Transport Bill

HC Deb 15 November 1982 vol 32 cc38-112

Order for Second Reading read.

Mr. Allen McKay (Penistone)

On a point of order, Mr. Speaker. Is it in order that, following a High Court decision in the Merseyside case, a Bill should be brought in at this stage to dilute the High Court decision in such a manner as to disrupt hundreds of thousands of lives?

Mr. Speaker

Order. This House is supreme. No court in the land can stop the House moving, if it so desires. This House is Parliament. That is the answer to the hon. Gentleman's question.

Mr. Douglas Jay (Battersea, North)

On a point of order, Mr. Speaker. I seek your guidance as to whether it is fair to ask the House to debate the Transport Bill when the Government have given so little time for us either to consider the Bill or to consult outside interests which are greatly affected. We have had barely more than a week to consider both a White Paper and a complex Bill. Surely the normal purpose of a White Paper is to have an interval during which hon. Members may consult outside interests and their constituents before proceeding to enact legislation. That has not been done in this instance as the White Paper and the Bill were published simultaneously.

Secondly, this complex Bill affects various other Acts—particularly the Transport Act 1968 and the Transport (London) Act 1969—but the connection between those Acts is not apparent at first sight. This matter clearly deserves consideration.

Thirdly, it is now a year since London Transport was thrown into chaos by the House of Lords decision on transport services in London. During that year, the Government have done nothing to redress the problem. It seems unreasonable that the Government, having done nothing for a year, should ask the House to consider the Bill after one week's consideration. Therefore, I ask for your guidance on this matter, Mr. Speaker.

Mr. Speaker

I listened to the exchanges last week, and the Leader of the Opposition referred to some of the points that the right hon. Member for Battersea, North (Mr. Jay) has just made. The House knows that I follow the Order Paper, and there is nothing in that, of which I know, to stop the Government moving the Second Reading of their Bill. Thus, it is not a question for me.

We have had the Orders of the Day and it is now time to discuss the Bill.

Mr. Michael Welsh (Don Valley)

Further to that point of order, Mr. Speaker. The Transport Bill and the White Paper were presented together only 10 days ago. Page 7 of the White Paper states: The Secretary of State will take account of local authorities' views". How could the Secretary of State make that statement in the White Paper when he presented it on the same day as the Bill?

I ask for your guidance, Mr. Speaker. Would not it be correct to withdraw the Bill until the Secretary of State has held wide-ranging discussions and taken account of the views of local authorities and other institutions?

Mr. Speaker

With respect to the hon. Gentleman, I must point out that his remarks would be better made during the debate.

Mr. Harry Cowans (Newcastle upon Tyne, Central)

Further to that point of order, Mr. Speaker. I accept that it is not within your jurisdiction to rule on what the Government bring before the House. However, as the custodian of the House, surely your jurisdiction covers anything that prevents right hon. and hon. Members from carrying out their duties to those who elected them? The Bill was presented only 10 days ago, and many right hon. and hon. Members did not receive it until Monday. As they were in the House all last week, they were prevented from holding meaningful consultations with their local authorities, even though the Bill has a major impact on them.

I seek your advice, Mr. Speaker. Is it proper that right hon. and hon. Members should be prevented from carrying out their duties because of the Government's unprecedented and unseemly haste in forcing the Bill on to the Floor of the House?

Mr. Les Huckfield (Nuneaton)

On a different point of order, Mr. Speaker. As my hon. Friends have pointed out, we have been presented with an enormous difficulty because, in a wholly unprecedented fashion, the White Paper and the Bill appeared on the same day. Page 10 of the White Paper refers to the transport support that local authorities can expect to receive from the Government when the Bill is enacted. I can produce evidence that suggests that the Department of Transport has already written to local authorities telling them of the amounts that they will receive—even before the Bill has had its Second Reading. How can any Government tell them the amount of revenue and other support that they can expect to receive when the Bill that makes the allocation possible has not had its Second Reading?

Mr. Robert C. Brown (Newcastle upon Tyne, West)

Further to the point of order raised by my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans), Mr. Speaker. Following the Queen's Speech, the officers of the northern group of Labour Members urgently met officers of the Tyne and Wear county council to consider its transport implications. We agreed to ask officers of the county council to examine the White Paper and the Bill, and then to hold further discussions on the possible effects. It is clear that there will have to be a reduction in bus services, that the 5p fare for children will have to end, that concessionary travel for the elderly will be affected and that there will be a reduction in employment by the passenger transport executive.

We intended to hold consultations, on behalf of the people of Tyne and Wear, with the officers and elected members of the county council, together with hon. Members representing local constituencies. We have been deprived of that opportunity because of the Government's indecent haste in introducing both the White Paper and the Bill at the same time and, within a week, expecting us to give it a Second Reading, even though we have not had time to consult locally. That is a sharp practice by the Government—

Mr. Speaker

Order. Perhaps I might answer the three points of order, which amount to much the same as the points with which I dealt earlier. It is not a matter in which I have any authority, other than to call upon the Minister to move the Bill for Second Reading.

Mr. Robert Hughes (Aberdeen, North)

On a point of order, Mr. Speaker. It is obvious from the responses of my hon. Friends that a serious difficulty faces the House in dealing with the Bill. It will be further compounded if the Bill moves into Committee. The usual process is that those who serve on the Committee have the opportunity to consult other hon. Members and outside bodies.

If the Bill is pushed into Committee with the same unseemly haste as it was presented to the House, it will be virtually impossible for hon. Members to do their job of properly scrutinising legislation. Will it be in order at the end of today's proceedings, if the Bill receives a Second Reading, to move that it be committed to a Committee of the whole House?

Mr. Speaker

It will be in order for the hon. Gentleman to do so.

4.46 pm

The Secretary of State for Transport (Mr. David Howell)

I beg to move, That the Bill be now read a Second time.

Second Reading of the Bill takes place against a background of spiralling subsidies to current bus operations, vast extra rate burdens, legal doubts about how much subsidy can properly be paid and great instability in the conditions in which public transport operators have to work and plan.

During the past three years, local public transport subsidies have risen from £200 million to £400 million. Plans in the pipeline from metropolitan authorities and the GLC would raise them by another £200 million next year, unless there is some restraint. I believe very strongly that there is a danger that revenue support of local bus operations has been, and is, getting out of control, and that it is in the interest of the economy, and indeed of the long term future of the bus industry, that revenue from bus operations should increasingly cover costs. Those words appear to cause amusement among Opposition Members. I should tell them that they are not my words, but those of the Minister of Transport in the previous Labour Government, the right hon. Member for Sheffield, Park (Mr. Mulley).

In fact, restraint in the growth of these subsidies used to be an objective that the Opposition, in Government, wholly supported and vigorously embraced, and that was when the figures were far, far lower than they are now. I am sure the House will be extremely interested to hear from the right hon. Member for Barrow-in-Furness (Mr. Booth) and his hon. Friends this afternoon why, and under precisely what influences, the Labour Party has now so wholly reversed its position.

Mr. Peter Snape (West Bromwich, East)

Does the Secretary of State accept that views on these matters change, even across the Floor of the House? Have not many members of the present Cabinet who pursued policies under the leadership of the right hon. Member for Sidcup (Mr. Heath) now spurned them? Are not the amounts of public transport subsidy paid to our larger cities only half the amounts paid to most of the major cities of Europe? Will he develop that theme in his speech?

Mr. Howell

The hon. Gentleman is not correct. I shall be able to put him right. He is telling us that he has changed his position. He has done not so mu[...] U-turn as a U-wriggle. No doubt his right hon. and hon. Friends will explain why they have gone through the wriggling process. The House will be interested to learn why they have done so.

The Bill has three major purposes and fulfils three vital needs. First, it clarifies the law on subsidy support for public transport. It makes absolutely clear the scope within which the GLC and the metropolitan authorities can subsidise local transport without fear of legal challenge. Following the House of Lords judgment in the Bromley case, I was repeatedly pressed in the House and elsewhere to make clear what was legal. That is what the Bill will do.

The metropolitan authorities also faced legal uncertainties about what was safe from legal challenge, and this has clearly created difficulties for the passenger transport executives. There is no doubt that the attentions of the Authority and the Executives in approaching the major difficulties confronting the passenger transport network in 1981–82 were diverted by the legal ambiguity which has arisen from recent legal decisions on the powers of Executives and their Authorities. Those are the words of the Greater Manchester PTE in its annual report. They reinforce my argument.

The Bill meets the clear requests that have been made and clearly identifies problems. It gives these authorities an absolute certain basis on which to pay subsidy, as was asked for.

The second purpose of the Bill is to help improve the efficiency and value-for-money performance of our public transport systems in cities. I was interested to hear of the complaint of the right hon. Member for Barrow-in-Furness that local authorities were trying to run cheap and efficient transport systems, and that the Bill frustrated all the efforts to promote efficiency. If that is what he said, he must have forgotten a few facts when he talked about the contribution of these authorities to efficiency. Over the past 10 years the unit costs of both London Transport and the other PTEs have been growing steadily worse and have risen much more than inflation—30 per cent. faster in the PTEs and 50 per cent. faster in London Transport. The situation in London is frankly appalling, as everyone except the right hon. Gentleman seems to realise. I shall return to some of the details on that.

Even if London Transport had kept to the efficiency levels of other major cities—which is not setting an unduly high target—it would still be saving about £80 million a year on costs, which could have gone to more new investment or lower fares.

We can argue about the right level of subsidy support for passenger fares and the burden that should fall on rates and taxes. However, there is no shred of argument to justify subsidies to finance inefficiency, excessive manning and inflated costs. When that happens the ratepayer pays through the nose and the traveller does not fully benefit. Meanwhile, even higher rates destroy businesses and jobs. Indiscriminate subsidies not only have their well known undesirable side effects on efficiency, cost consciousness and incentives and their obvious public expenditure drawbacks but they fail the most essential test. The benefits do not go to those who need them most. That puts the argument rather well. The quotation comes from Labour's 1976 transport document, which was published by the then Labour Government.

The key to efficient operation lies in planning ahead, and that requires stability—which is most emphatically what London Transport has been denied. The Bill will require PTEs to put forward their plans each year on a three-year rolling basis. It will strengthen the incentives for these large organisations to be managed less rigidly and give better value for money, and they will be required to consider obtaining tenders from alternative private operators who are prepared to offer the services required more cheaply.

The third main purpose of the Bill is to discourage city authorities from the reckless course on which some of them have been set, with their excessive commitment to high rates, which destroy jobs with deadly efficiency, and to ultra-low fares which destabilise our transport systems.

It has been claimed by the right hon. Member for Barrow-in-Furness and others that for the Government, in face of all this, to place some restraint upon what is lawful is an attack on local democracy. It is no such thing. It leaves local authorities with their own duties and responsibilities on transport and on other spending It makes subsidy unquestionably lawful and provides a clear area of certainty within which city authorities can act. Only outside this protected area will there he a risk, as now, of legal challenge. It is what the authorities asked for—although, now they are getting it, it seems that they are against it.

The Bill does not contain reserve powers to take over local transport. I shall have something to say about that—especially about the London scene. Beyond the protected area of lawful subsidy defined in the Bill, I believe it is right that, where city authorities remain legally responsible for transport, it is up to the ratepayers to challenge and the courts to deal with irresponsible expenditure. That is the approach that the Bill adopts.

Mr. Stephen Ross (Isle of Wight)

The right hon. Gentleman said that local authorities were in favour of the Bill. Why has the Association of District Councils, which is certainly not Liberal or Labour controlled, issued a statement—I suspect that all hon. Members have received a copy of it—which comes out very much against the Bill, which seems designed to remove from local authorities discretionary powers to provide transport services?

Mr. Howell

The hon. Gentleman, or those from whom he has received the document to which he refers, seems to misunderstand the purpose of the Bill. This measure will have no effect on district councils or shire councils. We are dealing entirely with the metropolitan authorities and the Greater London Council. It seems that the hon. Gentleman is confused.

Mr. Harry Cowans

rose—

Mr. Howell

No, I shall not give way on this occasion. I have given way quite a lot already and I shall give way again, but I shall not do so every two minutes.

If an authority were to decide deliberately and petulantly to create transport chaos—for example, by refusing to participate in the processes leading to lawful subsidy—we would not hesitate to take further action. However, as it stands, the Bill is in no conceivable sense an attack on local democracy. Charges that it is are, in reality, the demands of those who want to carry on with disruptive policies for their own ends.

There was a time when the Opposition had a clear and balanced view of all this—when they were in Government some years ago. Labour Transport Ministers repeatedly tried to reduce revenue support to buses by the metropolitan authorities. They repeatedly warned that excessive fare subsidies in[...]less on capital equipment and investment, as they certainly do, and more on the rates, as they certainly do, too.

The right hon. Member for Stockton (Mr. Rodgers), who is not in his place, tried ceaselessly when he was Minister of Transport to get authorities such as South Yorkshire to see sense, but it was all to no avail. If Opposition Members were worried at the subsidy levels prevailing in the late 1970s, they should be 10 times more worried now. They know perfectly well that if the reasons were good then for restraining open-ended revenue support, they are far stronger now.

Mr. Jay

So far the Minister has not justified or even explained the Bill. He has told us that its object is to make everything perfectly clear and understandable for local authorities. I shall ask him a specific question to ascertain whether he is clear in his own mind. The Transport (London) Act 1969 set out various objectives to which an authority had to have regard—in that instance it was the GLC—in fixing fare levels. The Act states that the London Transport Executive shall provide or secure the provision of such public passenger transport services as best meet the needs for the time being of Greater London. It has been estimated that next year's effort alone would have cost business the same as employing 30,000 people.

The London Chamber of Commerce found that for 80 per cent. of its members, cheaper fares made it no easier for them to recruit and that one third of its members, faced with soaring rates, are talking about running down their operations. That was one of the objectives of that Act. Under the new legislation, will that still be one of the criteria that the Greater London council has to observe?

Mr. Howell

The criteria under which the protected expenditure levels are set are described in clause 4(6). One of the criteria is that the local needs, as reflected in the transport policies and plans, must be taken into account. That continues to be one of the criteria. I shall come to those matters. I think that I gave way to the right hon. Gentleman prematurely.

I shall set out those important matters clearly for the benefit of Opposition Members who seem to think that the legal position on subsidy is not clarified. The right hon. Gentleman was foremost in arguing that it needed clarification. I am doing what he wanted.

Mr. Jay

rose—

Mr. Howell

I cannot give way again.

I was making it clear to the House and to the right hon. Gentleman that when the Government whom he supported were in office, they knew well that there were good reasons for seeking some restraint on open-ended revenue support. The arguments are stronger now than they were then. The first is the catastrophic effect on rates and on jobs that policies such as the misnamed "Fares Fair" policy, which the right hon. Gentleman supported, have had. That policy would have quadrupled London business rate bills for transport by next year and cost an extra £1200 million over four years.

Is that the policy to which the right hon. Member for Barrow-in-Furness and his hon. Friends are urging us to go back[...]apparently, it is still the policy that the GLC has been parading as its first preference and which it has been promoting through a programme of grossly misleading advertising, financed with ratepayers' money.

It is not even as though London Transport has been starved of funds. Next year, it could lawfully receive about 40 per cent. of current and capital costs through subsidy. Even the figures given by the GLC have proved to be wholly erroneous and misleading.

The protected levels of expenditure in the White Paper would allow London fares to be held without increase. The chairman of London Transport has said that and also that the Bill gives a prospect of a period of stability in which London Transport could get on with the job of running and improving services to customers.

Concessionary fares were mentioned in a point of order raised by the right hon. Member for Battersea, North (Mr. Jay) at the beginning of the debate. The Bill does not affect those fares for the elderly or the disabled. The GLC, like other authorities, is free to provide them as a result of legislation that was taken through the House last year by the Government.

However, if high rates and excessive fare subsidies are allowed to proceed, the elderly will pay for others through their rate bills. Of course, they pay again through the higher prices for services and in the shops that high rates bring about. Therefore, the people who are most vulnerable are kicked twice by the "Fares Fair" policy, to which, as far as I know, Opposition Members remain resolutely devoted.

Mr. Peter Hardy (Rother Valley)

Will the Secretary of State give way?

Mr. Howell

I shall continue, as the GLC aspect is important.

Even the latest GLC ideas threaten a further huge burden on business rates—at least £70 million is estimated—and a hefty direct increase on the domestic ratepaying householder, who would pay four times what he or she used to pay in rates for transport. There is a strong danger that that could lead to another cycle of chaos in our capital city, after which there would be no winners. Everyone would lose and there would be grave difficulties and disruption.

I have talked about London, but the problem is not confined to London. All over the country, local employers have been desperately trying to drum into councillors just what the high rate policies are doing to employment. Opposition Members cannot brush aside that matter. In the steel melting, rolling and forging industries employers are paying more than a £1,000 a year in rates for each employee. One of the reasons for Sheffield being transformed from a prosperous city into one where unemployment is above the national average are the rates we are paying to subsidise cheap transport".

Mr. Snape

Disgraceful.

Mr. Frank Dobson (Holborn and St. Pancras, South)

Disgraceful.

Mr. Howell

I am quoting. Those are the words of the director of the Sheffield chamber of commerce. He represents much more closely the interests of the employed and unemployed than hon. Members who dismiss that quotation as disgraceful. I do not think that the employed in Sheffield would take their view.

Mr. Hardy

rose—

Mr. Howell

I shall give way in a moment.

The truth is that rates are the worst tax burden on industry today and the destroyer of jobs.

Mr. Snape

Nonsense.

Mr. Howell

I am interested in that view. I wonder whether it is the view of industry throughout the country. I do not think that it is. We shall listen carefully in the debate to how the Opposition parties explain their alliegance to policies that are, without question, the engines of unemployment.

Mr. Hardy

The Secretary of State will be aware that the rates in Rotherham are lower than those in Sheffield and that the rate of unemployment in Rotherham is higher than that in Sheffield. He brushed over this point when I first sought to intervene. He said that old people and children would not be affected. Does he not appreciate that a substantial increase in fares will mean that fewer people will use public transport and that services will be reduced? Then what happens to the pensioner, the child or the person who cannot afford to run a motor car?

Mr. Howell

I said that concessionary fares for the elderly and disabled would not be affected. I went on to say that high rates not only on the domestic householder but on shops and businesses affect everyone hard. Above all, they affect the chances of new jobs and employment. The hon. Gentleman has fought as hard as any hon. Member to overcome the problems of unemployment. If he thinks about the effects of excessively low fare policies he will see where the real aims should lie. Indiscriminate subsidies are not an effective way of meeting environmental and social objectives. General subsidies to fares do not reduce congestion because they attract few car drivers to use buses. Nor are generalised subsidies, unlike concessionary fares, a good way of securing welfare objectives since they help rich and poor alike.

Those words come from the 1976 Crosland transport paper. They clearly put the case for the Bill today and the case against the views of those who argue that there should be open-ended revenue subsidies. Why does Labour dismiss those arguments today? I think that I know the answer. It is that it is now politically opportune to go flat in the face of reality, common sense and the interests of employment and industry.

I have discussed at length the aims of the Bill. However, I shall say a word about the key clauses and I shall also refer to clause 11, which concerns the write-off of the National Dock Labour Board's debt.

The central clauses of the Bill create a process that will lead to the setting of a level of expenditure up to which an authority can give grant lawfully. Clause 4 sets out the procedures for the authorities. Their general duties are unchanged, but the Bill introduces a new requirement to consider and approve, with or without modifications, the executive's plans. I hope that I have made that point clear.

When considering the plan or any alternatives the authority has to take account of costs, benefits and demand and of my advice to the executive. It has to achieve a proper balance between the interests of ratepayers and of transport users.

Mr. Ronald W. Brown (Hackney, South and Shoreditch)

The Secretary of State is placing an obligation on the executive. What obligation is there on him when he says that he will consider the criteria for determining whether the executive's plan is reasonable?

Mr. Howell

I answered that question earlier, and pointed to clause 4(6). The criteria must be based clearly on the transport policies and plans of the authority, on the evidence of local needs in those plans, on considerations of national expenditure, and on the authority's present policies on fares and levels of services. In setting the protected expenditure levels the Government have made it clear that they do not expect authorities who have for years been pursuing high rates and excessively low fares subsidies to be able to put things right in one day or overnight.

The protected expenditure levels are set considerably above the transport supplementary grant levels for last year and involve a gradual move towards balanced and fair subsidy levels.

Mr. Jay

rose—

Mr. Howell

I have given way to the right hon. Gentleman already. He will have a chance to make a speech, and I am sure, knowing him, that he will do so.

Clause 5 provides that the authority shall have no powers to pay grants except in accordance with the processes outlined in the Bill. Payments by the authority to the executive of revenue grants up to the guidance level or protected expenditure level will be lawful. Beyond that level, payments may be challenged as at present by a ratepayer, rating authority or auditor.

Mr. Robert Hughes

The explanation that the Secretary of State has given presupposes that the first step in drawing up the plan is the issue of advice to the executive by the Secretary of State. What criteria will he give it for drawing up the plans?

Mr. Howell

The hon. Gentleman is wrong. That is not the first step. The first step is for the passenger transport executive to put forward its three-year plan, updated each year, to the authority. As we are starting late in the year, it is important that the authorities should have the provisional figures of the protected levels of expenditure as early as possible. That is an important consideration in bringing forward the Bill and the White Paper as soon as possible. They are provisional figures until the Bill becomes law. It is absurd to imagine otherwise.

Mr. Hughes

Before the Secretary of State leaves that point—

Mr. Howell

I have not developed the point yet.

Mr. Hughes

I do not believe that the Secretary of State knows his Bill. It states clearly that the executive must take his advice when drawing up its three-year plans on a rolling programme. If he does not give his advice to start with, how can it draw up its plans?

Mr. Howell

The hon. Gentleman asked me about the first steps in the process. In a full year the first steps will be for the executive to put plans to the authority and for the authority to discuss them and take account of my advice.

In the present year, provided that the Bill receives the Royal Assent, the new arrangements will take effect at the start of the next financial year—1983–84.

Mr. Les Huckfield

Oh!

Mr. Howell

I shall explain the point that the hon. Member for Aberdeen, North (Mr. Hughes) has not grasped. I have announced in the White Paper provisional figures for 1983–84. In setting those, I have taken account of the information in the transport policies and programmes submitted by the authorities.

Mr. Les Huckfield

Nonsense.

Mr. Howell

I have also taken account of the national picture. I have considered the present and past policies of the authorities and the specific benefits that would seem to flow from the grant. The hon. Member for Nuneaton (Mr. Huckfield) was interested in how the figures could be in the White Paper and why the local authorities should wish to know about them now. The earlier they know the figures, which must be provisional by definition until Royal Assent, the more quickly they can take them into account as a relevent consideration in formulating their budgets for their transport executives for the coming year. It makes sense that the earlier they know the figures, the more they can take them into account.

Mr. Les Huckfield

rose—

Mr. Howell

I have given way many times. Hon. Members will wish to have considerable discussion of the Bill. They will all have an opportunity to make speeches, and it is right that I should bring my remarks on the detail of the Bill to a close so that hon. Members have an opportunity to comment.

Clause 7 places a duty on the authorities to review the organisation of their executives immediately and thereafter when required by me.

Clause 8 requires the executives to consider and invite tenders for activities wherever possible. The authority can also direct the executive to invite tenders for particular activities.

Clause 11 takes us away from transport subsidies. It deals with the write-off of £23.8 million of the National Dock Labour Board's debt. That does not represent further special assistance to the ports of London and Liverpool, but benefits port employers covered by the national voluntary severance scheme as a whole. The net effect of writing off that debt is to ease the burden on all scheme ports. I hope that the House will support it, but the Under-Secretary will have more to say about that later.

Mr. Terence Higgins (Worthing)

Will the amount of interest payable by authorities be reduced and will the overall effect be beneficial for private employers on the south side of the river Thames as a result of clause 11 and subsequent clauses?

Mr. Howell

The benefit will be an easement of the burden of all ports involved in the national voluntary severance scheme. If my right hon. Friend is referring to ports in the scheme, their burden will be eased by the writing off of the debt which arises from severances that took place in 1981. If they are not in the scheme it will make no difference to them.

There are no grounds for saying that the Bill attacks local democracy, as some have asserted. It does not. The Bill provides what the authorities were asking for. It does not tell them what to do, but it certainly makes them more specifically accountable to the public who pay for subsidies in the end, in one way or another. It is regrettable if the Opposition feel that that approach is wrong.

In London there is now widespread support for going further and for removing London Transport from the control of the GLC. I am now reviewing the organisation and structure of transport in London following the report of the Select Committee on Transport on that subject. My first priority has been to tackle the confused law on subsidies, the growing threat of instability and the use of urban transport for irresponsible political experiments.

Mr. Stanley Cohen (Leeds, South-East)

rose—

Mr. Howell

Meanwhile, the Government are examining whether a more fundamental reorganisation is required in London. Our proposals will be set out in response to the Select Committee report.

I am anxious to see the development of closer co-operation between British Rail and London Transport. I welcome the initiative that has been taken on through ticketing, easier interchanges and other such matters. I shall give every assistance to further moves in that direction.

Since last July I have repeatedly offered to discuss these proposals with the association of Metropolitan Authorities. We have talked to the association and explained all the aspects. So far73x2014;a matter the Opposition may have overlooked—the Association has refused repeatedly to let its officials work with mine on better procedures or to discuss the details of our proposals. I see no future in such an attitude. I hope that it will now change.

There is plenty of time over the next few months to discuss the details of the procedures and to develop mutually helpful methods to carry them through. I am glad to say that the authorities are to see me again later this week. My door is open if an individual authority wishes to discuss its position.

The Bill is not an attack on local autonomy, but the policies of high rates and ultra-low fares that Opposition Members espouse are an attack on jobs. Not long ago all the parties agreed that balance was vital and that excessive fare subsidies damaged transport, national economic aims and life in our cities. In the past two years common sense has gone out of the window. The GLC leaders, with full support in the House from the Labour Party, have opted for instability. It is never easy to know exactly where the centre parties stand, but they have thrown over the former policies of the right hon. Member for Stockton. Here, as elsewhere, they are busy promising everything for nothing.

The Bill is a step towards stability and better urban transport and away from the policies that all parties once recognised, and still know in their hearts, damage transport and our cities. Other steps will be needed, but the Bill is on the right road and I ask the House to support it.

5.21 pm

Mr. Albert Booth (Barrow-in-Furness)

We listened to the Secretary of State with growing anxiety about the way in which he conducts his office. He spent two-thirds of his speech wrongly attributing policies and motives to Labour Members, late Members and ex-Labour Members who are now in other parties.

Mr. David Howell

One attribution was to someone who is still a distinguished member of the Labour Party and not a refugee to another party, although I could understand it if he were—the right hon. Member for Sheffield, Park (Mr. Mulley), a former Minister for Transport. On 10 June 1975 he issued a detailed statement headed Bus revenue must cover costs which went on in detail to urge the danger of bus revenues getting out of control. That was when overall expenditure was about £100 million a year. I ask the right hon. Member for Barrow-in-Furness (Mr. Booth) to acknowledge that he was wrong.

Mr. Booth

I was not wrong. I acknowledge that one is a current Labour Member, but I believe that the others are the late Tony Crosland and the right hon. Member for Stockton (Mr. Rodgers). In any case, some of the views expressed are so out of date that it is nonsense to mention them now.

The Bill is part of a simultaneous attack on metropolitan local government powers and on public transport standards. The White Paper proposals came out simultaneously with the Bill. I know of no precedent for dealing with a highly controversial matter in that way.

For the Secretary of State to say that he is prepared to discuss the matter with the metropolitan authorities flies in the face of his actions. Having seen the White Paper, the metropolitan authorities now wish to make submissions but he is not prepared to listen to them. He invites the House to endorse the principles on which he is proceeding to legislate before having discussed the White Paper with the Association of Metropolitan Authorities.

The contents of the White Paper are highly controversial and in part contradictory. They raise massive and complex problems for local government. The right hon. Gentleman is acting arbitrarily and insensitively towards local authority elected members. He seeks the Bill's Second Reading without consultations, riding roughshod over their wishes and proper interests. He refuses to listen to them at this stage and seeks to discount their special local knowledge of transport problems and considerable experience of planning transport and to ignore the mandate that they have secured from the electors. His are the actions of a member of a Government who have made up their minds and are deaf to all argument.

Mr. Matthew Parris (Derbyshire, West)

The authorities repeatedly pressed my right hon. Friend to say what level of subsidy would be legal.

Mr. Booth

I believe that the Secretary of State was wrong and that metropolitan authorities did not ask him to legislate, although the GLC did. That can be checked, and if I am wrong I shall apologise to the House. If the Secretary of State is wrong, I hope that he will apologise.

I appeal to the Secretary of State not to proceed with the Bill at this stage, but to allow a proper period of consultation on this highly controversial matter. Difficult and important issues are at stake. If he does not agree, he must at least allow proper time between Second Reading and Committee for consultation and agree that he will consider major amendments to the Bill if they are shown to be necessary.

In the White Paper and today, the Secretary of State makes three claims: first, that the Bill will end the legal uncertainty for the metropolitan authorities and the GLC; secondly, that it will make it easier for public transport authorities and ratepayers to judge the benefits and effectiveness of public transport subsidies; and, thirdly, that it will enable public transport operators better to plan operations. The claims are fallacious or nonsense.

The right hon. Gentleman's first claim is that the Bill removes the legal uncertainties caused by the House of Lords judgment. In that judgment Lord Wilberforce stated: The courts will give full recognition to the wide discretion conferred upon the Council by Parliament and will not lightly interfere with its exercise. But its actions, unlike those of Parliament, are examinable by the courts, whether on grounds of vires, or on principle of administrative law … It makes no difference on the question of legality … whether the impugned action was or was not submitted to or approved by the relevant electorate: that cannot confer validity upon ultra vires action.

Having examined a number of matters, Lord Wilberforce concluded that the GLC action was ultra vires or unlawful and that it had misinterpreted its powers under the 1969 Act. His interpretation was that the 1969 Act did not confer powers on the GLC to run a cheap fares policy. That is one of the issues on which the Secretary of State was called upon by the GLC to legislate. It wanted clarification beyond a shadow of a doubt of what it had legal powers to do in running a transport fares policy.

Mr. Ronald W. Brown

The GLC wanted the same powers as all other local authorities enjoyed under the 1968 Act.

Mr. Booth

The hon. Gentleman is right. He puts the argument more precisely than I did. The GLC wanted what it believed were the powers given by the 1968 Act for public transport. The Lords judgments, including Wilberforce's judgment, not only threw the legality of the powers in that Act into doubt, but questioned whether those powers could be circumscribed by what was regarded as a fiduciary duty. There was a need to legislate on both those issues. That is not in question, but the Secretary of State is not amending the 1968 and 1969 Acts to deal with those problems—far from it. He will leave the gravest doubt about the role of the courts in relation to local government.

Wilberforce made it clear—no one will disagree with this—that if a matter goes to a court, the court will have no regard to the manifesto on which the metropolitan authority or the GLC was elected. It will have no regard to whether the authority was elected by a thumping majority, and it will have no regard to the political or democratic process by which we determine who will sit in local government and take decisions on transport policy. The courts will continue to do as they did in the Lords judgment—interpret statute law. As the Lords judgment has shown, that statute law is defective and it must be dealt with.

When the political argument about "Fares Fair" was taking place in London, no one from the Conservative Party suggested that it was an illegal policy. Tory members said that it was unwise, or that in their political judgment it was wrong, but no one said that it was illegal. It was only when the GLC put that policy into effect that Bromley came along and said, "We have been defeated by the rules of the game; let us go to the court and see if we can get the rules changed." That is why we need to change the law.

It is not necessary to read clauses 4 and 5 to see that the Secretary of State is talking nonsense when he says that the Bill makes the legal position clear. I invite the Secretary of State and the House to read paragraph 19 of the White Paper. It says that legal challenge of the reasonableness of the subsidy on transport grounds is unlikely to succeed where the plan has been produced within the spirit of the new system and the subsidy is within the level indicated by the Secretary of State. It is "unlikely to succeed". There is no certainty about it. The paragraph continues: Whilst it will not necessarily be unlawful for an Authority to pay a subsidy in excess of the indicated level, if they do they will not have the protection of the new provisions. The councillors will know they run the risk of surcharge. I challenge anyone who understands the common-sense meaning of the English language to convince me that a paragraph of three sentences that contain the phrases, "unlikely to succeed", "not necessarily be unla[...]ful" and run the risk of surcharge describes a Bill that clarifies the law.

Mr. Cohen

Does my right hon. Friend agree that the Secretary of State belongs to a party which, during the 1979 election campaign, compaigned on the slogan "Set local government free" and that paragraph 19 utterly contradicts that slogan?

Mr. Booth

I agree with my hon. Friend. The slogan should have been "Put local government in the courts." That is what the Government have done. The legal side of this part of the Bill is riddled with doubts. It is much more a lawyers' paradise than a clarification measure.

The Secretary of State claims that the Bill will make it easier for transport authorities and their ratepayers to identify the benefits of transport subsidies. It puts the PTAs, via the transport executives, in the financial straitjacket of the Secretary of State's guidance. They can act legally only if they act in accordance with that guidance. They cannot demonstrate by running policies that do not conform to the guidance. They cannot even put such measures before their electorate with any certainty of being able to carry them out legally. The Bill takes away that right. It is nonsense to maintain that the Bill will make it easier to identify the benefits. Authorities cannot even show the benefit of higher expenditure without running the risk of surcharge. That hardly makes it easier to demonstrate.

I recognise the serious point that underlies the Secretary of State's contention that there is a case for identifying the benefits of public transport subsidy. The right hon. Gentleman will recall that he and his Department use different yardsticks for different forms of transport expenditure. There is a cost-benefit analysis to justify the roads programme, but there is none when it comes to subsidising public transport.

What credit is given to the value of travel time savings that are made when there is efficient public transport? What value is given to the benefit of increased mobility that public transport services confer on many people? What worth has reduction of accidents that results from a good public transport system? Such a reduction of accidents would be taken into account by some people when compiling a cost-benefit analysis of the road programme, yet it is not taken into account when it comes to subsidising public transport.

What benefit is given, and what financial values attach, to the energy cost savings of public transport? What attempt is made to differentiate properly between real and transfer costs when subsidising public transport? Switching support from fares to rates and taxes does not raise transport costs, although other benefits may accrue.

Mr. Peter Fry (Wellingborough)

I agree with much of what the right hon. Gentleman has said. If it is so important to assess the benefit of bus services, is it not also right to test the benefit of railways? Does he agree that we should compare subsidies that are paid to the railways with those that are paid to the buses?

Mr. Booth

Yes. One could apply that argument throughout public transport expenditure. However, I was trying to make a simple point. One cannot claim that the Bill enables ratepayers and PTAs to judge the cost effectiveness of what they are doing when the Bill imposes restrictions and financial limits that do not apply to other parts of the Department of Transport's budget.

Mr. George Cunningham (Islington, South and Finsbury)

Is the right hon. Gentleman aware that Camden has done a careful study of the relative subsidies, by all means of transport, to different parts of Greater London? Although there can be no tremendous accuracy in the results, the study shows that Bromley receives a higher subsidy per head than any other part of London. Does he agree that that is ironic?

Mr. Booth

I was not aware of that, and I am grateful to the hon. Gentleman for drawing it to my attention. I assure him that before the Bill goes into Committee I shall get a copy of that study and have a close look at it.

If we want to judge the cost effectiveness of the subsidy systems used by the metropolitan authorities and the GLC, the best indication we have is the figure for the fare box ratio against grant per head of population. In the South Yorkshire authority area, which has run a steady cheap fares policy—there have been no fare increases since 1975—the cost effectiveness has been extremely high. In 1979 South Yorkshire obtained a public authority grant of £29 per head of population. That enabled it to reduce its fares to 35 per cent. of the total cost of running its bus services.

Zurich, which had a higher grant of £37 per head, still had to raise 65 per cent. from the fare box. Berlin, with a £77 grant, still did not achieve the fare box ratio of South Yorkshire. It still had to raise 39 per cent. from the fare box. Although Paris had a £68 grant—and I admire some of the things that the French Government and the Paris authorities have done—its fare box ratio was 44 per cent.—considerably above South Yorkshire. The same is true of Stockholm. Those are all completely fair comparisons if we wish to judge cost-effectiveness.

Mr. Edwin Wainwright (Dearne Valley)

In addition to what my right hon. Friend has said about the efficiency of South Yorkshire county council's transport schemes, the county council also faces the electorate, and on the last occasion was returned with an increased majority. That is surely in line with the Secretary of State's view on the freedom of democracies to decide who should govern the country and how it should be governed.

Mr. Booth

My hon. Friend can judge as well as I can the Secretary of State's intentions about the role of local authorities and democracies. I agree with my hon. Friend that there is no evidence that the South Yorkshire policy has been carried out other than by seeking a mandate from the electorate.

The Secretary of State said that the Bill would enable operators to plan their public transport services. It requires the transport executives to prepare a three-year plan. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) was right when he said that it was impossible for the PTEs to produce those plans until the Secretary of State has issued them with detailed guidance on how they should carry out their duties.

I direct the right hon. Gentleman's attention to clause 3(5), which states: In preparing the plan the Executive shall take into account any advice given by the Secretary of State", and adds that the Executive shall take into account any advice given by him as to the method of the determining the matters referred to in paragraphs (a) to (c) of subsection (4), which details the plan.

There is no doubt that as the Bill is drafted the process begins with advice and direction by the Secretary of State as to manner and financing levels. Before the authorities have even begun the three-year process the Secretary of State has told them what he thinks they should have for 1983–84. That is contained in the annex to the White Paper. As a result, the local authority calculations have been based on those figures.

Greater Manchester has calculated that its fares will have to increase by 15 or 23 per cent., depending on the passenger loss that it is prepared to sustain—either 4.5 or 7 per cent. Merseyside has estimated that it will need a fares increase of 35 to 40 per cent. and that it will sustain a passenger loss of about 10 per cent. The South Yorkshire PTE and PTA have estimated a fares increase of 200 to 400 per cent.

I am glad that the Under-Secretary is as concerned as I am about this, because no authority in the country has experience of what happens to ridership levels following a fares increase of 200 to 400 per cent. South Yorkshire is certainly not prepared to estimate what it will be. Tyne and Wear, working on a Government subsidy of £18 million, has calculated that it will need a 20 to 25 per cent. fares increase and that it will sustain a 6 per cent. passenger loss. The West Midlands will require a fares increase of 22 per cent. and suffer a 6.6 per cent. passenger loss. West Yorkshire will have to increase its fares by 20 per cent. and will sustain a 6 per cent. passenger loss.

Nevertheless, a serious case can be made for attempting to plan public transport in local authority areas, certainly in the metropolitan and GLC areas, on something longer than a one-year basis, but that stability cannot be achieved at the expense of democratic determination. If there is a change in the make-up of a local authority, it must have the right to change the passenger transport plans. Stability in a democratic society can be achieved only if there is electoral support, yet the Secretary of State is wrecking the stable policy established by South Yorkshire. That policy has been eminently successful, whether it is judged on cost effectiveness, an increase in ridership or an increase in service.

In determining public transport finance—the Bill will not change this—the PTAs must take into account not only the transport supplementary grant available but the grant-related expenditure assessments and the targets for current expenditure. All three affect expendable charges and rates. I am told by people with much more local government experience than I, who have a right to be listened to, that the grant-related expenditure assessments and targets for current expenditure are not noted for their stability. On the contrary, they are regarded as highly volatile and unpredictable in their effects over a three-year period The Secretary of State is therefore placing serious limits on what the authorities can plan.

Mr. Robert C. Brown

The Minister is completely destroying any forward planning that has been carried out. For example, Tyneside has spent almost £700 million on a new metro system, which is not yet complete. Nevertheless, by integrating the road, rail and metro transport systems, Tyneside has increased its ridership by 2.3 per cent. as a direct result of that huge capital investment. It was looking forward to a further large increase in ridership, but as a result of the White Paper and the Bill it will lose about 6 per cent. of that ridership.

Mr. Booth

My hon. Friend has raised an important issue. In the metropolitan areas, long-term investment of the type to which he referred involves anticipation of levels of ridership commensurate with the overall fares policy and the policy of integrating the various modes of transport. That will be wrecked. The Bill will mean an end the low fares policies that have been developed in recent years. The high fares that it could bring about could lead to further traffic congestion, more road accidents, more pollution of our city atmospheres and more business time lost as people are frustrated in their attempts to get to and from work.

It is of equal, if not greater, concern to the Opposition that high fares will hurt the poor and have a much more adverse effect on women than on men. They will also affect ethnic minorities and the elderly. Seventy-three per cent. of bus passenger mileage in this country carries women, the young and the old. The Bill was born out of spite and nurtured in malice against authorities which have shown conclusively that the application of a monetarist policy to public transport is nonsense. If the Bill becomes law, the rights of metropolitan authorities and the GLC to plan public transport will be removed. Their progressive plans will be financially strangled. The Bill sounds the death knell of local government freedom in this crucial area of public service. I ask the House to reject it.

5.53 pm

Mr. Matthew Parris (Derbyshire, West)

Before I deal with the public transport provisions of the Bill, around which the debate seems likely to centre, I should like to ask my right hon. Friend a question about the dock labour voluntary severance scheme. I hope that he will be able to ensure that it is dealt with in the reply to the debate. In asking this question, I have as much in mind the concerns of my hon. Friend the Member for Faversham (Mr. Moate), who is unable to be present, as I have my own. I understand that what are quaintly called the private wharfingers on the Thames are obliged, because they are members of the scheme, to pay a levy on tonnage towards it. I take it from what my right hon. Friend said that, because the Government propose to write off the debt, this levy will be reduced. That will be very welcome to the private wharfingers, but it seems to me and to my hon. Friend that there is no reason why they should pay any levy, because they have not benefited and are unlikely in the future to benefit from the severance scheme. It seems unfair. The Bill slightly mitigates the unfairness but does not remove it. I shall be very grateful if the Minister will comment on that. The right hon. Member for Battersea, North (Mr. Jay) said that there had been no time to consult outside interests. I do not know what his mailbag is like, or that of my right hon. Friend, but over the last nine months or so my mailbag has given me a good idea of the views of outside interests. There are two main points of view.

First, those who are directly involved in public transport undertakings, particularly bus undertakings, have felt—whatever the right hon. Member for Barrow-in-Furness (Mr. Booth) may have said—the deepest anxieties about the level of subsidy that is permissible after the Lords judgment. That point of view has been expressed to me repeatedly.

Secondly, my constituents in Sheffield, many of whom are commercial ratepayers, have expressed dismay at the level of commercial rates that they must pay to maintain the South Yorkshire passenger transport executive. To that extent, therefore, the Bill answers representations received from the public.

Mr. Sydney Bidwell (Ealing, Southall)

Surely the hon. Gentleman, whom I regard as a progressive, up-and-coming young Tory, is not suggesting a procedure whereby White Papers and Bills appear simultaneously.

Mr. Parris

In this place compliments of that kind are double-edged, but I am grateful for the spirit in which it was intended. I was making no point about parliamentary procedure. I was referring merely to the Government's responsiveness to what I believe to be public opinion and, indeed, expert opinion on this subject.

The right hon. Member for Barrow-in-Furness said that switching the burden of public transport costs to fares and away from subsidy does not of itself reduce the cost of public transport. That is absolutely right and it is a fair point, but an undertaking that must depend to a large extent on the money that it can raise from its customers has an inducement to be more efficient and to offer better services than one that can simply claim any deficit from the public purse at the end of the year. Therefore, in an indirect way, persuading local public transport undertakings to depend more upon fares and less upon subsidies may encourage them to become more cost effective.

The right hon. Gentleman referred to the fact that Bromley receives more subsidy per head than many areas of inner London, but that is because Bromley has no underground railway and must therefore depend entirely upon the buses, and it is the buses that lose money. Ironically, the areas that must depend upon the buses and thus have an inferior public transport service will appear from the books as absorbing a greater proportion of public subsidy than those that enjoy better public transport because they have access to the underground railway.

The right hon. Gentleman said that the South Yorkshire public transport system was highly cost effective. That is partly due to the geography and population distribution of the area. Before concluding that public subsidy makes a business more or less cost effective, one would need to know whether the South Yorkshire service has become more or less cost effective over the years in which it has been absorbing steadily more public subsidy.

Ms. Harriet Harman (Peckham)

How can buses and tube trains running half empty make the service more efficient?

Mr. Parris

Clearly, that cannot make the service more efficient, but it does not necessarily mean that the vehicles should be filled at any cost. They could be filled at enormous cost by making the service free or by offering people inducements to ride in them, and it might be possible to show some theoretical cost effectiveness on that basis, but it would not necessarily be a sensible approach.

In South Yorkshire, public subsidy accounted for about 9 per cent. of the public transport costs in 1974 and about 78 per cent. in 1982. It would be interesting to know whether, in those years during which the subsidy increased so enormously, the cost effectiveness of the service increased very much or indeed at all.

The right hon. Gentleman referred to the mandate given by the electorate, but 53 per cent. of the rates received by South Yorkshire county council are from commercial and industrial ratepayers, and not from those who can actively take part in the voting process. I shall return to that problem later. The right hon. Member for Barrow-in-Furness also said that the fares that South Yorkshire is obliged to charge may have to be increased by 200 per cent. Such an increase would raise the cost of a three-mile bus journey from about 7p to about 14p. Fourteen pence is still tolerable.

There is an irony about how much subsidy is legal, because in the spring I asked the then Under-Secretary of State, my hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) whether he would resolve public transport undertakings' uncertainty about the amount of public subsidy that was lawful. When I said that such uncertainty existed, I was greeted by "hear, hears" from Opposition Members and the press described me as "wet". My hon. and learned Friend said that the undertakings need not be in any doubt. I believe that there was uncertainty and that the Bill now resolves it. It is a good, clear and simple Bill that is extremely restrained in the powers that it takes.

I have listened with increasing incredulity to the language used by hon. Members and by lobbying interests outside the House to describe those powers. They have used words such as "savage", "vicious", "spite", "malice", "death knell", "complete destruction" and "out-and-out attack". Such words were used time and again to characterise a Bill that still permits a metropolitan bus service to take in fares only 13s 4d—words that still mean something to me—for every pound that the undertaking spends. The provision does not justify descriptions such as "death knell" and "savage". If such words are used to describe the Bill, what is left in our language to describe the deprivations of the Black Death, the ravages of the Huns or the horrors of Auschwitz?

It is often suggested that Conservative public transport policies are dictated by capitalist classical economics or by free market economics, but that is not so. London's transport problem is one of excessive demand for road space over the supply available, at least during peak periods. If we believe in a free market, the cost of road space should be allowed to rise either until demand equals supply or until someone finds it profitable to build new roads. If our roads became more expensive for private motorists, public transport would not be a problem. People would be obliged to use public transport because they could not afford to run their cars. That is a red-blooded Conservative transport policy, but it is not the one that we are following. My right hon. Friend the Secretary of State acknowledged the considerable problem of getting from A to B in London during the rush hour. He did not pretend that the Bill would solve the problem. London still has enormous transport problems to which no Government have yet turned their attention. I hope that this Government will do so one day.

Part of the Bill lays upon metropolitan undertakings the responsibility to ask whether some of their transport undertakings could be better managed separately. That sounds a good idea in terms of Conservative ideology. However, I ask the Secretary of State in what way metropolitan counties—by philosophy opposed to the idea of separate management for any of their undertakings—can persuade themselves honestly to consider some of these ideas. Now and again the metropolitan counties are obliged to examine the problem, but it is easy for the undertaking to say that it has considered the idea and decided that it makes no sense. I hope that the Bill may persuade metropolitan counties to do what they may not wish to do. I shall be interested to have my right hon. Friend's reassurance.

My constituency is 17 miles from Sheffield. We pay our national taxes in Derbyshire and my constituents in Hathersage, Grindleford, Baslow, and Froggat pay commercial rates to Sheffield to support a South Yorkshire bus service that will consume £60 million this year in public subsidy. My constituents have no vote in South Yorkshire and they demand that the Government stop South Yorkshire county council experimenting with their cheque books and their struggling businesses in Sheffield. The cost of South Yorkshire's public transport obligations to an employee in the British Steel Corporation is £1,000 per annum.

Mr. Hardy

The hon. Member for Derbyshire, West (Mr. Parris) seems to be more concerned with South Yorkshire than with Derbyshire, and almost all his constituents seem to be business men operating in Sheffield. However, the burden on the ratepayers in the metropolitan county of South Yorkshire, as opposed to the ratepayers in the shire county of Derbyshire, has been affected much more severely by the Government's rate support grant policy than by the county council's transport support policy. Does the hon. Gentleman agree that those from South Yorkshire who wish to visit Derbyshire do so with increasing reluctance because of the high public transport fares in that county?

Mr. Parris

The people of South Yorkshire—who are very welcome in Derbyshire—are travelling in a Labour-controlled county. Derbyshire county council has a sensible attitude towards public transport. It provides some subsidy for rural bus services and is in no danger of falling foul of my right hon. Friend's requirements. Most Labour-controlled county councils have sensible attitudes towards public transport—the same attitude that Labour Members had when they were in Government.

South Yorkshire has conducted an experiment and, as one who takes an academic as well as a practical interest in public transport, I am almost glad that the experiment took place. I watched it with great interest. However, the experiment failed. During the eight years when the subsidy increased, there was hardly any increase in the fare-paying ridership of the South Yorkshire passenger transport executive. There has been an increase in concessionary riders, such as retirement pensioners, but that category is not affected by the Bill. Those who are affected by the Bill—the fare payers—are availing themselves of South Yorkshire's bus services no more now than they did eight years ago, although there has been a slight increase of 2.6 per cent. A policy that now costs £60 million a year and that has failed to attract more people back to the buses cannot be successful.

Mr. Les Huckfield

If the hon. Member for Derbyshire, West (Mr. Parris) does not consider it a successful policy, will he examine the comparable statistics for West Yorkshire, which is next door and has many features similar to South Yorkshire, and where during the past 11 years there has been a 38 per cent. reduction in passenger ridership as compared with a 2.6 per cent. increase in South Yorkshire? That makes South Yorkshire's policy successful.

Mr. Parris

There has been a reduction in public transport ridership all over Britain. One reason for that reduction, which may be unwelcome to Labour Members, is that there may have been a reduction in demand for public transport. Evidence from studies that have been conducted in South Yorkshire shows that where ridership is maintained or occasionally slightly increased, it is achieved not by attracting people away from cars—there is little evidence that cars are used less in South Yorkshire than elsewhere, or that people do not buy cars in South Yorkshire—but by making it so cheap to use public transport that it is used much more than might otherwise be the case. That is not necessarily a sensible Government policy.

It has been said that the Bill interferes with local democracy. The Bill responds to one of the flaws in the theory of local democracy. If most of a local authority's funds were raised from rates and if most of the rates came from people with a vote in local elections, we should at least have the opportunity of testing the theory of local democracy in transport policy, but less than half of what an authority spends is raised from rates, and less than half of its rates are raised from domestic ratepayers. The general taxpayer and the industrial ratepayer shoulder most of the burden. It is right that their voice should be heard. It is heard through Parliament, and it will be heard through this Bill, which comes not a moment too soon.

6.10 pm

Mr. Peter Snape (West Bromwich, East)

The hon. Member for Derbyshire, West (Mr. Parris) is fairly well known for his prowess as a marathon runner. If the policies on which the Government have embarked, and which the hon. Gentleman appears to endorse, continue much longer, my constituents may have to accompany him on his training runs, because there will be precious little public transport left, either in the West Midlands or, I suspect, in South Yorkshire. That will be the result if the policies outlined in the White Paper and in the Bill are carried out.

The Bill and the White Paper are similar to the speech made by the Secretary of State. They are negative and defeatist in their attitude towards public transport. The Bill starts with the assumption of an inevitable decline in public transport. It was outlined in the White Paper, in particular in paragraph 4, with what appeared to be some smug self-satisfaction. The White Paper set out the prospects of falling levels of bus use and increasing costs of public transport, and an inevitable expansion in private motoring as a result of the decline in public transport.

For the Secretary of State in particular, and for the Conservative Party in general, the decline in public transport is not a matter for regret. They appear to believe that it is inevitable. Because they believe it to be inevitable, they feel that the process has to be helped along by legislation, such as the Bill now before the House. As we have heard in the debate—particularly in the very good speech made by my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth)—such a decline is not inevitable if proper transport policies are pursued.

There has been an attempt to pursue proper transport policies with the metropolitan county areas. As my hon. Friend the Member for Nuneaton (Mr. Huckfield) pointed out in an intervention in the speech of the hon. Member for Derbyshire, West, the South Yorkshire experiment—if that is the right term—is a proven success when compared with the falling use of public transport in the adjoining county of West Yorkshire, which, until recently, was controlled by the Conservative Party. It is reasonable to assume that West Yorkshire fell to the Labour Party at the council elections because of dissatisfaction by the people of West Yorkshire at the policies of high fares and rotten services pursued by the previous Conservative administration. The fact that that county council is now controlled by the Labour Party surely shows that at least some of the electors of West Yorkshire were attracted by the public transport policy in the adjoining county and cast their votes accordingly.

The transport policy pursued by the South Yorkshire county council is the most dramatic example of what can be achieved by a cheap fares policy, but there are other examples. The Labour Party took control of the West Midlands county council at the county council elections. The main plank of its electoral platform was the cheap fares policy that it wished to pursue. In the fairly short time in which it was allowed to pursue that policy, the West Midlands county council achieved a 7 per cent. increase in bus passengers. That was achieved in six months. The hon. Member for Derbyshire, West might argue that they were not new bus passengers but passengers who were travelling by bus more often because the fares were cheaper.

The Conservative Party continually tells us about the plight of ratepayers. I concede that both domestic and business ratepayers in the major conurbations have had to pay fairly large rate increases in recent years, but the main reason behind those increases—the alteration of rate support grant distribution—typifies the essential dishonesty of the Government in their approach to such matters. Since the Government were elected in 1979, the balance has been tilted away from the metropolitan county areas—presumably because the people in those areas habitually vote Labour—towards the shire counties, presumably to reward the voters there for—unreasonably, in my view—choosing to vote Conservative.

The hon. Member for Derbyshire, West was correct when he said that many business ratepayers are expressing a great deal of concern and are apt to try to pin the blame for rate increases on the cheap fares policies being pursued by Labour-controlled authorities. It would be surprising if the position were any different. After all, the Conservative party has spent a considerable amount over the past 18 months or so trying to persuade business ratepayers—and, in some instances, domestic ratepayers—that the reason for their increased rate bills has been the spendthrift nature of Labour-controlled local authorities. The fact that business ratepayers are pursuing that philosophy shows either that the Conservative Party's propaganda is having an effect or that the business ratepayers are gullible enough to believe it.

Until about 12 months ago, the bulk of the letters that I received from business ratepayers made little, if any, mention of the cheap public transport policies pursued by Labour-controlled local authorities, including my own, and made a much greater protest about the overall economic policies being pursued by the Government.

The White Paper states that the not inconsiderable sum of £300 million is being paid in public transport support to the metropolitan authorities affected by the Bill. As a proportion of central Government's total expenditure on local government, the £300 million amounts to just under 2 per cent. The Secretary of State has no justification for claiming that the main reason for rate increases, for inflation and for job losses is the cheap fares policy that Labour-controlled local authorities have tried to follow, when the global amount involved is less than 2 per cent. of total central Government expenditure on local government.

I do not know whether the Secretary of State wrote the speech that he made this afternoon. If he did, I hope that the Cabinet reshuffle of which we read in the newspapers will take place sooner rather than later. If he did not write it, when the reshuffle takes place and he departs, he should take with him the person who wrote the speech. It was a shoddy ragbag of innuendo and half-truths, and demonstrated a complete lack of understanding of the problems of public transport in our major conurbations. As my right hon. Friend the Member for Barrow-in-Furness said, it was a direct attack on local government democracy. Right hon. and hon. Members should not be too surprised at that. We sometimes give the Conservative Party a little more credit for intelligence, common sense and humanity than we should.

When one recalls the Local Government Act 1972, it should come as no surprise to us that, once again, the Tory Party, which is supposedly dedicated to decentralisation, should be concentrating the decision-making processes, which should by rights be made at local government level, on Whitehall. After all, the Local Government Act 1972 set the trend. The Secretary of State, who was, I believe, a relatively junior Minister in the previous Conservative Administration, will claim that he had no responsibility for that Act; but before he points his finger at the Labour Party and comments on its change in attitude—in my view, a refreshing change—towards public transport subsidies, he should look back at his own political career and the recent history of the Conservative Party.

The decline in public transport use is not inevitable; rather the reverse. Sensible and proper policies followed by central Government would go a long way towards achieving better public transport. I suggest that the Government should continue to follow the public transport policies which Labour-controlled authorities in our major conurbations have been trying to follow for a considerable time.

We are often told that we are wrong not to follow the examples of the Continent and Western Europe generally in our approach to difficult economic problems. Virtually throughout the Western world transport subsidies are far greater than the subsidies paid, or proposed to be paid, by Labour-controlled local authorities before the introduction of the Bill.

Over the decade of the 1970s the Department of Transport examined subsidies to public transport in other major cities in Europe. In 1980, the Transport and Road Research Laboratory—no friend, normally, of public transport—published its supplementary report No. 541 entitled "Subsidisation of Urban Public Transport". It proved to my satisfaction—and presumably to its satisfaction—that nowhere in Western Europe was the fall in public transport usage as great as in the United Kingdom. The report also proved that nowhere else in Western Europe had fare levels increased during the 1970s as much as in the United Kingdom.

When the hon. Member for Derbyshire, West and some of his hon. Friends invite the Opposition to prove that cheap public transport over a long period leads to increased passenger usage, we can only point to South Yorkshire, because that is the only area of the country which has been consistently under Labour control and responsible for those matters over such a long time. It is easier to prove the opposite, as the Transport and Road Research Laboratory has done—that high fares for public transport drive away passengers, inevitably lead to a decline in services and have a direct impact on those who make use of concessionary fares schemes—all of which were initially introduced by Labour authorities. The only areas where such schemes do not apply are controlled either by the Conservative Party in reality or by the Conservative Party in disguise masquerading as independents. The fact that decreased passenger usage will lead to a withdrawal of services impinges directly on the lives of those who benefit from concessionary travel and therefore pay less than other transport users.

Mr. Parris

I do not disagree with the hon. Member for West Bromwich, East (Mr. Snape) that high fares will dissuade from using public transport those who might otherwise use it, but is the hon. Gentleman saying anything more than that when people have to pay an amount which reflects the cost of providing a service, they will be more sparing in their use of it? Is that necessarily wrong?

Mr. Snape

It is certainly the doctrine of Adam Smith, but it does not commend itself to me. If I were the hon. Gentleman, I should hesitate before proceeding far up that road. He has no doubt read in the Sunday newspapers that the doctrine of the market place is hanging at least half-way out of the window until after the next general election—at least if energy costs, for which the Secretary of State used to be responsible, are anything to go by. Therefore, I cannot agree with the hon. Gentleman's premise.

With regard to the future of local government, I can only quote to the Secretary of State the views which have been passed on to me during the short time since publication of the White Paper and the Bill. On Friday, I received a letter from Councillor Bateman, chairman of the West Midlands county council transport committee, in which he expressed his committee's opinion of the impact of the Bill on transport policy within the West Midlands. As my right hon. Friend the Member for Barrow-in-Furness said earlier, we are discussing a 22 per cent. rise in bus fares with cuts in services and passenger losses. That is not a businesslike, let alone a democratic way of running public transport in the West Midlands, but that is the view of the man elected by his colleagues to chair the transport committee and elected by constituents in his county council electoral division to represent their views. I would put more credence in the views of councillor Bateman than in those of the Secretary of State, his advisers, or those who write his briefs.

We have heard a great deal about stabilising prices. It is impossible to pick up a tabloid newspaper without reading all the good news of stable prices and falling mortgage rates. But, according to the West Midlands county council transport committee, the implementation of the Bill and the subsidy ceiling of £28 million will mean that within two years fares in the West Midlands will have risen by 89 per cent. That would make a small difference to the overall retail price index and virtually no difference to the cost of living of the Secretary of State and his right hon. and hon. Friends.

Increases in public transport costs are borne most by those who can least afford to pay them. Not many hon. Members travel on public transport as frequently as perhaps they should. For various reasons, we all find it convenient to use motor cars, but for many people—more than 50 per cent. of the population—public transport is their only means of mobility. For an even greater percentage of the population, during working hours public transport is their only means of mobility, unless they are experts in the marathon, like the hon. Member for Derbyshire, West. For the vast bulk of the population, during working hours, when the one car available is parked outside the man's place of work there is no alternative to public transport. In the West Midlands, the implementation of the Bill's proposals will mean an increase in bus fares over two years of close to 90 per cent.

Mr. Cohen

The media talk of most families having a car, but, if father takes the car to work, the rest of the family depend on public transport. Many disabled people, many who are too old and many who either do not want or are not qualified to drive a car, depend on public transport. We have a responsibility to ensure that such transport is available for them.

Mr. Snape

I agree with my hon. Friend. We should make it clear that not only fathers use the family car during the day. Increasingly in the West Midlands the father stays at home and the mother uses the car to travel to work if she has been fortunate enough to keep her job. Those who believe in sexual equality may applaud that change in family life, but it is being thrust upon many men in the West Midlands because of the rate of job losses in the heavy metal and foundry industries.

Any discussion of the Bill must include a reference to the direct threat to rail services provided by PTEs under section 20 of the Transport Act 1968. About 1,000 million passenger miles a year are travelled on those services—one twentieth of British Rail's annual passenger mileage.

The PTEs contribute half of the total cost of those services. That is a major contribution to the capital costs., especially on track and signalling, of British Rail's intercity operations. The West Midlands PTE contributes to track and signalling costs in the Wolverhampton-Coventry corridor. The track is also used by BR's inter-city trains, and the costs are proportioned accordingly.

We need an explanation from the Secretary of State about the impact of his proposals on section 20 rail services. The West Midlands county council's transport committee and its chairman believe that capital programmes will be cut if there is a reduction in section 20 support and that that would prejudice at least two inner city rail services in Birmingham—that between Solihull and Stourbridge and the much-vaunted and highly successful cross-city line between Four Oaks and Longbridge. The local experts—those who were elected to do the job that the Secretary of State seeks to deny them the freedom to do—believe that those services are likely to be adversely affected by the proposals in the Bill.

The Bill is opposed by every metropolitan county council. The Secretary of State may say that that is because of their political bias, but he gave the impression that this was a sweetly reasonable Bill which had been introduced in response to demands made by metropolitan councillors. As my right hon. Friend the Member for Barrow-in-Furness said, if the Secretary of State believes that the Bill remotely defines the fiduciary duty of local authorities, he cannot have read the measure. I hesitate to say that, because I am sure that the right hon. Gentleman must have read the Bill, but it seems that he has not understood it. Anyone who expected to hear the right hon. Gentleman explain what the Bill did would have been disappointed.

Labour Members and those charged with the duty of running local public transport believe that the Bill will be a disaster and should be seen to be a direct attack on local government democracy. I hope that the Opposition will resist it not only on Second Reading, but throughout its Committee stage.

6.34 pm

Mr. John Page (Harrow, West)

Many Labour Members complained vehemently at the start of the debate about the speed with which the Bill was being presented for its Second Reading. I always try to keep in with the Chair, so I decided not to make a phoney point of order about the fact that if the Bill were not being presented with such commendable urgency there would be great anger and anguish among London ratepayers because the Government were not being quick to defend them from further attack.

I shall devote my speech to London Transport and will not discuss the effect of the Bill outside the London area. London is only just painfully recovering from the chaos brought upon it last year by the Socialist regime at County Hall. It was a traumatic and unnecessary experience. It would be boring for me to repeat yet again the whole plot of that horror comic, but it remains indelibly tattooed on the hearts of my constituents and other London ratepayers.

The Labour GLC used large increases in subsidies to fund deliberately imposed inefficiencies—it will continue to do so if it is given the opportunity—to put its hands into the handbags and pockets of London ratepayers. Even before the introduction of the so-called "Fares Fair" policy, the GLC increased wage rises on London Transport from 8 to 11 per cent., despite the fact that the bus drivers had already accepted the 8 per cent.

The council made a net increase in London Transport staff of more than 500 and put more buses on to services that were already not well patronised because there was not a sufficient demand for them. I wonder whether my right hon. Friend the Secretary of State realises that when the new fares policy was introduced London Transport workers were given £50 each in compensation for the reduction in fares. Does my right hon. Friend know whether they have been asked to refund that unfair present, which was given at the expense of London ratepayers?

Mr. Ted Leadbitter (Hartlepool)

The Bill states clearly that in the provision of revenue to a PTE an authority must take into account the balance of interest between ratepayers and transport users. The London Labour Party addressed the electorate on that basis and the ratepayers and transport users gave Labour a majority on the GLC. Why on earth are the Government interferring with the council?

Mr. Page

That issue has been discussed many times. Let us suppose that the Labour Party had put in its London manifesto a commitment to reintroduce corporal punishment for muggers—a commitment which I would recommend. That might have been extraordinarily popular. It would have been swept home but the policy would have been unlawful.

Mr. Leadbitter

rose—

Mr. Page

No. One helping is enough. This is not Dotheboys Hall. Or is it?

My constituents, to a man, a woman, and a child—the children are extremely intelligent and early developers—believe that most public organisations are run not for the benefit of the consumer but for the benefit of those employed in them. This can be proved by the fact that over the last 10 years, in real terms, London Transport's average cost per bus mile increased by 50 per cent. compared with 30 per cent. over the rest of the country, which I should have thought was a pretty lousy performance anyway.

All users of London Transport probably enjoy superficially the idea of paying lower fares. If the service were free, they would enjoy it all the more. However, my constituents realise that as ratepayers one does not get something for nothing. It was the ratepayers of London who footed the bill for the "Fares Fair" scheme. All they did was to continue to subsidise the commuters, the business men, the commercial travellers and the visitors to London out of the domestic rate. Those subsidies were also provided out of business rates. It seems to me the worst example of taxation without representation since the Boston Tea Party, that those paying business rates should have no opportunity to take part in elections in the areas where the business is located.

Mr. Dobson

Will the hon. Gentleman give way?

Mr. Page

No. The hon. Gentleman will have time to make his speech. He is always so rude to me that the last trump would have to sound before I gave way to him.

Had the Greater London Council remained under the brilliant, wise and dynamic leadership of the GLC councillor for Harrow, West, Sir Horace Cutler, the rate contribution to London Transport would have been £46 million in 1981–82. It became £259 million under Labour and would have gone up to –385 million in the present year. Over the proposed full five years of the "Fares Fair" scheme, with its pegging of prices, the cost to the ratepayers of London would have been nearly £2 billion. If any hon. Member thinks that 60 per cent. of £2 billion would not have affected the performance of businesses in London and their ability to create employment, they are closing their minds to the facts.

London ratepayers are now under direct attack again. This new attack is far more irresponsible than the previous one. I wonder how many hon. Members saw a television programme at the weekend called "The London Programme". In an extraordinarily biased programme, it was clearly stated by Mr. Livingstone, the present and, one might perhaps hope, the last leader of the GLC, supported by the transport committee, that the group intended to introduce the same kind of subsidies as before, despite knowing of the White Paper and the Government Bill.

I cannot conceive of anything more irresponsible than that the people across the river should deliberately cause a confrontation with the Government by introducing a new scheme which, if the Bill goes through, will be unlawful. The message should go out from the House that they should not go ahead with the scheme or impose it on the London Transport Executive until the Bill has either been passed or rejected by the House. It is a determination of chaos. I hope that the London Transport Executive will consider carefully its position if it wants to spend money introducing a new scheme that could become unlawful within a few months.

The people at the GLC are far too irresponsible to run this great capital. The simple remedy is for the Government, at the earliest opportunity, to abolish the GLC. I am attracted by the new metropolitan transport authority envisaged by the Select Committee, which would have under its umbrella buses, tubes, commuter trains within the London area, black taxis, private hire cars and other forms of transport in London. Some people doubt the wisdom of this transport authority having a precept on local authorities, but if it is realised that the whole GLC precept is to disappear, the idea perhaps becomes more attractive.

I think I am right in saying that my right hon. Friend stated that in the current year London Transport would receive a subsidy, in all its forms, of nearly £400 million. Will my right hon. Friend nod or shake his head? I understood him to say something in those terms. It seems to me a fairly generous contribution before we are able to take London Transport out of the meddling hands of the GLC.

6.48 pm

Mr. Tom Bradley (Leicester, East)

I must add my protest to those already made about the speed with which this Second Reading debate is taking place. We are really in an incredible parliamentary situation. A week last Friday, within an hour or so of the Bill being published, there was a White Paper. I understand a White Paper to be an expression of Government intent for discussion and debate before legislative proposals are prepared.

We are now told that it is all right, we are having the Second Reading tonight and there will be ample time for discussion before we embark on the Committee stage. However, what kind of worthwhile discussion can take place in those circumstances? Simple arithmetic being what it is, the Government will get their Second Reading tonight. In those circumstances, the GLC and the metropolitan counties will know full well that whatever representations they make in the short period between today's debate and the start of the Committee will have no importance for the Government. This is shabby treatment.

The councils concerned have had nothing like a reasonable opportunity to make their point of view known to their local representatives or hon. Members so that we can lodge their objections to the Bill's basic and detailed implications. Once again the Government have acted in complete disregard of the best interests of the House and the people concerned with the measure that they are introducing. Even the Leader of the House came pretty close to admitting as much last Thursday when under pressure from the Leader of the Opposition.

I regret this, because there are strong arguments on both sides of the House about this matter. I also regret it because I had hoped that we might have a constructive and useful exchange of views on how we can sort out the mess that has developed over local and central government expenditure in support of public transport services. I regret particularly the fact that we started on a sour note, which cannot be good for the constructive discussion that we hope to embark on shortly.

There is no doubt that a great deal of uncertainty was created by the judgment in the famous GLC case. Nobody knows where he stands vis-a-vis the 1968 Transport Act and the 1969 Transport (London) Act. Something has to be done. The White Paper, which we received together with the Bill, says in paragraph 12: The Government has therefore concluded that legislation is needed which will provide for a reasonable stable and lawful subsidy regime.

Paragraph 31, the conclusion of the White Paper, says: A major consideration is the need to ensure that public transport is given a firm and assured future, and that the institutional arrangements provide for this.

I cannot quarrel with those sentiments, but I am afraid that the approach of the Bill, supported by the explanations in the White Paper, leaves the legality of transport subsidies in an even greater state of uncertainty that it has been following the fiasco of the GLC case in the courts. Nothing has been clarified.

The White Paper refers to the Select Committee report on transport in London and the far-reaching recommendations that it made, and there have been further references to that this evening. I have the privilege to be the Chairman of the Select Committee. I hope that we shall soon have a positive response from the Government to our general recommendations. The "Fares Fair" policy was not within the remit of the Select Committee during our inquiry. We began that inquiry before the GLC elections in May 1981. Therefore, we were not directly involved with assessing the relative merits and demerits of different political party attitudes to the question.

The policy adopted by the GLC following the May 1981 election and its aftermath delayed the completion of our inquiry and served to highlight a number of institutional problems. The concern of the Committee was to find an agreed solution that created as little disruption as possible to the day-to-day management of London's transport services yet did not deliver control completely outwith London's elected representatives.

This is not the occasion for a debate on the Select Committee's report. However, the Select Committee acknowledged that the "Fares Fair" policy was a serious and genuine attempt to revitalise London's transport services and bring real benefits to London's travellers. In the event, it did neither.

I do not doubt for one moment that the GLC acted in good faith. It did not know, and was not told, that it was acting illegally. It believed that it had a mandate and it thought that it had the powers. I cannot understand why the lawyers at the Department of Transport did not advise it differently or caution it on the course on which it was to embark. Literally, the GLC was misguided, but we should not regard it as being either malicious or mendacious in what it did.

As someone who has worked in the railway industry for many years and has spoken as a national trade union representative on behalf of the workers in the industry for many years, I have never found it easy to subscribe to the view that public transport services should be sold to the public on the cheap. There is, of course, a good case for providing specific subsidies for those in real need—the young, the elderly and the disabled. The Bill does not disturb that concept, as the Minister confirmed today.

I have always held that public transport in London, and everywhere else, should be promoted, not on the basis of cheap fares, but on the appeal of the quality of its services. Obviously there should be subsidies—there have to be subsidies—but the bulk of these need to go into maintaining and improving the quality of the services offered to the public and not into offering a not particularly good service at a cheap rate.

The Select Committee discovered that many of the transport undertakings overseas that have been most successful in increasing, or certainly maintaining, patronage of their systems—particularly those in Toronto and Hamburg—have done so by applying a high level of investment at the expense of a lower level of revenue support than elsewhere. Of that there is no question.

To a large extent operating subsidies must be regarded as money down the drain, whereas major and continuing capital investment in public transport creates the possibility, which ought to be the long-term aim of transport policy, of providing a service that will attract people to leave their cars at home and use the railway and bus services instead, because of their frequency and reliability.

The Select Committee has consistently taken the view that effort must be concentrated on capital investment that will bring clear long-term benefits, including lower transport operating costs, rather than on increased public transport subsidies, whose benefits are likely to be more ephemeral.

Mr. Fry

Will the hon. Gentleman confirm that the problem with much of London transport, especially the tube service, was the lack of adequate investment and the policy of using much of the money available for revenue support? Did not the Committee have evidence of that?

Mr. Bradley

The hon. Gentleman's remarks are reflected in the report. The Committee confirmed the evidence, and I cannot gainsay that. I have little sympathy with the crude strategy of cheap fares at any cost. The GLC's fares policy undoubtedly resulted in an increase in the ridership on London's transport services. However, the evidence suggests that at least some of that increase resulted from poaching from British Rail on parallel routes. There was, therefore, a less significant diversion from private to public transport—which should be the aim.

The ill-fated GLC experiment cost a great deal. The ratepayers and travellers debated whether the resulting benefits represented good value for money. It was a legitimate question, and the debate continues, but the right place for a judgment on whether a cheap fares policy is correct in relation to other options, and whether it represents good value for money, is in the ballot boxes and not in the courts of law. That is the root objection of my party to the Bill.

Mr. Dobson

The hon. Gentleman does not have a great deal of faith in the ballot box.

Mr. Bradley

As the law stands, it must be the responsibility of the GLC and the passenger transport authorities in the counties to develop coherent transport policies. That responsibility must include the power to adjust the charges made by public transport operators to accord with their overall transport strategy—even if both the strategy and the fares policy turn out to be wrong. If we create government authorities, we must be prepared to allow them to act as they think fit and to give local electors the right to judge the fitness of their actions.

There is a strong case for changing the present institutional arrangements for transport decision-making in London, and probably elsewhere. In the meantime, it is important that the authorities that have been given the responsibility for making transport decisions should exercise them without the fear of maverick legal judgments.

Mr. David Howell

I am carefully following the hon. Gentleman's remarks. I have considerable respect for his expertise in transport matters. He holds the important position of Chairman of the Select Committee. He recognises that the present legal position is unclear and has led to legal judgments that have caused confusion. Why, therefore, does does he reject proposals which, while not creating total certainty—that can only be done by institutional form—enlarge the area of certainty within which subsidies can lawfully be given? That is what the Bill does, and I am puzzled about why he rejects that.

Mr. Bradley

The right hon. Gentleman's proposals will enlarge the area of uncertainty. He will specify the level of subsidy that he regards as legal. That will leave wide open the question of what is illegal. Nothing could be more unstable.

Mr. Cohen

Does the hon. Gentleman agree that the Secretary of State's reference to lawful subsidy was a vague expression which left many hon. Members on both sides of the House in doubt about its meaning? It should be clarified for both the House and the metropolitan authorities.

Mr. Bradley

Of course the matter should be clarified. I do not know how on earth we can expect courts of law to decide the right level of subsidy or the acceptable degree of financial subvention.

The Minister has created an instability. I have heard no suggestion that an authority must follow his guidance figures. How far will the courts regard them as narrowing the scope of a council's discretion? We could find ourselves in an impossible position. What is certain—it is the only matter on which we feel certain—is that all sorts of odd groups of objectors will be encouraged to challenge their councils in the courts. That is not a desirable development. I do not know, and I am sure that the Minister does not know, how the courts will, or can, decide what level of subsidy is both legal and desirable. It could be a nightmare.

The Secretary of State has missed an opportunity to clarify transport strategy, investment and fares policies. Instead, he is proposing an unacceptable measure that will create great uncertainty in what is already a very sensitive area. For those reasons, I shall ask my hon. Friends to vote against Second Reading.

7.8 pm

Mr. Peter Fry (Wellingborough)

It is a pleasure to follow the hon. Member for Leicester, East (Mr. Bradley). We have spent much time together discussing transport plans. He knows that I agree with his remarks about the need for further investment rather than pure subsidies for passenger fares. However, he—like the Government—has not fully defined the principles on which such a policy should be based. The Government are continuing the policy instituted by the Labour Government in phasing out bus grants. That was instrumental in assisting public transport—a known cost that was provided. That is being phased out. We go further and further into an area where none of the paramaters of the discussion are decided.

I must declare an interest as I give advice to certain bus companies. I understand the main principles behind the Bill. I share the view of most Conservative Members that some clarification of the law, especially for Greater London, is desperately overdue. We must investigate how central Government can have some control over potentially dangerous overspending by some local authorities.

A point that has not yet been mentioned is that some of the monopoly powers of transport operators should be broken. There should be greater competition within our great cities.

I do not disagree with these objectives—indeed, I applaud them—but we must consider how the Bill tries to put them into effect. I suspect that the Government—especially my right hon. Friend the Secretary of State—are converted to the view that there has to be some support for public transport. For some years some members of my party believed that public transport could be provided without any subsidy. The history of the past few years has shown clearly that that is not possible. Having accepted the need for subsidy, we are still feeling our way to framing the exact definition and nature of it.

We must ask ourselves a number of questions about public transport. Need is one aspect, but that does not mean that we should provide public transport for anybody who wants it wherever he wants it. There are probably too many buses operating between 10 am and 4 pm peopled entirely by those who have paid no fares. In some of our metropolitan areas that is happening. Such transport may be therapeutic for the old age pensioners of Merseyside or those in other areas, but it does not represent sound transport economics or much sense generally.

Mr. Les Huckfield

Even though the passengers that the hon. Gentleman describes may not have paid for the journeys through the fares box, someone has paid either in contributions from other ratepayers, from central Government or elsewhere. The contributions have been made as a result of democractic decisions. Payments are being made by or on behalf of the persons on the buses.

Mr. Fry

I am glad that the hon. Gentleman appreciates that someone else has paid. I am often given the impression that Labour Members are unaware of that. I am saying that we should ask ourselves whether the need that is expressed by this ridership should be subsidised. First, we must ascertain need. Then we must ask whether the need should reasonably be met. If there is only one person on a bus, the need is one that it is not reasonable to meet. It would be cheaper to send that one person on his journey by taxi. There are bus services in far too many areas—some of them in the cities—that are not needed when judged by the definition that I have been trying to establish.

Having decided what is a reasonable need, we must evaluate the support that is required to provide the service. There has been much talk about the decline of bus ridership. Whatever may be the level of ridership in South Yorkshire, I contend that over the past few years there has been a fairly continuous fall in most areas. This has been due partly to the move towards the motor car, but more recently, unfortunately, to the effects of the recession.

I do not think that playing with the levels of fares will necessarily increase by a great extent the number of passengers making new journeys on public transport. It might be possible to increase the number of journeys that regular passengers make, but I do not think that there is much evidence anywhere in the world that new passengers are attracted by remarkably reduced fares.

Mr. Les Huckfield

I suggest that the hon. Gentleman considers the evidence that has been produced by Merseyside, by the West Midlands metropolitan county council and by the GLC. The periods of fare reductions, short though they may have been, have produced evidence of new traffic as well as an increase in the number of journeys of regular travellers. This has been proved on Merseyside, in the West Midlands and in the GLC area. If the hon. Gentleman has not seen the figures, I shall send them to him.

Mr. Fry

Virtually every statistic that I have seen has reflected the hope of operators to generate more revenue from existing passengers. That is the basis upon which most operators undertake their costings.

Basically, we are trying to provide a service that has to be subsidised. How do we evaluate that subsidy? That is a question that fails, I believe, to be answered by the Bill, and the hon. Member for Leicester, East failed also to produce an answer. I suspect that the Labour Party would make up the difference between the operating cost and the revenue that is obtained through the fares box.

It is high time for the Government to go into some detail in explaining. their public transport policies. The British Rail network receives a broad thumb treatment, and about £800 million of taxpayers' money is used to support rail services. In this instance I am not arguing whether that is right or wrong. Likewise, a large sum is provided to support bus services.

If we adopted the South Yorkshire option of a bus subsidy of £29 per head, bus subsidies nationally would be £1,400 million. That is a lot of money, but that policy has been advocated by some Labour Members. Nevertheless, we are spending a great deal on bus services, and no one is too sure about the basis on which we are voting the money.

It was proposed to the Select Committee by Sir Peter Masefield—I thought that his proposal merited deep consideration—that the Government should recognise the idea of providing a fixed subsidy according to the revenue derived from fares. That means that if fares were too low, the subsidy would also be low. If fares were too high, that could be a ridership deterrent and the subsidy would not be sufficient in real terms. Only by pitching fares at a level which would maximise ridership and, therefore, revenue would the degree of public support be brought to the maximum level.

Such a solution would be a useful management tool. It may be that the percentage of revenue from the fares box should not be used as a criterion in all areas. In a rural area, for example, inevitably some services will have to be provided for fewer passengers. However, in our large cities we want to encourage the public to use public transport because the roads are heavily used and road conditions will be improved if people use buses or other forms of public transport. If the Government tried to establish a percentage basis of support we would have a yardstick for every transport operator to employ in setting fares for his services.

I criticise the Bill because we do not know what my right hon. Friend will do the year after the one for which he gives figures. It is all very well to say to transport operators "We want you to have long-term transport policies and three-year rolling programmes". We have seen over the past few years, unfortunately, that local authorities will vote a certain sum for the first year and then, because of other demands, cut their support. That means that private and national bus operators do not know how to plan their forward operation from year to year.

Mr. Cohen

In Italy generally, and Rome especially—I admit that it is three years since I visited Italy—there has been a standard fare on public bus services equivalent to 4p. Three years ago the problem was to get on or off a bus. There was no need for a subsidy because of the standard fare. The bus service attracted all those who needed transport to go into the cities. That is a feature that we should be considering.

Mr. Fry

We need more experimentation with fare levels. I would go further than that. There should be greater experimentation with differential fare levels during the day. Everyone knows that the provision of public transport depends on peak demand. In the middle of the day many buses and tubes run with few people on them, yet there is a high cost in keeping that transport running. In some areas a fixed fare may be the answer. We are starting to see some experimentation, but I should like to see more.

If the Secretary of State wants to decide the level of subsidy, it would be easier for him to do so, in the light of any experiments, if he could judge how much of the cost came from the fares box. According to the hon. Gentleman's example, there would be no need for subsidy.

Mr. Cohen

Exactly.

Mr. Fry

The amount to be awarded would depend on the circumstances of the city.

Mr. Bidwell

The hon. Gentleman has been making a strong case, in support of the previous chairman of London Transport, about the ratio of subsidy that could be forthcoming. Does he agree that it is not just a matter of fares in London, as the hon. Member for Leicester, East (Mr. Bradley) emphasised? The tenor of our report was to emphasise the necessity for massive capital expenditure on London by the State. The formula does not take care of that, as it is a long-term projection. The other aspect has not been either sufficiently emphasised or taken hold of in this negative Bill, which does not face up to the role of the State in the capital.

Mr. Fry

I accept that if one is thinking entirely in terms of fares, it does not immediately follow that a percentage from the fares box is the answer to the hon. Gentleman's point. However, it could be, because, in making his judgment on the amount that he expects to come from the fares box, the Secretary of State will take account of past investment. As the hon. Member for Leicester, East said, in other cities, particularly Hamburg, there has been massive investment in the past. The result is that there is little subsidy on the fares box. If we had the same investment in this country, we would not be arguing about the enormous levels of subsidy because the services would largely pay for themselves.

That is the judgment that the Secretary of State must make. It must be differential. When he arrived at a conclusion, we would all know where we were. Many of us have grave doubts about what will happen when the Bill comes into force.

In another part of the Bill there is an attempt to bring greater competition to public transport. I have already had private words with my hon. Friend the Under-Secretary of State about that. He knows my views. It is all very well to talk about introducing competition, provided that one compares like with like. Unfortunately, in public transport not all bus companies conduct their accounts in the same way. Some authorities may decide to make subsidies that a private operator cannot make.

I shall give two examples contrasting services in Greater London and those running into it. The first is long-distance coaches that take commuters to the GLC area. London Country Bus Service and its subsidiaries are bound by the remit under the Act that set up the National Bus Company to break even one year with another. Such a policy is pursued. Any private coach operator must also work under such a policy; otherwise he would go out of business.

However, Reading transport authority also runs buses and coaches into London. It charges commuters £400 per year, yet it costs the ratepayer in Reading between £300 and £1,200 per year for each commuter travelling on that coach service. That is a prestige service run by that authority. Therefore, how can one compare like with like—the private coach operator, Green Line and the Reading coach operation? However, London Transport is much more privileged than any other operator that competes with it becauses of the way it purchases its buses. If the Government want this part of the Bill to work, an awful lot must be done to tidy it up to ensure that, if there is to be free and fair competition, those who are expected to enter into it do so on equal terms.

Mr. Ronald W. Brown

The hon. Gentleman may be aware that one of the problems for London Transport and other traffic is private buses picking up and putting down people along the Embankment. Those buses cause so much congestion that London Transport's buses are delayed. The private operators coming into London are causing a hell of a lot of trouble when they get there.

Mr. Fry

I accept that.

It is odd that the ratepayers of Reading should be subsidising each commuter by paying enormous amounts of money while passengers are being taken away from British Rail, which the taxpayer is heavily subsidising.

It is time that the Government considered their subsidy policy. They accept that it is necessary, which is a great advance over the past two or three years. It is time that they defined what that subsidy should be. To leave that, as the Bill does, purely to the discretion of the Secretary of State will not end any arguments; it will start more arguments. I earnestly urge my right hon. Friend to consider a formula, such as the one that I have suggested, of a percentage from the fares box. If that formula were adopted, we would all feel that a fairer system, even if we disagreed with it, was in operation. At long last we would start to see some sense coming out of the morass of public transport subsidy.

7.27 pm

Mr. Les Huckfield (Nuneaton)

I speak as a sponsored member of the Transport and General Workers' Union, which has a large number of members in the operations affected by the Bill, and as chairman of the Associated Society of Locomotive Engineers and Firemen group of Members of Parliament.

I normally admire the hon. Member for Wellingborough (Mr. Fry) for his expertise in transport matters, but several Opposition Members will want to question severely his logic on cheap fares. What he said about South Yorkshire suggests that fewer passengers have been taking more and more bus journeys. He said that cheap fares in South Yorkshire have not increased the number of passengers but have just sufficed to maintain the level of ridership. I am sure that hon. Members who represent South Yorkshire constituencies will verify that the logic of what he was trying to say was that their constituents must be spending almost all their time on the buses. I am sure that they will deny that.

Mr. Fry

I accept that that might appear to be the extreme case. However, in the areas of many other authorities apart from South Yorkshire the reverse has happened. If fares are lower it is possible that a few more people will travel, but at what cost? It is because of the high cost that there is a need for legislation.

Mr. Huckfield

I do not want to enter into a dialogue with the hon. Member for Wellingborough, but it is well known in this country and the rest of the world that for every 100 per cent. fare increase there is a 30 per cent. fall in passengers. He will not deny that fact, which comes from observation in this country, Europe and the United States. It is more than adequately documented and comprehensive proof has been provided the world over. Every time fares are raised there is bound to be a falling off in the number of passengers.

The Secretary of State has tried to reduce the proceedings of the House to a farce. We are accustomed to a debate on the White Paper before the introduction of the Bill and its Second Reading. We have had to dispense with that because the White Paper and the Second Reading are taking place on the same day.

One assumes that local authorities would expect there to be some debate in the House before their revenue subsidy levels were fixed. The levels of revenue support, provisional though the Secretary of State says they are, have been fixed even before the Bill has received its Second Reading. So we have two good debates usually, but the Secretary of State seems to assume that those debates count for nothing. I submit that that reduces proceedings both on the Floor of the House and in Committee to a meaningless farce. The Secretary of State knows that he is doing that.

The Secretary of State seemed to say that he wanted to clarify the law, to reduce the central Government transport expenditure and promote new services. I suggest that he gave away his real motive during his speech at the Tory Party conference. During that speech he said that the legislation was only the start of what he wanted to do. He wants to remove from the political control of Labour-controlled local authorities the power to make those acceptable policy decisions.

The Secretary of State knows that the 1981 county council elections were virtually a referendum on the metropolitan county councils' cheap fares policies. He knows that in almost all the metropolitan county council elections the now-ruling Labour group came to power on a policy of cheap fares. Those cheap fares have proved popular beyond any doubt. That is why he intends to remove the decision-making power of those Labour-controlled country councils in the Bill and to take those decisions himself.

The decision that was taken by the Greater London Council in its "Fares Fair" campaign proved to be so successful and popular that when my right hon. Friend the Member for Battersea, North (Mr. Jay) introduced his Bill to rectify the Denning judgment, we heard hon. Member after hon. Member on the Conservative Benches say that they were opposed to that amending Bill, but they were in favour of cheap fares. That was the ridiculous position of Conservative Members. They want cheap fares if they can take the political credit for them. The Bill removes the decision-making powers from the local authorities and gives it to the Secretary of State.

The other worrying suggestion that has been coming from the mouths of right hon. and hon. Members on the Conservative Benches is that civil servants in Whitehall and the Secretary of States' advisers in the Department of Transport know best. The hon. Member for Wellingborough actually said that, and that he wanted the Secretary of State to decide whether there should be capital expenditure or revenue account expenditure. The Opposition feel that those should be local decisions, and that the Secretary of State and his advisers do not necessarily know best.

The Secretary of State did not seem to understand the meaning of current legislation. The Transport Act 1968 and the Transport (London) Act 1969 do not just give the passenger transport authorities and the GLC power to make decisions on fares policy. They give them the decision-making power on a complete transport policy.

With the reference in paragraph 28 of the White Paper the Secretary of State shows his ignorance of the position. He talks about distracting management attention from the central task of planning and running bus services. That is not what it is all about. The central task of passenger transport authorities and executives is to decide on overall transport policy and not just to manage bus services. The Secretary of State now wants to arrogate to himself the overall transport policy.

In the Merseyside case, the West Midlands metropolitan county council case and even the GLC case, judgments were not made on the basis of transport policy or bus fares. In the Merseyside case judgment was made on the Merseyside county council's decision on overall transport policy. It is that that the Secretary of State wants to remove and arrogate to himself.

The Secretary of State says that the Bill will help to clarify the legal position. After reading the Bill and a few interpretations of it, I believe that, far from clarifying the legal position, it will make it even more doubtful.

I shall refer the right hon. Gentleman to the legal precedents that currently confront democratically elected councillors. In the Denning judgment, endorsed by the House of Lords, the judges said that London Transport should break even. In the Kensington rents case, the courts decided the level of subsidy and rents were matters for councillors to decide. In the famous Camden councillors' case, the courts decided that the levels of wages were matters for councillors.

The present GLC transport policy is currently being operated under a special dispensation from the Attorney-General, because the Under-Secretary knows that the Greater London Council could face a legal challenge from any of the London boroughs as it could be said to be failing to meet transport needs in their areas.

Even though the GLC and the London Transport Executive are currently operating a policy with a special dispensation, that faces a legal challenge. The Merseyside case seems to show that if one has a reasonable case and can claim having received reasonable legal advice, one can possibly get away with bringing the fares down anyway without risking a surcharge. The legal precedents and position that currently confront democratically elected representatives are confused and the proposals contained in the Bill do not clarify them.

Mr. Leadbitter

To underline the importance of what my hon. Friend is saying, will he bear in mind the fact that under clause 3(5) there is no point in any councillors or political party saying in any metropolitan county or in the Greater London Council what they believe to be the right transport policy for their electorate? Under the clause the Secretary of State has complete control. His advice has to be taken into account before they can proceed. The democratic process has been taken from the local authorities.

Mr. Huckfield

My hon. Friend has reinforced the point I made earlier—that the Secretary of State is seeking to bring forward powers to enable him to remove the overall transport policy decision-making from democratically elected local authorities and arrogate that responsibility to himself.

The legal situation confronting local authorities is complex. The Bill seems to have replaced the doubtful legal position under the Denning judgment, that London Transport had to break even, with protection to councillors from challenge in the courts if they use a subsidy in line with the White Paper, but even if they go higher than the recommended subsidy they may still be legally in the clear. If they can provide evidence and information that the advice that they had and their decisions were reasonable they could still go higher than the recommended levels and be in the clear. Legal doubts still cloud the situation under the Bill. The advice in the case of Merseyside county council holds good —if one thinks there is a good case, why not have a go? I am aware that the issue ultimately must be tested in the courts, but I hope that the Minister will give a further interpretation.

The Secretary of State has encouraged ratepayer groups to have a go at the local council if they do not believe that the transport subsidies are correct. My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) said that the Bill does not remove the threat of legal action against councillors for breach of fiduciary duty. In "Labour's Programme '82", the unchallenged document passed by the annual conference, there is a commitment to introduce the possibility of retrospective legislation to remove the surcharges or penalties that councillors may have to face. We shall push hard for the commitment to be implemented. We shall also tell Labour councillors that the next Labour Government will have power to correct the peculiar legal situation.

I shall not deal with the various fare levels and all the difficult decisions that will face South Yorkshire, West Midlands, Tyne and Wear, the GLC and so on. But although the proposal would necessitate a 300 per cent. fare increase in South Yorkshire we do not have evidence about what happens with such percentage increases. When fares are increased by more than 116 per cent. the total revenue yield falls off. After a certain point total revenue diminishes. The proposals will push many metropolitan county councils into raising fares to the level where they may lose on overall revenue yield.

Most metropolitan county councils, including West Midlands and Tyne and Wear, but excepting South Yorkshire, will face fare increases of about 20 per cent., but, in addition, from next April most were planning fare decreases of about 10 per cent. The Bill is putting up fares against the background of planned decreases, but the Secretary of State still maintains that he is not interfering with local democratic decisions. If that is not interfering, I do not know what is.

Other management provisions in the Bill in the long run could be even more damaging, especially those in clauses 7 and 8. Clause 8(3) states: An Executive shall accept a tender. if it provides a service at less cost to them". The hon. Member for Wellingborough made interesting observations. A private entrepreneur may frame a tender to make it appear that the service will be provided at less cost. Private operators may not have the burden of a fair wages resolution and not have to pay wages in line with those in the services operated by the executive. They will be able to put in tenders based on cheap wages and fares. It appears that the executive must accept them. If the Secretary of State forces through such provisions we shall have a massive dose of privatisation based on fare and wage cutting. He has been coy about the privatisation proposed. He should come out into the open. He is imposing on the executive a duty to accept such applications.

I am sure that what I say will be echoed by my hon. Friends and by transport executives. The Bill serves only to make the legal and economic clarification ever more distant. The clearest statement that I have read recently is: It is false economy to skimp on public transport—this is one area where subsidised public investment can and does pay off. It can halt the trend towards the selfish use of private cars which wastes oil, whereas public transport … is an extraordinarily efficient user of coal or nuclear-generated electricity.

That was in a document produced last year by Conservative MEPs. It pays effusive testimony to the efficiency of South Yorkshire. I hope that the Minister will admit that the Government have a long way to go before clarifying the issue and will at least listen to what his party colleagues have to say.

7.48 pm

Mr. John Hunt (Ravensbourne)

I have the honour to represent part of the London borough of Bromley, which can claim the major share of credit for the introduction of the legislation. It was its courageous and ultimately successful challenge to the "Fares Fair" policy in the courts that highlighted as nothing else could the impact on the ratepayers of the cheap fare policy espoused with enthusiasm by the hon. Member for Nuneaton (Mr. Huckfield).

The challenge concentrated minds on the necessity to achieve a fair balance between the needs of the fare payer and the ratepayer. It is significant that the hon. Member for Nuneaton did not mention the word "ratepayer" once during his speech.

Mr. Les Huckfield

The hon. Gentleman was not listening. I deliberately said that his right hon. Friend the Secretary of State was encouraging ratepayers' groups to take legal action against their local authorities. I specifically and definitely said that.

Mr. Hunt

I meant that the hon. Gentleman did not refer to the interests of ratepayers. If he reads the record tomorrow, he will find that that is so.

In acting as it did the London borough of Bromley was reflecting the interests of the overwhelming majority of ratepayers, not only in its borough but throughout Greater London.

Mr. Martin Flannery (Sheffield, Hillsborough)

The hon. Gentleman is talking about ratepayers as though they never go on buses. I come from South Yorkshire, which has a subsidised bus fares policy.

At every municipal or county election we put that policy before the ratepayers, who use buses like everyone else, and they overwhelmingly elect South Yorkshire county council and the councils that make up the component parts of South Yorkshire.

Mr. Hunt

I cannot speak for South Yorkshire, because I am not familiar with the problems there.

Mr. Flannery

I can.

Mr. Hunt

Many of those who benefited from the cheap fares policy in Greater London were not ratepayers. In other words, the financial burden of that policy was carried by a relatively small proportion of the population. That is why the GLC's policy proved so deservedly unpopular. Hence the reaction in my borough.

Mr. Robert Hughes

The hon. Gentleman's argument can be stretched across the board for every service that is provided by a local authority. Those who pay the rates may be only a small proportion of those who benefit directly from the services provided. Everyone who contributes through general commercial activities in an area assists the ratepayers in some way.

Mr. Hunt

Many policies are generally accepted by the population. That was not the case with the cheap fares policy, when only a relatively small number of people benefited substantially and the rest had to foot the bill. Hence the opposition from within Bromley and chose boroughs to the south of London that do not enjoy the underground transport facilities that serve other parts of the capital.

In moving the Second Reading, my right hon. Friend the Secretary of State referred with every justification to the catastrophic effect which the "Fares Fair" policy had on rates and jobs in the capital. As 62 per cent. of the rates in Greater London are paid by commercial ratepayers, the burden on them was immense. I suggest that every right hon. and hon. Member who represents a Greater London constituency can testify to the anguished representations that were received from shopkeepers and others in business and commerce throughout the country. In my constituency, immediately after the announcement of the 11.9p supplementary rate, we had the largest single protest meeting on any issue that I can remember in the 18 years since I was first elected to the House.

Mr. Les Huckfield

Bromley was the biggest beneficiary.

Mr. Hunt

The hon. Gentleman says that we were the greatest beneficiary. He should go to Bromley and tell my constituents that.

Mr. Huckfield

The hon. Member for Islington, South and Finsbury (Mr. Cunningham) produced some figures when the hon. Gentleman was not present. He said that the greatest beneficiaries among London ratepayers happened to be those who lived in the London borough of Bromley.

Mr. Hunt

I was here when the hon. Gentleman made that point. I am not convinced that the figures are correct. I have not seen them, and I am not prepared to accept them on the word of the hon. Member for Islington, South and Finsbury (Mr. Cunningham). I was also here when another hon. Member said that Bromley's being the greatest beneficiary might lie in the absence of underground facilities to that borough and the fact that we must rely solely on buses, and therefore a greater subsidy is carried because the bus service loses more than the underground.

The White Paper puts the point well. It says: It is not acceptable for subsidies to be squandered on excessive costs, poorly tailored services or unnecessarily low fares. That would produce the worst form of runaway deficit financing, and would be neither in the best interests of local ratepayers nor in the national interest. Those sentiments are echoed in every home in Bromley and further afield.

Many extravagant claims have been made for the beneficial impact of the "Fares Fair" policy. I contend, on the basis of our experience during the experimental period, that it had a minimal effect on travelling patterns in London. The figures show that during the experiment bus travel increased by 11 per cent. and tube travel by 7 per cent. Part of that was a transfer from British Rail services, so it was not a net gain in passenger traffic. One must always remember that during that period the total revenue received by London Transport fell sharply. The effect on car traffic was even less significant. London Transport told the Select Committee that there was an estimated reduction of just 1 per cent. in traffic levels during the "Fares Fair" experiment. In all those ways, the impact of such a cheap fares policy has been grossly overestimated.

It must always be remembered that the increased cost to the ratepayers to whom I referred has been compounded by a waste of resources in many other directions. My hon. Friend the Member for Harrow, West (Mr. Page) drew attention in his sparkling if not bubbling speech to many facts in that respect. He drew attention to the fact that when the new GLC came to power, bus drivers who had already had an 8 per cent pay offer were promptly offered 11 per cent. The offer was raised without any reason or justification. That was symptomatic of the present rulers of the GLC's willingness to spend other people's money.

During the six months experiment of cheap fares, the cost to Greater London ratepayers was estimated at £125 million. It must be remembered that the GLC's policy was not merely to cut fares by 32 per cent.; it intended to freeze them at that level for four years. There would have been a massive and mounting burden on the capital's ratepayers. It is from that burden that the Law Lords' ruling and now the Bill is happily relieving the ratepayers of London.

All those additional costs on the people of London sprang from the "Fares Fair" policy. There were others. Following the Law Lords' decision, the GLC spent £250,000 on a publicity campaign to persuade the Government to legalise its cheap fares policy. We are now told that it will spend a further £200,000 of ratepayers' money on more propaganda against the Bill. This is a further demonstration of the scant regard that our rulers across the river have for the interest of ratepayers and for financial responsibility.

In spite of some of the comments that have been made in the debate, I believe that the Bill is a direct Government reply to the demand from local authorities for some time for clarification of the present position. The Bill does precisely that. If it be thought that my reaction is somewhat partisan or prejudiced, I draw the attention of the House to the comments of the chairman of London Transport who, as the Secretary of State reminded us, has said that the Bill offers the prospect of a period of stability. The chairman has given a broad and general welcome to the Bill, and that ought to be taken into account when considering the criticisms that have been aired in the debate.

There have been complaints about the speed with which the Government have brought these proposals forward, but for months the GLC has complained about the uncertainty of the present position and has said that there is a need for legislation to clarify it. Bearing in mind the fact that rumours from across the river are that further wildcat fare schemes are planned by the GLC leadership, it is useful for Parliament's intentions to be placed firmly on the record at the earliest possible moment. That is precisely what the Bill and the White Paper do.

The Bill specifies the guidelines under which subsidies are considered acceptable. That clarifies the position. If a council wants to avoid further uncertainty and a possible challenge in the courts, the solution is in its own hands. It merely needs to adhere to the Government's guidelines. It is as simple as that.

The Bill seeks to ensure a proper balance between fare-payer and ratepayer. It offers the prospect of better value for money for ratepayers throughout the country, and on that basis alone it should be widely welcomed.

8.4 pm

Mr. Frank Dobson (Holborn and St. Pancras, South)

It might be useful to remind the Under-Secretary of what led to the introduction of the Bill. Basically, it was the unexpected and loony decision of the Law Lords to set aside the "Fares Fair" policy of the GLC which was elected by the people of London in May 1981.

It is also worthwhile reminding the Under-Secretary of what had happened to London transport for countless years before the election of the present Labour GLC. It was a period of unremitting decline. There had been ever-increasing fares, ever-declining services, a run down of stations, a failure of buses, a gradual degradation of the rolling stock and, equally important, an ever-increasing use of cars by commuters.

The issue was put plainly to the London electorate at the GLC election, and the people voted in favour of Labour's policy to reduce fares by about a third. That was the major issue at the election, and it was endorsed by the people of London. As a result, the fares were reduced and services were improved. In a city of constantly increasing unemployment, London Transport took on more staff.

The hon. Member for Harrow, West (Mr. Page) bemoaned the recruitment of that staff. I remind him that London Transport recruited 105 bus drivers, 161 bus engineers, 111 young trainees—lucky to get a job in London—39 trainmen, 56 tube engineers and 72 additional policemen. The policemen's job was to maintain order on London Transport and to help stop vandalism and assault. All those staff were doing something at the sharp end to improve the London Transport service for the people of London.

As a result, there was a startling increase in the number of passengers—8 per cent. on the tube and 12 per cent. on the buses. There was a massive increase in productivity. That is frequently ignored by practically everyone who talks about this subject. Although the number of staff scarcely increased, the number of passengers increased on average by about 10 per cent. That is a massive increase in productivity. Equally important, the number of cars coming into central London decreased. That never happened previously, except for a temporary hiccup when there was the first big surge in petrol prices. Therefore, all the objectives of Labour's policy were achieved.

Even though no one on the Conservative Benches suggested that what the GLC was doing was illegal, the Law Lords effectively changed the law to suit the purposes of Bromley borough council. As a result, fares have been doubled, the service has been reduced, the number of passengers has fallen, the number of cars coming into central London has increased and productivity has declined.

The Secretary of State is saying that he will clarify the law and will decide what central Government subsidies are paid into public transport. He will also decide what local government subsidies are paid into public transport. If that is not interference from the centre with locally elected representatives, I do not know what is. In effect, the Secretary of State is saying that the lady or gentleman in Whitehall or Westminster knows best. We can have no faith in the civil servants at the Department of Transport knowing best because, by and large, their record is that of running down public transport as fast as they can and representing the couvert end of the roads and car lobbies.

While we are on the subject of clarity of legislation, it should be noted that the same people were responsible for drafting the 1968 Act on which the Law Lords went to work, and presumably for producing the amazing White Paper now before us. As several hon. Members have already said, if paragraph 19 of the White Paper is supposed to make the law clear, one wonders what obfuscation is.

If the decisions are not made by the civil servants, they will be made by Ministers. Let us first consider the record of the Secretary of State. I am sorry that he is not present to hear what must to some extent be a personal attack. As soon as the Law Lords gave their judgment, the Opposition made three statements. We said that that decision endangered the concessionary fares scheme for pensioners and the disabled, that fares would have to be doubled and that authorities outside London would be affected. No fewer than three Ministers—the Secretary of State was followed by the Under-Secretary of State, and the Solicitor-General was finally shuffled in to give some verisimilitude to the Government's pronouncements on the law—then said that our views were nonsense. They said that we were exaggerating and scaremongering in an attempt to frighten the pensioners and the travelling public.

Very shortly afterwards, however, the Secretary of State had to return to the House with a new Bill making it clear that London Transport had the right to run a concessionary fares scheme. Before that, no longer satisfied with the efforts of the Solicitor-General, he had asked his right hon. and learned Friend the Attorney-General to write to the GLC informing it that fares would have to be doubled for the system of subsidising London Transport to be legal. Finally, various court cases were brought against the West Midlands and Merseyside transport authorities.

Thus, although he had been advised by the Solicitor-General—Lord help him—and then assisted, almost as badly, by the Attorney-General, the Secretary of State was wrong on all three points. Yet that is the man, those are the advisers and those are the civil servants who are now to decide in detail the passenger transport policies, the fares and the subsidies for every conurbation in England. We should be mad to allow legislation of this kind to pass.

Let us consider the record of the Secretary of State's predecessor—the right hon. Member for Sutton Coldfield (Mr. Fowler), now Secretary of State for Social Services—as we should certainly examine the track record of all Government spokesmen on transport. When the Government's first Transport Bill, was before the House the then Secretary of State said that he would increase the amount of bus transport in this country. Indeed, he looked forward to being regarded as the Freddie Laker of the buses. At that stage, Freddie Laker was flying high—he had not yet gone bust, leaving tens of thousands of people with nothing for the tickets for which they had paid until he was bailed out by another Tory Member and Lonrho so that he could put his name in lights again. Arid the Secretary of State wanted to be the Freddie Laker of the buses.

Mr. Nigel Spearing (Newham, South)

That is just what he was.

Mr. Dobson

The immediate effect of the Government's first Transport Act was to reduce the stage passenger mileage of the National Bus Company by 42 million passengers miles in the first year, and that did not include the private companies, some of which have since gone broke.

Those are the people and the advisers who, if the proposed legislation were passed, would be in a position to determine in detail the transport policies of the great conurbations of this country. They are not up to the job—they have proved that—and Parliament would be insane to give them the powers that they seek. They have done enough damage with the powers that they have and I hope that the House will not be stupid enough to give them any more.

8.14 pm

Mr. Michael Neubert (Romford)

Like my hon. Friend the Member for Ravensbourne (Mr. Hunt), I speak not as a transport specialist but as a London Member whose constituents have a deep interest in the effective and efficient operation of both British Rail and London Transport. I speak for many thousands of ratepayers in welcoming the Bill, because it tries to remedy an intolerable burden for many who, under the previous scheme, did not benefit sufficiently to outweigh the extra levy imposed by the change in the GLC's London transport policy. The new policy increased the rates and caused the furore that we are now debating 11 months later.

The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) will recall that 18 months ago there was no great dissatisfaction with London Transport. Although some of his criticism may be valid, no general public dissatisfaction was voiced in the way that he asserts until the new GLC administration was elected, under the leadership of Mr. Ken Livingstone. The GLC then introduced an unreasonable and disruptive public transport policy for our capital.

Mr. Flannery

Claptrap.

Mr. Neubert

The hon. Gentleman will have his chance to speak if he catches Mr. Speaker's eye and doubtless he will exceed my own poor performance in that connection.

London Transport has had a high reputation—so high that its consultancy services are much sought after overseas and earn considerable revenue for Britain. The GLC's policies in the past 18 months have damaged that reputation, and it is now seen as a transport operation turned upside down for political motives. There is no doubt that political motivation was the reason for the change.

The hon. Member for Nuneaton (Mr. Huckfield) asserted that the elections in the major cities in the spring of last year amounted to a referendum on cheap fares. We all know that that is untrue. Elections are fought, won and lost on manifestos containing a wide range of policies. To suggest that one issue was voted on exclusively is to distort the picture. I speak only for London, not for the other major conurbations. Even if one were to accept the argument of the hon. Member for Nuneaton—I do not—the GLC came under Labour control by a net number of 3,000 votes. If 3,000 electors in a city of 10 million inhabitants had voted differently, London would be Conservative-controlled today and we should not be having this debate. If it was a referendum on cheap fares, the result was not convincing for such a major change of policy. It is overdoing it a bit to suggest that the only issue was cheap fares and that people understood it as such.

The hon. Member for Holborn and St. Pancras, South said that fares would be reduced by about one third. He is wrong. We are arguing not about the principles of subsidising fares, but about the size of subsidy. The hon. Gentleman should be more exact in his assertions. The election was fought on a policy of reducing fares not by about one third, but by one quarter. The hon. Gentleman may not believe that the difference is significant, but when people are burdened by rates and limited in what they can afford to pay, it is important that the issue should have been about a 25 per cent. reduction, not the 32 per cent. that it became. In a proper referendum, the question about the size of subsidy would be carefully phrased. The issue would be argued in measured terms. There would not be a radical change introduced overnight, which has caused the present ructions.

The London public should have been told about the extra costs, the 568 net increase in staff and the extra buses put on under-used routes. Whether people wish to use the buses does not matter much to Labour Members. They do not believe in supply and demand or the free play of the market. If they believe that people need buses, they provide the buses. If people do not travel on them, they are at fault because they choose to travel by more convenient means, such as private cars. In the meantime, the burden on the ratepayers increases.

The burden is inequitable. My hon. Friend the Member for Ravensbourne mentioned the lack of underground services in his constituency. In my constituency, on the other side of the river, we have no underground service either, although the buses are heavily used. The hon. Member for Aberdeen, North (Mr. Hughes) said that ratepayers must expect to pay for services that they do not enjoy, but we expect that in local government. One cannot always enjoy the services for which one pays, but at least those services are available. If one does not have children, one cannot enjoy the education services provided, but if one has children the education system is free. There is no underground service to Romford and Ravensbourne, but the ratepayers were asked to subsidise people in other boroughs and from other countries and those who could well afford to pay underground fares. They obtained no immediate benefit from the extra burden. They could not, because the network—the point is not fully appreciated by Labour Members—is unevenly spread. That point must be taken into account when one considers public transport subsidy in London.

Mr. Dobson

Does the hon. Member for Romford (Mr. Neubert) believe that it is unfair and unreasonable that those who live in a rural area with no railway service should, through their taxes, subsidise the British Rail lines that serve his constituency and that of the hon. Member for Ravensbourne (Mr. Hunt)?

Mr. Neubert

Yes, because that is a national network of British Rail services. In this debate we are discussing not the general transport grant that is available to British Rail and to London Transport, but the extra financing of London Transport through the rates. It is especially iniquitous that the financing is carried out by the GLC, which is not directly accountable to those who must pay the extra rate. That is another fault in the proposals advanced by Labour Members. They would be the first on their feet to ask for accountability in the House, but the GLC can impose as much extra levy as it wishes and there is no accountability to those who must pay it. The levy is imposed through the London boroughs, which must take the rap for the profligacy of the GLC. The sooner the matter is remedied, the better.

When the Association of Metropolitan Authorities, of which I have the honour to be vice-president, says that if the Bill goes through in its present form it will mean that local authority freedom in relation to public transport will be dead it does itself, and me as vice president, a disservice, because that is manifestly untrue. The Bill tries to constrain the extra rates that transport authorities can levy in order to finance operations. I support that fully, because all hon. Members agree on the need for public transport subsidies. The problem is the amount of subsidy. That can be restrained either by the good sense of those who administer the system or by the intervention of a third party. If the third party must be the Secretary of State, so be it, but there must be a limit.

To argue that democracy through the ballot box is sufficient is not true. Elections are held every four years and are fought on many issues. The GLC was elected by such a narrow margin that it is not sufficient authority for the radical changes introduced by Ken Livingstone and his colleagues. They wished to create turbulence that would in turn create conditions for change in the political direction that they wished to follow.

I had the good fortune earlier this year to go on a study tour of the United States. It was in the aftermath of the controversial matter which arose 11 months ago and affected my constituency particularly. I chose to go to four major cities in the United States to study their public transport systems. I went to Cleveland, Minneapolis-St. Paul, San Francisco and Atlanta. Hon. Members will not be surprised to hear that each of those transport systems is heavily subsidised. The debate will range over the extent to which public transport should be subsidised.

I found that in the United States the constraint was rather different. The constraint there was not a matter of the Secretary of State—or his equivalent—laying down the level of grant that he considered reasonable after the submission of plans. American ratepayers vote on a separate issue—a sort of referendum—and decide the extra burden of rates that they will pay for their public transport. By different means that is translated into a fixed amount. The public transport authorities in America at least have to keep within the limit imposed on them by the decision of their electorate. That seems to be a much fairer system, but it begs the question—not one that greatly occupies the minds of Labour Members—how to reduce costs and keep the operations efficient. Anyone can spend up to a budget limit, but whether that limit needs to be reached is another matter entirely.

We have to devise something that is not only reasonable in the demands that it makes on those who are paying for the system but guarantees efficiency and cost saving. I shall be looking to the Secretary of State, in the plans submitted to him by the transport authorities, to insist upon efficient manning levels and proper capital investment, and not to accept madcap revenue schemes which fritter money away and leave the travelling public worse off years later in having to pay higher and higher fares.

Labour Members constantly talk about cheap fares, and that is the sole focus of their interest. They rarely mention the need to reduce costs.

Mr. Bradley

rose—

Mr. Neubert

The hon. Member for Leicester, East (Mr. Bradley) will forgive me for having missed his speech. I am not criticising everybody on the Opposition Benches, but I had the rather doubtful privilege of listening to the hon. Member for Nuneaton, who talked about cheap fares for most of the time and scarcely mentioned cost reduction. It is important to devise a system to reduce costs; otherwise expenditure can rise without any limitation whatever and people will not get value for money.

My hon. Friends have already mentioned that London Transport staff, as soon as Ken Livingstone came to County Hall, were given an extra 3 per cent. over the 8 per cent. already agreed. That was entirely unwarranted. In addition, all London Transport staff received £50 to compensate them for the fact that their travel concession was reduced in value because the fares were reduced. That was monstrous, and I am sure that most reasonable people would agree.

We must return to the system under which there is some limitation, as there now has to be on the general rate. There will be such a limitation, in terms of transport, as a result of the Bill. General limits will be imposed and public transport authorities will be free, within those limits, to devise a good system. It will not remove the freedom of the transport authorities. It will give them enormous scope, within that budgetary limit, to do what they think best for the people in their cities.

It may be that people in the so-called Socialist Republic of South Yorkshire were prepared to vote for a very high subsidy, but that is not the case in London. In any event, it is outside the law. No authority is permitted by referendum to breach the law, although that is what was done by the GLC. That is why the GLC was successfully challenged by Bromley council.

Mr. Flannery

The hon. Gentleman has uttered at least half a dozen untruths.

Mr. Neubert

We all wish to see a high quality of public transport operation in the capital city and in other cities throughout Britain, but it cannot be done by theory. It cannot be done by unreasonable moves by Socialist authorities which believe that, by spending money as though there were no tomorrow, they can achieve a change in the pattern of people's preferences. They cannot. The increases, which the hon. Member for Holborn and St. Pancras, South found so encouraging, are insignificant.

At the margin there will always be people who are prepared to take advantage of the opportunity of cheap fares and are prepared to switch from other services which then run at a loss. British Rail has incurred losses in its passenger revenue as a result of cheap fares. As my hon. Friend the Member for Wellingborough (Mr. Fry) said, if we are to have subsidies, they must be co-ordinated because, if they get out of balance while trying to help one service, another service will be damaged. I, too, have given examples of that in the past.

We have to ensure that ratepayers as a whole get a fair crack of the whip so that they will be prepared to contribute to the operation of public transport in London, but it must not be an unreasonable burden. To the extent that the Bill ensures that the ring is held and the different interests are balanced, I welcome it.

8.30 pm

Miss Joan Maynard (Sheffield, Brightside)

I am sorry that the Secretary of State is not here, because he made great play in opening his speech about spiralling subsidy. I noticed that he did not refer very much to spiralling fares, which in some areas have spiralled buses out of existence. Many of those are Tory-controlled and rural areas.

Surely it is more sensible to subsidise the buses and have people riding in them than not to subsidise them and have them either empty or not running. Where is the efficiency in that type of system? We have heard a great deal about efficiency today.

We also heard a reference from Conservative Members to political experiments. That is a cat out of the bag. The Bill is really about the hatred of Conservative Members when they see transport run on Socialist lines as South Yorkshire has done and the GLC tried to do. Conservative Members are not prepared to tolerate even that small piece of Socialism because they know that when people see it in action they will support it.

The Bill is a further interference with local democracy. For almost eight years, South Yorkshire electors have been voting for the present transport policy. We have heard about the opposition from business people. When there was a threat to the cheap fares policy in South Yorkshire, those who own and run shops in Sheffield were among the campaigners against the Government and their attempt to cut out the cheap fares policy. They knew that their businesses would suffer unless people were able to travel to the centre of Sheffield to shop.

We have again heard the argument that higher rates have created greater unemployment in Sheffield and South Yorkshire than in other areas. The figures throughout the country show how untrue that argument is.

We are told that the Bill is designed to clarify the legal position, but, as many hon. Members have said, the Bill makes the legal position no clearer than it is now. Councillors will still not know what level of subsidy will make them liable to surcharge. I hope that a Labour Government will introduce retrospective legislation to remove any financial penalties that may follow when councillors apply subsidies that are challenged in the courts. If the Government can introduce retrospective legislation to indemnify scabs who will not join their appropriate trade union but who take all the benefits that that union is prepared to win for them, we can introduce retrospective legislation to indemnify democratically elected councillors who are surcharged for carrying out their electors' mandate.

We have heard much about South Yorkshire's policy. Its five main elements are the containment of fares—one can travel three miles for 8p in Sheffield, which is good value for money—the provision for the needs of the young and the elderly, the improvement of services, the greater convenience of passengers and a higher standard of environmental and traffic management.

Bus fares have been maintained at January 1975 levels and rail fares on supported local services have been maintained at April 1977 levels. Concessionary schemes enable the elderly and the disabled to travel free during off-peak periods, and children travel at about one quarter of the adult rate. The fare for an average journey of two and a half miles is 7p in South Yorkshire, compared with between 27p and 45p in other metropolitan areas.

Transport needs are kept under constant review. We look at the needs of urban and rural areas and at the need for new developments to ensure adequate services. The result of that policy has been full buses instead of empty ones.

About 95 per cent. of the population of the county live within 800 metres of a bus service, with at least one bus per hour and usually more. Bus and rail services are being integrated where possible to ensure that they complement, rather than compete with, each other.

A detailed assessment of passenger transport systems for the future has been started. The planning referred to in the Bill is already being undertaken in South Yorkshire. Since 1976 passenger journeys in South Yorkshire PTE buses have been increased by 7.1 per cent., while other metropolitan PTEs show an average decline of 22.4 per cent. That is a measurement of the success of our policy and we will not accept a rundown of our public transport system.

Our transport policy has resulted in a steadily increasing use of buses and rail services in the county since 1974. The use of public transport has declined dramatically in comparable parts of the country, but it has increased in our county. For example, the percentage of journeys to work by bus in South Yorkshire is about twice the national average, and another great benefit of the policy is that congestion is reduced in central urban areas.

Let me give the House an example of what happened in London on the day of the tube strike. I spent half an hour one morning trying to get on a bus and while I was waiting I counted the cars that passed me in one direction. About 300 of those cars contained only one person. Surely that cannot be good for a city. Let hon. Members consider the pollution and congestion that must be caused and the fact that parking facilities have to be provided for all those cars. That is surely the economics of bedlam.

Other benefits of South Yorkshire's cheap fares policy are fewer accidents as congestion is reduced and fuel savings because fewer cars are used.

We must put more money, not less, into public transport, including the railways. Our railway system is starved of investment. If it were not for the devotion to their work of railway staff there would be more accidents, but how can men and women work efficiently with worn-out rolling stock?

A good public transport system, irrespective of whether it pays for itself, is a social necessity in a civilised society. No public transport system in the world runs without considerable public subsidy. If the subsidies paid in this country are compared to those paid in other countries, it will be found that ours are generally far lower. The Tory Government have, by their attacks, turned transport into a key issue. Labour authorities, such as the GLC and South Yorkshire, and the trade unions have fought tooth and nail against cuts in services, privatisation and job losses. Now the Government are renewing the attack through this Bill.

There is much more that I could say but I know that other hon. Members wish to speak. This is the fourth Transport Bill that the Government have introduced in three years. The Tories are always saying that they want fewer Bills and less legislation. In fact, the Government have put through the House a record number of Bills. What they mean, of course, is that they want fewer Bills, or no Bills at all, when Labour is in power. When legislation did not achieve what they wanted, they allowed the judges to decide how public transport in London and the big cities should be run. They have been able to depend upon their class friends in the courts to do the job for them. What is the point of local elections if, having gained victory, one is not allowed to implement one's policies because they are Socialist policies?

The party that talks so much about freedom and democracy is once again attacking freedom and democracy when the results are not what they and their class want. This Bill is a further example of that attitude in practice. We on the Labour Benches will oppose the Bill root and branch at all stages. It is a Bill that will hurt the working class people we are here to represent. They are the people who mainly use public transport.

8.42 pm

Mr. Michael Brown (Brigg and Scunthorpe)

I hope that the hon. Member for Sheffield, Brightside (Miss Maynard) will forgive me if I do not take up her points about public transport. I wish to relate my remarks to clause 11, which deals with a completely different subject, the National Dock Labour Board.

The House will be aware that I represent a constituency that is bordered by the rivers Trent and Humber. The constituency has many successful private wharves which are outside the national dock labour scheme. They employ a large number of people, without any charge being made on the public purse. They competed in the market place against the nationalised British Transport Docks Board, as they do against its successor, Associated British Ports, which was to some extent privatised by last year's Transport Act.

I shall understand if my hon. Friend is unable to reply to the point that I raise. There are implications for the Department of Employment. My hon. Friend might, however, be able to say whether a Minister from the Department of Employment will be present when clause 11 is discussed in Committee. My worry is that, following previous Bills and orders laid before the House late at night, there is wrapped up in clause 11 the fact that the National Dock Labour Board will not be liable to pay the £23.8 million borrowed from the Secretary of State, which formed part of the consolidated loan in the early part of this year.

I presume that that money is to pay for redundancies and other costs associated with redundancies, especially in London and Liverpool. One acknowledges the problems falling upon those docks in terms of redundancy charges, but I cannot help feeling that there will be further opportunities for the National Dock Labour Board to seek even more relief from the Government. I am concerned about the effect on private wharves scattered around the country, which are handling an ever-increasing amount of trade because they are more efficient. There is no unfair subsidy to the private sector. Private wharves have to run their operations in competition with the subsidised public docks.

In my constituency, for example, we have the public docks of Immingham, Grimsby and Hull at the end of the River Humber, while 20 miles downstream the private sector has been growing in the past 10 or 15 years. It has been growing at a vast and dramatic rate, and it did so particularly during the controversy over the registration required by the Act introduced by the Labour Administration. I am concerned that at a time when importers and, more importantly, exporters, want to reduce their costs by using the private docks, which offer a better deal, those docks will face unfair competition because of the subsidy which is dressed up in this clause as a subsidy to assist redundancy.

I acknowledge that special arrangements have to be made to deal with redundancies, but I want an assurance that this is not the thin end of the wedge and that my right hon. Friend the Secretary of State for Transport will not be tempted to allow this concession to the National Dock Labour Board to become an invitation to return to him to ask for a blank cheque.

The Bill provides for the debt arising from severance payments in 1981 in London and Liverpool to be written off. This amounts to nearly £24 million. These provisions recognise the burden on other port employers following the large number of severances in London and Liverpool, but I hope that I can rely on my right hon. Friend to assure the House that it is still the Government's intention that no further grants will be available after 1982.

At a time of high unemployment, private wharf owners in my constituency have taken on several thousand men, and want an assurance that they will be able to compete fairly with the public sector. Therefore, I watch for things that might affect them. I usually find them in a little clause near the end of a Transport Bill, with the main attention concentrated elsewhere; for example, on the degree to which there should or should not be public subsidy for transport undertakings. When one represents a constituency such as mine, one is always a little suspicious, when a clause can have such a dramatic effect on the private wharves, and here I see that £23.8 million is provided by the way of redundancy money.

That is not all. Other measures have provided subsidies on previous occasions, and one cannot be blamed for wondering whether another unfair advantage is being given to the docks across the water from my constituency.

I hope that Department of Employment Ministers will listen carefully to the debate on clause 11 and realise that the private wharf owners look to the Government not to implement the provisions of the Dock Work Regulation Act 1976. I hope that when we discuss clause 11 my right hon. Friends in the Departments of Transport and Employment will recognise that the only way to prevent this sort of clause being written into a Bill is to introduce a measure that will relieve the Government of the obligations placed upon them by the 1976 Act.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Paul Dean)

The Front Bench speeches are expected to begin at 9.15 pm. I appeal for brief contributions so that few hon. Members are disappointed.

8.50 pm

Mr. Harry Cowans (Newcastle upon Tyne, Central)

There is at least some recognition in the House that there is a part of the country north of Manchester. I want to destroy a few myths which were sincerely presented by the Secretary of State but are nevertheless wrong. The first is the idea that the Select Committee report gave birth to the Bill. It is a pity that the report was used selectively. It clearly advocated local democracy and local decisions. Peter Masefield recommended a pound for pound input. The Select Committee unanimously agreed that it should be a matter for local authorities. That is opposite to the views in the Bill.

Another myth is that, by some divine right, only Conservative Members can speak for ratepayers. There are large tracts of Britain where the Tory Party has no mandate and its members have no right to speak for the ratepayers. That applies to my area. It would be difficult to find fewer people who support Conservative policies than in the Tyne and Wear area.

Much has been said about big business in the cities. Tyne and Wear has the nearest thing possible to a completely integrated transport system. Contrary to what has been said, most ratepayers are happy with it. By what right does the Secretary of State insist that he knows best? That is the nub of the Bill. The Secretary of State has set himself up as judge, jury and executioner. He is creating a minefield out of a millpond. It will provide work for the lawyers. By no stretch of the imagination has he clarified the position. Indeed, he has made it worse. He is insisting that his guidelines are followed, yet no one in the House understands them. That is another negation of democracy. The House will not have an opportunity to debate the guidelines. The Secretary of State believes that he knows what is the best value for money for ratepayers—regardless of how they vote through the ballot box. I challenge that.

There is a lot more at stake than fares. Conservative Members often say that reducing fares does not increase ridership. The hon. Member for Wellingborough (Mr. Fry) challenged me to produce figures. I have sat here for some time, and I can give him the figures. During the past year the Government's policies have created deep recession in the North-East, yet ridership has increased from 74 million to 76 million—an increase of about 3 per cent. The Secretary of State's figure of £18 million for that area will mean a fares increase of 25 per cent. or a reduction in services, or both.

The Bill deals with concessionary fares. On the surface it appears that the Secretary of State is taking steps to stop them being political footballs. However, an old age pensioner will derive no benefit from having a pass in his pocket entitling him to concessionary fares if the services that are available to him are reduced. That is exactly what will happen.

I hope that a local authority will challenge the Secretary of State. The legal system works both ways. It seems that the right hon. Gentleman is saying, "I will lay down the guidelines and you can please yourselves whether you ignore them, but, if you do, you can be surcharged and taken to court." Ratepayers in the area that I represent may want to take the right hon. Gentleman to court. They may think that his guidelines will not produce the best services for the community. The right hon. Gentleman said that the Bill was not a negation of democracy. With respect, many of the arguments that have been advanced in this debate should more properly have been adduced in a local authority debating chamber. The right hon. Gentleman is removing from local parties the right to present manifestos to their electorates. He wants to have his cake and eat it. That must be so because he has no manifesto commitment to implement that which he has introduced.

In 1979, the Conservative Party's manifesto stated loud and clear that a Conservative Government would free local government from all the alleged restrictions that the Labour Government had placed on it. Many Conservative authorities are now saying "Come back Labour Government, all is forgiven." They now recognise the restrictions that the right hon. Gentleman and his colleague have introduced.

The Secretary of State for Employment urged my constituents and others to get on their bikes to look for work. My constituents do not need bikes, because at present they can afford metro fares. However, if the Bill is enacted, they will not be able to afford to travel.

Behind this Bill is the Government's dogmatic approach. They want to privatise integrated transport systems. They want to remove the lucrative parts of these systems and to give them to their friends. They do not mind whether or not the systems work. If the systems go down the dell when the lucrative parts have been removed, they will be prepared to let old age pensioners, school children and everyone else take the hindmost.

8.58 pm

Mr. Ronald W. Brown (Hackney, South and Shoreditch)

I agree with the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) about the Secretary of State's guidelines. That being so, I shall not rehearse all his arguments. I was surprised to hear the right hon. Gentleman argue that he was doing us all a favour by introducing the Bill. He said many times that the Bill will clarify the law, but I fail to understand how he can advance that argument. Paragraph 18 of the White Paper suggests that the Bill will have three effects. It is said that it will show ratepayers and others how the subsidising authority is spending the money. The right hon. Gentleman knows that that is not right.

In some respects the Bill is the result of the state of public transport in London. The right hon. Gentleman has introduced a pestilence further to damage public transport in London. The right hon. Gentleman knows that the problems in London are unique. We have a basic problem. We have discussed it many times in transport debates. I have continually asked the right hon. Gentleman to examine the whole London transport system, not just the London Transport Executive. We must have an integrated system, otherwise it will never work.

I am sorry that the hon. Member for Romford (Mr. Neubert) has left the Chamber. His constituents travel into my area by car day after day. They use their cars and block the roads in my constituency. It is impossible to move there. His constituents should be persuaded to come into London by rail, bus or underground. The hon. Member said that he did not have an underground service. However, the underground goes to Epping in Essex. He would not have to go far to pick it up. Unless we can get the system organised, we shall be in a great deal of trouble.

Paragraph 21 of the White Paper states: In assessing value for money, account will be taken of the benefits to users of public transport and to other road users in terms of reduced congestion and accidents.

I applaud that. However, where is it in the Bill? It does not appear. I hope that the Secretary of State will accept an amendment from me that in clause 3(4) there should be a paragraph (d) stating that benefits to other users in terms of reduced congestion and accidents will be taken into account.

The right hon. Gentleman discussed the guidelines in detail. I intervened in his speech to try to find out about them. He must describe what they are. He referred to clause 4, but it does not pin down the Secretary of State on what he has taken into account. Clause 4(6) states: The matters by reference to which the guidance of the Secretary of State under subsection (5) above may be given shall include—

1. (a) what appears to him to be the appropriate national level of expenditure by Authorities on revenue grants".

That is only a subjective judgment. Therefore, I hope that the Secretary of State will accept an amendment, be clause 3(6), to add: the Secretary of State shall seek the approval of Parliament for the proposed guidelines annually, specifying the basis on which benefits have been balanced against costs. If he does that, we shall be able to check the Secretary of State's value judgments.

The Secretary of State also mentioned the problems of priorities for transport and the proposed allocation of finance for highways and public transport. Therefore, I hope that he will accept an amendment, which would be clause 3(7) which would state that the Secretary of State shall issue an annual White Paper specifying the Government's priorities for transport and the proposed allocation of finance to highways and public transport. That will give us the opportunity annually throughout the three-year rolling programme, which is being updated, to see how he is dealing with the issues that arise from time to time.

Clause 7 states: An Authority shall, forthwith after the passing of this Act, and subsequently when the Secretary of State so requires, cause a review to be made of the organisation of the Executive".

London Transport is becoming a little fed up with being reviewed. It has been reviewed by many people—only recently by a Select Committee. I hope that if the Bill becomes law the London Transport Executive can be excused from the first review and will be reviewed later. I hope that the Secretary of State will accept from me an amendment to clause 7(1) to make the London Transport Executive an exception to the need for a review as one has recently been carried out by the Select Committee on Transport.

I feel strongly that the criteria for assessing the value of the Bill will be based on how far it will contribute to solving transport difficulties in London. I believe that the Bill fails in that. Nothing in the Bill will achieve that objective.

My hon. Friend the Member for Leicester, East (Mr. Bradley) was right when he said that the Secretary of State had missed an opportunity not to get bogged down in this rather silly business of taking action against local government. As I pleaded with him in December and February, he would have been far better employed creating a rapport between himself and the local authorities and transport authorities. Nothing will be achieved by fighting. Unless they get together, we shall never have a proper transport system in London.

9.6 pm

Ms Harriet Harman (Peckham)

For the Government to say that the Bill is about clarification and forward planning is nothing more than a political fig-leaf. It is really about forcing up fares and cutting vital public services. It is another hammer blow to people who live in inner London. The Bill denies Londoners the right to decide their own transport needs, and is a hammer blow also to local democracy.

It is a bitter irony that when Freddie Laker tries to take people across the Atlantic cheaply, he is knighted, but when Ken Livingstone tries to take people across London cheaply he receives an injunction. All hon. Members are paid enough to have a car and have free car parking space available in the centre of London. Life is not like that outside the House or in Peckham in south-east London, where only about one third of households have a car, and cheap and plentiful public transport is vital.

Pensioners will be affected by the Bill. Most pensioners live on their own and a frequent bus service, a trip to the market to see friends, can mean the difference between loneliness and isolation and playing a full part in the community. The free bus pass is not worth a great deal if it means that pensioners have to stand on windy street corners waiting for a bus for more than half an hour. It will mean that they simply will not go out.

Cheap and frequent buses are important also for those whom this Government's policies have thrown on the dole. They need them to help search for scarce jobs, although for people in Peckham that is an increasingly unrealistic prospect. But it will help combat the loneliness and isolation of joblessness. Women rely on London Transport. In the one third of Peckham households that have a car, it is usually the men who have the use of that car, whereas it is women who do the shopping, look in to see elderly relatives, take the kids to school and go to work if they are lucky enough to have a job.

It is those local services that go backwards and forwards across London rather than those that go in and out of London which will be the first to go under the cuts imposed by this Bill. Women rely on public transport not only during the day but at night. If the Government are interested in cutting crime and attacks on women, they should not cut public transport, because that will mean that women will have to spend a long time waiting on lonely tube stations or streets for public transport and make them vulnerable to attack. If they were interested in safety in our inner cities, the Government would not put the measure through.

The GLC's "Fares Fair" policy meant cheaper fares, more passengers and greater efficiency. It also meant fewer cars, less pollution and fewer road accidents. Increasingly, without this policy, areas such as Peckham which lie between central London and the suburbs are condemned to be used as a race track for people going to work in the city by car.

The Government should look back to the days when people had to pay privately to have sewage taken away. Many simply threw the sewage into the streets. Similarly, with public transport being expensive, the roads are clogged not with sewage but with cars.

This morning I received a letter from a Peckham ratepayer stating: I live in the main road and am often woken up with the thundering noise of traffic passing through and now it will be even worse with … fumes, dirt and smoke and vibration. The people who pass these bills never consider the human element, because they don't have to live under such conditions. It does appear that people don't matter any more in this world we live in now. The Bill means more misery for that woman. The GLC "Fares Fair" and Socialist transport policies gave such people a glimmer of hope. The Government are again resolutely turning their back on those who live in our inner cities.

9.11 pm

Mr. Peter Hardy (Rother Valley)

I join my colleagues in protesting about this foolish measure. I did not expect the Government to proceed with it. I thought they would not throw away their scapegoat for unemployment and the other economic problems in South Yorkshire. When the Bill becomes law the Government will have little left with which to divert attention. The Secretary of State demonstrated that approach when he said that the South Yorkshire transport policy was an engine of unemployment. One would imagine from that that it was responsible for all our ills.

Under the Bill the average household in South Yorkshire will pay £25 a year less in rates. The shopkeepers who have been whipped up to criticise South Yorkshire's transport policy will have an average rate reduction of £190. Some might lose customers who would otherwise travel by bus. We have few large employers of labour in South Yorkshire, but even an average large factory will have only £18,000 a year rate reduction. They need a great deal more than that to help them to recover from the Government's foolish leadership.

Half the households in South Yorkshire do not have a car. If fares are quadrupled, the average family of four will pay £244 instead of £106 in fares, so the £25 rate reduction will not go far. Even in families with a car some members have to travel by bus, and their fares will rise from £32 to £88 a year.

The measure will prevent the hon. Member for Sheffield, Hallam, (Mr. Osborn) from describing members of the Labour movement in South Yorkshire, whether Left, Right or Centre, as republican revolutionaries. I had the good fortune to follow him in a debate in Strasbourg recently. I hope that I dealt effectively with what he said. After the debate colleagues from Germany, France, Norway, Sweden and other countries in Europe told me that they did not understand the fuss and asked whether British Conservatives believed in public transport. The Minister has shown that they do not feel that public transport is necessary.

9.14 pm

Mr. Robert Hughes (Aberdeen, North)

This has been an astonishing debate. It has been a debate of two halves. Conservative Members have spoken solely about cheap fares and rates, and my hon. Friends have set cheap fares policies in context. None of the authorities with which we are concerned—the metropolitan authorities and the GLC—has regarded cheap fares as the only matter that comes into transport policy locally. Different authorities have tried to introduce not only cheap fares, but better services for the community. They have tried to provide better services and better coaches in which people can travel. That concept of transport policy has been under consideration.

Conservative Members seem to have no concept of service. Almost every Conservative Member whined about the level of rates and the burden that commercial ratepayers must bear. They did not take into account the benefits of a cheap transport service to commercial ratepayers—cheaper transport enabling people to travel to spend money in shops. It is difficult in the circumstances to define a good service. It is difficult to put a figure on the number of buses and services that an authority provides.

I came across a couple of quotations today that go some way towards assessing service. The first is as follows: About one person in 10 in Britain today has difficulty in getting about. Some 5 million people—ranging from those with severe disabilities, to the elderly, and to men and women who would never regard themselves as 'disabled', but who for a variety of physical or mental reasons, cannot travel easily. Only if they have ever been housebound themselves can 'able-bodied' begin to understand what it means to travel freely and easily. Anxieties and isolation multiply. Opportunities for work, for holidays, for friendships diminish. A 'normal' life is impossible. And the one desire is to find a way from home.

Those words should be familiar to the Secretary of State. They come from a joint exhibition by the Department of Transport, British Rail and the National Bus Company that is currently in the Upper Waiting Room of the House.

The exhibition is primarily concerned with the disabled and the help that authorities can provide. Nevertheless, the theme of anxiety and isolation can be applied generally. We know that housewives and many others who cannot travel into city centres suffer from severe anxiety. The Secretary of State should wander to the Upper Committee Room and examine the joint exhibition.

Throughout the debate, hon. Members on both sides of the House have rightly complained about the combination of a White Paper and a Bill being published on the same day and the short time that there has been for meaningful consultation. As far as I can discover, there is no precedent for a Bill and a White Paper being produced at the same time. It seems that the Secretary of State is trying to rewrite Erskine May as well as transport law. The current edition of Erskin May states: It was at one time an accepted practice where circumstances appeared to require it, to initiate legislation by the preliminary discussion of resolutions in Committee of the whole House. This procedure has now been superseded, in the case of government bills, by the practice of prior presentation to Parliament of papers setting out the principles of the legislation that is proposed. Such papers may be the subject of debate, when the House has an opportunity to express its opinion before legislation is finally decided upon.

It is often said that a good Speaker produces a pecedent for Erskine May. I have never heard that said of a Secretary of State for Transport. He appears to have done so, none the less. I suggest that 10 days is too little time to discuss a measure. Indeed, there have been only five working days, as the Bill was published on Friday. Unless an authority knew the White Paper and the Bill were to be published on Friday—the Opposition did not—it could not have got copies of them until Monday. If the authority was to discuss the matter and exercise any influence on the Secretary of State before Second Reading today, that authority would need to have discussed it last Friday.

Effectively, we have had only five working days to discuss this measure. It is not goood enough for the Secretary of State to say that he tried to discuss matters with the AMA and the GLC and that they refused to see him. They could not see him, because he would not say what his proposals were. He was merely asking them to provide information on which he would then decide policy, without discussing that policy with them. That is a long way from consultation.

The right hon. Gentleman sought to claim that in no sense were these proposals an attack on local democracy. That theme was developed by a number of his hon. Friends. However, Labour Members are clear that it is a direct attack on local democracy. One need only look at the Bill to see that that is so. It shifts the onus for transport planning from the elected transport authority to the transport executive. The authority is then put in a reactive position.

The initial drawing up of the transport plan is laid fairly and squarely on the executive. Only when the three-year plan is complete does it go to the elected authority to see whether it is acceptable. The elected authority must then pass it on to the Secretary of State who will take further action. In no sense can that be regarded as protecting local democracy. I cannot think of a proper analogy to demonstrate how it works. That may be how the Secretary of State works. It may be that his officials initiate policy and that he passively receives it to say whether it is acceptable. However, I am sure that even the Prime Minister would agree that that is not the proper way to run a Government Department. She would quite properly say that it is the Government's duty to initiate policy and that it is the duty of the Civil Service to carry it out. If that is true of national democracy, it is certainly true of local democracy.

In fairness, we must consider the contradictions in the White Paper. The Secretary of State said that both the White Paper and the Bill clarify the law. The idea that he is bringing this measure forward only because he was asked to do so by the local authorities is stretching matters somewhat. They were not asking him to clarify the law. They were saying, "For God's sake, we are in a mess because of the Bromley v. GLC judgments and we must therefore have some clarification."

It is also worth noting when discussing the Law Lords' judgments that the Minister for Health, the hon. and learned Member for Rushcliffe (Mr. Clarke), when at the Department of Transport, and the Solicitor-General told the House that the Bromley v. GLC judgments had no effect whatever outside London. They also said that the judgments had no effect whatever on the GLC's capacity to pay concessionary fares. Incidentally, the White Paper says that the Government acted immediately to put that matter right. They did not. They had to be pressed time and again by the Labour Opposition before they eventually conceded that the law was grey.

As well as the GLC, other authorities have been brought within the scope of the law. How does the Secretary of State deal with this matter? Paragraph 3 of the White Paper states: This process"— that is, the smooth operation of transport— has been threatened by recent uncertainties about the role and legality of subsidy. That is why the Government is now bringing forward legislation to remove these uncertainties. A clear and consistent legal framework is needed for the payment of reasonable levels of subsidy. That is what we would all like to see. However, paragraph 12 states: The Government has therefore concluded that legislation is needed which will provide for a reasonable, stable and lawful subsidy regime.

Paragraph 19, which has already been quoted, states: second, legal challenge of the reasonableness of the subsidy on transport grounds is unlikely to succeed where the plan has been produced within the spirit of the new system and the subsidy is within the level indicated by the Secretary of State. Whilst it will not necessarily be unlawful for an Authority to pay a subsidy in excess of the indicated level, if they do they will not have the protection of the new provisions. The councillors will know they run the risk of surcharge.

Two matters arise here. First, the Secretary of State says that a challenge is "unlikely to succeed", but that is merely his opinion. He cannot know. Secondly, he says that although the subsidy is "not necessarily … unlawful" the council will not be protected and will run the risk of surcharge. Such passages do not clarify the law. They obfuscate it.

The Bill itself is no better. Clause 5 refers back to clause 4(1), which in turn refers back to clause 3, and there is constant to-ing and fro-ing between the various executives and authorities.

The explanatory and financial memorandum to the Bill clearly states that when the Secretary of State gives his guidance The Authority must take that guidance into account". However, the authority is perfectly entitled to take the guidance into account and then to disregard it or go beyond it, so the situation is far from clear.

One of the problems of bringing the law into transport and other local government matters is that, according to the Law Lords' judgments and the most learned lawyers in the land, the courts do not read Hansard to determine the aim of legislation. They consider only the legislation. Will the courts take account of the White Paper in interpreting the legislation? If so, the Secretary of State is encouraging ratepayers to challenge transport authorities, and virtually telling the courts that although an action is not necessarily unlawful, if it goes beyond the guidelines it should be regarded as outwith the law. That, again, is very far from clear.

There are further contradictions, some of which would qualify for a book of fourth-form essay howlers. In the final section of the White Paper, entitled The Framework for the Future", paragraph 31 contains the following statement: A major consideration is the need to ensure that public transport is given a firm and assured future, and that the institutional arrangements provide for this. The proposals now being brought forward tackle immediately the problems relating to passenger transport subsidies in London and the Metropolitan Counties. The Government believes that this is necessary to provide stability. So far so good, but the last sentence is a pearl: The Government is examining whether a more fundamental reorganisation of transport responsibilities is now required.

In his speech the Secretary of State referred only to the GLC, but the White Paper refers to the Select Committee and also tells us that he is awaiting the report of the Serpell committee on railway financing. It is not merely the GLC responsibility that is in line for fundamental reorganisation, but every aspect of transport responsibilities. After three years and heaven knows how many Transport Bills, the Secretary of State still does not know what he wants. It is a disgrace that he should make such a statement. Apart from not knowing what he wants, the Secretary of State does not even understand his own Bill.

I had an exchange with the Secretary of State during his opening remarks about who initiates the drawing up of plans. It is important to know. Clause 3(1) states: It shall be the duty of an Executive in each year to prepare in accordance with this section and submit to the Authority a plan containing their proposals for the next three years. So far so good, but subsection (5) also makes it clear that In preparing the plan the Executive shall take into account any advice given by the Secretary of State … and in preparing the estimates"— the estimates of expenditure— referred to in subsection (4) above the Executive shall take into account any advice given by him as to the method of determining the matters referred to in paragraphs (a) to (c) of that subsection. How can the executive initiate plans on the advice of the Secretary of State when the Secretary of State has not given advice in the first place?

The first stage in the drawing up of plans each year is that the Secretary of State writes to the authorities and to the GLC saying, "Here is my advice on a range of matters which you must consider in drawing up your plans." The plans are drawn up after the advice is considered. They are then sent to the Secretary of State, who eventually returns them to the authority. The process of to-ing and fro-ing will take months and months. If that is not interference with local democracy, I do not know what is.

Several of my hon. Friends have drawn attention to clauses 7 and 8 relating to privatisation. Clause 7 directs that the executive shall initiate management changes if the Secretary of State requires it. One such change—again under the direction of the Secretary of State—relates to the keeping of separate accounts. We all know what that means, because we have seen it with the National Bus Company. The keeping of separate accounts is a precursor to privatisation. I prefer to use the word "piratisation" rather than "privatisation", because the Conservative Party is pirating public assets.

At the beginning of clause 8 we find the Secretary of State interfering with work of the passenger transport executives. Subsection (1) states that the executive shall invite tenders. It is true that the authority may direct the executive to invite tenders, but the clause goes on to say that the executive shall accept tenders if, in its opinion, they show that the service can be run more cheaply. As the only services in which tenderers will be interested will he profitable, we know what will happen.

The Secretary of State explained it in a muddled way, but he is trying to force the setting up of separate accounts to identify profitable routes so that they can be sold off. The White Paper is clear about that. The White Paper also refers to catering and other services, but it includes transport services provided by any passenger transport executive.

As if that were not enough, a direct threat is contained in paragraph 29 of the White Paper, where it says: When accepting expenditure for Transport Supplementary Grant, the Secretary of State will take into account the progress made by the Authority and Executive in seeking cost-effective management structures and securing value for money from contracting-out services. We have heard very little from the Secretary of State about the guidelines that he will use to direct the authorities in the way that they run their plans and establish their fares and subsidies. Paragraph 29 of the White Paper provides that if the Secretary of State believes that the executives are not doing enough to sell services, he will cut their transport supplementary grants.

The Secretary of State tried to mislead the House—I hope not intentionally—when he said that the Labour Government reduced the transport supplementary grant to local authorities. We have figures to disprove that, which we shall use in Committee.

We are entitled to ask about the Government's and the Secretary of State's attitude to public transport. Some say that the Secretary of State is hostile to public transport, and there is undoubtedly an element of malice in his approach, but that is not my main charge against him. Some say that his failure to come to terms with public transport and the needs of the travelling public is due to incompetence. No one would say that he is the most competent Secretary of State or that he exudes confidence, but that is not my main charge against him either.

My main charge against the right hon. Gentleman is that he is indifferent towards his responsibilities. He failed as Secretary of State for Energy and is now like an old railway wagon, shunted into a siding to await final disposal and rusting and rotting away in the meantime. He has no concept of the importance of transport to the public. One can understand and forgive hostility and sympathise with incompetence, but indifference is unforgivable. The White Paper and the Bill show all those attributes.

What we need in such difficult times is a true appreciation of those who are served by public transport, those who plan and manage the services and those who work in public transport and serve the community. The White Paper failed totally to meet those criteria, and we shall vote against the Second Reading of the Bill.

9.36 pm

The Under-Secretary of State for Transport (Mr. Reginald Eyre)

As shown by the unconvincing end to the speech of the hon. Member for Aberdeen, North (Mr. Hughes), this debate has illustrated the fact that there are many misconceptions, some developed intentionally on the Opposition Benches, about the reasonable and sensible proposals of the Bill and its accompanying White Paper. Those misconceptions have led to many exaggerated statements from Opposition Members about the effects of the Bill. I shall restate the Government's aims in order to put those matters into perspective.

The Government acknowledge the importance of local transport services in our cities and wish to rescue them from the damage of uncertainty and to provide a framework of stability within which local transport can be improved. The Government support the wise use of subsidies to provide good but not wasteful services. That must be achieved by the transport executives under the aegis of the local transport authorities, which must provide good value for money. That is why the Bill establishes a reasonable process, which involves the transport executive and the local authority, for arriving at an appropriate subsidy.

Mr. Snape

Is that not a significant change from the present system? The Bill proposes that the responsibility for drawing up the three-year plans should rest with the passenger transport executives—non-elected bodies—which relegates county council transport committees to the role of consultative committees and no more. Is that not an attack on local government democracy?

Mr. Eyre

That is another basic misconception. The functions of the local transport executives and the local transport authorities continue, but when the authorities were established by the Labour Government they had a clear idea of the difference in functions. The professional experience is centred in the transport executives, which are responsible for all the planning. Then ultimately the LTA, as under our proposals, has the responsibility for deciding whether it is acceptable and fixing the level of subsidy. The hon. Gentleman has a misconception about it.

It will become clear that the payment of appropriate subsidy up to the protected level will be lawful. That will provide clarity as to the firm and lawful basis of subsidy. In that respect I disagree with the view expressed by the hon. Member for Leicester, East (Mr. Bradley). The process is essential because the cost of excessive subsidy falls upon the ratepayer and upon the taxpayer, and it is essential to strike a fair balance.

The Government's figures, published in the White Paper, would protect a total of £436 million of expenditure by London and the metropolitan counties on revenue subsidy for 1983–84. That is over and above provision of funds for capital projects and for concessionary fares.

What is a reasonable level? The capacity for growth in subsidy is huge. We have the first instalment of that in the subsidy figures that London and the metropolitan counties have been proposing—more than £600 million on bus and rail subsidies. That is more than two and half times as much as only three years ago. We have to face the fact—despite what was said by the hon. Member for Rother Valley (Mr. Hardy)—that it is in order to carry fewer passengers, so there is a very much increased subsidy and fewer passengers.

Mr. Hardy

rose—

Mr. Eyre

I hope that the hon. Gentleman will forgive me for not giving way. I have to try to reply to all the points raised in the debate.

If this year all authorities were to subsidise services to the extent that South Yorkshire is now doing, it would mean about £½ billion more coming from the ratepayers next year. I am sure that that would be unbearable and wholly unjustified. That is the heart of the matter.

As I have said, subsidies have to be paid for, and the costs fall on the ratepayer and on the taxpayer, so that, with all sense of responsibility, a balance must be struck. To pretend that transport subsidies can be increased without restraint would be to ignore the ever-present limitation upon total national resources and the need for the sensible allocation of resources between competing claims.

Mr. Jay

As we understand it, there is to be a legal maximum on the subsidy which can be paid. In the final analysis, who will decide that? Is it to be the Secretary of State or the local authority?

Mr. Eyre

It is to be decided on the basis of the very fair process described in the White Paper.

The high levels of revenue subsidy can have two particularly damaging effects on transport undertakings.

Mr. Jay

Who will take the final decision?

Mr. Eyre

Ultimately the local authority will have to take responsibility for the amount that it spends, and that is made clear in the White Paper.

High levels of revenue subsidy can have two particularly damaging effects on transport undertakings. The first is to drain off the resources available, and that in turn squeezes what can be afforded for capital improvements. That is eating the seed corn of the future with a vengeance. It slows down the provision of better and more reliable buses and rolling stock, and the benefits of one-man operation, automatic fare collection and other technological improvements. Secondly, as studies have shown too often—it is common to subsidy systems everywhere—the customer benefits from only a small part of each pound ostensibly paid on his behalf. The rest leaks away in slack cost control, restrictive practices, and archaic services suited to the needs of 10 years ago but not to the present day.

Contrary to what the hon. Member for Sheffield, Brightside (Miss Maynard) argued, there is nothing virtuous about high levels of support. I wonder how many people realise that South Yorkshire is now looking to its passengers to supply only 25 per cent. of its soaring costs. My hon. Friend the Member for Derbyshire, West (Mr. Parris) illustrated very well some weaknesses of the South Yorkshire position. Hon. Members should not be misled by the figures of extra patronage which are proclaimed there. They are minimal in relation to what they cost. Since embarking on present policies, South Yorkshire's expenditure on subsidies has increased by about 600 per cent.; passenger use has increased by only 7 per cent. It is not possible to justify such a small benefit against the background of such enormously increased subsidy.

Mr. Flannery

The Minister has missed out a fundamental fact. Every year the people of South Yorkshire vote overwhelmingly for that policy. In other words, they agree with that policy. The Minister said that they do not agree with it. It is only he and his Government who disagree with that policy.

Mr. Eyre

The hon. Gentleman must remember that the voting electorate in South Yorkshire pays only one quarter of the cost of its transport system. The balance—three quarters—comes from industrial and commercial ratepayers and the taxpayer generally.

I should like to deal for a moment with the write-off of the National Dock Labour Board debt which was referred to by my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) and the hon. Member for Aberdeen, North (Mr. Hughes). The debate today has naturally concentrated on part I of the Bill, but I should like to say a few words about the background of the debt write-off provided in part II.

Early in 1981 the Port of London Authority and the Mersey Docks and Harbour Company each had more than 1,000 surplus registered dock workers. The Government therefore decided to finance a special severance offer in those two ports under which the severance terms available under the national voluntary severance scheme were topped up for a limited period by up to £5,500. Although that special scheme was successful, it caused considerable problems for the NVSS. The Government therefore decided in the light of representations from the National Association of Port Employers that the NVSS should not be required to carry the burden of debt resulting from the exceptionally large number of severances which have been required since early 1981 in London and Liverpool. We have therefore been meeting the full cost of severancing these two ports since the beginning of this year. The write-off provided for in the Bill will put the NVSS in the same position as it would have been if we had met the full cost of such severances in 1981 as well. I have noted the suggestion made by my hon. Friend the Member for Brigg and Scunthorpe and we shall certainly see what can be done.

It is six months since we promised the House and the ports industry that we would be seeking parliamentary authority for this write-off. It was obviously in everyone's interest that the House should have the earliest opportunity to consider the legislation needed to implement the Government's package of assistance to the NVSS. In the light of the unusual pressure on parliamentary time, this Bill provides the first opportunity.

I should like now to return to the main purpose of the Bill and to certain aspects which were raised in an excellent speech by my hon. Friend the Member for Ravensbourne (Mr. Hunt), by my hon. Friend the Member for Romford (Mr. Neubert) and by the hon. Member for Holborn and St. Pancras, South (Mr. Dobson). There have been many comments about the effect that the Government's figure for protected expenditure will have on the general level of fares in London and the metropolitan councils. I do not believe that it would be right for me to comment in detail on possible fare increases by particular authorities, not least because the setting of fares and service levels is a matter for the authorities, acting in consultation with the executives.

I hope that instead of simply calculating the effect of the guidance figure on fares alone, authorities will take a more positive attitude and consider first whether any savings in costs can be made. There are a number of ways in which savings can be made, including the containing of costs and the tailoring of service provision to actual demand.

In some counties load factors are far too low—less than a dozen passengers in an average busload. On some routes there will be scope for reducing the frequency of services and considering whether 72-seat buses are the most cost-effective way of meeting a county's transport needs. Considerable savings can also be made by taking effective action to prevent fare evasion and fraud.

Those are the sorts of issue which authorities and executives should be considering if they are to provide an efficient and cost-effective service. Moreover, authorities have been assuming unacceptably high rates of inflation—as high as 10 per cent.—in drawing up their plans. Such estimates may account, in some cases, for claims that fares will increase by more than we believe necessary.

In particular, South Yorkshire's claim of a 400 per cent. fare increase is difficult to accept. The county talks of a 400 per cent. increase, but my information is that the revenue from all fares, including those provided by NBC under contract, is about £18 million. I accept that fare increases are not translated directly into increases in revenue, but I find it hard to accept the county's figure of £7 million extra revenue as the likely result of a doubling of fares. It must also be borne in mind that the fare for a three-mile journey in South Yorkshire is only 8p—about one third of the next lowest fare in any metropolitan county. I emphasise that in setting our provisional guidance figures we have looked carefully at present and past subsidy levels to avoid making violent changes in fares and services. I think that when the matter is examined in detail in Committee it will be seen that we have been very reasonable.

Mr. Allen McKay

The hon. Gentleman seems to be suggesting that buses may run if they are full, may perhaps run if they are half full, but may not run if they are nearly empty. What will happen to rural services? I represent a rural constituency and we have a good bus service because of the cheap transport system run by the South Yorkshire county council. On the hon. Gentleman's criteria those services will have to cease because they do not pay.

Mr. Eyre

The hon. Gentleman should not be stuck too rigidly in the past of 10 years ago. There are many innovatory ways in which services can be provided.

Mr. Booth

I listened carefully to the Under-Secretary and I believe that he said that the provisional figures that appear in the White Paper protect the revenue grant for 1983–84 at £436 million. I suggest that they protect only £241 million and that the only way that one can bring the figures in the White Paper up to £436 million is to add in the £95 million capital grant for London depreciation, which is certainly not protected revenue support.

Mr. Eyre

There is, I believe, a technical misunderstanding between us. I shall do my best to reply to the right hon. Gentleman. I believe, however, that the question he raises is a result of a misconception.

The metropolitan counties have proposed a level of expenditure in 1983–84 which is 75 per cent. higher in cash terms than in 1980–81. That is a substantial real increase. Over the same period, inflation, measured by the index of retail prices, is likely to be about 30 per cent. higher than in 1980–81. The protected level of expenditure, at 32 per cent. above expenditure in 1980–81, represents a slight increase in real terms over this period. In London, the guidance figure of £220 million is 47 per cent. above the 1980 level of support implying a much higher increase than the rate of inflation. It can be seen that these figures support what I say about the reasonableness of our proposals in regard to the protected expenditure levels.

The guidance figures represent our judgment of what is a reasonable level of subsidy, which, on that account, should be protected. But the figures are still provisional. Ministers and officials at the Department will be very willing to listen to what individual authorities and executives wish to say to us during the passage of the Bill.

There are a number of matters to which I should like to refer, especially the damaging effect upon rates of very high subsidies. I would also like to have replied to many of the points made by hon. Members about the Select Committee.

Mr. Snape

It is customary for an hon. Member to say that he is grateful when, as now, the Minister gives way. In this instance, I think we should reverse the process. Before the Minister ties himself up in knots with the remainder of his notes, will he accept that it is customary for a Minister, in his wind-up speech, to reply to some of the points made in the debate? If the Minister merely intends to read his departmental brief, he could have posted the whole thing in Hansard and so allowed at least another half-dozen Labour Back-Benchers to make a contribution.

Mr. Eyre

Interruptions of that kind are not helpful. The Bill, contrary to what many Opposition Members have alleged, leaves the final choice of subsidy with the authority. The advantage for the authority will be knowing its protected level of subsidy. It can, if it wishes, choose a higher level. However, that would not have the protection of the Bill. This is a matter that councillors will have to bear in mind.

There will be some hard and difficult decisions for the authorities and executives to make as they examine more carefully the value of subsidy and as they review their organisations and seek tenders. These are the sort of decisions that Mr. Micawber never faced up to. They are the decisions that previous Governments have avoided. It has been easier to appear to meet the transport problems of our cities with ever-larger tranches of subsidy. That has not been in the interests of the ratepayers, of the undertakings or, in the end, of the travellers themselves.

Neither industry nor the domestic ratepayer can afford the ever-increasing rate burden caused by open-ended subsidies to support local bus and train services in our big cities. Subsidies must be realistic and take into account what the ratepayer can afford. Too often, excessive subsidies are being used to provide unrealistically low fares and to maintain lavish levels of services wholly unrelated to today's travel needs.

Mr Dobson

On a point of order, Mr. Speaker. I seek your guidance. If I heard correctly through the rabble of noise on the Government Benches, the Under-Secretary said specifically that he would be replying to points I had made.

Mr. Speaker

I must tell the hon. Gentleman that he has less than a minute in which to reply if he wishes to.

Mr. Eyre

I assert that when the Bill is fairly examined it will be found to provide a system that will be of great benefit to the future of transport in our cities.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 284, Noes 224.

Division No. 7]	[10 pm
AYES
Adley, Robert	Boscawen, Hon Robert
Aitken, Jonathan	Bottomley, Peter (W'wich W)
Alexander, Richard	Bowden, Andrew
Alison, Rt Hon Michael	Boyson, Dr Rhodes
Amery, Rt Hon Julian	Braine, Sir Bernard
Ancram, Michael	Bright, Graham
Arnold, Tom	Brinton, Tim
Aspinwall, Jack	Brittan, Rt. Hon. Leon
Atkins, Rt Hon H.(S'thorne)	Brooke, Hon Peter
Atkins, Robert(Preston N)	Brotherton, Michael
Atkinson, David (B'm'th,E)	Brown, Michael(Brigg & Sc'n)
Baker, Kenneth(St.M'bone)	Browne, John (Winchester)
Baker, Nicholas (N Dorset)	Bruce-Gardyne, John
Banks, Robert	Bryan, Sir Paul
Beaumont-Dark, Anthony	Buck, Antony
Bendall, Vivian	Budgen, Nick
Benyon, Thomas (A'don)	Bulmer, Esmond
Benyon, W. (Buckingham)	Burden, Sir Frederick
Best, Keith	Butler, Hon Adam
Bevan, David Gilroy	Carlisle, John (Luton West)
Biggs-Davison, Sir John	Carlisle, Kenneth (Lincoln)
Blackburn, John	Carlisle, Rt Hon M. (R'c'n )
Blaker, Peter	Chalker, Mrs, Lynda
Body, Richard	Channon, Rt. Hon. Paul
Bonsor, Sir Nicholas	Chapman, Sydney

Clark, Hon A. (Plym'th, S'n)	Joseph, Rt Hon Sir Keith
Clark, Sir W. (Croydon S)	Kimball, Sir Marcus
Clarke, Kenneth (Rushcliffe)	King, Rt Hon Tom
Clegg, Sir Walter	Kitson, Sir Timothy
Colvin, Michael	Knight, Mrs Jill
Cope, John	Knox, David
Cormack, Patrick	Lamont, Norman
Corrie, John	Lang, Ian
Costain, Sir Albert	Langford-Holt, Sir John
Cranborne, Viscount	Latham, Michael
Crouch, David	Lawrence, Ivan
Dickens, Geoffrey	Lee, John
Dorrell, Stephen	Le Marchant, Spencer
Douglas-Hamilton, Lord J.	Lennox-Boyd, Hon Mark
Dover, Denshore	Lewis, Kenneth (Rutland)
du Cann, Rt Hon Edward	Lloyd, Ian (Havant & W'loo)
Dunn, Robert (Dartford)	Loveridge, John
Durant, Tony	Luce, Richard
Dykes, Hugh	Lyell, Nicholas
Eden, Rt Hon Sir John	McCrindle, Robert
Eggar, Tim	Macfarlane, Neil
Elliott, Sir William	MacGregor, John
Eyre, Reginald	MacKay, John (Argyll)
Fairbairn, Nicholas	Macmillan, Rt Hon M.
Faith, Mrs Sheila	McNair-Wilson, M. (N'bury)
Farr, John	McNair-Wilson, P. (New F'st)
Fell, Sir Anthony	McQuarrie, Albert
Fenner, Mrs Peggy	Madel, David
Finsberg, Geoffrey	Major, John
Fisher, Sir Nigel	Marland, Paul
Fletcher-Cooke, Sir Charles	Marlow, Antony
Fookes, Miss Janet	Marshall, Michael (Arundel)
Forman, Nigel	Mates, Michael
Fox, Marcus	Mawby, Ray
Fraser, Rt Hon Sir Hugh	Mawhinney, Dr Brian
Fraser, Peter (South Angus)	Mayhew, Patrick
Fry, Peter	Mellor, David
Gardiner, George (Reigate)	Meyer, Sir Anthony
Gardner, Edward (S Fylde)	Miller, Hal (B'grove)
Garel-Jones, Tristan	Mills, Iain (Meriden)
Gilmour, Rt Hon Sir Ian	Mills, Sir Peter (West Devon)
Glyn, Dr Alan	Miscampbell, Norman
Goodhart, Sir Philip	Moate, Roger
Goodhew, Sir Victor	Monro, Sir Hector
Goodlad, Alastair	Montgomery, Fergus
Gorst, John	Moore, John
Gow, Ian	Morgan, Geraint
Gower, Sir Raymond	Morris, M. (N'hampton S)
Gray, Hamish	Morrison, Hon C. (Devizes)
Greenway, Harry	Morrison, Hon P. (Chester)
Griffiths, E.(B'y St. Edm'ds)	Mudd, David
Griffiths, Peter Portsm'th N)	Murphy, Christopher
Grist, Ian	Myles, David
Grylls, Michael	Neale, Gerrard
Gummer, John Selwyn	Needham, Richard
Hamilton, Hon A.	Nelson, Anthony
Hamilton, Michael (Salisbury)	Neubert, Michael
Hampson, Dr Keith	Newton, Tony
Hannam, John	Normanton, Tom
Haselhurst, Alan	Nott, Rt Hon John
Hastings, Stephen	Onslow, Cranley
Havers, Rt Hon Sir Michael	Oppenheim, Rt Hon Mrs S.
Hawkins, Sir Paul	Page, John (Harrow, West)
Hawksley, Warren	Page, Richard (SW Herts)
Hayhoe, Barney	Parkinson, Rt Hon Cecil
Heddle, John	Parris, Matthew
Henderson, Barry	Patten, Christopher (Bath)
Heseltine, Rt Hon Michael	Patten, John (Oxford)
Hicks, Robert	Pattie, Geoffrey
Higgins, Rt Hon Terence L.	Pawsey, James
Hogg, Hon Douglas (Gr'th'm)	Peyton, Rt Hon John
Holland, Philip (Carlton)	Pink, R. Bonner
Hooson, Tom	Pollock, Alexander
Hordern, Peter	Porter, Barry
Howell, Rt Hon D. (G'ldf'd)	Prentice, Rt Hon Reg
Hunt, David (Wirral)	Price, Sir David (Eastleigh)
Hunt, John (Ravensbourne)	Proctor, K. Harvey
Jenkin, Rt Hon Patrick	Raison, Rt Hon Timothy
Johnson Smith, Sir Geoffrey	Rathbone, Tim
Jopling, Rt Hon Michael	Rees, Peter (Dover and Deal)

Rees-Davies, W. R.	Temple-Morris, Peter
Rhodes James, Robert	Thomas, Rt Hon Peter
Rhys Williams, Sir Brandon	Thorne, Neil (Ilford South)
Ridley, Hon Nicholas	Thornton, Malcolm
Ridsdale, Sir Julian	Townend, John (Bridlington)
Rifkind, Malcolm	Townsend, Cyril D, (B'heath)
Roberts, M. (Cardiff NW)	Trippier, David
Roberts, Wyn (Conway)	Trotter, Neville
Rossi, Hugh	van Straubenzee, Sir W.
Rost, Peter	Vaughan, Dr Gerard
Royle, Sir Anthony	Viggers, Peter
Rumbold, Mrs A. C. R.	Waddington, David
Sainsbury, Hon Timothy	Wakeham, John
St. John-Stevas, Rt Hon N.	Waldegrave, Hon William
Scott, Nicholas	Walker, Rt Hon P.(W'cester)
Shaw, Giles (Pudsey)	Walker, B. (Perth)
Shaw, Sir Michael (Scarb')	Walker-Smith, Rt Hon Sir D.
Shelton, William (Streatham)	Wall, Sir Patrick
Shepherd, Colin (Hereford)	Waller, Gary
Shepherd, Richard	Walters, Dennis
Shersby, Michael	Ward, John
Silvester, Fred	Warren, Kenneth
Sims, Roger	Watson, John
Skeet, T. H. H.	Wells, Bowen
Smith, Tim (Beaconsfield)	Wells, John (Maidstone)
Spence, John	Wheeler, John
Spicer, Jim (West Dorset)	Whitney, Raymond
Spicer, Michael (S Worcs)	Wickenden, Keith
Sproat, Iain	Wiggin, Jerry
Squire, Robin	Williams, D.(Montgomery)
Stainton, Keith	Winterton, Nicholas
Stanbrook, Ivor	Wolfson, Mark
Stanley, John	Young, Sir George (Acton)
Steen, Anthony	Younger, Rt Hon George
Stewart, A.(E Renfrewshire)
Stewart, Ian (Hitchin)	Tellers for the Ayes:
Stokes, John	Mr. Anthony Berry and
Stradling Thomas, J.	Mr. Carol Mather.
Tapsell, Peter

NOES
Abse, Leo	Dalyell, Tam
Adams, Allen	Davidson, Arthur
Allaun, Frank	Davies, Rt Hon Denzil (L'lli)
Anderson, Donald	Davis, Clinton (Hackney C)
Archer, Rt Hon Peter	Davis, Terry (B'ham, Stechf'd)
Ashton, Joe	Deakins, Eric
Atkinson, N.(H'gey,)	Dean, Joseph (Leeds West)
Bagier, Gordon A.T.	Dewar, Donald
Barnett, Rt Hon Joel (H'wd)	Dixon, Donald
Bennett, Andrew(St'kp't N)	Dobson, Frank
Bidwell, Sydney	Dormand, Jack
Booth, Rt Hon Albert	Douglas, Dick
Bottomley, Rt Hon A.(M'b'ro)	Dubs, Alfred
Bradley, Tom	Duffy, A. E. P.
Bray, Dr Jeremy	Dunnett, Jack
Brown, R. C. (N'castle W)	Eadie, Alex
Brown, Ronald W. (H'ckn'y S)	Eastham, Ken
Brown, Ron (E'burgh, Leith)	Edwards, R. (W'hampt'n S E)
Buchan, Norman	Ellis, R. (NE D'bysh're)
Callaghan, Jim (Midd't'n & P)	Ellis, Tom (Wrexham)
Campbell, Ian	English, Michael
Campbell-Savours, Dale	Evans, Ioan (Aberdare)
Cant, R. B.	Evans, John (Newton)
Carmichael, Neil	Ewing, Harry
Carter-Jones, Lewis	Field, Frank
Cartwright, John	Fitt, Gerard
Clark, Dr David (S Shields)	Flannery, Martin
Clarke, Thomas(C'b'dge, A'rie)	Ford, Ben
Cocks, Rt Hon M. (B'stol S)	Fraser, J. (Lamb'th, N'w'd)
Cohen, Stanley	Freeson, Rt Hon Reginald
Concannon, Rt Hon J. D.	Garrett, John (Norwich S)
Conlan, Bernard	Garrett, W. E. (Wallsend)
Cook, Robin F.	George, Bruce
Cowans, Harry	Gilbert, Rt Hon Dr John
Craigen, J. M. (G'gow, M'hill)	Ginsburg, David
Cryer, Bob	Golding, John
Cunliffe, Lawrence	Graham, Ted
Cunningham, G. (Islington S)	Grant, John (Islington C)
Cunningham, Dr J. (W'h'n)	Hamilton, James (Bothwell)

Hamilton, W. W. (C'tral Fife)	Price, C. (Lewisham W)
Hardy, Peter	Race, Reg
Harman, Harriet (Peckham)	Radice, Giles
Harrison, Rt Hon Walter	Rees, Rt Hon M (Leeds S)
Hart, Rt Hon Dame Judith	Richardson, Jo
Hattersley, Rt Hon Roy	Roberts, Albert (Normanton)
Haynes, Frank	Roberts, Allan (Bootle)
Healey, Rt Hon Denis	Roberts, Ernest (Hackney N)
Heffer, Eric S.	Roberts, Gwilym (Cannock)
Hogg, N. (E Dunb't'nshire)	Robertson, George
Holland, S. (L'b'th, Vauxh'll)	Robinson, G. (Coventry NW)
Homewood, William	Rodgers, Rt Hon William
Hooley, Frank	Rooker, J. W.
Howell, Rt Hon D.	Roper, John
Hoyle, Douglas	Ross, Ernest (Dundee West)
Huckfield, Les	Ross, Stephen (Isle of Wight)
Hughes, Mark (Durham)	Rowlands, Ted
Hughes, Robert (Aberdeen N)	Sandelson, Neville
Hughes, Roy (Newport)	Sever, John
Janner, Hon Greville	Sheerman, Barry
Jay, Rt Hon Douglas	Sheldon, Rt Hon R.
John, Brynmor	Shore, Rt Hon Peter
Johnson, James (Hull West)	Silkin, Rt Hon J. (Deptford)
Johnson, Walter (Derby S)	Silkin, Rt Hon S. C. (Dulwich)
Jones, Rt Hon Alec (Rh'dda)	Silverman, Julius
Jones, Barry (East Flint)	Skinner, Dennis
Jones, Dan (Burnley)	Smith, Rt Hon J. (N Lanark)
Kaufman, Rt Hon Gerald	Snape, Peter
Kilroy-Silk, Robert	Soley, Clive
Lambie, David	Spearing, Nigel
Lamond, James	Speller, John Francis (B'ham)
Leadbitter, Ted	Spriggs, Leslie
Lestor, Miss Joan	Stallard, A. W.
Lewis, Ron (Carlisle)	Steel, Rt Hon David
Litherland, Robert	Stewart, Rt Hon D. (W Isles)
Lofthouse, Geoffrey	Stoddart, David
Lyon, Alexander (York)	Stott, Roger
Mabon, Rt Hon Dr J. Dickson	Strang, Gavin
McDonald, Dr Oonagh	Straw, Jack
McGuire, Michael (Ince)	Summerskill, Hon Dr Shirley
McKay, Allen (Penistone)	Taylor, Mrs Ann (Bolton W)
McKelvey, William	Thomas, Dafydd (Merioneth)
Maclennan, Robert	Thomas, Mike (Newcastle E)
McMahon, Andrew	Thomas, Dr R.(Carmarthen)
McNamara, Kevin	Thorne, Stan (Preston South)
McTaggart, Robert	Tilley, John
McWilliam, John	Tinn, James
Magee, Bryan	Torney, Tom
Marks, Kenneth	Urwin, Rt Hon Tom
Marshall, D(G'gow S'ton)	Varley, Rt Hon Eric G.
Marshall, Dr Edmund (Goole)	Wainwright, E.(Dearne V)
Marshall, Jim (Leicester S)	Walker, Rt Hon H.(D'caster)
Mason, Rt Hon Roy	Wardell, Gareth
Maxton, John	Wellbeloved, James
Maynard, Miss Joan	Welsh, Michael
Meacher, Michael	White, Frank R.
Mitchell, Austin (Grimsby)	White, J. (G'gow Pollok)
Mitchell, R. C. (Soton Itchen)	Whitehead, Phillip
Morris, Rt Hon A. (W'shawe)	Whitlock, William
Morris, Rt Hon C. (O'shaw)	Willey, Rt Hon Frederick
Morton, George	Williams, Rt Hon A.(S'sea W)
Moyle, Rt Hon Roland	Williams, Rt Hon Mrs (Crosby)
Newens, Stanley	Wilson, Gordon (Dundee E)
Oakes, Rt Hon Gordon	Wilson, Rt Hon Sir H.(H'ton)
Ogden, Eric	Wilson, William (C'try SE)
O'Halloran, Michael	Winnick, David
Oppenheim, Rt Hon Mrs S.	Woodall, Alec
Palmer, Arthur	Woolmer, Kenneth
Park, George	Wrigglesworth, Ian
Parker, John	Wright, Sheila
Parry, Robert	Young, David (Bolton E)
Pendry, Tom
Pitt, William Henry	Tellers for the Noes:
Powell, Raymond (Ogmore)	Mr. Hugh McCartney and
Prescott, John	Mr. Ron Leighton.

Question accordingly agreed to.

Bill read a Second time.

Motion made—[Mr. Michael Cocks]—and Question put, That the Bill be committed to a Committee of the whole House:—

The House divided: Ayes 221, Noes 284.

Division No. 8]	[10.15 pm
AYES
Abse, Leo	Golding, John
Adams, Allen	Graham, Ted
Allaun, Frank	Grant, John (Islington C)
Anderson, Donald	Hamilton, James (Bothwell)
Archer, Rt Hon Peter	Hamilton, W. W. (C'tral Fife)
Ashton, Joe	Hardy, Peter
Atkinson, N.(H'gey,)	Harman, Ms Harriet
Bagier, Gordon A.T.	(Peckham)
Barnett, Rt Hon Joel (H'wd)	Harrison, Rt Hon Walter
Bennett, Andrew(St'kp't N)	Hart, Rt Hon Dame Judith
Bidwell, Sydney	Hattersley, Rt Hon Roy
Booth, Rt Hon Albert	Healey, Rt Hon Denis
Bottomley, Rt Hon A.(M'b'ro)	Heffer, Eric S.
Bradley, Tom	Hogg, N. (E Dunb't'nshire)
Bray, Dr Jeremy	Holland, S. (L'b'th, Vauxh'll)
Brown, R. C. (N'castle W)	Homewood, William
Brown, Ronald W. (H'ckn'y S)	Hooley, Frank
Brown, Ron (E'burgh, Leith)	Howell, Rt Hon D.
Buchan, Norman	Hoyle, Douglas
Callaghan, Jim (Midd't'n & P)	Huckfield, Les
Campbell, Ian	Hughes, Mark (Durham)
Campbell-Savours, Dale	Hughes, Robert (Aberdeen N)
Cant, R. B.	Hughes, Roy (Newport)
Carmichael, Neil	Janner, Hon Greville
Carter-Jones, Lewis	Jay, Rt Hon Douglas
Cartwright, John	John, Brynmor
Clark, Dr David (S Shields)	Johnson, Walter (Derby S)
Clarke, Thomas(C'b'dge, A'rie)	Jones, Rt Hon Alec (Rh'dda)
Cocks, Rt Hon M. (B'stol S)	Jones, Barry (East Flint)
Cohen, Stanley	Jones, Dan (Burnley)
Concannon, Rt Hon J. D.	Kaufman, Rt Hon Gerald
Conlan, Bernard	Kilroy-Silk, Robert
Cook, Robin F.	Lambie, David
Cowans, Harry	Lamond, James
Craigen, J. M. (G'gow, M'hill)	Leadbitter, Ted
Cryer, Bob	Leighton, Ronald
Cunliffe, Lawrence	Lestor, Miss Joan
Cunningham, G. (Islington S)	Lewis, Ron (Carlisle)
Cunningham, Dr J. (W'h'n)	Litherland, Robert
Dalyell, Tam	Lofthouse, Geoffrey
Davidson, Arthur	Lyon, Alexander (York)
Davies, Rt Hon Denzil (L'lli)	Mabon, Rt Hon Dr J. Dickson
Davis, Clinton (Hackney C)	McCartney, Hugh
Davis, Terry (B'ham, Stechf'd)	McDonald, Dr Oonagh
Deakins, Eric	McGuire, Michael (Ince)
Dean, Joseph (Leeds West)	McKelvey, William
Dewar, Donald	Maclennan, Robert
Dixon, Donald	McMahon, Andrew
Dobson, Frank	McNamara, Kevin
Dormand, Jack	McTaggart, Robert
Douglas, Dick	McWilliam, John
Dubs, Alfred	Magee, Bryan
Duffy, A. E. P.	Marks, Kenneth
Dunnett, Jack	Marshall, D(G'gow S'ton)
Eadie, Alex	Marshall, Dr Edmund (Goole)
Eastham, Ken	Marshall, Jim (Leicester S)
Edwards, R. (W'hampt'n S E)	Mason, Rt Hon Roy
Ellis, R. (NE D'bysh're)	Maxton, John
English, Michael	Maynard, Miss Joan
Evans, Ioan (Aberdare)	Meacher, Michael
Evans, John (Newton)	Mitchell, Austin (Grimsby)
Ewing, Harry	Mitchell, R. C. (Soton Itchen)
Field, Frank	Morris, Rt Hon A. (W'shawe)
Fitt, Gerard	Morris, Rt Hon C. (O'shaw)
Flannery, Martin	Morton, George
Ford, Ben	Moyle, Rt Hon Roland
Fraser, J. (Lamb'th, N'w'd)	Newens, Stanley
Freeson, Rt Hon Reginald	Oakes, Rt Hon Gordon
Garrett, John (Norwich S)	Ogden, Eric
Garrett, W. E. (Wallsend)	O'Halloran, Michael
George, Bruce	Orme, Rt Hon Stanley
Gilbert, Rt Hon Dr John	Palmer, Arthur
Ginsburg, David	Park, George

Parker, John	Stewart, Rt Hon D. (W Isles)
Parry, Robert	Stoddart, David
Pendry, Tom	Stott, Roger
Pitt, William Henry	Strang, Gavin
Powell, Raymond (Ogmore)	Straw, Jack
Prescott, John	Summerskill, Hon Dr Shirley
Price, C. (Lewisham W)	Taylor, Mrs Ann (Bolton W)
Race, Reg	Thomas, Dafydd (Merioneth)
Radice, Giles	Thomas, Dr R.(Carmarthen)
Rees. Rt Hon M (Leeds S)	Thorne, Stan (Preston South)
Richardson, Jo	Tilley, John
Roberts, Albert (Normanton)	Tinn, James
Roberts, Allan (Bootle)	Torney, Tom
Roberts, Ernest (Hackney N)	Urwin, Rt Hon Tom
Roberts, Gwilym (Cannock)	Varley, Rt Hon Eric G.
Robertson, George	Wainwright, E.(Dearne V)
Robinson, G. (Coventry NW)	Walker, Rt Hon H.(D'caster)
Rodgers, Rt Hon William	Wardell, Gareth
Rooker, J. W.	Wellbeloved, James
Roper, John	Welsh, Michael
Ross, Ernest (Dundee West)	White, Frank R.
Ross, Stephen (Isle of Wight)	White, J. (G'gow Pollok)
Rowlands, Ted	Whitehead, Phillip
Sandelson, Neville	Whitlock, William
Sever, John	Williams, Rt Hon A.(S'sea W)
Sheerman, Barry	Williams,Rt Hon Mrs (Crosby)
Sheldon, Rt Hon R.	Wilson, Gordon (Dundee E)
Shore, Rt Hon Peter	Wilson, Rt Hon Sir H.(H'ton)
Silkin, Rt Hon J. (Deptford)	Wilson, William (C'try SE)
Silkin, Rt Hon S. C. (Dulwich)	Winnick, David
Silverman, Julius	Woodall, Alec
Skinner, Dennis	Woolmer, Kenneth
Smith, Rt Hon J. (N Lanark)	Wrigglesworth, Ian
Snape, Peter	Wright, Sheila
Soley, Clive	Young, David (Bolton E)
Spearing, Nigel
Spellar, John Francis (B'ham)	Tellers for the Ayes:
Spriggs, Leslie	Mr. Frank Haynes and
Stallard, A. W.	Mr. Allen McKay.
Steel, Rt Hon David

NOES
Adley, Robert	Bryan, Sir Paul
Aitken, Jonathan	Buck, Antony
Alexander, Richard	Budgen, Nick
Alison, Rt Hon Michael	Bulmer, Esmond
Amery, Rt Hon Julian	Burden, Sir Frederick
Ancram, Michael	Butler, Hon Adam
Arnold, Tom	Carlisle, John (Luton West)
Aspinwall, Jack	Carlisle, Kenneth (Lincoln)
Atkins, Rt Hon H.(S'thorne)	Carlisle, Rt Hon M. (R'c'n)
Atkins, Robert(Preston N)	Chalker, Mrs. Lynda
Atkinson, David (B'm'th,E)	Channon, Rt. Hon. Paul
Baker, Kenneth(St.M'bone)	Chapman, Sydney
Baker, Nicholas (N Dorset)	Clark, Hon A. (Plym'th, S'n)
Banks, Robert	Clark, Sir W. (Croydon S)
Beaumont-Dark, Anthony	Clarke, Kenneth (Rushcliffe)
Bendall, Vivian	Clegg, Sir Walter
Benyon, Thomas (A'don)	Colvin, Michael
Benyon, W. (Buckingham)	Cope, John
Best, Keith	Cormack, Patrick
Bevan, David Gilroy	Corrie, John
Biggs-Davison, Sir John	Costain, Sir Albert
Blackburn, John	Cranborne, Viscount
Blaker, Peter	Crouch, David
Body, Richard	Dickens, Geoffrey
Bonsor, Sir Nicholas	Dorrell, Stephen
Boscawen, Hon Robert	Douglas-Hamilton, Lord J.
Bottomley, Peter (W'wich W)	Dover, Denshore
Bowden, Andrew	du Cann, Rt Hon Edward
Boyson, Dr Rhodes	Dunn, Robert (Dartford)
Braine, Sir Bernard	Durant, Tony
Bright, Graham	Dykes, Hugh
Brinton, Tim	Eden, Rt Hon Sir John
Brittan, Rt. Hon. Leon	Eggar, Tim
Brooke, Hon Peter	Elliott, Sir William
Brotherton, Michael	Eyre, Reginald
Brown, Michael(Brigg & Sc'n)	Fairbairn, Nicholas
Browne, John (Winchester)	Faith, Mrs Sheila
Bruce-Gardyne, John	Farr, John

Fell, Sir Anthony	McQuarrie, Albert
Fenner, Mrs Peggy	Madel, David
Finsberg, Geoffrey	Major, John
Fisher, Sir Nigel	Marland, Paul
Fletcher-Cooke, Sir Charles	Marlow, Antony
Fookes, Miss Janet	Marshall, Michael (Arundel)
Forman, Nigel	Mates, Michael
Fox, Marcus	Mawby, Ray
Fraser, Rt Hon Sir Hugh	Mawhinney, Dr Brian
Fraser, Peter (South Angus)	Mayhew, Patrick
Fry, Peter	Mellor, David
Gardiner, George (Reigate)	Meyer, Sir Anthony
Gardner, Edward (S Fylde)	Miller, Hal (B'grove)
Garel-Jones, Tristan	Mills, Iain (Meriden)
Gilmour, Rt Hon Sir Ian	Mills, Sir Peter (West Devon)
Glyn, Dr Alan	Miscampbell, Norman
Goodhart, Sir Philip	Moate, Roger
Goodhew, Sir Victor	Monro, Sir Hector
Goodlad, Alastair	Montgomery, Fergus
Gorst, John	Moore, John
Gow, Ian	Morgan, Geraint
Gower, Sir Raymond	Morris, M. (N'hampton S)
Gray, Hamish	Morrison, Hon C. (Devizes)
Greenway, Harry	Morrison, Hon P. (Chester)
Griffiths, E.(B'y St. Edm'ds)	Mudd, David
Griffiths, Peter Portsm'th N)	Murphy, Christopher
Grist, Ian	Myles, David
Grylls, Michael	Neale, Gerrard
Gummer, John Selwyn	Needham, Richard
Hamilton, Hon A.	Nelson, Anthony
Hamilton, Michael (Salisbury)	Neubert, Michael
Hampson, Dr Keith	Newton, Tony
Hannam, John	Normanton, Tom
Haselhurst, Alan	Nott, Rt Hon John
Hastings, Stephen	Onslow, Cranley
Havers, Rt Hon Sir Michael	Oppenheim, Rt Hon Mrs S.
Hawkins, Sir Paul	Page, John (Harrow, West)
Hawksley, Warren	Page, Richard (SW Herts)
Hayhoe, Barney	Parkinson, Rt Hon Cecil
Heddle, John	Parris, Matthew
Henderson, Barry	Patten, Christopher (Bath)
Heseltine, Rt Hon Michael	Patten, John (Oxford)
Hicks, Robert	Pattie, Geoffrey
Higgins, Rt Hon Terence L.	Pawsey, James
Hogg, Hon Douglas (Gr'th'm)	Peyton, Rt Hon John
Holland, Philip (Carlton)	Pink, R. Bonner
Hooson, Tom	Pollock, Alexander
Hordern, Peter	Porter, Barry
Howell, Rt Hon D. (G'ldf'd)	Prentice, Rt Hon Reg
Hunt, David (Wirral)	Price, Sir David (Eastleigh)
Hunt, John (Ravensbourne)	Proctor, K. Harvey
Jenkin, Rt Hon Patrick	Raison, Rt Hon Timothy
Johnson Smith, Sir Geoffrey	Rathbone, Tim
Jopling, Rt Hon Michael	Rees, Peter (Dover and Deal)
Joseph, Rt Hon Sir Keith	Rees-Davies, W. R.
Kimball, Sir Marcus	Rhodes James, Robert
King, Rt Hon Tom	Rhys Williams, Sir Brandon
Kitson, Sir Timothy	Ridley, Hon Nicholas
Knight, Mrs Jill	Ridsdale, Sir Julian
Knox, David	Rifkind, Malcolm
Lamont, Norman	Roberts, M. (Cardiff NW)
Lang, Ian	Roberts, Wyn (Conway)
Langford-Holt, Sir John	Rossi, Hugh
Latham, Michael	Rost, Peter
Lawrence, Ivan	Royle, Sir Anthony
Lee, John	Rumbold, Mrs A. C. R.
Le Marchant, Spencer	Sainsbury, Hon Timothy
Lennox-Boyd, Hon Mark	St. John-Stevas, Rt Hon N.
Lewis, Kenneth (Rutland)	Scott, Nicholas
Lloyd, Ian (Havant & W'loo)	Shaw, Giles (Pudsey)
Loveridge, John	Shaw, Sir Michael (Scarb')
Luce, Richard	Shelton, William (Streatham)
Lyell, Nicholas	Shepherd, Colin (Hereford)
McCrindle, Robert	Shepherd, Richard
Macfarlane, Neil	Shersby, Michael
MacGregor, John	Silvester, Fred
MacKay, John (Argyll)	Sims, Roger
Macmillan, Rt Hon M.	Skeet, T. H. H.
McNair-Wilson, M. (N'bury)	Smith, Tim (Beaconsfield)
McNair-Wilson, P. (New F'st)	Spence, John

Spicer, Jim (West Dorset)	Wakeham, John
Spicer, Michael (S Worcs)	Waldegrave, Hon William
Sproat, Iain	Walker, Rt Hon P.(W'cester)
Squire, Robin	Walker, B. (Perth)
Stainton, Keith	Walker-Smith, Rt Hon Sir D.
Stanbrook, Ivor	Wall, Sir Patrick
Stanley, John	Waller, Gary
Steen, Anthony	Walters, Dennis
Stewart, A. (E Renfrewshire)	Ward, John
Stewart, Ian (Hitchin)	Warren, Kenneth
Stokes, John	Watson, John
Stradling Thomas, J.	Wells, Bowen
Tapsell, Peter	Wells, John (Maidstone)
Temple-Morris, Peter	Wheeler, John
Thomas, Rt Hon Peter	Whitney, Raymond
Thompson, Donald	Wickenden, Keith
Thorne, Neil (Ilford South)	Wiggin, Jerry
Thornton, Malcolm	Williams, D.(Montgomery)
Townend, John (Bridlington)	Winterton, Nicholas
Townsend, Cyril D, (B'heath)	Wolfson, Mark
Trippier, David	Young, Sir George (Acton)
Trotter, Neville	Younger, Rt Hon George
van Straubenzee, Sir W.
Vaughan, Dr Gerard	Tellers for the Noes:
Viggers, Peter	Mr. Carol Mather and
Waddington, David	Mr. Anthony Berry.

Question accordingly negatived.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

c112
1. TRANSPORT [MONEY] 60 words
c112
2. CUSTOMS AND EXCISE 77 words