Transport Bill

HL Deb 17 March 1983 vol 440 cc835-85

3.36 p.m.

Report received.

Clause 1 [Interpretation of Part I]:

Lord Underhill moved Amendment No. 1: Page 2, line 9, leave out from ("Executive") to ("and") in line 11.

The noble Lord said: My Lords, I hope it will be for the convenience of your Lordships to take with Amendment No. 1 Amendment No. 3. Before moving Amendment No. 1, I would comment that it is noticeable that, despite the fact that there are 36 amendments on the Marshalled List, not one is in the name of the Government. It may be argued that this is because the drafting has been so exemplary that there is no need for any Government amendments, but I would remind your Lordships that in Standing Committee in another place no clauses beyond Clause 2 were dealt with. Therefore, it remains for your Lordships to consider the amendments which are on the Marshalled List. Your Lordships may feel that there are other reasons why there are no Government amendments.

The first amendment to Clause 1 takes out the reference to "revenue grants" including grants made in respect of reductions in fares for children. The purpose of Amendment No. 3 is to insert in Clause 2 that the combined charges, which shall be not less than the combined revenues of an executive, shall exclude grants made in respect of children's reduced fares. Your Lordships may recall that a similar amendment relating to the exclusion of children's fares, but in a different context, was debated during the Committee stage and therefore I will not repeat all the detailed arguments but will simply mention a few important points.

Reduced fares for children are essential to give opportunities for children to use public transport for visits of an educational nature to museums, places of interest and similar visits; and also to enable children to participate in recreational events. As was emphasised by a number of your Lordships at Committee stage, special fares are needed to assist the poorer families, and without the reduced fares for children many families will find it virtually impossible to travel together as a family. May I say that we are talking about travel within the area of a passenger transport authority and not throughout the whole of the country.

I must also remind your Lordships that travel to school under three miles is not subject to free school transport and just a fraction of a mile can mean that travel costs to and from schools can be heavy for many families, particularly where there are a number of children. Some transport executives charge a flat fare for children's travel anywhere in the area and I can assure your Lordships that those executives, from their experience, are able to say what a great boon this has been, not only for children but for the families as a whole.

Although in a different context I wish to deal with the arguments put forward by the Minister at Committee stage, the noble Lord, Lord Lucas, said that the reduced fares for children would be in the general fares structure. What we are talking about are grants for special reduced fares, and I think they should be treated as such on social grounds and not in the transport fares structure.

The Minister also said that having received its PEL—its protective expenditure limit—it was up to the authority to make the distribution so that nobody was disadvantaged. But that ignores the purpose of the Bill. The Secretary of State may advise on modifications of the three-yearly plan, and if the PEL is as determined by the Secretary of State's guidance, that could put the executive and authority in the position of having to consider whether to increase fares, cut services or possibly change the basis of reduced fares for children.

As your Lordships are aware, concessions for the aged, the blind and the disabled are, rightly, excluded from the effects of the Bill—they are not dealt with as part of revenue grants—and therefore they do not affect the PEL. The amendment seeks to secure the same position for reduced fares for children. The noble Lord, Lord Lucas, said that it was not for the Secretary of State to say whether a subsidy was too low or too high. That ignores the fact that the guidance given by the Secretary of State will determine the decision on this matter.

The Minister went on to say in Committee that most noble Lords who had spoken had missed the point in that the Secretary of State had no direct responsibility for determining fare levels. I say with respect to the noble Lord that he missed the point. Although he said that he had no direct responsibility, in fact he has responsibility in that he can modify the plan, and the authority is expected to take note of that; or he can determine the revenue grant level, of which, again, the authority is expected to take note, under the threat of possible court action.

The Minister then commented that emotion was being brought into the debate, saying that the emotion I was introducing was called children. It had nothing whatever to do with children, he added; it had to do with money and how it was spent. But I believe that is standing words on their head. We are discussing grants for children's fares and whether such grants should be part of the combined charges; in other words, that they should not be involved in the PEL. The Minister then said that reduced fares would be grant-aided within the terms of the PEL, but when asked by my noble friend Lord Mishcon to give an undertaking that any grant for children's reduced fares would be met in full, he answered that no guarantee could be given.

Emotion does not come into the argument. Nor does commercial judgment. It goes beyond that. It is the realisation by a local authority—which it is free to decide to do or not—that reduced fares for children meet an urgent social need and therefore should be outside the PEL. That is the purpose of the amendment, which I beg to move.

Lord Lucas of Chilworth

My Lords, we had a long discussion on this issue in Comittee, when I said that a specific reference in Clause 1 to reduce fares for children not only made it clear that they were included within revenue grants made by authorities, but also confirmed the power to pay grants for children's fares. That surely is a helpful and positive step. Some authorities have recently had doubts about the legality of payments for reduced fares for children which they have traditionally made, and a variety of authorities make different arrangements for fare reductions. As there is doubt about the law relating to subsidies, it is appropriate that the Bill should clarify matters. The first of the two amendments we are discussing, in removing the reference to children's grants from the definition of revenue grants, would, once again, cause uncertainty about authorities' powers to provide them, and that could not be in anybody's interest.

As the noble Lord, Lord Underhill, reminded us, we must remember as we consider this issue that we are not talking about payments made by LEAs in relation to journeys to school. They are for other journeys. In London and most metropolitan counties, reduced fares for children are part of the overall fares structure and provision for their funding is included in the general subsidy which the authority pays to the executive. While the noble Lord described this as a boon to families—and while one would not deny that it is quite helpful—children's fares rarely cover their total costs, even if the bus is nearly full. But they are a major factor in the subsidy policies of authorities and cannot be excluded from decisions on the overall level of subsidy.

Subsidies for children's fares are part of the general subsidy. They are eligible for Government support through the transport supplementary grant, and I reiterate that it is because children's fares are part of the overall structure, included as part of the general subsidy from the authority to the executive, that we believe it right and proper to include them in the PEL.

The second amendment would exclude grants for children's fare reductions from the combined charges. I think it is the intention to exclude the costs and revenues from the duty to break even. If so, the Government could not agree to weaken the financial duty in that way; we could not leave executives able to make huge losses on child fare reductions year after year. That would impair the whole concept of the financial discipline, which is what the Bill is about, and would imply that Parliament in effect condoned profligacy and poor financial management. Both in Committee and today I have indicated why the Government believe it is proper to include the grants within the PEL, and for that reason I must resist the amendment.

Lord Pitt of Hampstead

My Lords, I had hoped that the Minister would have improved on his performance in Committee, but I am afraid he has not; he has simply read out his brief again. He has missed the point. We are trying to safeguard children's fares. If there is a certain amount of money available and it is spent on X, it cannot be spent on Y, and therefore if children's fares are included in the PEL, some authorities will feel that the answer is to subsidise other services rather than provide cheap fares for children.

I do not know how other noble Lords feel about this, but I believe that providing cheap fares for children is of extreme importance, and therefore they should be safeguarded. That is the whole point of the amendment. The Minister says that school journeys are safeguarded. They are if they are over three miles, but not otherwise; if they are 2¾ miles, they are not safeguarded. What we are trying to do, and what I had hoped the Minister, together with his advisers, would have thought about between Committee and now, is safeguarding children's fares so that they are not part of the PEL, so that authorities—just as they provide fares for the old and disabled and treat them separately—would provide them. The PEL would be concerned with the rest of the subsidy and would play a part in the management of the transport service, but children's fares would be excluded. The Government seem to have missed that point at least or refused to take it on board.

Lord Mishcon

My Lords, I have one quarrel at the outset with my noble friend Lord Underhill—a most unusual event. He took the credit for being accused of being emotional in the last debate. That accusation was made by the noble Lord the Minister. I claim that I was the one who was accused of being emotional and I resent the fact that the Minister's charge was taken away from me and adopted by the noble Lord, Lord Underhill. It is perfectly proper to be emotional about this matter, without overdoing it. Your Lordships are never happy recipients of over-indulged emotionalism. But if it is accompanied by common sense, your Lordships, regardless of party, are usually prepared to listen.

This is an important matter. May we look at the kind of authority to which this could well be a problem. It is much more likely to be an authority which contains a majority of poorer citizens. As I ventured to say at the Committe stage, in the poorer authorities there will be rather more children who do not have the ability to ride with their parents in a family car. We dealt with the family as a unit at the Committee stage. There are few authorities throughout our Kingdom which do not have a percentage of families whom we would call poor families. The last time that this matter was discussed, the family unit, travelling together, was looked upon by various parts of the House as of great value nationally and also, one might say, spiritually. Quite apart from the point which has already been made about school journeys of under three miles and the social journeys which might be made, I should like to address myself to the kernel of the argument, as I see it, and as I hope your Lordships see it. The Minister says that the Government do not prevent authorities from putting into the budget such costs as authorities believe to be necessary for children's concessionary fares. That is absolutely right. However, when I put to the Minister at the Committee stage the proposition that the structure of the Bill is based upon the Government taking a decision about the total transport subsidy and then dividing that figure among the various areas, having regard to their budgets and plans, I thought he agreed that that is indeed the structure. There is, therefore, a ceiling and a division of that figure among the various authorities.

I put it to the noble Lord the Minister at that stage—I did not get a very clear reply from him, perhaps because this point came near to the end of the debate—that maybe he could undertake that, whatever was put in by way of concessionary fares (I had in mind the poorer authorities) would be admissible expenditure in full within the PEL. The Minister said he could not guarantee that 100 per cent. of the budget would be admitted for PEL purposes. If you do not exclude the children's allowance, this means that if that allowance is put within the PEL the budget must be cut down to meet the overall limit. Quite apart from whether or not the plan is good in all its aspects, there has to be a ceiling for the region because of the overall limit. Therefore, the kind of authority I am asking your Lordships to consider which will need the children's concessionary fare more than other authorities will be restricted in its PEL. From the point of view of that kind of authority, it will not necessarily be able to spend money on children's concessionary fares, either because of other priorities or because the Secretary of State has seen fit, when looking at its budget, to decide that part of the children's concessionary fare cannot be admitted—not because he has examined the situation in the area but because the total must come within his overall limit.

The old, the sick and the disabled have been taken out of this, for the reasons which I have just advanced. That leaves the children. I can be accused of being emotional and, if the amendment is taken to a Division, I can be accused of casting an emotional vote for children when I walk through the Lobby; but I do not suppose many noble Lords will feel that to be a wrong and offensive walk to make if the Government still resist the amendment.

3.58 p.m.

Lord Lucas of Chilworth

My Lords, if I may come to the point made by the noble Lord, Lord Pitt of Hampstead, in a moment, I say straight away to the noble Lord, Lord Mishcon, that I am very sorry to have been the person to induce a quarrel between the noble Lord, Lord Mishcon, and his noble friend. Certainly that was never the intention.

The noble Lord, Lord Pitt of Hampstead, says that it is important to safeguard children's fares. Of course we have to do so. May I try to answer both of the points which have been made. The way in which children move around, with or without their parents, is important. Let no noble Lord believe that we do not recognise the importance of the family unit. Many families do not have motor cars. Many children travel with their parents because they are too young to travel on their own, We pay due regard to the importance of this point. If I may take the kind of authority which the noble Lord Mishcon, describes—one with a larger proportion, perhaps, of poor families than other authorities—it would be quite wrong for the Government to make a decision about these families. We heard during the Committee stage about the Government taking a decision but not knowing the position because they are not directly involved in the area. That is why it is for the authority to make the decision as to how the subsidy should be spent. Their subsidy bid in preparing the PEL would take account of that. It would take account of that because it is part of the figures which would be offered to the Secretary of State in consideration of the PEL. Of course there is an overall limit, and of course the Government have to take account of the national over-view; I believe that the noble Lord, Lord Mishcon, recognised that. It does not mean to say that, because the over-view would restrict the totality of money, everybody faces a pro rata reduction. It does mean that, within the totality, regard has to be paid to the plans. Those which have a higher proportion of needing people—of children wanting subsidies—would be taken into account. But when the subsidy is arrived at, it is for the authority to decide exactly how it should be used. If the authority believes, because of the situation outlined by the noble Lord, Lord Mishcon, that there is a very strong social need—such as an environmental need, in that these families live far from the shopping centre—it is then for that authority to use more or less of its subsidy for that reason, if it feels that this is justified.

Lord Mishcon

My Lords, if I am interrupting the noble Lord, Lord Lucas of Chilworth, at an inconvenient moment, I apologise to him; but I thought that he was moving on to another point. This aspect is so important that I make no apology for intervening but merely thank the noble Lord for his courtesy in allowing me to do so.

The noble Lord keeps on saying that it is not for the Secretary of State to decide what is the need in the area in regard to children's concessionary fares and that it is for the authority to decide. If the noble Lord admits that, what is his difficulty in giving an undertaking that, where the children's concessionary fares form part of the budget which is submitted to him, the Secretary of State will allow that figure 100 per cent.?

If the noble Lord is saying that it is not for the Secretary of State to judge that amount but for the local authority, and if the noble Lord says to me and to your Lordships, "Yes, it is for the authority and we will allow that as to 100 per cent., and will give an undertaking to do so", then I will not waste your Lordships' time. But if the noble Lord does not do so, then his point is a false one, because he is saying that it is for the authority to decide, and is then saying that it is for the Minister to cut the figure if he sees fit.

Lord Lucas of Chilworth

My Lords, the noble Lord, Lord Mishcon, knows very well that I cannot give an undertaking that children's concessionary fares will be allowed in full. It is the total subsidy that is looked at; how that subsidy is spent is entirely for the local authority. I have said already that children's fares do not meet their full cost. If I were in commercial business right now, I might suggest, "Why not load as much as I can onto the children's fares, because after all, the Secretary of State is going to pick that up, and then I can use my subsidy somewhere else?" The whole point of this is to achieve a balance of expenditure. How it is spent is the responsibility of the local authority to decide in the light of its local requirements.

It is for the authority to make proposals in regard to children's fares, in association with the total plan. It is for the authority to decide finally, when it determines the grant and approves the plan, exactly how that is to be spread.

4.5 p.m.

Lord Sefton of Garston

My Lords, we should be grateful to the noble Lord, Lord Lucas of Chilworth, for clearly establishing the thinking—if there is any—behind the Government's intention. It has been unkindly suggested to me that, contrary to the tradition of this Chamber, the Government are not prepared to accept any amendments—however reasonable and however minor—to this Bill purely because of the need or desire of the Government to get this Bill through by a certain date. If that is true, it is regrettable.

I do not believe that I have misunderstood the noble Lord opposite when I say that he is saying, in effect, that the question of priorities between children and the rest of the community in a local authority's area is the responsibility of the local authority and not of central Government. If that is what the noble Lord is saying, then we should look at this matter against the background of the Government's attitude to the disabled, the sick and other persons whom the Government have excluded from the PEL.

If we are to persuade the Government to make a move and to accept a simple amendment (which I am assured by the nodding head of the noble Lord, Lord Bellwin, is something that the Government would do if the amendment was reasonable and had nothing to do with timetables), then we have to demonstrate that the essential relationship between schoolchildren and central Government is exactly the same kind of relationship as that between central Government and the other disadvantaged members of our community, such as the disabled or the sick, who are excluded from the PEL.

I do so on these grounds. One of the major items of expenditure of central Government is in the field of education. They demonstrate that, in the educational field, they play an important role. Different Governments have made several representations about the kind of education that local authorities should practise. One would not say, even stretching one's imagination as far as it can go, that local authorities had been left completely free to make their own decisions in regard to education. So the closeness of the relationship between central Government and children has been pretty well established over the years.

If one examines the question of need in regard to children, and compares that need with the need of disabled people and others not included in the PEL, one finds that there are exactly the same circumstances. In a place such as Merseyside, this situation is exacerbated because the incidence of the number of children on the household is perhaps one of the factors which occasions more hardship to the community than any other single factor, including disabled people. If one examines the efforts of central Government, in particular in a place such as Liverpool, where the boundaries between one social stratum and another social stratum are so close, one realises that it is vitally important that children move freely across those areas, most of which are under the limit allowed for free travel to schools. There must be an incentive to children to move across them if we are to establish the right kind of educational system in a place such as Liverpool.

If I may give just one example, most people think of Toxteth as being a fairly run-down, highly congested, disadvantaged area of Liverpool, but nothing could be further from the truth. Toxteth consists, in the main, of two areas. The first is the area that most of the country knows about; but the other is an extremely affluent, wealthy area around Sefton Park. If anything is to be done about the social mix in that area, and if there is to be any hope in the future for the community in that kind of area, then the movement of young children across boundaries of the three-mile limit, and from one social area to another in order to attend the same school, is of vital importance.

I am quite certain that the Government will not accept anything in respect of this amendment. But if one thing is certain, it is that if the Front Bench do not accept this amendment then everyone else on the Benches opposite, if they really meant it when they voted against the Government on the question of school travel (when the Government were defeated and had to change their mind), should recognise that the principles here are precisely the same. We are talking here about the young children of this country, who should be removed from having to have their priority established between a general subsidy for fare-paying passengers and the educational needs of this country. It is vitally important, The principle is the same.

I would conclude with this. No one could accuse the Archbishop Worlock of Liverpool of any political axe to grind, and he has made representations to me that in this kind of situation this Bill should not include in the PEL young children, it should not include people who are needy, it should not include this disadvantaged social strata; in this Bill there should be an exception made and they should be taken out of the PEL in the same way as other disadvantaged people are already.

Lord Lucas of Chilworth

My Lords, the noble Lord, Lord Sefton, appeared to me to have momentarily—I am quite sure it was only momentarily—lost sight of the purpose of this Bill. The purpose of this Bill is to bring some degree of control on the expenditure upon transport by the metropolitan authorities. Your Lordships will remember that my noble friend said at Second Reading and during the Committee stage that expenditure in the current financial year was estimated at about £400 million, and for the coming financial year there was a total expenditure of £700 million anticipated. If we added those elements that the noble Lord, Lord Sefton, has just outlined to us—a whole wide-ranging group of people—that £700 million could be even larger. That is the burden that fell upon the ratepayers, and that is the burden which the ratepayers felt unacceptable.

I think it is interesting to note that since the passage of this Bill local authority estimates—which, as I said, were £700 million—have fallen quite dramatically. In other words, they have been able to bring to bear upon their finances a harder and harsher mind, with the result that these expenditures are now likely to be around £550 million.

Lord Mishcon

My Lords, if the noble Lord will forgive me, is he quite conscious of his words—"a harder and harsher mind"? Does he wish that to be the attitude of the Front Bench in this matter?

Lord Lucas of Chilworth

My Lords, I am quite happy for the words "harder" and "harsher" to remain when it comes to monetary matters. When it comes to looking after other people's money, a hard and harsh look has to be taken at expenditure. A lot of businesses have been doing that for a number of years, and there is nothing wrong with that. Yes, I am quite happy about that.

The noble Lord, Lord Sefton, took us back to the principles of transport involved when we discussed education. The principles are quite different—absolutely different. I have said that there can be no good reason under the terms of this Bill for excluding the grants for children's fares from the financial duty. That duty of course covers all revenues and all costs, including, for example, the cost of providing concessionary fares. I am quite happy to repeat "harsh" and "hard" when looking at that duty. It would, therefore, totally confuse that financial duty if we were to accept these amendments.

Lord Tanlaw

My Lords, before the noble Lord sits down, I wondered, on a technicality, this being Report stage, whether the noble Lord should have prefaced his last remarks with the words, "with the leave of the House". I am not entirely clear whether or not he should be able to speak without that formality. I always enjoy listening to the noble Lord the Minister, but if we are to get on perhaps he could confirm that he was a little out of order.

Lord Lucas of Chilworth

My Lords, with the leave of the House, of course the noble Lord, Lord Tanlaw, is absolutely right. Perhaps your Lordships will forgive me on this occasion and put it down to my being a comparatively new boy in this position.

Baroness Fisher of Rednal

My Lords, it was interesting to hear what the noble Lord said about the hard, harsh look. Before local government reorganisation, local authorities also had to look at the services provided by public transport. They had to look at them very seriously because of the amount of money they were going to raise in rates. But I never heard of one large municipal authority changing its mind regarding children's fares. I stand to be corrected, but I do not think I heard of one large local authority that decided to change its policy on cheap fares for children.

It is, I suppose, something which is inculcated in the British system that we feel that there should be some help for parents with young children. The Government seem to be going all against what is the natural pattern. If you have children and you take them to a carnival or a festival, you find that the admission for adults is X amount and, for children, half price; if you take them on the carnival fairground, it is X amount for adults and half price for children; and if you are booking a holiday abroad you will find in all the brochures that it is X amount for adults, half price for children. In fact, there are now many travel brochures which offer free accommodation and free travel for children on holidays abroad. These people have to look at the facts with a hard, harsh look, because they operate under a business system; but, nevertheless, they operate half fares for children, and in many cases for travel abroad during the season they will offer even free travel and accommodation for children.

It seems to me strange that the Government should take a line which is contrary to what is accepted practice in the country, contrary to what local authorities used to do, and even contrary to what is done by business people, who have to study the hard, harsh facts. There was a great body of opinion in the country which felt, when the Government decided to raise the school-leaving age from 14 to 16, that that age group from 14 to 16 should travel free. Most local authorities would not agree for that subsidy to go on to 16 years of age, though many ratepayers and many taxpayers thought that that was not equitable. It is not an emotional issue. It is not an issue about hard, harsh statistics. It is something which is recognised throughout the country as something we do for young people and for children in particular. For this Government who believe in the family, to act contrary to what is accepted practice in this country is, to me, absolutely remarkable.

Lord Underhill

My Lords, your Lordships will have noticed the degree of support there is in your Lordships' House for these two amendments. Although I am sure we all agree that we must keep to procedure, I am delighted that the noble Lord the Minister was able to make his third intervention, because we now know the attitude of the Government on this question of the hard and harsh look.

At some time during the course of this Report stage we may want to go further into the question of figures. Let us take a hard and harsh look at the figures, because figures have been bandied about. It has been said that a 75 per cent. increase in subsidies has been demanded by these authorities. I have figures which, in real terms, means 18 per cent., comparing their TPP for next year with their position for 1982–83. We have heard that £700 million has been asked for, but that includes £141 million for concessionary fares for pensioners. Are we going to take a hard and harsh look and tell the authorities to knock out concessionary fares for pensioners?

I am one of the lucky ones. I get a British Rail concessionary fare. Many of your Lordships have local authority concessionary fares. Let us take a hard and harsh look, talk about economic realities, and cut out the pensioners fares as well. That is what it means if we are to take a hard and harsh look.

Several noble Lords

No.

Lord Underhill

Noble Lords may say "No", my Lords, but it is up to each authority to decide whether or not to give concessionary fares. It will be up to local authorities to decide whether to give concessionary fares for children.

The noble Lord said that to delete the words from Clause 1 would cause uncertainty. I hope the House will support the principle of the second amendment by voting for the first one. I guarantee that I will then come back on Third Reading and put down another amendment which will show that it is legal for councils to give concessionary fares for children. The Government can do that themselves. Therefore, we can decide the principle by supporting these amendments and adjust the position on the other question, if there is any doubt, when we come to Third Reading.

I remind your Lordships of what has been said by other noble Lords. Yes, local authorites will be able to decide what they will do. It will be a question of priorities. But if the PEL is to take into consideration grants paid for reduced children's fares, the executive and the authority will have a problem to face. They will have to take a hard and harsh look if the guidance determined by the Secretary of State means a large cut in the subsidy that they are allowed to make. Make no mistake about it, the decisions will have to be taken. That is what the Government want—cut services, increased fares, or cut out allowances for children.

A noble Lord

Increased efficiency, my Lords.

Lord Underhill

Of course, my Lords, increased efficiency, but we will come back to that at another stage.

I mentioned in Committee that three authorities had conducted their own voluntary reviews and had engaged consultants to do them. The suggestion that the seven authorities do not want to encourage efficiency is, frankly, nonsense. With all due respect to the Minister, we cannot put the question of tackling efficiency against the issue that we have raised today. Of course, we want efficiency.

In supporting these amendments your Lordships will be helping to safeguard children's fares if the Secretary of State is to take a hard and harsh look and cut the PEL to a figure where councils have to take serious decisions. They cannot tackle the situation of old age pensioners, because that is outside, and we are glad that is so. We want children's fares to be outside so that they will not have to be dealt with if the local authority has to take a serious decision. Whether your Lordships vote on emotion, on common sense, on humanity or whether your Lordships vote for using public transport for social considerations in an efficient way, I hope that your Lordships will support these amendments.

4.24 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 68; Not-Contents, 112.

DIVISION NO. 1
CONTENTS
Airedale, L.	Jeger, B.
Aylestone, L.	John-Mackie, L.
Beaumont of Whitley, L.	Kagan, L.
Beswick, L.	Kennet, L.
Birk, B.	Kilbracken, L.
Bishopston, L.	Kilmarnock, L.
Boston of Faversham, L.	Lawrence, L.
Briginshaw, L.	Leatherland, L.
Brockway, L.	Listowel, E.
Byers, L.	Llewelyn-Davies of Hastoe, B.
Cledwyn of Penrhos, L.	Lloyd of Kilgerran, L.
Collison, L.	Longford, E.
Cooper of Stockton Heath, L.	McNair, L.
Cudlipp, L.	Mar, C.
David, B.	Mishcon, L.
Denington, B.	Molloy, L.
Diamond, L.	Oram, L.
Elwyn-Jones, L.	Paget of Northampton, L.
Evans of Claughton, L.	Peart, L.
Fisher of Rednal, B.	Pitt of Hampstead, L.
Foot, L.	Ponsonby of Shulbrede, L. [Teller.]
Gaitskell, B.
Garner, L.	Prys-Davies, L.
Hanworth, V.	Rathcreedan, L.
Hatch of Lusby, L.	Rochester, Bp.
Hooson, L.	Rochester, L.
Ilchester, E.	Sefton of Garston, L.
Jacques, L.	Segal, L.

Stedman, B.	Wells-Pestell, L.
Stewart of Alvechurch, B.	White, B.
Stewart of Fulham, L.	Wigoder, L.
Strabolgi, L.	Wilson of Langside, L.
Tanlaw, L.	Winstanley, L.
Underhill, L.	Wootton of Abinger, B.
Wallace of Coslany, L. [Teller.]

NOT-CONTENTS
Ailesbury, M.	Lucas of Chilworth, L.
Alport, L.	Luke, L.
Ampthill, L.	Lyell, L.
Auckland, L.	McAlpine of Moffat, L.
Avon, E.	Mackay of Clashfern, L.
Balfour of Inchrye, L.	MacLehose of Beoch, L.
Bellhaven and Stenton, L.	Malmesbury, E.
Bellwin, L.	Mancroft, L.
Beloff, L.	Marley, L.
Belstead, L.	Merrivale, L.
Boyd-Carpenter, L.	Milverton, L.
Burton, L.	Monk Bretton, L.
Campbell of Alloway, L.	Montgomery of Alamein, V.
Cathcart, E.	Morris, L.
Chelwood, L.	Mottistone, L.
Cottesloe, L.	Mowbray and Stourton, L.
Cox, B.	Norfolk, D.
Cullen of Ashbourne, L.	Norrie, L.
Dacre of Glanton, L.	Northchurch, B.
Daventry, V.	Nugent of Guildford, L.
Davidson, V.	Orkney, E.
De Freyne, L.	Orr-Ewing, L.
De L'Isle, V.	Pender, L.
Denham, L. [Teller.]	Porrit, L.
Derwent, L.	Portland, D.
Dundonald, E.	Renton, L.
Ebbisham, L.	Rugby, L.
Eccles, V.	St. Davids, V.
Elles, B.	Saint Oswald, L.
Elliot of Harwood, B.	Salisbury, M.
Elton, L.	Sandford, L.
Erroll, E.	Sandys, L.
Ferrers, E.	Selsdon, L.
Fortescue, E.	Shaughnessy, L.
Fraser of Kilmorack, L.	Skelmersdale, L.
Gainford, L.	Somers, L.
Geoffrey-Lloyd, L.	Spens, L.
Gisborough, L.	Stamp, L.
Glanusk, L.	Strathcarron, L.
Glasgow, E.	Strathspey, L.
Glenarthur, L.	Sudeley, L.
Glenkinglas, L.	Suffield, L.
Gore-Booth, L.	Swansea, L.
Gridley, L.	Swinfen, L.
Hailsham of Saint Marylebone, L.	Swinton, E. [Teller.]
	Taylor of Hadfield, L.
Harmar-Nicholls, L.	Terrington, L.
Henley, L.	Teviot, L.
Hives, L.	Teynham, L.
Hunt of Fawley, L.	Trenchard, V.
Hylton-Foster, B.	Trumpington, B.
Ingrow, L.	Vaux of Harrowden, L.
Killearn, L.	Vickers, B.
Kinnaird, L.	Vivian, L.
Lane-Fox, B.	Ward of Witley, V.
Lauderdale, E.	Young, B.
Long, V.

Resolved in the negative, and amendment disagreed to accordingly.

4.32 p.m.

Lord Underhill moved Amendment No. 2:

Page 2, line 15, at end insert— (""benefits" includes such factors as the potential long-term impact on land use, environmental considerations and the travel needs of the poor and the elderly").

The noble Lord said: My Lords, this is an amendment to Clause 1, the interpretation clause. Noble Lords will recall that at Committee a more restricted definition of "benefits" was proposed on that occasion, that for the purposes of Sections 3(4)(c) and 4(6)(b) the word "benefits" would mean the social, economic and environmental transport advantages. The present amendment which I now move is not a restrictive definition but that the meaning of "benefits" shall include, as it says in the amendment: the potential long-term impact on land use, environmental considerations and the travel needs of the poor and the elderly". I am almost tempted to say that I hope that you will put on one side the hard, harsh look on that occasion.

I hope that noble Lords will deal with the issues of this amendment, which is the interpretation, and not with the broader question of social benefits which we shall be asking your Lordships to consider when we come to Amendments Nos. 8 and 12 under Clause 3. The amendment suggests that it is impossible effectively to plan a public transport system without taking into account the factors which are mentioned in the amendment. That is why we want them included in the definition of the word "benefits".

So far as I can see, nowhere in the Bill is the word "benefits" defined. The amendment, as I say, does not seek a restrictive, narrow meaning but makes it clear that benefits must include the factors set out in the amendment. I am certain that all bodies which are concerned with planning would agree that any transport planning which does not take into account these factors could not be fully effective. Moreover, these factors are included in the duties placed upon transport executives and transport authorities under the 1968 and 1969 Acts.

The noble Lord, Lord Lucas of Chilworth, speaking as a Minister on the amendment in the Committee stage, said that the amendment was unnecessary, as under Clauses 3 and 4 the executive and the authority are empowered to consider any benefits. The amendment does not prevent that. It emphasises the important aspects which shall be taken into consideration by these being placed in the meaning of the word "benefits". Moreover, the actual wording of the amendment is a straight quotation from the report of the Department of Transport published as recently as December 1982 A Report on Urban Public Transport Subsidies: An Economic Assessment of Value for Money. I ask the House to note that—the hard, harsh look. That is what the report is about. I will quote from paragraph 1.7 on page 2 of this report issued by the department only last December: The model"— that is the model which is to be drawn up in order to get this assessment of value for money— is limited in that it does not reflect all the effects of subsidy. It excludes at least explicitly such factors as the potential long term impact on land use, environmental considerations and the travel needs of the poor and the elderly".

Note what comes next: These factors have to be taken into consideration together with the measure of transport benefits in determining the total amount of revenue support and its distribution between areas". That is exactly what this amendment proposes.

We have taken out the actual words from the department's own document, which I assume was with the approval of the Ministers, and transferred these into the meaning of the word "benefits". Therefore this is one amendment which I am certain the Minister will be delighted to accept; otherwise, he has to explain to us why the proposal appears in this document as a matter which it is essential should be taken into consideration. I beg to move.

The Minister of State, Department of the Environment (Lord Bellwin)

My Lords, your Lordships will recall that we had an interesting debate on this issue in Committee following an amendment put down by my noble friend Lord Teviot. I have considered what was said then and have just now listened with much interest to the noble Lord, Lord Underhill. Let me assure you that the Government entirely accept that wider considerations of the kind described by the noble Lord, Lord Underhill, and by the amendment, ought to be, and indeed must be, taken into account when planning the provision of transport services. Indeed, we made it clear in the White Paper that we expect the wider benefits flowing from revenue support to be fully assessed. But I really do think that the Bill makes it absolutely clear that these wider benefits can and should be taken into account.

The difficulty about this amendment is that it does not in practice provide a working definition of benefits, for it simply refers to three examples of factors which would be included. It ignores one of the prime benefits of public transport systems; that is, the benefits felt by the users of the system. The Bill as it is drafted does not qualify the word "benefits" at Clause 3(3) and (5) or at Clause 4(2)(b) or (6), because the word is not qualified at those references. The meaning can be as wide as one might wish. In fact the amendment might actually reduce the breadth of meaning.

At Clause 3(4) the executive is asked to submit precise estimates of those factors which are directly related to the services which it provides—their cost, the level of demand for them and the benefits they produce. This subsection is not concerned with assessing the wider benefits of grant and that is why we resisted the amendment put down by my noble friend Lord Teviot during Committee and which is now put down again by the noble Lord, Lord Underhill, for our consideration at this Report stage.

But having said that, let me also say at once that, although the reference to benefits at Clause 3(4) relates only to users, I must make it absolutely clear that the executive is also required under Clause 3(3) to accompany its plan with particulars showing the benefits expected to accrue from the grants. This reference to benefits is not qualified and it can clearly include 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 these into account. The Secretary of State can, under subsection (5), give advice on the method of determining benefits under subsection (3)—but the executive can refer to whatever benefits it wishes. In addition, the authority can, under Clause 4(2)(b), ask the executive to estimate for any other benefits which the authority specifies. Last, the authority can of its own accord add further reference to benefits, if it wishes, when submitting the plan and its proposed determination to the Secretary of State.

It must therefore surely be clear that the wider considerations under discussion in this amendment can already be taken into account. The Bill is flexible—completely flexible—and does enable both the executive and the authority with complete discretion to consider whatever benefits they wish. I hope I have made it clear that to insert the definition proposed by this amendment in Clause 1 is simply not necessary and, indeed, I contend, risks narrowing the meaning of benefits.

At the beginning of his remarks, the noble Lord, Lord Underhill, said that he did not see any Government amendments. Let me say to the noble Lord—and this is an offer—that if he can show me any particular form of benefit which the executive or the authority itself or through its executive could not refer to in the plan, then I assure him that I will consider the matter with a view to making a suitable amendment at Third Reading.

Lord Sefton of Garston

My Lords, I apologise for interrupting the noble Lord but it may perhaps save the noble Lord asking for the leave of the House to speak later. Can he give an assurance that the Government will not issue guidance or a list of benefits for the local authorities to take into consideration which are not mentioned in the Bill?

Lord Bellwin

My Lords, obviously I would want to think about what the noble Lord has said. Offhand, I do not think that I could give that assurance but I would want to consider the matter. I have made the offer to the noble Lord, Lord Underhill, and I assure the noble Lord, Lord Sefton, that the offer applies equally to him. Frankly, I do not see that what he has said in any way takes anything away from the offer that I have made. If he comes forward—if not now, at a later stage, because there is time to think about it—with any particular form of benefit which he feels could not be referred to in the plan, I promise him that I shall look at it in the way in which I have already said.

Lord Underhill

My Lords, perhaps I can deal with the last point first. The Minister says that if I can show him any benefit to which the executive or the authority cannot refer, he will have a careful look at the matter. When we come to the debate on social benefits I shall show the noble Lord such a case. This was referred to in our debates last time. There is a clear instruction as to what will not be considered. It is said that the use of the word "includes" narrows the interpretation. I am not an English scholar but I should have thought that if one says "'benefits' includes", it would not be restrictive. The word "includes" makes certain that these matters will be taken into consideration.

The Minister says that the authority and the executive can put into their plan any benefits that they so wish and must give details of those when they submit the plan. But what will the Secretary of State do? That is what we are concerned about. By putting in the interpretation that the word "benefits" will include the matters set out in the amendment—we are not saying that it will only be those matters but that it will include those matters—it is not narrowing the interpretation and it is not being restrictive.

Do the Government really mean that an authority would be free to take these matters into consideration and that the Secretary of State would take them into consideration when he fixes his guidance? I ask this because at the end of the day we are concerned about what his figure of guidance will be. We are very concerned, and I am sure that many noble Lords in the House are concerned, that unless we bring these words into the Bill—there is nothing in it at present—when the Secretary of State comes to determine the guidance level, these matters will not be taken into consideration by him. Alternatively, to put it the other way round, he will take them into consideration but will not allow for them in the guidance level. It is this hard, harsh look again, of which we shall be reminding the Minister throughout many of the debates. I shall not press the matter to a vote but this is an amendment that we shall ask to be negatived because we still stand by the principle.

The Deputy Speaker (Lord Derwent)

My Lords, is it your Lordships' pleasure that the amendment be withdrawn?

Lord Underhill

No, my Lords, not withdrawn.

The Deputy Speaker

My Lords, I did not understand what the noble Lord was saying. He was rather inaudible.

Lord Underhill

My Lords, the principle is there. We are not asking for a Division. But on the first voice we want to make it quite clear that we support the amendment.

On Question, amendment negatived.

Clause 2 [Financial duty of Executives]:

[Amendment No. 3 not moved.]

4.46 p.m.

Lord Underhill moved Amendment No. 4: Page 2. line 25, leave out ("following accounting period") and insert ("three following accounting periods")

The noble Lord said: My Lords, I was just looking behind me for the noble Lord who I hoped might be here to move the amendment, but I shall move it myself. I should also like to speak to Amendment No. 5. Noble Lords will recall that in Committee Amendment No. 7 sought to provide that any deficit made in one year be carried forward to the next accounting period, and that the PEL should not be reduced accordingly. On that occasion the Minister, the noble Lord, Lord Bellwin, said that there must be commercial discipline—and we have heard that again this afternoon—and should there be a deficit, it should be made good in the following year. But the noble Lord, Lord Bellwin, stressed: The new financial duty, however, does not provide a financial straitjacket". He continued: 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".—[Official Report, 28/2/83; col. 968.] The Minister said that the Secretary of State will take that into account when considering his guidance on the level of protected expenditure. But the Secretary of State's comment is not statute law. We were reminded of that not so many weeks ago by the noble and learned judges. The Minister implied, however, that subsection (2) need not be applied too rigidly and that there will be room for flexibility. We welcome that, but it is not statute law either; it is not in the Bill.

The amendment would enable any deficit to run forward for three accounting periods. I ask noble Lords to keep in mind that the plan which is to be submitted each year is a rolling plan covering a period of three years. Therefore, there is a lot of logic in the suggestion we put forward in this amendment. The amendment uses some of the arguments put forward by the noble Lord, Lord Bellwin, in Committee that if a deficit due to unavoidable circumstances arises, then the revenue grant for the next accounting period should be increased to make good the deficit and that the Secretary of State shall take that into account in giving guidance. I have paraphrased what the noble Lord, Lord Bellwin, said at columns 968 and 969 of Hansard.

I hope that the common sense of the amendment will be seen and that Amendments Nos. 4 and 5 will meet your Lordships' approval. I beg to move Amendment No. 4.

Lord Lucas of Chilworth

My Lords, I have listened with interest to the explanation given by the noble Lord, Lord Underhill, of Amendments Nos. 4 and 5. Amendment No. 4 is very similar to the one put down during the Committee Stage. I am afraid that my noble friend was not persuaded then and, indeed, we are not persuaded on this occasion.

The effect of the amendment would be to allow the executive a three-year period to pay off the deficit. The problem with this is, first, that it would substitute a rather slack, financial duty for a taut one. Secondly, the deficit could accumulate from year to year. That, indeed, might have a roll-on effect so that, were it to be rolled on for three years, for example, the accumulation might be so large that it would be impossible to draw it back into the whole scheme of things. Then it would be quite obvious that the authority would never be able to meet the financial duty of break-even.

It certainly would not be in the interests of the executives, the authorities or, even more 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 this tight financial control about which we have been talking throughout the passage of the Bill.

On the points contained in Amendment No. 5, I recall the discussions at an earlier stage on whether an authority ought to be able to provide additional grant in an emergency, because this is part of the reason for rolling on a deficit. There are, in fact, further amendments down at a later point in our considerations this afternoon. But the point made in Committee was that any deficit which arose because of an emergency could be covered either by the executive borrowing on the open market or from the authority, or by the unplanned use of reserves. Such a deficit could then be made good in the following year's plan by making an appropriate adjustment to the amount of revenue grant provided. This could be done by raising fares or, alternatively, it could be adjusted by the planned use of reserves. I think that that indicates how the authority could propose to increase the grant, as suggested by the amendment. Indeed, it could use other methods to make good the deficit. So, in effect, there is no need for the amendment.

Finally, I ought to remind your Lordships that the duty to break even is, as my noble friend has just said, qualified by the phrase, "so far as practicable". Clearly, if, despite all the alternatives that I have outlined, it was nevertheless not practicable for the executive to make good the deficit in the following year, it would not be bound so to do. The clause allows a deficit to be carried forward for a further year if the executive and the authority did all that was reasonably possible to recover the deficit but nonetheless were unable to do so.

Lord Pitt of Hampstead

My Lords, I think that there is real value in this amendment which seems to have been ignored. In fact, it could be part of the planning of the programme that for the first year a deficit is incurred, because, for example, you deliberately expect that over three years a certain level of fares will bring a certain level of passengers and that, therefore, you will cover your expenditure. The way in which the Government want it to be done is that you incur a deficit this year; you are allowed to incur it the following year; but you are not allowed to plan it over the three years, which it seems to me you could do if this amendment were allowed.

I am saying that an executive and its authority could agree that there would be a level of fares which, by all accounting, would mean that in year one there would be a deficit but, by the process of the expectation in terms of take-up—in terms of the use of the transport—they could expect the deficit to be less in year two and to be completely eliminated in year three. It seems to me that this amendment would help this, whereas I am not sure that as things stand, they would be free to do that.

Lord Sefton of Garston

My Lords, perhaps I may try to see whether the Front Bench opposite can be a little accommodating. I am not an expert—certainly not in accounting procedures—so I take my advice from other places. I am advised that all the executives—and I am not talking about London because it is a place with which I do not very often consort—would support this amendment if they had the privilege of being in this House. Therefore, there must be something in the case that to restrict them in the way the Bill intends to restrict them is bad management practice.

As I understand the noble Lord, Lord Lucas, the Government have said that, if we allow this amendment, it means that they will be able to abuse the privilege and upset the whole purpose of the Bill. I do not think that they should be allowed to do that, but there is another way. I am quite sure that if noble Lords opposite put their heads together, they would get a very good product and be able to produce an amendment at a later stage of the Bill which allowed this flexibility in planning that all our managers seem to want; and the Government do not seem to be at odds with the executives—they seem to think that they are the right people to run our transport and the only wicked people are the elected representatives, who go too far.

If that supposition is right, I think that there is a means of producing an amendment which, on the one hand, gives the executives the freedom they want for this three-year carry on and which at the same time gives the Government power to restrict any abuse. Would the noble Lord, Lord Bellwin, give this House an assurance that he will look at the possibility of an amendment that will seek those two aims? If they do that, they will establish—in my mind anway—the willingness of the Government to be accommodating to a point of view not being put forward as a political gimmick or from a party political point of view, but being put forward by the management of the transport undertakings of this country. At the same time they would be trying to achieve what the Government want to achieve in the Bill. It would be quite simple. All that would be needed, as I understand from my short experience in this Chamber, is an amendment to be moved by the Government at Third Reading.

Lord Lucas of Chilworth

My Lords, I think it might be particularly helpful to the noble Lord, Lord Pitt, if I went at some length into this matter of how to deal with the deficit. The Bill provides that where an executive makes a deficit, it has to make good that deficit in the following year. But the Bill also provides that, where the executive plans to use the reserves, the associated deficit is exempted from the duty to make it good. In the first year—and this is the matter about which the noble Lord, Lord Pitt, particularly asked—exemption is provided by Clause 10(4), always provided that the executive has notified the Secretary of State of its intention to appropriate reserves before he gives his guidance to the authority. But in subsequent years the proposal to use reserves must be proposed by the executive in its plan and it has to be approved by the authority. The relevant power is in Clause 2.

The planned use of reserves can effectively augment or substitute for revenue grant, so the use of the reserves is exempted from the duty to make good a deficit, provided that it has been taken into acount by the Secretary of State when giving his guidance. In the event of the executive's forecasts going badly wrong, or if an emergency arises, the executive may find itself heading for a deficit; but the Bill certainly does not allow the authority to provide additional grant. I have described courses open to the executive before.

In preparing a plan for a following year, the making good of the deficit can once again be effected either by increases in fares or by reductions in costs, or by a proposed change in the level of grant or, at this stage, by the planned use of reserves. I think that that explains how the deficits might be met; but, of course, what one is anticipating is that a deficit will not occur. It is quite wrong, as a general point of management, and certainly of financial management, that any deficit should be allowed to roll on and accumulate, because that just compounds the wrong from the first year.

So far as the comments made by the noble Lord, Lord Sefton, are concerned, I noticed what he said about the third year. He called it, "a carry on". I think I described it to the noble Lord, Lord Pitt, as indeed a "carry-on". It cannot be a "carry-on", and I put those words in inverted commas. I shall, of course, as indeed will my noble friend, carefully read what the noble Lord, Lord Sefton, had to suggest.

Lord Underhill

My Lords, once again we are disappointed with the Government's attitude on an amendment. There has been considerable reference to the use of reserves. That is always assuming that there are reserves. There may not be reserves. One does not know what might be the emergencies which are beyond the control of the executive or the authority. All sorts of things can be imagined. Quite a number of instances were mentioned during the Committee stage. One would have thought that it was good practice that, if you have a three-year plan, a deficit should be enabled to be cleared within that three years and not the immediate accounting period afterwards.

I become more and more mystified when I read reports of your Lordships' debates, as I did after the Committee stage, and refresh myself with what the Minister said about flexibility: that it does not mean that an executive would have to settle things immediately; that the Secretary of State would take all these matters into account. But these are statements. There is nothing in the Bill about them. Whenever we want things written into the Bill in order to safeguard the executive, safeguard the authority, and even safeguard the Secretary of State, there is nothing in the Bill.

However, as the Minister said that he will look carefully at the suggestion put forward by the noble Lord, Lord Sefton—and we shall read again what the Minister has said in reply—and bearing in mind that there is still one further stage at which we might try to get some common sense into this question of deficit, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 5 not moved.]

Clause 3 [Preparation and submission of financial plans]:

5.4 p.m.

Lord Underhill moved Amendment No. 6: Page 3, line 15, after ("period") insert ("and shall have particular regard to the duty of the Authority and the Executive under section 9(3) of the Act of 1968 of sections 1 and 5(1) of the Act of 1969").

The noble Lord said: My Lords, this amendment is straightforward. I do not suppose that that will have much appeal, because it seems as though the Government are going to resist the most common-sense amendments; but we hope that other noble Lords may think otherwise. The executive has to prepare each year a plan which covers the next following period of three years. The purpose of this amendment is to require that the executive shall prepare the plan with particular regard—not exclusive regard—to the duty imposed on both the authority and the executive under the 1968 and 1969 Acts, as the case may be. As has been mentioned time and time again in previous debates, there are duties imposed on the GLC and the metropolitan authorities under either the 1968 or the 1969 Act.

At the Committee stage an Amendment No. 16 was proposed. That sought to write into Clause 3(1) a requirement that the executive should in the three-year plan submit proposals for carrying out these duties. At the Committee the noble Lord, Lord Bellwin, took the view that that amendment would distort the purpose of paragraphs (a) and (b) of the subsection. He said that the duties under the 1968 and 1969 Acts would remain binding, and that therefore there was no need to refer to them in the present context.

I recall that I asked the Minister whether he would be prepared to accept a later amendment which would propose that the duties under the 1968 and 1969 Acts shall be taken into consideration. The Minister said that he would send to me a chronology of the planning process in a normal year, and that that might help me in considering what I might wish to do. I thank the Minister, because he carried out that promise and he has sent me the chronology of the planning process. I have not had an opportunity to compare it with the planning process which was outlined and submitted by my friends in the Association of Metropolitan Authorities. The full details were given and read out to the Standing Committee on the Bill in the other place. However, I thank the Minister for sending that, and I shall be able to compare it.

In sending the chronology the Minister wrote: My concern with Amendment 16 was that it would require the executive to add into the content of the plan factors which we feel should be considered in relation to its preparation. That is just what the amendment seeks to do: that in preparing the plan it shall have particular regard to the duty of the authority and the executive under the various sections of the 1968 or 1969 Acts.

If the amendment is accepted subsection (2) would then read: The proposals"— that is, in the plan— shall be such as to enable the Executive to discharge their duty under section 2 above in the relevant period and shall have particular regard to the duty of the Authority and the Executive". and it then goes on to refer to the 1968 and 1969 Acts.

I am grateful for the chronology of the planning process, but that does not deter me from wishing to move this amendment. We have considered carefully what the Minister said on the last occasion, and I and my noble friends are satisfied that the amendment that I now move covers the objections put forward by the Minister at the Committee stage. I beg to move.

Lord Bellwin

My Lords, the noble Lord, Lord Underhill, will not mind, I know, if in responding to amendments which are similar, and in some cases almost identical, to ones we had at the earlier stage, I say the same things. One tries to be original the whole time, but it is not always possible. If I think the case was made fairly at the earlier stage, then I cannot do much better than say the same again.

This amendment seeks to insert a requirement that, in addition to being compatible with the financial duty, the executive's proposals in its plan must also take account of the general duties under the 1968 and 1969 Acts. I said it before, and I say it again: these provisions have not been repealed by this Bill. I repeat: the provisions have not been repealed by the Bill. The general duties still apply, and authorities and executives will continue to be required to have regard to them when carrying out their duties under the Bill, particularly when preparing their plan. Indeed, this is emphasised by the requirement imposed on the Secretary of State under Clause 4(6) when giving guidance to authorities to have regard to these general duties.

This is not a large amendment. It is not, I suppose, the most contentious part of the Bill. But I hope that the noble Lord, Lord Underhill, will feel, even with these few remarks, that I have reassured him on this point, and that the amendment does not add anything to the Bill and is not necessary.

All I would add is that the authority and the executive will of course have regard to their general duty; hence there is no need for the amendment. But the Secretary of State is not himself under the general duty, and that is why he is required by Clause 4(6) to have regard to it. I hope that the noble Lord, Lord Underhill, will see what I regard as the logic of this argument and perhaps withdraw the amendment.

Lord Sefton of Garston

My Lords, before the noble Lord sits down, will he give to this House an assurance that no instructions that conflict with the Act mentioned will be issued from the department to local authorities?

Lord Bellwin

My Lords, the noble Lord, Lord Sefton of Garston, very frequently asks whether I will give assurances as to what the department will or will not say. Of course I cannot do that because I do not know exactly how these points will transpire as they are put into practice. There are perhaps others better qualified than I to say that. As with most matters of this kind, we are trying to set up a régime which is clearly understood and which sets out what authorities and executives must do in submitting their plans, taking guidance, and coming to conclusions. I am with the noble Lord in wanting within that framework the greatest degree of flexibility possible. I do not want to encourage régimes which make it impossible for an authority or an executive to act; I do not want that at all. As we come to further amendments we shall see why the Government feel that the whole Bill is necessary. It is with that point in mind all the time that I respond in the way that I do to the present amendment.

Lord Boyd-Carpenter

My Lords, is not the very simple answer that, if my noble friend were to do what the noble Lord opposite suggests and issue a guidance which conflicted with statute—whether it be the 1968 Act, or the 1969 Act—any aggrieved person could take him to the courts and, judging from the case that the noble Lord may recall of Laker v.the Board of Trade, would be very likely to score a victory? Surely it is perfectly easy for my noble friend to say that he will continue to comply with the law and not expose himself to that possibility.

Lord Bellwin

My Lords, I must seek the leave of your Lordships to speak again, and I must apologise for not having done so when I last rose. I am very grateful to my noble friend who, as so often, goes straight to the root of the matter and puts it in very logical and, I am sure, precise terms.

Lord Underhill

My Lords, the intervention of the noble Lord, Lord Boyd-Carpenter, may seem very logical. But we do not like these matters going to the courts if we can avoid it; and that is what this House, too, ought to try to do. We must make certain that the Bill is correct and that we are not working on the basis of the flexibility of a future Secretary of State. We should write into the Bill exactly what we want to happen. Then we can avoid court actions of various kinds.

I shall certainly read what the Minister has said. He said that the powers have not been repealed. We agree; the 1968 and 1969 Acts are still there. In this and other amendments we are endeavouring to make it entirely clear, not only to the present Secretary of State, but to future Secretaries of State, exactly what shall be taken into consideration when plans are made, when approval is given, and when guidance levels are determined. They are the points that we want written into the Bill. The Minister does not feel inclined to go that way. A further stage of the Bill remains, and perhaps at Third Reading we can yet improve it, so that we do not have flexibility only in the mind of a Secretary of State, but rather a statute that clearly shows what an authority may do and what the Secretary of State may do. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.14 p.m.

Lord Underhill moved Amendment No. 7: Page 3, line 23, leave out from ("grants") to ("; but") in line 24.

The noble Lord said: My Lords, I am sorry that I have to keep popping up, but my noble friends are engaged elsewhere, in one case in a Committee of your Lordships' House. I beg to move Amendment No. 7, and in doing so would say that Clause 3(3) (which we are now considering) provides that in preparing the three-year plan the executive may assume that the transport authority will make grants of such amounts as the Executive may determine". The clause must be read with Clause 4(1), which provides that the authority shall approve with or without modification the plan submitted to it by the transport executive, and that the authority shall make the annual determination of the amount of the revenue grants to be made to the executive.

Quite clearly the provision in Clause 3(3) and that in Clause 4(1) cannot both be right. If the authority has to determine the revenue grants, then the executive, in formulating the plan to be submitted to the authority, cannot do so on the basis of revenue grants that it assumes shall be determined. The clause says that the executive itself shall determine that. It is completely artificial to have an assumption by the executive that the authority will give grants of certain amounts. In the amendment we state that it is an assumption that the executive is not entitled to make. These two conflicting provisions could lead to some confusion; and to remove the possibility of any such confusion, the amendment proposes leaving out the words of such amounts as the Executive may determine". That is because the executive has no power whatever to make such a determination. I beg to move.

Lord Bellwin

My Lords, we believe that it is important that in preparing the draft plan the executive should make an assumption about the appropriate level of grant and that that assumption must be made in the light of any advice given by the Secretary of State under Clause 3(5) as to the amount of grant that it would be appropriate for the executive to determine. These are important provisions because, if the Secretary of State is to provide protection from challenge to a reasonable level of subsidy, it is surely only sensible that, at the initial stages of the plan, the executive should be required to take into account any advice which the Secretary of State gives about the kind of figure that he has in mind. It is also right that at least an element of the plan should bear some relation to any initial advice which the Secretary of State has given.

But let me make it quite clear that these provisions in no way confine the executive to considering only the Secretary of State's advice, and preparing the plan only on that basis; nor do they impose any restrictions on the authority. I am sure that it is concern about that latter point that has given rise to the amendment. For its part the executive will be free to make any amount of other assessments that it chooses. Equally, before it prepares the plan, the executive must consult the authority, which at that stage can ask for consideration to be given to the consequences of the provision of different levels of revenue grants. Again, the authority can also, at a later stage, and under Clause 4(2)(a), call for further alternative proposals based on different levels of revenue grant. At the end of the whole process, after the Secretary of State has given his guidance, the authority has the final word on the actual amount of grant to provide.

So the Bill provides full flexibility. It allows the executive to make its own assessments, and also provides for it to consider the effects of any advice given by the Secretary of State. But it goes further: it also enables the authority to call for alternative proposals and preserves its ultimate responsibility—and this I stress—for the provision and financing of local transport, by giving it the final say. But the whole purpose of the relevant part of Clause 3(3), and the reason why I resist the amendment, is to ensure that proper consideration be given to a number of alternative proposals. Surely that is in everybody's interests. Nothing would be achieved by preparing a plan based on only one proposal from the authority, which is what would result from the amendment. We must recognise that there are a number of possible alternatives and a number of interests to consider. They must all be taken into account. In short, if he wishes, the Secretary of State needs to be able to see an exemplification of a level of grant of a general order of size similar to that which he might be able to protect, but he would not want to prevent the authority and the executive from exploring the effects of different levels of grants. That is why the Government are not able to accept the amendment.

Lord Underhill

My Lords, I shall consider very carefully what the Minister has said. I should like to read out part of subsection (3) of Clause 3. The plan may be formulated on the assumption that the Authority will in the relevant period make revenue grants of such amounts as the Executive may determine". The point of this amendment is that the executive has no power in the Bill to determine the revenue grant. It is the public transport authority which will determine the level of revenue grant; and then the Secretary of State will either say that he agrees with it or he will cut it down. I doubt that he will increase it. The Secretary of State will consider the determination of the revenue grant made by the public transport authority. It is not a decision to be taken by the transport executive.

This is the point of the amendment. We are not trying to take away any rights of the Secretary of State under the Bill. We are saying that you cannot have two bodies which determine the revenue grant in the Bill. It is not a question of alternative plans; it is not a question of the executive saying that they would like to have it. They are going to work on the assumption that the revenue grant will be that which the executive may determine.

Again, we will not divide the House on an issue of this kind but I should like the Government to have a careful look at this. How you can have conflicting provisions of this kind in one Bill, I fail to see. One ought at least to get some accuracy. It again reflects the desire of the Secretary of State to have more direct contact with the transport executive than he ought to have. The transport executive is the operating body functioning under the transport authority and it is the transport authority which is the elected body which has complete responsibility. We will read very carefully what the Minister has said. At the moment, not having re-read it, I disagree with what he said. Nevertheless, I ask that the amendment be withdrawn.

Amendment, by leave, withdrawn.

5.22 p.m.

Lord Underhill moved Amendment No. 8: Page 3, line 33, leave out ("to potential users")

The noble Lord said: My Lords, this is an amendment to which I made reference when dealing with an earlier amendment. I should like to discuss with it Amendment No. 12. At the Committee stage, an amendment was tabled which sought to include definition of the use of the word "benefit"; that it means the social, economic and environmental transport advantages. In the course of my remarks, I shall have to refer to some of the arguments used on that occasion. Subsection (5) of this clause provides: In preparing the plan the Executive shall take into account any advice given by the Secretary of State as to the amounts", to be determined for revenue grants and the method of determining the benefits expected to accrue from the grants.

The amendment will provide that the method of determing the benefits shall not exclude social benefits. We are not saying that that should be the only thing, but that it shall not exclude social benefits. It is not possible effectively to plan transport services without taking into account all the benefits that expenditure in connection with these services will bring. Even before the White Paper (which was supposed to be a consultation paper although it was published on the same day as the Bill), the Secretary of State gave a Written Answer on 26th July related to public transport in the metropolitan authorities and in the Greater London Council from which it is clear that he had made up his mind, because he said that, although the legislation on subsidy had worked reasonable well in the past, it had not prevented excessive subsidies by the metropolitan county councils.

The White Paper in paragraph 7 stated that the Government's proposals will require the metropolitan authorities and the GLC to describe and evaluate the benefits which the authority regards as justifying its subsidy. Paragraph 8 of the White Paper qualifies this. It stresses that the cost of any subsidies must be justified by "general transport benefits" in providing services which would not otherwise be viable or for the alleviation of road congestion. Paragraphs 14, 16 and 18 of the White Paper all make broad references to benefits but the benefits are not properly described in the White Paper, although paragraph 18 stresses that the new legislation will enable benefits which are being subsidised to be identified and to ascertain whether the benefits are cost effective.

We have not heard a great deal about the White Paper, but I am quoting from it. In paragraph 21, it is pointed out that in giving guidance the Secretary of State will take account of benefits to users of public transport and to other road users in terms of reduced congestion and that considerable weight will be given to the more direct economic and social benefits which can be measured in different areas on a comparable basis. That statement in the White Paper appears not to be supported elsewhere in the White Paper or in the Bill now before the House.

The Bill contains various references to benefits. These have not been modified in any way by amendment since the Bill was first published. Clause 3(5) provides that the Secretary of State will give the executive advice on a method of determining benefits which may accrue for revenue grants included in the annual plan. Under Clause 3(3), the executive shall take account of this advice in giving particulars of those benefits. The benefits are not described. Clause 3(4)(c) provides that the plan shall be accompanied by estimates of three items, one of which (in paragraph (c)) is estimates of the benefits to potential users of the services and facilities proposed in the plan. Again, there is a general reference to the word "benefits".

The next reference in the Bill to benefits is in Clause 4(6): that, before the authority may approve the plan, it shall take into account the guidance of the Secretary of State as to the level of grant which he considers to be appropriate—that is, the protected expenditure level. In arriving at this he shall have reference to benefit which will result from making the grant. Although these provisions all provide for looking at benefits, and they give the Secretary of State full discretion strongly to influence the way that benefits are expressed, in effect the Secretary of State, elsewhere in the Bill, is put in the position of being both advocate and arbiter in this matter.

At the Committee stage, the noble Lord, Lord Lucas, said that everybody would want to see the widest possible consideration for all types of benefits which can be derived from public transport provision. Although that is not made clear in the Bill, Lord Lucas said that the amendment was not necessary. The Minister also said that, in giving advice to the executive under subsection (5), he would not wish to discourage them from taking account of any benefits. Again I ask: where is this made clear in the Bill? Then, again, as quoted in Column 958 the noble Lord, Lord Lucas, said: Again I confirm 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".

Noble Lords will recall that at that stage in the Committee debate, my noble friend Lord McIntosh referred to a memorandum issued by the Department of Transport to the metropolitan authorities and the GLC setting out benefits which were to be included in the model for the determination of the permitted expenditure level and those other benefits which were not to be included. It will be recalled that my noble friend read out extracts. Lord Lucas, replying to those extracts said: It all seems eminently satisfactory to me". And he said this although the statement seems to conflict with everything on which there are no interpretations or provisions in the Bill.

The noble Lord said that he could only repeat that the amendment was wide, but we feel that there is at least a possibility of argument that some benefit which it is believed will be derived from the plan when is offered will not fall within that definition". My Lords, I do not want to read the extracts from that Department of Transport memorandum. The memorandum was a document setting out proposals for legislation on public transport subsidies, the planning system and the information to be provided. The annexe set out the scope of the Department of Transport revenue support assessment model and the items which were to be included. The document made quite clear the matters which were not to be taken into account—and I repeat, not to be taken into account. These were: The effect on the city's economy in terms of employment, location of homes and workplaces and the environment, the additional economic disadvantages of higher taxes and rates … social needs such as accessibility". It was made absolutely clear that these are matters which shall not be taken into account; so the use of the word "benefits" is not as wide as the noble Lord, Lord Bellwin, and the noble lord, Lord Lucas of Chilworth, have suggested at various times in the provisions of the Bill.

I have already quoted the document—An Economic Assessment of Value for Money—which said that these items should be taken into consideration. That was dated December 1982, but the other document to which I have referred I understand was published on 1st February this year. So something happened between December 1982 and 1st February. Whereas in December 1982 it was said that these matters must be taken into consideration, we have the document of 1st February which says that these matters shall not be taken into consideration. So we might have some clarification about that.

The two amendments are in our view necessary to ensure that there is consistency in the treatment of benefits and to ensure that all benefits are taken into account. If we do not provide that social benefit should be taken into consideration, frankly we are not going by what the document of December 1982 said. Moreover we cannot plan an effective transport system on that basis.

I am sorry to have spoken at some length on this, but this goes to the heart of what we want to see from a transport system; not only the economic advantages, not only cost benefits but the social advantages and social benefits of an effective public transport system. That is what the Department of Transport said in December 1982. I beg to move.

Lord Prys-Davies

My Lords, while I fully adopt the arguments which have been canvassed by my noble friend, I find that I am in difficulty with Clause 3(4)(c) as it stands. I have considerable sympathy with any official who has to prepare estimates of benefits to potential users of those services and facilities. I see two weaknesses in this particular subsection. The term "potential user" is itself extremely vague. The clause refers to a class or category which is not itself capable of being defined with a sufficient degree of precision and accuracy. It seems to me that there are three categories: the non-user, the potential user, and the user. When does a non-user become a potential user? What kind of criteria or test will this Bill give to the official who has to work with this subsection? I am not sure when a non-user becomes a potential user.

My second objection is that it seems to me that, by implication, if the official is able to show in the estimates that improved facilities will bring benefits to the user, that could be excluded because he is no longer a potential user. He is the user. As I read the subsection the official in his town hall will have to go further and will have to show that the facility will lead to additional persons using the transport system. Is that really the thrust of this clause?

My noble friend wished to define "benefit" and I was in great sympathy and agreement with my noble friend when he called for a definition of "benefit" to include impact on land use. How will the official connect improvement in land use with the needs of the non-user, who may become a potential user? In addition to the points made by my noble friend, I believe that the subsection in itself leads to great difficulties and excludes benefits to a direct user, a present user, a man or woman whom we can identify, which is of benefit to the community.

Lord Sefton of Garston

My Lords, I raise a point that I have raised twice before. It is the question of the assurances for which I asked from noble Lords on the Front Bench opposite about whether guidance would be given by the department that conflicted with the powers already passed in Parliament that enabled local authorities to take certain things into consideration. When this issue of the document that was published on 1st February this year was first raised in this Chamber, the Front Bench responsible for the Bill did not know of the document. That could be excused if there were that many documents of minor importance floating about on the Bill and the Ministers did not have their attention drawn to it. But this document contains the very heart of the assessment of need in local authority areas. It contains the guidance given to the executive committee. I think that at this late stage of the Bill noble Lords opposite should tell us this: do the Government stand by this document issued by the Ministry or do they reject it? In fact it is a complete contradiction of all the urgings, all the coercion and all the persuasion that has been used by central Government to executives in the planning of transport systems throughout the country.

I will go further back than that. Central Government commissioned a report on Traffic in Towns by Buchanan that in its day was the textbook of town planning. Nobody has upset that concept and the guidance that was given by the Ministry to the executives on 1st February this year flies in the very face of that. It flies in the face of every reasoned document that has been produced on town planning and transport.

I think at this late stage in the Bill, almost the last stage, it is quite evident now from the reasoned cases put forward by noble Lords on this Front Bench that the Government will not consider even a minor amendment. The Government do not even intend to consider what appear to be drafting mistakes because of the fear of not getting the Bill through by a certain date in order to carry out their real aim. Their real aim was to teach the Greater London Council who was the boss in this capital city of ours. I have not forgotten that that is the fundamental reason behind the Bill. It is a fundamentally bad reason, but at this late stage, after first disclaiming any knowledge of a document that was issued for guidance to local authotities, I think the noble Lord opposite should at least give us a straight answer. Do the Government support this document or do they not?

Lord Bellwin

My Lords, I should perhaps remind the noble Lord, Lord Sefton of Garston, that if the Government are as concerned as he says about getting the legislation through in time, then the quickest way of doing it is to do precisely what he says; that is to agree to amendments and everything that goes with it. To resist them is not to speed up the process at all.

Lord Sefton of Garston

Will the Minister give way?

Lord Bellwin

I will, my Lords.

Lord Sefton of Garston

My Lords, does the Minister mean to tell me that the Government would consider an amendment to the Bill? It would then have to go back to the Commons and then come back to this Chamber.

Lord Bellwin

My Lords, the noble Lord really misses the whole point of what we are seeking to do. I keep saying it again and again. The fact is that the Government are entitled to bring forward their legislation and your Lordships' House is the place to modify that and to make sure that there are no drafting errors such as the noble Lord refers to. It is the place to make such adjustments as they feel able, but basically the policy is set down in another place and the noble Lord is as staunch an advocate as anybody I know in ensuring that policy is not interfered with. So, frankly, I do not think it advances us very much to debate this particular aspect.

Let me say, in regard to this amendment, that the Government entirely accept that wider considerations of the kind described on this occasion by the noble Lord, Lord Underhill, and in Committee by my noble friend Lord Teviot—I said it before and I will say it again—must be taken into account when planning regional transport services. We have made it clear in the White Paper that we expect the wider benefits flowing from revenue support to be fully assessed. I really do think that the Bill makes it absolutely clear that these wider benefits can and should be taken into account, but I must add that there would be real difficulty in amending Clause 3(4) in the way proposed by this amendment, No. 8.

Under Clause 3 subsection (4) we are concerned that the executive must 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 they produce. This subsection is not concerned with assessing the wider benefits of grant and that is why I think it would be quite inappropriate to amend the subsection in the way suggested.

Let me at once make it absolutely clear that the executive are required by Clause 3 subsection (3), when submitting proposals for revenue support, to accompany them with particulars of the benefits expected to accrue from such support. The reference to benefits in subsection (3) is not qualified—it can clearly include consideration of the kind of factors aimed at in the amendments, in so far as it is within the power of the executive to take them into account. The Secretary of State can, under subsection (5), give advice on the method of determining benefits under subsection (3)—but the executive can refer to whatever benefits it wishes. In addition, the authority can, under Clause 4(2)(b), ask the executive to estimate for any other benefits which the authority specifies. Last, the authority can of its own accord add further reference to benefits, if it wishes, when submitting the plan and its proposed determination to the Secretary of State. I hope that I have reassured your Lordships that the wider considerations under discussion in this amendment can already be taken into account. The Bill is flexible on this and enables both the executive and authority, with complete discretion, to consider whatever benefits they wish. I hope I have made it clear that to amend Clause 3(4) as proposed would distort the purpose of that subsection.

I am going to repeat what I said before—that if any of the noble Lords opposite can show me any form of benefit which the executive or the authority itself or through its executive could not refer to in the plan, I undertake to consider the matter with a view to bringing forward a suitable amendment on Third Reading. The noble Lord, Lord Underhill, has pointed out that the Secretary of State appears from the consultation document—and this refers also to the point raised by the noble Lord, Lord Sefton—to be proposing to ask for specific benefits to be taken into account and proposing to exclude other specific benefits. I would say first that the reference the noble Lord made is to the part of the document which refers to cost-benefit analysis. If, especially as a result of consultation, it were to appear to the department that it is practicable to take meaningful account of other factors, then we would want to consider so doing. I would not want your Lordships to underestimate the technical difficulties involved in any major expansion of this helpful model.

So the first point is that if anyone wishes to demonstrate how the model could usefully be expanded, I would ask him, please, to tell the department's officials. Secondly, because a particular item is not to be a factor in the model, that most certainly does not mean it should not be taken into account by the executive, the authority and the Secretary of State. Therefore, if the executive believe that there is a particular and important benefit provided by their services or through the revenue grant which does not feature in the model and which they wish to draw to the attention of the authority and the Secretary of State, there is nothing to stop them from so doing. On the contrary, there is every merit in their so doing. The model is simply one among many factors which the Secretary of State will take into account when assessing the executive's plan and the authority's proposed modifications and the proposed grant. So there is no conflict at all in what I said earlier between the executive and authority really putting forward material on any benefit they care to identify and the specific requests which the Secretary of State may make under Clause 3(5), Clause 6(1) or Clause 6(4).

As regards Amendment No. 12, I must confess I am at a loss to think of anything new to say. We have already debated three separate amendments on this issue which, in all honesty, I think we could perhaps have dealt with in one discussion. I have demonstrated that the Bill already provides for these issues to be fully considered. Moreover, the amendment to Clause 3(5) does not in any way clarify which social benefits should be assessed. For his part, the Secretary of State might have certain benefits in mind when giving advice to executives but I have shown in previous debates that if the executives have a different view about other social benefits that need to be assessed, there is nothing to prevent them from assessing these and putting forward their views.

I suppose that perhaps I might try to pick up more detailed points that were made, but we are on Report stage and I do not want to make a Second Reading speech. I just feel that we have, as with so many other amendments, a point of view which is different from that of noble Lords opposite. While I personally regret that, that is the reality and that is why I cannot accept these amendments.

Lord Underhill

My Lords, there seems to be little point in trying to persuade the Government to accept what the department have said in these documents. We seem to be offering a number of challenges one way or the other. My noble friend Lord Sefton asked: do they support them or do they not? I must remind your Lordships of what the documents say. The first is dated December 1982: Urban Public Transport Subsidies: An Economic Assessment of Value for Money. I will read again what paragraph 1.7 says on page 2: The model is limited in that it does not reflect all the effects of subsidy. It excludes, at least explicitly, such factors as the potential long-term impact on land-use, environmental considerations and the travel needs of the poor and the elderly. These factors have to be taken into consideration together with the measure of transport benefits in determining the total amount of revenue support and its distribution between areas". Then we have the other document issued on 1st February: Proposals for Legislation on Public Transport Subsidies: A Planning System: Information to be Provided. It makes absolutely clear that: Other factors not taken into account in the model include the effect on the city's economy in terms of employment, the location of homes and workplaces and the environment". I should have thought they were factors you must take into account when planning transport. It goes on: The additional economic disadvantages of higher … rates and social needs such as accessibility". Those shall not be taken into consideration. In other words, someone had second thoughts between December 1982 and 1st February. My noble friend Lord Sefton asked: do they or do they not support this document? Perhaps I should ask: do they support both documents? Therefore, the position is not as clear as the noble Lord, Lord Bellwin, said. He is always so persuasive—and I have said on other occasions that being persuasive and being convincing are two different things entirely.

I agree that there is nothing new to be said. We want to ensure not only that the executive and the authority will be able to take these matters into consideration, but that in doing so the Secretary of State will not be able to challenge them. We are told continually that the transport authority can do these things, but it is no good them doing them if, at the end of the day, the Secretary of State says, "This might be in your plan, but you must take it out. My determination of the revenue grant will depend on your taking it out". That is why it is so important to clarify these matters.

The noble Lord, Lord Bellwin, says that if we can show any form of benefit which will not be covered under the plan, he will introduce an amendment on Third Reading. The document published on 1st February says, "you shall not take this into consideration", so perhaps we shall get a Government amendment making it clear that such matters shall be taken into consideration. If a Government department document says that certain matters shall not be taken into consideration, I cannot see how the Minister can claim that no benefits are debarred.

Lord Bellwin

My Lords, the noble Lord is not correct in saying that the benefits he quoted shall not be taken into account. It is said in the department's cost-benefit model that these benefits are not to be taken into account, but the authority and the Secretary of State can take account of them. When the noble Lord reads my remarks carefully he will see there is a big difference.

Lord Sefton of Garston

The Minister is playing with words. We are talking about the principles underlying proper transport planning—something the Government are supposed to want. If the principles are there, how on earth can one have a cost-benefit analysis which does not include them?

Lord Bellwin

Not for the first time, my Lords. I disagree totally with the noble Lord. When he reads what I said on the subject he will see that I gave a full and total answer to the point made by the noble Lord, Lord Underhill.

Lord Underhill

My Lords, it is clear that we approach public transport in different ways. We want cost benefits, but we also want social benefits to be taken into consideration; whereas the Government concentrate on cost benefits only. The document I have with me, Urban Public Transport Subsidies: A Technical Report, is rather technical for me, but I am trying to get through it. It would do noble Lords opposite no harm to study it. In that document is a massive amount of detail, the detail the department wants to make the necessary assessment in order to get cost benefits and cost effectiveness only. We want to be sure there will be no disbarment of social benefits.

If the Minister would say he believes that with the assistance of his colleagues in the department he will be able to bring forward a better amendment on Third Reading to describe what is meant by social benefits, I would withdraw the amendment. In the absence of such an offer, we can only believe that he does not want to include social benefits. Amendment No. 12 simply says, that, the method of determining the benefits shall not be such method as will exclude particulars of social benefits". In other words, we are standing by paragraph 1.7 of the department's document issued in December 1982. I must, therefore, press the amendment.

5.54 p.m.

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

Their Lordships divided: Contents, 51; Not-Contents, 104.

DIVISION NO. 2
CONTENTS
Airedale, L.	Lloyd of Kilgerran, L.
Aylestone, L.	Longford, E.
Beswick, L.	McIntosh of Haringey, L.
Boston of Faversham, L.	Mishcon, L.
Brockway, L.	Molloy, L.
Bruce of Donington, L.	Ogmore, L.
Cledwyn of Penrhos, L.	Oram, L.
Collison, L.	Phillips, B.
Cooper of Stockton Heath, L.	Pitt of Hampstead, L.
David, B.	Ponsonby of Shulbrede, L. [Teller.]
Denington, B.
Diamond, L.	Prys-Davies, L.
Elwyn-Jones, L.	Ross of Marnock, L.
Fisher of Rednal, B.	Seear, B.
Gaitskell, B.	Sefton of Garston, L.
Gladwyn, L.	Stedman, B.
Harris of Greenwich, L.	Stewart of Alvechurch, B.
Hatch of Lusby, L.	Stewart of Fulham, L.
Houghton of Sowerby, L.	Stone, L.
Hughes, L.	Strabolgi, L.
Jacques, L.	Underhill, L.
Jeger, B.	Wallace of Coslany, L. [Teller.]
Jenkins of Putney, L.
John-Mackie, L.	White, B.
Kagan, L.	Wigoder, L.
Leatherland, L.	Winstanley, L.
Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS
Airey of Abingdon, B.	Long, V.
Auckland, L.	Lucas of Chilworth, L.
Avon, E.	Lyell, L.
Balfour of Inchrye, L.	McAlpine of Moffat, L.
Belhaven and Stenton, L.	Mackay of Clashfern, L.
Bellwin, L.	Macleod of Borve, B.
Beloff, L.	Mancroft, L.
Belstead, L.	Marley, L.
Boyd-Carpenter, L.	Merrivale, L.
Burton, L.	Monk Bretton, L.
Campbell of Alloway, L.	Montgomery of Alamein, V.
Cathcart, E.	Morris, L.
Chelwood, L.	Mottistone, L.
Coleraine, L.	Mountevans, L.
Colwyn, L.	Mowbray and Stourton, L.
Cottesloe, L.	Newall, L.
Cox, B.	Northchurch, B.
Cranbrook, E.	Nugent of Guildford, L.
Cullen of Ashbourne, L.	Orkney, E.
Dacre of Glanton, L.	Portland, D.
Daventry, V.	Renton, L.
Davidson, V.	Romney, E.
De La Warr, E.	Rugby, L.
Denham, L. [Teller.]	St. Davids, V.
Digby, L.	St. John of Bletso, L.
Dilhorne, V.	Salisbury, M.
Elles, B.	Selsdon, L.
Elliot of Harwood, B.	Sempill, L.
Elton, L.	Slim, V.
Erroll, E.	Soames, L.
Ferrers, E.	Somers, L.
Gainford, L.	Spens, L.
Gardner of Parkes, B.	Stamp, L.
Garner, L.	Strathcarron, L.
Gisborough, L.	Strathcona and Mount Royal, L.
Glanusk, L.
Glasgow, E.	Strathspey, L.
Glenarthur, L.	Sudeley, L.
Greenway, L.	Suffield, L.
Hailsham of Saint Marylebone, L.	Swansea, L.
	Swinfen, L.
Hayter, L.	Swinton, E. [Teller.]
Henley, L	Teynham, L.
Hives, L.	Trefgarne, L.
Holderness, L.	Trenchard, V.
Hornsby-Smith, B.	Trumpington, B.
Hunt of Fawley, L.	Tryon, L.
Hylton-Foster, B.	Vaizey, L.
Ilchester, E.	Vaux of Harrowden, L.
Killearn, L.	Vickers, B.
Kinnaird, L.	Vivian, L.
Lane-Fox, B.	Ward of Witley, V.
Lauderdale, E.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 9 and 10 not moved.]

6.2 p.m.

Lord Underhill moved Amendment No. 11: Page 3, line 36, after ("State") insert ("or the Authority").

The noble Lord said: My Lords, it will be for the convenience of the House if in moving Amendment No. 11 I speak also to Amendments Nos. 13 and 29. Subsection (5) of Clause 3 says: In preparing the plan the Executive shall take into account 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, and generally as to the form and contents of the plan". As the authority has the final responsibility for approving the plan, Amendment No. 11 proposes that the executive shall take into account any advice given by the Secretary of State and the authority. Amendments Nos. 13 and 29 are consequential.

As was mentioned in previous debates, the executive is the unelected operating body, and it is responsible to the authority. The authority is the elected body and has the final responsibility. We say that as the authority is the elected body it, as well as the Secretary of State, should give advice to the executive. That is the simple principle which is covered by these three amendments. I beg to move.

Lord Pitt of Hampstead

My Lords, the Government ought to accept this amendment. When the noble Lord, Lord Bellwin, replied to Amendment No. 7, he said that the Government wanted the executive to submit a series of plans and a series of suggestions about the grants which it should receive from the authority. I do not know how they can do that without consulting the authority and taking its advice. In view of what the noble Lord, Lord Bellwin, said on Amendment No. 7, it seems to me that the Government ought to accept the amendment. It is also right in principle that they should do so. The executive is asked to prepare a plan. The plan requires that part of it should be the determination by the authority of what grant the authority is going to make to the executive. It seems to me that before they can prepare the plan the executive must discuss with the authority what is likely to be the proposed grant, just as much as they must discuss with the Secretary of State what level of grant he is likely to accept. In preparing the plan, therefore, advice must be taken from both. I do not see how the Government can refuse to accept the amendment.

Baroness Gardner of Parkes

My Lords, I do not understand the wording of the amendment. Is it suggested that, by the words "or the Authority", the advice of the authority should be taken rather than the advice of the Secretary of State? I take the point made by the noble Lord, Lord Pitt of Hampstead, that it might be necessary to have the comments or political advice of the authority, because that is an elected body and has a view to give. However, the amendment proposes that the executive should take into account any advice given by the Secretary of State "or the Authority". Therefore it seems to me that the executive is being asked to take the advice of the authority but to rule out the advice of the Secretary of State. On those grounds, I find the amendment to be slightly puzzling and I should appreciate a comment on that point.

Lord Mishcon

My Lords, I immediately make that comment, with all deference, because the noble Baroness, Lady Gardner of Parkes, never rises to her feet unless she has something sensible to say, but I am afraid this occasion was a rare exception to that rule. If you are directed to take note of the advice of one body or the other, it means that if one body or the other chooses to give you advice you must take note of it. It is not exclusive. You cannot say, "If both of them tender advice I shall decide to take the advice of the Secretary of State: I have no obligation to take the advice of the authority". Here, the word "or" means "and" if both parties do indeed give advice.

Lord Bellwin

My Lords, at first sight these amendments might seem to be a logical consequence of the provision in Clause 6(1) which requires the executive to consult the authority before it prepares its draft plan. If the executive must consult the authority, why should it not also be required to take into account any advice given by the authority? The Government's view is that it is right for the executive to take account of what is said by the authority during consultation. Therefore, it seems to me that Amendment No. 29 is unnecessary. It adds nothing to Clause 6(1), as the consultation process is bound to result in the executive having regard to the advice of the authority. That is what consultation is all about.

Moreover, the problem with Amendments Nos. 11 and 13 is that they would serve only to confuse the executive in its preparation of the plan. The amendment would upset the planning process in the Bill, which follows an ordered and logical course. If the executive had to have regard in the initial stage to advice both from the Secretary of State and the authority as to the amount of grant it would be appropriate for them to determine—the method of determining benefits, the form and content of the plan and the method of determining the matters in Clause 3(4)—then how would the executive decide whose advice they would regard? I fear that the amendment will result in a draft plan which, by taking account of different advice from different sources and placing it in a mixing bowl, will result in a plan based on the executive's attempt to resolve these conflicting pressures. The plan might be based on a single level of grant, following a particular methodology which was unsatisfactory to all the parties, and hedged about with too many "ifs" and "buts".

What we want is for the executive to set out a plan on the assumption of an amount of grant and following a standard methodology that takes account of the Secretary of State's advice; that is, advice under Clause 3(5). This will enable him to assess the plans of the various local authorities before arriving at his guidance. We want also, if the authority has the view that a very different level of grant is desirable or that different methods of assessing benefits, and so on, are desirable, that they could also ask for this during consultation or later when, under Clause 4(2) they can require such exemplifications after receiving the draft plan. Of course, the authority have the final word on the plan.

It is important to maintain the step by step procedure in the Bill. I believe that the correct moment for the executive to consider the views and advice of the authority is both during consultation, before beginning to prepare the plan; and again after they have prepared the plan, and after the authority have considered it. It is then that the authority will be in the best position to know whether it wishes to call for additional exemplifications and proposals. I also believe that it is of paramount importance that we retain the ordered process set in the Bill in relation to both the views, methodology and so on requested by the Secretary of State and the requirements of the authority.

The Bill as it stands ensures that each party knows exactly what is required of it and when. I respectfully suggest that the amendments will put the executive into the impossible position of trying to respond to two masters at once rather than, as the Bill provides, for them to respond separately to each. That is why the Government have difficulty in accepting them.

Lord Mishcon

My Lords, I wonder whether the noble Lord the Minister will deal with a point that I believe is worrying many of your Lordships. Throughout his addresses on this subject (and the noble Lord, Lord Lucas of Chilworth, has followed the same line) we have been told that this Bill is one that in no way interferes with the dignity, rights and prerogatives of the authority; and that there is a simple programme of procedural events—and the Minister has just gone through them—where the last word is that of the authority.

In my view, and in the view of my noble friends, it is wrong to put right in the middle of that programme a procedural step where advice has to be taken into account by the executive before reaching the ultimate stage of the final plan that goes to the authorities for their approval. This is the point for which we are really fighting; the right of the authority to give advice and the duty of the executive to take it into account.

I do not intend to be facetious in the slightest degree, but I shall try to give the noble Lord the Minister an example of how it is that one can listen to the advice of two separate people and elect to choose the advice of one or the other of them. The noble Lord, the Minister, might tender to me the perfectly proper advice that I have said enough and that I should sit down. My noble friends behind me may, out of sheer loyalty, tender the advice that in spite of what the noble Lord the Minister has said, I should continue with my speech.

The ultimate result is that I have not a conflicting duty here; I merely have the great benefit of the advice of such an eminent person as the noble Lord the Minister that I should sit down and the affection which I hope I shall receive behind me, in the advice tendered that I should continue. It is left to me, with both the dignity behind the Minister—or in this case, the Secretary of State and that of the authority—to take such advice into account. The Bill does not say that I have to follow such advice. The ability to tender that advice is obviously something that I believe gives a proper dignity to the local authority.

I am going to test the bona fides of the noble Lord the Minister. I did not say "the good faith" but especially used a Latin term, so that nobody should think that I was ever doubting the noble Lord the Minister's good faith. The noble Lord has said often—in answer to my noble friend Lord Sefton of Garston, for example—that there is no set law of the Medes and Persians which the Government intend to superimpose upon on this House, that regardless of the merit of any amendment there will not be a change of one word in this Bill. The noble Lord has said that the Government are open to the proper amending wisdom of this House and that this House will be listened to if it has a sensible amendment to make.

There cannot be the slightest objection to this amendment. It is not the desire of the Opposition merely to put forward amendments in order to delay the passage of this Bill. The noble Lord the Minister knows perfectly well that if he inserted the words proposed, the other place is unlikely to have any objection—and if it did, the matter would be debated in a couple of minutes. I test what is happening in this House, which I believe is all wrong from the point of view of Parliament itself. We are dealing with a Bill where, if I remember correctly, the other place did not go beyond Clause 2. So far, not one word has been amended at Committee stage and not one at Report stage.

The impeccability of the draftsman and the clearness of view of the Government are undoubted qualities which they both have—but it would be an extraordinary thing if this Bill has not, for good reason, to be altered by one single word. Is that because there is a policy not to alter this Bill, whatever suggestions are made? Or is it because your Lordships, for the first time in a long time in dealing with an important Bill, have not one contribution to make by way of amendment, even though the other place has not considered any but Clauses 1 and 2 of this Bill?

Lord Boyd-Carpenter

My Lords, I would never seek, whether in Latin, English or in any other language, to challenge the bona fides of the noble Lord, Lord Mishcon, although I have expressed before and will continue to express my admiration for his adroitness and flexibility, But I should like to take up the noble Lord's last remark, which related to the fact that, so far at any rate, the amendments which he and his noble friends have put forward have not been accepted by the House.

I have been present for the whole of this Sitting and have paid the best attention that I could to the amendments. I have to say to the noble Lord, Lord Mishcon, that in no single case have the amendments so far brought forward been acceptable from the point of view of those who support the policy of this Bill. They have all been, in greater or lesser degree, designed not to improve the Bill but to frustrate its purpose. The noble Lord, Lord Mishcon, knows perfectly well that that is true. It is, therefore, not altogether surprising that my noble friend at the Dispatch Box, who is the Minister in charge of the Bill, has advised the House to resist them and that the House in its wisdom has so far resisted them.

Let us take the current amendment as an example of that proposition. I should like to test it—if the noble Lord, Lord Sefton, will not get angry with me if I do so—by quoting the example of London. I know that the mention of London is like a red rag—perhaps given what is happening at County Hall that is not an inappropriate metaphor—to the noble Lord, Lord Sefton. Can your Lordships visualise the position of the London Transport Executive if at this stage of the proceedings, the formulation of the plan, they had advice tendered to them simultaneously by my right honourable friend the Secretary of State and by Mr. Livingstone and his colleagues? They would have only conflicting, completely differing advice, one advising moderation and restraint in expenditure and one advocating the maximum expenditure it was possible to envisage. That would, would it not, put the executive in a position of really very great difficulty, and perhaps in the same sort of position as those who sometimes sit, as the noble Lord, Lord Underhill, knows, on tribunals of inquiry to adjudicate on wage claims, when the decision so often tends to be not a clear-cut decision as to what is right but to some extent a compromise between wholly conflicting and completely challenging views.

So, my Lords, I must say with great respect to the noble Lord, Lord Mishcon, that the proposition which I venture to put forward is that the amendments so far have been amendments that really no Government believing in the policy of its Bill could be expected to accept, because they challenge the policy of the Bill. This particular amendment, on which the noble Lord, Lord Mishcon, saw fit to make this challenge, is the clearest possible example of that, for it would produce a situation which would be wholly unworkable, and the noble Lord knows that as well as I do.

Lord Sefton of Garston

My Lords, I never lose my temper over London; I merely say I do not want to discuss London.

Lord Boyd-Carpenter

Well, do not bother.

6.22 p.m.

Lord Sefton of Garston

My Lords, what happens when you are discussing London is that you are discussing with a lot of people in a self-contained community who are almost completely ignorant of everything that happens the other side of the Watford Gap. I think that too much attention has been given to London, but I do not get bad-tempered over it. I do not see why the noble Lord had to introduce it into this debate, because it clouds the issue. The issue is whether or not our amendment is a wrecking amendment or designed to a greater or lesser degree to defeat the purpose of this Bill. Well, it is not; the noble Lord put the wrong interpretation on it.

Let me interpret, if I may attempt the almost impossible, what the Government have in mind, giving them the benefit of the doubt, something I do not like doing and which strains all my resources to do, but I will do my best. The Government consider that some local authorities have gone too far in giving assistance to a certain section of people, the travelling public, and they have sought a Bill in order to remove what to them is that iniquitous action. But in doing that they do not want to go to war with local authorities; they only want to teach them the error of their ways. They certainly do not want to go to war with the executives; they think the executives are the finest thing since sliced bread in regard to the planning of transport.

So they say, "Now let's get sensible, lads. We will declare a ceiling on expenditure and we will call it the PEL", and introduce a new word into our language. "Having done that, we will then say, 'This is the way we are going to plan it—, and they really are attempting to plan it in a way which is acceptable to the local authorities and to the executives in order to get a concerted plan on transport. I assume I am being fair in saying that this is the Government's intention. There is going to be some slight uneasiness at first, but in time they are hoping it will all work out and we shall get a system of planning for transport finance which will be a success and will satisfy everybody. Good enough.

The first thing that that calls for is co-operation between the local authorities and central Government. I say that this is an important amendment because it seeks to stress the need for co-operation between local authorities and central Government—and believe me, if the noble Lord, Lord Boyd-Carpenter, does not think that this Bill has introduced a gulf between central and local democracy and parliamentary democracy, then he does not know what is happening the other side of the Thames, never mind the Watford Gap. Because that is what is happening. More and more the executives, seeing themselves being pilloried because of some of the mistakes in the capital city of our country, are subscribing to the point of view of two nations.

There is one easy way in which the Government can demonstrate their good intentions, certainly with no adverse effect on the policy of the Bill and, if anything, with a good effect on the policy of the Bill: accept this amendment and demonstrate that, just as the executives are being told to take into consideration the views of certain sections of our political life, they should take into consideration the views of the executive, the views of the authority and the views of central Government at the same time. That is the purpose of the amendment. It is a good amendment, and, much as I dislike the whole darned Bill, the amendment subscribes to the principle of the Bill, and, if anything, will help to remove that distrust which the Government have, by introducing the Bill, occasioned between local authorities and central Government.

Lord McIntosh of Haringey

My Lords, I have a simple question to ask the noble Lord the Minister; some might call it a naive question. It does seem to me that this amendment, so far from being, as the noble Lord, Lord Boyd-Carpenter, said, in opposition to the intention and spirit of the Bill, is very much in line with the intention and the spirit of the way the Government propose to enforce the Bill. I come back, with no apology, to the document Proposals for Legislation on Public Transport Subsidies: The Planning System. Information to be provided, where the model which has been discussed both in Committee and today does say: The DTP model will be made available to Executives and Authorities. It is well recognised, however, that some Executives and Authorities have already carried out substantial work in this field and that they may wish to continue developing their own approaches. Certainly there is scope for developing further the Department's own model and this could most usefully be achieved in co-operation with Executives and Authorities". Surely that is exactly what the amendment is seeking to achieve—that there should be this co-operation between the Secretary of State, the executives and the authorities in preparing the models which are to be the basis of revenue support.

Lord Bellwin

My Lords, the noble Lord, Lord Mishcon, prayed in aid the Romans with his Latin quotation, and he prayed in aid the Medes and the Persians. He was at his usual eloquent and most persuasive best. I think that some of the points he made, by themselves, I would have to say have some merit. That sounds terribly patronising, but the noble Lord knows that it is not meant to be that, but is meant sincerely.

Lord Mishcon

My Lords, so far the noble Lord is very kind.

Lord Bellwin

Well, my Lords, so far I am doing well, but I am afraid that I am going to have to disappoint the noble Lord in the end. The fact is that the Secretary of State has to decide and, to give guidance, he needs information. That is what Clause 3(5) is about. But the need of the Secretary of State for information does not prevent an authority from asking for its own advice with the plan, for example, under Clause 4(2), and giving its views to the executive under the consultation arrangements. I will come back to this point in a moment and to the point that the noble Lord, Lord McIntosh made, and indeed all noble Lords are making, as to why this amendment should be accepted.

I do not want to get on to making Second Reading speeches—heaven forbid! But I cannot let go the point made by the noble Lord, Lord Sefton. I wish that he had not brought in the point on local democracy and the GLC. If I was to pick that up again, as I did previously, he knows that I would be bound to say why the thrust of this legislation comes about. It is precisely because there has been what I consider to be an enormous attack upon local government by those within local government themselves who behave in such a totally unreasonable manner as to create a revulsion and a need for someone, as your Lordships have heard me say before, to protect the interests of all people, not just one sector. However, I will resist the temptation to go off on that tack.

A noble Lord

He has just said it.

Lord Bellwin

My Lords, I could go on much longer and the noble Lord knows that I could. I believe this deeply and with a passion equalling that which I know is sincerley held by noble Lords opposite. My concern about the amendment is genuinely that it would lead to confusion if the Secretary of State's requests under Clause 3(5) were ranked alongside those of the authority so that the executive could then choose between them. However, I recognise that here we are only talking about what I consider—and I know that noble Lords opposite feel differently—are very much the mechanics of the operation. I intend—and I say this despite the advice I have been given—to read carefully what has been said. The noble Lord knows that I can make no commitment, and that will doubtless be a disappointment to him. However, I intend to read what has been said and if I and my colleagues feel that there is the expressed intention of really making it a better and more logical procedure without adding to the confusion, which I fear is the case, then we would, of course, want to come back to it again.

That is as far as I can go. It is not as far as the noble Lord, Lord Underhill, wants, but let me hasten to assure him that it is a darn sight further than I am advised I should go. Nevertheless, it is something I would want to do because I believe it is right that if the intention is as said, and I accept that, then I shall want to see if the amendment does what is said. If it does not, then we certainly will not come back to it. However, we shall see.

Lord Underhill

My Lords, the noble Lord, Lord Bellwin, said that he did not want to give a Second Reading speech. He proceeded to give his introduction and then said he would not go further. Well, I have not given any Second Reading speeches at all but I would just like to say that if one looks at the overall rate of grant towards local spending as a whole it will be seen that it has fallen from over 65 per cent. in 1974–75 to under 53 per cent. in 1983–84; and whereas local spending between 1976–77 and 1983–84 would have risen by 97 per cent., central Government spending would have risen by 143 per cent. If we exclude social security payments, central Government expenditure will still have risen by 124 per cent.

Having said that, I do not want to go on any further but it is pretty clear that one could have a long debate on the whole question of local government spending in relation to central Government spending if one wished. I merely put it to the noble Lord that there is more than one argument to make on these matters. I thought at first that when the noble Lord said that Amendment No. 29 was not necessary he was going to say that he would accept the other two. However, my heart dropped because that was not the case. All Amendment No. 29 is saying is that they shall consult the authority, and take into account their advice". The noble Lord, Lord Bellwin, says that it will be automatic that they will take their advice into account. There are numerous references in subsection after subsection in the Bill about taking advice into account and taking guidance into account. He said that to accept these amendments would be to frustrate the purpose of the Bill and make the planning process unworkable. I think that is carrying the argument a little too far, because Clause 3(5) says: in preparing the plan the Executive shall take into account"— note, "take into account", not "must accept"— any advice given by the Secretary of State". What we are saying is that we should add at that point, or the Authority". We have had free legal advice from my noble friend as to what the legal interpretation and meaning of "or" is. But the subsection then continues: as to the amounts that it would be appropriate for the Executive to determine under subsection (3)". On a previous amendment we argued that it was not the job of the executive to determine revenue grants. Now the Government's view is that the authorities should not even give advice to the executive as to what should be the level of revenue grants, and yet it is the authority that pays it.

I do not want to argue the case much more. Again, there is a difference here but one should carefully read subsection (5) because it does not refer only to advice as to the amounts it would be appropriate for the executive to determine, but to the method of determining the benefit referred to and generally to the form and contents of the plan. Surely it is common sense that the authority, which is the responsible, elected authority that pays the grants, should be able to advise the executive before those things are done, and not afterwards. The noble Lord says that this would throw out the planning process. I should have thought that the planning process would have been helped if the body which provides the money, that is the body elected by the people—because that is what it is and the executive is not—gives this advice right at the outset.

Note the words, shall take into account the advice of the Secretary of State or the authority. If the noble Lord, Lord Bellwin, will say honestly that there is some substance in our amendment but that the wording could be improved, I will readily withdraw it, but he has not said that. I should like him to bear in mind the comments of my noble friend Lord Sefton. This Bill could do immense harm to relationships between the GLC and the six metropolitan authorities which the White Paper says cover one-third of the population of this country—I repeat, one-third of the population of this country. I should have thought, knowing as we do the respect that the noble Lord the Minister has for local government, that he would want this to be put in the clause in order to give some respect to the position of the elected authority. Therefore, we will stand by the position of an elected authority really being put into that position of trust, and we ask that the House declares its view on this.

6.38 p.m.

On Question, Whether the said amendment (No. 11) shall be agreed to?

Their Lordships divided: Contents, 45; Not-Contents, 84.

DIVISION NO. 3
CONTENTS
Airedale, L.	Lawrence, L.
Aylestone, L.	Llewelyn-Davies of Hastoe, B
Birk, B.	McIntosh of Haringey, L.
Boston of Faversham, L.	Masham of Ilton, B.
Brockway, L	Mishcon, L.
Bruce of Donington, L.	Molloy, L.
Cledwyn of Penrhos, L.	Ogmore, L.
Collison, L.	Pitt of Hampstead, L.
Crowther-Hunt, L.	Ponsonby of Shulbrede, L. [Teller.]
Denington, B.
Diamond, L.	Prys-Davies, L.
Elwyn-Jones, L.	Ross of Marnock, L.
Fisher of Rednal, B. [Teller.]	Seear, B.
Gaitskell, B.	Sefton of Garston, L.
George-Brown, L.	Stedman, B.
Hatch of Lusby, L.	Stewart of Alvechurch, B.
Hayter, L.	Stewart of Fulham, L.
Houghton of Sowerby, L.	Stone, L.
Jacques, L.	Strabolgi, L.
Jeger, B.	Underhill, L.
Jenkins of Putney, L.	Wallace of Coslany, L.
John-Mackie, L.	White, B.
Kilmarnock, L.	Winstanley, L.

NOT-CONTENTS
Ampthill, L.	Coleraine, L.
Auckland, L.	Colville of Culross, V.
Avon, E.	Colwyn, L.
Belhaven and Stenton, L.	Cottesloe, L.
Bellwin, L.	Cox, B.
Beloff, L.	Cullen of Ashbourne, L.
Belstead, L.	Dacre of Glanton, L.
Boyd-Carpenter, L.	Davidson, V.
Brougham and Vaux, L.	De La Warr, E.
Burton, L.	Denham, L. [Teller.]
Caithness, E.	Digby, L.
Campbell of Alloway, L.	Elles, B.
Cathcart, E.	Elliot of Harwood, B.

Elton, L.	Morris, L.
Ferrers, E.	Mottistone, L.
Ferrier, L.	Mountevans, L.
Gardner of Parkes, B.	Mowbray and Stourton, L.
Glanusk, L.	Newall, L.
Glasgow, E.	Northchurch, B.
Glenarthur, L.	Nugent of Guildford, L.
Greenway, L.	Orkney, E.
Hailsham of Saint Marylebone, L.	Portland, D.
	Renton, L.
Henley, L.	St. Davids, V.
Hives, L.	Salisbury, M.
Holderness, L.	Soames, L.
Hornsby-Smith, B.	Somers, L.
Hunt of Fawley, L.	Spens, L.
Hylton-Foster, B.	Strathspey, L.
Kinnaird, L.	Sudeley, L.
Lane-Fox, B.	Swansea, L.
Lauderdale, E.	Swinfen, L.
Lindsey and Abingdon, E.	Swinton, E. [Teller.]
Long, V.	Teviot, L.
Lucas of Chilworth, L.	Trefgarne, L.
Lyell, L.	Trenchard, V.
Macleod of Borve, B.	Trumpington, B.
Mancroft, L.	Tryon, L.
Marley, L.	Vaux of Harrowden, L.
Massereene and Ferrard, V.	Vickers, B.
Merrivale, L.	Vivian, L.
Monk Bretton, L.	Ward of Witley, V.
Montgomery of Alamein, V.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 12 and 13 not moved,]

6.46 p.m.

Lord McIntosh of Haringey moved Amendment No. 14:

Page 3, line 43, at end insert— ("(6) Any advice or guidance given under this Act by the Secretary of State as to the method of determining benefits or estimates or as to the form of the plan—

1. (a) shall only be given in accordance with principles to be applied to all Authorities and Executives;
2. (b) shall set out the matters taken into consideration in preparing the advice or guidance and contain a reasoned justification and the matters taken into consideration for each item of advice or guidance.").

The noble Lord said: My Lords, by leave of my noble friend, this amendment contains some part of an amendment which was moved in Committee to which the noble Lord, Lord Bellwin, gave an answer which gave us cause for a modicum of hope that he was prepared to reconsider the issues involved, that he appreciated that there were some principles involved which deserved reconsideration, and that he might be able to say something friendly to us at this stage or, perhaps, at Third Reading. I do not know whether he is going to justify that modicum of hope that he gave us. I suspect not in view of what has taken place so far on this Bill, but I shall proceed on the assumption that he has appreciated that there are reasonable points here which deserve further attention, and I shall treat with them again only very briefly.

What is proposed here is a new subsection in which there are two parts. First of all, there is a statement that the guidance given: shall only be given in accordance with principles to be applied to all Authorities and Executives". The noble Lord the Minister said in Committee that this would seek the application of a standard formula or formulae. For the life of me, I cannot see how that can be the case. It does not say that there should be a standard formula or formulae. What it says is that there should be principles applied to all authorities and executives.

That is not an idle phrase. It is a phrase which appears in the legislation about rate support grant. It has never caused any difficulty in the past. It has never made it impossible for central Government to express their views very clearly to local authorities either about the general level of expenditure of local government as a whole or about the level of expenditure of particular local authorities. In all parts of local authority finance, particularly and sadly in the last four years, there have been very specific levels of expenditure laid down for individual local authorities. That has been within the terms of the rate support grant, which says that the principles applied shall be applicable to all authorities and executives. So there is no practical difficulty about the Government agreeing to this amendment.

Secondly, the amendment says that any advice given by the Government: shall set out the matters taken into consideration in preparing the advice or guidance and contain a reasoned justification".

Again, I really cannot see what objection the Government can have to that statement and to that being enacted with this legislation. It is already clear—and the noble Lord, Lord Bellwin, has repeated it within the last half hour—that the Government are going to seek detailed information from local authorities, and are already doing so, in order to determine the level of revenue support which they consider to be appropriate. It is also already clear that the Government are going to be very precise about the level of support which they consider to be appropriate.

The only missing gap here is that the Government are not being required by the Bill to set out their justification for the conclusions to which they have come. Surely that is contrary to, I was going to say "natural justice", but I shall put it lower than that and say the most simple business principles, that when you are dealing with other people about money it is your obligation not only to say to what conclusion you have come but why you have come to that conclusion, in order that there can be some type of meaningful dialogue, as the noble Lord the Minister has indicated he would wish to see. Therefore, it is impossible to see from the Minister's comments in Committee, or from the nature of the wording which is proposed here, on what basis the Government can rationally reject the amendment.

I would make only one further comment. In Committee the Minister said that these were issues on which he thought that there should have been detailed discussions with the local authority associations, and particularly with the Association of Metropolitan Authorities. My noble friend Lord Underhill spelt out exactly what negotiations and discussions there had been between the AMA and the Government. In other words, he made it clear that those consultations had already started and that there was no reluctance on the part of the AMA to take part in negotiations. The noble Lord the Minister said that he would look to further discussions and consultations both before and after the passage of the Bill. I would ask him now, in his reply, not only to indicate his response to the arguments that I have put forward but to tell us factually what further consultations and discussions have taken place and what effect they have had on the Government's thinking. I beg to move.

Lord Bellwin

My Lords, when we discussed this issue during the Committee stage I indicated that it was important that in giving advice the Secretary of State should have sufficient flexibility to take account of the individual circumstances of each area. This really is important. It is true, as this new subsection seems to recognise, that certain aspects of the Secretary of State's advice will contain some common elements, particularly on the method of assessing the benefits of grant. Nonetheless, the difficulty with the amendment is that it would create a system that we fear will be too inflexible and would not provide sufficient flexibility to take account of local factors and local circumstances. I know that that is certainly not the intention of the noble Lord, Lord McIntosh.

Lord McIntosh of Haringey

My Lords, would the noble Lord the Minister be good enough to indicate in what way he thinks that inflexibility has arisen from the use of the same formula as that used in the case of the rate support grant?

Lord Bellwin

My Lords, perhaps the noble Lord will allow me to develop the matter as I go along. The fact is that I do not think that this new provision would at all help the authorities or the executives. The new subsection 6(b) would require the Secretary of State to provide detailed explanations of his reasoning in arriving at his advice and guidance. The result would he to make the issuing of that guidance a cumbersome, bureaucratic and legalistic process. I do not want to see this, nor, I suggest, do your Lordships, the authorities or the executives.

The noble Lord has asked how I equate this with the rate support grant. Let me remind him that the strongest advocates of the present system of block grant and rate support grant would not claim that it is the simplest of things to follow or understand. Indeed, I see many delegations of people who require further explanation. I am sure the noble Lord would not want me to challenge him to give his interpretation of how the 62 components in the settlement are laid out and are there for all to see. However, I digress slightly only because the noble Lord asks how I say that this would be difficult when we have it in the rate support grant.

Having said that, let me hasten to add that I am by no means saying that the formula at present is other than a very fair one; but, frankly, it seeks to do different things. It seeks to take a finite sum of money and to divide it between some 430 authorities on the basis of equalisation taking into account needs and rateable values. With great respect to the noble Lord, we are really into two quite different areas. I understand the thrust of what he is saying and how he tries to make the same point; but he would have to concede to me on this one at least that the rate support grant formula, the block grant, is not too good an example to pray in aid.

I do not want to see the processes become more cumbersome and I know that that is not anyone's wish, least of all the noble Lord who moved the amendment, but we think that that would be the effect. We fear that the guidance on protected expenditure levels would become a more formal and less practically useful procedure if this were to happen. I understand your Lordships' earlier concern to know the basis on which the guidance figures are arrived at, and I made a statement about this on behalf of the Government at an earlier stage in your Lordships' House. However, this part this amendment would turn a relatively simple procedure for issuing advice and guidance into a procedure which was more detailed, time-consuming and, in the end, less helpful. Further, it would involve detailed comments from the Secretary of State on the proposals of the authority which would amount to an increased degree of interference in the democratic process which opponents and, indeed, some supporters of the Bill have been at pains to prevent.

Opponents of the Bill really cannot have it both ways. They have criticised the Bill's intention that, under Clause 4(5), the Secretary of State may indicate respects in which the plan would need to be altered, while asking under this amendment for the reasons for the guidance. I respectfully submit that those notions are somewhat contradictory. It is really all about balance. The Government believe that the balance in the Bill is right and that is why we are resisting this part of the amendment.

In the previous debate on this issue I gave at some length—and the reference is Hansard for Tuesday, 1st March, columns 1055 and 1056—a description of how the Secretary of State was to arrive at his guidance. I am sure your Lordships do not wish me to repeat all that again, but it is there for all to see and I refer your Lordships to it.

I should like to make one more point. The noble Lord, Lord McIntosh, referred to the words in the first part of the amendment and said they were indeed similar to RSG. I hope that I have covered that point. I think he has probably gathered by now that this is one subject upon which I would dearly like to expand at great length and quite off-the-cuff. I assure him that I deal with it almost every day of my working life.

I am sorry that I cannot be more helpful on this point. I recognise that this, like the previous amendment, is setting out to do something helpful in the working of the Bill, and I am not averse to that—far from it. But for the reasons given, I cannot accept the amendment.

Lord Underhill

My Lords, I support my noble friend in his amendment. The noble Lord, Lord Bellwin, has said that we cannot treat each area as being the same. I would like him to point out anything in this amendment which would suggest that we are not going to take account of the different characteristics and circumstances of each of the metropolitan areas. We have been making the point right the way through that it is the Minister, the Secretary of State, who cannot try to treat things as a matter of methodology; each one has to be treated differently. In any case, the amendment is saying that there should be a method of determining benefits in accordance with principles to be equally applied. It is the principles that we want to he the same. The principles determining what should be done in one area should be the same as regards another area.

We are concerned with the principles and not the details. If the noble Lord says that this cannot be done, I presume that he is discounting the document which I have in my hand entitled Urban Public Transport Subsidies: An Economic Assessment of Value for Money—Technical Report. What is all that about, unless it is trying to determine a common model for all the authorities? The noble Lord said that the system must be flexible to take account of all local factors and circumstances. He also said the we must not be bureaucratic. The noble Lord kindly sent me the chronology of the planning process. This shows the bureaucratic nature of the planning process. It takes almost 12 months before one arrives at the ultimate determination.

At the Committee stage, during which the very lengthy amendment, of which this amendment is a considerably abbreviated version, was moved, my noble friend Lord Mishcon asked whether anything could be written into the Bill about a consultative procedure. In reply the Minister said that although he could give no assurance about this. he would consider the points made, consult his colleagues and find out exactly the current feeling. I think I am fair in commenting that in his reply the Minister has made no reference to that.

What are the views of the Secretary of State about writing into the Bill a consultation machinery? That is the question that my noble friend Lord Mishcon asked at the end of the last debate on the lengthy Amendment No. 22 during the Committee stage. I think that the House would like to know the current feeling on this. If the Government still have not made up their minds, I have not the slightest doubt that my noble friend Lord McIntosh will readily withdraw his amendment on the understanding that the Government are still prepared to consider writing some consultation machinery into the document.

There is nothing in the amendment which the Government cannot accept. It does not say that there should be the same details laid down for everyone—for the metropolitan authorities and for the GLC. We are merely concerned that the method and the principle should be the same. I cannot understand why the Secretary of State is not prepared to give a reasoned justification for taking certain decisions. I am certain that when the noble Lord. Lord Bellwin, was at Leeds he expected a Minister to tell him why he wanted certain changes made and why he was taking certain decisions.

I have seen quite a number of letters from the permanent official at the Department of Transport to authorities giving reasons why certain information must be given in this document. Why should this not be written into the Bill? If the Minister is not prepared to look at this aspect once again and see whether something can be written in, he will be creating a deliberate upset with local authorities which ought to be avoided. I hope that he will consider this before my noble friend replies.

Lord Bellwin

My Lords, by leave of the House, perhaps I may make a quick response. The noble Lord, Lord Underhill, knows that if one starts trying to write into a Bill a consultation process, where does it begin and where does it end? He is right when he says—and indeed, the noble Lord, Lord Sefton, made the point earlier and in my reply to him I did not respond to it—that it is very important that at the end of the day the relations with local authorities should be as good as possible. We certainly want that; no one wants it more than I. Anything that we can fairly do within the Bill, we will do. But to write in a consultation process is not a starter.

At times I have staggered through many Bills, if I can put it that way, and every time one talks about consultation the mind starts to boggle. Where do you start and where do you finish? One of the unhappy incidents in regard to this particular Bill is that at the time when the Government wanted consultation it was not readily forthcoming. Indeed, I am glad to say that the associations which have most contributed—not least the AMA—are now coming forward and therefore at the end of the day they, local government as a whole and the Bill will benefit.

Therefore, I am an absolute advocate of consultation. But that is vastly different from seeking to write in a Bill, chapter and verse, something that can be challenged on any word, on matters where you are talking to people to get advice. I do not think that that is a starter. I am sorry, but it is not something I can accept.

Lord McIntosh of Haringey

My Lords, I introduced this amendment in a very low key way, expressing a modicum of hope that the statements which the noble Lord, Lord Bellwin, made in Committee might have borne some fruit—that he might be prepared to go in for further consultation with the local authority associations; that he might recognise that there is a real difference between accepting that there should be common principles applying to all authorities and saying that every full-stop, comma, word and letter should be the same for all authorities; and that we might see some hope of progress or movement on the part of the Government.

I am sorry to say that, despite being invited to do so again by my noble friend, the noble Lord the Minister has made no progress whatever in that direction. He has given no understanding or indication that continuing negotiation might produce a better Bill. He said just now that we "might have a better We shall not get a better Bill if every amendment that is put forward is treated as a straightforward party political amendment by the Government—because it is certainly not being treated in that way by this side—and if the Government are determined—as they appear to be—that this Bill shall pass through this House without a single comma being changed and shall not go back to the other place. That is the truth of the matter. It does not matter what we say here now, the Government are determined not to have any changes, and no amount of reason will change that.

The emollient words of the Minister at the Committee stage have had no effect. I personally am sadly disappointed in the outcome of what I had thought were reasonable discussions. They may have been lengthy, but they were reasonable discussions at the Committee stage. I am disappointed that we should come to this stage now. However, I quite appreciate that it will not be helpful to continue to divide on every amendment before the House and, having no feeling whatever that we have been given any indications of progress, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Denham

My Lords, I think that this is probably a convenient moment to break for dinner and, therefore, I shall be moving that further consideration on Report be now adjourned. But before I do so, perhaps I could say that we shall not be starting reconsideration on Report before ten minutes to eight.

I beg to move that further consideration on Report be now adjourned.

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