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Mr. Simon Hughes: I beg to move, That the clause be read a Second time.

New clause 7 would exclude the Greater London Authority from rate capping and council tax capping. It would give the GLA the freedom to which local government aspires. The Government have moved some way towards that freedom, but they have not yet given it to local government.

In Committee and on Second Reading, we debated what sort of beast the GLA will be. We had always understood--and it was the Government's position before the election--that London would have regional government. That has shifted over the past two years to citywide government and local government. Ministers have described the GLA in various ways, but it is a creature all to itself. We are not against that, except that we feel that it should be a regional government creature, not a local government creature. However it is defined, it is clearly not the local authority delivering first-tier servicesin London, because there are 33 of those--32 boroughs and the City of London--and they will remain.

If the GLA is to match the aspirations of the people of London, if we want the mayor and the assembly not to disappoint people and if we want the hype that will surround the GLA's election next year to be justified, we must give it as much financial freedom as possible. There were only ever two options for doing that. The first was to allow a variation in the tax that could be collected in London. That power has been given to the Scottish Parliament, although the Labour party has promised that it would not use that power initially. The Welsh Assembly has not been given that power. We argued that London's government should be given tax-varying powers--up or down--but the Government regard that as too great a concession and too great a degree of devolution. No doubt they did not want to lose control of that issue.

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The second option is contained in new clause 7. It is a more modest proposal and it would at least allow the GLA to decide how much money it sought from Londoners without having to ask the Government's permission. One of the themes of debates on the Bill has been how much the Secretary of State will have control over everything that the GLA will do. We wrung a concession out of the Government in Committee which will mean that traffic wardens' uniforms will not be subject to the agreement of the Secretary of State. That was a great concession that London could be trusted to decide such matters on its own.

Sadly, when it comes to the big decisions, the Government wish to retain hold of the apron strings. We hope that the Government will take this opportunity to give Londoners more of the powers they want for their new authority next year. The Government should be generous and allow London to decide on London's finances.

Mr. Ottaway: We do not support new clause 7, although not for the reasons that the Minister might expect. The Conservatives believe that it is a desirable long-term objective to get rid of rate capping.

Mr. Hughes: But not yet.

Mr. Ottaway: We happen not to be in office at the moment, so we could not get rid of it.

Mr. John Smith (Vale of Glamorgan): Not for a long time.

Mr. Ottaway: The hon. Gentleman should not count his chickens.

It is difficult to get rid of rate capping in isolation. It has to be done in conjunction with other reforms to ensure that local government expenditure does not run out of control. There were many good reasons for introducing rate capping. Lord Callaghan said in the 1970s that the party was over for local government spending, and the rate-capping regime followed.

Although the proposal in new clause 7 is desirable, we will be unable to support the Liberal Democrats on it. One cannot take one authority in isolation and exempt it. If rate capping is to be abolished, it has to be for all local authorities, equally and fairly. We share the Liberal Democrats, sentiments about rate capping. Indeed, I suspect getting rid of rate capping is a common objective. However, it is many years since we had a Liberal Government and the harsh realities of office are such that it is a bigger job than they think. We agree with the principle, but we are unable to support the new clause.

Mr. Raynsford: We have had a revealing debate. We heard further evidence of the Tory party U-turn process, in which it is dissociating itself from what it stood for in government, and we had another example of the Liberal Democrat nirvana in which everything is possible if we would only give as much power as possible to devolved assemblies and let them do what they want with no regard to anything else that is happening. We reject both approaches.

We made it clear in the White Paper that the GLA would be subject to the same arrangements for limiting

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council tax increases as local authorities generally. The GLA is sui generis a citywide authority, but it will operate within the local government ambit and its revenues will come from traditional local government sources--precepts, non-domestic rates and Government grant. Therefore, it should be subject to exactly the same disciplines as other local government authorities, for the reasons that the hon. Member for Croydon, South (Mr. Ottaway) rightly stressed.

Replacing crude and universal capping with reserve powers for limiting council tax and precepts fulfils a manifesto commitment given by the Government. The reserve powers will be far more flexible than the system put in place by the previous Administration. The Government have a duty to protect local tax payers and must have those reserve powers, but we have made it clear that we hope that we will not have to use them--for the GLA or for any local authority.

New clause 7 is not only unacceptable; it is irresponsible and I urge the hon. Gentleman to withdraw it.

Mr. Simon Hughes: I shall remind Ministers of that when they get rid of the Prescott version of capping, as they say they intend to do. We will continue to press for the walls of central Government to crumble before devolution until we have succeeded. It seems that the Government will not give in tonight, but we will return to the issue. Reluctantly, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

8 pm

Clause 125

Direction by the Secretary of State

Amendments made: No. 123, in page 67, line 14, leave out 'transport policy' and insert 'policies relating to transport'.
No. 124, in page 67, line 21, leave out subsection (3).--[Ms Glenda Jackson.]

Schedule 8

Transport for London

Ms Glenda Jackson: I beg to move amendment No. 139, in page 188, line 36, leave out paragraph (c) and insert--

'(c) a Member of the House of Lords,'.

Schedule 8 disqualifies politicians, including peers, from membership of the Transport for London board. However, as the House of Lords Bill will disqualify hereditary peers from the House of Lords, they will no longer be politicians and should therefore not be excluded from membership of the TfL Board. This amendment would exclude Members of the House of Lords from the TfL board, rather than peers in general. I commend it to the House.

Amendment agreed to.

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Clause 165


Mr. Brake: I beg to move amendment No. 34, in page 85, line 36, at end insert--

'(6A) The Franchising Director shall consult the Mayor before proposing any changes to rail services which will affect the level of provision of rail services in Greater London.'.

The amendment would give the mayor greater powers--or at least a greater say--over rail services in London. I hope that all hon. Members agree that London needs an integrated transport strategy. Such a policy should include the tube, buses and trains. Regrettably, rail at present is missing from the integrated transport strategy.

The mayor will have control over buses. He or she eventually will have a degree of influence over the tube. If the Government's public-private partnership proposals collapse, the mayor may have much greater control over the tube system. However, the rail system remains outside the mayor's grasp.

That is very bad news for commuters. Today's briefing from the Save Our Railways campaign identifies 91 London centres that will miss out because the mayor does not have control over rail. I believe that the list should contain 94 such centres, the three missing fromthe original list being Beddington, Wallington and Hackbridge. All such centres will miss out because rail services will not be integrated fully into the mayor's powers or responsibilities. The amendment would enable the mayor to have a complete strategy for controlling all aspects of transport in London, and not leave out the rail service, which is a major people-mover.

Ms Glenda Jackson: I trust that I will be able to reassure the hon. Gentleman about the mayor's powers in connection with surface rail and about the underground. I assure him that there is no danger of the public-private partnership collapsing, and the mayoral power will be complete when the underground transfers into Transport for London, after the successful completion of the public-private partnership.

Amendment No. 34 would place a duty on the franchising director to consult the mayor before proposing any changes to rail services which will affect the level of provision of rail services in Greater London.

Again, however, there is no need for this amendment. I hope that the hon. Member for Carshalton and Wallington (Mr. Brake) will find that consoling. As I made clear in Standing Committee, we intend to bring forward an amendment at a later stage that will place a duty on the franchising director to consult the mayor on the level of provision of services within London. Our intention is that the duty on the franchising director will be similar to that currently imposed on him in respect of London Transport by section 31A of the London Regional Transport Act 1984. This duty will be in addition to the duty of co-operation placed on the franchising director and Transport for London by clause 137.

I should also like to say a few words about how we intend that the Bill should deal with the mayor's powers in respect of the national rail network. There was substantial debate in Standing Committee of our proposals in this area. Some hon. Members expressed concern--and we

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have heard it again today--that the mayor's rail powers needed to be further strengthened. In the event, the Committee endorsed the principle behind the relevant clauses and decided that they did not require amendment at that stage. However, I indicated to the Committee that the Government would consider bringing forward some amendments at a later stage in particular areas.

I am now in a position to indicate to the House the nature of the amendments that we envisage. Although it has not been possible to prepare those amendments for consideration on Report, we intend to table the amendments for consideration in the other place.

The aim of this package of amendments will be to fine-tune the balance between the real powers that the mayor will have, and the wider national objectives of the franchising director and his successor, the Strategic Rail Authority. The principle to which we are adhering is that, although the mayor should have a significant degree of influence over London's railways, that influence should complement and not detract from the need for the Strategic Rail Authority to take an overall strategic view and to address the key issues facing Britain's railways.

I should make it clear that this Bill, of necessity, refers to the franchising director rather than the StrategicRail Authority. Subject to parliamentary approval, the functions given to the franchising director by the Bill will eventually be inherited by the Strategic Rail Authority.

I shall turn to the specific amendments that we propose. First, we intend to bring forward an amendment at a later stage that will provide for the mayor to issue instructions as well as guidance to the franchising director, subject to the provisions of subsection (5) of clause 165. That was an issue to which the hon. Member for Southwark, North and Bermondsey (Mr. Hughes), who unfortunately is not in his place, drew attention during the Standing Committee's consideration of the clauses on railways, although his suggestion was that the mayor should be able to issue directions to the franchising director, rather than simply guidance.

The amendment that we propose is designed to bring the mayor's powers more closely into line with those of the Secretary of State who, by virtue of section 5 of the Railways Act 1993, is able to issue both instructions and guidance to the franchising director. The 1993 Act does not empower the Secretary of State to issue directions to the franchising director, and so I hope that the hon. Members for Southwark, North and Bermondsey andfor Carshalton and Wallington will accept that our formulation is more appropriate.

Secondly, we intend to bring forward an amendment at a later stage to make it clear that the franchising director is to implement the mayor's instructions and guidance

This would replace the Bill's current wording, which simply requires the franchising director to implement the mayor's guidance. This would be a technical amendment, again designed to harmonise the Bill's wording with that in section 5(1) of the Railways Act 1993, imposing a duty on the franchising director similar to that which he is currently under in respect of instructions and guidance issued to him by the Secretary of State.

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Thirdly, we shall table an amendment to the effect that the mayor's instructions and guidance to the franchising director shall include instructions in respect of additional railway services to be procured by the franchising director on behalf of the authority. That is so that the franchising director can ensure that the best use is made of scarce track capacity on the London rail network, and can advise the mayor on the best way of meeting his or her requirements for additional services.

Fourthly, we shall table an amendment to clarify the position where there is a conflict between the instructions and guidance issued by the mayor and those issued by the Secretary of State. The amendment will make it clear that, while it is for the Secretary of State to set the overall strategic policy for the railways in Britain, it will be open to the mayor to issue instructions and guidance on operational matters which impact directly on users of rail services in London.

We shall also table an amendment to deal with the procurement of additional rail services and facilities by London local authorities other than the Greater London Authority. We intend to table an amendment in the Lords to give the mayor the power to promote new network improvements and to comment on or oppose proposals advanced by others. That will be done by giving the mayor the ability to promote and oppose local Bills in Parliament and orders under the Transport and Works Act 1992.

We believe that that package of amendments will more fully define the relationship between the mayor and the franchising director and give each of them a clear framework of co-operation within which to work. As we made clear in the London White Paper, the franchising director and the Strategic Rail Authority will retain the final say over rail, but the mayor will have a crucial role to play in improving London's rail services and will have the powers needed to make a difference. In that light, I trust that the hon. Member for Carshalton and Wallington will withdraw the amendment.

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