ORDERS AS TO RAILWAYS, TRAMWAYS ETC (Hansard, 20 February 1992)

§ Mr. Snape
I beg to move amendment No. 65, in page 1, line 17, at end insert— '(3) In exercising his power under this section the Secretary of State shall have no regard to the exercise of any power he may have to make any grant towards the cost of the construction or operation of the transport system proposed.'. The amendment requires the Secretary of State not to have regard to any of his grant-making responsibilities when determining an order submitted to him under the provisions of part I. It is designed to secure assurances from Ministers on that important point.
Local authorities with an interest in promoting, for example, light rail schemes broadly support part I, but there is some concern about the fact that the Secretary of State for Transport will be responsible both for authorising such schemes and for considering whether to grant-aid them. The authorities involved are keen to ensure that there is a clear distinction between the Secretary of State's two roles. Decisions on whether to make an order should relate to the need for the proposal in terms of transport policy, its implications for land use policies and other environmental effects. An order should not be rejected because the Secretary of State is not in a position to provide grant for it or because he fears that it may not meet the grant criteria that he has laid down.
I do not think that it is the role of the Department of Transport to try to second-guess—or, in the case of some schemes, to first-guess or out-guess—the Treasury. After all, as someone far more eminent than I recently said, as the best brains of the nation are collected together in Whitehall in order to say no to every public-sector scheme put to them, the Department of Transport ought to allow them to do just that, rather than saying no on their behalf for reasons other than those outlined in the amendment. Confirmation that the Secretary of State will distinguish between the two functions is, in our view, vital.
Authorities' concerns have been exacerbated by the proposal in the draft applications and objections procedure rules circulated recently by the Department of Transport that an application for an order should be accompanied by an estimate (with breakdown of items) of the cost of implementing the proposed order". Confirmation that the information on costs requested with an application will be no greater than that required under the current private Bill procedures would also be helpful.

§ Mr. McLoughlin
Again, the hon. Member for West Bromwich, East (Mr. Snape) has made his point well and, in normal circumstances, we agree with the course that he urges on us. That is why, in paragraph 21 of the consultation document "Private Bills and New Procedures", we said: There will be cases where promoters of orders (eg to authorise light rapid transit systems) will also be applying to the Secretary of State for Transport for a grant towards the costs of their scheme. The Government recognises that the dual functions of deciding whether or not to make the order and whether or not to give grant or to approve investment will need to be kept separate. The Secretary of State will decide the case for statutory authorisation and the case for financial support independently and on their own merits. I do not believe that there could be a clearer statement of the policy. As the hon. Gentleman will be aware, it goes further than grant, which his amendment mentions, 514 although grants under section 56 of the Transport Act 1968 will be important in this context. The operator might also need loan sanction of some kind, or credit approval. That, too, ought to be kept apart from the consideration of the planning merits—in its widest sense—of the order. It is one reason why, in clause 20, we remove the need for BR and LRT to obtain consent before depositing an order, as they must for a Bill. That requirement never applied to local authorities or to passenger transport executives.
That does not mean, however, that I support the amendment. It is undesirable and unnecessary. It is undesirable because it could be unfair to those adversely affected and to other objectors. If the Secretary of State receives an application for an order and the promoter has no hope of financing the work for the foreseeable future, should the Secretary of State really have no regard to that, even if he has a power to grant-aid the works? His proper course must surely be to turn the applicant away, so as not to inconvenience grossly those whose property and lives would be affected.
The hon. Gentleman, no doubt, is thinking of local authorities, and I am sure that we would all agree that we hope that they would not do such a thing. Would he think the same about private bodies? They, too, are eligible under section 56 for grants. I might add—to forestall the request for an example—that my hon. Friend the Member for Gloucestershire, West (Mr. Marland) put one before us a little while ago.
The amendment is unnecessary because, in making decisions on these orders, the Secretary of State must have regard only to the evidence presented at the inquiry, if there is one, or to the written representations, if there is not. He must not take account of what he might do about grant or loans or any other extraneous matter. If he were to do that, he could be challenged in the courts, either by the applicant or by the objectors. He must have good reasons for his decisions on orders, and they must be made public. So there is ample opportunity to check that decisions have been made for proper reasons.

§ Mr. Snape
If that is the case, why, in the draft procedure rules recently circulated by the Department, is there provision for an estimate (with breakdown of items) of the cost of implementing the proposed order"? The Minister will forgive me for being somewhat suspicious if I feel that price has at least as large a part to play in the Secretary of State's decision-making process as necessity.

§ Mr. Moate
I have been listening with interest to this exchange. I wonder whether my hon. Friend might also respond to some concern that is felt on this side of the House. I see the difficulty involved in legislating, but my hon. Friend's answer seems to suggest that a Secretary of State could build Chinese walls within himself. On the one hand, he would have to make a quasi-judicial decision; on the other hand, he could be the banker. My hon. Friend has said that there is no problem. Is he saying quite clearly that if, for financial reasons, the evidence of the inquiry were disregarded, the decision could be challenged in court? Is that the point that he is making? If so, the Chinese wall that we like to think might exist will be reinforced.

§ Mr. McLoughlin
I am grateful to my hon. Friend. I am not using the trick that I understand my noble Friend Lord 515 Whitelaw used when he was thinking about the answer to a question—the device of coughing and spluttering, and stopping the interview until he got a message. I shall have no trouble in responding in due course. The trouble about the notes that one receives from one's officials is that one cannot read them. Obviously the hon. Member for West Bromwich, East wishes to make a point, as does my hon. Friend the Member for Faversham (Mr. Moate).

§ Mr. Snape
Perhaps I should intervene again to enable the Minister to look a little more carefully at his official's note. For all I know, it may well say that the amendment is not only eminently sensible but also acceptable. If it does say so, will the Minister put us out of our misery?

§ Mr. McLoughlin
I can assure the hon. Gentleman that the note does not say that.
I hope that the hon. Gentleman appreciates the fact that we circulated the draft rules. He has rightly said that they are draft rules. Obviously representations will be made in respect of some of the points that he has raised, and in the light of them amendments may be made. But cost is an important point, as the hon. Gentleman must recognise. Surely he would not want to encourage a local authority to come forward with a scheme that might cause great inconvenience to local people if the authority had no way of funding that scheme. The blight that might be caused is also a serious concern to local residents. We have all seen how damaging blight, or the possibility of blight, can be.
Let me come now to the matter of the public inquiry. Let us imagine that the objectors question the economic viability of the scheme and successfully demonstrate that there could be no public benefit from construction, that the cost-benefit ratio was so awful that even the hon. Gentleman might not grant-aid it. I do not think that the hon. Gentleman is suggesting that money will be free-flowing; nor do I think that the hon. Member for Derby, South (Mrs. Beckett) suggests that money will be free-flowing, whatever the circumstances.
Given the other claims for finance that are likely to be faced, would it be right to amend the Bill so that the Secretary of State would have to have no regard to their evidence, even though the objectors, including environmental groups, had shown that the economic case for the scheme was so weak that grant could never be justified? I think not, as I imagine Opposition Members probably think not, because the environmental damage done by the scheme could not be justified as against the public benefit from it. Apart from that, such a provision would mean that the effect of blight would be extended until the grant application had been rejected and the scheme failed as a consequence.
Let me sum up. First, to achieve what he wants to achieve, the hon. Gentleman should have gone further. Secondly, we have every intention, in normal cases, to keep separate whether a scheme has planning merit and whether it should be grant-aided and, if so, when. Thirdly, if the Secretary of State takes into account improperly the way in which he might use his grant powers when making a decision on an order, he will be subject to judicial review. The hon. Member for Newham, South (Mr. Spearing) is not here, but I should say that I am aware of his point 516 about the last stop. Obviously the last stop is considered carefully by the Secretary of State when these points are put forward.
This amendment is far too rigid and would lead to inquiries and decision which, for the reasons that I have given, could prejudice many ordinary people and environmental groups. I hope that the Opposition will feel able to withdraw it.

§ Mr. Snape
I am a little taken aback. First, the Minister tells me how sensible my amendment is; then he berates me for having the temerity to move it in the first place. I must warn him that, after the election, he had better destroy the missive that he somewhat belatedly received. Otherwise, if this is the kind of reaction that we are to expect, we might check the handwriting and take appropriate action.
I understand only too well the financial implications of some of these schemes. All that my amendment proposes is that those implications should not be the reason for rejection of schemes within the Department. All too often the suspicion is that that is just how things are done. If there is one great thing wrong with the planning procedures, especially in respect of public works in this country, it is that all too often the money is decided first and the scheme tailored accordingly. I am merely trying to prevent the Minister, in his few remaining weeks in office, from falling any further into those bad habits.
However, having said, as we did earlier, that we are prepared to accept any crumbs that we can get—if not from the rich man's table, then from the Minister's—I beg to ask leave to withdraw the amendment.