Lords Sitting of 24 June 1968

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Lichfield.

MOTORWAY CONSTRUCTION
2.35 p.m.
LORD CHESHAM: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether construction will start this year on all 215·6 miles of motorway in England and 17·28 miles in Scotland as previously announced; if not, on what motorways will construction be delayed and for what reasons; and what is the total length of motorways affected for each country respectively.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, my right honourable friend the Minister of Transport expects to award contracts during the current year for the construction of about 166 miles of motorway. My right honourable friend the Secretary of State for Scotland expects to award contracts for the construction of 17·28 miles. The start of construction of 49·35 miles on M.5, M.6 and M.56 will be delayed by periods of up to three months because of objections to side road proposals, design difficulties and amendments, and difficulties over land acquisition. There is no expected delay in Scotland.
LORD CHESHAM: My Lords, is the noble Lord aware that those with Scottish sympathies, including himself, must be glad of the last part of his Answer? Having regard to the fact that the noble Lord's right honourable friend thought in January that 215 miles would be started, may I ask why it has now sunk to 166? And if procedural difficulties such as he mentioned are the cause (I did not quite get down which motorways were
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referred to and the mileages, but I think I am right in saying that a substantial amount of the mileage he mentioned as being now delayed has been in the programme since the beginning; that is, over ten years) could the noble Lord say why the difficulties arise now?
LORD HUGHES: My Lords, I gave the reasons why the delays were taking place: because of objections to side road proposals, design difficulties and amendments, and difficulties over land acquisition. The procedure which has been followed in these matters is the same as has been carried out over a period of years, including the period during which the noble Lord was a Minister in the Ministry of Transport. The only major change which has taken place in procedures recently has been the setting up of the six regional road construction units, but these have been really too recent for us to make any comment as to their effect. I would point out, also, that I said that the delays would be of periods of up to three months. In fact in regard to the lengths which are delayed, in three cases we expect a start to take place during February, 1969, and in the remaining case in April. 1969. Therefore, on average, the delay is really less than the three months that I have mentioned.
LORD CHESHAM: My Lords, is the noble Lord aware that he cannot quite brush it off like that? Is he aware that what he has announced amounts to delays in one-third of the programme for this year? May I say also that from experience I am aware of the processes that he mentioned, and I know they have not changed, but the difference is when they are put into operation. Can the noble Lord say why, when work is due to start in 1968, these processes are not apparently started until 1968?—because that seems to be ridiculous.
LORD HUGHES: My Lords, the proposals which were originally put forward included this 50-odd miles on which work was due to start in the last months of 1968; so a delay of even a few weeks in one case takes it into 1969. It is as simple as that. If, therefore, we divide a third of the programme by a fraction of the year, instead of being a third put off it works out at something between one-eighteenth and one-twenty-fourth.
LORD CHESHAM: My Lords, is the noble Lord then aware that, the 39 miles having been started this year in the latter half of June, his right honourable friend has to get a move on to start his 166, to say nothing of his 215?
LORD HUGHES: My Lords, I am quite satisfied that if the noble Lord cares to put another Question at the end of the year he will receive an Answer which is more surprising still to him, having regard to the purpose for which he has put the Question.
LORD CHESHAM: My Lords, is the noble Lord aware—
SEVERAL NOBLE LORDS: Next question!
LORD CHESHAM: My Lords, is the noble Lord aware that I do not expect the answer that he has just given me?

THE GEORGE V MEMORIAL AND HENRY MOORE SCULPTURE
2.43 p.m.
LORD AMULREE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government under whose authority and for what reasons people are not allowed on the grass around the George V Memorial and the Henry Moore statue.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM): My Lords, my right honourable friend is responsible for the control of these areas. The "Keep off the grass" notices have been put around the Henry Moore sculpture to prevent the area becoming unsightly. During the winter months, the grass became badly churned up by people approaching close to the sculpture, and the area had to be re-turfed in the spring.
The noble Lord may have observed that the "Keep off the grass" notices around the King George V statue have recently been removed. They will not be replaced unless it is found that the grass becomes badly worn and spoils the appearance of the area.
LORD AMULREE: My Lords, I should like to thank the noble Lord for his reply. I have indeed seen what he said in regard to the notices around the King George V statue. About the Henry Moore statue, does not the noble Lord think, and do not Her Majesty's Government think, that it will probably be appreciated as culture whether it is modern or antique? It should be possible to approach close to the sculpture to see the details of the work closely.
LORD WINTERBOTTOM: My Lords, as someone who has approached close to the sculpture for that purpose, I agree completely with the noble Lord. There is however a problem here. There is an underground garage underneath it; drainage is not good, and there is a special tendency for the grass to be churned up if the weather is damp.
LORD LEATHERLAND: My Lords, would my noble friend agree that, having regard to the nature of some of the Henry Moore statues, the farther the people are kept away from them the better it will be?
LORD WINTERBOTTOM: My Lords, I will not argue with the noble Lord on questions of taste.

BUSINESS
LORD BESWICK: My Lords, my noble friend Lord Kennet will be making a Statement on the Sainsbury Report at a convenient moment after 3.30 p.m. It is also hoped that my noble friend the Leader of the House will, subject to progress of the "usual channel" discussions, be making a Statement on the procedure of the Prices and Incomes Bill.
My Lords, dinner will be available this evening between 7 and 8.30 p.m.

PRIVILEGE: THE CO-OPERATIVE INSURANCE SOCIETY
2.45 p.m.
LORD DRUMALBYN: My Lords, I beg to move That the matter referred to on page 21 of The Tunes Business News of June 21, under the heading "Chairman goes in. Co-op Row," be referred to the Committee for Privileges. My Lords, acting on the instructions of his board, so he assured me, the General Manager and

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Secretary of the Co-operative Insurance Society Limited sent to Members of this House a letter accompanied by a memorandum dated June 14, 1968, relating to provisions in the Friendly and Industrial and Provident Societies Bill now before this House. The letter expressed the view that the Bill contains provisions which are seriously adverse to the interests of the policy holders of the Co-operative Insurance Society and to the business of the Society. The letter also stated that there are over 15 million Co-operative Insurance Society policies in force, and the memorandum stated that the assets of the Society now amount to £450 million and its annual income to over £110 million.
The Times, on Friday, June 21, had in its "Business News" section, on page 21, an article by Mr. Maurice Corina which contained the following paragraph:
"Departure of the chairman and three colleagues—they are all full-time C.W.S. directors—follows the circulation to all members of the House of Lords of a memorandum setting out the insurance board's objections to part of the Industrial and Provident Societies Bill now going through Parliament."
This is the matter which the Motion proposes should be referred to the Committee for Privileges.
It seems to me that the plain implication of this paragraph is that the Chairman and three of the board of the Cooperative Insurance Society have been dismissed in consequence of, and as a punishment for, their having made representations to Members of this House on a matter which is clearly of public and not merely private interest. My purpose in moving to refer the matter to the Committee for Privileges is, first, for it to be established whether that implication is true, and, secondly, for it to he decided whether, if it is true, the action of the C.W.S. directors in dismissing the Co-operative Insurance Society directors constituted a breach of Privilege of this House.
Both Houses of Parliament have always been jealous to safeguard the course of legislation from any outside interference, and they have been jealous of the right of access to Members of either House without let or hindrance. I need hardly say that it is the matter referred to in the article, and not the article itself, that
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I am suggesting should be referred to the Committee. My Lords, I beg to move.
Moved, That the matter referred to on page 21 of The Times Business News of June 21, under the heading "Chairman goes in Co-op Row," be referred to the Committee for Privileges.—(Lord Drumalbyn.)
2.48 p.m.
LORD PEDDIE: My Lords, at the Second Reading of the Friendly and Industrial and Provident Societies Bill I paid a tribute to the noble Lord, Lord Drumalbyn, and indicated a viewpoint which I am sure is shared by every Member of this House, complimenting him upon his sense of judgment. I also believe that every Member of the House will share with him the desire to ensure that all the Privileges of this House are maintained. But I am quite certain that when the true facts are disclosed to the noble Lord, Lord Drumalbyn, and to other Members of the House, they will realise that there is no justification at all for referring this matter to the Committee for Privileges. The whole of the case that has been submitted by the noble Lord, Lord Drumalbyn, rests upon the article in The Times of June 21, written by Maurice Corina, in which he states:
"Departure of the chairman and three colleagues—they are all full-time C.W.S. directors—follows the circulation to all members of the House of Lords of a memorandum setting out the insurance board's objections to part of the Industrial and Provident Societies Bill now going through Parliament".
I can make it absolutely clear to this House that there was no relationship at all between the departure of these three directors from the board of the C.I.S. and the fact that the C.I.S. board circulated a memorandum to Members of this House. If I am able to make that clear, as I am sure I can, then obviously there will be no justification for the point of view of the noble Lord, Lord Drumalbyn, and no case for submission to the Committee for Privileges.
I point out—and I have checked these facts with the C.W.S. board this morning—that the item on the agenda of the C.W.S. board meeting on June 19 read as follows:
"Representation of the C.W.S. board on the board of the C.I.S."
The board papers relating to the determination of the new composition of the

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board of the C.I.S. went out on June 13. The date heading the memorandum which was sent to Members of this House was June 14. It was received by Members of this House on June 17. Therefore, seeing that the board papers went out on June 13 there was no relationship at all between the communication to the Lords and the decision of the C.W.S.
One reason for the board meeting of June 19 to deal with the question of the composition of the board of the C.I.S. was that there was a vacancy on the board of the C.I.S. due to a normal age retirement. Because of that the whole matter of the composition of the board of the C.I.S. was under consideration. The board of the C.I.S. consists of eight members nominated by the Co-operative Wholesale Society and two by the Scottish Co-operative Wholesale Society, and it was decided that half of the eight should be part-time members of the C.W.S. board and half should be full-time members. The decision was made on June 19 in accordance with that, and such decision would have been made, quite apart from any circulation to this House. There was then a new election of the board of the C.I.S. on Wednesday, June 19. The decision to have a new election was occasioned, as I have just said, by the fact that there had been a retirement due to age. It was decided that three full-time members would make way for part-time members of the C.W.S.—there are 30 part-time members of the Co-operative Wholesale Society board. Therefore, four full-time directors out of the original eight still remain on the C.I.S. board. I would emphasise that this was a properly constituted meeting of the C.W.S. board, armed with the powers to vary the representation on the board of the C.I.S.
Another important point which has a considerable bearing upon this is the fact that the C.I.S. board itself—or at least the C.W.S. nominees on the C.I.S. board—could all have determined for themselves who was to withdraw from the C.I.S. board. It was agreed that half of the eight should he drawn from the part-time members. The eight members of the C.I.S. board could have decided for themselves which four—or three, because one had retired—should be withdrawn. They themselves decided that the C.W.S.
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board should make the decision and they preferred that all members of the C.I.S. board should go for determination. The decision was made; the three members whose names are known to this House did not secure the adequate vote and the remaining number remained on the C.I.S. board. Therefore, when teat vote was taken, three, including the chairman, were replaced and the others re-elected. Therefore the C.W.S. board—and again I would emphasise this—as such lid not specifically make the decision to withdraw the name of the chairman of the C.I.S. That is a very important point.
If the members of the Co-operative Insurance Society board had so decided he could have remained as a member of that board. Therefore I repeat, because this is the whole kernel of what we are discussing, that the change in the representation on the C.I.S. board was not occasioned by the action of the C.I.S. in communicating with the Members of the House of Lords, and the dates which I have given (and which I have confirmed to-day) indicate quite clearly that there could be no relationship between the two. I have also seen a copy of the Minute of the C.W.S. board meeting for June 19, and it states that:
"From the C.I.S. point of view the failure to acquaint the C.W.S. board with II e proposals "—
that was, their proposals of opposition to this Bill—
"was an error of omission for which apologies were offered by the C1.S. board."
I take this opportunity of pointing out that the report in The Times was grossly inaccurate where it states that the battle for control had led to the withdrawal of the chairman of the C.I.S., because. I repeat, if the directors of the C.I.S. I ad so desired he could have remained as a director and chairman of the C.I.S.
Those are the facts of the case, and once again I underline that in terns of dates it would have been impossible to indicate any relationship between the dispatch of a communication to this House and the decision of the C.W.S. board to change its representation on the board of the C.I.S. Therefore, seeing that that is the basis of the argument in support of the suggestion that it should go to the Committee for Privileges, I would suggest to your Lordships that there is no justification whatsoever for

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that step to be taken. This, unfortunately, stems from the prosecution of a quite innocuous but extremely valuable Bill. For three years there has been discussion among all sections of the Co-operative movement and the friendly society movement in support of this Bill. Representatives of all the bodies have been consulted and the Bill has come along, and it is indeed regrettable that at this stage, due entirely to Press comment that misrepresented the situation, this trouble should have been created. The board meeting upon which the decisions were to be made concerning the composition of the C.I.S. would have been held in any case, regardless of any Bill and regardless of any communication to your Lordships' House. In the light of the facts which I have indicated to your Lordships I am confident that the noble Lord, Lord Drumalbyn, conscious as I am of his sense of responsibility, will withdraw the Motion that he put before this House.
VISCOUNT DILHORNE: My Lords, the noble Lord has given the House an interesting part of the history, but there is one matter I wish he would clear up for me. I listened with the greatest attention to his history of the dates. He said that the decision to change the membership of the C.I.S. board was reached before the circular was sent out; he referred to the agenda of the board meeting as being one of the first things. Then the circular was sent out. It was only after that, if I understood the noble Lord correctly, that the decision was made to replace these three directors. I think that appears from what he has said. The one thing he did not say, while putting very much weight on the dates of these various meetings, was this. If it be the case, as I think emerges from his statement, that these three men were got rid of at the meeting which took place after the circular was sent out, can the noble Lord give the House an assurance that the sending out of the circular had in fact absolutely nothing to do with their being dismissed and that the sending out of the circular was not discussed at the meeting at which it was decided to get rid of these three directors?
LORD PEDDIE: My Lords, I obviously cannot give an assurance that the dis-
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patch of the circular was not discussed at the board meeting on June 19, because I was not present at that board meeting. I was at one time a director of the C.W.S. and the C.I.S., but I am not now. Therefore, I cannot give an assurance that that matter was not discussed. It is more than likely that it would be mentioned, but that I do not know. All I am saying, and I repeat, is that in regard to the board meeting of June 19, which was a regular normal meeting of the board of the C.W.S., the papers for that board meeting went out on June 13, and on those papers there was reference to the fact that representation on the C.I.S. would be under consideration. The date of the circular sent to your Lordships was June 14, which was a Friday, and it is more than likely that it would not be in your hands until June 17. Therefore obviously there could be no possible connection between the circular dispatched to this House and the decision of the board made on June 19, because it was on June 13, long before your Lordships received the circular, that the decision was made to place this on the agenda of the C.W.S. board meeting.
VISCOUNT DILHORNE: My Lords, the noble Lord really is not dealing with the point I am putting. While accepting that a decision was made that there should be changes on the board of the C.I.S. before that circular was sent out, the question which I think my noble friend Lord Drumalbyn raised and which I think arises from what the noble Lord has said is this. Was the decision to remove these three directors made in consequence of the circular being sent out? One can accept that there was a decision to make some changes in the board from what the noble Lord has said, but what he has not said is whether the decision to remove these three directors was not in consequence of the circular being sent out.
LORD PEDDIE: My Lords, I have no need to repeat what I have said, but I will repeat what I said originally: that is, that there was a normal vacancy on the board of the C.I.S. due to a retirement, which necessitated reconsideration of the representation of the C.W.S. on the board of the C.I.S. I repeat also that that representation from the C.W.S. board to the C.I.S. is not on any time

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basis; it can be varied at any time, and it is within the compass of the responsibility of the C.W.S. board to vary it at any time. Therefore, it seems to me to be quite clear that there was no relationship between the circular sent out and the decision of the C.W.S. board.
I repeat again the essential points. The first point is that the decision to consider the question of representation was occasioned by the fact that there was a vacancy on the C.I.S. board of the C.W.S. due to retirement. That brought the matter up. The second point the noble Viscount mentioned was as to whether there was an endeavour to remove the chairman. I would again repeat what I said in my opening statement, that is, that the decision to change the C.I.S. chairman was not occasioned by the C.W.S. board specifically. Because of the need to place four part-time members, the opportunity was given to the C.I.S. board to indicate the names of the four C.I.S. representatives to be removed to make places for part-time members. They preferred that it went to the C.W.S. board for decision, and in consequence of the voting on the C.W.S. the chairman was not elected. But there was no specific intention on the part of the C.W.S. board to remove the chairman. I hope that clears up the point.
VISCOUNT DILHORNE: I am sorry to disappoint the noble Lord, but it does not.
LORD MITCHISON: My Lords, perhaps I can help the noble and learned Viscount. I served for a great many years on the Committee of Privileges in another place. I am really puzzled as to why whatever happened in this case is said to be a breach of privilege. What exactly is the case about it? Your Lordships are well aware that in another place the matter comes up in the first instance in the House, and Mr. Speaker is called upon to decide whether there is a prima facie case such as to give the matter priority in the Order of Business for the day, and Mr. Speaker does or does not so decide. If he does, the matter then goes to the Committee of Privileges after the appropriate Motion, which can be contested and sometimes is, and they decide. While I served on that Committee I think the tendency the whole time was to reduce the number of cases
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on which any action should be taken, and that tendency has now spread, I notice, to the preliminary discussions on questions of privilege in another place. The reason was because another place felt that it was making itself a little foolish in trying to deal with rather trivial matters as cases of privilege and that its essential business was to preserve the status and reputation of the House itself and the Members of the House.
I remember one particular case—perhaps "No names, no pack drill" is the better course—where there had been an exceedingly bitter and ungrounded attack upon a particular Member of the House. There was no doubt that there had been a technical breach of privilege. But it was also the case that if we had done anything about it it would not have had any effect whatever but to make another place look rather foolish. I forget the exact form in which we reported, but we certainly did not let the matter proceed any further than it had.
In all those cases, there was a question whether there had been some attack on the reputation and privileges in that sense of the House—whether there had been a "contempt" is the phrase used in Erskine May. I do not think that the noble Lord, Lord Drumalbyn, would suggest that the House was in any way attacked here, that it was a matter which on any view of this could lower the reputation of the House as such or of any Member of it. All I can say is that I read the article and it never even occurred to me that it was a breach of privilege; and I was really puzzled the other day when I heard the noble Lord give notice that he was going to raise this matter. If it is not a breach of privilege what is it exactly? If we cannot sit here and decide, nor can the Committee for Privileges. Nor should they, with respect, try to Decide whether three gentlemen on the board of a Co-operative organisation or any other board have been rightly or wrongly, dismissed. If we try to do that kind of thing, we shall indeed bring the reputation of the House into disrespect.
If it is a question of wrongful dismissal it may be a case for the courts I do not know; but there is nothing that concerns this House. Then it is said that in some way or another the practice of making representations, as they are often made nowadays to Members of the House,

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must be protected. I wonder why? I wonder whether that is really a good thing? Particularly during my service in another place, like every other Member of the House I had some remarkably silly representations made to me, and I do not see why they needed any special or particular protection. So if they find any breach of privilege here, or even the smell of it, if I may so put it, and also feel that some ingenious person can spell out of it privilege in this case, it is certainly not one which ought to receive the semi-penal treatment of being referred to the Committee for Privileges.
There was a period a long time ago when the Committee for Privileges in this House had greater powers than the Committee of Privileges in another place. Their powers of punishment were rather different, and they were stoutly maintained to be a court of record. It comes, I think, from the period when a certain confusion still prevailed between this House sitting as a part of the legislative machinery and sitting in its judicial capacity as the highest court of law. That confusion has by now, I should have thought, been eliminated, and quite rightly so. The matter is clearer than it used to be. But if this kind of thing is taken as seriously as this Motion would imply, I suggest that we run the risk of further confusion as to what the functions of the House are in a matter of this kind.
I hope I have not spoken offensively to anyone; I have tried hard not to. But I hope that in the interests of the House itself and every Member of it, this matter will not be pushed any further. I fully appreciate that Lord Drumalbyn raised this Motion feeling that it was a matter he ought to raise; but I wish he would consider, if he does not mind my putting it that way, whether it is a good thing to take it any further.
3.13 p.m.
LORD TREFGARNE: My Lords, before the noble Lord, Lord Drumalbyn, replies to the points made by the noble Lord, Lord Mitchison, I wonder whether I could revert to what the noble Lord, Lord Peddie, said a short time ago when, to my way of thinking, he was unable to give the positive assurances that the
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noble and learned Viscount, Lord Dilhorne, asked for. I understand that he is no longer a director of either the C.W.S. or the C.I.S., but can he tell us in that case where he got his quite full information from? I further understand, of course, that this might be what he would consider privileged information and that he cannot reveal its source, but it would be interesting.
LORD PEDDIE: My Lords, I indicated to the House where I got the information from. It was from the C.W.S. this morning. I thought I made that very clear. Obviously I needed from the C.W.S. positive information concerning dates, because dates are extremely important. Once again the point has been put to me how I reply to the question whether the circular had any connection with the dismissal. I have already indicated on three occasions that obviously it could have had no direct connection at all, because dates alone confirm that. They confirm the fact that the question of the representation on the board of the C.I.S. from the C.W.S. was a decision which was taken before the date of the dispatch of the circular to the Members of the House. I cannot give any more information than that; but I am quite sure that the information that I have given to the House, which is confirmed by the C.W.S. and, indeed, the C.I.S., makes quite clear that there is no justification at all for this reference to the Committee for Privileges; and the decisions that were taken, however distasteful they may be to certain persons, were quite in accord with the normal conduct of affairs between the C.I.S. and the C.W.S. They were no more than that. Therefore I would reiterate what I said before, that, quite frankly, there is no justification at all for reference to the Committee for Privileges.
LORD DRUMALBYN: My Lords, before the noble Lord sits down, can he confirm what he has told us today: that a Press release was made by the C.I.S. on the 6th of the month in much the same terms as the communications that were sent to Members?
THE PAYMASTER GENERAL (LORD SHACKLETON): My Lords, I must point out that the noble Lord has sat

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down once. He has now sat down a second time. It may be for the convenience of the House if he answers that question, but it is a little irregular.
LORD PEDDIE: My Lords, I do not know. I am not cognisant of any Press release. I believe that a number of Press releases are sent out by the C.I.S. I have no knowledge of the particular one to which the noble Lord is referring, so I can make no comment on it. I do not think that whatever was done on June 6 has any bearing on the matter that we are discussing now.
3.15 p.m.
LORD SHACKLETON: My Lords, I think in my capacity as Leader of the House I ought now to give such guidance as appears to be appropriate, and I must say that I do not find it easy to give this guidance. I am quite sure that in considering this matter your Lordships will not allow any question of partisanship to affect your views, and clearly it is not for me to give firm guidance. In another place the Speaker would give a ruling whether there is a prima facie case within certain limitations, but there ultimately the matter rests in the hands of the House, as it does here.
My first reaction when I heard of the proposal was instinctively to get the matter away from the Floor of the House and get it into a Committee, where they could make as much of a meal of it as they wanted without all of us having to partake of the same repast. None the less, a decision to send it to the Committee for Privileges is quite an important one. That Committee includes busy people, and there is no precedent for a matter of this kind going to the Committee for Privileges. That, however, is no bar to our deciding to send it there. Indeed, we are counselled in the Companion, at page 153, that the Committee for Privileges
"would hear and make recommendations upon any matter of privilege"
referred to it by the House; and to that extent the Committee would be the appropriate body.
In order to keep the record straight, may I say that I am rather conscious in these days that when we make speeches in your Lordships' House we may be
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making history and that others will turn to us for guidance as to why we did particular things—assuming that our successors are there to read them. Prior to 1956, when the Committee for Privileges was reconstituted, references were always about Peerage matters. I know that the noble Lord, Lord Drumalbyn, was interested in a reference in 1905. In the 19th century these matters were usually dealt with in debate, or were referred to an ad hoc committee. But I think we are agreed that if we proceed with this further, the Committee for Privileges would be appropriate.
In giving my views on this subject I am most conscious that I am doing so without much preparation, and I. shall not take it in any way amiss if noble Lords decide that the guidance I am giving, or the views I am expressing, are not correct. I can only say that they are delivered with the maximum amount of impartiality. The first question we have to decide is whether the approach which was made to your Lordships' House was an appropriate approach and that those concerned were not seeking to put some undue influence on your Lordships' House. That could in itself constitute a possible contempt or breach of privilege. But I am quite sum that in this sense it was, from the standpoint of your Lordships' House, in no way an improper approach.
Secondly, if the matter were now to be referred to the Committee for Privileges the issue would have to be not only whether the board of the C.W.S. were, by their action, prejudicing improperly the general right by members of the public of approaching your Lordships' House on public matters, the Committee would have to consider, first of all, whether the dismissals, or their resignation, were, in fact, occasioned by their approach to your Lordships' House. Here we have had evidence given, I am quite sure with full regard to the seriousness of what the noble Lord was saying and the importance of the accuracy of what he was saying, that there was no connection between the two. I know that the noble and learned Viscount, Lord Dilhorne, was not entirely happy about this matter and he pressed my noble friend rather hard on it.
I must say, I should be very reluctant not to accept the statement of a noble

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Lord, made, I am sure, with full seriousness on a matter of this kind; and here I think it would be proper to consider whether, if an approach had not been made, they might not have taken the same action. Here I think we have to consider the particular relationship between these individuals and the C.W.S., and on this point my noble friend, Lord Mitchison, was of course entirely right; if there was some element of improper dismissal there are certain rights in accordance with their contract of employment, if they have a contract of employment—if they do not have a written contract of employment they may have certain rights at law in the matter.
It is for consideration indeed whether the directors in question were debarred from making any representation to this House. If we look at the position of employees (if they are employees) in any firm—and it is rather an obscure position, because directors have statutory responsibilities as well as purely contractual responsibilities—we can all visualise circumstances in which the director of a subordinate company clearly could not be permitted to go on being a director of that company if he was pursuing a policy which was wholly at variance with the policy of the principal board, whether or not he made representations to the House of Lords. I offer these considerations because they are ones that have occurred to me. One always applies one's own experience in relation to one's own business activities.
My Lords, before I come to the final question of privilege, let me say that whatever happens, if we decide to send this matter to the Committee for Privileges I see no reason why the Bill should not, in fact, proceed. It could, indeed, complicate our consideration of the matter and influence our thinking in a way in which it should not, if we thought that the Bill might in some way be endangered by this; and my advice is that there is no reason why it should be influenced in this matter.
The point I want to make is that, however jealous either House may be of the rights of access to that House, I can find no precedent where an attempt by one individual to influence another individual as to the nature or content of his communication with a Member of Parliament has been treated as a breach of
1116
privilege or as a contempt of a House. Here again I think my noble friend Lord Mitchison was absolutely right about the danger of a confusion between what might be called "tampering with witnesses" coming before your Lordships' House and action in relation to an approach to your Lordships' House. I appreciate that this raises complicated issues, and it may be that some of your Lordships feel that this is a matter that should go to the Committee for Privileges. Indeed, that was my first thought. However, on further reflection and having studied the precedents, I cannot personally believe, although your Lordships no doubt will decide, that this is such a proper case.
My view is primarily based on common sense in this matter. Clearly it would be impossible for us to seek at all times to protect people from the consequences, wise or unwise, of approaching either House of Parliament. Another place has studiously avoided giving such a ruling on cases that have been brought before it. Therefore my general view is this. My noble friend Lord Peddie has first of all said, I think with all the seriousness that he can command—and no doubt if he has had any further thought he would express it—that the decision that was taken to cause the resignation of these directors was not associated with their approach to your Lordships' House; and he has sought to show that in relation to the dates. I do not think it is easy for us to go deeply into this question of dates, but he has given that assurance.
But I put the more serious point: that even if it had been in some ways connected, by virtue of their particular relationship with their colleagues and because of matters depending on their contract of agreement, it would, even so, not be a matter on which either House has previously ruled that a contempt had taken place. Therefore, although I think the noble Lord, Lord Drumalbyn, was entirely justified in bringing this matter forward—I thought he did this absolutely rightly—my view, and I am very open to have a contrary view put by any of your Lordships, is that we ought not to send this matter to the Committee for Privileges.
VISCOUNT DILHORNE: My Lords, may I just, with the leave of the House,

1117
say two things, as the noble Lord referred to my interruption of the noble Lord, Lord Peddie? I do not doubt the accuracy of the statements made by the noble Lord, Lord Peddie, on information he has obtained. What I felt was that his dates and his facts did not warrant the conclusion that he sought to draw from them. If it be the fact that the dismissal of these men was in part due to, or influenced by, this circular, may I say I entirely agree with the noble Lord, the Leader of the House, that that really is not a matter which should be referred to the Committee for Privileges.
EARL JELLICOE: My Lords, I, like the other Members of your Lordships' House, am grateful for the care which the noble Lord the Leader of the House has so clearly given to this difficult and complicated matter. I would thank him for that, and I should also wish to say that, like him, I have no desire to approach this matter in any way in a partisan spirit, nor have I any desire on this occasion to make history in any way. I think there is rather a difficult balance here. On the one hand we clearly must be jealous, but not over squeamish, about our privileges. On the other hand, the privilege of the right of free access by individuals and organisations to all Members of your Lordships' House is undoubtedly an extremely important privilege. I have listened very carefully to what the noble Lord, Lord Peddie, said, and I am sure we should all like to echo the respect which has already been paid him, and I fully accept his statement.
I am not clear whether I am entirely with him on the conclusions he drew from that statement, but it is extraordinarily difficult to decide on a question and answer basis across the Floor of your Lordships' House. My first feeling was that if there was any real doubt in your Lordships' mind whether there had been a breach of privilege here, the matter having been raised, and raised so impartially and ably by my noble friend, it would be better to get that doubt cleared away, and that the best way of doing that was by reference of this matter to the Committee for Privileges.
On the other hand, I feel that the matter to which the noble Lord the Leader of the House has drawn our attention, namely, that there is no precedent at all in this case, should weigh with
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your Lordships. Another matter which should weigh with your Lordships and with my noble friend is that one senses that some of your Lordships would not wish this reference to be made. My inclination on a matter of this sort is very much on the lines that, if reference is to be made, it should be dole virtually unanimously. I do not wish to prejudge my noble friend's decision, which is entirely his. I agree with what has been said about his justification for raising this matter in your Lordships' House. I should be very glad to hear his own view as to whether it should be proceeded with.
LORD BYERS: My Lords, I should like to endorse what the noble Earl, Lord Jellicoe, has said. I think the noble Lord, Lord Drumalbyn, was right to raise this matter, and that the fact that it has been raised will constitute sufficient warning, should a warning be required. But one can get into great difficulties by trying too clearly to define a field of privilege as wide as this. I hope that the noble Lord will withdraw his Motion.
LORD DRUMALBYN: My Lords, I am extremely grateful to all noble Lords who have spoken in this debate. I should like to say a word or two about the remarks of the noble Lord, Lord Mitchison, because I was perhaps in a little less agreement with what he said than with the other speeches. It seemed to me that when the question of contempt arises, it is not just a question of lowering reputation. Privilege, we are always told, attaches in order to enable us to perform our functions. I was concerned will h the interference with functions. It seemed to me that, even though there never had been a precedent for this kind of thing in this House, it might be as well for this matter to be studied. It is true that the precedents in the Commons are against a reference of a matter of this kind, but in each case the circumstances are slightly different. I fully agree with the noble Lord, Lord Shackleton, that even if this matter were referred, the Bill should proceed; I do not think there would be any question about that.
I am quite certain that the noble Lord, Lord Peddle, is fully convinced that what he said to us is the whole truth and nothing but the truth. But he seemed to rely a little too much on dates alone and

1119
it may be that he himself is not yet aware of all the factors involved. But, having said that, and after weighing the matter carefully and balancing the factors on both sides, I readily assent to the advice which has been given to me by noble Lords generally. I agree that if privileges of the House are to be defended a matter of this kind should be referred to the Committee for Privileges by the virtually unanimous vote of the House; and, as the noble Earl, Lord Jellicoe, has said, it looks as if there are some noble Lords who would dissent from the suggestion that this particular matter should be referred to the Committee for Privileges.
SEVERAL NOBLE LORDS: Hear, hear!
LORD DRUMALBYN: I agree with what the noble Lord, Lord Byers has said. I am grateful to noble Lords for having said that I did right to raise this matter. I could see no other alternative at the time. I think the mere fact that it has been debated will prove a useful warning in the future. I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.

CHESHIRE COUNTY COUNCIL BILL
Read 2a, and committed to the Committee on Unopposed Bills.

SEWERAGE (SCOTLAND) BILL
3.37 p.m.
LORD BESWICK: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Sewerage (Scotland) Bill, has consented to place Her interest, so far as it is concerned on behalf of the Crown, at the disposal of Parliament for the purposes of the Bill.
LORD HUGHES: My Lords, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3a— (Lord Hughes.)
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

CUSTOMS DUTIES (DUMPING AND SUBSIDIES) AMENDMENT BILL
THE MINISTER OF STATE, BOARD OF TRADE (LORD BROWN): My Lords, I beg to move that this Bill be now read a third time. I commend it to the House as a limited but useful measure which will extend our power, to take action on behalf of British industry against materially injurious dumping or subsidisation in ways which are in conformity with the International Anti-Dumping Code that was agreed in the Kennedy Round. The Anti-Dumping Code comes into operation on July 1. This House should be congratulated on the speed and efficiency with which it has dealt with this Bill.
Moved, That the Bill be now read 3a.— (Lord Brown.)
LORD DRUMALBYN: My Lords, I should like to join in commending this Bill to the House, which we are all grateful to the Government for having introduced.
THE DUKE OF ATHOLL: My Lords, may I say that I hope that one of the first things for which the Bill will be used will be in relation to the chipboard industry.
On Question, Bill read 3a, and passed.

TRANSPORT BILL
3.39 p.m.
LORD HUGHES: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Hughes.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD DOUGLAS OF BARLOCH in the Chair.]
Clause [Establishment and general duty of Freight Corporation]:
LORD WADE LORD WADE moved Amendment No. 1:
Page 1, line 10, leave out ("Corporation") and insert ("Council").

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The noble Lord said: I should at the outset explain that all the Liberal Amendments in Part I, down to and including the Amendment to Clause 8, have the same objective; namely, to alter the constitution and functions of the proposed National Freight Corporation. It may be convenient to the Committee to consider these Amendments together, as they all relate to the integration of transport services. We shall then have a fairly wide-ranging debate on the Amendments to Part I. It may also be convenient, if your Lordships agree, to consider at the same time the Amendments in the name of the noble Lord, Lord Nugent of Guildford.
LORD NUGENT OF GUILDFORD: It would certainly suit the convenience of noble Lords on these Benches to have a general debate on those lines, if this suits the convenience of noble Lords on the Government Benches; then we can conclude the discussion as one debate.
LORD HUGHES: That seems to me to be a very eminently suitable suggestion, and I readily concur.
LORD NUGENT OF GUILDFORD: I should point out that the two Amendments in the name of my noble friend Lord Merrivale are on a different point.
LORD WADE: I am much obliged. I think at the outset I should make it clear that the Liberal Amendments are intended to be constructive—I have no doubt that the noble Lord, Lord Nugent of Guildford, will have the same comment about his Amendments—and they are entirely within the proper and traditional functions of a revising Chamber. If any of these Amendments are carried, they will be sent to another place for their consideration in accordance with constitutional practice.
It so happens that I took part in the debate last week on the Rhodesia Order, and I was one of those who strongly objected to the rejection of that Order. But in the course of speaking on that debate I mentioned that this week I might be moving or supporting Amendments to the Transport Bill, and that, so far as the constitutional issue was concerned, I saw a clear distinction. It is our duty to examine this massive Bill very carefully and to suggest Amendments to it. My only dilemma was that
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of deciding whether to table hundreds of Amendments, which we could quite well have clone, or to limit our amending to a number of major issues. We chose the latter course, for which I hope the Government will be duly thankful. The Liberal Amendments are certainly not wrecking Amendments. In so far as the object of the Bill is to achieve a more efficient transport service, we fully support that aim. But we have grave doubts as to some aspects of this Bill.
On the Second Reading of this Bill, on June 11, at column 31 of the OFFICIAL REPORT, my noble friend Lord Henley had this comment to make on Part I:
"Part I of the Bill is designed to establish a National Freight Corporation to take over the functions of the Transport Holding Company, which has, on the whole, functioned well during the years of its existence The provisions in this Part of the Bill which enable the Corporation to extend the activities of the former Transport Holding Company in the field of road haulage, and the intention to set up a subsidiary company to take over the controlling interest in the railways—that is, the freightliner service—we regard as wasteful and quite needless in relation to a properly integrated transport system. We shall try to amend these proposals in Committee to restrict the Corporation's activities to what we regard as its proper function".
The purpose of these Amendments is to do precisely that.
I do not propose to go into any great detail at the outset of this important and, I hope, very valuable debate, but I shall indicate in broad outline the object of these Amendments. If there are any imperfections in the drafting of the Amendments which appear in the names of my noble friends and myself, I have no doubt that noble Lords speaking from the Government Benches will point them out. I should be very surprised if there were no defects in drafting, since it is extremely difficult to draft Amendments to a massive Bill such as this, but I hope that the debate will turn mainly on the principles involved and on the main features of the Amendments to Part I.
I shall summarise the intention of the Liberal group of Amendments tinder three headings. First, instead of having a great new Corporation—that is the National Freight Corporation—imposed on our transport system, we suggest that there should be a Transport Freight Council which would act as a holding company. There is no great significance

1123
in the difference in wording between "Council" and "Corporation", except that it emphasises the distinction between what we think proper and what has been suggested by the Government in this Bill. The functions of the Council are set out in the substitute words shown in our Amendment No. 7A:
"Council shall acquire by transfer the assets of the Transport Holding Company including any additional assets transferred to the said Company under the Transport Holding Company Act 1968 and shall operate those assets in association with the existing Board and in accordance with the provisions of the Act of 1962."
In other words, the Council would be similar to the Transport Holding Company. I should emphasise the fact that we do not wish to create a monopoly of road and rail transport, since transport users would suffer from monopoly conditions. That is the first aim of these Amendments.
Secondly, under our proposals the freightliner service would not be taken away from the railways. Some very powerful arguments were put forward during the Second Reading debate by those who have a great deal of knowledge on this subject against the removal of the freightliner service from the railways, and I hope that the advice given by many noble Lords on Second Reading will lead the Government to have second thoughts. The third objective of the Liberal Amendments is to strengthen and improve the advisory and consultative procedure.
If I may deal with the last of these proposals first, we do not object to the concept of setting up a Freight Integration Council which is referred to in Part I. We welcome the idea, so far as it goes. But we must recognise that the nationalised Transport Advisory Councill, which it would supersede, has not been particularly effective and the whole history of consumer advisory bodies has not been very encouraging. The membership is, of course, important if any advisory body is to be effective. Under our proposals there would be a consultative Integration Board composed of the following—and this, in turn, is also to be found in Amendment No. 7A:
"a consultative Integration Board shall be established consisting of

(a) a Chairman and Vice-Chairman appointed by the Minister;

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(b) four members appointed by the Freight Integration Council;

(c) four members appointed by the Railways Board;

(d) four members appointed by the road haulage industry;

(e) four members appointed by the organisations representative of users of freight transport."

To return to the main issue—namely, how to achieve an efficient and coordinated transport system—may I offer one or two general observations? It is a mistake to over-simplify the problem, and to regard it as the simple one of deciding how to force goods off the roads on to the railways. That would be particularly inappropriate in certain areas of the country where the railway lines have already been closed. Such a policy would involve attempting to force goods off the roads on to railways that no longer exist. Therefore that would be a mistaken way of approaching this problem. I think it would also be a mistake to assume that railway losses are entirely due to the transfer of freight from the railways to the roads during the post-war years. The urge to direct traffic on to the railways is based on the misconception that the expansion of road haulage is the prime cause of the railways' losses. But it is clear that the railways are suffering primarily from the diminution of bulk load-carrying. Coal and steel transport has declined drastically in the last decade. Plants using large quantities of fuel or raw materials have been located nearer their sources of supply, a significant amount of oil is carried in pipe-lines, while the production of coal—the fuel which it is replacing—has dropped considerably. These have all contributed to the loss of freight. Therefore we must try to get the problem in the right perspective.
There is another general observation which I should like to make. I do not believe that the business community use the roads instead of the railways out of sheer cussedness. For example, a manufacturer in, say, the West Riding of Yorkshire wishing to send his goods to the Port of London, or to the Ports of Hull or Liverpool, will have a number of factors to take into account, apart from that of transport costs. There will be two main considerations: one is the amount of loading and unloading, and the other is the arrival of the goods on time. These are

1125
two essential factors in the equation, and if industry is to be efficient and competitive, they are extremely important considerations. If there has been a preference for the road, it is not due to an obstinate desire to clutter up the roads with lorries. I do not think the solution to these practical problems lies in the creation of a great new Corporation, especially if the intention behind this Corporation is one of compulsion rather than attraction due to better service. I am sure that compulsion would not be the right policy, and it is not one that I should welcome.
May I now say a word about loading and unloading? Most European railways have felt the same contraction as ourselves but, on the whole, they appear to have shown more ingenuity in seeking fresh markets. They have tried to offer what road transport offers—door-to-door service—by providing, for example, a service for private sidings. On the Continent there has been a dramatic increase in rail freight-carrying between private sidings. Industries with regular loads of raw materials coming in and finished goods leaving have always known the enormous advantages of avoiding all unnecessary loading and unloading during a journey. There has been a great superiority of road haulage over rail in this respect. But private sidings would, I think, enable the railways to offer the same services. It is true that companies which now operate their own railway sidings are still not able to reap the full benefit because so many of their suppliers and customers do not also have their own sidings, and only when a large number of firms possess them does it become increasingly advantageous to use private sidings. But I think that if this development were followed up both railways and industry would benefit. Certainly I think it is a line of progress worth considering; and we have something to learn from the Continent. But I believe that the creation of this Corporation might well be a hindrance rather than a help.
This brings me to the freightliner service—not quite the same kind of point, but also closely related to door-to-door service and speed of delivery. I listened to the arguments on Second Reading and I read those that I was unable to hear, and I am sure that the weight of evidence is in favour of allowing the railways to
1126
keep this service. I need not repeat all the arguments, but may I just make one comment which I think is relevant? It is, alas! a sad coincidence that this, the first day of the Committee stage of the Transport Bill, should be the first day of the "Go-slow" on the railways. I do not think it would be very helpful for me to make comments on the railway dispute, but I am quite sure the longterm effect on the railways will be harmful. I think there will be a loss of custom which it may be difficult to regain. It is certainly very frustrating to the public.
There have, however, been frustrations for the railwaymen in the post-war years, and these have not been due entirely to matters of pay but have been due partly, I think, to loss of status; and that, in turn, has been due to circumstances beyond their control. If that is so, I think it would be unfortunate to add to the difficulties of those running our railways by taking away the freightliner service and so causing a further loss of status. I know that strong feelings are felt on the subject of the freightliner service, and there are Amendments—namely, the Amendments to Clauses 4 and 5 in the name of the noble Lord, Lord Nugent, to which I have already referred—which pinpoint this particular aspect of the debate on Part I.
I am anxious to be as helpful as possible. If, in the course of the debate, a strong desire is expressed to record a decision on this specific issue (and I know that strong feelings are felt), I am prepared to advise my noble friends not to press the Liberal group of Amendments on the wider issue but to support the Amendment on the issue relating to the freightliner service. But for the present I think that I must reserve my position and see how the debate proceeds. I hope that I have given a fair summary without being unduly long. In conclusion, may I emphasise that although the Liberal Amendments are major Amendments to this Bill our aim is to create an efficient, co-ordinated transport system with the minimum of compulsion, and our desire in doing this is to be as constructive as possible. I beg to move.
LORD HUGHES: In order the t we may now hear Lord Kennet's Statement

1127
on the Sainsbury Report, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

THE PHARMACEUTICAL INDUSTRY: THE SAINSBURY REPORT
3.58 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, I will, with permission, repeat a Statement which is being made by the Minister of Health in the House of Commons about the recommendations of the Committee under the chairmanship of Lord Sainsbury, which inquired into the relationship of the pharmaceutical industry with the National Health Service. The Statement is as follows:
"This relationship is very different from the normal relation between Industry and the Government as purchasers. The Health Departments do not determine the demand for the drugs paid for under the service, since decisions as to what to prescribe rest with individual doctors. The hospital service apart, there is no contractual relationship with drug suppliers. Successive Governments have been concerned about these problems and the associated issues of prices, sales promotion, research costs and patents, and we are greatly indebted to the Committee for their authoritative and balanced Report.
"Many of their detailed recommendations related to the establishment and functions of a Medicines Commission, and our conclusions on nearly all of them have been announced during the proceedings on the Medicines Bill. The exception is the recommendations that responsibility for classification of drugs according to their efficacy should pass from the Macgregor Committee to the Medicines Commission, and that there should be a British Classification of Medicines. The Bill in its present form would enable these recommendations to be implemented, but the Government wishes to consult the Commission
1128
before reaching a final decision on them.
"We doubt the need for a separate Economic Development Committee for the pharmaceutical industry, as the Sainsbury Committee recommended, but propose instead to invite the Chemicals Economic Development Committee, on which the pharmaceutical industry is already represented, to establish a separate working party for the industry.
"As the Committee suggested, certain patent questions have been drawn to the attention of the Committee on the British Patent System and Patent Law. The extension of the Crown use provision of the Patents Act to the general medical and pharmaceutical services, on which the Sainsbury Committee made a specific recommendation, will be considered further by the House "—
that is the House of Commons—
"during the passage of the Health Services and Public Health Bill."
That is, during the House of Commons' consideration of Lords Amendments. The Statement continues:
"As regards prices and profits, the Government accept the Committee's general conclusions that there are serious weaknesses in the present voluntary scheme for regulating prices of ethical proprietary medicines and that the conditions under which these medicines are supplied to the National Health Service do not always ensure that prices and profits are reasonable.
"The Committee recommended that prices should in future be regulated by a system of direct negotiation, based on standard cost returns for individual products and related to annual financial returns for each company showing the results of trading with the National Health Service. They envisaged that such a system would involve considerable addition to the Ministry's staff and recognised that it would be for the Government to decided whether this was the best use of additional Civil Service manpower. There are practical considerations which would make it difficult to negotiate prices on a basis of standard cost returns, but in any event, shortage of manpower would be a major obstacle at the present time.

1129
The industry are however willing to co-operate in alternative arrangements based on the annual financial return also recommended by the Sainsbury Committee, under which information, in far greater detail than hitherto, would be provided by individual firms about the overall costs and profitability of their business with the National Health Service, as the basis for price negotiations. Subject to agreement on detail, we would accept a revised voluntary price regulation scheme on these lines, running perhaps for a minimum of three years. Although we reserve the right to reopen the question of Standard Cost Returns for individual products, the industry will have a chance to demonstrate that these new arrangements can safeguard the public interest.
"The Committee also recommended that there should be no brand names for new pharmaceutical products. We share the Committee's view that there are disadvantages in the use of brand names in association with heavy sales promotion expenditure, but we believe that the abolition of brand names by Britain in isolation could well have more serious economic consequences than the Committee envisaged, and would in fact be likely to put British-based firms at a disadvantage in export markets. Any amendment of the trade mark law also needs to take account of our international obligations. Before reaching final conclusions on where the balance of advantage lies, we propose to explore other possible ways of achieving the Committee's objectives, in particular through greater restraint in sales promotion.
"Present sales promotion involves a good deal of waste and total expenditure is higher than is necessary for the main objective as far as the National Health Service is concerned, namely informing doctors about available medicines. We accept that the industry should have a reasonable degree of freedom in promoting its products to doctors, but we shall expect a very substantial reduction in the amount of promotional expenditure, particularly that which is taken into account in assessing a firm's costs and profits
1130
under the revised price regulation scheme.
"There will need to be further negotiations on this and other matters but I am confident that the decisions taken by the Government will go far to remedy the weaknesses identified by the Sainsbury Committee."
LORD NEWTON: My Lords, I am sure that the whole House will be grateful to the noble Lord, Lord Kennet, for repeating to us this very long and complicated Statement. In addition to being long and complicated, it is, of course, a most important Statement about the Report of the Committee of the noble Lord, Lord Sainsbury. I do not think Lord Sainsbury is with us at the moment, but I suspect that if he were he might agree with me that the most notable characteristic of the Governments conclusions on his Report as now announced is the extreme caution running through the Statement. This is welcome to me, although I am not quite sure whether it would be equally welcome to the noble Lord, Lord Sainsbury. But in the circumstances I propose also to be cautious in not commenting in any detail until I have made a longer study of these somewhat Delphic phrases.
I would, however, make just one comment. It seems to me that the penultimate paragraph of the Statement is rather unhappily phrased. I realise that the Government are entitled to take the view that they should form an opinion on the amount of promotional expenditure which should be properly taken into account in assessing a firm's costs and profits under any revised price regulation scheme, but the sentence in which that point is made is prefaced by the observation:
"We accept that the industry should have a reasonable degree of freedom in promoting its products to doctors…"
I should have thought that the industry should have absolute freedom to promote its products as it thinks right in the interests both of the doctors and of the patients—which is a different matter from saying how much expenditure the Government will be prepared to accept in their calculations.
My Lords, the Statement said:
"The extension of the Crown use provision of the Patents Act to the general medical

1131
and pharmaceutical services. Sainsbury Committee made a mendation, will be considered House "—
that is, the other place—
"during the passage of the Health Services and Public Health Bill."
Like the noble Lord, Lord Kennet, we all know that that must happen by virtue of the fact that your Lordships removed from the Bill the relevant clause. I should like to ask the noble Lord whether the fact that the Statement made it necessary to repeat that very obvious fact is just a desire to make the Statement longer than it would otherwise be, or whether it indicates that the Government have had a welcome change of heart on the use of the Section 46 procedure.
LORD KENNET: My Lords, I thank the noble Lord for his caution and for the brevity of his observations. I regret the absence of my noble friend Lord Sainsbury this afternoon. I should have welcomed the opportunity of stating to him in full House the gratitude of the Government for his Report. I understand that he is unavoidably abroad but that he will be back shortly.
With regard to the two points raised by the noble Lord, Lord Newton, first, as to the expenditure on promotion, it might not be out of place if I were to remind the House that I understand that in 1965 the total expenditure was £15·4 million, and this was no less than 13·9 per cent. of the total home sales. The cost of promotional representatives amounted to an average of £250 per doctor in the country per year. On the question of the use of Section 46 powers and the Patent Law I should not like to prejudge what my right honourable friend will have to say to the House of Commons about this shortly.

PRICES AND INCOMES BILL TIMETABLE
4.8 p.m.
LORD SHACKLETON: My Lords, it might be for the convenience of the House if, by your leave, I were to make a Statement about the timetable for the Prices and Incomes Bill. The arrangements which we propose to follow have been discussed through the usual channels. Your Lordships are aware that we tend in our annual bouts to have certain diffi-
1132
culties over the Prices and Incomes Bill, and in this respect this year is no exception, except for the much greater amount of time that I am happy to say that we have been able to allow for your Lordships as compared with previous years. We had hoped to have this Bill from the other place, assuming they decide to pass it early this week, but it now appears that it is unlikely that we shall receive the Bill from the Commons until—and this must be subject always to their decision—about 7 p.m. or even later on Thursday.
We thought it might be for the convenience of the House if we were to introduce a Bill here in all respects similar to the Prices and Incomes Bill as amended in Standing Committee in another place. The intention then would be to give it a First Reading this evening, to have the Second Reading on Thursday (instead of the Transport Bill) and this would then allow a week before the Committee stage on the Prices and Incomes Bill, which we propose to take on the following Thursday—that is, Thursday week—and to complete all stages in the week thereafter.
In previous years we have proceeded by means of a "white Bill"; that is to say, we have had a Second Reading debate on a print of the Commons' Bill made pursuant to an Order of this House—a process which has come to be known as "Shepherd's Pie". However, I think it might be more suitable for us to proceed on a proper Bill, a No. 2 Bill, which would be our own version. If I may recapitulate, what we are proposing is that your Lordships should consider the Lords' own Bill on Thursday, and on Friday give as formal a Second Reading as possible to the actual House of Commons Bill which by then we shall have received—we hope. It would then be possible, if your Lordships wished for the Government to explain any differences between our Bill and the Bill from another place, but I do not think that the alterations will be of such significance as to warrant spending very much time on it, and our own Bill will provide a satisfactory basis for a Second Reading discussion.
The print of the Commons Bill will be available on the Friday. We could by then have withdrawn our own Bill and it would be possible for noble Lords to have the week in which to put down

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Amendments to the real Bill. As I say, this would give the House from Friday to Thursday July 4, in which to table Amendments for the Committee stage on the Commons Bill. We hope that we may then proceed to Report and Third Reading on Monday, July 8, if the House allows us the necessary suspension of Standing Order 41. I appreciate that this is not the sort of arrangement which we particularly like, and I am also well aware that we had hoped not to repeat the procedure which had been followed in previous years, but I think, none the less, that in the circumstances what we are proposing is for the convenience of your Lordships' House.
LORD CARRINGTON: My Lords, the noble Lord, the Leader of the House, is, as usual, very amiable, but the Government seem to be living in a sort of dream world in which we have to discuss Bills which have not yet been printed and have not yet been through another place—all for a reason which none of us has been told. Why have we to do this at this time? Why is there suddenly some reason why everything has to be advanced at the last minute? The Government do not seem to me to be able to see twenty-four hours in advance what is going to happen. We have had this over and over again. Why could they not have foreseen the necessity to do this? They must have thought about the timetable when they introduced the Bill in the House of Commons; and now we find, at the last moment, that everything has to be changed. The Government do not seem to have any foresight. Although we are beginning to get used to it, I must say it seems pretty odd from a Government which is absolutely dedicated to planning.
We all thought that we were going to discuss the Transport Bill on Thursday, and all my noble friends are prepared to do that. I have no doubt that some of those who wish to talk—and probably there will be many—about the Prices and Incomes Bill may not find it possible to attend your Lordships' House at that time; or they may not find it possible to write their speeches in time. It all may be very inconvenient and we shall not have nearly as good a debate as otherwise we might have had. I think
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that this is a rather disgraceful statement from the Leader of the House. I suppose we have to accept it, thou3h why on earth we should be so reasonable after the tone of the Prime Minister's statement in the Commons last week I do not know. But we who sit on these Benches are very reasonable people. All I say is that we must see how we get on. I do not say that we shall have the Report and Third Reading within three or four days of the Committee stage, but we shall see how we get on, and in the meantime, as the noble Lord, the Leader of the House, may have observed, we accept it with bad grace.
LORD BYERS: My Lords, I should like to accept this with not too bad grace, because we on these Benches should like to co-operate in spreading the work load, but I may say that three or four days' notice of a change of business of this order of magnitude is very inconvenient to myself and to my colleagues, who will have to make other arrangements. May I ask, once again, as I always do on these occasions, that this will not be taken as too regular a precedent. I have always made that point and I should like to emphasise it.
LORD SHACKLETON: My Lords, from his opening remarks I think that the noble Lord, Lord Carrington, must have been reading the reference in the New Statesman to the Alice Through the Looking Glass item, in which complimentary remarks were made about the noble Lord, even though a large tear did not come into his eye. Noble Lords may or may not have seen the item; if not, I commend to noble Lords opposite the kindly remarks about the noble Lord, Lord Carrington. I must say straight away that of course I cannot bind either this Government or possible successors not to use such practices 'when there is a real emergency, but I feel that I should make a special apology to the House for the shortage of notice. I should not wish to embarrass the noble Lord, Lord Carrington, but he knows that, quite apart from the slight breakdown in communications during the Rhodesian debate, Ascot also interfered with communications through the usual channels on that side of the House. I had hoped that we might make an announcement last Thursday, and we tried very hard.

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However, I appreciate that this is inconvenient, although I did consult certain noble Lords such as the noble Lord, Lord Erroll of Hale. Still, it is not satisfactory and I acknowledge that.
Your Lordships have in the past deployed a degree of co-operation which I have very much appreciated. It is undesirable in measures of urgency to allow an interregnum between the lapsing of the provisions under existing legislation and the coming into operation of powers under a new Bill. To some extent this is absolutely inevitable in conducting government in an area where the Government rightly have regarded themselves as so directly answerable to Parliament. I assure your Lordships that the Government have had the urgency of this Bill very much in mind. It has been pressed on very hard, but it is simply in order to give your Lordships as much time as possible. Let me point out to the noble Lord, Lord Carrington, that it is about 2,000 per cent. more time than we have had in previous years. Last year I think your Lordships had only a day and the year before a day and a half. This year we shall have the equivalent of about a fortnight.
LORD CARRINGTON: Meanwhile, my Lords, the economy does not get any better. May I ask the Leader of the House whether this means that there will be one day less for the programme for the Committee stage of the Transport Bill? The Government Chief Whip shakes his head. Perhaps he could explain to your Lordships how we are going to make up the days we are losing for the Committee stage of the Transport Bill, which I think is going to take some considerable time to go through your Lordships' House.
LORD BESWICK: My Lords, may I answer that? The day set aside for the Prices and Incomes Bill Second Reading will now be available for the Transport Bill—next Monday.

TRANSPORT BILL
4.19 p.m.
House again in Committee.
LORD WINDLESHAM: We on these Benches listened with interest to what the noble Lord, Lord Wade, had to say when initiating this debate and we welcome the support that he gave in principle to the rather narrower group of Amendments tabled in the names of my noble friend Lord Nugent of Guildford and myself. On these Benches also we are concerned by the proposal in Part I of the Bill to set up a National Freight Corporation. The opening words of the White Paper, Transport of Freight (Cmnd. 3470) on which this Part of the Bill is based read as follows:
"The basic objective of Government policy must be to improve the efficiency of the whole transport system. Nowhere is this more urgent than in the field of freight. Quick, convenient and economic means of moving this are vital to industry."
That is the yardstick, but how do the proposals in Part I of the Bill measure up to that statement? It is a question that needs to be asked, because it has yet to be proved that a more efficient transport service can be provided by setting up yet another organisation whose role would be to reduce customer choice. However one looks at it there must be a reduction of choice. There will be a reduction of free enterprise in the transport system and decisions made through normal commercial judgments will be limited as a result.
The main objections that we on these Benches have to Part I of the Bill concern the relationship between the proposed National Freight Corporation and the British Railways Board. As the noble Lord, Lord Wade, pointed out, it is rather topical that we come to discuss the subject of railways on the day that "Go-slow" and "Work-to-rule" have begun, and I agree with him in thinking that it would not be particularly opportune at this moment to comment on that dispute. Nevertheless, two issues of principle arise out of the "Go-slow" which will affect the way in which British Railways is run in future. The first is that pay rises must be related to productivity, and must not be given in the form of across-the-board increases—that is the position that the Railways Board have

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taken up; and the second point of principle is the need for the Railways Board to stand firm and negotiate this dispute. The tendency for railway unions to end up in the Prime Minister's sitting room at 10 Downing Street is an old one, but from the beginning of next year the Railways Board will be financially independent. There will be no further funds available for wage increases. With those two comments I should like to leave the subject of the "Work-to-rule" and the "Go-slow". I hope that there will not be too great inconvenience and dislocation of services as a result of this action.
Under this Bill it is proposed that the National Freight Corporation shall take over British Railways freight services, together with the assets involved. Clause 5 envisages two operating subsidiaries, the freightliner company and the freight sundries company. Both of these will be transferred to the National Freight Corporation on an appointed day, although British Railways will retain a 49 per cent. interest in the freightliner company.
Noble Lords will see that Amendment No. 9, in the names of my noble friends Lord Nugent of Guildford, Lord Drumalbyn and myself, proposes to delete the provision that the freightliner company should be transferred to the Freight Corporation. We make this proposal because we do not believe that the provision in the Bill as it stands, to transfer the freightliner company as well as the freight sundries company, will fulfil the stated aim of the Government's own policy in the White Paper, Transport of Freight, which I read out at the beginning, to improve the efficiency of the whole transport system. We do not believe that that would result from the Bill as drafted and now before your Lordships. The effect of our Amendments to Clauses 4 and 5 (the noble Lord, Lord Wade, has explained that these really fall within the set of Liberal Amendments: ours are on this narrower point, but we find ourselves generally in accord with what has been said by the noble Lord) would be to leave the operation of freightliner terminals—that is, the point at which the containers are physically transferred from road to rail or vice versa—in the hands of British Railways, together with the ownership of the containers themselves,
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other than those which belong to the customers, and also to leave with the British Railways Board the vehicles and other assets of the freightliner company. Under our Amendments the proposed freight sundries company would remain as outlined in the Bill. The freight sundries company would cover the parcels service of British Road Services and the present sundries services of British Rail.
Our aim in tabling these Amendments is quite simple. What we propose is to leave with the railways the responsibility for marketing, in the sense of selling the freightliner services and developing future markets for these services. There are three main reasons for this. They have already been aired in your Lordships' House, because noble Lords wile were present at the time will recall that this was one of the main themes of the Second Reading debate. The first argument is that the two basic functions with in an organisation—that is, the production of goods and services and the selling of those goods and services—must be complementary to one another, and cannot be split.
This proposition was supported by the noble Lord, Lord Beeching, and the noble Lord, Lord Robertson of Oakridge, and it has been publicly supported by Lord Beeching's successor as Chairman of the Railways Board, Sir Stanley Raymond, in an article in the Sunday Times earlier this year. Therefore, the weight of informed opinion—and it is outspoken, stated opinion of great experience—is in favour of leaving the freightliners entirely with British Railways. It is true that the production and sales side of the freightliner company may, and probably will, require separate managements, because different skills are required, separate groups of people; but it is imperative to bring these together at some level so that the two basic functions are welded together into a single purposive organisation. If I may remind your Lordships of a passage from that remarkably powerful speech made by the noble Lord, Lord Beeching, on Second Reading he said:
"It is an organisational absurdity to bring about deliberately a situation in which the two classes, production and selling, are split between two large separately accountable corporations."—[OFFICIAL REPORT, 11/6/68; col. 89.]

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That is strong language. But that point has still not been answered by the Government. I hope that this afternoon, in reply to this second debate, in which it has been a critical point, as the Government will appreciate, we shall have a reply to this extraordinarily powerful speech by the noble Lord, Lord Beeching, backed up by the other people whose names I have mentioned.
The second argument is the need to build a greater degree of customer orientation throughout British Railways. The existing skills are mainly operating skills in running the railways. What is needed now is to nurture the ability to identify new areas of activity and to adapt the existing services to new means. Some noble Lords will have seen the Report of the Prices and Incomes Board (Report No. 72, Comnd. 3656) which recently condemned the existing practice of the Railways Board. On page 20 they used the following words:
"It would seem to us that in the past British Rail has tended to sell, and sell unprofitably, the service traditionally provided rather than adjust the service to what can be economically sold."
That is the end of the quotation. That is contained in a Report the conclusions of which I believe the Government have already accepted.
The third argument is the effect of the Bill as drafted on British Railways. These clauses would destroy the unified control of the liner-train business. They would deprive the railways of the effective management, the day-to-day management, of the growth part of their business on which the viability of the new main-line network will depend to an increasing extent in the future; and it will be a serious blow to the confidence and morale, already none too high, of railwaymen. As I said in dealing with this point on Second Reading, the Railways Board are to be congratulated for having been right in the vanguard of the development of the container as a form of through-transport. This country has been ahead, I think, of almost any other European country in developing the container as a new form of transport. So what we have to ask ourselves to-day is this question: Is this achievement of British Railways to be recognised by removing from the Board the control of the freightliners?
The Government might say in reply that the Railways Board will hold 49
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per cent. of the shares of the new Freightliner Company and it will be represented on the Board of the company. But this answer, this line of thinking, really only reveals a traditional obsession with ownership rather than with control. It is the day-to-day management of the freightliners that has made them successful so far, and it is this management function that the Bill proposes should be handed over to the new National Freight Corporation. This is what we think is misguided, and this is what by our Amendments we shall seek to put right.
4.33 p.m.
LORD WINTERBOTTOM: I am grateful to the noble Lords who have spoken for agreeing to group together the two sets of Amendments, and thus enabling us to have a coherent debate on the key issue which divides the views of the Government from those of their opponents and from independent but knowledgeable individuals like the noble Lord, Lord Beeching, who have spoken against them on the Second Reading debate. Perhaps it would be of use to the Committee if I restated at somewhat greater lengh than my noble friend Lord Shepherd did the position of the Government, and if my noble friend Lord Hughes in winding-up replied to the various points raised by various individual noble Lords in the course of the debate.
It is the view of the Government that the transfer from the British Railways Board of the freightliner services, apart from provision and haulage of the trains, is an essential part of the concept of the National Freight Corporation, which must have commercial responsibility for both marketing and management of these services if it is to be able to make the most efficient and economic use of, and choice between, road and rail for the trunk haul. The first objective of the Government's freight policy, set out in the White Paper on the Transport of Freight is—I quote:
"To offer the customer a more efficient freight service in the public sector, including a comprehensive, efficient and more economic door-to-door road/rail service, facilitating and exploiting the use of containers".
One of the key factors in achieving this objective is the rationalisation of general merchandise traffic, a field in which the British Railways Board lost £36 million in 1966. Perhaps it will be of use to the Committee if I impart a nugget of information

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I collected in the course of my studies. Parcels and sundries consist of loads up to 2 tons in weight, although one ton is the usual upper limit, and general merchandise traffic is anything above this figure but less than a whole train.
Modern methods of handling this traffic must be used, taking advantage of new techniques and equipment. First of all, the collection and distribution must be more efficient, and this is a field in which the Transport Holding Company's road haulage subsidiaries, British Road Services and the others, have been conspicuously successful. But, in addition, an efficient through service also depends on bulking general merchandise for trunk hauling in unit loads and in particular in containers. The success of the freightliner concept depends on taking the maximum advantage of what the railways can do best, which is transporting bulk freight over long distances at high speed and low cost.
If these elements are brought together in one organisation the flexibility and door-to-door facility of road haulage can be combined with the speed and economy of rail over the trunk haul. The key to this lies in the management and marketing functions—the expertise to offer the customer the most comprehensive service: functions which we believe must be concentrated, for all the public sector's traffic, in one organisation if the most efficient service is to be provided at lowest cost. Transfer of the commercial responsibility for marketing and managing the freightliner services from the Railways Board to the National Freight Corporation is essential in order to enable the Corporation to make both the most efficient and the most economic use of road or rail for the trunk haul. That is why the National Freight Corporation will have a 51 per cent. shareholding in the Freightliner Company.
The basic objection, cogently expressed by the noble Lord, Lord Beeching, which has been raised to the proposal to transfer responsibility for the freightliner services to the N.F.C., is that it is a separation of the two basic business functions: that of production and that of selling. They must be under common management at some level or other in any business, the success of which will depend upon effective management to make these two functions complement one another. But there are many businesses which do not retail the goods or services which
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they produce, which specialise in mass producing goods or services which will in turn be part of goods or services for others to retail. This is the position which will exist when the Freight Corporation takes over responsibility for the freight-liner services.
The Railways Board will concentrate on what it can do best, which is the wholesale activity of providing bulk transport by the train load; and the Freight Corporation will be the retailer who serves the customer, collecting and delivering his goods by road and contracting wish the railways for the carriage of bulked goods. Indeed, there is already a very close parallel in the present situation with the British Railways Board freightliners, where over half the selling of the service to industry is done by private hauliers, who bring traffic to the freightliners as the Freight Corporation will do. And there is a further precedent for the British Railways Board's concentrating on selling its services wholesale in the many company trains it now provides; for example, for the oil companies. There is still much scope for the Railways Board to exercise its commercial skill in negotiating the right price to attract these buyers of full trains.
Nor is it sensible to claim that it is wrong to separate the operation of the trains from the operation of the terminals, because this will be no different from the situation of private sidings where the customer provides his own terminal facilities, not the Railways Board. Perhaps the best example of all of the split between wholesaling and retailing is the Tartan Arrow Company. This was a private road haulage undertaking which decided to provide a parcels service between the South-East and Glasgow using containers sent by rail. It now operates two trains a day of containers and parcels wagons between Glasgow and London, in addition to its other services by road. The Company, which is now owned 50 per cent. by the Transport Holding Company and 50 per cent. by British Railways, operates the terminals and the road collection and delivery service; and the railway provides and operates the trains —all very successfully, as I think noble Lords will agree. This is exactly how things will work in the freightliner company, which will also be a jointly owned road-rail company of which Tartan Arrow will, of course, become a subsidiary.

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Before I go further, I should like to make a rather smaller point but one which I think is of importance in this argument. A single transport system as big as the B.R.B. is always exceedingly vulnerable when it comes to quoting rates in detail. In fact a large organisation such as the Railways Board is a poor retailer. The Board is under enormous pressure to get traffic on to the main haul at all costs and in the name of marginal costing, or contributory value, tend to give way and to quote individual rates which are not in themselves remunerative, always on the assumption that there will be some swings which will pay for the roundabouts. What happens in reality is that because of the single ownership the marginal rates quoted tend to become generalised, and the whole structure is undermined. This may in fact be part of the reason for the heavy losses incurred by British Rail in this field. We believe that the detailed quotation of road-rail rates should always be left to separate agencies of various kinds. If, therefore, the quotation of retail rates for door to door consignments is left to the National Freight Corporation subsidiary and to other large scale road hauliers, the Railways Board will begin to have a chance to balance its budget on this traffic and we assume, probably correctly, that they are already balancing their budget when they are dealing with full train loads of coal, minerals, and so on.
It is also argued that the present concept of the freightliner company will fail because the company will be either too rail orientated or too road orientated. The joint ownership of the freightliner company, with the B.R.B. holding a 49 per cent. stake, and having an appropriate number of seats on the board of the Company, will help to ensure that neither of these events happens. The two organisations will work closely together on planning and investment, and there will be a free exchange of information between them to help ensure the correct balance of investment between road and rail. The National Freight Corporation will have a duty to send as much traffic as it can by rail, but—and this is an important point—only where it is economic and efficient to do so.
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It was said in the Second Reading debate that the proposal will deprive the railways of one of their greatest achievements and their brightest hope for a profitable future on the freight side. Of course it is not mentioned at the same time that heavy financial burdens will be removed from them, but even so the railways will have a double stake in the freightliners under the new proposals. The actual operator of, and the main beneficiary from, the liner-trains will still be the Railways Board, who own a valuable "iron bridge" for the trunk haul for which they can charge, on a commercial basis, the highest tolls the market will bear. They will not be cursed by the problem of marginal costing and having to deal in "penny packets". They will be permitted to think in broad terms of the complete train. They are the body which is the best capable and fitted to do this large-scale job, but, as I have said, the Railways Board receives this revenue for providing the trains and they will also receive 49 per cent. of the profits of the freightliner company.
On the other hand, the fact that the National Freight Corporation will also get half the profit from the freightliner company, after negotiating with the B.R.B. on a commercial basis for the trunk haul of its containers, will, we believe, bearing in mind that each undertaking will be given a financial target to meet, ensure that there is no cross-subsidisation between the organisations. The arrangements which have been worked out are in fact designed to attract a substantial volume of additional traffic to the freightliner system, and so to bring additional benefits to the railways —indeed the Government are convinced that this is an essential step if the system is to be developed to the maximum economic extent. I hope I have made the view of the Government and the reasons for these proposals clear.
4.45 p.m.
LORD POPPLEWELL: It is not often that I shall disagree with the Government on this Bill, but I totally disagree on their line of approach on this question of the freightliner company and also the method by which they are dealing with the sundries and I think it is as well that I should voice my opposition to this at the outset. I shall certainly

1145
not support the Tories if they take it to a Division, because I do not think their opposition is quite sincere.
The reason for my disagreement with the Government on this matter is that I think it leaves a big weakness. It does not bring together, in the form in which I personally have always envisaged a Socialist transport policy, a truly integrated policy, to set up so many of these various bodies with no real co-ordinating link. I do not think that the suggested Council goes anywhere near achieving a truly Socialist transport service policy. There is no question of a holding committee or of financial control; each is to be a separate unit. One knows exactly what has taken place when this has been the position in the past, in particular under the 1951 and 1962 Acts. I know that no words of mine can bring about any change in this direction, because the Ministers' minds are already made up, and I regret that. I would have preferred some authority that could ensure the financial objectives in a true transport policy, to prevent any question of public moneys involved in subsidies being covered in this Bill.
On the freightliner question, I know that the railways have built up this service and that there are valuable discussions taking place between the transport holding group and the Railways Board, because they are working on the task of trying to create a fully integrated line of services between the National Freight Corporation, when it is established, and the Railways Board. Although there is the financial set-up referred to by the Minister—the 49 per cent. and the 51 per cent. of the shares—one can see that there will be a competitive spirit, and to make this freightliner service successful and to keep it the success that it is I think, deeply and sincerely, that it should definitely be under the control of one authority. I believe that the marketing and selling of goods should be an integrated policy in this Bill. There are two separate units involved here, and I am not happy with the situation.
The question of sundries traffic has been referred to. It has been the policy of the Railways Board, in particular since the noble Lord, Lord Beeching, was appointed Chairman, for the sundries traffic be thrown overboard completely by the railways; to be handed over to
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road haulage or to any firm that wishes to take it up. In consequence, there is the serious deficit that is repeatedly referred to in the balance sheet of the Railways Board. I am convinced that that deficit on the sundries service has been brought about quite deliberately. If the railways had really gone out after sundries they could have made it a viable proposition. Now the Government are accepting the fact that sundries should be taken away from the railways and handed over to the National Freight Corporation or some such body. I think this is the wrong line of approach, and I am sorry that in the very initial stages of this Bill I am in opposition to the Government on this particular matter. It may be that with the passing of the Bill I shall retrieve myself and give it much more support, but if it comes to a vote on this matter—I hope it will not; it is not possible to alter it at this stage; the Commons will prevail and it is right that they should, but if there is a vote on these sundries on the freightliners position—I am afraid I shall abstain.
LORD WINDLESHAM: May I intervene briefly? There really is a difference, because in the Committee stage in the House of Commons, the proceedings of which I am sure the noble Lord has read, the Parliamentary Secretary said that the Opposition could call their witnesses and the Government could call theirs, and he balanced the statements of what he called the expert witnesses. In this House we have heard three people who have been Chairmen either either of the Railways Board or the British Transport Commission, and all of them have given their authority and their voices against this particular proposal. So to this extent there is now a change which the House of Commons might like to take account of.
LORD POPPLEWELL: I appreciate the point, but I am not going to be tempted too far.
LORD ST. HELENS: May I start by making an appeal to both Front Benches, that if they are going in future to take a very large wad of Amendments together it would be helpful to those of us on the Back Benches if they could let us know the day before. I spent a long time painstakingly going through all the Amendments, and now what I find is

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required is to make a Second Reading speech on Part I. If it is going to happen again like this it would be kind if the Front Bench would tell us, because it would save us an immense amount of time and trouble and hard work.
I propose very briefly, and not having prepared myself in the proper province, to go through some of the various points made and those which I personally think important. I was much impressed by Lord Wade's remarks because I thought he picked out in a fairly brief speech most of the really important points in Part I. He started off talking broadly about what I believe to be one of the most important points in the Bill, and that is the question of ownership and control—who is to own and who is to control the vast mass of transport that is proposed by the Government to be under the auspices of the Transport Holding Company. To those of your Lordships who have read all through the mammoth proceedings in the Commons Hansard—I think it was 45 days in Committee—one thing that is obvious is that size of ownership, monopolistic control, is no guarantee either of efficiency or economy. The Government obviously did their best to defend the proposition, but the three Ministers involved with the Bill certainly did not impress me that you get a more efficient service from a large monopoly. They certainly did not impress me that you get a more economic service. In fact, various of the experts quoted, experts from outside the House of Commons, made it pretty plain that the bigger the outfit the more cost, and they did not make much case for greater efficiency.
The second point that has been brought up by everybody who has spoken so far concerns the taking away from the railways of the freightliner service—49 per cent., I believe, is being taken away from the railways. It has been very interesting, because in your Lordships' House we have the noble Lord, Lord Robertson of Oakridge, the noble Lord, Lord Beeching—have no great knowledge of these matters but I would have said that Lord Beeching was the greatest authority on transport in the country to-day—and we have just listened to the noble Lord, Lord Popplewell, whom I have heard speaking in another place and also here
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on railways, and though we may not always agree with him we do acknowledge that he is a great authority on the running of railways and the transport service. There are these three really eminent people, who know their stuff backwards, talking against the Bill and in particular against the action in regard to the freightliner service.
On the other side of the House, we have the Minister and his advisers, and there are the Ministers in the other place. The great difference between those two sets of people is this. Lord Robertson, Lord Beeching and Lord Popplewell have had a great deal of practical experience; they know their stuff and they have proved it; but the other people, excellent people though they are—and I have the greatest regard for them—have nothing but theory and book knowledge to go on. Therefore I think the proposition they propound is going to break down, and I would far rather put my faith in men of proven practical experience.
The next question is that of getting traffic off the roads and on to the rail. Obviously, we are going to hear a great deal more about this as we discuss the Bill and various Amendments. I can only speak for myself, but from my point of view the proposition of getting freight off the roads and on to rail is one that is very dear to the hearts of the Conservative Party. We wish to do this every bit as much as the Party opposite, but where there is a fundamental cleavage between us is in the method to be employed. We believe that if you want to get goods off the roads and on to rail the answer is, as Lord Beeching has put it, to make the railways more efficient and more competitive with road transport. Unfortunately, the Party opposite believe in precisely the reverse; they want to get good off the road and on to the rail by penalizing road transport. We believe that by their methods we shall get the worst of all worlds, the worst of all bargains.
Frankly, I am not quite sure how we stand on Lord Merrivale's Amendment, No. 6. I do not know whether he propose to move it; I very much hope he does, and I hope I am in order in saying a word or two on it before he moves it Having read all through the Commons Hansard, I do not think I can remember more than one reference to

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the customer being made by the Government Benches throughout the whole discussion on the Bill. The customer is the one poor wretched chap who does not get a look in on this Bill. All that matters is that the Government should be able to control the carriage of goods by road and rail, and that there should be a massive increase in public ownership, as the former Minister described it. Nobody has a soft spot in their heart for the poor wretched customer except the Conservative Party. It is for that reason that I hope my noble friend will move his Amendment in the strongest possible way.
The last point about which I should like to ask the Minister is this. Amendment No. 5 relates to sub-paragraph (ii) of paragraph (a):
"to secure that, in the provision of those services, goods are carried by rail whenever such carriage is efficient and economic."
The specific question I want to ask the noble Lord is this: who is going to decide whether the carriage by rail or road is efficient and economic? When he has said who is going to decide, because obviously somebody has to, I should be much obliged if he would tell me how they are going to decide, bearing in mind that British Railways over the last year has made a loss of something like £150 million of taxpayers' money and remembering too that they are unable to pinpoint where they have lost it. How on earth do they think they are going to be able to decide whether a particular branch line or line of goods is efficient and economic? I cannot see how it is to be done.
We shall come later in the Bill to discuss accountancy, and I hope my noble friends on the Front Bench will put down Amendments similar to those put down in the Commons asking for very stringent accountancy by the various bodies. At the moment, I should be obliged to the noble Lord, Lord Winterbottom, if he would explain who is going to decide when rail is efficient and economic and how they are going to do it.
LORD WAKEFIELD OF KENDAL: The noble Lord, to whom I listened most carefully, said, if I understood him aright, that the Railways Board would whole ale the goods and the Freight Corporation would do the retailing. He
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went on to say that this was because, by individual quotations, the railways probably made substantial losses. If the Railways Board are going to make quotations it seems to me that they will make them based on operational costs and appropriate overhead charges, in order that they may recover their overheads. If great losses have been made it means that the wholesale quotations made by the Railways Board must therefore be substantially higher than they are at present. If goods are to be put on the railway and not sent by road, this means that road prices have to go up. One cannot get away from that.
Under a later Part of this Bill there are to be restrictions on the private haulier, so that it will not be possible for him to send his goods as cheaply as is usual. It seems to me as clear as daylight that this Bill is bound to put up the costs of the transporting of goods, particularly over long distances. And that, inevitably, is going to hurt our export trade, because the costs of getting the goods to the ports are going up. Costs are a vital part of the end-product selling costs, and I cannot see how, by removing competition and by forcing prices up in this way (because that is the intention of this Bill in this respect, otherwise the Bill is meaningless) industry in this country can possibly be helped how our work will be mode more economic, or how our end products are going to be sold more cheaply.
I listened carefully to what the noble Lord had to say, hoping that I might hear from him something that would encourage me to give support to this Bill. But from what I heard him say I cannot possibly see how this Bill can help industry yet this, as I understand it, is the whole purpose of the Bill.
5.3 p.m.
LORD NUGENT OF GUILDFORD: This debate has already covered quite a considerable range in the discussion of the merits of the Government's proposal to set up the National Freight Corporation, and as each speaker gets to his feet the task for Lord Hughes has become heavier, because even those behind him seem unable to support him on this issue. It is not often that I find myself on the same side as my old friend Lord Popplewell, and although he doubts

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our sincerity I can assure him that I am just as sincere as he is in this particular matter. I feel most strongly that the Government are making a serious mistake in their proposal here.
The only point on which I would differ from the noble Lord, Lord Popplewell, is in regard to sundries. I suggest that it would be a sensible thing to combine the sundries with the parcels service in the British Road Services under the Transport Holding Company. I expect that noble Lords will have noticed that our Amendments to Clauses 4 and 5 provide for just that: that that is transferred, whereas the freightliner service is not. I quite agree with the points made by the noble Lord, Lord Winterbottom, with regard to the sundries service: that it is in a highly unsatisfactory state, and that, by combining these two services, this large loss could gradually be eliminated; although I am sure that if we had had our experts from the railways here they would tell us that sundries and parcels are always a "headache" as a service. They are extremely difficult to manage. Certainly combination would improve them.
I listened with the greatest interest to the noble Lord, Lord Winterbottom, detailing the arguments in favour of setting up the National Freight Corporation, and, if I may say so, I think he did it most persuasively. It was persuasively set out in the White Paper, in paragraphs 13 to 33. It makes an attractive picture. Although some of my friends doubt whether the Corporation, as conceived, would have a successful future, I think it might well do so, especially if it has as its chairman Sir Reginald Wilson, as indeed is proposed.
But what is not discussed in the White Paper, or by Ministers is the sort of mess that this leaves behind it in the railways. If the pros and the cons of this drastic surgery to British Railways had been discussed in the White Paper with the same analysis and freedom as the pros and cons of the N.F.C. have been set out, I think the Government might well have reached a different answer. The consolation of being left with 49 per cent. of the shares in the N.F.C. really is no more than this: that it gives them some substance in the trading side of it, but control has gone, and the railways
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are then left only with freight originating by rail.
We know from the authoritative speeches to which my noble friend Lord Windlesham referred, of the three noble Lords who have held office as Chairman of British Railways or of the British Transport Commission, how serious the implications are, or would be, for British Railways if this scheme proceeded. I believe, although I do not expect that noble Lords opposite will confirm this, that there were weighty differences among Ministers last autumn, when this matter was before the Cabinet, and before the decision was finally made, and that some Ministers were opposed to the setting up of the N.F.C. In passing, I make the point that the White Paper would have been more in the tradition of Government White Papers if it had been a little more impartial, setting out the pros and cons on both sides. But, certainly for myself, I suggest that if the setting up of the Freight Corporation were at the expense of permanently weakening British Railways it would be too high a price to pay. This is the gravamen of the case we are putting to noble Lords on the Government Benches. There is substantial evidence that cutting away the freight railway services will seriously affect British Railways.
Noble Lords will have studied, as well as heard, the speeches made by the three noble Lords here during the Second Reading debate, but I would suggest that the advice which Sir Stanley Raymond gave, as Chairman of British Railways, was exceptionally cogent. Here was a man, a professional, who has had an outstandingly successful career in railways, who was prepared to sacrifice his professional career rather than accept the decision of the Minister that this should go ahead. Therefore he was dismissed. A man in that position would not lightly do that unless he was utterly convinced that this really was disastrous for the service that he was serving.
I would think that the simple point that I can understand, and I am sure all of us can understand, which has been referred to by several noble Lords, is that it is a disastrous move to separate production from marketing. I listened with great interest to the noble Lord, Lord Winterbottom, explaining to us why

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this was not so, and controverting the arguments which were so cogently put forward by the noble Lord, Lord Beeching, on Second Reading. Really what Lord Winterbottom was saying to us was that British Railways tended to be a weak seller, that they were poor retailers, and that this was probably one of the reasons for the very big trading loss that they annually turn in. I would not disagree with that; but it seemed to me a piece of very special pleading. My noble friend Lord Windlesham quoted from one of the pieces in the Prices and Incomes Report on British Railways' application for higher charges. I propose to quote from another, because this really is bang on the point.
Of course, the answer to Lord Winter-bottom's argument, which was very ingeniously put forward, is that the railways have always concentrated traditionally on the operating side. This comes from the pre-First World War days when they were the monopoly transport service of the country. At that time there was no competition, and Parliament therefore laid on them enormous obligations of common carrier, and so on, and all kinds of safeguards in order to ensure that their services did not exploit the consumer. Therefore, the whole attention of the managers of the railways was devoted to the operation, and this attitude of mind still persists and is all too strong in the railways, as those of us who know the railways know well.
What the railways desperately need, of course, is a complete change of attitude. What they need is to attract bright young executives who are market-orientated experts in selling things as well as in operating. But if the Government propose to take away from the railways the most attractive part of the whole service which would attract just such men as this, what hope is left for them? Lord Winterbottom, by his very argument, is condemning the railways for ever to be weak sellers. They will never attract top-class men unless they have a good prospect, a real winner, which these liner services are.
Perhaps I may read paragraph 60 of the Prices and Incomes Board report, because I think that it is bang on the point. It says:
"Because of the division between the operating and the sales side there is little check on the service provided once it has been
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sold. While customer complaints are received at local levels the present organisation does not provide control of the overall quality of freight services. More communication between operating staffs and marketing staffs should increase the influence of the customer on the service provided."
This is the whole point, and I urge noble Lords on the Government Benches opposite to take note of it. If they proceed with the policy they are advocating, they will be condemning the railways to the state of difficulty and defeatism that they have been faced with for the last 20 years—perhaps for the last 40 years. We all want to see them get out of this annual loss-making of £150 million, but all the reconstruction that is proposed in this Bill—the capital reconstruction, the management reconstruction—will not get them out of that situation unless they can get into the organisation some really able marketing executives who will combine with the operating executives to make a first-class commercial business, to sell not only the liner services but all the lest of the services. Whether they are passenger services, freight services, or any other service, they need to be properly sold, and properly related one to the other, so that the customer gets satisfaction.
I should be prepared to concede that if the Government were to press on with this the liner service would probably derive some temporary benefit from the infusion of some of the operatives from the Transport Holding Company, who are obviously very much better at marketing services than British Railways are, but I would emphasise that noble Lords on the Government Benches opposite—and indeed all of us—are responsible not only for the liner services but for British Railways as well. We are concerned to see them both go ahead, and you simply cannot ignore what you are going to leave if you chop off this (as it has been called by Sir Stanley Raymond) "jewel from the crown of British Railways". What is left is going to be dangerously debilitated.
Let me say this in passing, because I have perhaps painted a rather drab picture of what the railways have been doing: they have been doing, in fact, rather well with the liner services: their report for 1967 tells us they were carrying by the end of 1967 4,200 containers per year compared with 1,200 containers the year before. So they have gone up

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between three and four times during the year, and they have made impressive progress not only with the business coming from the Transport Holding Company but also with the private haulier from whom they got no less than a quarter of their business. So the whole freightliner system is already beginning to develop very well in British Railways' hands and is showing every prospect not only of developing well in itself, but of lifting the whole morale of the railways to the kind of tone that we would all wish to see.
Having mentioned the private haulier perhaps I should also mention that there is a feeling among the industry and private hauliers that if the N.F.C. is set up and they can, of course, still use the liner service with the private haulage, private industry will be at a disadvantage with the rates that are quoted for the all-in service of the N.F.C. I should hope that would not be so, but I make the point and it is one that the noble Lord, Lord Robertson of Oakridge, made cogently on Second Reading. British Railways do not wish to be put in an invidious position vis-à-vis their customers, and industry is their customer. They want to have good relations; they want to be trusted; they want to be friendly; they do not want to have invidious situations, situations which handicap their good relations with their customers.
So we have covered the field. I think we should have won the argument. Even the noble Lord, Lord Hughes, with his expert voice, would have found it very difficult to answer all the points. On all the intrinsic merits of the argument, it would be too high a price to pay to set up the National Freight Corporation and to do lasting damage to British Railways, a service that we are all concerned with. We all have to pay for the deficit, we all use the service in one way or another, and I say to him most cogently: this is too high a price to pay, and I hope he will accept our arguments and not proceed with the proposal to set up the National Freight Corporation.
5.18 p.m.
LORD HUGHES: I confess that I do not view this debate in exactly the same way as the noble Lord, Lord Nugent of Guildford, is pressing me to view it,
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because, quite honestly, I felt that I had been presented with a very much easier task than I should have anticipated a week ago, and it is very largely because I have been listening to what has been said in the debate. I should like to pick up what the noble Lord, Lord Nugent, said on three occasions during his speech: that setting up the National Freight Corporation would be too high a price to pay if it seriously damaged the railways.
Would it be wrong of me to remind your Lordships of the allegation which has been made against the Government time and time again in relation to this Transport Bill generally: that the object of the Bill is to benefit the railways at the expense of any other section of the community, whether it be the community generally or the road transport side of the industry, or the private user side of transport? The Government accept that one of the objects of this Bill is to help make the railways more efficient and to help take them out of the position of deficit year after year. We have also made it clear that we want to do so by improving efficiency.
I understand the point of view (although I do not agree with it) of my noble friend Lord Popplewell. I was a little surprised when I heard the noble Lord, Lord Nugent, go on record as saying that he was on the same side as Lord Popplewell, with the exception of his remarks on freight sundries. My noble friend Lord Popplewell's objections to the Government's proposals were that they do not integrate enough. His basic objection was that he thought it was not a sufficiently Socialist method. Although that might be useful as a debating point, I should not have thought that the noble Lord, Lord Nugent, and his friends on the Benches opposite were objecting to the Bill because they thought it was not sufficiently Socialist.
LORD NUGENT OF GUILDFORD: Perhaps I can help the noble Lord. I was not really objecting on that account. My arguments were on the intrinsic merits of the matter. In fact, until now we have had a debate which has been dealing entirely with those matters rather than with the political aspects.
LORD HUGHES: It was because I proposed to deal briefly with the political

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argument brought forward by my noble friend Lord Popplewell that I wished to draw attention to what he had argued. I wanted to point out that the noble Lord, Lord Nugent, was in fact agreeing with very little of my noble friend, Lord Popplewell's arguments. I hope to persuade my noble friend Lord Popplewell that if there is a Division he will best serve the interests of the Railways by withdrawing his somewhat tentative suggestion that, if there was a Division, he would abstain.
I accept that the Government wish to help the railways, but we wish to help them in the most effective way. We are trying to bring into the National Freight Corporation commercial methods of exploiting, the services which exist, and which will continue to exist. The noble Lord, Lord Nugent, said that the Government had made little mention of the mess left behind in the railways. The only mess to which he then made subsequent reference was that the railways would be left only with traffic which was dealt with wholly by the railways. The noble Lord, Lord Beeching, not only in this debate but in reference to the operation of the railways in general, has said that the brightest development has been that of the freightliner services and that under the Beeching régime the ultimate profitability of the railways was to rest on the efficient use of those services. It is at the very heart of the Government's proposals that the freightliner service should be made as efficient as humanly as possible. We agree with Lord Beeching that this is the best prospect for the railways to get a proper return on the services.
My noble friend Lord Winterbottom put the matter very well when he separated the production of goods or services from selling. I thought the analogy that one should regard the railways as a wholesaler and the Freight Corporation as the retailer was exceedingly apt. The thought passed through my mind as to what would have been the attitude of noble Lords opposite if the Tartan Arrow service were not at present a part of the nationalised undertaking. If Tartan Arrow had remained a privately owned service, would noble Lords opposite have argued that it was essential to the proper operation of the freightliner service that the marketing and the services undertaken by Tartan Arrow as a separate operation must come under the control of the rail-
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ways? Are they to-day arguing (I do not think that the noble Lord Lord Nugent, said so in reference to tae fact that 25 per cent. of traffic originates from private hauliers) that this can be done efficiently only if the selling of that service also remains in the hands of the railways?
The Government's case is that there are two jobs to be done: one, the operation of the railways and the other, the operation of the marketing services, which will equip the railways to make the best use of the services which they are providing. It is accepted by all noble Lords who have spoken, both on Second Reading and in Committee to-day, that the railways are expert in the job of operating a railway. The noble Lord, Lord Nugent, conceded that on the matter of marketing they were not so expert. He suggested that the way to deal with this was for the railways to throw completely overboard their present attitude, which they have had year after year, and to attract into service a completely new type of employee to concentrate on the marketing of these services. It is precisely because the Government believe that this is a different task that they are seeking to place it in the hands of the N.F.C. We believe that the railways will benefit from an integrated approach to the marketing of the services. Whether it be the road part or the railways part, we believe that it is the best way to do the job.
I have not said much about the remarks of the noble Lord, Lord Wade. He will forgive me if I say that, basically, the purpose of the Liberal Amendments was very similar to that of the Conservative Amendments relating to the freightliner service, although admittedly they went further. There are a number of technical defects in the Liberal Amendments, but that in itself is no reason for speaking against them since they could have been remedied at the next stage. I am regarding this matter as if the Liberal Amendments were seeking to achieve broadly the same purpose as the Conservative Amendments. I doubt very much whether, at the end of the day, the Liberals would have wished to press a proposal that the sundries traffic should remain with the railways.
I suggest to my noble friend Lord Popplewell that if we are to have a publicly owned and operated service, it is

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in everybody's interest—in the interests of the railways, of road transport and of the consumers—that it should be an efficient service. What is being proposed in the Bill is a different approach from what has been done before. I remind your Lordships who have referred to what was said by the noble Lord, Lord Robertson, and the noble Lord, Lord Beeching, that there was another expert in this field who spoke on Second Reading—the noble Lord, Lord Hurcomb. He had an advantage which had not been enjoyed by the other two noble Lords in that he had been Chairman of an integrated service. I have read again what the noble Lord, Lord Hurcomb, said on Second Reading. Although it is true that he expressed some doubts about this method of dealing with the service, he by no means said that he was against it. It may be said that he either damned it with faint praise or praised it with faint damns; but he said that he was not prepared to say that it would not work, or would not work well. I think that the "faint damns" came in when he added that to-day almost anything can be made to work.
But the noble Lord, Lord Hurcomb, was wrong in that one respect, because it is clear that the present system has not been made to work, or we should not have had these enormous deficits. It is because we in the Government believe this that we ask both the Liberal and Conservative Parties, if they are genuinely interested in having the best service to be provided for the community, if they are genuinely anxious to help the railways to get back into the position of being a profit-earning service not to press these Amendments. I used the words "if they believe", but I was not suggesting that noble Lords are not actuated by the same motives as Her Majesty's Government in this matter. I am proceeding on the basis that we are all anxious to get the best possible transport service for the community. It is because I am fundamentally in disagreement with noble Lords opposite when they say that this proposal will not produce it, that I ask your Lordships not to accept these Amendments.
We want to help the railways. We want to help the transport industry. We want to help the community. But all
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this must be done at the same time and it will not be accomplished if we seek to weaken the Freight Corporation in their objective of getting the cheapest transport possible and of using the best services that are available, and if we seek to cripple them in the best use that can be made of the freightliner service.
LORD ST. HELENS: As we are in Committee and considering points of detail, I wonder whether the Minister would be kind enough to answer the question I asked him. On page 1 of the Bill, at lines 19 and 20, it says:
"… whenever such carriage is efficient and economic; …"
Would the noble Lord tell me how that is going to be decided and who is going to decide it?
LORD HUGHES: As was said during the Second Reading debate, when we discussed the procedure that would operate if someone wanted the traffic to go by rail and someone else wanted it to go by road, there will be an examination of individual cases. It will not be for the railways or for the road haulier to say. It will be an independent body to whom appeal is lodged who will say what is best in particular cases. There must be many cases where it will be perfectly obvious that it would be ridiculous to attempt to send goods by rail, and there will be other cases where it will be equally obvious that to send such goods by rail would be the more efficient way.
I am not prepared to say at this stage whether these will be a minority or a majority, but there is no doubt that over a comparatively short period of working a pattern will emerge of the best and most efficient ways of providing a service. I do not think that there will be any occasion for complaint, except in marginal cases, where it may be just a matter of judgment whether a decision goes one way or the other. In these cases, I must admit, there may be someone who will have a sense of grievance and who will say that the decision has gone the wrong way.
LORD ST. HELENS: I am extremely grateful to the Minister for his thorough and courteous explanation. May I just ask him one more question? Who is going to decide? Will the Minister set up some tribunal? It is because there is

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nothing in the Bill about who is to make this decision that we on this side are wondering what will happen.
LORD HUGHES: It is a body the exact nature of which escapes me for the moment, but perhaps before long the opportunity will be available to me to answer the noble Lord's perfectly reasonable question. I have a suspicion that the noble Lord, Lord Windlesham, is going to rise again—I thought that he was making notes for the purpose of getting up again. I have been out of order before in replying to questions of this kind, and I do not mind being out of order again.
LORD WINDLESHAM: If it would help the noble Lord, I would say that we are going to wait until we get to Clause 4 and say a word or two on this matter when we come to our own Amendment.
LORD HUGHES: Perhaps it would be convenient to the noble Lord, Lord St. Helens, if, when we reach Clause 4, I gave him the answer which at the present moment eludes me.
LORD WADE: I am sure that we all want as efficient a transport system as possible, but I am not convinced by the noble Lord, Lord Hughes. May I apologise to noble Lords who came prepared to speak on each of these Amendments to Clause 1? My intention was to be as helpful as possible to your Lordships in suggesting that we should discuss the whole clause, knowing from experience that the first Amendment on a great Bill like this tends to be a debate of a general nature. But I am sorry that any noble Lord should have spent the weekend preparing speeches on each Amendment and has been disappointed.
There are many points that have not been answered on general issues. For example, we are told that the N.F.C. will try to get as much freight as possible on to the railways. But in some parts of the British Isles, such as Wales, where there are very few railways left, it seems doubtful whether the Corporation are the right kind of body to deal with that kind of problem. I referred in my speech to the Freight Integration Board. If that matter is not dealt with during the course of discussions on Part I of the Bill, perhaps it could be raised again on Report.
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I reserve my position so far as this is concerned, and I may put down another Amendment. It is clear that the crux of this debate has been the freightliner service. I indicated at the beginning that if that appeared to be the view of many noble Lords, I should be prepared to advise my noble friends not to press this Amendment. On the understanding that Amendment No. 9 is to be moved, and that there will be an opportunity of expressing an opinion on that Amendment, I beg leave to withdraw Amendment No. 1.
Amendment, by leave, withdrawn.
5.37 p.m.
LORD MERRIVALE LORD MERRIVALE moved Amendment No. 6:
Page 1, line 20, at the end insert ("by reference to the needs of the person for whom the goods in question are to be carried and to the nature of the goods")
The noble Lord said: I beg to move the Amendment standing in my name on the Marshalled List. I am grateful to my noble friend Lord St. Helens for the welcome he gave to my Amendment be for I had even moved it. It also gives me great pleasure to welcome his support of the Transport Users' Joint Committee on whose behalf I put down this Amendment. This Committee represents the Association of British Chambers of Commerce, the British Shipping Council, the Confederation of British Industry, the National Traders' Traffic Organisation, the Traders Co-ordinating Committee on Transport and the Traders' Road Transport Association. I am sure that the Committee will be grateful for the noble Lord's support.
The purpose of this Amendment is to ensure that when the National Freight Corporation, in conjunction with the railways, secure that goods are carried by rail, it will be not only whenever such carriage is efficient and economic, but also by reference to the needs of the person for whom the goods are to be carried and by reference to the nature of the goods. I think that this is an important Amendment, for as the Bill is at present drafted the consigner of goods may lose his right to determine whether or not traffic should go by rail without there being any mention as to how the carriage by rail is to be judged as efficient and economic.
My noble friend Lord St. Helens raised this point, but I do not think that the noble Lord, Lord Hughes, answered his inquiry as to how this question would be judged. There may be a particular reason related to a specific business for wishing to send traffic by road.
To illustrate my point, I should like to refer to two cases. The first is that of a Scottish paper mill who complained that reels of paper sent by rail had been damaged at the edges owing to the extra handling, and often owing to the lack of proper equipment, on the railways. The second case is that of a Peterborough engineering firm who said that it was possible to cut down on protective packing when precision machinery was sent by lorry, and that effected considerable savings. They also sent the machinery by lorry because tight delivery schedules were called for and they needed the flexibility of road transport.
I believe it is essential that the National Freight Corporation should relate their decision about dispatching by rail to the needs of the consignor and to the nature of the goods, and that that should be specifically stated in the Bill. The position of the freight transport user is of paramount importance. The words "efficient and economic" should be clearly related to the overall economy of the transaction—that is, the economy of the transport agency—plus the economy of the user's business; and they should not just be related to the efficiency and economy of the transport service provided by the railways. We should bear in mind that every ton of freight is, in effect, provided by the users and if there were no users there would be no need for a transport service. So it is essential that the users' interests are very carefully considered. I beg to move.
LORD HAWKE: I think my noble friend's Amendment has got to the real heart of this Bill, because there has been too much emphasis placed in the past on speed as against certainty in regard to freight. I believe that in the vast majority of cases the user wants to be dead certain of when his package is going to arrive at the other end. It will very often not matter terribly to him whether it arrives in 24 hours, 48 hours or even 72 hours, but he must know with absolute certainty that it will arrive within that
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period. I do not think that the words "efficient and economic" in the Bill really cover that point, because it would be perfectly possible for the railway rate to be economic compared with the road rate, and it might be impossible to deny that the railway service was efficient. But, at the same time, I am afraid that only too often it is impossible to say precisely when the railway service is going to deliver the goods at the other end; and that is the real nub and crux of so much of this problem of moving freight. There ought to be something put into the Bill by which the consumer could have some choice in the matter, because as I read the Bill at the moment it seems that the choice is entirely in the hands of the National Freight Corporation.
LORD ST. HELENS: I agree fully with what my noble friends have said, but it seems to me that the Amendment would read better if it said:
"by reference to the needs of the persons for whom the goods in question are to be carried"
because there are two persons affected here. There is the sender of the goods, the merchant, and then there is the consignee who wishes to receive the goods at the other end. The needs of both of those people should be considered, and if this Amendment is accepted that should be written into the Bill at a later stage. Also, I am very glad that my noble friend Lord Merrivale mentioned the nature of the goods. I think we come on to that much later in the Bill, but if this Amendment were accepted it would apply very much to agricultural and perishable goods.
LORD WINTERBOTTOM: In Amendment No. 6 and Amendment No. 25 the noble Lord, Lord Merrivale, is very rightly setting out to protect the interests of the individual consumer. But I feel that many of his fears are groundless. He wishes to amend the Bill to read:
"to secure that, in the provision of those services, goods are carried by rail whenever such carriage is efficient and economic by reference to the needs of the person for whom the goods in question are to be carried and to the nature of the goods".
He mentioned problems which two different firms were facing in this field, and rather implied that if either decided to turn to the Freight Corporation for a

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tender for their transport requirements they would be forced to accept whatever form of transport the Freight Corporation decided to offer them. But it must be remembered that we are not setting up one vast monopoly for the transport of freight and general merchandise. The National Freight Corporation is one particular supplier of transport to which the individual firm can turn. The firm can provide its own transport or, alternatively, can turn to private transport contractors. We are not setting out to create a vast transport monopoly and if, after considering the alternatives, the individual firm decided to turn to the Freight Corporation it would naturally negotiate terms and conditions with that Corporation.
I assume that the paper manufacturer would say, "We should be delighted to use your services, provided always that the paper is sent by road as we have found in practice that the transfer of paper by train causes damage". That would fall within the criteria laid down for the Freight Corporation that, if goods are to be sent by rail as a decision of the Freight Corporation, that decision must ensure that the goods are transported as quickly, as cheaply and as efficiently as they would have been had they been sent by road.
So the Government believe that the simple words "efficient and economic" cover the points raised by the noble Lord, and that the additional wording in the Amendment might make the Corporation and their subsidiaries unduly cautious about using their own experience to arrange the transport of goods offered to them in the most efficient and economic way, using rail whenever appropriate. I think the House as a whole is agreed that, because of the problems that the railways are facing, general merchandise should be directed towards them, provided always that the transport of those goods by rail is at least as
good as the alternative of sending them by road. So while we support the intention behind the noble Lord's proposal, we think that the existing wording is entirely adequate and that if we extended the wording the additional burdens placed on the Freight Corporation might have an inhibiting effect on their work, thereby limiting their success in directing general merchandise from the roads to the railways.
LORD MERRIVALE: I am grateful to the noble Lord, Lord Winterbottom, for his remarks, and particularly for saying that he supports the intention behind my Amendment. But if the Government support the intention behind it, then the words should be included in the Bill. I do not feel that it would affect thy; work of the National Freight Corporation if regard had to be paid to the needs of the individual and to the nature of the goods. I think it would be a good thing if these words were included in the Bill. The noble Lord, Lord Winterbottom, said: "Take the case of the paper mill. They would consult with the N.F.C., and one would see how those consultations proceeded". If these words were included in the Bill then I think the N.F.C. would be more favourably disposed to go into the reasons why the paper mill may wish their goods to go not by rail but by road.
I should like to say that I am most grateful to my noble friend Lord Hawke for his support on this Amendment, and also to my noble friend Lord St. Helens for again reiterating his support. I take his point with regard to the question of changing at a later date, if this Amendment is agreed to, the word "person" to "persons". With those few remarks I propose to press the Amendment.
5.56 p.m.
On Question, Whether the said Amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 134, Not-Contents, 67.

CONTENTS

Aberdare, L.

Atholl, D.

Berkeley, Bs.

Aberdeen and Temair, L.

Auckland, L.

Bessborough, E.

Ailwyn, L.

Audley, Bs.

Birdwood, L.

Albemarle, E.

Bannerman of Kildonan, L.

Bledisloe, V.

Aldington, L.

Barnard, L.

Boston, L.

Allerton, L.

Barrington, V.

Brentford, V.

Amherst, E.

Beaumont of Whitley, L.

Bridgeman, V.

Amory, V.

Belstead, L.

Brooke of Cumnor, L

Brooke of Ystradfellte, Bs.

Henley, L.

Poltimore, L.

Buccleuch and Queensberry, D.

Hives, L.

Rankeillour, L.

Carrington, L.

Horsbrugh, Bs.

Rathcavan, L.

Chesham, L.

Howard of Glossop, L.

Redesdale, L.

Clitheroe, L.

Ilford, L.

Redmayne, L.

Clwyd, L.

Inchyra, L.

Rockley, L.

Colgrain, L.

Inglewood, L.

Ruthven of Freeland, Ly.

Conesford, L.

Ironside, L.

Sackville, L.

Cork and Orrery, E.

Jellicoe, E.

St. Aldwyn, E.

Cornwallis, L.

Jessel, L.

St. Helens, L.

Cottesloe, L.

Kilmany, L.

St. Oswald, L.

Craigavon, V.

Kinloss, Ly.

Salisbury, M.

Crathorne, L.

Kinnoull, E.

Sanderson of Ayot, L.

Cromartie, E.

Lansdowne, M.

Sandford, L.

Cullen of Ashbourne, L.

Latymer, L.

Sandys, L.

Daventry, V.

Leigh, L.

Sempill, Ly.

Denham, L. [Teller.]

Lindsey and Abingdon, E.

Somers, L.

Digby, L.

Lothian, M.

Stonehaven, V.

Dilhorne, V.

Lovat, L.

Strange, L.

Drumalbyn, L.

Luke, L.

Strange of Knokin, Bs.

Ebbisham, L.

Macpherson of Drumochter, L.

Strathcarron, L.

Effingham, E.

Malmesbury, E.

Strathclyde, L.

Elliot of Harwood, Bs.

Mar, E.

Stuart of Findhorn, V.

Emmet of Amberley, Bs.

Margadale, L.

Teviot, L.

Erroll of Hale, L.

Merrivale, L. [Teller.]

Teynham, L.

Falkland, V.

Milverton, L.

Thurlow, L.

Falmouth, V.

Molson, L.

Townshend, M.

Ferrier, L.

Monck, L.

Trefgarne, L.

Forster of Harraby, L.

Monckton of Brenchley, V.

Tweedsmuir, L.

Fortescue, E.

Monk-Bretton, L.

Verulam, E.

Fraser of Lonsdale, L.

Mottistone, L.

Vivian, L.

Geddes, L.

Mowbray and Stourton, L.

Wade, L.

Goschen, V.

Moyne, L.

Wakefield of Kendal, L.

Greenway, L.

Napier and Ettrick, L.

Windlesham, L.

Grenfell, L.

Nelson of Stafford, L.

Wrottesley, L.

Grimston of Westbury, L.

Newton, L.

Wynford, L.

Hawke, L.

Nugent of Guildford, L.

NOT-CONTENTS

Addison, V.

Hilton of Upton, L. [Teller.]

Rowley, L.

Archibald, L.

Hughes, L.

Royle, L.

Beswick, L.

Kahn, L.

St. Davids, V.

Blyton, L.

Kennet, L.

Samuel, V.

Bowles, L.

Kilbracken, L.

Serota, Bs.

Brockway, L.

Kirkwood, L.

Shackleton, L.

Brown, L.

Latham, L.

Silkin, L.

Burden, L.

Leatherland, L.

Snow, L.

Chalfont, L.

Lindgren, L.

Sorensen, L.

Champion, L.

Llewelyn-Davies of Hastoe, Bs.

Stonham, L.

Crook, L.

Longford, E.

Strabolgi, L.

Douglass of Cleveland, L.

Lucas of Chilworth, L.

Strang, L.

Evans of Hungershall, L.

McLeavy, L.

Summerskill, Bs.

Faringdon, L.

MacLeod of Fuinary, L.

Tavlor of Mansfield, L.

Fiske, L.

Maelor, L.

Walston, L.

Gaitskell, Bs.

Manchester, L. Bp.

Wells-Pestell, L.

Gardiner, L. (L. Chancellor.)

Mitchison, L.

Williamson, L.

Gifford, L.

Morrison, L.

Willis, L.

Granville of Eye, L.

Moyle, L.

Winterbottom, L.

Granville-West, L.

Noel-Buxton, L.

Wootton of Abinger, Bs.

Hall, V.

Peddie, L.

Wright of Ashton under Lyne, L.

Hanworth, V.

Phillips, Bs. [Teller.]

Henderson, L.

Popplewell, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
Clause 1, as amended, agreed to.
Clauses 2 and 3 agreed to.
Clause 4 [Transfer to Freight Corporation of certain securities, rights and liabilities]:
6.5 p.m.
LORD WINDLESHAM: The debate on this clause has already taken place. The noble Lord, Lord Hughes, wound up when he replied to Amendment No. 1 in the name of the noble Lord, Lord Wade. I must say that we on these Benches found the noble Lord's reply unconvincing. He said that

1169
the Government were trying to benefit British Railways by improving their efficiency. We do not doubt that; we accept that that is the Government's intention. What we question is the wisdom of the proposed relationship between the National Freight Corporation and the British Railways Board. The noble Lord took consolation from the fact that on Second Reading the noble Lord, Lord Hurcomb, had not rejected the proposal out of hand; he had just spoken unenthusiastically about it. I do not want to go over the arguments again at this stage; I think they have been well ventilated in the debate that we have had on Amendment No. 1. I therefore beg to move Amendment No. 9.
Amendment moved—
Page 4, line 42, leave out paragraph (b),—(Lord Windlesham.)
LORD HUGHES: The noble Lord, Lord Windlesham, has fairly and courteously not attempted to go over the ground again and it would be wrong if I did otherwise. I should not have got up at all if it were not that I had promised to say something more on the point raised by the noble Lord, Lord St. Helens, on Clause 1. Under Clause 1(a)(ii), it is for the National Freight Corporation to decide in relation to any freight consigned to it whether it is efficient and economic to carry it by rail and it must be the judge in that matter; but, if it is to retain the traffic, the National Freight Corporation must carry it in a way that satisfies its customers, the users of transport. If the customers are dissatisfied, they have the remedy of transferring this freight to private hauliers, or at least of attempting to do so. For distances less than 100 miles, the private haulier will have complete freedom to carry except for a few specified bulk commodities. For distances over 100 miles, the haulier must apply for a special authorisation to the licensing authority.
These are the words that escaped my mind. If it had been some grand name I should have remembered it. It was just "the licensing authority". If the British Railways Board or the National Freight Corporation object to such an application the licensing authority must decide whether it is as efficient and economic for the freight to be carried by rail. Briefly, therefore, although the
1170
National Freight Corporation must exercise its own judgment in the first instance, at the end of the day it is subject to how this works out in practice because it must carry its customers with it. I hope the noble Lord will now find that the answer I have given is logical. Whether he finds it acceptable is a different matter.
LORD ST. HELENS: I am much obliged to the noble Lord for the courteous and very full answer that he has given. Would he confirm that the Minister has represeentatives on all these bodies who are going to make the decision, and that therefore the Minister's influence on behalf of the National Freight Corporation and on behalf of turning away goods from private transport to public transport will go on the whole way through and that the Minister is now represented on the licensing body?
LORD HUGHES: When it gets to the individual application, on individual cases, it is the licensing authority whose decision counts. There will be no influence brought by representatives of the Minister in these cases.
LORD POPPLEWELL: Is it not correct that under Clause 80, as and when the licensing authority arrive at their decision, if a person feels aggrieved he has a right to appeal to the Minister and that an inquiry will be held?
LORD HAWKE: Am I right in thinking that the Amendment of my noble friend Lord Merrivale has set the matter right? Because the rule as enunciated by the noble Lord, Lord Hughes, would be too ridiculous if it were the case that there was a single consignment. It is all very well if there is a series of consignments, but if there is one consignment, and if the Freight Corporation close to put it on the rail against the wish of the customer I think that the remedy is now provided by the Amendment moved by my noble friend Lord Merrivale.
LORD HUGHES: I do not agree that the Amendment of the noble Lord, Lord Merrivale, has put the matter right; I would say that it has temporarily changed the situation.
6.11 p.m.
On Question, Whether the said Amendment (No. 9) shall be agreed to?

Their Lordships divided: Contents, 135; Not-Contents, 58.

CONTENTS

Aberdare, L.

Emmet of Amberley, Bs.

Mowbray and Stourton, L.

Aberdeen and Temair, M.

Erroll of Hale, L.

Moyne, L.

Ailwyn, L.

Falkland, V.

Moynihan, L.

Airedale, L.

Falmouth, V.

Napier and Ettrick, L.

Albemarle, E.

Ferrier, L.

Nelson of Stafford, L.

Allerton, L.

Fisher, L.

Newton, L.

Amherst, E.

Forster of Harraby, L.

Nugent of Guildford, L.

Amory, V.

Fortescue, E.

Poltimore, L.

Atholl, D.

Fraser of Lonsdale, L.

Rankeillour, L.

Auckland, L.

Geddes, L.

Rathcavan, L.

Audley, Bs.

Goschen, V. [Teller.]

Redesdale, L.

Bannerman of Kildonan, L.

Gray, L.

Redmayne, L.

Barnard, L.

Greenway, L.

Rockley, L.

Barrington, V.

Grenfell, L.

Rootes, L.

Beaumont of Whitley, L.

Grimston of Westbury, L.

Ruthven of Freeland, Ly.

Belstead, L.

Hawke, L.

Sackville, L.

Berkeley, Bs.

Henley, L.

St. Aldwyn, E. [Teller.]

Bessborough, E.

Hives, L.

St. Helens, L.

Birdwood, L.

Horsbrugh, Bs.

St. Oswald, L.

Bledisloe, V.

Howard of Glossop, L.

Salisbury, M.

Boston, L.

Ilford, L.

Sanderson of Ayot, L.

Brentford, V.

Ironside, L.

Sandford, L.

Bridgeman, V.

Jellicoe, E.

Sandys, L.

Brooke of Cumnor, L.

Jessel, L.

Sempill, Ly.

Brooke of Ystradfellte, Bs.

Kilmany, L.

Somers, L.

Carrington, L.

Kinnoull, E.

Stonehaven, V.

Chesham, L.

Lansdowne, M.

Strang, L.

Clitheroe, L.

Latymer, L.

Strange, L.

Clwyd, L.

Leigh, L.

Strange of Knokin, Bs.

Colgrain, L.

Lindsey and Abingdon, E.

Strathcarron, L.

Conesford, L.

Lothian, M.

Strathclyde, L.

Cork and Orrery, E.

Lovat, L.

Stuart of Findhorn, V.

Cornwallis, L.

Lucas of Chilworth, L.

Teviot, L.

Cottesloe, L.

Luke, L.

Teynham, L.

Craigavon, V.

Malmesbury, E.

Thurlow, L.

Crathorne, L.

Mar, E.

Townshend, M.

Cromartie, E.

Margadale, L.

Trefgarne, L.

Cullen of Ashbourne, L.

Merrivale, L.

Tweedsmuir, L.

Daventry, V.

Mersey, V.

Verulam, E.

Denham, L.

Milverton, L.

Vivian, L.

Digby, L.

Molson, L.

Wade, L.

Dilhorne, V.

Monokton of Brenchley, V.

Wakefield of Kendal, L.

Drumalbyn, L.

Monk Bretton, L.

Windlesham, L.

Ebbisham, L.

Morrison, L.

Wrottesley, L.

Elliot of Harwood, Bs.

Mottistone, L.

Wynford, L.

NOT-CONTENTS

Addison, V.

Hilton of Upton, L. [Teller.]

Rowley, L.

Archibald, L.

Hughes, L.

St. Davids, V.

Beswick, L.

Kahn, L.

Serota, Bs.

Blyton, L.

Kennet, L.

Shackleton, L.

Bowles, L.

Kirkwood, L.

Snow, L.

Brockway, L.

Latham, L.

Sorensen, L.

Burden, L.

Leatherland, L.

Stocks, Bs.

Crook, L.

Lindgren, L.

Stonham, L.

Douglass of Cleveland, L.

Lewelyn-Davies of Hastoe, Bs.

Strabolgi, L.

Evans of Hungershall, L.

Lloyd of Hampstead, L.

Summerskill, Bs.

Faringdon, L.

Longford, E.

Taylor of Mansfield, L.

Fiske, L.

MacLeod of Fuinary, L.

Walston, L.

Gaitskell, Bs.

Macpherson of Drumochter, L.

Wells-Pestell, L.

Gardiner, L. (L. Chancellor.)

Milner of Leeds, L.

Williamson, L.

Gifford, L.

Mitchison, L.

Willingdon, M.

Granville of Eye, L.

Moyle, L.

Winterbottom, L.

Granville-West, L.

Noel-Buxton, L.

Wootton of Abinger, Bs.

Hall, V.

Peddie, L.

Wright of Ashton under Lyne, L.

Hanworth, V.

Phillips, Bs. [Teller.]

Henderson, L.

Rowallan, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
Clause 4, as amended, agreed to.
Schedule 3 agreed to.
Clause 5 [Formation by Railways Board of, and transfer to Freight Corporation of shares in, subsidiary companies]:
LORD WINDLESHAM: Amendments Nos. 10 to 24 are drafting Amendments which are entirely consequential on Amendment No. 9. I beg to move.
Amendments moved—
Page 6, line 7, leave out paragraph (a).
Page 6,line 17, leave out from ("of") to ("the") in line 18.
Page 6,line 22, leave out from ("in") to end of line and insert ("aforesaid").
Page 6,line 27, leave out ("two") and insert ("a").
Page 6,line 28, leave out ("subsidiaries") and insert ("subsidiary").
Page 6,line 28, leave out from ("Board") to end of line.
Page 6,line 29, leave out paragraph (a).
Page 6,line 33, leave out ("the other").
Page 6,line 36, leave out ("(b)").
Page 6,line 37, leave out ("those companies") and insert ("that company").
Page 6,line 38, leave out from ("consultation") to ("with") in line 41.
Page 6,line 47, leave out ("the freightliner company and").
Page 7, line 1, leave out ("respectively").
Page 7,line 3, leave out from ("in") to ("subsection") in line 4.
Page 7,line 8, leave out from beginning to second ("the") in line 9.—(Lord Windlesham.)
LORD HUGHES: That I do not propose to divide the House on these Amendments does not mean that we have been convinced. They stand or fall by Amendment No. 9.
Clause 5, as amended, agreed to.
Clause 6 [The Freight Integration Council]:
6.25 p.m.
LORD MERRIVALE LORD MERRIVALE moved Amendment No. 25:
Page 8, line 17, at end insert—
("( ) not more than two persons, nor less than one, appointed by the Minister after consultation with organisations representative of users of freight transport;").
The noble Lord said: I beg to move Amendment No. 25 standing in my name on the Marshalled List. Its object is to give adequate representation on the
1174
Freight Integration Council to the users of freight transport. This would seem to be a very reasonable objective, since users are the people responsible for the initiation of every single ton of freight transported in this country. Surely they should be in a position to be heard when discussions affecting the major organisation of freight are being carried on.
Paragraph 32 of the While Paper, Transport of Freight, lays down the Council's functions and duties, and I should like to quote two extracts. The first is:
"The Council's primary function will be to review and to report to the Minister periodically or at his specific request on the application and practice of the policy of arrangements for freight integration described in this White Paper."
The paragraph goes on to say:
"The Council will be able to propose measures that it considers would promote the integration of freight transport in the public sector. It would also examine any matters concerning freight integration referred to it by the Chairmen of any of the nationalised transport undertakings."
In view of this statement, I should have thought it essential that on this Council there should be a member representing the interests of the users of freight transport.
On Report stage in another place, the Minister accepted an Amendment which added two members to the Council, one being an employee of the N.F.C. or of the Railways Board and the other a person experienced in the organisation of persons in such employment—I presume that that means somebody in the trade union movement. As matters to be discussed by the Council will include freight integration, it seems to me logical that users should be represented on this body. I think that it would be quite unrealistic and unacceptable for the noble Lord, Lord Hughes, or the noble Lord, Lord Winterbottom, to reply to my plea that under subsection (3) the Minister may, if he thinks fit, appoint any other person to assist the Council in their work for, as stated in the Bill, such a person
"… shall not be or act as a member of the Council."
I hope that I have said enough to convince noble Lords on the Front Bench opposite that it is only right that

1175
the users should be represented on this Council.
LORD WINTERBOTTOM: I am not certain that the noble Lord has considered the implications of paragraph (a) of subsection (2) which lays down that
"The Council shall consist of—

(a) a chairman and not more than four other members appointed by the Minister from among persons appearing to hint to have had wide experience of, and to have shown capacity in, industrial, commercial, financial or economic matters, applied science, or administration"

I should have thought that the qualifications found in these four members on the Council would give a proper consumer representation on that body. I do not see how you have shown capacity in industrial, commercial or economic matters and not had some experience of the consumers' point of view which would be expressed on the Council.
It may be, however, that the noble Lord is right and that these four individuals would not properly represent the point of view of the consumer. However, that is not the last point. Users' interests are already catered for elsewhere in the Bill. Clause 55 provides that the scope of the transport users' consultative committees established by Section 56 of the 1962 Act is to be extended to cover services and facilities provided by the National Freight Corporation and its subsidiaries. The members of these transport users' consultative committees are appointed after consultation with, among others, a wide cross-section of user interests, including the Confederation of British Industry, the Association of British Chambers of Commerce and the National Farmers' Union. In fact, there is elsewhere in the Bill substantial machinery for consumer representation which has been extended by this Bill to the field of freight. I hope that the noble Lord, Lord Merrivale, will be satisfied that in this particular case, at least, the interests of the consumers are properly safeguarded.
LORD MERRIVALE: I thank the noble Lord, Lord Winterbottom, for that reply. I do not intend to press this Amendment this evening, although perhaps another Amendment will be put down in similar terms at a later stage. I am rather surprised that the noble Lord
1176
was not prepared to go a little further to accept the principle of the Amendment, because, as I understand it, a similar Amendment was moved in Committee stage in another place and certain assurances were given. The Minister said that he had certain sympathy for this Amendment, but he feared that if he allowed one or two representatives of the users to be appointed to the Council other bodies would ask to be represented. However, he said that he would look into it. Nothing has emerged from that assurance. I think it is right that the unions and the employees should be represented on this Council, but if the unions and employees are represented I cannot see why there cannot be one or two representatives of the users. I do not propose to press this Amendment but I will have another look at it and maybe put down another Amendment on the Report stage. Meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 6 shall stand part of the Bill?
VISCOUNT BRENTFORD: I wonder whether I might earnestly appeal to the Minister to look at the drafting of Clause 6(2)(d)(i). It is virtually incomprehensible. I only wish that my noble friend Lord Conesford was in his place in order to support my plea, which I am sure he would do with the utmost eloquence. So far as I can make out, it reads like this:
"The Council shall consist of … two members who shall be appointed by the Minister … to represent a substantial number of persons in relevant employment, that is to say, persons who are, or are due on a transfer and vesting by virtue of this Act of any property, rights or liabilities to become, employed by, or by a subsidiary of, the Railways Board or the Freight Corporation."
I find that difficult to understand, and I am sure that the various lay people who will have the necessity of interpreting this clause and matters to be dealt with under it will also find it difficult to understand. I beg the noble Lord to have a look at it before the next stage of the Bill with a view, possibly, to introducing some simplification into the phraseology.
LORD HUGHES: Having followed the wording as the noble Lord read it, I

1177
should say that it seems a perfectly reasonable point of view to be put forward by a layman. As another layman, I feel great sympathy with him. But one of the things that I have discovered in the last three years as a Minister—and no doubt others who have been Ministers have discovered it before me—is that what seems a simple thing for the layman becomes a most complicated thing to put it into Parliamentary language. If it is possible to simplify this I am certain that we shall do so; but having fought many battles on this subject and so far lost them all, I doubt very much whether I shall be on a winner on this occasion.
LORD SOMERS: Would not the noble Lord agree that a great many Parliamentary phrases would be much more simple if only the Parliamentary draftsmen would agree to use the word "if"?
LORD HUGHES: I should not be at all surprised if the draftsman told me that on some occasion in 1843 the courts had determined that it meant something totally different.
Clause 6 agreed to.
Clauses 7 and 8 agreed to.
Clause 9 [Passenger Transport Areas, Authorities and Executives]:
6.37 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 27:
Page 12, line 32, after ("If") insert ("after local government has been reorganised in the light of the Report of the Royal Commission on Local Government").
The noble Lord said: I beg to move the Amendment standing in the names of my noble friends and myself. I would draw the attention of my noble friend Lord Somers to the wording which starts this Part of the Bill. With this Amendment it would read:
"If after local government has been re-organised in the light of the Report of the Royal Commission on Local Government".
the Minister considers it expedient, then he can by Order set up a Passenger Transport Area.
This Amendment is perhaps a little difficult without some background. The Amendment would not prevent the setting up of Passenger Transport Areas and, therefore, it cannot in any way be de-
1178
scribed as a wrecking Amendment, but it would oblige the Government to wait until the Royal Commission had reported before designating a Passenger Transport Authority Area. As the Bill is drafted, there is a degree of finality about designating an area. Designation would set in train a whole course of events which could be altered only with great difficulty, if at all. Yet it might prove that neither the system nor the area was compatible with the recommendations that the Royal Commission may be going to make.
Could we just for an instant consider the stages? and I will try to put them in the widest outline. In the first place, an area is designated by an Order. The same Order determines the constitution of the Passenger Transport Authority and the Passenger Transport Executive and provides for the establishment of those bodies. The next Order comes on a date appointed. On the second Order all the assets and rights and liabilities of road passenger undertakings owned by councils within the area are confiscated without compensation and handed over to the Executive. As we know, the lists of such undertakings are already being prepared, and, indeed, some two months ago the list of the bodies of the passenger undertakings of local authorities to be included in the area were circulated to the areas concerned.
I need not remind your Lordships that the four areas concerned to start with are the Manchester area, the Merseyside area, the Tyneside area and the West Midlands area. Each of the authorities in these areas has been sent a list; in fact two lists. The Ministry have sent a letter to each of them in which they say that assuming there is to be a Passenger Transport Authority, List A comprises those where the balance of advantage appears at first sight to be in favour of inclusion—very tactful and constitutional; then, secondly, List B comprises other areas with sufficiently important passenger links with the main built-up area for it to be argued that it ought to be included. The Ministry has made it clear that this is an unofficial approach and the Passenger Transport Areas, the local authorities, may reply without commitment and informally giving their comments and they will be consulted later in accordance with the

1179
Bill. I take it that the consultations provided for in the Bill, in subsection (2) of Clause 9, mean consultation after the passage of the Bill. I notice that the noble Lord assents to that, so they will be consulted formally afterwards. That is the second stage.
The third comes later, in between, within 12 months of the establishment of the Authority, or longer if the Minister allows. The Passenger Transport Authority and the Passenger Transport Executive are jointly to publish the results of the reorganisation that they are to study, stating, among other things, the financial position and the prospects of the Executive and the policies which the Passenger Transport Authority and the Passenger Transport Executive intend to follow. That is in Clause 18. Then, within two years of the establishment of the Executive, they are to prepare a plan for the future development of the passenger transport system in their area, subject to the approval of the Authority. Any time after this plan has been published the Ministry may make an order directing that Clause 19 shall apply to the area; and that is the third order. Once that order is made nobody may provide a bus service in the area except under an agreement with the Executive or with their consent. The present system of licensing bus services through the Traffic Commissioners will he discontinued. In other words, the Executive will, after that third order, either own or control all local bus services, whether operated wholly within the area or partly as a bus service in the area.
Since the Royal Commission are considering the functions as well as the areas of local authorities, it seems to us quite incredible that the Government should insist on fixing the structure of road passenger transport in at least four areas in advance of the Royal Commission's Report. We all know that Royal Commissions take time and that their recommendations need careful and often prolonged study. Nobody is suggesting that nothing should be done in the meantime. What we do say is that planning can and should proceed, but that there is no justification whatever for dispossessing the local authorities of their passenger transport undertakings in any area and handing them over to a new body operating in an area which may not coincide either
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functionally or geographically with the recommendations of the Royal Commission, and with no clearly defined responsibility to either central or local Government. Its responsibility is divided between the Minister and a weak Passenger Transport Authority, too large to be effective as an authority and too small to be representative as an assembly.
It is clear that if the Government wanted to form a Passenger Transport Area there were certain options open to them, and these we shall be considering in greater detail when we come to the Liberal Amendment. But what I think we have to consider here is whether it is right, first, to fix the pattern now, before the Royal Commission report; second, in fixing the pattern now, to transfer immediately, or pretty soon at any rate, the local authority undertakings to these bodies—to merge them all in such a manner that the set-up is practically irrevocable.
I think it is worth while drawing attention to the very wide variety that will exist in the four areas that the Government have in mind. In the Manchester area there are 7 county boroughs in List A, all of which have their own passenger transport undertaking; in addition, List B includes 15 municipal boroughs, some with their own or joint passenger transport undertakings, 28 urban district councils and 2 rural district councils. In Merseyside there are 3 county boroughs in List A, all with their own passenger transport undertaking. Apparently none of the muncipal boroughs has its own undertaking; I am not clear about that. In the West Midlands area there are said to be 7 boroughs of county status in List A, 4 with their own undertakings. In the Tyneside area there are only 2 county boroughs on List A with their own passenger transport undertakings, Newcastle and South Shields. Unlike the West Midlands, the area proposed is not concentrated but is strung out along the coastline.
These are widely differing problems and each of them has to be studied carefully on its merits. Our contention is that it is not worth expropriating the local authorities unless there will be scope for considerable reorganisation. One expert commentator finds it—and I quote:
"difficult to imagine how an organisation as proposed in the Transport Bill will be able to

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depart more than marginally from the existing relationships of the buses to the routes they work and the garages that supply them".
This is an expert view based upon the fact that the areas of the buses are largely determined by the population, the location of the population as it is, and that they have to radiate out from the depots that they have at the present time.
Another problem is that the profitable routes will be creamed off into the transport passenger areas, leaving the unprofitable routes in rural areas at present cross-subsidised by the routes to be creamed off. This matter also requires further study, and there seems to be little in the Bill that deals with this problem. The Government's plan in the Bill consists first of designating areas; secondly, in establishing Executives for them and transferring almost at once the local authority passenger transport undertakings to the Executive. As I say, our contentions are, in the first place, that the designation of areas before the Royal Commission Report is premature, and, in the second place, that to transfer the local authority undertakings to an Executive, before the study which is to be made by Passenger Transport Areas in conjunction with the Executive as to the kind and extent of the reorganisation required, is plain crazy. Such transfer may well prove to be quite unnecessary, if not in all cases at least in some. Our conclusion is that the right course is to institute studies and let the planners get on with their plans and the operators conform with the plans through the licensing system.
So far as Part II is concerned, if this Amendment is passed we shall be happy to examine it with a view to strengthening the responsibility of the Passenger Transport Executive and improving the constitution of the Passenger Transport Authority, should any improvement prove to be needed, and to ensuring that the lamentable fiasco of the Massachusetts Transport Authority is not repeated here, with its catastrophic deficits falling on the rates, its failure of the service to improve, its declining standard of maintenance and its crushing growth in overheads and managerial staff. There is no evidence whatsoever that by imposing an overall structure on an area economies of scale will arise. All experience so far indicates exactly the contrary: you merely put another body on top. If,
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however, further study could indicate clearly where economies of scale could be made, it might be worth while designating an area, provided that the area coincided with the plans resulting from the Royal Commission's Report. In our submission it would be madness to designate an area until the case was proved and until the Royal Commission had reported. I beg to move.
6.50 p.m.
LORD LEATHERLAND: I hope that my noble friend will not accept this Amendment. The noble Lord, Lord Drumalbyn, is always most persuasive, and there is a risk that we might be soothed by his sweet reasonableness. But when we look at this Amendment we see that it is a barefaced plan for delaying the introduction of a scheme which is urgently needed. The noble Lord, Lord Drumalbyn, said that we should wait until the Royal Commission on the reorganisation of local government had reported. That might be any time within a twelve-month period. But if vie look at the Amendment itself, we see that it does not say that we should wait until the Royal Commission on Local Government has reported; it says that we should wait until local government has been reorganised in the light of that Report; and that might be six or seven years. I think the noble Lord should b more frank with us in describing the particular period for which he wants this delay to operate.
The noble Lord also attached some importance to the desirability of the particular area of a Passenger Transport Authority coinciding with the area of some newly designated local government authority. There is no need for that. The words in the first line of the clause are "in the case of any area in Great Britain", not "any local government area in Great Britain". The Minister can designate an area, which might include a large city like Manchester, five or six other boroughs and even parts of some other boroughs or urban districts, according to the geography of the area. In such an event, not only Manchester Corporation but all the other local authorities whose areas were covered by the area of the newly constituted Authority would, according to Clause 1(a)(i), have an opportunity of appointing representatives on the new Authority, not merely if

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the whole of their local authority area was included in the area of the new authority but even if only a part was included.
It is urgent that this important matter of reorganisation should be tackled quickly in these four densely populated areas of the country, and for us to delay in the way suggested by the noble Lord, Lord Drumalbyn, would strike a serious blow at the heart of the Bill.
LORD ST. HELENS: For my part, I very much hope that my noble friend Lord Drumalbyn will press the Amendment which, if I may say so, I thought he moved most ably. I shall be brief in my remarks because this particular matter was debated at great length in Committee F in the House of Commons—at length, I suppose, because it was lucky enough to be called before the guillotine began to fall—and there, as here, people expressed their astonishment that the Government should not be prepared to accept an Amendment of this nature and to wait until the Royal Commission had reported.
THE MINISTER OF STATE, HOME OFFICE (LORD STONHAM): If I may interrupt the noble Lord I would point out that we are not discussing the implementation of the proposals put forward by the Royal Commission. The Amendment says:
"after local government has been reorganised in the light of the Report of the Royal Commission on Local Government"
which is a very different thing.
LORD ST. HELENS: I am greatly obliged to the noble Lord; but I was coming to that point. If the Royal Commission does not recommend any alteration at all there will then be no further delay. If in fact it does recommend an alteration, then we are arguing that the P.T.A. should be established only when the new regional authority has got into its stride, and the P.T.A. areas can then he co-ordinated with the new areas of the new Authority. It may be that the new Authority will have to be formed first, before the new members can be co-opted on to the P.T.A.; and that is an important point.
As my noble friend said, the P.T.A. will have enormous powers of acquiring
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vehicles from the existing local authorities, and I think I am right in saying that they will be able to acquire land and property, and even set up industries. Surely these great powers should wait until the Royal Commission on Local Government has reported, when either no change will be recommended, and therefore nothing will happen, or substantial changes will be recommended and there will have to be substantial reorganisation of the P.T.A. area. This would not only be extremely costly to the taxpayer but also would create a complete upheaval.
LORD HENLEY: I find myself in a difficulty here. I have sympathy with the Conservative Amendment; in fact I think I was the only one who spoke about this issue on Second Reading, when I expressed the hope that the Government would wait before setting up the P.T.A.s. On the whole, I rather accept the Government line that it is sensible to go ahead without waiting, although I hope it may be possible to have some consultation beforehand to know exactly how the Royal Commission will go. I do not know whether noble Lords on the Conservative Benches want to press this Amendment. If they do, I feel, perhaps with some regret, that I ought to advise my noble friends to abstain, particularly in view of the fact that we have another Amendment later on which embraces some of the same ideas but nevertheless puts forward a different method of control. When we come to Amendment No. 30 I will say a word or two about that. Although I agree with a great deal of what the noble Lord, Lord Drumalbyn, and the noble Lord, Lord St. Helens, said on this issue, nevertheless I feel that, on the whole, and in view of the Amendment standing in my name and that of my noble friends, I ought to abstain.
BARONESS ELLIOT OF HARWOOD: I wish to support this Amendment. Nobody has mentioned the fact that in Scotland we have a difficult problem in connection with transport, not in only one area, because of great congestion, hut mainly because there are wide and scattered areas which at the present moment are being served by transport some of which is threatened with removal. The Local Government Report for Scotland is due to come out, I believe, in about two months' time. I have been told that it will be published early in the autumn, and in

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the Parliamentary sense that is quite soon. In my view it would be extraordinarily complicated and difficult if we suddenly started to reorganise these huge areas in Scotland without having any knowledge as to how they are to be designated in the new Local Government Report.
If I may say so, this is the second time that a Bill which affects Scotland is being carried through without any knowledge of what the new local government areas will be. We had the Social Work (Scotland) Bill before the local government areas were designated, and now we have this Bill. And although the noble Lord, Lord Leatherland, thinks that it will delay matters if we wait for the Commission's Report, I think that such chaos will be caused when it all has to be done again, after it has been done under the existing organisation, that any time wasted in waiting for the Report would be no greater (and possibly even much less) than if we went ahead and then had to reorganise the areas.
In my view, we should wait until we know what the local government reorganisation scheme is going to be. My guess is that that will go through, not perhaps very quickly, but we have been waiting so long that people are anxious that it should not be left too long. Then it will make some sense that we get the Passenger Transport Authorities based on that principle. I support very strongly this Amendment moved by my noble friend Lord Drumalbyn.
LORD ILFORD: The noble Lord, Lord Leatherland, said twice in the course of his speech that the changes which the Bill seeks to bring about are urgent—I think he said "very urgent". The noble Lord speaks with a very wide knowledge of local government in certain parts of the country, but I do not think that in all his experience the noble Lord has had much experience of local authorities which run transport undertakings. There really is no difficulty about these undertakings. It is quite true that in each of these proposed areas there are a number of county boroughs which have transport undertakings of their own, but they have running powers agreements with their neighbours. There is no difficulty whatever in travelling from the central point of all these proposed areas, whether it be Manchester or Newcastle or Birmingham, to
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any of the places which are served by any of the undertakings of the county boroughs within the areas. It is quite easy. The old days when you had to change trams once or twice in order to get to Manchester from some East Lancashire town are gone years ago. To-day there is no difficulty whatever in the interchange of these services.
The Government seem to be getting into the habit of rearranging local services in new boundaries without waiting for the Report of the Royal Commission. The police are being reorganised into new areas, slowly, but the process is going on. Town and country planning will be reorganised into new areas which have no relation to the new area; which will be proposed by the Commission. The Town and Country Planning Bill passing through your Lordships' House now is without regard for the new boundaries which the Commission are bound to suggest. Now transport is to be added, and by the time the Royal Commission have completed their task and recommended new boundaries, which they are sure to do, the regions in which a these important services operate will be quite different from the regions the Royal Commission are going to propose. I really think it would be better to wait until we know what the new boundaries and the new regions are likely to be.
LORD POPPLEWELL: It seems fairly obvious to me that in effect these three Amendments are wrecking Amendments purely and simply. The object behind the first Amendment is nothing at all to do with the railways so far as establishing our transport councils and transport executives are concerned, where local authorities are brought into full consultation with a view to providing an adequate transport system in their areas. The first Amendment suggests that nothing at all should be done until the Royal Commission issue their findings and those findings are implemented. What does that mean? That means at least something like a four, five or even a six-year period. That is the bare bones of the objection to this particular Amendment, and it is well that we should know it. I know the difficulties that will be experienced in trying to get a comprehensive scheme from local authorities embracing city, urban and rural areas into a good

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comprehensive transport scheme. I know that there will be very many difficulties.
Having had some experience of this type of transport, and particularly local government, I know that many of our local government people are enthusiastic about their work. They are big fishes in little ponds. They give every ounce of their energy to their work, and if you suggest curtailing their particular energy, although in the long view it is much better that it should be used, you arouse a tremendous amount of opposition. This was the fate of the 1947 Act, because at that time these consultations had to take place, certain areas were experimented with and nothing happened. In this Bill there are certain vesting dates within which these consultations will have to take place. The local authorities will have to establish their councils and they will also have to establish their executive committees. This is with a view to bringing the local authorities into a wider sphere of self-administration, as it were, and I was absolutely astonished to hear the representative from the Liberal Bench express certain qualms as to whether to support this provision or not.
With all their talk about regional structure and regional local government, one would have thought that the Liberals, at any rate, would have been wholeheartedly behind the Government on this clause, because it brings the local authorities into a much wider range of vision in dealing with their transport difficulties, which includes urban and rural services. This is with a view to redevelopment which is taking place in many areas where there is deficiency of transport where to begin with the private service might have been subsidised by the Railways Board, and then, because it does not pay, they cut out that service. With redeployment, if a new factory is not sited on a big industrial estate we all know the difficulties of people getting to work. One would have thought that the Liberals in particular would have been most keen to bring in this clause.
With regard to the second Amendment to be moved in a moment, I am rather astonished by the wording, because it suggests:
"…local authorities representing a majority of the electorate in that area so request jointly in writing."
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We know this particular proposal took some three hours in Committee in the other place and was rejected completely by 9 votes to 15. The noble Lord St. Helens referred to the fact that the guillotine had been utilised. Of course, the guillotine was not utilised on these clauses.
LORD ST. HELENS: That is precisely what I said.
LORD POPPLEWELL: I do not know the exact time which was taken, but I am referring to three hours of discussion which took place on the question of local authorities' having to submit in writing. If the guillotine was used in that instance, it was time it was used.
LORD ST. HELENS: I either did not make myself clear, or I think more likely the noble Lord misheard. I said that it was fortunate that these clauses were debated, because by that time the guillotine had not come into use.
LORD POPPLEWELL: I misinterpreted the noble Lord, and I apologise. But the second Amendment that is about to occupy the time of the Committee was discussed for three hours in the other place. I sincerely hope that noble Lords are not going to follow a policy of procrastination, but are going to get down to the business of a correct and proper consideration of the Bill.
LORD LEATHERLAND: May I comment on a point pleasantly made by the noble Lord, Lord Ilford. He very generously said that I had had wide local government experience, but he doubted whether I had had experience in a local authority with public transport. The answer is that I have, and I must make, that clear in case the obituary writers base anything they say about me on the words of the noble Lord. Before I degenerated into journalism I was in charge of the costing system of the big transport using department of the Birmingham Corporation, and the Corporation at that time was its own transport authority.
LORD ILFORD: I must withdraw my observation about the noble Lord in view of that statement.
7.10 p.m.
LORD STONHAM: I trust that honour is now satisfied. The noble Lord, Lord Drumalbyn, always speaks so attractively and with such sweet reasonableness that he can say the most outrageous things and, until they appear in print, it always seems, because of the manner of his presentation, that they do not need any challenge. But on this occasion, in moving his Amendment, he made a number of statements which I shall endeavour to challenge most strongly. He explained, first of all, that his Amendment would not prevent the setting up of Passenger Transport Authorities, and it could not therefore be described as a wrecking Amendment. I have no hesitation whatsoever in saying that this is a wrecking Amendment, and it is so designed.
It is true that this Amendment was discussed in another place. There were some thirty-eight columns of discussion on this Amendment. I make no complaint about that at all. It is an extremely important matter. The noble Lord, Lord Drumalbyn, realises that, because if this Amendment is carried, then it will be at least six or seven years before anything at all can be done. This is what we are discussing.
I appeal to the noble Lord, Lord Henley, to reconsider his position. I hope that he will advise his noble friends to vote against this Amendment, because surely no noble Lord wants to commit an act which means condemning people living in conurbations throughout this country to a delay of six or seven years before anything can be done. If your Lordships vote for this Amendment, that is precisely what you are doing. Anybody who goes through or stops in a conurbation has, not once but several times, said: "This is appalling; this is chaos".
The noble Baroness, Lady Elliot of Harwood, said that the chaos would be worse in Scotland. She knows Scotland better than I do, but it is difficult to imagine how the chaos can be worse than it is in some of our major conurbations, which include Birmingham—and I have myself suffered on many occasions. I think she had not reached deeply enough in her references to Scotland, and I hope that she will allow me, in the hope of winning her valuable support, to mention what the White Paper says about
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Scotland. This is paragraph 70 of the White Paper:
"Studies which are now being made of the future transport requirements of varicus parts of Scotland will show whether it may be necessary to strengthen further the machinery for matching the transport system to the planning requirements of the area concerned. The Transport Bill will accordingly empower the Secretary of State to establish Passenger Transport Areas in Scotland, but a decision will be deferred for the time being on whether this power should be exercised and, if so, in what areas."
I think that is an assurance to noble Baroness, that whatever else happens anywhere else, chaos which exists in Scotland is not going to be any worse. We are going to look carefully into it.
BARONESS ELLIOT OF HARWOOD: I thank the noble Lord for that observation. Do I understand from what he has read out that no action is going to be taken in Scotland until 'we have the Report on Local Government which is coming up quite soon and of which we shall take note? If that is so, I am happy about that.
LORD STONHAM: I am glad that the noble Baroness said, "until we hive the Report on Local Government". What she expressed support for in this Amendment was not "until we have the Report of the Royal Commission" but" until local government has been reorganised in the light of the Report of the Royal Commission on Local Government". That is why I call this a wrecking Amendment. We may all have our estimates as to how long it is going to take; but my right honourable friend the Minister of Housing and Local Government thinks it will take some five or six years to implement after we get, and have considered, the Report. Therefore, if we accept this Amendment and we are going to wait all that time, then I think this is something that no Member of your Lordships' House ought to support, because this is too important.
The noble Lord, Lord Drumalbyn, said that this setting up would be final, and that the decisions made may be contrary to the recommendations of the Royal Commission. My right honourable friend the Minister of Transport, when he makes his decisions will certain y have regard to the recommendations which might be made by the Royal Commission on Local Government, and will thus

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minimise, if not entirely remove, any problems which may be created following any reorganisation of local government. That is a different thing. That is not what the Amendment asks for. But I think most of us would regard it as reasonable; and that is what the noble Baroness, Lady Elliot, asked for.
The noble Lord said that passenger undertakings will be confiscated without compensation. That is quite true. That is common practice, a well established practice in this country. Transfers within the public sector, as these would be, are not subject to compensation, and of course the P.T.A. will pick up liabilities as well as assets. Therefore I do not think there is much in that point.
Then the noble Lord said that planning should proceed meanwhile—meaningless, aimless planning. That is what people are sick of hearing about, just planning. They want us to get on with the job. That is why the Minister has made it clear that he wants to get on with the job in these four conurbations where the problems are so acute. The noble Lord said that it would be a weak Passenger Transport Authority. In the Manchester area there are no less than 80 local authorities who would be concerned in this matter, and they will have a representation probably of 22 out of a Passenger Transport Authority of 25 persons. Is the noble Lord going to say that those 22 representatives from local authorities in Manchester are going to be a weak body? Are their powers so weak? They would have the job of controlling the reorganisation in a major sense of the services in this area. They would have responsibility for approving revenue and expenditure estimates. They would be responsible for approving major capital expenditures and agreements with the Railways Board, approving changes in the general level of fares and charges, proposals for concessionary fares, and borrowing. To me, this does not sound like weakness; and it is still truly local, truly representing the people. The only persons nominated by the Minister, who would be almost certainly local men too, would be three people who have special knowledge in this field, and could therefore give great assistance.
The noble Lord referred to what he was pleased to call the "lamentable
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fiasco" of Massachusetts Bay Transport Authority. There are people in America who do not think that this has yet been a lamentable failure, but that it has done very good work. Its major capital development began in 1964. As he well knows, it has not had time to take effect. However, it is a very different organisation from that which we propose. To start off with, it inherited an unhappy legacy of political squabbles. It had inherited a legacy of something like a 16 million dollar deficit. This has not happened with any of ours. In addition, it was hamstrung virtually by a three-tier administration which was doomed to failure from the start. Here we have a live local authority P.T.A. which will itself appoint an expert Executive to do its bidding. No long channels of communication there.
I hope that we are not going to decide this question on a partisan basis. Unfortunately there are fewer people in the Chamber now than probably will vote on the Amendment. We have a responsibility to the people of this country, who are sick and tired of the failures arising from the parochial attitudes to transport and from the inability to get together under a determined authority.
The noble Lord or one of his noble friends—I believe it was Lord Ilford—mentioned the fire services and the police. It was a little unfortunate to mention examples like that. I was at one time the Junior Minister responsible under the Home Secretary for the fire services. It was my lot on one occasion to visit the fire services in Lancashire and I went in company with the fire chief. I went through Salford. I was not sure when had gone into Salford or out into Manchester; it is impossible to decide. However, there is a different fire service, with fire chief and fire station. Absolute nonsense! That is the kind of thing, with all respect, which the noble Lord wants to stop us from doing anything about for another six years, and if you vote in support of the Amendment that is what you will want to do too.
LORD ILFORD: The noble Lord spoke of the fire services and his experience of them in Manchester and Salford. Was he shown the agreement between the two local authorities dealing with these matters?
LORD STONHAM: I only know what were the responsibilities and what are the responsibilities of the Home Secretary in this matter. In the main it is a financial sanction, and we settle matters under a chief inspector or by persuasion. But I also know that in the matter of police amalgamations the Home Secretary does have authority there. There has been a very large reduction in the number of separate police forces over the last 18 months, and about some of them he has had to exercise his powers, with, I believe, the general approval not only of the whole public in this country but, so far as my information goes—and I do get about with the police—of the police themselves. The point is that somebody has to take a decision. We are taking a decision here and we are putting forward what we regard as a sensible arrangement. This Amendment, in effect, says nothing else but, "We want to stop you from doing anything for six years". I hope that you will not agree that this is a thing your Lordships' House should do. But if the noble Lord does not withdraw his Amendment, as I hope he will, then I hope that your Lordships will defeat it in the lobbies.
7.24 p.m.
LORD NUGENT OF GUILDFORD: We listened with attention to the noble Lord, Lord Stonham, making his very cogent speech, but he really starts it on a false premise in condemning this Amendment as being a wrecking Amendment. It is not; nor, indeed, are our other Amendments on P.T.A.s wrecking. I am sure he has studied them. I am sure all noble Lords have. We have not set out to make 100 per cent. opposition to P.T.A.s. We accept the principle of P.T.A.s, and my noble friend Lord Drumalbyn—who made a very well considered speech—and I and other noble friends have given a great deal of thought to P.T.A.s. We accept that there is something in the idea which is potentially valuable for our big conurbations. The noble Lord, Lord Stonham, really gets off on the wrong foot when he attacks us on the ground that we are trying to wreck this clause. We are not. But we are quite convinced that P.T.A.s cannot succeed unless they are firmly based on local government.
This Bill, as it is now drafted, puts the vital controls in the hands of the Minister. The Amendment that we have put down
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would put the vital controls in the hands of local government. We feel that is absolutely basic. Certainly let the Minister designate the area, but if we are to get public accountability, if we are to avoid the disaster of the Massachusetts Transport Board—and I shall have more to say about that in a minute, but the noble Lord rather brushed it off—and make a success of this, as we should like to do, we are certain it must be firmly based on local government with local government control right through, and then we believe that it would have a chance of working.
It is a pity that we have to wait perhaps, the noble Lord says, six or seven years. I should think that is rather pessimistic. The Local Government Commission will probably report this autumn. I should have thought we should get legislation within two or three years, and that with any luck we should get acceptance within three or four years. By that time there will probably be a change of Government and action will take: place rather more quickly. The noble Lord may remember that in the last Government, the Tory Government, there was some major local government reform in London, bitterly opposed by noble Lords and their friends opposite, but we carried it through, and I do not doubt that the noble Lord, Lord Stonham, and other noble Lords are very glad that we did, because it was a sensible piece of local government reform. If it falls to our lot to face the major problems of legislation for the whole country, well, we shall certainly go ahead and do it.
This is not a wrecking Amendment. We feel absolutely definite that these P.T.A.s cannot succeed unless they are squarely based on local government. This is the only way that it will be possible to get public accountability, and that is why we put this Amendment down. It is quite obvious that within the course of the next few months we shall get the Local Government Royal Commission Report and within the next three or four years some very major reforms of local government. It is for that reason that we put our Amendment down.
I should just like to discuss one or two aspects of P.T.A.s. I. would re assure noble Lords in all parts of the House, and especially on the Liberal Benches, that we are not opposed to P.T.A.s but

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when this move is made we want to be sure it is right. Noble Lords must have it clear in their minds that this is completely experimental. The only experiment, the only case where this has been tried out, is Massachusetts Bay, where it really has run into the most desperate trouble. I will go into it in some detail. Therefore it is only common sense, before we go ahead with this plan in our country, to make sure that we have got the basis right, and the very foundation of that basis is the local government structure itself.
Before turning to the Government's concept, may I say a word about the structure and what the traffic commissioners do? The speeches that have been made, and especially the speech made by the noble Lord, Lord Stonham, indicated, that the situation was absolutely desperate. Well, public transport is nothing like as good as we should like it to be very few things are. Certainly my experience in the Ministry of Transport taught me that the existing system works remarkably well, in the kind of pragmatic way in which many English arrangements work. The traffic commissioner has his system of licensing the bus companies, whether municipal or private, which operate in an area. By his intimate knowledge of the whole area he is able to carry out a very effective task of integration. He protects the bus compay on its profitable routes on condition that the bus company takes its share of the unprofitable routes, so that, broadly, he keeps the area covered. The system has worked remarkably well, and it is combined with a system of vehicle licensing and control which keeps our passenger service vehicles to a very high standard. That is in complete contradistinction to the freight picture, where reform was badly needed, and in my view needed on the licensing side also, although not in the way noble Lords opposite are suggesting.
I should like in passing to pay a tribute to the traffic commissioners for the excellent job they carry out. The noble Lord, Lord Fiske, and I had a common interest in the planning of the South-East region of this country, in combination with the G.L.C., in that we had a good deal to do with this when he was the Leader in the G.L.C. We
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succeeded in getting a large number of local authorities to work together for planning purposes. He and I know that an essential part of planning is related to public transport. It is useless to plan developments unless you are sure you have a public transport system which will get people to work, get the children off to school, take people shopping and all the rest. Therefore, we are completely seized of the necessity to relate public transport to the planning authority of the local authority, and we are in favour of this general approach. The constitutional difficulty here is that the city or urban authority is never large enough to cover the whole of a conurbation area, and to get an effective passenger transport authority it is necessary, as in this concept, to bring together a group of local authorities in order to build up a sufficiently comprehensive area.
The noble Lord, Lord Leatherland, wondered why my noble friend Lord Drumalbyn was worrying about the adequacy of representation of local authorities, since he thought that the Bill gave them all they require. Well, the noble Lord, Lord Stonham, gave him the answer. In the Manchester area, where there are some 80 local authorities, the total number on the Authority as visualised by the Bill would be 25, giving only 22 local government representatives—in other words, about one local government representative to four authorities. Clearly, there would for a number of authorities be at best only a shared representation, and the local authority control would be by no means effective. But there are other aspects of the Bill as visualised where the Minister's control comes in, on which I should like to say a little more later.
Coming to my theme of the necessity to bring together a number of areas, I do not doubt that the Royal Commission will be thinking about local government in relation to public transport and in due course will have something to say about it in their Report. When the noble Lord was inveighing against us for the monstrosity of our saying that he ought to wait until local government was reformed, I wondered whether he had ever thought of referring to the Royal Commission the concept in this Bill of P.T.A.s and asking them what they thought of it. Do

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they think that it is a sensible idea which will fit in with the broad concept of the reform of local government which they are now being asked to study and report upon? This is an important part of it, and I should like to have their view on the matter. So far as I know, they have never been asked to say what they think of it. I make the point, which I am sure is a good one, that it is fundamental to the formation of P.T.A.s first to know what will be the component local government areas, their geographical area, their new powers, and generally how they will be set up. It is not surprising to find that the A.M.C. have firmly advised the Government to wait until local government reorganisation has taken place. That is common sense. This is not a wrecking matter at all.
I should like to refer in a little more detail to the Massachusetts Bay experiment because it has some cogent lessons to teach us. The noble Lord, Lord Stonham, said that this is all quite different, but all the experts have told us that the P.T.A. is a carbon copy of the Massachusetts Bay Transport Authority. It is true that they started with a deficit, but what they have succeeded in doing in the three years they have been in existence is to make the deficit rise by over 50 per cent. In fact, they have shown every defect of a lack of public accountability. It is interesting to have on the record the words of the Governor when setting up the Transport Authority in 1964. He stressed "…the importance of acting now before it is too late." It is just the same as the attitude of noble Lords opposite, who tell us that it is so urgent that we must do something immediately and dash into something which is quite wrong. What we want them to do is to wait and to make sure that we do the right thing. This is the basic point we are trying to make.
The dilemma is that there will always be a conflict between the desirability of keeping public transport fares down and the quality and comprehensiveness of the service up, and, on the other hand, the desirability of keeping the deficit down and the burden on the rates down too. This is the inevitable conflict. We realise that nowadays, with all the problems of urban areas, it is extremely difficult to make bus services solvent. Everybody wants better services, but the
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better they are the bigger the deficit and therefore the bigger the burden on the rates. That is the problem. The Massachusetts Bay experiment showed that the structure was such that the authority was insulated from the local people and it could precept freely on the rates without feeling the wrath of the local people descending on its head. I am certain that the right answer to this equation can be found only in the judgment of the local councillors with a full sense of responsibility to the ratepayers and transport users who elect them—usually the same people. If you get that, I believe you will get the equation right.
Intimately related to the fare level and the quality of public transport service is the strength and efficiency of the management. If the Authority is strong, united and clear in its purpose, it will make sure that the management is efficient, and there will be a clear sense of responsibility through the local government body to the ratepayers that they serve. Everything points to the necessity for getting local government structure reformed first before making this experiment—and I stress that it is till an experiment. The Bill as drafted puts the power for the P.T.A. to precept on the local rates largely in the hands of the Minister. No reform of local government could possibly approve of that.
Let me enumerate four points of ministerial control. First of all, the Minister approves the chairman of the P.T.A.—that is vital. Secondly, the Minister must have complete power over capital expenditure—that, too, is vital. Thirdly, the Minister controls investment grants at discretion. Fourthly, the Minister decides the arrangement between the P.T.A. and the railways where the railway service is making a loss and has to be taken over with a precept on the rates. Fifthly, the Minister directs the form of accounts. This kind of control from Whitehall could never be approved in any reformed local government structure. It is the absolute reverse of what we are all asking for. We are asking for stronger local government, with greater independence. I hope the noble Lord may take my suggestion of referring the, whole concept of the P.T.A. to the Royal Commission and ask them for their advice on how they think it ought to fit in.
The fact is that the only single answer the Government have given to these very

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formidable arguments in favour of waiting is the one of urgency. They say that it is urgent to do something. But is the urgency going to be justified if we do the wrong thing? We shall be worse off than ever if we set up authorities without a proper sense of public accountability, as a result of which they get into heavy deficit, suffer a revolt from the local ratepayers and then become discredited. That would do more harm than good. The present system may not be working very well, but for heaven's sake!, let us make sure before we move that we move to something better.
These P.T.As. are really experimental, and the only experiment that we know about has ended in failure for lack of public accountability. The basis of public accountability here, as our other Amendments will show—and I very much hope that the Government will accept them—is that the local government bodies must be fully responsible and, if the Government will accept that concept in respect of other Amendments which we are going to move, we shall be broadly in favour of the concept of P.T.As. We want the local government bodies to be completely responsible, electing their own members, and with the bodies electing their own chairmen; for we believe that so long as they are completely responsible public accountability will work. This is not a wrecking Amendment. We are in favour of the idea and we want to see it work. I very much hope that the noble Lord will accept the Amendment.
LORD STONHAM: I was not aware, although I am very glad he did, that the noble Lord was going to make a speech. I looked around before I got up—
LORD NUGENT OF GUILDFORD: We seem to be getting into rather an important debate, but this is a major point. It is the opening debate on this subject, and this is the Committee stage.
LORD STONHAM: I think I have attended as many Committee stages as any Member of your Lordships' House, and I am not complaining about that at all. I was merely remarking that I did not know the noble Lord was going to get up. Otherwise, I would have waited to hear him speak, and I could then have answered his other points. That was all. I was pleased to hear the noble Lord
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say several times that he and his noble friends accept the concept of P.T.As., although he is convinced they will not succeed unless they are firmly based on local government throughout. They are indeed firmly based on local government. Of 25 members—taking the largest number anticipated—22 will be directly appointed by local authorities in the area.
At another stage of his speech the noble Lord said that they should all be properly elected. That would mean, in the Manchester area, 80 members of the Passenger Transport Authority. That is not an Authority; that is a mass meeting. The absurdity of these suggestions becomes apparent when one looks at them closely. That is what we are being asked seriously to consider; and not only to consider, but to wait six years for. Although we have had a very wide-ranging debate, that is what this Amendment is about—waiting another six years. The noble Lord said that in his experience at the Ministry of Transport, when he was a Minister in another place, the arrangements for public transport worked very well, and he paid a tribute to the work of the traffic commissioners—a tribute in which I join him. But, if I recall aright, the noble Lord ceased to shed the light of his countenance on the Ministry of Transport some ten years ago, and in the last decade things have changed traffic-wise. We have increased from between 6 million and 7 million cars to 11½ million cars on the roads, and there have been corresponding increases in other types of motor transport. It really is not good enough to say that we can wait another six years.
I do not want to go into further details about the Massachusetts Bay transport system, because we are here discussing our system. But I must reject, and indeed refute, the noble Lord's statement that what we propose is a carbon copy of the Massachusetts Bay system. There, the organisation consists of the first tier, which is an Advisory Board of one delegate with a card vote from each of the 78 local authorities. That obviously appeals to the noble Lord, because in Manchester he wanted 80 local authorities each with a vote, if not a card vote. But we do not suggest a carbon copy of that kind of system, with very limited powers and a delegate from each local authority; it could be the Mayor, or even

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his Mace Bearer, so far as I can find out. Then the next tier was a Board appointed by the State Governor, to act as a Board of Management and, finally, there was the General Manager. If I may have the noble Lord's attention for a moment, I am replying to his point about this being a carbon copy of Massachusetts Bay, with its three tiers. It certainly is not. The organisation we propose, of 20 to 25 members, six-sevenths of whom will be appointed by local authorities in the area, with an Executive appointed by that body will be true local government.
The Minister has given sufficient indication that over the country as a whole he will have regard, in any proposals he makes for setting up Passenger Transport Areas, to the recommendations which may be made by the Royal Commission. That is in all cases. But we cannot wait till those recommendations, which we have not yet received, have been con-
sidered and, if approved by Parliament, implemented in legislation, because in the four areas that have been mentioned we believe that much more urgent action is necessary and I think noble Lords must agree that it will not be taken it is left entirely to the local authorities themselves. There must be a co-ordination, there must be a direction and there must be action. It is our intention, however, that in those areas the P.T.A.s should be re-absorbed more directly into local government when and if a suitable local government organisation, just like Greater London, is in existence. In the meantime, we feel that it is imperative to make progress. We hope, therefore, that noble Lords will not support this Amendment.
7.52 p.m.
On Question, Whether the said Amendment (No. 27) shall be agreed to?
Their Lordships divided: Contents, 109; Not-Contents, 62.

NOT-CONTENTS

Addison, V.

Hilton of Upton, L. [Teller.]

Rowley, L.

Archibald, L.

Hirshfield, L.

St. Davids, V.

Beswick, L.

Hughes, L.

Samuel, V.

Blyton, L.

Iddesleigh, E.

Serota, Bs. [Teller.]

Bowles, L.

Kahn, L.

Shackleton, L.

Brockway, L.

Kennet, L.

Sorensen, L.

Brown, L.

Kinloss, Ly.

Stocks, Bs.

Burden, L.

Kirk wood, L.

Stonham, L.

Chalfont, L.

Leatherland, L.

Strabolgi, L.

Champion, L.

Llewelyn-Davies of Hastoe, Bs.

Strang, L.

Clwyd, L.

Lloyd of Hampstead, L.

Summerskill, Bs.

Crook, L.

Lucas of Chilworth, L.

Swanborough, Bs.

Douglass of Cleveland, L

McLeavy, L.

Taylor of Mansfield, L.

Evans of Hungershall, L.

MacLeod of Fuinary. L

Walston, L.

Gaitskell, Bs.

Milner of Leeds, L.

Wells-Pestell, L.

Gardiner, L. (L. Chancellor.)

Mitchison, L.

Williamson, L.

Goodman, L.

Peddie, L.

Willis, L.

Granville-West, L.

Phillips, Bs.

Winterbottom L.

Hall, V.

Plummer, Bs.

Wootton of Abinger, Bs.

Hanworth, V.

Popplewell, L.

Wright of Ashton under Lyne, L.

Henderson, L.

Rhodes, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
8.0 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 28:
Page 12, line 36, after ("area") insert ("and if after such consultation as is referred to in subsection (2) of this section local authorities representing a majority of the electorate in that area so request jointly in writing")
The noble Lord said: This Amendment is to Clause 9, subsection (1). The procedure for consultation with local authorities is not satisfactory to them, as noble Lords opposite know, and already there has been a good deal of rumbling from local authorities about the procedure which is outlined in the Bill; and, of course, such consultation as there has been over the last year with local authorities on these matters has left them really pretty uneasy. Their fear is that the Minister may impose on them against their will a P.T.A. structure which they believe is against the interests of their ratepayers. The procedure for consultation in subsection (2) leaves the local authorities completely at the mercy of the Minister. The local authorities' objections can be overruled by the Minister without ever seeing the light of day. The Minister is required only to consult with them. The Minister considers their reactions, and then proceeds to take action. There is no provision of any kind for a public inquiry where objections could be publicly ventilated and fairly examined, and alternative schemes given an airing. After all, these are the normal procedures for anything of this kind where big public interests are concerned and where,
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of course—and I stress the point again to the noble Lord, Lord Stonham—a precept on the rate may, and probably in due course will, follow. Naturally, the local authorities feel extremely anxious that they might be committed to the setting-up of an authority of this kind without all this having been fully ventilated, without all the people in the area having been informed as to what the issue is, without their having been given the pros and cons, and knowing what the advantages and disadvantages are and what the possible cost might be. The procedure provided in Clause 9(2) really is the reverse of the independence of local government for which we are all striving.
May I remind the Committee again, going back to the Massachusetts Bay Transport hearings experience, that the noble Lord, Lord Stonham, said that everything is not a carbon copy of that. As the noble Lord knows, Ministry of Transport officials went over and looked at that scheme before designing the P.T.As. But that scheme failed for lack of public accountability. This was the basic failure there. We must make sure that we get that right in the structure of the P.T.As that we have here. As I have said previously, I think that the constituent local authorities, through their electors, are the right structure of public accountability. This means that the constituent local authorities must squarely accept the need for a P.T.A. in their area and the financial obligations that go with it before there will be any chance of making a full success of it.
The noble Lord, Lord Stonham, will, I am sure, be familiar with the letter from the Birmingham City Transport authority dated May 27 and signed very authoritatively by the Chairman of the Birmingham City Transport, the Chairman of the Liverpool City Transport, the Chairman of the Manchester City Transport and the Chairman of the Newcastle City Transport. This letter makes it plain that the local authorities who are transport authorities feel very uneasy about the procedure outlined in Clause 9(2). They do not feel that this is adequate to meet their reasonable considerations. The point I want to make is that they are at the moment very far from persuaded about the benefits of having P.T.As in their area at all. My feeling is that here is an idea which could be good; but the basic point is that in any case no P.T.A. will succeed unless the local authorities want it, are prepared to put their backs into it and to accept the full responsibility for it.
It is because we are convinced of that that we are moving this Amendment which, followed by the consequential Amendments Nos. 31, 32, 33 and 34, outlines our thoughts of what is the right structure for the Minister's consultations. Having made his proposal for setting up the P.T.As and having designated his areas before he proceeds the Minister should have in writing the consent of the majority of the local authorities in the areas in which he is proposing to set up P.T.As. We have set out in Amendment No. 34 the machinery by which the Minister will provide a public inquiry where the objections are substantial and obviously justify it. This is the common form for doing this kind of thing nowadays. This is similar to what is done in planning and in development propositions. I should have thought that both these related ideas are just practical commonsense if we are to make the P.T.As succeed in the way we want. I beg to move.
LORD STONHAM: I have the feeling that when there are 15 noble Lords in the Chamber and 140 noble Lords enjoying their dinner, argument becomes somewhat academic—especially having regard to our experience in the Divisions so far. But that will not discourage me from putting the arguments as I see them.
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The noble Lord, Lord Nugent, in moving his Amendment said that the local authorities fear that the Minister will impose a structure against their wishes. To some extent this will not be true. No structure will be set up until there has been very full consultation and until the Minister has done his utmost to allay any legitimate fears that local authorities may have.
The noble Lord said that they were very worried about the possibility of precepting on the rates, that this would be against their wishes. An. Authority will be a body of 25 people, 22 of whom are representatives of local authorities, prominent, responsible, elected, as it were, the majority of them Conservative controlled. Therefore one assumes that they would appoint in the main people of the Conservative way of life. It is these people who are accused of adopting an irresponsible attitude towards precepting on the rates. What would their position be in relation to their local authorities if they did that? It is these members of an Authority who would largely determine policies which would, in the main give rise to the possibility of a precept on the rate, through insisting on a continuance of transport services which were uneconomic but which it was felt should be continued for social or other valid reasons. I do not think these are arguments which should fairly be put forward by the noble Lord, with his great experience in these matters. They are nor valid arguments.
The effect of this Amendment would be that passenger transport authorities could be set up only after consulting the local authorities in the areas and if the majority of them, weighted in proportion to the size of the electorate, requested in writing that a P.T.A. should be set up. At first sight, this is a very attractive proposition which looks well on paper and which would sound well on the radio. It would be featured in the local newspapers. I have done some of this myself in another place, but I shed that kind of thing when I arrived in your Lordships' House some ten years ago. These are not arguments which ought to impress your Lordships.
The Government have made clear that the P.T.A.s are to assist in solving local passenger transport problems by creating bodies which will be placed firmly under

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local control. That has been demonstrated. The argument in this Amendment is that these should not be imposed on the local authorities unless they want it. The whole question we are trying to decide in this part of the Bill turns on what form of organisation is likely to provide the best transport system for the conurbation as a whole. I cannot think of a single local authority in any of the conurbations we have in mind which would be able to look objectively at this matter on so wide a basis as we have under consideration. They are more likely, understandably and for human reasons, to adopt a purely local, indeed, almost a parochial, view.
I freely acknowledge that most local authorities likely to be affected are opposed to P.T.A.s as envisaged in the Bill. They accept that there is a need for co-ordination of public transport services and that some sort of joint authority may be needed for this purpose, but they are opposed to its taking over any municipal undertakings and carrying out any operations itself, or having power to precept on the rates. They remind me of the experience which I have almost every week, certainly every month, when, in a Home Office Department for which under the Home Secretary I am responsible, we try to set up some new penal centre. We get the same reaction every time. Everyone says, "Yes, this is very necessary, we must have it—but not here." In the same way, all over the country people are saying, "We must take action to end transport chaos and have a decent transport system." But when we take action in the matter and indicate a way to do it we encounter this opposition.
I do not make any complaint about that but let us realise that local authorities represent vested interests. Those which have transport undertakings of their own want to maintain their ownership and control. Many which have not are afraid that the new arrangement might place added burdens on the rates and they are loath to give anything to the new body which the Bill will create.
The present fragmentation of control in the operation of public transport is about the worst possible way to organise public transport over a more or less continuously built-up area. Consider Manchester, one of the conurbations we have
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in mind. The prospective Greater Manchester Passenger Transport Area has 10 or 11 municipal operators and a number of smaller ones. Perhaps one of the operators might, but does any noble Lord imagine that all the 10 or 11 would write in and say, "We want to be combined in this way"? I cannot imagine it. Therefore, we must find some way to harmonise the conflict of interest that only too easily can arise, and weld them together for the common good of the community as a whole.
The steady increase in car ownership will increasingly choke our towns and in the process will increase difficulties for public transport unless some action is taken to co-ordinate the various services, including rail, and to bring them in harmony.
If new forms of urban public transport are to be introduced to cross local boundaries an organisation must be set up to plan, build and operate them. Once you accept, as I hope your Lordships do, that there is this need to deal with the increasing traffic chaos in our cities and to provide an efficient public transport service, there is everything to be said for the proposals in the Bill and, in my view, nothing to be said for this Amendment. It must be for the Minister of Transport, as the agent of the Government, to act to solve these problems, and I submit that if noble Lords opposite persist in their Amendments they are ignoring the public need and in effect are saying, "Let chaos continue".
Somebody must take the decision to override narrow, sectional interests so that we can serve the wider public interest of the area as a whole. Not, of course, without consultation—certainly not—but anyone who has had experience of these matters knows that a decision has to be taken by someone.
Can anyone imagine the eighty local authorities in Manchester getting together and coming to a decision and writing jointly to the Minister about it? But that is exactly what this Amendment asks for. I cannot imagine that eighty local authorities are going to agree, at least not in the first instance, about anything at all.
When we discussed the previous Amendment the noble Lord, Lord Nugent of Guildford, said "What did

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noble Lords opposite do when we introduced the London Government Bill? They opposed it tooth and nail." But did noble Lords opposite subject their proposals about London Government to the veto of the local authorities? Of course they did not.
LORD NUGENT OF GUILDFORD: May I interrupt the noble Lord to say that we did not subject it to local government, but we did subject it to a Royal Commission.
LORD STONHAM: That is a herring which will not swim anymore.
LORD NUGENT OF GUILDFORD: Oh!
LORD STONHAM: Certainly it will not. In the discussion on the previous Amendment I dealt with the question of the Royal Commission. I made it perfectly clear that in creating these passenger transport areas the Minister would have regard to the recommendations of the Royal Commission. But that is not the Amendment we are now discussing. This Amendment says that we cannot move until after consultation has taken place, and local authorities representing the majority of the electorate in the areas so request jointly in writing. If noble Lords opposite had followed that course, which they now say that we should follow, with regard to the London Government Bill, we should never have had the London Government Bill at all: absolutely not. That is certain. I know enough about the former London boroughs to be quite certain about it, and noble Lords know that I am merely stating the fact. It would have been vetoed had it been put to the vote of the local authorities which then existed. We should have been waiting now if we had waited for them to send in a joint written request.
Frankly, that is exactly what this Amendment is about. I regarded the previous Amendment as virtually a wrecking Amendment, and this one is of the same order. Noble Lords are asking us to do what they certainly would not do themselves. They are saying that the Government should sit back and wait for requests in writing about reforms to be made. They are asking for a referendum at one remove, something we have never had: a negation of Parliament. That is
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no way to conduct the affairs of the country, particularly a complex technical operation like public transport. I believe that I have correctly described what this Amendment is about and why it should be rejected.
LORD DRUMALBYN: What depresses me about the way the noble Lord has been replying to this Amendment is the frequency with which he uses glib phrases like "transport chaos". If seems to me that he does not understand the basic proposal here. Surely it is this. The Government are proposing to set up a vast transport agglomeration (let me call it, if that is not too ugly a word), and in the area covered there are to be a number of planning authorities. How are these transport authorities going to help with the traffic chaos about which the noble Lord talks? When we come to subsection (3) the Government give some indication of what they h we in mind. But the fact remains that it will not be the Passenger Authority who will reduce the transport chaos; if it is anybody at all, it will be the planning authorities.
The noble Lord is really wide of the mark in talking of setting up these bodies in order to remove the transport chaos. How are we to get co-operation between these bodies? The answer must be that it will have to be voluntary cooperation. Only if the Transport Authorities are set up with the full support of the Minister will they get the best results. Surely the noble Lore must assent to that proposition. He asks how we are going to get the bodies to join together; and he talks about imagination. But one can easily imagine ways of these bodies getting together. Conventions can be called, as has been done many times in political affairs, and these bodies can be persuaded of the advantages of Transport Authorities. It is because the noble Lord cannot persuade them that he is enforcing this upon them. It is because he knows he cannot do this that he is reluctant to accept this Amendment. I am not saying that this Amendment is perfect—I recognise that it is defective. But it is drafted to be in line with the consultation procedure which the Government have in the Bill under subsection (2). What is suggested here is that the Minister must not only consult but also get the consent of the

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local authorities representing a majority of the electorate in that area.
LORD STONHAM: The noble Lord said that the Amendment is defective. This is the same Amendment that was debated at great length in another place. If it was defective, why did the noble Lord not put down a different Amendment?
LORD DRUMALBYN: This is a slightly different Amendment. Perhaps the noble Lord has not compared the two accurately. I believe that it is necessary to get the voluntary consent of the local authorities if the Minister is to succeed. I can tell the noble Lord that we are not pressing this Amendment to a Division, but we would press upon the Government the necessity to carry the local authorities with them. They are not going to do this by picking them off one by one and sending letters asking for their comments. Let me tell the noble Lord that if he wants to get the support of the local authorities, he has to launch a massive public relations exercise to show what the advantages of the Transport Authorities are going to be, and he does not deserve to get that support until he has done so. It is only by persuasion that he will be able to do this. I would urge the Government to consider how they are going to carry the local authorities with them, because this is of the greatest importance. Having said that, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
8.28 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 29:
Page 13, leave out line 10.
The noble Lord said: Here we are dealing with persons appointed by the Minister. We know from another place what the noble Lord is going to say in support of the Bill; that is, that it would be a good thing if the authorities had some members experienced in certain aspects which are not perhaps covered by the 22 representatives appointed by the local authorities either jointly or singly. But the noble Lord must see that there is a great danger that if he does this these members may determine the issue. This would be catastrophic. It would run contrary to the whole principle of local responsibility. I cannot for the life of me see why this
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should be necessary. It always is possible to get expert advice. But why we should make the experts members of the authority with voting power, we on this side fail utterly to see. The case has simply not been made out. The Government must really exercise some restraint in this matter and not try to get control of the passenger transport authorities like this. It will not do. I hope that the noble Lord will agree to accept this Amendment to leave out, "persons appointed by the Minister".
LORD STONHAM: I am not at all convinced by what the noble Lord has said. The Minister proposes appointing one seventh of the members of the Authority from among persons who have special knowledge of or qualifications for work of this kind. Apart from expenses, these are honorary appointments; they are not salaried posts at all. The noble Lord said that it would be quite wrong if the Minister's nominees were to control the issue. I cannot see how it is conceivably possible that they could do so. If it is a Transport Authority with 15 members, the Minister would appoint two; if it had a membership of 25, he would appoint three. They would probably be local men. The noble Lord shakes his head. I do not know whether he is dissenting.
LORD DRUMALBYN: Yes, I was dissenting, because you can never see in advance how a vote will go. It may well be that the three people or the two people may sway the vote one way or the other.
LORD STONHAM: That is quite right. That would be reasonable evidence that they were right and that they gave sound advice. Let us just consider this position. Take a conurbation of 80 local authorities who, from among them, will be appointing 22 members of those local authorities to represent local interests. It seems to me highly likely that they will appoint the best possible people from their midst. The noble Lord, Lord Nugent, said a little while ago that that would work out to about one to every four local authorities. There is bound to be keen discussion as to whom they appoint, and they will do their best to get on to the authority the best people in local government. They will be in a majority of six to one. I do not find it conceivable, therefore, that the Minister's

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appointments should dominate or, as the noble Lord said, control the issue.
LORD DRUMALBYN: Could control the issue, I said.
LORD STONHAM: The noble Lord said that it would be quite wrong if the Minister's nominees were to control the issue. If he means that they were somehow to dominate the Authority for the wrong reasons, then I should agree. But if the subject under discussion was one on which the Minister's nominees had particular knowledge, and they were able to persuade the Authority that a certain thing was the right thing to do, then that would be highly desirable. That is one of the reasons why the Minister would appoint people. That is the whole object of this provision. The Minister is not taking any part in deciding who the local authority representatives will be, and when they are appointed it may well be that collectively they will be deficient in some particular field or background of experience the inclusion of which most of us would think was desirable. The intention is that the Minister should endeavour to fill any gaps of that kind by these appointments. The noble Lord said that he knew exactly what I was going to say, because he had heard it all before in the other place.
LORD DRUMALBYN: The noble Lord has now said it.
LORD STONHAM: I think the noble Lord will agree that I have refrained from making any kind of quotation from the other place, and I have not used a brief. I have just used common sense. I have had some small experience of the appointment of members to committees, both as a Minister and at the receiving end. This is very much the kind of procedure that I tried to adopt; looking for people who knew what they were talking about. This is entirely what the Minister has in mind. If he is going to have any representation at all, I should have thought that an undertaking that it would not exceed one-seventh was reasonable. It does not mean that it has to be one-seventh. The Minister says that in no circumstances will there be less than 85 per cent. of local authorities on the P.T.A.s, but that he may appoint as many as 15 per cent. who are not members of the local authority.
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There is a further important point about which I am sure the noble Lord, Lord Drumalbyn, will agree with me. We should like to have worker representation on the P.T.A.s. I mentioned just now that most of these authorities have Conservative majorities, and there are not quite so many representatives of the workers among the Conservative members of the councils as we would want to have. If there is a deficiency in that respect, there again the Minister will give particular attention to appointing people from the workers who are likely to make a contribution. I think this is one of the most sensible provisions of this clause, and I am quite unable to see what the noble Lord is afraid of. If the position had been reversed and this was a Conservative Government and e Conservative Minister, then I think inevitably he would have had precisely the same proposal put forward, and for the very same reason. In view of that explanation, I hope the noble Lord will not wish to press his Amendment
LORD DRUMALBYN: It was not my intention to press the Amendment, but, if I may say so with the greatest respect to the noble Lord, he has given me exactly the answer which I expected and with which I knew I should be extremely disappointed. The noble Lord was taking great credit for the fact that this was going to be local authority controlled, and he now injects nominees of the Minister. Whatever that is, I think we must agree that it is not local authority controlled. He then says, as I expected him to say: "It may make up for deficiencies in the qualifications or experience of the Authority." But the Authority is not an executive body. It is really much more in the nature of a council than an authority. It hay particular functions. Perhaps the moat important of its functions is to give its, consent and approval to the expert proposals put up to it by the Executive. It has to decide, also, on whether a deficit should be incurred on any particular services, and if so, how much. I should have thought that these were matters that particularly required expert opinion.
Here one is really asking only for representation and common sense. That being so, I should have though; the Minister would be very careful indeed not to depart from the representative

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aspect. Above all, I should have thought that in no case should it be possible for a nominee of the Minister to vote on matters concerning the precepts to be laid on the authority. This, it seems to me, would be quite unjustified. But I leave that with the noble Lord and would ask him to consider it before the next stage. We think that this departs from the proper structure of a local authority body. It would be different if the local body were allowed to co-opt—many local authority bodies are allowed to co-opt—and if there were deficiencies it could co-opt to meet those deficiencies. But we think it is not justifiable that the Minister should nominate on to a local authority body.
LORD STONHAM: I am seized of the point and, without giving any kind of undertaking as to the outcome, I will certainly consult my right honourable friend about the point the noble Lord has raised: whether or not the Minister's nominees should vote in matters that concern their precepts.
LORD DRUMALBYN: I am much obliged to the noble Lord. Of course, if experts are required—and I know it is not only a question of experts, but the noble Lord has indicated that there might be occasions when they are—I would think it very unlikely, very rare, that of the large number of bodies one would not throw up a trade unionist or somebody with experience of manual work or something of that kind, or even in transport. I should have thought that that was very unlikely. But I would suggest to the noble Lord that there is quite a lot to be said for the assessor principle, if you want to get experts there—people who would come and advise but not vote—and certainly so far as the precepting ("requisitioning", as we say in Scotland) is concerned, in these cases they ought not to vote. Does the noble Lord want to intervene again?
LORD STONHAM: The noble Lord mentioned experts. It is the Executive who will have the real experts. There is merely a greater diversity of experience in the Authority.
LORD DRUMALBYN: I think we can leave it at that. I think we both see the other's point of view at any rate on
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this occasion, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.42 p.m.
LORD HENLEY LORD HENLEY moved Amendment No. 30:
Page 13, line 11, leave out paragraph (b).
The noble Lord said: I beg to move Amendment No. 30 on behalf of my noble friends. I wonder whether it would be for the convenience of your Lordships if I put several Amendments together? What I should like to do, if this is agreeable to your Lordships, is to take Amendments Nos. 30, 37 and 65, which all run together and are interlocking, and discuss them, and with them consequential Amendments (I will give your Lordships the numbers, though I do not think you need pay very close attention to them) Nos. 66, 69, 70, 71, 72, 73, 76, 91 and 92. Those are all consequential on the three Amendments which contain the "meat" of what I wish to discuss. At the same time, I would also deal with leaving out Clauses 10, 11, 12, 16, 17 and 19; those are also consequential to the main argument.
Amendment No. 30 does away with the Passenger Transport Executive, which seems to us to have quite unnecessary powers; and it and No. 37 substitute a different system of control altogether from the one the Government propose. Amendment No. 65, which is the third of the ones that run together, is self-explanatory. It deals with grants for unremunerative passenger transport services. We would much prefer to see the establishment of regional transport authorities in place of the partly defined areas referred to in Clause 9 of the Bill. I think that regional government is already accepted in principle, and therefore it follows that there should be regional transport authorities; that is to say, larger ones than those laid down in Clause 9. We think that the areas which Clause 9 suggests are too small.
I am afraid that I did not explain myself at all well to the noble Lord, Lord Popplewell, when we were discussing Amendment No. 37. I still feel that it is short-sighted to legislate in this respect before the Royal Commission on Local Government report their suggestions. On the other hand, I said—and this is why

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we abstained on the Conservative Amendment—that I was partly convinced by the Government's argument that there is some urgency here, and the implementation would in fact take a very long time. Nevertheless, I did say then that I hoped it would be possible for the Government to have private consultation with the Royal Commission to find out how they are thinking: and the noble Lord, Lord Nugent of Guildford, made this same point. I said exactly the same thing some months ago when we were talking about the Derby Order. At that time the Government said that of course it was quite impossible for them to have any consultation with the Local Government Commission that this would be improper. I do not think it is. I think it is vital. There is far too much secrecy in all this sort of thing, and the Government ought in fact to be consulting at a private level before the Commission report to find out what they are thinking. This is why I think the noble Lord, Lord Popplewell, could not understand why we as Liberals were not prepared to go into the Lobby with the Government on that particular Amendment.
I have a feeling that it is much cheaper to operate, say, 12 regional areas than the 60 smaller ones envisaged in the Bill, and I think this also means fewer civil servants. There are, so far as we are concerned, objections to the make-up and personnel of the P.T.A.s being dictated by the Ministry of Transport, which we feel is not exactly a democratic arrangement. The Minister will designate after consultation with local authorities, and we wonder what happens when clashes arise between the Minister and local authorities.
If your Lordships will look at Clause 10 of the Bill you will see the exceedingly wide and dangerous powers for the Executive, and we feel that these greatly exceed those which the task of co-ordinating transport needs. Similarly, it is unnecessary for the P.T.A. or the Executive to operate transport in their own right. Such an operation would have no incentive, no profit motive, so necessary for productivity. Clause 10 also gives the Ministry of Transport powers for wholesale nationalisation and enables it to trade in direct competition with private enterprise in services which
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are not related to transport, and that I think is the part we object to most strongly. We have had a very full discussion over the three Amendments on P.T.A.s that have gone before and I do not want to go on too long on this subject. We did not support the first Conservative Amendment, and indeed, I think, would probably have voted with the Government on the second one—I am not sure about No. 29—because we felt that this suggestion of ours is possibly a better one, and certainly a wider one, than the Conservative Amendment. It is a very thin Committee and I do not know whether I shall get any support, but at any rate these are ideas which we feel are in line with what we say, and what I myself said on Second Reading, and I shall be very interested to hear what your Lordships have to say. I beg to move.
LORD DRUMALBYN: I wonder whether I could say a word or two about this Amendment, because there is information I should like to obtain on this Amendment from the Government? I have quite a lot of sympathy with this Amendment, but I am not wholly in step with the arguments on which it is based. I would doubt whether is would be right to convert passenger transport authorities into regional transport authorities. This does not seem to be really within the concept of the Bill because, as I understand it, the passenger transport authorities are supposed to dual with conurbations. It is not a question of dividing the whole country up into transport areas, but of dealing with conurbations.
I should just like to refer, however, to one of the difficulties that I mentioned before. That is that one advantage of having somewhat wider passenger transport authorities would be that it would then be possible to have this cross-subsidisation between rural and urban passenger transport that now exists and on which a good deal of the rural transport is based for survival at the present time. That is one point that I hope the noble Lord will comment on, because I think it arises out of the argument which the noble Lord, Lord Henley, has put up.
The second and, I think, much more fundamental thing is this. I am not quite sure why the Government have decided to have Passenger Transport Authorities

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as well as Passenger Transport Executives. Surely it would have been possible to have joint authorities. The noble Lord was talking about police authorities in connection with a slightly different question, but it would have been possible for the joint authorities to operate a joint transport undertaking, in the same way as the single authority operates an undertaking. In any case, we are not at all sure that it is right to vest the assets in the Executive and to take them away from the Authority.
We think there is a great deal to be said for vesting the assets in the Authority and letting the Executive utilise them on a kind of agency basis—that is, if we need a separate Executive at all. I cannot help thinking that the real reason why the Government have got stuck with an Executive is that they started from the conception of an Executive. This was clearly indicated by the speech of the noble Lord, Lord Hurcomb, on the Second Reading. He said that he greatly regretted the departure from the concept of the independent public authority—which would be simply the Executive, if the Executive had no Passenger Transport Authority over it. The difficulty then would be that there would be nobody except the Exchequer on which to off-load the deficits, and doubtless this was why the Government had quickly to decide to put in what I maintain is a weak and, to some extent, sham body, the Authority.
LORD POPPLEWELL: Surely the noble Lord is taking comments made by the noble Lord, Lord Hurcomb, out of context. The reference made by Lord Hurcomb was to the various Executives—the Railways, the Docks, British Road Services and the other Executives under the overall control of the authority. In so far as the regions are concerned, there have been no consultations and no definite blueprint of how the regions would operate.
LORD DRUMALBYN: If the noble Lord will re-read Lord Hurcomb's speech I am sure he will see that what he was talking about was a public authority, in the sense of an independent public authority, and he was regretting the decline of the public authority as such. He regretted that the public authorities were not really provided for in this Bill,
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and said he did not like the kind of mixed responsibility, the lack of clear-cut responsibility, that this present setup suggested. At any rate, this is how I understood his speech. However, we can both re-read it and perhaps have a talk about it.
In my view, it is because the Government started from this conception that we have the Executive in at all, and my purpose in rising is to ask the noble Lord to explain why it is necessary to have an Executive. Although, as I say, I do not go along with all the arguments on which the noble Lord, Lord Henley, based his advocacy of this Amendment, why should not the Government accept it, get rid of the Executive and simply have a joint authority?
8.55 p.m.
LORD STONHAM: I am extremely grateful to the noble Lord, Lord Henley, for his helpful suggestion that we should have one discussion on this substantial number of Amendments which, taken collectively, deploy what I think I might call the Liberal alternative to the proposals in this Bill, at least so far as Part II is concerned.
The noble Lord, Lord Drumalbyn, asked me a question to which I should like to reply first. He asked me why we did not have joint local authority transport undertakings; and he strongly suspected that it was because we started with the conception of a Passenger Transport Executive, could not get away from it, and that in any case we had to have the local authority above the Passenger Transport Executive because otherwise we should have to off-load any deficit arising on to the Exchequer instead of on to the local authority. We are getting some very revealing observations from the former Conservative Ministers. It seems to me that in the past, they were thinking in these terms, and have therefore concluded that we are thinking in the same terms now. This is not so. We agree that it would be attractive if the local authorities joined together to form joint local authority transport undertakings, but the fact remains that they have not done so. I do not mean that they have not done so anywhere, but that they have not done so in the sense that we want; and there is not the slightest chance that they will have in mind far-reaching proposals of this kind.

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I am sure that the noble Lard will agree with me that if I went to those 11 municipalities or county boroughs in the Manchester area and said "Come on, join together and give up your bus services", they would see me in Halifax before they would do anything about it. So it just is not coming off. But even if they did join together, although it would help, it would not achieve what we expected to achieve by this Bill when it becomes an Act, because the problem goes so much deper and wider than managing buses. It is a much bigger job and we have to make a new approach.
I do not want to spend too long a time on this matter, but I should be doing less than justice to the noble Lord, Lord Henley, unless I attempted not only to reply to what he has said but also to deal briefly with some of the Amendments and the difficulties we see about accepting them. First, may I state, quite briefly, what we are seeking to achieve? In this Bill, what we are proposing is based on three principles. First the planning of local transport has to be a function of local government, rather than of central Government. That is what we are insisting on, and that is what we think we are achieving. Secondly, the local transport in the area (the conurbation, or whatever the transport area may be) must be planned as a whole, taking in all the elements of transport in the area, including parking, and therefore it must be related to general planning. Thirdly, the planning and operation of public transport can he done intelligently only over areas which make sense in transport terms.
The noble Lord asked me to say something about the cross-subsidisation which takes place between the urban and the rural areas. As I have said, that could apply only if, in our view, this made sense in transport terms. Otherwise, it would have to be done in some other way, because in our view what has been going on in many cases is less than efficient. But the purpose of establishing the Passenger Transport Authority is to apply those three principles within the present organisation of local government which, apart from London, is rarely if ever suited to proper transport planning, especially in large built-up areas. If local government were already organised into units, as in Greater London, of a suitable size and type, the problem would be very much simpler. In some places, it is true,
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the problem may not be so acute, but in others we really cannot wait until the future shape of local government is clearer.
The first Amendment, and the subsequent Amendments moved by the noble Lord, Lord Henley, would result in completely different organisation for public passenger transport. I think he will agree that the Amendments do no more than, as it were, sketch in the broad lines of the proposals and are deficient in detail. But I hope that I can state the main principles that are advocated in this series of Amendments as follows: first, to create Passenger Transport Authorities for areas of full regional size; secondly, to give those regional authorities a planning and coordinating role, but without operating or management functions or control over services, which it is apparently intended should remain with the traffic commissioners; thirdly, that the local authorities would provide the executive arm and there would be no separate Executive body as proposed in the Bill; fourthly, the local authorities would require the Authority's approval for their major policies, and general planning would be carried out between them; and, finally, the finance for "unremunerative but socially or economically necessary passenger transport services" would be provided by the Exchequer, who would appear to have no control over the demands of the "regional" Passenger Transport Authority. The noble Lord will tell me if I am unjust in suggesting that. But, in other words, the Treasury would supply what amounts to an open-ended subsidy over which they would have no control at all.
I know that this was expounded at some length in another place in Committee, and I must say I find it extraordinary, particularly the financial provisions for "unremunerative but socially or economically necessary passenger transport services." First of all let me deal with the Amendment which we are nominally discussing, No. 30. It removes provision for setting up an Executive, which is absolutely fundamental to the Government's proposals. Without an Executive, in our view, the P.T.As. could not function, and the Transport Authority which is proposed by the noble Lord would find even its proposed limited planning and coordinating function made hopeless if it had to work solely through the multiplicity of

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existing local authorities, with their individual boundaries making no sense at all in transport terms.
Amendment No. 37 would have the effect of preventing the Minister from designating a Passenger Transport Area of less than 10,000 square miles or having less than 5 million inhabitants. Areas which fulfil those requirements would be about 100 miles across. They would cover whole regions, which would, of course, accord with the ideas on transport planning which I believe the Liberal Party hold. But certainly they would be vastly larger than any P.T.A. area which the Minister is likely to designate under this Bill.
To give one example, if we accepted this proposal it would mean that a P.T.A. centred on Manchester would include the whole of Merseyside and the West Riding—in all, three conurbations, with a vast number of local authorities—in the hundreds. It is proposed that they should act through those hundreds of local authorities and get their agreement. In Scotland the Amendment would mean that on population there could be only one P.T.A., based on Glasgow, and on area there could be only two or three for the whole of Scotland. The areas chosen under the Bill as it stands will be those over which it is necessary to plan public transport as a whole—that is, areas in which there are quite heavy and well-defined patterns of travel, especially by commuters into conurbations and big cities. In general they will be nearer in size to a conurbation or city and its surrounding transport catchment area than to a region. The first P.T.A.s which we set up will illustrate this.
Amendment No. 65 which the noble Lord, Lord Henley mentioned, proposes to delete Clause 13 and insert a new clause which will empower local authorities to require the Passenger Transport Authority to give grant aid towards running socially and economically necessary passenger transport services in their areas, and would require the Minister, with Treasury agreement, to provide the annual sums needed by P.T.A.s to meet the local authorities' demand. The drafting of the Amendment is somewhat imprecise and I am not quite clear what it means, other than as a broad exposition of doctrine. But I would ask what safeguards would
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this system provide against uncontrolled and uncontrollable outlays by local authorities at the Exchequer's expense, which is a very great difficulty indeed? Is it intended that this proposal should in fact be a blank cheque on the Exchequer? I think that these proposals would leave intolerable gaps in any legislation for the reorganisation of public transport, and although it has been very interesting to discuss them, I find it very difficult to think that they could be practically applied.
9.8 p.m.
LORD HENLEY: I was glad to have some support from the Conservative Party on this Amendment. Although they did not altogether agree with my arguments for it, they did like the idea of doing away with the Executive. Nevertheless, in spite of that, I am not going to be tempted into dividing on this Amendment, because I must also agree with the noble Lord, Lord Stonham, in a great deal of what he says about these Amendments: that this is rather a demonstration of where we should like to go in opposition to where we think the Government are going, rather than a detailed plan. I think he rather overstressed some of the failings of the Amendment. He was a little rough on Amendment No. 37 in thinking that it would make the areas quite impractical. Possibly the round figures of 10,000 square miles and 5 million population could be adjusted. I do not think there is any inherent difficulty. I think that basically the Government's areas are too small. The noble Lord said that it must make sense in transport terms and it must be related to general planning. I cannot help thinking—this is the Liberal thought on this—that the Government's areas do not altogether make sense in modern transport terms, and that the sort of areas we propose may, in the long run, well prove right and that areas which are below this in size are too small. There may be something wrong with our suggestion so far as Scotland is concerned. One P.T.A. is clearly too small. Nevertheless, I cannot help thinking that, so far as our suggestions are concerned, in ten years' time they may well prove to be nearer right than the Government's.
So far as the Executive is concerned, I feel that all the control that the Bill needs is there. I take Lord Hurcomb's

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point that unless there is an actual interest so far as transport is concerned none of these bodies will do what they are supposed to do; that there must be some force. Nevertheless, there is an amount of control here. The noble Lord did not like the lack of Treasury control over grants paid for socially necessary railways. I think this could be got over by negotiations of some sort. It does not seem to me insuperable. Nevertheless, I am not going to press this Amendment to a Division, though I am sorely tempted to because of the support I got from the noble Lord, Lord Drumalbyn. Before I withdraw the Amendment I should like to thank the noble Lord, Lord Stonham, for the extremely courteous and thoughtful way in which he examined all the proposals we put before him. Having said that, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
9.12 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 31:
Page 13, line 26, leave out ("consult with") and insert ("publish a draft of the order in newspapers circulating in the area and shall send copies of the draft to").
The noble Lord said: Amendment No. 31 goes with Amendments Nos. 34 and 35 and deals with the procedure to be adopted in subsection (2). As the clause is now drafted the Minister is under an obligation merely to consult with the local authorities concerned, both those within the area and those with areas contiguous to it; and also to give a reasonable opportunity to make representations to persons providing road passenger transport services by stage carriages within, or to and from that area, and so on. He must do all that before he may make an order.
Again, the noble Lord has referred to police authorities. Here I speak with reservations so far as England is concerned, but so far as Scotland goes, even though a compulsory order is made, the Secretary of State may still have a local inquiry to examine objections. I do not see why this should not be done in this case. Inquiries of this sort are liable to throw up many more objections and to have them more carefully examined than can be done in the case of written representations, which the Minister may only consider in writing and not probe into to any great extent. In our view, it
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would be well worth while spending any time that is necessary on an inquiry. The extra delay would be time well spent. As I have said, there are precedents in other fields, and I should have thought that this was the right thing to do.
The noble Lord may make some sport with the fact that we have put both "representations" and "objections" into the Amendment. I do not think that he would be reasonable to do so. He has "representations" already in his clause; we are providing for "objections" as well. If you were to ask, "How do you distinguish between a 'representation' and an 'objection'?", the answer is that the person making the representation or objection, as the case may be, can say, "This is an objection" or, "This is a representation", and have them treated accordingly. If he does not say so, the Minister is entitled to treat them as he wishes, either as a representation or an objection.
This is a minor point that could quite easily be cured from the drafting point of view if it is thought that the combination of "objections" and "representations" in the same Amendment is not practicable. The gist of this Amendment is simply that sixty days are to be given after the publication of the draft order, which would have to be published in the newspapers circulated in the area, and copies of which would have to be sent to the local authorities concerned. Sixty days would be given during which representations and objections could be made, and apart from that the normal procedure would be followed in the case of objections which were made and not withdrawn. So far as representations are concerned, all that is required is that the Minister should consider them.
I commend this Amendment to the noble Lord. I think it would be time well spent to have a public inquiry should there be objections to the Order. Perhaps before I sit down I should say that of course this is not just a question of the designation of the area. The Order covers many more matters than that. The Order may do quite a lot of things, as one can see from the Schedule concerned (I think it is Schedule 5) which gives details of what may be included in the Order, which are quite wide and considerable. For that reason alone, I think it would be worth while to allow

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objections. If the Minister is going to lay down the composition of the executive and of the authority in the Order, and is going to say which authorities are to have representatives and which are to combine to appoint representatives, then I think it is legitimate to allow objections to be made and to be thrashed out at a public inquiry. I beg to move.
LORD LEATHERLAND: I really must confess that I do not understand the incongruity of this Amendment when we bear in mind the crocodile tears that were shed from the other side earlier this evening with regard to the importance of local authorities. The Bill as drawn calls upon the Minister, before making an Order, to consult every local authority in the area. The Amendment of the noble Lord, Lord Drumalbyn, would merely ask them to send a copy of the draft Order to the local authority and would give some precedence to advertising the draft Order in the local newspapers. I think this is snubbing the local authorities after what we heard earlier about the necessity for treating them with respect. I think this Amendment has no merit whatsoever.
LORD DRUMALBYN: As I said earlier the Government are already consulting the local authorities. As I have already mentioned, they are bound to consult the local authorities, and it really is not necessary, in my view, to put it in the Bill.
LORD LEATHERLAND: Then why should we cross out from this clause the obligation which is put upon the Minister—the dictatorial or bureaucratic Minister, if you like—to consult the local authorities? Let us leave it in and have the local authorities treated with respect.
LORD ST. HELENS: I wholly and absolutely disagree with the noble Lord, Lord Leatherland. I strongly agree with my noble friend who has moved this Amendment but I do not know whether he will press it to a Division. I happen to have had recently local experience, although not absolutely connected with this Bill. There was a Government proposal to strengthen a local road, and some officials from the county council came down and said that it was to be
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done with a view to making it a feeder road for the M4, and that they had acquired certain portions of the land. Indeed, I have just written to the Minister about this. There has been a great deal of alarm among local people because they do not know what is going on in their own area.
Those of us who have the good fortune to sit in Parliament and to hear the great debates know what is going on, but we fail to realise how little the local people know about the great plans which are being formulated for roads, transport, and all the rest, for their own areas. They hear all the rumours which circulate about these matters and they get worried about what is going on. This Amendment can allay the fears of people in the localities. If one publishes the draft of the Order in newspapers circulating in the area, then everybody in the area will know the intention of the authority. This is an admirable suggestion, which I very much hope the Government will accept. I cannot see why they should refuse it, since it seems so sensible and desirable.
LORD STONHAM: We hear some extraordinary things. Here I am confronted with an Amendment which says we should leave out the words "consult with". In other words, if I am to take the noble Lord, Lord Drumalbyn, seriously, he does not want us to have any statutory requirement to consult all the local authorities. I agree that a sensible Minister, like my right honourable friend, will consult and will have a great deal of consultation with the local authorities and does not need a statute to do so. But we are legislating not only for a Labour Minister of Transport; we have to think of the awful possibility that there might be a Minister of Transport of some other colour. Therefore, I am astonished at the noble Lord, Lord St. Helens, a distinguished former Deputy Chief Whip in another place, encouraging his noble friend to put forward suggestions which are almost unconstitutional.
Perhaps I will put the matter right by suggesting to the noble Lord, Lord Drumalbyn, that Amendment No. 31 is a paving Amendment for Amendment No. 34, which is the substantive Amendment, and that Amendment No. 35 is consequential on No. 34.
LORD DRUMALBYN: I did suggest that the three should be taken together.
LORD STONHAM: I am aware of that. The effect of Amendment No. 34 would be to provide that the Minister must first publish his proposals for a P.T.A., then wait 60 days for the making of representations and objections, and then, if any of the constituent local authorities or stage carriage operators in the area have objected, hold a public inquiry before making the Order to set up the P.T.A.
We have had a curious progression in our consideration of Clause 9. We started off with Amendment No. 27 which would impose a delay of at least six or seven years on the setting up of P.T.As. That was accepted on a Division by 136 votes to 65. That having been carried, we then went to a lesser instrument of delay which the noble Lord, Lord Drumalbyn, did not press. We now come in this diminishing progression to a further instrument of delay. It would mean that after we had waited six or seven years for the implementation of the recommendations of the Royal Commission on Local Government, and the Minister had at long last—it could not be the same Minister; he would be too old—decided to designate an area, he would have to advertise it and wait another 60 days and go through all the palaver which is suggested in the Amendment. This is what we are asked seriously to consider. If we did all this advertising business, the Minister would have to mount a public inquiry, he would have to appoint an inspector, notice would have to be given of the inquiry, and time would have to be allowed for people to prepare their case. The inquiry itself would take some time, and then a period of possibly some months must be left for the inspector to make his report. Finally the report has to be considered. In other words, it would take anything up to another 18 months. We are getting towards 10 years before anything can be done, by which time there will be 18 million cars on the road.
LORD DRUMALBYN: I hope I shall not be depriving the noble Lord of too much pleasure if I suggest that he addresses his mind to this on the basis that there is just a possibility that another place may not agree with this House on Amendment No. 27.
LORD STONHAM: I think I should be doing your Lordships' House a gross disservice if I suggested in this House that any of your Lordships' decisions should be discarded and the matter locked at de novo, seeing that they were taken with such enormous weight, when almost half the total Conservative strength was present to vote, and even the, I thought, quite potent speech that I made, was of no account. That is something that I cannot do. If it does eventually come back, I shall be able to quote the noble Lord, Lord Drumalbyn, and call on his support for the Commons in disagreeing with your Lordships on the said Amendment. That is something which I shall very much count on.
There is this delay of a year to 18 months suggested. Yet it is very difficult to see what a public inquiry could add. We must assume that a public inquiry would invariably be held, since the Amendment would require only one objection by a local authority or by an operator, and I am sure there would be at least one. We take this matter very seriously indeed, as it is extremely important. It is not only a question of traffic chaos; there is the enormous cost to this country of not dealing efficiently with our transport in the conurbations. Of course we are having, and will I have, extensive informal consultations among the local authorities and all others concerned, before finalising the draft Orders and before the formal consultation.
I confirm again that discussion is taking place informally, in addition to any formal consultations provided for in the Bill. We have written asking for the views of all the Town Clerks and Clerks of Councils in the areas, and we have talked to many of them. I do not believe they are quite so strenuously opposed now. I believe there is a far greater understanding of what we intend to do, and far greater approval of it, although of course some of the local noises will no doubt continue to be made for some time, because they always make the headlines. Good luck to them, so far as I am concerned.
But we shall shortly be circulating proposals to all the local authorities and the associations of operators for their views. We shall be consulting the traffic commissioners, the Divisional Road Engineers, and the Economic Planning Councils and our proposals will be published

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in the Press. If anyone wants to give us his views we shall take them very carefully into account. All this is in addition to the formal consultation. After all that, it is difficult to see what more information to help the Minister could be provided by a formal public inquiry; and, whether or not there is a public inquiry, in the last analysis it is still the Minister who must decide. He is the person responsible and he is responsible in terms of Parliament.
There have to be consultations; the Minister has to hear the views of the operators' associations; but in the last resort he must make an Order, and that Order can be challenged here in Parliament. Therefore I ask the Committee to support me in opposing this Amendment, because it would impose a delay in the major conurbations which we cannot afford and would involve the expenditure of a great deal of time and money without the possibility of serving any useful purpose.
LORD NUGENT OF GUILDFORD: I thank the noble Lord, Lord Stonham, for answering the questions that my noble friend has put to him on this Amendment and say straight away that we agree with the point with which he ended up, that at the end of the day the Minister must make the order. This is perfectly true, and as we see it his problem is that he has to carry with him a fair measure of consent and co-operation by the local authorities if the P.T.A. of the kind that we envisage is to make a success of its task. We were glad to hear that these informal consultations are going on, as indeed my noble friend Lord Drumalbyn lad said earlier. Consultations, of course, are normal; and the noble Lord, Lord Stonham, had his fun at my noble friend's expense, jeering at him for suggesting that consultations should be taken out of the Bill and saying that this would be offensive to local authorities. But we were relieved to know that, despite that, local authorities are consulted continuously, even by Ministers in this Government. So at least we have got one or two things clear.
I was very interested to hear the noble Lord, Lord Stonham, tell us that the scheme would be published. I wonder whether, before we finish, he would tell us a little more about this—for ex-
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ample, at what stage he proposes to publish the scheme. This is news. It is not in the Bill, and I think I am right in saying that it is not in the White Paper. It would, of course, be very helpful that the scheme should be published and that everybody should know it. This is taking us at least a step towards what we are asking for—that the whole local community shall be brought into it in order that a success may be made of it. I am not so sure that the noble Lord is right in saying, "What is the good of a local inquiry?". I think local inquiries have a value. After all, they are going on continuously on planning issues. I wonder whether the noble Lord is right to decry the value of them. I should have thought it was a very good machinery for informing people of all the issues.
LORD STONHAM: Perhaps the noble Lord will allow me to say that I entirely agree as a general practice, but I cannot see any value in a public inquiry in addition to all the steps that are being taken and which are required, including all the consultations.
LORD NUGENT OF GUILDFORD: I suppose, then, we must differ on this point. We on this side of the Committee think a public inquiry on something which is going to affect the whole public so intimately would be valuable, and just as it serves a purpose on other issues of importance, local and national, we feel that a public inquiry really has a value. Whilst it is perfectly true that at the end of the day the Minister has to take his decision, nevertheless, if all the pros and cons have been paraded publicly that is the best way of carrying people with you and of ensuring that you do not have a really major opposition to something that is being put forward. The fact is that the noble Lord and his right honourable friends in another place have got themselves into a difficulty with the P.T.A. idea. It is a good idea—we have conceded that—but it is part of local government and it ought to be brought within the purview of the Royal Commission's inquiry. Then the noble Lord would have had comprehensive advice on how this matter was to be fitted in with all the other problems of planning, and so on, which are all very much part of the same thing—what sort of conglomerations of local authorities

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would have to be brought together in order to set up a P.T.A., how it should be set up, and so on. These are absolutely related matters: the noble Lord has said so himself again and again.
But his dilemma here is that he is trying to legislate to set up something extremely complicated of which we have had no experience at all in this country before. The only experience of anything like it, in America, was a failure, so it really is an experiment at present, and there has been no comprehensive inquiry into it. This is the dilemma.
We have been putting forward various safeguards in our Amendments. Again, I think that the noble Lord does us rather less than justice in saying that the Amendments are intended simply to delay the general scheme. They are nothing of the kind. They are intended to try to make them workable, because the local authorities must be responsible and there must be a clear chain of public accountability. I think the noble Lord does us less than justice. We have given a lot of thought to this and we have considered carefully the proceedings in another place. If the noble Lord considers the sweep of our Amendments he will see that the broad scheme put forward is considerably amended in the light of those deliberations. We are not concerned only to wreck the Bill; we are concerned to try to improve it, to make it workable in this respect.
We think there is a good idea here which could be made workable. It is exceedingly difficult now to see just how to do it. I sympathise with the noble Lord when he makes the point that if you have a whole lot of local authorities it is difficult to get the agreement of them all, or even a majority. But this is his problem. We did not propose these proceedings that are now being legislated. We recognise that he has a problem there. We think that this particular proposal would help. He has gone halfway to what we wanted in the publication. We had not heard of that before. We should like him to go the whole way and agree to hold a public inquiry in the conditions set out in Amendment No. 34, because even if there is considerable opposition we think that on the whole the Minister will have a better chance of carrying
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people with him if it is set out in public. As my noble friend has said, we are not proposing to press this now. We should like to give it further thought. We take note—
LORD STONHAM: The noble Lord asked me a question. If he is going to withdraw his Amendment I should like to reply to this question before he does so. The noble Lord asked me about publication. The suggestions which we put to the Town Clerks and Clerks of Councils were in fact given to the Press. And they have been publicised unless the Press has refused to do so. But they have, in fact, been published. We are likely to publish the proposals which we are shortly to put to the local authorities informally. Thirdly, the most important point, that is the areas and representation included in the draft Order after the Bill is law, will also be published. There will be in the Order many procedural details that people are not interested in and we shall not publish them in the Press. All the major information will be published and a good deal of it will be published before the Bill becomes law. Therefore this should to a great extent meet the points raised by the noble Lord, Lord St. Helens. We shall do our utmost to make our views known.
Finally, I apologise to the noble Lord, Lord Nugent, if he thinks that I do him less than justice. He said it three times; so he must think so. It is always my objective to be merciful to the Opposition.
LORD NUGENT OF GUILDFORD: I thank the noble Lord for his answer to my points. May I say that the arrangements that he has explained for publication are very welcome to us. They go some of the way, at any rate, to meet the points we have in mind. As regards the rest of the noble Lord's speech I recognise that he always was a good debater. I beg leave to withdraw the Amendment.
9.40 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 32:
Page 13, line 28, after second ("area") insert ("proposed to be")
The noble Lord said: This Amendment and the next one to paragraph (b) of subsection (2) are purely drafting Amendments. To a layman subsection (2) of

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Clause 9 looks odd, because it starts by saying:
"Before making any order … the Minister shall consult with every such local authority as aforesaid—(a) the whole or part of whose area falls within the area designated by the order …"
But as they say, "there ain't one", because the order has not yet been made. Therefore my Amendment is that the word "proposed" should be inserted so that paragraph (a) would read "proposed" to be designated by the order". In the second Amendment I propose the addition of the same words in paragraph (b).
LORD STONHAM: I was not sure whether these were drafting Amendments or whether they were regarded as consequential on the Amendments to line 26 or to line 31, but in any case they are not acceptable because they raise questions about what area is "proposed to be" designated by an Order where, on a draft which originally proposed an area of a certain size, consultations have taken place as a result of which changes are made to that area with the result that the Order then becomes one which would be proposing to designate a different area. It is better to ensure that the question whether the requirements as to consultation have been complied with is determined by reference to the area finally designated, even though it has not yet been designated, rather than by reference to the areas at one stage or another proposed.
In my submission, the Amendments do not make sense in a case where an Order does not "propose to designate" any area but only to amend a previous Order which has designated an area, and where consultation is still required under the words at the end of Clause 9(2). I hope I have made the point clear to the noble Lord. If not I will write to him. We do not think that these are merely drafting Amendments. They would achieve what none of us wishes to achieve.
LORD DRUMALBYN: I am grateful to the noble Lord, Lord Stonham. He has made the point abundantly clear, and I entirely accept it. I beg leave to withdraw the Amendments.
Amendments, by leave, withdrawn.
9.43 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 36:
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Page 14, line 11, leave out from ("of") to ("safety") in line 20 and insert ("a properly integrated and efficient system of passenger transport with due regard for")
The noble Lord said: I beg to move this Amendment, in page 14, line 11, to leave out from "of" to "safety" in line 20 and to insert:
a properly integrated and efficient system of passenger transport with due regard for"—
that is, due regard for safety of operation. The point here is that it is a little difficult to understand exactly what is meant by what seems to me at any rate rather obscure wording in paragraph (i). That is why it is proposed to leave out the words:
"… due regard to the contribution to the effective implementation by the councils of constituent areas of town planning and traffic and parking policies which can be made by public transport services which through their efficiency and convenience attract persons to use those services rather than other means of transport;"
which is quite a mouthful.
The Amendment I propose is certainly more brief, and it seems better to say outright at the start what the two new statutory organisations are to achieve. When a general duty is being placed on two new statutory organisations it is surely better to be explicit and not to say it is their duty
'so to exercise and perform their function … as to secure or promote the provision for that area of such a system of public passenger transport as is referred to in subsection (1) of this section …"
Instead of all that, we should say what is intended—that is, a properly integrated and efficient system of passenger transport. It seems better to say exactly what we mean and to lay a clear duty, not one by reference, upon the Authority and the Executive.
I do not know what they are supposed to make of sub-paragraphs (i) and (ii). What is it exactly that they are to have "due" regard to—due, but not too much, regard? The first thing is efficiency and convenience that will attract people to use their services rather than other means of transport. Presumably that means cars, motor bicycles and so on. If these benefit the public services, they will help the councils of constituent areas to implement effectively their town planning and traffic and parking policies. All this amounts to is that passenger transport services should be efficient, and

1237
that that will encourage people to make use of them rather than any other form of transport.
But I must point out what is certain. These services are to attract persons by their efficiency and convenience, but there is no question of a duty being laid upon the Authority or Executive to try to attract users to their services through their cheapness. I am glad that that is so, because it is almost always bad business and bad economics. It would result in higher rates, and therefore in higher costs of production for industry. Under sub-paragraph (ii) the Authority and Executive must have due regard to economy and safety of operation. I wonder whether it is really necessary to tell them that. There are plenty of other things to which they ought to have due regard. Or have these words a special meaning relating to the construction of vehicles and their manning? We ought to know what is intended here. Is this tied up with the Government's restriction in granting licences to vehicles of approved types?
Economy and safety often pull in different directions. I have seen this in days gone by on the Paris buses, absolutely swarming with people, where no doubt economy and safety were definitely pulling in different directions. I should have thought that economy was such an obvious duty of any public body that it was not necessary to state it. We should therefore be grateful if the noble Lord would give an authoritative explanation of the meaning of these paragraphs setting out the things to which the Passenger Transport Authorities and Executives are invited to have due regard. I beg to move.
LORD STONHAM: I am grateful to the noble Lord for his explanation of this Amendment, and appreciate his desire, as he said, to make the meaning clear. The effect of the Amendment would be to remove the injunction on the Authority and the Executive to have regard, first, to the assistance which public transport can give to planning, traffic and parking facilities, and, secondly, to the need for economy of operation. As I think the noble Lord indicated, his Amendment takes a different line from the Opposition Amendments that were put down in another place on this same clause to amend the first parts of the injunction.
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I think the noble Lord will agree that in the debate in another place there was very little between the two sides. Everyone wanted public transport, town planning and traffic and parking policies to be harmonised. But it was not possibe to accept the Amendments in another place, because they raised various practical difficulties and certainly we have been unable to formulate wording which better expresses the intention than the wording in the Bill at present. I listened particularly carefully to what the noble Lord had to say to see whether he woud introduce any new ideas as to why we should amend this first part of the injunction. I do not deny that an injunction has no statutory force, but at least it points the Authority and the Executive in the right direction, and it provides a peg on which my right honourable friend can, as it were, hang exhortations and encouragement subsequently. That is the purpose for which we shall use it.
But there are some difficulties in the way of making it more positive. There are so many local authorities each with their own (possibly conflicting) planning, traffic and parking policies; many of them are in the process of revising their plans; and the whole basis of planning is itself under revision. So it is difficult to frame a definite requirement which could not have undesirable consequences. Much the same can be said about the removal of the injunction to have regard to economy of operation, which of course in another place the noble Lord's right honourable friends did not want to remove, because it points the Authority and Executive in the right direction and as soon as you try to make it more explicit difficulties arise. I think this is our common experience.
Therefore, I cannot accept the Amendment. But I should like to bring to the notice of my right honourable friend what the noble Lord has said, to see whether we can come up with anything better. The noble Lord will appreciate that I cannot give an undertaking in the matter, but we will try to see whether we can do something better than is now before us.
LORD DRUMALBYN: I am much obliged to the noble Lord. I think it would help if, in a declaratory paragraph

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of this kind, the matter was fully declared and not dealt with just by reference. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE DEPUTY CHAIRMAN OF COMMITTEES (LORD AILWYN): Amendment No. 37, Lord Wade.
LORD LEATHERLAND: Would it not be polite of us, in the absence of the Liberal Party, except for one member of that Party who has just walked in, to defer consideration of this Amendment until they are present in force? It may be, of course, that they are at some private meeting trying to suppress the revolt of the Young Liberals against the leadership of Mr. Jeremy Thorpe, or dealing with some other important matter of domestic business. But it seems unkind of us to embark on consideration of this Amendment in the absence of most of the members of that Party. A few minutes ago I would have said, "all members of the Party", but out of deference to Lord Henley I admit his presence.
LORD HENLEY: I thought I made it clear, when I moved Amendment No. 30, that Amendments Nos 37 and 65 went with it. I asked your Lordships' permission if I might discuss them all together, which you so kindly gave me, and we had a most interesting discussion, which was analysed, if I may say so, with great charm and brilliance by the noble Lord, Lord Stonham. Later, I withdrew Amendment No. 30, and I believed that other noble Lords, unlike the noble Lord, Lord Leatherland, would assume with me that Amendments 37 and 65, and various other consequential ones, would not be moved.
LORD LEATHERLAND: So far as the Liberal Party is concerned, I would not assume anything.
Clause 9, as amended, agreed to.
Schedule 5 [Passenger Transport Authorities and Executives]:
9.58 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 38:
Page 213, line 29, leave out second ("such") and insert ("each").
The noble Lord said: The point of these two Amendments, 38 and 39, if
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they may be taken together, is to alter the constitution of the Passenger Transport Authorities. At present the Schedule says that the Authority shall consist of
"such number of members appointed respectively by such of the councils of constituent areas, or by such two or more of those councils acting jointly, as may be specified in the order".
The word to be left out is the second "such", and that would be replaced by "each":
"such number of members appointed respectively by each of the councils of constituent areas … as may be specified in the order".
I realise that the noble Lord's conception of what the authority should be, and ours, are totally different. We would conceive of the authority as being fully representative of the local authorities. Once we reach a number which is really above that of an executive body—something between, let us say, 5 and 15—it does not really matter how many we have. It is much better that the body should be fully representative.
If we have a rather large body we are obviously going to have the leaders; we are going to have a committee, a general purposes committee or something of that kind, and that is going to do a great deal of the work. But the main thing is that, so far as the precepts and the requisitions and the plans and the organisation and all the rest are concerned, they should be approved by every single one of the authorities. Everybody should be entitled to have at least one representative.
I see no objection to having something like a local assembly to deal with a matter of this kind. It seems to me that you would then get a satisfactory reporting back to the individual constituent councils. I cannot for the life of me see how you can possibly get a reporting back to individual councils if the individual constituent councils have no representative on the Authority. Obviously it would not be a case of every authority having just one representative; and the series of Amendments provides for this. It would be for the Minister, if we take Amendment No. 42 along with this, to take account of the population and of the rate of the penny in the pound. So the larger authorities would have a proportionate number of members, but no

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authority would have less than one member, even if it were very small. Of course the number of authorities concerned is already limited by Clause 9. They are the councils of counties, the county boroughs and county districts; therefore it would not be too great a number. I doubt whether in Manchester there would be 80. If I understood the figures correctly it would be more like 50 or 60.
But we are here confronted by a different conception altogether, and we are not convinced that an Authority of even 25 would be an effectively representative body. It is too small to be representative and too large to be effective as an executive body. It falls absolutely between the two stools, and as between the two there is a small Executive we think it would be much better to have a fully representative Authority which could make its own arrangements to make itself completely efficient in dealing with the business. I beg to move.
LORD STONHAM: I do not want to exaggerate, but I must remind your Lordships that we are dealing with an Amendment to leave out the word "such" and insert "each". If I am to take that literally, as I must, it means that if it were accepted every one of the local authorities in a Transport Area would appoint at least one member to the Authority. That is what the Amendment says.
LORD DRUMALBYN: This is already limited by Clause 9, is it not? Our intention, at any rate, was that it should be limited by Clause 9, which lays down the persons appointed by local authorities. It would not be possible under Clause 9 to deal with this matter in the manner suggested by the noble Lord because the Schedule is governed by Clause 9, which says quite clearly that the Order would be constituted in accordance with Part I of the Schedule to this Act, from:
"persons appointed by local authorities whose areas fall wholly or partly within the area designated by the Order …, being councils of counties, county boroughs or county districts".
LORD STONHAM: I am perfectly aware of the fact that the Schedule is governed by Clause 9. That is why we are dealing with the Schedule immediately after finishing consideration of Clause 9. But, despite that, the Amendment would. as I say, provide a totally unwieldy body
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which, in my view, would be incapable of effective policy decisions. A little while ago I mentioned the Manchester conurbation, where there are 80 local authorities, and I suggested that this would be a mass meeting and not a Transport Authority. But there are other, and more extreme, examples. If we had a Transport Authority composed of those authorities now comprising the South-East Lancashire and North-East Cheshire conurbation around Manchester, the Amendment could result in an Authority of at least 350 and perhaps 400 members, assuming the smallest authority to have one member and the larger authorities to have members in reasonable proportion to their rate. If we give a small local authority one member you can be absolutely certain that the larger authorities with the larger penny rate would, I think justifiably, want a larger membership. Even for a smaller conurbation, Tyneside for example, it would mean at least 35 members. So far in discussions in another place there has been fairly general agreement that the size of the membership should be roughly of the order we have been discussing tonight. In an Amendment in another place the Opposition sought to provide for a membership of 14 to 28, and in the White Paper Public Transport and Traffic the Government stated their intention of keeping the authorities to a workable size with total membership of perhaps 15 to 25. I am not saying that these numbers are absolutely sacrosanct, but I am saying that we have to keep the numbers to a workable size.
What the Amendment proposes would not achieve that. It would not be an authority at all; it would be a public meeting, and it would never get anything done. We can get a reasonably small working association only by providing for joint representation from the smaller local authorities. I do not think it is a bad thing; we get the best possible person. This would give each local authority a say in the appointments, although we would have to provide for smaller minority interests. I am not arguing as to whether the number should be 14 to 28 or 15 to 25; indeed I am not wishing to accept any particular number. These numbers I have been mentioning have only been a guide as to what we think might happen. But I think it would be quite wrong to accept this Amendment

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when nobody would really want what it would achieve, and I hope that the noble Lord will withdraw it.
LORD NUGENT OF GUILDFORD: The noble Lord has, I think, made an effective case of the size of problems you could get with a big conurbation, but I am not sure that he has dealt effectively, certainly not to our satisfaction, with the problem of getting adequate representation from each of the local authorities concerned. The theme that has run through all our remarks on P.T.A.s has been the need to get a direct sense of responsibility in the local constituency authorities so that you can really get public accountability, and we believe this is absolutely vital. I agree with my noble friend Lord Drumalbyn. Although I do not like a large Authority of this kind, I would prefer to see a large Authority which was fully representative rather than a small compact one of the kind the noble Lord indicates of 15 to 25 or 14 to 28, because really he is setting the two considerations against each other. Of course, if you are just going to run some business, anything of the order of 20 to 30 would be more than enough. But the problem of adequate representation is to our mind so overriding in importance that we would be prepared to see a bigger number there in order to get adequate representation.
The noble Lord must remember that we have moved an Amendment saying that this should not be done anyhow until after local government reorganisation, which will of course result in a very much smaller number of local authorities than now, both county borough and county district, so that we immediately begin to reduce the size of the problem to manageable proportions. I agree with my noble friend Lord Drumalbyn that one per
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local authority should be the limit. The gearing by which the penny rate proportions allowed additional members would have to be very heavily braked so that you did not get the biggest authorities with ten members, but you might get the biggest authorities with perhaps three or four members. But the concept that we are considering here is definitely on the basis of a reformed local government structure which would, I think, be manageable.
We think this is a serious suggestion, which would be an improvement to the structure of the P.T.A.s. But may be this is no point to press the Amendment now. Perhaps we could give some further thought to it in the light of other Amendments that we may have coming along in the Schedule, to see what sort of structure we can end up with to try to get something we believe will be effectively workable in terms of public accountability and that the noble Lord would feel is practicable as well. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN had given notice of his intention to move Amendment No. 40:
Page 213, line 33, leave out paragraph (b).
The noble Lord said: In view of the assurances the noble Lord has given in regard to Amendment No. 29 I do not propose to move this Amendment.
LORD STONHAM: As we have made, perhaps not as much progress as we should like, but still substantial progress. I beg leave to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

PRICES AND INCOMES (No. 2) BILL [H.L.]
10.13 p.m.
LORD BESWICK: My Lords, I beg leave to introduce a Bill to prolong the duration of certain provisions of the Prices and Incomes Acts 1966 and 1967; to extend the maximum period for which standstills in prices and charges or terms and conditions of employment may be enforced under the powers of those Acts, and to confer further powers for requiring reductions in prices and charges and for the deferment of wages regulation orders and agricultural wages orders; to limit company distributions; to limit rent increases and mitigate certain past rent increases for dwelling-houses, and to
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enable rents of local authority housing to be changed without notice to quit being given; and for connected purposes.
I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Beswick.)
On Question, Bill read 1a, and to be printed.

MAINTENANCE ORDERS BILL
Returned from the Commons with the Amendments agreed to.
House adjourned at fourteen minutes past ten o'clock.