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Baroness Farrington of Ribbleton: Perhaps I may help the noble Lord. The Secretary of State cannot

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change the date by which a precept must be set for the GLA or any other authority, but a precept is not invalid if it is set late.

Lord Bowness: Can the Minister help us? Is there not a statutory date by which the borough councils have to set the council tax rate?

Baroness Farrington of Ribbleton: Yes, we are talking about the precepting authority here and the difference between the GLA and the borough councils. The borough councils do have to set a date.

Lord Bowness: I am grateful to the Minister for that, but bearing in mind that the date is, as I recall, in March, this date of 1st February could be deferred to such a point that it is virtually impossible to call a meeting of the borough council and set the appropriate level for council tax. As I understand it, that is what the noble Lord, Lord Tope, is attempting to point out. He is also trying to point out how impossible life would be if the date of 1st February could be deferred to any great extent.

Baroness Farrington of Ribbleton: We are not talking about deferring it to the point where it would not be possible to set a rate within the legal time; we are talking about circumstances which would be quite exceptional, where it was necessary for this power to be used. We are aware that the period of time necessary for the boroughs to set their rate by 11th March must be reasonable and the Secretary of State must automatically be required to act in a reasonable way. All we are seeking to do is to ensure that there is no problem should very exceptional circumstances arise.

6.45 p.m.

Baroness Hamwee: One of the concerns in my mind, which has grown during the course of this debate, would be what the Secretary of State might do if we find ourselves in the situation where the Secretary of State and the Government are of one party and the mayor is of another. Arguing over precisely what is "reasonable" is not going to help practical decisions. One can imagine the rows that there might be between central Government and the authorities, the two parties to the argument. This provision, which allows the possibility of later date, if not being completely unreasonable, could nevertheless be used in a very mischievous fashion.

Lord Tope: I have concerns about both February dates. As I said earlier, the beginning of February date, is too late to allow for proper meaningful consultations, but that may be forced upon us by what I accept will be exceptional circumstances. However, we are legislating for exceptional circumstances and these provisions are put forward to provide for exceptional circumstances.

I have an even greater concern about the last day of February being the last date by which the mayor is required to produce his or her final budget. I may not have completely understood what the Minister said just now, but I thought she was saying that the mayor would

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still have to levy the precept by the last day of February even if the budget can be delayed by order of the Secretary of State. I am not entirely clear how a precept is going to be levied before we have a final budget. Also, I do not think that I have had an answer to my question about whether the Secretary of State has power elsewhere in statute to amend the last date by which London borough councils have to set their council tax. I believe this to be 10th or 11th March.

Baroness Farrington of Ribbleton: I am sorry the noble Lord did not hear me. I said it is 11th March, and the Secretary of State does not have that power.

Lord Dixon-Smith: I think we are going to pursue this point for some considerable time, but it seems to me that the easy option here for the Government would be to fall back on Clause 26(8) which states:

    "The Secretary of State may by order impose limits on the expenditure which may be incurred by the Authority by virtue of section 25(1) above". Also, the Secretary of State may by regulation do one or both of the following: alter the constituents of any calculation made under subsections (4) or (5) of Clause 70, whether by adding, deleting or amending any items. Subsection (4) in aggregate, if I have understood it correctly, describes the expenditure of the authority. Subsection (5), if I have understood it correctly, describes the income of the authority.

The truth is that the Secretary of State, if he chooses to exercise it, has power to dictate the budget of the Greater London Authority. I would suggest that if the circumstances should become as exceptional as this debate would appear to suggest, he might feel inclined to exercise those powers rather than continue with what might be a difficult problem. I certainly accept that that would cause all the boroughs immense difficulty if in fact the budget of the Greater London Authority were not determined at a sufficiently early date to make it practical for all the London boroughs which are party to collecting the revenue for the GLA to set their precepts, because their precepts have to follow on as a consequence of the GLA's precept, and they cannot be made without it.

I think that perhaps we are slipping in our capacity for joined-up thinking here and we are not looking at the totality of the Bill but only at part of it. I am not sure that is a helpful thing to do, and still less am I certain that the Government would wish to be reminded that they have those powers.

Lord Tope: We are envisaging here exceptional circumstances in which the local government finance settlement is so delayed that the Secretary of State feels it necessary to exercise the powers that this schedule would confer on him to allow the mayor to delay the setting of the final budget beyond the end of February. However, the Secretary of State has no such power to extend the deadline for the London borough councils, which will be affected in exactly the same way by exactly the same local government finance settlement. So I cannot understand why we should be asked here to give greater power in respect of the GLA than exists for

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the London borough councils--power which, if ever it is used, would put those councils in an absolutely impossible situation.

We shall not press this amendment today but we shall certainly return to it. I hope that here we have unearthed a difficulty which I am quite sure the Minister, with her long experience, will very well understand is a difficulty which perhaps the Government, in the drafting of the Bill, had not foreseen. We shall certainly return to this and I shall certainly want the Government to explain to me, as currently a London borough council leader, how we would deal with a situation where the GLA's budget was set only days before we had to set our rate for council tax, or even theoretically after we had set the council tax rate--a situation in which the Secretary of State was actually powerless to help. For the time being, unless the Minister has something urgent to say to me--

Baroness Farrington of Ribbleton: I think there is some misunderstanding. I respect the years of experience that the noble Lord had at the time of the GLC, but he is speaking rather as though the setting of the London boroughs' budgets is dependent on knowing well in advance the amount being set by the GLA. There are two different issues: one is the date by which the Secretary of State would be bound as well, which is the date for legally setting the rate, and the Secretary of State would have to have regard to putting that into effect. But noble Lords from those areas which do not have two tiers of authority are tending to contribute to the debate as though it were essential for all the details to be known before the borough authority could take its decisions. Its decisions are independent. Those decisions and the sum total both have to be included in the levying of the rate at the council meeting. Those are two different issues. I see the noble Lord, Lord Dixon-Smith, nodding his head. I assure the noble Lord, Lord Tope, that it will not be possible for the Secretary of State to use the powers proposed in the Bill in order to prevent the borough council from acting in a legal way.

Lord Bowness: I do not want to delay the proceedings, but, as I understand it, the noble Baroness seems to be saying that not knowing what the precept will be does not prevent the borough council settling its own budget. However, the political reality is that the borough council, since it levies the council tax and actually collects the money, will want to know what the total bill is before it makes its final budget and levies its council tax. I understand what the noble Baroness is saying in theory. However, I do not believe that from her experience of local government, albeit in a precepting authority, she would expect the collector to make final decisions without knowing what the bill would be.

Baroness Hamwee: What action should the boroughs take if they consider that the Secretary of State is behaving unreasonably? We are told that this provision does not allow the Secretary of State to behave unreasonably. I accept that, at any rate for the purposes of this argument. But if there is a query as to whether or not the Secretary of State is being unreasonable, what

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can the boroughs do? One cannot realistically envisage the boroughs going to the court to require the Secretary of State to come out with a decision. I am unclear as to how the provision will operate if there is a real problem.

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