Greater London Authority: Council Tax (Hansard, 29 March 2000)

§ The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)
My Lords, the Greater London Authority's precepts were issued on 17th February. A band D council tax payer is being asked to pay 122.98 for the first year of the GLA. This includes payment for the police, the fire service and transport facilities. Of this, only £1.72 accounts for additional costs of the mayor, the assembly, their support staff and provision for future elections. That is equivalent to 3.3p a week and is in line with our commitment in the White Paper, A Mayor and Assembly for London, that a band D council tax payer would pay about 3p a week.

Lord Bowness
My Lords, I thank the Minister for that Answer. However, does not he agree that when the Government gave an estimate of the costs of the Greater London Authority they gave the clear impression that the funding of other services would remain on a basis comparable with previous years? Is it not true that the council tax payers of Greater London face an increase far in excess of the 3p and a reasonable allowance for inflation because of the reduced funding of the Metropolitan Police, and that does not even take account of uncosted costs in respect of the new headquarters building for future years?

§ Lord Whitty
My Lords, it is certainly true that the precept for a year is a precept for a year. However, the figures are comparable with the figures that we originally announced. Therefore I believe that we have fulfilled our commitments in that respect. As regards the ongoing services, the precept for the police has certainly increased substantially, but that relates to an unwinding of past grants and the past use of reserves in that area rather than to any great spending increase.

§ Baroness Hanham
My Lords, does the Minister agree that the Greater London Authority budget has been set at above the council tax subsidy limitation level; that is, above capping? Does he believe that that is a good precedent, and is he happy to see it carry on in the future?

§ Lord Whitty
My Lords, the Greater London Authority must be subject to the same rules of local authority finance as anywhere else. Therefore, if it was to continue with a certain course in the future that would have consequences, as it would for any other local authority. However, this is the transitional phase. The level at which we have set the precept reflects the demands on the authority in the first year.

§ Lord Tope
My Lords, is the Minister aware that in the past two years the Metropolitan Police force has 806 been reduced by 796 officers? Will he confirm that the substantial increase in the Metropolitan Police precept which he has just mentioned is 17 per cent? Can he explain to Londoners how that represents best value?

§ Lord Whitty
My Lords, the noble Lord is correct to say that there is a 17 per cent increase. However, that replaces past grants and past use of reserves. It is therefore not as big an increase in the spending commitment; it is about a 2 per cent total increase in real spending on the police when one takes into account the other grants. The noble Lord is also correct to say that the numbers of police have fallen. We expect the number to remain roughly at the level of 25,600 over the next year.

§ Lord Harris of Haringey
My Lords, is my noble friend the Minister aware that many people will regard it as an anomaly verging on the bizarre that one government department has levied council tax benefit subsidy limitation on a precept decided by the Home Office in its capacity as the current Metropolitan Police Authority for London? In future years is he satisfied that the new Greater London Assembly will have sufficient powers over any actions by the mayor to vire money from one budget head to another?

§ Lord Whitty
My Lords, I do not accept the term "bizarre". These are transitional arrangements. There are bound to be differing considerations in regard to the future development of the precept for the GLA as compared with a year in which for three months the national Government will effectively take responsibility. The mayor will take full responsibility in the assembly from July. As regards the future arrangements, we had lengthy debates during the course of the then Greater London Authority Bill on the balance of powers between the mayor and the assembly. We believe that we have the balance right. I believe that in most respects my noble friend supported that position. I therefore think that the budget-making arrangements are appropriate. We hope that the mayor and the assembly can adopt sensible budgets which nevertheless meet the substantial needs of London's people.

§ Lord Dixon-Smith
My Lords, following the question of the noble Lord, Lord Harris of Haringey, is it not ironic that one government department should take an action which would inevitably be condemned by another government department if that action had been taken by a local authority?

§ Lord Whitty
My Lords, there are bound to be one or two anomalies as we move from one basis of finance to another, and that is partly reflected in this situation. As to the future, clearly "condemned" is not the appropriate word. If in future local authorities take certain decisions, certain consequences follow. That has always been part of local government and in this respect it is an automatic process, which is rather better than the form of control over local authority spending which was favoured by the previous administration.