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'(referred to in this section and section 7B as "the'.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 130 to 134.

Government new clause 35--Secretary of State's functions in relation to the strategy.

Mr. Raynsford: New clause 35 adds a new section to the Regional Development Agencies Act 1998. It allows the Secretary of State to give guidance to the mayor on matters to be covered and issues to be taken into account in the economic development strategy that will be developed on behalf of the mayor by the London development agency. The mayor will have to have regard to the guidance, but there will not be a power, as with

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other RDAs, to give guidance on the strategy to be adopted in relation to any matter. That reflects the unique status of the mayor, who will have oversight of the development agency in London.

There is also provision for the Secretary of State to issue a direction requiring the mayor to alter the strategy if it is inconsistent with national policies or likely to be detrimental to any area outside London. The measures mirror the planning provisions and those for other mayoral strategies.

Amendment No. 129 is necessary as a consequence of new clause 35 adding another section to the Regional Development Agencies Act 1998.

Sir Sydney Chapman: I do not want to be insistent, but, in Committee, we debated long and hard whether guidance or a direction should be given. While new clause 35 says:

"The Secretary of State may give guidance"

and

"The Mayor is to have regard to any guidance",

is not its gist that the Secretary of State may direct the mayor to do what he wants? While I understand the need for the mayor to have a strategy consistent with national policy, is this not the shadow rather than the substance of devolution to the mayor and people of London?

Mr. Raynsford: The hon. Gentleman is wrong. There must be an overarching national concern when several different regions pursue economic development strategies that may result in their coming into conflict with each other. In the national interest, the Secretary of State must take an overview. That is sensible. In London, we have rightly made the development agency answerable tothe mayor. There is therefore proper democratic accountability in the region. The mayor can give guidance to the LDA on how to conduct its business. The only safeguard is to ensure that, where there is a possible conflict with national policy, or where there is action that would be detrimental to another part of the country, the Secretary of State will have an intervention power. That is the right and proper balance.

9.45 pm

I accept entirely that some elements in the House--one usually thinks of those sitting on the Liberal Democrat Benches in that connection--would allow anarchy and would allow regions to pursue their own interest regardless of the interest of other regions. That would not be responsible or serious and we are not proposing it. However, we are giving a considerable amount of devolved power to the mayor and to the London development agency to develop a regional development strategy that is appropriate to London's needs, but focuses on the issues that will be really important in London--the promotion of tourism and the development of the financial services industries and of other service industries that will be of unique importance in the London area. The development agency, working with the mayor, will pursue those issues.

Amendments Nos. 130 to 134 are technical amendments to simplify and clarify the text of the Bill. I commend new clause 35 and amendments Nos. 129 to 134 to the House.

Mr. Ottaway: I suspect that new clause 35 is another measure that is being introduced in case the hon. Member

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for Brent, East (Mr. Livingstone) becomes mayor of London. When the Bill left Standing Committee after a great deal of debate, the original plan was that the Secretary of State would be able to correct inconsistencies. However, the new clause is a quite distinct firming up of the legislation. One wonders why it was not introduced in Standing Committee, because there is nothing novel or unique about it. Basically, the Secretary of State will now decide what the policy is; no other interpretation can be put on the measure. The Secretary of State can give guidance, and, if the mayor wanders off, he will receive a great deal more guidance until he comes back into line. In other words, the Government know best and, in truth, this is another example of the nanny state.

However, a far more serious aspect of the measure is the fact that the London development agency will have a fairly influential effect on the economy of London. In the judgment of Conservative Members, that should be a matter for the mayor. The Minister will be aware that we do not agree in principle with the Regional Development Agencies Act 1998; we believe that assistance should be focused on specific areas, rather than on regions. Nevertheless, we shall have to learn to live with the Act. The mayor can use the LDA as a vehicle for his economic policy--or he could until the new clause came along. Now, the Secretary of State will decide what the policy is. That is fine; it is probably what the Government intend. However, what is the point of having the authority in the first place, if this sort of rearguard action is going to take place in the latter stages of the introduction of the legislation?

I think that the measure is a sign that the Government are losing their nerve slightly over the whole issue. They started out by proclaiming loudly that the mayor would lead a brave new world, but now we find that it is not the mayor but the Secretary of State who will lead that brave new world.

Mr. Wilkinson: I endorse everything said by my hon. Friend the Member for Croydon, South (Mr. Ottaway). As he suggested, the measure is, in essence, a Brent, East mayoralty contingency clause, but it is equally a Conservative mayoralty contingency clause. It is likely that the requirement for the policies of the London development agency to be consistent with national policies would not be met if a Greater London Authority were led by a Conservative mayor--the aspiration of Conservative Members. A Conservative mayor would follow policies that were quite different from those of a socialist Government in Whitehall.

Mr. Gapes: Does the hon. Gentleman suggest that, for an indefinite time in the future, there will always be a Labour Government? Is the Conservative party now in so bad a state that he feels that there is no possibility that a Conservative Government will ever be elected again?

Mr. Wilkinson: As so often happens, the hon. Gentleman has got hold of the wrong end of the stick. I was hypothesising the strong likelihood that therewould be a Conservative mayoralty and saying that a Conservative-led Greater London Authority would pursue policies of stimulating enterprise and getting bureaucracy and interference off the back of commerce and industry in the capital, to such an extent that the capital would

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become an example of free enterprise in action. A socialist Administration would probably not be too delighted about that, especially as such a capital city would be a magnet for further private-sector investment of a sort that would demonstrate the great disparity between the performance of other regions of the country, which have inherent disadvantages compared with the capital, and what was being engendered in industry and commerce in London.

The Government are not, as has usually been the case in respect of this Bill, setting up the Secretary of State as a back-seat driver; instead, the Secretary of State would be more or less in the boardroom of the development agency for London. Not only is the Secretary of State to give routine guidance on strategy, but he will be able to pray in aid allegations of the development agency's strategy being "inconsistent with national policies" or

"having . . . a detrimental effect on any area outside Greater London".

Given that there is bound to be a distinction and diversity of performance, objectives and policy between the capital and elsewhere in the country, the Secretary of State is being given carte blanche to issue directions to the development agency.

In my judgment, the work of the development agency will not be primarily to encourage the financial services sector, which is located predominantly, albeit by no means exclusively, in the City of London and which has always had the full impetus of the City of London corporation behind it--indeed, that is one of the main raisons d'etre of the corporation. Nor will it be to encourage tourism, which also has its own bodies, such as the London tourist board, to attract tourists to the capital. Indeed, the complaint has always been that the influx of tourists to London is disproportionate, that other regions have been disadvantaged and that income from tourism has been distributed unequally between London and the provinces. Therefore, we can discount the two examples offered by the Minister.

It is much more likely that, under vigorous Conservative leadership, the development agency will work to restore manufacturing to full health in the capital. Because so many advantages have been given to other areas, through the Welsh Development Agency and its Scottish equivalent and all sorts of regional policies which have favoured manufacturing industry in the provinces, manufacturing industry in London has had a difficult time. In certain sectors, it has done well, but with imaginative policies from a development agency, London's manufacturing sector could do even better.

The new clause is a recipe for back-seat driving of the worst sort and it has little to commend it. It is an illustration of the fact that the Labour Government do not trust the GLA or the LDA to get on with the job, but believe that they should have the right to meddle and interfere ad infinitum.

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