§ 4.25 p.m.
§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)
My Lords, with the leave of the House, I beg leave to repeat a Statement which is being made in another place by my right honourable friend the Secretary of State for Transport. The Statement reads as follows:
" Before Christmas I told the House that I was not prepared to legislate to let the GLC go back to their unbalanced transport policies which placed such huge burdens on ratepayers.
" I said, however, that I was willing to see the GLC leader anytime if they had problems. Since then Mr. Livingstone and other GLC leaders have come to see me and explain their problems.
438 " In immediate response to these the Government are prepared to act in two respects.
" First, although the GLC have powers under the Local Government Act 1972 to spend up to the product of a 2p rate which could be used to finance concessionary fares for the elderly, it is clear that they are not in a position to continue relying on these powers alone. Nor are the London boroughs able to get a concessionary fares scheme worked up in time.
" I have, therefore, stated the Government's willingness to legislate to give to the GLC the same powers as other local authorities have, to operate a concessionary fares scheme.
" Second, the high cost and low fares policies of recent months have led to a large accumulated deficit. I have said that we would be prepared to legislate to let LT pay this off over a reasonable period.
" Regrettably the GLC has had to raise fares 100 per cent. not just to get back to 1980 levels but to pay for the heavy costs of inefficiencies imposed on LT in recent months.
" But in the Government's view there is no need for further large increases in 1982. Talk of this, or of large scale redundancies, is raising thoroughly unnecessary alarm.
" The GLC leaders have indicated their wish to come for further talks on the future of London's transport system in the longer term. I welcome these as providing an opportunity for constructive discussion on the needs of the public in London and how these can be best met and financed ".
§ My Lords, that is the end of the Statement.
§ Lord Underhill
My Lords, I thank the noble Lord for repeating the Statement made by his friend in the other place. The Statement is grossly inadequate to meet the problems of transport not only in London but elsewhere which have been thrown up by the Law Lords' judgment. Naturally, it is not appropriate for this Statement to discuss that judgment.
The first and last paragraphs of the Statement are, in my view, related. I welcome the readiness of the Secretary of State to meet the GLC leaders to discuss further the needs of the public in London. I should like to ask whether this will include discussion on how far subsidies can be paid to meet the judgment. As the judgment laid down no criteria whatever on that matter, how will this be determined by the Secretary of State? Does this not indicate that there is need for wider legislation to clarify this most important matter, particularly as there seems to be general agreement that the judgment has brought chaos into the financing of public transport? Also, the GLC believed that they were following what was intended when the London Transport Act of 1969 was introduced.
What is the meaning of the reference in the Statement to the heavy costs of inefficiencies? Has not London Transport shown an increased productivity? Has not the " fair fares " policy led to an 11 per cent. additional use of London's buses and a 7 per cent. additional use of London's Underground? Is that not rather an unfair charge to make against both London Transport and the GLC? I welcome the decision to introduce legislation to clarify the position regarding concessionary fares for the elderly. Incidentally, one notes that there is 439 another piece of legislation which is apparently in need of clarification. When is this legislation to be introduced? It is a very urgent matter. Undoubtedly, the GLC and other authorities will need to take this matter into consideration for its budget for the next year.
Will the necessity for the GLC to increase fares in general mean an increase in the cost of this concession scheme? If so, how much will be entailed and will that be set against the rate support grant? It would seem to be unfair if that is to be the case. Finally, has there been any consultation with the Secretary of State for the Environment regarding the restoration of the £110 million penalty by the cut in the rate support grant to the GLC, in view of the proposals now being made by the GLC to comply with the terms of the Law Lords' judgment?
§ Lord Tanlaw
My Lords, we on these Benches thank the noble Minister for repeating the Statement. However, we have considerable doubts as to whether the contents of the Statement will be either welcomed or understood by the ratepayers of the GLC. Could the noble Minister explain to the House whether the Government intend to give a grant to Mr. Livingstone and the GLC which in net terms is either less or more than before the " fares fair " policy came into operation?
Secondly, could the noble Minister come out into the open and tell us whether Her Majesty's Government really approve of public transport and wish to encourage it, certainly in the capital city of this country? I believe that the general public now are confused and worried as well as being inconvenienced by the inefficiencies of London Transport and the lack of capital replacement that has taken place. Will the noble Minister explain the term " cost of inefficiencies "? Is that a reference to equipment of an advanced and modern type, of computer and television systems that have remained unused by London Transport, or does it mean inefficiencies of operation or the inability of London Transport or the Government to deal competently with the unions in operating the transport system?
Finally, would the noble Minister not agree that the London Transport system is now years behind those of other European cities? Is it not about time that it was updated in capital terms and that the ratepayers of Greater London were given some indication and some hopes for the future so that they may be encouraged to travel on London Transport in comfort?
§ Lord Bellwin
My Lords, I thank both noble Lords for their observations on the Statement. The noble Lord, Lord Underhill, asked whether the discussions to which I referred will result in some subsidies which would help to meet deficiencies. He also referred to the need for wider legislation. I think that these and the other questions he asked have to be borne in mind against the background of what caused the situation in the first place; and the fact is that, as a result of the policies that the new GLC administration (if I can call it that) imposed, the increase to London ratepayers, including the loss of grant, was 10 times—I repeat 10 times—what the cost was before. Quite clearly there were tremendous burdens upon those ratepayers, and 440 that is what led to the whole situation. What we are now saying is that we have listened to the representations made by the GLC leaders, and the Statement says that we will continue to have discussions with them to try to help them, if you like, to restore to some reasonable level a situation which clearly has gone dramatically out of balance. It is the need to fix a proper balance between what ratepayers should pay and what transport users should pay that is the nub of this particular problem.
The noble Lord, Lord Underhill, asked when legislation would be introduced regarding concessionary fares and he also asked whether there would be subsidies. I think what he was asking was whether they would enable the authority then to meet those fares. I cannot tell him exactly when the legislation will be introduced, but I very much take his point that clearly there is a need for some urgency in this whole matter.
As to his question about any consultation with the DoE regarding the restoration of penalties, I am not aware of any such discussions. Whether or not that is something that goes on to the table as a result of what may be decided will have to be seen when the discussions take place, I presume.
The noble Lord, Lord Tanlaw, asked whether the Statement would be understood by ratepayers. My Lords, the ratepayers certainly understand the effect of the judgment on what they will be called upon to pay by way of supplementary rates. There is no doubt about that: they know that. He asked whether it would mean more grant. I would think that would depend on the discussions, as I have already tried to indicate in answer to the noble Lord, Lord Underhill.
As regards whether the Government approve of public transport, I would remind your Lordships that we are subsidising it to the extent of £1.2 billion this year. But of course there will always be a dilemma: how much is enough? That is a debate that can go on for ever, I should have thought.
As to the point about the inefficiencies to which the Statement refers, different people will have their own ideas about that subject; but some may think that, when the GLC inherited an 8 per cent. pay settlement, for example, and then instructed London Transport to reopen negotiations to give an additional 3 per cent., that was a contribution. And some may think that that, when they added several hundred extra staff upon taking office, that was also something that contributed to the situation. When they added 6 million extra bus miles to the routes, you could argue that that was an inefficiency or an addition to service, depending on what happened. But there is little evidence to show that they in fact did, despite what the noble Lord, Lord Underhill, mentioned by way of his figures, achieve a great deal of what was the declared objective of this exercise. However, I do not think it advances us very much today to go into that. The fact is that we are today concerned about what is to he done about a very serious situation for London Transport, and I think that the Statement illustrates the Government's willingness to try, jointly with them, to help to get them out of a position into which they have put themselves.
§ Lord Boyd-Carpenter
My Lords, in view of what my noble friend has just said and the sorry story he 441 has told of the handling of this matter, not only in the immediate chaos but for some period back, is not one forced to the inevitable conclusion that London Transport should be removed from the control of the GLC and put again under the Ministry of Transport?
§ Lord Bellwin
My Lords, [...] hear what my noble friend says and I am sure that there are many who would feel as he does, but clearly that is part of the wider issue, and today I am not in a position, as I think he knows, to comment upon it.
§ Lord Davies of Leek
My Lords, is it not a fact that, whatever Government have been in office this last quarter of a century, the problem of the co-ordination of road, rail and bus transport is of paramount importance, and that the judges' decision has created chaos in the minds of many people? Is the noble Lord further aware that it is no good running down British transport alone? Those of us who have knocked around the world at rush-hour periods anywhere can see this problem and I think some Governments should face it with courage, even if they use part of the defence programme to make road and rail strategically valuable.
§ Lord Bellwin
My Lords, with respect, it is not the Government's decision which is creating chaos: it is the GLC's decision that created chaos where previously it did not exist.
Viscount St. Davids
My Lords, may I declare a double interest? I am on the one hand a ratepayer of Camden and, on the other hand, by a very nice piece of timing, I am about to become an old age pensioner next month. Is it really fair and is it possible to continue in these days to hold that the transport system of a capital city is really able to hold its own without subsidy in view of what happens in the capital cities of other countries? Is it also right that in a capital city such as ours, where a great many of the people who take advantage of that transport come from many other parts of the country right outside the London ratepayers' area and are indeed visitors from many foreign countries, all these people should benefit at the expense of the London ratepayers?
§ Lord Bellwin
My Lords, the whole problem is this: what is a reasonable level of subsidy? Of course, it is not unreasonable that there should be a subsidy. Other capital cities help with subsidies, and there is no suggestion that there should not be a subsidy in the case of London Transport. The whole issue is: what should be that level of subsidy, how should it equate and, as I said before, how should it balance between the ratepayers, the taxpayers and the users of the transport?
§ Lord Molloy
My Lords, is the noble Lord aware that an additional, very serious, issue at stake here is that for many people the Fares Fair programme seemed to be eminently satisfactory? It has already made a contribution to enabling more people to use London Transport. The abolition of the concessionary fares for pensioners is giving great concern. But the point that I want to put to the noble Lord is this. In so far 442 as the legal advisers, the lawyers to the largest local government council in the world, gave them legal advice that they could proceed with what they had put into their manifesto, and it was another branch of lawyers who said that what they had done was illegal, what we have to do is this: the threat seems to be a threat against democracy in local government, so when will the Government change the Act concerned, even to make it permissible for the GLC to introduce a Fares Fair programme, so that that can then be judged not by any form of judiciary but by people at a subsequent election?
§ Lord Bellwin
My Lords, I am in no position, any more than, with respect, is, I think, the noble Lord, to pass an opinion upon the opinions of the lawyers who gave advice to the GLC, or, indeed, with great respect, upon those who gave a contrary view, and I certainly do not intend today to embark upon that. When the noble Lord says that the Fares Fair policy was satisfactory, he means from his point of view and from the point of view of those who feel likewise. I can assure him that it was very unsatisfactory from the point of view of many other people, and I think he would agree to that. I am pleased to say—and I am glad that the noble Lord raised the point—that the pensioners do not have any need to he concerned that their interests are, and will be, taken care of.
§ Lord Underhill
My Lords, I have no desire to detain the House unduly, but the noble Lord has not replied to the question I asked about who will determine the criteria, and how they will be determined, for the rate of subsidy. The noble Lord made two statements in reply to questions, and I paraphrase what he said. He said that the main issue is how to determine the balance between transport costs and the burden to be borne by the ratepayers. Then, in reply to another question, he asked: what is a reasonable level of subsidy? That is the very question that I asked, because the Law Lords' judgment did not say what is a reasonable level. When does £80 million become a reasonable level of subsidy and when does £130 million become an unreasonable level of subsidy? Therefore, this question of criteria is very important.
§ Lord Bellwin
My Lords, I think the noble Lord would concede very quickly that he asked me a very great number of questions, which I tried like mad—if I may put it in that way—to write down. If I did not cover them all, I apologise to him. I know that he will understand; he always does. He asked: what is the right rate of subsidy? What is a reasonable level? How do you retain a balance? I cannot tell him today what is the right level. That will depend, I assume, upon how one defines a fair and reasonable balance. What I do know is that the Law Lords felt that the existing level was certainly not the right level. One would have to read the judgment very closely, as I have done, and as I am sure the noble Lord has done—and, I would respectfully suggest, to read it more than once—to decide what view one would take as an individual. However, at the end of the day, of course, it is for the GLC themselves to decide in the light of the ruling, in the light of their interpretation of what was said in the judgment and 443 in the light of the new situation in which they now find themselves.