Sir George Young, as sponsor of the Bill, moved amendments to relate voting in the City of London to the numbers of people working there. Unlike other local authorities the City of London comprises mainly business premises with relatively few private residents. The City has a unique role in the UK economy, supporting a high proportion of our balance of trade and providing employment for many people who commute to work - far more commuters than residents. Local elections in the City have traditionally been based on a combination of votes representing business interests (employers) and votes representing residents. This Bill updates the electoral process.

City of London (Ward Elections) Bill

As amended, considered.

New Clause 1

Exclusion of Crown Bodies

'A government department or other body exercising on behalf of the Crown functions conferred by or under any Act shall not be treated as a qualifying body within the meaning of this Act.'.-- [Sir George Young.]

Brought up, and read the First time.

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Sir George Young (North-West Hampshire): I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this we shall take amendments (a) to (d) and (f) to promoters new clause 1, amendments Nos. 33 and 35, promoters amendments Nos. 1 to 4, amendment No. 47, promoters amendment No. 5 and amendments (b) to (d) thereto, amendment No. 52, promoters amendments Nos. 6 to 8, promoters amendment No. 149 and amendments (a), (b) and (d) to (l) thereto, amendments Nos. 60, 68, 69, 71, 74, 75, 77 to 79, 81 to 84, promoters amendments Nos. 10 and 11, promoters amendment No. 12 and amendment (a) thereto, amendments Nos. 90, 92, 95, promoters amendment No. 13, amendments Nos. 97 to 99, 101, 102, promoters amendments Nos. 15 to 17, promoters amendment No. 18 and amendment (a) thereto, promoters amendments Nos. 19 and 20, amendment No. 125, promoters amendment No. 21, amendment No. 126, promoters amendments Nos. 22 and 25, amendments Nos. 131, 133 and 143, and promoters amendments Nos. 26 to 30.

Sir George Young: With your permission, Mr. Deputy Speaker, I should like to comment on the promoters amendments in the group that you have heroically read out. In the debate on the revival motion on 15 November last year, I referred to the promoters' intention to bring forward amendments to the Bill. I said that

"amendments will be introduced to remove the proposed voting entitlement based on the rateable value of premises and replace it with a scheme that relates voting entitlement to the number of people who work on the premises."--[Official Report, 15 November 2001; Vol. 374, c. 1034.]

The new clause and the promoters amendments that we are now considering implement that undertaking.

John McDonnell: Will the right hon. Gentleman give way?

Sir George Young: May I make a little progress? I want to get out of the station before I stop at the first red light. I shall give way to the hon. Gentleman in a moment.

To secure the changes needed to relate the right to appoint to work force numbers, it has been necessary to make a number of changes to the Bill. However, many are consequential, and I shall focus on the amendments that are central to the changes. I should then like to touch on some of the amendments that the hon. Member for Hayes and Harlington (John McDonnell) has tabled.

John McDonnell: Could the right hon. Gentleman advise us as to why these amendments were not available to us during the debate on the carry-over? Why was there such a flurry last week? Amendments were tabled and withdrawn within two hours of the deadline, offering little opportunity for consideration by those who may wish to amend the amendments. The City of London corporation has had four years to produce the Bill.

Sir George Young: When I spoke in November, I said that amendments would be tabled to change the basis, and it should have come as no surprise to the hon. Gentleman that these amendments have indeed been tabled. He should welcome them, because the changes that have been made by the corporation take a giant stride towards the case that he has been making for many years. I hope that

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he will not be churlish about the changes to the Bill. He has that churlish look on his face, so I shall move straight on.

7.15 pm

John McDonnell: On a point of order, Mr. Deputy Speaker. Is that parliamentary language?

Mr. Deputy Speaker: I have heard much worse.

Sir George Young: The hon. Member for Hayes and Harlington is definitely not looking churlish at the moment, and I commend him for the good humour that he is now displaying.

New clause 1 would perform the same function as clause 6. It would exclude Crown bodies, such as Government Departments, from the Bill by providing that they should not be treated as qualifying bodies. No right to appoint would therefore arise. The change is needed because the existing clause relates the exclusion of the Crown to property that is recorded as such on the local non-domestic rating list. The use of the rating list was appropriate when the right to appoint was linked to rateable values. With the disappearance of that link, reference to the local non-domestic rating list is no longer apt. Amendment No. 19 is consequential, and removes the existing clause 6.

Mr. Andrew Dismore (Hendon): I assume that the thrust of the right hon. Gentleman's amendment is to ensure that a United Kingdom Government Department or Crown body could not participate in these new arrangements. What is the position of foreign Governments who may own property?

Sir George Young: I am not sure whether they have any property that qualifies. I think there is an amendment about the European Union, and having made inquiries, I am not sure that it has a building that would qualify. We will make diligent inquiries to see whether foreign Governments own accommodation in the City.

John McDonnell: I am surprised that the right hon. Gentleman, who is sponsoring the Bill, is not aware that this legislation, if carried, would enable foreign Governments who have property in the United Kingdom to exercise a vote through various bodies. They would own property and they would employ staff.

Sir George Young: I am grateful to the hon. Gentleman for that comment.

Amendment No. 1 would remove the definitions of "hereditament" and "non-domestic rating list".

Mr. Dismore: Will the right hon. Gentleman give way?

Sir George Young: I should like to make a little more progress.

With the change from rateable values to size of work forces as the parameter by which the extent of the right to appoint arises, those definitions are no longer needed.

Amendments Nos. 2, 3 and 4 would make changes to the way in which "occupation" is defined to take account of the removal of any reference to "hereditaments".

The term "premises", which is a standard legislative term, is substituted, as "hereditament" is used in rating legislation but not more generally. Entitlements to appoint are no longer ascertained by reference to rateable values, so a rating term is inappropriate.

Amendment No. 5 would insert "workforce" as a principal definition in the Bill by relocating the definition currently set out in clause 4(2). That relocation is appropriate as a matter of drafting, given the adoption of the work force criterion to generate the right to appoint in place of rateable values.

Promoters amendments Nos. 6, 7 and 8 make changes to clause 2(2) consequent on the removal of references to rateable values and hereditaments. The practical effect of the subsection is unaltered. Promoters amendment No. 149, originally tabled as No. 9, is central to the changes now being proposed. It adds a new section, 6(1)(c), to section 6 of the City of London (Various Powers) Act 1957, which deals with electoral qualifications, and provides for the entitlement of a qualifying body to appoint any individual to be decided on the basis of the size of the work force.

New subsection (1A) sets out the extent of the entitlement. For a work force of up to five, one person may be appointed. Each additional five members of the work force will generate an entitlement of one additional appointment, up to work forces of 50. In the case of work forces over 50, the entitlement is tapered. The work force must increase by a further 50 before an entitlement to make an additional appointment arises.

The taper was selected to avoid dominance by larger firms, and to achieve a total electorate that would not produce a larger component of business voters than the Bill does now. In fact the projected figure declines by about 1,500, giving a total City electorate of approximately 38,500.


Dr. Rudi Vis (Finchley and Golders Green): Will the right hon. Gentleman remind us of how part-time workers will be treated?

Sir George Young: I think that they will qualify if the premises involved are their principal place of work.

Andrew Mackinlay (Thurrock): Paragraph 9 of the statement given us by the promoters states:

"Residents are currently concentrated in four wards in the City. The wider reforms"--

which we are discussing--

"provide that the residential vote will continue to dominate in those wards."

Can the right hon. Gentleman, either now or later this evening, tell us what estimates have been made of the ratios involved in the four wards?

Sir George Young: I do not carry such important statistics in my head, but I will ensure that the hon. Gentleman receives them. The key point is that the boundaries are being changed so that the domination of the residential vote can be retained in the four wards, thus leaving the balance unchanged.

John McDonnell: I raised the issue of boundary changes in my point of order, because one of the corporation's commitments was that they would be implemented. That commitment was given three years ago to Committee Members who are present now, but no attempt has been made to protect residents. Is that not an act of bad faith on the corporation's part?

Sir George Young: I do not accept that criticism. I understand that the boundary changes are going through, although they are not included in the Bill.

Under proposed subsection (1B), the entitlement of any qualifying body to make appointments would be confined to situations in which the full five, or 50, increase in the size of the work force was satisfied. Remainders are ignored. A work force of nine, for instance, would generate an entitlement to one appointment, because the full step of five additional members of the work force above the one appointment generated by a work force of up to five had not been satisfied.

The quantitative assessment of the outturn in terms of the number of business voters has been a substantial obstacle to the adoption of a work force-based entitlement. Only through the results of a comprehensive land use survey in which the corporation has been engaged over the past four years--a process involving personal visits both to individual City businesses and to correspondents--has the development of the scheme now envisaged being possible. The survey will need to be updated on a continuing basis through the development of an occupiers' database. That represents a substantial ongoing commitment on the corporation's part.

The promoters still think that rateable values would have provided the most readily available and easily validated basis for the entitlement to appoint. I note that the Government's recent White Paper, "Strong Local Leadership--Quality Public Services", anticipates the use of rateable values for the voting mechanism for business improvement districts. The promoters have, however, sought to respond to the continuing objections of the Bill's opponents in Parliament to a property-based system.

The City of London Labour party petitioned against the Bill when it was introduced. I hope I will not offend my hon. Friend the Member for Cities of London and Westminster (Mr. Field) if I read a short passage from the evidence given to the Select Committee by Mr. Christopher Haines, chairman of the City of London Labour party, to which the Corporation responded by tabling the new clause and amendments. He said

"We have commended to the Corporation an alternate proposal, that votes should relate to the number of staff employed by bodies within the City, a system we refer to as a payroll vote. We do not by that mean that it is based on the amount of the payroll but rather that the company would qualify for a number of votes depending on how many people it employed within the City, not the total throughout the country. We believe that this would more closely reflect the democratic position of this country as a whole and we understand those traditions are that votes are based on people, not on buildings and not on taxes".

Mr. Haines went on to point out that such changes should be part of continuing reforms, and that changing the present Bill to achieve the system he proposed would result in substantial amendment. Members will have observed the number of amendments tabled by the promoters. I can tell them that they have been discussed with the officers of the City of London Labour party, who have responded constructively.

The new scheme maintains--albeit on a different basis--arrangements for the appointment of individuals. I want to say something about that in the context of amendment No. 149. Members should realise that we are not talking about nomination or appointment to the City's governing body. The individuals appointed will become part of the electorate who, with the existing business voters, will be able to participate in the City's ward elections. Using the jargon, one could say that they would form part of the electoral college comprising all the City's voters, who will decide by secret ballot who will represent them on the City's governing body.

The hon. Member for Hayes and Harlington asserts that there should be no element of appointment or nomination. The link between those who pay for local services and the entitlement to vote in local elections has long been recognised. It is axiomatic that people liable for council tax in any local authority area will have a residence there, and will thus be able to vote for their local council.

I accept that since the advent of the national non-domestic rate, there has been no such link between payment for local services and the local authority for businesses. The City's position, however, is different. Businesses in the City are uniquely subject to local rating powers. When the national non-domestic rate was being developed, officials at what was then the Department of the Environment calculated that without the local business rate arrangements, City residents would face yearly tax demands of 9,000 each.

These local business rate powers are not limited to businesses that currently have voting rights; they apply to all City businesses. The Bill as redrafted, however, does not simply give businesses that pay the right to a vote. It links the new entitlement to their work forces, and provides for appointments to reflect the composition of those work forces.

Phil Sawford (Kettering): I recognise that this represents a fundamental shift from votes for property to an arrangement based on the numbers who work in that property, but there is a whole body of electoral law applying to the normal democratic process. There are so many questions relating to part-time workers, the number of registered electors, how we will be able to verify the information and whether these will be British citizens who would be entitled to vote in other elections. Amendment No. 149 shifts the goalposts without setting out the mechanisms. That is what concerns me on the democratic deficit side.

Sir George Young: That is a criticism that the Bill's opponents made when it was in its previous form. There are very good reasons for not setting out in detail the issues to which the hon. Gentleman refers. We are talking about a legal minefield. I believe that some 50 per cent. of legal actions, in the case of industrial ballots, relate to the operation of the law. I think it much better to set out the broad principle that the electorate should reflect the composition of the work force and leave the rest to the good sense of businesses, rather than embarking on a marathon of complex legislation that will end up before the courts. That was in the Bill before, and is unchanged by the shift to which I referred.

Mr. Mark Field (Cities of London and Westminster): May I pick up the point made by the hon. Member for Kettering (Phil Sawford)? I hope that the question raised by the hon. Member for Thurrock (Andrew Mackinlay) will be answered, if not this evening, then at some point in the near future when we have the statistics to hand.

There is no doubt that the local councillors who will be elected in four largely residential wards will be elected by residents. Whatever formula is used, there is no question of residents' positions being usurped by a block business vote. There is a protection for local residents.

Sir George Young: I am grateful to my hon. Friend for that clarification.

Mr. Dismore: Will the right hon. Gentleman give way?

Sir George Young: I should like to make a little more progress.

The further consideration, which all those who have an interest in making the system work acknowledge, is that it should be simple to operate. Some of the amendments tabled by the hon. Member for Hayes and Harlington and his colleagues anticipate elections about elections by a system of proportional representation through electoral colleges or ballots, which involve such complexity that they would be guaranteed to ensure that the new system was still-born. That may indeed have been the intended consequence.

Amendment No. 10 deals with the situation where premises cross ward boundaries. In such cases the premises will be treated as being located in the ward in which the greater proportion of the premises is located. That achieves the same result as formerly provided for by clause 3(5).

Amendment Nos. 11, 17 and 20 simply change "hereditament" to "premises", to reflect the fact that the scheme is no longer based on rateable values. As I have said, "premises" is a standard legislative term.

Amendment No. 12 reproduces paragraph 13 of part 2 of schedule l to the present Bill. There are no changes in drafting and the purposes remains the same: to prevent the possibility of "double counting" or an entitlement to appoint individuals arising twice in respect of the same premises.

Amendments Nos. 13, 16 and 27 deal with a consequential drafting change to refer the reader to the 1957 Act rather than the current Bill and to take account of the other amendments to clause 3.

Amendment No. 15 takes account of the incorporation of the definition of "work force" in clause 2. As the term is to be defined as part of clause 2(1), there is no need for it to be repeated at clause 4(2).

Amendment No. 18 is a consequential drafting change to reflect the change from "hereditament" to "premises". It substitutes "premises" for "hereditament" and reorders the concluding words of clause 5(5).

Amendment No. 25 removes schedule l entirely. The schedule sets out the entitlement to appoint voters relative to the rateable values of premises. With the change to a work force based system, it becomes redundant.

The remaining amendments--Nos. 21, 26, 27, 29 and 30--are consequential in nature, but I should refer to amendment No. 28, which concerns the repeals schedule. It may not be clear to the House that this is a repeal and not, I hasten to add, a reintroduction of a l0 rateable value threshold. With the change to work force size as the criterion for the number of appointments, the references to specific rateable values which were necessary as part of the scheme set out in schedule l become redundant.


Andrew Mackinlay: I wonder whether the right hon. Gentleman could enlighten us. Are places of worship treated as properties? Is there a distinction between Church of England properties, which arguably may be Crown properties, and others? He has referred to Crown properties; no doubt he can answer that point. What would be the position of other denominations that are not part of the established Church?

Sir George Young: I understand that Churches are either unincorporated or incorporated bodies and that those who work within premises owned by Churches would be eligible, although some of the amendments tabled by Labour Members would exclude them.

Mr. Dismore: Will the right hon. Gentleman give way?

Sir George Young: Perhaps I can deal with any other points if there is time at the end.

I should like to deal with the other amendments that have been selected with the promoters amendments in this group.

Amendment (a) leaves out reference to bodies other than Government Departments exercising Crown functions under Acts of Parliament from the proposed exception. It is not immediately apparent what bodies are being referred to by the amendment, but presumably they would be Crown bodies other than Government Departments exercising functions under provisions other than Acts of Parliament--perhaps royal charters or the royal prerogative.

Putting aside that ambiguity, it is not clear why those particular species of Crown bodies should be outside the exception proposed. If there were any such bodies in the City, and the promoters do not know of any, they would achieve a privileged status as against other Crown bodies exercising Crown functions. That would be illogical and I advise the House to reject the amendment.

Amendment (b) points in the reverse direction and extends the exception by excluding Government- appointed bodies from the Bill's provisions. "Government-appointed" is not defined, but presumably the amendment refers to quangos. The promoters have received no representations from such bodies that their work forces should be excluded, and on the principle of inclusivity, on which the definition of "qualifying body" is based, the promoters would be reluctant to take that course. The effects would certainly be capricious. To take an example at random, there would be no obvious reason to exclude the Advisory Committee for Disabled People in Employment and Training, a quango, if it opened a City office, so I invite the House to reject amendment (b).

Amendment (c) extends the exclusion from the Bill's provisions to any institution of the European Union. There are no such institutions known to the promoters in the City, and none proposed, which is no doubt why no representations have been made in respect of them. Even if such institutions were present in the City, it would not necessarily follow that their work forces should be excluded. Be that as it may, I advise the House, in the well worn phrase, that the amendment is unnecessary. I invite the House to reject it.

Amendment (d) raises the interesting proposition that the Secretary of State should be put in charge of deciding who should be able to appoint people by giving him the power to decide which bodies will be "qualifying bodies". That does not seem an attractive or even--dare I say it?--democratic proposal. It may be said to turn the City into an oversized quango; if so, it would be inconsistent with amendment (b), so I ask the House to reject that.

Amendment (f) seeks to exclude from amendment (b) the London Development Agency. I have already commented on that amendment but perhaps I should add that apart from the dangers of inequality of treatment to which I have referred, it appears to overlook the fact that, unlike regional development agencies elsewhere, where members are appointed by the Secretary of State, the members of the London Development Agency are appointed by the Mayor under the Greater London Authority Act 1999.

The other amendments cover familiar territory: the requirements for electoral colleges, for ballots and for proportional representation. A variety of amendments would render the Bill bureaucratic and unworkable. Some exclude voluntary organisations and even trade unions. The amendments have been debated extensively on other occasions and I do not propose to weary the House by repeating the arguments against them.

Click here for the Hansard report on the debate.

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