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Lord Whitty: My Lords, I understand what the noble Lord is driving at. It stems from the concern on the one hand to ensure that the police receive adequate resources. We all share that objective. On the other hand there is the concern that the budget-making process is not too disruptive--another objective that we all share.

However, it is our view that the prime responsibility for setting the budget and judging priorities within it must rest with the mayor, subject to the procedure with the assembly to which we referred. To disturb that requirement by saying that the Secretary of State shall have the right to set a significant part of the budget in advance would undoubtedly take a major part of the responsibility away from the mayor. If the mayor has any sense--a feature of all potential candidates for the office now and in the future, I hope--he will ensure that he has reasonable discussions with the Home Secretary to ascertain his views about the matter, as well as with the police authority. Therefore, those considerations will have been built in.

It may be that they will not agree on the last detail, whereas, if the Home Secretary had the power to set the budget right at the beginning, it would be the Home Secretary's budget and not the mayor's.

There is the final fallback that, if the mayor is way out in his provision, the Home Secretary has the power of direction. However, it would be a major difference in the total resources for the police force, in which circumstances the Home Secretary might be tempted to use that power. It is much better to place the

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responsibility, in every sense of the word, on the mayor to set the budget in the first place, understanding that he will have had discussions with the Home Secretary. Then we should leave the direction by the Home Secretary to extreme circumstances which none of us envisage arising.

Lord Dixon-Smith: My Lords, I hear what the Minister says. I find his logic deeply flawed. On the one hand he says that it would be unreasonable for the Secretary of State to set a large proportion of the mayor's budget. On the other hand, the Bill says that the Secretary of State can do that. That is the reality. It may be in circumstances that we all hope will not arise. Unfortunately in legislation one has to contemplate circumstances which may arise only rarely.

The fact of the matter is that as the Bill is drafted the relevant Secretary of State has the power to determine a particular sector of the mayor's budget. Therefore, it is deeply flawed logic to say that it is inappropriate for the Secretary of State to have power to determine this matter. The Bill provides that power. I do not believe that it is right. However, it is too late to take this matter any further tonight. I shall carefully study the noble Lord's answer in Hansard. However, from what I have heard I believe that his logic is flawed and I am not satisfied. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 310 not moved.]

Clause 82 [Provisions supplemental to Section 81]:

Lord Dixon-Smith moved Amendment No. 311:

Page 49, line 16, leave out (“35") and insert (“15").

The noble Lord said: My Lords, if we had sorted out the previous amendment perhaps Amendment No. 311 would have been unnecessary. However, we believe that 35 days is too long a period in which to have uncertainty in this field. We suggest that a better figure is 15. We are all familiar with the sensation of wrapping cold towels around our heads and working extraordinary hours to try to get this Bill off the ground so that London can have its mayor and authority. I see no reason why the mayor should not have to do that for a day or two if he has a little problem over the budget, because the relevant Secretary of State has the power to determine it and he will have to comply. I beg to move.

Lord Whitty: My Lords, we believe that to reduce the figure to 15 is seriously unreasonable. In local government legislation the normal provision for making an adjustment following such an intervention is 21 days. The complexity of the GLA budget and that for the functional authorities where there may be knock-on effects makes it necessary to have a relatively lengthy period. Therefore, I do not believe 35 days to be unreasonable in the circumstances, and certainly 15 would be seriously unreasonable. I hope that the noble Lord will not pursue the amendment.

Lord Dixon-Smith: My Lords, I hear what the Minister says. I remind him that we are establishing a

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new authority that is supposed to work in new ways. I do not see why it should not be made to work more quickly than existing authorities if required to do so. It would be setting a proper precedent that might persuade other authorities to work in similar ways, which could only be beneficial. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Lord Whitty moved Amendments Nos. 312 to 314:

Page 225, line 29, leave out (“a majority of the Assembly members voting") and insert (“the Assembly").
Page 225, line 41, leave out (“a majority of the Assembly members voting") and insert (“the Assembly").
Page 226, line 39, leave out (“a majority of the Assembly members voting") and insert (“the Assembly").

On Question, amendments agreed to.

[Amendment No. 315 not moved.]

Clause 86 [General GLA grant]:

Lord Dixon-Smith moved Amendment No. 316:

Page 51, line 3, at end insert (“and the cost assumptions on which the amount of the grant has been determined, and these shall be published in such manner as the Secretary of State deems appropriate").

The noble Lord said: My Lords, once again we seek to improve the availability of information to the community at large and local government--in this case London--in particular, by requiring the Secretary of State at the time he announces his determination of grant to publish the cost assumptions on which those sums are calculated. It is a small and simple matter. I beg to move Amendment No. 316.

Lord Whitty: My Lords, we see no need for this amendment. The mayor may feel it necessary to publish some of the background consultations that take place before the figures are set, but as far as concern the Secretary of State's responsibilities this amendment will not add anything to the public domain which is not otherwise there under other provisions and practice. Therefore, I do not wish to add this to the Bill.

11.15 p.m.

Lord Dixon-Smith: My Lords, we are into the wishes of the Minister rather than what is in the best interests of the people of London. I note the distinction. Having got that admission, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sheppard of Didgemere moved Amendment No. 317:

After Clause 97, insert the following new clause--
(“. After section 43(8) of the Local Government and Housing Act 1989 there shall be inserted--
“(9) Notwithstanding anything in this section, or in any other enactment, the Greater London Authority may issue a loan instrument secured only on the revenue from new charges or levies raised under section 254 or section 255 of the Greater London Authority Act 1999."").

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The noble Lord said: My Lords, the purpose of the amendment is to enable the Greater London Authority to borrow against the anticipated revenue charges for road use or work-place parking.

I believe that there would be clear agreement between us that the economic success of London depends on keeping London moving; and getting it to move faster. The business community in London is prepared to support hypothecated road user charges both as a way of reducing congestion and to pay for much needed additional investment for London's transport system. It is opposed to a levy on work-place parking which will not do much to change travel behaviour and will simply be an extra tax.

The problem is the initial expenditure on setting up congestion charging. It will cost initially something like £50 million to get a new congestion charge system working. That would include such items as cameras. In addition, it is common ground among all of us that if we are to have road charging we must have improvements to public transport before such charges are introduced. At a minimum, therefore, we should upgrade bus services and bus priority measures. Those will cost about £100 million.

There needs to be substantial investment before public transport can be seen to be improving and people begin to accept politically congestion charging. This initial investment cannot be paid for within PPP or PFI. If the mayor is to introduce road charging in his first term of office, we have no time to lose. It will be extremely tight as it is, even if we found a mayor who spoke in favour of congestion charges.

If the Government's policy for transport is to work, they have to allow for that initial cost to be financed. The obvious way to do that is to allow borrowing against a prudent estimate of anticipated revenue--obviously not the full amount of anticipated revenue. The need to borrow for investment is not just short term. Road user charging has to be part of an overall strategy for improving transport in London. There is a need for a capacity enhancement in the Underground; and not all of that can be paid for through PPP. There is a need for improved commuter rail services, improved interchanges and more radical bus schemes.

The GLA should be able to borrow for such investments on the security of projected revenue from road user charges in addition to its investment within the Government's public expenditure programme, PPP, and so on. That borrowing would be secured solely on this revenue and there would be no recourse to the general funds of the authority.

There is no doubt that the lenders of the money from the private sector would impose quite strict controls, so we have no need to worry about profligate spending. The GLA will have normal local authority borrowing powers, but those are subject to the consent of the Secretary of State and Treasury. We know all too well that the Treasury control under various governments over the past several decades has starved transport in London of the investment it needs.

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The amendment would allow the mayor to make a real commitment to long-term investment programmes to support further London's regeneration development. I am sure that introducing road user charges--whatever the party of the mayor--will not be a good short-term vote winner. So if we are to achieve progress on transport in London--I and most of the business community think that congestion charging is fundamental to that; we are already paying for congestion--we have to find a way of helping the mayor to do so. Therefore finding a way for the mayor to borrow against those income streams, and therefore to do things up front, is essential.

Incidentally, both Ministers have given me verbal reassurances about the initial funding. The noble Lord, Lord Whitty, has even written to me on the subject. It would help me with the amendment--and perhaps help us all to go home a little earlier--if some of them were repeated to the House. In the meantime, it is essential to get London moving and to keep it moving. I beg to move.

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