Lords Sitting of 28 March 1983

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chichester.

Brain Tumours: Detection and Treatment
Lord Auckland: My Lords, I beg to leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what facilities are available in National Health Service hospitals for scanning to detect brain tumours and in how many hospitals in England, Wales and Scotland can surgical operations be carried out when tumours are detected.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, scanning facilities are available in about 100 centres in the National Health Service in England, Wales and Scotland. There are some 40 neurosurgical centres where operations to remove brain tumours are normally performed.
Lord Auckland: My Lords, I thank my noble friend the Minister for that generally satisfactory Answer. Perhaps I may put to him three very brief supplementary questions. First, in the case of the child in Sussex who went to America for treatment at large cost, can my noble friend say what liaison took place between the local area health authority, the child's doctor and other relevant bodies as to the availability of treatment in this country? Secondly, what is the general liaison between area health authorities and general practitioners, particularly in the case of those on hospital waiting lists for treatment of this kind? Thirdly, is there any chance of more hospitals being able to treat this condition, which, if it is treated in its early stages, can often, I understand, be completely cured?
Lord Trefgarne: My Lords, with regard to the particular case to which my noble friend referred, I understand that the consultant was fully aware that the kind of treatment which the parents appeared to prefer was available in the United Kingdom, but it was the parents themselves who chose to have their child treated in the United States—as, of course, they were absolutely entitled to do. As for the second point which my noble friend raised about liaison between doctors and these facilities, it is of course open to consultants to refer a patient to a particular hospital where he knows a particular kind of treatment is available, even if that hospital is outside the region within which the consultant happens to work. As for the general availability of these facilities to which my noble friend referred, as I said in my original Answer, there are already quite a number. More are certainly planned, but this is principally a matter for the regions and the districts.
Lord Wells-Pestell: My Lords, may I ask the noble Lord the Minister if he is in a position to say whether the scanners are strategically placed so that it is possible for a person with a suspected tumour on the brain (I have an emotional involment in this, going back some years) to be scanned within a reasonable period of time?
Lord Trefgarne: My Lords, I cannot claim that these facilities are available in each and every region. There are two regions at present which do not have these facilities but in both cases they are planning to acquire them within the reasonably near future. As for the even spread of these facilities, I have to give an unsatisfactory answer to the noble Lord: It is not perfect at present. That is why it is possible for consultants to refer patients to other facilities outside their region.
Baroness Bacon: My Lords, is not one of the difficulties the difficulty to which my noble friend Lady Masham of Ilton referred some time ago; namely, that if a hospital which is giving specialised treatment is open to an area much wider than the area which the health authority covers the cost has to come out of the total amount of money allocated to that area?
Lord Trefgarne: My Lords, that is a rather different problem. When the noble Baroness, Lady Masham of Ilton, referred to that matter she was thinking of hospitals which might perhaps be unique in the National Health Service, being the only places in the country which can provide a particular service, or perhaps one of just two or three. As I said in my original Answer, there are at least 100 of these facilities in the National Health Service. Therefore, the kind of problems which the noble Baroness described do not apply.
Lord Auckland: My Lords, may I ask my noble friend one further question? He mentioned that further hospital facilities are being provided. It was very good to hear that, but can my noble friend say whether any improvement is foreseen in the outlying areas of the country? I am thinking of the North of Scotland and North Wales, for example.
Lord Trefgarne: My Lords, in the National Health Service it is of course necessary to use the funds that we can make available in the best possible way. I am not sure that providing one of these facilities in every location where it could possibly be needed would be the best use of scarce funds. The scanning facilities cost upwards of £½ million to install and something like £90,000 a year to run. If there are just a few patients to be examined in this way, there may be better uses for sums of that kind.
Baroness Masham of Ilton: My Lords, may I ask the Minister whether he is aware that a great deal of money for scanners has been raised voluntarily by the public? This shows how important early detection is. Would the Minister agree that, for patients from the Outer Hebrides, North Wales and the rural areas, a good cross flow across district and regional boundaries is very important?
Lord Trefgarne: My Lords, I agree with the last part of the noble Baroness's supplementary question: that where facilities cannot be made available in every location, then patients should be facilitated to be moved to other locations for the purposes of these particular diagnostic procedures or, in due course, operations, if that is proved necessary. I also agree with the noble Baroness that voluntary funds have played a very important part in financing some of these facilities, and I think that is a most admirable thing.
The Earl of Halsbury: My Lords, can the noble Lord the Minister give the House any information on the annual incidence of these operable tumours as a background to one's judgment of the adequacy of the facilities about which we have been speaking?
Lord Trefgarne: Not without notice, my Lords. Perhaps I might find what figures I can and then write to the noble Earl.
Lord Cledwyn of Penrhos: My Lords, the noble Lord, Lord Trefgarne, has been extremely helpful in the replies he has given. Can he confirm to the House that there is no difficulty about patients crossing boundaries between one health authority and another? As I understand it, patients who suffer in this way in North Wales are able to cross the boundary into Merseyside, where these facilities are available.
Lord Trefgarne: My Lords, I can confirm what has been said by the noble Lord, Lord Cledwyn of Penrhos. It is open to the consultant to refer the patient to whichever hospital he considers necessary for the examination or treatment of the patient concerned.
Lord Wallace of Coslany: My Lords, in order to assist the many noble Lords who have put supplementary questions of some importance, can the noble Lord the Minister prepare a list of the hospitals where these facilities are available—not only scanners but operations as well? If it is impossile to publish this information in Hansard, perhaps a list can be made available in the Library in due course.
Lord Trefgarne: My Lords, one of the difficulties of proceeding along that course is that the list could be changing constantly, because these facilities are being added to all the time, as I said. Also, some facilities are not the same as others; that is to say, some of the scanners have high resolution attachments which are not available in every case. I am not certain, therefore, that such a list would be as helpful as the noble Lord imagines; but perhaps I might look into the matter and write to him.
Lord Elwyn-Jones: My Lords, I believe that what concerns my noble friend Lady Bacon is: who will foot the bill when a case is transferred to another regional authority? Will it be the regional authority who receives the patient, or will it be the referring authority? I believe that was the point which worried my noble friend Lady Bacon.
Lord Trefgarne: My Lords, the RAWP formula, as it is called—the Resource Allocations Working Party formula—provides for what are called cross-boundary
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flows. Any significant action of this kind would therefore be covered by that formula. I understand that in individual cases it is open to the relevant local health authorities to agree between themselves the funds to be transferred.

Immigration Ordinances of Dependent Territories
2.46 p.m.
Lord Avebury: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether any of the dependencies have changed their immigration ordinances since the British Nationality Act 1982 received the Royal Assent; whether they will place copies of any such alterations in the Library; whether they will make an estimate of the number of British dependent territories' citizens who have no right of entry to any territory for which the United Kingdom is internationally responsible; and whether they will produce an analysis of such persons, showing their respective origins and numbers.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, Hong Kong, Gibraltar and Montserrat have so far changed their immigration ordinances. Copies will be placed in the Library as soon as they become available. The other dependent territories are in the process of introducing similar changes. However, since such legislation is the responsibility of the individual territories, it is not possible at this stage to provide the assessments and analyses for which the noble Lord has asked. We expect that persons who held belonger status on 31st December 1982 will continue to hold that status.
Lord Avebury: My Lords, is it not the case that after this change, in the Gibraltar ordinance persons born in the territory of Gibraltar will no longer necessarily have the right of entry into that territory; that this applies also to Bermuda; but that, whereas the Gibraltarians have a right of registration as British citizens, the people born in Bermuda who do not have access to that territory may not be able to get British citizenship or, indeed, any other? Does the noble Lord, the Minister not agree that it is necessary to have comprehensive advice available for the agencies who will have to tell people about these matters? What information leaflets have the Government made available to CABs and others who will have to deal with questions of BDTC status?
Lord Elton: My Lords, until the ordinances are passed in the respective places it is difficult to be specific. I cannot therefore make a categorical statement at this stage, but we do not expect many people, if any, who were formerly citizens of the United Kingdom and colonies, to have their status vis-á-vis the dependent territories changed as a result of the change in the description of their citizenship following enactment of the British Nationality Act
**
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1982. Having said that, I accept that where it is appropriate for advice to be made available it should be made available.
Lord Avebury: My Lords, I wonder whether the noble Lord the Minister is aware of the particular case of St. Kitts, Nevis, where there have been anxieties that on independence, which will be conferred on the territories later this year, there might be a change in the status of persons living in this country? Will the noble Lord the Minister give an assurance that those persons will not have their status changed and that they will be eligible for British citizenship in the same way as were those from Belize?
Lord Elton: My Lords, I cannot give undertakings of the nature which the noble Lord, Lord Avebury, has asked me to give, but I can take his concern to my right honourable friend. If it is appropriate for him to do so, he will write to the noble Lord.
Lord Avebury: My Lords, is the noble Lord the Minister aware that such an undertaking has already been given by his right honourable friend the Minister, Mr. Waddington? I am only asking for this to be confirmed on the Floor of this House so that others may read of it.
Lord Elton: My Lords, if the noble Lord, Lord Avebury, has had an undertaking, it is not necessary to give another. If he has not, it would not be appropriate for me to give one.

British Council: Sponsored visits from South Africa
2.49 p.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many persons from South Africa were sponsored by the British Council on visits to the United Kingdom in 1982, and of these, how many were European, African, Indian, and other ethnic origin, respectively.
Lord Skelmersdale: My Lords, a total of 36 people from South Africa made short-term visits to the United Kingdom in 1982 under the British Council's sponsorship. The British Council do not select their visitors on the basis of their ethnic origin. Statistics on this point are therefore not available.
Lord Brockway: My Lords, while greatly admiring the work of the British Council in many respects, would not these figures, if made available, show great discrimination? Should it not be the policy of the British Council, in view of the opposition to apartheid by all parties in Parliament, to encourage those who are deprived of opportunities in South Africa due to their ethnic origin? If so, should not more of those invited, in this diversified population, represent those who are deprived?
Lord Skelmersdale: My Lords, while the council does not record this information in its records, I would certainly imagine that most of the visitors were nonwhite. The British Council representative in South Africa selects visitors on the basis of their specialised interests and the potential benefits they may derive from observing at first hand the work of institutions and organisations in Britain corresponding to their own fields of interest and activities. I rely on the second part of my original Answer: that ethnic considerations do not enter into this particular field.
Lord Hatch of Lusby: My Lords, is the noble Lord not aware that his first Answer is very unsatisfactory. Is it not the case that in South Africa every individual is classified, and is so classified in his or her passport, according to racial origins? Should it not, therefore, be perfectly simple for the British Council to supply the Minister with the information that my noble friend has asked for?
Lord Skelmersdale: Surely, my Lords, if they kept records, but I understand they do not.
Lord Brockway: My Lords, does not the evidence of teachers in South Africa, as well as such scholastic records as are available, show considerable potentialities in writing, music and the arts among Africans, Indians and those of the coloured population? Should not they be given the opportunity, being deprived of it in South Africa, of the developed facilities that there are in this country?
Lord Skelmersdale: My Lords, they are given the opportunity and they are certainly not deprived of it in this country. As I have said, I think now twice in my answers this afternoon, ethnic considerations one way or the other do not enter into it.
Lord Bruce of Donington: My Lords, will the noble Lord confirm to the House that his department made specific inquiries on this matter of the British Council?
Lord Skelmersdale: Yes, my Lords, most certainly they did, and the discoveries are as I have reported them this afternoon to the House.
Lord Molloy: My Lords, in so far as there is grave concern throughout the country, and I think there is also deep concern in this Chamber, regarding the central issue of my noble friend's Question, will the Minister please write to the senior authorities of the British Council in South Africa drawing their attention to this question and answer period this afternoon and asking them if they will be kind enough to provide their comments, which possibly he could then make as a statement in Hansard?
Lord Skelmersdale: My Lords, I am not quite sure of the propriety of the latter suggestion of the noble Lord, Lord Molloy. Nonetheless, I have no doubt that the British Council take great note of everything referring to them which is said in this House or in another place. If they do not see the particular Hansard of today, I shall make sure it is drawn to their attention.

GLC Financial Grants
2.55 p.m.
Baroness Trumpington: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will seek from the GLC a complete list of all the projects and community activities that lie outside its statutory obligations upon which it is spending ratepayers' money.
Lord Skelmersdale: No, my Lords. Local authorities commonly incur expenditure on activities which go beyond their strict statutory obligations. If my noble friend has in mind activities which lie outside statutory powers, any expenditure on such activities would be a matter for the authority's auditors, and ultimately for the courts.
Baroness Trumpington: My Lords, I thank my noble friend for that reply. Would he agree that the GLC has a strange sense of priorities when it withholds the annual grant of £62,000 to the Boy Scouts and splashes out £500,000 on a community centre for homosexuals?
Lord Skelmersdale: My Lords, I can neither confirm nor deny that. All I know is what I have read in the press, and what I suspect my noble friend has read. For good or ill the Greater London Council exists, and it is within its rights to spend money in accordance with statutory powers on any local project which seems to it fit. Any dissatisfied voter has a remedy in his or her own hands at the ballot box.
Baroness Gaitskell: My Lords, may I ask the Minister this question. Surely he would agree that this is an extraordinarily insensitive and unsympathetic Question to be put at this time about young people, because they bear the main brunt of unemployment. Surely we should not be fiddling around with this kind of Question.
Lord Skelmersdale: My Lords, as has been pointed out many times from the Government Dispatch Box, the Government are not responsible for the Questions on the Order Paper.
Baroness Trumpington: My Lords, would my noble friend be able to tell me how one obtains the information which has caused the GLC to give a grant of £5,000 to Bedside Manners Company Limited and £35,000 to the Karl Marx Centenary?
Lord Skelmersdale: My Lords, I am not quite sure that I can advise my noble friend as to which specific person to go to, but I have no doubt there is within the Greater London Council a publicity officer of some sort who would doubtless be absolutely delighted to give my noble friend the information that she requires.
Lord Jenkins of Putney: My Lords, would the noble Lord explain to his noble friend that the GLC, as distinct from this House, is an elected body and that
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the electorate of London has the determining matter in its hands rather than the electors of Trumpington?
Lord Skelmersdale: My Lords, the noble Lord, Lord Jenkins, is perfectly correct. This is why in my first supplementary answer I referred to the ballot box.
Lord Monson: My Lords, would the noble Lord not agree that for many families on average incomes the reduction in direct taxation announced by the Chancellor in his Budget and the increased child allowances are almost totally wiped out by the increased rates bill that they face as a result of these extravagances?
Lord Skelmersdale: My Lords, statisticians will tell the noble Lord that comparisons are always dangerous.

National Coal Board: Chairmanship
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Avon will, with the leave of the House, repeat a Statement to be made in another place on the National Coal Board chairmanship.

Medical Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I beg to introduce a Bill to consolidate the Medical Acts 1956 to 1978 and certain related provisions, with amendments to give effect to the recommendations of the Law Commission and the Scottish Law Commission. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

Business of the House
Lord Denham: My Lords, on behalf of my noble friend the Lord Privy Seal, I beg to move the Motion standing in her name on the Order Paper.
Moved, That Standing Order 43 (No two stages of a bill to be taken on one day) be dispensed with for the purpose of enabling the Consolidated Fund (No. 2) Bill to be taken through all its stages this day.—(Lord Denham.)
On Question, Motion agreed to.

Consolidated Fund (No. 2) Bill
The Bill was brought from the Commons, endorsed with the certificate of the Speaker that the Bill is a Money Bill, and read a first time.
Then Standing Order No. 43 having been dispensed with (pursuant to Resolution), the Bill was read a second time; the Committee was negatived; the Bill was read a third time, and passed.

Currency Bill
Read a third time, and passed.

Transport Bill
3 p.m.
Read a third time.
Clause 2 [Financial duty of Executives]:
Lord Underhill Lord Underhill moved Amendment No. 1:
Page 2, line 35, at end insert—
("( ) Where the plan prepared by the Executive under section 3 below and approved by the Authority under section 4 below so provided, subsection (1) above shall apply to the relevant period described in subsection (1) of section 3 below instead of to any accounting period").
The noble Lord said: My Lords, this is the third endeavour to introduce some business common sense in relation to the period in which to balance revenue against charges. Perhaps I may recount to your Lordships a brief history of the amendments. In Committee an amendment was introduced to provide that instead of any deficit being met in the next accounting period—that is, in the following year—it should be made up within the period of three years by reference to "the relevant period" of the three years for the plan, provided for in Clause 3(1). On that occasion the noble Lord, Lord Bellwin, said that although subsection (2) of this clause provides that any deficit shall be made good in the following year, this duty "does not provide a financial straitjacket". He stressed that the requirement on the executive to break even so far as is practicable did not mean that if an executive was faced with an unavoidable deficit it would he forced, come what may, to make good that deficit in the following year if it was impracticable to do so. The noble Lord, Lord Bellwin, went on to say that if the deficit arose from circumstances beyond the control of the executive and the authority,
"the authority might decide that some increased revenue support was necessary to make good the deficit in the following Year, and the Secretary of State will take that into account when considering his guidance on the level of protected expenditure."—[Official Report, 28/2/83; col. 968].
As the Minister suggested that there was some flexibility, the amendment was withdrawn so that the position could be considered.
On Report a different amendment was brought forward to the effect that, instead of making good any deficit in the following accounting period, this should be changed to "three … accounting periods." On that occasion it was stressed that any assurance that the Secretary of State will take any unavoidable deficit into account when considering the guidance on the level of protected expenditure for the following year (which was the statement made by the Minister) is not statute law. That provision is not in the Bill; it is an assurance given by the Secretary of State. On that occasion the noble Lord, Lord Lucas of Chilworth, again stated 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
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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."—[Official Report, 17/3/83; col. 852].
At that stage other noble Lords emphasised that it would be good common sense to allow a deficit to be cleared within the three-year period of the plan. My noble friend Lord Sefton of Garston suggested that to meet the Government's view of the need for financial discipline an amendment was needed which would give an executive the freedom to clear a deficit in the three-year period of the plan but at the same time would give the Government the power to restrict any abuse. The noble Lord, Lord Lucas of Chilworth, as the Minister, said he would consider what had been said. I said that, likewise, on this side we would consider the position, and as there was one further stage of the Bill we would see what could be done. Since then a letter has been sent by the Minister to my noble friend Lord Sefton (I should say that the Minister kindly sent me a copy, for which I am grateful) explaining the situation but again emphasising that there was no need to defer for three years when
"the courses available include the power to vary fares, costs, grant and use of reserves.".
The proposed amendment now before your Lordships refers to the procedure under Clause 3 for the preparation of the plan to cover the next three years and the approval of that plan under Clause 4. The amendment then states that references to the relevant period in those clauses—that is, Clauses 3 and 4—shall be to the next three years, stated in Clause 3(1) as being "the relevant period", and not to any accounting period, which is for one financial year.
I believe that the amendment will meet what the executives want and will also meet the concern of the Government. The amendment in no way interferes with the provision for the preparation of the plan by the executive and that for its approval by the authority. It does not interfere with the power, which the Secretary of State wants, to give advice and guidance under the various stages of the process; nor with his power to give advice on the protected expenditure level. Therefore, any suggestion that it will encourage financial indiscipline does not arise. In our view the amendment will make for business common sense. It will enable the executive and the authority to plan so that any unexpected deficit could be cleared over three years, instead of the following year, without removing any of the other powers contained in Clauses 3 and 4. I beg to move.
Lord Lucas of Chilworth: My Lords, as the noble Lord, Lord Underhill, has reminded us, we have had some interesting and really quite long discussions on this point during previous stages, particularly on the financial duty imposed on an executive under Clause 2. Amendments have been put down to enable an executive to make good deficits over a three-year period rather than in the next year, and we have explained on a number of occasions why such loose financial management is unacceptable. This amendment is only slightly different from the others we have considered in that it enables an executive to break even over a three-year period ("the relevant period" to which the noble Lord referred) rather than

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on an annual basis, provided that this is proposed in the annual three-year plan.
There might appear to be some logic in applying a break-even duty to the same period as that for the plan provided that the executive adopt that course at the time. Nonetheless, the amendment is quite unacceptable because in practice it would enable an executive to circumvent completely its financial duty. It would enable that executive to accumulate larger and larger deficits. As I said, an executive might propose in, say, its first three-year plan that it needs to break even only by the end of the three-year period. Then the following year when they renew the plan they could propose again to break even only at the end of the next three years. Deficits therefore under this kind of arrangement—the arrangement which is suggested certainly to me by the amendment—could be rolled forward quite indefinitely. Indeed, one might go so far as to suggest that a deficit could deliberately be created and rolled forward indefinitely. At the same time they could incur further deficits in each succeeding year.
That is briefly why we could not accept the amendment. I hope that I have shown that the amendment would enable an executive to accumulate ever-increasing deficits without, in practical terms, any obligation on them to make good. The amendment would be a recipe, as I have said, for loose and, indeed, profligate financial management. It cannot be in the interests of the executives, the authorities, and equally—if not more importantly—the ratepayers and the taxpayers, who might find their money wasted on excessive subsidies and increasingly inefficient services. It is not unreasonable, I suggest to your Lordships, to expect executives to exercise that taut financial control which is such a part and a requirement of this Bill.
Lord Underhill: My Lords, the Minister has repeated many of the arguments which we had at the Committee and Report stages, but the House will notice that the Minister agreed that there is a change in this amendment—that the three-year period would apply by providing for it in the three-year plan. The Minister has said that this will circumvent the whole idea of financial control; but how could this be, as the Minister has agreed that it is a provision to be put in the three-year plan? Therefore, at the end of that three-year period the position has to be corrected and the deficit has to be cleared by then. His argument on that point falls completely to the ground. It surely is business common sense, as I am certain many noble Lords would agree, that where there is an unavoidable deficit, it is better to spread it over a period where you can plan ahead than having to adjust things quickly for the following year, which is what the Bill at present provides.
There is always this suspicion in statements from Ministers opposite on this matter about profligate activity and profligate expenditure. But we should bear in mind that this is what the executives and the authorities want and the authority is responsible to its ratepayers. Nevertheless, the Government seem determined not to move on this matter, and therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [Preparation and submission of financial plans]:
3.13 p.m.
Lord Underhill Lord Underhill moved Amendment No. 2:
Page 3, line 24, after ("determine") insert ("after consultation with the Authority").
The noble Lord said: My Lords, this amendment relates to Clause 3 and in particular to subsection (3) of that clause. This particular subsection provides that the executive may prepare its plan:
"on the assumption that the Authority will … make revenue grants of such amounts as the Executive may determine".
It will be recalled that at the Report stage an amendment was brought forward to leave out the words:
"of such amounts as the Executive may determine".
That amendment was proposed on the grounds that the executive is the operating body—the unelected body—and is responsible to the elected body, which is the public transport authority or, in other words, the county council. It was argued that the authority has the responsibility for making the grant to the executive and therefore it was wrong to place on the executive the obligation to work on an assumption that the authority would pay an amount which the executive may determine on the grounds that it had no authority so to do. The argument referred also to aspects of the procedure. I shall not go into those.
Generally I do not disagree with the points made by the Minister about the procedure, but he did make one statement:
"Nothing would be achieved by preparing a plan based on only one proposal from the authority, which is what would result from the amendment".—[Official Report, 17/3/83; col. 859.].
In my view that was an absolutely misleading account of that particular amendment and what it meant. That amendment would not have interfered with the provision that:
"the plan may be formulated on the assumption that the Authority will in the relevant period make revenue grants".
That assumption would be all right; but what we suggested was wrong was that there should be an assumption that the authority would make revenue grants of such amounts as the executive would determine. As we said at the Report stage, the executive has no real authority to make such a determination.
As the Government for some completely unfathomable reason did not like that particular common sense amendment at the Report stage, this present amendment provides that, if that determination is to be made by the executive, then it must be made on some firm basis. Therefore, the amendment provides that this assumption of the amount the authority shall pay shall be determined by the executive after consultation with the authority. That seems a very common sense basis. If the Government wish to leave in the Bill that the assumption of the amount that the authority will pay can be determined by the executive, surely the executive should do that after consultation with the authority, which is the body which has to pay. I therefore have pleasure in moving the amendment.
Lord Lucas of Chilworth: My Lords, again I remind your Lordships' House that we have had some amendments put down at previous stages of this Bill in similar vein which we have resisted as being unnecessary and because, frankly, they would have added nothing to the Bill. I have to resist this amendment as well, both because it is unnecessary and also because it actually repeats a provision that is already in the Bill.
Under Clause 6(1) an executive is already required to consult the authority before it prepares the draft plan. At that stage, the authority will be able to give the executive advice on the level of grant that it proposes to make, and the executive will obviously have that in mind, and it will also have the advice from the Secretary of State under Clause 3(5) when determining the assumption about the level of grant for the purpose of the plan. If the authority decline to give such advice, then that is their choice. But under Clause 4(2), the authority can ask at that later stage for alternative proposals. So the Bill already provides the consultation procedure that this amendment seeks to achieve. It really is not good sense, I suggest to your Lordships, to accept amendments which are simply duplicating existing provisions.
I recognise, however, the concern that the noble Lord has raised that an executive might determine an assumed level of grant before they consult the authority on the plan preparation. I can hardly conceive that this would be likely; even in that unlikely happening, it would be a most unwise practice to adopt. Nonetheless, if this does occur, the authority will still be free, when considering the executive's draft plan, to tell the executive to produce alternative proposals, to which I have referred, based on perhaps different levels of fares, services and facilities and on different levels of grant, as they may then specify. So the problem that this amendment seems to try to rectify, again, is already covered in that clause.
Lord Underhill: My Lords, I am certain that if one made reference to all the subsections to which the noble Lord has referred one would find that it is not as simple as it seems. We can trace this on various previous amendments. The danger in leaving the Bill as it is, is that it leaves in quite clearly the words:
"as the Executive may determine".
That means that the executive will proceed to work its plan on that basis. Any attempt later on by the authority to modify that surely is delaying the whole thing. I will not go now into the chronological process which the Minister kindly supplied, but that is so tight that any hold-up could defer a plan being properly made. The present provision will enable the executive to determine what amount it is going to assume the authority will pay. It is plain common sense to qualify that. That is what the amendment sought to do. That was such a common sense amendment that the Government prefer not to accept it. That will be borne in mind when we come to a later important amendment on this Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Undernhill Lord Undernhill moved Amendment No. 3:
Page 3, line 33, after ("to") insert ("existing and").
The noble Lord said: My Lords, this is an important amendment because Clause 3 deals with the preparation and submission of a plan, which must be prepared annually by the executive to cover the next three years. The amendment relates to subsection (4) of the clause. The subsection provides that the plan must be accompanied by various estimates, which are set out in paragraphs (a), (b) and (c). Paragraph (a) relates to the cost of providing the services and facilities described in the plan. Paragraph (b) relates to the level of demand for the services and facilities. Paragraph (c), which is the important paragraph and the one to which the amendment is directed, refers to,
"the benefits to potential users of those services and facilities".
The amendment proposes that paragraph (c) should read:
"the benefits to existing and potential users of those services and facilities".
In preparing the plan the executive must take into consideration what benefits will be given to existing users. If it is considered that it will be of importance to give estimates of benefits to potential users, surely it must also be appropriate to give details of the benefits to the existing users. In Committee the noble Lord, Lord Bellwin, said that it would be wrong to widen the benefits of which estimates will have to be supplied under the subsection. At different times in our debates the Minister referred to the fact that in various places in the Bill the word "benefits" can be used to refer to any benefit. In fact, on one occasion he went so far as to say that he would readily consider any benefit not covered and decide whether an amendment should be made to the Bill.
The amendment now before the House does not seek to define what is meant by "benefits" in formulating the plan or resulting from the plan. The subsection relates only to the submission by the executive of estimates relating to various matters, and the benefits to other than potential users are not included. As reported at column 865 of the Official Report for 17th March, Lord Bellwin, in referring to Clause 3(4), said that it is concerned with the duty of the executive to
"submit precise estimates of those factors which are directly related to the services which they provide—their cost, the level of demand for them and the benefits they produce".
I suggest that those estimates will not be complete unless they include benefits to existing users, as well as benefits likely to accrue to potential users.
At a previous stage the Minister could not accept deletion of the term "potential users". I think that such a proposal was moved at the Committee stage by the noble Lord, Lord Teviot. The Minister said that that would widen the benefits and it would not be appropriate for the submission of estimates. The present amendment does not widen the meaning of the word "benefits" in that way. All it suggests is that if the estimates of the plan are to have a common sense meaning, they must refer to the benefits to existing users as well as to potential users. That is what the amendment seeks to do. I beg to move.
Lord Lucas of Chilworth: My Lords, I of course accept that the amendment has nothing to do with the benefits. However, I wonder whether the amendment results from perhaps a slight misunderstanding of the

1351
reference to "potential users" in Clause 3(4)(c). What we are saying here is that the executive must consider the benefits that potential users will receive from the proposed services and facilities. In this context everybody would be a "potential user"—even if they currently use local transport—because we are talking about future services in the years ahead. Existing users who then continue to use the services will form part of the potential user force. So a separate phrase adding existing users is really quite inappropriate. Perhaps I should emphasise that, by that, I do not mean that an executive cannot have regard to the benefits that existing users receive from existing services. Of course it can: and I am sure that it would be helpful if the executive were to take that factor into account.
However, surely in this instance the term "potential users" covers everybody who is expected to use—who might use—the service, whether or not an existing user, because we are concerned about future transport plans for future years. How can one have an existing user of a proposed service—a service which has not yet come into being? I suggest that that is quite impossible. The addition of existing users is therefore quite inappropriate. I hope that the noble Lord can accept that and will not press his amendment.
Lord Underhill: My Lords, I am happy to accept the statement made by the Minister. However, I should have thought that since he has said that there has been a misunderstanding, the opportunity could have been taken here to remove the misunderstanding by making quite clear what is meant. The very fact that there is a misunderstanding seems to suggest that the text of the clause could be improved. However, I am delighted to have the assurance of the Minister. I only hope that the courts, too, will accept the assurance of the Minister. What is important is what the courts will decide on the wording of the Bill, not (I say with all due respect) on what any Minister may say. Having had the Minister's assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.26 p.m.
Clause 4 [Approval of financial plans and determination of revenue grants]:
Lord Underhill Lord Underhill moved Amendment No. 4:
Page 4, line 6, at end insert—
("(1) If the Authority have modified the plan submitted to them under section 3 above, in circumstances where they are satisfied that a particular passenger transport service which the Executive have power to provide is required to meet the needs of their designated area, but the Executive are not willing to provide it or to arrange for its provision because they consider that the cost of providing it would be too high in relation to the contribution which it would make to the needs of the area, the Authority may give the Executive a direction requiring the Executive to provide or secure the provision of that service, and the Executive shall comply with that direction.").
The noble Lord said: My Lords, your Lordships will recall that on the first day of the Committee stage an amendment, Amendment No. 4, sought to exclude from revenue grants those grants made by an authority to enable an executive to carry out an instruction from the authority under the provisions of Section 15(3) of the 1968 Act. That subsection provides that where an authority considers a particular service to be essential,
1352
but the executive cannot meet the cost of providing it, the authority may give the executive instructions to provide the service and undertake to meet the cost that may arise. The earlier amendment was rejected by the Government at the Committee stage, and the noble Lord, Lord Lucas of Chilworth, explained that the Bill leaves the power of Section 15(3) in place only until April 1984, after which it will be repealed.
So at the Report stage there was brought forward a different amendment, which proposed that an authority may exercise its powers under Section 15(3) only where no increase in the amount of revenue grants will result. I stated that if that amendment were carried I would bring forward a consequential amendment to adjust a later clause. The Minister, the noble Lord, Lord Bellwin, again pointed out that after the first year Section 15(3) of the 1968 Act would be repealed, and he explained that the power in that provision would be replaced by means of part of the annual planning process. Under the Bill the authority has responsibility to approve the plan prepared by the executive, and, if considered necessary, to approve it with modifications.
However, there is no provision which specifically replaces the power contained in Section 15(3) of the 1968 Act. At Committee stage I referred to the judgment given by Mr. Justice Woolf when he dismissed the appeal of Great Universal Stores against the Merseyside County Council and emphasised the importance of the provisions of Section 15(3) of the 1968 Act. That point was again stressed at the Report stage by my noble friend Lord McIntosh of Haringey. Ministers have argued that the power of Section 15(3) is covered by Clause 4(2) of the present Bill, and they have also claimed that the provision in the Bill does a bigger job in that respect—I use words used by the Minister. However, what Clause 4(2) provides is that,
"the Authority may require the Executive to supply them with …".
alternative proposals, estimates of particular benefits, and
"such other information as the Authority may specify".
That in no way relates to the provisions of Section 15(3) of the 1968 Act.
The amendment before you provides that, if the authority has modified the plan submitted by the executive by including a service that the executive is not willing to provide because it may consider the cost to be too high, the authority may give a direction to the executive to provide that service and the executive must comply with the direction. It is important that this power remains with the authority. The amendment makes no reference to Section 15(3) of the 1968 Act, so the argument about repeal under the Bill does not arise. The words in the amendment are precisely those taken from Section 15(3) of the 1968 Act.
There is, however, one point that I must emphasise. The plan in Clause (3)(1)(a) of the present Bill refers to the general level of transport services, whereas the amendment relates to a particular service. The difference will therefore be apparent. At the Committee stage, I quoted from letters received from the solicitor-secretary of the Merseyside Passenger Transport Executive and from the solicitor-secretary

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of the West Yorkshire Transport Executive each of which emphasised the importance of this provision being in the Bill.
I repeat that Section 15(3) of the 1968 Act is not mentioned in the amendment. There will therefore be no argument this time from the Minister about the provisions of the Bill relating to its repeal. As pointed out, the provisions of Clause 4(2) of the Bill cannot be used as an argument against the objectives of the amendment. This is an instruction to an executive that should be retained. I have pleasure in moving the amendment.
Lord Lucas of Chilworth: My Lords, this amendment would, in effect, put back into the Bill a provision similar to Section 15(3) of the Transport Act 1968. With the amendment, we return to the subject of that section that was discussed in some detail in your Lordships' House and in another place—that of the authority's power to direct an executive to provide a loss-making service. As the noble Lord, Lord Underhill, explained, the authority has power under Section 15(3) of the 1968 Act to direct its executive to provide this loss-making service on the condition that it provides the necessary grant. It is the case that Section 15(3) is to be repealed in April next year because its provisions, as we have previously made clear, will be effectively replaced by Clause 4, especially subsection (2) and, to an extent, subsection (1).
I believe that noble Lords have not attached sufficient importance to the real powers available to authorities under these subsections. The provisions enable an authority to require its executive to supply alternative proposals based on different levels of services and facilities. Of course, the authority has in clause 4(1) the final word on the content of the plan. So these subsections provide the authorities with an effective alternative power. They are similar to those currently available under Section 15(3) of the 1968 Act. In our view, Section 15(3) of that Act is made redundant by the provisions of this Bill. That is why we propose to repeal it. Clause 4 provides a perfectly good alternative.
The noble Lord, Lord Mishcon, made the point during our Committee stage on 3rd March. I readily accept that. The difficulty, in his view, arises because the Secretary of State, when setting his guidance, could decide that the kind of loss-making service envisaged is not essential and that he would therefore not include the cost of its provision when setting the guidance. If the authority still wished to provide the service, it would have to do so only by exceeding the guidance and would therefore run the risk of challenge in the courts.
There are two points that I should like to make. First, the authority, as all of us know, has freedom to exceed the guidance if it feels that it is justified in doing so, and if it feels able, should the need arise, to justify that decision before the courts. So, it is for the authority itself to decide if it wishes to provide a loss-making service and exceed the guidance. This, it seems to me, is no different from the situation that authorities are already in. At present, they risk challenge in the courts for any level of service and grant.
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Perhaps more important, it is for the authorities to decide on their priorities. The authority would not necessarily have to exceed the PEL if it was to provide a loss-making service that the Secretary of State, in setting his guidance, had felt was unnecessary and which he would not, of course, have taken into account when setting that power. The authority might, for example, reassess its priorities in the light of the PEL if it wished to keep within it. If it feels that a particular loss-making service is absolutely essential and must be provided without exceeding the PEL, it can do so, but at the expense of other less important services. To me, that seems a fairly proper discipline to impose upon the authority.
Clause 4(2) allows the authority to ask for alternative proposals; for example, for a loss-making service, and then Clause 4(1) allows the authority to decide the final form of the plan. It is the authority that decides the final form of the plan. That may well include a decision that the executive must run a particular loss-making service. My Lords, I can see no need for the amendment. The Bill provides a new and fully adequate financial planning procedure that should not provide undue difficulties—indeed, any difficulties—between the executive and the authority.
3.37 p.m.
Lord McIntosh of Haringey: My Lords, in resisting the amendment, the noble Lord, Lord Lucas, is really trying to spring a trap not just for the Opposition but also for the authorities and executives. I invite the House to examine the issue from the point of view of the authority. The authority has responsibility under Clause 4 to produce the best transport plan it can, at the best possible price, taking into account the needs of the mainstream transport users in its area. It has all sorts of hoops to jump through to reach that stage, going backwards and forwards between the authority and the executive and having to take heed of the guidance of the Secretary of State. In doing so, the interests of what I call the mainstream users of the basic services must be paramount. The best possible service at an acceptable price must be provided for those users.
It is, however, recognised and has been recognised since the 1968 Act and before, that there are certain kinds of service that do not readily fit into that pattern. There are, for example, services to hospitals on visiting days, services to rural areas that are included within metropolitan authorities, and various social bus services that are no different from any other kind of local authority social service expenditure. There is no difference between providing a bus to a hospital on visiting day and providing a wheelchair for the patients. It is the same kind of public expenditure and should not be treated in a different way at the expense, as is now to be the case, of the mainstream public transport users.
Therefore, if the authority does what the noble Lord is suggesting, it will be doing so not at the public expense generally but at the expense of the general public transport users. In other words, it will be producing a less than optimum general public transport service in order to provide those particular social bus services which are considered to be necessary. That cannot make sense, particulary when

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we have the situation that the threat which hangs over the authority is that of a challenge in the courts by a ratepayer. It is a particularly severe threat on this occasion because by their nature those special social bus services will be required for a minority of people and will be useless to the vast majority of ratepayers in the area.
Therefore, those ratepayers who are not influenced by the need to visit a hospital and by not having their own car, will be particularly prone to take this opportunity to challenge the authority in the courts, sometimes for selfish reasons and sometimes for straightforward political reasons. Therefore, the sanctions to be applied against the authority are that much greater in this case and the distortion which is proposed by the noble Lord the Minister is that much more dangerous. I hope that those arguments will not prevail against the amendment proposed by my noble friend.
Lord Lucas of Chilworth: My Lords, with the leave of the House, it is not I who am springing a trap: it is the noble Lord, Lord McIntosh, who is making quite unwarranted and quite uninvited assumptions. He has said that the responsibility of the authority is to provide the best transport plan possible. He said that that may well include a number of headings which he mentioned among them social needs. Of course that is so; that is absolutely right. But he then assumed that those social needs—which may only meet the needs of a small number of people—would be provided at the expense of the mainstream service. That is as an assumption with which I cannot agree because it need not necessarily be so.
The noble Lord has perhaps forgotten that when the executive and the authority deal with their plan, they have an overriding consideration—that of taking into account the interests of both user and ratepayer. Indeed, that is really what the Bill is all about. A fair balance has to be struck. In order to assist the authorities the PEL three-year plan system has been evolved.
The noble Lord implied that the financial planning procedure, which is really what the Bill is all about, provides that the authority ought to be able, the day after it has approved a plan, to change that plan by adding a service or by removing another or, in fact, by increasing the grant. While I do not accept for a moment his argument as to where the interests are going to lie as regards social need at the expense of mainstream or otherwise, certainly there is nothing in what the noble Lord has said that makes me think that we ought to accept this amendment.
Lord Sefton of Garston: My Lords, before the noble Lord sits down, I should like to ask him a question arising from a matter which I raised on Second Reading and to which the noble Lord, Lord Bellwin, said that he would refer when replying but in fact he did not do so. I raised the question of whether or not this Government wanted the courts to decide about the balance between fares and grants. That question has not been answered. I raised it twice in Committee. I should like to ask the noble Lord whether or not it is the Government's intention that the courts should decide whether the balance of money is to come from grants or from fare-paying passengers?
Lord Lucas of Chilworth: My Lords, with the leave of the House, I am sorry that the noble Lord, Lord Sefton, has not received a particular response to that question. What I can tell him is that it is the Government's intention to defend, to protect, the authority up to the protected expenditure level outside of which, if an authority wished to proceed, it would then be for the courts to decide.
Lord Sefton of Garston: My Lords, that does not answer the question. May I repeat—
Lord Derwent: My Lords, I am sorry to interrupt, but this is not a Committee stage and the noble Lord is clearly out of order. We cannot expect the Minister to get up several times.
Lord Underhill: My Lords, if your Lordships look carefully at Amendment No. 4 you will find that there is nothing in there which refers to a change in the guidance level. There is nothing in there which refers to a change in the protected level of expenditure. The Minister said that this would be putting back Section 15(3) into the Bill. I have already admitted that that is what it intends to do. But we have not referred to Section 15(3) of the Act; we have referred to what we want to do. I have already said that the wording of this amendment is precisely the wording taken from Section 15(3) of the 1968 Act.
Why do we want this? I have referred already, as I did during the last stage of the Bill, to a letter from each of two solicitor-secretaries of two passenger transport executives. There are only six passenger transport executives and two of them took the trouble to write to say that they wanted this provision in the Bill. Yet they are the ones who will have the direction given to them by the authority. They believed that this was very important. Surely the authority is the elected body, the body which the ratepayers have put in to control local affairs and if they want a particular service to be run but the executive says, "Sorry, we cannot do it because it is too costly", the direction must remain with the authority to instruct the executive to do this. That is what the amendment wants—the elected representatives shall have the authority to say what should be done in their area. The question of PEL and guidance levels on revenue support comes afterwards.
This direction is vital. The PTEs want it and the Government for some strange reason will not put it in. Yet they say that it is in Clause 4(2). If any noble Lord looks at Clause 4(2)—I shall not trouble to read it out—and suggests that that is the same as this amendment, then he is not reading the same language as I am reading. We regard it as an important principle that the elected body must retain the authority to decide that a certain service shall be run. Let us leave alone the question of the PEL because that will come after the decision has been taken. In view of the importance of this subsection we ask the House to make a decision upon it.
3.48 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 70; Not-Contents, 97.

DIVISION NO. 1

CONTENTS

Aberdeen and Temair, M.

Jenkins of Putney, L.

Airedale., L.

John-Mackie, L.

Amherst, E.

Kearton, L.

Amulree, L.

Kennet, L.

Ardwick, L.

Kirkhill, L.

Avebury, L.

Leatherland, L.

Aylestone, L.

Listowel, E.

Bacon, B.

Lloyd of Hampstead, L.

Banks, L.

McIntosh of Haringey, L.

Beaumont of Whitley, L.

Mayhew, L.

Beswick, L.

Oram, L.

Bishopston, L.

Peart, L.

Blease, L.

Phillips, B.

Blyton, L.

Ponsonby of Shulbrede, L. [Teller.]

Briginshaw, L.

Brockway, L.

Rathcreedan, L.

Bruce of Donington, L.

Rugby, L.

Burton of Coventry, B.

Sainsbury, L.

Byers, L.

Sefton of Garston, L.

Caradon, L.

Shackleton, L.

Chitnis, L.

Sidmouth, V.

Colliston, L.

Stedman, B.

Cooper of Stockton Heath, L.

Stewart of Alvechurch, B.

Crook, L.

Stewart of Fulham, L.

David, B. [Teller.]

Stone, L.

Denington, B.

Strabolgi, L.

Donaldson of Kingsbridge, L.

Tanlaw, L.

Elwyn-Jones, L.

Taylor of Gryfe, L.

Ezra, L.

Taylor of Mansfield, L.

Gaitskell, B.

Tordoff, L.

Grey, E.

Underhill, L.

Hale, L.

Wallace of Coslany, L.

Hampton, L.

Wells-Pestell, L.

Hatch of Lusby, L.

White, B.

Houghton of Sowerby, L.

Wooton of Abinger, B.

Hunt, L.

NOT-CONTENTS

Adeane, L.

Gray, L.

Airey of Abingdon, B.

Hailsham of Saint Marylebone, L.

Ampthill, L.

Avon, E.

Henley, L.

Balfour of Inchrye, L.

Hylton-Foster, B.

Belhaven and Stenton, L.

Ilchester, E.

Blake, L.

Jessel, L.

Boyd-Carpenter, L.

Killearn, L.

Campbell of Croy, L.

Kilmany, L.

Carnegy of Lour, B.

Kinloss, Ly.

Cathcart, E.

Lane-Fox, B.

Chorley, L.

Lauderdale, E.

Cockfield, L.

Lawrence, L.

Constantine of Stanmore, L.

Long, V.

Cork and Orrery, E.

Loudoun, C.

Cottesloe, L.

Lucas of Chilworth, L.

Cox, B.

Lyell, L.

Cullen of Ashbourne, L.

McFadzean, L.

Daventry, V.

Macleod of Borve, B.

Davidson, V.

Mancroft, L.

De Freyne, L.

Margadale, L.

De La Warr, E.

Marley, L.

Denham, L. [Teller.]

Merrivale, L.

Derwent, L.

Mersey, V.

Drumalbyn, L.

Milverton, L.

Dudley, B.

Molson, L.

Eccles, V.

Montgomery of Alamein, V.

Effingham, E.

Mottistone, L.

Ellenborough, L.

Newall, L.

Elliot of Harwood, B.

Northchurch, B.

Elton, L.

Nugent of Guildford, L.

Fortescue, E.

Orkney, E.

Gibson-Watt, L.

Orr-Ewing, L.

Gisborough, L.

Penrhyn, L.

Glenarthur, L.

Plummer of St. Marylebone, L.

Glenkinglas, L.

Gormanston, V.

Porritt, L.

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Portland, D.

Strathspey, L.

Rankeillour, L.

Sudeley, L.

Ridley, V.

Swinfen, L.

Romney, V.

Swinton, E. [Teller.]

St. Davids, V.

Taylor of Hadfield, L.

Saltoun, Ly.

Teviot, L.

Sandys, L.

Trefgarne, L.

Shaughnessy, L.

Trenchard, V.

Shuttleworth, L.

Trumpington, B.

Skelmersdale, L.

Vaux of Harrowden, L.

Somers, L.

Vivian, L.

Spens, L.

Westbury, L.

Stamp, L.

Resolved in the negative, and amendment disagreed to accordingly.

National Coal Board: Chairmanship
3.56 p.m.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, with the leave of the House, I shall repeat a Statement being made by my right honourable friend the Secretary of State for Energy in another place. The Statement reads as follows:
"With permission, Mr. Speaker, I wish to make a Statement about the Chairmanship of the National Coal Board.
"When I appointed Mr. Norman Siddall as chairman last year, he made it clear to me that, regrettably, his health would not permit him more than a one-year term. Strictly speaking, that year comes to an end on 3rd July, but Mr. Siddall has kindly agreed to stay on until the end of August. He has already proved to be an outstanding chairman of the Coal Board, as I am sure is widely recognised on all sides of the House.
"As his successor, I have appointed Mr. Ian MacGregor, currently chairman of the British Steel Corporation.
"Mr. MacGregor is a Scotsman who was sent to Washington by the Government during the war to deal with certain aspects of the purchase of arms from the United States. After the war he decided to make his business career there, which he did with conspicuous success, notably with the Amax Corporation.
"His first act on becoming Chairman of Amax in 1969 was to take it into the coal-mining business: by the time he retired from the chairmanship of Amax in 1977 he had built it up into the third largest coal-mining company in the United States.
Mr. MacGregor's qualities were recognised by the previous Government when they appointed him a Deputy Chairman of British Leyland in 1977, but he did not return to Britain on a full-time basis until 1980, when my right honourable friend the Member for Leeds North-East appointed him chairman of the British Steel Corporation for a three-year term.
"Since then he has led BSC with vigour and determination through a period of intense difficulty for the steel industry both at home and abroad. Last year, for the first time ever, BSC's productivity came close to the best levels of its European competitors.

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"Mr. MacGregor's experience in building up and running a successful coal-mining business and the outstanding leadership he has provided at BSC have demonstrated that he is admirably equipped to become full-time chairman of the Coal Board. He has agreed to accept a three-year appointment starting on 1st September.
"Mr. MacGregor has obligations to his partners in the New York based investment bank of Lazard Frères, from which he was released for three years in order to become Chairman of BSC. I have agreed similar arrangements in order to enable him to take on the Chairmanship of the National Coal Board for a further three years. Accordingly, a fee of £1½ million will be paid to Lazard Frères in compensation for the loss of Mr. MacGregor's services. Two-thirds of that fee will be refundable on a pro rata basis if Mr. MacGregor does not complete his full three-year term.
"As with the BSC arrangements, Mr. MacGregor will remain a non-active limited partner in Lazards while serving as chairman of the Coal Board. But this will not entitle him to receive any share in the so-called transfer fee. He will be paid £59,325 a year—the same salary as Mr. Siddall.
"£1½ million, although less than the maximum compensation payable under the BSC arrangements, is a substantial sum. Indeed, it is what the Coal Board loses every day. But I am confident that, in securing the services of Mr. MacGregor as chairman of the National Coal Board, it will prove excellent value for money for the taxpayer, the industry and the nation.
"In making these arrangements, Mr. Speaker, my concern has been to find the best possible leadership for the Coal Board at this critical time. The industry and those who work in it deserve nothing less. The coal industry in this country faces fundamental problems of over-production and uncompetitive costs. If it can tackle these problems, it can secure for itself an excellent future and transform itself into the successful modern industry we need.
"Mr. MacGregor's objectives will therefore be to continue the task started by Mr. Siddall and to focus the Board's efforts on the earliest practicable return to profitability, on competing successfully in the marketplace and developing new markets for British coal, and on securing the highest possible efficiency and control of costs.
"I am satisfied that Mr. MacGregor is the best man for the job. This is an appointment which everyone with a genuine interest in the success of this great industry will welcome."
My Lords, that concludes the Statement.
4.1 p.m.
Lord Strabolgi: My Lords, on this side of the House we should like to thank the noble Earl, Lord Avon, the Minister, for repeating this Statement. We also sympathise with Mr. Norman Siddall that his health does not permit him to serve longer than the end of August, and we should like to pay a tribute to him for his first-class services, particularly as he followed the
1360
outstanding chairmanship of the noble Lord, Lord Ezra. We wish Mr. Ian MacGregor well—I think that that is probably the least that we can do—in his new appointment to head this important industry on which so much of the nation's future prosperity depends. But, my Lords, we are bound to ask some questions.
Is the appointment acceptable to all sides of the industry? Had the National Union of Mineworkers and senior management been consulted before it was made, or has it been imposed from outside? Do not the Government think that it would have been better to have chosen a younger man, who could have served longer? Do they envisage Mr. MacGregor continuing another term after he has reached the age of 73? If not, do they not think that a three-year term of office is rather a short period, especially at this important period in the coal industry? Do the Government think that this appointment shows much confidence in the able younger men of Britain's top management? After all, they will have to find another chairman fairly soon to replace the septuagenarian Mr. MacGregor. Will Mr. MacGregor continue as chairman of BSC as well, or is he going to relinquish his present post?
The Government say in the Statement that the £1½ million transfer fee, as they described it, is to be paid to Lazard Frères in New York as compensation for the loss of Mr. MacGregor's services. Is this very large sum in addition to the even larger sum already paid to Lazard Frères when Mr. MacGregor was appointed to the BSC? If so, what is the total cost to the Treasury for these two engagements? If Mr. MacGregor continues in office for a further three years will yet another £1½ million, a third tranche, have to be paid to Lazard Frères in New York, making about £4½ million to £5 million in all? Do not the Government think that this is rather a large sum for the hard-pressed British taxpayer to have to find, especially in these days of austerity and the curtailment—and the ruthless curtailment—of our social services?
Lord Tanlaw: My Lords, we from these Benches also wish to thank the noble Earl the Minister for repeating the Statement made in another place. I should also like to add our tribute to Mr. Norman Siddall for the work he has done, as well as to my noble friend Lord Ezra. We also must congratulate Mr. MacGregor for taking on what is clearly going to be a difficult and onerous task bearing in mind his age, which is that of an old-age pensioner. I must say that we from these Benches also believe in flexible retirement; that people have different abilities at different ages. I do not think that old-age pensioners on £57 a week will grudge Mr. MacGregor his £59,325, or his £1½ million compensation given to a merchant bank. What they and we would like to know is, will the earnings rule apply to Mr. MacGregor as it does to other old-age pensioners?
What is his tax status? Is he resident but not ordinarily resident in this country, or is he non-resident for tax purposes? In which case, what is the net income he will receive from his £59,325 after tax in this country? I think that every old-age pensioner wants to know this, while admiring his ability in being able to hold down this job compared to their difficulty often in hanging on to take that little bit of extra to keep them going.

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Finally, I should like to ask the noble Earl, after the three-year term what method of selection do Her Majesty's Government envisage for future chairmen of nationalised industries and the coal board? We, from these Benches, favour a panel independent of Government, and so do the Bow Group. The question is whether the Conservative Government wish to follow the Bow Group and the Liberal SDP alliance in recommending an independent selection panel for these onerous and responsible jobs.
The Earl of Avon: My Lords, I shall try to cope with some of the questions which have been asked. The noble Lord, Lord Strabolgi, asked whether Mr. MacGregor would be appointed again after three years. I think that this is something we would have to wait for, to see what sort of job he has done, and where we are. I am delighted that both the noble Lord, Lord Tanlaw, and the noble Lord, Lord Strabolgi, realised that it would be this side of the House which would be deciding this. The noble Lord, Lord Strabolgi, asked me about the £1½ million. The payment for the British Steel Corporation is £1,825,000, two-thirds of which is being retained until 1984, when it will be adjudged whether he has earned the full fee or not. So far as the fee for the Coal Board is concerned, it is an additional £1½ million; £1 million of which will be retained in trust until the end of his term.
The noble Lord, Lord Tanlaw, asked about tax. My understanding is that Mr. MacGregor is taxed in the normal way, and there is no special concession. As to whether he is a non-resident or not, of course he is not because he is working here as a full-time chairman. Some idea was suggested that he might be too old. Those who know the energy, drive and determination he has applied to BSC could not possibly agree with that. His vigorous performance there has underlined how fit he is at the young age, certainly in this House, of 71.
I was asked specifically about United Kingdom managers. There are, of course, many excellent British managers but they are usually fully committed to other important jobs and organisations. We are indeed very impressed by the standard of the National Coal Board. But I have yet to be convinced that anybody from there would succeed in the place of Mr. MacGregor. I am sure that the good sense of those who work in the industry, as indicated during the recent NUM ballot, will persuade them that it is the qualities of the man leading the industry which matter, and I am confident that the industry itself will respond to the leadership of the new chairman.
Lord Blyton: My Lords, is the Minister aware—
Lord Taylor of Gryfe: My Lords,—
Lord Blyton:—that the miners will regard this appointment as an act of provocation, and that to pay a salary like this—with the brilliant mining engineers and the men we have in this country—is a disgrace? All the conciliations of the recent ballots will go by the board, because, even if this man has murdered steel, the miners will never allow him to murder the mining industry.
The Earl of Avon: My Lords, I should like to make two points to the noble Lord. First, it is not an act of provocation. What we are looking for is the best man for the job. Secondly, what we are looking for is a man for the job at the moment. One of the points about the coal industry is that there is plenty of coal, and one of the aspects that we appreciate about Mr. MacGregor is that he is a marketing man, as well as a metallurgist. We believe that the combination of these two factors is very important at the present time.
Lord Taylor of Gryfe: My Lords—
The Earl of Lauderdale: My Lords, as an old age pensioner—
Lord Denham: My Lords, I think that the noble Lord, Lord Taylor, was trying to get up. Perhaps we could hear him first and then my noble friend afterwards.
Lord Taylor of Gryfe: My Lords, we on these Benches should like to thank the Minister for the Statement he has made and to join in the congratulations to Mr. Norman Siddall for a year of very distinguished service, despite the fact that he was not very well during that period and took these responsibilities with some reluctance. We should also like to pay tribute to Mr. MacGregor's outstanding ability and to wish him well in his new post. At the same time, we should like to ask the Government whether this is a departure from the normal practice of the Government, in so far as Government appointments, including quangos, as a rule, are limited to a period when the person concerned reaches 70 years of age.
I should like to ask the Government, too, whether the difficulty in filling this position arises from the facts outlined in the recent book of the retired chairman of British Leyland, to the effect that he found it extremely difficult to work with Governments who interfered with management; and whether Mr. MacGregor will be given an assurance that he will have little interference in the management of the coal industry in the short period of his appointment. Would the Government confirm that in view of the vote of confidence which has just been given by this appointment, the £1.8 million will automatically be paid to Lazards, making a total transfer fee of £3 million covering both of these appointments? Also, would the Minister confirm that it might be sensible to test the market on occasion, when major appointments of this character are about to be made? That might enable British management to feel satisfied that they are not being overlooked by friends of the Government.
The Earl of Avon: My Lords, the noble Lord has asked a number of questions. I was expecting that Mr. MacGregor would he acceptable to the SDP, as I saw that he went to Hillhead Grammar School. So far as the figure of £1,825,000 is concerned for the BSC job, my understanding is that that will not be paid until 1984. The noble Lord asked about testing the market and talked about friends of the Government. The point here is that there has been quite a lot of rumour that Mr. MacGregor might be appointed to this job,

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but throughout all that period of rumour I have heard nobody else canvassed for the job, except—and I am sorry that he is not here today—the noble Lord, Lord Gormley, but I think that he was caught in Spain at the time. So that nobody else has come forward for this job. I am not trying, in any way, to denigrate Mr. MacGregor about this, but it is very difficult to find the right person for these jobs, and, when you have such an outstanding character as this, it would be a great shame not to take the opportunity.
The noble Lord asked about interference. Of course, the Government do not interfere with the nationalised industries, except in giving them their objectives and their limits. Mr. MacGregor has already had experience with Goverment over the last three years and I am sure, when he says that he is willing to continue, that he is perfectly aware we shall not be interfering with him.
The Earl of Lauderdale: My Lords, would my noble friend agree that, as this House has many old age pensioners in it, including myself, some of whom are very vigorous indeed, it is hardly a place where we should criticise the appointment of an OAP? But can my noble friend just tell us this, while the subject is current? Does he have a figure for the annual cost to the taxpayer of the Coal Board's running at a considerable deficit? Would he not agree that, when the world is awash with coal and oil, marketing is the critical requirement at this stage?
The Earl of Avon: My Lords, I think I said earlier on in my remarks that marketing is one of the factors which made up our minds in regard to this decision. So far as the loss of the Coal Board is concerned, that is running at about £500 million at the moment which, as was said in the Statement, means that the payment of £1½ million is one day's loss.
Lord Taylor of Mansfield: My Lords, can the noble Earl say whether any consultation took place with the leaders in the industry, the Coal Board itself and the three important unions representing the workers, because their co-operation is absolutely necessary, so far as the appointment is concerned?
The Earl of Avon: My Lords, I do not know the level of consultations. We have, of course, had the recent ballot which the noble Lord, Lord Blyton, mentioned. So far as the board is concerned, I gather that it approved.
Lord Sefton of Garston: My Lords, would the noble Earl agree that there is a point of view in existence in this country in very responsible circles that perhaps this appointment will be viewed as a very severe reflection upon the quality and type of management contained in the CBI and the Institute of Directors in this country?
The Earl of Avon: My Lords, I hope that it will not be construed in that way. As I said in an earlier reply, both United Kingdom management and the National Coal Board have a lot of extremely good people. It is a question of having people available who have
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covered both fields—metallurgy and coal mining as well as the field of marketing. They are the people we are looking for.
Lord Nugent of Guildford: My Lords, as there seems to be a difference of opinion between the two sides of the House, is my noble friend aware that on this side the wish to see the coal industry built up into a highly productive and efficient industry, as a major part of the economy of this country, is at least as strong as in noble Lords opposite, and that the new leader, whoever he may be, is a man of critical importance, especially in the field of marketing, if this is to be achieved? Is my noble friend aware that the transfer fee, heavy though it is—and, of course, to many of us undesirable, though apparently unavoidable—is small money compared with the huge subsidy which our taxpayers are, at present, bearing of £500 million a year to keep the coal industry going? So if this man has the qualifications of leadership, which we recognise, and which noble Lords opposite recognised in 1977 when they appointed him deputy chairman of British Leyland, he may very well be able to give the lead in the reconstruction which is needed in this industry, to bring about the very great contribution which it can make towards our whole economy.
The Earl of Avon: My Lords, I am grateful for the support of my noble friend and agree with him throughout. I believe that one of the reasons why we have to pay this sum to Lazard Frères is the very qualities of the man, which puts him at such a high price.
Lord Beswick: My Lords, are we to understand that the £1,500,000 is to be paid to Lazard Frères, irrespective of performance? If there are to be criteria, would the noble Earl the Minister be good enough to say what those criteria are, and whether they will be applied to the chairmen of other public sector corporations? Finally, may I ask the noble Earl whether he happens to know if there is any retiring age for the directors of Lazard Frères?
The Earl of Avon: My Lords, if I may answer the last question first, I am afraid that I do not know. So far as refundability is concerned, as in the case of the BSC, two-thirds of the compensation is refundable on a pro rata basis. If Mr. MacGregor does not complete his term—that is to say, if he resigns or, unfortunately, should be ill or anything like that during the term—that two-thirds will be kept in trust until the end of the term. The noble Lord asked another question which, I am afraid, I have not answered.
Lord Beswick: My Lords, I asked whether there are any criteria which will be applied, as to whether the £1,500,000 is to be paid irrespective of what happens to the industry in the next three years.
The Earl of Avon: My Lords, two-thirds are kept in trust until the end of the term and if Mr. MacGregor happens to resign, becomes ill or fails to keep the appointment then, on a pro rata basis, the compensation is payable.
Lord Beswick: My Lords, remembering what my noble friend Lord Taylor of Mansfield has said, supposing that there is a confrontation in the coal field, and supposing that there is a complete upset as a result of this appointment, is that £1·5 million payable, irrespective of what happens?
The Earl of Avon: My Lords, the noble Lord paints a scenario which I find hard to follow, in my brief, as it were. So far as I know, if Mr. MacGregor continues to be chairman he will continue to get paid. If he is no longer chairman, then he will not be paid. I am not sure from the scenario which the noble Lord paints, where he would be.
Lord Bruce of Donington: My Lords, can the noble Earl clarify one point? Is it to be the case that Mr. MacGregor will continue to be the chairman of British Steel Corporation, until the day he takes up his duties with the coal industry? Is there going to be any period of overlap at all? Perhaps the Minister will care to clarify that point.
Is the noble Earl aware that, so far as one can judge, there was no advertisement put forward for taking on this particular task? Is he not aware that the Prime Minister herself made it quite clear from the beginning that this "super guy", as she called him, was to have the post? Would he not agree that very few Members of the party opposite, including some in the Cabinet, have the courage to tell the Prime Minister that she was wrong? Is it not quite clear that this is a purely personal appointment?
The Earl of Avon: My Lords, so far as the first part of the noble Lord's supplementary question is concerned, the chairmanship of BSC will be decided by my right honourable friend the Minister responsible for the industry, and he will be making an announcement in due course. So far as the noble Lord's latter point is concerned. I do not know from where the noble Lord gets his knowledge but, according to my knowledge, this is an appointment made by the Cabinet with the full approval of all members.
The Earl of Lauderdale: My Lords, can my noble friend say whether there is any requirement in any of the nationalisation Acts that the Government should consult with, and get the approval of, the unions before making such appointments and whether, in its particular case, Sir Peter Parker was vetted and approved by the NUR before his appointment?
The Earl of Avon: My Lords, I believe there is no such thing in the Act. However, I hesitate to use the word "vetted".
Baroness Wootton of Abinger: My Lords, I do not think that the noble Earl answered the question put by the noble Lord, Lord Bruce of Donington, as to whether there would be any overlap during which Mr. MacGregor would be holding both posts.
The Earl of Avon: My Lords, the noble Baroness is quite correct. I do not know at the moment. It is up to my right honourable friend to make the appointment of the new chairman of BSC.
Lord Ezra: My Lords, the noble Earl referred to the amount of public funds payable to the National Coal Board. Would be agree that, on a per tonne basis, the National Coal Board is in receipt of substantially less from Government funds than is the case in any other West European coal-producing country? Secondly, would he also agree that a large amount of these borrowings and these funds is due to the fact that the Coal Board under the 1974 Plan for Coal is building up a new industry to replace the old mines which inevitably had to go out of existence and that the amount of public money being paid into the Coal Board at the present time will represent a future investment far the country?
The Earl of Avon: My Lords, as this is the first time that I have had the pleasure to talk to the noble Lord, Lord Ezra, across the Floor of the House, may I say how much I welcome him here and how much we appreciate his term as chairman of the National Coal Board. Regarding his figures, of course I would not argue with him. As I understand it, there were quite a lot of things agreed in the 1974 Plan for Coal, most of which have been carried out. One of the things that has been carried out is the investment by Government. That investment at the moment, so far as the present Government are concerned, is in the neighbourhood of £800 million. What we should like to see—in the market which I know is not what the Plan for Coal anticipated, in that there is not the market that they thought there would be—is that, equally, the productivity side of the agreement is carried out so that we may have a prosperous and healthy coal industry.

Transport Bill
4.25 p.m.
Third Reading resumed.
Clause 5 [Payment of revenue grants]:
Lord Underhill Lord Underhill moved Amendment No. 5:
Page 5, line 21, at end insert—
("( ) An Authority may with the approval of the Secretary of State increase the amount of any revenue grant in any year where the amount determined under section 4(1) above becomes inadequate for reasons of extreme urgency brought by events unforseeable by the Executive and the Authority.").
The noble Lord said: We are now dealing with Clause 5 of the Bill, which provides that an authority shall make a revenue grant only in accordance with a determination that they shall make in the light of the annual plan and with a regard to the guidance given by the Secretary of State. As there may be only one determination by the authority in any one year, previous amendments have sought to make provision for circumstances where the amount of the revenue grant has been exceeded by expenditure due to unforeseen circumstances. At the Committee stage, there was an amendment to allow the authority to increase the grant in such circumstances. On that occasion the noble Lord, Lord Bellwin, pointed out that "unforeseen circumstances" could enable an executive to act irresponsibly. He argued that it could

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negotiate a huge wage settlement or increase its level of services. He explained also that any additional grant would have to be within the single annual grant determination and not be an extra grant.
Therefore, at the Report stage, a different amendment was brought forward that an authority may increase the amount of revenue grant where it becomes inadequate due to circumstances beyond the ability of the executive and the authority to control. It was proposed also that this increase be made by the authority after consultation with the Secretary of State. On that occasion the Minister said that he had more difficulty as the amendment would still provide opportunity to circumvent the planning procedures and was even an excuse for slack management. He said, showing great confidence in local authorities and transport executives, that he was sure that, with their ingenuity, some authorities could if they wished find examples of circumstances beyond their control. He added,
"Would there not then be never ending approaches to and discussions with the Secretary of State?".—[Official Report, 17/3/83; col. 906].
This amendment now before your Lordships should meet the apprehensions of the Minister, first because the words, "due to circumstances which are beyond the ability of the executive and the authority to control" are replaced by the words of the amendment:
"… for reasons of extreme urgency brought by events unforeseeable by the Executive and the Authority".
That, I would suggest, satisfactorily qualifies the circumstances in which the need for an increase in the grant could arise. The amendment is further changed in a way which should completely remove the apprehensions of the Minister because, instead of using the words, "after consulting with the Secretary of State" (which was in the amendment at the Report stage) the present amendment uses the words, "with the approval of the Secretary of State". Therefore, the amount of revenue grant may not be increased without the approval of the Secretary of State. All the arguments used by the Ministers at both Committee and Report stages cannot now possibly apply to this amendment because the final decision will rest upon the approval of the Secretary of State. I beg to move.
Lord Lucas of Chilworth: My Lords, during the Report stage of this Bill on 17th March we had a long and interesting discussion in relation, then, to Amendments Nos. 21 and 22 which were moved by the noble Lord, Lord McIntosh. These were basically on whether an authority should be able to increase its amount of revenue grant to an executive during the year in order to cover any emergencies. The noble Lord suggested then that this might be made subject to the approval of the Secretary of State and my noble friend Lord Bellwin promised at that time to consider all that had been said on that occasion. My noble friend has indeed done so, and your Lordships will know that when he promises to do something he always does it.
In the light of his consideration and, may I say with all due temerity, in the light of my own reconsideration of what was discussed on Report, we have come to the conclusion that an amendment of this nature is
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not really necessary. The fact of the matter is that there are already a number of courses available to executives to cover unforeseen circumstances during the year without any need for the amount of revenue grant to be increased. The emergency could immediately be covered—and I apologise to your Lordships if I am repeating myself but it seems to be necessary—by borrowing or by the unplanned use of reserves. This in turn would be covered in the following year by an increase in fares, a reduction in costs, the planned use of reserves or an appropriate increase in the amount of revenue grant from the authority.
Moreover, as has been emphasised on a number of occasions, the executive's financial duty to break even is qualified by the words, "so far as practicable". This is an important point and one which I do not think has been given due regard in our discussions. It really means that if because of an emergency or for whatever compelling reason it was impracticable for an executive to break even, then they are not obliged, come what may, to do so. I would have hoped that what I have said would reassure noble Lords opposite that the Bill already provides executives with adequate scope in covering any emergency or contingency which might arise outside their control, without any need for an increase in the grant.
I turn now to the suggestion that any increase could be made subject to the approval of the Secretary of State, and I would suggest that this would result in considerable exchanges between the executive, the authority and the Secretary of State. Frankly, it would seem to me this would only result in considerably greater interference by the Secretary of State in the affairs of the authority and the executive; and I know we are at one in agreeing that this would be highly undesirable. Moreover, there could be no guarantee that the Secretary of State would agree that the emergency was such as to justify an increase in the grant. The executive would then have to fall back on one of the alternative solutions already available to them which I have outlined on more than one occasion.
I should also make the point that if the authority were allowed to increase its revenue grant halfway through the year it would itself have to cover the increase either by borrowing or by the use of reserves, or possibly by depleting funds allocated to other services within the authority. The noble Lord, Lord Underhill, reminded us that a second precept, a second increase, is not permissible. Therefore, it seems to me quite unnecessary, not to say undesirable, that any additional revenue grant should be provided and financed by means of this kind when the executive itself has access to at least three sources of funding.
I hope that noble Lords opposite will see that this amendment is so very similar to those which we have had before and therefore the answer has to be very similar because of that degree of similarity. I hope, in the light of what I have said this afternoon, they will see that the amendment is not sound.
Lord McIntosh of Haringey: My Lords, on each of the occasions when the Government's reply is given to amendments put forward from this side of the House I have a little bet with myself as to which of the two speeches the Minister is going to make. Will it be the

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one in which he says that the amendment is unnecessary because this or that other clause has already provided for it? Or will it be the other speech in which he says that this is an intolerable attack on the core of the Bill, on the seamless cloth out of which the Bill is woven, which would never survive the strain of the extra two or three words moved by my noble friends or myself? On this occasion we have had the first of those two speeches and, frankly, it is no more convincing than it was when the noble Lord, Lord Lucas, made it on Report.
He seems to have learned very little since that time about the kinds of circumstances we were referring to when we moved those amendments on Report and the futility, really, of the approach he was making to the business management of public transport undertakings. We did try (and I am sorry that I have to repeat myself as well to some extent) to say that there are some occasions—I wish I could think of some new examples rather than the heavy snowfall which I keep on using, or other acts of God or the weather—when a public transport undertaking, which actually works in the open air, is involved in often quite heavy additional expenditure. It could be "one-off"; there may be no implication whatever of bad management and no implication—unless there are more statistical forces at work in regard to the weather than I am aware of—that the expenditure will be repeated in a future year. Certainly there would be no indication that this was a deliberate attempt by the authority or the executive to break any financial boundaries imposed by the Secretary of State, but it is unavoidable and, as my noble friend says in the amendment, involving grave urgency—I am trying to read without my glasses.
Surely, in those circumstances, it is sheer bad management for the authority and the executive to be forced to borrow in order to meet that expenditure. It is equally bad management for the executive to get into debt and to have to make it up out of reserves for the next year. It is equally bad management if it comes out of existing reserves available, because that means that the reserves have been kept at too high a level for the normal operations of the executive's undertaking. So from a sheer business point of view—nothing to do with party politics—what the noble Lord is suggesting is bad guidance to an executive and ought not to be pursued. I am very sorrry indeed that the overwhelming case for that piece of business management has not been understood and accepted by the Government.
Lord Boyd-Carpenter: My Lords, I think it is a little ungenerous of the noble Lord, Lord McIntosh, to complain of the similarity or, as I would prefer to put it, the consistency of my noble friend's speeches. If noble Lords opposite exercise their right, even on Third Reading, to go on putting down substantially the same amendment they really must not be surprised if they get substantially the same answer. The answer which my noble friend gave on at least one and, I believe, on two previous occasions on this subject seems to me wholly convincing and indeed he has no option but to give it again if the same amendment is put down again and again. Frankly, it does not lie in the mouth of the noble Lord, Lord McIntosh, with respect, to criticise my noble friend on this point.
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The only other observation I should like to suggest to your Lordships is that emphasis has been put in this amendment on the question of the unforeseen. I would remind your Lordships of an observation of Disraeli:
"A policy is the toll levied on a fool by the unforeseen. I am not the former and I do not believe in the latter".
Lord McIntosh of Haringey: My Lords, before the noble Lord sits down, I wonder whether he would accept that I was not criticising the noble Lord, Lord Lucas of Chilworth, for repeating his arguments. I was merely criticising the content of those arguments and apologising for the fact that I myself was repeating the arguments.
Lord Sefton of Garston: My Lords, the emphasis of the noble Lord, Lord Boyd-Carpenter, is on the unforeseen. In this amendment, the emphasis is entirely different: it confers upon the Minister the right to say what is an emergency. Perhaps I could outline its importance by describing what could happen in the place which I know best, Merseyside. On either side of the river we have developed a quite extensive network of rail services. They cover both the north and the south bank of the Mersey. Because of the obvious cost, we have to rely upon the old Mersey railway tunnel. This means that both those services are dependent upon one double track under the Mersey.
It is within the bounds of possibility that with two trains under the River Mersey, one train could be derailed and hit the other. Then one would be faced with a catastrophe. Lives would be lost and transport on Merseyside would have to be reorganised. All communication between the south and the north banks of the Mersey by rail would immediately be at an end. It would call for a massive injection of investment: either for the movement of buses from the LBC into the area to use the two road tunnels or for the hiring and chartering of one or more additional ferryboats to provide for the tremendous movement of traffic. One has to remember that the commercial life of Liverpool practically depends upon the large number of commuters from the Wirral.
I have outlined a scenario which could occur. Nobody could describe it as not being an emergency. Therefore I pick up the argument of my noble friend Lord McIntosh of Haringey about whether or not it is good management to borrow for a situation of that kind. I do not think that it is, nor do I think that the Government believe it to be good policy to borrow money for that kind of purpose. Even if they do at the moment, there would be no option under the Bill but for them to say to a local authority, "Borrow the money in order to get you out of this difficulty". That is a stupid situation to be faced with. It means that in framing the Bill the Government have envisaged every possible circumstance and have left themselves with no flexibility to move away from the Bill. What kind of a Bill is that? It places upon the Government so firm a restriction that they cannot possibly move.
This amendment seeks to allow the Minister to decide what is an emergency. Secondly, it allows him, if he thinks fit, then to allow the transport authority to exceed the grant rather than to borrow. That is all the amendment seeks to do. If ever there were a constructive rather than destructive amendment which is designed to make it a better Bill, this amendment is it.
Lord Lucas of Chilworth: My Lords, with the leave of the House, I am rather forced to my feet by the noble Lord, Lord McIntosh of Haringey. I would suggest that he has lost his bet, because I added a totally different argument from that which was previously advanced—one which I should have thought would appeal to him. I said—and I cannot recall having said it before—that it seemed to me that this would result only in considerably greater interference by the Secretary of State in the affairs of an authority and an executive. I know that we are at one in not wishing that to happen, but that is what the amendment suggests.
The noble Lord, Lord Sefton of Garston, spoke about a snowfall and added another scenario, but I do not believe that we can be expected to legislate for acts of God. I suggest that it would be extremely bad management not to hold reserves against contingencies. Noble Lords opposite seem to suggest that this is not one of the ways out of a problem which might arise. They want to shift that responsibility to the Secretary of State. I suggest that this is not right. I could not possibly agree with the arguments which noble Lords opposite have put forward. To accept the amendment would be to throw away the orderly processes provided for in the Bill and to substitute possibly a continuous process of approaches to the Secretary of State, with the substitution of his decision about the amount of the grant rather than leaving that to be determined by the authority, which is what noble Lords opposite have been calling for throughout. Their arguments have not persuaded me.
Lord Underhill: My Lords, as discussion of the Bill continues I grow more and more amazed. We are now told that this amendment would interfere with the determination of the grant by the authority. The authority can determine nothing. It can say what it thinks the grant should be, but when the Minister can say, "No, I shall give you different guidance, and if you dare to vary it somebody can go to the courts" that is not determination by the authority. With all respect to the Minister, it is nonsensical to put forward that argument.
Of course a similar pattern is to be found in the three amendments moved at Committee stage, Report stage and Third Reading. With respect to the noble Lord, Lord Boyd-Carpenter, that is the purpose of this House. What we have tried to do at each stage is to listen to the ministerial arguments and to adapt the amendment accordingly, hoping that it would then be acceptable to the Government. We adapted the amendment moved at the Committee stage. At the Report stage we hoped that it would meet the arguments advanced by the Government. But that amendment was not successful. This time, therefore, we have gone to the ultimate. Therefore the amendment says, "with the approval of the Secretary of State". How much further can one go in adapting amendment after amendment? I am certain that the noble Lord, Lord Boyd-Carpenter, did not mean what he said, otherwise the revising function of this House is useless and we may as well dispense with the revision stages—and with this House.
Lord Boyd-Carpenter: My Lords, if the noble Lord, Lord Underhill, is challenging me on that point, may I say that I was replying to his noble friend Lord McIntosh of Haringey who criticised my noble friend the Minister for using the same arguments on this occasion as those used on previous occasions. I pointed out that as the amendment is substantially the same as those moved on previous occasions, consistent and sensible answers must also be more or less the same. Surely the noble Lord can absorb that proposition.
Lord Underhill: Except, my Lords, that I am saying that it is a substantial change to give the authority to the Secretary of State. This was not proposed in any previous amendment. Noble Lords will see the point that I am trying to make. Emphasis is placed on the number of courses which are available. My noble friends Lord Sefton and Lord McIntosh of Haringey have dealt at length with the business arguments against the courses which have been set out. To say that if there is an unforeseen emergency one should increase fares in an area where there is 25 to 30 per cent. unemployment, might result in employers in the area saying, "What the devil do you think you are doing by increasing fares? Think of the effect it might have on employers and their employees". Recourse to borrowing and recourse to increased fares might be unsuitable. We are therefore saying that an authority should not be allowed to take this decision; they should put their case to the Minister. If the Secretary of State says that he does not regard it as an emergency in which the Government can act in this way and asks whether there are other ways of dealing with it, then he can say, "I will not agree". But if he considers that a case has been put up, the Secretary of State will decide. That is what this amendment says.
When I am told that this will increase the number of exchanges between the authority and the Secretary of State, I hope that the Minister will go to the department and take a look at some of the exchanges which are taking place already, before this Bill is even passed, on points concerning the chronology of the planning process. I have seen some of the correspondence, so I do not want to be told that this will increase the number of exchanges between the authority and the Secretary of State. If this will deal with a situation where the final decision rests with the Secretary of State, then surely that is something which the whole House ought to applaud.
When I am then told, as a final argument, that we should not wish to press this amendment because it will increase interference by the Secretary of State in the affairs of the authority, we would have preferred to have seen matters the other way around. We tried this at Report stage. The Minister, for various reasons which we have heard explained, said "No." So now we have come to the ultimate point. We have said: "Right, this emergency has come. It is unforeseen and beyond control. Who will take the decision? We will put up the case, but the Secretary of State's approval must be given to it." That seems to be so reasonable.
This issue is not one on which I was proposing to divide the House, but some of the same arguments put against this amendment were put forward last time,

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and have been adapted each time to knock out a different stage. Unfortunately, there are only three stages to a Bill. If there were another, we would adapt the amendment yet again and see what other argument was put forward against it. But that is not a possibility, and so we can only show our disagreement and our objections to the arguments of the Minister and of the Government. All we want to do is say, "All this is subject to the approval of the Secretary of State." If that is not acceptable to the Government, then your Lordships' House ought to say, "Yes, it is."
4.52 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 58; Not-Contents, 106.

DIVISION NO. 2

CONTENTS

Ardwick, L.

Kirkhill, L.

Avebury, L.

Leatherland, L.

Aylestone, L.

Listowel, E.

Bacon, B.

Lloyd of Hampstead, L.

Banks, L.

Lloyd of Kilgerran, L.

Beaumont of Whitley, L.

Longford, E.

Beswick, L.

McIntosh of Haringey, L.

Bishopston, L. [Teller.]

Mayhew, L.

Blease, L.

Melchett, L.

Blyton, L.

Mishcon, L.

Briginshaw, L.

Oram, L.

Brockway, L.

Phillips, B.

Bruce of Donington, L.

Pitt of Hampstead, L.

Chitnis, L.

Rathcreedan, L.

Cledwyn of Penrhos, L.

Sainsbury, L.

Cooper of Stockton Heath, L.

Sefton of Garston, L.

David, B. [Teller.]

Stedman, B.

Denington, B.

Stewart of Alvechurch, B.

Elwyn-Jones, L.

Stewart of Fulham, L.

Ezra, L.

Stone, L.

Hale, L.

Strabolgi, L.

Hampton, L.

Tanlaw, L.

Hatch of Lusby, L.

Taylor of Gryfe, L.

Houghton of Sowerby, L.

Taylor of Mansfield, L.

Hunt, L.

Tordoff, L.

Jacques, L.

Underhill, L.

Jenkins of Putney, L.

Wallace of Coslany, L.

John-Mackie, L.

Walston, L.

Kennet, L.

Wootton of Abinger, B.

NOT-CONTENTS

Ailesbury, M.

Daventry, V.

Airey of Abingdon, B.

Davidson, V.

Auckland, L.

De La Warr, E.

Avon, E.

Denham, L. [Teller.]

Balfour of Inchrye, L.

Drumalbyn, L.

Bellhaven and Stenton, L.

Eccles, V.

Blake, L.

Ellenborough, L.

Boyd-Carpenter, L.

Elles, B.

Caithness, E.

Elliot of Harwood, B.

Campbell of Croy, L.

Elton, L.

Carnegy of Lour, B.

Fortescue, E.

Cathcart, E.

Fraser of Kilmorack, L.

Cockfield, L.

Gainford, L.

Coleraine, L.

Gibson-Watt, L.

Constantine of Stanmore, L.

Gisborough, L.

Cork and Orrery, E.

Glenarthur, L.

Cottesloe, L.

Glenkinglas, L.

Cox, B.

Gormanston, V.

Craigavon, V.

Gray, L.

Cullen of Ashbourne, L.

Greenway, L.

1374

Hailsham of Saint Marylebone, L.

O'Neill of the Maine, L.

Orr-Ewing, L.

Hampden, V.

Penrhyn, L.

Henley, L.

Plummer of St. Marylebone, L.

Hylton-Foster, B.

Ilchester, E.

Porrit, L.

Ironside, L.

Rawlinson of Ewell, L.

Killearn, L.

Ridley, V.

Kilmany, L.

Romney, E.

Kinloss, Ly.

St. Davids, V.

Lane-Fox, B.

Saint Oswald, L.

Lauderdale, E.

Sandys, L.

Lawrence, L.

Seebohn, L.

Long, V.

Shuttleworth, L.

Loudoun, C.

Skelmersdale, L.

Lucas of Chilworth, L.

Somers, L.

Lyell, L.

Spens, L.

McAlpine of Moffat, L.

Stamp, L.

McFadzean, L.

Strathspey, L.

Macloed of Borve, B.

Sudeley, L.

Mancroft, L.

Swinfen, L.

Margadale, L.

Swinton, E. [Teller.]

Marley, L.

Taylor of Hadfield, L.

Merrivale, L.

Terrington, L.

Mersey, V.

Teviot, L.

Mills, V.

Trefgarne, L.

Milverton, L.

Trenchard, V.

Molson, L.

Trumpington, B.

Montgomery of Alamein, V.

Vaux of Harrowden, L.

Mottistone, L.

Vickers, B.

Murton of Lindisfarne, L.

Vivian, L.

Newall, L.

Westbury, L.

Northchurch, B.

Wise, L.

Nugent of Guldford, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5 p.m.
Lord Underhill Lord Underhill moved Amendment No. 6:
Page 5, line 33, at end insert—
("( ) The National Bus Company and their subsidiaries and the British Railway Board shall supply an Executive with such information as they reasonably require for the purpose of preparing a plan under section 3 above.").
The noble Lord said: My Lords, once again I have to make it clear that an amendment dealing with the general content of this present amendment was brought forward at Report stage. Reference to the need to obtain information from the National Bus Company so as to supply information to the Secretary of State has been left out. It has been left out because of the attention which the Minister drew to the provisions of the 1962 Act, which provide the Secretary of State with a comprehensive power to obtain all information from the National Bus Company directly. But we have now included in the amendment the need to obtain information from British Rail as well as the National Bus Company and its subsidiaries. To meet the point which the noble Lord, Lord Boyd-Carpenter, made at Report stage, the word "reasonably" has been included. I shall be too optimistic if I assume that he will therefore support my amendment, but I still hope so.
The noble Lord, Lord Lucas, said that Section 24(2) of the 1968 Act places the National Bus Company and the executives under a duty to co-operate with one another and to enter into agreements as to services to be provided within a metropolitan county. That is correct, but that subsection is nothing to do with the provision in this amendment—neither subsection (2) nor subsection (3) of that section. I will not take the time of your Lordships in explaining the point, except

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to say that I am sure the noble Lord the Minister will agree when he looks at those two subsections that they have no relationship to what we are trying to do in this amendment. There is need for the executives to have such information as they may reasonably require—that is in the amendment—for the purpose of preparing the annual plan, which is to be spread over three years, which is part of the purpose of this Bill.
There is another reason why this amendment should be supported. Apart from the purpose of meeting the criticism of the Minister, which we have tried to do in this new amendment, it was made absolutely clear when I attended a meeting last Friday of representatives of transport executives and of transport authorities that hitherto considerable difficulty has been experienced in obtaining required information from the National Bus Company and also from British Rail. In fact, some officers of transport executives said that the information required in connection with the submission of their TPP was sometimes two years old. Therefore, if the executives are to be in a position to really carry through the requirements of the Bill, to submit a proper annual plan covering three years, it is absolutely essential that there be statutory powers for them to obtain reasonable information from both the NBC and its subsidiaries and, as now included, also from British Rail. Past experience of transport executive officials makes it quite clear that this amendment is really necessary. I beg to move.
Lord Lucas of Chilworth: My Lords, without being frivolous, perhaps I could remind your Lordships of some of the words the noble Lord, Lord Underhill, used when we were discussing the last amendment. He referred to having had to adapt his amendments to meet what we had said. Frankly, this amendment is an absolute adaptation; it is fundamentally the same, but it brings in the British Rail element and adds one word. Recognising these small differences, I would not have thought they were very significant; but if the noble Lord wishes again to debate the basic issue then that is, of course, his prerogative. The present amendment introduces the word "reasonably", which my noble friend Lord Boyd-Carpenter pointed out in a teasing way when we last discussed this would be necessary in the interests of consistency. Of course, the House did not accept that amendment, as the noble Lord reminded us.
This new amendment extends to the British Railways Board. If I may take that point first, I do not think it can be argued that it adds anything of substance to the amendment we considered last time. There is already the existing power in Section 20(3) of the 1968 Transport Act that the Railways Board,
"shall furnish the Executive with any information which the Executive may reasonably require for the purposes of discharging their responsibilities".
Lord Sefton of Garston: My Lords, will the noble Lord give way?
Lord Lucas of Chilworth: My Lords, I think it would be very difficult for me to follow my own line of argument—and, indeed, for the noble Lord, Lord Underhill, to follow it—if I gave way before I had
1376
finished saying what I have to say in response to the amendment. If noble Lords opposite feel that I am perhaps taking an attitude to which they really object, I am happy to give way, but I think it would be more helpful if I went on.
I was talking about there being an existing power under Section 20(3) of the Transport Act 1968. That provides that the Railways Board,
"shall furnish the Executive with any information which the Executive may reasonably require for the purposes of discharging their responsibilities under section 20(2) for keeping the rail services in their area under review and entering into agreements with the Board for the provision of services".
So I do not think an executive could claim that they lack any adequate power so far as the railways are concerned.
The question of what information is needed from the National Bus Company is perhaps a little different. We discussed this before, and I suggested then—and certainly my inquiries do not suggest that I was wrong at that time—that while there are sometimes disagreements and there may be times when the two bodies, the NBC and the PTE, are not seeing eye to eye, I have certainly not had any evidence brought before me that PTEs have not been able to get the information that they require. The department consulted with both the National Bus Company and, incidentally, with the British Railways Board, at the same time as we were trying to have consultation with the AMA, about the information requirements that would result from the Bill. We were concerned then, and we are still concerned, to ensure that there is so far as possible general agreement about what needs to be provided, and that the requirements are in a form which will not create unreasonable difficulties either for the Railways Board or for the NBC, any more than for authorities and transport executives.
The Railways Board and the NBC have been helpful and constructive in their approach to our consultations. Frankly, I have to say that I wish the AMA attitude had been as forthcoming at that early stage as were the NBC and the railways. Having said that, I should add that in recent days—in fact only from about 18th March until this morning—the AMA have responded in a very much more fulsome manner to the consultation documents which we have put out. That is, of course, to be commended and is helpful to everyone concerned.
Nevertheless, I remain convinced that the sensible way of getting the information requirements and the planning system right is in discussion and agreement and not by relying on additional statutory powers. If one had them it would add nothing material within the context of this amendment. We took that view on Report and I have to tell your Lordships that we see no reason at this stage to change it.
Lord Underhill: My Lords, I am almost tempted to take up the point that the noble Lord made about the AMA because I am aware of the reply to which he referred. The reason why the AMA hitherto has not sent various pieces of information is that co-operation was required from the AMA on how to carry out a Bill to which they were opposed. They were not brought into consultation about the provisions of the Bill. As I shall explain later, the White Paper and the Bill both

1377
came to Parliament on the same day. This amendment is not intended to be critical of the NBC or of British Rail.
The Minister said that we ought to secure this information by discussions and agreement, and not by statutory powers. I wish that statement had been made before we started consideration of this Bill, because the whole of it is statutory powers on what the authority must do and the information it must give, what the executive must do and the information it must give. It is riddled on almost every page, in every section and subsection, with powers. If that is what the Government wanted to avoid we could have had numerous amendments to the Bill.
Reference was made to the Act of 1968, but that is 15 years ago. We are talking about information required for a different purpose—to prepare a plan each year for the next three years. That is a totally different thing altogether. The Minister can take my assurance that the people I was with on Friday afternoon all expressed concern that it was essential that if they are to do the job of preparing a three-year plan they must have this information. However, one can see the attitude of the Government. We will not press this further, but the statement that I have made and that the Minister has made are on the record. I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
Clause 7 [Review of managerial organisation]:
5.12 p.m.
Lord Underhill Lord Underhill moved Amendment No. 7:
Page 6, line 27, leave out from ("shall") to ("cause") in line 28 and insert ("if the Secretary of State so requires, not more than once in any period of three years").
The noble Lord said: My Lords, a similar amendment was put forward on Report and I will briefly explain why. On that occasion the noble Lord, Lord Lucas of Chilworth, said:
"I can say categoricaly that the Secretary of State has no intention of requiring transport authorities to cause frequent reviews to be made of the management and organisation of their executives.".
That is a statement which I think was generally welcomed. Shortly afterwards the noble Lord, Lord Lucas, said that he reiterated the assurance given by the noble Lord, Lord Bellwin, in Committee that the Secretary of State would call for a review,
"only at the time of giving the guidance".
The noble Lord, Lord Lucas, added:
"It would be undesirable to modify the Bill to prevent the Secretary of State asking for more frequent reviews. However, I assure the House that it is not his intention to ask for such reviews more frequently than once every three years."—[Official Report, 21/3/83; cols. 956–957.]
Therefore, we have a situation where categorical assurances are given that it is not the intention to ask for reviews more frequently than once every three years but at the same time we are told that it is undesirable to modify the Bill to stop the Secretary of State from asking for more frequent reviews. One hand seems to disagree with the other hand, or the same voice disagrees with itself at different stages of the discussions.
It must be pointed out that these reviews under the Bill are for a particular purpose. They are not general
1378
organisation reviews. They are to determine whether any particular activities should be managed as separate units with separate accounts. If it is the intention of the Secretary of State to act as has been stated by the Minister—and I freely accept those assurances—then that should be in the Bill. But we cannot have legislation drawn up on the basis of assurances from the Secretary of State for the future. As we have said time and again, the Secretary of State may not be there. There may be a different Secretary of State and different circumstances. I think we are right in the point that we have put forward by moving this amendment but having noted what the Minister said, with which I totally disagree, I beg leave to withdraw the amendment.
The Deputy Speaker (The Earl of Listowel): The amendment is not moved.
Lord Underhill: My Lords, I should explain that I am withdrawing the amendment, having already moved it.
Lord Skelmersdale: My Lords, if the noble Lord, Lord Underhill, will give way for a moment, he has in fact neither moved the amendment nor withdrawn it in the current state of play because my noble friend has not answered. If the noble Lord wants an answer he will have to move the amendment.
Lord Howie of Troon: My Lords, the amendment should not be withdrawn just yet because the whole thing hinges on the Secretary of State. Whoever he may be in the future, and it may well be the distant future, he might or might not have opinions and those opinions might or might not be agreeable to the House. Certainly they might not be agreeable to this side of the House. As my noble friend on the Front Bench said, it is not sufficient for us that this part of the Bill should go through merely on the future say-so of the Secretary of State. We should have something from the Government Front Bench which reassures us on how the Secretary of State, whoever he might be, is likely to react in the future to the comments of my noble friend on the Front Bench, which were, I thought, very restrained.
Lord Underhill: My Lords, I apologise to the House. I seem to have spoken so much that I was forgetting. I was dealing with arguments put forward on Report and not with arguments put forward at this stage. May I formally move the amendment so that the Minister can get his reply on record. I beg to move.
Lord Lucas of Chilworth: My Lords, since the noble Lord, Lord Underhill, and the noble Lord, Lord Howie of Troon, are particularly anxious that I should respond I can do no worse. Neither can I do any better than say that I can and do repeat the assurances I previously gave on Report. First, the Secretary of State will not ask for a Clause 7 review any later in a year than the date on which he gives his guidance under Clause 4(5). Secondly, he will not require reviews under Clause 7 more frequently than once in three years. The Secretary of State is in fact likely to use his powers under Clause 7 very rarely because authorities are far more likely to carry out such reviews of their

1379
own accord under the existing powers in Section 15A(3) of the 1968 Act.
I will again remind your Lordships of the examination which London Transport have been making of their bus operations, for they are considering reducing the number of bus districts from eight to six, devolving a great deal of managerial responsibility away from the centre to the divisions. This is precisely the sort of review we have in mind. Most of the authorities, we believe, will undertake such a review of their own accord and the power of the Secretary of State to require a review is really provided to cope with an exceptional situation where an authority does not institute such a review. In view of that repeated assurance, I hope that the noble Lord, Lord Underhill, will do as he suggested when he spoke just a few moments ago, and withdraw his amendment.
Lord Underhill: My Lords, I am glad that I was able to adjust what I had said previously so as to get the Minister's reply on record. It was not exactly in the words which the noble Lord, Lord Lucas of Chilworth, has now put forward. Clause 7(1) is not a general review of the organisation and operation of the activities of an executive. It says it shall determine,
"whether, in the interests of managing the activities of the Executive in the most efficient manner, any particular activities of the Executive should be managed as separate units with separate accounts".
That is the purpose of the review.
I and other noble Lords pointed out way back in the distant Committee stage of this Bill that passenger transport executives do carry out their own reviews of their own organisation. In fact, we were able to instance examples of this, where they had done it themselves. The London Transport Executive has been mentioned by the Minister. That was not a review that they carried out to see whether or not they should run things as separate units. It is a regular review that any sensible executive will carry out from time to time. Having put that statement on the record, let me say that the authorities are not insensitive bodies and the executives are not incompetent bodies, despite the comments that we occasionally get from Ministers. They are bodies which want efficiency. What we were trying to do in this particular amendment was to ensure that we should not have these particular reviews, which are for a particular purpose only, more than once in three years.
The Minister has given assurances that that will not happen. I agree with my noble friend Lord Howie of Troon that that should be in the Bill and we should not just have assurances. But, having had those assurances once again, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Clause 8 [Tenders for carrying on activities of Executives]:
5.22 p.m.
Lord Underhill Lord Underhill moved Amendment No. 8:
Page 7, line 3, after ("persons") insert ("selected from a list of tenderers approved by them").
The noble Lord said: This may seem an unnecessary amendment to some noble Lords—I hope not—but it has a very important purpose. Clause 8(1) provides that:
"An Executive shall … invite other persons to submit tenders to carry on".
such of their activities as the executive may determine, or, under subsection (2), as the authority may direct the executive so to do. The amendment is a commonsense, businesslike proposal that the persons to be appointed to tender shall be:
"from a list of tenderers approved by",
the executive. It may be asked: why do this? It is mainly because of the condition laid down in this clause that—I am just paraphrasing—an executive shall accept a tender which gives satisfactory service and at no greater cost.
In these days, many of us believe that we ought to purchase the maximum amount that we can from British sources. Buses, for instance, may be cheaper from overseas and may reasonably satisfy the operations, but we should not necessarily find the executive compelled to purchase from that source. That is only one example. That is why we want a list. There ought to be a list of tenderers approved by the executive and only persons from that list should be drawn to tender for these respective activities. I beg to move.
Lord Mottistone: My Lords, the noble Lord, Lord Underhill, opened by saying that some of us might not see the point of his amendment. I listened with as much care as I could, and I still do not see the point of his amendment. I do not quite understand why, if,
"An Executive shall … invite other persons to submit tenders",
they need to make a list of them. It seems a very nitpicking sort of thing, hardly relevant to an Act of Parliament, let alone this particular subsection and this sentence. I really think that the amendment does not have much point to it and is not perhaps wholly suitable for a Third Reading amendment.
Lord Lucas of Chilworth: My Lords, notwithstanding what my noble friend Lord Mottistone said, nevertheless we do have an amendment and I think that it would be right and proper to respond to it and your Lordships would expect me to do so.
In the Bill there is no restriction or control over the way that the executives seek tenders. Once executives have decided to invite tenders for an activity, it is up to them to decide how to go about it. They may indeed use a list of tenderers which perhaps the local authority have or they may go out to open tender. In our view it would be completely inappropriate to put in the Bill the requirement for an executive to have an approved list of tenderers. It would interfere, I suggest, with matters which are for the executive. It would certainly restrict their freedom of action and in all other regards be far too much of a constraint upon them. They may consider at some particular stage that they would like to go out to tender on an activity, a tenderer for which may not be on a tender list. It may be a totally new development or a new piece of expertise which has arrived for which they might like an outsider to tender. While on the one hand they can use selective tendering

1381
for certain areas of activities, we would not wish them to be restricted or constrained in any way. Because of that we could not agree to this amendment.
Lord Howie of Troon: My Lords, is it not common for public bodies to go out to tender on a list, whether they are a local authority or any other kind of public body, for any purpose? They know, as a rule, what they want when they go to tender and they also know the kind of people who are likely to be able to meet their requirements, so they go out on a list. That is by no means unusual, unique or new. I take the point of the noble Lord the Minister that from time to time occasions occur when the requirements are themselves new. For such occasions the list would include such others as were able to meet the requirements of the authority. Therefore there is no difficulty in my noble friend's amendment at all. I think that the Government should accept it. There is no difficulty of any kind whatsoever.
Lord Sefton of Garston: My Lords, there is a point. If we look at Clause 8, that deals with the executive alone. If it was left as it is, there is no provision whereby the authority could decide who the tenders should be accepted from. May I remind your Lordships that it is not the first time that committees with delegated authority have done things which the democratically elected body thought other than reasonable? I am not quite certain on a point of order whether I should refer to the other place, but it certainly happened in the other place, when somebody discovered that they were dining off crockery manufactured in West Germany. That was done because of the freedom of the Catering Committee—I suppose one could call the Catering Committee the executive in that regard—to pick where it wanted to pick in regard to a tender.
The point behind the present amendment is that the executive's power to choose a tenderer would be circumscribed by the list approved by the authority. So there would not be a gap. If the list were approved, it would be approved early enough. If it needed reviewing, it would be reviewed early enough. So at all times the authority would be aware of from where the tenders were coming.
I should not like to be in the position in which the present Government might find themselves if, by mischance or deliberate intent, an executive decided that, instead of obtaining buses in the normal way, it would import them from Japan, at a cost which was slightly lower, but which would not compensate for the number of people who would become unemployed because the buses were being manufactured in Japan rather than in this country. That is a real possibility, and all that is needed to avoid it is for the Government to accept the amendment. However, I am quite certain that they will not accept it, because they have resolutely set their face against any constructive amendment at all.
Lord Underhill: My Lords, the noble Lord, Lord Mottistone, said that there was no point in the amendment, and that it is not an amendment suitable for Third Reading. I should like to follow up what my noble friend Lord Sefton of Garston said and draw
1382
attention to the actual provisions of the clause. Subsection (3) states that:
"An Executive shall"—
I emphasise the word "shall"—
"accept a tender invited pursuant to this section if it appears to them that to do so would result in the relevant activities being carried on in a satisfactory manner and at less cost to them than if they were to continue to carry on those activities themselves".
The word "shall" is involved in that provision. Subsection (5) provides that in the report that it must submit the executive must give a statement showing the steps that it has taken during the last accounting period to comply with the requirements of subsections (1) and (2) of the clause.
So, in other words, the Government could say to an executive, "Well, you have had a tender at less cost to yourselves. You can't deny that it would give you satisfactory service. Why haven't you accepted it?" Admittedly, the Minister has said that the authority to accept a tender rests with the executive, but the word "shall" appears in subsection (3), and there is also the report that the executive has to make to the Secretary of State on what it has done to carry out the requirements of the clause.
Therefore there must be kept in mind the point that I made at the outset, and which has been referred to by my noble friends in support of the amendment. We should not wish there to arise a situation where an executive could have satisfactory service at a cost and from a source which would in turn result in unemployment in this country being increased. That would be absolutely undesirable. The purpose of the amendment is to avoid such a situation, as well as other circumstances that we might consider. However, the Minister has explained that, for reasons which, frankly, I could not properly understand, the Government will not accept the amendment, and so I beg leave to withdraw it.
Amendment, by leave, withdrawn.
5.34 p.m.
Lord Underhill Lord Underhill moved Amendment No. 9:
Page 7, line 12, after ("on") insert ("over whatever period they consider appropriate").
The noble Lord said: My Lords, this amendment, too, relates to Clause 8, which concerns tenders. As I have already pointed out, subsection (1) of the clause provides that tenders shall be invited to carry on the specified activities for such period as the executive may specify. However, subsection (3), to which I have already referred, contains a mandatory "shall". The amendment seeks to insert words so that, if the amendment were accepted, the relevant part of subsection (3) would state that the executive shall accept a tender if it appears to it that to do so
"would result in the relevant activities being carried on over whatever period they consider appropriate in a satisfactory manner and at less cost".
So that would remove any dubiety that the executive could not accept a tender for activities to be undertaken over a period which it considered appropriate and satisfactory. I beg to move.
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Lord, Lord Underhill, for explaining the purpose of the amendment. However, I

1383
think that the point is adequately covered by subsection (1) of the clause, since the subsection specifically states that the executive may invite tenders
"for such period"—
and so on—
"as the Executive may specify".
So if the executive thinks that the particular activity for which it is inviting tenders must be looked at over the long term, it is perfectly entitled to insert such a qualification in the tender invitation. If, likewise, the executive is convinced that a tenderer has looked at an issue and submitted a low tender solely on the basis of a short-term calculation, it is entitled to say that it is unacceptable because it is not convinced that the activity would be satisfactorily carried out; that is of course in relation to the details and the time period specified in the invitation to tender. I think that the Bill allows the executive full flexibility with regard to anything that it may wish to insert in an invitation to tender document, and I can see no point in this additional amendment to the Bill.
Lord Underhill: My Lords, the Minister has given the reasons why the amendment cannot be accepted. The reference in subsection (1) to "such period" refers to the invitation to tender. It may well be that when the tenders are received, although they may seem satisfactory and the cost would be economically advantageous, for some reason or other the executive may wish, by agreement with the tenderer, to extend the period, or it may wish to have a more limited period. The Minister said that that is what the provision really means. This is one of those cases where the addition of a few simple words might avoid a devil of a lot of correspondence, interviews and meetings in order to try to settle the issue, and at the end of the day might avoid even possible court arguments. Yet the Government are adamant that they will not accept this simple, commonsense proposal, which would provide a very valuable safeguard. The Government have resisted the amendment, and so I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 10 [Commencement of Part 1 and transitional provisions]:
Lord Underhill Lord Underhill moved Amendment No. 10:
Page 8, line 33, after ("not") insert ("without the approval of the Secretary of State").
The noble Lord said: My Lords, perhaps it will be convenient for your Lordships to take, with this amendment, Amendment No. 11. We come to the final amendments at the last stage of the Bill at which it is possible to move amendments. We are placing a power completely in the lap of the Secretary of State, and we hope that at this last opportunity we might secure acceptance by the Government of an amendment.
At the Report stage in the other place Clause 10(2) was amended without any consultation, without any debate whatever, without even an explanation by the Minister who moved the amendment, because the guillotine was in operation. As amended, the
1384
subsection imposes a complete block on payments of revenue grants in 1983–84—which I would remind your Lordship commences on 1st April this year; only a few days ahead—until the Secretary of State has issued guidance and the authorities have made the determination of the amounts required under the subsection.
I am assured that passenger transport executives generally are paid the revenue grant on a monthly basis, and there is considerable concern about the hold-up which may occur with the April and May payments this year if the Bill as it now stands receives Royal Assent. Based on the provisional protected expenditure level figures set out in the White Paper, the amounts which could be held up for the two months could reach £70 million. If, to maintain cash flow, the public transport executives have to borrow, that will further increase their expenditure. That would be commercially undesirable, and should be avoided.
The insertion of the words set out in the two amendments would enable the Secretary of State to allow the normal monthly payments to be made where he thinks that is appropriate; in other words, where it has not been possible for him to go through the process that is set out in the Bill, but there is likely to be a hold-up in the payments for April and May of this year, which could reach £70 million. If one looks at the figures relating to the provisional guidance in the appendix to the White Paper, one sees a figure of £436 million for the year. Divided by six for two months, that gives a figure of £70 million. It is a big problem. I hope the Minister will not say that the executives can borrow the money. This is an important business proposal; there are no politics involved. At the end of the day, we are saying that we want the Secretary of State to give authority, if he considers this necessary, for the payments to be made without going through the process outlined in the Bill for any one of the earlier months of the first year. I beg to move.
Lord Pitt of Hampstead: My Lords, I hope the Government will accept this amendment. We are passing the Bill this week, probably today. Clause 10 will then come into effect. The Government and the authorities will not have gone through the planning process in time for a proper estimate to be made of the payments that will start on Friday. The amendment provides a safeguard that would be useful to the Government, to the authorities and to the executives. It allows for the Government to continue their planning process while allowing the executives in the meantime to receive payments from the authorities without the proper determination incumbent upon them under Clause 10. The amendment is merely a safeguard—in fact, a sort of long stop—which I consider (given the circumstances in which we are passing the Bill) should be acceptable to the Government. I hope they will accept the amendment.
Lord Teviot: My Lords, I hesitate to intervene. I have listened with interest to all the debates. I heard Lord Underhill move the amendment. I can follow his argument when he talks about the situation in regard to the next two months' payments. However, I cannot see what effect the wording of the two amendments will achieve. I am not sure of the purpose behind the

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words. I hope that my noble friend may know what is intended.
Lord Lucas of Chilworth: My Lords, I am grateful to the noble Lords, Lord Underhill and Lord Pitt, for raising this point. I can appreciate their worries about the likely consequences if there were to be a delay after Royal Assent in issuing guidance and the authorities making their determination. I do not, however, believe that the amendment is necessary. I hope that I can categorically set your Lordships' minds at rest.
The Secretary of State will issue guidance very quickly following Royal Assent—in fact, as soon as possible after he has considered any new information that the authorities and the executives wish to supply. This should take only a few days. There will therefore be no delay at the Government's end. It is, of course, for the authorities to decide how to make their determination. I know that the authorities have been closely following the progress of the Bill, and I am sure that, as responsible bodies, they have made adequate contingency plans to make a speedy determination.
Lord Underhill: My Lords, the Minister says that this may take only a few days after Royal Assent. For the benefit of the noble Lord, Lord Teviot, I should like to explain why we consider the amendments necessary. Under the Bill,
"An Authority shall not make any revenue grant in the year beginning on 1st April 1983".
We wish to amend the Bill to insert, after the word "not", the words,
"without the approval of the Secretary of State".
We also wish to amend the words,
"no such determination shall be made by an Authority unless they have been given guidance by the Secretary of State",
to read,
"except with the approval of the Secretary of State no such determination shall be made by an Authority unless they have been given guidance by the Secretary of State".
On what facts will the Secretary of State make a decision of this great importance within a few days of Royal Assent? What will be the basis? What will be the criteria? The Secretary of State has had no plan from the executive. After he has given his guidance figure, the authority has then to give its determination. There could be delay. Discussion, argument and controversy may occur. One is talking of the possibility of £35 million in April this year, not next year, and of £35 million in May this year. One would have thought that it was plain business common sense for the amendment to be inserted. It is not asking that any particular authority be given to the executives; it is not asking for any special authority to be given to the transport authority. It is giving the Secretary of State power to say that he will approve, if necessary.
One would have thought that the Government would jump at the opportunity to accept the amendments. We are placing something in the lap of the Secretary of State to enable him to avoid a complication. If a complication now occurs under Clause 10(2), it will be the Government's responsibility for putting the Bill forward in this manner. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 11 not moved.]
5.48 p.m.
Lord Lucas of Chilworth: My Lords, I beg to move that this Bill do now pass. I regret very much that my noble friend Lord Bellwin is unable to be present today. I wish to begin, if I may, by reminding your Lordships that at Second Reading he described the urgent need for greater certainty and stability for our public transport services both in the GLC and the metropolitan areas, and the need for improved efficiency and better value for money. Finally, he emphasised the need to achieve a proper balance between the interests of ratepayers and of transport users. That is what this important Bill seeks to do.
My Lords, the Government fully recognise that it is necessary to subsidise public transport in our major cities. Indeed, the Government accepted £283 million for revenue support through the transport supplementary grant for 1983–84. In setting the provisional PELs, we were prepared to protect no less than £436 million. Nor, my Lords, should we forget the substantial Government contribution to capital spending on public transport. The Government have, for example, contributed over two-thirds of the total estimated cost of £425 million, at December 1982 prices, of the Tyne and Wear Metro scheme. Although the Metro is not repaying its capital costs, there have been real benefits in that it has encouraged forward-looking Management and manning policies and practices.
These huge sums reflect significant Government commitment to public transport in our cities, but the Government, it must be firmly stated, have viewed with alarm growing and accelerating demands for subsidy for local transport. In 1979–80 the sum was £139 million; in 1982–83 it was nearly £400 million; and the level predicted last summer for 1983–84 was no less than £700 million. Since last summer there has been time for reflection—a process encouraged by the publication of this Bill and the White Paper. And on reflection it is significant that many authorities have been able to curb their appetite for revenue support. It now looks as though about £500 million will be spent on subsidy next year, but authorities have not yet determined their grant under the Bill.
To judge from their rate precepts, some authorities do not propose to alter course, so that if the final PELs are similar to the provisional ones, they could not therefore have the whole of their subsidy protected from legal challenge. But others appear to be making quite significant downward adjustments. This must be due, at least in part, to this Bill, which in my view very clearly offers protection to reasonable levels of subsidy while not preventing authorities from deciding for higher levels of subsidy should they so wish. But unless the higher level is clearly justifiable, there will then be a real risk of challenge. In this way the Bill certainly improves the clarity of the legal basis for subsidy but without, admittedly, providing protection for excessive levels.
One result of the reassessments by authorities will be the more selective use of subsidy. In the Government's view there is all the difference in the world between holding fares down to 1976 levels using massive tranches of ratepayers' money, as South Yorkshire have been doing, and the judicious use of subsidy to maintain a reasonable network. The bill for cheap

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fares in South Yorkshire in 1982–83 is estimated at £53 million. However, whatever South Yorkshire decide to do, a number of the other authorities appear likely to adopt a more reasonable and protected level of subsidy, and to try to provide—and no doubt they will—the best services they can within that level.
I am of course aware that individual authorities, and the Association of Metropolitan Authorities on their behalf, are opposed to the Bill and were initially unwilling to discuss it. I believe that we have dispelled some of their genuine fears—for example, by showing that the Bill really does leave almost untouched the existing powers of the authorities and the executives. Most of the authorities have now discussed the Bill and the provisional PELs with the department. The department regrets that discussion between the department and the authorities, executives and the association was restricted during the early period, but now that the Bill has reached its final stages we very much hope that all concerned will get gack to the more usual and proper discussions. Indeed, I was very glad to hear that the AMA are now providing comments on the most recent of the department's consultation documents. Although these comments are a mixture of support and criticism—I do not suppose that we would have expected otherwise—they do form a basis for discussion and improvement. I very much hope that this is a sign of a return to improved relationships between the department and the association and, of course, the individual authorities and executives.
The noble Lord, Lord Underhill, has worked strenuously indeed, I think I might describe it as indefatigably, in persuading us all to look most carefully at this Bill. That is quite proper. I can readily understand his disappointment that the Government have not accepted any amendments and we shall no doubt discuss that in relation to the Motion which we shall come to shortly. With the leave of your Lordships' House I would wish to say a few further words at the end of that debate. But at this time I think that your Lordships would like me to place on record our thanks to the noble Lord, Lord Underhill, for the work which he has done on the Bill. He has, of course, been ably supported by the noble Lord, Lord Mishcon, who as always managed to develop complex and very devastating arguments from a few well chosen words. His ability is to make those words into something of a heavy artillery barrage. Nevertheless, I am very glad to place on record that answering fire came from this side of the House and I should particularly like to mention my noble friends Lord Boyd-Carpenter and Lord Campbell of Alloway.
I was particularly impressed with the contribution made by the noble Lord, Lord McIntosh. I am sorry that he is not in his seat because I would have liked to say to him that he and I perhaps had something in common in that this was his first major Bill speaking from that side of the House, as indeed your Lordships will recall this is my first major Bill speaking from this side of the House. There were of course other noble Lords who contributed—the noble Lord, Lord Sefton, the noble Lord, Lord Pitt, the noble Lord, Lord Tordoff, my noble friend Lord Teviot, my noble friend Lady Gardner of Parkes and, indeed, the noble Baroness, Lady Bacon, and the noble Baroness, Lady
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Nicol. If I have left anyone out, it is not to suggest that the contributions they made were any more or any less significant than any other.
I thank all of your Lordships who have contributed or listened to our debates. There has been great value in those debates because we have examined the way in which the Bill is to work to see whether there are faults or room for improvement. I believe that our discussions have cleared away many misconceptions and demonstrated how the Bill is to work. Those of us who were present will recall my noble friend Lord Bellwin giving very forceful assurances at Second Reading that, despite allegations to the contrary in the campaign against the Bill, the powers to pay concessionary fares to the elderly, the blind and the disabled were in no way affected by this Bill.
We have also shown that the Bill provides adequately for consultation; it allows any benefits to be taken into account; it provides a taut financial duty which is nevertheless not a straitjacket; and it provides for other measures. We have also given assurances with regard to the organisational reviews under Clause 7. Only a few minutes ago I repeated the assurance that organisational reviews will be requested no later in the year than when the Secretary of State gives his guidance. I repeat that the reviews will not be asked for more frequently than once in three years. We have shown that it is the intention of the Secretary of State to meet the targets requested by the noble Lord, Lord McIntosh, in relation to the timing of the Secretary of State's initial advice and the question of later guidance.
I believe that this Bill should lead to substantial improvements in the areas of the GLC and the metropolitan authorities, in the efficiency and value for money being provided by their massive transport executives, and also in the benefits which they provide from the subsidies. The Bill will also provide protection from legal challenge for reasonable levels of subsidy. And the authorities and the executives, and the taxpayers and the ratepayers, will, in the end, have cause to be grateful for this Bill.
Although the Bill deals principally with public transport I must not overlook the other provision in Clause 11, which provides for the reduction in the National Dock Labour Board's debt to the Government of £23.8 million. This follows an undertaking given by the Government last April to write off the debt arising from the severances in London and Liverpool in 1981 as part of a wider package to help ease the financial problems associated with the continuing reduction in registered dock workers. This measure will benefit all ports involved with the National Voluntary Severance Scheme.
I should like to conclude by using words which come more familiarly to me. The Bill represents a correction in the alignment of the steering gear and an overhaul of the direction indicators as regards public transport within the metropolitan areas.
Finally, may I take this opportunity to thank officials who have helped on the Bill, particularly officials who have had to deal with me personally and who helped me in an area which at one time was extremely unfamiliar to me. Again, I should like to

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reiterate my thanks to those of your Lordships who have participated in the discussions on this Bill. My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Lucas of Chilworth.)
Lord Underhill Lord Underhill rose to move, as an amendment to the Motion that the Bill do now pass, at end to insert ("but this House deplores the insistence of Her Majesty's Government that this Bill should pass unamended through all stages irrespective of the merits of amendments proposed.").
The noble Lord said: My Lords, at this stage I should like to move the amendment which stands in my name. Having formally moved the amendment, I should like to thank the noble Lord, Lord Lucas, for his kindly references to me, and to say how much we on this side of the House always appreciate the way in which his noble friend Lord Bellwin introduces Bills. We congratulate the noble Lord, Lord Lucas, on the way in which he has handled his first Bill in his new position. Having had that experience four years ago—this is now the fourth Transport Bill for which I have had responsibility—I can appreciate how he feels. But having said that, I am sorry that he is in the position of having to defend this particular Bill.
I should also like to thank my noble friends. At the Committee stage of this Bill there were more speakers from this side of the House than there have been on any Transport Bill with which I have been concerned—there was so much feeling about the issue. It is always invidious to mention names, but in particular I should like to express my thanks to my noble friends Lord Mishcon, Lord McIntosh and Lord Sefton. In addition, I have seven or eight names in front of me of noble friends who assisted. Little support came from the Government side. There were notable exceptions but, generally speaking, either Members were satisfied with the answers or, for some reason, preferred not to defend the Government in any of the criticisms being made against them.
As this amendment says, no amendment has been accepted. Seventy were brought forward at the Committee stage, 36 at the Report stage and 11 at the Third Reading this afternoon. A considerable number of these amendments had cross-party support from the Liberal Benches and from the SDP Benches; therefore, they were not just Labour amendments. I am not being presumptuous in saying that our amendments should have been accepted, but not a single Government amendment was based on any arguments that were brought forward whereby the Government thought it was worthwhile trying to introduce an amendment to clarify points. I contrast that with previous Transport Bills. In one Transport Bill there must have been 60 or 70 Government amendments brought forward at subsequent stages because of points which needed clarification. Even in the noble Lord's speech on the Bill do now pass, he referred to assurances. Assurances are not legislation, and those assurances should have been written into the Bill. So even those simple amendments could have been accepted by the Government. But for some reason best known to themselves they preferred not to do so.
A great number of the amendments proposed no interference whatever with the basic intention behind the Bill. I would remind noble Lords that beyond Clause 2 no clause of this Bill was properly debated in the other place. It rested with this House to try to deal with it, and that is what we attempted to do.
I want to raise one other important point. We have heard a great deal about the failure to consult. The White Paper proposing the legislation and the actual Bill were both published on the same day—5th November last. So the only consultation there could have been after that was on how to implement the Bill and not about the principles in the White Paper. That is another reason why we regret that the Government have not seen fit to bring forward amendments to clarify some of the important points, for there are many points in this Bill which needed clarification, and there are still many points in the Bill which could be the basis for legal arguments.
It is not my intention to go through the Bill and give, in effect, what would be another Second Reading speech. The Bill deals with the public transport arrangements for more than a third of the population of England. All the PTAs concerned oppose the Bill, and the executives are concerned about the provisions in the Bill. It is not without some significance that the areas concerned—the GLC and the six metropolitan authorities—have the highest proportion of households without cars, and those figures can be checked from the 1981 Census returns. Except for mid-Glamorgan, the areas covered by this Bill have the largest proportion of households without cars. That is why public transport is so important to these particular authorities and to their executives.
This is a further example of interference with local government. We have been told time and time again by Ministers that there is flexibility and that the authority will have the final decision. The final decision?—yes, so long as you do what the Secretary of State says and accept his guidance figure. It is wrapped in advice and guidance but always from behind, and that is an encouragement which was given without any doubt at all in the White Paper—that if you want to deviate from his advice and guidance, then the courts will determine, and any body of ratepayers or a local authority concerned can take the matter to court.
That is not my idea of flexibility; that is not my idea of a decision which rests with the local authority concerned. Every effort to amend the Bill, so that the plan covering three years must have regard to such important matters as planning and social benefits, has been rejected on the basis that the word "benefits" in the Bill covers everything, despite the fact that we were able to quote from departmental statements issued with the authority of the Government that benefits of a certain kind shall not be taken into consideration in the preparation of the plan.
The Bill is an attack on local democracy. It ignores issues which have been made focal points at local elections. We even had a statement at an earlier stage of the Bill which suggested that manifestos at local elections should not be taken into account—and I am paraphrasing. Local people know what their transport needs are; they should determine the basis for meeting those transport needs. We cannot have a situation,

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which is so prevalent in this Bill, that the Secretary of State knows best and can ignore local mandates.
In moving that the Bill do now pass this afternoon, the noble Lord, Lord Lucas, said that he believes that many fears have been disposed of. I can assure the noble Lord that many fears still exist, and some of the comments which have been made by Ministers have shown no confidence in the local authorities concerned. Those fears must be dispelled if this Bill is not to upset good relations between local and central Government. The department and the Secretary of State will be involved in considerable detail of local transport planning and operation—again, we have quoted from departmental documents. I have referred to letters which I have seen—detailed information about the operation of local services. The planning process, which is to extend over a period of 12 months, is, with all respect to the department, a piece of real Whitehall bureaucracy.
Even parts of the chronological table will be impossible. The Secretary of State will have to give his guidance on the revenue grants before any decisions are made on rate support grant and transport supplementary grant. How that is to be done is not established in the Bill. The Bill establishes a wrong relationship with the transport executives, and they are the unelected operators of the local public transport. They are responsible to the elected public transport authorities, which are the county councils concerned.
We are also told that the Bill will clarify the law. Noble Lords will recall that little that they have heard in our various debates has clarified the law. There is the invitation to hostile individuals and reactionary councils to go to law. The basic criticism of the Bill is that it shows a lack of understanding, or readiness to accept, that public transport is a service which must be based on local needs, local desires and local wishes. Without effective public transport large numbers of people—and I have already referred to the fact that these are the areas with the largest numbers of households without cars—will be unable to move about, and without it, too, our roads in these conurbations will become even more congested. After the Secretary of State has decided the protected expenditure level it will then be left to the local authorities—in some cases an almost impossible task—to meet local needs and what the local people really want.
In the event, this is not really a Transport Bill; it is another local government Bill. It is not designed to improve public transport; it is designed to allocate a predetermined sum of money between the public transport executives. And it is not to decide the best level of public transport provision to meet local needs. There was opportunity to amend the Bill, there was opportunity to clarify some of these points and not to interfere with the basic desire of the Bill, but that opportunity has not been taken. I therefore move my amendment.
Moved, as an amendment to the Motion that the Bill do now pass, at end to insert ("but this House deplores the insistence of Her Majesty's Government that this Bill should pass unamended through all stages irrespective of the merits of amendments proposed.")—(Lord Underhill.)
6.12 p.m.
Lord Boyd-Carpenter: My Lords, I am sure that the whole House appreciated the generous and proper tribute that the noble Lord, Lord Underhill, paid to my noble friend Lord Lucas on his maiden trip in charge of a substantial Bill. I am sure from this side of the House that we should like to join in that tribute, and at the same time express the admiration which I certainly feel for the untiring energy, resourcefulness, and good temper which the noble Lord, Lord Underhill, himself has shown. Those of us who have been on Front Benches both in Government and Opposition know the handicap that the noble Lord, Lord Underhill, is under in not having those wise counsellors who send in little bits of paper when the position might otherwise become a little difficult.
One noted a curious thing about the speech to which we have just listened. The noble Lord, Lord Underhill, repeated with great force his criticisms of the Bill but said very little about the quite remarkable Motion which he has put on the Order Paper and which he has indeed just moved. I shall, with your Lordships' permission, reverse that procedure and say only a word about the Bill, for which my noble friend is responsible and for which he can and, I am sure, will say all that needs to be said, and say a certain amount about the quite serious Motion—for it is a kind of vote of censure—which the noble Lord, Lord Underhill, and his noble friends have placed on the Order Paper.
On the Bill, I want to say that I share the regrets which have been expressed that it has been necessary to introduce a Bill which in fact reduces the independence of local authorities. But what I regret particularly is the necessity for so doing. It is the sad experience of all of us who have seen something of public life that when power is abused then that power, sooner or later, will be restricted. There is really no doubt at all that certain local authorities in this country, and in particular the Greater London Council, have abused their power in respect of subsidisation of transport, and have placed—and are still threatening to place—quite intolerable burdens on their ratepayers in pursuit of their policy.
I only need remind your Lordships that the Greater London Council carried this policy to a point at which they were found to have transgressed the law. They spent a great deal of money—ratepayers' money—both in the subsidisation and indeed in the legal proceedings which they had brought upon them. When local authorities, or anybody else in this country, conduct themselves in that irresponsible way, and indeed in that oppressive way, no Government of any spirit, no Government with any sense of responsibility, can do other than introduce remedial legislation.
The Motion on the Order Paper is a curious one. As I have ventured to suggest to your Lordships, it is in the form of something of a vote of censure. The word "deplores" is there. It is not only a vote of censure on the Government; it is a vote of censure also on your Lordships' House for not having accepted any of the amendments which the noble Lord, Lord Underhill, and his noble friends put down and argued.
I do not suppose for one moment that the noble Lord, Lord Underhill, would claim that anyone

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proposing an amendment is wholly impartial in his assessment of it. Indeed, if he were, he would do it infinitely less well than the noble Lord, Lord Underhill, did. But the fact remains that though the Government advised your Lordships' House to reject the amendments which were taken to a Division, it is a fact that your Lordships' House on every such case, normally by substantial majorities, rejected those amendments. Therefore, I say to your Lordships that this is also to some extent a vote of censure on your Lordships.
It is quite wrong to put the sole responsibility on the Government. The Government, as my noble friend knows very well, cannot always rely on the support of your Lordships' House. In the present Parliament the Government have been defeated on, I understand, some 40 occasions, and some of them matters of great importance. In all those cases the Minister concerned had asked your Lordships, as my noble friend did in this Bill, to reject amendments, or other propositions, and your Lordships declined by a majority to accept that advice.
I need hardly remind your Lordships of the school transport matter on which the noble Duke, the Duke of Norfolk, and the late Lord Butler of Saffron Walden, inflicted a heavy defeat on the Government. I would hesitate also to remind your Lordships of the amendment to give the citizens of Gibraltar, under the nationality Bill, the full British citizenship which they sought, in which I was myself a little involved, and in which I certainly voted against my noble friends. Therefore, it is an assessment which this amendment seeks to raise of the conduct of your Lordships' House.
In one way I was deeply impressed by the anxiety which the noble Lord, Lord Underhill, showed that your Lordships should fully carry out your revising function. I wonder whether in that way he speaks for his right honourable friends in another place? In particular, whether he speaks for Mr. Foot, who has only recently reiterated the doctrine that your Lordships' House should be abolished. The noble Lord, Lord Underhill, cannot ride both horses. He cannot say that your Lordships should, when he wants to do so, amend the Bill radically because your revising function is so important, and at the same time say that your Lordships' House should be abolished. Therefore, I shall be interested to hear whether the views of Mr. Foot, or whoever it may be who will, presumably, sooner or later, succeed him—sooner, I understand, rather than later—will prevail, or the view that this House should discharge a revising function. I—I make no concealment of it—am one whose whole bias is in favour of your Lordships' House exercising its revising function particularly when, as the noble Lord, Lord Underhill, was perfectly justified in pointing out, the Bill in question has been subject to the guillotine procedure in another place and part of it came here undiscussed. Therefore, if one is to deal with this amendment fairly your Lordships must look at what actually happened.
I do not claim to have the 100 per cent. attendance record during our debates—it must almost feel like 105 per cent.—that the noble Lord, Lord Underhill, has had, but I can claim to have heard most of the debates and I think that I have been involved in all but one of the Divisions. I have a very clear recollection
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that the amendments fell into two broad categories. The first category was amendments which, in greater or lesser degree, would frustrate the purpose of the Bill and make it less effective for the perfectly clear purpose for which it has been produced, which I shall not repeat because my noble friend Lord Lucas has set it out so clearly. The other category was small amendments to the phraseology—the addition of adverbs, slight adjustments to the terms—for which there was of course some argument. But in every case there was also a considerable counter-argument which your Lordships were fully given, and—if I may be allowed to repeat this—when the noble Lord, Lord Underhill, called a vote, resulted in the amendments being rejected.
Nor, my Lords, when one is considering, a Bill of this sort, is it sensible to ignore the fact that this is a Bill which basically embodies a conflict between the Conservative and Labour Parties. It is a measure on which there is a genuine difference of party philosophy and party doctrine. It is significant, but understandable in that context, that the speeches against it were made almost exclusively—I, of course, except the noble Lord, Lord Tordoff—from the Labour Benches. We had the indefatigable Lord Underhill, the equally indefatigable Lord Mishcon and, occasionally, the sound of Thames water from the noble Lord, Lord McIntosh of Haringey, and what I might call a Mersey sound from the noble Lord, Lord Sefton of Garston. But it was a straight party issue. I think I am right in saying that there was not a single speech from the Cross-Benches; and, in view of the immensely important part in most of our legislative process which the Cross-Benches fulfil, that was, perhaps, some confirmation of the proposition which I am venturing to put to your Lordships.
Therefore, I come back to the point that is posed by this amendment. Given that this is a Bill on a narrow but important issue which in the view of my noble friends is urgently needed to protect ratepayers from very serious further burdens being imposed upon them by improvident or, indeed, extravagant local authorities acting in support of their own party docrine, is it the kind of Bill, contested almost exclusively by the official Opposition, on which it is to be expected that amendments are likely to be accepted?
It would be a little naive for this purpose to put this Bill in the category of the great major measures, raising great constitutional and philosophical issues, on which your Lordships have so frequently divided in recent years—for example, measures such as the British Nationality Act—on which opinions of all sorts were expressed from all sides of the House and on which amendments were put forward, some of which were carried against the wishes of the Government, while on others the Government themselves succeeded in meeting the objections raised. This Bill is not in that category. Noble Lords opposite know that as well as I do.
Therefore, I hope that now that we have had this Motion, and when such of your Lordships as so wish have eased your feelings by indicating support for it, we shall be able to get back to the normal position in this House, in which every issue that is raised and debated is debated in a friendly and understanding—even if, sometimes, contesting—

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manner; and that your Lordships, after due debate, will deal with the Motion of the noble Lord, Lord Underhill. I express the profound hope, which I have no doubt is shared by my noble friend the Chief Whip, that in due course it will be resoundingly defeated.
6.26 p.m.
Lord Mishcon: My Lords, the House has been privileged to hear a weighty speech from a weighty speaker, in the form of the noble Lord, Lord Boyd-Carpenter. Let me at once emphasise, in view of the joviality of the noble Lord, that I was referring to his mental capacity and not to his physical capacity. He took the trouble to deliver such a weighty speech upon a Bill which he thought was not weighty in content, and I have the idea that he thought that some of the things that he had to say to the House—always matters which are worthy of consideration—were of weighty importance. Indeed, they were.
One of the things one has noticed about the debates which have taken place on this Bill, especially when those on the Front Bench have spoken, and those who carry all the authority that the noble Lord, Lord Boyd-Carpenter, carries, is that the reason for this Bill has been clearly stated. It is the behaviour of profligate, irresponsible local authorities. I am not going to argue from this Dispatch Box whether some authorities deserve those terms. I am going to take it for granted for one moment, in order to shorten my speech and to make the point I want to make, that what they say is true. What I am going to say is that you are bad legislators if what you do is to make national legislation which is supposed to last, and you do it because you regard a few in number, a minority in the whole conglomeration of local authorities, as irresponsible and profligate.
The noble Lord, Lord Boyd-Carpenter, knows a phrase very well from his own legal training and from the profession which is glad to have him as an adornment, and it is "Hard cases make bad law". The legislator and the lawyer use that phrase only to show that you cannot legislate for hard cases. Hard cases are bound to occur. What you must do is to look at the general and see the benefits that you manage to achieve, or possibly the harm, before you legislate. This is mistaken legislation, for the very reason that those who have spoken from the Front Bench, and the noble Lord, Lord Boyd-Carpenter, have advanced today. It is legislation for hard or bad cases, and the good have been caught with the bad.
Why do I say that? Tributes have deservedly been paid to my noble friend Lord Underhill, as indeed they were deservedly paid to the noble Lord, Lord Lucas. I thought that if only our batsmen who played for the first time in a test had scored as many runs as did the noble Lord, Lord Lucas, we should have had a better record in Australia. It was made abundantly clear that this legislation was a local government Bill, said the noble Lord, Lord Underhill, and not a transport Bill. I differ from him, if I may, in only one respect. I literally call it the "Local Government Democracy Burial Bill, No. 2". We have had a No. 1 Bill. We had it before. Now we have a No. 2 Bill. The No. 2 Bill lays down without any doubt at all that the master is the Secretary of State and the office boy is the authority.
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Why that is bad law is very simple indeed to somebody who has tried to serve in a humble capacity in local government for a very considerable fraction of his life. The question is—and I have asked it before: What sort of people are you going to get in the future in local government? Are you going to get people experienced in transport (where transport experience is so necessary in local authorities) to act as office boys under a Bill of this kind? You are not.
I shall turn very briefly to deal with the actual Motion moved by my noble friend by way of an amendment. It is all very well for the noble Lord, Lord Boyd-Carpenter, to make a few quips. They are received, I assure him, with great goodwill and with great good humour. He knows, as well as I do, that there are many people of no party and many people of my party, who are fighting for the continuance of this House, continuance, possibly, in a very much reformed way. The noble Lord, Lord Boyd-Carpenter, has also fought for some reforms to this House in order that its life may be secured.
I have to answer the noble Lord by saying that this Bill, and the way in which it has been treated in this House, has not helped one bit those who are trying to fight that battle; because one of the main arguments that is advanced—and speaking here for myself alone as a relative newcomer to your Lordships' House, I have so much admired it—is the way in which we fill the gaps that are left by another place through the use there of the guillotine or whatever it may be.
Where have we filled the gaps here? Somebody issued an edict, and let us not pretend that it did not happen. "For Heaven's sake," was the edict, "not one amendment to go into this Bill. It must not go back to the Commons. It will spoil the whole of the timetable and all this has to be got in. April 1st is a sacred day. We have got to rush the whole thing—White Paper same day as Bill, Bill same day as White Paper; and when it comes to the Lords it does not matter how many amendments are put down, even an amendment saying that you cannot accept the lowest tender". I think it was the noble Lord, Lord Campbell of Alloway—and I hope I am not taking his name in vain—who thought that that was a perfectly sensible amendment. The answer from the Minister at the Report stage (and I pay him every respect; I have just done so and I meant it sincerely, and now I am trying to use fairly neutral terms) was unsatisfactory. It did not even catch the purpose of the amendment. Although I am used to making speeches which are not well received, at least, I hope that the arguments that I advance are going to be answered; but they were not. That applied to many amendments. The whip, in more senses than one, has been inflicted upon the Front Bench. And I am sorry to say that they have cowered under it.
I am sorry, too, to say—and it is all very well to talk in the terms used by the noble Lord—that people wandered in, strange people from strange places in your Lordships' House, who had not heard a word of the arguments. And then the noble Lord, Lord Boyd-Carpenter, says, when the Division results come out, "Good gracious me! It must be that the amendments were not worthwhile because they were not passed by your Lordships' House."

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I am sorry, my Lords, but this amendment on this occasion is correctly moved. It is correctly moved, with those behind it who have a loyalty to this House. Those who say they are loyal to this House and who vote against the amendment ought to think again.
6.35 p.m.
Lord Tordoff: My Lords, I expressed my views on this Bill at Second Reading and I think that I was one of the first to say that this was not a transport Bill at all, but it was in fact a local government finance Bill. That has been echoed several times since. How often at this stage of the Bill one hears Members on both sides of the House saying that we send it away a better Bill than it reached us. In this case, we send it on its way in exactly the same form in which it arrived at Second Reading. I will come back to that later.
Like the noble Lord, Lord McIntosh, and the noble Lord the Minister, this is the first time that I have been involved from the Liberal Benches in all the stages of a Bill. It has been at times a frustrating and somewhat wearing experience. Nevertheless, it has been interesting and I am grateful to have been able to sit and listen to noble Lords much more experienced than I am, through all the stages of the Bill. I think, in particular, that one has had the usual respect that one has for the noble Lord, Lord Bellwin, who indeed has a great feeling for local government. In a sense one feels a degree of sadness that he has had to be part of the pilotage of this Bill—because I am sure that he has had difficulty with some parts of it—although one understands that he feels very strongly some of the views that were expressed by the noble Lord, Lord Boyd-Carpenter, a few minutes ago.
To the noble Lord, Lord Lucas, one expresses admiration for speaking from the Back Bench. One would hesitate to say that he is poacher turned gamekeeper; nevertheless I think that he has had to suppress his exuberance from time time on matters such as this. I think that, as has already been said, your Lordships would wish to congratulate him on the way in which he has conducted himself in steering the Bill through this House.
It is a bad Bill. One accepts the point that Lord Boyd-Carpenter made in saying that there were perhaps two sorts of amendments to this Bill which were brought before the House. One did not expect that those amendments which directly attacked the strategy of the Bill would receive acceptance. They were not matters of principle and I will not go into the Second Reading arguments about them again. But they were there, they were confronted, and one did not expect that the Government would give way on those or that, with whatever support there was on this side of the House, the Government would be defeated on those. But there were the other sort of amendments which I think the noble Lord, Lord Boyd-Carpenter, tended to trivialise in what he said.
They were the sort of amendments which, in the case of many other Bills, the Government would say, "Yes, we understand the reasoning behind this". Indeed, they said that. And then they would say, "We will take it away" or, "There are certain deficiencies in this amendment but if it were brought back at Report stage and somewhat amended we would be prepared
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to accept it". It did not happen on this occasion. The Government agreed on a number of occasions to have second thoughts on one or two matters, but, unfortunately, when they came back the second thoughts had turned sour.
One is driven to the conclusion, inexorably through every stage of this Bill, that the Government had not the slightest intention of accepting any amendments to this Bill. It is for that reason that my colleagues and I will be supporting the amendment in the name of the noble Lord, Lord Underhill. In passing, may I also offer our congratulations on the way in which on many occasions he so devotedly has put forward amendments against which our names have appeared; he has leapt into the fray with his knowledge and expertise and support from his colleagues.
But I believe that if this procedure were to happen too frequently in this House your Lordships' House would be gravely damaged, for the very reasons that have been expressed by the noble Lord, Lord Mishcon. I did not come here just to be part of another rubber-stamping process and I am sure that goes for many of those Peers who are known these days—dare I say it?—as working Peers. We are here to try to play our part in a rational way and a way which I believe has got through to the British public, who believe that somehow in this Chamber rational argument does on the whole prevail.
The problem has been that we have had to divide too often because the Government have not been prepared to bend, to understand and to accept some of the arguments and to come back at later stages with their own amendments. There has been a confrontation throughout this Bill on both major and minor matters. I believe it is a great sadness and I would counsel my noble colleagues to support the amendment in the name of the noble Lord, Lord Underhill, in the interests of your Lordships' House.
6.42 p.m.
Lord Mottistone: My Lords, I should like to make two quick points to underline what my noble friend Lord Boyd-Carpenter has said and, in a sense, to answer the noble Lord, Lord Mishcon. I do not think that noble Lords, and certainly the noble Lord, Lord Tordoff, have paid sufficient attention to the many occasions when this House has believed that the Government were wrong and have defeated the Government. This is not entirely due to the number of noble Lords sitting on these Benches. In fact, we know very well that if all noble Lords on these Benches were to vote one way and everybody else votes against them, we would be outvoted. There are many examples of that; and I think that perhaps a significant vote, which is very relevant to this particular aspect, was on the very last Division which we had on Third Reading, when the figures were, I believe, 106 to 58. That, I would suggest to noble Lords opposite, was not so much because there was strength on this side but because there was an absence on their side—and that absence could be Cross-Benchers, Liberals, Social Democrats or Labour supporters.
The example of this particular Bill is not as catastrophic to our standing, our good name and all that as noble Lords opposite are attempting to say. The example of this Bill is that it was a straightforward,

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quite simple and very political Bill which really did not require anything in the way of amendment. That is what, collectively, your Lordships have said about it, and have said about it pretty firmly. That is the balance of the position, and I hope that the amendment will be defeated as resoundingly as the last amendment was.
Lord Mishcon: My Lords, before the noble Lord sits down, I wonder whether he would agree with me that, of the 106 votes cast, which he sought to give as an example, less than 25 per cent. were present in the Chamber to hear the argument. Therefore, what can he possibly deduce from that, except that somebody has "whipped" the Government supporters to vote in favour of the amendment?
Lord Mottistone: My Lords, if I may answer that question before I sit down, I would say: how about looking at the 53? There were not all that number on the Benches opposite. Furthermore, noble Lords on the Benches opposite normally produce on these occasions, if they are important—for themselves alone, let alone the other, minor parties and the Cross-Benchers—votes of 70 and 80. That is what is significant, my Lords.
Baroness Bacon: My Lords, I will not detain your Lordships' House for more than two minutes to make just one short but, I believe, very important point, It is one which has already been touched on in general terms by my noble friend Lord Mishcon. During the Second Reading debate I said tht people south of Watford, those who live in the Greater London area, neither knew nor understood the problems and difficulties of the metropolitan counties in the north of England. I come from West Yorkshire, which is a totally different area from the Greater London area, and there we have problems of great rural areas which they do not have here in London. Yet during the Second Reading and the Committee and Report stages we heard speech after speech from the opposite side of the Chamber about how spendthrift are the Greater London Council.
To me, this is beside the point. I do not even care whether they are or are not; but what I do care about is that the people in my county, in West Yorkshire, should be penalised by this Bill because of that. I think it would have been much more honest if the Government, instead of calling this the Transport Bill, had produced a Bill called "The Greater London Transport Bill", and had discussed it in that context. My people in West Yorkshire, the West Yorkshire County Council, and all the local authorities in Yorkshire, are sickened by the idea that they are to be penalised because of this Bill, though they are in a totally different area from the area of the Greater London Council.
Lord McIntosh of Haringey: My Lords, I would follow the noble Lord, Lord Boyd-Carpenter, in one respect, in that I want to speak mainly about the amendment rather than about the Bill. All I will say about the Bill can, I think, come from the White Paper, Public Transport Subsidy in Cities. A study of that White Paper makes it quite clear that, as has been
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said, this is not a Transport Bill. This is a Bill the real objectives of which are not shown in the White Paper and are not made clear in the Bill itself. Indeed, the noble Lord, Lord Boyd-Carpenter, has made it clear why the Bill has been put forward: it is to spite those local authorities who have been behaving in a way which the Government do not approve.
The White Paper said the object of the exercise was to provide a clear and consistent legal framework. I think that anybody who sat through the debates in your Lordships' House will have to recognise that there is at least a case for saying that we will have a less clear and consistent legal framework at the end of the exercise than we had at the beginning, and that what has been resolved by the courts in recent months now becomes a matter for virtually indiscriminate challenge by ratepayers against the elected authorities in their area.
The White Paper says that the object is to have a reasonable, stable and lawful subsidy régime. The Bill provides nothing of the sort. It produces a subsidy régime which is entirely at the whim of the Secretary of State. In the case of the present Secretary of State, of course, the intention is really to reduce public subsidies to public transport. It might be different in the hands of another Secretary of State, and the Bill would then have a totally different effect from that which is intended by the present Government. Without any changes in the wording of the Bill there is no stable régime but simply central Government political control.
The White Paper says it is the intention to build three-year planning into the legislation. We have moved innumerable amendments to try to get that written into the Bill so that there could be three-year planning. All those amendments have been summarily rejected. The financial horizon for public transport is now to be for a single year only, with only indicative plans for future years, and nothing like even the provision for longer-term plannning that there is in the transport policies and programmes procedure.
Finally, the Bill is described in the White Paper as a framework for the future. I venture to suggest to your Lordships that this Bill will not be in its present form on the statute book in five years' time, or possibly not even in three years' time. It is a panic measure, intended to be against some particular actions of local government rather than a serious attempt at planning public transport expenditure for the future.
As to the amendment, I should like to take as my text a quotation from The Times before the Bill came to this House:
"Seldom, if ever, have the surviving functions of the Upper House been more important. A casual glance at the Transport Bill as it leaves the Commons suggests that if a revising Chamber did not exist it would have been necessary to invent it. The Bill will no doubt pass into law. There is no question of the Lords frustrating the will of the Commons but it is vitally important that before it is passed these sections and clauses which have been so far discussed inadequately or not at all should be subjected to the impartial, practical and expert examination of which the Upper House is capable".
Some of your Lordships will not recognise that quotation. I said it was before the Bill came to this House. I did not say how long before. That was on 6th June 1947. It referred to a Transport Bill of the Labour Government which at that time was amended

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substantially by your Lordships' House. What is the difference between that time and this time? Despite what the noble Lord, Lord Boyd-Carpenter, says, it is not the conduct of the House which is being criticised in the amendment. It is the composition of the House which is being criticised. The fact of the matter is that a permanent majority is available to a Conservative Government.
Several noble Lords: No!
Lord McIntosh of Haringey: My Lords, in my short experience I have seen that majority working very effectively. There is a majority available to a Conservative Government which want to push through legislation with a deadline. The deadline is more important than the wording or the effect of the Bill. That majority is available, and during the last few weeks ruthless use has been made of it in this House.
Lord Boyd-Carpenter: My Lords, I do not know whether the noble Lord was good enough to listen when I was speaking, but I invited the attention of your Lordships to the fact that in the present Parliament alone Her Majesty's Government have suffered 40 defeats, a number of them on major issues.
Lord McIntosh of Haringey: My Lords, I did hear what the noble Lord said and I do not disagree with it in any way. I am not saying that the Government exercise on every Bill their power to achieve their intentions. I am saying that when it is thought to be necessary by the Government, that when it is a relatively straightforward political issue (let us not deny that this is an issue of political difference between the Conservative and the Labour parties; I would not attempt to deny it at all) and that when there is a deadline, a majority is available, and no attempt on this side of the House to make any reasonable changes has any effect whatsoever.
6.54 p.m.
Lord Sefton of Garston: My Lords, may I commence by welcoming Part II of the Bill, Clause 11. I am sure that my welcome of that clause will not be shared by the noble Lord, Lord Boyd-Carpenter, whose only comment about it was that he did not believe that the two bodies were worth the amount of money which was being given to them. To those who are not so blind that they do not want to see, it illustrates that because of Clause 11 it would be difficult for this side of the House to vote against the Bill. The amendment does not ask the House to reject the Bill. The House is asked to criticise the Government. It is not asked to criticise the membership of this House. I, for one, would not quarrel about the way the Whip works in this House, nor would I quarrel about the fact that Members opposite have used their vote on several occasions to defeat the Government. The important point, however, is: what were those occasions? They were occasions when the Government were vitally involved in getting a Bill through by a certain date.
I have no fundamental objection to any Government saying that it is important to get a Bill through by a certain date. That is part of government. But you
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cannot make statements in isolation and not look at the reasons. Why do the Government want to get the Bill through by a certain date? Why is there so much opposition to the Bill? Why did the Association of Metropolitan Authorities and all the local authorities concerned refuse to discuss the Bill? Why has a large body of experienced people in local government—who believe, with the Government, that in some ways there has been abuse by local government of the power to levy rates—been alienated by the Government? Why have transport executives which have no political axe to grind and experienced men in local government reached the conclusion either that it is no use or that it would not be a perfectly good function, from the point of view of democracy, to discuss the Bill with the Government? Is that the fault of local authorities? Is that the fault of this House? Of course it is not. The fault was outlined by my noble friend Lord Mishcon. The fault lies with the Government.
If it is right that the majority here say that expenditure on items such as transport should come within a global figure of expenditure as it affects the national economy, why have we reached the stage where we are not discussing it? Why have we reached the stage where we are not discussing how the Government should control that figure? Why is it that instead we are discussing how the Government should set about achieving that aim? It is because of the fault of the Government. Can one really expect responsible members of local authorities to sit down and accept a Government diktat? We have a White Paper and a Bill produced on one day. There was no previous consultation. If one lambasts local authorities as being guilty of abuse, can one then expect local authorities to sit down without protest and discuss the matter with the Government?
What should the Government have done? First, the Government should have realised that local authorities are an important part of our democracy and that they are treading dangerous ground by imposing penalties on local authorities because of the way that they manage their budgets. The grounds are that local authorities have abused their power. Merseyside were taken to court because they had been accused of abusing their power. But the courts decided that they were not guilty. Despite that, the Bill goes ahead and tries to impose these penalties on West Yorkshire, the Midlands and Merseyside. If the Government had not already alienated local government, the sensible course would have been for central Government to hold discussions with local government to find out how they could achieve their aim.
As I said at Second Reading, it was not the fault of local government that they were pushed into the wilderness and that all their expertise and experience was taken away from them. It was not the fault of local government that the boundaries were redrawn. At that time local government told central Government about the tragic mistakes they were making in reorganising local government. Nobody listened when the Government were told that if the aldermanic bench was abolished the experience which local government had built up over many years would automatically be taken away. All these problems have now arrived on the Floor of this House.

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This amendment criticises the Government. It does not criticise the Government for the Bill. It does not seek to say to the Government, "You are not going to have your way". It merely points out to the House that what the Government did was ill-advised, wrong and damaging to local democracy. It says:
"but this House deplores the insistence of Her Majesty's Government that this Bill should pass unamended through all stages irrespective of the merits of amendments proposed".
I am not going to deal with the amendment but I shall deal with its fundamental aim. Most of the amendments to the Bill sought to do one thing: to restore to local authorities some of the status and dignity that this Bill takes away. It was all being taken away on the grounds that the Government decided that they had to have this Bill through by 1st April.
We know the money involved. I made the point at Second Reading that the money involved was not sufficient to damage the economy of this nation. I quote no better person than the Chancellor of the Exchequer, who said that the country could handle the whole of the expenditure on the Falklands Islands adventure without it damaging the economy of this nation; that the reserves of the nation were sufficient to handle that. So who would deny that the amount of money we are discussing here could have been held back for another 12 months? Of course it could have been. The truth is that this is the next step in the Government's proposed attitude to local authorities. If it is popular and if it is demanded by some newspapers that local authorities should suffer more, then they will suffer more. It will start with London and then perhaps the Government will want to abolish the county councils.
Let me say this as a final word. There are some people in local authorities, in district councils, who think that a threat to county councils is just a threat to county councils and is not a threat to local government. This Bill and the last Local Government Bill are indicative of the way in which this Government is going. I said on Second Reading that this Bill is moving us still further to a bureaucratic central state that the Government supported. I believe that this amendment should be supported because the Government have acted in haste. They have acted ill-advisedly and they have alienated local government, and it is time that someone stood up for the interests of local government.
Lord Underhill: My Lords, I am advised that I have an opportunity to reply on this amendment.
Lord Lucas of Chilworth: But, my Lords—
Lord Underhill: I am sorry, my Lords—I thought that the noble Lord, Lord Lucas of Chilworth, had the last word.
7.2 p.m.
Lord Lucas of Chilworth: My Lords, I believe it would perhaps be helpful were I to respond now to various points which have been made. To change the tone of this debate just a little, may I at the outset say how grateful I am to my noble friend Lord Boyd-Carpenter, to other noble friends and to the noble
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Lords, Lord Underhill and Lord Tordoff, for making such kind remarks about me personally.
I should like to start by saying to the noble Lord, Lord McIntosh of Haringey, that as I stand here I take a very firm view over to the other corner of the House, where I often feel that the balance is held. It is quite ridiculous for the noble Lord to say that we can defeat amendments. Noble Lords on this side of the House have explained how, for more than 40 times this Session, we have been beaten. We are quite consistently beaten with help from independent Members of your Lordships' House. So there is no question here of it being on a party basis. The noble Lord may shake his head but that is a fact. When the noble Lord has been here a little longer or has studied some of the Division Lists a little more completely, perhaps he will come to agree with me.
As I said earlier in moving the Motion that this Bill do now pass, I understand the disappointment which noble Lords opposite expressed, because the Government have not accepted any amendments. I must insist that the Government did not have a closed mind. On the contrary, I hope that it is clear from the responses we have given, and in a number of letters, that we have thought hard about the proposals made and considered them on their merits. The Government would have been prepared to accept any amendment which we believed genuinely to be necessary or which would have created a genuine improvement. Indeed, time has been set aside in the other place for them to consider any amendments to this Bill which might have been accepted today. I will explain why it is that the Government have not wished to accept the amendments proposed.
A number of the amendments that we have considered I might term "wrecking amendments". One noble Lord said that a kinder phrase might be "frustrating amendments", although in many cases I do not believe that the amendments were necessarily intended to wreck. The point is that the Bill is a structure and to have altered one part would often have damaged or wrecked the whole. The noble Lord, Lord Sefton of Garston, will remember that I was in some trouble with him when I said something similar shortly after the start of the Committee stage in your Lordships' house. What I meant then, and what I mean now, is that the making of what appears to be a minor alteration to one part of this Bill could very often have damaged or wrecked the whole. I did not mean then, nor do I mean now, that the Government would not accept amendments. But I do believe that until the Government responded to some of these amendments, noble Lords had not recognised the damage which the amendments may have caused.
I will give just a few examples. First, there were amendments which sought to ease the financial duty and which would have led to incredible complexity and a slackening of that duty. We showed that there were already adequate means for executives to meet their duty even in the face of some of the most fearsome emergencies, which were conjured up before us even as late as this afternoon. Similarly, we showed that there was no need to transfer child fares from within the PEL to Section 138 of the 1968 Act; that is, outside the PEL. We showed that under the Bill, the

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setting of these fares remained firmly with the authority and with the executive.
We explained why the Government could not accept the early amendment designed to alter Clause 5, to give protection to any level of subsidy, however large, nor indeed subsequent variations designed to lead to more than one determination of grant in the year. We have shown this to be unnecessary. Other amendments sought to prevent or alter the frequency with which the Secretary of State may require an authority to carry out a review. Most authorites will institute such reviews themselves, but the Government have insisted on retaining the right to call for one if the authority does not. We have given assurances not to call frequent reviews, and shown that there is no need to alter the Bill; no more than any need has been shown to alter the similar power of the authorities under the 1968 Act.
Some other amendments have sought to extend policy, such as one to alter Section 138 of the 1968 Act yo allow authorities to give concesssionary fares to the unemployed. Although your Lordships did not agree to make this amendment, you showed in your speeches characteristic sympathy for this and other groups of disadvantaged people. I gave an undertaking then to draw the attention of my right honourable friends with responsibilities in this area to that which has been said; and I say to your Lordships this evening that that is what I have done.
Other amendments again sought to insert words which, while not paricularly damaging, would have added little or nothing to the Bill. The fact that an amendment is not harmful or damaging is not, I suggest, a good enough reason to make it. Otherwise, your Lordships' House would find itself forever making amendments of little merit; padding out a Bill.
The point I seek to reiterate here is that the amendments proposed would either have damaged substantially the integral structure of the Bill, accidentally or perhaps even deliberately, or sought to extend policy in a way the Government could not accept, or would have added little or nothing of substance. We have shown in the Bill and during the debate, that preservation of local democracy has not been damaged. On the contrary, the protection from challenge enhances the ability of an authority to exercise more effectively their role in local democracy within a protected limit. They did not have that before.
The noble Lord, Lord Sefton of Garston, said that the real truth was that this Bill was an attack on local authorities. The real truth is in the three figures I gave earlier this afternoon; the figures which my noble friend Lord Bellwin gave at Second Reading, when we began our consideration of this Bill. The truth is that expenditure in 1979–80 was in terms of a sum off £39 million; in 1982–83, nearly £400 million; and predicted for 1983–84—last summer—was a figure of £700 million. The real reason is that the interests of both the user and the taxpayer had to be protected, and this Bill goes a long way towards doing that. Indeed, as I mentioned earlier, since last summer, while there has been time for reflection, that predicted figure of £700 million has now been reduced to £500 million because the authorities are curbing their appetite for money.
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The noble Lord, Lord Mishcon, and indeed the noble Lord, Lord Underhill, have both argued very strongly, as did other noble Lords, that the Bill was an attack on local democracy. This is not so. The Bill keeps to a minimum the intervention by central Government. Direct intervention really is concerned simply with the Secretary of State obtaining information in order to allow him to set the guidance figure. That means that the seven authorities must supply plans of which at least an element is in a common form. My understanding is that most of the authorities already provide for their own internal use most of this information. It is the common form, the common methodology that is required.
When the noble Baroness, Lady Bacon, says that it is no good us suggesting that we can deal with West Yorkshire in the same way that we deal with others, how can we bring a common purpose, how can we take account of the overall need, the overall ability of the nation to provide these monies, without having a common basis upon which to work? These are necessary so that the Secretary of State can evaluate plans on that basis. But all the present relationships in the authorities and the executives continue, and after indicating the protected level of expenditure it is left entirely to the authority to choose its plan and decide its subsidy. So the Government cannot see this as an interference with local democracy, at least no greater interference than is necessary to produce this legal clarity and a stable framework for local transport to operate within the level of resources the nation can afford.
Although the Bill has not been amended, as I said earlier, there has been value in the debates. Our discussions have cleared away misconceptions. Although the Government are now content with the Bill as it stands, the debates have recorded even more sharply than were recorded at Second Reading that there are fundamental philosophical differences dividing us, and the differences are those which cannot be and will not be and would not have been removed by amending this Bill. My noble friend Lord Boyd-Carpenter referred to this aspect.
The noble Lord, Lord Tordoff, talked about rational argument. He then went on to say that underlying it were these philosophical divisions. Of course he is quite right. That is what has prompted this Motion we are debating tonight. I was sad, I might add, that the noble Baroness, Lady Bacon said in her opening remarks that she did not care whether the GLC are spendthrift. Well, my Lords, we do care.
Baroness Bacon: My Lords, may I just say this? I am not a ratepayer of the Greater London Council. It is the concern of the ratepayers of the Greater London Council what the Greater London Council does. But I am a ratepayer of West Yorkshire County Council, and our powers to determine what happens in West Yorkshire have been taken away from us because the Government think they have to bring the Greater London Council to heel. That is the point I was making.
Lord Lucas of Chilworth: My Lords, that may well have been the point the noble Baroness was attempting to make. The point she made, certainly with me, was

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that she did not care whether the GLC were spendthrift. I argue that the Government have not taken away the rights of her local authority to determine either the rate or how they spend it. All the Government have done is to set a limit above which the Government are not prepared to protect the authority.
The Government recognised these philosophical differences. Some opponents of the Bill might well have preferred the authorities and executives not to have to prepare the proposed financial plans, nor to have to explore more systematically the uses of subsidy Some might have preferred the Government not to protect from legal challenge this subsidy up to a reasonable level. Some opponents have gone so far as to say that they would prefer a cash limit system to be imposed by the Government in preference to the system under the Bill which leaves the authorities free to have the final word on their plan and proposed subsidy. We listened to all these views and recognised the gulf between them and the Government's own view. But I must repeat the Government's belief is that this Bill is necessary.
The Bill will provide an improved financial planning procedure; it will protect a reasonable level of subsidy from challenge; it will certainly strike a better balance between the interests of ratepayers and public transport users; it will also encourage the efficiency in the transport executives that we are looking for. That is what the Bill does. I have to say, in all seriousness, having heard every single amendment at every stage of this Bill, that I cannot see that had we accepted any of the amendments there would have been improvement in meeting those objectives. I invite the House to reject this Motion and to pass the Bill.
Lord Underhill: My Lords, after this debate I will be extremely brief in reply. I do not intend to follow the noble Lord, Lord Lucas in going through all the amendments to show where they could have been beneficial to the Bill and to the House. In moving this amendment I did refer to a number of points of disagreement, philosophic, if you like, but also points where this Bill could have been improved without interfering one jot with the principle that the Government wants.
I am glad that a number of noble Lords have referred to this House as being a beneficial revising Chamber. As the noble Lord, Lord Tordoff, said, it is not a rubber stamp. Reference has been made by the Minister to the 40 occasions on which the Government have been defeated. That has been this House at its very best, not as has happened on the occasion of this Transport Bill. I have had experience from this Dispatch Box of numerous occasions where the Government have intelligently taken back arguments and examined them and brought forward their own amendments. That is what we are concerned with as well as having our amendments carried.
The noble Lord, Lord Boyd-Carpenter, referred to understanding my disappointment. That is not the issue; my disappointment does not matter. It is that there has been an opportunity to improve this Bill, there has been an opportunity to clarify issues, there
1408
has been opportunity to bring into the Bill assurances which the Minister has tried to give orally but was not prepared to put into the Bill. My criticism is not of this House. My criticism is that the Government did not give a lead. The amendment says:
"deplores the insistence of her Majesty's Government".
We do not on principle vote against the Third Reading of any Bill, but this is an occasion where the Government have failed abysmally. They have been too rigid, too inflexible. They have failed to see opportunities where they could have brought forward their own amendments, not to destroy the purpose of the Bill but to clarify it and improve it. I hope the House will support the amendment.
The Lord Chancellor: My Lords, the original Question was that this Bill do now pass, since when an amendment has been moved at the end to insert the words set out on the Order Paper. The Question, therefore, is that this amendment be agreed to.
7.20 p.m.
On Question, Whether the said amendment shall be agreed to?
Their Lordships divided: Contents, 51; Not-Contents, 89.

DIVISION NO. 3

CONTENTS

Ardwick, L.

McIntosh of Haringey, L.

Aylestone, L.

Mayhew, L.

Bacon, B.

Milner of Leeds, L.

Beswick, L.

Mishcon, L.

Bishopston, L. [Teller.]

Ogmore, L.

Blease, L.

Oram, L.

Boston of Faversham, L.

Peart, L.

Brooks of Tremorfa, L.

Phillips, B.

Chitnis, L.

Pitt of Hampstead, L.

Cledwyn of Penrhos, L.

Ponsonby of Shulbrede, L. [Teller.]

Collison, L.

David, B.

Rhodes, L.

Denington, B.

Sefton of Garston, L.

Ezra, L.

Simon, V.

George-Brown, L.

Stedman, B.

Hatch of Lusby, L.

Stewart of Alvechurch, B.

Hayter, L.

Stewart of Fulham, L.

Houghton of Sowerby, L.

Strabolgi, L.

Ingleby, V.

Tanlaw, L.

Irving of Dartford, L.

Taylor of Mansfield, L.

Jeger, B.

Tordoff, L.

Jenkins of Putney, L.

Underhill, L.

John-Mackie, L.

Walston, L.

Kennet, L.

Whaddon, L.

Kilmarnock, L.

White, B.

Kirkhill, L.

Winstanley, L.

NOT-CONTENTS

Avon, E.

Cork and Orrery, E.

Belhaven and Stenton, L.

Cottesloe, L.

Blake, L.

Cox, B.

Boston, L.

Craigavon, V.

Boyd-Carpenter, L.

Daventry, V.

Brabazon of Tara, L.

Davidson, V.

Brougham and Vaux, L.

De La Warr, E.

Caithness, E.

Denham, L. [Teller.]

Campbell of Croy, L.

Drumalbyn, L.

Carnegy of Lour, B.

Eccles, V.

Cathcart, E.

Elliot of Harwood, B.

Chelwood, L.

Elton, L.

Coleraine, L.

Ferrers, E.

Colwyn, L.

Ferrier, L.

Constantine of Stanmore, L.

Fortescue, E.

1409

Fraser of Kilmorack, L.

Murton of Lindisfarne, L.

Gainford, L.

Newall, L.

Gibson-Watt, L.

Nugent of Guildford, L.

Gisborough, L.

O'Neill of the Maine, L.

Glenarthur, L.

Orkney, E.

Greenway, L.

Orr-Ewing, L.

Hailsham of Saint Marylebone, L.

Penrhyn, L.

Plummer of St. Marylebone, L.

Harmar-Nicholls, L.

Henley, L.

Rankeillour, L.

Hylton-Foster, B.

Ridley, V.

Killearn, L.

Romney, E.

Kilmany, L.

Saltoun, Ly.

Kinloss, Ly.

Sharples, B.

Lauderdale, E.

Shuttleworth, L.

Lawrence, L.

Skelmersdale, L.

Lindsey and Abingdon, E.

Stamp, L.

Long, V.

Swinton, L. [Teller.]

Loudoun, C.

Taylor of Hadfield, L.

Lucas of Chilworth, L.

Terrington, L.

Lyell, L.

Teviot, L.

Macleod of Borve, B.

Teynham, L.

Mancroft, L.

Thomas of Swynnerton, L.

Margadale, L.

Trefgarne, L.

Marley, L.

Trenchard, V.

Merrivale, L.

Vaux of Harrowden, L.

Mersey, L.

Vickers, B.

Milverton, L.

Vivian, L.

Molson, L.

Westbury, L.

Montgomery of Alamein, V.

Wise, L.

Mottistone, L.

Resolved in the negative, and amendment disagreed to accordingly: Bill passed.

Energy Bill
7.28 p.m.
The Earl of Avon: My Lords, I beg to move that this Bill be now read a second time.
Electricity has long been generated and supplied outside the public electricity supply system. This Bill is designed to accord this private generation its proper place in the country's overall electricity supply and to enable the private sector to take advantage of the economic opportunities it may have to expand this resource.
The first legislative obstacle which has stood in the way of such opportunities has been the ban, dating from 1909, on anyone who wished to supply electricity as a main business activity other than an electricity board. Clause 1 of the Bill accordingly removes this prohibition. It also removes the requirement for anyone to obtain the Secretary of State's consent before building or extending a generating station whose output is mainly for sale to others. This requirement has meant that a large private station could be built for its owner's use without such consent, while even a small station whose output was sold would need consent. This is not a logical position; nor is it one which meets the planning needs of the electricity boards, since either type of station reduces actual or potential demand upon the boards.
Therefore, in order that the boards can take proper account of private generation in planning their own systems for the future, Clause 2 provides for them to be informed of any proposal to build or extend a generating station above 10 megawatts in output. This output has been suggested by the Electricity Council as the level at which a private power station might begin
1410
to have a significant impact upon the planning or operation of an electricity board's system. In context, if this provision were already in force it would have meant that boards would have been notified of 90 per cent. of all private generating capacity.
So far I have dealt with matters which will liberalise the régime under which private generators may operate. I come now to two areas where for different reasons we have provided or maintained Government controls. First, the Government thought it appropriate to remove the existing anomaly that a large company would be able to build a nuclear powered generating station to produce electricity for its own use without having to seek ministerial consent. Clause 3 of this Bill therefore requires anyone to seek such consent before building, extending or becoming the operator of a nuclear station. The need for consent to operate is designed to deal with the case of someone acquiring a nuclear station from, say, the CEGB. Let me say that this clause makes it neither more nor less likely that anyone will wish to build a nuclear power station. This is a new control which is additional to the sophisticated system we have in this country for ensuring the safe design, construction and operation of nuclear power stations.
The second control, which we have retained in Clause 4, is that over private hydro-electric plants in Scotland. Not only does hydro-electricity occupy an important position in terms of energy policy in Scotland, but by its nature one project can have a direct impact on another by influencing the water flow. It therefore seemed right for consent to continue to be needed. However, the output above which consent is needed is raised from 50 kilowatts to 1 megawatt, so that very small schemes will no longer need consent.
Clauses 5 to 11 contain the real heart of this Bill. They establish both the arrangements which may be made between private generators and the electricity boards and the terms on which the commercial relationship between the two is to be conducted. Clause 5 sets up a system of requests and offers by which private generators are given certain rights to seek services from the electricity boards, and the electricity boards are given corresponding duties to supply those services. First, a private generator will be able to seek a supply of electricity not only for his own premises, as at present, but also in respect of other premises which he supplies. Second, a private generator will be able to ask an electricity board to purchase any electricity which he wishes to sell to the board; and, third, and perhaps most important, the private generator will be allowed to ask an electricity board to permit him to use the board's transmission and distribution system to convey electricity. In responding to these requests the electricity boards may include in their offer such reasonable terms and conditions as are necessary to ensure that the board may recover any expenditure it incurs, and to ensure that compliance with the request does not affect the control by electricity boards over the electricity supply system.
As to the supply which an electricity board may be asked to give to a private generator, the electricity board is to charge under Clause 6 precisely the same price as that which would obtain if the private generator were any other customer. Where a tariff for

1411
these supplies is not appropriate, the board must specify a price in its offer to the private generator.
The terms upon which electricity boards are to carry out their duty to purchase privately generated electricity are contained in Clause 7. Boards are to fix tariffs of prices that they will pay for such electricity, or in the absence of an applicable or appropriate tariff they must specify the price they propose. These tariffs and prices may be based upon any principle which the board wishes to invoke, provided that one of these principles is that the board's prices to other customers for electricity supplies must not be increased as a result of the purchase, and, secondly, that the tariff or price must reflect the costs that the board would have incurred had it not purchased the electricity from this particular source.
The clause goes on to recognise that in making a purchase from a private generator the board may itself incur costs arising from the administration of the purchase or from the fact that it has had to employ its own assets in taking the electricity. In the latter circumstance, the payments which the board may seek from the private generator may be sufficient to ensure that the board earns the same kind of return on any assets it employs in taking privately generated electricity as that which it would expect to receive on a similar asset which it used for its own purpose.
Clause 8 of the Bill provides for electricity boards to fix tariffs and charges for the use by private generators of their transmission and distribution systems. Where a board establishes a tariff or makes an offer in connection with the use of its system, one of the principles that it must invoke is that charges should be no more than sufficient to give the board a return on the assets it employs in meeting the request of the same order as that which the board would expect to receive on such an asset used for its own purposes. This principle is set by analogy with Clause 7.
Having established this basis for fair dealings between the private generators and the electricity boards, the Bill goes on in Clause 9 to enable any dispute between a private generator and an electricity board to be referred to the Secretary of State, or to an arbitrator appointed by him, for determination. Clause 10 requires the electricity boards to consult the Secretary of State on the principles underlying the tariffs that apply to dealings with private generators. I have dwelt on these provisions in order to explain to the House the guiding principles behind this central part of the Bill. I now come briefly to the remaining provisions of Part I.
Clause 11 enables one board to propose to another that the latter might more appropriately meet a private generator's request; and Clause 12 provides for pattern-approved meters to be used for measuring electricity supplied by private generators to their customers. Clause 13 relieves an electricity board of its duty to supply consumers who are supplied by private generators through the board's system. This measure is designed to clarify the board's statutory and commercial obligations to private generators. Clause 14 is concerned with the application of certain powers and duties of boards, electric inspectors and electricity suppliers. Its aim is to ensure that private suppliers and
1412
their customers have parity of treatment with the electricity boards and their consumers.
Clause 15 gives effect to the further provisions relating to meters which are contained in Schedule 1. The presentation of the schedule is complex because of the bulk and antiquity of the electricity legislation, but it does three relatively simple things. First, it provides for certified meters (which are used by boards to measure supply to their consumers) to be used also to measure electricity supplied by a private supplier through a board's system, and for these meters to be subject to the statutory procedure for determining disputes about accuracy; second, for meter manufacturers and repairers to be authorised to certify meters; and, third, for regulations to be made in respect of the recovery of costs incurred by my department's meter examiners in determining disputes about meter accuracy.
Clause 16 replaces the existing powers to make safety regulations with a new and up-to-date power under which the present regulations will be gradually replaced with more comprehensive ones which will apply to both public and private supplies of electricity. Clause 17 allows boards to include a standby charge in their tariffs, and Clause 18 enables local authorities to benefit from the provisions relating to fair prices for the purchase by boards of electricity, and also for arbitration in disputes over this matter.
Clause 19 gives electricity boards a new duty to promote economic schemes for combined heat and power and the use of heat from power stations generally. This clarifies their rights and obligations in this field, and puts beyond doubt that such schemes are to be considered part of the board's normal operations. Clause 20 abolishes two unnecessary and unused powers of entry available to boards.
Finally, Clauses 21 and 22 of Part I of this Bill establish the Electricity Consumers' Council on a statutory basis and give other bodies duties in relation to that council. The council has the duty of considering any matter affecting the interests of electricity consumers generally, who are supplied by electricity boards in England and Wales. These may of course include general matters, such as those related to contracting, or sales of appliances, as well as those more directly related to electricity supply.
I turn now for a few moments to Part II of the Bill. This amends the liability and compensation provisions of the Nuclear Installations Act 1965, by restoring the value of the compensation sums provided for in that Act in order to take account of inflation. Although I should be pleased to set out the effects of Part II more fully if the House wishes me to do so, let me just say at this stage that in broad terms the changes make good the effects of inflation upon the United Kingdom's original provisions for compensation in respect of nuclear incidents. They also, inter alia, allow for new compensation figures to be changed by order.
The safety record of our nuclear power industry is second to none. Nevertheless, it is prudent to have a proper system of liability and compensation to ensure that nuclear injury or damage is properly compensated, and to keep that system up to date. I hope that noble Lords will agree that this is a sensible objective.

1413
The Bill was carefully scrutinised in the other place. A number of amendments were made. I believe that it reaches us in a workmanlike state. I shall look forward to debating further issues on it in Committee. On that note I commend the Bill to the House. I beg to move.
Moved, That the Bill be now read a second time.—(The Earl of Avon.)
7.41 p.m.
Lord Strabolgi: My Lords, we are grateful to the noble Earl, Lord Avon, for explaining the provision of the Bill so clearly, and we on these Benches should like to thank him for that. Since I shall not be speaking again in the debate, I should like to say how much we are looking forward to the maiden speech of the noble Lord, Lord Taylor of Hadfield.
Having said that, and turning to the Bill, I feel bound to ask why the first 18 clauses of it have been included at all. Who really wants this privatisation? No one, so far as I can see, except the Government; and then of course the Government want privatisation only on ideological grounds, and because they have an obsession about it.
The Bill follows other measures of the same nature, such as those dealing with the Britoil sale, which was so disappointing from the Government's point of view, the totally unnecessary Amersham sale, and the breaking up of the gas industry. These are all the actions of a Government who see everything in crude, simple terms, and in black and white. Everything publicly owned and operated is no good, in the eyes of the Government. Everything privately owned automatically finds favour in their eyes.
Fortunately, this Bill has been much improved during its passage in another place (as the noble Earl has said), where several important safeguards were introduced. The public sector is now at less of a disadvantage, compared with the private sector, as was the case in the original draft. I understand that consultations are taking place between the Government and the industry over the matters to be covered by the regulations relating to supply and safety which are to be issued under Clause 16. This is much more reassuring.
Clause 10(6), which was introduced in another place, now ensures that no undue preference will be shown to consumers in the private sector at the expense of public consumers. I am glad also that Clause 19, too, was introduced in another place, dealing with the important matter of combined heat and power. What is extraordinary—I am really surprised that I have to say this—is that such a clause was not in the Bill originally. Indeed, a short Bill dealing with combined heat and power was probably all that was needed for much of Part I. Much of the rest of this part of the Bill seems to be irrelevant, if not potentially harmful to our public sector electricity industry. Let us hope that no lasting harm will be done before wiser counsels prevail.
We are particularly concerned over Clauses 2 and 3. As the noble Earl said, Clause 2 requires a person to notify the relevant board of his intention to construct a generating station. But such a person—the private generator—will not have to obtain the permission of the Secretary of State for Energy for the construction
1414
of a new generating station unless he proposes to construct a nuclear-powered station. All that the private generator will need will be planning consent under the Town and Country Planning Act 1971.
There is no provision for an inquiry procedure to consider any private sector proposals, as there is for vetting applications by the electricity boards to build publicly-owned power stations. An electricity board, in future, could be required to undergo a lengthy and expensive public inquiry into an application to build, say, a 100 megawatt power station, while a private generator could construct a power station of similar capacity without such an inquiry. The balance seems to be loaded against the public sector with a vengeance!
Clause 3 will allow private persons to build and operate nuclear power stations, with, of course, the consent of the Secretary of State. There is so much public concern about nuclear safety and other factors in this difficult and controversial field that to allow private operators to dabble in it does not seem to me to be desirable. Here again the Government's obsession seems to have got the better of their common sense.
I much regret that the Government did not take the opportunity afforded by the Bill to put forward some constructive proposals for the whole reorganisation of the electricity supply industry, following the review in the last Parliament by the Plowden Committee. As your Lordships are aware, the present structure comprises 12 area boards, the Central Electricity Generating Board, and the Electricity Council. All these are autonomous bodies, yet all seem to have the same overall aims and objectives. Many decisions, I understand, are taken within the CEGB, and often without adequate debate within the supply industry as a whole.
There is, I submit, an urgent need to review the whole organisation and to have about six all-purpose authorities, under a single unified authority at the centre. There is the need for a central authority to deal with fundamental questions, such as the procurement of primary fuels, the siting of power stations, the choice, type, and design of generating stations, future research, central finance, and long-term strategic planning. In our view it would have been better if the Government had tackled these fundamental questions, which will surely have to be tackled one day, instead of making the future control of the industry and its unification more difficult by the disruptive proposals contained in much of this Bill.
7.48 p.m.
Lord Tanlaw: My Lords, from these Benches we wish first to take the opportunity to congratulate the noble Earl the Minister on piloting his first Energy Bill through your Lordships' House. We are looking forward to the maiden speech of the noble Lord, Lord Taylor of Hadfield. In this connection I would suggest to the noble Earl that it is rather late in the day to have a Second Reading debate which includes a maiden speaker, bearing in mind that another maiden speaker, the noble Baroness, Lady Cox, is to take part in the debate on the Unstarred Question which is to follow later this evening. It is rather unfair for maiden

1415
speakers to have to wait until so far into the evening to make their speeches.
We want to give a general welcome to the Bill. Of the first 18 clauses, we on these Benches should like to dispose of only Clause 3, which deals with nuclear energy generating stations in the private sector. I should like to ask the noble Earl the Minister whether, before the Bill was drawn up, any discussions were held in order to look at the various roles of the Department of Energy and the other statutory bodies involved in the whole energy industry. In this country there are 17 statutory bodies involved with energy. They comprise the Central Electricity Generating Board, the Electricity Council and the regional generating boards. There has here been a golden opportunity to take up the Plowden Committee's recommendations, and possibly even to extend them. My main disappointment over the Bill is that this has been an opportunity missed.
I am not sure whether the moment has not now come for another look to be taken at the role of the Department of Energy. It was formed, as the noble Earl will recall, in rather a rush after the first energy crisis as an offshoot of the Department of Trade and Industry. I wonder whether its role should not now be examined carefully to see whether the taxpayer is getting the best value for money from the department as presently constituted. I recall a debate on the rational use of energy in your Lordships' House—an excellent debate of an amazingly high standard—which showed up the activities of the Department of Energy and other departments towards conservation. I feel that more could be done by the Government through the Bill about conservation. It is a great disappointment to find that there seems to be a lack of enthusiasm, emanating from the Secretary of State downwards in the Department of Energy, on the whole nature of conservation. One would like to see more public enthusiasm. I believe that the noble Earl, with his responsibilites, will no doubt be able to inject some of that much needed enthusiasm in the months to come.
I wish to touch briefly on the role of the Electricity Council. This is a body which no one seems to do much about. Some of its work is grossly underestimated, as is its value to consumers, to industry and to all in Parliament who take part in energy debates. I should like to know from the Minister whether consideration has been given to granting more powers to the Electricity Council and possibly fewer powers to the Central Electricity Generating Board. When one looks at the role of the CEGB over past years, one can easily appreciate, with admiration, its ability to generate paper. It has also generated a certain heavy-handedness in its dealings with its regional boards, which is becoming uproductive.
This Bill could have provided a start for an open, non-political discussion on how the energy industry is run from the Department of Energy through the Electricity Council and the CEGB, to see whether the taxpayer and the consumer are getting their money's worth from these excellent bodies containing excellent men. I believe, however, that their direction may be slightly awry. On the Second Reading of the Bill now
1416
being discussed, I feel I can say this; it is one of the few opportunities that arise. I hope it will be taken up in some other areas at a later date.
The Electricity Council should be given more powers and more assistance to help in the new technologies available in the electricity industry. More help could also be given to alternative energy systems, and how best they can be installed within the regional boards. The Minister may be able to express a view on whether the bill of £22 million for advertising electricity is to continue. Consumers have a right to know whether this amount will be spent annually, often to tell consumers to use electricity when they have little option to use anything else A similar amount—it is about £23 million—is spent on advertising gas. There is a need for the nationalised industries to examine this expenditure. This Bill may be a means of bringing reasonable common sense into the industry.
I wish to deal now with the parts of the Bill that I welcome. I refer to alternative energy generation. As chairman of PARLIGAES, a group involved in alternative energy strategies, we are pleased to see that those who operate generators of wind or water will be able to benefit to a certain degree under the Bill. There is another aspect on which I should like to hear the Minister's comment. It was depressing to see that the CEGB ordered a foreign made windmill when it got round to examining wind generation of electricity. I hope that under the Bill greater enthusiasm will be given to small businessmen and small companies that are manufacturing, under great difficulty, some alternative energy systems of electricity generation. It is not only this country that I have in mind. In fact, there is little application for them in this country. A far greater application for them exists overseas. I should like to see the Ministry of Overseas Development make more effort than to date in exporting alternative energy systems working on the passive system of energy generation.
There is another point on which I should be grateful for guidance from the Minister. Will these private generating companies, particularly hydro power companies, be able to go back into the market and raise funds through debentures and the issuing of shares, as used to be the case? I believe that the first hydro electric scheme in this country operated in Galloway. I stand to be corrected but I think that there was a debenture that was popular with the public. Nothing is stated precisely in the Bill about the ability to raise funds from the public. I hope that the Minister will be able to help when he replies.
Clause 12 covers metering. Out of 19 million domestic consumers, I understand that 1·5 million have pre-payment meters. This leaves 17·5 million consumers, 2 million of whom I am told by the Electricity Council have outside meters. I am also told that 90 per cent. of new customers will have outside meters. Is the Minister satisfied that the Bill gives adequate guidance to local authorities and architects to site electricity meters so that they may be read either remotely electronically or electrically and sited on the outside of the house so that the householder will not have to be bothered about arranging an appointment with the meter reader? This action should be taken in conjunction with the gas authorities and water boards.

1417
One does not want to see this kind of rule going into the statute book. It has, however, created an untold amount of unnecessary aggravation for householders. This is obviously the right Bill for a metering amendment to be included. I wish to know whether it is necessary. Any guidance from the Minister would be helpful.
I wish, finally, to touch upon combined heat and power. Why was it necessary for people outside the Government, Back-Benchers in the Conservative Party, through great persistence, to produce a new clause to cover combined heat and power? This was recommended in the Plowden Report in 1976. Who stopped it? It was the CEGB, which was never enthusiastic about it. Nor were the gas authorities, which did their best to stop it. What is the purpose of these boards? They are meant to help consumers to be warm and comfortable by providing them with cheap electricity. Why not cheap heat? They can produce what arguments they like against it. The fact is that it took the persistence of Back-Benchers, with support from other bodies outside Parliament, to get Clause 16 through. The Government were not interested. The Government had to be forced to accept it. This is disappointing, nor is it a hopeful sign for the future.
The local boards can still stop combined heat and power coming about in their areas. They can prove that it is uneconomic in one way or another. I should like the Minister tonight to state categorically that, in places like Merseyside, Clydeside and anywhere else where CHP would be of real benefit to the community the social side will be considered as well. Why is it all right to dig up the streets for the installation of cable television when there is already plenty of television, but not all right to dig up the streets to put down pipes for combined heat and power? The argument which has been put forward by the CEGB is that it would disrupt the communities too much. We can dig up the streets to put down cables for cable television, but apparently we cannot dig them up to improve low cost housing and to keep people in the low income groups at least warm during the winter at very reasonable cost. I shall pursue this matter from these Benches if the Government are not going to press the CEGB in turn to press the regional boards to make combined heat and power a reality.
At this late hour I have spoken for long enough on the main points that we shall wish to emphasise during the Committee stage. On the whole, we welcome the Bill. There are some signs of hope that the Government are prepared to listen in regard to energy generation to people other than the CEGB. They obviously have done so to get the Bill this far. I hope that they will continue to keep on listening and activate some of the points that have been raised from these Benches.
8.1 p.m.
Lord Taylor of Hadfield: My Lords, in my maiden speech I wish to support the Energy Bill, but first I should like to thank all the noble Lords in this House who have been so friendly and so helpful and have given me wise advice. It is a great honour for me to be a Member of the House of Lords, and an honour which I never dreamed would come to me. I hope that your Lordships will forgive me, but after 62 years as a
1418
builder I really am more fitted for the scaffold than to be speaking in this noble House. However, my company, which I serve, does spend thought, time and energy in promoting and achieving good human relations. We believe that that is very important.
On Sunday I had the pleasure of reading an article by the Leader of our House, the noble Baroness, Lady Young, who was writing of the things that she wished she had known when she was 18 years of age. It was a most interesting, stimulating and instructive article. In my life I have made many mistakes. In 1921 when I was 16 years of age the bank very kindly loaned £400 to build my first two houses, which was the start of the Taylor Woodrow Company. Like the noble Baroness, Lady Young, had I known then that this evening I would be trying to make my maiden speech in your Lordships' noble House, I would have asked the bank to lend me not just the £400 to build the two houses, but another £7 because in that day and age for £7 I could have had a complete course in public speaking!
In my short experience of membership of your Lordships' House many kind noble Lords have given me good advice. One noble friend in particular who is in the House but who shall be nameless said. "You do not need to hurry with your maiden speech. I inherited my title when I was 22 years of age but I did not make my maiden speech until I was 54". On that basis I would he 110 by the time I made my maiden speech and while the noble Lord, Lord Shinwell, I am sure will be able to make his speech at 110, I doubt whether I could do so. However, the Energy Bill was scheduled for tonight and it deals with matters of which I have had comprehensive experience in my business life and so I am sure that my noble friend will not mind me taking this opportunity.
The Energy Bill is a very interesting one which, may I repeat, I wish fully to support. Of course, in some ways it may be controversial and I have been advised that I must keep my speech short and non-controversial. However, I must confess that my company had the honour of building the first commercial atomic power station in the world at Calder Hall. That was completed in 1956 and opened by the Queen in October of that year. It was designed to produce 184 megawatts; today, 26 years later, it is still giving wonderful service and producing 200 megawatts.
My company has built 26 electric power stations of which 14 are coal burning; three are gas turbine; one is oil burning; and eight are nuclear, of which three are in the later stages of construction. May I quote from a reliable source the cost to produce electricity, which I hope will be of interest to your Lordships. For coal fired, the cost is 2·05 pence per kilowatt hour; for oil-fired, it is 3·22 pence per kilowatt hour; and for gas turbine there is no figure. As regards nuclear, for the first Magnox type the cost is 2·57 pence per kilowatt hour, and for the later type, the AGR (the advanced gas reactor), the cost is 1·57 pence per cubic hour.
In Part I of the Energy Bill, Clause 19 imposes duties on electricity boards to adopt and support schemes for the combined production of heat and electricity and for the use of heat from electricity generation. This is a splendid idea. For far too long the heat generated from the cooling systems in our electric power stations has been barely used. With the excellent technical

1419
advances achieved by the Central Electricity Generating Board and industry, in the future may we hope that it can be utilised for the heating of homes, factories, glasshouses for the production of food, and in other useful ways.
Your Lordships will be pleased to know that very exciting schemes for the use of waste heat have already started. There is one in North Yorkshire where the Central Electricity Generating Board and the Express Dairy Company have joined and formed the Exel Produce Company. This company has built a 20-acre horticultural project at Camblesforth near Selby in North Yorkshire. This represents the successful marriage of modern technology and advanced horticulture. The glasshouses are heated from the Central Electricity Generating Board's Drax power station in North Yorkshire using the reject heat from the power station's cooling water. On this project in 1982 the average production of tomatoes was 110 tonnes per acre, which I am sure your Lordships will agree is very good indeed. The CEGB is also working on an exciting scheme for fish farming which I believe will have very good effect.
Part II of the Energy Bill deals chiefly with the nuclear installations and wisely reviews the provisions for compensation in respect of a nuclear incident by the operator and public funds together, including contributions from other countries party to the Brussels Convention. I feel sure that noble Lords will agree that this is a wise and prudent measure and deserves the support of noble Lords of this House, although one sincerely hopes that it will never be required. So far the record in the United Kingdom has been remarkable.
Since 1956 in this country we have had the benefit of more than 300 reactor-years of operating experience without one emergency at a nuclear power station. My noble friend Lord Avon said that that is a record second to none. It is the result of good design engineering and construction teams, maintenance of standards by the Nuclear Installations Inspectorate and, in particular, the policies and practices of the CEGB in designing, building and running these power stations.
That brings me to the last point that I wish to make. The various schedules to the Bill indicate the antiquity of much of the legislation governing this industry. For example, meters are important instruments in electricity supply and concern most people in our country. Is it appropriate in the 1980s that our new laws in Schedule I should have to rely on amending the Electric Lighting (Clauses) Act 1899? Although no doubt it is a worthy piece of legislation, it surely demonstrates the need for a modern consolidating Act for this important industry.
In closing, may I say that I have great affection and great concern for our country. I believe that this noble House is vital to the good will and the good government of our country, and I shall give it my full support at all times. Thank you.
8.14 p.m.
The Earl of Lauderdale: My Lords, one of the happy chances which the law of averages brings one's way from time to time is the opportunity to follow a
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maiden speaker and to say a few words. To follow the noble Lord, Lord Taylor of Hadfield, who is an adornment of the House and of the nation in his own right, is a particular pleasure and privilege. We have listened to a maiden speech that was witty and crisp; it was modest, brief and factual, and yet in the compass of a few minutes he showed a width of scope from Calder Hall and nuclear power to horticulture and fish farming—a magnificent compression of information and insight. The becoming modesty of the noble Lord's demeanour, both personally in the House and in his speech tonight, will have commended itself to everybody. He referred to good human relations in his industry—a self-built, self-help undertaking—but when he referred to the possible need for courses in public speaking, I am sure the House will agree that he has no need of such. We shall all listen to his interventions with great interest in future and hope that they will be frequent.
One thing that is quite clear to me is that there is nothing in the nature of things to show that a monolithic monopoly supplier is necessarily better—and I say "necessarily" better—than a variety of private suppliers. There is much valuable reading to be had in the evidence of the Select Committee on CHP in the other place. I noticed the words of the chairman of the Midlands Electricity Board, Mr. Shepherd, who said in his evidence:
"If you get huge monolithic corporations, and basically the electricity supply industry is such an organization, it does not exactly lead to innovation unless it has competition at least in comparison of performance if not in fact of actual supplies".
That was said on 24th November 1981. Frankly, I was rather disappointed with the noble Lord, Lord Strabolgi, who outside the House I count as a personal friend but inside the House we do tangle occasionally. He was pretty ideological in his approach to this Bill. The fact is that many industries generate their own power and could sell more cheaply to the grid if they were encouraged to do so. Despite the antiquated provisions of the Electric Lighting Act 1909, private enterprise generation already accounts for 6 per cent. of the country's total supply and some 15 per cent. of industry's use. This in itself is important because energy costs to industry are a long-term concern of general energy policy, and it is because of that that I particularly welcome this Bill.
When private enterprise can produce electricity more cheaply, this is to the general advantage, whether it is for that enterprise's own use or mainly so, or whether it is meant as a contribution to the grid supply. When private enterprise investment can increase the supply, this can only lessen the need for public sector investment at the taxpayer's expense. There have been cases where it has been evident that private enterprise could have supplied energy to CHP schemes had the area boards been co-operative. At this hour of the night I shall not take up your Lordships' time with examples of this, but they are to be found in the Select Committee's report, which I am sure the noble Lord, Lord Strabolgi, has already read but chosen to leave mentally on one side. However, since CHP is itself a Labour aim in Labour's 1982 programme, one would have thought that the noble Lord would have given this Bill a warmer welcome than he did. Of course, they see electricity more as a

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vehicle for social engineering in the countryside than as a critical input to industry.
There might well be some heat, if not power, generated by the attitude of this Bill to nuclear generation. But, of course, as my noble friend Lord Avon said in moving the Second Reading, it is legally possible even now for private enterprise to set up a nuclear power station. However, the Bill adds the special extra provision of great importance, that it can only be done with the consent of the Secretary of State. Moreover, the operator would still require a nuclear site licence from the Health and Safety Executive under Section 1 of the Nuclear Installations Act 1965.
What it is important to get into the record, because no doubt somebody will challenge this later on, is the fact that private enterprise generation of nuclear power is already established without disaster in Germany. It is established in Japan. It is established in Spain. So those who are frightened of what the noble Lord, Lord Strabolgi, called private enterprise dabbling in nuclear power need not really hunt for bogeys under the bed. Anything done in this field would still be under the watchful eye of the National Nuclear Inspectorate, and the onus lies always on the operator to satisfy the NNI. The NNI will not give a guarantee that nothing will go wrong. It is up to the operator to satisfy the NNI that it is going to be safe.
This Bill has had a signal blessing from the Electricity Council acting for the supply industry. To quote a letter which I received a day or two ago, they say:
"Arguments put forward have been carefully considered by the Government".
No fewer than seven safeguards that they sought were all given in the proceedings in another place. The Electricity Council are not seeking further safeguards or protection. That speaks for itself. This is not the hour for political controversy, but like others who have spoken I wish my noble friend good fortune in the further stages of the Bill.
8.21 p.m.
Lord Ezra: My Lords, I should like to join in the tribute paid by the noble Earl, Lord Lauderdale, to the noble Lord, Lord Taylor of Hadfield. I have had the privilege of knowing him for a good many years, and in my previous activities dealt a great deal with his company which he founded, as he explained to us and led with such distinction and still leads to the great benefit of all who have dealt with it. It is a particular personal delight to me to feel that we shall be colleagues in the House, even though we are looking at each other across the Chamber.
I should like to raise two points associated with this Bill. The first concerns the organisation of the electricity supply industry, and the second concerns the question of combined heat and power and other ways of more efficiently generating electricity. As to the first question, the organisation of the electricity supply industry, this has been a matter which has been of great concern for many years. I regret that this Bill, which deals with a number of aspects of the electricity generation in this country, does not deal more deeply with this whole question of the organisation of the industry itself. This was a point that the noble Lord,
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Lord Strabolgi, made as also did the noble Lord, Lord Tanlaw.
Unfortunately, it is a bit of a muddle. The very important report prepared by Lord Plowden's committee went into this whole question with great thoroughness, and many organisations testified as to what might be done. It is a pity that that report, produced some five or more years ago, has not so far found any place in legislation. I should like to ask the noble Earl, Lord Avon, what the Government's attitude is to that report and to any further steps that might be taken to reorganise the electricity supply industry, quite apart from the measures introduced in this Bill.
On the question of combined heat and power, it is satisfactory to know that a short clause has now been introduced into the Bill. I do not believe it goes nearly far enough. The fact is that Britain falls behind many other countries in the development of combined heat and power, district heating schemes, and other ways of making much better and more efficient use of electricity generation combined with the production of other forms of energy. It is not enough, after two important reports have been prepared over the years on this subject—Sir Walter Marshall's report and then Sir William Atkins' report—simply to say that a duty is now put on the area electricity boards to promote the development of this form of energy.
Much more is required if we are going to get anywhere near the efficiency with which other countries—for example, Denmark, Germany, or France—have developed in this field. The technology, I regret to say, is all being developed abroad. There are few instances of large-scale combined heat and power plants in this country, and very few instances of large-scale district heating schemes, which go together. I hope, therefore, that we might get some guidance from the noble Earl, Lord Avon, when he replies later to the debate on what further steps and measures the Government may be contemplating to promote this much more efficient use of energy.
8.25 p.m.
Viscount Ridley: My Lords, I should like to add my congratulations to the noble Lord, Lord Taylor, on his magnificent speech, and also say how delighted I was to listen to the noble Lord, Lord Ezra. In view of the Statement that we had earlier this afternoon, I hope your Lordships will all agree that in securing the services here of a former chairman of the Coal Board we are very lucky not to have had to pay £1½ million to Lazard Frères or anybody else, although the noble Lord is worth all of that, even if he is, for the moment, sitting on the wrong side of the House. It has been most interesting to hear him.
My own purpose in speaking tonight is simple, and I hope to be as brief as this debate has been so far. Indeed, we are setting an example after proceedings on the Transport Bill. I welcome Part I, which allows the private producers to add electricity to the grid and to use the board's transmission systems, But on Clause 18, it was added in another place at Report stage that local authorities would be allowed to sell electricity produced from waste disposal plants to the electricity boards. This concession is indeed a good one, but it was added only at a late stage. Unfortunately the Bill

1423
does not, as we see it, allow that such local authority generated electricity has the right to use the transmission systems, even where this electricity is to be used in premises owned and occupied by the local authority itself. I do not know why this should be so, and why there should be a distinction between private generation and local authority generation. I hope we can come to that later.
I believe that the generation of electricity from waste disposal systems is still very much in its infancy, although the GLC have, I understand, started to do this. It may well come in due course to be an economical and standard practice. Surely this is something which must be greatly encouraged as a conservation and energy-saving measure. I hope that the Government will do all that they can on grounds of equity to ensure that there is no distinction between private and local authority sources of energy in this respect, and also add a spur to the development of such practices and encouragement to use waste economically, We should take the opportunity in this Bill to put that right. I readily admit that this is purely a Committee stage point, but it is of such importance that it should briefly be raised tonight as a curtain raiser to what may come in the Committee stage. I do not, of course, expect an answer from the Government at this stage.
8.28 p.m.
Lord Kennet: My Lords, most speakers in this debate, and indeed in the House of Commons, have not, it seems to me, made enough of the fact that we are seeking to permit the privatisation of an industry which has been nationalised since 1909. That is longer than most of our nationalised industries by a long way. There was a pretty confused situation before 1909. The simplicity which was imposed then under the banner of public enterprise has not served the country badly. This is not to say that the Bill is wrong, or that I urge that it should be thrown out, but simply that we should look at all the things it does and ask whether it is really necessary to have a change, since unnecessary change merely unsettles an industry. Clearly I expect that in certain respects it is necessary, but there are one or two others where one may raise doubts.
It seems to me—and this is only a layman's impression from reading the Bill; it could look different on the ground in the industry, and the Government will, no doubt, tell us if that is so—that the burden of rights and duties to be imposed respectively upon the new private generators and upon the existing electricity boards is quite uneven. If we look through the Bill we find that it specifically lays two duties on the private generators, and it specifically lays eight new duties on the electricity boards. Most of those duties are concerned with helping out the private generators when they get into difficulties—or so it can appear.
Under the Bill, the private generator is under no obligation to his customers—and we shall want to see in Committee whether that provision is on all-fours with the provision which still governs the electricity boards—and the private generator has a right to a stand-by supply from the electricity board, with a corresponding duty on the electricity board to provide that supply—presumably, for when the private
1424
generator's gear breaks down. I must say that it seems that the whole picture is one of public industry being forced to carry the risk of a lot of amateurs riding on its back, which is no doubt very nice; but it will impose a lot of worry on the electricity boards, and we want to see that they are not shouldering burdens which they will have to pass on to their customers—because that would be the most inequitable thing imaginable.
There are one or two other minor points before coming to my main worry. The Secretary of State is assigned the role of arbitrator between the public and the private sectors in the new mixed electricity economy—a role which he will, no doubt, be called upon to play fairly often; the Bill in itself is so complicated. I doubt whether he is the right arbitrator for the following reason. Will he not, according to whether he is a Minister of the Left or the Right, give judgments of differing impact and differing value, so that the industry will be rocked from side to side, as other industries have for so long been, and, in default of the absolute certainty that there will be an Alliance Government for ever more, might it not be wise to revert to the ordinary commercial practice of commercial arbitration? These are points which we can probe further at Committee stage.
To turn for a moment to Part II, which deals with the new nuclear accident liability—"upping" the total which is a good thing in itself, so far as it goes—I see that throughout Part II there is a class of persons known as prescribed licensees. It appears that the new provisions will apply to everybody, except those people to whom the Secretary of State says that they need not apply. I do not particularly ask the noble Earl to answer this point now on Second Reading, but in debate we must probe it. Who are the prescribed licensees who will not have to be subjected to the same discipline as other private licensees, how will the Secretary of State decide who they are and why should there be an exempt class of persons at all?
I turn now to the main objection to this Bill. I would just remind the House that the Alliance parties in the House of Commons voted against the Bill on Third Reading, for the simple reason that it permitted private nuclear generation at all. I think the question of whether or not private nuclear generation should be licensed by the Secretary of State is a minor one. Obviously, the Bill is slightly improved by the Government's amendment agreeing that the Secretary of State should license this class of operations. I do not want to make too much of it. To people like us in our parties, and to the Labour Party, too, it goes without saying that you just do not risk it.
What is the point of risking it? There are plenty of other fuels for the private sector to generate with. Why breach the great principle that the transport and management of the nuclear fuel cycle has been under strict public control, and almost entirely in public hands, since the beginning? I am against it. To be persuaded to be for it. I should like an early answer to a lot of questions—once again, at Committee stage. Amendments will be forthcoming which will produce those answers.
First, what about the foreign ownership of private nuclear plants in this country? There is nothing against it in the Bill. Are we happy with that? What about United States' experience of profit-orientated nuclear

1425
power generation? To the naked eye, it looks deplorable. It seems that these private nuclear generating plants are closed down repeatedly and for long periods by the federal agency because they are simply not performing well. I should like the Committee of the House to see, when it comes to that stage, proper comparative figures of the performance, in number of hours on-stream and so on, of privately owned nuclear power stations in the countries where they exist, compared with publicly owned nuclear power stations. I think that the House should be reluctant to see this private nuclear industry grow up, without having those figures before it.
I should also like to know in which countries there is a privately owned nuclear generating industry. I know that there is one in the United States. Let us have some figures about other countries as well. I should like to know, too, what arrangements can be made to ensure that the International Atomic Agency in Vienna, and its safeguard system, applies with equal rigour to the private nuclear generating stations as to the public ones. Lastly, what will be the duties of the internal constabulary, which at present safeguards our nuclear power stations from terrorist attack? What will be their rights and duties in respect of private nuclear generating stations? Unless and until all those facts can be presented to the House in a specific manner, I, for one, shall be against permitting this experiment—because experiment it will be in British terms—at all.
8.37 p.m.
The Earl of Avon: My Lords, we have had a wide-ranging debate and I should like to thank all noble Lords for their contributions. In particular, I should like to thank my noble friend Lord Taylor of Hadfield for his excellent maiden speech. It is an incredible achievement to have put his name to such a well-known national and international firm in such a short period as 62 years. I also appreciate very much his wise remarks about the electricity supply industry and, judging by other noble Lords' contributions today, they will all welcome his points about CHP, in particular. We look forward to hearing his contributions a lot in the future.
I should first like to respond to the point made by a number of noble Lords, and started by the noble Lord, Lord Strabolgi, on the reorganisation. This Bill makes no attempt to deal with reorganisation or privatisation of the public issues. I have, of course, been made well aware of reports such as the Plowden Report, and I shall also read what the noble Lord, Lord Strabolgi, had to say to see exactly what he himself put forward. I was not quite sure whether or not these were going to be power boards, but I shall read Hansard tomorrow to find out.
This Bill aims to stimulate competition. Of course, we keep the structure of the public industry always under review, and in this context I should just pay tribute to the present chairman, Sir Austin Bunch, who will be leaving his job in three days' time. The noble Lord, Lord Strabolgi, asked: who wants the Bill? We undertook a consultation exercise to find out the demand, and we are satisfied that there is such demand. The Bill will be beneficial to all companies which generate electricity, because of the fair terms
1426
provisions. There have been many criticisms in the past about the terms offered by the boards for privately generated electricity. These new provisions will give greater confidence to private generators and, as my noble friend Lord Lauderdale said, will encourage the development of alternative sources of energy.
The noble Lord, Lord Strabolgi, asked: why not ministerial consent for private generation? The prohibition on generating electricity as a main business is, we believe, out of date. Private electricity already makes a valuable contribution to supply—about 6 per cent. overall and about 15 per cent. of industry's needs—and we want to remove the barriers so that we can realise further potential in this field. The prohibition, in itself, has probably not been a major check on the scale of private generations, but it is an obstacle to competition with electricity boards, and private generators will now be able to set up a new business, or to expand existing operation into a main business. Under Clause 2, electricity boards will be able to take full account of the private sector's plans for replacing existing load, or meeting new load with private plant. This will avoid duplication of investment. Plant of 10 megawatts and above can have significant effects upon public supply. There is nothing bureaucratic about this measure. Notification will help to ensure the co-operation of the electricity boards, assist the development of private generation and prevent later problems. This Bill is not loaded against the public sector but there is a delicate balance. A number of noble Lords raised the point of nuclear power stations. May I say once again that ownership here does not govern the safety of a plant. This Bill does not remove any existing restrictions on nuclear stations. The most important requirement remains; and that is to obtain a nuclear site licence.
May I once again stress that the Bill imposes additional controls. Whether the output of a power station is for the operator's own use or for sale to others, he would now have to obtain ministerial consent. If anybody wished to purchase and use a nuclear power station, he would need consent to his becoming the operator. The noble Lord, Lord Strabolgi, mentioned the planning inquiry procedure. Most inquiries relating to public generating stations are held under Section 34 of the Electricity Act 1957, which requires the Secretary of State to hold an inquiry of a local planning authority if it objects to a generating station proposal. If a local planning authority objected to a private station, a similar inquiry would be held under the Town and Country Planning Act.
The noble Lord, Lord Tanlaw, asked whether power companies will be able to raise capital. Yes! The whole aim of the Bill is to open up electricity supply to the market forces. Most noble Lords, if not every noble Lord, mentioned CHP. The Government have made a positive commitment to investigate thoroughly the economic potential of CHP and district heating and that is why they were very happy to help in the drafting of Clause 19. The purpose of this clause is to make this clear to everyone. We are undertaking a programme of work to test the economic and practical feasibility of CHP schemes in nine individual locations. The noble Lord, Lord Ezra, referred to this. The main report, known as the Atkins Report, on this matter has been

1427
issued to those interested. We are now awaiting comments on this report and it will be considered fully before a further statement is made. If I may elucidate a little, we hope that that may be towards the end of May. It is a very voluminous report and a very complicated one, as well.
The noble Lord, Lord Tanlaw, asked about legislation necessary for outside meters. No changes are needed to the legislation to enable outside meters to be installed. He followed through a theme which I am beginning to know from him about meters generally and I believe he knows equally that I support him in his view. We will continue to press on with this. He also brought out the question of a foreign windmill. I am led to understand that Taylor Woodrow are being supported by my department and the Department of Trade in developing the wind generator for the Orkneys. We are keen to see British technology used wherever possible. Nearly all the demonstration projects in the energy conservation field are using British technology.
My noble friend Lord Ridley spoke also of waste. There are experiments now going on with the biofuels both by London Brick and also by Ford of Dagenham. This is an art which my department are keeping a careful look at. Why not do more for conservation? This was a plea made by the noble Lord, Lord Tanlaw. The Government do a lot for this but, since we had a debate on this only some three or four days ago, I think I could leave that now.
My noble friend Lord Ridley asked why we should not allow local authorities to use the boards' transmission and distribution systems. I believe that this is a wider issue concerned with the powers of local authorities. The main purpose of the Bill is to encourage the production of electricity in the private sector. We have agreed that it is right for local authorities to be treated on the same basis as private generators as regards the purchase of their electricity; but we do not see a strong case for extending the powers of local authorities to generate and use electricity. This, we think, will be a decision for the Secretary of State for the Environment and for Scotland.
The noble Lord, Lord Kennet said that I need not take up any of his points as they are mainly Committee points. He mentioned prescribed sites and, if I could reply to him on that, there have been complaints over the years from the operators of small installations such as university research reactors about the burden of the existing £5 million operator limit. They have said that their installations could not cause damage on such a scale and that it is unfair to impose on them the burden of insuring for so large a sum. The Nuclear Installations Inspectorate have advised that there are small installations which, under the worst conditions, would not be capable of causing as much as £5 million damage at current money values. We think therefore that it would be unfair to require such operators to insure for £20 million. Clause 27 of the Bill therefore exercises a new option given by the protocols and retains the present limit of £5 million per installation in respect of the licencees of such sites as may be prescribed. The noble Lord, Lord Tanlaw, also mentioned advertising. There was reference at
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Question Time in another place today to energy matters and I believe my colleague there, the right honourable the Minister of State, spoke on this subject. I should like to check in Hansard what he said before repeating it to the noble Lord.
Turning finally to the principles of the Bill, our aim has been to remove the legislative and institutional barriers to economic private investment in power generation. We expect this to be of particular benefit to those with schemes for the combined production of heat and power and for renewable forms of power generation. We have sought to achieve this aim consistent with the principles of fairness and safety—fairness in the arrangements between boards and private generators, so that there is no financial subsidy either way; and safety through the sensible safeguards which we have provided, where necessary. The electricity supply industry has been closely consulted at every stage of the Bill and their legitimate concerns have already been met by amendments in another place. If I have not covered any particular points, I will read Hansard and come back to the noble Lords as appropriate. The Government consider that this is a workable Bill and I commend it to the House.

Royal Assent
The Lord Chancellor: My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

Consolidated Fund (No. 2) Act,

British Nationality (Falkland Islands) Act,

Conwy Tunnel (Supplementary Powers) Act,

British Fishing Boats Act,

Currency Act,

Transport Act,

Greater London Council (General Powers) Act.

Adult and Continuing Education
8.48 p.m.
Lord Kilmarnock Lord Kilmarnock rose to ask Her Majesty's Government, in view of their decision not to renew the remit of the Advisory Council for Adult and Continuing Education, what steps they intend to take to promote and extend this area of education with particular reference to the Advisory Council's Report Continuing Education: From Policies to Practice and their proposals in The Case for a National Development Body for Continuing Education in England and Wales.
The noble Lord said: My Lords, in asking this Unstarred Question I want to make it clear from the outset that the assumption of the demise of the Advisory Council for Adult and Continuing Education is predicated on the parallel assumption that the Government will take some significant action in response to their major report, Continuing Education: From Policies to Practice, and their accompanying proposal for a National Development Body for Continuing Education in England and Wales.

1429
In view of the great importance of the matters raised in these two documents, it is clear that no responsible Government could do nothing, and I am sure that the present Government will not open itself to the accusation of irresponsibility in this field.
Awareness of future potential has been very much stimulated by the work of the advisory council. For instance, the model "E" option in the DES Higher Education in the Nineties made a clear case for increased participation of adults in higher education; and the PICKUP campaign for professional, industrial and commercial updating is an example of another form of continuing education for adults. Both the UGC and the NAB have recently set up working parties on the subject.
These various initiatives at present lack the cement of a national policy promoted by a national development body, which is what the advisory council is arguing for. In his letter of 23rd December last to the Secretary of State, Dr. Hoggart wrote:
"The present council is unanimous in its view that the time is now ripe for a new national body, one which will begin to translate into practice the advice we have been giving over the past five years."
Much of that advice is contained in the council's report on continuing education mentioned in my question. This is the most important report in the adult and continuing education field since the Russell Report, now nearly 10 years old. In some ways it is more important than Russell, which was restricted to adult non-vocational education. The confinement to that part of the education spectrum which we have always treated as being a poor relation was sufficient to ensure that it had little effect. The council's report, by contrast, is unrestricted in scale; it covers industrial training, the TOPS scheme, further education, the universities, and other responsible bodies as well as private correspondence courses and voluntary bodies. It gives us statistics and expenditure so far as this can be deduced from available evidence.
I am not going to comment on this part of the report because I assume that all of us who are interested, and most particularly the Government, have read it. The picture that emerges is one of "a rich and divese range of provision"—I quote from Chapter 4—which, though "widespread" is also extremely "haphazard" and has seen very little growth in real resources in the past decade, although its actual potential clients are increasing in number both for demographic reasons and on the grounds of deep structural unemployment.
However thorough the homework or illuminating the statistics, there is something else we look for in a good report which I can only call its message. What is the message here? I think we can approach it best through the concluding Chapter 13, in which the council advances some basic propositions, three of which I want to single out. The first is:
"Any highly industrialised country which cannot refute the charge that it is an under-educated society is condemning its own future".
We are certainly open to that charge in comparison with our main competitors.
The second proposition is that:
"Every country should ensure the highest possible levels of self-reliance and self-fulfilment among all its citizens, for both their individual and collective wellbeing".
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So long as we have large numbers of unemployed people to whom many part-time and most full-time educational routes are barred we are failing in this criterion also.
Thirdly:
"A democratic society can only be sustained by its individual citizens' ability to take part in and contribute to economic and social and cultural growth".
I should have thought that that was self-evident but, as Professor Dahrendorf recently pointed out in his lectures "On Britain", we are in grave danger of forcing many of our citizens into a new lumpen-proletariat or underclass.
From these propositions stems the central idea of the report, which is that initial education no longer equips people adequately for life. It is no longer sufficient to regard education as an early and finite process in preparation for adult life. The idea of holding the same job for life is becoming increasingly untenable. Accordingly, education must be regarded as a planned and continuing process. The report does not draw artificial boundaries between education and training or between vocational and general education.
After stressing the paramount importance of the ability to adapt and acquire new knowledge and skills, it says that much vocational education and training must depend on the learners having an adequate prior standard of general education. In Chapter 2.8, it points to the number of unemployed people failing the standard entrance tests for many courses in the TOPS scheme and comments:
"This exposes the simplistic distinction too often drawn between training and education".
This statement has my strongest sympathy. I have on a number of occasions in your Lordships' House drawn attention to the damage that can arise from the development of rival education and training camps where what we require is their mutual support and joint development. That there is a great need can hardly be in doubt when one learns from Chapter 2, paragraph 11 that:
"Approximately half of the adult population in Britain has had no further education or training since completing their initial education".
In many cases, that means since leaving school at 14, which is a frightening thought in the complex and rapidly-changing technological environment in which we live.
I am not going to attempt even to summarise all the remedies and measures canvassed by the advisory council. They cover priority groups, barriers to learning for adults, local guidance centres, the need for basic and post-basic courses, types of access (including open access), finance for institutions and learners, entitlement to paid educational leave, staff and retraining of staff, and legal and other matters. I rather think the noble Baroness, Lady David, will say something about the inadequate legal basis of continuing education and I also look forward to the contributions of the noble Lord, Lord McIntosh of Haringey, and the noble Baroness, Lady Carnegy of Lour. I am also particularly gratified that the noble Baroness, Lady Cox, has chosen to make this debate the occasion of her maiden speech. Their contributions will, I am sure, do much to fill the many lacunae in my remarks.
In the remaining time at my disposal I want to look at some of the council's priorities for action, which are graded into immediate, short-term, mid-term and long-term categories, although of course some of them overlap. Among the most pressing needs for immediate action is the establishment of an educational guidance service to help adults in identifying their educational needs and finding the best ways of satisfying them. Guidance centres could operate through the public library network and also through the workplace, and here not only the CBI but government departments and nationalised industries could help to make this a reality at very little cost. I also want to mention a scheme which my noble friend Lord Perry would have referred to had he not unfortunately been prevented from being here this evening: that is using the existing network of the Open University Study Centres in the additional role of adult education guidance centres, which would be another relatively cheap method because the premises are there and only the guidance centre staffs would have to be separately funded.
Then research is needed on open entry and appropriate admission procedures for adults. Another crying need is for a national information service on credit transfers so that adults can carry with them from place to place and course to course the result of their participation in pan-time and modular courses. I understand the Department of Education and Science is already working on a scheme and perhaps the noble Earl would say something about this aspect when he comes to reply.
Next, distance learning requires further research and development. It can clearly be a boon to adults but requres an appropriate tutorial framework. The council also stresses the need for local centres of continuing education which might perhaps be accomodated in surplus buildings from the initial education centre.
Here I want to pause in this list to shine my torch for a moment on to another important idea which is expressed in Chapter 7, paragraph 4, as follows:
"The decline in the size of the child population offers an unrepeatable opportunity to make continuing educational use of surplus school accommodation for the benefit of the growing proportion of adults in the population."
This, be extension, applies to higher education as well and of course to the retraining and redeployment of staff to match the shift in the age structure of the population. Only the other day I attended at Goldsmiths' College a meeting of 150 university teachers on the subject of developing part-time degrees for mature students. The noble Baroness, Lady David, was there too and I do not know whether she would agree with me but I took away the impression that there was a real readiness in the universities to adapt and cater for a far broader age range of students than at present. But here was also hesitation about going out on a limb and having it chopped off. The example of Salford, which thought it was doing the right thing and then lost 40 per cent. of its grant was quoted. I have a letter from Salford which says:
"It would be most unfortunate if at some subsequent date it was found that this activity was not helpful when the UGC assessed an institution".
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This is where a Government lead is vital. If the Government would say: "Right, that is the end of falling rolls and from now on we are going to redeploy resources, make them work better, make them work for adults and for the country", the effect could be electrifying.
I turn to the advisory council's proposals for its successor body. Its report recognises quite realistically in Chapter 13.8 that,
"the setting of priorities in the allocations of public funds for education must remain a political decision".
That is of course so. Any Government must make their own assessment of priorities for public expenditure, but not without listening carefully to expert and informed opinion. I would argue that the council has made a good case for its preferred option, which is a national development body with a fairly wide remit. But if the Government do not want to go all the way at once, they might prefer to go for a national co-ordinating agency to develop education for unemployed adults along the lines suggested in the council's report, Education for Unemployed Adults. This would have positive results in terms of enhanced employability, which should be valuable in the present national situation. The terms of reference could later be expanded in other directions.
Another possibility would be to fund a specific research and development project—for example, into unemployed adults—for a limited time. All these options would be positive, though in descending order. Perhaps I can tempt the noble Earl to put a tick in the box corresponding to one or more of them. If finance is the sticking point, may I ask him whether the Government have considered joint funding between the Department of Education and Science and the Manpower Services Commission? The council has made out a very good case for the need for a general education input for disadvantaged adults if they are to be able to gain and use new skills. A new body could act very effectively to pool resources from the two departments most concerned. If this has not been considered, will the noble Earl undertake to bring this suggestion to the attention of his colleagues and of Mr. David Young of the MSC?
I am sure we shall be told what the Government are doing already, but I hope it will be clear from the debate tonight that there is no room for complacency. The numbers of university students of mature age—that is, over 21—are down from 24 per cent. in 1979–80 to 21·7 per cent. in 1982–83. TOPS courses are currently catering for a bare half of their peak figure, which approached 100,000 adults in 1977, yet they are almost the only full-time, publicly-funded retraining provision available for adults. I gather that there is a one-year wait to get on to most courses for new technology jobs. Then, again, the social security rules governing participation by the unemployed in part-time courses, which I have here, are full of traps and pitfalls which seem positively designed to discourage self-improvement.
On all these grounds, I think we are entitled to expect from the Government a constructive answer to my Question and at least an advance response to the council's report and proposals. I know there has been mention of a statement in the spring, but the spring is

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now upon us. They have had the main report since last spring and the proposals, which are very concise, since Christmas. I hope we shall not be told the Government are still brooding on the report Education for Unemployed Adults which they have also had for some time—since, I think, September 1982—because this is confined to a specific area and should not inhibit a response on a broader front. I also hope the Government will not merely fall back on some form of interdepartmental liaison committee, which, though no doubt desirable as an adjunct to more positive action, would lack the independence, drive and separate funding of an arm's length body. If the need for more consultation is prayed in aid, I hope it will be genuine and objective consultation.
There is one course which I am clear is not seriously open to the Government, and that is to offer no successor arrangement at all to the Advisory Council for Adult and Continuing Education, because this would be to turn their backs on the whole field of continuing education, the importance of which they have already acknowledged on a number of occasions. It would be a terrible waste to build nothing on the work of the advisory council, which has accomplished so much at so little cost to the public purse. I therefore look forward with some expectation to the noble Earl's reply.
9.3 p.m.
Baroness David: My Lords, we are very grateful to the noble Lord, Lord Kilmarnock, for asking this Question tonight on an extremely important subject—a subject which I think will become increasingly important over the next few years. It also gives us an opportunity to hear the maiden speech of the noble Baroness, Lady Cox. We look forward to it. It gives us, too, an opportunity to congratulate ACACE on its remarkable achievements in the 5½ years since it was set up in 1977. It has published 30 well-researched reports as well as a number of considered responses to educational documents which have appeared during that time. Of those reports, Continuing Education: From Policies to Practice, Education for Unemployed Adults and Part-time Degree Level Study in the United Kingdom are of particular relevance tonight when we are considering The Case for a National Development Body, in which the council's own proposals for the future are outlined.
It is not certain as yet, as the noble Lord said, that the council will be brought to an end in October, but the odds are that it will. It seems very wise for the council at this stage to be making proposals for what should come after it as a follow-up. The fact that they have said that they think their job is done and that something else should happen now does not mean that they want nothing to happen. In fact, very much the opposite is the case. We hope that this document, The Case for a National Development Body, will make the Government concentrate on the possibilities in good time. Indeed, the Parliamentary Under-Secretary, Mr. Shelton, said in reply to a Question in another place that a statement would be made in the spring. Well, spring started officially a week ago. It would be very gratifying if tonight the Minister did not prevaricate and procrastinate but instead had something positive to offer.
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What I believe ACACE has achieved with relatively limited resources is to bring about a complete change of attitude. The climate of opinion has been changed. There is now, I would say, general acceptance that continuing education (a phrase I prefer to "adult education") must be a central part of the philosophy and policy of all political parties. The Labour Party produced last November a discussion document, Education after Eighteen, Expansion with Change, which advocated much easier access to post-school education at any age, a widening of financial support so that mandatory awards would be given for part-time and short advanced courses (and also for designated non-advanced courses), the establishment of an advisory and counselling system and, at a second and later stage, the introduction of adult educational entitlement for one year for all. The proposals are very similar to many of the proposals in the ACACE reports.
There can be no doubt that there is great enthusiasm for widening access for adults and for part-time degrees. As the noble Lord said, 150 university people attended the conference on part-time degrees, chaired by Dr. Hoggart, which was held at Goldsmith's College earlier this month. It was a very stimulating and lively conference. It made one feel that change was afoot and that the universities were ready and willing to play a quite new part. A lot is even now happening and this seems to be the moment to capitalise on the interest that has been engendered. The interest is not only because of the great increase in unemployment and the need for retraining, and training for leisure and early retirement, although these inevitably and obviously play a part.
Research has proved the vast unmet need among the population as a whole. The situation has been that it is the more educated adults who have demanded additional education for themselves. We now want to create a situation where the less educated and the less fortunate have far greater opportunity and encouragement to participate at any period of their lives so that the potential which is most certainly there can be realised for both the individual's and the nation's good.
What Continuing Education: From Policies to Practice points out is the inequality between expenditure on initial and continuing education. Eight to 9 per cent. of the GNP is spent on all forms of education and training. Well over half that goes to initial education. Of expenditure on education by public authorities, 85 per cent. goes to initial education, and this does seem to be a grave imbalance. The hitherto uncritically accepted belief that a single lengthy period of education in the early years of life can meet the changing needs of people throughout their lives is challenged in that report. The DES itself, when in 1980 it published Higher Education in the 1990s, can claim some credit for the shift in attitude. Model E of the options presented in that document makes a case for wider participation by adults in higher education, and the DES PICKUP campaign for professional, industrial and commercial up-dating—which the noble Lord, Lord Kilmarnock, also mentioned—is a practical example of one form of continuing education. There seems at last to be a consensus. But at this moment, some commitment to

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the future is wanted; some comprehensive system of continuing education.
Profound social and economic changes are happening and a sensible Government will surely plan for adaptability in its population. A national development body is what the council proposes. This is not a new idea. Ten years ago the Russell Report advocated it; eight years ago the Venables Report did. The national body would co-ordinate and plan, and would have three main purposes. I shall now quote from the document:

"(i) To review regularly the facilities available in England and Wales for the continuing education and training of adults.

(ii) To initiate, and respond to requests for, advice and help in the development of all aspects of continuing education and training.

(iii) To identify areas of provision in need of specific development and to undertake or sponsor innovative and experimental work so as to encourage and enable the most effective country-wide provision appropriate to particular local circumstances".

The developmental purpose outlined in (iii), which we regard as critically important for the new body, is exemplified in our recently published report on education for unemployed adults. This recommends a central co-ordinating agency for developing educational provision for unemployed adults and argues that these central functions should be discharged inter alia to a national development council for continuing education.
This national body would not conflict but rather work with existing bodies. Care would be taken to ensure that there was no unnecessary duplication. Local centres would be essential. A key element in a system of continuing education would be a network of local centres to provide ease of access for those not able to travel far; attractive settings to encourage into the education system those previously reluctant or too timid to enter education; and local bases within the community from which staff would provide education elsewhere and work at home, in local clubs, or at centres. These bases could be housed in redundant buildings becoming available through falling rolls.
The local dimension is very important to recruitment and to the advisory and couselling sevices. There are a number of ways in which the DES might respond to the ACACE proposals, and the noble Lord, Lord Kilmarnock, mentioned some of them. I should like to add another; that it could give the responsibility to an existing body, such as the National Institute of Adult Education or the Further Education Unit. It could also set up some inter-departmental machinery to facilitate liaison over different aspects of continuing education between the DES, MSC, DoI, DE, DoE, DHSS, and Home Office. But this is not a good proposal and I hope that the Government will not follow it because it seems to me that to set up something involving all departments might well be a recipe for doing nothing and shelving or putting off decisions.
I believe that it will be impossible for the Government to do nothing when the advisory council comes to the end of its remit in October; I do not think that the department could have the nerve to do nothing. Enough initiatives have been taken from it by other departments, the DoE, the DoI, and I think the field of continuing education really does give the DES a new
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chance to prove its metal and to innovate. I hope it will.
If it did nothing it would be ignoring all the facts that recent research has established and not only the ACACE research. The admirable working paper produced by the University of Nottingham Department of Adult Education Changes in Student Participation in Adult Education, which proved a large and unmet need, contained some very interesting evidence of where the numbers had fallen over the last five years, from which groups. The economic reasons they give for the falling off among manual workers, the retired, housewives, the poor, are very convincing—indeed, proved. I would just like to read the last paragraph and the conclusions of this paper:
"The long term damage to adult education is to its values and ideals. Historically adult education has been wrought out of a desire to be socially relevant to all kinds of people and, at the same time, to address itself positively to the less provileged. Thus adult education aspires to be comprehensive and lifelong, and is equally committed to egalitarian ideals as much as to individualism. Striking a balance between the latter two goals is the stuff and lifeblood of adult education and makes for its diversity, richness and interest. But the pursuit of a truly comprehensive service reaching all sections of the community is now in conflict with a narrow, economising view of adult education. The issue of fee levels is symptomatic of a deep rooted problem of priorities and values. The evidence presented in this study suggests that these are being sacrificed to a short-sighted view of adult education".
I think the DES now has its chance to redeem itself. I do hope that Ministers have taken note of this very important paper.
To return to the case for a national body outlined in the green document, funding it is suggested should be the responsibility of the DES and the Welsh Office, and there should also be a subvention from the MSC. An annual expenditure of at least 150,000 would be needed for staff and accommodation and office costs; advisory and development work with temporary staff appointments would need £1½ million, and the dissemination of findings, publications, conferences et cetera would need about £100,000, a total budget of £1·75 million which could be built up to over a period of three years. Comparisons can be made with the Adult Literary Basic Skills Unit which costs £1·35 million, and the Further Education Curriculum Review and Development Unit which costs about £2 million. Comparisons could of course be made with the Assisted Places Scheme which costs £30 million, and in Cmd. 8789: Government Expenditure Plans for 1983–84 to 1985–86, £649 million is proposed to be spent on all adult education services, and this includes the youth service. So asking for £1·75 million to be built up to over three years seems a modest demand, and only a little bit more than the transfer fee for Mr. MacGregor which we were told of today.
It will not come as a surprise to the Minister, who has had to answer my Starred Questions on two occasions in January and in February, that I should refer to the Legal Basis of Further Education which was published in June 1981, nearly two years ago. Comments were asked for by October 1981. The last answer the Minister gave me—and it was the fourth I had had, because the noble Lord, Lord Elton, replied in October and again in the debate on the Queen's Speech in November—was to the effect that the department—that is, Ministers—had not yet come to a decision. This, I may say, was after the noble Lord. Lord Elton, said in October that there would be an

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early Statement. It is imperative that the Government come to a decision on this matter. There are very many devoted workers in the field of continuing adult education who feel slighted and ignored; that the Ministers just do not care. There are the members of the advisory council itself, who have for six years done this excellent work. All workers and enthusiasts are asking for some indication of the Government's intentions and are sick of the stalling, as indeed am I.
Some legislation there will have to be. The Legal Basis of Further Education asks for it. Chapter 12 of Continuing Education: From Policies to Practice asks for it, and it contains actual proposals for revising Sections 41 and 42 of the 1944 Act, as does the Labour post-18 discussion document. I want to tell the Minister that some view, some commitment, is essential now. The Government cannot get away with it any longer. Do they want to stick to the old-fashioned, narrow view of helping chiefly the more academic in a narrow age range, or are they willing to break the mould, follow the good practice that is already going on in some places, and produce a more modern, more up to date, educated, trained, flexible and adaptable population, readier to meet the undoubted challenges and needs of the 1990s?
I hope tonight we can have some good news from the Minister and that the leading article entitled "Remember Model E" in The Times Higher Educational Supplement of 18th March, which says that Sir Keith is pondering whether to create a successor to ACACE and is being advised to do nothing—who by, I wonder?—is wrong. With the THES, I say he should reject that advice.
9.20 p.m.
Baroness Cox: My Lords, I am particularly grateful to the noble Lord, Lord Kilmarnock, for raising this Question on continuing education because it is a subject on which I feel so strongly that is has given me the courage to make my maiden speech; and I beg the indulgence of your Lordships' House on this occasion. Continuing education, as has already been emphasised, is a matter of great importance—indeed, of necessity. It is necessary for at least three reasons: first, to enable people to adapt to a society characterised by continuous technological, economic and social change; secondly, for people to realise their potential to attain personal fulfilment both in work and in recreation; and thirdly, it may also be necessary at a basic level to teach skills such as literacy or numeracy to those who, for one reason or another, are lacking them.
The question requires us to think of the future but it may be helpful first, very briefly, to touch on some of the achievements of the recent past. The Advisory Council for Adult and Continuing Education has done immensely valuable work in its publications on policies, on curriculum and programme development and on basic fact finding. There have been so many other important developments that I can only refer very briefly to two of them, ranging from the large-scale nationally available opportunities afforded by the Open University to innumerable smaller-scale, local initiatives geared to local needs such as the English as a second language courses provided in areas where there are sizeable numbers of people whose first
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language is not English. Such developments must be seen as encouraging.
If we now turn to consider ways in which future policies can build on what has already been achieved, it may be relevant to identify at least two distinct but related purposes of continuing education: first, it can make educational opportunities more widely available; and, secondly, it can serve the purpose of up-dating occupational skills and knowledge. Both are crucial. For example, with regard to the first purpose—that of increasing educational opportunity—one of the most valuable contributions of continuing education is to offer a second chance to those who missed out the first time round. The adult literacy schemes have played a valuable role in this context and the survey by the Institute of Mathematics, which showed that a disturbingly high proportion of school-leavers were incapable of tackling even very simple everyday mathematical problems, suggests that there may be scope for similar work here.
Another very valuable role for continuing education lies in offering new opportunities to older students. This is perhaps particularly important for women who have devoted many years to caring for their children. When the younger generation leave home many of these women have at least a quarter of a century of active life and service ahead of them and many welcome the chance to embark on vocational training which enables them to take on new and rewarding roles.
However, for many of these older students it is essential that facilities for continuing education are available on a part-time basis because their other commitments preclude full-time study. For this reason I particularly welcome and support the recommendation of ACACE that:
"Priorities for action should include: development of more part-time provision and complementary child-minding facilities";
and for those institutions providing part-time courses:
"Adjustment of full-time equivalency ratios to take account of the additional workloads required for part-time education".
Perhaps I should declare a personal interest at this point, as I owe both my first and my higher degrees to opportunities for part-time study. I am therefore understandably committed to policies which make part-time study more widely available. This commitment has been enhanced by many years of rewarding work for the Open University, teaching large numbers of highly motivated and splendidly enthusiastic students who deeply appreciate the opportunity to study later in life.
I now turn very briefly to that second purpose of continuing education—the updating of occupational skills and knowledge. There have been important developments here, too. If I may, I should like to draw to your Lordships' attention some recent initiatives which have occurred in my own profession of nursing. I do so (I hope with suitable maidenly modesty) because I think that these developments may have something to offer to the wider debate on the principles which underlie some of the policies of continuing education.
Nursing has been taking the question of continuing education very seriously. A recent paper from the United Kingdom Central Council for Nursing,

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Midwifery and Health Visiting states unequivocally:
"Continuing education is a sine qua non of any professional person today. Every opportunity must be offered to all professional nurses for the updating of clinical knowledge".
Recent publications from the Royal College of Nursing link a commitment to continuing education with the fundamental commitment to the provision of the highest possible standards of patient care. Indeed, so strong is this commitment that it underpins current proposals for changes in the professional career structure for nurses.
For example, it is proposed that the formal qualification, obtained at the end of initial training, is seen as just the beginning of professional education rather than a ne plus ultra. In order to be eligible for promotion to senior posts and higher salary scales, nurses will need to demonstrate that they have fulfilled specified criteria of accreditation, including the successful completion of appropriate post-basic training. In other words, there should be no automatic promotion based just on length of service, and no automatic progression through salary bars, as tends to occur in some other professions. Midwifery is even further along the road of commitment to continuing education, for midwives are required to attend regular refresher courses every five years in order to remain on the professional register and to continue in professional practice.
I have mentioned these examples of the application of the principle of continuing education in this professional context because I hope that they may be seen as exemplars of a dedicated commitment to its importance. Although they may appear tangential to the main thrust of the debate as it has been initiated, with its particular emphasis on the work of ACACE, I think they do come within its broad terms of reference. I should like to ask whether some note of this aspect of continuing education might usefully and constructively be taken into account in any considerations of future overall policy.
9.29 p.m.
Lord McIntosh of Haringey: My Lords, I have two duties at the outset. One gives me unalloyed pleasure, and it is to express on behalf of the House our appreciation of the excellent maiden speech of the noble Baroness, Lady Cox. If I may say so, I thought that she not only showed her professional knowledge but also the warmth which she feels about adult education students. That was particularly valuable to us in this debate today.
My second duty is to declare an interest. I do so because, since I am the husband of the convenor of Committee B of the Advisory Council for Adult and Continuing Education, there might be thought to be some family interest in the future of that advisory council and what might take its place. I want to say straight away that, having had the work of the advisory council flowing through our study and living room for at least five and a half years, there is at 4 Talbot Road a consensus that the advice is no longer enough and that the remit of the advisory council in anything like its present form ought not be renewed when it expires in October of this year.
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I should like to refer in particular to the aspects of continuing education which have involved me personally in work for the Manpower Services Commission and work in manpower and industrial research generally. As a starting point I take the ACACE report on the education of unemployed adults because it seems to me that that reveals in all its starkness the contrast between the kind of funding which is available to the Manpower Services Commission and the kind of funding which is being considered for the new development body for adult and continuing aducation. If I give the figures, that will be almost enough to make the point. The MSC strategies for what is in effect adult education in the wider sense in which ACACE used the term involve expenditure of roughly £280 million. The expenditure proposed by ACACE in its report on education for unemployed adults would build up to a figure of, I think, just over £15 million. The MSC has already made it clear that it does not consider that education of unemployed adults is an appropriate area for a slice of the £280 million. As my noble friend Lady David has said, the cost of the proposals for a development body for continuing education amounts to less than £2 million a year, even at the end of three years. So the quantum of money involved in the proposals is very small indeed.
Yet the importance of the need for such a body can hardly be exaggerated. I should almost go so far as to say that it will be unavoidable. My noble friend reminded us that five years ago the discussion document on Higher Education in the 1990s, put model E—the model which most closely approximates to the work of ACACE—almost as the last of the options available, as the most revoluntionary of the options available. I do not think that anybody would now say that. I believe that the fact of the decline in school populations, which in due course will be transferred to tertiary education, is well known. However, in parenthesis I must say that my youngest son, who was born in 1964, is now entering tertiary education, being a member of the largest cohort since the war, and is already feeling the effects of considerable cuts in higher education provision.
The effect of the decline in school populations will certainly result in traditional higher educators scrambling for the work (to put it at its lowest) of continuing education. The Goldsmiths conference, to which noble Lords have referred, makes it clear that that point is well appreciated in the higher education sphere, and that the flexibility which might not have been available 10 or 15 years ago towards continuing education is now very much more accepted by those working in the higher education sector.
I chose as an example the education of unemployed adults, but really the question is very much wider than that, and the other general realisation which has taken place since the publication of the discussion document on Higher Education in the 1990s is the realisation of the effect of technological change. I do not think that anyone will live through a lifetime of work without having the nature of their job changed at least once, probably twice, and maybe three times. I am reminded of a saying of my friend Michael Pentz, Dean of Science at the Open University, who said some years ago that the body of scientific knowledge from the time

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of the ancient Greeks had more than doubled since he had gained his PhD a little more than 25 years previously. That is the rate at which scientific and technological change is taking place. All of us, at one stage or another in our lives, will have to make major changes in the work we do, some of it, perhaps without adequate training, by coming to your Lordships' House. Other people have different kinds of responsibilities. It will be necessary to increase the provision, much more than has ever been accepted by Governments or by the educational world in the past, for those retraining in skills at all levels.
I carried out a survey some years ago on management education in the London area. I was able to calculate, following 500 interviews, that the amount of time spent on their own education and training by managers working in the London region was approximately two days a year—in other words, less time than they spend making up their expense claims. That position cannot persist either for management or for people working at other levels in industry and commerce and in the public sector. Something will have to be done. The need for a new initiative is virtually unstoppable.
I feel some reluctance, I must confess, to support any proposition that there should be a new body. When anyone suggests that some new institution should be established, my natural instinct is that we should be able to abolish half a dozen others in order to have a rational view of the work that is to be done. There is a real danger in all these areas—education suffers no less than any other sector—of the development of advisory bodies and co-ordinating bodies that trip over each other's heels. That must be avoided. I hope that the Government will not simply set up some other co-ordinating body—the idea of an interdepartmental committee has been criticised—to do the work that is so obviously necessary.
I think, on reflection, that this may be an exception. The number of people who will need to be involved in the provision of the wider range of continuing education that is now necessary is great. They include Government departments, local education authorities, the educational establishments at all levels, the communication industry, broadcasting and the press, those responsible for new technology in the form of data processing and video production of educational material, the trade unions, employers' organisations and community groups. One of the essences of the provision required is that it should be local and accessible to people who do not think of themselves as being in the educational market and who would be more confident if the provision was local among their neighbours in a context and an atmosphere that they could recognise. All of these must be brought together in a constructive way.
The kind of new development body proposed in the ACACE report and by Dr. Hoggart in his message to the Secretary of State last December will have a most difficult job to do. A very large number of people must work together in order to start out on the 20-year programme which ACACE envisaged in the document published last year. The problems are immense. The opportunities are very great. If we do not do anything about it now we shall certainly have to
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do something which will be much less effective in the future.
9.41 p.m.
Baroness Carnegy of Lour: My Lords, may I first join in the congratulations to my noble friend Lady Cox on an exceedingly interesting and able maiden speech. It is excellent that we are going to have her voice in our midst in the future. I rise to speak with diffidence on a matter which concerns only the area south of the Border, but I do so because I am the chairman of the Scottish Community Education Council which has precisely the type of powers which are suggested in the ACACE report. Whether this is the right solution for a much greater area nine times as large in England and Wales, I am not sure, but I do in fact deal a great deal of the time with these matters as well.
I endorse what other noble Lords have said about the quality of the council's report. It seems to me to set out with admirable clarity the reasons why wider and better access to continuing education of one sort or another will be of such importance in the coming years both to individuals and to the economy. Important decisions have to be taken about the central education, and for the whole of Great Britain for training. Whatever the solution, these two areas—education and training—can no longer be separated even though at the present time they are the responsibility of separate Government departments.
I disagree with the report about the imbalance in the funding of youth training. The whole objective of the first part of the Government's strategy is to get a proper foundation of education and training for young people on which they can build in the changing future. I also disagree with what one or two noble Lords have said in relation to the concept of talking about more provisions and better provision, in this context. "Provision" is a suitable word in some areas of what we are talking about, but not, I think, in all.
The report itself acknowledges that it is crucial, especially on the less formal side of continuing education, that people are involved in getting the continuing education going themselves, in arranging it and even in the teaching as in the learning. It seems to me that there are broadly three areas for attention and decision by the Government and those three areas are, in fact, susceptible to three different approaches.
First, there is the continuing education—to which my noble friend was referring when she was talking about the nursing profession—which is closely linked with employment, with the way in which one earns a living. The changing nature of work is not simply a matter of learning new skills. One has, at whatever level one operates, to learn to think in new ways as well. Imagination, the ability to analyse, to innovate, to see how one's work fits into the whole, demands more than simple craft training has hitherto offered. Likewise, the graduate who has learnt the theory of a certain subject, finds that his or her job involves understanding more about people, more about management, more about other subjects apart from that originally studied, if he is to be competent.
This kind of continuing education is very closely linked with training. I believe that it is entirely wrong

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to say that the Government have no strategy on this subject or will not have a strategy. The MSC is in the course of developing a consultative process at this moment on what the national strategy for adult training should be. It seems that the strategy for continuing education must be linked with this across department boundaries. I sometimes wonder whether this is not an area which is susceptible to a voucher system, a means by which people could buy their share of continuing education from time to time throughout their lives—continuing education linked with their ability to earn a living. Whatever way it is done, funding for this has partly to be found by Government, for this kind of continuing education is about the economy and about the welfare of the entire country. To leave it to employers would not be enough.
The second area is the informal learning of new things which people enjoy, which they very much want and which they desperately need in the modern world. What used to be called evening classes, ranging from keep fit and old fashioned dancing to woodwork, dressmaking and cookery, right through to the effect of the Roman occupation on modern motorways (which was the subject of such a class), used to flourish until they were knocked on the head by the doubling of teaching costs and by the inability of people to pay. As the noble Baroness, Lady David, has said, it has tended to be the educated who have sought more education in this kind of area. Here it seems that the vision in the report that there could be an enormous network of activity at not too great cost is something that really could be tackled. In many parts of the country now, including inner cities and rural villages, people are finding ways to help one another learn and enjoy one another's society as they do it. It happens during the day; it happens in the evening on every sort of subject. People of all ages are involved, including very many pensioners.
The way forward here is surely to have a few professionals acting as what one might call "multipliers"—people who could help local leadership develop in organising classes, forming classes, finding teachers and arranging accommodation and finance. In the area where I live this is happening now most successfully and most cost-effectively. People are then involved in what they are doing; they learn better, and are far more likely to come along than if provision is laid on for them. That is what attracts the already educated. The subject matter may be microcomputer programming, how to get the best out on one's electric oven, aspects of do-it-yourself, or motor car maintenance. The cost will be fixed by the people involved and in that way they will arrange it in a way that is suitable for them. So this great network across the country seems to me to be a possible way forward which really could involve the vast majority of people who want to participate.
The third aspect, which has already been mentioned, is basic education. In Great Britain we already know a lot about that. Government pump-priming which there is at present, and local education authority input have enabled many hundreds of amateur adult tutors to learn how to help a person to read, to write and to calculate. It seems to me that this should continue and develop on the lines it is at the
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moment. Therefore, there are three aspects. There is basic education, the informal leaning of new things for their own sake, which people want and need so very much, and the education linked with earning a living.
In Scotland we focus it on the Scottish Community Education Council, but the initiative on the ground mostly has to come through education authorities and through voluntary organisations. It is simply the coordinating that is done by our council. Whether this is a way for England and Wales I do not know, but I am convinced that there are enormous possibilities at not enormous cost.
9.50 p.m.
The Earl of Swinton: My Lords, I am grateful to the noble Lord, Lord Kilmarnock, for affording us this opportunity for a brief exchange of views on a subject—continuing education—which is rightly of concern not only to this House but to many well-informed interests outside it. Social and economic changes, largely related to the accelerating pace of technological development, have brought about a much wider recognition of the need for education to be seen as a process which should continue, in one way or another, throughout adult life, and not as a once-for-all process to be cut off abruptly when the individual reaches some point in his mid to late teens or, if he is relatively lucky, his early twenties.
Turning now to the terms of the noble Lord's Question, I should like to make two preliminary points. First, I hope he will not be too disappointed that I am unable this evening to give him a very specific answer. As I suspect the noble Lord himself knew, and certainly as the noble Baroness, Lady David, knew because she quoted it, in reply to a recent question in another place my honourable friend the Parliamentary Under-Secretary of State for Education explained that the Government hoped to be able to make a statement "in the spring" on ACACE's proposal for a national development body for adult and continuing education. Notwithstanding any meteorological appearances to the contrary, I thoroughly agree with the noble Baroness, Lady David, that spring begins on 21st March. I say this with absolute confidence because it happens to be my birthday, and I always say that I was born on the first day of spring. I do not think it can be said, as today I think is the 28th, that we are seriously behind schedule in our consideration of this matter.
I am sure that the noble Baroness, Lady David, would not agree that this might be the case when it comes to the Government statement on the report, the Legal Basis of Further Education. Tonight I am not going to get involved in another debate on whether sooner is sooner than shortly, or shortly is shorter than soon. Incidentally, I know that that got on to the back page of the Times Educational Supplement, and a month later it got into Private Eye. I think there might be a message there. I can only repeat that the report and the many representations on it are being considered carefully, and a statement will be made as soon as possible.
Secondly, and purely to set the record straight, I ought just to note that the terms of the noble Lord's Question embody a slight misconception, and this has

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been recognised by several noble Lords and noble Baronesses who have spoken this evening. No final decision has yet been taken about the future of ACACE when its present term expires in October. But in saying this I must not myself mislead the House. ACACE was original appointed for three years only; and when its term was extended for a further three years, the then Secretary of State explained to the council's chairman, Dr. Hoggart, that he thought this extension should be sufficient to enable the council to complete the task assigned to it. A similar view was expressed by Sir Leo Pliatzky in his Report on Non-Departmental Bodies; and I think it is fair to say that ACACE itself does not expect, nor indeed particularly wish, to be invited to continue in its present form. I am grateful to the noble Lord, Lord McIntosh of Haringey, for endorsing that.
That this should be so is in itself a tribute to what the council has been able to achieve in the six years of its existence. The council's programme of work has placed heavy demands on the time and the talents of its busy, unpaid, members, and some individuals in particular; their dedicated response to those demands is attested by an impressive list of publications. Over 20 reports have been published to date, with a further 10 or so in the pipeline, covering a wide range of topics. Some of these have been mentioned this evening. A few of the titles will give some indication of the varied ground which the council has managed to cover; Education for Unemployed Adults—which has been referred to by more than one speaker; Part-Time Degree Study in the UK; Adults' Mathematical Ability and Performance; The Arts and Adult Education; and so on. Through the council's efforts, our knowledge and understanding of the problems of a complex field have been significantly enhanced.
Proceeding through the terms of the noble Lord's Question, I come to the major report, Continuing Education: From Policies to Practice, which ACACE submitted last year to the Secretaries of State for Education and Science and for Wales. Your Lordships will not expect us to provide a comprehensive response as yet. Again, as the noble Lord, Lord McIntosh of Haringey, pointed out, many of the recommendations of this wide-ranging document are, in any case, directed to other bodies—local education authorities, individual institutions, examining bodies and so forth—and ACACE themselves recognise the long-term nature of many of the elements in their strategy, and the need for further research and discussion before any definite action is taken.
But there is a third point, which I should be less than frank if I did not make. The overall strategy proposed by ACACE is an ambitious one. Except in the most general terms, proposals in the report are not costed, and I sympathise with the council's desire to avoid a specious appearance of accuracy and objectivity in an area of considerable uncertainty. Nevertheless, the full implementation of ACACE's strategy would, undoubtedly, entail a substantial increase in public expenditure which, within current ceilings, could be met only by redistribution from other areas. This is not, I think, the time or the place for a wide-ranging debate about the allocation of resources between the main public expenditure programmes, nor even between different elements of educational
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expenditure. We all have different priorities and are rarely prepared to see our favourites cut, as we have learned during past weeks in your Lordships' House.
It follows from what I have been saying that expansion in the provision of adult and continuing education will, to a great extent, depend upon the willingness of those individual students or sponsors who can afford it to contribute as much as possible towards the real cost of provision, thus releasing resources to subsidise provision for those who cannot afford to contribute much. I quite accept that some people cannot afford much, if anything, and that it is only right and proper that special provision should be made in such cases. I am happy to say that the great majority of LEAs charge reduced fees—and, in some cases, nothing at all—to such categories of students as the handicapped, the unemployed, the elderly and persons attending courses in basic literacy and numeracy.
If I may, I will answer two specific questions which were asked of me. One was by the noble Lord, Lord Kilmarnock, and the noble Baroness. Lady David, about the use of surplus school accommodation for adult education. It is the Government's policy to reduce public expenditure, and one of the ways in which this can be done is when accommodation becomes available through the falling rolls of children. But it is for local authorities to determine, in the light of the resources available, what is to happen to that accommodation which is no longer needed as a result of falling rolls. The noble Lord, Lord Kilmarnock, also asked about joint funding for the MSC and the DES. I am delighted that he asked me that question, because there is sometimes a feeling in educational circles that the MSC is the "enemy", and I am pleased that there is some co-operation. I am glad to say that the MSC is considering the development of a strategy for adult training. The DES is in close contact with the MSC over this, and will seek to ensure that any action taken is closely complementary.
Any strategy for the future development of continuing education must seek to ensure that necessarily scarce public resources are deployed in the most effective way possible; which, in turn, involves the careful selection of priority fields for such public investment as we can afford. Let me therefore give the House a few brief examples of what is being done in certain fields which we judge, for various reasons, to be of especial importance.
I shall begin with the Government's PICKUP initiative, which was mentioned by the noble Lord, Lord Kilmarnock, and the noble Baroness, Lady David, because it illustrates a point I have been making. The initials stand for "professional, industrial, and commercial updating". The ever-increasing pace of technological change, the development of new management techniques and changes in legislation all contribute to the need for those engaged in industry and commerce to keep abreast of developments. By and large, our educational institutions have not played as extensive a part in this as they might. There are already, of course, a sufficient number of honourable exceptions to establish both the potential contribution which the education service can make and the readiness of

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employers to pay an economic price for the right product.
Many of the factors inhibiting developments, in other words, are not fundamentally financial. Rather, there exists a communications gap and, in some cases, a lack of confidence based on lack of experience. Firms do not always appreciate the contribution which our colleges of further and higher education can make to meeting their updating requirements; colleges do not always realise that these requirements exist and that the employers will pay an economic price to anyone who is able to meet them. A college which genuinely wants to help may, nevertheless, be unsure how to go about it. In terms both of course content and teaching method, in-service education for mature employees requires a measure of adaptation which colleges accustomed to providing initial vocational education for the young may find daunting.
What is needed, against this background, is a catalyst which will promote dialogue between colleges and employers, encourage the provision of better and clearer information to bring about a better match between supply and demand, and publicise examples of successful practice so that colleges not yet active in the field of post-experience vocational educational can benefit from the experience of the pioneers. The PICKUP initiative seeks to act as such a catalyst. Colleges also need help in the process of adaptation to which I have just referred, and accordingly curriculum development projects in key areas are being funded as part of the initiative.
PICKUP is an example of a form of continuing education in which it is reasonable to look for an expansion of provision on a self-financing basis, given a suitable steer and a modicum of pump-priming from the centre; but, as I have already indicated, there are other priority areas to which different considerations apply, and one such instance is the provision of education in literacy and basic skills. Here, we have carried forward the campaign begun in the 1970s, which originally focused on literacy. I was delighted that my noble friend Lady Cox, in what I thought was an excellent maiden speech, remarked upon this point. Apart from encouraging the local education authorities to make provision, and to subsidise it, we set up in 1980 the Adult Literacy and Basic Skills Unit to act as a central focus, and in particular to sponsor innovatory development projects in collaboration with LEAs and other providers; and last year we announced that grant-aid for the unit would be continued for at least a further two years, until 1985, and also extended the unit's remit to enable it to sponsor a somewhat wider range of projects. We hope to make an announcement early next year about the unit's future after 1985.
To these contrasting examples on initiatives to meet defined priorities I would add two more, In the first of the reports mentioned in the noble Lord's Question, much is rightly made of the problem customarily described by the phrase "educational barriers to entry". Alternatively, as I think my noble friend Lady Cox put it, there is need for "a second chance"—that is to say, there is the problem faced by the mature student who wishes to embark on a course of higher education but finds that he does not possess the
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necessary qualifications for entry. In fact, there is more flexibility in the system than is commonly appreciated, and what the student needs is to be able to find out, more readily than he often can at present, what opportunities are already open to him on the basis of his existing qualifications and experience. With this in mind, the Open University—and I think that here I come to the point in which the noble Lord, Lord Kilmarnock, was saying that the noble Lord, Lord Perry, was very interested—has recently been commissioned by the Department of Education and Science to set up a pilot Educational Counselling and Credit Transfer Information Service; the intention is that this pilot service, operating initially in the South-West but covering courses at all universities and polytechnics, will commence in 1984.
The last example I would mention briefly is that of pre-retirement education. I think that my noble friend Lady Carnegy of Lour is interested in this. The proportion of retired people in our society is growing and we are convinced that people are much more likely to enjoy a satisfying, active and independent retirement, and to be better able to cope with the transition from work, if they have prepared for it in advance. On the whole, I think it fair to say that this point has come to be increasingly widely appreciated in principle, but that the provision of effective pre-retirement education is not as widespread as might be wished. To support development work and disseminate good practice, the Pre-Retirement Association, who deserve much credit for their efforts in raising public awareness of the need for a well thought-out approach to the implications of retirement, have been given a three-year grant by the Department of Education.
I have left myself little time to speak of the second report to which the noble Lord's Unstarred Question alludes; but as I noted earlier in this speech, a decision has not yet been taken on ACACE's proposals for a national development body, and there is therefore little which I could properly say on this aspect of the Question. Recalling what I have said earlier in this speech, therefore, let me simply say that the need, as we see it, is to secure the optimum deployment of scarce resources to support development in those areas of continuing education which merit the highest priority—and I do not suggest, of course, that those areas are confined to the three or four which I have chosen to mention tonight. The ACACE proposal must be judged against this criterion, and on this basis it has its pros and its cons. A wide-ranging representative body can be well-placed to select key areas for development on the basis of an informed and comprehensive overview of the field; on the other hand, it may be tempted to give each potential claimant too small a slice of what must be a finite cake.
Experience suggests that some of the most successful development agencies have been those with more clearly and specifically directed remits, often over a fairly narrow range of priority areas. Against the advantages of a continuing focus are the disadvantages of quangos with indeterminite lifespans which rely on Government finance. The decision which the Government have to take on the ACACE proposal is not therefore a simple one, and in reaching that decision the Government will of course take account of the

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views expressed by noble Lords this evening, for which I am grateful.
Lord Kilmarnock: My Lords, before the noble Earl sits down may I ask him, since he prayed in aid that the first day of spring was only a week behind us, whether we can expect a more definite statement before the first day of summer?
The Earl of Swinton: My Lords, I am always very baffled about this because summertime started yesterday and it rather intrigues me, therefore, as to whether we only get six days of spring, but I do not think that the beginning of summertime necessarily heralds the beginning of summer. I cannot give a more definite answer than that to the noble Lord, I am afraid.
House adjourned at five minutes past ten o'clock.