TRANSPORT BILL

HL Deb 19 June 1980 vol 410 cc1248-91

5.10 p.m.

Consideration of amendments on Third Reading resumed.

Clause 33 [Use of certain vehicles by educational and other bodies]:

Lord UNDERHILL moved Amendment No. 7: Page 31, line 4, leave out paragraph (a).

The noble Lord said: My Lords, in the light of the decision on the last amendment, I shall not detain your Lordships very long on this one. But I feel sure that the noble Lord the Minister will take careful note of the substantial body of opinion that there is in this House on the question of safety and the PSV driver's licence. This amendment deals with precisely the same point, but as regards vehicles that may be used by charitable and educational bodies.

My purpose in coming to the Dispatch Box is merely to set out our reasons for this amendment, because we in no way want it to be thought that we wish to hinder the application of the scheme to charitable and educational bodies. We hope that it will be a success and the principle has been agreed by your Lordships. But our point in submitting the amendment is that, while we may see wisdom in relaxing some of the safety provisions, because these vehicles will be used only occasionally in a very limited way, the provisions permit vehicles called "large passenger-carrying vehicles"; and they are defined in the clause as vehicles which can carry more than 16 passengers. There is no maximum.

Therefore, it is possible for a charitable body to have given to it, or to purchase, a double-decker bus which is capable of carrying 60, 70 or 80 passengers. This could be put on the road without the requirement of the necessary PSV driver's licence, and the driver of such a vehicle would have far greater responsibilities than are provided for in the Minibus Act, because it would be a vehicle carrying more than 16 passengers with no limit on the numbers of passengers conveyed.

While we in no way want to inhibit the success of this scheme, we must think not only of the persons who are being conveyed, but of all other road users and the general public. Therefore, while I have no desire to detain the House, I should like the noble Lord the Minister to indicate that, in any review that may be undertaken of the provisions covering drivers of PSV vehicles and large passenger-carrying vehicles, this point will be considered. My Lords, I beg to move.

Lord BELLWIN

My Lords, of course, I will take careful note not only of what was said on the previous amendment, but of what the noble Lord has now said. But on this amendment, in so far as the cases are not on all fours, the case against requiring PSV driver licences for people driving these vehicles is stronger. First, they will often be volunteers driving the vehicles only intermittently, and their willingness to undertake the task would be reduced if the trouble and expense of PSV driver licensing were required.

Secondly, the Minibus Act itself enables regulations to be made governing the conditions to be fulfilled by drivers, and under these regulations the holders of provisional licences are excluded. This regulation-making power could be a more flexible way of restricting the driving of these vehicles—if it turned out to be necessary, as I do not think it will— than requiring PSV drivers' licences. I repeat, again, that we have taken careful note. We are well aware of the concern that exists and will treat it accordingly.

Lord UNDERHILL

My Lords, the very fact that these may be volunteers makes the position even more serious. While we do not want to deter people from volunteering, we must be very careful, because these are large vehicles which will be travelling in busy streets. Therefore, I am not thinking only of the man who is volunteering; I am thinking of the public at large.

I am pleased to hear from the Minister that the regulations will be flexible and that it is possible for them to be adjusted, but I would make this one point: One of my noble friends referred on the previous amendment to the possibility of an accident. There have been some unfortunate and tragic accidents affecting PSV vehicles over the past couple of years, and I am certain the Minister will agree with me that we would not want to be faced with a serious accident just because we want to help a charitable scheme and a volunteer takes out a double-decker bus. But in the light of what the Minister has said, and what the House decided on the previous amendment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 37 [Reduction of minimum age for drivers of public service vehicles]:

5.15 p.m.

Lord BELLWIN moved Amendment No. 8: Page 34, line 38, leave out ("any service") and insert ("a national transport operation").

The noble Lord said: My Lords, when I accepted at Report stage the amendment of the noble Lord opposite, I made it clear that a further amendment would be needed at Third Reading. The minium age of 21 years for drivers, imposed by EEC Regulation 543/69, applies on international operations to vehicles of more than nine seats overall, and on national operations to vehicles of more than 15 seats overall. So it is only for national operations that we are able to set a lower minimum age for vehicles of 15 seats or less. The amendment makes this clear and brings the clause into line with EEC law. My Lords, I beg to move.

Viscount SIMON

My Lords, when I read this amendment, I wondered what was meant by a "national transport operation". I understand from what the noble Lord has said that this is distinguishing from an international transport operation. But it is a rather curious phrase. Is it defined anywhere?

Lord BELLWIN

My Lords, to be helpful, the point which came up last time was that a journey could begin here and it would be national, in the sense that it was within this country. But it could then proceed on to the Continent, when it would become international. It is in that sense that I used the words "national" and "international". One is within the confines of the United Kingdom, and the other is within the EEC area.

Clause 44 [Interpretation of Part I]:

5.17 p.m.

Lord BELLWIN moved Amendment No. 9: Page 38, line 43, leave out ("subsection (2)") and insert ("subsections (2) and (2A)").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 3. I beg to move.

Lord BELLWIN moved Amendment No. 10:

Page 39, line 32, after (" (a)") insert— ("regulations may make provision as to the person who is to be regarded as the operator of a vehicle which is made available by one holder of a PSV operator's licence to another under a hiring arrangement; and (aa) where regulations under paragraph (a) do not apply,")

The noble Lord said: My Lords, I also spoke to this amendment with Amendment No. 3. I beg to move.

Lord BELLWIN moved Amendment No. 11:

Page 39 line 37 leave out from ("work)") to (" the ") in line 38, and insert— ("(2A) For the purposes of this Part").

The noble Lord said: My Lords, I spoke to this amendment, too, with Amendment No. 3. I beg to move.

Lord BELLWIN moved Amendment No. 12: Page 39, line 41, leave out ("the purposes of paragraph (b)") and insert ("those purposes").

The noble Lord said: My Lords, again I spoke to this with Amendment No. 3. I beg to move.

Clause 52 [Payments by Minister in respect of B.R. and N.F.C. pension schemes]:

5.18 p.m.

Lord MISHCON moved Amendment No. 13: Page 45, line 35, after ("54(1)") insert ("or section 54(7)").

The noble Lord said: My Lords, this is a paving amendment so, with your Lordships' leave, I would ask to take with it Amendments Nos. 19, 20 and 24. Your Lordships will accordingly, to your relief, hear only one speech from me, I hope, in regard to these amendments. It is possibly appropriate that, in the language of your Lordships' House, I call it a paving amendment, in the sense that your Lordships have been along this road with me on previous occasions and have shown your usual courtesy and patience.

If I may briefly summarise the position, this relates to the history of the Britsh Railways pension scheme and the Government's dealings with the pensioners and the trustees of that fund. We heard at earlier stages of the Bill how, prior to 1974, this fund, if I may be excused the expression, was raided in order that its monies could be used for the transport industry itself. Its funds were indeed used, both prior to nationalisation and afterwards, at low interest rates—it was an investment that normally would not be suitable for investment trustees—for the support of the railway industry. So in 1974, as your Lordships will recollect, the decision was made, in fairness, that what was a severely unfunded pension scheme should be funded by the Government committing themselves, having made an assessment of the unfunded proportion, to put in a capital sum in order to ensure that the pension fund was properly capitalised. That was an expensive proposition. It meant, up till this year, a sum of £578 million being expended and a governmental and national liability of some £1.4 billion over the next seven years.

The Government have decided, understandably, that this is a position not to be faced in our present economic plight and that the sensible thing to do is to find, by actuarial assessment at this stage, what is the proportion of the unfunded capital structure of the pension fund and then, by fixing that proportion, to pay that amount of the year-by-year commitment of the pension fund.

I cannot emphasise enough that it is not a political quarrel but a point of principle, in two directions, which guides this amendment and the amendments which were previously before your Lordships. I cannot overemphasise the fact that it was the noble Lord, Lord Selsdon, who, from the Conservative Benches, put down an amendment that, very briefly, with your Lordships' leave, I shall talk about in a moment. The purpose of the amendment moved by the noble Lord, Lord Selsdon, and the purpose of the amendment which I ventured, with some of my noble friends, also to put down, was to say this to the House: can anybody, with any confidence whatsoever, make an actuarial assessment upon which anybody can rely over the next 20 years as to the due proportion that should be borne by Governments and by the pension fund? It is a calculation that has to take into acount rates of inflation over the next 20 years and investment rates over the next 20 years.

Possibly your Lordships will not wish to take it from me but will wish, instead, to hear the objective view of the Economist. I am looking at an issue of January of this year from which I quote: The snag is that the inherited liabilities, the bulk of which run for around 20 years, could be worth anything between £1 billion and £2 billion, depending on the actuarial assumptions. The relative contributions of Government and railmen hinge on the valuation which will be made by the end of 1981, and there is no provision for a review if the sums prove wrong. The one safe assumption is that the valuation will be moonshine, since it involves forecasting pay and price inflation for the next 20 years".

I will put before your Lordships only one other quotation: On the sums involved, it would he easy to run up a deficit of, say, £100 million to £200 million —very embarrassing for British Rail".

There is another side to this coin: what will the British taxpayer think of your Lordships' deliberations on this provision in the Bill if you do not take the trouble to safeguard the taxpayer and the forecast now made by the actuary happens to be very much for the benefit of the British Rail pension fund and very much against the Government coffers that are involved? We have heard that amounts of £250 million and more can be involved. What criticism will fall upon your Lordships in exercising your powers of revision of this part of the Bill, which your Lordships always do so well, if you say that for all time, regardless of the benefits in millions that may be gratuitously passed to this pension fund, the taxpayer is unable to get any part of it back and if no provision whatsoever is made for a review!

I come back to the amendment of the noble Lord, Lord Selsdon, with which he dealt so ably, as one would expect, at the Committee stage, but the burden of which, at the Report stage, fell at very short notice upon the noble Lord, Lord Morris. I think your Lordships were full of appreciation for the way in which he shouldered that burden, having had only a short period of time in which to prepare his case to put before the House. The basis of the amendment moved by the noble Lord, Lord Selsdon—I have stolen from it, I say quite frankly, for the purpose of the amendment which I am now putting before your Lordships—was this: do not have a review unless five years have passed since the last review, unless both parties consent; but if both parties or either party feels that a review is necessary then a review should be carried out; the Minister should consider the situation and make a decision as to what, then, is the proper proportion that ought to be borne.

I put down an amendment, which your Lordships kindly considered, that called for two fixed reviews, in order, as I hoped, to deal with a governmental objection that they did not want to walk into an open-ended commitment for the future. The noble Lord, Lord Selsdon, withdrew his amendment after certain assurances had been given by the noble Lord the Minister. They were merely verbal assurances: that one would hope that a Government would never let down a nationalised industry and that a nationalised industry's commitments were sacrosanct and implied governmental credit. That, as your Lordships well know, is no legislative commit- ment. It depends upon the interpretation of words used in a debate henceforth and it could so easily be negated by the Treasury in future years. This is a very serious matter for British Rail. We all know the parlous state of its finances. Where is this money to come from unless, if there is a deficit, it is thrown completely unfairly—and contrary, incidentally, one would have thought, to EEC commitments —on to the cost of travel, which means an increase in fares. That is a totally unfair situation.

The amendment which I ventured to put before the House failed by three votes. I now come before your Lordships again, trying to find in your Lordships' House three neutral faces that might be turned in my direction and therefore to put an injustice right, be it an injustice to the pensioner or the taxpayer of future years. This is what I have done. In my amendment, which I hope will commend itself to your Lordships, I have taken from the amendment which was tabled by the noble Lord, Lord Selsdon, the point that a review will not be necessary and will not be called for unless one party serves notice on the other.

In my amendment I have saved this Government from any commitment whatsoever. It has a clear 10 years ahead of it without any alteration being made to the formula it wants, without any possibility (unless of course it be mutually agreed) of a review having to be held, because my amendment says that no review shall take place until 10 years have passed.

I emphasised before that it was not a political amendment at all. Your Lordships will appreciate that these reviews will fall into the democratic situation of the future which none of us can foretell, whether it be a Labour Government, whether it be a Conservative Government or whether, in answer to the dreams of certain people, it be a centre Government of some kind. In those circumstances your Lordships will appreciate—and I repeat it—there will be no commitment to a review unless the situation has so materially altered that one party serves notice upon the other. There will be no repetition of a review in an unseemly fashion. Five years have to elapse.

Lastly, may I make this point. I think it was the noble Lord, Lord Nugent of Guildford, but he will forgive me if I have wrongly ascribed to him these remarks, and in any event they were very helpful remarks; or it may have been the noble Lord, Lord Renton; but I know that from the Benches opposite the remark was made that possibly the formula that I had in my amendment which dealt with an actuary having to make certain assumptions, created some complexity. I have borrowed again from the amendment tabled by the noble Lord, Lord Selsdon; no longer has an actuary got to come into this review. The Minister himself, after proper consultations, can hold the review, and the result of his review will form part of the subject matter of an order which will come before Parliament in order that the negative procedure may be adopted.

I conclude by saying this. This is the last time in your Lordships' House that justice can be done, not only to the pension fund but to a future set of taxpayers. This is the last occasion on which your Lordships can insert into this Bill a review procedure. I only ask your Lordships to consider this before I resume my seat: I ask you not to be influenced by any suggestion made in the past by the noble Lord the Minister, who has always dealt with the points that I have made with the utmost fairness but on this particular matter above all I do not feel that his answer is a proper or a just one.

The Government say, "under the 1974 Act when a capital payment was going to be made, it was going to be made on a once-for-all assumption. Why should we differ from it on a year-by-year basis?" The answer to that is very simple: it is that if a capital payment of the substantial amounts that I have mentioned to your Lordships had been made, the pension fund trustees would have been able to do what all investment fund trustees do, what all settlement trustees do—namely, to invest those funds sensibly in order to safeguard the future and deal with varying interest rates and other such matters. They cannot do that with a "pay-as-you-go" system year by year, because the amount that conies in immediately has to go out to the pensioners concerned. My Lords, it is with some confidence, and again with a plea that there should be no question of loyalty except to principle and to the future commitments of both pension fund trustees and the citizens of this country who are taxpayers, that I ask for your Lordships' support for this amendment. I beg to move.

Lord LLOYD of KILGERRAN

My Lords, may I briefly, but I hope cogently, support the purposes and objectives of this amendment which has been moved so eloquently by the noble Lord, Lord Mishcon. I emphasise, as he has done, that this is not a political amendment. When this matter came up at the Committee stage I had prepared a very good speech, but the noble Lord, Lord Selsdon, spoke so eloquently in relation to his amendment and told us about the interest of his family in relation to these pensioners and in the railway business, that my speech was lost to posterity, because I did not think it was worth while wasting your Lordships' time with it. Unfortunately on Friday 6th June I was unable to be present here, for which I have previously apologised to the House; therefore I missed the speech of the noble Lord, Lord Morris.

I should like to congratulate the noble Lord, Lord Mishcon—if he can spare me just a moment from discussing these matters with the most distinguished noble and learned Lord—I repeat, I should like to congratulate the noble Lord, Lord Mishcon, on the scope of these amendments, because it seems to me, as he has said, that he has extracted from the various amendments moved at the Committee and Report stages the essential matters which make these amendments more appropriate to be supported by your Lordships. I can only conclude by saying that here is an occasion for your Lordships to enable justice to be done by inserting, in the way that has been skilfully drafted in the amendment, a review procedure on this important matter.

5.40 p.m.

Lord BELLWIN

My Lords, may I begin by saying yet again that I, too, would like to pay tribute to the noble Lord, Lord Mishcon, certainly for his great eloquence on this subject and also for the very fair way in which he has presented the case as he sees it. We have had now a number of debates on this particular issue and it is rather remarkable to me that what is such a complex matter has become, I would like to think, as familiar to other Members of your Lordships' House as it has to me. Certainly when I first looked at it it was very daunting indeed, and while I even now would not claim that it is altogether straightforward, at least I think that those who have listened to the three or four debates that have taken place should have a fair working knowledge of what it is all about. I think that is the key to it.

What is the object of the exercise? What is this all about? Is it not, surely, to ensure that those pensioners who are entitled to pensions which shortcomings in the past did not sufficiently make provision to cover do receive those pensions which they are entitled to have? That really is what this is all about, and we are talking about the different ways of arriving at that point. That is why, when my noble friend Lord Selsdon, who presented such an excellent case, further presented on his behalf equally excellently by my noble friend Lord Morris, at the end of the day felt able to withdraw his amendment, it was partly at least because of his satisfaction with the assurances which I was able to give.

The noble Lord, Lord Mishcon, says, not unfairly, "Yes, but at best that is an assurance given by a Minister in good faith"; he was kind enough to say, "But in future who knows?". Nevertheless, this is what the issue is about, and, if I may, I would like, not at too great length, to come back to this matter of what we might call guarantees.

The subject has been extensively debated, as indeed it was in another place. As the noble Lord, Lord Mishcon, said, we divided and it was a narrow result on that occasion. But as this matter is so important, and as the implications are so important, for the pensioners certainly but also for the relationship between Government and nationalised industries—it is as broad as that—I think it right that I should go over some at least of the ground yet again. I said at an earlier stage, and I say again now, that it is my firm belief that the Bill does not put members and pensioners of railway pension schemes at risk.

Let me also say once again that the Bill does not affect the entitlement of members and pensioners; nor does it reduce or remove the underlying obligations of the Railways Board and of the pensions scheme to secure that pensions are paid. I expect there is no difference between us as to that. But the Bill is concerned with one aspect of the financial relationship between the Government and the British Railways Board. It is concerned with the mechanics of that relationship. It is concerned with the means by which support is being provided to enable the board to discharge the obligations which have come to be known as the historic pensions obligations.

The Bill is not intended to disturb the overall financial settlement between the board and the Government. That settlement was laid down in the 1974 Act, which was concerned with all aspects of the Board's finances. Still less is the Bill intended to disturb the general relationship between the Government and the nationalised industries. There is really nothing new is this. In saying what I have said in the past I have been trying to put into words what has been the position for many years. Furthermore, it has certainly been the position under successive Governments.

I have not been trying to formulats any new doctrine or to extend any new commitment. Confidence is something that builds up over time. It was by referring to the existing position that I was able to say that railway pensioners can be confident that the board will be able to honour their legal obligations.

So I come to the point of the gurantee. What does it mean when I say that this by implication is a guarantee? I have tried to explain that an express guarantee in the form of writing it into the Bill would only raise doubts where none exist at present. The only reason for giving such guarantee would be if there were any risk that the board will default on their obligations. I make no apology for repeating that there is no realistic prospect that the board will default on their obligations, whether to their pensioners or to their other creditors.

The noble Lord, Lord Mishcon, is a learned lawyer and he will be familiar with the maxim expressio unius, exclusio alterius—which, roughly translated, means that by specifying one thing other things are excluded. If I were to give the express undertaking that the noble Lord has been seeking in another context—and I am coming back to the point of the guarantee —I would not be giving any additional reassurance to railway pensioners. Yet I would be causing concern to all other people who depend on nationalised industries or who do business with them.

As I complete what I have to say I would like to come back briefly to that point again, because I feel it is the nub of what we are talking about. The substance of the amendments is that the historic pensions obligations of the board should be transferred to the Government. But the pensions concerned are railway pensions and are the responsibility of the British Railways Board. Some of the obligations are of very long standing. In quantitative terms, however, the obligations are dominated by comparatively recent obligations incurred in the early 1970s. Indeed, the magnitude of the obligations is not fixed. At the margin the board's liability is affected by current management decisions of the board. It is, I would suggest, entirely right that responsibility for the obligations should remain with the board.

These amendments raise the whole question of the relationship between the Government and the nationalised industries. It has been the policy of successive Governments to maintain an arm's length relationship. The industries are not part of the Government. Within the limits laid down by the law they may manage their own affairs. They have their own assets, rights and liabilities. The noble Lord, Lord Mishcon, has said the magnitude of the liabilities might vary. Indeed, so they might. But then so would the Minister's payments. The Minister is meeting a proportion, not a fixed sum. The board's pensions obligations and all their other obligations remained with the board. What they received from the Government was a defined measure of support to enable them to meet those obligations.

If we were to proceed on the lines of the amendment the implications would be wide. It would bring into question the whole relationship between the Government and all the nationalised industries, and all the nationalised industries' pension schemes. What we are trying to do is to preserve the existing settlement and the existing relationship, which is one in which those concerned have confidence.

One final word on the question of a specific guarantee. I do understand this concern, and this was the thrust of the argument of my noble friend Lord Seisdon. I, too, am concerned that railway pensioners should receive the pensions to which they are entitled. But I do not see that such a guarantee would add to their entitlement or give them any protection which they do not now have. Indeed, it could have some unacceptable side effects. The real issue is whether the Railways Board will meet their obligations, all their obligations. We cannot go round saying that it is more likely that some obligations will be honoured than others. What I am being asked to say is that the Government stand behind some nationalised industry obligations but by implication not necessarily behind others. That would destroy the whole basis on which people deal with nationalised industries, a basis which has been accepted for many years now by successive Governments.

I really do believe that in the present context a specific guarantee would be the wrong way to proceed. I do not know what more I can add to this debate, which we are having yet again, beyond what I have said in the past. The noble Lord, Lord Mishcon, is so persuasive. Yet I have to say that the matter is one of great importance, the sums of money concerned are so great, but more important is the likelihood or otherwise of the pensioners receiving that to which they are entitled. I am absolutely satisfied that nothing in the Bill will prevent that from happening and that nothing in the amendments would be more likely to make that happen. In these circumstances, I must, once more, resist the amendment.

Lord NUGENT of GUILDFORD

My Lords, I expect that the noble Lord, Lord Mishcon, will be saying a few words before we proceed. The noble Lord referred to me in his speech thinking that he had borrowed some of my words, but I am afraid he had not done so. I have not previously taken part in the debates on this Bill. However, as I am on my feet I should like to say that I support the Minister's stand in principle. I was responsible for setting up the pension fund for the water industry. I inherited certain provisions from some sectors of the water industry and I then put them all together to create a pension structure for the whole industry. Therefore, I am very conscious of the principles involved in operating these pensions.

Inevitably, in terms of nowadays, the pension contributions from the employees, added to what we inherited from the past, are not sufficient to meet the index-linked pensions of the day in the nationalised industries. Therefore, there must be an actuarial valuation every year or two by the consultant actuary to advise what the employers' contribution should be increased to in order to maintain the fund at a size which will meet the liabilities as they grow in future. That, of course, is the situation in every nationalised industry.

As I understand it, my noble friend is saying that he does not wish in any way to undermine that general principle which must apply to all nationalised industries. He sees the 1974 settlement between the Government and the railways as something on its own which is now to be discharged finally, but there cannot be any continuing implicaton for the future which would in any way indicate some sort of Government guarantee, even to some extent. I entirely agree with that. I think that it would abe objectionable from the point of view of all the others.

5.53 p.m.

Lord MISHCON

My Lords, the noble Lord the Minister gave a very learned classical quotation, and in answer I have been trying to think of the equivalent Latin for the phrase, "If you have a strong case you should be able to demolish in two sentences a long speech". I have not found the Latin for that, but if I find it later I hope that your Lordships will forgive me if I quote it to your Lordships.

I apologise to the noble Lord, Lord Nugent of Guildford, for having said that he uttered sentences which were very helpful to me, but which he did not utter at all. Those sentences were, in fact, uttered and I am sure that it must have been the noble Lord, Lord Renton, who uttered them. However, both the noble Lord, Lord Nugent of Guildford, and the noble Lord, Lord Renton, speak with such clarity and charm that it is very easy to mix the two of them up. The one point that was made by both of them was that this might set a precedent for the relationship with other nationalised industry pension funds. That, in a sentence, was the whole point. My Lords, it would not.

There is no other pension fund—and I challenge the noble Lord the Minister to mention one, if there is one—that has the circumstances of the railway pension fund. No other nationalised pension fund was raided; no other nationalised pension fund has its capital—required for pensions for employees who had given long years of service to the railway industry—used for the purpose of the industry itself. Pre-nationalisation and post-nationalisation, no other nationalised pension fund had that history. No wonder it has been called in this debate—and indeed in the Bill—an historic pension fund. Indeed, this is a part of the history of pension funds which is not repeated anywhere else, and it is a matter of solitary, historical past in regard to these pension funds. That is why in 1974 very special arrangements were made for the funding of this by the capital payments to which reference has been made.

Lord BELLWIN

My Lords, if the noble Lord will give way for a moment,

perhaps I may remind him of the Post Office fund which has huge deficits.

Lord MISHCON

My Lords, I am grateful to the noble Lord the Minister, because again he returns to a theme which, if I may say so, does not help his case. I have not talked in terms of other pension funds being in surplus or in deficit. I have said that there is no other pension fund of a nationalised industry whose monies were used for the purpose of the industry itself instead of being properly invested. As I understand it, the Post Office unfortunately ran into deficit for totally different reasons. That is why the commitment was made by the Government; that is why your Lordships have a special burden upon your consciences tonight—I say that without any hesitation at all; that is why the review in this case creates no precedent and is no different from the view that the noble Lord, Lord Nugent, felt ought to be taken in regard to all other nationalised pension funds. And that is why I ask your Lordships to support the amendment.

5.57 p.m.

On Question, Whether the said amendment (No. 13) shall be agreed to?

Their Lordships divided: Contents, 53; Not-Contents, 82.

CONTENTS
Amulree, L.	Hale, L.	Ponsonby of Shulbrede, L. [Teller.]
Ardwick, L.	Hampton, L.
Balogh, L.	Hooson L.	Sainsbury, L.
Banks, L.	Houghton of Sowerby L.	Seear, B.
Bernstein, L.	Jacques, L.	Segal, L.
Beswick, L.	Janner, L.	Simon, V.
Blyton, L.	Jeger, B.	Stewart of Alvechurch, B.
Boothby, L.	Kaldor, L.	Stewart of Fulham, L.
Boston of Faversham, L.	Leatherland, L.	Stone, L.
Brooks of Tremorfa, L.	Leonard, L.	Strabolgi, L.
Collison, L.	Llewelyn-Davies of Hastoe, B. [Teller.]	Taylor of Mansfield, L.
David, B.		Underhill, L.
Davies of Leek, L.	Lloyd of Kilgerran, L.	Vivian, L.
De Freyne, L.	McCarthy, L.	Wallace of Coslany, L.
Elwyn-Jones, L.	Mishcon, L.	Wedderburn of Charlton, L.
Fisher of Rednal, B.	Morris, L.	Wells-Pestell, L.
Galpern, L.	Noel-Baker, L.	Whaddon, L.
Goronwy-Roberts, L.	Peart, L.	White, B.
Gosford, E.
NOT-CONTENTS
Airey of Abingdon, B.	Bessborough, E.	Colwyn, L.
Alport, L.	Broadbridge, L.	Crathorne, L.
Ampthill, L.	Brooke of Cumnor, L	Cullen of Ashbourne, L.
Avon, E.	Brooke of Ystradfellte, B	Davidson, V.
Bellwin, L.	Caccia, L	De La Warr. E.
Belstead, L.	Chelwood, L.	Denham, L.
Berkeley, B.	Cockfield, L.	Derwent, L.
Digby, L.	Killearn, L.	Nugent of Guildford, L.
Dormer, L.	Kimberley, E.	Onslow, E.
Drumalbyn, L.	Kinnoull, E.	Penrhyn, L.
Dundee, E.	Kintore, E.	Rawlinson of Ewell, L.
Elliot of Harwood, B.	Lauderdale, E.	Redmayne, L.
Elton, L.	Long, V.	Reigate, L.
Emmet of Amberley, B.	Lucas of Chilworth, L.	Ridley, V.
Faithfull, B.	Luke, L.	Sandys, L. [Teller.]
Ferrers, E.	Lyell, L.	Skelmersdale, L.
Ferrier, L.	Mackay of Clashfern, L.	Strathclyde, L.
Forbes, L.	Macleod of Borve, B.	Strathcona and Mount Royal, L.
Fortescue, E.	Mancroft, L.	Strathmore and Kinghorne, E.
Glenkinglas, L.	Mansfield, E.	Strathspey, L.
Gowrie, E.	Marley, L.	Swinfen, L.
Gray, L.	Martonmere, L.	Trefgarne, L.
Hanworth, V.	Merrivale, L.	Trenchard, V.
Hawke, L	Mowbray and Stourton, L. [Teller.]	Trumpington, B.
Henley, L		Ullswater, V.
Hornsby-Smith, B.	Newall, L.	Vickers, B.
Hylton-Foster, B.	Norfolk, D.	Young, B.
Inglewood, L.	Northchurch, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.3 p.m.

Clause 53 [Meaning of "the relevant pension obligations"]:

Lord MISHCON moved Amendment No. 14: Page 47, line 5, leave out ("and").

The noble Lord said: My Lords, after the Report stage of this Bill, correspondence passed between the noble Minister and myself, and I trust for the peace and tranquillity of the House that copies of it reached the noble Lord, Lord Lloyd of Kilgerran. In the correspondence that passed I told the noble Minister of my sincere belief that the members of the scheme mentioned in this amendment have been caught between a whole series of technicalities, the root of which lies in the extraordinary financial structure of the scheme ever since its inception under a statutory instrument in 1954.

It will be recalled that the scheme was notionally funded; that is, everyone pretended that there was a fund even though it was not really there. In other words, it was rather like the story of the clothes of the fabled monarch. However, I was able to point out in my letter a method by which the increases in question could have been allowed for under the 1974 Act. In reply the noble Minister said: I fear I cannot accept that it was the intention of all concerned in 1974 that the increases should be paid automatically in future. It seems clear that the notional increases allowed for in the valuation were the actuary's contingency reserve and that he was adjourning (without commitment) the question of whether benefits should be improved until the next valuation when the matter would be reconsidered afresh".

Unfortunately, that is a complete misunderstanding of the position. The facts of the matter are that the 1974 valuation threw up a considerable surplus, and before the final valuation report was prepared there was consultation with the Government Actuary's department about whether the surplus should be distributed all at once, as it could have been, or whether part should be held back in order to provide future increases. The view was taken, and all were agreed at the time, that the proper course was to distribute only part of the surplus immediately, thus providing a pension increase of 28p per week, and that the rest should be held back with the deliberate intention of providing future increases.

The idea was that as the scheme provided pensions of fixed monetary amounts, it was the younger members who would suffer most in future on account of inflation. Therefore, they—the younger members—should be the members who should benefit most from the increases, which were 4 per cent. for every year of membership after 1974. This meant that a younger member with 25 years to serve would have his pension increased by 100 per cent. by the time he came to retire, whereas a member who was close to retirement would get a much smaller increase. Thus in no sense were the increases intended as a "contingency reserve", as the Minister has stated.

In his letter the noble Lord, Lord Bellwin, went on to put forward an argument why he could not accept that the funding debt created under the 1974 Act could have allowed for the increases now in question. However, I am advised that the technical basis of that argument is at best questionable, and I would remind the House that the Minister himself at an early stage—and I am quoting from Hansard of 19th May at column 691—stated that the question of whether the increases: would have qualified for support under the 1974 Act … is a hypothetical question to which … there is no answer.

I ended my letter by asking how the failure to pay the increases could ever be explained to members of the scheme. Lord Bellwin's reply was eloquent in its silence on this question.

It seems to me that in the unusual circumstances of this particular scheme, with its unique financial structure, the abandonment of the funding principle is creating injustice. If the scheme had been funded the increases could almost certainly have been paid, whereas under the Bill the money will certainly not come from the Government, and I am advised that the board has no spare resources to increase historic pensions. There are 5,000 contributing members of this scheme, all of whom could look forward to only a small pension of around £1.50 to £2 a week. I repeat those figures: £1.50 to £2 a week. If the amendment is passed it would enable the pensions of those who have retired very recently to be increased by about 30 pence per week, and there could be similar increases at five-yearly intervals in future.

The capital cost of the concession would be less, I am advised, than £4 million. It is a small sum in relation to the enormous amounts covered by this Bill. Indeed, this capital cost would be spread over a number of years, so that the annual outlay would not exceed £400,000. I hope that the House, in justice—I almost said in mercy—will agree to make a concession in the exceptional circumstances of this case, and that my amendment will be accepted.

6.12 p.m.

Lord BELLWIN

My Lords, I did indeed speak at some length to these amendments when we considered them in Committee and again when we debated them on Report. I will try not to go over too much of the ground again today. As the noble Lord, Lord Mishcon, said, he was kind enough to write to me about the amendments, and he explained why he considered that the proposed increases could have been funded under the 1974 Act. If I understand him aright, he is saying that a special actuarial basis could have been used to value the male wages grades scheme. Taking the rules of the scheme as they stood at 31st December 1974—that is, ignoring the increases which we are now debating, and using this special basis—the same result would have been achieved as if the rules had been changed before 31st December, 1974 and the scheme then valued in the normal way.

My Lords, I cannot see that any such device would have been permissible under the 1974 Act. That Act expressly provided that funding debt could not be prescribed in relation to increases in obligations attributable to amendments made to pension schemes after 1974. The method of valuation which the noble Lord has proposed would appear to be in direct conflict with the clearly expressed intention of Parliament. If it had been put to the department in the negotiations on the 1974 Act, I cannot imagine that it would have been acceptable.

The noble Lord has drawn attention to what he described at Report stage as the extraordinary financial arrangements for this scheme. They are certainly unique. However, in the present context, this cuts both ways. It is true that there is no fund and thus no investment profits. It is also true that the board pay no contributions, though in the actuarial valuations they are assumed to pay notional contributions equal to those paid by the members. If there had been a fund, and if the board had paid contributions, no support would have been provided under the 1974 Act, or under the Bill, in respect of those contributions. In effect, because of the peculiar arrangements in this scheme, the board are receiving support in respect of current service liabilities.

The noble Lord, Lord Mishcon, has referred to the letter which I wrote to him earlier this week. I am sorry if I have misrepresented the position of the scheme. However, I can say that these increases were not accepted in the discussions during 1974 on the obligations that were to be supported. Numerous rule changes were proposed and effected in 1974 in connection with the funding arrangements under the 1974 Act. There were even changes to the male wages scheme. The increases referred to in the amendments were not among those discussed and agreed. The noble Lord, Lord Mishcon, reminded me that I used the word "hypothetical". However, may I say that that was before I had had the benefit of the noble Lord's explanation of how the increases could have been paid. Having now had that, I cannot accept that explanation.

This is a difficult area. I said originally, when we first discussed this in Committee, that of course the kind of pensions and figures to which the noble Lord referred are, goodness knows! little enough in themselves, and I accept that. One has to be sympathetic as to that, and I certainly am. But the fact is that the purpose of this Bill is, it has to be said—regretfully, if one likes—not to put right anomalies in railway pension schemes. Therefore,

while feeling very much as one might do, I have to advise that I cannot ask the House to accept the amendment.

Lord MISHCON

My Lords, it is somewhat of a pity when a Minister has to express sympathy with pensioners of this kind and not be able to come forward with support of an amendment which would have cost so little in this Bill. There is no need for me to reply to the noble Minister's comments because I had thought that these would be the comments and I tried to deal with them both in the speech I made today and the speeches I made on previous occasions. I feel I owe it to the pensioners, and that this House does also, to divide.

6.18 p.m.

On Question, Whether the said amendment (No. 14) shall be agreed to?

Their Lordships divided: Contents, 45; Not-Contents, 86.

CONTENTS
Amulree, L	Hale, L.	Peart, L.
Ardwick, L	Hampton, L.	Ponsonby of Shulbrede, L.
Balogh, L	Hooson, L.	Sainsbury, L.
Blyton, L	Houghton of Sowerby, L.	Seear, B.
Boothby, L	Irving of Dartford, L.	Shinwell, L.
Boston of Faversham, L	Jacques, L.	Simon, V.
Brooks of Tremorfa, L	Janner, L.	Stewart of Alvechurch, B.
Collison, L	Jeger, B.	Stewart of Fulham, L.
David, B [Teller ]	Kaldor, L.	Stone, L.
Davies of Leek, L	Leonard, L.	Strabolgi, L. [Teller.]
Davies of Penrhys, L	Llewelyn-Davies of Hastoe, B.	Taylor of Mansfield, L.
Elwyn-Jones, L	Lloyd of Kilgerran, L.	Underhill, L.
Galpern, L	McCarthy, L.	Wallace of Coslany, L.
Goronwy-Roberts, L	Mishcon, L.	Whaddon, L.
Gosford, E	Noel-Baker, L.	White, B.
NOT-CONTENTS
Abinger, L.	Digby, L.	Harvington, L.
Airey of Abingdon, B.	Drumalbyn, L.	Henley, L.
Alport, L.	Duncan-Sandys, L.	Hornsby-Smith, B.
Ampthill, L.	Dundee, E.	Hylton-Foster, B.
Avon, E.	Ellenborough, L.	Killearn, L.
Bellwin, L.	Elliot of Harwood, B.	Kimberley, E.
Belstead, L.	Elton, L.	Kinnoull, E.
Bessborough, E.	Emmet of Amberley, B.	Kintore, E.
Broadbridge, L.	Energlyn, L.	Lauderdale, E.
Brooke of Cumnor, L.	Faithfull, B.	Long, V.
Brooke of Ystradfellte,	Falkland, V.	Lucas of Chilworth, L.
Caccia, L.	Ferrers, E.	Luke, L.
Chelwood, L.	Ferrier, L.	Lyell, L.
Cockfield, L.	Forbes, L.	Mackay of Clashfern, L.
Crathorne, L.	Fortescue, E.	Macleod of Borve, B.
Cullen of Ashbourne, L.	Glenkinglas, L.	Mancroft, L.
Davidson, V.	Gowrie, E.	Marley, L.
De Freyne, L.	Gray, L.	Merrivale, L.
De La Warr, E.	Gridley, L.	Morris, L.
Denham, L.	Halsbury, E.	Mowbray and Stourton, L [Teller.]
Derwent, L.	Hanworth, V.
Newall, L.	Reigate, L.	Strathspey, L.
Norfolk, D.	Ridley, V.	Swinfen, L.
Northchurch, B.	Sandys, L. [Teller.]	Teviot, L.
Nugent of Guildford, L.	Skelmersdale, L.	Trefgarne, L.
Orr-Ewing, L.	Spens, L.	Trumpington, B.
Penrhyn, L.	Strathclyde, L.	Ullswater, V.
Rawlinson of Ewell, L.	Strathcona and Mount Royal, L.	Vickers, B.
Redmayne, L.	Strathmore and Kinghorne, E.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 15 to 17 not moved.]

Clause 54 [Unfunded proportion of relevant pension obligations]:

6.27 p.m.

Lord MISHCON moved Amendment No. 18:

Page 49, line 6, at end insert— (" ( ) Before confirming or varying the said determination the Minister shall consult the persons administering the pension scheme concerned about the proportion he proposes to specify in the said order in respect of the scheme, and in the event of those persons giving notice in writing to the Minister within two months that they object to the said proportion, the Minister shall appoint an independent actuary, to be nominated by the president for the time being of the Institute of Actuaries, to report before the end of the second financial year on the proportion which would be appropriate and the Minister shall thereupon by order confirm or vary the proportion so as to give effect to the said report.").

The noble Lord said: My Lords, I hope to have your Lordships' support, largely because of the brevity of my speech but substantially because of what I have to say. I shall not take the House through the review procedure again; that, obviously your Lordships have decided upon. When the Government Actuary reaches his decision in regard to this matter, at the moment he does it unilaterally, and that is hardly a just way to do it. In December 1977 a letter was written from the Department of Transport to the British Railways Board which made it absolutely clear that there should be a basis of valuation and that that should be agreed freely by all the parties. I will read the paragraph in question and I will then say to your Lordships that this is calling for arbitration if the parties do not agree, which is obviously only fair, and then I shall take my seat, hoping for the support of the House. The passage is from the letter to which I referred, of 7th December 1977: The Government's policy on this issue remains as it was in 1974. It intends to make a final Funding Order in 1979 such that the value of all the Funding Orders taken together is sufficient to eliminate the historic deficiencies in the pension funds as revealed by the grand revaluation. It further intends that the basis for that valuation will be freely agreed by all the parties involved—the Government, the Board, and the funds—on the basis of the actuarial advice available to them".

Now, of course, we are not to have the capital funding, but the proportion is being dealt with on a year-by-year basis purely and simply on the basis of the actuarial advice given to the Government. All I ask for is the spirit of that 1977 letter to be carried through so that, if the parties do not agree, there shall be arbitration. I beg to move.

Lord BELLWIN

My Lords, I spoke in reply to this amendment in Committee a month ago, and there is not a great deal that I can add to what I said on that occasion. The noble Lord, Lord Mishcon, has again referred to the letter that was written from the Department of Transport in December 1977. In Committee I explained the circumstances in which that letter was written, as did my learned friend the Parliamentary Secretary in Committee in another place. I can only repeat that far too much weight is being placed on that letter, and not enough regard is being had to its context. The Railways Act 1974 placed the legal responsibility for determining the amount of funding debt to be created under that Act on the Minister, and it cannot have been the intention in 1977 that that responsibility should in effect be discharged by some other person.

The main issue raised by this amendment is the issue of responsibility, or accountability, if one prefers to call it that. The legal position under the Bill is, with one exception, the same as the legal position under the Act. The Minister is to determine the unfunded proportions, as he was to have determined the funding debts. The one change is that we have now written into the Bill a formal requirement for consultation before the unfunded proportions are determined. We have undertaken that we shall be seeking to reach agreement, but of course we cannot undertake that agreement will be reached, any more than we can abdicate from the position of responsibility for taking the decision.

Substantial sums of the taxpayer's money are at stake. There is no dispute about that. The decision should be taken by someone who is accountable to Parliament and the public. Thus, it is right that the Minister should take the decision, since no arbitrator could in any real sense be accountable in the way that the Minister is accountable.

I have repeatedly made clear that we shall be seeking a solution which is fair as between the taxpayer, on the one hand, and the board and the pension funds on the other. That is in our view the Minister's responsibility, and not something that could be passed to an arbitrator.

I do not wish to be the brick wall to which the noble Lord, Lord Mishcon, referred. Nevertheless, in view of the circumstances that I have mentioned, I have to resist the amendment.

Lord MISHCON

My Lords, I shall be brief. Since the noble Minister has been quoting maxims to me, I should like to quote to him a maxim that is sacrosanct in this House: No one shall be a judge in his own cause. The Minister is obviously a party to this matter. Should there be a difference between the Minister and those responsible for the pension funds, it will be just, and will be seen to be just, if there is an arbitrator.

6.33 p.m.

On Question, Whether the said amendment (No. 18) shall be agreed to?

Their Lordships divided: Contents, 38; Not-Contents, 73.

CONTENTS
Amulree, L.	Gosford, E.	Peart, L.
Ardwick, L.	Hale, L.	Ponsonby of Shulbrede, L.
Balogh, L.	Hooson, L.	Seear, B.
Blyton, L.	Irving of Dartford, L.	Simon, V.
Boothby, L.	Jeger, B.	Stewart of Alvechurch, B.
Boston of Faversham, L.	Kaldor, L.	Stewart of Fulham, L.
Brooks of Tremorfa, L.	Kilmarnock, L.	Stone, L.
Collison, L.	Leonard, L.	Strabolgi, L. [Teller.]
David, B.	Llewelyn-Davies of Hastoe, B. [Teller.]	Taylor of Mansfield, L.
Davies of Leek, L.		Thomson of Monifieth, L.
Davies of Penrhys, L.	Lloyd of Kilgerran, L.	Underhill, L.
Galpern, L.	Mishcon, L.	Wallace of Coslany, L.
Goronwy-Roberts, L.	Noel-Baker, L.	White, B.

NOT-CONTENTS
Abinger, L.	Gowrie, E.	Newall, L.
Alport, L.	Gray, L.	Norfolk, D.
Ampthill, L.	Gridley, L.	Nugent of Guildford, L.
Avon, E.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Orr-Ewing, L.
Bellwin, L.		Penrhyn, L.
Belstead, L.	Hanworth, V.	Rawlinson of Ewell, L.
Bessborough, E.	Harvington, L.	Redmayne, L.
Broadbridge, L.	Henley, L.	Reigate, L.
Brooke of Cumnor, L.	Home of the Hirsel, L.	Ridley, V.
Chelwood, L.	Hylton-Foster, B.	Sandford, L.
Crathorne, L.	Killearn, L.	Sandys, L. [Teller.]
Cullen of Ashbourne, L.	Kimberley, E.	Skelmersdale, L.
Davidson, V.	Kinnoull, E.	Soames, L. (L. President.)
De La Warr, E.	Kintore, E.	Spens, L.
Denham, L.	Lauderdale, E.	Strathclyde, L.
Digby, L.	Long, V.	Strathcona and Mount Royal, L.
Drumalbyn, L.	Lucas of Chilworth, L.	Strathmore and Kinghorne, E.
Dundee, E.	Lyell, L.	Strathspey, L.
Ellenborough, L.	Mackay of Clashfern, L.	Swinfen, L.
Elton, L.	Mancroft, L.	Teviot, L.
Falkland, V.	Marley, L.	Trefgarne, L.
Ferrers, E.	Merrivale, L.	Vickers, B.
Ferrier, L.	Morris, L.	Vivian, L.
Fortescue, E.	Mowbray and Stourton, L. [Teller.]	Westbury, L.
Glenkinglas, L.		Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 19 and 20 not moved.]

Clause 56 [Reduction of payments in respect of certain supplementation schemes]:

6.41 p.m.

Lord BELLWIN moved Amendment No. 21: Page 50, line 26, leave out ("they were").

The noble Lord said: My Lords, it would be convenient, I feel, to take this amendment, No. 21, and Amendment No. 23 together.

These are essentially technical amendments. They are prompted by the phrase "payable under a pension scheme", which occurs in a good many places in the Bill. Does this phrase mean "now payable", so that the phrase relates only to pensions which have already come into payment? Or does it also cover pensions which are prospectively payable to employees who have not yet retired? In most places, the correct interpretation is clear from the context. However, there are two places in Clause 56 where some clarification is desirable.

The amendment to Clause 56(6) makes clear that the Actuary is to take into account not only pensions currently payable but also those that have not yet come into payment, provided always that the pensions concerned are pensions which stand to be increased under the supplementation scheme. This has always been the intention behind the clause. The amendment to Clause 56(3) is a drafting amendment. It brings the treatment of the phrase "payable under a pension scheme" into line with the treatment of the phrase elsewhere in Part III of the Bill. I am conscious that we have been making rather heavy weather with the drafting of this clause. I hope we now have it right. I beg to move.

On Question, amendment agreed to.

Lord MISHCON moved Amendment No. 22: Page 50, line 27, leave out ("85") and insert ("80").

The noble Lord said: My Lords, at an earlier stage, and in correspondence and discussions with the Minister since the Report stage, I have endeavoured to submit that the surplus clawback provision in the present Bill could reduce the ability of the older pension schemes to improve the position of their members out of surplus. I pleaded for some concessions to help remove a deep feeling of injustice, and that the Government should show some sensitivity, especially because the people affected included widows, orphans and very elderly people, whom it seemed so unfair to penalise.

By this amendment, the Government have been given an opportunity to make a modest gesture by reducing the clawback from 85 per cent. to 80 per cent. Something tells me that, beneath that apparently frigid exterior that the Minister has shown to me throughout this Bill—I know not willingly, but as a result of the duty he feels he owes—there beats a sympathetic heart. I hope that, because of that, and in this instance at least, I may not have pleaded in vain. I beg to move.

Lord BELLWIN

After that, my Lords, what can I say? I am in fact very pleased that the noble Lord has tabled an amendment which, for once, I can accept. I do not wish to detract from what I have just said, but I hasten to say —and I know the noble Lord will forgive my saying it—that my acceptance is limited to his amendment and perhaps not necessarily to all the arguments which were employed previously in support of this matter. I hope I am not spoiling it by saying that, but I think I have to say it. I could go on and refer to my brief, but I feel there is not much point in it. We are glad to make the gesture. It could be argued that it is little enough; on the other hand, I think the points I made in the past were absolutely valid. Yet we accept this, and I am glad so to do.

Lord MISHCON

My Lords, it would be most ungracious of me not to say "Thank you".

On Question, amendment agreed to.

Lord BELLWIN moved Amendment No. 23: Page 51, line 9, after ("are") insert ("or are likely to become").

The noble Lord said: My Lords, have spoken to this already, with Amendment No. 21. I beg to move.

On Question, amendment agreed to.

[Amendment No. 24 not moved.]

Clause 59 [Supplemental provisions]:

Lord BELLWIN moved Amendments Nos. 25 to 28:

Page 52, line 29, at beginning insert ("(a)").

Page 52, line 29, after ("of") insert ("any").

Page 52, line 30, leave out ("otherwise") and insert ("(b)").

Page 52, line 32, leave out ("that") and insert ("either").

The noble Lord said: My Lords, it would be convenient to take Amendments Nos. 25, 26, 27 and 28 together. They are drafting amendments. They are intended to put it beyond doubt that the power to amend pension scheme rules so as to pay increases is independent of the power to amend rules to bring the scheme into conformity with the Bill. It is the intention that the power of rule amendment should be available for either purposes. For the record, I ought to say that there is nothing in the Bill which would require benefits to be reduced, and there is no question of this clause being used for that purpose. With your Lordships' permission, I beg to move Amendments Nos. 25 to 28 en bloc.

On Question, amendments agreed to.

Clause 64 [Roof signs on vehicles other than taxis]:

Lord UNDERHILL moved Amendment No. 29: Page 56, line 15, after ("of") insert ("or any part of").

The noble Lord said: My Lords, it will be convenient if I speak also to Amendment No. 35, which will be consequential if this amendment is carried. Although we are at the tail end of this Bill, the amendments I am going to move—this one and the subsequent one—deal with the taxi cab trade, and all your Lordships, I am certain, rely very often upon our taxi drivers and taxi operators for assistance. This amendment relates to a new clause which was tabled by the Government at the Report stage. Therefore, this is the first opportunity that your Lordships have had to consider any possible amendments.

The National Federation of Taxicab Associations have for some time been pressing for action on the lines of this particular clause, but they have expressed great concern at the drafting of it. The clause as drafted will not have the desired effect unless certain changes are made. I find the arguments advanced by the association to be compelling and logical, and I hope your Lordships and the Minister will find them likewise. It is essential that the words "or any part of" should be inserted after the words "roof of" in line 15 of the new clause. It is possible for signs mentioned in paragraphs (a) and (b) to be displayed elsewhere than on the roof of a vehicle; and your Lordships will be aware that in certain parts of the country taxis do not carry signs on the roof, they carry them behind the windscreen and they are activated (maybe illuminated, maybe not) when the meter commences ticking over.

From my reading of the new clause, it would permit a sign or notice, whether illuminated or not, containing the word "taxi", "cab" or "hire" to be displayed elsewhere than on the roof. It could be displayed above the bumper; it could be displayed on the rear of the vehicle; it could be displayed on the sides of the vehicle. I am certain that is not what the Government intend, but that is what the clause will permit; and I urge that this amendment be supported in order to make the position logical. I am certain it is not the intention of the Government that any of these signs should be displayed in the way I have mentioned, but the wording of the Bill, unless it is amended in the way that I have suggested, could mean that these signs could be displayed anywhere on a vehicle other than a taxi except on its roof. I beg to move.

6.50 p.m.

Lord BELLWIN

My Lords, I have given careful consideration to these amendments, which would extend the ban on roof signs to cover signs anywhere on the vehicle. Having done so, I have concluded that the clause as drafted at present goes as far as we would wish. If I may remind noble Lords, our aim is to prevent vehicles which are not taxis from pretending to be taxis. Since, as I understand it, throughout most of the country it is roof signs that are the distinguishing marks of a taxi, we have directed the provisions at roof signs. Indeed, it was at these that the noble Lord's own clause, which he moved in Committee, was directed. It referred in terms to roofs.

I believe that the clause as drafted recognises and meets the legitimate concerns of the licensed taxi trade. It may be indeed that a more comprehensive look should be taken at the sort of signs that taxis and hire cars are allowed to carry; and I gladly undertake to draw what has been said to the attention of my right honourable friend the Home Secretary. But it is not possible to go further than we have gone in this Bill.

I should like to add that here is a dilemma, a dichotomy. The problem on the one hand is of ensuring that the taxi trade and its interests are properly covered. The service which they give is a vital one and we recognise and accept that. On the other hand, it is also fair to say that the private hire trade also carries out an important service. It, too, has its concerns. In pleasing one, one takes the risk of having the opposite result for the others. That is why I said that there is probably a very strong case for having a comprehensive look at this whole area of signs and the like. I gladly confirm that we shall be doing that. So far as this Bill is concerned and for the time being. I fear that I cannot go further.

Lord LUCAS of CHILWORTH

My Lords, while we are on this particular subject, and while I support my noble friend Lord Bellwin, it may be an appropriate time to recall the debates that we had on this subject in 1976 when the interests of the hackney trade were being debated. I think one should remember that the hackney trade carry out a number of the functions which the licensed hire business carry out in so far as they, the hackney trade, undertake private hire work. This is an areas which used to be the province of the private hire industry; and while the hackney trade have that privilege, the hire people have no like privilege. They can do nothing other than the private hire work which is mostly telephone bookings.

It is also right and proper—and I think that it was the noble Lord, Lord Airedale, who brought this up in 1976—that on being sent to an area a private hire car which may not be recognisable by the hirer should have some element of recognition. It may be a plate on the rear of the car or perhaps a firm's name on the side of the car or something like that. There can be only one real point of confusion and that is where at high level, either on the roof or high on the screen, there is a lighted sign implying "For Hire". That would breach the touting rules. At the present stage in this Bill, I think it is reasonable to accept what my noble friend has said.

I wonder whether my noble friend is able to confirm that the licensing arrangements of both private hire and hackney vehicles are the subject of a Home Office review and that a consultative document is anticipated later this year. If he is able to say anything on this, it would indicate to us the time at which we may wish to take further the whole matter of licensing and sign.

Lord BELLWIN

My Lords, I am not able to be as specific as my noble friend would wish, but I undertake to take up this matter elsewhere. I will write to him and to any other noble Lord who may be interested. I think that his point is a valid one. If we can do what he says at that time, then it brings it closer to a time when decisions will be made. I have tried to indicate that we are concerned about this. I shall certainly write to him on that.

Lord UNDERHILL

My Lords, it is not the purpose of this amendment to endeavour to set up any arguments between the private hire trade and the taxi-cab trade. We are endeavouring—as are the Government in their clause—to make it clear that nobody misrepresents a vehicle to be a taxi when it is not. If my remarks are read carefully, in the Official Report, I think it will be seen that logic is on my side. If somebody is to be prevented only from putting a sign on or above the roof, it means that it can be put anywhere else. Therefore, the sign the Government wish to prohibit can be put elsewhere. Somebody can then represent a vehicle to be a taxi when it is not a taxi.

Lord BELLWIN

My Lord, if the noble Lord will give way, I have had it confirmed that the review to which my noble friend referred is taking place. It is hoped to produce a consultation document during this year.

Lord UNDERHILL

My Lords, logic is on our side. I hope that that will be taken into consideration when this review takes place. In the light of the Minister's statement that he will discuss this too with his right honourable friend and colleagues, and that this review will take into consideration what I believe to be the logic of the argument, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord UNDERHILL moved Amendment No. 30: Page 56, line 24, leave out ("having regard to the time and place at which it is displayed").

The noble Lord said: My Lords, for the convenience of the House, I shall take also Amendments Nos. 31 and 32 together. They are interrelated. I am advised that a legal opinion has been taken on the wording of this clause and that the effect of the wording as it is will make prosecutions extremly difficult. One can imagine the arguments which could take place if the wording in the Marshalled List which we suggest should be deleted, is not deleted. Your Lordships' will agree that it is not our desire to have prosecutions. We hope that the law will be observed. But if people infringe the law, there must be clear legal arguments. The purpose of this amendment is to make the law less ambiguous than it appears at present. I have hope and reason to believe that the Minister may be able to regard these amendments sympathetically and I look forward to his comments.

Lord BELLWIN

My Lords, as I have indicated in a letter to the noble Lord, Lord Underhill, we have considered these two amendments and have concluded that they do, indeed, render Clause 64 more straightforward. I am happy to recommend the House to accept the amendments.

On Question, amendment agreed to.

Lord UNDERHILL moved Amendment No. 31: Page 56, line 25, leave out ("to a person seeking to hire a taxi").

On Question, amendment agreed to.

Lord UNDERHILL moved Amendment No. 32:

Page 56, line 26, at end insert— ("(c) no vehicle being used to give lifts for payment under this Act, or the Transport Act 1978, shall carry any sign of any kind or description on any part of the vehicle indicating that the vehicle was being used, or is used, to give lifts for payment.").

The noble Lord said: My Lords, your Lordships will be pleased to know that this is the last amendment that I shall move on this Bill. The wording of this amendment was included in the amendment tabled for Report and which I withdrew in view of the Government amendment setting out the new clause which we have been debating on previous amendments and on this particular amendment. No reference at all to the point of this amendment is made in the Government's clause. We are concerned not only that any vehicle used for car sharing shall not carry any sign such as "Taxi" or "Cab" or "For Hire" (which would be prohibited by the wording of the clause) but that any car being used for car-sharing under other proposals in the Bill shall not be able to carry any sign or notice indicating that the vehicle is being used, or can be used, for car-sharing. This is a simple amendment which I hope the Government will find it possible to accept.

Lord BELLWIN

My Lords, I have written to the noble Lord, Lord Underhill, explaining that Clause 64, which bans roof signs on vehicles other than taxis, extends to private vehicles used for car sharing. It covers any vehicle which is used for carrying passengers for hire or reward. Although vehicles not used in the course of a business of carrying passengers are exempted from bus licensing by Clause 2, they are still carrying passengers for hire or reward, and are therefore caught by this clause. All vehicles other than taxis will be prohibited from masquerading as taxis.

I am afraid that I cannot agree to a wider ban on signs on private cars used for car sharing. They will be unable to ply for hire, since as Clause 2 makes clear the arrangements for payment must be made before the vehicle begins its journey. And I do not think that in general notices on vehicles are the best way of getting car sharing or car pooling schemes going—notices at workplaces or in local newsagents are likely to be much more effective. But this Bill gets rid of restrictions, particularly the irksome existing restrictions on advertising car sharing, and it would be wrong to go back now on this policy. I can, moreover, envisage circumstances in which some indication on a vehicle being used entirely non-commercially is positively desirable—a driver for instance participating in a rural social car scheme may be unknown to his passenger, and a sign on the car may be a real help in identification. With this further explanation, I wonder whether the noble Lord will feel able to withdraw his amendment which I fear we must resist.

Lord MORRIS

My Lords, on a very small point, I hope that the noble Lords opposite will withdraw the amendment. I feel any parliamentary draftsman who included the phrase "give lifts" would certainly turn in his grave.

Lord UNDERHILL

My Lords, as my colleague says, it would give the parliamentary draftsman some activity. There are other colloquial expressions one sometimes finds in Bills. I hope that this matter will also be included in the general review of signs on vehicles. If that is the understanding, in the light of what he has said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord BELLWIN moved Amendment No. 33: Page 56, line 36, after ("1869") insert (",section 270 of the Burgh Police (Scotland) Act 1892").

The noble Lord said: My Lords, this clause does not extend to Scotland, not because the Government believe that the principles behind it are valid only in England and Wales, but because taxi and hire car legislation—unlike bus licensing legislation—has always been separate for Scotland, and there will be an appropriate mechanism for making similar provision in Scotland in legislation which the Government have in preparation. The clause as drafted however fails to allow for the possibility of taxis licensed in Scotland crossing the Border into England. The amendment ensures that they will not, in England, be caught by the ban on roof signs. I beg to move.

On Question, amendment agreed to.

Schedule 5 [Minor and consequential amendments relating to public service vehicles]:

Lord BELLWIN moved Amendment No. 34:

Page 71, line 25, at end insert— ("1A. In section 7 (interpretation), in the definition of "public service vehicle" for sections 117 and 118 "substitute" Part III".").

The noble Lord said: My Lords, this is a minor consequential amendment which replaces a reference in the Road Traffic (Foreign Vehicles) Act 1972 to Sections 117 and 118 of the 1960 Road Traffic Act by a reference to Part III of that Act. I beg to move.

On Question, amendment agreed to.

[Amendment No. 35 not moved.]

7.5 p.m.

Lord BELLWIN

My Lords, in moving, That the Bill do now pass, I feel it proper that I should make a brief reference to a report which your Lordships may have seen in the Press today about the effect of this Bill. The comment was made by the noble Lord, Lord Shepherd, on the publication of the annual report and accounts of the National Bus Company. I feel it proper that some reply on behalf of the Government is called for and I shall do it briefly.

The noble Lord, Lord Shepherd, was of course speaking from the point of view of an operator, while the Government's perspective is necessarily wider. For the past 25 years bus services have been cut and subsidies and fares have increased owing to cost increases and declining demand for conventional bus services as more and more people have cars. The present licensing system and the cross-subsidisation to which the noble Lord, Lord Shepherd, refers have failed to prevent this decline. It is wrong to attribute to the Transport Bill cuts in services that any prudent operator has to make as costs rise and demand changes; the nation simply cannot afford the massive subsidies that would otherwise be needed.

What the Transport Bill does is to make it easier for small new private operators to enter the market, and it may well be that they can provide services on the less used routes that the NBC cannot. The greater competition on the more profitable routes will tend to keep fares down and improve services; and although there may be fewer profits available for cross-subsidisation it is wrong to assume that cross-subsidisation always benefits the poorer sectors of the community (in fact it may well be the poorer people who use the profitable routes while the less profitable ones serve the more affluent areas, and cross-subsidisation then would keep services to the richer going at the expense of the fares paid by the poorer).

Moreover, let us not forget that the Transport Bill does not abolish road service licensing; it retains it, though in a more relaxed form, for local services. If the traffic commissioners are convinced that protection of an established operator on a route is essential in the interests of the public, they will be able to refuse licences to any competitors. County councils and their Scottish equivalents will retain their transport co-ordinating role and power to pay revenue support, and their views will be given great weight in the traffic commissioners' decisions whether or not to grant licences. They will be able to subsidise conventional buses when they are convinced this is necessary and it will be for them actively to seek out less conventional ways of meeting residual transport needs in areas where demand is just too small for a conventional bus service. The previous Government's RUTEX experiments indicated some of the possibilities, and the Government will be building on this work in the coming months. We must not be mesmerised by the past and by the conventional bus—there are many more cars and minibuses about now, and they can, we are convinced, be better deployed to meet people's real needs.

When I moved the Second Reading of this Bill nearly two months ago I said that this was my first Bill, and one which I was proud to present to your Lordships. I also said that I looked forward to a stimulating debate. We have certainly had many very stimulating debates, most of which I have greatly enjoyed. I have found the contributions made by noble Lords opposite and by various of my noble friends always interesting, usually constructive, and not infrequently of great value. I gladly pay tribute to all who have been involved. I believe that the Bill has been improved by our labours, and that what was always a good Bill is now an even better one.

This Bill is about freedom and opportunity. It relaxes bus licensing after 50 years. It provides opportunities for new bus services to be provided to meet the real needs of the travelling public. It frees the National Freight Corporation from the shackles imposed by nationalisation and Government controls and allows it to exploit the opportunities that the market offers. Finally, the pensions provisions of the Bill—which we have debated at great length—meet the justified criticisms voiced by the Public Accounts Committee while preserving the respective responsibilities of the Government and the Railways Board and, above all, the pension entitlements of members and pensioners of railway pension schemes. It is now for those to whom the Bill gives freedom to take advantage of it and to benefit the whole community in the process. I beg to move that this Bill do now pass.

Moved, That the Bill do now pass.—(Lord Bellwin.)

7.12 p.m.

Lord UNDERHILL

My Lords, may I first express warm thanks to the noble Lord, Lord Bellwin, for the courteous and efficient way he has handled all stages of this Bill. He has shown courtesy in all directions and has been extremely helpful. As I mentioned in a previous debate, I and my colleagues are very grateful for the various exchanges of correspondence with the Minister. I only wish that he had a better Bill on which to bite his teeth.

A number of amendments have been accepted. We are grateful that a number of amendments proposed from this side of the House and from other noble Lords have been accepted. In other cases, the Government have been impressed by the arguments and have tabled amendments in line with the principles that we have outlined. We are very pleased with that. I believe that the House, in relation to this Bill, has shown itself to be a revising Chamber. I think this is now a better Bill than when it first came here because of the amendments, but, in our view, it is still not a good Bill.

Having paid my tributes to the Minister, I must say there is still a great difference between the Government and this side of the House on the principles of road passenger transport and its future. The Government have set store on the relaxation of licensing, on deregulation and the opening up of competition. I must make it clear that we on these Benches support innovations, experiments and enterprise, but in our view they must be within a system of regulation which for the past 50 years has enabled this country to have one of the finest national networks of bus services; and that we wish to continue. We do not want control for control's sake, but the licensing system and regulations have served the British public well.

I listened very carefully to what the noble Lord said about the report of the National Bus Company and its chairman. If he had not referred to it I should have done. It would be of little value if one area were perhaps to improve its services to the detriment of a network of services. It would be of little value if new operators come in to try to cream off the best routes on the most popular days and at the most profitable times. That is one of the apprehensions about the Bill.

In the course of the debates, the Government have consistently rejected or adopted a somewhat cynical attitude towards cross-subsidisation. The noble Lord was critical of cross-subsidisation in his remarks about the National Bus Company but I hope that the remarks of the National Bus Company in its report and of the chairman will be taken very seriously.

We from these Benches have represented on some occasions the views of the Confederation of Road Passenger Transport. I would remind your Lordships that they represent 95 per cent. of the operators in this country—that is, the national networks, the PTEs and also private operators. Sometimes we have represented their views and sometimes we have put up views which they have not supported. But, by and large, their views are put forward not only on behalf of operators but in the interests of the travelling public, and we have endeavoured to reflect those in the amendments we have put forward.

I turn now, briefly, to another subject. The Government seem to have put a lot of store on car-sharing. They seem to over-emphasise its value and possible extension. Car-sharing, of course, has been a civilised practice by many of us for very many years; and long may it continue. But we think, on this side, that there seems to be a certain amount of window dressing on the part of the Government to hide a lack of concrete policies.

The Government have also put a great deal of faith in the trial areas. Although I raised this on more than one occasion, we have not heard in debate any analysis of the experimental schemes under the 1977 Experimental Areas Act; nor have we had any analysis of the 15 Routex schemes to see whether or not the trial areas would be successful. Naturally we shall await with great interest the developments in that scheme but, perhaps because some of the proposals in the Bill have not been amended on the lines we wanted, some counties will be very chary of coming in. There is apprehension already on the part of some counties that the floodgates will be opened and operators will be at the mercy of outsiders coming in. That is particularly so in some seaside resort areas.

I shall not take up the time of the House for very much longer, but I should like to say that, although we are grateful for the changes, there are still things in this Bill on which there are great differences between us. I am certain that the Government will consult with the confederation as regards all the many regulations that have to be drawn up as a result of the proposals in this Bill. I hope they will also keep in close touch with the operators to monitor the changes under this Bill, many of which are likely to be far-reaching, and that they will monitor the changes with the counties and also take heed of what the licensing commissioners may say as time passes.

Lastly, I should like to refer to the sad view we hold of the decision to sell the National Freight Corporation. We have followed the right line in not asking the House to oppose this issue as it has been decided in another place. We are concerned, of course, that the case of the National Freight Corporation has been decided by following a doctrinaire line. Here we have an undertaking which everybody admits is efficient and a pacemaker in the haulage industry, and yet it is going to be hived off and sold. I sincerely hope that the Government will adhere to their undertaking not in any way to divide up the National Freight Corporation as a unit. It is a tragedy that, for doctrinaire reasons, we are going to have unsettlement in that particular concern and also unsettlement among the workers in that industry. Therefore, while expressing appreciation for the attitude and the courtesy of the Minister, there are still aspects of this Bill with which we are very concerned. We do hope that some of its provisions will be monitored very carefully as the years go by.

Lord MISHCON

My Lords, I promise I shall be very brief, but I should like to take the opportunity, as someone to whom your Lordships have shown much patience in the course of the debates on this Bill, to pay my tribute to the noble Lord, Lord Bellwin, for the manner in which he has piloted his first Bill through this Chamber. It is odd that it should be a transport Bill, but may I say that if his piloting is equalled by the drivers of whom we have been talking in their manner of conducting their vehicles, I am perfectly sure that the nation will be satisfied with its drivers at all events!

I ventured to describe this Bill on Second Reading at column 975 on 24th April—I must be accurate and look at what I said—as: …doctrinaire,… muddle-headed, … rushed and, … when dealing with Part III of the Bill, we find it inequitable". I do wish that my judgment could have been varied in the course of the debates. I find myself with the same impression at the end except that, in so far as the Opposition amendments have been accepted and those of noble Lords opposite with the support of the Opposition, it is a slightly less bad Bill than it was at the beginning.

We have had a rather impregnable team opposite us and I know that the noble Lord, Lord Bellwin, would want to mention the noble Lord, Lord Mowbray, who assisted him on several occasions in the discussions. Indeed, my closing words in regard to both of them might be to paraphrase, if I may, the immortal words that King David uttered as he lamented for Saul and Jonathan: They are lovely and pleasant in their lives and, my Lords, in their departmental briefs they were not divided".

Lord TEVIOT

My Lords, I should like to add just a word to wish the Bill well on its way and to join in the tributes paid to my noble friend Lord Bellwin. I should like also to wish him success with his future Bills. On this, his first Bill, he could not have been kinder, though I still do not think the Bill is a very good Bill.

There is one other thing I should like to refer to, as the statement of the noble Lord, Lord Shepherd, has been mentioned—and I may say I have not read the report but I have read an account of it in the Daily Telegraph. It would be a great shame if anything did happen to the National Bus Company. It is not a massive, nationalised giant with large tentacles. It was composed of the two main companies: the British Transport Corporation (formerly Thomas Tilling) and British Electric Traction, which got out of bus operations in 1968. They picked up a great many of the stage carriage services from private operators. They took it all on their backs and they continued to give the public a service. It has been suggested that there will be some splendid small operators who will come back and take over those services. I hate to be pessimistic about this, but I regret to say that I think that is very much wishful thinking.

Having paid tribute to my noble friend, I must also pay tribute to noble Lords on the Benches opposite. It has been a very pleasant Bill, and although I have stayed on this side I have sometimes also been on their side. For the past 12 years my noble friend Lord Lucas has talked about freight and I have talked about passengers. We must both get dusted down, get wrapped in tissue paper and be put back in our box, and be ready to come back again, whichever Government is then in power, when there is future legislation.

Lord BELLWIN

My Lords, may I say that if I have learned anything—and I hope I have—it is that I have cause to be most concerned when my noble friends behind me rise, not always in support; which is not to say that I do not have great respect for their views, especially when they have the kind of expertise and know-how that both my noble friend Lord Lucas and my noble friend Lord Teviot undoubtedly have. If I have not always had their acquiescence in everything that I have been proposing, I have certainly always been grateful for the way in which they have put their view.

Also, may I thank noble Lords on all sides for their great kindness to me. It is quite a salutary experience to take through a Bill. I only hope that the experience gained may well stand me in good stead in the debates which are ahead, starting next week, with the small Housing Bill that is to come before us.

Lord LUCAS of CHILWORTH

My Lords, may I make two points? First, I should like to join with other noble Lords on both sides of the House in the exchange of pleasantries. That is always nice at the end of a rather hard-fought Bill. Secondly, what I really want to do is to echo the words of my noble friend when he moved, That the Bill do now pass. He said that this would give opportunities. While there may be some doubts, both on this side of the House and on the other side, as to certain aspects of this Bill, it is a complaint of many of us in both Houses that Governments do not provide the kind of climate for enterprise. This Bill provides the climate for enterprise in the field of passenger transport. If, however, enterprising people do not take advantage, then they cannot grumble. If that is all this Bill does, that is absolutely splendid. It gives an opportunity. We will measure it, possibly, the next time we return to power in the later 1980s. Then if we have to change it, we have to change it. That will be the testing time of this Bill.

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