HL Deb 19 July 1978 vol 395 cc352-89

4.34 p.m.

Baroness BIRK

My Lords, I beg to move that this Bill be now read a third time, and, in so doing, may I say how sorry my noble friend Lady Stedman is that, as she is unwell, she is not here to see the Bill through to the end.

Moved, That the Bill be now read 3a.—(Baroness Birk.)

On Question, Bill read 3a with the Amendments.

Clause 12 [National policy for inland waterway transport]:

Viscount SIMON moved Amendment No. 1: Page 10, line 43, leave out from ("transport") to end of line 2 on page 11.

The noble Viscount said: My Lords, this is a very simple Amendment. When Clause 12 was introduced into the Bill at the Report stage on the Motion of the noble Lord, Lord O'Hagan, and against the advice of the Government, speaking from these Benches I said that I welcomed the first part of the clause, but I did not think that the second part of it was really appropriate to this Bill. In winding up the debate on the Amendment, the noble Lord, Lord O'Hagan, said that he himself was not very sure about the second part of the clause.

So far as the first part is concerned the noble Baroness, Lady Stedman—and we are all very sorry that she cannot be here today—said that, in fact, it was unnecessary because the Government were actively engaged, as I understood it, in developing their policy for transport on the waterways and, in fact, at the moment were awaiting proposals from the British Waterways Board. It would not be appropriate or in order for me to speak about that part of what is now Clause 12, because that is not in question. But, so far as the second part is concerned, I can confirm what the noble Baroness, Lady Stedman, said; that is. that it is really an impracticable proposition to lay upon the Secretary of State the duty to work out: …a standard technique and standard criteria for the appraisal of all forms of transport investment, including waterways".

The noble Baroness explained in broad outline some of the major difficulties, and I think it would be foolish of us to allow this suggestion to go forward to another place. I hope that those who supported this Amendment may perhaps accept this suggestion: If we eliminate the second part of the clause, as I now suggest, there is a greater chance that the rest of the Amendment might be accepted when the Bill goes back to another place. There are a great many people who are much concerned at what sometimes appears to be the lack of any coherent policy, not only of this Government but of the last Government as well, in dealing with our inland waterways. As I think the noble Lord, Lord O'Hagan, said, this is a declaratory clause and one is not sure how much effect it has. I think there is no harm in reminding the Secretary of State, and any Secretary of State who may succeed him, that this is a problem in which Parliament as a whole is much concerned, and it is up to the Secretary of State to pursue the formulation of a proper national policy to deal with inland waterways. For those reasons, I shall move that the last part of Clause 12 be eliminated from the Bill. I beg to move.


My Lords, I have sat in this House during the passage of innumerable Transport Bills and I cannot help feeling that the Secretary of State already has a duty to produce criteria for the appraisal of all forms of transport investment. If he has not, I do not know what the various Ministers of Transport have been doing all these years. It seems rather inappropriate in a short Bill like this, particularly in a clause dealing with water transport, to put on him a great national duty which I believe he already has under other Acts, and upon which I presume he is already acting.

Viscount SIMON

My Lords, with the leave of the House, perhaps I may just comment upon that. The point is that Clause 12 as it now stands requires him to devise a standard technique applicable to all forms of transport. His obligation at present is undoubtedly to form investment criteria for each form of transport.


My Lords, we decided in this House by a considerable majority to include this particular clause in the Bill. This is a rag-hag, miscellaneous provisions Bill dealing with transport and as well as some of the less good things in it your Lordships saw fit at an earlier stage to include the subject of inland waterways on which I think there is a widespread view that a greater sense of urgency in Government circles would be welcome. I wish the noble Baroness, Lady White, had been here to reinforce what I want to say on that.

My Lords, I do not wish to debate the new clause itself. We did that before, and I shall have some more general remarks to make about waterways on Third Reading. I rise simply to support what my noble partner in transport matters, as he seems to be developing into, the noble Viscount, Lord Simon, has said. In my enthusiasm I linked two separate subjects and put them down as one Amendment. I think it would have been useful during the Committee or Report stages if we had had a debate on whether it was possible to devise a standard technique and standard criteria for the appraisal of all forms of transport investment. I think that would have been something useful to discuss.

Whether it should have gone into the Bill with this particular clause is another matter. I suggest that it would be better left out, and that for the focusing of minds in another place it would be more convenient, and perhaps more likely to lead to a better Bill in the end, if we simplified Clause 12 on the lines proposed by the noble Viscount, Lord Simon. Therefore I would advise my noble friends that I believe that what the noble Viscount is doing is not weakening the help which this Bill should give to inland waterways; it will be strengthening it by making it more workable. I support the noble Viscount's Amendment.


My Lords, I rise very briefly to support the noble Viscount, Lord Simon, in his Amendment for the reason he has already given, that this is placing an impossible task on the authorities concerned. Just to take one example, we know that sometimes railways which are losing money are kept going for social reasons, but how can you get a standard technique for something so impalpable as social reasons? In my view, the first part of the clause—that is the duty to promote a national policy—gives the Secertary of State quite sufficient powers to do anything in this way, and I think a Parliament which passed a clause like this would just be making itself rather silly.

Baroness BIRK

My Lords, the Government support the Amendment moved by the noble Viscount, Lord Simon. It has been supported by the noble Lords, Lord Hawke, Lord O'Hagan and Lord Roberthall. As noble Lords are aware, my noble friend Lady Stedman made it clear at Report stage that the Government are not content with Clause 12 as a whole, but this is not the moment to debate that issue all over again. The issue before the House at this point is whether a statutory duty on the Secretary of State for Transport to devise a standard technique and standard criteria for appraising all forms of transport investment would be reasonable and workable. In the Government's view, as in the view of all the noble Lords who have spoken, it would not. I could give many reasons for this, but in view of the willingness of the noble Lord, Lord O'Hagan, to accept the Amendment—it was he who moved the clause which is now Clause 12—and if the House is prepared to accept the Amendment, I should not wish to detain the House any longer than just to say that the Government support the Amendment.

On Question, Amendment agreed to.

Schedule 3 [Amendments about lorries.]:

4.45 p.m.

Lord LUCAS of CHILWORTH moved Amendment No. 2: Page 22, line 13, at end insert— ("Provided that the goods vehicle examiner or the constable in uniform before requiring any person in charge of a goods vehicle to proceed to a place more than one mile from where the requirement is made, shall first be satisfied that there are good reasons to believe that the vehicle is not in a fit and serviceable condition.").

The noble Lord said: My Lords, in moving this Amendment, may I say that your Lordships will recall that we discussed this subject at Report stage and, prior to that, at Committee stage. The background is that in another place the Government expressed some sympathy with regard to the protection of certain vehicle operators whose vehicles might be called in for examination which was subsequently found to be unnecessary. The negotiations apparently broke down. In your Lordships' House the noble Baroness, Lady Stedman, offered to provide for us the notes of guidance that were to be issued to examiners. The draft notes arrived last weekend and I have since had an opportunity of looking at them.

In the first place, the note reiterates the point that I have been trying to make by way of this Amendment; that is, that some measure of protection should be given to vehicle owners and operators whose vehicles may be called in for inspection and diverted for more than five miles. The document then proceeds to give some examples of the instances that may occur where diversion of over one mile and up to five miles is thought to be necessary. I do not think this is fair. We must bear in mind that three out of four of the vehicles diverted previously were found to be satisfactory. There is now a greater element of risk that the vehicles will be sent an even greater distance.

In the document there are two particular points that give rise to my thoughts in pursuing this Amendment. These are the principal criteria which in the Department's view should be applied when considering a longer diversion. It says: In some respects the vehicle ought to be further examined".

That really is a pretty open-ended piece of advice; it really means nothing at all. Then under head (b) they give two particular criteria: the need for a roller brake test or metered smoke test. Obviously a roller brake test can be conducted only in a building. But a metered smoke test is something quite different.

There are two points that arise. So far as I am aware, there is only one smoke meter in use in this country, the Hartridge, and I understand that neither the industry nor the Department are particularly enthusiastic about this particular device. It is not a very accurate one, either in terms of measurement or in constancy of measurement. It is subject very much to fluctuations due to atmospheric and other conditions; so it does not in fact have any great value. In setting down this particular device as a criteria for examination, have the Department now accepted the use of this meter as a standard procedure?

The second point about the meter is that it is about 24 inches long, with about a 12-inch circular tube attached to it and a device for fixing to the exhaust pipe. So in fact it is a very portable device. If it needs power, power can be provided either by the vehicle itself or quite possibly by a small generating set. The point is that it is portable. Therefore it could easily be taken to the point of checking, so there would be no need to send the vehicle up to five miles for a smoke test—and smoke tests are one of the more constant of the diversions. It is quite surprising how very few vehicles are found at the testing station to be defective in this respect. That is the background and my feelings as regards the draft guidelines. I do not believe that the draft guidelines provide the kind of protection which I think the industry deserves. I remind your Lordships that the Amendment merely seeks to provide the opportunity for examiners to have a second thought before diverting. I beg to move.


My Lords, when the noble Lord, Lord Lucas of Chilworth, moved a more sweeping Amendment on the subject of heavy vehicle testing in Committee, I voted against it because I thought that it went too far and that the Government's case, on balance, was far more persuasive. However, it seems to me that this far more modest Amendment strikes a fair balance between the interests of the vehicle owner and driver, on the one hand, and the interests of the general public, on the other. I hope that your Lordships will support the Amendment.


My Lords, it sounds extremely reasonable, but I do not think that it is. As regards the balance between the vehicle owner and the public, it is not a question of judging one or the other. The only argument which should be taken into account is the interests of the public. By protecting the public we are also protecting vehicle owners, because they too, if they are operating in competition with vehicles which have been insufficiently maintained, are placed at a disadvantage. I do not have the technical knowledge to know the extent to which the Government's increase of one mile to five miles is completely justified. But, having listened to the noble Lord, Lord Lucas of Chilworth, speaking on this subject on a prior occasion, I know that I shall want a great deal of persuasion about the accuracy of some of his statements which were totally rejected by the noble Baroness, Lady Stedman, who gave a completely different picture of the number of defective vehicles. May I say in passing that I deplore that the noble Baroness, Lady Stedman, is not with us this afternoon. It has been a privilege to be corrected by her both as regards this matter and on other occasions. I hope that her indisposition is not serious and that before long she will be back with us again.

Having said those kindly words, I return to the subject of Lord Lucas in a less kindly mood. The Amendment ought to be rejected out of hand. It is a device to protect the owner of the vehicle which obviously—if it is going to be moved to a place where it can be tested—is suspected of standing in need of protection. However, I should have thought that even the vehicle owner has an interest in it being tested, because if there is anything wrong with it and if damage occurs to the vehicle or to the public, he may find himself liable to prosecution, damages and so on. or that would fall on an insurance company.

Therefore, I should have thought—if the noble Lord, Lord Monson, will permit me to say so—that the test here must be and can only be: "What is in the best interests of the public?" That will ensure that all vehicles on the roads are properly maintained. If they are not properly maintained, it is, of course, not only people's property that is at risk but their lives. Our roads are becoming more and more congested, and it is becoming a more hazardous and more demanding business to drive on motorways. One only has to drive up the M.1 and become stuck behind lorry after lorry to get a pretty shrewd idea of how well they are maintained. Certainly the worst ones leave a very great deal to be desired. Not being a technical person and not having any technical information available to me, if I must choose between, on the one hand, the advice given to me by the Minister and, on the other hand, that given to me by the noble Lord, Lord Lucas, I find myself in no difficulty in making up my mind.


My Lords, surely the noble Lord, Lord Wigg, was arguing against the earlier Amendment and not this one. This Amendment talks about "good reasons to believe" and, of course, as regards the sort of vehicles which the noble Lord, Lord Wigg, suggested are in great profusion, there would be "good reasons to believe" that a vehicle was not fit. It seems to me that the noble Lord is not really arguing against this Amendment specifically. Perhaps he would like to add a few comments?


My Lords, I am inhibited from speaking again, but perhaps I can interrupt to say that "good reasons to believe" in a Statute seems to me to be absolute nonsense. What the heck does "good reasons to believe" mean? It can mean anything or nothing. I suppose, as Alice said, words can mean whatever you want them to mean and "good reasons to believe" means one thing to the noble Lord, Lord Lucas, but quite another to me. So far as I am concerned I should have thought that they were meaningless. I quite agree that there is an attempt to make this a little more palatable, but I would not have it at any price.


My Lords, to continue, it would seem to me that this is a very reasonable Amendment, as has already been suggested, and that the expertise of my noble friend is more than enough to justify his views being respected. I strongly suggest to your Lordships that the Amendment should be supported.


My Lords, this is a difficult subject and, as the noble Lord, Lord Wigg, has said, it is a technical one. We discussed it during the previous stages of the Bill. I am very sorry that the noble Baroness, Lady Stedman, is ill— am almost as sorry for the noble Baroness, Lady Birk, for having to take her place at such short notice—but your Lordships will lose collectively by not hearing what she would have said on this particular topic, because it would have been extremely interesting.

I may not have used the procedures of your Lordships' House to the best effect and I am certainly willing to be convicted on that charge. I feel that we have been given a copy of the guidance that will be issued, far too late in the proceedings. I do not know whether the noble Lord, Lord Wigg, was sent a copy, but I received just before the weekend a copy of what the Government are proposing to send out as instructions to the examiners. I took a slight exception to this earlier in the Bill, because I said that it was not in the Bill, we could not move Amendments to it and therefore it was very hard to discuss it in a serious way; and that would be so even if we had it.

Now that it is available we find that it is again complicated, difficult and technical. Moreover, it is extremely hard for the layman to penetrate the meanings of the various clauses and come up with a realistic matter-of-fact view of the sort of effect that it will have. Other noble Lords, more expert in these matters than may not suffer from that disadvantage. However, I certainly find that, having studied the guidelines, I am not much further forward in measuring this Amendment and its predecessors against them, and saying, "Where does the balance lie? Where does the public interest lie?"

The point that I am making—and it is a point to which I shall refer with more verve and vigour; I am merely putting down a marker at this stage—is that it would have been far better if we had had these draft guidelines at an earlier stage in the proceedings of the Bill, because consideration of Amendments like this one was not possible without knowing what the Government had in mind. What the Government had in mind was not in the Bill and it was far too long to read into our proceedings.

Some noble Lords take a strong view against this Amendment and some take a strong view for it. I certainly would hesitate to guide my noble friends on this subject, and my noble friend Lord Lucas of Chilworth will, of course, make up his own mind as to what he is to do. Moreover, we shall all listen to the noble Baroness, Lady Birk, with great attention. But if there is still confusion about the need, or the lack of need, for those who are driving vehicles to be protected in this way, I am afraid that the fault lies with the Department of Transport because—and this is the point that I shall refer to later on—we have not been told where the Department stands; until recently, we had not seen the guidelines. There are other things to do besides studying the Transport Bill and these guidelines are difficult to understand. It is very hard to form a judgment at short notice. I think that my noble friend has performed a valuable service by raising this point once again. There is a balance to be struck and I hope that your Lordships can make up your minds having heard the Government and my noble friend, as to who has come closest to a just and fair balance of interests.

Baroness BIRK

My Lords, we have had two entirely different views put forward by the noble Lord, Lord Lucas of Chilworth, who moved the Amendment, who was supported by the noble Lords, Lord Monson and Lord Mottistone, and the noble Lord, Lord O'Hagain, who I think indicated that his mind was rather more open than those of the other noble Lords who spoke in support of the Amendment. I am delighted to say that my noble friend Lord Wigg has come to my support in advance and wants to reject this Amendment out of hand. I think that on this he is entirely right; he expressed it in his characteristically vigorous way.

The noble Lord, Lord Lucas of Chilworth, raised the point and asked me specifically about a smoke meter. Perhaps I could answer that technical point first. The smoke meter requires very precise engine-running conditions as well as the facilities at a test station. Therefore, the roadside use of smoke-test equipment would certainly not provide sufficiently accurate measurements. In debating the circumstances in which diversions may be required, I do not think that we should lose sight of the fact that fundamentally—and this is what my noble friend Lord Wigg referred to—it is public safety that is at issue. That is really the question.

In promoting this and the associated provisions in the Bill it is not the Government's aim to make life difficult for road hauliers; or for that matter to add to the penalties that those who run defective vehicles may deservedly suffer. Our purpose in bringing forward the proposals is to help reduce the very severe dangers to life and to limb, and also to property which is contained in the vehicle and its contents, and also to other vehicles on the road. With the increase in road traffic that is occurring all the time, it is certainly necessary to reduce so far as possible the misery and injury that road accidents can entail. We believe that by sticking to this point of making it possible to extend the limit to a maximum of five miles, we can make better use of our resources and increase the risks of detection for those whose vehicles do not comply with the law.

I apologise for the lateness of the publication of the guidelines. As I understand it, it was quite impossible for them to be produced and distributed beforehand. However, the guidelines set out in detail the way in which examiners will use the power to divert lorries up to five miles. The principles underlying the guidelines were, in fact, given on 14th March during the Committee stage in the other place. Therefore, there has been quite a knowledge about the guidelines, although I accept that noble Lords may not have had as much time as they would have wished to study them.

I have listened with great care to the points made on the draft Note of Guidance. We have tried to give as clear a picture as we can of the circumstances in which the extended power of diversion would be used. We shall certainly bear all that has been said in mind in preparing the final version of the Note. As my noble friend Lady Stedman assured noble Lords in the debate on Report, we shall also be in touch with representatives of the haulage industry on this and listen attentively to any proposals that they may make before any final decision on the Guidance Note is reached.

I would remind noble Lords that, although the principle will remain the same, and the reasons for retaining this clause as it is and rejecting the Amendment that has been proposed remain constant, nevertheless, this is a draft Guidance Note and it will be possible to change it in detail in its final version. The noble Lord, Lord O'Hagan, said that he would listen to the Government's response on this. In the interests of safety on the roads and of safety of human beings, whether they are drivers of the vehicles, passengers, pedestrians or people in other vehicles, we must not water down the effect of this clause by passing the Amendment. I hope that the noble Lord, Lord Lucas of Chilworth, will withdraw it.

Viscount SIMON

My Lords, like the noble Lord, Lord O'Hagan, I have found it difficult to get this balance completely right. I agree with the noble Baroness, Lady Birk, and with the noble Lord, Lord Wigg, that of course the public interest comes first. But one has to reach a point at which there is some balance in the inconvenience and expense to which people are put. We have had many discussions in the past about random tests for people driving under the influence of drink. Most people come to the conclusion that that would be wrong; I am not sure that I do. That is the same sort of thing. Is it right to protect a number of people who are not guilty from inconvenience and delay for the sake of improving safety?


My Lords, I am much obliged to the noble Viscount, Lord Simon, for giving way. As always, he is most courteous and helpful. When he says that it is difficult to strike a balance, does he remember the figures that were given by my noble friend Lady Stedman that: By 1976–7, there were 63,366 spot checks carried out at the roadside and, as a result of these, 12,111 or 19.1 per cent. of the vehicles were found to be unfit and their use on the road was prohibited".—[Official Report, 27/6/79; col. 193.]


My Lords, this is another speech.


My Lords, that is a staggering figure.

Several noble Lords

Order! Order!


My Lords, one in five was unfit.

Viscount SIMON

My Lords, I had not forgotten that figure, but the one in five who are, so to speak, found guilty at the roadside would be those cases where the inspector would have reasonable grounds for sending them for further inspection. I think that on this Amendment that figure is a little irrelevant. My difficulty arises from looking at what the noble Baroness, Lady Stedman, said on Report. She said, on 11th July 1978, at column 1558 of the Official Report: That guidance would be based on the principle of diverting vehicles … because of conditions of weather or visibility"— that is a rather different point from the one we are now discussing— or because of the examination thought to be necessary". But I do not see how an inspector can think that an examination is necessary unless he has some grounds for so thinking. The noble Baroness continued: Examiners … must have in mind some factor or factors warranting further examination". Again, there must be some prima facie ground for thinking that further examination is necessary. So that has led me to have a certain amount of sympathy with the Amendment of the noble Lord, Lord Lucas of Chilworth. In conclusion, I believe that the noble Baroness is right and that this is a highly technical subject. It would be far better for the terms of the Guidance Note to be discussed further and agreed between the Department and the trade. With the noble Baroness, I certainly hope that the noble Lord might think of withdrawing his Amendment.

5.10 p.m.


My Lords, I have to thank the noble Baroness for her full answer, with which of course I disagree. Perhaps it would be helpful to your Lordships if I made it clear that certainly in my own mind the noble Baroness, Lady Stedman, and I were at no difference whatsoever with regard to the figures. She presented one side of the equation and I used exactly the same figures to present the other side. Where she said, for example, that one-fifth of the vehicles were found to be defective on being diverted I said, "Yes, but four-fifths were found to be satisfactory".

Of course if you take 600,000 motor vehicles and subject them to checks whether they are motor cars, motor cycles, or motor lorries, there will be a fair number that are defective. Let me remind your Lordships that where commercial vehicles arc sent for annual test the failure rate is about 21 per cent; where motor cars are sent for annual test, 35.4 per cent. is the failure rate. There are five essential tests for a motor car and 72 items for a commercial vehicle—and a cracked rear reflector can automatically disqualify the latter.

My argument is that in 1976–77, 7,000 commercial motor vehicles were diverted one mile to have further tests made; 1,200 were found to be below par; 5,800 went on their way. There can be no doubt that with a catchment area 25 times larger than currently in use, more vehicles are going to be caught, as it were, in the net. With the guidelines set as they are it would not be unreasonable to suppose that an even larger number of vehicles will be diverted through the five miles.

As I explained previously to your Lordships, this is something like 17 miles in a round trip, and it seems quite reasonable that much the same proportion of vehicles will he found to be defective and the same proportion found to be satisfactory.

It seems to me, therefore, that it is only reasonable in the interests of safety that those owners and drivers of vehicles which, on the Government's own figures, have proved to be satisfactory should have some defence, and the defence should not be in guidelines. The noble Baroness has said that these are draft guidelines. She also said that they appeared in March in another place. It was also surprising that the discussions in the other place with the industry, on which there was a measure of agreement, fell down. There is nothing, to my mind, to suggest that these draft guidelines will not fall down. I still believe that the measure of protection for the innocent that I have suggested in my Amendment is good and is fair. I therefore beg to move.

5.14 p.m.

On Question, Whether the said Amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 75; Not-Contents, 66.

Adeane, L. Elles, B. Merrivale, L.
Alexander of Tunis, E. Emmet of Amberley, B. Monson, L.
Alport, L. Evans of Hungershall, L. Morris, L.
Auckland, L. Exeter, M. Mottistone, L. [Teller.]
Balerno, L. Faithfull, B. Newall, L.
Barrington, V. Falkland, V. Northchurch, B.
Berkeley, B. Ferrers, E. O'Brien of Lothbury, L.
Bessborough, E. Fortescue, E. O'Hagan, L.
Brooke of Cumnor, L. Fraser of Kilmorack, L. Rankeillour, L.
Brooke of Ystradfellte, B. Gainford, L. Rochdale, V.
Campbell of Croy, L. Geoffrey-Lloyd, L. Ruthven of Freeland, Ly.
Carr of Hadley, L. Greenway, L. Sackville, L.
Carrington, L. Gridley, L. Saint Brides, L.
Clitheroe, L. Harmar-Nicholls, L. Sandys, L.
Cockfield, L. Hawke, L. Sharples, B.
Colville of Culross, V. Henley, L. Skelmersdale, L.
Cork and Orrery, E. Home of the Hirsel, L. Strathclyde, L.
Craigavon, V. Killearn, L. Strathcona and Mount Royal, L.
Cullen of Ashbourne, L. Long, V. Tenby, V.
de Clifford, L. Longford, E. Trenchard, V.
Denham, L. Lothian, M. Tweeddale, M.
Drumalbyn, L. Lucas of Chilworth, L. [Teller.] Tweedsmuir, L.
Dulverton, L. Malmesbury, E. Vickers, B.
Ebbisham, L. Mancroft, L. Vivian, L.
Eccles, V. Marley, L. Young, B.
Airedale, L. Hampton, L. Phillips, B.
Ardwick, L. Hatch of Lusby, L. Ponsonby of Shulbrede, L.
Avebury, L. Hirshfield, L. Redcliffe-Maud, L.
Banks, L. Hood, V. Rhodes, L.
Beaumont of Whitley, L. Howie of Troon, L. Roberthall, L.
Birk, B. Jacques, L. Sainsbury, L.
Blyton, L. Janner, L. St. Davids, V.
Boothby, L. Kirkhill, L. Segal, L.
Brockway, L. Lee of Newton, L. Shepherd, L.
Byers, L. Leonard, L. Simon, V.
Caccia, L. Llewelyn-Davies of Hastoe, B. Stewart of Alvechurch, B.
Castle, L. Lovell-Davis, L. Stone, L.
Chitnis, L. McCluskey, L. Strabolgi, L. [Teller.]
Collison, L. McGregor of Durris, L. Taylor of Mansfield, L.
Cooper of Stockton Heath, L. MacLeod of Fuinary, L. Wallace of Coslany, L.
Davies of Leek, L. Maelor, L. Walston, L.
Evans of Claughton, L. Melchett, L. Wells-Pestell, L. [Teller.]
Gaitskell, B. Meston, L. Whaddon, L.
Gladwyn, L. Nugent of Guildford, L. White, B.
Glenamara, L. Oram, L. Wigg, L.
Goronwy-Roberts, L. Parry, L. Winterbottom, L.
Hale, L. Peart, L. (L. Privy-Seal.) Wootton of Abinger, B.

Resolved in the affirmative, and Amendment agreed to accordingly.

5.23 p.m.

Lord LUCAS of CHILWORTH moved Amendment No. 3: Page 23, line 10, at end insert— ("Provided that such fees shall not exceed those prescribed for annual testing.").

The noble Lord said: My Lords, this Amendment follows on the discussion we had on Report and deals with the fees to be charged by a testing station when a vehicle is presented for a GV10, a certificate removing a prohibition order. When we discussed an Amendment in these terms on Report the Government expressed some sympathy for it and said they would be considering the matter to see whether my proposal could be adopted. It was on that basis that I withdrew the Amendment at that stage.

Regrettably, the Government advised me shortly before two o'clock today that they were not in a position to table an Amendment, and they sent me an extremely long letter about the fees. I have read the letter once but I do not intend to quote from it because, frankly, I do not understand it. Neither have I had time to take advice on it. Nevertheless, it seems quite wrong in a Bill of this kind to have such a loose expression as "prescribed fees" when there is acknowledged to be a relationship between the work to be done by a testing station in granting a GV10 and the work to be done by a testing station for an annual test or plating certification; the tests are similar.

It is intended that when a vehicle goes to a testing station for a GV10 exactly the same procedure shall be adopted as that for the annual test; and if there is that relationship, there must be a relationship in terms of fees. In the letter I received there is mention of the improvisation of the tests. I fancy that is a mistaken description because I am sure the Department would not wish to improvise any tests. In my view, the Amendment, which relates the fees payable for the issue of GV10s and those for annual tests, should be accepted.


My Lords, I strongly support my noble friend in this matter because at a previous stage he put forward a detailed case and the noble Baroness, Lady Stedman, said, with a charming smile, that he had made a serious point; she spoke for some time on it, and then said she would be getting in touch with him. My noble friend received that letter at about two o'clock this afternoon. It contains three pages of close typescript arguing technical points about what a Parliamentary draftsman can and cannot do. My noble friend was left with no opportunity to re-draft his Amendment in the light of what the Government said, although he had been prepared simply to table an Amendment as a safety device in case the Government did not do what they said they intended to do.

I must therefore advise my noble friend to press the Amendment because we have had a series of difficulties with the Department of Transport. During our debates on the Wales Bill I did not receive letters that I was promised between one stage and another. There comes a point at which Parliament cannot do its job when Ministers do not chase their civil servants enough to produce the requisite information. Here is a specific case where we were told that the Government wanted to help my noble friend. Instead of doing that, they have provided him with a long-winded and complicated answer at the last minute. I urge noble Lords to support my noble friend. It will also act as an example of our view about the way in which a Department should not treat this House.

Viscount SIMON

My Lords, I could not agree with the noble Lord, Lord O'Hagan, that we should vote for the Amendment as a sort of disciplinary action against the Government. That would be inappropriate; we should vote according to the merits of the Amendment. When the noble Baroness, Lady Birk, replies I hope she will explain what has happened since her noble friend Lady Stedman said the Government were disposed to accept the substance of the Amendment but wished to obtain further advice on its form. We should be told, before we vote on the matter, what has happened since then to make the Government oppose it.

5.30 p.m.

Baroness BIRK

My Lords, may I first on behalf of my noble friend Lady Stedman, who is not here, say that it was certainly through no dilatoriness on her part, or indeed on the part of the officials in the Department—although I am speaking now for a different Department—that this happened and that the noble Lord, Lord Lucas of Chilworth, got his reply so very late. I agree with him that it is a long and complicated letter and I had decided against reading it out, partly because, like him, I also find it rather difficult to understand.

The facts are that when my noble friend Lady Stedman spoke in response to a similar Amendment moved by the noble Lord at Report stage, what was absolutely true, and what remains true, is that the Government are not opposed to the substance of the Amendment. The level of fees that we have in mind to prescribe for payment when a vehicle is required to be brought to a testing station with a view to the removal of a prohibition would be exactly in line with the charges when a vehicle is presented for its annual test. I should add that there is no penal element involved here. As my noble friend pointed out at the time, there were doubts about the form of the noble Lord's Amendment and my noble friend Lady Stedman promised to write to him and explain the circumstances if it did not prove possible in the light of legal advice to table a Government Amendment having a similar effect.

The problem is that the legal advice came rather late. Parliamentary counsel are very busy and we did not receive the advice of Parliamentary Counsel until 17th July. Then further discussions took place to see whether this was a definitive answer in order to try to come to terms with exactly what the noble Lord was asking. That turned out not to be possible. The very firm legal advice that we have had is, I am afraid, discouraging and offers these formidable reasons why an Amendment should not be adopted. It was on those lines that my noble friend Lady Stedman wrote to the noble Lord, Lord Lucas of Chilworth.

If I can paraphrase and summarise that reply, the main objection to the Amendment, according to the legal advice, is that it would cast doubt on the principle that a fee for any service, unlike a tax or a penalty, is quantified by reference to the cost of providing that service. The power to change a fee of this sort is invariably exercised in this sense and it would be improper for it to be exercised in any other. A second objection arises from the difficulty of framing a suitable Amendment. That is because not all goods vehicles are subject to the heavy goods vehicle annual test—for example, lorries weighing less than 30 cwt. unladen. However, all vehicles that are constructed or adapted to carry goods can be the subject of a prohibition notice and under the provisions of the Bill could be subject to a direction requiring them to be presented at a testing station with a view to the removal of a prohibition.

In our view, the making of a Statutory Instrument is the proper way of prescrib ing the appropriate level of fees and the procedures associated with the laying of such an instrument provide adequate opportunities for objections and, if necessary, debate. Therefore, although I entirely accept, regret very much and apologise on my own behalf and on behalf of my noble friend Lady Stedman, that it should have occurred so late in the day that the noble Lord, should have received such a long, legalistic letter about it—but it did have to be set out—in fact the reason we cannot accept this Amendment is entirely due to a legal objection. Therefore, it seems to me that the use of a Statutory Instrument would have exactly the same practical effect that he is trying to achieve through his Amendment but would not come up against these, what appear to be, quite insurmountable legal difficulties.

It has nothing to do with politics or with the work of the officials in the Department or Ministers; it is purely a legal interpretation and very strong legal advice on this point. I hope, therefore, in these circumstances that noble Lords will accept that it would not in this case be appropriate to write into this Bill a restrictive Amendment of the kind proposed. I would also find it a personal favour if, at the moment, I get up to deal with this Bill for the first time, your Lordships do not pass two Amendments against it.


My Lords, I cannot promise to comply with that plea. Let me just see how I can get on. I am afraid that I do not accept that we have not had the time. I raised this business of fees at Committee stage in June and it is wrong for those who advise the Department to take this length of time. Certainly they must have been of an opinion that there was something in what I had to say at Report stage. I cannot accept at all the argument about different kinds of vehicles relating to different kinds of tests. Certainly a 1½-ton vehicle is not subjected to the same kind of test, but as the noble Baroness says, it can have a prohibition notice put upon it. There seems to me no reason at all why, if a prohibition notice is put upon it, the testing fee should be a set scale, a set fee, and that of the heavier goods vehicle. Just because it is a smaller or lighter one to me does not make any difference. It has a GV9 on it; it goes in to the testing station to have a GV10, the removal notice; it should pay the appropriate fee. It has always been said to me that lawyers and legal advisers can be right only half the time because one side has a lawyer to put his case and the other side has a lawyer to defend the case. One wins and the other one loses. By that account, if I had time to take legal advice I might come up with something quite different from the noble Baroness. I do not think that argument is going to influence me greatly.

Baroness BIRK

My Lords, would the noble Lord let me interrupt him for a moment? It is not just—if I may put it that way—any old legal advice. This advice is the advice of Parliamentary counsel who were concerned with drafting this Bill. It is not a case of an argument between lawyers on the interpretation of something, but a question of Parliamentary counsel putting forward this very firm, if rather lengthy, legal opinion on this particular point as to whether it should be included in the statute.


My Lords, of course I take that point and thank the noble Baroness very much for it. Nevertheless, the point at issue is that the fees for annual tests and plating are set under another statute and these can be revised in the usual way. All I am suggesting in this Amendment is that the fees for GV10's relate to those for annual testing and plating. I think that is perfectly reasonable. It shows without doubt where the fee scale is to lie. There is no separate issue to be brought forward at another time. Parliamentary counsel, Parliamentary draftsmen, have not found a way round the Amendment which I had down at Report stage in the time available to them. If I press the Amendment then the other place will have the opportunity of getting an opinion and deciding whether this is reasonable or not.


My Lords, I must again support the Minister on this matter. I thought that the noble Baroness, Lady Stedman, so kindly took this back. I could not quite understand why, because quite clearly the charges which the noble Lord, Lord Lucas of Chilworth, is talking about are in relation not to a standard test. A standard test we all know; the vehicle goes in and they go over a, b, c, d, e, f, and so on, and if it does not come up to scratch, then very good, it has to come back again. But when there has been a prohibition—


My Lords, I think that the noble Lord, Lord Wigg, had the opportunity to make this point after I introduced the Amendment. I suggest to your Lordships that I have

Resolved in the affirmative, and Amendment agreed to accordingly.

5.48 p.m.


My Lords, before we proceed to the next Amendment I should like to say that I probably was guilty of an impropriety against the custom of the moved the Amendment, and I might have expected the noble Baroness on the Woolsack to put the Question to the House at that time.

5.40 p.m.

On Question, Whether the said Amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 64; Not-Contents, 58.

Alexander of Tunis, E. Faithfull, B. Monson, L.
Alport, L. Falkland, V. Morris, L.
Amory, V. Ferrers, E. Mottistone, L.
Auckland, L. Fortescue, E. Newall, L.
Balerno, L. Fraser of Kilmorack, L. Northchurch, B.
Bessborough, E. Gainford, L. O'Hagan, L. [Teller.]
Brooke of Cumnor, L. Geoffrey-Lloyd, L. Rankeillour, L.
Brooke of Ystradfellte, B. Gridley, L. Rochdale, V.
Carr of Hadley, L. Harmar-Nicholls, L. Ruthven of Freeland, Ly.
Carrington, L. Hawke, L. Sackville, L.
Clancarty, E. Ironside, L. St. Davids, V.
Clitheroe, L. Killearn, L. Sandys, L.
Cockfield, L. Lauderdale, E. Stamp, L.
Colville of Culross, V. Long, V. Strathclyde, L.
Craigavon, V. Lothian, M. Sudeley, L.
Crathorne, L. Loudoun, C. Tenby, V.
Cullen of Ashbourne, L. Lucas of Chilworth, L. [Teller.] Trenchard, V.
de Clifford, L. Lyell, L. Tweeddale, M.
Denham, L. Mancroft, L. Tweedsmuir, L.
Ebbisham, L. Marley, L. Vivian, L.
Emmet of Amberley, B. Merrivale, L. Young, B.
Evans of Hungershall, L.
Airedale, L. Howie of Troon, L. Raglan, L.
Amherst, E. Jacques, L. Rhodes, L.
Ardwick, L. Janner, L. Ritchie-Calder, L.
Avebury, L. Kirkhill, L. Roberthall, L.
Banks, L. Lee of Newton, L. Segal, L.
Beaumont of Whitley, L. Leonard, L. Shepherd, L.
Birk, B. Llewelyn-Davies of Hastoe, B. Simon, V.
Blyton, L. Longford, E. Stewart of Alvechurch, B.
Boothby, L. Lovell-Davis, L. Stone, L.
Byers, L. McCluskey, L. Strabolgi, L. [Teller.]
Castle, L. McGregor of Durris, L. Taylor of Mansfield, L.
Chitnis, L. MacLeod of Fuinary, L. Wallace of Coslany, L. [Teller.]
Collison, L. Maelor, L. Walston, L.
Cooper of Stockton Heath, L. Melchett, L. Wells-Pestell, L.
Davies of Leek, L. O'Brien of Lothbury, L. Whaddon, L.
Gaitskell, B. Oram, L. White, B.
Goronwy-Roberts, L. Parry, L. Wigg, L.
Hale, L. Peart, L. (L. Privy-Seal.) Wigoder, L.
Hampton, L. Phillips, B. Wootton of Abinger, B.
Hatch of Lusby, L.

House in rising to speak when I did on the last Amendment, and for that I would express my regret. However, I am not prepared to accept in this House the dictum that we are all equal but that some are more equal than others. I will obey the rules of order, whatever they happen to be, but I was in order when I spoke and I did not offend against any rules of the House. Had I realised the point I would not have spoken. Nevertheless, I am not going to be put down when I am within my rights as a Member of this House. I should like to make that perfectly clear. I support the rules of order in their entirety, but I believe that on this and subsequent occasions they should be applied to everyone; otherwise my voice will be raised in protest. I apologise to the noble Lord, Lord Lucas of Chilworth, and to the Opposition if I appeared, even by accident, to seek any advantage. I want no advantage, but so far as I am concerned the rules which apply to me must also apply to everyone else.

Lord O'HAGAN moved Amendment No. 4: Line 5, after ("parking") insert (", and about inland waterway transport.").

The noble Lord said: My Lords, I understand that as this is a drafting Amendment consequential on a previous Amendment passed during another stage of the Bill, there is no need for me to speak to it, and I therefore beg to move it formally.

Baroness BIRK

My Lords, the noble Lord is quite right. This Amendment is consequential to the Amendment to the present Clause 12 and, the House having accepted that Amendment, the Government are content that this is a necessary Amendment to the Title. That does not mean, however, that we are content with the clause.

On Question, Amendment agreed to.

5.51 p.m.

Baroness BIRK

My Lords, I beg to move that this Bill do now pass.

Moved, That the Bill do now pass.—(Baroness Birk.)


My Lords, before the Bill passes I want to detain the House for just a moment on one point. I think the Government were quite wise to bring in a measure of this kind. Their action has been criticised on a number of occasions, and it has been said that the Bill is bits and pieces. Given the current political balance in the other place, no other measure but this could have been brought forward with any hope of success, particularly at this time, at the end of a Session. Having expressed my support of the Bill so far as it goes, I want to make another point, as I have from Second Reading onwards. I have got into varying amounts of hot water for it—sometimes the temperature has been quite hot, sometimes not quite so hot—but I hold the view that the transport situation in this country is now so tragic that, if the problem is to be solved, it requires the co-operation of all sections of the community. That is to say, the objective facts need to be examined by those who are competent to judge them. I am not at all sure that a political arena is the best forum in which to bring those facts to judgment, although I quite agree that a Bill of this kind, or any transport Bill, inevitably involves political questions which have to be debated in another place and here—and so they should be.

I have particularly in mind Clause 9. Clause 9 has been taken out. I should have thought, as sure as night follows day, that the Government will promptly put it back in another place. This is one of the major disadvantages of battles which are settled in a political arena: it is like a seesaw—up and down. It may well be that the truth is somewhere in between—Clause 9 is out, Clause 9 goes back—and what I ask the Minister to take back to the Secretary of State, I hope with the support of all sides of the House, is the earnest expression that he will not do just that; that is to say, because the Conservative Opposition has used its majority in this House to take it out, he will not use his majority in the other place to put it back, without thinking of the consequences.

The truth is that the problems of parking in our great conurbations are most difficult matters. They are not going to be solved by the local authorities and they are not going to be solved by private enterprise. They are going to be solved by a common sense partnership on both sides. If the Secretary of State does not put Clause 9 back, then that is that; but, if he does, then I hope that before he puts it back he will consult with all the interests involved, I hope he will ask them to come in and meet him—or, if he is so busy, then to meet other Ministers—will hear what they have to say, and will see whether he can strike that balance which, as the safeguarder of the public interest, he must in fact hold. That is the great difference between the noble Lord, Lord Lucas, and myself. So far as I am concerned, on every issue it is the public interest which must prevail.

I am mindful, of course, that those engaged in this or that section of the industry must make a profit. I am all for viability. I do not believe that the private sector concerned with parking places here can for ever run uneconomic parking places, because if they do they will go broke. Of course it has got to be viable; but I say—and this is what Clause 9 was about—the ultimate judge here must be the Secretary of State. That is what he is there for, to strike a balance, and he cannot strike a balance if he acts only in a political way—"The Conservatives have taken it out, so I will put it back."

My plea to the Minister, therefore, is that she will be good enough to go back to the Secretary of State—and perhaps I may have support in other parts of the House—and ask him, not only on this issue but on other issues as well, to look before he takes the action which he will inevitably take; to have regard to the wider interests and to his duty to the community at large; and to take all the issues into account before coming to the decision which, by the nature of his office, he must inevitably take.


My Lords, there is much other business, and your Lordships will be keen to press on to it. I do not wish to detain the House for more than a minute. I should like to thank the noble Baroness, Lady Stedman, and hope that it is not overwork on this Bill which has finally made her withdraw temporarily from the political arena, to use the phrase of the noble Lord, Lord Wigg. She certainly sets an example to those of us on this side of the House who take an interest in this subject, and she also sets an example to those of her colleagues on the other side of the House that they could well follow very often. It is no criticism of her that this Bill is still imperfect. We have made the odd Amendment here or there, we have tinkered about with this or that; but, of course, if you have a faulty structure and a bad architect, rotten materials and no ulterior plan in mind, then the design of your legislation cannot be improved, even were we to spend a couple of years in session in your Lordships' House examining a Bill of this nature.

Some noble Lords may feel that we have gone too far. Certainly some Members of another place may object to one or two of the things we have done. I remember the phrase of that patron of my family, Clive of India, who said when in trouble in court: Sir, I stand astonished at my own moderation". I think that is very much the model that my noble friends have taken as their guideline through the debates on this Bill, because had we felt like it we might well not have been so astonished at our moderation but have set down a rather larger number of Amendments, though perhaps not ones of such real worth as those we in fact set down.

The noble Lord, Lord Wigg, was in a friendly mood, and I wish to be friendly, too. My complaints that remain are serious but small, and they relate to two subjects. One is insurance. I think the Government really need to look at this subject again. I am not certain—I am not an insurance authority—but I have a sneaking fear that they have prepared themselves a minefield and are slowing choosing which mine will blow some part of themselves to pieces first; because they did not recognise the problems flowing from the noble concept of car sharing which would cause the insurance world some grave difficulties. When they did, which was far too late, they set about it in a most admirable, free-market manner, wholly opposed to Socialism. I welcome this sign of deathbed repentance—that they do not want to write anything into the Bill, they do not want to tell people what they ought to do. But by so doing they have not absolved themselves of the responsibility which will fall heavily on their shoulders if what has been worked out informally—not in the Bill, not discussed directly in Parliament, but in quite proper private negotiations—does not in fact meet all the difficulties that will be thrown up by car-sharing.

The Transport Bill went into Standing Committee in another place on 31st January 1978. At every stage of this Bill I have asked the noble Baroness, Lady Stedman, to explain the current situation. At no stage has she done so. No doubt, we may hear what is going to happen today. It is overdue; but it will still be very much welcomed.

The other point that I wish to mention briefly is the question of community buses. At Report, the noble Baroness, Lady Stedman—again showing a healthy enthusiasm for profit, viability and the other word which the noble Lord, Lord Wigg, had just used—introduced a new clause, Clause 6, to enable community buses to operate for contract work. This was an idea that one must welcome as a theory but, again, like insurance it has a whole barrage of complications that flow from it. We on this side of the House have not been able to do our job on this new Clause 6. I confess that we have not examined it. You might say in House of Commons terms that it almost has been guillotined because we have not been able to consider its implications. The district councils, the Association of County Councils and many others are concerned about a variety of consequences that may flow. I hope that the noble Baroness will be able to say that just as the Government have not introduced this major part of the Bill until almost the last minute in this House, so their minds are not yet closed to making it work properly by introducing further Amendments.

Otherwise, there is, for example, a danger that you may get relief volunteers for community bus work who have not passed their tests, who are not qualified to drive heavy goods vehicles, who do not have PSV licences and who may be plying for "hire" because they are doing a job to make money for the local Women's Institute and who may be driving long hours and becoming exhausted. This is an area where serious difficulties occur and where I think those concerned with the work of community buses need a lot of reassurance.

We send this Bill away. We will be happiest if it never came back again; but while we have it and, indeed, while we had it, we have tried to improve it. I should like to thank, as well as the good humoured interventions of noble Lords from the Liberal Benches and those opposite, in particular my noble friend Lord Sandys who stopped me from getting carried away in my wilder moments and from the persistent cross-fire and support from my noble friends on the Back Benches on this side of the House. With those words, I hope that we can send this Bill on the next stage of its Parliamentary voyage.

Viscount SIMON

My Lords, I shall detain the House for truly a minute. I think it would be ungenerous not to join in the expression of thanks by the noble Lord, Lord O'Hagan, to the Government Front Bench and, particularly, to the noble Baroness, Lady Stedman, to whom we send good wishes, and to the noble Baroness, Lady Birk, today, for a friendly clear and efficient way in which they have handled this Bill, much as we have disagreed from time to time with them.


My Lords, if I may, I would add my thanks to my noble friends and to the noble Baroness, Lady Stedman, and, indeed, to the noble Baroness, Lady Birk. However, I feel that I must reinforce Lord O'Hagan's doubts with regard to this Bill. The Government started off with a laudable intention under the car-sharing scheme to provide communities with the legalising of self-help. It must be admitted that people have been sharing cars and pooling some of the cost for years and years. Everybody turned a blind eye to that. Now we have legalised this, which means that the eye of the law is now upon the position. It is my belief that this Bill leaves this House extremely defective in law in so far as insurance is concerned.

This is a stage of the Bill where Second Reading speeches cannot be made. I have had leading counsel's advice on the question of insurance and the noble Baroness will know that the Department have received comments from me on this I urge the Government seriously to reconsider the position before great damage is done. While I honestly believe that the insurance companies will honour their undertaking so far as that undertaking goes, that third parties will not be injuriously affected by the deficiencies in insurance, I am not quite so sure that the law itself will be able to take the same kind of attitude. I have a horrible feeling that an offence may be committed which will cause a person to be brought before the courts with defective insurance. If he is found guilty, then, under the totting up system, he may well lose his licence. I am not here talking about possibly thousands of pounds of damages.

I believe that the law of contract has some bearing on this matter. I believe that when two men agree to do something and money changes hands, a contract, however informal, has been undertaken. If such an arrangement goes on for many weeks or months, it would be very hard for the law to ignore that as a contract. This Bill does nothing to provide the safety that the driver might be entitled to.

There is one specific question that I would ask the noble Baroness. During an earlier stage of the Bill, June 27th last, the noble Viscount, Lord Simon, asked a question of the noble Baroness, Lady Stedman. It was: May I ask the noble Baroness whether taking people to work would be similar purpose to 'social'?"—[Col. 183.] She answered: Yes, it would". As I understand it, provided the workmate comes to the driver and says, "Will you take me to work and I will chip in some money?" the provisions of this Bill protect the driver. That, as I understand it, was the categorical, "Yes, it would" that the noble Baroness answered. If, however, the driver says: "Workmates, I am going down this road every day; if you chip in, I will take you all", would the noble Baroness then be in as strong a position to give a categorical assurance that the provisions of the Bill will provide for cover under the terms of the Insurance Bureau undertakings that she has given for the other set of circumstances? Having said that, I should like to thank my noble friend Lord O'Hagan on the Front Bench for his advice and I hope, as he does, that we do not see this Bill back again.


My Lords, before parting with this Bill I suggest that we need to be satisfied about the financial reconstruction of the National Freight Corporation which occupies an important part of this Bill, mainly Clauses 17 to 21. A number of speakers, both in your Lordships' House and elsewhere, have described these provisions as complex and difficult to understand. The Secretary of State in another place in endeavouring to explain them—and I quote from the Official Report, Standing Committee B, of 11th April, 1978, col. 949—said: At the end of the day it was a matter of judgment". By this, he presumably meant that he did not understand it, either, or, if he did, he certainly succeeded in concealing this from everybody else. When this matter was debated in another place, the Government had an unfair advantage in that they had this document, namely the Report and Accounts of the National Freight Corporation for 1977, while the Opposition did not have the document.

Since then the accounts have been published so the odds are perhaps rather more equal. I propose reading one sentence only from the report of the National Freight Corporation. On page 9 it reads as follows: The Corporation, while recognising the significant help the reconstruction would give to National Carriers, has nevertheless expressed great concern about the inadequacy of the proposed reconstruction". The Government may be right in thinking the reconstruction is adequate. The National Freight Corporation may be right in thinking that it is inadequate; but they cannot both be right at one and the same time. This is not a pure debating point, it is absolutely essential that it should be settled. If the National Freight Corporation are right and the Government have not dealt adequately with this problem, we ought not to pass this Bill because it purports to deal with a problem, and if it has failed to deal with the problem it is not the type of Bill that we ought to pass. If, on the other hand, the Government are right—and I do not exclude that possibility—and the National Freight Corporation are wrong, then this one must be nailed right away. Unless it is, what will happen?

In two or three years' time, when things go wrong, the National Freight Corporation will turn round and say: "Well, we told you so". I propose trying to give the Government some assistance on this matter. The first thing you have to do in looking at the adequacy or otherwise of a financial reconstruction of this kind is to have a balance sheet which shows the position before the reconstruction and the position after the reconstruction. You then have to ask yourself whether the capital after the reconstruc tion—whether it is equity capital or loan capital—is supported by assets. Thirdly, you have to ask yourself whether the assets are capable of generating sufficient profit to service the capital and to provide a contribution to future capital expenditure.

If we apply these tests to the present reconstruction, the position we find is this: the 1977 accounts show net assets after all liabilities, other than provisions, of £130.8 million. Clause 18 of the Bill gives National Carriers a grant of £15 million. After the receipt of this sum of money the net assets will be £145.8 million, or approximately £146 million in round figures. The effect of the Bill is to reduce the capital of the Corporation to £100 million. It would appear therefore that on the face of it the Corporation will have assets of £146 million, and a capital of £100 million.

It is important to remember that this nationalised Corporation, in common with most of the others, has all of its capital provided in the form of loan capital, it is not equity capital. So when we talk about loan capital we are talking about the total capitalisation of the concern. Last year it paid an average rate of interest of 8½ per cent. If it has assets of £146 million, it would need therefore to earn only 6 per cent. on those assets in order to provide for the payment of interest. If it earned 12½ per cent., which most noble Lords would not think an excessive pre-tax rate of return on capital employed, it would have enough money to pay the interest to the Secretary of State and put the same amount of money as a contribution towards its cash flow to pay for its capital expenditure.

I am not trying to support the Government on this; I am simply saying that on the face of it this appears to be what the position is. After the reconstruction, the Corporation will have assets of £146 million against a capital of £100 million. It will have an interest payment which will require something like 6 per cent. of its earnings on its assets in order to meet its interest liabilities. On the face of it, therefore, the reconstruction would appear to be—and I go no further than that—a reasonable one so far as the National Freight Corporation is concerned.

I should like to make one specific point. This is a matter of interest of which your Lordships ought to be aware. Under a directive issued by the Secretary of State, the outstanding commencing capital debt bears interest at only 5.35 per cent. per annum. This directive appears to have been issued at a time when short term rates of interest varied from between 10 per cent. and 15 per cent. The directive represented—and I hope that I will not be misunderstood in using this phrase—a concealed subsidy to the National Freight Corporation.

The position, in fact, is worse than this, because if one turns to Clause 17 of this Bill one finds that the write-off of capital which is authorised under Clause 17 and amounting to some £53 million, can be set against either the commencing capital debt or against the other borrowings. If the Secretary of State decided to set it off against the other borrowings which carry interest at an average of roughly 10 per cent., the Corporation would then be left paying only 5¾ per cent. on its commencing capital debt. I suggest that this is a further important element of subsidy contained in this Bill which was not disclosed in the Explanatory Memorandum and, so far as I have been able to see, formed no part of the explanation that was given to your Lordships at various stages of the Bill.

However, this, in a sense, is a separate issue. The main issue to which I want to come back is a simple one: one can argue that the National Freight Corporation is a small body. What, after all, is a capital of £153 million, or whatever it is, compared with the enormous capital in British Rail or the British Steel Corporation? However small it may be, the principles on which these matters ought to be dealt with are exactly and precisely the same. What I am suggesting both to your Lordships and to the Government is that it is possible for these matters to be dealt with on a factual and logical basis. One does not have to rely upon the broken reed of the Secretary of State's judgment, and I hope that if we get another financial reconstruction brought before your Lordships' House we will have a much better and more coherent explanation of the provisions than we have had in the case of the National Freight Corporation.

6.19 p.m.

Baroness BIRK

My Lords, we have before us—and I hope we shall pass today—a relatively short Bill. It is one which has attracted a great deal of attention, both here and in another place. It is not as short as it was when it arrived here. As my noble friend Lord Wigg pointed out, this House has removed the clause dealing with the licensing of privately operated public car parks. However, clauses have been inserted about contract carriage by community buses, drivers' hours, and waterway transport; and there have been Amendments about the British Railways Board.

We on this side of the House feel that some of the changes make a good Bill better, but there are others which are not quite so happy in their effects. My noble friend Lord Wigg expressed the hope that the Government would seek to put back in another place an amended version of the original Clause 9 about privately generated public car parks which your Lordships deleted in Committee. I can assure him that I will certainly draw what he has said to the attention of my right honourable friend the Secretary of State.

There remain a number of issues on which I acknowledge that some noble Lords are uneasy, and perhaps I may briefly touch on the points which have been raised by speakers this evening. First, the noble Lord, Lord O'Hagan, and the noble Viscount, Lord Simon, both paid very kind and justified tributes to my noble friend Lady Stedman, which I will pass on to her. The noble Lord, Lord O'Hagan, went into a very dire architectural analogy of this Bill—


My Lords, that was for the noble Baroness.

Baroness BIRK

My Lords, I recognise that, but it is the sort of thing I seem to have heard on every Bill that has ever been put forward and, having come new and late in the day into this, I was not surprised. All that he left out was "too little and too late"—but perhaps that was implied in what he was saying. I turn now to the points of substance made by the noble Lord, and particularly those concerning insurance. He referred again to the situation when people suddenly decide to go on a journey and wish to share the cost. Here I can only repeat that if people feel they may be making an element of profit and thus going beyond the insurance undertaking, they should speak to their insurance company.


They will not.

Baroness BIRK

My Lords, if they cannot do that, they can at least confine their receipts to petrol costs so that they are bound to he within the limit. I am a little surprised about the question of insurance and laying it down in the Statute. Certain noble Lords opposite, as exemplified by the noble Lord, Lord O'Hagan, seem to have little confidence in the great institutions of our insurance companies. I should have thought—


No, no, my Lords. The noble Baroness has not been in at earlier stages of the Bill, so she does not know that in fact that is not the right charge to press at me.

Baroness BIRK

My Lords, I have, as quickly as I can, acquainted myself with what has come up, particularly in these very sensitive areas, and I still stick to what I said. It is agreed that part of his complaint or displeasure, if you like, concerns the individual and the insurance company, but a certain amount of disquiet and concern has been shown about how the insurance companies themselves would act. Perhaps I am being a little unfair to the noble Lord himself, but it has been raised by other speakers on that side of the House. It is true that it might be possible to lay down in a statute that an insurance policy would be valid regardless of money taken by the driver, but that would encourage people to run businesses and to go out and look for fares, like taxis. I believe that would represent unfair competition for buses and taxis, on which people rely for their ordinary transport needs. But what is extremely important to everybody is that it would mean that insurers would have to cover increased risks and insurance premiums would be bound to rise steeply, not only for car-sharers but for ordinary motorists as well. That could be quite unfair and inequitable, and we believe that it would be unfair to the vast majority of drivers who would not want to make money out of sharing their cars and would rightly object to paying higher premiums for the sake of those who did.

The noble Lord, Lord O'Hagan, expressed some concern—which I recognise—on the qualifications of drivers of community buses. With respect, I do not think that concern can alter our view that it is right in this Bill to give explicit power for community buses to be used for private hire. I must emphasise that we are dealing here with minibuses, the handling characteristics of which are rather more like those of private cars: they are not really heavy goods vehicles or buses. What can be done under this Bill is very like what is being done daily under the Minibus Act, which was generally welcomed. I think it is very important—I am sure the noble Lord would agree—that we should, as far as possible, help people in the rural areas, where general transport is really very difficult for them. This is certainly one way of doing it.

The noble Lord, Lord Lucas of Chilworth, supported the points raised by the noble Lord, Lord O'Hagan, but he also raised the specific question of car-sharing and asked whether the Government were satisfied that this Bill enables people to take others to work in their cars without falling foul of the public service vehicle licensing system. We have had another look at this. I am quite aware of the legal opinion put forward through the noble Lord, Lord Lucas, but we remain convinced that the Bill as drafted is right. If there were not restrictions on carrying passengers the way could be open to inflicting real damage on licensed bus operators and the public transport industry. On the other hand, a tighter restriction, preventing someone from taking his fellows to work and sharing the cost with them, would be no more understood or accepted by ordinary people than the present outdated provisions. The noble Lord asked whether use for working purposes was similar to that for social purposes. This is certainly true, and the answer given by my noble friend at Committee stage is exactly the same today.

The Schedule to this Bill has to be read in the same context as the phrase: in the course of the business of carrying passengers", which was used in Section 118(3)(d) of the Road Traffic Act 1960. As far as I and my colleagues are aware, this has led to no problems of interpretation. The noble Lord referred to the possibility that a judgment of this House, sitting in its judicial capacity, could mean that any regular car-sharing arrangement would count as a business; but the case to which he was referring was a very complex one and was concerned with establishing the meaning of "hire or reward" for certain particular insurance purposes and not with licensing. It related to statutory provisions that no longer exist. Moreover, the views expressed in the various judgments were not entirely consistent. I do not believe that the courts would put the same construction on the word "business" in the first Schedule to the Bill before us. Ultimately, however, your Lordships will appreciate that, however long we went on discussing the Bill and however much it was amended or tinkered with, in the last resort it will depend on the interpretation by the courts, and I do not think we can take that any further.

The noble Lord, Lord Cockfield, was kind enough to write to my noble friend Lady Stedman and give her notice of the points he would be raising, although I hoped that he would be satisfied by her written reply to him and would not want to raise these points this evening. I think the rationale as to the extent of reconstruction is clear and in fact I do not think there is much between us on that. The noble Lord appeared to be satisfied that, as my right honourable friend said in another place: The National Freight Corporation, after this reconstruction, will be able to operate profitably taking one year with another". If I may jump from that to the main point which probably has not been answered in the letter sent to him and which concerned the debt to be written off, may I say that that will include appropriate shares of both the commencing capital debt and the National Freight Corporation's subsequent borrowing. There is no question of the writing-off being concentrated solely on the low-interest debt. I was hoping to save time, but I think probably I should just deal with the noble Lord's point on the rate of interest, of which he gave notice. He referred to the rate of 5.35 per cent. recently fixed by the Secretary of State. The reason for the low rate of interest on the NFC's commencing debt is that this was the rate attached to the debt on the assets vested in the Corporation in 1968. Those assets were, as the House is aware, previously owned by British Rail and the Transport Holding Company, and had been created by loans raised in the 1950s and 1960s at various rates of interest, which, when consolidated, gave rise to the figure of 5.35 per cent. The Secretary of State's direction made in 1976 merely confirmed this figure.

But the NFC does not get the benefit of the historic rate of interest for all time, because the Secretary of State has also directed that the commencing debt should be repaid in instalments over the period 1976–1985. Three instalments, amounting to £27 million, have already been repaid and replaced by fresh loans at current rates of interest. Thus, the NFC's average rate of interest is now over 8 per cent. and will probably rise further in future years. I hope that that explanation will satisfy the noble Lord, particularly on the main point that there is no question of the NFC receiving a concealed subsidy.

It is a little sanguine to expect that my brief remarks tonight have been sufficient to dispel all noble Lords' remaining reservations, and I am very aware that I am a rather inadequate stand-in for my noble friend Lady Stedman, who understands the Bill so well and has worked on it all the way through. On looking back over the passage of this Bill through the House, I am impressed by the extent of agreement on its substance and by the small number of issues on which there have been any serious differences. I hope that those differences have now been reduced to the extent where, if they are not invisible, they at least do not obscure the broad consensus on the general virtues of this measure. It is now up to the other place to look at the Amendments which have been made here, and to decide the line which they will take on each one. It is with hope and confidence, since there has been a broad consensus on a very wide-ranging Bill, that I commend this Bill to the House.

On Question, Bill passed, and returned to the Commons.