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Lord Dixon-Smith: I listened to the remarks of the noble Baroness in response to the amendment with some fascination. She seems to be following the view that all things are possible in the best of all possible worlds.

We are facing a situation in which there is already a problem. Unless one actually imposes some need for expedition on the system of amendment, if it is required as a result of a difference of opinion between the mayor and the Secretary of State over the police budget, then, despite what the noble Baroness said, there could be difficulties. I accept that it is perfectly true that there could be difficulties after 15 days if an agreement was not reached. That would apply whatever the time limit suggested on the face of the Bill might be. The point about the 15 days is that it would bring the decision right back so that it was well within the current financial year and well within the current funding arrangements of the police. The proposals on the face of the Bill begin to take the decision day further and further away from the original budgetary proposals. More significantly, it brings it closer and closer towards the end of the financial year when the problems could really begin to rise.

I have heard what the noble Baroness said--I shall study Hansard with care--but I do not think that her explanation has gone to the core of the problem. We shall come back to the issue at a later stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Whitty moved Amendment No. 224A:

Page 47, line 44, leave out ("to 75 above") and insert (", 71 and 73 to 75 above and Schedule 6 to this Act").

On Question, amendment agreed to.

Clause 81, as amended, agreed to.

Clause 82 [Emergencies and disasters]:

Lord Whitty moved Amendment No. 224B:

Page 48, line 23, leave out from ("year") to end of line 26.

The noble Lord said: In moving Amendment No. 224B I shall speak also to Amendment No. 224C. These are minor amendments. The first amendment deletes Clause 82(2)(c), which is not necessary and is a relic from an earlier draft of the clause. Amendment No. 224C corrects a minor error in Schedule 6. It replaces a reference to the existing capping legislation with a reference to the relevant provision in the new reserved powers under the Local Government Bill. I beg to move.

On Question, amendment agreed to.

Clause 82, as amended, agreed to.

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Schedule 6 [Procedure for making of substitute calculations by the Authority]:

Lord Whitty moved Amendment No. 224C:

Page 201, line 39, leave out from ("section") to end of line 40 and insert (" 81 of this Act or section 52K or 52V of the Local Government Finance Act 1992.").

The noble Lord said: I beg to move Amendment No. 224C formally.

On Question, amendment agreed to.

[Amendment No. 224D not moved.]

Lord Whitty moved Amendment No. 224E:

Page 202, line 18, at end insert--


.--(1) This paragraph applies where any substitute calculations are made in accordance with this Schedule.
(2) Where this paragraph applies, the Mayor shall as soon as practicable publish a document containing the substitute calculations.
(3) In this paragraph "relevant document" means any document required to be published under sub-paragraph (2) above.
(4) A copy of each relevant document shall be kept available for the appropriate period by the Mayor for inspection by any person on request free of charge at the principal offices of the Authority at reasonable hours.
(5) A copy of any relevant document, or any part of a relevant document, shall be supplied to any person on request during the appropriate period for such reasonable fee as the Mayor may determine.
(6) In this paragraph "the appropriate period" in the case of any document is the period of six years beginning with the date of publication of the document pursuant to this paragraph.").

The noble Lord said: I beg to move Amendment No. 224E formally.

On Question, amendment agreed to.

Schedule 6, as amended, agreed to.

Clause 83 agreed to.

Clause 84 agreed to.

Baroness Hamwee moved Amendment No. 224F:

Before Clause 85, insert the following new clause--


.--(1) The Greater London Authority shall by virtue of this section have the power to borrow money.
(2) The Secretary of State shall not intervene in decisions taken under subsection (1) above.
(3) The Secretary of State shall issue guidance on prudent levels of borrowings for the Authority.
(4) The guidance may include an indicative limit on borrowings which shall take account of--
(a) the need for prudent on-going debt management;
(b) specific capital projects proposed by the Authority; and
(c) the total stock of the debt of the Authority.
(5) The guidance issued by the Secretary of State shall be published after discussions with the Mayor, the Chartered Institute of Public Finance Accountants and the Authority's auditor.
(6) If the budget proposed by the Mayor, and agreed by the Assembly, requires higher borrowings than the indicative limit in the Secretary of State's guidance, an Assembly vote shall take place with a two thirds majority of members voting required for the higher level of debt to be approved.").

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The noble Baroness said: I beg to move Amendment No. 224F and at the same time I shall speak also to Amendment No. 225D, standing in the name of the noble Lord, Lord Sheppard of Didgemere, to which have also put my name. These amendments deal with borrowing powers on the part of the authority. The Bill allows borrowing only with very considerable constraints, using the system of basic and supplementary credit approvals. These are very closely linked with the budgets of individual functional bodies.

I do not believe there can be any dispute that some of the functions of the GLA will be very capital intensive. For this reason, we think it is important to ensure that the GLA has adequate powers to invest. We prefer an approach which looks at the authority's overall budget, including, and because of, the revenue effects on the taxpayers. We believe that the GLA should have a general power to borrow.

We are prepared to accept that the Secretary of State should have a role, though not the only role, in this, and our proposed clause provides that the GLA shall have the power to borrow without the intervention in decisions by the Secretary of State. However, the Secretary of State might issue guidance as to the levels of borrowing, including an indicative limit on borrowing to take account of the various matters set out in the draft clause.

We provide for publication of the guidance after discussions with the mayor and with other bodies, and we also suggest that, if the budget proposed by the mayor requires a higher borrowing than the indicative limit to which I have referred, then an assembly vote on the basis of a two-thirds majority will be required for the higher level of debt to be approved. This is all part of the GLA being able to determine its own strategic priorities. It is a matter of general principle for us that, as we have said several times in the course of this Bill, authorities should be able to take their own decisions about financial matters. That would include managing their budgets in both revenue and capital aspects.

If the GLA is to succeed with its important and onerous duties, many of which will require investment, then it should be able to take the decisions which are so closely related with carrying out its functions--that is, how to carry them out and how to ensure that the funding for the investment is there. That is why we have proposed this widely-worded amendment.

Amendment No. 225D, to which I have already referred, is, I admit from these Benches, a fall-back position. But it is one to which I am very happy to speak to tonight. I know that the noble Lord, Lord Sheppard, is sad not to be here this evening but he is abroad. This amendment has come from the "stable" of London First, representing London's businesses. I believe it is very telling that it is London's employers who are so very vocally concerned with investment in public transport. The clause provides that the GLA can issue a loan instrument secured only on the revenue stream from new charges and levies: that is, from prospective revenue.

We believe that this amendment is something of a test of the Government's credibility in what they say about hypothecation in the context of this Bill. It is vital that

28 Jun 1999 : Column 102

Londoners see the spending effects of their payments and see what they will be paying by way of congestion and parking charges, assuming that the provisions proposed are implemented. They will also see how their money can be put to good use for investment in public transport without a long wait.

The ability to invest future income streams would, to our mind, be helpful--indeed probably vital--to ensure the success of what are undoubtedly going to be difficult policies to bring into effect. However, if the public are to be taken along with proposed new policies which will be the subject of very considerable debate and are likely in some quarters to meet considerable resistance, then the carrot of better public transport must be there at least at the same time as the stick of the charges.

Many of the most immediate improvements which the GLA will wish to put into effect through its functional bodies are likely to involve relatively small-scale expenditure--expenditure which may be able to be financed directly from revenues such as bus priority measures, measures for cyclists and so on. We will come to the details of these schemes later but, as the Committee will be aware, there is a need for capacity improvements on the London Underground. These, as we have already discussed, are likely to be beyond the scope of public/private partnership agreements. That is quite apart from how one deals with the need for investment before PPP bites: contributions to investment in better commuter rail services, improved interchanges, more radical bus and intermediate transport schemes, and so on.

This amendment anticipates future revenues, not with a profligate approach but with a sensible one. Without the ability to borrow outside the Treasury controlled total, either the investment will not be additional investment--and the views of the public on additionality will be very important to the success of this scheme--or the revenue will be able to be spent only on a pay-as-you-go basis, and that will very considerably limit what can be achieved. Having spoken enthusiastically about Amendment No. 225D, I commend Amendment No. 224F to the Committee.

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