HL Deb 28 June 1999 vol 603 cc45-79

5.21 p.m.

House again in Committee.

Schedule 5 [Procedure for determining the Authority's consolidated budget requirement]:

5.20 p.m.

Lord Whitty moved Amendment No. 213B:

Page 197, line 5, leave out from ("of") to end of line 6 and insert ("the Mayor and the Assembly, in accordance with the following provisions of this Schedule, to prepare and approve for each financial year—").

The noble Lord said: This is a straightforward, minor amendment which is consequential to an amendment made to Clause 29 at the Commons Report stage. Clause 29 now provides that any function of the authority is exercised by the mayor unless specified otherwise. The amendment clarifies that the duty of preparing the GLA's budget is shared between the mayor and the assembly, in accordance with the schedule. I beg to move.

On Question, amendment agreed to.

Lord Tope moved Amendment No. 213C:

Page 197, line 48, leave out ("February") and insert ("November").

The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 217A.

We have now moved to Schedule 5, dealing with the process for the preparation of the budget. The purpose of the amendments is to bring the budget cycle forward. It is our view that budget preparation is not just a financial and administrative exercise in a public body such as the GLA or, indeed, any local authority; budget preparation is very much a political exercise as well. I deliberately say "political" with a small "p", because it is about determining policy priorities and should be part of a much wider public debate.

Recently we suggested that the so-called "state of London debate" should be used as part of the public debate on the budget process to help the mayor to determine her or his priority policies so that they can be properly reflected in the budget. This process needs time. If we are to have proper and effective consultation with the various component parts of London—by which I mean not only London borough councils and the City of London, but also the many voluntary and business organisations which have an interest—that needs time to achieve, and it certainly needs time if it is to have any real influence on the budget preparation, reflecting the priorities.

To do all of that in February, when one has a shotgun against one's head, is much too late, so we suggest in Amendment No. 213C that the mayor should be presenting the draft on or before 1st November. Incidentally, it ties in with the time when we think there should have been the state of London debate. Whether or not the debate has that title, I am sure that the assembly will have a similar public debate. In that way, there can be an open and meaningful process with Londoners, both in their representative bodies and more widely, determining priorities so that a budget can be drawn up—that is, as far as it is ever possible to reflect that process.

Amendment No. 217A suggests that the final budget should be approved by the last day of November. On reflection, I think that is probably rather too early, especially if the Government persist in having the RSG settlement as late as they currently do. The announcement is usually at the very beginning of December. I have to say in parenthesis that having that statement as late as it is now is causing enormous difficulties for those of us running authorities that want to undertake full and effective public consultation and are forced to do so over the Christmas period. The purpose of all of this is to bring forward the process to enable a much more open and public debate.

This process affects the London borough councils and their own budget preparations. It may well be argued rightly, that the GLA budget and the GLA precept are not part of the London boroughs' budgets; and they are not. Earlier this afternoon we were discussing the question of pinning the blame—perhaps that is the expression to use, given the nature of some of our debate—or at least clarifying what is a GLA budget and what is a London borough council budget. But the fact remains that London borough councils determining their budgets for the forthcoming year, in particular determining the likely council tax increase for the coming year, will want to have, and certainly should have, account of the overall tax burden which will be put upon their taxpayers.

Therefore, it would be important for the London borough councils also to know the likely—or, preferably, definite—level of the GLA precept at an early enough date to be able to influence their own budget decisions, should they so decide. February is much too late.

So the purpose of the amendment is to test whether the Government seriously share our views about budget-making being an open and transparent process, an involving process, both with the London borough councils and, at least as importantly, with London's communities, and whether they are serious about giving the mayor an opportunity to respond to the views that he or she hears at that time and having time to take them into account before presenting the budget finally to the assembly. I beg to move.

Lord Dixon-Smith

The noble Lord, Lord Tope, makes a plausible case for moving the budgetary process of the Greater London Authority forward to an earlier date, but, as we found earlier this afternoon, the problem lies in the detail. A move from 1st February, the date in the Bill, to 1st November would move the Greater London Authority's budget decisions back to before the end of a normal parliamentary Session, and certainly, as the noble Lord himself pointed out, to before the Government have made their support grant announcements. That is not likely to lead to a practical budgetary process for the Greater London Authority, unless the Government are prepared to commit themselves to change their ways.

I think I am right in saying that the noble Lord has experience only of budgets within London. If he had had county experience, as I have had, he would know that one becomes used to the pressures that arise on a precepting authority, as the county council is and as the Greater London Authority will be, and then the precept effect on the boroughs and their equivalent, the district councils, in county areas. That is the reality of this particular amendment.

Nevertheless, we all wish to see the budgetary process going ahead at an earlier stage, if achievable. So while I cannot support the detail of the amendment, I look forward to hearing the Minister's reply. The principle is correct, even though the detail may be in error.

5.30 p.m.

Baroness Farrington of Ribbleton

As the noble Lord said, Amendment No. 213C would require the mayor to present the draft consolidated budget to the assembly by 1st November rather than by 1st February as provided in the Bill. But, as he acknowledged, the amendment would also bring forward the deadline for approving the budget, so the timetable for the budget process would not be extended.

Although I can see that November may have been chosen to coincide with the provisional local government finance settlement, it is difficult to believe that the noble Lord is arguing that the GLA's budget should be fixed before its grant allocation is finalised. That would make no sense at all. As he recognised, the provisional settlement is announced in December rather than November, leaving the mayor and assembly to work without even provisional grant figures.

In response to his comment about the timing and December being too late, I should say that this year we announced overall provisions for local authorities for the next three years, which should help local authorities to plan their expenditure.

Although the mayor and assembly would be required to complete their respective roles in setting the budget before the end of November, the deadline for setting the budget requirement and issuing a precept to billing authorities would remain unchanged—the last day of February.

I cannot agree that the deadline for either the draft or the actual budget should be brought forward. The GLA, like local authorities, must be able to take account of the local government finance settlement in setting its budget. The mayor is required to consult the assembly before finalising his draft budget and we expect that much of the work will take place long in advance of the steps required in Schedule 5. In fact, I should be surprised were the mayor and assembly not to reach a fairly firm view of their budgetary priorities in December, when the provisional settlement is announced.

For those reasons, I hope that the noble Lord will feel able to withdraw his amendment.

Baroness Hamwee

I was glad that the noble Lord, Lord Dixon-Smith, ended his series of "buts" with an acknowledgement that the various elements of the cycle may deserve some examination. Whether our proposed dates are right or wrong, I am sorry that the noble Baroness did not acknowledge that it is worth pausing to consider whether what is proposed here is a practical or, one may argue, the best proposal.

I say that in the light of what the noble Lord, Lord Dixon-Smith, said about the pressures under which the counties are accustomed to work. Of course, a few years ago, the London boroughs were accustomed to having to reflect the GLC's demands and there are still precepts with regard to the police and so on. Just because that awkward situation exists in the counties and districts outside London, should those difficulties necessarily be replicated in London? We believe not.

Throughout the passage of the Bill, the Conservatives have argued forcefully that the position of the boroughs—and I paraphrase—should be paramount. This amendment does not seek to suggest that one set of bodies should take precedence over another. But we acknowledge that one of those sets of bodies—that is, the boroughs—is in a position which needs to be recognised, both with regard to the work which must be undertaken at borough level during the heat and hard work of setting the budgets towards the end of the calendar year when the settlement is announced and in what is a fairly frantic period over Christmas and the early part of each new calendar year.

We are very much aware that any borough which wishes to do that job properly cannot do so, sitting in its own town hall, without having a dialogue with the residents. The establishment of the GLA will create the need for an extra element of that dialogue. We are keen to make sure that it is an effective dialogue.

Baroness Farrington of Ribbleton

I am sorry that the noble Baroness feels that I did not respond to the point that was raised. I referred to the fact that we should fully expect a great deal of work to take place in advance of those steps being taken. We are talking about the framework of the Bill as opposed to the establishment of good practice, which will quite clearly allow for earlier discussions.

However, I return to the point regarding the announcement of the RSG settlement. To require the GLA to establish its programme within the law at a much earlier stage may put it at a disadvantage and, I argue, may quite inadvertently create those problems for the boroughs which the noble Baroness fears and which we all seek to avoid. Quite dramatic changes may need to be made in the circumstances. Therefore, the boroughs may be working on a false assumption.

Baroness Carnegy of Lour

Will the noble Baroness remind me whether the Government can announce the local government settlement when Parliament is in Recess? This amendment would mean that the Government would have to alter their habits and bring forward the announcement to November. Parliament is often in Recess well into November. Does Parliament have to be sitting when the announcement is made? Is it approved by the House of Commons?

Baroness Farrington of Ribbleton

I speak from recollection, and I shall write to the noble Baroness and correct it if I am wrong, but I believe that the final approval of the settlement takes place in February. The figures announced at the end of November or in December are for consultation. To be fair to the noble Lord, Lord Tope, his amendment does not propose to change the date of the RSG, although I recognise that we are trampling on yet one more of the dreams of the noble Baroness, Lady Hamwee.

Baroness Carnegy of Lour

The noble Baroness need not write to me. I just wanted to be sure that the settlement could be announced when Parliament was in Recess, if that became necessary. It sounds as though that is possible, if is only for consultation. I am sorry if I am confusing matters. I just want to be sure that there is no impossible implication for government in this amendment. It sounds as though there is not. I do wish the noble Baroness to write to me about that.

Baroness Farrington of Ribbleton

I am sorry if I did not make myself clear. The final settlement, which is subject to the affirmative resolution procedure, is not until February. The noble Baroness asked me about November.

Lord Tope

I can only say that the Minister has been too long out of local government. She is right to say that the RSG announcement made at the end of November or early December these days is an announcement for consultation purposes, at least in theory. I imagine, therefore, that it could be made when Parliament is not in Session, although I would not propose that it should be.

The consultation period then lasts through December until either late December or early January. At that point Ministers presumably make up their minds and most authorities find that their final settlement has changed from the original suggestion by £2,000 or £3,000 on a budget of several hundred million pounds. That is the process.

The noble Baroness is also correct in that I do not propose in these amendments to change the date of the announcement of the RSG settlement. It is probably outside the scope of the Bill to do so. Were it within the scope of the Bill, I would certainly propose that we should change the date of the settlement; that is, to have the announcement n late November/early December to be able to carry out proper and effective consultation with voluntary groups, local residents, local businesses, and so on, over the Christmas period. That is something we have attempted every year for the past seven or eight years. Even giving due warning of such meetings, there is still insufficient time available and an impossible deadline to meet. None of that is the purpose of the amendment.

Of course, I accept that the mayor cannot propose, and the GLA cannot decide, the budget for the year without knowing what the RSG settlement will be. However, the date of the RSG settlement announcement is not laid down by some immutable law of nature; it is laid down by the Treasury. If an amendment in the Bill was to have the effect of moving in the direction in which I wish, I would propose it even more fervently than I do now.

The dates suggested here—November rather than February—are negotiable. I would not go to the wall if the Minister said, "We cannot accept November but we might accept December or an earlier date than February". I expect that we would be both pleased and surprised. The purpose of the amendment and the theme I was trying to explore is the need to give more time for effective public consultation in the budget preparation. I accept the comments of the noble Baroness that there will be many private and public discussions long before February in the course of budget preparation. Once a deadline is put in an Act of Parliament, that tends to be the deadline, and most of us inevitably work to deadlines. I fear that we shall be stuck with a deadline which, in my view, even with the RSG settlement remaining as it is in terms of timetable, gives a period of time which is much too short and tight for effective work on a budget.

The noble Lord, Lord Dixon-Smith, referred to the fact that I have only London experience and have not enjoyed the delights of county and district government. That is correct, but perhaps I may remind the noble Lord that I served for 12 years on a London borough council when we had the Greater London Council, which also levied a precept upon us. That was at times both exciting and interesting. I believe that process is similar. Therefore, I do have some experience of this and I can assure him that not having a precept levied upon one by a county council, or in this case the Greater London Authority, does not make it any less stressful at budget time. It makes it hard, perhaps, to find someone else to blame, but usually the Government serve for that.

I believe that I have raised the issue. I suspect that we shall return to it, perhaps with a little more of the detail for which the noble Lord, Lord Dixon-Smith, is looking. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

Lord Topemoved Amendment No. 213D:

Page 198, line 17, at end insert— ("(1A) The Assembly shall take such measures as it consider, necessary to consult the bodies and persons referred to in subsections (2) and (3) of section 27 on the draft consolidated budget prior to its consideration by the Assembly. (1B) The consultation arrangements referred to in sub-paragraph (1A) above may include surveys, opinion polls, public hearings, citizens' juries and referendums.").

The noble Lord said: I rise to move Amendment No. 213D which stands in my name and that of my noble friends. This amendment returns to the same issue of trying to encourage and, indeed, to require a more open budget consultation process. In practice, I suspect that much of this will happen. I certainly hope that it will if we have the assembly we should have, and that the mayor, at any rate, would wish to do it.

As I stated when moving the previous amendment, it is enormously important that the political priorities of the mayor are fully and properly debated, discussed and determined so that the mayor, in proposing his or her budget, knows the expectations not only of the London borough councils but also of the other groups listed in Clause 27 of the Bill and, indeed, of Londoners generally.

The purpose of the amendment—perhaps more directed than the previous one—is to draw out from the Government whether or not they share our views about the budget process and the need for that very open and full consultation process and, if they do, what steps they will take to encourage or require the assembly and the mayor to carry out such steps. I beg to move.

Baroness Farrington of Ribbleton

This amendment would place an express duty on the assembly to consult the same list of bodies (as the mayor is required to consider consulting before exercising the general power) about the mayor's draft budget before considering it at a public meeting. This amendment raises the important issue of consultation on the GLA's budget. We have, of course, already considered consultation at great length when debating the consultation provisions in Clauses 27 and 34.

We cannot imagine that the mayor, if he or she thought it appropriate, would not want to test public opinion about the proposals for forthcoming expenditure by the GLA and the functional bodies. The amendment would place an express duty on the assembly rather than the mayor to carry out this consultation. I think it much more likely that the assembly would want to take its own soundings on public feelings on budgetary priorities long before it reaches the mayor's draft budget. As we have discussed, the timetable for the budget process is inevitably tight. Waiting until the mayor's draft budget to carry out consultation is, as the noble Lord acknowledged, unlikely to be feasible.

An express duty to consult a specified list of bodies on the GLA's proposed budget, regardless of whether it is placed on the mayor or the assembly, would appear to be unduly prescriptive. The mayor will, of course, already be under two very important incentives to test Londoners' support for his budget proposals. The first is the ballot box. Secondly, under the provisions of the Local Government Bill, the Government will be able to take account of local people's support for the GLA's budget in deciding whether or not to use its reserve powers to regulate excessive council tax increases. We suspect that those two factors will certainly be in the assembly's mind as it considers the mayor's draft budget and approves the final version

I am sure that the assembly, too, will want to take account of public views when considering the draft budget. I would expect it to do that in the usual ways: for example, by holding public meetings, or by constituency members consulting electors in their area. Again, we feel that a specific duty is unnecessarily prescriptive. I am aware that one woman's prescription is another person's necessary discipline. We appear, occasionally, to use the same terms in a slightly different context. On this occasion, I hope that the noble Lord will feel able to withdraw the amendment.

Baroness Hamwee

Before my noble friend responds, perhaps I may say that, yes, indeed, in tabling paragraph 1B we were looking forward to hearing our arguments about prescription played back to us. They may come back across the Chamber at another point in the debate.

Paragraph 1A inserts a duty; paragraph 1B sets out the possible methods of consultation. Sadly, we can imagine that the mayor may not want to test public opinion on the draft budget. Can the Minister confirm that the assembly will be entitled to do so?

Baroness Farrington of Ribbleton


Lord Tope

I am grateful for that. It is a strange irony that the Minister is now suggesting that I and my friends are being over-prescriptive, given the comments that we have been making and will continue to make throughout this Bill. But that irony was not lost on the Minister in making those comments.

I question whether we are being over-prescriptive. The amendment relates to Clause 27 and asks that, The Assembly shall take such measures as it considers necessary to consult", as stated by that clause, with, any London borough council; the Common Council; and …

  1. (a) voluntary bodies some or all of whose activities benefit the whole or part of Greater London;
  2. (b) bodies which represent the interests of different racial, ethnic or national groups in Greater London;
  3. (c) bodies which represent the interests of different religious groups in Greater London;
  4. (d) bodies which represent the interests of persons carrying on business in Greater London".
That is who we require the assembly to consult. To borrow the Minister's words, it is inconceivable to me that an assembly doing its job properly in considering the mayor's budget would not do that. It puzzles me why the Government are not prepared to require the assembly to do just that and, instead, suggest that it is over-prescriptive. That comes from a government who told us the other evening that they require the mayor to have two political advisers and 10 members of staff, whether they happen to be full or part-time. That is not over-prescriptive. But to require the assembly to consult the people as the Government laid down in Clause 27 is over-prescriptive.

The Minister said that what is or is not prescriptive is in the eye of the beholder. We have an excellent example of that now. This is not the time to press this further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dixon-Smith moved Amendment No. 214:

Page 199, line 31, leave out sub-paragraph (3) and insert— ("(3) The final drat t budget, with or without amendment, shall be the Authority's consolidated budget for the year if approved by a majority of the Assembly members voting.").

The noble Lord said: With the leave of the Committee, in moving Amendment No. 214, I shall speak also to Amendments Nos. 215 to 219.

As drafted the Bill creates a situation which makes it possible for the mayor to pass a budget with the support of only one-third of the members of the assembly. That is the implication of the requirement for two-thirds of the assembly to vote for an amendment in the final draft.

Amendment No. 214 seeks to allow the elected assembly to provide proper checks and balances upon the mayor's budgetary powers, restoring accountability and helping to prevent possible financial irresponsibility. The Bill gives virtual dictatorial powers to the mayor and the assembly is almost powerless to intervene in the budget-making process. No assembly of which I am aware has ever had less power in a democratic country.

The Government's White Paper on London said that the assembly, must be much more than a talking shop"— paragraph 1.14. Again, in paragraph 3.6 of that White Paper the Government said that, the assembly will provide an essential check and balance to the power of the mayor". The budgetary procedures in the Bill as currently drafted make a mockery of those promises. The assembly could not be a check or a balance on the executive power of the mayor in this instance; it could only be a puppet.

If the Government do not accept Amendment No. 14—it is fairly moderate, requiring only that the mayor obtain a simple majority to pass a budget—it will prove what many of us fear—that while New Labour may preach democracy, in reality its policies are those of control. These amendments put the GLA's budgetary provision on a normal democratic footing in line with the position in any other authority. The propositions on the face of the Bill are the equivalent of allowing the Chancellor of the Exchequer to bring to the House of Commons a budget which could be passed with a two-to-one vote against it. I cannot imagine the furore that would be created if a legislative proposal was introduced to make that possible. But that is what we are being invited to consider in this Bill as drafted.

Without these amendments, the Government's promises of democratic accountability in the budget-making process of the Greater London Authority will not be fulfilled. I await the Minister's reply with interest, but this may be a matter which will cause some difficulty. I beg to move.

Baroness Hamwee

We have a lot of sympathy with this set of amendments. We, too, find it quite wrong to put the mayor in a position where it will be difficult for the assembly to overturn or alter the budget. We tabled an amendment in the next groups which contains a similar thrust. We, too, would like to see the assembly voting on the basis of a simple majority with regard to the draft budget.

Perhaps I can ask one or two questions for clarification. The noble Lord, Lord Dixon-Smith, moved Amendment No. 214, which seeks a simple majority in respect of paragraph 8(3), the approval of the final draft budget. I do not believe that his set of amendments proposes a change to paragraph 8(4) which deals with amendments. I am not sure therefore whether or not he is proposing that amendments require a two-thirds majority and the final draft budget a simple majority.

In connection with Amendment No. 217, which proposes the duty contained in paragraph 8(7) to approve the final draft budget, is that to be a duty of the authority rather than the assembly? The authority embraces the assembly and the mayor. I am not entirely clear about the comparative roles of the two entities—if I can call the mayor, masculine or feminine, an entity. But the principle point of the amendments, which is that the Bill should not create a situation which is close to unworkable, should be retained.

Baroness Farrington of Ribbleton

This group of amendments seeks to alter the assembly's role in approving the GLA's budget. The intention appears to be to ensure that there is no prospect of the assembly failing to vote on and approve the GLA's consolidated budget. As drafted, Schedule 5 allows for the possibility that the assembly may fail to approve the mayor's final draft.

The next group of amendments—the noble Baroness, Lady Hamwee, referred to these—give me an opportunity to explain how the procedures in Schedule 5 have been carefully designed to give the lead to the mayor, to provide a proper role for the assembly, to avoid deadlock and to ensure that a budget is set. It would not be acceptable for the assembly to decide the GLA's budget by a simple majority. That would be entirely out of kilter with the respective roles of the mayor and assembly. The details of paragraphs 8 and 9 of Schedule 5, which this group of amendments seeks to alter, are the end of a carefully designed process which needs to be considered as a whole.

While these amendments purport to give the assembly greater power, they could in fact lead to deadlock, with the GLA having no budget at all if the assembly failed to vote or agree on the mayor's final draft by the end of February. The noble Lord, Lord Dixon-Smith, said that was not a normal process and made a direct comparison with local authority structures generally. He wanted to stop the assembly being a puppet. The noble Lord fails to recognise that the entire procedure is based on a different model—one that gives the assembly a strong role in scrutiny, and executive powers to the mayor. Those powers are not dictatorial but are part of a new structure in a new system.

The noble Baroness, Lady Hamwee, referred to one reason that the amendments are defective, when she referred to paragraphs 8(3) and 8(4). For that reason also, the amendment is not acceptable and I urge the noble Lord to withdraw it.

6 p.m.

Lord Phillips of Sudbury

Before the Minister sits down, may I ask—I hope not unfairly—whether she is aware of any precedent for such a majority?

Baroness Farrington of Ribbleton

It would be difficult to draw on a precedent when the proposal before the Committee is a totally new structure.

Lord Phillips of Sudbury

I was thinking in terms of other democracies, where the division of powers that is prevalent in the Bill is common enough—but I know of none where a two-thirds majority is required.

Baroness Farrington of Ribbleton

At this stage, I bow to the noble Lord's greater knowledge. If I can find a way of demonstrating greater knowledge than his, I shall do so in writing.

Baroness Young

Listening to the Minister, I was slightly surprised at the arguments that she adduced against my noble friend's amendment. She started with the proposition that the assembly was quite unlike anything else in local government. That statement is one with which we can all agree—although a great number of alarm bells will ring in my head if the assembly is taken as a model for other towns that might have directly elected mayors, because the precedent is most undesirable. I was glad to hear what was said by the noble Baroness, Lady Hamwee.

The Minister said in defence of the assembly that it is not similar to anything else. She then explained that the whole London procedure is different and that that the powers given to the mayor are a new structure in a new system. That may be a statement of fact, but it is not an argument in support of giving the mayor what are effectively dictatorial powers over the budget. We all agree that the budget will be the most important thing for the mayor. The budget is the most important thing for any organisation. If the mayor can ultimately overrule the assembly, that cannot possibly be regarded as democratic. That may be different and new, but it is certainly not democratic in relation to anything in local government that I have come across—and not democratic in relation to other constitutions. It sets a dangerous precedent.

It may be that the amendments are not correctly drafted, but they raise an important principle. I hope that the Government will look at all this again.

Lord Brooke of Alverthorpe

There are a variety of reasons for introducing change to London—not least the fundamental issues of democracy and efficiency. One problem we have in local government is that democracy is in an ever-downward spiral with regard to the accountability to the electorate of those elected. The proposed change relates to efficiency, but also to democracy for London, with the aim of getting a greater number of people involved in a new type of democracy compared with the traditional model used in local authorities and county councils. That change requires the Government to introduce through Parliament new structures to create a balance between the elected assembly, mayor and electorate.

The budgetary approach will, of course, be important. It is impossible to envisage a situation in which, in year one, there could be a complete stalemate between the mayor and the assembly, with the matter sent back to the public, who we hope will vote in significant numbers.

I hope that people are prepared to be bold and will try to understand the new structure, with its attempts to introduce greater democracy on a larger scale as well as producing a more efficient operation than in the past. I hope that the Opposition will withdraw their amendment.

Lord Birdwood

I appreciate the Government's motivation in trying to create a structure having a high degree of lubrication, which majority voting would achieve. I cannot think of the social dynamics of a body that would find it in its heart to oppose nearly every budget put before it.

I have some intellectual curiosity about whether the proposal was a pure creation from the Pandora's Box of the government draftsman; or was a model from anywhere else in the developed world used as a template?

Baroness Carnegy of Lour

It was refreshing to hear the noble Lord, Lord Brooke of Alverthorpe, describe some of the thinking behind the Bill because it assists those of us on these Benches to hear other than members of the Government Front Bench explain something so new and different.

Is it the idea that the mayor's budget will get a fair wind and be amended only if it has something badly wrong with it in the view of the electorate? My experience of a two-thirds majority is that which I had to operate on an education committee if we had to dismiss a teacher. It is difficult to achieve a two-thirds majority on a council when one is not dealing with a matter of party politics.

The assembly will be elected by proportional representation, and that, in addition to the two-thirds majority, will make it difficult to amend the budget. Is it the idea that the mayor should get away with it unless there is something so pressingly wrong with the budget that it is possible to assemble a two-thirds majority against it? That is the only reason that I can think of for the Bill being constructed in the way that it is. As my noble friend Lady Young said, that is not the normal way to approach a democratic decision in local government.

Baroness Farrington of Ribbleton

The word "democratic" is used by different people in different ways. The framework of the structure put to Londoners in the referendum embodied an executive mayor and an assembly with the primary task of acting as a body of scrutiny, but also of serving in various capacities on bodies working within the overall strategy established by the mayor.

Within that concept, it is important that there should be a separation of powers between an executive mayor and an assembly. It is entirely right that an executive mayor should be in the lead in deciding the GLA's budget. We are very concerned to ensure that there is no deadlock, which would leave the GLA with no budget. There needs to be a means of setting the budget in the extremely unlikely event of the mayor failing to set one. Schedule 5 accommodates such factors. As the noble Baroness, Lady Carnegy of Lour, said, it is difficult, but not impossible, to get a two-thirds majority. It involves people thinking very seriously and coming together. That is an important feature of the proposals before the Committee.

The noble Baroness, Lady Young, raised the issue of how we had developed this particular model. It is not a model based on a rigid blueprint which has been transposed from one place to another. Indeed, it comes from looking at a variety of different models and different relationships that exist between directly elected mayors and assemblies or councils of one sort or another, both within Europe and the United States of America. We believe it is important for the assembly to be able to participate in, but not dominate, the budget process.

The procedures set out in Schedule 5 will allow the assembly to have a real influence on the level of overall spending, on the level of spending by each of the functional bodies, and on spending on different services. We believe that the proposals before the Committee get that balance right.

Baroness Young

I am sorry to intervene once again, but I must say that I was very surprised to hear the Minister call the referendum in aid of her argument. After all, only 34 per cent of Londoners voted for this. The idea that everyone who voted actually voted for a mayor and an assembly with these particular powers is beyond belief.

Baroness Farrington of Ribbleton

The party of the noble Baroness and that of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Tope, certainly did all they could to raise the models that they wished were before Londoners. In every election—be it a European parliamentary election or a referendum election—the parties claim victory with a majority of those voting in support of their arguments, whether the percentage is 15 per cent, 12 per cent or 35 per cent.

6.15 p.m.

Lord Dixon-Smith

I pick up on the last point. We are saying that it should be the majority of those voting who give the final approval of what is to happen. Surely that applies equally to the budget and to everything else. Perhaps I may return to where the debate began. However, before I do, I should like to say that I am most grateful for the support I have received from Members of the Committee on this side of the Chamber.

I should point out to the noble Baroness, Lady Hamwee, that the amendments we propose would make it possible for a simple majority to vote both for amendments to the budget and, indeed, for the budget. But at the end of the day it is the duty of the authority—and the authority in this instance is the mayor and assembly acting together—to approve the budget.

The extraordinary feature about Schedule 5 is that it appears to sanction a budgetary procedure which admits that there can be failure and allows a budget to be approved which does not have the approval of the authority—only the approval of the mayor. I think that that is quite unprecedented—new authority, or no; new system, or no; new democracy, or no. The Minister admitted that the whole process could lead to deadlock. This is a new model and a different model. To me, it is a very strange model of democracy. I find it absolutely unbelievable that the mayor cannot get agreement, or that the mayor and the assembly working together cannot get agreement.

The mayor's powers of patronage over the assembly are perhaps worthy of mention at this point. Out of an assembly of 25 members, the mayor can appoint 12 members to the police authority, nine members to the fire and emergency planning authority and four members to the London Development Agency. Eleven of the 25 members of the assembly are elected from party lists, which, I suppose, might just be an embarrassment to the mayor. However, it seems quite unlikely that the assembly will not have a majority of members from the party of the mayor, unless he stands as an independent. Of course, politics is always an interesting process.

I do not see how we can accept that one can have a new form of democracy where a minority rules. To me, that is a contradiction in terms; new system, or no. The comparison that I made was not with the normal situation that exists in any local authority's budgetary process, but the process which goes on in the other place over the nation's budget. It seems to me that London is being asked to accept, not that a majority view may prevail, but that the mayor, in this new form of democracy, shall have the right to dictate. That may be acceptable to the Government but I have to say that it is not acceptable to me. We have had a most interesting debate. I shall study with care in Hansard everything that has been said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hamwee moved Amendment No. 214A:

Page 199, line 34, leave out ("two-thirds") and insert ("a majority").

The noble Baroness said: In moving the amendment I shall speak also to Amendment No. 224D. With this amendment we turn to the paragraph in Schedule 5 which deals with any amendments to the mayor's budget. It is for this that we propose a simple majority. We are concerned here with amendments to the budget that we regard as crucial. As we read the Bill, the final draft is a matter for a simple majority. However, there is always the sword hanging over the assembly's head that, if it cannot agree, it is the mayor's budget anyway.

Amendment No. 224D deals with the provision requiring two-thirds of the assembly to agree any amendments to the mayor's draft calculations. In considering the Government's proposal, I wondered whether they were concerned about the mayor's autonomy and flexibility. If so, I think it is rather touching when one considers the very considerable powers on the part of the Secretary of State in the Bill, though admittedly not in this paragraph. I have in mind the powers as regards the overall control, which will work its way through into the budget. I also assume that the Government are concerned to ensure that there will be no frivolous amendments to the budget. However, as was said in the previous debate, if the assembly is to be a real check and balance on the mayor, it must have a realistic opportunity to exercise that duty.

We do not seek overwhelming powers in this amendment. We do not propose that the mayor shall not be in the lead in this matter. I have to confess a degree of admiration for the Government and whoever drafted the proposal in the Bill because, superficially, to achieve acceptance for a measure by two-thirds of the assembly would appear to require the mayor to be persuasive and to take the assembly with him or her on the relevant measure. However, as other Members of the Committee have made clear, to obtain the agreement of two-thirds of the assembly to an amendment will be a difficult exercise, unless, of course, the mayor has gone right off the rails. However, let us assume that we shall not have a mayor who goes completely off the rails. The simple majority which we seek is not, in our view, out of kilter—to use the Minister's words—with the respective roles of the mayor and the assembly. It is out of kilter only if one accepts that there will be a strong mayor and a rather weak assembly.

We also wish to consider what constitutes scrutiny. That, after all, is the assembly's primary role. We do not believe that it is adequate to allow the assembly to articulate its concerns but not to demonstrate them in a vote which will have a real effect. The Government fall back on the argument that the referendum in May of last year provided the detailed framework for the new body. I regard that rather as a fall-back position because, as I believe the noble Baroness, Lady Young, said, one did not expect Londoners who voted at that time to know all the detail of the proposal. In any event, the measure was not a manifesto commitment in the sense of a general election manifesto. We are seriously concerned about the good workings of the new authority. I beg to move.

Lord Dixon-Smith

After the bombardment to which we subjected the Committee in the previous group of amendments, I am delighted to support the noble Baroness on this issue. The measure constitutes a different form of expressing what I have been saying. I am delighted to support the noble Baroness.

Baroness Farrington of Ribbleton

These amendments would completely overturn a fundamental feature of the legislation; namely, that there will be a separation of powers between an executive mayor and an assembly to provide scrutiny.

If I recollect correctly, the position adopted by the party of the noble Lord, Lord Dixon-Smith, was that the only person who should be elected, and therefore have the democratic right to set budgets for London, was the mayor. The noble Lord's party was in favour of an elected mayor but not an elected assembly. Presumably if that had occurred, we would not have had the elected scrutiny body elected by all Londoners.

It is entirely right that an executive mayor should be in the lead in deciding the GLA's budget. However, after the comments made by the noble Lord, Lord Dixon-Smith, it is extremely important to repeat that our proposals seek to avoid deadlock; not, as he said, to create it. There needs to be a means of setting the budget in the extremely unlikely event that the mayor fails to set one.

Amendment No. 214A would, in effect, give the role of deciding the GLA's budget to the assembly. The mayor's role would be limited to submitting draft and final budgets to the assembly. A simple majority of assembly members could throw his plans out and substitute their own. The mayor would not even have a vote in deciding the budget in those circumstances. The assembly has the ability to influence the mayor. The mayor must consult the assembly before preparing a draft. The assembly may amend a draft by a simple majority. If the mayor's final draft does not include the assembly's amendments to the first draft, the mayor must give reasons why that is the case.

Amendment No. 224D would similarly leave the mayor with no real say in making substitute calculations. An executive mayor who is responsible for deciding strategies must be in the lead in that matter. The procedures set out in Schedule 5 will allow the assembly to have a real influence on the level of overall spending, the level of spending by each of the functional bodies, and on spending on different services.

A power to amend the mayor's budget by a two-thirds majority ensures that there is wide consensus among assembly members that the mayor's budget is significantly flawed in some respects, and, crucially, wide consensus about the changes needed to put things right. Then the assembly will be able to act.

Reference has been made to the political party of a mayor and which party would constitute the majority in the assembly. That is a rather old-fashioned way of looking at the procedure that is to be put in place. A two-thirds majority would comprise people from all parties or none. It has been said that the referendum did not constitute a manifesto commitment. The Government have kept faith with the people. The manifesto stated that the Government would put forward proposals and would give the people of London a referendum on this matter. It is a bit much to say that the Government cannot claim support in the referendum for the proposals that are before us. These amendments are not in line with the proposals that were put to the people of London. I urge the noble Baroness to withdraw Amendment No. 214A.

Lord Dixon-Smith

Before the noble Baroness sits down, I should like to make the following point. Whatever proposals we or my colleagues may have put forward as regards the possible membership of the assembly, the assembly, once in place, will vote on the basis of a simple majority. At that level, at any rate, the process would be democratic. I wish we could stop referring back to the referendum. If the referendum had made clear that the budgetary proposals of the Greater London Authority could emerge without the approval of the authority, or could be passed on the back of a minority vote, I doubt very much whether the people of London would have accepted such a proposal, referendum or not. There is a fundamental disagreement of principle here. As I say, I support the amendments of the noble Baroness. I have heard nothing to persuade me to change my mind.

Baroness Young

Having supported my noble friend Lord Dixon-Smith, I should like to support the noble Baroness, Lady Hamwee. She makes a serious point in the amendment which deserves to be looked at. The proposal in the Bill for the separation of powers is based presumably on the separation of powers in the American constitution, on which it is perfectly possible to have deadlock. The separation of powers allows for that in a way that our constitution does not. In order to overcome what is clearly a possible constitutional deadlock, the Government have decided that they will remove the democratic element and say that the mayor will have overriding power.

The noble Baroness said that the assembly will have influence. Yes, it will have influence—but it will not have power. That is the difference. There has always been a fundamental prerequisite of democracy in this country—which has stood the test for a good many years—of no taxation without representation. In London, quite clearly, as my noble friend and the noble Baroness, Lady Hamwee, have made clear, there will be taxation—not through representation through the assembly, but through the one mayor that people may have voted for several years before. To a very large extent he will be able to run unchecked except for this extraordinary two-thirds majority. I think this is an extremely dangerous principle. I have heard nothing this afternoon which leads me to think that the Government have understood the path down which they are going.

6.30 p.m.

Baroness Hamwee

I do not wish to suggest that the Minister is not capable of responding to those points; however, I regard them as unanswerable. The Minister's argument almost seemed to suggest that the assembly may as well have no role at all when it comes to the budget. I am sure we will return to this issue at the next stage. In order that it is again on the record, I shall merely make the point now that we are not proposing that the Minister should not be in the lead; that role still remains.

Lord Tope

The mayor.

Baroness Hamwee

The mayor should be in the lead. It might as well be the Minister. I have written down "M in lead" with not enough gap between the words.

We look forward with interest to all parties and none playing their part and to the whipless culture that that suggests. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment Nos. 215 to 219 not moved.]

Lord Tope moved Amendment No. 219A:

Page 200, line 5, leave out ("other") and insert ("earlier").

The noble Lord said: I beg to move Amendment No. 219A, which stands in my name and the names of my noble friends.

The amendment refers to paragraph 10 of Schedule 5 which gives the Secretary of State power to change the February dates for the budget, which we were debating earlier, to, such other day as may be specified". The purpose of the amendment is to restrict that power to enable the Secretary of State to amend it to "such earlier day". We debated earlier our view that the February dates are already too late; certainly later than desirable. If the Secretary of State has power to make those dates even later, then that becomes even more undesirable.

Paragraph 151 of the Explanatory Notes to the Bill states: The purpose of this power is to accommodate any delay to the Local Government Finance Settlement". In other words, what the Government mean by any "such other day" is any "such later day".

The effect of the GLA setting its budget and its precept any later than the last day of February—without presumably a similar permission for the London borough councils to delay their budget making—and all the consequences that will flow from that, make the whole process a mockery. It would be wrong. We must stick to this deadline at the very latest. We would wish to see the Secretary of State with the power to set an earlier deadline—indeed, we would wish him to exercise that power for the reasons we debated earlier. The Government's purpose in this provision of allowing the date to be later would make any meaningful consultation—even with London borough councils, let alone with the wider London interest groups£impossible. It would make the budget process for London borough councils even more difficult, if not impossible.

We propose that the Secretary of State should have the power to set an earlier date, but certainly not a later date.

Baroness Farrington of Ribbleton

Schedule 5 provides that the Secretary of State may, by order, change the 1st February date, by when the mayor must present his draft budget to the assembly, and the last day of February date, by when the GLA's budget must be finalised, for any other date he may specify. The amendment would remove the Secretary of State's power to specify dates later than the statutory dates in the GLA's budget process, as the noble Lord said in moving his amendment.

The power is needed because the GLA, like other major precepting authorities, will not be able to finalise its budget until it has the final figures for RSG and NNDR (national non-domestic rates) that are set out in the local government finance settlement. The power to amend the GLA's timetable would be used if for some very good reason the settlement were delayed, making it difficult for the mayor to prepare a draft budget and impossible for the budget to be finalised by the specified dates.

The effect of the amendment would be to remove the Secretary of State's ability to specify any revised date. It would be absurd to prevent him from using his discretion in deciding whether to take account of a delay. Surely it makes sense to allow him to decide whether such a delay is serious enough to require him to specify later dates for preparing a draft budget. We are not talking about normal practice but about serious circumstances where it would be necessary for the power to be used as a logical move to assist the GLA. For that reason we believe the amendment is unreasonable and ask the noble Lord to withdraw it.

Lord Tope

Before I consider what to do with the amendment, can the noble Baroness say whether the Secretary of State currently has the power to permit London borough councils to set their council tax by a later date than that provided in statute at the moment?

Baroness Farrington of Ribbleton

I am not aware whether the legislation the noble Lord refers to applies in London in the same way as elsewhere in the country. My understanding is that it does not apply. In this case we are talking about the equivalent of county councils as opposed to the GLA. I will write to the noble Lord about whether that power exists in that regard.

Baroness Hamwee

Could the Secretary of State postpone the GLA's announcement, as it were, the finalisation of its budget, beyond the date when the London boroughs have to set their budgets and start sending out bills? I am not suggesting that would be a sensible thing to do, but will it be allowed?

Baroness Farrington of Ribbleton

Even if it were possible in theory it would be ludicrous were it to be applied. It could only be a hypothetical situation.

Lord Bowness

Does it not verge upon the ludicrous to allow the Secretary of State to defer the date from 1st February to an even later date, as is specified on the face of the Bill? There will be enormous difficulties. Rather than a regulation to this effect, it would be more appropriate to place a duty on the Secretary of State to announce the rate support grant at an earlier date in time for people to set their budgets.

Lord Dixon-Smith

I find the debate quite fascinating. Of course the Government will say that they envisage having to use this power only in a particular emergency situation and all the rest of it. I should prefer not see this power on the face of the Bill in order that the Greater London Authority has to approve its budget itself. That would make more sense.

Lord Tope

It would be clearer and, if I may say so, more honest if this paragraph were to say what the Government mean—that is, not "other day" but "later day"—and we were clear that it meant a later day. I am subject to correction, but I think I am right in saying that the deadline by which the London borough councils—and presumably district councils as well although in this context we are talking only about London borough councils—have to set their council tax is determined by the amount of notice that they have to give before the start of the financial year. If memory serves me correctly, it is either 10th or 11th March. Am I about to be corrected?

Baroness Farrington of Ribbleton

Perhaps I may help the noble Lord. The Secretary of State cannot change the date by which a precept must be set for the GLA or any other authority, but a precept is not invalid if it is set late.

Lord Bowness

Can the Minister help us? Is there not a statutory date by which the borough councils have to set the council tax rate?

Baroness Farrington of Ribbleton

Yes, we are talking about the precepting authority here and the difference between the GLA and the borough councils. The borough councils do have to set a date.

Lord Bowness

I am grateful to the Minister for that, but bearing in mind that the date is, as I recall, in March, this date of 1st February could be deferred to such a point that it is virtually impossible to call a meeting of the borough council and set the appropriate level for council tax. As I understand it, that is what the noble Lord, Lord Tope, is attempting to point out. He is also trying to point out how impossible life would be if the date of 1st February could be deferred to any great extent.

Baroness Farrington of Ribbleton

We are not talking about deferring it to the point where it would not be possible to set a rate within the legal time; we are talking about circumstances which would be quite exceptional, where it was necessary for this power to be used. We are aware that the period of time necessary for the boroughs to set their rate by 11th March must be reasonable and the Secretary of State must automatically be required to act in a reasonable way. All we are seeking to do is to ensure that there is no problem should very exceptional circumstances arise.

6.45 p.m.

Baroness Hamwee

One of the concerns in my mind, which has grown during the course of this debate, would be what the Secretary of State might do if we find ourselves in the situation where the Secretary of State and the Government are of one party and the mayor is of another. Arguing over precisely what is "reasonable" is not going to help practical decisions. One can imagine the rows that there might be between central Government and the authorities, the two parties to the argument. This provision, which allows the possibility of later date, if not being completely unreasonable, could nevertheless be used in a very mischievous fashion.

Lord Tope

I have concerns about both February dates. As I said earlier, the beginning of February date, is too late to allow for proper meaningful consultations, but that may be forced upon us by what I accept will be exceptional circumstances. However, we are legislating for exceptional circumstances and these provisions are put forward to provide for exceptional circumstances.

I have an even greater concern about the last day of February being the last date by which the mayor is required to produce his or her final budget. I may not have completely understood what the Minister said just now, but I thought she was saying that the mayor would still have to levy the precept by the last day of February even if the budget can be delayed by order of the Secretary of State. I am not entirely clear how a precept is going to be levied before we have a final budget. Also, I do not think that I have had an answer to my question about whether the Secretary of State has power elsewhere in statute to amend the last date by which London borough councils have to set their council tax. I believe this to be 10th or 11th March.

Baroness Farrington of Ribbleton

I am sorry the noble Lord did not hear me. I said it is 11th March, and the Secretary of State does not have that power.

Lord Dixon-Smith

I think we are going to pursue this point for some considerable time, but it seems to me that the easy option here for the Government would be to fall back on Clause 26(8) which states: The Secretary of State may by order impose limits on the expenditure which may be incurred by the Authority by virtue of section 25(1) above". Also, the Secretary of State may by regulation do one or both of the following: alter the constituents of any calculation made under subsections (4) or (5) of Clause 70, whether by adding, deleting or amending any items. Subsection (4) in aggregate, if I have understood it correctly, describes the expenditure of the authority. Subsection (5), if I have understood it correctly, describes the income of the authority.

The truth is that the Secretary of State, if he chooses to exercise it, has power to dictate the budget of the Greater London Authority. I would suggest that if the circumstances should become as exceptional as this debate would appear to suggest, he might feel inclined to exercise those powers rather than continue with what might be a difficult problem. I certainly accept that that would cause all the boroughs immense difficulty if in fact the budget of the Greater London Authority were not determined at a sufficiently early date to make it practical for all the London boroughs which are party to collecting the revenue for the GLA to set their precepts, because their precepts have to follow on as a consequence of the GLA's precept, and they cannot be made without it.

I think that perhaps we are slipping in our capacity for joined-up thinking here and we are not looking at the totality of the Bill but only at part of it. I am not sure that is a helpful thing to do, and still less am I certain that the Government would wish to be reminded that they have those powers.

Lord Tope

We are envisaging here exceptional circumstances in which the local government finance settlement is so delayed that the Secretary of State feels it necessary to exercise the powers that this schedule would confer on him to allow the mayor to delay the setting of the final budget beyond the end of February. However, the Secretary of State has no such power to extend the deadline for the London borough councils, which will be affected in exactly the same way by exactly the same local government finance settlement. So I cannot understand why we should be asked here to give greater power in respect of the GLA than exists for the London borough councils—power which, if ever it is used, would put those councils in an absolutely impossible situation.

We shall not press this amendment today but we shall certainly return to it. I hope that here we have unearthed a difficulty which I am quite sure the Minister, with her long experience, will very well understand is a difficulty which perhaps the Government, in the drafting of the Bill, had not foreseen. We shall certainly return to this and I shall certainly want the Government to explain to me, as currently a London borough council leader, how we would deal with a situation where the GLA's budget was set only days before we had to set our rate for council tax, or even theoretically after we had set the council tax rate—a situation in which the Secretary of State was actually powerless to help. For the time being, unless the Minister has something urgent to say to me—

Baroness Farrington of Ribbleton

I think there is some misunderstanding. I respect the years of experience that the noble Lord had at the time of the GLC, but he is speaking rather as though the setting of the London boroughs' budgets is dependent on knowing well in advance the amount being set by the GLA. There are two different issues: one is the date by which the Secretary of State would be bound as well, which is the date for legally setting the rate, and the Secretary of State would have to have regard to putting that into effect. But noble Lords from those areas which do not have two tiers of authority are tending to contribute to the debate as though it were essential for all the details to be known before the borough authority could take its decisions. Its decisions are independent. Those decisions and the sum total both have to be included in the levying of the rate at the council meeting. Those are two different issues. I see the noble Lord, Lord Dixon-Smith, nodding his head. I assure the noble Lord, Lord Tope, that it will not be possible for the Secretary of State to use the powers proposed in the Bill in order to prevent the borough council from acting in a legal way.

Lord Bowness

I do not want to delay the proceedings, but, as I understand it, the noble Baroness seems to be saying that not knowing what the precept will be does not prevent the borough council settling its own budget. However, the political reality is that the borough council, since it levies the council tax and actually collects the money, will want to know what the total bill is before it makes its final budget and levies its council tax. I understand what the noble Baroness is saying in theory. However, I do not believe that from her experience of local government, albeit in a precepting authority, she would expect the collector to make final decisions without knowing what the bill would be.

Baroness Hamwee

What action should the boroughs take if they consider that the Secretary of State is behaving unreasonably? We are told that this provision does not allow the Secretary of State to behave unreasonably. I accept that, at any rate for the purposes of this argument. But if there is a query as to whether or not the Secretary of State is being unreasonable, what can the boroughs do? One cannot realistically envisage the boroughs going to the court to require the Secretary of State to come out with a decision. I am unclear as to how the provision will operate if there is a real problem.

Baroness Farrington of Ribbleton

The London boroughs will set their budgets and council tax by 11th March. They should also calculate the total council tax by that time, and there is no difficulty. The problem to which the noble Baroness continues to refer does not arise. If the GLA precept is delayed, the London borough will want to set the final tax within the due date, and the information will be available for it to do so. We are not talking about the Secretary of State delaying between 1st February and 1st April. We are talking about only a marginal delay as a result of circumstances beyond anyone's control.

Baroness Miller of Hendon

I hesitate to enter the debate at this late stage, but if we are talking about only a very small matter, I do not know why the Government are unable to accept the amendment. The reference in the Bill is, such other day as may be specified in the regulations". It can mean anything.

Lord Tope

I shall read the debate with considerable interest. The Minister appears to be saying that the GLA can set its precept without having finalised its budget. I suppose that that is theoretically possible, but it would be rather difficult.

Baroness Farrington of Ribbleton

I did not say that.

Lord Tope

The Minister indicates that that is not what she said. Clearly, I need to read the Hansard report of this debate carefully. It seems to me that we are giving the Secretary of State power in relation to the GLA that he does not have in relation to the London borough councils, which will suffer exactly the same difficulties from a delayed finance settlement as will the GLA. We are creating an extremely difficult situation. We tabled this amendment in order to set the dates earlier; but the argument has been about the Government's intentions of enabling the dates to be set later. We have exposed some very real difficulties that will arise in the exceptional circumstances for which we are legislating. I shall read the debate carefully. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Whitty moved Amendment No. 219B:

Page 200, line 5, at end insert—


.—(1) The Mayor shall as soon as practicable publish each of the following documents

  1. (a) the Authority's consolidated budget for the year; and
  2. (b) the component budget of each constituent body for the year;

(2) In this paragraph "relevant document" means any document required to be published under sub-paragraph (1) above.

(3) A copy of each relevant document shall be kept available for the appropriate period by the Mayor for inspection by any person on request free of charge at the principal offices of the Authority at reasonable hours.

(4) A copy of any relevant document, or any part of a relevant document, shall be supplied to any person on request during the appropriate period for such reasonable fee as the Mayor may determine.

(5) In this paragraph "the appropriate period" in the case of any document is the period of six years beginning with the date of publication of the document pursuant to this paragraph.").

On Question, amendment agreed to.

Schedule 5, as amended, agreed to.

Clause 72 agreed to.

Clause 73 [Calculation of basic amount of tax]:

Lord Dixon-Smith moved Amendment No. 220:

Page 39, line 26, leave out paragraph (a).

The noble Lord said: After all the fireworks, the noble Lord opposite will be relieved to hear that this simple little amendment is purely exploratory. At present, all national non-domestic rates are distributed through all existing authorities. That includes a subscription which goes to the Metropolitan Police and the London Fire and Civil Defence Authority. It goes to the boroughs and all the local authorities across the land. That is a 100 per cent take-up of the national non-domestic rate. Now we are creating a new authority—and thus more than 100 per cent. But the pool is still the same.

I acknowledge that some of the parts of the Greater London Authority are already receiving national non-domestic rate as a contribution towards their expenditure. To that extent one feels no concern. But we shall now be distributing those funds to, let us say, a further 0.1 per cent of authorities. I am concerned that the 0.1 per cent might cause some difficulty, albeit marginal, to existing authorities. I thought it worthwhile tabling this amendment in order to enable the Minister to do two things: first, to explain what the new arrangements will be for the distribution of national non-domestic rate; and secondly, to demonstrate how the change will not affect any existing local authority in an adverse way. I look forward with a keen appetite to the Minister's response. I beg to move.

Lord Whitty

I was glad to hear the noble Lord describe this as an exploratory amendment. I was slightly unclear about the intention were he to pursue it in a legislative way. It might have been to ensure that the GLA did not receive a share of the non-domestic rate. It is our intention that the GLA should receive a share. In terms of its knock-on effects, the position would be that, if the GLA received a share, that would not have an effect on authorities outside London. In effect, there would be a corresponding decrease in the amount of redistributed national non-domestic rates going to other London authorities. But there would be compensating changes in the RSG entitlement for those authorities. In other words, one would have to look at the total system. We are talking about relatively small amounts.

If the amendment were pursued, the effect would be to increase council taxes throughout London, and potentially to leave the GLA, theoretically at least, with an excess of income over expenditure. Clearly, we should not wish that to be the outcome. However, as the noble Lord is not pursuing the amendment, I leave it to him to decide whether my explanation of what would happen is sufficient for him or whether he requires further details, either now or at a later stage, or in writing, to explain exactly how the process would work. I hope that he will withdraw his amendment, subject to seeking further clarification in that respect.

Lord Dixon-Smith

If I have correctly understood the Minister, his intention is that the changes resulting from the introduction of the GLA should not affect the situation outside London, and if there is any variation within London it will be taken care of by adjustment of the general revenue support grant which the Government make to the London boroughs. I shall study what the Minister said and satisfy myself that that is the situation. I am grateful for his explanation. It should be a simple matter, and I hope it is. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7 p.m.

Lord Whitty moved Amendment No. 220A:

Page 39, line 43, after ("report") insert ("or determination").

The noble Lord said: In moving Amendment No. 220A I should like to speak also to Amendments Nos. 220B to 220D and 220G to 220K. This group of minor technical amendments is necessary because the general GLA grant will be the subject of a determination, not a report. All of the other items of income referred to in Clauses 73(2) and 74(4) are the subject of a report. These amendments merely ensure that the Secretary of State will be able to set out the amounts of general GLA grant that he considers relate to police and non-police services in a more appropriate place; namely, the determination in which the total amount of general GLA grant will be set out. Therefore, the amendments relate to terminology. Although there are a lot of amendments, they are designed simply to deal with that point. I hope that the Committee can accept the amendments. I beg to move.

On Question, amendment agreed to.

Lord Whitty moved Amendments Nos. 220B to 220D:

Page 40, line 4, after ("report") insert ("or determination").

Page 40, line 5, leave out ("(b) or (c)") and insert ("or (b)").

Page 40, line 7, at err insert— ("() in the case of the item specified in paragraph (c) of that definition, the determination under section 85 below for the financial year in question;").

On Question, amendments agreed to.

[Amendment No. 220E not moved.]

Baroness Hamwee moved Amendment No. 220F:

Page 40, line 40, lease out subsection (9).

The noble Baroness said: Amendment No. 220F seeks to omit from the Bill Clause 73(9). That subsection provides that if the precept is negative, council tax bills will not be reduced. I am in the slightly curious position of moving an amendment moved in another place by the honourable Member for Bromley and Chislehurst. I do not always have a great deal in common with him but here I believe that he has a point. The amendment would enable the GLA to notify the billing authorities, the boroughs, to levy a negative precept on its behalf; in other words, to reduce the burden on London taxpayers. No extra billing would be required for refunds because the amount billed by the borough would be reduced by this mechanism.

We have been urged to anticipate a lean and mean authority, according to the popular meaning of that term. I hope that it will not be an excessively mean authority The Government's response in another place was that the Minister could not conceive of a case for treating the GLA differently from local authorities in general, but the GLA is a different authority with quite separate functions. This amendment is entirely in line with the arguments that we have put forward today about transparency and the importance of the authority's relationship not just with the boroughs but all Londoners. I beg to move.

Lord Whitty

We dealt with the issue of the effect of a negative council tax at an earlier stage, and I believe that the same issues apply in relation to this amendment and non-police services. The noble Baroness has in a sense anticipated my comments. There is no obvious reason why the GLA should be treated differently from other local authorities in this respect. If there is a grant it should not be offset by a reduction in council tax for a different service area. It would be odd for us to alter that principle in relation to these provisions. I did not hear any specific argument advanced by the noble Baroness to indicate why we should change it in this respect when we did not accept the argument in the earlier debate and we do not accept it generally across local authorities.

Baroness Hamwee

I hoped that we might have had a slightly more imaginative reply, accepting that reasonable flexibility was something to be encouraged. We have not argued for a change with regard to other authorities because they are not the subject-matter of this Bill. But if something does not work as well as it might so that in effect money goes back into the pockets of taxpayers, it does not seem to us that the fact it cannot be undertaken in other authorities means that it should not be undertaken in London. We regard this as an important point, but clearly we are not making headway, at any rate at the moment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 73, as amended, agreed to.

Clause 74 [Additional calculations: special item for part of Greater London]

Lord Whitty moved Amendments Nos. 220G to 220K:

Page 41, line 41, after ("report") insert ("or determination").

Page 42, line 1, after ("report") insert ("or determination.'").

Page 42, line 5, leave out ("any of paragraph (b), (c) or (d)") and insert ("paragraph (b) or (c)").

Page 42, line 7, at end insert— ("() in the case of the item specified in paragraph (d) of that definition, the determination under section 85 below for the financial year in question;").

On Question, amendments agreed to.

Clause 74, as amended, agreed to.

Clauses 75 and 76 agreed to.

Clause 77 [Calculation of tax for different valuation bands]:

Lord Dixon-Smith moved Amendment No. 221:

Page 43, line 26, at end insert— ("(4) Where the precepting authority is the Greater London Authority, within one week of the Greater London Authority having calculated the amount to be stated under section 40(2)(a) in respect of any billing authority in Greater London in relation to each category of dwellings in that billing authority's area, the Greater London Authority shall cause to be published such amount in relation to each category of dwellings in that billing authority's area, these amounts to be expressed both as annual and weekly figures, publication to be by way of a prominent printed announcement in at least one local newspaper circulating in that billing authority's area and nominated by that billing authority.").

The noble Lord said: This amendment would oblige the GLA to publicise the consequences of its decisions about precept in the form of an estimate of its effect on council tax payers as soon as it has established its budget. This would enhance the accountability of the mayor and the assembly to London's taxpayers and so improve the democratic and open, I hope, nature of London's new authority. If we can ensure that the GLA publishes in local newspapers details of the amount for each category of houses in the area expressed as both annual and weekly figures, Londoners will be able to see exactly how much of their personal council tax bills arise from immediate decisions of the GLA. Thereafter, the Greater London Authority will not be able to hide the consequences of its spending decisions within an overall council tax bill. The boroughs must also determine their precept and, despite all of the potential difficulties in the process as a result of the Bill, an aggregate precept then goes to the council tax payer.

It is important for the council tax payer to know how the Greater London Authority taxes have been determined; and, more importantly, how the mayor and the assembly as the Greater London Authority are ordering London's affairs in the interests of London's residents; a mayor and an assembly whose decisions on taxation and spending are visible to the public immediately are more likely always to behave in a responsible manner. It seems to me that the Government cannot oppose the amendment.

In their White Paper, the Government promised that Londoners will be able to choose the person in charge of their city to ensure that he or she—I have included "she" for once; I must be slipping—is publicly accountable for his or her action. Our amendment ensures just that.

The White Paper also promised that under the new regime local people will better understand, and have a greater say in, expenditure and council tax decisions. In view of our previous debates, I admit that there is some doubt about whether local people will have any understanding of the process under which the Greater London Authority achieves its final budget decisions. Be that as it may, we have to go on.

The White Paper also stated that the Government are in favour of keeping spending in check. Our amendment, which will let people know immediately a decision has been taken, will help that.

The Government claim to be in favour of open government. I dare say that they will tell me that the amendment is unnecessary since it is similar to some which have been moved earlier today; and of course all this information goes out to the rate payer. If the Government chose to tell me that the amendment is unnecessary because of the assiduity of local newspapers which will be likely to take this calculation and interpret it immediately for its impact on a specific borough of London, that might be a reasonable explanation. But I do not regard the advent of a fairly closely printed, albeit detailed and clear, sheet of paper which sets out the Greater London Authority's decisions and their consequences, which arrives in the home of the council tax payer two and a half months later, as answering the point that the amendment seeks to bring home. I pay tribute to the press for the work that they do. But I suspect that the Government will tell me that the amendment is unnecessary for different but, to me, inadequate reasons. I beg to move.

7.15 p.m.

Baroness Farrington of Ribbleton

The noble Lord is not slipping; he or she is growing!

Under demand notice regulations brought in by the previous government in 1993, all council tax payers are sent a demand notice which is required to show the amount of council tax payable to a major precepting authority for their property. As a major precepting authority, the GLA is required to provide details to billing authorities so that they can be included.

The noble Lord obviously lives in a different household from many of us. In the past I have faced someone across the breakfast table, who looked at me sternly and said, "Are you responsible for this?" One of my sons also refused to be dropped off by me at a new girlfriend's front door to collect her because, as he explained, "Her father doesn't know you're the 'Rates Farrington' yet". So the noble Lord's world in which people do not peruse their bills in detail is one that I do not recognise.

All those people liable will therefore know the full details of the amount of GLA precept that they are required to pay. Publishing the information in local newspapers would involve local authorities in additional administration and costs which would have to be found from their budgets. For those reasons, I ask the noble Lord to withdraw the amendment.

Lord Dixon-Smith

I am grateful to the noble Baroness for her response to the amendment. It was entirely along the lines I expected. However, I am disappointed and shall study it. But I am grateful for the fact that the press will be more likely to do the job so that the amendment may be unnecessary. Although the Government's answer is factual, it is not adequate. It would have been better if they had been prepared to accept the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 77 agreed to.

Clause 78 agreed to.

Clause 79 [Substitute calculations under section 49 of the 1992 Act]:

Lord Whitty moved Amendment No. 221A:

Page 44, line 6, leave out subsection (2) and insert— ("() For subsection (1) (power to make substitute calculations) there shall be substituted— (1) A major precepting authority which has made calculations in relation to a financial year in accordance with—

  1. (a) sections 43 to 48 above (originally or by way of substitute),
  2. (b) sections 70 to 75 of the Greater London Authority Act 1999 and sections 47 and 48 above, or
  3. (c) sections 70, 71 and 73 to 75 of, and Schedule 6 to, that Act and sections 47 and 48 above (by way of substitute),
may make calculations in substitution in relation to the year in accordance with the relevant provisions. (1A) For the purposes of subsection (1) above, the relevant provisions are—
  1. (a) in a case falling within paragraph (a), the provisions specified in that paragraph; and
  2. (b) in a case falling within paragraph (b) or (c), the provisions specified in paragraph (c).").

The noble Lord said: In moving the amendment, I speak to the other grouped amendments which are technical in nature.

Amendments Nos. 221A, 221D, 222A, 223A, 223B, 223D, 224A, 225B and 225C ensure that, whenever the GLA carries out substitute calculations, either because it decides to or because it is required to, it does so under the relevant provisions, primarily Schedule 6.

If these amendments were not made, the Bill would appear to require substitute calculations to be made in accordance with Schedule 5. That would not be practical as Schedule 5 requires calculations to be made by the end of February, and the need for substitute calculations may well arise after that date.

Schedule 6 instead provides the appropriate procedure, and sets out the roles of the mayor and assembly in making the substitute calculations. The amendments make that clear.

Amendment No. 221B eliminates an unintended effect of the GLA's power to make substitute calculations. It makes clear that the mayor and assembly cannot reallocate money from one constituent body—that is, the GLA and the four functional bodies—to another part of the way through the financial year except in circumstances where they have to do so in accordance with Clause 81, so as to ensure that the Metropolitan Police Authority budget is adequate following a direction from the Secretary of State; or in accordance with Clause 82, in the event of an emergency or disaster. Apart from those two areas, the mayor and the assembly will have the power to make substitute calculations only to cut both the consolidated and component budgets. A newly elected mayor may wish to do that.

However, this does not mean that the mayor and the assembly have no powers to transfer money from one body to another. In a situation where there is an underspend, Clause 106 empowers the GLA, and, with the mayor's consent, the functional bodies, to pay revenue grants to one another. This will ensure that any "spare" money need not go to waste.

Amendments Nos. 221C and 223C remove unnecessary regulation-making powers from the Bill, and make clear under which powers the regulations referred to in Clauses 79 and 80 are to be made. These are technical and clarifying amendments. I beg to move.

Baroness Hamwee

Perhaps I may ask the Minister a question on Clause 106 to which he referred. It provides that the authority can pay grants. When I read subsection (1) I had understood that that provided the necessary conduit from central grant through to the functional bodies. Subsection (2) deals with moving money between the functional bodies. Is it correct that money can be moved only from the budget of one functional body to another if that is instigated by the functional body which has the excess? That is how Clause 106(2) is worded and it was one of the reasons for the concern I expressed on an earlier amendment.

Lord Whitty

The provision refers to Clause 106(2); namely, the ability to transfer from one functional body to another in the case of an underspend in the central grant and between bodies. However, in all such situations, the functional body and the mayor must agree on the transfer. I was distinguishing that situation from substitute calculations.

Baroness Hamwee

Can the mayor require that to be undertaken? In referring to the agreement, the Minister said that the mayor would not be in control and the functional body which had the excess could hang on to it if it wished. Is that correct?

Lord Whitty

Any transfer requires agreement; therefore the noble Baroness is right.

Lord Bowness

I hope that I am not alone in suggesting that Clauses 74 and 79, which the Minister now seeks to amend, are incredibly complicated. They were complicated in their original form and they are scarcely less complicated in their amended form. I and perhaps other Members of the Committee would find it most helpful if the Minister were able to place in the Library a layman's guide in plain English on the effects of these changes.

Lord Whitty

I shall inquire whether that can be done. I was afraid that the noble Lord was going to challenge me on my algebra in relation to parts of Clause 74. They are complex clauses and I had hoped that the relatively minor and technical amendments I have made would clarify them. I shall consult to see whether I can meet his point.

Lord Bowness

The trouble with minor and technical amendments is that they normally have unforeseen consequences about three years after the Bill has been passed.

On Question, amendment agreed to.

Lord Whitty moved Amendments Nos. 221B to 221D: Page 44, line 20, leave out from ("Authority,") to ("any") in line 22 and insert—

  1. ("(i) the amount of any component budget requirement calculated under subsections (4) to (7) of section 70 of the Greater London Authority Act 1999,
  2. (ii) the amount calculated under subsection (8) of that section. or
  3. (iii)")

Page 45, line 22, at end insert ("under section 73(3)(b) of the Greater London Authority Act 1999 (in relation to item P1) or under section 74(5)(b) of that Act (in relation to item P2)").

Page 45, leave out lines 29 and 30 and insert ("the appropriate Greater London provisions in making the calculations.

(6A) For the purposes of subsection (6) above, "the appropriate Greater London provisions" means—

  1. (a) in the case of calculations required to be made in accordance with sections 70 to 75 of the Greater London Authority Act 1999 and sections 47 and 48 above, those provisions; and
  2. (b) in the case of calculations required to be made in accordance with sections 70, 71 and 73 to 75 of, and Schedule 6 to, that Act and sections 47 and 48 above, those provisions.").

On Question, amendments agreed to.

Clause 79, as amended, agreed to.

Clause 80 [Minimum budget for Metropolitan Police Authority]:

Lord Dixon-Smith moved Amendment No. 222:

Page 45, line 35, leave out ("This section applies") and insert ("Subsections (1B) to (1D) apply, in relation to a financial year, to the making by the Authority of calculations required by section 70 in the case of the Metropolitan Police Authority. (1A) Subsections (2) to (12) apply").

The noble Lord said: In moving Amendment No. 222 I shall speak also to Amendment No. 223. In our view, the Metropolitan Police force is particularly ill served by the financial provisions of the Bill. The two most objectionable provisions are addressed by our amendments to Clauses 80 and 81.

In preparing the Bill, the Government clearly recognised the risk that a mayor might not sufficiently fund the Metropolitan Police and the dangers that such a risk poses for the safety of Londoners. For that reason, Clauses 80 and 81 provide a mechanism for the Secretary of State to remedy the situation if he finds that a particular mayor has set the police budget at a level which he considers is insufficient to provide an efficient and effective police force for the Metropolitan Police area.

If the Government were not concerned about the possibility of mayoral underfunding of the police, they would not have felt the need to introduce measures such as Clauses 80 and 81. We share their concern. There is one particular mayoral candidate whose record might give grounds for concern. Nonetheless, we believe that the Government are right to worry about the possibility that mayors, separately from that one individual, might consider underfunding London's police.

The trouble is that the Government's solution fails to deal properly with the problem. It is inadequate for two major reasons. First, it begins to deal with the problem only after it has occurred. Clause 80 is a mechanism for remedying underfunding after the event, which would have to be the case. However, it carries a clear risk that once an irresponsible mayor has overspent in other areas the police shortfall will have to be met by an increased GLA precept, the cost of which will be borne by London's council tax payers.

We believe that prevention is better than cure and that Londoners should be protected in advance from underfunding. Their safety should not be put at risk because curative action can be taken only slowly and in retrospect. Even where a remedy is necessary, the time period of 35 days, in Clause 81, appears far too long. We believe that Londoners deserve better than to be uncertain about the future of the police force for such a period.

Both these aspects involve the safety and security of London as a whole, which we believe could be unnecessarily exposed. Our two amendments address the problem. First, the amendment to Clause 80, Amendment No. 222, proposes that subsections (1B) to (1D) offer a preventive rather than a remedial solution. We want to avoid the problem before it becomes a difficulty. Currently, the Bill enables the mayor to present a budget which might incorporate inadequate financial provisions for the police. Under the current Clause 80, the Secretary of State may then require that police funding be increased with an enjoinder to the mayor to seek offsetting savings elsewhere in the budget. If no such savings are identified by the mayor, the Secretary of State may substitute a higher total budget for the police in order to ensure that what he considers to be the necessary resources are provided.

The result is an increase in the GLA precept because of the timescale. Not only is there a period of uncertainty about the future of London's policing; the delay could also cause difficulties for the boroughs in establishing what their actual precept should be.

We believe that the solution is straightforward. Our amendment requires the mayor to gain the approval of the Secretary of State for the level of Metropolitan Police funding which he is proposing before he includes it in his budget. That proposal implies no change in the Secretary of State's powers over police funding. The safeguard on funding built into the Bill would become part of the budget process, not a possible late shock to London's council tax payers. Surely, it must be better that the mayor should go into discussions with the Secretary of State over his proposals for the police before he arrives at his budget rather than afterwards I should have thought that that would provide a much more satisfactory way of arriving at both the Metropolitan Police budget and the Greater London Authority budget, with satisfactory consequences for the people of London who have to pay their council tax bills. I beg to move.

7.30 p.m.

Lord Patten

I warmly support the amendment of my noble friend Lord Dixon-Smith. I think we are moving into uncharted waters. The Committee may care to reflect on the fact that for a very long time there has been a carefully modulated set of checks and balances between the Secretary of State for the Home Department and the Metropolitan Police, which has ensured that reasonable and adequate funding has come to the Metropolitan Police.

We shall find from time to time that, like all public services, the Met will say that it is being underfunded, that there are crises, and there will be panic on the "Today" programme. People will be demanding more money from the mayor and, through the mayor, from the government of the day.

Setting that aside, I think that by and large the funding mechanisms with which many Members of the Committee will be familiar, and which have underpinned the policing of London, have worked well in the past. I cannot imagine who the nameless mayoral candidate was to whom my noble friend referred. My noble friend Lord Archer of Weston-Super-Mare and I were speculating as to who might be this person who might gratuitously underfund the Metropolitan Police, given half a chance, in some future year.

But I believe that the suggestion of my noble friend Lord Dixon-Smith is extremely practical. This is not a partisan matter, and I urge the noble Lord, Lord Whitty, who takes such care to reflect on matters raised in the Committee, to think that nothing would undermine the status of the mayoralty and the intentions of the Bill more than problems with the Metropolitan Police. If people feel that, because of political changes, the introduction of a mayor and the resulting funding changes, they are not being looked after by the Met in the way to which they have grown accustomed, we could find that both the standing and status of the Metropolitan Police, who do so much to help, is undermined. We could also find that the office of the mayor is undermined.

I urge the Minister to reflect very carefully on the words in the amendments put forward so forcefully by my noble friend and to consider whether something pragmatic can be done to build on the provisions already in the Bill, which I support, to make sure that these possibilities do not come to pass under whoever is mayor of London.

Lord Whitty

I understand the concern that we ensure that the Metropolitan Police are properly funded. In my view, the Bill has the balance right.

We are changing the current system, whereby the Home Secretary effectively decides directly the funding of the Metropolitan. Police, to one where there is some democratic decision-making, through the mayor, and oversight of the police, through the Metropolitan Police Authority.

However, I accept what the noble Lord, Lord Patten, said about the need to preserve confidence in the police and the delivery of police services. In my estimation, that will in part be assured through the operation of the new Metropolitan Police Authority. We therefore need some reserve powers, which is what we have provided in these clauses to deal with the, in my view inconceivable, political circumstance, that the mayor did not provide adequate resources for the police. I cannot envisage any mayor setting a budget which would threaten service standards or the public's confidence in the police.

Moreover, I would assume that before the budget was set there would be a fair degree of informal contact between the Home Office and the authorities within London, and that if the mayor were inclined to set a budget which the Home Secretary was likely to regard as inadequate, that information would be conveyed and the mayor would heed that information, in order to avoid just such a direction as is provided in this reserve power.

It is important that the first responsibility should rest on the mayor to set the budget. I do not think it is sensible to do what the amendment would do, which is to bring the Home Secretary back into prominence in setting the budget and having authority over the police force directly. The single financial structure created by the Bill is designed to give the mayor and assembly responsibility for setting the aggregate budget for the authority and the four functional authorities. If we were to involve on a routine basis the Secretary of State in effectively determining the size of that budget before the total budget process was complete, that would be incompatible with that structure and with the objective of making clear to the electorate of London that it was the mayor's responsibility.

That having been said, clearly we require those reserve powers. They are there to be used in unlikely—indeed, extremely rare—circumstances. I therefore hope that the noble Lord will recognise that to push the amendments so that the Home Secretary effectively predetermines this element of the budget would be counterproductive. However, I repeat that we need the reserve powers as specified in the Bill.

Lord Dixon-Smith

I was not sure for a moment whether the noble Lord the Minister was saying that the procedure in the Bill was unnecessary or that my amendments were unnecessary. However, it is clear from the tenor of what he said that he feels that the procedure will be called into use only on very rare occasions. I think he actually said that it was unnecessary.

However, I return to the question of the primacy of decision-making with regard to the Greater London Authority's budget. Under my amendments, the mayor-would in fact determine, before he went to the Secretary of State, what the police budget should be. The difference is that under what I propose the mayor would take than proposal to the Secretary of State and gain his agreement to it before he took it to the assembly and the assembly discussed the matter and it became part of the authority's budget.

The difference between us is marginal. However, there should be sufficient flexibility in the Government's approach to these matters for them to be able to consider making a change along the lines that I have suggested, if I do not have the wording of the amendments sufficiently precise to achieve the purpose which I have enunciated.

I shall study carefully what the Minister has said. I am sorry that he has a tickle in his throat which caused him problems, but that did not alter the quality of the content. I do not think that I entirely accept his conclusions, and I would certainly prefer to see the Government move on this, but, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Whitty moved Amendment No. 222A:

Page 45, line 36, leave out paragraph (a) and insert ("the Authority—

  1. (a) has made calculations in relation to a financial year in accordance with sections 70 to 75 above and sections 47 and 48 of the Local Government Finance Act 1992, or
  2. (b) has made substitute calculations in relation to a financial year in accordance with sections 70, 7) and 73 to 75 above and Schedule 6 to this Act and sections 47 and 48 of that Act, but").

On Question, amendment agreed to.

Baroness Farrington of Ribbleton

I beg to move that the House do now resume. In moving this Motion, perhaps I may suggest that the Committee stage begin again not before 8.40 p.m.

Moved accordingly, and, on Question, Motion agreed to.