I beg to move, That the clause be read a Second time.
We return to what the Liberal Democrats and the Conservatives believe is a fundamental flaw in the Bill. If Ms Buck, who has just left the Chamber, had wished to be cruel, she could have pointed out that we were simply re-tabling a measure that we had considered before and that the arguments that we were deploying in its favour had not been developed since we considered the matter in Committee. However, the difference is that new clause 8 commands the support of both my party and the official Opposition, so I suspect that there is a greater likelihood of it being agreed to.
Members of the Public Bill Committee, some of whom are in the Chamber, will recall that we had long and detailed discussions about various aspects of the Mayor's budget. One long debate related to the component of the Mayor's budget for the assembly. Concern was expressed about whether a future Mayor might use his or her powers to restrict the assembly's budget to such an extent that it could not do its job of scrutinising the Mayor's business. Several extremely complex formulae were also cited in Committee. I will not attempt to describe or elaborate on them today, and I hope that no one will challenge me to do so. Even Michael Gove would have some difficulty explaining the way in which his floors and ceilings operated —[ Interruption. ] Perhaps Mrs. Lait would like to intervene to clarify the purpose of those extremely complex equations and their factors and parameters.
The crux of our debate was the need to ensure that there was more scrutiny of the Mayor's budget and a greater role for assembly members in ensuring that the Mayor came forward with a budget that they could support. Hon. Members will know that the existing arrangements require two thirds of assembly members to oppose the Mayor's budget if it is to be blocked. Many hon. Members in the Chamber must find that difficult to understand. When the Chancellor presents his Budget, he needs to secure the support of a simple majority if it is to proceed, but that is not the case for the Mayor's budget. One of the aspects of our Committee proceedings that I regretted was that no convincing argument was made for why that was an appropriate way of operating.
We fully support the Government's desire for more powers to be transferred from central Government to the Mayor. That is the right direction of travel, and it is something for which we have consistently argued since back in 1998, when the original Bill was considered. As I said earlier, we supported giving the Mayor additional powers on rail in London nine years ago. However, we have been just as adamant that as the Mayor acquires additional powers, scrutiny and oversight should be enhanced. There is no logic in requiring the Mayor's budget to command the support of only a third of assembly members. Democracy dictates that a simple majority should be required.
In Committee, the Under-Secretary of State for Trade and Industry, Jim Fitzpatrick, gave us an uncharacteristically unconvincing explanation. The Minister usually does a very good job of explaining why the Government have adopted a particular position, but he said:
"The GLA's budget setting process is now tried and tested. It allocates some £9 billion in funding per year and it has been shown to work." ——[Official Report, Greater London Authority Public Bill Committee,
Londoners would dispute that statement. Given that there has been a 100 per cent. increase in the Mayor's precept over four years, many Londoners would say that the Mayor's budget process does not work at all.
The Mayor's precept is a relatively small percentage of the overall council tax bill. People see the headline bill that they receive and then berate their local council, irrespective of its political complexion—whether it is Labour, Conservative or Lib Dem—for the increase in council tax. However, the Mayor's precept is hidden in the council tax, and it has often increased by significantly more than the council tax.
The hon. Gentleman makes a valid point, with which I entirely agree. However, he should not base his judgments solely on the standards of the London boroughs of Sutton, Kingston and Richmond. The precept is not an especially small percentage of the council tax in City of Westminster or Wandsworth. Indeed, the mayoral precept now amounts to more than 40 per cent. of the total council tax bill in such areas of central London. I hope that the Minister will take full account of what the hon. Gentleman says, because the precept has nearly tripled over the seven and a half years for which we have had the mayoralty in London. The mayoralty is taking a hell of lot more money, and we have the prospect of an ever-larger precept due to the Olympic games and the appalling economics of the madhouse transport policies that the Mayor is inflicting on us for many years to come.
I thank the hon. Gentleman for highlighting the fact that the Mayor's precept makes up a significant proportion of the council tax in some boroughs, although, for most boroughs, I think that it is fair to say that it can be hidden away in the detail. That is why there is an argument about whether there should be a change to the billing arrangements for the Mayor's precept, to introduce a little more clarity and transparency into the system and to allow people to recognise that although their council tax bill might be going up at the rate of inflation or above, the rate of increase in the Mayor's precept is significantly higher than the rate of inflation.
I speak as a former Wandsworth councillor. How does the hon. Gentleman propose to make the Mayor's precept more transparent so that London council tax payers will know the taxes that the Mayor is levying?
The most straightforward way might be for the local authority—which is responsible for producing the council tax bill, which includes the Mayor's precept—to print two separate bills. People would therefore get their local council tax bill and Ken Livingstone's bill in the same envelope. That would provide extra clarity.
I am only sorry that Ms Buck is not here. She might also propose a single waste authority, to ensure that that second bill was recycled.
I thank the hon. Gentleman for his intervention, but I do not think that it requires a response.
In Committee, the Minister said:
"The two-thirds majority requirement on assembly amendments to the Mayor's final budget in particular remains appropriate."
That was a bold statement, but as far as I can recall, arguments to substantiate it, especially given the scale of precept increases seen by Londoners, were noticeably absent. The Minister went on to say:
"Otherwise, allowing the assembly to amend the final budget—like the draft budget—by a simple majority would alter the balance of power at the GLA radically. It would weaken the position of the Mayor, and it could be a recipe for confusion."
Again, that was a bold statement, but it was not backed up with any argument. Of course, the balance of power at the GLA is being radically altered by the Government. The Mayor is getting extra powers, some of which are from central Government, which is to be welcomed, while some, as we will hear when we debate the new clauses on planning, are being taken away from local authorities. The balance of power is already being altered, in the Mayor's favour, so additional powers of oversight and scrutiny for assembly members are therefore required. Finally, the Minister said about the arrangements:
"That something is tried and tested does not mean that it cannot be improved." ——[ Official Report, Greater London Authority Public Bill Committee,
That is the purpose of the new clause—to improve the arrangements and provide greater scrutiny.
Londoners would agree on the need for an improved budget process that would stop the annual hike in the Mayor's precept or at least make it much more visible, so that people can make a clear and conscious decision about whether to support what the Mayor is doing. The Government have not deployed convincing arguments in favour of granting the Mayor special privileges in relation to his budget. Therefore, even at this late stage, the Minister could repent and recognise that increased mayoral powers must be offset by greater powers of scrutiny and financial control for the assembly. If he does not, I will press the matter to a Division on behalf of my party, and I understand that we will receive the support of Conservative Members in such a vote.
I am sure that it was. I am surprised to hear that any part was less good than any other. I always enjoy listening to the hon. Gentleman's wise words, and he is a close neighbour. [Interruption.] My hon. Friends are shouting that I should stop being so nice to the Liberal Democrats. I will stop now— [Interruption.] I know; I already have a bad reputation.
The hon. Member for Carshalton and Wallington quoted a number of people in support of his commentary. I would also like to quote somebody in support of his speech—Mayor Livingstone. When the assembly voted down the Mayor's budget this year by 16 votes to nine, the Mayor enjoyed shouting out each time, "Carried!" Of course it was carried.
In fact, the Mayor was shouting that it had been carried by an underwhelming minority.
But it was sufficiently whelming under the current Act and the Government's new GLA Bill to allow the assembly not to stand in the way of the Mayor's budget. That is especially important, given that the hon. Gentleman has mentioned the significant increase in the tax demands on residents of London.
It cannot be good for democracy to elect a body with a voting role on a budget and then to turn round and say that a two-thirds majority is required for the will of that assembly or Parliament to be decisive. The reputation of the House would not be well supported if the Government's annual budget could be voted through by 218 Members of the House. The House would have no credibility were that the case. It is a fundamental blow to the credibility of the assembly to set such a two-thirds requirement.
In Committee, the response was that we should consider the London assembly to be a scrutiny body—perhaps an effective one. If we are spending £11 million a year on the London assembly, however, that is a very expensive scrutiny committee for London. When the Committee considered budgetary issues, I also proposed that we might at least consider following the model in place in New York city, of a separate budget and performance office. The London assembly could have that in place in a statutory fashion, with the statutory involvement of stakeholders, the Mayor and the GLA family functional bodies, and that would ensure at least some value for money from the £11 million a year spent on the scrutiny process. As a member of the assembly, I accept a certain amount of "mea culpa"; perhaps it is a great failing of assembly members that we have not been able to impose that.
I am grateful to the Minister for his kind comments from a sedentary position. As he implies, it is partly to do with the system, which the Bill will leave in place. Unfortunately, particularly under the proportional representation system of the assembly, it is a quixotic target to bring together parties from the far right, right, centre and left to vote down a mayoral budget. That is the target that we have been set—to bring together Greens, Liberal Democrats, Conservatives and a far-right group that goes under varying names over the years, depending on which party those people happen to alight on.
One can understand why Londoners turn round to their assembly members and MPs and ask, "Why can't you stop the Mayor making these increases? Surely, in any democracy," which electors understand elected assemblies to be, "One vote is enough." I explain to them, "I'm terribly sorry, but we have to secure a two-thirds majority." Members of the public cannot understand why they are even asked to go to the polls to vote for those representatives when their powers are so significantly neutered and no appropriate approach has taken place.
The Government had an opportunity to bring credibility to the assembly by allowing for a simple majority vote of London's representatives, who are elected at the same time as the Mayor. If the Mayor is not capable of carrying London's representatives by a simple majority, something must be wrong in the governance of London, and something must be wrong with the Mayor himself.
I endorse everything that my hon. Friend Mr. Pelling has said. I should also point out again—I said this in Committee, but it is worth repeating for those who were not there—that he has chaired the assembly's budget committee for a number of years. There is probably no one who knows more about the intricacies of the budget system than he does.
We are discussing a particularly disappointing passage in the Bill. The Minister has missed an opportunity to restate the rebalancing that we all hope to achieve through the Bill. London government has moved on. We accept—or rather, almost all of us accept—that there is a devolved system of government for London. If that system is to work, it is right to look again at a sensible settlement between the two elements: the Mayor and the assembly. It has been suggested during the passage of the Bill by some Government Back Benchers that really, there is no equality of mandate. I dispute that. The members of the assembly are elected on the same day as the Mayor and by the same electors. Those voters expect the members to have an equal share in the governance of London. What has been missing throughout the Bill is the sense of entrenching partnership, and the provisions for the budget highlight that.
I referred to the issue earlier in relation to transport, in that transport has to be delivered through a partnership between the Mayor's organisation, Transport for London and the boroughs. The same ought to apply to the governance of the GLA, which should be a partnership between the Mayor and the assembly.
Does the hon. Gentleman agree that the sense of partnership should be enhanced as the Mayor takes on additional responsibilities—for climate change and health inequalities, for instance—rather than sticking with the status quo?
The hon. Gentleman is absolutely right—I, too, am in danger of agreeing with the Liberal Democrats too much. That view is common sense, and is recognised on a cross-party basis by London councils and all the principled parties of the London assembly. If we are going to make London governance credible to the people of London, as many of us genuinely want it to be, there must be a sense that there are proper checks and balances in the system. It is the lack of checks and balances that undermines the credibility of the current devolved system in London.
I had no problem with the Mayor receiving some extra powers, on climate change and other issues. I know that we are going to disagree over planning, for the reasons that we have outlined, because we see the proposals as centralising. As I have said before, I would have liked the Minister to go further and get rid of the Government office for London. I would also like more to be devolved to the city governance level. However, the more devolution we have, the more we need a sensible and mature set of checks and balances. That is what is missing. That is also where the Government have fallen for the Mayor's siren song, in suggesting that a strong-Mayor model—that was the mantra that was trotted out—precludes a meaningful say for the assembly.
With respect, that view is flawed, and the New York example is a demonstration of that. The city council in New York has a significantly stronger hold over the budget than the assembly does over the Mayor in London. The Minister might be surprised at that, but under the charter of New York city, the council can change the mayor's budget in much more detail than the assembly is permitted to in London. The New York city council can change individual budget heads, and can do so by a simple majority. That the New York city council does not achieve that in practice is down much more to the political culture than to the one-party domination of the Democratic party or anything else. Legally, the strong-Mayor model in New York gives the legislature—the city council, the assembly equivalent—much more power than the assembly.
It is particularly strange that there should be an insistence on the two-thirds majority, when we happen to have a proportional representation system. I do not much like the proportional representation system—it is not what I would have preferred—but it seems needless to have the double complication of PR plus a two-thirds majority. If the desire is that a Mayor should be obliged to seek a reasonably broad coalition to get his budgets through, he would have to do so under a PR system, come what may. There is no need for the extra hurdle of a two-thirds majority. That creates an artificial situation, which undermines the credibility of the whole structure.
As my hon. Friend the Member for Croydon, Central said, if any of us talk to our constituents about the assembly, they ask, "What did you do about the Mayor's precept?" I say, "I voted against it, but we didn't have the numbers." However, if they then ask how many of us there were, and I say that 15 or 16 of us voted against it but only nine voted for it, they think, "You must be mad if that means it went through." Nothing that I can think of could be more deliberately designed to make people cynical about the democratic process than an entrenched system that says that, by Act of Parliament, the loser wins. However, that is exactly what we have. That is crazy, and it makes London governance less credible. On a separate point, it is a great shame, too, that the Government have not considered the assembly's sensible suggestion.
That is absolutely right. It is indicative that the Mayor should be sitting in the public gallery during the budget meeting, adopting that mocking tone. That is interesting too, given that he was opposed to having a Mayor of London when the legislation was going through—but we all know him well enough of old to know that if he sees even half a rein of power, he will grab it and vault over it. His change of spots has come as no surprise to those of us who have known him for many years. The Mayor's tone is perhaps also indicative of a man who lets power go to his head a little. There is a risk that an unfettered London executive with the better part of a £11 billion annual budget will be all too readily seduced into thinking, "I'm accountable to no one," beyond that mystical process of election that happens once every four years.
I am listening with interest to my hon. Friend, but does he agree that that is not the only democratic deficit, because we have one here as well? Devolution in Wales and Scotland has led to Welsh and Scottish questions, but as local London Members of Parliament we do not have the ability to hold anybody to account in the House at that level, as our colleagues in other parts of the country with devolved government do.
I have sympathy with my hon. Friend's point, which was also made earlier in relation to the behaviour of Transport for London. It is a piece of pure fortune that my hon. Friend the Member for Croydon, Central and I happen, temporarily, to wear two hats. That gives us a measure of privileged access that our other hon. Friends representing London seats do not have.
That point is a further example of the underlying problem to which the budget is fundamental. The Government said in Committee that they were accepting the assembly's concerns about the budget by protecting their own element of the budget, through the separate budget component. With respect, that is a small recognition and a small concession. As on a previous occasion, I do not say that it is nothing, but it does not go anywhere near far enough, for the following reason. There is a ceiling, but there is no floor to protect the assembly's budget from the Mayor's depredations—and his attitude towards the assembly was amply demonstrated by his interjection from the public gallery during the budget debate.
However, even that would be a small thing when set against the real cry that most Londoners would want to make, which is, "I elect my assembly member to have a hold over the Mayor"—not a stranglehold, to prevent him from doing what his mandate says, but in the same sense that Parliament has a hold over the Chancellor of the Exchequer when he comes to seek supply. It is not unreasonable to say that if we have created a deliberative and, in a small way, legislative body—the assembly's only quasi-legislative power is in relation to the budget—it should operate through the ordinary majoritarian process that works everywhere else in the United Kingdom. What is so peculiar about this one budget, of all the budgets of any publicly elected body in the UK, that it has to be dealt with by a two-thirds majority? That makes no sense, and the strong-Mayor model is no justification for it.
I am sorry to have to remind the Minister that on Second Reading, I told him that he had a chance to be the Alan Curbishley figure of this Bill by salvaging something from the wreckage. I am sorry to have to say that on current form, neither the Bill nor our mutual football team are looking in much better shape than when we set off. I am beginning to think that I should have had more hopes of the Minister than I had of West Ham United redeeming themselves. I say these things with a very heavy heart, as Members know. I hope that the Minister will cheer us up by saying that the Government will reflect on this issue and give the assembly the basic power that every ordinary Londoner standing on the terraces of Upton Park would say, were they asked, it ought to have, as a matter of common sense.
Much as I love my neighbour, my hon. Friend Robert Neill, I was rather hoping that we would get through this evening without endless references to football—if only because I do not understand them. However, that does give me the opportunity to thank both—
I was about to thank my hon. Friend for his contribution to the Committee, but if we are going to talk about football, perhaps we should get it out of the way now.
Thank you, Madam Deputy Speaker. My hon. Friend's intervention went straight over my head. My only thought on this subject is that I was in Cardiff on Saturday and Sunday, and I am not sure that that match was the best example ever of football. However, I did not watch it, so I cannot contribute anything further.
I was about to thank my hon. Friends the Members for Bromley and Chislehurst and for Croydon, Central (Mr. Pelling), both of whom are my constituency neighbours, for their enormously useful contribution—minus the football remarks—to the Bill Committee, for their comments this evening, and in particular for their observations on the assembly budget. Their intimate knowledge of how the budget system works—or does not work—is very valuable to us all. I also thank Tom Brake for tabling new clause 8, which we will support if it is pressed to a vote.
I do not want to take up much more time, given that the arguments have been exceedingly well made. I am rather glad, however, that Mr. Raynsford is back in the Chamber, because he is responsible for the whole mess that the assembly budget is in. It was during his stewardship of the original GLA Bill that the Government failed to take into account the impact of their proportional representation system, which means practically by definition that no one political party will ever get a majority—and deliberately so, as he clearly explained at the time. However, the difficulty was that, in line with the mindset of the first-past-the-post system, of which I am a great supporter, the Government imposed the three-quarters majority rule on the budget vote.
I am grateful to the hon. Lady for giving way. I am not seeking to cause an argument; I am simply wondering whether she supports the electoral system that operates for the leadership of the Conservative party. Of course, if she is in favour of a first-past-the-post—
Thank you very much, Madam Deputy Speaker, for giving exactly the same answer that I would have given.
It is the conjunction of the first-past-the-post mindset, whereby three quarters of the assembly must vote against the budget, and the d'Hondt system that has led us to this crazy situation. The London assembly has even fewer budgetary powers than the European Parliament has—and it did not have many. I therefore thank the hon. Member for Carshalton and Wallington for tabling the new clause. Year after year, sensible Conservative proposals for the Mayor's budget have been overturned with an arrogance that most council tax payers are just beginning to come to terms with. As my hon. Friend Mr. Field said so succinctly, that is easy to see with the Westminster council tax budget. It is less simple for those of us in the outer suburbs and other boroughs—excluding Wandsworth, perhaps—to see the enormous hike that the Mayor imposes on us year after year. The Conservative group on the assembly and some of the other parties have from time to time proposed much more sensible budgets that would have obtained more and wider support for the institutions of the Mayor and the assembly, but they have been turned down.
I am beginning to wonder what the impact will be on the precept and the council tax payer of the Mayor's proposed aggrandisement of London through the creation of six "gateways" into London, quite apart from the impact on those poor boroughs that will have to give planning permission for those monstrosities. I would have thought that the Mayor's greatest monument is the congestion charge. His producing such a proposal shows that his behaviour is becoming infinitely more erratic. For the first time, we might actually get a majority against one of his proposals, which would enable us to turn down his budget.
Given that we cannot get a change to the election system into the Bill, the Committee tried, and we are now trying, to obtain much more rational control of the Mayor's spending. We support the new clause, and I hope that we can ensure that the Government have to think again after we vote on it.
Mrs. Lait, like me, is a Londoner, although we do not speak with the same classic Cockney accent as some of our fellow citizens. She was being uncharacteristically uncharitable to my right hon. Friend Mr. Raynsford. She accused him of being responsible for the mess that she says we are in, when we should be congratulating him on his stewardship and the leadership that he showed in pioneering the original Bill through the House in 1999. Our presence here today is testimony to the success of the model that he laid down, and he should be congratulated for what he achieved in steering through the original Bill.
New clause 8, which would allow the assembly to amend the Mayor's final draft budget by a simple majority rather than a two-thirds majority, was debated exhaustively in Committee. Tom Brake will not be surprised, therefore, to learn that the Government remain unconvinced of his arguments, just as he is unconvinced of mine. We remain firmly of the view that the two-thirds majority requirement for assembly amendments to the Mayor's final draft budget is entirely appropriate for the GLA and the strong-Mayor model that we set up for London. As I emphasised in Committee, the GLA is based on the simple principle of a strong executive Mayor and an assembly that can hold him to account through its important scrutiny role. It is therefore only right for the Mayor to propose the budget for the GLA and its functional bodies, and for the assembly to have the power ultimately to amend the Mayor's draft and final draft budgets for the GLA group, in order to act as an important check on him.
However, as the budget is fundamental to the delivery of the Mayor's priorities for London, it is also important that the assembly be unable readily to amend the final draft budget simply to thwart the Mayor's wider plans; otherwise, his ability to deliver his democratic mandate for London would be considerably weakened. That is why the Government believe that a two-thirds majority is the right threshold for a valid amendment by the assembly. It ensures that amendments have to be supported by a broad cross-section of assembly members, and requires a clear consensus that the Mayor's final draft budget is flawed. It allows individual members or parties on the assembly to influence the development of the Mayor's budget, but it does not fundamentally weaken the Mayor's responsibility for the budget. Allowing the assembly to amend the final budget—like the draft budget—by a simple majority would do so. It would considerably alter the balance of power at the GLA in favour of the assembly and those parties that are able to muster among themselves a slim majority of assembly members.
Under a PR system, real influence could be given to very small groups that are in a minority in the assembly. At present, the Greens have the influence, but it is possible to envisage a scenario in which the British National party might hold the important ninth vote. We are storing up trouble for the future by opting for this anti-democratic proposal that a third will be able to block proposals.
The hon. Gentleman repeats the points that he made in debate today and in Committee. We obviously disagree about the model and I will come on to the issue of the mandate and the effectiveness of the procedures that are in place for approving the budget.
As I was saying, those parties would effectively be able to veto the Mayor's proposals, undermining his ability to deliver his democratic mandate. That would ultimately be bad both for the post of Mayor and more importantly for London itself, especially as the capital needs a Mayor who can provide strong leadership and make, if necessary, tough budget decisions for the benefit of London.
The hon. Member for Carshalton and Wallington raises the concern that we have not adequately answered his challenge. We simply have a fundamental difference of opinion about the balance of powers between the Mayor and the assembly. I acknowledge his generous comments about my usual ability to explain, but those skills have deserted me on this occasion. He does not think that Londoners would agree, because of the rise in the rate of precept. All that I can say is that Londoners have the ultimate sanction, which will determine whether the balance of powers is correctly set or not.
It was alleged that we have not increased the powers of the assembly. I remind the House that the extra powers that we have given it include confirmation hearings for key mayoral proposals; stronger policy development, with the Mayor to have regard to assembly comments; powers to summon for three to eight years; the ability to set its own budget; and the ability to produce an annual report. That scrutiny broadens and reflects the wider responsibilities of the Mayor.
Robert Neill raised a question about the assembly's own budget being protected. We answered those points in Committee, because we believe that were the assembly's budget to be threatened by any Mayor, there would be enough mutual self-interest to construct a two-thirds majority. I am grateful for the hon. Gentleman's proverbial vote of confidence and I will stick it in my back pocket.
The Government cannot therefore support the new clause. I would urge the hon. Member for Carshalton and Wallington to withdraw it, but I think that he feels too strongly about it. In that case, I ask my hon. Friends to oppose him in the Lobby.
I have listened carefully to the Minister. I suspect that he and I both have a sense of déjà vu about tonight's debate and I noticed that the Minister could not identify a Back Bencher who supported the Government's case. I thank Conservative Members for supporting our case and I am beginning to detect—especially in the hon. Members for Bromley and Chislehurst (Robert Neill) and for Croydon, Central (Mr. Pelling)—certain Liberal Democrat tendencies, which will do them no good in their careers.
The Minister claims that the model has been tried and tested, but that does not mean that it could not be improved. That is what new clause 8 seeks to do by providing more oversight, more scrutiny and more checks and balances. The Minister has not convinced me that we should do anything other than vote for new clause 8 tonight.