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[Amendments Nos. 13 to 17 not moved.]

Baroness Morgan of Drefelin moved Amendment No. 18:

On Question, amendment agreed to.

[Amendment No. 19 not moved.]

Baroness Morgan of Drefelin moved Amendment No. 20:

On Question, amendment agreed to.

Lord Tope moved Amendment No. 21:

The noble Lord said: My Lords, here we come to the always interesting subject of the Mayor’s budget. The amendment would omit from the original GLA Act a provision that requires any amendment to the Mayor’s budget to be passed by a two-thirds majority. In effect, that means that the Mayor’s budget may be approved by one-third of Assembly Members. One of the few powers that most people believe the Assembly to have is power over the Mayor’s budget. In fact, that power is very limited, even if it were to be implemented, but it has proved thus far incapable of implementation. Each year in recent years, the Mayor’s budget has been passed by nine votes in favour and 16 votes against, with the Mayor sitting in the gallery shouting, “Carried”. That is little short of a farce.

Let me put some numbers on this. The Mayor’s budget is in the region of £10 billion a year. That sum is approved each year by no more than nine Assembly Members. Were this amendment to be agreed to, the Mayor’s budget would have to be approved, or

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amended, on a simple majority; that is, 13 Assembly Members, which is an addition—to state the obvious—of four Assembly Members. That is not a big change in itself but it would be a huge change in principle. It is hard to think of anywhere where a budget of £10 billion that covers policing, transport, the fire authority, development and the authority itself is simply approved on the say-so of nine members, with a majority always voting against.

I understand that the Government wish to see what they call a strong Mayor; I am sure that we will hear that when the Minister replies. Much of this hinges on a definition of exactly what is a strong Mayor. Is a strong person someone who can simply impose their will regardless of the interests or wishes of a greater number, or is strength defined by those who are able to command majority support? My view is that the latter is very much the case; strength comes not from what someone else once described as elective dictatorship but from winning, persuading and argument.

Probably an even more important change, were the Mayor required to obtain a simple majority for his budget, would be in the whole approach to the budget-making process. At the moment, the Mayor simply has to line up nine Assembly Members—currently the seven Labour Members and two Green Members, who simply submit their shopping list to the Mayor; no doubt they discuss it and agreement is reached. If the Mayor had to reach a simple majority, he would have to deal with the Assembly in the budget-making process and, equally important, the Assembly would have to deal with the Mayor and put forward positive proposals for what it did and did not want in the budget. Having just four more votes would make a huge and fundamental difference to the way in which the whole budget process works—and it is a large budget with huge effects on Londoners.

This is not just a simple amendment about numbers; it is not just a simple amendment about giving the Assembly some real power. It is a measure that, if exercised properly—I believe that it would be—would change the budget process from, frankly, a rather negative process and almost a farce into a much more positive relationship and even a co-operative arrangement between Mayor and Assembly. That must surely be in the interests of the majority of Londoners and would in itself produce in the end a better budget that better reflected the needs and aspirations of all Londoners rather than simply the wishes of one—albeit powerful and elected—person who is able to impose his or her will. For those reasons, the amendment is important. It would strengthen the checks and balances that we all believe are necessary to hold an elected Mayor to account and it would change the relationship in a much more positive way than has existed heretofore. I beg to move.

7 pm

Baroness Hanham: My Lords, I strongly support the amendment and am delighted that it has been brought back. We discussed it at some length in Committee but it needs to be considered on the Floor of the House and with as much openness as possible.

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To be fair, I think that the noble Lord, Lord Tope, has been mild in putting it forward. In reality, the Assembly’s scrutiny of and ability to affect the Mayor’s budget are a nonsense. The Assembly cannot stop anything that the Mayor wants to be done. It can make any observations that it likes but the Mayor does not have to pay the slightest attention to them; nor, indeed, is there any realistic mechanism whereby the Mayor can be suborned into paying attention to what the Assembly says.

The Government set great store by the word “scrutiny”, but scrutiny is a completely toothless tool. It involves only the power of persuasion. Persuasion may be possible if you are dealing with policies, strategies or something else that can be discussed, but in this case a budget is put before you; it represents the Mayor’s controls and supports his policies, but London pays for it and London is becoming very brassed off with the amount that it is having to pay. The Mayor’s budget has burgeoned since the GLA was formed. In fact, the call on the council tax payer has risen by well over 50 per cent, and I think that the figure would be well in excess of that if calculations were made based on the sums since the mayoralty was introduced.

It seems to us that some mechanism for legitimate control needs to be advanced. The noble Lord, Lord Tope, is right when he says that there has to be a change in the balance between the Mayor knowing clearly that he will have no trouble at all in getting his budget through and his having a bit of a tangle over it and not being at all sure whether it will be accepted on the basis of what the Assembly believes to be appropriate and right for London’s electorate. We also have to remember that the Assembly, as well as the Mayor, is elected and is there to support the London electorate. We very much welcome the amendment and I strongly support it.

Lord Graham of Edmonton: My Lords, we are in a familiar situation. Despite the political ability of the opposition parties, they have been unable to find a way forward in relation to the two-thirds majority. They are saying that it has not been possible to achieve what is almost enshrined in many other democratic institutions and procedures—that is, a two-thirds majority to carry a proposition—and, consequently, they want to reduce it to a bare majority. Let us examine what that means.

Noble Lords opposite are arguing that the Mayor has the votes of all the Labour Members in his pocket and, whenever he wishes—using what the noble Lord, Lord Tope, referred to as the shopping list but what is also known as pork-barrel politics—he is able to command the nine votes that he requires. I do not think that one should imagine or predicate that for all time the Mayor will be able to rely on every vote in the Labour group. We have our experiences and the Opposition have theirs. Whatever tendencies the opposition parties may have, in this House, the other place and almost every other democratic forum there is a good history of dissent within the Labour Party. If the Opposition believe that the Labour Members will support the Mayor willy-nilly, regardless of whether he carries out

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his remit in a heinous, objectionable and appalling manner, they are mistaken.

When we look at the implications for other forms of local government, we have to take on board a number of other factors. Let us examine what the budget, in totality, normally means. I give way to the noble Lord, Lord Tope, and the noble Baroness, Lady Hamwee, on this, because they are very much involved in these matters and I respect their knowledge but, from the papers that I have been sent from various places, it seems that the bulk of the money raised is for the police and neighbourhood policing. I do not know whether people are objecting because too much is being spent in that way or whether they are objecting simply because the Mayor is using his powers to do what he is entitled to do and is getting the budget passed.

When one looks at the budget spent on police matters and compares it with the amount of money spent by other policing authorities, give or take the odd point on either side of 5 per cent, that is the level of the increase in the precept for the Metropolitan Police Authority and policing matters in London. I think that the Opposition are fighting to cut the Mayor down to size, as they believe that that is the only means by which they can get their own way. If they have powerful arguments, they should be able to convince at least the two Green Party Members; even if they convince only one of them, they will have their majority. Again, as they have done on previous amendments, the Opposition are saying, “If we can’t beat ’em, we should change the rules”.

Of course, the rules were made some years ago but that is a very short period in local government. We are talking about less than 10 years. I honestly believe that, if the system were changed, it would become dangerous in democratic terms. In London, we know that politics are very volatile: there are no certainties. We are not even certain who will oppose the Mayor at the next election, never mind what the result will be. As I said, if the Mayor’s policies are unacceptable to the people of London, the Opposition should rest assured that he will be rejected. If he is not rejected but elected, that will be an endorsement for the policies that he and the Assembly have carried through.

We are all involved in arithmetic in politics. It is the art of the possible, involving deals being stitched together to outwit the opposition. The Opposition are saying that the Mayor of London is proving to be more capable than them in getting his own way, but he gets his own way only if the policies that he puts forward are broadly acceptable to the people of London. If they are not, he will be rejected. I hope that he is elected.

Baroness Hamwee: My Lords, the noble Lord, Lord Graham of Edmonton, says that the Mayor will not always command the support of the Labour group. If, or when, a Mayor from another party is elected, I suppose that he will not command the support of the Labour group. This is not personalised; this is a point of principle. The amendment was not tabled as an objection to the way in which the current Mayor has dealt with the budget over the past seven years. That

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has been used as an example to explain what can happen, but this is not a matter of opposing a single individual.

The noble Lord said that the bulk of the budget has been for the police. He may not be aware that that has commanded huge support—invariable support, although my noble friend may correct me—from the Assembly. However, I suggest to him that there could be a situation in which a Mayor put forward a budget that did not propose enough spending on the police in the eyes of Members of the Assembly. Let us consider all the “what ifs”.

The noble Lord also says that a two-thirds majority is widely accepted as the majority needed for change. That is normally the case when one is changing the basic constitution of an organisation, but I do not believe that a budget is a constitutional point in that sense. Budgets in local authorities are not dealt with on the basis of a two-thirds majority. Budgets made by the Government of this country are not dealt with on the basis of a two-thirds majority.

However, I agree with the noble Lord that this is about enabling the Assembly to bring the Mayor down to size—any Mayor, not necessarily this Mayor. I gently stress that a helpful way of considering amendments that might be seen as personalised and attacking could be to look at them as if the object of the attack—a future Mayor—was someone whose politics were the most odious. When considering how the amendment should be dealt with, as parliamentarians wishing to ensure that there is control of a Mayor, let us consider who might be elected to that position. I support my noble friend.

Baroness Andrews: My Lords, in Committee we had a very interesting debate about a similar amendment in which it became obvious that some practices in relation to budgetary challenge need not be set in stone in the GLA. I want to return to those as a way of persuading noble Lords opposite that the amendment is unnecessary, because the Assembly has the power to have more purchase on the budget.

First, I will not go through the budget-setting process in detail. I shall reiterate key points of principle, as I resist this amendment strongly. I have to fulfil the expectation of the noble Lord, Lord Tope, and say that this amendment strikes at the strong Mayor model. Nothing is more important than the budget; I take the point that the noble Baroness, Lady Hanham, made on that. That is what London sees in terms of the services delivered by the GLA. The model is based on the simple principle of a strong executive Mayor and an Assembly holding the Mayor to account through effective scrutiny. It has been a successful model, as the noble Baroness, Lady Hamwee, and my noble friend Lord Graham of Edmonton said, for policing and for transport. Policing certainly has commanded great support.

The budget-setting process plays a pivotal role in this model, ensuring the right balance of powers between the Mayor and the Assembly. It provides the Assembly with the power to amend the Mayor’s final draft budget, when approving it, if it can secure a two-thirds majority in favour of change. The

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Assembly cannot reject the budget, but it provides important checks and balances. There has to be a broad cross-section of Assembly Members providing a clear consensus in favour of amending the Mayor’s final draft budget.

The noble Lord, Lord Tope, did not mention the fact that there is a previous stage, in which the Assembly can exert its influence powerfully. First, the Mayor must present the Assembly with a draft budget, which it may amend by a simple majority. I suggest that the Assembly can exert a great deal of influence at that stage. Then there is a final draft budget, which it can amend by a two-thirds majority. At that first stage, a simple majority is very important. The GLA’s website appears to show that reining in the Mayor’s budget has saved Londoners more than £125 million. I would say that that is fairly powerful.

7.15 pm

The very fact that the Assembly can amend the Mayor’s budget in that way means that any Mayor will be mindful of proposing a budget that he knows will not find favour. No Mayor would want the Assembly to amend significantly a budget that he proposed. That would be seen as a political defeat. In practice, the Mayor will compromise with individual Assembly Members or parties.

Surely it is right that the Mayor, as the executive, sets the budget that delivers his priorities for London, unless a consensus of Assembly Members opposes it. If that were changed, as suggested by the amendment, so that the final draft budget could be amended by a simple majority, it would fundamentally weaken the Mayor’s powers to set the budget. The Assembly would routinely assume the executive function and there would be a real confusion of functions; there would be an increasing separation and a real disconnect between the budget and the Mayor’s priorities, which Londoners elect him to deliver.

I can draw on some allies for this. My noble friend Lord Graham may be surprised to find himself in the company of the noble Lord, Lord Heseltine, who sadly is not in his place. The noble Lord, Lord Heseltine, recommends in his Cities Taskforce report that city mayors should be subject to “loose scrutiny” by an assembly, which would require a two-thirds majority to block executive actions. What a strong endorsement of the Government’s position. I hope that the noble Baroness opposite will feel able to accept those recommendations—better to do so 10 years late than not at all. I note that the leader of the Opposition has been conspicuously silent on this.

I turn now to my second point. In Grand Committee, I laid down a challenge for the political parties in the Assembly to work together to maximise the Assembly’s contribution to, and influence over, the preparation of the budget—I was going to say that this is not a romantic assumption. I challenged them to work smarter in order to secure a two-thirds majority—I find the argument that they cannot muster a two-thirds majority pretty defeatist, although I know that there are certain realities—to have the courage of their convictions and

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to forge coalitions of common interest in order to amend the budget. Surely that is better than trying to fix the process and simply legislating to provide an easier route for the Assembly. As I said to the noble Lord, Lord Tope, the right approach is to win hearts and minds and to persuade, not to make the process easier. That challenge needs a fresh approach from the Assembly.

That approach towards the budget-setting process could succeed if two misconceptions were swept aside now—I am trying to help noble Lords opposite and the Assembly. First—this is a crucial point—the Assembly may, if it chooses, amend any one or more of the final draft component budgets: the budgets of the Mayor, of the Assembly and of the four functional bodies. In so doing, it amends the final draft GLA consolidated budget. That point is crucial. I know that, to date, the annual GLA budget-setting process has not worked in that way, but there is no reason why it should not. Instead, the Assembly has voted on broad packages of amendments to the consolidated budget as a whole, proposed by each of the main parties. In effect, the Assembly votes to accept or to reject an alternative budget to the Mayor’s budget rather than seeking to amend.

That is a perfectly valid approach, but it is self-evident that the Assembly could more readily secure the broad consensus needed to achieve a two-thirds majority by voting on specific amendments to one or more of the final draft component budgets. The Assembly could, for example, seek to amend the TfL final draft budget by a specific amount, and for a specific reason, rather than, in effect, voting on an entire alternative budget. I realise that giving advice to a body outside this Chamber is a slight departure from our normal exchanges at this stage of a Bill, but I am serious in my attempt to get this recommendation across.

The second misconception is that Assembly Members cannot vote in favour of specific amendments because, in doing so, they would also be voting to accept parts of the Mayor’s final draft budget with which they disagree. Let me be absolutely clear: the Assembly cannot reject the Mayor’s final draft budget. Schedule 6 to the GLA Act 1999 states that the Assembly must approve the Mayor’s final draft, with or without amendment, with any amendments needing a two-thirds majority. That is a clear statutory duty.

I have learnt a great deal about the GLA and its budget-setting process in Committee and now on Report. It is clear that the Assembly has the capability. It can secure the degree of influence that it wants if it approaches the way in which it votes differently. That should be the way forward—not by fundamental change to structures, not by the blurring of executive and scrutiny functions and not by fixing the system and creating another deadlock. That would be bad for London and bad for Londoners.

As I said in Grand Committee, a change of this kind would not be confined to London. The two-thirds rule also applies to mayor and cabinet and mayor and council managers in local authority executives up and down the country. The model words well. I beg noble Lords opposite to think hard

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about what I have said and about introducing such a fundamental change. I hope that the noble Lord will feel able to withdraw the amendment.

Lord Tope: My Lords, I am grateful to the Minister for her helpful advice on how the Assembly should approach the budget. I hope that she will forgive me if I suggest that she has not actually sat through the budget process at the Assembly—nor, I suspect, have any of the people advising her—whereas the movers of the amendment have had the good fortune to sit through seven Assembly mayoral budget processes. With the greatest respect, I suggest that there is a difference between theory and practice. Maybe the theory is well understood by the Minister and her advisers, but perhaps the practice is better understood by my noble colleague—who has chaired the Assembly and the budget committee, one or the other, continuously throughout the past seven years—and, dare I say, even by me. For the benefit of the noble Lord, Lord Graham of Edmonton, I declared my membership of the Metropolitan Police Authority, although I did not tell him that for the past seven years I have chaired the finance committee and so have a little understanding of that, too.

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