HL Deb 14 October 1999 vol 605 cc640-56

Preliminary requirements

1. No Bill may be deposited in Parliament by virtue of section (Power of Authority to promote or oppose Bills in Parliament)(1)(a) of this Act until the requirements of paragraphs 2 and 4 below have been complied with.

Consultation on draft Bill

2.—(1) The Mayor shall—

  1. (a) prepare a draft of the proposed Bill ("the draft Bill");
  2. (b) send copies of the draft Bill to the bodies specified in sub-paragraph (2) below; and
  3. (c) consult those bodies about the draft Bill.

(2) Those bodies are—

  1. (a) the Assembly;
  2. (b) every London borough council; and
  3. (c) the Common Council.

(3) Where the Mayor sends copies of the draft Bill to those bodies pursuant to sub-paragraph (1)(b) above, he shall also give those bodies notice of the time within which, and the place at which, they may make representations about the draft Bill.

Publicity for, and exposure of the draft Bill

3.—(1) Throughout the consultation period, the Mayor shall take such steps as in his opinion will give adequate publicity to the draft Bill.

(2) A copy of the draft Bill shall be kept available by the Mayor for inspection by any person on request free of charge—

  1. (a) at the principal offices of the Authority, and
  2. (b) at such other places as the Mayor considers appropriate, at reasonable hours throughout the consultation period.

(3) A copy of the draft Bill, or of any part of the draft Bill, shall be supplied to any person on request during the consultation period for such reasonable fee as the Mayor may determine.

(4) In this paragraph "the consultation period" means the period which—

  1. (a) begins with the first (lay after the requirements of paragraph 2(1)(b) above have been complied with; and
  2. (b) ends with the time notified pursuant to paragraph 2(3) above.

Consultation on revised draft Bill

4.—(1) If, after considering any representations made about the draft Bill pursuant to paragraph 2 above, the Mayor decides to continue with the proposal for a Bill to be promoted. he shall prepare a revised draft of the proposed Bill ("the revised draft Bill").

(2) The revised draft Bill must be in the form of the draft Bill, either as originally prepared or as modified to take account of—

  1. (a) representations made pursuant to paragraph 2 above;
  2. (b) other representations made within the consultation period; or
  3. (c) other material considerations.

(3) After the expiration of at least 30 days from the beginning of the consultation period, the Mayor shall'—

  1. (a) send a copy of the revised draft Bill to the Assembly; and
  2. (b) consult the Assembly about it.

(4) Where the Mayor sends a copy of the revised draft Bill to the Assembly pursuant to sub-paragraph (3)(a) above, he shall also give the Assembly notice of the period within which it may make representations to him about the revised draft Bill.

(5) The period specified under sub-paragraph (4) above must be such as will afford the Assembly a reasonable opportunity to consider the revised draft Bill and make representations about it to the Mayor.

(6) In this paragraph "the consultation period" has the same meaning as in paragraph 3 above.

Deposition of the Bill in Parliament

5. If, after the requirements of paragraph 4 above have been complied with, a Bill is deposited in Parliament by virtue of section (Power of Authority to promote or oppose Bills in Parliament)(1)(a) of this Act, that Bill must be in the form of the revised draft Bill, either as originally prepared or as modified to take account of—

  1. (a) representations made by the Assembly pursuant to paragraph 4 above; or
  2. (b) other material considerations.

Bills affecting powers of London local authorities

6. If a Bill proposed to be deposited in Parliament by virtue of section (Power of Authority to promote or oppose Bills in Parliament)(1)(a) of this Act contains provisions affecting the exercise of statutory functions by a London local authority, the Bill shall not be deposited in Parliament unless—

  1. (a) in a case where the statutory functions of one London local authority are affected, that authority has given its written consent to the Bill in the form in which it is to be so deposited; or
  2. (b) in a case where the statutory functions of two or more London local authorities are affected, at least 90 per cent. of all London local authorities have given their written consent to the Bill in that form.

(2) In this paragraph "London local authority" means—

  1. (a) a London borough council; or
  2. (b) the Common Council.

Publicity for the deposited Bill

7.—(1) This paragraph applies where a Bill ("the deposited Bill") is deposited in Parliament by virtue of section (Power of Authority to promote or oppose Bills in Parliament)(1)(a) of this Act.

(2) During the period of 14 days following the day on which the deposited Bill is deposited in Parliament, the Mayor shall take such steps as in his opinion will give adequate publicity to the Bill.

(3) A copy of the deposited Bill shall be kept available by the Mayor for inspection by any person on request free of charge—

  1. (a) at the principal offices of the Authority, and
  2. (b) at such other places as the Mayor considers appropriate,
at reasonable hours throughout the period while the Bill is in Parliament.

(4) A copy of the deposited Bill, or of any part of the deposited Bill, shall be supplied to any person on request during that period for such reasonable fee as the Mayor may determine.").

On Question, amendment agreed to.

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

[Amendments Nos. 288 to 291 not moved.]

Lord Whitty moved Amendment No. 292:

Page 222, line 8, leave out ("a majority of the Assembly members voting") and insert ("the Assembly").

On Question, amendment agreed to.

Lord Tope moved Amendment No. 293:

Page 222, line 18, leave out ("1st February") and insert ("15th December").

The noble Lord said: in moving Amendment No. 293 I shall refer also to the other amendments in this group. I shall not be moving Amendments Nos. 296 and 297. Clearly, there has been an error in the drafting or tabling of those amendments. One of them, at least, should refer to a different place in the schedule. I apologise for that error, wherever it arose.

Amendment No. 293 enables us to debate what we were trying to get at with this group of amendments had we managed to get the dates right. The budget process is much more than mechanical. It is a full discussion and debate about priorities and political priorities. As the noble Lord, Lord Dixon-Smith, stated, it will be a process of continuous dialogue, discussion and negotiation.

The purpose of the amendments is to move that process forward as far as possible. I say that bearing in mind the current practice—which makes life extremely difficult—of the Government announcing the revenue settlement at the beginning of December. We propose that the mayor should present his or her draft budget by 15th December and that there should be a longer period for consultation and discussion, which is achievable.

I recognise that the GLA budget will be much larger than that of any other London borough. However, it is a process which we have followed in my authority for a number of years. We now have a meaningful debate with interested organisations and, indeed, individuals, on budget priorities and proposals, whether for growth or savings and cuts.

I suggest that the mayor should be required to adopt a similar process; to be able to have the open and formal debate, discussion and consultation rather earlier and over a longer period. That is the intention of the amendments, starting with the presentation of the draft budget in the middle of December. I wish it could be earlier than that date and that the period did not include Christmas and the New Year. Unfortunately, the Government's timetable on the RSG settlement makes that impossible.

If that process is to be real and meaningful, and there is to be a useful dialogue in terms of priorities as reflected in the budget, we shall need the longer timetable that we are suggesting. I recognise that the Government cannot accept these amendments tonight, but I hope that they will accept the intention and perhaps consider further how to make this proposal more meaningful. I beg to move.

10.45 p.m.

Baroness Farrington of Ribbleton

My Lords, in speaking to this group of amendments I shall make specific reference to Government Amendment No. 303. That amendment would remove the Secretary of State's power to change the last day of February date before which the mayor must present his or her final draft budget, and the assembly must approve it.

In Committee, the noble Baroness, Lady Hamwee, and the noble Lord, Lord Tope, tabled amendments seeking to change the statutory dates in the budget-setting process from February to November. We cannot agree that the deadlines for either the draft or the actual budget should be brought forward, and we cannot accept these amendments. The local government finance settlement is usually announced in late November or early December. The mayor is required to consult the assembly before finalising his draft budget, and we expect much of the work in drafting the budget to be done long in advance of the deadlines set out in Schedule 5.

However, bringing forward the date by when the mayor would have to present his draft consolidated budget to December would leave almost no time for the mayor to consider provisional grant figures, or to consult the assembly before preparing his or her draft budget.

Bringing forward the deadline by when the mayor must present his final draft budget would require the mayor to present a final draft budget before the grant allocation is finalised, and would allow the assembly no more time to consider the draft budget than the Bill currently allows.

Requiring the assembly to approve the draft budget before 15th January is unrealistic. I recall that during our debate on this issue in Committee, noble Lords expressed their concern that the boroughs should know the amount of the GLA precept at an early enough time to be able to influence their own budget decisions, should they decide to do so.

We all recognise, of course, that the GLA and the boroughs will need to be in regular dialogue on their respective priorities. The GLA, like all major precepting authorities, will surely seek to set its budget as early as possible, but a deadline of 15th January is wholly unrealistic. A situation could arise where the pressure of time, in unusual circumstances, could mean the authority setting its budget before it knew its allocation.

The GLA, like all major precepting authorities, must issue its precepts by 1st March. If billing authorities have to recalculate their amounts of tax because the GLA, or any other major precepting authority, issues its precept late, it is the precepting authority—here the GLA—that would have to pay the rebilling costs.

The Government have noted the concerns expressed by noble Lords during the Committee stage about the Secretary of State's power to change the last day of February date by which the GLA's budget must be finalised. Amendment No. 303 removes that power.

We cannot accept Amendment No. 304. A power to move the date only forward would leave the Secretary of State unable to act if, in remarkably unusual circumstances, the local government finance settlement was late.

Schedule 5 sets out a robust budget-setting process for the GLA, with deadlines that take full account of the local government finance settlement, the roles of the mayor and assembly, and the GLA's duties as a major precepting authority. I seek support for Amendment No. 303, and ask noble Lords to withdraw their amendments. In seeking to do that, we bring to your Lordships' House our experience. I bring mine as a member of a precepting authority and I see the noble Lord, Lord Dixon-Smith, nodding his head. He has distinguished, but similar experience.

Lord Tope

My Lords, I have possibly nearly as long experience of being on the receiving end of precepting authorities, so perhaps we approach these matters from slightly different points of view.

I did not expect to convince the Government. I do not accept that if the RSG settlement comes at the end of November, as it generally does, it is impossible to produce a draft budget for 15th December. I know from experience of a small budget—the complexities are the same—that it is possible. It involves a considerable amount of work and contingency planning would start long before the end of November. However, I shall not pursue this matter and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Whitty moved Amendments Nos. 294 and 295:

Page 222, line 28, leave out ("a majority of the Assembly members voting") and insert ("the Assembly").

Page 222, line 42. leave out ("a majority of the Assembly members voting") and insert ("the Assembly").

On Question, amendments agreed to.

[Amendments Nos. 296 and 297 not moved.]

Lord Whitty moved Amendment No. 298:

Page 223, line 43. leave out (-a majority of the Assembly members voting") and insert ("the Assembly").

On Question, amendment agreed to.

[Amendments Nos. 299 to 302 not moved.]

Lord Whitty moved Amendment No. 303:

Page 224, line 24, leave out (", or the last day of February,").

On Question, amendment agreed to.

Baroness Hamwee moved Amendment No. 304:

Page 224, line 25. leave out ("other") and insert ("earlier").

The noble Baroness said: My Lords, perhaps I can speak to Amendment No. 304 at this time as I do not believe my noble friend spoke to it earlier. It seeks to change or delete one of the dates which may he changed under this provision.

What is left is that the Secretary of State can substitute for any reference to 1st February a reference to any other day that he may set out in the regulations. Amendment No. 304 seeks 10 provide that he can only change it to an earlier day. This is in the spirit of the amendments to which my noble friend spoke about not making life more difficult for everybody by moving the process on. Perhaps the noble Baroness will comment on that. I beg to move.

Baroness Farrington of Ribbleton

My Lords, I apologise if I was not as clear as I should have been. I intended to make clear that Amendment No. 304 could not be accepted. It would prevent the Secretary of State from being able to specify a date later than 1st February to take account of extremely unusual circumstances. We are talking of a situation where something arises which may prevent the process from being followed.

We can envisage few circumstances in which that may be necessary. However, we feel it is wise to include the provision.

Lord Tope

My Lords, before the Minister sits down, she has made reference to her very considerable county council experience. Perhaps she can tell me whether the Secretary of State now has similar powers in relation to county councils which may find themselves in similar unlikely but extreme circumstances? If the power does not exist currently in relation to county councils, why should the GLA be put in a privileged position in comparison with such county councils which will have exactly the same difficulties?

Baroness Farrington of Ribbleton

My Lords, the powers do not exist in relation to county councils. However, if on reflection the noble Lord considers the relationship between the GLA and Transport for London and the London Regional Development Agency, he will see that in that context there are slightly different circumstances. We feel therefore that this is a wise provision. We hope that circumstances will not arise where it will be necessary to use the power.

Baroness Hamwee

My Lords, again before the noble Baroness sits down—I am sorry to prolong this matter—am I right in presuming that the regulations which will be required will have to come before Parliament? That will take some time. This power could only be applied by foreseeing the very exceptional and unusual circumstances some little while ahead. Perhaps we should continue this matter through correspondence. I remain a little unpersuaded as to the position.

Baroness Farrington of Ribbleton

My Lords, I am extremely grateful to the noble Baroness, Lady Hamwee. I would be delighted to continue this discussion through correspondence. I shall provide copies of the correspondence to any noble Lord who shares our interest.

Baroness Hamwee

My Lords, I thank the Minister for that reply. Perhaps she will kick off the correspondence by giving an example of how this will work and the kind of timetable required for the regulations to pass through their various stages. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 74 [Calculation of basic amount of tax]:

[Amendment No. 305 not moved.]

Clause 75 [Additional calculations: special item for part of Greater London]:

[Amendment No. 306 not moved.]

Clause 76 [The special item for the purposes of section 75]:

[Amendment No. 307 not moved.]

Clause 78 [Calculation of tax for different valuation bands]:

Lord Dixon-Smith moved Amendment No. 308:

Page 44, line 22, 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: My Lords, I rise to move Amendment No. 308. The Minister will perhaps be unsurprised if I tell him that had he felicitously accepted my amendment on the website I would now happily be withdrawing this particular amendment. However, such are the vagaries of fate that we had to debate that amendment and I am now moving this one.

The effect of the amendment would oblige the GLA to publish the consequences of its budgetary decision on the council tax payers, borough by borough seriatim. The Minister will say that the amendment is not necessary; he will say that it is inconceivable that the media at large will not take notice of these matters; and that the decisions and the impact will be published by every newspaper throughout the land, let alone throughout London. That may well be so. However, even if it is so, I suspect that there will be people who will not read about it or will miss it or whatever.

The purpose of the amendment is to draw out once again the issue of accountability. In our view, it is essential that the mayor is absolutely accountable for his budget, not so much to the assembly—although we have debated that often enough—but openly and obviously to the people of London. While I have the greatest respect for the media at large and enjoy with that particular industry—if I can honour it with that title for the moment—the same love/hate relationship that all people in our positions have with it, the media will report the decisions of the mayor in the manner in which they wish to report them. They may do so in a manner that is not particularly open and obvious. It may even be a manner which the mayor considers to be unfair.

The amendment requires the mayor to do the job for himself. It has been my experience that, unless one makes an absolute hash of it (which I have done from time to time) the quickest way of ensuring that a job is done well is usually to do it oneself. That is the reasoning behind the amendment. It seeks to make the mayor openly and publicly accountable through the people of London. That is not unreasonable, and I should like to think that the Minister will accept it. I suspect, however, that, even at this hour of the night, he may not. I beg to move.

11 p.m.

Lord Whitty

My Lords, I am sorry to disappoint the noble Lord again. There is absolutely no doubt that the media will report the matter. I suspect that the GLA will wish to publicise it on the Internet and elsewhere. But the requirement is covered by the requirement on the GLA to inform the taxpayers themselves. That is already covered by the Demand Notice Regulations 1993. We are amending those regulations to make sure that the detailed information from the GLA will cover all the functional bodies too. That is the legal requirement; it is a requirement to set out clearly to every council tax payer what the precept covers and where the money is going. That is what is covered by this clause. Any wider circulation may well be wise, but it is not the requirement in law. The existing provision is sufficient. I hope that the noble Lord will not pursue the matter.

Lord Dixon-Smith

My Lords, I have listened to the Minister's reply with disappointment. I cannot say that it has come as a surprise. It is late, and in the circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 81 [Minimum budget for Metropolitan Police Authority]:

Lord Dixon-Smith moved Amendment No. 309:

Page 47, line 8, 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 71 in the case of the Metropolitan Police Authority.

(1A) Subsections (2) to (14) apply").

The noble Lord said: My Lords, Amendments Nos. 309 and 310 are grouped together. They deal with what we regard as an unsatisfactory situation as regards the process of arriving at the police budget for London.

As drafted, the Bill provides that, when the mayor has produced his final draft budget and it has been approved or amended by the assembly as the case may be, it is then submitted to the Secretary of State, who may look at it and decide that the budget for the police service is inadequate. If he so decides, he has the right to define a sum that he considers appropriate. The mayor then has a period of 60 days in which to adjust his budget so that he complies with the opinion— which would come in the form of a direction—of the relevant Secretary of State. It is conceivable that he may be able to adjust his budget without adjusting the total budget sum using means of internal adjustments. That would imply that he would have to diminish items to which he had formerly given priority. It could be that a somewhat mischievous mayor would give items other than the police service greater priority, knowing that that would cause difficulty. It might even mean a supplementary rate.

We do not believe that that is a reasonable way to proceed. It is even less appropriate—my reference is to a later amendment—that a two-month period should be considered the right length of time for the matter to be sorted out. We think it much more appropriate that the amount calculated for the police in the mayor's budget should not be in his final budget unless it already has the approval of the relevant Secretary of State. That is achievable, given the procedure which the mayor is required to go through in order to produce his budget. He could submit the police budget to the relevant Secretary of State at the draft budget stage, when the figures will be firm. The figures with regard to the police will be solid and if everyone knew that was the procedure, the Secretary of State's sanction could be given before we reached the final budget stage. The final budget could be approved and everyone would know where the budget stood on the date of that approval.

The present procedure leaves the whole matter in uncertainty at that stage because of the anomaly which would make it possible for the relevant Secretary of State—I assume it would be the Home Secretary— to decide that under the final budget London's police would be inadequately funded.

That is not a reasonable way to go on. I would like to think that the Minister would accept that what we suggest is reasonable and an improvement on what is required on the face of the Bill. Even if he will not accept the amendments in detail—and I am always prepared to concede that we are not likely to be perfect at drafting amendments—if he would accept the principle, then the budgetary situation for the mayor, the assembly and all the people of London would be improved. Even the position of the Secretary of State and the police would be more certain. I beg to move.

Lord Whitty

My Lords, I understand what the noble Lord is driving at. It stems from the concern on the one hand to ensure that the police receive adequate resources. We all share that objective. On the other hand there is the concern that the budget-making process is not too disruptive—another objective that we all share.

However, it is our view that the prime responsibility for setting the budget and judging priorities within it must rest with the mayor, subject to the procedure with the assembly to which we referred. To disturb that requirement by saying that the Secretary of State shall have the right to set a significant part of the budget in advance would undoubtedly take a major part of the responsibility away from the mayor. If the mayor has any sense—a feature of all potential candidates for the office now and in the future, I hope—he will ensure that he has reasonable discussions with the Home Secretary to ascertain his views about the matter, as well as with the police authority. Therefore, those considerations will have been built in.

It may be that they will not agree on the last detail, whereas, if the Home Secretary had the power to set the budget right at the beginning, it would be the Home Secretary's budget and not the mayor's.

There is the final fallback that, if the mayor is way out in his provision, the Home Secretary has the power of direction. However, it would be a major difference in the total resources for the police force, in which circumstances the Home Secretary might be tempted to use that power. It is much better to place the responsibility, in every sense of the word, on the mayor to set the budget in the first place, understanding that he will have had discussions with the Home Secretary. Then we should leave the direction by the Home Secretary to extreme circumstances which none of us envisage arising.

Lord Dixon-Smith

My Lords, I hear what the Minister says. I find his logic deeply flawed. On the one hand he says that it would be unreasonable for the Secretary of State to set a large proportion of the mayor's budget. On the other hand, the Bill says that the Secretary of State can do that. That is the reality. It may be in circumstances that we all hope will not arise. Unfortunately in legislation one has to contemplate circumstances which may arise only rarely.

The fact of the matter is that as the Bill is drafted the relevant Secretary of State has the power to determine a particular sector of the mayor's budget. Therefore, it is deeply flawed logic to say that it is inappropriate for the Secretary of State to have power to determine this matter. The Bill provides that power. I do not believe that it is right. However, it is too late to take this matter any further tonight. I shall carefully study the noble Lord's answer in Hansard. However, from what I have heard I believe that his logic is flawed and I am not satisfied. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 310 not moved.]

Clause 82 [Provisions supplemental to Section 81]:

Lord Dixon-Smith moved Amendment No. 311:

Page 49, line 16, leave out ("35") and insert ("15").

The noble Lord said: My Lords, if we had sorted out the previous amendment perhaps Amendment No. 311 would have been unnecessary. However, we believe that 35 days is too long a period in which to have uncertainty in this field. We suggest that a better figure is 15. We are all familiar with the sensation of wrapping cold towels around our heads and working extraordinary hours to try to get this Bill off the ground so that London can have its mayor and authority. I see no reason why the mayor should not have to do that for a day or two if he has a little problem over the budget, because the relevant Secretary of State has the power to determine it and he will have to comply. I beg to move.

Lord Whitty

My Lords, we believe that to reduce the figure to 15 is seriously unreasonable. In local government legislation the normal provision for making an adjustment following such an intervention is 21 days. The complexity of the GLA budget and that for the functional authorities where there may be knock-on effects makes it necessary to have a relatively lengthy period. Therefore, I do not believe 35 days to be unreasonable in the circumstances, and certainly 15 would be seriously unreasonable. I hope that the noble Lord will not pursue the amendment.

Lord Dixon-Smith

My Lords, I hear what the Minister says. I remind him that we are establishing a new authority that is supposed to work in new ways. I do not see why it should not be made to work more quickly than existing authorities if required to do so. It would be setting a proper precedent that might persuade other authorities to work in similar ways, which could only be beneficial. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 6 [Procedure for making of substitute calculations by the Authority]:

Lord Whitty moved Amendments Nos. 312 to 314:

Page 225, line 29, leave out ("a majority of the Assembly members voting") and insert ("the Assembly").

Page 225, line 41, leave out ("a majority of the Assembly members voting") and insert ("the Assembly").

Page 226, line 39, leave out ("a majority of the Assembly members voting") and insert ("the Assembly").

On Question, amendments agreed to.

[Amendment No. 315 not moved.]

Clause 86 [General GLA grant]:

Lord Dixon-Smith moved Amendment No. 316:

Page 51, line 3, at end insert ("and the cost assumptions on which the amount of the grant has been determined, and these shall be published in such manner as the Secretary of State deems appropriate").

The noble Lord said: My Lords, once again we seek to improve the availability of information to the community at large and local government—in this case London—in particular, by requiring the Secretary of State at the time he announces his determination of grant to publish the cost assumptions on which those sums are calculated. It is a small and simple matter. I beg to move Amendment No. 316.

Lord Whitty

My Lords, we see no need for this amendment. The mayor may feel it necessary to publish some of the background consultations that take place before the figures are set, but as far as concern the Secretary of State's responsibilities this amendment will not add anything to the public domain which is not otherwise there under other provisions and practice. Therefore, I do not wish to add this to the Bill.

11.15 p.m.

Lord Dixon-Smith

My Lords, we are into the wishes of the Minister rather than what is in the best interests of the people of London. I note the distinction. Having got that admission, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sheppard of Didgemere moved Amendment No. 317: After Clause 97, insert the following new clause— (". After section 43(8) of the Local Government and Housing Act 1989 there shall be inserted— (9) Notwithstanding anything in this section, or in any other enactment, the Greater London Authority may issue a loan instrument secured only on the revenue from new charges or levies raised under section 254 or section 255 of the Greater London Authority Act 1999."").

The noble Lord said: My Lords, the purpose of the amendment is to enable the Greater London Authority to borrow against the anticipated revenue charges for road use or work-place parking.

I believe that there would be clear agreement between us that the economic success of London depends on keeping London moving; and getting it to move faster. The business community in London is prepared to support hypothecated road user charges both as a way of reducing congestion and to pay for much needed additional investment for London's transport system. It is opposed to a levy on work-place parking which will not do much to change travel behaviour and will simply be an extra tax.

The problem is the initial expenditure on setting up congestion charging. It will cost initially something like £50 million to get a new congestion charge system working. That would include such items as cameras. In addition, it is common ground among all of us that if we are to have road charging we must have improvements to public transport before such charges are introduced. At a minimum, therefore, we should upgrade bus services and bus priority measures. Those will cost about £100 million.

There needs to be substantial investment before public transport can be seen to be improving and people begin to accept politically congestion charging. This initial investment cannot be paid for within PPP or PFI. If the mayor is to introduce road charging in his first term of office, we have no time to lose. It will be extremely tight as it is, even if we found a mayor who spoke in favour of congestion charges.

If the Government's policy for transport is to work, they have to allow for that initial cost to be financed. The obvious way to do that is to allow borrowing against a prudent estimate of anticipated revenue—obviously not the full amount of anticipated revenue. The need to borrow for investment is not just short term. Road user charging has to be part of an overall strategy for improving transport in London. There is a need for a capacity enhancement in the Underground; and not all of that can be paid for through PPP. There is a need for improved commuter rail services, improved interchanges and more radical bus schemes.

The GLA should be able to borrow for such investments on the security of projected revenue from road user charges in addition to its investment within the Government's public expenditure programme, PPP, and so on. That borrowing would be secured solely on this revenue and there would be no recourse to the general funds of the authority.

There is no doubt that the lenders of the money from the private sector would impose quite strict controls, so we have no need to worry about profligate spending. The GLA will have normal local authority borrowing powers, but those are subject to the consent of the Secretary of State and Treasury. We know all too well that the Treasury control under various governments over the past several decades has starved transport in London of the investment it needs.

The amendment would allow the mayor to make a real commitment to long-term investment programmes to support further London's regeneration development. I am sure that introducing road user charges—whatever the party of the mayor—will not be a good short-term vote winner. So if we are to achieve progress on transport in London—I and most of the business community think that congestion charging is fundamental to that; we are already paying for congestion—we have to find a way of helping the mayor to do so. Therefore finding a way for the mayor to borrow against those income streams, and therefore to do things up front, is essential.

Incidentally, both Ministers have given me verbal reassurances about the initial funding. The noble Lord, Lord Whitty, has even written to me on the subject. It would help me with the amendment—and perhaps help us all to go home a little earlier—if some of them were repeated to the House. In the meantime, it is essential to get London moving and to keep it moving. I beg to move.

Baroness Hamwee

My Lords, I shall not speak to Amendments Nos. 343 and 359 which are in this group. I shall speak to them at their place in the list. I support the noble Lord, Lord Sheppard, in his amendment. I inadequately attempted to speak to it at the previous stage. It is an important issue.

Dealing with London's congestion is not just a question of applying sticks; there will be the need to dangle carrots, too. Public transport must be improved, otherwise the incentive to leave the car at home will not be as great as it should be. The people of London will not support what is being done if life is made more difficult rather than public transport being made more attractive.

I am concerned about the Secretary of State's financial constraints under the Bill. I refer not only to the normal constraints which apply to local government but, as we discovered two days ago, the blanket power on the part of the Secretary of State to restrict expenditure on the exercise of any power. That is most extreme and, frankly, very worrying.

A great deal of faith is being put in the new authority and in the mayor to solve some intractable problems. The mayor, Transport for London and the authority need the tools to do the job and I warmly support the amendment.

Lord Berkeley

My Lords, I support the noble Lord, Lord Sheppard, in his amendment. I congratulate him on his work in delivering the London business community to support the congestion charge. That is fundamental to the policies which everyone hopes will be implemented if we get the right mayor. Even if we do not, we hope that they will be implemented.

However, I disagree with his views on workplace parking. I also believe that this is fundamental to the success of the scheme, but I suppose that those who run the business community have an interest to declare in having their parking preserved.

As was said by the noble Baroness, Lady Hamwee, it is most important that the public as well as the business community can see some benefits in the proposed improvements before charges are levied on them for workplace parking or congestion. It is essential that all those who live in London can see benefits in a better Underground, bus lanes, more provision for cycling and walking and a better quality of life. No doubt those issues will arise in the next few days when we discuss further amendments.

A method must be found to provide funding for the improvements. I am sure that my noble friend will be able to give us some comfort that a mechanism can be provided for that. If not, there will be a great deal of opposition to the implementation of the congestion charges, which would be a great shame. We must have them somehow and I hope that my noble friend will be able to put forward some solutions.

Lord Dixon-Smith

My Lords, I should like to express my support for my noble friend Lord Sheppard of Didgemere. His work on behalf of business and commerce in London is well known. Here, in the amendment, one sees the wisdom of business experience. The fact is that these charges will be introduced and people will expect instant results after their introduction. But the reality is that the arrival of a pool of money which would enable anything worth while to appear on the streets of London will take quite a long time to materialise.

The only way of overcoming that specific objection is to accept this amendment and permit the capitalisation of the projected revenue stream so that major expenditure, which will in fact be paid for by such revenue streams, can be undertaken pretty quickly and immediately. Without this provision, the poor people of London will feel that, once again, they are being required to pay, pay and pay and get nothing for it. I do not think that the latter is an acceptable proposition. This particular amendment would overcome that difficulty. If these charges are to be imposed, this amendment should be supported on behalf of the people of London. I am happy to do so.

Lord Whitty

My Lords, perhaps I may say, first, that I completely agree with the economics and, indeed, the politics of what the noble Lord, Lord Sheppard, put to us in the sense that, in order to resolve London's desperate transport problems, we need to move to a situation where both the rationing of road space and the provision of resources is generated through a road-user charging system. Once it is up and running, it will provide the resources and help ration in a sensible way the traffic within London to the benefit of Londoners.

However, the resources need to be provided for public transport alternatives and other infrastructure improvements. Therefore, we accept that up-front expenditure is necessary in order both for the road-user charging system to work and for it to be politically acceptable. I cannot entirely agree with the terms of the noble Lord's amendment as regards the explicit trade-off between the borrowing and the future income regarding congestion charges. It is sensible for us all to commit ourselves to the view that we must put some expenditure up front in order for that to work.

However, the Bill already confers powers on TfL to borrow money within the normal finance rules. There are a number of options available to TfL to make transport improvements; for example, it can borrow through the system of credit approvals, it can enter into a PFI arrangement or even approach the Government for additional funding through the GLA transport grant.

TfL will be able to use credit approvals to secure funding by borrowing or through credit arrangements. Credit approvals may be allocated by the Secretary of State for the purposes of TfL or may be allocated by the mayor for such purposes. The mayor will also be able to make the case for additional funding through the GLA transport grant and TfL will be free to negotiate PFI deals on the basis of expected revenue from congestion charging to finance and operate charging systems, so long as the deals are "off-balance sheet"—in other words, sufficient risk is transferred to the private sector—and the borrowing will not score as public expenditure, or need further credit approvals.

We will certainly look favourably at any of these means of raising money for up-front public transport improvements. We believe that the congestion charging proposition will prove to be a major benefit to the future quality of life in London and to its transportation system; and, indeed, to its economy and prosperity. We are therefore extremely anxious to acquire public approval for that system. It is unfortunate that one or two of the mayoral candidates have indicated that they do not favour that system. That is a rather short-term strategy to court immediately popularity while denying Londoners the long-term benefits of such a system.

I accept completely what the noble Lord, Lord Sheppard, says about the need to invest up front in order for that system to work and in order for it to be acceptable. I am not in a position to concede the precise mechanism which he proposes, but nevertheless, political imperatives are from time to time recognised by Secretaries of State and even Chancellors of the Exchequer. Therefore I believe that the noble Lord can rest assured that the Government recognise both the economic and political imperatives here. The mechanisms which already exist will be there to deliver, one might say, on top of the benefit in terms of up front public transport expenditure which John Prescott has already effectively bequeathed to the mayor. Over £5 billion is already in the pipeline and committed on public expenditure in London. That will itself go a considerable way towards providing the sort of up front expenditure which the noble Lord seeks. It will be demonstrable to the people of London well before a congestion charging scheme could come on stream.

While I cannot precisely accept his amendment, I hope that the noble Lord will accept my assurances that our intentions are common, our understanding of the politics as well as the economics is common, and that we wish to move ahead on that basis. If I gave him any greater assurances in my letter I shall ensure that noble Lords opposite share them. However, I believe that the noble Lord knows what the Government's commitment is. I deeply appreciate his own commitment to this solution. While, as I say, I cannot accept the precise wording of his amendment, the strategy is clear and we are committed to it. I hope that in the light of that he can see fit to withdraw his amendment.

11.30 p.m.

Lord Sheppard of Didgemere

My Lords, at 11.30 at night that certainly sounds fairly reassuring. Like the noble Baroness, Lady Hamwee, I shall read some of the stuff over breakfast and look at Hansard tomorrow. Meanwhile, I thank the Minister for his statements, which have certainly helped, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey

My Lords, I beg to move that further consideration on Report be now adjourned.

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

House adjourned at twenty-eight minutes before midnight.