Tuesday, 8 July 2008

Boris Johnson gives £400,000 pay-off to Porsche

Boris Johnson's pledge to get more bang for the taxpayers buck received yet another blow yesterday when it was revealed that Londoners would now pay Porsche £400,000 in legal costs.

The judgement was made after the Mayor's office conceded the legal challenge to the £25 emissions charge on the highest polluting vehicles.

Green Assembly Member Jenny Jones said yesterday:

"This is a mayor who is telling us he wants to see value for money, and to account for every penny, and here he is paying one of the richest car companies in the world hundreds of thousands of pounds of taxpayers' money."

Porsche's attempts to challenge a policy that was about to be judged by the London electorate was completely undemocratic and one of the most bizarre events of an otherwise uneventful election campaign.
But for the Mayor's office to concede the case and £400,000 of taxpayers money to one of the wealthiest car companies in the world is frankly incredible.

And while we all knew before the election that Boris Johnson had a pro-motorist agenda, we didn't realise that it would would extend to paying off the car companies themselves.
Via Mr S.B


Anonymous said...

Didn't one of the tabloids catch him driving dangerously in a Porsche once?

Anonymous said...

When I read about this in today's Guardian, my jaws dropped.
What a hasty, lazy and not at least ill-considered decision from a Mayor that shows himself more and more incompetent for every hour in his job.

The Tory Troll said...

Anon 1: Yes I was going to mention that. It was a Lamborghini though. Here's the story:


Hawkeye said...

To be fair, Porsche have said that they will be donating the money to charity. So technically, that's "£400,000 of taxpayers money to a charity".

I loved the comment by the Managing Director of Porsche GB saying the plans were "a blantantly political tax". Errr... can't you label all taxes that way??

The Tory Troll said...

Porsche are donating the money to a scheme which trains mechanics. Hardly an entirely altruistic gesture.

And besides, if Porsche want to donate money then that is up to them, but I don't remember Boris running on a promise to train mechanics.

Hawkeye said...


Many companies will favour charitable organisations that have some link to their business. The fact is that the money is being donated to charity - as to the pros and cons of one charity over another, that's a different subject.

Moreover, it's worth pointing out that it was a high-court order that TfL pay this sum to Porsche... although I'm unclear on what princple. If the c-charge was being dropped in any case, was the fear that Porsche would continue their court case to claim for their costs? Was TfL's fear that their legal fees in defending the legality of the plan not worth the risk of the possibility of losing the case? Especially given the decision to drop the plan in any case?

Whilst I dislike the fact that the plans have been dropped, and I dislike the fact that it's involved a large sum on money being paid, there is probably - and unfortunately - logic in paying the money given the choice to drop the scheme. As opposed to resisting and appealing through the courts.

The Tory Troll said...

I understand what you're saying Hawkeye, but as I understand it, the High Court only ordered Boris to pay the money because he conceded the case. I still don't see what ground Porsche had to challenge a policy that was about to be democratically decided by the electorate. As you yourself say, every tax is political.

There is no reason that I can see why Boris couldn't have dropped the £25 charge and still contested Porsche's case. Apart from anything else it sets a dangerous precedent where companies can challenge any policy on the grounds that it will effect their profits.

Helen said...

The City Hall webcam announcement has been restored to "This is City Hall, the home of London's Democracy".

I suggest a referendum on whether we should donate Boris to charity.

The Tory Troll said...

I forgot about the environment committee. Any news from that? Has Boris decided to build any new motorways or nuclear fuel dumps yet?

barry rochford said...

Come, come - what's all the fuss about. Boris is being very restrained.
After all, he hasn't decided (yet) to convert bus lanes to performance-car lanes.

The Tory Troll said...

He's saving that for a second term ;)

Simon said...

I've often wondered whether the Tories' main aim is to abolish the congestion charge altogether, and that announcements like this are a way of preparing the ground to take that decision when they can be sure the political weather is right.

The idea of charging motorists to fund investment in public transport is still one that most Tories have a viscerally negative reaction to, whatever they say in public.

Having said that, such a move would require a degree of tactical competence which I don't think Johnson is quite up to.

Anonymous said...

The problem with litigation is that there are costs involved ... and if you concede, you pay the victor's costs 'to be assessed if not agreed'.

In circumstances where permission is sought to judicially review a decision, the grounds on which such a challenge can be brought include that the decision was not within the power of the decision maker, that the factors considered in reaching the decision were either not relevant or too much weight was given to some factors, that the decisions was not reasonable (Wednesbury reasonableness) in all the circumstances, or a combination of these factors.

I have not seen the grounds of Porsche's challenge, but I would have thought that they would have had some prospect of success ... especially given that the 'congestion charge' was effectively being expanded into a 'CO2' charge without any change in the legislation.

I am sorry to say that rather than being Boris's fault, this is a left-over from Ken's time ... but that's another story.

The Tory Troll said...

I am sure that they thought they had a chance of succeeding Evan, as did the GLA, but I still think that conceding has set a very worrying precedent. Any company that sees a policy that will reduce their profits will now feel that they have a chance of challenging it.

Anonymous said...

I am very disappointed that there were not more newspapers who picked up on this one. You are right Tory troll, this may very well set a dangerous precedent.
I would like Boris Johnson to explain a few questions in regards to what looks like a very hasty and cowardly decision from his side.
Londoners and the elected Assembly should demand a public explanation from the Mayor on why such a decision was made.
And we do not want to have another 'Rise'- talking-himself-out-of-situation- I didn't know about this.

Anonymous said...

I disagree.

Conceding a point that is likely to succeed whether on ultra vires grounds or otherwise will not increase the chances of judicial review proceedings from other potential litigants.

The legal process involves an application for permission that itself can be refused on paper and at an oral hearing. If it is refused, an application to renew at the Court of Appeal is, in my experience, unlikely to succeed.

No company is going to start the process unless it can see its financial interests served by winning ... and winning is what would be important. So someone will have prepared advice that told Porsche that they were in a strong position to challenge the proposed policy.

The lesson from this is that if you are proposing to extend a policy from one idea to another, you have better make sure that the legislation that enables you to act gives you the power you need and that you take the decision properly ...

The Tory Troll said...

Thank you for the lesson

Anonymous said...

Evan Price,

Not sure if I understand what you are trying to explain here.
I like to keep things crystal clear,..and to use my common sense.
My common sense tells me that it is very problematic when private companies can, through legal matters, financially punish or even overrule political decision-making.

I can give an example. In Bergen, the second largest city in Norway, a big group of activists lobbied against Clear Channel, opposing the plans of having their public rooms overrun with billboards and advertisement. The local council decided to listen to the majority of their citizens and voted against Clear Channel's proposal. Clear Channel then tried to sue the Bergen Council due to 'breach of conduct.'
Thankfully, Clear Channel lost their case in Norwegian Court last year, and to me this represents a huge democratic victory.

What would for instance have happened if for instance the Bergen Mayor had given in to Clear Channel or paid them a massive sum of taxpayers money in compensation for a broken deal? What kind of signals is that sending out to other companies in the future?
What kind of signals are Boris Johnson sending out to the citizens of London when he so easily gives in whilst being confronted with a big Company?

I personally don't know much about how the British law functions but there is always and at least two sides of a case.

The thing that I most react upon is the way we just are being told that 400 000 pounds of taxpayer has just been paid out without any proper explanation to why they came to such a decision. This is what I think we should demand from the new Mayor of London.

So far there hasn't been any transparency, just spin after spin.