HL Deb 28 April 2004 vol 660 cc782-813

3.16 p.m.

Lord Sheppard of Didgemere

rose to call attention to the governance of London; and to move for Papers.

The noble Lord said: My Lords, I welcome this opportunity to hear a range of views from across the House on London and its governance. Collectively this House has immense experience on just about every facet of life in London.

I am an East-Ender by birth. Over recent years I have, on a voluntary basis, been deeply involved in several initiatives aimed at making London a better place in which to live, work, invest and visit. Accordingly I declare my interests as founder president of London First and as a director of the London Business Board, the East London Business Alliance, the Central London Partnership and other similar bodies. I am also deeply involved in London's important higher education sector. I declare my interest as Chancellor of Middlesex University and a governor of the London School of Economics.

My comments this afternoon are personal ones. My question is: what can we do to make the government of London more effective and better value for the public money involved? I am talking about organisational structures and management processes. I am not talking about party politics that seemed to be the main make-up of the debate on London which took place last week in another place.

I am, of course, concerned about why decisions regarding London take so long. This is true of the Labour Government's debate regarding the Mayor of London and the debate about the London Underground which seemed to go on for ever. It is also true, though, of the previous Conservative administration and the present Labour administration. I refer to the 15 years of indecision with regard to Crossrail.

I would like to stress that I am not criticising any individual. London benefits from having many hardworking and able officials as well as dedicated politicians from all parties.

Before I discuss governance, I shall consider London itself. London is, of course, a great economic success. This is vital not only to Londoners but also to the whole of the UK. The problem with being a global leader is that one must keep winning. Any inefficiency or indecision on tackling London's needs would lose London its leading status fairly rapidly over a period of years.

Of course, good governance alone will not give London continued success. It is the actions and attitudes of 7 million Londoners that are critical. However, any inadequacies on education, training, transport and law and order can negate success driven by those individuals, so also can the ongoing failure of all political parties over many decades to achieve inclusiveness in London's inner suburbs. If that continues, it will be a threat to the future of London's economic prosperity.

The overall task is, of course, a considerable one, given the size and complexity of London. The GDP is bigger than that of either Greece or Portugal, to take two examples. The population is bigger than those of Scotland and Wales put together. Public spending in London is only 30 per cent of GDP, compared with 41 per cent for the UK as a whole. London makes a major net contribution to the national Exchequer. Estimates vary, depending on which economist one talks to, between £7 billion and £20 billion per annum net contribution to the rest of the UK. I suspect that the answer is nearer the £20 billion. Whatever it is, either figure is big enough to deal with the present infrastructure shortages that London has.

London's leading international position in financial and professional services, together with its growing strength in creative and knowledge-driven industries, gives London high productivity. In fact, London focuses on the provision of high-value added services, both nationally and internationally. A win for London is, however, a win for the UK, be it on inward investment or simply straight prosperity. London's main competitors are not the rest of the UK, but overseas cities around the world.

So far, that has sounded like good news for London, but London is obviously not all good news. We must maintain and improve the quality of life in London. Its success acts as a magnet for people within the country and from overseas. Today, there are half a million more Londoners than there were 15 years ago. That puts great pressure on our schools, housing. hospitals and transport. The answers are not easy ones, whatever political party happens to be in power. We need more housing, for example, but we need to keep our green areas both in and around London and to avoid being overwhelmed by a sea of concrete.

Skills shortages leave many individuals excluded in London. They also leave certain sectors, such as construction and the hospitality industry, short of the staffing that they require. In a decade of national employment growth, London has failed to cure the unemployment problem of its inner-city areas that has been around for decades, perhaps centuries. Skills shortage is not the only problem, and things can get more complicated. If we look at the cost of childcare in London, it is not surprising that the proportion of London's population in employment is lower than that of any UK region, except the north-east.

Let us turn back to the governance issue and the huge task that London has. The abolition of the GLC in the 1980s and the resultant period without regional government brought uncertainty, but also some benefits. The abolition itself demonstrated that London needs a regional government that tackles London issues, not one that tries to compete with the elected national government. The hiatus encouraged boroughs to be more self-reliant, but also to work collectively in smaller groups on subjects such as waste. It very much encouraged business to become involved. I admit that that was partly through desperation, but it became a determination for business and the voluntary sector to become more involved with local government in tackling some issues in London.

The Greater London Authority Act 1999 took forward the governance of London, with a resultant clearer voice for London and an ability to think and act pan-London. However, it left London with a very complex and at times slow-moving governance process, divided between central government, the Mayor and the GLA and the boroughs. It also left London with very complex management processes on many subjects such as, to name but two, policing and the commuter rail services. It was concern about the complexity of London's governance that led London First to undertake an extensive consultation with its members and other parties, looking at how governance could be improved. The result was the publication of Who is Responsible for London, which contains 41 recommendations. Noble Lords will be pleased to know that I shall touch on only a few of them this afternoon.

As we all know from our own experience, be it in business, local government or wherever, it is often more difficult to improve success than to turn round failures. The newspaper headlines are about people turning round failures, but the really difficult thing is to take a success and make certain that it continues. Whatever we do in changing our governance in London, we must not lose the will that Londoners have to succeed—the drive for both their individual and collective success.

As I am talking from the Opposition's side of the House, albeit from the very back of the Back Benches, noble Lords may not be surprised that I believe overall that one answer is to have less government. That will give Londoners the opportunity to use their personal initiative and help to build London's success. Of course, side by side with that, there has to be a real drive for equality of opportunity in London. We cannot continue to have major exclusion.

Whatever government activity is essential—clearly, there are some essential government activities—it should be as close as possible to the people. The electorate must understand the government processes and actually contribute and try to add value to them. Central government, whatever their colour, should therefore accordingly devolve all tasks in London to the lowest level commensurate with effective operation. If the Government believe in devolution, they should practise it. That means that, to take one example, the programme delivery function of the Government Office for London should be transferred to within London. That will enable the office and its highly talented and knowledgeable team to focus on strategy and not to get lost in the detail.

That need to concentrate on strategy and delegate the detail in London is also required by the Government themselves. The Government and their officials need to understand fully the case for London. They do not have to do everything themselves, which they have to understand. To achieve that, I suggest that the Government go back to what was practised in the previous Conservative governments, which was to have a senior Minister acting as a voice for London within the Cabinet. The post should be at Cabinet level. The reality of London must also be recognised within each department, especially the spending departments and, above all, the Treasury. From my experience, that is not always true at present.

The case for a Cabinet champion is well illustrated by the saga of Crossrail. Business has been asking for more than a year for serious dialogue on funding and even willingness to make a contribution. We have spoken to the Prime Minister, the Treasury, the spending departments and so on, but are still waiting. The independent review of the project, led by Adrian Montague, was of a high standard, I think. I have not been allowed to see it yet, but I have heard so much about it, and he is certainly of a high standard. It was completed in February. When will the Montague report be published? When will the Secretary of State for Transport make a definitive statement about Crossrail?

I shall step back from that. On most issues in London, more value for money would be achieved on future spending if strategic priorities were set centrally but specific projects were built from the bottom up. Probably the best examples of that are the huge amounts of money spent on economic regeneration and training. Greater reliance, together with tough targeting, should be based on the London Development Agency. The agency was set up under the GLA Act, so why do we not get it to earn its living? Doubtless the Minister will tell us that government projects are joined up and built from the bottom up. All I can say is that it does not quite look like that, out on the field.

On all public spending or subsidy, I recommend that the various appropriate levels of local government in London be much more involved, to make public accountability more obvious and ensure flexibility and more relevant application to local needs. That applies whether the budget is held by a spending department, an agency, a quango or whatever. Incidentally, a better understanding of London's needs by regulators would also be a big advantage, because of their importance.

I shall move on from the subject of central government versus London local government to look within London. Should we tackle the issue of the number of boroughs that exist? I would suggest that that is not a high priority. We would do much better to concentrate on particular issues. A good example is the Traffic Management Bill, currently in Grand Committee, where the definition of a "local" versus a "strategic" road would take us forward and define those roles within London. Of course, whenever one makes a decision on that one gets into difficulties, as there are many excellent boroughs carrying out good work on roads, including the Corporation of London in its role as a borough, and to that extent we must he careful that we do not lose those advantages.

The Association of London Government and the GLA should encourage the exchange of best practice between boroughs. We have some excellent boroughs and some terrible boroughs in terms of efficiency. We should also encourage the boroughs to work together in local groupings and that is particularly true in subjects such as planning—where there is a chronic shortage of good planners—and education.

We should also encourage business to work with all levels of government, including local authorities in the London area. Progress on business improvement districts has taken a long time, but is at least now under way and will be good news.

Finally, turning to the important subject of funding, currently 90 per cent of London's revenues are raised by the Treasury. I have two thoughts on that subject— which come from the business community in the London First report and not from our Mayor.

First, should business rates in London go directly to the GLA with a corresponding cut in Treasury grants to London? That would force a real dialogue between the boroughs and the GLA, which would not he a bad thing. That would make the uses and importance of business rates more obvious, both to the public and to the business community. Certainly, I have described in various business meetings that paying business rates is rather like throwing money over the wall in the dark—one does not know exactly where it is going or where it is ending up, but one does know that one is parting with money.

Secondly, should London command a predictable share of national government revenues? That is a much more complex issue. May be it is a pity that the noble Lord, Lord Barnett, is not in his seat, because he could have advised us on having a Barnett formula. I will talk privately to him.

In conclusion, London is a great success but its governance can be improved. The guiding principles should be subsidiarity with all functions being undertaken at the lowest tier of government capable of effectively exercising that task. The No. 10 Strategy Unit has now, I believe, finalised the recommendation part of its recent study on London for the Prime Minister. It will be interesting to see what that report has to say on governance, if anything. Will the Minister tell us what the status is of that report? Will it be published and, if so, when? The House of Lords All-Party London Group recently proposed a select committee to look at the working of the GLA Act. I know that happened only recently, but we are talking about one of the UK's greatest successes, so we cannot play for time. Let us hope that at some time in the not too distant future, despite all of the time pressures upon us, we have a chance to look at that again. Meanwhile, I look forward to the contributions of other speakers on this major subject. I beg to move for Papers.

3.33 p.m.

Lord Clement-Jones

My Lords, I welcome the opportunity to follow the noble Lord, Lord Sheppard, in this debate. I have a great admiration for the noble Lord, as he knows, particularly in his role as chairman of London First and the work that it has been responsible for, particularly in some of the thoughtful contributions that it has made to the debate within London.

I am afraid that I may well disappoint the noble Lord. As the chairman of the campaign of my honourable friend Simon Hughes for Mayor, I may allow politics to intrude on my speech. The election has already well and truly started and my honourable friend published his manifesto on Monday. I am sure that the House will forgive me if my speech is not totally devoid of some political comment. However, I share many of the points that the noble Lord made on governance issues. I speak as a Londoner by adoption. I have lived here for over 30 years and I would not dream of living anywhere else or, indeed, supporting either a football team or a rugby team other than Chelsea or Wasps. So, by acquisition, my London credentials are not too bad.

All the candidates and parties in the election will be arguing that they uniquely are best placed to realise the massive potential of London and to make it a better place in which to live. We are talking about potential. London has by no means reached its full potential and that is what our candidate will be talking about. I hope the election this June will not be a foregone conclusion—we certainly do not believe that it is—and the election system that the Government adopted for this purpose makes it a fairer and more open competition. That is quite right, too, considering that the election is one of the major direct elections in Europe.

There have been some positive aspects of the current Mayor's term of office. We believe that congestion charging was one of them. There have been improvements in transport services such as buses and there have been some increases in police numbers. If one is looking at the balance sheet—and the noble Lord, Lord Sheppard, was dispassionate in saying so—the history of underfunding is one for which the Conservative Party, when it was in government, should accept some significant responsibility. All of that adds up to the fact that London certainly has problems.

The Cabinet Office produced its report on London last July and stated that London, has high numbers of jobless people and substantial deprivation … has a housing market which is under strain and which will come under increasing pressure … has a transport infrastructure that has not kept step with the city's developing needs in the last 50 years … has public services that face substantial challenges as a result of the city's unique characteristics … has a complex system of governance There the noble Lord, Lord Sheppard, has scored a bullseye, as it was set up by the Greater London Authority Act. The report adds that the system of governance, does not easily enable the city to focus on its strategic needs". Of course that is a long roll of issues with which we are all familiar. What are the main concerns of Londoners? Do they mirror the concerns set out by the Cabinet Office? When the cross-party Association of London Government surveyed Londoners last autumn, it asked them about their biggest concerns. Crime was at the top, council tax was second, the health service was third, traffic was fourth and education was fifth. Most of us would agree that those are the issues that concern us as Londoners.

The issue of the level of council tax is also a matter of governance. The increase over the past four years under the current Mayor has been huge—greater than in any other authority in England. It is in the order of a 100 per cent increase, for which the Mayor must take responsibility. I have no doubt that the other parties who are competing against the current Mayor will be making their own proposals for saving on some of the council tax expenditure. When the current Mayor of London has a press office larger than that of the Prime Minister, one begins to wonder about the levels of expenditure that are taking place.

But one of the key issues is the balance of expenditure and the contribution to the UK economy made by the London economy. Currently it is some £17 billion, to which the noble Lord, Lord Sheppard, referred. Many of us believe that there should be much more informed debate about the balance between Londoners' contributions to the national economy and what it is right for London to take into its own economy. After all, as the Cabinet Office report makes clear, we have our own considerable problems in London, with many areas of deprivation, which should benefit from higher expenditure.

Crime and security are important to Londoners and, no doubt, the parties will be putting their proposals, as we have, in that extremely important area. Security, not just crime, is of great importance in the current climate. Violent crime, which we have seen rise by 4 per cent over the past year and by 20 per cent since 2000, is a matter of considerable concern.

On transport, there is disagreement about the future of the congestion charge. We on these Benches believe strongly that it should not be extended westwards. Instead, we would ameliorate it, even within the existing zone, by allowing people to pay in advance and allowing payment the following day so that people are not hit with a £40 fine when they forget to pay during the course of the day. We would also terminate the charge at five o'clock, which would allow some businesses, such as theatres, restaurants and cinemas, to benefit from people coming into the city without being hit by the charge.

Of course, Tube services will inevitably be a matter of considerable concern. There are ways in which one can improve on Tube services through planned maintenance during holiday periods, which would massively reduce the inconvenience caused to passengers by maintenance schedules. We would also extend the hours of the Tube to 2 a.m. at weekends.

Obviously a great deal of detail will be involved, but one key issue of governance is how the business community relates to the Mayor's office. We on these Benches want to create a Greater London business council to assist the Mayor and Assembly in considering the economic challenges facing London. We feel that there is not nearly enough connection between the business community, which we would like to see operate much as do organisations such as the Chamber of Commerce and London First. We believe that London is an absolutely key business centre and that it should be recognised as such by the Mayor's office.

If we had the opportunity—this is a matter on which the noble Lord, Lord Sheppard, was extremely cogent—we would abolish the Government Office for London, and we shall be lobbying seriously for that. It seems to us completely illogical that the Government Office for London should survive into the era of the Mayor's office. It creates confusion in terms of accountability and responsibility, and we see no reason why that should continue.

We also wish to see far better co-operation between the boroughs. One issue that has bedevilled the Mayor's current regime has been the lack of cooperation between the boroughs, the city council and the Mayor. We consider that to be a serious weakness in the current governance situation. However, to some degree, it is curable by the office of the Mayor. It is rather counter-productive for the Mayor to suggest that the borough councils should be abolished and the power taken in by the Mayor. That is not a particularly good way to ensure co-operation with the borough councils.

Therefore, after 10 June, we confidently expect that there will be a new Assembly and a new Mayor who gives value for money and considers some of the governance issues. Basically, we want a city which is capable, which has the right kind of governance structure and which can win the Olympic hid next year—a city in which we can meet some of our targets of housing the homeless, accommodating the badly housed, reducing unemployment and increasing skills, education and prosperity. Such a system of governance would make us proud of London not only some of the time but all of the time, and it would enhance London with its great mix of people, enterprise, history, culture and diversity.

3.43 p.m.

The Lord Bishop of London

My Lords, I, too, am very grateful to the noble Lord, Lord Sheppard, for initiating this debate. I join many other Members of the House in being an admirer of the noble Lord's work for London First.

Like the noble Lord, Lord Clement-Jones, I am also a Londoner, by adoption and grace, and I was on the heat this weekend in Hanwell in west London. I fell into conversation there with the Sikh mayor, a Hindu councillor and the Roman Catholic local MP. I can assure noble Lords that this is not the prelude to a grisly joke. We were discussing governance and especially the challenge posed by declining participation in elections and the political process generally.

Together, we—that disparate crew—were celebrating the 1,400th anniversary of the arrival in London of my predecessor, St Mellitus, in 604, when the Church in London was re-established after a pagan interlude and the first St Paul's was built. Together, we agreed that it would have been fascinating to witness the first encounter between the shaven crowned monk from Rome and the Euro-sceptic East Saxons.

The Sikh mayor was a little late, as he had been involved in the affairs of his gurdwara in Southall. The MP described the flourishing state of his local Roman Catholic Church, and the Hindu councillor painted a similarly upbeat picture of life around the temple in Neasden. As a former Bishop of Stepney, I know very well what a huge contribution to social cohesion and the accumulation of social capital is made by the mosques throughout London. I also see all around me, and depend on, the good will and generosity of the London Jewish community.

In places where, in living memory, political parties and unions had a prominent social role and where once they were able to bring Londoners together face-to-face in public and in a regular way for a range of good causes, now, and especially in non-plutocratic London, virtually only the faith communities are able to assemble citizens in any numbers for regular face-to-face encounter.

The Christian Churches alone organise in London 6,500 social action projects in every borough. We do not operate as a special interest group; we are players and partners. Week after week, 600,000 Londoners, drawn from every borough, age and racial group, participate in worship. The recent census revealed that 75 per cent of Londoners declared a religious faith and three-quarters of them said that they were Christians.

The majority of Christian churches in London, in contrast to much of the rest of the country, have grown over the past 10 years. In my diocese, the Korean Anglican congregation is one of the fastest-growing. No wonder that Mayor Livingstone has remarked that two things about London are obvious to him on his various visits. As the noble Lord, Lord Sheppard, has already said, London's population is increasing—that is the first thing—and, secondly, the Mayor says that it is an increasingly religious city. Whether that gives him as much satisfaction is less clear.

We are concerned about participation in working for London's future. We all note the prevalence of single-issue politics and the development of what we might describe as the "plaintiff's" voice. We all know that we need to encourage, by contrast, a civic voice which is concerned with the flourishing of the whole community and not only sectional interests.

It was in that spirit that the Evangelical Alliance and the leadership of all the London Churches, representing those 600,000 and the many beyond them—the cardinal, the bishop and the Free Church leaders—published last week our contribution to the mayoral election debate. It is entitled Faith, Work and City and, because we are thoroughly up-to-date, one can download it from our website www.votelondon.org.uk.

Of course, I am sorry to say that the publication does not endorse any particular candidate for the mayoralty, but it is a sane reflection provided by Christian practitioners in the various fields of London life. In the document is an appreciation of the significance for us all of the continued prosperity of the City of London. There is also the view of those who work alongside the homeless in London. The points made in that contribution will be followed up at a hustings meeting, which we are organising on Sunday, 9 May, at Methodist Central Hall for all the candidates. See you there!

The mystery is that the concern that we all share about participation does not seem to translate very easily into seriousness about engaging with London's faith communities or recognising their role, even in such obvious areas as the cultural strategy for the capital or in policing at borough level. London, as a city with a global constituency, is open as is practically no other British city to the increased significance of religious institutions and religious convictions in the rest of the world.

The post-9/11 situation points to a real urgency about engaging with those who have a civic vision in the faith communities beyond their own confessional concerns. But so often the response is, "We are multi-faith. We do not deal with particular religious bodies", and therefore "multi-faith" becomes shorthand for trying to edit out the contribution of faith communities from the life of our city. That response reflects the thinking of the day before yesterday.

The object of any system of governance is to build a city in which people assemble in a way that promotes human flourishing. The cohesion and energising of any city that really does promote human flourishing depends on three things: common objects of love; an equitable spread of economic benefits and protection; and a shared vision of what we want to build. In this debate we have talked a great deal, quite rightly, about benefits and protection, but obviously we should not neglect developing a shared vision or those common objects of love. It would be bizarre if, in this task, the opportunities offered by my friends in Hanwell, the mosques, the synagogues, the temples, the gurdwaras and the churches, were to be overlooked.

3.50 p.m.

Lord Harris of Haringey

My Lords, I too should declare an interest. In my case I was born in London and have lived here all my life. I am also an elected Member of the London Assembly and chair the Metropolitan Police Authority. I also had the pleasure of being co-chair of the London Pride Partnership with the noble Lord, Lord Sheppard of Didgemere. Coming as we did from slightly different political perspectives and slightly different outlooks on life and life experiences, it was interesting that we very rapidly realised that there was an enormous community of interest and community of agenda which we and all the other partners in that organisation wanted to follow on behalf of London and Londoners. So I am particularly grateful to him for initiating today's debate in your Lordships' House.

It is also interesting to note in the discussion we have had that no one is suggesting that the clock should be turned back and that we should cease to have the Greater London Authority, the Mayor and the London Assembly. It is abundantly apparent that in the past four years the Mayor and the GLA have filled a void in terms of the strategic elected governance for this great city.

There have been substantial successes in that four-year period. Mention has been made of the introduction of the congestion charge. I suspect that the congestion charge for London is something that Sir Humphrey Appleby, had he been consulted, would have said was a courageous decision to have taken. But that decision was taken and pushed through. It has resulted in congestion which is 30 per cent less in the central London zone, the lowest since the mid-1980s. There are 65,000 fewer cars, and 50 to 60 per cent of people from those cars have transferred to public transport.

I am particularly grateful to the Members of your Lordships' House who have stopped me from time to time in the past year or so and given me considerable details of how the precise arrangements for payment and non-payment are working in their own personal experience. It is always helpful to have such insights.

Another area of enormous progress has been the bus system. There are 1,000 new buses, and improved services on virtually every route where the contracts have been renegotiated. That has led to a 30 per cent increase in bus usage. Bus occupancy is now twice the level of any of the other English metropolitan areas. Then there are the plans for the new river crossings in the East End which will transform the economic development prospects of many areas there.

Obviously, I should like to refer to the progress that has been made on policing. There are 4,500 extra police. so that we now have over 30,000 police officers in London, the highest level ever. The 1,400 police community support officers who were recruited spend all their time on uniformed patrols in every London borough leading to a situation in which street crime is down by 20 per cent in two years; burglary is at its lowest level for 29 years and, despite the concerns of the noble Lord, Lord Clement-Jones, violent crime per head of population is lower in London than in any other part of England with the exception of the west country. If the noble Lord, Lord Clement-Jones, wants to know why there has been an increase in the precept, he need only look at the policing budget. Virtually all of the extra resources that have been raised in the precept have gone on policing, something which, as far as one can tell, the people of London think was a sensible decision.

My contention would be that those successes, that progress, would not have happened without the Mayor and the GLA. But could more have been done? That is the substance of the challenge that the noble Lord, Lord, Sheppard of Didgemere, puts before us. Certainly, the report published by London First a few months ago, entitled, Who is responsible for London?, which argued that the present division of responsibilities in London is inefficient and ineffective, clearly indicates that more can and should be done.

That report argued that central government should devolve tasks to the London level unless there is a real need for it to be held centrally, and that most of the programme delivery functions of the Government Office for London should be transferred. I find it extraordinary that there are now more civil servants in the Government Office for London than there were prior to the creation of the Greater London Authority. That makes one wonder what precisely were the issues that were devolved as part of that progress.

The report from London First specifically argued for the Mayor of London to be given more power over housing, neighbourhood renewal and skills training. That has also been picked up by my colleagues on the London Assembly, who have recommended that the GLA should take control of housing investment and housing strategy and that the Mayor should chair the London Housing Board.

The noble Lord, Lord Heseltine, who is not in his place, recently stated that London's future success, requires a significant increase in the powers of London's directly elected Mayor". He went on to say, Today, no one is in charge", so, that might have been a lapse into the party political as opposed to the strategic overview that he was giving. But the point that there needs to be a significant increase in powers is important.

The interim report of the Strategy Unit at No. 10 on the London project concluded, If London's economy is to continue to prosper and deprivation to he reduced, real strategic focus needs to he brought to London's challenges in the realms of housing and transport, and to the management and funding of its public institutions". Then we have the Barker Review of Housing Supply, which recommended that regional housing boards and regional planning bodies should be merged. That would imply that in London, the Mayor should take over the functions of the London Housing Board.

As we all know in this House, there will be referenda later this year in the North West, North East and Yorkshire and Humberside on whether elected regional assemblies should be set up. I find it extraordinary that if the people in those regions vote in favour of the creation of those regional assemblies, those assemblies will have more powers than the GLA over housing, waste, European Union structural funds, arts spending and sports spending. That does not seem to be a sensible distribution of responsibility.

The Government have argued in relation to elected regional assemblies that the people who have responsibility for such important issues should be democratically elected by and accountable to the people who are affected by their decisions. If that is the view in the other regions of the United Kingdom, why should that not be the same argument in London too for those particular issues? London has unique problems, which only London and its resources can resolve.

My view is that the GLA has demonstrated competence in the past four years and it should not have to wait for perhaps another five or 10 years to be given powers in relation to housing, culture and sport or, indeed, training and skills, until other untried or untested organisations assume responsibilities in other parts of the country.

I want to say a few words about the London Assembly. I believe that the greatest successes of the London Assembly in terms of making a contribution to London have been the outward looking scrutinies that its members have carried out; those involved, for example, in respect of smoking in public places; affordable housing, or the task of dealing with graffiti in London. I believe that those scrutiny exercises—I can say this because I was not part of any of those three exercises—set the terms of debate in London. That is precisely the role of Members of the London Assembly; that is, to set the terms of those debates.

I think that we have been less effective or useful when we have been inward looking. But perhaps when we were inward looking we would have been more effective had we perhaps had powers in relation to the Mayor's strategies. The Mayor's budget can be amended by the Assembly uniting in a two-thirds vote. That has yet to happen, but it concentrates the mind wonderfully as far as both the Mayor and the Assembly are concerned. Perhaps it would be sensible if there were a similar power to enable the Assembly not just to comment on mayoral strategies but to amend them in line-by-line specific circumstances where a two-thirds majority of Assembly Members propose such a change.

Of course, London assembly members have a role to play by sitting on the Metropolitan Police Authority and the London Fire and Emergency Planning Authority, and some sit on the London Development Agency. That is where many of us play our biggest role in London life.

We should also be clear that there are very many challenges for the future. London is the fastest growing city in Western Europe. Its population is projected to rise by 800,000 by 2016. That will lead to enormous pressures on public services, especially housing—all the more reason for housing investment and strategy to be included in the GLA powers.

Transport capacity must increase for sustainable growth. The noble Lord, Lord Sheppard, referred to the need for Crossrail. I add my voice to his about how important that decision is and getting it made firmly and clearly. I trust also—if I can be slightly partisan—that Crossrail will go through west London as well as simply down to Heathrow and Richmond.

We need to look at how we resource policing and the other emergency services. When we have been successful in securing the Olympic Games for London there will be the major matter of delivering a world-beating Olympic Games in 2012.

At present, London contributes between £9 billion and £15 billion a year more to the UK economy than it recoups from public spending. If the rest of the UK is to continue to get this benefit, London's infrastructure must be modern and efficient. There is, therefore, a need for investment in the capital's assets and its people to ensure that London remains a world-class city and a powerful driver of the rest of the UK economy.

4.1 p.m.

Lord Brooke of Sutton Mandeville

My Lords, it is a pleasure to follow the noble Lord, Lord Harris of Haringey. Like him, my elective offices both at council and parliamentary levels have always been in north London. It is also a pleasure to follow one place back my former constituent, the right reverend Prelate the Bishop of London, whose contribution was as characteristic as it was relevant. I declare my own interest as pro-chancellor of the University of London.

The whole of your Lordships' House is in debt to my noble friend Lord Sheppard of Didgemere for initiating this debate on the governance of London when, as he said, the Cabinet Office Strategy Unit has been conducting a review of this issue. The review is not only in incidental anticipation of the second mayoral elections, but also just under seven years after a similar parliamentary debate with exactly the same title. That was carried out in government time in the other place in the first week of June 1997, a little over a month after the Government's general election victory. At that stage, the Government were resting on their manifesto commitment to reintroduce a strategic element into London's governance without resurrecting the GLC. As to the detail, their response was not dissimilar to Alec Douglas Home's answer in the 1964 general election. When asked what the Conservative plans for VAT were, he replied: A lot of clever chaps are working on that at this moment". If we are in my noble friend Lord Sheppard's debt for initiating this debate, we are further in the debt of London First, of which he is now president. Its recent inquiry, which he described, and to which the noble Lord, Lord Harris, referred, is entitled, Who is responsible for London? Running a world city. For myself, and allowing for my necessary ignorance of many of the underlying factors, I found myself in agreement with 28—or around two-thirds—of the 41 recommendations; I found 12 of the remainder arguable without full personal knowledge of the arguments; and only outright mentally rejected one of them.

London First was not so indelicate as to say that the great Frank Pick would have had difficulty in drawing a schematic map of the London governance system analogous to his legendary map of the London Underground in the mid-1930s.

These remarks will necessarily be as much a commentary of the London First report as a critique of the Government's stance and the irony that, seven years after the Government's London strategy was unveiled, that same government should be revisiting it. Seven years ago the mayoralty was taken as a given, though Mr Livingstone himself expressed misgivings about the concept in the June 1997 debate, to which I referred. No one in government ever even tried to rebut the Economist's famous leader in an August edition of the early 1990s, that the then London should be taken as a model for 21st century city government and effectively added, Mexico City newspapers, please copy". The subsequent legislative gestation through the Commons Committee stage was a delight, with 27 of the 29-Committee members representing London constituencies. Your Lordships' House took great credit for amendments, but in fact many of them had been run as amendments in the Commons. Often they were on subjects new or unfamiliar to officials, who advised Ministers to reject them in the lower House, but then to adopt them in the upper House.

Achilles' heels should logically be unique, but on the London Bill its Achilles' heel was a commonplace, that the legislation was festooned with anti-Livingstone safeguards. It was a case of that familiar metaphor from rugby football of playing the man and not the ball. It will be for historians to calibrate the consequences, especially now that he is back in the larger scrum.

The Bill's persistent accretion of Christmas tree ornaments, so that the number of clauses rose 50 per cent during the gestation, was evidence of the famous observation that if you do not know precisely where you are trying to get to, any road will get you there. In parallel, Private Members' Bills, intended to eliminate the delays inherent in incoherent road works have been rejected in the interim in a vivid illustration of the principle that the best is the enemy of the good. We must hope that the best, which the delays embraced, will turn out in the current Traffic Management Bill to have been worth the wait.

Not so much in parallel as end to end, the equally delayed success of getting health authorities' boundaries and police boundaries to coincide with local government ones has now been overtaken by the discovery that learning and skills council boundaries are not quite so convergent. So, no doubt, metaphorically speaking, the road will have to be taken up again.

As to education, the abolition of ILEA, which survived the creation of the larger and wider area GLC, was the fruit of Back-Bench guerrilla tactics by that interesting political coupling of my noble friends Lord Heseltine and Lord Tebbit and not of premeditated government action. The arguments in the 1980s that the weaker boroughs needed the support of the ILEA structure have been sustained by the continuing low performance of the weaker brethren; and the speed of inner London's educational fleet is still crippled by the slower municipal ships.

I think it would be fair to conclude from the text of the report, that London First is somewhat "agin the boroughs". Its report says at the start of page 13 that the London boroughs lobbied for the creation of the GLA—but that is only up to a point, Lord Copper, to cite a legendary non-Member of your Lordships' House. The ALG or either of its constituent predecessors may collectively have been in favour, but some absolutely key boroughs among the best-managed ones were implacably opposed. I understand London First's implicit view that the boroughs are untidy, but that is because London is ultimately a higgledy-piggledy collection of villages. Le Baron Hausmann of Paris was unmistakably not an Anglo-Saxon, especially not the night we went to Birmingham by way of Beachy Head.

For Londoners, Notting Hill was enough for our fictional Napoleon. In my former constituency of the "Two Cities", what the mistaken calculations of Brussels about central London called the richest area in the European Union marched admirably side by side with also being the 48th poorest constituency in the country. The boroughs may he untidy, but their democratic link is much more tightly bound than the hybrid electoral arrangements of the Greater London Assembly.

London First's desire to have a say in the expenditure plans of the boroughs is double counted special pleading. A decade and a half ago the CBI argued for taking the non-domestic rates arrangements away from the boroughs on account of seismic rate rises when control of boroughs changed hands.

Another irony occurred in the second half of the 1980s. The GLC may have gone, but the strategic explosion, the Big Bang in the City, transformed for the good the economic growth rate of the whole of London. It invalidated the judgment of the social historian Sir Roy Porter in his Carlton Lecture, shortly before his tragic death in a cycling accident, which called for the restoration of the GLC and intoned that London was a city in decline. When in Question Time afterwards I asked him whether the new wave of refugees on top of the existing waves of creative energy and of new technology did not cause him to wonder about his pessimism, he said he did not know enough about technology to comment.

Nor am I entirely easy about London First's desire to integrate or divert agencies such as the Arts Council or English Heritage into the maw of London government. I know that the Mayor is personally opposed to the concept of heritage where it may significantly obstruct employment, but with his tourism responsibilities, he may be forgetting the richness and individuality of London's charm, and in his housing and population extrapolations, he may be forgetting the sheer pleasure of living in London as it is.

For the past 25 years, the City of London, two millennia in the making, may have been the liveliest archaeological site in Europe; the great squares of London were the product of a leasehold system largely unknown outside these islands; and first Bath and then London reinvented the crescent as an architectural concept, which had disappeared since the time of the Romans. Indeed, we must regret that the nerve of the great Lord Camden, an erstwhile Member of your Lordships' House, did not hold to execute the plans for an S-shaped double crescent in his eponymous Camden Town, which he had commissioned. The semi-detached house first appeared as an advertisement in St John's Wood in 1784.

Lest I seem carping about some of London First's jeux d'ésprit, let me say that its putting into practice Emerson's great dictum that action begets thought is a massive improvement on Glenda Jackson's wild gallimaufry of sectoral strategy piled on sectoral strategy in the Bill, now enacted. When asked what would happen if the strategies were in conflict, she replied that that was impossible because the Bill would not allow it. Happily, London is not a playwright's script, but a creature of energy and imagination whose very strength lies in its running riot.

I have two questions for the Minister. As the Government have endorsed the Mayor's strategic plan, can he explain why the Government believe that there will be a planning gain of 50 per cent affordable housing in Greater London when the boroughs told the former director of Shelter's inquiry on the matter on behalf of the Mayor that the target figures could not he achieved? Secondly, without ascribing blame, but in one of London's growth areas, why have houses been built in parts of the flood plain of the Thames Gateway, that great opportunity for regeneration, which the Association of British Insurers says that it is not prepared to insure?

Finally, whatever the Cabinet Office review shows, London will continue to be held back as long as the key positions in the Cabinet are held by Ministers from out of London: the Prime Minister from Sedgefield, the Home Secretary from Sheffield, the Foreign Secretary from Blackburn, the Deputy Prime Minister from Hull, the Education Secretary from Norwich, the Defra Secretary from Derby, the Secretary of State for Trade and Industry from Leicester, the Leader of the House from Neath and the Chancellor of the Exchequer, Health Secretary and Transport Secretary from Scotland. Against that critical mass, the only London MPs to serve in Cabinet since 1997 have been Mr Dobson, who was seduced from office to fight Mr Livingstone, the two Secretaries of State for Culture, Media and Sport and the present Chief Secretary to the Treasury.

In 1763, General Braddock's dying words, after ambush by the Iroquois, were, "We shall know better how to deal with them next time". I hope that this debate will have some of the same effect.

4.13 p.m.

Lord Chalfont

My Lords, in the course of my long life I have lived in most of the great capital cities of the world: Paris, Berlin, Vienna, Beijing and, of course, New York, which is a capital city in all but name. But for the past 40 years I have lived in the centre of London and I have a strong impression—this is entirely anecdotal, because I have not studied the matter closely in any of the other cities—that the administration, or governance, of London is still the most fragmented and incomprehensible of them all. Involved in the administration of London, in more or less degree, are central government, the Mayor and the Greater London Authority, the Lord Mayor and Corporation in the City, 33 separate boroughs, not to mention the Royal Parks, the Highways Authority and even the Arts Council. That is, of course, a recipe for chaos and, to some extent, chaos is what has emerged.

As London First, whose distinguished president, the noble Lord, Lord Sheppard, so authoritatively introduced this debate—I congratulate him not only on introducing the debate but on his leadership of London First—stated in its report, Who is responsible for London?, the main threat to London's status as a great world capital comes from within. It cites: failing public services, unaffordable housing and overcrowded and unreliable transport". Some of that is obvious to anyone who walks, as I do, to the Palace of Westminster every day and sees uncollected rubbish, the litter left by street sleepers, overflowing storm drains and, of course, the unmistakable signature of contemporary culture—chewing-gum on the streets.

It is true that some of that is already being tackled. Although I am not by nature a devolutionist—in fact, I think that we have already gone much too far in that direction in the United Kingdom— a great deal has been achieved, or at least promised, in the first years of an elected Mayor and a London-wide authority. Yet there is still a great deal to be done.

To be brief, I intend to concentrate on the effect of fragmented governance on the transport system in London. Much of that is being addressed in the Moses Room as the Transport Management Bill goes through Grand Committee. It is clear from the debate there that to cope with its unique transport problems, London needs a simpler, clearer and more effective governance.

It is true that, as the noble Lord, Lord Harris, said, the existing congestion charging system has had its impact on the volume of traffic in central London. But that is only in central London. Elsewhere in the capital, congestion has been increasing and journey times lengthening. Much of the solution to all that is in the hands of Transport for London and its commissioner, Robert Kiley. A short while ago, together with other noble Lords, I visited the control centre of Transport for London, not far from here. From that centre, TfL controls much of London's traffic, including the 4,800 sets of traffic lights in the capital.

The current performance of TfL is undoubtedly impressive, as are its plans for the future of London's transport. Yet it is worth remembering that TfL itself forecasts that by 2016, the population of London will have increased by 800,000—the size of another large city. In the past four years, the share of travel by public transport has increased by 4 per cent. But 800,000 more people means an additional 2 million passenger journeys a day. The figures just do not add up.

The Government, it is true, have shown signs of recognising the importance of investment in London's transport system, but neither investment alone nor transfer—that is, the move from private to public transport—will resolve the problem on their own. The present division of responsibility among central government, the mayor and the boroughs is just not capable of delivering the transport system essential to a great, world-class capital—especially the greatest capital in the world.

Where else would you find a situation in which the decision, for obvious environmental reasons, to ban the use of heavy goods vehicles at night is the subject of discussion in a committee of 33 boroughs? Where else would a situation be allowed to arise in which a major road—in this case, the A2—through a capital, collapses and its repair is delayed because the boroughs on the two sides of the highway cannot agree on the working hours for the repair gang? That is not an imaginary scenario; it has actually happened in London.

I do not know the answers to those problems, but they must be solved, especially if there is any prospect of London accommodating with any success the Olympic Games in 2012. Many well-meaning people are proposing incremental solutions, such as the excellent idea of the creation of a London commuter rail service that would integrate suburban rail services with the bus network and the underground railway. Some would increase the power of the Mayor of London; others say, "Over my dead body".

This is not a local problem; it is a national one—in some ways, international. Our capital city, despite its shortcomings, is in some ways the financial and cultural capital of the world. If it is to retain that status, it needs consistency in administration, not only in transport, on which I have concentrated, but in such areas as education of the workforce, public services, policing and forward planning. That is a matter for central government; as the noble Lord, Lord Sheppard, said, it is not a party matter. The Government began the process of devolution in London; now they must make it work.

4.21 p.m.

Lord Beaumont of Whitley

My Lords, I join the other speakers in this debate in thanking the noble Lord, Lord Sheppard, for giving us the opportunity to speak on this subject. I have seized the opportunity for two reasons. First, I was born in London and have lived here for the past 40 years, largely due to the urgings and preferences of a metropolitan-minded wife. I have, I hope, learnt some things about this great city in which we live. The second reason is that in London my party, the Green Party, has been successful and is having a serious influence on what is happening. We have three members in the rather small Greater London Assembly and a Member of the European Parliament. All those members take the governance of London very seriously.

We are all interested in the forthcoming mayoral election. Most of us probably have mixed feelings; I certainly do. Although I fully support Darren Johnson, our member in London who is standing for election, I am nevertheless thankful to the present Mayor of London for the job that he has done. In particular, the congestion charge was a very brave and useful piece of social engineering. If I had to choose someone who I thought would be the best possible mayor in a personal capacity it might be my old friend Simon Hughes, the Liberal Democrat candidate.

The main thing that I have learnt from living in London is the need to bring governance as near to the people as possible. I thought at the time—and nothing has made me change my opinion—that the move towards the present large boroughs was a disaster and went far towards destroying the real touch of the ordinary Londoner in governance. The present Mayor's theory that he would like even smaller and fewer boroughs is along the wrong lines, too.

During my time in London I have lived in three villages; I have not lived in a particular borough, although from time to time I have been involved in borough affairs. I have lived in Hampstead village. I have also lived in the village of Kew, where I was a vicar of two parishes. I was accepted by the Diocese of Southwark as a clergyman when the Diocese of London thought that to ordain a maverick like me—who was at the same time a colonial clergyman—was probably a mistake. They were probably right. Nevertheless, I had two parishes, and that was another village in which I lived, I now live in the village of Clapham. In each case, it is that village that I live in rather than the borough in which, theoretically, I am a member and a voter—I go to the polls, being as a Peer able to exercise my rights in that election.

My party would either break up the London boroughs to create smaller councils that reflect London's historic communities, such as those before the great reform, or keep the London boroughs and create urban parish or community councils so that different neighbourhoods had their own directly elected voice, which they do not have at the moment. I am delighted to know that there is a London Governance Review Commission, which can make recommendations on such matters.

We want to see the creation of urban parish or community councils, as London is the only part of the United Kingdom legally prevented from having them. We want boroughs to be broken up to create separate smaller councils. We want to see proportional representation for local government, not just for selfish reasons, but because it would produce much greater representation of different opinions, a good thing in itself. We have some hope that we may actually get that. When I first became a Member of your Lordships' House, there was merely a solitary, rather pathetic bleat from the Liberal Front Benches in favour of proportional representation. It is now widely accepted that proportional representation has a very important part to play in local government. We would like more power to be transferred to the Greater London Authority from central government and quangos such as the Port of London Authority and the Housing Corporation.

We live in the greatest city in the world, certainly the greatest pleasant city—I am afraid that I do not count New York as a pleasant city. It would be very nice if the future of the city were such that all its citizens could feel in touch with their government at different levels, right up to the Mayor and the Greater London Authority. It is very important for the future of democracy that voters should feel in touch with their immediate representatives. Unfortunately, that does not happen sufficiently at present, and we need reform in that direction.

4.29 p.m.

Baroness Hamwee

My Lords, I, too, thank the noble Lord, Lord Sheppard. Before the debate, the noble Lord, Lord Bowness, reminded me that he was an honourable exception in his party, in seeking to form, and forming, a cross-London group which included local government. Many of us were grateful for that. I was a member of the original board. I remember the different approaches of business and local government. When somebody made a good proposal, business would say, "That is very good, let's do it" and local government would say, "That is very interesting, let's consult". I think that we have moved together a bit since then.

I read the report of London First with interest. I was informed and probably prejudiced by my interests, which I must declare, as a Member of the Greater London Assembly, which I currently chair; as a candidate in the forthcoming elections; and as co-president of the Association of London Government.

Descriptions of the Greater London Authority often include the term "dysfunctional". Certainly, the GLA, which is not the whole of London's governance, as we have heard, is disarticulated, a term that I have picked up. It is true to say that the quango spirit has survived, despite governmental changes. I was taken by the idea that the GLA was a holding company. Perhaps, that again shows the difference between commercial and political backgrounds. Thinking about it, I realise that it is not necessary—or even a good thing—to seek a single, rigid organisation. I say that not only because we would probably never agree on one but because I prefer—I hope that it does not sound too "Mother pie", to elide the terms—to regard the elements of London government as a family.

However we regard the matter, we are all still concerned with outcomes. We judge the efficiency and effectiveness of members of the family on that basis, including their effectiveness in securing the engagement and trust of citizens. Both the bishop and the vicar, if I may call the noble Lord that, referred to that point. It is difficult to be engaged, if one is unclear with whom one is engaged. It is difficult to trust, if the responsibility for a given service is fractured—or appears to be—and each element points at somebody else for not doing the business. The sheer number and complexity of responsibilities and, sometimes, the lack of logic in their division, is an issue.

I am a firm believer in strategic government and in government at the right level, which is as local as possible. I am sorry that there are no parish or community councils in London. When we created the executive Mayor, we talked as if New York was the model. However, New York is different. New York has a so-called strong mayor. It has a council that is, as its website says, an equal partner with the Mayor in the governing of New York City", with sole responsibility for approving the budget and making land use decisions. That is very different from the situation in London, where the Mayor is, in formal terms, weak. In part, that is because of the continued existence and, indeed, growth of the Government Office for London, which has been referred to several times. The office has been described as extending its tentacles and having more funding responsibilities than before 2000. The mantra used by the noble Lord, Lord Rooker—"No new powers and no new money"—applied to regional assemblies, but it did not apply to the Government Office for London. We all know that almost everyone has what might be described as empire-building tendencies or, more benignly, a wish for powers to achieve what one knows to be right. However, I say simply that GOL could make a lot of friends by deciding quietly to divest itself of functions—or for the Government to do so—and retire from the scene.

Other relations in the family—the boroughs—would want to be clear about the demarcation of certain issues. The noble Lord, Lord Harris of Haringey, referred to housing, and it is one such issue. I agree with what the noble Lord said about waste and other functions. The boroughs' relationship with the Mayor is still settling down, if I can put it that way. Recently, I was at an occasion at which a representative of an outer London borough complained that the Mayor had been able to spend only 25 minutes in his borough in the past four years and that 15 of those were spent trying to find the way out and into the neighbouring borough. A representative of an inner London borough said. "Thank your lucky stars that he ignores you". Well, relationships between family members are not necessarily always straightforward.

The boroughs share the problem of boroughs throughout the country: they carry the can for the discredited council tax, while struggling to explain gearing and so on. That point is relevant to matters of trust, responsibility and understanding. My theme of wholehearted devolution to the lowest possible level applies there.

Even when presented with new opportunities, central government seem to shy away from joining up government. Otherwise, why was central government so determined, for instance, to have learning and skills councils that were separate and whose boundaries did not really replicate any other groupings? It is a serious point. Economic regeneration and skills are serious issues for London and, by extension, for the whole nation. I hope that that approach is being relaxed. I heard that recently, when the case for a London regional rail authority was launched by Transport for London, it was done at the request of the Department for Transport. However, I also heard that the Secretary of State for Transport would not have any of it. I hope that the Minister will take the opportunity this afternoon to clarify the Government's attitude. After all, a fully integrated public transport system for London is impossible without a rail authority that is as directly democratically responsible as possible.

Holding to account is a large part of the job of the Assembly, as the noble Lord, Lord Harris of Haringey, said. I must also say a word about what he called the more inward-looking task or skill of scrutiny. It is still quite new, and we are learning it. The Greater London Authority is not the same as local government, where councils are responsible for policy making and budgets and have powers to call in decisions. We heard about the two thirds veto on the budget. It may be a veto, but it is certainly a mechanism to force political groups to find common ground. Too often, finding common ground in any situation is finding the lowest common denominator. It is difficult to apply that when there are different philosophical approaches to taxation and the provision of services. I agree with what the noble Lord, Lord Harris of Haringey, said about considering a veto over policies and strategies. We do not have that, but I think that it would work well.

We do not all agree on what scrutiny involves. Should it be done in arrears only? I think not. I know that Select Committees in another place complain that the executive's responses to their reports are not always very good or very useful. However, the executive is required to respond, and it would be helpful if London's executive Mayor were required to respond to the scrutiny recommendations of the London Assembly. I am not sure that there has been a battle over funding for scrutiny anywhere, but it could be a battleground. The executive allocates resources to scrutiny. If we were to have a shrinking violet of a mayor, that mayor could use that as a tool to constrain scrutiny. One learns that being scrutinised can be unpleasant, but it would be useful if those who are scrutinised could understand that questions are sometimes asked in order to give the questioner ammunition to support a proposition, not attack it. I am acutely aware that it is impossible to cover all the issues today. My time is up. We cannot even cover the major question of what the London that we want to have governed is.

The current Government may not naturally turn to Gladstone for advice, but his reflection applies to devolution in London as well as to his comments at the time. He reflected that liberals have trust in the people qualified by prudence and that the other lot—not this Government, of course, but the government at that time —showed mistrust of the people qualified by fear. As I said, that applies to devolution now. I think that it applies to devolution from central government to London's fledgling—I hope that it will be supported and successful—strategic government.

4.40 p.m.

Baroness Hanham

My Lords, it is beginning to feel a bit like old times here today. Some of us have a long history in London local government that goes back a long way. I have worked as leader of the Royal Borough of Kensington and Chelsea council, on which I still sit. I have had many an interesting clash with the noble Lord, Lord Harris. I have known the noble Baroness, Lady Hamwee, in a similar capacity for the same amount of time as I have known the noble Lord, Lord Harris. I was a member of the board of London First when my noble friend Lord Sheppard first set it up, where we all worked together. The noble Lord, Lord Brooke, was a very respected Member of Parliament in the City of Westminster. Of course, we worked very closely with the City of Westminster on local government affairs. As I say, today is really like coming home.

I, too, thank my noble friend Lord Sheppard for generating this debate, which has come at a very interesting time. The campaign, if not actually opened with the publication of Simon Hughes' manifesto, is certainly on its way to being opened within the next few days. Certainly, in the next three or four weeks, there will be a great deal of discussion on London and London governance by the candidates.

The debate is therefore timely. Interestingly, practically no one has covered the same ground. Everyone has brought his own experience and interests; for example, transport and general governance or London. The noble Lord, Lord Sheppard, has come from the unique position of his business role. He has played a major role in London and the work that has been done to bring business and the boroughs together to ensure that business has a hand in London's governance. I am not sure that I agree with him that the business rates should be taken up by the Mayor and the GLA: I think that we would part company on that almost immediately since the business rates form at least part of the council's grants at the present time.

I have listened to the debate with great interest. I have already declared my interest as a member of a London local authority. As a member or as leader, I was never in favour of the creation of the Greater London Authority or particularly impressed by the repeated calls for a voice for London. Today, I waited to hear whether there was evidence of that view being wrong. I am bound to say that my personal experience is that it is not. Not much that has been said today has encouraged me to change my view about a voice for London.

The embodiment of the voice for London in the person of the Mayor has provided us with some marginal amusement, but many of his actions have not. I carefully seek not to be too personal about that, but one cannot allow the past four years to pass untouched. As everyone has agreed, London is a complex city to run. However, the prime responsibility still lies with the 33 London boroughs which, by and large—whether they are very good London boroughs as is mine or not quite so good as some others—provide a coherent and co-ordinated service for their residents. Increasingly, they are looking to work together, as in the past, where rational combination for services is justified.

Since the demise of the Greater London Council, the boroughs have all come together in a voluntary capacity within the Association of London Government, which existed before the demise of the GLC. As has been said, currently, there is a review of the balance of responsibilities between them and the Greater London Assembly, and the role of the Government Office for London. The noble Lord, Lord Harris, and the noble Baroness, Lady Hamwee, said something about that. I think that it is fair to say that there is a uniformity of view that the Government Office of London is too overweening in terms of London's affairs and needs to be reviewed. The current review will probably make recommendations on that, but I very much hope that it will trim its sails. Originally, it was reported that the review was set up to advise on a reduction in the number of boroughs. If that was its original intention, fortunately, wiser counsels have prevailed.

The demise of the Greater London Council was due to two main reasons: that is, first, the increasing burden of costs which were falling on the ratepayers, as they were then; and, secondly, the overlapping responsibilities and the increasing interference by the Greater London Council in the boroughs' affairs. The memory of that alone was enough to ensure that when the decision was taken to impose a Greater London Authority on the boroughs, there was resistance to it having anything but the most limited powers. However, there was strong agreement that if there was to be a Mayor and a Greater London Assembly, the assembly should have some teeth. Unfortunately, despite efforts in the other place and in this House, that did not happen. I think that at some stage there should be a review of whether the Greater London Assembly should have more control over the Mayor's decisions.

The cost to Londoners to run City Hall is beginning to bring into focus again the possibility that the Greater London Authority will be expensive. As has already been said, the cost has risen by more than 100 per cent within the three-and-a-half years of the authority's existence. The number of staff has accelerated. It seems likely that they will have to move beyond the glass house at Tower Bridge into other quarters as well. That does not augur well for other regional government that may result if electors are beguiled into voting for it because it would follow on the experience of devolved government.

There are increasingly areas in which mayoral policies are beginning to impact on individual boroughs. Let us take, for example, the desire by Transport for London to become increasingly involved in the boroughs' roads that are not strategic routes. That matter is in the Traffic Management Bill and was referred to by other noble Lords. We could also take the mismatch between the London Plan and the boroughs' local plans; the Mayor's enthusiasm for high-rise buildings, which is lacked by many boroughs; the Mayor's pronouncement on a 50 per cent proportion of affordable housing being required in any development—a size not practical or achievable by many boroughs; and, above all, the work undertaken by Transport for London.

I now begin to make a special plea. Nowhere has the effect been felt more than with the introduction of the central London congestion charge. There are many views about the success or otherwise of that initiative, which was given the go ahead under the Greater London Authority Act as a means for the Mayor to raise additional funding to support other transport costs; in particular, to improve the Tube. The congestion charge has raised such a modest revenue that little, if any, contribution has been made to London Underground. Indeed, the income for the contractors has already had to be covered by council tax contributions.

Traffic has reduced in central London, whether by the 70,000 vehicles claimed by Transport for London or not. Despite what it says, the down sides to that reduction are already being felt by business. A study by Imperial College has demonstrated conclusively that that is the situation. What is more, the effect is felt more widely than in the central zone because people are completely unclear about where the zone starts and finishes. Whether or not that reduction is a long-term phenomenon has yet to be explored. But it is certainly something to which one would have thought that more attention would have been paid before any decision to extend the zone was taken. But apparently not. The Mayor has recently announced that he intends to include my borough, the Royal Borough of Kensington and Chelsea, if he is re-elected in June, despite the fact that the council, residents and local businesses are all implacably opposed to the scheme.

His decision has not been helped by the consultation document, which has been sent to over 3 million residents in Greater London, when only 150,000 residents will be affected. This has caused enormous irritation and great concern that the decision is to be taken by people who will not be affected by the congestion charge extension.

Elections are due in the next few weeks and no doubt many of these matters will be discussed over that period. There have been positive outcomes from the Greater London Authority. It is right to say that the Thames crossings are one of those. However, if there are at any stage proposals to transfer more powers to the Mayor, particularly in the areas of housing investment and planning, there will be more than a little concern in London, which feels that it is being governed well enough by its boroughs. It does not need too much incursion by the Mayor.

4.51 p.m.

The Minister of State, Office of the Deputy Prime Minister (Lord Rooker)

My Lords, I congratulate the noble Lord, Lord Sheppard of Didgemere, on introducing the debate so well. I should point out that after three years in this House, this is my first Wednesday debate and, like the proverbial bus, I now have three on the trot. Everyone knows that I am not a Londoner, but it is clear that the noble Lord made a powerful case by speaking directly on the issue of the governance of London, which is what he said he would do. He stuck quite rigidly to that aim. I shall do my best to respond to the points that were made, but first I have some preliminary remarks that I want to place on the record.

This has been a stimulating debate and certainly different from the one held in the other place. It demonstrated again the quality of this House—and is a credit to it—by taking a more dispassionate look at the facts of the situation rather than the role necessarily played by the elected House. The Houses have two different roles and we should not complain that a debate on London is treated in different ways. However, while a small degree of passion was evident in some of the remarks, it is no surprise that the tone of the debate about how this great city should be governed was not the same as that in another place.

The Government strongly support and are deeply committed to London's economic, social and cultural success, and to doing what we can to enhance further its status as a world-class city. We all have reason to be proud of London's world-class culture, sporting resources, universities and business community. There is no question that it is the key engine of economic growth in this country. We do not have to apologise for that; we can state it as a fact. London is renowned for its innovation, diversity and entrepreneurship. Some 300 languages are spoken; there are over 200 theatres and 395 public libraries—that is a precise figure which I hope is accurate; it is what I have in front of me—and 125 dance companies. It is a centre of incredible social and cultural diversity that draws in workers from all over the world.

I shall deal with issues related to the economy when I answer some of the individual comments made during the debate. However, as the noble Lord, Lord Brooke, observed, London's huge economic dynamism means that inner London is by far the richest region of the European Union with a gross domestic product per head at 260 per cent of the EU average. Ten years ago the per capita GDP of London was under £12,000; now it is over £19,000. In 1992, unemployment in London stood at over 789,000; today, it is down to 450,000. Since 1997, unemployment has fallen by over 40 per cent.

However, I accept the view expressed—it is absolutely true—that in even the wealthiest regions, however the boundaries are drawn, there will always be pockets that are not as wealthy as the rest. That, too, was a point touched on by the noble Lord, Lord Brooke, when referring to his own constituency. Through the establishment of the Mayor of London and the Greater London Assembly, the Government gave back to London and Londoners a strong voice. We restored democratic city-wide government and strategic leadership of the capital. I know that major debates were held at the time. I did not take part in them, but I understand that at the time London was the only major capital in the world without a city-wide arrangement in the form of an elected body for dealing with strategic issues.

The Mayor and the Greater London Assembly have achieved much, although it is early days. It is under four years since the bodies were set up and the fourth anniversary is imminent. This arrangement is an attempt to work with Londoners and develop strategies to improve London's environment and cultural facilities, and to promote the city for business and tourism.

I shall deal with some of the excellent points made by noble Lords over the past couple of hours. The noble Lord, Lord Sheppard, referred to the net contribution London makes to the economy. I understand that the gap—the amount by which London subsidises the rest of the country—is estimated to be something between £7.25 billion and £17.4 billion. To be honest, I do not think that that is a fair way of putting it. However, a prosperous and successful London is essential for the United Kingdom as a whole. I make no bones about that. No one in their right mind would seek to diminish London as an economic generator as an excuse for building up the rest of the country. Along with the south-east and east of the United Kingdom, London is a net contributor.

However, London is not taxed more heavily than elsewhere in the UK. It is important to put that on the record; Londoners must not feel that they are unfairly taxed because the city is a net contributor to the economy. It is rather a consequence of an amalgam of the nation's progressive tax systems. One could argue that income tax is not all that progressive, but it is modestly so and the system ensures that the wealthy contribute proportionately more than the poor.

At the same time, given London's needs, public spending in the capital stands at 1.2 times the UK average, while public spending on transport is almost three times the UK average. That represents a 27 per cent real-terms increase over the past five years, since 1998–99, which is a financial increase of over £10 billion. London also has the highest per capita expenditure of any region at £6,522, followed by the north-east, at £6,463. So, while London is a net contributor, there are reasons for it.

Several noble Lords asked about the announcement on Crossrail. I regret to say that I have no further information about when the announcement is going to be made. It is a matter for the Secretary of State for Transport. But, in answering for the Government, I must tell noble Lords that we have no idea when the announcement will be made. We are studying further the findings of Adrian Montague's report, and we will publish those findings in due course. I regret that I do not have a date because it is not helpful, but that is the latest position.

I am pleased to say that between 2000 and 2005, almost £1.5 billion will have been made available to the London Development Agency. Its excellent work has enabled the creation of tens of thousands of jobs, learning opportunities and new businesses. The noble Lord, Lord Clement-Jones, who was electioneering from the first to the last minute of his speech and made no apology for doing so—I do not think he needed to, but that is what he did—raised, among other matters, the issue of council tax rises caused by the Mayor. Let us get this matter clear, although I think that my noble friend Lord Harris already did that in his speech.

The precept increase is being used to fund improvements in frontline public services. Some 85 per cent of the increase since 2000–01 has been used for policing. That is a fact and it is why there are now 4,500 extra police on the streets of London. A further 4 per cent has been used for London Resilience, thus accounting for 89 per cent of the increase.

The issue of abolishing the Government Office for London was also raised, and seems to be the one point of common consensus around the House. At one point it appeared that everyone wanted it, but I have to say that that does not include me, and it certainly does not include the Government. The Government Office for London and the other regional government offices, set up by the previous administration, play a key role in delivering Whitehall departmental policies and programmes, so they have a different function from that which might be envisaged. However, I stress that the Government Office for London is a regional office representing one of the nine major regions of this country.

It is true that a significant number of Government Office for London staff transferred to the Greater London Authority on its formation. However, that has led to an increasing focus on regional delivery and to an increase in the size of the Government Office for London. It is too early to review the London government arrangements in fewer than four years.

The speech made by my noble friend Lord Harris was quite brilliant because he explained issues I do not have time to go into. However, on the Government Office for London and its staff, I want to put it on record that it is untrue that the number of staff has risen since the formation of the Greater London Authority. The number has gone up and down. In April 2000, there was a staff of 375 and at present it is 325. It is true that the number has been as low as 240, but that is because of the way in which the functions of central government are being moved to be delivered on a regional basis.

We debated at length the Greater London Authority having the same powers as regional assemblies when the Bill went through the House, but the package of powers and functions for the English regional assemblies will reflect the needs and circumstances of the English regions. There will be similarities between the powers of those bodies and the Greater London Authority—but London is different. It is a single conurbation and a capital city, and the responsibilities of elected regional assemblies need not necessarily be the same. In some cases, elected regional assemblies will have greater powers than the Greater London Authority—for example, in housing—while in other areas—for example, powers over the police—they will have fewer.

The noble Lord, Lord Brooke, mentioned building on the flood plain in the Thames Gateway, among the many other important issues he raised. Let us get it clear—I have said it previously in this House—that most of the development in the Thames Gateway will be in what we would generally call the traditional urban areas on brownfield land. I reject the assertion that we can never build on the flood plain in the Thames Gateway. If Members of the House of Commons, as opposed to Members of Parliament, can spend £500 million on a new office block in the flood plain, clearly it is technically possible to build in the area in a way that does not cause damage. True, it costs a lot more to do, hence the cost of that office block. However, previously used land in the Gateway is subject to some of the most robust flood defences in the country, giving a risk of one in 1,000 years; that is 0.01 per cent taking us up to 2037. The Thames Gateway strategic partnership has been working closely with the Environment Agency on the issue for the past 18 months, and they are carrying out a longer-term flood management strategy to address the issues post 2031.

As regards the Office of the Deputy Prime Minister, the delivery vehicles we will put together to generate the growth in the Gateway and the projects we are funding are required to produce appropriate flood-risk assessments. So we are working on the issue. The idea that we are ignoring the flooding has always been a nonsense, but it got into the cuttings and keeps reappearing.

The noble Lord, Lord Chalfont, made an important speech but I shall reply only to one aspect of it. He concentrated on transport and spoke of the decision-making of the boroughs in repairing roads. We recognise the problem. It is exactly the kind of issue that the Traffic Management Bill, currently making its way through the House, is designed to address. It will put new duties on the boroughs to work with others for the benefit of the wider network.

The noble Baroness, Lady Hamwee, mentioned the regional rail authority. I can say only that the forthcoming rail review will identify the changes needed to enable the network to operate more efficiently for its customers and establish clear lines of responsibility. I understand that the Mayor has submitted proposals for a London regional rail authority which will integrate rail and other transport modes in the capital. These are important issues—no one can gainsay that—given the fact that it is a capital city.

I am watching the clock and I regret that I have not had an opportunity to comment on some important issues. It would be banal of me to comment on the important speech made by the right reverend Prelate the Bishop of London because the governance issues he raised transcended the political debate. He made it quite clear that the only bodies which can assemble groups of citizens to talk about London issues relating to themselves and their neighbours are the varied and massive numbers of faith communities in this capital city. A plea was made that they had been overlooked, but I certainly hope that that is not the case in the wider discussions in London.

Constant reference was made to the congestion charge. Occasionally, I forget to pay it on a Monday and I have had a reminder put on my little card. I never know when I am leaving and you cannot pay in advance. And I pay by telephone because the machine in this place never works properly. But the fact is that it has cut down congestion. Of course, it may be the case that it has cut it down so much that it has not raised as much money as originally planned, but there is no doubt that you can get around central London much more easily.

The powers were given to make the charge and it was a brave decision to take. Clearly, central government was not going to take it and it was left to the Mayor to decide to do so. With all the caveats, it has worked incredibly well. As regards the future and its extension, that is for Londoners to vote on. That is why we have a democratically elected mayor for this capital city.

5.6 p.m.

Lord Sheppard of Didgemere

My Lords, we have had a high-quality debate and we shall improve London's productivity by finishing ahead of the two hours—provided I do not talk for too long.

I cannot resist making a couple of points. I want to repeat and make clear that I believe that the governance should be as close to the electorate as possible. Sometimes that will be community groups; at others it will be boroughs; and sometimes it will be pan-London/the GLA. Rarely, however, other than on strategic issues, should it be the national government. If I came across as anti-borough, that was not intended; there was probably some confusion. I believe that central government should step back and that we should have a proper debate on how to organise government within London. That debate should be with the boroughs, the GLA and so forth.

Having told all speakers that they should not get into party politics, they did much better than Members of the other place. But everyone got into it anyway. I am tempted to ask whether a progressive tax on the individual is fair when there are high living costs in London. Living in London, one is automatically more highly taxed, but I will not get into that.

On Crossrail, the Government should realise that the business community is angry about the issue. We have gone through the feelings of despair and so forth and we are now angry. I can name—not here but outside the debate—at least two inward investors we lost last week in East London because they did not believe the Government were serious about transport.

As regards the Government Office for London, people think that being a businessman I should be analytical and logical. I can be accused of a lot of things, but never of being analytical or logical. Therefore, I am a strange combination of brain and heart—perhaps I should say brain and soul, but I am not sure I have reached that high level. I try.

In many instances, we must get the issues nearer to the electorate. They feel very frustrated, like those in the business community. About 350 people are involved, but it is no criticism of them. They are excellent people and, goodness knows, we could do with them in other areas of the Civil Service and so forth. However, we should get implementation right into the heart of London.

I am in danger of wrecking the productivity of the debate, so I shall conclude. I thank all noble Lords who have participated in an excellent and varied debate and I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.