HL Deb 08 March 1982 vol 428 cc9-24

3.1 p.m.

Lord Bellwin

My Lords, I beg to move that this Bill be now read a second time. This is a very short Bill, but nevertheless an important one. It gives the Greater London Council power to pay for travel concessions for elderly and disabled people. The GLC is the only authority which does not have specific power for that purpose. County and district councils outside London were given this power under Section 138 of the Transport Act 1968. It was extended to London boroughs by Section 40 of the Transport (London) Act 1969, but not to the GLC.

Very soon after the passage of the 1969 Act, the London boroughs arranged for concessionary fares on London transport for their elderly and disabled residents. These arrangements were taken over and extended by the GLC, and London now enjoys one of the most generous concessionary travel schemes in the country for these categories of people. However, following the judgment in December in the case brought by the London Borough of Bromley, the GLC said that they would not be able to go on paying London Transport for these concessions. I should make it clear that the case had nothing to do with travel concessions for pensioners, and there was no reference in the judgment to the lawfulness of the present scheme. It was the GLC who said that they could not go on financing it. They have, in fact, been using their Local Government Act powers to spend the product of a 2p rate to maintain these concessions until now, but they have said that they are not prepared to continue doing so beyond the end of the current financial year. There are apparently other things on which they would rather spend their money.

The statements made by the GLC that the judgment threatened free travel were, therefore, thoroughly misleading. They caused a great deal of unnecessary alarm and anxiety for many people who enjoy the benefits. In order to allay these fears, my right honourable friend announced that he would introduce legislation to give the GLC the same powers as other authorities to finance travel concessions. These powers are quite separate from the GLC's powers to pay grants to London Transport under Section 3 of the 1969 Act, which were at issue in the Bromley case, and the GLC are not subject to the same financial duties under this Bill as they are in making grants under Section 3. This Bill will, therefore, put the GLC's powers in relation to travel concessions beyond question. It is for the GLC to decide how they use them. They have, in fact, made provision for some £50 million in their budget for next year to enable the present arrangements to continue.

The Government have made it clear to the GLC that, apart from bringing the GLC into line with other authorities on concessionary travel, no immediate legislation is needed to enable them to pay a reasonable amount of subsidy to London Transport. My right honourable and learned friend the Attorney-General has given his formal opinion that it would be lawful for the GLC to approve the revised budget put forward by London Transport for 1982.

That budget involves a very substantial level of support for London Transport from public funds, over and above the £50 million for travel concessions. London Transport will get in all a total in the region of £250 million for grants. London Transport expect to raise some £500 million in fares, so grants from all sources will amount to about 30 per cent. of London Transport's total income. There is also a hidden subsidy, because London Transport receives its capital funds free and, therefore, does not have to meet interest charges on borrowing for capital investment.

In addition, the GLC will have to raise an extra £125 million from the rates next year to make good the deficit incurred by London Transport in 1981–82. My right honourable friend offered to introduce legislation to enable London Transport to meet this accumulated deficit by borrowing in order to widen the options for making it good, but the GLC decided to pay off the whole amount next year by increasing their rate precept—in other words, by making London ratepayers make it up all in the one year.

It is regrettable that London ratepayers will still be faced with a very steep increase in the GLC precept next year, from 18.2p in 1981–82 to 34.85p, which is a rise of over 90 per cent. But for the Bromley case, however, the burdens imposed on London ratepayers would have been far heavier still. The extra cost of the GLC's policies would have been about £250 million next year, rising to over £400 million in 1985–86. In total, the extra cost would have been some £1,200 million over the life of the present council, which is, co-incidentally, about the same as the total amount of bus and rail subsidies for the whole of the country this year.

My right honourable friend has made it clear that he is not prepared to introduce legislation to enable the GLC to carry on their unbalanced policies. It is apparent from the evidence brought forward in the Bromley case that these policies were introduced without proper regard for the interests of ratepayers. That is particularly evident in the case of the elderly, with whom this Bill is particularly concerned. They received virtually no benefit from the new policies, yet over a quarter of the heads of households in London are elderly people, so they have had to meet a substantial share of the cost of the fare reductions, which were of greatest benefit to people who work in London, many of whom live outside the London area and do not contribute at all.

Moreover, the GLC did not stop to consider whether cutting fares across the board was the most effective way of spending money to improve transport in London. It was purely and simply political dogma rather than a transport policy. They have claimed that it improved productivity by increasing the number of passengers and, therefore, reduced the cost of carrying each passenger. It is an illusion to think that one can get something for nothing. In fact, the cost of running the system did not go down; it went up. It was really an expensive way of buying extra custom. On the GLC's own figures, it cost the ratepayers £1.40 for every extra journey on London Transport.

That is an incredibly high price to pay; so what benefits did the GLC expect to gain? They did not expect the policy to lead to a reduction of more than 1 per cent. in car traffic in London. Most of these extra passengers were probably public transport users making extra journeys. There were also probably a significant number who switched from British Rail.

The GLC have made a great deal of their concern to increase employment in London. But cutting fares is a singularly ineffective way of spending money from that point of view. Many of those who benefit are visitors to London or, as I have said, commuters from outside the London area. For those boroughs and others who are concerned about their ratepayers, this policy pressures their ability to provide other services. Furthermore, a large part of the cost is met by industry and commerce in London, and in the long run this is bound to lead to loss of jobs; so the overall effect is likely to be a net reduction of employment in London.

It is easy to criticise the irresponsible actions of the GLC, which have caused such turmoil in the operation of the capital's public transport system. But there are serious underlying problems which need to be tackled. The Government consider that it would be premature to try to deal with these by hasty legislation. The Government accept the need for a reasonable level of subsidy to maintain the public transport services, which are essential to the life of the capital. The Government are also in favour in principle of low fares. But the problems which have to be faced are, first, how to cut costs and improve productivity so as to minimise the need for subsidy; secondly, how much subsidy should be paid and who should pay for it; and, thirdly, how to ensure that these decisions are taken in a responsible way.

The cost of operating London Transport has been increasing faster than that of other comparable undertakings. Since 1970 the costs of the National Bus Company have risen by about a quarter, after allowing for inflation. The costs of municipal bus companies have risen by about a third in that period, whereas London Transport's costs have risen by a half. Instead of backing the efforts of London Transport to reduce costs, the GLC intervened to increase them. We now need to consider how to ensure that London Transport services are run better and more efficiently than in the past.

Lord Jenkins of Putney

My Lords, would the noble Lord give way on one point? The noble Lord, making reference just now to a decision of the GLC, said that it had caused turmoil. Is it not the case that it was a decision of the Law Lords rather than the GLC which caused the turmoil?

Lord Bellwin

No, my Lords; I do not accept that at all. The fact is that there was no turmoil, there was no problem of this kind in any way before the GLC made the decision which necessitated a reference to the Law Lords.

The cost of operating London Transport, as I said, has increased faster than in comparable undertakings. To the extent that lower fares cannot be achieved through greater productivity, the costs must be met by either ratepayers or taxpayers. Both may, with good reason, consider that they are already paying enough. The contribution by central Government, through the transport supplementary grant, fully recognises the special position of London as the capital city. In the coming year London will receive practically 40 per cent. of the total grant for the whole country, though it has only 15 per cent. of the population. There is no case for taxpayers outside London to subsidise London Transport still more in order to hold down fares in the capital. If the GLC want to widen powers to subsidise London Transport then it is up to them to say how a proper balance between the interests of ratepayers and travellers is to be preserved, and who will be the gainers and who will be the losers.

We also need to clarify the responsibilities for transport in London. At the moment there is an incredible confusion and there are signs of a breakdown in the relations between the GLC and London Transport, and we have the quite extraordinary spectacle of the chairman of London Transport calling for London Transport to be freed from the political control of the GLC. My right honourable friend has now seen Mr. Livingstone and will be seeing Sir Peter Masefield tomorrow to discuss the issues.

So far, the GLC have not attempted to address themselves seriously to dealing with the real problems of providing a stable basis for public transport in London. Instead they have launched an irrelevant and misleading publicity campaign at the ratepayers' expense. After they have themselves approved London Transport's budget for this year, and agreed to the fare increases due to take place later this month, incredibly they are actively encouraging the employees of London Transport to strike and to refuse to collect the new fares—which they themselves have agreed. And they are calling on Londoners to act illegally by refusing to pay the fares, I say again, which they themselves have approved. That seems to me to be the height of irresponsibility.

The Government greatly regret the need for the fare increases, but absolutely no purpose will be served by the strike which is planned for Wednesday. Nobody can gain from it. It has been brought about by playing on the fears of workers about job losses, I say again, in a totally irresponsible way. The GLC have talked about job prospects, service levels and fares, in a way that confuses the actions that are needed now to get London Transport's finances back on to a stable basis, with wild speculation about what may happen in the longer term.

The Government share the views of all those who want efficient services to meet London's needs, at reasonable levels of subsidy. The present Bill represents an essential step towards that end. I hope that it will now be possible to move from political campaigning to serious discussions. I should explain to your Lordships that the reason why the Second Reading of this Bill has been brought forward without allowing the normal interval after First Reading is that the GLC need the powers by the end of the month so that they can use them for the next financial year. I commend this Bill to your Lordships.

Moved, That the Bill be now read a second time.—(Lord Bellwin.)

3.14 p.m.

Lord Underhill

My Lords, of course we on this side of the House support this Bill in so far as it puts the Greater London Council in precisely the same position as local authorities outside London. I need hardly say that concessionary fares for the elderly and disabled are vital for the people of London. For every three passenger journeys by normal fare-paying passengers there is one concessionary passenger journey.

Following the legal judgment, concern was expressed about the situation of London's transport concessionary fares scheme. Ministers said that such fears were groundless and nonsensical. The Secretary of State said that it was alarmist talk. The Secretary of State also said that nothing would be gained and a great deal of unnecessary anxiety would be caused by demands for instant Government measures. But I was pleased that the noble Lord, Lord Bellwin, agreed that the GLC had advised the Secretary of State that in view of the legal ruling by the Law Lords it could not use its powers to subsidise London Transport to pay for concessionary travel because it was decided not to use the power of the 2p rate for that purpose. Therefore, something had to be done. It was not alarmist talk.

Now we have this Bill, which we welcome. We cannot consider this Bill without reference to the judgment, to the present position of London Transport, and the future. In fact, the Minister made clear in his speech that we cannot separate these aspects. The general position of grants towards public transport outside Greater London is dealt with in the Transport Act 1968. That for Greater London is dealt with in the Transport (London) Act 1969, and that was well dissected and discussed at the legal hearings.

There will be few Members in the other place, and few noble Lords in this House, who were here at the time of the passage of the 1969 London Act who did not believe at that time that they were providing for Greater London precisely the same powers as those in the 1968 Act for areas outside Greater London. If the noble Lord, Lord Marsh, who has joined your Lordships' House, were here, he would (I have a copy of his speech) be able to confirm that that is what he said in introducing the Second Reading in the other place.

Of course, judges must determine on the actual provisions of Acts of Parliament, and not on what is said by Ministers, not what is in Hansard of the other place, nor in the Official Report of this House. This is a point that I repeatedly stressed in relation to amendments that I moved to the 1980 and 1981 Transport Acts, but no notice was taken. I was told that one could trust Ministers, irrespective of what is written down in the Act, and I shall be reminding noble Lords of this when we reach the 1982 Transport Bill later on.

To paraphrase the judgment, the 1969 Act gave the Greater London Council power to make grants to the London Transport Executive, but this had to be subject to the undertaking being run with due regard to ordinary business principles, and the GLC had to give proper regard to the fiduciary duty to the ratepayers. What the Law Lords did not decide—it was not their position—is the level of grant support raised from the rates which will be within the fiduciary duty of any council. At what level do grants from rates impinge the fiduciary responsibility to ratepayers, and upset the balance between ratepayers and a particular group? Is not the determination as to the level of grant that is reasonable a political decision, not a legal decision, and is this not a matter which must be left to the elected representatives to determine?

I wonder what would have been the position of any legal challenge to the reconstruction of Waterloo Bridge? When Labour took control of the old London County Council for the first time in 1934, Herbert Morrison was tired of the delay and procrastination and he decided that the London County Council would tear down Waterloo Bridge and put a new bridge in its place—which is a credit to that administration—using the LCC's funds. I wonder what the position of that would be in the light of this present legal ruling?

Further, could not the issue of fiduciary duty affect the decisions taken by local authorities in other matters? To assist me in asking that question, I have with me the Statement of Mr. Kenneth Clarke, until a few days ago the Under-Secretary of State for Transport, who on 1st March in the other place said: In the GLC case, the Law Lords touched on fiduciary duty. Among other things, their Lordships drew a distinction between the duty in relation to transport, which is essentially a trading service, and other social services. They applied a stricter test to transport than they might have done to other social services ". In other words, it could affect a number of other local authority issues. I do not know exactly who has paid for the Barbican, but presumably it could cover the Barbican Centre, or the development of a huge council housing estate, or expenditure on a big park, although somebody might say that was unfair to the general ratepayers.

The then Minister went on: The fiduciary duty to the ratepayers is not statutory". (Official Report, Commons, 1/3/82; cols. 45–6.) I am sure that that is a statement with which all noble Lords would agree. I have asked repeatedly what the criteria are for determining the level of grants, what subsidies can be paid. Again, Mr. Kenneth Clarke said on 24th February: We accepted the Revenue support for 1982–83 of a little over £89 million, which is nearly 5 per cent. more in real terms than we gave for 1981–82". (Official Report, Commons, 24/2/82; col. 937). Who determined that that level of grant was lawful? When does an £89 million grant become lawful but a £149 million grant does not? The Law Lords never laid that down. Mr. Kenneth Clarke (I must keep referring to that former Minister because he did most of the talking on the subject) said on 1st March, only a few days ago: That"— referring to the London Transport Executive's budget and the budget of the GLC— is a lawful budget. It is not cast in any doubt by the Law Lords' judgment. Because doubt continues to be expressed, we have gone to the extent of letting the GLC have the Attorney-General's opinion, which puts it beyond doubt that it is a lawful budget". (Official Report, Commons, 1/3/82; col. 44.) Again I ask: what determined that it was a lawful budget? What are the criteria for determining such matters? I ask that because it is very important not just for the future of Greater London's transport but for the future of transport outside as well.

A leader in the Sunday Times on 20th December, soon after the judgment, said: It leaves it utterly uncertain"— referring to the judgment— what, if any, subsidies to fares are legal, not only for the GLC but for every other transport undertaking. For this, the only remedy lies with Parliament". It went on: For, like the present GLC or loathe it, the plain fact is that it was elected, more recently than Mr. Howell's Government, with a clear mandate for its cheap fares policy. Mr. Howell is entitled to refuse to finance that policy by cutting the Government's grant to the council, but he is unwise to seek actually to veto it by allowing the Lords' judgment to stand. The consequences, if he refuses to budge, could be serious". On 18th December the Guardian made it quite clear that a new law was absolutely essential, and other journals made similar statements.

In recent days we have had the judgment of Mr. Justice Woolf in which he dismissed the application of Great Universal Stores that the supplementary rate levied for transport purposes by Merseyside Council was unlawful; and the grounds for the application were precisely the same as those in the GLC case, except that Merseyside was acting under the powers given by the Transport Act 1968, which did not cover Greater London. The learned judge said that there was an absence of the word "economic" from Section 9(3) of the 1968 Act and that the general view of the executive had not been made especially subject to the financial duty. Should not the Government therefore put the position right so that the GLC is put in the same position as Merseyside and all authorities outside Greater London?

It cannot be said, as seemed to be implied in the Minister's opening speech, that London's fares policy was hastily conceived. It may be criticised, but there is no doubt that it was adopted by the Labour Party in London after considerable discussion, and a great deal of that discussion was brought before the public. There was actually a discussion involving the issue of the London fares policy some 12 months ago in the other House; throughout the election it was a controversial item; the electors knew it was a key issue; and it was actually featured in a television programme which I saw. Did anybody throughout the election period allege that the act proposed by the Labour Party in Greater London was unlawful? They may have said it was unwise but nobody suggested that it was unlawful. On the contrary, it was considered to be within the law. Since it came into operation, we have figures from the London Transport Executive to show that the use of buses went by up 11 per cent., and the use of the Underground by 7 per cent. An article in the Sunday Times on 13th January, under the heading, "Why nobody can win the fares war", stated: Transport in London has reached a level of chaos and public dissatisfaction that requires a complete change of direction if the problems we now face are to be solved". It went on to point out that that was not a statement made after the Law Lords' judgment. It said: In fact, the sentence quoted above opened the transport section of a 150-page statement on Labour Party thinking written more than a year ago. It became the manifesto for the May elections. It was precisely to order the chaos and stem public dissatisfaction that cheap fares were introduced". That is not me speaking; it is from an article in the Sunday Times.

Noble Lords will have noticed that the Minister, in what I would say with respect was an untypically aggressive speech, made this a political issue. My notes have scored out three paragraphs because I did not want to make this an aggressive speech; I was going to say that transport in London was a non-political issue, but after the noble Lord's speech I fear I cannot, and, in spite of what he said, on Saturday morning I shall be taking part in a demonstration to press the Government to act on restoring a sensible position in regard to London's transport.

The former Minister, Mr. Kenneth Clarke, allowed himself when closing the Second Reading debate in the other place to make a political attack on the GLC in general, not just on transport, and the issue is really what is needed for London's public transport. Why, in the United Kingdom, is transport in the capital and other major cities made the subject of political football? Other Continental countries deal with the matter more sensibly and there is little or no argument about the need to pay large-scale subsidies for public transport. Indeed, the subsidy in London is much lower than it is in other capitals—a fact which has been agreed by Ministers in the figures that they have given—and in London more of the costs are met out of fares revenue than is the case for transport services in other parts of the Continent.

The need now is to clarify the position in Greater London. I have asked questions about the criteria, but up till now I have received no answer. I therefore ask this question: should the Government decide on the level of transport supplementary grant, how far could the GLC go—or, for that matter, any other authority—to take from the rates income monies to finance a low fares policy on which the council members have been elected and on which the council has made a democratic decision? Would such a course be unlawful? If so, can the Minister give me the legal references which would make it unlawful? If not, what is the legal restraint against the council?

Is there any assurance that payment of a grant for concessionary fares could not be held to be unlawful? Could not the fiduciary duty of a local authority be quoted even against a grant for concessionary fares? We must ensure that everything possible is written into the Bill to make certain that the legality of concessionary fares in Greater London is not to be challenged in law. It must be made absolutely watertight.

In conclusion, I would point out that the former Under-Secretary of State for Transport said on 1st March: We are prepared to look at the general law if and when we reach the stage where we feel that we are receiving serious representations on it from the GLC and the London Labour Party". I am delighted to know that the Secretary of State has today met Labour leaders in Greater London.

In view of the references made to Sir Peter Masefield, the chairman and chief executive of the London Transport Executive, I should like to close my speech by reading from a statement which he addressed to the Greater London Council with his full report on a proposed budget for London Transport. Sir Peter stated: The Executive believes these measures "— that is, the proposals for dealing with the situation— to be both in conformity with the present law and feasible, and stands ready to implement them. The result would, however, be to drive large numbers of passengers away from public transport. By the end of 1984, scheduled bus mileage would be reduced by one-quarter (mileage actually operated by one-fifth) and passenger miles by bus and Underground by one-quarter. Some people would not be able to travel at all, others would use cars and taxis and increase the general level of road congestion. Employers would be faced with higher London Weighting costs and increased wage demands". Sir Peter continued: We have to say that this decline in the role of public transport in London would be against all international trends and could only be to the long-term detriment of the economic and social life and well-being of the capital city, and therefore of the country as a whole. London Transport therefore seeks the Council's support in endeavours to obtain changes in the law which would permit the level of financial support needed to maintain an adequate standard of public transport in London". That is the statement that Sir Peter Masefield addressed to the Greater London Council. In welcoming the present Bill, which covers the one issue of concessionary fares, I urge the Government to cease making political capital out of London's transport and to get on with the job of putting the law in order.

3.33 p.m.

Lord Tordoff

My Lords, there is no doubt that your Lordships' House will this afternoon give an unopposed Second Reading to what I regard as a somewhat pathetic and puny Bill. I doubt whether a single voice will be raised against what is contained in the Bill, but there is no doubt that my colleagues and I believe that it is a totally inadequate measure. In a sense it is also an unnecessary measure, and a measure which stems from what I might describe as a clash of dogmatism. Dogmatism has been referred to from the Government Front Bench, and I would suggest that it is not all on one side of this argument.

In passing, I should like to refer to the fact that the Law Lords have been attacked from all sides, not within your Lordships' House, but outside, and that is something which I think we all deplore. It is their job to interpret the law as they see it. It is our job in Parliament to make sure that laws are properly enacted, and if we fail so to do, the blame should not attach to the Law Lords, who are doing their job, and who must be respected, because any other way would lead to anarchy and chaos in our country.

As I say, my Lords, the responsibility rests with Parliament to get the laws right, and in particular it rests with the Government to bring forward legislation to correct anomalies and to fill gaps in the law as it stands. That is what the Government should have been doing in relation to London Transport, in terms not just of concessionary fares, but of a much wider spectrum of problems that exist; and that the Bill singularly fails to do.

I do not think that today anyone will suggest that London Transport should be left to the free processes of market forces. I do not see on the Government Benches anyone who is likely to stand up and put forward that eccentric point of view, even on a subject such as this. However, perhaps some Conservative-controlled boroughs in the Greater London area might take that view. But at least the Government are now on the side of the angels and by putting forward the Bill at all they admit that they are prepared to intervene. But it simply does not go far enough. We are within a matter of days of public transport in this capital city being set on a course which could lead to its total destruction. It could lead to a decline in an already bad environment, to clogged roads, to further depopulation of our capital city and, indeed, to a loss of revenue through a deterioration in tourist traffic.

This is a serious problem, and it is a problem not only for the citizens of Greater London; it is a problem for the country as a whole, and it is a problem in particular for the whole of the South-East region. I say that because the transport problems of London are not confined to the City of London, Westminster, or even the GLC area. They go much further than that. At least the whole of the South-East region is involved. I do not want to give your Lordships a long lecture on regional government—that might come some other time—but there is a sense in which the GLC is not big enough an authority to deal with strategic transport planning for the region as a whole.

We know the reasons for the opposition to cheap fares. They are twofold. First, some ratepayers are unable to use services because the London Transport services do not reach into their part of Greater London. I am talking here, as the Minister did, of those people who travel on the commuter services of British Rail, and surely that factor has to be included in the total package if we are ever to get a solution to the problem. The other reason is that there are many users who do not in fact pay rates, such as tourists, and people who live in other parts of the country and who come here and use London Transport because it is part of the capital city. It is the sense of unfairness on both sides that makes the equation so difficult to balance.

I believe that the first mistake on the part of the GLC was to go for so dramatic a reduction in fares in such a short period of time. The second mistake was to try to recoup the cost from the rates. The truth is that on all sides we need a much less dogmatic approach to the problem. We need a smaller degree of hyperactivity on the part of the GLC and, if such is possible, a lower degree of inactivity on the part of the Government. Neither the one nor the other offers a solution to this extremely complex problem. Indeed, when we look at the long-term situation we see that we might well be faced with a totally different demand over a period of 10 or 15 years; during that time the whole pattern of office usage in London, with the advent of the micro-processor, might undergo a complete change, which might mean that people will not come into large offices in the centres of this and other cities. But we simply cannot wait for that development to solve a problem which is immediate and which, as I say, is within a matter of days of hitting us.

The Government really must recognise that the problem will not go away. Making rude noises about the GLC will not make it go away. I believe that they must act—and act soon. It may be that some stop-gap measures have to be introduced, but I hope that in his winding-up speech the noble Lord will say more than he said in his introductory remarks, which I found extremely depressing. If not, I warn the Government that within a few years people will say of London Tranpsort what I fear I have to say about this Bill today: It is all right so far as it takes us, but it takes us hardly anywhere at all.

3.40 p.m.

Lord Mishcon

My Lords, this House is a very tolerant place. There is a Bill before us at the moment which deals with a couple of Acts of Parliament and certain narrow sections; namely, Section 138 of the Transport Act 1968, which allowed the shire counties to make provision for the elderly and the disabled, and Section 40 of the Transport (London) Act 1969, which extended that power to the councils of London boroughs and the City Corporation. The Greater London Council, as we have been reminded, used its 2p rate provision to deal with these matters before; has decided that it has many duties to perform which may well have to be performed out of that 2p rate; and that in any event certain legal advice it has received makes it doubtful as to whether the 2p rate user would be proper having regard to the House of Lords decision. So this Bill, we are told, comes before us, as it came before another place, in order to enable the GLC, without any doubt, to do what the shire counties have been able to do and the boroughs of London and the City Corporation.

There, one would have thought, the Minister might have left it. But quite properly, in my view, in one sense, and quite improperly in another, he himself has extended the whole area of this debate by pouring an onslaught of abuse on the Greater London Council, its policies, its irresponsibilities, its leaders, what it has done with finances and so on. From that point of view it was not a very proper exercise, in my view, and hardly lends dignity to the Government's case on this Bill. Where it was quite proper, in my view, is that it is quite absurd to treat this one little Bill as being a contribution towards a solution of the very drastic problems of London Transport.

I have only three points to make, and I hope to make them fairly briefly. The first point I want to make is that if it be a fact that there is an imprimatur of trusteeship for ratepayers upon any expenditure of rates under statutory powers, is the Minister sure on the best legal advice he has obtained—is he sure beyond a peradventure—that in regard to the usage by the Greater London Council of the powers under this Bill for the elderly and disabled, that user, too, is not imprinted with the need to observe a fiduciary relationship to the ratepayers of London? if it is so subject, could he please inform the House, as my noble friend Lord Underhill was asking, what really are to be the criteria in the way of the Greater London Council—we are talking only about the Greater London Council, but it would apply to other local authorities—for the user of these essential powers in supplying an economic and decent system of transport for the aged and the disabled?

So that is the very first point I make. It is an important point because if the Greater London Council and the public are being misled into thinking that this is an unconditional, unfettered power, then of course it would be a very wrong thing. If there is no doubt about the situation and it is an untrammelled power to use this benefit for the elderly and disabled, then I am sure we would all appreciate it if the Government were to say so.

My second point is the one with which I tried to open and which other speakers have mentioned, and that is the whole question of this not being an isolated matter that one can deal with in regard to London Transport. The noble Lord, Lord Tordoff, I think was responsible this afternoon for an extremely sound and (if I may be allowed to say this without being patronising in any way) extremely eloquent and well-delivered speech, and in the course of it he dealt with the whole importance of London transport, the transport of the capital city. I should like to embroider the point that he made so well, and I hope in doing so not to ruin the texture of it.

But it is a fact, of course, that the whole question of London transport and the transport of the capital city, and the fares of that London transport, have an effect upon housing, the effect upon the housing of its citizens quite obviously being that if fares are so expensive that they cannot afford to travel to the areas that need employment then it is of great importance as to where the housing takes place. It also has the effect that I have just hinted at on employment, and it has an effect upon our tourist trade. In London we are fast becoming not a very attractive place from the point of view of economical living, economical hotels and economical entertainment. At least it would be an attraction if our public transport system in London were known throughout Europe and, indeed, the world as being a transport system which was efficient and cheap.

It goes beyond that. It has an effect upon the whole governmental policy in regard to inflation, because, quite obviously, an increase in fares is one of the essential ingredients in a wage claim; and this, too, is going to force up wages. So it is a very important matter that one is dealing with when one is thinking in terms of London Transport and fares.

My third and last point is this—and for me it is a very sentimental point. There is no justification at all for the noble Lord the Minister to address this House as though every single problem of London Transport can be met by the one question, "Mr Livingstone, I presume?". I say this is a sentimental point for me because this is not a problem that arose since the present GLC came into power. Back in 1955–27 years ago—a departmental committee was set up to deal with the problems of London Transport. It was an eight-man committee which was chaired by a very eminent gentleman, unfortunately no longer with us, Sir Paul Chambers, who at that time was the deputy chairman of Imperial Chemical Industries and who subsequently became their chairman. Among the other seven members of the committee, the humble Lord who addresses your Lordships now was included.

I took the trouble to look at the recommendations of that Committee on London Transport that sat and reported more than 20 years ago. I wonder whether your Lordships will bear with me as I quote from just a few of the recommendations then made, and may we all reflect upon the words of the old and somewhat sad song, "Will they never learn?". I quote from paragraph 391 and onwards: Some of the most important and most effective of the suggested measures, including those relating to traffic congestion, involve decisions and heavy capital expenditure by authorities other than the London Transport Executive. Others, including those relating to maintenance costs, involve internal action by the London Transport Executive itself. These measures are all the more urgent because of the unsatisfactory financial position of the undertaking. London has one of the best passenger transport systems in the world. It is served by a body of workers of all grades who have a fine tradition of loyalty and public service. If, however, steps are not taken to improve the external conditions in which London Transport operates and if certain internal reforms are not made there is a serious danger that the standards of efficiency will decline and costs will rise with an inevitable reaction upon fares". Paragraph 394 says: The standard of service provided by London Transport is high except for (a) acute overcrowding at a number of points during peak hours, (b) poor interchange facilities, and (c) some irregular and slow running of road services which pass through congested streets". The report might have been written yesterday and the noble Lord might have acccompanied the very eminent Minister of Transport in discussing these very topics this morning with the leaders of the Greater London Council. I could go on reading from the passages of the report but I shall bore your Lordships if I do so. They deal with the contribution the Government could make by way of example to the nation in trying to get rid of traffic congestion and the costs and the competition between public and private transport which result if only they managed in their own Government departments to stagger the hours of employment so that the peak hours did not lead to an over-abundance of transport staff which have to deal with the peak hours and are not necessary for other hours, quite apart from the transport itself which has to be supplied.

As I have said, we are not dealing with a new problem; we are dealing with an old problem. There is no point in the Government throwing offensive remarks at the Greater London Council as though these problems were created only yesterday. What is required and what the citizens of London require and expect at this moment is that, instead of a Minister delivering a speech full of invective, the Government sit down in sanity and without trying to make political propaganda with the heads of the Greater London Council, with the heads of the London Transport Executive and forgetting for a moment (if they like) manifestoes and documents which might be sent out by one party or the other, and try to deal practically, sensibly and humanely with a problem of the capital city and its machinery of transport which is of such vital importance not only to London but to the nation as a whole.

3.53 p.m.

Lord Bellwin

My Lords, I fail to appreciate how, when faced with the kind of "politicisation" (if there be such a word) that we are faced wtih in this matter, the Government, and least of all, I, can be accused of becoming involved in political attempts to raise the temperature—and I think that was the implification of what noble Lords opposite have said. Let me try to get this back on course. One of the clear difficulties in dealing with subsidies for transport is that they can get out of hand. London Transport expect to have direct running costs of over £700 million next year. It is very easy for subsidies to escalate rapidly when costs go up, even without cutting fares. When control of a local authority changes hands, it may be tempting for a new council to make a dramatic shift in policy and to increase expenditure very sharply, much more quickly than would be possible with a service like education. That was the experience that faced the last Labour Government. I will not hold up your Lordships by going into that.

The whole nub of the problem, the financial aspect, seems to me to be to maintain a balance, to provide enough subsidy to support an adequate level of service and to meet the needs of travellers without imposing too heavy a burden on ratepayers and taxpayers. My right honourable friend gave his view of what is a reasonable level of support in his transport supplementary grant settlement. It is for the GLC to take their own view on whether a different level would comply with the law. But there can be no question of giving the GLC unfettered power to pay as much subsidy as they like without taking account of the interests of their ratepayers. They have a discretion but they must use it responsibly. They seem to be making heavy weather of this.

The only way of achieving complete certainty would be to introduce legislation enabling my right honourable friend to specify by how much they are allowed to spend. I am not sure that that is what they would want. In fact, I am sure it is something they would not want. One could talk at great length on what has been said and, clearly, there is a strong difference of opinion in this matter between noble Lords opposite, certainly, and the Government. I think that however much one tries to turn away from the fact that there are strong political currents running throughout this situation, it is not possible to do so. I quote a London Labour councillor in a local newspaper as saying: There is also a slight suspicion that the GLC at a political level is happy to have the worst possible result to give them a greater platform to campaign from". Mr. Wetzel, the chairman of the GLC's transport committee, is reported to have said in Time Out: The judgment has given the Labour Party the best spur we would have hoped for before the local elections next May… We are going to spent £250,000 on a campaign. It's a real fillip for us—the best thing that could possibly have happened". That is what he said and I think it puts it in perspective.

Lord Mishcon

My Lords, I hope that the Minister could rise above such a perspective. Instead of quoting remarks which may be in the right context or in the wrong context, I hope that the Minister—and I am asking him a question—will consider the advisability of introducing into his speech words of conciliation and arrangements for joint planning; because, as I repeat, the citizens of London are fed up with the politics of this and they want a decent transport system.

Lord Bellwin

My Lords, I rather think that that is coming it a bit. If I had been in my former incarnation I would have answered the noble Lord more vigorously than I am expected to in this House. If we want to get it on the level he speaks about, let me make three other quotations from the Law Lords—and this is really the nub of what the noble Lords opposite have said about this matter of the criteria, the fiduciary duty. Lord Justice Oliver said that the fiduciary duty was owed: not simply to electors but to the whole body of ratepayers including a large and important number who have no voice at all in choosing local councillors". The noble and learned Lord, Lord Wilberforce, said: Once it became apparent"— the fares reduction— that the ratepayer's burden would be approximately doubled, the council acted in breach of its fiduciary duty". The noble and learned Lord, Lord Scarman, although still alluding to the decision to make the 25 per cent. fare reduction, added that this was: not a reluctant yielding to economic necessity but a policy preference. In so doing, the GLC abandoned business principles. That was a breach of duty owed to the ratepayers and wrong in law ". My Lords, I think I should refer to what the noble Lord, Lord Tordoff, said. With respect, I did not think his contribution was as helpful as did the noble Lord, Lord Mishcon. Lord Mishcon said: The Government must act". He said: The problem will not go away". But what he did not say was what ought to be done about it. He referred to market forces as being, an eccentric point of view". He might like to know that in Tokyo most of the public transport is in fact carried out by the private sector. He also said the GLC's mistake in its fares policy was to try to recoup the lower fares by charging it to the rates. He did not say where else it should be charged to.

There it is, my Lords. We seem to have got off on an unusual tack for us in this House, but it has to be recognised that feelings run very deeply and there is much more to it than the simple point of view of this one issue which is the subject of the Bill. I absolutely concur that it has been right to broaden the discussion. Clearly, your Lordships are going to agree that this Bill should go forward. Like the noble Lord, Lord Mishcon, I am hoping that there will be discussion, that there will be joint consideration of the problems and that there will be an attempt somehow for those involved to help to find solutions in a way that is acceptable.

It is a major problem and the fact that the noble Lord, Lord Mishcon, was dealing with the same problem 20 years ago confirms that it is an old one and it will not go away and it tends to deteriorate because of the increasing enormity and scale of it. So I agree with him on that. It is a pity I could not agree with much more of what he said, but that is not the first time. I hope that your Lordships will agree that this Bill should go forward.

Lord Underhill

My Lords, before the noble Lord sits down, may I ask whether he can possibly give some information about the criteria? This must be about the twelfth time that I have asked. When does a figure become lawful and at what level does it become unlawful? There must be an answer to this because otherwise we are in an impossible position.

Lord Bellwin

My Lords, that is exactly what I was trying to do in what I was saying. I was in no way trying to belittle the difficulty of coming to that conclusion. But as the courts would say about everything, what is reasonable? What is the burden that the taxpayer, the ratepayer and the traveller should pay? If you come to a conclusion which is patently reasonable to everyone, then I would have thought that was the criteria. Beyond that, no one can go.

On Question, Bill read a second time, and committed to a Committee of the Whole House.