Greater London Authority Bill

My Lords, I relish the opportunity to speak about governance of the capital, a recurring theme in the symphony of London over the past quarter-century. As far back as the early 1990s, the business community identified the need for an executive mayor for the capital. London First, the business body of which I am chief executive, lobbied hard for London devolution. They say, ““Be careful what you wish for””. Prior to 2000, the UK’s premier city had no strategy for managing its own success, no long-term investment plan and no political leadership. There was no policy for deciding whether or how to encourage economic growth following big bang and no plan to cater for the explosive increase in transport demand. There was not absolute support for every detail in the original Greater London Authority Act, nor has there been absolute support for every policy or flight of fancy of the current mayor since 2000. However, at least if we do not like what is happening in our city, we know who to call. London’s economy has strengthened: we have seen off the challenge from Paris or Frankfurt and we now rival New York for pre-eminence in financial services. But London’s complexion is far from flawless. Our transport system is bursting at the seams, we have the lowest employment levels in the country and around a fifth of London adults would qualify for special help in reading and writing were they to start secondary school today. An expected 1 million more people will live in London in the next 20 years, which is like everyone in Birmingham packing their bags and moving to the capital. Housing supply is not keeping up. Demand outstripping supply forces prices up, which takes even so-called affordable homes beyond the means of those on average incomes. These are serious challenges and we need to know that someone, armed with the necessary authority and funding, has the responsibility for tackling them. In this regard, I count the Greater London Authority as at least a qualified success. Without the powers bestowed on the GLA we would not have a strategic London plan, a flagship transport authority with a five-year investment programme or the introduction of the congestion charge in central London; neither would we have the 2012 Olympic Games or an increase of 10,000 in police and community support officers. I am pleased, therefore, that we are debating an extension of these powers. In the animated Wallace and Gromit film ““The Wrong Trousers”” the focus was on the trousers not on the wearer. For today’s debate we must separate the personality, Mr Livingstone, from the trousers, which may be difficult for some of those on my right and, indeed, for some on my left, given that the office of mayor has largely been shaped by the current incumbent. In fairness, his achievements, style and policies this time around have made life under Ken less scary. I and others feel more comfortable about the extension of mayoral powers, so long as they do not extend to foreign policy. If Ken is listening: South America is an interesting continent—I have been there myself—but there are plenty of challenges to occupy us in London without trying to address those in Caracas. Joking aside, it is entirely appropriate for the Government to assess London’s government structures and entirely rational to take devolution another step forward. Already the Further Education and Training Bill has confirmed that responsibility for skills training will pass to a capital-specific body, the London Skills and Employment Board. Stronger powers for the mayor need to be balanced by effective scrutiny by the Assembly. I support a strong executive mayor, even when he pursues what I regard as misguided policies, such as the western extension of the congestion zone and the west London tram. But the obligation placed on the mayor in this Bill to explain why he has rejected Assembly recommendations is a welcome measure that should increase the debate and transparency around decision-making without slowing things down. The new GLA Bill clears up anomalies in the day-to-day operation of the original Act. Importantly, by extending planning and housing powers, the mayor can deliver the strategic plans formulated over the past six-and-a-half years to address London’s growing demand for commercial and residential property. It moves the mayor from back-seat commentator to front-seat co-driver. One helpful aspect of the GLA has been its intelligence function. The improved forecasting of London’s demographic and economic changes has provided the backdrop for the London plan, which sets out London’s planning, economic, environmental and transport policies a decade or so ahead. That is important for London and for the UK as a whole. The latest forecasts show that over the next 20 years the population is set to increase by 1 million, with up to 900,000 extra jobs. It represents a huge challenge to the planning system to build enough homes, shops, offices and infrastructure to support this growth. The competition is moving fast; Asia is moving fast. In the medium term, it is the greatest threat to London’s success. We need to learn to embrace change. In Shanghai, plans today are skyscrapers tomorrow. I do not advocate such an undemocratic, command-economy approach, but our processes should not sit at the opposite end of this spectrum. We cannot afford to construct heated arguments while others construct air-conditioned buildings. It is not enough for the London Plan to set out where development should take place; it has to be translated into approval of actual development proposals. When the GLA was a babe in arms, the Government were nervous of giving the mayor a positive power to approve planning applications. They did not want to recreate the turf wars which characterised the relationship between the boroughs and the GLC, so they settled for a negative power for the mayor to direct refusal of applications for major schemes. This power has caused surprisingly little friction, a tribute to the professionalism of planning teams in both the GLA and most London boroughs. In the main, the power has been used to negotiate revisions to proposals rather than to direct refusals. Nevertheless it is right to be cautious about transferring power from the boroughs. The Bill and the process enshrined in the draft Mayor of London order represent the outcome of months of intense discussion between the major players involved in London’s planning processes. There is wide agreement that the balance is now about right. The proposed new powers will apply to only a very few cases. The boroughs will still consider applications, consult the local community and reach a view on them, but it is right that in exceptional cases the mayor should be able to ensure that proposals of London-wide importance are considered in the interests of London as a whole rather than on the basis of purely local concerns. London needs to increase its housing supply to accommodate an increasing population and provide homes that people working in the capital can afford. This depends primarily on improving the operation of the planning system, including improving the effectiveness of borough planning departments in securing appropriate development. All housing is needed. Simple market forces mean that a greater supply delivers greater affordability overall, and the mayor should have a role in ensuring that London has the housing supply it needs. There has been much debate behind the scenes about whether, if a borough is already fulfilling its housing targets or where only one borough is affected, the mayor should not have the power to intervene. This would overcomplicate the test for whether the mayor can take over an application, achieving nothing more than delay and money for lawyers. The test is already defined as being about strategic importance and significant impact. Adding more dimensions and complications to would be counterproductive and smacks of a failure to embrace the fundamental concept. But I recognise that this is a new system and I would welcome a commitment from the Government to review it after a couple of years of operation. Of course there must be proper consultation with those affected, and their concerns must be taken into account. The new process must be transparent but equally there is a high price to pay for a system which makes it easier to hold up development than to approve it: runaway house prices as supply fails to match demand and the highest office rents in the world. Let us be clear: when London fails to win corporate headquarters they go not to Manchester or Birmingham but elsewhere in the world. Other measures beyond planning legislation are needed to ensure that development keeps pace with demand. Since the introduction of the uniform business rate in 1990, local authorities gain no financial benefit from new commercial development. I welcome the proposal from Sir Michael Lyons that local authorities should be able to keep more of the rate income from new development and use it to provide the investment needed for successful regeneration. It is important that local authorities and developers in London learn to work better together to achieve the huge development required to support its growth. This Lyons proposal would better align interests and is a step in the right direction. But Lyons’s recommendations will achieve nothing if they gather dust on the shelf, and I look forward to government action to implement them. In summary, I treasure a vision of a UK proud of London and a London that recognises its responsibilities towards the rest of the UK. The capital plays a unique role in the UK economy and its challenges are unique. The Government took a bold step—some would say a gamble—when they created a unique form of government for the capital. Very few would argue that, all things considered, the gamble has not paid off. Re-evaluating the structures after seven years is a sensible move, and incremental devolution has proved successful. Arguably, the original Act bit off only as much as it could chew. To continue the analogy, there is now an appetite for greater devolution. London should have the ability to tackle its own challenges. I hope, therefore, that this is only the second and not the last GLA Bill, and that in the near future we will have another opportunity to review progress and take yet another step towards truly devolved London government. Just to give several years’ warning of what I will be looking for in that next phase: first, more levers to tackle unemployment, and, secondly, more fiscal autonomy for London to determine its own spending priorities.