Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.Donate to our crowdfunder
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.