Greater London Authority Bill

I beg to move, That this House disagrees with the Lords in their Amendment. The hon. Member for Bromley and Chislehurst (Robert Neill) touched on the question of the budget and the budget-making process and powers. I can understand the superficial appeal of this amendment. It is reasonable to say that to a detached observer it may seem only fair that an assembly should be able to exercise its power to amend the Mayor's final draft consolidated budget by simple majority rather than the two-thirds majority currently required. However, the principle of the two thirds majority goes to the heart of the governance of the GLA—a governance and a model that has served London well since its introduction. I shall explain to the House why that principle is so important. The amendment cuts directly across the principle of a strong executive Mayor and an assembly holding him to account for his actions through effective scrutiny. The budget plays a central role in this model. It allows the Mayor to propose a funding package to implement his policies, priorities and proposals. It allows the assembly to amend only if a broad consensus—in other words, two thirds of assembly members—are minded to do so. It is an important check and balance on the Mayor. It ensures that he cannot take the assembly for granted in proposing his annual budget, but it is also a clear signal to the assembly that it must work together to amend the Mayor's budget proposals formally. I was glad to see that that approach was endorsed by Lord Heseltine in his recent taskforce reports published in June. He recommended that city Mayors"““should be subject to loose scrutiny by the Assembly, who would require a two thirds majority to block executive actions.””" The GLA budget-making process is based exactly on that principle and approach. The Mayor first presents the assembly with a draft budget, which it may amend by a simple majority, and then a final draft budget, which it can amend by a two-thirds majority. That allows the assembly to exert real influence over the Mayor in terms of his budget priorities—influence which the GLA itself acknowledges has saved more than £125 million by reining in, in their terms, the Mayor's budget proposals. In contrast, to allow the assembly to amend the final budget by a simply majority would in effect mean the assembly, not the Mayor, would routinely set the GLA budget. It would fundamentally weaken the Mayor's position, which may indeed be the hidden purpose of the amendment, and it risks a complete disconnect, therefore, between the budget and the Mayor's priorities. If hon. Members pause and consider such a position, it is clear that that risks deadlock between the assembly and the Mayor. It risks conflict and an impasse which would be bad for the GLA, for London and for Londoners. The debate in the other place has been helpful. It has shed important light on how the budget process has been handled in city hall to date, and on two commonly held misconceptions about the role of the assembly in the budget-making process. The first misconception is that assembly members cannot vote in favour of specific amendments because in doing so they would be voting to accept other parts of the Mayor's final draft budget with which they might disagree. That argument fails to take sufficient account of the provisions of the original Greater London Authority Act 1999. Schedule 6 of the Act makes it clear that the assembly must approve the Mayor's final draft budget, with or without amendment, with a two-thirds majority needed to make any amendment. The Act could not be clearer about the assembly's statutory duties in setting the annual budget. Assembly members have no option to ““reject”” the Mayor's final draft. The second misconception seems to be that the assembly can amend only the final draft of the GLA consolidated budget, not the component budgets of which it is comprised. Let me reiterate the explanation and the assurance that we tried to give in the other place. The assembly may, if it chooses, amend any one or more of the final draft component budgets—the budgets of the Mayor, the assembly and the four functional bodies. In so doing, it can amend the final draft GLA consolidated budget, too. Hitherto, the annual GLA budget-setting process has not worked in that way. The assembly has voted instead 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 reject an alternative budget rather than seeking to amend the Mayor's final draft. That approach is perfectly valid, although I think the House appreciates that it is not one that readily lends itself to cross-party agreement. It should come as little surprise, therefore, that the assembly has not, to date, secured a two-thirds majority for change. However, it is open to the assembly to approach its role in that way—differently from how it has approached it in the past—and to make the most of its existing powers by forging coalitions of common interest to amend the budget. Surely that is the right way forward—not making fundamental changes to the successful Greater London Authority model, not blurring the currently clear division between executive and scrutiny functions and not, in effect, allowing the assembly to set the budget, thus risking deadlock between the Mayor and the assembly. I hope that the debate this afternoon will help to illuminate further some of the misconceptions and that Members will appreciate that the budget-making process, as set out, is a central part of the model in the 1999 Act. I hope that the amendment will not be pressed to a vote, but if it is I ask the House to disagree.