is so open if not to misuse at least to misunderstanding. There is no accountability or transparency in it. How can one possibly attempt to structure a democratic model based on such appointments when any number of mechanisms may flow into the nomination or appointment?

9.30 pm

An election along the lines proposed in the amendments, the numbers of which have temporarily escaped me—I suspect that they will be whispered in my ear in a moment—

Mr. McDonnell

Nos. 3 and 40.

Mr. Pound

The numbers 3 and 40 come as if from the ether. The amendments would go a long way towards meeting the problem, filling the vacuum, providing that element of accountability. They may not provide the democracy that those who work and live in the City of London are entitled to demand, not as a privilege but as an absolute bounden right, but at least they would go some way towards meeting the need for accountability. It is for that reason—surely, no other reason is necessary—that hon. Members should support the amendments.

Mr. Robert Marshall-Andrews (Medway)

On a point of order, Mr. Deputy Speaker. When my hon. Friend the Member for Ealing, North (Mr. Pound) strayed on to the issue of the Baltic exchange, some of us questioned whether he was really holding to the amendments. The House is entitled to know. Will you give us your ruling, Mr. Deputy Speaker?

Mr. Deputy Speaker

I shall obviously bring the hon. Member for Ealing, North (Mr. Pound) into line whenever I think it is appropriate.

Mr. Pound

I was going to thank my hon. and learned Friend the Member for Medway (Mr. Marshall-Andrews) for that intervention, but I shall in future have to refer to him as my hon. and learned former Friend. However, he makes a good point, which has occurred to many hon. Members. I can see eyes glazing over and the laser-like glare of the Whips drifting in my direction.

I implore the House to take the amendments very seriously. There may seem something farcical about the Bill—almost a Gilbert and Sullivan, comic-opera aspect to it. I mean no disrespect to the right hon. Member for Cities of London and Westminster, the Bill's sponsor, or to the representatives of the City of London, although there is something strange about people who wear fur hats and carry on at the Mansion house in the way that they do—

Mr. Deputy Speaker

Order. I suspect that the hon. Gentleman has almost run out of things to say about the amendments.

Mr. Pound

In conclusion, although there are comic aspects to the Bill—that is undeniable—I ask right hon. and hon. Members seriously to consider the amendments and simply to address themselves to the one fundamental question at their heart: will they make the Bill better, or is the Bill fundamentally flawed in the first place? We need to consider that. My contention is that my hon. Friend's amendments would make a bad Bill better. They would make it not defendable, but less indefensible.

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

Perhaps it would be helpful if I clarified the Government's position on the amendments.

As we have made clear, the Government welcome the fact that the City is beginning to face up to the need to put its governance on a more modern footing. We believe that its proposals are a step in the right direction. I remind the House that many of the City's proposed reforms do not require parliamentary legislation. There is the abolition of the aldermanic veto, the introduction of a shorter term of office for aldermen, improved qualifications for aldermanic candidates, a reduction in the size of the court of common council, normalisation of the term of office for common council men and the better allocation of members between wards. The City also gave an undertaking in Committee to adjust the boundaries of the four residential wards to preserve their residential character, and to review the number of members returned by the residential wards to ensure that they retain the same proportion of the overall membership of the common council as at present.

The proposals for a corporate franchise as expressed in the Bill are based on electoral systems introduced recently in Melbourne and Sydney, so they are precedented elsewhere. The Bill's provisions serve to double the number of voters involved in elections in the corporation from about 19,800 to about 40,000.

In general terms, the Bill provides for a report to be brought to the House after four years for further consideration of the progress that has been made under the current provisions and, I dare say, for consideration of other changes.

The amendments would make major changes to the Bill's core provisions. They would alter the basis on which voting entitlement would arise and restrict the ability of companies to appoint voters in a manner that is appropriate to their own way of working. The City corporation considered a franchise based on the work force in its initial consultation but concluded that that was not a reasonable basis on which to proceed because of the impracticalities of such a system.

Mr. John Cryer

My hon. Friend might know that in Havering, the borough that covers my constituency, there are thousands of City workers. A few of these workers are higher paid but many of them are low and medium earners. Is there not a justifiable case for arguing that they should be entitled to some say in how the corporation is run, rather than, for example, bankers sitting in a boardroom in Tokyo or Frankfurt?

Mr. Hill

I am grateful to my hon. Friend for that thought. However, it is not for me to get sucked into the detail of the proposals that are before us. Many different and fascinating proposals have been discussed this evening during an important and interesting debate, one of the main lessons of which has been my discovery of the pronunciation of "hereditament". My hon. Friend makes an interesting observation but not one on which I wish to be drawn.

For all the reasons that I have enunciated, the Government cannot support the amendments. We had a substantial debate on many of the matters raised by them when we began consideration of the Bill on Report in July 1999. Those earlier amendments were rejected and I hope that the House will not support them this time around.

Question put, That the amendment be made:

Hon. Members


Hon. Members


Mr. Deputy Speaker

I think that the Noes have it.

Amendment negatived.

Mr. McDonnell

I beg to move amendment No. 66, in page 2, line 24, at end insert— 'business electoral college" means a body comprising voters appointed under section 3(1)(c) with responsibility for electing the business voters entitled to vote in ward elections.'.

Mr. Deputy Speaker

With this it will be convenient to discuss the following amendments: No. 67, in page 2, line 24, at end insert— 'employees' electoral college" means a body comprising voters appointed under section 3(1)(d) with responsibility for electing the employees voters entitled to vote in ward elections.'. No. 75, in clause 3, page 2, line 38, leave out from 'person' to 'ordinarily' and insert— 'elected from the business electoral college comprising voters appointed by the qualifying bodies which are'. No. 71, in page 2, line 42, at end insert— '(d) is a person elected from the employees' electoral college comprising voters who are employees of a qualifying body which is ordinarily in occupation for relevant purposes as owner or tenant of the whole or part of a hereditament situated in that ward which is shown in the local non-domestic rating list as having a rateable value of not less than £200.'. No. 76, in page 2, line 42, at end insert— '(1A) the employees' electoral college shall reflect the range of occupations operating within the City of London, and shall comprise relevant occupational constituencies for which an employee must register based upon his/her principal occupation as defined under the DFEE Standard Occupational Classification Major Groups; and the proportion of voters to be elected from an occupational constituency shall be determined in proportion to the number of employees registering for a particular occupational constituency in relation to the total registrations.'. No. 77, in page 2, line 42, at end insert— '(1B) the business electoral college shall reflect the range of business activity within the city, and shall comprise relevant business operational constituencies for which a qualifying body must register based upon its principal business operation; and the proportion of voters to be elected from a business operational constituency will be determined in proportion to the number of qualifying bodies registering for a particular business operational constituency in relation to the total registrations.'. No. 72, in page 2, line 42, at end insert— '(1C) The number of business voters elected from the business electoral college shall be no more than 2000.'. No. 73, in page 2, line 42, at end insert— '(1D) The number of employee voters elected from the employees' electoral college shall be no more than 2000.'. No. 78, in page 2, line 46, at end insert— '(2A)—(1) For the election of voters to represent the business operational and occupational constituencies within the electoral colleges, each vote in the poll shall be a single transferable vote. (2) A single transferable vote is a vote—

  1. (a) capable of being given so as to indicate the voter's order of preference for the candidates for election as members for the constituency, and
  2. (b) capable of being transferred to the next choice when the vote is not needed to give a prior choice the necessary quota of votes or when a prior choice is eliminated from the list of candidates because of a deficiency in the number of votes given for him.'.
No. 74, in page 3, line 22, at end insert— 'subject to subsections (1C) and (1D) above'.

Mr. McDonnell

On a point of order, Mr. Deputy Speaker. May I clarify the procedures by which we sought to vote on the previous group of amendments? I gave an indication that I wished to move other amendments but they have not been called.

Mr. Deputy Speaker

We debate amendments in the groupings set down on the selection list, but we deal with them as we come to them in the amendment paper. We have dealt with amendment No. 3. We have not yet reached the group of amendments on which the hon. Gentleman would like to vote. We must now debate the next group of amendments that have been selected, and after that we will come to the amendment on which he wants to vote.

Mr. McDonnell

Further to that point of order, Mr. Deputy Speaker. I seek clarification on why we did not vote on amendment No. 3, when there was a clear indication of support for it on the Floor of the House?

Mr. Deputy Speaker

It is a matter for the Chair to hear the voices and make a judgment on whether a Division is warranted. In my view, the voices did not warrant a Division.

Mr. McDonnell

May I express my disappointment, Mr. Deputy Speaker? I felt that there were sufficient voices to merit a vote.

Through the present group of amendments, we seek to establish a new democratic structure for the City. In an attempt to establish the stakeholder structure that we discussed earlier, we propose to establish electoral colleges.

In the Labour party in recent years, there has been some debate about electoral colleges. There was an electoral college for the selection of the Labour party's candidate for mayor of London. We have learned some lessons about the drawbacks of that procedure, and we have had the opportunity to consider both the dangers and the strengths of electoral colleges.

A balance is needed between the stakeholder components in the City. The amendments provide a definition of the various electoral colleges. Amendment No. 66 deals with the business college, a body comprising voters appointed under section 3(1)(c) with responsibility for electing the business voters entitled to vote in ward elections. A group of businesses would come together to nominate individual voters, who could go on to vote in ward elections to enable the election of the corporation. That would protect the business vote.

During previous stages of the Bill, there was discussion of amendments to introduce employees into the electoral process and to expand the role of residents in the franchise, and of attempts by me and others to undermine the business vote. Far from undermining the business vote, the amendments consolidate it within a structure which guarantees business a role in perpetuity in the City of London corporation.

Businesses could come together, discuss common concerns, promote individual manifestos and in due course elect voters who would nominate and vote for the City of London corporation. Although I have some concerns about the business vote continuing, this is one way in which it can be contained constructively. Business could engage in discussion of its own interests and comment on matters that concern the residents—the environment, education, social services and policing—and matters that concern the voluntary sector and community organisations, as we discussed in the context of previous amendments. At the same time, business could form an electoral college with its own interests.

The second electoral college that I propose is the electoral college for employees. That relates partly to the previous set of amendments, to which we shall return in due course. I am sure that we will be quick enough on our toes to ensure that there is a vote on those amendments.

Amendment No. 67 establishes the right of employees to have a say about the management of the environment of the City, the management of the City corporation, and the corporation's performance of its functions.

9.45 pm

Amendment No. 67 states: employees' electoral college" means a body comprising voters appointed under section 3(1)(d)— I shall discuss that in due course— with responsibility for electing the employees voters entitled to vote in ward elections. I shall clarify that because previous amendments were misunderstood. The amendment would provide for employees to come together who will in due course elect the voters. The latter will be able to vote individuals on to the City of London corporation.

I have tried to ensure that the amendments comprise a balance of interests in an electoral college, which provides a procedure whereby, first, the residential vote will continue—it will not be diminished or swamped, as was suggested in the previous debate. Secondly, the important role of employees as stakeholders will be acknowledged. Thirdly, the role of businesses will be recognised. I have not sought to amend the qualification for businesses. I tried to ensure that the qualifying business body is included early in the Bill.

Qualification requires an element of physical occupation. I am not happy about the definition of physical occupation. However, my amendment on that was not accepted. The definition of physical occupation will apply to businesses, which will be qualifying bodies. I am pleased that we have established to some extent that qualifying bodies will include voluntary organisations, Churches and religious bodies. They will be covered by the business electoral college. Perhaps amendment No. 66 requires a wider definition and a better term than "business electoral college". For example, "qualifying body electoral college" would cover a wider range of bodies.

The business colleges as comprised in the amendment would be based on a franchise that the Bill defines. An additional amendment would enable an employees' electoral college to be formed. The members of those electoral colleges would meet, discuss and hold hustings to secure the candidates who wished to stand as voters. Having listened to the arguments in the electoral colleges, the voters would be able to cast their votes for candidates for the corporation.

Amendment No. 75 would provide that a person entitled to vote at a ward election would be elected from the business college comprising voters appointed by the qualifying bodies… As I said earlier, we have not tried to amend the definition of qualifying body, although we may wish to do that later. There will be an opportunity for those in the business college further to reform the individual aspects of their voting entitlement.

Amendment No. 71 would add paragraph (d) to clause 3(1): a person elected from the employees' electoral college comprising voters who are employees of a qualifying body which is ordinarily in occupation for relevant purposes as owner or tenant of the whole or part of a hereditament— I use the French pronunciation— situated in that ward which is shown in the local non-domestic rating list as having a rateable value of not less than £200. When we discussed previous amendments, points were made that I want to consider now because they strike at the heart of the amendment.

Amendment No. 71 would establish an electoral college of employees. How should we determine who those employees are and where and for whom they work? I reject the argument that it is impossible to identify, register and ballot those employees effectively. Why? The arguments put forward so far were used to undermine the demand for a residential vote and for universal adult suffrage. I cannot comprehend that registering company employees would present any logistical problem. I cannot repeat too often that the records for national insurance, taxation and health and safety regulation are such that it is almost impossible to argue that we cannot identify employees in a company and on a particular site.

I shall clarify the verification process. It has been argued that there could be no independent verification of those employees nor independent supervision of such ballots. With the greatest respect to the right hon. Member for Cities of London and Westminster (Mr. Brooke), although he properly cited research on industrial ballots and associated problems, the history of industrial ballots during recent years nevertheless shows an almost superb improvement in their conduct. We have moved on to another plateau of industrial democracy. That ensures that the mechanical processes of industrial ballots can be completed so as to produce respectable, verifiable and acceptable results.

With the greatest respect to the right hon. Gentleman, the legal challenges to industrial ballots that have taken place were the result of legislation pursued by the previous Government, which was aimed at undermining any potential for industrial democracy and workers exercising their right to withdraw their labour. The arguments that an industrial ballot cannot be organised and that the registration of employees cannot be verified independently to ensure high standards of probity, correctness and electoral success are fallacious. For that reason, it is difficult to make such arguments against the introduction of an electoral college. Such an electoral college would give a voice to all those employees, who have been denied one by the refusal to accept the previous amendments. They are key stakeholders, whom we should involve in running the City administration.

Mr. Hopkins

I have listened with great interest to my hon. Friend's speech. I am sure that a century or two ago, when people were talking about registering voters for political elections as residents of particular areas or towns, all sorts of objections were made as to whether voters could be registered effectively and electoral registers drawn up. Does he agree that such objections represent an attempt to obfuscate a simple process and that, if people are registered on a particular day, the registers would stay in force for a year, just as they do for general and local elections?

Mr. McDonnell

It is interesting that the right hon. Member for Cities of London and Westminster referred to the origins of the City corporation. It was formed in mediaeval times by groups of workers who organised themselves into guilds so that they could exercise their rights of franchise in those guilds. That is not so different from what we request; we want workers to come together in their individual units to form an electoral college, which could organise a ballot to select and elect the voters who would qualify to vote for the City corporation.

With the greatest respect to the hon. Members who have mobilised those arguments, they have been used against every democratic advance made in this country over the centuries and, therefore, they must be rejected. We must say clearly that a compromise is involved if we cannot have full adult suffrage in the City corporation. Involving the work force in managing the City corporation represents a compromise that should be seized upon if it wants to portray itself as a progressive organisation.

No one has argued that there has been any difficulty registering businesses for a vote. What independent supervision of the registration of businesses is there apart from the rating list? It has been argued that ballots of employees could be fixed by moving a desk from one corner to another. The same could apply to businesses. They could build an extension to their office, and by so doing straddle another ward. I do not accept the arguments that have been expounded.

Amendment No. 77 concerns the business college, and provides an opportunity to address the issue raised by the right hon. Member for Cities of London and Westminster about businesses all being the same. In that amendment, I have tried to ensure that the business college represents and reflects the full range of businesses operating in the City. [Interruption.] I can tell from the mutterings that I have lost the House's attention, but perhaps I could draw hon. Members back to examining the critical issue of how to ensure the representativeness in the City of the business community.

Amendment No. 77 tries to establish within the electoral college certain constituencies of interest. I have suggested in the amendment that we should consider the Government's categorisation of business and industry. We could identify within that categorisation certain business operations and allocate them to those categories. If we allow a general franchise of businesses, the finance sector could dominate.

I want the business electoral college to reflect the full range of expertise in the City, so that it can be brought to bear on the management of the City corporation. That would bring benefits. The amendment would not only ensure that the financial sector does not dominate the business electoral college, but would draw in the other expertise to produce a balance. That means the lawyers, the accountants and a range of other facilities.

In our definition of qualifying bodies, we recognised that trade unions could become qualifying bodies because we are now assured that under the legislation they can be unincorporated bodies. That means that if trade unions are not accepted in the employee section, they could be included in the business college, because they are stakeholders.

I have also tried to overcome the problem of the residential vote being swamped. That is our biggest fear about the legislation. I have tried to do that by limiting the number of business voters elected from the business electoral college to no more than 2,000. That would significantly enhance the number of business voters, but would not allow the swamping of the residential vote, which stands at about 5,000 electors, although I am open to correction on that. [Interruption.] We have a real opportunity of establishing a business college that is representative, that will be able to create a business agenda for the City corporation in its own right and independently, reflects the different professions in the City and is not of such a scale, as it is currently, to overrun the residential vote. [Interruption.]

I plead your protection, Mr. Deputy Speaker, from the noise that is emanating from hon. Members. With my amendment, I want to try to tackle some of the abuses that we have described under the previous amendments, and in doing so to ensure that the business electoral college has independent—

It being Ten o'clock, further consideration stood adjourned.

Bill to be further considered on Wednesday 17 May.

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