LONDON TRANSPORT MONEY ACT

HC Deb 09 April 1984 vol 58 cc27-58

'The Secretary of State, in making the levy upon the rating authorities of Greater London, may only make such a levy which shall not exceed 55 per cent. of the Secretary of State's estimated expenditure in that year on grants under section 12 of this Act, and such a proposed levy shall be subject to consultation with the Greater London Council, the Common Council and the London Boroughs, and shall be authorised by a London Transport Money Act for that year, a bill for which shall be promoted by London Regional Transport.'.—[Mr. Prescott.]

Brought up, and read the First time.

3.48 pm

Mr. John Prescott (Kingston upon Hull, East)

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

Mr. Speaker

With this it will be convenient to discuss amendment No. 54, in clause 13, page 11, line 26 leave out from 'as' to end of line 9 on page 12 and insert 'appears to the Secretary of State to be appropriate to recover the amount of the levy authorised by the London Transport Money Act for the year to which the demand relates.'.

Mr. Prescott

The purpose of the clause and the amendment is to consider means by which we can embody the proper supplementary rate in a money Bill and not in an order as presently prescribed and, secondly, to consider the ceiling imposed upon the ratepayers' contribution to any supplementary rate embodied in a money Bill.

The Opposition believe that, if implemented, the London Regional Transport Bill will reduce services for Londoners, produce higher fares and, in the last analysis, produce higher rates as a direct result of the Government's policy and desire to reduce the amount of public money put into London Regional Transport.

The Bill secures a reduction in the Government's contribution to the maintenance of the London Transport system. The Secretary of State has made it clear on numerous occasions that he disagrees fundamentally with the artificial level of fares, particularly in the metropolitan transport areas, and especially — one presumes — in London. Therefore, new clause 12 and the amendment seek to address our concern about the ratepayers' share of the cost of London Regional Transport.

The Bill is largely concerned with the Government's contribution to London transport. The Government's contribution in TSG, capital and revenue grants is embodied in clause 12. The new clause deals with the proportion of the ratepayers' contribution, which is to be found in clause 13. The Bill gives the ratepayer no guarantee that the maximum of two thirds in clause 13(6) will be maintained. In fact, clause 13(8) says that the Secretary of State may come to the House with an order to increase the maximum proportion beyond 66 per cent. In reality, the ratepayers' contribution could be anything up to 100 per cent., and even beyond if the Secretary of State so wishes. The protection of two thirds in clause 13 is no guarantee that London ratepayers will be limited to that share of the bill. New clause 12 seeks to change 66 per cent. to 55 per cent.

The travel card scheme had a surplus of £35 million, which this year went back to the ratepayers and helped to reduce the rate burden in London for the maintenance of London transport. However, the Bill makes it clear that any surplus from the operation of LRT similar to that from the travel card scheme may find its way back to the Treasury coffers. The Secretary of State shakes his head. We shall await his reply. He will have to agree that, as the Bill stands, any surplus could go to the Treasury. Presumably the Treasury will decide whether it will.

New clause 12 seeks to change the means by which the rate supplementary grant will be presented to Parliament and to change to a more realistic level the proportion that should be carried by the ratepayers when the Government take over responsibility for the provision of London's transport. The Bill proposes that the share to be carried as a supplementary rate should in the first instance be no greater than two thirds unless a special order is presented by the Secretary of State to the House. In Committee the theme was that two thirds of the charge would be carried by the ratepayers and one third by the taxpayers in the form of a grant given by the Secretary of State to LRT. Whatever that proportion, it will be embodied in an order to be brought before the House.

The new clause states that the proportion of the rate to be levied upon London ratepayers shall be embodied in a London Transport Money Bill. The Bill provides that such a supplementary rate shall be the subject of an order, on which there will be a positive vote in the House. As I understand procedure for dealing with orders, if the Government conclude that the percentage should be 66 per cent. and hon. Members wish to reduce the supplementary levy, they will not be able to change that percentage, though they might well be able to do so if the matter were dealt with under the procedures in force in a local council.

I understand that the procedure for debating orders does not allow for amendments to be tabled. The House will therefore be provided with a maximum of one and a half hours to debate London's supplementary rate for the provision and financing of transport. For many hon. Members, that is not sufficient. I am bound to comment that the Secretary of State said in Committee that he was prepared to consider whether more time could be provided. Under the procedures of the House, if the debate on an order starts before 10 o'oclock, that amount of time can be added to the one and a half hours. If the previous business finishes early, theoretically the House could spend somewhat longer than the one and a half hours embodied in the procedure to deal with an order. Even that is not good enough however, because it still does not allow for amendments to be tabled.

That is not satisfactory if we are to become the ratepayers' representatives for what is essentially a local service, namely, the provision of transport. There are 32 boroughs and the Greater London council, to begin with. Whatever the Government have in mind for legislation that is yet to be presented to the House for the abolition of the GLC, the rates procedure as determined by the local authority structure allows more than an hour and a half to determine the type of transport, what it will cost, and the rate to be levied for it.

If Members of Parliament are now to act as councillors, as indeed the Secretary of State confirmed in reply to a question by the hon. Member for Isle of Wight (Mr. Ross), there will be an opportunity for only a minute's intervention at Question Time to ask about London Transport or rates. The extensive ways now open to decide such matters in local democracy will be replaced by one minute's intervention at Question Time, and a one and a half hour debate on the rate to be levied. That is an unacceptable proposition for the provision of a service costing hundreds of millions of pounds, and one that is of great importance to the many people dependent on the future policy pursued by London Regional Transport.

A second difficulty arises because the vote on the rates will not be limited to Members of Parliament representing London constituencies. Any hon. Member from Yorkshire, Scotland or Wales will have a right to decide on the rate that will be imposed upon a limited number of people in the London area for their transport services. That, too, is unacceptable. I therefore hope that the House will accept the argument that to deal with this important matter by a statutory order is unacceptable.

The alternative embodied in the new clause is a London Transport money Bill. Most hon. Members will be aware that a London money Bill passes through the House regularly. It is a private Bill which is brought forward by the GLC, dealing with the capital requirements of the GLC. My first difficulty is over how the Government will be empowered to launch a private Bill. I presume that such a private Bill would not be presented to the House unless it was in order. Having taken advice from the Table Office, I am advised that it would be possible for the Government to present a money Bill embodying the rate to be levied. The way in which the House deals with Bills, as opposed to orders, would allow ample opportunity to discuss the judgment of the Government on the proportion to be levied on the ratepayers. This would allow an opportunity to debate the annual plans of the Government —as opposed to the statements, of which so much was heard in Committee—on the level of fares, the structure of services, the location of routes and all matters crucial to the provision of a modern sophisticated transport system in London.

To that extent, a Bill would involve a Second Reading debate, for which a considerable amount of time would be allowed. More time is likely to be allowed for that than for all the procedures involved in an order. The Bill would then be considered in Committee and it would be possible for just those who represent London constituencies to debate the Bill, carrying out as councillors the role allotted to them by the Government, and considering the Government's view of the quality and costs of the service. When compared with the procedures involved in an order, all hon. Members, and particularly those representing London constituencies, will agree that a Bill offers us a far better way of fulfilling our responsibility to the ratepayers in providing what is, after all, a local service. I therefore hope that hon. Members will agree that that part of the new clause offers a much more satisfactory procedure.

4 pm

In the metropolitan council areas, elected representatives from the boroughs, and certainly from the district councils, will presumably sit on the boards. They will at least be able to argue with the proposed joint councils the exact provision of services and their cost. However, London is yet again unique, because, as the Secretary of State has said, a new nationalised industry is being set up that will be financed from the rates. No other nationalised industry is, in that sense, comparable. Indeed, given what the Secretary of State said in Committee, there is a distinct possibility that London's ratepayers will have to contribute to the public service obligation for those of the Bill's provisions that deal with rail services.

If the legislation in part II is enacted, Londoners will be unique in that they will have to face the cost of providing the PSO for maintaining the railway lines. That does not happen in other parts of the country, although I readily accept that the metropolitan authorities at present contribute nearly £100 million towards British Rail's PSO. However, they do so by agreement and negotiations between locally elected representatives and British Railways Board. By contrast, in this case, the cost will be determined solely by the LRT and levied by the Secretary of State by means of an order. Thus, London's ratepayers will have to carry, in addition, the burden of contributing to British Rail's PSO, which is normally borne by the taxpayers.

Perhaps the most important aspect of the new clause is the ceiling to be imposed. The boroughs are entitled to be consulted about the proportion of the rate to be levied. In Committee we discussed the fact that even London's ratepayers had the right to challenge judgments made by their elected representatives. Later we shall deal with amendments covering the possibility of interventions by the courts. Clause 13 deals with the ceiling to he placed on the ratepayers' share of the cost of grants given by the Secretary of State, to be found in clause 12. In clause 13(6), the maximum is set at 66 per cent. Clause 13(8) allows the Secretary of State to impose an extra amount, presumably taking it to 100 per cent. However, in theory, the amount could go beyond that, although I shall not pursue that point now. Nevertheless, it remains true that under the Bill the ratepayers could be charged at 100 per cent.

The Minister is shaking her head. If she wants to refute that, I shall sit down. London's ratepayers could be asked to pay up to 100 per cent. of the cost of provision by the LRT. That power is in the Bill. If that were not so, there would be no reason for subsection (8). The Minister has not risen to her feet, so it will clearly be possible to levy the full cost on London's ratepayers. Given that, we want to know exactly what the percentage will be. Even before the Bill was publicly launched there was considerable controversy about what proportion should be the ratepayers' share.

The Secretary of State is, I know, somewhat concerned, because I was given a Bill containing, in clause 13, the figure of 50 per cent. I accept that the right hon. Gentleman may say that the Government thought about that figure and threw it into the clause as a sort of dummy. Well, it is a much cheaper dummy than the 66 per cent. now in the clause. The crucial question is what proportion the ratepayers will have to bear. For the sake of the argument I shall address my remarks to the mark two version of the Bill, which contains the figure of 66 per cent.

On Second Reading the Secretary of State offered us several quotes, although, to be fair, when he spoke of the ratepayers' share being 90 per cent. he was citing Literature which he said had been published by the GLC. From my inquiries, I understand that that was largely to do with the effects of the penalties resulting from the Government's policy on block grants and the "Fares Fair" system, which became the subject of court proceedings and so on.

On Second Reading we learnt that the Minister thought that the figure was probably nearer 72 per cent. In Committee we produced a Tory Office leaflet where it was suggested that the ratepayers' share was at present 80 per cent. At a later stage in Committee the Minister rapidly jumped up to say that the figure had fallen to 69 per cent. I shall quote the passage if the Minister so wishes, but I do not think that that is necessary. She is on record as saying that, on reflection, the figure had fallen by three percentage points from 72 to 69 per cent. Thus, we make progress from 90 per cent. to 80 per cent. to 72 per cent. to 69 per cent. and, I hope, even further.

The Minister of State, Department of Transport (Mrs. Lynda Chalker)

For the sake of the record, I should point out that the question of what the percentage was came up when we were discussing revenue support. In Committee I explained that the figures used by the Department were the GLC's revenue grant determinations for 1983–84. There was a difference of three percentage points because the GLC had deducted the £25 million deficit from the 1982–83 figure which had been included in the determination and the estimated surplus of £35 million. It was the exclusion of the surplus that might have made a difference of three percentage points to the Department of Transport. It was a matter of interpreting the figures, which, as I think the hon. Gentleman will acknowledge, have been very complex throughout.

Mr. Prescott

I thank the Minister of State for making that intervention. The hon. Lady has not contradicted what I have said.

Mrs. Chalker

I have put the matter straight for the record.

Mr. Prescott

I shall try to put it straighter. It is right that the travel card system has produced £35 million of extra income, and we are concerned about the cost to the ratepayer of the provision of transport for 1983–84, the last year of full control under the GLC. The £35 million went back to the GLC and was used to reduce rates for London ratepayers. That means that we cannot add that figure to the cost of transport provision for 1983–84. It seems that the Minister of State accepts that argument and in Committee she talked about the ratepayers providing 69 per cent. of the cost of the provision of transport in London. She reduced an earlier estimate by three percentage points. Percentages inevitably become confusing when statistics are thrown around. I am grateful to the Minister of State for writing to tell me that the experts from the GLC and the Government met and agreed the figures. I am pleased that there is general agreement. The totals are agreed, but items such as the £35 million that was generated by the successful travel card scheme still remain controversial.

The central issue to which the Secretary of State should address himself is the cost to London ratepayers for the provision of transport in the 1983–84 transport year. Once that figure is established, it is relevant to consider whether 55 per cent., the percentage embodied in the new clause, is realistic. I think that there is general agreement that the percentage decreased from 72 to 69 per cent. because of the £35 million which was generated by the travel card system. Revenue support for 1983–84 was £235 million and we can agree that the generation of £35 million has reduced it to £200 million. It has been agreed between the Department and the GLC that the £25 million of council grants to London transport applies to the previous year. That cannot be regarded as a charge on the running of London transport during 1983–84. This makes it possible to reduce the total by £25 million.

There is a third item, which is controversial and which has not been accepted by the Government since the Minister's letter of 2 April. The experts have discussed a further reduction of £17 million, but the controversial item is the £48 million that London Regional Transport wishes to retain for redundancies within London Transport. That is not acceptable to the GLC, because it is not prepared to accept that level of redundancies. As the GLC is the paymaster, and as it determines policy as an elected representative body, it is entitled to make that judgment.

There is a fundamental difference between the methods employed by the Department of the Environment and the Department of Transport in assessing transport supplementary grants. The Departments do not treat them in the same way and the Department of Transport's total of about £46 million is entirely different from that of the Department of the Environment. The GLC makes the reasonable point that in judging what London Transport has cost it is reasonable to take into account the moneys required for TSG and to remove them from block grant considerations.

4.15 pm

The figures that have been exchanged between the GLC's experts and those of LRT reflect the difference between the Government's view of the figures and the GLC's approach. The Government consider that the total support amounted to £390 million, and the GLC's calculation is £321 million. If those figures are translated into percentages, the GLC's view is that the support was 55 per cent., and the Government's view is that it was 72 per cent. The travel card consideration would reduce the Government's percentage to 69 per cent. If the transport supplementary grant were treated by the Department of Transport as it is by the Department of the Environment, the percentage would be reduced to 64 per cent. The Government's figure is now much nearer to 55 per cent. and a long way from the 70 to 80 per cent. that was discussed on Second Reading.

Judgment against the Government cannot be made solely on those percentages. If the Government take control of London Transport, we can presume that they will wish to observe their own recommendations. They will wish to observe protected expenditure levels. The Government have set limits and have given the assurance that there will be no legal action if they are not exceeded. The Government's model of revenue support for London Transport would produce about £114 million. On that basis, the GLC's share would fall from 55 to 41 per cent., which would reflect a low level of ratepayer contribution.

I am sorry to bore the House with these complex arguments.

The Secretary of State for Transport (Mr. Nicholas Ridley)

There are not many Members present to hear them.

Mr. Prescott

The important thing is that the right hon. Gentleman and I are here, because many ratepayers are concerned about the proportion of the funding that will be levied on them. We can presume that the Secretary of State will not spend at a level that will lead him to penalise himself. No doubt he will spend at about the level that he advocates for other transport systems apart from the GLC and will remain within protected expenditure limits. On the Government's terms, the ratepayer would provide about 52 per cent. of the funding. If that is so, the Government can achieve a level of expenditure for the maintenance of London Transport that is less than the 55 per cent. that is embodied in the new clause. It will certainly be less than the 66 per cent. which the Government have set as a maximum.

It is hard to understand why the Government want to maintain the part of the clause that will allow a move from 66 to 100 per cent. The Ministers explained in Committee that, in effect, the Government were scared that an extreme GLC would spend all its money and leave them with the burden. That meant that they had to reserve the right to impose an extra burden on the ratepayer.

That argument can no longer be maintained, because the 1983 Act provides that once agreement has been reached on the expenditure of revenue it is not possible to increase revenue support. That is the law, so I should like to know why it is necessary for the Secretary of State to retain the right to move from 66 to 100 per cent. Notwithstanding an argument over capital requirements, the right hon. Gentleman has a clause that will allow him to claw back resources. He would be able to do so even if the requirements were said to be in capital areas and not revenue areas.

Quite frankly, the Bill gives the Secretary of State far more generous powers than he requires. It maintains the possibility of 100 per cent., which is not acceptable to the Opposition. Our new clause would allow the House to debate the matter and to impose a more realistic percentage level. We fear that the Bill will allow the Secretary of State to impose a tremendous burden on ratepayers.

I wish to give the Secretary of State one other matter for thought. He is seeking to change the means of financing capital and revenue, which presently stands at £155 million to £160 million. He told the Committee that he intends that to operate as an expenditure in every year. As the GLC is financing it out of a capital debt fund, and in revenue terms the debts are reduced to £4 million a year, that can mean only that a two thirds share for the London ratepayers is an additional 100 million above what it already costs them.

With that scale of problem, it is no surprise that the Secretary of State seeks to include 100 per cent. in the Bill. I hope that all London Members—especially those with local government experience — before they start to scream when the orders come before the House, will bear in mind what the Secretary of State is doing in the Bill. The Opposition, on behalf of London ratepayers, are giving an opportunity to provide a money Bill which we can debate in the House. If the House disagrees with the Secretary of State, it can change the percentage. It prevents the possibility of the Secretary of State finding an alternative form of financing that means reducing services, increasing fares, greater privatisation and more unemployment. That is not the solution that Londoners need.

Mr. Ridley

I shall try to respond to the hon. Member for Kingston upon Hull, East (Mr. Prescott), but he knows that this is complicated country and it is not easy to express the arguments and figures in debate. I think that the House agrees that there should be a high ratepayers' contribution to the subsidy to London Regional Transport. London, which has a high per capita rateable resource, has always paid a high proportion of the subsidy. Because London is the capital city, it is visited by many tourists, so the taxpayer also pays a share. I do not wish to go into the complicated local government finance considerations mentioned by the hon. Gentleman. However, in view of London's high rateable value and the many tourists who visit it, a share of two thirds for ratepayers and one third for taxpayers makes sense. It might help the hon. Gentleman to look at the matter in that way rather than the immensely complicated calculations that he has used.

Mr. Nigel Spearing (Newham, South)

I think that I have a point that may appeal to the right hon. Gentleman. Prior to the 1968 Act, the responsibility for London Transport was held by the then Minister, but without any rate precept. Does the right hon. Gentleman believe in the adage, "No taxation without representation?" Where is that representation for the ratepayer?

Mr. Ridley

The hon. Gentleman knows that prior to 1968 London Transport's losses were small—indeed, in some years it was profitable. The problem of the large subsidy has emerged only since that time. I am not blaming either party, but simply stating that the economics have changed. That is why the question of who should pay —the ratepayer or the taxpayer—has become important. In equity, I do not think that we have the balance wrong with ratios of two thirds and one third. I intend to prove that a two thirds share is lower than Londoners paid in 1983–84 or will pay in 1984–85. We now have the figures for 1984–85, which the House will find interesting.

There are great possibilities for reducing the amount that will have to be taken from the ratepayers by reducing the cost to London Transport and, therefore, the subsidy paid to it. The more I hear about the potential for saving, the more I believe that that is the aspect on which to concentrate. That is where the ratepayers' relief, in part, will come from.

The hon. Member for Kingston upon Hull, East raised questions about how the House should handle the annual ratepayers' levy and how it should be expressed in. the Bill. As he said, there is a power to increase the proportion from 67 per cent. In some ways, especially for presentational reasons, it might have been easier not to include that power. I can think of no circumstance in which it will be used. However, if our successors wanted to increase the levy, it would be silly if they had to introduce primary legislation for that purpose only. Indeed, the only way to show disagreement with primary legislation is to vote against it. There is no difference between an affirmative order procedure for increasing the proportion, which the House can vote against, and a short one-clause Bill to increase it, which the House can vote against. It is six of one and two times three of another.

Mr. Prescott

Is not one difference that the Bill can be amended so that a percentage can be changed, but that that cannot be done with an order? That is a crucial point.

Mr. Ridley

I stress that I cannot envisage circumstances in which the power would be required. I have no intention of using it. It is a hypothetical case. If an order to increase the percentage were put forward, and the Government did not get that order, they would have to return to the House with a more acceptable percentage. A vote that defeats the Government's proposals, whether on an order or on a Bill, has exactly the same effect— and the Government have to come forward with different proposals.

There is also a power to decrease the percentage. I shall go further than I have gone before, and say that that is what I hope will happen. As we get London Transport under control and its costs are reduced, I hope to reduce not only the amount that the ratepayers pay absolutely, but what they pay proportionately.

Mr. Edward Leigh (Gainsborough and Horncastle)

The hon. Member for Newham, South (Mr. Spearing) mentioned no taxation without representation. Is my right hon. Friend aware that a London-wide rate raises £80 million, while a Lincolnshire-wide rate raises only £300,000? My constituents wonder why, if Londoners want services, such as free bus passes for the elderly, they should not pay for them. My constituents and others throughout the country should not bear those heavy costs.

Mr. Ridley

I shall not seek to compare Lincolnshire and London. However, I believe it right that the costs should fall in large part on the ratepayers. There is a complicated division through TSG and RSG on how much is paid by ratepayers and how much by taxpayers. It varies with every local authority. There is a different percentage for every year for every local authority.

The hon. Member for Kingston upon Hull, East wants to introduce a money Bill procedure. That would be too difficult. It would make the timetable for the annual determination even more complex. The Bill would have to go through the House by the end of the year to make the rate determination later. That would add an extra stage to the parliamentary procedure.

Mr. Prescott

No.

4.30 pm

Mr. Ridley

I wonder whether the hon. Gentleman has the right target. His proposal would mean adopting that new procedure for the relatively small amount of money involved in this levy, but leaving the same procedure for the rate support grant, which involves billions of pounds. The rate support grant is simply the subject of an affirmative order, which is exactly what I am proposing for the levy. The hon. Gentleman is mixing his priorities in wanting a money Bill for LRT's expenditure of £300 million, or whatever it is, and a simple affirmative order debate for rate support grant.

There is no question of debating the police precept. I wonder whether the hon. Gentleman has consulted the Opposition's business managers to ascertain whether they want to accept an obligation to debate such a private Bill as well as an affirmative order on the levy. I am sure that if the Labour party cherished any hope of getting back into office, the Labour Whips would try to dissuade the hon. Gentleman from that idea.

Mr. Prescott

This is amazing. I do not believe that the right hon. Gentleman has any sympathy for local democracy. We are talking about taking over the role of determining local services. The right hon. Gentleman has made a mistake about rate support grant. Admittedly, that involves a larger sum, but he is not now determining the rate. With the consent of the House, the right hon. Gentleman will determine the rate for those people. A rate support grant does not do that directly.

Mr. Ridley

The hon. Gentleman is, as always, quite wrong. The rate support grant determines the rate. The bigger it is, the lower the rate; the lower the rate support grant, the higher the rate. The rate support grant makes a difference far greater than this measure will ever make. The hon. Gentleman seems to be getting his priorities wrong in wanting an affirmative order for one thing and a money Bill for another.

The new clause contains suggestions that there should be consultations with the local authorities at the time of setting the rate. The GLC does not consult the boroughs when fixing its precept, and the receiver of the Metropolitan police is not statutorily required to do so when fixing the police rate. There are no precedents to suggest that there should be consultation.

Last Thursday I went through the list of consultations that we undertake. I believe that the House agrees that that is not the right thing to do. Provision is made for a three-year strategy under clause 7, informing local authorities of fare and service levels under clause 29; the annual business plan under new clause 10; the report and accounts of LRT, which are to be laid before Parliament, under clause 33; and an annual debate on the levy. Consultations can become otiose if we extend them beyond the enormous amount of work involved in those provisions.

I shall now discuss the vexed question of the percentage presently being paid. There will never be a finite precise and accepted answer to this question, as it depends on the year taken and how these matters are examined. The capital side is an especially difficult matter. The 55 per cent., which the hon. Member for Kingston upon Hull, East has proposed, is fallacious. Payment for a capital debt incurred on assets—this is the first area of disagreement between the Government and the GLC—can be made annually as assets are acquired—for example, buses and rolling stock. That has been the GLC's practice towards London Transport. Payment can be made also by writing off, repaying or amortising the borrowing over the life of the asset, or over a shorter or longer period.

An annual amount is still to be invested for London Transport, whether that is financed by capital grant or borrowing. It is for the GLC to decide how to finance its capital investment. The GLC decided to finance that investment by annual capital grant. Only in December 1983 did the GLC decide to switch that payment by moving some of the borrowing from the housing to the transport account. The GLC decides how to finance, but the amount of money that has gone to London Transport is there for all to see. It must be right to take into account LRT's annual capital grant. It is pure creative accounting suddenly at this late stage to make a major change in the figures by switching from capital grant to borrowing.

Revenue is a complicated matter. In 1983–84—that is not the only year that we should consider—the GLC made a determination of £235 million for revenue support. The outturn may well have been only £158 million— and we have just got that figure—but the precept that the GLC charged to the ratepayers was based on £235 million. In discussing the share financed by the ratepayers, it is correct to take the figure of £235 million, not the outturn figure. The 72 per cent., which my hon. Friend the Minister of State established in Committee, was derived from the precept, based on the £235 million revenue determination. That was the ratepayers' contribution, about which we last heard in Committee, but I know that the hon. Member for Kingston upon Hull, East seeks to chip it down by a further 3 percentage points because of the carry forward.

Mr. Prescott

It was the Minister of State who did so.

Mr. Ridley

The hon. Gentleman, not my hon. Friend the Minister of State, did that.

A deficit of £25 million was carried forward from last year. Due to the travelcard, a £35 million surplus will be carried forward this year. For the hon. Gentleman's benefit, I point out that surpluses in future years will be carried forward by the Government, thereby reducing the ratepayers' contribution for that year. It is impossible to reach complete agreement on what should happen when one has inherited a £25 million deficit and passed on a £35 million surplus. The figure works out at 72 per cent., which is one of the points of difference between the GLC and the Department. I stick to my belief that 72 per cent. is the right figure.

Mr. Prescott

The right hon. Gentleman must recognise that there is a difference between carrying forward a £35 million surplus and giving it to the ratepayer, so that the London ratepayer gets all the money. Presumably the proposal that the right hon. Gentleman has just announced means that the ratepayer would get two thirds and he would retain one third.

Mr. Ridley

No. If money is carried forward, the subsidy needed for the following year will be that much less. To that extent—if the hon. Gentleman wishes to put it that way—the ratepayer will have to produce two thirds of the reduced figure and the taxpayer one third. The basis in the Bill is that the subsidy is shared two thirds and one third. Therefore, if the subsidy is higher than expected, the excess will have to be found in that ratio, and, if it is lower than expected, the benefits will be passed on in that ratio.

My Department's figures for 1984–85 show that ratepayers will be paying 78 per cent. of the total subsidy. That calculation is not seriously challenged by the GLC, which admits that the figure will be 75 per cent. The dispute is between 69 and 72 per cent. for 1983–84 and 75 and 78 per cent. for 1984–85. I do not believe that those figures will ever be reconciled, because they depend on so many ifs—if the GLC had been receiving grant—it has not—if it had not ignored the allocation of TSG to boroughs' expenditure — it has. There are so many subjective interpretations of the calculation. However, all the figures involved in the dispute are very much higher than the two thirds included in the Bill.

If LRT were already responsible for public transport in London, ratepayers would be paying 10 per cent. less of the subsidy, as their contribution will be set at a maximum of two thirds of the total. Under the GLC's plans, ratepayers will be contributing nearly 80 per cent.

In addition, when LRT takes responsibility for public transport in London, there will be large savings from increased efficiency and reduced fraud. For example, the GLC is blocking savings of £20 million in a full year identified by London Transport on extending the one-person operation on buses and on underground and bus engineering. I believe that there are many more savings to come.

Even more money could be saved or put to better use if the GLC abandoned its extravagant political gimmickry and its £3 million political publicity campaign. All Londoners who are ratepayers or travellers will benefit from the change to LRT, and the benefits will be won without the swingeing fare increases and closures that the scaremongers predict.

The Bill will be good for all those concerned. I believe that it contains substantial advantages for the ratepayers, not only next year, when LRT comes into existence, but over the years as we succeed in achieving the savings in the management of LRT that the managers themselves believe to be possible. I hope that the House will reject the new clause, because it would not be fair or right to include it in the Bill.

Mr. Harry Cohen (Leyton)

I support the new clause, which would limit the ratepayers' contribution to the running of LRT. I believe it right that that contribution should not exceed 55 per cent.

The new clause also provides for proper consultation with local authorities over the expenditure of LRT. The Bill does not provide for adequate consultation about the ratepayers' contribution. The limiting of the ratepayers' contribution and proper consultation are important elements in the new clause.

4.45 pm

The contribution of ratepayers is a vital aspect of our debates on the Bill and I am amazed that no Liberal or SDP Member is present. That is a measure of their interest in the contribution of London's ratepayers. I hope that that message gets back to those ratepayers.

The Government insist on a minimum contribution of two thirds from the ratepayers.

Mrs. Chalker

Maximum.

Mr. Cohen

It will become a minimum, because the figure can be increased merely by order.

Ratepayers will not have a two thirds share of the appointments to the management board or the passenger committee of LRT. The Secretary of State will appoint all the members of the board. The ratepayers will not have two thirds of the say in the running of LRT. My hon. Friend the Member for Newham, South (Mr. Spearing) pointed out that for many years we have operated on the principle of no taxation without representation. That should apply to LRT. If the Secretary of State wants total control of LRT, which he provides for in the Bill, he should pay for it, or he should at least pay much more than is proposed in the Bill.

The two thirds is an arbitrary figure which the Government plucked out of the air. They originally proposed a figure of 50 per cent., but changed it in Committee. There has been no proper analysis of the correct proportions between ratepayers and the Government. The Secretary of State is trying to shift the burden from the Treasury to the ratepayer.

Mr. Leigh

If the hon. Gentleman represented a seat outside London, would he still say that the ratepayers' contribution should be limited to 55 per cent.? Why should that be so, when the rate base in London is so much higher than it is in other areas? Why should my constituents have to suffer taxation without services?

Mr. Cohen

All transport services are subsidised. No service is fully self-financing. That is why the basis of the Bill is so wrong; it suggests that public transport can be run as a business. The Secretary of State said today that London, as the capital city, is a special case and has special problems in running a public transport service. The answer to the hon. Member for Gainsborough and Horncastle (Mr. Leigh) is that the Secretary of State is taking total control of the running of London's public transport. If he wants that, he should pay for it and not put the burden on the ratepayer.

The Minister of State said on Thursday: There is no hit list and there will not be, and the financial provision that the Government have approved gives no support to the GLC's allegations about the future of LT. The hon. Lady was under pressure on that issue. She said: For 1984–85 the Government have approved £300 million of subsidy to LT which is close to LT's budget figure in its three-year plan." — [Official Report, 5 April, 1984; Vol. 57, c. 1136.] What the Minister did not say was that the Government's transport supplementary grant figure, showing their own support level, was about £90 million or £100 million. What the hon. Lady did not say about the subsidy is that it will not all come from the Government, but that £200 million of it will come from the ratepayers. There will be no savings for the ratepayers in that respect. The Government are taking advantage of the change to reduce the subsidy and shift the burden on to the ratepayer.

Mrs. Chalker

indicated dissent.

Mr. Cohen

The Minister shakes her head, but she cannot have it both ways. On Thursday she tried to deny that there would be service cuts. She said that the level of subsidy would still be high. It was in that connection that she mentioned the figure of £300 million. Today she is facing pressure, not about service cuts, but about the ratepayers. We are concerned that ratepayers should not be asked to fork out too much. The Secretary of State says that there will be relief for the ratepayers because savings will be made. When it suits them, the Government try to have it both ways.

When we discuss the level of services and rates, Conservative Members invariably argue for lower rates and fewer services and Labour Members invariably argue for higher rates and better services. However, in the council chambers, both sides have to spell out their proposals for the services and the rates. That is what local democracy is about.

The Secretary of State and the Minister are trying to get away with not spelling out the consequences of their proposals either on services—they say that services will not suffer—or on the ratepayers. If the ratepayers are to benefit from the Government's proposals, the Minister should spell out the consequences for services, which she failed to do on Thursday. What cuts will there be in services? How many jobs will be lost? By how much will fares rise? The Minister has a duty to answer. If it is the other way round — that services are not to be cut dramatically and that fares will not rise—how much greater will the burden be on ratepayers?

The Minister said on Thursday that there would be a subsidy of £300 million. If £200 million of that comes from ratepayers, business as well as domestic ratepayers will suffer. They will suffer from the increase in fares, which will produce higher business costs and be reflected in the London weighting settlement, and they will not make savings from the increased rates.

The 66 per cent. which the Government are trying to impose on the ratepayer is a heavy and unjustified burden. The Secretary of State has altered the basis on which transport in London is to be run. He proposes to take away the functions of the GLC. At least the GLC has to balance the interests of ratepayers with those of passengers, as well as considering the financial burdens. The Secretary of State does not have to consider the interests of the ratepayers. He does not have to calculate what the cost of his policies will be to ratepayers or, indeed, to take into account the effect of this burden in terms of rate-capping penalties.

Local authorities could suffer penalties as a result of the charge which the Secretary of State puts on them by way of the rates contribution to running LRT. The fact that the local authorities could suffer penalties as a result of that charge is, by itself, reason for them to be properly consulted. That is why the new clause specifies that the local authorities should be consulted about the overall running charge for LRT.

The debt charges of London Transport should be taken over by the Government. The Government are taking over the assets of London Transport. They are taking it over as a going concern. They should therefore take over the liabilities as well. In my view, they should write off the debt charges, at least in so far as they fall on the ratepayers.

The Bill contains many other headaches for ratepayers, particularly in connection with privatisation. It is not surprising that clause 12, which enables a massive handout to be made to private operators, is immediately followed by clause 13, which is about the ratepayers' contribution towards those private handouts. I foresee that, on marginally profitable routes at least, private operators will move in and LRT will be increasingly dependent upon private operators for the running of those services. The ratepayers will have to fork out an increasing amount, year after year, for those services. They could find that the burden upon them increases.

For the debating of those important consequences for the ratepayers, after the taking over of that local democratic function, the Government are allowing only a debate on an order in the House. London Members will have only one and a half hours in which to voice their views and defend the interests of their ratepayers on these vital matters. That is inadequate. It would be far better for LRT to promote a private Bill about the ratepayers' contribution, as proposed in the amendment, so that we can have a proper debate.

The Secretary of State placed much reliance on the fact that savings would be made, but did not spell out where they would be made. However, towards the end of his speech he said that there would be savings because of the reduction in fraud. The current GLC campaign has already reduced fraud considerably, but when fares are increased — as will happen under the Bill—there will be more fraud, so there will be no savings in that area. In any event, it is nonsense for the Secretary of State to suggest that the reduction in fraud will enable him substantially to reduce the ratepayers' contribution.

The Minister of State and the Secretary of State have dressed themselves up, as the Government frequently do, as friends of the ratepayer. In fact, they are to tax them more and shift the burden from central Government on to the ratepayers. The trend will continue ever more in that direction. Talk about reducing fraud! The best way to reduce fraud would be to kill the Bill, as the real fraud is the Government making out that they are the taxpayers' friends, when the opposite is the truth.

Mr. John Maples (Lewisham, West)

I hope that the hon. Member for Leyton (Mr. Cohen) will forgive me if I do not follow him into that esoteric maze of figures, as it is possible to add them up in almost any way that one wants to suit one's argument. I am sure that my hon. Friend the Minister will set the record straight at the end of the debate.

I should like to explore one burden that will fall on ratepayers—the capital expenditure of London Regional Transport — and how it is financed. The method of financing could substantially affect the amount of expenditure that must be borne by the Government or through the rate levy, and the total affects the two thirds that will be borne by ratepayers. We are discussing an enterprise that will have nearly £2 billion worth of assets and a provisional debt limit of £100 million. There is, therefore, an assumption that almost all capital expenditure will be financed by grant awarded by the Secretary of State. LRT is planning a capital expenditure programme of about £150 million to £180 million a year. I wonder whether that is right. Capital expenditure can be financed from internal sources such as profit, if there is any, or depreciation, and from a variety of external sources such as grant, loans—they are provided for to some extent, but perhaps should be provided for to a greater extent — and leasing, which is a form of off balance sheet borrowing.

5 pm

Although LRT might not be profitable for a long time, or ever, there will almost certainly be bits of it that are profitable. Some bus or tube services or tube line extensions clearly might make a substantial positive return. In those circumstances, it is right that some of the necessary capital expenditure should be borrowed as that enables the expenditure to be spread over several years. If all of the expenditure must be financed from grant, 100 per cent. of it will fall on the ratepayers in the year in which the grant is made. If the expenditure is financed wholly or partly by a loan or by leasing, the financing of the expenditure will occur over some time. If the assets in which the money is invested are profitable, the profits will repay the loan. If the asset is not profitable and the loan must be repaid by an annual ratepayers' subsidy, at least the expenditure is still spread out. We should question the assumption that such a substantial investment programme should be financed by grant.

Conservative Members hope that, through the Bill, LRT will behave more commercially. Borrowing is a perfectly proper commercial activity and imposes discipline on how the enterprise is run as debt service payments must be made at the end of each year.

By a perverse mechanism, Budget changes to capital allowances have made leasing an especially attractive method of financing an asset for the next few years as people are anxious to use up capital allowances while they can still do so. The lessee now makes extremely advantageous deals. London Transport started to do some leasing last year and I see that it plans to lease about £27 million worth of assets this year. That is a step in the right direction and a proper way in which to finance capital expenditure.

Will my hon. Friend the Minister say how the Department envisages LRT's capital expenditure being financed? In what circumstances would she regard it as right for LRT to borrow? In what circumstances might the Secretary of State approve borrowing and in what circumstances might he increase the £100 million limit? Although £100 million is a large sum to us, it is relatively small in the context of an enterprise which has £2 billion worth of assets and a turnover of about £1 billion. If LRT could demonstrate that it had an investment programme which could properly be financed partly or wholly by borrowing, it should be permitted to do so. They would have to be one-off expenditures which it would not be reasonable to ask ratepayers to finance in one year, or expenditures which offered some return to help finance the expenditure.

It would be right for LRT to be able to borrow. I doubt whether £100 million is enough, and I should be grateful if my hon. Friend the Minister would say a little more about the policy that the Department will adopt in regard to LRT's capital expenditure.

Mr. Spearing

The hon. Member for Lewisham, West (Mr. Maples) dwelt on LRT's capital structure and expressed anxiety for economy on behalf of the ratepayer. He has a right and, perhaps, a duty to do that, but I assure him that, as a London Member who, alas, will shortly have to take responsibility for liaison between his constituents, the Department of Transport and whoever is in 55 Broadway in future, these will not be matters that will take a great deal of his time. I suspect that he will deal not with the financial matters but with the level of service that whatever financial structure there is will provide. Such considerations were notably lacking in his speech.

I intervened during the speech of the Secretary of State and said that, knowing his predilections, did he think that there should not be taxation without representation in regard to what he was saying. He neatly sidestepped the question by saying that some of the figures that he would produce would be reassuring. He dropped into the pattern that was followed by the hon. Member for Lewisham, West as he argued that if there is to be a rate precept, it will be lower than I think, not realising that I am worried about the rates and the level of services that they will provide.

The Bill goes slap bang against the major constitutional principle about taxation and representation. Right hon. and hon. Members will represent taxpayers in regard to the proportion of moneys that go to London Regional Transport directly out of the Consolidated Fund on the approval of the Secretary of State. However, we shall also be asked to represent our ratepayers in respect of the precept which the Secretary of State will, through a single vote, put on all London ratepayers whether they be domestic, commercial, business or industrial. Representing such ratepayers in that way means that we shall have a much wider responsibility in respect of transport in London which I do not welcome. That is what must happen, however, as that is how the Government are setting the financial structure of accountability. At the moment, the rate element, of which the Secretary of State spoke, is expressed through the GLC rate. The GLC levies that rate on all London ratepayers and it is through members of the GLC that the resulting quality and detail of service is determined. It will now fall to Members of Parliament to exercise that rather unwelcome duty and we shall represent Londoners and their services.

More than that, the precept will, as far as I can see, be a constitutional novelty. It will be an extension of centralised power over local government and ratepayers such as we have never had before. The Bill gives the Secretary of State enormous powers of direction over LRT. Finally, the rate precept will in part provide profits for some contractors and private enterprise — money which now flows into London Transport. Money may be made from the provision of some services, but I doubt whether much will come from economies, such as those about which the Secretary of State so airily spoke. He talked of economies in engineering services. It is true that London Transport has considerable engineering overheads, especially for the tube railways. Our deep level bored tube system is unique. The costs of ventilation, escalators and lifts are greater for that system than for other comparable rapid transit systems, for example, in New York or Paris. The statistics provided for Conservative Members are misleading in the respect, and the economies of which the Secretary of State talked will not be available.

Mr. Maples

The hon. Gentleman does not believe that economies in the engineering services sector are available, but has he read the report of the Monopolies and Mergers Commission on bus maintenance in London Transport which shows that substantial savings are available?

Mr. Spearing

My remarks were about the underground railways. My admiration of the existing London Transport system has not been unqualified. If the hon. Gentleman went through the files of successive chairmen of London Transport, he would find that I am one of its major critics, especially about the design and maintenance of buses. I had the pleasure of introducing a Bill to enable London Transport to go into partnership with bus production companies to provide buses to suit London conditions. I take the hon. Gentleman's point, but I was referring to the tube railways, where economies will be fewer than the Secretary of State realises.

At present we have a fine bus called the Routemaster, which was designed and built 30 years ago. That may sound old but it is a good bus; indeed, the crews tell me it is the best bus in London. It has a rear entry and requires two men. There are several thousand of them and they are in almost as good condition as when they were new. When LRT gets rid of the conductors, who are necessary and useful, especially to ladies with shopping and for the safety of passengers, what will happen to those excellent Routemaster buses? Will they be sold off? Although there may not be the savings in engineering which the Secretary of State thinks there may be, there may not be savings in buses either.

If the rate precept does not produce many savings— the proof of that pudding will be discovered only in the eating — it will have to provide profits for whatever element of London Transport is taken over by private enterprise. The Bill makes it clear that wherever possible LRT will introduce private enterprise but no form of private enterprise will come unless there are profits. It will not make profits unless it does one of three things: take over the routes which provide cream now and help to keep going other routes which would otherwise be axed; cut existing services on the part of the service that they take over; or get grants from LRT through taxation and the precept to sustain those profits. Some will come from the precept on ratepayers. All hon. Members know that rates are unfair and that they are not the best way of raising public revenue. We cannot abolish the rates system, but where taxation can be raised in another way, we should do it.

Therefore, the House should be able to decide on the rate not by a single, unamendable Order-in-Council, but by the procedure advocated by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott)— by a money Bill, where an amendment can substitute one figure for another. That cannot be done during proceedings on a statutory instrument.

Mr. Jeremy Hanley (Richmond and Barnes)

Does the hon. Gentleman agree that a fourth way of succeeding is to operate efficiently? The hon. Gentleman did not mention that, yet the Bill is about efficiency.

5.15 pm

Mr. Spearing

I should like to think that the hon. Gentleman was correct. The duties laid out in clause 2(1) are narrow, and neither efficiency nor service features in the general duties of LRT. However, I agree with him. I have criticised the management of London Transport on numerous occasions about the efficiency of the bus services, especially about the interval between buses and the generation of maximum traffic. That does not feature in the Bill. Its centre of gravity is not to provide as many passenger journeys in London as possible and so improve the quality of London life, but to integrate, sell off and distribute public assets. That is the motivation for the Bill.

The hon. Gentleman properly reminded me of a fourth and genuine way of producing profit where no profit exists —the rewards for the conditions and terms of service of those who work in London Transport. It is a difficult job. It involves non-social hours, working at times when others are at leisure and providing service all the time. Our London Transport workers are not over-paid. The hon. Gentleman would not suggest that nor, I hope, that economies could be made there. I am glad to see the hon. Gentleman nod in agreement with me. They need canteens —popularly known as "P and T"—at the end of the bus routes and health services. Driving in London is not a particularly healthy occupation, and the staff need good health back-up. Public employees should have recreation clubs and sports grounds, which should not be regarded as surplus to capacity and sold off.

I passed a bus garage—I shall not name it in case it gives people ideas—where there are tennis courts and a bowling green. I expect that Tory Members would consider it beautiful to sell off for housing. The hon. Member for Lewisham, West need not look askance because anybody leasing or taking over such facilities may be tempted to say that those tennis courts and sports grounds are not needed and that the space could be put to better use.

When it comes to the crunch I hope that the hon. Gentleman will support delegations of bus, tube and other London Transport workers who may feel it necessary—I hope that it will not be — to come to him and say, "Leaving aside the question of the precept and levels of service, important though they are, please do not let them screw us down on conditions, wages and terms of service". That is one way in which a private operator and a private person, even under the arrangements we shall discuss under clause 3, could induce lower costs and, therefore, increased profits at the expense of those who operate the service. I am glad that Conservative Members are shaking their heads because if it comes to that—I hope that it will not— we can rely on their support. Even if that happens, we should discuss those matters during annual debates on annual money Bills precepting upon the citizens of London. Unless the Secretary of State accepts the new clause, that will be impossible.

Mr. Ernie Roberts (Hackney, North and Stoke Newington)

It has already been made clear in the debate that local authorities will have to make a 66 per cent. compulsory payment towards the financial support of London Regional Transport. That will mean that the rates for the 32 boroughs for the cost of transport will be fixed by the House; it will be done by dictation and not by local democracy. New clause 12 contains the London Transport Money Bill solution, which is a much more democratic method that will provide more time for discussion and amendment. Furthermore, if London's ratepayers are losing their democratic control of London's transport, they should not contribute towards the cost of running it through their rates.

The Secretary of State said that London has high capital resources. Has he never heard of the poverty in Hackney and some other London boroughs? Hackney has 25 per cent. unemployment, 16,000 people on the housing waiting list, 5,000 one-parent families, many elderly and mentally ill people, and elementary social needs that it cannot meet even now. The City of London certainly has high capital resources, to much of which it has no right since it has taken them from other boroughs.

The Secretary of State asked who should pay: ratepayer or taxpayer? To equalise the burden among the 32 boroughs—the poor boroughs as well as the richer ones —and among those who use London Transport, many of whom do not pay rates, the finance should come from central Government. They are not short of money. They have £126,000 million to spend. I have referred to that figure frequently in the House, because when hon. Members say that we cannot afford to provide various services I remind them of what they are taking from the pockets of British taxpayers, and of the way in which that money is being wasted in many areas. The Government could do no better than to spend some of that money on transport for the people of London, and for those who live in other areas when they begin to take over their transport services, as no doubt they will when they have finished with London.

Ratepayers carry a great burden for all sorts of services and even the Government recognise that rating is an unfair taxation. This is their opportunity to put it right, at least in part, by placing the burden of London Transport on central taxation and so relieving the ratepayers of this burden. However, they will not do that. Instead this Bill will increase the burdens upon ratepayers and will increase transport costs.

The GLC, which is responsible for providing money to London Transport, states that examination shows that the actual charge on the average domestic ratepayer in 1983–84 of operating LTE in line with GLC service and financial policies, after taking proper account of TSG and bearing the maximum block grant penalty is 39p a week. If LRT had existed in 1983–84 and had operated within government's plans, the charge would have been 58p per week (i.e. 50 per cent. higher than the actual charge because of the government's proposed treatment of capital expenditure. Similar figures for the actual charge in 1984–85 and the charge for financing LRT are 58p and 60p respectively. This narrow gap hides the fact that under LRT revenue support of £190 million would be £100 million lower than determined by the Council and to achieve this would have meant at the minimum a fares increase in the region of 25 per cent. and bus mileage reduced by around 5 per cent. That is the estimate of the body that now subsidises London Transport and which knows what it is talking about. It is based not on theory but on practice. The GLC continues: On present estimates the financial regime which the Secretary of State intends to apply to LRT will in both proportionate and absolute terms result in a higher ratepayer contribution than at present.

Mr. Richard Tracey (Surbiton)

Does the hon. Gentleman agree that it is not right for him to stand up in the Chamber and read a brief prepared for him by the GLC, of which I have a copy in front of me?

Mr. Roberts

Although hon. Members might have read this document, they have not understood it; if they have understood it, they have completely ignored it. They should take note of the advice being given to them by the GLC, because it knows what it is doing and saying from practice.

If the Government are to reduce the costs of public transport to London ratepayers they must either significantly increase fares or cut services and major capital investment. I say to the Tory Government and to the Secretary of State: stop destroying the democratic rights of Londoners. Allow them to set their own rates, to control their own transport and, furthermore, to elect their own Government.

Mr. Martin Stevens (Fulham)

I hope that the House will allow me to mention a few matters that are important to the London Boroughs Association. I do not know whether my right hon. Friend the Secretary of State or my hon. Friend the Minister of State will reply to this debate on the new clause, but I hope that at some time this evening they will answer the points made by the LBA, which are fairly simple.

London Transport's bus and underground services extend in some cases beyond the Greater London area, and the association is concerned that the burden of those services should not be carried by the ratepayers of Greater London. Bus services are already subsidised by the relevant county councils, and underground services are already subsidised by central Government and will continue to be so. However, it would be helpful to the London Boroughs Association—on whose parliamentary panel I serve—if these matters could be clarified and confirmed by my ministerial friends.

5.30 pm

The second point is slightly more complex and relates to the contribution by London ratepayers to the Secretary of State's proposed expenditure on London's transport. The association claims that the two thirds provision is arbitrary and could at some time lead to — [Interruption.] Opposition Members are suggesting that I am reading my speech from a piece of paper. When I have sat down I shall give them the piece of paper, and they will see that it contains nothing approximating to a speech.

Mr. Jeremy Corbyn (Islington, North)

As it is always useful to know the sources of these things, will the hon. Gentleman assist us by saying whether someone has assisted him in the preparation of his speech?

Mr. Stevens

I began my remarks by saying that I was raising points put forward by the London Boroughs Association, on whose parliamentary panel I serve. I thought that I was declaring an interest as well as declaring the place from which these proposals emanate. I am glad to reassure the hon. Gentleman on that matter.

The association feels that the two thirds rule has been adopted arbitrarily by the Secretary of State and fears that it could prove — not at the outset, but later — a considerable burden on the ratepayers of Greater London. I understand why the Secretary of State has acted in this way, and for that reason I have not tabled new clauses or amendments. It would, however, help the association if these points were clarified.

The association expects the new LRT board to be treated as a local authority for grant-related expenditure purposes. I suspect that London Regional Transport will be treated by my right hon. Friend as a nationalised industry and, therefore, that it would be inappropriate to treat it as a local authority for such purposes. Naturally, the London Boroughs Association is concerned that those who use the service should pay for it and that in future the burden on London's ratepayers should not get out of hand. I very much hope that we shall have answers to those points.

Mr. Chris Smith (Islington, South and Finsbury)

I support the new clause. It has been said that the Bill is about efficiency. That is wrong, because efficiency is never achieved by the simple substitution of a Secretary of State-appointed bureaucracy for a bureaucracy that happens to be accountable through the GLC to the voters of London. That is not the way in which efficiency in any organisation can be promoted.

The Bill is far more about accountability and political control. That is what the Government are about in taking away political control of London Transport from the GLC. It would be far more honest if the Government and their supporters said that quite openly, rather than cloaking it in words such as "efficiency". We are talking not about the efficient or inefficient administration of a particular transport undertaking, but about who controls that undertaking and makes the decisions. That is why the new clause is particularly important.

Mr. Martin Stevens

Does the hon. Gentleman consider that the six members of the London Transport Executive, who have relatively recently been appointed by the leader of the GLC to that 10-man board, are contributing to efficiency?

Mr. Smith

The hon. Gentleman is under a misapprehension. Those six members were appointed by the GLC, not by the leader of the GLC. Although I am not privy to the board's discussions, I have every confidence in those members, and I have every confidence also that they are bringing much-needed sagacity to its deliberations.

The new clause seeks to reduce the percentage contribution from London's ratepayers that is envisaged under the Bill. Secondly, it insists that when setting that contribution the Secretary of State consults the GLC, the Common Council and the London boroughs. Thirdly, it seeks to enshrine the Secretary of State's decision in a money Bill—to be debated by the House—rather than by means of an order.

Those three purposes are extremely worth while and necessary. We are talking about a decision by the Secretary of State for Transport effectively on behalf of London's ratepayers. In determining the overall level of contribution of London's ratepayers to the administration, running, facilities and capital expenditure of London Transport, the Secretary of State is effectively levying a rate upon the people of London.

Recently, this House debated a Bill—and it is being considered in another place this very day—in which the Secretary of State for the Environment took upon himself decisions to limit the amount that local authorities could levy on their ratepayers. Many of us rightly argued that that was profoundly undemocratic and that it removed rights from the voters in those local authority areas. That was a valid and necessary argument then, but how much more so is it now when the Secretary of State for Transport — in no way accountable to the people of London except through London Members—takes it upon himself to levy a rate on the people of London? To my mind, that is an extremely undemocratic form of expenditure and taxation.

The new clause does not seek to do away with that power altogether— that would be too much to expect from the Government. Instead, it seeks to claim that at the very least they should, first, not increase the amount that London ratepayers will have to contribute compared with what they contribute now and, secondly, that they should consult the GLC, the Common Council and the London boroughs each year when embarking on this exercise. That, surely, is not too much to ask of the man who is taking upon himself a rate-levying power.

If the Secretary of State hastens to tell us that he has no intention of increasing the levy that London ratepayers are to spend, is it his intention to reduce massively the capital investment that London Transport undertakes? That is the direction in which the figures in the Bill will lead us if he says that the cash contribution—never mind the percentage—of London ratepayers is not to rise. Their percentage contribution, under the Bill as it stands, will rise. If their cash contribution is not to rise, the overall amount of capital investment must fall. If that is the case, what future can we possibly expect for London Transport, which has been grossly under-invested in past years? Its future surely lies in better, more sensible and more fruitful investment, rather than in less investment.

The Secretary of State must be frank with the House. He must tell us either that under his Bill as it stands the ratepayers' contribution is to increase, or that the contribution that anyone makes to the capital investment of London Transport in the future will decrease. Either of those two events must happen if the Bill goes through as it stands.

Like any good and law-abiding Opposition, we are seeking in the new clause to make the Secretary of State's life a bit easier. We are seeking to enable him to carry on with a full capital investment programme, but at the same time not to levy a greater rate upon the people of London than they now have. I hope that the Secretary of State will see the sweet reasonableness of the case and accept the new clause.

I have dwelt only upon the first two provisions of the new clause—the one which seeks not to increase the ratepayers' contribution and the one which seeks some degree of consultation. I shall now touch briefly on the third provision of the new clause, concerning a money Bill.

It is only appropriate that the House of Commons should want to discuss a capital contribution to London Transport of the magnitude that we expect to see under clauses 12 and 13, for many important capital projects will be at stake. It is right and proper that GLC money Bills come before the House. In exactly the same way, the new clause asks that the Secretary of State should come before the House with an RT money Bill which the House can discuss if it wishes.

My hon. Friend the Member for Newham, South (Mr. Spearing) dwelt with great perspicacity on the difference between an order which might be made by the Secretary of State and a money Bill which can be properly debated and to which amendments can be tabled. When we are effectively talking about a rate levy upon the people of London — the determination of an amount which the ratepayers of London are asked to contribute and to spend — a debate should take place in this House. Hon. Members representing London seats will be the only accountable forum for London ratepayers in the matter, and they should have the opportunity to challenge, to amend and to discuss such a measure. That, surely, is not too much for us to ask.

The new clause will provide the Secretary of State with a sensible procedure which can be followed when he takes the awesome decisions that he will have to take under the measure to levy a rate upon Londoners and to decide how that rate and his own contribution should be spent. The new clause raises three very important issues. It seeks to give Londoners at least a shred of democratic accountability and some degree of say over what the Secretary of State will do with their money once he is exercising the powers enshrined in the Bill.

5.45 pm

Mr. Corbyn

My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) has covered most of the ground that I intended to cover; therefore, I shall be brief.

The new clause—which I hope the House will accept —does not fundamentally solve the problem raised by the very bad Bill that is before us, which removes from Londoners some fundamental democratic rights. The new clause will ensure only that the Secretary of State has to undertake some form of consultation with elected representatives of the people of London.

The hon. Member for Fulham (Mr. Stevens) was correct in saying that the new body, LRT, is likely to be treated as a nationalised industry rather than as a local authority. I trust that that means that the hon. Gentleman will be voting with us on the new clause. If he is serious about local democracy, he must at least support the new clause; indeed, he should oppose the Bill altogether.

Londoners elect, through the GLC, the people who run London's transport system; they appoint the members of the board. The members of the board are accountable to the GLC and the GLC is open to re-election.

In 1981, one of the major features of the GLC election campaign was transport policy and the administration of London Transport. In most GLC elections in my experience, transport has been the major issue, because it is of great concern to many people throughout London. They are concerned with the levels of fares, the services that are provided, and the methods by which the transport system is controlled. If the Bill goes through, that accountability will be lost. If the new clause is accepted, there will be some possibility of local people being able to go to their own locally elected councillors and make representations about various aspects of the service, rather than the Secretary of State arriving at the House, presenting his annual London transport Bill, and the House voting on it a few days later. If the new clause is accepted, it will at least mean that the local authority will have a period of consultation.

In the borough represented by my hon. Friend the Member for Islington, South and Finsbury and myself, there are several London Transport and British Rail facilities at some risk. The North London line is the subject of a considerable amount of GLC support in its development and maintenance, and possibly in regard to its long-term running costs. I believe that that line has been put at risk by the management of British Rail. Therefore, I hope that the Secretary of State will assure us that the line is not at risk. I hope that he will also assure the House that, in the annual presentation of his London Transport Bill, we shall have at least nine months in which to consult adequately our constituents to find out what they think of his proposals for London's transport system.

Nothing that I have heard has led me to doubt the validity of the GLC's fear that the Arsenal tube station may be closed. How will the people in that area be able to learn from the Secretary of State, in the space of a few days between the publication of his Bill and the House voting on it, what are his proposals for that tube station, which provides a particularly important local facility for them? If political pressures on the Secretary of State are to mean anything, it is not good enough to say that once a year the House will have a short debate on London's transport and vote upon it.

Many of us who represent London constituencies already complain that we find it difficult to raise matters concerning the administration of London's police force through the Metropolitan police, where there is no democratic control, save for the Home Secretary's statement and any questions that we can put to him. It is not good enough for the same system to be repeated on London's transport.

It is crucial to many people that we have a good transport system in London, and a transport system that is available to all. The proper motive for that transport system is not how little money the Government can spend on it, how bad the service can be or what profit it can make. The motive should be to ensure that everyone in London can travel about the city and can have confidence that there will always be a transport system. It should be to give those who are planning London's other transport systems, such as roads and road development, confidence that there will be continued expansion of public transport undertakings, rather than a closure of some services and cutting of others, which can only lead to more traffic.

The new clause goes some way towards ensuring that Londoners have some mechanism for raising their legitimate concerns about the future of London transport, and lays a small requirement on the Secretary of State so that he will be forced to listen to the elected voice of London before he produces his plan. What was said to us last week leads me to believe that a plan will be produced by a bunch of experts and we shall have to vote after a short debate in the House, without adequate time for consultation.

This matter is fundamentally important to the rest of the country because if the Government are planning to take this action against the people of London, to produce this kind of transport policy, what future is there for democratic control of transport undertakings elsewhere? Is this a dry run for the rest of the country, so that eventually all public transport undertakings will be under the direct control of the Secretary of State with appointed boards that can sell off assets, cut services and license operators at will?

This is a fundamentally bad Bill, but I hope that the new clause will add something to it and at least give some semblance of democratic control to the people.

Mr. Ridley

With the leave of the House, I shall reply briefly to some of the few new points that have been made.

I start with my hon. Friend the Member for Fulham (Mr. Stevens), who suggested that it was not fair that services that ran beyond the boundaries of the GLC should be financied by the boroughs through the rates. With the buses, London ratepayers will not be paying for the services that go beyond the boundaries, because if subsidy is needed it will be provided by the out-county ratepayers. Only tiny amounts of the subsidy to London Transport go on tube services that go beyond the boundaries of the GLC. My hon. Friend will no doubt agree that the fact that taxpayers are paying one third of the cost of the subsidy could be said to cover that small amount.

My hon. Friend's second point was that the London Boroughs Association was worried that the two thirds for the ratepayers could get out of hand, and his concern may have been about capital. That point was also made by my hon. Friend the Member for Lewisham, West (Mr. Maples). It does not make any difference how the capital for LRT, for the investments that go to the business of running public transport, is financed. The GLC has paid 100 per cent. capital grants and we shall continue that practice for the main part of the public transport business.

If we were to allow LRT to borrow for that capital, in the end the ratepayers would have to make repayments when the borrowings became due as well as repaying interest and there would be an ever greater amount of liability as the years went by. That would be to economise now and to pay much more later. That may have been the worry at the back of the mind of my hon. Friend the Member for Lewisham, West. However, there is no point in doing that while London Transport—or LRT—is inherently unprofitable and while its investment is not particularly lumpy—that is, it does not go up and down, but keeps more or less steady over the years.

Mr. Maples

There were two circumstances in which it seemed to me that it might make good sense to borrow. One was where there was a substantial capital investment programme that would not continue at that rate for ever, so that there was a lump—although if investment were to continue for ever at £100 million a year and the ratepayers were effectively to service that debt it would not matter whether it was borrowed or not. However, there will be circumstances in which that may not be so. Secondly, particular capital investment programmes may be able to show a commercial rate of return on the investment—the new line to terminal 4 at Heathrow might be one. If that project could be profitable, even if LRT as a whole was not, would it not be in the ratepayers' interest to borrow capital to do that rather than to finance it from grants?

Mr. Ridley

I agree with both of my hon. Friend's points, and those are our intentions. Profitable activities or a major one-off investment should be financed by borrowing. However, there will not be many of the latter, and there will be a fairly even investment programme, so it seems sensible to pay capital grants. That means that there will be no creation of the capital liabilities about which my hon. Friend the Member for Fulham was worried. I am convinced that the many economies that can be made will mean a diminishing ratepayers' contribution over the years.

This brings me to the point raised by the hon. Member for Islington, South and Finsbury (Mr. Smith), who said that either I shall have to put up the ratepayers' contribution, or I shall have to cut investment. I am putting the ratepayers' contribution down—next year it would have been 78 per cent., but I am putting it down to 67 per cent.—and I shall not cut investment. I shall do none of the dire things suggested by the hon. Gentleman. That is all that needs to be said on that.

The ratepayers are getting a better deal out of this Bill. Their contribution will be less than it has been, and as efficiency begins to work its way in it will come down still further. On that basis, the whole of the Opposition's case does not need answering, because they have argued for the proposition that the opposite will happen. I do not believe that it will, and I urge the House to reject the new clause.

Mr. Prescott

The debate has been about local democracy, about which we shall hear more this week.

There have been considerable differences between the difficult statistical definitions of how one can treat London Transport's accounts. Probably the most interesting point in the debate was made by the hon. Member for Fulham (Mr. Stevens), who called for more nationalisation, greater efficiency and improvement in the London transport system. That is not the sort of comment that one hears regularly from Conservative Benches about nationalised industries. I mention it in passing.

The Secretary of State spoke about figures and, in reply to my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), told us how he would be saving the London ratepayers' money and how he would reduce their contribution. It is important for us to bear in mind what these arguements mean.

The Secretary of State then spoke about capital financing and amortising debts, but that is the legitimate way to borrow for money requirements, and it is also a legitimate local authority practice. However, the Secretary of State failed to answer the real point, because I think he fails to understand the nature of the problem, which is that the £150 million in capital payments made by the GLC for last year and for the coming year for the running of London's transport is a charge on the revenue of London Transport of approximately £4 million. That is what it is by way of funding from a capital debt fund. If all that is to be found in one year, which is what the Secretary of State is suggesting, that must mean that more than £140 million extra will be put on the burden of running London Transport in the first year. I am sure that the London boroughs are concerned about that method of financing London's public transport. That is the issue, and nothing that the Secretary of State said today denied that that would happen. That is one reason why he will need a bigger ceiling on the ratepayers' contribution.

The Secretary of State appears to accept that the total amount of revenue support of £235 million is the sum involved. However, he got it wrong when he talked about £35 million extra income being created by the travel card. If he uses the £235 million total, he is really talking about a projection and not about reality. The reality after running the system for a year was that the total cost in revenue support was £200 million and not £235 million. He was working on an artificial ceiling. The reality is that the surplus at present under the GLC is such that that £35 million goes back to the ratepayer. If there are surpluses in the future in this profitable London transport system that the right hon. Gentleman promises us, they will be distributed in the ratio of two thirds to one third, so that the ratepayer will get back less of the surplus and presumably the taxpayer will gain.

What the right hon. Gentleman did not reject, and presumably could not reject, was that on the basis of the GLC share for the ratepayer, observing all the right hon. Gentleman's recommendations under his protected expenditure levels the ratepayers' share will be 45 per cent. I presume that that is the right hon. Gentleman's target——

Mr. Ridley

indicated dissent.

Mr. Prescott

If that is not the target, I do not know why we have protected expenditure levels recommended to the local authorities to observe. I thought that the target was supposed to show what it should cost to run a transport system. If the Secretary of State rejects that argument, he rejects the philosophy of the PELs themselves—and he implements them.

The right hon. Gentleman rushed on from 1983–84, where we have real expenditures on which to make a judgment, into the projection for 1984–85. But here again he will have to deal with figures in projecting what the ratepayers' share shall be. He said that it was about 78 per cent. That is bound to be based on projections. It cannot be anything else. The Secretary of State has already said that the travel card resulted in £35 million more in income than was projected at the beginning of the year. How he can go on to say how much the ratepayers will pay this year without the final figure defies imagination, though it is not surprising coming from a former Treasury Minister.

Looking at the figures for 1984–85, even balancing the right hon. Gentleman's argument, the way that he treats transport supplementary grants is distinctly different from the way that the Department of the Environment does it and makes me wish that the two Departments would get together to decide the fair way of determining TSG. But taking them into account this year, London Transport will be receiving £38 million less on the basis of the present calculation made by the Department of Transport. If the system is to be maintained, that will have to be found by the ratepayer.

The Government have pretty well made sure that there will be a tremendous increase in the costs of maintaining London's transport system, and in that case it will be denied the £38 million. If the right hon. Gentleman is running the system and directing London Regional Transport, the bill will not be so great. By increasing the penalties for the lack of resources and by reducing London Transport's income this year by nearly £38 million, the right hon. Gentleman pretty well guarantees that he has set up the Aunt Sally so that he can tell the electorate and the ratepayers, "We shall reduce it by 10 per cent." If he changes the calculation of the TSG, I have no doubt that he will be able to achieve it overnight without worrying about affecting levels of employment, effeciency and so on.

As for the levels of efficiency, today's debate really means that large savings will be made out of redundancies. Government supporters say quite happily that the Commission report showed that many more redundancies could be made. Mr. Bright, who is in charge of London Transport, says that it is possible to save considerably more by making people redundant. Although that may reduce the sums paid by London ratepayers, presumably taxpayers will pay more in their contributions towards redundancies and the maintenance of unemployment. Since this Government came to power the sums that they have paid in redundancies have totalled more than £6,000 million. The taxpayers' share of the burden of that policy will increase, albeit that London ratepayers will bear a reduced amount.

We have heard a considerable amount about the fares increase. The GLC has paid considerably more to freeze fares, and we hope that the Secretary of State will maintain that position. But it is expensive to the GLC. It represents an extra charge of £35 million, which affects costs in the year 1984–85. Nevertheless, presumably the Government are committed to a price increase equal to the level of inflation, which in London presumably means at least a 6 per cent. increase. We shall start the spiral yet again, as we saw when the Tories had control of the metropolitan areas, with prices going up with inflation, driving people off the buses, reducing services and resulting in an inadequate transport service in the rest of the country.

The new clause seeks to allow more consultation, as asked for by the London boroughs, and it is no consolation to the House to hear the Secretary of State say that, because there is no legal requirement for the police to consult local authorities about the rate precept, that should encourage the House to consider that local authorities do not have the right to be consulted about a rate precept on them for the provision of public transport.

I do not think that anyone has denied that the London Transport Money Bill proposed in the clause will provide more time for the House to debate the issue. It will provide the opportunity for amendments to be made to the percentage involved in the Bill. For anyone to suggest, as the Secretary of State has, that an order is somehow the same as a Bill defies imagination. That argument cannot possibly be accepted even by Government supporters.

Incidentally, as my hon. Friend the Member for Jarrow (Mr. Dixon) pointed out, the Government's proposal raises the spectre of devolution yet again. In the past we heard a great deal about the so-called West Lothian question — whether all hon. Members in this House could decide matters relating specifically to Scotland. Now we shall have the so-called London question—can everyone in the House determine London transport services and the rate supplementary levied upon the ratepayers? Surely that is not acceptable.

We have established a case that a rate supplementary grant can be maintained within the 55 per cent. limit that we propose in the clause, but it is not an ideal way of dealing with it. The Opposition believe that it should be dealt with by the local authorities. It is a local service. It is not the role of the House to get involved in the details of transport embodied in the Bill. It will be bad for the ratepayers. It will be bad for transport users. Overall, we believe that it will be bad for London. I have no hesitation in recommending to the House that it should support the clause.

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

The House divided: Ayes 164, Noes 260.

Division No. 235]	[6.07 pm
AYES
Abse, Leo	Eastham, Ken
Alton, David	Edwards, Bob (W'h'mpt'n SE)
Archer, Rt Hon Peter	Ellis, Raymond
Ashley, Rt Hon Jack	Evans, John (St. Helens N)
Atkinson, N. (Tottenham)	Ewing, Harry
Bagier, Gordon A. T.	Fatchett, Derek
Barron, Kevin	Faulds, Andrew
Beckett, Mrs Margaret	Field, Frank (Birkenhead)
Bell, Stuart	Fisher, Mark
Benn, Tony	Flannery, Martin
Bennett, A. (Dent'n & Red'sh)	Foot, Rt Hon Michael
Bermingham, Gerald	Foster, Derek
Bidwell, Sydney	Fraser, J. (Norwood)
Blair, Anthony	George, Bruce
Boothroyd, Miss Betty	Gilbert, Rt Hon Dr John
Boyes, Roland	Godman, Dr Norman
Brown, Hugh D. (Provan)	Golding, John
Brown, N. (N'c'tle-u-Tyne E)	Gould, Bryan
Brown, R. (N'c'tle-u-Tyne N)	Hamilton, W. W. (Central Fife)
Brown, Ron (E'burgh, Leith)	Harman, Ms Harriet
Buchan, Norman	Harrison, Rt Hon Walter
Callaghan, Jim (Heyw'd & M)	Hart, Rt Hon Dame Judith
Campbell, Ian	Hattersley, Rt Hon Roy
Campbell-Savours, Dale	Haynes, Frank
Canavan, Dennis	Healey, Rt Hon Denis
Carter-Jones, Lewis	Heffer, Eric S.
Clarke, Thomas	Hogg, N. (C'nauld & Kilsyth)
Clay, Robert	Holland, Stuart (Vauxhall)
Cocks, Rt Hon M. (Bristol S.)	Hoyle, Douglas
Cohen, Harry	Hughes, Robert (Aberdeen N)
Coleman, Donald	Hughes, Roy (Newport East)
Concannon, Rt Hon J. D.	Hughes, Sean (Knowsley S)
Cook, Frank (Stockton North)	Hughes, Simon (Southwark)
Corbett, Robin	Jenkins, Rt Hon Roy (Hillh'd)
Corbyn, Jeremy	John, Brynmor
Cowans, Harry	Jones, Barry (Alyn & Deeside)
Crowther, Stan	Kennedy, Charles
Cunliffe, Lawrence	Kilroy-Silk, Robert
Davies, Ronald (Caerphilly)	Kinnock, Rt Hon Neil
Davis, Terry (B'ham, H'ge H'l)	Kirkwood, Archibald
Deakins, Eric	Leadbitter, Ted
Dobson, Frank	Leighton, Ronald
Dormand, Jack	Lewis, Ron (Carlisle)
Dubs, Alfred	Lewis, Terence (Worsley)
Duffy, A. E. P.	Litherland, Robert
Dunwoody, Hon Mrs G.	Lloyd, Tony (Stretford)

Lofthouse, Geoffrey	Roberts, Allan (Bootle)
McCartney, Hugh	Roberts, Ernest (Hackney N)
McDonald, Dr Oonagh	Robertson, George
McGuire, Michael	Rooker, J. W.
McKay, Allen (Penistone)	Ross, Ernest (Dundee W)
McKelvey, William	Ross, Stephen (Isle of Wight)
Maclennan, Robert	Rowlands, Ted
McNamara, Kevin	Ryman, John
McTaggart, Robert	Sedgemore, Brian
McWilliam, John	Sheldon, Rt Hon R.
Marek, Dr John	Short, Ms Clare (Ladywood)
Marshall, David (Shettleston)	Short, Mrs R.(W'hampt'n NE)
Martin, Michael	Skinner, Dennis
Maxton, John	Smith, C.(Isl'ton S & F'bury)
Maynard, Miss Joan	Smith, Rt Hon J. (M'kl'ds E)
Meacher, Michael	Snape, Peter
Meadowcroft, Michael	Spearing, Nigel
Michie, William	Steel, Rt Hon David
Mikardo, Ian	Stott, Roger
Miller, Dr M. S. (E Kilbride)	Strang, Gavin
Mitchell, Austin (G't Grimsby)	Thomas, Dafydd (Merioneth)
Morris, Rt Hon A. (W'shawe)	Thorne, Stan (Preston)
Morris, Rt Hon J. (Aberavon)	Tinn, James
Nellist, David	Torney, Tom
Oakes, Rt Hon Gordon	Wainwright, R.
O'Brien, William	Wardell, Gareth (Gower)
O'Neill, Martin	Wareing, Robert
Orme, Rt Hon Stanley	Weetch, Ken
Patchett, Terry	Welsh, Michael
Pavitt, Laurie	White, James
Pendry, Tom	Wigley, Dafydd
Pike, Peter	Williams, Rt Hon A.
Powell, Raymond (Ogmore)	Winnick, David
Prescott, John	Woodall, Alec
Randall, Stuart
Redmond, M.	Tellers for the Ayes:
Rees, Rt Hon M. (Leeds S)	Mr. James Hamilton and
Richardson, Ms Jo	Mr. Don Dixon.

NOES
Adley, Robert	Bulmer, Esmond
Aitken, Jonathan	Butcher, John
Alexander, Richard	Butterfill, John
Amess, David	Carlisle, Kenneth (Lincoln)
Ancram, Michael	Carlisle, Rt Hon M. (W'ton S)
Arnold, Tom	Carttiss, Michael
Ashby, David	Chalker, Mrs Lynda
Aspinwall, Jack	Chapman, Sydney
Atkins, Rt Hon Sir H.	Chope, Christopher
Atkins, Robert (South Ribble)	Churchill, W. S.
Atkinson, David (B'm'th E)	Clark, Hon A. (Plym'th S'n)
Baker, Rt Hon K. (Mole Vall'y)	Clark, Dr Michael (Rochford)
Baker, Nicholas (N Dorset)	Clark, Sir W. (Croydon S)
Baldry, Anthony	Clarke, Rt Hon K. (Rushcliffe)
Banks, Robert (Harrogate)	Cockeram, Eric
Batiste, Spencer	Colvin, Michael
Beaumont-Dark, Anthony	Conway, Derek
Bendall, Vivian	Coombs, Simon
Benyon, William	Cope, John
Berry, Sir Anthony	Couchman, James
Best, Keith	Crouch, David
Biggs-Davison, Sir John	Dickens, Geoffrey
Blaker, Rt Hon Sir Peter	Dicks, Terry
Bonsor, Sir Nicholas	Dorrell, Stephen
Boscawen, Hon Robert	Douglas-Hamilton, Lord J.
Bowden, A. (Brighton K'to'n)	Dover, Den
Bowden, Gerald (Dulwich)	du Cann, Rt Hon Edward
Boyson, Dr Rhodes	Dunn, Robert
Braine, Sir Bernard	Durant, Tony
Brandon-Bravo, Martin	Dykes, Hugh
Bright, Graham	Edwards, Rt Hon N. (P'broke)
Brinton, Tim	Emery, Sir Peter
Brittan, Rt Hon Leon	Evennett, David
Brooke, Hon Peter	Eyre, Sir Reginald
Brown, M. (Brigg & Cl'thpes)	Fairbairn, Nicholas
Browne, John	Fallon, Michael
Bruinvels, Peter	Fookes, Miss Janet
Buchanan-Smith, Rt Hon A.	Forman, Nigel
Buck, Sir Antony	Fox, Marcus
Budgen, Nick	Franks, Cecil

Fraser, Peter (Angus East)	Moynihan, Hon C.
Freeman, Roger	Mudd, David
Gardner, Sir Edward (Fylde)	Newton, Tony
Garel-Jones, Tristan	Nicholls, Patrick
Glyn, Dr Alan	Normanton, Tom
Goodhart, Sir Philip	Norris, Steven
Goodlad, Alastair	Onslow, Cranley
Gower, Sir Raymond	Oppenheim, Philip
Gregory, Conal	Ottaway, Richard
Griffiths, E. (B'y St Edm'ds)	Page, Richard (Herts SW)
Grist, Ian	Parris, Matthew
Ground, Patrick	Patten, Christopher (Bath)
Grylls, Michael	Patten, John (Oxford)
Gummer, John Selwyn	Pawsey, James
Hanley, Jeremy	Peacock, Mrs Elizabeth
Hannam,John	Percival, Rt Hon Sir Ian
Hayes, J.	Powell, Rt Hon J. E. (S Down)
Hayhoe, Barney	Powell, William (Corby)
Hayward, Robert	Powley, John
Henderson, Barry	Prentice, Rt Hon Reg
Heseltine, Rt Hon Michael	Price, Sir David
Higgins, Rt Hon Terence L.	Proctor, K. Harvey
Hind, Kenneth	Raffan, Keith
Hogg, Hon Douglas (Gr'th'm)	Raison, Rt Hon Timothy
Holland, Sir Philip (Gedling)	Rathbone, Tim
Holt, Richard	Renton, Tim
Howard, Michael	Rhodes James, Robert
Howarth, Alan (Stratf'd-on-A)	Ridley, Rt Hon Nicholas
Howell, Rt Hon D. (G'ldford)	Ridsdale, Sir Julian
Howell, Ralph (N Norfolk)	Rifkind, Malcolm
Hunt, David (Wirral)	Rippon, Rt Hon Geoffrey
Hurd, Rt Hon Douglas	Roberts, Wyn (Conwy)
Johnson-Smith, Sir Geoffrey	Robinson, Mark (N'port W)
Key, Robert	Roe, Mrs Marion
King, Rt Hon Tom	Rossi, Sir Hugh
Lang, Ian	Rost, Peter
Latham, Michael	Rowe, Andrew
Lawler, Geoffrey	Rumbold, Mrs Angela
Lester, Jim	Ryder, Richard
Lewis, Sir Kenneth (Stamf'd)	Sainsbury, Hon Timothy
Lightbown, David	St. John-Stevas, Rt Hon N.
Lloyd, Ian (Havant)	Sayeed, Jonathan
Lloyd, Peter, (Fareham)	Shaw, Sir Michael (Scarb')
Lord, Michael	Shepherd, Colin (Hereford)
Luce, Richard	Shepherd, Richard (Aldridge)
Lyell, Nicholas	Shersby, Michael
McCrindle, Robert	Silvester, Fred
Macfarlane, Neil	Skeet, T. H. H.
MacGregor, John	Smith, Tim (Beaconsfield)
MacKay, Andrew (Berkshire)	Soames, Hon Nicholas
Maclean, David John	Speed, Keith
McNair-Wilson, P. (New F'st)	Speller, Tony
McQuarrie, Albert	Spencer, Derek
Madel, David	Spicer, Michael (S Worcs)
Major, John	Squire, Robin
Malins, Humfrey	Stanbrook, Ivor
Malone, Gerald	Stanley, John
Maples, John	Stern, Michael
Marlow, Antony	Stevens, Lewis (Nuneaton)
Marshall, Michael (Arundel)	Stevens, Martin (Fulham)
Mates, Michael	Stewart, Allan (Eastwood)
Mather, Carol	Stewart, Andrew (Sherwood)
Maude, Hon Francis	Stewart, Ian (N Hertf'dshire)
Mawhinney, Dr Brian	Stokes, John
Maxwell-Hyslop, Robin	Stradling Thomas, J.
Mayhew, Sir Patrick	Sumberg, David
Mellor, David	Taylor, Teddy (S'end E)
Merchant, Piers	Tebbit, Rt Hon Norman
Miller, Hal (B'grove)	Temple-Morris, Peter
Mills,Iain (Meriden)	Thomas, Rt Hon Peter
Miscampbell, Norman	Thompson, Donald (Calder V)
Mitchell, David (NW Hants)	Thompson, Patrick (N'ich N)
Moate, Roger	Thome, Neil (Word S)
Molyneaux, Rt Hon James	Thornton, Malcolm
Monro, Sir Hector	Thurnham, Peter
Montgomery, Fergus	Townend, John (Bridlington)
Moore, John	Tracey, Richard
Morris, M. (N'hampton, S)	Twinn, Dr Ian
Morrison, Hon C. (Devizes)	van Straubenzee, Sir W.
Morrison, Hon P. (Chester)	Vaughan, Sir Gerard

Wakeham, Rt Hon John	Wiggin, Jerry
Waldegrave, Hon William	Winterton, Mrs Ann
Walden, George	Winterton, Nicholas
Waller, Gary	Wolfson, Mark
Wardle, C. (Bexhill)	Wood, Timothy
Watson, John	Woodcock, Michael
Watts, John	Yeo, Tim
Wells, Bowen (Hertford)	Young, Sir George (Acton)
Wells, John (Maidstone)
Wheeler, John	Tellers for the Noes:
Whitfield, John	Mr. Archie Hamilton and
Whitney, Raymond	Mr. Michael Neubert.

Question accordingly negatived.