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Mr. Simon Hughes: Does the right hon. Gentleman accept that there is a fifth question to be asked: "Do you want the authority to be fairly elected?"

Mr. Gummer: I know about the word "fairly" as used by the hon. Gentleman, but I shall not be tempted too far.

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One of the most unfair systems of election that I know is proportional representation in Germany, where the smallest political party elected is permanently in government, however the majority is made up. I know that the Liberals are longing for proportional representation here, as they would then be represented in every Government instead of only in the present Government, whom they manifestly support most of the time.

Having presented the solution and then turned to the problem, the Under-Secretary has not only failed to connect the two, but has presented a solution that will make the problem worse--a fundamentally damaging action. He is pretending that the governance of London can be divorced from the dominance of London, but it cannot. London is so dominant a force within England and Britain that it reaches way beyond any possible boundaries for its local governance.

Therefore, whatever the new assembly decides and whatever the new mayor decides--even if, surprisingly, they both decide the same--if, for national reasons, the decision cannot be implemented, the Government will adopt the same characteristically tough, direct and undemocratic attitude towards those two bodies as they have towards the House of Commons. If the Government do not allow the House to debate referendum Bills properly, they will certainly not listen to any assembly or mayor on issues where they think that the assembly and the mayor have made decisions that are contrary to their view of the interests of the United Kingdom.

We must not kid ourselves--there are now to be three groups of people governing London. There will be the assembly and the mayor and the Government and the boroughs and--if the Liberals have their way--there will be lots of parish councils as well. London, from being the most successful, least over-governed capital in the world, will become a less successful, more over-governed capital.

Of course, all that will help with unemployment. I have no doubt that a lot of people will be employed to run the assembly and the mayor. The new bodies will probably be put in the middle of Hackney, in the hope that that will deal with unemployment there. There is nothing in the propositions before us that will reduce unemployment in London by one person other than those who are taken on by the assembly. The Minister has made no case for an overall strategic authority doing anything about unemployment.

When he was asked by the hon. Member for Islington, North (Mr. Corbyn) about regional development, what did we hear? We heard the most remarkably imprecise, obscure and peculiar answer, which was designed not to upset the hon. Gentleman. We did not gather whether anything would happen before 2000--it would happen in parallel. Does that mean that there is to be another authority, another organisation, another part in the organogram? Is that what the Government are suggesting? Or is the new agency to be part of what is being set up? We need to know. Perhaps the hon. Gentleman understood the Minister's reply more clearly than I did.

Mr. Corbyn: Before he finishes, will the right hon. Gentleman explain why unemployment in London is so high after 18 years of Tory Governments, why the Tory Government opposed having a referendum on the future

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of London at the time of the GLC's abolition and, above all, why they did nothing to establish a serious economic development agency for London that could deal with chronic unemployment, which runs at 20 per cent. in my constituency? The point I put to the Minister was that I want the agency to be set up in advance of the establishment of a London authority, which would then take over its operation. The unemployed of London cannot wait much longer.

Mr. Gummer: That is a change of tune--the hon. Gentleman did not say that. My point is that there is no evidence whatsoever that such an agency will add to the number of people employed except by the number of people who are employed by it. I cannot understand how an agency dealing with the whole of London will do what is much more effectively done by the various partnerships that we already have, which deal with the reality in London. Unemployment in London is falling fast and, if the Government do not muck it up, it will go on falling fast. The truth is that it falls fast because of Government action and not because of some Londonwide agency.

The trouble with the Labour party is that, underneath all the flam, it is unreformed in the sense that it believes that Governments create jobs. Of course Labour Governments create jobs--they create jobs for the boys and girls who are employed by government. They do not create real jobs, and the problem with the proposal before us today is that it will increase the cost of London, decrease the attractiveness of London and drive people away rather than bring them in.

Coverage will be totally unsatisfactory because of the nature of London. The strategic authority will argue with the strategic mayor and both will argue with the Government. It is a recipe for confusion and distortion, and the truth is that the Minister does not even know now what he will propose in this respect, because he has not faced up to any of the real issues relating to the governance of our great capital city.

10.53 am

Mr. Ken Livingstone (Brent, East): The right hon. Member for Suffolk, Coastal (Mr. Gummer) did the House and the issue before us a great disservice by talking at such length with so little substance and a constant stream of points made simply to confuse.

There are points of weakness in the Government's proposals--it would be bizarre if, at this early stage, there were not--and we should concentrate on those. However, the only points of substance we heard from the shadow spokesperson were complaints about the Greater London council, which was set up by the Macmillan Government. Weaknesses were built into that council. If we go back and look at the Herbert commission report, we see that it was a good document, which said that the London authority should be a strategic one and should not overlap with the boroughs.

However, because the Macmillan Government did not want to create a powerful voice for London, they ended up creating a much smaller authority with a multitude of local powers and so set in train 30 years of duplication with the London boroughs. The right hon. Gentleman complains that the GLC never tackled the Thames. Of course we did not; we were not the authority for the Thames--there was a Thames water authority and a Port

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of London authority. It was the failure to give the GLC real strategic powers when it was set up in 1964 that caused so many problems later. We do not need to be blamed now for the legacy of the Macmillan Government. We want to make sure that we now create a proper strategic authority.

I know that there is to be a business statement at 11 o'clock, so I shall not talk for too long, as many hon. Members want to make their maiden speeches. I have therefore decided to shorten my speech by deleting all the points on which I would have complimented my hon. Friend the Minister and agreed with him. I shall instead focus on the points where giving him a little comradely advice on the weak spots may help.

There is no problem with the area to be covered--as one flies into London, one can see that it is a clearly defined urban area. There is only one point at which the boundary could be varied in any meaningful way and that is at the border between south-west London and Surrey, which was changed by the Macmillan Government so as to exclude large areas from the GLC's coverage. However, there is no point in having a long-drawn-out row with Surrey in an effort to take chunks of it, and unless there is overwhelming demand from the people of Surrey to become part of the new and wonderful authority that we are setting up, we should accept the area of the 32 London boroughs as the obvious area.

I also agree with the range of functions. The only addition that I would make at this stage would be the major arts functions of London--the South Bank Arts Board, and so on. Those could well be brought under the sway of the new authority so that there was democratic accountability in that area.

I know that the question of a mayor or council will be dominant, but the real issue is revenue-raising powers. The Treasury has always feared London having any financial independence whatsoever. That is why the GLC, alone of every local authority in Britain, had to get a separate Act of Parliament every year for its capital programme. There was a long-standing reluctance in the Treasury to allow the old GLC any independence, so we were bound hand and foot, our capital programme determined every year by central Government.

Usually, we were right and the central Government wrong. Tory and Labour GLCs in the early 1970s asked for permission to build the Jubilee line out to docklands. My own administration repeated that request in the early 1980s. The Treasury first persuaded Jim Callaghan's Labour Government to block it and then persuaded

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Mrs. Thatcher's Tory Government to block it. If we had been allowed to get ahead and build the Jubilee line extension, it would have been operating these past 10 years and we would have been in a much stronger position to create a more vibrant and economically dynamic community in the new docklands development.

I hope that, if we give Londoners the right to elect a mayor and council, the new authority will be answerable for its financial policies to the city and the people of London, not to the Treasury. That means that the new authority must have revenue-raising powers. At the very least, it must have effective control over existing precepts set by unelected bureaucrats on the quangos. There is no reason why the new authority should not have a degree of financial independence so that it can respond to the problems of London.

The key question is that of the mayor and the local authority. My first worry is that city mayors in America are the main focus of corruption in American public life. Organised crime, especially the mafia, has sought influence in mayoral chambers because a single individual has all the powers to award contracts and appoint to jobs. How reassured would the people of London have felt if, instead of being the leader of the GLC with 91 other members watching me like hawks, I had been running the show all on my own--awarding all those contracts and jobs on my own? No one would have been terribly happy with that.

The strength of a party system is that people watch those in office. I often felt that the Labour members on that authority were watching me harder than were the Tory members, but that was a strength. As an Americanism in this proposal, the idea that we can elect an individual who can save us--one person in which we vest all powers--is a move away from the idea of parties, which have ideologies and principles.

Strong arguments would be needed to persuade me that we should move away from the idea of an elected authority with a leader. We are told that if we have an elected mayor there will be more public attention, although I could hardly have got much more attention as leader of the GLC. Some people worry that people may not notice the new structure, but if one has the right policies and pursues them, they will command attention, with all the publicity necessary.

There is a problem concerning conflict between an elected authority and a mayor. In America, the system works by back scratching.

It being Eleven o'clock, Madam Speaker interrupted the proceedings, pursuant to Standing Order No. 11 (Friday sittings).

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