HL Deb 28 February 1983 vol 439 cc935-92

2.56 p.m.

Lord Bellwin

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Bellwin.)

On Question, Motion agreed to.

House in Committee accordingly.

[THE EARL OF LISTOWEL in the Chair.]

Clause 1 [Interpretation of Part I]:

Lord Tanlaw moved Amendment No. 1:

Page 2, line 6, at end insert— (" "facilities" includes those parts of a highway which are reserved for the use of bicycles;")

The noble Lord said: The noble Lord the Minister will realise that this amendment has certain identities with the amendment of a similar kind that I moved to the previous Transport Bill. During the passage of that last Bill, I was told when I moved the amendment that it was really none of the business of central Government to direct the financial spending of local government towards the building of cycle ways. At that time, I suggested that local government should get some form of stimulus or encouragement, in order to make provision for cycles and for disabled people, with certain routes inside towns or parts of highways being designated. In all respects this present Transport Bill is a local government finance Bill, so that, having previously been unsuccessful in putting this amendment forward and asking central Government, I am now asking the noble Lord the Minister whether provision can be made in this Bill for the benefit of cyclists.

I think that this is a much more correct stance to take, for the reasons that I am about to give. Cycle ways can be made across parks, they can be made by upgrading footpaths, they can be part of a highway or they can be whole streets designated for the use of cyclists and people in powered disabled cars only. The only trouble is that there is no such heading in local government finance as "Cycle ways". Each of the different parts of a highway or a footpath will come under some other budget inside local government. Therefore, I am taking the opportunity of using the word "facilities" here, to include specifically the use of cycle ways. It would allow any ratepayer of any town who feels that there is a real and pressing need for a cycle way to go to his local authority and say, "Here, you have a budget. You have an allocation for it. Why haven't you done something about it, or how have you spent the money?" Perhaps this is not the right part of the Bill, and I am not a parliamentary draftsman. But I should like very much to know the Government's view on this.

We should not forget what I said when moving an amendment to a previous Transport Bill: that every motorist who takes his cycle to work instead of his car is benefiting not only himself but the whole community by relieving motor car congestion, which is a problem in all conurbations in this country and throughout the world. A great deal of enthusiasm is shown by individual Ministers, members of county councils and members of local government, but this enthusiasm needs to be collected and directed towards helping the cyclist to make his or her contribution to the community in which he or she lives and, by so doing, to make the community a better place in which to live. Without any more ado, I beg to move.

Baroness Trumpington

Two other noble Baronesses who are present today come from Cambridge and both know what a bicycle city that place is. So far as my memory serves me, the city council has created bicycle paths, where it has been possible to do so without the need for extra legislation, simply because that need was obvious. I believe that it would be very hazardous to write this amendment into the Bill. Bicycles can be as much a menace to the pedestrian as a help to the cyclist. I am not sure that I am correct in saying that I heard the noble Lord, Lord Tanlaw, say that he put disabled people into the same category as cyclists. I query whether disabled people, particularly in crowded bicycle cities like Cambridge, would stand a fair chance of getting by without injury.

Lord Tanlaw

I was referring to disabled people driving powered cars. In this context they would be quite safe from bicyclists.

Baroness Trumpington

In that case the cyclist would be in danger from disabled people. I believe that it would be better to leave local authorities to use their own judgment instead of forcing legislation upon them.

Lord Underhill

I support the amendment. There are a number of references in the Bill to transport services and facilities. The noble Lord, Lord Tanlaw, wants to ensure that "facilities" includes measures taken in connection with cyclists. A number of cities and towns are endeavouring to make arrangements to separate cyclists from other road users. The noble Baroness said that cyclists can be a danger to pedestrians, but the facilities which could be provided would endeavour to provide the very safety about which she speaks.

Lord Lucas of Chilworth

I am sorry to have to tell the noble Lord, Lord Tanlaw, that I must again repeat what he was told on the last occasion when he raised this point. He was then told that it is not for central Government to interfere with the rights of local authorities, and I have to tell him again that this Bill makes no provision for local authorities so to do. The highway authority is responsible and must remain responsible for the provision of facilities for cyclists. It is for the highway authority to decide how to organise that provision in the best interests of cyclists and other road users. As my noble friend Lady Trumpington has said, Cambridge has done so to a greater or lesser degree.

To the noble Lord, Lord Underhill, may I say that the Bill has to do with transport services and facilities. It is not appropriate for us to burden passenger transport executives with the job which is left to local authorities to take care of, for which they have been granted powers. The amendment would do nothing to aid the provisions which the noble Lord, Lord Tanlaw, is seeking. In fact, it is more likely to disrupt the existing organisation. Within the counties it would conflict with arrangements for support from central Government through research funds and the transport supplementary grant. The net effect would be far less satisfactory consideration for and support of the needs of cyclists. With that explanation, I invite the noble Lord to withdraw the amendment.

Baroness Masham of Ilton

Before the noble Lord decides what to do, may I say that I support the amendment. I have spent much time in Germany and I have also been on holiday in Holland where such paths for bicyclists are provided as the noble Lord suggests. And what a benefit they are to everybody! As there is now a great movement towards freeing the air of lead and saving energy, I should have thought that this was the time to encourage the use of bicycles.

Lord Boyd-Carpenter

I am sure that my noble friend Lord Lucas of Chilworth is right on the technicalities and that the amendment moved by the noble Lord, Lord Tanlaw, will not stand up, but I must confess that I was a trifle disappointed that my noble friend did not say a word by way of encouragement of the provision of cycle tracks under the existing powers which he argued are adequate.

I agree very much with the noble Baroness who has just spoken. Bicycling ought to be encouraged under reasonably safe conditions. It so happens that on my way to work every morning I go across Hyde Park Corner. I am full of both admiration and horror at seeing the number of pedal cyclists, mainly girls, riding through that maelstrom of fast moving and heavy traffic with a courage and a confidence which are admirable but which, for their sakes, I find distinctly alarming. If it could be said by the Minister from that Bench that, using what he himself says are adequate existing powers, more provision by way of cycle tracks could be made, I am sure that it would give encouragement to local authorities and that this would be good. Apart from the danger involved in getting mixed up with heavy traffic, bicycling is an economical and a healthy method of getting to and from work. It is entitled to a word of encouragement from this Committee and, I hope, from the Government.

Lord Lucas of Chilworth

During the passage of the Bill I am very anxious not to spend irrelevant time on matters outside its scope. The Bill is concerned with the preparation of three-year plans leading to the provision of bus and train services. Cyclists are essentially outside the scope of the Bill. If, however, the Committee would like me to enlarge upon the provisions, which my noble friend Lord Boyd-Carpenter has asked me to do, I can do so. The Government have clear policies with regard to cyclists. They were contained in the cycling policy statement which was published after consultation in January of this year. They encourage the provision of improved facilities for cyclists. The overriding aim is to improve the safety of cyclists by providing facilities which will act as alternatives to the use of heavily trafficked and potentially dangerous roads. We provide financial support for the innovative elements of local cycling schemes and we undertake research and provide advice on the provision of these facilities.

The county councils, as highway authorities, were also invited last year to include in their annual transport policies and programmes projects for cyclists. As a result, more county councils brought forward proposals, and these were given favourable consideration in the allocation of the transport supplementary grant for the year 1983–84. That demonstrates exactly what the Government are doing and the area in which it is being done. I just have to repeat that this is the wrong place for such an amendment, but if it helps the noble Lord, I shall be quite happy to describe what is being done.

Lord Tanlaw

I fully accept what the noble Lord, Lord Lucas of Chilworth, has said, but this is the second time that I have produced this amendment and the second time that I have been told that it is attempting to amend the wrong Bill. I am not entirely clear about it. The enthusiasm with which the Government go about this is all on paper. The noble Lord, Lord Boyd-Carpenter, really presented my amendment better than I did. The excuse is given that there is no money for cycleways and that there are other priorities. In putting forward this amendment to the Bill—which is, after all, a Transport Bill—my intention is that the cyclist shall not be forgotten. At some time, I should like guidance on the Bill in which the cyclist can get this protection and in which we can get a special allocation so that the cyclists cannot complain.

As the noble Baroness, Lady Masham, has said, it is the fear of taking out either powered wheelchairs or cars for the disabled and the fear of the cyclist that he will be knocked off that has led to the amendment in the first place. The first reason is that it is necessary to get disabled people from A to B safely; the other is to make cycling a healthy and active sport and not a quick way to death. That is the motivation behind these amendments. But in view of what has been said by the noble Lord, Lord Lucas of Chilworth, and while awaiting one day his guidance on when I may produce this amendment, I meanwhile beg leave to withdraw it.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

3.10 p.m.

Lord Underhill moved Amendment No. 3:

Page 2, line 9, leave out ("including") and insert ("excluding").

The noble Lord said: The definition of revenue grants in Clause 1 makes clear that these include grants made in respect of reduced fares for children. This means that any such fares reduction will affect the total of revenue grants and will therefore be taken into consideration when the Secretary of State determines the protected expenditure level. The purpose of Amendment No. 3 is to provide that such grants shall be excluded from the meaning of revenue grants in the same way that it is accepted that payments for concessionary fares to the elderly and disabled are also excluded. It is for that reason that I did not move Amendment No. 2. For the benefit of the Committee, I should like to speak also to Amendment No. 68, because that amendment will amend Section 138 of the 1968 Act, which would further assist the proposal we have in mind.

There are strong arguments for reduced fares for children. First, there is the question of travelling to school. As your Lordships will know, for distances of three miles or more the local education authority must provide free transport, but under that distance—and it may be just a fraction under three miles—it is sometimes a hardship for families to pay heavy fares so that their children may travel to school. Reduced fares for children will also encourage children to travel for extra educational purposes, such as visits to museums and other special visits. This links up with the previous amendment, because the more we can provide public transport so that young children will not have to cycle to school, the better. I am one who believes in children cycling at an early age under proper conditions, but they should not have to do so simply because they cannot afford public transport. It would also assist children in undertaking sporting and leisure pursuits.

I was amazed by some of the arguments made during the Committee stage in another place. For instance, one Member questioned whether a case had been made out for subsidising children at the expense of adults. I hope that no one in this Committee will repeat that argument, because it overlooks the fact that it is from the pockets of adults that fares have to be paid when their children travel. Therefore, that argument was completely irrelevant. Another Member observed that it seemed to be advanced, and I quote, that the aim of a transport service is to obtain as many passengers as possible—the more the better". I should have thought that that was a very laudable aim. We want more people to travel by public transport if we can encourage them to do so, and reduced fares for children will assist in that.

Some of the metropolitan authorities with which this Bill is concerned already have policies for a flat fare throughout their areas. The experience of those authorities is that a flat fare system has lead to a substantial increase in travel by children. That is one thing that this Committee would wish to encourage. Without special fares for children there will be hardships for poorer families and also those with a number of children. With reduced fares, arrangements can be more easily made than they can be without a reduction in fares for families to travel together.

There was a long debate on this point during Committee stage in another place. It would seem that the Secretary of State who replied on that occasion did not fully appreciate what could be the situation. The Minister said that reduced fares for children have always been part of fares structure. The problem is that under this Bill, payments for children's fares are included in the revenue grants and will be included in the proposed protected expenditure level. The payments for children's fares should not be regarded as coming within the normal transport budget but should be regarded as being based upon social considerations: educational, leisure, sporting, and assisting parents to meet the cost of travel for their children.

Time and time again, the Minister said that this decision on children's fares is one for local decision-making. We accept that; but if these payments are to be included in the protected expenditure level, the Secretary of State could give guidance under later provisions of the Bill, and he could advise that children's fares are too low. Under the provisions of this Bill, the authority will then be expected to take that advice into account. Also, if the protected expenditure level is reduced the authority may be faced with service reductions, fares increases, or pressure to lessen the reduction given on children's fares. By exchanging the word "excluding" for "including", this position could be put right. I hope that noble Lords will support not only Amendment No. 3 but also Amendment No. 68, which will actually amend Section 138 of the Transport Act 1968.

Baroness Bacon

It will be remembered that during the Second Reading of this Bill I raised this question of children's fares. As my noble friend Lord Underhill has said, it is not just a question of the fares of children who are travelling to school, although it is partly that, because while some children travelling to school are entitled to free fares others have to pay. As I said on Second Reading, there are a great many instances where children use transport. Most local authorities apply a reduced rate for travel for purposes other than going to school. When the noble Lord replied in that debate, he said in regard to children's fares: I should have liked tonight to refer to what she said about children's fares, but I cannot because I should never get through all that I have to say, but I shall write to her about it". I wish to thank the noble Lord, Lord Bellwin, for the letter I have received today, which I have not yet properly digested.

So far as I can see, two separate points are dealt with in this letter. One is the legality of local authorities being able to operate reduced fares for children. For example, in West Yorkshire all children under the age of 16 pay half fare, no matter when they are travelling or for what purpose. In his letter, the noble Lord, Lord Bellwin, states that he wishes to clear up this point because some local authorities thought that such an action was illegal; and he wants to make quite clear that this will be legal under the Bill. But this amendment deals with another aspect: whether or not the amount of money paid in subsidy for children's fares should be excluded from the total amount allowed by the Government. I think it is that point which concerns us most, whether or not we can hive off the amount of subsidy for children's fares in the same way as is hived off the subsidy for old people and for handicapped people. I do hope the noble Lord will agree to this. If not, while it is still legal for local authorities to make half-fares or quarter-fares, or whatever they like, for children, it might not be practicable because they would have to do it within the global amount of subsidy which is laid down by the Government. I hope, therefore, the noble Lord will deal with the second point, and I would thank him for clearing up the first point.

Lord McIntosh of Haringey

May I, too, refer back to Second Reading, when the noble Lord, Lord Bellwin, expressed great indignation at the nature of some of the protests made by the metropolitan authorities and by those who lobbied Members of this House about the threat, as they say saw it, to concessionary fares for old people and the disabled. Whether or not he was justified in that indignation, the fact is that children and those in full-time education are not treated in this Bill in the same way as the elderly and the disabled. I want to ask the noble Lord: why should this be so only for the metropolitan counties? May I remind him that the Public Service Vehicles (Travel Concessions) Act 1955, which is still in force, does include children and those in full-time education in the same category for travel concessions as those other categories of the elderly and the disabled. Therefore the shire counties, who are not covered by this Bill, do have the same rights to extend travel concessions to children without financial penalty. Yet the financial penalty, in the terms of the protected expenditure level, covering children's fares is proposed to be enacted in this Bill. I would like the noble Lord to tell us why the metropolitan authorities are being treated differently from the shire counties.

Baroness Masham of Ilton

I would like to ask the noble Lord whether he is aware that, now that so many of the small corner shops have gone and the shopping centres are concentrated in the big cities and in the centre of the towns, many children are left by their parents in their homes; there have been some horrifically sad cases of fires and children being burned and maimed because they have been left behind by their parents. I would have thought it was wise to encourage the mother or the father to take the children shopping with them. I hope the noble Lord will look very carefully at this matter. It is not easy to take young children shopping. I do not know whether the noble Lord has ever done it. Children do not particularly like shopping in supermarkets. There is a need to encourage this.

Lord Sefton of Garston

Some time ago this House debated the question of transportation for school children, and I was very impressed by some of the impassioned speeches made by noble Lords opposite with regard to that. The principle being debated was, in the main, that Governments and local government had laid down certain principles in regard to the education of children, and any attempt to take away free transport to schools would have gone against that principle. I think the decision of the House was absolutely right in regard to that. In regard to this present matter the same principle obtains. There are many large cities which have introduced, with the support of Government, the comprehensive system of education, and for that system to function properly it is absolutly essential that we should draw pupils from all sections of society in that city. We should not have neighbourhood schools if comprehensive education is to function. The children must be free to travel to the comprehensive school and therefore must be encouraged to move over long distances.

Baroness Fisher of Rednal

May I follow up something the noble Baroness, Lady Masham, said, something which was brought out quite clearly to me when I was in Tyne and Wear quite recently. I think the Government accept that the family is a rather important part of the social fabric of the country. I think it is important when parents are travelling that they should be able to take their children with them. As my noble friend Lord Underhill said, many of the local authorities now operate a fiat fare system which is encouraging the family to travel together. The family is a unit. The family goes out and sees the surrounding countryside or the city and all that they have to offer. I am sure this is something that all of us would want to encourage. As the Government are so concerned with the family, anything which keeps the family together ought to be supported, not only by words but by financial means as well. Therefore, I think this is rather an important amendment.

Another thing in which this House is constantly interested is inner cities. There is nothing better for children living in inner cities than to be able to get out to the surrounding areas at very cheap fares, especially during school holiday times. Chlildren in the inner city areas at school holiday times face a much more serious problem in regard to how to spend their leisure time than those in the rural areas. One would have expected what is here suggested would be encouraged. Child delinquency arises from boredom, and deliquency is something which costs money in the long run. Therefore, why do we not spend what one may call preventative money in aiding the traffic authorities to make quite sure that more children and more families use public transport?

Lord Lucas of Chilworth

Of course the Government realise the difficulty that many parents have in affording full fares for older children, and of course the Government are concerned with the family. It is for this reason that the level of children's fares is provided for in the children's subsidies within the general subsidy, which is eligible for support under the transport supplementary grant. In London and most metropolitan counties reduced fares for children are part of the overall fares structure, and that is where it has to be. It is not for the Secretary of State to say whether a subsidy is too low or too high. Most members of your Lordships' Committee who have spoken have rather missed the point. The Secretary of State has no direct responsibility for determining fare levels. This is a matter for the transport executive's commercial judgment, and as such it would be reflected in the plan which they will put forward, which is met by the PEL.

Certainly the payment for children's fares will come within the scope of the provisions of this Bill. Referring only to children—because the elderly and the disabled are catered for under separate powers—the specific reference in Clause 1 to reduced fares for children makes it clear that these are included within the revenue grant. It confirms the power to pay grant for them and some metropolitan counties have in fact been doing this, but have had some doubts as to the legality of the payments they have been making. The Bill, as it is written, resolves any doubt there might be. Children's fares rarely cover their costs, even when the bus is nearly full. They can only be a major factor in the subsidy policies of authorities and cannot be excluded from decisions on the overall level of subsidy.

The noble Lord, Lord McIntosh, spoke about the PSV concessions Act. He asked why should the Bill apply only to the metropolitan areas. It, of course, applies to the metropolitan areas and to the GLC, as he is well aware, and not the counties. The real reason for devising the Bill is purely and simply because of the payments that some metropolitan areas have been making—my noble friend Lord Bellwin made this abundantly clear at Second Reading and my noble friend Lady Gardner of Parkes read out a long list of consequences of making too massive a payment. Therefore, it is quite reasonable that any subsidy be included in the total amount for which the metropolitan authority, through its transport executive, will ask the Secretary of State.

The Bill does not put any penalty on authorities in relation to revenue grants, relating to general subsidies, including, as I have just said, reduced fares for children. I am quite sure that both I and my noble friend Lord Bellwin will be repeating that the Bill protects from any legal challenge what any metropolitan authority, through its transport executive, may do up to the limit of the PEL (protected expenditure level). It does not impose any kind of penalty anywhere.

The noble Lord, Lord Sefton of Garston, suggested that we were taking something away. In fact, we are not taking anything away. What we are doing is drawing into the total equation of transport costs that element of concessionary fares. It is entirely up to the authority, having received its PEL, how it makes the distribution. In giving consideration to the authority's request for subsidy, the Secretary of State takes into account all those factors which the transport executive wishes to make through the authority. Then it is up to it. Nothing is being taken away at all.

The noble Lord, Lord Underhill, spoke about the fallacy of the argument offered in another place, that children do not pay their own fares; they are paid for normally by the parents. That is perfectly so. There is nothing unreasonable about that. The parent is probably one who has, through the normal democratic process, access to the local authority. It is there that that determination can be made. What the Government seek to do is to ensure that nobody is disadvantaged, that there is a proper balance between that which is spent and where it is spent and the rights of the taxpayer and the ratepayer. Nothing is being taken away at all.

Lord Mishcon

The noble Lord the Minister is not being as frank with the Committee as we would expect him to be in that reply. This is not the first time that your Lordships' House has considered the case of children and fares, and it is not the first time that this House has looked somewhat critically at the decision of another place in regard to children and fares. I am inviting, if I may say so, on behalf of my noble friends, all parts of the House to take a careful look at this matter, which is not political at all.

What is the situation in regard to the transport grant? It must be—and the Government have said so—the fixing of an absolute total limit to what the Government are prepared to spend by way of subsidy for transport. Therefore, having fixed the global limit, which is what the Government want to do, the individual applications of local authorities will be looked at underneath that total. The reason for excepting old people and the disabled is that it would be unfair, so the Government say, rightly, to consider the advantages which are given to the disadvantaged in that respect within the total global limit, within the limit beyond which the local authority spends at its own peril.

The submission to the Committee is a simple one, which is this. The children should come within precisely the same category in regard to the relief given to their fares as the disadvantaged. I will spend but one minute, I promise the Committee, upon saying why this should be so. I shall not repeat the other points made by my noble friends and others because I am sure the Committee is seized of them—the family point, the school point, the need to visit various areas, the shopping safety point that has been mentioned. I shall merely say that the poorer the authority (as all your Lordships know), the more likely it is to have more children who have to travel by public transport because their parents do not have private transport in which they can afford to carry them. Therefore, it means that if one includes in one's plan rather more than other authorities do for one's children's subsidy, if I can call it that, the children's fares' subsidy, the total will be larger. One way or another you will suffer as an authority. Something will be cut off one of the other items of estimated expenditure in order to bring it within the Government's division of the global limit or, indeed, that subsidy itself will be reduced in the Government's calculation of what is the limit set for that authority's expenditure.

This is a matter that your Lordships may consider is more than a matter of conscience for this Committee. The Committee members, every one of them, will remember their own half fares as children—in some cases many years ago and in other cases not so many years ago—which was thought of almost as a children's right. If we are to have this new structure do not let us upset the children's right, especially in the poorer authorities.

Lord Lucas of Chilworth

I am surprised that the noble Lord, Lord Mishcon, should accuse me of being less than frank. Indeed, perhaps I would say to the Committee that he is being less than frank. He is drawing into this afternoon's debate an emotion: it is called "children". It has nothing whatsoever to do with children. It has to do with money and how it is spent. There is not a question that this Bill prevents children's fares from being paid. It is not so.

Lord Mishcon

I did not say that.

Lord Lucas of Chilworth

I am repeating. Millions of pounds are spent in transport subsidy and children's fares are met; they are included in the general subsidy which is eligible for support under the transport supplementary grant. It is that aspect, when it is included in the total plan, that goes before the Secretary of State. If the noble Lord says that the half fare is a child's right, that is a description. If the metropolitan authority, in offering its plan, sees that right in perpetuity it has only to add it to its plan. It will be part of the plan. It is not a question of children's fares, but a question of total expenditure in subsidy.

Lord Sefton of Garston

I do not for one moment think that it has anything to do with being frank or not being frank. I do not think that the noble Lord understands what is being said. What we are quite simply saying on this side is that because of certain events in the past, which both central and local government agreed, promises were made. The basis of an education was established on the basis of movement of children from one neighbourhood to another. All we are saying is that the facility to move should not be a choice made by the local authority between money spent for other subsidies and money spent for children first. It is as simple as that. If the Government persist and defeat the amendment, the Government will lay themselves clear to the charge that on a question of priorities they are not prepared to give first priority to children. This is something to do with children and not just money.

Lord Tordoff

May I reinforce that point? It seems to me that one of the reasons we are in this position, as we said so many times on Second Reading, is a lack of criteria in the Bill that decide how the global sum is reached by the Secretary of State. If the Government were to make some concession in that direction and give the criteria on which these grants are to be made on a more detailed scale, there would be more sympathy from this side of the Committee. The truth is that we have had assurances all the way through the progress of this Bill, both in another place and here, that concessionary fares were not to be affected. Quite clearly, the distinction between concessionary fares for children and concessionary fares for old and disabled people is being spelt out in the Bill in the way in which the Government are presenting it to this Committee. I hope, therefore, that the noble Lord, Lord Underhill, will press this amendment.

Baroness Hornsby-Smith

May I intervene before the noble Lord sits down, because I had hoped to challenge the previous speaker but was not quick enough? Would it not be practical to divide the very genuine claims of children with their families, or for schooling, if they come within the limit which allows them free fares? In most areas it is three miles. I speak having 16 great-nephews and nieces. One of them is theatre-potty and another is railway spotting-potty. They go all over the country. Very well, that is their chosen hobby. They should go cheaply to school and reasonably cheaply on a holiday with their parents or on a day out, but if they insist on coming down to London four times a month to see a London production I do not see why the rest of us should equate them, for cheap fares, with the genuine old-age pensioner, the handicapped or the elderly. It is not the same thing at all.

Lord Underhill

One point must be made at the outset to correct the noble Baroness. We are talking about the services provided in the area of a public transport executive. We are not talking about travelling throughout the United Kingdom. We are referring to travelling within the area for which the PTE and the PTAs are responsible.

The Minister referred to this being a commercial judgment and nothing to do with any domination or dictatorship by the Secretary of State. It is not a commercial judgment. It is not emotion. We are talking about social considerations. That is the important thing about the amendment. The amendment has great cross-party support. I hope that it will not be determined on emotion. That is not the issue.

We welcome the fact that the Notes on Clauses explain that the inclusion of the particular words in this clause make absolutely clear to the law that the metropolitan authorities may make subsidies for children, on which there was some doubt previously. Therefore, we are quite happy that that is there. But we are arguing about a point which I believe noble Lords have made quite emphatically. Is this a matter which should be set against the guidance that will be given for the protected expenditure level? We say that it is being based on a social consideration, and that is something that we shall be saying throughout this Bill. There are certain things which involve social considerations, and we should vote on that basis. I hope that, when we divide, as I hope we shall now, the Committee will support the amendment.

Lord Lucas of Chilworth

Before the Committee makes up its mind, I should like to assure the Committee that the payments for school bussing are not included in the PEL. They are dealt with by the education authorities. School bussing is the point raised by the noble Lord, Lord Sefton. It is the plan that is to be put before the Secretary of State, the plan prepared as between the transport executive and the authority, that will show, if it be the case, that children have been accounted for. That will be grant-aided within the terms of the PEL. So there is no question at this time of imposing, by virtue of this Bill, a disadvantage on children, whether they are going to school or to play.

Lord Mishcon

Will the Minister forgive me and answer one short point? Is it the intention of the Government that every application for a grant made under the plan will be met in full? If his answer is that there is no such undertaking that they will all be met in full, how can he say that the children's subsidy is bound to be met in full—100 per cent.—and that therefore there is no question of that grant suffering?

Lord Lucas of Chilworth

Of course I cannot give an assurance that a claim under the PEL will be met in full. The whole point is that the PEL is to be given consideration both by the Secretary of State and the authorities concerned.

3.48 p.m.

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

Their Lordships divided: Contents, 74; Not-Contents, 85.

Allen of Abbeydale, L. Hayter, L.
Amherst, E. Hunt, L.
Amulree, L. Ingleby, V.
Annan, L. Irving of Dartford, L.
Ardwick, L. John-Mackie, L.
Aylestone, L. Kennet, L.
Bacon, B. Kilbracken, L.
Bancroft, L. Kilmarnock, L.
Banks, L. Leatherland, L.
Barrington, V. Listowel, E.
Beaumont of Whitley, L. Llewelyn-Davies of Hastoe, B.
Boston of Faversham, L. Lloyd of Hampstead, L.
Broadbridge, L. McAlpine of Moffat, L.
Brockway, L. McIntosh of Haringey, L.
Bruce of Donington, L. Masham of Ilton, B.
Burton of Coventry, B. Mayhew, L.
Byers, L. Mishcon, L.
Caradon, L. Molloy, L.
Cledwyn of Penrhos, L. Nicol, B.
Collison, L. O'Brien of Lothbury, L.
Cooper of Stockton Heath, L. Oram, L.
David, B.[Teller.] Peart, L.
Davies of Penrhys, L. Pitt of Hampstead, L.
Denington, B. Ponsonby of Shulbrede, L.
Diamond, L. Seear, B.
Elwyn-Jones, L. Sefton of Garston, L.
Ewart-Biggs, B. Somers, L.
Fisher of Rednal, B. Stedman, B.
Gore-Booth, L. Stewart of Alvechurch, B.
Grey, E. Stewart of Fulham, L.
Hale, L. Stone, L.
Hampton, L. Strabolgi, L.
Hanworth, V. Tanlaw, L.
Taylor of Mansfield, L. Wedderburn of Charlton, L.
Tordoff, L.[Teller.] White, B.
Underhill, L. Wigoder, L.
Wallace of Coslany, L. Wootton of Abinger, B.
Adeane, L. Hornsby-Smith, B.
Airey of Abingdon, B. Hylton-Foster, B.
Auckland, L. Killearn, L.
Avon, E. Kimberley, E.
Balfour of Inchrye, L. Kinloss, Ly.
Belhaven and Stenton, L. Lane-Fox, B.
Bellwin, L. Lauderdale, E.
Beloff, L. Long, V.
Belstead, L. Lucas of Chilworth, L.
Bethell, L. Lyell, L.
Boyd-Carpenter, L. Mackay of Clashfern, L.
Campbell of Alloway, L. Macleod of Borve, B.
Campbell of Croy, L. Malmesbury, E.
Chelwood, L. Marley, L.
Clancarty, E. Marshall of Leeds, L.
Cork and Orrery, E. Mersey, V.
Cottesloe, L. Molson, L.
Craigavon, V. Mottistone, L.
Cullen of Ashbourne, L. Murton of Lindisfarne, L.
Daventry, V. Northchurch, B.
Davidson, V. Nugent of Guildford, L.
De Freyne, L. Penrhyn, L.
Denham, L. [Teller.] Portland, D.
Drumalbyn, L. Rankeillour, L.
Duncan-Sandys, L. Renwick, L.
Ellenborough, L. St. Aldwyn, E.
Elliot of Harwood, B. St. Davids, V.
Elton, L. Sempill, Ly.
Enniskillen, E. Skelmersdale, L.
Ferrers, E. Spens, L.
Fraser of Kilmorack, L. Stamp, L.
Gainford, L. Strathspey, L.
Glanusk, L. Sudeley, L.
Glasgow, E. Swinton, E. [Teller.]
Glenarthur, L. Terrington, L.
Glenkinglas, L. Teviot, L.
Gridley, L. Thomas of Swynnerton, L.
Hailsham of Saint Marylebone, L. Tranmire, L.
Trumpington, B.
Hampden, V. Vaux of Harrowden, L.
Harmar-Nicholls, L. Vivian, L.
Harvington, L. Wakefield of Kendal, L.
Henley, L. Westbury, L.

Resolved in the negative, and amendment disagreed to accordingly.

3.56 p.m.

Lord Underhill moved Amendment No. 4:

Pale 2, line 11, after ("children)") insert ("and excluding grants made pursuant to section 15(3) of the Transport Act 1968 (particular passenger transport services required to meet the needs of the area).")

The noble Lord said: I beg to move Amendment No. 4. The purpose of this amendment still deals with the question of "revenue grants" as defined in Clause 1. The amendment seeks to exclude grants made under Section 15(3) of the Transport Act 1968. The amendment describes these as payments to meet: particular passenger transport services required to meet the needs of the area".

I shall avoid taking the time of the Committee by reading subsection (3), but it is rather important. The purpose of the subsection is that it empowers the elected authority, the transport authority, to instruct the non-elected transport executive to make provision of a particular service if that is considered absolutely essential in the area, for which the authority will undertake to make payment to the executive and to include it in the precept on the district authorities. I have paraphrased the present provisions of Section 15(3) of the Transport Act 1968.

The importance of Section 15(3) was emphasised by Mr. Justice Woolf when he gave judgment against Great Universal Stores in their case last year against the Merseyside County Council. I shall not stress that case because the Minister in the other place took the view that, because the judgment did not go to the appeal court, it was not actual case law. But I will mention the fact that Mr. Justice Woolf based his argument a great deal on the provisions of Section 15(3) of the 1968 Act. That section relates not only to bus services but applies also to the retention of certain rail services under what is known as Section 20 grants.

The Under-Secretary of State in the other place has pointed out that as from 1st April 1984, Section 15(3), to which I have referred and to which reference is made in the amendment, will be repealed. The amendment would provide that payments in accordance with the provisions of Section 15(3) will be excluded from the revenue grants for next year—in the same way, as regards the last amendment, we tried to exclude the payments made on social considerations for children—but will also require a consequential amendment to ensure that the section is not repealed subsequently. The amendment seeks to retain the position of the elected authority with regard to the special passenger services and to retain this important decision based on local needs. The Under-Secretary of State also argued at the Committee stage in another place, at column 398 of 9th December: I am happy to tell the Committee that Clause 4(2) does a bigger job than Section 15(3). That may be the argument which the Minister will advance today.

But let us look at what Clause 4(2) actually says. It says: for the purposes of this section the Authority may require the Executive… How is it possible to compare that with the provisions of Section 15(3) of the 1968 Act?—which, as I said, gives power to instruct the executive if the authority wants a particular service to continue; that is, the elected authority instructing the non-elected executive that it wants a particular service. Clause 4(2) cannot possibly be compared with that. The provision in the Bill is toothless and halfhearted, and I am surprised that the Under-Secretary of State should make the statement in the other place that, in effect, it is a better job and a bigger job than Section 15(3) at present.

The provisions of Section 15(3) in the 1968 Act are very important. It means that where there is a service which must be continued, the authority can say to the transport executive, "You shall do this". If the transport executive says, "We cannot do it; we cannot afford it", then the authority can say, "You will do it but we will guarantee the payment for this service". We are insisting that where that is done such payments should not be taken into consideration as revenue grants to be set against PEL. I hope it will be accepted that Section 15(3) is important. I have statements which will justify that which, if necessary, I shall quote. I beg to move.

Lord Lucas of Chilworth

At present an authority can tell its executive to provide a loss-making service under Section 15(3) of the 1968 Act. The authority then pays the cost, as indeed the noble Lord, Lord Underhill, told the Committee. But under this Bill such payments are swept up with other payments under Section 13 of that Act into the new arrangements—that is, the annual plan, the guidance and, finally, the authority's decisions on the plan, and its decision on the total of grant for the year.

The Bill leaves the power of Section 15(3) in place until April 1984. Repeal is left until the Bill's processes are fully established, so the repeal occurs when the first full plan and the first determination have been made. Before that date an authority will still be able to ask the executive to run an uneconomic service. The authority will need to use its Section 15(3) powers when it decides the grant and the services it wants to run. After that, any use of the power in 1983–84 will be severely limited by the fact that the authority cannot increase the grant for 1983–84 after once deciding the level.

I suppose that in certain circumstances one might ask for a service between A and B and then say later that the cost should be met by spending less on other services, but I think that that power would be little used once a grant had been determined.

There are two main reasons for discontinuing Section 15 and sweeping it into the revenue grants under the Bill. First, as I have said, Section 15 will be unnecessary after April 1984. Authorities and executives will then be able to provide particular loss-making services and—this is the point that the noble Lord, Lord Underhill, underlined—the executive might itself decide to put the proposed service into the plan, or the authority could ask the executive to give details and costs under Clause 4(2). But in any case the authority can decide on the service when it approves the total plan and when it determines the grant. So, in effect, Section 15(3) will be quite unnecessary after that time.

The second reason for repealing the power and including these payments in the revenue grant system is that if we left the power in being and we separate them from revenue grants, the authority would be able to circumvent the new procedures. It would be able to call for new services and decide to pay for them at any time of the year, and the disciplines of the annual plan leading to the PEL and the single determination of grant would all be lost. These orderly and proper procedures as set out in the Bill would be debased because the authority would attempt to by-pass them and, in fact, would have the ability to by-pass them.

The Government would have to resist this amendment, first, because Section 15(3) payments must be within the revenue grant system. Where the processes of the Bill are fully suitable and allow an authority to decide what services are to be provided, they can do that within the revenue grant system. The second reason is that to leave the power outside revenue grant and unrepealed would totally destroy the desirable processes which are being set up under the Bill. There can be no way in which the basic premise of the Bill—that of setting limits for total expenditure under which protection will be given—cannot be circumvented. This amendment would, in fact, do that.

Lord Underhill

There are two points to which I should like to refer because in his reply the Minister said, first, that Section 15(3) will be repealed after 1st April 1984. That is assuming that the Committee agrees with that clause. We have not reached it yet and there are amendments to deal with it. He also said that after the determination of grants in the first year no other grant can be paid. We have not reached that part of the Bill yet either, and there are amendments to deal with that. Therefore, it is no good quoting to the Committee proposals which may be overturned in this House. That is the purpose of the Committee stage of the Bill. We want to put these things straight.

The noble Lord said that it is impossible to leave to outside revenue grant the possible grants under Section 15(3) of the 1968 Act, and that would destroy the purposes of the Bill. It is because we do not like the purposes of the Bill that we want to change some of these things, and that will be shown as we go along from amendment to amendment. However, on this amendment, I should like to read very carefully what the Minister has said. Possibly we shall come back to this matter on Report, but meanwhile I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Underhill moved Amendment No. 5:

Page 2, line 15, at end insert— (" 'benefits', for the purpose of sections 3(4)(c) and 4 (6) (b) below, means the social, economic and environmental transport advantages.").

The noble Lord said: This amendment also deals with a definition in the interpretation clause, Clause 1. It refers to the provisions of two particular clauses of the Bill. Clause 3(4) in the Bill relates to the annual plan which has to be prepared covering the period of the next three years and which has to be accompanied by estimates of three particular items. The item mentioned in paragraph (c) of Clause 3(4) in the Bill is: the benefits to potential users of those services and facilities". It will be noted how very restricted is the reference to benefits; it is only to "potential users of those services".

The other clause referred to is Clause 4(6), which sets out three items to be included in matters on which the Secretary of State may indicate that modifications should be made in the annual plan. Paragraph (b) of that subsection refers to: the benefits which would result from the making of such grants". In no way does that elaborate on what is meant by "benefits". The purpose of this amendment is to establish clearly what the Bill intends, what the Government intend, should be meant by the word "benefits". The amendment seeks to provide that the use of the word "benefits" in each of these subsections means the social, economic and environmental transport advantages of certain proposals.

There will be no argument about the inclusion of economic benefits. I am certain that the Government will say that that is essential as being one of the benefits. Therefore we describe that one of the benefits must be economic benefit. But, in addition, the amendment takes the view that to consider transport services without taking into consideration the important aspects of social and environmental matters is foolish. The effects upon shopping, upon entertainment, upon sports events and on people's lives are there, and that is why we believe that these descriptions of what is meant by "benefits" should be written into the Bill. I beg to move.

Lord Lucas of Chilworth

The Committee should have firmly in their minds as we go through this stage that this Bill can be considered only in terms of a complete package. Draw out little bits of it and the package is totally destroyed. If that is the intention of noble Lords opposite, then I can understand it. But I have to say now, in reference to Lord Underhill's remarks a short while ago, that they do not like the Bill—I can understand that, because the Bill puts upon local authorities, through the passenger transport executive, a ceiling limit outside of which they have to run the gauntlet of the electorate. Therefore, when we are talking about this particular amendment I ask the Committee to bear in mind that we are talking about one part of a total package. This is not a bit by bit Bill. This is one total package of one Bill.

Lord McIntosh of Haringey

Would the noble Lord allow me to intervene? Where in the Bill occurs this ceiling limit to which the noble Lord has just referred, outside which local authorities shall not go?

Lord Lucas of Chilworth

It is the PEL. I have used that term to describe the PEL, and it is the limit to which they can go without being challenged.

Lord Sefton of Garston

I find this almost unbelievable. The noble Lord is telling the Committee that his mind is closed to any kind of amendment to this Bill. The noble Lord, Lord Bellwin, shakes his head. If the noble Lord's words meant anything, that is what they meant. He said it has to be taken as a total package. Another way of interpreting that is to say, "Take it or leave it". Let me put a simple case with regard to this amendment. I come from Merseyside, as some people know—and in any case my accent would give me away. The situation on Merseyside, as I described on Second Reading, is that we followed certain policies. Being prevented by central Government from expanding our boundaries we had to move people out. In order to recompense them for their being moved further away from the centre of their activities, we operated a cheap fare on long distances.

It may well be that within a short period—I rather hope that it will be within a short period—some economic event may take place to the benefit of Merseyside. In order to get it, it may be that Merseyside would have to take a rapid decision—and they have already taken it four times under the special powers they have—to provide a transport service to a certain area. According to the noble Lord, there is not going to be any question of being able to operate that unless we take it out of what he calls "ceiling limits", the PEL; because if we do not do that and we decide to provide that service for the benefit of Merseyside, the people who are going to decide whether we are right or not are, first, a disgruntled ratepayer and, secondly, the courts.

It is no use the noble Lord shaking his head, because the Bill says that if we exceed the PEL the local authority can be taken to court and be told that any expenditure above that is illegal. In the case that I am drawing, that is allowing the courts to decide that a certain venture in transportation cannot be done. The noble Lord surely will not say that an Act of Parliament going through now would govern all the circumstances for the next two to three years. There must surely be some flexibility. Then why cannot the Minister consider an amendment which would allow consultations between central Government and the local authorities to exceed the PEL at a specific time other than under the terms of this Bill? Perhaps the Minister would give us his opinion on that and let us see whether he is flexible at all.

Lord Lucas of Chilworth

The Government will of course listen to anything that noble Lords may say during Committee. I was merely suggesting that we have to look at this Bill as a package. The basic principle of this Bill is that transport executives and authorities offer a plan. The Secretary of State discusses this with the authorities. A protected expenditure level is then established. If, indeed, I said to the noble Lord, Lord McIntosh, "limit". I in fact should have said "level". A ceiling level; a protected expenditure level. Obviously, a metropolitan authority can exceed it if they so wish. They would be ill advised so to do.

Returning to the point that the noble Lord, Lord Underhill, raised, I can understand that everybody would want to see the widest possible consideration for all types of benefit which can be derived from public transport service provision. But I do not believe that the wording proposed in the amendment is necessary to achieve that object. The executive, under Clause 3, and the authority, under Clause 4, and the Secretary of State, also under Clause 4, are empowered to consider any benefits which they believe to be derived from particular levels of revenue support. The wording proposed, with its reference to "social, economic and environmental transport advantages" is very wide, and it occurs to me that there might be at least the possibility of argument that some benefit which it is believed will be derived from the plan will not fall within that definition. With the present wording, which allows any benefit to be taken into consideration, the problem would not arise.

The second objection is that Clause 3 refers only to the estimate which the executive is required to provide under Clauses 3(4) of the benefits to potential users of these actual services and facilities which they propose to provide. Since that subsection is concerned with the specific details of the actual services to be provided it is appropriate to limit the estimate of benefits in that context to these accruing to potential users, and that is what the Bill does.

The amendment, as it is drafted, would apply in Clause 3 only to that subsection. But subsection (3) of that clause lays on the executive a wider duty, and that is to provide, along with the plan, general particulars of the benefits expected to accrue from a given level of revenue support. Subsection (5) empowers the Secretary of State to give advice, inter alia, as to how those benefits could be assessed. This is in the general guidance. The amendment would not extend to those. But in the context of those provisions, the wider considerations that the amendment has in mind are, if anything, more important than they are in subsection (4).

In giving advice to executives under subsection (5), I would not wish to discourage them from taking account of any benefits which they believe would be associated with their proposed course of action. As for the benefits mentioned in the amendment—social, economic and environmental transport advantages—such a provision would inhibit that consideration. In any event, the Secretary of State could enjoy a range of action as to the benefits which could be taken into account. For those reasons the amendment is unnecessary and the objectives it seeks to achieve are wider than, and already more than covered by, the Bill as drafted.

Lord Tordoff

I wonder whether the Minister really has any understanding of what we are trying to say from this side of the Committee? I take his point that the amendment as drafted may be too narrow or, in some ways, too wide. Perhaps from these Benches we would not wish to go in for the degree in social engineering that the Labour Front Bench might wish to pursue. But until we have some indication from the Government as to the rules which the Secretary of State intends to apply in reaching his conclusions, we are in considerable difficulty.

The Minister says the PTEs can put up almost any scheme they wish, and I take that point. On the other hand, there is no apparent constraint on the Secretary of State not to turn down any scheme he wishes, and it is that absolute power accruing to the Secretary of State which is the cause of considerable concern on this side of the Committee. It is not that we are trying to be totally destructive—we do not think it is a good Bill, but we are trying to be constructive—and I hope the Minister will respond in a constructive way. We know the problems the Government are facing in relation to overspending by local authorities. Nevertheless, we fear that unless something is spelt out in the Bill which gives at least a guideline to the Secretary of State as to those things which he should or should not take into account in reaching his decisions, we shall be leaving him with enormous powers which we feel are dangerous.

Lord Boyd-Carpenter

I hope I am not being offensive when I say that the amendments from the other side of the Committee have been largely wrecking ones. Indeed, the noble Lord, Lord Underhill, went so far as to admit that on the previous one.

Lord Underhill

I did not.

Lord Boyd-Carpenter

That is what the noble Lord said. He said that they hated the Bill and therefore they wanted to knock a hole in it. That is a fairly accurate paraphrase of what he said.

Lord Underhill

A mutilation of what I said.

Lord Boyd-Carpenter

The noble Lord is perfectly entitled to take that view. On the other hand, I think the Committee will be disposed to weigh perhaps less seriously arguments put forward from that standpoint than arguments designed to improve the Bill. When we come to the present amendment, it is a little difficult to see, apart from a desire to amend the Bill, what the Opposition are up to. The word "benefits" in the Bill as it stands makes matters perfectly clear, and if you proceed to define them, you are, as a matter of interpretation, restricting their scope. Yet if one listens to the speeches made in support of the amendment, that does not seem to have been appreciated. Indeed, the whole weight of the argument has been of favour of widening the scope.

I ask the Committee to consider—these points are particularly relevant in Committee—whether, if the words in the amendment were put into the Bill, we would not restrict the benefits which may be taken into account. From my point of view, if that were so I might be persuaded to accept them because, as I said on Second Reading, I take the view that the Bill is urgently necessary. I was interested, in that connection, in the words of the noble Lord, Lord Tordoff, when he said he understood why the Bill or something like it had to be brought forward. There has been gross extravagance in transport and other directions by a number of local authorities—most conspicuously the authority just across the river from this Chamber—and any Government of any colour would have had to take some action to check that in the interest both of the ratepayer and of the national economy as a whole.

I have some sympathy with the approach from the Liberal Benches because, in abstract principle, conferring powers on Ministers further to restrict actions of other authorities is not a particularly attractive prospect to me. But when local authorities have behaved in the way that, in the last year or two, some of them have, and in this context, any Government who did not take firm action to repress it would be failing in their duty. Indeed, if this process is to be relaxed and if the older relationship between central and local government is to be re-established, I would use the well-known French quotation: Que messieurs les assassins commencent".

Baroness Stedman

The noble Lord, Lord Boyd-Carpenter, is concerned about Ministers taking power away from local authorities. That is what we are getting at in our amendments to this part of the Bill, because power is being taken away from local authorities and given to the Secretary of State. We believe that local authorities should decide what level of transport subsidy they should give to their transport executives.

Lord Boyd-Carpenter

The noble Baroness has raised an interesting question. Is she arguing that the local authority should be allowed to levy any burden it likes, however enormous, on its ratepayers for the sake of transport subsidy without any check or hindrance on it from anybody else?

Baroness Stedman

I am arguing that the local authorities know better than the Secretary of State in Whitehall. They must account to the electors for what they are doing and the electors know what their policies are and what is understood by them. This clause is engineering a major shift in power from the local authorities, the elected representatives, to the Secretary of State. At present, the local authorities can instruct their executives, but under the Bill as drafted the executives will make the plans, pass them to the authorities and the Secretary of State will issue both the initial and final guidance on what is to happen. That is a complete reversal of power within the system of transport planning, and that is what we are opposed to in the Bill. The Bill forges closer links between the PTEs, which are the providers of the public services, and the Secretary of State, who is not locally accountable to the electors for the decisions he takes.

Lord Campbell of Alloway

I put aside for a moment any shift of power and come to the question of definition and the fears of the Secretary of State having too great a power. Briefly, if one defines "benefits" along the lines of the amendment, one would not be assisted in being able to challenge a decision of the Secretary of State for arriving at an unfair decision in a matter of public administration. Indeed, going further, I would say that there is the general judicial review machinery which is developing, and which has operated successfully since as long ago as 1977, under the Thameside case. Such machinery is developing the whole time. Under the Bill as it stands, there is machinery by which, if the Secretary of State were to act unfairly or irresponsibly, unmindful of his duties, he could, by way of judicial review, be brought to account for an unreasonable decision. Unless it be thought that by having made those very brief observations I am not in favour of the general spirit of the Bill, I would say that I am; but I was not addressing your Lordships' Committee on that point.

Lord Underhill

Before your Lordships' Committee decides what action to take on the amendment. I should like to put a couple of questions to the Minister; but first I must comment on the observations of the noble Lord, Lord Boyd-Carpenter, as I think he would expect me to do. Of course we dislike the Bill, but I challenge the noble Lord to show that any amendment that I have moved is a wrecking amendment—

Lord Boyd-Carpenter

If the noble Lord challenges me, I would say, Amendment No. 4.

Lord Underhill

The amendments that we have tried to put forward are intended to remove some of the worst features of the Bill. At Second Reading, speaking from the Front Bench on behalf of the Opposition, I said that in the Committee stage we would try to remove the most objectionable features of the Bill, particularly in view of the fact that after Clause 2, Clauses 3, 4, 6, 7, 8, 9 and 10 were not discussed in the other place, except cursorily. Therefore I say that here we shall have to give the utmost attention to the Bill in order to remove its worst features. The amendments are seeking to do that and to ensure that the best features of public transport are adhered to and that the Secretary of State will not be given power to damage them. That is what we have attempted to do.

I turn to the two questions that I want to put to the Minister. From what he has said, do I understand that the term "benefits" will be used by the Secretary of State to include, among other matters, social, economic and environmental transport advantages"? It is very important if such a categorical statement is made. Secondly, would the term cover a situation that has been referred to in a letter—I have a copy of it here—sent on 14th December by the Liverpool Stores Committee to all the eight Liverpool Members of Parliament? The letter was also sent to the then Secretary of State, Michael Heseltine, and therefore the department knows all about it and will be in a position to tell me whether the situation to which it refers will be covered by what is termed as "benefits".

The Stores Committee in Liverpool includes all the main stores. I mention only some of them: Boots, British Home Stores, Littlewoods, Marks and Spencer, C and A, Mothercare, Owen Owen, W. H. Smith, and so on. They all express concern, and I shall read just a short extract from the letter: The Liverpool Stores Committee is most concerned about the Government's new Transport Bill and the likely effect upon our future prosperity. Anything which will have an adverse effect upon passenger usage of public transport must have a detrimental effect upon the city centre traders". The letter continues: It is a fact that car ownership on Merseyside is virtually the lowest in the United Kingdom, and there is therefore a real need for good, inexpensive and efficient local public transportation", and so it goes on. In looking into the question of benefits, will the Secretary of State take that kind of situation into consideration? That I think is an important issue. It is not a wrecking question; it is a sensible question, asked in the interests of consumers and the interests of the stores in a city centre such as that of Liverpool. Can the Minister answer those questions?

4.33 p.m.

Lord Lucas of Chilworth

With regard to the important point made by the noble Lord, Lord Underhill, about what the other place did, I would point out that it spent 100½ hours dealing with only Clause 1 and part of Clause 2, and I invite your Lordships' Committee to consider exactly whose fault that was—

Lord Tordoff

Will the noble Lord the Minister nevertheless agree that where a Bill has not been subject to full presentation in the other place, regardless of who was to blame—and I make no comment on that—there is still a responsibility on your Lordships' House to see that the legislation is properly vetted?

Lord Lucas of Chilworth

I am extremely surprised that the noble Lord, Lord Tordoff, should address that question to me, bearing in mind where I sat over the last five years examining almost every Transport Bill line by line. Of course this is exactly what your Lordships' House and its Committees are for. I merely underline the fact that there is much work to be done, and 100½ was spent in the other place—

Lord Mishcon

May I interrupt the noble Lord the Minister merely to utter one sentence and to remind him that when he was indeed dealing line by line with every word of a Bill, at times he became awfully angry with the Government Front Bench?

Lord Lucas of Chilworth

I do not know; perhaps some of my noble friends might have thought that it was anger, but some might have thought that it was just excitement.

The noble Lord, Lord Tordoff, asked quite specifically whether there are no constraints upon the Secretary of State with regard to fixing the protected expenditure level. In response I can say only that in setting that level the Secretary of State must be satisfied that the plan put before him is sufficiently reasonable to attract the subsidy support which is within the authority of central Government. Outside of that the Secretary of State can impose no constraints whatsoever upon the local authority.

The noble Baroness, Lady Stedman, spoke about the clause taking the power away from the local authority. The answer to that suggestion is in fact, no; the clause does not do that. We shall come to the question of who makes the plan, and where that responsibility lies, when we reach a later group of amendments, and perhaps we can then return to the particular point. For the moment we are dealing only with the question of the benefits, and again I confirm to the noble Lord, Lord Underhill, that the Secretary of State can take into consideration any benefit whatsoever that is shown and put forward in the plan. So there is no restriction there—

Lord McIntosh of Haringey

I am sorry to interrupt the noble Lord the Minister, but I wonder whether he will give way again. He said just now that the Secretary of State can take into account any benefit. Would he agree with me that the memorandum that has been issued from the Department of Transport to the metropolitan authorities and the Greater London Council, setting out the benefits which were to be included in the model for determination of the permitted expenditure level, also included those which were not to be included? Would the noble Lord agree with me that the benefits specifically excluded are the social and environmental benefits to which the amendment refers?

Lord Lucas of Chilworth

I am afraid that I cannot help the noble Lord, because I just do not know the answer to that question. My understanding is that the Secretary of State may take into consideration any benefit that the local authority, through the transport executive, puts into its plan. The—

Lord McIntosh of Haringey

I am be able to help the Minister here. Annex A to the note, Proposals for Legislation on Public Transport Subsidies, states that the factors to be included include: level of revenue support, benefits from:— changes in service level, changes in fares … trip generation on public transport, transfer of passengers from private to public transport and reduction in road congestion". Other factors not taken into account in the model include: the effect on the city's economy in terms of employment, location of homes and work places and the environment, the additional economic disadvantages of higher taxes and rates, [and] social needs such as accessibility". Under those circumstances, how can the Minister say that any factor can be taken into account?

Lord Lucas of Chilworth

I am grateful to the noble Lord for reading that out. It all seems eminently satisfactory to me. How can the Government be expected to stand back when, and I quote one instance which was given during the Second Reading debate—that of South Yorkshire—a 600 per cent. increase in subsidy led to only a 7 per cent. increase in bus passenger miles? A considerable part of that increase in subsidy went on the acquisition of other undertakings. The Government have an overall responsibility, and it is because of these excesses, because the wilder excesses of subsidy have occurred, that the Government have to take this step.

Returning to this amendment, the noble Lord, Lord Boyd-Carpenter, made the point that, if we write in the phrase which the amendment seeks to include, we in fact restrict the opportunities of the transport executives and the local authorities for making inclusions in their plans.

Lord Mishcon

I should like to answer very briefly the helpful contribution that was made by the noble Lord, Lord Campbell of Alloway. He was endeavouring to assist the Committee, as he normally does so well, on legal aspects relating to this matter. He referred to judicial review, and both he and the noble Lord, Lord Boyd-Carpenter, referred specifically to benefits as we have them now in the Bill being a comprehensive term and therefore any definition limiting the interpretation of benefits.

Lord Campbell of Alloway

I agree that there is a difference of opinion between my noble friend Lord Boyd-Carpenter and me. I do not take that view, with respect. I take the view that if you bring into a Bill social, economic and environmental transport advantages, it is of such a vague order as to be useless for the purpose of any enforcement. My noble friend Lord Boyd-Carpenter took the point of view which the noble Lord, Lord Mishcon, mentioned. I take a different point of view about this issue.

Lord Boyd-Carpenter

Is the noble Lord, Lord Mishcon, not now faced with the entertaining situation that, although my noble friend Lord Campbell of Alloway and I make a different interpretation of the words of the amendment, in the result we are both against it?

Lord Mishcon

I frequently find that Members opposite reach a conclusion by a circuitous path. At times it is so circuitous that not even they can agree upon the nature of the path.

Lord Boyd-Carpenter

But we get there.

Lord Mishcon

What I want to say to the Committee, quite quickly, is this: whether it be the question of interpretation on a judicial review, referred to by the noble Lord, Lord Campbell of Alloway, or whether it be the point about limitation, if you define the matter, I frankly say to the Committee—and I have an idea that this may be the lot of many Members, if not all of us—that I had no knowledge of the document that had been issued by the Department of Transport.

I say with great deference that the noble Lord the Minister is doing a very capable job, to which he has brought a deal of experience and we are all delighted that he has it. The Minister has had time to consider the point or can ask for further time if he wants to do so. We have now heard of this memorandum. Whereas we had been told before—I am sure perfectly truthfully by the noble Lord because he believed in it at the time—that there were no limits to this word "benefits" and that the department had no intention of cutting out environmental or social benefits if these were to be included in the plan, it now looks—and I am measuring my words very carefully—as though the Ministry has an interpretation which it has put in a document of the word "benefits" which is a very limiting interpretation and which accepts some—if not all—social benefits; some—if not all—environmental benefits; and some—if not all—financial benefits.

In those circumstances, we really ought to know what the intention of the department is. Is the intention of the department to give up this document and alter it now that it has been quoted to the Committee? If not, is it not the Committee's duty to include, if not these words, some words very much like them, because we now know what the intention of the department is in regard to the definition of the word "benefits"?

4.46 p.m.

Lord Plummer of St. Marylebone

I give way to nobody in my admiration when I hear the lawyers start to dissect the legal interpretation of various words in the Bill. It throws a slight shudder down my spine because maybe the noble Lord, Lord McIntosh, takes the somewhat cynical view which I do, although he has been rather closer to this problem than I have when operating the London Transport Authority under the Greater London Council.

From a purely practical point of view. I hope that we will bear in mind the enormous burden which is being thrown at the moment on industry and offices in the conurbations about the country. How long can the, go on bearing the burden which is being thrust upon them? As a cynic I would say that the Government of the day off-loaded these matters on to local government because they became rather tired of paying for them themselves. Now, having off-loaded them on to local government, they find that they have to come back and control the expenditure—and quite right, too.

If one takes the Greater London area, industry—large and small firms—is leaving in droves. We are losing employment as fast as is possible. Unless there is some control of expenditure on these public transport authorities, the situation will get worse and worse. In the end there will be nobody to pay for people to move about the conurbations because the burden on the business ratepayers will be so great that they will simply be in bankruptcy. I hope that the Minister will stand firm in his attitude on this matter. I support him wholeheartedly.

To bring forward the special pleading of the stores grouped in the centre of Liverpool seems a very poor argument indeed. Of course they are in favour of cheap fares. They will go on being in favour so long as one goes on giving it to them, as will all the other groups to which you are going to hand out free fares. What is the limitation on what there they are going to hand out? Every day one hears that something is going to be handed out free of charge. The special travellers on London Transport who have certain free concessions are now to be allowed to travel in the peak hour in the evening. One wonders where it is all going. I hope that the Minister will stand firm.

Lord Molloy

May I respond to some of the points that the noble Lord has made? I believe it is vital that a response should be made. First and foremost, all that he outlined was a proposition that was made in the manifesto of the London Labour Party for which the people voted. I do not believe one can come along to this Chamber and say that the people of London ought not to have voted for these things, particularly in the field of transport. When we get to that frontier we are very near what is happening in parts of the world which all of us in this Chamber despise: that where there is a glimmer of democracy there is some reason given to crush it.

Furthermore, when the leaders of the GLC had their plan worked out, they quite rightly went to the top lawyers that they employed and said to them: "Will you please tell us as top lawyers, receiving very high salaries"—as all lawyers apparently do—"whether we would be in order, and would it be legal for us on the interpretation of the current Act of Parliament to do this?" Those lawyers said "Yes", and so they did it. That cannot be a crime in any circumstances. The argument that took place then was whether those lawyers were correct or whether the Law Lords' interpretation was correct—and after all those Law Lords were probably trained in the same school as the other lawyers. The argument was not between the people and their elected representatives but between those who were not elected anywhere—the Law Lords in this building and the lawyers in the GLC. This is what ordinary people readily understand; and so the "Fares Fair" policy was made a reality.

Let us briefly look at the results. The first thing it did was to hearten small businessmen and big businessmen. It meant they lost some of the problems they had been having when people were asking: "What is the good of taking a job when I have to travel, say, from Northolt to the East End of London? It is £16 already out of my salary just to get to work and come back." Therefore "Fares Fair" reduced that and made taking a job worth while: and employers—not wicked trade unionists—have told me that this was an encouraging feature. It would also give them an argument to go to London Transport and say that when people want to move across London and back to do a day's work they can now do it, not with the harsh fares they were charged but on a very reasonable fare basis, which is a very good thing.

Something else happened, and I think this must be stated in regard to this Transport Bill: literally thousands of motorists found it was much cheaper to travel to the outskirts of London and then use the Tube or the bus to get to their place of work. Statistics are available to prove this beyond any peradventure, and the Government have them. So that was another very useful thing. When all these things are put together, what do they really prove? Why should all of Great Britain be involved in running London Transport? Let the people for whom it is primarily designed—namely the Londoners—decide how London Transport should be operated. And they made their decision. That democratic decision by the tens of thousands of those who went to the polls was overruled by less than half a dozen judges and it is this sort of thing which really hurts in the breasts of ordinary people. It certainly does in mine.

It was a good scheme and it was part of a remarkable transport exercise to move people around London as cheaply as possible and to take traffic off the roads. So may I say to the noble Lord who has just sat down that I believe any fair-minded person, who will examine what the situation was before the GLC introduced this measure and what happened afterwards when they were compelled to withdraw it—anyone with the faintest idea of what common sense and efficiency mean—would realise that the GLC had introduced a measure which brought in more revenue, took private transport off the road and allowed people to go to their office, factory or place of work. It was a good thing for London Transport; it was a good thing for London industrialists; and it was a good thing for the London people as a whole.

Lord Boyd-Carpenter

We seem to have strayed a little from the relatively narrow terms of a not very important amendment which technically we are discussing. For that, I suppose that all your Lordships, including myself, must accept a measure of responsibility; but I rise now only to say two things. First, I should like to ask your Lordships to pay great attention to the warning given by my noble friend Lord Plummer. As your Lordships know, he has an experience which is equalled only by that of the noble Lord, Lord McIntosh of Haringey—although my noble friend's experience is somewhat longer—of the managing of the largest of all our local authorities. His warning on the effect of the rate policies (for which transport policies have been very largely responsible) of that authority on employment in Greater London and on the prosperity of Greater London is one that I believe your Lordships will not want to disregard. I am quite sure it is one that the people of London outside will not disregard.

The other point I want to take up is the really astonishing observation, if I may say so, which was made In, the noble Baroness, Lady Stedman, in her speech when she allowed me to interrupt her some little time ago. As I understood her (and I hope she will correct me if I am misrepresenting her) she was saying that however high an elected local authority took expenditure—whether it be on transport or anything else within its powers—with the support for the time being of its electors, it must be permitted to continue so to spend and that the central Government must not intervene. Did I misunderstand the noble Baroness?

Baroness Stedman

What I said was that the local authorities were the ones who should decide the levels of expenditure and of the services they needed, because they are accountable to the electors. If the electors do not like what they are doing, within three years they have the chance to get rid of them. But they are accountable to their electors and they are the ones who know what their electors need, what they want and the sort of level of services which should be provided within any locality.

Lord Boyd-Carpenter

Yes: I did not misrepresent or misunderstand the noble Baroness. She said precisely what I was saying a few moments ago but she said it, as is characteristic of her, more clearly. It is that proposition which I should wish to challenge. In that situation you can have a local authority—and I am thinking particularly of the great metropolitan authorities, and we had some figures on Second Reading—carrying the burden of the taxation which they impose and the volume of expenditure in which they indulge to a point that is damaging to the national economy as a whole.

Conduct of the national economy is the responsibility of central Government, of whatever Party or political background it may be composed. If one is in a situation—and I do ask the noble Baroness to consider this, because I think we are in, or very close to, such a situation—in which the conduct of the economy of the nation by the people responsible for that conduct, namely, the central Government, is being damaged (I will not use the word "sabotaged" because that implies motive) and injured by an elected local authority, then, I would submit to your Lordships with great respect, the Government of the day are not only entitled but are indeed bound by their own duties to intervene with whatever legislation may be necessary to curb the excesses of such a local authority. I will give way in a moment to the noble Lord, Lord Tordoff, but it is no good the noble Baroness saying, "Oh, they are responsible to those who elected them". The central Government is responsible to the whole of the electorate and to the whole country; and if the electors in a certain local authority wish to pursue policies which are gravely injurious to the country as a whole, then, in my submission to your Lordships, it is still the duty of the central Government to intervene to stop them. That is the situation which occurs here.

When, as of course is the case—and nobody knows this better than the noble Baroness—your local authority electoral system is highly defective, so that you have a system in which the bulk of the rates in most areas is paid by the people who have no vote at all while the majority of the electors pay no rates, then the argument that they are responsible to their electors becomes rather a pallid reflection of itself. Anyway, I take it, particularly as the noble Baroness has repeated this statement, that this is the view and policy of those she sits among—namely, the Social Democratic Party. If some wider publicity is given to this statement of policy, it might have a very salutary effect indeed on the public's estimation of that worthy collection of people.

Lord McIntosh of Haringey

May I—?

Lord Boyd-Carpenter

I have promised to give way to the noble Lord, Lord Tordoff.

Lord Tordoff

The simple point that I want to make is that, even if one accepts the whole of that argument, which I do not, is a Transport Bill the right way of coming at it, or is a better form of local government finance a better way of coming at it, as my noble friend Lady Stedman would, I am sure, support? The Social Democratic Party and the Liberal Party have been working on this for some considerable time, and she herself has been very much involved in producing better forms of local government finance.

Lord Boyd-Carpenter

I can only comment, in reply to the noble Lord, Lord Tordoff, that that is not what the noble Baroness, Lady Stedman, said. She did not say that a local authority should be curbed in these circumstances, but by means of another sort of legislation. She said bluntly that it should not be curbed at all, if it had its electors' suport. On the other point, the damage at the moment is being done most conspicuously through the over-subsidisation of transport undertakings. The matter is of great urgency in this country. Though there is certainly an argument for reforming the whole basis of local government finance, that would take a considerable time and, when there is a leak, as there now is, in the bottom of the boat, it is better to plug it with the instrument adapted to it—in this case, a Transport Bill.

Lord Mishcon

I am taking a point of order, if it is permitted in your Lordships' Committee, which I would normally have taken had I been sitting on the other side. This is a most magnificent Second Reading debate. We are dealing, at the moment, not with whether the Transport Bill is a proper vehicle, or with what the GLC did or did not do. We are dealing with the definition of "benefits", and I believe that our business cannot be conducted in this way. I say that with great deference, sitting where I do.

Lord Lucas of Chilworth

I am obliged to the noble Lord, although I must confess that I have found the last 10 minutes or so extremely interesting. I want to answer specifically the question which the noble Lord, Lord McIntosh, asked, which dealt with the question of benefits. He referred to a document, and I imagine that the document must have been the Proposals for Legislation on Public Transport Subsidies. The paper describes the detailed basis now envisaged and seeks local authorities' comments. So it is not, perhaps, the definitive last paper. If authorities wish to put forward—

Lord Sefton of Garston

Would the noble Lord give way? I have the document here and my understanding has nothing to do with local authorities. The question that I want to ask, now that I have the document is: was this document discussed with passenger transport executives alone, under the Ministry of Transport, or was it discussed with local authorities? If it was discussed with passenger transport executives, what was their attitude, particularly to those factors that are not included?

Lord Lucas of Chilworth

I am sorry, but I do not propose to answer that question now, because the document deals with the planning system to which we shall come later. The noble Lord, Lord McIntosh, raised one small point and asked: does this exclude, or does it include? I am saying to him in answer, because I want to be helpful, that, notwithstanding the document from which he quoted, if authorities put forward other matters, the Secretary of State will be able to take them into account in determining the protected expenditure level upon which depends the amount of subsidy, outside of which local authorities can determine their own course.

Lord Pitt of Hampstead

Is the Minister not being less than ingenuous? If, in effect, local authorities are given guidance as to what are to be regarded as benefits, how can the Minister then say that they can reply in their plan including the things that they were told to exclude, and that they will be considered by the Minister?

Lord Lucas of Chilworth

I can only repeat what I have already said. The words set down in the amendment are restrictive and, we believe, deny exactly what it is that the Opposition are asking for, which is that the Secretary of State can take into consideration benefits. By writing down particular words, it constrains him. I think that the Committee would not wish the Secretary of State to be constrained in considering the matter of benefits.

Baroness Denington

It really is necessary, in my view, and I hope in the view of everybody else, to vote on these words in this amendment. The trouble is that the Government are absolutely blinkered by their concentration on rates. We only ever hear about rates. That is what concerns us on this side so very much. I am not denying that rates, which have now risen to a high level, are a matter of importance. But, from all that is said and written, we gather that the Government think only about rates and we want to be certain, when we are considering transport policies and the monies that are necessary, that the Government take into consideration social, economic and environmental transport advantages.

The noble Lord, Lord Plummer, said that people are moving out in droves because of rates. We do not know about that. They are also moving out because of rents, but the Tory Party never say anything about rents. Rents are nice. They like rents and they do not mind them being high. We do not hear at all from the Tories about the points that my noble friend Lord Molloy made. He was absolutely right, and everyone in this Committee knows that he was absolutely right. We all know—and the noble Lord, Lord Plummer, ought to know from his experience on the GLC—that people move out because they cannot get staff, because of the travelling costs of staff and, because staff cannot get on the buses, they get a job near home—

Lord Lucas of Chilworth

I wonder whether the noble Baroness, Lady Denington, would allow me to interrupt and to take up the words of the noble Lord, Lord Mishcon, a little earlier. In this amendment, we are not dealing with rates, in particular; we are dealing with a definition of "benefits." While I could quite easily answer her—

Baroness Denington

With great respect—

Several noble Lords


Lord Lucas of Chilworth

I apologise to the noble Baroness, but I ought to come towards the end of what I can offer to the Committee, with regard to benefits. I can only repeat that with the amendment's reference to social, economic and environmental transport advantages, it is wide, but we feel that there is at least the possibility of argument that some benefit which it is believed will be derived from the plan when it is offered will not fall within that definition. The present wording allows any benefit to be taken into consideration and the problem would not arise. Therefore, I suggest that the amendment is not necessary.

Lord Sefton of Garston

Before the noble Lord sits down, may I revert to the question of this document? In the Second Reading debate, I said that this Bill was the product not of politicians but of bureaucrats. I said that it had come from the transport world, which was intent only on transport. Now we have a document which the noble Lord did not know about until today. It was issued by the Ministry of Transport and went to the passenger transport executives. Copies were sent to local authorities. It excludes a model which will be used when assessing the protected expenditure level. It excludes the effect on the economy of a city in terms of employment, location of homes, work places and the environment. It excludes flexibility. The noble Lord who sits on the Front Bench opposite said the Government did not know about the existence of that document, which is a disgrace and a terrible condemnation of what is going on. I repeat that this clause hits at the very heart of the Bill. Whether or not they make mistakes is irrelevant. Local authorities want to get the best for their area. Can we leave London out of it for the moment?

A noble Lord


Lord Sefton of Garston

We want to ensure that there is a transport service on Merseyside. We want to try to redevelop an economy which has been wrecked by private enterprise. In doing so, we may, in the opinion of the Government, spend too much, but in the opinion of the people of Merseyside we shall not spend too much. Nor, addressing the noble Lord, Lord Plummer, shall we spend too much in the opinion of all those people who have to pay rates but do not get a vote. The noble Lord may know something about London, but may I tell him that in Liverpool the Liverpool Stores Committee is a very powerful voice in the private sector. The Bill is opposed not only by the Liverpool Stores Committee, which represents all the major ratepayers in Liverpool who have no vote, but also by the regional area of the Co-operative Society, which is the biggest retailer in the area. Therefore, what has been said by the Liverpool Stores Committee cannot be discounted.

May I return to the specific question which I asked. If the Minister is not prepared to answer, then let him say so clearly and unambiguously so that everybody knows. Was this document discussed with the PTEs and the Ministry'? Of course, the Minister does not know the answer to that question but he can write to me. I want to know whether this document was discussed with the PTEs and the Ministry and, if so, what was the attitude of the PTEs to this document. I am reliably informed by local government services that the PTEs throughout the country condemn it and do not agree with a single part of it. Before this issue is finally resolved, we should at least have an answer to that question.

Lord Underhill

The closing remarks of my noble friend Lord Sefton have provided the right note for my reply. It is necessary to find out precisely what the document means and the attitude to it of the PTEs, and also the attitude of the Secretary of State to the replies received from the PTEs. It is also necessary to look carefully at the words which the Minister used. It may be that the use of the word "include" instead of the word "means" in our amendment would have satisfied the Minister. It is obvious that many Members of the Committee feel strongly that the benefits mentioned in the amendment are essential. Whether the Government accept that point of view is not certain. A close investigation of the document may reveal the answer. Rather than divide the Committee at this stage, I should prefer to look at what the Minister has said. I should also like to look more carefully at the document, which I hope the Minister will also look at, and see what was the reaction of the PTEs. Then we can come back to the matter at Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

Clause 2 [Financial duty of Executives]:

[Amendment No. 6 not moved.]

5.16 p.m.

Lord McIntosh of Haringey moved Amendment No. 7:

Page 2, line 25, leave out ("next following accounting period") and insert ("relevant period within the meaning of section 3(1) below").

The noble Lord said: By arrangement, I beg to move Amendment No. 7. This is a thoroughly uncontentious amendment. It is businesslike and practical. Furthermore, it has nothing to do with socialist ideology, or with the ideology of the Liberal Party or the Social Democratic Party—if, indeed, there is such an animal.

The purpose of the amendment is to give effect to the frequently stated objective of Government, that there should be a businesslike running of public transport in our cities. In order to give effect to that objective, the Bill already says that there shall be a three-year accounting period—the period referred to in Clause 3(1)—and that after the first year indications shall be given by the Government of the expenditure which will be permitted or encouraged by local authorities in the succeeding year. However, the clause with which we are dealing does not continue to give full effect to that three year provision. To paraphrase, it says that any deficit found in one year shall be made good in the next year.

I suggest that this is contrary to the best business practice with which we are familiar. A public transport undertaking is not only concerned with setting fares and service levels year by year. If it is to survive in an increasingly competitive economy, by which I mean competitive in relation to private transport, in future it will have to invest in new rolling stock, new buses and so on; and if it is a fixed track authority, it will have to invest in signalling and in track. Sometimes it will have to undertake experiments: new ventures which will not necessarily come to fruition in the first 12 months or even the second 12 months of their lives. Nor should any business be constrained in that way.

The effect of the clause is that despite the indications in the rolling programme, any deficit in one year, as a result perhaps of mismanagement but also as a result perhaps of a sensible and progressive investment policy, will not be allowed in the following year. No doubt the noble Lord the Minister will confirm whether or not I am right in saying that the protected expenditure level will be reduced so that the deficit can be made up in the following year. This means that the only steps which can be taken by a passenger transport authority in the following year must be short-term steps. They must either raise fares or cut service levels and abandon the longer-term plan, which by then will not have proved whether it is successful. It will therefore not take account of the best interests of public transport in that area. This is a short-sighted view which is in conflict with the expressed intentions of the Government and with the well established procedures of the transport policies and programmes and the transport suplementary grant. It reminds me of the statement of Mr. Denis Healey, who said that you cannot get a poultry farm out of the red by starving the chickens. But that is exactly what the clause proposes. It is inconsistent. To borrow the phrase of the noble Lord, Lord Boyd-Carpenter, this amendment is certainly designed to improve the Bill.

Lord Bellwin

The noble Lord, Lord McIntosh of Haringey, will not be too surprised if I tell him that our case does not rely too heavily upon what was said by Denis Healey. It may be helpful if I explain that the purpose of Clause 2(2) is to help make Clause 2(1), the break-even provision, effective and a real commercial discipline. Under Clause 2(1) an executive has to ensure that revenues cover charges so far as practicable in that year. Clause 2(2), as drafted, ensures that this requirement to break even is a real discipline. It does this by requiring an executive that fails to cover charges by revenue, and consequently makes a deficit, to make good that deficit the following year. Clause 2(2) makes the deficit from the preceding year part of the charges which have to be covered by revenues in the following year. This seems to us to be sound financial judgment. The new financial duty, however, does not provide a financial straitjacket. The section requires the executive to break even, so far as practicable". which ensures that an executive which ran a large and truly unavoidable deficit would not, come what may, be forced to make good that deficit in the following year if it was impracticable to do so.

The effect of this amendment would be to allow the executive a three-year period to pay off the deficit. The problem here is that the deficit could accumulate from year to year and it would never be clear whether the financial duty to break even had been complied with. It would surely be a recipe for loose financial management and would not be in the interest of the executives, the authorities, or—perhaps more, or equally, important—the ratepayers and taxpayers who might find their money wasted on excessive subsidies and increasingly inefficient transport services.

It is not unreasonable to expect the executives to exercise taut financial control. However, I believe it would be fair to say that if a deficit were to arise from circumstances which really were beyond the ability of the executive and the authority to control, the authority might decide that some increased revenue support was necessary to make good the deficit in the following year, and the Secretary of State will take that into account when considering his guidance on the level of protected expenditure.

My final point is that subsection (2) could allow a deficit to be carried forward for a further year if the executive and/or the authority had done all that was reasonably possible to recover the deficit but nevertheless were unable to do so because the subsection requires them to ensure, so far as practicable", that the deficit is made good. If it were not practicable, clearly they would not be bound to do so. We have here something that is good common sense. It is an attempt to bring this aspect into a much tighter financial régime, which must make sense. At the same time, I think that it is not so inflexible as to leave no room at all. In the past couple of hours we have discussed a number of areas, and I dearly wanted to join in but somehow restrained myself. Here, however, we have something that is on the grounds of management. The Bill is quite flexible—more than some might have thought.

Lord McIntosh of Haringey

The noble Lord the Minister has in his speech gone some way beyond the wording of the Bill. Subsection (2) says that, If in the case of any accounting period it is not practicable for an Executive to ensure that those revenues are sufficient to meet those charges", then it has to be put right in the next accounting period. The noble Lord, Lord Bellwin, has been good enough to say that even that need not be applied too rigidly, if I take him aright, and that there is still room for flexibility in further accounting periods. I shall read very carefully what the noble Lord has said and will consider whether to bring this matter back at Report stage. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.24 p.m.

Lord Underhill moved Amendment No. 8:

Page 2, line 33, leave out ("by them").

The noble Lord said: We come now to an amendment which is only one in a group, and I believe that it will be to the advantage of the Committee if I speak also to all the related amendments. The amendments total 19 in all; they are Amendments Nos. 8, 9, 11, 12, 13, 14, 15, 20, 23, 24, 25, 28, 43, 45, 46, 48, 49, 50 and 51. I only wish that the decision in favour of all those amendments was as easy as reading them out, but I hope that it will be so after I have explained the purpose of this amendment.

These amendments are of the utmost importance because, in short, they are concened with local democracy. There are various provisions in Clauses 2, 3, 4 and 6 which require that the executive shall alone prepare the plan. It has to be kept in mind that the plan will cover a period of three years, which the executive then submits to the authority. Perhaps I should again remind the Committee that it is not the fault of the noble Lords here that another place spent so much time on Clauses 1 and 2. But three of the four clauses with which these amendments are concerned were given very little consideration in another place. I know to my cost the time that was spent on Clauses 1 and 2 because I have read almost every word that was said in the Standing Committee. But it can be argued that Clauses 3, 4 and 6 received little consideration and therefore it is vital that this group of 19 amendments receive the Committee's careful attention.

There are also provisions under which the Secretary of State will have direct contact with the transport executive on various matters, over and above the elected authority. I will remind your Lordships that it is the transport authority which is elected, which has the statutory responsibilities for the provision of services, and which is also accountable to those who elected it. So in all the points which have been raised on other issues, it is the transport authority which has to face the electors and be accountable to them. Generally there are good relationships and understandings between transport executives and the respective transport authorities. Such understandings and relationships are, of course, absolutely essential. The provisions of this Bill will tend to undermine that good relationship. As will be seen from a subsequent amendment, the Bill will enable the Secretary of State to deal direct with the executive when giving his advice and guidance, which is then just communicated to the authority. The Bill will tend to undermine the power of the authority with regard to the executive.

All this is contrary to the position that will continue in the shire counties, for they will be free to continue their subsidy policies, and to carry out and to meet the needs of their areas, without any interference from the Secretary of State. It is only the metropolitan authorities and the GLC which will be affected in the way I have described under this Bill. This Bill will place the transport executive in a confusing situation. It will receive advice direct from the Secretary of State but, at the end of the day, the plan will require the statutory approval of the authority—which is, as I have said, the elected body. The TPP or Transport Policy and Programme which, as noble Lords will know, has to be sent to the Secretary of State each year in connection with the transport supplementary grant, is prepared and submitted by the county council. The county council is in effect the passenger transport authority.

In the light of what has been said by the noble Lord, Lord Boyd-Carpenter, may I emphasise that there is nothing in these amendments that removes the power to be given in the Bill to the Secretary of State to determine the protected expenditure level. That is a matter to which we shall come later, but it has nothing to do with these 19 amendments. I am pleased that the noble Lord nods and assents to that. We are dealing with amendments which will remove the undemocratic features to which I have referred. They will provide for the plan to be prepared jointly by the executive and the authority. We are not even asking in the amendments that the plan shall be prepared only by the authority. We are saying that it should be prepared jointly by the executive and the authority, and this is clearly shown by Amendment No. 48, which will insert the following words: Where the joint preparation of a plan has been concluded to the satisfaction of the Authority they shall by resolution adopt the plan". These amendments remove the direct influence of the Secretary of State on the unelected executive, ensure the close relationship of the executive and authority preparing the plan, and will retain the essential position of the elected authority.

We have some mysterious documents. I have another, which is very authentic; I believe the others are as well. We would want the Secretary of State's views on them. I have a letter sent to the Association of Metropolitan Authorities as recently as February 1983 by the Managing Director of Buses of London Transport, Dr. Quarmby, in which he says: On behalf of the passenger transport executives and the London Transport Executive it might be helpful to have confirmation that we are with the metropolitan councils in supporting the concept of a jointly submitted plan in place of the separate planning processes envisaged in the Bill.". I understand that Dr. Quarmby is chairman of the passenger transport executives' group. Therefore, there is not the slightest doubt that the passenger transport executives dislike being put in the position of preparing this plan themselves; they are in effect in support of the 19 amendments which wish the plan to be dealt with jointly by the appointed operators, the transport executives, and the elected authorities, the passenger transport authorities. Therefore I hope no noble Lord will oppose this democratic process which all the operators want, and that they will, by suporting the first amendment, give approval to the whole 19.

Lord Bellwin

The noble Lord said that the planning process provided for in the Bill places the initiative for the preparation of the plan with the executive and thereby fundamentally changes the relationship between the executive and the authority. The noble Lord has suggested—I will not use the word "alleged", which some have suggested to me—that this undermines the existing basis of democratic control. The noble Lord also expressed concern during the Second Reading of the Bill that the plans should be prepared jointly by the executive and the authority. But such a change would in fact alter the whole relationship proposed under the Bill.

I must reassure your Lordships. This Bill does not undermine the existing relationships between executive and authority, or the ultimate responsibility of the authority for the provision of local transport. Under existing legislation the authority has power in relation to the PTE to appoint its members, make grants, obtain information, appoint auditors and give directions on various matters. But the initiative rests with the executive for such matters as preparation of budgets, plans for service reorganisation and for capital expenditure, agreements with BRB and NBC and changes in fare levels, although the executive must secure the approval of the authority for what they propose.

Similarly, under the Bill, the executive will be responsible for the initial preparation of the three year plan and for providing and analysing information on the general level and structure of fares and services. But it will under the Bill, exactly as under existing legislation, also be required to supply the authority with any information requested about possible alternative strategies on different service or fare levels. Such additional information might be supplied after the plan has been sent to the authority, or it might take the form of a supplement to the plan. It is surely right and proper that the executive should prepare the initial plan. They are the people, appointed by the authority, with all the knowledge and expertise required for operating transport services.

We agree with the noble Lord, Lord Underhill, that before preparing the plan the executive should consult the authority. To put the matter beyond doubt, we made a suitable amendment to Clause 6(1) in the other place. Once the executive has prepared the plan it must be put to the authority, who will be able to approve it, subject to whatever modification they believe necessary. The authority will be able to add information when sending the plan to the Secretary of State. Your Lordships will see from Clause 4(2) that the authority has considerable scope to require the executive to provide alternative proposals (as indeed they do under the 1968 and 1969 Acts). The ultimate responsibility for the plan that is chosen to go ahead does rest with the authority, and that is the key point.

Given that it is the authority which decides the final form of the plan which is to go ahead and the amount of grant, I fail to see why there should be resistance to the executive's preparing the plan. To place the task of preparing the plan jointly with the authority and executive would surely diminish the use of the experience of the executive in providing services, would risk confusion and delay, but more importantly would risk the authority's declining to explore proposals at levels of grant different from those which they would prefer. The executive are, after all, the experts who know what can or cannot be achieved with given resources, fare levels and services, and it would be folly not to make proper and effective use of their knowledge. The authority will have the final say over the content of the plan and so will be able to discharge their duties in respect of the transport services of their area.

The proposals in the Bill maintain the existing relationships and the accountability of the authority to their electorate. The amendment would instead, I respectfully submit, blur the responsibilities of the executive and the authority. We believe it right for the executive to produce the first version of the plan, concentrating especially on how to get and to give greater efficeiency and—dare I use the words?—value for money. The preparing of this plan will become, for the executive, a part of fulfilling their duty to the authority and to the public at large, who are, if I may say it, fed up with indiscriminate subsidy. The executive will be accountable for their aspects of the plan.

Then the authority will produce its views and modifications to the plan. These will include deliberate political choices and decisions on which services are to be subsidised and to what level. The authority, in making specific alterations and additions to the plan, will be clearly accountable for those, to its ratepayers. The Bill gives clear responsibilities and accountability to both the executive and to the authority. The amendment would obscure and confuse. So for all these reasons the Government could not agree to substitute joint working by the authority and the executive in the task of preparing the initial plan, and that is why we are unable to accept this group of amendments.

Lord McIntosh of Haringey

In common with some of my noble friends, I have been involved in the preparation of submissions for a TPP over a number of years. It is quite true to say, as the noble Lord, Lord Bellwin, does, that the initial work on the preparation of a plan for public transport has to rest with the executive; there cannot be any doubt about that. They are the professionals; they have the job of looking at the options and costing them before submission to the authority. But it is not true to say that there is no way under the terms of the amendments moved by my noble friend that that cannot be achieved. There is no reason why with goodwill on both sides there should not be an effective co-operation of those who have the responsibility for preparing and costing transport alternatives and those who have the responsibility of representing the electorate in the area concerned.

The noble Lord the Minister says that the amendments would introduce confusion and delay. I wonder whether he realises that what the amendments do is to cut out confusion and delay, because the Bill as drafted creates an additional area of possible confusion and delay by demanding that the executives should in the course of their work report directly to the Secretary of State. That is the additional confusion, the additional chain of command that we seek to remove by these amendments.

Let it not be thought that this is a theoretical point, because already the Department of Transport, as I am sure the noble Lord is aware, is asking very detailed questions of the passenger transport executives about the way their services operate. For example, London Transport Executive is being asked directly, not through the Greater London Council, about the levels and costs of off-peak services, night time services, weekend services and so on. What we have in the Bill as drafted, before the amendments, is the executive being torn in two directions. On the one hand it is fulfilling a function described by the Minister of preparing a plan for the authority to submit, or on which the authority is to be consulted before submission. On the other hand, it is answering quite separate questions, quite detailed questions, about the level of its services. I suggest to the Committee that this is what creates confusion and delay and not the situation as it would be after the amendments.

One final sentence, if I may: the noble Lord again tried to bring into the debate what he called "indiscriminate subsidy". It must be repeated on every occasion that this is said that the Bill is not about subsidy. It is about revenue grants from authorities to their executives, but it is not about subsidy as I think it is becoming understood, which is subsidy from central Government to local authority ratepayers. That subsidy is and will remain, as I understand it, the concern of the transport supplementary grant and the TPP procedure. I think it is possible, I am sure through inadvertence, that a number of noble Lords may be misled by the use of the word "subsidy" into thinking that we are dealing with the proper responsibility of central Government which is its own expenditure and not that with which the Bill is concerned, which is the proper responsibility of the local authorities, their own expenditure.

Lord Teviot

On this I fully support my noble friend. The noble Lord, Lord Underhill has been persuasive in moving this series of amendments. At first sight I must say I was tempted to agree with them. They seem to overcome the danger of this Bill, as one previously put it, in making the executives the whipping boys of both central and local government. The co-operation between executive and authority is in preparing a joint plan to ensure that the authorities' general policy is fully taken into account. However, this really cannot be in doubt.

When one looks at the principal legislation, the Transport Act 1968, one finds that it is the duty of the authority to determine the general policy to be followed by the executive. This is spelt out in terms of financial control and the ability to purchase any specific service or level of service from the executive. Beyond that it is the duty of the executive to provide services and to provide professional management of those services. There is the crunch, and, as I said at Second Reading, even if it is necessary for management to manage, even if it is within a general policy defended by policy makers, I believe that the 1968 Act has matters in perspective and its balanced view is maintained in Clause 6(1) of the present Bill which requires the executive, before preparing its financial plan, to consult the authority. That is the right level.

I must say I was a little surprised when the noble Lord, Lord Underhill, quite rightly quoted Dr. David Quarmby in this context. I do not know whether he is saying that either London Transport or the passenger executive, the employers of transport, are in agreement with these amendments; however, I somewhat doubt that. The executives would, within the policies of the authorities, plan and manage; that is their statutory and professional responsibility. If the authority is jointly the author of a plan it is plaintiff and judge in its own case. There is no balance. I hope your Lordships will not support this amendment.

Lord Molloy

I wonder whether the noble Lord, Lord Bellwin can help me. I followed his exposition and argument very closely and it seemed to me that perhaps a fair analogy with what the noble Lord was saying is this. The Chancellor of the Exchequer we all know does not give every small detail of his Budget. That is worked out by top-flight civil servants. Therefore, according to the noble Lord, those top-flight civil servants in the Treasury have a certain degree of responsibility for the Budget, as much as the Chancellor has. They would recommend things which he would have to accept. I do not believe that for one minute. Therefore, if the principle has to be adopted all the way down, we have to realise that the executives are employed, by permission of Act of Parliament, by the local authorities, The moment that we start giving those who are employed by the elected representatives a degree of authority which appears to be outside the normal scope of behaviour of either national or local government it seems to me that we are starting towards a process which would not merely be undemocratic but exceedingly dangerous.

The noble Lord, Lord Bellwin, quite rightly said that the local authority, or whatever it may be, would say, "We are allowed to engage an executive committee to run our transport system". I should have thought that what follows, provided that the authority was within the law of the realm, is that the executive must do what the authority asks it to do. That is what it must be. Therefore there must be no Act of Parliament which says, or even adumbrates, what that executive must do. That is why these words must be cut right out. It must be the elected representatives. We must in no way accept an Act of Parliament which tells the officials of the Treasury: "You will do this, that or the other, irrespective of what the Chancellor or the Government of the day think". In so far as we would not dream of doing something like that, we must maintain the principle. Because the local authority is allowed to recruit it, pay the salaries and write the terms of employment, the local authority is entitled to tell the executive to prepare all sorts of plans. But once that is in an Act of Parliament and indicates that an executive must do something, I believe it is bad for the executive, any executive, it is bad for the local authority and it is certainly had for the principle of democracy.

Lord Sefton of Garston

I am a little mystified, because when the noble Lord, Lord Bellwin, sat down he had almost convinced me that there really was no change in the Bill. When he said that the relationships between the local authority and the executive remained the same, he almost had me believe it. But it is not the same, because if it was the same there would be no harm in accepting the amendments. There would be no harm because things would have stayed as they were. So what is the difference? What is this amazing thing that converts the noble Lord, Lord Bellwin, from one of the staunchest supporters of local authorities that I have ever heard speak on the AMA? At the time when the first Water Bill was going through he stalwartly defended the right of local authorities' members to have their say. The Government were saying at the time, "There is no harm". They were saying to the Association of Metropolitan Authorities, "You will have x number of representatives and in fact, you will have a majority". Thus, everything was the same.

Of course it was then, but that is not the underlying threat in the Bill. It is not that we have to prove that it will perhaps stay the same, because the executive, in a prolonged way of preparing the plan, will waste time and can have its own way this year. What is the purpose of including these words in the clause? Let me give your Lordships the scenario. The local authorities still appoint the executives. As far as I know there has not been a change. When I was the leader of the Merseyside County Council I took what I thought was a wise step, to appoint to the executive some of the chief officers of the Merseyside County Council. I did not believe that the executive had in mind enough the social and economic wellbeing of Merseyside interests, so I put them on.

Now we have the situation where local authorities did that and in such numbers and with such personnel that they knew that in the preparation of that plan, if it was insisted on, the views of the local authority would be fed in as an input right at the beginning. The noble Lord nods his head. He thinks that is all right. Of course it is, but what would be the consequences? It would not be long before the civil servants in the Department of Transport were saying: "This has got out of hand. The executives are actually being controlled by the local authorities." Then what would happen? Of course we know what the next step is; there would be another Transport Bill.

That is exactly what the noble Lord, Lord Bellwin, said when discussing water. When I stood up at the AMA and warned it to have nothing to do with the Bill and nothing to do with the bribe that was given by central Government to put more local authorities on the water undertakings, they all said: "Oh no, Sefton is imagining things". My forecast was that within a very short period power would be taken right out of the hands of the elected representatives. What happened in this Chamber? Of course power has gone from the elected representatives. Water has now become a matter of consultation between central Government and the local water authority, which has no relationship to democracy at all. The net effect of this clause will be the same. It will not be long before transport goes the way of all the other services that local authorities were once proud of. They will have gone completely and will be in the hands of a bureaucracy that no one can control.

5.52 p.m.

Lord Bellwin

I enjoyed, as I always do, the impassioned speech of the noble Lord, Lord Sefton. No one does it better, but I had great difficulty in seeing where we are differing. I have always had that difficulty in the past, and I am still having it.

Perhaps it would help if I simply explained that, as I understand it, in fact what the Bill calls for is for no real direct reporting by the executives. The position simply is that they copy their plan to the Secretary of State for information—I repeat, for information. The noble Lord keeps telling me about nodding my head. I only nod my head when I agree with him, and if I am nodding it frequently he ought to be pleased about that. Now he is nodding his head, but I am not sure whether he agrees or disagrees

However, this is how it will work. This is what the Bill says. If there is confusion I can do no better than clarify the position and end the confusion. The executive will copy its plan to the Secretary of State for information, but the plan routes via the authority and it is the authority which decides to modify before sending it in the end to the Secretary of State. Only the authority can adopt the plan and determine the grant that it will give to the executive, after having had regard to the Secretary of State's guidance on the PEL. I think that is a very simple and straightforward procedure. I am very grateful to my noble friend Lord Teviot for confirming that he agrees with it as well.

I am anxious to pick up the point made by the noble Lord, Lord Molloy, that civil servants made recommendations which, he was afraid, the Chancellor must accept. I assure him that the Chancellor is not likely to accept exactly what they say unless he agrees with them, which he may well do; I do not know. The important thing is, where does the final decision lie? The noble Lord opposite, I am sure, will be happy to hear me confirm that it lies in the end with the authority. After having done all it has to do with the executive, and after having learned through the executive and the Secretary of State's guidance, at the end of the day the authority will make the decision. What happens when that decision is taken—whether it decides that it will set fares at certain levels, or whatever—The PEL will then step in and say, "Below this point you have no fears of legal challenge, beyond that point you may; but yours is the decision." That is what it is about.

However, before we get into all that, as I am sure we will several times again, I am anxious to take the point made by the noble Lord, Lord Mishcon, earlier, because I do not want to get into Second Reading debates either. If I may stick to the amendment, I feel that if it is the procedures and the style that we are concerned about, then the amendment really is not necessary. These are not the key points of the Bill. It is important to know who will be making the decision and I am saying that it is the authority.

Lord McIntosh of Haringey

Before the noble Lord sits down, will he confirm or deny whether this is happening already? Are civil servants from the Department of Transport already rooting around in the executives asking detailed questions about their operations? That is the gravamen of the charge in these amendments.

Lord Bellwin

The Bill is not yet on the statute book. Therefore, nothing is or can be done that has effect in law. However, if the department is doing as the noble Lord says, and I am assuming that it is doing so although I really do not know, then it is learning as it goes, because at the end of the day it will have to make certain judgments. It can in any case do no harm. In my own knowledge, and certainly in the knowledge of all the noble Lords opposite who have spoken on this today, who all have considerable local government background, it is absolutely par for the course for departments to be talking with the various bodies and discussing various matters. The noble Lord may fear that there is something sinister in this, and from where he sits he may be right, but I suspect not. I would not attach too much concern to that.

Lord Molloy

Will the Minister consider this very vital aspect: in this Bill, as it stands, and probably in no other Bill passed by any Parliament, there is one group of people—I beg your Lordships to listen to this argument—employed by a local authority which will have an advantage that town clerks, deputy town clerks, planning officers, or anyone, will not have. It will, if this Bill goes through without the amendment, be able to challenge the elected authority by the words of an Act of Parliament. I refer to the executives. We should leave it as the amendment proposes and which would fit into the argument submitted by the noble Lord, Lord Bellwin, just as much as it would fit into the argument as submitted by my noble friend Lord Underhill. We must look at it in the context of the Bill giving special provision for only one group of people employed by a local authority, who could challenge that local authority with an Act of Parliament because it is mentioned in it. Let us take it out for the benefit of the principle of local government as it applies today.

Lord Bellwin

I honestly feel that the noble Lord is not right. I am sure that he believes that he is right, but I think his concern is not properly founded. It is exactly as I said. If he will read carefully what I said, as I am sure he will, without my going over it all again, he will find that at the end of the day the decision on the adoption, or otherwise, is with the authority.

Lord Molloy

It can be challenged.

Lord Bellwin

Only if it decides as a matter of policy. If the authority, not the executive, decides as a matter of policy to go above the PEL, as it may well decide as being reasonable to do, then and only then can it be challenged. But the ultimate decision lies with the authority.

Lord Mishcon

I believe that this argument on this amendment can be brought into a very short series of sentences. Either we are right in saying that local government is being put under a handicap by this clause, or we are wrong. Either we are right in saying that the dignity and the jurisdiction of local government is being infringed, or we are wrong. The Minister says that there is no infringement of dignity or jurisdiction and really no difference in normal local government and national procedures. If he is right then this amendment deserves to de defeated. If I can satisfy your Lordships very shortly that he is wrong, then your Lordships ought objectively, if I may say so, to vote for the amendment.

Let us consider things in this simple way because it is a simple issue. I served in local government for just over 20 years and had the privilege of spending quite a bit of that time with the noble Lord, Lord Plummer of St. Marylebone. Both of us in our individual places on opposite sides of County Hall fought for the independence of policymakers as against those who were the experts who carried out the policy. There was no division between officers and those whom we appointed in regard to responsibilities. I would ask anybody who ever knew anything about local government what they would think of a procedure under which the chief engineer or the chief transport officer was required to send a copy of his report to the council, first to a Minister of the Crown or, equally at the same time, to a Minister of the Crown and the chairman of his committee. If that were to happen there would be an outcry that, quite obviously, the whole basis of local government had been infringed.

As I understand it—but the noble Lord the Minister will correct me if I am wrong, and I shall sit down immediately he begins to rise, if he wants to rise—the procedure is the following, and it is as simple as this. The Government, irritated by a few local authorities which they feel have gone beyond the limit, are bringing in a Bill which affects every local authority—good, bad or indifferent. Transport is the vital field of many of those local authorities. As I understand it, those appointed by the local authority, the transport executive, will prepare a plan. A copy of that plan—and this is where I wait for the noble Lord the Minister to correct me if I am wrong—goes at that stage, in its primary state, to the Minister. It goes to him before the policymakers have had an opportunity of dealing with it at all, although it may be after consultation; one does not know. The noble Lord the Minister does not rise, so I assume that I am correct so far. As I said, the analogy is a copy of the town clerk's report to the general purposes committee going to the Home Office first of all or to the Minister for Local Government, or whoever it may be.

After that it is quite right, as the Minister says, that the local authority can amend the plan. It will be for them to approve it. But the difference that has been created which upsets the whole of the dignity and jurisdiction of local government, and upsets, too, the whole differential between the job of the officer and the expert and the democratically elected policymaker, is that the Crown is in receipt, the Minister is in receipt, of the first plan and the Minister can then say, when he is fixing the level beyond which the local authority must not go, "I know what your officers whom you employed, your transport executive, had to say first of all, before you altered this plan. This could have been done in a very different way". Then you get—and it is the thin end of the wedge—not only an alteration in traditional historic relationships between the officer and the expert and the policymaker democratically elected in local government—a differential that has existed ever since local government was proudly created by this country—but also the possibility arising of the transport executive being blamed by the local authority: "You put that in the plan. You remember we had a meeting a fortnight ago when we told you that we did not agree with that. Look what you have done." Thus you have created again a division between the local authority and the executive which might not exist.

Before I sit down, I ask the noble Lord the Minister the following question: if I am wrong, if I am exaggerating, if I am creating bogies that do not exist, would he please tell me why he wants to see the plan before it is approved by the local authority? If he will answer that question I shall be very interested, because all he has got to say is, "No, it is not because I want to be able to argue from the original plan against the local authority when fixing my level". All he has got to say is, "I agree it makes no difference to me if I see the plan as it finally comes forward from the authority, approved by them and subject to their own amendments".

I await with interest for the answer to that point, because in my view it is the core, central to the whole issue. We are either right in thinking that there is an alteration, or we are wrong. We are either right in thinking that it means something, or we are wrong. If it means nothing, then I hope that the Minister will agree that the first report need not go to the Minister but ought to go to the authority, and that means that this amendment ought to succeed.

Lord Somers

With the greatest respect, may I suggest to the noble Lord, Lord Mishcon, that the Minister of State has also been democratically elected.

Lord Bellwin

I am grateful to the noble Lord, Lord Mishcon. At least I now clearly understand the concern in a way that I may have missed previously. But I am still absolutely convinced, and I hope to be able to satisfy him, that in fact it is not so sinister a matter, it is not such an erosion, if I may put it that way, of the local autonomy situation. I take the point that the noble Lord, Lord Sefton, made when he said that I was a staunch defender of local democracy—I hope that I always will be. The matter that seemed most to concern the noble Lord was the rectitude—if that is the right word, but it probably is not—of passing a plan to the authority and at the same time to the Secretary of State. The noble Lord asks: why should it have to go that way, in that sequence? The Bill specifically requires a Secretary of State to give guidance—that is the operative word—as to the PEL. If in fact he was to wait until he had an agreed plan from the authority rather than having it come to him at the same time from the executive, that would be the end of the day.

What will happen under the Bill when it becomes an Act is that the Secretary of State, having received the plan, will consider it and then give the authority the guidance that they absolutely must have in coming to a conclusion as to the final decisions they take regarding the level of fares and so on. If that were to be the end of the game, I should be sympathetic to what the noble Lord says. But the fact is that no one is seeking to trample on anyone or to override anyone. The hope, the expectation and the wish of all the provisions in the Bill are that we shall in future have a régime of charging where the authority concerned will know up to what level they are free of any legal challenge, in a way that they do not know at present. It is said that this particular issue is about an infringement of local authority powers—in fact "powers" is not the right word; the noble Lord put his argument so well that I should have to read it in order to put it in exactly the way in which he put it, but I understand the point that concerns him. But I do not think that it should concern him, because it is not an infringement in any way, not even an impingement, on local authorities. At the end of the day the authority will decide. They will have before them their own plan, which they can have discussed with their executives. After all, in fairness it must be said—and I do not want to overstate this because I am most concerned with the authority's position—that the executive is an independent body. It even has powers to promote Bills of its own.

Having said that, I want to major on the point that at the end of the day it is the authority which will decide. The question is whether it is right that the initial plan should at the same time go to the Secretary of State so that he can give guidance as to the PEL. I now understand the fine point that is being made. I still think that it is one that should not worry anyone. It certainly would not worry me if I was in the position of the noble Lord, Lord Sefton, in making the decision at the end of the day if I had before me, first, a plan from the executive and, secondly, the guidance from the Secretary of State as to the PEL. The decision would then be mine. I should have thought that that was the major point.

Lord Sefton of Garston

On a point of clarification, did I understand the noble Lord to say that the plan would be prepared by the executive, then submitted to the Minister and the local authority at the same time, and then the Minister would determine the PEL? That is not the position, because Clause 3(5) on page 3 of the Bill, at line 35, says that the plan will be prepared in consultation with the Ministry—that is, before the plan is formulated. So the situation is not that the plan will go to the Minister and the local authority, but that the Ministry will say to the passenger transport executive, "Take this guidance into account when you produce your plan". In effect, we have shifted the preparation of the plan from local authorities to the Ministry. It is in the Bill.

Lord Bellwin

That just is not my interpretation of it at all. I am reading the same clause as the noble Lord. It means exactly what I said it meant before, and if you want me to go over it again, I shall be glad to do so.

6.13 p.m.

Lord Pitt of Hampstead

If, in effect, the executive is expected to prepare a plan, in the preparation of which it has to take guidance from the Minister, then obviously the plan is being prepared between the Secretary of State and the executive. Then, at that stage, the authority gets it. But let us face it, the authority gets a plan which the Ministry and the executive have prepared together. What powers does the authority really have? It can override the Minister and the executive and then, finally, the Minister can say, "But that is the level beyond which you cannot go". In other words, the authority is being put in the middle. The Ministry and the executive are preparing plans which the Ministry finally approves. Then, if the authority does not happen to agree with the Ministry, it can be set up as the proverbial target to be shot at, because in effect at all material times the executive and the Ministry have discussed these matters. When the matters actually come to the authority, they come to the authority having been agreed between the executive and the Ministry.

Lord Bellwin

You can interpret it one way or the other. I still think that my interpretation is correct, but it matters not, because at the end of the day the final decision lies with the authority. At the end of the day it decides.

Lord Sefton of Garston

Perhaps we can clear up this matter, because I am very concerned about relations between that Front Bench, local government and this Front Bench. I am taking it that the noble Lord, Lord Bellwin, is giving us an assurance that the preparation of the plan is entirely a matter for the executive in the first place, and that it is not determined in consultation with the Ministry. Am I getting that assurance, or not?

Lord Bellwin

The Bill says quite clearly: In preparing the plan the Executive shall take into account any advice"— I repeat, advice— given by the Secretary of State as to the amounts"— et cetera, et cetera. That does not make them decide anything. The fact that they get advice surely must be helpful. But at the end of the day the decision is taken by the authority. It must be so.

Lord McIntosh of Haringey

Will the Minister read on? Where he said "et cetera, et cetera", it says: any advice given by the Secretary of State as to the amounts that it would be appropriate for the Executive to determine under subsection (3) above and the method of determining the benefits referred to in that subsection". Subsection (3) is absolutely fundamental because it contains the basic duty of the executive to provide transport services under the Bill. Is it not the case that the Secretary of State is, in fact, giving advice—and "advice" is a weasel word for something stronger than that, as we know throughout this Bill—before a plan even goes to the authority in the first place?

Lord Bellwin

I would not know about weasel words, but the fact is that it is there in front of us. I think that my interpreatation is right. It is indeed advice, but at the end of the day the decision is the authority's and it will decide. When we are talking about local autonomy, to me that is what matters.

Lord Underhill

I am certain that the noble Lord the Minister would not say that that is what matters if he was back in his position on the Leeds City Council. In his previous remarks the Minister again referred to the question of the revenue grants. I want to assure every noble Lord in the Committee that at the moment we are not discussing any alteration of the proposals in the Bill for determining revenue grants. I make it quite clear; all we are dealing with is the position of the executive vis-à-vis the authority and the Secretary of State. We are not dealing with the question of revenue grants.

Let us just see exactly what is the situation. I shall not read the text; I will paraphrase it. First, the executive has to supply information to the Secretary of State, as he may request. It is not to go to the authority—the elected body responsible to the electors—and say, "Will you please supply this information?" No, it goes to the operators—the full-time officials—to get the information.

Then we are all agreed that the executive has to prepare the plan, and we are all agreed that a copy of any plan or information which the executive sends to the authority also has to be sent to the Secretary of State. I shall paraphrase what subsection (5) of Clause 3 says. First, in preparing the plan the executive has to take into account the advice of the Secretary of State on the determination of proposed grants. Secondly, the executive has to take into account advice on the method of determining the benefits from the grants. Thirdly, the executive has to take into account the advice generally as to the form and contents of the plan. That means all local passenger transport details. Fourthly, the executive: shall take into account the advice of the Secretary of State on the method of determining the costs of providing the services, the level of demand, and benefits to potential users. But that is not the finish.

Turn over the page and you will find a provision that, in considering whether to approve the plan which the executive has prepared, the authority shall have regard to the advice given by the Secretary of State to the executive. In other words, the authority must take into account the advice given to the executive when it considers the plan submitted by the executive. I am certain that the noble Lord the Minister would have sent letters of protest if anyone had dared do this while he was active in local government.

Reference has been made to the letter from Dr. Quarmby. I make it quite clear; I understand that he is the chairman of all the PTE groups. Let me remind your Lordships of what he said. On behalf of the PTEs"— that is, all six PTEs— and the London Transport Executive, I give confirmation that we are with the metropolitan councils in supporting the concept of jointly submitted plans in place of the separate planning processes envisaged in the Bill". So the elected transport authorities—the county councils—do not like the proposals in the Bill; they want joint action and joint plans. The appointed transport executives do not like it either, and they are with the bodies which, in effect, control them. Both the PTEs and the PTAs want the amendments which I have put forward. That is what their letter means. All we are talking about is joint preparation of the plans—we are not saying that the authority deals with it by itself—and that the information and all the advice should be given, as one would expect, through the proper channels.

I cannot understand why the Government object to what we are asking. It is so elementary. Why do they object? Is it because they want to give this advice to the appointed executive, which then the elected authority has to take into account otherwise there are going to be difficulties for them under the PEL? If both the PTEs and the PTAs want this change I cannot understand why the Government resist it. If every noble Lord in this Committee really reflects on what has been said, I do not think that one noble Lord will understand why the Government resist it. Therefore, I hope that we shall carry these amendments in the Division. They are simple. They have no relation at all to changing the Government's intention under the Bill regarding determination of grants. It is a question of the proper relationship between the elected body and the appointed body, and the relationship to the Secretary of State. I beg to move.

6.21 p.m.

On Question, Whether the said amendment (No. 8) shall be agreed to?

Their Lordships divided: Contents, 58; Not-Contents, 97.

Ardwick, L. Davies of Penrhys, L.
Aylestone, L. Denington, B.
Bacon, B. Diamond, L.
Balogh, L. Elwyn-Jones, L.
Bishopston, L. Ewart-Biggs, B.
Boston of Faversham, L. Fisher of Rednal, B.
Brockway, L. Gladwyn, L.
Brooks of Tremorfa, L. Hale, L.
Bruce of Donington, L. Hall, V.
Cledwyn of Penrhos, L. Hampton, L.
Collison, L. Hanworth, V,
David, B. Hatch of Lusby, L.
Hooson, L. Seear, B.
Jeger, B. Sefton of Garston, L.
John-Mackie, L. Segal, L.
Kennet, L. Stedman, B.
Kilmarnock, L. Stewart of Alvechurch, B.
Llewelyn-Davies of Hastoe, B. Stewart of Fulham, L.
Lloyd of Kilgerran, L. Stone, L.
McGregor of Durris, L. Strabolgi, L.
McIntosh of Haringey, L. Tanlaw, L.
Mishcon, L. Taylor of Mansfield, L.
Nicol, B. Tordoff, L. [Teller.]
Oram, L. Underhill, L.
Peart, L. Wallace of Coslany, L.
Phillips, B. Whaddon, L.
Pitt of Hampstead, L. White, B.
Ponsonby of Shulbrede, L. [Teller.] Winterbottom, L.
Wootton of Abinger, B.
Ross of Marnock, L.
Alexander of Tunis, E. Lyell, L.
Ampthill, L. McAlpine of Moffat, L.
Auckland, L. Mackay of Clashfern, L.
Avon, E. MacLeod of Borve, B.
Bellwin, L. Malmesbury, E.
Belstead, L. Mancroft, L.
Bessborough, E. Mansfield, E.
Boardman, L. Margadale, L.
Boyd-Carpenter, L. Marley, L.
Brabazon of Tara, L. Merrivale, L.
Caithness, E. Mersey, V.
Campbell of Alloway, L. Molson, L.
Campbell of Croy, L. Monson, L.
Carnegy of Lour, B. Mottistone, L.
Cathcart, E. Mountevans, L.
Chelwood, L. Murton of Lindisfarne, L.
Coleraine, L. Napier and Ettrick, L.
Colwyn, L. Nugent of Guildford, L.
Cork and Orrery, E. Orkney, E.
Cottesloe, L. Pender, L.
Craigavon, V. Penrhyn, L.
Cullen of Ashbourne, L. Plummer of St. Marylebone, L.
Davidson, V. Rankeillour, L.
Denham, L. [Teller.] St. Aldwyn, E.
Drumalbyn, L. St. Davids, V.
Elles, B. Salisbury, M.
Elliot of Harwood, B. Saltoun, Ly.
Elton, L. Sandford, L.
Enniskillen, E. Seebohm, L.
Fairfax of Cameron, L. Selkirk, E.
Ferrers, E. Sharples, B.
Fraser of Kilmorack, L. Skelmersdale, L.
Glenarthur, L. Slim, V.
Glenkinglas, L. Somers, L.
Gridley, L. Strathspey, L.
Grimston of Westbury, L. Sudeley, L.
Hailsham of Saint Marylebone, L. Swinfen, L.
Swinton, E. [Teller.]
Harmar-Nicholls, L. Terrington, L.
Henley, L. Teviot, L.
Hornsby-Smith, B. Teynham, L.
Hylton-Foster, B. Tranmire, L.
Killearn, L. Trefgarne, L.
Kimberley, E. Trumpington, B.
Kinloss, Ly. Vaux of Harrowden, L.
Lane-Fox, B. Vivian, L.
Lauderdale, E. Wakefield of Kendal, L.
Long, V. Windlesham, L.
Lucas of Chilworth, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 9 not moved.]

6.29 p.m.

Lord Underhill moved Amendment No. 10:

Page 2, line 35, at end insert ("or if the Authority because of an unforeseen major change in circumstances decide to increase the amount of the revenue grant payable to the Executive during the accounting period").

The noble Lord said: In contrast to the large group of 19 amendments this is a simple, single amendment. All it asks is that where there are changes of circumstances, circumstances that were unforeseen at the time of determining the amount of revenue grant, the authority should have power to increase the amount of the revenue grant payable to the executive during the particular accounting period. This would appear to be sheer common sense. There are noble Lords among us with far more business experience than I have. The noble Lord the Minister has stressed that the executive and the authorities ought to act on commercial lines in these matters. It is common sense business practice that something like this should be done.

At the Second Reading reference was made to a statement by Ministers in the other place that in the event of such a situation arising the position could be dealt with by borrowing. That, I suggest, could be bad business because it would mean having to make up the borrowing in the following year, and that could affect the protected expenditure level for that year, apart from there being charges in connection with borrowing.

I recognise that such a decision would have to be taken by the elected authority, but let us consider some of the unforeseen circumstances that could arise. There could be the sort of severe winter conditions we had last year; that could affect the whole of the operations and revenue of a transport executive. There might be severe flooding in the area, and that could affect their operations for a time as well as their revenues. There might be disastrous petrol price increases—I must remember to use the right word, with the noble Lord, Lord Lucas, present, and not say "petrol" but "diesel"—and that could affect the whole situation. On the other hand, there could be unfortunate industrial action, and that too could affect revenues. It must be common sense therefore that an executive should have power to increase its grant during the current year and not have to borrow, which could be bad business and affect all operations in the following year.

Lord Bellwin

One of the prime purposes of the Bill is to introduce a planning process into the assessment of transport needs so that transport services can be planned and provided for on a stable and rational basis. Accordingly, the scheme of the Bill provides for one grant determination each year, based on proposals set out in the plan. As the noble Lord, Lord Underhill, said, the purpose of the amendment is to enable an authority to provide additional grant during the year to cover any unforeseen circumstances which, of their nature, would not be provided for in the plan. This would mean that an executive could, for example, negotiate a high wage settlement or, for some reason or another, increase its level of services, and cover the additional costs through increased grant from the authority, rather than by reducing costs elsewhere or increasing fares. That would constitute very poor financial practice and would seriously weaken the new financial duty on the executives to break even. Thus, the amendment would encourage inefficiency—dare I say it?—and loose management, and cause ineffective financial control. That could not be in the best interests of the executives, the authorities, the ratepayers or the travelling public.

The amendment is also designed to cover unforeseen circumstances such as floods or other natural disasters. But such circumstances can be covered by borrowing or by the planned use of reserves, which can then be taken into account in the following year's plan and either made good by the planned use of reserves, by fare increases or covered by the grant determination for that year, as appropriate. So the amendment is not necessary to cover such circumstances.

I am bound also to point out that, as drafted, the amendment would not achieve very much. Clause 2(3) sets out the circumstances in which an executive is not required to make good a deficit. If an authority were able to make additional revenue grant to meet the deficit, there would be no deficit to make good. Under the Bill, an authority can make only one grant determination, and the amendment would not change the situation. The additional grant would therefore have to be within the single grant determination and not an extra grant. Perhaps the noble Lord will feel, on reflection, that the points I have made are valid and will not wish to proceed with the amendment.

Lord Underhill

The noble Lord, Lord Bellwin, is always persuasive but not always convincing. He says there is a planning process and that we should not disturb what is intended to be a stable and rational basis. But it must be rational not to have to use borrowing for unforeseen circumstances. The noble Lord repeated what was said on Second Reading, and it means compelling a local authority to go for borrowing in such circumstances. Indeed, as I listened to him I thought of another eventuality; there might be a disastrous fire resulting in the destruction of a great many vehicles. Action would need to be taken quickly. Surely it would be better for a grant to be made than go to borrowing. I do not know what noble Lords with experience think of such matters in terms of business management. I should have said that rather than encourage loose management, the amendment would prevent that, in view of the fact that a loose decision on borrowing could result in loose management. What is suggested in the amendment could be more economic. However, I shall, as the Minister suggests, look carefully at what he said. It may be that the amendment is badly drafted, and we shall take that into consideration in considering whether to return to the matter on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 [Preparation and submission of financial plans]:

[Amendments Nos. 11 to 15 not moved.]

6.38 p.m.

Lord McIntosh of Haringey moved Amendment No. 16:

Page 3, line 12, at end insert ("and (c) the provision of a properly integrated and efficient system of public passenger transport to meet the needs of their area, with due regard to the town planning and traffic planning policies of the Authority and to economy and safety of operations.").

The noble Lord said: The wording of this amendment will no doubt be familiar to noble Lords; it comes from Section 9(3) of the 1968 Act and it is the remainder of the obligation on transport authorities to provide the level of public transport service best suited to their areas. The public transport authorities will find themselves in a curious situation if or when the Bill is passed unamended because the TPP transport supplementary grant procedure will still continue, yet on top of it will be put the procedure under the Bill.

The requirements on an authority—and, through the authority, on the executive—are different in each case. Under the 1968 and 1969 Acts, all parts of transport strategy (including not only public transport but the policies for road development, traffic management, and so on) are contained underneath obligations which include the words of the amendment: the provision of a properly integrated and efficient system of public passenger transport to meet the needs of their area, with due regard to the town planning and traffic planning policies of the Authority and to economy and safety of operations". It is not intended that the procedures under the Bill should replace entirely the TPP procedure. It is intended that they should supersede those parts at present required in connection with bids for Government support for public transport alone. The TPP would, however,"— and again I am quoting from the document Proposals for Legislation on Public Transport Subsidiescontinue to contain any information which the county wished to provide on overall transport strategy …".

If I am wrong, no doubt we can be reassured on the matter, but as I understand it, that means that there are two different standards of judgment for different parts of transport policy. For roads policy, policies on traffic management, and all the other strands of transport policy, we have the conditions of the 1968 and 1969 Acts, and for public transport alone we have the very much more limited provisions of Clause 3(1)(a) and (b). They refer to, the general level of transport services and facilities …", and to, the general level and structure of the fares …", but do not in any other way refer to, for example, the town planning and traffic planning policies of the authority, or even—and one should have thought that this was an obvious point—to economy and safety of operations.

So in preparing a total TPP the authorities are proceeding, on the one hand, on a reasonably well-tried and tested series of objectives which, in a period of nearly four years, the present Government have not attempted to amend, and, on the other hand, on a very much more limited and unsatisfactory series of objectives which are set down by the Bill. I know that the final decisions on the timing of the TPP submission and on the submission under the Bill have not yet been determined, but it seems at least likely that the submissions will be proceeding at different times of the year and the local authorities will find themselves in the position of having a split personality in terms of both the timing of their submissions and the objectives on which the submissions are to be based.

The wording that is proposed in the amendment is not revolutionary. It has been accepted by successive Governments as providing the proper way to deal with transport strategy over a period of years. It cannot be said to apply any less to public transport than to any other part of the tranport policy of a local authority, and I suggest to your Lordships' Committee that it ought to be included in the Bill. I beg to move.

Lord Bellwin

I have not a great deal to say on the amendment. I suggest that if it were accepted it would distort the purpose of paragraphs (a) and (b) of Clause 3(1). As they stand, the paragraphs define the content of the plan which the executive is required to prepare, setting out its proposals for the three years ahead. The paragraphs achieve that by referring to the two basic elements which any transport plan must contain: proposals for the level of services to be provided, and the fares to be charged. As against that, the amendment would add an issue—the need to provide a properly integrated transport system—which I suggest is more a description of one of the considerations which should be taken into account than of the basic content of the plan.

This issue is largely a repetition of the duties which are already laid on both the executive and the authority by Section 9 of the Transport Act 1968 (to which the noble Lord referred) and Sections 1, 2 and 5 of the Transport (London) Act 1969. Those duties will of course remain binding, and I should have thought there was no need to refer to them in the present context. That is why we cannot accept the amendment. As to the point that the noble Lord made about the timing of the plan under the Bill, it will be similar to that for the TPPs. We expect to ask for them both to arrive by late July.

Lord McIntosh of Haringey

I wonder whether the noble Lord the Minister would agree that in the advice that has already gone out from his department it is suggested, with the laudable intention of minimising extra demands on authorities and executives, that the information provided in the plan—in other words, the more restricted information which is now required—should supersede that at present required in connection with bids for Government support. So, if I understand the noble Lord correctly, those proposals, which are not of course final, will now themselves be superseded by the statements that he is making today.

Lord Bellwin

What I am saying today is the "latest stuff", if I may put it that way. I think that it is basically correct. If in due course I have any cause to feel otherwise, I shall immediately inform the noble Lord.

Lord Tordoff

In supporting the Amendment, I would point out that line 5 on page 3 of the Bill refers to the general level of transport. In a sense it is a two-dimensional requirement. The amendment adds a third dimension in terms of the integration of transport, which is not necessarily contained within Clause 3(1)(a).

Lord Underhill

In supporting my noble friend in his amendment, I should like to take up a point that the Minister commented upon in his reply, when he said that there is no need for the amendment because the points are covered by Section 9 of the 1968 Act and the appropriate section of the 1969 Act. I wonder whether that means that the Minister will be prepared to accept a later amendment which proposes that those duties laid down in the 1968 and 1969 Acts shall be taken into consideration? That is what the Minister is implying. If the Minister says that these points are covered, surely we ought to ensure that the executive, in preparing the plan—which according to the clause it has to do—ought to take into consideration the duties laid upon it by the provision of the two earlier Acts that have been mentioned.

The amendment is proposing that the executive must pay regard in the plan to a properly integrated and efficient system of public transport to meet the needs of the area. That is a duty that is laid down in the 1968 and 1969 Acts. I hope that the Minister is not saying that there is no need for the plan to have regard to those points, because a duty is placed upon the executive and the authority to do so. Surely we ought to make it absolutely clear that in preparing the plan regard must be paid to those points, and my noble friend's amendment lays this down in terms:

the provision of a properly integrated and efficient system of public passenger transport …". The amendment then goes on to refer to questions of town planning. Along with the noble Baroness, Lady Fisher of Rednal, last Tuesday I had the pleasure of going to Newcastle to look at the Metro system and to see how it is a real integrated system and how regard is paid to town planning consideration. We were able to see how the Metro system and the bus halts fit in with the planning of vast shopping precincts in the area. Time will not permit me to elaborate, but it was most interesting to learn how planning had to be taken into consideration by the Tyne and Wear authority when it planned its Metro system, with integration of tickets and everything else on bus, rail, and the Metro. Town planning was one of the serious considerations that had to be taken into account. There is no reference to that consideration in Clause 3(1), and that is why I believe we ought to support the amendment.

Lord Bellwin

Rather than mention it now, I shall write to the noble Lord and send him the chronology of the planning process in a normal year. It might help him in considering what he might later want to do about his proposal—that is, assuming that he does not want to do something about it this evening, which of course he may decide to do. I think that if I were to do that, it would be helpful. I hear what the noble Lord says, and I, too, have been to the Tyne and Wear Metro. Indeed, I opened part of it myself. I found it very impressive, and I like it very much. I hope that it proves to be as successful over the long term as it looks as though it might be over the short term, but only time will tell as to that. I feel that I cannot help the noble Lord any further on this matter. I have explained why we cannot accept the amendment, but clearly the noble Lord will want to consider further what I have said.

Lord McIntosh of Haringey

In view of what the Minister has said on more than one occasion on this amendment, and in view of what my noble friend Lord Underhill has said, it would be better if we considered how to put a better amendment at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.51 p.m.

Lord Teviot moved Amendment No. 17:

Page 3, line 33, leave out ("potential users").

The noble Lord said: I beg to move Amendment No. 17. This amendment reflects the concern that I expressed at Second Reading regarding the details of Clause 3. What I had in mind is the inconsistency that I find both within the Bill, and between the Bill and the White Paper Public Transport Subsidy in Cities (Command 8735). In the Bill itself there are three different ways in which "benefits" are spelt out. We have been talking about benefits this afternoon but this is in a different context. If I take some time in trying to make the position clear, it is because this measure was introduced to achieve clarity. The whole object of the exercise will be set at nothing—before the ink is dry—if a variety of rules is set for the interpretation of "benefit".

At this stage, I should like just to point out the different wordings relating to benefits, before I go into each of them; namely, Clause 3(3), page 3, line 24, but if the plan is formulated on that assumption it shall be accompanied by particulars showing the benefits expected to accrue from the grants". Then we have in Clause 3(4): The plan shall be accompanied by estimates of … (c) the benefits to potential users of those services and facilities". Clause 4(2)(b) speaks of: estimates of the extent to which particular benefits, specified by the authority, would accrue to the public at large, or to any section of the public so specified". How do these ideas compare with the White Paper?

The White Paper clearly intends "benefits" to be seen in the widest sense. It says wherever possible benefits should be specified, measured, and assessed. The words of paragraph 8 are: There must be general transport benefits such as"— so these are only examples— the provision of services in areas or at times that could not otherwise support a viable public transport service; or the alleviation of road congestion through the attraction of drivers from their cars. Wherever possible, such benefits should be specified, measured and assessed".

Then, in paragraph 21 it says: in assessing value for money, account will be taken of the benefits to users of public transport and to other road users in terms of reduced congestion and accidents". The White Paper doubts the possibility of measuring all the benefits of subsidies, and this is clearly true. That is why the Bill speaks of "estimates" and "benefits expected to accrue". However, there can be no doubt that the logic of Government thinking is to take the broadest possible view.

The wording of the Bill follows this wide interpretation with one exception. That is the limiting words—which this amendment seeks to remove—contained in Clause 3(4). In the Bill, the first reference to benefits is in Clause 3(3). The provision is enabling; it allows the executive to assume, when preparing its financial plans, that it will receive financial support.

The executive is then required—having made that assumption—to provide particulars of benefits expected to accrue from the grants made by the authority. It is clearly for the executive to decide what benefits can be foreseen—and there is no limitation whatsoever on the range of benefits to be taken into account. The initiative is with the executive and no-one—no court of law—could interpret this clause as implying any limitation on the benefits that may be taken into consideration.

Turning to Clause 4(2), we find that the authority may require estimates from the executive of benefits which would accrue to the public at large, or to any section of the public specified". It is again difficult to conceive any potential benefit which would not be covered by this form of words. In contrast, Clause 3(4) specifically requires the executive to give "estimates"—which word presumably has the same meaning as "particulars of benefits expected to accrue"—"of the benefits to potential users".

It is those last three words which are totally unjustified in the context of the White Paper, and this part of the Bill taken as a whole. There is no logic in considering benefits to potential users only, when Clauses 3(3) and 4(2)—following the intentions of the White Paper—encompass "benefits" on the widest possible basis. It is true that, while the provisions of Clauses 3(3) and 4(2) are enabling, the circumstances they provide for are such that—in the real world—it is impossible to conceive they will not apply. All sides of the Committee—and all speakers in another place—have recognised that in this day and age at least some subsidy will be necessary for our bus services. Therefore, it is inevitable that these clauses will in practice be operative. It follows that it is pointless, and confusing, to limit the requirements in Clause 3(4) to benefits to potential users of services and facilities.

The word "potential", in this context, is not only ambiguous but confusing—and I should like to illustrate to the Committee why this is so. Recently, when I was discussing this amendment with two senior executives of different organisations—people of considerable experience in the industry and in public affairs—they came up with totally different interpretations of the word. So we have no clarity of meaning. The word "potential" is obviously something we have to clear up; and at the moment I can see no other way but to ask the Committee to leave it out because it is used in a context which distorts the general intentions of the legislation.

It must further be noted that it is only the limited form of benefit—to users—to which the authority must pay particular regard, under Clause 4(3). The word "particular" is not exclusive, but it places an unfortunate emphasis on a form of words—that is, "benefits to potential users"—which is at variance with the Government's avowed intentions. So, as at present worded, paragraph (c) of Clause 3(4) is a potential source of confusion, and misinterpretation, in any litigation which may arise, in the application of this proposed Act.

Unfortunately, litigation must surely be expected before the valuable provisions set before us have been sufficiently interpreted to allow the stability which is so vital to the bus industry. We must not confound confusion; the words "to potential users" should be left out. I consider the amendment to be very important. It is not political. It does not go against the spirit of the Bill. I hope, and believe, that it goes some way to clear elements of confusion. I beg to move.

Lord Bellwin

Let me first say that the Government entirely accept that wider considerations of the kind described by my noble friend ought to be—and indeed must be—taken into account when planning the provision of transport services. But our difficulty in accepting this amendment is that Clause 3(4) is concerned with the duty of the executive to submit precise estimates of those factors which are directly related to the services which they provide: their cost, the level of demand for them and the benefits which they produce. The wider considerations are different in kind from this and would be largely outside the control of the executive. We do not therefore believe that it would be appropriate to widen Clause 3(4).

I would remind the Committee, however, that under Clause 3(3) the executive is required, when submitting proposals for revenue support, to accompany them with particulars of the benefits expected to accrue from such support, as indeed my noble friend said. The reference to benefits in Clause 3(3) clearly includes consideration of the kind of factors aimed at in the amendment, in so far as it is within the power of the executive to take them into account. The authority can, under Clause 4(2)(b), ask the executive to estimate other specific benefits. My noble friend went into considerable detail and I want to read carefully what he said. I can make no commitment, as I am sure he knows. I hope that even the few remarks that I have made may reassure him that the wider considerations will be taken into account. But I do assure him that I shall want to read carefully what has been said and to see whether, despite what I have said, it is not covered, At the moment I cannot accept the amendment, for the reasons which he knows.

Lord Teviot

I thank my noble friend for what he has said. After the long deliberations we have had this afternoon, I will not delay your Lordships because I am sure you will want to go and eat dinner. I will read what my noble friend has said, just as he will read what I have said; and, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas of Chilworth

Perhaps it would be for the convenience of the Committee if I suggested that we should now pause in our consideration of this Bill and adjourn for one hour for dinner, thus allowing the other business of the House to continue. If that meets with the agreement of the Committee, I beg to move that the House be now resumed.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.