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Lord Bassam of Brighton: My Lords, Amendment No. 76 seeks to provide an appeal route for decisions that have been made by a valuation tribunal in respect of council tax. This matter was expertly raised by the noble Earl, Lord Caithness. He kindly wrote to my noble friend Lord Rooker about it and we give notice that following today's considerations we will be replying in full to that correspondence.

There is a difference between council tax and non-domestic rates when it comes to appeals on decision by valuation tribunals. I appreciate that this lacks symmetry, but that was a conscious decision on the part of the previous administration at the time the council tax was introduced. We consider that the distinction is still valid.

It might aid our debate if I quote what the noble Lord, Lord Strathclyde, said on the matter on 27th January 1992, when the Bill, which became the Local Government Finance Act 1992 was then in Committee. While discussing the equivalent provisions for Scotland, he said that,

That was how the previous administration saw the position.

While Amendment No. 76 does not seek to provide for an appeal to the Lands Valuation Appeal Court, which is a Scottish court, similar principles apply. The Lands Tribunal in England, like the Land Valuation Appeal Court in Scotland, has specialist expertise in matters of land valuation.

The key point here is that council tax does not require the detailed specialist valuation expertise of the Lands Tribunal. Council tax valuations are to bands of valuations and are capital values, not rental values. There is a big difference. We agree that there needs to be a mechanism for appeals on points of law, but this is properly to the High Court, and we have that

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mechanism. We are not convinced that there need to be any other grounds for appeal of a valuation tribunal decision to another body.

Perhaps in taking on board those comments, the noble Baroness will feel happy to withdraw her amendment.

Baroness Hanham: My Lords, I thank the Minister for his reply. It dealt with the kernel of the problem but still leaves a question. The kernel of the problem is that the only appeal that a council tax payer who has a problem with the valuation tribunal decision can make is to the High Court on a matter of law. That seems to be eminently inequitable. A person will probably find it enormously difficult to find a position of law in relation to capital value. Therefore, I do not agree with the Minister that there is no need to find a better appeals system. However, for today's purposes, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hanham moved Amendment No. 76A:

    After Clause 84, insert the following new clause—

(1) Schedule 6 of the Greater London Authority Act 1999 (c. 29) (procedure for determining the authority's consolidated budget requirement) is amended as follows.
(2) In paragraph 8(4) (approval of mayor's final draft budget by the assembly), for the words "at least two-thirds" there is substituted "a majority""

The noble Baroness said: My Lords, this is different. We did not deal with this matter in Committee and I am sure that your Lordships will feel far more cheerful about considering some completely new material.

The purpose of the amendment is to correct a curious imbalance in the powers of the Mayor of London and the Greater London Assembly on the crucially important matter of the final approval of the budget for London. It is true that the mayor is elected, but so are the members of the Greater London Assembly. Their role as the elected representatives of the various parts of London is to scrutinise the work of the mayor and to hold him to account—not least on behalf of some of the many areas of London that the mayor rarely visits.

The assembly is a democratic body with a democratic mandate and a democratic responsibility. Yet Schedule 6 to the Greater London Authority Act allows the mayor, in effect, to bypass the Greater London Assembly and impose an unamended budget with the support of only one-third of the members of the GLA. Although the assembly can propose amendments at an earlier stage, Schedule 6 requires a two-thirds majority to amend the final budget.

I cannot conceive that the House of Commons would agree to a situation where a budget could be secured with the support of only 220 out of 659 Members of Parliament. Both the House and the

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country would regard that as ridiculous, yet, as I understand it, that is what happens with regard to the mayor's powers in the Greater London Assembly. With the support of a minority of assembly members—nine out of the 25—in only one party out of four represented, the mayor can impose a budget. That is an odd sort of democracy, especially in a system that is supposed to be partly proportional.

The problem associated with that is that the mayor has not used that freedom terribly wisely. He has taken many opportunities to increase spending, and the precept has become a major part of Londoners' lives. Spending has increased enormously since the Greater London Assembly was set up, and 17.6 per cent of each council tax bill in London now goes to the mayor. There is nothing that Londoners or the people they have elected to represent them, either in local boroughs or, more relevant to this amendment, in the GLA, can do about that so long as the mayor has the support of just nine assembly members.

I believe there is a strong case for removing this anomaly and for giving the assembly greater power to control the mayor and to force him to carry support from at least half the elected members. I beg to move.

Baroness Hamwee: My Lords, again, I declare my interests as a member of the Greater London Assembly and also as the current chair of the budget committee, which today is having to meet without me, although I am sure that it is scrutinising thoroughly what the mayor has been doing.

I am aware that the Conservative Party's candidate for the mayoral election next year announced that he would end the proportional voting system for members of the assembly. However, it seems to me that having that system in place provides a very good check and balance and a good mix, as it were, for the job that members of the assembly must do.

However—I may surprise the noble Baroness here—I agree that with regard to the budget it would be better to have the proportion that she proposes rather than the two-thirds/one-third mix, which is in place at present. The mayor's budget is the only matter on which the assembly has, in effect, a veto, and I believe that it would be preferable for the mayor to have to persuade rather more than one-third of the members of the assembly of the rightness of his proposals for each budget. Therefore, I support the noble Baroness on that issue.

However, I do not support the manner in which the noble Baroness presented the personalisation of the issue. Perhaps that is not really part of the argument; I do not know. She talked about the current mayor as though he will always be mayor. I ask the noble Baroness, Lady Hanham, not to encourage him—he will not be mayor for ever! However, as I said in debate on an earlier amendment, the solutions of the Conservatives, the Liberal Democrats and, indeed, the Labour Party are not the same. But on the issue of a 51 per cent vote, I support the amendment.

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Lord Bassam of Brighton: My Lords, perhaps I should first say a few words about the Greater London Assembly's budget-setting process so that we can better understand the amendment and put it in context.

Section 87 of, and Schedule 6, to the Greater London Authority Act establish the roles of the mayor and assembly in deciding budget requirements for the GLA and all its functional bodies. The GLA's budget must be finalised by the end of February each year. The first stage is for the mayor, having consulted the assembly and the functional bodies about their relevant component budgets, to draw up a draft consolidated budget. The mayor then consults the assembly about the draft budget before presenting it to the assembly at a public meeting on or before 1st February. The assembly may approve the draft, or amend it, by simple majority vote before returning it to the mayor.

The mayor then prepares a final draft budget and presents it to the assembly at a public meeting before the end of February. If the final draft does not include amendments that the assembly made to the first draft, the mayor must give reasons. The assembly will then either approve the final draft by simple majority, or amend it by a two-thirds majority. The budget, as amended, will then be the authority's budget for the coming year.

The separation of powers between mayor and assembly is central to the GLA's budget-setting process. The budget-setting procedures are intended to be sufficiently flexible to accommodate the assembly's need to play a part in the formulation of policy and the determination of the mayor's priorities. They also allow the assembly to influence the levels of expenditure on the different functions and, hence, to influence the level of the council tax precept. But, because the budget is the principal tool for delivering the mayor's strategies, it is important that the procedures do not provide the assembly with unreasonable powers to amend the progress of the budget.

It is clear that the amendment would fundamentally alter the balance of power between mayor and assembly envisaged in the GLA Act, making it much easier for the assembly to override the mayor's budget. In practice, the existing arrangements have allowed the assembly to exert effective influence by causing the mayor to reduce his initial budget proposals. In any case, the Government's view is that, only three years into the GLA's existence and before the first mayoral term is complete, it is much too early to consider making fundamental changes to the new governance arrangements in London. Moreover, I believe that it could be argued that it would be wrong to make piecemeal changes to the statutory arrangements without considering the bigger picture.

The balance of power between mayor and assembly was proposed after much careful research into the working of mayoral systems in other countries. In particular, because the mayor is elected as the executive by the people of London, it is right that he or she should be in the driving seat. However, the mayor should not have the ultimate power to determine the budget against a two-thirds majority. That is the balance under the Act, and we believe that it remains a sensible one.

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I appreciate that we are probably moving into a period of campaigning on these issues. I can see the value, particularly for noble Lords opposite, in bringing this amendment as part of their campaign for a change next year. However, we need to look longer term and think about the structures and how they work. My simple appeal today is to give this longer. Let us see how it works over time and learn from the experience of it. We should also benefit and reflect on the experience that this structure has brought, having learned from other mayoral systems in other countries.

We are happy with the current position. We appreciate that this causes difficulties for some. The balance of power has to be right—and it is right at the moment—to enable the mayor to drive through his strategies. It may change in future years. But, in electing the mayor, these strategies have been by and large endorsed by the people of London.

12.30 p.m.

Baroness Hanham: My Lords, I thank the Minister for his reply. I do not think that the Local Government Bill was brought forward at this stage as part of a campaign. But it is the only measure where one can raise the question of the tensions against the mayor's overweening control. It was certainly not as part of a campaign that this amendment was tabled. It was an opportune moment to re-examine what is in the Greater London Act and the powers associated with the mayor.

One of the difficulties has always been—I believe that the noble Baroness, Lady Hamwee, has to some extent agreed—that the Assembly's scrutiny position over the mayor is not as strong as perhaps other people would wish it was. One thing that has become apparent over the years since this new system was introduced is that there probably is not enough tension against the mayor by those who are providing a scrutiny role. It is very difficult for the London boroughs to affect what the mayor does. The mayor's budget is imposed on London boroughs. Therefore, it would seem to be far more sensible to have more tension against the mayor's budget proposals which are, after all, probably the only proposals over which anyone can hold him to account.

I want to reiterate my point that this was not a campaigning point. It has nothing to do with that; the Bill was a vehicle to move the amendment. If the Local Government Bill had not been here, there would be no question of this amendment or this matter being raised. But it has been for the purposes today. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 86 [Vacant dwellings: use of information obtained for council tax purposes]:

[Amendments Nos. 77 and 78 not moved.]

Clause 88 [Housing strategies and statements]:

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