Andrew Pelling (Croydon Central, Conservative)

I beg to move, That the clause be read a Second time.

I move the motion with the experience of having sat on the board of the London Development Agency, which sits in the wider regional development agency family. The targets that are set for the London Development Agency might be applicable to RDAs generally, but they have often been found not to sit so  well with an agency that operates within a separate democratic process. There is significant input from the Mayor and the Mayor’s office. However, a lot of the reporting information that is required of the London Development Agency has been quite irrelevant to the needs of an agency that operates within the overall democratic structure of London’s governance.

It is also important that the London Development Agency should be able to secure its direction from the Mayor, in having targets set for it in respect of his or her desires for the performance of the London economy, and for the rejuvenation of those parts of London that are deprived and in need of special support. In that respect, I am again grateful for the strong support for the new clause from London First, which says that it is appropriate that the Mayor should set such priorities, rather than central Government, so that the work of the LDA is entirely consistent with the overall economic development strategy for the capital.

Our approach throughout the discussions on the Bill has been, where possible, to devolve powers from central Government to the Mayor, while also ensuring that the Mayor does not secure powers up from local government. The new clause therefore sits well within our overall philosophy for the Bill—to be radical and positive about extra powers for the Mayor, while ensuring that political decisions are made at the lowest political level, in terms of their closeness to the residents who elect the politicians.

Tom Brake (Shadow Minister, Department for Communities and Local Government; Carshalton & Wallington, Liberal Democrat)

I shall speak briefly in favour of the new clause, which is a devolutionary measure that we support. We have taken guidance from the Liberal Democrat members on the GLA throughout, to ensure that what we say there is entirely consistent with what we say here. That is something that other parties might envy, particularly the Labour party, in that it ensures a consistent approach to such matters.

The new clause is important and would provide strategic direction for the LDA. It is true that the LDA has a lot of targets, but they seem to change with some frequency. It is not always clear from the agency’s budget what precisely it is seeking to achieve. On the basis that the new clause not only would give the agency greater direction and more focus, but would be a devolutionary measure, I should be happy to support the hon. Member for Croydon, Central, should he press the matter to a vote.

Jim Fitzpatrick (Parliamentary Under-Secretary, Department of Trade and Industry; Poplar & Canning Town, Labour)

I am afraid that the Government cannot accept the new clause, which would enable the Mayor, on a statutory basis, to set the LDA’s annual performance targets, following consultation with the Secretary of State.

The 1999 Act amended the Regional Development Agencies Act 1998 to establish the LDA as a functional body of the Mayor. The office of the Mayor was given considerable statutory control over the agency—the Mayor appoints its members, approves its strategy, decides its budgets and can issue directions and guidance to it. The current Mayor has already used those powers effectively to ensure that the LDA is supporting the economic development and regeneration of London. Most notably, the agency played a crucial role in supporting the Olympic bid and assembling the land for the Olympic park. The  Government expect the Mayor and future Mayors to continue to shape the agency so that it can better address the key challenges facing London’s economy.

However, the LDA is also an integral part of the wider regional development agency network for England, which receives considerable funding from the Government—more than £2.2 billion of taxpayers’ money this year, of which nearly £400 million is for the LDA itself—to support regional economic development and to contribute to national objectives such as increasing productivity. Given that considerable Government funding, it is important that the LDA, like other RDAs, supports underlying national objectives when taking action to improve London’s economy, which is why it is part of the wider RDA tasking arrangements. As a condition of the LDA’s grant, the Mayor has been required since the last spending review in 2004 to seek the Secretary of State’s approval for the LDA’s annual targets.

Those arrangements have given the LDA sufficient flexibility to develop its own programmes and projects and to address London’s specific challenges, such as affordable child care and the Olympic land assembly programmes. At the same time, they provide assurances to Government and ultimately Parliament that funding given to the LDA is contributing to underlying national objectives.

By putting the LDA’s performance targets on a statutory footing, the new clause would change those arrangements substantially. The Mayor alone would be responsible for setting the LDA’s performance targets following consultation with the Secretary of State. That arrangement would be enshrined in statute and would remove an important Government control that currently ensures that the LDA and national economic policies are complementary and mutually supporting. The merits of such a new clause must be carefully considered, and we suggest that that would be done best not as a last-minute change to the Bill but as part of a wider policy review.

The Government’s review of sub-national economic development and regeneration is considering the role of RDAs and other sub-national bodies involved in economic development and regeneration, and whether the framework and relationships between them and with central Government are the most effective for meeting the long-term economic challenges. The review may have wider implications for the LDA’s governance and performance arrangements, and we should not introduce a statutory change to the LDA’s output target arrangements before the outcomes of the wider review are decided. The sub-national review will report to Ministers before the comprehensive spending review later this year.

The hon. Member for Croydon, Central has raised the question of land disposal several times. I can advise him that TFL and the LDA have a different statutory disposal of land consent regime. Under section 5 of the 1998 Act, the LDA needs to seek the Secretary of State’s consent for the disposal of land only if that land is being disposed of at less than market consideration. Following the Government’s decision in the 2005 Budget to give the LDA more freedoms and flexibilities, that consent is only required for the  disposal of lands worth more than £2 million on the open market. Local authorities are subject to a similar statutory consent regime.

I hope that that clarifies the position and assists the hon. Gentleman. However, as I have explained, the Government cannot accept the new clause as it stands and urge that the motion be withdrawn.

Andrew Pelling (Croydon Central, Conservative)

I am grateful for the support of the hon. Member for Carshalton and Wallington. I know that the issue is well considered by his colleagues in the Liberal Democrat group on the London assembly. I hope that as the debates continue elsewhere, the Government will give clear cognisance to the value of such a devolutionary approach, which seems after all to be the theme that they also wish to pursue. With those comments, I beg to ask leave to withdraw the motion.