Greater London Authority Bill

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 want to 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 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. 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 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 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.